1
Exhibit 10.5
LOAN AND SECURITY AGREEMENT
Dated as of November 17, 1999
Among
THE FINANCIAL INSTITUTIONS NAMED HEREIN
as the Lenders
and
BANK OF AMERICA, NATIONAL ASSOCIATION
as the Agent
and
WEIRTON STEEL CORPORATION
as the Borrower
2
TABLE OF CONTENTS
ARTICLE I INTERPRETATION OF THIS AGREEMENT 1
Section 1.1 Definitions. 1
Section 1.2 Accounting Terms. 17
Section 1.3 Interpretive Provisions. 17
ARTICLE II LOANS AND LETTERS OF CREDIT 18
Section 2.1 Total Facility. 18
Section 2.2 Revolving Loans. 18
Section 2.3 Letters of Credit. 25
ARTICLE III INTEREST AND FEES 31
Section 3.1 Interest. 31
Section 3.2 Conversion and Continuation Elections. 31
Section 3.3 Maximum Interest Rate. 32
Section 3.4 Commitment Fee. 33
Section 3.5 Unused Line Fee. 33
Section 3.6 Letter of Credit Fee. 33
ARTICLE IV PAYMENTS AND PREPAYMENTS 34
Section 4.1 Revolving Loans. 34
Section 4.2 Termination of Facility. 34
Section 4.3 Payments by the Borrower. 35
Section 4.4 Payments as Revolving Loans. 35
Section 4.5 Apportionment, Application and Reversal of Payments. 36
Section 4.6 Indemnity for Returned Payments. 36
Section 4.7 Agent's and Lenders' Books and Records; Monthly Statements. 37
ARTICLE V TAXES, YIELD PROTECTION AND ILLEGALITY 37
Section 5.1 Taxes. 37
Section 5.2 Illegality. 38
Section 5.3 Increased Costs and Reduction of Return. 39
Section 5.4 Funding Losses. 39
Section 5.5 Inability to Determine Rates. 40
Section 5.6 Certificates of Lenders. 40
Section 5.7 Survival. 40
ARTICLE VI COLLATERAL 40
Section 6.1 Grant of Security Interest. 40
Section 6.2 Perfection and Protection of Security Interest. 41
Section 6.3 Location of Collateral. 42
Section 6.4 Title to, Liens on, and Sale and Use of Collateral. 42
Section 6.5 Appraisals. 42
Section 6.6 Access and Examination; Confidentiality. 43
Section 6.7 Collateral Reporting. 44
i
3
Section 6.8 Collection of Accounts; Payments. 44
Section 6.9 Inventory; Perpetual Inventory. 45
Section 6.10 WRI Receivables Sale Agreements. 46
Section 6.11 Right to Cure. 46
Section 6.12 Power of Attorney. 47
Section 6.13 The Agent's and Lenders' Rights, Duties and Liabilities. 47
ARTICLE VII BOOKS AND RECORDS; FINANCIAL INFORMATION; NOTICES 48
Section 7.1 Books and Records. 48
Section 7.2 Financial Information. 48
Section 7.3 Notices to the Lenders. 50
ARTICLE VIII GENERAL WARRANTIES AND REPRESENTATIONS 51
Section 8.1 Authorization, Validity, and Enforceability of this
Agreement and the Loan Documents. 51
Section 8.2 Validity and Priority of Security Interest. 52
Section 8.3 Organization and Qualification. 52
Section 8.4 Corporate Name; Prior Transactions. 52
Section 8.5 Subsidiaries and Affiliates. 52
Section 8.6 Financial Statements and Projections. 53
Section 8.7 Solvency. 53
Section 8.8 Debt. 53
Section 8.9 Distributions. 53
Section 8.10 Title to Collateral. 53
Section 8.11 Collateral Locations. 54
Section 8.12 Trade Names and Terms of Sale. 54
Section 8.13 Litigation. 54
Section 8.14 Restrictive Agreements. 54
Section 8.15 Labor Disputes. 54
Section 8.16 Environmental Laws. 54
Section 8.17 No Violation of Law. 55
Section 8.18 No Default. 56
Section 8.19 ERISA Compliance. 56
Section 8.20 Taxes. 56
Section 8.21 Regulated Entities. 56
Section 8.22 Use of Proceeds; Margin Regulations. 57
Section 8.23 Copyrights, Patents, Trademarks and Licenses, etc. 57
Section 8.24 No Material Adverse Change. 57
Section 8.25 Year 2000 Review. 57
Section 8.26 Full Disclosure. 57
Section 8.27 Bank Accounts. 57
Section 8.28 Governmental Authorization. 58
Section 8.29 WRI Documents. 58
Section 8.30 Indenture. 58
ARTICLE IX AFFIRMATIVE AND NEGATIVE COVENANTS 58
Section 9.1 Taxes and Other Obligations. 58
ii
4
Section 9.2 Corporate Existence and Good Standing. 58
Section 9.3 Compliance with Law and Agreements; Maintenance
of Licenses. 59
Section 9.4 Maintenance of Property. 59
Section 9.5 Insurance. 59
Section 9.6 Condemnation. 60
Section 9.7 Environmental Laws. 60
Section 9.8 Compliance with ERISA. 60
Section 9.9 Mergers, Consolidations or Sales. 61
Section 9.10 Distributions; Restricted Investments. 61
Section 9.11 Debt. 61
Section 9.12 Minimum Availability. 62
Section 9.13 Amendment. 62
Section 9.14 Prepayment. 63
Section 9.15 Transactions with Affiliates. 63
Section 9.16 Business Conducted. 63
Section 9.17 Liens. 63
Section 9.18 Sale and Leaseback Transactions. 64
Section 9.19 Fiscal Year. 64
Section 9.20 Use of Proceeds. 64
Section 9.21 Further Assurances. 64
ARTICLE X CONDITIONS OF LENDING 64
Section 10.1 Conditions Precedent to Making of Loans on the
Closing Date. 64
Section 10.2 Conditions Precedent to Each Loan. 66
ARTICLE XI DEFAULT; REMEDIES 67
Section 11.1 Events of Default. 67
Section 11.2 Remedies. 70
ARTICLE XII TERM AND TERMINATION 71
Section 12.1 Term and Termination. 71
ARTICLE XIII AMENDMENTS; WAIVER; PARTICIPATIONS; ASSIGNMENTS; SUCCESSORS 71
Section 13.1 Syndication. 71
Section 13.2 No Waivers; Cumulative Remedies. 72
Section 13.3 Amendments and Waivers. 72
Section 13.4 Assignments; Participations. 73
ARTICLE XIV THE AGENT 75
Section 14.1 Appointment and Authorization. 75
Section 14.2 Delegation of Duties. 75
Section 14.3 Liability of Agent. 76
Section 14.4 Reliance by Agent. 76
Section 14.5 Notice of Default. 77
Section 14.6 Credit Decision. 77
Section 14.7 Indemnification. 77
iii
5
Section 14.8 Agent in Individual Capacity. 78
Section 14.9 Successor Agent. 78
Section 14.10 Withholding Tax; 79
Section 14.11 Collateral Matters. 80
Section 14.12 Restrictions on Actions by Lenders; Sharing of Payments; 81
Section 14.13 Agency for Perfection. 81
Section 14.14 Payments by Agent to Lenders. 82
Section 14.15 Concerning the Collateral and the Related Loan Documents. 82
Section 14.16 Field Audit and Examination Reports; Disclaimer
by Lenders. 82
Section 14.17 Relation Among Lenders. 83
ARTICLE XV MISCELLANEOUS 83
Section 15.1 Cumulative Remedies; No Prior Recourse to Collateral. 83
Section 15.2 Severability. 83
Section 15.3 Governing Law; Choice of Forum; Service of Process 83
Section 15.4 WAIVER OF JURY TRIAL. 84
Section 15.5 Survival of Representations and Warranties. 85
Section 15.6 Other Security and Guaranties. 85
Section 15.7 Fees and Expenses. 85
Section 15.8 Notices. 86
Section 15.9 Waiver of Notices. 87
Section 15.10 Binding Effect. 87
Section 15.11 Indemnity of the Agent and the Lenders by the Borrower. 87
Section 15.12 Limitation of Liability. 88
Section 15.13 Final Agreement. 88
Section 15.14 Counterparts. 88
Section 15.15 Captions. 88
Section 15.16 Right of Setoff. 89
iv
6
EXHIBITS AND SCHEDULES
EXHIBIT A FORM OF BORROWING BASE CERTIFICATE
EXHIBIT B FINANCIAL STATEMENTS
EXHIBIT C LIST OF CLOSING DOCUMENTS
EXHIBIT D NOTICE OF BORROWING
EXHIBIT E NOTICE OF CONVERSION/CONTINUATION
EXHIBIT F [FORM OF] ASSIGNMENT AND ACCEPTANCE AGREEMENT
EXHIBIT G FORM OF LANDLORD WAIVER
EXHIBIT H INDENTURE DISCLOSURES
SCHEDULE 1 - NOTICE OF ASSIGNMENT AND ACCEPTANCE
SCHEDULE 6.3 LIST OF EXECUTIVE OFFICERS AND OTHER LOCATIONS
SCHEDULE 6.9 CERTAIN INVENTORY TRANSACTIONS
SCHEDULE 7.2 OFFICER'S CERTIFICATE
SCHEDULE 8.5 SUBSIDIARIES AND AFFILIATES
SCHEDULE 8.8 DEBT
SCHEDULE 8.11 COLLATERAL LOCATIONS
SCHEDULE 8.12 TRADE NAMES AND TERMS OF SALE.
SCHEDULE 8.13 LITIGATION
SCHEDULE 8.15 LABOR DISPUTES
SCHEDULE 8.16 ENVIRONMENTAL MATTERS
SCHEDULE 8.19 ERISA COMPLIANCE
SCHEDULE 8.27 BANK ACCOUNTS
7
LOAN AND SECURITY AGREEMENT
THIS LOAN AND SECURITY AGREEMENT (this "Agreement") is dated as of
November 17, 1999, among the financial institutions listed on the signature
pages hereof (such financial institutions, together with their respective
successors and assigns, are referred to hereinafter each individually as a
"Lender" and collectively as the "Lenders"), BANK OF AMERICA, NATIONAL
ASSOCIATION, a national banking association ("Bank of America") with an office
at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, as agent for the Lenders
(in its capacity as agent, the "Agent"), and WEIRTON STEEL CORPORATION, a
Delaware corporation, with offices at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇ (the "Borrower").
W I T N E S S E T H
WHEREAS, the Borrower has requested the Lenders to make available to
the Borrower a revolving line of credit for loans and letters of credit in an
amount not to exceed $100,000,000, which extensions of credit the Borrower will
use for its working capital needs and general business purposes; and
WHEREAS, the Lenders have agreed to make available to the Borrower a
revolving credit facility upon the terms and conditions set forth in this
Agreement.
NOW, THEREFORE, in consideration of the mutual conditions and
agreements set forth in this Agreement, and for good and valuable consideration,
the receipt of which is hereby acknowledged, the Lenders, the Agent, and the
Borrower hereby agree as follows.
ARTICLE I
INTERPRETATION OF THIS AGREEMENT
Section 1.1 Definitions. As used herein:
"Accounts" means all of the Borrower's now owned or hereafter acquired
or arising accounts, and any other rights to payment for the sale or lease of
goods or rendition of services, whether or not they have been earned by
performance.
"Affiliate" means, as to any Person, any other Person which, directly
or indirectly, is in control of, is controlled by, or is under common control
with, such Person or which owns, directly or indirectly, five percent (5%) or
more of the outstanding equity interest of such Person. A Person shall be deemed
to control another Person if the controlling Person possesses, directly or
indirectly, the power to direct or cause the direction of the management and
policies of the other Person, whether through the ownership of voting
securities, by contract, or otherwise.
"Agent" means Bank of America, National Association, solely in its
capacity as agent for the Lenders, and any successor agent.
"Agent Advances" has the meaning specified in Section 2.2(i) (Agent
Advances).
-1-
8
"Agent's Liens" means the Liens in the Collateral granted to the Agent,
for the ratable benefit of the Lenders, and Agent pursuant to this Agreement and
the other Loan Documents.
"Agent-Related Persons" means the Agent and any successor agent,
together with their respective Affiliates, and the officers, directors,
employees, agents and attorneys-in-fact of such Persons and Affiliates.
"Aggregate Revolver Outstandings" means, at any time: the sum of (a)
the unpaid balance of Revolving Loans, (b) one hundred percent (100%) of the
aggregate undrawn face amount of all outstanding Letters of Credit, and (c) the
aggregate amount of any unpaid reimbursement obligations in respect of Letters
of Credit.
"Agreement" means this Loan and Security Agreement.
"Anniversary Date" means each anniversary of the Closing Date.
"Applicable Margin" means the following:
---------------------------------------- -------------------------------------- ---------------------------
For any month in which the highest Applicable Margin (on a per annum Applicable Margin (on a
Aggregate Revolver Outstandings are basis) with respect to Base Rate per annum basis) with
Revolving Loans and all other respect to LIBOR
Obligations (other than LIBOR Rate Revolving Loans
Loans)
---------------------------------------- -------------------------------------- ---------------------------
less than $20,000,000 Zero 1.50%
---------------------------------------- -------------------------------------- ---------------------------
$20,000,000 or more but less than Zero 1.75%
$45,000,000
---------------------------------------- -------------------------------------- ---------------------------
$45,000,000 or more but less than 0.25% 2.00%
$60,000,000
---------------------------------------- -------------------------------------- ---------------------------
$60,000,000 or more but less than 0.25% 2.25%
$75,000,000
---------------------------------------- -------------------------------------- ---------------------------
more than $75,000,000 0.50% 2.50%
---------------------------------------- -------------------------------------- ---------------------------
"Assignee" has the meaning specified in Section 13.4(a) (Assignments;
Participations).
"Assignment and Acceptance" has the meaning specified in Section
13.4(a) (Assignments; Participations).
"Attorney Costs" means and includes all fees, expenses and
disbursements of any law firm or other external counsel engaged by the Agent,
the allocated cost of internal legal services of the Agent and all expenses and
disbursements of internal counsel of the Agent.
"Availability" means, at any time, (a) the Borrowing Base; minus (b)
the sum of (i) the Aggregate Revolver Outstandings, (ii) reserves for accrued
interest on the Obligations, and (iii) all other reserves which the Agent deems
necessary in the exercise of its reasonable credit judgment to maintain with
respect to the Borrower's Collateral and with respect to the Obligations,
including, without limitation, reserves for any amounts which the Agent or any
Lender may be obligated to pay in the future for the account of the Borrower.
-2-
9
"Bankruptcy Code" means Title 11 of the United States Code (11
U.S.C.Section 101 et seq.).
"Base Rate" means, for any day, the rate of interest in effect for such
day as publicly announced from time to time by Bank of America, as its "prime
rate" (the "prime rate" being a rate set by Bank of America based upon various
factors including Bank of America's costs and desired return, general economic
conditions and other factors, and used as a reference point for pricing some
loans, which may be priced at, above, or below such announced rate). Any change
in the prime rate announced by Bank of America shall take effect at the opening
of business on the day specified in the public announcement of such change. Each
interest rate based upon the Base Rate shall be adjusted simultaneously with any
change in the Base Rate.
"Base Rate Loans" means, collectively, the Base Rate Revolving Loans.
"Base Rate Revolving Loan" means a Revolving Loan during any period in
which it bears interest based on the Base Rate.
"Borrowing" means a borrowing hereunder consisting of Revolving Loans
made on the same day by the Lenders to the Borrower, or by Bank of America in
the case of a Borrowing funded by Non-Ratable Loans or by the Agent in the case
of a Borrowing consisting of an Agent Advance.
"Borrowing Base" means, at any time, the sum of (i) sixty-five percent
(65%) of the value of Eligible Inventory consisting of raw materials and
finished goods, plus (ii) the lesser of (A) fifty percent (50%) of the value of
Eligible Inventory consisting of work-in-process, or (B) $40,000,000.
"Borrowing Base Certificate" means a certificate by a Responsible
Officer of the Borrower, substantially in the form of EXHIBIT A (or another form
acceptable to the Agent) setting forth the Borrowing Base and the calculation of
the Availability, including a calculation of each component thereof, (i) as of
the close of business no more than five (5) Business Days prior to the date of
such certificate if Availability is less than $40,000,000 and (ii) as of the
close of business no more than ten (10) Business Days prior to the date of such
Certificate if Availability is greater than or equal to $40,000,000, all in such
detail as shall be satisfactory to the Agent. Each Borrowing Base Certificate
shall include a certification that the Aggregate Revolver Outstandings
(including all Borrowings requested in connection with such Borrowing Base
Certificate) is not greater than fifty percent (50%) of the book value for GAAP
purposes of the Borrower's Inventory included in such Borrowing Base
Certificate. All calculations of the Borrowing Base and Availability in
connection with the preparation of any Borrowing Base Certificate shall
originally be made by the Borrower and certified to the Agent; provided, that
the Agent shall have the right to review and adjust, in the exercise of its
reasonable credit judgment, any such calculation (a) to reflect its reasonable
estimate of Availability, and (b) to the extent that such calculation is not in
accordance with this Agreement.
"Business Day" means (a) any day that is not a Saturday, Sunday, or a
day on which banks in Chicago Illinois, are required or permitted to be closed,
and (b) with respect to all notices, determinations, fundings and payments in
connection with the LIBOR Rate or LIBOR
-3-
10
Rate Loans, any day that is a Business Day pursuant to clause (a) above and that
is also a day on which trading in Dollars is carried on by and between banks in
the London interbank market.
"Capital Adequacy Regulation" means any guideline, request or directive
of any central bank or other Governmental Authority, or any other law, rule or
regulation, whether or not having the force of law, in each case, regarding
capital adequacy of any bank or of any corporation controlling a bank.
"Capital Expenditures" means capital expenditures which are required to
be included in, or reflected by, the property, plant and equipment or similar
fixed asset accounts on the balance sheet prepared in accordance with GAAP, less
cash proceeds (net of all related taxes and other expenses) from the sale or
sale-leaseback of such fixed assets.
"Capital Lease" means any lease of property by the Borrower which, in
accordance with GAAP, is or should be reflected as a capital lease on the
balance sheet of Borrower.
"Change of Control" means any Person (other than the trusts under the
Borrower's employee stock ownership plans) owns or controls more than fifty-one
percent (51%) of the aggregate voting power of the Borrower's capital stock.
"Closing Date" means the date of this Agreement.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time, and any successor statute, and regulations promulgated thereunder.
"Collateral" has the meaning specified in Section 6.1 (Grant of
Security Interest).
"Commitment" means, at any time with respect to a Lender, the principal
amount set forth beside such Lender's name under the heading "Commitment" on the
signature pages of this Agreement or on the signature page of the Assignment and
Acceptance pursuant to which such Lender became a Lender hereunder in accordance
with the provisions of Section 13.4 (Assignments; Participations), as such
Commitment may be adjusted from time to time in accordance with the provisions
of Section 13.4 (Assignments; Participations), and "Commitments" means,
collectively, the aggregate amount of the commitments of all of the Lenders.
"Commitment Fee" has the meaning specified in Section 3.4 (Commitment
Fee).
"Contaminant" means any waste, pollutant, hazardous substance, toxic
substance, hazardous waste, special waste, petroleum or petroleum-derived
substance or waste, asbestos in any form or condition, polychlorinated biphenyls
("PCBs"), or any constituent of any such substance or waste.
"Debt" means all liabilities, obligations and indebtedness of the
Borrower to any Person, of any kind or nature, now or hereafter owing, arising,
due or payable, howsoever evidenced, created, incurred, acquired or owing,
whether primary, secondary, direct, contingent, fixed or otherwise, and
including, without in any way limiting the generality of the foregoing: (a) all
Obligations; (b) all obligations and liabilities of any Person secured by any
Lien on the
-4-
11
Borrower's property, even though the Borrower shall not have assumed or become
liable for the payment thereof; provided, however, that all such obligations and
liabilities which are limited in recourse to such property shall be included in
Debt only to the extent of the book value of such property as would be shown on
a balance sheet of the Borrower prepared in accordance with GAAP; (c) all
obligations or liabilities created or arising under any Capital Lease or
conditional sale or other title retention agreement with respect to property
used or acquired by the Borrower, even if the rights and remedies of the lessor,
seller or lender thereunder are limited to repossession of such property;
provided, however, that all such obligations and liabilities which are limited
in recourse to such property shall be included in Debt only to the extent of the
book value of such property as would be shown on a balance sheet of the Borrower
prepared in accordance with GAAP; (d) all accrued pension fund and other
employee benefit plan obligations and liabilities; and (e) all obligations and
liabilities under Guaranties; provided further that (i) all contingent
liabilities shall be included in Debt only to the extent that such liabilities
would be required to be shown on a balance sheet of the Borrower prepared in
accordance with GAAP and (ii) for the purposes of Section 8.8 and 9.11 below,
"Debt" shall not include (A) accounts payable incurred in the ordinary course of
business or (B) liabilities under operating leases to the extent that such
liabilities would be not required to be shown on a balance sheet of the Borrower
prepared in accordance with GAAP.
"Debt For Borrowed Money" means, as to any Person, Debt for borrowed
money or as evidenced by notes, bonds, debentures or similar evidences of any
such Debt of such Person, the deferred and unpaid purchase price of any property
or business (other than trade accounts payable incurred in the ordinary course
of business and constituting current liabilities) and all obligations under
Capital Leases.
"Default" means any event or circumstance which, with the giving of
notice, the lapse of time, or both, would (if not cured or otherwise remedied
during such time) constitute an Event of Default.
"Defaulting Lender" has the meaning specified in Section 2.2(f)(ii)
(Making of Revolving Loans).
"Default Rate" means a fluctuating per annum interest rate at all times
equal to the sum of (a) the otherwise applicable Interest Rate plus (b) two
percent (2%). Each Default Rate shall be adjusted simultaneously with any change
in the applicable Interest Rate. In addition, with respect to Letters of Credit,
the Default Rate shall mean an increase in the Letter of Credit Fee by two (2)
percentage points.
"Distribution" means, in respect of any corporation: (a) the payment or
making of any dividend or other distribution of property in respect of capital
stock (or any options or warrants for such stock) of such corporation, other
than distributions in capital stock (or any options or warrants for such stock)
of the same class; or (b) the redemption or other acquisition by such
corporation of any capital stock (or any options or warrants for such stock) of
such corporation.
"DOL" means the United States Department of Labor or any successor
department or agency.
"Dollar" and "$" means dollars in the lawful currency of the United
States.
-5-
12
"EBITDA" means as to the Borrower for any period of determination
thereof, the sum of (a) the net profit (or loss), plus (b) interest expense and
income tax provisions for such period, plus (c) depreciation and amortization of
assets, and other non-cash charges and credits for such period (including,
without limitation, amortization of goodwill, deferred financing fees and other
intangibles), plus (d) to the extent included in the determination of the net
profit (or loss) under clause (a) above, the allocated net loss of any
Subsidiary or Affiliate of the Borrower, minus (e) to the extent included in the
determination of the net profit (or loss) under clause (a) above, the allocated
net profit of any Subsidiary or Affiliate of the Borrower, plus (f) to the
extent excluded under clause (e) above, that portion of the allocated net profit
of any Subsidiary or Affiliate of the Borrower that was distributed to the
Borrower in cash during the period of determination.
"Eligible Inventory" means Inventory, valued at the lower of cost (on a
first-in first-out basis) or market, that constitutes raw materials and first
quality finished goods and that, unless the Agent otherwise elects: (a) is not,
in the Agent's reasonable opinion, obsolete, slow moving, or unmerchantable; (b)
is located at premises owned by the Borrower or on premises otherwise reasonably
acceptable to the Agent, provided, however, that Inventory located on premises
leased to the Borrower shall not be Eligible Inventory unless the Borrower shall
have delivered to the Agent a written waiver, duly executed on behalf of the
appropriate landlord and in the form attached to this Agreement as EXHIBIT G or
otherwise in form and substance acceptable to the Agent, of all Liens which the
landlord for such premises may be entitled to assert against such Inventory, and
provided, further, that Inventory that is the subject of merchandise Letters of
Credit and in transit will be considered by the Agent for inclusion among the
Eligible Inventory if the Agent is reasonably satisfied that all documents of
title necessary to secured possession of the subject Inventory upon delivery and
upon payment under the applicable Letter of Credit are in the possession and
control of the Agent; (c) upon which the Agent for the benefit of the Lenders
has a first priority perfected security interest; (d) is not spare parts,
packaging and shipping materials, supplies, ▇▇▇▇-and-hold Inventory, returned or
defective Inventory, or Inventory delivered to the Borrower on consignment; and
(e) the Agent, in the exercise of its reasonable commercial discretion, deems
eligible as the basis for revolving loans based on such collateral and credit
criteria as the Agent may from time to time establish. If any Inventory at any
time ceases to be Eligible Inventory, such Inventory shall promptly be excluded
from the calculation of Eligible Inventory. By way of clarification, and not
limitation, of the foregoing, Eligible Inventory, and the value thereof, shall
not include standard costing reserves on raw materials, work-in-process and
finished goods; supplies; inventory over one (1) year old; non-consumable
by-products; estimated values of fuel oil and gas; and outside storage reserves
equal to 1 month of outside storage costs.
"Enforcement Costs" means all expenses, charges, costs and fees
whatsoever (including, without limitation, Attorney Costs) of any nature
whatsoever paid or incurred by or on behalf of the Agent and/or any of the
Lenders in connection with (a) any or all of the Obligations, this Agreement
and/or any of the other Loan Documents, (b) the creation, perfection,
collection, maintenance, preservation, defense, protection, realization upon,
disposition, sale or enforcement of all or any part of the Collateral, this
Agreement or any of the other Loan Documents, including, without limitation,
those costs and expenses more specifically enumerated in Section 15.7, and (c)
the monitoring, administration, processing and/or servicing of any or all of the
Obligations, the Loan Documents, and/or the Collateral.
-6-
13
"Environmental De Minimis Amount" means expenditures in the aggregate
which are less than $5,000,000.
"Environmental Laws" means all federal, state or local laws, statutes,
common law duties, rules, regulations, ordinances and codes, together with all
administrative orders, directed duties, requests, licenses, authorizations and
permits of, and agreements with, any Governmental Authority, in each case
relating to environmental, health, safety and land use matters.
"Environmental Lien" means a Lien in favor of any Governmental
Authority for (a) any liability under any Environmental Laws, or (b) damages
arising from, or costs incurred by such Governmental Authority in response to, a
Release or threatened Release of a Contaminant into the environment.
"ERISA" means the Employee Retirement Income Security Act of 1974, and
regulations promulgated thereunder.
"ERISA Affiliate" means any trade or business (whether or not
incorporated) under common control with the Borrower within the meaning of
Section 414(b) or (c) of the Code (and Sections 414(m) and (o) of the Code for
purposes of provisions relating to Section 412 of the Code).
"ERISA Event" means (a) a Reportable Event with respect to a Pension
Plan; (b) a withdrawal by the Borrower or any ERISA Affiliate from a Pension
Plan subject to Section 4063 of ERISA during a plan year in which it was a
substantial employer (as defined in Section 4001(a)(2) of ERISA) or a cessation
of operations which is treated as such a withdrawal under Section 4062(e) of
ERISA; (c) a complete or partial withdrawal by the Borrower or any ERISA
Affiliate from a Multi-employer Plan or notification that a Multi-employer Plan
is in reorganization; (d) the filing of a notice of intent to terminate, the
treatment of a Plan amendment as a termination under Section 4041 or 4041A of
ERISA, or the commencement of proceedings by the PBGC to terminate a Pension
Plan or Multi-employer Plan; (e) the occurrence of an event or condition which
might reasonably be expected to constitute grounds under Section 4042 of ERISA
for the termination of, or the appointment of a trustee to administer, any
Pension Plan or Multi-employer Plan; or (f) the imposition of any liability
under Title IV of ERISA, other than for PBGC premiums due but not delinquent
under Section 4007 of ERISA, upon the Borrower or any ERISA Affiliate.
"Event of Default" has the meaning specified in Section 11.1 (Events of
Default).
"Excess Cash Flow" means for any annual period of determination, a
positive difference between EBITDA minus Fixed Charges for the applicable
periods.
"Exchange Act" means the Securities Exchange Act of 1934, and
regulations promulgated thereunder.
"FDIC" means the Federal Deposit Insurance Corporation, and any
Governmental Authority succeeding to any of its principal functions.
-7-
14
"Federal Funds Rate" means, for any day, the rate set forth in the
weekly statistical release designated as H.15(519), or any successor
publication, published by the Federal Reserve Bank of New York (including any
such successor, "H.15(519)") on the preceding Business Day opposite the caption
"Federal Funds (Effective)"; or, if for any relevant day such rate is not so
published on any such preceding Business Day, the rate for such day will be the
arithmetic mean as determined by the Agent of the rates for the last transaction
in overnight Federal funds arranged prior to 9:00 a.m. (New York City time) on
that day by each of three leading brokers of Federal funds transactions in New
York City selected by the Agent.
"Federal Reserve Board" means the Board of Governors of the Federal
Reserve System or any successor thereto.
"Financial Statements" means, according to the context in which it is
used, the financial statements referred to in Section 8.6 (Financial Statements
and Projections) or any other financial statements required to be given to the
Lenders pursuant to this Agreement.
"Financing Documents" means the Loan Documents.
"Fiscal Year" means the Borrower's fiscal year for financial accounting
purposes. The current Fiscal Year of the Borrower will end on December 31, 1999.
"Fixed Charge Coverage Ratio" means the ratio of the Borrower's EBITDA
to its Fixed Charges tested as of the last day of each month for the twelve (12)
month period ending on that date.
"Fixed Charges" means the sum of (a) interest expense, whether paid or
accrued, plus (b) cash taxes paid, plus (c) cash dividend payments, plus (d)
principal payments on Debt For Borrowed Money (excluding payments on the
Revolving Loans) plus (e) Capital Expenditures that are not financed (by loan,
capital lease or otherwise) or that are financed with proceeds of the Revolving
Loans, plus (f) payments which are required to be made to fund Borrower's past
Unfunded Pension Liabilities.
"Funding Date" means the date on which a Borrowing occurs.
"GAAP" means generally accepted accounting principles set forth from
time to time in the opinions and pronouncements of the Accounting Principles
Board and the American Institute of Certified Public Accountants and statements
and pronouncements of the Financial Accounting Standards Board (or agencies with
similar functions of comparable stature and authority within the U.S. accounting
profession), which are applicable to the circumstances as of the Closing Date.
"Governmental Authority" means any nation or government, any state or
other political subdivision thereof, any central bank (or similar monetary or
regulatory authority) thereof, any entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to government,
and any corporation or other entity owned or controlled, through stock or
capital ownership or otherwise, by any of the foregoing.
-8-
15
"Guaranty" means, with respect to any Person, all obligations of such
Person which in any manner directly or indirectly guarantee or assure, or in
effect guarantee or assure, the payment or performance of any indebtedness,
dividend or other obligations of any other Person (the "guaranteed
obligations"), or assure or in effect assure the holder of the guaranteed
obligations against loss in respect thereof, including, without limitation, any
such obligations incurred through an agreement, contingent or otherwise: (a) to
purchase the guaranteed obligations or any property constituting security
therefor; (b) to advance or supply funds for the purchase or payment of the
guaranteed obligations or to maintain a working capital or other balance sheet
condition; or (c) to lease property or to purchase any debt or equity securities
or other property or services.
"Indenture" means collectively (i) that certain Indenture dated as of
July 3, 1996 between the Borrower and Bankers Trust Company, Trustee relating to
the Borrower's aggregate $125,000,000 11 3/8% Senior Notes Due 2004, and (ii)
that certain Indenture dated as of June 12, 1995 relating to the Borrower's
aggregate $125,000,000 10 3/4% Senior Notes Due 2005.
"Intercompany Accounts" means all assets and liabilities, however
arising, which are due to the Borrower from, which are due from the Borrower to,
or which otherwise arise from any transaction by the Borrower with, any
Affiliate of the Borrower.
"Interest Period" means, as to any LIBOR Rate Loan, the period
commencing on the Funding Date of such Loan or on the Conversion/Continuation
Date on which the Loan is converted into or continued as a LIBOR Rate Loan, and
ending on the date one, two, three or six months thereafter as selected by the
Borrower in its Notice of Borrowing in the form attached hereto as Exhibit D or
Notice of Conversion/Continuation in the form attached hereto as Exhibit E;
provided that:
(a) if any Interest Period would otherwise end on a day that
is not a Business Day, that Interest Period shall be extended to the
following Business Day unless the result of such extension would be to
carry such Interest Period into another calendar month, in which event
such Interest Period shall end on the preceding Business Day;
(b) any Interest Period pertaining to a LIBOR Rate Loan that
begins on the last Business Day of a calendar month (or on a day for
which there is no numerically corresponding day in the calendar month
at the end of such Interest Period) shall end on the last Business Day
of the calendar month at the end of such Interest Period; and
(c) no Interest Period shall extend beyond the Stated
Termination Date.
"Interest Rate" means each or any of the interest rates, including the
Default Rate, set forth in Section 3.1 (Interest).
"Inventory" means all inventory of the Borrower and all right, title
and interest of the Borrower in and to all of its now owned and hereafter
acquired goods, merchandise and other personal property furnished under any
contract of service or intended for sale or lease, including, without
limitation, all raw materials, work-in-process, finished goods and materials and
supplies of any kind, nature or description which are used or consumed in the
Borrower's business or are or might be used in connection with the manufacture,
packing, shipping, advertising, selling or
-9-
16
finishing of such goods, merchandise, and warranties and other personal property
and all documents of title or documents relating to the same.
"IRS" means the Internal Revenue Service and any Governmental Authority
succeeding to any of its principal functions under the Code.
"Latest Projections" means: (a) on the Closing Date and thereafter
until the Agent receives new projections pursuant to Section 7.2(e) (Forecasts),
the projections of the Borrower's financial condition, results of operations,
and cash flow, for the period commencing on October 5, 1999 and ending on
December 31, 2000, and delivered to the Agent prior to the Closing Date; and (b)
thereafter, the projections most recently received by the Agent pursuant to
Section 7.2(e) (Forecasts).
"Laws" means all ordinances, statutes, rules, regulations, orders,
injunctions, writs, or decrees of any Governmental Authority.
"Lender" and "Lenders" have the meanings specified in the introductory
paragraph hereof and shall include the Agent to the extent of any Agent Advance
outstanding and Bank of America to the extent of any Non-Ratable Loan
outstanding; provided that no such Agent Advance or Non-Ratable Loan shall be
taken into account in determining any Lender's Pro Rata Share.
"Letter of Credit" means a letter of credit issued or caused to be
issued for the account of the Borrower pursuant to Section 2.3 (Letters of
Credit).
"Letter of Credit Fee" has the meaning specified in Section 3.6 (Letter
of Credit Fees).
"LIBOR Interest Payment Date" means, with respect to a LIBOR Rate Loan,
the last day of each Interest Period applicable to such Loan and, with respect
to any Interest Period in excess of three months, the last day of the third
month of the Interest Period.
"LIBOR Rate" means, for any Interest Period, with respect to LIBOR Rate
Loans comprising part of the same Borrowing, the rate of interest per annum
(rounded upward to the next 1/1000th of 1.0%) at which dollar deposits in the
approximate amount of the Loan to be made or continued as, or converted into, a
LIBOR Rate Loan and having a maturity comparable to such Interest Period would
be offered by the Agent's applicable lending office to major banks in the London
eurodollar market at approximately 11:00 a.m. (London time) two (2) Business
Days prior to the commencement of such Interest Period.
"LIBOR Rate Loans" means, collectively, the LIBOR Revolving Loans.
"LIBOR Revolving Loan" means a Revolving Loan during any period in
which it bears interest based on the LIBOR Rate.
"Lien" means any interest in property securing an obligation owed to,
or a claim by, a Person other than the owner of the property, whether such
interest is based on the common law, statute, or contract, and including without
limitation, a security interest, charge, claim, or lien arising from a mortgage,
deed of trust, encumbrance, pledge, hypothecation, assignment, deposit
-10-
17
arrangement, agreement, security agreement, conditional sale or trust receipt or
a lease, consignment or bailment for security purposes.
"Loan Account" means the loan account of the Borrower, which account
shall be maintained by the Agent.
"Loan Documents" means this Agreement, the WRI Intercreditor Agreement,
and any other agreements, instruments, and documents heretofore, now or
hereafter evidencing, securing, guaranteeing or otherwise relating to the
Obligations, the Collateral, or any other aspect of the transactions
contemplated by this Agreement.
"Loans" means, collectively, all loans and advances provided for in
ARTICLE II (Loans and Letters of Credit); and "Loan" means each of the Loans.
"Majority Lenders" means at anytime Lenders whose Pro Rata Shares
aggregate more than 66-2/3% of the Commitments or, if no Commitments shall then
be in effect, Lenders who hold more than 66-2/3% of the aggregate principal
amount of the Loans then outstanding.
"Margin Stock" means "margin stock" as such term is defined in
Regulation T, U or X of the Federal Reserve Board.
"Material Adverse Effect" means (a) a material adverse change in, or a
material adverse effect upon, the operations, business, properties or condition
(financial or otherwise) of the Borrower or the Collateral; (b) a material
impairment of the ability of the Borrower to perform under any Loan Document and
to avoid any Event of Default; or (c) a material adverse effect upon the
legality, validity, binding effect or enforceability against the Borrower of any
Loan Document.
"Maximum Revolver Amount" means $100,000,000.
"Multi-employer Plan" means a "multi-employer plan" as defined in
Section 4001(a)(3) of ERISA that is or was at any time during the current year
or the immediately preceding six (6) years contributed to by the Borrower or any
ERISA Affiliate.
"Non-Ratable Loan" and "Non-Ratable Loans" have the meanings specified
in Section 2.2(h).
"Notice of Borrowing" has the meaning specified in Section 2.2(b)
(Procedure for Borrowing).
"Notice of Conversion/Continuation" has the meaning specified in
Section 3.2(b) (Notice).
"Obligations" means all present and future loans, advances,
liabilities, obligations, covenants, duties, and debts owing by the Borrower to
the Agent and/or any Lender, arising under or pursuant to this Agreement or any
of the other Loan Documents, whether or not evidenced by any note, or other
instrument or document, whether arising from an extension of credit, opening of
a letter of credit, acceptance, loan, guaranty, indemnification or otherwise,
-11-
18
whether direct or indirect (including, without limitation, those acquired by
assignment from others, and any participation by the Agent and/or any Lender in
the Borrower's debts owing to others), absolute or contingent, due or to become
due, primary or secondary, as principal or guarantor, and including, without
limitation, all principal, interest, charges, expenses, fees, attorneys' fees,
filing fees and any other sums chargeable to the Borrower hereunder or under any
of the other Loan Documents. "Obligations" includes, without limitation, all
debts, liabilities, and obligations now or hereafter owing from the Borrower to
the Agent and/or any Lender under or in connection with the Letters of Credit or
Swap Transactions.
"Other Taxes" means any present or future stamp or documentary taxes or
any other excise or property taxes, charges or similar levies which arise from
any payment made hereunder or from the execution, delivery or registration of,
or otherwise with respect to, this Agreement or any other Loan Documents.
"Participant" means any Person who shall have been granted the right by
any Lender to participate in the financing provided by such Lender under this
Agreement, and who shall have entered into a participation agreement in form and
substance satisfactory to such Lender.
"Payment Account" means each blocked bank account established pursuant
to Section 6.8 (Collection of Accounts; Payments), to which the funds of the
Borrower (including, without limitation, proceeds of Accounts not included in
the WRI Assets and other Collateral) are deposited or credited, and which is
maintained in the name of the Agent or the Borrower, as the Agent may determine,
on terms acceptable to the Agent.
"PBGC" means the Pension Benefit Guaranty Corporation or any
Governmental Authority succeeding to the functions thereof.
"Pending Revolving Loans" means, at any time, the aggregate principal
amount of all Revolving Loans requested in any Notice(s) of Borrowing received
by the Agent that have not yet been advanced.
"Pension Plan" means a pension plan (as defined in Section 3(2) of
ERISA) subject to Title IV of ERISA which the Borrower sponsors, maintains, or
to which it makes, is making, or is obligated to make contributions, or in the
case of a Multi-employer Plan has made contributions at any time during the
immediately preceding five (5) plan years.
"Permitted Liens" means (a) the Agent's Liens; (b) Liens on real or
personal property of, or any shares of stock of or debt of, any corporation
existing at the time such corporation becomes a Subsidiary of the Borrower or at
the time such corporation is merged into the Borrower or a Subsidiary of the
Borrower, (c) Liens in favor of governmental bodies to secure progress or
advance payments, (d) Liens securing industrial revenue or pollution control
bonds, (e) statutory Liens or landlords', carriers', warehousemen's, mechanics',
suppliers', materialmen's, repairmen's or other like Liens arising in the
ordinary course of business, which Liens have been filed with the appropriate
Governmental Authority and for which a dollar amount is ascertainable, and with
respect to amounts not yet delinquent or, being contested in good faith by
appropriate proceedings, if a reserve or other appropriate provision, if any, as
shall be required in conformity with GAAP and, if the Agent so elects or if the
Majority Lenders so
-12-
19
direct, shall be established against the Borrowing Base, and the aggregate
amount of any such Liens which are not inchoate does not exceed $5,000,000, (f)
the true sale of the WRI Assets pursuant to the WRI Receivables Sale Agreement,
or (g) any extensions, renewals or replacements of Liens referred to in clauses
(a) through (d) above.
"Person" means any individual, sole proprietorship, partnership, joint
venture, trust, unincorporated organization, association, corporation,
Governmental Authority, or any other entity.
"Plan" means an employee benefit plan (as defined in Section 3(3) of
ERISA) which the Borrower sponsors or maintains or to which the Borrower makes,
is making, or is obligated to make contributions and includes any Pension Plan.
"Post-Default Rate" means the Default Rate.
"Premises" means the land on which the Borrower's manufacturing and
related storage and other operations are conducted, together with all buildings,
improvements, and fixtures thereon and all tenements, hereditaments, and
appurtenances belonging or in any way appertaining thereto, and which
constitutes all of the real property in which the Borrower has any interests on
the Closing Date.
"Proceeds" means "proceeds" (as that term is defined under Section
9-306 (or any successor section) of the UCC) of Inventory including, without
limitation, cash and non-cash and insurance proceeds, and all presently existing
or hereafter acquired, arising or created accounts receivable and related
intangibles arising from the sale of Inventory and all proceeds thereof unless
and until the same become WRI Assets.
"Pro Rata Share" means, with respect to a Lender, a fraction (expressed
as a percentage), the numerator of which is the amount of such Lender's
Commitment and the denominator of which is the sum of the amounts of all of the
Lenders' Commitments, or if no Commitments are outstanding, a fraction
(expressed as a percentage), the numerator of which is the amount of Obligations
owed to such Lender and the denominator of which is the aggregate amount of the
Obligations owed to the Lenders, in each case giving effect to a Lender's
participation in Non-Ratable Loans and Agent Advances.
"Release" means a release, spill, emission, leaking, pumping,
injection, deposit, disposal, discharge, dispersal, leaching or migration of a
Contaminant into the indoor or outdoor environment or into or out of any real
estate or other property, including the movement of Contaminants through or in
the air, soil, surface water, groundwater or real estate or other property.
"Reportable Event" means, any of the events set forth in Section
4043(b) of ERISA or the regulations thereunder, other than any such event for
which the 30-day notice requirement under ERISA has been waived in regulations
issued by the PBGC.
"Required Lenders" means at any time Lenders whose Pro Rata Shares
aggregate more than 51% of the Commitments or, if no Commitments shall then be
in effect, Lenders who hold more than 51% of the aggregate principal amount of
the Loans then outstanding.
-13-
20
"Requirement of Law" means, as to any Person, any law (statutory or
common), treaty, rule or regulation or determination of an arbitrator or of a
Governmental Authority, in each case applicable to or binding upon the Person or
any of its property or to which the Person or any of its property is subject.
"Responsible Officer" means the chief executive officer, the president,
the chief financial officer, any executive vice president or senior vice
president or the treasurer of the Borrower, or any other officer having
substantially the same authority and responsibility.
"Restricted Investment" means, as to any Person, any acquisition of
property by such Person in exchange for cash or other property, whether in the
form of an acquisition of stock, debt, or other indebtedness or obligation, or
the purchase or acquisition of any other property, or a loan, advance, capital
contribution, or subscription, except acquisitions of the following: (a)
equipment to be used in the business of the Borrower; (b) Inventory in the
ordinary course of business; (c) current assets arising from the sale or lease
of goods or the rendition of services in the ordinary course of business of the
Borrower; (d) direct obligations of the United States of America, or any agency
thereof, or obligations guaranteed by the United States of America, provided
that such obligations mature within one year from the date of acquisition
thereof; (e) certificates of deposit maturing within one year from the date of
acquisition, bankers' acceptances, Eurodollar bank deposits, or overnight bank
deposits, in each case issued by, created by, or with a bank or trust company
organized under the laws of the United States or any state thereof having
capital and surplus aggregating at least $100,000,000; and (f) commercial paper
given a rating of "A2" or better by Standard & Poor's Corporation or "P2" or
better by ▇▇▇▇▇'▇ Investors Service, Inc. and maturing not more than 90 days
from the date of creation thereof;
"Revolving Loans" has the meaning specified in Section 2.2 (Revolving
Loans) and includes, without limitation, each Agent Advance and Non-Ratable
Loan.
"Settlement" and "Settlement Date" have the meanings specified in
Section 2.2(h)(i) (Settlement).
"Solvent" means when used with respect to any Person that at the time
of determination:
(a) the assets of such Person, at a fair valuation, are in
excess of the total amount of its debts (including, without limitation,
contingent liabilities); and
(b) the present fair saleable value of its assets is greater
than its probable liability on its existing debts as such debts become
absolute and matured; and
(c) it is then able and expects to be able to pay its debts
(including, without limitation, contingent debts and other commitments)
as they mature; and
(d) it is not, nor about to be, engaged in any transaction for
which it has unreasonably small capital.
For purposes of determining whether a Person is Solvent, the amount of any
contingent liability shall be computed as the amount that, in light of all the
facts and circumstances existing at such
-14-
21
time, represents the amount that can reasonably be expected to become an actual
or matured liability.
"Stated Termination Date" means October 31, 2004.
"Subsidiary" of a Person means any corporation, association,
partnership, joint venture or other business entity of which more than fifty
percent (50%) of the voting stock or other equity interests (in the case of
Persons other than corporations), is owned or controlled directly or indirectly
by the Person, or one or more of the Subsidiaries of the Person, or a
combination thereof. Unless the context otherwise clearly requires, references
herein to a "Subsidiary" refer to a Subsidiary of the Borrower.
"Swap Transactions" means any interest rate swap transaction, forward
rate transaction, treasury lock transaction, interest rate cap, floor or collar
transaction, any similar transaction, any option to enter into any of the
foregoing, or any combination of any of the foregoing, that are entered into by
the Borrower and the Agent and that expressly provide that they are secured by
the security interest granted under this Agreement.
"Taxes" means any and all present or future taxes, levies, imposts,
deductions, charges or withholdings, and all liabilities with respect thereto,
excluding, in the case of each Lender and the Agent, such taxes (including
income taxes or franchise taxes) as are imposed on or measured by each Lender's
net income by the jurisdiction (or any political subdivision thereof) under the
laws of which such Lender or the Agent, as the case may be, is organized or
maintains a lending office.
"Termination Date" means the earliest to occur of (a) the Stated
Termination Date, (b) the date the Total Facility is terminated either by the
Borrower pursuant to Section 4.2 (Termination of Facility) or by the Majority
Lenders pursuant to Section 11.2 (Remedies), and (c) the date this Agreement is
otherwise terminated for any reason whatsoever.
"Total Facility" has the meaning specified in Section 2.1 (Total
Facility).
"UCC" means the Uniform Commercial Code (or any successor statute) of
the State of Illinois or of any other state the laws of which are required by
Section 9-103 thereof to be applied in connection with the issue of perfection
of security interests in the Collateral.
"Unfunded Pension Liability" means the excess of a Plan's benefit
liabilities under Section 4001(a)(16) of ERISA, over the current value of that
Plan's assets, determined in accordance with the assumptions used for funding
the Pension Plan pursuant to Section 412 of the Code for the applicable plan
year.
"Unused Letter of Credit Subfacility" means an amount equal to
$40,000,000 minus the sum of (a) the aggregate undrawn amount of all outstanding
Letters of Credit plus (b) the aggregate unpaid reimbursement obligations with
respect to all Letters of Credit.
"Unused Line Fee" has the meaning specified in Section 3.5 (Unused Line
Fee).
"WRI" means Weirton Receivables, Inc., a Delaware corporation.
-15-
22
"WRI Assets" means all "Receivables" (as that term is defined in the
WRI Receivables Sale Agreement), "Related Security" (as that term is defined in
the WRI Receivables Sale Agreement) relating to such Receivables, and
"Collections" (as that term is defined in the WRI Receivables Sale Agreement)
with respect to and other proceeds of such Receivables and such Related Security
that are the subject of the WRI Receivables Sale Agreements. Capitalized terms
used in this definition not otherwise defined herein shall have the meanings set
forth in WRI Documents as previously delivered to Agent on or before the Closing
Date.
"WRI Default" means:
(a) a Termination Event (as that term is defined in the WRI
Participation Agreements); or
(b) the Facility Termination Date (as that term is defined in
the WRI Participation Agreements) or the termination of the agreement
of the Borrower to sell or the agreement of WRI to purchase WRI Assets;
or
(c) the Borrower is no longer the Servicer (as that term is
defined in the WRI Participation Agreements); or
(d) a Sub-Servicer (as that term is defined in the WRI
Participation Agreements) is appointed without the Agent's prior
written consent, which consent shall not be unreasonably withheld or
delayed; provided, that Borrower's voluntary appointment of an
Affiliate as a Sub-Servicer shall not constitute a WRI Default if such
Sub-Servicer agrees to be bound by the WRI Intercreditor Agreement and
Section 6.8 (Collection of Accounts; Payments) of this Agreement.
"WRI Documents" means the collective reference to the WRI Receivables
Sales Agreement, the WRI Participation Agreements, and all other material
agreements, documents or instruments (together with any and all other material
amendments, modifications, and supplements thereto, restatements thereof, and
substitutes therefor) previously, now or hereafter executed and delivered by the
Borrower, WRI, or any other Person in connection with the WRI Obligations and
the transactions contemplated by the WRI Receivables Sale Agreements.
"WRI Intercreditor Agreement" means that certain Intercreditor
Agreement dated on or about the date of this Agreement by and among the
Borrower, WRI, the Agent, and the WRI Participation Agent.
"WRI L/C Notes" means those certain "L/C Notes" issued by WRI in favor
of the Borrower and further described in the WRI Receivables Sale Agreements.
"WRI Notes" means the collective reference to the WRI L/C Notes and the
WRI Short-Term Notes.
"WRI Obligations" means the collective reference to all indebtedness,
obligations and liabilities of WRI to the Borrower whether now existing or
hereafter arising, including, without
-16-
23
limitation, indebtedness, obligations and liabilities that are fixed or
contingent, evidenced by the WRI Notes, or otherwise arising or evidenced.
"WRI Participation Agent" means PNC Bank, National Association, as
facility agent and collateral agent under the WRI Participation Agreements.
"WRI Participation Agreements" means the collective reference to that
certain Amended and Restated Receivables Participation Agreement dated as of
March 26, 1999, and that certain Amended and Restated Ball Receivables
Participation Agreement dated as of August 6, 1999, by and among WRI, the
Borrower, the WRI Participation Agent, and the respective financial institutions
party thereto.
"WRI Receivables Sale Agreements" means the collective reference to
that certain Amended and Restated Receivables Purchase and Sale Agreement dated
as of March 26, 1999, by and between WRI and the Borrower and that certain
Receivables Purchase and Sale Agreement dated as of August 6, 1999 by and
between WRI and the Borrower.
"WRI Short-Term Note" means that each "Short-Term Note" issued by WRI
in favor of the Borrower and further described in the WRI Receivables Sale
Agreements.
"WRI Stock" means the collective reference to all of the common stock
of, preferred stock of and other equity interests in WRI, and all rights related
thereto including, without limitation, dividends.
Section 1.2 Accounting Terms.
Any accounting term used in this Agreement shall have, unless otherwise
specifically provided herein, the meaning customarily given in accordance with
GAAP, and all financial computations hereunder shall be computed, unless
otherwise specifically provided herein, in accordance with GAAP as consistently
applied and using the same method for inventory valuation as used in the
preparation of the Financial Statements.
Section 1.3 Interpretive Provisions.
(a) The meanings of defined terms are equally applicable to
the singular and plural forms of the defined terms.
(b) The words "hereof," "herein," "hereunder" and similar
words refer to this Agreement as a whole and not to any particular provision of
this Agreement; and Subsection, Section, Schedule and Exhibit references are to
this Agreement unless otherwise specified.
(c) (i) The term "documents" includes any and all instruments,
documents, agreements, certificates, indentures, notices and other writings,
however evidenced.
(ii) The term "including" is not limiting and means
"including without limitation."
-17-
24
(iii) In the computation of periods of time from a
specified date to a later specified date, the word "from" means "from and
including," the words "to" and "until" each mean "to but excluding" and the word
"through" means "to and including."
(d) Unless otherwise expressly provided herein, (i) references to
agreements (including this Agreement) and other contractual instruments shall be
deemed to include all subsequent amendments and other modifications thereto, but
only to the extent such amendments and other modifications are not prohibited by
the terms of any Loan Document, and (ii) references to any statute or regulation
are to be construed as including all statutory and regulatory provisions
consolidating, amending, replacing, supplementing or interpreting the statute or
regulation.
(e) The captions and headings of this Agreement are for convenience of
reference only and shall not affect the interpretation of this Agreement.
(f) This Agreement and other Loan Documents may use several different
limitations, tests or measurements to regulate the same or similar matters. All
such limitations, tests and measurements are cumulative and shall each be
performed in accordance with their terms.
(g) This Agreement and the other Loan Documents are the result of
negotiations among and have been reviewed by counsel to the Agent, the Borrower
and the other parties, and are the products of all parties. Accordingly, they
shall not be construed against the Lenders or the Agent merely because of the
Agent's or Lenders' involvement in their preparation.
(h) This Agreement may sometimes be referred to in the other Loan
Documents or elsewhere as the "Loan Agreement" or the "Financing Agreement."
ARTICLE II
LOANS AND LETTERS OF CREDIT
Section 2.1 Total Facility.
Subject to all of the terms and conditions of this Agreement, the
Lenders severally agree to make available a total credit facility of up to the
Maximum Revolver Amount (the "Total Facility") for the Borrower's use from time
to time during the term of this Agreement. The Total Facility shall be comprised
of a revolving line of credit consisting of revolving loans and letters of
credit up to the Maximum Revolver Amount, as described in Section 2.2 (Revolving
Loans) and Section 2.3 (Letters of Credit).
Section 2.2 Revolving Loans.
(a) Amounts. Subject to the satisfaction of the conditions precedent
set forth in ARTICLE X (Conditions of Lending), each Lender severally agrees,
upon the Borrower's request from time to time on any Business Day during the
period from the Closing Date to the Termination Date, to make revolving loans
(the "Revolving Loans") to the Borrower, in amounts not to exceed (except for
Bank of America with respect to Non-Ratable Loans and except for the Agent with
respect to Agent Advances) such Lender's Pro Rata Share of the least of (x) the
Borrower's Availability and (y) the Maximum Revolver Amount minus the Aggregate
Revolver
-18-
25
Outstandings and (z) fifty percent (50%) of value of the Inventory of the
Borrower as reflected on the consolidated financial statements of the Borrower.
The Lenders, however, in their discretion, may elect to make Revolving Loans or
participate (as provided for in Section 2.3(f) (Participations)) in the Letters
of Credit in excess of the Availability on one or more occasions, but if they do
so, neither the Agent nor the Lenders shall be deemed thereby to have changed
the limits of the Maximum Revolver Amount or the Availability or to be obligated
to exceed such limits on any other occasion. If Availability is zero ($0) or
less (or would be zero ($0) or less after giving effect to Pending Revolving
Loans), the Lenders may refuse to make or otherwise restrict the making of
Revolving Loans as the Lenders determine until such deficiency has been
eliminated, subject to the Agent's authority, in its sole discretion, to make
Agent Advances pursuant to the terms of Section 2.2(i) (Agent Advances). Any
amount by which the Aggregate Revolver Outstandings exceed (x) the Borrower's
Availability or (y) the Maximum Revolver Amount shall be due and payable on
demand by the Agent in the exercise of its sole and absolute discretion from
time to time or at the direction of the Majority Lenders.
(b) Procedure for Borrowing.
(i) Each Borrowing shall be made upon the Borrower's
irrevocable written notice delivered to the Agent in the form of a notice of
borrowing ("Notice of Borrowing") together with a Borrowing Base Certificate
reflecting sufficient Availability and compliance with clauses (y) and (z) of
Section 2.2(a) above (which must be received by the Agent prior to 11:00 a.m.
(Chicago time) (A) three (3) Business Days prior to the requested Funding Date,
in the case of LIBOR Rate Loans and (B) no later than 11:00 a.m. (Chicago time)
on the requested Funding Date, in the case of Base Rate Loans, specifying:
(1) the amount of the Borrowing;
(2) the requested Funding Date, which shall be a Business Day;
(3) whether the Revolving Loans requested are to be Base Rate
Revolving Loans or LIBOR Revolving Loans; and
(4) the duration of the Interest Period if the requested
Revolving Loans are to be LIBOR Revolving Loans. If the Notice of
Borrowing fails to specify the duration of the Interest Period for any
Borrowing comprised of LIBOR Rate Loans, such Interest Period shall be
one month;
provided, however, that with respect to the Borrowing to be made on the Closing
Date, such Borrowings will consist of Base Rate Revolving Loans only.
(ii) With respect to any request for Base Rate Revolving
Loans, in lieu of delivering the above-described Notice of Borrowing the
Borrower may give the Agent telephonic notice of such request by the required
time, with such telephonic notice to be confirmed in writing within 24 hours of
the giving of such notice but the Agent shall be entitled to rely on the
telephonic notice in making such Revolving Loans.
-19-
26
(c) Reliance upon Authority. On or prior to the Closing Date and
thereafter prior to any change with respect to any of the information contained
in the following clauses (i) and (ii), the Borrower shall deliver to the Agent a
writing setting forth (i) the account of the Borrower to which the Agent is
authorized to transfer the proceeds of the Revolving Loans requested pursuant to
this Section 2.2, and (ii) the names of the persons authorized to request
Revolving Loans on behalf of the Borrower, and shall provide the Agent with a
specimen signature of each such person. The Agent shall be entitled to rely
conclusively on such person's authority to request Revolving Loans on behalf of
the Borrower, the proceeds of which are to be transferred to any of the accounts
specified by the Borrower pursuant to the immediately preceding sentence, until
the Agent receives written notice to the contrary. Absent actual knowledge to
the contrary, the Agent shall have no duty to verify the identity of any
individual representing him or herself as one of the officers authorized by the
Borrower to make such requests on its behalf.
(d) No Liability. The Agent shall not incur any liability to the
Borrower as a result of acting upon any notice referred to in Section 2.2(b)
(Procedure for Borrowing) and Section 2.2(c) (Reliance Upon Authority), which
notice the Agent believes in good faith to have been given by an officer duly
authorized by the Borrower to request Revolving Loans on its behalf or for
otherwise acting in good faith under this Section 2.2, and the crediting of
Revolving Loans to the Borrower's deposit account, or transmittal to such Person
as the Borrower shall direct, shall conclusively establish the obligation of the
Borrower to repay such Revolving Loans as provided herein.
(e) Notice Irrevocable. Any Notice of Borrowing (or telephonic notice
in lieu thereof) made pursuant to Section 2.2(b) (Procedure for Borrowing) shall
be irrevocable and the Borrower shall be bound to borrow the funds requested
therein in accordance therewith.
(f) Agent's Election. Promptly after receipt of a Notice of Borrowing
(or telephonic notice in lieu thereof) pursuant to Section 2.2(b) (Procedure for
Borrowing), the Agent shall elect, in its discretion, (i) to have the terms of
Section 2.2(g) (Making of Revolving Loans) apply to such requested Borrowing, or
(ii) to request Bank of America to make a Non-Ratable Loan pursuant to the terms
of Section 2.2(h) (Making of Non-Ratable Loans) in the amount of the requested
Borrowing; provided, however, that if Bank of America declines in its sole
discretion to make a Non-Ratable Loan pursuant to of Section 2.2(h) (Making of
Non-Ratable Loans), the Agent shall elect to have the terms of Section 2.2(g)
(Making of Revolving Loans) apply to such requested Borrowing.
(g) Making of Revolving Loans.
(i) In the event that the Agent shall elect to have the terms
of this Section 2.2(g) apply to a requested Borrowing as described in Section
2.2(f) (Agent's Election) then promptly after receipt of a Notice of Borrowing
or telephonic notice pursuant to Section 2.2(b) (Procedure for Borrowing), the
Agent shall notify the Lenders by telecopy, telephone or other similar form of
transmission, of the requested Borrowing. Each Lender shall make the amount of
such Lender's Pro Rata Share of the requested Borrowing available to the Agent
in same day funds, to such account of the Agent as the Agent may designate, not
later than 1:00 p.m. (Chicago time) on the Funding Date applicable thereto.
After the Agent's receipt of the proceeds of such Revolving Loans, upon
satisfaction of the applicable conditions precedent set forth in
-20-
27
ARTICLE X (Conditions of Lending), the Agent shall make the proceeds of such
Revolving Loans available to the Borrower on the applicable Funding Date by
transferring same day funds equal to the proceeds of such Revolving Loans
received by the Agent to the account of the Borrower, designated in writing by
the Borrower and acceptable to the Agent; provided, however, that the amount of
Revolving Loans so made on any date shall in no event exceed the Availability on
such date or cause the Aggregate Revolver Outstandings to exceed the Maximum
Revolver Amount.
(ii) Unless the Agent receives notice from a Lender on or
prior to the Closing Date or, with respect to any Borrowing after the Closing
Date, at least one Business Day prior to the date of such Borrowing, that such
Lender will not make available as and when required hereunder to the Agent for
the account of the Borrower the amount of that Lender's Pro Rata Share of the
Borrowing, the Agent may assume that each Lender has made such amount available
to the Agent in immediately available funds on the Funding Date and the Agent
may (but shall not be so required), in reliance upon such assumption, make
available to the Borrower on such date a corresponding amount. If and to the
extent any Lender shall not have made its full amount available to the Agent in
immediately available funds and the Agent in such circumstances has made
available to the Borrower such amount, that Lender shall on the Business Day
following such Funding Date make such amount available to the Agent, together
with interest at the Federal Funds Rate for each day during such period. A
notice by the Agent submitted to any Lender with respect to amounts owing under
this subsection shall be conclusive, absent manifest error. If such amount is so
made available, such payment to the Agent shall constitute such Lender's
Revolving Loan for all purposes of this Agreement. If such amount is not made
available to the Agent on the Business Day following the Funding Date, the Agent
will notify the Borrower of such failure to fund and, upon demand by the Agent,
the Borrower shall pay such amount to the Agent for the Agent's account,
together with interest thereon for each day elapsed since the date of such
Borrowing, at a rate per annum equal to the Interest Rate applicable at the time
to the Revolving Loans comprising such Borrowing. The failure of any Lender to
make any Revolving Loan on any Funding Date (any such Lender, prior to the cure
of such failure, being hereinafter referred to as a "Defaulting Lender") shall
not relieve any other Lender of any obligation hereunder to make a Revolving
Loan on such Funding Date, but no Lender shall be responsible for the failure of
any other Lender to make the Revolving Loan to be made by such other Lender on
any Funding Date.
(iii) The Agent shall not be obligated to transfer to a
Defaulting Lender any payments made by Borrower to the Agent for the Defaulting
Lender's benefit; nor shall a Defaulting Lender be entitled to the sharing of
any payments hereunder. Amounts 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 Borrower the amount of all such payments received or retained by it
for the account of such Defaulting Lender. Any amounts so re-lent to the
Borrower shall bear interest at the rate applicable to Base Rate Revolving Loans
and for all other purposes of this Agreement shall be treated as if they were
Revolving Loans, provided, however, that for purposes of voting or consenting to
matters with respect to the Loan Documents and determining Pro Rata Shares, such
Defaulting Lender shall be deemed not to be a "Lender". Until a Defaulting
Lender cures its failure to fund its Pro Rata Share of any Borrowing (A) such
Defaulting Lender shall not be entitled to any portion of the Unused Line Fee
and (B) the Unused Line Fee shall accrue in favor of the Lenders which have
funded their respective Pro
-21-
28
Rata Shares of such requested Borrowing and shall be allocated among such
performing Lenders ratably based upon their relative Commitments. This section
shall remain effective with respect to such Lender until such time as the
Defaulting Lender shall no longer be in default of any of its obligations under
this Agreement. The terms 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 Borrower of its duties and obligations hereunder.
(h) Making of Non-Ratable Loans.
(i) In the event the Agent shall elect, with the consent of
Bank of America, to have the terms of this subsection Section 2.2(h) apply to a
requested Borrowing as described in Section 2.2(f), Bank of America shall make a
Revolving Loan in the amount of such Borrowing (any such Revolving Loan made
solely by Bank of America pursuant to this subsection (i) being referred to as a
"Non-Ratable Loan" and such Revolving Loans being referred to collectively as
"Non-Ratable Loans") available to the Borrower on the Funding Date applicable
thereto by transferring same day funds to an account of the Borrower, designated
in writing by the Borrower and acceptable to the Agent. Each Non-Ratable Loan is
a Revolving Loan hereunder and shall be subject to all the terms and conditions
applicable to other Revolving Loans except that all payments thereon shall be
payable to Bank of America solely for its own account (and for the account of
the holder of any participation interest with respect to such Revolving Loan).
The Agent shall not request Bank of America to make any Non-Ratable Loan if (A)
the Agent shall have received written notice from any Lender that one or more of
the applicable conditions precedent set forth in ARTICLE X will not be satisfied
on the requested Funding Date for the applicable Borrowing, or (B) the requested
Borrowing would exceed the Availability on such Funding Date or cause the
Aggregate Revolver Outstandings to exceed the Maximum Revolver Amount. Bank of
America shall not otherwise be required to determine whether the applicable
conditions precedent set forth in ARTICLE X have been satisfied or the requested
Borrowing would exceed the Availability or cause the Aggregate Revolver
Outstandings to exceed the Maximum Revolver Amount on the Funding Date
applicable thereto prior to making, in its sole discretion, any Non-Ratable
Loan.
(ii) The Non-Ratable Loans shall be secured by the Agent's
Liens in and to the Collateral, shall constitute Revolving Loans and Obligations
hereunder, and shall bear interest at the rate applicable to the Revolving Loans
from time to time.
(i) Agent Advances.
(i) Subject to the limitations set forth in the provisos
contained in this Section 2.2(i), the Agent is hereby authorized by the Borrower
and the Lenders, from time to time in the Agent's sole discretion, (A) after the
occurrence of a Default or an Event of Default, or (B) at any time that any of
the other applicable conditions precedent set forth in ARTICLE X (Conditions of
Lending) have not been satisfied, to make Base Rate Revolving Loans to the
Borrower on behalf of the Lenders which the Agent, in its reasonable business
judgment, deems necessary or desirable (1) to preserve or protect the
Collateral, or any portion thereof, (2) to enhance the likelihood of, or
maximize the amount of, repayment of the Loans and other Obligations, or (3) to
pay any other amount chargeable to the Borrower pursuant to the terms of this
Agreement, including, without limitation, costs, fees and expenses as described
in Section
-22-
29
15.7 (Fees and Expenses) (any of the advances described in this Section 2.2(i)
being hereinafter referred to as "Agent Advances"); provided, that the Required
Lenders may at any time revoke the Agent's authorization contained in this
Section 2.2(i) to make Agent Advances, any such revocation to be in writing and
to become effective prospectively upon the Agent's receipt thereof.
Notwithstanding the foregoing, without the consent of the Majority Lenders,
except for Agent Advances under clause (1), no Agent Advances shall be made if
after giving effect to the contemplated advance (A) the aggregate of all Agent
Advances outstanding would exceed $5,000,000, or (B) Availability would be less
than $20,000,000, (C) the Aggregate Revolver Outstandings would exceed the
Maximum Revolver Amount, or (D) any Agent Advances have been outstanding more
than an aggregate of thirty (30) days in the most recent ninety (90) day period.
(ii) The Agent Advances shall be repayable on demand and
secured by the Collateral, shall constitute Base Rate Revolving Loans and
Obligations hereunder, and shall bear interest at the rate applicable to the
Base Rate Revolving Loans from time to time. The Agent shall notify each Lender
in writing of each such Agent Advance.
(j) Settlement. It is agreed that each Lender's funded portion of the
Revolving Loans is intended by the Lenders to be equal at all times to such
Lender's Pro Rata Share of the outstanding Revolving Loans. Notwithstanding such
agreement, the Agent, Bank of America, and the other Lenders agree (which
agreement shall not be for the benefit of or enforceable by the Borrower) that
in order to facilitate the administration of this Agreement and the other Loan
Documents, settlement among them as to the Revolving Loans, the Non-Ratable
Loans and the Agent Advances shall take place on a periodic basis in accordance
with the following provisions:
(i) The Agent shall request settlement ("Settlement") with the
Lenders on at least a weekly basis, or on a more frequent basis if so determined
by the Agent, (A) on behalf of Bank of America, with respect to each outstanding
Non-Ratable Loan, (B) for itself, with respect to each Agent Advance, and (C)
with respect to collections received, in each case, by notifying the Lenders of
such requested Settlement by telecopy, telephone or other similar form of
transmission, of such requested Settlement, no later than 11 a.m. (Chicago time)
on the date of such requested Settlement (the "Settlement Date"). Each Lender
(other than Bank of America, in the case of Non-Ratable Loans and the Agent in
the case of Agent Advances) shall make the amount of such Lender's Pro Rata
Share of the outstanding principal amount of the Non-Ratable Loans and Agent
Advances with respect to which Settlement is requested available to the Agent,
to such account of the Agent as the Agent may designate, not later than 11 a.m.
(Chicago time), on the Settlement Date applicable thereto, which may occur
before or after the occurrence or during the continuation of a Default or an
Event of Default and whether or not the applicable conditions precedent set
forth in ARTICLE X have then been satisfied. Such amounts made available to the
Agent shall be applied against the amounts of the applicable Non-Ratable Loan or
Agent Advance and, together with the portion of such Non-Ratable Loan or Agent
Advance representing Bank of America's Pro Rata Share thereof, shall constitute
Revolving Loans of such Lenders. If any such amount is not made available to the
Agent by any Lender on the Settlement Date applicable thereto, the Agent shall
be entitled to recover such amount on demand from such Lender together with
interest thereon at the Federal Funds Rate for the first three (3) days from and
after the Settlement Date and thereafter at the Interest Rate then applicable to
the Revolving Loans.
-23-
30
(ii) Notwithstanding the foregoing, not more than one (1)
Business Day after demand is made by the Agent (whether before or after the
occurrence of a Default or an Event of Default and regardless of whether the
Agent has requested a Settlement with respect to a Non-Ratable Loan or Agent
Advance), each other Lender shall irrevocably and unconditionally purchase and
receive from Bank of America or the Agent, as applicable, without recourse or
warranty, an undivided interest and participation in such Non-Ratable Loan or
Agent Advance equal to such Lender's Pro Rata Share of such Non-Ratable Loan or
Agent Advance. If Settlement has not previously occurred with respect to such
Non-Ratable Loans or Agent Advances, upon demand by Bank of America or Agent, as
applicable, each other Lender shall pay to Bank of America or Agent, as
applicable, as the purchase price of such participation an amount equal to
one-hundred percent (100%) of such Lender's Pro Rata Share of such Non-Ratable
Loans or Agent Advances. If such amount is not in fact made available to the
Agent by any Lender, the Agent shall be entitled to recover such amount on
demand from such Lender together with interest thereon at the Federal Funds Rate
for the first three (3) days from and after such demand and thereafter at the
Interest Rate then applicable to the Revolving Loans.
(iii) From and after the date, if any, on which any Lender
purchases an undivided interest and participation in any Non-Ratable Loan or
Agent Advance pursuant to subsection (ii) above, the Agent shall promptly
distribute to such Lender at such address as such Lender may request in writing,
such Lender's Pro Rata Share of all payments of principal and interest and all
proceeds of Collateral received by the Agent in respect of such Non-Ratable Loan
or Agent Advance.
(iv) Between Settlement Dates, the Agent, to the extent no
Agent Advances or Non-Ratable Loans are outstanding, may pay over to Bank of
America any payments received by the Agent, which in accordance with the terms
of this Agreement would be applied to the reduction of the Revolving Loans, for
application to Bank of America's Revolving Loans. If, as of any Settlement Date,
collections received since the then immediately preceding Settlement Date have
been applied to Bank of America's Revolving Loans (other than to Non-Ratable
Loans or Agent Advances in which such Lender has not yet funded its purchase of
a participation pursuant to clause Section 2.2(j)(ii) above), as provided for in
the previous sentence, Bank of America shall pay to the Agent for the accounts
of the Lenders, to be applied to the outstanding Revolving Loans of such
Lenders, an amount such that each Lender shall, upon receipt of such amount,
have, as of such Settlement Date, its Pro Rata Share of the Revolving Loans.
During the period between Settlement Dates, Bank of America with respect to
Non-Ratable Loans, the Agent with respect to Agent Advances, and each Lender
with respect to the Revolving Loans other than Non-Ratable Loans and Agent
Advances, shall be entitled to interest at the applicable rate or rates payable
under this Agreement on the actual average daily amount of funds employed by
Bank of America, the Agent and the other Lenders.
(k) Notation. The Agent shall record on its books the principal amount
of the Revolving Loans owing to each Lender (including, without limitation, the
Non-Ratable Loans made by Bank of America) and the Agent Advances owing to the
Agent, from time to time. In addition, each Lender is authorized, at such
Lender's option, to note the date and amount of each payment or prepayment of
principal of such Lender's Revolving Loans in its books and records,
-24-
31
including computer records, such books and records constituting rebuttably
presumptive evidence, absent manifest error, of the accuracy of the information
contained therein.
(l) Lenders' Failure to Perform. All Loans (other than Agent Advances
and Non-Ratable Loans) shall be made by the Lenders simultaneously and in
accordance with their Pro Rata Shares. It is understood that (i) no Lender shall
be responsible for any failure by any other Lender to perform its obligation to
make any Loans hereunder, nor shall any Commitment of any Lender be increased or
decreased as a result of any failure by any other Lender to perform its
obligation to make any Loans hereunder, (ii) no failure by any Lender to perform
its obligation to make any Loans hereunder shall excuse any other Lender from
its obligation to make any Loans hereunder, and (iii) the obligations of each
Lender hereunder shall be several, not joint and several. In the event a Lender
so defaults or in the event the Agent requests the consent of a Lender and such
consent is denied, then Bank of America may, at its option, require such Lender
to assign its interest in the Loans and other credit facilities to Bank of
America for a price equal to the then outstanding principal amount thereof (to
the extent such Lender has funded the same) plus accrued and unpaid interest,
fees and costs and expenses due such Lender under the Loan Documents, which
principal, interest, fees and costs and expenses will be paid on the date of
such assignment. In the event that Bank of America elects to require any Lender
to assign its interest to Bank of America, Bank of America will so notify such
Lender in writing within sixty (60) days following such Lender's default or
denial, and such Lender will assign its interest to Bank of America no later
than five (5) Business Days following receipt of such notice.
Section 2.3 Letters of Credit.
(a) Agreement to Issue. Subject to the terms and conditions of this
Agreement, and in reliance upon the representations and warranties of the
Borrower herein set forth, the Agent agrees to issue for the account of the
Borrower one or more commercial/documentary and standby letters of credit
("Letters of Credit") in accordance with this Section 2.3 from time to time
during the term of this Agreement.
(b) Amounts; Outside Expiration Date. The Agent shall not have any
obligation to issue any Letter of Credit if: (i) the maximum undrawn amount of
the requested Letter of Credit is greater than the Unused Letter of Credit
Subfacility at such time; (ii) the maximum undrawn amount of the requested
Letter of Credit and all commissions, fees, and charges due from the Borrower in
connection with the opening thereof exceed the Availability of the Borrower at
such time; (iii) such Letter of Credit has an expiration date later than thirty
(30) days prior to the Stated Termination Date or more than twelve (12) months
from the date of issuance, or (iv) the issuance of such Letter of Credit would
cause the Aggregate Revolver Outstandings to exceed the Maximum Revolver Amount.
(c) Other Conditions. In addition to being subject to the satisfaction
of the applicable conditions precedent contained in ARTICLE X (Conditions of
Lending), the obligation of the Agent to issue any Letter of Credit is subject
to the following conditions precedent having been satisfied in a manner
satisfactory to the Agent:
(i) The Borrower shall have delivered to the Agent, at such
times and in such manner as the Agent may prescribe, an application in form and
substance satisfactory to the Agent for the issuance of the Letter of Credit and
such other documents as may be required
-25-
32
pursuant to the terms thereof, and the form and terms of the proposed Letter of
Credit shall be satisfactory to the Agent; and
(ii) As of the date of issuance, no order of any court,
arbitrator or Governmental Authority shall purport by its terms to enjoin or
restrain money center banks generally from issuing letters of credit of the type
and in the amount of the proposed Letter of Credit, and no law, rule or
regulation applicable to money center banks generally and no request or
directive (whether or not having the force of law) from any Governmental
Authority with jurisdiction over money center banks generally shall prohibit, or
request that the proposed issuer of such Letter of Credit refrain from, the
issuance of letters of credit generally or the issuance of such Letters of
Credit.
(d) Issuance of Letters of Credit.
(i) Request for Issuance. The Borrower shall give the Agent
three (3) Business Days' prior written notice of the Borrower's request for the
issuance of a Letter of Credit. Such notice shall be irrevocable and shall
specify the original face amount of the Letter of Credit requested, the
effective date (which date shall be a Business Day) of issuance of such
requested Letter of Credit, whether such Letter of Credit may be drawn in a
single or in partial draws, the date on which such requested Letter of Credit is
to expire (which date shall be a Business Day), the purpose for which such
Letter of Credit is to be issued, and the beneficiary of the requested Letter of
Credit. The Borrower shall attach to such notice the proposed form of the Letter
of Credit.
(ii) Responsibilities of the Agent; Issuance. The Agent shall
determine, as of the Business Day immediately preceding the requested effective
date of issuance of the Letter of Credit set forth in the notice from the
Borrower pursuant to this Section 2.3(d), the amount of the applicable Unused
Letter of Credit Subfacility and the Availability as of such date. If (i) the
undrawn amount of the requested Letter of Credit is not greater than the
applicable Unused Letter of Credit Subfacility and (ii) the issuance of such
requested Letter of Credit and all commissions, fees, and charges due from the
Borrower in connection with the opening thereof would not exceed the
Availability of the Borrower nor would cause the Aggregate Revolver Outstandings
to exceed the Maximum Revolver Amount, the Agent shall issue the requested
Letter of Credit on such requested effective date of issuance.
(iii) Notice of Issuance. On each Settlement Date the Agent
shall give notice to each Lender of the issuance of all Letters of Credit issued
since the last Settlement Date.
(iv) No Extensions or Amendment. The Agent shall not be
obligated to extend or amend any Letter of Credit unless the requirements of
this Section 2.3(d) are met as though a new Letter of Credit were being
requested and issued. With respect to any Letter of Credit which contains any
"evergreen" or automatic renewal provision, each Lender shall be deemed to have
consented to any such extension or renewal unless any such Lender shall have
provided to the Agent, not less than thirty (30) days prior to the last date on
which the applicable issuer can in accordance with the terms of the applicable
Letter of Credit decline to extend or renew such Letter of Credit, written
notice that it declines to consent to any such extension or
-26-
33
renewal, provided, that if all of the requirements of this Section 2.3 are met
and no Default or Event of Default exists, no Lender shall decline to consent to
any such extension or renewal.
(e) Payments Pursuant to Letters of Credit.
(i) Payment of Letter of Credit Obligations. The Borrower
agrees to reimburse the Agent, for the account of the Lenders, for any draw
under any Letter of Credit and the amount of all other obligations and other
amounts payable in connection with any Letter of Credit immediately when due,
irrespective of any claim, setoff, defense or other right which the Borrower may
have at any time against such issuer or any other Person.
(ii) Revolving Loans to Satisfy Reimbursement Obligations. In
the event that the Agent honors a draw under such Letter of Credit and the
Borrower shall not have repaid such amount to the Agent pursuant to Section
2.3(e)(i) (Payment of Letter of Credit Obligations), the Agent shall, upon
receiving notice of such failure, notify each Lender of such failure, and each
Lender shall unconditionally pay to the Agent, for the account of such issuer or
the Agent, as applicable, as and when provided hereinbelow, an amount equal to
such Lender's Pro Rata Share of the amount of such payment in Dollars and in
same day funds. If the Agent so notifies the Lenders prior to 1:00 p.m. (Chicago
time) on any Business Day, each Lender shall make available to the Agent the
amount of such payment, as provided in the immediately preceding sentence, on
such Business Day. Such amounts paid by the Lenders to the Agent shall
constitute Revolving Loans which shall be deemed to have been requested by the
Borrower pursuant to Section 2.2 (Revolving Loans) as set forth in Section 4.4
(Payments as Revolving Loans).
(f) Participations.
(i) Purchase of Participations. Immediately upon issuance of
any Letter of Credit in accordance with Section 2.3(d) (Issuance of Letters of
Credit), each Lender shall be deemed to have irrevocably and unconditionally
purchased and received without recourse or warranty, an undivided interest and
participation in the Letter of Credit equal to such Lender's Pro Rata Share of
the face amount of such Letter of Credit (including, without limitation, all
obligations of the Borrower with respect thereto, and any security therefor or
guaranty pertaining thereto).
(ii) Sharing of Reimbursement Obligation Payments. Whenever
the Agent receives a payment from the Borrower on account of reimbursement
obligations in respect of a Letter of Credit as to which the Agent has
previously received payment from a Lender pursuant to Section 2.3(e)(ii)
(Payments Pursuant to Letters of Credit), the Agent shall promptly pay to such
Lender such Lender's Pro Rata Share of such payment from the Borrower in
Dollars. Each such payment shall be made by the Agent on the Business Day on
which the Agent receives immediately available funds paid to such Person
pursuant to the immediately preceding sentence, if received prior to 1:00 p.m.
(Chicago time) on such Business Day and otherwise on the next succeeding
Business Day.
(iii) Documentation. Upon the request of any Lender, the Agent
shall furnish to such Lender copies of any Letter of Credit, reimbursement
agreements executed in
-27-
34
connection therewith, application for any Letter of Credit, and such other
documentation as may reasonably be requested by such Lender.
(iv) Obligations Irrevocable. The obligations of each Lender
to make payments to the Agent with respect to any Letter of Credit, and the
obligations of the Borrower to make payments to the Agent, for the account of
the Lenders, shall be irrevocable, not subject to any qualification or exception
whatsoever , including, without limitation, any of the following circumstances:
(A) any lack of validity or enforceability of this
Agreement or any of the other Loan Documents;
(B) the existence of any claim, setoff, defense or
other right which the Borrower may have at any time against a
beneficiary named in a Letter of Credit or any transferee of
any Letter of Credit (or any Person for whom any such
transferee may be acting), any Lender, the Agent, the issuer
of such Letter of Credit, or any other Person, whether in
connection with this Agreement, any Letter of Credit, the
transactions contemplated herein or any unrelated transactions
(including any underlying transactions between the Borrower or
any other Person and the beneficiary named in any Letter of
Credit);
(C) any draft, certificate or any other document
presented under the 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;
(D) the surrender or impairment of any security for
the performance or observance of any of the terms of any of
the Loan Documents; or
(E) the occurrence of any Default or Event of
Default.
(g) Recovery or Avoidance of Payments. In the event any payment by or
on behalf of the Borrower received by the Agent with respect to any Letter of
Credit (or any guaranty by the Borrower or reimbursement obligation of the
Borrower relating thereto) and distributed by the Agent to the Lenders on
account of their respective participations therein is thereafter set aside,
avoided or recovered from the Agent in connection with any receivership,
liquidation or bankruptcy proceeding, the Lenders shall, upon demand by the
Agent, pay to the Agent their respective Pro Rata Shares of such amount set
aside, avoided or recovered, together with interest at the rate required to be
paid by the Agent upon the amount required to be repaid by it.
(h) Compensation for Letters of Credit.
(i) Letter of Credit Fee. The Borrower agrees to pay to the
Agent with respect to each Letter of Credit, for the account of the Lenders, the
Letter of Credit Fee specified in, and in accordance with the terms of, Section
3.6 (Letter of Credit Fee).
-28-
35
(ii) Issuer Fees and Charges. The Borrower shall pay to the
Agent, such fees and other charges as are charged by such issuer for letters of
credit issued by it, including, without limitation, its standard fees for
issuing, administering, amending, renewing, paying and canceling letters of
credit and all other fees associated with issuing or servicing letters of
credit, as and when assessed.
(i) Indemnification; Exoneration; Power of Attorney.
(i) Indemnification. In addition to amounts payable as
elsewhere provided in this Section 2.3, the Borrower hereby agrees to protect,
indemnify, pay and save the Lenders and the Agent harmless from and against any
and all claims, demands, liabilities, damages, losses, costs, charges and
expenses (including reasonable attorneys' fees) which any Lender or the Agent
may incur or be subject to as a consequence, direct or indirect, of the issuance
of any Letter of Credit. The agreement in this Section 2.3(i)(i) shall survive
payment of all Obligations.
(ii) Assumption of Risk by the Borrower. As among the
Borrower, the Lenders, and the Agent, the Borrower assumes all risks of the acts
and omissions of, or misuse of any of the Letters of Credit by, the respective
beneficiaries of such Letters of Credit. In furtherance and not in limitation of
the foregoing, the Lenders and the Agent shall not be responsible for: (A) the
form, validity, sufficiency, accuracy, genuineness or legal effect of any
document submitted by any Person in connection with the application for and
issuance of and presentation of drafts with respect to any of the Letters of
Credit, even if it should prove to be in any or all respects invalid,
insufficient, inaccurate, fraudulent or forged; (B) the validity or sufficiency
of any instrument transferring or assigning or purporting to transfer or assign
any Letter of Credit or the rights or benefits thereunder or proceeds thereof,
in whole or in part, which may prove to be invalid or ineffective for any
reason; (C) the failure of the beneficiary of any Letter of Credit to comply
duly with conditions required in order to draw upon such Letter of Credit; (D)
errors, omissions, interruptions, or delays in transmission or delivery of any
messages, by mail, cable, telegraph, telex or otherwise, whether or not they be
in cipher; (E) errors in interpretation of technical terms; (F) any loss or
delay in the transmission or otherwise of any document required in order make a
drawing under any Letter of Credit or of the proceeds thereof; (G) the
misapplication by the beneficiary of any Letter of Credit of the proceeds of any
drawing under such Letter of Credit; or (H) any consequences arising from causes
beyond the control of the Lenders or the Agent, including, without limitation,
any act or omission, whether rightful or wrongful, of any present or future de
jure or de facto Governmental Authority. None of the foregoing shall affect,
impair or prevent the vesting of any rights or powers of the Agent or any Lender
under this Section 2.3(i).
(iii) Exoneration. In furtherance and extension, and not in
limitation, of the specific provisions set forth above, any action taken or
omitted by the Agent or any Lender under or in connection with any of the
Letters of Credit or any related certificates, if taken or omitted in the
absence of gross negligence or willful misconduct, shall not put the Agent or
any Lender under any resulting liability to the Borrower or relieve the Borrower
of any of its obligations hereunder to any such Person.
-29-
36
(iv) Power of Attorney. In connection with all Inventory
financed by Letters of Credit, the Borrower hereby appoints the Agent, or the
Agent's designee, as its attorney, with full power and authority: (A) to sign
and/or endorse the Borrower's name upon any warehouse or other receipts; (B) to
sign the Borrower's name on bills of lading and other negotiable and
non-negotiable documents; (C) to clear Inventory through customs in the Agent's
or the Borrower's name, and to sign and deliver to customs officials powers of
attorney in the Borrower's name for such purpose; (D) to complete in the
Borrower's or the Agent's name, any order, sale, or transaction, obtain the
necessary documents in connection therewith, and collect the proceeds thereof;
and (E) to do such other acts and things as are necessary in order to enable the
Agent to obtain possession of the Inventory and to obtain payment of the
Obligations. Neither the Agent nor its designee, as the Borrower's attorney,
will be liable for any acts or omissions, nor for any error of judgement or
mistakes of fact or law. This power, being coupled with an interest, is
irrevocable until all Obligations have been paid and satisfied.
(v) Control of Inventory. In connection with all Inventory
financed by Letters of Credit, the Borrower will, at the Agent's request,
promptly instruct all suppliers, carriers, forwarders, warehouses or others
receiving or holding cash, checks, Inventory, documents or instruments in which
the Agent holds a security interest to deliver them to the Agent and/or subject
to the Agent's order, and if they shall come into the Borrower's possession, to
deliver them, upon request, promptly to the Agent in their original form. The
Borrower shall also, at the Agent's request, promptly designate the Agent as the
consignee on all bills of lading and other negotiable and non-negotiable
documents.
(j) Supporting Letter of Credit; Cash Collateral. If, notwithstanding
the provisions of Section 2.3(b) (Amounts; Outside Expiration Date) and Section
12.1 (Term and Termination) any Letter of Credit is outstanding upon the
termination of this Agreement, then upon such termination the Borrower shall
deposit with the Agent, for the ratable benefit of the Agent and the Lenders,
with respect to each Letter of Credit then outstanding, as the Majority Lenders,
in their discretion shall specify, (or in the absence of such specification, as
the Agent may specify) either (i) a standby letter of credit (a "Supporting
Letter of Credit") in form and substance satisfactory to the Agent, issued by an
issuer satisfactory to the Agent in an amount equal to the greatest amount for
which such Letter of Credit may be drawn plus any fees and expenses associated
with such Letter of Credit, under which Supporting Letter of Credit the Agent is
entitled to draw amounts necessary to reimburse the Agent and the Lenders for
payments made by the Agent and the Lenders under such Letter of Credit and any
fees and expenses associated with such Letter of Credit, or (ii) cash in amounts
necessary to reimburse the Agent and the Lenders for payments made by the Agent
or the Lenders under such Letter of Credit and any fees and expenses associated
with such Letter of Credit. Such Supporting Letter of Credit or deposit of cash
shall be held by the Agent, for the ratable benefit of the Agent and the
Lenders, as security for, and to provide for the payment of, the aggregate
undrawn amount of such Letters of Credit remaining outstanding.
-30-
37
ARTICLE III
INTEREST AND FEES
Section 3.1 Interest.
(a) Interest Rates. All outstanding Obligations shall bear
interest on the unpaid principal amount thereof (including, to the extent
permitted by law, on interest thereon not paid when due) from the date made
until paid in full in cash at a rate determined by reference to the Base Rate or
the LIBOR Rate and Section 3.1(a)(i) or Section 3.1(a)(ii), as applicable, but
not to exceed the Maximum Rate described in Section 3.3 (Maximum Interest Rate).
Subject to the provisions of Section 3.2 (Conversion and Continuation
Elections), any of the Loans may be converted into, or continued as, Base Rate
Loans or LIBOR Rate Loans in the manner provided in Section 3.2 (Conversion and
Continuation Elections). If at any time Loans are outstanding with respect to
which notice has not been delivered to the Agent in accordance with the terms of
this Agreement specifying the basis for determining the interest rate applicable
thereto, then those Loans shall be Base Rate Loans and shall bear interest at a
rate determined by reference to the Base Rate until notice to the contrary has
been given to the Agent in accordance with this Agreement and such notice has
become effective. Except as otherwise provided herein, the outstanding
Obligations shall bear interest as follows:
(i) For all Base Rate Revolving Loans and other
Obligations (other than Base Rate Loans and LIBOR Rate Loans)
at a fluctuating per annum rate equal to the Base Rate plus
the Applicable Margin; and
(ii) For all LIBOR Revolving Loans at a per annum
rate equal to the LIBOR Rate plus the Applicable Margin.
Each change in the Base Rate shall be reflected in the interest rate described
in clause (i) above as of the effective date of such change. All interest
charges shall be computed on the basis of a year of 360 days and actual days
elapsed (which results in more interest being paid than if computed on the basis
of a 365-day year). Interest accrued on all Base Rate Loans will be payable in
arrears on the first day of each month hereafter. Interest accrued on all LIBOR
Rate Loans will be payable in arrears on each LIBOR Interest Payment Date and,
if the applicable LIBOR Rate is greater than three months, on the date that is
three months after the commencement of the applicable Interest Period.
(b) Default Rate. If any Default or Event of Default occurs
and is continuing and the Majority Lenders in their discretion so elect, then,
while any such Default or Event of Default is outstanding, all of the
Obligations shall bear interest at the Default Rate applicable thereto.
Section 3.2 Conversion and Continuation Elections.
(a) Borrower's Election. The Borrower may, upon irrevocable
written notice to the Agent in accordance with Section 3.2(b) (Notice):
(i) elect, as of any Business Day, in the case of
Base Rate Loans to convert any such Loans (or any part thereof
in an amount not less than $5,000,000 or that is in an
integral multiple of $1,000,000 in excess thereof) into LIBOR
Rate Loans; or
-31-
38
(ii) elect, as of the last day of the applicable
Interest Period, to continue any LIBOR Rate Loans having
Interest Periods expiring on such day (or any part thereof in
an amount not less than $5,000,000 or that is in an integral
multiple of $1,000,000 in excess thereof);
provided, that if at any time the aggregate amount of LIBOR Rate Loans in
respect of any Borrowing is reduced, by payment, prepayment, or conversion of
part thereof to be less than $1,000,000, such LIBOR Rate Loans shall
automatically convert into Base Rate Loans, and on and after such date the right
of the Borrower to continue such Loans as, and convert such Loans into, LIBOR
Rate Loans, as the case may be, shall terminate.
(b) Notice. The Borrower shall deliver a notice of
conversion/continuation ("Notice of Conversion/Continuation") to be received by
the Agent not later than 10 a.m. (Chicago time) at least three (3) Business Days
in advance of the Conversion/Continuation Date, if the Loans are to be converted
into or continued as LIBOR Rate Loans and specifying:
(i) the proposed Conversion/Continuation Date;
(ii) the aggregate amount of Loans to be converted or
renewed;
(iii) the type of Loans resulting from the proposed
conversion or continuation; and
(iv) the duration of the requested Interest Period.
(c) Failure to Elect. If upon the expiration of any Interest
Period applicable to LIBOR Rate Loans, the Borrower has failed to select timely
a new Interest Period to be applicable to LIBOR Rate Loans or if any Default or
Event of Default then exists, the Borrower shall be deemed to have elected to
convert such LIBOR Rate Loans into Base Rate Loans effective as of the
expiration date of such Interest Period.
(d) Notice to Lenders. The Agent will promptly notify each
Lender of its receipt of a Notice of Conversion/Continuation. All conversions
and continuations shall be made ratably according to the respective outstanding
principal amounts of the Loans with respect to which the notice was given held
by each Lender.
(e) Default. During the existence of a Default or Event of
Default, the Borrower may not elect to have a Loan converted into or continued
as a LIBOR Rate Loan.
(f) Limitation. After giving effect to any conversion or
continuation of Loans, there may not be more than ten (10) different Interest
Periods in effect.
Section 3.3 Maximum Interest Rate. In no event shall any interest rate
provided for hereunder exceed the maximum rate legally chargeable by any Lender
under applicable law for loans of the type provided for hereunder (the "Maximum
Rate"). If, in any month, any interest rate, absent such limitation, would have
exceeded the Maximum Rate, then the interest rate for that month shall be the
Maximum Rate, and, if in future months, that interest rate would otherwise be
less than the Maximum Rate, then that interest rate shall remain at the Maximum
-32-
39
Rate until such time as the amount of interest paid hereunder equals the amount
of interest which would have been paid if the same had not been limited by the
Maximum Rate. In the event that, upon payment in full of the Obligations, the
total amount of interest paid or accrued under the terms of this Agreement is
less than the total amount of interest which would, but for this Section 3.3,
have been paid or accrued if the interest rates otherwise set forth in this
Agreement had at all times been in effect, then the Borrower shall, to the
extent permitted by applicable law, pay the Agent, for the account of the
Lenders, an amount equal to the excess of (a) the lesser of (i) the amount of
interest which would have been charged if the Maximum Rate had, at all times,
been in effect or (ii) the amount of interest which would have accrued had the
interest rates otherwise set forth in this Agreement, at all times, been in
effect over (b) the amount of interest actually paid or accrued under this
Agreement. In the event that a court determines that the Agent and/or any Lender
has received interest and other charges hereunder in excess of the Maximum Rate,
such excess shall be deemed received on account of, and shall automatically be
applied to reduce, the Obligations other than interest, in the inverse order of
maturity, and if there are no Obligations outstanding, the Agent and/or such
Lender shall refund to the Borrower such excess.
Section 3.4 Commitment Fee.
The Borrower agrees to pay the Agent the fee (the "Commitment Fee") set
forth in the letter agreement dated October 12, 1999, between the Agent and the
Borrower, which Commitment Fee shall be fully earned when due and non-refundable
when paid. The Agent, the Lenders and the Borrower agree that the Commitment Fee
may be financed by the Lenders as a Revolving Loan.
Section 3.5 Unused Line Fee.
Until the Obligations have been paid in full and the Agreement
terminated, the Borrower agrees to pay, on the first day of each month and on
the Termination Date, to the Agent, for the ratable account of the Lenders, an
unused line fee (the "Unused Line Fee") equal to three-eighths of one percent
(0.375%) per annum times the average daily amount by which the Maximum Revolver
Amount exceeded the sum of the average daily outstanding amount of Revolving
Loans and the undrawn face amount of all outstanding Letters of Credit, during
the immediately preceding month or shorter period if calculated on the
Termination Date. The Unused Line Fee shall be computed on the basis of a
360-day year for the actual number of days elapsed. All payments received by the
Agent on account of proceeds of Collateral shall be deemed to be credited to the
Borrower's Loan Account immediately upon receipt for purposes of calculating the
Unused Line Fee pursuant to this Section 3.5.
Section 3.6 Letter of Credit Fee.
The Borrower agrees to pay to the Agent, for the ratable account of the
Lenders, for each Letter of Credit, a fee (the "Letter of Credit Fee") equal to
one and three-quarters percent (1.75%) per annum of the undrawn face amount of
each Letter of Credit issued for the Borrower's account at the Borrower's
request, plus all out-of-pocket costs, fees and expenses incurred by the Agent
in connection with the application for, issuance of, or amendment to any Letter
of Credit, which costs, fees and expenses shall include a "fronting fee"
required to be paid to the Agent for the assumption of the settlement risk in
connection with the issuance of such Letter of Credit. The Letter of Credit Fee
shall be payable monthly in arrears on the first day of each month following any
month in which a Letter of Credit was issued and/or in which a Letter
-33-
40
of Credit remains outstanding. The Letter of Credit Fee shall be computed on the
basis of a 360-day year for the actual number of days elapsed.
ARTICLE IV
PAYMENTS AND PREPAYMENTS
Section 4.1 Revolving Loans.
The Borrower shall repay the outstanding principal balance of the
Revolving Loans, plus all accrued but unpaid interest thereon, on the
Termination Date. The Borrower may prepay Revolving Loans at any time, and
reborrow subject to the terms of this Agreement; provided, however, that with
respect to any LIBOR Revolving Loans prepaid by the Borrower prior to the
expiration date of the Interest Period applicable thereto, the Borrower promises
to pay to the Agent for account of the Lenders the amounts described in Section
5.4 (Funding Losses). In addition, and without limiting the generality of the
foregoing, ON DEMAND the Borrower promises to pay to the Agent, for account of
the Lenders, the amount, without duplication, by which the Aggregate Revolver
Outstandings exceed the Availability (with Availability for this purpose
calculated as if the Aggregate Revolver Outstandings were zero).
Section 4.2 Termination of Facility.
The Borrower may terminate this Agreement upon at least thirty (30)
Business Days' notice to the Agent and the Lenders, upon (a) the payment in full
of all outstanding Revolving Loans, together with accrued interest thereon, and
the cancellation of all outstanding Letters of Credit, (b) the payment of the
early termination fee set forth in the next sentence, (c) the payment in full in
cash of all other Obligations together with accrued interest thereon, and (d)
with respect to any LIBOR Rate Loans prepaid in connection with such termination
prior to the expiration date of the Interest Period applicable thereto, the
payment of the amounts described in Section 5.4 (Funding Losses). If this
Agreement is terminated at any time prior to the Stated Termination Date,
whether pursuant to this Section or pursuant to Section 11.2 (Remedies), the
Borrower shall pay to the Agent, for the account of the Lenders, an early
termination fee determined in accordance with the following table:
PERIOD DURING WHICH
EARLY TERMINATION OCCURS EARLY TERMINATION FEE
On or prior to the first Anniversary Date $ 0.00
After the first Anniversary Date but on or $500,000
prior to the second Anniversary Date
After the second Anniversary Date but on or $250,000
prior to the third Anniversary Date
After the third Anniversary Date but prior $100,000
to 180 days prior to the Stated Termination
Date
-34-
41
Notwithstanding the foregoing, there shall not, however, be an early termination
fee due if the termination is made solely as a result of (i) a replacement
credit facility extended by Bank of America and/or its affiliates to the
Borrower, which generates sufficient proceeds and is in fact used to repay or
replace all obligations in full, (ii) the closing and consummation of a public
or private offering of common stock, secondary offering, Rule 144A offering, by
the Borrower which generates sufficient proceeds for such termination, (iii) the
sale by the Borrower of all or substantially all of its assets which generates
sufficient proceeds and is in fact used for such termination and repayment, or
(iv) Excess Cash Flow as shown on the Borrower's most recent audited annual
financial statements required by Section 7.2(a) for the immediately preceding
fiscal year, by maintaining the outstanding principal balance of the revolving
loans at zero ($0) for the immediately preceding fiscal quarter and, to the
Agent's reasonable satisfaction, as based on projections provided by the
Borrower showing that there is no use, need for, or contemplation of senior debt
for the then next four (4) fiscal quarters. In the event the Borrower in fact
secures a working capital loan secured by Inventory within the four (4) fiscal
quarters following an early termination, the early termination fee that would
have otherwise been due at termination shall be immediately due and payable by
the Borrower and such obligation shall survive the termination of this
Agreement.
Section 4.3 Payments by the Borrower.
(a) No Setoff. All payments to be made by the Borrower shall
be made without setoff, recoupment or counterclaim. Except as otherwise
expressly provided herein, all payments by the Borrower shall be made to the
Agent for the account of the Lenders at the Agent's address set forth in Section
15.8 (Notices), and shall be made in Dollars and in immediately available funds,
no later than 2 p.m. (Chicago time) on the date specified herein. Any payment
received by the Agent later than 2 p.m. (Chicago time) shall be deemed to have
been received on the following Business Day and any applicable interest or fee
shall continue to accrue.
(b) Date of Payment. Subject to the provisions set forth in
the definition of "Interest Period" herein, whenever any payment is due on a day
other than a Business Day, such payment shall be made on the following Business
Day, and such extension of time shall in such case be included in the
computation of interest or fees, as the case may be.
(c) Failure of Borrower to Make Timely Payment. Unless the
Agent receives notice from the Borrower prior to the date on which any payment
is due to the Lenders that the Borrower will not make such payment in full as
and when required, the Agent may assume that the Borrower has made such payment
in full to the Agent on such date in immediately available funds and the Agent
may (but shall not be so required), in reliance upon such assumption, distribute
to each Lender on such due date an amount equal to the amount then due such
Lender. If and to the extent the Borrower has not made such payment in full to
the Agent, each Lender shall repay to the Agent on demand such amount
distributed to such Lender, together with interest thereon at the Federal Funds
Rate for each day from the date such amount is distributed to such Lender until
the date repaid.
Section 4.4 Payments as Revolving Loans.
All payments of principal, interest, reimbursement obligations in
connection with Letters of Credit, fees, premiums and other sums payable
hereunder, including all reimbursement for expenses pursuant to Section 15.7
(Fees and Expenses), may, at the option of the Agent, in its
-35-
42
sole discretion, subject only to the terms of this Section 4.4, be paid from the
proceeds of Revolving Loans made hereunder, whether made following a request by
the Borrower pursuant to Section 2.2 (Revolving Loans) or a deemed request as
provided in this Section 4.4. The Borrower hereby irrevocably authorizes the
Agent to charge the Loan Account for the purpose of paying principal, interest,
reimbursement obligations in connection with Letters of Credit, Enforcement
Costs, fees, premiums and other sums payable hereunder, including reimbursing
expenses pursuant to Section 15.7 (Fees and Expenses), and agrees that all such
amounts charged shall constitute Revolving Loans (including Non-Ratable Loans
and Agent Advances) and that all such Revolving Loans so made shall be deemed to
have been requested by Borrower pursuant to Section 2.2 (Revolving Loans).
Section 4.5 Apportionment, Application and Reversal of Payments.
Aggregate principal and interest payments shall be apportioned ratably
among the Lenders (according to the unpaid principal balance of the Loans to
which such payments relate held by each Lender) and payments of the fees shall,
as applicable, be apportioned ratably among the Lenders. All payments shall be
remitted to the Agent and all such payments not relating to principal or
interest of specific Loans, or not constituting payment of specific fees, and
all proceeds of Collateral received by the Agent, shall be applied, ratably,
subject to the provisions of this Agreement, first, to pay any fees, indemnities
or expense reimbursements then due to the Agent from the Borrower; second, to
pay any fees or expense reimbursements then due to the Lenders from the
Borrower; third, to pay interest due in respect of all Revolving Loans,
including Non-Ratable Loans and Agent Advances; fourth, to pay or prepay
principal of the Non-Ratable Loans and Agent Advances; fifth, to pay or prepay
principal of the Revolving Loans (other than Non-Ratable Loans and Agent
Advances) and unpaid reimbursement obligations in respect of Letters of Credit;
and sixth, to the payment of any other Obligation due to the Agent or any Lender
by the Borrower. Notwithstanding anything to the contrary contained in this
Agreement, unless so directed by the Borrower, or unless an Event of Default is
outstanding, neither the Agent nor any Lender shall apply any payments which it
receives to any LIBOR Revolving Loan, except (a) on the expiration date of the
Interest Period applicable to any such LIBOR Rate Loan, or (b) in the event, and
only to the extent, that there are no outstanding Base Rate Revolving Loans. The
Agent shall promptly distribute to each Lender, pursuant to the applicable wire
transfer instructions received from each Lender in writing, such funds as it may
be entitled to receive, subject to a Settlement delay as provided for in Section
2.2(h)(Settlement). The Agent and the Lenders shall have the continuing and
exclusive right to apply and reverse and reapply any and all such proceeds and
payments to any portion of the Obligations.
Section 4.6 Indemnity for Returned Payments.
If, after receipt of any payment of, or proceeds applied to the payment
of, all or any part of the Obligations, the Agent or any Lender is for any
reason compelled to surrender such payment or proceeds to any Person, because
such payment or application of proceeds is invalidated, declared fraudulent, set
aside, determined to be void or voidable as a preference, impermissible setoff,
or a diversion of trust funds, or for any other reason, then the Obligations or
part thereof intended to be satisfied shall be revived and continue and this
Agreement shall continue in full force as if such payment or proceeds had not
been received by the Agent or such Lender, and the Borrower shall be liable to
pay to the Agent, and hereby does indemnify the Agent and the Lenders and hold
the Agent and the Lenders harmless for, the amount of such
-36-
43
payment or proceeds surrendered. The provisions of this Section 4.6 shall be and
remain effective notwithstanding any contrary action which may have been taken
by the Agent or any Lender in reliance upon such payment or application of
proceeds, and any such contrary action so taken shall be without prejudice to
the Agent's and the Lenders' rights under this Agreement and shall be deemed to
have been conditioned upon such payment or application of proceeds having become
final and irrevocable. The provisions of this Section 4.6 shall survive the
termination of this Agreement.
Section 4.7 Agent's and Lenders' Books and Records; Monthly Statements.
The Borrower agrees that the Agent's and each Lender's books and
records showing the Obligations and the transactions pursuant to this Agreement
and the other Loan Documents shall be admissible in any action or proceeding
arising therefrom, and shall constitute rebuttably presumptive proof thereof,
irrespective of whether any Obligation is also evidenced by a promissory note or
other instrument. The Agent will provide to the Borrower a monthly statement of
Loans, payments, and other transactions pursuant to this Agreement. Such
statement shall be deemed correct, accurate, and binding on the Borrower and an
account stated (except for reversals and reapplications of payments made as
provided in Section 4.5 (Apportionment; Application and Reversal of Payments)
and corrections of errors discovered by the Agent), unless the Borrower notifies
the Agent in writing to the contrary within thirty (30) days after such
statement is rendered. In the event a timely written notice of objections is
given by the Borrower, only the items to which exception is expressly made will
be considered to be disputed by the Borrower.
ARTICLE V
TAXES, YIELD PROTECTION AND ILLEGALITY
Section 5.1 Taxes.
(a) No Withholding in Payments to Lenders. Any and all
payments by the Borrower to each Lender or the Agent under this Agreement and
any other Loan Document shall be made free and clear of, and without deduction
or withholding for any Taxes. In addition, the Borrower shall pay all Other
Taxes.
(b) Indemnification of Agent and Lenders. The Borrower agrees
to indemnify and hold harmless each Lender and the Agent for the full amount of
Taxes or Other Taxes (including any Taxes or Other Taxes imposed by any
jurisdiction on amounts payable under this Section) paid by the Lender or the
Agent and any liability (including penalties, interest, additions to tax and
expenses) arising therefrom or with respect thereto, whether or not such Taxes
or Other Taxes were correctly or legally asserted. Payment under this
indemnification shall be made within 30 thirty days after the date the Lender or
the Agent makes written demand therefor.
(c) Requirements of Law. If the Borrower shall be required by
law to deduct or withhold any Taxes or Other Taxes from or in respect of any sum
payable hereunder to any Lender or the Agent, then:
(i) the sum payable shall be increased as necessary
so that after making all required deductions and withholdings
(including deductions and withholdings
-37-
44
applicable to additional sums payable under this Section) such
Lender or the Agent, as the case may be, receives an amount
equal to the sum it would have received had no such deductions
or withholdings been made;
(ii) the Borrower shall make such deductions and
withholdings;
(iii) the Borrower shall pay the full amount deducted
or withheld to the relevant taxing authority or other
authority in accordance with applicable law; and
(iv) the Borrower shall also pay to each Lender or
the Agent for the account of such Lender, at the time interest
is paid, all additional amounts which the respective Lender
specifies as necessary to preserve the after-tax yield the
Lender would have received if such Taxes or Other Taxes had
not been imposed.
(d) Evidence of Payment. Within thirty (30) days after the date of any
payment by the Borrower of Taxes or Other Taxes, the Borrower shall furnish the
Agent the original or a certified copy of a receipt evidencing payment thereof,
or other evidence of payment satisfactory to the Agent.
(e) Change in Lending Office. If the Borrower is required to pay
additional amounts to any Lender or the Agent pursuant to subsection (c) of this
Section, then such Lender shall use reasonable efforts (consistent with legal
and regulatory restrictions) to change the jurisdiction of its lending office so
as to eliminate any such additional payment by the Borrower which may thereafter
accrue, if such change in the judgment of such Lender is not otherwise
disadvantageous to such Lender.
Section 5.2 Illegality.
(a) Suspension of LIBOR Rate Loans. If any Lender determines
that the introduction of any Requirement of Law, or any change in any
Requirement of Law, or in the interpretation or administration of any
Requirement of Law, has made it unlawful, or that any central bank or other
Governmental Authority has asserted that it is unlawful, for any Lender or its
applicable lending office to make LIBOR Rate Loans, then, on notice thereof by
the Lender to the Borrower through the Agent, any obligation of that Lender to
make LIBOR Rate Loans shall be suspended until the Lender notifies the Agent and
the Borrower that the circumstances giving rise to such determination no longer
exist.
(b) Repayment of LIBOR Rate Loans. If a Lender determines that
it is unlawful to maintain any LIBOR Rate Loan, the Borrower shall, upon its
receipt of notice of such fact and demand from such Lender (with a copy to the
Agent), prepay in full such LIBOR Rate Loans of that Lender then outstanding,
together with interest accrued thereon and amounts required under Section 5.4
(Funding Losses), either on the last day of the Interest Period thereof, if the
Lender may lawfully continue to maintain such LIBOR Rate Loans to such day, or
immediately, if the Lender may not lawfully continue to maintain such LIBOR Rate
Loan. If the Borrower is required to so prepay any LIBOR Rate Loan, then
concurrently with such prepayment, the Borrower shall borrow from the affected
Lender, in the amount of such repayment, a Base Rate Loan.
-38-
45
Section 5.3 Increased Costs and Reduction of Return.
(a) Increased Costs. If any Lender determines that, due to
either (i) the introduction of or any change in the interpretation of any law or
regulation or (ii) the compliance by that Lender with any guideline or request
from any central bank or other Governmental Authority (whether or not having the
force of law), there shall be any increase in the cost to such Lender of
agreeing to make or making, funding or maintaining any LIBOR Rate Loans, then
the Borrower shall be liable for, and shall from time to time, upon demand (with
a copy of such demand to be sent to the Agent), pay to the Agent for the account
of such Lender, additional amounts as are sufficient to compensate such Lender
for such increased costs.
(b) Reduction of Return. If any Lender shall have determined
that (i) the introduction of any Capital Adequacy Regulation, (ii) any change in
any Capital Adequacy Regulation, (iii) any change in the interpretation or
administration of any Capital Adequacy Regulation by any central bank or other
Governmental Authority charged with the interpretation or administration
thereof, or (iv) compliance by the Lender or any corporation or other entity
controlling the Lender with any Capital Adequacy Regulation, affects or would
affect the amount of capital required or expected to be maintained by the Lender
or any corporation or other entity controlling the Lender and (taking into
consideration such Lender's or such corporation's or other entity's policies
with respect to capital adequacy and such Lender's desired return on capital)
determines that the amount of such capital is increased as a consequence of any
Commitments, loans, credits or obligations under this Agreement, then, upon
demand of such Lender to the Borrower through the Agent, the Borrower shall pay
to the Lender, from time to time as specified by the Lender, additional amounts
sufficient to compensate the Lender for such increase.
Section 5.4 Funding Losses.
The Borrower shall reimburse each Lender and hold each Lender harmless
from any loss or expense which such Lender may sustain or incur as a consequence
of:
(i) the failure of the Borrower to make on a timely basis any
payment of principal of any LIBOR Rate Loan;
(ii) the failure of the Borrower to borrow, continue or
convert a Loan after the Borrower has given (or is deemed to have
given) a Notice of Borrowing or a Notice of Conversion/Continuation;
(iii) the prepayment or other payment (including after
acceleration thereof) of an LIBOR Rate Loan on a day that is not the
last day of the relevant Interest Period;
including any such loss or expense arising from the liquidation or reemployment
of funds obtained by it to maintain its LIBOR Rate Loans or from fees payable to
terminate the deposits from which such funds were obtained.
-39-
46
Section 5.5 Inability to Determine Rates.
If the Agent determines that for any reason adequate and reasonable
means do not exist for determining the LIBOR Rate for any requested Interest
Period with respect to a proposed LIBOR Rate Loan, or that the LIBOR Rate for
any requested Interest Period with respect to a proposed LIBOR Rate Loan does
not adequately and fairly reflect the cost to the Lenders of funding such Loan,
the Agent will promptly so notify the Borrower and each Lender. Thereafter, the
obligation of the Lenders to make or maintain LIBOR Rate Loans hereunder shall
be suspended until the Agent revokes such notice in writing. Upon receipt of
such notice, the Borrower may revoke any Notice of Borrowing or Notice of
Conversion/Continuation then submitted by it. If the Borrower does not revoke
such Notice, the Lenders shall make, convert or continue the Loans, as proposed
by the Borrower, in the amount specified in the applicable notice submitted by
the Borrower, but such Loans shall be made, converted or continued as Base Rate
Loans instead of LIBOR Rate Loans.
Section 5.6 Certificates of Lenders.
Any Lender claiming reimbursement or compensation under this ARTICLE V
(Taxes, Yield Protection and Illegality) shall deliver to the Borrower (with a
copy to the Agent) a certificate setting forth in reasonable detail the amount
payable to the Lender hereunder and such certificate shall be conclusive and
binding on the Borrower in the absence of manifest error.
Section 5.7 Survival.
The agreements and obligations of the Borrower in this ARTICLE V
(Taxes, Yield Protection and Illegality) shall survive the payment of all other
Obligations.
ARTICLE VI
COLLATERAL
Section 6.1 Grant of Security Interest.
(a) Collateral. As security for all present and future
Obligations, the Borrower hereby grants to the Agent, for the ratable benefit of
the Agent and the Lenders, a continuing security interest in, lien on,
assignment of and right of set-off against, all of the following property of the
Borrower, whether now owned or existing or hereafter acquired or arising,
regardless of where located:
(i) all Inventory; and
(ii) all Proceeds.
All of the foregoing is herein collectively referred to as the "Collateral."
(b) Cross-Collateralization. All of the Obligations shall be
secured by all of the Collateral.
-40-
47
Section 6.2 Perfection and Protection of Security Interest.
(a) Borrower's Obligations. The Borrower shall, at its
expense, perform all steps requested by the Agent at any time to perfect,
maintain, protect, and enforce the Agent's Liens, including, without limitation:
(i) filing and recording of the financing or continuation statements, and
amendments thereof, in form and substance satisfactory to the Agent; (ii)
delivering to the Agent the originals of all instruments, documents, and chattel
paper, and all other Collateral of which the Agent determines it should have
physical possession in order to perfect and protect the Agent's security
interest therein, duly pledged, endorsed or assigned to the Agent without
restriction; (iii) delivering to the Agent warehouse receipts covering any
portion of the Collateral located in warehouses and for which warehouse receipts
are issued and certificates of title covering any portion of the Collateral for
which certificates of title have been issued; (iv) when an Event of Default
exists, transferring Inventory to warehouses designated by the Agent; (v)
placing notations on the Borrower's books of account to disclose the Agent's
security interest; (vii) delivering to the Agent all letters of credit relating
to Collateral on which the Borrower is named beneficiary; and (viii) taking such
other steps as are deemed necessary or desirable by the Agent to maintain and
protect the Agent's Liens. To the extent permitted by applicable law, the Agent
may file, without the Borrower's signature, one or more financing statements
disclosing the Agent's Liens. The Borrower agrees that a carbon, photographic,
photostatic, or other reproduction of this Agreement or of a financing statement
is sufficient as a financing statement.
(b) Warehousemen, Bailees, etc. If any Collateral is at any
time in the possession or control of any warehouseman, bailee or any of the
Borrower's agents or processors, then the Borrower shall notify the Agent
thereof and shall, at the request of Agent, notify such Person of the Agent's
security interest in such Collateral and instruct such Person to hold all such
Collateral for the Agent's account subject to the Agent's instructions. If at
any time any Collateral is located on any operating facility of the Borrower
which is not owned by the Borrower, then the Borrower shall, at the request of
the Agent, obtain written waivers, in form and substance satisfactory to the
Agent, of all present and future Liens to which the owner or lessor of such
premises may be entitled to assert against the Collateral. The Agent
acknowledges that the required instructions and waivers will not all be
available on the Closing Date. The Borrower agrees to keep no more than an
aggregate of $40,000,000 of Inventory at locations where such instructions have
not been given and waivers have not been obtained, reducing to $20,000,000 on
and after February 1, 2000. Without limiting the Borrower's agreements, the
Agent shall be entitled to establish reserves against Availability with respect
to locations where such instructions have not been given and waivers have not
been obtained.
(c) Additional Documentation. From time to time, the Borrower
shall, upon the Agent's request, execute and deliver confirmatory written
instruments pledging to the Agent, for the ratable benefit of the Agent and the
Lenders, the Collateral with respect to the Borrower, but the Borrower's failure
to do so shall not affect or limit any security interest or any other rights of
the Agent or any Lender in and to the Collateral with respect to the Borrower.
So long as this Agreement is in effect and until all Obligations have been fully
satisfied, the Agent's Liens shall continue in full force and effect in all
Collateral (whether or not deemed eligible for the purpose of calculating the
Availability or as the basis for any advance, loan, extension of credit, or
other financial accommodation).
-41-
48
Section 6.3 Location of Collateral.
The Borrower represents and warrants to the Agent and the Lenders that:
(a) Schedule 6.3 is a correct and complete list of the Borrower's chief
executive office, the location of its books and records, the locations of the
Collateral (excluding Inventory which is in transit from one location to another
or to customers of the Borrower), and the locations of all of its other places
of business; and (b) Schedule 6.3 correctly identifies any of such facilities
and locations that are not owned by the Borrower and sets forth the names of the
owners and lessors or sublessors of and, to the best of the Borrower's
knowledge, the holders of any mortgages on, such facilities and locations. The
Borrower covenants and agrees that it will not (i) maintain any Collateral at
any location other than those locations listed for the Borrower on Schedule 6.3,
(ii) otherwise change or add to any of such locations, or (iii) change the
location of its chief executive office from the location identified in Schedule
6.3, unless in any such case it gives the Agent at least ten (10) days' prior
written notice thereof and executes any and all financing statements and other
documents that the Agent requests in connection therewith. Without limiting the
foregoing, the Borrower represents that all of its Inventory (other than
Inventory in transit) is, and covenants that all of its Inventory will be,
located either (a) on premises owned by the Borrower, (b) on premises leased by
the Borrower, provided that the Agent has, if requested by the Agent, received
an executed landlord waiver from the landlord of such premises in form and
substance satisfactory to the Agent, or (c) in a public warehouse, provided that
the Agent has, if requested by the Agent, received an executed bailee letter
from the applicable public warehouseman in form and substance satisfactory to
the Agent.
Section 6.4 Title to, Liens on, and Sale and Use of Collateral.
The Borrower represents and warrants to the Agent and the Lenders and
agrees with the Agent and the Lenders that: (a) all of the Collateral is and
will continue to be owned by the Borrower free and clear of all Liens
whatsoever, except for the Permitted Liens described in clauses (a), (c) and (e)
of the definition thereof; (b) the Agent's Liens in the Collateral will not be
subject to any prior Lien; (c) the Borrower will use, store, and maintain the
Collateral with all reasonable care and will use such Collateral for lawful
purposes only; and (d) the Borrower will not, without the Agent's prior written
approval, sell, or dispose of or permit the sale or disposition of any of the
Collateral except for sales in the ordinary course of business of Inventory and
sales to WRI of WRI Assets. The inclusion of proceeds in the Collateral shall
not be deemed to constitute the Agent's or any Lender's consent to any sale or
other disposition of the Collateral except as expressly permitted herein.
Section 6.5 Appraisals.
Whenever a Default or Event of Default exists, and at such other times
not more frequently than once a year as the Agent requests, the Borrower shall,
at its expense (subject to any applicable limitations set forth in Section 15.7
(Fees and Expenses)) and upon the Agent's request, provide the Agent with
appraisals or updates thereof of any or all of the Collateral from an appraiser,
and prepared on a basis, satisfactory to the Agent, such appraisals and updates
to include, without limitation, information required by applicable law and
regulation and by the internal policies of the Lenders.
-42-
49
Section 6.6 Access and Examination; Confidentiality.
(a) Access and Examination. The Agent, accompanied by any
Lender that so elects, may at all reasonable times during regular business hours
(and at any time when a Default or Event of Default exists and is continuing)
have access to, examine, audit, make extracts from or copies of and inspect any
or all of the Borrower's records, files, and books of account and the
Collateral, and discuss the Borrower's affairs with the Borrower's officers and
management. The Borrower will deliver to the Agent any instrument necessary for
the Agent to obtain records from any service bureau maintaining records for the
Borrower. The Agent may, and at the direction of the Majority Lenders shall, at
any time when a Default or Event of Default exists, and at the Borrower's
expense (subject to any applicable limitations set forth in Section 15.7 (Fees
and Expenses)), make copies of all of the Borrower's books and records, or
require the Borrower to deliver such copies to the Agent. The Agent may, without
expense to the Agent, use such of the Borrower's respective personnel,
equipment, machinery supplies, and premises as may be reasonably necessary for
maintaining or enforcing the Agent's Liens. The Agent shall have the right, at
any time, in the Agent's name or in the name of a nominee of the Agent, to
verify the validity, amount or any other matter relating to the Inventory, or
other Collateral, by mail, telephone, or otherwise.
(b) Confidentiality. The Borrower agrees that, subject to the
Borrower's prior consent for uses other than in a traditional tombstone, which
consent shall not be unreasonably withheld or delayed, the Agent and each Lender
may use the Borrower's name in advertising and promotional material and in
conjunction therewith disclose the general nature and size of this Agreement.
The Agent and each Lender severally agree to take normal and reasonable
precautions and exercise due care to maintain the confidentiality of all
information provided to the Agent or such Lender by or on behalf of the
Borrower, under this Agreement or any other Loan Document, and neither the
Agent, nor such Lender nor any of their respective Affiliates shall use any such
information other than in connection with or in enforcement of this Agreement
and the other Loan Documents, except to the extent that such information (i) was
or becomes generally available to the public other than as a result of
disclosure by the Agent or such Lender, or (ii) was or becomes available on a
nonconfidential basis from a source other than the Borrower, provided that such
source is not bound by a confidentiality agreement with the Borrower known to
the Agent or such Lender; provided, however, that the Agent and any Lender may
disclose such information (A) at the request or pursuant to any requirement of
any Governmental Authority to which the Agent or such Lender is subject or in
connection with an examination of the Agent or such Lender by any such
Governmental Authority; (B) pursuant to subpoena or other court process; (C)
when required to do so in accordance with the provisions of any applicable
requirement of law; (D) to the extent reasonably required in connection with any
litigation or proceeding (including, but not limited to, any bankruptcy
proceeding) to which the Agent, any Lender or their respective Affiliates may be
party; (E) to the extent reasonably required in connection with the exercise of
any remedy hereunder or under any other Loan Document; (F) to the Agent's or
such Lender's independent auditors, accountants, attorneys and other
professional advisors; (G) to any prospective Participant or assignee under any
Assignment and Acceptance, actual or potential, provided that such prospective
Participant or assignee agrees to keep such information confidential to the same
extent required of the Agent and the Lenders hereunder; (H) as expressly
permitted under the terms of any other document or agreement regarding
confidentiality to which the Borrower is party or is deemed party with the Agent
or
-43-
50
such Lender, and (I) to its Affiliates. The Agent and Lenders hereby agree to
notify the Borrower promptly after having been requested to make the disclosures
pursuant to (B), (C) and (D) above (unless the Agent or the applicable Lenders
conclude in good faith that such notice may be in violation of applicable Laws)
and further agree that the Borrower may, at its own cost and expense, seek
protective orders in connection therewith.
Section 6.7 Collateral Reporting.
The Borrower shall provide the Agent with the following documents at
the following times in form satisfactory to the Agent: (a) on a monthly basis
until Availability is less then $40,000,000, and on a weekly basis thereafter,
perpetual Inventory reports (provided that, although the weekly reports shall be
derived from the Borrower's perpetual Inventory system, the weekly reports shall
be subject to reconciliations and adjustments that the Borrower in the ordinary
course of business performs only at month-end) by category (including a detailed
calculation of Inventory that is not included among Eligible Inventory, which
detailed calculation need only be furnished monthly even if perpetual Inventory
reports are being furnished weekly); (b) upon request, copies of invoices in
connection with the Borrower's customer statements, credit memos, remittance
advices and reports, deposit slips, shipping and delivery documents in
connection with Inventory acquired and sold by the Borrower and related purchase
orders and invoices; (c) upon request, a statement of the balance of each of the
Intercompany Accounts; (d) such other reports as to the Collateral of the
Borrower as the Agent shall reasonably request from time to time; (e) if
Availability is less then $40,000,000 thereafter on a daily basis thereafter,
copies of the settlement statements provided under the WRI Participation
Agreements; and (f) with the delivery of each of the foregoing, a certificate of
the Borrower executed by an officer thereof certifying as to the accuracy and
completeness of the foregoing. If any of the Borrower's records or reports of
the Collateral are prepared by an accounting service or other agent, the
Borrower hereby authorizes such service or agent to deliver such records,
reports, and related documents to the Agent, for distribution to the Lenders
Section 6.8 Collection of Accounts; Payments.
(a) Borrower's Collection. At any time that Availability is
less than $25,000,000 or the Aggregate Revolver Outstandings exceed $75,000,000,
there shall be immediately due and paying from the Borrower as a mandatory
prepayment of the Revolving Loans an amount equal to all amounts collected by
the Borrower on account of the sale to WRI of WRI Assets (including, without
limitation, payment of the WRI Obligations incurred in connection with such
sales of WRI Assets), up to and including the outstanding principal balance of
the Revolving Loans. Until the Agent notifies the Borrower to the contrary
(which notice may not be given unless (i) an Event of Default exists, (ii)
Availability has fallen below $25,000,000 or (iii) Aggregate Revolver
Outstandings exceed $75,000,000), the Borrower shall make collections of all
such amounts for the Agent, and shall receive all payments as the Agent's
trustee. For purposes of this Section 6.8, all WRI Obligations shall be deemed
to be paid in the inverse order of the date on which they arose, and payments
from WRI shall be applied to WRI Obligations owed in consideration of sales of
Collateral before being applied to other WRI Obligations. If (i) an Event of
Default exists, (ii) Availability has fallen below $25,000,000 or (iii)
Aggregate Revolver Outstandings exceed $75,000,000, following notice from the
Agent, the Borrower shall immediately deliver all payments in their original
form duly endorsed in blank into a Payment Account established for the account
of the Borrower at a bank acceptable to Agent and subject to
-44-
51
documentation acceptable to Agent. If the Agent requests, which request may not
be made unless (i) an Event of Default exists, (ii) Availability has fallen
below $25,000,000 or (iii) Aggregate Revolver Outstandings exceed $75,000,000,
the Borrower shall establish a lock-box service for collections of WRI
Obligations and Collateral at a bank acceptable to the Agent and pursuant to
documentation satisfactory to the Agent. If such lock-box service is
established, the Borrower shall instruct WRI and any other Person obligated
under the Collateral to make all payments directly to the address established
for such service. If, notwithstanding such instructions, the Borrower receives
any proceeds of WRI Obligations, it shall receive such payments as the Agent's
trustee, and shall immediately deliver such payments to the Agent in their
original form duly endorsed in blank or deposit them into a Payment Account, as
the Agent may direct. All collections received in any such lock-box or Payment
Account or directly by the Borrower or the Agent, and all funds in any Payment
Account or other account to which such collections are deposited shall be
subject to the Agent's sole control. The Borrower agrees, within thirty (30)
days following the date of this Agreement, to enter into a blocked account or
other agreement pursuant to which, as required under this Section 6.8 and as
contemplated under Section 2.3 of the WRI Intercreditor Agreement, the WRI
Participation Agent will, upon the Agent's request without the need for further
notice to or consent of the Borrower, directly remit to the Agent for
application against the Obligations all payments of WRI Obligations which it
would otherwise be remitting to the Borrower under the terms of the WRI
Documents. The Agent or the Agent's designee may, at any time after the
occurrence of an Event of Default, notify account debtors that the Accounts have
been assigned to the Agent and of the Agent's security interest therein, and may
collect them directly and charge the collection costs and expenses to the
Borrower's Loan Account as a Revolving Loan. So long as an Event of Default has
occurred and is continuing, the Borrower, at the Agent's request, shall execute
and deliver to the Agent such documents as the Agent shall require to grant the
Agent access to any post office box in which collections of Accounts are
received.
(b) Deposit by Borrower. If sales of Inventory are made or
services are rendered for cash, the Borrower shall immediately deliver to the
Agent or deposit into a Payment Account the cash which the Borrower receives.
(c) Borrower's Loan Account. All payments, including
immediately available funds received by the Agent at a bank designated by it,
received by the Agent on account of Accounts or as proceeds of other Collateral
will be the Agent's sole property for its benefit and the benefit of the Lenders
and will be credited to the Borrower's Loan Account (conditional upon final
collection) on the Business Day of collection.
(d) Credits Conditioned upon Final Collection. In the event
the Borrower repays all of the Obligations upon the termination of this
Agreement or upon acceleration of the Obligations, other than through the
Agent's receipt of payments on account of the Accounts or proceeds of the other
Collateral, such payment will be credited, upon final collection, to the
Borrower's Loan Account.
Section 6.9 Inventory; Perpetual Inventory.
The Borrower represents and warrants to the Agent and the Lenders and
agrees with the Agent and the Lenders that all of the Inventory (other than raw
materials to be used by the Borrower in the production of finished goods) owned
by the Borrower is and will be held for sale
-45-
52
or lease, or to be furnished in connection with the rendition of services, in
the ordinary course of the Borrower's business, and is and will be fit for such
purposes. The Borrower will keep its Inventory in good and marketable condition,
at its own expense. Borrower will not, without the prior written consent of the
Agent, acquire or accept any Inventory on consignment or approval. The Borrower
agrees that all Inventory produced in the United States will be produced in
accordance with the Federal Fair Labor Standards Act of 1938, as amended, and
all rules, regulations, and orders thereunder. The Borrower will conduct a
physical count of the Inventory at least once per Fiscal Year, and after and
during the continuation of an Event of Default, at such other times as the Agent
requests. The Borrower will maintain a perpetual inventory reporting system at
all times. The Borrower will not, except in the ordinary course of its business
without the Agent's written consent, sell any Inventory on a ▇▇▇▇-and-hold,
guaranteed sale, sale and return, sale on approval, consignment, or other
repurchase or return basis.
Section 6.10 WRI Receivables Sale Agreements.
The Borrower shall fully perform all of its obligations under each of
the WRI Receivables Sale Agreements, and shall enforce all of its rights and
remedies thereunder, in each case, as it deems appropriate in its business
judgment; provided, however, that the Borrower shall not take any action or fail
to take any action with respect to the WRI Receivables Sale Agreements which
would cause the termination of a material provision of the WRI Receivables Sale
Agreements. Without limiting the generality of the foregoing, the Borrower shall
promptly take all action necessary or appropriate to permit, and shall not take
any action which would have any materially adverse effect upon, the full
enforcement of all rights to payment under the WRI Receivables Sale Agreements.
The Borrower shall not, except as otherwise permitted by Section 9.13
(Amendment) without the Agent's and the Majority Lenders' prior written consent
(which consent shall not be unreasonably withheld or delayed), modify, amend,
supplement, compromise, satisfy, release, or discharge any the WRI Receivables
Sale Agreements, any Person liable directly or indirectly with respect thereto,
or any agreement relating to the WRI Receivables Sale Agreements. The Borrower
shall notify the Agent and the Lenders in writing, promptly after the Borrower
becomes aware thereof, of any event or fact which could give rise to a claim by
it for indemnification under any of the WRI Receivables Sale Agreements, and
shall diligently pursue such right and report to the Agent on all further
developments with respect thereto. At any time that any Obligations are due and
owing, or if Availability is less than $25,000,000 or the Aggregate Revolver
Outstandings exceed $75,000,000, the Borrower shall remit directly to the Agent
for application to the Obligations in such order as the Majority Lenders shall
determine, all amounts received by the Borrower in consideration of the sale to
WRI of WRI Assets (as indemnification or otherwise) pursuant to the WRI
Receivables Sale Agreements.
Section 6.11 Right to Cure.
The Agent may, in its discretion, and shall, at the direction of the
Majority Lenders, pay any amount or do any act required of the Borrower
hereunder or under any other Loan Document in order to preserve, protect,
maintain or enforce the Obligations, the Collateral or the Agent's Liens
therein, and which the Borrower fails to pay or do, including, without
limitation, payment of any judgment against the Borrower, any insurance premium,
any warehouse charge, any finishing or processing charge, any landlord's claim,
and any other Lien upon or with respect to the Collateral. All payments that the
Agent makes under this Section 6.11 and all out-of-pocket
-46-
53
costs and expenses that the Agent pays or incurs in connection with any action
taken by it hereunder shall be charged to the Borrower's Loan Account as a
Revolving Loan. Any payment made or other action taken by the Agent under this
Section 6.11 shall be without prejudice to any right to assert an Event of
Default hereunder and to proceed thereafter as herein provided.
Section 6.12 Power of Attorney.
The Borrower hereby appoints the Agent and the Agent's designee as the
Borrower's attorney, with power: (a) whether or not an Event of Default exists,
(i) to endorse the Borrower's name on any checks, notes, acceptances, money
orders, or other forms of payment or security that come into the Agent's or any
Lender's possession; ) and (ii) to sign the Borrower's name on financing
statements and other public records and to file any such financing statements by
electronic means with or without a signature as authorized or required by
applicable law or filing procedure, and (b) if an Event of Default exists, (i)
to sign the Borrower's name on any invoice, ▇▇▇▇ of lading, warehouse receipt or
other document of title relating to any Collateral, on drafts against customers,
on assignments of Accounts, on notices of assignment; (ii) to clear Inventory,
the purchase of which was financed with Letters of Credit, through customs in
the Borrower's name, the Agent's name or the name of the Agent's designee, and
to sign and deliver to customs officials powers of attorney in the Borrower's
name for such purpose; and (iii) to do all things necessary to carry out this
Agreement. The Borrower ratifies and approves all acts of such attorney. None of
the Lenders or the Agent nor their attorneys will be liable for any acts or
omissions or for any error of judgment or mistake of fact or law. This power,
being coupled with an interest, is irrevocable until this Agreement has been
terminated and the Obligations have been fully satisfied.
Section 6.13 The Agent's and Lenders' Rights, Duties and Liabilities.
The Borrower assumes all responsibility and liability arising from or
relating to the use, sale or other disposition of the Collateral. The
Obligations shall not be affected by any failure of the Agent or any Lender to
take any steps to perfect the Agent's Liens or to collect or realize upon the
Collateral, nor shall loss of or damage to the Collateral release the Borrower
from any of the Obligations. Following the occurrence and continuation of an
Event of Default, the Agent may (but shall not be required to), and at the
direction of the Majority Lenders shall, without notice to or consent from the
Borrower, ▇▇▇ upon or otherwise collect, extend the time for payment of, modify
or amend the terms of, compromise or settle for cash, credit, or otherwise upon
any terms, grant other indulgences, extensions, renewals, compositions, or
releases, and take or omit to take any other action with respect to the
Collateral, any security therefor, any agreement relating thereto, any insurance
applicable thereto, or any Person liable directly or indirectly in connection
with any of the foregoing, without discharging or otherwise affecting the
liability of the Borrower for the Obligations or under this Agreement or any
other agreement now or hereafter existing between the Agent and/or any Lender
and the Borrower.
-47-
54
ARTICLE VII
BOOKS AND RECORDS; FINANCIAL INFORMATION; NOTICES
Section 7.1 Books and Records.
The Borrower shall maintain, at all times, correct and complete books,
records and accounts in which complete, correct and timely entries are made of
its transactions in accordance with GAAP applied consistently with the audited
Financial Statements required to be delivered pursuant to Section 7.2(a) (Annual
Statement). The Borrower shall, by means of appropriate entries, reflect in such
accounts and in all Financial Statements proper liabilities and reserves for all
taxes and proper provision for depreciation and amortization of property and bad
debts, all in accordance with GAAP. The Borrower shall maintain at all times
books and records pertaining to the Collateral in such detail, form and scope as
the Agent or any Lender shall reasonably require, including, but not limited to,
records of all (a) the return, rejections, repossession, stoppage in transit,
loss, damage, or destruction of any Inventory; and (b) all other dealings
affecting the Collateral.
Section 7.2 Financial Information.
The Borrower shall promptly furnish to the Agent, in sufficient copies
for distribution by the Agent to each Lender, in such detail as the Agent shall
request, the following:
(a) Annual Statement. As soon as available, but in any event
not later than one hundred twenty (120) days after the close of each Fiscal
Year, consolidated audited and consolidating unaudited balance sheets, and
statements of income and expense, cash flow and of stockholders' equity for the
Borrower and its Subsidiaries for such Fiscal Year, and the accompanying notes
thereto, setting forth in each case in comparative form figures for the previous
Fiscal Year, all in reasonable detail, fairly presenting the financial position
and the results of operations of the Borrower and its consolidated Subsidiaries
as at the date thereof and for the Fiscal Year then ended, and prepared in
accordance with GAAP. Such statements shall be examined in accordance with
generally accepted auditing standards by and, in the case of such statements
performed on a consolidated basis, accompanied by a report thereon unqualified
as to scope of independent certified public accountants selected by the Borrower
and reasonably satisfactory to the Agent. The Borrower, simultaneously with
retaining such independent public accountants to conduct such annual audit,
shall send a letter to such accountants, with a copy to the Agent and the
Lenders, notifying such accountants that one of the purposes for retaining such
accountants' services and having audited financial statements prepared by them
is for use by the Agent and the Lenders. The Borrower hereby authorizes the
Agent to communicate directly with its certified public accountants and, by this
provision, authorizes those accountants to disclose to the Agent any and all
financial statements and other supporting financial documents and schedules
relating to the Borrower and to discuss directly with the Agent the finances and
affairs of the Borrower.
(b) Monthly Statements. As soon as available, but in any event
not later than thirty (30) days after the end of each month, consolidated
unaudited balance sheets of the Borrower and its consolidated Subsidiaries as at
the end of such month, and consolidated unaudited statements of income and
expense and cash flow for the Borrower and its consolidated Subsidiaries for
such month and for the period from the beginning of the Fiscal Year to the end
-48-
55
of such month, all in reasonable detail, fairly presenting the financial
position and results of operations of the Borrower and its consolidated
Subsidiaries as at the date thereof and for such periods, containing a detailed
computation of the setting forth in reasonable detail the calculations required
to establish that the Borrower was in compliance with the covenant set forth in
Section 9.12 (Minimum Availability) for the period reported, and prepared in
accordance with GAAP (subject to year-end adjustments and the absence of
required footnotes) applied consistently with the audited Financial Statements
required to be delivered pursuant to Section 7.2(a) (Annual Statement). The
Borrower shall certify by a certificate signed by its chief financial officer
that all such statements have been prepared in accordance with GAAP and present
fairly, subject to normal year-end adjustments, the Borrower's financial
position as at the dates thereof and its results of operations for the periods
then ended.
(c) Quarterly Statements. As soon as available, but in any
event not later than five (5) days after the filing of each of the Borrower's
10-Q's with the Securities and Exchange Commission, consolidated unaudited and
consolidating balance sheets of the Borrower and its consolidated Subsidiaries
as at the end of such quarter, and consolidated unaudited statements of income
and expense and statement of cash flows for the Borrower and its Subsidiaries
for such quarter and for the period from the beginning of the Fiscal Year to the
end of such quarter, all in reasonable detail, fairly presenting the financial
position and results of operation of the Borrower and its Subsidiaries as at the
date thereof and for such periods, prepared in accordance with GAAP consistent
with the audited Financial Statements required to be delivered pursuant to
Section 7.2(a) (Annual Statement). The Borrower shall certify by a certificate
signed by its chief financial officer that all such statements have been
prepared in accordance with GAAP and present fairly, subject to normal year-end
adjustments, the Borrower's financial position as at the dates thereof and its
results of operations for the periods then ended.
(d) Certificate of Responsible Officer. With each of the
annual audited Financial Statements delivered pursuant to Section 7.2(a) (Annual
Statement), and within forty-five (45) days after the end of each fiscal
quarter, a certificate of a Responsible Officer of the Borrower (i) setting
forth in reasonable detail the calculations required to establish that the
Borrower was in compliance with the covenant set forth in Section 9.12 (Minimum
Availability) during the period covered in such Financial Statements and as at
the end thereof, and (ii) stating that, except as explained in reasonable detail
in such certificate, (A) all of the representations and warranties of the
Borrower contained in this Agreement and the other Loan Documents are correct
and complete in all material respects as at the date of such certificate as if
made at such time, except for those that speak as of a particular day, (B) the
Borrower is, at the date of such certificate, in compliance in all material
respects with all of its respective covenants and agreements in this Agreement
and the other Loan Documents, (C) no Default or Event of Default then exists or
existed during the period covered by such Financial Statements, (D) describing
and analyzing in reasonable detail all material trends, changes, and
developments in each and all Financial Statements; and (E) explaining the
variances of the figures in the corresponding budgets and prior Fiscal Year
financial statements. If such certificate discloses that a representation or
warranty is not correct or complete, or that a covenant has not been complied
with, or that a Default or Event of Default existed or exists, such certificate
shall set forth what action the Borrower has taken or proposes to take with
respect thereto.
-49-
56
(e) Forecasts. Not less than forty-five (45) days after the
beginning of each Fiscal Year, annual forecasts (to include forecasted
consolidated balance sheets, statements of income and expenses and statements of
cash flow) for the Borrower and its Subsidiaries as at the end of and for each
quarter of such Fiscal Year.
(f) Copy of SEC Filings. Promptly upon the filing thereof,
copies of all reports, if any, to or other documents filed by the Borrower or
any of its Subsidiaries with the Securities and Exchange Commission under the
Exchange Act.
(g) Management Reports and Letters. As soon as available, but
in any event not later than ten (10) days after the Borrower's receipt thereof,
a copy of all management reports and management letters prepared for the
Borrower by the independent certified public accountants of the Borrower.
(h) Copy of Materials Provided to Stockholders. Promptly after
their preparation, copies of any and all final proxy statements, financial
statements, and reports which the Borrower makes generally available to its
shareholders.
(i) Additional Information. Such additional information as the
Agent and/or any Lender may from time to time reasonably request regarding the
financial and business affairs of the Borrower or any Subsidiary. The Borrower
hereby notifies (and shall provide such confirmations of such notice as the
Agent may reasonably request from time to time) its auditors and accountants
that the Agent, on behalf of the Lenders, is authorized to obtain all and any
financial information directly from them.
Section 7.3 Notices to the Lenders.
The Borrower shall notify the Agent and the Lenders, in writing of the
following matters at the following times:
(a) Default or Event of Default. As soon as reasonably
practicable but in no event later than three (3) Business Days after becoming
aware of any Default or Event of Default.
(b) Notice from Stockholder. Within five (5) Business Days
after becoming aware of the assertion by the holder of any capital stock of the
Borrower or Subsidiary thereof or of any Debt that a default exists with respect
thereto or that the Borrower is not in compliance with the terms thereof, or the
threat or commencement by such holder of any enforcement action because of such
asserted default or non-compliance.
(c) Material Adverse Change. As soon as reasonably practicable
but in no event later than three (3) Business Days after senior management of
the Borrower has concluded that has had or is expected to have a Material
Adverse Effect.
(d) Claim or Counterclaims. As soon as reasonably practicable
but in no event later than three (3) Business Days after becoming aware of any
pending or threatened action, suit, proceeding, or counterclaim by any Person,
or any pending or threatened investigation by a Governmental Authority, or which
is reasonably likely to materially and adversely affect the
-50-
57
Collateral, the repayment of the Obligations, the Agent's or any Lender's rights
under the Loan Documents, or the Borrower's property or condition (financial or
otherwise).
(e) Labor Disputes. Within five (5) Business Days after
becoming aware of any pending or threatened strike or work stoppage affecting
the Borrower or any of its Subsidiaries in a manner which could reasonably be
expected to have a Material Adverse Effect.
(f) Violation of Law. Within five (5) Business Days after
becoming aware of any violation of any law, statute, regulation, or ordinance of
a Governmental Authority affecting the Borrower which could reasonably be
expected to have a Material Adverse Effect.
(g) Environmental Notices. Within five (5) Business Days after
receipt of any notice of any violation by the Borrower or any of its
Subsidiaries of any Environmental Law which could reasonably be expected to have
a Material Adverse Effect or that any Governmental Authority has asserted that
the Borrower or any Subsidiary thereof is not in compliance with any
Environmental Law or is investigating the Borrower's or such Subsidiary's
compliance therewith.
(h) Notice of Lien. Within five (5) Business Days after
receipt of any written notice of the imposition of any Environmental Lien (other
than for a Environmental De Minimis Amount) against any property of the Borrower
or any of its Subsidiaries.
(i) Change of Name, Organization, etc. Any change in the
Borrower's name, state of incorporation, or form of organization, trade names
under which the Borrower will sell Inventory or create Accounts, or to which
instruments in payment of Accounts may be made payable, in each case at least
thirty (30) days prior thereto.
(j) ERISA Event. Within ten (10) Business Days after the
Borrower or any ERISA Affiliate knows that an ERISA Event or a prohibited
transaction (as defined in Sections 406 of ERISA and 4975 of the Code) has
occurred, and, when known, any action taken or threatened by the IRS, the DOL or
the PBGC with respect thereto.
Each notice given under this Section shall describe the subject matter thereof
in reasonable detail, and shall set forth the action that the Borrower, its
Subsidiary, or any ERISA Affiliate, as applicable, has taken or proposes to take
with respect thereto.
ARTICLE VIII
GENERAL WARRANTIES AND REPRESENTATIONS
The Borrower warrants and represents to the Agent and the Lenders that
except as hereafter disclosed to and accepted by the Agent and the Majority
Lenders in writing:
Section 8.1 Authorization, Validity, and Enforceability of this
Agreement and the Loan Documents.
The Borrower has the corporate power and authority to execute, deliver
and perform this Agreement and the other Loan Documents, to incur the
Obligations, and to grant to the Agent Liens upon and security interests in the
Collateral. The Borrower has taken all necessary
-51-
58
corporate action (including without limitation, obtaining approval of its
stockholders if necessary) to authorize its execution, delivery, and performance
of this Agreement and the other Loan Documents to which it is a party. This
Agreement and the other Loan Documents have been duly executed and delivered by
the Borrower, and constitute the legal, valid and binding obligations of the
Borrower, enforceable against it in accordance with their respective terms. The
Borrower's execution, delivery, and performance of this Agreement and the other
Loan Documents do not and will not conflict with, or constitute a violation or
breach of, or constitute a default under, or result in the creation or
imposition of any Lien upon the property of the Borrower or any of its
Subsidiaries by reason of the terms of (a) any contract, mortgage, Lien, lease,
agreement, indenture, or instrument to which the Borrower is a party or which is
binding upon it, (b) any Requirement of Law applicable to the Borrower or any of
its Subsidiaries, or (c) the certificate or articles of incorporation or by-laws
of the Borrower or any of its Subsidiaries.
Section 8.2 Validity and Priority of Security Interest.
The provisions of this Agreement and the other Loan Documents create
legal and valid Liens on all the Collateral in favor of the Agent, for the
ratable benefit of the Agent and the Lenders, and, upon the filing with the
appropriate filing authorities of appropriate financing statements that have
already been provided to the Agent, such Liens constitute perfected and
continuing Liens on all the Collateral, having priority over all other Liens on
the Collateral, securing all the Obligations, and enforceable against the
Borrower and all third parties, other than purchasers of Inventory in the
ordinary course of business.
Section 8.3 Organization and Qualification.
The Borrower (a) is duly incorporated and organized and validly
existing in good standing under the laws of the state of its incorporation, (b)
is qualified to do business as a foreign corporation and is in good standing in
the jurisdictions set forth on Schedule 8.3 as of the Closing Date, which are
the only jurisdictions in which qualification is necessary in order for it to
own or lease its property and conduct its business, except for those
jurisdictions where failure to do so shall not have a Material Adverse Effect,
and (c) has all requisite power and authority to conduct its business and to own
its property.
Section 8.4 Corporate Name; Prior Transactions.
As of the Closing Date, the Borrower has not, during the past five (5)
years, been known by or used any other corporate or fictitious name, or been a
party to any merger or consolidation, or acquired all or substantially all of
the assets of any Person as a going concern, except as permitted under Section
9.9 (Mergers, Consolidations or Sales) or Section 9.10(c) (Distributions;
Capital Change; Restricted Investments).
Section 8.5 Subsidiaries and Affiliates.
Schedule 8.5 is a correct and complete list of the name and
relationship to the Borrower of each and all of the Borrower's Subsidiaries and
other Affiliates as of the Closing Date. Each Subsidiary is (a) duly
incorporated and organized and validly existing in good standing under the laws
of its state of incorporation set forth on Schedule 8.5, and (b) qualified to do
business as a foreign corporation and in good standing in each jurisdiction in
which the failure to so qualify or be in good standing could reasonably be
expected to have a material adverse effect on any such
-52-
59
Subsidiary's business, operations, prospects, property, or condition (financial
or otherwise) and (c) has all requisite power and authority to conduct its
business and own its property.
Section 8.6 Financial Statements and Projections.
(a) Balance Sheet and Statements. The Borrower has delivered
to the Agent and the Lenders the audited balance sheet and related statements of
income, retained earnings, cash flows, and changes in stockholders equity for
the Borrower and its consolidated Subsidiaries as of December 31, 1998, and for
the Fiscal Year then ended, accompanied by the report thereon of the Borrower's
independent certified public accountants. The Borrower has also delivered to the
Agent and the Lenders the unaudited balance sheet and related statements of
income and cash flows for the Borrower and its consolidated Subsidiaries as of
October 5, 1999. Such financial statements are attached hereto as EXHIBIT B. All
such financial statements have been prepared in accordance with GAAP (subject to
year-end adjustments and the absence of required footnotes and presentation of
Subsidiary interests in the case of unaudited financial statements) and present
accurately and fairly the financial position of the Borrower and its
consolidated Subsidiaries as at the dates thereof and their results of
operations for the periods then ended.
(b) Projections. The Latest Projections when submitted to the
Lenders as required herein represent the Borrower's best estimate of the future
financial performance of the Borrower and its consolidated Subsidiaries for the
periods set forth therein. The Latest Projections have been prepared on the
basis of the assumptions set forth therein, which the Borrower believes are fair
and reasonable in light of current and reasonably foreseeable business
conditions at the time submitted to the Lender. The Borrower makes no warranty
that the financial performance set forth therein will in fact be achieved.
Section 8.7 Solvency.
The Borrower is Solvent prior to and after giving effect to the making
of the Revolving Loans to be made on the Closing Date and the issuance of the
Letters of Credit to be issued on the Closing Date.
Section 8.8 Debt.
After giving effect to the making of the Revolving Loans to be made on
the Closing Date, the Borrower and its Subsidiaries have no Debt, except (a) the
Obligations, (b) Debt described on Schedule 8.8, and (c) other Debt reflected in
the financial statements attached hereto as EXHIBIT B.
Section 8.9 Distributions.
Since October 5, 1999, through and including the Closing Date, no
Distribution (other than a Distribution paid to the Borrower from any
Subsidiary) has been declared, paid, or made upon or in respect of any capital
stock or other securities of the Borrower or any of its Subsidiaries.
Section 8.10 Title to Collateral.
The Borrower has good and marketable title to the Collateral free of
all Liens except Permitted Liens.
-53-
60
Section 8.11 Collateral Locations.
Schedule 8.11 sets forth, as of the Closing Date, a correct and
complete list of all locations where any of the Collateral is located.
Section 8.12 Trade Names and Terms of Sale.
All trade names under which the Borrower will sell Inventory or create
Accounts, or to which instruments in payment of Accounts may be made payable,
are listed on Schedule 8.12.
Section 8.13 Litigation.
Except as set forth on Schedule 8.13 as of the Closing Date, there is
no pending or (to the best of the Borrower's knowledge) threatened, action,
suit, proceeding, or counterclaim by any Person, or investigation by any
Governmental Authority, or any basis for any of the foregoing, which could
reasonably be expected to cause a Material Adverse Effect.
Section 8.14 Restrictive Agreements.
Neither the Borrower nor any of its Subsidiaries is a party to any
contract or agreement, or subject to any charter or other corporate restriction,
which purports to restrict its ability to execute, deliver, and perform the Loan
Documents and repay the Obligations.
Section 8.15 Labor Disputes.
Except as set forth on Schedule 8.15, (a) there is no collective
bargaining agreement covering employees of the Borrower or any of its
Subsidiaries, (b) no such collective bargaining agreement or other labor
contract is scheduled to expire during the term of this Agreement, and (c) there
is no pending or (to the best of the Borrower's knowledge) threatened material
strike or work stoppage against or affecting the Borrower or its Subsidiaries or
their employees.
Section 8.16 Environmental Laws.
As of the Closing Date, except as otherwise disclosed on Schedule 8.16:
(a) Compliance. The Borrower and its Subsidiaries are in
substantial compliance with all Environmental Laws applicable to its Premises
and business, and neither the Borrower nor any Subsidiary nor any of its present
Premises or operations is subject to any enforcement order from or liability
agreement with any Governmental Authority or private Person respecting
compliance with any Environmental Law or respecting any potential liabilities
and costs or remedial action (except for an Environmental De Minimis Amount)
arising from the Release or threatened Release of a Contaminant.
(b) Permits. The Borrower and its Subsidiaries have obtained
all permits necessary for their current operations under Environmental Laws, and
all such permits are in good standing and the Borrower and its Subsidiaries are
in compliance with all terms and conditions of such permits, except where the
failure to obtain the same would not reasonably be expected to have a Material
Adverse Effect.
(c) No Violation. Neither the Borrower nor any of its
Subsidiaries has in violation of applicable law stored, treated or disposed of
any hazardous waste on any Premises,
-54-
61
as defined pursuant to 40 CFR Part 261 or any equivalent Environmental Law, such
that in the aggregate, such activities may have (i) a reasonable likelihood in
resulting in excess of the Environmental De Minimis Amount, or (ii) a Material
Adverse Effect on the Borrower or any of its Subsidiaries.
(d) No Actions. Neither the Borrower nor any of its
Subsidiaries has received any summons, complaint, order or similar written
notice that it is not currently in compliance with, or that any Governmental
Authority is investigating its compliance with, any Environmental Laws or that
it is or may be liable to any other Person as a result of a Release or
threatened Release of a Contaminant, except where such activities in the
aggregate do not have (i) a reasonable likelihood in resulting in excess of the
Environmental De Minimis Amount, or (ii) a Material Adverse Effect on the
Borrower or any of its Subsidiaries.
(e) Operations. None of the present or past operations of the
Borrower and its Subsidiaries is the subject of any investigation by any
Governmental Authority evaluating whether any remedial action is needed to
respond to a Release or threatened Release of a Contaminant, except where such
the same in the aggregate do not have (i) a reasonable likelihood in resulting
in excess of the Environmental De Minimis Amount, or (ii) a Material Adverse
Effect on the Borrower or any of its Subsidiaries.
(f) No Notices to Governmental Authorities. Neither the
Borrower nor any of its Subsidiaries has filed any notice under any requirement
of Environmental Law reporting a spill or accidental and unpermitted release or
discharge of a Contaminant into the environment, except where the same such
spill, release and discharge in the aggregate do not have (i) a reasonable
likelihood in resulting in excess of the Environmental De Minimis Amount, or
(ii) a Material Adverse Effect on the Borrower or any of its Subsidiaries.
(g) No Other Agreements. Neither the Borrower nor any of its
Subsidiaries has entered into any negotiations or settlement agreements with any
Person (including, without limitation, the prior owner of its property) imposing
material obligations or liabilities on the Borrower or any of its Subsidiaries
with respect to any remedial action in response to the Release of a Contaminant
or environmentally related claim, except where the same in the aggregate do not
have (i) a reasonable likelihood in resulting in excess of the Environmental De
Minimis Amount, or (ii) a Material Adverse Effect on the Borrower or any of its
Subsidiaries..
(h) No Asbestos. None of the products manufactured,
distributed or sold by the Borrower or any of its Subsidiaries contain asbestos
containing material.
(i) No Environmental Lien. No Environmental Lien has attached
to any Premises of the Borrower or any of its Subsidiaries.
Section 8.17 No Violation of Law.
Neither the Borrower nor any of its Subsidiaries is in violation of any
law, statute, regulation, ordinance, judgment, order, or decree applicable to it
which violation could reasonably be expected to have a Material Adverse Effect.
-55-
62
Section 8.18 No Default.
Neither the Borrower nor any of its Subsidiaries is in default with
respect to any note, indenture, loan agreement, mortgage, lease, deed, or other
agreement to which the Borrower or such Subsidiary is a party or by which it is
bound, which default could reasonably be expected to have a Material Adverse
Effect.
Section 8.19 ERISA Compliance.
Except as specifically disclosed in Schedule 8.19:
(a) Compliance. Each Pension Plan is in compliance in all
material respects with the applicable provisions of ERISA, the Code and other
applicable law. Each Pension Plan which is intended to qualify under Section
401(a) of the Code has received a favorable determination letter from the IRS
and to the best knowledge of the Borrower, nothing has occurred which would
cause the loss of such qualification. The Borrower and each ERISA Affiliate has
made all required contributions to any Pension Plan subject to Section 412 of
the Code, and no application for a funding waiver or an extension of any
amortization period pursuant to Section 412 of the Code has been made with
respect to any Pension Plan.
(b) No Pending Claims. There are no pending or, to the best
knowledge of Borrower, threatened claims, actions or lawsuits, or action by any
Governmental Authority, with respect to any Plan which has resulted or could
reasonably be expected to result in a Material Adverse Effect. There has been no
prohibited transaction or violation of the fiduciary responsibility rules with
respect to any Plan which has resulted or could reasonably be expected to result
in a Material Adverse Effect.
(c) No ERISA Event or Liabilities. Except where no Material
Adverse Effect is likely to result (i) no ERISA Event has occurred or is
reasonably expected to occur; (ii) no Pension Plan has any Unfunded Pension
Liability; (iii) neither the Borrower nor any ERISA Affiliate has incurred, or
reasonably expects to incur, any liability (and no event has occurred which,
with the giving of notice under Section 4219 of ERISA, would result in such
liability) under Section 4201 or 4243 of ERISA with respect to a Multi-employer
Plan; and (iv) neither the Borrower nor any ERISA Affiliate has engaged in a
transaction that could be subject to Section 4069 or 4212(c) of ERISA.
Section 8.20 Taxes.
The Borrower and its Subsidiaries have filed all federal and other tax
returns and reports required to be filed, and have paid all federal and other
taxes, assessments, fees and other governmental charges levied or imposed upon
them or their properties, income or assets otherwise due and payable.
Section 8.21 Regulated Entities.
None of the Borrower, any Person controlling the Borrower, or any
Subsidiary, is an "Investment Company" within the meaning of the Investment
Company Act of 1940. The Borrower is not subject to regulation under the Public
Utility Holding Company Act of 1935, the Federal Power Act, the Interstate
Commerce Act, any state public utilities code or law, or any other federal or
state statute or regulation limiting its ability to incur indebtedness.
-56-
63
Section 8.22 Use of Proceeds; Margin Regulations.
The proceeds of the Loans are to be used solely for working capital
purposes. Neither the Borrower nor any Subsidiary is engaged in the business of
purchasing or selling Margin Stock or extending credit for the purpose of
purchasing or carrying Margin Stock.
Section 8.23 Copyrights, Patents, Trademarks and Licenses, etc.
The Borrower owns or is licensed or otherwise has the right to use all
of the patents, trademarks, service marks, trade names, copyrights, contractual
franchises, authorizations and other rights that are reasonably necessary for
the operation of its businesses, without conflict with the rights of any other
Person. To the best knowledge of the Borrower, no slogan or other advertising
device, product, process, method, substance, part or other material now
employed, or now contemplated to be employed, by the Borrower or any Subsidiary
infringes upon any rights held by any other Person. Except as disclosed on
Schedule 8.13, no claim or litigation regarding any of the foregoing is pending
or threatened, and no patent, invention, device, application, principle or any
statute, law, rule, regulation, standard or code is pending or, to the knowledge
of the Borrower, proposed, which, in either case, could reasonably be expected
to have a Material Adverse Effect.
Section 8.24 No Material Adverse Change.
As of the Closing Date, no event that has had a Material Adverse Effect
has occurred since the date of the Financial Statements delivered to the Lender.
Section 8.25 Year 2000 Review.
On the basis of a comprehensive review and assessment undertaken by
Borrower of Borrower's computer applications and inquiry made of Borrower's
material suppliers, vendors and customers Borrower reasonably believes that the
"Year 2000 problem" (that is, the risk that computer applications used by any
person may be unable to recognize and perform properly date-sensitive functions
involving certain dates prior to and any date after December 31, 1999) will not
result in a material adverse change in the operations, business, properties, or
condition (financial or otherwise) of the Borrower.
Section 8.26 Full Disclosure.
None of the representations or warranties made by the Borrower or any
Subsidiary in the Loan Documents as of the date such representations and
warranties are made or deemed made, and none of the statements contained in any
exhibit, report, statement or certificate furnished by or on behalf of the
Borrower or any Subsidiary in connection with the Loan Documents (including the
offering and disclosure materials delivered by or on behalf of the Borrower to
the Lenders prior to the Closing Date), contains any untrue statement of a
material fact or omits any material fact required to be stated therein or
necessary to make the statements made therein, in light of the circumstances
under which they are made, not misleading as of the time when made or delivered.
Section 8.27 Bank Accounts.
Schedule 8.27 contains a complete and accurate list of all bank
accounts maintained by the Borrower with any bank or other financial
institution.
-57-
64
Section 8.28 Governmental Authorization.
No approval, consent, exemption, authorization, or other action by, or
notice to, or filing with, any Governmental Authority or other Person is
necessary or required in connection with the execution, delivery or performance
by, or enforcement against, the Borrower or any of its Subsidiaries of this
Agreement or any other Loan Document.
Section 8.29 WRI Documents.
The Borrower has provided to the Agent true and complete copies of the
WRI Documents.
Section 8.30 Indenture.
The Borrower has provided to the Agent a true and complete copy of the
Indenture and the disclosures more particularly described on EXHIBIT H relating
to the Indenture are true and correct as of the Closing Date.
ARTICLE IX
AFFIRMATIVE AND NEGATIVE COVENANTS
The Borrower covenants to the Agent and each Lender that, so long as
any of the Obligations remain outstanding or this Agreement is in effect:
Section 9.1 Taxes and Other Obligations.
The Borrower shall, and shall cause each of its Subsidiaries to, (a)
file when due all tax returns and other reports which it is required to file;
(b) pay, or provide for the payment, when due, of all taxes, fees, assessments
and other governmental charges against it or upon its property, income and
franchises, make all required withholding and other tax deposits, and establish
adequate reserves for the payment of all such items, and provide to the Agent
and the Lenders, upon request, satisfactory evidence of its timely compliance
with the foregoing; and (c) pay when due all Debt owed by it and all claims of
materialmen, mechanics, carriers, warehousemen, landlords, processors and other
like Persons, and all other indebtedness owed by it and perform and discharge in
a timely manner all other obligations undertaken by it; provided, however, so
long as the Borrower has notified the Agent in writing, neither the Borrower nor
any of its Subsidiaries need pay any tax, fee, assessment, governmental charge
or claim, that (i) it is contesting in good faith by appropriate proceedings
diligently pursued, (ii) the Borrower or its Subsidiary, as the case may be, has
established proper reserves for as provided in GAAP, and (iii) no Lien (other
than a Permitted Lien) results from such non-payment.
Section 9.2 Corporate Existence and Good Standing.
The Borrower shall, and shall cause each of its Subsidiaries to,
maintain its corporate existence and its qualification and good standing in all
jurisdictions in which the failure to maintain such existence and qualification
or good standing could reasonably be expected to have a material adverse effect
on the Borrower's or such Subsidiary's property, business, operations,
prospects, or condition (financial or otherwise).
-58-
65
Section 9.3 Compliance with Law and Agreements; Maintenance of
Licenses.
The Borrower shall comply, and shall cause each Subsidiary to comply,
in all material respects with all Requirements of Law of any Governmental
Authority having jurisdiction over it or its business (including the Federal
Fair Labor Standards Act). The Borrower shall, and shall cause each of its
Subsidiaries to, obtain and maintain all licenses, permits, franchises, and
governmental authorizations necessary to own its property and to conduct its
business as conducted on the Closing Date. The Borrower shall not modify, amend
or alter its certificate or article of incorporation (a) without giving the
Agent at least ten (10) days prior written notice describing in detail the
change to be made or (b) in a manner that could reasonably be expected to have a
Material Adverse Effect or to result in an Event of Default.
Section 9.4 Maintenance of Property.
The Borrower shall, and shall cause each of its Subsidiaries to,
maintain all of its property necessary and useful in the conduct of its
business, in good operating condition and repair, ordinary wear and tear
excepted.
Section 9.5 Insurance.
(a) Generally. The Borrower shall maintain, and shall cause
each of its Subsidiaries to maintain, with financially sound and reputable
insurers having a rating of at least A-VII or better by Best's Rating Guide,
insurance against loss or damage by fire with extended coverage; theft,
burglary, pilferage and loss in transit; public liability and third party
property damage; larceny, embezzlement or other criminal liability; business
interruption; public liability and third party property damage; and such other
hazards or of such other types as is customary for Persons engaged in the same
or similar business, and, in the case of insurance covering Inventory, as the
Agent, in its discretion, or acting at the direction of the Majority Lenders,
shall specify, in amounts, and under policies acceptable to the Agent and the
Majority Lenders. Without limiting the foregoing, the Borrower shall also
maintain, and shall cause each of its Subsidiaries to maintain, flood insurance,
in the event of a designation of the area in which any of Inventory is located
as "flood prone" or a "flood risk area," (hereinafter "SFHA") as defined by the
Flood Disaster Protection Act of 1973, in an amount to be reasonably determined
by the Agent, and shall comply with the additional requirements of the National
Flood Insurance Program as set forth in said Act. The Borrower shall also
maintain flood insurance for its Inventory which is, at any time, located in a
SFHA.
(b) Agent Named. The Borrower shall cause the Agent, for the
ratable benefit of the Agent and the Lenders, to be named in each such policy
covering the Collateral as secured party and loss payee or additional insured,
in a manner acceptable to the Agent. Each such policy of insurance shall contain
a clause or endorsement requiring the insurer to give not less than thirty (30)
days' prior written notice to the Agent in the event of cancellation of the
policy for any reason whatsoever and a clause or endorsement stating that the
interest of the Agent shall not be impaired or invalidated by any act or neglect
of the Borrower or any of its Subsidiaries or the owner of any premises for
purposes more hazardous than are permitted by such policy. All premiums for such
insurance shall be paid by the Borrower when due, and certificates of insurance
and, if requested by the Agent or any Lender, photocopies of the policies, shall
be delivered to the Agent, in each case in sufficient quantity for distribution
by the Agent to each of the Lenders. If the Borrower fails to procure such
insurance or to pay the premiums therefor
-59-
66
when due, the Agent may, and at the direction of the Majority Lenders shall, do
so from the proceeds of Revolving Loans.
(c) Notice of Casualty. The Borrower shall promptly notify the
Agent and the Lenders of any loss, damage, or destruction to the Collateral
arising from its use, whether or not covered by insurance. If an Event of
Default has occurred and is continuing or if Availability is less than
$25,000,000, the Agent is hereby authorized to collect all insurance proceeds
with respect to the Collateral and after deducting from such proceeds the
reasonable expenses, if any, incurred by the Agent in the collection or handling
thereof, the Agent shall apply such proceeds, ratably, to the reduction of the
Obligations in the order provided for in Section 4.5 (Apportionment, Application
and Reversal of Payments).
Section 9.6 Condemnation.
(a) Notice of Proceeding. The Borrower shall, promptly upon
learning of the institution of any proceeding for the condemnation or other
taking of any of its property, notify the Agent of the pendency of such
proceeding, and agrees that the Agent may participate in any such proceeding
that affects the Collateral, and the Borrower from time to time will deliver to
the Agent all instruments reasonably requested by the Agent to permit such
participation.
(b) Agent Authorization. The Agent is hereby authorized to
collect the proceeds of any condemnation claim or award relating to the
Collateral directly, and, after deducting from such proceeds the reasonable
expenses, if any, incurred by the Agent in the collection or handling thereof,
the Agent shall apply such proceeds, ratably, to the reduction of the
Obligations in the order provided for in Section 4.5 (Apportionment, Application
and Reversal of Payments).
Section 9.7 Environmental Laws.
The Borrower shall, and shall cause each of its Subsidiaries to,
conduct its business in material compliance with all Environmental Laws
applicable to it, including, without limitation, those relating to the
generation, handling, use, storage, and disposal of any Contaminant, except
where the failure to do so would reasonably be expected to have only a
Environmental De Minimis Amount. The Borrower shall, and shall cause each of its
Subsidiaries to, take prompt and appropriate action to respond to any
non-compliance with Environmental Laws.
Section 9.8 Compliance with ERISA.
The Borrower shall, and shall cause each of its ERISA Affiliates to:
(a) maintain each Plan in compliance in all material respects with the
applicable provisions of ERISA, the Code and other applicable Laws; (b) cause
each Plan which is qualified under Section 401(a) of the Code to maintain such
qualification if such disqualification would cause a Material Adverse Effect;
(c) make all required contributions to any Plan subject to Section 412 of the
Code; (d) not engage in a prohibited transaction or violation of the fiduciary
responsibility rules with respect to any Plan; and (e) not engage in a
transaction that could be subject to Section 4069 or 4212(c) of ERISA.
-60-
67
Section 9.9 Mergers, Consolidations or Sales.
Neither the Borrower nor any Subsidiary shall enter into any
transaction to (a) effect a merger, reorganization, or consolidation, or the
sale, assignment, lease, or other disposition of substantially all of its
assets, (b) sell, assign, lease, or otherwise dispose any part of its property,
except for an "Asset Disposition" (as that term is defined in the Indenture)
that is not prohibited by clause (a) above or by the terms of Section 3.12 of
the Indenture in effect on the original date of its execution and delivery or a
merger of any Subsidiary into the Borrower or a merger of any Subsidiary into
another Subsidiary if that merger is not prohibited by Section 3.12 of the
Indenture in effect on the original date of its execution and delivery, but only
if no Default or Event of Default exists and only if Availability is not less
than $25,000,000 immediately before and after such Asset Disposition, or (c)
wind up, liquidate or dissolve, or agree to do any of the foregoing, except for
(i) sales of Inventory in the ordinary course of its business, (ii) sales of WRI
Assets in the ordinary course of business pursuant to the WRI Receivables Sale
Agreements, (iii) sales or other dispositions of equipment in the ordinary
course of business that are obsolete or no longer useable by Borrower in its
business.
Section 9.10 Distributions; Restricted Investments.
Neither the Borrower nor any of its Subsidiaries shall directly or
indirectly declare or make, or incur any liability to make, any Distribution or
Restricted Investment, except (i) Distributions to the Borrower by its
Subsidiaries and, in the case of any Subsidiaries that are not wholly-owned,
concurrent Distributions to their other equity holders, and (ii) payments made
by the Borrower in satisfaction of any put obligation imposed on the Borrower by
Section 409 of the Internal Revenue Code of 1986, as amended, and any successor
provision, relating to the Borrower's Series A preferred stock, authorized and
issued prior to October 5, 1999 and held by the Borrower's 1989 employee stock
ownership plan; provided, however, the Borrower and its Subsidiaries may take
the actions otherwise prohibited by this Section 9.10 to the extent permitted by
the Indenture in effect at its initial execution but only if no Default or Event
of Default exists and only if Availability is not less than $25,000,000
immediately before and after giving effect to all consideration to be paid by
the Borrower at any time with respect to the actions.
Section 9.11 Debt.
Neither the Borrower nor any of its Subsidiaries shall incur any Debt,
other than: (a) the Obligations; (b) obligations and liabilities under the WRI
Documents in effect on August 6, 1999; (c) other Debt existing on the Closing
Date and reflected in the Financial Statements attached hereto as EXHIBIT B; and
(d) extensions and renewals of the foregoing that do not increase the
outstanding principal amount thereof; provided, however, the Borrower and its
Subsidiaries may incur Debt otherwise prohibited by this Section 9.11 (Debt) to
the extent permitted by the Indenture in effect at its initial execution but
only if (i) at the time such Debt is incurred no Default or Event of Default
exists, (ii) Availability is not less than $25,000,000 immediately before and
after the Debt is incurred, and (iii) the Debt is at no time secured by
inventory, accounts receivable, related intangibles, equity interests in WRI,
amounts receivable from WRI (whether pursuant the WRI L/C Note, WRI Short-Term
Note, other promissory notes, dividends or otherwise) or the proceeds of any of
the foregoing, whether or not such Debt constitutes "Permitted Working Capital
Indebtedness" (as that term is defined in the Indenture).
-61-
68
Section 9.12 Minimum Availability.
Upon making the Revolving Loans on the Closing Date (including such
Revolving Loans made to finance the Commitment Fee or otherwise pursuant to
Section 4.4 (Payments as Revolving Loans) as reimbursement for fees, costs and
expenses then payable under this Agreement), and with all its obligations
current, the Borrower shall have Availability in an amount no less than
$80,000,000. At all times after the Closing Date, with all its obligations
current, the Borrower shall have Availability in an amount no less than
$25,000,000; provided, however, if there is no continuing Event of Default and
if the Borrower's Fixed Charge Coverage Ratio, as shown in the required
computation accompanying the Borrower's most recent monthly financial statements
required by Section 7.2(b), was greater than 1.0 to 1.0, there shall be no
minimum Availability required under this Section for the calendar month
following the month in which the Agent receives such monthly financial
statements. At any time when an Event of Default exists and at any time that
Availability is less than $25,000,000 (whether or not a Default or Event of
Default exists), the Agent may, and at the direction of the Majority Lenders
shall, direct the Borrower to, and upon such direction the Borrower shall no
later than the next Business Day following the Borrower's receipt of notice of
such requirement, terminate the WRI Receivables Sale Agreements and sales
thereunder at the earliest date permitted under the WRI Receivables Sale
Agreements (but in no event more thirty days (30) after the first Business Day
following the Borrower's receipt of the Agent's direction). Nothing in this
Section 9.12 is intended or shall be interpreted to limit any of the other
rights and remedies under this Agreement, the other Loan Documents or applicable
Laws.
Section 9.13 Amendment.
The Borrower shall not in any material respect amend, modify,
terminate, restate, substitute, extend or renew the WRI Documents or the
Indenture or any of its constituent documents without the prior written consent
of the Agent and the Majority Lenders which consent, absent a Default and an
Event of Default and if Availability is $25,000,000 or more, shall not be
unreasonably withheld. Notwithstanding the foregoing, the Borrower shall be
allowed, however, following not less than ten (10) days prior written notice to
the Agent, to amend the WRI Documents (i) to extend or renew or otherwise
increase amounts available under the facility and to agree to any price changes
or other changes reasonably requested by the Banks (as that term is defined in
the WRI Participation Agreements) in connection therewith; and (ii) to make
other changes which the Borrower reasonably and in good faith believes would not
adversely affect the interests of the Agent and the Lenders; provided, that no
such amendments, waivers, or modifications would, without the consent of the
Agent:
(i) voluntarily accelerate the Facility Termination Date (as
that term is defined in the WRI Participation Agreements) set forth
therein;
(ii) decrease the maximum facility amount to be provided under
the Participation Agreements;
(iii) provide additional recourse or indemnities from the
Borrower for sales of Receivables or cause any property other than WRI
Assets to be sold or conveyed to WRI;
-62-
69
(iv) lower the advance rate, except to lower the advance rate
thereunder for a change in formulas necessitated by changes in rating
agency criteria and reasonably deemed necessary by the Borrower in
order to maintain the AAA rating applicable to the WRI rated facility;
or
(v) alter the purchase price payable under the WRI Receivables
Sale Agreements to eliminate or adversely modify in any respect the
requirement that consideration from WRI be payable in cash whenever
possible.
Section 9.14 Prepayment.
Neither the Borrower nor any of its Subsidiaries shall, at any time
that the Aggregate Revolver Outstandings exceed zero ($0) voluntarily prepay any
Debt, except the Obligations in accordance with the terms of this Agreement.
Section 9.15 Transactions with Affiliates.
Except as set forth below and except as contemplated by the WRI
Documents, neither the Borrower nor any of its Subsidiaries shall, sell,
transfer, distribute, or pay any money or property, including, but not limited
to, any fees or expenses of any nature (including, but not limited to, any fees
or expenses for management services), to any Affiliate, or lend or advance money
or property to any Affiliate, or invest in (by capital contribution or
otherwise) or purchase or repurchase any stock or indebtedness, or any property,
of any Affiliate, or become liable on any Guaranty of the indebtedness,
dividends, or other obligations of any Affiliate. Notwithstanding the foregoing,
the Borrower and its Subsidiaries may engage in transactions with Affiliates in
the ordinary course of business consistent with past practices, in amounts and
upon terms fully disclosed to the Agent and the Lenders, and no less favorable
to the Borrower and its Subsidiaries than would be obtained in a comparable
arm's-length transaction with a third party who is not an Affiliate; provided
that any transaction with an Affiliate that is approved by a majority of the
Borrowers' directors and is permitted by Section 3.11 of the Indenture shall
conclusively be deemed to be on fair and reasonable terms.
Section 9.16 Business Conducted.
The Borrower shall not and shall not permit any of its Subsidiaries to,
engage directly or indirectly, in any line of business other than steel making
and related business.
Section 9.17 Liens.
Neither the Borrower nor any of its Subsidiaries shall create, incur,
assume, or permit to exist any Lien on any property now owned or hereafter
acquired by any of them, except Permitted Liens; provided, however, the Borrower
and its Subsidiaries may create, incur and assume or permit to exist Liens
otherwise prohibited by this Section 9.17 to the extent such Liens are permitted
by the Indenture in effect at its original execution but only if (i) at the time
such Lien is created no Default or Event of Default exists, (ii) Availability is
not less than $25,000,000 immediately before and after the Lien is created, and
(iii) the Lien at no time covers inventory, accounts receivable, related
intangibles, equity interests in WRI, amounts receivable from WRI (whether
pursuant the WRI L/C Note, WRI Short-Term Note, other promissory notes,
dividends or otherwise) or the proceeds of any of the foregoing, whether or not
the indebtedness
-63-
70
secured by such Lien constitutes "Permitted Working Capital Indebtedness" (as
that term is defined in the Indenture).
Section 9.18 Sale and Leaseback Transactions.
Except for an "Asset Disposition" described and permitted under Section
9.9 (Mergers, Consolidations or Sales), neither the Borrower nor any of its
Subsidiaries shall, directly or indirectly, enter into any arrangement with any
Person providing for the Borrower or such Subsidiary to lease or rent property
that the Borrower or such Subsidiary has sold or will sell or otherwise transfer
to such Person; provided, however, notwithstanding any provision of this
Agreement, the limitations on Debt, transfers and Liens in this commitment shall
not apply to sale and leaseback transactions regarding the facility known as the
"Number 9 Tandem Mill" or the facility known as the "▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Steam
Generating Facility" to the extent such transactions are currently permitted,
without further consent, by the Indenture, and provided further, that the
Borrower and its Subsidiaries may enter into a sale-leaseback transaction
otherwise prohibited by this Section 9.18 to the extent each such transaction is
permitted by Section 3.14 of the Indenture in effect at its original execution
but only if (i) at the time each such transaction is entered into no Default or
Event of Default exists, and (ii) Availability is not less than $25,000,000
immediately before and after such transaction is entered into
Section 9.19 Fiscal Year.
The Borrower shall not change its Fiscal Year.
Section 9.20 Use of Proceeds.
The Borrower shall not, and shall not suffer or permit any Subsidiary
to, use any portion of the Loan proceeds, directly or indirectly, for the
following purposes: (a) to purchase or carry Margin Stock, (b) to repay or
otherwise refinance indebtedness of the Borrower or others incurred to purchase
or carry Margin Stock, (c) to extend credit for the purpose of purchasing or
carrying any Margin Stock, or (iv) to acquire any security in any transaction
that is subject to Section 13 or 14 of the Exchange Act.
Section 9.21 Further Assurances.
The Borrower shall execute and deliver, or cause to be executed and
delivered, to the Agent and/or the Lenders such documents and agreements, and
shall take or cause to be taken such actions, as the Agent or any Lender may,
from time to time, request to carry out the terms and conditions of this
Agreement and the other Loan Documents.
ARTICLE X
CONDITIONS OF LENDING
Section 10.1 Conditions Precedent to Making of Loans on the Closing
Date.
The obligation of the Lenders to make the initial Revolving Loans on
the Closing Date, and the obligation of the Agent to issue any Letter of Credit
on the Closing Date and the obligation of the Lenders to participate in Letters
of Credit issued on the Closing Date, are subject to the following conditions
precedent having been satisfied in a manner satisfactory to the Agent and each
Lender:
-64-
71
(a) Execution. This Agreement and the other Loan Documents
(including, without limitation, those described on EXHIBIT C) have been executed
by each party thereto and the Borrower shall have performed and complied with
all covenants, agreements and conditions contained herein and the other Loan
Documents which are required to be performed or complied with by the Borrower
before or on such Closing Date.
(b) Representations and Warranties. All representations and
warranties made hereunder and in the other Loan Documents shall be true and
correct as of the Closing Date as if made on such date.
(c) No Default. No Default or Event of Default shall exist on
the Closing Date, or would exist after giving effect to the Loans to be made on
such date.
(d) Opinions. The Agent and the Lenders shall have received
such opinions of counsel for the Borrower and its Subsidiaries as the Agent or
any Lender shall request, each such opinion to be in a form, scope, and
substance satisfactory to the Agent, the Lenders, and their respective counsel.
(e) Financing Statements and Termination Statements. The Agent
shall have received:
(i) acknowledgment copies of proper financing
statements, duly filed on or before the Closing Date under the
UCC of all jurisdictions that the Agent may deem necessary or
desirable in order to perfect the Agent's Lien; and
(ii) duly executed UCC-3 Termination Statements and
such other instruments, in form and substance satisfactory to
the Agent, as shall be necessary to terminate and satisfy all
Liens on the Property of the Borrower and its Subsidiaries
except Permitted Liens.
(f) Payment of All Fees and Expenses. The Borrower shall have
paid all fees and expenses of the Agent and the Attorney Costs incurred in
connection with any of the Loan Documents and the transactions contemplated
thereby to the extent invoiced.
(g) Insurance. The Agent shall have received evidence, in
form, scope, and substance, reasonably satisfactory to the Agent, of all
insurance coverage as required by this Agreement.
(h) Due Diligence. The Agent and the Lenders shall have had an
opportunity, if they so choose, to examine the books of account and other
records and files of the Borrower and to make copies thereof, and to conduct a
pre-closing audit which shall include, without limitation, verification of
Inventory, Accounts, and Availability, and the results of such examination and
audit shall have been satisfactory to the Agent and the Lenders in all respects.
(i) Due Authorization. All proceedings taken in connection
with the execution of this Agreement, all other Loan Documents and all documents
and papers relating thereto shall be satisfactory in form, scope, and substance
to the Agent and the Lenders.
-65-
72
(j) WRI Participation Documents. The WRI Documents shall not
have been amended since August 5, 1999.
(k) WRI Intercreditor Agreement. The WRI Intercreditor
Agreement, in form and substance satisfactory to the Agent, shall have been
executed and delivered.
The acceptance by the Borrower of any Loans made on the Closing Date shall be
deemed to be a representation and warranty made by the Borrower to the effect
that all of the conditions precedent to the making of such Loans have been
satisfied, with the same effect as delivery to the Agent and the Lenders of a
certificate signed by a Responsible Officer of the Borrower, dated the Closing
Date, to such effect.
Execution and delivery to the Agent by a Lender of a counterpart of this
Agreement shall be deemed confirmation by such Lender that (i) all conditions
precedent in this Section 10.1 have been fulfilled to the satisfaction of such
Lender and (ii) the decision of such Lender to execute and deliver to the Agent
an executed counterpart of this Agreement was made by such Lender independently
and without reliance on the Agent or any other Lender as to the satisfaction of
any condition precedent set forth in this Section 10.1.
Section 10.2 Conditions Precedent to Each Loan.
The obligation of the Lenders to make each Loan, including the initial
Revolving Loans on the Closing Date, and the obligation of the Agent to take
reasonable steps to issue any Letter of Credit and the obligation of the Lenders
to participate in Letters of Credit, shall be subject to the further conditions
precedent that on and as of the date of any such extension of credit:
(a) Representations and Warranties. The following statements
shall be true, and the acceptance by the Borrower of any extension of credit
shall be deemed to be a statement to the effect set forth in clauses (i) and
(ii), with the same effect as the delivery to the Agent and the Lenders of a
certificate signed by a Responsible Officer, dated the date of such extension of
credit, stating that:
(i) The representations and warranties contained in
this Agreement and the other Loan Documents are correct in all material
respects on and as of the date of such extension of credit as though
made on and as of such date, other than any such representation or
warranty which relates to a specified prior date and except to the
extent the Agent and the Lenders have been notified by the Borrower
that any representation or warranty is not correct and the Majority
Lenders have explicitly waived in writing compliance with such
representation or warranty; and
(ii) No event has occurred and is continuing, or
would result from such extension of credit, which constitutes a Default
or an Event of Default; and
(b) Availability. Without implying any limitation on the
provisions of Section 9.12 (Minimum Availability), the amount of the
Availability shall be sufficient to make such Revolving Loan without exceeding
the Availability, provided, however, that the foregoing conditions precedent are
not conditions to each Lender participating in or reimbursing Bank of America
for such Lenders' Pro Rata Share of any Non-Ratable Loan Advance as provided in
-66-
73
Section 2.2(h) (Making of Non-Ratable Loans) or the Agent for such Lenders' Pro
Rata Share of any Agent Advance as provided in Section 2.2(i) (Agent Advances).
ARTICLE XI
DEFAULT; REMEDIES
Section 11.1 Events of Default.
It shall constitute an event of default ("Event of Default") if any one
or more of the following shall occur for any reason:
(a) any failure to pay the principal of or interest or premium
on any of the Obligations or any other fee or amount owing hereunder when due,
whether upon demand or otherwise;
(b) any representation or warranty made or deemed made by the
Borrower in this Agreement or by the Borrower or any of its Subsidiaries in any
of the other Loan Documents, any Financial Statement, or any certificate
furnished by the Borrower or any of its Subsidiaries at any time to the Agent or
any Lender shall prove to be untrue in any material respect as of the date on
which made, deemed made, or furnished;
(c) the failure of the Borrower to perform, observe or comply
with any covenant, condition or agreement contained in Article 7 or Article 9 of
this Agreement, and:
(i) only with respect to a failure under subsections
(a) through and including (e) and subsection (g) only of Section 7.2
(Financial Information), such failure continues uncured for a period of
five (5) days and, in the case a failure under subsection (b) such
failure occurs more than twice in any twelve (12) month period and in
the case of a failure under subsection (c) such failure occurs more
than once in any twelve (12) month period, or
(ii) only with respect to a failure under:
(A) Section 7.1 (Books and Records),
(B) Section 9.1 (Taxes and Other
Obligations) with respect to clauses (a), (b) and (c)
only to the extent such failure when aggregated with
all such failures under Section 9.1 does not exceed
$5,000,000 in the aggregate,
(C) Section 9.2 (Corporate Existence and
Good Standing),
(D) Section 9.3 (Compliance with Law and
Agreements; Maintenance of Licenses),
(E) Section 9.4 (Maintenance of Property),
(F) Section 9.7 (Environmental Laws), or
(G) Section 9.8 (Compliance with ERISA)
-67-
74
if the Borrower, after discovering such failure, fails to diligently
and continuously pursue the cure of each such failure or if any such
failure continues uncured thirty (30) days after discovery;
(d) the failure of the Borrower to perform, observe or comply
with any covenant, condition or agreement contained in Section 2.2, Section
2.3(e)(i), Section 2.3(h), Section 2.3(i)(v), Section 2.3(j), Article 3, Article
4, Section 5.1, Section 5.2, Article 6 (other than subsections (b) through (d)
of Section 6.7), Section 8.22, or Section 11.2 of this Agreement;
(e) the failure of the Borrower to perform, observe or comply
with any covenant, condition or agreement of this Agreement (other than any
covenant, condition or agreement covered by clauses (a), (b), (c) or (d) of this
Section 11.1), if the Borrower, after discovering such failure, fails to
diligently and continuously pursue the cure of each such failure or if any such
failure continues uncured ten (10) days after discovery;
(f) any default shall occur in the observance or performance
of any of the covenants and agreements contained in this Agreement under any of
the Loan Documents other than the Loan Agreement, or any other agreement entered
into at any time to which the Borrower or any Subsidiary and the Agent or any
Lender are party, or if any such agreement or document shall terminate (other
than in accordance with its terms or the terms hereof or with the written
consent of the Agent and the Majority Lenders) or become void or unenforceable,
without the written consent of the Agent and the Majority Lenders;
(g) default shall occur with respect to any Debt For Borrowed
Money (other than the Obligations) of the Borrower in an outstanding principal
amount which exceeds $25,000,000, or under any agreement or instrument under or
pursuant to which any such Debt For Borrowed Money of the Borrower may have been
issued, created, assumed, or guaranteed by the Borrower or any of its
Subsidiaries, and such default shall continue for more than the period of grace,
if any, therein specified, if the effect thereof (with or without the giving of
notice or further lapse of time or both) is to accelerate, or to permit the
holders of any such Debt For Borrowed Money of the Borrower to accelerate, the
maturity of any such Debt For Borrowed Money of the Borrower; or any such Debt
For Borrowed Money of the Borrower shall be declared due and payable or be
required to be prepaid (other than by a regularly scheduled required prepayment)
prior to the stated maturity thereof;
(h) a WRI Default shall occur;
(i) any Lien shall exist on the WRI Stock;
(j) the Borrower, WRI or any of the Borrower's Subsidiaries
shall (i) file a voluntary petition in bankruptcy or file a voluntary petition
or an answer or otherwise commence any action or proceeding seeking
reorganization, arrangement or readjustment of its debts or for any other relief
under the federal Bankruptcy Code, as amended, or under any other bankruptcy or
insolvency act or law, state or federal, now or hereafter existing, or consent
to, approve of, or acquiesce in, any such petition, action or proceeding; (ii)
apply for or acquiesce in the appointment of a receiver, assignee, liquidator,
sequestrator, custodian, monitor, trustee or similar
-68-
75
officer for it or for all or any part of its property; (iii) make an assignment
for the benefit of creditors; or (iv) admit in writing its inability generally
to meet its debts as they become due;
(k) an involuntary petition or proposal shall be filed or an
action or proceeding otherwise commenced seeking reorganization, arrangement,
consolidation or readjustment of the debts of the Borrower, WRI or any of the
Borrower's Subsidiaries or for any other relief under the federal Bankruptcy
Code, as amended, or under any other bankruptcy or insolvency act or law, state
or federal, now or hereafter existing and either (i) such petition, proposal,
action or proceeding shall not have been dismissed within a period of sixty (60)
days after its commencement or (ii) an order for relief against the Borrower,
WRI or such Subsidiary shall have been entered in such proceeding;
(l) a receiver, assignee, liquidator, sequestrator, custodian,
monitor, trustee or similar officer for the Borrower or any of its Subsidiaries
or for all or any part of its property shall be appointed or a warrant of
attachment, execution or similar process shall be issued against any part of the
property of the Borrower or any of its Subsidiaries;
(m) the Borrower or any of its Subsidiaries shall file a
certificate of dissolution under applicable state law or shall be liquidated,
dissolved or wound-up or shall commence or have commenced against it any action
or proceeding for dissolution, winding-up or liquidation, or shall take any
corporate action in furtherance thereof;
(n) all or any material part of the property of the Borrower
or any of its Subsidiaries shall be nationalized, expropriated or condemned,
seized or otherwise appropriated, or custody or control of such property or of
the Borrower or such Subsidiary shall be assumed by any Governmental Authority
or any court of competent jurisdiction at the instance of any Governmental
Authority, except where contested in good faith by proper proceedings diligently
pursued where a stay of enforcement is in effect;
(o) one or more final judgments or orders for the payment of
money, not fully covered by insurance or other third party indemnifications
acceptable to the Agent, shall be rendered against the Borrower or any of its
Subsidiaries, if those judgments or orders in the aggregate (i) at any time
exceed $25,000,000, or (ii) at any time when the Borrower would not be in
compliance with Section 9.12 (Minimum Availability) if the amount of those
judgments or orders where deducted from Availability, exceed $10,000,000;
(p) any loss, theft, damage or destruction of any item or
items of Collateral occurs which materially and adversely affects the property,
business, operation, prospects, or condition of the Borrower or any of its
Subsidiaries and is not adequately covered by insurance;
(q) there is filed against the Borrower or any of its
Subsidiaries any civil or criminal action, suit or proceeding under any federal
or state racketeering statute (including, without limitation, the Racketeer
Influenced and Corrupt Organization Act of 1970), which action, suit or
proceeding (i) is not dismissed within one hundred twenty (120) days, and (ii)
could reasonably be expected to result in the confiscation or forfeiture of any
material portion of the Collateral;
-69-
76
(r) for any reason other than the failure of the Agent to take
any action available to it to maintain perfection of the Agent's Liens, pursuant
to the Loan Documents, any Loan Document ceases to be in full force and effect
or any Lien with respect to any material portion of the Collateral intended to
be secured thereby ceases to be, or is not, valid, perfected and prior to all
other Liens (other than Permitted Liens) or is terminated, revoked or declared
void; or
(s) there occurs a Change of Control.
Section 11.2 Remedies.
(a) Reduction; Limitation of Advances. If a Default or an
Event of Default exists, the Agent may, in its discretion, and shall, at the
direction of the Majority Lenders, do one or more of the following at any time
or times and in any order, without notice to or demand on the Borrower: (i)
restrict the amount of or refuse to make Revolving Loans; and (ii) restrict or
refuse to arrange for or provide Letters of Credit. If an Event of Default
exists, the Agent shall, at the direction of the Majority Lenders, do one or
more of the following, in addition to the actions described in the preceding
sentence, at any time or times and in any order, without notice to or demand on
the Borrower: (A) terminate the Commitments and this Agreement; (B) reduce the
Maximum Revolver Amount, or the advance rates against Eligible Inventory used in
computing the Availability, or reduce one or more of the other elements used in
computing the Availability; (C) declare any or all Obligations to be immediately
due and payable; provided, however, that upon the occurrence of any Event of
Default described in Section 11.1(j), Section 11.1(k), Section 11.1(l) or
Section 11.1(m), the Commitments shall automatically and immediately expire and
all Obligations shall automatically become immediately due and payable without
notice or demand of any kind; and (D) pursue its other rights and remedies under
the Loan Documents and applicable law.
(b) Collateral and Possession. If an Event of Default has
occurred and is continuing: (i) the Agent shall have for the benefit of the
Lenders, in addition to all other rights of the Agent and the Lenders, the
rights and remedies of a secured party under the UCC; (ii) the Agent may, at any
time, take possession of the Collateral and keep it on the Borrower's premises,
at no cost to the Agent or any Lender, or remove any part of it to such other
place or places as the Agent may desire, or the Borrower shall, upon the Agent's
demand, at the Borrower's cost, assemble the Collateral and make it available to
the Agent at a place reasonably convenient to the Agent; and (iii) the Agent may
sell and deliver any Collateral at public or private sales, for cash, upon
credit or otherwise, at such prices and upon such terms as the Agent deems
advisable, in its sole discretion, and may, if the Agent deems it reasonable,
postpone or adjourn any sale of the Collateral by an announcement at the time
and place of sale or of such postponed or adjourned sale without giving a new
notice of sale. Without in any way requiring notice to be given in the following
manner, the Borrower agrees that any notice by the Agent of sale, disposition or
other intended action hereunder or in connection herewith, whether required by
the UCC or otherwise, shall constitute reasonable notice to the Borrower if such
notice is mailed by registered or certified mail, return receipt requested,
postage prepaid, or is delivered personally against receipt, at least five (5)
Business Days prior to such action to the Borrower's address specified in or
pursuant to Section 15.8 (Notices). If any Collateral is sold on terms other
than payment in full at the time of sale, no credit shall be given against the
Obligations until the Agent or the Lenders receive payment, and if the buyer
defaults in payment, the Agent
-70-
77
may resell the Collateral without further notice to the Borrower. In the event
the Agent seeks to take possession of all or any portion of the Collateral by
judicial process, the Borrower irrevocably waives: (A) the posting of any bond,
surety or security with respect thereto which might otherwise be required; (B)
any demand for possession prior to the commencement of any suit or action to
recover the Collateral; and (C) any requirement that the Agent retain possession
and not dispose of any Collateral until after trial or final judgment. The
Borrower agrees that the Agent has no obligation to preserve rights to the
Collateral or marshal any Collateral for the benefit of any Person. The Agent is
hereby granted an irrevocable license or other right to use, without charge, the
Borrower's labels, patents, copyrights, name, trade secrets, trade names,
trademarks, and advertising matter, or any similar property, in completing
production of, advertising or selling any Collateral, and the Borrower's rights
under all licenses and all franchise agreements shall inure to the Agent's
benefit for such purpose. The proceeds of sale shall be applied first to all
expenses of sale, including attorneys' fees, and then to the Obligations in
whatever order the Agent elects. The Agent will return any excess to the
Borrower and the Borrower shall remain liable for any deficiency.
(c) Waiver by Borrower. If an Event of Default occurs, the
Borrower hereby waives all rights to notice and hearing prior to the exercise by
the Agent of the Agent's rights to repossess the Collateral without judicial
process or to replevy, attach or levy upon the Collateral without notice or
hearing.
ARTICLE XII
TERM AND TERMINATION
Section 12.1 Term and Termination.
The term of this Agreement shall end on the Stated Termination Date.
The Agent upon direction from the Majority Lenders may terminate this Agreement
without notice upon the occurrence of an Event of Default. Upon the effective
date of termination of this Agreement for any reason whatsoever, all Obligations
(including, without limitation, all unpaid principal, accrued interest and any
early termination or prepayment fees or penalties) shall become immediately due
and payable and the Borrower shall immediately arrange for the cancellation of
Letters of Credit then outstanding. Notwithstanding the termination of this
Agreement, until all Obligations are indefeasibly paid and performed in full in
cash, the Borrower shall remain bound by the terms of this Agreement and shall
not be relieved of any of its Obligations hereunder, and the Agent and the
Lenders shall retain all their rights and remedies hereunder (including, without
limitation, the Agent's Liens in and all rights and remedies with respect to all
then existing and after-arising Collateral).
ARTICLE XIII
AMENDMENTS; WAIVER; PARTICIPATIONS; ASSIGNMENTS; SUCCESSORS
Section 13.1 Syndication.
The Borrower shall cooperate with Bank of America in the syndication of
the Credit Facility and shall meet with the prospective Lenders as may be
reasonably requested by Bank of
-71-
78
America, it being understood that the Agent shall initially consult with the
Borrower as to the identity and number of such prospective Lenders.
Section 13.2 No Waivers; Cumulative Remedies.
No failure by the Agent or any Lender to exercise any right, remedy, or
option under this Agreement or any present or future supplement thereto, or in
any other agreement between or among the Borrower and the Agent and/or any
Lender, or delay by the Agent or any Lender in exercising the same, will not
operate as a waiver thereof. No waiver by the Agent or any Lender will be
effective unless it is in writing, and then only to the extent specifically
stated. No waiver by the Agent or the Lenders on any occasion shall affect or
diminish the Agent's and each Lender's rights thereafter to require strict
performance by the Borrower of any provision of this Agreement. The Agent's and
each Lender's rights under this Agreement will be cumulative and not exclusive
of any other right or remedy which the Agent or any Lender may have.
Section 13.3 Amendments and Waivers.
No amendment or waiver of any provision of this Agreement or any other
Loan Document, and no consent with respect to any departure by the Borrower
therefrom, shall be effective unless the same shall be in writing and signed by
the Majority Lenders (or by the Agent at the written request of the Majority
Lenders) and the Borrower and then any such waiver or consent shall be effective
only in the specific instance and for the specific purpose for which given;
provided, however, that no such waiver, amendment, or consent shall, unless in
writing and signed by all the Lenders and the Borrower and acknowledged by the
Agent, do any of the following:
(a) increase or extend the Commitment of any Lender;
(b) postpone or delay any date fixed by this Agreement or any
other Loan Document for any payment of principal, interest, fees or other
amounts due to the Lenders (or any of them) hereunder or under any other Loan
Document;
(c) reduce the principal of, or the rate of interest specified
herein on any Loan, or any fees or other amounts payable hereunder or under any
other Loan Document;
(d) change the percentage of the Commitments or of the
aggregate unpaid principal amount of the Loans which is required for the Lenders
or any of them to take any action hereunder;
(e) increase any of the percentages or amounts set forth in
the definition of Borrowing Base;
(f) amend this Section or any provision of the Agreement
providing for consent or other action by all Lenders;
(g) release Collateral other than as permitted by Section
14.11 (Collateral Matters);
(h) change the definitions of "Majority Lenders" or "Required
Lenders";
-72-
79
(i) increase the Maximum Revolver Amount and Unused Letter of
Credit Subfacility;
and, provided further, that no amendment, waiver or consent shall, unless in
writing and signed by the Agent, affect the rights or duties of the Agent under
this Agreement or any other Loan Document. If the Agent requests the consent of
a Lender and does not receive (i) a written denial thereof within ten (10)
Business Days after such Lender's receipt of such request or (ii) a written
notice from a Lender that due course consideration of the request requires
additional time and within ten (10) Business Days after such notice the Agent
has not received a written denial thereof, then such Lender will be deemed to
have given such consent.
Section 13.4 Assignments; Participations.
(a) Assignments. Any Lender may, with the written consent of
the Agent and (provided no Event of Default exists) the Borrower, which consent
shall not be unreasonably withheld or delayed, assign and delegate to one or
more assignees (provided that no written consent of the Agent or the Borrower
shall be required in connection with any assignment and delegation by a Lender
to an Affiliate of such Lender) (each an "Assignee") all, or any ratable part of
all, of the Loans, the Commitments and the other rights and obligations of such
Lender hereunder, in a minimum amount of $10,000,000 or if less the entire
amount of such Lender's Commitment; provided, however, that the Borrower and the
Agent may continue to deal solely and directly with such Lender in connection
with the interest so assigned to an Assignee until (i) written notice of such
assignment, together with payment instructions, addresses and related
information with respect to the Assignee, shall have been given to the Borrower
and the Agent by such Lender and the Assignee; (ii) such Lender and its Assignee
shall have delivered to the Borrower and the Agent an Assignment and Acceptance
in the form of EXHIBIT F ("Assignment and Acceptance") together with any Note or
Notes subject to such assignment and (iii) the assignor Lender or Assignee has
paid to the Agent a processing fee in the amount of $3,000.
(b) Effective Date of Assignment. From and after the date that
the Agent notifies the assignor Lender that it has received an executed
Assignment and Acceptance and payment of the above-referenced processing fee,
(i) the Assignee thereunder shall be a party hereto and, to the extent that
rights and obligations, including, but not limited to, the obligation to
participate in Letters of Credit have been assigned to it pursuant to such
Assignment and Acceptance, shall have the rights and obligations of a Lender
under the Loan Documents, and (ii) the assignor Lender shall, to the extent that
rights and obligations hereunder and under the other Loan Documents have been
assigned by it pursuant to such Assignment and Acceptance, relinquish its rights
and be released from its obligations under this Agreement (and in the case of an
Assignment and Acceptance covering all or the remaining portion of an assigning
Lender's rights and obligations under this Agreement, such Lender shall cease to
be a party hereto).
(c) Confirmation and Agreements. By executing and delivering
an Assignment and Acceptance, the assigning Lender thereunder and the Assignee
thereunder confirm to and agree with each other and the other parties hereto as
follows: (i) other than as provided in such Assignment and Acceptance, such
assigning Lender makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or representations
made in or in connection with this Agreement or the execution, legality,
validity, enforceability,
-73-
80
genuineness, sufficiency or value of this Agreement or any other Loan Document
furnished pursuant hereto or the attachment, perfection, or priority of any Lien
granted by the Borrower to the Agent or any Lender in the Collateral; (ii) such
assigning Lender makes no representation or warranty and assumes no
responsibility with respect to the financial condition of the Borrower or the
performance or observance by the Borrower of any of its obligations under this
Agreement or any other Loan Document furnished pursuant hereto; (iii) such
Assignee confirms that it has received a copy of this Agreement, together with
such other documents and information as it has deemed appropriate to make its
own credit analysis and decision to enter into such Assignment and Acceptance;
(iv) such Assignee will, independently and without reliance upon the Agent, such
assigning Lender or any other Lender, and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under this Agreement; (v) such
Assignee appoints and authorizes the Agent to take such action as agent on its
behalf and to exercise such powers under this Agreement as are delegated to the
Agent by the terms hereof, together with such powers, including, without
limitation, the discretionary rights and incidental power, as are reasonably
incidental thereto; and (vi) such Assignee agrees that it will perform in
accordance with their terms all of the obligations which by the terms of this
Agreement are required to be performed by it as a Lender.
(d) Substitute Notes. Within five (5) Business Days after its
receipt of notice by the Agent that it has received an executed Assignment and
Acceptance and payment of the processing fee, the Borrower shall execute and
deliver to the Agent, new Notes evidencing such Assignee's assigned Loans and,
if the assignor Lender has retained a portion of its Loans and its Commitment,
replacement Notes in the principal amount of the Loans retained by the assignor
Lender (such Notes to be in exchange for, but not in payment of, the Notes held
by such Lender). Immediately upon each Assignee's making its processing fee
payment under the Assignment and Acceptance, this Agreement shall be deemed to
be amended to the extent, but only to the extent, necessary to reflect the
addition of the Assignee and the resulting adjustment of the Commitments arising
therefrom. The Commitment allocated to each Assignee shall reduce such
Commitments of the assigning Lender pro tanto.
(e) Participations. Any Lender may at any time sell to one or
more commercial banks, financial institutions, or other Persons not Affiliates
of the Borrower (a "Participant") participating interests in any Loans, the
Commitment of that Lender and the other interests of that Lender (the
"originating Lender") hereunder and under the other Loan Documents; provided,
however, that (i) the originating Lender's obligations under this Agreement
shall remain unchanged, (ii) the originating Lender shall remain solely
responsible for the performance of such obligations, (iii) the Borrower and the
Agent shall continue to deal solely and directly with the originating Lender in
connection with the originating Lender's rights and obligations under this
Agreement and the other Loan Documents, and (iv) no Lender shall transfer or
grant any participating interest under which the Participant has rights to
approve any amendment to, or any consent or waiver with respect to, this
Agreement or any other Loan Document, and all amounts payable by the Borrower
hereunder shall be determined as if such Lender had not sold such participation;
except that, if amounts outstanding under this Agreement are due and unpaid, or
shall have been declared or shall have become due and payable upon the
occurrence of an Event of Default, each Participant shall be deemed to have the
right of set-off in respect of its participating interest in amounts owing under
this Agreement to the same extent
-74-
81
and subject to the same limitation as if the amount of its participating
interest were owing directly to it as a Lender under this Agreement.
(f) Pledge of Interest. Notwithstanding any other provision in
this Agreement, any Lender may at any time create a security interest in, or
pledge, all or any portion of its rights under and interest in this Agreement in
favor of any Federal Reserve Bank in accordance with Regulation A of the FRB or
U.S. Treasury Regulation 31 CFR Section 203.14, and such Federal Reserve Bank
may enforce such pledge or security interest in any manner permitted under
applicable law.
ARTICLE XIV
THE AGENT
Section 14.1 Appointment and Authorization.
Each Lender hereby designates and appoints Bank of America, National
Association as its Agent under this Agreement and the other Loan Documents and
each Lender hereby irrevocably authorizes the Agent to take such action on its
behalf under the provisions of this Agreement and each other Loan Document and
to exercise such powers and perform such duties as are expressly delegated to it
by the terms of this Agreement or any other Loan Document, together with such
powers as are reasonably incidental thereto. The Agent agrees to act as such on
the express conditions contained in this ARTICLE XIV. The provisions of this
ARTICLE XIV are solely for the benefit of the Agent and the Lenders and the
Borrower shall have no rights as a third party beneficiary of any of the
provisions contained herein. Notwithstanding any provision to the contrary
contained elsewhere in this Agreement or in any other Loan Document, the Agent
shall not have any duties or responsibilities, except those expressly set forth
herein, nor shall the Agent have or be deemed to have any fiduciary relationship
with any Lender, and no implied covenants, functions, responsibilities, duties,
obligations or liabilities shall be read into this Agreement or any other Loan
Document or otherwise exist against the Agent. Without limiting the generality
of the foregoing sentence, the use of the term "agent" in this Agreement with
reference to the Agent is not intended to connote any fiduciary or other implied
(or express) obligations arising under agency doctrine of any applicable law.
Instead, such term is used merely as a matter of market custom, and is intended
to create or reflect only an administrative relationship between independent
contracting parties. Except as expressly otherwise provided in this Agreement,
the Agent shall have and may use its sole discretion with respect to exercising
or refraining from exercising any discretionary rights or taking or refraining
from taking any actions which the Agent is expressly entitled to take or assert
under this Agreement and the other Loan Documents, including, without
limitation, (a) the determination of the applicability of ineligibility criteria
with respect to the calculation of the Borrowing Base, (b) the making of Agent
Advances pursuant to Section 2.2(i) (Agent Advances), and (c) the exercise of
remedies pursuant to Section 11.2 (Remedies), and any action so taken or not
taken shall be deemed consented to by the Lenders.
Section 14.2 Delegation of Duties.
The Agent may execute any of its duties under this Agreement or any
other Loan Document by or through agents, employees or attorneys-in-fact and
shall be entitled to advice of counsel concerning all matters pertaining to such
duties. The Agent shall not be responsible for
-75-
82
the negligence or misconduct of any agent or attorney-in-fact that it selects as
long as such selection was made without gross negligence or willful misconduct.
Section 14.3 Liability of Agent.
None of the Agent-Related Persons shall (a) be liable for any action
taken or omitted to be taken by any of them under or in connection with this
Agreement or any other Loan Document or the transactions contemplated hereby
(except for its own gross negligence or willful misconduct), or (b) be
responsible in any manner to any of the Lenders for any recital, statement,
representation or warranty made by the Borrower or any Subsidiary or Affiliate
of the Borrower, or any officer thereof, contained in this Agreement or in any
other Loan Document, or in any certificate, report, statement or other document
referred to or provided for in, or received by the Agent under or in connection
with, this Agreement or any other Loan Document, or the validity, effectiveness,
genuineness, enforceability or sufficiency of this Agreement or any other Loan
Document, or for any failure of the Borrower or any other party to any Loan
Document to perform its obligations hereunder or thereunder. No Agent-Related
Person shall be under any obligation to any Lender to ascertain or to inquire as
to the observance or performance of any of the agreements contained in, or
conditions of, this Agreement or any other Loan Document, or to inspect the
properties, books or records of the Borrower or any of the Borrower's
Subsidiaries or Affiliates.
Section 14.4 Reliance by Agent.
(a) Writings, etc. The Agent shall be entitled to rely, and
shall be fully protected in relying, upon any writing, resolution, notice,
consent, certificate, affidavit, letter, telegram, facsimile, telex or telephone
message, statement or other document or conversation believed by it to be
genuine and correct and to have been signed, sent or made by the proper Person
or Persons, and upon advice and statements of legal counsel (including counsel
to the Borrower), independent accountants and other experts selected by the
Agent. The Agent shall be fully justified in failing or refusing to take any
action under this Agreement or any other Loan Document unless it shall first
receive such advice or concurrence of the Majority Lenders as it deems
appropriate and, if it so requests, it shall first be indemnified to its
satisfaction by the Lenders against any and all liability and expense which may
be incurred by it by reason of taking or continuing to take any such action. The
Agent shall in all cases be fully protected in acting, or in refraining from
acting, under this Agreement or any other Loan Document in accordance with a
request or consent of the Majority Lenders (or all Lenders if so required by
Section 13.3) and such request and any action taken or failure to act pursuant
thereto shall be binding upon all of the Lenders.
(b) Conditions Precedent. For purposes of determining
compliance with the conditions specified in Section 10.1 (Conditions Precedent),
each Lender that has executed this Agreement shall be deemed to have consented
to, approved or accepted or to be satisfied with, each document or other matter
either sent by the Agent to such Lender for consent, approval, acceptance or
satisfaction, or required thereunder to be consented to or approved by or
acceptable or satisfactory to the Lender.
-76-
83
Section 14.5 Notice of Default.
The Agent shall not be deemed to have knowledge or notice of the
occurrence of any Default or Event of Default, except with respect to defaults
in the payment of principal, interest and fees required to be paid to the Agent
for the account of the Lenders, unless the Agent shall have received written
notice from a Lender or the Borrower referring to this Agreement, describing
such Default or Event of Default and stating that such notice is a "notice of
default." The Agent will notify the Lenders of its receipt of any such notice.
The Agent shall take such action with respect to such Default or Event of
Default as may be requested by the Majority Lenders in accordance with Section
11.2 (Remedies); provided, however, that unless and until the Agent has received
any such request, 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.
Section 14.6 Credit Decision.
Each Lender acknowledges that none of the Agent-Related Persons has
made any representation or warranty to it, and that no act by the Agent
hereinafter taken, including any review of the affairs of the Borrower and its
Affiliates, shall be deemed to constitute any representation or warranty by any
Agent-Related Person to any Lender. Each Lender represents to the Agent that it
has, independently and without reliance upon any Agent-Related Person and based
on such documents and information as it has deemed appropriate, made its own
appraisal of and investigation into the business, prospects, operations,
property, financial and other condition and creditworthiness of the Borrower and
its Affiliates, and all applicable bank regulatory laws relating to the
transactions contemplated hereby, and made its own decision to enter into this
Agreement and to extend credit to the Borrower. Each Lender also represents that
it will, independently and without reliance upon any Agent-Related Person and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit analysis, appraisals and decisions in
taking or not taking action under this Agreement and the other Loan Documents,
and to make such investigations as it deems necessary to inform itself as to the
business, prospects, operations, property, financial and other condition and
creditworthiness of the Borrower. Except for notices, reports and other
documents expressly herein required to be furnished to the Lenders by the Agent,
the Agent shall not have any duty or responsibility to provide any Lender with
any credit or other information concerning the business, prospects, operations,
property, financial and other condition or creditworthiness of the Borrower
which may come into the possession of any of the Agent-Related Persons.
Section 14.7 Indemnification.
Whether or not the transactions contemplated hereby are consummated,
the Lenders shall indemnify upon demand the Agent-Related Persons (to the extent
not reimbursed by or on behalf of the Borrower and without limiting the
obligation of the Borrower to do so), pro rata, from and against any and all
Indemnified Liabilities as such term is defined in Section 15.11 (Indemnity of
the Agent and the Lenders); provided, however, that no Lender shall be liable
for the payment to the Agent-Related Persons of any portion of such Indemnified
Liabilities resulting solely from such Person's gross negligence or willful
misconduct. Without limitation of the foregoing, each Lender shall reimburse the
Agent upon demand for its ratable share of any costs or out-of-pocket expenses
(including Attorney Costs) incurred by the Agent in connection with the
preparation,
-77-
84
execution, delivery, administration, modification, amendment or
enforcement (whether through negotiations, legal proceedings or otherwise) of,
or legal advice in respect of rights or responsibilities under, this Agreement,
any other Loan Document, or any document contemplated by or referred to herein,
to the extent that the Agent is not reimbursed for such expenses by or on behalf
of the Borrower. The undertaking in this Section shall survive the payment of
all Obligations hereunder and the resignation or replacement of the Agent.
Section 14.8 Agent in Individual Capacity.
Bank of America and its Affiliates may make loans to, issue letters of
credit for the account of, accept deposits from, acquire equity interests in and
generally engage in any kind of banking, trust, financial advisory, underwriting
or other business with the Borrower and its Subsidiaries and Affiliates as
though Bank of America were not the Agent hereunder and without notice to or
consent of the Lenders. The Lenders acknowledge that, pursuant to such
activities, Bank of America or its Affiliates may receive information regarding
the Borrower or its Affiliates (including information that may be subject to
confidentiality obligations in favor of the Borrower or such Subsidiary) and
acknowledge that the Agent shall be under no obligation to provide such
information to them. With respect to its Loans, Bank of America shall have the
same rights and powers under this Agreement as any other Lender and may exercise
the same as though it were not the Agent, and the terms "Lender" and "Lenders"
include Bank of America in its individual capacity.
Section 14.9 Successor Agent.
The Agent may resign as Agent upon 30 days' notice to the Lenders and
the Borrower. In the event Bank of America sells all of its Commitments and
Revolving Loans as part of a sale, transfer or other disposition by Bank of
America of substantially all of its loan portfolio, Bank of America shall resign
as Agent and such purchaser or transferee shall become the successor Agent
hereunder. If the Agent resigns under this Agreement, subject to the proviso in
the preceding sentence, the Majority Lenders shall appoint from among the
Lenders a successor agent for the Lenders. If no successor agent is appointed
prior to the effective date of the resignation of the Agent, the Agent may
appoint, after consulting with the Lenders and the Borrower, a successor agent
from among the Lenders. Upon the acceptance of its appointment as successor
agent hereunder, such successor agent shall succeed to all the rights, powers
and duties of the retiring Agent and the term "Agent" shall mean such successor
agent and the retiring Agent's appointment, powers and duties as Agent shall be
terminated. After any retiring Agent's resignation hereunder as Agent, the
provisions of this ARTICLE XIV (The Agent) shall inure to its benefit as to any
actions taken or omitted to be taken by it while it was Agent under this
Agreement. If no successor agent has accepted appointment as Agent by the date
which is thirty (30) days following a retiring Agent's notice of resignation,
the retiring Agent's resignation shall nevertheless thereupon become effective
and the Lenders shall perform all of the duties of the Agent hereunder until
such time, if any, as the Majority Lenders appoint a successor agent as provided
for above. Notwithstanding the foregoing, in the event that Bank of America
assigns all of its Loans to an Affiliate, such Affiliate shall automatically
become the successor Agent hereunder upon the effective date of such assignment.
Notwithstanding the foregoing, in the event that Bank of America assigns all of
its Loans to an Affiliate, such Affiliate shall automatically become the
successor Agent hereunder upon the effective date of such assignment.
-78-
85
Section 14.10 Withholding Tax; (a) Foreign Corporation. If any Lender
is a "foreign corporation, partnership or trust" within the meaning of the Code
and such Lender claims exemption from, or a reduction of, U.S. withholding tax
under Sections 1441 or 1442 of the Code, such Lender agrees with and in favor of
the Agent, to deliver to the Agent:
(i) if such Lender claims an exemption from, or a reduction
of, withholding tax under a United States tax treaty, properly
completed IRS Forms 1001 and W-8 before the payment of any interest in
the first calendar year and before the payment of any interest in each
third succeeding calendar year during which interest may be paid under
this Agreement;
(ii) if such Lender claims that interest paid under this
Agreement is exempt from United States withholding tax because it is
effectively connected with a United States trade or business of such
Lender, two properly completed and executed copies of IRS Form 4224
before the payment of any interest is due in the first taxable year of
such Lender and in each succeeding taxable year of such Lender during
which interest may be paid under this Agreement, and IRS Form W-9; and
(iii) such other form or forms as may be required under the
Code or other laws of the United States as a condition to exemption
from, or reduction of, United States withholding tax.
Such Lender agrees to promptly notify the Agent of any change in circumstances
which would modify or render invalid any claimed exemption or reduction.
(b) Withholding Tax - IRS Form 1001. If any Lender claims
exemption from, or reduction of, withholding tax under a United States tax
treaty by providing IRS Form 1001 and such Lender sells, assigns, grants a
participation in, or otherwise transfers all or part of the Obligations of the
Borrower to such Lender, such Lender agrees to notify the Agent of the
percentage amount in which it is no longer the beneficial owner of Obligations
of the Borrower to such Lender. To the extent of such percentage amount, the
Agent will treat such Lender's IRS Form 1001 as no longer valid.
(c) Withholding Tax - IRS Form 4224. If any Lender claiming
exemption from United States withholding tax by filing IRS Form 4224 with the
Agent sells, assigns, grants a participation in, or otherwise transfers all or
part of the Obligations of the Borrower to such Lender, such Lender agrees to
undertake sole responsibility for complying with the withholding tax
requirements imposed by Sections 1441 and 1442 of the Code.
(d) Reduction of Withholding Tax. If any Lender is entitled to
a reduction in the applicable withholding tax, the Agent may withhold from any
interest payment to such Lender an amount equivalent to the applicable
withholding tax after taking into account such reduction. If the forms or other
documentation required by subsection (a) of this Section are not delivered to
the Agent, then the Agent may withhold from any interest payment to such Lender
not providing such forms or other documentation an amount equivalent to the
applicable withholding tax.
(e) Indemnification of Agent. If the IRS or any other
Governmental Authority of the United States or other jurisdiction asserts a
claim that the Agent did not properly withhold tax
-79-
86
from amounts paid to or for the account of any Lender (because the appropriate
form was not delivered, was not properly executed, or because such Lender failed
to notify the Agent of a change in circumstances which rendered the exemption
from, or reduction of, withholding tax ineffective, or for any other reason)
such Lender shall indemnify the Agent fully for all amounts paid, directly or
indirectly, by the Agent as tax or otherwise, including penalties and interest,
and including any taxes imposed by any jurisdiction on the amounts payable to
the Agent under this Section, together with all costs and expenses (including
Attorney Costs). The obligation of the Lenders under this subsection shall
survive the payment of all Obligations and the resignation or replacement of the
Agent.
Section 14.11 Collateral Matters.
(a) Release of Agent's Lien. The Lenders hereby irrevocably
authorize the Agent, at its option and in its sole discretion, to release any
Agent's Lien upon any Collateral (i) upon the termination of the Commitments and
payment and satisfaction in full by Borrower of all Loans and reimbursement
obligations in respect of Letters of Credit, and the termination of all
outstanding Letters of Credit (whether or not any of such obligations are due)
and all other Obligations; (ii) constituting property being sold or disposed of
if the Borrower certifies to the Agent that the sale or disposition is made in
compliance with Section 9.9 (Mergers, Consolidations of Sales) (and the Agent
may rely conclusively on any such certificate, without further inquiry); (iii)
constituting property in which the Borrower owned no interest at the time the
Lien was granted or at any time thereafter; or (iv) constituting property leased
to the Borrower under a lease which has expired or been terminated in a
transaction permitted under this Agreement. Except as provided above, the Agent
will not release any of the Agent's Liens without the prior written
authorization of the Lenders; provided that the Agent may, in its discretion,
release the Agent's Liens on Collateral pursuant to sales under the WRI Sales
Agreement and on other Collateral valued in the aggregate not in excess of
$1,000,000 during any one year period without the prior written authorization of
the Lenders. Upon request by the Agent or the Borrower at any time, the Lenders
will confirm in writing the Agent's authority to release any Agent's Liens upon
particular types or items of Collateral pursuant to this Section 14.11.
(b) Execution of Releases by Agent. Upon receipt by the Agent
of any authorization required pursuant to Section 14.11(a)(Release of Agent's
Lien) from the Lenders of the Agent's authority to release any Agent's Liens
upon particular types or items of Collateral, and upon at least five (5)
Business Days' prior written request by the Borrower, the Agent shall (and is
hereby irrevocably authorized by the Lenders to) execute such documents as may
be necessary to evidence the release of the Agent's Liens upon such Collateral;
provided, however, that (i) the Agent shall not be required to execute any such
document on terms which, in the Agent's opinion, would expose the Agent to
liability or create any obligation or entail any consequence other than the
release of such Liens without recourse or warranty, and (ii) such release shall
not in any manner discharge, affect or impair the Obligations or any Liens
(other than those expressly being released) upon (or obligations of the Borrower
in respect of) all interests retained by the Borrower, including (without
limitation) the proceeds of any sale, all of which shall continue to constitute
part of the Collateral.
-80-
87
(c) Limitation of Agent's Obligations. The Agent shall have no
obligation whatsoever to any of the Lenders to assure that the Collateral exists
or is owned by the Borrower or is cared for, protected or insured or has been
encumbered, or that the Agent's Liens have been properly or sufficiently or
lawfully created, perfected, protected or enforced or are entitled to any
particular priority, or to exercise at all or in any particular manner or under
any duty of care, disclosure or fidelity, or to continue exercising, any of the
rights, authorities and powers granted or available to the Agent pursuant to any
of the Loan 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 in its capacity as one of the Lenders and that the
Agent shall have no other duty or liability whatsoever to any Lender as to any
of the foregoing.
Section 14.12 Restrictions on Actions by Lenders; Sharing of Payments;
(a) Set off. Each of the Lenders agrees that it shall not, without the express
consent of all Lenders, and that it shall, to the extent it is lawfully entitled
to do so, upon the request of all Lenders, set off against the Obligations, any
amounts owing by such Lender to the Borrower or any accounts of the Borrower now
or hereafter maintained with such Lender. Each of the Lenders further agrees
that it shall not, unless specifically requested to do so by the Agent, take or
cause to be taken any action to enforce its rights under this Agreement or
against the Borrower, including, without limitation, the commencement of any
legal or equitable proceedings, to foreclose any Lien on, or otherwise enforce
any security interest in, any of the Collateral.
(b) Remittance to Agent or Purchase of Pro Rata Share. If at
any time or times any Lender shall receive (i) by payment, foreclosure, setoff
or otherwise, any proceeds of Collateral or any payments with respect to the
Obligations of the Borrower to such Lender arising under, or relating to, this
Agreement or the other Loan Documents, except for any such proceeds or payments
received by such Lender from the Agent pursuant to the terms of this Agreement,
or (ii) payments from the Agent in excess of such Lender's ratable portion of
all such distributions by the Agent, such Lender shall promptly (A) turn the
same over to the Agent, in kind, and with such endorsements as may be required
to negotiate the same to the Agent, or in same day funds, as applicable, for the
account of all of the Lenders and for application to the Obligations in
accordance with the applicable provisions of this Agreement, or (B) purchase,
without recourse or warranty, an undivided interest and participation in the
Obligations owed to the other Lenders so that such excess payment received shall
be applied ratably as among the Lenders in accordance with their Pro Rata
Shares; provided, however, that if all or part of such excess payment received
by the purchasing party is thereafter recovered from it, those purchases of
participations shall be rescinded in whole or in part, as applicable, and the
applicable portion of the purchase price paid therefor shall be returned to such
purchasing party, but without interest except to the extent that such purchasing
party is required to pay interest in connection with the recovery of the excess
payment.
Section 14.13 Agency for Perfection.
Each Lender hereby appoints each other Lender as agent for the purpose
of perfecting the Lenders' security interest in assets which, in accordance with
Article 9 of the UCC can be perfected only by possession. Should any Lender
(other than the Agent) obtain possession of any such Collateral, such Lender
shall notify the Agent thereof, and, promptly upon the Agent's
-81-
88
request therefor shall deliver such Collateral to the Agent or in accordance
with the Agent's instructions.
Section 14.14 Payments by Agent to Lenders.
All payments to be made by the Agent to the Lenders shall be made by
bank wire transfer or internal transfer of immediately available funds to:
if to Bank of America: Bank of America
ABA # ▇▇▇▇▇▇▇▇▇
Chicago IL
Bank of America Business Credit
Acct# 86667-00418
Reference: Weirton Steel
or pursuant to such other wire transfer instructions as each party may designate
for itself by written notice to the Agent. Concurrently with each such payment,
the Agent shall identify whether such payment (or any portion thereof)
represents principal, premium or interest on the Revolving Loans or otherwise.
Section 14.15 Concerning the Collateral and the Related Loan Documents.
Each Lender authorizes and directs the Agent to enter into this
Agreement and the other Loan Documents relating to the Collateral, for the
ratable benefit of the Agent and the Lenders. Each Lender agrees that any action
taken by the Agent, Majority Lenders or Required Lenders, as applicable, in
accordance with the terms of this Agreement or the other Loan Documents relating
to the Collateral, and the exercise by the Agent, the Majority Lenders, or the
Required Lenders, as applicable, of their respective powers set forth therein or
herein, together with such other powers that are reasonably incidental thereto,
shall be binding upon all of the Lenders.
Section 14.16 Field Audit and Examination Reports; Disclaimer by
Lenders.
By signing this Agreement, each Lender:
(a) is deemed to have requested that the Agent furnish such
Lender, promptly after it becomes available, a copy of each field audit or
examination report (each a "Report" and collectively, "Reports") prepared by the
Agent;
(b) expressly agrees and acknowledges that neither Bank of
America nor the Agent (i) makes any representation or warranty as to the
accuracy of any Report, or (ii) shall be liable for any information contained in
any Report;
(c) expressly agrees and acknowledges that the Reports are not
comprehensive audits or examinations, that the Agent or other party performing
any audit or examination will inspect only specific information regarding the
Borrower and will rely significantly upon the Borrower's books and records, as
well as on representations of the Borrower's personnel;
(d) agrees to keep all Reports confidential and strictly for
its internal use, and not to distribute except to its participants, or use any
Report in any other manner; and
-82-
89
(e) without limiting the generality of any other
indemnification provision contained in this Agreement, agrees: (i) to hold the
Agent and any such other Lender preparing a Report harmless from any action the
indemnifying Lender may take or conclusion the indemnifying Lender may reach or
draw from any Report in connection with any loans or other credit accommodations
that the indemnifying Lender has made or may make to the Borrower, or the
indemnifying Lender's participation in, or the indemnifying Lender's purchase
of, a loan or loans of the Borrower; and (ii) to pay and protect, and indemnify,
defend and hold the Agent and any such other Lender preparing a Report harmless
from and against, the claims, actions, proceedings, damages, costs, expenses and
other amounts (including, without limitation Attorney Costs) incurred by the
Agent and any such other Lender preparing a Report as the direct or indirect
result of any third parties who might obtain all or part of any Report through
the indemnifying Lender.
Section 14.17 Relation Among Lenders.
The Lenders are not partners or co-venturers, and no Lender shall be
liable for the acts or omissions of, or (except as otherwise set forth herein in
case of the Agent) authorized to act for, any other Lender.
ARTICLE XV
MISCELLANEOUS
Section 15.1 Cumulative Remedies; No Prior Recourse to Collateral.
The enumeration herein of the Agent's and each Lender's rights and
remedies is not intended to be exclusive, and such rights and remedies are in
addition to and not by way of limitation of any other rights or remedies that
the Agent and the Lenders may have under the UCC or other applicable law. The
Agent and the Lenders shall have the right, in their sole discretion, to
determine which rights and remedies are to be exercised and in which order. The
exercise of one right or remedy shall not preclude the exercise of any others,
all of which shall be cumulative. The Agent and the Lenders may, without
limitation, proceed directly against the Borrower to collect the Obligations
without any prior recourse to the Collateral. No failure to exercise and no
delay in exercising, on the part of the Agent or any Lender, any right, remedy,
power or privilege hereunder, shall operate as a waiver thereof; nor shall any
single or partial exercise of any right, remedy, power or privilege hereunder
preclude any other or further exercise thereof or the exercise of any other
right, remedy, power or privilege.
Section 15.2 Severability.
The illegality or unenforceability of any provision of this Agreement
or any instrument or agreement required hereunder shall not in any way affect or
impair the legality or enforceability of the remaining provisions of this
Agreement or any instrument or agreement required hereunder.
Section 15.3 Governing Law; Choice of Forum; Service of Process
(a) APPLICABLE LAW. THIS AGREEMENT SHALL BE INTERPRETED AND
THE RIGHTS AND LIABILITIES OF THE PARTIES HERETO DETERMINED IN ACCORDANCE WITH
THE INTERNAL LAWS (AS OPPOSED TO THE CONFLICT OF
-83-
90
LAWS PROVISIONS PROVIDED THAT PERFECTION ISSUES WITH RESPECT TO ARTICLE 9 OF THE
UCC MAY GIVE EFFECT TO APPLICABLE CHOICE OR CONFLICT OF LAW RULES SET FORTH IN
ARTICLE 9 OF THE UCC) OF THE STATE OF ILLINOIS; PROVIDED THAT THE AGENT AND THE
LENDERS SHALL RETAIN ALL RIGHTS ARISING UNDER FEDERAL LAW.
(b) JURISDICTION. ANY LEGAL ACTION OR PROCEEDING WITH RESPECT
TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE
STATE OF ILLINOIS OR OF THE UNITED STATES FOR THE NORTHERN DISTRICT OF ILLINOIS,
AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH OF THE BORROWER, THE AGENT
AND THE LENDERS CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE
NON-EXCLUSIVE JURISDICTION OF THOSE COURTS. EACH OF THE BORROWER, THE AGENT AND
THE LENDERS IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING ANY OBJECTION TO THE
LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY
NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN SUCH
JURISDICTION IN RESPECT OF THIS AGREEMENT OR ANY DOCUMENT RELATED HERETO.
NOTWITHSTANDING THE FOREGOING: (i) THE AGENT AND THE LENDERS SHALL HAVE THE
RIGHT TO BRING ANY ACTION OR PROCEEDING AGAINST THE BORROWER OR ITS PROPERTY IN
THE COURTS OF ANY OTHER JURISDICTION THE AGENT OR THE LENDERS DEEM NECESSARY OR
APPROPRIATE IN ORDER TO REALIZE ON THE COLLATERAL OR OTHER SECURITY FOR THE
OBLIGATIONS AND (ii) EACH OF THE PARTIES HERETO ACKNOWLEDGES THAT ANY APPEALS
FROM THE COURTS DESCRIBED IN THE IMMEDIATELY PRECEDING SENTENCE MAY HAVE TO BE
HEARD BY A COURT LOCATED OUTSIDE THOSE JURISDICTIONS.
(c) SERVICE OF PROCESS. THE BORROWER HEREBY WAIVES PERSONAL
SERVICE OF ANY AND ALL PROCESS UPON IT AND CONSENTS THAT ALL SUCH SERVICE OF
PROCESS MAY BE MADE BY REGISTERED MAIL (RETURN RECEIPT REQUESTED) DIRECTED TO
THE BORROWER AT ITS ADDRESS SET FORTH IN SECTION 15.8 (NOTICES) AND SERVICE SO
MADE SHALL BE DEEMED TO BE COMPLETED FIVE (5) DAYS AFTER THE SAME SHALL HAVE
BEEN SO DEPOSITED IN THE U.S. MAILS. NOTHING CONTAINED HEREIN SHALL AFFECT THE
RIGHT OF AGENT OR THE LENDERS TO SERVE LEGAL PROCESS BY ANY OTHER MANNER
PERMITTED BY LAW.
Section 15.4 WAIVER OF JURY TRIAL.
THE BORROWER, THE LENDERS AND THE AGENT EACH WAIVE THEIR RESPECTIVE
RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING
OUT OF OR RELATED TO THIS AGREEMENT, THE OTHER LOAN DOCUMENTS, OR THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY, IN ANY ACTION, PROCEEDING OR OTHER
LITIGATION OF ANY TYPE BROUGHT BY ANY OF THE PARTIES AGAINST ANY OTHER PARTY OR
ANY AGENT-RELATED PERSON, PARTICIPANT OR ASSIGNEE, WHETHER WITH RESPECT TO
CONTRACT CLAIMS, TORT CLAIMS, OR OTHERWISE. THE BORROWER, THE
-84-
91
LENDERS AND THE AGENT EACH AGREE THAT ANY SUCH CLAIM OR CAUSE OF ACTION SHALL BE
TRIED BY A COURT TRIAL WITHOUT A JURY. WITHOUT LIMITING THE FOREGOING, THE
PARTIES FURTHER AGREE THAT THEIR RESPECTIVE RIGHT TO A TRIAL BY JURY IS WAIVED
BY OPERATION OF THIS SECTION AS TO ANY ACTION, COUNTERCLAIM OR OTHER PROCEEDING
WHICH SEEKS, IN WHOLE OR IN PART, TO CHALLENGE THE VALIDITY OR ENFORCEABILITY OF
THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS OR ANY PROVISION HEREOF OR THEREOF.
THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR
MODIFICATIONS TO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS.
Section 15.5 Survival of Representations and Warranties.
All of the Borrower's representations and warranties contained in this
Agreement shall survive the execution, delivery, and acceptance thereof by the
parties, notwithstanding any investigation by the Agent or the Lenders or their
respective agents.
Section 15.6 Other Security and Guaranties.
The Agent, may, without notice or demand and without affecting the
Borrower's obligations hereunder, from time to time: (a) take from any Person
and hold collateral (other than the Collateral) for the payment of all or any
part of the Obligations and exchange, enforce or release such collateral or any
part thereof; and (b) accept and hold any endorsement or guaranty of payment of
all or any part of the Obligations and release or substitute any such endorser
or guarantor, or any Person who has given any Lien in any other collateral as
security for the payment of all or any part of the Obligations, or any other
Person in any way obligated to pay all or any part of the Obligations.
Section 15.7 Fees and Expenses.
The Borrower agrees to pay to the Agent, for its benefit, on demand,
all costs and expenses that Agent pays or incurs in connection with the
negotiation, preparation, syndication, consummation, administration,
enforcement, and termination of this Agreement or any of the other Loan
Documents, including, without limitation: (a) Attorney Costs; (b) costs and
expenses (including attorneys' and paralegals' fees and disbursements) for any
amendment, supplement, waiver, consent, or subsequent closing in connection with
the Loan Documents and the transactions contemplated thereby; (c) costs and
expenses of lien and title searches and title insurance; (d) taxes, fees and
other charges filing financing statements and continuations, and other actions
to perfect, protect, and continue the Agent's Liens (including costs and
expenses paid or incurred by the Agent in connection with the consummation of
Agreement); (e) sums paid or incurred to pay any amount or take any action
required of the Borrower under the Loan Documents that the Borrower fails to pay
or take; (f) costs of appraisals, inspections, and verifications of the
Collateral, including, without limitation, travel, lodging, and meals for
inspections of the Collateral and the Borrower's operations by the Agent plus
the Agent's then customary charge for field examinations and audits and the
preparation of reports thereof (such charge is currently $750 per day (or
portion thereof) for each agent or employee of the Agent with respect to each
field examination or audit), provided, however, that unless a Default or Event
of Default has occurred, the Borrower shall not be required to pay the costs of
the Agent's field examinations conducted (i) more than once in any 180 day
period if there are there are no
-85-
92
Aggregate Revolver Outstandings, or (ii) more than once in any 120 day period if
there are any Aggregate Revolver Outstandings, or (iii) more than once in any 90
day period if the Aggregate Revolver Outstandings exceed $50,000,000 or if
Availability is less than $50,000,000; (g) costs and expenses of forwarding loan
proceeds, collecting checks and other items of payment, and establishing and
maintaining Payment Accounts and lock boxes; (h) costs and expenses of
preserving and protecting the Collateral; and (i) costs and expenses (including
attorneys' and paralegals' fees and disbursements) paid or incurred to obtain
payment of the Obligations, enforce the Agent's Liens, sell or otherwise realize
upon the Collateral, and otherwise enforce the provisions of the Loan Documents,
or to defend any claims made or threatened against the Agent or any Lender
arising out of the transactions contemplated hereby (including without
limitation, preparations for and consultations concerning any such matters). The
foregoing shall not be construed to limit any other provisions of the Loan
Documents regarding costs and expenses to be paid by the Borrower. All of the
foregoing costs and expenses shall be charged to the Borrower's Loan Account as
Revolving Loans as described in Section 4.4 (Payments as Revolving Loans).
Section 15.8 Notices.
Except as otherwise provided herein, all notices, demands and requests
that any party is required or elects to give to any other shall be in writing,
or by a telecommunications device capable of creating a written record, and any
such notice shall become effective (a) upon personal delivery thereof,
including, but not limited to, delivery by overnight mail and courier service,
(b) four (4) days after it shall have been mailed by United States mail, first
class, certified or registered, with postage prepaid or (c) in the case of
notice by such a telecommunications device, when properly transmitted, in each
case addressed to the party to be notified as follows:
If to the Agent: Bank of America, National Association
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Portfolio Manager
Telecopy No. (▇▇▇)▇▇▇-▇▇▇▇
with copies to: ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇., Esquire
Miles & Stockbridge
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
If to Lender: c/o Agent
If to the Borrower: Weirton Steel Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Senior Vice President
-86-
93
with copies to: Weirton Steel Corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇,
Vice President - Law and Secretary
or to such other address as each party may designate for itself by like notice.
Failure or delay in delivering copies of any notice, demand, request, consent,
approval, declaration or other communication to the persons designated above to
receive copies shall not adversely affect the effectiveness of such notice,
demand, request, consent, approval, declaration or other communication. Section
15.9 Waiver of Notices.
Unless otherwise expressly provided herein, the Borrower waives
presentment, protest and notice of demand or dishonor and protest as to any
instrument, notice of intent to accelerate the Obligations and notice of
acceleration of the Obligations, as well as any and all other notices to which
it might otherwise be entitled. No notice to or demand on the Borrower which the
Agent or any Lender may elect to give shall entitle the Borrower to any or
further notice or demand in the same, similar or other circumstances.
Section 15.10 Binding Effect.
The provisions of this Agreement shall be binding upon and inure to the
benefit of the respective representatives, successors, and assigns of the
parties hereto; provided, however, that no interest herein may be assigned by
the Borrower without prior written consent of the Agent and each Lender. The
rights and benefits of the Agent and the Lenders hereunder shall, if such
Persons so agree, inure to any party acquiring any interest in the Obligations
or any part thereof.
Section 15.11 Indemnity of the Agent and the Lenders by the Borrower.
(a) Indemnification - General. The Borrower agrees to defend,
indemnify and hold the Agent-Related Persons, and each Lender and each of its
respective officers, directors, employees, counsel, agents and attorneys-in-fact
(each, an "Indemnified Person") harmless from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, charges, expenses and disbursements (including Attorney Costs) of any
kind or nature whatsoever which may at any time (including at any time following
repayment of the Loans and the termination, resignation or replacement of the
Agent or replacement of any Lender) be imposed on, incurred by or asserted
against any such Person in any way relating to or arising out of this Agreement
or any document contemplated by or referred to herein, or the transactions
contemplated hereby, or any action taken or omitted by any such Person under or
in connection with any of the foregoing, including with respect to any
investigation, litigation or proceeding (including any Insolvency Proceeding or
appellate proceeding) related to or arising out of this Agreement, any other
Loan Document, or the Loans or the use of the proceeds thereof, whether or not
any Indemnified Person is a party thereto (all the foregoing, collectively, the
"Indemnified Liabilities"); provided, that the Borrower shall have no obligation
hereunder to any Indemnified Person with respect to Indemnified Liabilities
resulting solely from the willful misconduct or gross negligence of such
Indemnified Person. The agreements in this Section shall survive payment of all
other Obligations.
-87-
94
(b) Indemnification - Environmental. The Borrower agrees to
indemnify, defend and hold harmless the Agent and the Lenders from any loss or
liability directly or indirectly arising out of the use, generation,
manufacture, production, storage, release, threatened release, discharge,
disposal or presence of a hazardous substance relating to the Borrower's
operations, business or property. This indemnity will apply whether the
hazardous substance is on, under or about the Borrower's property or operations
or property leased to the Borrower. The indemnity includes but is not limited to
attorneys' fees. The indemnity extends to the Agent and the Lenders, their
parents, affiliates, subsidiaries and all of their directors, officers,
employees, agents, successors, attorneys and assigns. "Hazardous substances"
means any substance, material or waste that is or becomes designated or
regulated as "toxic," "hazardous," "pollutant," or "contaminant" or a similar
designation or regulation under any federal, state or local law (whether under
common law, statute, regulation or otherwise) or judicial or administrative
interpretation of such, including without limitation petroleum or natural gas.
This indemnity will survive repayment of all other Obligations.
Section 15.12 Limitation of Liability.
No claim may be made by the Borrower, any Lender or other Person
against the Agent, any Lender, or the affiliates, directors, officers, officers,
employees, or agents of any of them for any special, indirect, consequential or
punitive damages in respect of any claim for breach of contract or any other
theory of liability arising out of or related to the transactions contemplated
by this Agreement or any other Loan Document, or any act, omission or event
occurring in connection therewith, and the Borrower and each Lender hereby
waive, release and agree not to ▇▇▇ upon any claim for such damages, whether or
not accrued and whether or not known or suspected to exist in its favor.
Section 15.13 Final Agreement.
This Agreement and the other Loan Documents are intended by the
Borrower, the Agent and the Lenders to be the final, complete, and exclusive
expression of the agreement between them. This Agreement supersedes any and all
prior oral or written agreements relating to the subject matter hereof. No
modification, rescission, waiver, release, or amendment of any provision of this
Agreement or any other Loan Document shall be made, except by a written
agreement signed by the Borrower and a duly authorized officer of each of the
Agent and the requisite Lenders.
Section 15.14 Counterparts.
This Agreement may be executed in any number of counterparts, and by
the Agent, each Lender and the Borrower in separate counterparts, each of which
shall be an original, but all of which shall together constitute one and the
same agreement; signature pages may be detached from multiple separate
counterparts and attached to a single counterpart so that all signature pages
are physically attached to the same document.
Section 15.15 Captions.
The captions contained in this Agreement are for convenience of
reference only, are without substantive meaning and should not be construed to
modify, enlarge, or restrict any provision.
-88-
95
Section 15.16 Right of Setoff.
In addition to any rights and remedies of the Lenders provided by law,
if an Event of Default exists or the Loans have been accelerated, each Lender is
authorized at any time and from time to time, without prior notice to the
Borrower, any such notice being waived by the Borrower to the fullest extent
permitted by law, to set off and apply any and all deposits (general or special,
time or demand, provisional or final) at any time held by, and other
indebtedness at any time owing by, such Lender to or for the credit or the
account of the Borrower against any and all Obligations owing to such Lender,
now or hereafter existing, irrespective of whether or not the Agent or such
Lender shall have made demand under this Agreement or any Loan Document and
although such Obligations may be contingent or unmatured. Each Lender agrees
promptly to notify the Borrower and the Agent after any such set-off and
application made by such Lender; provided, however, that the failure to give
such notice shall not affect the validity of such set-off and application.
NOTWITHSTANDING THE FOREGOING, NO LENDER SHALL EXERCISE ANY RIGHT OF SET-OFF,
BANKER'S LIEN, OR THE LIKE AGAINST ANY DEPOSIT ACCOUNT OR PROPERTY OF THE
BORROWER HELD OR MAINTAINED BY SUCH LENDER WITHOUT THE PRIOR WRITTEN UNANIMOUS
CONSENT OF THE LENDERS.
The balance of this page has intentionally been left blank. Signatures begin on
the following page.
-89-
96
IN WITNESS WHEREOF, the parties have entered into this Agreement on the
date first above written.
"BORROWER"
WEIRTON STEEL CORPORATION
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Sr. VP-Corporate
Development & Strategy
"AGENT"
Bank of America, National Association,
as the Agent
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Vice President
"LENDERS"
Commitment: $100,000,000 Bank of America, National Association,
as a Lender
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Vice President
-90-
97
EXHIBIT A
FORM OF BORROWING BASE CERTIFICATE
1
98
EXHIBIT B
FINANCIAL STATEMENTS
1
99
EXHIBIT C
LIST OF CLOSING DOCUMENTS
1
100
EXHIBIT D
NOTICE OF BORROWING
Date: ____________, ____
To: Bank of America, National Association, as Agent for the Lenders who are
parties to the Loan and Security Agreement dated as of November 17,
1999 (as extended, renewed, amended or restated from time to time, the
"Loan and Security Agreement") among Weirton Steel Corporation, certain
Lenders which are signatories thereto and Bank of America, National
Association, as Agent
Ladies and Gentlemen:
The undersigned, Weirton Steel Corporation (the "Borrower"), refers to
the Loan and Security Agreement, the terms defined therein being used herein as
therein defined, and hereby gives you notice irrevocably of the Borrowing
specified below:
1. The Business Day of the proposed Borrowing is __________, ____.
2. The aggregate amount of the proposed Borrowing is $____________.
3. The Borrowing is to be comprised of $_________ of Base Rate and
$________ of LIBOR Rate Loans.
4. The duration of the Interest Period for the LIBOR Rate Loans,
if any, included in the Borrowing shall be _____ months.
The undersigned hereby certifies that the following statements are true
on the date hereof, and will be true on the date of the proposed Borrowing,
before and after giving effect thereto and to the application of the proceeds
therefrom:
(a) The representations and warranties of the Borrower
contained in the Loan and Security Agreement are true and correct as though made
on and as of such date;
(b) No Default or Event of Default has occurred and is
continuing, or would result from such proposed Borrowing; and
(c) The proposed Borrowing will not cause Availability to be
less than $25,000,000 [alternatively: because there is no continuing Event of
Default and the Borrower's Fixed Charge Coverage Ratio, as shown in the required
computation accompanying the Borrower's most recent monthly financial statements
required by Section 7.2(b) of the Loan Agreement, was greater than 1.0 to 1.0,
to be less than zero] or the Aggregate Revolver Outstandings to exceed the
combined Commitments of the Lenders.
1
101
WEIRTON STEEL CORPORATION
By:________________________________
Name:
Title:
2
102
EXHIBIT E
NOTICE OF CONVERSION/CONTINUATION
Date: __________, _____
To: Bank of America, National Association, as Agent for the Lenders to the
Loan and Security Agreement dated as of November 17, 1999 (as extended,
renewed, amended or restated from time to time, the "Loan and Security
Agreement") among Weirton Steel Corporation, certain Lenders which are
signatories thereto and Bank of America, National Association, as Agent
Ladies and Gentlemen:
The undersigned, Weirton Steel Corporation (the "Borrower"), refers to
the Loan and Security Agreement, the terms defined therein being used herein as
therein defined, and hereby gives you notice irrevocably of the [conversion]
[continuation] of the Loans specified herein, that:
1. The Conversion/Continuation Date is _________, ____.
2. The aggregate amount of the Loans to be [converted] [continued]
is $_________.
3. The Loans are to be [converted into] [continued as] [LIBOR Rate]
[Base Rate] Loans.
4. The duration of the Interest Period for the LIBOR Rate Loans
included in the [conversion] [continuation] shall be _____ months.
The undersigned hereby certifies that the following statements are true
on the date hereof, and will be true on the proposed Conversion/Continuation
Date, before and after giving effect thereto and to the application of the
proceeds therefrom:
(a) The representations and warranties of the Borrower
contained in the Loan and Security Agreement are true and correct as though made
on and as of such date;
(b) No Default or Event of Default has occurred and is
continuing, or would result from such proposed [conversion] [continuation]; and
(c) The proposed conversion-continuation will not cause
Availability to be less than $25,000,000 [alternatively: because there is no
continuing Event of Default and the Borrower's Fixed Charge Coverage Ratio, as
shown in the required computation accompanying the Borrower's most recent
monthly financial statements required by Section 7.2(b) of the Loan Agreement,
was greater than 1.0 to 1.0, to be less than zero] or the Aggregate Revolver
Outstandings to exceed the combined Commitments of the Lenders.
1
103
WEIRTON STEEL CORPORATION
By:________________________________
Name:
Title:
2
104
EXHIBIT F
[FORM OF] ASSIGNMENT AND ACCEPTANCE AGREEMENT
This ASSIGNMENT AND ACCEPTANCE AGREEMENT (this "Assignment and
Acceptance") dated as of ____________________, _____ is made between
______________________________ (the "Assignor") and __________________________
(the "Assignee").
RECITALS
WHEREAS, the Assignor is party to that certain Loan and Security
Agreement dated as of November 17, 1999 (as amended, amended and restated,
modified, supplemented or renewed, the "Credit Agreement") among Weirton Steel
Corporation, a Delaware corporation (the "Borrower"), the several financial
institutions from time to time party thereto (including the Assignor, the
"Lenders"), and Bank of America, National Association, as agent for the Lenders
(the "Agent"). Any terms defined in the Credit Agreement and not defined in this
Assignment and Acceptance are used herein as defined in the Credit Agreement;
WHEREAS, as provided under the Credit Agreement, the Assignor has
committed to making Loans (the "Committed Loans") to the Borrower in an
aggregate amount not to exceed $__________ (the "Commitment");
WHEREAS, the Assignor has made Committed Loans in the aggregate
principal amount of $__________ to the Borrower
WHEREAS, [the Assignor has acquired a participation in its pro rata
share of the Lenders' liabilities under Letters of Credit in an aggregate
principal amount of $____________ (the "L/C Obligations")] [no Letters of Credit
are outstanding under the Credit Agreement]; and
WHEREAS, the Assignor wishes to assign to the Assignee [part of the]
[all] rights and obligations of the Assignor under the Credit Agreement in
respect of its Commitment, together with a corresponding portion of each of its
outstanding Committed Loans and L/C Obligations, in an amount equal to
$__________ (the "Assigned Amount") on the terms and subject to the conditions
set forth herein and the Assignee wishes to accept assignment of such rights and
to assume such obligations from the Assignor on such terms and subject to such
conditions;
NOW, THEREFORE, in consideration of the foregoing and the mutual
agreements contained herein, the parties hereto agree as follows:
1. Assignment and Acceptance.
(a) Subject to the terms and conditions of this Assignment and
Acceptance, (i) the Assignor hereby sells, transfers and assigns to the
Assignee, and (ii) the Assignee hereby purchases, assumes and undertakes from
the Assignor, without recourse and without representation or warranty (except as
provided in this Assignment and Acceptance) __% (the "Assignee's Percentage
Share") of (A) the Commitment, the Committed Loans and the L/C
1
105
Obligations of the Assignor and (B) all related rights, benefits, obligations,
liabilities and indemnities of the Assignor under and in connection with the
Credit Agreement and the Loan Documents.
(b) With effect on and after the Effective Date (as defined in
Section 5 hereof), the Assignee shall be a party to the Credit Agreement and
succeed to all of the rights and be obligated to perform all of the obligations
of a Lender under the Credit Agreement, including the requirements concerning
confidentiality and the payment of indemnification, with a Commitment in an
amount equal to the Assigned Amount. The Assignee 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. It is the
intent of the parties hereto that the Commitment of the Assignor shall, as of
the Effective Date, be reduced by an amount equal to the Assigned Amount and the
Assignor shall relinquish its rights and be released from its obligations under
the Credit Agreement to the extent such obligations have been assumed by the
Assignee; provided, however, the Assignor shall not relinquish its rights under
Section 15.11 (Indemnity of the Agent and the Lenders by the Borrower) and
Section 15.12 (Limitation of Liability) of the Credit Agreement to the extent
such rights relate to the time prior to the Effective Date.
(c) After giving effect to the assignment and assumption set
forth herein, on the Effective Date the Assignee's Commitment will be
$__________.
(d) After giving effect to the assignment and assumption set
forth herein, on the Effective Date the Assignor's Commitment will be
$__________.
2. Payments.
(a) As consideration for the sale, assignment and transfer
contemplated in Section 1 hereof, the Assignee shall pay to the Assignor on the
Effective Date in immediately available funds an amount equal to $__________,
representing the Assignee's Pro Rata Share of the principal amount of all
Committed Loans.
(b) The Assignee further agrees to pay to the Agent a
processing fee in the amount specified in Section 13.4(a) of the Credit
Agreement.
3. Reallocation of Payments.
Any interest, fees and other payments accrued to the Effective Date with respect
to the Commitment, and Committed Loans and L/C Obligations shall be for the
account of the Assignor. Any interest, fees and other payments accrued on and
after the Effective Date with respect to the Assigned Amount shall be for the
account of the Assignee. Each of the Assignor and the Assignee agrees that it
will hold in trust for the other party any interest, fees and other amounts
which it may receive to which the other party is entitled pursuant to the
preceding sentence and pay to the other party any such amounts which it may
receive promptly upon receipt.
2
106
4. Independent Credit Decision.
The Assignee (a) acknowledges that it has received a copy of the Credit
Agreement and the Schedules and Exhibits thereto, together with copies of the
most recent financial statements of the Borrower, and such other documents and
information as it has deemed appropriate to make its own credit and legal
analysis and decision to enter into this Assignment and Acceptance; and (b)
agrees that it will, independently and without reliance upon the Assignor, the
Agent or any other Lender and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit and legal
decisions in taking or not taking action under the Credit Agreement.
5. Effective Date; Notices.
(a) As between the Assignor and the Assignee, the effective
date for this Assignment and Acceptance shall be __________, _____ (the
"Effective Date"); provided that the following conditions precedent have been
satisfied on or before the Effective Date:
(i) this Assignment and Acceptance shall be executed and
delivered by the Assignor and the Assignee;
[(ii) the consent of the Agent required for an effective
assignment of the Assigned Amount by the Assignor to the Assignee shall have
been duly obtained and shall be in full force and effect as of the Effective
Date;]
(iii) the Assignee shall pay to the Assignor all amounts
due to the Assignor under this Assignment and Acceptance;
[(iv) the Assignee shall have complied with Section
(____) of the Credit Agreement (if applicable);]
(v) the processing fee referred to in Section 2(b)
hereof and in Section 13.4(a) of the Credit Agreement shall have been paid to
the Agent; and
(b) Promptly following the execution of this Assignment and
Acceptance, the Assignor shall deliver to the Borrower and the Agent for
acknowledgment by the Agent, a Notice of Assignment in the form attached hereto
as Schedule 1.
6. [Agent. [INCLUDE ONLY IF ASSIGNOR IS AGENT]
(a) The Assignee hereby appoints and authorizes the Assignor
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 Lenders pursuant to the
terms of the Credit Agreement.
(b) The Assignee shall assume no duties or obligations held by
the Assignor in its capacity as Agent under the Credit Agreement.]
7. Withholding Tax.
The Assignee (a) represents and warrants to the Lender, the Agent and the
Borrower that under applicable law and treaties no tax will be required to be
withheld by the Lender with respect to any payments to be made to the Assignee
hereunder, (b) agrees to furnish (if it is organized under the laws of any
jurisdiction other than the United States or any State thereof) to the Agent
3
107
and the Borrower prior to the time that the Agent or Borrower is required to
make any payment of principal, interest or fees hereunder, duplicate executed
originals of either U.S. Internal Revenue Service Form 4224 or U.S. Internal
Revenue Service Form 1001 (wherein the Assignee claims entitlement to the
benefits of a tax treaty that provides for a complete exemption from U.S.
federal income withholding tax on all payments hereunder) and agrees to provide
new Forms 4224 or 1001 upon the expiration of any previously delivered form or
comparable statements in accordance with applicable U.S. law and regulations and
amendments thereto, duly executed and completed by the Assignee, and (c) agrees
to comply with all applicable U.S. laws and regulations with regard to such
withholding tax exemption.
8. Representations and Warranties.
(a) The Assignor represents and warrants that (i) 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 Lien or other adverse claim; (ii) it
is duly organized and existing and it has the full power and authority to take,
and has taken, all action necessary to execute and deliver this Assignment and
Acceptance and any other documents required or permitted to be executed or
delivered by it in connection with this Assignment and Acceptance and to fulfill
its obligations hereunder; (iii) no notices to, or consents, authorizations or
approvals of, any Person are required (other than any already given or obtained)
for its due execution, delivery and performance of this Assignment and
Acceptance, and apart from any agreements or undertakings or filings required by
the Credit Agreement, no further action by, or notice to, or filing with, any
Person is required of it for such execution, delivery or performance; and (iv)
this Assignment and Acceptance has been duly executed and delivered by it and
constitutes the legal, valid and binding obligation of the Assignor, enforceable
against the Assignor in accordance with the terms hereof, subject, as to
enforcement, to bankruptcy, insolvency, moratorium, reorganization and other
laws of general application relating to or affecting creditors' rights and to
general equitable principles.
(b) The Assignor makes no representation or warranty and
assumes no responsibility with respect to any statements, warranties or
representations made in or in connection with the Credit Agreement or the
execution, legality, validity, enforceability, genuineness, sufficiency or value
of the Credit Agreement or any other instrument or document furnished pursuant
thereto. The Assignor makes no representation or warranty in connection with,
and assumes no responsibility with respect to, the solvency, financial condition
or statements of the Borrower, or the performance or observance by the Borrower,
of any of its respective obligations under the Credit Agreement or any other
instrument or document furnished in connection therewith.
(c) The Assignee represents and warrants that (i) it is duly
organized and existing and it has full power and authority to take, and has
taken, all action necessary to execute and deliver this Assignment and
Acceptance and any other documents required or permitted to be executed or
delivered by it in connection with this Assignment and Acceptance, and to
fulfill its obligations hereunder; (ii) no notices to, or consents,
authorizations or approvals of, any Person are required (other than any already
given or obtained) for its due execution, delivery and performance of this
Assignment and Acceptance; and apart from any agreements or undertakings or
filings required by the Credit Agreement, no further action by, or notice to, or
filing with, any Person is required of it for such execution, delivery or
performance; and (iii) this Assignment
4
108
and Acceptance has been duly executed and delivered by it and constitutes the
legal, valid and binding obligation of the Assignee, enforceable against the
Assignee in accordance with the terms hereof, subject, as to enforcement, to
bankruptcy, insolvency, moratorium, reorganization and other laws of general
application relating to or affecting creditors' rights and to general equitable
principles.
9. Further Assurances.
The Assignor and the Assignee each hereby agree to execute and deliver such
other instruments, and take such other action, as either party may reasonably
request in connection with the transactions contemplated by this Assignment and
Acceptance, including the delivery of any notices or other documents or
instruments to the Borrower or the Agent, which may be required in connection
with the assignment and assumption contemplated hereby.
10. Miscellaneous.
(a) Any amendment or waiver of any provision of this
Assignment and Acceptance shall be in writing and signed by the parties hereto.
No failure or delay by either party hereto in exercising any right, power or
privilege hereunder shall operate as a waiver thereof and any waiver of any
breach of the provisions of this Assignment and Acceptance shall be without
prejudice to any rights with respect to any other or further breach thereof.
(b) All payments made hereunder shall be made without any
set-off or counterclaim.
(c) The Assignor and the Assignee shall each pay its own costs
and expenses incurred in connection with the negotiation, preparation, execution
and performance of this Assignment and Acceptance. (d) This Assignment and
Acceptance may be executed in any number of counterparts and all of such
counterparts taken together shall be deemed to constitute one and the same
instrument.
(e) THIS ASSIGNMENT AND ACCEPTANCE SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF ILLINOIS. The Assignor and
the Assignee each irrevocably submits to the non-exclusive jurisdiction of any
State or Federal court sitting in Illinois over any suit, action or proceeding
arising out of or relating to this Assignment and Acceptance and irrevocably
agrees that all claims in respect of such action or proceeding may be heard and
determined in such Illinois State or Federal court. Each party to this
Assignment and Acceptance hereby irrevocably waives, to the fullest extent it
may effectively do so, the defense of an inconvenient forum to the maintenance
of such action or proceeding.
(f) THE ASSIGNOR AND THE ASSIGNEE EACH HEREBY KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHTS THEY MAY HAVE TO A TRIAL BY JURY
IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN
CONNECTION WITH THIS ASSIGNMENT AND ACCEPTANCE, THE CREDIT AGREEMENT, ANY
RELATED
5
109
DOCUMENTS AND AGREEMENTS OR ANY COURSE OF CONDUCT, COURSE OF DEALING, OR
STATEMENTS (WHETHER ORAL OR WRITTEN).
IN WITNESS WHEREOF, the Assignor and the Assignee have caused this Assignment
and Acceptance to be executed and delivered by their duly authorized officers as
of the date first above written.
[ASSIGNOR]
By: ______________________________
Name:
Title:
Address:
[ASSIGNEE]
By: ______________________________
Name:
Title:
Address:
6
110
SCHEDULE 1
NOTICE OF ASSIGNMENT AND ACCEPTANCE
_______________, ____
Bank of America, National Association
▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn:
Re: [Name and Address of Borrower]
Ladies and Gentlemen:
We refer to the Loan and Security Agreement dated as of November 17,
1999 (as amended, amended and restated, modified, supplemented or renewed from
time to time the "Credit Agreement") among Weirton Steel Corporation (the
"Borrower"), the Lenders referred to therein and Bank of America, National
Association, as agent for the Lenders (the "Agent"). Terms defined in the Credit
Agreement are used herein as therein defined.
1. We hereby give you notice of, and request your consent to, the
assignment by __________________ (the "Assignor") to _______________ (the
"Assignee") of _____% of the right, title and interest of the Assignor in and to
the Credit Agreement (including, without limitation, the right, title and
interest of the Assignor in and to the Commitments of the Assignor, all
outstanding Loans made by the Assignor and the Assignor's participation in the
Letters of Credit pursuant to the Assignment and Acceptance Agreement attached
hereto (the "Assignment and Acceptance"). We understand and agree that the
Assignor's Commitment, as of ________, ____, is $ ___________, the aggregate
amount of its outstanding Loans is $_____________, and its participation in L/C
Obligations is $____________.
2. The Assignee agrees that, upon receiving the consent of the Agent
and, if applicable, the Borrower to such assignment, the Assignee will be bound
by the terms of the Credit Agreement as fully and to the same extent as if the
Assignee were the Lender originally holding such interest in the Credit
Agreement.
3. The following administrative details apply to the Assignee:
(A) Notice Address:
Assignee name:
Address:
Attention:
Telephone: (___)
Telecopier: (___)
Telex (Answerback):
7
111
(B) Payment Instructions:
Account No.:
At:
Reference:
Attention:
4. You are entitled to rely upon the representations, warranties and
covenants of each of the Assignor and Assignee contained in the Assignment and
Acceptance.
IN WITNESS WHEREOF, the Assignor and the Assignee have caused this
Notice of Assignment and Acceptance to be executed by their respective duly
authorized officials, officers or agents as of the date first above mentioned.
Very truly yours,
[NAME OF ASSIGNOR]
By: ______________________________
Name:
Title:
[NAME OF ASSIGNEE]
By: ______________________________
Name:
Title:
ACKNOWLEDGED AND ASSIGNMENT
CONSENTED TO:
BANK OF AMERICA, NATIONAL ASSOCIATION,
as Agent
By: ________________________________
Name:
Title:
8