1
EXHIBIT 10.1
$100,000,000
CREDIT AGREEMENT
dated as of December 16, 1997
among
ROUGE INDUSTRIES, INC.,
ROUGE STEEL COMPANY,
the financial institutions party hereto,
and
NBD BANK,
as Agent
2
TABLE OF CONTENTS
Page
SECTION 1. DEFINITIONS 1
Section 1.1 Definitions 1
Section 1.2 Terms Generally 14
SECTION 2. AMOUNT AND TERMS OF CREDIT FACILITIES 15
Section 2.1 Revolving Loans 15
Section 2.2 Swingline Loans 15
Section 2.3 Competitive Bid Loans 16
Section 2.4 Notice of Borrowing 20
Section 2.5 Disbursement of Funds 20
Section 2.6 Notes 21
Section 2.7 Interest 22
Section 2.8 Interest Periods 23
Section 2.9 Minimum Amount of LIBOR Loans 24
Section 2.10 Conversion or Continuation 24
Section 2.11 Voluntary Reduction of Commitments 25
Section 2.12 Voluntary Prepayments 25
Section 2.13 Mandatory Prepayments 25
Section 2.14 Application of Prepayments 25
Section 2.15 Method and Place of Payment 26
Section 2.16 Fees 26
Section 2.17 Interest Rate Unascertainable,
Increased Costs, Illegality 26
Section 2.18 Funding Losses 28
Section 2.19 Increased Capital 28
Section 2.20 Taxes 29
Section 2.21 Mitigation; Calculations 30
Section 2.22 Use of Proceeds 30
Section 2.23 Extension of Maturity Date 30
SECTION 2A. LETTERS OF CREDIT 31
Section 2A.1 Issuance of Letters of Credit 31
Section 2A.2 Participation in Letters of Credit 31
Section 2A.3 Reimbursement of Letter of Credit
Drawings 32
Section 2A.4 Letter of Credit Fee 33
Section 2A.5 Increased Costs, Illegality 33
SECTION 3. CONDITIONS PRECEDENT 34
Section 3.1 Conditions Precedent to Effectiveness 34
Section 3.2 Conditions Precedent to All Loans
and Issuance of Letters of Credit 36
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SECTION 4. REPRESENTATIONS AND WARRANTIES 37
Section 4.1 Corporate Status 37
Section 4.2 Corporate Power and Authority 38
Section 4.3 No Violation 38
Section 4.4 Litigation 38
Section 4.5 Financial Statements; Financial Condition; etc. 38
Section 4.6 Material Adverse Change 39
Section 4.7 Use of Proceeds; Margin Regulations 39
Section 4.8 Governmental Approvals 39
Section 4.9 Tax Returns and Payments 39 Section 4.10 ERISA 39
Section 4.11 Investment Company Act; Public Utility Holding Company
Act 40
Section 4.12 No Material Adverse Effect as of Closing Date 40
Section 4.13 Corporate Structure; Capitalization 40
Section 4.14 Environmental Matters 40
Section 4.15 Patents, Trademarks, etc. 41
Section 4.16 Ownership of Property 41
Section 4.17 No Default 41
Section 4.18 Licenses, etc. 41
Section 4.19 Compliance with Law 42
Section 4.20 No Burdensome Restrictions 42
Section 4.21 Property Rights, Services, etc. 42
SECTION 5. AFFIRMATIVE COVENANTS 42
Section 5.1 Information Covenants 42
Section 5.2 Books, Records and Inspections 46
Section 5.3 Maintenance of Insurance 46
Section 5.4 Taxes 46
Section 5.5 Corporate Franchises 46
Section 5.6 Compliance with Law 47
Section 5.7 Performance of Obligations 47
Section 5.8 Maintenance of Properties 47
Section 5.9 Environmental Matters 47
SECTION 6. NEGATIVE COVENANTS 48
Section 6.1 Financial Covenants 48
Section 6.2 Liens 48
Section 6.3 Restriction on Fundamental Changes 50
Section 6.4 Sale of Assets 51
Section 6.5 Dividends 51
Section 6.6 Advances, Investments and Loans 52
Section 6.7 Transactions with Affiliates 52
Section 6.8 Changes in Business 53
Section 6.9 Certain Restrictions 53
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Section 6.10 Fiscal Year; Fiscal Quarter 53
Section 6.11 Plans 53
SECTION 7. EVENTS OF DEFAULT 53
Section 7.1 Events of Default 53
Section 7.2 Rights and Remedies 55
SECTION 8. THE AGENT 56
Section 8.1 Appointment 56
Section 8.2 Delegation of Duties 56
Section 8.3 Exculpatory Provisions 57
Section 8.4 Reliance by the Agent 57
Section 8.5 Notice of Default 57
Section 8.6 Non-Reliance on the Agent and Other Banks 58
Section 8.7 Indemnification 58
Section 8.8 The Agent in Its Respective Individual Capacity 58
Section 8.9 Successor Agent 59
SECTION 9. MISCELLANEOUS 59
Section 9.1 Payment of Expenses, Indemnity, etc. 59
Section 9.2 Right of Setoff 60
Section 9.3 Notices 61
Section 9.4 Successors and Assigns; Participations; Assignments 61
Section 9.5 Amendments and Waivers 63
Section 9.6 No Waiver; Remedies Cumulative 63
Section 9.7 Sharing of Payments 63
Section 9.8 Governing Law; Submission to Jurisdiction;
Appointment of Agent 64
Section 9.9 Counterparts 64
Section 9.10 Headings Descriptive 64
Section 9.11 Marshalling; Recapture 64
Section 9.12 Severability 65
Section 9.13 Survival 65
Section 9.14 Domicile of Loans 65
Section 9.15 Limitation of Liability 65
Section 9.16 Waiver of Trial by Jury 65
Section 9.17 Confidentiality 65
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Annex 1 Revolving Loan Commitments
Exhibit A-1 Form of Revolving Note
Exhibit A-2 Form of Competitive Bid Note
Exhibit A-3 Form of Swingline Note
Exhibit B Form of Competitive Bid Quote Request
Exhibit C Form of Invitation for Competitive Bid Quotes
Exhibit D Form of Competitive Bid Quote
Exhibit E Form of Notice of Acceptance/Non Acceptance
Exhibit F Form of Request for Extension of Maturity Date
Exhibit G Form of Letter of Credit Request
Exhibit H-1 Form of Opinion of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Exhibit H-2 Form of Opinion of Dickinson, Wright, Moon, Van Dusen and ▇▇▇▇▇▇▇
Exhibit I Form of Transfer Supplement
Exhibit J Form of Holdings Guaranty
Schedule 4.4 Litigation
Schedule 4.13 Capitalization
Schedule 4.14 Environmental Matters
Schedule 5.1(h) SEC Filings
Schedule 5.3 Insurance
Schedule 6.2 Liens
Schedule 6.3(e) Subsidiaries
Schedule 6.4 Permitted Asset Sales
Schedule 6.7 Transactions with Affiliates
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CREDIT AGREEMENT, dated as of December 16, 1997, among ROUGE
INDUSTRIES, INC., a Delaware corporation ("Holdings"), ROUGE STEEL COMPANY, a
Delaware corporation (the "Borrower"), the financial institutions which are or
may become a party hereto (individually a "Bank" and collectively the "Banks"),
and NBD BANK, in its capacity as agent for the Banks.
Holdings and the Borrower have requested that the Banks and the
Swingline Lender extend credit to the Borrower in order to enable the Borrower
to borrow, on the terms and subject to the conditions set forth in this
Agreement, Revolving Loans in an aggregate principal amount not to exceed, when
aggregated with outstanding Competitive Bid Loans, outstanding Swingline Loans
and Letter of Credit Outstandings, $100,000,000 at any time outstanding,
Competitive Bid Loans in an aggregate principal amount not to exceed $50,000,000
at any time outstanding, Swingline Loans not to exceed an aggregate principal
amount equal to $10,000,000 at any time outstanding and for the Issuing Bank to
issue Letters of Credit in an aggregate face amount not to exceed $10,000,000 at
any time outstanding.
Accordingly, the parties hereto agree as follows:
SECTION 1. DEFINITIONS
Section 1.1 Definitions. As used herein, the following terms
shall have the meanings herein specified unless the context otherwise
requires. Defined terms in this Agreement shall include in the singular number
the plural and in the plural number the singular.
"Absolute Rate Auction" shall mean a solicitation of Competitive Bid
Quotes setting Competitive Bid Absolute Rates pursuant to Section 2.3.
"Affiliate" shall mean, with respect to any Person, any other Person
directly or indirectly controlling (including but not limited to all directors
and executive officers of such Person), controlled by, or under direct or
indirect common control with such Person. A Person shall be deemed to control a
corporation if such Person possesses, directly or indirectly, the power to (x)
vote 5% or more of the securities having ordinary voting power for the election
of directors of such corporation or (y) direct or cause the direction of the
management and policies of such corporation, whether through the ownership of
voting securities, by contract or otherwise, provided, that no Bank shall be
deemed an Affiliate of the Borrower.
"Agent" shall mean NBD Bank acting in its capacity as agent for the
Banks and any successor agent appointed in accordance with Section 8.9.
"Agent's Office" shall mean the office of the Agent located at ▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, telephone number: (▇▇▇) ▇▇▇-▇▇▇▇;
facsimile
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number: (▇▇▇) ▇▇▇-▇▇▇▇ Attention: Michigan Banking Division or such other office
as the Agent may hereafter designate in writing as such to the other parties
hereto.
"Agreement" shall mean this Credit Agreement as the same may from time
to time hereafter be amended, modified, restated or otherwise supplemented.
"Annual Increase" shall mean, for any fiscal year of Holdings, an
amount equal to 50% of Net Income (but only if positive) for such fiscal year;
provided, however, that the Annual Increase for the fiscal year of Holdings
ending December 31, 1997 shall be an amount equal to 50% of the Net Income (but
only if positive) for the fiscal quarter ending December 31, 1997.
"Applicable Margin" shall mean (i) with respect to Base Rate Loans, 0%
and (ii) with respect to LIBOR Loans, the Letter of Credit fees payable under
Section 2A.4(b) and the facility fees payable under Section 2.16, for the period
from the Closing Date to, but not including, the initial Margin Adjustment Date,
0.20%, and thereafter the applicable margin set forth opposite the Debt to
Capitalization Ratio set forth below:
Debt to Capitalization
Ratio-Applicable Margin for
LIBOR Loans and
Letter of Credit Fees Applicable Margin
for Facility Fees--
Greater than 0.35-
0.40%-
0.20%--
Equal to or less than 0.35 but greater than 0.25-
0.30%-
0.15%--
Equal to or less than 0.25-
0.20%-
0.10%--
For purposes of determining the Applicable Margin, the Debt to
Capitalization Ratio will be determined at the end of each fiscal quarter of the
Borrower (a "Margin Determination Date"). Such Applicable Margin determined on a
Margin Determination Date will be effective (a "Margin Adjustment Date")
commencing on the fifth day after Agent's receipt of the financial statements
delivered pursuant to Section 5.1(a) or (b) and the compliance certificate
executed and delivered by an Authorized Officer pursuant to Section 5.1(e)
certifying the Debt to Capitalization Ratio for the previous fiscal quarter, and
shall be effective with respect to all LIBOR Loans made, continued or converted
on or after such Margin Adjustment Date and shall be effective with respect to
all Letter of Credit fees payable under Section 2A.4(b) and facility fees
payable under Section 2.16 on or after such Margin Adjustment Date.
Notwithstanding the foregoing,
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if a lower Applicable Margin would be effective on any Margin Adjustment Date
and a Default or Event of Default exists on such date or Holdings and/or the
Borrower has failed to deliver the financial statements and compliance
certificate described in Section 5.1(a) or (b) and 5.1(e), respectively, with
respect to a fiscal quarter or fiscal year in accordance with the provisions
thereof, then such Applicable Margin shall not be so reduced until such Default
or Event of Default shall be cured or waived or Holdings and/or the Borrower
shall have delivered such financial statements and compliance certificate in
accordance with the provisions of Section 5.1(a) or (b) and 5.1(e), as the case
may be.
"Authorized Officer" shall mean, with respect to any Person, the Chief
Executive Officer, the President, any Vice President, the Chief Financial
Officer and, with respect to financial matters, the Chief Financial Officer, in
each case whose name appears on an incumbency certificate of such Person
delivered to the Agent.
"Bank" and "Banks" shall have the meaning provided in the preamble of
this Agreement.
"Bankruptcy Code" shall mean Title 11 of the United States Code
entitled "Bankruptcy", as amended from time to time, and any successor statute
or statutes.
"Base Rate" shall mean, at any particular date, the higher of (a) the
Prime Rate and (b) the sum of 1/2 of 1% per annum and the Federal Funds Rate.
"Base Rate Loans" shall mean Revolving Loans made and/or being
maintained at a rate of interest based upon the Base Rate.
"Borrower" shall have the meaning provided in the first paragraph of
this Agreement.
"Borrowing" shall mean the incurrence of one Type of Loan of one
Facility from all the Banks having Revolving Loan Commitments for such Type
of Loan on a given date (or resulting from conversions or continuations on
a given date), having in the case of LIBOR Loans the same Interest Period.
"Business Day" shall mean (i) for all purposes other than as covered
by clause (ii) below, any day excluding Saturday, Sunday and any day which
shall be in Detroit, Michigan a legal holiday or a day on which banking
institutions are authorized or required by law or other government actions to
close and (ii) with respect to all notices and determinations in connection
with, conversions and continuations of, and payments of principal and interest
on, LIBOR Loans, any day which is a Business Day described in clause (i) and
which is also a day for trading by and between banks for U.S. dollar deposits
in the relevant interbank LIBOR market.
"Capitalized Lease" shall mean (a) any lease of property, real or
personal, the
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obligations under which are capitalized on the consolidated balance sheet of
Holdings and (b) any other such lease to the extent that the then present value
of the minimum rental commitment thereunder should, in accordance with GAAP, be
capitalized on a balance sheet of the lessee.
"Cash Equivalents" shall mean (i) securities issued or directly and
fully guaranteed or insured by the United States of America or any agency or
instrumentality thereof (provided that the full faith and credit of the United
States of America is pledged in support thereof), (ii) time deposits and
certificates of deposit of any Bank or any domestic commercial bank of
recognized standing having capital and surplus in excess of $500,000,000 with
maturities of not more than 90 days from the date of acquisition thereof, (iii)
money market funds, (iv) fully secured repurchase obligations for underlying
securities of the types described in clause (i) entered into with any bank
meeting the qualifications specified in clause (ii) above or entered into with
broker-dealers which have a short-term credit rating of at least A-1 or the
equivalent by S&P, at least P-1 or the equivalent by ▇▇▇▇▇'▇ or at least TBW-1
or the equivalent by Thomson BankWatch, (v) commercial paper issued by any
financial institution or corporation which in each case is rated at least A-2 or
the equivalent thereof by S&P or at least P-2 or the equivalent thereof by
▇▇▇▇▇'▇ and in each case, maturing within 270 days after the date of
acquisition; (vi) commercial paper issued by corporations rated at least A-3 or
the equivalent by S&P or at least P-3 or the equivalent by ▇▇▇▇▇'▇ and in any
case with remaining term of not more than 91 days; (vii) medium term notes
issued by any domestic corporation which have been rated at least BBB or the
equivalent by S&P with a remaining term of not more than 540 days; (viii)
corporate bonds issued by any domestic corporation which have been rated at
least BBB or the equivalent by S&P with a remaining term of not more than 540
days; (ix) floating rate notes issued by an agency of the United States
Government and by domestic corporations rated at least A-2 or the equivalent
thereof by S&P or P-2 or the equivalent thereof by ▇▇▇▇▇'▇ and in each case
having a remaining maturity within 540 days of the acquisition thereof; (x)
preferred stock issued by corporations rated at least BBB or the equivalent by
S&P and in each case having a remaining maturity of not more than 90 days; (xi)
auction rate preferred notes issued by corporations rated at least BBB or the
equivalent by S&P and in each case having a remaining maturity of not more than
91 days; (xii) taxable auction rate notes issued by domestic corporations or
banks meeting the qualifications specified in clause (ii) above rated at least
BBB or the equivalent by S&P and in each case having a remaining maturity of not
more than 91 days; and (xiii) municipal bonds issued by municipalities of the
United States maturing no later than one year after the acquisition thereof.
"Change in Control" shall mean an occurrence in which (a) any person
or group (within the meaning of Rule 13d-5 of the Securities and Exchange Act of
1934, as in effect on the date hereof) other than ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ shall own,
directly or indirectly, beneficially or of record, shares representing more than
35% of the aggregate ordinary voting power represented by the issued and
outstanding capital stock of Holdings; or (b) Holdings shall cease to own,
directly or indirectly, beneficially and of record, 100%
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of the issued and outstanding common stock of the Borrower.
"Closing Date" shall mean December 16, 1997.
"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time, and any successor statute.
"Competitive Bid Absolute Rate" shall have the meaning provided in
Section 2.3(d).
"Competitive Bid Absolute Rate Loan" shall mean a loan made or to be
made by a Bank pursuant to an Absolute Rate Auction.
"Competitive Bid LIBOR Loan" shall mean a loan made or to be made by a
Bank pursuant to a LIBOR Auction.
"Competitive Bid Loans" shall have the meaning provided in Section
2.3, and shall include a Competitive Bid LIBOR Loan and a Competitive Bid
Absolute Rate Loan.
"Competitive Bid Margin" shall have the meaning set forth in Section
2.3(d).
"Competitive Bid Note" shall have the meaning provided in Section 2.6.
"Competitive Bid Quote" shall mean an offer, substantially in the form
of Exhibit D hereto, by any Bank to make a Competitive Bid Loan in accordance
with Section 2.3.
"Competitive Bid Quote Request" shall have the meaning provided in
Section 2.3(b).
"Contingent Obligation" as to any Person shall mean any obligation of
such Person guaranteeing or intended to guarantee any Indebtedness, leases,
dividends or other obligations ("primary obligations") of any other Person (the
"primary obligor") in any manner, whether directly or indirectly, including,
without limitation, any obligation of such Person, whether or not contingent,
(a) to purchase any such primary obligation or any property constituting direct
or indirect security therefor, (b) to advance or supply funds (i) for the
purchase or payment of any such primary obligation or (ii) to maintain working
capital or equity capital of the primary obligor or otherwise to maintain the
net worth or solvency of the primary obligor, (c) to purchase property,
securities or services primarily for the purpose of assuring the owner of any
such primary obligation of the ability of the primary obligor to make payment of
such primary obligation or (d) otherwise to assure or hold harmless the owner of
such primary obligation against loss in respect thereof; provided, however, that
the term Contingent Obligation shall not include endorsements of instruments for
deposit or collection in the ordinary course of business and, provided further,
that the Holdings Guaranty shall not be a Contingent Obligation for purposes of
calculating financial covenants to the extent that the
11
Indebtedness guaranteed thereby is otherwise accounted for under this Agreement.
The amount of any Contingent Obligation shall be deemed to be an amount equal to
the stated or determinable amount of the primary obligation in respect of which
such Contingent Obligation is made or, if not stated or determinable, the
reasonably anticipated maximum liability in respect thereof as determined by the
Borrower in good faith.
"Credit Exposure" shall have the meaning provided in Section 9.4(b).
"Debt to Capitalization Ratio" shall mean the ratio of Total Debt to
Total Capitalization.
"Default" shall mean any event, act or condition which with notice or
lapse of time, or both, would constitute an Event of Default.
"Default Rate" shall have the meaning provided in Section 2.7(e).
"Dividends" shall have the meaning provided in Section 6.5.
"Domestic Lending Office" shall mean, as to any Bank, the office of
such Bank designated as such on Annex I, or such other office designated by such
Bank from time to time by written notice to the Agent and the Borrower.
"Double Eagle" shall mean Double Eagle Steel Coating Company, a
Michigan partnership.
"EBIT" shall mean, for any period, the sum of (i) Net Income for such
period, plus (ii) Interest Expense for such period, plus (iii) to the extent
deducted in the calculation of Net Income for such period, taxes based on or
measured by income, plus (iv) extraordinary losses for such period, minus (v)
extraordinary gains for such period, minus (vi) non-cash credits for such
period, all determined in accordance with GAAP.
"Environmental Affiliate" shall mean, with respect to Holdings or any
of its Subsidiaries, any other Person whose liability for any Environmental
Claim Holdings or any such Subsidiary has retained, assumed or otherwise become
liable for (contingent or otherwise), either contractually or by operation of
law.
"Environmental Approvals" shall mean any permit, license, approval,
ruling, variance, exemption or other authorization required under applicable
Environmental Laws.
"Environmental Claim" shall mean, with respect to Holdings or any of
its Subsidiaries or any of their respective Environmental Affiliates, any
notice, claim or demand by any other Person alleging potential liability for
investigatory costs, cleanup costs, governmental response costs, natural
resources damages, property damages,
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personal injuries, fines or penalties arising out of, based on or resulting from
(a) the presence, or release into the environment, of any Material of
Environmental Concern at any location, whether or not owned by such Person or
(b) circumstances forming the basis of any violation, or alleged violation, of
any Environmental Law.
"Environmental Laws" shall mean all federal, state, local and foreign
laws and regulations relating to pollution or protection of human health or the
environment (including, without limitation, ambient or indoor air, surface
water, ground water, land surface or subsurface strata), including without
limitation, laws and regulations relating to emissions, discharges, releases or
threatened releases of Materials of Environmental Concern, or otherwise
relating to the manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling of Materials of Environmental Concern.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended from time to time. Section references to ERISA are to
ERISA, as in effect at the date of this Agreement and any subsequent
provisions of ERISA, amendatory thereof, supplemental thereto or substituted
therefor.
"ERISA Controlled Group" shall mean a group consisting of any ERISA
Person and all members of a controlled group of corporations and all
trades or businesses (whether or not incorporated) under common control
with such Person that, together with such Person, are treated as a
single employer under regulations of the PBGC. Notwithstanding the
foregoing, any liability of any member of the ERISA Controlled Group other
than Holdings, the Borrower or any of their respective Subsidiaries shall be
disregarded for all purposes of this Agreement to the extent that such
liability is not the joint and several liability of Holdings, the Borrower
or any of their respective Subsidiaries.
"ERISA Person" shall have the meaning set forth in Section 3(9) of
ERISA for the term "person."
"ERISA Plan" means (A) any Plan that (i) is not a Multiemployer Plan
and (ii) has Unfunded Benefit Liabilities in excess of $500,000 and (B) any Plan
that is a Multiemployer Plan.
"Eurocurrency Reserve Requirements" shall mean, with respect to each
day during an Interest Period for LIBOR Loans, that percentage (expressed
as a decimal) which is in effect on such day, as prescribed by the Federal
Reserve Board, for determining the maximum reserves (including, without
limitation, basic, supplemental, marginal and emergency reserves) for
eurocurrency funding (currently referred to as "Eurocurrency Liabilities" in
Regulation D) maintained by a member bank of the Federal Reserve System.
"Eveleth Mines" shall mean Eveleth Mines LLC, a Minnesota limited
liability
13
company doing business as EVTAC Mining.
"Event of Default" shall have the meaning provided in Section 7.
"Existing Credit Facility" shall mean the Amended and Restated Credit
Agreement, dated July 30, 1997, among Holdings, the Borrower, the financial
institutions party thereto and The Chase Manhattan Bank, as Agent, as the same
has been amended and is in effect, together with all "Loan Documents" as defined
therein and all loans, letters of credit and other obligations owing thereunder.
"Facility" shall mean the Revolving Loans, Competitive Bid Loans,
Swingline Loans and Letters of Credit.
"Federal Funds Rate" shall mean for any period, a fluctuating interest
rate per annum equal for each day during such period to the weighted average of
the rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers, as published for such day (or,
if such day is not a Business Day, for the next preceding Business Day) by the
Federal Reserve Bank of New York, or, if such rate is not so published for any
day which is a Business Day, the average of the quotations for such day on such
transactions received by the Agent from three Federal funds brokers of
recognized standing selected by it.
"Federal Reserve Board" shall mean the Board of Governors of the
Federal Reserve System as constituted from time to time.
"Fees" shall mean all amounts payable pursuant to Sections 2.16 and
2A.4.
"GAAP" shall mean generally accepted accounting principles in the
United States of America as in effect from time to time.
"Holdings" shall have the meaning provided in the preamble to this
Agreement.
"Holdings Guaranty" shall mean the Guaranty by Holdings in favor of
the Agent for the benefit of the Banks substantially in the form of Exhibit I
hereto.
"Indebtedness" shall mean with respect to any Person, without
duplication: (i) all obligations of such Person which in accordance with GAAP
would be shown on the balance sheet of such Person as a liability (including,
without limitation, obligations for borrowed money and for the deferred purchase
price of property or services, and obligations evidenced by bonds, debentures,
notes or other similar instruments); (ii) all rental obligations under leases
required to be capitalized under GAAP; (iii) all Contingent Obligations of such
Person (including, without limitation, obligations in respect of take-or-pay
contracts at the time Holdings, the Borrower or any other Subsidiary incurs, or
has reason to believe, that any payment obligation thereunder arises, or will
arise, as a result of Holdings', the Borrower's or such Subsidiary's failure,
14
or intended failure, to take the product or service intended to be provided
thereunder); (iv) Indebtedness of others secured by any Lien upon property owned
by such Person, whether or not assumed, but only to the extent of such
property's fair market value; (v) liabilities of such Person in respect of
unfunded vested benefits under any Plan; (vi) obligations in respect of bankers
acceptances; and (vii) all payment obligations of such Person under Interest
Rate Protection Agreements.
"Interest Coverage Ratio" shall mean, for any period, the ratio of EBIT
for such period to Interest Expense for such period.
"Interest Expense" shall mean, for any fiscal period of Holdings, the
total interest expense (including, without limitation, interest expense
attributable to Capitalized Leases in accordance with GAAP) of Holdings and its
consolidated Subsidiaries for such period determined in accordance with GAAP
consistently applied.
"Interest Period" shall have the meaning provided in Section 2.8.
"Interest Rate Protection Agreements" shall mean interest rate protection
agreements (including, without limitation, interest rate swaps, caps, floors,
collars, options and similar agreements) and currency swaps and similar
agreements.
"Invitation for Competitive Bid Quotes" shall mean a notice by the
Agent to the Banks soliciting Competitive Bid Quotes, substantially in the form
of Exhibit C hereto.
"Issuing Bank" shall mean NBD Bank.
"L/C Participant" shall mean each Bank in its capacity as a participant
in the Letters of Credit pursuant to Section 2A.
"Letter of Credit" shall mean a letter of credit (and any amendments
thereof) issued by, and subject to terms and conditions acceptable to, the
Issuing Bank on behalf of the Borrower, which letter of credit may be either a
documentary letter of credit or a standby letter of credit.
"Letter of Credit Outstandings" shall mean, at any time, the sum of (i)
the aggregate stated amount of all outstanding Letters of Credit plus (ii) the
aggregate amount of all drawings made under any Letter of Credit for which the
Issuing Bank has not received full reimbursement from the Borrower.
"Letter of Credit Request" has the meaning specified in Section 2A.1(c).
"LIBOR Auction" shall mean a solicitation of Competitive Bid Quotes
setting forth Competitive Bid Margins based on LIBOR pursuant to Section 2.3.
"LIBOR Base Rate" shall mean, with respect to an Interest Period for
LIBOR
15
Loans or Competitive Bid LIBOR Loans, the rate per annum (rounded upwards
to the nearest whole multiple of one-sixteenth of one percent) equal to the
offered quotation to first class banks in the interbank LIBOR market by NBD two
Business Days prior to the beginning of such Interest Period at or about 10:00
A.M., Detroit time, for delivery on the first day of such Interest Period for
the number of days comprised therein and in an amount substantially equal to the
amount of the LIBOR Loan or Competitive Bid LIBOR Loans of the Reference Banks
to be outstanding during such Interest Period.
"LIBOR Lending Office" shall mean, as to any Bank, the office of such
Bank designated as such on Annex I, or such other office designated by such Bank
from time to time by written notice to the Agent and the Borrower.
"LIBOR Loans" shall mean Revolving Loans made and/or being maintained
at a rate of interest based upon the LIBOR Rate.
"LIBOR Rate" shall mean with respect to each day during an Interest
Period for LIBOR Loans or Competitive Bid LIBOR Loans, a rate per annum
determined for such day in accordance with the following formula (rounded
upwards to the nearest whole multiple of 1/100th of one percent):
LIBOR Base Rate
1.00 - Eurocurrency Reserve Requirements
"Lien" shall mean any security interest, mortgage, pledge,
hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or
other), or preference, priority or other security interest of any kind or nature
whatsoever, including, without limitation, any conditional sale or other title
retention agreement, and any financing lease having substantially the same
effect as any of the foregoing.
"Loan Documents" shall mean this Agreement, the Notes, the Letters of
Credit, the Holdings Guaranty and any guaranty agreement executed and delivered
by a Subsidiary pursuant to Section 6.6(i) hereof, as each may be amended,
modified, restated and in effect from time to time.
"Loans" shall mean and include the Revolving Loans, the Competitive Bid
Loans and the Swingline Loans.
"Mandatory Borrowing" shall have the meaning provided in Section 2.2(b).
"Margin Adjustment Date" shall have the meaning provided in the
definition of Applicable Margin.
"Margin Determination Date" shall have the meaning provided in the
definition of Applicable Margin.
16
"Margin Stock" shall have the meaning provided such term in Regulation
U and Regulation G of the Federal Reserve Board.
"Material Adverse Effect" shall mean a material adverse effect upon (i)
the business, operations, properties, assets, condition (financial or otherwise)
or liabilities of the Borrower and its Subsidiaries, taken as a whole or
Holdings and its consolidated Subsidiaries, taken as a whole or (ii) the ability
of Holdings or the Borrower to perform, or of the Agent, or any of the Banks to
enforce, any of the Obligations.
"Materials of Environmental Concern" shall mean and include chemicals,
pollutants, contaminants, wastes, toxic substances, hazardous substances,
petroleum and petroleum products, coal, coke, coal tar and coal tar byproducts.
"Maturity Date" shall mean the date occurring on the fifth anniversary
of the Closing Date or such later date as established by Section 2.23.
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc.
"Multiemployer Plan" shall mean a Plan which is a "multiemployer plan"
as defined in Section 4001(a)(3) of ERISA.
"NBD" shall mean NBD Bank, a Michigan banking corporation.
"Net Income" shall mean for any period, the net income of Holdings, on
a consolidated basis, for such period, in each case taken as a single accounting
period and determined in accordance with GAAP consistently applied.
"Net Worth" shall mean, at any time, the total assets of Holdings, on a
consolidated basis, as determined in accordance with GAAP, less the total
liabilities of Holdings, on a consolidated basis, as determined in accordance
with GAAP.
"New JV" shall have the meaning set forth in Section 6.3(b) and shall
include each partnership and joint venture which was formed prior to the Closing
Date.
"Non-Recourse Debt" of any Person shall mean Indebtedness of such
Person for which the sole legal recourse for the collection of such Indebtedness
is solely the property or assets identified in the instruments evidencing or
securing such Indebtedness, provided such property or assets were acquired or
constructed with the proceeds of such Indebtedness and there is no recourse to
any other asset or property of such Person or any other Person.
"Notes" shall mean and include each Revolving Note, each Swingline Note
and each Competitive Bid Note.
"Notice of Acceptance/Non-Acceptance" shall have the meaning provided in
17
Section 2.3(f).
"Notice of Borrowing" shall have the meaning provided in Section 2.4.
"Notice of Conversion or Continuation" shall have the meaning provided in
Section 2.10.
"Obligations" shall mean all obligations, liabilities and indebtedness
of every nature of Holdings or the Borrower from time to time owing to the
Agent, the Issuing Bank, any Bank or any L/C Participant arising under or in
connection with this Agreement or any other Loan Document.
"Participant" shall have the meaning provided in Section 9.4(b).
"Payment Date" shall mean the last day of each March, June, September
and December of each year.
"PBGC" shall mean the Pension Benefit Guaranty Corporation established
under ERISA, or any successor thereto.
"Person" shall mean and include any individual, partnership, joint
venture, firm, corporation, association, trust or other enterprise or any
government or political subdivision or agency, department or instrumentality
thereof.
"Plan" shall mean any employee benefit plan covered by Title IV of
ERISA, the funding requirements of which:
(i) were the singular or joint (with a member of its ERISA
Controlled Group) responsibility of the Borrower or a member of its ERISA
Controlled Group at any time within the five years immediately preceding the
date hereof,
(ii) are currently the singular or joint (with a member of its ERISA
Controlled Group) responsibility of the Borrower or a member of its ERISA
Controlled Group, or
(iii) hereafter become the responsibility of the Borrower or a member
of its ERISA Controlled Group,
including any such plans as may have been, or may hereafter be, terminated for
whatever reason.
"Plan Assets" shall mean the fair market value of all Plan assets
allocable to all benefit liabilities under all Plans, as determined as of the
then most recent valuation date for such Plan (on the basis of assumptions used
in the most recent actuarial valuation required in connection with Internal
Revenue Service Form 5500).
18
"Plant" shall mean the Borrower's steel facility and Double Eagle's
electrogalvanizing facility located at Dearborn, Michigan.
"Power Plant" shall have the meaning given to such term in the
Powerhouse Joint Operating Agreement, dated as of December 15, 1989, between
Ford Motor Company, a Delaware corporation, and the Borrower, as amended and in
effect from time to time.
"Prime Rate" shall mean the rate of interest from time to time
announced by NBD as its "prime rate" (it being acknowledged that such announced
rate may not necessarily be the lowest rate charged by NBD to any of its
customers), which Prime Rate shall change simultaneously with any change in such
announced rate.
"Pro Rata Share" as to any Bank shall mean a fraction (expressed as a
percentage), the numerator of which shall be the aggregate amount of such Bank's
Revolving Loan Commitment and the denominator of which shall be the Total
Commitment.
"Purchasing Banks" shall have the meaning provided in Section 9.4(c).
"Regulation D" shall mean Regulation D of the Federal Reserve Board as
from time to time in effect and any successor to all or any portion thereof.
"Reportable Event" shall have the meaning set forth in Section 4043(b)
of ERISA (other than a Reportable Event as to which the provision of 30 days'
notice to the PBGC is waived under applicable regulations), or is the occurrence
of any of the events described in Section 4063(a) of ERISA.
"Required Banks" shall mean Banks holding more than 50% of the Total
Commitments, provided, however, that if the Commitments shall have been
terminated in full, "Required Banks" shall mean Banks holding more than 50% of
the then aggregate unpaid principal amount of the Loans.
"Revolving Loan Commitment" shall mean on any date, for any Bank, the
amount set forth opposite such Bank's name on Annex I hereto under the heading
"Revolving Loan Commitment," in the column pertaining to such date as such
amount may be reduced from time to time pursuant to Sections 2.11 and 9.4.
"Revolving Loans" shall have the meaning provided in Section 2.1(a).
"Revolving Notes" shall have the meaning provided in Section 2.6(a).
"S&P" means Standard & Poor's Corporation.
"Significant Subsidiaries" shall mean any one or more Subsidiaries which,
if
19
considered in the aggregate as a single Subsidiary would be a "significant
subsidiary" as defined in Rule 1-02 of Regulation S-X under the Securities
Exchange Act of 1934. For purposes of this Agreement, an Event of Default under
Section 7.1(e) shall not be deemed to have occurred with respect to Significant
Subsidiaries unless such type of event described in Section 7.1(e) has occurred
with respect to each of the Subsidiaries required to be included to constitute
"Significant Subsidiaries" as defined in the preceding sentence.
"Subsidiary" of any Person shall mean and include (i) any corporation
more than 50% of whose stock of any class or classes having by the terms thereof
ordinary voting power to elect a majority of the directors of such corporation
(irrespective of whether or not at the time stock of any class or classes of
such corporation shall have or might have voting power by reason of the
happening of any contingency) is at the time owned by such Person directly or
indirectly through Subsidiaries and (ii) any partnership, association or other
entity in which such Person, directly or indirectly through Subsidiaries, is
either a general partner or has greater than a 50% equity interest at the time.
Unless the context otherwise requires, references herein to "Subsidiary" shall
mean the direct and indirect Subsidiaries of Holdings, including the Borrower.
"Swingline Commitment" shall mean an aggregate principal amount of
$10,000,000, as such amount may be reduced from time to time pursuant to
Sections 2.11 and 9.4.
"Swingline Lender" shall mean NBD in its capacity as lender of Swingline
Loans.
"Swingline Loans" shall have the meaning ascribed thereto in Section 2.2.
"Termination Event" shall mean (i) the initiation of any action by
Holdings, the Borrower, any member of their ERISA Controlled Group or any ERISA
Plan fiduciary to terminate an ERISA Plan or the treatment of an amendment to an
ERISA Plan as a termination under ERISA, or (ii) the institution of proceedings
by the PBGC under Section 4042 of ERISA to terminate an ERISA Plan or to appoint
a trustee to administer any ERISA Plan.
"Total Capitalization" shall mean, at any time, the sum of Total Debt
plus Net Worth.
"Total Commitment" shall mean, at any time, the sum of the Revolving
Loan Commitments of all the Banks at such time, which, on the Closing Date,
shall be $100,000,000.
"Total Debt" shall mean, without duplication: (i) all obligations of
Holdings and any of its consolidated Subsidiaries for borrowed money and for the
deferred purchase price of property or services (other than trade payables
incurred in the ordinary course of business), and obligations (including the
current portion thereof) evidenced by bonds,
20
debentures, notes or other similar instruments; (ii) all Contingent Obligations
of Holdings and any of its consolidated Subsidiaries (including, without
limitation, obligations-in respect of take-or-pay contracts at the time
Holdings, the Borrower or any other Subsidiary incurs, or has reason to believe,
that any payment obligation thereunder arises, or will arise, as a result of
Holdings', the Borrower's or such Subsidiary's failure, or intended failure, to
take the product or service intended to be provided thereunder); (iii)
indebtedness of others secured by any lien upon property owned by Holdings or
any of its consolidated Subsidiaries, whether or not assumed, but only to the
extent of such property's fair market value; (iv) all payment obligations of
Holdings or any of its consolidated Subsidiaries under any Interest Rate
Protection Agreements; and (v) all obligations in respect of the redemption of
any preferred stock of Holdings, the Borrower or any of its other consolidated
Subsidiaries and all non-cash cumulative dividends payable in respect of such
preferred stock, provided that Non-Recourse Debt shall be excluded for purposes
of this definition.
"Transfer Supplement" shall have the meaning provided in Section 9.4(c).
"Transferee" shall have the meaning provided in Section 9.4(d).
"Type" shall mean any type of Loan determined with respect to the
interest option applicable thereto, i.e., a Base Rate Loan or a LIBOR Loan.
"Unfunded Benefit Liabilities" means with respect to any Plan at any
time, the amount (if any) by which (i) the present value of all benefit
liabilities under such Plan as defined in Section 4001(a)(16) of ERISA,
exceeds (ii) the fair market value of all Plan assets allocable to such
benefits, all determined as of the then most recent valuation date for
such Plan (on the basis of assumptions used in the most recent actuarial
valuation required in connection with Internal Revenue Service Form 5500).
Section 1.2 Terms Generally. The definitions in Section 1.1 shall apply
equally to both the singular and plural forms of the terms defined. Whenever the
context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words "include", "includes" and "including" shall
be deemed to be followed by the phrase "without limitation". All references
herein to Articles, Sections, Exhibits and Schedules shall be deemed to be
references to Articles and Sections of, and Exhibits and Schedules to, this
Agreement unless the context shall otherwise require. Unless otherwise specified
herein, all accounting terms used herein shall be interpreted, all accounting
determinations hereunder shall be made and all financial statements required to
be delivered hereunder shall be prepared in accordance with GAAP as in effect
from time to time; provided, however, that for purposes of making any
determination required by the definition of Applicable Margin or Section 6, all
accounting terms used herein shall be interpreted and all accounting
determinations hereunder shall be made in accordance with GAAP as in effect on
the date of this Agreement applied on a basis consistent with the application
used in the financial statements referred to in Section 4.5.
21
SECTION 2. AMOUNT AND TERMS OF CREDIT FACILITIES
Section 2.1 Revolving Loans. (a) Subject to and upon the terms and
conditions herein set forth, each Bank severally and not jointly agrees, at any
time and from time to time on and after the Closing Date to the Business Day
immediately preceding the Maturity Date, to make revolving loans (collectively,
"Revolving Loans") to the Borrower, which Revolving Loans shall not exceed in
aggregate principal amount at any time outstanding the Revolving Loan Commitment
of such Bank at such time.
(b) Revolving Loans may be voluntarily prepaid pursuant to Section
2.12, and, subject to the other provisions of this Agreement, any amounts so
prepaid may be reborrowed. Each Revolving Loan Bank's Revolving Loan Commitment
shall expire, and each Revolving Loan shall mature on, the Maturity Date,
without further action on the part of the Banks or the Agent.
(c) Each Borrowing of Revolving Loans shall be in the aggregate
minimum amount of $1,000,000 or any integral multiple of $100,000 in excess
thereof in the case of LIBOR Loans and in the aggregate minimum amount of
$500,000 or any integral multiple of $100,000 in excess thereof in the case of
Base Rate Loans.
(d) Notwithstanding anything contained herein to the contrary, at no
time shall the aggregate principal amount of the sum of (i) Revolving Loans
outstanding, plus (ii) the Letter of Credit Outstandings, plus (iii) the
outstanding Swingline Loans plus (iv) the outstanding Competitive Bid Loans
exceed the Total Commitment then in effect.
Section 2.2 Swingline Loans. (a) Subject to and upon the terms and
conditions herein set forth, the Swingline Lender agrees to make at any time and
from time to time on or after the Closing Date to the Business Day immediately
preceding the Maturity Date, a loan or loans to the Borrower (each a "Swingline
Loan," and, collectively, the "Swingline Loans"), which Swingline Loans (i)
shall bear interest at a rate agreed upon between the Borrower and the Swingline
Lender or, absent such agreement, shall be made and maintained, as Base Rate
Loans, (ii) may be repaid and reborrowed in accordance with the provisions
hereof and (iii) shall not exceed in aggregate principal amount at any time
outstanding the lesser of (x) $10,000,000 and (y) the difference between (A) the
Total Commitment then in effect and (B) the sum of the aggregate principal
amount of Revolving Loans outstanding plus the Competitive Bid Loans outstanding
plus the Letter of Credit Outstandings. The Swingline Lender will not make a
Swingline Loan after it has received written notice from the Required Banks that
one or more of the applicable conditions to Borrowings specified in Section 3.2
are not then satisfied, or the Agent has given written notice of such matters
(or of the occurrence of an Event of Default) to the Swingline Lender.
(b) In the event that any Swingline Loan remains outstanding for more
22
than five (5) Business Days, The Swingline Lender may, thereafter, in its sole
discretion, give notice to the Banks that its outstanding Swingline Loans shall
be funded with a Borrowing of Revolving Loans; (provided that each such notice
shall be deemed to have been automatically given upon the occurrence of an Event
of Default under Section 7.1(e) or upon the exercise of any of the remedies
provided in Section 7.2), in which case a Borrowing of Revolving Loans
constituting Base Rate Loans (each such Borrowing, a "Mandatory Borrowing")
shall be made on the immediately succeeding Business Day by all Banks pro rata
based on each Bank's Pro Rata Share, and the proceeds thereof shall be applied
directly to repay the Swingline Lender for such outstanding Swingline Loans.
Each Bank hereby irrevocably agrees to make Base Rate Loans upon one Business
Day's notice pursuant to each Mandatory Borrowing in the amount and in the
manner specified in the preceding sentence and on the date specified in writing
by the Swingline Lender notwithstanding (i) that the amount of the Mandatory
Borrowing may not comply with the minimum borrowing amount otherwise required
hereunder (provided that such Mandatory Borrowing shall be subject to each
Bank's Revolving Loan Commitment then in effect except to the extent set forth
in subclause (iv) of this Section 2.2(b)), (ii) whether any conditions specified
in Section 3.2 are then satisfied, (iii) whether a Default or an Event of
Default has occurred and is continuing and (iv) any reduction in the Total
Commitment after any such Swingline Loans were made. In the event that any
Mandatory Borrowing cannot for any reason be made on the date otherwise required
above (including, without limitation, as a result of the commencement of a
proceeding under the Bankruptcy Code in respect of the Borrower), each Bank
(other than the Swingline Lender) hereby agrees that it shall forthwith purchase
from the Swingline Lender (without recourse or warranty) such assignment of the
outstanding Swingline Loans as shall be necessary to cause the Banks to share in
such Swingline Loans ratably based upon their respective Pro Rata Shares,
provided that all interest payable on the Swingline Loans shall be for the
account of the Swingline Lender until the date the respective assignment is
purchased and, to the extent attributable to the purchased assignment, shall be
payable to the Bank purchasing same from and after such date of purchase.
Section 2.3 Competitive Bid Loans.
(a) The Competitive Bid Option. In addition to Revolving Loans
pursuant to Section 2.1 and Swingline Loans pursuant to Section 2.2, the
Borrower may, as set forth in this Section 2.3, request the Banks during the
period from and including the Closing Date to but not including the Business Day
immediately preceding the Maturity Date to make offers to make Competitive Bid
Loans to the Borrower. The Banks may, but shall have no obligation to, make such
offers and the Borrower may, but shall have no obligation to, accept any such
offers in the manner set forth in this Section 2.3. The Competitive Bid Loans
may be Competitive Bid Absolute Rate Loans or Competitive Bid LIBOR Loans (each
a "Type" of Competitive Bid Loan).
(b) Competitive Bid Quote Request. When the Borrower wishes to request
offers to make Competitive Bid Loans, it shall transmit to the Agent a request
23
substantially in the form of Exhibit B hereto (a "Competitive Bid Quote
Request"), together with the payment of a non-refundable administrative fee of
$500 for the account of the Agent, so as to be received (x) no later than 10:00
a.m. Detroit time on the fourth Business Day prior to the date of borrowing
proposed therein, in the case of a LIBOR Auction or (y) no later than 10:00 a.m.
Detroit time on the Business Day prior to the date of borrowing proposed
therein, in the case of an Absolute Rate Auction specifying:
(A) the proposed date of borrowing, which shall be a Business Day;
(B) the aggregate amount of such borrowing, which shall be in a
minimum amount of $5,000,000 or a larger whole multiple of $1,000,000 up to a
maximum amount of $50,000,000 in the aggregate for Competitive Bid Loans
outstanding at any one time;
(C) the duration of the Interest Period applicable thereto, subject to
the provisions of the definition of Interest Period; and
(D) whether the Competitive Bid Quotes requested are to set forth a
Competitive Bid Margin or a Competitive Bid Absolute Rate.
The Borrower may request offers to make Competitive Bid Loans for more than one
but no more than three Interest Periods in a single Competitive Bid Quote
Request.
(c) Invitation for Competitive Bid Quotes. Promptly upon receipt of a
Competitive Bid Quote Request, the Agent shall send to the Banks an Invitation
for Competitive Bid Quotes, which shall constitute an invitation by the Borrower
to each Bank to submit Competitive Bid Quotes offering to make the Competitive
Bid Loans to which such Competitive Bid Quote Request relates in accordance with
this Section 2.3.
(d) Submission and Contents of Competitive Bid Quotes.
(i) Each Bank may submit a Competitive Bid Quote containing an offer
or offers to make Competitive Bid Loans in response to any Invitation for
Competitive Bid Quotes. Each Competitive Bid Quote must comply with the
requirements of this Section 2.3(d) and must be submitted to the Agent no later
than (A) 9:30 a.m. Detroit time on the third Business Day prior to the proposed
date of borrowing in the case of a LIBOR Auction or (B) 9:30 a.m. Detroit time
on the proposed date of borrowing, in the case of an Absolute Rate Auction;
provided, that Competitive Bid Quotes submitted by the Agent in its capacity as
a Bank may be submitted, and may only be submitted, if the Agent notifies the
Borrower of the terms of the offer or offers contained therein not later than
(A) 9:00 a.m. Detroit time on the third Business Day prior to the proposed date
of borrowing, in the case of a LIBOR Auction or (B) 9:00 a.m. Detroit time on
the proposed date of borrowing, in the case of an Absolute Rate Auction. Subject
to Sections 2.17 and 3.2, any Competitive Bid Quote so made shall be irrevocable
except with the
24
written consent of the Agent given on the instructions of the Borrower. Any Bank
electing not to submit a Competitive Bid Quote shall notify the Agent at least
one hour before the deadline for submitting Competitive Bid Quotes of its
election not to do so; provided, that any Bank which fails to submit a
Competitive Bid Quote by the applicable deadline referred to in this Section
2.3(d) shall be deemed to have so notified the Agent.
(ii) A Competitive Bid Quote may set forth up to five separate offers
by the quoting Bank with respect to each Interest Period specified in the
related Invitation for Competitive Bid Quotes. Each Competitive Bid Quote shall
specify:
(1) the proposed date of borrowing and the Interest Period therefor;
(2) the principal amount of the Competitive Bid Loan for which each
such offer is being made, which principal amount (i) may be equal to, greater
than or less than the Revolving Loan Commitment of the quoting Bank, (ii) must
be $5,000,000 or a larger whole multiple of $1,000,000, (iii) may not exceed the
principal amount of Competitive Bid Loans for which offers were requested, and
(iv) may be subject to an aggregate limitation as to the principal amount of
Competitive Bid Loans for which offers being made by such quoting Bank may be
accepted;
(3) in the case of a LIBOR Auction, the margin above or below
applicable LIBOR Rate (the "Competitive Bid Margin") offered for each such
Competitive Bid Loan, expressed as a percentage (specified to the nearest
1/1,000th of 1%) to be added to or subtracted from applicable LIBOR Rate;
(4) in the case of an Absolute Rate Auction, the rate of interest per
annum (specified to the nearest 1/1,000th of 1%) (the "Competitive Bid Absolute
Rate") offered for each such Competitive Bid Loan; and
(5) the identity of the quoting Bank.
(iii) Any Competitive Bid Quote shall be disregarded if it:
(i) is not substantially in conformity with the format described in
the relevant Invitation for Competitive Bid Quotes or does not specify all of
the information required by Section 2.3(d)(ii);
(ii) contains qualifying, conditional or similar language, except as
permitted in Section 2.3(d)(ii)(2)(iv);
(iii) proposes terms other than or in addition to those set forth in
the applicable Invitation for Competitive Bid Quotes; or
(iv) arrives after the time set forth in Section 2.3(d)(i).
25
(e) Notice to Borrower. Not later than (i) 10:00 a.m. Detroit time on
the third Business Day prior to the proposed date of borrowing in the case of a
LIBOR Auction or (ii) 10:00 a.m. Detroit time on the proposed date of borrowing
in the case of an Absolute Rate Auction, the Agent shall promptly notify the
Borrower of the terms of (x) any Competitive Bid Quote submitted by any Bank
that is in accordance with Section 2.3(d) and (y) any Competitive Bid Quote that
amends, modifies or is otherwise inconsistent with a previous Competitive Bid
Quote submitted by such Bank with respect to the same Competitive Bid Quote
Request. Any such subsequent Competitive Bid Quote shall be disregarded by the
Agent unless such subsequent Competitive Bid Quote is submitted solely to
correct a manifest error in such former Competitive Bid Quote. The Agent's
notice to the Borrower shall specify (A) the aggregate principal amount of
Competitive Bid Loans for which offers have been received for each Interest
Period specified in the related Competitive Bid Quote Request, (B) the
respective principal amounts and Competitive Bid Margins or Competitive Bid
Absolute Rates, as the case may be, so offered and (C) if applicable,
limitations on the aggregate principal amount of Competitive Bid Loans for which
offers in any single Competitive Bid Quote may be accepted.
(f) Acceptance and Notice by Borrower. Not later than (i) 10:45 a.m.
Detroit time on the third Business Day prior to the proposed date of borrowing,
in the case of a LIBOR Auction or (ii) 10:45 a.m. Detroit time on the proposed
date of borrowing, in the case of an Absolute Rate Auction, the Borrower shall
notify the Agent of its acceptance or non-acceptance of the offers so notified
to it pursuant to Section 2.3(e) substantially in the form of Exhibit E hereto
(a "Notice of Acceptance/Non-Acceptance") (and the Agent shall so notify each
Bank making an offer); provided, that if the Borrower shall fail to so notify
the Agent by the times set forth above, the Borrower shall be deemed to have
notified the Agent of its non-acceptance of each such offer. In the case of
acceptance, each such notice shall specify the aggregate principal amount of
offers for each Interest Period that are accepted. The Borrower may accept any
Competitive Bid Quote in whole or in part; provided that:
(A) the aggregate principal amount of each borrowing of Competitive
Bid Loans may not exceed the applicable amount set forth in the related
Competitive Bid Quote Request;
(B) the principal amount of each borrowing of Competitive Bid Loans
must be $5,000,000 or a larger whole multiple of $1,000,000;
(C) acceptance of offers may only be made on the basis of ascending
Competitive Bid Margins or Competitive Bid Absolute Rates, as the case may be;
and
(D) the Borrower may not accept any offer that is described in Section
2.3(d)(iii) or that otherwise fails to comply with the requirements of this
Agreement.
26
(g) Allocation. If offers are made by two or more Banks with the same
Competitive Bid Margins or Competitive Bid Absolute Rates, as the case may be,
for a greater aggregate principal amount than the amount in respect of which
such offers are accepted for the related Interest Period, the principal amount
of Competitive Bid Loans in respect of which such offers are accepted shall be
allocated by the Borrower among such Banks as nearly as possible (in such
multiples, not greater than $1,000,000, as the Borrower may deem appropriate) in
proportion to the aggregate principal amounts of such offers. The Borrower shall
promptly notify the Agent, and the Agent shall promptly notify each such Bank,
of any allocation pursuant to this Section 2.3(g).
(h) Maximum Amounts. Notwithstanding anything to the contrary set
forth herein, in no event shall the aggregate outstanding principal amount of
Competitive Bid Loans exceed the lesser of (i) $50,000,000 and (ii) the
difference between (A) the Total Commitment then in effect and (B) the sum of
the aggregate principal amount of Revolving Loans outstanding plus the Swingline
Loans outstanding plus the Letter of Credit Outstandings.
(i) Copies to Banks. Upon written request by a Bank to the Agent, the
Agent shall, in connection with Borrower's acceptance of the offers to make
Competitive Bid Loans pursuant to a Notice of Acceptance/Non-Acceptance, provide
such Bank with the range of the quotes received in connection therewith.
Section 2.4 Notice of Borrowing. (a) Whenever the Borrower desires to
borrow Revolving Loans hereunder, it shall give the Agent at the Agent's Office
prior to 10:00 A.M., Detroit time, written notice on the date of each requested
Base Rate Loan, and at least three Business Days, prior written notice of each
LIBOR Loan to be made hereunder. Each such notice (a "Notice of Borrowing")
shall be irrevocable and shall specify (i) the aggregate principal amount of the
requested Loans, (ii) the date of Borrowing (which shall be a Business Day), and
(iii) whether such Loans shall consist of Base Rate Loans or LIBOR Loans and, if
LIBOR Loans, the initial Interest Period to be applicable thereto (provided,
that no Loans may be requested or made when any Default or Event of Default has
occurred and is continuing). If a Notice of Borrowing fails to specify the type
of Loans to be made, such Loans shall be made as Base Rate Loans.
(b) Promptly after receipt of a Notice of Borrowing, the Agent shall
provide each Bank with a copy thereof and inform each Bank as to its Pro Rata
Share of the Revolving Loans requested thereunder.
(c) Whenever the Borrower desires to make a Borrowing of Swingline
Loans hereunder, it shall give the Swingline Lender not later than 2:00 P.M.
(Detroit time) on the day such Swingline Loan is to be made, written notice (or
telephonic notice promptly confirmed in writing) of each Swingline Loan to be
made hereunder. Each such notice shall be irrevocable and shall specify in each
case (x) the date of such Borrowing (which shall be a Business Day) and (y) the
aggregate principal amount of
27
the Swingline Loan to be made pursuant to such Borrowing.
Section 2.5 Disbursement of Funds. (a) (i) No later than 1:00 P.M., Detroit
time, on the date specified in each Notice of Borrowing, each Bank will make
available its Pro Rata Share of the Revolving Loans requested to be made on such
date, in U.S. dollars and immediately available funds, at the Agent's Office,
provided that all Swingline Loans shall be made available by the Swingline
Lender no later than 5:00 P.M. (Detroit time) on the date so requested. After
the Agent's receipt of the proceeds of such Loans, the Agent will make available
to the Borrower by depositing in the Borrower's account at the Agent's Office
the aggregate of the amounts so made available in the type of funds actually
received.
(ii) No later than 1:00 P.M., Detroit time, on the date specified
in each Competitive Bid Quote Request, the Bank making such Competitive Bid Loan
pursuant to Section 2.3 will make available such Competitive Bid Loan to be made
on such date, in U.S. dollars and immediately available funds, at the Agent's
Office. After the Agent's receipt of the proceeds of such Loan, the Agent will
make available to the Borrower by depositing in the Borrower's account at the
Agent's Office the aggregate of the amounts so made available in the type of
funds actually received.
(b) Unless the Agent shall have been notified by any Bank prior to the
date of a Borrowing that such Bank does not intend to make available to the
Agent its portion of the Loans to be made on such date, the Agent may assume
that such Bank has made such amount available to the Agent on such date and the
Agent in its sole discretion may, in reliance upon such assumption, make
available to the Borrower a corresponding amount. If such corresponding amount
is not in fact made available to the Agent by such Bank and the Agent has made
such amount available to the Borrower, the Agent shall be entitled to recover
such corresponding amount on demand from such Bank. If such Bank does not pay
such corresponding amount forthwith upon the Agent's demand therefor, the Agent
shall promptly notify the Borrower and the Borrower shall immediately repay such
corresponding amount to the Agent. The Agent shall also be entitled to recover
from such Bank or the Borrower, as the case may be, interest on such
corresponding amount in respect of each day from the date such corresponding
amount was made available by the Agent to the Borrower to the date such
corresponding amount is recovered by the Agent, at a rate per annum on such
corresponding amount equal to (x) if paid by such Bank, the overnight Federal
Funds Rate or (y) if paid by the Borrower, the then applicable rate of interest,
calculated in accordance with Section 2.7, for the Revolving Loans. Nothing
herein shall be deemed to relieve any Bank from its obligation to fulfill its
commitments hereunder or to prejudice any rights which the Borrower may have
against any Bank as a result of any default by such Bank hereunder.
Section 2.6 Notes. (a) The Borrower's obligation to pay the principal of,
and interest on, each Bank's Loans shall be evidenced by (i) in the case of a
Bank's Revolving Loans, a promissory note (a "Revolving Note") duly executed and
delivered
28
by the Borrower substantially in the form of Exhibit A-1 hereto with blanks
appropriately completed in conformity herewith; (ii) in the case of a Bank's
Competitive Bid Loan, a promissory note (a "Competitive Bid Note") duly executed
and delivered by the Borrower substantially in the form of Exhibit A-2 hereto
with blanks appropriately completed in conformity herewith; and (iii) in the
case of the Swingline Lender's Swingline Loans, a promissory note (a "Swingline
Note") duly executed and delivered by the Borrower substantially in the form of
Exhibit A-3 hereto in a principal amount equal to the Swingline Lender's
Swingline Commitment, with blanks appropriately completed in conformity
herewith. Each Note issued to a Bank shall (x) be payable to the order of such
Bank, (y) be dated the Closing Date, and (z) mature on the Maturity Date or the
end of the Interest Period for such Competitive Bid Loan, as applicable.
(b) Each Bank is hereby authorized, at its option, either (i) to
endorse on the schedule attached to its Note (or on a continuation of such
schedule attached to such Note and made a part thereof) an appropriate notation
evidencing the date and amount of each Loan evidenced thereby and the date and
amount of each principal and interest payment in respect thereof, or (ii) to
record such Loans and such payments in its books and records. Such schedule or
such books and records, as the case may be, shall constitute prima facie
evidence of the accuracy of the information contained therein, provided that the
failure of such Bank to make any such endorsement or recordation shall not
affect the obligations of the Borrower hereunder or under the Notes.
Section 2.7 Interest. (a) The Borrower agrees to pay interest in respect of
the unpaid principal amount of each Base Rate Loan from the date of the making
of such Loan until such Loan shall be paid in full at a rate per annum which
shall be equal to the sum of the Applicable Margin plus the Base Rate in effect
from time to time, such rate to change as and when the Base Rate or Applicable
Margin changes, such interest to be computed on the basis of a year of 365 or
366 days, as the case may be.
(b) The Borrower agrees to pay interest in respect of the unpaid
principal amount of each LIBOR Loan for each Interest Period therefor from the
date of the making of such Loan until such Loan shall be paid in full at a rate
per annum which shall be equal to the sum of the Applicable Margin plus the
relevant LIBOR Rate for such Interest Period, such interest to be computed on
the basis of a 360-day year. Changes in the Applicable Margin with respect to
LIBOR Loans shall be effective only as to LIBOR Loans borrowed on or after the
effective date of such change, or in the case of LIBOR Loans continued pursuant
to Section 2.10, only to such Loans continued on or after the effective date of
such change or in the case of Loans converted into LIBOR Loans, only to such
Loans converted on or after the effective date of such change.
(c) The Borrower agrees to pay interest in respect of the unpaid
principal amount of each Competitive Bid LIBOR Loan from the date of the making
of such Loan until such Loan is paid in full at a rate equal to LIBOR Rate for
such Loan for
29
the Interest Period therefor plus or minus the Competitive Bid Margin quoted by
the Bank making such Loan in accordance with Section 2.3(d).
(d) The Borrower agrees to pay interest in respect of the unpaid
principal amount of each Competitive Bid Absolute Rate Loan from the date of the
making of such Loan until such Loan is paid in full at a rate equal to the
Competitive Bid Absolute Rate for such Loan for the Interest Period therefor
quoted by the Banks making such Loan in accordance with Section 2.3(d).
(e) Overdue principal and, to the extent permitted by law, overdue
interest in respect of each Loan shall bear interest at a rate per annum (the
"Default Rate") equal to the sum of two percent (2%) plus the interest rate
otherwise applicable hereunder to such principal amount in effect from time to
time (or, if such overdue payment is not relating to a Loan, 2% above the Base
Rate then in effect).
(f) Interest on any Loan shall accrue from and including the date of
the Borrowing thereof to but excluding the date of any repayment thereof
(provided that any Loan borrowed and repaid on the same day shall accrue one
day's interest) and shall be payable (i) in respect of each Base Rate Loan, in
arrears on each Payment Date, (ii) in respect of each LIBOR Loan and Competitive
Bid Loan, on the last day of each Interest Period applicable to such Loan and,
in the case of an Interest Period of six months, on the date occurring three
months from the first day of such Interest Period and on the last day of such
Interest Period and (iii) in the case of all Loans, on any prepayment or
conversion (on the amount prepaid or converted), at maturity (whether by
acceleration or otherwise) and, after such maturity, on demand.
(g) The Agent shall, upon determining the LIBOR Rate for any Interest
Period, promptly notify the Borrower and the Banks thereof.
(h) Each Reference Bank agrees to make the quotes available to the
Agent to permit the Agent to determine the LIBOR Base Rate.
Section 2.8 Interest Periods. (a) The Borrower shall, in any Notice of
Borrowing, in any Competitive Bid Quote Request in respect of the making of a
LIBOR Loan or of a Competitive Bid Loan or in any Notice of Conversion or
Continuation in respect of the conversion into or continuation of a LIBOR Loan,
select the interest period (each an "Interest Period") applicable to such Loan,
which Interest Period shall, at the option of the Borrower, be either a
one-month, two-month, three-month or six-month period for LIBOR Loans or
Competitive Bid LIBOR Loans or any period not exceeding 360 days for Competitive
Bid Absolute Rate Loans, provided that:
(i) the initial Interest Period for any LIBOR Loan, Competitive Bid
Absolute Rate Loan or Competitive Bid LIBOR Loan shall commence on the date of
the making of such Loan (including the date of any conversion from a Base Rate
Loan) and each Interest Period occurring thereafter shall commence on the date
on which the next
30
preceding Interest Period expires, provided that each Competitive Bid Absolute
Rate Loan and Competitive Bid LIBOR Loan shall mature and be due and payable at
the end of the Interest Period applicable thereto;
(ii) if any Interest Period would otherwise expire on a day which is
not a Business Day, such Interest Period shall expire on the next succeeding
Business Day, provided, however, that if any Interest Period would otherwise
expire on a day which is not a Business Day but is a day of the month after
which no further Business Day occurs in such month, such Interest Period shall
expire on the next preceding Business Day;
(iii) if any Interest Period begins on a day for which there is no
numerically corresponding day in the calendar month at the end of such Interest
Period, such Interest Period shall end on the last Business Day of such calendar
month;
(iv) no Interest Period in respect of any Loan shall extend beyond the
Maturity Date; and
(v) if upon the expiration of any Interest Period, the Borrower has
failed to elect a new Interest Period to be applicable to the respective LIBOR
Loan as provided above, the Borrower shall be deemed to have elected to convert
such LIBOR Loans into Base Rate Loans effective as of the expiration date of
such current Interest Period.
Section 2.9 Minimum Amount of LIBOR Loans. All borrowings, conversions,
continuations, payments, prepayments (other than prepayments made pursuant to
Section 2.13) and selections of Interest Periods hereunder shall be made or
selected so that, after giving effect thereto, (i) the aggregate principal
amount of any Borrowing comprised of LIBOR Loans shall not be less than
$1,000,000 or an integral multiple of $100,000 in excess thereof, and (ii) there
shall be no more than eight (8) Borrowings comprised of LIBOR Loans outstanding
at any time.
Section 2.10 Conversion or Continuation. (a) Subject to the other
provisions hereof, the Borrower shall have the option (i) to convert at any time
all or any part of outstanding Base Rate Loans (other than Swingline Loans and
Competitive Bid Absolute Rate Loans) to LIBOR Loans, or (ii) to convert all or
any part of outstanding LIBOR Loans which comprise part of the same Borrowing to
Base Rate Loans, on the expiration date of the Interest Period applicable
thereto, or (iii) to continue all or any part of outstanding LIBOR Loans which
comprise part of the same Borrowing as LIBOR Loans for an additional Interest
Period, on the expiration of the Interest Period applicable thereto; provided
that (A) no Loan may be continued as, or be converted into, a LIBOR Loan when
any Default or Event of Default has occurred and is continuing and (B) no
Competitive Bid Loans may be so converted or continued.
(b) In order to elect to convert or continue a Loan under this Section
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2.10, the Borrower shall deliver irrevocable written notice thereof (a "Notice
of Conversion or Continuation") to the Agent no later than 10:00 A.M., Detroit
time, (i) at least one Business Day in advance of the proposed conversion date
in the case of a conversion to a Base Rate Loan and (ii) at least three Business
Days in advance of the proposed conversion or continuation date in the case of a
conversion to, or a continuation of, a LIBOR Loan. A Notice of Conversion or
Continuation shall specify (w) the requested conversion or continuation date
(which shall be a Business Day), (x) the Borrowing to be converted or continued,
(y) whether a conversion or continuation is requested, and (z) in the case of a
conversion to, or a continuation of, a LIBOR Loan, the requested Interest
Period. Promptly after receipt of a Notice of Conversion or Continuation under
this Section 2.10(b), the Agent shall provide each Bank with a copy thereof.
Section 2.11 Voluntary Reduction of Commitments. Upon at least three
Business Days' prior irrevocable written notice to the Agent (which notice the
Agent shall promptly transmit to each of the Banks), the Borrower shall have the
right, without premium or penalty, to permanently terminate each Bank's Pro Rata
Share of the unutilized portion of the Total Commitment, in part or in whole,
provided that any such partial reduction shall be in the minimum aggregate
amount of $1,000,000 or any integral multiple of $100,000 in excess thereof;
provided, however, that the Total Commitment may at no time be reduced to an
amount less than the sum of the outstanding Swingline Loans, Competitive Bid
Loans and Letter of Credit Outstandings.
Section 2.12 Voluntary Prepayments. The Borrower shall have the right to
prepay, without premium or penalty, the Loans in whole or in part from time to
time on the following terms and conditions: (i) the Borrower shall give the
Agent written notice, which notice shall be irrevocable, of its intent to prepay
the Loans, at least three Business Days prior to a prepayment of LIBOR Loans and
at least one Business Day prior to a prepayment of Base Rate Loans, which notice
shall specify the amount of such prepayment and what Types and Facilities of
Loans are to be prepaid and, in the case of LIBOR Loans, the specific
Borrowing(s) pursuant to which made, and which notice the Agent shall promptly
transmit to each of the Banks, (ii) each prepayment shall be in an aggregate
principal amount of $1,000,000 or any integral multiple of $100,000 in excess
thereof, and (iii) prepayments of LIBOR Loans and Competitive Bid LIBOR Loans
made pursuant to this Section may only be made on the last day of an Interest
Period applicable thereto unless accompanied by such amounts required pursuant
to Section 2.18. Notice having thus been given the amount of any such prepayment
shall mature and become due and payable on the date specified in such notice.
Section 2.13 Mandatory Prepayments. (a) On each date on which the amount of
aggregate outstanding Revolving Loans plus the outstanding Competitive Bid
Loans, plus the outstanding Swingline Loans, plus the Letter of Credit
Outstandings exceeds the Total Commitment then in effect (including any such
date on which the Total Commitment is reduced or terminated pursuant to Section
2.11 after giving effect to
32
such reduction or termination), the Borrower shall immediately prepay Loans to
the extent of such excess.
(b) Each Competitive Bid Loan shall mature and be due and payable at
the end of the Interest Period applicable thereto.
Section 2.14 Application of Prepayments. All prepayments of the Loans
required by Section 2.13(a) shall be applied (in each case accompanied by
prepayment of all interest accrued on the amount prepaid) first, to prepay the
Swingline Loans until such Swingline Loans shall have been repaid in full,
second, to prepay the Revolving Loans until such Revolving Loans shall have been
repaid in full, which prepayments shall be applied first to Base Rate Loans and
then LIBOR Loans and third, to all other outstanding Obligations then due and
payable.
Section 2.15 Method and Place of Payment. (a) Except as otherwise
specifically provided herein, all payments and prepayments under this Agreement
and the Notes shall be made to the Agent for the account of the Banks entitled
thereto not later than 12:00 noon, Detroit time, on the date when due and shall
be made in lawful money of the United States of America in immediately available
funds at the Agent's Office, and any funds received by the Agent after such time
shall, for all purposes hereof (including the following sentence), be deemed to
have been paid on the next succeeding Business Day. Except as otherwise
specifically provided herein, the Agent shall thereafter cause to be promptly
distributed to each such Bank in like funds its Pro Rata Share of payments so
received.
(b) Whenever any payment to be made hereunder or under any Note shall
be stated to be due on a day which is not a Business Day, the due date thereof
shall be extended to the next succeeding Business Day and, with respect to
payments of principal, interest shall be payable at the applicable rate during
such extension.
(c) All payments made by the Borrower hereunder and under the other
Loan Documents shall be made irrespective of, and without any reduction for, any
setoff or counterclaim.
Section 2.16 Fees. The Borrower agrees to pay to the Agent for the account
of each Bank a facility fee, computed at the Applicable Margin per annum on such
Bank's Revolving Loan Commitment, from and including the Closing Date to but not
including the Maturity Date, payable quarterly in arrears on each Payment Date
and on the Maturity Date or such earlier date, if any, on which the Revolving
Loan Commitment shall terminate in accordance with the terms hereof. Such fees
shall be computed on the basis of a 360-day year.
Section 2.17 Interest Rate Unascertainable, Increased Costs, Illegality.
(a) In the event that the Agent, in the case of clause (i) below, or any Bank,
in the case of clauses (ii) and (iii) below, shall have determined (which
determination shall, absent
33
manifest error, be final and conclusive and binding upon all parties hereto):
(i) on any date for determining the LIBOR Rate for any Interest
Period, that by reason of any changes arising after the Closing Date affecting
the interbank LIBOR market, adequate and fair means do not exist for
ascertaining the applicable interest rate on the basis provided for in the
definition of LIBOR Rate; or
(ii) at any time that the relevant LIBOR Rate applicable to any of its
Loans shall not represent the effective pricing to such Bank for funding or
maintaining a LIBOR Loan or Competitive Bid LIBOR Loan, or such Bank shall incur
increased costs or reductions in the amounts received or receivable hereunder in
respect of any LIBOR Loan, in any such case because of any change since the
Closing Date in any applicable law or governmental rule, regulation, guideline
or order or any interpretation thereof or any directive or request related
thereto and including the introduction of any new law or governmental rule,
regulation, guideline or order (such as for example but not limited to a change
in official reserve requirements, but, in all events, excluding reserves
required under Regulation D of the Federal Reserve Board to the extent included
in the computation of the LIBOR Rate) whether or not having the force of law
and/or any other circumstances affecting such Bank or the interbank LIBOR market
or the position of such Bank in such market as a result of any such change; or
(iii) at any time that the making or continuance by any Bank of any
LIBOR Loan or Competitive Bid LIBOR Loan has become unlawful by compliance by
such Bank in good faith with any law or governmental rule, regulation, guideline
or order;
then, and in any such event, the Agent or such Bank shall, promptly after making
such determination, give notice (by telephone promptly confirmed in writing) to
the Borrower and (if applicable) the Agent of such determination (which notice
the Agent shall promptly transmit to each of the Banks). Thereafter (x) in the
case of clause (i) above, the Borrower's right to request LIBOR Loans or
Competitive Bid LIBOR Loans shall be suspended, and any Notice of Borrowing
given by the Borrower with respect to any Borrowing of LIBOR Loans or
Competitive Bid LIBOR Loans or any Notice of Conversion or Continuation given by
the Borrower with respect to any Borrowing of LIBOR Loans, in each case which
has not yet been made shall be deemed cancelled and rescinded by the Borrower,
(y) in the case of clause (ii) above, the Borrower shall upon notice by the Bank
in accordance with Section 2.21 pay to such Bank, such additional amounts (in
the form of an increased rate of interest, or a different method of calculating
interest, or otherwise, as such Bank in its reasonable discretion shall
determine) as shall be required to compensate such Bank for such increased costs
or reduction in amounts received or receivable hereunder and (z) in the case of
clause (iii) above, the Borrower's right to request LIBOR Loans or Competitive
Bid LIBOR Loans thereafter shall be suspended, and Borrower shall take one of
the actions specified in clause (b) below as promptly as possible and, in any
event, within the time period required by law.
34
(b) In the case of any LIBOR Loan or requested LIBOR Loan or
Competitive Bid LIBOR Loan affected by the circumstances described in clause
(a)(ii) above, the Borrower may, and in the case of any LIBOR Loan or
Competitive Bid LIBOR Loan affected by the circumstances described in clause
(a)(iii) above the Borrower shall, either (x) if any such LIBOR Loan or
Competitive Bid LIBOR Loan has not yet been made but is then the subject of a
Notice of Borrowing or a Notice of Conversion or Continuation, be deemed to have
cancelled and rescinded such notice, or (y) if any such LIBOR Loan or
Competitive Bid LIBOR Loan is then outstanding, require the affected Bank to
convert each such LIBOR Loan or Competitive Bid LIBOR Loan into a Base Rate Loan
at the end of the applicable Interest Period or such earlier time as may be
required by law, in each case by giving the Agent notice (by telephone promptly
confirmed in writing) thereof on the Business Day that the Borrower was notified
by the Bank pursuant to clause (a) above; provided, however, that all Banks
whose LIBOR Loans or Competitive Bid LIBOR Loan are affected by the
circumstances described in clause (a) above shall be treated in the same manner
under this clause (b).
(c) In the event that the Agent determines at any time following its
giving of notice based on the conditions described in clause (a)(i) above that
none of such conditions exist, the Agent shall promptly give notice thereof to
the Borrower and the Banks, whereupon the Borrower's right to request LIBOR
Loans and Competitive Bid LIBOR Loans from the Banks and the Banks' obligation
to make LIBOR Loans shall be restored (it being acknowledged that the Banks have
no obligation to make Competitive Bid LIBOR Loans).
(d) In the event that a Bank determines at any time following its
giving of a notice based on the conditions described in clause (a)(iii) above
that none of such conditions exist, such Bank shall promptly give notice thereof
to the Borrower and the Agent, whereupon the Borrower's right to request LIBOR
Loans and Competitive Bid LIBOR Loans from such Bank and such Bank's obligation
to make LIBOR Loans shall be restored (it being acknowledged that the Banks have
no obligation to make Competitive Bid LIBOR Loans).
Section 2.18 Funding Losses. The Borrower shall compensate each Bank, upon
its written request (which request shall set forth the basis for requesting such
amounts), for all reasonable losses, expenses and liabilities (including,
without limitation, lost profits, any loss, expense or liability incurred by
such Bank in connection with the liquidation or reemployment of deposits or
funds required by it to make or carry its LIBOR Loans or Competitive Bid Rate
LIBOR Loans), that such Bank sustains: (i) if for any reason (other than a
default by such Bank) including, without limitation, the failure of any
conditions precedent specified in Section 3 to be satisfied, a Borrowing of, or
conversion from or into, or a continuation of, LIBOR Loans does not occur on a
date specified therefor in a Notice of Borrowing or Notice of Conversion or
Continuation (whether or not rescinded, cancelled or withdrawn or deemed
rescinded, cancelled or withdrawn, pursuant to Section 2.17(a) or 2.17(b) or
otherwise), (ii) if any repayment
35
(including, without limitation, payment after acceleration) or conversion of any
of its LIBOR Loans or Competitive Bid Rate LIBOR Loans occurs on a date which is
not the last day of the Interest Period applicable thereto or (iii) if any
prepayment of any of its Loans is not made on any date specified in a notice of
prepayment given by the Borrower.
Section 2.19 Increased Capital. If any Bank, the Swingline Lender or the
Issuing Bank shall have determined that compliance with any applicable law,
rule, regulation, guideline, request or directive (whether or not having the
force of law) of any governmental authority, central bank or comparable agency
adopted after the Closing Date, or any change after the Closing Date in any such
law, rule, regulation, guideline, request or directive which was in effect on
the Closing Date has or would have the effect of reducing the rate of return on
the capital or assets of such Bank or any Person controlling such Bank as a
consequence of its commitments or obligations hereunder (including, without
limitation, its obligations to make Loans, issue Letters of Credit or
participate in Letters of Credit), then from time to time upon notice by the
Bank in accordance with Section 2.21, the Borrower shall pay to such Bank,
Swingline Lender or Issuing Bank, as the case may be, such additional amount or
amounts as will compensate such Bank or Person for such reduction.
Section 2.20 Taxes. (a) All payments made by the Borrower under this
Agreement shall be made free and clear of, and without reduction or withholding
for or on account of, any present or future income, stamp or other taxes,
levies, imposts, duties, charges, fees, deductions or withholdings, now or
hereafter imposed, levied, collected, withheld or assessed by any governmental
authority excluding, in the case of the Agent and each Bank, net income and
franchise taxes imposed on the Agent or such Bank by the jurisdiction under the
laws of which the Agent or such Bank is organized or any political subdivision
or taxing authority thereof or therein, or by any jurisdiction in which such
Bank's Domestic Lending Office or LIBOR Lending Office, as the case may be, is
located or any political subdivision or taxing authority thereof or therein (all
such non-excluded taxes, levies, imposts, deductions, charges or withholdings
being hereinafter called "Taxes"). If any Taxes are required to be withheld from
any amounts payable to the Agent or any Bank hereunder or under the Notes, the
amounts so payable to the Agent or such Bank shall be increased to the extent
necessary to yield to the Agent or such Bank (after payment of all Taxes on any
amounts payable under this Section 2.20) interest on any such other amounts
payable hereunder at the rates or in the amounts specified in this Agreement and
the Notes. Whenever any Taxes are payable by the Borrower, as promptly as
possible thereafter, the Borrower shall send to the Agent for its own account or
for the account of such Bank, as the case may be, a certified copy of an
original official receipt received by the Borrower showing payment thereof. If
the Borrower fails to pay any Taxes when due to the appropriate taxing authority
or fails to remit to the Agent the required receipts or other required
documentary evidence, the Borrower shall indemnify the Agent and the Banks for
any incremental taxes, interest or penalties that may become payable by the
Agent or any Bank as a result of any such failure. The agreements in this
Section 2.20
36
shall survive the termination of this Agreement and the payment of the Notes and
all other Obligations.
(b) Each Bank that is not incorporated under the laws of the United
States of America or a state thereof (including each Purchasing Bank that
becomes a party to this Agreement pursuant to Section 9.4) agrees that, prior to
the first date on which any payment is due to it hereunder, it will deliver to
the Borrower and the Agent (i) two duly completed copies of United States
Internal Revenue Service Form 1001 or 4224 or successor applicable form, as the
case may be, certifying in each case that such Bank is entitled to receive
payments under this Agreement and the Notes payable to it, without deduction or
withholding of any United States federal income taxes, and (ii) an Internal
Revenue Service Form W-8 or W-9 or successor applicable form, as the case may
be, to establish an exemption from United States backup withholding tax. Each
Bank which delivers to the Borrower and the Agent a Form 1001 or 4224 and Form
W-8 or W-9 pursuant to the preceding sentence further undertakes to deliver to
the Borrower and the Agent two further copies of the said letter and Form 1001
or 4224 and Form W-8 or W-9, or successor applicable forms, or other manner of
certification, as the case may be, on or before the date that any such letter or
form expires or becomes obsolete or after the occurrence of any event requiring
a change in the most recent letter and form previously delivered by it to the
Borrower, and such extensions or renewals thereof as may reasonably be requested
by the Borrower, certifying in the case of a Form 1001 or 4224 that such Bank is
entitled to receive payments under this Agreement without deduction or
withholding of any United States federal income taxes, unless in any such case,
any change in treaty, law or regulation after the Closing Date (or the date any
Purchasing Bank became a party hereto) has occurred prior to the date on which
any such delivery would otherwise be required which renders all such forms
inapplicable or which would prevent such Bank from duly completing and
delivering any such letter or form with respect to it and such Bank advises the
Borrower that it is not capable of receiving payments without any deduction or
withholding of United States federal income tax, and in the case of a Form W-8
or W-9, establishing an exemption from United States backup withholding tax.
Section 2.21 Mitigation; Calculations. (a) In the event that any Bank shall
have delivered a notice pursuant to Section 2.17(a)(ii), 2.17(a)(iii) or 2.19 or
any L/C Participant shall have delivered a notice pursuant to Section 2A.5, or
the Borrower shall be required to make additional payments to any Bank under
Section 2.20, the Borrower shall have the right, but not the obligation, at its
own expense (including with respect to the processing and recordation fee
referred to in Section 9.4(c)), upon notice to such Bank and the Agent, to
replace such Bank with an assignee (in accordance with and subject to the
restrictions contained in Section 9.4(c)) approved by the Agent (which approval
shall not be unreasonably withheld), and such Bank hereby agrees to transfer and
assign without recourse (in accordance with and subject to the restrictions
contained in Section 9.4(c)) all its interests, rights and obligations under
this Agreement to such assignee; provided, however, that no Bank shall be
obligated to make any such assignment unless (i) such assignment shall not
conflict with any law or any rule,
37
regulation or order of any Governmental Authority, (ii) such assignee shall pay
to the affected Bank in immediately available funds on the date of such
assignment the interest accrued to the date of payment on the Loans made by such
Bank hereunder and all other amounts accrued for such Bank's account or owed to
it hereunder.
(b) A certificate of each Bank, the Swingline Lender, any L/C
Participant or the Issuing Bank setting forth such amount or amounts as shall be
necessary to compensate such Bank, the Swingline Lender or the Issuing Bank or
its holding company, if any, as specified in Section 2.17, 2.19, 2.20 or 2A.5,
as the case may be, and setting forth in reasonable detail an explanation of the
basis of requesting such compensation in accordance with such Sections,
including calculations in reasonable detail, shall be delivered to the Borrower
and shall be conclusive absent manifest error. The Borrower shall pay each Bank,
the Swingline Lender or the Issuing Bank the amount shown as due on any such
certificate delivered by it within 10 Business Days after its receipt of the
same.
Section 2.22 Use of Proceeds. The proceeds of the Revolving Loans made on
the Closing Date shall be used to refinance and replace the Existing Credit
Facility and for the Borrower's general corporate purposes and the proceeds of
Loans made thereafter shall be used for the Borrower's general corporate
purposes.
Section 2.23 Extension of Maturity Date. The Maturity Date shall be subject
to extension as set forth in this Section 2.23.
(a) Request for Extension of Maturity Date. Notwithstanding anything
contained in this Agreement to the contrary, not later than 30 days prior to
each anniversary of the Closing Date, the Borrower may, by delivery of a duly
completed extension request to the Agent in the form of Exhibit F hereto (an
"Extension Request"), which Extension Request must be accompanied by the most
recent financial statements required to be delivered hereunder, irrevocably
request that each Bank extend the Maturity Date to a date up to but not beyond 5
years after such anniversary.
(b) Consent to Extension of Maturity Date.
(i) The Agent shall, promptly after receipt of any such Extension
Request pursuant to subsection (a) above, notify each Bank by providing them a
copy of the Extension Request.
(ii) Each Bank shall, within 30 days of receipt of the Extension
Notice, notify the Agent whether it consents to the request of the Borrower set
forth in such Extension Request, such consent to be in the sole discretion of
such Bank. If any Bank does not so notify the Agent of its decision within such
30 day period, such Bank shall be deemed to have not consented to such request
of the Borrower.
(iii) The Agent shall promptly notify the Borrower whether the
38
Banks have consented to such request. If the Agent does not so notify the
Borrower within 30 days of such Extension Request, the Agent shall be deemed to
have notified the Borrower that the Banks have not consented to the Borrower's
request.
(iv) Each Bank that elects not to extend the Maturity Date or
fails to so notify the Agent of such consent (a "Non-Consenting Bank") hereby
agrees that if any other Bank or financial institution acceptable to the
Borrower and the Agent offers to purchase such Non-Consenting Bank's Revolving
Loan Commitment within sixty days after receipt of the related Extension Notice
for a purchase price equal to the sum of all amounts then owing with respect to
the Loans and all other amounts accrued for the account of such Non-Consenting
Bank, such Non-Consenting Bank will promptly assign, sell and transfer all of
its right, title, interest and obligations with respect to the foregoing to such
other Bank or financial institution pursuant to and on the terms specified in
the form of Transfer Supplement attached hereto as Exhibit H. Before assigning
to a financial institution other than a Bank pursuant to this clause (iv), each
Bank that has elected to extend the Maturity Date (a "Consenting Bank") shall
have the right, but not any obligation, pro rata with all other Consenting Banks
to purchase each such Non-Consenting Bank's Revolving Loan Commitment pursuant
to this clause (iv). The Consenting Banks who elect to purchase a Non-Consenting
Bank's Revolving Loan Commitment shall by mutual agreement determine the amount
of each Non-Consenting Bank's Revolving Loan Commitment being purchased by each
Consenting Bank, provided that if there is any dispute among the Consenting
Banks such purchase shall be based upon a pro rata sharing of each
Non-Consenting Bank's Revolving Loan Commitment. Only if the Consenting Banks
have determined not to purchase all of the Non-Consenting Bank's Revolving Loan
Commitment may financial institutions other than a Consenting Bank then purchase
such Non-Consenting Bank's Revolving Loan Commitment.
(v) Notwithstanding anything herein to the contrary, the Maturity
Date will not be extended unless all Banks have consented to the extension or if
another Bank or financial institution has agreed to purchase each such
Non-Consenting Bank's Revolving Loan Commitment pursuant to the terms of
clause(b)(iv) above and, concurrently with such purchase, consents to such
extension.
SECTION 2A. LETTERS OF CREDIT
Section 2A.1 Issuance of Letters of Credit. (a) Subject to and upon the
terms and conditions herein set forth, the Borrower may request the Issuing Bank
from time to time on any Business Day from the Closing Date until the Business
Day immediately preceding the Maturity Date to issue, and subject to and upon
the terms and conditions herein set forth, the Issuing Bank shall issue, for the
account of the Borrower, any Letter of Credit.
(b) Notwithstanding the foregoing, (i) no Letter of Credit shall be
issued if the issuance of such Letter of Credit would cause the aggregate amount
outstanding
39
at any time of all Letter of Credit Outstandings to exceed the lesser of (x) the
Total Commitment then in effect minus the aggregate principal amount of the
Revolving Loans, Swingline Loans and Competitive Bid Loans then outstanding and
(y) $10,000,000; (ii) each Letter of Credit shall at all times be in an amount
not less than $100,000; (iii) each Letter of Credit shall by its terms terminate
not later than 365 days after the date of issuance thereof and in any event not
later than the Maturity Date; (iv) each Letter of Credit shall by its terms only
be drawable in U.S. Dollars; (v) each Letter of Credit shall expressly provide
at least two Business Days, notice of drawing before payment under such Letter
of Credit shall be due; and (vi) each stand-by Letter of Credit shall expressly
provide that if an Event of Default shall have occurred and be continuing, the
Issuing Bank shall have the right to terminate such Letter of Credit upon 30
days' notice to the beneficiary thereof during which period of time such
beneficiary shall have the right to make a single drawing under such Letter of
Credit in an amount not to exceed the lesser of (x) the face amount of such
Letter of Credit at such time and (y) the outstanding Indebtedness supported by
such Letter of Credit.
(c) Whenever the Borrower desires that a Letter of Credit be issued
pursuant to Section 2A.1, the Borrower shall give the Issuing Bank not less than
10 Business Days' notice of the date of the proposed date of issuance of such
Letter of Credit and the Issuing Bank shall give to each Bank prompt notice of
such Letter of Credit Request. Each such notice (a "Letter of Credit Request")
shall be made by telephone, telecopy, telex or cable, confirmed immediately in
writing, in substantially the form of Exhibit G hereto, together with a signed
letter of credit application on the Issuing Bank's then-standard form (or other
form acceptable to the Issuing Bank and appropriate, in the sole opinion of the
Issuing Bank, in the circumstances), and may be cancelled by notice thereof
prior to issuance of such Letter of Credit by telephone, telecopy, telex or
cable, confirmed immediately in writing, to the Issuing Bank, which shall give
to each Bank prompt notice of such cancellation.
Section 2A.2 Participation in Letters of Credit. Effective upon the
issuance by the Issuing Bank of any Letter of Credit hereunder, each Bank
severally (and not jointly), irrevocably and unconditionally agrees to purchase
and receive, and does purchase and receive from the Issuing Bank, without
recourse or warranty, an undivided participation interest in such Letter of
Credit in a percentage equal to such Bank's Pro Rata Share.
Section 2A.3 Reimbursement of Letter of Credit Drawings. (a) In the event
that any drawing shall be made under a Letter of Credit, by demand or claim
(including, without limitation, draft), the Issuing Bank shall notify the
Borrower of such drawing and the Borrower shall reimburse the Issuing Bank in
immediately available funds for any amount paid by the Issuing Bank under such
Letter of Credit on the date of such payment, with interest on the amount so
paid or disbursed by the Issuing Bank, to the extent not reimbursed prior to
12:00 noon, Detroit time, on the date of such payment or disbursement, from and
including the date paid or disbursed to (but not including the date, if received
by the Issuing Bank prior to 12:00 noon, Detroit time) the date the
40
Issuing Bank was reimbursed therefor, at a rate per annum which shall be equal
to the Base Rate plus 2%, all such interest to be payable on demand.
Notwithstanding the first sentence of this Section 2A.3(a) in the event that any
drawing under a Letter of Credit is not reimbursed by the Borrower on the date
of payment by the Issuing Bank, and, pursuant to Sections 2.1 and 3.2 of this
Agreement, the Borrower is then permitted to obtain Revolving Loans under this
Agreement (without regard to the limitations set forth in Section 2.1(c)), the
Borrower shall be deemed to have requested a Borrowing of Revolving Loans
consisting of Base Rate Loans in an aggregate amount equal to such unreimbursed
payment. The Banks shall make the requested Revolving Loans as of the date of
such payment by the Issuing Bank, and the proceeds of such Revolving Loans shall
be paid to the Issuing Bank to reimburse the Issuing Bank for such drawing in
full. In the event that any drawing under a Letter of Credit is not reimbursed
by the Borrower on the date of payment by the Issuing Bank and, because of the
failure of the Borrower to meet the conditions set forth in Sections 2.1 and 3.2
of this Agreement, the Borrower is then not permitted to obtain Revolving Loans
thereunder, a default specified in Section 7.1(a) shall have occurred and the
Issuing Bank shall promptly notify each Bank. Immediately upon receipt of such
notice, the Revolving Loan Banks will pay to the Issuing Bank the amount of
their respective participations in the Letter of Credit. In the event that any
Bank fails timely to make the Revolving Loan or pay the amount of its
participation as required by this Section 2A.3(a), interest shall accrue thereon
at the overnight Federal Funds Rate from the date of payment by the Issuing Bank
to the date of repayment thereof by such Bank.
(b) The obligations of the Borrower and the Banks under Section
2A.3(a) shall be absolute, unconditional and irrevocable, and shall be performed
strictly in accordance with the terms thereof, under all circumstances
whatsoever, including the circumstances listed below:
(i) any setoff, counterclaim or defense to payment which the Borrower
may have or has had against the Issuing Bank or Banks;
(ii) any lack of validity or enforceability of any Letter of Credit,
any drawings thereunder or any related contract;
(iii) any statement or any other document presented under any Letter
of Credit that proves to be forged, fraudulent or invalid or insufficient in any
respect or any statement therein that proves to be untrue or inaccurate in any
respect whatsoever; or
(iv) payment by the Issuing Bank under any Letter of Credit against
presentation of a draft or certificate or other document that does not comply
with the terms of such Letter of Credit unless such payment by the Issuing Bank
constituted gross negligence or willful misconduct of the Issuing Bank.
(c) Any action taken or omitted to be taken by the Issuing Bank under
41
or in connection with any Letter of Credit, if taken or omitted to be taken in
the absence of gross negligence or willful misconduct, shall not put the Issuing
Bank under any resulting liability to any Bank or relieve that Bank of its
obligations hereunder to the Issuing Bank. In determining whether to pay under
any Letter of Credit, the Issuing Bank shall have no obligation to the Banks
other than to confirm that any documents required to be delivered under such
Letter of Credit appear to have been delivered and that they appear to comply on
their face with the requirements of such Letter of Credit.
Section 2A.4 Letter of Credit Fee. The Borrower agrees to pay to the
Issuing Bank (a) its standard issuance and negotiation fees, plus (b) a letter
of credit fee equal to the Applicable Margin per annum of the face amount of
each Letter of Credit for the term of each Letter of Credit for the account of,
and to be distributed by the Agent to, each Bank participating in such Letter of
Credit according to its Pro Rata Share of each such Letter of Credit, plus (c)
an additional fee of 0.05% per annum of the face amount of each solely for the
account of the Issuing Bank. Such letter of credit fees shall be nonrefundable
and shall be payable quarterly in arrears on each Payment Date. All such fees
shall be calculated on the basis of a 360 day year.
Section 2A.5 Increased Costs, Illegality. (a) In the event that the Issuing
Bank or any L/C Participant shall have determined (which determination shall,
absent manifest error, be final and conclusive and binding upon all parties
hereto) at any time that it shall incur increased costs or reductions in the
amounts received or receivable hereunder in respect of any Letter of Credit, in
any such case because of any change since the date hereof in any applicable law
or governmental rule, regulation, guideline or order or any interpretation
thereof or any directive or request related thereto and including the
introduction of any new law or governmental rule, regulation, guideline or order
(such as, for example but not limited to, a change in official reserve
requirements), whether or not having the force of law and/or other circumstances
affecting the Issuing Bank or such L/C Participant as a result of any such
change; then, and in any such event, the Issuing Bank or such L/C Participant
shall, promptly after making such determination, give notice (by telephone
promptly confirmed in writing) to the Borrower and (if applicable) the Issuing
Bank of such determination (which notice the Issuing Bank shall promptly
transmit to each of the Banks). Thereafter, the Borrower shall pay to the
Issuing Bank or such L/C Participant, upon notice by the Issuing Bank or L/C
Participant, as the case may be, in accordance with Section 2.21 therefor, such
additional amounts (in the form of an increased rate of interest, or a different
method of calculating interest, or otherwise, as the Issuing Bank or such L/C
Participant in its reasonable discretion shall determine) as shall be required
to compensate the Issuing Bank or such L/C Participant for such increased costs
or reduction in amounts received or receivable hereunder.
(b) In the case of any Letter of Credit or requested Letter of Credit
affected by the circumstances described above, the Borrower may, if any such
Letter of Credit has not yet been issued but is then the subject of a Letter of
Credit Request, be deemed to have cancelled and rescinded such Request,
provided, however, that all L/C
42
Participants whose participation in such Letter of Credit are affected by the
circumstances described in clause (a) above shall be treated in the same manner
under this clause (b).
SECTION 3. CONDITIONS PRECEDENT
Section 3.1 Conditions Precedent to Effectiveness. The effectiveness of
this Agreement and the obligation of each Bank to make Loans hereunder, the
obligation of the Swingline Lender to make Swingline Loans hereunder and the
obligation of the Issuing Bank to issue any Letter of Credit hereunder are
subject to the satisfaction on the Closing Date of the following conditions
precedent:
(a) Loan Documents.
(i) Credit Agreement. The Borrower and Holdings shall have executed
and delivered the Credit Agreement to the Agent and each of the Banks.
(ii) Notes. The Borrower shall have executed and delivered to each
Bank the Notes payable to such Bank.
(iii) Guaranty. Holdings shall have executed and delivered the
Holdings Guaranty to the Agent.
(b) Opinions of Counsel. The Agent and the Banks shall have received
legal opinions, dated the Closing Date, from (i) ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, counsel to
the Borrower, substantially in the form set forth as Exhibit H-1 and (ii)
Dickinson, Wright, Moon, Van Dusen & ▇▇▇▇▇▇▇, special counsel to the Agent,
substantially in the form set forth as Exhibit H-2.
(c) Corporate Documents. The Agent and the Banks shall have received
the Certificate of Incorporation (or its equivalent) of Holdings and the
Borrower, as amended, modified or supplemented to the Closing Date, certified to
be true, correct and complete by the appropriate Secretary of State as of a
recent date prior to the Closing Date, together with a good standing certificate
from such Secretary of State and a good standing certificate from the
Secretaries of State (or the equivalent thereof) of each other State in which
the Borrower is required to be qualified to transact business, each to be dated
the Closing Date or a recent date prior to the Closing Date.
(d) Certified Resolutions, etc. The Agent shall have received a
certificate of the Secretary or Assistant Secretary of each of Holdings and the
Borrower dated the Closing Date certifying (i) the names and true signatures of
their respective incumbent officers authorized to sign the applicable Loan
Documents and act as its representative for the purposes of signing documents
and giving notices and communications in connection therewith, (ii) their
respective By-Laws as in effect on the
43
Closing Date, (iii) the resolutions of their respective Boards of Directors
approving and authorizing the execution, delivery and performance of all Loan
Documents to which it is a party, and (iv) that there have been no changes in
their respective Certificates of Incorporation since the date of the
certification thereof by the appropriate Secretary of State referred to in
clause (c) above.
(e) Fees and Expenses. NBD shall have received, for its account and
for the account of each Bank, as applicable, all Fees and other fees and
expenses due and payable hereunder on or before the Closing Date.
(f) Additional Matters. The Agent and the Banks shall have received
such other certificates, opinions, documents and instruments relating to this
Agreement, the other Loan Documents and the transactions contemplated by this
Agreement as may have been reasonably requested by the Agent or any Bank
(including without limitation evidence of the termination of the Existing Credit
Facility and the delivery of any guaranties and other documents, if any,
required under Section 6.6(i)), and all corporate and other proceedings and all
other documents (including, without limitation, all documents referred to herein
and not appearing as exhibits hereto), and all matters in connection with this
Agreement, the other Loan Documents and the transactions contemplated by this
Agreement (including, without limitation, legal, tax, labor, benefit, and
environmental matters) shall be satisfactory to the Agent and the Banks.
Section 3.2 Conditions Precedent to All Loans and Issuance of Letters of
Credit. The obligation of each Bank to make any Loan, the obligation of the
Swingline Lender to make any Swingline Loan and the obligation of the Issuing
Bank to issue any Letter of Credit is subject to the satisfaction on or prior to
the date such Loan is made or such Letter of Credit is issued, as the case may
be, of the following conditions precedent:
(a) Representations and Warranties. The representations and warranties
contained herein and in the other Loan Documents (other than representations and
warranties which expressly speak only as of a specific date) shall be true and
correct in all material respects on the date such Loan is made or on the date
such Letter of Credit is issued, as the case may be, both before and after
giving effect to the making of such Loan or the issuance of such Letter of
Credit, as the case may be.
(b) No Default or Event of Default. No Default or Event of Default
shall have occurred and be continuing on such date, either before or after
giving effect to the making of such Loan or the issuance of such Letter of
Credit, as the case may be.
(c) No Injunction. No law or regulation shall have been adopted, and
no order, judgment or decree of any governmental authority shall have been
issued, which would enjoin, prohibit or restrain the making or repayment of the
Loans, the issuance of or the reimbursement for the Letters of Credit.
44
(d) Notice of Borrowing. In the case where any Loan is to be made, the
Agent and the Banks shall have received a fully executed Notice of Borrowing in
respect of the Loans to be made on such date in accordance with Section 2.1, 2.2
or 2.3, as appropriate.
(e) Letter of Credit Request. In the case where any Letter of Credit
is to be issued, the Issuing Bank shall have received a fully executed Letter of
Credit Request in respect of the Letter of Credit to be issued on such date in
accordance with Section 2A.1(a).
The acceptance of the proceeds of each Loan or the issuance of each Letter
of Credit shall constitute a representation and warranty by Holdings and the
Borrower to each of the Banks or the Issuing Bank, as the case may be, that all
of the conditions required to be satisfied under this Section 3 in connection
with the making of such Loan or the issuance of each Letter of Credit have been
satisfied.
In the case where any Loan is to be made, all of the Notes, certificates,
agreements, legal opinions and other documents and papers referred to in this
Section 3, unless otherwise specified, shall be delivered to the Agent, for the
account of each of the Banks and, except for the Notes, in sufficient
counterparts for each of the Banks, and shall be satisfactory in form and
substance to each of the Banks; and in the case where a Letter of Credit is to
be issued, all of the certificates, agreements, legal opinions and other
documents and papers referred to in this Section 3, unless otherwise specified,
shall be delivered to the Issuing Bank, in sufficient counterparts for each of
the Issuing Bank and the L/C Participants, and shall be satisfactory in form and
substance to the Issuing Bank and each of the L/C Participants.
SECTION 4. REPRESENTATIONS AND WARRANTIES
In order to induce the Banks to enter into this Agreement, to make the
Loans and to issue the Letters of Credit, Holdings and the Borrower make the
following representations and warranties, which shall survive the execution and
delivery of this Agreement and the Notes, the making of the Loans and the
issuance of the Letters of Credit until all obligations are indefeasibly repaid
in full and this Agreement and the Commitments are terminated:
Section 4.1 Corporate Status. Holdings, the Borrower and each of their
respective Subsidiaries (i) is a duly organized and validly existing corporation
in good standing under the laws of the jurisdiction of its organization, (ii)
has the power and authority to own its property and assets and to transact the
business in which it is engaged or presently proposes to engage and (iii) has
duly qualified and is authorized to do business and is in good standing in every
jurisdiction in which it owns or leases real property or in which the nature of
its business requires it to be so qualified.
45
Section 4.2 Corporate Power and Authority. Each of Holdings and the
Borrower has the corporate power and authority to execute, deliver and carry out
the terms and provisions of each of the Loan Documents to which it is a party
and has taken all necessary corporate action to authorize the execution,
delivery and performance by it of such Loan Documents. Each of Holdings and the
Borrower has duly executed and delivered each such Loan Document to which it is
a party, and each such Loan Document constitutes its legal, valid and binding
obligation, enforceable against it in accordance with its terms subject, as to
enforcement, to bankruptcy, insolvency, moratorium or other similar laws at the
time in effect relating to the enforceability of the rights of creditors
generally and to general principles of equity.
Section 4.3 No Violation. None of the execution, delivery or performance by
Holdings or the Borrower of the Loan Documents to which it is a party,
compliance by it with the terms and provisions thereof or the consummation of
the transactions contemplated thereby, (i) will contravene any applicable
provision of any law, statute, rule or regulation or any applicable order, writ,
injunction or decree of any court or governmental instrumentality or (ii) will
conflict or be inconsistent with or result in any breach of, any of the terms,
covenants, conditions or provisions of, or constitute a default under, or result
in the creation or imposition of (or the obligation to create or impose) any
Lien upon any of the property or assets of Holdings, the Borrower or any other
Subsidiaries pursuant to the terms of any indenture, mortgage, deed of trust, or
other material agreement or other instrument to which Holdings, the Borrower or
any such Subsidiary is a party or by which it or any of its property or assets
is bound or to which it may be subject, or (iii) will violate any provision of
the Certificate of Incorporation or By-Laws of the Borrower.
Section 4.4 Litigation. There are no actions, charges, grievances,
arbitrations, claims, suits or proceedings pending or, to Holdings' or the
Borrower's knowledge, threatened (including any condemnation or similar
proceeding) (i) with respect to any of the Loan Documents or (ii) except as set
forth in Schedule 4.4, that could, individually or in the aggregate, result in a
Material Adverse Effect.
Section 4.5 Financial Statements; Financial Condition; etc. The Borrower
has no material liability (contingent or otherwise) forward or long-term
commitments or anticipated losses from any unfavorable commitments not reflected
in the financial statements most recently made a part of the Borrower's Annual
Report filed on Form 10-K for the fiscal year ended December 31, 1996 and the
Quarterly Report filed on Form 10-Q for the fiscal quarter ended March 31, 1997
or in the notes thereto or on any other financial statements subsequently filed
with the annual or quarterly reports of Holdings on Forms 10-K or 10-Q, as the
case may be.
Section 4.6 Material Adverse Change. Since September 30, 1997, there has
occurred no material adverse change in the condition (financial or otherwise),
operation, assets, nature of assets, liabilities or prospects of Holdings, the
Borrower and their respective Subsidiaries, taken as a whole.
46
Section 4.7 Use of Proceeds; Margin Regulations. All proceeds of each Loan
will be used by the Borrower only in accordance with the provisions of Section
2.22. No part of the proceeds of any Loan will be used by the Borrower to
purchase or carry any Margin Stock or to extend credit to others for the purpose
of purchasing or carrying any Margin Stock. Neither the making of any Loan nor
the use of the proceeds thereof will violate or be inconsistent with the
provisions of Regulation G, T, U or X of the Federal Reserve Board.
Section 4.8 Governmental Approvals. No order, consent, approval, license,
authorization, or validation of, or filing, recording or registration with, or
exemption by, any governmental or public body or authority, or any subdivision
thereof, is required to authorize, or is required in connection with (i) the
execution, delivery and performance by Holdings or the Borrower of any Loan
Document or the consummation of any of the transactions contemplated thereby,
(ii) the legality, validity, binding effect or enforceability of any Loan
Document with respect to Holdings or the Borrower, except those that have
already been duly made or obtained and remain in full force and effect.
Section 4.9 Tax Returns and Payments. Each of Holdings, the Borrower and
the other Subsidiaries has filed all tax returns required to be filed by it and
has paid all taxes and assessments payable by it which have become due, other
than those not yet delinquent or those that are reserved against in accordance
with GAAP which are being diligently contested in good faith by appropriate
proceedings.
Section 4.10 ERISA. No accumulated funding deficiency (as defined in
Section 412 of the Code or Section 302 of ERISA) or Reportable Event has
occurred with respect to any Plan that could have a Material Adverse Effect.
There are no Unfunded Benefit Liabilities under any Plan that are reasonably
expected by Holdings or the Borrower to result in a Material Adverse Effect
within the next two calendar years from the date this representation and
warranty is made. Holdings, the Borrower and each member of their ERISA
Controlled Group have complied with the requirements of Section 515 of ERISA
with respect to each Multiemployer Plan and is not in "default" (as defined in
Section 4219(c)(5) of ERISA) with respect to payments to a Multiemployer Plan
that could have a Material Adverse Effect. The aggregate potential total
withdrawal liability, and the aggregate potential annual withdrawal liability
payments of the Borrower and the members of its ERISA Controlled Group as
determined in accordance with Title IV of ERISA as if the Borrower and the
members of its ERISA Controlled Group had completely withdrawn from all
Multiemployer Plans is not greater than $3,000,000 and $1,000,000, respectively.
To the best knowledge of Holdings and the Borrower, no Multiemployer Plan is or
is likely to be in reorganization (as defined in Section 4241 of ERISA or
Section 418 of the Code) or is insolvent (as defined in Section 4245 of ERISA),
in either case which could reasonably be expected to result in a Material
Adverse Effect. No material liability to the PBGC (other than required premium
payments) or to any Multiemployer Plan on account of a complete or partial
withdrawal therefrom has been, or is expected by Holdings and the Borrower to
be, incurred by Holdings and the Borrower or any member of their ERISA
Controlled
47
Group which could result in a Material Adverse Effect. No lien under Section
412(n) of the Code or 302(f) of ERISA or requirement to provide security under
Section 401(a)(29) of the Code or Section 307 of ERISA has been or is reasonably
expected by Holdings and the Borrower to be imposed on the assets of Holdings or
the Borrower or any member of their ERISA Controlled Group.
Section 4.11 Investment Company Act; Public Utility Holding Company Act.
Neither Holdings nor the Borrower is (x) an "investment company" or a company
"controlled" by an "investment company," within the meaning of the Investment
Company Act of 1940, as amended, (y) a "holding company" or a "subsidiary
company" of a "holding company" or an "affiliate" of either a "holding company"
or a "subsidiary company" within the meaning of the Public Utility Holding
Company Act of 1935, as amended, or (z) subject to any other federal or state
law or regulation which purports to restrict or regulate its ability to borrow
money.
Section 4.12 No Material Adverse Effect as of Closing Date. As of the
Closing Date, there is no fact, event or condition known to Holdings or the
Borrower which constitutes or could reasonably be expected to have a Material
Adverse Effect.
Section 4.13 Corporate Structure; Capitalization. Schedule 4.13 hereto sets
forth, as of the Closing Date, the number of authorized and issued shares of
capital stock or other equity interests, as the case may be, of each of
Holdings' and the Borrower's Subsidiaries and Double Eagle, the par value
thereof and the registered owner(s) thereof. All of such stock has been duly and
validly issued and is fully paid and non-assessable.
Section 4.14 Environmental Matters. (a) Except as set forth in Schedule
4.14, (i) each of Holdings and the Borrower, the other Subsidiaries and, to the
best of Holdings' and the Borrower's knowledge, their respective Environmental
Affiliates are in compliance with all applicable Environmental Laws except where
noncompliance could not have a Material Adverse Effect, (ii) each of Holdings,
the Borrower and the other Subsidiaries and, to the best of Holdings' and the
Borrower's knowledge, their respective Environmental Affiliates have all
material Environmental Approvals required to operate their businesses as
presently conducted or as reasonably anticipated to be conducted which the
failure to have could reasonably be expected to have a Material Adverse Effect,
(iii) none of Holdings, the Borrower or any of the other Subsidiaries, or, to
the best of Holdings' and the Borrower's knowledge, any of their respective
Environmental Affiliates has received any written communication, whether from a
governmental authority, citizens group, employee or otherwise, that alleges that
Holdings, the Borrower, any other such Subsidiary or such Environmental
Affiliate is not in full compliance with all Environmental Laws, which
noncompliance could reasonably be expected to have a Material Adverse Effect,
and (iv) to Holdings' and the Borrower's best knowledge after due inquiry, there
are no circumstances that may prevent or interfere with such full compliance in
the future, except such noncompliance which could not reasonably be expected to
have a Material Adverse Effect.
48
(b) Except as set forth in Schedule 4.14, to the best of Holdings' and
the Borrower's knowledge after due inquiry, there is no Environmental Claim
pending or threatened against Holdings, the Borrower, any of the other
Subsidiaries or any of their respective Environmental Affiliates which could
reasonably be expected to have a Material Adverse Effect.
(c) Except as set forth in Schedule 4.14, there are no past or present
actions, activities, circumstances, conditions, events or incidents, including,
without limitation, the release, emission, discharge or disposal of any Material
of Environmental Concern, that could form the basis of any Environmental Claim
against Holdings or the Borrower, any of the other Subsidiaries or, to the best
of Holdings' and the Borrower's knowledge, any of their respective Environmental
Affiliates, which Environmental Claim could reasonably be expected to have a
Material Adverse Effect.
Section 4.15 Patents, Trademarks, etc. Holdings, the Borrower and each of
the other Subsidiaries have obtained and hold in full force and effect all
patents, trademarks, servicemarks, trade names, copyrights and other such
rights, free from burdensome restrictions, which are necessary for the operation
of its business as presently conducted and which the failure to hold could
reasonably be expected to result in a Material Adverse Effect. To the best of
Holdings' and the Borrower's knowledge, no material product, process, method,
substance, part or other material presently sold by or employed by Holdings or
the Borrower or the other Subsidiaries in connection with such business
infringes any patent, trademark, service ▇▇▇▇, trade name, copyright, license or
other right owned by any other Person, which infringement could reasonably be
expected to result in a Material Adverse Effect. There is not pending or, to
Holdings' and the Borrower's knowledge, overtly threatened, any claim or
litigation against or affecting Holdings, the Borrower or any of the other
Subsidiaries contesting its right to sell or use any such product, process,
method, substance, part or other material.
Section 4.16 Ownership of Property. Holdings, the Borrower and each of the
other subsidiaries have good and valid title to or valid leasehold interests in
all of their material real property and good title to all of their personal
property subject to no Lien of any kind except Liens permitted hereby. Holdings,
the Borrower and each of the other Subsidiaries enjoy peaceful and undisturbed
possession under all of their material respective leases.
Section 4.17 No Default. None of Holdings, the Borrower or any other
Subsidiary is in default under or with respect to any agreement, instrument or
undertaking to which it is a party or by which it or any of its property is
bound in any respect, which default could reasonably be expected to result in a
Material Adverse Effect.
Section 4.18 Licenses, etc. Each of Holdings, the Borrower and the other
Subsidiaries have obtained and hold in full force and effect, all material
franchises,
49
licenses, permits, certificates, authorizations, qualifications, accreditations,
easements, rights of way and other rights, consents and approvals which are
necessary for the operation of their respective businesses as presently
conducted and which the failure to hold in full force and effect could
reasonably be expected to have a Material Adverse Effect.
Section 4.19 Compliance with Law. Holdings, the Borrower and each other
Subsidiary is in compliance with all laws, rules, regulations, orders,
judgments, writs and decrees except to the extent such non-compliance,
individually or in the aggregate, could not reasonably be expected to have a
Material Adverse Effect.
Section 4.20 No Burdensome Restrictions. None of Holdings, the Borrower nor
any other Subsidiary is a party to any agreement or instrument or subject to any
other obligation or any charter or corporate restriction which could reasonably
be expected to have a Material Adverse Effect.
Section 4.21 Property Rights, Services, etc. All services, means of
transportation, facilities and other materials necessary for the operation of
the Plant and the Power Plant at their designed capacities (including, without
limitation, as necessary, gas, electrical, water and sewage services and
facilities) are available to the Plant and the Power Plant and, to the extent
appropriate, arrangements have been made on commercially reasonable terms for
such services, means of transportation, facilities and other materials.
SECTION 5. AFFIRMATIVE COVENANTS
Each of Holdings and the Borrower covenants and agrees that on and after
the Closing Date, until the Total Commitment has terminated and the obligations
are paid in full:
Section 5.1 Information Covenants. Holdings and/or the Borrower will
furnish to each Bank:
(a) Quarterly Financial Statements. Within forty-five (45) days after
the close of each of the first three quarterly accounting periods in each fiscal
year of Holdings, the consolidated balance sheet of Holdings as at the end of
such quarterly period and the related consolidated statements of operations,
stockholders, equity (or deficiency) and cash flow for such quarterly period and
for the elapsed portion of the fiscal year ended with the last day of such
quarterly period, and in each case setting forth comparative figures for the
related periods in the prior fiscal year.
(b) Annual Financial Statements. Within ninety (90) days after the
close of each fiscal year of Holdings, the consolidated balance sheet of
Holdings as at the end of such fiscal year and the related consolidated
statements of operations,
50
stockholders, equity (or deficiency) and cash flow for such fiscal year,
certified without qualification by Price Waterhouse or other independent
certified public accountants of recognized national standing reasonably
acceptable to the Required Banks, in each case together with a report of such
accounting firm stating that in the course of its regular audit of the
consolidated financial statements of Holdings, which audit was conducted in
accordance with generally accepted auditing standards, such accounting firm has
obtained no knowledge of any Default or Event of Default, or if in the opinion
of such accounting firm such a Default or Event of Default has occurred and is
continuing, a statement as to the nature thereof.
(c) Management Letters. Promptly after Holdings' or the Borrower's
receipt thereof, a copy of any "management letter" or other material report
received by Holdings or the Borrower from its independent certified public
accountants.
(d) Budgets. Within sixty (60) days after the commencement of each
fiscal year of Holdings, a budget and financial forecast of results of
operations and sources and uses of cash (in form reasonably satisfactory to the
Required Banks) prepared by Holdings for such fiscal year (and, in any event,
covering the Borrower and each of the other Subsidiaries of Holdings),
accompanies by a written statement of the assumptions used in connection
therewith.
(e) Officer's Certificates. At the time of the delivery of the
financial statements under clauses (a) and (b) above, a certificate of the chief
financial officer of Holdings which certifies (x) that such financial statements
fairly present the financial condition and the results of operations of Holdings
on the dates and for the periods indicated, subject, in the case of interim
financial statements, to normally recurring yearend adjustments and (y) that
such officer has reviewed the terms of the Loan Documents and has made, or
caused to be made under his or her supervision, a review in reasonable detail of
the business and condition of Holdings, the Borrower and the other Subsidiaries
during the accounting period covered by such financial statements, and that as a
result of such review such officer has concluded that no Default or Event of
Default has occurred during the period commencing at the beginning of the
accounting period covered by the financial statements accompanied by such
certificate and ending on the date of such certificate or, if any Default or
Event of Default has occurred, specifying the nature and extent thereof and, if
continuing, the action Holdings or the Borrower proposes to take in respect
thereof. Such certificate shall set forth the calculations required to establish
(i) whether Holdings was in compliance with the provisions of Section 6.1 during
(with respect to Sections 6.1(a) and 6.1(b)) and as at the end of (with respect
to Section 6.1(c)) the accounting period covered by the financial statements
accompanied by such certificate, and (ii) a calculation of the Debt to
Capitalization Ratio for the last fiscal quarter covered by such financial
statements.
(f) Notice of Default or Litigation. Promptly, and in any event within
three Business Days after Holdings or the Borrower obtains knowledge thereof,
notice of (i) the occurrence of any Default or Event of Default, (ii) any
litigation or
51
governmental proceeding pending or threatened, or any material development in
any such litigation or proceeding, against the Borrower which could result in a
Material Adverse Effect and (iii) any other event, act or condition which could
reasonably be expected to result in a Material Adverse Effect.
(g) ERISA. (i) As soon as possible and in any event within 10 days
after Holdings or the Borrower knows, or has reason to know, a Reportable Event
or Termination Event or other condition with respect to any Multiemployer Plan
or ERISA Plan has occurred or will occur which, in any case, could reasonably be
expected to result in a Material Adverse Effect:
(ii) As soon as possible and in any event within three Business
Days after the receipt by Holdings, the Borrower or any member of their ERISA
Controlled Group of a demand letter from the PBGC notifying Holdings or the
Borrower or such member of their ERISA Controlled Group of its final decision
finding liability and the date by which such liability must be paid, a copy of
such letter, together with a certificate of the president or chief financial
officer of Holdings and the Borrower setting forth the action which Holdings and
the Borrower or such member of their ERISA Controlled Group proposes to take
with respect thereto.
(h) SEC Filings. Promptly after the filing thereof, copies of all
regular and periodic financial information, proxy materials and other
information and reports described on Schedule 5.1(h), if any, which Holdings or
the Borrower or any other Subsidiary shall file with the Securities and Exchange
Commission or any governmental agency substituted therefor or which Holdings,
the Borrower or any such other Subsidiary shall send to its stockholders
generally.
(i) Environmental Notices. Promptly, and in any event within ten
Business Days after becoming aware of the existence of any of the following
conditions, a certificate of the chief executive officer or chief financial
officer of Holdings or the Borrower specifying in detail the nature of such
condition and the proposed response thereto: (i) the receipt by Holdings, the
Borrower or any other Subsidiary or any of their respective Environmental
Affiliates of any written communication that alleges that Holdings, the Borrower
or such Subsidiary or such Environmental Affiliate is not in compliance with
applicable Environmental Laws, which noncompliance could reasonably be expected
to have a Material Adverse Effect, (ii) Holdings, the Borrower or any other
Subsidiary or any of their respective Environmental Affiliates shall obtain
actual knowledge that there exists any Environmental Claim pending or threatened
against such Person, which could reasonably be expected to have a Material
Adverse Effect, or (iii) any release, emission, discharge or disposal of any
Material of Environmental Concern that could form the basis of any Environmental
Claim against Holdings, the Borrower or any other Subsidiary or any of their
respective Environmental Affiliates, which Environmental Claim could reasonably
be expected to have a Material Adverse Effect.
52
(j) Other Information. From time to time, such other information or
documents (financial or otherwise) as any Bank may reasonably request.
Section 5.2 Books, Records and Inspections. Holdings and the Borrower
shall, and shall cause each other Subsidiary to, keep proper books of record and
account in which full, true and correct entries in conformity with GAAP and all
requirements of law shall be made of all dealings and transactions in relation
to its business and activities. Holdings and the Borrower shall, and shall cause
each other Subsidiary to, permit officers and designated representatives of the
Agent and any Bank to visit and inspect any of the properties of Holdings, the
Borrower or any other Subsidiary, and to examine the books of record and
accounts of Holdings, the Borrower or any other Subsidiary, and discuss the
affairs, finances and accounts of Holdings, the Borrower or any other Subsidiary
with, and be advised as to the same by, its and their officers and independent
accountants, all upon reasonable prior notice and at such reasonable times as
the Agent or such Bank may desire.
Section 5.3 Maintenance of Insurance. Holdings and the Borrower shall, and
shall cause each other Subsidiary to, maintain in effect the insurance listed on
Schedule 5.3 hereto with financially sound and reputable insurance companies.
The insurance policies and coverage listed and described thereon shall not be
altered or cancelled without the prior consent of the Required Banks if, as a
result thereof, Holdings and the Borrower shall fail to maintain insurance with
such coverages as is customary for companies in the same general area engaged in
the same or similar business.
Section 5.4 Taxes. Holdings and the Borrower shall pay or cause to be paid,
and shall cause each other Subsidiary to pay or cause to be paid, when due, all
taxes, charges and assessments and other lawful claims required to be paid by
Holdings, the Borrower or any such other Subsidiary, except as contested in good
faith and by appropriate proceedings diligently conducted, if adequate reserves
have been established with respect thereto in accordance with GAAP.
Section 5.5 Corporate Franchises. Holdings and the Borrower shall, and
shall cause each other Subsidiary to, do or cause to be done, all things
necessary to preserve and keep in full force and effect its existence and its
patents, trademarks, service marks, trade names, copyrights, franchises,
licenses, permits, certificates, authorizations, qualifications, accreditations,
easements, rights of way and other rights, consents and approvals except where
the failure to so preserve any of the foregoing could not, individually or in
the aggregate, reasonably be expected to result in a Material Adverse Effect.
Section 5.6 Compliance with Law. Holdings and the Borrower shall, and
shall cause each other Subsidiary to and shall use their best efforts to cause
Double Eagle to, comply with all applicable laws, rules, statutes, regulations,
decrees and orders of, and all applicable restrictions imposed by, all
governmental bodies, domestic or foreign,
53
in respect of the conduct of their business and the ownership of their property,
including, without limitation, all Environmental Laws, except such
non-compliance as could not, individually or in the aggregate, reasonably be
expected to result in a Material Adverse Effect.
Section 5.7 Performance of Obligations. Holdings and the Borrower shall,
shall cause each other Subsidiary to and shall use their best efforts to cause
Double Eagle to, perform in all material respects all of their respective
obligations and preserve and protect in all material respects its rights under
the terms of each mortgage, indenture, security agreement, debt instrument,
lease, undertaking and contract by which it or any of its properties is bound or
to which it is a party if the failure to so perform could, individually or in
the aggregate, reasonably be expected to result in a Material Adverse Effect.
Section 5.8 Maintenance of Properties. Holdings and the Borrower shall,
shall cause each other Subsidiary to and shall use its best efforts to cause
Double Eagle to, ensure that its material properties used or useful and
necessary in its business are kept in good repair, working order and condition,
normal wear and tear excepted, provided that neither Holdings, the Borrower nor
any other Subsidiary shall be required to maintain, repair or improve any such
property which in its good faith opinion is obsolete, surplus, unfit for use or
cannot be advantageously employed in the conduct of its business.
Section 5.9 Environmental Matters. (a) Upon the occurrence of any release,
emission, discharge or disposal of any Material of Environmental Concern which
could reasonably be expected to form the basis of an Environmental Claim against
Holdings, the Borrower, any other Subsidiary or any Environmental Affiliate,
which occurrence could reasonably be expected to result in a Material Adverse
Effect, Holdings and the Borrower shall, and shall cause each such other
Subsidiary or Environmental Affiliate to, (i) take all necessary steps and
actions to initiate and expeditiously complete all required remedial actions in
connection therewith, and (ii) keep the Agent informed of such actions and the
results thereof.
(b) Obtain and keep in full force and effect all Environmental
Approvals necessary or required for the management, use, control, ownership or
operations of its business, property or assets, unless the failure to so obtain
and keep in full force and effect any such Environmental Approval could not
reasonably be expected to have a Material Adverse Effect.
SECTION 6. NEGATIVE COVENANTS
Each of Holdings and the Borrower covenants and agrees that on and after
the Closing Date, until the Total Commitment has terminated and the obligations
are paid in full:
54
Section 6.1 Financial Covenants.
(a) Debt to Capitalization Ratio. Holdings shall not at any time
permit the Debt to Total Capitalization Ratio to be greater than 0.45 to 1.0.
(b) Net Worth. Holdings shall not at any time permit its Net Worth to
be less than an amount equal to the sum of (i) $376,684,000 plus (ii) the
aggregate of the Annual Increase for each fiscal year of Holdings that shall
have elapsed during the period from January 1, 1997 through the date as at which
compliance with this subsection (b) is being determined, such Annual Increase to
be added as of each December 31, commencing December 31, 1997.
(c) Interest Coverage Ratio. Holdings shall not, as of the end of each
fiscal quarter, permit the Interest Coverage Ratio for such fiscal quarter to be
less than 3.0 to 1.0, in each case as calculated for the four consecutive fiscal
quarters then ending.
Section 6.2 Liens. Holdings and the Borrower shall not, and shall not
permit any other Subsidiary to, create, incur, assume or suffer to exist,
directly or indirectly, any Lien on any of its property now owned or hereafter
acquired, other than:
(a) Liens existing on the Closing Date and set forth on Schedule 6.2
hereto;
(b) Liens for taxes not yet due or which are being contested in good
faith by appropriate proceedings diligently conducted and with respect to which
adequate reserves are being maintained in accordance with GAAP;
(c) Statutory Liens of landlords and Liens of carriers, warehousemen,
mechanics, materialmen and other Liens arising by operation of Law, in each case
created in the ordinary course of business for amounts not yet due or which are
being contested in good faith by appropriate proceedings diligently conducted
and with respect to which adequate reserves have been established;
(d) Liens incurred or deposits made in the ordinary course of business
in connection with workers, compensation, unemployment insurance and other types
of social security, or to secure the performance of tenders, statutory
obligations, surety and appeal bonds, bids, leases, government contracts,
performance and return-of-money bonds and other similar obligations (exclusive
of obligations for the payment of borrowed money);
(e) Easements, rights-of-way, zoning and similar restrictions and
other similar charges or encumbrances not interfering with the ordinary conduct
of the business of Holdings, the Borrower or any other Subsidiary and which do
not detract materially from the value of the property to which they attach or
impair materially the
55
use thereof by Holdings, the Borrower or any such Subsidiary;
(f) Liens created pursuant to Capitalized Leases to the extent the
Borrower is in compliance with Section 6.1, provided that such Liens are only in
respect of the property or assets subject to, and secure only, the respective
Capitalized Lease;
(g) subject to compliance with Section 6.1, Liens existing on property
or assets of a Person immediately prior to its becoming a Subsidiary of Holdings
or the Borrower and which Lien was not created, incurred or assumed by such
Person in anticipation thereof, provided that such Lien shall at all times be
confined solely to the property subject thereto at the time such Person becomes
a Subsidiary of Holdings or the Borrower;
(h) Liens securing Indebtedness of the Borrower or any other
Subsidiary (and any refinancings, refundings, renewals or extensions thereof on
terms no less favorable (taken as a whole) to the Borrower or such other
Subsidiary, as the case may be, provided that the principal amount of such
Indebtedness is not increased) incurred after the Closing Date solely for the
purpose of financing an acquisition by the Borrower or such other Subsidiary of
real or personal property or the cost of construction or improvements to or on
such property, or Liens existing on such property so acquired at the time of
acquisition thereof, provided that:
(i) each such Lien shall at all times be confined solely to the
property so acquired;
(ii) the principal amount of Indebtedness secured by each such Lien
shall at no time exceed the lesser of (A) the cost to such Person of the
property subject thereto or (B) the fair value of such property (as determined
in good faith by the Board of Directors of the Borrower or such other
Subsidiary, as the case may be), at the time of the acquisition thereof or
completion of construction thereon;
(iii) the aggregate principal amount of all Indebtedness secured by
all such Liens shall not exceed $10,000,000; and
(i) Liens not otherwise permitted pursuant to subclauses (a) through
(h) above securing Indebtedness not in excess of $10,000,000 in the aggregate at
any time outstanding; and
(j) Liens securing Non-Recourse Debt, provided such Liens do not
secure in excess of $30,000,000 aggregate principal amount of Non-Recourse Debt
(plus accrued interest thereon).
Section 6.3 Restriction on Fundamental Changes. (a) Holdings and the
Borrower shall not, and shall not permit any other Subsidiary to, enter into any
merger or consolidation, or liquidate, wind-up or dissolve (or suffer any
liquidation or
56
dissolution), discontinue its business or convey, lease, sell, transfer or
otherwise dispose of, in one transaction or series of transactions, all or
substantially all of its assets, whether now or hereafter acquired, except as
otherwise permitted under Section 6.4, provided that (x) Holdings or the
Borrower may consolidate or merge with any other Person if (i) Holdings or the
Borrower, as the case may be, shall be the surviving or continuing entity, (ii)
at the time of such consolidation or merger and after giving effect thereto, no
Default shall have occurred and be continuing, (iii) such other Person shall be
primarily engaged in the business of manufacturing and/or processing steel or
steel-related products and (iv) the Agent and the Banks shall have received a
certificate from an Authorized Officer of the Borrower certifying that, after
giving effect to such merger or consolidation, there is no reasonable likelihood
of a Material Adverse Effect resulting therefrom and (y) any Subsidiary of
Holdings (other than the Borrower) may merge with or into any other Subsidiary
of Holdings (other than the Borrower).
(b) Holdings and the Borrower shall not, and shall not permit any
other Subsidiary to, (i) acquire, by purchase or otherwise any other Person
(regardless of whether such transaction is structured as a sale of stock or
assets), or (ii) enter into any partnership or joint venture (other than any
partnership or joint venture in existence on the Closing Date), provided that
Holdings, the Borrower or any other Subsidiary may (x) so acquire any other
Person if (i) at the time of such acquisition and after giving effect thereto,
no Default or Event of Default shall have occurred and be continuing, (ii) the
Person which is being acquired shall be primarily engaged in the business of
manufacturing and/or processing steel or steel-related products and (iii) there
is no reasonable likelihood of a Material Adverse Effect resulting therefrom and
(y) enter into a partnership or joint venture if such partnership or joint
venture (each, a "New JV") shall be primarily engaged in the business of
manufacturing and/or processing steel or steel-related products and, after
giving effect to such New JV, there is no reasonable likelihood of a Material
Adverse Effect resulting therefrom.
(c) Holdings and the Borrower shall not, and shall not permit any
other Subsidiary to, amend or modify its certificate of incorporation or by-laws
or, in the case of the Double Eagle, its Joint Venture Agreement if such
amendment or modification could have a Material Adverse Effect.
(d) Holdings and the Borrower shall not, and shall not permit any
other Subsidiary to, be or become a "holding company" or a "subsidiary company"
of a "holding company" or a "subsidiary company" within the meaning of the
Public Utility Holding Company Act of 1935, as amended.
(e) Neither Holdings nor the Borrower shall have or create any
Subsidiaries except those set forth on Schedule 6.3(e) or otherwise permitted to
be formed pursuant to, and subject to the terms and provisions of, Section
6.6(i).
Section 6.4 Sale of Assets. Holdings and the Borrower shall not, and shall
not permit any other Subsidiary to, convey, lease, sell, transfer or otherwise
dispose of (or
57
agree to do so at any future time) all or any part of its property or assets and
shall not enter into, or agree to, any transaction involving or in connection
with the sale and/or securitization of any of its receivables, except (i) sales
of inventory in the ordinary course of business, (ii) sales of equipment or
other assets which are uneconomic, obsolete or no longer useful in its business,
(iii) sales of assets described on Schedule 6.4 hereof for not less than the
fair market value (as determined by Holdings, or the Borrower's Board of
Directors in good faith), (iv) the sale or other disposition of other assets in
an aggregate amount not to exceed $25,000,000 (based on the fair market value of
such assets at the time of such sale or other disposition) during the term of
this Agreement and until all obligations are paid in full and (v) the Borrower
may transfer all of its interests in any joint venture or Subsidiary, including
Double Eagle, existing on the Closing Date to Holdings or to any wholly-owned
Subsidiary of Holdings.
Section 6.5 Dividends. Holdings and the Borrower shall not, and shall not
permit any other Subsidiary to, declare or pay any dividends (other than
dividends payable solely in common stock), or return any capital to, its
stockholders or authorize or make any other distribution, payment or delivery of
property or cash to its stockholders as such, or redeem, retire, purchase or
otherwise acquire, directly or indirectly, any shares of any class of its
capital stock now or hereafter outstanding (or any options or warrants issued
with respect to its capital stock), or set aside any funds for any of the
foregoing purposes (all the foregoing "Dividends"), except that if no Default or
Event of Default shall have occurred and shall be continuing after giving effect
thereto, (i) dividends may be made on Holdings' common stock in an aggregate
amount in any fiscal year not to exceed the greater of (A) $8,000,000 and (B)
50% of the cumulative consolidated Net Income (if positive) of Holdings for the
immediately preceding four fiscal quarters, (ii) dividends may be made to
Holdings by the Borrower or any other Subsidiary, (iii) dividends may be made on
any preferred stock issued by Holdings or the Borrower, if in each case, after
giving effect thereto, Holdings and the Borrower shall be in compliance with
Section 6.1, (iv) Holdings may make purchases of its common stock in the open
market at the then prevailing market prices solely for the purposes of matching
contributions of any employee benefit or other similar type plan now or
hereafter maintained by the Borrower, and (v) Holdings and the Borrower may
repurchase shares of its common stock and options and warrants thereon granted
to employees and directors of Holdings and the Borrower in accordance with the
terms of any employee benefit or other similar type plan now or hereafter
maintained by Holdings and the Borrower.
Section 6.6 Advances, Investments and Loans. Holdings and the Borrower
shall not, and shall not permit any other Subsidiary to, lend money or credit or
make advances to any Person, or directly or indirectly purchase or acquire any
stock, obligations or securities of, or any other interest in, or make any
capital contribution to, any Person, except that the following shall be
permitted:
(a) accounts receivable, if created or acquired in the ordinary course
of business and payable or dischargeable in accordance with customary trade
terms;
58
(b) loans and advances to Holdings or any of its Subsidiaries by any
of its Subsidiaries;
(c) loans and advances by Holdings to any of its Subsidiaries;
(d) loans and advances in cash to, or the provision of credit in the
nature of guarantees for the benefit of, Double Eagle and any New JV in an
aggregate outstanding amount not to exceed the greater of (i) $55,000,000 and
(ii) 10% of Tangible Net Worth;
(e) loans and advances by Holdings or any Subsidiary to their
employees in the ordinary course of its business not exceeding $250,000 in the
aggregate at any one time outstanding;
(f) Holdings, the Borrower and the other Subsidiaries may acquire and
hold Cash Equivalents;
(g) transactions permitted pursuant to Sections 6.3(a) and 6.3(b);
(h) capital contributions by Holdings to Double Eagle to the extent
necessary to fund its operating expenses incurred in the ordinary course of
business and to fund capital expenditures of Double Eagle; and
(i) capital contributions solely in cash to any newly formed
Subsidiary, provided, however, that if any such capital contributions exceeds
$10,000,000 in the aggregate to all such Subsidiaries, Holdings shall cause each
such Subsidiary to guaranty the Obligations to the extent of the total amount of
capital contributions to any such Subsidiary, and Holdings shall cause to be
delivered to the Agent a guaranty agreement in form and substance satisfactory
to the Agent and the Banks, together with such other documents and opinions of
counsel in connection with the foregoing as may be reasonably requested by the
Agent or its counsel.
Section 6.7 Transactions with Affiliates. Holdings and the Borrower shall
not, shall not permit any other Subsidiary to and shall use their best efforts
to not permit Double Eagle or any New JV, to enter into any transaction or
series of related transactions, whether or not in the ordinary course of
business, with any Affiliate (other than Worthington, Double Eagle or any New
JV), other than on terms and conditions at least as favorable to Holdings or the
Borrower or such Subsidiary as would be obtainable by Holdings or the Borrower
or such Subsidiary at the time in a comparable arm's-length transaction with a
Person other than an Affiliate, except as set forth in Schedule 6.7 and except
that the Borrower may purchase pellets from Eveleth Mines for use in the
Borrower's business.
Section 6.8 Changes in Business. Holdings and the Borrower shall not, shall
not permit any other Subsidiary to and shall use its best efforts to not permit
Double
59
Eagle or any New JV to, enter into any business which is substantially
different from that conducted by Holdings, the Borrower, such Subsidiary, Double
Eagle or any New JV which is in existence on the Closing Date, as the case may
be, on the Closing Date.
Section 6.9 Certain Restrictions. Holdings and the Borrower shall not,
shall not permit any other Subsidiary to, and shall use their best efforts to
not permit Double Eagle or any New JV to, enter into any agreement which
restricts the ability of Holdings, the Borrower, any Subsidiary, any such New JV
or the Double Eagle, as the case may be, to (a) enter into amendments,
modifications or waivers of the Loan Documents, (b) sell, transfer or otherwise
dispose of its assets, (c) create, incur, assume or suffer to-exist any Lien
upon any of its property, (d) create, incur, assume, suffer to exist or
otherwise become liable with respect to any Indebtedness, or (e) pay any
Dividend; provided, however, (i) agreements governing Indebtedness secured by
any Lien permitted pursuant to Section 6.2(a), (f), (g), (h) or (j) which
contain restrictions of the types referred to in clauses (b) or (c) with respect
to the property secured thereby shall be permitted and (ii) any such agreements
may contain the restriction of the types referred to herein to the extent such
restrictions are not more restrictive to Holdings, the Borrower, its
Subsidiaries, such New JV or Double Eagle than those set forth in this
Agreement.
Section 6.10 Fiscal Year; Fiscal Quarter. Holdings and the Borrower shall
not, and shall not permit any Subsidiary to, change its fiscal year or any
fiscal quarter.
Section 6.11 Plans. Holdings and the Borrower shall not, and shall not
permit any member of their ERISA Controlled Group to, take any action which
would increase the aggregate present value of the Unfunded Benefit Liabilities
under all Plans to an amount in excess of 10% of Plan Assets.
SECTION 7. EVENTS OF DEFAULT
Section 7.1 Events of Default. Each of the following events, acts,
occurrences or conditions shall constitute an Event of Default under this
Agreement, regardless of whether such event, act, occurrence or condition is
voluntary or involuntary or results from the operation of law or pursuant to or
as a result of compliance by any Person with any judgment, decree, order, rule
or regulation of any court or administrative or governmental body:
(a) Failure to Make Payments. The Borrower shall default in the
payment when due of any principal of or interest on the Loans, or fail to
reimburse the Issuing Bank for any payment or disbursement made by the Issuing
Bank under any Letter of Credit on the date so made in accordance with Section
2A, or any Fees or any other amounts owing hereunder or under any other Loan
Document; and such default (except in the case of a failure to make payment of
any principal on the Loans and to reimburse for the drawings made under any
Letter of Credit) shall continue unremedied
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for a period of five (5) days.
(b) Breach of Representation or Warranty. Any representation or
warranty made by Holdings or the Borrower herein or in any other Loan Document
or in any certificate or statement delivered pursuant hereto or thereto shall
prove to be false or misleading in any material respect on the date as of which
made or deemed made.
(c) Breach of Covenants.
(i) Holdings or the Borrower shall fail to perform or observe any
agreement, covenant or obligation arising under Sections 5.1(f), 5.9 and 6.1
through 6.11.
(ii) Holdings or the Borrower shall fail to perform or observe any
agreement, covenant or obligation arising under this Agreement (except those
described in clauses (a), (b) and (c)(i) above), and such failure shall continue
for thirty (30) days.
(iii) Holdings, the Borrower or any other Subsidiary shall fail to
perform or observe any agreement, covenant or obligation arising under any
provision of the Loan Documents other than this Agreement, which failure shall
continue after the end of the applicable grace period provided, if any, therein.
(d) Default Under Other Agreements. Holdings or the Borrower shall
default in the payment when due (whether by scheduled maturity, required
prepayment, acceleration, demand or otherwise), of any amount owing in respect
of any Indebtedness (other than the Obligations) which, individually or in the
aggregate, equals or exceeds $5,000,000; or Holdings or the Borrower shall
default in the performance or observance of any obligation or condition with
respect to any such Indebtedness or any other event shall occur or condition
shall exist, if the effect of such default or event or condition is to
accelerate the maturity of any such Indebtedness or to permit (after giving
effect to any applicable grace period) the holder or holders thereof, or any
trustee or agent for such holders, to accelerate the maturity of any such
Indebtedness, or any such Indebtedness shall become or be declared to be due and
payable prior to its stated maturity.
(e) Bankruptcy, etc. (i) Holdings, the Borrower or any other
Significant Subsidiaries shall commence a voluntary case concerning itself under
the Bankruptcy Code; or (ii) an involuntary case is commenced against Holdings,
the Borrower or any other Significant Subsidiaries and the petition is not
dismissed within 60 days after commencement of the case; or (iii) a custodian
(as defined in the Bankruptcy Code) is appointed for, or takes charge of, all or
substantially all of the property of Holdings, the Borrower or any other
Significant Subsidiaries or Holdings, the Borrower or any other Significant
Subsidiaries commences any other proceedings under any reorganization,
arrangement, adjustment of debt, relief of debtors, dissolution, insolvency or
liquidation
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or similar law of any jurisdiction whether now or hereafter in effect relating
to Holdings, the Borrower or such Significant Subsidiaries or there is commenced
against Holdings, the Borrower or any other Significant Subsidiaries any such
proceeding which remains undismissed for a period of 60 days; or (iv) any order
of relief or other order approving any such case or proceeding is entered; or
(v) Holdings, the Borrower or any other Significant Subsidiaries is adjudicated
insolvent or bankrupt; or (vi) Holdings, the Borrower or any other Significant
Subsidiaries suffers any appointment of any custodian or the like for it or any
substantial part of its property to continue undischarged or unstayed for a
period of 60 days; or (vii) Holdings, the Borrower or any other Significant
Subsidiaries makes a general assignment for the benefit of creditors; or (viii)
Holdings, the Borrower or any other Significant Subsidiaries shall fail to pay,
or shall state in writing that it is unable to pay, or shall be unable to pay,
its debts generally as they become due; or (ix) Holdings, the Borrower or any
other Significant Subsidiaries shall by any act or failure to act consent to,
approve of or acquiesce in any of the foregoing; or (x) any corporate action is
taken by Holdings, the Borrower or any other Significant Subsidiaries for the
purpose of effecting any of the foregoing.
(f) ERISA. (i) Any Termination Event shall occur, or (ii) any Plan
(other than a Multiemployer Plan) shall incur an "accumulated funding
deficiency" (as defined in Section 412 of the Code or Section 302 of ERISA),
whether or not waived or (iii) Holdings, the Borrower or a member of their ERISA
Controlled Group shall have engaged in a transaction which is prohibited under
Section 4975 of the Code or Section 406 of ERISA which would result in the
imposition of liability in excess of $100,000 on Holdings, the Borrower or any
member of their ERISA Controlled Group, or (iv) Holdings, the Borrower or any
member of their ERISA Controlled Group shall fail to pay when due an amount
which it shall have become liable to pay to the PBGC, any Plan or a trust
established under Title IV of ERISA, or (v) a condition shall exist by reason of
which the PBGC would then be entitled to obtain a decree adjudicating that an
ERISA Plan must be terminated or have a trustee appointed to administer any
ERISA Plan, or (vi) Holdings, the Borrower or a member of their ERISA Controlled
Group suffers a partial or complete withdrawal from a Multiemployer Plan; where
the events or conditions described in the preceding clauses (i) through (vi)
individually or in the aggregate would result in liability of $5,000,000 or
more.
(g) Change in Control. A Change in Control has occurred.
(h) Judgments. One or more judgments or decrees (including those
resulting from an Environmental Claim) in an aggregate amount of $5,000,000 or
more shall be entered by a court or courts of competent jurisdiction against
Holdings, the Borrower or any other Subsidiary (other than any judgment as to
which, and to the extent, a reputable insurance company has acknowledged
coverage of such claim in writing) and (i) any such judgment or decree shall not
be stayed, discharged, paid, bonded or vacated within 30 days thereof or (ii)
enforcement proceedings shall be commenced by any creditor on any such judgment
or decree and such proceedings shall not be stayed or bonded within 5 days.
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(i) Guaranty. The Holdings Guaranty, or any other guaranty agreement
delivered pursuant to the terms of Section 6.6(i) of this Agreement, shall cease
to be in full force and effect and enforceable or Holdings, or any other
guarantor party to any such guaranty agreement, as the case may be, shall
disaffirm or disavow its obligations thereunder.
Section 7.2 Rights and Remedies. Upon the occurrence of any Event of
Default described in Section 7.1(e), the Commitments shall automatically and
immediately terminate and the unpaid principal amount of and any and all accrued
interest on the Loans and any and all accrued Fees and other Obligations shall
automatically become immediately due and payable, with all additional interest
from time to time accrued thereon and without presentation, demand, or protest
or other requirements of any kind (including, without limitation, valuation and
appraisement, diligence, presentment, notice of intent to demand or accelerate
and notice of acceleration), all of which are hereby expressly waived by
Holdings and the Borrower, and the obligation of each Bank to make any Loan
hereunder shall thereupon terminate; and upon the occurrence and during the
continuance of any other Event of Default, the Agent shall at the request, or
may with the consent, of the Required Banks, by written notice to the Borrower,
(i) declare that the Revolving Loan Commitments are terminated, whereupon the
Revolving Loan Commitments and the obligation of each Bank to make any Loan
hereunder shall immediately terminate, (ii) declare the unpaid principal amount
of and any and all accrued and unpaid interest on the Loans and any and all
accrued Fees and other obligations to be, and the same shall thereupon be,
immediately due and payable with all additional interest from time to time
accrued thereon and without presentation, demand, or protest or other
requirements of any kind (including, without limitation, valuation and
appraisement, diligence, presentment, notice of intent to demand or accelerate
and notice of acceleration), all of which are hereby expressly waived by the
Borrower, (iii) terminate any stand-by Letter of Credit upon 30 days, written
notice to the Borrower and the beneficiary thereunder, and (iv) demand the
Borrower to deposit (and the Borrower agrees that upon receipt of such demand it
will promptly deposit) with the Agent cash or Cash Equivalents of the type
described in subclauses (i), (ii) and (iv) of the definition of Cash Equivalents
in an amount equal to the Letter of Credit Outstandings, which deposit shall be
held by the Agent for the benefit of the Issuing Bank as security for, and to
provide for the payment of, the Letter of Credit Outstandings.
SECTION 8. THE AGENT
Section 8.1 Appointment. Each Bank hereby irrevocably designates and
appoints NBD Bank as the Agent of such Bank under this Agreement and each other
Loan Document 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 the Agent by the terms of this
Agreement and each other Loan Document, together with such other powers as are
reasonably incidental thereto.
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Notwithstanding any provision to the contrary elsewhere in this Agreement, the
Agent shall not have any duties or responsibilities, except those expressly set
forth herein, or any fiduciary relationship with any Bank, and no implied
covenants, functions, responsibilities, duties, obligations or liabilities on
the part of the Agent shall be read into this Agreement or otherwise exist
against the Agent. The provisions of this Section are solely for the benefit of
the Agent and the Banks and the Borrower and the Borrower's Subsidiaries shall
not have any rights as a third party beneficiary or otherwise under any of the
provisions hereof. In performing its functions and duties hereunder and under
the other Loan Documents, the Agent shall act solely as the agent of the Banks
and does not assume (and shall not be deemed to have assumed) any obligation of
relationship of trust or agency with or for the Borrower, its Subsidiaries or
any of their respective successors and assigns.
Section 8.2 Delegation of Duties. The Agent may execute any of its duties
under this Agreement, the other Loan Documents by or through agents 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 the
negligence or misconduct of any agents or attorneys-in-fact selected by it with
reasonable care.
Section 8.3 Exculpatory Provisions. The Agent shall not be (i) liable for
any action lawfully taken or omitted to be taken by it or any Person described
in Section 8.2 under or in connection with this Agreement, any other Loan
Document (except for its or such Person's own gross negligence or willful
misconduct), or (ii) responsible in any manner to any of the Banks for any
recitals, statements, representations or warranties made by the Borrower or any
of its Subsidiaries contained in this Agreement, any other Loan Document or in
any certificate, report, statement or other document referred to or provided for
in, or received under or in connection with, this Agreement, any other Loan
Document or for the value, validity, effectiveness, genuineness, enforceability
or sufficiency of this Agreement, any other Loan Document or for any failure of
the Borrower or any of its Subsidiaries to perform their obligations hereunder
or thereunder. The Agent shall not be under any obligation to any Bank to
ascertain or to inquire as to the observance or performance of any of the
agreements contained in, or conditions of, this Agreement, any other Loan
Document, or to inspect the properties, books or records of the Borrower or any
of its Subsidiaries. This Section is intended solely to govern the relationship
between the Agent, on the one hand, and the Banks, on the other.
Section 8.4 Reliance by the Agent. The Agent shall be entitled to rely, and
shall be fully protected in relying, upon any Note, writing, resolution, notice,
consent, certificate, affidavit, letter, cablegram, telegram, telecopy, telex or
teletype message, statement, order 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,
without limitation, counsel to the Borrower or any of its Subsidiaries),
independent accountants and other experts selected by the Agent. The Agent may
deem and treat the payee of any Note as the
64
owner thereof for all purposes unless it shall have received an executed
Transfer Supplement in respect thereof. 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
Required Banks as it deems appropriate or it shall first be indemnified to its
satisfaction by the Banks 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 each in all cases be fully protected in acting, or in refraining
from acting, under this Agreement and the other Loan Documents in accordance
with a request of the Required Banks, and such request and any action taken or
failure to act pursuant thereto shall be binding upon all the Banks and all
future holders of the Notes.
Section 8.5 Notice of Default. The Agent shall not be deemed to have
knowledge or notice of the occurrence of any Default or Event of Default unless
it has received notice from a Bank or the Borrower referring to this Agreement,
describing such Default or Event of Default and stating that such notice is a
"notice of default". In the event that the Agent receives such a notice, it
shall promptly give notice thereof to the other Banks. The Agent shall take such
action with respect to such Default or Event of Default as shall be directed by
the Required Banks; provided that unless and until the Agent shall have received
such directions, it may (but shall not be obligated to) take such action, or
refrain from taking such action, with respect to such Default or Event of
Default as it shall deem advisable and in the best interests of the Banks.
Section 8.6 Non-Reliance on the Agent and Other Banks. Each Bank expressly
acknowledges that neither the Agent nor any of their respective officers,
directors, employees, agents, attorneys-in-fact or affiliates has made any
representations or warranties to it and that no act by the Agent hereafter
taken, including, without limitation, any review of the affairs of any Loan
Party, shall be deemed to constitute any representation or warranty by the
Agent. Each Bank represents and warrants to the Agent that it has, independently
and without reliance upon the Agent or any other Bank and based on such
documents and information as it has deemed appropriate, made its own appraisal
of and investigation into the business, operations, property, prospects,
financial and other conditions and creditworthiness of the Borrower and made its
own decision to make its Loans hereunder and enter into this Agreement. Each
Bank also represents that it will, independently and without reliance upon the
Agent or any other Bank, 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 to make such investigation as it deems necessary to inform itself as to the
business, operations, property, prospects, financial and other condition and
creditworthiness of the Borrower. Except for notices, reports and other
documents expressly required under the Loan Documents, to be furnished to the
Banks by the Agent, the Agent shall not have any duty or responsibility to
provide any Bank with any credit or other information concerning the business,
operations, property, prospects, financial and other condition or
creditworthiness of the Borrower which may come into the possession of the Agent
or any of its respective officers, directors, employees,
65
agents, attorneys-in-fact or affiliates.
Section 8.7 Indemnification. The Banks agree to indemnify the Agent and its
respective officers, directors, employees, representatives and agents (to the
extent not reimbursed by the Borrower and without limiting the obligation of the
Borrower to do so), ratably according to their Pro Rata Shares, from and against
any and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind or nature
whatsoever (including, without limitation, the fees and disbursements of counsel
for the Agent or such Person in connection with any investigative,
administrative or judicial proceeding commenced or threatened, whether or not
the Agent or such Person shall be designated a party thereto) that may at any
time (including, without limitation, at any time following the payment of the
Obligations) be imposed on, incurred by or asserted against the Agent or such
Person as a result of, or arising out of, or in any way related to or by reason
of, the Loans, Letters of Credit or any of the other transactions contemplated
hereby or the execution, delivery or performance of any Loan Document (but
excluding any such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements resulting solely
from the gross negligence or willful misconduct of the Agent or such Person as
finally determined by a court of competent jurisdiction).
Section 8.8 The Agent in Its Respective Individual Capacity. The Agent and
its respective affiliates may make loans to, accept deposits from and generally
engage in any kind of business with the Borrower as though the Agent were not
the Agent hereunder. With respect to Loans made or renewed by it and any Note
issued to it, the Agent shall have the same rights and powers under this
Agreement as any Bank and may exercise the same as though they were not the
Agent and the terms "Bank" and "Banks" shall include each of the Agent in its
individual capacity.
Section 8.9 Successor Agent. The Agent may resign as Agent upon 30 days'
notice to the Borrower and the Banks. The Agent may be removed at any time, with
or without cause, upon 30 days' notice from the Required Banks. If the Agent
shall resign or be removed as Agent under this Agreement, then the Required
Banks during such 30-day period shall appoint from among the Banks a successor
administrative agent, whereupon such successor administrative agent shall
succeed to the rights, powers and duties of the Agent and the term "Agent" shall
mean such successor administrative agent effective upon its appointment, and the
former Agent's rights, powers and duties as Agent shall be terminated, without
any other or further act or deed on the part of such former Agent or any of the
parties to this Agreement or any holders of the Notes. After any retiring
Agent's resignation or removal hereunder as Agent, the provisions of this
Section 8 and Section 9.1 shall inure to its benefit as to any actions taken or
omitted to be taken by it while it was Agent under this Agreement.
SECTION 9. MISCELLANEOUS
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Section 9.1 Payment of Expenses, Indemnity, etc. (a) Whether or not the
Closing Date occurs, any Loans are made, any Letters of Credit are issued or the
transactions contemplated hereby are consummated, the Borrower shall pay all
reasonable out-of-pocket costs, fees and expenses of the Agent in connection
with the negotiation, preparation, execution and delivery of the Loan Documents
and the documents and instruments each referred to therein and the satisfaction
of the conditions precedent with respect thereto and any amendment, waiver or
consent relating to any of the Loan Documents (including, without limitation, as
to each of the foregoing, the reasonable fees and disbursements of Dickinson,
Wright, Moon ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, special counsel to the Agent) and of the Agent
and each Bank in connection with the preservation of rights under, and
enforcement of, the Loan Documents and the documents and instruments each
referred to therein or in connection with any workout, restructuring or
rescheduling of the Obligations (including, without limitation, the reasonable
fees and disbursements of counsel for the Agent and for each of the Banks).
(b) Whether or not the Closing Date occurs, any Loans are made, any
Letters of Credit are issued or the transactions contemplated hereby are
consummated, the Borrower shall pay, and hold the Agent, and each of the Banks
harmless from and against, any and all present and future stamp, excise and
other similar taxes with respect to the foregoing matters and hold the Agent,
and each Bank harmless from and against any and all liabilities with respect to
or resulting from any delay or omission (other than to the extent attributable
to the Agent or such Bank) to pay such taxes.
(c) Whether or not the Closing Date occurs, any Loans are made, any
Letters of Credit are issued or the transactions contemplated hereby are
consummated, the Borrower shall indemnify the Agent and each Bank, their
respective officers, directors, employees, representatives and agents (each an
"Indemnitee") from, and hold each of them harmless against, any and all losses,
liabilities, claims, damages, expenses, obligations, penalties, actions,
judgments, suits, costs or disbursements of any kind or nature whatsoever
(including, without limitation, the reasonable fees and disbursements of counsel
for such Indemnitee in connection with any investigative, administrative or
judicial proceeding commenced or threatened, whether or not such Indemnitee
shall be designated a party thereto) that may at any time (including, without
limitation, at any time following the payment of the Obligations) be imposed on,
asserted against or incurred by any Indemnitee as a result of, or arising out
of, or in any way related to or by reason of, (i) the making of any Loans,
issuance of any Letters of Credit, any of the transactions contemplated hereby
or the execution, delivery or performance of any Loan Document, (ii) any
violation by Holdings, the Borrower or any other Subsidiary or their respective
Environmental Affiliates of any applicable Environmental Law, (iii) any
Environmental Claim arising out of the management, use, control, ownership or
operation of property or assets by Holdings, the Borrower or any other
Subsidiary or any of their respective Environmental Affiliates, including,
without limitation, all on-site and off-site activities involving Materials of
Environmental Concern and all activities related to matters disclosed in
Schedule 4.15 and (iv) the breach of
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any environmental representation or warranty set forth in Section 4.15 (but
excluding, as to all of the foregoing, any such losses, liabilities, claims,
damages, expenses, obligations, penalties, actions, judgments, suits, costs or
disbursements incurred solely by reason of the gross negligence or willful
misconduct of the Indemnitee as finally determined by a court of competent
jurisdiction).
If and to the extent that the obligations of the Borrower under this
Section are unenforceable for any reason, the Borrower agrees to make the
maximum contribution to the payment and satisfaction of such obligations which
is permissible under applicable law. The Borrower's obligations under this
Section shall survive the termination of this Agreement and the payment of the
obligations.
Section 9.2 Right of Setoff. In addition to any rights now or hereafter
granted under applicable law or otherwise, and not by way of limitation of any
such rights, upon the occurrence and during the continuance of any Event of
Default, each Bank is hereby authorized at any time or from time to time,
without presentment, demand, protest or other notice of any kind to Holdings,
the Borrower or to any other Person, any such notice being hereby expressly
waived, to set off and to appropriate and apply any and all deposits (general or
special, time or demand, provisional or final) and any other indebtedness at any
time held or owing by such Bank (including, without limitation, by branches and
agencies of such Bank wherever located) to or for the credit or the account of
Holdings or the Borrower against and on account of the Obligations of Holdings
or the Borrower to such Bank under this Agreement and under any of the other
Loan Documents, including, without limitation, all interests in obligations
purchased by such Bank pursuant to Section 9.7, and all other claims of any
nature or description arising out of or connected with this Agreement, any other
Loan Document, irrespective of whether or not such Bank shall have made any
demand hereunder and although said obligations, liabilities or claims, or any of
them, shall be contingent or unmatured. After the exercise of any right of set
off by any Bank in accordance with the terms hereof, such Bank shall notify
Holdings or the Borrower, as the case may be, of such exercise, provided,
however, that the failure of such Bank to give any such notice shall in no event
affect in any manner the obligations of Holdings or the Borrower hereunder or
under any other Loan Document or the rights and remedies of the Agent or such
Bank hereunder or under any other Loan Document.
Section 9.3 Notices. Except as otherwise expressly provided herein, all
notices, requests and demands to or upon the respective parties hereto to be
effective shall be in writing (including by telecopy, telex or nationally
recognized overnight courier service), and shall be deemed to have been duly
given or made when delivered by hand, or five days after being deposited in the
United States mail, postage prepaid, or, in the case of telex notice, when sent,
answerback received, or, in the case of telecopy notice, when sent with receipt
confirmed, or, in the case of a nationally recognized overnight courier service,
one Business Day after delivery to such courier service, addressed, in the case
of each party hereto, at its address specified opposite its signature below, or
to such other address as may be designated by any party in a
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written notice to the other parties hereto, provided that notices and
communications to the Agent pursuant to Section 2 shall not be effective until
received by the Agent.
Section 9.4 Successors and Assigns; Participations; Assignments.
(a) Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of Holdings, the Borrower, the Banks, the Agent, all future
holders of the Notes and their respective successors and assigns, except that
neither Holdings nor the Borrower may assign or transfer any of its rights or
obligations under this Agreement without the prior written consent of each Bank.
No Bank may participate, assign or sell any of its Credit Exposure (as defined
in clause (b) below) except as required by operation of law, in connection with
the merger, consolidation or dissolution of any Bank or as otherwise provided in
this Section 9.4.
(b) Participations. Any Bank may at any time sell to one or more banks
or other entities (each a "Participant") participating interests in any Loan
owing to such Bank, any Note held by such Bank, the Revolving Loan Commitment of
such Bank and or any other interest of such Bank hereunder (all of the foregoing
in respect of any such Bank, its "Credit Exposure"). Notwithstanding any such
sale by a Bank of participating interests to a Participant, such Bank's rights
and obligations under this Agreement shall remain unchanged, such Bank shall
remain solely responsible for the performance thereof, such Bank shall remain
the holder of any such Note for all purposes under this Agreement, and the
Borrower and the Agent shall continue to deal solely and directly with such Bank
in connection with such Bank's rights and obligations under this Agreement. The
Borrower agrees that if any Obligations are due and unpaid, or shall have been
declared or shall have become due and payable upon the occurrence and during the
continuance of an Event of Default, each Participant shall be deemed to have the
right of setoff in respect of its participating interest in amounts owing under
this Agreement and any Note to the same extent as if the amount of its
participating interest were owing directly to it as a Bank under this Agreement
or any Note, provided that such right of setoff shall be subject to the
obligations of such Participant to share with the Banks, and the Banks agree to
share with such Participant, as provided in subsection 9.7. The Borrower also
agrees that each Participant shall be entitled to the benefits of Sections 2.17,
2.18 and 2.19, provided that no such Participant shall be entitled to receive
any greater amount pursuant to such Sections than the transferor Bank would have
been entitled to receive in respect of the amount of the participation
transferred by such transferor Bank to such Participant had no such transfer
occurred. Each Bank agrees that any agreement between such Bank and any such
Participant in respect of such participating interest shall not restrict such
Bank's right to agree to any amendment, supplement, waiver or modification to
this Agreement, or any other Loan Document, except where the result of any of
the foregoing would be to extend the final maturity of any Obligation, reduce
the rate or extend the time of payment of interest thereon, reduce the principal
amount thereof, reduce the amount of any fees payable hereunder, or amend this
Section 9.4(b).
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(c) Assignments to Purchasing Banks. Subject to the prior written
consent of the Borrower, Issuing Bank and the Agent (which consent, in each
case, shall not be unreasonably withheld and, in the case of the Borrower, may
not be withheld upon the occurrence and during the continuance of any Event of
Default), any Bank may at any time and from time to time assign to one or more
additional banks or financial institutions ("Purchasing Banks") all or any part
(in the amount of at least $10,000,000 or integral multiples of $1,000,000 in
excess thereof or, if less, the entire amount of such Bank's Credit Exposure) of
its Credit Exposure pursuant to a supplement to this Agreement, substantially in
the form of Exhibit H hereto (a "Transfer Supplement"), executed by such
Purchasing Bank, such transferor Bank, and the Agent. Upon (i) such execution of
such Transfer Supplement, (ii) delivery of an executed copy thereof to the
Borrower and the Agent, (iii) payment by such Purchasing Bank to such transferor
Bank of an amount equal to the purchase price agreed between such transferor
Bank and such Purchasing Bank and (iv) payment by the transferor Bank to the
Agent of a non-refundable assignment fee of $3,500, such transferor Bank shall
be released from its obligations hereunder to the extent of such assignment and
such Purchasing Bank shall for all purposes be a Bank party to this Agreement to
the extent of such assignment and shall have all the rights and obligations of a
Bank under this Agreement to the same extent as if it were an original party
hereto, and no further consent or action by the Borrower, the Banks or the Agent
shall be required. Such Transfer Supplement shall be deemed to amend this
Agreement to the extent, and only to the extent, necessary to reflect the
addition of such Purchasing Bank as a Bank and the resulting adjustment of the
Revolving Loan Commitments, if any, arising from the purchase by such Purchasing
Bank of all or a portion of the Credit Exposure of such transferor Bank.
Promptly after the consummation of any transfer to a Purchasing Bank pursuant
hereto, the transferor Bank, the Agent and the Borrower shall make appropriate
arrangements so that a replacement Note is issued to such transferor Bank and a
new Note, dated the date of such transfer, is issued to such Purchasing Bank, in
each case in principal amounts reflecting such transfer. Notwithstanding the
foregoing, any Bank may at any time assign and pledge all or any portion of its
Loans and Notes to a Federal Reserve Bank as collateral in accordance with
Regulation A of the Board of Governors of the Federal Reserve System and any
operating circular issued by such Federal Reserve Bank.
(d) Disclosure of Information. Holdings and the Borrower
authorize each Bank to disclose to any Participant or Purchasing Bank (each, a
"Transferee") and any prospective Transferee any and all financial and other
information in such Bank's possession concerning Holdings and the Borrower which
has been delivered to such Bank by Holdings and the Borrower pursuant to this
Agreement or which has been delivered to such Bank by Holdings and the Borrower
in connection with such Bank's credit evaluation of Holdings and the Borrower
prior to entering into this Agreement, provided that any such Transferee shall
be subject to the provisions of Section 9.17.
Section 9.5 Amendments and Waivers. Neither this Agreement, any Note,
any other Loan Document, nor any terms hereof or thereof may be amended,
70
supplemented, modified or waived except in accordance with the provisions of
this Section. The Required Banks, Holdings and the Borrower may, from time to
time, enter into written amendments, supplements, modifications or waivers for
the purpose of adding, deleting, changing or waiving any provisions to this
Agreement, the Notes, or the other Loan Documents to which Holdings and/or the
Borrower is a party, provided, that no such amendment, supplement, modification
or waiver shall (a) extend either the Maturity Date or reduce the rate of
interest or extend the time of payment of interest or principal on any
obligations, or reduce the principal amount of any obligations or reduce any fee
payable to the Banks hereunder, or change the amount of any Revolving Loan
Commitment of any Bank, or increase the payment obligation of any Bank to the
Swingline Lender under Section 2.2(b) hereof or amend, modify or waive any
provision of this Section 9.5 or the definition of Required Banks, or consent to
or permit the assignment or transfer by Holdings or the Borrower of any of its
rights and obligations under this Agreement or any other Loan Document in each
case without the written consent of all the Banks, or (b) amend, modify or waive
any provision of Section 8 or any other provision of any Loan Document if the
effect thereof is to affect the rights or duties of the Agent, without the
written consent of the then Agent. Any such amendment, supplement, modification
or waiver shall apply to each of the Banks equally and shall be binding upon the
Borrower, the Banks, the Agent and all future holders of the Notes. In the case
of any waiver, Holdings, the Borrower, the Banks and the Agent shall be restored
to their former position and rights hereunder and under the outstanding Notes,
and any Default or Event of Default waived shall be deemed to be cured and not
continuing, but no such waiver shall extend to any subsequent or other Default
or Event of Default, or impair any right consequent thereon.
Section 9.6 No Waiver; Remedies Cumulative. No failure or delay on the part
of the Agent or any Bank or any holder of a Note in exercising any right, power
or privilege hereunder, under any other Loan Document and no course of dealing
between Holdings, the Borrower and the Agent or any Bank or the holder of any
Note shall operate as a waiver thereof; nor shall any single or partial exercise
of any right, power or privilege hereunder or under any other Loan Document
preclude any other or further exercise thereof of the exercise of any other
right, power or privilege hereunder or thereunder. The rights and remedies
herein expressly provided are cumulative and not exclusive of any rights or
remedies which the Agent or any Bank or the holder of any Note would otherwise
have. No notice to or demand on the Borrower in any case shall entitle Holdings
or the Borrower to any other or further notice or demand in similar or other
circumstances (except to the extent such notice or demand is expressly provided
hereunder or required under applicable law) or constitute a waiver of the rights
of the Agent, the Banks or the holder of any Note to take any other or further
action in any circumstances without notice or demand.
Section 9.7 Sharing of Payments. Each of the Banks agrees that if it should
receive any amount hereunder (whether by voluntary payment, by realization upon
security, by the exercise of the right of setoff or banker's lien, by
counterclaim or cross action, by the enforcement of any right under the Loan
Documents or otherwise) which
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is applicable to the payment of any Loans or other Obligations, of a sum which
with respect to the related sum or sums received by other Banks is in a greater
proportion than the total of such Loans or other obligations then owed and due
to such Bank bears to the total of such Loans or other Obligations then owed and
due to all of the Banks immediately prior to such receipt, then such Bank
receiving such excess payment shall purchase for cash without recourse or
warranty from the other Banks an interest in such Loans or other Obligations
owing to such Banks in such amount as shall result in a proportional
participation by all of the Banks then owed such Loans or other Obligations in
such amount; provided that if all or any portion of such excess amount is
thereafter recovered from such Bank, such purchase shall be rescinded and the
purchase price restored to the extent of such recovery, but without interest.
Section 9.8 Governing Law; Submission to Jurisdiction; Appointment of
Agent. (a) THIS AGREEMENT, THE OTHER LOAN DOCUMENTS AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER SHALL BE CONSTRUED IN
ACCORDANCE WITH AND BE GOVERNED BY THE LAWS OF THE STATE OF MICHIGAN.
(b) Any legal action or proceeding with respect to this Agreement, any
other Loan Document and any action for enforcement of any judgment in respect
thereof may be brought in the courts of the State of Michigan or of the United
States of America for the Southern District of Michigan, and, by execution and
delivery of this Agreement, Holdings and the Borrower each hereby accepts for
itself and in respect of its property, generally and unconditionally, the
non-exclusive jurisdiction of the aforesaid courts and appellate courts from any
thereof. Holdings and the Borrower each irrevocably consents to the service of
process out of any of the aforementioned courts in any such action or proceeding
by the mailing of copies thereof by registered or certified mail, postage
prepaid, to Holdings or the Borrower, as the case may be, at its address set
forth opposite its signature below.
(c) Each of Holdings and the Borrower hereby irrevocably waives any
objection which it may now or hereafter have to the laying of venue of any of
the aforesaid actions or proceedings arising out of or in connection with this
Agreement or any other Loan Document brought in the courts referred to above and
hereby further irrevocably waives and agrees not to plead or claim in any such
court that any such action or proceeding brought in any such court has been
brought in an inconvenient forum. Nothing herein shall affect the right of the
Agent, any Bank or any holder of a Note to serve process in any other manner
permitted by law or to commence legal proceedings or otherwise proceed against
Holdings or the Borrower in any other jurisdiction.
Section 9.9 Counterparts. This Agreement may be executed in any number
of counterparts and by the different parties hereto on separate counterparts,
each of which when so executed and delivered shall be an original, but all of
which shall together constitute one and the same instrument.
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Section 9.10 Headings Descriptive. The headings of the several Sections and
subsections of this Agreement are inserted for convenience only and shall not in
any way affect the meaning or construction of any provision of this Agreement.
Section 9.11 Marshalling; Recapture. Neither the Agent, nor any Bank shall
be under any obligation to ▇▇▇▇▇▇▇▇ any assets in favor of Holdings or the
Borrower or any other party or against or in payment of any or all of the
obligations. To the extent any Bank receives any payment by or on behalf of
Holdings or the Borrower, which payment or any part thereof is subsequently
invalidated, declared to be fraudulent or preferential, set aside or required to
be repaid to Holdings or the Borrower or its respective estate, trustee,
receiver, custodian or any other party under any bankruptcy law, state or
federal law, common law or equitable cause, then to the extent of such payment
or repayment, the obligation or part thereof which has been paid, reduced or
satisfied by the amount so repaid shall be reinstated by the amount so repaid
and shall be included within the liabilities of Holdings or the Borrower to such
Bank as of the date such initial payment, reduction or satisfaction occurred.
Section 9.12 Severability. In case any provision in or obligation under
this Agreement or the Notes or the other Loan Documents shall be invalid,
illegal or unenforceable in any jurisdiction, the validity, legality and
enforceability of the remaining provisions or obligations, or of such provision
or obligation in any other jurisdiction, shall not in any way be affected or
impaired thereby.
Section 9.13 Survival. All indemnities set forth herein including, without
limitation, in Sections 2.17, 2.18, 2.19, 2.20, 8.7 and 9.1 shall survive the
execution and delivery of this Agreement and the Notes and the making and
repayment of the Loans hereunder.
Section 9.14 Domicile of Loans. Each Bank may transfer and carry its Loans
at, to or for the account of any branch office, subsidiary or affiliate of such
Bank.
Section 9.15 Limitation of Liability. No claim may be made by the Borrower
or any other Person against the Agent, or any Bank or their Affiliates,
directors, officers, employees, attorneys 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 act, omission or event
occurring in connection therewith; and each of Holdings and the Borrower hereby
waives, releases and agrees not to ▇▇▇ upon any claim for any such damages,
whether or not accrued and whether or not known or suspected to exist in its
favor.
Section 9.16 Waiver of Trial by Jury. TO THE EXTENT PERMITTED BY APPLICABLE
LAW, EACH OF HOLDINGS, THE BORROWER, THE AGENT AND THE BANKS HEREBY IRREVOCABLY
WAIVES ALL RIGHT OF TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM
ARISING OUT OF OR IN
73
CONNECTION WITH THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR ANY MATTER ARISING
HEREUNDER OR THEREUNDER.
Section 9.17 Confidentiality. Each Bank agrees that it will not disclose
Confidential Information (as hereinafter defined) to any person other than (a)
as may be consented to by Holdings and the Borrower, (b) as may be required by
law or pursuant to legal process and (c) to prospective Participants and
Purchasing Banks and those of such Bank's directors, officers, employee,
examiners and professional advisors who have a need to know the Confidential
Information in accordance with customary banking practices and who receive the
Confidential Information having been made aware of the restrictions of this
subsection 9.17. As used herein, the term "Confidential Information" means all
information contained in materials relating to Holdings, the Borrower and any
other Subsidiary provided to the Banks by Holdings, the Borrower or its
representatives or agents other than (i) information which is at the time so
provided or thereafter becomes generally available to the public other than as a
result of a disclosure by one or more Banks and (ii) information which was
available to any Bank prior to its disclosure to the Banks by Holdings, the
Borrower, its representatives or agents.
IN WITNESS WHEREOF, the parties hereto have caused their duly authorized
officers to execute and deliver this Agreement as of the date first above
written.
ROUGE INDUSTRIES, INC.
By:/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
Title: Vice President and CFO
Notice Address:
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
ROUGE STEEL COMPANY
By:/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
Title: Vice President and CFO
Notice Address:
74
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
75
NBD BANK, as Agent, as Issuing Bank, and
individually as a Bank
By:/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
Notice Address:
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
76
COMERICA BANK
By:/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
Notice Address:
Michigan Corporate Banking
One Detroit Center
P. O. ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
77
NATIONAL CITY BANK
By:/s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: Vice President
Notice Address:
National City Center
▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
DETROIT 7-3111 160126