Exhibit 10.1
Execution Version
$150,000,000
CREDIT AGREEMENT
DATED AS OF MAY 1, 2006
AMONG
WCI STEEL ACQUISITION, INC., A DELAWARE CORPORATION
AS BORROWER
AND
THE LENDERS AND ISSUERS PARTY HERETO
AND
CITICORP USA, INC.
AS ADMINISTRATIVE AGENT
* * *
CITIGROUP GLOBAL MARKETS INC.
AS BOOK MANAGER AND ARRANGER
* * *
JPMORGAN CHASE BANK, N.A.
AS SYNDICATION AGENT
* * *
▇▇▇▇▇ FARGO FOOTHILL, LLC
AS DOCUMENTATION AGENT
WEIL, GOTSHAL & ▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
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CREDIT AGREEMENT, dated as of May 1, 2006, among WCI STEEL
ACQUISITION, INC., a Delaware corporation (the "Borrower"), the Lenders (as
defined below), the Issuers (as defined below), CITICORP USA, INC. ("Citicorp"),
as agent for the Lenders and the Issuers (in such capacity, the "Administrative
Agent"), JPMorgan Chase Bank, N.A. as syndication agent for the Lenders and
Issuers and ▇▇▇▇▇ Fargo Foothill, LLC, as documentation agent for the Lenders
and Issuers.
WITNESSETH:
WHEREAS, the Borrower has requested that the Lenders and Issuers make
available for the purposes specified in this Agreement a revolving credit and
letter of credit facility; and
WHEREAS, the Lenders and Issuers are willing to make available to the
Borrower such revolving credit and letter of credit facility upon the terms and
subject to the conditions set forth herein;
NOW, THEREFORE, in consideration of the premises and the covenants and
agreements contained herein, the parties hereto hereby agree as follows:
ARTICLE I
DEFINITIONS, INTERPRETATION AND ACCOUNTING TERMS
SECTION 1.1 DEFINED TERMS
As used in this Agreement, the following terms have the following
meanings (such meanings to be equally applicable to both the singular and plural
forms of the terms defined):
"Account" has the meaning given to such term in the UCC.
"Account Debtor" has the meaning given to such term in the UCC.
"Acquisition" means the acquisition of all or substantially all of the
assets of Old WCI and its Subsidiaries.
"Adjusted Available Credit" shall mean, as of any date, the sum of (a)
all Unrestricted Cash as of such date plus (b) the amount of the Available
Credit as of such date.
"Administrative Agent" has the meaning specified in the preamble to
this Agreement.
"Affected Lender" has the meaning specified in Section 2.17(a)
(Substitution of Lenders).
"Affiliate" means, with respect to any Person, any other Person
directly or indirectly controlling or that is controlled by or is under common
control with such Person, each
CREDIT AGREEMENT
WCI STEEL, INC., A DELAWARE CORPORATION
officer, director, general partner or joint-venturer of such Person, and each
Person that is the beneficial owner of 10% or more of any class of Voting Stock
of such Person. For the purposes of this definition, "control" means the
possession of the power to direct or cause the direction of the management and
policies of such Person, whether through the ownership of voting securities, by
contract or otherwise.
"Agent Affiliate" has the meaning specified in Section 10.3 (Posting
of Approved Electronic Communications).
"Agreement" means this Credit Agreement.
"Applicable Lending Office" means, with respect to each Revolving
Credit Lender, its Domestic Lending Office in the case of a Base Rate Loan, and
its Eurodollar Lending Office in the case of a Eurodollar Rate Loan.
"Applicable Margin" means (a) during the period commencing on the
Closing Date and ending on the CBA Effective Date, with respect to (i) Revolving
Loans and Swing Loans maintained as Base Rate Loans, a rate equal to 1.75% per
annum and (ii) Revolving Loans maintained as Eurodollar Rate Loans, a rate equal
to 2.75% per annum and (b) thereafter, as of any date of determination, a per
annum rate equal to the rate set forth below opposite the applicable type of
Loan and the then applicable Monthly Available Credit (determined as of the last
day of the each calendar month) set forth below:
EURODOLLAR BASE RATE
MONTHLY AVAILABLE CREDIT RATE LOANS LOANS
------------------------ ---------- ---------
Equal to or greater than $105,000,000 1.50% 0.50%
Less than $105,000,000 and equal to
or greater than $65,000,000 1.75% 0.75%
Less than $65,000,000 and equal to or
greater than $25,000,000 2.00% 1.00%
Less than $25,000,000 2.25% 1.25%
Changes in the Applicable Margin resulting from a change in the Monthly
Available Credit on the last day of any calendar month shall become effective as
to all Revolving Loans and Swing Loans on the first day of the next succeeding
calendar month; provided, however, that for the period from the Closing Date
until June 30, 2006, the Applicable Margin shall not be less than 1.25%, in the
case of Base Rate Loans, and 2.25%, in the case of Eurodollar Rate Loans.
"Applicable Unused Commitment Fee Rate" means (i) 0.50% per annum if
the ratio of the average daily Revolving Credit Outstandings to Revolving Credit
Commitments for the immediately preceding calendar month is less than or equal
to 50%, and (ii) 0.375% per annum if the ratio of Revolving Credit Outstandings
to Revolving Credit Commitments for the immediately preceding calendar month is
greater than 50%.
"Appraisal" means the most recent of the Initial Appraisal or any
Updated Appraisal.
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"Approved Deposit Account" means a Deposit Account that is the subject
of an effective Deposit Account Control Agreement and that is maintained by any
Loan Party with a Deposit Account Bank. "Approved Deposit Account" includes all
monies on deposit in a Deposit Account and all certificates and instruments, if
any, representing or evidencing such Deposit Account.
"Approved Electronic Communications" means each notice, demand,
communication, information, document and other material that any Loan Party is
obligated to, or otherwise chooses to, provide to the Administrative Agent
pursuant to any Loan Document or the transactions contemplated therein,
including (a) any supplement to the Guaranty, any joinder to the Pledge and
Security Agreement and any other written Contractual Obligation delivered or
required to be delivered in respect of any Loan Document or the transactions
contemplated therein and (b) any Financial Statement, financial and other
report, notice, request, certificate and other information material; provided,
however, that, "Approved Electronic Communication" shall exclude (i) any Notice
of Borrowing, Letter of Credit Request, Swing Loan Request, Notice of Conversion
or Continuation, and any other notice, demand, communication, information,
document and other material relating to a request for a new, or a conversion of
an existing, Borrowing, (ii) any notice pursuant to Section 2.8 (Optional
Prepayments) and Section 2.9 (Mandatory Prepayments) and any other notice
relating to the payment of any principal or other amount due under any Loan
Document prior to the originally scheduled date therefor, (iii) all notices of
any Default or Event of Default and (iv) any notice, demand, communication,
information, document and other material required to be delivered to satisfy any
of the conditions set forth in Article III (Conditions to Loans and Letters of
Credit) or Section 2.4(a) (Letters of Credit) or any other condition to any
Borrowing or other extension of credit hereunder or any condition precedent to
the effectiveness of this Agreement.
"Approved Electronic Platform" has the meaning specified in Section
10.3(a) (Posting of Approved Electronic Communications).
"Approved Fund" means any Fund that is advised or managed by (a) a
Lender, (b) an Affiliate of a Lender or (c) an entity or Affiliate of an entity
that administers or manages a Lender.
"Approved Securities Intermediary" means a Securities Intermediary or
Commodity Intermediary selected or approved by the Administrative Agent.
"Arranger" means Citigroup Global Markets Inc., in its capacity as
sole arranger and sole book runner.
"Asset Sale" has the meaning specified in Section 8.4 (Sale of
Assets).
"Assignment and Acceptance" means an assignment and acceptance entered
into by a Revolving Credit Lender and an Eligible Assignee, and accepted by the
Administrative Agent, in substantially the form of Exhibit A (Form of Assignment
and Acceptance).
"Availability Reserve" means, as of two Business Days after the date
of written notice of any determination thereof to the Borrower by the
Administrative Agent, such amounts as the Administrative Agent may from time to
time establish against the Facility, in the Administrative Agent's Customary
Discretion, in order either (a) to preserve the value of the Collateral or the
Administrative Agent's Lien thereon or (b) to provide for the payment of
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unanticipated liabilities of any Loan Party arising after the Closing Date. The
Administrative Agent acknowledges that it has not been and, on the date hereof,
it is not a regular or customary practice of the Administrative Agent to
establish reserves solely on account of the following considered in and of
themselves: (i) the Borrower shall not have entered into a new collective
bargaining agreement with the United Steel Workers of America, or (ii) there
shall have occurred and be continuing a strike, work stoppage, slowdown or
lockout, or there shall be pending or threatened any unfair labor practices,
grievances, complaints or arbitrations involving the Borrower or any of its
Subsidiaries.
"Available Credit" means, at any time, (a) the lesser of (i) the then
effective Revolving Credit Commitments and (ii) the Borrowing Base at such time,
minus (b) the sum of (i) the aggregate Revolving Credit Outstandings at such
time and (ii) any Availability Reserve in effect at such time.
"Bailee's Letter" means a letter in form and substance reasonably
acceptable to the Administrative Agent and executed by any Person (other than
the Borrower) that is in possession of Inventory on behalf of the Borrower
pursuant to which such Person acknowledges, among other things, the Lien of the
Administrative Agent arising under the Collateral Documents with respect
thereto.
"Bankruptcy Code" means title 11, United States Code.
"Bankruptcy Court" means the United States Bankruptcy Court for the
North Eastern District of Ohio Eastern Division.
"Base Rate" means, for any period, a fluctuating interest rate per
annum as shall be in effect from time to time, which rate per annum shall be
equal at all times to the highest of the following:
(a) the rate of interest announced publicly by Citibank in New York,
New York, from time to time, as Citibank's base rate;
(b) the sum (adjusted to the nearest 0.25% or, if there is no nearest
0.25%, to the next higher 0.25%) of (i) 0.5% per annum, (ii) the rate per
annum obtained by dividing (A) the latest three-week moving average of
secondary market morning offering rates in the United States for
three-month certificates of deposit of major United States money market
banks, such three-week moving average being determined weekly on each
Monday (or, if any such day is not a Business Day, on the next succeeding
Business Day) for the three-week period ending on the previous Friday by
Citibank on the basis of such rates reported by certificate of deposit
dealers to and published by the Federal Reserve Bank of New York or, if
such publication shall be suspended or terminated, on the basis of
quotations for such rates received by Citibank from three New York
certificate of deposit dealers of recognized standing selected by Citibank,
by (B) a percentage equal to 100% minus the average of the daily
percentages specified during such three-week period by the Federal Reserve
Board for determining the maximum reserve requirement (including any
emergency, supplemental or other marginal reserve requirement) for Citibank
in respect of liabilities consisting of or including (among other
liabilities) three-month U.S. dollar nonpersonal time deposits in the
United States and (iii) the average during such three-week period of the
maximum annual assessment rates estimated by Citibank for determining the
then current annual assessment payable by
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Citibank to the Federal Deposit Insurance Corporation (or any successor)
for insuring Dollar deposits in the United States; and
(c) 0.5% per annum plus the Federal Funds Rate.
"Base Rate Loan" means any Swing Loan or any other Loan during any
period in which it bears interest based on the Base Rate.
"Borrower" has the meaning specified in the preamble to this
Agreement.
"Borrower's Accountants" means independent nationally-recognized
public accountants reasonably acceptable to the Administrative Agent.
"Borrowing" means a borrowing consisting of Revolving Loans made on
the same day by the Revolving Credit Lenders ratably according to their
respective Revolving Credit Commitments.
"Borrowing Base" means, at any time,
(a) the sum of
(i) 85% of the Dollar Equivalent of the face amount of all
Eligible Trade Receivables (calculated net of all finance charges, late
fees and other fees that are unearned, sales, excise or similar taxes, and
credits or allowances granted at such time), and
(ii) the lesser of
(A) 85% of the Orderly Liquidation Value for such class of
Eligible Inventory of the Borrower and each Subsidiary Guarantor, and
(B) 75% of the Dollar Equivalent of the value of such class
of Eligible Inventory of the Borrower and each Subsidiary Guarantor
(valued at the lower of cost and market on a first-in, first-out
basis),
minus (b) any Eligibility Reserve then in effect.
"Borrowing Base Certificate" means a certificate of the Borrower
substantially in the form of Exhibit J (Form of Borrowing Base Certificate).
"Business Day" means a day of the year on which banks are not required
or authorized to close in New York City and, if the applicable Business Day
relates to notices, determinations, fundings and payments in connection with the
Eurodollar Rate or any Eurodollar Rate Loans, a day on which dealings in Dollar
deposits are also carried on in the London interbank market.
"Capital Expenditures" means, for any Person for any period, the
aggregate of amounts that would be reflected as additions to property, plant or
equipment on a Consolidated balance sheet of such Person and its Subsidiaries,
excluding interest capitalized during construction provided, that the term
"Capital Expenditures" shall not include any amounts used to
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purchase property, plant or equipment which (a) are not permitted under clauses
(a) through (i) of Section 8.3 and (b) are financed with the Net Cash Proceeds
of Equity Issuances or Subordinated Debt in an amount not to exceed the
Restricted Payments Basket.
"Capital Lease" means, with respect to any Person, any lease of, or
other arrangement conveying the right to use, property by such Person as lessee
that would be accounted for as a capital lease on a balance sheet of such Person
prepared in conformity with GAAP.
"Capital Lease Obligations" means, with respect to any Person, the
capitalized amount of all Consolidated obligations of such Person or any of its
Subsidiaries under Capital Leases.
"Cash Collateral Account" means any Deposit Account or Securities
Account that is (a) established by the Administrative Agent from time to time in
its sole discretion to receive cash and Cash Equivalents (or purchase cash or
Cash Equivalents with funds received) from the Loan Parties or their
Subsidiaries or Affiliates or Persons acting on their behalf pursuant to the
Loan Documents, (b) with such depositaries and securities intermediaries as the
Administrative Agent may determine in its sole discretion, (c) in the name of
the Administrative Agent (although such account may also have words referring to
the Borrower and the account's purpose), (d) under the control of the
Administrative Agent and (e) in the case of a Securities Account, with respect
to which the Administrative Agent shall be the Entitlement Holder and the only
Person authorized to give Entitlement Orders with respect thereto.
"Cash Equivalents" means (a) securities issued or fully guaranteed or
insured by the United States federal government or any agency thereof, (b)
certificates of deposit, eurodollar time deposits, overnight bank deposits and
bankers' acceptances of any Lender or any commercial bank organized under the
laws of the United States, any state thereof, the District of Columbia, any
foreign bank, or its branches or agencies (fully protected against currency
fluctuations) that, at the time of acquisition, are rated at least "A-1" by S&P
or "P-1" by ▇▇▇▇▇'▇, (c) commercial paper of an issuer rated at least "A-1" by
S&P or "P-1" by ▇▇▇▇▇'▇ and (d) shares of any money market fund that (i) has at
least 95% of its assets invested continuously in the types of investments
referred to in clauses (a), (b) and (c) above, (ii) has net assets whose Dollar
Equivalent exceeds $500,000,000 and (iii) is rated at least "A-1" by S&P or
"P-1" by ▇▇▇▇▇'▇; provided, however, that the maturities of all obligations of
the type specified in clauses (a), (b) and (c) above shall not exceed 180 days.
"Cash Interest Expense" means, with respect to any Person for any
period, the Interest Expense of such Person for such period less the Non-Cash
Interest Expense of such Person for such period.
"Cash Management Document" means any certificate, agreement or other
document executed by any Loan Party in respect of the Cash Management
Obligations of any Loan Party.
"Cash Management Obligation" means, as applied to any Person, any
direct or indirect liability, contingent or otherwise, of such Person in respect
of cash management services (including treasury, depository, overdraft, credit
or debit card, electronic funds transfer and other cash management arrangements)
provided by the Administrative Agent or any Lender, including
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obligations for the payment of fees, interest, charges, expenses, attorneys'
fees and disbursements in connection therewith.
"CBA Effective Date" means the date upon which the Borrower enters
into a new, effective and enforceable collective bargaining agreement with the
United Steel Workers of America.
"Change of Control" means (a) the occurrence of any event, transaction
or occurrence as a result of which any person or group of persons (within the
meaning of the Securities Exchange Act of 1934, as amended) other than the
Permitted Holders shall have acquired beneficial ownership (within the meaning
of Rule 13d-3 of the Securities and Exchange Commission under the Securities
Exchange Act of 1934, as amended) of a percentage of the issued and outstanding
Voting Stock of the Borrower equal to or greater than the lesser of (i) 50% and
(ii) the aggregate percentage of the issued and outstanding Voting Stock of the
Borrower owned by Harbinger and with respect to which Harbinger has entered into
a voting or similar arrangement acceptable to the Administrative Agent, (b) the
occurrence of any "Change of Control" as defined in the Indenture, and (c) the
occurrence of any "Change of Control" as defined in the certificate of
designation for the Series A Preferred Stock.
"Citibank" means Citibank, N.A., a national banking association.
"Citicorp" has the meaning specified in the preamble to this
Agreement.
"Closing Date" means the first date on which any Loan is made or any
Letter of Credit is Issued.
"Code" means the U.S. Internal Revenue Code of 1986, as amended.
"Collateral" means all property and interests in property and proceeds
thereof now owned or hereafter acquired by any Loan Party in or upon which a
Lien is granted under any Collateral Document.
"Collateral Access Agreement" means the Collateral Access Agreement,
in substantially the form of Exhibit M (Form of Collateral Access Agreement),
executed by the Borrower, the Administrative Agent, Wilmington Trust Company and
The Bank of New York Trust Company, N.A.
"Collateral Documents" means the Pledge and Security Agreement, the
Mortgages, the Deposit Account Control Agreements, the Securities Account
Control Agreements and any other document executed and delivered by a Loan Party
granting a Lien on any of its property to secure payment of the Secured
Obligations.
"Collateral Trust" means a voluntary employee beneficiaries
association trust or other collateral fund established under the Collateral
Trust Agreement to hold the Borrower's contributions to fund post-retirement
health-care and life insurance obligations for the benefit of certain hourly
employees of the Borrower.
"Collateral Trust Agreement" means the 501(c)(9) Agreement, of Trust
for WCI Steel Acquisition, Inc., dated May 1, 2006.
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"Collateral Trustee" means The Bank of New York Trust Company, N.A.,
as trustee for the Collateral Trust, together with its permitted successors and
assigns in such capacity.
"Commodity Account" has the meaning given to such term in the UCC.
"Commodity Intermediary" has the meaning given to such term in the
UCC.
"Compliance Certificate" has the meaning specified in Section 6.1(d)
(Financial Statements).
"Consolidated" means, with respect to any Person, the consolidation of
accounts of such Person and its Subsidiaries in accordance with GAAP.
"Consolidated Net Income" means, for any Person for any period, the
Consolidated net income (or loss) of such Person and its Subsidiaries for such
period; provided, however, that (a) the net income of any other Person in which
such Person or one of its Subsidiaries has a joint interest with a third party
(which interest does not cause the net income of such other Person to be
Consolidated into the net income of such Person) shall be included only to the
extent of the amount of dividends or distributions paid to such Person or
Subsidiary, (b) the net income of any Subsidiary of such Person that is subject
to any restriction or limitation on the payment of dividends or the making of
other distributions shall be excluded to the extent of such restriction or
limitation and (c) extraordinary gains and losses and any one-time increase or
decrease to net income that is required to be recorded because of the adoption
of new accounting policies, practices or standards required by GAAP shall be
excluded.
"Constituent Documents" means, with respect to any Person, (a) the
articles of incorporation, certificate of incorporation, constitution or
certificate of formation (or the equivalent organizational documents) of such
Person, (b) the by-laws or operating agreement (or the equivalent governing
documents) of such Person and (c) any document setting forth the manner of
election or duties of the directors or managing members of such Person (if any)
and the designation, amount or relative rights, limitations and preferences of
any class or series of such Person's Stock.
"Contaminant" means any material, substance or waste that is
classified, regulated or otherwise characterized under any Environmental Law as
hazardous, toxic, a contaminant or a pollutant or by other words of similar
meaning or regulatory effect, including any petroleum or petroleum-derived
substance or waste, asbestos and polychlorinated biphenyls.
"Contractual Obligation" of any Person means any obligation,
agreement, undertaking or similar provision of any Security issued by such
Person or of any agreement, undertaking, contract, lease, indenture, mortgage,
deed of trust or other instrument (excluding a Loan Document) to which such
Person is a party or by which it or any of its property is bound or to which any
of its property is subject.
"Control Account" means a Securities Account or Commodity Account that
is the subject of an effective Securities Account Control Agreement and that is
maintained by any Loan Party with an Approved Securities Intermediary. "Control
Account" includes all Financial Assets held in a Securities Account or a
Commodity Account and all certificates and instruments, if any, representing or
evidencing the Financial Assets contained therein.
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"Corporate Chart" means a corporate organizational chart, list or
other similar document in each case in form reasonably acceptable to the
Administrative Agent and setting forth, for each Person that is a Loan Party,
that is subject to Section 7.11 (Additional Collateral and Guaranties) or that
is a Subsidiary of any of them, (a) the full legal name of such Person (and any
trade name, fictitious name or other name such Person may have had or operated
under), (b) the jurisdiction of organization, the organizational number (if any)
and the tax identification number (if any) of such Person, (c) the location of
such Person's chief executive office (or sole place of business) and (d) the
number of shares of each class of such Person's Stock authorized (if
applicable), the number outstanding as of the date of delivery and the number
and percentage of such outstanding shares for each such class owned (directly or
indirectly) by any Loan Party or any Subsidiary of any of them.
"Customary Discretion" means the Administrative Agent's sole
discretion exercised in accordance with its regular and customary practices
applicable to asset based loans (as in effect from time to time).
"Customary Permitted Liens" means, with respect to any Person, any of
the following Liens:
(a) Liens with respect to the payment of taxes, assessments or
governmental charges in each case that are not yet due or that are being
contested in good faith by appropriate proceedings and with respect to
which adequate reserves or other appropriate provisions are being
maintained to the extent required by GAAP;
(b) Liens of landlords arising by statute and liens of suppliers,
mechanics, carriers, materialmen, warehousemen or workmen and other similar
liens, in each case, (i) imposed by law or arising in the ordinary course
of business, (ii) for amounts not yet due or that are being contested in
good faith by appropriate proceedings and (iii) with respect to which
adequate reserves or other appropriate provisions are being maintained to
the extent required by GAAP;
(c) deposits made in the ordinary course of business in connection
with workers' compensation, unemployment insurance or other types of social
security benefits or to secure the performance of bids, tenders, sales,
contracts (other than for the repayment of borrowed money) and surety,
appeal, customs or performance bonds;
(d) encumbrances arising by reason of zoning restrictions, easements,
licenses, reservations, covenants, rights-of-way, utility easements,
building restrictions and other similar encumbrances on the use of real
property not materially detracting from the value of such real property or
not materially interfering with the ordinary conduct of the business
conducted and proposed to be conducted at such real property;
(e) encumbrances arising under leases or subleases of real property
that do not, in the aggregate, materially detract from the value of such
real property or interfere with the ordinary conduct of the business
conducted and proposed to be conducted at such real property; and
(f) financing statements with respect to a lessor's rights in and to
personal property leased to such Person in the ordinary course of such
Person's business other than through a Capital Lease.
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"Debt Issuance" means the incurrence of Indebtedness of the type
specified in clause (a) or (b) of the definition of "Indebtedness" by the
Borrower or any of its Subsidiaries.
"Default" means any event that, with the passing of time or the giving
of notice or both, would become an Event of Default.
"Deposit Account" has the meaning given to such term in the UCC.
"Deposit Account Bank" means a financial institution selected or
approved by the Administrative Agent.
"Deposit Account Control Agreement" has the meaning specified in the
Pledge and Security Agreement.
"Disclosure Documents" means the Revised Disclosure Statement in
Support of Secured Noteholders' Second Plan of Reorganization filed in
connection with the Noteholders' Second Plan on October 17, 2005 and each
supplement or amendment thereto filed before the date of this Agreement.
"Documentary Letter of Credit" means any Letter of Credit that is
drawable upon presentation of documents evidencing the sale or shipment of goods
purchased by the Borrower or any of its Subsidiaries in the ordinary course of
its business.
"Dollar Equivalent" of any amount means, at the time of determination
thereof, (a) if such amount is expressed in Dollars, such amount, and (b) if
such amount is denominated in any other currency, the equivalent of such amount
in Dollars as determined by the Administrative Agent using any method of
determination it reasonably deems appropriate.
"Dollars" and the sign "$" each mean the lawful money of the United
States of America.
"Domestic Lending Office" means, with respect to any Revolving Credit
Lender, the office of such Revolving Credit Lender specified as its "Domestic
Lending Office" opposite its name on Schedule II (Applicable Lending Offices and
Addresses for Notices) or on the Assignment and Acceptance by which it became a
Revolving Credit Lender or such other office of such Revolving Credit Lender as
such Revolving Credit Lender may from time to time specify to the Borrower and
the Administrative Agent.
"Domestic Person" means any "United States person" under and as
defined in Section 7701(a)(30) of the Code.
"Domestic Subsidiary" means any Subsidiary of the Borrower organized
under the laws of any state of the United States of America or the District of
Columbia.
"EBITDA" means, with respect to any Person for any period, (a)
Consolidated Net Income of such Person for such period plus (b) the sum of, in
each case to the extent included in the calculation of such Consolidated Net
Income but without duplication, (i) any provision for income taxes, (ii)
Interest Expense, (iii) loss from extraordinary items, (iv) depreciation,
depletion and amortization expenses, (v) any aggregate net loss (but not any
aggregate net gain) from the sale, exchange or other disposition of capital
assets by such Person, (vi) all other non-recurring
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non-cash charges and non-recurring non-cash losses, including the amount of any
compensation deduction as the result of any grant of Stock or Stock Equivalents
to employees, officers, directors or consultants, (vii) any pension expenses
required under FAS 87 in excess of the amounts thereof funded in cash and (viii)
any post-employment benefits required under GAAP in excess of the amounts
thereof funded in cash minus (c) the sum of, in each case to the extent included
in the calculation of such Consolidated Net Income but without duplication, (i)
any credit for income tax, (ii) interest income, (iii) gains from extraordinary
items, (iv) any aggregate net gain (but not any aggregate net loss) from the
sale, exchange or other disposition of capital assets by such Person, (v) any
pension expenses required under FAS 87 to the extent funded in cash in excess of
the amounts required thereunder, (vi) any post-employment benefits required
under GAAP to the extent funded in cash in excess of the amounts required under
GAAP and (vii) any other non-recurring non-cash gains or other items which have
been added in determining Consolidated Net Income, including any reversal of a
charge referred to in clause (b)(v) above by reason of a decrease in the value
of any Stock or Stock Equivalent.
"Eligibility Reserves" means, effective as of two Business Days after
the date of written notice of any determination thereof to the Borrower by the
Administrative Agent, such amounts as the Administrative Agent, in its Customary
Discretion, may from time to time establish against the gross amounts of
Eligible Trade Receivables and Eligible Inventory to reflect risks or
contingencies arising after the Closing Date that may affect any one or more
class of such items and that have not already been taken into account in the
calculation of the Borrowing Base. The Administrative Agent acknowledges that it
has not been and, on the date hereof, it is not a regular or customary practice
of the Administrative Agent to establish reserves solely on account of the
following considered in and of themselves: (i) the Borrower shall not have
entered into a new collective bargaining agreement with the United Steel Workers
of America, or (ii) there shall have occurred and be continuing a strike, work
stoppage, slowdown or lockout, or there shall be pending or threatened any
unfair labor practices, grievances, complaints or arbitrations involving the
Borrower or any of its Subsidiaries.
"Eligible Assignee" means (a) a Lender or an Affiliate or Approved
Fund of any Lender, (b) a commercial bank having total assets whose Dollar
Equivalent exceeds $5,000,000,000, (c) a finance company, insurance company or
any other financial institution or Fund, in each case reasonably acceptable to
the Administrative Agent and regularly engaged in making, purchasing or
investing in loans and having a net worth, determined in accordance with GAAP,
whose Dollar Equivalent exceeds $250,000,000 (or, to the extent net worth is
less than such amount, a finance company, insurance company, other financial
institution or Fund, reasonably acceptable to the Administrative Agent and the
Borrower) or (d) a savings and loan association or savings bank organized under
the laws of the United States or any State thereof having a net worth,
determined in accordance with GAAP, whose Dollar Equivalent exceeds
$250,000,000.
"Eligible Inventory" means the Inventory of the Borrower or any
Subsidiary Guarantor (other than any Inventory that has been consigned by the
Borrower) including raw materials, work-in-process, finished goods, parts and
supplies (a) that is owned solely by the Borrower or such Subsidiary Guarantor,
(b) with respect to which the Administrative Agent has a valid, perfected and
enforceable first-priority Lien (provided that to the extent the Administrative
Agent has established reserves therefor satisfactory to it reducing the
Available Credit to the extent of such reserve, such Eligible Inventory may also
be subject to Customary Permitted Liens that are prior to the Lien of the
Administrative Agent), (c) with respect to which no representation
12
or warranty contained in any Loan Document has been breached, (d) that is not,
in the Administrative Agent's Customary Discretion, obsolete or unmerchantable,
and (e) with respect to which (in respect of any Inventory labeled with a brand
name or trademark and sold by the Borrower or such Subsidiary Guarantor pursuant
to a trademark owned by the Borrower or such Subsidiary Guarantor or a license
granted to the Borrower or such Subsidiary Guarantor) the Administrative Agent
would have rights under such trademark or license pursuant to the Pledge and
Security Agreement or other agreement satisfactory to the Administrative Agent
to sell such Inventory in connection with a liquidation thereof and (f) that the
Administrative Agent deems to be Eligible Inventory based on such credit and
collateral considerations as the Administrative Agent may, in its Customary
Discretion, deem appropriate. The Administrative Agent acknowledges that it has
not been and, on the date hereof, it is not a regular or customary practice of
the Administrative Agent to establish reserves solely on account of the
following considered in and of themselves: (i) the Borrower shall not have
entered into a new collective bargaining agreement with the United Steel Workers
of America, or (ii) there shall have occurred and be continuing a strike, work
stoppage, slowdown or lockout, or there shall be pending or threatened any
unfair labor practices, grievances, complaints or arbitrations involving the
Borrower or any of its Subsidiaries. No Inventory of the Borrower or any
Subsidiary Guarantor shall be Eligible Inventory if such Inventory consists of
(i) goods returned or rejected by customers other than goods that are undamaged
or are resalable in the normal course of business, (ii) goods to be returned to
suppliers, or (iii) goods located, stored, used or held at the premises of a
third party unless (A) the Administrative Agent shall have received a Landlord
Waiver or Bailee's Letter or (B) in the case of Inventory located at a leased
premises, an Eligibility Reserve satisfactory to the Administrative Agent shall
have been established with respect thereto.
"Eligible Trade Receivable" means the gross outstanding balance of
each Account of the Borrower or any Subsidiary Guarantor arising out of the sale
of merchandise, goods or services in the ordinary course of business, that is
made by the Borrower or any Subsidiary Guarantor to a Person that is not an
Affiliate of the Borrower or any Subsidiary Guarantor and that constitutes
Collateral in which the Administrative Agent has a fully perfected first
priority Lien (provided that to the extent the Administrative Agent has
established reserves therefor satisfactory to it reducing the Available Credit
to the extent of such reserve, such Eligible Trade Receivable may also be
subject to Customary Permitted Liens that are prior to the Lien of the
Administrative Agent); provided, however, that an Account shall not be an
"Eligible Trade Receivable" if any of the following shall be true:
(a) such Account is more than (i) 60 days past due according to the
original terms of sale or (ii) 120 days past the original invoice date
thereof; or
(b) any warranty contained in this Agreement or any other Loan
Document with respect to such specific Account is not true and correct with
respect to such Account; or
(c) the Account Debtor on such Account has disputed liability or made
any claim with respect to any other Account due from such Account Debtor to
the Borrower or any Subsidiary Guarantor but only to the extent of such
dispute or claim; or
(d) the Account Debtor on such Account has (i) filed a petition for
bankruptcy or any other relief under the Bankruptcy Code or any other law
relating to bankruptcy, insolvency, reorganization or relief of debtors,
(ii) made an assignment for the benefit of creditors, (iii) had filed
against it any petition or other application for relief
13
under the Bankruptcy Code or any such other law, (iv) has failed, suspended
business operations, become insolvent, called a meeting of its creditors
for the purpose of obtaining any financial concession or accommodation or
(v) had or suffered a receiver or a trustee to be appointed for all or a
significant portion of its assets or affairs; or
(e) the Account Debtor on such Account or any of its Affiliates is
also a supplier to or creditor of the Borrower or any Subsidiary Guarantor,
but only to the extent such Account Debtor or any of its Affiliates owes
any amounts to such supplier or creditor, unless such supplier or creditor
has executed a no-offset letter satisfactory to the Administrative Agent,
in its Customary Discretion; or
(f) the sale represented by such Account is to an Account Debtor
located outside the United States or Canada, unless the sale is on letter
of credit or acceptance terms acceptable to the Administrative Agent, in
its Customary Discretion and (i) such letter of credit names the
Administrative Agent as beneficiary for the benefit of the Secured Parties
or (ii) the issuer of such letter of credit has consented to the assignment
of the proceeds thereof to the Administrative Agent; or
(g) the sale to such Account Debtor on such Account is on a
▇▇▇▇-on-hold, guaranteed sale, sale-and-return, sale-on-approval or
consignment basis; or
(h) such Account is subject to a Lien in favor of any Person other
than the Administrative Agent for the benefit of the Secured Parties; or
(i) such Account is subject to any deduction, offset, counterclaim,
return privilege or other conditions other than volume sales discounts
given in the ordinary course of the Borrower's or any Subsidiary
Guarantor's business; provided, however, that such Account shall be
ineligible pursuant to this clause (i) only to the extent of such
deduction, offset, counterclaim, return privilege or other condition; or
(j) the Account Debtor on such Account is located in any State of the
United States requiring the holder of such Account, as a precondition to
commencing or maintaining any action in the courts of such State either to
(i) receive a certificate of authorization to do business in such State or
be in good standing in such State or (ii) file a Notice of Business
Activities Report with the appropriate office or agency of such State, in
each case unless the holder of such Account has received such a certificate
of authority to do business, is in good standing or, as the case may be,
has duly filed such a notice in such State; or
(k) the Account Debtor on such Account is a Governmental Authority,
unless the Borrower or such Subsidiary Guarantor has assigned its rights to
payment of such Account to the Administrative Agent pursuant to the
Assignment of Claims Act of 1940, as amended, in the case of a federal
Governmental Authority, and pursuant to applicable law, if any, in the case
of any other Governmental Authority, and such assignment has been accepted
and acknowledged by the appropriate government officers; or
(l) 50% or more of the outstanding Accounts of the Account Debtor have
become, or have been determined by the Administrative Agent, in accordance
with the provisions hereof, to be, ineligible; or
14
(m) the sale represented by such Account is denominated in a currency
other than Dollars; or
(n) such Account is not evidenced by an invoice or other writing in
form acceptable to the Administrative Agent, in its Customary Discretion;
or
(o) the Borrower or any Subsidiary Guarantor, in order to be entitled
to collect such Account, is required to perform any additional service for,
or perform or incur any additional obligation to, the Person to whom or to
which it was made; or
(p) the total Eligible Trade Receivables that are Accounts of such
Account Debtor to the Borrower or any Subsidiary Guarantor represent more
than 20% (or such higher percentage as the Administrative Agent may agree
to in its sole discretion) of the Eligible Trade Receivables of the
Borrower or any Subsidiary Guarantor at such time, but only to the extent
of such excess; or
(q) the Administrative Agent, in accordance with its customary
criteria, determines, in its Customary Discretion, that such Account might
not be paid or is otherwise ineligible. The Administrative Agent
acknowledges that it has not been and, on the date hereof, it is not a
regular or customary practice of the Administrative Agent to establish
reserves solely on account of the following considered in and of
themselves: (i) the Borrower shall not have entered into a new collective
bargaining agreement with the United Steel Workers of America, or (ii)
there shall have occurred and be continuing a strike, work stoppage,
slowdown or lockout, or there shall be pending or threatened any unfair
labor practices, grievances, complaints or arbitrations involving the
Borrower or any of its Subsidiaries.
"Entitlement Holder" has the meaning given to such term in the UCC.
"Entitlement Order" has the meaning given to such term in the UCC.
"Environmental Laws" means all applicable Requirements of Law now or
hereafter in effect and as amended or supplemented from time to time, relating
to pollution or the regulation and protection of the environment, natural
resources and human health and safety as it relates to environmental protection,
including the Comprehensive Environmental Response, Compensation, and Liability
Act of 1980, as amended (42 U.S.C. Section 9601 et seq.); the Hazardous Material
Transportation Act, as amended (49 U.S.C. Section 5101 et seq.); the Federal
Insecticide, Fungicide, and Rodenticide Act, as amended (7 U.S.C. Section 136 et
seq.); the Resource Conservation and Recovery Act, as amended (42 U.S.C. Section
6901 et seq.); the Toxic Substance Control Act, as amended (15 U.S.C. Section
2601 et seq.); the Clean Air Act, as amended (42 U.S.C. Section 7401 et seq.);
the Federal Water Pollution Control Act, as amended (33 U.S.C. Section 1251 et
seq.); the Occupational Safety and Health Act, as amended (29 U.S.C. Section 651
et seq.); the Safe Drinking Water Act, as amended (42 U.S.C. Section 300f et
seq.); and each of their state and local counterparts or equivalents and any
transfer of ownership notification or approval statute, including the Industrial
Site Recovery Act (N.J. Stat. ▇▇▇. Section 13:1K-6 et seq.).
"Environmental Liabilities and Costs" means, with respect to any
Person, all liabilities, obligations, responsibilities, Remedial Actions,
losses, damages, punitive damages, consequential damages, treble damages, costs
and expenses (including all fees, disbursements and expenses of counsel, experts
and consultants and costs of investigation and feasibility studies),
15
fines, penalties, sanctions and interest incurred as a result of any claim or
demand by any other Person, whether based in contract, tort, implied or express
warranty, strict liability, criminal or civil statute and whether arising under
any Environmental Law, Permit, order or agreement with any Governmental
Authority or other Person, in each case relating to any environmental, health or
safety condition or to any Release or threatened Release and resulting from the
past, present or future operations of, or ownership of property by, such Person
or any of its Subsidiaries.
"Environmental Lien" means any Lien in favor of any Governmental
Authority for Environmental Liabilities and Costs.
"Equipment" has the meaning given to such term in the UCC.
"Equity Issuance" means the issue or sale of any Stock of the Borrower
or any Subsidiary of the Borrower by the Borrower or any Subsidiary of the
Borrower to any Person, the Borrower or any Subsidiary of the Borrower.
"ERISA" means the United States Employee Retirement Income Security
Act of 1974.
"ERISA Affiliate" means any trade or business (whether or not
incorporated) under common control or treated as a single employer with the
Borrower or any of its Subsidiaries within the meaning of Section 414(b), (c),
(m) or (o) of the Code.
"ERISA Event" means (a) a reportable event described in Section
4043(b) or 4043(c)(1), (2), (3), (5), (6), (8) or (9) of ERISA with respect to a
Title IV Plan or a Multiemployer Plan, (b) the withdrawal of the Borrower, any
of its Subsidiaries or any ERISA Affiliate from a Title IV Plan subject to
Section 4063 of ERISA during a plan year in which it was a substantial employer,
as defined in Section 4001(a)(2) of ERISA, (c) the complete or partial
withdrawal of the Borrower, any of its Subsidiaries or any ERISA Affiliate from
any Multiemployer Plan for which the required report is not waived pursuant to
the applicable PBGC regulations, (d) notice of reorganization or insolvency of a
Multiemployer Plan, (e) the filing of a notice of intent to terminate a Title IV
Plan or the treatment of a plan amendment as a termination under Section 4041 of
ERISA, (f) the institution of proceedings to terminate a Title IV Plan or
Multiemployer Plan by the PBGC, (g) the failure to make any required
contribution to a Title IV Plan or Multiemployer Plan, (h) the imposition of a
lien under Section 412 of the Code or Section 302 of ERISA on the Borrower or
any of its Subsidiaries or any ERISA Affiliate or (i) any other event or
condition that might reasonably be expected to constitute grounds under Section
4042 of ERISA for the termination of, or the appointment of a trustee to
administer, any Title IV Plan or Multiemployer Plan or the imposition of any
liability under Title IV of ERISA, other than for PBGC premiums due but not
delinquent under Section 4007 of ERISA.
"Eurocurrency Liabilities" has the meaning assigned to that term in
Regulation D of the Federal Reserve Board.
"Eurodollar Base Rate" means, with respect to any Interest Period for
any Eurodollar Rate Loan, the rate determined by the Administrative Agent to be
the offered rate for deposits in Dollars for the applicable Interest Period
appearing on the Dow ▇▇▇▇▇ Markets Telerate Page 3750 as of 11:00 a.m., London
time, on the second full Business Day next preceding the first day of each
Interest Period. In the event that such rate does not appear on the Dow ▇▇▇▇▇
Markets Telerate Page 3750 (or otherwise on the Dow ▇▇▇▇▇ Markets screen), the
16
Eurodollar Base Rate for the purposes of this definition shall be determined by
reference to such other comparable publicly available service for displaying
eurodollar rates as may be selected by the Administrative Agent.
"Eurodollar Lending Office" means, with respect to any Revolving
Credit Lender, the office of such Revolving Credit Lender specified as its
"Eurodollar Lending Office" opposite its name on Schedule II (Applicable Lending
Offices and Addresses for Notices) or on the Assignment and Acceptance by which
it became a Revolving Credit Lender (or, if no such office is specified, its
Domestic Lending Office) or such other office of such Revolving Credit Lender as
such Revolving Credit Lender may from time to time specify to the Borrower and
the Administrative Agent.
"Eurodollar Rate" means, with respect to any Interest Period for any
Eurodollar Rate Loan, an interest rate per annum equal to the rate per annum
obtained by dividing (a) the Eurodollar Base Rate by (b)(i) a percentage equal
to 100% minus (ii) the reserve percentage applicable two Business Days before
the first day of such Interest Period under regulations issued from time to time
by the Federal Reserve Board for determining the maximum reserve requirement
(including any emergency, supplemental or other marginal reserve requirement)
for a member bank of the Federal Reserve System in New York City with respect to
liabilities or assets consisting of or including Eurocurrency Liabilities (or
with respect to any other category of liabilities that includes deposits by
reference to which the Eurodollar Rate is determined) having a term equal to
such Interest Period.
"Eurodollar Rate Loan" means any Loan that, for an Interest Period,
bears interest based on the Eurodollar Rate.
"Event of Default" has the meaning specified in Section 9.1 (Events of
Default).
"Excluded Foreign Subsidiary" means any Subsidiary that is not a
Domestic Subsidiary in respect of which either (a) the pledge of more than 65%
of the Stock of such Subsidiary as Collateral to secure payment of the
Obligations of the Borrower, (b) the grant of a Lien on any of its property as
Collateral to secure payment of the Obligations of the Borrower, (c) the
guaranteeing by such Subsidiary of the Obligations of the Borrower or (d) in
accordance with applicable law at the time, would, in the good faith judgment of
the Borrower based on an analysis reasonably satisfactory to the Administrative
Agent, result in materially adverse tax consequences to the Loan Parties and
their Subsidiaries, taken as a whole.
"Facility" means the Revolving Credit Commitments and the provisions
herein related to the Revolving Loans, Swing Loans and Letters of Credit.
"Facility Cash Management Obligation" means any Cash Management
Obligation arising in connection with this Agreement or any Loan Document.
"Fair Market Value" means (a) with respect to any asset or group of
assets (other than a publicly traded Security) at any date, the value of the
consideration obtainable in a sale of such asset at such date assuming a sale by
a willing seller to a willing purchaser dealing at arm's length and arranged in
an orderly manner over a reasonable period of time having regard to the nature
and characteristics of such asset, as reasonably determined by the Board of
Directors of the Borrower or, if such asset shall have been the subject of a
relatively contemporaneous appraisal by an independent third party appraiser,
the basic assumptions underlying which have not
17
materially changed since its date, the value set forth in such appraisal and (b)
with respect to any publicly traded Security at any date, the closing sale price
of such Security on the Business Day next preceding such date, as appearing in
any published list of any national securities exchange or the NASDAQ Stock
Market or, if there is no such closing sale price of such Security, the final
price for the purchase of such Security at face value quoted on such Business
Day by a financial institution of recognized standing regularly dealing in
Securities of such type and selected by the Administrative Agent.
"Federal Funds Rate" means, 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 that is a Business Day, the average of the quotations for such day on such
transactions received by the Administrative Agent from three Federal funds
brokers of recognized standing selected by it.
"Federal Reserve Board" means the Board of Governors of the United
States Federal Reserve System, or any successor thereto.
"Fee Letter" shall mean the letter dated as of January 31, 2006,
addressed to Harbinger from Citicorp and the Arranger and accepted by the
Borrower on January 31, 2006, with respect to certain fees to be paid from time
to time to Citicorp and the Arranger.
"Financial Asset" has the meaning given to such term in the UCC.
"Financial Covenant Debt" of any Person means Indebtedness of the type
specified in clauses (a), (b), (d), (e), (f) and (h) of the definition of
"Indebtedness" and non-contingent obligations of the type specified in clause
(c) of such definition.
"Financial Statements" means the financial statements of the Borrower
and its Subsidiaries delivered in accordance with Section 4.4 (Financial
Statements) and Section 6.1 (Financial Statements).
"Fiscal Quarter" means each of the three month periods ending on March
31, June 30, September 30 and December 31.
"Fiscal Year" means the twelve month period ending on December 31.
"Fixed Charge Coverage Ratio" means, with respect to any Person for
any period, the ratio of (a) EBITDA of such Person for such period minus Capital
Expenditures of such Person for such period minus the total federal income tax
liability actually payable by such Person in respect of such period to (b) the
Fixed Charges of such Person for such period.
"Fixed Charges" means, with respect to any Person for any period, the
sum, determined on a Consolidated basis, of (a) the Cash Interest Expense of
such Person and its Subsidiaries for such period, (b) the principal amount of
Consolidated Financial Covenant Debt (or any portion thereof) of such Person and
its Subsidiaries having a scheduled due date during such period and (c) all cash
dividends payable by such Person and its Subsidiaries on Stock in respect of
such period to Persons other than such Person and its Subsidiaries.
18
"Fund" means any Person (other than a natural Person) that is or will
be engaged in making, purchasing, holding or otherwise investing in commercial
loans and similar extensions of credit in the ordinary course of its business.
"GAAP" means generally accepted accounting principles in the United
States of America as in effect from time to time set forth in the opinions and
pronouncements of the Accounting Principles Board and the American Institute of
Certified Public Accountants and the statements and pronouncements of the
Financial Accounting Standards Board, or in such other statements by such other
entity as may be in general use by significant segments of the accounting
profession, that are applicable to the circumstances as of the date of
determination.
"General Intangible" has the meaning given to such term in the UCC.
"Governmental Authority" means any nation, sovereign or government,
any state or other political subdivision thereof and any entity or authority
exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government, including any central bank or stock
exchange.
"Guaranty" means the guaranty, in substantially the form of Exhibit H
(Form of Guaranty), executed by the Subsidiary Guarantors.
"Guaranty Obligation" means, as applied to any Person, any direct or
indirect liability, contingent or otherwise, of such Person with respect to any
Indebtedness of another Person, if the purpose or intent of such Person in
incurring the Guaranty Obligation is to provide assurance to the obligee of such
Indebtedness that such Indebtedness will be paid or discharged, that any
agreement relating thereto will be complied with, or that any holder of such
Indebtedness will be protected (in whole or in part) against loss in respect
thereof, including (a) the direct or indirect guaranty, endorsement (other than
for collection or deposit in the ordinary course of business), co-making,
discounting with recourse or sale with recourse by such Person of Indebtedness
of another Person and (b) any liability of such Person for Indebtedness of
another Person through any agreement (contingent or otherwise) (i) to purchase,
repurchase or otherwise acquire such Indebtedness or any security therefor or to
provide funds for the payment or discharge of such Indebtedness (whether in the
form of a loan, advance, stock purchase, capital contribution or otherwise),
(ii) to maintain the solvency or any balance sheet item, level of income or
financial condition of another Person, (iii) to make take-or-pay or similar
payments, if required, regardless of non-performance by any other party or
parties to an agreement, (iv) to purchase, sell or lease (as lessor or lessee)
property, or to purchase or sell services, primarily for the purpose of enabling
the debtor to make payment of such Indebtedness or to assure the holder of such
Indebtedness against loss or (v) to supply funds to, or in any other manner
invest in, such other Person (including to pay for property or services
irrespective of whether such property is received or such services are
rendered), if in the case of any agreement described under clause (b)(i), (ii),
(iii), (iv) or (v) above the primary purpose or intent thereof is to provide
assurance that Indebtedness of another Person will be paid or discharged, that
any agreement relating thereto will be complied with or that any holder of such
Indebtedness will be protected (in whole or in part) against loss in respect
thereof. The amount of any Guaranty Obligation shall be equal to the amount of
the Indebtedness so guaranteed or otherwise supported.
"Harbinger" means Harbinger Capital Partners Master Fund I, Ltd.
19
"Hedging Contracts" means all Interest Rate Contracts, foreign
exchange contracts, currency swap or option agreements, forward contracts,
commodity swap, purchase or option agreements, other commodity price hedging
arrangements and all other similar agreements or arrangements designed to alter
the risks of any Person arising from fluctuations in interest rates, currency
values or commodity prices.
"Indebtedness" of any Person means without duplication (a) all
indebtedness of such Person for borrowed money, (b) all obligations of such
Person evidenced by notes, bonds, debentures or similar instruments or that bear
interest, (c) all reimbursement and all obligations with respect to letters of
credit, bankers' acceptances, surety bonds and performance bonds, whether or not
matured, (d) all indebtedness for the deferred purchase price of property or
services, other than trade payables incurred in the ordinary course of business
that are not overdue, (e) all indebtedness of such Person created or arising
under any conditional sale or other title retention agreement with respect to
property acquired by such Person (even though the rights and remedies of the
seller or lender under such agreement in the event of default are limited to
repossession or sale of such property), (f) all Capital Lease Obligations of
such Person and the present value of future rental payments under all Synthetic
Leases, (g) all Guaranty Obligations of such Person, (h) all obligations of such
Person to purchase, redeem, retire, defease or otherwise acquire for value any
Stock or Stock Equivalents of such Person, valued, in the case of redeemable
preferred stock, at the greater of its voluntary liquidation preference and its
involuntary liquidation preference plus accrued and unpaid dividends, (i) all
payments that such Person would have to make in the event of an early
termination on the date Indebtedness of such Person is being determined in
respect of Hedging Contracts of such Person and (j) all Indebtedness of the type
referred to above secured by (or for which the holder of such Indebtedness has
an existing right, contingent or otherwise, to be secured by) any Lien upon or
in property (including Accounts and General Intangibles) owned by such Person,
even though such Person has not assumed or become liable for the payment of such
Indebtedness.
"Indemnified Matter" has the meaning specified in Section 11.4(a)
(Indemnities).
"Indemnitee" has the meaning specified in Section 11.4(a)
(Indemnities).
"Indenture" means the Indenture, dated as of May 1, 2006, between the
Borrower and Wilmington Trust Company, as Trustee pursuant to which the Borrower
has issued the New Senior Notes.
"Indenture Collateral Intercreditor Agreement" means the Intercreditor
Agreement, in substantially the form of Exhibit L (Form of Indenture Collateral
Intercreditor Agreement), executed by the Borrower, Wilmington Trust Company and
The Bank of New York Trust Company, N.A.
"Indenture Trustee" means Wilmington Trust Company, as Trustee under
the Indenture, together with its permitted successors and assigns in such
capacity.
"Initial Appraisals" has the meaning specified in Section 3.1(i)
(Conditions Precedent to Initial Loans and Letters of Credit).
"Intercreditor Agreement" means the Intercreditor Agreement in the
form attached hereto an agreement, in substantially the form of Exhibit K (Form
of Intercreditor
20
Agreement), executed by the Borrower, the Administrative Agent and The Bank of
New York Trust Company, N.A.
"Interest Expense" means, for any Person for any period, (a)
Consolidated total interest expense of such Person and its Subsidiaries for such
period and including, in any event, interest capitalized during such period and
net costs under Interest Rate Contracts for such period minus (b) Consolidated
net gains of such Person and its Subsidiaries under Interest Rate Contracts for
such period and minus (c) any Consolidated interest income of such Person and
its Subsidiaries for such period.
"Interest Period" means, in the case of any Eurodollar Rate Loan, (a)
initially, the period commencing on the date such Eurodollar Rate Loan is made
or on the date of conversion of a Base Rate Loan to such Eurodollar Rate Loan
and ending one, two, three or six months thereafter, as selected by the Borrower
in its Notice of Borrowing or Notice of Conversion or Continuation given to the
Administrative Agent pursuant to Section 2.2 (Borrowing Procedures) or 2.11
(Conversion/Continuation Option) and (b) thereafter, if such Loan is continued,
in whole or in part, as a Eurodollar Rate Loan pursuant to Section 2.11
(Conversion/Continuation Option), a period commencing on the last day of the
immediately preceding Interest Period therefor and ending one, two, three or six
months thereafter, as selected by the Borrower in its Notice of Conversion or
Continuation given to the Administrative Agent pursuant to Section 2.11
(Conversion/Continuation Option); provided, however, that all of the foregoing
provisions relating to Interest Periods in respect of Eurodollar Rate Loans are
subject to the following:
(i) if any Interest Period would otherwise end on a day that is
not a Business Day, such Interest Period shall be extended to the next
succeeding Business Day, unless the result of such extension would be
to extend such Interest Period into another calendar month, in which
event such Interest Period shall end on the immediately preceding
Business Day;
(ii) any Interest Period that begins on the last Business Day of
a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest
Period) shall end on the last Business Day of a calendar month;
(iii) the Borrower may not select any Interest Period that ends
after the date of a scheduled principal payment on the Loans as set
forth in Article II (The Facility) unless, after giving effect to such
selection, the aggregate unpaid principal amount of the Loans for
which Interest Periods end after such scheduled principal payment
shall be equal to or less than the principal amount to which the Loans
are required to be reduced after such scheduled principal payment is
made;
(iv) the Borrower may not select any Interest Period in respect
of Loans having an aggregate principal amount of less than
$10,000,000; and
(v) there shall be outstanding at any one time no more than four
Interest Periods in the aggregate.
21
"Interest Rate Contracts" means all interest rate swap agreements,
interest rate cap agreements, interest rate collar agreements and interest rate
insurance.
"Inventory" has the meaning given to such term in the UCC.
"Investment" means, with respect to any Person, (a) any purchase or
other acquisition by such Person of (i) any Security issued by, (ii) a
beneficial interest in any Security issued by, or (iii) any other equity
ownership interest in, any other Person, (b) any purchase by such Person of all
or a significant part of the assets of a business conducted by any other Person,
or all or substantially all of the assets constituting the business of a
division, branch or other unit operation of any other Person, (c) any loan,
advance (other than deposits with financial institutions available for
withdrawal on demand, prepaid expenses, accounts receivable and similar items
made or incurred in the ordinary course of business substantially as conducted
by Old WCI and its Subsidiaries immediately prior to the date hereof or as
approved by the Administrative Agent) or capital contribution by such Person to
any other Person, including all Indebtedness of any other Person to such Person
arising from a sale of property by such Person other than in the ordinary course
of its business and (d) any Guaranty Obligation incurred by such Person in
respect of Indebtedness of any other Person.
"IRS" means the Internal Revenue Service of the United States or any
successor thereto.
"Issue" means, with respect to any Letter of Credit, to issue, extend
the expiry of, renew or increase the maximum face amount (including by deleting
or reducing any scheduled decrease in such maximum face amount) of, such Letter
of Credit. The terms "Issued" and "Issuance" shall have a corresponding meaning.
"Issuer" means (a) Citibank, N.A. and (b) each Lender or Affiliate of
a Lender that hereafter becomes an Issuer with the approval of the
Administrative Agent and the Borrower by agreeing pursuant to an agreement with
and in form and substance satisfactory to the Administrative Agent and the
Borrower to be bound by the terms hereof applicable to Issuers.
"Land" of any Person means all of those plots, pieces or parcels of
land now owned, leased or hereafter acquired or leased or purported to be owned,
leased or hereafter acquired or leased (including, in respect of the Loan
Parties, as reflected in the most recent Financial Statements) by such Person.
"Landlord Waiver" means a letter in form and substance reasonably
acceptable to the Administrative Agent and executed by a landlord in respect of
Inventory of the Borrower located at any leased premises of the Borrower
providing customary rights to the Administrative Agent pursuant to which such
landlord waives any Lien such landlord may have in respect of such Inventory.
"Leases" means, with respect to any Person, all of those leasehold
estates in real property of such Person, as lessee, as such may be amended,
supplemented or otherwise modified from time to time.
"Lender" means the Swing Loan Lender and each other financial
institution or other entity that (a) is listed on the signature pages hereof as
a "Lender" or (b) from time to time becomes a party hereto by execution of an
Assignment and Acceptance.
22
"Letter of Credit" means any letter of credit Issued pursuant to
Section 2.4 (Letters of Credit).
"Letter of Credit Obligations" means, at any time, the Dollar
Equivalent of the aggregate of all liabilities at such time of the Borrower to
all Issuers with respect to Letters of Credit, whether or not any such liability
is contingent, including, without duplication, the sum of (a) the Reimbursement
Obligations at such time and (b) the Letter of Credit Undrawn Amounts at such
time.
"Letter of Credit Reimbursement Agreement" has the meaning specified
in Section 2.4(a)(v) (Letters of Credit).
"Letter of Credit Request" has the meaning specified in Section 2.4(c)
(Letters of Credit).
"Letter of Credit Sublimit" means $50,000,000.
"Letter of Credit Undrawn Amounts" means, at any time, the aggregate
undrawn face amount of all Letters of Credit outstanding at such time.
"Lien" means any mortgage, deed of trust, pledge, hypothecation,
assignment, charge, deposit arrangement, encumbrance, lien (statutory or other),
security interest or preference, priority or other security agreement or
preferential arrangement of any kind or nature whatsoever intended to assure
payment of any Indebtedness or the performance of any other obligation,
including any conditional sale or other title retention agreement, the interest
of a lessor under a Capital Lease and any financing lease having substantially
the same economic effect as any of the foregoing, and the filing of any
financing statement under the UCC or comparable law of any jurisdiction naming
the owner of the asset to which such Lien relates as debtor.
"Liquidity Event Period" means, (a) in the case of Section 6.12, any
period (i) beginning on the first date on which the Available Credit is less
than $15,000,000, and (ii) ending on the first date on which the Available
Credit is greater than $25,000,000 for more than 20 consecutive Business Days,
and (b) in the case of Section 5.1, any period (i) beginning on the date that is
the fifth consecutive Business Day on which the Available Credit is less than
$35,000,000, and (ii) ending on the first date on which the Available Credit is
greater than $45,000,000 for more than 20 consecutive Business Days.
"Loan" means any loan made by any Lender pursuant to this Agreement.
"Loan Documents" means, collectively, this Agreement, the Revolving
Credit Notes (if any), the Guaranty, the Fee Letter, each Letter of Credit
Reimbursement Agreement, each Hedging Contract between any Loan Party and any
Person that was a Lender or an Affiliate of a Lender at the time it entered into
such Hedging Contract, each Cash Management Document, the Collateral Documents
and each certificate, agreement or document executed by a Loan Party and
delivered to the Administrative Agent or any Lender in connection with or
pursuant to any of the foregoing.
"Loan Party" means each of the Borrower, each Guarantor and each other
Subsidiary of the Borrower that executes and delivers a Loan Document.
23
"Material Adverse Change" means a material adverse change in any of
(a) the condition (financial or otherwise), business, performance, prospects,
operations or properties of (i) for any period prior to the Closing Date, Old
WCI and its Subsidiaries taken as a whole, and (ii) for any period after the
Closing Date, the Borrower and its Subsidiaries taken as a whole, (b) the
legality, validity or enforceability of any Loan Document or any Related
Document, (c) the perfection or priority of the Liens granted pursuant to the
Collateral Documents, or (d) the ability of the Borrower to repay the
Obligations or of the other Loan Parties to perform their respective obligations
under the Loan Documents. Notwithstanding anything to the contrary in this
Agreement, prior to the CBA Effective Date the following shall not in and of
themselves constitute a Material Adverse Change: (i) the Borrower shall not have
entered into a new collective bargaining agreement with the United Steel Workers
of America, or (ii) there shall have occurred and be continuing a strike, work
stoppage, slowdown or lockout, or there shall be pending or threatened any
unfair labor practices, grievances, complaints or arbitrations involving the
Borrower or any of its Subsidiaries.
"Material Adverse Effect" means an effect that results in or causes,
or could reasonably be expected to result in or cause, a Material Adverse
Change.
"Maximum Credit" means, at any time, (a) the lesser of (i) the
Revolving Credit Commitments in effect at such time and (ii) the Borrowing Base
at such time minus (b) the aggregate amount of any Availability Reserve in
effect at such time.
"Monthly Available Credit" means, at any time the average daily
Available Credit for the immediately preceding calendar month.
"▇▇▇▇▇'▇" means ▇▇▇▇▇'▇ Investors Services, Inc.
"Mortgage Supporting Documents" means, with respect to a Mortgage for
a parcel of Real Property, each the following:
(a) (i) evidence in form and substance reasonably satisfactory to the
Administrative Agent that the recording of counterparts of such Mortgage in
the recording offices specified in such Mortgage will create a valid and
enforceable second priority lien on property described therein in favor of
the Administrative Agent for the benefit of the Secured Parties (or in
favor of such other trustee as may be required or desired under local law)
subject only to (A) Liens permitted under Section 8.2 (Liens, Etc.) and (B)
such other Liens as the Administrative Agent may reasonably approve and
(ii) an opinion of counsel in each state in which any such Mortgage is to
be recorded in form and substance and from counsel reasonably satisfactory
to the Administrative Agent;
(b) (i) a mortgagee's title policy (or policies) or marked-up
unconditional binder (or binders) for such insurance (or other evidence
reasonably acceptable to the Administrative Agent proving ownership
thereof) ("Mortgagee's Title Insurance Policy"), dated a date reasonably
satisfactory to the Administrative Agent, and shall (A) be in an amount not
less than the appraised value (determined by reference to the Initial
Appraisals) of such parcel of Real Property, (B) be issued at ordinary
rates, (C) insure that the Lien granted pursuant to the Mortgage insured
thereby creates a valid first Lien on such parcel of Real Property free and
clear of all defects and encumbrances, except for Liens permitted under
Section 8.2 (Liens, Etc.) and for such defects and
24
encumbrances as may be approved by the Administrative Agent, (D) name the
Administrative Agent for the benefit of the Secured Parties as the insured
thereunder, (E) be in the form of ALTA Loan Policy - 1992 (or such local
equivalent thereof as is reasonably satisfactory to the Administrative
Agent), (F) contain a comprehensive lender's endorsement (including, but
not limited to, a revolving credit endorsement and a floating rate
endorsement), (G) be issued by Chicago Title Insurance Company, First
American Title Insurance Company, Lawyers Title Insurance Corporation or
any other title company reasonably satisfactory to the Administrative Agent
(including any such title companies acting as co-insurers or reinsurers)
and (H) be otherwise in form and substance reasonably satisfactory to the
Administrative Agent and (ii) a copy of all documents referred to, or
listed as exceptions to title, in such title policy (or policies) in each
case in form and substance reasonably satisfactory to the Administrative
Agent;
(c) maps or plats of a current as-built survey of such parcel of Real
Property certified to and received by (in a manner reasonably satisfactory
to each of them) the Administrative Agent and the title insurance company
issuing the Mortgagee's Title Insurance Policy for such Mortgage, dated a
date reasonably satisfactory to the Administrative Agent and such title
insurance company, by an independent professional licensed land surveyor
reasonably satisfactory to the Administrative Agent and such title
insurance company, which maps or plats and the surveys on which they are
based shall be made in form and substance reasonably satisfactory to the
Administrative Agent;
(d) evidence in form and substance reasonably satisfactory to the
Administrative Agent that all premiums in respect of each Mortgagee's Title
Insurance Policy, all recording fees and stamp, documentary, intangible or
mortgage taxes, if any, in connection with the Mortgage have been paid; and
(e) such other agreements, documents and instruments in form and
substance reasonably satisfactory to the Administrative Agent as the
Administrative Agent reasonably deems necessary or appropriate to create,
register or otherwise perfect, maintain, evidence the existence, substance,
form or validity of, or enforce a valid and enforceable first priority lien
on such parcel of Real Property in favor of the Administrative Agent for
the benefit of the Secured Parties (or in favor of such other trustee as
may be required or desired under local law) subject only to (A) Liens
permitted under Section 8.2 (Liens, Etc.) and (B) such other Liens as the
Administrative Agent may reasonably approve.
"Mortgagee's Title Insurance Policy" has the meaning specified in the
definition of Mortgage Supporting Documents.
"Mortgages" means the mortgages, deeds of trust or other real estate
security documents made or required herein to be made by the Borrower or any
other Loan Party, each in form and substance reasonably satisfactory to the
Administrative Agent.
"Multiemployer Plan" means a multiemployer plan, as defined in Section
4001(a)(3) of ERISA, to which the Borrower, any of its Subsidiaries or any ERISA
Affiliate has any obligation or liability, contingent or otherwise.
"Net Cash Proceeds" means proceeds received by the Borrower or any of
its Subsidiaries after the Closing Date in cash or Cash Equivalents from any (a)
Asset Sale, other
25
than an Asset Sale permitted under Section 8.4 (a), (b), (c), (d) or (e) (Sale
of Assets), net of (i) the reasonable cash costs of sale, assignment or other
disposition, (ii) taxes paid or reasonably estimated to be payable as a result
thereof and (iii) any amount required to be paid or prepaid on Indebtedness
(other than the Obligations) secured by the assets subject to such Asset Sale,
provided, however, that evidence of each of clauses (i), (ii) and (iii) above is
provided to the Administrative Agent in form and substance reasonably
satisfactory to it, (b) Property Loss Event or (c)(i) Equity Issuance or (ii)
any Debt Issuance permitted under Section 8.1(j) or (m) (Indebtedness), in each
case net of brokers' and advisors' fees and other costs incurred in connection
with such transaction; provided, however, that in the case of this clause (c),
evidence of such costs is provided to the Administrative Agent in form and
substance reasonably satisfactory to it.
"New Senior Notes" means the 8% senior secured notes due 2014 issued
pursuant to the Indenture.
"Non-Cash Interest Expense" means, with respect to any Person for any
period, the sum of the following amounts to the extent included in the
definition of Interest Expense (a) the amount of debt discount and debt issuance
costs amortized, (b) charges relating to write-ups or write-downs in the book or
carrying value of existing Financial Covenant Debt, (c) interest payable in
evidences of Indebtedness or securities or by addition to the principal of the
related Indebtedness and (d) other non-cash interest.
"Non-Consenting Lender" has the meaning specified in Section 11.1(c)
(Amendments, Waivers, Etc.).
"Non-Funding Lender" has the meaning specified in Section 2.2(d)
(Borrowing Procedures).
"Non-U.S. Lender" means each Lender (or the Administrative Agent) that
is a Non-U.S. Person.
"Non-U.S. Person" means any Person that is not a Domestic Person.
"Noteholders' Second Plan" means the Secured Noteholders' Revised
Second Plan of Reorganization under Chapter 11 of the Bankruptcy Code filed with
the Bankruptcy Court on May 19, 2005 in connection with Case No. 03-44662, as
modified pursuant to the Notices of Modification of Secured Noteholders' Plan of
Reorganization under Chapter 11 of the Bankruptcy Code on August 19, 2005,
September 8, 2005, September 30, 2005 and October 12, 2005.
"Noteholders' Modified Plan" means the Secured Noteholders' Second
Plan of Reorganization under Chapter 11 of the Bankruptcy Code, dated October
17, 2005 filed with the Bankruptcy Court in connection with Case No. 03-44662,
as modified pursuant to the Notices of Modification of Secured Noteholders'
Second Plan of Reorganization under Chapter 11 of the Bankruptcy Code filed on
December 23, 2005, December 27, 2005, January 17, 2006 and January 25, 2006 in
connection with Case No. 05-81439, as may be further amended from time to time.
"Notice of Borrowing" has the meaning specified in Section 2.2(a)
(Borrowing Procedures).
26
"Notice of Conversion or Continuation" has the meaning specified in
Section 2.11(a) (Conversion/Continuation Option).
"Obligations" means the Loans, the Letter of Credit Obligations and
all other amounts, obligations, covenants and duties owing by the Borrower to
the Administrative Agent, any Lender, any Issuer, any Affiliate of any of them
or any Indemnitee, of every type and description (whether by reason of an
extension of credit, opening or amendment of a letter of credit or payment of
any draft drawn or other payment thereunder, loan, guaranty, indemnification,
foreign exchange or currency swap transaction, interest rate hedging transaction
or otherwise), present or future, arising under this Agreement, any other Loan
Document (including Cash Management Documents and Hedging Contracts that are
Loan Documents), whether direct or indirect (including those acquired by
assignment), absolute or contingent, due or to become due, now existing or
hereafter arising and however acquired and whether or not evidenced by any note,
guaranty or other instrument or for the payment of money, including all letter
of credit, cash management and other fees, interest, charges, expenses,
attorneys' fees and disbursements, Cash Management Obligations and other sums
chargeable to the Borrower under this Agreement, any other Loan Document
(including Cash Management Documents and Hedging Contracts that are Loan
Documents) and all obligations of the Borrower under any Loan Document to
provide cash collateral for any Letter of Credit Obligation.
"Old WCI" means WCI Steel, Inc., an Ohio corporation.
"Order" means a confirmation order under Section 1129 of the
Bankruptcy Code and/or Section 363 of the Bankruptcy Code, in each case, on
terms and conditions reasonably satisfactory to the Administrative Agent
confirming the Noteholders' Second Plan.
"Orderly Liquidation Value" means, by reference to the most recent
Appraisal of such inventory received by the Administrative Agent, the orderly
liquidation value (net of costs and expenses incurred in connection with
liquidation) of such inventory.
"Patriot Act" means the USA Patriot Act of 2001 (31 U.S.C. 5318 et
seq.).
"PBGC" means the Pension Benefit Guaranty Corporation or any successor
thereto.
"Permit" means any permit, approval, authorization, license, variance
or permission required from a Governmental Authority under an applicable
Requirement of Law.
"Permitted Holders" means Harbinger.
"Permitted Refinancing" means renewals, extensions, refinancings and
refundings of Indebtedness permitted by Section 8.1 (Indebtedness) that (a) are
in an aggregate principal amount not greater than the principal amount of, and
is on terms no less favorable to the Borrower or any Subsidiary of the Borrower
obligated thereunder and (b) have a weighted average maturity and final maturity
(measured as of the date of such renewal, refinancing, extension or refunding)
no shorter than that of such Indebtedness.
"Person" means an individual, partnership, corporation (including a
business trust), joint stock company, estate, trust, limited liability company,
unincorporated association, joint venture or other entity or a Governmental
Authority.
27
"Pledge and Security Agreement" means an agreement, in substantially
the form of Exhibit I (Form of Pledge and Security Agreement), executed by the
Borrower and each Guarantor.
"Pledged Debt Instruments" has the meaning specified in the Pledge and
Security Agreement.
"Pledged Stock" has the meaning specified in the Pledge and Security
Agreement.
"Pro Forma Basis" means, with respect to any determination for any
period, that such determination shall be made giving pro forma effect to each
acquisition consummated during such period, together with all transactions
relating thereto consummated during such period (including any incurrence,
assumption, refinancing or repayment of Indebtedness), as if such acquisition
and related transactions had been consummated on the first day of such period,
in each case based on historical results accounted for in accordance with GAAP
and, to the extent applicable, reasonable assumptions that are specified in
reasonable detail in the relevant Compliance Certificate, Financial Statement or
other document provided to the Administrative Agent or any Lender in connection
herewith in accordance with Regulation S-X of the Securities Act of 1933.
"Proceeds" has the meaning given to such term in the UCC.
"Projections" means those financial projections distributed to the
Lenders in the Confidential Information Memorandum dated April 4, 2006, covering
the fiscal years ending in 2006 through 2010 inclusive.
"Property Loss Event" means (a) any loss of or damage to property of
the Borrower or any of its Subsidiaries that results in the receipt by such
Person of proceeds of insurance whose Dollar Equivalent exceeds $2,500,000
(individually or in the aggregate) or (b) any taking of property of the Borrower
or any of its Subsidiaries that results in the receipt by such Person of a
compensation payment in respect thereof whose Dollar Equivalent exceeds
$2,500,000 (individually or in the aggregate).
"Protective Advances" means all expenses, disbursements and advances
incurred by the Administrative Agent pursuant to the Loan Documents after the
occurrence and during the continuance of an Event of Default that the
Administrative Agent, in its sole discretion, deems necessary or desirable to
preserve or protect the Collateral or any portion thereof or to enhance the
likelihood, or maximize the amount, of repayment of the Obligations.
"Purchasing Lender" has the meaning specified in Section 11.7(a)
(Sharing of Payments, Etc.).
"Ratable Portion" or (other than in the expression "equally and
ratably") "ratably" means, with respect to any Revolving Credit Lender, the
percentage obtained by dividing (a) the Revolving Credit Commitment of such
Revolving Credit Lender by (b) the aggregate Revolving Credit Commitments of all
Revolving Credit Lenders (or, at any time after the Revolving Credit Termination
Date, the percentage obtained by dividing the aggregate outstanding principal
balance of the Revolving Credit Outstandings owing to such Revolving
28
Credit Lender by the aggregate outstanding principal balance of the Revolving
Credit Outstandings owing to all Revolving Credit Lenders).
"Real Property" of any Person means the Land of such Person, together
with the right, title and interest of such Person, if any, in and to the
streets, the Land lying in the bed of any streets, roads or avenues, opened or
proposed, in front of, the air space and development rights pertaining to the
Land and the right to use such air space and development rights, all rights of
way, privileges, liberties, tenements, hereditaments and appurtenances belonging
or in any way appertaining thereto, all fixtures, all easements now or hereafter
benefiting the Land and all royalties and rights appertaining to the use and
enjoyment of the Land, including all alley, vault, drainage, mineral, water, oil
and gas rights, together with all of the buildings and other improvements now or
hereafter erected on the Land and any fixtures appurtenant thereto.
"Register" has the meaning specified in Section 2.7(b) (Evidence of
Debt).
"Reimbursement Date" has the meaning specified in Section 2.4(h)
(Letters of Credit).
"Reimbursement Obligations" means, as and when matured, the obligation
of the Borrower to pay, on the date payment is made or scheduled to be made to
the beneficiary under each such Letter of Credit (or at such other date as may
be specified in the applicable Letter of Credit Reimbursement Agreement) and in
the currency drawn (or in such other currency as may be specified in the
applicable Letter of Credit Reimbursement Agreement), all amounts of each drafts
and other requests for payments drawn under Letters of Credit, and all other
matured reimbursement or repayment obligations of the Borrower to any Issuer
with respect to amounts drawn under Letters of Credit.
"Related Documents" means the Indenture and each other document and
instrument executed with respect to either thereof.
"Release" means, with respect to any Person, any release, spill,
emission, leaking, pumping, injection, deposit, disposal, discharge, dispersal,
leaching or migration, in each case, of any Contaminant into the indoor or
outdoor environment or into or out of any property owned, leased or operated by
such Person, including the movement of Contaminants through or in the air, soil,
surface water, ground water or property.
"Remedial Action" means all actions required under or taken pursuant
to Environmental Laws to (a) clean up, remove, treat or in any other way address
any Contaminant in the indoor or outdoor environment, (b) prevent the Release or
threat of Release or minimize the further Release so that a Contaminant does not
migrate or endanger or threaten to endanger public health or welfare or the
indoor or outdoor environment or (c) perform pre-remedial studies and
investigations and post-remedial monitoring and care.
"Requirement of Law" means, with respect to any Person, the common law
and all federal, state, local and foreign laws, treaties, rules and regulations,
orders, judgments, decrees and other determinations of, concessions, grants,
franchises, licenses and other Contractual Obligations with, any Governmental
Authority or arbitrator, applicable to or binding upon such Person or any of its
property or to which such Person or any of its property is subject.
29
"Requisite Lenders" means, collectively, Revolving Credit Lenders
having more than fifty percent (50%) of the aggregate outstanding amount of the
Revolving Credit Commitments or, after the Revolving Credit Termination Date,
more than fifty percent (50%) of the aggregate Revolving Credit Outstandings. A
Non-Funding Lender shall not be included in the calculation of "Requisite
Lenders."
"Responsible Officer" means, with respect to any Person, any of the
principal executive officers, managing members or general partners of such
Person or such other person as the Board of Directors, or other equivalent body,
of such Person, shall designate as such hereunder.
"Restricted Payment" means (a) any dividend, distribution or any other
payment whether direct or indirect, on account of any Stock or Stock Equivalent
of the Borrower or any of its Subsidiaries now or hereafter outstanding and (b)
any redemption, retirement, sinking fund or similar payment, purchase or other
acquisition for value, direct or indirect, of any Stock or Stock Equivalent of
the Borrower or any of its Subsidiaries now or hereafter outstanding.
"Restricted Payments Basket" means, at any time, an amount equal to
the sum of (i) 100% of the Net Cash Proceeds of any Equity Issuances made after
the Closing Date and (ii) 75% of the Net Cash Proceeds of any issuance of
Subordinated Debt after the Closing Date to the extent permitted under Section
8.1(m). The Restricted Payments Basket shall be zero on the Closing Date.
"Revolving Credit Commitment" means, with respect to each Revolving
Credit Lender, the commitment of such Revolving Credit Lender to make Revolving
Loans and acquire interests in other Revolving Credit Outstandings in the
aggregate principal amount outstanding not to exceed the amount set forth
opposite such Revolving Credit Lender's name on Schedule I (Revolving Credit
Commitments) under the caption "Revolving Credit Commitment," as amended to
reflect each Assignment and Acceptance executed by such Revolving Credit Lender
and as such amount may be reduced pursuant to this Agreement.
"Revolving Credit Lender" means each Lender other than the Swing Loan
Lender.
"Revolving Credit Note" means a promissory note of the Borrower
payable to the order of any Revolving Credit Lender in a principal amount equal
to the amount of such Revolving Credit Lender's Revolving Credit Commitment
evidencing the aggregate Indebtedness of the Borrower to such Revolving Credit
Lender resulting from the Revolving Loans owing to such Revolving Credit Lender.
"Revolving Credit Outstandings" means, at any particular time, the sum
of (a) the principal amount of the Revolving Loans outstanding at such time, (b)
the Letter of Credit Obligations outstanding at such time and (c) the principal
amount of the Swing Loans outstanding at such time.
"Revolving Credit Termination Date" shall mean the earliest of (a) the
Scheduled Termination Date, (b) the date of termination of all of the Revolving
Credit Commitments pursuant to Section 2.5 (Reduction and Termination of the
Revolving Credit Commitments) and (c) the date on which the Obligations become
due and payable pursuant to Section 9.2 (Remedies).
30
"Revolving Loan" has the meaning specified in Section 2.1 (The
Revolving Credit Commitments).
"S&P" means Standard & Poor's Rating Services.
"▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act" means the United States ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of
2002.
"Scheduled Termination Date" means the 5th anniversary of the Closing
Date.
"Secured Obligations" means, in the case of the Borrower, the
Obligations and, in the case of any other Loan Party, the obligations of such
Loan Party under the Guaranty and the other Loan Documents to which it is a
party.
"Secured Parties" means the Lenders, the Issuers, the Administrative
Agent and any other holder of any Secured Obligation.
"Securities Account" has the meaning given to such term in the UCC.
"Securities Account Control Agreement" has the meaning specified in
the Pledge and Security Agreement.
"Securities Intermediary" has the meaning given to such term in the
UCC.
"Security" means any Stock, Stock Equivalent, voting trust
certificate, bond, debenture, note or other evidence of Indebtedness, whether
secured, unsecured, convertible or subordinated, or any certificate of interest,
share or participation in, any temporary or interim certificate for the purchase
or acquisition of, or any right to subscribe to, purchase or acquire, any of the
foregoing, but shall not include any evidence of the Obligations.
"Selling Lender" has the meaning specified in Section 11.7(a) (Sharing
of Payments, Etc.).
"Series A Preferred Stock" means the Series A Convertible Preferred
Stock of the Borrower having a par value of $0.0001 per share.
"Solvent" means, with respect to any Person as of any date of
determination, that, as of such date, (a) the value of the assets of such Person
(both at fair value and present fair saleable value) is greater than the total
amount of liabilities (including contingent and unliquidated liabilities) of
such Person, (b) such Person is able to pay all liabilities of such Person as
such liabilities mature and (c) such Person does not have unreasonably small
capital. In computing the amount of contingent or unliquidated liabilities at
any time, such liabilities shall be computed at the amount that, in light of all
the facts and circumstances existing at such time, represents the amount that
can reasonably be expected to become an actual or matured liability.
"Special Purpose Vehicle" means any special purpose funding vehicle
identified as such in writing by any Lender to the Administrative Agent.
"Standby Letter of Credit" means any Letter of Credit that is not a
Documentary Letter of Credit.
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"Stock" means shares of capital stock (whether denominated as common
stock or preferred stock), beneficial, partnership or membership interests,
participations or other equity equivalents (regardless of how designated) of or
in a corporation, partnership, limited liability company or equivalent entity,
whether voting or non-voting.
"Stock Equivalents" means all securities convertible into or
exchangeable for Stock and all warrants, options or other rights to purchase or
subscribe for any Stock, whether or not presently convertible, exchangeable or
exercisable.
"Subordinated Debt" has the meaning specified in Section 8.1(m)
(Indebtedness).
"Subsidiary" means, with respect to any Person, any corporation,
partnership, limited liability company or other business entity of which an
aggregate of 50% or more of the outstanding Voting Stock is, at the time,
directly or indirectly, owned or controlled by such Person or one or more
Subsidiaries of such Person.
"Subsidiary Guarantor" means each Subsidiary of the Borrower party to
or that becomes party to the Guaranty.
"Substitute Institution" has the meaning specified in Section 2.17(a)
(Substitution of Lenders).
"Substitution Notice" has the meaning specified in Section 2.17(a)
(Substitution of Lenders).
"Swing Loan" has the meaning specified in Section 2.3 (Swing Loans).
"Swing Loan Lender" means Citicorp or any other Revolving Credit
Lender that becomes the Administrative Agent or agrees, with the approval of the
Administrative Agent and the Borrower, to act as the Swing Loan Lender
hereunder, in each case in its capacity as the Swing Loan Lender hereunder.
"Swing Loan Request" has the meaning specified in Section 2.3(b)
(Swing Loans).
"Swing Loan Sublimit" means $15,000,000.
"Syndication Completion Date" means the date upon which the Arranger
determines in its sole discretion that there has been a successful syndication
of the Loans and Revolving Credit Commitments.
"Synthetic Lease" means a transaction that is treated as a lease for
accounting purposes and maintained "off-balance sheet" in accordance with GAAP
and is treated as a loan for purposes of federal corporate income taxes.
"Tax Affiliate" means, with respect to any Person, (a) any Subsidiary
of such Person and (b) any Affiliate of such Person with which such Person files
or is eligible to file consolidated, combined or unitary tax returns, provided,
however, that notwithstanding the foregoing, for the purposes of Section 4.8(b)
(Taxes), Harbinger shall not be deemed to be a Tax Affiliate of the Borrower.
32
"Tax Return" has the meaning specified in Section 4.8(a) (Taxes).
"Taxes" has the meaning specified in Section 2.16(a) (Taxes).
"Title IV Plan" means a pension plan, other than a Multiemployer Plan,
covered by Title IV of ERISA and to which the Borrower any of its Subsidiaries
or any ERISA Affiliate has any obligation or liability, contingent or otherwise.
"UCC" has the meaning specified in the Pledge and Security Agreement.
"Unfunded Pension Liability" means, with respect to the Borrower or
any of its Subsidiaries at any time, the sum of (a) the amount, if any, by which
the present value of all accrued benefits under each Title IV Plan (other than
any Title IV Plan subject to Section 4063 of ERISA) exceeds the fair market
value of all assets of such Title IV Plan allocable to such benefits in
accordance with Title IV of ERISA, as determined as of the most recent valuation
date for such Title IV Plan using the actuarial assumptions in effect under such
Title IV Plan, (b) the aggregate amount of withdrawal liability that could be
assessed under Section 4063 with respect to each Title IV Plan subject to such
section, separately calculated for each such Title IV Plan as of its most recent
valuation date and (c) for a period of five years following a transaction
reasonably likely to be covered by Section 4069 of ERISA, the liabilities
(whether or not accrued) that could be avoided by the Borrower, any of its
Subsidiaries or any ERISA Affiliate as a result of such transaction.
"Unrestricted Cash" means Cash and Cash Equivalents of the Borrower
and the Subsidiary Guarantors that are not subject to any Lien or other
restriction, including any restriction on the payment of such Cash to the
Borrower (as a dividend, distribution or otherwise).
"Unused Commitment Fee" has the meaning specified in Section 2.12(a)
(Fees).
"Updated Appraisal" means each appraisal (other than the Initial
Appraisals) that is conducted after the Closing Date pursuant to Section 6.12(b)
(Borrowing Base Determination) for purpose of determining the Borrowing Base, in
form and substance to the Administrative Agent and performed by an appraiser
that is satisfactory to the Administrative Agent.
"U.S. Lender" means each Lender or Issuer (or the Administrative
Agent) that is a Domestic Person.
"Voting Stock" means Stock of any Person having ordinary power to vote
in the election of members of the board of directors, managers, trustees or
other controlling Persons, of such Person (irrespective of whether, at the time,
Stock of any other class or classes of such entity shall have or might have
voting power by reason of the happening of any contingency).
"Wholly-Owned Subsidiary" of any Person means any Subsidiary of such
Person, all of the Stock of which (other than director's qualifying shares, as
may be required by law) is owned by such Person, either directly or indirectly
through one or more Wholly-Owned Subsidiaries of such Person.
"Withdrawal Liability" means, with respect to the Borrower or any of
its Subsidiaries at any time, the aggregate liability incurred (whether or not
assessed) with respect to
33
all Multiemployer Plans pursuant to Section 4201 of ERISA or for increases in
contributions required to be made pursuant to Section 4243 of ERISA.
SECTION 1.2 COMPUTATION OF TIME PERIODS
In this Agreement, in the computation of periods of time from a
specified date to a later specified date, the word "from" means "from and
including" and the words "to" and "until" each mean "to but excluding" and the
word "through" means "to and including."
SECTION 1.3 ACCOUNTING TERMS AND PRINCIPLES
(a) Except as set forth below, all accounting terms not specifically
defined herein shall be construed in conformity with GAAP and all accounting
determinations required to be made pursuant hereto (including for purpose of
measuring compliance with Article V (Financial Covenants)) shall, unless
expressly otherwise provided herein, be made in conformity with GAAP.
(b) If any change in the accounting principles used in the preparation
of the most recent Financial Statements referred to in Section 6.1 (Financial
Statements) is hereafter required or permitted by the rules, regulations,
pronouncements and opinions of the Financial Accounting Standards Board or the
American Institute of Certified Public Accountants (or any successors thereto)
and such change is adopted by the Borrower with the agreement of the Borrower's
Accountants and results in a change in any of the calculations required by
Article V (Financial Covenants) or VIII (Negative Covenants) that would not have
resulted had such accounting change not occurred, the parties hereto agree to
enter into negotiations in order to amend such provisions so as to equitably
reflect such change such that the criteria for evaluating compliance with such
covenants by the Borrower shall be the same after such change as if such change
had not been made; provided, however, that no change in GAAP that would affect a
calculation that measures compliance with any covenant contained in Article V
(Financial Covenants) or VIII (Negative Covenants) shall be given effect until
such provisions are amended to reflect such changes in GAAP.
(c) For purposes of making any of the financial covenant calculations
required by this Agreement to be made by the Borrower and its Subsidiaries, all
components of such calculations for any fiscal period or portion thereof
occurring prior to the Closing Date shall be calculated by reference to the
financial performance of Old WCI.
SECTION 1.4 CONVERSION OF FOREIGN CURRENCIES
(a) Financial Covenant Debt. Financial Covenant Debt denominated in
any currency other than Dollars shall be calculated using the Dollar Equivalent
thereof as of the date of the Financial Statements on which such Financial
Covenant Debt is reflected.
(b) Dollar Equivalents. The Administrative Agent shall determine the
Dollar Equivalent of any amount as required hereby, and a determination thereof
by the Administrative Agent shall be conclusive absent manifest error. The
Administrative Agent may, but shall not be obligated to, rely on any
determination made by any Loan Party in any document delivered to the
Administrative Agent. The Administrative Agent may determine the Dollar
Equivalent of any amount on any date either in its own discretion or upon the
request of any Lender or Issuer.
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(c) Rounding-Off. The Administrative Agent may set up appropriate
rounding off mechanisms or otherwise round-off amounts hereunder to the nearest
higher or lower amount in whole Dollar or cent to ensure amounts owing by any
party hereunder or that otherwise need to be calculated or converted hereunder
are expressed in whole Dollars or in whole cents, as may be necessary or
appropriate.
SECTION 1.5 CERTAIN TERMS
(a) The terms "herein," "hereof," "hereto" and "hereunder" and similar
terms refer to this Agreement as a whole and not to any particular Article,
Section, subsection or clause in, this Agreement.
(b) Unless otherwise expressly indicated herein, (i) references in
this Agreement to an Exhibit, Schedule, Article, Section, clause or sub-clause
refer to the appropriate Exhibit or Schedule to, or Article, Section, clause or
sub-clause in this Agreement and (ii) the words "above" and "below", when
following a reference to a clause or a sub-clause of any Loan Document, refer to
a clause or sub-clause within, respectively, the same Section or clause.
(c) Each agreement defined in this Article I shall include all
appendices, exhibits and schedules thereto. Unless the prior written consent of
the Requisite Lenders is required hereunder for an amendment, restatement,
supplement or other modification to any such agreement and such consent is not
obtained, references in this Agreement to such agreement shall be to such
agreement as so amended, restated, supplemented or modified.
(d) References in this Agreement to any statute shall be to such
statute as amended or modified from time to time and to any successor
legislation thereto, in each case as in effect at the time any such reference is
operative.
(e) The term "including" when used in any Loan Document means
"including without limitation" except when used in the computation of time
periods.
(f) The terms "Lender," "Issuer" and "Administrative Agent" include,
without limitation, their respective successors.
(g) Upon the appointment of any successor Administrative Agent
pursuant to Section 10.7 (Successor Administrative Agent), references to
Citicorp in Section 10.4 (The Administrative Agent Individually) and to Citibank
in the definitions of Base Rate, Dollar Equivalent and Eurodollar Rate shall be
deemed to refer to the financial institution then acting as the Administrative
Agent or one of its Affiliates if it so designates.
ARTICLE II
THE FACILITY
SECTION 2.1 THE REVOLVING CREDIT COMMITMENTS
On the terms and subject to the conditions contained in this
Agreement, each Revolving Credit Lender severally agrees to make loans in
Dollars (each a "Revolving Loan") to the Borrower from time to time on any
Business Day during the period from the date hereof until
35
the Revolving Credit Termination Date in an aggregate principal amount at any
time outstanding for all such loans by such Revolving Credit Lender not to
exceed such Revolving Credit Lender's Revolving Credit Commitment; provided,
however, that at no time shall any Revolving Credit Lender be obligated to make
a Revolving Loan in excess of such Revolving Credit Lender's Ratable Portion of
the Available Credit. Within the limits of the Revolving Credit Commitment of
each Revolving Credit Lender, amounts of Revolving Loans repaid may be
reborrowed under this Section 2.1.
SECTION 2.2 BORROWING PROCEDURES
(a) Each Borrowing shall be made on notice given by the Borrower to
the Administrative Agent not later than 11:00 a.m. (New York time) (i) one
Business Day, in the case of a Borrowing of Base Rate Loans, and (ii) three
Business Days, in the case of a Borrowing of Eurodollar Rate Loans, prior to the
date of the proposed Borrowing. Each such notice shall be in substantially the
form of Exhibit C (Form of Notice of Borrowing) (a "Notice of Borrowing"),
specifying (A) the date of such proposed Borrowing, (B) the aggregate amount of
such proposed Borrowing, (C) whether any portion of the proposed Borrowing will
be of Base Rate Loans or Eurodollar Rate Loans, (D) the initial Interest Period
or Periods for any such Eurodollar Rate Loans and (E) the Available Credit
(after giving effect to the proposed Borrowing). The Revolving Loans shall be
made as Base Rate Loans unless, subject to Section 2.14 (Special Provisions
Governing Eurodollar Rate Loans), the Notice of Borrowing specifies that all or
a portion thereof shall be Eurodollar Rate Loans. Notwithstanding anything to
the contrary contained in Section 2.3(a) (Swing Loans), if any Notice of
Borrowing requests a Borrowing of Base Rate Loans, the Administrative Agent may
make a Swing Loan available to the Borrower in an aggregate amount not to exceed
such proposed Borrowing, and the aggregate amount of the corresponding proposed
Borrowing shall be reduced accordingly by the principal amount of such Swing
Loan. Each Borrowing shall be in an aggregate amount of not less than $1,000,000
or an integral multiple of $1,000,000 in excess thereof.
(b) The Administrative Agent shall give to each Revolving Credit
Lender prompt notice of the Administrative Agent's receipt of a Notice of
Borrowing and, if Eurodollar Rate Loans are properly requested in such Notice of
Borrowing, the applicable interest rate determined pursuant to Section 2.14(a)
(Determination of Interest Rate). Each Revolving Credit Lender shall, before
11:00 a.m. (New York time) on the date of the proposed Borrowing, make available
to the Administrative Agent at its address referred to in Section 11.8 (Notices,
Etc.), in immediately available funds, such Revolving Credit Lender's Ratable
Portion of such proposed Borrowing. Upon fulfillment (or due waiver in
accordance with Section 11.1 (Amendments, Waivers, Etc.)) (i) on the Closing
Date, of the applicable conditions set forth in Section 3.1 (Conditions
Precedent to Initial Loans and Letters of Credit) and (ii) at any time
(including the Closing Date), of the applicable conditions set forth in Section
3.2 (Conditions Precedent to Each Loan and Letter of Credit), and after the
Administrative Agent's receipt of such funds, the Administrative Agent shall
make such funds available to the Borrower.
(c) Unless the Administrative Agent shall have received notice from a
Revolving Credit Lender prior to the date of any proposed Borrowing that such
Revolving Credit Lender will not make available to the Administrative Agent such
Revolving Credit Lender's Ratable Portion of such Borrowing (or any portion
thereof), the Administrative Agent may assume that such Revolving Credit Lender
has made such Ratable Portion available to the Administrative Agent on the date
of such Borrowing in accordance with this Section 2.2 and the Administrative
Agent may, in reliance upon such assumption, make available to the Borrower on
36
such date a corresponding amount. If and to the extent that such Revolving
Credit Lender shall not have so made such Ratable Portion available to the
Administrative Agent, such Revolving Credit Lender and the Borrower severally
agree to repay to the Administrative Agent forthwith on demand such
corresponding amount together with interest thereon, for each day from the date
such amount is made available to the Borrower until the date such amount is
repaid to the Administrative Agent, at (i) in the case of the Borrower, the
interest rate applicable at the time to the Loans comprising such Borrowing and
(ii) in the case of such Revolving Credit Lender, the Federal Funds Rate for the
first Business Day and thereafter at the interest rate applicable at the time to
the Loans comprising such Borrowing. If such Revolving Credit Lender shall repay
to the Administrative Agent such corresponding amount, such corresponding amount
so repaid shall constitute such Revolving Credit Lender's Loan as part of such
Borrowing for purposes of this Agreement. If the Borrower shall repay to the
Administrative Agent such corresponding amount, such payment shall not relieve
such Revolving Credit Lender of any obligation it may have hereunder to the
Borrower.
(d) The failure of any Revolving Credit Lender to make on the date
specified any Loan or any payment required by it (such Lender being a
"Non-Funding Lender"), including any payment in respect of its participation in
Swing Loans and Letter of Credit Obligations, shall not relieve any other
Revolving Credit Lender of its obligations to make such Loan or payment on such
date but no such other Revolving Credit Lender shall be responsible for the
failure of any Non-Funding Lender to make a Loan or payment required under this
Agreement.
SECTION 2.3 SWING LOANS
(a) On the terms and subject to the conditions contained in this
Agreement, the Swing Loan Lender may, in its sole discretion, make, in Dollars,
loans (each a "Swing Loan") otherwise available to the Borrower under the
Facility from time to time on any Business Day during the period from the date
hereof until the Revolving Credit Termination Date in an aggregate principal
amount at any time outstanding (together with the aggregate outstanding
principal amount of any other Loan made by the Swing Loan Lender hereunder in
its capacity as a Lender or the Swing Loan Lender) not to exceed the Swing Loan
Sublimit; provided, however, that at no time shall the Swing Loan Lender make
any Swing Loan to the extent that, after giving effect to such Swing Loan, the
aggregate Revolving Credit Outstandings would exceed the Maximum Credit. Each
Swing Loan shall be a Base Rate Loan and must be repaid in full within seven
days after its making or, if sooner, upon any Borrowing hereunder and shall in
any event mature no later than the Revolving Credit Termination Date. Within the
limits set forth in the first sentence of this clause (a), amounts of Swing
Loans repaid may be reborrowed under this clause (a).
(b) In order to request a Swing Loan, the Borrower shall telecopy (or
forward by electronic mail or similar means) to the Administrative Agent a duly
completed request in substantially the form of Exhibit D (Form of Swing Loan
Request), setting forth the requested amount and date of such Swing Loan (a
"Swing Loan Request"), to be received by the Administrative Agent not later than
1:00 p.m. (New York time) on the day of the proposed borrowing. The
Administrative Agent shall promptly notify the Swing Loan Lender of the details
of the requested Swing Loan. Subject to the terms of this Agreement, the Swing
Loan Lender may make a Swing Loan available to the Administrative Agent and, in
turn, the Administrative Agent shall make such amounts available to the Borrower
on the date of the relevant Swing Loan Request. The Swing Loan Lender shall not
make any Swing Loan in the period commencing on the first Business Day after it
receives written notice from the Administrative Agent or any
37
Revolving Credit Lender that one or more of the conditions precedent contained
in Section 3.2 (Conditions Precedent to Each Loan and Letter of Credit) shall
not on such date be satisfied, and ending when such conditions are satisfied.
Except as set forth in Section 2.3(a), the Swing Loan Lender shall not otherwise
be required to determine that, or take notice whether, the conditions precedent
set forth in Section 3.2 (Conditions Precedent to Each Loan and Letter of
Credit) have been satisfied in connection with the making of any Swing Loan.
(c) The Swing Loan Lender shall notify the Administrative Agent in
writing (which writing may be a telecopy or electronic mail) weekly, by no later
than 10:00 a.m. (New York time) on the first Business Day of each week, of the
aggregate principal amount of its Swing Loans then outstanding.
(d) The Swing Loan Lender may demand at any time that each Revolving
Credit Lender pay to the Administrative Agent, for the account of the Swing Loan
Lender, in the manner provided in clause (e) below, such Revolving Credit
Lender's Ratable Portion of all or a portion of the outstanding Swing Loans,
which demand shall be made through the Administrative Agent, shall be in writing
and shall specify the outstanding principal amount of Swing Loans demanded to be
paid.
(e) The Administrative Agent shall forward each notice referred to in
clause (c) above and each demand referred to in clause (d) above to each
Revolving Credit Lender on the day such notice or such demand is received by the
Administrative Agent (except that any such notice or demand received by the
Administrative Agent after 2:00 p.m. (New York time) on any Business Day or any
such demand received on a day that is not a Business Day shall not be required
to be forwarded to the Revolving Credit Lenders by the Administrative Agent
until the next succeeding Business Day), together with a statement prepared by
the Administrative Agent specifying the amount of each Revolving Credit Lender's
Ratable Portion of the aggregate principal amount of the Swing Loans stated to
be outstanding in such notice or demanded to be paid pursuant to such demand,
and, notwithstanding whether or not the conditions precedent set forth in
Sections 3.2 (Conditions Precedent to Each Loan and Letter of Credit) and 2.1
(The Revolving Credit Commitments) shall have been satisfied (which conditions
precedent the Revolving Credit Lenders hereby irrevocably waive), each Revolving
Credit Lender shall, before 11:00 a.m. (New York time) on the Business Day next
succeeding the date of such Revolving Credit Lender's receipt of such notice or
demand, make available to the Administrative Agent, in immediately available
funds, for the account of the Swing Loan Lender, the amount specified in such
statement. Upon such payment by a Revolving Credit Lender, such Revolving Credit
Lender shall, except as provided in clause (f) below, be deemed to have made a
Revolving Loan to the Borrower. The Administrative Agent shall use such funds to
repay the Swing Loans to the Swing Loan Lender. To the extent that any Revolving
Credit Lender fails to make such payment available to the Administrative Agent
for the account of the Swing Loan Lender, the Borrower shall repay such Swing
Loan on demand.
(f) Upon the occurrence of a Default under Section 9.1(f) (Events of
Default), each Revolving Credit Lender shall acquire, without recourse or
warranty, an undivided participation in each Swing Loan otherwise required to be
repaid by such Revolving Credit Lender pursuant to clause (e) above, which
participation shall be in a principal amount equal to such Revolving Credit
Lender's Ratable Portion of such Swing Loan, by paying to the Swing Loan Lender
on the date on which such Revolving Credit Lender would otherwise have been
required to make a payment in respect of such Swing Loan pursuant to clause (e)
above, in immediately available funds, an amount equal to such Revolving Credit
Lender's Ratable Portion
38
of such Swing Loan. If all or part of such amount is not in fact made available
by such Revolving Credit Lender to the Swing Loan Lender on such date, the Swing
Loan Lender shall be entitled to recover any such unpaid amount on demand from
such Revolving Credit Lender together with interest accrued from such date at
the Federal Funds Rate for the first Business Day after such payment was due and
thereafter at the rate of interest then applicable to Base Rate Loans.
(g) From and after the date on which any Revolving Credit Lender (i)
is deemed to have made a Revolving Loan pursuant to clause (e) above with
respect to any Swing Loan or (ii) purchases an undivided participation interest
in a Swing Loan pursuant to clause (f) above, the Swing Loan Lender shall
promptly distribute to such Revolving Credit Lender such Revolving Credit
Lender's Ratable Portion of all payments of principal of and interest received
by the Swing Loan Lender on account of such Swing Loan other than those received
from a Revolving Credit Lender pursuant to clause (e) or (f) above.
SECTION 2.4 LETTERS OF CREDIT
(a) On the terms and subject to the conditions contained in this
Agreement, each Issuer agrees to Issue at the request of the Borrower and for
the account of the Borrower one or more Letters of Credit from time to time on
any Business Day during the period commencing on the Closing Date and ending on
the earlier of the Revolving Credit Termination Date and 30 days prior to the
Scheduled Termination Date; provided, however, that no Issuer shall be under any
obligation to Issue (and, upon the occurrence of any of the events described in
clauses (ii), (iii), (iv), and (v)(A) below, shall not Issue) any Letter of
Credit upon the occurrence of any of the following:
(i) any order, judgment or decree of any Governmental Authority
or arbitrator shall purport by its terms to enjoin or restrain such Issuer
from Issuing such Letter of Credit or any Requirement of Law applicable to
such Issuer or any request or directive (whether or not having the force of
law) from any Governmental Authority with jurisdiction over such Issuer
shall prohibit, or request that such Issuer refrain from, the Issuance of
letters of credit generally or such Letter of Credit in particular or shall
impose upon such Issuer with respect to such Letter of Credit any
restriction or reserve or capital requirement (for which such Issuer is not
otherwise compensated) not in effect on the date of this Agreement or
result in any unreimbursed loss, cost or expense that was not applicable,
in effect or known to such Issuer as of the date of this Agreement and that
such Issuer in good ▇▇▇▇▇ ▇▇▇▇▇ material to it;
(ii) such Issuer shall have received any written notice of the
type described in clause (d) below;
(iii) after giving effect to the Issuance of such Letter of
Credit, the aggregate Revolving Credit Outstandings would exceed the
Maximum Credit at such time;
(iv) after giving effect to the Issuance of such Letter of
Credit, the sum of (i) the Dollar Equivalents of the Letter of Credit
Undrawn Amounts at such time and (ii) the Dollar Equivalents of the
Reimbursement Obligations at such time exceeds the Letter of Credit
Sublimit; or
39
(v) (A) any fees due in connection with a requested Issuance have
not been paid, (B) such Letter of Credit is requested to be Issued in a
form that is not acceptable to such Issuer or (C) the Issuer for such
Letter of Credit shall not have received, in form and substance reasonably
acceptable to it and, if applicable, duly executed by such Borrower,
applications, agreements and other documentation (collectively, a "Letter
of Credit Reimbursement Agreement") such Issuer generally employs in the
ordinary course of its business for the Issuance of letters of credit of
the type of such Letter of Credit.
None of the Lenders (other than the Issuers in their capacity as such) shall
have any obligation to Issue any Letter of Credit.
(b) In no event shall the expiration date of any Letter of Credit be
more than one year after the date of issuance thereof; provided, however, that
any Letter of Credit with a term less than or equal to one year may provide for
the renewal thereof for additional periods less than or equal to one year, as
long as, on or before the expiration of each such term and each such period, the
Borrower and the Issuer of such Letter or Credit shall have the option to
prevent such renewal; and provided, further, that, for any Letter of Credit
having an expiration date after the Scheduled Termination Date, the Borrower
agrees to deliver to the Administrative Agent on or prior to the Scheduled
Termination Date a letter of credit or letters of credit in form and substance
acceptable to the Administrative Agent and issued by a bank acceptable to the
Administrative Agent, in each case in its sole discretion, and/or cash
collateral in an amount equal to 105% of the maximum drawable amount of any such
Letter of Credit.
(c) In connection with the Issuance of each Letter of Credit, the
Borrower shall give the relevant Issuer and the Administrative Agent at least
two Business Days' prior written notice, in substantially the form of Exhibit E
(Form of Letter of Credit Request) (or in such other written or electronic form
as is acceptable to the Issuer), of the requested Issuance of such Letter of
Credit (a "Letter of Credit Request"). Such notice shall be irrevocable and
shall specify the Issuer of such Letter of Credit, the currency of issuance and
face amount of the Letter of Credit requested, the date of Issuance of such
requested Letter of Credit, the date on which such Letter of Credit is to expire
(which date shall be a Business Day) and, in the case of an issuance, the Person
for whose benefit the requested Letter of Credit is to be issued. Such notice,
to be effective, must be received by the relevant Issuer and the Administrative
Agent not later than 11:00 a.m. (New York time) on the second Business Day prior
to the requested Issuance of such Letter of Credit.
(d) Subject to the satisfaction of the conditions set forth in this
Section 2.4, the relevant Issuer shall, on the requested date, Issue a Letter of
Credit on behalf of the Borrower in accordance with such Issuer's usual and
customary business practices. No Issuer shall Issue any Letter of Credit in the
period commencing on the first Business Day after it receives written notice
from any Revolving Credit Lender that one or more of the conditions precedent
contained in Section 3.2 (Conditions Precedent to Each Loan and Letter of
Credit) or clause (a) above (other than those conditions set forth in clauses
(a)(i), (a)(v)(B) and (C) above and, to the extent such clause relates to fees
owing to the Issuer of such Letter of Credit and its Affiliates, clause (a)(v)
and (A) above) are not on such date satisfied or duly waived and ending when
such conditions are satisfied or duly waived. No Issuer shall otherwise be
required to determine that, or take notice whether, the conditions precedent set
forth in Section 3.2 (Conditions Precedent to Each Loan and Letter of Credit)
have been satisfied in connection with the Issuance of any Letter of Credit.
40
(e) The Borrower agrees that, if requested by the Issuer of any Letter
of Credit, it shall execute a Letter of Credit Reimbursement Agreement in
respect to any Letter of Credit Issued hereunder. In the event of any conflict
between the terms of any Letter of Credit Reimbursement Agreement and this
Agreement, the terms of this Agreement shall govern.
(f) Each Issuer shall comply with the following:
(i) give the Administrative Agent written notice (or telephonic
notice confirmed promptly thereafter in writing), which writing may be a
telecopy or electronic mail, of the Issuance of any Letter of Credit Issued
by it, of all drawings under any Letter of Credit Issued by it and of the
payment (or the failure to pay when due) by the Borrower of any
Reimbursement Obligation when due (which notice the Administrative Agent
shall promptly transmit by telecopy, electronic mail or similar
transmission to each Lender);
(ii) upon the request of any Revolving Credit Lender, furnish to
such Revolving Credit Lender copies of any Letter of Credit Reimbursement
Agreement to which such Issuer is a party and such other documentation as
may reasonably be requested by such Revolving Credit Lender; and
(iii) no later than 10 Business Days following the last day of
each calendar month, provide to the Administrative Agent (and the
Administrative Agent shall provide a copy to each Lender requesting the
same) and the Borrower separate schedules for Documentary Letters of Credit
and Standby Letters of Credit issued by it, in form and substance
reasonably satisfactory to the Administrative Agent, setting forth the
aggregate Letter of Credit Obligations, in each case outstanding at the end
of each month, and any information requested by the Borrower or the
Administrative Agent relating thereto.
(g) Immediately upon the issuance by an Issuer of a Letter of Credit
in accordance with the terms and conditions of this Agreement, such Issuer shall
be deemed to have sold and transferred to each Revolving Credit Lender, and each
Revolving Credit Lender shall be deemed irrevocably and unconditionally to have
purchased and received from such Issuer, without recourse or warranty, an
undivided interest and participation, to the extent of such Revolving Credit
Lender's Ratable Portion, in such Letter of Credit and the obligations of the
Borrower with respect thereto (including all Letter of Credit Obligations with
respect thereto) and any security therefor and guaranty pertaining thereto.
(h) The Borrower agrees to pay to the Issuer of any Letter of Credit
the amount of all Reimbursement Obligations owing to such Issuer under any
Letter of Credit issued for its account no later than the date that is the next
succeeding Business Day after the Borrower receives written notice from such
Issuer that payment has been made under such Letter of Credit (the
"Reimbursement Date"), irrespective of any claim, set-off, defense or other
right that the Borrower may have at any time against such Issuer or any other
Person. In the event that any Issuer makes any payment under any Letter of
Credit and the Borrower shall not have repaid such amount to such Issuer
pursuant to this clause (h) or any such payment by the Borrower is rescinded or
set aside for any reason, such Reimbursement Obligation shall be payable on
demand with interest thereon computed (i) from the date on which such
Reimbursement Obligation arose to the Reimbursement Date, at the rate of
interest applicable during such period to Revolving Loans that are Base Rate
Loans and (ii) from the Reimbursement Date until the date of repayment in full,
at the rate of interest applicable during such period to past due Revolving
41
Loans that are Base Rate Loans, and such Issuer shall promptly notify the
Administrative Agent, which shall promptly notify each Revolving Credit Lender
of such failure, and each Revolving Credit Lender shall promptly and
unconditionally pay to the Administrative Agent for the account of such Issuer
the amount of such Revolving Credit Lender's Ratable Portion of such payment (or
the Dollar Equivalent thereof if such payment was made in any currency other
than Dollars) in immediately available Dollars. If the Administrative Agent so
notifies such Revolving Credit Lender prior to 11:00 a.m. (New York time) on any
Business Day, such Revolving Credit Lender shall make available to the
Administrative Agent for the account of such Issuer its Ratable Portion of the
amount of such payment on such Business Day in immediately available funds. Upon
such payment by a Revolving Credit Lender, such Revolving Credit Lender shall,
except during the continuance of a Default or Event of Default under Section
9.1(f) (Events of Default) and notwithstanding whether or not the conditions
precedent set forth in Section 3.2 (Conditions Precedent to Each Loan and Letter
of Credit) shall have been satisfied (which conditions precedent the Revolving
Credit Lenders hereby irrevocably waive), be deemed to have made a Revolving
Loan to the Borrower in the principal amount of such payment. Whenever any
Issuer receives from the Borrower a payment of a Reimbursement Obligation as to
which the Administrative Agent has received for the account of such Issuer any
payment from a Revolving Credit Lender pursuant to this clause (h), such Issuer
shall pay over to the Administrative Agent any amount received in excess of such
Reimbursement Obligation and, upon receipt of such amount, the Administrative
Agent shall promptly pay over to each Revolving Credit Lender, in immediately
available funds, an amount equal to such Revolving Credit Lender's Ratable
Portion of the amount of such payment adjusted, if necessary, to reflect the
respective amounts the Revolving Credit Lenders have paid in respect of such
Reimbursement Obligation.
(i) If and to the extent such Revolving Credit Lender shall not have
so made its Ratable Portion of the amount of the payment required by clause (h)
above available to the Administrative Agent for the account of such Issuer, such
Revolving Credit Lender agrees to pay to the Administrative Agent for the
account of such Issuer forthwith on demand any such unpaid amount together with
interest thereon, for the first Business Day after payment was first due at the
Federal Funds Rate and, thereafter, until such amount is repaid to the
Administrative Agent for the account of such Issuer, at a rate per annum equal
to the rate applicable to Base Rate Loans under the Facility.
(j) The Borrower's obligation to pay each Reimbursement Obligation and
the obligations of the Revolving Credit Lenders to make payments to the
Administrative Agent for the account of the Issuers with respect to Letters of
Credit shall be absolute, unconditional and irrevocable and shall be performed
strictly in accordance with the terms of this Agreement, under any and all
circumstances whatsoever, including the occurrence of any Default or Event of
Default, and irrespective of any of the following:
(i) any lack of validity or enforceability of any Letter of
Credit or any Loan Document, or any term or provision therein;
(ii) any amendment or waiver of or any consent to departure from
all or any of the provisions of any Letter of Credit or any Loan Document;
(iii) the existence of any claim, set off, defense or other right
that the Borrower, any other party guaranteeing, or otherwise obligated
with, the Borrower, any Subsidiary or other Affiliate thereof or any other
Person may at any time have against the beneficiary under any Letter of
Credit, any Issuer, the Administrative Agent or any
42
Lender or any other Person, whether in connection with this Agreement, any
other Loan Document or any other related or unrelated agreement or
transaction;
(iv) any draft or other document presented under a Letter of
Credit proving to be forged, fraudulent, invalid or insufficient in any
respect or any statement therein being untrue or inaccurate in any respect;
(v) payment by the Issuer under a Letter of Credit against
presentation of a draft or other document that does not comply with the
terms of such Letter of Credit; and
(vi) any other act or omission to act or delay of any kind of the
Issuer, the Lenders, the Administrative Agent or any other Person or any
other event or circumstance whatsoever, whether or not similar to any of
the foregoing, that might, but for the provisions of this Section 2.4,
constitute a legal or equitable discharge of the Borrower's obligations
hereunder.
Any action taken or omitted to be taken by the relevant Issuer under or in
connection with any Letter of Credit, if taken or omitted in the absence of
gross negligence or willful misconduct, shall not result in any liability of
such Issuer to the Borrower or any Lender. In determining whether drafts and
other documents presented under a Letter of Credit comply with the terms
thereof, the Issuer may accept documents that appear on their face to be in
order, without responsibility for further investigation, regardless of any
notice or information to the contrary and, in making any payment under any
Letter of Credit, the Issuer may rely exclusively on the documents presented to
it under such Letter of Credit as to any and all matters set forth therein,
including reliance on the amount of any draft presented under such Letter of
Credit, whether or not the amount due to the beneficiary thereunder equals the
amount of such draft and whether or not any document presented pursuant to such
Letter of Credit proves to be insufficient in any respect, if such document on
its face appears to be in order, and whether or not any other statement or any
other document presented pursuant to such Letter of Credit proves to be forged
or invalid or any statement therein proves to be inaccurate or untrue in any
respect whatsoever, and any noncompliance in any immaterial respect of the
documents presented under such Letter of Credit with the terms thereof shall, in
each case, be deemed not to constitute willful misconduct or gross negligence of
the Issuer.
SECTION 2.5 REDUCTION AND TERMINATION OF THE REVOLVING CREDIT
COMMITMENTS
The Borrower may, upon at least three Business Days' prior notice to
the Administrative Agent, terminate in whole or reduce in part ratably the
unused portions of the respective Revolving Credit Commitments of the Revolving
Credit Lenders; provided, however, that each partial reduction shall be in an
aggregate amount of not less than $5,000,000 or an integral multiple of
$1,000,000 in excess thereof.
SECTION 2.6 REPAYMENT OF LOANS
The Borrower promises to repay the entire unpaid principal amount of
the Revolving Loans and the Swing Loans on the Scheduled Termination Date or
earlier, if otherwise required by the terms hereof.
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SECTION 2.7 EVIDENCE OF DEBT
(a) Each Lender shall maintain in accordance with its usual practice
an account or accounts evidencing Indebtedness of the Borrower to such Lender
resulting from each Loan of such Lender from time to time, including the amounts
of principal and interest payable and paid to such Lender from time to time
under this Agreement.
(b) (i) The Administrative Agent, acting as agent of the Borrower
solely for this purpose and for tax purposes, shall establish and maintain
at its address referred to in Section 11.8 (Notices, Etc.) a record of
ownership (the "Register") in which the Administrative Agent agrees to
register by book entry the Administrative Agent's, each Lender's and each
Issuer's interest in each Loan, each Letter of Credit and each
Reimbursement Obligation, and in the right to receive any payments
hereunder and any assignment of any such interest or rights. In addition,
the Administrative Agent, acting as agent of the Borrower solely for this
purpose and for tax purposes, shall establish and maintain accounts in the
Register in accordance with its usual practice in which it shall record (i)
the names and addresses of the Lenders and the Issuers, (ii) the Revolving
Credit Commitments of each Lender from time to time, (iii) the amount of
each Loan made and, if a Eurodollar Rate Loan, the Interest Period
applicable thereto, (iv) the amount of any drawn Letters of Credit, (v) the
amount of any principal or interest due and payable, and paid, by the
Borrower to, or for the account of, each Lender hereunder, (vi) the amount
that is due and payable, and paid, by the Borrower to, or for the account
of, each Issuer, including the amount of Letter Credit Obligations
(specifying the amount of any Reimbursement Obligations) due and payable to
an Issuer, and (vii) the amount of any sum received by the Administrative
Agent hereunder from the Borrower, whether such sum constitutes principal
or interest (and the type of Loan to which it applies), fees, expenses or
other amounts due under the Loan Documents and each Lender's and Issuer's,
as the case may be, share thereof, if applicable.
(ii) Notwithstanding anything to the contrary contained in this
Agreement, the Loans (including the Revolving Credit Notes evidencing such
Loans) and the drawn Letters of Credit are registered obligations and the
right, title, and interest of the Lenders and the Issuers and their
assignees in and to such Loans or drawn Letters of Credit, as the case may
be, shall be transferable only upon notation of such transfer in the
Register. A Revolving Credit Note shall only evidence the Lender's or a
registered assignee's right, title and interest in and to the related Loan,
and in no event is any such Revolving Credit Note to be considered a bearer
instrument or obligation. This Section 2.7(b) and Section 11.2 (Assignments
and Participations) shall be construed so that the Loans and drawn Letters
of Credit are at all times maintained in "registered form" within the
meaning of Sections 163(f), 871(h)(2) and 881(c)(2) of the Code and any
related regulations (or any successor provisions of the Code or such
regulations).
(c) The entries made in the Register and in the accounts therein
maintained pursuant to clauses (a) and (b) above shall, to the extent permitted
by applicable law, be prima facie evidence of the existence and amounts of the
obligations recorded therein; provided, however, that the failure of any Lender
or the Administrative Agent to maintain such accounts or any error therein shall
not in any manner affect the obligations of the Borrower to repay the Loans in
accordance with their terms. In addition, the Loan Parties, the Administrative
Agent, the Lenders and the Issuers shall treat each Person whose name is
recorded in the Register as a Lender or as an Issuer, as applicable, for all
purposes of this Agreement. Information contained
44
in the Register with respect to any Lender or Issuer shall be available for
inspection by the Borrower, the Administrative Agent, such Lender or such Issuer
at any reasonable time and from time to time upon reasonable prior notice.
(d) Notwithstanding any other provision of the Agreement, in the event
that any Revolving Credit Lender requests that the Borrower execute and deliver
a promissory note or notes payable to such Revolving Credit Lender in order to
evidence the Indebtedness owing to such Revolving Credit Lender by the Borrower
hereunder, the Borrower shall promptly execute and deliver a Revolving Credit
Note or Revolving Credit Notes to such Revolving Credit Lender evidencing the
Revolving Loans of such Revolving Credit Lender, substantially in the form of
Exhibit B (Form of Revolving Credit Note).
SECTION 2.8 OPTIONAL PREPAYMENTS
The Borrower may prepay the outstanding principal amount of the
Revolving Loans and Swing Loans in whole or in part at any time; provided,
however, that if any prepayment of any Eurodollar Rate Loan is made by the
Borrower other than on the last day of an Interest Period for such Loan, the
Borrower shall also pay any amount owing pursuant to Section 2.14(e) (Breakage
Costs).
SECTION 2.9 MANDATORY PREPAYMENTS
(a) Upon receipt by the Borrower or any of its Subsidiaries of Net
Cash Proceeds arising from an Asset Sale, Property Loss Event, Debt Issuance or
Equity Issuance, the Borrower shall immediately prepay the Loans (or provide
cash collateral in respect of Letters of Credit) in an amount equal to 100% of
such Net Cash Proceeds. Any such mandatory prepayment shall be applied in
accordance with clause (b) below and shall not reduce the then current Revolving
Credit Commitments.
(b) Subject to the provisions of Section 2.13(g) (Payments and
Computations), any prepayments made by the Borrower required to be applied in
accordance with this clause (b) shall be applied as follows: first, to repay the
outstanding principal balance of the Swing Loans until such Swing Loans shall
have been repaid in full; second, to repay the outstanding principal balance of
the Revolving Loans until such Revolving Loans shall have been paid in full; and
then, if a Default or Event of Default is continuing, to provide cash collateral
for any Letter of Credit Obligations in an amount equal to 105% of such Letter
of Credit Obligations in the manner set forth in Section 9.3 (Actions in Respect
of Letters of Credit) until all such Letter of Credit Obligations have been
fully cash collateralized in the manner set forth therein.
(c) If at any time, the aggregate principal amount of Revolving Credit
Outstandings exceeds the aggregate Maximum Credit at such time, the Borrower
shall forthwith prepay the Swing Loans first and then the Revolving Loans then
outstanding in an amount equal to such excess. If any such excess remains after
repayment in full of the aggregate outstanding Swing Loans and Revolving Loans,
the Borrower shall provide cash collateral for the Letter of Credit Obligations
in the manner set forth in Section 9.3 (Actions in Respect of Letters of Credit)
in an amount equal to 105% of such excess.
(d) The Borrower hereby irrevocably waives the right to direct the
application of all funds in the Cash Collateral Account and agrees that the
Administrative Agent will and, upon the written direction of the Requisite
Lenders given at any time, shall except as
45
provided in Section 2.13(g) (Payments and Computations) and clause (b) above,
following the occurrence and during the continuance of an Event of Default,
apply all payments in respect of any Obligations and all available funds in the
Cash Collateral Account on a daily basis as follows: first, to repay the
outstanding principal amount of the Swing Loans until such Swing Loans have been
repaid in full; second, to repay the outstanding principal balance of the
Revolving Loans until such Revolving Loans shall have been repaid in full; and
then to any other Obligation then due and payable. The Administrative Agent
agrees so to apply such funds and the Borrower consents to such application. If
after all Letters of Credit shall have expired or be fully drawn and all
Revolving Credit Commitments shall have been terminated, there are no Loans
outstanding and no other Obligations that are then due and payable, then the
Administrative Agent shall cause any remaining funds in the Cash Collateral
Account to be paid at the written direction of the Borrower (or, in the absence
of such direction, to the Borrower or another Person lawfully entitled thereto).
(e) In the event that the application of any mandatory prepayment
under clause (a) above would result in the Borrower incurring breakage costs
pursuant to Section 2.14(e) (Special Provisions Governing Eurodollar Rate
Loans), so long as no Default or Event of Default shall have occurred and be
continuing, upon such receipt of the prepayment of the Revolving Loans as
provided above, the Borrower shall be deemed without further action to have
requested a Revolving Loan from the Lenders in an amount equal to the amount of
Revolving Loans so repaid and the Swing Loan Lender or the Lenders shall advance
to the Borrower a Swing Loan or Revolving Loans in such amount.
SECTION 2.10 INTEREST
(a) Rate of Interest. All Loans and the outstanding amount of all
other Obligations (other than pursuant to Hedging Contracts that are Loan
Documents, to the extent such Hedging Contracts provide for the accrual of
interest on unpaid obligations) shall bear interest, in the case of Loans, on
the unpaid principal amount thereof from the date such Loans are made and, in
the case of such other Obligations, from the date such other Obligations are due
and payable until, in all cases, paid in full, except as otherwise provided in
clause (c) below, as follows:
(i) if a Base Rate Loan or such other Obligation, at a rate per
annum equal to the sum of (A) the Base Rate as in effect from time to time
and (B) the Applicable Margin for Revolving Loans that are Base Rate Loans;
and
(ii) if a Eurodollar Rate Loan, at a rate per annum equal to the
sum of (A) the Eurodollar Rate determined for the applicable Interest
Period and (B) the Applicable Margin for Revolving Loans that are
Eurodollar Rate Loans in effect from time to time during such Eurodollar
Interest Period.
(b) Interest Payments. (i) Interest accrued on each Base Rate Loan
(other than Swing Loans) shall be payable in arrears (A) on the first Business
Day of each calendar month, commencing on the first such day following the
making of such Base Rate Loan and (B) if not previously paid in full, at
maturity (whether by acceleration or otherwise) of such Base Rate Loan, (ii)
interest accrued on Swing Loans shall be payable in arrears on the first
Business Day of the immediately succeeding calendar month, (iii) interest
accrued on each Eurodollar Rate Loan shall be payable in arrears (A) on the last
day of each Interest Period applicable to such Loan and, if such Interest Period
has a duration of more than three months, on each date during
46
such Interest Period occurring every three months from the first day of such
Interest Period, (B) upon the payment or prepayment thereof in full or in part
and (C) if not previously paid in full, at maturity (whether by acceleration or
otherwise) of such Eurodollar Rate Loan and (iv) interest accrued on the amount
of all other Obligations shall be payable on demand from and after the time such
Obligation becomes due and payable (whether by acceleration or otherwise). The
Borrower hereby consents to the payment on its behalf by the Swing Loan Lender
of all scheduled payments of interest hereunder with proceeds of a Swing Line
Loan made at the option of the Administrative Agent in accordance with the
provisions of Section 2.13(h) (Payments and Computations).
(c) Default Interest. Notwithstanding the rates of interest specified
in clause (a) above or elsewhere herein, effective immediately upon the
occurrence of an Event of Default and for as long thereafter as such Event of
Default shall be continuing, the principal balance of all Loans and the amount
of all other Obligations then due and payable shall bear interest at a rate that
is two percent per annum in excess of the rate of interest applicable to such
Loans or other Obligations from time to time. Such interest shall be payable on
demand.
SECTION 2.11 CONVERSION/CONTINUATION OPTION
(a) The Borrower may elect (i) at any time on any Business Day, to
convert Base Rate Loans (other than Swing Loans) or any portion thereof to
Eurodollar Rate Loans and (ii) at the end of any applicable Interest Period, to
convert Eurodollar Rate Loans or any portion thereof into Base Rate Loans or to
continue such Eurodollar Rate Loans or any portion thereof for an additional
Interest Period; provided, however, that the aggregate amount of the Eurodollar
Loans for each Interest Period must be in the amount of at least $10,000,000 or
an integral multiple of $5,000,000 in excess thereof. Each conversion or
continuation shall be allocated among the Loans of each Revolving Credit Lender
in accordance with such Revolving Credit Lender's Ratable Portion. Each such
election shall be in substantially the form of Exhibit F (Form of Notice of
Conversion or Continuation) (a "Notice of Conversion or Continuation") and shall
be made by giving the Administrative Agent at least three Business Days' prior
written notice specifying (A) the amount and type of Loan being converted or
continued, (B) in the case of a conversion to or a continuation of Eurodollar
Rate Loans, the applicable Interest Period and (C) in the case of a conversion,
the date of such conversion.
(b) The Administrative Agent shall promptly notify each Lender of its
receipt of a Notice of Conversion or Continuation and of the options selected
therein. Notwithstanding the foregoing, (i) no conversion in whole or in part of
Base Rate Loans to Eurodollar Rate Loans shall be permitted at any time prior to
the Syndication Completion Date unless the Borrower shall agree in writing to
pay any breakage costs incurred in connection therewith pursuant to Section
2.14(e) (Breakage Costs) and (ii) no conversion in whole or in part of Base Rate
Loans to Eurodollar Rate Loans and no continuation in whole or in part of
Eurodollar Rate Loans upon the expiration of any applicable Interest Period
shall be permitted at any time at which (A) a Default or an Event of Default
shall have occurred and be continuing or (B) the continuation of, or conversion
into, a Eurodollar Rate Loan would violate any provision of Section 2.14
(Special Provisions Governing Eurodollar Rate Loans). If, within the time period
required under the terms of this Section 2.11, the Administrative Agent does not
receive a Notice of Conversion or Continuation from the Borrower containing a
permitted election to continue any Eurodollar Rate Loans for an additional
Interest Period or to convert any such Loans, then, upon the expiration of the
applicable Interest Period, such Loans shall be automatically converted to Base
Rate Loans. Each Notice of Conversion or Continuation shall be irrevocable.
47
SECTION 2.12 FEES
(a) Unused Commitment Fee. The Borrower agrees to pay in immediately
available Dollars to each Revolving Credit Lender a commitment fee on the actual
daily amount by which the Revolving Credit Commitment of such Revolving Credit
Lender exceeds such Revolving Credit Lender's Ratable Portion of the sum of (i)
the aggregate outstanding principal amount of Revolving Loans and (ii) the
outstanding amount of the aggregate Letter of Credit Obligations (the "Unused
Commitment Fee") from the date hereof through the Revolving Credit Termination
Date at a rate equal to the Applicable Unused Commitment Fee Rate, payable in
arrears (x) on the first Business Day of each calendar month, commencing on the
first such Business Day following the Closing Date and (y) on the Revolving
Credit Termination Date.
(b) Letter of Credit Fees. The Borrower agrees to pay the following
amounts with respect to Letters of Credit issued by any Issuer:
(i) to the Administrative Agent for the account of each Issuer of
a Letter of Credit, with respect to each Letter of Credit issued by such
Issuer, an issuance fee equal to 0.25% per annum of the Dollar Equivalent
of the maximum undrawn face amount of such Letter of Credit, payable in
arrears (A) on the first Business Day of each calendar month, commencing on
the first such Business Day following the issuance of such Letter of Credit
and (B) on the Revolving Credit Termination Date;
(ii) to the Administrative Agent for the ratable benefit of the
Revolving Credit Lenders, with respect to each Letter of Credit, a fee
accruing in Dollars at a rate per annum equal to the Applicable Margin for
Revolving Loans that are Eurodollar Rate Loans on the Dollar Equivalent of
the maximum undrawn face amount of such Letter of Credit, payable in
arrears (A) on the first Business Day of each calendar month, commencing on
the first such Business Day following the issuance of such Letter of Credit
and (B) on the Revolving Credit Termination Date; provided, however, that
during the continuance of an Event of Default, such fee shall be increased
by two percent per annum (instead of, and not in addition to, any increase
pursuant to Section 2.10(c) (Interest)) and shall be payable on demand; and
(iii) to the Issuer of any Letter of Credit, with respect to the
issuance, amendment or transfer of each Letter of Credit and each drawing
made thereunder, documentary and processing charges in accordance with such
Issuer's standard schedule for such charges in effect at the time of
issuance, amendment, transfer or drawing, as the case may be.
(c) Additional Fees. The Borrower has agreed to pay to the
Administrative Agent and the Arranger additional fees, the amount and dates of
payment of which are embodied in the Fee Letter.
(d) Payment of Fees. The Borrower hereby consents to the payment on
its behalf by the Swing Loan Lender of all fees payable hereunder (including
fees payable under the Fee Letter) with proceeds of a Swing Loan made at the
option of the Administrative Agent in accordance with the provisions of Section
2.13(h) (Payments and Computations).
48
SECTION 2.13 PAYMENTS AND COMPUTATIONS
(a) The Borrower shall make each payment hereunder (including fees and
expenses) not later than 11:00 a.m. (New York time) on the day when due, in the
currency specified herein (or, if no such currency is specified, in Dollars) to
the Administrative Agent at its address referred to in Section 11.8 (Notices,
Etc.) in immediately available funds without set-off or counterclaim. The
Administrative Agent shall promptly thereafter cause to be distributed
immediately available funds relating to the payment of principal, interest or
fees to the Lenders, in accordance with the application of payments set forth in
clause (f) or (g) below, as applicable, for the account of their respective
Applicable Lending Offices; provided, however, that amounts payable pursuant to
Section 2.14(c) or (d) (Special Provisions Governing Eurodollar Rate Loans),
Section 2.15 (Capital Adequacy) or Section 2.16 (Taxes) shall be paid only to
the affected Lender or Lenders and amounts payable with respect to Swing Loans
shall be paid only to the Swing Loan Lender. Payments received by the
Administrative Agent after 11:00 a.m. (New York time) shall be deemed to be
received on the next Business Day.
(b) All computations of interest and of fees shall be made by the
Administrative Agent on the basis of a year of 360 days (or 365/366 days in the
case of Base Rate Loans), in each case for the actual number of days (including
the first day but excluding the last day) occurring in the period for which such
interest and fees are payable. Each determination by the Administrative Agent of
a rate of interest hereunder shall be conclusive and binding for all purposes,
absent manifest error.
(c) Each payment by the Borrower of any Loan, Reimbursement Obligation
(including interest or fees in respect thereof) and each reimbursement of
various costs, expenses or other Obligation shall be made in the currency in
which such Loan was made, such Letter of Credit issued or such cost, expense or
other Obligation was incurred; provided, however, that (i) the Letter of Credit
Reimbursement Agreement for a Letter of Credit may specify another currency for
the Reimbursement Obligation in respect of such Letter of Credit and (ii) other
than for payments in respect of a Loan or Reimbursement Obligation, Loan
Documents duly executed by the Administrative Agent or any Hedging Contract may
specify other currencies of payment for Obligations created by or directly
related to such Loan Document or Hedging Contract.
(d) Whenever any payment hereunder shall be stated to be due on a day
other than a Business Day, the due date for such payment shall be extended to
the next succeeding Business Day, and such extension of time shall in such case
be included in the computation of payment of interest or fees, as the case may
be; provided, however, that if such extension would cause payment of interest on
or principal of any Eurodollar Rate Loan to be made in the next calendar month,
such payment shall be made on the immediately preceding Business Day. All
repayments of any Revolving Loans shall be applied as follows: first, to repay
such Loans outstanding as Base Rate Loans and then, to repay such Loans
outstanding as Eurodollar Rate Loans, with those Eurodollar Rate Loans having
earlier expiring Eurodollar Interest Periods being repaid prior to those having
later expiring Eurodollar Interest Periods.
(e) Unless the Administrative Agent shall have received notice from
the Borrower to the Lenders prior to the date on which any payment is due
hereunder that the Borrower will not make such payment in full, the
Administrative Agent may assume that the Borrower has made such payment in full
to the Administrative Agent on such date and the Administrative Agent may, in
reliance upon such assumption, cause to be distributed to each Lender on such
due date an amount equal to the amount then due such Lender. If and to the
49
extent that the Borrower shall not have made such payment in full to the
Administrative Agent, each Lender shall repay to the Administrative Agent
forthwith on demand such amount distributed to such Lender together with
interest thereon (at the Federal Funds Rate for the first Business Day and
thereafter at the rate applicable to Base Rate Loans) for each day from the date
such amount is distributed to such Lender until the date such Lender repays such
amount to the Administrative Agent.
(f) Except for payments and other amounts received by the
Administrative Agent and applied in accordance with the provisions of clause (g)
below (or required to be applied in accordance with Section 2.9(b) or (d)
(Mandatory Prepayments)), all payments and any other amounts received by the
Administrative Agent from or for the benefit of the Borrower shall be applied as
follows: first, to pay principal of, and interest on, any portion of the Loans
the Administrative Agent may have advanced pursuant to the express provisions of
this Agreement on behalf of any Lender, for which the Administrative Agent has
not then been reimbursed by such Lender or the Borrower, second, to pay all
other Obligations then due and payable and third, as the Borrower so designates.
Payments in respect of Swing Loans received by the Administrative Agent shall be
distributed to the Swing Loan Lender; payments in respect of Revolving Loans
received by the Administrative Agent shall be distributed to each Revolving
Credit Lender in accordance with such Revolving Credit Lender's Ratable Portion;
and all payments of fees and all other payments in respect of any other
Obligation shall be allocated among such of the Lenders and Issuers as are
entitled thereto and, for such payments allocated to the Revolving Credit
Lenders, in proportion to their respective Ratable Portions.
(g) The Borrower hereby irrevocably waives the right to direct the
application of any and all payments in respect of the Obligations and any
proceeds of Collateral after the occurrence and during the continuance of an
Event of Default and agrees that, notwithstanding the provisions of Section
2.9(b) (Mandatory Prepayments) and clause (f) above, the Administrative Agent
may, and, upon either (A) the written direction of the Requisite Lenders or (B)
the acceleration of the Obligations pursuant to Section 9.2 (Remedies), shall
apply all payments in respect of any Obligations and all funds on deposit in any
Cash Collateral Account and all other proceeds of Collateral in the following
order:
(i) first, to pay interest on and then principal of any portion
of the Revolving Loans that the Administrative Agent may have advanced on
behalf of any Lender for which the Administrative Agent has not then been
reimbursed by such Lender or the Borrower;
(ii) second, to pay Secured Obligations in respect of any expense
reimbursements or indemnities and Facility Cash Management Obligations then
due to the Administrative Agent, the Lenders and the Issuers;
(iii) third, to pay Secured Obligations in respect of any fees
then due to the Administrative Agent, the Lenders and the Issuers;
(iv) fourth, to provide cash collateral for outstanding Letter of
Credit Undrawn Amounts in the manner described in Section 9.3 (Actions in
Respect of Letters of Credit);
(v) fifth, to pay interest then due and payable in respect of the
Loans and Reimbursement Obligations;
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(vi) sixth, to pay or prepay principal amounts on the Loans and
Reimbursement Obligations, ratably to the aggregate principal amount of
such reserved Loans, Reimbursement Obligations and Letter of Credit Undrawn
Amounts,
(vii) seventh, to pay up to $1,000,000 in Cash Management
Obligations and up to $10,000,000 in amounts owing with respect to Hedging
Contracts to the extent that the Administrative Agent has been notified to
establish Availability Reserves and has done so with respect to such
Obligations, ratably to the aggregate principal amount of such reserved
Obligations;
(viii) eighth, to the ratable payment of all other Secured
Obligations (including Cash Management Obligations and Hedging Contracts to
the extent not applied in respect of such Obligations in clause (vii)
above); and
(ix) ninth, to the Borrower to the extent of any remaining
proceeds;
provided, however, that if sufficient funds are not available to fund all
payments to be made in respect of any Secured Obligation described in any of
clauses (i), (ii), (iii), (iv), (v), (vi), (vii) and (viii) above the available
funds being applied with respect to any such Secured Obligation (unless
otherwise specified in such clause) shall be allocated to the payment of such
Secured Obligation ratably, based on the proportion of the Administrative
Agent's and each Lender's or Issuer's interest in the aggregate outstanding
Secured Obligations described in such clauses; provided, however, that payments
that would otherwise be allocated to the Revolving Credit Lenders shall be
allocated first to repay Protective Advances and Swing Loans pro rata and then
to the Revolving Credit Lenders. The order of priority set forth in clauses (i),
(ii), (iii), (iv), (v), (vi), (vii) and (viii) above may at any time and from
time to time be changed by the agreement of all Lenders without necessity of
notice to or consent of or approval by the Borrower, any Secured Party that is
not a Lender or Issuer or by any other Person that is not a Lender or Issuer.
The order of priority set forth in clauses (i), (ii) and (iii) above may be
changed only with the prior written consent of the Administrative Agent in
addition to that of the Requisite Lenders.
(h) At the option of the Administrative Agent, principal on the Swing
Loans, Reimbursement Obligations, interest, fees, expenses and other sums due
and payable in respect of the Revolving Loans and Protective Advances may be
paid from the proceeds of Swing Loans or Revolving Loans. The Borrower hereby
authorizes the Swing Loan Lender to make such Swing Loans pursuant to Section
2.3(a) (Swing Loans) and the Revolving Credit Lenders to make such Revolving
Loans pursuant to Section 2.2(a) (Borrowing Procedures) from time to time in the
amounts of any and all principal payable with respect to the Swing Loans,
Reimbursement Obligations, interest, fees, expenses and other sums payable in
respect of the Revolving Loans and Protective Advances, and further authorizes
the Administrative Agent to give the Lenders notice of any Borrowing with
respect to such Swing Loans and Revolving Loans and to distribute the proceeds
of such Swing Loans and Revolving Loans to pay such amounts. The Borrower agrees
that all such Swing Loans and Revolving Loans so made shall be deemed to have
been requested by it (irrespective of the satisfaction of the conditions in
Section 3.2 (Conditions Precedent to Each Loan and Letter of Credit), which
conditions the Lenders irrevocably waive) and directs that all proceeds thereof
shall be used to pay such amounts.
SECTION 2.14 SPECIAL PROVISIONS GOVERNING EURODOLLAR RATE LOANS
(a) Determination of Interest Rate
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The Eurodollar Rate for each Interest Period for Eurodollar Rate Loans
shall be determined by the Administrative Agent pursuant to the procedures set
forth in the definition of "Eurodollar Rate." The Administrative Agent's
determination shall be presumed to be correct absent manifest error and shall be
binding on the Borrower.
(b) Interest Rate Unascertainable, Inadequate or Unfair
In the event that (i) the Administrative Agent determines that
adequate and fair means do not exist for ascertaining the applicable interest
rates by reference to which the Eurodollar Rate then being determined is to be
fixed or (ii) the Requisite Lenders notify the Administrative Agent that the
Eurodollar Rate for any Interest Period will not adequately reflect the cost to
the Revolving Credit Lenders of making or maintaining such Loans for such
Interest Period, the Administrative Agent shall forthwith so notify the Borrower
and the Revolving Credit Lenders, whereupon each Eurodollar Loan shall
automatically, on the last day of the current Interest Period for such Loan,
convert into a Base Rate Loan and the obligations of the Revolving Credit
Lenders to make Eurodollar Rate Loans or to convert Base Rate Loans into
Eurodollar Rate Loans shall be suspended until the Administrative Agent shall
notify the Borrower that the Requisite Lenders have determined that the
circumstances causing such suspension no longer exist.
(c) Increased Costs
If at any time any Revolving Credit Lender determines that the
introduction of, or any change in or in the interpretation of, any law, treaty
or governmental rule, regulation or order (other than any change by way of
imposition or increase of reserve requirements included in determining the
Eurodollar Rate) or the compliance by such Revolving Credit Lender with any
guideline, request or directive from any central bank or other Governmental
Authority (whether or not having the force of law), shall have the effect of
increasing the cost to such Revolving Credit Lender of agreeing to make or
making, funding or maintaining any Eurodollar Rate Loans, then the Borrower
shall from time to time, upon demand by such Revolving Credit Lender (with a
copy of such demand to the Administrative Agent), pay to the Administrative
Agent for the account of such Revolving Credit Lender additional amounts
sufficient to compensate such Revolving Credit Lender for such increased cost,
provided that any such amounts payable in respect of Taxes shall be governed
exclusively by Section 2.16 (Taxes). A certificate as to the amount of such
increased cost, submitted to the Borrower and the Administrative Agent by such
Revolving Credit Lender, shall be conclusive and binding for all purposes,
absent manifest error.
(d) Illegality
Notwithstanding any other provision of this Agreement, if any
Revolving Credit Lender determines that the introduction of, or any change in or
in the interpretation of, any law, treaty or governmental rule, regulation or
order after the date of this Agreement shall make it unlawful, or any central
bank or other Governmental Authority shall assert that it is unlawful, for any
Revolving Credit Lender or its Eurodollar Lending Office to make Eurodollar Rate
Loans or to continue to fund or maintain Eurodollar Rate Loans, then, on notice
thereof and demand therefor by such Revolving Credit Lender to the Borrower
through the Administrative Agent, (i) the obligation of such Revolving Credit
Lender to make or to continue Eurodollar Rate Loans and to convert Base Rate
Loans into Eurodollar Rate Loans shall be suspended, and each such Revolving
Credit Lender shall make a Base Rate Loan as part of any requested Borrowing of
Eurodollar Rate Loans and (ii) if the affected Eurodollar Rate Loans are then
outstanding, the
52
Borrower shall immediately convert each such Loan into a Base Rate Loan. If, at
any time after a Revolving Credit Lender gives notice under this clause (d),
such Revolving Credit Lender determines that it may lawfully make Eurodollar
Rate Loans, such Revolving Credit Lender shall promptly give notice of that
determination to the Borrower and the Administrative Agent, and the
Administrative Agent shall promptly transmit the notice to each other Lender.
The Borrower's right to request, and such Revolving Credit Lender's obligation,
if any, to make Eurodollar Rate Loans shall thereupon be restored.
(e) Breakage Costs
In addition to all amounts required to be paid by the Borrower
pursuant to Section 2.10 (Interest), the Borrower shall compensate each
Revolving Credit Lender, upon demand, for all losses, expenses and liabilities
(including any loss or expense incurred by reason of the liquidation or
reemployment of deposits or other funds acquired by such Revolving Credit Lender
to fund or maintain such Revolving Credit Lender's Eurodollar Rate Loans to the
Borrower but excluding any loss of the Applicable Margin on the relevant Loans)
that such Revolving Credit Lender may sustain (i) if for any reason (other than
solely by reason of such Lender being a Non-Funding Lender) a proposed
Borrowing, conversion into or continuation of Eurodollar Rate Loans does not
occur on a date specified therefor in a Notice of Borrowing or a Notice of
Conversion or Continuation given by the Borrower or in a telephonic request by
it for borrowing or conversion or continuation or a successive Interest Period
does not commence after notice therefor is given pursuant to Section 2.11
(Conversion/Continuation Option), (ii) if for any reason any Eurodollar Rate
Loan is prepaid (including mandatorily pursuant to Section 2.9 (Mandatory
Prepayments)) on a date that is not the last day of the applicable Interest
Period, (iii) as a consequence of a required conversion of a Eurodollar Rate
Loan to a Base Rate Loan as a result of any of the events indicated in clause
(d) above or (iv) as a consequence of any failure by the Borrower to repay
Eurodollar Rate Loans when required by the terms hereof. The Revolving Credit
Lender making demand for such compensation shall deliver to the Borrower
concurrently with such demand a written statement as to such losses, expenses
and liabilities, and this statement shall be conclusive as to the amount of
compensation due to such Revolving Credit Lender, absent manifest error.
SECTION 2.15 CAPITAL ADEQUACY
If at any time any Lender determines that (a) the adoption of, or any
change in or in the interpretation of, any law, treaty or governmental rule,
regulation or order after the date of this Agreement regarding capital adequacy,
(b) compliance with any such law, treaty, rule, regulation or order or (c)
compliance with any guideline or request or directive from any central bank or
other Governmental Authority (whether or not having the force of law) shall have
the effect of reducing the rate of return on such Lender's (or any corporation
controlling such Lender's) capital as a consequence of its obligations hereunder
or under or in respect of any Letter of Credit to a level below that which such
Lender or such corporation could have achieved but for such adoption, change,
compliance or interpretation, then, upon demand from time to time by such Lender
(with a copy of such demand to the Administrative Agent), the Borrower shall pay
to the Administrative Agent for the account of such Lender, from time to time as
specified by such Lender, additional amounts sufficient to compensate such
Lender for such reduction. A certificate as to such amounts submitted to the
Borrower and the Administrative Agent by such Lender shall be conclusive and
binding for all purposes absent manifest error.
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SECTION 2.16 TAXES
(a) Except as otherwise provided in this Section 2.16, any and all
payments by any Loan Party under each Loan Document shall be made free and clear
of and without deduction for any and all present or future taxes, levies,
imposts, deductions, charges or withholdings, and all liabilities with respect
thereto, excluding (i) in the case of each Lender, each Issuer and the
Administrative Agent (A) taxes measured by its profits, gross receipts, net
worth income, franchise taxes imposed on it, and similar taxes imposed by the
jurisdiction (or any political subdivision thereof) under the laws of which such
Lender, such Issuer or the Administrative Agent (as the case may be) is
organized and (B) any U.S. withholding taxes payable with respect to payments
under the Loan Documents under laws (including any statute, treaty or
regulation) in effect on the Closing Date (or, in the case of (x) an Eligible
Assignee, the date of the Assignment and Acceptance, (y) a successor
Administrative Agent, the date of the appointment of such Administrative Agent,
and (z) a successor Issuer, the date such Issuer becomes an Issuer) applicable
to such Lender, such Issuer or the Administrative Agent, as the case may be, but
not excluding any U.S. withholding taxes payable as a result of any change in
such laws occurring after the Closing Date (or the date of such Assignment and
Acceptance or the date of such appointment of such Administrative Agent or the
date such Issuer becomes an Issuer) and, (ii) in the case of each Lender, Issuer
or the Administrative Agent, taxes measured by its income, profits, gross
receipts, net worth, and franchise taxes imposed on it, and similar taxes
imposed on it as a result of a present or former connection between such Lender,
Issuer or the Administrative Agent (as the case may be) and the jurisdiction of
the Governmental Authority imposing such tax or any taxing authority thereof or
therein and (iii) any amounts attributable to a Lender, Issuer or Administrative
Agent's failure to comply with the requirements of Section 2.16(f)(all such
non-excluded taxes, levies, imposts, deductions, charges, withholdings and
liabilities being hereinafter referred to as "Taxes"). If any Taxes shall be
required by law to be deducted from or in respect of any sum payable under any
Loan Document to any Lender, any Issuer or the Administrative Agent (w) the sum
payable shall be increased as may be necessary so that, after making all
required deductions (including deductions applicable to additional sums payable
under this Section 2.16), such Lender, Issuer or the Administrative Agent (as
the case may be) receives an amount equal to the sum it would have received had
no such deductions been made, (x) the relevant Loan Party shall make such
deductions, (y) the relevant Loan Party shall pay the full amount deducted to
the relevant taxing authority or other authority in accordance with applicable
law and (z) the relevant Loan Party shall deliver to the Administrative Agent
evidence of such payment.
(b) In addition, each Loan Party agrees to pay any present or future
stamp or documentary taxes or any other excise or property taxes, charges or
similar levies of the United States or any political subdivision thereof or any
applicable foreign jurisdiction, and all liabilities with respect thereto, in
each case arising from any payment made under any Loan Document or from the
execution, delivery or registration of, or otherwise with respect to, any Loan
Document (collectively, "Other Taxes").
(c) Each Loan Party shall, jointly and severally, indemnify each
Lender, Issuer and the Administrative Agent for the full amount of Taxes and
Other Taxes (including any Taxes and Other Taxes imposed by any jurisdiction on
amounts payable under this Section 2.16) paid by such Lender, Issuer or the
Administrative Agent (as the case may be) and any liability (including for
penalties, interest and expenses) arising therefrom or with respect thereto,
whether or not such Taxes or Other Taxes were correctly or legally asserted.
This indemnification shall
54
be made within 30 days from the date such Lender, Issuer or the Administrative
Agent (as the case may be) makes written demand therefor.
(d) Within 30 days after the date of any payment of Taxes or Other
Taxes by any Loan Party, the Borrower shall furnish to the Administrative Agent,
at its address referred to in Section 11.8 (Notices, Etc.), a copy of a receipt
evidencing payment thereof.
(e) Without prejudice to the survival of any other agreement of any
Loan Party hereunder or under the Guaranty, the agreements and obligations of
such Loan Party contained in this Section 2.16 shall survive the payment in full
of the Obligations.
(f) Each Non-U.S. Lender that is entitled to an exemption from U.S.
withholding tax, or that is subject to such tax at a reduced rate under an
applicable tax treaty, shall (v) on or prior to the Closing Date in the case of
each Non-U.S. Lender that is a signatory hereto, (w) on or prior to the date of
the Assignment and Acceptance pursuant to which such Non-U.S. Lender becomes a
Lender, on or prior to the date a successor Issuer becomes an Issuer or on or
prior to the date a successor Administrative Agent becomes the Administrative
Agent, (x) on or prior to the date on which any such form or certification
expires or becomes obsolete, (y) after the occurrence of any event requiring a
change in the most recent form or certification previously delivered by it to
the Borrower and the Administrative Agent, and (z) from time to time thereafter
if requested by the Borrower or the Administrative Agent, provide the
Administrative Agent and the Borrower with two completed originals of each of
the following, as applicable:
(i) (A) Form W-8ECI (claiming exemption from U.S. withholding tax
because the income is effectively connected with a U.S. trade or business)
or any successor form, (B) Form W-8BEN (claiming exemption from, or a
reduction of, U.S. withholding tax under an income tax treaty) or any
successor form, (C) in the case of a Non-U.S. Lender claiming exemption
under Sections 871(h) or 881(c) of the Code, a Form W-8BEN (claiming
exemption from U.S. withholding tax under the portfolio interest exemption)
or any successor form or (D) any other applicable form, certificate or
document prescribed by the IRS certifying as to such Non-U.S. Lender's
entitlement to such exemption from U.S. withholding tax or reduced rate
with respect to all payments to be made to such Non-U.S. Lender under the
Loan Documents. Unless the Borrower and the Administrative Agent have
received forms or other documents satisfactory to them indicating that
payments under any Loan Document to or for a Non-U.S. Lender are not
subject to U.S. withholding tax or are subject to such tax at a rate
reduced by an applicable tax treaty, the Loan Parties and the
Administrative Agent shall withhold amounts required to be withheld by
applicable Requirements of Law from such payments at the applicable
statutory rate. In no event shall the Borrower be obligated to make under
this Section 2.16 (Taxes) any payment to a Purchasing Lender in excess of
the an amount that the Borrower was obligated to pay the Selling Lender,
other than as a result of a change in law or regulation occurring after the
date of execution of the Assignment and Acceptance relating to the
applicable Loan and/or Commitment assigned.
(g) Each U.S. Lender shall (v) on or prior to the Closing Date in the
case of each U.S. Lender that is a signatory hereto, (w) on the date of the
Assignment and Acceptance pursuant to which such U.S. Lender becomes a Lender,
on or prior to the date a successor Issuer becomes an Issuer or on or prior to
the date a successor Administrative Agent becomes the Administrative Agent
hereunder, (x) on or prior to the date on which any such form or certification
expires or becomes obsolete, (y) after the occurrence of any event requiring a
change
55
in the most recent form or certification previously delivered by it to the
Borrower and the Administrative Agent and (z) from time to time if requested by
the Borrower or the Administrative Agent, provide the Administrative Agent and
the Borrower with two completed originals of Form W-9 (certifying that such U.S.
Lender is entitled to an exemption from U.S. backup withholding tax) or any
successor form. Solely for purposes of this Section 2.16(g), a U.S. Lender shall
not include a Lender, an Issuer or an Administrative Agent that may be treated
as an exempt recipient based on the indicators described in Treasury Regulation
section 1.6049-4(c)(1)(ii).
(h) Any Lender or Issuer claiming any additional amounts payable
pursuant to this Section 2.16 shall use its reasonable efforts (consistent with
its internal policies and Requirements of Law) to change the jurisdiction of its
lending office if the making of such a change would avoid the need for, or
reduce the amount of, any such additional amounts that would be payable or may
thereafter accrue and would not, in the sole determination of such Lender or
Issuer, be otherwise disadvantageous to such Lender or Issuer.
(i) If any Lender or Issuer determines in its sole discretion that it
has actually received any refund of any Taxes or Other Taxes as to which it has
been indemnified by any Loan Party or with respect to which any loan Party has
paid additional amounts pursuant to this Section 2.16, it shall pay to such Loan
Party an amount equal to such refund (but only to the extent of indemnity
payments made, or additional amounts paid, by such Loan Party under this Section
2.16 with respect to Taxes or Other Taxes giving rise to such refund), after
tax, and net of all expenses incurred by the such Lender or Issuer in connection
with such refund, provided, however, that such Loan Party, upon the request of
such Lender or Issuer, agrees to repay the amount paid over to such Loan Party
(plus any penalties, interest or other charges imposed by the relevant
Governmental Authority) to the Lender or Issuer in the event such lender or
Issuer is required to repay such refund to such Governmental Authority. This
subsection shall not be construed to require any Lender or Issuer to make
available its tax returns (or any other information relating to its taxes that
it deems confidential) to any Loan Party or any other Person.
SECTION 2.17 SUBSTITUTION OF LENDERS
(a) In the event that (i)(A) any Revolving Credit Lender makes a claim
under Section 2.14(c) (Increased Costs) or 2.15 (Capital Adequacy), (B) it
becomes illegal for any Revolving Credit Lender to continue to fund or make any
Eurodollar Rate Loan and such Revolving Credit Lender notifies the Borrower
pursuant to Section 2.14(d) (Illegality), (C) any Loan Party is required to make
any payment pursuant to Section 2.16 (Taxes) that is attributable to a
particular Revolving Credit Lender or (D) any Revolving Credit Lender becomes a
Non-Funding Lender, (ii) in the case of clause (i)(A) above, as a consequence of
increased costs in respect of which such claim is made, the effective rate of
interest payable to such Revolving Credit Lender under this Agreement with
respect to its Loans materially exceeds the effective average annual rate of
interest payable to the Requisite Lenders under this Agreement and (iii) in the
case of clause (i)(A), (B) and (C) above, Lenders holding at least 75% of the
Commitments are not subject to such increased costs or illegality, payment or
proceedings (any such Lender, an "Affected Lender"), the Borrower may substitute
any Lender and, if reasonably acceptable to the Administrative Agent, any other
Eligible Assignee (a "Substitute Institution") for such Affected Lender
hereunder, after delivery of a written notice (a "Substitution Notice") by the
Borrower to the Administrative Agent and the Affected Lender within a reasonable
time (in any case not to exceed 90 days) following the occurrence of any of the
events described in clause (i) above that the Borrower intends to make such
substitution; provided, however, that, if more than one Lender
56
claims increased costs, illegality or right to payment arising from the same act
or condition and such claims are received by the Borrower within 30 days of each
other, then the Borrower may substitute all, but not (except to the extent the
Borrower has already substituted one of such Affected Lenders before the
Borrower's receipt of the other Affected Lenders' claim) less than all, Lenders
making such claims.
(b) If the Substitution Notice was properly issued under this Section
2.17, the Affected Lender shall sell, and the Substitute Institution shall
purchase, all rights and claims of such Affected Lender under the Loan
Documents, and the Substitute Institution shall assume, and the Affected Lender
shall be relieved of, the Affected Lender's Revolving Credit Commitments and all
other prior unperformed obligations of the Affected Lender under the Loan
Documents (other than in respect of any damages (which, pursuant to Section 11.5
(Limitation of Liability), do not include exemplary or punitive damages, to the
extent permitted by applicable law) in respect of any such unperformed
obligations). Such purchase and sale (and the corresponding assignment of all
rights and claims hereunder) shall be recorded in the Register maintained by the
Administrative Agent and shall be effective on (and not earlier than) the later
of (i) the receipt by the Affected Lender of its Ratable Portion of the
Revolving Credit Outstandings, together with any other Obligations owing to it,
(ii) the receipt by the Administrative Agent of an agreement in form and
substance satisfactory to it and the Borrower whereby the Substitute Institution
shall agree to be bound by the terms hereof and (iii) the payment in full to the
Affected Lender in cash of all fees, unreimbursed costs and expenses and
indemnities accrued and unpaid through such effective date. Upon the
effectiveness of such sale, purchase and assumption, the Substitute Institution
shall become a "Lender" hereunder for all purposes of this Agreement having a
Revolving Credit Commitment in the amount of such Affected Lender's Revolving
Credit Commitment assumed by it and such Revolving Credit Commitment of the
Affected Lender shall be terminated; provided, however, that all indemnities
under the Loan Documents shall continue in favor of such Affected Lender.
(c) Each Revolving Credit Lender agrees that, if it becomes an
Affected Lender and its rights and claims are assigned hereunder to a Substitute
Institution pursuant to this Section 2.17, it shall execute and deliver to the
Administrative Agent an Assignment and Acceptance to evidence such assignment,
together with any Revolving Credit Note (if such Loans are evidenced by a
Revolving Credit Note) evidencing the Loans subject to such Assignment and
Acceptance; provided, however, that the failure of any Affected Lender to
execute an Assignment and Acceptance shall not render such assignment invalid.
(d) Each Lender agrees that, upon the occurrence of any event giving
rise to the application of Section 2.14 or 2.15 with respect to such Lender, it
will, if requested by the Borrower, use reasonable efforts to designate another
lending office for any Loans affected by such event with the object of reducing
or avoiding the consequences of such event; provided, that such designation is
made on terms that, in the judgment of such Lender, causes such Lender and its
lending office(s) to suffer no economic, legal or regulatory disadvantage.
57
ARTICLE III
CONDITIONS TO LOANS AND LETTERS OF CREDIT
SECTION 3.1 CONDITIONS PRECEDENT TO INITIAL LOANS AND LETTERS OF
CREDIT
The obligation of each Revolving Credit Lender to make the Loans
requested to be made by it on the Closing Date and the obligation of each Issuer
to Issue Letters of Credit on the Closing Date is subject to the satisfaction or
due waiver in accordance with Section 11.1 (Amendments, Waivers, Etc.) of each
of the following conditions precedent (notwithstanding anything to the contrary
in this Agreement, prior to the CBA Effective Date the following shall not in
and of themselves be conditions to the closing of the Facility or the basis for
the failure of any condition precedent set forth in this Section 3.1 (Conditions
Precedent to Initial Loans and Letters of Credit): (i) the Borrower not having
entered into a new collective bargaining agreement with the United Steel Workers
of America, or (ii) there not having occurred and be continuing a strike, work
stoppage, slowdown or lockout, or there not being pending or threatened any
unfair labor practices, grievances, complaints or arbitrations involving the
Borrower or any of its Subsidiaries):
(a) Certain Documents. The Administrative Agent shall have received on
or prior to the Closing Date (and, to the extent any Borrowing of any Eurodollar
Rate Loans is requested to be made on the Closing Date, in respect of the Notice
of Borrowing for such Eurodollar Rate Loans, at least three Business Days prior
to the Closing Date) each of the following, each dated the Closing Date unless
otherwise indicated or agreed to by the Administrative Agent, in form and
substance satisfactory to the Administrative Agent and in sufficient copies for
each Lender:
(i) this Agreement, duly executed and delivered by the Borrower
and, for the account of each Lender requesting the same, a Revolving Credit
Note of the Borrower conforming to the requirements set forth herein;
(ii) the Guaranty, duly executed by each Subsidiary Guarantor;
(iii) the Pledge and Security Agreement, duly executed by the
Borrower and each Subsidiary Guarantor, together with each of the
following:
(A) evidence satisfactory to the Administrative Agent that,
upon the filing and recording of instruments delivered at the Closing,
the Administrative Agent (for the benefit of the Secured Parties)
shall have a valid and perfected first priority security interest in
the Collateral (subject to Liens permitted under Section 8.2 (Liens,
Etc.)), including (x) such documents duly executed by each Loan Party
as the Administrative Agent may request with respect to the perfection
of its security interests in the Collateral (including financing
statements under the UCC, patent, trademark and copyright security
agreements suitable for filing with the Patent and Trademark Office or
the Copyright Office, as the case may be, and other applicable
documents under the laws of any jurisdiction with respect to the
perfection of Liens created by the Pledge and Security Agreement) and
(y) copies of UCC search reports as of a recent date listing all
effective financing statements that name any Loan Party as debtor,
together with copies of such financing statements, none of which shall
58
cover the Collateral, except for those that shall be terminated on the
Closing Date or are otherwise permitted hereunder;
(B) all certificates, instruments and other documents
representing all Pledged Stock being pledged pursuant to such Pledge
and Security Agreement and stock powers for such certificates,
instruments and other documents executed in blank;
(C) all instruments representing Pledged Debt Instruments
being pledged pursuant to such Pledge and Security Agreement duly
endorsed in favor of the Administrative Agent or in blank;
(D) all Deposit Account Control Agreements, duly executed by
the corresponding Deposit Account Bank and Loan Party, that, in the
reasonable judgment of the Administrative Agent, shall be required for
the Loan Parties to comply with Section 7.12 (Control Accounts;
Approved Deposit Accounts); and
(E) Securities Account Control Agreements duly executed by
the appropriate Loan Party and (1) all Securities Intermediaries with
respect to all Securities Accounts and securities entitlements of the
Borrower and each Subsidiary Guarantor and (2) all futures commission
agents and clearing houses with respect to all commodities contracts
and commodities accounts held by the Borrower and each Subsidiary
Guarantor;
(iv) Mortgages for all of the Real Properties of the Loan Parties
identified on Schedule 4.19 (Real Property) (except as may be agreed to by
the Administrative Agent), together with all Mortgage Supporting Documents
relating thereto;
(v) the Intercreditor Agreement, duly executed by the Borrower,
the Administrative Agent and The Bank of New York Trust Company, N.A.;
(vi) the Indenture Collateral Intercreditor Agreement, duly
executed by the Borrower, Wilmington Trust Company and The Bank of New York
Trust Company, N.A.;
(vii) the Collateral Access Agreement, duly executed by the
Borrower, the Administrative Agent, Wilmington Trust Company and The Bank
of New York Trust Company, N.A.;
(viii) a favorable opinion of (A) ▇▇▇▇▇▇▇▇▇ Will & ▇▇▇▇▇, counsel
to the Loan Parties, in substantially the form of Exhibit G (Form of
Opinion of Counsel for the Loan Parties), (B) counsel to the Loan Parties
in Ohio, in each case addressed to the Administrative Agent and the Lenders
and addressing such other matters as any Lender through the Administrative
Agent may reasonably request and (C) counsel to the Administrative Agent as
to the enforceability of this Agreement and the other Loan Documents to be
executed on the Closing Date;
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(ix) a copy of each Related Document (including a certificate
from each party to the Acquisition for the benefit of the Administrative
Agent, its counsel and the Lenders and Issuers that, subject only to the
funding of the initial Loan hereunder, such party is prepared to consummate
the Acquisition) and each Disclosure Document certified as being complete
and correct by a Responsible Officer of the Borrower;
(x) a copy of the articles or certificate of incorporation (or
equivalent Constituent Document) of each Loan Party, certified as of a
recent date by the Secretary of State of the state of organization of such
Loan Party, together with certificates of such official attesting to the
good standing of each such Loan Party;
(xi) a certificate of the Secretary or an Assistant Secretary of
each Loan Party certifying (A) the names and true signatures of each
officer of such Loan Party that has been authorized to execute and deliver
any Loan Document or other document required hereunder to be executed and
delivered by or on behalf of such Loan Party, (B) the by-laws (or
equivalent Constituent Document) of such Loan Party as in effect on the
date of such certification, (C) the resolutions of such Loan Party's Board
of Directors (or equivalent governing body) approving and authorizing the
execution, delivery and performance of this Agreement and the other Loan
Documents to which it is a party and (D) that there have been no changes in
the certificate of incorporation (or equivalent Constituent Document) of
such Loan Party from the certificate of incorporation (or equivalent
Constituent Document) delivered pursuant to clause (x) above;
(xii) a certificate of a Responsible Officer of the Borrower,
stating that the Borrower is Solvent after giving effect to the initial
Loans and Letters of Credit, the application of the proceeds thereof in
accordance with Section 7.9 (Application of Proceeds) and the payment of
all estimated legal, accounting and other fees related hereto and thereto;
(xiii) a certificate of the chief financial officer to the effect
that (A) the condition set forth in Section 3.2(b) (Conditions Precedent to
Each Loan and Letter of Credit) has been satisfied and (B) no litigation
not listed on Schedule 4.7 (Litigation) shall have been commenced against
any Loan Party or any of its Subsidiaries that would have a Material
Adverse Effect or impose conditions on the Noteholders' Modified Plan;
(xiv) evidence satisfactory to the Administrative Agent that the
insurance policies required by Section 7.5 (Maintenance of Insurance) and
any Collateral Document are in full force and effect and an insurance
broker's statement that all premiums then due and payable with respect to
such coverage have been paid and confirming, together with, unless
otherwise agreed by the Administrative Agent, endorsements naming the
Administrative Agent, on behalf of the Secured Parties, as an additional
insured or loss payee under all insurance policies to be maintained with
respect to the properties of the Borrower and each other Loan Party; and
(xv) such other certificates, documents, agreements and
information respecting any Loan Party as any Lender through the
Administrative Agent may reasonably request.
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(b) Financial Statements. The Lenders shall have received and be
satisfied with the financial statements described in Section 4.4 (Financial
Statements).
(c) Landlord Waivers and Bailee's Letters. The Administrative Agent
shall have received such Landlord Waivers and Bailee's Letters as the
Administrative Agent shall request in its sole discretion.
(d) Fee and Expenses Paid. There shall have been paid to the
Administrative Agent, for the account of the Administrative Agent and the
Lenders, as applicable, all fees and expenses (including reasonable fees and
expenses of counsel) due and payable on or before the Closing Date (including
all such fees described in the Fee Letter).
(e) Equity Investment; New Senior Notes; Intercreditor Arrangements.
The Lenders shall have received evidence (i) of a cash equity investments in the
Borrower of not less than $50,000,000 in connection with the issuance of the
Series A Preferred Stock and (ii) that not more than $100,000,000 principal
amount of the New Senior Notes shall have been issued in connection with the
Acquisition. The terms and conditions of, the documentation for (and with
respect to such equity, the source for), such equity and debt shall be
satisfactory to all Lenders.
(f) Noteholders' Plan. The Administrative Agent and the Lenders shall
have reviewed and be satisfied with (i) the terms and conditions of the
Noteholders' Modified Plan and (ii) the terms and conditions of all other
material transactions and documentation entered into in connection with the
consummation of the Noteholders' Modified Plan. The Noteholders' Second Plan and
the Acquisition shall have been confirmed or approved by the Bankruptcy Court
pursuant to the Order and the Order shall provide, among other things (A) that
the consideration provided by the Borrower for the Acquisition is reasonably
equivalent value and fair consideration under the Bankruptcy Code and other
applicable law and (B) that the Borrower shall not be liable for any claims
against, interests in, or obligations of, Old WCI or any of its predecessors or
affiliates, and shall have no successor or vicarious liability of any kind with
respect thereto arising prior to or after the consummation of the Acquisition
except as for specific liabilities to be determined (and satisfactory to the
Administrative Agent and the Lenders) and (iii) enjoin the prosecution of same.
The Order shall not be subject to a stay or appeal and, unless otherwise agreed
to by the Administrative Agent, at least 10 days shall have passed since the
entry of the Order. The Noteholders' Second Plan shall have been substantially
consummated or all conditions precedent to the effectiveness of the Noteholders'
Modified Plan shall have been satisfied (or, with the prior written consent of
the Administrative Agent, waived) in the reasonable judgment of the
Administrative Agent. Except as consented to by the Administrative Agent, the
Bankruptcy Court's retention of jurisdiction under the Order shall not govern
the enforcement of the Operative Documents or any rights or remedies related
thereto. The Noteholders' Modified Plan shall be effective and have been
consummated in accordance with applicable law, the Order and the related
documentation.
(g) Related Documents. The Administrative Agent shall be satisfied
that (i) the terms and conditions of the Acquisition shall not have been
amended, waived or modified in any manner without the consent of the
Administrative Agent, (ii) the Acquisition and the Related Documents shall have
been approved by all corporate action of the Borrower and each of the other
parties thereto, shall have been executed and delivered by each such party,
shall be in full force and effect and there shall not have occurred and be
continuing any material breach or default thereunder, (iii) subject only to the
funding of the initial Loans hereunder, all conditions precedent to the
consummation of the Acquisition shall have been satisfied or waived with the
61
consent of the Administrative Agent, (iv) subject only to the funding of the
initial Loans hereunder, the Acquisition shall have been consummated, or shall
be substantially concurrently consummated with the funding of the initial Loans,
in accordance with the Order and all applicable Requirements of Law and all
representations and warranties contained in the Related Documents shall be true
and correct in all material respects on the Closing Date, unless waived with the
consent of the Administrative Agent, and (v) good and marketable title to the
assets purported to be transferred as of the Closing Date by the terms of the
Acquisition and the Related Documents, free and clear of all Liens (other than
Liens permitted pursuant to Section 8.2 (Liens, Etc.)), shall be transferred to
the Borrower concurrently with the making of the initial Loans under this
Agreement.
(h) Consents, Etc. Each of the Borrower and its Subsidiaries shall
have received all consents and authorizations (without conditions not reasonably
acceptable to the Administrative Agent) required pursuant to any material
Contractual Obligation with any other Person and shall have obtained all Permits
of, and effected all notices to and filings with, any Governmental Authority, in
each case, as may be necessary to allow each of the Borrower and its
Subsidiaries lawfully (i) to execute, deliver and perform, in all material
respects, their respective obligations hereunder and under the Loan Documents,
the Related Documents, the Noteholders' Modified Plan and the Acquisition to
which each of them, respectively, is, or shall be, a party and each other
agreement or instrument to be executed and delivered by each of them,
respectively, pursuant thereto or in connection therewith, (ii) to create and
perfect the Liens on the Collateral to be owned by each of them in the manner
and for the purpose contemplated by the Loan Documents and (iii) to consummate
the Acquisition, and all applicable governmental filings shall have been made
and all applicable waiting periods shall have expired without in either case any
action being taken by any competent authority; and no law or regulation shall be
applicable in the judgment of the Administrative Agent that restrains, prevents
or imposes materially adverse conditions upon the Loan Documents, the Related
Documents, the Noteholders' Modified Plan and the Acquisition or the
transactions contemplated thereby.
(i) Field Examination; Initial Appraisals. The Administrative Agent
shall be satisfied in its Customary Discretion with the results of (i) a field
examination of the Borrower and its Subsidiaries conducted by Citicorp's
internal auditors and shall have received appraisals (the "Initial Appraisals")
of all Inventory, Accounts, Real Property and Equipment of the Borrower
prepared, each as of December 2005 and (ii) a takeover field examination no more
than 30 days prior to the Closing Date, each in form and substance satisfactory
to the Administrative Agent.
(j) Adjusted Available Credit. The Borrower shall have, after giving
effect to the consummation of the Noteholders' Second Plan and the making of the
Loans on the Closing Date, Adjusted Available Credit of not less than
$35,000,000.
(k) Senior Management. The Administrative Agent shall be satisfied
with the senior management of the Borrower.
SECTION 3.2 CONDITIONS PRECEDENT TO EACH LOAN AND LETTER OF CREDIT
The obligation of each Revolving Credit Lender on any date (including
the Closing Date) to make any Loan and of each Issuer on any date (including the
Closing Date) to Issue any Letter of Credit is subject to the satisfaction of
each of the following conditions precedent (notwithstanding anything to the
contrary in this Agreement, prior to the CBA Effective
62
Date the following shall not in and of themselves be a condition to the making
of any Loan or the Issuance of any Letter of Credit or the basis for the failure
of any condition precedent set forth in this Section 3.2 (Conditions Precedent
to Each Loan and Letter of Credit): (i) the Borrower shall not have entered into
a new collective bargaining agreement with the United Steel Workers of America,
or (ii) there shall have occurred and be continuing a strike, work stoppage,
slowdown or lockout, or there shall be pending or threatened any unfair labor
practices, grievances, complaints or arbitrations involving the Borrower or any
of its Subsidiaries):
(a) Request for Borrowing or Issuance of Letter of Credit. With
respect to any Loan, the Administrative Agent shall have received a duly
executed Notice of Borrowing (or, in the case of Swing Loans, a duly executed
Swing Loan Request), and, with respect to any Letter of Credit, the
Administrative Agent and the Issuer shall have received a duly executed Letter
of Credit Request.
(b) Representations and Warranties; No Defaults. The following
statements shall be true on the date of such Loan or Issuance, both before and
after giving effect thereto and, in the case of any Loan, to the application of
the proceeds thereof:
(i) the representations and warranties set forth in Article IV
(Representations and Warranties) and in the other Loan Documents shall be
true and correct in all material respects on and as of the Closing Date and
shall be true and correct in all material respects on and as of any such
date after the Closing Date with the same effect as though made on and as
of such date, except to the extent such representations and warranties
expressly relate to an earlier date, in which case such representations and
warranties shall have been true and correct in all material respects as of
such earlier date; and
(ii) no Default or Event of Default shall have occurred and be
continuing.
(c) Borrowing Base. The Borrower shall have delivered the Borrowing
Base Certificate required to be delivered by Section 6.12(a) (Borrowing Base
Determination). After giving effect to the Loans or Letters of Credit requested
to be made or Issued on any such date and the use of proceeds thereof, the
Revolving Credit Outstandings shall not exceed the Maximum Credit at such time.
(d) No Legal Impediments. The making of the Loans or the Issuance of
such Letter of Credit on such date does not violate any Requirement of Law on
the date of or immediately following such Loan or Issuance of such Letter of
Credit and is not enjoined, temporarily, preliminarily or permanently.
(e) Additional Matters. The Administrative Agent shall have received
such additional documents, information and materials as any Lender, through the
Administrative Agent, may reasonably request.
Each submission by the Borrower to the Administrative Agent of a Notice of
Borrowing or a Swing Loan Request and the acceptance by the Borrower of the
proceeds of each Loan requested therein, and each submission by the Borrower to
an Issuer of a Letter of Credit Request, and the Issuance of each Letter of
Credit requested therein, shall be deemed to constitute a representation
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and warranty by the Borrower as to the matters specified in clause (b) above on
the date of the making of such Loan or the Issuance of such Letter of Credit.
SECTION 3.3 DETERMINATIONS OF INITIAL BORROWING CONDITIONS
For purposes of determining compliance with the conditions specified
in Section 3.1 (Conditions Precedent to Initial Loans and Letters of Credit),
each Revolving Credit Lender shall be deemed to have consented to, approved,
accepted or be satisfied with, each document or other matter required thereunder
to be consented to or approved by or acceptable or satisfactory to the Revolving
Credit Lenders unless an officer of the Administrative Agent responsible for the
transactions contemplated by the Loan Documents shall have received notice from
such Revolving Credit Lender prior to the initial Borrowing, borrowing of Swing
Loans or Issuance or deemed Issuance hereunder specifying its objection thereto
and such Revolving Credit Lender shall not have made available to the
Administrative Agent such Revolving Credit Lender's Ratable Portion of such
Borrowing or Swing Loans.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
To induce the Lenders, the Issuers and the Administrative Agent to
enter into this Agreement, the Borrower represents and warrants each of the
following to the Lenders, the Issuers and the Administrative Agent, on and as of
the Closing Date and after giving effect to the Acquisition and the making of
the Loans and the other financial accommodations on the Closing Date and on and
as of each date as required by Section 3.2(b)(i) (Conditions Precedent to Each
Loan and Letter of Credit):
SECTION 4.1 CORPORATE EXISTENCE; COMPLIANCE WITH LAW
Each of the Borrower and each of the Borrower's Subsidiaries, if any,
(a) is duly organized, validly existing and in good standing under the laws of
the jurisdiction of its organization, (b) is duly qualified to do business as a
foreign entity and in good standing under the laws of each jurisdiction where
such qualification is necessary, except where the failure to be so qualified or
in good standing would not, in the aggregate, have a Material Adverse Effect,
(c) has all requisite power and authority and the legal right to own, pledge,
mortgage and operate its properties, to lease the property it operates under
lease and to conduct its business as now or currently proposed to be conducted,
(d) is in compliance with its Constituent Documents, (e) is in compliance with
all applicable Requirements of Law except where the failure to be in compliance
would not, in the aggregate, have a Material Adverse Effect and (f) has all
necessary Permits from or by, has made all necessary filings with, and has given
all necessary notices to, each Governmental Authority having jurisdiction, to
the extent required for such ownership, operation and conduct, except for
Permits or filings that can be obtained or made by the taking of ministerial
action to secure the grant or transfer thereof or the failure to obtain or make
would not, in the aggregate, have a Material Adverse Effect.
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SECTION 4.2 CORPORATE POWER; AUTHORIZATION; ENFORCEABLE OBLIGATIONS
(a) The execution, delivery and performance by each Loan Party of the
Loan Documents to which it is a party and the consummation by it of the
transactions contemplated thereby:
(i) are within such Loan Party's corporate, limited liability
company, partnership or other powers;
(ii) have been or, at the time of delivery thereof pursuant to
Article III (Conditions to Loans and Letters of Credit), will have been
duly authorized by all necessary action, including the consent of
shareholders, partners and members where required;
(iii) do not and will not (A) contravene or violate such Loan
Party's or any of its Subsidiaries' respective Constituent Documents, (B)
violate any other Requirement of Law applicable to such Loan Party
(including Regulations T, U and X of the Federal Reserve Board), or any
order or decree of any Governmental Authority or arbitrator applicable to
such Loan Party, (C) conflict with or result in the breach of, or
constitute a default under, or result in or permit the termination or
acceleration of, any Related Document or any other material Contractual
Obligation of such Loan Party or any of its Subsidiaries or (D) result in
the creation or imposition of any Lien upon any property of such Loan Party
or any of its Subsidiaries, other than those in favor of the Secured
Parties pursuant to the Collateral Documents; and
(iv) do not require the consent of, authorization by, approval
of, notice to, or filing or registration with, any Governmental Authority
or any other Person, other than those listed on Schedule 4.2 (Consents) and
that have been or will be, prior to the Closing Date, obtained or made,
copies of which have been or will be delivered to the Administrative Agent
pursuant to Section 3.1 (Conditions Precedent to Initial Loans and Letters
of Credit), and each of which on the Closing Date will be in full force and
effect and, with respect to the Collateral, and other than filings required
to perfect the Liens created by the Collateral Documents.
(b) This Agreement has been, and each of the other Loan Documents will
be upon delivery thereof pursuant to the terms of this Agreement, duly executed
and delivered by each Loan Party party thereto. This Agreement is, and the other
Loan Documents will be, when delivered hereunder, the legal, valid and binding
obligation of each Loan Party party thereto, enforceable against such Loan Party
in accordance with its terms, subject to applicable laws relating to bankruptcy,
insolvency and creditors and debtors rights and principles of equity (whether in
a court of equity or law).
SECTION 4.3 OWNERSHIP OF BORROWER; SUBSIDIARIES
(a) As of the Closing Date, the authorized capital stock of the
Borrower consists of (i) 35,000,000 shares of common stock, $0.0001 par value
per share, and (ii) 15,000,000 shares of Series A Preferred Stock, $0.0001 par
value per share, of which 5,000,000 shares are issued and outstanding. All of
the outstanding capital stock of the Borrower has been validly issued, is fully
paid and non-assessable. There are no agreements or understandings to
65
which the Borrower is a party with respect to the voting, sale or transfer of
any shares of Stock of the Borrower or any agreement restricting the transfer or
hypothecation of any such shares.
(b) Set forth on Schedule 4.3 (Ownership of Borrower, Subsidiaries) is
a complete and accurate list showing, as of the Closing Date, all Subsidiaries
of the Borrower and, as to each such Subsidiary, the jurisdiction of its
organization, the number of shares of each class of Stock authorized (if
applicable), the number of shares outstanding on the Closing Date and the number
and percentage of the outstanding shares of each such class owned (directly or
indirectly) by the Borrower. No Stock of any Subsidiary of the Borrower is
subject to any outstanding option, warrant, right of conversion or purchase of
any similar right. All of the outstanding Stock of each Subsidiary of the
Borrower owned (directly or indirectly) by the Borrower has been validly issued,
is fully paid and non-assessable (to the extent applicable) and is owned by the
Borrower or a Subsidiary of the Borrower, free and clear of all Liens (other
than the Lien in favor of the Secured Parties created pursuant to the Pledge and
Security Agreement), options, warrants, rights of conversion or purchase or any
similar rights. Neither the Borrower nor any such Subsidiary is a party to, or
has knowledge of, any agreement restricting the transfer or hypothecation of any
Stock of any such Subsidiary, other than the Loan Documents. The Borrower does
not own or hold, directly or indirectly, any Stock of any Person other than such
Subsidiaries and Investments permitted by Section 8.3 (Investments).
SECTION 4.4 FINANCIAL STATEMENTS
(a) The Consolidated balance sheet of the Old WCI and its Subsidiaries
as at October 31, 2005, and the related Consolidated statements of operations
and comprehensive income (loss), shareholder's deficit and comprehensive income
(loss) and cash flows of Old WCI and its Subsidiaries for the fiscal year then
ended, certified by ▇▇▇▇▇ ▇▇▇▇▇▇ and Company LLC, and the Consolidated balance
sheets of the Old WCI and its Subsidiaries as at January 31, 2006, and the
related Consolidated operating statement (P&L), statement of operations and
monthly cash statement of Old WCI and its Subsidiaries for the 3 months then
ended, copies of which have been furnished to each Lender, fairly present
subject, in the case of said balance sheets as at January 31, 2006, and said
operating statement (P&L), statement of operations and monthly cash statement
for the 3 months then ended, to materiality and the absence of footnote
disclosure and normal recurring year-end audit adjustments, the Consolidated
financial condition of the Old WCI and its Subsidiaries as at such dates and the
Consolidated results of the operations of the Old WCI and its Subsidiaries for
the period ended on such dates, all in conformity with GAAP.
(b) Except as set forth on Schedule 4.4 (Financial Statements), as of
the Closing Date, none of the Borrower or any of the Borrower's Subsidiaries had
any material obligation, contingent liability or liability for taxes, long-term
leases or unusual forward or long-term commitment that is not reflected in the
Financial Statements referred to in clause (a) above or in the notes thereto and
not otherwise permitted by this Agreement.
(c) The Projections have been prepared by the Borrower in light of the
past operations of Old WCI's business, and reflect projections for the five year
period beginning on the fiscal year ended October 31, 2006 on a month-by-month
basis for the first year and on a year-by-year basis thereafter. The Projections
are based upon estimates and assumptions stated therein, all of which, in the
aggregate, the Borrower believes to be reasonable in light of current conditions
and current facts known to the Borrower and, as of the Closing Date, reflect the
Borrower's reasonable estimates of the future financial performance of the
Borrower and its Subsidiaries and of the other information projected therein for
the periods set forth therein.
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SECTION 4.5 MATERIAL ADVERSE CHANGE
Since October 31, 2005, there has been no Material Adverse Change and
there have been no events or developments that, in the aggregate, have had a
Material Adverse Effect.
SECTION 4.6 SOLVENCY
Both before and after giving effect to (a) the Loans and Letter of
Credit Obligations to be made or extended on the Closing Date or such other date
as Loans and Letter of Credit Obligations requested hereunder are made or
extended, (b) the disbursement of the proceeds of such Loans pursuant to the
instructions of the Borrower, (c) the Acquisition and the consummation of the
other financing transactions contemplated hereby and (d) the payment and accrual
of all transaction costs in connection with the foregoing, each Loan Party is
Solvent.
SECTION 4.7 LITIGATION
Except as set forth on Schedule 4.7 (Litigation), there are no pending
or, to the knowledge of the Borrower, threatened actions, investigations or
proceedings affecting the Borrower or any of its Subsidiaries before any court,
Governmental Authority or arbitrator other than those that, in the aggregate,
would not have a Material Adverse Effect. The performance of any action by any
Loan Party required or contemplated by any Loan Document or any Related Document
is not restrained or enjoined (either temporarily, preliminarily or
permanently).
SECTION 4.8 TAXES
(a) All federal, state, local and foreign income and franchise and
other material tax returns, reports and statements (collectively, the "Tax
Returns") required to be filed by the Borrower or any of its Tax Affiliates have
been filed with the appropriate Governmental Authorities in all jurisdictions in
which such Tax Returns are required to be filed, all such Tax Returns are true
and correct in all material respects, and all taxes, charges and other
impositions reflected therein or otherwise due and payable in excess of $10,000
have been paid prior to the date on which any fine, penalty, interest, late
charge or loss may be added thereto for non-payment thereof except where
contested in good faith and by appropriate proceedings if adequate reserves
therefor have been established on the books of the Borrower or such Tax
Affiliate in conformity with GAAP. No Tax Return is under audit or examination
by any Governmental Authority and no notice of such an audit or examination or
any assertion of any claim for Taxes has been given or made in writing by any
Governmental Authority. Proper and accurate amounts have been withheld by the
Borrower and each of its Tax Affiliates from their respective employees for all
periods in full and complete compliance with the tax, social security and
unemployment withholding provisions of applicable Requirements of Law and such
withholdings have been timely paid to the respective Governmental Authorities.
(b) None of the Borrower or any of its Tax Affiliates has (i) executed
or filed with the IRS or any other Governmental Authority any agreement or other
document extending, or having the effect of extending, the period for the filing
of any Tax Return or the assessment or collection of any charges, (ii) incurred
any obligation under any tax sharing agreement or arrangement other than those
of which the Administrative Agent has received a copy prior to the date hereof
or (iii) been a member of an affiliated, combined or unitary group other than
the group of which the Borrower (or its Tax Affiliate) is the common parent.
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SECTION 4.9 FULL DISCLOSURE
(a) The information prepared or furnished by or on behalf of the
Borrower in connection with this Agreement or the Related Documents or the
consummation of the transactions contemplated hereunder and thereunder taken as
a whole, including the information contained in the Disclosure Documents, does
not contain any untrue statement of a material fact or omit to state a material
fact necessary to make the statements contained therein or herein, in light of
the circumstances under which they were made, not misleading. All facts known to
the Borrower and material to an understanding of the financial condition,
business, properties or prospects of the Borrower and its Subsidiaries taken as
one enterprise have been disclosed to the Lenders, other than facts generally
known to the Administrative Agent about the steel industry, conditions in the
steel industry and the markets related thereto.
(b) The Borrower has delivered to each Lender a true, complete and
correct copy of each Disclosure Document.
SECTION 4.10 MARGIN REGULATIONS
The Borrower is not engaged in the business of extending credit for
the purpose of purchasing or carrying margin stock (within the meaning of
Regulation U of the Federal Reserve Board), and no proceeds of any Loan will be
used to purchase or carry any such margin stock or to extend credit to others
for the purpose of purchasing or carrying any such margin stock in contravention
of Regulation T, U or X of the Federal Reserve Board.
SECTION 4.11 NO BURDENSOME RESTRICTIONS; NO DEFAULTS
(a) None of the Borrower or any Subsidiary of the Borrower (i) is a
party to any Contractual Obligation the compliance with one or more of which
would have, in the aggregate, a Material Adverse Effect or the performance of
which by any thereof, either unconditionally or upon the happening of an event,
would result in the creation of a Lien (other than a Lien permitted under
Section 8.2 (Liens, Etc.)) on the assets of any thereof or (ii) is subject to
one or more charter or corporate restrictions that would, in the aggregate, have
a Material Adverse Effect.
(b) None of the Borrower or any Subsidiary of the Borrower is in
default under or with respect to any Contractual Obligation owed by it and, to
the knowledge of the Borrower, no other party is in default under or with
respect to any Contractual Obligation owed to any Loan Party or to any
Subsidiary of any Loan Party, other than, in either case, those defaults that,
in the aggregate, would not have a Material Adverse Effect.
(c) No Default or Event of Default has occurred and is continuing.
(d) To the best knowledge of the Borrower, (i) there are no
Requirements of Law (other than Environmental Laws in existence on the Closing
Date) applicable to any Loan Party or any Subsidiary of any Loan Party the
compliance with which by such Loan Party or such Subsidiary, as the case may be,
would, in the aggregate, have a Material Adverse Effect, and (ii) since the
Closing Date there has been no change in the enforcement of Environmental Laws
in existence on the Closing Date which would have a Material Adverse Effect.
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SECTION 4.12 INVESTMENT COMPANY ACT; PUBLIC UTILITY HOLDING COMPANY
ACT
None of the Borrower or any Subsidiary of the Borrower is (a) an
"investment company" or an "affiliated person" of, or "promoter" or "principal
underwriter" for, an "investment company," as such terms are defined in the
Investment Company Act of 1940 or (b) a "holding company" or an "affiliate", a
"holding company" or a "subsidiary company" of a "holding company", as each such
term is defined and used in the Public Utility Holding Company Act of 1935.
SECTION 4.13 USE OF PROCEEDS
The proceeds of the Loans and the Letters of Credit are being used by
the Borrower (and, to the extent distributed to them by the Borrower, each other
Loan Party) solely (a) to finance the Acquisition and for the payment of related
transaction costs, fees and expenses, (b) for the payment of transaction costs,
fees and expenses incurred in connection with this Agreement and the
transactions contemplated hereby and (c) for working capital and general
corporate purposes.
SECTION 4.14 INSURANCE
All policies of insurance of any kind or nature of the Borrower or any
of its Subsidiaries, including policies of life, fire, theft, product liability,
public liability, property damage, other casualty, employee fidelity, workers'
compensation and employee health and welfare insurance, are in full force and
effect and are of a nature and provide such coverage as is sufficient and as is
customarily carried by businesses of the size and character of such Person. None
of the Borrower or any of its Subsidiaries has been refused insurance for any
material coverage for which it had applied or had any policy of insurance
terminated (other than at its request).
SECTION 4.15 LABOR MATTERS
(a) There are no strikes, work stoppages, slowdowns or lockouts
pending or threatened against or involving the Borrower or any of its
Subsidiaries, other than those that, in the aggregate, would not have a Material
Adverse Effect.
(b) There are no unfair labor practices, grievances, complaints or
arbitrations pending, or, to the Borrower's knowledge, threatened, against or
involving the Borrower or any of its Subsidiaries, nor are there any
arbitrations or grievances threatened involving the Borrower or any of its
Subsidiaries, other than those that, in the aggregate, would not have a Material
Adverse Effect.
(c) Except as set forth on Schedule 4.15 (Labor Matters), as of the
Closing Date, there is no collective bargaining agreement covering any employee
of the Borrower or its Subsidiaries.
(d) Schedule 4.15 (Labor Matters) sets forth, as of the date hereof,
all material consulting agreements, executive employment agreements, executive
compensation plans, deferred compensation agreements, employee stock purchase
and stock option plans and severance plans of the Borrower and any of its
Subsidiaries.
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(e) Anything in this Agreement to the contrary notwithstanding, the
representations and warranties set forth in Section 4.15 (a) and (b) (Labor
Matters) shall not be effective until, and shall be deemed to be made in
accordance with clause (b) of Section 3.2 (Conditions Precedent to Each Loan and
Letter of Credit) and as provided in any other Loan Document only on and after,
the CBA Effective Date.
SECTION 4.16 ERISA
(a) Schedule 4.16 (List of Plans) separately identifies as of the date
hereof all Title IV Plans, all Multiemployer Plans and all of the employee
benefit plans within the meaning of Section 3(3) of ERISA to which the Borrower
or any of the Borrower's Subsidiaries has any obligation or liability,
contingent or otherwise.
(b) Each employee benefit plan of the Borrower or any of the
Borrower's Subsidiaries intended to qualify under Section 401 of the Code does
so qualify, and any trust created thereunder is exempt from tax under the
provisions of Section 501 of the Code, except where such failures, in the
aggregate, would not have a Material Adverse Effect.
(c) Each Title IV Plan is in compliance in all material respects with
applicable provisions of ERISA, the Code and other Requirements of Law except
for non-compliances that, in the aggregate, would not have a Material Adverse
Effect.
(d) There has been no, nor is there reasonably expected to occur, any
ERISA Event other than those that, in the aggregate, would not have a Material
Adverse Effect.
(e) Except to the extent set forth on Schedule 4.16 (List of Plans),
none of the Borrower, any of the Borrower's Subsidiaries or any ERISA Affiliate
would have any Withdrawal Liability as a result of a complete withdrawal as of
the date hereof from any Multiemployer Plan.
SECTION 4.17 ENVIRONMENTAL MATTERS
(a) Except as disclosed on Schedule 4.17 (Environmental Matters), the
operations of the Borrower and each of its Subsidiaries have been and are in
compliance with all Environmental Laws, including obtaining and complying with
all required environmental, health and safety Permits, other than
non-compliances that, in the aggregate, would not have a reasonable likelihood
of the Borrower and its Subsidiaries incurring Environmental Liabilities and
Costs after the date hereof whose Dollar Equivalent would exceed $2,500,000.
(b) Except as disclosed on Schedule 4.17 (Environmental Matters), none
of the Borrower or any of its Subsidiaries or any Real Property currently or, to
the knowledge of the Borrower, previously owned, operated or leased by or for
the Borrower or any of its Subsidiaries is subject to any pending or, to the
knowledge of the Borrower, threatened, claim, order, agreement, notice of
violation, notice of potential liability or is the subject of any pending or
threatened proceeding or governmental investigation under or pursuant to
Environmental Laws other than those that, in the aggregate, are not reasonably
likely to result in the Borrower and its Subsidiaries incurring Environmental
Liabilities and Costs whose Dollar Equivalent would exceed $2,500,000.
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(c) Except as disclosed on Schedule 4.17 (Environmental Matters), none
of the Borrower or any of its Subsidiaries is a treatment, storage or disposal
facility requiring a Permit under the Resource Conservation and Recovery Act, 42
U.S.C. Section 6901 et seq., the regulations thereunder or any state analog.
(d) There are no facts, circumstances or conditions arising out of or
relating to the operations or ownership of the Borrower or of Real Property
owned, operated or leased by the Borrower or any of its Subsidiaries that are
not specifically included in the financial information furnished to the Lenders
other than those that, in the aggregate, would not have a reasonable likelihood
of the Borrower and its Subsidiaries incurring Environmental Liabilities and
Costs in excess of $2,500,000.
(e) As of the date hereof, no Environmental Lien has attached to any
property of the Borrower or any of its Subsidiaries and, to the knowledge of the
Borrower, no facts, circumstances or conditions exist that could reasonably be
expected to result in any such Lien attaching to any such property.
(f) The Borrower and each of its Subsidiaries has provided the Lenders
with copies of all material environmental, health or safety audits, studies,
assessments, inspections, investigations or other environmental health and
safety reports relating to the operations of the Borrower or any of its
Subsidiaries or any Real Property of any of them that are in the possession,
custody or control of the Borrower or any of its Subsidiaries and relate to the
five year period ending on the Closing Date.
SECTION 4.18 INTELLECTUAL PROPERTY
The Borrower and its Subsidiaries own or license or otherwise have the
right to use all material licenses, permits, patents, patent applications,
trademarks, trademark applications, service marks, trade names, copyrights,
copyright applications, Internet domain names, franchises, authorizations and
other intellectual property rights (including all Intellectual Property as
defined in the Pledge and Security Agreement) that are necessary for the
operations of their respective businesses, without infringement upon or conflict
with the rights of any other Person with respect thereto, including all trade
names associated with any private label brands of the Borrower or any of its
Subsidiaries. No license, permit, patent, patent application, trademark,
trademark application, service ▇▇▇▇, trade name, copyright, copyright
application, Internet domain name, franchise, authorization, other intellectual
property right (including all "Intellectual Property" as defined in the Pledge
and Security Agreement), slogan or other advertising device, product, process,
method, substance, part or component, or other material now employed, or now
intended to be employed, by the Borrower or any of its Subsidiaries infringes
upon or conflicts with any rights owned by any other Person, and no claim or
litigation regarding any of the foregoing is pending or threatened in writing,
except as would not reasonably be expected have a Material Adverse Effect.
SECTION 4.19 TITLE; REAL PROPERTY
(a) Each of the Borrower and its Subsidiaries has good and marketable
title to, or valid leasehold interests in, all Real Property and good title to
all personal property, in each case that is purported to be owned or leased by
it, including those reflected on the most recent Financial Statements delivered
by the Borrower, and none of such properties and assets is subject to any Lien,
except Liens permitted under Section 8.2 (Liens, Etc.). The Borrower and its
71
Subsidiaries have received all deeds, assignments, waivers, consents,
non-disturbance and recognition or similar agreements, bills of sale and other
documents in respect of, and have duly effected all recordings, filings and
other actions necessary to establish, protect and perfect, the Borrower's and
its Subsidiaries' right, title and interest in and to all such property, except
in the case of Collateral with respect to which the Administrative Agent has a
junior priority Lien in accordance with the Pledge and Security Agreement and
the Mortgages where the failure to do so would not have a Material Adverse
Effect.
(b) Set forth on Schedule 4.19 (Real Property) is a complete and
accurate list of all Real Property of each Loan Party and its Subsidiaries and
showing, as of the Closing Date, the current street address (including, where
applicable, county, state and other relevant jurisdictions), record owner and,
where applicable, lessee thereof.
(c) No Loan Party nor any of its Subsidiaries owns or holds, or is
obligated under or a party to, any lease, option, right of first refusal or
other contractual right to purchase, acquire, sell, assign, dispose of or lease
(as lessor) any Real Property of such Loan Party or any of its Subsidiaries.
(d) No portion of any Real Property of any Loan Party or any of its
Subsidiaries has suffered any material damage by fire or other casualty loss
that has not heretofore been completely repaired and restored to its original
condition. No portion of any Real Property of any Loan Party or any of its
Subsidiaries is located in a special flood hazard area as designated by any
federal Governmental Authority.
(e) All Permits required to have been issued or appropriate to enable
all Real Property of the Borrower or any of its Subsidiaries to be lawfully
occupied and used for all of the purposes for which they are currently occupied
and used have been lawfully issued and are in full force and effect, other than
those that, in the aggregate, would not have a Material Adverse Effect.
(f) None of the Borrower or any of its Subsidiaries has received any
notice, or has any knowledge, of any pending, threatened or contemplated
condemnation proceeding affecting any Real Property of the Borrower or any of
its Subsidiaries or any part thereof, except those that, in the aggregate, would
not have a Material Adverse Effect.
SECTION 4.20 RELATED DOCUMENTS
(a) The execution, delivery and performance by each Loan Party of the
Related Documents to which it is a party and the consummation of the
transactions contemplated thereby by such Loan Party:
(i) are within such Loan Party's respective corporate, limited
liability company, partnership or other powers;
(ii) have been duly authorized by all necessary corporate or
other action, including the consent of stockholders where required;
(iii) do not and will not (A) contravene or violate any Loan
Party's or any of its Subsidiaries' respective Constituent Documents, (B)
violate any other Requirement of Law applicable to any Loan Party or any
order or decree of any
72
Governmental Authority or arbitrator, (C) conflict with or result in the
breach of, constitute a default under, or result in or permit the
termination or acceleration of, any Contractual Obligation of any Loan
Party or any of its Subsidiaries, except for those that, in the aggregate,
would not have a Material Adverse Effect or (D) result in the creation or
imposition of any Lien upon any property of any Loan Party or any of its
Subsidiaries other than a Lien permitted under Section 8.2 (Liens, Etc.);
and
(iv) do not require the consent of, authorization by, approval
of, notice to, or filing or registration with, any Governmental Authority
or any other Person, other than those that (A) will have been obtained at
the Closing Date, each of which will be in full force and effect on the
Closing Date, none of which will on the Closing Date impose materially
adverse conditions upon the exercise of control by the Borrower over any of
its Subsidiaries and (B) in the aggregate, if not obtained, would not have
a Material Adverse Effect.
(b) Each of the Related Documents has been or at the Closing Date will
have been duly executed and delivered by each Loan Party party thereto and at
the Closing Date will be the legal, valid and binding obligation of each Loan
Party party thereto, enforceable against such Loan Party in accordance with its
terms.
(c) None of the Related Documents has been amended or modified in any
respect and no provision therein has been waived, except in each case to the
extent permitted by Section 8.12 (Modification of Related Documents), and each
of the representations and warranties therein is true and correct in all
material respects or waived with the consent of the Administrative Agent and no
default or event that, with the giving of notice or lapse of time or both, would
be a default has occurred thereunder.
ARTICLE V
FINANCIAL COVENANTS
The Borrower agrees with the Lenders, the Issuers and the
Administrative Agent to each of the following as long as any Obligation or any
Revolving Credit Commitment remains outstanding and, in each case, unless the
Requisite Lenders otherwise consent in writing:
SECTION 5.1 MINIMUM FIXED CHARGE COVERAGE RATIO
During any Liquidity Event Period, the Borrower shall have maintained
a Fixed Charge Coverage Ratio, as determined as of the last day of the preceding
Fiscal Quarter for which financial statements have been delivered, for the four
Fiscal Quarters ending on such day, of at least 1.0 to 1.0.
SECTION 5.2 ADJUSTED AVAILABLE CREDIT
The Borrower shall maintain on each day during the term of this
Agreement Adjusted Available Credit of not less than $25,000,000, prior to the
CBA Effective Date, and $15,000,000 thereafter.
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SECTION 5.3 CAPITAL EXPENDITURES
The Borrower shall not make or incur, or permit to be made or
incurred, Capital Expenditures during each of the Fiscal Years set forth below
to be, in the aggregate, in excess of the maximum amount set forth below for
such Fiscal Year:
FISCAL MAXIMUM CAPITAL
YEAR EXPENDITURES
------ ---------------
2006 $40,000,000
2007 $70,000,000
2008 $25,000,000
2009 $30,000,000
2010 $30,000,000
2011 $30,000,000
provided, however, that to the extent that such actual Capital Expenditures for
any such Fiscal Year shall be less than the maximum amount set forth above for
such Fiscal Year (without giving effect to the carryover from the immediately
preceding year permitted by this proviso), 75% of the difference between said
stated maximum amount and such actual Capital Expenditures shall, in addition,
be available for Capital Expenditures in the next succeeding Fiscal Year.
ARTICLE VI
REPORTING COVENANTS
The Borrower agrees with the Lenders, the Issuers and the
Administrative Agent to each of the following, as long as any Obligation or any
Revolving Credit Commitment remains outstanding and, in each case, unless the
Requisite Lenders otherwise consent in writing:
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SECTION 6.1 FINANCIAL STATEMENTS
The Borrower shall furnish to the Administrative Agent (with
sufficient copies for each of the Lenders) each of the following:
(a) Monthly Reports. Within 45 days after the end of each fiscal month
in the Fiscal Year ending December 31, 2006 and within 30 days after the end of
each fiscal month in each Fiscal Year thereafter, financial information
regarding the Borrower and its Subsidiaries consisting of Consolidated unaudited
balance sheets as of the close of such month and the related statements of
income and cash flow for such month and that portion of the current Fiscal Year
ending as of the close of such month, setting forth in comparative form the
figures for the corresponding periods in the prior year (which, in the case of
any such corresponding periods that are prior to the date of the Acquisition,
shall be the figures of Old WCI) and the figures contained in the Projections
or, if applicable, the latest business plan provided pursuant to clause (f)
below for the current Fiscal Year, in each case certified by a Responsible
Officer of the Borrower as fairly presenting, in all material respects, the
Consolidated financial position of the Borrower and its Subsidiaries as at the
dates indicated and the results of their operations and cash flow for the
periods indicated in accordance with GAAP (subject to the absence of footnote
disclosure and normal year-end audit adjustments).
(b) Quarterly Reports. Within 60 days after the end of each Fiscal
Quarter of the Fiscal Year ending December 31, 2006 and within 45 days after the
end of each Fiscal Quarter of each Fiscal Year thereafter, financial information
regarding the Borrower and its Subsidiaries consisting of Consolidated unaudited
balance sheets as of the close of such quarter and the related statements of
income and cash flow for such quarter and that portion of the Fiscal Year ending
as of the close of such quarter, setting forth in comparative form the figures
for the corresponding periods in the prior year (which, in the case of any such
corresponding periods that are prior to the date of the Acquisition, shall be
the figures of Old WCI) and the figures contained in the Projections or, if
applicable, the latest business plan provided pursuant to clause (f) below for
the current Fiscal Year, in each case certified by a Responsible Officer of the
Borrower as fairly presenting, in all material respects, the Consolidated
financial position of the Borrower and its Subsidiaries as at the dates
indicated and the results of their operations and cash flow for the period
indicated in accordance with GAAP (subject to the absence of footnote disclosure
and normal year-end audit adjustments).
(c) Annual Reports. Within 120 days after the end of the Fiscal Year
ending December 31, 2006 and 90 days after the end of each Fiscal Year
thereafter, financial information regarding the Borrower and its Subsidiaries
consisting of Consolidated and consolidating balance sheets of the Borrower and
its Subsidiaries as of the end of such year and related statements of income and
cash flows of the Borrower and its Subsidiaries for such Fiscal Year, all
prepared in conformity with GAAP and certified, in the case of such Consolidated
Financial Statements, without qualification as to the scope of the audit or as
to the Borrower being a going concern by the Borrower's Accountants, together
with the report of such accounting firm stating that (i) such Financial
Statements fairly present the Consolidated financial position of the Borrower
and its Subsidiaries as at the dates indicated and the results of their
operations and cash flow for the periods indicated in conformity with GAAP and,
in the case of years ending after December 31, 2006, on a basis consistent with
prior years (except for changes with which the Borrower's Accountants shall
concur and that shall have been disclosed in the notes to the Financial
Statements) and (ii) the examination by the Borrower's Accountants in connection
with such Consolidated Financial Statements has been made in accordance with
generally accepted auditing
75
standards, and accompanied by a certificate stating that in the course of the
regular audit of the business of the Borrower and its Subsidiaries such
accounting firm has obtained no knowledge that a Default or Event of Default has
occurred and is continuing, or, if in the opinion of such accounting firm, a
Default or Event of Default has occurred and is continuing, a statement as to
the nature thereof.
(d) Compliance Certificate. Together with each delivery of any
Financial Statement pursuant to clause (b) or (c) above, a certificate of a
Responsible Officer of the Borrower (each, a "Compliance Certificate") (i)
showing in reasonable detail the calculations used in demonstrating compliance
with each of the financial covenants contained in Article V (Financial
Covenants) that is tested on a quarterly basis and (ii) stating that no Default
or Event of Default has occurred and is continuing or, if a Default or an Event
of Default has occurred and is continuing, stating the nature thereof and the
action that the Borrower proposes to take with respect thereto.
(e) Corporate Chart and Other Collateral Updates. Together with each
delivery of any Financial Statement pursuant to clause (b) or (c) above, (i) a
certificate of a Responsible Officer of the Borrower certifying that the
Corporate Chart attached thereto (or the last Corporate Chart delivered pursuant
to this clause (e)) is true, correct, complete and current as of the date of
such Financial Statement and (ii) a certificate of a Responsible Officer of the
Borrower in form and substance reasonably satisfactory to the Administrative
Agent that all certificates, statements, updates and other documents (including
updated schedules) required to be delivered pursuant to the Pledge and Security
Agreement by any Loan Party in the preceding Fiscal Quarter have been delivered
thereunder (or such delivery requirement was otherwise duly waived or extended).
The reporting requirements set forth in this clause (e) are in addition to, and
are not intended to and shall not replace or otherwise modify, any obligation of
any Loan Party under any Loan Document (including other notice or reporting
requirements). Compliance with the reporting obligations in this clause (e)
shall only provide notice to the Administrative Agent and shall not, by itself,
modify any obligation of any Loan Party under any Loan Document or cure, or
otherwise modify in any way, any failure to comply with any covenant, or any
breach of any representation or warranty, contained in any Loan Document or any
other Default or Event of Default.
(f) Business Plan. Not later than 30 days after the end of each Fiscal
Year (or sooner, if available), and containing substantially the types of
financial information contained in the Projections, (i) the annual business plan
of the Borrower and its Subsidiaries for the next succeeding Fiscal Year
approved by the Board of Directors of the Borrower, (ii) forecasts prepared by
management of the Borrower for each fiscal month in the next succeeding Fiscal
Year and (iii) forecasts prepared by management of the Borrower for each of the
succeeding Fiscal Years through the Fiscal Year in which the Revolving Credit
Termination Date is scheduled to occur, including, in each instance described in
subclauses (ii) and (iii) above, (x) a projected year-end Consolidated balance
sheet and income statement and statement of cash flows and (y) a statement of
all of the material assumptions on which such forecasts are based.
(g) Management Letters, Etc. Within five Business Days after receipt
thereof by any Loan Party, copies of each management letter, exception report or
similar letter or report received by such Loan Party from the Borrower's
Accountants.
(h) Intercompany Loan Balances. Together with each delivery of any
Financial Statement pursuant to clause (a) above, a summary of the outstanding
balance of all
76
intercompany Indebtedness as of the last day of the fiscal month covered by such
Financial Statement, certified by a Responsible Officer of the Borrower.
SECTION 6.2 DEFAULT NOTICES
As soon as practicable, and in any event within five Business Days
after a Responsible Officer of any Loan Party has actual knowledge of the
existence of any Default, Event of Default or other event having had a Material
Adverse Effect or having any reasonable likelihood of causing or resulting in a
Material Adverse Change, the Borrower shall give the Administrative Agent notice
specifying the nature of such Default or Event of Default or other event,
including the anticipated effect thereof, which notice, if given by telephone,
shall be promptly confirmed in writing on the next Business Day.
SECTION 6.3 LITIGATION
Promptly after the commencement thereof, the Borrower shall give the
Administrative Agent written notice of the commencement of all actions, suits
and proceedings before any domestic or foreign Governmental Authority or
arbitrator affecting the Borrower or any of Subsidiary of the Borrower that (i)
seeks injunctive or similar relief or (ii) in the reasonable judgment of the
Borrower, expose the Borrower or such Subsidiary to liability in an amount
aggregating $1,000,000 or more or that would reasonably be expected to have a
Material Adverse Effect. In addition, the Borrower shall provide on the first
Business Day of each calendar quarter a report in form and detail reasonably
satisfactory to the Administrative Agent setting forth all pending actions,
suits and proceedings before any domestic or foreign Governmental Authority or
arbitrator to which the Borrower or any Subsidiary of the Borrower is a party.
SECTION 6.4 ASSET SALES
Prior to any Asset Sale whose Net Cash Proceeds (or the Dollar
Equivalent thereof) are anticipated to exceed $5,000,000, the Borrower shall
send the Administrative Agent a notice (a) describing such Asset Sale or the
nature and material terms and conditions of such transaction and (b) stating the
estimated Net Cash Proceeds anticipated to be received by the Borrower or any of
its Subsidiaries.
SECTION 6.5 NOTICES UNDER RELATED DOCUMENTS
Promptly after the sending or filing thereof, the Borrower shall send
the Administrative Agent copies of all material notices, certificates or reports
delivered pursuant to, or in connection with, any Related Document.
SECTION 6.6 SEC FILINGS; PRESS RELEASES
Promptly after the sending or filing thereof, the Borrower shall send
the Administrative Agent copies of (a) all reports that the Borrower sends to
the Indenture Trustee, (b) all reports that the Borrower sends to its security
holders generally after the Borrower becomes a reporting company, (c) all
reports and registration statements that the Borrower or any of its Subsidiaries
files with the Securities and Exchange Commission or any national or foreign
securities exchange or the National Association of Securities Dealers, Inc., (d)
all press releases
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and (e) all other statements concerning material changes or developments in the
business of such Loan Party made available by any Loan Party to the public or
any other creditor.
SECTION 6.7 LABOR RELATIONS
Promptly after becoming aware of the same, the Borrower shall give the
Administrative Agent written notice of (a) any material labor dispute to which
the Borrower or any of its Subsidiaries is or may become a party, including any
strikes, lockouts or other disputes relating to any of such Person's plants and
other facilities, and (b) any Worker Adjustment and Retraining Notification Act
or related liability incurred with respect to the closing of any plant or other
facility of any such Person.
SECTION 6.8 TAX RETURNS
Upon the request of any Lender, through the Administrative Agent, the
Borrower shall provide copies of all federal, state, local and foreign, if any,
tax returns and reports filed by the Borrower or any Subsidiary of the Borrower
in respect of taxes measured by income (excluding sales, use and like taxes).
SECTION 6.9 INSURANCE
As soon as is practicable and in any event within 90 days after the
end of each Fiscal Year, the Borrower shall furnish the Administrative Agent (in
sufficient copies for each of the Lenders) with (a) a report in form and
substance reasonably satisfactory to the Administrative Agent and the Lenders
outlining all material insurance coverage maintained as of the date of such
report by the Borrower or any Subsidiary of the Borrower and the duration of
such coverage and (b) an insurance broker's statement or a certificate of the
Borrower that all premiums then due and payable with respect to such coverage
have been paid and confirming, with respect to any insurance maintained by the
Borrower or any other Loan Party, that the Administrative Agent has been named
as loss payee or additional insured, as applicable.
SECTION 6.10 ERISA MATTERS
The Borrower shall furnish the Administrative Agent (with sufficient
copies for each of the Lenders) each of the following:
(a) promptly and in any event within 30 days after the Borrower, any
Subsidiary of the Borrower or any ERISA Affiliate knows that any ERISA Event has
occurred, written notice describing such event;
(b) promptly and in any event within 10 days after the Borrower, any
Subsidiary of the Borrower or any ERISA Affiliate knows that a request for a
minimum funding waiver under Section 412 of the Code has been filed with respect
to any Title IV Plan or Multiemployer Plan, a written statement of a Responsible
Officer of the Borrower describing such ERISA Event or waiver request and the
action, if any, the Borrower, its Subsidiaries and ERISA Affiliates propose to
take with respect thereto and a copy of any notice filed with the PBGC or the
IRS pertaining thereto; and
(c) simultaneously with the date that the Borrower, any Subsidiary of
the Borrower or any ERISA Affiliate files a notice of intent to terminate any
Title IV Plan, if such
78
termination would require material additional contributions in order to be
considered a standard termination within the meaning of Section 4041(b) of
ERISA, a copy of each notice.
SECTION 6.11 ENVIRONMENTAL MATTERS
The Borrower shall provide the Administrative Agent promptly and in
any event within 10 days after the Borrower or any Subsidiary of the Borrower
learning of any of the following, written notice of each of the following:
(a) that any Loan Party is or may be liable to any Person as a result
of a Release or threatened Release that could reasonably be expected to subject
such Loan Party to Environmental Liabilities and Costs whose Dollar Equivalent
shall exceed $500,000;
(b) the receipt by any Loan Party of notification that any real or
personal property of such Loan Party is or is reasonably likely to be subject to
any Environmental Lien;
(c) the receipt by any Loan Party of any notice of violation of or
potential liability under, or knowledge by such Loan Party that there exists a
condition that could reasonably be expected to result in a violation of or
liability under, any Environmental Law, except for violations and liabilities
the consequence of which, in the aggregate, would not be reasonably likely to
subject the Loan Parties collectively to Environmental Liabilities and Costs
whose Dollar Equivalent shall exceed $500,000;
(d) the commencement of any judicial or administrative proceeding or
investigation alleging a violation of or liability under any Environmental Law,
that, in the aggregate, if adversely determined, would have a reasonable
likelihood of subjecting the Loan Parties collectively to Environmental
Liabilities and Costs whose Dollar Equivalent shall exceed $500,000;
(e) any proposed acquisition of stock, assets or real estate, any
proposed leasing of property or any other action by any Loan Party or any of its
Subsidiaries other than those the consequences of which, in the aggregate, have
reasonable likelihood of subjecting the Loan Parties collectively to
Environmental Liabilities and Costs whose Dollar Equivalent shall exceed
$500,000;
(f) any proposed action by any Loan Party or any of its Subsidiaries
or any proposed change in Environmental Laws that, in the aggregate, have a
reasonable likelihood of requiring the Loan Parties to obtain additional
environmental, health or safety Permits or make additional capital improvements
to obtain compliance with Environmental Laws that, in the aggregate, would have
cost $500,000 or more or that shall subject the Loan Parties to additional
Environmental Liabilities and Costs whose Dollar Equivalent shall exceed
$500,000; and
(g) upon written request by any Lender through the Administrative
Agent, a report providing an update of the status of any environmental, health
or safety compliance, hazard or liability issue identified in any notice or
report delivered pursuant to this Agreement.
SECTION 6.12 BORROWING BASE DETERMINATION
(a) The Borrower shall deliver to the Administrative Agent for
delivery to the Lenders, as soon as available and in any event not later than
three Business Days after the
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Friday of each calendar week, a Borrowing Base Certificate as of such Friday
executed by a Responsible Officer of the Borrower.
(b) The Borrower shall conduct, or shall cause to be conducted, at its
expense and upon request of the Administrative Agent, and present to the
Administrative Agent for approval, such appraisals, investigations and reviews
as the Administrative Agent shall request for the purpose of determining the
Borrowing Base, all upon notice and at such times during normal business hours
and as often as may be reasonably requested; provided that the so long as no
Default or Event of Default or Liquidity Event Period has occurred and is
continuing, the Administrative Agent shall not conduct more than four appraisals
in any calendar year. The Borrower shall furnish to the Administrative Agent any
information that the Administrative Agent may reasonably request regarding the
determination and calculation of the Borrowing Base including correct and
complete copies of any invoices, underlying agreements, instruments or other
documents and the identity of all Account Debtors in respect of Accounts
referred to therein, including, without limiation, the following:
(i) as soon as available but in any event within 15 days of the
end of each calendar month and at such other times as may be requested by
the Administrative Agent, as of the period then ended, all delivered
electronically in a text formatted file acceptable to the Administrative
Agent:
(A) a detailed aging of the Borrower's Accounts (1)
including all invoices aged by due date (with an explanation of the
terms offered) and (2) reconciled to the Borrowing Base Certificate
delivered as of such date prepared in a manner reasonably acceptable
to the Administrative Agent, together with a summary specifying the
name, address, and balance due for each Account Debtor;
(B) a schedule detailing the Borrower's Inventory, in form
satisfactory to the Administrative Agent, (1) by location (showing
Inventory in transit, any Inventory located with a third party under
any consignment, bailee arrangement, or warehouse agreement), by class
(raw material, work-in-process and finished goods), by product type,
and by volume on hand, which Inventory shall be valued at the lower of
cost (determined on a first-in, first-out basis) or market and
adjusted for Reserves as the Administrative Agent has previously
indicated to the Borrower are deemed by the Administrative Agent to be
appropriate, (2) including a report of any variances or other results
of Inventory counts performed by the Borrower since the last Inventory
schedule (including information regarding sales or other reductions,
additions, returns, credits issued by Borrower and complaints and
claims made against the Borrower), and (3) reconciled to the Borrowing
Base Certificate delivered as of such date;
(C) a worksheet of calculations prepared by the Borrower to
determine Eligible Accounts and Eligible Inventory, such worksheets
detailing the Accounts and Inventory excluded from Eligible Accounts
and Eligible Inventory and the reason for such exclusion;
(D) a reconciliation of the Borrower's Accounts and
Inventory between the amounts shown in the Borrower's general ledger
and
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financial statements and the reports delivered pursuant to clauses (i)
and (ii) above; and
(E) a reconciliation of the loan balance per the Borrower's
general ledger to the loan balance under this Agreement;
(ii) as soon as available but in any event within 15 days of the
end of each calendar month and at such other times as may be requested by
the Administrative Agent, as of the month then ended, a schedule and aging
of the Borrower's accounts payable, delivered electronically in a text
formatted file acceptable to the Administrative Agent;
(iii) as soon as available but in any event within 15 days of the
end of each calendar quarter, as of the quarter then ended, and at such
other times as may be requested by the Administrative Agent, a list of all
customer addresses, delivered electronically in a text formatted file
acceptable to the Administrative Agent;
(iv) promptly upon the Administrative Agent's request:
(A) copies of invoices in connection with the invoices
issued by the Borrower in connection with any Accounts, credit memos,
shipping and delivery documents, and other information related
thereto;
(B) copies of purchase orders, invoices, and shipping and
delivery documents in connection with any Inventory or Equipment
purchased by any Loan Party; and
(C) a schedule detailing the balance of all intercompany
accounts of the Loan Parties;
(c) The Borrower shall promptly notify the Administrative Agent in
writing in the event that at any time the Borrower knows that (i) the Borrowing
Base is less than 90% of the Borrowing Base reflected in the most recent
Borrowing Base Certificate delivered pursuant to clause (a) above or (ii) the
outstanding Revolving Credit Outstandings exceed the Borrowing Base as a result
of a decrease therein, in which case such notice shall also include the amount
of such excess.
(d) The Administrative Agent may, at the Borrower's sole cost and
expense, make test verifications of the Accounts and physical verifications of
the Inventory in any manner and through any medium that the Administrative Agent
considers advisable in its Customary Discretion, and the Borrower shall furnish
all such assistance and information as the Administrative Agent may require in
its Customary Discretion in connection therewith. At any time and from time to
time, upon the Administrative Agent's request and at the expense of the
Borrower, the Borrower shall cause independent public accountants or others
satisfactory to the Administrative Agent in its Customary Discretion to furnish
to the Administrative Agent reports showing reconciliations, aging and test
verifications of, and trial balances for, the Accounts; provided, however, that
unless a Default or Event of Default shall be continuing, the Administrative
Agent shall request no more than four such reports during any calendar year.
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SECTION 6.13 CONTRACTUAL OBLIGATIONS
Promptly after any Loan Party knows of the same, the Borrower shall
give the Administrative Agent written notice of any cancellation, termination or
loss of any material Contractual Obligation or other customer arrangement which
would have a Material Adverse Effect.
SECTION 6.14 TAX REPORTING
If the Borrower determines that any of the Loans, Letters of Credit or
related transactions contemplated hereby constitutes a "reportable transaction"
within the meaning of Treasury Regulation Section 1.6011-4, the Borrower shall
give the Administrative Agent written notice thereof and shall deliver to the
Administrative Agent all IRS forms required in connection therewith.
SECTION 6.15 OTHER INFORMATION
The Borrower shall provide the Administrative Agent or any Lender with
such other information respecting the business, properties, condition, financial
or otherwise, or operations of the Borrower or any Subsidiary of the Borrower as
the Administrative Agent or such Lender through the Administrative Agent may
from time to time reasonably request.
ARTICLE VII
AFFIRMATIVE COVENANTS
The Borrower agrees with the Lenders, the Issuers and the
Administrative Agent to each of the following, as long as any Obligation or any
Revolving Credit Commitment remains outstanding and, in each case, unless the
Requisite Lenders otherwise consent in writing:
SECTION 7.1 PRESERVATION OF CORPORATE EXISTENCE, ETC.
The Borrower shall, and shall cause each Subsidiary of the Borrower
to, preserve and maintain its legal existence, rights (charter and statutory)
and franchises, except as permitted by Sections 8.4 (Sale of Assets) and 8.7
(Restriction on Fundamental Changes).
SECTION 7.2 COMPLIANCE WITH LAWS, ETC.
The Borrower shall, and shall cause each Subsidiary of the Borrower
to, comply with all applicable Requirements of Law, Contractual Obligations and
Permits, except where the failure so to comply would not, in the aggregate, have
a Material Adverse Effect.
SECTION 7.3 CONDUCT OF BUSINESS
The Borrower shall and the Borrower shall cause each Subsidiary of the
Borrower to, (a) conduct its business in the ordinary course and (b) use its
reasonable efforts, in the ordinary course of business substantially as
conducted immediately prior to the date hereof or approved by the Administrative
Agent, to preserve its business and the goodwill and business of the customers,
advertisers, suppliers and others having business relations with the Borrower or
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any of its Subsidiaries, except in each case where the failure to comply with
the covenants in each of clauses (a) and (b) above would not, in the aggregate,
have a Material Adverse Effect.
SECTION 7.4 PAYMENT OF TAXES, ETC.
The Borrower shall, and shall cause each Subsidiary of the Borrower
to, pay and discharge before the same shall become delinquent, all lawful
material governmental claims, taxes, assessments, charges and levies, except
where contested in good faith, by proper proceedings and adequate reserves
therefor have been established on the books of the Borrower or the appropriate
Subsidiary in conformity with GAAP.
SECTION 7.5 MAINTENANCE OF INSURANCE
The Borrower shall (a) maintain for itself, and the Borrower shall
cause to be maintained for each Subsidiary of the Borrower, insurance with
responsible and reputable insurance companies or associations in such amounts
and covering such risks as is usually carried by companies engaged in similar
businesses and owning similar properties in the same general areas in which the
Borrower or such Subsidiary operates, and such other insurance as may be
reasonably requested by the Requisite Lenders, and, in any event, all insurance
required by any Collateral Documents and (b) cause all such insurance to name
the Administrative Agent on behalf of the Secured Parties as additional insured
or loss payee, as appropriate, and to provide that no cancellation, material
addition in amount or material change in coverage shall be effective until after
30 days' written notice thereof to the Administrative Agent.
SECTION 7.6 ACCESS
The Borrower shall, and shall cause each Subsidiary of the Borrower
to, from time to time permit the Administrative Agent and the Lenders, or any
agents or representatives thereof, within two Business Days after written
notification of the same (except that during the continuance of an Event of
Default, no such notice shall be required) to (a) examine and make copies of and
abstracts from the records and books of account of the Borrower and each
Subsidiary of the Borrower, (b) visit the properties of the Borrower and each
Subsidiary of the Borrower, (c) discuss the affairs, finances and accounts of
the Borrower and each Subsidiary of the Borrower with any of their respective
officers or directors and (d) communicate directly with any of its certified
public accountants (including the Borrower's Accountants). The Borrower shall
authorize its certified public accountants (including the Borrower's
Accountants), and shall cause each of its Subsidiaries to authorize the
certified public accountants of such Subsidiary to disclose to the
Administrative Agent or any Lender any and all financial statements and other
information of any kind, as the Administrative Agent or any Lender reasonably
requests and that such accountants may have with respect to the business,
financial condition, results of operations or other affairs of the Borrower or
any Subsidiary of the Borrower.
SECTION 7.7 KEEPING OF BOOKS
The Borrower shall, and shall cause each Subsidiary of the Borrower
to, keep proper books of record and account, in which full and correct entries
shall be made in conformity with GAAP, of all financial transactions and the
assets and business of the Borrower and each such Subsidiary.
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SECTION 7.8 MAINTENANCE OF PROPERTIES, ETC.
The Borrower shall, and shall cause each Subsidiary of the Borrower
to, maintain and preserve (a) in good working order and condition, subject to
reasonable wear and tear, all of its properties necessary in the conduct of its
business, (b) all rights, permits, licenses, approvals and privileges (including
all Permits) used or useful or necessary in the conduct of its business and (c)
all registered patents, trademarks, trade names, copyrights and service marks
with respect to its business, except where failure to so maintain and preserve
the items set forth in clauses (a), (b) and (c) above would not, in the
aggregate, have a Material Adverse Effect.
SECTION 7.9 APPLICATION OF PROCEEDS
The Borrower (and, to the extent distributed to them by the Borrower,
each Loan Party) shall use the entire amount of the proceeds of the Loans as
provided in Section 4.13 (Use of Proceeds).
SECTION 7.10 ENVIRONMENTAL
The Borrower shall, and shall cause each Subsidiary of the Borrower
to, comply in all material respects with Environmental Laws and, without
limiting the foregoing, the Borrower shall, at its sole cost and expense, upon
receipt of any notification or otherwise obtaining knowledge of any Release or
other event that has any reasonable likelihood of any of the Borrower or any
Subsidiary of the Borrower incurring Environmental Liabilities and Costs whose
Dollar Equivalent shall exceed $500,000 in the aggregate, (a) conduct, or pay
for consultants to conduct, tests or assessments of environmental conditions at
such operations or properties, including the investigation and testing of
subsurface conditions and (b) take such Remedial Action and undertake such
investigation or other action as required by Environmental Laws or as any
Governmental Authority requires or as is appropriate and consistent with good
business practice to address the Release or event and otherwise ensure
compliance with Environmental Laws.
SECTION 7.11 ADDITIONAL COLLATERAL AND GUARANTIES
To the extent not delivered to the Administrative Agent on or before
the Closing Date (including in respect of after-acquired property and Persons
that become Subsidiaries of any Loan Party after the Closing Date), the Borrower
agrees promptly to do, or cause each Subsidiary of the Borrower to do, each of
the following, unless otherwise agreed by the Administrative Agent:
(a) deliver to the Administrative Agent such duly-executed supplements
and amendments to the Guaranty (or, in the case of any Subsidiary of any Loan
Party that is not a Domestic Subsidiary or that holds shares in any Person that
is not a Domestic Subsidiary, foreign guarantees and related documents), in each
case in form and substance reasonably satisfactory to the Administrative Agent
and as the Administrative Agent deems necessary or advisable in order to ensure
that each Subsidiary of each Loan Party guaranties, as primary obligor and not
as surety, the full and punctual payment when due of the Obligations or any part
thereof; provided, however, in no event shall any Excluded Foreign Subsidiary be
required to guaranty the payment of the Obligations unless the Borrower and the
Administrative Agent otherwise agree;
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(b) deliver to the Administrative Agent such duly-executed joinder and
amendments to the Pledge and Security Agreement and, if applicable, other
Collateral Documents (or, in the case of any such Subsidiary of any Loan Party
that is not a Domestic Subsidiary or that holds shares in any Person that is not
a Domestic Subsidiary, foreign charges, pledges, security agreements and other
Collateral Documents), in each case in form and substance reasonably
satisfactory to the Administrative Agent and as the Administrative Agent deems
necessary or advisable in order to (i) effectively grant to the Administrative
Agent, for the benefit of the Secured Parties, a valid, perfected and
enforceable first-priority security interest in the Stock and Stock Equivalents
and other debt Securities owned by any Loan Party or any Subsidiary of any Loan
Party and (ii) effectively grant to the Administrative Agent, for the benefit of
the Secured Parties, a valid, perfected and enforceable first-priority security
interest in all property interests and other assets of any Loan Party or any
Subsidiary of any Loan Party; provided, however, in no event shall (x) any Loan
Party or any of its Subsidiaries, individually or collectively, be required to
pledge in excess of 65% of the outstanding Voting Stock of any Excluded Foreign
Subsidiary or (y) any assets of any Excluded Foreign Subsidiary be required to
be pledged, unless the Borrower and the Administrative Agent otherwise agree;
(c) deliver to the Administrative Agent all certificates, instruments
and other documents representing all Pledged Stock, Pledged Debt Instruments and
all other Stock, Stock Equivalents and other debt Securities being pledged
pursuant to the joinders, amendments and foreign agreements executed pursuant to
clause (b) above, together with (i) in the case of certificated Pledged Stock
and other certificated Stock and Stock Equivalents, undated stock powers
endorsed in blank and (ii) in the case of Pledged Debt Instruments and other
certificated debt Securities, endorsed in blank, in each case executed and
delivered by a Responsible Officer of such Loan Party or such Subsidiary
thereof, as the case may be;
(d) to take such other actions necessary or advisable to ensure the
validity or continuing validity of the guaranties required to be given pursuant
to clause (a) above or to create, maintain or perfect the security interest
required to be granted pursuant to clause (b) above, including the filing of UCC
financing statements in such jurisdictions as may be required by the Collateral
Documents or by law or as may be reasonably requested by the Administrative
Agent;
(e) if requested by the Administrative Agent, deliver to the
Administrative Agent legal opinions relating to the matters described above,
which opinions shall be in form and substance, and from counsel, chosen by the
Borrower and reasonably satisfactory to the Administrative Agent.
SECTION 7.12 CONTROL ACCOUNTS; APPROVED DEPOSIT ACCOUNTS
(a) Within 60 days of the Closing Date, the Borrower shall, and shall
cause each of its Subsidiaries to, (i) deposit in an Approved Deposit Account
all cash they receive, (ii) not establish or maintain any Securities Account
that is not a Control Account and (iii) not establish or maintain any Deposit
Account other than with a Deposit Account Bank; provided, however, that each of
the Borrower and each of their respective Subsidiaries may (i) maintain payroll,
withholding tax and other fiduciary accounts, (ii) maintain up to $15,000,000 in
disbursement accounts provided, that such amounts shall disbursed (in accordance
with the terms of this Agreement) within 3 Business Days of the date of such
investment, and (iii) maintain other accounts as long as the aggregate balance
in all such accounts does not exceed $1,000,000.
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(b) The Borrower shall, and shall cause each of its Subsidiaries to,
(i) instruct each Account Debtor or other Person obligated to make a payment to
any of them under any Account or General Intangible to make payment, or to
continue to make payment, to an Approved Deposit Account and (ii) deposit in an
Approved Deposit Account immediately upon receipt all Proceeds of such Accounts
and General Intangibles received by the Borrower or any of its Subsidiaries from
any other Person in contravention of the instructions required to be given in
clause (i).
(c) In the event (i) the Borrower, any Subsidiary of the Borrower or
any Deposit Account Bank shall, after the date hereof, terminate an agreement
with respect to the maintenance of an Approved Deposit Account for any reason,
(ii) the Administrative Agent shall demand such termination as a result of the
failure of a Deposit Account Bank to comply with the terms of the applicable
Deposit Account Control Agreement or (iii) the Administrative Agent determines
in its sole discretion that the financial condition of a Deposit Account Bank
has materially deteriorated, the Borrower shall, and shall cause each Subsidiary
of the Borrower to, notify all of their respective obligors that were making
payments to such terminated Approved Deposit Account to make all future payments
to another Approved Deposit Account.
(d) In the event (i) the Borrower, any Subsidiary of the Borrower or
any Approved Securities Intermediary shall, after the date hereof, terminate an
agreement with respect to the maintenance of a Control Account for any reason,
(ii) the Administrative Agent shall demand such termination as a result of the
failure of an Approved Securities Intermediary to comply with the terms of the
applicable Securities Account Control Agreement or (iii) the Administrative
Agent determines in its sole discretion that the financial condition of an
Approved Securities Intermediary has materially deteriorated, each of the
Borrower shall, and shall cause each Subsidiary of the Borrower to, notify all
of its obligors that were making payments to such terminated Control Account to
make all future payments to another Control Account.
(e) The Administrative Agent may establish one or more Cash Collateral
Accounts with such depositaries and Securities Intermediaries as it in its sole
discretion shall determine; provided, however, that no Cash Collateral Account
shall be established with respect to the assets of any Excluded Foreign
Subsidiary. The Borrower agrees that each such Cash Collateral Account shall
meet the requirements of the definition of "Cash Collateral Account". Without
limiting the foregoing, funds on deposit in any Cash Collateral Account may be
invested (but the Administrative Agent shall be under no obligation to make any
such investment) in Cash Equivalents at the direction of the Administrative
Agent and, except during the continuance of an Event of Default, the
Administrative Agent agrees with the Borrower to issue Entitlement Orders for
such investments in Cash Equivalents as requested by the Borrower; provided,
however, that the Administrative Agent shall not have any responsibility for, or
bear any risk of loss of, any such investment or income thereon. None of the
Borrower, any Subsidiary of the Borrower or any other Loan Party or Person
claiming on behalf of or through the Borrower, any Subsidiary of the Borrower or
any other Loan Party shall have any right to demand payment of any funds held in
any Cash Collateral Account at any time prior to the termination of all
outstanding Letters of Credit and the payment in full of all then outstanding
and payable monetary Obligations. The Administrative Agent shall apply all funds
on deposit in a Cash Collateral Account as provided in Section 2.9(d) (Mandatory
Prepayments).
(f) The requirements of this Section 7.12 shall not apply to any
Excluded Foreign Subsidiary.
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SECTION 7.13 LANDLORD WAIVERS AND BAILEE'S LETTERS
The Borrower shall, and shall cause each of its Subsidiaries to,
within 30 days after the Closing Date (or such later date as shall be acceptable
to the Administrative Agent in its Customary Discretion), deliver such Landlord
Waivers and Bailee's Letters as the Administrative Agent shall request in its
Customary Discretion exercised reasonably.
SECTION 7.14 REAL PROPERTY
(a) The Borrower shall, and shall cause each of its Subsidiaries to,
(i) comply in all material respects with all of their respective obligations
under all of their respective Leases now or hereafter held respectively by them,
including the Leases set forth in Schedule 4.19 (Real Property) (provided that
willful late payment and late payment of material amounts made beyond documented
cure periods shall be deemed to be material non-compliance with a Lease under
this clause (i)), (ii) not modify, amend, cancel, extend or otherwise change in
any materially adverse manner any term, covenant or condition of any such Lease,
(iii) not assign or sublet any other Lease if such assignment or sublet would
have a Material Adverse Effect, (iv) provide the Administrative Agent with a
copy of each notice of default under any Lease received by the Borrower or any
Subsidiary of the Borrower promptly upon receipt thereof and deliver to the
Administrative Agent a copy of each notice of default sent by the Borrower or
any Subsidiary of the Borrower under any Lease simultaneously with its delivery
of such notice under such Lease and (v) notify the Administrative Agent at least
14 days prior to the date the Borrower or any Subsidiary takes possession of, or
becomes liable under, any new leased premises or Lease, whichever is earlier.
(b) At least 15 Business Days prior to (i) entering into any Lease
(other than a renewal of an existing Lease) for the principal place of business
and chief executive office of the Borrower or any other Subsidiary Guarantor or
any other Lease (including any renewal) in which the Dollar Equivalent of the
annual rental payments are anticipated to equal or exceed $1,000,000 or (ii)
acquiring any material owned Real Property, the Borrower shall, and shall cause
such Subsidiary Guarantor to, provide the Administrative Agent written notice
thereof and, upon written request of the Administrative Agent, the Borrower
shall, and shall cause such Subsidiary Guarantor, to provide Phase I
environmental reports on such Real Property or, as the case may be, the Real
Property subject to such Lease showing no condition that could give rise to
material Environmental Liabilities and Costs.
(c) To the extent not previously delivered to the Administrative
Agent, upon written request of the Administrative Agent, the Borrower shall, and
shall cause each Subsidiary Guarantor to, execute and deliver to the
Administrative Agent, for the benefit of the Secured Parties, promptly and in
any event not later than 60 days after receipt of such notice (or, if such
notice is given by the Administrative Agent prior to the acquisition of such
Real Property or Lease, immediately upon such acquisition), a Mortgage on any
Real Property of the Borrower or such Subsidiary Guarantor, together with (i) if
requested by the Administrative Agent and such Real Property is located in the
United States or is a Lease of Real Property located in the United States, all
Mortgage Supporting Documents relating thereto or (ii) otherwise, documents
similar to Mortgage Supporting Documents reasonably deemed by the Administrative
Agent to be appropriate and customary in the applicable jurisdiction to obtain
the equivalent in such jurisdiction of a mortgage on such Real Property subject
only to Liens permitted under Section 8.2 (Liens, Etc.).
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ARTICLE VIII
NEGATIVE COVENANTS
Each of the Borrower agrees with the Lenders, the Issuers and the
Administrative Agent to each of the following, as long as any Obligation or any
Revolving Credit Commitment remains outstanding and, in each case, unless the
Requisite Lenders otherwise consent in writing:
SECTION 8.1 INDEBTEDNESS
The Borrower shall not, and shall not permit any of its Subsidiaries
to, directly or indirectly create, incur, assume or otherwise become or remain
directly or indirectly liable with respect to any Indebtedness except for the
following:
(a) the Secured Obligations and Guaranty Obligations in respect
thereto;
(b) Indebtedness existing on the date of this Agreement and disclosed
on Schedule 8.1 (Existing Indebtedness) together with any Permitted Refinancing
of any Indebtedness permitted by this clause (b);
(c) Guaranty Obligations incurred by the Borrower or any Subsidiary in
respect of Indebtedness of the Borrower or any Subsidiary that is otherwise
permitted by this Section 8.1 (other than clause (a) above);
(d) Capital Lease Obligations and purchase money Indebtedness
described in clauses (d) and (e) of the definition thereof incurred by the
Borrower or a Subsidiary of the Borrower to finance the acquisition of fixed
assets, together with any Permitted Refinancing of any Indebtedness permitted by
this clause (b); provided, however, that the Capital Expenditure related thereto
is otherwise permitted by Section 5.3 (Capital Expenditures) and that the Dollar
Equivalent of the aggregate outstanding principal amount of all such Capital
Lease Obligations and such purchase money Indebtedness shall not exceed
$25,000,000 at any time;
(e) Renewals, extensions, refinancings and refundings of Indebtedness
permitted by clause (b) or (d) above or clause (j), (k), (l) or (m) below or
this clause (e); provided, however, that any such renewal, extension,
refinancing or refunding is in an aggregate principal amount not greater than
the principal amount of, and is on terms which, in the aggregate, are no less
favorable to the Borrower or any Subsidiary of the Borrower obligated
thereunder, including as to weighted average maturity and final maturity, than
the Indebtedness being renewed, extended, refinanced or refunded;
(f) a sale and leaseback transaction permitted pursuant to Section
8.16(b) (Operating Leases; Sale/Leasebacks), to the extent such transaction
would constitute Indebtedness;
(g) Indebtedness arising from intercompany loans (i) from the Borrower
to any Subsidiary Guarantor, (ii) from any Subsidiary Guarantor to the Borrower
or any other Subsidiary Guarantor or (iii) from the Borrower or any Subsidiary
Guarantor to any Subsidiary of the Borrower that is not a Subsidiary Guarantor;
provided, however, that, in the case of this clause (g), the Investment in such
intercompany loan to such Subsidiary is permitted under Section 8.3
(Investments);
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(h) Indebtedness arising under any performance or surety bond entered
into in the ordinary course of business;
(i) Hedging Contracts permitted under Section 8.17 (No Speculative
Transactions);
(j) unsecured Indebtedness not otherwise permitted under this Section
8.1; provided, however, that the Dollar Equivalent of the aggregate outstanding
principal amount of all such unsecured Indebtedness shall not exceed $10,000,000
at any time;
(k) Indebtedness under the New Senior Secured Notes, provided,
however, that the aggregate outstanding principal amount of all such unsecured
Indebtedness shall not exceed $100,000,000 at any time;
(l) Indebtedness under the Collateral Trust, provided, however, that
the aggregate outstanding principal amount of all such Indebtedness shall not
exceed $75,000,000 at any time;
(m) the future contingent payments in an amount of no more than
$10,000,000 payable to or on behalf of Old WCI's pension plan under the
Memorandum of Agreement dated March 15, 2006, as amended and restated as of
March 28, 2006, among The Renco Group, Inc. and its affiliates, certain holders
of Old WCI's Senior Secured Notes, the United Steel Workers of America and Old
WCI;
(n) Indebtedness in respect of (i) letters of credit issued by
Wachovia Bank, National Association ("Wachovia") of no more than $10,000,000
existing on the date hereof as described on Schedule 8.1, (ii) continuing
obligations relating to costs, expenses and indemnities under financing
agreements with Wachovia referenced in, and after giving effect to, the Release
and Terminiation Agreement dated May 1, 2006, among Wachovia, Old WCI and
certain of its subsidiaries as debtors and debtors in possession, and certain
other parties thereto, as provided to the Administrative Agent and without
giving effect to any subsequent amendments thereto, and (iii) unpaid
professional fees existing on the date hereof relating to Case No. 03-44662 in
the Bankruptcy Court; and
(o) unsecured Indebtedness of the Borrower that is subordinated to the
payment in full of the Obligations on terms reasonably satisfactory to the
Requisite Lenders (provided that the terms of subordination thereof are
satisfactory to the Administrative Agent in its sole discretion) (all such
Indebtedness permitted to be incurred pursuant to clause (m) and this clause (m)
being "Subordinated Debt"); provided, however, that the aggregate Dollar
Equivalent of the principal amount of all such unsecured Indebtedness shall not
exceed $100,000,000 at any time.
SECTION 8.2 LIENS, ETC.
The Borrower shall not, and shall not permit any of its Subsidiaries
to, create or suffer to exist, any Lien upon or with respect to any of their
respective properties or assets, whether now owned or hereafter acquired, or
assign, or permit any of its Subsidiaries to assign, any right to receive
income, except for the following:
(a) Liens created pursuant to the Loan Documents;
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(b) Liens existing on the date of this Agreement and disclosed on
Schedule 8.2 (Existing Liens);
(c) Customary Permitted Liens on the properties or assets of the
Borrower or the Borrower's Subsidiaries;
(d) purchase money Liens granted by the Borrower or any of its
Subsidiaries (including the interest of a lessor under a Capital Lease and
purchase money Liens to which any property is subject at the time, on or after
the date hereof, of the Borrower's or such Subsidiary's acquisition thereof)
securing Indebtedness permitted under Section 8.1(d) (Indebtedness) and limited
in each case to the property purchased with the proceeds of such purchase money
Indebtedness or subject to such Capital Lease;
(e) any Lien securing the renewal, extension, refinancing or refunding
of any Indebtedness secured by any Lien permitted by clause (b) or (d) above or
this clause (e) without any change in the assets subject to such Lien and to the
extent such renewal, extension, refinancing or refunding is permitted by Section
8.1 (Indebtedness);
(f) Liens in favor of lessors securing operating leases or, to the
extent such transactions create a Lien hereunder, sale and leaseback
transactions, in each case to the extent such operating leases or sale and
leaseback transactions are permitted hereunder;
(g) Liens securing the Indebtedness under New Senior Notes; provided
that such Liens have the priority set forth in the Pledge and Security Agreement
and the Mortgages;
(h) Liens securing the Indebtedness under the Collateral Trust;
provided that such Liens have the priority set forth in the Pledge and Security
Agreement and the Mortgages;
(i) Liens on up to $11,500,000 in cash or Cash Equivalents securing
the letters of credit and other Indebtedness described in Section 8.1(n); and
(j) Liens not otherwise permitted by the foregoing clauses of this
Section 8.2 securing obligations or other liabilities (other than Indebtedness)
of any Loan Party; provided, however, that the Dollar Equivalent of the
aggregate outstanding amount of all such obligations and liabilities shall not
exceed $2,000,000 at any time.
SECTION 8.3 INVESTMENTS
The Borrower shall not, and shall not permit any of its Subsidiaries
to make or maintain, directly or indirectly, any Investment except for the
following:
(a) Investments existing on the date of this Agreement and disclosed
on Schedule 8.3 (Existing Investments);
(b) Investments in cash and Cash Equivalents held in a Deposit Account
or a Control Account in compliance with Section 7.12(a) (Control Accounts;
Approved Deposit Accounts);
(c) Investments by any Excluded Foreign Subsidiary in cash or Cash
Equivalents;
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(d) Investments in payment intangibles, chattel paper (each as defined
in the UCC) and Accounts, notes receivable and similar items arising or acquired
in the ordinary course of business substantially as conducted immediately prior
to the date hereof or approved by the Administrative Agent of the Borrower and
its Subsidiaries;
(e) Investments received in settlement of amounts due to the Borrower
or any Subsidiary of the Borrower effected in the ordinary course of business;
(f) Investments by (i) the Borrower in any Subsidiary Guarantor or any
Subsidiary Guarantor in the Borrower or any other Subsidiary Guarantor, (ii) any
Subsidiary of the Borrower that is not a Subsidiary Guarantor in the Borrower or
any other Subsidiary of the Borrower or (iii) the Borrower or any Subsidiary
Guarantor in a Subsidiary that is not a Subsidiary Guarantor; provided, however,
that the Dollar Equivalent of the aggregate outstanding amount of all
Investments permitted pursuant to this clause (iii) shall not exceed $1,000,000
at any time;
(g) loans or advances to employees of the Borrower or any Subsidiaries
of the Borrower in the ordinary course of business substantially as conducted by
Old WCI and its Subsidiaries immediately prior to the date hereof other than any
loans or advances that would be in violation of Section 402 of the
▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act; provided, however, that the Dollar Equivalent of the
aggregate principal amount of all loans and advances permitted pursuant to this
clause (g) shall not exceed $300,000 at any time;
(h) Guaranty Obligations permitted by Section 8.1 (Indebtedness);
(i) Investments not otherwise permitted by clauses (a) through (h) of
this Section 8.3; provided, however, that the Dollar Equivalent of the aggregate
outstanding amount of all such Investments shall not exceed $1,000,000 at any
time; and
(j) Investments not otherwise permitted by clauses (a) through (i) of
this Section 8.3, in an amount not exceeding the then current Restricted
Payments Basket.
SECTION 8.4 SALE OF ASSETS
The Borrower shall not, and shall not permit any of its Subsidiaries
to, sell, convey, transfer, lease or otherwise dispose of, any of their
respective assets or any interest therein (including the sale or factoring at
maturity or collection of any accounts) to any Person, or permit or suffer any
other Person to acquire any interest in any of their respective assets or issue
or sell any shares of their Stock or any Stock Equivalents (any such disposition
being an "Asset Sale"), except for the following:
(a) the sale or disposition of Cash Equivalents or Inventory, in each
case in the ordinary course of business;
(b) the sale or disposition of Equipment that has become obsolete or
is replaced in the ordinary course of business; provided, however, that the
Dollar Equivalent of the aggregate Fair Market Value of all such equipment
disposed of in any Fiscal Year shall not exceed $5,000,000;
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(c) (i) a true lease or sublease of Real Property not constituting
Indebtedness and not constituting a sale and leaseback transaction and (ii) a
sale of assets pursuant to a sale and leaseback transaction, in each case as
permitted under Section 8.16 (Operating Leases; Sale/Leasebacks);
(d) assignments and licenses of intellectual property of the Borrower
and its Subsidiaries in the ordinary course of business;
(e) any Asset Sale to the Borrower or any Subsidiary Guarantor;
(f) as long as no Default or Event of Default is continuing or would
result therefrom, any other Asset Sale for Fair Market Value, payable in cash
upon such sale; provided, however, that with respect to any such Asset Sale
pursuant to this clause (f), (i) the Dollar Equivalent of the aggregate
consideration received during any Fiscal Year for all such Asset Sales shall not
exceed $10,000,000 and (ii) an amount equal to all Net Cash Proceeds of such
Asset Sale are applied to the payment of the Obligations as set forth in, and to
the extent required by, Section 2.9 (Mandatory Prepayments); and
(g) issuances or sales of Stock or any Stock Equivalents (i) by any
Subsidiary Guarantor to the Borrower or any Subsidiary Guarantor, (ii) by the
Borrower to any Permitted Holder or (iii) by the Borrower to any other Person,
if such issuance by the Borrower is made on terms acceptable to the
Administrative Agent in its discretion.
SECTION 8.5 RESTRICTED PAYMENTS
The Borrower shall not, and shall not permit any of its Subsidiaries
to, directly or indirectly, declare, order, pay, make or set apart any sum for
any Restricted Payment except for the following:
(a) Restricted Payments by any Subsidiary of the Borrower to the
Borrower or any Subsidiary Guarantor;
(b) dividends and distributions declared and paid on the Stock of the
Borrower and payable only in Stock of the Borrower;
(c) conversion of the Series A Preferred Stock into shares of common
Stock of the Borrower and cash payments in connection therewith of amounts for
fractional shares of Series A Preferred Stock not to exceed $1,000,000; and
(d) on or after January 1, 2008, dividends and distributions declared
and paid on the Stock of the Borrower not to exceed 20% of EBITDA (measured from
the Closing Date to the date of such payment) in excess of the product of (i)
the number of years from the Closing Date to the date of such payment and (ii)
$50,000,000; provided, that both before and after payment of such dividends and
distributions Available Credit shall not be less than $45,000,000 and no Default
or Event of Default shall have occurred and be continuing.
SECTION 8.6 PREPAYMENT AND CANCELLATION OF INDEBTEDNESS
(a) The Borrower shall not and shall not permit any of its
Subsidiaries to, cancel any claim or Indebtedness owed to any of them except (i)
in the ordinary course of
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business consistent with past practice and (ii) in respect of intercompany
Indebtedness (x) among the Borrower and the Subsidiary Guarantors, (y) among the
Subsidiary Guarantors or (z) owing by the Borrower or any Subsidiary Guarantor
to any Subsidiary of the Borrower that is not a Subsidiary Guarantor.
(b) The Borrower shall not, and shall not permit any Subsidiary of the
Borrower to, prepay, redeem, purchase, defease or otherwise satisfy prior to the
scheduled maturity thereof in any manner, or make any payment in violation of
any subordination terms of, any Indebtedness; provided, however, that the
Borrower and each Subsidiary of the Borrower may (i) prepay the Obligations in
accordance with the terms of this Agreement, (ii) make regularly scheduled or
otherwise required repayments (but not prepayments) or redemptions of
Indebtedness, (iii) prepay Indebtedness under the Existing Credit Agreement with
the proceeds of the initial Borrowings hereunder, (iv) prepay any Indebtedness
payable to the Borrower or any Subsidiary Guarantor by any of Borrower's
Subsidiaries and (v) renew, extend, refinance and refund Indebtedness, as long
as such renewal, extension, refinancing or refunding is permitted under Section
8.1(Indebtedness).
SECTION 8.7 RESTRICTION ON FUNDAMENTAL CHANGES
The Borrower shall not, and shall not permit any of its Subsidiaries
to, (a) (i) merge with any Person, (ii) consolidate with any Person, (iii)
acquire all or substantially all of the Stock or Stock Equivalents of any Person
or (iv) acquire all or substantially all of the assets of any Person or all or
substantially all of the assets constituting the business of a division, branch
or other unit operation of any Person, (b) enter into any joint venture or
partnership with any Person or (c) acquire or create any Subsidiary unless,
before and after giving effect to such creation or acquisition, no Default or
Event of Default shall have occurred and be continuing and such Subsidiary is a
Wholly-Owned Subsidiary of the Borrower, the Borrower is in compliance with
Section 7.11 (Additional Collateral and Guaranties) and the Investment in such
Subsidiary is permitted under Section 8.3(c) (Investments). Notwithstanding the
foregoing, with the consent of the Administrative Agent, (i) any Subsidiary of
the Borrower that is not a Subsidiary Guarantor may merge or consolidate with,
or acquire substantially all of the assets of, any other Subsidiary of the
Borrower that is also not a Subsidiary Guarantor, (ii) any Subsidiary that is
not a Subsidiary Guarantor may merge or consolidate with, or have substantially
all of its assets acquired by, the Borrower or any Subsidiary Guarantor, so long
as, in the case of a merger or consolidation, the Borrower or such Subsidiary
Guarantor is the survivor of such merger or consolidation, and (iii) any
Subsidiary Guarantor may merge or consolidate with, or have substantially all of
its assets acquired by, the Borrower or any other Subsidiary Guarantor so long
as, in the case of a merger or consolidation of the Borrower and any Subsidiary
Guarantor, the Borrower is the survivor of such merger or consolidation.
SECTION 8.8 CHANGE IN NATURE OF BUSINESS
The Borrower shall not, and shall not permit any of its Subsidiaries
to enter into a new line of business materially different from business as
carried on at the date hereof by Old WCI and its Subsidiaries.
SECTION 8.9 TRANSACTIONS WITH AFFILIATES
The Borrower shall not, and shall not permit any of its Subsidiaries
to, except as otherwise expressly permitted herein, do any of the following: (a)
make any Investment in an
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Affiliate of the Borrower that is not a Subsidiary of the Borrower, (b)
transfer, sell, lease, assign or otherwise dispose of any asset to any Affiliate
of the Borrower that is not a Subsidiary of the Borrower, (c) merge into or
consolidate with or purchase or acquire assets from any Affiliate of the
Borrower that is not a Subsidiary of the Borrower, (d) repay any Indebtedness to
any Affiliate of the Borrower that is not a Subsidiary of the Borrower or (e)
enter into any other transaction directly or indirectly with or for the benefit
of any Affiliate of the Borrower that is not a Subsidiary Guarantor (including
guaranties and assumptions of obligations of any such Affiliate), except for, in
the case of this clause (e), (i) transactions in the ordinary course of business
on a basis no less favorable to the Borrower or, as the case may be, such
Subsidiary thereof as would be obtained in a comparable arm's-length transaction
with a Person not an Affiliate thereof, and (ii) salaries and other director or
employee compensation to officers or directors of the Borrower or any of its
Subsidiaries commensurate with customary compensation levels for comparably
situated enterprises in the steel industry.
SECTION 8.10 LIMITATIONS ON RESTRICTIONS ON SUBSIDIARY DISTRIBUTIONS;
NO NEW NEGATIVE PLEDGE
Except pursuant to the Loan Documents and any agreements governing
purchase money Indebtedness or Capital Lease Obligations permitted by Section
8.1 (Indebtedness) (in the case of agreements permitted by such clauses, any
prohibition or limitation shall only be effective against the assets financed
thereby), the Borrower shall not, and shall not permit any of its Subsidiaries
to, (a) agree to enter into or suffer to exist or become effective any
consensual encumbrance or restriction of any kind on the ability of such
Subsidiary to pay dividends or make any other distribution or transfer of funds
or assets or make loans or advances to or other Investments in, or pay any
Indebtedness owed to, the Borrower or any other Subsidiary of the Borrower or
(b) enter into or suffer to exist or become effective any agreement prohibiting
or limiting the ability of the Borrower or any Subsidiary of the Borrower to
create, incur, assume or suffer to exist any Lien upon any of its property,
assets or revenues, whether now owned or hereafter acquired, to secure the
Obligations, including any agreement requiring any other Indebtedness or
Contractual Obligation to be equally and ratably secured with the Obligations.
SECTION 8.11 MODIFICATION OF CONSTITUENT DOCUMENTS
Except as provided in clause (g) of Section 8.4 (Sale of Assets), the
Borrower shall not, and shall not permit any of its Subsidiaries to, change its
capital structure (including in the terms of its outstanding Stock) or otherwise
amend its Constituent Documents (other than the deletion of the word
"Acquisition" from its name on or promptly after the date hereof), except for
changes and amendments that do not materially affect the rights and privileges
of the Borrower or any Subsidiary of the Borrower and do not materially affect
the interests of the Secured Parties under the Loan Documents or in the
Collateral.
SECTION 8.12 MODIFICATION OF RELATED DOCUMENTS
The Borrower shall not, and shall not permit any of its Subsidiaries
to, (a) alter, rescind, terminate, amend, supplement, waive or otherwise modify
any provision of any Related Document (except for modifications to the terms of
the Subordinated Debt (or any indenture or agreement in connection therewith)
permitted under Section 8.13 (Modification of Debt Agreements) and modifications
that do not in the opinion of the Administrative Agent adversely affect the
rights and privileges of the Borrower or any Subsidiary of the Borrower under
such Related Document and that do not in the opinion of the Administrative Agent
adversely affect the
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interests of the Secured Parties under the Loan Documents or in the Collateral)
or (b) permit any breach or default to exist under any Related Document or take
or fail to take any action thereunder, if to do so would reasonably be expected
to have a Material Adverse Effect.
SECTION 8.13 MODIFICATION OF DEBT AGREEMENTS
The Borrower shall not, and shall not permit any of its Subsidiaries
to, change or amend the terms of any Subordinated Debt (or any indenture or
agreement or other material document entered into in connection therewith) if
the effect of such amendment is to (a) increase the interest rate on such
Subordinated Debt, (b) change the dates upon which payments of principal or
interest are due on such Subordinated Debt other than to extend such dates, (c)
change any default or event of default, other than to delete or make less
restrictive any default provision therein, or add any covenant with respect to
such Subordinated Debt, (d) change the subordination provisions of such
Subordinated Debt, (e) change the redemption or prepayment provisions of such
Subordinated Debt other than to extend the dates therefor or to reduce the
premiums payable in connection therewith or (f) change or amend any other term
if such change or amendment would materially increase the obligations of the
obligor or confer additional material rights to the holder of such Subordinated
Debt in a manner adverse to the Secured Parties.
SECTION 8.14 ACCOUNTING CHANGES; FISCAL YEAR
The Borrower shall not, and shall not permit any of its Subsidiaries
to, change its (a) accounting treatment and reporting practices or tax reporting
treatment, except as required by GAAP or any Requirement of Law and disclosed to
the Lenders and the Administrative Agent or (b) fiscal year.
SECTION 8.15 MARGIN REGULATIONS
The Borrower shall not, and shall not permit any of its Subsidiaries
to, use all or any portion of the proceeds of any credit extended hereunder to
purchase or carry margin stock (within the meaning of Regulation U of the
Federal Reserve Board) in contravention of Regulation U of the Federal Reserve
Board.
SECTION 8.16 OPERATING LEASES; SALE/LEASEBACKS
(a) The Borrower shall not, and shall not permit any of its
Subsidiaries to, become or remain liable as lessee or guarantor or other surety
with respect to any operating lease, unless the Dollar Equivalent of the
aggregate amount of all rents paid or accrued under all such operating leases
shall not exceed $5,000,000 in any Fiscal Year.
(b) The Borrower shall not, and shall not permit any of its
Subsidiaries to, enter into any sale and leaseback transaction if, after giving
effect to such sale and leaseback transaction, the Dollar Equivalent of the
aggregate Fair Market Value of all properties covered by sale and leaseback
transactions would exceed $5,000,000.
SECTION 8.17 NO SPECULATIVE TRANSACTIONS
The Borrower shall not, and shall not permit any of its Subsidiaries
to, engage in any speculative transaction or in any transaction involving
Hedging Contracts except as required
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by or for the sole purpose of hedging in the normal course of business and
consistent with industry practices.
SECTION 8.18 COMPLIANCE WITH ERISA
The Borrower shall not, and shall not permit any of its Subsidiaries
or any ERISA Affiliate to, cause or permit to occur, (a) an event that could
result in the imposition of a Lien under Section 412 of the Code or Section 302
or 4068 of ERISA or (b) ERISA Events that would have a Material Adverse Effect
in the aggregate.
SECTION 8.19 ENVIRONMENTAL
The Borrower shall not, nor shall it permit any of its Subsidiaries
to, allow a Release of any Contaminant in violation of any Environmental Law;
provided, however, that the Borrower shall not be deemed in violation of this
Section 8.19 if all Environmental Liabilities and Costs incurred or reasonably
expected to be incurred by the Loan Parties as the consequence of all such
Releases shall not exceed $500,000 in the aggregate.
SECTION 8.20 PAYMENTS TO THE COLLATERAL TRUST
The Borrower shall not, nor shall it permit any of its Subsidiaries
to, make any payments or contributions to the Collateral Trust or a collateral
trust or other special purpose entity organized for the benefit of the current
and past employees of the Borrower and its Subsidiaries in amounts that are
larger than, and for purposes other than, those specifically provided for in the
draft collective bargaining agreement with the United Steel Workers of America
dated January 9, 2006, without giving effect to any subsequent drafts, execution
versions or amendments.
ARTICLE IX
EVENTS OF DEFAULT
SECTION 9.1 EVENTS OF DEFAULT
Each of the following events shall be an Event of Default:
(a) the Borrower shall fail to pay any principal of any Loan or any
Reimbursement Obligation when the same becomes due and payable; or
(b) the Borrower shall fail to pay any interest on any Loan, any fee
under any of the Loan Documents or any other Obligation (other than one referred
to in clause (a) above) and such non-payment continues for a period of three
Business Days after the due date therefor; or
(c) any representation or warranty made or deemed made by any Loan
Party in any Loan Document or by any Loan Party (or any of its officers) in
connection with any Loan Document shall prove to have been incorrect in any
material respect when made or deemed made; or
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(d) any Loan Party shall fail to perform or observe (i) any term,
covenant or agreement contained in Article V (Financial Covenants), Section 6.1
(Financial Statements), 6.2 (Default Notices), 7.1 (Preservation of Corporate
Existence, Etc.), 7.6 (Access), 7.9 (Application of Proceeds), 7.11 (Additional
Collateral and Guaranties), or Article VIII (Negative Covenants), (ii) any term,
covenant or agreement contained in 6.12(a) (Borrowing Base Determination), or
Section 7.12(b) (Control Accounts; Approved Deposit Accounts) if such failure
under this clause (ii) shall remain unremedied for 5 Business Days after the
earlier of (A) the date on which a Responsible Officer of the Borrower becomes
aware of such failure and (B) the date on which written notice thereof shall
have been given to the Borrower by the Administrative Agent or any Lender or
(iii) any other term, covenant or agreement contained in this Agreement or in
any other Loan Document if such failure under this clause (iii) shall remain
unremedied for 30 days after the earlier of (A) the date on which a Responsible
Officer of the Borrower becomes aware of such failure and (B) the date on which
written notice thereof shall have been given to the Borrower by the
Administrative Agent or any Lender; or
(e) (i) the Borrower or any Subsidiary of the Borrower shall fail to
make any payment on any Indebtedness of the Borrower or any such Subsidiary
(other than the Obligations) or any Guaranty Obligation in respect of
Indebtedness of any other Person, and, in each case, such failure relates to
Indebtedness having a principal amount of $2,500,000 or more, when the same
becomes due and payable (whether by scheduled maturity, required prepayment,
acceleration, demand or otherwise), (ii) any other event shall occur or
condition shall exist under any agreement or instrument relating to any such
Indebtedness, if the effect of such event or condition is to accelerate, or to
permit the acceleration of, the maturity of such Indebtedness or (iii) any such
Indebtedness shall become or be declared to be due and payable, or be required
to be prepaid or repurchased (other than by a regularly scheduled required
prepayment), prior to the stated maturity thereof; or
(f) (i) the Borrower or any Subsidiary of the Borrower shall generally
not pay its debts as such debts become due, shall admit in writing its inability
to pay its debts generally or shall make a general assignment for the benefit of
creditors, (ii) any proceeding shall be instituted by or against the Borrower or
any Subsidiary of the Borrower seeking to adjudicate it a bankrupt or insolvent,
or seeking liquidation, winding up, reorganization, arrangement, adjustment,
protection, relief or composition of it or its debts, under any Requirement of
Law relating to bankruptcy, insolvency or reorganization or relief of debtors,
or seeking the entry of an order for relief or the appointment of a custodian,
receiver, trustee or other similar official for it or for any substantial part
of its property; provided, however, that, in the case of any such proceedings
instituted against the Borrower or any Subsidiary of the Borrower (but not
instituted by the Borrower or any Subsidiary of the Borrower), either such
proceedings shall remain undismissed or unstayed for a period of 30 days or more
or any action sought in such proceedings shall occur or (iii) the Borrower or
any Subsidiary of the Borrower shall take any corporate action to authorize any
action set forth in clauses (i) and (ii) above; or
(g) one or more judgments or orders (or other similar process)
involving, in the case of money judgments, an aggregate amount whose Dollar
Equivalent exceeds $2,500,000, to the extent not covered by insurance, shall be
rendered against one or more of the Borrower and its Subsidiaries and either (i)
enforcement proceedings shall have been commenced by any creditor upon such
judgment or order or (ii) there shall be any period of 20 days or more during
which a stay of enforcement of such judgment or order, by reason of a pending
appeal or otherwise, shall not be in effect; or
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(h) an ERISA Event shall occur and the Dollar Equivalent of the amount
of all liabilities and deficiencies resulting therefrom, whether or not
assessed, exceeds $2,500,000 in the aggregate; or
(i) any provision of any Loan Document after delivery thereof shall
for any reason fail or cease to be valid and binding on, or enforceable against,
any Loan Party party thereto, or any Loan Party shall so state in writing; or
(j) any Collateral Document shall for any reason fail or cease to
create a valid and enforceable Lien on any Collateral purported to be covered
thereby or, except as permitted by the Loan Documents, such Lien shall fail or
cease to be a perfected and first priority Lien (other than as expressly
provided for in the Pledge and Security Agreement and the Mortgages), or any
Loan Party shall so state in writing; provided, however, that it shall not be an
Event of Default hereunder solely because any Collateral Document shall fail or
cease to create a valid and enforceable Lien on only an immaterial portion of
the Collateral with respect to which the Intercreditor Agreement expressly
provides that the Administrative Agent and the Lenders have a junior priority
Lien; or
(k) there shall occur any Change of Control; or
(l) one or more of the Borrower and the Subsidiaries of the Borrower
shall have entered into one or more consent or settlement decrees or agreements
or similar arrangements with a Governmental Authority or one or more judgments,
orders, decrees or similar actions shall have been entered against one or more
of the Borrower and the Subsidiaries of the Borrower based on or arising from
the violation of or pursuant to any Environmental Law, or the generation,
storage, transportation, treatment, disposal or Release of any Contaminant and,
in connection with all the foregoing, the Borrower or any Subsidiary of the
Borrower is likely to incur Environmental Liabilities and Costs whose Dollar
Equivalent exceeds $2,500,000 in the aggregate that were not reflected in the
Projections or the Financial Statements delivered pursuant to Section 4.4
(Financial Statements) prior to the date hereof; or
(m) the Order shall be modified, rescinded, stayed or repealed in any
respect without the written consent of the Administrative Agent and the
Requisite Lenders.
SECTION 9.2 REMEDIES
During the continuance of any Event of Default, the Administrative
Agent (a) may, and, at the request of the Requisite Lenders, shall, by notice to
the Borrower declare that all or any portion of the Revolving Credit Commitments
be terminated, whereupon the obligation of each Revolving Credit Lender to make
any Loan and each Issuer to Issue any Letter of Credit shall immediately
terminate and (b) may, and, at the request of the Requisite Lenders, shall, by
notice to the Borrower, declare the Loans, all interest thereon and all other
amounts and Obligations payable under this Agreement to be forthwith due and
payable, whereupon the Loans, all such interest and all such amounts and
Obligations shall become and be forthwith due and payable, without presentment,
demand, protest or further notice of any kind, all of which are hereby expressly
waived by the Borrower; provided, however, that upon the occurrence of the
Events of Default specified in Section 9.1(f) (Events of Default), (x) the
Revolving Credit Commitments of each Revolving Credit Lender to make Loans and
the commitments of each Revolving Credit Lender and Issuer to Issue or
participate in Letters of Credit shall each automatically be terminated and (y)
the Loans, all such interest and all such amounts and
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Obligations shall automatically become and be due and payable, without
presentment, demand, protest or any notice of any kind, all of which are hereby
expressly waived by the Borrower. In addition to the remedies set forth above,
the Administrative Agent may exercise any remedies provided for by the
Collateral Documents in accordance with the terms thereof or any other remedies
provided by applicable law.
SECTION 9.3 ACTIONS IN RESPECT OF LETTERS OF CREDIT
At any time (i) upon the Revolving Credit Termination Date, (ii) after
the Revolving Credit Termination Date when the aggregate funds on deposit in
Cash Collateral Accounts shall be less than 105% of the Letter of Credit
Obligations, (iii) as may be required by Section 2.9(b) or (c) (Mandatory
Prepayments), the Borrower shall pay to the Administrative Agent in immediately
available funds at the Administrative Agent's office referred to in Section 11.8
(Notices, Etc.), for deposit in a Cash Collateral Account, (x) in the case of
clauses (i) and (ii) above, the amount required so that, after such payment, the
aggregate funds on deposit in the Cash Collateral Accounts equals or exceeds
105% of the sum of all outstanding Letter of Credit Obligations and (y) in the
case of clause (iii) above, the amount required by Section 2.9(b) or (d)
(Mandatory Prepayments). The Administrative Agent may, from time to time after
funds are deposited in any Cash Collateral Account, apply funds then held in
such Cash Collateral Account to the payment of any amounts, in accordance with
Section 2.9 (b) or (d) (Mandatory Prepayments) and Section 2.13(g) (Payments and
Computations), as shall have become or shall become due and payable by the
Borrower to the Issuers or Lenders in respect of the Letter of Credit
Obligations. The Administrative Agent shall promptly give written notice of any
such application; provided, however, that the failure to give such written
notice shall not invalidate any such application.
SECTION 9.4 RESCISSION
If at any time after termination of the Revolving Credit Commitments
or acceleration of the maturity of the Loans, the Borrower shall pay all arrears
of interest and all payments on account of principal of the Loans and
Reimbursement Obligations that shall have become due otherwise than by
acceleration (with interest on principal and, to the extent permitted by law, on
overdue interest, at the rates specified herein) and all Events of Default and
Defaults (other than non-payment of principal of and accrued interest on the
Loans due and payable solely by virtue of acceleration) shall be remedied or
waived pursuant to Section 11.1 (Amendments, Waivers, Etc.), then upon the
written consent of the Requisite Lenders and written notice to the Borrower, the
termination of the Revolving Credit Commitments or the acceleration and their
consequences may be rescinded and annulled; provided, however, that such action
shall not affect any subsequent Event of Default or Default or impair any right
or remedy consequent thereon. The provisions of the preceding sentence are
intended merely to bind the Lenders and the Issuers to a decision that may be
made at the election of the Requisite Lenders, and such provisions are not
intended to benefit the Borrower and do not give the Borrower the right to
require the Lenders to rescind or annul any acceleration hereunder, even if the
conditions set forth herein are met.
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ARTICLE X
THE ADMINISTRATIVE AGENT
SECTION 10.1 AUTHORIZATION AND ACTION
(a) Each Lender and each Issuer hereby appoints Citicorp as the
Administrative Agent hereunder and each Lender and each Issuer authorizes the
Administrative Agent to take such action as agent on its behalf and to exercise
such powers under this Agreement and the other Loan Documents as are delegated
to the Administrative Agent under such agreements and to exercise such powers as
are reasonably incidental thereto. Without limiting the foregoing, each Lender
and each Issuer hereby authorizes the Administrative Agent to execute and
deliver, and to perform its obligations under, each of the Loan Documents to
which the Administrative Agent is a party, to exercise all rights, powers and
remedies that the Administrative Agent may have under such Loan Documents and,
in the case of the Collateral Documents, to act as agent for the Lenders,
Issuers and the other Secured Parties under such Collateral Documents.
(b) As to any matters not expressly provided for by this Agreement and
the other Loan Documents (including enforcement or collection), the
Administrative Agent shall not be required to exercise any discretion or take
any action, but shall be required to act or to refrain from acting (and shall be
fully protected in so acting or refraining from acting) upon the instructions of
the Requisite Lenders, and such instructions shall be binding upon all Lenders
and each Issuer; provided, however, that the Administrative Agent shall not be
required to take any action that (i) the Administrative Agent in good faith
believes exposes it to personal liability unless the Administrative Agent
receives an indemnification satisfactory to it from the Lenders and the Issuers
with respect to such action or (ii) is contrary to this Agreement or applicable
law. The Administrative Agent agrees to give to each Lender and each Issuer
prompt notice of each notice given to it by any Loan Party pursuant to the terms
of this Agreement or the other Loan Documents.
(c) In performing its functions and duties hereunder and under the
other Loan Documents, the Administrative Agent is acting solely on behalf of the
Lenders and the Issuers except to the limited extent provided in Section 2.7(c)
(Evidence of Debt), and its duties are entirely administrative in nature. The
Administrative Agent does not assume and shall not be deemed to have assumed any
obligation other than as expressly set forth herein and in the other Loan
Documents or any other relationship as the agent, fiduciary or trustee of or for
any Lender, Issuer or holder of any other Obligation. The Administrative Agent
may perform any of its duties under any Loan Document by or through its agents
or employees.
(d) In the event that Citicorp or any of its Affiliates shall be or
become an indenture trustee under the Trust Indenture Act of 1939 (as amended,
the "Trust Indenture Act") in respect of any securities issued or guaranteed by
any Loan Party, the parties hereto acknowledge and agree that any payment or
property received in satisfaction of or in respect of any Obligation of such
Loan Party hereunder or under any other Loan Document by or on behalf of
Citicorp in its capacity as the Administrative Agent for the benefit of any Loan
Party under any Loan Document (other than Citicorp or an Affiliate of Citicorp)
and which is applied in accordance with the Loan Documents shall be deemed to be
exempt from the requirements of Section 311 of the Trust Indenture Act pursuant
to Section 311(b)(3) of the Trust Indenture Act.
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(e) The Arranger shall have no obligations or duties whatsoever in
such capacity under this Agreement or any other Loan Document and shall incur no
liability hereunder or thereunder in such capacity.
SECTION 10.2 ADMINISTRATIVE AGENT'S RELIANCE, ETC.
None of the Administrative Agent, any of its Affiliates or any of
their respective directors, officers, agents or employees shall be liable for
any action taken or omitted to be taken by it, him, her or them under or in
connection with this Agreement or the other Loan Documents, except for its, his,
her or their own gross negligence or willful misconduct. Without limiting the
foregoing, the Administrative Agent (a) may treat the payee of any Revolving
Credit Note as its holder until such Revolving Credit Note has been assigned in
accordance with Section 11.2 (Assignments and Participations), (b) may rely on
the Register to the extent set forth in Section 2.7 (Evidence of Debt), (c) may
consult with legal counsel (including counsel to the Borrower or any other Loan
Party), independent public accountants and other experts selected by it and
shall not be liable for any action taken or omitted to be taken in good faith by
it in accordance with the advice of such counsel, accountants or experts, (d)
makes no warranty or representation to any Lender or Issuer and shall not be
responsible to any Lender or Issuer for any statements, warranties or
representations made by or on behalf of the Borrower or any of its Subsidiaries
in or in connection with this Agreement or any other Loan Document, (e) shall
not have any duty to ascertain or to inquire either as to the performance or
observance of any term, covenant or condition of this Agreement or any other
Loan Document, as to the financial condition of any Loan Party or as to the
existence or possible existence of any Default or Event of Default, (f) shall
not be responsible to any Lender or Issuer for the due execution, legality,
validity, enforceability, genuineness, sufficiency or value of, or the
attachment, perfection or priority of any Lien created or purported to be
created under or in connection with, this Agreement, any other Loan Document or
any other instrument or document furnished pursuant hereto or thereto and (g)
shall incur no liability under or in respect of this Agreement or any other Loan
Document by acting upon any notice, consent, certificate or other instrument or
writing (which writing may be a telecopy or electronic mail) or any telephone
message believed by it to be genuine and signed or sent by the proper party or
parties.
SECTION 10.3 POSTING OF APPROVED ELECTRONIC COMMUNICATIONS
(a) Each of the Lenders, the Issuers and the Borrower agree, and the
Borrower shall cause each Subsidiary Guarantor to agree, that the Administrative
Agent may, but shall not be obligated to, make the Approved Electronic
Communications available to the Lenders and Issuers by posting such Approved
Electronic Communications on IntraLinks(TM) or a substantially similar
electronic platform chosen by the Administrative Agent to be its electronic
transmission system (the "Approved Electronic Platform").
(b) Although the Approved Electronic Platform and its primary web
portal are secured with generally-applicable security procedures and policies
implemented or modified by the Administrative Agent from time to time
(including, as of the Closing Date, a dual firewall and a User ID/Password
Authorization System) and the Approved Electronic Platform is secured through a
single-user-per-deal authorization method whereby each user may access the
Approved Electronic Platform only on a deal-by-deal basis, each of the Lenders,
the Issuers, and the Borrower acknowledges and agrees, and the Borrower shall
cause each Subsidiary Guarantor to acknowledge and agree, that the distribution
of material through an electronic medium is not necessarily secure and that
there are confidentiality and other risks associated with such
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distribution. In consideration for the convenience and other benefits afforded
by such distribution and for the other consideration provided hereunder, the
receipt and sufficiency of which is hereby acknowledged, each of the Lenders,
the Issuers and the Borrower hereby approves, and the Borrower shall cause each
Subsidiary Guarantor to approve, distribution of the Approved Electronic
Communications through the Approved Electronic Platform and understands and
assumes, and the Borrower shall cause each Subsidiary Guarantor to understand
and assume, the risks of such distribution.
(C) THE APPROVED ELECTRONIC PLATFORM AND THE APPROVED ELECTRONIC
COMMUNICATIONS ARE PROVIDED "AS IS" AND "AS AVAILABLE". NONE OF THE
ADMINISTRATIVE AGENT OR ANY OF ITS AFFILIATES OR ANY OF THEIR RESPECTIVE
OFFICERS, DIRECTORS, EMPLOYEES, AGENTS, ADVISORS OR REPRESENTATIVES (THE "AGENT
AFFILIATES") WARRANT THE ACCURACY, ADEQUACY OR COMPLETENESS OF THE APPROVED
ELECTRONIC COMMUNICATIONS OR THE APPROVED ELECTRONIC PLATFORM AND EACH EXPRESSLY
DISCLAIMS LIABILITY FOR ERRORS OR OMISSIONS IN THE APPROVED ELECTRONIC PLATFORM
AND THE APPROVED ELECTRONIC COMMUNICATIONS. NO WARRANTY OF ANY KIND, EXPRESS,
IMPLIED OR STATUTORY, INCLUDING, WITHOUT LIMITATION, ANY WARRANTY OF
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT OF THIRD
PARTY RIGHTS OR FREEDOM FROM VIRUSES OR OTHER CODE DEFECTS, IS MADE BY THE AGENT
AFFILIATES IN CONNECTION WITH THE APPROVED ELECTRONIC PLATFORM OR THE APPROVED
ELECTRONIC COMMUNICATIONS.
(d) Each of the Lenders, the Issuers and the Borrower agree, and the
Borrower shall cause each Subsidiary Guarantor to agree, that the Administrative
Agent may, but (except as may be required by applicable law) shall not be
obligated to, store the Approved Electronic Communications on the Approved
Electronic Platform in accordance with the Administrative Agent's
generally-applicable document retention procedures and policies.
SECTION 10.4 THE ADMINISTRATIVE AGENT INDIVIDUALLY
With respect to its Ratable Portion, Citicorp shall have and may
exercise the same rights and powers hereunder and is subject to the same
obligations and liabilities as and to the extent set forth herein for any other
Lender. The terms "Lenders", "Revolving Credit Lenders", "Requisite Lenders" and
any similar terms shall, unless the context clearly otherwise indicates,
include, without limitation, the Administrative Agent in its individual capacity
as a Lender, a Revolving Credit Lender or as one of the Requisite Lenders.
Citicorp and its Affiliates may accept deposits from, lend money to, and
generally engage in any kind of banking, trust or other business with, any Loan
Party as if Citicorp were not acting as the Administrative Agent.
SECTION 10.5 LENDER CREDIT DECISION
Each Lender and each Issuer acknowledges that it shall, independently
and without reliance upon the Administrative Agent or any other Lender conduct
its own independent investigation of the financial condition and affairs of the
Borrower and each other Loan Party in connection with the making and continuance
of the Loans and with the issuance of the Letters of Credit. Each Lender and
each Issuer also acknowledges that it shall, independently and without reliance
upon the Administrative Agent or any other Lender and based on such documents
and information as it shall deem appropriate at the time, continue to make its
own credit decisions in taking or not taking action under this Agreement and
other Loan Documents. Except for documents expressly required by any Loan
Document to be transmitted by the Administrative
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Agent to the Lenders or the Issuers, the Administrative Agent shall not have any
duty or responsibility to provide any Lender or any Issuer with any credit or
other information concerning the business, prospects, operations, property,
financial and other condition or creditworthiness of any Loan Party or any
Affiliate of any Loan Party that may come into the possession of the
Administrative Agent or any Affiliate thereof or any employee or agent of any of
the foregoing.
SECTION 10.6 INDEMNIFICATION
Each Revolving Credit Lender agrees to indemnify the Administrative
Agent and each of its Affiliates, and each of their respective directors,
officers, employees, agents and advisors (to the extent not reimbursed by the
Borrower), from and against such Revolving Credit Lender's aggregate Ratable
Portion of any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses and disbursements (including fees,
expenses and disbursements of financial and legal advisors) of any kind or
nature whatsoever that may be imposed on, incurred by, or asserted against, the
Administrative Agent or any of its Affiliates, directors, officers, employees,
agents and advisors in any way relating to or arising out of this Agreement or
the other Loan Documents or any action taken or omitted by the Administrative
Agent under this Agreement or the other Loan Documents; provided, however, that
no Revolving Credit Lender shall be liable for any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements resulting from the Administrative Agent's or such
Affiliate's gross negligence or willful misconduct. Without limiting the
foregoing, each Revolving Credit Lender agrees to reimburse the Administrative
Agent promptly upon demand for its ratable share of any out-of-pocket expenses
(including fees, expenses and disbursements of financial and legal advisors)
incurred by the Administrative Agent in connection with the preparation,
execution, delivery, administration, modification, amendment or enforcement
(whether through negotiations, legal proceedings or otherwise) of, or legal
advice in respect of its rights or responsibilities under, this Agreement or the
other Loan Documents, to the extent that the Administrative Agent is not
reimbursed for such expenses by the Borrower or another Loan Party.
SECTION 10.7 SUCCESSOR ADMINISTRATIVE AGENT
The Administrative Agent may resign at any time by giving written
notice thereof to the Lenders and the Borrower. Upon any such resignation, the
Requisite Lenders shall have the right to appoint a successor Administrative
Agent. If no successor Administrative Agent shall have been so appointed by the
Requisite Lenders, and shall have accepted such appointment, within 30 days
after the retiring Administrative Agent's giving of notice of resignation, then
the retiring Administrative Agent may, on behalf of the Lenders, appoint a
successor Administrative Agent, selected from among the Lenders. In either case,
such appointment shall be subject to the prior written approval of the Borrower
(which approval may not be unreasonably withheld and shall not be required upon
the occurrence and during the continuance of an Event of Default). Upon the
acceptance of any appointment as Administrative Agent by a successor
Administrative Agent, such successor Administrative Agent shall succeed to, and
become vested with, all the rights, powers, privileges and duties of the
retiring Administrative Agent, and the retiring Administrative Agent shall be
discharged from its duties and obligations under this Agreement and the other
Loan Documents. Prior to any retiring Administrative Agent's resignation
hereunder as Administrative Agent, the retiring Administrative Agent shall take
such action as may be reasonably necessary to assign to the successor
Administrative Agent its rights as Administrative Agent under the Loan
Documents. After such resignation, the retiring Administrative Agent shall
continue to have the benefit of this Article X as to any actions taken or
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omitted to be taken by it while it was Administrative Agent under this Agreement
and the other Loan Documents.
SECTION 10.8 CONCERNING THE COLLATERAL AND THE COLLATERAL DOCUMENTS
(a) Each Lender and each Issuer agrees that any action taken by the
Administrative Agent or the Requisite Lenders (or, where required by the express
terms of this Agreement, a greater proportion of the Lenders) in accordance with
the provisions of this Agreement or of the other Loan Documents, and the
exercise by the Administrative Agent or the Requisite Lenders (or, where so
required, such greater proportion) of the powers set forth herein or therein,
together with such other powers as are reasonably incidental thereto, shall be
authorized and binding upon all of the Lenders, Issuers and other Secured
Parties. Without limiting the generality of the foregoing, the Administrative
Agent shall have the sole and exclusive right and authority to (i) act as the
disbursing and collecting agent for the Lenders and the Issuers with respect to
all payments and collections arising in connection herewith and with the
Collateral Documents, (ii) execute and deliver each Collateral Document and
accept delivery of each such agreement delivered by the Borrower or any of its
Subsidiaries, (iii) act as collateral agent for the Lenders, the Issuers and the
other Secured Parties for purposes of the perfection of all security interests
and Liens created by such agreements and all other purposes stated therein,
provided, however, that the Administrative Agent hereby appoints, authorizes and
directs each Lender and Issuer to act as collateral sub-agent for the
Administrative Agent, the Lenders and the Issuers for purposes of the perfection
of all security interests and Liens with respect to the Collateral, including
any Deposit Accounts maintained by a Loan Party with, and cash and Cash
Equivalents held by, such Lender or such Issuer, (iv) manage, supervise and
otherwise deal with the Collateral, including the making of Protective Advances
in an aggregate amount not to exceed the lesser of $5,000,000 and the aggregated
unused portions of the respective Revolving Credit Commitments, (v) take such
action as is necessary or desirable to maintain the perfection and priority of
the security interests and Liens created or purported to be created by the
Collateral Documents and (vi) except as may be otherwise specifically restricted
by the terms hereof or of any other Loan Document, exercise all remedies given
to the Administrative Agent, the Lenders, the Issuers and the other Secured
Parties with respect to the Collateral under the Loan Documents relating
thereto, applicable law or otherwise.
(b) Each of the Lenders and the Issuers hereby consents to the release
and hereby directs, in accordance with the terms hereof, the Administrative
Agent to release (or, in the case of clause (ii) below, release or subordinate)
any Lien held by the Administrative Agent for the benefit of the Lenders and the
Issuers against any of the following:
(i) all of the Collateral and all Loan Parties, upon termination
of the Revolving Credit Commitments and payment and satisfaction in full of
all Loans, all Reimbursement Obligations and all other Obligations that the
Administrative Agent has been notified in writing are then due and payable
(and, in respect of contingent Letter of Credit Obligations, with respect
to which cash collateral has been deposited or a back-up letter of credit
has been issued, in either case in the appropriate currency and on terms
satisfactory to the Administrative Agent and the applicable Issuers);
(ii) any assets that are subject to a Lien permitted by Section
8.2(d) or (e) (Liens, Etc.); and
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(iii) any part of the Collateral sold or disposed of by a Loan
Party if such sale or disposition is permitted by this Agreement (or
permitted pursuant to a waiver of, or consent to, a transaction otherwise
prohibited by this Agreement).
Each of the Lenders and the Issuers hereby directs the Administrative Agent to
execute and deliver or file such termination and partial release statements and
do such other things as are necessary to release Liens to be released pursuant
to this Section 10.8 promptly upon the effectiveness of any such release.
SECTION 10.9 COLLATERAL MATTERS RELATING TO RELATED OBLIGATIONS
The benefit of the Loan Documents and of the provisions of this
Agreement relating to the Collateral shall extend to and be available in respect
of any Secured Obligation arising under any Hedging Contract or Cash Management
Obligation or that is otherwise owed to Persons other than the Administrative
Agent, the Lenders and the Issuers (collectively, "Related Obligations") solely
on the condition and understanding, as among the Administrative Agent and all
Secured Parties, that (a) the Related Obligations shall be entitled to the
benefit of the Loan Documents and the Collateral to the extent expressly set
forth in this Agreement and the other Loan Documents and to such extent the
Administrative Agent shall hold, and have the right and power to act with
respect to, the Guaranty and the Collateral on behalf of and as agent for the
holders of the Related Obligations, but the Administrative Agent is otherwise
acting solely as agent for the Lenders and the Issuers and shall have no
fiduciary duty, duty of loyalty, duty of care, duty of disclosure or other
obligation whatsoever to any holder of Related Obligations, (b) all matters,
acts and omissions relating in any manner to the Guaranty, the Collateral, or
the omission, creation, perfection, priority, abandonment or release of any
Lien, shall be governed solely by the provisions of this Agreement and the other
Loan Documents and no separate Lien, right, power or remedy shall arise or exist
in favor of any Secured Party under any separate instrument or agreement or in
respect of any Related Obligation, (c) each Secured Party shall be bound by all
actions taken or omitted, in accordance with the provisions of this Agreement
and the other Loan Documents, by the Administrative Agent and the Requisite
Lenders, each of whom shall be entitled to act at its sole discretion and
exclusively in its own interest given its own Revolving Credit Commitments and
its own interest in the Loans, Letter of Credit Obligations and other
Obligations to it arising under this Agreement or the other Loan Documents,
without any duty or liability to any other Secured Party or as to any Related
Obligation and without regard to whether any Related Obligation remains
outstanding or is deprived of the benefit of the Collateral or becomes unsecured
or is otherwise affected or put in jeopardy thereby, (d) no holder of Related
Obligations and no other Secured Party (except the Administrative Agent, the
Lenders and the Issuers, to the extent set forth in this Agreement) shall have
any right to be notified of, or to direct, require or be heard with respect to,
any action taken or omitted in respect of the Collateral or under this Agreement
or the Loan Documents and (e) no holder of any Related Obligation shall exercise
any right of setoff, banker's lien or similar right except to the extent
provided in Section 11.6 (Right of Set-off) and then only to the extent such
right is exercised in compliance with Section 11.7 (Sharing of Payments, Etc.).
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ARTICLE XI
MISCELLANEOUS
SECTION 11.1 AMENDMENTS, WAIVERS, ETC.
(a) No amendment or waiver of any provision of this Agreement or any
other Loan Document nor consent to any departure by any Loan Party therefrom
shall in any event be effective unless the same shall be in writing and (x) in
the case of any such waiver or consent signed by the Requisite Lenders (or by
the Administrative Agent with the consent of the Requisite Lenders) and (y) in
the case of any other amendment, by the Requisite Lenders (or by the
Administrative Agent with the consent of the Requisite Lenders ) and the
Borrower, and then any such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given; provided,
however, that no amendment, waiver or consent shall, unless in writing and
signed by each Lender directly affected thereby, in addition to the Requisite
Lenders (or the Administrative Agent with the consent thereof), do any of the
following:
(i) waive any condition specified in Section 3.1 (Conditions
Precedent to Initial Loans and Letters of Credit) or 3.2(b) (Conditions
Precedent to Each Loan and Letter of Credit), except with respect to a
condition based upon another provision hereof, the waiver of which requires
only the concurrence of the Requisite Lenders and, in the case of the
conditions specified in Section 3.1 (Conditions Precedent to Initial Loans
and Letters of Credit), subject to the provisions of Section 3.3
(Determinations of Initial Borrowing Conditions);
(ii) increase the Revolving Credit Commitment of such Lender or
subject such Lender to any additional obligation;
(iii) extend the scheduled final maturity of any Loan owing to
such Lender, or waive, reduce or postpone any scheduled date fixed for the
payment or reduction of principal or interest of any such Loan or fees
owing to such Lender (it being understood that Section 2.9 (Mandatory
Prepayments) does not provide for scheduled dates fixed for payment) or for
the reduction of such Lender's Revolving Credit Commitment;
(iv) reduce, or release the Borrower from its obligations to
repay, the principal amount of any Loan or Reimbursement Obligation owing
to such Lender (other than by the payment or prepayment thereof);
(v) reduce the rate of interest on any Loan or Reimbursement
Obligations outstanding and owing to such Lender or any fee payable
hereunder to such Lender;
(vi) expressly subordinate any of the Secured Obligations or any
Liens securing the Secured Obligations;
(vii) postpone any scheduled date fixed for payment of interest
or fees owing to such Lender or waive any such payment;
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(viii) change the aggregate Ratable Portions of Lenders required
for any or all Lenders to take any action hereunder;
(ix) release all or substantially all of the Collateral except as
provided in Section 10.8(b) (Concerning the Collateral and the Collateral
Documents) or release the Borrower from its payment obligation to such
Lender under this Agreement or the Revolving Credit Notes owing to such
Lender (if any) or release any Subsidiary Guarantor from its obligations
under the Guaranty except in connection with the sale or other disposition
of a Subsidiary Guarantor (or all or substantially all of the assets
thereof) permitted by this Agreement (or permitted pursuant to a waiver or
consent of a transaction otherwise prohibited by this Agreement);
(x) increase any of the percentages set forth in the definition
of Borrowing Base above the maximum percentages stated therein on the date
hereof; or
(xi) amend Section 10.8(b) (Concerning the Collateral and the
Collateral Documents), Section 11.7 (Sharing of Payments, Etc.), this
Section 11.1 or either definition of the terms "Requisite Lenders" or
"Ratable Portion";
and provided, further, that (x) no amendment, waiver or consent shall, unless in
writing and signed by any Special Purpose Vehicle that has been granted an
option pursuant to Section 11.2(e) (Assignments and Participations), affect the
grant or nature of such option or the right or duties of such Special Purpose
Vehicle hereunder, (y) no amendment, waiver or consent shall, unless in writing
and signed by the Administrative Agent in addition to the Lenders required above
to take such action, affect the rights or duties of the Administrative Agent
under this Agreement or the other Loan Documents and (z) no amendment, waiver or
consent shall, unless in writing and signed by the Swing Loan Lender in addition
to the Lenders required above to take such action, affect the rights or duties
of the Swing Loan Lender under this Agreement or the other Loan Documents;
and provided, further, that the Administrative Agent may, with the consent of
the Borrower, amend, modify or supplement this Agreement to cure any ambiguity,
omission, defect or inconsistency, so long as such amendment, modification or
supplement does not adversely affect the rights of any Lender or any Issuer.
(b) The Administrative Agent may, but shall have no obligation to,
with the written concurrence of any Lender, execute amendments, modifications,
waivers or consents on behalf of such Lender. Any waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
it was given. No notice to or demand on the Borrower in any case shall entitle
the Borrower to any other or further notice or demand in similar or other
circumstances.
(c) If, in connection with any proposed amendment, modification,
waiver or termination requiring the consent of all affected Lenders, the consent
of Requisite Lenders is obtained but the consent of other Revolving Credit
Lenders whose consent is required is not obtained (any such Revolving Credit
Lender whose consent is not obtained as described in this Section 11.1 being
referred to as a "Non-Consenting Lender"), then, as long as the Revolving Credit
Lender acting as the Administrative Agent is not a Non-Consenting Lender, at the
Borrower's request, any Eligible Assignee acceptable to the Administrative Agent
shall have the right with the Administrative Agent's consent and in the
Administrative Agent's sole discretion
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(but shall have no obligation) to purchase from such Non-Consenting Lender, and
such Non-Consenting Lender agrees that it shall, upon the Administrative Agent's
request, sell and assign to the Revolving Credit Lender acting as the
Administrative Agent or such Eligible Assignee, all of the Revolving Credit
Commitments and Revolving Credit Outstandings of such Non-Consenting Lender for
an amount equal to the principal balance of all Loans held by the Non-Consenting
Lender and all accrued and unpaid interest and fees with respect thereto through
the date of sale; provided, however, that such purchase and sale shall be
recorded in the Register maintained by the Administrative Agent and shall not be
effective until (x) the Administrative Agent shall have received from such
Eligible Assignee an agreement in form and substance satisfactory to the
Administrative Agent and the Borrower whereby such Eligible Assignee shall agree
to be bound by the terms hereof and (y) such Non-Consenting Lender shall have
received payments of all Loans held by it and all accrued and unpaid interest
and fees with respect thereto through the date of the sale. Each Revolving
Credit Lender agrees that, if it becomes a Non-Consenting Lender, it shall
execute and deliver to the Administrative Agent an Assignment and Acceptance to
evidence such sale and purchase and shall deliver to the Administrative Agent
any Revolving Credit Note (if the assigning Revolving Credit Lender's Loans are
evidenced by a Revolving Credit Note) subject to such Assignment and Acceptance;
provided, however, that the failure of any Non-Consenting Lender to execute an
Assignment and Acceptance shall not render such sale and purchase (and the
corresponding assignment) invalid and such assignment shall be recorded in the
Register.
SECTION 11.2 ASSIGNMENTS AND PARTICIPATIONS
(a) Each Revolving Credit Lender may sell, transfer, negotiate or
assign to one or more Eligible Assignees all or a portion of its rights and
obligations hereunder (including all of its rights and obligations with respect
to the Revolving Loans, the Swing Loans and the Letters of Credit); provided,
however, that (i) if any such assignment shall be of the assigning Revolving
Credit Lender's Revolving Credit Outstandings and Revolving Credit Commitments,
such assignment shall cover the same percentage of such Revolving Credit
Lender's Revolving Credit Outstandings and Revolving Credit Commitments, (ii)
the aggregate amount being assigned pursuant to each such assignment (determined
as of the date of the Assignment and Acceptance with respect to such assignment)
shall in no event (if less than the assignor's entire interest) be less than
$5,000,000 or an integral multiple of $1,000,000 in excess thereof, except, in
either case, (A) with the consent of the Borrower and the Administrative Agent
or (B) if such assignment is being made to a Lender or an Affiliate or Approved
Fund of such Lender and (iii) if such Eligible Assignee is not, prior to the
date of such assignment, a Lender or an Affiliate or Approved Fund of a Lender,
such assignment shall be subject to the prior consent of the Administrative
Agent and the Borrower (which consents shall not be unreasonably withheld or
delayed); and provided, further, that, notwithstanding any other provision of
this Section 11.2, the consent of the Borrower shall not be required (x) for any
assignment occurring when any Event of Default shall have occurred and be
continuing and (y) for any assignment by any Affiliate of the Administrative
Agent made within 15 Business Days after the Closing Date of its Revolving
Credit Commitment held on the Closing Date.
(b) The parties to each such assignment shall execute and deliver to
the Administrative Agent, for its acceptance and recording in the Register, an
Assignment and Acceptance, together with any Revolving Credit Note (if the
assigning Revolving Credit Lender's Loans are evidenced by a Revolving Credit
Note) subject to such assignment. Upon the execution, delivery, acceptance and
recording in the Register of any Assignment and Acceptance
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and, other than in respect of assignments made pursuant to Section 2.17
(Substitution of Lenders) and Section 11.1(c) (Amendments, Waivers, Etc.), the
receipt by the Administrative Agent from the assignee of an assignment fee in
the amount of $3,500 from and after the effective date specified in such
Assignment and Acceptance, (i) the assignee thereunder shall become a party
hereto and, to the extent that rights and obligations under the Loan Documents
have been assigned to such assignee pursuant to such Assignment and Acceptance,
have the rights and obligations of a Revolving Credit Lender and, if such
Revolving Credit Lender were an Issuer, of such Issuer hereunder and thereunder,
(ii) the Revolving Credit Notes (if any) corresponding to the Loans assigned
thereby shall be transferred to such assignee by notation in the Register and
(iii) the assignor thereunder shall, to the extent that rights and obligations
under this Agreement have been assigned by it pursuant to such Assignment and
Acceptance, relinquish its rights (except for those surviving the payment in
full of the Obligations) and be released from its obligations under the Loan
Documents, other than those relating to events or circumstances occurring prior
to such assignment (and, in the case of an Assignment and Acceptance covering
all or the remaining portion of an assigning Revolving Credit Lender's rights
and obligations under the Loan Documents, such Revolving Credit Lender shall
cease to be a party hereto).
(c) The Administrative Agent shall maintain at its address referred to
in Section 11.8 (Notices, Etc.) a copy of each Assignment and Acceptance
delivered to and accepted by it and shall record in the Register the names and
addresses of the Lenders and Issuers and the principal amount of the Loans and
Reimbursement Obligations owing to each Lender from time to time and the
Revolving Credit Commitments of each Lender. Any assignment pursuant to this
Section 11.2 shall not be effective until such assignment is recorded in the
Register.
(d) Upon its receipt of an Assignment and Acceptance executed by an
assigning Revolving Credit Lender and an assignee, the Administrative Agent
shall, if such Assignment and Acceptance has been completed, (i) accept such
Assignment and Acceptance, (ii) record or cause to be recorded the information
contained therein in the Register and (iii) give prompt notice thereof to the
Borrower. Within five Business Days after its receipt of such notice, the
Borrower, at its own expense, shall, if requested by such assignee, execute and
deliver to the Administrative Agent, new Revolving Credit Notes to the order of
such assignee in an amount equal to the Revolving Credit Commitments assumed by
it pursuant to such Assignment and Acceptance and, if the assigning Revolving
Credit Lender has surrendered any Revolving Credit Note for exchange in
connection with the assignment and has retained Revolving Credit Commitments
hereunder, new Revolving Credit Notes to the order of the assigning Revolving
Credit Lender in an amount equal to the Revolving Credit Commitments retained by
it hereunder. Such new Revolving Credit Notes shall be dated the same date as
the surrendered Revolving Credit Notes and be in substantially the form of
Exhibit B (Form of Revolving Credit Note).
(e) In addition to the other assignment rights provided in this
Section 11.2, each Revolving Credit Lender may do each of the following:
(i) grant to a Special Purpose Vehicle the option to make all or
any part of any Loan that such Revolving Credit Lender would otherwise be
required to make hereunder and the exercise of such option by any such
Special Purpose Vehicle and the making of Loans pursuant thereto shall
satisfy (once and to the extent that such Loans are made) the obligation of
such Revolving Credit Lender to make such Loans thereunder, provided,
however, that (x) nothing herein shall constitute a commitment or an offer
to commit by such a Special Purpose Vehicle to make Loans hereunder and no
such Special Purpose Vehicle shall be liable for any indemnity or other
Obligation (other than the
109
making of Loans for which such Special Purpose Vehicle shall have exercised
an option, and then only in accordance with the relevant option agreement)
and (y) such Lender's obligations under the Loan Documents shall remain
unchanged, such Lender shall remain responsible to the other parties for
the performance of its obligations under the terms of this Agreement and
shall remain the holder of the Obligations for all purposes hereunder; and
(ii) assign, as collateral or otherwise, any of its rights under
this Agreement, whether now owned or hereafter acquired (including rights
to payments of principal or interest on the Loans), to (A) without notice
to or consent of the Administrative Agent or the Borrower, any Federal
Reserve Bank (pursuant to Regulation A of the Federal Reserve Board) and
(B) without consent of the Administrative Agent or the Borrower, (1) any
holder of, or trustee for the benefit of, the holders of such Revolving
Credit Lender's Securities and (2) any Special Purpose Vehicle to which
such Revolving Credit Lender has granted an option pursuant to clause (i)
above;
provided, however, that no such assignment or grant shall release such Revolving
Credit Lender from any of its obligations hereunder except as expressly provided
in clause (i) above and except, in the case of a subsequent foreclosure pursuant
to an assignment as collateral, if such foreclosure is made in compliance with
the other provisions of this Section 11.2 other than this clause (e) or clause
(f) below. Each party hereto acknowledges and agrees that, prior to the date
that is one year and one day after the payment in full of all outstanding
commercial paper or other senior debt of any such Special Purpose Vehicle, such
party shall not institute against, or join any other Person in instituting
against, any Special Purpose Vehicle that has been granted an option pursuant to
this clause (e) any bankruptcy, reorganization, insolvency or liquidation
proceeding (such agreement shall survive the payment in full of the
Obligations). The terms of the designation of, or assignment to, such Special
Purpose Vehicle shall not restrict such Lender's ability to, or grant such
Special Purpose Vehicle the right to, consent to any amendment or waiver to this
Agreement or any other Loan Document or to the departure by the Borrower from
any provision of this Agreement or any other Loan Document without the consent
of such Special Purpose Vehicle except, as long as the Administrative Agent and
the Lenders, Issuers and other Secured Parties shall continue to, and shall be
entitled to continue to, deal solely and directly with such Lender in connection
with such Lender's obligations under this Agreement, to the extent any such
consent would reduce the principal amount of, or the rate of interest on, any
Obligations, amend this clause (e) or postpone any scheduled date of payment of
such principal or interest. Each Special Purpose Vehicle shall be entitled to
the benefits of Sections 2.15 (Capital Adequacy) and 2.16 (Taxes) and of Section
2.14(d) (Illegality) as if it were such Lender; provided, however, that anything
herein to the contrary notwithstanding, no Borrower shall, at any time, be
obligated to make under Section 2.15 (Capital Adequacy), 2.16 (Taxes) or 2.14(d)
(Illegality) to any such Special Purpose Vehicle and any such Lender any payment
in excess of the amount the Borrower would have been obligated to pay to such
Lender in respect of such interest if such Special Purpose Vehicle had not been
assigned the rights of such Lender hereunder; and provided, further, that such
Special Purpose Vehicle shall have no direct right to enforce any of the terms
of this Agreement against the Borrower, the Administrative Agent or the other
Lenders.
(f) Each Lender may sell participations to one or more Persons in or
to all or a portion of its rights and obligations under the Loan Documents
(including all its rights and
110
obligations with respect to the Revolving Loans and Letters of Credit). The
terms of such participation shall not, in any event, require the participant's
consent to any amendments, waivers or other modifications of any provision of
any Loan Documents, the consent to any departure by any Loan Party therefrom, or
to the exercising or refraining from exercising any powers or rights such Lender
may have under or in respect of the Loan Documents (including the right to
enforce the obligations of the Loan Parties), except if any such amendment,
waiver or other modification or consent would (i) reduce the amount, or postpone
any date fixed for, any amount (whether of principal, interest or fees) payable
to such participant under the Loan Documents, to which such participant would
otherwise be entitled under such participation or (ii) result in the release of
all or substantially all of the Collateral other than in accordance with Section
10.8(b) (Concerning the Collateral and the Collateral Documents). In the event
of the sale of any participation by any Lender, (w) such Lender's obligations
under the Loan Documents shall remain unchanged, (x) such Lender shall remain
solely responsible to the other parties for the performance of such obligations,
(y) such Lender shall remain the holder of such Obligations for all purposes of
this Agreement and (z) the Borrower, the Administrative Agent and the other
Lenders shall continue to deal solely and directly with such Lender in
connection with such Lender's rights and obligations under this Agreement. Each
participant shall be entitled to the benefits of Sections 2.15 (Capital
Adequacy) and 2.16 (Taxes) and of Section 2.14(d) (Illegality) as if it were a
Lender; provided, however, that anything herein to the contrary notwithstanding,
the Borrower shall not, at any time, be obligated to make under Section 2.15
(Capital Adequacy), 2.16 (Taxes) or 2.14(d) (Illegality) to the participants in
the rights and obligations of any Lender (together with such Lender) any payment
in excess of the amount the Borrower would have been obligated to pay to such
Lender in respect of such interest had such participation not been sold and
provided, further, that such participant in the rights and obligations of such
Lender shall have no direct right to enforce any of the terms of this Agreement
against the Borrower, the Administrative Agent or the other Lenders.
(g) Any Issuer may at any time assign its rights and obligations
hereunder to any other Lender by an instrument in form and substance
satisfactory to the Borrower, the Administrative Agent, such Issuer and such
Lender, subject to the provisions of Section 2.7(c) (Evidence of Debt) relating
to notations of transfer in the Register. If any Issuer ceases to be a Lender
hereunder by virtue of any assignment made pursuant to this Section 11.2, then,
as of the effective date of such cessation, such Issuer's obligations to Issue
Letters of Credit pursuant to Section 2.4 (Letters of Credit) shall terminate
and such Issuer shall be an Issuer hereunder only with respect to outstanding
Letters of Credit issued prior to such date.
SECTION 11.3 COSTS AND EXPENSES
(a) The Borrower agrees upon demand to pay, or reimburse the
Administrative Agent for, all of the Administrative Agent's reasonable internal
and external audit, legal, appraisal, valuation, filing, document duplication
and reproduction and investigation expenses and for all other reasonable
out-of-pocket costs and expenses of every type and nature (including the
reasonable fees, expenses and disbursements of the Administrative Agent's
counsel, Weil, Gotshal & ▇▇▇▇▇▇ LLP, local legal counsel, auditors, accountants,
appraisers, printers, insurance and environmental advisors, and other
consultants and agents) incurred by the Administrative Agent in connection with
any of the following: (i) the Administrative Agent's audit and investigation of
the Borrower and its Subsidiaries in connection with the preparation,
negotiation or execution of any Loan Document or the Administrative Agent's
periodic audits of the Borrower or any of its Subsidiaries, as the case may be,
permitted hereby, (ii) the preparation,
111
negotiation, execution or interpretation of this Agreement (including, without
limitation, the satisfaction or attempted satisfaction of any condition set
forth in Article III (Conditions to Loans and Letters of Credit)), any Loan
Document or any proposal letter or commitment letter issued in connection
therewith, or the making of the Loans hereunder, (iii) the creation, perfection
or protection of the Liens under any Loan Document (including any reasonable
fees, disbursements and expenses for local counsel in various jurisdictions),
(iv) the ongoing administration of this Agreement and the Loans, including
consultation with attorneys in connection therewith and with respect to the
Administrative Agent's rights and responsibilities hereunder and under the other
Loan Documents, (v) the protection, collection or enforcement of any Obligation
or the enforcement of any Loan Document, (vi) the commencement, defense or
intervention in any court proceeding relating in any way to the Obligations, any
Loan Party, any of the Borrower's Subsidiaries, the Acquisition, the Related
Documents, this Agreement or any other Loan Document, (vii) the response to, and
preparation for, any subpoena or request for document production with which the
Administrative Agent is served or deposition or other proceeding in which the
Administrative Agent is called to testify, in each case, relating in any way to
the Obligations, any Loan Party, any of the Borrower's Subsidiaries, the
Acquisition, the Related Documents, this Agreement or any other Loan Document or
(viii) any amendment, consent, waiver, assignment, restatement, or supplement to
any Loan Document or the preparation, negotiation and execution of the same.
(b) The Borrower further agrees to pay or reimburse the Administrative
Agent and each of the Lenders and Issuers upon demand for all out-of-pocket
costs and expenses, including reasonable attorneys' fees (including allocated
costs of internal counsel and costs of settlement), incurred by the
Administrative Agent, such Lenders or such Issuers in connection with any of the
following: (i) in enforcing any Loan Document or Obligation or any security
therefor or exercising or enforcing any other right or remedy available by
reason of an Event of Default, (ii) in connection with any refinancing or
restructuring of the credit arrangements provided hereunder in the nature of a
"work-out" or in any insolvency or bankruptcy proceeding, (iii) in commencing,
defending or intervening in any litigation or in filing a petition, complaint,
answer, motion or other pleadings in any legal proceeding relating to the
Obligations, any Loan Party, any of the Borrower's Subsidiaries and related to
or arising out of the transactions contemplated hereby or by any other Loan
Document or Related Document or (iv) in taking any other action in or with
respect to any suit or proceeding (bankruptcy or otherwise) described in clause
(i), (ii) or (iii) above.
SECTION 11.4 INDEMNITIES
(a) The Borrower agrees to indemnify and hold harmless the
Administrative Agent, the Arranger, each Lender and each Issuer (including each
Person obligated on a Hedging Contract that is a Loan Document if such Person
was a Lender or Issuer at the time of it entered into such Hedging Contract) and
each of their respective Affiliates, and each of the directors, officers,
employees, agents, trustees, representatives, attorneys, consultants and
advisors of or to any of the foregoing (including those retained in connection
with the satisfaction or attempted satisfaction of any condition set forth in
Article III (Conditions to Loans and Letters of Credit)) (each such Person being
an "Indemnitee") from and against any and all claims, damages, liabilities,
obligations, losses, penalties, actions, judgments, suits, costs, disbursements
and expenses, joint or several, of any kind or nature (including fees,
disbursements and expenses of financial advisors, and the reasonable fees,
disbursements and expenses of legal advisors, to any such Indemnitee) that may
be imposed on, incurred by or asserted against any such Indemnitee in
112
connection with or arising out of any investigation, litigation or proceeding,
whether or not such investigation, litigation or proceeding is brought by any
such Indemnitee or any of its directors, security holders or creditors or any
such Indemnitee, director, security holder or creditor is a party thereto,
whether direct, indirect, or consequential and whether based on any federal,
state or local law or other statutory regulation, securities or commercial law
or regulation, or under common law or in equity, or on contract, tort or
otherwise, in any manner relating to or arising out of this Agreement, any other
Loan Document, any Obligation, any Letter of Credit, any Disclosure Document,
any Related Document, or any act, event or transaction related or attendant to
any thereof, or the use or intended use of the proceeds of the Loans or Letters
of Credit or in connection with any investigation of any potential matter
covered hereby (collectively, the "Indemnified Matters"); provided, however,
that the Borrower shall not have any liability under this Section 11.4 to an
Indemnitee with respect to any Indemnified Matter that has resulted primarily
from the gross negligence or willful misconduct of that Indemnitee, as
determined by a court of competent jurisdiction in a final non-appealable
judgment or order. Without limiting the foregoing, "Indemnified Matters" include
(i) all Environmental Liabilities and Costs arising from or connected with the
past, present or future operations of the Borrower or any of its Subsidiaries
involving any property subject to a Collateral Document, or damage to real or
personal property or natural resources or harm or injury alleged to have
resulted from any Release of Contaminants on, upon or into such property or any
contiguous real estate, (ii) any costs or liabilities incurred in connection
with any Remedial Action concerning the Borrower or any of its Subsidiaries,
(iii) any costs or liabilities incurred in connection with any Environmental
Lien and (iv) any costs or liabilities incurred in connection with any other
matter under any Environmental Law, including the Comprehensive Environmental
Response, Compensation and Liability Act of 1980 (49 U.S.C. Section 9601 et
seq.) and applicable state property transfer laws, whether, with respect to any
such matter, such Indemnitee is a mortgagee pursuant to any leasehold mortgage,
a mortgagee in possession, the successor in interest to the Borrower or any of
its Subsidiaries, or the owner, lessee or operator of any property of the
Borrower or any of its Subsidiaries by virtue of foreclosure, except, with
respect to those matters referred to in clauses (i), (ii), (iii) and (iv) above,
to the extent (x) incurred following foreclosure by the Administrative Agent,
any Lender or any Issuer, or the Administrative Agent, any Lender or any Issuer
having become the successor in interest to the Borrower or any of its
Subsidiaries and (y) attributable solely to acts of the Administrative Agent,
such Lender or such Issuer or any agent on behalf of the Administrative Agent,
such Lender or such Issuer.
(b) The Borrower shall indemnify the Administrative Agent, the Lenders
and each Issuer for, and hold the Administrative Agent, the Lenders and each
Issuer harmless from and against, any and all claims for brokerage commissions,
fees and other compensation made against the Administrative Agent, the Lenders
and the Issuers for any broker, finder or consultant with respect to any
agreement, arrangement or understanding made by or on behalf of any Loan Party
or any of its Subsidiaries in connection with the transactions contemplated by
this Agreement.
(c) The Borrower, at the request of any Indemnitee, shall have the
obligation to defend against any investigation, litigation or proceeding or
requested Remedial Action, in each case contemplated in clause (a) above, and
the Borrower, in any event, may participate in the defense thereof with legal
counsel of the Borrower's choice. In the event that such Indemnitee requests the
Borrower to defend against such investigation, litigation or proceeding or
requested Remedial Action, the Borrower shall promptly do so and such Indemnitee
shall have the right to have legal counsel of its choice participate in such
defense. No action taken by legal
113
counsel chosen by such Indemnitee in defending against any such investigation,
litigation or proceeding or requested Remedial Action, shall vitiate or in any
way impair the Borrower's obligation and duty hereunder to indemnify and hold
harmless such Indemnitee.
(d) The Borrower agrees that any indemnification or other protection
provided to any Indemnitee pursuant to this Agreement (including pursuant to
this Section 11.4) or any other Loan Document shall (i) survive payment in full
of the Obligations and (ii) inure to the benefit of any Person that was at any
time an Indemnitee under this Agreement or any other Loan Document.
SECTION 11.5 LIMITATION OF LIABILITY
(a) The Borrower agrees that no Indemnitee shall have any liability
(whether in contract, tort or otherwise) to any Loan Party or any of their
respective Subsidiaries or any of their respective equity holders or creditors
for or in connection with the transactions contemplated hereby and in the other
Loan Documents and Related Documents, except to the extent such liability is
determined in a final non-appealable judgment by a court of competent
jurisdiction to have resulted primarily from such Indemnitee's gross negligence
or willful misconduct. In no event, however, shall any Indemnitee, the Borrower
or any Loan Parties be liable on any theory of liability for any special,
indirect, consequential or punitive damages (including, without limitation, any
loss of profits, business or anticipated savings). The Borrower hereby waives,
releases and agrees (each for itself and on behalf of its Subsidiaries) not to
▇▇▇ upon any such claim for any special, indirect, consequential or punitive
damages, whether or not accrued and whether or not known or suspected to exist
in its favor.
(b) IN NO EVENT SHALL ANY AGENT AFFILIATE HAVE ANY LIABILITY TO ANY
LOAN PARTY, LENDER, ISSUER OR ANY OTHER PERSON FOR DAMAGES OF ANY KIND,
INCLUDING DIRECT OR INDIRECT, SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES,
LOSSES OR EXPENSES (WHETHER IN TORT OR CONTRACT OR OTHERWISE) ARISING OUT OF ANY
LOAN PARTY OR ANY AGENT AFFILIATE'S TRANSMISSION OF APPROVED ELECTRONIC
COMMUNICATIONS THROUGH THE INTERNET OR ANY USE OF THE APPROVED ELECTRONIC
PLATFORM, EXCEPT TO THE EXTENT SUCH LIABILITY OF ANY AGENT AFFILIATE IS FOUND IN
A FINAL NON-APPEALABLE JUDGMENT BY A COURT OF COMPETENT JURISDICTION TO HAVE
RESULTED PRIMARILY FORM SUCH AGENT AFFILIATE'S GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT.
SECTION 11.6 RIGHT OF SET-OFF
Upon the occurrence and during the continuance of any Event of Default
each Lender and each Affiliate of a Lender is hereby authorized at any time and
from time to time, to the fullest extent permitted by law, to set off and apply
any and all deposits (general or special, time or demand, provisional or final)
at any time held and other Indebtedness at any time owing by such Lender or its
Affiliates to or for the credit or the account of the Borrower against any and
all of the Obligations now or hereafter existing whether or not such Lender
shall have made any demand under this Agreement or any other Loan Document and
even though such Obligations may be unmatured. Each Lender agrees promptly to
notify the Borrower after any such set-off and application made by such Lender
or its Affiliates; provided, however, that the failure to give such notice shall
not affect the validity of such set-off and application. The rights of each
Lender under this Section 11.6 are in addition to the other rights and remedies
(including other rights of set-off) that such Lender may have.
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SECTION 11.7 SHARING OF PAYMENTS, ETC.
(a) If any Revolving Credit Lender (directly or through an Affiliate
thereof) obtains any payment (whether voluntary, involuntary, through the
exercise of any right of set-off (including pursuant to Section 11.6 (Right of
Set-off) or otherwise) of the Loans owing to it, any interest thereon, fees in
respect thereof or amounts due pursuant to Section 11.3 (Costs and Expenses) or
11.4 (Indemnities) (other than payments pursuant to Sections 2.14 (Special
Provisions Governing Eurodollar Rate Loans), 2.15 (Capital Adequacy) or 2.16
(Taxes)) or otherwise receives any Collateral or any "Proceeds" (as defined in
the Pledge and Security Agreement) of Collateral (other than payments pursuant
to Sections 2.14 (Special Provisions Governing Eurodollar Rate Loans), 2.15
(Capital Adequacy) or 2.16 (Taxes)) (in each case, whether voluntary,
involuntary, through the exercise of any right of set-off or otherwise
(including pursuant to Section 11.6 (Right of Set-off)) in excess of its Ratable
Portion of all payments of such Obligations obtained by all the Revolving Credit
Lenders, such Revolving Credit Lender (a "Purchasing Lender") shall forthwith
purchase from the other Lenders (each, a "Selling Lender") such participations
in their Loans or other Obligations as shall be necessary to cause such
Purchasing Lender to share the excess payment ratably with each of them.
(b) If all or any portion of any payment received by a Purchasing
Lender is thereafter recovered from such Purchasing Lender, such purchase from
each Selling Lender shall be rescinded and such Selling Lender shall repay to
the Purchasing Lender the purchase price to the extent of such recovery together
with an amount equal to such Selling Lender's ratable share (according to the
proportion of (i) the amount of such Selling Lender's required repayment in
relation to (ii) the total amount so recovered from the Purchasing Lender) of
any interest or other amount paid or payable by the Purchasing Lender in respect
of the total amount so recovered.
(c) The Borrower agrees that any Purchasing Lender so purchasing a
participation from a Selling Lender pursuant to this Section 11.7 may, to the
fullest extent permitted by law, exercise all its rights of payment (including
the right of set-off) with respect to such participation as fully as if such
Lender were the direct creditor of the Borrower in the amount of such
participation.
SECTION 11.8 NOTICES, ETC.
(a) Addresses for Notices. All notices, demands, requests, consents
and other communications provided for in this Agreement shall be given in
writing, or by any telecommunication device capable of creating a written record
(including electronic mail), and addressed to the party to be notified as
follows:
(i) if to the Borrower:
WCI Steel, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Attention: Chief Financial Officer
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
E-Mail Address: ▇▇▇▇▇▇@▇▇▇▇▇▇▇▇.▇▇▇
with a copy to
115
▇▇▇▇▇▇▇▇▇ Will & ▇▇▇▇▇
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Telecopy no: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
(ii) if to any Revolving Credit Lender, at its Domestic Lending
Office specified opposite its name on Schedule II (Applicable Lending
Offices and Addresses for Notices) or on the signature page of any
applicable Assignment and Acceptance;
(iii) if to any Issuer, at the address set forth under its name
on Schedule II (Applicable Lending Offices and Addresses for Notices); and
(iv) if to the Administrative Agent or the Swing Loan Lender:
CITICORP USA, INC.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇
Telecopy no: (▇▇▇) ▇▇▇-▇▇▇▇
E-Mail Address: ▇▇▇▇▇.▇▇▇▇▇@▇▇▇▇▇▇▇▇▇.▇▇▇
with a copy to:
WEIL, GOTSHAL & ▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
Telecopy no: (▇▇▇) ▇▇▇-▇▇▇▇
E-Mail Address: ▇▇▇▇▇▇▇.▇▇▇▇▇▇▇▇@▇▇▇▇.▇▇▇
or at such other address as shall be notified in writing (x) in the case of the
Borrower, the Administrative Agent and the Swing Loan Lender, to the other
parties and (y) in the case of all other parties, to the Borrower and the
Administrative Agent.
(b) Effectiveness of Notices. All notices, demands, requests, consents
and other communications described in clause (a) above shall be effective (i) if
delivered by hand, including any overnight courier service, upon personal
delivery, (ii) if delivered by mail, when deposited in the mails, (iii) if
delivered by posting to an Approved Electronic Platform, an Internet website or
a similar telecommunication device requiring that a user have prior access to
such Approved Electronic Platform, website or other device (to the extent
permitted by Section 10.3 (Posting of Approved Electronic Communications) to be
delivered thereunder), when such notice, demand, request, consent and other
communication shall have been made generally available on such Approved
Electronic Platform, Internet website or similar device to the class of Person
being notified (regardless of whether any such Person must accomplish, and
whether or not any such Person shall have accomplished, any action prior to
obtaining access to such items, including registration, disclosure of contact
information, compliance with a standard user agreement or undertaking a duty of
confidentiality) and such Person has been notified that such
116
communication has been posted to the Approved Electronic Platform and (iv) if
delivered by electronic mail or any other telecommunications device, when
transmitted to an electronic mail address (or by another means of electronic
delivery) as provided in clause (a) above; provided, however, that notices and
communications to the Administrative Agent pursuant to Article II (The Facility)
or X (The Administrative Agent) shall not be effective until received by the
Administrative Agent.
(c) Use of Electronic Platform. Notwithstanding clauses (a) and (b)
above (unless the Administrative Agent requests that the provisions of clause
(a) and (b) above be followed) and any other provision in this Agreement or any
other Loan Document providing for the delivery of, any Approved Electronic
Communication by any other means, the Loan Parties shall deliver all Approved
Electronic Communications to the Administrative Agent by properly transmitting
such Approved Electronic Communications electronically (in a format acceptable
to the Administrative Agent) to ▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇.▇▇▇ or such other
electronic mail address (or similar means of electronic delivery) as the
Administrative Agent may notify the Borrower. Nothing in this clause (c) shall
prejudice the right of the Administrative Agent or any Lender or Issuer to
deliver any Approved Electronic Communication to any Loan Party in any manner
authorized in this Agreement.
SECTION 11.9 NO WAIVER; REMEDIES
No failure on the part of any Lender, Issuer or the Administrative
Agent to exercise, and no delay in exercising, any right hereunder shall operate
as a waiver thereof; nor shall any single or partial exercise of any such right
preclude any other or further exercise thereof or the exercise of any other
right. The remedies herein provided are cumulative and not exclusive of any
remedies provided by law.
SECTION 11.10 BINDING EFFECT
This Agreement shall become effective when it shall have been executed
by the Borrower and the Administrative Agent and when the Administrative Agent
shall have been notified by each Lender and Issuer that such Lender or Issuer
has executed it and thereafter shall be binding upon and inure solely to the
benefit of the Borrower, the Administrative Agent and each Lender and Issuer
and, in each case, their respective successors and assigns; provided, however,
that the Borrower shall not have the right to assign its rights hereunder or any
interest herein without the prior written consent of the Lenders.
SECTION 11.11 GOVERNING LAW
This Agreement and the rights and obligations of the parties hereto
shall be governed by, and construed and interpreted in accordance with, the law
of the State of New York.
SECTION 11.12 SUBMISSION TO JURISDICTION; SERVICE OF PROCESS
(a) Any legal action or proceeding with respect to this Agreement or
any other Loan Document may be brought in the courts of the State of New York
located in the City of New York or of the United States of America for the
Southern District of New York, and, by execution and delivery of this Agreement,
the Borrower hereby accepts for itself and in respect of its property, generally
and unconditionally, the jurisdiction of the aforesaid courts. The parties
hereto hereby irrevocably waive any objection, including any objection to the
laying of venue or
117
based on the grounds of forum non conveniens, that any of them may now or
hereafter have to the bringing of any such action or proceeding in such
respective jurisdictions.
(b) Nothing contained in this Section 11.12 shall affect the right of
the Administrative Agent or any Lender to serve process in any other manner
permitted by law or commence legal proceedings or otherwise proceed against the
Borrower or any other Loan Party in any other jurisdiction.
(c) If for the purposes of obtaining judgment in any court it is
necessary to convert a sum due hereunder in Dollars into another currency, the
parties hereto agree, to the fullest extent that they may effectively do so,
that the rate of exchange used shall be that at which in accordance with normal
banking procedures the Administrative Agent could purchase Dollars with such
other currency at the spot rate of exchange quoted by the Administrative Agent
at 11:00 a.m. (New York time) on the Business Day preceding that on which final
judgment is given, for the purchase of Dollars, for delivery two Business Days
thereafter.
SECTION 11.13 WAIVER OF JURY TRIAL
EACH OF THE ADMINISTRATIVE AGENT, THE LENDERS, THE ISSUERS AND THE
BORROWER IRREVOCABLY WAIVES TRIAL BY JURY IN ANY ACTION OR PROCEEDING WITH
RESPECT TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT.
SECTION 11.14 MARSHALING; PAYMENTS SET ASIDE
None of the Administrative Agent, any Lender or any Issuer shall be
under any obligation to marshal any assets in favor of the Borrower or any other
party or against or in payment of any or all of the Obligations. To the extent
that the Borrower makes a payment or payments to the Administrative Agent, the
Lenders or the Issuers or any such Person receives payment from the proceeds of
the Collateral or exercise their rights of setoff, and such payment or payments
or the proceeds of such enforcement or setoff or any part thereof are
subsequently invalidated, declared to be fraudulent or preferential, set aside
or required to be repaid to a trustee, receiver or any other party, then to the
extent of such recovery, the obligation or part thereof originally intended to
be satisfied, and all Liens, right and remedies therefor, shall be revived and
continued in full force and effect as if such payment had not been made or such
enforcement or setoff had not occurred.
SECTION 11.15 SECTION TITLES
The section titles contained in this Agreement are and shall be
without substantive meaning or content of any kind whatsoever and are not a part
of the agreement between the parties hereto, except when used to reference a
section. Any reference to the number of a clause, sub-clause or subsection
hereof immediately followed by a reference in parenthesis to the title of the
Section containing such clause, sub-clause or subsection is a reference to such
clause, sub-clause or subsection and not to the entire Section; provided,
however, that, in case of direct conflict between the reference to the title and
the reference to the number of such Section, the reference to the title shall
govern absent manifest error. If any reference to the number of a Section (but
not to any clause, sub-clause or subsection thereof) is followed immediately by
a reference in parenthesis to the title of a Section, the title reference shall
govern in case of direct conflict absent manifest error.
118
SECTION 11.16 EXECUTION IN COUNTERPARTS
This Agreement may be executed in any number of counterparts and by
different parties in separate counterparts, each of which when so executed shall
be deemed to be an original and all of which taken together shall constitute one
and the same agreement. Signature pages may be detached from multiple separate
counterparts and attached to a single counterpart so that all signature pages
are attached to the same document. Delivery of an executed signature page of
this Agreement by facsimile transmission, electronic mail or by posting on the
Approved Electronic Platform shall be as effective as delivery of a manually
executed counterpart hereof. A set of the copies of this Agreement signed by all
parties shall be lodged with the Borrower and the Administrative Agent.
SECTION 11.17 ENTIRE AGREEMENT
This Agreement, together with all of the other Loan Documents and all
certificates and documents delivered hereunder or thereunder, embodies the
entire agreement of the parties and supersedes all prior agreements and
understandings relating to the subject matter hereof. In the event of any
conflict between the terms of this Agreement and any other Loan Document, the
terms of this Agreement shall govern.
SECTION 11.18 CONFIDENTIALITY
Each Lender and the Administrative Agent agree to use all reasonable
efforts to keep information obtained by it pursuant hereto and the other Loan
Documents confidential in accordance with such Lender's or the Administrative
Agent's, as the case may be, customary practices and agrees that it shall not
disclose any such information other than (a) to such Lender's or the
Administrative Agent's, as the case may be, Affiliates, and each of their
respective employees, representatives and agents that are or are expected to be
involved in the evaluation of such information in connection with the
transactions contemplated by this Agreement and are advised of the confidential
nature of such information, (b) to the extent such information presently is or
hereafter becomes available to such Lender or the Administrative Agent, as the
case may be, on a non-confidential basis from a source other than Holdings, the
Borrower or any other Loan Party, (c) to the extent disclosure is required by
law, regulation or judicial order or requested or required by bank regulators or
auditors or (d) to current or prospective assignees, participants and Special
Purpose Vehicle grantees of any option described in Section 11.2(e) (Assignments
and Participations), contractual counterparties in any Hedging Contract
permitted hereunder and to their respective legal or financial advisors, in each
case and to the extent such assignees, participants, grantees or counterparties
agree to be bound by, and to cause their advisors to comply with, the provisions
of this Section 11.18. Notwithstanding any other provision in this Agreement,
the Administrative Agent hereby agrees that the Borrower (and each of its
officers, directors, employees, accountants, attorneys and other advisors) may
disclose to any and all persons, without limitation of any kind, the U.S. tax
treatment and U.S. tax structure of the Facility and the transactions
contemplated hereby and all materials of any kind (including opinions and other
tax analyses) that are provided to it relating to such U.S. tax treatment and
U.S. tax structure.
SECTION 11.19 PATRIOT ACT NOTICE.
Each Lender subject to the Patriot Act hereby notifies the Borrower
that, pursuant to Section 326 of the Patriot Act, it is required to obtain,
verify and record information
119
that identifies the Borrower, including the name and address of the Borrower and
other information that will allow such Lender to identify the Borrower in
accordance with the Patriot Act.
[SIGNATURE PAGES FOLLOW]
120
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their respective officers thereunto duly authorized, as of the
date first above written.
WCI STEEL ACQUISITION, INC.,
as Borrower
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇
Title: President
CITICORP USA, INC.,
as Administrative Agent, Swing Loan
Lender and Lender
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇
Title: Director/Vice President
CITIBANK, N.A.,
as Issuer
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇
Title: Director/Vice President
[SIGNATURE PAGE TO WCI CREDIT AGREEMENT]
Other Lenders:
BANK OF AMERICA, N.A.
as Lender
By: /s/ ▇▇▇▇▇▇▇▇ ▇. Gabni
------------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. Gabni
Title: Senior Vice President
[SIGNATURE PAGE TO WCI CREDIT AGREEMENT]
THE CIT GROUP/BUSINESS CREDIT, INC.
as Lender
By: /s/ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Title: Assistant Vice President
[SIGNATURE PAGE TO WCI CREDIT AGREEMENT]
JPMORGAN CHASE BANK, N.A.
as Lender
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
[SIGNATURE PAGE TO WCI CREDIT AGREEMENT]
LASALLE BUSINESS CREDIT, LLC
as Lender
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Senior Vice President
[SIGNATURE PAGE TO WCI CREDIT AGREEMENT]
▇▇▇▇▇ FARGO BANK, N.A.
as Lender
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President
[SIGNATURE PAGE TO WCI CREDIT AGREEMENT]
TABLE OF CONTENTS
Article I Definitions, Interpretation And Accounting Terms............... 2
Section 1.1 Defined Terms........................................... 2
Section 1.2 Computation of Time Periods............................. 34
Section 1.3 Accounting Terms and Principles......................... 34
Section 1.4 Conversion of Foreign Currencies........................ 34
Section 1.5 Certain Terms........................................... 35
Article II The Facility.................................................. 35
Section 2.1 The Revolving Credit Commitments........................ 35
Section 2.2 Borrowing Procedures.................................... 36
Section 2.3 Swing Loans............................................. 37
Section 2.4 Letters of Credit....................................... 39
Section 2.5 Reduction and Termination of the Revolving Credit
Commitments............................................. 43
Section 2.6 Repayment of Loans...................................... 43
Section 2.7 Evidence of Debt........................................ 44
Section 2.8 Optional Prepayments.................................... 45
Section 2.9 Mandatory Prepayments................................... 45
Section 2.10 Interest................................................ 46
Section 2.11 Conversion/Continuation Option.......................... 47
Section 2.12 Fees.................................................... 48
Section 2.13 Payments and Computations............................... 49
Section 2.14 Special Provisions Governing Eurodollar Rate Loans...... 51
Section 2.15 Capital Adequacy........................................ 53
Section 2.16 Taxes................................................... 54
Section 2.17 Substitution of Lenders................................. 56
Article III Conditions to Loans and Letters of Credit.................... 58
Section 3.1 Conditions Precedent to Initial Loans and Letters of
Credit.................................................. 58
Section 3.2 Conditions Precedent to Each Loan and Letter of Credit.. 62
Section 3.3 Determinations of Initial Borrowing Conditions.......... 64
Article IV Representations and Warranties................................ 64
Section 4.1 Corporate Existence; Compliance with Law................ 64
Section 4.2 Corporate Power; Authorization; Enforceable
Obligations............................................. 65
TABLE OF CONTENTS
(CONTINUED)
Section 4.3 Ownership of Borrower; Subsidiaries..................... 65
Section 4.4 Financial Statements.................................... 66
Section 4.5 Material Adverse Change................................. 67
Section 4.6 Solvency................................................ 67
Section 4.7 Litigation.............................................. 67
Section 4.8 Taxes................................................... 67
Section 4.9 Full Disclosure......................................... 68
Section 4.10 Margin Regulations...................................... 68
Section 4.11 No Burdensome Restrictions; No Defaults................. 68
Section 4.12 Investment Company Act; Public Utility Holding Company
Act..................................................... 69
Section 4.13 Use of Proceeds......................................... 69
Section 4.14 Insurance............................................... 69
Section 4.15 Labor Matters........................................... 69
Section 4.16 ERISA................................................... 70
Section 4.17 Environmental Matters................................... 70
Section 4.18 Intellectual Property................................... 71
Section 4.19 Title; Real Property.................................... 71
Section 4.20 Related Documents....................................... 72
Article V Financial Covenants............................................ 73
Section 5.1 Minimum Fixed Charge Coverage Ratio..................... 73
Section 5.2 Adjusted Available Credit............................... 73
Section 5.3 Capital Expenditures.................................... 74
Article VI Reporting Covenants........................................... 74
Section 6.1 Financial Statements.................................... 75
Section 6.2 Default Notices......................................... 77
Section 6.3 Litigation.............................................. 77
Section 6.4 Asset Sales............................................. 77
Section 6.5 Notices under Related Documents......................... 77
Section 6.6 SEC Filings; Press Releases............................. 77
Section 6.7 Labor Relations......................................... 78
Section 6.8 Tax Returns............................................. 78
ii
TABLE OF CONTENTS
(CONTINUED)
Section 6.9 Insurance............................................... 78
Section 6.10 ERISA Matters........................................... 78
Section 6.11 Environmental Matters................................... 79
Section 6.12 Borrowing Base Determination............................ 79
Section 6.13 Contractual Obligations................................. 82
Section 6.14 Tax Reporting........................................... 82
Section 6.15 Other Information....................................... 82
Article VII Affirmative Covenants........................................ 82
Section 7.1 Preservation of Corporate Existence, Etc................ 82
Section 7.2 Compliance with Laws, Etc............................... 82
Section 7.3 Conduct of Business..................................... 82
Section 7.4 Payment of Taxes, Etc................................... 83
Section 7.5 Maintenance of Insurance................................ 83
Section 7.6 Access.................................................. 83
Section 7.7 Keeping of Books........................................ 83
Section 7.8 Maintenance of Properties, Etc.......................... 84
Section 7.9 Application of Proceeds................................. 84
Section 7.10 Environmental........................................... 84
Section 7.11 Additional Collateral and Guaranties.................... 84
Section 7.12 Control Accounts; Approved Deposit Accounts............. 85
Section 7.13 Landlord Waivers and Bailee's Letters................... 87
Section 7.14 Real Property........................................... 87
Article VIII Negative Covenants.......................................... 88
Section 8.1 Indebtedness............................................ 88
Section 8.2 Liens, Etc.............................................. 89
Section 8.3 Investments............................................. 90
Section 8.4 Sale of Assets.......................................... 91
Section 8.5 Restricted Payments..................................... 92
Section 8.6 Prepayment and Cancellation of Indebtedness............. 92
Section 8.7 Restriction on Fundamental Changes...................... 93
Section 8.8 Change in Nature of Business............................ 93
iii
TABLE OF CONTENTS
(CONTINUED)
Section 8.9 Transactions with Affiliates............................ 93
Section 8.10 Limitations on Restrictions on Subsidiary Distributions;
No New Negative Pledge.................................. 94
Section 8.11 Modification of Constituent Documents................... 94
Section 8.12 Modification of Related Documents....................... 94
Section 8.13 Modification of Debt Agreements......................... 94
Section 8.14 Accounting Changes; Fiscal Year......................... 95
Section 8.15 Margin Regulations...................................... 95
Section 8.16 Operating Leases; Sale/Leasebacks....................... 95
Section 8.17 No Speculative Transactions............................. 95
Section 8.18 Compliance with ERISA................................... 95
Section 8.19 Environmental........................................... 96
Section 8.20 Payments to the Collateral Trust........................ 96
Article IX Events of Default............................................. 96
Section 9.1 Events of Default....................................... 96
Section 9.2 Remedies................................................ 98
Section 9.3 Actions in Respect of Letters of Credit................. 98
Section 9.4 Rescission.............................................. 99
Article X The Administrative Agent....................................... 99
Section 10.1 Authorization and Action................................ 99
Section 10.2 Administrative Agent's Reliance, Etc.................... 100
Section 10.3 Posting of Approved Electronic Communications........... 101
Section 10.4 The Administrative Agent Individually................... 102
Section 10.5 Lender Credit Decision.................................. 102
Section 10.6 Indemnification......................................... 102
Section 10.7 Successor Administrative Agent.......................... 103
Section 10.8 Concerning the Collateral and the Collateral Documents.. 103
Section 10.9 Collateral Matters Relating to Related Obligations...... 104
Article XI Miscellaneous................................................. 105
Section 11.1 Amendments, Waivers, Etc................................ 105
Section 11.2 Assignments and Participations.......................... 108
Section 11.3 Costs and Expenses...................................... 111
iv
TABLE OF CONTENTS
(CONTINUED)
Section 11.4 Indemnities............................................. 112
Section 11.5 Limitation of Liability................................. 113
Section 11.6 Right of Set-off........................................ 114
Section 11.7 Sharing of Payments, Etc................................ 114
Section 11.8 Notices, Etc............................................ 115
Section 11.9 No Waiver; Remedies..................................... 117
Section 11.10 Binding Effect.......................................... 117
Section 11.11 Governing Law........................................... 117
Section 11.12 Submission to Jurisdiction; Service of Process.......... 117
Section 11.13 Waiver of Jury Trial.................................... 118
Section 11.14 Marshaling; Payments Set Aside.......................... 118
Section 11.15 Section Titles.......................................... 118
Section 11.16 Execution in Counterparts............................... 118
Section 11.17 Entire Agreement........................................ 118
Section 11.18 Confidentiality......................................... 119
Section 11.19 Patriot Act Notice...................................... 119
v
TABLE OF CONTENTS
(CONTINUED)
SCHEDULES
Schedule I - Revolving Credit Commitments
Schedule II - Applicable Lending Offices and Addresses for Notices
Schedule 4.2 - Consents
Schedule 4.3 - Ownership of Borrower, Subsidiaries
Schedule 4.4 - Financial Statements
Schedule 4.7 - Litigation
Schedule 4.15 - Labor Matters
Schedule 4.16 - List of Plans
Schedule 4.17 - Environmental Matters
Schedule 4.19 - Real Property
Schedule 8.1 - Existing Indebtedness
Schedule 8.2 - Existing Liens
Schedule 8.3 - Existing Investments
EXHIBITS
Exhibit A - Form of Assignment and Acceptance
Exhibit B - Form of Revolving Credit Note
Exhibit C - Form of Notice of Borrowing
Exhibit D - Form of Swing Loan Request
Exhibit E - Form of Letter of Credit Request
Exhibit F - Form of Notice of Conversion or Continuation
Exhibit G - Form of Opinion of Counsel for the Loan Parties
Exhibit H - Form of Guaranty
Exhibit I - Form of Pledge and Security Agreement
Exhibit J - Form of Borrowing Base Certificate
Exhibit K - Form of Intercreditor Agreement
Exhibit L - Form of Indenture Collateral Intercreditor Agreement
Exhibit M - Form of Collateral Access Agreement
vi
SCHEDULE I
REVOLVING CREDIT COMMITMENTS
LENDER COMMITMENT AMOUNT ALLOCATION
------ ----------------- --------------
Citicorp USA, Inc. $150,000,000.00 $30,000,000.00
Bank of America, N.A. $ 30,000,000.00 $24,000,000.00
CIT Group $ 30,000,000.00 $24,000,000.00
JPMorgan Chase Bank, N.A. $ 35,000,000.00 $24,000,000.00
LaSalle Business Credit, LLC $ 30,000,000.00 $24,000,000.00
▇▇▇▇▇ Fargo Foothill, LLC $ 30,000,000.00 $24,000,000.00
SCHEDULE II
APPLICABLE LENDING OFFICES AND ADDRESSES FOR NOTICES
LENDER DOMESTIC LENDING OFFICE EURODOLLAR LENDING OFFICE
------ -------------------------------- --------------------------------
Citicorp USA, Inc. Two Penns Way, ▇▇▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇ (▇▇▇) ▇▇▇-▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇ (fax) (▇▇▇) ▇▇▇-▇▇▇▇ (fax)
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇ Attn: ▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇
Bank of America, N.A. ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇ (▇▇▇) ▇▇▇-▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇ (fax) (▇▇▇) ▇▇▇-▇▇▇▇ (fax)
Attn: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Attn: ▇▇▇ ▇▇▇▇▇▇▇
CIT Group ▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ floor ▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇ (▇▇▇) ▇▇▇-▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇ (fax) (▇▇▇) ▇▇▇-▇▇▇▇ (fax)
Attn: ▇▇▇▇ ▇▇▇▇▇▇▇▇ Attn: ▇▇▇▇ ▇▇▇▇▇▇▇▇
JPMorgan Chase Bank, N.A. ▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇; IL1-1190 ▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇; ▇▇▇-▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇-▇▇▇-▇▇▇▇ ▇▇▇-▇▇▇-▇▇▇▇
▇▇▇-▇▇▇-▇▇▇▇ (fax) ▇▇▇-▇▇▇-▇▇▇▇ (fax)
Attn: ▇▇ ▇. ▇▇▇▇▇▇▇▇ Attn: ▇▇ ▇. ▇▇▇▇▇▇▇▇
LaSalle Business Credit, LLC ▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇ ▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇ (▇▇▇) ▇▇▇-▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇ (fax) (▇▇▇) ▇▇▇-▇▇▇▇ (fax)
Attn: ▇▇▇▇▇ ▇▇▇▇▇ Attn: ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ Fargo Foothill, LLC ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ 2450 Colorado Avenue
Suite ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇ (▇▇▇) ▇▇▇-▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇ (fax) (▇▇▇) ▇▇▇-▇▇▇▇ (fax)
Attn: ▇▇▇ ▇▇▇▇▇ Attn: ▇▇▇ ▇▇▇▇▇
SCHEDULE 4.2
CONSENTS
None.
SCHEDULE 4.3
OWNERSHIP OF SUBSIDIARIES
PRE-EFFECTIVE DATE
NO. OF SHARES OF NO. OF SHARES OF NO. OF OUTSTANDING PERCENTAGE OF
JURISDICTION OF EACH CLASS OF STOCK OUTSTANDING SHARES OF STOCK OUTSTANDING SHARES
SUBSIDIARY NAME ORGANIZATION STOCK AUTHORIZED ON THE CLOSING DATE OWNED BY BORROWER OWNED BY BORROWER
--------------- --------------- ---------------- ------------------- ------------------ -----------------------
WCI Steel Sales Delaware N/A N/A N/A Limited Partnership 99%
Acquisition, L.P. held by WCI Production
Control as General
Partner and 1% held by
WCI Metallurgical as
Limited Partner
WCI Steel Delaware 1,000 1,000 1,000 100
Metallurgical Services .0001 par value
Acquisition, Inc.
WCI Steel Production Delaware 1,000 1,000 1,000 100
Control Sales .0001 par value
Acquisition, Inc.
Youngstown Sinter Delaware 1,000 1,000 1,000 100
Acquisition Company .0001 par value
POST-EFFECTIVE DATE
NO. OF SHARES OF NO. OF SHARES OF NO. OF OUTSTANDING PERCENTAGE OF
JURISDICTION OF EACH CLASS OF STOCK OUTSTANDING SHARES OF STOCK OUTSTANDING SHARES
SUBSIDIARY NAME ORGANIZATION STOCK AUTHORIZED ON THE CLOSING DATE OWNED BY BORROWER OWNED BY BORROWER
--------------- --------------- ---------------- ------------------- ------------------ -----------------------
WCI Steel Sales Delaware N/A N/A N/A Limited Partnership 99%
Acquisition, L.P. held by WCI Production
Control as General
Partner and 1% held by
WCI Metallurgical as
Limited Partner
WCI Steel Delaware 1,000 1,000 1,000 100
cMetallurgical Services .0001 par value
Acquisition, Inc.
WCI Steel Delaware 1,000 1,000 1,000 100
Production Control Sales .0001 par value
Acquisition, Inc.
Youngstown Sinter Delaware 1,000 1,000 1,000 100
Acquisition Company .0001 par value
SCHEDULE 4.4
FINANCIAL STATEMENTS
None.
SCHEDULE 4.7
LITIGATION
- Thirty-six individual cases where employees have been denied relief under
Ohio's Worker's Compensation program now seek relief in civil court.
- Incident on the Union Pacific Railroad on August 15, 2005, resulting in a
derailment near ▇▇▇▇ Junction, Wyoming. Railroad alleges that the
Borrower's shipment was improperly loaded in railcar NS168598.
- See Schedule 4.17
SCHEDULE 4.15
LABOR MATTERS
- Collective Bargaining Agreement by and between the Borrower and United
Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied,
Industrial and Service Workers International Union, dated April 30, 2006.
- Deferred Compensation Agreements have been executed by and between the
Borrower and the parties listed below in the form previously delivered to
the Creditors, which shall be effective upon each such employee's start of
employment with the Borrower:
▇.▇. ▇▇▇▇▇▇▇▇
▇. ▇. ▇▇▇▇▇▇▇▇
▇. ▇. ▇▇▇▇▇▇▇
▇. ▇. ▇▇▇▇▇▇
▇. ▇. ▇▇▇▇▇▇
M. A. ▇▇▇▇▇
▇. ▇. ▇▇▇▇▇▇▇
▇. ▇. ▇▇▇▇▇▇
D. E. O'Bruba
▇. ▇. ▇▇▇▇▇▇▇
▇. ▇. ▇▇▇▇▇▇
▇. ▇. ▇▇▇▇
▇. ▇. ▇▇▇▇▇▇▇▇
▇. ▇. ▇▇▇▇▇
▇. ▇. ▇▇▇▇▇
- Employment Agreements will be executed by and between the Borrower and each
of the executive officers of the Borrower listed below in the form
previously delivered to the Creditors on such terms as are currently being
determined by the Compensation Committee of the Board of Directors of the
Borrower.
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ President and Chief Executive Officer
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Vice President - Business Development
▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Vice President - Commercial
▇▇▇▇▇▇▇ ▇▇▇▇▇ Vice President - Finance, Chief Financial Officer, Treasurer
and Secretary
SCHEDULE 4.16
LIST OF PLANS
- WCI Steel, Inc., United Steel, Paper and Forestry, Rubber, Manufacturing,
Energy, Allied, Industrial and Service Workers International Union (the
"USW") Defined Benefit Plan (new plan of the Borrower).
- IRC 501(c)(9) Agreement of Trust for ▇▇▇▇▇▇ Consolidated Industries, Inc.
(assumed).
- Program of Insurance Benefits for Hourly Paid Employees and Non-Exempt
Salaried Employees of the Borrower (new plan).
- ▇▇▇▇▇▇ Consolidated Industries, Inc. Disability Income Benefits Plan (new
mirror plan).
- ▇▇▇▇▇▇ Consolidated Industries, Inc. Supplemental Unemployment Benefit Plan
(new mirror plan).
- WCI Steel Incorporated USW 401(k) Plan.
- WCI Steel, Inc. Voluntary Benefit Plan (assumed).
- WCI Steel, Inc. Retirement and Capital Accumulation Plan (assumed).
- WCI Steel, Inc. Salaried Employee Welfare Plan (assumed).
- WCI Steel, Inc. Flexible Spending Accounts: Health Care Account; Dependent
Care Account (assumed).
SCHEDULE 4.17
ENVIRONMENTAL MATTERS
1. U.S. EPA issued a unilateral administrative order to the Borrower pursuant
to Section 7003 of RCRA, with an effective date of September 24, 2002 and
amended January 21, 2003 ("Order"). The Order asserts that the Borrower's
handling of solid waste in various impoundment areas presents an "imminent
and substantial endangerment" to health or the environment by virtue of
potential harm to wildlife, including migratory birds. The Order requires
the Borrower, among other things, to (a) take immediate measures to deter
and discourage wildlife from landing on or entering the areas, (b) remove
all oily wastes from the impoundments, (c) remove all remaining oily sludge
from the banks and bottoms of the impoundments, and (d) permanently cease
managing oil wastes in the impoundments. RCRA provides for civil penalties
of up to $5,500 per day, increased to $6,500 per day after March 14, 2004,
for noncompliance with the Order. In written comments, the Borrower raised
several concerns, objected to both the issuance of the Order and its scope,
and submitted a draft work plan setting forth a number of activities that
the Borrower considers reasonably necessary to ▇▇▇▇▇ any alleged
endangerment. The Borrower has largely completed implementation of the
activities initially proposed, including elimination of most of the
identified areas, and is continuing to implement various deterrent measures
at the remaining two impoundment areas (both of which are integral
components of the Borrower's current operations). The U.S. EPA informed the
Borrower in 2003 that it believes the Borrower has not complied with the
Order; the United States filed a Proof of Claim in the bankruptcy
proceedings in an amount not exceeding $5,838,000 with respect to alleged
accruing civil penalties, to which an Objection was filed. The Borrower is
engaged in discussions with U.S. EPA and the Department of Justice
regarding possible resolution of the compliance issues raised by U.S. EPA
under the Order.
2. On March 3, 2004, the United States Fish & Wildlife ("USFWS") served the
Borrower with Violation Notices alleging that the Borrower violated Section
703(a) of the Migratory Bird Treaty Act ("MBTA"). The Violation Notices set
forth 31 counts of unlawful "taking" of migratory birds, a misdemeanor. On
April 16, 2004, the Borrower entered a plea of "not guilty." Among other
things, the Borrower argued that the "taking" provisions of the MBTA did
not extend to accidental bird deaths resulting from manufacturing
operations. The trial was held in September 2004, but the Magistrate Judge
has not yet rendered a verdict. On August 17, 2004, USFWS served additional
Violation Notices similarly alleging that the Borrower violated the MBTA as
a result of an incident that occurred in May 2002. The Borrower pled "not
guilty" in this separate proceeding, which the Magistrate Judge stayed
pending the outcome of the case that was tried.
3. The Borrower is currently subject to the Iron & Steel Manufacturing NESHAP
(40 C.F.R. Part 63, Subpart FFFFF), which - upon the compliance date -
imposes new Maximum Achievable Control Technology ("MACT") standards for
the reduction of hazardous air pollutants ("HAPs") from specified processes
at the facility, including the Basic Oxygen Furnace process ("BOF") and
certain ancillary operations within the BOF building. Because the Iron &
Steel NESHAP imposes a new opacity standard on fugitive emissions from the
BOF building, the Borrower determined that installation of a new fume
evacuation system on the BOF vessels was required, consisting of hooding
over the vessels during tapping and charging to capture those emissions and
evacuation to a new baghouse. The approximate cost for achieving compliance
with the Iron & Steel NESHAP is $25 million. The compliance
date was May 22, 2006; however, the Borrower applied for and received an
extension until April 30, 2007. The Company also investigated the
possibility of seeking a modification to its emission limits under the
current permit. At the present time, the Company expects to address the BOF
MACT compliance requirements by reducing total plant emissions under its
existing air emission control permit so as not to be categorized as a major
source, thereby avoiding application of those requirements to the WCI
facility. The Company's permit would include restrictions on the hours of
BOF operations that are consistent with both current levels and those in
the recent past. It would also entail the burning of natural gas rather
than coal in a boiler at an expected additional cost of $5 million per
year. Alternatively, that boiler may be equipped with a scrubber that is
expected to cost about $10 million. The Company plans to install such a
scrubber within the next 18 months. The Company also expects to obtain the
necessary permit restrictions by the May 22, 2006 deadline.
SCHEDULE 4.19
REAL PROPERTY
- Approximately 1,100 acres of owned real property generally known as ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇.▇., ▇▇▇▇▇▇, ▇▇▇▇. Such property is owned by the Borrower and
other occupants of the property include WCI Steel Production Control
Services Acquisition, Inc., WCI Steel Metallurgical Services Acquisition,
Inc., and WCI Steel Sales Acquisition, L.P. The Warren property is subject
to a lease to Air Reduction Company, notice of which is recorded in the
Trumbull County Records in Vol. 74, Page 229.
- Approximately 56 acres of owned real property generally known as ▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇. Such property is owned by Youngstown
Sinter Acquisition Company. There are no lessees.
SCHEDULE 8.1
EXISTING INDEBTEDNESS
Current indebtedness:
- $5,800,000 repayment of state taxes over 6 years at the Federal Annual Rate
of interest.
Asserted Class 3 Secured Claims:
OBJECTION ASSERTED ESTIMATED
NAME FILED AMOUNT RECOVERY NATURE OF CLAIM
---- --------- ----------- --------- ----------------------------
▇.▇. ▇▇▇▇▇ LUMBER COMPANY Yes $ 9,453.16 zero ACCOUNT PAYABLE
AFCO CREDIT CORP. Yes $587,904.31 zero ACCOUNT PAYABLE
BANK OF AMERICA LEASING & CAPITAL LLC Yes $ 70,009.00 zero PERSONAL PROPERTY LEASES
CADLEROCK JOINT VENTURE, L.P. Yes $396,697.08 zero PERSONAL PROPERTY LEASES
CADLEROCK JOINT VENTURE, L.P. Yes $139,983.58 zero PERSONAL PROPERTY LEASES
CATERPILLAR FINANCIAL SERVICES Yes $160,339.00 zero PERSONAL PROPERTY LEASES
CATERPILLAR FINANCIAL SERVICES Yes $ 2,841.00 zero PERSONAL PROPERTY LEASES
CATERPILLAR FINANCIAL SERVICES CORP. Yes Unknown zero ACCOUNT PAYABLE
▇ ▇ ▇▇▇▇▇▇▇▇ TRUST Yes $ 16,377.50 zero PERSONAL PROPERTY LEASES
DAIMLER CHRYSLER CORPORATION Yes $343,135.67 zero ACCOUNT RECEIVABLE
FOSECO METALLURGICAL, INC. Yes $ 18,206.40 zero ACCOUNT PAYABLE
ISG ▇▇▇▇▇▇ INC Yes $602,023.84 zero ACCOUNT PAYABLE
MELLON US LEASING Yes $128,192.00 zero PERSONAL PROPERTY LEASES
MELLON US LEASING Yes $118,757.00 zero PERSONAL PROPERTY LEASES
MINTEQ INTERNATIONAL INC Yes $227,811.66 zero ACCOUNT PAYABLE
MOCHA HOUSE Yes $ 160.40 zero ACCOUNT PAYABLE
SOUTH CAROLINA DEPARTMENT OF REVENUE $ 800.00 zero TAX - INCOME AND FRANCHISE
SOUTH CAROLINA DEPARTMENT OF REVENUE $ 1,269.80 zero TAX - INCOME AND FRANCHISE
SOUTH CAROLINA DEPARTMENT OF REVENUE $ 194.61 zero TAX - INCOME AND FRANCHISE
TRUCK ELECTRIC SERVICE CO Yes $ 24,126.47 zero ACCOUNT PAYABLE
TRUMBULL COUNTY TREASURER Yes $407,015.78 zero TAX - REAL/PERSONAL PROPERTY
TRUMBULL INDUSTRIES, INC. Yes $ 47,252.06 zero ACCOUNT PAYABLE
Real Property Taxes:
Youngstown Property: ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Parcel no. 53-094-0-156.01-Total due: $9,917.75
Mahoning County Property: ▇▇▇▇ ▇▇▇▇ ▇▇▇., ▇.▇., ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Parcel no. 39-543650 - Total due: $644.12
Parcel no. 43-313500 - Total due: $38,825.41
Parcel no. 45-193215 - Total due: $241.13
Parcel no. 38-848600 - Total due: $241.23
Parcel no. 39-543700 - Total due: $2,492.76
Parcel no. 43-313700 - Total due: $13,905.44
Parcel no. 45-193220 - Total due: $37.54
Parcel no. 38-864140 - Total due: $56,732.68
Parcel no. 39-543450 - Total due: $23.20
Parcel no. 43-313400 - Total due: $11,672.63
Parcel no. 45-193210 - Total due: $922.97
Parcel no. 38-848200 - Total due: $771.78
Parcel no. 28-901850 - Total due: $237.27
Parcel no. 28-901340 - Total due: $9,740.00
Parcel no. 21-900922 - Total due: $1,304.79
Parcel no. 39-543400 - Total due: $60,749.34
Parcel no. 41-645000 - Total due: $272.98
Parcel no. 45-193200 - Total due: $136.54
Parcel no. 45-193230 - Total due: $21.49
Parcel no. 29-000500 - Total due: $42,480.56
Parcel no. 43-312900 - Total due: $175,479.75
Parcel no. 45-193205 - Total due: $127.57
Parcel no. 39-003086 - Total due: $56,732.68
Parcel no. 38-848000 - Total due: $49.73
Parcel no. 41-644800 - Total due: $591.01
Parcel no. 45-193100 - Total due: $35.10
Parcel no. 45-193225 - Total due: $87.93
Parcel no. 29-000450 - Total due: $354.48
Parcel no. 28-901341 - Total due: $17.30
Parcel no. 28-694800 - Total due: $150,984.14
Parcel no. 21-155130 - Total due: $691.84
SCHEDULE 8.1(I)
LETTERS OF CREDIT
DATE EXPIRATION
ISSUER L/C NO. BENEFICIARY AMOUNT ISSUED DATE
------ ---------- ----------------------------------- ----------- ------- ----------
Wachovia Bank, N.A. 516024P Ohio EPA $5,5000,000 2/1/99 8/31/06
Wachovia Bank, N.A. 517378P Indemnity Insurance Co. of Na $ 11,784.52 2/1/99 8/31/06
Wachovia Bank, N.A. SM 410328P Pacific Employers Insurance Co. $ 199,000 8/31/06
Wachovia Bank, N.A. SM 417004P National Union Fire Insurance Corp. $ 60,000 5/29/01 5/31/06
SCHEDULE 8.2
EXISTING LIENS
Asserted Class 3 Secured Claims:
OBJECTION ASSERTED ESTIMATED
NAME FILED AMOUNT RECOVERY NATURE OF CLAIM
---- --------- ----------- --------- ----------------------------
▇.▇. ▇▇▇▇▇ LUMBER COMPANY Yes $ 9,453.16 zero ACCOUNT PAYABLE
AFCO CREDIT CORP. Yes $587,904.31 zero ACCOUNT PAYABLE
BANK OF AMERICA LEASING & CAPITAL LLC Yes $ 70,009.00 zero PERSONAL PROPERTY LEASES
CADLEROCK JOINT VENTURE, L.P. Yes $396,697.08 zero PERSONAL PROPERTY LEASES
CADLEROCK JOINT VENTURE, L.P. Yes $139,983.58 zero PERSONAL PROPERTY LEASES
CATERPILLAR FINANCIAL SERVICES Yes $160,339.00 zero PERSONAL PROPERTY LEASES
CATERPILLAR FINANCIAL SERVICES Yes $ 2,841.00 zero PERSONAL PROPERTY LEASES
CATERPILLAR FINANCIAL SERVICES CORP. Yes Unknown zero ACCOUNT PAYABLE
▇ ▇ ▇▇▇▇▇▇▇▇ TRUST Yes $ 16,377.50 zero PERSONAL PROPERTY LEASES
DAIMLER CHRYSLER CORPORATION Yes $343,135.67 zero ACCOUNT RECEIVABLE
FOSECO METALLURGICAL, INC. Yes $ 18,206.40 zero ACCOUNT PAYABLE
ISG ▇▇▇▇▇▇ INC Yes $602,023.84 zero ACCOUNT PAYABLE
MELLON US LEASING Yes $128,192.00 zero PERSONAL PROPERTY LEASES
MELLON US LEASING Yes $118,757.00 zero PERSONAL PROPERTY LEASES
MINTEQ INTERNATIONAL INC Yes $227,811.66 zero ACCOUNT PAYABLE
MOCHA HOUSE Yes $ 160.40 zero ACCOUNT PAYABLE
SOUTH CAROLINA DEPARTMENT OF REVENUE $ 800.00 zero TAX - INCOME AND FRANCHISE
SOUTH CAROLINA DEPARTMENT OF REVENUE $ 1,269.80 zero TAX - INCOME AND FRANCHISE
SOUTH CAROLINA DEPARTMENT OF REVENUE $ 194.61 zero TAX - INCOME AND FRANCHISE
TRUCK ELECTRIC SERVICE CO Yes $ 24,126.47 zero ACCOUNT PAYABLE
TRUMBULL COUNTY TREASURER Yes $407,015.78 zero TAX - REAL/PERSONAL PROPERTY
TRUMBULL INDUSTRIES, INC. Yes $ 47,252.06 zero ACCOUNT PAYABLE
Real Property Taxes:
Youngstown Property: ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Parcel no. 53-094-0-156.01 - Total due: $9,917.75
Mahoning County Property: ▇▇▇▇ ▇▇▇▇ ▇▇▇., ▇.▇., ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Parcel no. 39-543650 - Total due: $644.12
Parcel no. 43-313500 - Total due: $38,825.41
Parcel no. 45-193215 - Total due: $241.13
Parcel no. 38-848600 - Total due: $241.23
Parcel no. 39-543700 - Total due: $2,492.76
Parcel no. 43-313700 - Total due: $13,905.44
Parcel no. 45-193220 - Total due: $37.54
Parcel no. 38-864140 - Total due: $56,732.68
Parcel no. 39-543450 - Total due: $23.20
Parcel no. 43-313400 - Total due: $11,672.63
Parcel no. 45-193210 - Total due: $922.97
Parcel no. 38-848200 - Total due: $771.78
Parcel no. 28-901850 - Total due: $237.27
Parcel no. 28-901340 - Total due: $9,740.00
Parcel no. 21-900922 - Total due: $1,304.79
Parcel no. 39-543400 - Total due: $60,749.34
Parcel no. 41-645000 - Total due: $272.98
Parcel no. 45-193200 - Total due: $136.54
Parcel no. 45-193230 - Total due: $21.49
Parcel no. 29-000500 - Total due: $42,480.56
Parcel no. 43-312900 - Total due: $175,479.75
Parcel no. 45-193205 - Total due: $127.57
Parcel no. 39-003086 - Total due: $56,732.68
Parcel no. 38-848000 - Total due: $49.73
Parcel no. 41-644800 - Total due: $591.01
Parcel no. 45-193100 - Total due: $35.10
Parcel no. 45-193225 - Total due: $87.93
Parcel no. 29-000450 - Total due: $354.48
Parcel no. 28-901341 - Total due: $17.30
Parcel no. 28-694800 - Total due: $150,984.14
Parcel no. 21-155130 - Total due: $691.84
SCHEDULE 8.3
EXISTING INVESTMENTS
None.
EXHIBIT A
TO CREDIT AGREEMENT
FORM OF ASSIGNMENT AND ACCEPTANCE
ASSIGNMENT AND ACCEPTANCE, dated as of _________ __, ____ (this
"Assignment and Acceptance") (between [NAME OF ASSIGNOR] (the "Assignor") and
[NAME OF ASSIGNEE] (the "Assignee").
Reference is made to the Credit Agreement, dated as of May 1, 2006 (as
the same may be amended, restated, supplemented or otherwise modified from time
to time, the "Credit Agreement"), among WCI Steel Acquisition, Inc., a Delaware
corporation (the "Borrower"), the Lenders and Issuers party thereto and Citicorp
USA, Inc., as agent for the Lenders and Issuers (in such capacity, the
"Administrative Agent"). Capitalized terms used herein and not otherwise defined
herein are used herein as defined in the Credit Agreement.
The Assignor and the Assignee hereby agree as follows:
1. As of the Effective Date (as defined below), the Assignor hereby sells and
assigns to the Assignee, and the Assignee hereby purchases and assumes from
the Assignor, all of the Assignor's rights and obligations under the Credit
Agreement to the extent related to the amounts and percentages specified in
Section 1 of Schedule I hereto.
2. The Assignor (a) represents and warrants that (i) it is the legal and
beneficial owner of the interest being assigned by it hereunder and that
such interest is free and clear of any adverse claim and (ii) it has full
power and authority, and has taken all actions necessary, to execute and
deliver this Assignment and Acceptance and to consummate the transactions
contemplated hereby, (b) makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or
representations made in or in connection with the Credit Agreement or any
other Loan Document or any other instrument or document furnished pursuant
thereto or the execution, legality, validity, enforceability, genuineness,
sufficiency or value of the Credit Agreement or any other Loan Document,
any other instrument or document furnished pursuant thereto or any
collateral thereunder, (c) makes no representation or warranty and assumes
no responsibility with respect to the financial condition of any Loan Party
or the performance or observance by any Loan Party of any of its
obligations under the Credit Agreement or any other Loan Document or any
other instrument or document furnished pursuant thereto and (iv) attaches
the Revolving Credit Note(s), if any, held by the Assignor and requests
that the Administrative Agent exchange such Note(s) for a new Note or Notes
in accordance with Section 11.2(e)(Assignments and Participations) of the
Credit Agreement.
3. The Assignee (a) agrees that it will, independently and without reliance
upon the Administrative Agent, the Assignor or any other Revolving Credit
Lender and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in
taking or not taking action under the Credit Agreement, (b) appoints and
authorizes the Administrative Agent to take such action as agent on its
behalf and to exercise such powers under the Credit Agreement and the other
Loan Documents as are delegated to the Administrative Agent by the terms
thereof, together with such powers as are reasonably incidental thereto,
(c) agrees that it will perform in
A-1
accordance with their terms all of the obligations that, by the terms of
the Credit Agreement, are required to be performed by it as a Lender, (d)
represents and warrants that it (i) is an Eligible Assignee and (ii) has
full power and authority, and has taken all actions necessary, to execute
and deliver this Assignment and Acceptance and to consummate the
transactions contemplated hereby, (e) confirms it has received such
documents and information as it has deemed appropriate to make its own
credit analysis and decision to enter into this Assignment and Acceptance,
(f) specifies as its Domestic Lending Office (and address for notices) and
Eurodollar Lending Office the offices set forth beneath its name on the
signature pages hereof and (g) if applicable, attaches two properly
completed Forms ▇-▇▇▇▇, ▇-▇▇▇▇ or successor or form prescribed by the
Internal Revenue Service of the United States, certifying that such
Assignee is entitled to receive all payments under the Credit Agreement and
the Notes payable to it without deduction or withholding of any United
States federal income taxes.
4. Following the execution of this Assignment and Acceptance by the Assignor
and the Assignee, it will be delivered to the Administrative Agent
(together with an assignment fee in the amount of $3,500 payable by the
Assignee to the Administrative Agent if required pursuant to Section
11.2(b)(Assignments and Participations)) for acceptance and recording by
the Administrative Agent. The effective date of this Assignment and
Acceptance shall be the effective date specified in Section 2 of Schedule I
hereto (the "Effective Date").
5. Upon such acceptance and recording by the Administrative Agent, then, as of
the Effective Date, (a) the Assignee shall be a party to the Credit
Agreement and, to the extent provided in this Assignment and Acceptance,
have the rights and obligations under the Credit Agreement of a Lender and,
if such Lender were an Issuer, of such Issuer and (b) the Assignor shall,
to the extent provided in this Assignment and Acceptance, relinquish its
rights (except those surviving the payment in full of the Obligations) and
be released from its obligations under the Loan Documents other than those
relating to events or circumstances occurring prior to the Effective Date.
6. Upon such acceptance and recording by the Administrative Agent, from and
after the Effective Date, the Administrative Agent shall make all payments
under the Loan Documents in respect of the interest assigned hereby (a) to
the Assignee, in the case of amounts accrued with respect to any period on
or after the Effective Date, and (b) to the Assignor, in the case of
amounts accrued with respect to any period prior to the Effective Date.
7. This Assignment and Acceptance shall be governed by, and be construed and
interpreted in accordance with, the law of the State of New York.
8. This Assignment and Acceptance may be executed in any number of
counterparts and by different parties on separate counterparts, each of
which when so executed shall be deemed to be an original and all of which
taken together shall constitute but one and the same agreement. Delivery of
an executed counterpart of this Assignment and Acceptance by telecopier
shall be effective as delivery of a manually executed counterpart of this
Assignment and Acceptance.
[SIGNATURE PAGES FOLLOW]
A-2
IN WITNESS WHEREOF, the parties hereto
have caused this Assignment and
Acceptance to be executed by their
respective officers thereunto duly
authorized, as of the date first above
written.
[NAME OF ASSIGNOR],
as Assignor
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
[NAME OF ASSIGNEE],
as Assignee
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Domestic Lending Office (and address for
notices):
------------------------------
----------------------------------------
[Insert Address (including contact name,
fax number and e-mail address)]
Eurodollar Lending Office:
-------------
----------------------------------------
[Insert Address (including contact name,
fax number and e-mail address)]
[SIGNATURE PAGE TO ASSIGNMENT AND ACCEPTANCE]
ACCEPTED AND AGREED
this __ day of ______ _____:
CITICORP USA, INC.,
as Administrative Agent
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
WCI STEEL ACQUISITION, INC.,
as Borrower
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
[SIGNATURE PAGE TO ASSIGNMENT AND ACCEPTANCE]
SCHEDULE I
TO
ASSIGNMENT AND ACCEPTANCE
SECTION 1.
RATABLE PORTION OF REVOLVING CREDIT FACILITY ASSIGNED TO ASSIGNEE: _____________%
REVOLVING CREDIT COMMITMENT ASSIGNED TO ASSIGNEE: $____________
AGGREGATE OUTSTANDING PRINCIPAL AMOUNT OF REVOLVING LOANS ASSIGNED TO ASSIGNEE: $____________
SECTION 2.
EFFECTIVE DATE: _______ __, ____
A-6
EXHIBIT B
FORM OF REVOLVING CREDIT NOTE
Lender: [NAME OF LENDER] New York, New York
Principal Amount: [$___________] [May 1], 2006
FOR VALUE RECEIVED, the undersigned, WCI STEEL ACQUISITION, INC., a
Delaware corporation (the "Borrower"), hereby promises to pay to the order of
the Lender set forth above (the "Lender") for the account of its applicable
lending office, at Citicorp USA, Inc., as Administrative Agent, for the benefit
of the Lender, at ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, the Principal
Amount set forth above, or, if less, the aggregate unpaid principal amount of
all Revolving Loans (as defined in the Credit Agreement referred to below) of
the Lender to the Borrower, payable at such times, and in such amounts, as are
specified in the Credit Agreement.
The Borrower promises to pay interest on the unpaid principal amount
of the Revolving Loans from the date made until such Principal Amount is paid in
full, at such interest rates, and payable at such times, as are specified in the
Credit Agreement. Both principal and interest are payable in Dollars in
immediately available funds.
This Note is one of the Revolving Credit Notes referred to in, and is
entitled to the benefits of, the Credit Agreement, dated as of May __, 2006 (as
the same may be amended, restated, supplemented or otherwise modified from time
to time, the "Credit Agreement"), among the Borrower, the Lenders and Issuers
party thereto and Citicorp USA, Inc., as agent for the Lenders and Issuers.
Capitalized terms used herein and not defined herein are used herein as defined
in the Credit Agreement.
The Credit Agreement, among other things, (a) provides for the making
of Revolving Loans by the Lender to the Borrower in an aggregate amount not to
exceed at any time outstanding the Principal Amount set forth above, the
indebtedness of the Borrower resulting from such Revolving Loans being evidenced
by this Note and (b) contains provisions for acceleration of the maturity of the
unpaid principal amount of this Note upon the happening of certain stated events
and also for prepayments on account of the principal hereof prior to the
maturity hereof upon the terms and conditions therein specified.
This Note is entitled to the benefits of the Guaranty and is secured
as provided in the Collateral Documents.
Demand, diligence, presentment, protest and notice of non-payment and
protest are hereby waived by the Borrower.
This Note shall be governed by, and construed and interpreted in
accordance with, the laws of the State of New York.
[SIGNATURE PAGE FOLLOWS]
B-2-1
IN WITNESS WHEREOF, the Borrower has caused this Note to be executed
and delivered by its duly authorized officer as of the day and year and at the
place set forth above.
WCI STEEL ACQUISITION, INC.
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
[SIGNATURE PAGE TO REVOLVING CREDIT NOTE]
Exhibit C
Form of Notice of Borrowing
_________ __, 20__
CITICORP USA, INC.,
as Administrative Agent under the
Credit Agreement referred to below
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇
Re: WCI STEEL ACQUISITION, INC. (the "Borrower")
Reference is made to the Credit Agreement, dated as of May 1, 2006 (as
the same may be amended, restated, supplemented or otherwise modified from time
to time, the "Credit Agreement"), among the Borrower, the Lenders and Issuers
party thereto and Citicorp USA, Inc., as agent for the Lenders and Issuers.
Capitalized terms used herein and not otherwise defined herein are used herein
as defined in the Credit Agreement.
The Borrower hereby gives you notice, irrevocably, pursuant to Section
2.2 (Borrowing Procedures) of the Credit Agreement that the undersigned hereby
requests a Borrowing under the Credit Agreement and, in connection therewith,
sets forth below the information relating to such Borrowing (the "Proposed
Borrowing") as required by Section 2.2 (Borrowing Procedures) of the Credit
Agreement:
A. The date of the Proposed Borrowing is ________, 200__ (the "Funding
Date").
B. The aggregate amount of the Borrowing is $_________, of which
amount [$____________ consists of Base Rate Loans] [and $___________
consists of Eurodollar Rate Loans having an initial Interest Period of
[one] [two] [three] [six] month[s]].
C. [After giving effect to the Proposed Borrowing, the Available
Credit amount is $________.]
The undersigned hereby certifies that the following statements are
true on the date hereof and shall be true on the Funding Date both before and
after giving effect to the Proposed Borrowing and to the application of the
proceeds therefrom:
A. the representations and warranties set forth in Article IV
(Representations and Warranties) of the Credit Agreement and the other Loan
Documents are true and correct in all material respects on and as of the
Funding Date with the same effect as though made on and as of such date,
except to the extent such representations and warranties expressly relate
to an earlier date, in which case such representations and warranties shall
have been true and correct in all material respects as of such date; and
B. no Default or Event of Default has occurred and is continuing on
the Funding Date.
C-3
[Signature page follows]
C-2
WCI STEEL ACQUISITION, INC.
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
C-3
Exhibit D
Form of Swing Loan Request
_________ __, 20__
CITICORP USA, INC.,
as Administrative Agent under the
Credit Agreement referred to below
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇
Re: WCI STEEL ACQUISITION, INC. (the "Borrower")
Reference is made to the Credit Agreement, dated as of May 1, 2006 (as
the same may be amended, restated, supplemented or otherwise modified from time
to time, the "Credit Agreement"), among the Borrower, the Lenders and Issuers
party thereto and Citicorp USA, Inc., as agent for the Lenders and Issuers.
Capitalized terms used herein and not otherwise defined herein are used herein
as defined in the Credit Agreement.
The Borrower hereby gives you notice, irrevocably, pursuant to Section
2.3 (Swing Loans) of the Credit Agreement that the undersigned hereby requests
that the Swing Loan Lender make Swing Loans available to the Borrower under the
Credit Agreement and, in that connection therewith, sets forth below the
information relating to such Swing Loans (the "Proposed Advance") as required by
Section 2.3 (Swing Loans) of the Credit Agreement:
C. The date of the Proposed Advance is ________ __, ____ (the "Funding
Date").
D. The aggregate amount of the Proposed Advance is $____________.
The undersigned hereby certifies that the following statements are
true on the date hereof and shall be true on the Funding Date both before and
after giving effect to the Proposed Advance and to the application of the
proceeds therefrom:
E. the representations and warranties set forth in Article IV
(Representations and Warranties) of the Credit Agreement and the other Loan
Documents are true and correct in all material respects on and as of the
Funding Date with the same effect as though made on and as of such date,
except to the extent such representations and warranties expressly relate
to an earlier date, in which case such representations and warranties shall
have been true and correct in all material respects as of such date; and
F. no Default or Event of Default has occurred and is continuing on
the Funding Date.
[SIGNATURE PAGE FOLLOWS]
D-1
WCI STEEL ACQUISITION, INC.
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
[SIGNATURE PAGE TO SWING LOAN REQUEST]
EXHIBIT E
FORM OF LETTER OF CREDIT REQUEST
_________ __, ____
[NAME OF ISSUER], as an Issuer
under the Credit Agreement referred
to below
CITICORP USA, INC.,
as Administrative Agent under the
Credit Agreement referred to below
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇
Re: WCI STEEL ACQUISITION, INC.(the "Borrower")
Reference is made to the Credit Agreement, dated as of May 1, 2006 (as
the same may be amended, restated, supplemented or otherwise modified from time
to time, the "Credit Agreement"), among the Borrower, the Lenders and Issuers
party thereto and Citicorp USA, Inc., as agent for the Lenders and Issuers.
Capitalized terms used herein and not otherwise defined in this Letter of Credit
Request are used herein as defined in the Credit Agreement.
The Borrower hereby gives you notice, irrevocably, pursuant to Section
2.4(c) (Letters of Credit) of the Credit Agreement that the undersigned requests
the issuance of a Letter of Credit by [Name of Issuer] in the form of a
[standby] [documentary] letter of credit for the benefit of [Name of
Beneficiary], in the amount of [$________], to be issued on ______ __, ____ (the
"Issue Date") and having an expiration date of _______ __, ____.
The form of the requested Letter of Credit is attached hereto.
The undersigned hereby certifies that the following statements are
true on the date hereof and shall be true on the Issue Date both before and
after giving effect thereto:
(a) the representations and warranties set forth in Article IV
(Representations and Warranties) of the Credit Agreement and the other Loan
Documents are true and correct in all material respects on and as of the
Issue Date with the same effect as though made on and as of such date,
except to the extent such representations and warranties expressly relate
to an earlier date, in which case such representations and warranties shall
have been true and correct in all material respects as of such date; and
(b) no Default or Event of Default has occurred and is continuing on
the Issue Date.
[SIGNATURE PAGE FOLLOWS]
E-1
WCI STEEL ACQUISITION, INC.
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
[FORM OF NOTICE OF CONVERSION/CONTINUATION]
EXHIBIT F
FORM OF NOTICE OF CONVERSION/CONTINUATION
_________ __, ____
CITICORP USA, INC.,
as Administrative Agent under the
Credit Agreement referred to below
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇
Re: WCI STEEL ACQUISTION, INC. (the "Borrower")
Reference is made to the Credit Agreement, dated as of May 1, 2006 (as
the same may be amended, restated, supplemented or otherwise modified from time
to time, the "Credit Agreement"), among the Borrower, the Lenders and Issuers
party thereto and Citicorp USA, Inc., as agent for the Lenders and Issuers.
Capitalized terms used herein and not otherwise defined herein are used herein
as defined in the Credit Agreement.
The Borrower hereby gives you notice, irrevocably, pursuant to Section
2.11 (Conversion/Continuation Option) of the Credit Agreement that the
undersigned hereby requests a [conversion] [continuation] on _______ __, ____ of
$____________ in principal amount of presently outstanding Revolving Loans that
are [Base Rate Loans] [Eurodollar Rate Loans] having an Interest Period ending
on ______ __, ____ [to] [as] [Base Rate][Eurodollar Rate] Loans. [The Interest
Period for such amount requested to be converted to or continued as Eurodollar
Rate Loans is [one] [two] [three] [six] month[s]].]
[SIGNATURE PAGE FOLLOWS]
[SIGNATURE PAGE TO LETTER OF CREDIT REQUEST]
In connection herewith, the undersigned hereby certifies that no
Default or Event of Default has occurred and is continuing on the date hereof.
WCI STEEL ACQUISITION, INC.
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
[FORM OF NOTICE OF CONVERSION/CONTINUATION]
Boston Brussels Chicago Dusseldorf London Los Angeles Miami Milan
Munich New York Orange County Rome San Diego Silicon Valley Washington, D.C.
May 1, 2006
To: The Administrative Agent and each
of the Lenders and Issuers party to the
Credit Agreement referred to below
Ladies and Gentlemen:
We have acted as special counsel to WCI Steel Acquisition, Inc., a
Delaware corporation (the "Borrower") and to each of Borrower's subsidiaries
listed on Annex A hereto (the "Subsidiaries" and together with the Borrower, the
"Credit Parties" and each individually, a "Credit Party"), in connection with
the preparation, execution and delivery of the Credit Agreement, dated as of the
date hereof (the "Credit Agreement"), among the Borrower, the Lenders and
Issuers parties thereto, and Citicorp USA, Inc. as Administrative Agent. This
opinion is being delivered to you pursuant to Section 3.1(a)(viii) of the Credit
Agreement. Capitalized terms used but not defined herein shall have the meanings
ascribed to such terms in the Credit Agreement.
In our examination, we have assumed the genuineness of all signatures
(including indorsements), the legal capacity of natural persons, the
authenticity of all documents (including Subject Documents) submitted to us as
originals, the conformity to original documents of all documents (including
Subject Documents) submitted to us as certified or photostatic copies and the
authenticity of the originals of such copies. As to any facts material to this
opinion which we did not independently establish or verify, we have relied upon
certificates, statements and representations of the Credit Parties and of each
entity's officers and other representatives and of public officials, including
the facts set forth in the Officers' Certificates described herein. We also have
assumed without further investigation that all assumptions of fact set forth
herein are and remain true and valid.
References to (i) the term "Applicable Laws" means, collectively,
those laws, rules and regulations of the State of New York and the United States
of America which, in our experience, are normally applicable to transactions of
the type contemplated by the Subject Documents and the General Corporation Law
of the State of Delaware (the "DGCL") and the Delaware Revised Uniform Limited
Partnership Act (the "DLPA"); (ii) the term "Applicable Contracts" means,
collectively, the agreements and instruments set forth on Annex E hereto; (iii)
the term "Applicable Orders" means those material judgments, injunctions, orders
or decrees of any Governmental Authority that have been certified to us as being
binding on the Borrower or any of its Subsidiaries; (iv) the term "Delaware UCC"
means Article 9 of the Uniform Commercial Code as in effect in the State of
Delaware as printed in the CCH Secured Transactions Guide as updated through
April 4, 2006; (v) the term "Governmental Authorities" means any New York or
federal executive, legislative, judicial, administrative or regulatory body;
(vi) the term "Government Approval" means any consent, approval, license,
authorization or validation of, or filing, recording or registration with, any
Governmental Authority pursuant to Applicable Laws; and (vii) the term "Subject
Documents" means, collectively:
(A) the Credit Agreement;
May 1, 2006
Page 2
(B) each of the Notes;
(C) the Pledge and Security Agreement, dated as of even date herewith,
among the Credit Parties and the Administrative Agent;
(D) the Guaranty, dated as of dated as of even date herewith, by the
Credit Parties in favor of the Administrative Agent (the "Guaranty");
(E) the Assignment of Security Interest in Trademarks dated as of May
1, 2006 in favor of the Administrative Agent that has been delivered by the
Borrower (the "IP Assignment"); and
(F) The Amended and Restated Fee Letter $150 Million Secured Revolving
Credit Facility executed by WCI Steel, Inc. (f.k.a. WCI Steel Acquisitions,
Inc.) on May 1, 2006 (the "Fee Letter").
In rendering the opinions set forth herein, we have examined such
agreements, instruments and documents (including without limitation (i) UCC-1
financing statements filed or to be filed naming the Credit Parties as debtors
and the Administrative Agent as secured party (the "UCC Financing Statements")
in the filing office(s) listed opposite the name of each Credit Parties on Annex
B and (ii) the certificates from an authorized officer of each of the Credit
Parties certifying in each instance the accuracy and completeness of certain
facts and documents attached as Annex C (the "Officers' Certificates")), and
such questions of law as we have deemed necessary or appropriate to enable us to
render the opinions expressed below.
Whenever our opinion with respect to the existence or absence of facts
is indicated to be based on our knowledge or awareness, we are referring solely
to the current actual knowledge of the particular ▇▇▇▇▇▇▇▇▇ Will & ▇▇▇▇▇ LLP
attorneys who have been directly involved in representation of the Borrower and
each of its Subsidiaries in connection with the Subject Documents. Except as
expressly set forth herein, we have not undertaken any independent investigation
to determine the existence or absence of any such facts and no inference as to
our knowledge concerning any such facts should be drawn from our representation
of the Credit Parties in connection with the Subject Documents.
We are admitted to the Bar in the State New York. Except as provided
in the immediately following paragraph, we express no opinion as to the laws
other than Applicable Laws.
While we are not licensed to practice law in the State of Delaware, we
have reviewed the Delaware UCC in connection with our opinions in paragraph 7
below and the DGCL and the DLPA. Except as described, we have neither examined
nor do we express any opinion with respect to any other Articles of the Delaware
UCC or any other laws of the State of Delaware or the laws of any other
jurisdiction. By rendering the opinions set forth in paragraphs 7 and 8 below,
we do not intend to indicate that we are experts on, or qualified to render
opinions on, the laws of the State of Delaware. Accordingly, we caution you that
the opinions expressed herein could be materially affected by other statutes,
laws or regulations of the State of Delaware or judicial decisions of courts
construing such laws.
Our opinions are, with your consent, subject to the following
assumptions, limitations, qualifications and exceptions:
May 1, 2006
Page 3
(a) each of the signatures of the individuals signing the Subject Documents
is genuine and (other than signatures on behalf of the Credit Parties)
authorized;
(b) each party to the Subject Documents (other than the Credit Parties to
the extent expressed in our opinion in paragraph 1 below) is duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
organization and (except for the Credit Parties) has the full power and
authority (corporate and otherwise) to execute and deliver the Subject Documents
to which it is a party and to perform its obligations thereunder and to
consummate the transactions contemplated thereby;
(c) each of the Subject Documents has been duly authorized, executed and
delivered by each party to the Subject Documents (other than the Credit Parties)
and constitutes the legal, valid and binding obligation of each party to the
Subject Documents (other than the Credit Parties) enforceable against each such
party (other than the Credit Parties) in accordance with their respective terms;
(d) the execution, delivery and performance by each of the Credit Parties
of any of its obligations under the Subject Documents to which it is a party
does not and will not conflict with, contravene, violate or constitute a default
under (i) any lease, indenture, instrument or other contract or agreement to
which such Credit Parties or its property is subject (other than Applicable
Contracts as to which we express our opinion in paragraph 4 below), (ii) any
rule, law or regulation to which such Credit Party is subject (other than
Applicable Laws) or (iii) any judicial or administrative order or decree of any
governmental authority (other than the Applicable Orders as to which we express
our opinion in paragraph 4 below);
(e) no authorization, consent or other approval of, notice to or filing
with any court, governmental authority or regulatory body (other than with
respect to the Credit Parties, the Governmental Approvals as to which we express
our opinion in paragraph 5 below) is required in connection with the execution,
delivery or performance by any Credit Party of any Subject Document to which it
is a party;
(f) we have assumed that the name of the Administrative Agent is Citicorp
USA, Inc.;
(g) we express no opinion as to the effect on the opinions herein stated of
(i) the compliance or noncompliance of any party to the Subject Documents (other
than the Credit Parties) with any state, federal or other laws or regulations
applicable thereto (other than the Applicable Laws) or (ii) the legal or
regulatory status or the nature of the business of any party to the Subject
Documents (other than the Credit Parties);
(i) in rendering our opinions set forth herein, we express no opinion
as to the applicability or effect of any preference or similar law; and
(j) we have assumed that (i) there has not been any mutual mistake of
fact or misunderstanding, fraud, duress or undue influence and (ii) there are no
oral or written modifications of or amendments to the Subject Documents and
there have been no waivers, terminations or releases of any of the provisions of
the Subject Documents by actions or conduct of the parties or otherwise.
Based upon the foregoing and subject to the assumptions, limitations,
qualifications and exceptions set forth herein, we are of the opinion that:
May 1, 2006
Page 4
1. Each of the Credit Parties is validly existing, duly organized, and in
good standing under the laws of its jurisdiction of organization. Each of the
Credit Parties has the requisite corporate or limited partnership power and
authority to own, lease, occupy and operate the properties used or useful in its
business and conduct its business as presently conducted. Certificates of Good
Standing certified by the Delaware Secretary of State for each Credit Party are
attached hereto as Annex D.
2. Each of the Credit Parties has the requisite corporate or limited
partnership (as applicable) power and authority under Applicable Law to execute,
deliver and perform its obligations in each of the Subject Documents to which it
is a party. The execution and delivery by each of the Credit Parties of each of
the Subject Documents to which it is a party have been duly authorized by
requisite corporate or limited partnership (as applicable) action on the part of
such Credit Parties. Each of the Credit Parties has duly executed and delivered
each of the Subject Documents to which it is a party.
3. Each of the Subject Documents to which a Credit Party is a party (other
than the Notes) constitutes, and each of the Notes, as of the date thereof, will
constitute, such Credit Party's valid and binding obligation, enforceable under
the laws of the State of New York against such Credit Party in accordance with
its terms.
4. Assuming, as set forth in the Officers' Certificates, the proceeds of
the Loans are used solely for the purposes set forth in the Credit Agreement,
neither the execution and delivery by each Credit Party of the Subject Documents
to which such Credit Party is a party, nor the Borrowings, granting of Liens and
performance by such Credit Party of its obligations under the Subject Documents
(i) conflicts with such party's Articles or Certificate of Incorporation or
Formation, Bylaws or Partnership Agreement (as applicable), (ii) contravenes any
Applicable Law, (iii) constitutes a material violation or default under any of
the Applicable Contracts or (iv) contravenes any Applicable Order.
5. No Governmental Approval is required to authorize, or is required in
connection with (i) the execution or delivery by any Credit Party of the Subject
Documents to which such Credit Party is a party or (ii) the Borrowings, granting
of Liens and performance by the such Credit Party of its respective obligations
under the Subject Documents except, in each case, (a) those which have been
obtained or made and are in full force and effect and (b) the filing of the UCC
Financing Statements and IP Assignment.
6. None of the Credit Parties is required to register under the Investment
Company Act of 1940, as amended (the "1940 Act") as an "investment company" as
such term is defined in the 1940 Act.
7. The Pledge and Security Agreement grants to the Administrative Agent
(for the benefit of the Lenders) a valid security interest in all right, title
and interest of each Credit Party party thereto in those items and types of
Collateral in which a security interest may be created under the New York UCC to
secure the Obligations under the Credit Agreement and the Guaranty. The
description of the Collateral set forth in the UCC Financing Statements is
sufficient to perfect a security interest in the items and types of collateral
in which a security interest may be perfected by the filing of a financing
statement under the Delaware UCC. Assuming that the UCC Financing Statements
have been filed in the Filing Offices set forth on Annex B hereto and have not
subsequently been released, terminated or modified, the Administrative Agent's
security interest in the Collateral of the Credit Parties that are party to the
Pledge and Security Agreement will have been perfected, to the extent such
security interest may be perfected under the applicable provisions of the
Delaware UCC by the filing of a financing statement.
May 1, 2006
Page 5
8. All of the outstanding shares of the Pledged Certificated Stock of each
Subsidiary of the Borrower (each an "Issuing Subsidiary") are (i) owned of
record and beneficially by the Borrower or another Credit Party, to our
knowledge, free and clear of all adverse claims, (ii) are duly authorized,
validly issued, fully paid and nonasssessable, and (iii) have not been issued in
violation of any preemptive rights granted by law or the constituent documents
of such Issuing Entity.
9. The Pledge and Security Agreement grants to the Administrative Agent
(for the benefit of the Lenders) a valid security interest in all right, title
and interest of each Credit Party party thereto in the Pledged Certificated
Stock, as defined therein, to secure the Obligations under the Credit Agreement
and the Guaranty. Assuming that the Administrative Agent has taken and is
retaining possession directly (and not through any agent) in the State of New
York of the certificates evidencing the Pledged Certificated Stock, together
with properly completed stock or bond powers endorsing the Pledged Certificated
Stock and executed by the applicable Credit Party in blank, and assuming that
the Administrative Agent has taken such Pledged Certificated Stock in good faith
(i) without notice of any adverse claim within the meaning of the New York UCC
(as such term is defined in Section 8-302 of the New York UCC) with respect to
the Pledged Certificated Stock and (ii) obtained its security interest in the
Pledged Certificated Stock in "good faith" (as such term is defined in Section
1-201(19) of the New York UCC), there has been granted to the Administrative
Agent (for the benefit of the Lenders), as security for the Obligations under
the Credit Agreement and the Guaranty, a valid and perfected security interest
in the Pledged Certificated Stock, with the consequence of perfection by control
accorded by the New York UCC free of any adverse claim, so long as the
Administrative Agent has continuous possession of such Pledged Certificated
Stock in the State of New York.
10. Subject to both (i) the due filing and recording of the Patent and
Trademark Assignments in the United States Patent and Trademark Office (the
"PTO") and (ii) further subject to the due filing of each UCC Financing
Statement in the Filing Office applicable to each Credit Party as set forth on
Annex B, the security interests granted to the Administrative Agent (for the
benefit of the Lenders) to secure Obligations under the Credit Agreement and
Guaranty pursuant to the IP Assignment in and to all patents and trademarks of
the Credit Parties registered with the PTO, will be perfected, with the
exception of any patents, trademarks and copyrights that have expired or not
been renewed or abandoned or have otherwise become invalid or unenforceable as a
matter of law.
11. As of the date hereof and based upon the Officers' Certificates, to our
knowledge there are no actions, suits, proceedings, claims or disputes pending
or threatened in writing at law, in equity, in arbitration or before any
Governmental Authority, by or against any of the Credit Parties or against any
of their respective properties or revenues or injunctions, writs, temporary
restraining orders or other orders of any nature issued by any court or
Governmental Authority (a) that purport to affect or pertain to the Credit
Agreement or any other Subject Document or any of the transactions contemplated
thereby or (b) other than those which, based on the certifications by the Credit
Parties' in the Officers' Certificates, would not, either individually or in the
aggregate, if determined adversely, reasonably be expected to have a Material
Adverse Effect.
12. Assuming that the proceeds are used as set forth in the Credit
Agreement, the extension of credit to be made under the Credit Agreement does
not violate the provisions of Regulations T, U or X of the Board of Governors of
the Federal Reserve System.
In addition to any assumptions, qualifications and other matters set
forth elsewhere herein, the opinions herein are subject to the following
qualifications:
May 1, 2006
Page 6
(A) Our opinions expressed above are subject to the effect of any
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting creditors' rights generally and we express no opinion with respect
thereto.
(B) Our opinions expressed above are subject to the effect of general
principles of equity, including, without limitation, concepts of materiality,
reasonableness, good faith and fair dealing (regardless of whether considered in
a proceeding in equity or at law).
(C) Our opinions expressed above are subject to the qualification that
certain of the provisions contained in the Subject Documents may be limited or
rendered unenforceable by applicable laws or judicial decisions governing such
provisions or holding their enforcement to be unreasonable under the then
existing circumstances, but such laws and judicial decisions do not, in our
opinion, render the Subject Documents invalid as a whole or leave you without
remedies.
(D) We call your attention to the following matters (as well as those
matters set out in paragraph (F) below) as to which we express no opinion:
(1) the agreement of any of the Credit Parties in the Subject
Documents relating to indemnification or contribution;
(2) the agreement of any the Credit Parties in the Subject Documents
to establish evidentiary standards;
(3) the enforceability of the provisions of the Subject Documents to
the extent that (a) they state that provisions of the Subject
Documents may only be waived in writing, (b) they state that the
provisions of the Subject Documents are severable, (c) they
permit advances of funds for the payment of interest, fees or
other amounts without the consent of a Credit Party, as
applicable, (d) they purport to authorize or permit any purchaser
of a participation interest from any Lender to set off or apply
any deposit, property or indebtedness with respect to any such
participation interest, (e) they purport to waive claims (whether
arising in tort, contract or otherwise) by any Credit Party
against any Administrative Agent or any Lender except to the
extent arising from gross negligence or willful misconduct of
such Administrative Agent or Lender, (f) they purport to consent
to the entry of a default judgment against any Credit Party, (g)
they purport to establish standards regarding what would be
considered "good faith" conduct on the part of any Administrative
Agent or any Lender to the extent such standards differ from
those applicable under the New York UCC, (h) they purport to
provide that, in the event the Borrower or any Guarantor revokes
its guaranty under the Guaranty, the Borrower or such Guarantor
would nevertheless remain liable with respect to any guaranteed
Obligation arising thereafter, regardless of whether such
guaranteed Obligation arose pursuant to a binding commitment of
any Administrative Agent or Lender entered into prior to the date
of revocation or (i) they purport to assign receivables
consisting of claims against any government or governmental
agency (including, without limitation, the United States of
America or any state thereof or any agency or department thereof
or of any state) may be
May 1, 2006
Page 7
limited by the Federal Assignment of Claims Act or similar state
or local statute;
(5) the enforceability under certain circumstances of provisions to
the effect that (a) the rights or remedies of the Administrative
Agent or the Lenders are not exclusive, (b) rights or remedies
may be exercised without notice, (c) every right or remedy is
cumulative and may be exercised in addition to or with any other
right or remedy, (d) election of a particular remedy or remedies
does not preclude recourse to one or more remedies, and (e)
failure to exercise or delay in exercising rights or remedies
will not operate as a waiver of any such rights or remedies;
(6) the ordinances and statutes, the administrative decisions and
orders and the rules and regulations of any municipality, county
or special district or other political subdivision of any state;
and
(7) the applicability to the obligations of any guarantor or surety
(or any Person deemed to be a guarantor or surety) under any of
the Subject Documents (or the enforceability of any such
obligations) of Section 548 of the Bankruptcy Code (as defined
below), or provisions of applicable state law relating to
fraudulent conveyances or transfers of obligations or the making
of dividends or other distributions. Nevertheless, we have
assumed, without independent verification, that you have made or
caused to be made such valuations and projections as you have
deemed necessary to demonstrate and to satisfy yourselves that,
after giving effect to those obligations, the relevant guarantor
will not (a) be insolvent, (b) have liabilities (including
contingent, unmatured and subordinated liabilities) that are
beyond its ability to pay as such liabilities mature or (c) have
an unreasonably small capital with which to conduct its business.
(E) Our opinions in paragraphs 7 and 11 herein are subject to the
following:
(1) the continuation and perfection of the security of the
Administrative Agent and the Lenders in the proceeds of the
Collateral is limited to the extent set forth in Section 9-315 of
the New York UCC and the corresponding provisions of the Delaware
UCC;
(2) Article 9 of the New York UCC and the corresponding provisions of
the Delaware UCC require the filing of continuation statements
with respect to the UCC Financing Statements during the six month
period immediately prior to the expiration of five years from the
date of the original filings of such UCC Financing Statements, in
order to maintain the effectiveness of the UCC Financing
Statements;
(3) Section 547 of the United States Bankruptcy Code (the "Bankruptcy
Code") provides that a transfer is not made until the debtor has
rights in the property transferred, and a security interest in
after-acquired property that is security for other than a
contemporaneous advance may constitute a transfer for or on
May 1, 2006
Page 8
account of an antecedent debt avoidable under the conditions (and
subject to the exceptions) provided by such Section 547;
(4) in the case of property which becomes part of the Collateral
after the date hereof, Section 552 of the Bankruptcy Code limits
the extent to which property acquired by a debtor after the
commencement of a case under the Bankruptcy Code may be subject
to a security interest arising from a security agreement entered
into by the debtor before the commencement of such case;
(5) perfection of a security interest in the Collateral, to the
extent such perfection requires the filing of financing
statements under the New York UCC, will be terminated (a) as to
any Collateral acquired by the any Credit Party more than four
months after such party changes its name, identity or corporate
structure so as to make the UCC Financing Statements seriously
misleading, unless new appropriate financing statements
indicating the new name, identity or corporate structure of such
party are properly filed before the expiration of such four-month
period and (b) as to any Collateral consisting of accounts, four
months after such party changes its state of incorporation or
organization (or, if earlier, when perfection under the laws of
the States of New York or Delaware, as applicable, would have
ceased as set forth in subparagraph (E)(2) above) unless such
security interests are perfected in such new jurisdiction before
such termination;
(6) the rights of the Lenders with respect to Collateral consisting
of accounts, instruments, licenses, leases, contracts or other
agreements may be subject to the claims, rights and defenses of
the other parties thereto against any Credit Party, unless such
other parties have otherwise agreed;
(7) in the case of any Collateral consisting of licenses or permits
issued by Governmental Authorities, the a Credit Party may not
have sufficient rights therein for the security interest of the
Administrative Agent (or the Lenders) to attach and, even if such
Credit Party has sufficient rights for the security interest of
Administrative Agent (or the Lenders) to attach, the exercise of
remedies may be limited by the terms of any such license or
permit or require the consent of the Governmental Authority
issuing any such license or permit; and
(8) we express no opinion with respect to the requirements for
perfection of a security interest of any Credit Party that is
indicated on Annex A hereto to have been organized under any laws
other than a state of the United States or of the United States.
(F) Our opinions in paragraph 8 above are subject to the following:
(1) in the case of the Pledged Certificated Stock, the Administrative
Agent or the Lenders may not be entitled to vote the Pledged
Certificated Stock or to receive dividends or other distributions
from the issuer thereof prior to becoming a record holder of such
Pledged Certificated Stock, nor may the Pledged Certificated
Stock be sold, conveyed or otherwise transferred by the
Administrative Agent or any Lender without compliance (or an
applicable
May 1, 2006
Page 9
exemption from or exception to compliance with) with the
Securities Act of 1933, as amended, and all applicable state
securities or "blue sky" laws;
(2) we express no opinion with respect to any Pledged Certificated
Stock that is not a "certificated security" as defined in Section
8-102 of the New York UCC;
(3) we call to your attention that, in the case of the issuance of
additional certificated shares or other distributions in respect
of any stock pledged to the Administrative Agent (or any Lender)
by any of the Credit Parties, the security interest of the
Administrative Agent (and the Lenders) therein will be perfected
only if possession thereof is obtained and maintained by the
Administrative Agent in the State of New York or other action
appropriate to the nature of any such distribution is taken, in
either case in accordance with the provisions of the New York UCC
and other applicable laws; and
(G) With respect to our opinions in paragraph 7 herein, we express no
opinion as to:
(1) any Person's ownership rights in or title to, or priority of any
Lien on or with respect to, any property or assets forming any
part of the Collateral or the Pledged Certificated Stock;
(2) the creation, validity, attachment, perfection, priority or
enforceability of any security interest purported to be granted
in or in respect of (a) the Collateral or the Pledged
Certificated Stock (except as expressly provided in paragraph 7
above); (b) any real property, fixtures, equipment used in
farming operations, farm products, crops, timber or minerals and
the like (including oil and gas) or accounts resulting from the
sale of any of the foregoing; (c) policies of insurance,
receivables due from any Governmental Authority, inventory which
is subject to any document of title (such as bills of lading or
warehouse receipts), consumer goods, beneficial interests in a
trust or letters of credit; or (d) any other property or assets
the creation, perfection or priority of a security interest in
which is excluded from the coverage of Article 8 or 9 of the New
York UCC and corresponding provisions of the Delaware UCC,
including, without limitation, such property or assets the
creation, perfection or priority of a security in which are
subject to (i) a statute or treaty of the United States which
provides for a national or international registration or a
national or international certificate of title for the perfection
or recordation of a security interest therein or which specifies
a place of filing different from that specified in the New York
UCC and Delaware UCC for filing to perfect or record such
security interest or (ii) a certificate of title statute; and
(3) the priority of any security interest in any Collateral
consisting of chattel paper which is not stamped by the relevant
Credit Party with a legend showing the security interest of the
Administrative Agent and the Lenders therein and would thus be
subject to the security interest of a purchaser of such chattel
paper pursuant to the terms of Section 9-308 of the New York UCC
and corresponding provisions of the Delaware UCC.
May 1, 2006
Page 10
Our opinions set forth in this letter are based upon the facts in
existence and laws in effect on the date hereof and we expressly disclaim any
obligation to update our opinions herein, regardless of whether changes in such
facts or laws come to our attention after the delivery hereof.
This opinion is solely for the benefit of the addressees hereof and
their respective successors and assigns as permitted pursuant to the Credit
Agreement. This opinion may not be relied upon in any manner by any other person
and may not be disclosed, quoted, filed with a governmental agency or otherwise
referred to without our prior written consent.
Very truly yours,
▇▇▇▇▇▇▇▇▇ Will & ▇▇▇▇▇ LLP
ANNEX A
LIST OF SUBSIDIARIES
NAME JURISDICTION OF ORGANIZATION
---- ----------------------------
WCI Steel Metallurgical Services, Acquisition, Inc. Delaware
WCI Steel Production Control Services Acquisition, Inc. Delaware
WCI Steel Sales Acquisition, L.P. Delaware
Youngstown Sinter Acquisition Company Delaware
ANNEX B
FILING OFFICES AND UCC FINANCING STATEMENTS
NAME OF OBLIGOR NAMES AND LOCATIONS OF U.C.C. FILING OFFICES
--------------- --------------------------------------------
WCI Steel Acquisition, Inc. Delaware Secretary of State
WCI Steel Metallurgical Services Acquisition, Inc. Delaware Secretary of State
WCI Steel Production Control Services Acquisition, Inc. Delaware Secretary of State
WCI Steel Sales Acquisition, L.P. Delaware Secretary of State
Youngstown Sinter Acquisition Company Delaware Secretary of State
- Credit Parties Delivering Trademark Assignments
WCI Steel Acquisition, Inc.
ANNEX C
OFFICERS' CERTIFICATES
See Attached.
OFFICERS' CERTIFICATE IN SUPPORT OF LEGAL OPINION
The undersigned hereby delivers this Certificate in her capacity as an
officer of WCI Steel Acquisition, Inc., a Delaware corporation (the "Borrower").
The undersigned hereby certifies as follows:
The Borrower is party to a credit agreement dated as of May 1, 2006
(the "Credit Agreement") among the Borrower, the Lenders and Issuers parties
thereto, and Citicorp USA, Inc. as Administrative Agent. Terms not otherwise
defined herein are used herein as defined in the Credit Agreement.
1. The undersigned understand that this Certificate will be relied upon by
▇▇▇▇▇▇▇▇▇ Will & ▇▇▇▇▇ LLP ("▇▇▇▇▇▇▇▇▇") in connection with legal opinion (the
"▇▇▇▇▇▇▇▇▇ Opinion") to be delivered by ▇▇▇▇▇▇▇▇▇ in connection with the
transactions contemplated by the Loan Documents (as defined in the ▇▇▇▇▇▇▇▇▇
Opinion). The ▇▇▇▇▇▇▇▇▇ Opinion will address certain issues related to the Loan
Documents. I am familiar with the transactions and other factual matters
described in the ▇▇▇▇▇▇▇▇▇ Opinion and have made such investigations and
inquiries as are necessary to enable me to execute and deliver this Certificate.
2. All representations and warranties made by the Borrower in the Loan
Documents and all ancillary or related documents are true and correct as to
factual matters.
3. There are no material judgments, injunctions, orders or decrees of any
Governmental Authorities that are binding on the Borrower.
4. The Loan Documents and all ancillary or related documents have been
executed and delivered by the Borrower.
5. The Borrower is not engaged in the business of extending credit for the
purpose of purchasing or carrying margin stock (within the meaning of Regulation
U of the Federal Reserve Board), and no proceeds of any Loan will be used to
purchase or carry any such margin stock or to extend credit to others for the
purpose of purchasing or carrying any such margin stock in contravention of
Regulation T, U or X of the Federal Reserve Board.
6. The Borrower is not (a) in the business of investing, reinvesting, or
trading in securities nor does it hold itself out as being engaged primarily,
nor does it propose to engage primarily, in the business of investing,
reinvesting, or trading in securities; (b) engaged or proposes to engage in the
business of issuing face-amount certificates of the installment type nor has any
such certificate outstanding after having been previously engaged in such
business or (c) engaged or proposes to engage in the business of investing,
reinvesting, owning, holding or trading in securities or owns or proposes to
acquire investment securities having a value exceeding 20 percent of the value
of such Person's total assets (exclusive of Government securities and cash
items) on an unconsolidated basis.
For the purpose of the foregoing:
"investment securities" include all securities except (i)
Government securities, (ii) securities issued by employee's securities companies
and (iii) securities used by majority-owned subsidiaries that (x) are not
themselves investment companies and are not exempt under the Investment Company
Act of 1940, as amended, on account of being owned by not more than one hundred
persons or qualified purchasers (those who own not less than $5 million in total
investment) and (y) have not made nor propose to make a public offering of
securities;
"face-amount certificates of the installment type" means any
certificate, investment contract or other security which represents an
obligation on the part of its issuer to pay a stated or determinable sum or sums
at fixed or determinable times more than 24 months after issuance, in
consideration of the payment of periodic installments;
"security" means any note, stock, treasury stock, bond,
debenture, evidence of indebtedness, certificate of interest or participation in
any profit-sharing agreement, collateral-trust certificate, preorganization
certificate or subscription, transferable share, investment contract,
voting-trust certificate, certificate of deposit for security or fractional
undivided interest in oil, gas or other mineral rights, any put, call, straddle,
option or privilege on any security (including a certificate of deposit) or on
any group or index of securities (including any interest therein or based on the
value thereof) or any put, call, straddle, option or privilege entered into on a
national securities exchange relating to foreign currency or, in general, any
interest or instrument commonly known as a "security", or any certificate for,
receipt for, guarantee of, or warrant or right to subscribe to purchase any of
the foregoing.
7. To the knowledge of the undersigned, the Borrower has not received
notice of any event which would or could affect the good standing of the
Borrower with the Secretary of State or other relevant Governmental Authority of
the state of its formation or organization, including, without limitation, (a)
failure to pay any tax, penalty or interest owing to such state, (b) failure to
file a tax return with the applicable Governmental Authority in such state, (c)
failure to file annual or other statements with the Secretary of State or other
applicable Governmental Authority in such state or (d) failure to pay any fee
due and owing to the Secretary or State or other applicable Governmental
Authority of such state which, to the undersigned's knowledge, is due and owing.
8. To the best of the undersigned's knowledge, there are no actions, suits,
proceedings, claims or disputes pending or threatened or contemplated, at law,
in equity, in arbitration or before any Governmental Authority, by or against
the Borrower or against any of their respective properties or revenues or
injunctions, writs, temporary restraining orders or other orders of any nature
issued by any court or Governmental Authority, in any case, that (a) purport to
affect or pertain to the Credit Agreement or any other Loan Documents, or any of
the transactions contemplated thereby or (b) either individually or in the
aggregate, if determined adversely, could reasonably be expected to have a
Material Adverse Effect.
IN WITNESS WHEREOF, the undersigned has duly executed and delivered
this Officers' Certificate in Support of Opinion as of May 1, 2006.
By:
------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇
Title:
---------------------------------
OFFICERS' CERTIFICATE IN SUPPORT OF LEGAL OPINION
The undersigned hereby delivers this Certificate in her capacity as an
officer of WCI Steel Metallurgical Services Acquisition, Inc., a Delaware
corporation (the "Company"). The undersigned hereby certifies as follows:
The Company is a subsidiary of WCI Steel Acquisition, Inc. (the
"Borrower"), which is party to a credit agreement dated as of May 1, 2006 (the
"Credit Agreement") among the Borrower, the Lenders and Issuers parties thereto,
and Citicorp USA, Inc. as Administrative Agent. Terms not otherwise defined
herein are used herein as defined in the Credit Agreement.
1. The undersigned understand that this Certificate will be relied upon by
▇▇▇▇▇▇▇▇▇ Will & ▇▇▇▇▇ LLP ("▇▇▇▇▇▇▇▇▇") in connection with legal opinion (the
"▇▇▇▇▇▇▇▇▇ Opinion") to be delivered by ▇▇▇▇▇▇▇▇▇ in connection with the
transactions contemplated by the Loan Documents (as defined in the ▇▇▇▇▇▇▇▇▇
Opinion). The ▇▇▇▇▇▇▇▇▇ Opinion will address certain issues related to the Loan
Documents. I am familiar with the transactions and other factual matters
described in the ▇▇▇▇▇▇▇▇▇ Opinion and have made such investigations and
inquiries as are necessary to enable me to execute and deliver this Certificate.
2. All representations and warranties made by the Company in the Loan
Documents and all ancillary or related documents are true and correct as to
factual matters.
3. There are no material judgments, injunctions, orders or decrees of any
Governmental Authorities that are binding on the Company.
4. The Loan Documents and all ancillary or related documents have been
executed and delivered by the Company.
5. The Borrower is not engaged in the business of extending credit for the
purpose of purchasing or carrying margin stock (within the meaning of Regulation
U of the Federal Reserve Board), and no proceeds of any Loan will be used to
purchase or carry any such margin stock or to extend credit to others for the
purpose of purchasing or carrying any such margin stock in contravention of
Regulation T, U or X of the Federal Reserve Board.
6. The Company is not (a) in the business of investing, reinvesting, or
trading in securities nor does it hold itself out as being engaged primarily,
nor does it propose to engage primarily, in the business of investing,
reinvesting, or trading in securities; (b) engaged or proposes to engage in the
business of issuing face-amount certificates of the installment type nor has any
such certificate outstanding after having been previously engaged in such
business or (c) engaged or proposes to engage in the business of investing,
reinvesting, owning, holding or trading in securities or owns or proposes to
acquire investment securities having a value exceeding 20 percent of the value
of such Person's total assets (exclusive of Government securities and cash
items) on an unconsolidated basis.
For the purpose of the foregoing:
"investment securities" include all securities except (i)
Government securities, (ii) securities issued by employee's securities companies
and (iii) securities used by majority-owned subsidiaries that (x) are not
themselves investment companies and are not exempt under the Investment Company
Act of 1940, as amended, on account of being owned by not more than one hundred
persons or qualified purchasers (those who own not less than $5 million in total
investment) and (y) have not made nor propose to make a public offering of
securities;
"face-amount certificates of the installment type" means any
certificate, investment contract or other security which represents an
obligation on the part of its issuer to pay a stated or determinable sum or sums
at fixed or determinable times more than 24 months after issuance, in
consideration of the payment of periodic installments;
"security" means any note, stock, treasury stock, bond,
debenture, evidence of indebtedness, certificate of interest or participation in
any profit-sharing agreement, collateral-trust certificate, preorganization
certificate or subscription, transferable share, investment contract,
voting-trust certificate, certificate of deposit for security or fractional
undivided interest in oil, gas or other mineral rights, any put, call, straddle,
option or privilege on any security (including a certificate of deposit) or on
any group or index of securities (including any interest therein or based on the
value thereof) or any put, call, straddle, option or privilege entered into on a
national securities exchange relating to foreign currency or, in general, any
interest or instrument commonly known as a "security", or any certificate for,
receipt for, guarantee of, or warrant or right to subscribe to purchase any of
the foregoing.
7. To the knowledge of the undersigned, the Company has not received notice
of any event which would or could affect the good standing of the Company with
the Secretary of State or other relevant Governmental Authority of the state of
its formation or organization, including, without limitation, (a) failure to pay
any tax, penalty or interest owing to such state, (b) failure to file a tax
return with the applicable Governmental Authority in such state, (c) failure to
file annual or other statements with the Secretary of State or other applicable
Governmental Authority in such state or (d) failure to pay any fee due and owing
to the Secretary or State or other applicable Governmental Authority of such
state which, to the undersigned's knowledge, is due and owing.
8. To the best of the undersigned's knowledge, there are no actions, suits,
proceedings, claims or disputes pending or threatened or contemplated, at law,
in equity, in arbitration or before any Governmental Authority, by or against
the Company or against any of their respective properties or revenues or
injunctions, writs, temporary restraining orders or other orders of any nature
issued by any court or Governmental Authority, in any case, that (a) purport to
affect or pertain to the Credit Agreement or any other Loan Documents, or any of
the transactions contemplated thereby or (b) either individually or in the
aggregate, if determined adversely, could reasonably be expected to have a
Material Adverse Effect.
IN WITNESS WHEREOF, the undersigned has duly executed and delivered
this Officers' Certificate in Support of Opinion as of May 1, 2006.
By:
------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇
Title:
---------------------------------
OFFICERS' CERTIFICATE IN SUPPORT OF LEGAL OPINION
The undersigned hereby delivers this Certificate in her capacity as an
officer of WCI Steel Production Control Services Acquisition, Inc., a Delaware
corporation (the "Company"). The undersigned hereby certifies as follows:
The Company is a subsidiary of WCI Steel Acquisition, Inc. (the
"Borrower"), which is party to a credit agreement dated as of May 1, 2006 (the
"Credit Agreement") among the Borrower, the Lenders and Issuers parties thereto,
and Citicorp USA, Inc. as Administrative Agent. Terms not otherwise defined
herein are used herein as defined in the Credit Agreement.
1. The undersigned understand that this Certificate will be relied upon by
▇▇▇▇▇▇▇▇▇ Will & ▇▇▇▇▇ LLP ("▇▇▇▇▇▇▇▇▇") in connection with legal opinion (the
"▇▇▇▇▇▇▇▇▇ Opinion") to be delivered by ▇▇▇▇▇▇▇▇▇ in connection with the
transactions contemplated by the Loan Documents (as defined in the ▇▇▇▇▇▇▇▇▇
Opinion). The ▇▇▇▇▇▇▇▇▇ Opinion will address certain issues related to the Loan
Documents. I am familiar with the transactions and other factual matters
described in the ▇▇▇▇▇▇▇▇▇ Opinion and have made such investigations and
inquiries as are necessary to enable me to execute and deliver this Certificate.
2. All representations and warranties made by the Company in the Loan
Documents and all ancillary or related documents are true and correct as to
factual matters.
3. There are no material judgments, injunctions, orders or decrees of any
Governmental Authorities that are binding on the Company.
4. The Loan Documents and all ancillary or related documents have been
executed and delivered by the Company.
5. The Borrower is not engaged in the business of extending credit for the
purpose of purchasing or carrying margin stock (within the meaning of Regulation
U of the Federal Reserve Board), and no proceeds of any Loan will be used to
purchase or carry any such margin stock or to extend credit to others for the
purpose of purchasing or carrying any such margin stock in contravention of
Regulation T, U or X of the Federal Reserve Board.
6. The Company is not (a) in the business of investing, reinvesting, or
trading in securities nor does it hold itself out as being engaged primarily,
nor does it propose to engage primarily, in the business of investing,
reinvesting, or trading in securities; (b) engaged or proposes to engage in the
business of issuing face-amount certificates of the installment type nor has any
such certificate outstanding after having been previously engaged in such
business or (c) engaged or proposes to engage in the business of investing,
reinvesting, owning, holding or trading in securities or owns or proposes to
acquire investment securities having a value exceeding 20 percent of the value
of such Person's total assets (exclusive of Government securities and cash
items) on an unconsolidated basis.
For the purpose of the foregoing:
"investment securities" include all securities except (i)
Government securities, (ii) securities issued by employee's securities companies
and (iii) securities used by majority-owned subsidiaries that (x) are not
themselves investment companies and are not exempt under the Investment Company
Act of 1940, as amended, on account of being owned by not more than one hundred
persons or qualified purchasers (those who own not less than $5 million in total
investment) and (y) have not made nor propose to make a public offering of
securities;
"face-amount certificates of the installment type" means any
certificate, investment contract or other security which represents an
obligation on the part of its issuer to pay a stated or determinable sum or sums
at fixed or determinable times more than 24 months after issuance, in
consideration of the payment of periodic installments;
"security" means any note, stock, treasury stock, bond,
debenture, evidence of indebtedness, certificate of interest or participation in
any profit-sharing agreement, collateral-trust certificate, preorganization
certificate or subscription, transferable share, investment contract,
voting-trust certificate, certificate of deposit for security or fractional
undivided interest in oil, gas or other mineral rights, any put, call, straddle,
option or privilege on any security (including a certificate of deposit) or on
any group or index of securities (including any interest therein or based on the
value thereof) or any put, call, straddle, option or privilege entered into on a
national securities exchange relating to foreign currency or, in general, any
interest or instrument commonly known as a "security", or any certificate for,
receipt for, guarantee of, or warrant or right to subscribe to purchase any of
the foregoing.
7. To the knowledge of the undersigned, the Company has not received notice
of any event which would or could affect the good standing of the Company with
the Secretary of State or other relevant Governmental Authority of the state of
its formation or organization, including, without limitation, (a) failure to pay
any tax, penalty or interest owing to such state, (b) failure to file a tax
return with the applicable Governmental Authority in such state, (c) failure to
file annual or other statements with the Secretary of State or other applicable
Governmental Authority in such state or (d) failure to pay any fee due and owing
to the Secretary or State or other applicable Governmental Authority of such
state which, to the undersigned's knowledge, is due and owing.
8. To the best of the undersigned's knowledge, there are no actions, suits,
proceedings, claims or disputes pending or threatened or contemplated, at law,
in equity, in arbitration or before any Governmental Authority, by or against
the Company or against any of their respective properties or revenues or
injunctions, writs, temporary restraining orders or other orders of any nature
issued by any court or Governmental Authority, in any case, that (a) purport to
affect or pertain to the Credit Agreement or any other Loan Documents, or any of
the transactions contemplated thereby or (b) either individually or in the
aggregate, if determined adversely, could reasonably be expected to have a
Material Adverse Effect.
IN WITNESS WHEREOF, the undersigned has duly executed and delivered
this Officers' Certificate in Support of Opinion as of May 1, 2006.
By:
------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇
Title:
---------------------------------
OFFICERS' CERTIFICATE IN SUPPORT OF LEGAL OPINION
The undersigned hereby delivers this Certificate in her capacity as an
officer of WCI Steel Sales Acquisition, L.P., a Delaware limited partnership
(the "Company"). The undersigned hereby certifies as follows:
The Company is a subsidiary of WCI Steel Acquisition, Inc. (the
"Borrower"), which is party to a credit agreement dated as of May 1, 2006 (the
"Credit Agreement") among the Borrower, the Lenders and Issuers parties thereto,
and Citicorp USA, Inc. as Administrative Agent. Terms not otherwise defined
herein are used herein as defined in the Credit Agreement.
1. The undersigned understand that this Certificate will be relied upon by
▇▇▇▇▇▇▇▇▇ Will & ▇▇▇▇▇ LLP ("▇▇▇▇▇▇▇▇▇") in connection with legal opinion (the
"▇▇▇▇▇▇▇▇▇ Opinion") to be delivered by ▇▇▇▇▇▇▇▇▇ in connection with the
transactions contemplated by the Loan Documents (as defined in the ▇▇▇▇▇▇▇▇▇
Opinion). The ▇▇▇▇▇▇▇▇▇ Opinion will address certain issues related to the Loan
Documents. I am familiar with the transactions and other factual matters
described in the ▇▇▇▇▇▇▇▇▇ Opinion and have made such investigations and
inquiries as are necessary to enable me to execute and deliver this Certificate.
2. All representations and warranties made by the Company in the Loan
Documents and all ancillary or related documents are true and correct as to
factual matters.
3. There are no material judgments, injunctions, orders or decrees of any
Governmental Authorities that are binding on the Company.
4. The Loan Documents and all ancillary or related documents have been
executed and delivered by the Company.
5. The Borrower is not engaged in the business of extending credit for the
purpose of purchasing or carrying margin stock (within the meaning of Regulation
U of the Federal Reserve Board), and no proceeds of any Loan will be used to
purchase or carry any such margin stock or to extend credit to others for the
purpose of purchasing or carrying any such margin stock in contravention of
Regulation T, U or X of the Federal Reserve Board.
6. The Company is not (a) in the business of investing, reinvesting, or
trading in securities nor does it hold itself out as being engaged primarily,
nor does it propose to engage primarily, in the business of investing,
reinvesting, or trading in securities; (b) engaged or proposes to engage in the
business of issuing face-amount certificates of the installment type nor has any
such certificate outstanding after having been previously engaged in such
business or (c) engaged or proposes to engage in the business of investing,
reinvesting, owning, holding or trading in securities or owns or proposes to
acquire investment securities having a value exceeding 20 percent of the value
of such Person's total assets (exclusive of Government securities and cash
items) on an unconsolidated basis.
For the purpose of the foregoing:
"investment securities" include all securities except (i)
Government securities, (ii) securities issued by employee's securities companies
and (iii) securities used by majority-owned subsidiaries that (x) are not
themselves investment companies and are not exempt under the Investment Company
Act of 1940, as amended, on account of being owned by not more than one hundred
persons or qualified purchasers (those who own not less than $5 million in total
investment) and (y) have not made nor propose to make a public offering of
securities;
"face-amount certificates of the installment type" means any
certificate, investment contract or other security which represents an
obligation on the part of its issuer to pay a stated or determinable sum or sums
at fixed or determinable times more than 24 months after issuance, in
consideration of the payment of periodic installments;
"security" means any note, stock, treasury stock, bond,
debenture, evidence of indebtedness, certificate of interest or participation in
any profit-sharing agreement, collateral-trust certificate, preorganization
certificate or subscription, transferable share, investment contract,
voting-trust certificate, certificate of deposit for security or fractional
undivided interest in oil, gas or other mineral rights, any put, call, straddle,
option or privilege on any security (including a certificate of deposit) or on
any group or index of securities (including any interest therein or based on the
value thereof) or any put, call, straddle, option or privilege entered into on a
national securities exchange relating to foreign currency or, in general, any
interest or instrument commonly known as a "security", or any certificate for,
receipt for, guarantee of, or warrant or right to subscribe to purchase any of
the foregoing.
7. To the knowledge of the undersigned, the Company has not received notice
of any event which would or could affect the good standing of the Company with
the Secretary of State or other relevant Governmental Authority of the state of
its formation or organization, including, without limitation, (a) failure to pay
any tax, penalty or interest owing to such state, (b) failure to file a tax
return with the applicable Governmental Authority in such state, (c) failure to
file annual or other statements with the Secretary of State or other applicable
Governmental Authority in such state or (d) failure to pay any fee due and owing
to the Secretary or State or other applicable Governmental Authority of such
state which, to the undersigned's knowledge, is due and owing.
8. To the best of the undersigned's knowledge, there are no actions, suits,
proceedings, claims or disputes pending or threatened or contemplated, at law,
in equity, in arbitration or before any Governmental Authority, by or against
the Company or against any of their respective properties or revenues or
injunctions, writs, temporary restraining orders or other orders of any nature
issued by any court or Governmental Authority, in any case, that (a) purport to
affect or pertain to the Credit Agreement or any other Loan Documents, or any of
the transactions contemplated thereby or (b) either individually or in the
aggregate, if determined adversely, could reasonably be expected to have a
Material Adverse Effect.
IN WITNESS WHEREOF, the undersigned has duly executed and delivered
this Officers' Certificate in Support of Opinion as of May 1, 2006.
By:
------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇
Title:
---------------------------------
OFFICERS' CERTIFICATE IN SUPPORT OF LEGAL OPINION
The undersigned hereby delivers this Certificate in her capacity as an
officer of Youngstown Sinter Company, a Delaware corporation (the "Company").
The undersigned hereby certifies as follows:
The Company is a subsidiary of WCI Steel Acquisition, Inc. (the
"Borrower"), which is party to a credit agreement dated as of May 1, 2006 (the
"Credit Agreement") among the Borrower, the Lenders and Issuers parties thereto,
and Citicorp USA, Inc. as Administrative Agent. Terms not otherwise defined
herein are used herein as defined in the Credit Agreement.
1. The undersigned understand that this Certificate will be relied upon by
▇▇▇▇▇▇▇▇▇ Will & ▇▇▇▇▇ LLP ("▇▇▇▇▇▇▇▇▇") in connection with legal opinion (the
"▇▇▇▇▇▇▇▇▇ Opinion") to be delivered by ▇▇▇▇▇▇▇▇▇ in connection with the
transactions contemplated by the Loan Documents (as defined in the ▇▇▇▇▇▇▇▇▇
Opinion). The ▇▇▇▇▇▇▇▇▇ Opinion will address certain issues related to the Loan
Documents. I am familiar with the transactions and other factual matters
described in the ▇▇▇▇▇▇▇▇▇ Opinion and have made such investigations and
inquiries as are necessary to enable me to execute and deliver this Certificate.
2. All representations and warranties made by the Company in the Loan
Documents and all ancillary or related documents are true and correct as to
factual matters.
3. There are no material judgments, injunctions, orders or decrees of any
Governmental Authorities that are binding on the Company.
4. The Loan Documents and all ancillary or related documents have been
executed and delivered by the Company.
5. The Borrower is not engaged in the business of extending credit for the
purpose of purchasing or carrying margin stock (within the meaning of Regulation
U of the Federal Reserve Board), and no proceeds of any Loan will be used to
purchase or carry any such margin stock or to extend credit to others for the
purpose of purchasing or carrying any such margin stock in contravention of
Regulation T, U or X of the Federal Reserve Board.
6. The Company is not (a) in the business of investing, reinvesting, or
trading in securities nor does it hold itself out as being engaged primarily,
nor does it propose to engage primarily, in the business of investing,
reinvesting, or trading in securities; (b) engaged or proposes to engage in the
business of issuing face-amount certificates of the installment type nor has any
such certificate outstanding after having been previously engaged in such
business or (c) engaged or proposes to engage in the business of investing,
reinvesting, owning, holding or trading in securities or owns or proposes to
acquire investment securities having a value exceeding 20 percent of the value
of such Person's total assets (exclusive of Government securities and cash
items) on an unconsolidated basis.
For the purpose of the foregoing:
"investment securities" include all securities except (i)
Government securities, (ii) securities issued by employee's securities companies
and (iii) securities used by majority-owned subsidiaries that (x) are not
themselves investment companies and are not exempt under the Investment Company
Act of 1940, as amended, on account of being owned by not more than one hundred
persons or qualified purchasers (those who own not less than $5 million in total
investment) and (y) have not made nor propose to make a public offering of
securities;
"face-amount certificates of the installment type" means any
certificate, investment contract or other security which represents an
obligation on the part of its issuer to pay a stated or determinable sum or sums
at fixed or determinable times more than 24 months after issuance, in
consideration of the payment of periodic installments;
"security" means any note, stock, treasury stock, bond,
debenture, evidence of indebtedness, certificate of interest or participation in
any profit-sharing agreement, collateral-trust certificate, preorganization
certificate or subscription, transferable share, investment contract,
voting-trust certificate, certificate of deposit for security or fractional
undivided interest in oil, gas or other mineral rights, any put, call, straddle,
option or privilege on any security (including a certificate of deposit) or on
any group or index of securities (including any interest therein or based on the
value thereof) or any put, call, straddle, option or privilege entered into on a
national securities exchange relating to foreign currency or, in general, any
interest or instrument commonly known as a "security", or any certificate for,
receipt for, guarantee of, or warrant or right to subscribe to purchase any of
the foregoing.
7. To the knowledge of the undersigned, the Company has not received notice
of any event which would or could affect the good standing of the Company with
the Secretary of State or other relevant Governmental Authority of the state of
its formation or organization, including, without limitation, (a) failure to pay
any tax, penalty or interest owing to such state, (b) failure to file a tax
return with the applicable Governmental Authority in such state, (c) failure to
file annual or other statements with the Secretary of State or other applicable
Governmental Authority in such state or (d) failure to pay any fee due and owing
to the Secretary or State or other applicable Governmental Authority of such
state which, to the undersigned's knowledge, is due and owing.
8. To the best of the undersigned's knowledge, there are no actions, suits,
proceedings, claims or disputes pending or threatened or contemplated, at law,
in equity, in arbitration or before any Governmental Authority, by or against
the Company or against any of their respective properties or revenues or
injunctions, writs, temporary restraining orders or other orders of any nature
issued by any court or Governmental Authority, in any case, that (a) purport to
affect or pertain to the Credit Agreement or any other Loan Documents, or any of
the transactions contemplated thereby or (b) either individually or in the
aggregate, if determined adversely, could reasonably be expected to have a
Material Adverse Effect.
IN WITNESS WHEREOF, the undersigned has duly executed and delivered
this Officers' Certificate in Support of Opinion as of May 1, 2006.
By:
------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇
Title:
---------------------------------
ANNEX D
GOOD STANDING CERTIFICATES
See attached.
ANNEX E
APPLICABLE CONTRACTS
9.
1. The Collateral Trust Agreement and all related ancillary documents to
which the Credit Parties are signatories; and
2. The Indenture Trust Agreement and all related ancillary documents to
which the Credit Parties as signatories.
10.
11.
12.
Execution Version
Guaranty
GUARANTY, dated as of May 1, 2006 (this "Guaranty"), by each of
the entities listed on the signature pages hereof or that becomes a party hereto
pursuant to Section 24 (Additional Guarantors) hereof (each a "Subsidiary
Guarantor" and individually a "Guarantor"), in favor of the Administrative
Agent, each Lender, each Issuer and each other holder of an Obligation (as each
such term is defined in the Credit Agreement referred to below) (each, a
"Guarantied Party" and, collectively, the "Guarantied Parties").
WITNESSETH:
WHEREAS, pursuant to the Credit Agreement dated as of May __,
2006 (together with all appendices, exhibits and schedules thereto and as the
same may be amended, restated, supplemented or otherwise modified from time to
time, the "Credit Agreement"; capitalized terms used herein but not otherwise
defined herein shall have the meanings provided to them in the Credit Agreement)
among WCI Steel Acquisition, Inc. (the "Borrower"), the Lenders and Issuers
party thereto and Citicorp USA, Inc., as agent for the Lenders and Issuers (in
such capacity, the "Administrative Agent"), the Lenders and Issuers have
severally agreed to make extensions of credit to the Borrower upon the terms and
subject to the conditions set forth therein;
WHEREAS, each Guarantor is a direct or indirect Subsidiary of the
Borrower;
WHEREAS, each Guarantor will receive substantial direct and
indirect benefits from the making of the Loans, the issuance of the Letters of
Credit and the granting of the other financial accommodations to the Borrower
under the Credit Agreement; and
WHEREAS, a condition precedent to the obligation of the Lenders
and the Issuers to make their respective extensions of credit to the Borrower
under the Credit Agreement is that the Guarantors shall have executed and
delivered this Guaranty for the benefit of the Guarantied Parties.
NOW, THEREFORE, in consideration of the premises set forth above,
the terms and conditions contained herein, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto hereby agree as follows:
SECTION 1 GUARANTY
(a) To induce the Lenders to make the Loans and the Issuers to
issue Letters of Credit, each Guarantor hereby absolutely, unconditionally and
irrevocably guarantees, jointly with the other Guarantors and severally, as a
primary obligor and not merely as a surety, the full and punctual payment when
due and in the currency due, whether at stated maturity or earlier, by reason of
acceleration, mandatory prepayment or otherwise in accordance herewith or any
other Loan Document, of all the Obligations, whether or not from time to time
reduced or extinguished or hereafter increased or incurred, whether or not
recovery may be or hereafter may become barred by any statute of limitations,
whether or not enforceable as against the Borrower, whether now or hereafter
existing, and whether due or to become due, including principal, interest
(including interest at the contract rate applicable upon default accrued or
accruing after the commencement of any proceeding under the Bankruptcy Code, or
any applicable provisions of comparable state or foreign law, whether or not
such interest is an allowed claim in such
proceeding), reasonable fees and costs of collection. This Guaranty constitutes
a guaranty of payment and not of collection.
(b) Each Guarantor further agrees that, if (i) any payment made by
Borrower or any other Person and applied to the Obligations is at any time
annulled, avoided, set aside, rescinded, invalidated, declared to be fraudulent
or preferential or otherwise required to be refunded or repaid, or (ii) the
proceeds of Collateral are required to be returned by any Guarantied Party to
the Borrower, its estate, trustee, receiver or any other party, including any
Guarantor, under any bankruptcy law, equitable cause or any other Requirement of
Law, then, to the extent of such payment or repayment, any such Guarantor's
liability hereunder (and any Lien or other Collateral securing such liability)
shall be and remain in full force and effect, as fully as if such payment had
never been made. If, prior to any of the foregoing, this Guaranty shall have
been cancelled or surrendered (and if any Lien or other Collateral securing such
Guarantor's liability hereunder shall have been released or terminated by virtue
of such cancellation or surrender), this Guaranty (and such Lien or other
Collateral) shall be reinstated in full force and effect, and such prior
cancellation or surrender shall not diminish, release, discharge, impair or
otherwise affect the obligations of any such Guarantor in respect of the amount
of such payment (or any Lien or other Collateral securing such obligation).
SECTION 2 LIMITATION OF GUARANTY
Any term or provision of this Guaranty or any other Loan Document to
the contrary notwithstanding, the maximum aggregate amount of the Obligations
for which any Subsidiary Guarantor shall be liable shall not exceed the maximum
amount for which such Subsidiary Guarantor can be liable without rendering such
Subsidiary Guarantor's obligations under this Guaranty or any other Loan
Document, as it relates to such Subsidiary Guarantor, subject to avoidance under
applicable law relating to fraudulent conveyance or fraudulent transfer
(including Section 548 of the Bankruptcy Code or any applicable provisions of
comparable state law) (collectively, "Fraudulent Transfer Laws"), in each case
after giving effect (a) to all other liabilities of such Subsidiary Guarantor,
contingent or otherwise, that are relevant under such Fraudulent Transfer Laws
(specifically excluding, however, any liabilities of such Subsidiary Guarantor
in respect of intercompany Indebtedness to the Borrower to the extent that such
Indebtedness would be discharged in an amount equal to the amount paid by such
Subsidiary Guarantor hereunder) and (b) to the value as assets of such
Subsidiary Guarantor (as determined under the applicable provisions of such
Fraudulent Transfer Laws) of any rights to subrogation, contribution,
reimbursement, indemnity or similar rights held by such Subsidiary Guarantor
pursuant to (i) applicable Requirements of Law, (ii) Section 3 (Contribution) of
this Guaranty or (iii) any other Contractual Obligations providing for an
equitable allocation among such Subsidiary Guarantor and other Subsidiaries or
Affiliates of the Borrower of obligations arising under this Guaranty or other
guaranties of the Obligations by such parties.
SECTION 3 CONTRIBUTION
To the extent that any Subsidiary Guarantor shall be required
hereunder to pay a portion of the Obligations exceeding the greater of (a) the
amount of the economic benefit actually received by such Subsidiary Guarantor
from the Revolving Loans and the other financial accommodations provided to the
Borrower under the Loan Documents and (b) the amount such Subsidiary Guarantor
would otherwise have paid if such Subsidiary Guarantor had paid the aggregate
amount of the Obligations (excluding the amount thereof repaid by the Borrower
and the Borrower) in the same proportion as such Subsidiary Guarantor's net
worth at the date
4
enforcement is sought hereunder bears to the aggregate net worth of all the
Subsidiary Guarantors at the date enforcement is sought hereunder, then such
Guarantor shall be reimbursed by such other Subsidiary Guarantors for the amount
of such excess, pro rata, based on the respective net worths of such other
Subsidiary Guarantors at the date enforcement hereunder is sought.
SECTION 4 AUTHORIZATION; OTHER AGREEMENTS
The Guarantied Parties are hereby authorized, without notice to, or
demand upon, any Guarantor, which notice and demand requirements each are
expressly waived hereby, and without discharging or otherwise affecting the
obligations of such Guarantor hereunder (which obligations shall remain absolute
and unconditional notwithstanding any such action or omission to act), from time
to time, to do each of the following:
(a) supplement, renew, extend, accelerate or otherwise change the time
for payment of, or other terms relating to, the Obligations, or any part of
them, or otherwise modify, amend or change the terms of any promissory note or
other agreement, document or instrument (including the other Loan Documents) now
or hereafter executed by the Borrower and delivered to the Guarantied Parties or
any of them, including any increase or decrease of principal or the rate of
interest thereon;
(b) waive or otherwise consent to noncompliance with any provision of
any instrument evidencing the Obligations, or any part thereof, or any other
instrument or agreement in respect of the Obligations (including the other Loan
Documents) now or hereafter executed by the Borrower and delivered to the
Guarantied Parties or any of them;
(c) accept partial payments on the Obligations;
(d) receive, take and hold additional security or collateral for the
payment of the Obligations or any part of them and exchange, enforce, waive,
substitute, liquidate, terminate, abandon, fail to perfect, subordinate,
transfer, otherwise alter and release any such additional security or
collateral;
(e) settle, release, compromise, collect or otherwise liquidate the
Obligations or accept, substitute, release, exchange or otherwise alter, affect
or impair any security or collateral for the Obligations or any part of them or
any other guaranty therefor, in any manner;
(f) add, release or substitute any one or more other guarantors,
makers or endorsers of the Obligations or any part of them and otherwise deal
with the Borrower or any other guarantor, maker or endorser;
(g) apply to the Obligations any payment or recovery (x) from the
Borrower, from any other guarantor, maker or endorser of the Obligations or any
part of them or (y) from any Guarantor in such order as provided herein, in each
case whether such Obligations are secured or unsecured or guaranteed or not
guaranteed by others;
(h) apply to the Obligations any payment or recovery from any
Guarantor of the Obligations or any sum realized from security furnished by such
Guarantor upon its indebtedness or obligations to the Guarantied Parties or any
of them; and
5
(i) refund at any time any payment received by any Guarantied Party in
respect of any Obligation, and payment to such Guarantied Party of the amount so
refunded shall be fully guaranteed hereby even though prior thereto this
Guaranty shall have been cancelled or surrendered (or any release or termination
of any Collateral by virtue thereof), and such prior cancellation or surrender
shall not diminish, release, discharge, impair or otherwise affect the
obligations of any Guarantor hereunder in respect of the amount so refunded (and
any Collateral so released or terminated shall be reinstated with respect to
such obligations);
even if any right of reimbursement or subrogation or other right or remedy of
any Guarantor is extinguished, affected or impaired by any of the foregoing
(including any election of remedies by reason of any judicial, non-judicial or
other proceeding in respect of the Obligations that impairs any subrogation,
reimbursement or other right of such Guarantor).
SECTION 5 GUARANTY ABSOLUTE AND UNCONDITIONAL
Each Guarantor hereby waives any defense of a surety or guarantor or
any other obligor on any obligations arising in connection with or in respect of
any of the following and hereby agrees that its obligations under this Guaranty
are absolute and unconditional and shall not be discharged or otherwise affected
as a result of any of the following:
(a) the invalidity or unenforceability of any of the Borrower's
obligations under the Credit Agreement or any other Loan Document or any other
agreement or instrument relating thereto, or any security for, or other guaranty
of the Obligations or any part of them, or the lack of perfection or continuing
perfection or failure of priority of any security for the Obligations or any
part of them;
(b) the absence of any attempt to collect the Obligations or any part
of them from the Borrower or other action to enforce the same;
(c) failure by any Guarantied Party to take any steps to perfect and
maintain any Lien on, or to preserve any rights to, any Collateral;
(d) any Guarantied Party's election, in any proceeding instituted
under chapter 11 of the Bankruptcy Code, of the application of Section
1111(b)(2) of the Bankruptcy Code or any applicable provisions of comparable
state or foreign law;
(e) any borrowing or grant of a Lien by the Borrower, as debtor in
possession, or extension of credit, under Section 364 of the Bankruptcy Code or
any applicable provisions of comparable state or foreign law;
(f) the disallowance, under Section 502 of the Bankruptcy Code, of all
or any portion of any Guarantied Party's claim (or claims) for repayment of the
Obligations;
(g) any use of cash collateral under Section 363 of the Bankruptcy
Code;
(h) any agreement or stipulation as to the provision of adequate
protection in any bankruptcy proceeding;
(i) the avoidance of any Lien in favor of the Guarantied Parties or
any of them for any reason;
6
(j) any bankruptcy, insolvency, reorganization, arrangement,
readjustment of debt, liquidation or dissolution proceeding commenced by or
against the Borrower, any Guarantor or any of the Borrower's other Subsidiaries,
including any discharge of, or bar or stay against collecting, any Obligation
(or any part of them or interest thereon) in or as a result of any such
proceeding;
(k) failure by any Guarantied Party to file or enforce a claim against
the Borrower or its estate in any bankruptcy or insolvency case or proceeding;
(l) any action taken by any Guarantied Party if such action is
authorized hereby;
(m) any election following the occurrence of an Event of Default by
any Guarantied Party to proceed separately against the personal property
Collateral in accordance with such Guarantied Party's rights under the UCC or,
if the Collateral consists of both personal and real property, to proceed
against such personal and real property in accordance with such Guarantied
Party's rights with respect to such real property;
(n) any change in the corporate existence, ownership or structure of
the Borrower or any other Loan Party;
(o) any defense, set-off or counterclaim (other than a defense of
payment or performance) which may at any time be available to or be asserted by
any Guarantor or any other Person against any Guarantied Party;
(p) any Requirement of Law affecting any term of any Guarantor's
obligations under this Guaranty; or
(q) any other circumstance that might otherwise constitute a legal or
equitable discharge or defense of a surety or guarantor or any other obligor on
any obligations, other than the payment in full of the Obligations.
SECTION 6 WAIVERS
Each Guarantor hereby waives diligence, promptness, presentment,
demand for payment or performance and protest and notice of protest, notice of
acceptance and any other notice in respect of the Obligations or any part of
them, and any defense arising by reason of any disability or other defense of
the Borrower. Each Guarantor shall not, until the Obligations are irrevocably
paid in full and the Revolving Credit Commitments have been terminated, assert
any claim or counterclaim it may have against the Borrower or set off any of its
obligations to the Borrower against any obligations of the Borrower to it. In
connection with the foregoing, each Guarantor covenants that its obligations
hereunder shall not be discharged, except by complete performance.
SECTION 7 RELIANCE
Each Guarantor hereby assumes responsibility for keeping itself
informed of the financial condition of the Borrower and any endorser and other
guarantor of all or any part of the Obligations, and of all other circumstances
bearing upon the risk of nonpayment of the Obligations, or any part thereof,
that diligent inquiry would reveal, and each Guarantor hereby
7
agrees that no Guarantied Party shall have any duty to advise any Guarantor of
information known to it regarding such condition or any such circumstances. In
the event any Guarantied Party, in its sole discretion, undertakes at any time
or from time to time to provide any such information to any Guarantor, such
Guarantied Party shall be under no obligation (a) to undertake any investigation
not a part of its regular business routine, (b) to disclose any information that
such Guarantied Party, pursuant to accepted or reasonable commercial finance or
banking practices, wishes to maintain confidential or (c) to make any other or
future disclosures of such information or any other information to any
Guarantor.
SECTION 8 WAIVER OF SUBROGATION AND CONTRIBUTION RIGHTS
Until the Obligations have been irrevocably paid in full and the
Revolving Credit Commitments have been terminated, the Guarantors shall not
enforce or otherwise exercise any right of subrogation to any of the rights of
the Guarantied Parties or any part of them against the Borrower or any right of
reimbursement or contribution or similar right against the Borrower by reason of
this Agreement or by any payment made by any Guarantor in respect of the
Obligations.
SECTION 9 SUBORDINATION
Each Guarantor hereby agrees that any Indebtedness of the Borrower now
or hereafter owing to any Guarantor, whether heretofore, now or hereafter
created (the "Guarantor Subordinated Debt"), is hereby subordinated to all of
the Obligations and that, except as permitted under Section 8.5 (Restricted
Payments) of the Credit Agreement, the Guarantor Subordinated Debt shall not be
paid in whole or in part until the Obligations have been paid in full and this
Guaranty is terminated and of no further force or effect. No Guarantor shall
accept any payment of or on account of any Guarantor Subordinated Debt at any
time in contravention of the foregoing. Upon the occurrence and during the
continuance of an Event of Default, the Borrower shall pay to the Administrative
Agent any payment of all or any part of the Guarantor Subordinated Debt and any
amount so paid to the Administrative Agent shall be applied to payment of the
Obligations as provided in Section 2.13(f) (Payments and Computations) of the
Credit Agreement. Each payment on the Guarantor Subordinated Debt received in
violation of any of the provisions hereof shall be deemed to have been received
by such Guarantor as trustee for the Guarantied Parties and shall be paid over
to the Administrative Agent immediately on account of the Obligations, but
without otherwise affecting in any manner such Guarantor's liability hereof.
Each Guarantor agrees to file all claims against the Borrower in any bankruptcy
or other proceeding in which the filing of claims is required by law in respect
of any Guarantor Subordinated Debt, and the Administrative Agent shall be
entitled to all of such Guarantor's rights thereunder. If for any reason a
Guarantor fails to file such claim at least ten Business Days prior to the last
date on which such claim should be filed, such Guarantor hereby irrevocably
appoints the Administrative Agent as its true and lawful attorney-in-fact and is
hereby authorized to act as attorney-in-fact in such Guarantor's name to file
such claim or, in the Administrative Agent's discretion, to assign such claim to
and cause proof of claim to be filed in the name of the Administrative Agent or
its nominee. In all such cases, whether in administration, bankruptcy or
otherwise, the person or persons authorized to pay such claim shall pay to the
Administrative Agent the full amount payable on the claim in the proceeding,
and, to the full extent necessary for that purpose, each Guarantor hereby
assigns to the Administrative Agent all of such Guarantor's rights to any
payments or distributions to which such Guarantor otherwise would be entitled.
If the amount so paid is greater than such Guarantor's liability hereunder, the
Administrative Agent shall pay the excess amount to the party entitled thereto.
In addition, each Guarantor hereby
8
irrevocably appoints the Administrative Agent as its attorney-in-fact to
exercise all of such Guarantor's voting rights in connection with any bankruptcy
proceeding or any plan for the reorganization of the Borrower.
SECTION 10 DEFAULT; REMEDIES
The obligations of each Guarantor hereunder are independent of and
separate from the Obligations. If any Obligation is not paid when due, or upon
any Event of Default hereunder or upon any default by the Borrower as provided
in any other instrument or document evidencing all or any part of the
Obligations, the Administrative Agent may, at its sole election, proceed
directly and at once, without notice, against any Guarantor to collect and
recover the full amount or any portion of the Obligations then due, without
first proceeding against the Borrower or any other guarantor of the Obligations,
or against any Collateral under the Loan Documents or joining the Borrower or
any other guarantor in any proceeding against any Guarantor. At any time after
maturity of the Obligations, the Administrative Agent may (unless the
Obligations have been irrevocably paid in full), without notice to any Guarantor
and regardless of the acceptance of any Collateral for the payment hereof,
appropriate and apply toward the payment of the Obligations (a) any indebtedness
due or to become due from any Guarantied Party to such Guarantor and (b) any
moneys, credits or other property belonging to such Guarantor at any time held
by or coming into the possession of any Guarantied Party or any of its
respective Affiliates.
SECTION 11 IRREVOCABILITY
This Guaranty shall be irrevocable as to the Obligations (or any part
thereof) until the Commitments have been terminated and all monetary Obligations
then outstanding have been irrevocably repaid in cash, at which time this
Guaranty shall automatically be cancelled. Upon such cancellation and at the
written request of any Guarantor or its successors or assigns, and at the cost
and expense of such Guarantor or its successors or assigns, the Administrative
Agent shall execute in a timely manner a satisfaction of this Guaranty and such
instruments, documents or agreements as are necessary or desirable to evidence
the termination of this Guaranty.
SECTION 12 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 an Event of Default, each Guarantied
Party and each Affiliate of a Guarantied Party may, without notice to any
Guarantor and regardless of the acceptance of any security or collateral for the
payment hereof, to set off and to appropriate and apply toward the payment of
all or any part of the Obligations (a) any indebtedness due or to become due
from such Guarantied Party or Affiliate to such Guarantor and (b) any moneys,
credits or other property belonging to such Guarantor, at any time held by, or
coming into, the possession of such Guarantied Party or Affiliate.
SECTION 13 NO MARSHALLING
Each Guarantor consents and agrees that no Guarantied Party or Person
acting for or on behalf of any Guarantied Party shall be under any obligation to
marshal any assets in favor of any Guarantor or against or in payment of any or
all of the Obligations.
9
SECTION 14 ENFORCEMENT; WAIVERS; AMENDMENTS
(a) No delay on the part of any Guarantied Party in the exercise of
any right or remedy arising under this Guaranty, the Credit Agreement, any other
Loan Document or otherwise with respect to all or any part of the Obligations,
the Collateral or any other guaranty of or security for all or any part of the
Obligations shall operate as a waiver thereof, and no single or partial exercise
by any such Person of any such right or remedy shall preclude any further
exercise thereof. Failure by any Guarantied Party at any time or times hereafter
to require strict performance by the Borrower, any Guarantor, any other
guarantor of all or any part of the Obligations or any other Person of any
provision, warranty, term or condition contained in any Loan Document now or at
any time hereafter executed by any such Persons and delivered to any Guarantied
Party shall not waive, affect or diminish any right of any Guarantied Party at
any time or times hereafter to demand strict performance thereof and such right
shall not be deemed to have been waived by any act (except by a written
instrument pursuant to Section 14(b)) or knowledge of any Guarantied Party, or
its respective agents, officers or employees. No waiver of any Event of Default
by any Guarantied Party shall operate as a waiver of any other Event of Default
or the same Event of Default on a future occasion, and no action by any
Guarantied Party permitted hereunder shall in any way affect or impair any
Guarantied Party's rights and remedies or the obligations of any Guarantor under
this Guaranty. Any determination by a court of competent jurisdiction of the
amount of any principal or interest owing by the Borrower to a Guarantied Party
shall be conclusive and binding on each Guarantor irrespective of whether such
Guarantor was a party to the suit or action in which such determination was
made.
(b) None of the terms or provisions of this Guaranty may be waived,
amended, supplemented or modified except in accordance with Section 11.1
(Amendments, Waivers, Etc.) of the Credit Agreement.
SECTION 15 SUCCESSORS AND ASSIGNS
This Guaranty shall be binding upon each Guarantor and upon the
successors and assigns of such Guarantors and shall inure to the benefit of the
Guarantied Parties and their respective successors and assigns; all references
herein to the Borrower and to the Guarantors shall be deemed to include their
respective successors and assigns. The successors and assigns of the Guarantors
and the Borrower shall include, without limitation, their respective receivers,
trustees and debtors-in-possession. All references to the singular shall be
deemed to include the plural where the context so requires.
SECTION 16 REPRESENTATIONS AND WARRANTIES; COVENANTS
Each Guarantor hereby (a) represents and warrants that the
representations and warranties as to it made by the Borrower in Article IV
(Representations and Warranties) of the Credit Agreement are true and correct on
each date as required by Section 3.2(b)(i) (Conditions Precedent to Each Loan
and Letter of Credit) of the Credit Agreement and (b) agrees to take, or refrain
from taking, as the case may be, each action necessary to be taken or not taken,
as the case may be, so that no Default or Event of Default is caused by the
failure to take such action or to refrain from taking such action by such
Guarantor.
10
SECTION 17 GOVERNING LAW
This Guaranty and the rights and obligations of the parties hereto
shall be governed by, and construed and interpreted in accordance with, the law
of the State of New York.
SECTION 18 SUBMISSION TO JURISDICTION; SERVICE OF PROCESS
(a) Any legal action or proceeding with respect to this Guaranty, and
any other Loan Document, may be brought in the courts of the State of New York
or of the United States of America for the Southern District of New York, and,
by execution and delivery of this Agreement, each Guarantor hereby accepts for
itself and in respect of its property, generally and unconditionally, the
jurisdiction of the aforesaid courts. The parties hereto hereby irrevocably
waive any objection, including any objection to the laying of venue or based on
the grounds of forum non conveniens, that any of them may now or hereafter have
to the bringing of any such action or proceeding in such respective
jurisdictions.
(b) Each Guarantor irrevocably consents to the service of any and all
process in any such action or proceeding by the mailing (by registered or
certified mail, postage prepaid) of copies of such process to such Guarantor
care of the Borrower at the Borrower's address specified in Section 11.8
(Notices, Etc.) of the Credit Agreement or at such other address as the Borrower
may specify pursuant to such Section 11.8. Each Guarantor agrees that a final
judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law.
(c) Nothing contained in this Section 18 (Submission to Jurisdiction;
Service of Process) shall affect the right of the Administrative Agent or any
other Guarantied Party to serve process in any other manner permitted by law or
commence legal proceedings or otherwise proceed against a Guarantor in any other
jurisdiction.
(d) If for the purposes of obtaining judgment in any court it is
necessary to convert a sum due hereunder in Dollars into another currency, the
parties hereto agree, to the fullest extent they may effectively do so, that the
rate of exchange used shall be that at which in accordance with normal banking
procedures the Administrative Agent could purchase Dollars with such other
currency at the spot rate of exchange quoted by the Administrative Agent at
11:00 a.m. (New York time) on the Business Day preceding that on which final
judgment is given, for the purchase of Dollars, for delivery two Business Days
thereafter.
SECTION 19 WAIVER OF JUDICIAL BOND
To the fullest extent permitted by applicable law, the Guarantor
waives the requirement to post any bond that otherwise may be required of any
Guarantied Party in connection with any judicial proceeding to enforce such
Guarantied Party's rights to payment hereunder, security interest in or other
rights to the Collateral or in connection with any other legal or equitable
action or proceeding arising out of, in connection with, or related to this
Guaranty and the Loan Documents to which it is a party.
SECTION 20 CERTAIN TERMS
The following rules of interpretation shall apply to this Guaranty:
(a) the terms "herein," "hereof," "hereto" and "hereunder" and similar terms
refer to this Guaranty as a whole
11
and not to any particular Article, Section, subsection or clause in this
Guaranty, (b) unless otherwise indicated, references herein to an Exhibit,
Article, Section, subsection or clause refer to the appropriate Exhibit to, or
Article, Section, subsection or clause in this Guaranty and (c) the term
"including" means "including without limitation" except when used in the
computation of time periods.
SECTION 21 WAIVER OF JURY TRIAL
EACH OF THE ADMINISTRATIVE AGENT, THE OTHER GUARANTIED PARTIES AND
EACH GUARANTOR IRREVOCABLY WAIVES TRIAL BY JURY IN ANY ACTION OR PROCEEDING WITH
RESPECT TO THIS GUARANTY AND ANY OTHER LOAN DOCUMENT.
SECTION 22 NOTICES
Any notice or other communication herein required or permitted shall
be given as provided in Section 11.8 (Notices, Etc.) of the Credit Agreement
and, in the case of any Guarantor, to such Guarantor in care of the Borrower.
SECTION 23 SEVERABILITY
Wherever possible, each provision of this Guaranty shall be
interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Guaranty shall be prohibited by or invalid under
such law, such provision shall be ineffective to the extent of such prohibition
or invalidity without invalidating the remainder of such provision or the
remaining provisions of this Guaranty.
SECTION 24 ADDITIONAL GUARANTORS
Each of the Guarantors agrees that, if, pursuant to Section 7.11(b)
(Additional Collateral and Guaranties) of the Credit Agreement, the Borrower
shall be required to cause any Subsidiary thereof that is not a Guarantor to
become a Guarantor hereunder, or if for any reason the Borrower desires any such
Subsidiary to become a Guarantor hereunder, such Subsidiary shall execute and
deliver to the Administrative Agent a Guaranty Supplement in substantially the
form of Exhibit A (Guaranty Supplement) attached hereto and shall thereafter for
all purposes be a party hereto and have the same rights, benefits and
obligations as a Guarantor party hereto on the Closing Date.
SECTION 25 COLLATERAL
Each Guarantor hereby acknowledges and agrees that its obligations
under this Guaranty are secured pursuant to the terms and provisions of the
Collateral Documents executed by it in favor of the Administrative Agent, for
the benefit of the Secured Parties, and covenants that it shall not grant any
Lien with respect to its Property in favor, or for the benefit, of any Person
other than the Administrative Agent, for the benefit of the Secured Parties
except as otherwise permitted by Section 8.2 (Liens, etc.) of the Credit
Agreement.
SECTION 26 WAIVER OF CONSEQUENTIAL DAMAGES
EACH GUARANTOR HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE
MAXIMUM EXTENT NOT PROHIBITED BY LAW, ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER
ANY
12
SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGE IN ANY LEGAL ACTION OR
PROCEEDING IN RESPECT OF THIS GUARANTY OR ANY OTHER LOAN DOCUMENT.
SECTION 27 ENTIRE AGREEMENT
This Guaranty, taken together with all of the other Loan Documents
executed and delivered by the Guarantors, represents the entire agreement and
understanding of the parties hereto and supersedes all prior understandings,
written and oral, relating to the subject matter hereof.
SECTION 28 COUNTERPARTS
This Guaranty may be executed in any number of separate counterparts
and by different parties in separate counterparts, each of which when so
executed shall be deemed to be an original and all of which taken together shall
constitute one and the same agreement. Signature pages may be detached from
multiple counterparts and attached to a single counterpart so that all signature
pages are attached to the same document. Delivery of an executed counterpart by
facsimile transmission or electronic mail shall be effective as delivery of a
manually executed counterpart.
[SIGNATURE PAGES FOLLOW]
13
IN WITNESS WHEREOF, this Guaranty has been duly executed by the
Guarantors as of the day and year first set forth above.
GUARANTORS:
WCI STEEL METALLURGICAL SERVICES
ACQUISITION, INC.,
as Guarantor
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
WCI STEEL PRODUCTION CONTROL SERVICES
ACQUISITION, INC.,
as Guarantor
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
YOUNGSTOWN SINTER ACQUISITION COMPANY,
as Guarantor
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
WCI STEEL SALES ACQUISITION, L.P.,
as Guarantor
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
[SIGNATURE PAGE TO GUARANTY OF WCI STEEL CREDIT AGREEMENT]
ACKNOWLEDGED AND AGREED
as of the date first above written:
CITICORP USA, INC.
as Administrative Agent
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
[SIGNATURE PAGE TO GUARANTY OF WCI STEEL, INC. CREDIT AGREEMENT]
The undersigned hereby agrees to be bound as a Guarantor for purposes
of the Guaranty, dated as of May __, 2006 (the "Guaranty"), among the Guarantors
listed on the signature pages thereof and acknowledged by Citicorp USA, Inc., as
Administrative Agent, and the undersigned hereby acknowledges receipt of a copy
of the Guaranty. The undersigned hereby represents and warrants that each of the
representations and warranties contained in Section 16 (Representations and
Warranties; Covenants) of the Guaranty applicable to it is true and correct on
and as the date hereof as if made on and as of such date. Capitalized terms used
herein but not defined herein are used with the meanings given them in the
Guaranty.
IN WITNESS WHEREOF, the undersigned has caused this Guaranty
Supplement to be duly executed and delivered as of ___________, ____.
[NAME OF SUBSIDIARY GUARANTOR]
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
ACKNOWLEDGED AND AGREED
as of the date first above written:
CITICORP USA, INC.
as Administrative Agent
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
EXECUTION VERSION
PLEDGE AND SECURITY AGREEMENT
Dated as of May 1, 2006
among
WCI STEEL ACQUISITION, INC.
as a Grantor
and
Each Other Grantor
From Time to Time Party Hereto
and
CITICORP USA, INC.
as Administrative Agent
WEIL, GOTSHAL & ▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
THIS PLEDGE AND SECURITY AGREEMENT IS SUBJECT TO THE TERMS AND
PROVISIONS OF THE INTERCREDITOR AGREEMENT, DATED AS OF MAY 1, 2006 (AS SUCH
AGREEMENT MAY BE AMENDED, AMENDED AND RESTATED, SUPPLEMENTED OR OTHERWISE
MODIFIED FROM TIME, THE "INTERCREDITOR AGREEMENT"), AMONG WCI STEEL ACQUISITION,
INC., AS BORROWER, CITICORP, USA, INC., AS ADMINISTRATIVE AGENT, AND THE BANK OF
NEW YORK TRUST COMPANY, N.A.,] AS COLLATERAL TRUSTEE.
PLEDGE AND SECURITY AGREEMENT, dated as of May 1, 2006, by WCI STEEL
ACQUISITION, INC. (the "Borrower") and each of the other entities listed on the
signature pages hereof or that becomes a party hereto pursuant to Section 18.10
(Additional Grantors) (each a "Grantor" and, collectively, the "Grantors"), in
favor of Citicorp USA, Inc. ("CUSA"), as agent (in such capacity, the
"Administrative Agent") for the Secured Parties (as defined in the Credit
Agreement referred to below).
WITNESSETH:
WHEREAS, pursuant to the Credit Agreement, dated as of May 1, 2006 (as
the same may be amended, restated, supplemented or otherwise modified from time
to time, the "Credit Agreement"), among the Borrower, the Lenders and Issuers
party thereto and CUSA, as agent for the Lenders and Issuers, the Lenders and
the Issuers have severally agreed to make extensions of credit to the Borrower
upon the terms and subject to the conditions set forth therein;
WHEREAS, the Grantors other than the Borrower are party to the
Guaranty pursuant to which they have guaranteed the Obligations (as defined in
the Credit Agreement); and
WHEREAS, it is a condition precedent to the obligation of the Lenders
and the Issuers to make their respective extensions of credit to the Borrower
under the Credit Agreement that the Grantors shall have executed and delivered
this Agreement to the Administrative Agent;
NOW, THEREFORE, in consideration of the premises and to induce the
Lenders, the Issuers and the Administrative Agent to enter into the Credit
Agreement and to induce the Lenders and the Issuers to make their respective
extensions of credit to the Borrower thereunder, each Grantor hereby agrees with
the Administrative Agent as follows:
ARTICLE XII Defined Terms
SECTION 12.1 Definitions
(a) Unless otherwise defined herein, capitalized terms defined in the
Credit Agreement and used herein have the meanings given to them in the Credit
Agreement.
(b) Terms used herein without definition that are defined in the UCC
have the meanings given to them in the UCC, including the following terms (which
are capitalized herein):
"Account Debtor"
"Account"
"Certificated Security"
"Chattel Paper"
"Commercial Tort Claim"
1
"Commodity Account"
"Control Account"
"Deposit Account"
"Documents"
"Entitlement Holder"
"Entitlement Order"
"Equipment"
"Financial Asset"
"Fixtures"
"General Intangible"
"Goods"
"Instruments"
"Inventory"
"Investment Property"
"Letter-of-Credit Right"
"Proceeds"
"Securities Account"
"Securities Intermediary"
"Security"
"Security Entitlement"
"Software"
"Supporting obligation"
(c) The following terms shall have the following meanings:
"Additional Pledged Collateral" means any Pledged Collateral acquired
by any Grantor after the date hereof and in which a security interest is granted
pursuant to Section 2.2 (Grant of Security Interest in Collateral), including,
to the extent a security interest is granted therein pursuant to Section 2.2
(Grant of Security Interest in Collateral), (i) all Stock and Stock
2
Equivalents of any Person that are acquired by any Grantor after the date
hereof, together with all certificates, instruments or other documents
representing any of the foregoing and all Security Entitlements of any Grantor
in respect of any of the foregoing, (ii) all additional Indebtedness from time
to time owed to any Grantor by any obligor on the Pledged Debt Instruments and
the Instruments evidencing such Indebtedness and (iii) all interest, cash,
Instruments and other property or Proceeds from time to time received,
receivable or otherwise distributed in respect of or in exchange for any of the
foregoing. "Additional Pledged Collateral" may be General Intangibles,
Instruments or Investment Property.
"Agreement" means this Pledge and Security Agreement.
"Collateral" means the Credit Agreement Collateral and the Indenture
Collateral.
"Copyright Licenses" means any written agreement naming any Grantor as
licensor or licensee granting any right under any Copyright, including the grant
of any right to copy, publicly perform, create derivative works, manufacture,
distribute, exploit or sell materials derived from any Copyright.
"Copyrights" means (a) all copyrights arising under the laws of the
United States, any other country or any political subdivision thereof, whether
registered or unregistered and whether published or unpublished, all
registrations and recordings thereof and all applications in connection
therewith, including all registrations, recordings and applications in the
United States Copyright Office or in any foreign counterparts thereof, and (b)
the right to obtain all renewals thereof.
"Credit Agreement Collateral" has the meaning ascribed in Section
2.1(a).
"Deposit Account Control Agreement" means a letter agreement,
substantially in the form of Annex 1 (Form of Deposit Account Control Agreement)
or otherwise containing similar terms and (with such changes as may reasonably
be agreed to by the Administrative Agent), executed by the Grantor, the
Administrative Agent and the relevant financial institution, as may be amended,
restated, modified or supplemented from time to time.
"Domestic Person" means any "United States person" under and as
defined in Section 7701(a)(30) of the Code.
"Excluded Equity" means any Voting Stock in excess of 66% of the total
outstanding Voting Stock of any direct Subsidiary of any Grantor that is a
Non-Domestic Person. For the purposes of this definition, "Voting Stock" means,
as to any issuer, the issued and outstanding shares of each class of capital
stock or other ownership interests of such issuer entitled to vote (within the
meaning of Treasury Regulations Section 1.956-2(c)(2)).
"Excluded Property" means, collectively, (i) Excluded Equity, (ii) any
permit, lease, license, contract, instrument or other agreement held by any
Grantor that prohibits or requires the consent of any Person other than the
Borrower and its Affiliates as a condition to the creation by such Grantor of a
Lien thereon, or any permit, lease, license contract or other agreement held by
any Grantor to the extent that any Requirement of Law applicable thereto
prohibits the creation of a Lien thereon, but only, in each case, to the extent,
and for so long as, such prohibition is not terminated or rendered unenforceable
or otherwise deemed ineffective by the UCC or any other Requirement of Law (iii)
any "intent to use" Trademark applications for
3
which a statement of use has not been filed (but only until such statement is
filed) and (iv) Equipment owned by any Grantor that is subject to a purchase
money Lien or a Capital Lease if the contract or other agreement in which such
Lien is granted (or in the documentation providing for such Capital Lease)
prohibits or requires the consent of any Person other than the Borrower and its
Affiliates as a condition to the creation of any other Lien on such Equipment;
provided, however, "Excluded Property" shall not include any Proceeds,
substitutions or replacements of Excluded Property (unless such Proceeds,
substitutions or replacements would constitute Excluded Property).
"First Priority Collateral Liens" has the meaning ascribed in Section
2.2(a)
"Indenture Collateral" has the meaning ascribed in Section 2.1(b).
"Intellectual Property" means, collectively, all rights, priorities
and privileges of any Grantor relating to intellectual property, whether arising
under United States, multinational or foreign laws or otherwise, including
Copyrights, Copyright Licenses, Patents, Patent Licenses, Trademarks, Trademark
Licenses, trade secrets and Internet domain names, and all rights to ▇▇▇ at law
or in equity for any infringement or other impairment thereof, including the
right to receive all proceeds and damages therefrom.
"Intercompany Note" means any promissory note evidencing loans made by
any Grantor or any of its Subsidiaries to any of its Subsidiaries or another
Grantor.
"Intercreditor Agreement" has the meaning ascribed in the legend to
this Agreement.
"LLC" means each limited liability company in which a Grantor has an
interest, including those set forth on Schedule 2 (Pledged Collateral).
"LLC Agreement" means each operating agreement with respect to an LLC,
as each agreement has heretofore been, and may hereafter be, amended, restated,
supplemented or otherwise modified from time to time.
"Material Intellectual Property" means Intellectual Property owned by
or licensed to a Grantor and material to the conduct of any Grantor's business.
"Partnership" means each partnership in which a Grantor has an
interest, including those set forth on Schedule 2 (Pledged Collateral).
"Partnership Agreement" means each partnership agreement governing a
Partnership, as each such agreement has heretofore been, and may hereafter be,
amended, restated, supplemented or otherwise modified.
"Patents" means (a) all letters patent of the United States, any other
country or any political subdivision thereof and all reissues and extensions
thereof, (b) all applications for letters patent of the United States or any
other country and all divisionals, continuations and continuations-in-part
thereof and (c) all rights to obtain any reissues, continuations or
continuations-in-part of the foregoing.
4
"Patent License" means all agreements, whether written or oral,
providing for the grant by or to any Grantor of any right to manufacture, have
manufactured, use, import, sell or offer for sale any invention covered in whole
or in part by a Patent.
"Pledged Certificated Stock" means all Certificated Securities and any
other Stock and Stock Equivalent of a Person evidenced by a certificate,
Instrument or other equivalent document, in each case owned by any Grantor,
including all Stock listed on Schedule 2 (Pledged Collateral).
"Pledged Collateral" means, collectively, the Pledged Stock, Pledged
Debt Instruments, any other Investment Property of any Grantor, all chattel
paper, certificates or other Instruments representing any of the foregoing and
all Security Entitlements of any Grantor in respect of any of the foregoing.
Pledged Collateral may be General Intangibles, Instruments or Investment
Property.
"Pledged Debt Instruments" means all right, title and interest of any
Grantor in Instruments evidencing any Indebtedness owed to such Grantor,
including all Indebtedness described on Schedule 2 (Pledged Collateral), issued
by the obligors named therein.
"Pledged Stock" means all Pledged Certificated Stock and all Pledged
Uncertificated Equity Interest. For purposes of this Agreement, the term
"Pledged Stock" shall not include any Excluded Equity.
"Pledged Uncertificated Equity Interest" means any Stock or Stock
Equivalent of any Person that is not a Pledged Certificated Stock, including all
right, title and interest of any Grantor as a limited or general partner in any
Partnership or as a member of any LLC and all right, title and interest of any
Grantor in, to and under any Partnership Agreement or LLC Agreement to which it
is a party.
"Receivable" shall mean any right to a monetary payment for goods
which have been sold, leased, licensed, assigned or otherwise disposed of, or
for services which have been rendered, whether or not such right is evidenced by
an Instrument or Chattel Paper and whether or not it has been earned by
performance (including, without limitation, any Account).
"Securities Account Control Agreement" means a letter agreement,
substantially in the form of Annex 2 (Form of Securities Account Control
Agreement) (or otherwise containing similar terms and with such changes as may
reasonably be agreed to by the Administrative Agent), executed by the relevant
Grantor, the Administrative Agent and the relevant Approved Securities
Intermediary.
"Second Priority Collateral Liens" has the meaning ascribed in Section
2.2(a)
"Securities Act" means the Securities Act of 1933, as amended.
"Trademark License" means any agreement, whether written or oral,
providing for the grant by or to any Grantor of any right to use any Trademark.
"Trademarks" means (a) all trademarks, trade names, corporate names,
company names, business names, fictitious business names, trade styles, service
marks, logos and other source or business identifiers, and, in each case, all
goodwill associated therewith, whether now
5
existing or hereafter adopted or acquired, all registrations and recordings
thereof and all applications in connection therewith, in each case whether in
the United States Patent and Trademark Office or in any similar office or agency
of the United States, any State thereof or any other country or any political
subdivision thereof, or otherwise, and all common-law rights related thereto,
and (b) the right to obtain all renewals thereof.
"UCC" means the Uniform Commercial Code as from time to time in effect
in the State of New York; provided, however, that, in the event that, by reason
of mandatory provisions of law, any of the attachment, perfection or priority of
the Administrative Agent's and the Secured Parties' security interest in any
Collateral is governed by the Uniform Commercial Code as in effect in a
jurisdiction other than the State of New York, the term "UCC" shall mean the
Uniform Commercial Code as in effect in such other jurisdiction for purposes of
the provisions hereof relating to such attachment, perfection or priority and
for purposes of definitions related to such provisions.
"Vehicles" means all vehicles covered by a certificate of title law of
any state.
SECTION 12.2 Certain Other Terms
(a) In this Agreement, in the computation of periods of time from a
specified date to a later specified date, the word "from" means "from and
including" and the words "to" and "until" each mean "to but excluding" and the
word "through" means "to and including."
(b) The terms "herein," "hereof," "hereto" and "hereunder" and similar
terms refer to this Agreement as a whole and not to any particular Article,
Section, subsection or clause in this Agreement.
(c) References herein to an Annex, Schedule, Article, Section,
subsection or clause refer to the appropriate Annex or Schedule to, or Article,
Section, subsection or clause in this Agreement.
(d) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.
(e) Where the context requires, provisions relating to any Collateral,
when used in relation to a Grantor, shall refer to such Grantor's Collateral or
any relevant part thereof.
(f) Any reference in this Agreement to a Loan Document shall include
all appendices, exhibits and schedules thereto, and, unless specifically stated
otherwise all amendments, restatements, supplements or other modifications
thereto, and as the same may be in effect at any time such reference becomes
operative.
(g) The term "including" means "including without limitation" except
when used in the computation of time periods.
(h) The terms "Lender," "Issuer," "Administrative Agent" and "Secured
Party" include their respective successors.
(i) References in this Agreement to any statute shall be to such
statute as amended or modified and in effect from time to time.
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ARTICLE XIII Grant of Security Interest
SECTION 13.1
(a) For the purposes of this Agreement, all of the following property
now owned or at any time hereafter acquired by a Grantor or in which such
Grantor now has or at any time in the future may acquire any right, title or
interest is collectively referred to as the "Credit Agreement Collateral":
(i) all Accounts;
(ii) all Chattel Paper;
(iii) all Deposit Accounts;
(iv) all Documents, except to the extent specified in Section 2.1(b)
as "Indenture Collateral";
(v) all General Intangibles, except to the extent specified in Section
2.1(b) as "Indenture Collateral";
(vi) all Instruments;
(vii) all Inventory;
(viii) all Investment Property;
(ix) all Letter-of-Credit Rights;
(x) all Vehicles;
(xi) the Commercial Tort Claims described on Schedule 7 (Commercial
Tort Claims) and on any supplement thereto received by the Administrative
Agent pursuant to Section 15.11 (Notice of Commercial Tort Claims);
(xii) all books and records pertaining to the other property described
in this Section 2.1(a), except to the extent specified in Section 2.1(b) as
"Indenture Collateral";
(xiii) all property of any Grantor held by the Administrative Agent or
any other Secured Party, including all property of every description, in
the possession or custody of or in transit to the Administrative Agent or
such Secured Party for any purpose, including safekeeping, collection or
pledge, for the account of such Grantor or as to which such Grantor may
have any right or power;
(xiv) all other Goods and personal property of such Grantor, whether
tangible or intangible and wherever located, except to the extent specified
in Section 2.1(b) as "Indenture Collateral"; and
(xv) to the extent not otherwise included, all Proceeds of any
Collateral described in (i) through (xiv) above;
7
provided, however, that "Credit Agreement Collateral" shall not include any
Excluded Property; and provided, further, that if and when any property that
would have otherwise constituted Credit Agreement Collateral shall cease to be
Excluded Property, such property shall be deemed at all times from and after the
date hereof to constitute Credit Agreement Collateral.
(b) For the purposes of this Agreement, all of the following property
now owned or at any time hereafter acquired by a Grantor or in which such
Grantor now has or at any time in the future may acquire any right, title or
interest is collectively referred to as the "Indenture Collateral":
(i) all Equipment;
(ii) all General Intangibles solely to the extent (A) primarily
related, and integral, to the development, construction, maintenance,
ownership and/or use of, or embedded in, any Real Property, Fixtures or
Equipment, including all licenses, permits, certificates, Software and
computer programs necessary for the use of such property, and (B) directly
derived or arising from, or giving rise to, any Real Property, Fixtures or
Equipment, including all Leases, Payment Intangibles, Supporting
Obligations, all know-how, warranties, guarantees, endorsements,
indemnifications and insurance policies and proceeds thereof to the extent
covering such property and all other rights and claims pertaining to such
property (but, in the case of this clause (B), only including Intellectual
Property that could otherwise be included in the scope of clause (A));
(iii) all Documents primarily pertaining to the development,
construction, maintenance, ownership and/or use of, any Real Property,
Fixtures or Equipment; and
(iv) all books and records primarily related, and integral, to the
development, construction, maintenance, ownership and/or use of, any Real
Property, Fixtures or Equipment.
provided, however, that "Indenture Collateral" shall not include any Excluded
Property; and provided, further, that if and when any property that would have
otherwise constituted Indenture Collateral shall cease to be Excluded Property,
such property shall be deemed at all times from and after the date hereof to
constitute Indenture Collateral.
SECTION 13.2 Grant of Security Interest in Collateral
(a) Each Grantor, as collateral security for the full, prompt and
complete payment and performance when due (whether at stated maturity, by
acceleration or otherwise) of the Secured Obligations of such Grantor, hereby
mortgages, pledges and hypothecates to the Administrative Agent for the benefit
of the Secured Parties, and grants to the Administrative Agent for the benefit
of the Secured Parties a (i) Lien on and security interest in, all of its right,
title and interest in, to and under the Credit Agreement Collateral of such
Grantor (the "First Priority Collateral Liens") and (ii) a Lien on and security
interest in, all of its right, title and interest in, to and under the Indenture
Collateral of such Grantor; provided, however, that, if and when any property
that at any time constituted Excluded Property becomes Indenture Collateral, the
Administrative Agent shall have, and at all times from and after the date hereof
be deemed to have had, a second priority security interest in such property (the
"Second Priority Collateral Liens"). The Second Priority Collateral Liens on any
or all of the Indenture Collateral shall be and are hereby rendered subordinate
and inferior in priority to the Liens of the New Senior Notes
8
and the Collateral Trust on such Indenture Collateral permitted by Section 8.2
(Liens, etc.) of the Credit Agreement.
(b) The Second Priority Collateral Liens on any or all of the
Indenture Collateral shall be and are hereby rendered subordinate and inferior
in priority to the Liens of the New Senior Notes and the Collateral Trust on
such Indenture Collateral permitted by Section 8.2 (Liens, etc.) of the Credit
Agreement. Subject to the Intercreditor Agreement between the Collateral Trust
and the Indenture Trustee, as may be amended from time to time, the Collateral
Trust is hereby made a third-party beneficiary to this Section 2.2(b).
SECTION 13.3 Cash Collateral Accounts
The Administrative Agent has established a Deposit Account at
Citibank, N.A., designated as "Citicorp USA, Inc. - WCI Steel Acquisition, Inc.
Concentration Account". Such Deposit Account shall be a Cash Collateral Account.
ARTICLE XIV Representations and Warranties
To induce the Lenders, the Issuers and the Administrative Agent to
enter into the Credit Agreement, each Grantor hereby represents and warrants
each of the following to the Administrative Agent, the Lenders, the Issuers and
the other Secured Parties:
SECTION 14.1 Title; No Other Liens
Except for the Lien granted to the Administrative Agent pursuant to
this Agreement and the other Liens permitted to exist on the Collateral under
the Credit Agreement, such Grantor (a) is the record and beneficial owner of the
Pledged Collateral pledged by it hereunder constituting Instruments or
Certificated Securities, (b) is the Entitlement Holder of all such Pledged
Collateral constituting Investment Property held in a Securities Account and (c)
has rights in or the power to transfer each other item of Collateral in which a
Lien is granted by it hereunder, free and clear of any other Lien.
SECTION 14.2 Perfection and Priority
The security interest granted pursuant to this Agreement shall
constitute a valid and continuing perfected security interest in favor of the
Administrative Agent in the Collateral for which perfection is governed by the
UCC or filing with the United States Copyright Office upon (i) in the case of
all Collateral in which a security interest may be perfected by filing a
financing statement under the UCC, the completion of the filings and other
actions specified on Schedule 3 (Filings) (which, in the case of all filings and
other documents referred to on such schedule, have been delivered to the
Administrative Agent in completed and duly executed form), (ii) the delivery to
the Administrative Agent of all Collateral consisting of Instruments and
Certificated Securities, in each case properly endorsed for transfer to the
Administrative Agent or in blank, and the keeping of such Collateral in New York
State by the Administrative Agent (iii) the execution of Securities Account
Control Agreements with respect to Investment Property not in certificated form,
(iv) the execution of Deposit Account Control Agreements with respect to all
Deposit Accounts of a Grantor and (v) all appropriate filings having been made
with the United States Copyright Office. Except with respect to the
subordination of the Parties' interest in the Indenture Collateral, such
security interest shall be prior to all other Liens on the Collateral
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except for Customary Permitted Liens having priority over the Administrative
Agent's Lien by operation of law or otherwise as permitted under the Credit
Agreement or Intercreditor Agreement.
SECTION 14.3 Jurisdiction of Organization; Chief Executive Office
Such Grantor's jurisdiction of organization, legal name,
organizational identification number, if any, and the location of such Grantor's
chief executive office or sole place of business, in each case as of the date
hereof, is specified on Schedule 1 (Jurisdiction of Organization; Principal
Executive Office).
SECTION 14.4 Inventory and Equipment
On the date hereof, such Grantor's Inventory and Equipment (other than
mobile goods and Inventory or Equipment in transit) are kept at the locations
listed on Schedule 4 (Location of Inventory and Equipment) and such Schedule 4
(Location of Inventory and Equipment).
SECTION 14.5 Pledged Collateral
(a) The Pledged Stock pledged hereunder by such Grantor is listed on
Schedule 2 (Pledged Collateral) and constitutes that percentage of the issued
and outstanding equity of all classes of each issuer thereof as set forth on
Schedule 2 (Pledged Collateral).
(b) All of the Pledged Stock (other than Pledged Uncertificated Equity
Interests) has been duly authorized, validly issued and is fully paid and
nonassessable.
(c) Each of the Pledged Stock constitutes the legal, valid and binding
obligation of the obligor with respect thereto, enforceable in accordance with
its terms, subject to the effects of applicable bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other similar laws
relating to or affecting creditors' rights generally, and general equitable
principles (whether considered in a proceeding in equity or at law).
(d) All Pledged Collateral and, when applicable, any Additional
Pledged Collateral, consisting of Certificated Securities or Instruments has
been delivered to the Administrative Agent in accordance with Section 15.4(a)
(Pledged Collateral) and Section 7.11 of the Credit Agreement. (e) All Pledged
Collateral held by a Securities Intermediary in a Securities Account is subject
to a Securities Account Control Account.
(f) Other than Pledged Stock constituting General Intangibles, there
is no Pledged Collateral other than that represented by Certificated Securities
or Instruments in the possession of the Administrative Agent or that consist of
Financial Assets held in a Securities Account that is subject to a Securities
Account Control Agreement.
SECTION 14.6 Accounts
No amount payable to such Grantor under or in connection with any
Account is evidenced by any Instrument or Chattel Paper that has not been
delivered to the Administrative
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Agent, properly endorsed for transfer, to the extent delivery is required by
Section 15.4 (Pledged Collateral).
SECTION 14.7 Intellectual Property
(a) Schedule 5 (Intellectual Property) lists all Material Intellectual
Property of such Grantor on the date hereof, separately identifying that owned
by such Grantor and that licensed to such Grantor. The Material Intellectual
Property set forth on Schedule 5 (Intellectual Property) for such Grantor
constitutes all of the intellectual property rights necessary to conduct its
business.
(b) All Material Intellectual Property owned by such Grantor is valid,
subsisting, unexpired and enforceable, has not been adjudged invalid and has not
been abandoned and the use thereof in the business of such Grantor does not
infringe, misappropriate, dilute or violate the intellectual property rights of
any other Person.
(c) Except as set forth in Schedule 5 (Intellectual Property), none of
the Material Intellectual Property owned by such Grantor is the subject of any
licensing or franchise agreement pursuant to which such Grantor is the licensor
or franchisor.
(d) To each Grantor's knowledge, no holding, decision or judgment has
been rendered by any Governmental Authority that would limit, cancel or question
the validity of, or such Grantor's rights in, any Material Intellectual
Property.
(e) Except as set forth on Schedule 5, no action or proceeding seeking
to limit, cancel or question the validity of any Material Intellectual Property
owned by such Grantor or such Grantor's ownership interest therein is pending
or, to the knowledge of such Grantor, threatened in writing. There are no
claims, judgments or settlements to be paid by such Grantor relating to the
Material Intellectual Property.
SECTION 14.8 Deposit Accounts; Securities Accounts
The only Deposit Accounts or Securities Accounts maintained by any
Grantor on the date hereof are those listed on Schedule 6 (Bank Accounts;
Control Accounts), which sets forth such information separately for each
Grantor.
SECTION 14.9 Commercial Tort Claims
The only Commercial Tort Claims of any Grantor existing on the date
hereof (regardless of whether the amount, defendant or other material facts can
be determined and regardless of whether such Commercial Tort Claim has been
asserted, threatened or has otherwise been made known to the obligee thereof in
writing or whether litigation has been commenced for such claims) are those
listed on Schedule 7 (Commercial Tort Claims), which sets forth such information
separately for each Grantor.
ARTICLE XV Covenants
Each Grantor agrees with the Administrative Agent to the following, as
long as any Obligation or Commitment remains outstanding and, in each case,
unless the Requisite Lenders otherwise consent in writing:
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SECTION 15.1 Generally
Such Grantor shall (a) except for the security interests created by
this Agreement, not create or suffer to exist any Lien upon or with respect to
any Collateral, except Liens permitted under Section 8.2 (Liens, etc.) of the
Credit Agreement, (b) not use or permit any Collateral to be used unlawfully or
in violation of any provision of this Agreement, any other Loan Document, any
Related Document, any Requirement of Law or any policy of insurance covering the
Collateral, (c) not sell, transfer or assign (by operation of law or otherwise)
any Collateral except as permitted under the Credit Agreement, (d) except as
provided in the Credit Agreement, not enter into any agreement or undertaking
restricting the right or ability of such Grantor or the Administrative Agent to
sell, assign or transfer any Collateral if such restriction would have a
Material Adverse Effect and (e) promptly notify the Administrative Agent of its
entry into any agreement or assumption of undertaking that restricts the ability
to sell, assign or transfer any Collateral regardless of whether or not it has a
Material Adverse Effect.
SECTION 15.2 Maintenance of Perfected Security Interest; Further
Documentation
(a) Except as permitted by the Credit Agreement, such Grantor shall
maintain the security interest created by this Agreement as a perfected security
interest having at least the priority described in Section 2.2 (Grants of
Security Interest in Collateral) and Section 14.2 (Perfection and Priority) and
shall defend such security interest and the applicable priorities of such
security interests against the claims and demands of all Persons unless the
Administrative Agent determines in its reasonable discretion that the benefits
of doing so are not justified by the costs.
(b) Such Grantor shall furnish to the Administrative Agent from time
to time statements and schedules further identifying and describing the
Collateral and such other reports in connection with the Collateral as the
Administrative Agent may reasonably request, all in reasonable detail and in
form and substance reasonably satisfactory to the Administrative Agent.
(c) At any time and from time to time, upon the written request of the
Administrative Agent, and at the sole expense of such Grantor, such Grantor
shall promptly and duly execute and deliver, and have recorded, such further
instruments and documents and take such further action as the Administrative
Agent may reasonably request for the purpose of obtaining or preserving the full
benefits of this Agreement and of the rights and powers herein granted,
including the filing of any financing or continuation statement under the UCC
(or other similar laws) in effect in any jurisdiction with respect to the
security interest created hereby and the execution and delivery of Deposit
Account Control Agreements and Securities Account Control Agreements.
SECTION 15.3 Changes in Locations, Name, Etc.
(a) Except upon 15 days' prior written notice to the Administrative
Agent and delivery to the Administrative Agent of (i) all additional financing
statements and other documents reasonably requested by the Administrative Agent
to maintain the validity, perfection and priority of the security interests
provided for herein and (ii) if applicable, a written supplement to Schedule 4
(Location of Inventory and Equipment) showing (A) any additional locations at
which Inventory or Equipment shall be kept or (B) any changes in any location
where
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Inventory or Equipment shall be kept if such change would cause any Security
Interest in any Collateral to lapse or cease, such Grantor shall not do any of
the following:
(i) permit any Inventory or Equipment to be kept at a location other
than those listed on Schedule 4 (Location of Inventory and Equipment),
except for Inventory or Equipment in transit;
(ii) change its jurisdiction of organization or its location, in each
case from that referred to in Section 14.3 (Jurisdiction of Organization;
Chief Executive Office); or
(iii) change its legal name (other than the deletion of the word
"Acquisition" from its legal name on or promptly after the date hereof) or
any trade name used to identify it in the conduct of its business or
ownership of its properties or organizational identification number, if
any, or corporation, limited liability company or other organizational
structure to such an extent that any financing statement filed in
connection with this Agreement would become misleading.
(b) Such Grantor shall keep and maintain at its own cost and expense
satisfactory and complete records of the Collateral, including a record of all
payments received and all credits granted with respect to the Collateral and all
other dealings with the Collateral. During the continuance of an Event of
Default, if requested by the Administrative Agent, the security interest of the
Administrative Agent shall be noted on the certificate of title of each Vehicle.
SECTION 15.4 Pledged Collateral
(a) Such Grantor shall (i) deliver to the Administrative Agent, all
certificates and Instruments representing or evidencing any Pledged Collateral
(including Additional Pledged Collateral), whether now existing or hereafter
acquired, in suitable form for transfer by delivery or, as applicable,
accompanied by such Grantor's endorsement, where necessary, or duly executed
instruments of transfer or assignment in blank, all in form and substance
reasonably satisfactory to the Administrative Agent, together, in respect of any
Additional Pledged Collateral, with a Pledge Amendment, duly executed by the
Grantor, in substantially the form of Annex 3 (Form of Pledge Amendment), an
acknowledgment and agreement to a Joinder Agreement duly executed by the
Grantor, in substantially the form in the form of Annex 4 (Form of Joinder
Agreement), or such other documentation reasonably acceptable to the
Administrative Agent and (ii) maintain all other Pledged Collateral constituting
Investment Property in a Control Account. Such Grantor authorizes the
Administrative Agent to attach each Pledge Amendment to this Agreement. During
the continuance of an Event of Default, (i) the Administrative Agent shall have
the right, at any time in its discretion with notice to the Grantor, to transfer
to or to register in its name or in the name of its nominees any Pledged
Collateral, (ii) the Administrative Agent shall have the right at any time to
exchange any certificate or instrument representing or evidencing any Pledged
Collateral for certificates or instruments of smaller or larger denominations.
(b) Except as provided in Sections 5.1 and 5.3 (Remedial Provisions),
such Grantor shall be entitled to receive all cash dividends paid in respect of
the Pledged Collateral (other than liquidating or distributing dividends) with
respect to the Pledged Collateral. Any sums paid upon or in respect of any
Pledged Collateral upon the liquidation or dissolution of any
13
issuer of any Pledged Collateral, any distribution of capital made on or in
respect of any Pledged Collateral or any property distributed upon or with
respect to any Pledged Collateral pursuant to the recapitalization or
reclassification of the capital of any issuer of Pledged Collateral or pursuant
to the reorganization thereof shall, unless otherwise subject to a perfected
security interest in favor of the Administrative Agent, be delivered to the
Administrative Agent to be held by it hereunder as additional collateral
security for the Secured Obligations. If any sum of money or property so paid or
distributed in respect of any Pledged Collateral shall be received by such
Grantor, such Grantor shall, until such money or property is paid or delivered
to the Administrative Agent, hold such money or property in trust for the
Administrative Agent, segregated from other funds of such Grantor, as additional
security for the Secured Obligations.
(c) Except as provided in Article XVI (Remedial Provisions), such
Grantor shall be entitled to exercise all voting, consent and corporate,
partnership, limited liability company and similar rights with respect to the
Pledged Collateral; provided, however, that no vote shall be cast, consent given
or right exercised or other action taken by such Grantor that would impair the
Collateral, be inconsistent with or result in any violation of any provision of
the Credit Agreement, this Agreement or any other Loan Document or, without
prior notice to the Administrative Agent, enable or permit any issuer of Pledged
Collateral to issue any Stock or other equity Securities of any nature or to
issue any other securities convertible into or granting the right to purchase or
exchange for any Stock or other equity Securities of any nature of any issuer of
Pledged Collateral.
(d) Such Grantor shall not grant "control" (within the meaning of such
term under Article 9-106 of the UCC) over any Investment Property to any Person
other than the Administrative Agent.
(e) In the case of each Grantor that is an issuer of Pledged
Collateral, such Grantor agrees to be bound by the terms of this Agreement
relating to the Pledged Collateral issued by it and shall comply with such terms
insofar as such terms are applicable to it. In the case of any Grantor that is a
holder of any Stock or Stock Equivalent in any Person that is an issuer of
Pledged Collateral, such Grantor consents to (i) the exercise of the rights
granted to the Administrative Agent hereunder (including those described in
Section 16.3 (Pledged Collateral)), and (ii) the pledge by each other Grantor,
pursuant to the terms hereof, of the Pledged Stock in such Person and to the
transfer of such Pledged Stock to the Administrative Agent or its nominee and to
the substitution of the Administrative Agent or its nominee as a holder of such
Pledged Stock with all the rights, powers and duties of other holders of Pledged
Stock of the same class and, if the Grantor having pledged such Pledged Stock
hereunder had any right, power or duty at the time of such pledge or at the time
of such substitution beyond that of such other holders, with all such additional
rights, powers and duties. Such Grantor agrees to execute and deliver to the
Administrative Agent such certificates, agreements and other documents as may be
necessary to evidence, formalize or otherwise give effect to the consents given
in this clause (e).
(f) Such Grantor shall not, without the consent of the Administrative
Agent, agree to any amendment of any Constituent Document that in any way
adversely affects the perfection of the security interest of the Administrative
Agent in the Pledged Collateral pledged by such Grantor hereunder, including any
amendment electing to treat any membership interest or partnership interest that
is part of the Pledged Collateral as a "security" under Section 8-103 of the
UCC, or any election to turn any previously uncertificated Stock that is part of
the Pledged Collateral into certificated Stock.
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SECTION 15.5 Accounts
(a) Such Grantor shall not, other than in the ordinary course of
business consistent with its past practice, (i) grant any extension of the time
of payment of any Account, (ii) compromise or settle any Account for less than
the full amount thereof, (iii) release, wholly or partially, any Person liable
for the payment of any Account, (iv) allow any credit or discount on any Account
or (v) amend, supplement or modify any Account in any manner that could
adversely affect the value thereof.
SECTION 15.6 Delivery of Instruments and Chattel Paper
If any amount in excess of $100,000 payable under or in connection
with any Collateral owned by such Grantor shall be or become evidenced by an
Instrument or Chattel Paper, such Grantor shall immediately deliver such
Instrument or Chattel Paper to the Administrative Agent, duly indorsed in a
manner satisfactory to the Administrative Agent, or, if consented to by the
Administrative Agent, shall ▇▇▇▇ all such Instruments and Chattel Paper with the
following legend: "This writing and the obligations evidenced or secured hereby
are subject to the security interest of Citicorp USA, Inc., as Administrative
Agent".
SECTION 15.7 Intellectual Property
(a) Such Grantor (either itself or through licensees) shall (i)
continue to use each Trademark that is Material Intellectual Property in order
to maintain such Trademark in full force and effect with respect to each class
of goods for which such Trademark is currently used, free from any claim of
abandonment for non-use, (ii) maintain as in the past the quality of products
and services offered under such Trademark, (iii) use such Trademark with the
appropriate notice of registration and all other notices and legends required by
applicable Requirements of Law, (iv) not adopt or use any ▇▇▇▇ that is
confusingly similar or a colorable imitation of such Trademark unless the
Administrative Agent shall obtain a perfected security interest in such ▇▇▇▇
pursuant to this Agreement and (v) not (and not permit any licensee or
sublicensee thereof to) do any act or knowingly omit to do any act whereby such
Trademark (or any goodwill associated therewith) may become destroyed,
invalidated, impaired or harmed in any way.
(b) Such Grantor (either itself or through licensees) shall not do any
act, or omit to do any act, whereby any Patent that is Material Intellectual
Property may become forfeited, abandoned or dedicated to the public.
(c) Such Grantor (either itself or through licensees) (i) shall not
(and shall not permit any licensee or sublicensee thereof to) do any act or omit
to do any act whereby any portion of the Copyrights that is Material
Intellectual Property may become invalidated or otherwise impaired and (ii)
shall not (either itself or through licensees) do any act whereby any portion of
the Copyrights that is Material Intellectual Property may fall into the public
domain.
(d) Such Grantor (either itself or through licensees) shall not do any
act, or omit to do any act, whereby any trade secret that is Material
Intellectual Property may become publicly available or otherwise unprotectable.
15
(e) Such Grantor (either itself or through licensees) shall not do any
act that knowingly uses any Material Intellectual Property to infringe,
misappropriate, or violate the intellectual property rights of any other Person.
(f) Such Grantor shall notify the Administrative Agent immediately if
it knows, or has reason to know, that any application or registration relating
to any Material Intellectual Property may become forfeited, abandoned or
dedicated to the public, or of any adverse determination or development
(including the institution of, or any such determination or development in, any
proceeding in the United States Patent and Trademark Office, the United States
Copyright Office or any court or tribunal in any country) regarding such
Grantor's ownership of, right to use, interest in, or the validity of, any
Material Intellectual Property or such Grantor's right to register the same or
to own and maintain the same.
(g) Whenever such Grantor, either by itself or through any agent,
licensee or designee, shall file an application for the registration of any
Intellectual Property with the United States Patent and Trademark Office, the
United States Copyright Office or any similar office or agency within or outside
the United States or register any Internet domain name, such Grantor shall
report such filing to the Administrative Agent within five Business Days after
the last day of the fiscal quarter in which such filing occurs. Upon request of
the Administrative Agent, such Grantor shall execute and deliver, and have
recorded, all agreements, instruments, documents and papers as the
Administrative Agent may request to evidence the Administrative Agent's security
interest in any Copyright, Patent, Trademark or Internet domain name and the
goodwill and general intangibles of such Grantor relating thereto or represented
thereby.
(h) Such Grantor shall take all reasonable actions necessary or
requested by the Administrative Agent, including in any proceeding before the
United States Patent and Trademark Office, the United States Copyright Office or
any similar office or agency and any Internet domain name registrar, to maintain
and pursue each application (and to obtain the relevant registration) and to
maintain each registration of any Copyright, Trademark, Patent or Internet
domain name that is Material Intellectual Property, including filing of
applications for renewal, affidavits of use, affidavits of incontestability and
opposition and interference and cancellation proceedings.
(i) In the event that any Material Intellectual Property is or has
been infringed upon or misappropriated or diluted by a third party, such Grantor
shall notify the Administrative Agent promptly after such Grantor learns
thereof. Such Grantor shall take appropriate action in response to such
infringement, misappropriation of dilution, including promptly bringing suit for
infringement, misappropriation or dilution and to recover all damages for such
infringement, misappropriation of dilution, and shall take such other actions
may be appropriate in its reasonable judgment under the circumstances to protect
such Material Intellectual Property.
(j) Unless otherwise agreed to by the Administrative Agent, such
Grantor shall execute and deliver to the Administrative Agent for filing in (i)
the United States Copyright Office a short-form copyright security agreement in
the form attached hereto as Annex 5 (Form of Short Form Intellectual Property
Security Agreement), (ii) in the United States Patent and Trademark Office and
with the Secretary of State of all appropriate States of the United States a
short-form patent security agreement in the form attached hereto as Annex 5
(Form of Short Form Intellectual Property Security Agreement), (iii) the United
States Patent and Trademark Office a short-form trademark security agreement in
form attached hereto as Annex 5 (Form of Short Form
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Intellectual Property Security Agreement) and (iv) with the appropriate Internet
domain name registrar, a duly executed form of assignment of such Internet
domain name to the Administrative Agent (together with appropriate supporting
documentation as may be requested by the Administrative Agent) in form and
substance reasonably acceptable to the Administrative Agent. In the case of
clause (iv) above, such Grantor hereby authorizes the Administrative Agent to
file such assignment in such Grantor's name and to otherwise perform in the name
of such Grantor all other necessary actions to complete such assignment, and
each Grantor agrees to perform all appropriate actions deemed necessary by the
Administrative Agent for the Administrative Agent to ensure such Internet domain
name is registered in the name of the Administrative Agent.
SECTION 15.8 Vehicles
During the continuance of an Event of Default, upon the request of the
Administrative Agent, within 30 days after the date of such request and, with
respect to any Vehicle acquired by such Grantor subsequent to the date of any
such request, within 30 days after the date of acquisition thereof, such Grantor
shall file all applications for certificates of title or ownership indicating
the Administrative Agent's first priority security interest (subject to
Permitted Encumbrances) in the Vehicle covered by such certificate and any other
necessary documentation, in each office in each jurisdiction that the
Administrative Agent shall deem advisable to perfect its security interests in
the Vehicles.
SECTION 15.9 Payment of Obligations
Such Grantor shall pay and discharge or otherwise satisfy at or before
maturity or before they become delinquent, as the case may be, all taxes,
assessments and governmental charges or levies imposed upon the Collateral or in
respect of income or profits therefrom, as well as all claims of any kind
(including claims for labor, materials and supplies) against or with respect to
the Collateral, except that no such charge need be paid if the amount or
validity thereof is currently being contested in good faith by appropriate
proceedings, reserves in conformity with GAAP with respect thereto have been
provided on the books of such Grantor.
SECTION 15.10 Insurance
Such Grantor shall (i) maintain, and cause to be maintained for each
of its Subsidiaries, insurance with responsible and reputable insurance
companies or associations in such amounts and covering such risks as is usually
carried by companies engaged in similar businesses and owning similar properties
in the same general areas in which such Grantor or such Subsidiary operates, and
such other insurance as may be reasonably requested by the Requisite Lenders,
and, in any event, all insurance required by any Collateral Documents and (ii)
cause all such insurance to name the Administrative Agent on behalf of the
Secured Parties as additional insured or loss payee, as appropriate, and (unless
otherwise agreed by the Administrative Agent) to provide that no cancellation,
material addition in amount or material change in coverage shall be effective
until after 30 days' written notice thereof to the Administrative Agent.
SECTION 15.11 Notice of Commercial Tort Claims
Such Grantor agrees that, if it shall acquire any interest in any
Commercial Tort Claim (whether from another Person or because such Commercial
Tort Claim shall have come into existence), (i) such Grantor shall, immediately
upon such acquisition, deliver to the Administrative Agent, in each case in form
and substance satisfactory to the Administrative
17
Agent, a notice of the existence and nature of such Commercial Tort Claim and
deliver a supplement to Schedule 7 (Commercial Tort Claims) containing a
specific description of such Commercial Tort Claim, (ii) the provision of
Section 13.1 (Grant of Security Interest in Collateral) shall apply to such
Commercial Tort Claim and (iii) such Grantor shall execute and deliver to the
Administrative Agent, in each case in form and substance reasonably satisfactory
to the Administrative Agent, any certificate, agreement and other document, and
take all other action, deemed by the Administrative Agent to be reasonably
necessary or appropriate for the Administrative Agent to obtain, on behalf of
the Lenders, a first-priority (subject to Permitted Encumbrances), perfected
security interest in all such Commercial Tort Claims. Any supplement to Schedule
7 (Commercial Tort Claims) delivered pursuant to this Section 15.11 (Notice of
Commercial Tort Claims) shall, after the receipt thereof by the Administrative
Agent, become part of Schedule 7 (Commercial Tort Claims) for all purposes
hereunder other than in respect of representations and warranties made prior to
the date of such receipt.
ARTICLE XVI Remedial Provisions
SECTION 16.1 Code and Other Remedies
During the continuance of an Event of Default, the Administrative
Agent may exercise, in addition to all other rights and remedies granted to it
in this Agreement and in any other instrument or agreement securing, evidencing
or relating to the Secured Obligations, all rights and remedies of a secured
party under the UCC or any other applicable law. Without limiting the generality
of the foregoing, the Administrative Agent, without demand of performance or
other demand, presentment, protest, advertisement or notice of any kind (except
any notice required by law referred to below) to or upon any Grantor or any
other Person (all and each of which demands, defenses, advertisements and
notices are hereby waived), may in such circumstances forthwith collect,
receive, appropriate and realize upon any Collateral, and may forthwith sell,
lease, assign, give option or options to purchase, or otherwise dispose of and
deliver any Collateral (or contract to do any of the foregoing), in one or more
parcels at public or private sale or sales, at any exchange, broker's board or
office of the Administrative Agent or any Lender or elsewhere upon such terms
and conditions as it may deem advisable and at such prices as it may deem best,
for cash or on credit or for future delivery without assumption of any credit
risk. The Administrative Agent shall have the right upon any such public sale or
sales, and, to the extent permitted by the UCC and other applicable law, upon
any such private sale or sales, to purchase the whole or any part of the
Collateral so sold, free of any right or equity of redemption of any Grantor,
which right or equity is hereby waived and released. Each Grantor further
agrees, at the Administrative Agent's request, to assemble the Collateral and
make it available to the Administrative Agent at places that the Administrative
Agent shall reasonably select, whether at such Grantor's premises or elsewhere.
The Administrative Agent shall apply the net proceeds of any action taken by it
pursuant to this Section 16.1, after deducting all reasonable costs and expenses
incurred in connection therewith or incidental to the care or safekeeping of any
Collateral or in any way relating to the Collateral or the rights of the
Administrative Agent and any other Secured Party hereunder, including reasonable
attorneys' fees and disbursements, to the payment in whole or in part of the
Secured Obligations, in such order as the Credit Agreement shall prescribe, and
only after such application and after the payment by the Administrative Agent of
any other amount required by any provision of law, need the Administrative Agent
account for the surplus, if any, to any Grantor. To the extent permitted by
applicable law, each Grantor waives all claims, damages and demands it may
acquire against the Administrative Agent or any other Secured Party arising out
of the exercise by them of any rights hereunder. If any notice of a
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proposed sale or other disposition of Collateral shall be required by law, such
notice shall be deemed reasonable and proper if given at least 10 days before
such sale or other disposition.
SECTION 16.2 Accounts and Payments in Respect of General Intangibles
(a) In addition to, and not in substitution for, any similar
requirement in the Credit Agreement, if required by the Administrative Agent at
any time during the continuance of an Event of Default, any payment of Accounts
or payment in respect of General Intangibles, when collected by any Grantor,
shall be forthwith (and, in any event, within four Business Days) deposited by
such Grantor in the exact form received, duly indorsed by such Grantor to the
Administrative Agent, in an Approved Deposit Account or a Cash Collateral
Account, subject to withdrawal by the Administrative Agent as provided in
Section 16.4 (Proceeds to be Turned Over To Administrative Agent). Until so
turned over or turned over, such payment shall be held by such Grantor in trust
for the Administrative Agent, segregated from other funds of such Grantor. Each
such deposit of Proceeds of Accounts and payments in respect of General
Intangibles shall be accompanied by a report identifying in reasonable detail
the nature and source of the payments included in the deposit.
(b) At the Administrative Agent's request, during the continuance of
an Event of Default, each Grantor shall deliver to the Administrative Agent all
original and other documents evidencing, and relating to, the agreements and
transactions that gave rise to the Accounts or payments in respect of General
Intangibles, including all original orders, invoices and shipping receipts.
(c) The Administrative Agent may, without notice, at any time during
the continuance of an Event of Default, limit or terminate the authority of a
Grantor to collect its Accounts or amounts due under General Intangibles or any
thereof, provided that the Administrative Agent shall arrange for such
alternative collection procedures as it shall reasonably deem appropriate.
(d) The Administrative Agent in its own name or in the name of others
may at any time during the continuance of an Event of Default communicate with
Account Debtors to verify with them to the Administrative Agent's satisfaction
the existence, amount and terms of any Account or amounts due under any General
Intangible.
(e) Upon the request of the Administrative Agent at any time during
the continuance of an Event of Default, each Grantor shall notify Account
Debtors that the Accounts or General Intangibles have been collaterally assigned
to the Administrative Agent and that payments in respect thereof shall be made
directly to the Administrative Agent. In addition, the Administrative Agent may
at any time during the continuance of an Event of Default enforce such Grantor's
rights against such Account Debtors and obligors of General Intangibles.
(f) To the extent allowed by applicable law and nything herein to the
contrary notwithstanding, each Grantor shall remain liable under each of the
Accounts and payments in respect of General Intangibles to observe and perform
all the conditions and obligations to be observed and performed by it
thereunder, all in accordance with the terms of any agreement giving rise
thereto. Neither the Administrative Agent nor any other Secured Party shall have
any obligation or liability under any agreement giving rise to an Account or a
payment in respect of a General Intangible by reason of or arising out of this
Agreement or the receipt by the Administrative Agent nor any other Secured Party
of any payment relating thereto, nor shall
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the Administrative Agent nor any other Secured Party be obligated in any manner
to perform any obligation of any Grantor under or pursuant to any agreement
giving rise to an Account or a payment in respect of a General Intangible, to
make any payment, to make any inquiry as to the nature or the sufficiency of any
payment received by it or as to the sufficiency of any performance by any party
thereunder, to present or file any claim, to take any action to enforce any
performance or to collect the payment of any amounts that may have been assigned
to it or to which it may be entitled at any time or times.
SECTION 16.3 Pledged Collateral
(a) During the continuance of an Event of Default, upon notice by the
Administrative Agent to the relevant Grantor or Grantors, (i) the Administrative
Agent shall have the right to receive any Proceeds of the Pledged Collateral and
make application thereof to the Obligations in the order set forth in the Credit
Agreement and (ii) the Administrative Agent or its nominee may exercise (A) any
voting, consent, corporate and other right pertaining to the Pledged Collateral
at any meeting of shareholders, partners or members, as the case may be, of the
relevant issuer or issuers of Pledged Collateral or otherwise and (B) any right
of conversion, exchange and subscription and any other right, privilege or
option pertaining to the Pledged Collateral as if it were the absolute owner
thereof (including the right to exchange at its discretion any of the Pledged
Collateral upon the merger, amalgamation, consolidation, reorganization,
recapitalization or other fundamental change in the corporate or equivalent
structure of any issuer of Pledged Stock, the right to deposit and deliver any
Pledged Collateral with any committee, depositary, transfer agent, registrar or
other designated agency upon such terms and conditions as the Administrative
Agent may determine), all without liability except to account for property
actually received by it; provided, however, that the Administrative Agent shall
have no duty to any Grantor to exercise any such right, privilege or option and
shall not be responsible for any failure to do so or delay in so doing.
(b) In order to permit the Administrative Agent to exercise the voting
and other consensual rights that it may be entitled to exercise pursuant hereto
and to receive all dividends and other distributions that it may be entitled to
receive hereunder, (i) each Grantor shall promptly execute and deliver (or cause
to be executed and delivered) to the Administrative Agent all such proxies,
dividend payment orders and other instruments as the Administrative Agent may
from time to time reasonably request and (ii) without limiting the effect of
clause (i) above, such Grantor hereby grants to the Administrative Agent an
irrevocable proxy to vote all or any part of the Pledged Collateral and to
exercise all other rights, powers, privileges and remedies to which a holder of
the Pledged Collateral would be entitled (including giving or withholding
written consents of shareholders, partners or members, as the case may be,
calling special meetings of shareholders, partners or members, as the case may
be, and voting at such meetings), which proxy shall be effective, automatically
and without the necessity of any action (including any transfer of any Pledged
Collateral on the record books of the issuer thereof) by any other person
(including the issuer of such Pledged Collateral or any officer or agent
thereof) during the continuance of an Event of Default and which proxy shall
only terminate upon the payment in full of the Secured Obligations.
(c) Each Grantor hereby expressly authorizes and instructs each issuer
of any Pledged Collateral pledged hereunder by such Grantor to (i) comply with
any instruction received by it from the Administrative Agent in writing that (A)
states that an Event of Default has occurred and is continuing and (B) is
otherwise in accordance with the terms of this Agreement, without any other or
further instructions from such Grantor, and each Grantor agrees
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that such issuer shall be fully protected in so complying and (ii) unless
otherwise expressly permitted hereby, pay any dividend or other payment with
respect to the Pledged Collateral directly to the Administrative Agent.
SECTION 16.4 Proceeds to be Turned Over To Administrative Agent
Unless otherwise expressly provided in the Credit Agreement or
Intercreditor Agreement, all Proceeds received by the Administrative Agent
hereunder in cash or Cash Equivalents shall be held by the Administrative Agent
in a Cash Collateral Account. All Proceeds while held by the Administrative
Agent in a Cash Collateral Account (or by such Grantor in trust for the
Administrative Agent) shall continue to be held as collateral security for the
Secured Obligations and shall not constitute payment thereof until applied as
provided in the Credit Agreement.
SECTION 16.5 Deficiency
Each Grantor understands that it shall remain liable for any
deficiency if the proceeds of any sale or other disposition of the Collateral
are insufficient to pay the Secured Obligations and the reasonable fees and
disbursements of any attorney employed by the Administrative Agent or any other
Secured Party to collect such deficiency.
ARTICLE XVII The Administrative Agent
SECTION 17.1 Administrative Agent's Appointment as Attorney-in-Fact
(a) Anything in this clause (a) to the contrary notwithstanding, the
Administrative Agent for the benefit of the Lenders agrees that it shall not
exercise any right under the power of attorney provided for in this clause (a)
unless an Event of Default shall be continuing. Each Grantor hereby irrevocably
constitutes and appoints the Administrative Agent and any duly appointed officer
or agent thereof, with full power of substitution, as its true and lawful
attorney-in-fact with full irrevocable power and authority in the place and
stead of such Grantor and in the name of such Grantor or in its own name, for
the purpose of carrying out the terms of this Agreement, to take any appropriate
action and to execute any document or instrument that may be necessary or
desirable to accomplish the purposes of this Agreement, and, without limiting
the generality of the foregoing, each Grantor hereby gives the Administrative
Agent the power and right, on behalf of such Grantor, without notice to or
assent by such Grantor, to do any of the following:
(i) in the name of such Grantor or its own name, or otherwise, take
possession of and indorse and collect any check, draft, note, acceptance or
other instrument for the payment of moneys due under any Account or General
Intangible or with respect to any other Collateral and file any claim or
take any other action or proceeding in any court of law or equity or
otherwise deemed appropriate by the Administrative Agent for the purpose of
collecting any such moneys due under any Account or General Intangible or
with respect to any other Collateral whenever payable;
(ii) in the case of any Intellectual Property, execute and deliver,
and have recorded, any agreement, instrument, document or paper as the
Administrative Agent may request to evidence the Administrative Agent's
security interest in such Intellectual
21
Property and the goodwill and General Intangibles of such Grantor relating
thereto or represented thereby;
(iii) pay or discharge taxes and Liens levied or placed on or
threatened against the Collateral, effect any repair or pay any insurance
called for by the terms of this Agreement (including all or any part of the
premiums therefor and the costs thereof);
(iv) execute, in connection with any sale provided for in Section 16.1
(Code and Other Remedies), any endorsement, assignment or other instrument
of conveyance or transfer with respect to the Collateral; or
(v) (A) direct any party liable for any payment under any Collateral
to make payment of any moneys due or to become due thereunder directly to
the Administrative Agent or as the Administrative Agent shall direct, (B)
ask or demand for, collect, and receive payment of and receipt for, any
moneys, claims and other amounts due or to become due at any time in
respect of or arising out of any Collateral, (C) sign and indorse any
invoice, freight or express ▇▇▇▇, ▇▇▇▇ of lading, storage or warehouse
receipt, draft against debtors, assignment, verification, notice and other
document in connection with any Collateral, (D) commence and prosecute any
suit, action or proceeding at law or in equity in any court of competent
jurisdiction to collect any Collateral and to enforce any other right in
respect of any Collateral, (E) defend any suit, action or proceeding
brought against such Grantor with respect to any Collateral, (F) settle,
compromise or adjust any such suit, action or proceeding and, in connection
therewith, give such discharges or releases as the Administrative Agent may
deem appropriate, (G) assign any Copyright, Patent or Trademark (along with
the goodwill of the business to which any such Trademark pertains)
throughout the world for such term or terms, on such conditions, and in
such manner as the Administrative Agent shall in its sole discretion
determine, including the execution and filing of any document necessary to
effectuate or record such assignment and (H) generally, sell, transfer,
pledge and make any agreement with respect to or otherwise deal with any
Collateral as fully and completely as though the Administrative Agent were
the absolute owner thereof for all purposes, and do, at the Administrative
Agent's option and such Grantor's expense, at any time, or from time to
time, all acts and things that the Administrative Agent deems necessary to
protect, preserve or realize upon the Collateral and the Administrative
Agent's and the other Secured Parties' security interests therein and to
effect the intent of this Agreement, all as fully and effectively as such
Grantor might do.
(b) If any Grantor fails to perform or comply with any of its
agreements contained herein, the Administrative Agent, at its option, but
without any obligation so to do, may perform or comply, or otherwise cause
performance or compliance, with such agreement.
(c) The reasonable expenses of the Administrative Agent incurred in
connection with actions undertaken as provided in this Section 17.1, together
with interest thereon at a rate per annum equal to the rate per annum at which
interest would then be payable on past due Revolving Loans that are Base Rate
Loans under the Credit Agreement, from the date of payment by the Administrative
Agent to the date reimbursed by the relevant Grantor, shall be payable by such
Grantor to the Administrative Agent on demand.
(d) Each Grantor hereby authorizes all that said attorneys shall
lawfully do or cause to be done by virtue hereof. All powers, authorizations and
agencies contained in this
22
Agreement are coupled with an interest and are irrevocable until this Agreement
is terminated and the security interests created hereby are released.
SECTION 17.2 Duty of Administrative Agent
The Administrative Agent's sole duty with respect to the custody,
safekeeping and physical preservation of the Collateral in its possession shall
be to deal with it in the same manner as the Administrative Agent deals with
similar property for its own account. Neither the Administrative Agent, any
other Secured Party nor any of their respective officers, directors, employees
or agents shall be liable for failure to demand, collect or realize upon any
Collateral or for any delay in doing so or shall be under any obligation to sell
or otherwise dispose of any Collateral upon the request of any Grantor or any
other Person or to take any other action whatsoever with regard to any
Collateral. The powers conferred on the Administrative Agent hereunder are
solely to protect the Administrative Agent's interest in the Collateral and
shall not impose any duty upon the Administrative Agent or any other Secured
Party to exercise any such powers. The Administrative Agent and the other
Secured Parties shall be accountable only for amounts that they actually receive
as a result of the exercise of such powers, and neither they nor any of their
respective officers, directors, employees or agents shall be responsible to any
Grantor for any act or failure to act hereunder, except for the Administrative
Agent's or such Secured Parties' own gross negligence or willful misconduct.
SECTION 17.3 Authorization of Financing Statements
Each Grantor authorizes the Administrative Agent and its Affiliates,
counsel and other representatives, at any time and from time to time, to file or
record financing statements, amendments to financing statements, and other
filing or recording documents or instruments with respect to the Collateral in
such form and in such offices as the Administrative Agent reasonably determines
appropriate to perfect the security interests of the Administrative Agent under
this Agreement, and such financing statements and amendments may described the
Collateral covered thereby as "all assets of the debtor", "all personal property
of the debtor" or words of similar effect. Each Grantor hereby also authorizes
the Administrative Agent and its Affiliates, counsel and other representatives,
at any time and from time to time, to file continuation statements with respect
to previously filed financing statements. A photographic or other reproduction
of this Agreement shall be sufficient as a financing statement or other filing
or recording document or instrument for filing or recording in any jurisdiction.
SECTION 17.4 Authority of Administrative Agent
Each Grantor acknowledges that the rights and responsibilities of the
Administrative Agent under this Agreement with respect to any action taken by
the Administrative Agent or the exercise or non-exercise by the Administrative
Agent of any option, voting right, request, judgment or other right or remedy
provided for herein or resulting or arising out of this Agreement shall, as
between the Administrative Agent and the other Secured Parties, be governed by
the Credit Agreement and by such other agreements with respect thereto as may
exist from time to time among them, but, as between the Administrative Agent and
the Grantors, the Administrative Agent shall be conclusively presumed to be
acting as agent for the other Secured Parties with full and valid authority so
to act or refrain from acting, and no Grantor shall be under any obligation, or
entitlement, to make any inquiry respecting such authority.
ARTICLE XVIII Miscellaneous
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SECTION 18.1 Amendments in Writing
None of the terms or provisions of this Agreement may be waived,
amended, supplemented or otherwise modified except in accordance with Section
11.1 (Amendments, Waivers, Etc.) of the Credit Agreement; provided, however,
that annexes to this Agreement may be supplemented (but no existing provisions
may be modified and no Collateral may be released except as provided in the
Credit Agreement or the Intercreditor Agreement) through Pledge Amendments and
Joinder Agreements, in substantially the form of Annex 3 (Form of Pledge
Amendment) and Annex 4 (Form of Joinder Agreement) respectively, in each case
duly executed by the Administrative Agent and each Grantor directly affected
thereby.
SECTION 18.2 Notices
All notices, requests and demands to or upon the Administrative Agent
or any Grantor hereunder shall be effected in the manner provided for in Section
11.8 (Notices, Etc.) of the Credit Agreement; provided, however, that any such
notice, request or demand to or upon any Grantor shall be addressed to the
Borrower's notice address set forth in such Section 11.8.
SECTION 18.3 No Waiver by Course of Conduct; Cumulative Remedies
Neither the Administrative Agent nor any other Secured Party shall by
any act (except by a written instrument pursuant to Section 18.1 (Amendments in
Writing)), delay, indulgence, omission or otherwise be deemed to have waived any
right or remedy hereunder or to have acquiesced in any Default or Event of
Default. No failure to exercise, nor any delay in exercising, on the part of the
Administrative Agent or any other Secured Party, any right, power or privilege
hereunder shall operate as a waiver thereof. No single or partial exercise of
any right, power or privilege hereunder shall preclude any other or further
exercise thereof or the exercise of any other right, power or privilege. A
waiver by the Administrative Agent or any other Secured Party of any right or
remedy hereunder on any one occasion shall not be construed as a bar to any
right or remedy that the Administrative Agent or such other Secured Party would
otherwise have on any future occasion. The rights and remedies herein provided
are cumulative, may be exercised singly or concurrently and are not exclusive of
any other rights or remedies provided by law.
SECTION 18.4 Successors and Assigns
This Agreement shall be binding upon the successors and assigns of
each Grantor and shall inure to the benefit of the Administrative Agent and each
other Secured Party and their successors and assigns; provided, however, that no
Grantor may assign, transfer or delegate any of its rights or obligations under
this Agreement without the prior written consent of the Administrative Agent.
SECTION 18.5 Counterparts
This Agreement may be executed by one or more of the parties to this
Agreement on any number of separate counterparts (including by telecopy), each
of which when so executed shall be deemed to be an original and all of which
taken together shall constitute one and the same agreement. Signature pages may
be detached from multiple counterparts and attached to a single counterpart so
that all signature pages are attached to the same document. Delivery of an
24
executed counterpart by telecopy shall be effective as delivery of a manually
executed counterpart.
SECTION 18.6 Severability
Any provision of this Agreement that is prohibited or unenforceable in
any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
SECTION 18.7 Section Headings
The Article and Section titles contained in this Agreement are, and
shall be, without substantive meaning or content of any kind whatsoever and are
not part of the agreement of the parties hereto.
SECTION 18.8 Entire Agreement
This Agreement together with the other Loan Documents represents the
entire agreement of the parties and supersedes all prior agreements and
understandings relating to the subject matter hereof.
SECTION 18.9 Governing Law
This Agreement and the rights and obligations of the parties hereto
shall be governed by, and construed and interpreted in accordance with, the law
of the State of New York.
SECTION 18.10 Additional Grantors
If, pursuant to Section 7.11 (Additional Collateral and Guaranties) of
the Credit Agreement, the Borrower shall be required to cause any Subsidiary
that is not a Grantor to become a Grantor hereunder, such Subsidiary shall
execute and deliver to the Administrative Agent a Joinder Agreement
substantially in the form of Annex 4 (Form of Joinder Agreement) and shall
thereafter for all purposes be a party hereto and have the same rights, benefits
and obligations as if a Grantor party hereto on the Closing Date.
SECTION 18.11 Release of Collateral
(a) At the time provided in Section 10.8(b)(i) (Concerning the
Collateral and the Collateral Documents) of the Credit Agreement, the Collateral
shall be released from the Lien created hereby and this Agreement and all
obligations (other than those expressly stated to survive such termination) of
the Administrative Agent and each Grantor hereunder shall terminate, all without
delivery of any instrument or performance of any act by any party, and all
rights to the Collateral shall revert to the Grantors. At the request and sole
expense of any Grantor following any such termination, the Administrative Agent
shall deliver to such Grantor any Collateral of such Grantor held by the
Administrative Agent hereunder and execute and deliver to such Grantor such
documents as such Grantor shall reasonably request to evidence such termination.
25
(b) If the Administrative Agent shall be directed or permitted
pursuant to Section 10.8(b)(ii) or (iii) (Concerning the Collateral and the
Collateral Documents) of the Credit Agreement to release any Lien created hereby
upon any Collateral (including any Collateral sold or disposed of by any Grantor
in a transaction permitted by the Credit Agreement), such Collateral shall be
released from the Lien created hereby to the extent provided under, and subject
to the terms and conditions set forth in, Section 10.8(b)(ii) or (iii)
(Concerning the Collateral and the Collateral Documents) of the Credit
Agreement. In connection therewith, the Administrative Agent, at the request and
sole expense of the Borrower, shall execute and deliver to the Borrower all
releases or other documents, including, without limitation, UCC termination
statements, reasonably necessary or desirable for the release of the Lien
created hereby on such Collateral. At the request and sole expense of the
Borrower, a Grantor shall be released from its obligations hereunder in the
event that all the capital stock of such Grantor shall be so sold or disposed;
provided, however, that the Borrower shall have delivered to the Administrative
Agent, at least ten Business Days prior to the date of the proposed release, a
written request for release identifying the relevant Grantor and the terms of
the sale or other disposition in reasonable detail, including the price thereof
and any expenses in connection therewith, together with a certification by the
Borrower in form and substance satisfactory to the Administrative Agent stating
that such transaction is in compliance with the Credit Agreement and the other
Loan Documents.
SECTION 18.12 Reinstatement
Each Grantor further agrees that, if any payment made by any Loan
Party or other Person and applied to the Obligations is at any time annulled,
avoided, set aside, rescinded, invalidated, declared to be fraudulent or
preferential or otherwise required to be refunded or repaid, or the proceeds of
Collateral are required to be returned by any Secured Party to such Loan Party,
its estate, trustee, receiver or any other party, including any Grantor, under
any bankruptcy law, state or federal law, common law or equitable cause, then,
to the extent of such payment or repayment, any Lien or other Collateral
securing such liability shall be and remain in full force and effect, as fully
as if such payment had never been made or, if prior thereto the Lien granted
hereby or other Collateral securing such liability hereunder shall have been
released or terminated by virtue of such cancellation or surrender), such Lien
or other Collateral shall be reinstated in full force and effect, and such prior
cancellation or surrender shall not diminish, release, discharge, impair or
otherwise affect any Lien or other Collateral securing the obligations of any
Grantor in respect of the amount of such payment except to the extent such
payment was not so required to be refunded, repaid or returned.
SECTION 18.13 Intercreditor Issues.
Notwithstanding anything herein to the contrary, for so long as the
Indenture and Collateral Trust (to the extent applicable) is in effect, if any
Grantor is in compliance with any requirements relating to Indenture Collateral
imposed by the Indenture which are equivalent to or conflict with requirements
set forth in this Agreement, such Grantor need not comply with (and shall be
deemed to have satisfied) such requirements of this Agreement.
[SIGNATURE PAGES FOLLOW]
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IN WITNESS WHEREOF, each of the undersigned has caused this Pledge and
Security Agreement to be duly executed and delivered as of the date first above
written.
WCI STEEL ACQUISITION, INC.,
as Grantor
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
WCI STEEL METALLURGICAL SERVICES
ACQUISITION, INC.,
as Grantor
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
WCI STEEL PRODUCTION CONTROL SERVICES
ACQUISITION, INC.,
as Grantor
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
YOUNGSTOWN SINTER ACQUISITION COMPANY,
as Grantor
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
[SIGNATURE PAGE TO PLEDGE AND SECURITY AGREEMENT]
WCI STEEL SALES ACQUISITION, L.P.,
as Grantor
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
[SIGNATURE PAGE TO PLEDGE AND SECURITY AGREEMENT]
ACCEPTED AND AGREED
as of the date first above written:
CITICORP USA, INC.,
as Administrative Agent
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
[SIGNATURE PAGE TO PLEDGE AND SECURITY AGREEMENT]
ANNEX 1
TO
PLEDGE AND SECURITY AGREEMENT
FORM OF DEPOSIT ACCOUNT CONTROL AGREEMENT
________________ ___, _____
[Financial Institution]
[Address]
Ladies and Gentlemen:
Reference is made to account no. [__________] maintained with you (the
"Bank") by [__________] (the "Company"), [as borrower] [as guarantor] into which
funds are deposited from time to time (the "Account"). The Company has entered
into a Pledge and Security Agreement, dated as of May 1, 2006 (as the same may
be amended, restated, supplemented or otherwise modified from time to time, the
"Pledge and Security Agreement"), among the Company, [certain of its
subsidiaries and/or affiliates party thereto] and Citicorp USA, Inc., as agent
for the Secured Parties referred to therein (in such capacity the
"Administrative Agent").
Pursuant to the Pledge and Security Agreement and related documents,
the Company has granted to the Administrative Agent, for the benefit of the
Secured Parties, a security interest in certain property of the Company,
including, among other things, accounts, inventory, equipment, instruments,
general intangibles and all proceeds thereof (the "Collateral"). Payments with
respect to the Collateral are or hereafter may be made to the Account. You, the
Company and the Administrative Agent are entering into this letter agreement to
perfect the security interest of the Administrative Agent in the Account.
The Company hereby transfers to the Administrative Agent exclusive
control of the Account and all funds and other property on deposit therein. By
your execution of this letter agreement, you (i) agree that you shall comply
with instructions originated by the Administrative Agent directing disposition
of the funds in the Account without further consent of the Company and (ii)
acknowledge and agree that the Administrative Agent now has exclusive control of
the Account, that all funds and other property on deposit in the Account shall
be transferred to the Administrative Agent as provided herein, that the Account
is being maintained by you for the benefit of the Administrative Agent and that
all amounts and other property therein are held by you as custodian for the
Administrative Agent.
Except as provided in clauses Section 30(c) and Section 32 below, the
Account shall not be subject to deduction, set-off, banker's lien, counterclaim,
defense, recoupment or any other right in favor of any person or entity other
than the Administrative Agent. By your execution of this letter agreement you
also acknowledge that, as of the date hereof, you have received no notice of any
other pledge or assignment of the Account and have not executed any agreements
with third parties covering the disposition of funds in the Account. You agree
with the Administrative Agent as follows:
SECTION 29 NOTWITHSTANDING ANYTHING TO THE CONTRARY OR ANY OTHER
AGREEMENT RELATING TO THE ACCOUNT, THE ACCOUNT IS AND SHALL BE MAINTAINED
FOR THE BENEFIT OF THE ADMINISTRATIVE AGENT, SHALL BE ENTITLED "CITICORP
USA, INC. [NAME OF
A1-1
COMPANY] ACCOUNT" AND SHALL BE SUBJECT TO WRITTEN INSTRUCTIONS ONLY FROM AN
AUTHORIZED OFFICER OF THE ADMINISTRATIVE AGENT.
SECTION 30 [A POST OFFICE BOX (THE "LOCKBOX") HAS BEEN RENTED IN THE
NAME OF THE COMPANY AT THE [__________] POST OFFICE AND THE ADDRESS TO BE
USED FOR SUCH LOCKBOX IS:
[Insert address]
Your authorized representatives shall have access to the Lockbox under the
authority given by the Company to the post office and shall make regular
pick-ups from the Lockbox timed to gain maximum benefit of early
presentation and availability of funds. You shall endorse process all
checks received in the Lockbox and deposit such checks (to the extent
eligible) in the Account in accordance with the procedures set forth below.
(a) YOU SHALL FOLLOW YOUR USUAL OPERATING PROCEDURES FOR THE
HANDLING OF ANY [CHECKS RECEIVED FROM THE LOCKBOX OR OTHER] REMITTANCE
RECEIVED IN THE ACCOUNT THAT CONTAINS RESTRICTIVE ENDORSEMENTS,
IRREGULARITIES (SUCH AS A VARIANCE BETWEEN THE WRITTEN AND NUMERICAL
AMOUNTS), UNDATED OR POSTDATED ITEMS, MISSING SIGNATURES, INCORRECT
PAYEES AND THE LIKE.
(b) YOU SHALL ENDORSE AND PROCESS ALL ELIGIBLE CHECKS AND OTHER
REMITTANCE ITEMS NOT COVERED BY CLAUSE (C) BELOW AND DEPOSIT SUCH
CHECKS AND REMITTANCE ITEMS IN THE ACCOUNT.
(c) YOU SHALL MAIL ALL CHECKS RETURNED UNPAID BECAUSE OF
UNCOLLECTED OR INSUFFICIENT FUNDS UNDER APPROPRIATE ADVICE TO THE
COMPANY (WITH A COPY OF THE NOTIFICATION OF RETURN TO THE
ADMINISTRATIVE AGENT). You may charge the Account for the amounts of
any returned check that has been previously credited to the Account.
To the extent insufficient funds remain in the Account to cover any
such returned check, the Company shall indemnify you for the
uncollected amount of such returned check upon your demand.
(d) YOU SHALL MAINTAIN A RECORD OF ALL CHECKS AND OTHER
REMITTANCE ITEMS RECEIVED IN THE ACCOUNT AND, IN ADDITION TO PROVIDING
THE COMPANY WITH PHOTOSTATIC COPIES THEREOF, VOUCHERS, ENCLOSURES AND
THE LIKE OF SUCH CHECKS AND REMITTANCE ITEMS ON A DAILY BASIS, FURNISH
TO THE ADMINISTRATIVE AGENT A MONTHLY STATEMENT OF THE ACCOUNT TO
CITICORP USA, INC., AS ADMINISTRATIVE AGENT AT THE FOLLOWING ADDRESS:
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ATTENTION:
[__________], WITH A COPY TO THE COMPANY.] (1)
SECTION 31 YOU SHALL TRANSFER (BY WIRE TRANSFER OR OTHER METHOD OF
TRANSFER MUTUALLY ACCEPTABLE TO YOU AND THE ADMINISTRATIVE AGENT) TO THE
ADMINISTRATIVE AGENT,
----------
(1) If the Account is tied to a particular lockbox.
A1-2
IN SAME DAY FUNDS, ON EACH BUSINESS DAY, THE ENTIRE BALANCE IN THE ACCOUNT
TO THE FOLLOWING ACCOUNT:
ABA Number:
Citibank, N.A.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Account Name: ______________
Concentration Account
Account Number: __________
Reference: _____
Attn: __________________
or to such other account as the Administrative Agent may from time to time
designate in writing (the "Administrative Agent Concentration Account").
SECTION 32 ALL CUSTOMARY SERVICE CHARGES AND FEES WITH RESPECT TO THE
ACCOUNT SHALL BE DEBITED TO THE ACCOUNT. IN THE EVENT INSUFFICIENT FUNDS
REMAIN IN THE ACCOUNT TO COVER SUCH CUSTOMARY SERVICE CHARGES AND FEES, THE
COMPANY SHALL PAY AND INDEMNIFY YOU FOR THE AMOUNTS OF SUCH CUSTOMARY
SERVICE CHARGES AND FEES.
This letter agreement shall be binding upon and shall inure to the
benefit of you, the Company, the Administrative Agent, the Secured Parties
referred to in the Pledge and Security Agreement and the respective successors,
transferees and assigns of any of the foregoing. This letter agreement may not
be modified except upon the mutual consent of the Administrative Agent, the
Company and you. You may terminate the letter agreement only upon 30 days' prior
written notice to the Company and the Administrative Agent. The Administrative
Agent may terminate this letter agreement upon 10 days' prior written notice to
you and the Company. Upon such termination you shall close the Account and
transfer all funds in the Account to the Administrative Agent Concentration
Account or as otherwise directed by the Administrative Agent. After any such
termination, you shall nonetheless remain obligated promptly to transfer to the
Administrative Agent Concentration Account or as the Administrative Agent may
otherwise direct all funds and other property received in respect of the
Account.
This letter agreement may be executed in any number of counterparts
and by different parties hereto in separate counterparts, each of which when so
executed shall be deemed to be an original and all of which when taken together
shall constitute one and the same agreement. Delivery of an executed counterpart
of a signature page to this letter agreement by telecopier shall be effective as
delivery of a manually executed counterpart of this letter agreement.
This letter agreement supersedes all prior agreements, oral or
written, with respect to the subject matter hereof and may not be amended,
modified or supplemented except by a writing signed by the Administrative Agent,
the Company and you. You have not, and, without the prior consent of the
Administrative Agent and the Company, you shall not, agree with any third part
to comply with instructions or other directions concerning the Account or the
disposition of funds in the Account originated by such third party.
A1-3
The Company hereby agrees to indemnify and hold you, your directors,
officers, agents and employees harmless against all claims, causes of action,
liabilities, lawsuits, demands and damages, including, without limitation, all
court costs and reasonable attorney fees, in each case in any way related to or
arising out of or in connection with this letter agreement or any action taken
or not taken pursuant hereto, except to the extent caused by your gross
negligence or willful misconduct.
This letter agreement shall be governed by, and construed in
accordance with, the law of the State of New York.
A1-4
Upon acceptance of this letter agreement it shall be the valid and
binding obligation of the Company, the Administrative Agent, and you, in
accordance with its terms.
Very truly yours,
[NAME OF COMPANY]
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
CITICORP USA, INC.,
as Administrative Agent
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
ACKNOWLEDGED AND AGREED
as of the date first above written:
[FINANCIAL INSTITUTION]
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
[SIGNATURE PAGE TO DEPOSIT ACCOUNT CONTROL ACCOUNT AGREEMENT]
A1-5
Exhibit A
to
Deposit Account Control Agreement
Form of Administrative Agent Blockage Notice
[Financial Institution]
[Address]
Re: Account No. ____________________ (the "Account")
Ladies and Gentlemen:
Reference is made to the Account and that certain Deposit Account
Control Agreement dated ________________ __, 20__ among you, Citicorp USA, Inc.,
as Administrative Agent (the "Administrative Agent"), and [__________] (the
"Deposit Account Control Agreement"). Capitalized terms used herein shall have
the meanings given to them in the Deposit Account Control Agreement.
The Administrative Agent hereby notifies you that, from and after the
date of this notice, you are hereby directed to transfer (by wire transfer or
other method of transfer mutually acceptable to you and the Administrative
Agent) to the Administrative Agent, in same day funds, on each business day, the
entire balance in the Account to the Administrative Agent Concentration Account
specified in clause Section 31 of the Deposit Account Control Agreement or to
such other account as the Administrative Agent may from time to time designate
in writing.
Very truly yours,
CITICORP USA, INC,
as Administrative Agent
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
A1-6
ANNEX 2
TO
PLEDGE AND SECURITY AGREEMENT
FORM OF SECURITIES ACCOUNT CONTROL AGREEMENT
[Name and Address
of Approved Securities
Intermediary]
_______________ __, 20__
Ladies and Gentlemen:
The undersigned ___________________ (the "Pledgor") together with
certain of its affiliates are party to a Pledge and Security Agreement dated May
1, 2006 in favor of Citicorp USA, Inc., as agent for the Secured Parties
referred to therein (the "Pledgee" and such agreement the "Pledge and Security
Agreement") pursuant to which a security interest is granted by the Pledgor in
all present and future Assets (hereinafter defined) in Account No. _______ of
the Pledgor (the "Pledge").
In connection therewith, the Pledgor hereby instructs you (the
"Approved Securities Intermediary") to do all of the following:
1. maintain the Account, as "_____ - Citicorp USA, Inc. Control Account";
2. hold in the Account the assets, including, without limitation, all
financial assets, securities, security entitlements and all other
property and rights now or hereafter received in such Account
(collectively the "Assets"), including, without limitation, those
assets listed on Schedule A (List of Assets) attached hereto and made
a part hereof;
3. provide to the Pledgee, with a duplicate copy to the Pledgor, a
monthly statement of Assets and a confirmation statement of each
transaction effected in the Account after such transaction is
effected; and
4. honor only the instructions or entitlement orders (within the meaning
of Section 8-102 of the UCC (as defined below) (the "Entitlement
Orders") in regard to or in connection with the Account given by an
Authorized Officer of the Pledgee, except as provided in the following
sentence. Until such time as the Pledgee gives a written notice in the
form of Exhibit A hereto to the Approved Securities Intermediary that
the Pledgor's rights under this sentence have been terminated (on
which notice the Approved Securities Intermediary may rely
exclusively), the Pledgor acting through an Authorized Officer may (a)
exercise any voting right that it may have with respect to any Asset,
(b) give Entitlement Orders and otherwise give instructions to enter
into purchase or sale transactions in the Account and (c) withdraw and
receive for its own use all regularly scheduled interest [and
dividends] paid with respect to the Assets [and all cash proceeds of
any sale of Assets] ("Permitted Withdrawals"); provided, however,
that, unless the Pledgee has consented to the specific transaction,
the ▇▇▇▇▇▇▇
▇▇-▇
shall not instruct the Approved Securities Intermediary to deliver
and, except as may be required by law or by court order, the Approved
Securities Intermediary shall not deliver, cash, securities, or
proceeds from the sale of, or distributions on, such securities out of
the Account to the Pledgor or to any other person or entity other than
Permitted Withdrawals.
By its signature below, the Approved Securities Intermediary agrees to
comply with the Entitlement Orders and instructions of an Authorized Officer of
the Pledgee (including, without limitation, any instruction with respect to
sales, trades, transfers and withdrawals of cash or other of the Assets) without
the further consent of the Pledgor or any other person (it being understood and
agreed by the Pledgor that the Approved Securities Intermediary shall have no
duty or obligation whatsoever to have knowledge of the terms of the Pledge and
Security Agreement or to determine whether or not an event of default exists
thereunder). The Pledgor hereby agrees to indemnify and hold harmless the
Approved Securities Intermediary, its affiliates, officers and employees from
and against all claims, causes of action, liabilities, lawsuits, demands and
damages, including, without limitation, all court costs and reasonable
attorney's fees, that may result by reason of the Approved Securities
Intermediary complying with such instructions of the Pledgee.
The Authorized Officer of the Pledgee who shall give oral instructions
hereunder shall confirm the same in writing to the Approved Securities
Intermediary within five days after such oral instructions are given.
For the purpose of this Agreement, the term "Authorized Officer of the
Pledgor" shall refer in the singular to _______________ or _______________ (each
of whom is, on the date hereof, an officer or director of the Pledgor) and
"Authorized Officer of the Pledgee" shall refer in the singular to any person
who is a vice president or managing director of the Pledgee. In the event that
the Pledgor shall find it advisable to designate a replacement for any of its
Authorized Officers, written notice of any such replacement shall be given to
the Approved Securities Intermediary and the Pledgee.
Except with respect to the obligations and duties as set forth herein,
this Agreement shall not impose or create any obligation or duty upon the
Approved Securities Intermediary greater than or in addition to the customary
and usual obligations and duties of the Approved Securities Intermediary to the
Pledgor.
As long as the Assets are pledged to the Pledgee, (i) the Approved
Securities Intermediary shall not invade the Assets to cover margin debits or
calls in any other account of the Pledgor and (ii) the Approved Securities
Intermediary agrees that, except for liens resulting from customary commissions,
fees, or charges based upon transactions in the Account, it subordinates in
favor of the Pledgee any security interest, lien or right of setoff the Approved
Securities Intermediary may have. The Approved Securities Intermediary
acknowledges that it has not received notice of any other security interest in
the Account or the Assets. In the event any such notice is received, the
Approved Securities Intermediary shall promptly notify the Pledgee. The Pledgor
herein represents that the Assets are free and clear of any lien or encumbrance
and agrees that, with the exception of the security interest granted to the
Pledgee, no lien or encumbrance shall be placed by it on the Assets without the
express written consent of both the Pledgee and the Approved Securities
Intermediary.
A2-2
This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns and it and the rights
and obligations of the parties hereto shall be governed by, and construed and
interpreted in accordance with, and the law of the Approved Securities
Intermediary's jurisdiction for the purposes of Section 8-110 of the Uniform
Commercial Code in effect in the State of New York (the "UCC") shall be, the law
of the State of New York.
The Approved Securities Intermediary shall treat all property at any
time held by the Approved Securities Intermediary in the Account as Financial
Assets within the meaning of the UCC. The Approved Securities Intermediary
acknowledges that this Agreement constitutes written notification to the
Approved Securities Intermediary, pursuant to the UCC and any applicable federal
regulations for the Federal Reserve Book Entry System, of the Pledgee's security
interest in the Assets. The Pledgor, Pledgee and Approved Securities
Intermediary are entering into this Agreement to provide for the Pledgee's
control of the Assets and to confirm the first priority of the Pledgee's
security interest in the Assets.
If any term or provision of this Agreement is determined to be invalid
or unenforceable, the remainder of this Agreement shall be construed in all
respects as if the invalid or unenforceable term or provision were omitted. This
Agreement may not be altered or amended in any manner without the express
written consent of the Pledgor, the Pledgee and the Approved Securities
Intermediary. This Agreement may be executed in any number of counterparts, all
of which shall constitute one original agreement.
The Pledgor hereby agrees to indemnify and hold you, your directors,
officers, agents and employees harmless against all claims, causes of action,
liabilities, lawsuits, demands and damages, including, without limitation, all
court costs and reasonable attorney fees, in each case in any way related to or
arising out of or in connection with this letter agreement or any action taken
or not taken pursuant hereto, except to the extent caused by your gross
negligence or willful misconduct.
This Agreement may be terminated by the Approved Securities
Intermediary upon 30 day's prior written notice to the Pledgor and the Pledgee.
Upon expiration of such 30-day period, the Approved Securities Intermediary
shall be under no further obligation except to hold the Assets in accordance
with the terms of this Agreement, pending receipt of written instructions from
the Pledgor and the Pledgee, jointly, regarding the further disposition of the
pledged Assets.
The Pledgor acknowledges that this Agreement supplements any existing
agreement of the Pledgor with the Approved Securities Intermediary and, except
as expressly provided herein, is in no way intended to abridge any right that
the Approved Securities Intermediary might otherwise have.
A2-3
IN WITNESS WHEREOF, the Pledgor and the Pledgee have caused this
Agreement to be executed by their duly authorized officers all as of the date
first above written.
[NAME OF PLEDGOR]
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
CITICORP USA, INC.,
as Administrative Agent
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
ACCEPTED AND AGREED
as of the date first above written:
[APPROVED FINANCIAL INTERMEDIARY]
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
[SIGNATURE PAGE TO SECURITIES ACCOUNT CONTROL AGREEMENT]
A2-4
Schedule A
to
SECURITIES ACCOUNT Control Agreement
Pledged Collateral Account Number: _____________
A2-5
Exhibit A
to
Securities Account Control Agreement
Form of Administrative Agent Notice of Control
[Securities Intermediary]
[Address]
Re: Account No. ____________________ (the "Account")
Ladies and Gentlemen:
Reference is made to the Account and that certain Securities Account
Control Agreement dated __________ __, 20__ among you, Citicorp USA, Inc., as
Administrative Agent (the "Administrative Agent"), and [_____________ (the
"Pledgor")] (such agreement, the "Securities Account Control Agreement").
Capitalized terms used herein shall have the meanings given to them in the
Securities Account Control Agreement.
The Administrative Agent hereby notifies you that, from and after the
date of this notice, the Pledgor's rights to give Entitlement Orders with
respect to the Account and the other rights afforded to the Pledgor under
paragraph 4 of the Securities Account Control Agreement are terminated. From and
after the delivery of this notice to you, you shall honor only the Entitlement
Orders in regard to or in connection with the Account and/or the financial
assets contained therein given by an Authorized Officer of the Administrative
Agent.
Very truly yours,
CITICORP USA, INC,
as Administrative Agent
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
A2-6
ANNEX 3
TO
PLEDGE AND SECURITY AGREEMENT
FORM OF PLEDGE AMENDMENT
This PLEDGE AMENDMENT, dated as of ________________ __, 20__, is
delivered pursuant to Section 15.4(a) (Pledged Collateral) of the Pledge and
Security Agreement, dated as of May 1, 2006, by WCI Steel Acquisition, Inc. (the
"The Company"), the [undersigned Grantor and the other ]Subsidiaries of the
Company from time to time party thereto as Grantors in favor of Citicorp USA,
Inc., as agent for the Secured Parties referred to therein (the "Pledge and
Security Agreement") and the undersigned hereby agrees that this Pledge
Amendment may be attached to the Pledge and Security Agreement and that the
Pledged Collateral listed on this Pledge Amendment shall be and become part of
the Collateral referred to in the Pledge and Security Agreement and shall secure
all Secured Obligations of the undersigned. Capitalized terms used herein but
not defined herein are used herein with the meaning given them in the Pledge and
Security Agreement.
[GRANTOR]
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Pledged Stock
NUMBER OF SHARES,
ISSUER CLASS CERTIFICATE NO(S). PAR VALUE UNITS OR INTERESTS
------ ----- ------------------ --------- -------------------
Pledged Debt Instruments
PRINCIPAL
ISSUER DESCRIPTION OF DEBT CERTIFICATE NO(S). FINAL MATURITY AMOUNT
------ ------------------- ------------------ -------------- ---------
A3-1
ACKNOWLEDGED AND AGREED
as of the date first above written:
CITICORP USA, INC.,
as Administrative Agent
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
A3-2
ANNEX 4
TO
PLEDGE AND SECURITY AGREEMENT
This JOINDER AGREEMENT, dated as of ________________ __, 20__, is
delivered pursuant to Section 18.10 (Additional Grantors) of the Pledge and
Security Agreement, dated as of May 1, 20__, by WCI Steel Acquisition, Inc. (the
"The Company") and the Subsidiaries of the Company listed on the signature pages
thereof in favor of the Citicorp USA, Inc., as agent for the Secured Parties
referred to therein (the "Pledge and Security Agreement"). Capitalized terms
used herein but not defined herein are used with the meanings given them in the
Pledge and Security Agreement.
By executing and delivering this Joinder Agreement, the undersigned,
as provided in Section 18.10 (Additional Grantors) of the Pledge and Security
Agreement, hereby becomes a party to the Pledge and Security Agreement as a
Grantor thereunder with the same force and effect as if originally named as a
Grantor therein and, without limiting the generality of the foregoing, hereby
grants to the Administrative Agent, as collateral security for the full, prompt
and complete payment and performance when due (whether at stated maturity, by
acceleration or otherwise) of the Secured Obligations of the undersigned, hereby
collaterally assigns, mortgages, pledges and hypothecates to the Administrative
Agent and grants to the Administrative Agent a Lien on and security interest in,
all of its right, title and interest in, to and under the Collateral of the
undersigned and expressly assumes all obligations and liabilities of a Grantor
thereunder.
The information set forth in Annex 1-A is hereby added to the
information set forth in Schedules 1 through 6 to the Pledge and Security
Agreement. [By acknowledging and agreeing to this Joinder Agreement, the
undersigned hereby agree that this Joinder Agreement may be attached to the
Pledge and Security Agreement and that the Pledged Collateral listed on Annex
1-A to this Pledge Amendment shall be and become part of the Collateral referred
to in the Pledge and Security Agreement and shall secure all Secured Obligations
of the undersigned.](2)
The undersigned hereby represents and warrants that each of the
representations and warranties contained in Article XIV (Representations and
Warranties) of the Pledge and Security Agreement applicable to it is true and
correct on and as the date hereof as if made on and as of such date.
IN WITNESS WHEREOF, the undersigned has caused this Joinder Agreement
to be duly executed and delivered as of the date first above written.
[ADDITIONAL GRANTOR]
By:
----------------------------------
Name:
--------------------------------
Title:
-------------------------------
----------
(2) Insert to pledge Stock of the new Subsidiary without doing a Pledge
Amendment.
A5-1
ACKNOWLEDGED AND AGREED
as of the date first above written:
[EACH GRANTOR PLEDGING
ADDITIONAL COLLATERAL]
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
CITICORP USA, INC.,
as Administrative Agent
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
A5-2
ANNEX 5
TO
PLEDGE AND SECURITY AGREEMENT
Form of Short Form Intellectual Property Security Agreement(3)
[COPYRIGHT] [PATENT] [TRADEMARK] SECURITY AGREEMENT, dated as of
_______________ __, 20__, by each of the entities listed on the signature pages
hereof [or that becomes a party hereto pursuant to Section 18.10 (Additional
Grantors) of the Security Agreement referred to below] (each a "Grantor" and,
collectively, the "Grantors"), in favor of Citicorp USA, Inc. ("CUSA"), as agent
for the Secured Parties (as defined in the Credit Agreement referred to below)
(in such capacity, the "Administrative Agent").
Witnesseth:
WHEREAS, pursuant to the Credit Agreement, dated as of May 1, 2006 (as
the same may be amended, restated, supplemented or otherwise modified from time
to time, the "Credit Agreement"), among WCI Steel Acquisition, Inc. (the "The
Company"), the Lenders and Issuers party thereto and CUSA, as agent for the
Lenders and Issuers, the Lenders and the Issuers have severally agreed to make
extensions of credit to the Company upon the terms and subject to the conditions
set forth therein;
WHEREAS, the Grantors other than the Company are party to the Guaranty
pursuant to which they have guaranteed the Obligations; and
WHEREAS, all the Grantors are party to a Pledge and Security Agreement
of even date herewith in favor of the Administrative Agent (the "Security
Agreement") pursuant to which the Grantors are required to execute and deliver
this [Copyright] [Patent] [Trademark] Security Agreement;
NOW, THEREFORE, in consideration of the premises and to induce the
Lenders, the Issuers and the Administrative Agent to enter into the Credit
Agreement and to induce the Lenders and the Issuers to make their respective
extensions of credit to the Company thereunder, each Grantor hereby agrees with
the Administrative Agent as follows:
II. DEFINED TERMS
Unless otherwise defined herein, terms defined in the Credit Agreement
or in the Security Agreement and used herein have the meaning given to them in
the Credit Agreement or the Security Agreement.
III. GRANT OF SECURITY INTEREST IN [COPYRIGHT] [TRADEMARK] [PATENT]
COLLATERAL
Each Grantor, as collateral security for the full, prompt and complete
payment and performance when due (whether at stated maturity, by acceleration or
otherwise) of the Secured Obligations of such Grantor, hereby mortgages, pledges
and hypothecates to the Administrative Agent for the benefit of the Secured
Parties, and grants to the Administrative Agent for the benefit of the Secured
Parties a lien on and security interest in, all of its right, title
----------
(3) Separate short form agreements should be filed relating to each Grantor's
respective copyrights, patents and trademarks.
A5-1
and interest in, to and under the following Collateral of such Grantor (the
"[Copyright] [Patent] [Trademark] Collateral"):
A. [all of its Copyrights and Copyright Licenses to which it is a party,
including, without limitation, those referred to on Schedule I hereto;
B. all extensions of the foregoing; and
C. all Proceeds of the foregoing, including, without limitation, any claim by
Grantor against third parties for past, present or future infringement of any
Copyright or Copyright licensed under any Copyright License.]
D. or
E. all of its Patents and Patent Licenses to which it is a party, including,
without limitation, those referred to on Schedule I hereto;
F. all reissues, continuations or continuations-in-part of the foregoing; and
G. all Proceeds of the foregoing, including, without limitation, any claim by
Grantor against third parties for past, present or future infringement of any
Patent or any Patent licensed under any Patent License.]
H. or
I. all of its Trademarks and Trademark Licenses to which it is a party,
including, without limitation, those referred to on Schedule I hereto;
J. all goodwill of the business connected with the use of, and symbolized by,
each Trademark; and
K. all Proceeds of the foregoing, including, without limitation, any claim by
Grantor against third parties for past, present, future (i) infringement or
dilution of any Trademark or Trademark licensed under any Trademark License or
(ii) injury to the goodwill associated with any Trademark or any Trademark
licensed under any Trademark License.]
IV. SECURITY AGREEMENT
The security interest granted pursuant to this [Copyright] [Patent]
[Trademark] Security Agreement is granted in conjunction with the security
interest granted to the Administrative Agent pursuant to the Security Agreement
and each Grantor hereby acknowledges and affirms that the rights and remedies of
the Administrative Agent with respect to the security interest in the
[Copyright] [Patent] [Trademark] Collateral made and granted hereby are more
fully set forth in the Security Agreement, the terms and provisions of which are
incorporated by reference herein as if fully set forth herein.
[SIGNATURE PAGES FOLLOW]
A5-2
IN WITNESS WHEREOF, each Grantor has caused this [Copyright] [Patent]
[Trademark] Security Agreement to be executed and delivered by its duly
authorized offer as of the date first set forth above.
Very truly yours,
[GRANTOR],
as Grantor
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
ACCEPTED AND AGREED
as of the date first above written:
CITICORP USA, INC.,
as Administrative Agent
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
[SIGNATURE PAGE TO [COPYRIGHT] [PATENT] [TRADEMARK] SECURITY AGREEMENT]
A5-3
Schedule I
to
[Copyright] [Patent] [Trademark] Security Agreement
[Copyright] [Patent] [Trademark] Registrations
INCLUDE ONLY U.S. REGISTERED INTELLECTUAL PROPERTY
G. [REGISTERED COPYRIGHTS
[Include Copyright Registration Number and Date]
H. COPYRIGHT APPLICATIONS
I. COPYRIGHT LICENSES]
J. [REGISTERED PATENTS
K. PATENT APPLICATIONS
L. PATENT LICENSES]
M. [REGISTERED TRADEMARKS
N. TRADEMARK APPLICATIONS
O. TRADEMARK LICENSES]
[Include complete legal description of agreement (name of agreement, parties and
date)]
A5-4
TABLE OF CONTENTS
PAGE
----
Article 1 Defined Terms.................................................. 1
Section 1.1 Definitions............................................ 1
Section 1.2 Certain Other Terms.................................... 5
Article 2 Grant of Security Interest..................................... 6
Section 2.1 ....................................................... 6
Section 2.2 Grant of Security Interest in Collateral............... 8
Section 2.3 Cash Collateral Accounts............................... 8
Article 3 Representations and Warranties................................. 8
Section 3.1 Title; No Other Liens.................................. 8
Section 3.2 Perfection and Priority................................ 8
Section 3.3 Jurisdiction of Organization; Chief Executive Office... 9
Section 3.4 Inventory and Equipment................................ 9
Section 3.5 Pledged Collateral..................................... 9
Section 3.6 Accounts............................................... 10
Section 3.7 Intellectual Property.................................. 10
Section 3.8 Deposit Accounts; Securities Accounts.................. 10
Section 3.9 Commercial Tort Claims................................. 11
Article 4 Covenants...................................................... 11
Section 4.1 Generally.............................................. 11
Section 4.2 Maintenance of Perfected Security Interest; Further
Documentation........................................ 11
Section 4.3 Changes in Locations, Name, Etc........................ 12
Section 4.4 Pledged Collateral..................................... 12
Section 4.5 Accounts............................................... 14
Section 4.6 Delivery of Instruments and Chattel Paper.............. 14
Section 4.7 Intellectual Property.................................. 14
Section 4.8 Vehicles............................................... 16
Section 4.9 Payment of Obligations................................. 16
Section 4.10 Insurance.............................................. 16
Section 4.11 Notice of Commercial Tort Claims....................... 17
Article 5 Remedial Provisions............................................ 17
Section 5.1 Code and Other Remedies................................ 17
Section 5.2 Accounts and Payments in Respect of General
Intangibles............................................ 18
Section 5.3 Pledged Collateral..................................... 19
i
Section 5.4 Proceeds to be Turned Over To Administrative Agent..... 20
Section 5.5 Registration Rights.................................... 20
Section 5.6 Deficiency............................................. 21
Article 6 The Administrative Agent....................................... 21
Section 6.1 Administrative Agent's Appointment as
Attorney-in-Fact....................................... 21
Section 6.2 Duty of Administrative Agent........................... 22
Section 6.3 Authorization of Financing Statements.................. 23
Section 6.4 Authority of Administrative Agent...................... 23
Article 7 Miscellaneous.................................................. 23
Section 7.1 Amendments in Writing.................................. 23
Section 7.2 Notices................................................ 23
Section 7.3 No Waiver by Course of Conduct; Cumulative Remedies.... 24
Section 7.4 Successors and Assigns................................. 24
Section 7.5 Counterparts........................................... 24
Section 7.6 Severability........................................... 24
Section 7.7 Section Headings....................................... 24
Section 7.8 Entire Agreement....................................... 25
Section 7.9 Governing Law.......................................... 25
Section 7.10 Additional Grantors.................................... 25
Section 7.11 Release of Collateral.................................. 25
Section 7.12 Reinstatement.......................................... 26
Section 7.13 Intercreditor Issues................................... 26
ii
TABLE OF CONTENTS
PAGE
----
ANNEXES AND SCHEDULES
Annex 1 Form of Deposit Account Control Agreement
Annex 2 Form of Securities Account Control Agreement
Annex 3 Form of Pledge Amendment
Annex 4 Form of Joinder Agreement
Annex 5 Form of Short Form Intellectual Property Security Agreement
Schedule 1 Jurisdiction of Organization; Principal Executive Office
Schedule 2 Pledged Collateral
Schedule 3 Filings
Schedule 4 Location of Inventory and Equipment
Schedule 5 Intellectual Property
Schedule 6 Bank Accounts; Control Accounts
Schedule 7 Commercial Tort Claims
EXHIBIT J
FORM OF BORROWING BASE CERTIFICATE
Date: ________________ __, 20__
Number: _______________________
Reference is made to the Credit Agreement, dated as of May 1, 2006 (as
the same may be amended, restated, supplemented or otherwise modified from time
to time, the "Credit Agreement"), among the WCI Steel Acquisition, Inc. (the
"Borrower"), the Lenders and Issuers party thereto and Citicorp USA, Inc., as
agent for the Lenders and Issuers. Capitalized terms used herein and not
otherwise defined herein are used herein as defined in the Credit Agreement.
Pursuant to Section 6.12 (Borrowing Base Determination) of the Credit
Agreement, the undersigned Responsible Officer of the Borrower hereby certifies
that as of the close of business on the date set forth above, the Borrowing Base
of the Borrower is computed as set forth on Exhibit A attached hereto.
WCI STEEL ACQUISITION, INC.
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
EXHIBIT A
INTERCREDITOR AGREEMENT
This INTERCREDITOR AGREEMENT, dated as of May 1, 2006, is entered into
among Citicorp, USA, Inc., as Administrative Agent for the lenders and issuers
under the Credit Agreement referred to below (in such capacity, the "Credit
Agreement Administrative Agent"), and The Bank of New York Trust Company, N.A.,
as trustee under the Collateral Trust Agreement referred to below (in such
capacity, the "Collateral Trustee").
WITNESSETH:
WHEREAS, WCI Steel, Inc., a Delaware corporation (formerly known as
WCI Steel Acquisition, Inc.) (the "Company"), certain of its subsidiaries, the
lenders and issuers party thereto from time to time and the Credit Agreement
Administrative Agent are entering into a Credit Agreement, dated as of May __,
2006 (as such agreement may be amended, restated, supplemented, renewed or
otherwise modified from time to time, together with any other agreements
pursuant to which any of the Indebtedness, commitments, obligations, costs,
expenses, fees, reimbursements, indemnities or other obligations payable or
owing thereunder may be refinanced, restructured, renewed, extended, increased,
refunded or replaced, the "Credit Agreement");
WHEREAS, WCI Steel, Inc., in its capacity as Settlor, and the
Collateral Trustee entered into the Collateral Trust Agreement, dated as of
______, 2006 (as such agreement may be amended, restated, supplemented, renewed
or otherwise modified from time to time, the "Collateral Trust Agreement");
WHEREAS, the Company and the United Steel, Paper and Forestry, Rubber,
Manufacturing, Energy Allied Industrial and Service Union, AFL-CIO (formerly
known as the United Steel Workers of America ("USW")) are entering into the
Collective Bargaining Agreement, dated as of _________, 2006 (as such agreement
may be amended, restated, supplemented or otherwise modified from time to time,
the "CBA"), pursuant to which, among others, the Collateral Trustee is granted a
conditional second priority lien on certain assets of the Company subject to the
first priority lien of the Credit Agreement Administrative Agent under the
Credit Agreement, and the parties hereto wish to enter into this Agreement to
govern the rights of the parties with respect to such common collateral; and
WHEREAS, it is a condition to the initial extensions of credit under
the Credit Agreement that the parties hereto execute and deliver this Agreement;
NOW, THEREFORE, in consideration of the premises and the covenants and
agreements contained herein, the parties hereto hereby agree as follows:
DEFINITIONS
Definitions
Unless otherwise defined herein, terms are used herein as defined in
the Credit Agreement as in effect on the date hereof. In addition, as used in
this Agreement, the following terms shall have the following meanings (such
meanings to be equally applicable to both the singular and plural forms of the
terms defined):
"Agent" shall mean each of the Senior Agent and the Junior Agent.
"Agreement" shall mean this Intercreditor Agreement, as amended,
restated, supplemented or otherwise modified from time to time in accordance
with the terms hereof.
"Bankruptcy Code" shall mean title 11, United States Code.
"Bankruptcy Law" shall mean the Bankruptcy Code, or any similar
federal, state or foreign Requirement of Law for the relief of debtors or any
arrangement, reorganization, insolvency, moratorium, assignment for the benefit
of creditors, any other marshalling of the assets and liabilities of the Company
or any other Credit Party or any similar law relating to or affecting the
enforcement of creditors' rights generally.
"Collateral Documents" shall mean this Agreement, the Senior
Documents, the Junior Documents and all other security agreements, pledge
agreements, mortgages, guaranties and other documents executed and/or delivered
by the Credit Parties pursuant to which any Lien or security interest is created
or granted to secure any Secured Claims.
"Collateral Trust Agreement" shall have the meaning set forth in the
recitals to this Agreement.
"Collateral Trust Claims" shall mean all Indebtedness, obligations and
other liabilities (contingent or otherwise) of the Credit Parties arising under
or with respect to the Junior Documents or any of them.
"Collateral Trustee" shall include, in addition to the Collateral
Trustee referred to in the recitals hereto, any successors and assigns thereto
or any acting Collateral Trustee, in each case, as permitted under the
Collateral Trust Agreement.
"Company" shall have the meaning set forth in the recitals to this
Agreement.
"Credit Agreement" shall have the meaning set forth in the recitals to
this Agreement.
"Credit Agreement Administrative Agent" shall include, in addition to
the Credit Agreement Administrative Agent referred to in the recitals hereto,
(a) any successors and assigns thereto or any acting Credit Agreement
Administrative Agent, in each case, as permitted under the Credit Agreement, and
(b) if there is no acting Credit Agreement Administrative Agent, the Requisite
Lenders (as defined in the Credit Agreement).
"Credit Agreement Claims" shall mean all Indebtedness, Obligations and
other liabilities (contingent or otherwise) of the Credit Parties arising under
or with respect to the Senior Documents or any of them.
"Credit Agreement Collateral" shall have the meaning given such term
in the Pledge and Security Agreement.
"Credit Parties" shall mean each of the Company and each of its
Subsidiaries party from time to time to a Collateral Document.
"Enforcement Action" shall mean, with respect to the Senior Claims or
the Junior Claims, the exercise of, or joining with any other Person to
exercise, any rights and remedies with
7
respect to any Credit Agreement Collateral or the commencement or prosecution of
enforcement of any of the rights and remedies under, as applicable, the Senior
Documents or the Junior Documents, or applicable Requirement of Law, including
without limitation the exercise of any rights of set-off or recoupment, and the
exercise of any rights or remedies of a secured creditor under the UCC of any
applicable jurisdiction or under Bankruptcy Law.
"Insolvency or Liquidation Proceeding" shall mean, collectively, (a)
any voluntary or involuntary case or proceeding under the Bankruptcy Law with
respect to the Company or any other Credit Party, (b) any other voluntary or
involuntary insolvency, reorganization or bankruptcy case or proceeding, or any
receivership, liquidation, reorganization or other similar case or proceeding
with respect to the Company or any other Credit Party or with respect to any of
their respective assets, (c) any liquidation, dissolution, reorganization or
winding up of the Company or any Credit Party, whether voluntary or involuntary
and whether or not involving insolvency or bankruptcy, (except as permitted by
Section 8.7 (Restrictions on Fundamental Changes) of the Credit Agreement), and
(d) any assignment for the benefit of creditors or any other marshaling of
assets and liabilities of the Company or any other Credit Party.
"Junior Agent" shall mean the Collateral Trustee.
"Junior Claims" shall mean with respect to any Credit Agreement
Collateral, all Collateral Trust Claims.
"Junior Documents" shall mean the Collateral Trust Agreement, the CBA,
each Open-End Mortgage, Assignment of Rents, Security Agreement and Fixture
Filing between the Company or any of its Subsidiarieas and the Collateral
Trustee and each other agreement, document or certificate executed by the
Company or any of its Subsidiaires and delivered to the Collateral Agent or USW
in connection with or pursuant to any of the foregoing.
"Junior Liens" shall mean all Liens on the Credit Agreement Collateral
securing the Collateral Trust Claims.
"Junior Secured Parties" shall mean the Persons holding the Collateral
Trust Claims.
"pay in full," "paid in full" or "payment in full" shall mean with
respect to any Secured Claims, the payment in full in cash of the principal of,
accrued (but unpaid) interest and premium, if any, on all such Secured Claims
and, with respect to letters of credit outstanding thereunder, delivery of cash
collateral or backstop letters of credit in respect thereof in compliance with
the relevant Collateral Documents, in each case, after or concurrently with
termination of all Commitments thereunder and payment in full in cash of any
other such Secured Claims that are due and payable at or prior to the time such
principal and interest are paid.
"Secured Claims" shall mean, collectively, the Credit Agreement Claims
and the Collateral Trust Claims.
"Secured Parties" shall mean, collectively, the Senior Secured Parties
and the Junior Secured Parties.
8
"Senior Agent" shall mean the Credit Agreement Administrative Agent
prior to the payment in full of the Credit Agreement Claims, and the Collateral
Trustee thereafter.
"Senior Claims" shall mean with respect to any Credit Agreement
Collateral, all Credit Agreement Claims. "Senior Claims" shall include (i) all
interest accrued or accruing (or which would, absent the commencement of an
Insolvency or Liquidation Proceeding, accrue) after the commencement of an
Insolvency or Liquidation Proceeding in accordance with and at the rate
specified in the Senior Documents whether or not the claim for such interest is
allowed as a claim in such Insolvency or Liquidation Proceeding, (ii) all Cash
Management Obligations, (ii) all Hedging Contract Obligations and (iv) all
indemnification Obligations. To the extent any payment with respect to the
Senior Claims (whether by or on behalf of any Credit Party, as proceeds of
security, enforcement of any right of setoff or otherwise) is declared to be
fraudulent or preferential in any respect, set aside or required to be paid to a
debtor in possession, trustee, receiver or similar Person, then the obligation
or part thereof originally intended to be satisfied shall be deemed to be
reinstated and outstanding as if such payment had not occurred.
"Senior Documents" shall mean Credit Agreement and any other Loan
Documents (as defined in the Credit Agreement).
"Senior Liens" shall mean all Liens on the Credit Agreement Collateral
securing the Credit Agreement Claims.
"Senior Secured Parties" shall mean the Persons holding the Credit
Agreement Claims.
"Uniform Commercial Code" or "UCC" shall mean the Uniform Commercial
Code of the applicable jurisdiction, as amended.
Certain Other Terms
The terms "herein," "hereof," "hereto" and "hereunder" and similar
terms refer to this Agreement as a whole and not to any particular Article,
Section, subsection or clause in this Agreement.
References herein to an Annex, Schedule, Article, Section, subsection
or clause, unless specifically stated otherwise, refer to the appropriate Annex
or Schedule to, or Article, Section, subsection or clause in this Agreement.
Where the context requires, provisions relating to any Credit
Agreement Collateral, when used in relation to any Credit Party, shall refer to
such Credit Party's Credit Agreement Collateral or any relevant part thereof.
Any reference in this Agreement to any Collateral Document shall
include all appendices, exhibits and schedules thereto, and, unless specifically
stated otherwise, all amendments, restatements, supplements or other
modifications thereto, and as the same may be in effect at any time such
reference becomes operative.
The term "including" shall mean "including, without limitation" except
when used in the computation of time periods.
9
References in this Agreement to any statute shall be to such statute
as amended or modified and in effect from time to time.
PRIORITY OF LIENS
Lien Subordination. Notwithstanding the date, manner or order of
grant, attachment or perfection of any Junior Lien or of any Senior Lien and
notwithstanding any provision of the UCC, any applicable Requirement of Law, any
Collateral Document, any alleged or actual defect or deficiency in any of the
foregoing or any other circumstance whatsoever, the Junior Agent, on behalf of
each Junior Secured Party, agrees that:
any Senior Lien, regardless of how acquired, whether by grant,
statute, operation of law, subrogation or otherwise, shall be and shall remain
senior and prior to any Junior Lien (whether or not such Senior Lien is
subordinated to any Lien securing any other obligation); and
any Junior Lien, regardless of how acquired, whether by grant,
statute, operation of law, subrogation or otherwise, shall be junior and
subordinate in all respects to any Senior Lien.
Prohibition on Contesting Liens. The Junior Agent, on behalf of each
Junior Secured Party, agrees that it shall not, and hereby waives any right,
prior to the payment in full of the Credit Agreement Claims, to:
raise any objection or otherwise contest, or support any other Person
in raising any objection or contesting, in any proceeding (including any
Enforcement Action or Insolvency or Liquidation Proceeding or in any related
action or proceeding), the priority, validity or enforceability of any Senior
Lien (including the priority set forth herein with respect to any Junior Lien);
or
demand, request, plead or otherwise assert or claim the benefit of any
marshalling, appraisal, valuation or other right which it may have under
applicable Requirements of Law in respect of the Credit Agreement Collateral or
the Senior Liens, except to the extent that such rights are expressly granted in
this Agreement.
New Liens.
The Junior Agent agrees that, prior to the payment in full of the
Credit Agreement Claims, if the Junior Agent shall acquire any Lien on any
Credit Agreement Collateral that is not subject to a first-priority Lien of the
Senior Agent, the Junior Agent shall, upon demand by the Senior Agent,
notwithstanding anything to the contrary in any other Junior Documents, assign
such Lien to the Senior Agent as security for the Credit Agreement Claims (in
which case the Junior Agent may retain a junior lien on such Credit Agreement
Collateral subject to the terms hereof), and, at all times prior to such
assignment, the Junior Agent shall be acting as a sub-agent of the Senior Agent
for the sole purpose of perfecting the Lien on such asset.
Each Credit Party hereby agrees not to grant, or to permit any of its
Subsidiaries to grant any Lien on any Credit Agreement Collateral securing the
Senior Claims or the Junior Claims, as the case may be, unless such Credit Party
or, as the case may be, such Subsidiary, has granted, through documentation in
form and substance satisfactory to the Senior Agent, a Senior
10
Lien on such asset in favor of the Senior Agent for the benefit of the Senior
Secured Parties as security for the Senior Claims.
Separate Liens. Each of the parties hereto acknowledges and agrees
that (i) the grants of Liens pursuant to the Collateral Documents constitute
separate and distinct grants of Liens and (ii) because of, among other things,
their differing rights in the Credit Agreement Collateral, the Junior Claims are
fundamentally different from the Senior Claims in respect of such Credit
Agreement Collateral, and the Junior Claims and Senior Claims must be separately
classified in any Insolvency Proceeding. To further effectuate the intent of the
parties as provided in the immediately preceding sentence, if it is held that
the Junior Claims and the Senior Claims in respect of such Credit Agreement
Collateral constitute only one secured claim (rather than separate classes of
senior and junior secured claims), then the Junior Secured Parties hereby
acknowledge and agree that all distributions shall be made as if there were
separate classes of senior and junior secured claims against the Credit Parties
(with the effect that, to the extent that the aggregate value of the Credit
Agreement Collateral is sufficient (for this purpose ignoring all claims held by
the Junior Secured Parties), the Senior Secured Parties shall be entitled to
receive, in addition to amounts distributed to them in respect of principal,
pre-petition interest and other claims, all amounts owing in respect of
post-petition interest before any distribution is made in respect of the claims
held by the Junior Secured Parties with respect to the Credit Agreement
Collateral, with the Junior Secured Parties hereby acknowledging and agreeing to
turn over to the Senior Secured Parties amounts otherwise received or receivable
by them to the extent necessary to effectuate the intent of this sentence, even
if such turnover has the effect of reducing the claim or recovery of the Junior
Secured Parties).
EXERCISE OF REMEDIES
Remedies.
(a) Prior to the payment in full of the Senior Claims, whether or not
any Insolvency or Liquidation Proceeding has been commenced by or against any
Credit Party:
no Junior Secured Party shall (or shall direct the Junior Agent
to) (A) exercise or seek to exercise any rights or remedies with
respect to the Credit Agreement Collateral, (B) institute any action
or proceeding with respect to such rights or remedies, including any
action of foreclosure, contest, protest with respect to the Credit
Agreement Collateral, (C) object to any foreclosure proceeding or
action brought by the Senior Agent or any Senior Secured Party or any
other exercise of any rights and remedies relating to the Credit
Agreement Collateral under the Senior Documents or otherwise, or (D)
object to the forbearance by the Senior Secured Parties from bringing
or pursuing any foreclosure proceeding or action or any other exercise
of any rights or remedies relating to the Credit Agreement Collateral;
and
the Senior Agent, on behalf of the Senior Secured Parties, shall
have the exclusive right to enforce rights, exercise remedies and make
determinations regarding release, disposition (including under Section
363(f) of the Bankruptcy Code) or restrictions with respect to the
Credit Agreement Collateral without any consultation with, or the
consent of, any Junior Secured Party.
In exercising rights and remedies with respect to any Credit Agreement
Collateral, the Senior Agent, on behalf of the Senior Secured Parties, in
respect of such Credit
11
Agreement Collateral may enforce the provisions of the Senior Documents and
exercise remedies thereunder, all in such order and in such manner as they may
determine in the exercise of their sole discretion. Such exercise and
enforcement shall include, without limitation, the rights of an agent appointed
by them to sell or otherwise dispose of such Credit Agreement Collateral upon
foreclosure, to incur expenses in connection with such sale or disposition, and
to exercise all the rights and remedies of a secured lender under the UCC of any
applicable jurisdiction and of a secured creditor under any Bankruptcy Law.
The Junior Agent, on behalf of each Junior Secured Party, agrees that,
prior to the payment in full of the Senior Claims, it will not take or receive
any such Credit Agreement Collateral or any proceeds of the Credit Agreement
Collateral in connection with the exercise of any right or remedy (including
setoff) with respect to such Credit Agreement Collateral. Without limiting the
generality of the foregoing, prior to the payment in full of the Senior Claims,
the sole right of the Junior Agent and the Junior Secured Parties with respect
to such Credit Agreement Collateral shall be the right to receive a share of the
proceeds thereof pursuant to Section 4.1 (Proceeds of Collateral).
The Junior Agent, on behalf of each Junior Secured Party (i) agrees
that neither it nor any Junior Secured Party will take any action that would
hinder any exercise of remedies undertaken by any Senior Secured Party under the
Collateral Documents, including any sale, lease, exchange, transfer or other
disposition of such Credit Agreement Collateral, whether by foreclosure or
otherwise, and (ii) hereby waives any and all rights it or any Junior Secured
Party may have as a junior creditor or otherwise to object to the manner in
which any Senior Secured Party may seek to enforce or collect the Senior Claims
or the Liens granted in any of such Collateral.
Exercise of Remedies as Unsecured Creditors. Notwithstanding anything
to the contrary in this Agreement, each Junior Secured Party may exercise its
rights and remedies as an unsecured creditor, and with respect to Collateral
which the Credit Agreement Administrative Agent has a junior priority Lien in
accordance with the Pledge and Security Agreement and the Mortgages, as secured
creditor, against the Credit Parties in accordance with the terms of the Junior
Documents and applicable Requirement of Law. In the event any Junior Secured
Party becomes a judgment lien creditor in respect of any Credit Agreement
Collateral as a result of its enforcement of its rights as an unsecured
creditor, such judgment lien shall be subordinated to any Lien on such Credit
Agreement Collateral securing any Senior Claim on the same basis and to the same
extent as the other Liens on such Credit Agreement Collateral securing the
Junior Claims are subordinated to those securing the Senior Claims under this
Agreement. Nothing in this Agreement modifies any rights or remedies which any
Senior Secured Party may have with respect to such Credit Agreement Collateral.
APPLICATION OF PAYMENTS; SUBROGATION
Proceeds of Collateral. Proceeds of any Credit Agreement Collateral
received by any party hereto in connection with or resulting from any
Enforcement Action, and whether or not pursuant to an Insolvency or Liquidation
Proceeding, shall be applied by the Senior Agent to the Senior Claims in such
order as specified in the Senior Documents until payment in full of all Senior
Claims. After payment in full of all Senior Claims, the Senior Agent shall
deliver to the Junior Agent any proceeds of the Credit Agreement Collateral held
by it in the same for as received, with any necessary endorsements or as a court
of competent jurisdiction may otherwise direct.
12
Payments Over. Any Credit Agreement Collateral or proceeds thereof
received by the Junior Agent in connection with the exercise of any right or
remedy (including setoff) relating to the Credit Agreement Collateral in
contravention of this Agreement shall be segregated and held in trust and
forthwith paid over to the Senior Agent for the benefit of the Senior Secured
Parties in the same form as received, with any necessary endorsements or as a
court of competent jurisdiction may otherwise direct.
Subrogation. The Junior Agent, on behalf of each Junior Secured Party,
hereby waives any rights of subrogation it may acquire as a result of any
payment hereunder until the Senior Claims shall have been paid in full. Upon
payment in full of such Senior Claims, the Junior Secured Parties shall be
subrogated to the rights of the Senior Secured Parties to receive payments or
distributions applicable to such Senior Claims.
INSOLVENCY OR LIQUIDATION PROCEEDINGS
Waivers. In the event an Insolvency or Liquidation Proceeding shall be
commenced by or against any Credit Party, each of the Junior Secured Parties
hereby agrees that such Person shall not, until the payment in full of the
Senior Claims (irrespective of whether the Senior Claims are scheduled to be
paid in full as part of an applicable Insolvency Proceeding):
seek any relief from, or modification of, the automatic stay as
provided in Section 362 of the Bankruptcy Code (or any similar provision of
Bankruptcy Law) or seek or accept any form of adequate protection under either
or both of Section 362 and Section 363 of the Bankruptcy Code;
oppose or object to the use of any Credit Agreement Collateral
constituting cash collateral by any Credit Party;
oppose or object to any financing with respect to any Credit Party
provided under any Bankruptcy Law (regardless of whether any Indebtedness
thereunder is senior to the Junior Claims or secured by Liens on the Credit
Agreement Collateral that are senior in priority to the Junior Liens on the
Credit Agreement Collateral) including any refinancing of the entire amount of
the Credit Agreement Claims, unless the Senior Agent or the Senior Secured
Parties shall have opposed or objected to such financing;
object to any item set forth in Section 2.2(a) (Prohibition on
Contesting Liens) hereof (irrespective of whether the Senior Claims are
scheduled to be paid in full as part of an applicable Insolvency Proceeding),
including (i) the amount of the Senior Claims allowed or permitted to be
asserted under any Bankruptcy Law or (ii) the extent to which the Senior Claims
are deemed secured claims, including under Section 506(a) of the Bankruptcy
Code;
oppose or object to (i) any protection provided to the Senior Secured
Parties, including any form of adequate protection under Section 362 or Section
363 of the Bankruptcy Code and the payment of amounts equal to interest and
expenses allowed under Section 506(b) and (c) of the Bankruptcy Code to any
Senior Secured Parties; or (ii) any consent or objection by the Senior Agent to
any motion, relief, action or proceeding based on any Person (including any
Senior Secured Party) claiming a lack of such adequate protection;
object to the treatment of the Senior Claims under a chapter 11 plan
of reorganization under the Bankruptcy Code or similar plan or reorganization or
arrangement under any other applicable Insolvency or Liquidation Proceeding;
13
oppose or object to any proposed sale of the Credit Agreement
Collateral pursuant to Section 363 of the Bankruptcy Code or any similar
provision of any applicable Bankruptcy Law; or
object to or oppose any use of Credit Agreement Collateral
constituting cash collateral by any Loan Party.
No Waiver by Senior Secured Parties. Nothing contained herein shall
prohibit or in any way limit any Senior Secured Party from objecting in any
Insolvency or Liquidation Proceeding (or otherwise) to any action taken by any
Junior Secured Party, including the seeking by such Junior Secured Party of
adequate protection or the asserting by such Junior Secured Party of any of its
rights and remedies under the Junior Documents (or otherwise) with respect to
such Collateral.
REPRESENTATIONS AND WARRANTIES
Each party hereto represents and warrants as follows:
Such party is duly organized, validly existing and in good standing
under the laws of the jurisdiction of its organization and has all requisite
power and authority to enter into and perform its obligations under this
Agreement.
This Agreement has been duly executed and delivered by such party and
constitutes a legal, valid and binding obligation of such party, enforceable in
accordance with its terms; except as may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the rights of
creditors generally and by general principles of equity.
The execution, delivery and performance by such party of this
Agreement (i) do not require any consent or approval of, registration or filing
with or any other action by any governmental authority and (ii) will not violate
any applicable Requirement of Law or regulation or the charter, by-laws or other
organizational documents of such party or any order of any governmental
authority or any indenture, agreement or other instrument binding upon such
party.
ACKNOWLEDGEMENTS AND CONSENTS
Reliance by Senior Secured Parties. The consent by the Senior Secured
Parties to the execution and delivery of the Junior Documents and the grant of a
Junior Lien on the Credit Agreement Collateral and all loans and other
extensions of credit made or deemed made on and after the date hereof by the
Senior Secured Parties to the Company shall be deemed to have been given and
made in reliance upon this Agreement.
Independent Analysis. The Junior Agent, on behalf of each Junior
Secured Party, acknowledges that it and each Junior Secured Party has,
independently and without reliance on the Senior Agent or any Senior Secured
Party, and based on documents and information deemed by it appropriate, made its
own credit analysis and decision to enter into this Agreement, the Junior
Documents, and the transactions contemplated hereby and thereby and agrees that
it will continue to make its own credit decision in taking or not taking any
action under the Junior Documents or this Agreement.
14
No Warranties or Liability. The Junior Agent, on behalf of each Junior
Secured Party, acknowledges and agrees that:
no Senior Secured Party has made any express or implied representation
or warranty, including with respect to the execution, validity, legality,
completeness, collectibility or enforceability of any Senior Document;
the Senior Secured Parties will be entitled to manage and supervise
their respective indebtedness of the Company as they may, in their sole
discretion, deem appropriate and without regard to any rights or interests that
any Junior Secured Party may have in the Credit Agreement Collateral or
otherwise, except as otherwise provided in this Agreement or under applicable
Requirement of Law; and
no Senior Secured Party shall have any duty to any Junior Secured
Party to act or refrain from acting in a manner which allows, or results in, the
occurrence or continuance of an event of default or default under any agreements
with any Credit Party (including the Junior Documents), regardless of any
knowledge thereof which they may have or be charged with.
No Waiver of Lien Priorities.
No right of any Senior Secured Party to enforce any provision of this
Agreement shall at any time in any way be prejudiced or impaired by any act or
failure to act on the part of any Credit Party or by any act or failure to act
by any Senior Secured Party, or by any noncompliance by any Person with the
terms, provisions and covenants of this Agreement, any of the Senior Documents
or any of the Junior Documents, regardless of any knowledge thereof which any
Senior Secured Party may have or be otherwise charged with.
Without in any way limiting the generality of the foregoing clause (a)
(except as set forth in any Senior Document), each Senior Secured Party, may, at
any time and from time to time, without the consent of, or notice to, any Junior
Secured Party, without incurring any liability to any Junior Secured Party and
without impairing or releasing the lien priorities and other benefits provided
in this Agreement (even if any right of subrogation or other right or remedy of
any Junior Secured Party is affected, impaired or extinguished thereby) do any
one or more of the following except as otherwise expressly prohibited or
conditioned herein:
change the manner, place or terms of payment or change or extend the
time of payment of, or renew, exchange, amend, increase or alter, the terms
of any Senior Claim, any Lien in respect of the Credit Agreement
Collateral, any guaranty of any Senior Claim, or any liability of any
Credit Party incurred directly or indirectly in respect of any of the
foregoing (including any increase in or extension of the Senior Claims,
without any restriction as to the amount, tenor or terms of any such
increase or extension) or otherwise amend, renew, exchange, extend, modify
or supplement in any manner the Senior Claims, any Liens held by the Senior
Agent, the Senior Secured Parties, or any of the Senior Documents;
sell, exchange, release, surrender, realize upon, enforce or otherwise
deal with in any manner and in any order any part of the Credit Agreement
Collateral or any liability of any Credit Party to the Senior Agent or any
Senior Secured Party, or any liability incurred directly or indirectly in
respect thereof;
15
settle or compromise any Senior Claim or any other liability of any
Credit Party or any security therefor or any liability incurred directly or
indirectly in respect thereof and apply any sums by whomsoever paid and
however realized to any liability (including the Senior Claims) in any
manner or order; and
exercise or delay in or refrain from exercising any right or remedy
against any security or any Credit Party or any other Person, elect any
remedy and otherwise deal freely with the Credit Parties, the Credit
Agreement Collateral and any security, any guarantor or any liability of
any Credit Party to any Senior Secured Party, or any liability incurred
directly or indirectly, in respect of the foregoing;
The Junior Agent, on behalf of each Junior Secured Party, also agrees
that no Senior Secured Party shall have any duty or liability to any Junior
Secured Party, and the Junior Agent, on behalf of each Junior Secured Party,
hereby waives all claims against each Senior Secured Party arising out of any
and all actions which any Senior Secured Party may take or permit or omit to
take with respect to: (i) the Senior Documents, (ii) the collection of the
Senior Claims, (iii) the foreclosure upon, or sale, liquidation or other
disposition of, the Credit Agreement Collateral, (iv) the release of any Lien in
respect of any Credit Agreement Collateral, or (v) the maintenance or
preservation of the Credit Agreement Collateral, the Senior Claims or otherwise;
and
The Junior Agent, on behalf of each Junior Secured Party, agrees not
to assert and hereby waives, to the fullest extent permitted by law, any right
to demand, request, plead or otherwise assert or otherwise claim the benefit of,
any marshalling, appraisal, valuation or other similar right that may otherwise
be available under applicable Requirement of Law or any other similar rights a
junior secured creditor may have under applicable Requirement of Law in respect
of any Credit Agreement Collateral.
Obligations Unconditional. All rights, interests, agreements and
obligations hereunder of the Senior Agent and the Senior Secured Parties and the
Junior Agent and the Junior Secured Parties shall remain in full force and
effect regardless of:
(a) any lack of validity or enforceability of any Senior Document or
any Junior Document and regardless of whether the Liens of the Senior Agent and
Senior Secured Parties are not perfected or are voidable for any reason;
(b) any change in the time, manner or place of payment of, or in any
other terms of, all or any of the Senior Claims or Junior Claims, or any
amendment or waiver or other modification, including any increase in the amount
thereof, whether by course of conduct or otherwise, of the terms of any Senior
Document or any Junior Document;
(c) any exchange, release or lack of perfection of any Lien on any
Credit Agreement Collateral or any other asset, or any amendment, waiver or
other modification, whether in writing or by course of conduct or otherwise, of
all or any of the Senior Claims or Junior Claims or any guarantee thereof;
(d) the commencement of any Insolvency or Liquidation Proceeding in
respect of any Credit Party; or
16
(e) any other circumstances which otherwise might constitute a defense
available to, or a discharge of, any Credit Party in respect of any Secured
Claim or of any Junior Secured Party in respect of this Agreement.
Releases. If in connection with:
the exercise of the Senior Agent's remedies in respect of the Credit
Agreement Collateral provided for in Section 3.1 (Remedies), including any sale,
lease, exchange, transfer or other disposition of such Credit Agreement
Collateral;
any sale, lease, exchange, transfer or other disposition of Credit
Agreement Collateral permitted under the terms of the Credit Agreement (whether
or not an event of default under, and as defined therein, has occurred and is
continuing); or
any agreement between the Senior Agent and the Company to release the
Senior Agent's Lien on any portion of the Credit Agreement Collateral or to
release any Subsidiary Guarantor from its obligations under its guaranty of the
Senior Claims;
the Senior Agent, for itself or on behalf of any of the Senior Secured Parties,
releases any of its Liens on any part of the Credit Agreement Collateral (or any
Subsidiary Guarantor from its obligations under its guaranty of the Senior
Lender Claims), the Liens, if any, of the Junior Agent, for itself or for the
benefit of the Junior Secured Parties, on such Credit Agreement Collateral (and
the obligations of such Subsidiary Guarantor under its guaranty of the Junior
Claims, if any) shall be automatically, unconditionally and simultaneously
released and the Junior Agent, for itself or on behalf of any such Junior
Secured Party, promptly shall execute and deliver to the Senior Agent or the
Company such termination statements, releases and other documents as the Senior
Agent or the Company may request and provide to effectively confirm such
release.
Attorney-in-Fact.
The Junior Agent, on behalf of each Junior Secured Party hereby
irrevocably constitutes and appoints the Senior Agent and any officer or agent
of such Senior Agent, with full power of substitution, as its true and lawful
attorney-in-fact with full irrevocable power and authority in the place and
stead of the Junior Agent or such holder or in such Senior Agent's own name,
from time to time in such Senior Agent's discretion, for the purpose of carrying
out the terms of this Agreement, to take any and all appropriate action and to
execute any and all documents and instruments which may be necessary or
desirable to accomplish the purposes of this Agreement, including any financing
statements, endorsements or other instruments or transfer or release.
Notwithstanding the grant of the foregoing power of attorney, nothing in this
Section 7.7 is intended to in any way relieve any Credit Party of its
obligations to comply with Requirements of Law or applicable obligations with
respect to the release of Credit Agreement Collateral under any Collateral
Document.
Without limiting the generality of the foregoing, the Junior Agent
hereby gives the Senior Agent and any officer and agent thereof the power and
right, on behalf of each Junior Secured Party, without notice to or assent by
any Junior Secured Party, to do, prior to the payment in full of the Senior
Claims, any of the following with respect to the Credit Agreement Collateral, to
the extent such Junior Secured Party would be permitted to do so under the
Collateral Documents:
17
file of any financing or continuation statement under the UCC or
other similar applicable Requirement of Law;
take possession of, and indorse and collect, either in the name
of such Junior Secured Party or its own name, any item that is
required to be turned over to the Senior Agent pursuant to Section 4.2
(Payments Over); and
execute, in connection with any release of any Credit Agreement
Collateral described in Section 7.6 (Releases) for which such Junior
Secured Party is obligated under such Section 7.6 (Releases) to
release or subordinate its Junior Liens, any termination, partial
release, endorsement, assignment, other instrument of conveyance or
transfer, any subordination agreement or any other document with
respect to such Credit Agreement Collateral necessary or appropriate
to effect such release or subordination.
Each Junior Secured Party hereby ratifies all that said attorneys
shall lawfully do or cause to be done by virtue hereof. All powers,
authorizations and agencies contained in this Agreement are coupled with an
interest and are irrevocable until such time as the Secured Claims are
indefeasibly paid and satisfied in full, and thereafter such powers,
authorizations and agencies shall terminate.
Consent of Credit Parties. Each Credit Party hereby consents to the
provisions of this Agreement and the intercreditor arrangements provided for
herein and agrees that the obligations of the Credit Parties under any Senior
Document, Junior Document or other Collateral Document shall not in any way be
diminished or otherwise affected by such provisions or arrangements. All
references to any Credit Party shall include reference to such Credit Party as a
debtor and debtor in possession and any receiver or trustee for such Loan Party
in any Insolvency or Liquidation Proceeding. Each Credit Party hereby agrees
that, if, pursuant to Section 7.11 (Additional Collateral and Guarantees) of the
Credit Agreement, the Company shall be required to cause any Subsidiary that is
not a Credit Party to become a Credit Party, or if for any reason the Company
desires any such Subsidiary to become a Credit Party, such Subsidiary shall
execute and deliver to the Agents an Intercreditor Supplement in substantially
the form of Exhibit B (Intercreditor Supplement) attached hereto and shall
thereafter for all purposes be a party hereto and have the same rights, benefits
and obligations as a Credit Party hereto on the Closing Date.
MISCELLANEOUS
Conflicts. Except as expressly provided herein, in the event of any
conflict between the provisions of this Agreement and the provisions of the
Collateral Documents, the provisions of this Agreement shall govern.
Continuing Nature.
This Agreement is a continuing agreement of lien subordination and the
Senior Secured Parties may continue, at any time and without notice to any
Junior Secured Party, to extend credit and other financial accommodations and
lend monies constituting Senior Claims on the faith hereof, and this Agreement
shall continue to be effective until the payment in full of all Secured Claims
irrespective of, and no right or remedy of any Senior Secured Party under this
Agreement shall be prejudiced or impaired at any time by, any of the following:
(a) any action described in Section 8.3 (Amendments; Waivers), Section 8.4
(Legends) or Section 3.1(b) (Exercise of Remedies), (b) any lack of validity or
enforceability of any Collateral Documents, (c) the commencement of any
Insolvency Proceeding or any other Enforcement Action, (d) any act
18
or failure to act on the part of any Credit Party or Senior Secured Party, (e)
any noncompliance by any Person with the terms, provisions and covenants of this
Agreement or any Collateral Document, regardless of any knowledge thereof that
any Senior Secured Party may have or be otherwise charged with or (f) any other
circumstances that otherwise might constitute a defense available to, or a
discharge of, any Credit Party in respect of any Senior Claims or of any Junior
Secured Party in respect of this Agreement or any Junior Document. The terms of
this Agreement shall survive, and shall continue in full force and effect, in
any Insolvency or Liquidation Proceeding.
All consents, waivers and other provisions set forth herein for the
benefit of the Senior Secured Parties are irrevocable (except in a writing
signed by the Senior Secured Parties as provided in Section 8.3 (Amendments;
Waivers)), and each Junior Secured Party and Loan Party hereby waives any right
under applicable Requirements of Law to revoke any such consent, waiver or other
provision of this Agreement.
Amendments; Waivers.
No amendment, modification or waiver of any provision of this
Agreement shall be deemed to be made unless the same shall be in writing signed
by each Agent and (ii) shall have been approved by the Requisite Lenders (other
than any amendments or modifications requested by any successor Senior Agent not
adversely affecting the Secured Parties) pursuant to Section 11.1 (Amendments,
Waivers, Etc.) of the Credit Agreement. Notwithstanding anything to the
contrary, the consent of any Credit Party shall not be required for amendments,
modifications or waivers of the provisions of this Agreement, except that the
Company's consent shall be required for those that (i) affect any obligation or
right of any Credit Party hereunder or that would impose any additional
obligations on any Credit Party (including such changes under this Section 8.3),
(ii) change the rights of the Credit Parties to make payments in respect of any
Secured Claims (except with respect to proceeds of Credit Agreement Collateral
in an Enforcement Action). In the case of a waiver of any provision of this
Agreement, such waiver shall be effective only with respect to the specific
instance involved and shall in no way impair the rights of the parties making
such waiver or the obligations of the other parties in any other respect or at
any other time. The Agents shall notify the Company of any amendment,
modification or waiver effected hereunder; provided, however, that the failure
of any Agent to deliver such notice shall not render any such amendment,
modification or waiver ineffective.
Without the prior written consent of the Senior Agent, no Junior
Document may be amended, supplemented or otherwise modified or refinanced, and
no new Junior Document may be entered into, in each case if the effect of such
amendment, supplement, modification, refinancing or new Junior Document is to do
any of the following:
change or amend any other term if such change or amendment would
have an adverse effect on the rights and obligations of any Senior
Secured Party or the Senior Agent with respect to the Credit Agreement
Collateral; or
contravene any provision of this Agreement.
19
Legends. Each Junior Document pursuant to which a Lien is granted or
under which rights or remedies with respect to any Lien on the Credit Agreement
Collateral are governed shall include the following language:
NOTWITHSTANDING ANYTHING HEREIN TO THE CONTRARY, CERTAIN LIENS AND SECURITY
INTEREST GRANTED PURSUANT TO THIS AGREEMENT AND THE EXERCISE OF ANY RIGHT
OR REMEDY HEREUNDER ARE SUBJECT TO THE PROVISIONS OF THE INTERCREDITOR
AGREEMENT, DATED AS OF ___________, 2006 (THE "INTERCREDITOR AGREEMENT")
AMONG CITICORP, USA, INC., AS SENIOR AGENT, THE BANK OF NEW YORK TRUST
COMPANY, N.A., AS JUNIOR AGENT AND WCI STEEL ACQUISITION, INC., AND CERTAIN
OF ITS SUBSIDIARIES AS CREDIT PARTIES. IN THE EVENT OF ANY CONFLICT BETWEEN
THE TERMS OF THE INTERCREDITOR AGREEMENT AND THIS AGREEMENT, THE TERMS OF
THE INTERCREDITOR AGREEMENT SHALL GOVERN.
No Duties. The Senior Agent and the Senior Secured Parties shall have
no obligation whatsoever to any Junior Secured Party to ensure that the Credit
Agreement Collateral in their possession or under their control is genuine or
owned by any Credit Party or to preserve the rights or benefits of any Person
except as expressly set forth in this Agreement. None of the Senior Agent or any
Senior Secured Party shall have, by reason of this Agreement, any Collateral
Document or any other document, a fiduciary relationship with any Junior Secured
Party.
Consent to Jurisdiction; Waiver of Trial by Jury.
Any legal action or proceeding with respect to this Agreement or any
other Collateral Document may be brought in the courts of the State of New York
located in the City of New York or of the United States of America for the
Southern District of New York, and, by execution and delivery of this Agreement,
each party hereto hereby accepts for itself and in respect of its property,
generally and unconditionally, the jurisdiction of the aforesaid courts. The
parties hereto hereby irrevocably waive, to the fullest extent permitted by law,
any objection, including any objection to the laying of venue or based on the
grounds of forum non conveniens, that any of them may now or hereafter have to
the bringing of any such action or proceeding in such respective jurisdictions.
Each party hereto hereby irrevocably consents, to the fullest extent
permitted by law, to the service of any and all legal process, summons, notices
and documents in any suit, action or proceeding brought in the United States of
America arising out of or in connection with this Agreement by the mailing (by
registered or certified mail, postage prepaid) or delivering of a copy of such
process to such party at its address specified in Section 8.7 (Notices). Each
party hereto agrees, to the fullest extent permitted by law, that a final
judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law.
Nothing contained in this Section 8.6 shall affect the right of any
Agent or any Secured Party to serve process in any other manner permitted by law
or commence legal proceedings or otherwise proceed against the Company or any
other Credit Party in any other jurisdiction.
EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES TRIAL BY JURY IN ANY
ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT.
20
Notices. Any notice or other communication herein (i) to the Senior
Agent or any Credit Party shall be made in accordance with Section 11.8
(Notices, Etc.) of the Credit Agreement and (ii) to the Junior Agent shall be
sent to ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attn: ▇▇▇▇▇ ▇▇▇▇▇▇.
Governing Law. This Agreement has been delivered and accepted at and
shall be deemed to have been made at New York, New York and shall be
interpreted, and the rights and liabilities of the parties bound hereby
determined, in accordance with the laws of the State of New York.
Specific Performance. The Senior Agent and the Secured Parties may
demand specific performance of this Agreement. The Junior Agent, on behalf of
each Junior Secured Party, hereby irrevocably waive any defense based on the
adequacy of a remedy at law and any other defense which might be asserted to bar
the remedy of specific performance in any action which may be brought by the
Senior Agent or any Senior Secured Party.
Section Titles. The section titles contained in this Agreement are and
shall be without substantive meaning or content of any kind whatsoever and are
not a part of this Agreement.
Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be an original and all of which shall together
constitute one and the same document. Signature pages may be detached from
multiple separate counterparts and attached to a single counterpart so that all
signature pages are attached to the same document.
No Third Party Beneficiaries. This Agreement shall be binding upon,
and the rights and benefits hereof shall inure to the benefit of, the Secured
Parties and each of their respective permitted successors and assigns, and no
other Person shall have or be entitled to assert rights or benefits hereunder
(except the Credit Parties solely with respect to Section 8.2 (b) (Continuing
Nature), as to which Section each Credit Party is an express third party
beneficiary). To the extent applicable, this Agreement shall be binding upon the
Credit Parties and their respective permitted successors and assigns, and each
Credit Party shall cause each of its Subsidiaries, to the extent such Subsidiary
becomes or is required to become a Credit Party, to comply with the terms of
this Agreement.
Further Assurances. Each of the Credit Parties and the Junior Agent,
on behalf of each Junior Secured Party, agrees that each such Person shall, at
the Credit Parties' expense, take such further action and execute and deliver to
the Agents and the Senior Agent, on behalf of each Senior Secured Party, such
additional documents and instruments (in recordable form, if requested), in each
case, as the Senior Agent may reasonably request to effectuate the terms of this
Agreement.
[SIGNATURE PAGES FOLLOW]
21
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first written above.
CITICORP USA, INC.,
as Senior Agent
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
THE BANK OF NEW YORK TRUST COMPANY,
N.A.,
as Junior Agent
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
ACCEPTED AND AGREED this ___ day of
May, 2006
WCI STEEL ACQUISITION, INC.
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
WCI STEEL METALLURGICAL SERVICES
ACQUISITION, INC.
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
WCI STEEL PRODUCTION CONTROL SERVICES
ACQUISITION, INC.
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
YOUNGSTOWN SINTER ACQUISITION COMPANY
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
WCI STEEL SALES ACQUISITION, L.P.
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
================================================================================
INTERCREDITOR AGREEMENT
dated as of
May 1, 2006
among
THE BANK OF NEW YORK TRUST COMPANY, N.A.,
as First Lien Collateral Agent
and
WILMINGTON TRUST COMPANY,
as Second Lien Collateral Agent
and
WCI STEEL, INC.
================================================================================
[SIGNATURE PAGE TO INTERCREDITOR AGREEMENT]
TABLE OF CONTENTS
PAGE
----
ARTICLE I DEFINITIONS.................................................... 2
SECTION 1.01 Certain Defined Terms................................... 2
SECTION 1.02. Other Defined Terms..................................... 2
SECTION 1.03. Terms Generally......................................... 6
ARTICLE II LIEN PRIORITIES............................................... 7
SECTION 2.01. Relative Priorities..................................... 7
SECTION 2.02. Prohibition on Contesting Liens......................... 7
SECTION 2.03. No New Liens............................................ 7
SECTION 2.04. Similar Liens and Agreements............................ 7
ARTICLE III ENFORCEMENT OF RIGHTS; MATTERS RELATING TO COLLATERAL........ 8
SECTION 3.01. Exercise of Rights and Remedies......................... 8
SECTION 3.02. Insurance and Condemnation Awards....................... 9
ARTICLE IV PAYMENTS...................................................... 9
SECTION 4.01. Payment after Default in Insolvency..................... 9
SECTION 4.02. Payment after Default Prior to an Insolvency............ 9
SECTION 4.03. Appointment of Attorney-in-Fact......................... 10
ARTICLE V OTHER AGREEMENTS............................................... 10
SECTION 5.01. Matters Relating to Lien Documents...................... 10
SECTION 5.02. Reinstatement........................................... 10
SECTION 5.03. Further Assurances...................................... 11
ARTICLE VI REPRESENTATIONS AND WARRANTIES................................ 11
SECTION 6.01. Representations and Warranties of Each Party............ 11
SECTION 6.02. Representations and Warranties of Second Collateral
Agent................................................... 11
ARTICLE VII NO RELIANCE; NO LIABILITY; OBLIGATIONS ABSOLUTE.............. 11
SECTION 7.01. No Reliance; Information................................ 11
SECTION 7.02. No Warranties or Liability.............................. 12
SECTION 7.03. Obligations Absolute.................................... 13
ARTICLE VIII MISCELLANEOUS............................................... 14
SECTION 8.01. Notices................................................. 14
-i-
TABLE OF CONTENTS
(continued)
PAGE
----
SECTION 8.02. Conflicts............................................... 14
SECTION 8.03. Effectiveness; Survival................................. 15
SECTION 8.04. Severability............................................ 15
SECTION 8.05. Amendments; Waivers..................................... 15
SECTION 8.06. Applicable Law; Jurisdiction; Consent to Service of
Process................................................. 15
SECTION 8.07. Waiver of Jury Trial.................................... 16
SECTION 8.08. Parties in Interest..................................... 16
SECTION 8.09. Specific Performance.................................... 16
SECTION 8.10. Headings................................................ 16
SECTION 8.11. Counterparts............................................ 17
SECTION 8.12. Provisions to Define Relative Rights.................... 17
SECTION 8.13. Incorporation by Reference.............................. 17
-ii-
INTERCREDITOR AGREEMENT dated as of May 1, 2006 (this "AGREEMENT"), among
THE BANK OF NEW YORK TRUST COMPANY, N.A. ("THE BANK OF NEW York"), as the
Collateral Trustee (the "COLLATERAL TRUSTEE" or the "FIRST LIEN COLLATERAL
AGENT"), WILMINGTON TRUST COMPANY ("WILMINGTON TRUST"), as collateral agent for
the Second Lien Holders (as defined below) (in such capacity, the "SECOND LIEN
COLLATERAL AGENT") and WCI STEEL, INC., a Delaware corporation ("WCI").
PRELIMINARY STATEMENT
Reference is made to (a) the Basic Labor Agreement dated as of May 1, 2006
(the "LABOR AGREEMENT"), between WCI and the United Steel, Paper and Forestry,
Rubber, Manufacturing, Energy, Allied Industrial and Serviceworkers Union,
AFL-CIO, or its successor on behalf of the employees of WCI at its facilities in
Ohio, (b) $100,000,000 of Senior Secured 8% Notes dated as of May 1, 2006 (the
"SECOND LIEN NOTES"), issued by WCI to the holders of the Second Lien Notes (the
"SECOND LIEN HOLDERS"), (c) the Open-End Mortgage, Assignment of Rents, Security
Agreement and Fixture Filing dated as of April 28, 2006 (the "FIRST LIEN
MORTGAGE"), between WCI and the First Lien Collateral Agent (pursuant to and in
accordance with Collateral Trust Agreement, as hereinafter defined), (d) the
Open-End Mortgage, Assignment of Rents, Security Agreement and Fixture Filing,
dated as of April 28, 2006 (the "SECOND LIEN MORTGAGE"), between WCI and the
Second Lien Collateral Agent, (e) the Collateral Trust Agreement dated as of May
1, 2006 (the "COLLATERAL TRUST AGREEMENT"), between WCI and the First Lien
Collateral Agent, and (f) In re WCI Steel, Inc., an Ohio corporation, et al,
Noteholders' Modified Plan of Reorganization under Chapter 11 of the Bankruptcy
Code (initially filed by the Noteholders (as defined therein) on December 23,
2005, December 27, 2005, January 17, 2006, January 25, 2006, March 9, 2006 and
March 24, 2006 and as may be further amended, supplemented or otherwise modified
from time to time) US Bankruptcy Court Northern District of Ohio Eastern
Division, Case No. 05-81439 (Akron) (the "NOTEHOLDERS' MODIFIED Plan").
RECITALS
A. Pursuant to the Labor Agreement, WCI has agreed to pay the Hardship
Contribution for the benefit of the Hardship Beneficiaries, as defined in the
Labor Agreement, upon certain triggering events specified in the Labor
Agreement. Payment of the Hardship Contribution is guaranteed by the Collateral,
including a first priority security interest in the Mortgaged Property (as
defined in the First Lien Mortgage and Second Lien Mortgage) granted by WCI in
favor of the Collateral Trustee.
B. Pursuant to the Noteholders' Modified Plan, the Second Lien Holders
will receive the Second Lien Notes secured by Liens on the Collateral with such
security interest being junior to only the First Priority Liens.
C. The Labor Agreement requires, among other things, that the parties
thereto, set forth in this Agreement, among other things, their respective
rights and remedies with respect to the Collateral.
Accordingly, the parties hereto agree as follows:
DEFINITIONS
Section 1.01 CERTAIN DEFINED TERMS. Capitalized terms used in this
Agreement and not otherwise defined herein shall have the meanings set forth in
the Labor Agreement, the Indenture, the Second Lien Notes, the First Lien
Mortgage or the Second Lien Mortgage, as applicable.
Section 1.02 OTHER DEFINED TERMS. As used in the Agreement, the
following terms shall have the meanings specified below:
"THE BANK OF NEW YORK" shall have the meaning ascribed to such term in
the preamble to this Agreement.
"BANKRUPTCY CODE" shall mean Title 11 of the United States Code
entitled "Bankruptcy," as now and hereinafter in effect, or any successor
statute.
"BANKRUPTCY LAW" shall mean the Bankruptcy Code and any other Federal,
state or foreign bankruptcy, insolvency, receivership or similar law.
"COLLATERAL" shall mean, collectively, the First Lien Collateral and
the Second Lien Collateral.
"COLLATERAL AGENTS" shall mean the First Lien Collateral Agent and the
Second Lien Collateral Agent.
"COLLATERAL TRUST AGREEMENT" shall have the meaning ascribed to such
term in the recitals of this Agreement.
"COLLATERAL TRUSTEE" shall have the meaning ascribed to such term in
the preamble to this Agreement.
"DISCHARGE OF FIRST LIEN OBLIGATIONS" shall mean, subject to Section
5.02, (a) payment in full in cash of the principal of all Indebtedness
outstanding under the First Lien Documents, and (b) payment in full, in cash, of
all other First Lien Obligations that are due and payable or otherwise accrued
and owing at or prior to the time such principal is paid.
"DISCHARGE OF SECOND LIEN OBLIGATIONS" shall mean, subject to Section
5.02, (a) payment in full in cash of the principal of and interest (including
interest accruing during the pendency of any Insolvency or Liquidation
Proceeding, regardless of whether allowed or allowable in such Insolvency or
Liquidation Proceeding) and premium, if any, on all Indebtedness outstanding
under the Second Lien Documents, and (b) payment in full, in cash, of all other
Second Lien Obligations that are due and payable or otherwise accrued and owing
at or prior to the time such principal and interest are paid.
"DISPOSE" shall have a correlative meaning to Disposition.
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"DISPOSITION" shall mean any sale, lease, exchange, transfer or other
disposition.
"FIRST LIEN COLLATERAL" shall mean all "Collateral", as defined in the
First Lien Mortgage, the Collateral Trust Agreement and any other assets of WCI
or any Subsidiary now or at any time hereafter subject to Liens securing any
First Lien Obligations.
"FIRST LIEN COLLATERAL AGENT" shall have the meaning ascribed to such
term in the preamble to this Agreement.
"FIRST LIEN DOCUMENTS" shall mean the Labor Agreement, the First Lien
Mortgage, the Collateral Trust Agreement, this Agreement, and any other
agreement, document or instrument pursuant to which a Lien is granted securing
any First Lien Obligations or under which rights or remedies with respect to any
such Liens are governed.
"FIRST LIEN MORTGAGE" shall have the meaning ascribed to such term in
the preliminary statement of this Agreement.
"FIRST LIEN OBLIGATIONS" shall mean the obligations of WCI to
contribute, guarantee and secure the Hardship Contribution. To the extent any
payment with respect to the First Lien Obligations (whether by or on behalf of
any Grantor, as proceeds of security, enforcement of any right of set-off or
otherwise) is declared to be fraudulent or preferential in any respect, set
aside or required to be paid or turned over to a debtor in possession, trustee,
receiver or similar Person, then the obligation or part thereof originally
intended to be satisfied shall be deemed to be reinstated and outstanding as if
such payment had not occurred.
"FIRST LIEN SECURED PARTIES" shall mean, at any time, (a) the First
Lien Collateral Agent and the successors, replacements and assigns of each of
the foregoing.
"FIRST PRIORITY LIENS" shall mean all Liens on the First Lien
Collateral to secure the First Lien Obligations, whether created under the First
Lien Documents or acquired by possession, statute, operation of law, subrogation
or otherwise.
"FORECLOSURE" shall mean any exercise by or on behalf of the Second
Lien Secured Parties of remedies available under applicable law with respect to
the Collateral upon a default under the Second Lien Obligations, which results
in a transfer of title to, or control or possession of, or a sale, liquidation
or other Disposition of, the Collateral. The term "Foreclosure" shall include,
without limitation, any one or more of the following events, if they occur in
connection with a default under the Second Lien Obligations: (i) a transfer of
any of the Collateral by judicial foreclosure; (ii) a transfer of any of the
Collateral by deed in lieu of foreclosure; (iii) a transfer of any of the
Collateral resulting from an order given in an Insolvency or Liquidation
Proceeding; (iv) if title to the Collateral is held by a tenant under a ground
lease, an assignment of the tenant's interest in such ground lease; or (v) a
transfer through any similar judicial or non-judicial exercise of the remedies
by or on behalf of the Second Lien Secured Parties.
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"GOVERNMENTAL AUTHORITY" shall mean any nation or government, any
state or other political subdivision thereof, any central bank (or similar
monetary or regulatory authority) thereof, any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government, and any corporation or other entity owned or controlled, through
stock or capital ownership or otherwise, by any of the foregoing.
"GRANTORS" shall mean WCI and each Subsidiary that shall have created
or purported to create any First Priority Lien or Second Priority Lien on all or
any part of its assets to secure any First Lien Obligations or any Second Lien
Obligations.
"HARDSHIP CONTRIBUTION" shall have the meaning ascribed to such term
in the Labor Agreement.
"INDEBTEDNESS" shall mean and includes all obligations that constitute
"Indebtedness", under or as defined in the Labor Agreement or the Indenture, as
applicable.
"INDENTURE" means the Indenture dated as of May 1, 2006 for the
issuance of the Second Lien Notes.
"INSOLVENCY OR LIQUIDATION PROCEEDING" shall mean (a) any voluntary or
involuntary case or proceeding under the Bankruptcy Code or any other Bankruptcy
Law with respect to any Grantor, (b) any voluntary or involuntary appointment of
a receiver, trustee, custodian, sequestrator, conservator or similar official
for any Grantor or for a substantial part of the property or assets of any
Grantor, (c) any voluntary or involuntary winding-up or liquidation of any
Grantor, or (d) a general assignment for the benefit of creditors by any
Grantor.
"LABOR AGREEMENT" shall have the meaning ascribed to such term in the
preliminary statement of this Agreement.
"LIEN" shall mean, with respect to any asset, (a) any mortgage, deed
of trust, lien, pledge, encumbrance, claim, assignment, hypothecation, charge or
security interest of any kind or any arrangement to provide priority or
preference or any filing of any financing statement under the UCC or any other
similar notice of lien under any similar notice or recording statute of any
Governmental Authority, including any casement, right-of-way or other
encumbrance on title to real property, in each of the foregoing cases whether
voluntary or imposed by law, and any agreement to give any of the foregoing
(other than operating leases), (b) the interest of a vendor or a lesser under
any conditional sale agreement, capital lease or title retention agreement (or
any financing lease having substantially the same economic effect as any of the
foregoing) relating to such asset and (c) in the case of securities, any
purchase option, call or similar right of a third party with respect to such
securities.
"LIEN DOCUMENTS" shall mean the First Lien Documents and the Second
Lien Documents.
"NOTEHOLDERS' MODIFIED PLAN" shall have the meaning ascribed to such
term in the preliminary statement of this Agreement.
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"OTHER RESERVED PROCEEDS" shall have the meaning ascribed to such term
in SECTION 4.01 of this Agreement.
"RESERVED PROCEEDS" shall have the meaning ascribed to such term in
SECTION 4.01 of this Agreement.
"SECOND LIEN COLLATERAL" shall mean all "Collateral", as defined in
the Second Lien Mortgage, and any other assets of WCI or any Subsidiary now or
at any time hereafter subject to Liens securing any Second Lien Obligations.
"SECOND LIEN COLLATERAL AGENT" shall have the meaning ascribed to such
term in the preamble to this Agreement.
"SECOND LIEN DOCUMENTS" shall mean the Second Lien Notes, the Second
Lien Mortgage, the Indenture, this Agreement, and any other agreement, document
or instrument pursuant to which a Lien is granted to secure any Second Lien
Obligations or under which rights or remedies with respect to any such Liens are
governed.
"SECOND LIEN HOLDERS" shall have the meaning ascribed to such term in
the preliminary statement of this Agreement.
"SECOND LIEN MORTGAGE" shall have the meaning ascribed to such term in
the preliminary statement of this Agreement.
"SECOND LIEN NOTES" shall have the meaning ascribed to such term in
the preliminary statement of this Agreement.
"SECOND LIEN OBLIGATIONS" shall mean the "Obligations", as defined in
the Indenture and/or the Second Lien Notes. To the extent any payment with
respect to the Second Lien Obligations (whether by or on behalf of any Grantor,
as proceeds of security, enforcement of any right of set-off or otherwise) is
declared to be fraudulent or preferential in any respect, set aside or required
to be paid or turned over to a debtor in possession, trustee, receiver or
similar Person, then the obligation or part thereof originally intended to be
satisfied shall be deemed to be reinstated and outstanding as if such payment
had not occurred. "SECOND LIEN OBLIGATIONS" shall include all interest accrued
or accruing (or which would, absent commencement of an Insolvency or Liquidation
Proceeding, accrue) after commencement of an Insolvency or Liquidation
Proceeding in accordance with the rate specified in the relevant Second Lien
Document whether or not the claim for such interest is allowed as a claim in
such Insolvency or Liquidation Proceeding.
"SECOND LIEN SECURED PARTIES" shall mean, at any time, (a) the Second
Lien Holders, (b) the Second Lien Collateral Agent, (c) each other person to
whom any of the Second Lien Obligations (including indemnification obligations)
is owed and (d) the successors, replacements and assigns of each of the
foregoing.
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"SECOND PRIORITY LIENS" shall mean all Liens on the Second Lien
Collateral to secure the Second Lien Obligations, whether created under the
Second Lien Documents or acquired by possession, statute, operation of law,
subrogation or otherwise.
"SECURED PARTIES" shall mean, collectively the First Lien Secured
Parties and the Second Lien Secured Parties.
"SECURITY DOCUMENTS" shall mean the First Lien Mortgage and the Second
Lien Mortgage.
"SUBSIDIARY" shall mean, with respect to any person (herein referred
to as the "PARENT"), any corporation, partnership, association or other business
entity (a) of which securities or other ownership interests representing more
than 50% of the equity or more than 50% of the ordinary voting power or more
than 50% of the general partnership interests are, at the time any determination
is being made, owned, controlled or held, or (b) that is, at the time any
determination is made, otherwise controlled, by the parent or one or more
subsidiaries of the parent or by the parent and one or more subsidiaries of the
parent.
"SUBSIDIARY" shall mean any direct or indirect subsidiary of WCI.
"UNIFORM COMMERCIAL CODE" or "UCC" shall mean the Uniform Commercial
Code (or any similar or equivalent legislation) as in effect from time to time
in any applicable jurisdiction.
"WCI" shall have the meaning ascribed to such term in the preamble to
this Agreement.
"WILMINGTON TRUST" shall have the meaning ascribed to such term in the
preamble to this Agreement.
SECTION 1.03. TERMS GENERALLY. The definitions of terms herein shall
apply equally to 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." The word "will"
shall be construed to have the same meaning and effect as the word "shall".
Unless the context requires otherwise (a) any definition of or reference to any
agreement, instrument or other document herein shall be construed as referring
to such agreement, instrument or other document as from time to time amended,
restated, supplemented or otherwise modified, (b) any reference herein (i) to
any person shall be construed to include such person's successors and assigns
and (ii) to WCI or any other Grantor shall be construed to include WCI or such
Grantor as debtor and debtor-in-possession and any receiver or trustee for WCI
or any other Grantor, as the case may be, in any Insolvency or Liquidation
Proceeding, (c) the words "herein", "hereof" and "hereunder", and words of
similar import, shall be construed to refer to this Agreement in its entirety
and not to any particular provision hereof, (d) all references herein to
Articles or Sections shall be construed to refer to Articles or Sections of this
Agreement and (e) the words "asset" and "property" shall be construed to have
the same meaning and effect
6
and to refer to any and all tangible and intangible assets and properties,
including cash, securities, accounts and contract rights.
LIEN PRIORITIES
SECTION 2.01. RELATIVE PRIORITIES. Notwithstanding the date, manner or
order of grant, attachment or perfection of any Second Priority Lien or any
First Priority Lien, and notwithstanding any provision of the UCC or any other
applicable law or the provisions of any Security Document or any other Lien
Document or any other circumstance whatsoever, the Second Lien Collateral Agent,
for itself and on behalf of the other Second Lien Secured Parties, hereby agrees
that, so long as the Discharge of First Lien Obligations has not occurred, (a)
any First Priority Lien now or hereafter held by or for the benefit of any First
Lien Secured Party shall be senior in right, priority, operation, effect and all
other respects to any and all Second Priority Liens and (b) any Second Priority
Lien now or hereafter held by or for the benefit of any Second Lien Secured
Party shall be junior and subordinate in right, priority, operation, effect and
all other respects to any and all First Priority Liens. The First Priority Liens
shall be and remain senior in right, priority, operation, effect and all other
respects to any Second Priority Liens for all purposes, whether or not any First
Priority Liens are subordinated in any respect to any other Lien securing any
other obligation of WCI, any other Grantor or any other person.
SECTION 2.02. PROHIBITION ON CONTESTING LIENS. Each of the First Lien
Collateral Agent, for itself and on behalf of the other First Lien Secured
Parties, and the Second Lien Collateral Agent, for itself and on behalf of the
other Second Lien Secured Parties, agrees that it will not, and hereby waives
any right to, contest or support any other person in contesting, in any
proceeding (including any Insolvency or Liquidation Proceeding), the perfection,
priority, validity or enforceability of any Second Priority Lien or any First
Priority Lien, as the case may be; provided that nothing in this Agreement shall
be construed to prevent or impair the rights of the First Lien Collateral Agent,
the Second Lien Collateral Agent or any other First Lien Secured Party or any
other Second Lien Secured Party to enforce this Agreement.
SECTION 2.03. NO NEW LIENS. The parties hereto agree that, so long as
the Discharge of First Lien Obligations has not occurred, none of the Grantors
shall, or shall permit any of its Subsidiaries to, (a) grant or permit any
additional Liens on any asset to secure any Second Lien Obligation unless it has
granted, or concurrently therewith grants, a Lien on such asset to secure the
First Lien Obligations or (b) grant or permit any additional Liens on any asset
to secure any First Lien Obligations unless it has granted, or concurrently
therewith grants, a Lien on such asset to secure the Second Lien Obligations, in
each case, with each such Lien to be subject to the provisions of this
Agreement. To the extent that the provisions of the immediately preceding
sentence are not complied with for any reason, without limiting any other right
or remedy available to the First Lien Collateral Agent, the Second Lien
Collateral Agent agrees, for itself and on behalf of the other Second Lien
Secured Parties, that any amounts received by or distributed to any Second Lien
Secured Party pursuant to or as a result of any Lien granted in contravention of
this SECTION 2.03 shall be treated as Reserve Proceeds or Other Reserved
Proceeds, mutatis mutandis under ARTICLE IV hereof.
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SECTION 2.04. SIMILAR LIENS AND AGREEMENTS. The parties hereto
acknowledge and agree that it is their intention that the First Lien Collateral
and the Second Lien Collateral be identical. In furtherance of the foregoing,
the parties hereto agree:
(a) to cooperate in good faith in order to determine, upon any request
by the First Lien Collateral Agent or the Second Lien Collateral Agent, the
specific assets included in the First Lien Collateral and the Second Lien
Collateral, the steps taken to perfect the First Priority Liens and the
Second Priority Liens thereon and the identity of the respective parties
obligated under the First Lien Documents and the Second Lien Documents;
(b) that the documents, agreements and instruments creating or
evidencing the First Lien Collateral and the First Priority Liens shall be
substantially identical in form and substance as the documents, agreements
and instruments creating or evidencing the Second Lien Collateral and the
Second Priority Liens, other than with respect to the first priority and
second priority nature of the Liens created or evidenced thereunder; and
(c) the Second Lien Collateral Agent, for itself and on behalf of the
other Second Lien Secured Parties, agrees that any amounts received by or
distributed to any of the Second Lien Secured Parties pursuant to or as a
result of Second Priority Liens on assets that are not subject to the First
Priority Liens shall be subject to Section 4.01.
ARTICLE III
ENFORCEMENT OF RIGHTS; MATTERS RELATING TO COLLATERAL
SECTION 3.01. EXERCISE OF RIGHTS AND REMEDIES.
(a) Whether or not any Insolvency or Liquidation Proceeding has been
commenced, the First Lien Collateral Agent and the other First Lien Secured
Parties on the one hand and the Second Lien Collateral Agent and the Second Lien
Secured Parties on the other hand shall each have their respective rights to
enforce rights and exercise remedies (including any right of setoff) with
respect to the Collateral (including making determinations regarding the
release, Disposition or restrictions with respect to the Collateral), or to
commence or seek to commence any action or proceeding with respect to such
rights or remedies (including any foreclosure action or proceeding or any
Insolvency or Liquidation Proceeding), in each case, without any consultation
with or the consent of the Second Lien Collateral Agent or any other Second Lien
Secured Party or the First Lien Collateral Agent or any other First Lien Secured
Party, respectively; provided that no such action is, or could reasonably be
expected to be, inconsistent with the terms of this Agreement.
(b) In exercising rights and remedies with respect to the Collateral,
each Collateral Agent and the other Secured Parties may enforce the provisions
of their respective Lien Documents and exercise remedies thereunder, all in such
order and in such manner as they may determine in their sole discretion. Such
exercise and enforcement shall include the rights of an agent appointed by them
to Dispose of Collateral upon foreclosure, to incur expenses in connection with
any such Disposition and to exercise all the rights and remedies of a secured
8
creditor under the Uniform Commercial Code, the Bankruptcy Code or any other
Bankruptcy Law, provided that no such action is, or could reasonably be expected
to be, inconsistent with the terms of this Agreement
(c) Nothing in this Agreement shall prohibit the receipt by the Second
Lien Collateral Agent or any other Second Lien Secured Party of the required
regular payments of principal, premium, interest, fees and other amounts due
under the Second Lien Documents.
(d) The Second Lien Collateral Agent, for itself and on behalf of the
other Second Lien Secured Parties, hereby acknowledges and agrees that no
covenant, agreement or restriction contained in any Second Lien Document (other
than this Agreement) shall be deemed to restrict in any way the rights and
remedies of the First Lien Collateral Agent or the other First Lien Secured
Parties with respect to the Collateral as set forth in this Agreement and the
First Lien Documents.
SECTION 3.02. INSURANCE AND CONDEMNATION AWARDS. To the extent the
Second Lien Collateral Agent receives insurance proceeds or a condemnation award
on account of its interest in the Collateral, it shall administer such funds as
provided for in Section 9 of the Collateral Trust Agreement as if WCI were
administering such funds.
ARTICLE IV
PAYMENTS
SECTION 4.01. PAYMENT AFTER DEFAULT IN INSOLVENCY. If, after an "Event
of Default" under the Indenture, but prior to the Second Lien Collateral Agent
consummating a Foreclosure thereunder, an Insolvency or Liquidation Proceeding
of WCI has occurred, then the Second Lien Collateral Agent shall hold the first
$75,000,000, whether in cash or in-kind (the "Reserved Proceeds") of any
dividend, distribution, payment, or receipt of any other assets in connection
with such Insolvency or Liquidation Proceeding on account of the Second Lien
Mortgage, in trust for the benefit of the First Lien Collateral Agent, until the
earliest to occur of (i) the termination of the WCI/USW Defined Benefit Plan; or
(ii) (A) the effective date of a confirmed plan of reorganization in such
proceeding, or (B) the dismissal of such Insolvency or Liquidation Proceeding;
provided, however, that if the termination of the WCI/USW Defined Benefit Plan
occurs before such termination of insolvency proceedings or pursuant to such
plan of reorganization, then the Second Lien Collateral Agent shall thereupon
pay the Reserved Proceeds to the First Lien Collateral Agent at such time.
SECTION 4.02. PAYMENT AFTER DEFAULT PRIOR TO AN INSOLVENCY. If, after
an "Event of Default" under the Indenture, but prior to an Insolvency or
Liquidation Proceeding of WCI, the Second Lien Collateral Agent consummates one
or more Foreclosures under the Indenture, then
(a) the Second Lien Collateral Agent shall hold the first $75,000,000,
whether in cash or in-kind, of the proceeds of such Foreclosures, in the
aggregate, in trust (the "Other Reserved Proceeds") for the First Lien
Collateral Agent, until the earliest to occur of:
9
(1) (i) one (1) year after the latest such Foreclosure; or
(ii) if an Insolvency or Liquidation Proceeding of WCI is commenced
within such one-year period, (A) the effective date of a confirmed plan of
reorganization in such proceeding or (B) the dismissal of such Insolvency
or Liquidation Proceeding, or
(iii) if proceedings with a view to termination of the WCI/USW Defined
Benefit Plan ("plan termination proceedings") are initiated within such
one-year period, the date of the conclusion of such plan termination
proceedings; or
(2) the termination of the WCI/USW Defined Benefit Plan; and
; provided, however, that if the termination of the WCI/USW Defined Benefit Plan
occurs before the expiration of such one-year period or during or pursuant to
such Insolvency or Liquidation Proceeding or such plan termination proceedings,
as applicable, then the Second Lien Collateral Agent shall thereupon pay such
Other Reserved Proceeds to the First Lien Collateral Agent.
SECTION 4.03. APPOINTMENT OF ATTORNEY-IN-FACT. Until the Discharge of
Second Lien Obligations occurs, the First Lien Collateral Agent, hereby appoints
the Second Lien Collateral Agent, and any officer or agent of the Second Lien
Collateral Agent, with full power of substitution, the attorney-in-fact of each
First Lien Secured Party for the purpose of carrying out the provisions of this
Article IV and taking any action and executing any instrument that the Second
Lien Collateral Agent may deem necessary or advisable to accomplish the purposes
of this Article IV, which appointment is irrevocable and coupled with an
interest.
ARTICLE V
OTHER AGREEMENTS
SECTION 5.01. MATTERS RELATING TO LIEN DOCUMENTS.
(a) The First Lien Documents may be amended, supplemented or otherwise
modified in accordance with their terms, in each case, without the consent of
any Second Lien Secured Party; provided, however, that without the consent of
the Second Lien Collateral Agent, no such amendment, supplement or modification
shall (i) contravene any provision of this Agreement or (ii) result in the
aggregate principal amount of Indebtedness outstanding under the First Lien
Documents (as so amended, supplemented or modified) to exceed $75,000,000.
(b) The Second Lien Documents may be amended, supplemented or
otherwise modified in accordance with their terms, in each case, without the
consent of any First Lien Secured Party; provided, however, that without the
consent of the First Lien Collateral Agent, no such amendment, supplement or
modification shall contravene any provision of this Agreement.
(c) Each of WCI and the Second Lien Collateral Agent agrees that the
Second Lien Notes and the Second Lien Mortgage shall contain the applicable
provisions set forth on Annex I hereto, or similar provisions approved by the
First Lien Collateral Agent.
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SECTION 5.02. REINSTATEMENT. If, in any Insolvency or Liquidation
Proceeding or otherwise, all or part of any payment with respect to the First
Lien Obligations or the Second Lien Obligations previously made shall be
rescinded for any reason whatsoever, then the First Lien Obligations or the
Second Lien Obligations, as the case may be, shall be reinstated to the extent
of the amount so rescinded and, if theretofore terminated, this Agreement shall
be reinstated in full force and effect and such prior termination shall not
diminish, release, discharge, impair or otherwise affect the Lien priorities and
the relative rights and obligations of the First Lien Secured Parties and the
Second Lien Secured Parties provided for herein.
SECTION 5.03. FURTHER ASSURANCES. Each of the First Lien Collateral
Agent, for itself and on behalf of the other First Lien Secured Parties, and the
Second Lien Collateral Agent, for itself and on behalf of the other Second Lien
Secured Parties, and each Grantor party hereto, for itself and on behalf of its
subsidiaries, agrees that it will execute, or will cause to be executed, any and
all further documents, agreements and instruments, and take all such further
actions, as may be required under any applicable law, or which the First Lien
Collateral Agent or the Second Lien Collateral Agent may reasonably request, to
effectuate the terms of this Agreement, including the relative Lien priorities
provided for herein.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
SECTION 6.01. REPRESENTATIONS AND WARRANTIES OF EACH PARTY. Each party
hereto represents and warrants to the other parties hereto as follows:
(a) Such party is duly organized, validly existing and in good
standing under the laws of the jurisdiction of its organization and has all
requisite power and authority to execute and deliver this Agreement and
perform its obligations hereunder.
(b) This Agreement has been duly executed and delivered by such party
and constitutes a legal, valid and binding obligation of such party,
enforceable in accordance with its terms.
(c) The execution, delivery and performance by such party of this
Agreement (i) do not require any consent or approval of, registration or
filing with or any other action by any Governmental Authority and (ii) will
not violate any provision of law, statute, rule or regulation, or of the
certificate or articles of incorporation or other constitutive documents or
by-laws of such party or any order of any governmental authority or any
provision of any indenture, agreement or other instrument binding upon such
party.
SECTION 6.02. REPRESENTATIONS AND WARRANTIES OF SECOND COLLATERAL
AGENT. The Second Lien Collateral Agent represents and warrants to the other
parties hereto that it has been authorized by its respective Secured Parties to
enter into this Agreement.
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ARTICLE VII
NO RELIANCE; NO LIABILITY; OBLIGATIONS ABSOLUTE
SECTION 7.01. NO RELIANCE; INFORMATION.
(a) (i) The Second Lien Collateral Agent, for itself and on behalf of
its Secured Party, acknowledges that its Secured Party has, independently and
without reliance upon the First Lien Collateral Agent and based on such
documents and information as they have deemed appropriate, made their own credit
analysis and decision to enter into the Lien Documents to which they are party
and (ii) its Secured Party will, independently and without reliance upon on the
First Lien Collateral Agent, and based on such documents and information as they
shall from time to time deem appropriate, continue to make their own credit
decision in taking or not taking any action under this Agreement or any other
Loan Document to which they are party.
(b) (i) The First Lien Collateral Agent acknowledges that it has not
relied on the Second Lien Collateral Agent or Second Lien Secured Party in its
decision to enter into the Lien Documents to which it is a party and will
without reliance upon on the Second Lien Collateral Agent continue to make
decision in taking or not taking any action under this Agreement or other
related document to which it is a party.
(c) Except as necessary to comply with their express respective
contractual obligations under the terms and conditions of this Agreement, the
First Lien Collateral Agent and the Second Lien Secured Parties shall have no
duty to disclose to each other, any information relating to WCI or any of the
Subsidiaries, or any other circumstance bearing upon the risk of nonpayment of
any of the Obligations, that is known or becomes known to any of them or any of
their Affiliates. In the event any First Lien Collateral Agent or any Second
Lien Secured Party, in its sole discretion, undertakes at any time or from time
to time to provide any such information it shall be under no obligation (i) to
make, and shall not make or be deemed to have made, any express or implied
representation or warranty, including with respect to the accuracy,
completeness, truthfulness or validity of the information so provided, (ii) to
provide any additional information or to provide any such information on any
subsequent occasion or (iii) to undertake any investigation.
SECTION 7.02. NO WARRANTIES OR LIABILITY.
(a) The First Lien Collateral Agent acknowledges and agrees that,
except for the representations and warranties set forth in Article VI, neither
the Second Lien Collateral Agent nor any other Second Lien Secured Party has
made any express or implied representation or warranty, including with respect
to the execution, validity, legality, completeness, collectibility or
enforceability of any of the Second Lien Documents, the ownership of any
Collateral or the perfection or priority of any Liens thereon. The Second Lien
Collateral Agent, for itself and on behalf of the other Second Lien Secured
Parties, acknowledges and agrees that, except for the representations and
warranties set forth in Article VI, the First Lien Collateral Agent has not made
any express or implied representation or warranty, including with respect to the
execution, validity, legality, completeness, collectibility or enforceability of
any of the First
12
Lien Documents, the ownership of any Collateral or the perfection or priority of
any Liens thereon.
(b) The Second Lien Collateral Agent and the other Second Lien Secured
Parties shall have no express or implied duty to the First Lien Collateral Agent
and the First Lien Collateral Agent shall have no express or implied duty to the
Second Lien Collateral Agent or any other Second Lien Secured Party, to act or
refrain from acting in a manner which allows, or results in, the occurrence or
continuance of a default or an event of default under any First Lien Document
and any Second Lien Document (other than, in each case, this Agreement),
regardless of any knowledge thereof which they may have or be charged with.
(c) The Second Lien Collateral Agent, for itself and on behalf of the
other Second Lien Secured Parties, agrees that the First Lien Collateral Agent
shall have no liability to the Second Lien Collateral Agent or any other Second
Lien Secured Party, and hereby waives any claim against the First Lien
Collateral Agent, arising out of any and all actions which the First Lien
Collateral Agent may take or permit or omit to take with respect to (i) the
First Lien Documents (other than this Agreement), (ii) the collection of the
First Lien Obligations or (iii) the maintenance of, the preservation of, the
foreclosure upon or the Disposition of any Collateral.
(d) The First Lien Collateral Agent agrees that no Second Lien Secured
Party shall have any liability to the First Lien Collateral Agent and hereby
waives any claim against any Second Lien Secured Party, arising out of any and
all actions which the Second Lien Collateral Agent or the other Second Lien
Secured Parties may take or permit or omit to take with respect to (i) the
Second Lien Documents (other than this Agreement), (ii) the collection of the
Second Lien Obligations or (iii) the maintenance of, the preservation of, the
foreclosure upon or the Disposition of any Collateral.
SECTION 7.03. OBLIGATIONS ABSOLUTE. The Lien priorities provided for
herein and the respective rights, interests, agreements and obligations
hereunder of the First Lien Collateral Agent and the Second Lien Collateral
Agent and the Second Lien Secured Party shall remain in full force and effect
irrespective of
(a) any lack of validity or enforceability of any Lien Document;
(b) any change in the time, place or manner of payment of, or in any
other term of, all or any portion of the First Lien Obligations or the
Second Lien Obligations;
(c) any amendment, waiver or other modification, whether by course of
conduct or otherwise, of any Lien Document (other than this Agreement);
(d) the securing of any First Lien Obligations or Second Lien
Obligations with any additional collateral or guarantees, or any exchange,
release, voiding, avoidance or non-perfection of any security interest in
any Collateral or any other collateral or any release of any guarantee
securing any First Lien Obligations or Second Lien Obligations; or
(e) any other circumstances that otherwise might constitute a defense
available to, or a discharge of, WCI or any other Grantor in respect of the
First Lien
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Obligations, the Second Lien Obligations or this Agreement, or any of the
First Lien Secured Parties or any of the Second Lien Secured Parties in
respect of this Agreement.
ARTICLE VIII
MISCELLANEOUS
SECTION 8.01. NOTICES. Notices and other communications provided for
herein shall be in writing and shall be delivered by hand or overnight courier
service, mailed by certified or registered mail or sent by fax, as follows:
If to the Grantor, WCI: WCI Steel, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Chief Financial Officer
Facsimile: ______________
with a copy to: ▇▇▇▇▇▇▇▇▇ Will & ▇▇▇▇▇ LLP
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
If to the First Lien Collateral Agent: The Bank of New York Trust Company, N.A.
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Second Lien Collateral Agent: Wilmington Trust Company
▇▇▇▇▇▇ Square North
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Corporate Trust Administrator
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
All notices and other communications given to any party hereto in
accordance with the provisions of this Agreement shall be deemed to
have been given on the date of receipt if delivered by hand or
overnight courier service or sent by fax or on the date five Business
Days after dispatch by certified or registered mail if mailed, in each
case delivered, sent or mailed (properly addressed) to such party as
provided in this Section 8.01 or in accordance with the latest
unrevoked direction from such party given in accordance with this
Section 8.01. As agreed to among WCI and any Collateral Agent from
time to time, notices and other communications may also be delivered
by e-mail to the e-mail address of a representative of the applicable
person provided from time to time by such person.
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SECTION 8.02. CONFLICTS. In the event of any conflict or inconsistency
between the provisions of this Agreement and the provisions of the other Lien
Documents, the provisions of this Agreement shall control.
SECTION 8.03. EFFECTIVENESS; SURVIVAL. This Agreement shall become
effective when executed and delivered by the parties hereto. All covenants,
agreements, representations and warranties made by any party in this Agreement
shall be considered to have been relied upon by the other parties hereto and
shall survive the execution and delivery of this Agreement. The terms of this
Agreement shall survive, and shall continue in full force and effect, in any
Insolvency or Liquidation Proceeding.
SECTION 8.04. SEVERABILITY. In the event any one or more of the
provisions contained in this Agreement should be held invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions contained herein shall not in any way be affected or
impaired thereby (it being understood that the invalidity of a particular
provision in a particular jurisdiction shall not in and of itself affect the
validity of such provision in any other jurisdiction). The parties shall
endeavor in good-faith negotiations to replace the invalid, illegal or
unenforceable provisions with valid provisions the economic effect of which
comes as close as possible to that of the invalid, illegal or unenforceable
provisions.
SECTION 8.05. AMENDMENTS; WAIVERS.
(a) No failure or delay on the part of any party hereto in exercising
any power or right hereunder shall operate as a waiver thereof, nor shall any
single or partial exercise of any such right or power, or any abandonment or
discontinuance of steps to enforce such a right or power, preclude any other or
further exercise thereof or the exercise of any other right or power. The rights
and remedies of the parties hereto are cumulative and are not exclusive of any
rights or remedies that they would otherwise have. No waiver of any provision of
this Agreement or consent to any departure by any party therefrom shall in any
event be effective unless the same shall be permitted by paragraph (b) of this
Section, and then such waiver or consent shall be effective only in the specific
instance and for the purpose for which given.
(b) Neither this Agreement nor any provision hereof may be waived,
amended or modified except pursuant to an agreement or agreements in writing
entered into by the First Lien Collateral Agent and the Second Lien Collateral
Agent; provided that no such agreement shall amend, modify or otherwise directly
affect the rights or obligations of any Grantor without such person's prior
written consent.
SECTION 8.06. APPLICABLE LAW; JURISDICTION; CONSENT TO SERVICE OF
PROCESS.
(a) This Agreement shall be construed in accordance with and governed
by the laws of the State of New York, except as otherwise required by mandatory
provisions of law and except to the extent that remedies provided by the laws of
any jurisdiction other than New York are governed by the laws of such
jurisdiction.
(b) Each party hereto hereby irrevocably and unconditionally submits,
for itself and its property, to the nonexclusive jurisdiction of any New York
State court or Federal court of the United States of America sitting in New York
City, and any appellate court from any
15
thereof, in any action or proceeding arising out of or relating to this
Agreement, or for recognition or enforcement of any judgment, and each of the
parties hereto hereby irrevocably and unconditionally agrees that all claims in
respect of any such action or proceeding may be heard and determined in such New
York State or, to the extent permitted by law, in such Federal court. Each party
hereto agrees that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment or
in any other manner provided by law. Nothing in this Agreement shall affect any
right that any party hereto may otherwise have to bring any action or proceeding
relating to this Agreement in the courts of any jurisdiction.
(c) Each party hereto hereby irrevocably and unconditionally waives,
to the fullest extent it may legally and effectively do so, any objection which
it may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Agreement in any New York State or
Federal court. Each party hereto hereby irrevocably waives, to the fullest
extent permitted by law, the defense of an inconvenient forum to the maintenance
of such action or proceeding in any such court.
(d) Each party to this Agreement irrevocably consents to service of
process in the manner provided for notices in Section 8.01. Nothing in this
Agreement will affect the right of any party to this Agreement to serve process
in any other manner permitted by law.
SECTION 8.07. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES,
TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A
TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT
OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT. EACH PARTY HERETO (A) CERTIFIES
THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT
AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT, BY,
AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
SECTION 8.08. PARTIES IN INTEREST. This provisions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns, as well as the other First Lien Secured
Parties and Second Lien Secured Parties, all of whom are intended to be bound
by, and to be third party beneficiaries of, this Agreement. No other person
shall have or be entitled to assert rights or benefits hereunder.
SECTION 8.09. SPECIFIC PERFORMANCE. Each Collateral Agent may demand
specific performance of this Agreement and, on behalf of itself and the
respective other Secured Parties, hereby irrevocably waives any defense based on
the adequacy of a remedy at law and any other defense that might be asserted to
bar the remedy of specific performance in any action which may be brought by the
respective Secured Parties.
SECTION 8.010. HEADINGS. Article and Section headings used herein and
the Table of Contents hereto are for convenience of reference only, are not part
of this Agreement
16
and are not to affect the construction of, or to be taken into consideration in
interpreting, this Agreement.
SECTION 8.11. COUNTERPARTS. This Agreement may be executed in
counterparts (and by different parties hereto on different counterparts), each
of which shall constitute an original but all of which when taken together shall
constitute a single contract, and shall become effective as provided in Section
8.03. Delivery of an executed signature page to this Agreement by facsimile
transmission shall be as effective as delivery of a manually signed counterpart
of this Agreement.
SECTION 8.12. PROVISIONS TO DEFINE RELATIVE RIGHTS. The provisions of
this Agreement are and are intended for the purpose of defining the relative
rights of the First Lien Collateral Agent, on the one hand, and the Second Lien
Secured Parties, on the other hand. No creditor of WCI or any Grantor shall have
any rights hereunder. Nothing in this Agreement is intended to or shall impair
the obligations of WCI or any other Grantor arising under the Labor Agreement,
which are absolute and unconditional, to pay the First Lien Obligations and the
Second Lien Obligations as and when the same shall become due and payable in
accordance with their terms.
SECTION 8.13. INCORPORATION BY REFERENCE. In connection with its
execution and action pursuant to its actions hereunder, the First Lien
Collateral Agent is entitled to all rights, privileges, protections, immunities,
benefits and indemnities provided to it under the Collateral Trust Agreement.
[Signature pages follow]
17
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
BANK OF NEW YORK TRUST COMPANY, N.A.,
as First Lien Collateral Agent
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
WILMINGTON TRUST COMPANY, as Second Lien
Collateral Agent
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
WCI STEEL, INC., as Grantor
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
WCI STEEL, INC.
Intercreditor Agreement
ANNEX I
Provision for the Second Lien Mortgage
"REFERENCE IS MADE TO THE INTERCREDITOR AGREEMENT DATED AS OF MAY 1, 2006 (AS
AMENDED, RESTATED, SUPPLEMENTED OR OTHERWISE MODIFIED FROM TIME TO TIME, THE
"INTERCREDITOR AGREEMENT"), BETWEEN THE BANK OF NEW YORK TRUST COMPANY, N.A., AS
FIRST LIEN COLLATERAL AGENT (AS DEFINED THEREIN), AND WILMINGTON TRUST COMPANY,
AS SECOND LIEN COLLATERAL AGENT (AS DEFINED THEREIN). THE INDENTURE TRUSTEE (A)
ACKNOWLEDGES THAT IT HAS RECEIVED A COPY OF THE INTERCREDITOR AGREEMENT, (B)
CONSENTS TO THE SUBORDINATION OF LIENS PROVIDED FOR IN THE INTERCREDITOR
AGREEMENT, (C) AGREES THAT IT WILL BE BOUND BY AND WILL TAKE NO ACTIONS CONTRARY
TO THE PROVISIONS OF THE INTERCREDITOR AGREEMENT AND (D) IS AUTHORIZED TO ENTER
INTO THE INTERCREDITOR AGREEMENT ON BEHALF OF THE NOTEHOLDERS. "
Provision for the First Lien Mortgage
"REFERENCE IS MADE TO THE INTERCREDITOR AGREEMENT DATED AS OF MAY 1, 2006 (AS
AMENDED, RESTATED, SUPPLEMENTED OR OTHERWISE MODIFIED FROM TIME TO TIME, THE
"INTERCREDITOR AGREEMENT"), BETWEEN THE BANK OF NEW YORK TRUST COMPANY, N.A., AS
FIRST LIEN COLLATERAL AGENT (AS DEFINED THEREIN), AND WILMINGTON TRUST COMPANY,
AS SECOND LIEN COLLATERAL AGENT (AS DEFINED THEREIN). NOTWITHSTANDING ANYTHING
HEREIN TO THE CONTRARY, THE LIEN AND SECURITY INTEREST GRANTED TO THE COLLATERAL
AGENT, FOR THE BENEFIT OF THE SECURED PARTIES, PURSUANT TO THIS MORTGAGE AND THE
EXERCISE OF ANY RIGHT OR REMEDY BY THE COLLATERAL AGENT AND THE OTHER SECURED
PARTIES HEREUNDER ARE SUBJECT TO THE PROVISIONS OF THE INTERCREDITOR AGREEMENT.
IN THE EVENT OF ANY CONFLICT OR INCONSISTENCY BETWEEN THE PROVISIONS OF THE
INTERCREDITOR AGREEMENT AND THIS MORTGAGE, THE PROVISIONS OF THE INTERCREDITOR
AGREEMENT SHALL CONTROL."
COLLATERAL ACCESS AGREEMENT
COLLATERAL ACCESS AGREEMENT (the "Agreement"), dated as of May 1,
2006, by and among Citicorp, USA, Inc. as administrative agent (in such capacity
and together with its successors and assigns in such capacity, the
"Administrative Agent") for the Credit Agreement Lenders (as defined below), The
Bank of New York Trust Company, N.A., as trustee under the Collateral Trust
Agreement (in such capacity and together with its successors and assigns in such
capacity, the "Collateral Trustee") and Wilmington Trust Company, as trustee
under the Indenture (in such capacity and together with its successors and
assigns in such capacity, the "Indenture Trustee"). Terms used herein but not
otherwise defined herein shall have the meaning given them in the Credit
Agreement (as defined below).
WITNESSETH:
WHEREAS, pursuant to the Credit Agreement, dated as of May __, 2006
(as the same may be amended, restated, supplemented or otherwise modified from
time to time, the "Credit Agreement"), among WCI Steel Acquisition, Inc. (the
"Company"), the lenders and issuers party thereto and the Administrative Agent,
the lenders and the issuers thereto have severally agreed to make extensions of
credit to the Company upon the terms and subject to the conditions set forth
therein; and
WHEREAS, the Company, as grantor, the other grantors party thereto
from time to time and the Administrative Agent are parties to that certain
Pledge and Security Agreement, dated as of ______ __, 2006 (the "Security
Agreement");
NOW, THEREFORE, in consideration of the premises and the mutual
agreements contained herein, the parties hereto agree as follows:
5. DEFINED TERMS.
"Credit Agreement Collateral" has the meaning given to it in the
Security Agreement.
"Credit Agreement Lenders" means the lenders and Issuers under the
Credit Agreement.
"Indenture Collateral" has the meaning given to it in the Security
Agreement.
"Indenture Collateral Secured Parties" means the Collateral Trustee
and Indenture Trustee.
"Secured Parties" means the Administrative Agent, the Collateral
Trustee and the Indenture Trustee.
6. NOTICES OF DEFAULT, FORECLOSURE ETC.
(i) Each Indenture Collateral Secured Party agrees to use its
reasonable efforts to furnish to the Administrative Agent (at the same time it
is sent to Company or any other Loan Party) a copy of each notice of foreclosure
as such Indenture Collateral Secured Party giving the notice shall send to the
Company or any other Loan Party.
Each Indenture Collateral Secured Party agrees that, not less than 10
days prior to the exercise of any of its foreclosure and collection rights or
remedies with respect to any of its respective Indenture Collateral, it shall
give the Administrative Agent written notice thereof; provided, however, that
20
the failure to give such notice shall not affect the validity of this Agreement
or create a cause of action against the party failing to give such notice or
create any claim or right on behalf of any third party. The receipt of such
notice shall not give the recipient any obligation to cure any default.
7. ACCESS TO PREMISES.
Subject to the provisions in Section 5:
(i) In the event that either of the Indenture Collateral Secured
Parties shall acquire title to, or possession and control of, any of the
Indenture Collateral, whether through foreclosure, deed in lieu, or otherwise,
such Indenture Collateral Secured Party agrees that if an Event of Default (as
defined in the Credit Agreement) has occurred and is continuing and, as a
result, the Administrative Agent undertakes to enforce its rights in the Credit
Agreement Collateral under the Credit Agreement and the Security Agreement, such
Indenture Collateral Secured Party will cooperate with the Administrative Agent
in its efforts to assemble all of the Credit Agreement Collateral located on or
in such Indenture Collateral and will permit the Administrative Agent (at the
sole cost, reasonable expense and liability of the Administrative Agent,
including, without limitation, any current rent payable to lessors of leased
Indenture Collateral used or occupied by the Administrative Agent) to enter any
real property that is Indenture Collateral and use the Indenture Collateral, to
the extent necessary to complete the manufacture of inventory constituting
Credit Agreement Collateral, collect proceeds constituting Credit Agreement
Collateral and repossess, remove, sell or otherwise dispose of Credit Agreement
Collateral within a reasonable time not to exceed 45 days after delivery by such
Indenture Collateral Secured Party of notice to the Administrative Agent that it
has located a bona fide purchaser for all or any portion of the Indenture
Collateral.
(ii) If any injunction or stay is issued (including an automatic stay
due to a bankruptcy proceeding) that prohibits the Administrative Agent from
entering the premises, using the Indenture Collateral or removing the Credit
Agreement Collateral, commencement of the 45-day period described in Section
3(a) above shall be deferred until such injunction or stay is lifted or removed.
Following the expiration of the period described in Section 3(a)
above, the Administrative Agent may, at its option, continue to occupy or use
the Indenture Collateral for up to an additional 15 days; provided, however,
that such continued occupancy or use shall not delay the proposed closing date
for such sale, subject to the purchaser agreeing to allow the Administrative
Agent to continue to occupy or use the Indenture Collateral as aforesaid until
the expiration of such period on terms which shall be mutually and reasonably
acceptable to such purchaser, such Indenture Collateral Secured Party and the
Administrative Agent.
21
8. TERM. This Agreement shall remain in full force and effect until
all of the obligations secured by the Indenture Collateral shall have been paid
in full or all of the obligations secured by the Credit Agreement Collateral
shall have been paid in full and commitments of Credit Agreement Lenders
pursuant to the Credit Agreement shall have been terminated. This Agreement
shall continue to be effective or be reinstated, as the case may be, if at any
time any payment of any of such secured obligations is rescinded or must
otherwise be returned by any Secured Party or Credit Agreement Lender upon the
insolvency, bankruptcy or reorganization of any Loan Party or otherwise, all as
though such payment had not been made. This is a continuing agreement and Credit
Agreement Lenders may continue to extend credit or other financial
accommodations and loan monies to or for the benefit of the Company, on the
faith hereof, under the Credit Agreement or otherwise, without notice to
Indenture Collateral Secured Parties.
9. RESERVATION OF SECURITY INTERESTS AS AGAINST THIRD PARTIES. Nothing
contained in this Agreement is intended to affect or limit in any way the
security interests and/or liens each of the Secured Parties has in or on any or
all of the property and assets of any Loan Party or third party, whether
tangible or intangible, insofar as any Loan Party and third parties are
concerned. The Secured Parties specifically reserve all respective security
interests and/or liens and rights to assert such security interests and/or liens
as against the Loan Parties and third parties.
10. INCONSISTENT PROVISIONS. If any provision of this Agreement shall
be inconsistent with, or contrary to, any provisions in the Indenture, the
Collateral Trust Agreement, the Security Agreement or the Intercreditor
Agreement or any other instrument or agreement delivered in connection with the
transactions contemplated thereby, the applicable provision in this Agreement
shall be controlling and shall supersede such inconsistent provision to the
extent necessary to give full effect to all provisions contained in this
Agreement.
11. SEVERABILITY OF PROVISIONS. Any provision of this Agreement that
is unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such unenforceability, without invalidating the
remaining provisions hereof or affecting the validity or enforceability of such
provision in any other jurisdiction.
12. NOTICES. All notices, requests and demands to or upon the
respective parties hereto to be effective shall be in writing or by telecopy and
shall be deemed to have been duly given or made when delivered by hand, or when
deposited in the mail, postage prepaid, or, in the case of telecopy notice, when
transmitted, transmission confirmed, addressed to the parties hereto at their
respective addresses set forth with their signatures hereto or to such other
address as may be hereafter notified by the respective parties hereto. Each
party hereto further agrees that any notice hereunder may be given on behalf of
such party by legal counsel to such party.
13. NO THIRD PARTY BENEFICIARIES. All undertakings, agreements,
representations and warranties contained in this Agreement are solely for the
benefit of the Secured Parties and there are no other parties (including,
without limitation, the Loan Parties) who are intended to be benefited in any
way by this Agreement. The existence of this Agreement shall not commit or
obligate any Secured Party to make loans or extend credit to the Loan Parties.
14. SUCCESSORS AND ASSIGNS; TRANSFER OF RIGHTS.
(i) This Agreement shall be binding upon and shall inure to the
benefit of each Secured Party and its respective successors and assigns.
22
Each Indenture Collateral Secured Party agrees that if such Secured
Party transfers its rights and interests under the Indenture, the Collateral
Trust Agreement or the Intercreditor Agreement (as applicable), or any portion
thereof, it will, prior to the closing of such transfer, provide the transferee
with a copy of this Agreement and each transferee of any such rights and
interests shall take such rights and interests or part thereof subject to the
provisions of this Agreement and to any notice given or other action taken
hereunder prior to the receipt by the Administrative Agent of notice of such
transfer.
Promptly after the closing of any transfer of any such rights and
interests held by it, each Indenture Collateral Secured Party shall notify the
Administrative Agent of such transfer and the Administrative Agent shall be
entitled to assume conclusively that no Secured Party has transferred any rights
and interests under the Indenture, the Collateral Trust Agreement or the
Intercreditor Agreement Credit Agreement unless and until such notice is
received.
15. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be an original, but all of which shall
constitute but one agreement.
16. WAIVERS AND AMENDMENTS.
(i) Subject to the requirements of this Agreement, each Secured Party
may exchange, sell, release, surrender or otherwise deal with any or all of its
Collateral, all without in any way compromising or affecting this Agreement.
All modifications, amendments and waivers of this Agreement must be in
writing and duly executed by an authorized officer of each party hereto to be
binding and enforceable.
17. GOVERNING LAW. This Agreement shall be governed by the laws of the
State of New York. This Agreement is solely for the benefit of the parties
hereto and their respective successors and assigns.
18. CONSENT TO JURISDICTION. The parties hereto hereby consent to the
exclusive jurisdiction of any State or Federal Court located within New York
County, State of New York, and irrevocably agree that, subject to the Indenture
Collateral Secured Parties' or the Administrative Agent's election, all actions
or proceedings relating to this agreement shall be litigated in such courts.
Each party hereto accepts for and in connection with its properties, generally
and unconditionally, in any such actions or proceedings the exclusive
jurisdiction of the aforesaid courts and waives any defense of forum non
conveniens, and irrevocably agrees to be bound by any judgment rendered thereby
in connection with this Agreement, with any judgment subject to rights of appeal
in the jurisdictions set forth above.
19. JURY TRIAL WAIVER. EACH OF THE PARTIES HERETO WAIVES ANY RIGHT IT
MAY HAVE TO TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED ON, OR ARISING OUT
OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT, OR ANY COURSE OF CONDUCT, COURSE
OF DEALING, VERBAL OR WRITTEN STATEMENT OR ACTION OF ANY PARTY HERETO.
20. AUTHORITY. Each of the parties represents and warrants to all
other parties hereto that the execution, delivery and performance by or on
behalf of such party to this Agreement has been duly authorized by all necessary
action, corporate or otherwise, does not violate any provision of law,
governmental regulation, or any agreement or instrument by which such party is
bound, and requires no governmental or other consent that has not been obtained
and is not in full force and effect.
23
21. HEADINGS. The section headings used in this Agreement are for
convenience of reference only and shall not affect the construction of this
Agreement.
22. SPECIFIC PERFORMANCE. Each of the Administrative Agent and the
Indenture Collateral Secured Parties may demand specific performance of this
Agreement. Each of the Administrative Agent and the Indenture Collateral Secured
Parties hereby irrevocably waives any defense based on the adequacy of a remedy
at law and any other defense which might be asserted to bar the remedy of
specific performance in any action which may be brought by the Indenture
Collateral Secured Parties or the Administrative Agent, respectively.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their proper and duly authorized officers as of the day and
year first above written.
[SIGNATURE PAGES FOLLOW]
24
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their proper and duly authorized officers as of the day and
year first above written.
CITICORP, USA, INC.,
as Administrative Agent
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
ADDRESS FOR NOTICES:
CITICORP USA, INC.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Telecopy no: (▇▇▇) ▇▇▇-▇▇▇▇
E-Mail Address:
▇▇▇▇▇▇▇▇▇▇▇.▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇.▇▇▇
with a copy to:
WEIL, GOTSHAL & ▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
Telecopy no: (▇▇▇) ▇▇▇-▇▇▇▇
E-Mail Address: ▇▇▇▇▇▇▇.▇▇▇▇▇▇▇▇@▇▇▇▇.▇▇▇
[Signature Page to Collateral Access Agreement]
THE BANK OF NEW YORK TRUST COMPANY, N.A.,
as Collateral Trustee
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
ADDRESS FOR NOTICES:
The Bank of New York Trust Company, N.A.
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇
[Signature Page to Collateral Access Agreement]
WILMINGTON TRUST COMPANY,
as Indenture Trustee
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
Address for Notices:
Wilmington Trust Company
▇▇▇▇▇▇ Square North
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Corporate Trust Administrator
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
ACCEPTED AND AGREED as of the day and year first above written
WCI STEEL ACQUISITION, INC.
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
WCI STEEL METALLURGICAL SERVICES
ACQUISITION, INC.
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
WCI STEEL PRODUCTION CONTROL SERVICES
ACQUISITION, INC.
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
YOUNGSTOWN SINTER ACQUISITION COMPANY
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
[Signature Page to Collateral Access Agreement]
WCI STEEL SALES ACQUISITION, L.P.
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
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