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EXHIBIT 4.1
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CREDIT AND SECURITY AGREEMENT
(U.S. $135,000,000)
Dated as of June 28, 2001
among
OLYMPIC STEEL, INC.
as Borrower
OLYMPIC STEEL LAFAYETTE, INC.
OLYMPIC STEEL MINNEAPOLIS, INC.
OLYMPIC STEEL IOWA, INC.
OLY STEEL WELDING, INC.
OLYMPIC STEEL RECEIVABLES L.L.C.
as Subsidiary Guarantors
and
THE LENDERS WHICH ARE SIGNATORIES HERETO
and
NATIONAL CITY COMMERCIAL FINANCE, INC.
as Administrative Agent
and
NATIONAL CITY BANK
as Lead Arranger and Designated Letter of Credit Issuer
CITICORP USA, INC.
as Syndication Agent
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TABLE OF CONTENTS
Section Page
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SECTION 1 DEFINITIONS; ACCOUNTING TERMS; GOVERNANCE PROVISIONS....................................................1
1.1 CERTAIN DEFINED TERMS................................................................................1
1.2 COMPUTATION OF TIME PERIODS..........................................................................1
1.3 ACCOUNTING TERMS; CALCULATIONS.......................................................................1
1.4 CONSTRUCTION OF TERMS GENERALLY......................................................................2
SECTION 2 STATEMENT OF TERMS......................................................................................2
2.1 REVOLVING CREDIT FACILITY............................................................................2
2.2 ADMINISTRATIVE AGENT'S EXERCISE OF PERMITTED DISCRETION TO ESTABLISH RESERVES........................3
2.3 REQUESTS FOR REVOLVING CREDIT LOANS..................................................................4
2.4 FUNDING OF REVOLVING CREDIT LOANS....................................................................5
2.5 TERM B FACILITY.....................................................................................11
2.6 FUNDING OF TERM B LOANS BY TERM B LENDERS...........................................................12
2.7 AFFILIATED FUNDING ON BEHALF OF LENDERS.............................................................12
2.8 FAILURE OF LENDER TO FUND LOANS; PURCHASE PARTICIPATION.............................................13
2.9 REPAYMENTS; PREPAYMENTS; REDUCTION OF COMMITMENTS...................................................15
2.10 RATE CONVERSION AND RATE CONTINUATION..............................................................19
2.11 LETTERS OF CREDIT..................................................................................20
2.12 INTEREST ON LOANS..................................................................................28
2.13 FEES...............................................................................................31
2.14 PAYMENTS AND COMPUTATIONS..........................................................................33
2.15 LIBOR RATE LOANS: UNASCERTAINABLE RATE; ILLEGALITY; INCREASED COSTS................................35
2.16 PRO RATA TREATMENT OF LENDERS......................................................................37
SECTION 3 CONDITIONS OF LENDING..................................................................................37
3.1 CONDITIONS PRECEDENT TO INITIAL LOANS...............................................................37
3.2 CONDITIONS PRECEDENT TO ALL LOANS...................................................................37
SECTION 4 SECURITY INTEREST IN COLLATERAL; COLLATERAL REQUIREMENTS...............................................38
4.1 GRANT OF SECURITY INTEREST..........................................................................38
4.2 REQUIRED GRANT OF REAL PROPERTY LIENS...............................................................39
4.3 PERFECTION..........................................................................................39
4.4 CHANGES AFFECTING PERFECTION........................................................................39
4.5 PROTECTION OF COLLATERAL; REIMBURSEMENT.............................................................40
4.6 FIELD EXAMINATION AND COLLATERAL AUDIT; INSPECTION; VERIFICATION; APPRAISALS........................40
4.7 REPORTING REGARDING ACCOUNTS AND SCHEDULES OF ACCOUNTS..............................................41
4.8 REPORTING REGARDING INVENTORY.......................................................................41
4.9 REPORTING REGARDING ACCOUNTS PAYABLE, FORM OF COLLATERAL REPORTS....................................42
4.10 SPECIAL PROPERTY...................................................................................42
4.11 STATUS OF COLLATERAL...............................................................................42
4.12 REINSTATEMENT......................................................................................42
4.13 ADDITIONAL SECURITY; FURTHER ASSURANCES............................................................43
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4.14 MATERIAL RECOVERY EVENT............................................................................47
4.15 TERMINATION OF SECURITY INTEREST; RELEASE OF COLLATERAL............................................47
SECTION 5 LOCKBOXES AND BLOCKED ACCOUNTS; PROCEEDS OF ACCOUNTS AND INVENTORY; APPLICATION........................48
5.1 LOCKBOXES AND BLOCKED ACCOUNTS; RECEIPT IN TRUST....................................................48
5.2 CASH CONCENTRATION ACCOUNT; SECURITY INTEREST.......................................................50
5.3 APPLICATION OF DEPOSITS IN CASH CONCENTRATION ACCOUNT TO BORROWER'S LOAN ACCOUNT....................50
5.4 APPLICATION OF COLLECTIONS AND REMITTANCES OF NET CASH PROCEEDS OF SUBSIDIARY
GUARANTORS.....................................................................................51
5.5 CREDITING OF COLLECTIONS, REMITTANCES OF NET CASH PROCEEDS AND INTERCOMPANY
PAYMENTS.......................................................................................52
5.6 COSTS OF COLLECTION.................................................................................52
5.7 RETURN OF FUNDS.....................................................................................52
5.8 NOTICE TO ACCOUNT DEBTORS...........................................................................53
SECTION 6 REPRESENTATIONS, WARRANTIES AND COVENANTS RELATING TO COLLATERAL.......................................53
6.1 GENERAL REPRESENTATIONS AS TO COLLATERAL............................................................53
6.2 TITLE TO COLLATERAL; LIENS; TRANSFERS...............................................................54
6.3 LIEN PERFECTION AND PRIORITY........................................................................54
6.4 COVENANTS REGARDING LIEN WAIVERS, LANDLORD, MORTGAGEE, BAILEE AND PROCESSOR
NOTICES AND WAIVERS, WAREHOUSE RECEIPTS........................................................54
6.5 REPRESENTATIONS AND WARRANTIES REGARDING ACCOUNTS...................................................56
6.6 DISPUTES AND CLAIMS REGARDING ACCOUNTS..............................................................56
6.7 DEPOSITORY ACCOUNTS.................................................................................56
6.8 DELIVERY OF INSTRUMENTS AND CHATTEL PAPER...........................................................57
6.9 COMPLIANCE WITH TERMS OF ACCOUNTS; GENERAL INTANGIBLES..............................................57
6.10 NO WAIVERS, EXTENSIONS, AMENDMENTS.................................................................57
6.11 REPRESENTATIONS AND WARRANTIES REGARDING PLEDGED COLLATERAL........................................57
6.12 COVENANTS REGARDING PLEDGED COLLATERAL.............................................................58
6.13 CONTROL ACCOUNTS...................................................................................60
6.14 MAINTENANCE OF INSURANCE WITH RESPECT TO COLLATERAL................................................60
6.15 TRANSFER OF ACCOUNTS FROM OLYMPIC STEEL RECEIVABLES L.L.C..........................................60
SECTION 7 GENERAL REPRESENTATIONS AND WARRANTIES.................................................................60
7.1 EXISTENCE...........................................................................................61
7.2 AUTHORIZATION.......................................................................................61
7.3 ENFORCEABILITY......................................................................................61
7.4 LITIGATION; PROCEEDINGS.............................................................................61
7.5 TAXES...............................................................................................61
7.6 TITLE...............................................................................................62
7.7 CONSENTS; APPROVALS.................................................................................62
7.8 LAWFUL OPERATIONS...................................................................................62
7.9 ENVIRONMENTAL COMPLIANCE............................................................................62
7.10 ENVIRONMENTAL LAWS AND PERMITS.....................................................................63
7.11 ERISA..............................................................................................63
7.12 AGREEMENTS; ADVERSE OBLIGATIONS; LABOR DISPUTES....................................................64
7.13 FINANCIAL STATEMENTS; PROJECTIONS..................................................................64
7.14 INTELLECTUAL PROPERTY..............................................................................65
7.15 STRUCTURE; CAPITALIZATION..........................................................................65
7.16 INSURANCE..........................................................................................66
7.17 VALUE; SOLVENCY....................................................................................66
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7.18 INVESTMENT COMPANY ACT STATUS......................................................................66
7.19 REGULATION U/REGULATION X COMPLIANCE...............................................................66
7.20 FULL DISCLOSURE....................................................................................66
SECTION 8 COVENANTS OF THE BORROWER..............................................................................67
8.1 REPORTING AND NOTICE COVENANTS......................................................................67
8.2 AFFIRMATIVE COVENANTS...............................................................................70
8.3 NEGATIVE COVENANTS..................................................................................74
8.4 FINANCIAL COVENANTS.................................................................................81
SECTION 9 EVENTS OF DEFAULT......................................................................................83
9.1 PAYMENT.............................................................................................83
9.2 REPRESENTATIONS AND WARRANTIES......................................................................83
9.3 REPORTING AND NOTICE PROVISIONS; VIOLATION OF CERTAIN AFFIRMATIVE COVENANTS.........................83
9.4 VIOLATION OF NEGATIVE COVENANTS AND FINANCIAL COVENANTS.............................................84
9.5 CROSS-DEFAULT; CALL ON GUARANTY.....................................................................84
9.6 DESTRUCTION OF COLLATERAL...........................................................................84
9.7 MATERIAL ADVERSE EFFECT; CHANGE OF CONTROL..........................................................84
9.8 TERMINATION OF EXISTENCE............................................................................84
9.9 FAILURE OF ENFORCEABILITY OF THIS AGREEMENT, CREDIT DOCUMENT; SECURITY..............................84
9.10 ERISA..............................................................................................85
9.11 JUDGMENTS..........................................................................................85
9.12 FORFEITURE PROCEEDINGS.............................................................................85
9.13 FINANCIAL IMPAIRMENT...............................................................................85
SECTION 10 REMEDIES..............................................................................................86
10.1 ACCELERATION; TERMINATION..........................................................................86
10.2 AUTOMATIC ACCELERATION AND TERMINATION.............................................................86
10.3 ACCELERATION OF TERM B LOANS.......................................................................86
10.4 GENERAL RIGHTS AND REMEDIES OF ADMINISTRATIVE AGENT AND THE LENDERS................................87
10.5 ADDITIONAL REMEDIES................................................................................87
10.6 SET-OFF............................................................................................90
10.7 ACTIONS IN RESPECT OF THE LETTERS OF CREDIT UPON DEFAULT...........................................90
10.8 LETTER OF CREDIT COLLATERAL ACCOUNT................................................................90
10.9 ACTIONS IN RESPECT OF PLEDGED COLLATERAL UPON DEFAULT..............................................91
10.10 REGISTRATION RIGHTS...............................................................................92
10.11 TERMINATION; EFFECT ON BORROWER OBLIGATIONS.......................................................93
10.12 AUTHORITY TO EXECUTE TRANSFERS....................................................................93
10.13 LIMITED LICENSE TO LIQUIDATE......................................................................94
10.14 EQUALIZATION......................................................................................94
10.15 REMEDIES CUMULATIVE...............................................................................94
10.16 APPOINTMENT OF ATTORNEY-IN-FACT...................................................................94
SECTION 11 SUBSIDIARY GUARANTY...................................................................................95
11.1 GUARANTEED OBLIGATIONS.............................................................................95
11.2 MAXIMUM LIABILITY..................................................................................95
11.3 GUARANTY UNCONDITIONAL.............................................................................96
11.4 DISCHARGE; REINSTATEMENT...........................................................................96
11.5 WAIVER.............................................................................................97
11.6 STAY OF ACCELERATION...............................................................................97
11.7 SUBROGATION AND CONTRIBUTION RIGHTS................................................................97
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SECTION 12 THE ADMINISTRATIVE AGENT AND LEAD ARRANGER............................................................98
12.1 THE ADMINISTRATIVE AGENT...........................................................................98
12.2 LEAD ARRANGER......................................................................................98
12.3 MARKETING FLEXIBILITY..............................................................................99
12.4 NATURE OF APPOINTMENT..............................................................................99
12.5 ADMINISTRATIVE AGENT AS LENDERS; OTHER TRANSACTIONS................................................99
12.6 INSTRUCTIONS FROM LENDERS..........................................................................99
12.7 LENDER'S DILIGENCE................................................................................100
12.8 NO IMPLIED REPRESENTATIONS........................................................................100
12.9 SUB-ADMINISTRATIVE AGENTS.........................................................................100
12.10 ADMINISTRATIVE AGENT'S DILIGENCE.................................................................100
12.11 NOTICE OF DEFAULT................................................................................100
12.12 ADMINISTRATIVE AGENT'S LIABILITY.................................................................100
12.13 ADMINISTRATIVE AGENT'S AND LEAD ARRANGER'S INDEMNITY.............................................101
12.14 RESIGNATION OF ADMINISTRATIVE AGENT..............................................................102
SECTION 13 TRANSFERS AND ASSIGNMENTS............................................................................102
13.1 TRANSFER OF COMMITMENTS...........................................................................102
13.2 SALE OF PARTICIPATIONS............................................................................104
13.3 CHANGE OF LENDING OFFICE; REPLACEMENT OF LENDERS..................................................105
13.4 CONFIDENTIALITY...................................................................................106
SECTION 14 INDEMNITIES..........................................................................................107
14.1 INCREASED COSTS...................................................................................107
14.2 RISK-BASED CAPITAL................................................................................107
14.3 TAXES.............................................................................................108
14.4 LOSSES............................................................................................110
14.5 INDEMNIFICATION FOR REQUESTS......................................................................111
14.6 GENERAL INDEMNITY.................................................................................111
14.7 ENVIRONMENTAL INDEMNITY...........................................................................111
14.8 CERTIFICATE FOR INDEMNIFICATION...................................................................112
14.9 DUTY TO MITIGATE; STANDARD TREATMENT; REIMBURSEMENT LIMITATION PERIOD.............................112
SECTION 15 GENERAL..............................................................................................112
15.1 AMENDMENTS AND WAIVERS............................................................................112
15.2 GENERAL APPOINTMENT AS ATTORNEY-IN-FACT...........................................................114
15.3 CUMULATIVE PROVISIONS.............................................................................115
15.4 EFFECTIVE AGREEMENT; BINDING EFFECT...............................................................115
15.5 COSTS AND EXPENSES................................................................................115
15.6 SURVIVAL OF PROVISIONS............................................................................116
15.7 CAPTIONS..........................................................................................116
15.8 SHARING OF INFORMATION............................................................................116
15.9 INTEREST RATE LIMITATION..........................................................................116
15.10 LIMITATION OF LIABILITY..........................................................................117
15.11 ILLEGALITY.......................................................................................117
15.12 NOTICES..........................................................................................117
15.13 GOVERNING LAW....................................................................................118
15.14 ENTIRE AGREEMENT.................................................................................118
15.15 JURY TRIAL WAIVER................................................................................118
15.16 JURISDICTION.....................................................................................118
15.17 VENUE; INCONVENIENT FORUM........................................................................119
15.18 EXECUTION IN COUNTERPARTS; EXECUTION BY FACSIMILE................................................119
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EXHIBITS AND SCHEDULES
Exhibit A-1 (Form of Revolving Credit Note)
Exhibit A-2 (Form of Term B Note)
Exhibit B-1 (Form of Credit Request)
Exhibit B-2 (Form of Letter of Credit Request)
Exhibit C (Form of Rate Conversion/Continuation Request)
Exhibit D-1 (Form of Stock Pledge - Borrower with respect to Subsidiaries)
Exhibit D-2 (Form of Stock Pledge - Subsidiary with respect to Subsidiaries)
Exhibit E-1 (Form of Collateral Assignment in Patents)
Exhibit E-2 (Form of Collateral Assignment in Trademarks)
Exhibit E-3 (Form of Collateral Assignment in Copyright)
Exhibit F-1 (Form of Mortgage - Ohio)
Exhibit F-2 (Form of Mortgage - Michigan)
Exhibit F-3 (Form of Mortgage - Minnesota)
Exhibit F-4 (Form of Mortgage - Iowa)
Exhibit F-5 (Form of Mortgage - Connecticut)
Exhibit G (Form of Existing Lender Payout)
Exhibit H-1 (Form of Borrowing Base Certificate)
Exhibit H-2 (Form of Inventory Certificate)
Exhibit H-3 (Form of Accounts Payable Certificate)
Exhibit H-4 (Form of Advertising Permission Letter)
Exhibit I (Form of Bank Assignment Agreement)
Exhibit J-1 (Form of Landlord Waiver)
Exhibit J-2 (Form of Bailee Waiver)
Exhibit J-3 (Form of Mortgagee Waiver)
Exhibit J-4 (Form of Consignee Waiver)
Exhibit K-1 (Form of Limited License Agreement - Borrower)
Exhibit K-2 (Form of Limited License Agreement - Third Party)
Exhibit L (Form of Intercompany Note)
Exhibit M (Form of Intercompany Security Agreement)
Exhibit N (Form of Deposit Account Control Letter)
Exhibit O (Form of Assignment of Receivables and Release Agreement)
Exhibit P (Form of Securities Account Control Letter)
Annex I Commitments
Annex II Definitions
Annex III Closing Condition to Initial Loans
Annex IV Inventory Advance Rates
Annex V Disclosure Schedule
Annex VI Priority Term B Collateral
Annex VII Real Estate Potentially Eligibility
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CREDIT AND SECURITY AGREEMENT
U.S. $135,000,000
Dated as of June 28, 2001
OLYMPIC STEEL, INC., an Ohio corporation, as the Borrower,
OLYMPIC STEEL LAFAYETTE, INC., an Ohio corporation, OLYMPIC STEEL MINNEAPOLIS,
INC., a Minnesota corporation, and OLYMPIC STEEL IOWA, INC., an Iowa
corporation, OLY STEEL WELDING, INC., a Michigan corporation, and OLYMPIC STEEL
RECEIVABLES, LLC, a Delaware limited liability company, as Subsidiary
Guarantors, the LENDERS listed on the signature pages of this Agreement,
NATIONAL CITY COMMERCIAL FINANCE, INC., an Ohio corporation, as Administrative
Agent for the Lenders under this Agreement, and NATIONAL CITY BANK, a national
banking association, as Designated Letter of Credit Issuer under this Agreement
and Lead Arranger, hereby agree as follows:
SECTION 1 DEFINITIONS; ACCOUNTING TERMS; GOVERNANCE PROVISIONS.
1.1 CERTAIN DEFINED TERMS.
Certain capitalized terms used in this Agreement and not
otherwise defined in this herein are defined on ANNEX II attached hereto and
incorporated herein by reference.
1.2 COMPUTATION OF TIME PERIODS.
In this Agreement, for the purpose of computing 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".
1.3 ACCOUNTING TERMS; CALCULATIONS.
All accounting and financial terms not specifically defined
herein shall be construed in accordance with GAAP as in effect from time to
time. In all cases, such accounting and financial terms shall be applied on a
basis consistent with those applied in the preparation of consolidated audited
financial statements of the Borrower and its consolidated Subsidiaries for the
fiscal year ending December 31, 2000 (audited by Xxxxxx Xxxxxxxx LLP); PROVIDED,
HOWEVER, (a) that all financial statements shall reflect the Borrower's adoption
of FAS 106 and (b) if any change in GAAP in itself affects the calculation of
any financial covenant in Section 8.4 of this Agreement, the Borrower may by
written notice to the Administrative Agent, or the Administrative Agent may (and
upon request by the Required Lenders shall), by written notice to the Borrower,
require that such covenant thereafter be calculated in accordance with GAAP as
in effect (and applied by the Borrower) immediately before such change in GAAP
occurs. If any such notice is given, the compliance certificates delivered
pursuant to Section 8.1(d) of this Agreement after such change occurs shall be
accompanied by reconciliations of the difference between the calculation set
forth therein and a calculation made in accordance with GAAP as in effect from
time to time after such change occurs. The financial statements to be furnished
to the Lenders pursuant hereto shall be made and prepared in accordance with
GAAP consistently applied throughout the periods involved, except as set forth
in the notes thereto or as otherwise disclosed in writing by the Borrower to the
Administrative Agent and, in each case, consented to by the Administrative
Agent; PROVIDED that, if at any time the computations determining
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compliance with Section 8.4 utilize accounting principles different from those
utilized in the financial statements furnished to the Lenders, such computations
shall set forth in reasonable detail a description of the differences and the
effect thereof on such computations.
1.4 CONSTRUCTION OF TERMS GENERALLY.
The definitions of terms in this Agreement shall apply equally
to the singular and plural forms of the terms defined. Whenever the context
requires, 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 as the word "shall." Unless the context
otherwise requires, (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,
supplemented or otherwise modified (subject to any restriction on such
amendments, supplements or modifications as may be set forth herein), (b) any
reference herein to any Person shall be construed to include such Person's
successors and assigns, (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 any particular provision hereof, (d) all references to
sections, Annexes and Exhibits shall be construed to refer to sections of, and
Annexes and Exhibits to, this Agreement, and (e) unless the context or the
provisions of this Agreement otherwise indicate, the words "assets" and
"property" shall be construed to have the same meaning and effect and to refer
to any and all real property, and tangible and intangible assets and properties,
including cash, securities, accounts and contract rights and interests in any of
the foregoing.
SECTION 2 STATEMENT OF TERMS.
2.1 REVOLVING CREDIT FACILITY.
(a) REVOLVING CREDIT LOANS.
Subject to the terms and conditions set forth in this
Agreement, each Revolving Credit Lender severally agrees to make, from
time to time on and after the Closing Date until the Business Day
immediately preceding the Revolving Credit Termination Date, Loans
denominated in Dollars to or for the account of the Borrower on a
revolving credit basis (each a "Revolving Credit Loan"); PROVIDED,
HOWEVER, that the outstanding principal amount of Revolving Credit
Loans by or on behalf of such Revolving Credit Lender shall not at any
time exceed the lesser of: (x) an amount equal to such Revolving Credit
Lender's Ratable Portion of the Borrowing Base at such time MINUS the
LC Exposure of such Revolving Credit Lender at such time or (y) the
amount of such Revolving Credit Lender's Revolving Credit Commitment in
effect at such time MINUS the LC Exposure of such Revolving Credit
Lender at such time. Within the limits set forth in this Agreement, the
Borrower may borrow, prepay and reborrow Revolving Credit Loans.
(b) REVOLVING CREDIT BORROWINGS.
Each Revolving Credit Borrowing to the Borrower shall
be: (i) if comprised of Alternate Base Rate Loans, in an aggregate
amount of not less than Ten Thousand Dollars ($10,000) and (ii) if
comprised of LIBOR Rate Loans, in an aggregate amount of not less than
Three Million Dollars ($3,000,000) or an integral multiple of One
Million Dollars ($1,000,000) in excess thereof. The Borrower shall be
entitled to have more than one Revolving Credit Borrowing outstanding
at one time; PROVIDED, HOWEVER, that the Borrower shall not be entitled
to request a Revolving Credit Borrowing which,
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together with all outstanding Revolving Credit Borrowings to the
Borrower, would result in the Borrower's having an aggregate of more
than six (6) Revolving Credit Borrowings (treating outstanding
Alternate Base Rate Loans to the Borrower as a single Borrowing for
purposes of determining outstanding Borrowings) outstanding at any one
time.
(c) REVOLVING CREDIT REVOLVING CREDIT NOTES; LOAN
ACCOUNT.
Each Revolving Credit Lender's Revolving Credit Loans
to the Borrower shall be evidenced at all times by a Revolving Credit
Note which shall: (i) be executed and delivered by the Borrower and
payable to the order of such Revolving Credit Lender and (ii) be in a
stated principal amount equal to the Revolving Credit Commitment of
such Revolving Credit Lender and payable in the unpaid principal amount
of the Revolving Credit Loans evidenced thereby, (iii) mature on the
Revolving Credit Termination Date, (iv) bear interest as provided in
this Agreement, (v) be subject to mandatory prepayment as provided in
Section 2.9(b), and (vi) be entitled to the benefits of this Agreement
and the other Loan Documents. Whenever the Borrower obtains a Revolving
Credit Borrowing, each Revolving Credit Lender shall endorse an
appropriate entry in respect of the Revolving Credit Loan of such
Revolving Credit Lender comprising such Borrowing on such Revolving
Credit Lender's Revolving Credit Note or make an appropriate entry in a
loan account (the "Loan Account") maintained in such Revolving Credit
Lender's books and records, or both, to evidence such Revolving Credit
Lender's Revolving Credit Loans comprising part of a Revolving Credit
Borrowing. The Loan Account shall also evidence: (i) accrued interest
on the Revolving Credit Loans of such Revolving Credit Lender to the
Borrower, (ii) all other amounts due to the Revolving Credit Lender in
respect of such Revolving Credit Loans and (iii) all payments thereof
by the Borrower and the Ratable Portion of Collections and Remittances
of Net Cash Proceeds received by such Revolving Credit Lender from the
Administrative Agent for application to such Revolving Credit Loans.
Each entry on such Revolving Credit Lender's Revolving Credit Note,
books and records or Loan Account shall be prima facie evidence of the
data entered. Such entries shall not be a condition to the Borrower's
obligation to pay the Revolving Credit Loans.
(d) FIXED ASSET COMPONENT LOANS.
For purposes of application of Collections hereunder,
mandatory prepayments required under this Agreement and pricing
hereunder, that portion of the Revolving Credit Loans made available by
the Fixed Asset Component of the Borrowing Base (the "Fixed Asset
Component Loans") shall: (x) be deemed to be the first Revolving Credit
Loans funded and the last Revolving Credit Loans paid, EXCEPT to the
extent otherwise specified with respect to (A) mandatory prepayments
from Remittances of Net Cash Net Proceeds as specified in Section
2.9(d) hereof and (B) deemed prepayments required by the monthly
reductions of the Fixed Asset Component as specified in Section
2.9(b)(i) hereof, (y) be deemed to be allocated pro rata among all of
the Revolving Credit Lenders on the basis of the Revolving Credit
Commitments thereof, (z) be treated separately from other Revolving
Credit Loans with respect to the interest thereon
2.2 ADMINISTRATIVE AGENT'S EXERCISE OF PERMITTED DISCRETION TO
ESTABLISH RESERVES.
The Administrative Agent may, but shall not be obligated to,
rely on each Borrowing Base Certificate and any other schedules or reports in
determining the eligibility of Accounts and Inventory. The Borrower, the
Subsidiary Guarantors and the Lenders agree that the Administrative Agent may,
in the good faith exercise of its Permitted Discretion, from time to time: (a)
establish reserves and increase or decrease such reserves against the
eligibility of
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otherwise Eligible Accounts and Eligible Inventory, (b) establish a Reserve
Amount on the Closing Date and from time to time thereafter and increase or
decrease such Reserve Amount against availability under the Borrowing Base
without duplication for reserves established against Eligible Accounts and
Eligible Inventory and so long as no reduction reduces the Reserve Amount lower
than the Reserve Amount established on the Closing Date unless such reduction in
said initial Reserve Amount is consented to by the Lenders in accordance with
Section 15.1 hereof, (c) reduce the advance rates provided for in the definition
"Borrowing Base" or restore such reduced rates of advance to any level up to the
rates stated in the definition of "Borrowing Base", (d) impose additional
restrictions or criteria to the standards of eligibility set forth in the
definition of "Eligible Accounts" and "Eligible Inventory" and (e) determine
whether Accounts and Inventory constitute Eligible Accounts or Eligible
Inventory, as the case may be. The Administrative Agent shall in good faith use
all commercially reasonable efforts to notify the Borrower at least five (5)
Business Days prior to the effectiveness of any actions taken under clauses (a),
(b), (c) and (d) of this Section 2.2, but shall not be liable for any damages
arising out of any failure to so notify the Borrower.
2.3 REQUESTS FOR REVOLVING CREDIT LOANS.
Revolving Credit Loans comprising a Revolving Credit Borrowing
shall be made upon request of the Borrower in accordance with clause (a) below
or upon a request deemed to be made by the Borrower pursuant to clause (b)
below.
(a) CREDIT REQUESTS EXECUTED BY BORROWER.
Requests from the Borrower for Revolving Credit Loans
shall be given by the Borrower to the Administrative Agent not later
than 12:00 noon (local time at the Notice Office of the Administrative
Agent): (i) on the Business Day which is the requested date of a
proposed Revolving Credit Borrowing comprised of Alternate Base Rate
Loans and (ii) on the Business Day which is three (3) Business Days
before the requested date of a proposed Revolving Credit Borrowing
comprised of LIBOR Rate Loans (provided the parties agree that all
Loans advanced on the Closing Date shall be Alternate Base Rate Loans).
Each such request ("Credit Request") shall be a written or telephonic
notice (in the case of a telephonic notice, promptly confirmed in
writing if so requested by the Administrative Agent). Each written
Credit Request or written confirmation thereof shall be substantially
in the form of Exhibit B-1 attached hereto, signed by the Borrower and
transmitted by the Borrower to the Administrative Agent by telecopier.
Each written and telephonic Credit Request and each confirmation
thereof shall specify: (A) the requested date of advance of the Loans
comprising such Borrowing, (B) the aggregate amount of such Loans, (C)
whether such Borrowing is to be comprised of Alternate Base Rate Loans
or LIBOR Rate Loans, and (D) in the case of a proposed Borrowing
comprised of LIBOR Rate Loans, the initial Interest Period for such
LIBOR Rate Loans. Each Credit Request shall be irrevocable and binding
on the Borrower and be subject to the indemnification provisions of
Section 14 of this Agreement. The Administrative Agent may rely on such
telephonic Credit Request to the same extent that the Administrative
Agent may rely on a written Credit Request. The Borrower shall bear all
risks related to the giving of such Credit Request telephonically.
(b) REQUESTS FOR BORROWING DEEMED GIVEN.
The Borrower shall be deemed to have made a request
for a Revolving Credit Borrowing (a "Deemed Credit Request"), which
Deemed Credit Request shall be irrevocable, upon the occurrence of the
following:
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(i) LETTER OF CREDIT DRAWING. As specified in Section
2.11(f) of this Agreement, upon a drawing under a Letter of
Credit, the Borrower (whether directly or, in the case of a
Letter of Credit issued for the account of a Letter of Credit
Obligor that is not the Borrower, the Borrower as guarantor of
the reimbursement obligations of such Letter of Credit Obligor
pursuant to Section 2.11(l) of this Agreement) shall be deemed
to have made a Deemed Credit Request for a Revolving Credit
Borrowing comprised of Alternate Base Rate Loans denominated
in Dollars in an amount equal to the amount necessary to
reimburse the Designated Letter of Credit Issuer for such
drawing, or
(ii) PAYMENT OF INTEREST AND OBLIGATIONS. Upon the
occurrence of any interest, fee or other payment Obligation of
the Borrower hereunder becoming due without payment, the
Borrower shall be deemed to have made a Deemed Credit Request
for a Revolving Credit Borrowing comprised of Alternate Base
Rate Loans in an amount equal to the amount necessary to pay
such interest, fee or payment obligation.
Each Revolving Credit Lender acknowledges and agrees that its
obligation to participate in and make Loans comprising a Revolving
Credit Borrowing pursuant to a Deemed Credit Request is absolute and
unconditional and shall not be affected by any event or circumstance
whatsoever, including the occurrence of any Potential Default or Event
of Default hereunder or the failure of any condition precedent set
forth in Section 3 of this Agreement to be satisfied at the time of the
making of such Deemed Credit Request, and each Loan made by a Revolving
Credit Lender in satisfaction of its obligation shall be made without
any offset, abatement, withholding or reduction whatsoever.
2.4 FUNDING OF REVOLVING CREDIT LOANS.
(a) ADMINISTRATIVE AGENT ELECTION AS TO FUNDING.
Promptly after receipt of a Credit Request or a
Deemed Credit Request, the Administrative Agent shall elect, in its
sole discretion, (i) to require same day funding of such Borrowing by
the Revolving Credit Lenders pursuant to the terms of Section 2.4(b)
hereof or (ii) to cause NCCF to make a Swing Line Settlement Loan
pursuant to the terms of Section 2.4(c) hereof in the amount of the
requested Borrowing and to be settled with the Revolving Credit Lenders
pursuant to Section 2.4(e) hereof; PROVIDED, HOWEVER, that if NCCF
declines, in its sole discretion, to make a Swing Line Settlement Loan
pursuant to Section 2.4(c), the Administrative Agent shall elect to
have the terms of Section 2.4(b) apply to such requested Borrowing.
(b) SAME DAY FUNDING BY REVOLVING CREDIT LENDERS.
In the event the Administrative Agent has elected to
have same day funding of Loans pursuant to this Section 2.4, the
Administrative Agent shall notify each Revolving Credit Lender of such
Credit Request or Deemed Credit Request pursuant to Section 2.2 above
no later than 12:30 p.m. (local time at the Payment Office of the
Administrative Agent) on the date received by telecopy, telephone or
similar form of transmission. In the event of such election, each
Revolving Credit Lender shall, before 3:00 p.m. (local time at the
Payment Office of the Administrative Agent) on the date of each
Revolving Credit Borrowing requested, make available to the
Administrative Agent, in immediately available funds at the account of
the Administrative Agent maintained at the Payment Office of the
Administrative Agent as shall have been notified by the Administrative
Agent to the Revolving Credit Lenders prior to such date, such
Revolving
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Credit Lender's Ratable Portion of the Revolving Credit Loans
comprising such Revolving Credit Borrowing.
(i) DISBURSEMENT OF FUNDS RECEIVED. On the date
specified by the Borrower in the Credit Request for a
Revolving Credit Borrowing, after the Administrative Agent's
receipt of the funds representing a Revolving Credit Lender's
Ratable Portion of such Revolving Credit Borrowing and subject
to the terms of this Agreement and the Borrower's fulfillment
of the conditions set forth in Section 3 of this Agreement
(or, in the case of a Deemed Credit Request, on the earliest
date permitted after such Deemed Credit Request), the
Administrative Agent will make such Revolving Credit Loan of
such Revolving Credit Lender available to the Borrower in
immediately available funds, by wire transfer or intrabank
transfer: (a) to the Operating Account of the Borrower or (B)
to such other account of the Borrower as the Administrative
Agent and the Borrower shall have agreed upon from time to
time; PROVIDED, HOWEVER, that, if the Borrowing shall not
occur on such date because any condition precedent herein
specified shall not have been met, the Administrative Agent
shall return the amounts so received to the respective
Revolving Credit Lender.
(ii) AVAILABILITY OF FUNDS. Unless the Administrative
Agent shall have received notice from a Revolving Credit
Lender prior to the date (or, in the case of Alternate Base
Rate Loans, prior to the time) of any Revolving Credit
Borrowing that such Revolving Credit Lender will not make
available to the Administrative Agent such Revolving Credit
Lender's Ratable Portion of the Revolving Credit Borrowing,
the Administrative Agent may assume that such Revolving Credit
Lender has made its Ratable Portion of such Borrowing
available to the Administrative Agent on the date specified
for such Borrowing in accordance with Section 2.4(b) of this
Agreement. In reliance upon such assumption, the
Administrative Agent may, but shall not be obligated to, make
available to the Borrower on such date, a corresponding
portion of such Borrowing. Any disbursement by the
Administrative Agent in reliance on such assumption shall be
deemed to be a Revolving Credit Loan by such Revolving Credit
Lender.
(c) PERIODIC SETTLEMENT WITH REVOLVING CREDIT LENDERS,
NCCF SWING LINE SETTLEMENT LOANS.
In the event the Administrative Agent elects, in its
sole discretion, to have periodic settlement of Revolving Credit
Borrowings pursuant to Section 2.4(e) below, NCCF shall, subject to the
terms and conditions hereof, on the date requested by the Borrower for
a Revolving Credit Borrowing, make a Revolving Credit Loan to the
Borrower from its own funds and on a nonratable basis pending
settlement with the Revolving Credit Lenders pursuant to Section 2.4(e)
below in the amount of such requested Revolving Credit Borrowing (any
such Revolving Credit Loan made solely by NCCF pursuant to this Section
2.4(c) being referred to as a "Swing Line Settlement Loan"); PROVIDED,
HOWEVER, that the outstanding principal amount of all Swing Line
Settlement Loans advanced by NCCF shall not at any time exceed the
lesser of: (x) Twenty Million Dollars ($20,000,000), (y) an amount
equal to the Borrowing Base of the Borrower at such time MINUS the
aggregate outstanding principal of Revolving Credit Loans (excluding
outstanding Swing Line Settlement Loans) at such time and MINUS the sum
of the aggregate LC Exposure of the Revolving Credit Lenders at such
time or (z) an amount equal to the Total Revolving Credit Commitment of
the Revolving Credit Lenders in effect at such time MINUS the sum of
the outstanding Revolving Credit Loans (excluding outstanding Swing
Line Settlement Loans) and outstanding Permitted Special
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Advances at such time and MINUS the sum of the aggregate LC Exposure of
the Revolving Credit Lenders at such time.
(i) DISBURSEMENT OF NCCF FUNDS. On the date specified
by the Borrower in the Credit Request for a Revolving Credit
Borrowing, NCCF shall, before 2:00 p.m. ((local time at the
Payment Office of the Administrative Agent) on the date
requested by the Borrower for such Revolving Credit Borrowing
(or, in the case of a Deemed Credit Request, on the earliest
date permitted after such Deemed Credit Request), make such
Swing Line Settlement Loan available to the Borrower in
immediately available funds, by wire transfer or intrabank
transfer: (A) to the Operating Account of the Borrower or (B)
such other account of the Borrower as the Administrative Agent
and the Borrower shall have agreed upon from time to time.
(ii) SWING LINE SETTLEMENT LOANS AS REVOLVING CREDIT
LOANS. Each Swing Line Settlement Loan is for all purposes
hereof a Revolving Credit Loan hereunder and shall be subject
to all the terms and conditions applicable to other Revolving
Credit Loans except that all payments thereon shall be payable
to NCCF solely for its own account (and for the account of the
holder of any participation interest with respect to such
Revolving Credit Loan created pursuant to Section 2.4(e)(iii).
In all instances, the Swing Line Settlement Loans pending
settlement with the Revolving Credit Lenders shall consist of
Alternate Base Rate Loans.
(iii) DISBURSEMENT OF NCCF FUNDS. NCCF shall not make
a Swing Line Settlement Loan, if the Administrative Agent has
received written notice from the Required Lenders instructing
the Administrative Agent not to allow the making of a
Settlement Advance on the basis that one or more of the
conditions set forth in Section 3 will not be satisfied on the
date requested by the Borrower for such Borrowing. Absent such
notification, NCCF: (A) shall not otherwise be required to
determine whether the conditions precedent set forth in
Section 3 have been satisfied or whether the requested
Borrowing would exceed the Borrowing Base and Total Revolving
Credit Commitment limitations hereinabove specified prior to
making, in its sole discretion, any Swing Line Settlement Loan
and (B) shall be entitled in all cases, other than that set
forth in the preceding sentence hereof, to have each Revolving
Credit Lender make Revolving Credit Loans in settlement of the
account of such Swing Line Settlement Loans or purchase
participating interests in accordance with Section 2.4(e)
hereof in all such Swing Line Settlement Loans made by NCCF.
(d) PERMITTED SPECIAL ADVANCES BY ADMINISTRATIVE AGENT.
Notwithstanding any provision in this Agreement to
the contrary, the Administrative Agent is hereby authorized by the
Borrower and the Lenders, to the extent the Administrative Agent, in
its sole discretion, deems necessary or desirable to protect or
preserve the interests of the Lenders, to make Permitted Special
Advances from time to time to the Borrower on behalf of the Revolving
Credit Lenders; PROVIDED; HOWEVER, that: (A) the aggregate amount of
such Permitted Special Advances shall not at any time exceed Five
Hundred Thousand Dollars ($500,000), (B) the aggregate amount of such
Permitted Special Advances shall not at any time exceed an amount equal
to the aggregate Revolving Credit Commitments of the Revolving Credit
Lenders MINUS the sum of outstanding Revolving Credit Loans (inclusive
of outstanding Swing Line Settlement Loans) at such time and the
aggregate LC Exposure of the Revolving Lenders at such time, (C) such
Permitted Special Advances shall not remain outstanding for more
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than thirty (30) days in any period of 90 consecutive days, (D) upon
the request of the Administrative Agent, the Permitted Special Advances
shall be subject to periodic settlement between the Administrative
Agent and Revolving Credit Lenders pursuant to Section 2.4(e), (E) the
Required Lenders may at any time revoke the Administrative Agent's
authorization contained in this Section 2.4(d) to make additional
Permitted Special Advances, any such revocation to be in writing and to
become effective prospectively upon the Administrative Agent's receipt
thereof and (F) Permitted Special Advances shall be repayable on demand
or otherwise as required by Section 2.9(b)(iii) hereof, shall be
secured by the Collateral, and shall for all purposes of this Agreement
constitute Revolving Credit Loans and Secured Obligations hereunder
bearing interest at the Default Rate otherwise applicable at the time.
(e) SETTLEMENT OF SWING LINE SETTLEMENT LOANS AND
PERMITTED SPECIAL ADVANCES.
The Administrative Agent and the Revolving Credit
Lenders hereby agree that, except in the case of Revolving Credit Loans
consisting of Swing Line Settlement Loans or Permitted Special Advances
pending settlement as provided in this Section 2.4(e), each Revolving
Credit Lender's funded portion of such Revolving Credit Loans is
intended to be equal at all times to such Revolving Credit Lender's
Ratable Portion of the outstanding Revolving Credit Loans. In order to
facilitate the administration of this Agreement, the Administrative
Agent's election pursuant to Section 2.4(c) above for periodic
settlement of accounts with the Revolving Credit Lenders shall be
settled (each such settlement of accounts hereunder, a "Settlement") as
to the Swing Line Settlement Loans and Permitted Special Advances among
the Revolving Credit Lenders on a periodic basis in accordance with the
following provisions:
(i) SETTLEMENT DATE. The Administrative Agent shall
request such Settlement of accounts of the Revolving Credit
Lenders as to Swing Line Settlement Loans (as well as to such
of the Permitted Special Advances for which settlement is
requested by the Administrative Agent) with the Revolving
Credit Lenders on a basis not less frequently than once during
each five (5) Business Day period, or on a more frequent basis
if so determined by the Administrative Agent: (A) on behalf of
NCCF, with respect to each outstanding Swing Line Settlement
Loan, and (B) for itself, with respect to each Permitted
Special Advance, by notifying the other Revolving Credit
Lenders by telecopy, telephone or other similar form of
transmission, of such requested Settlement, no later than
12:30 p.m. (local time at the Payment Office of the
Administrative Agent) on the date requested for such
Settlement (the "Settlement Date"). Unless otherwise so
notified, the Settlement Date for outstanding Swing Line
Settlement Loans and Permitted Special Advances shall be on
Thursday of each calendar week.
(ii) SETTLEMENT. Each Revolving Credit Lender (other
than NCCF, in the case of Swing Line Settlement Loans and the
Administrative Agent in the case of Permitted Special Advances
for which settlement has been requested) shall make the amount
of such Revolving Credit Lender's Ratable Portion of the
outstanding principal amount of the Swing Line Settlement
Loans and Permitted Special Advances with respect to which
settlement is requested available to the Administrative Agent,
for itself or for the account of NCCF, in immediately
available funds at the account of the Administrative Agent
maintained at the Payment Office as shall have been notified
by the Administrative Agent to the Revolving Credit Lenders
prior to such date, not later than 2:00 p.m. (local time at
the Payment Office of the Administrative Agent), on the
Settlement Date applicable thereto, regardless of whether the
applicable conditions precedent set
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forth in Section 3 have then been satisfied. Such amounts made
available to the Administrative Agent shall be applied against
the amounts of the applicable Swing Line Settlement Loan or
Permitted Special Advance and, together with the portion of
such Swing Line Settlement Loan or Permitted Special Advances
representing NCCF's Ratable Portion thereof, shall constitute
Revolving Credit Loans of such Revolving Credit Lenders.
(iii) PARTICIPATION IN SWING LINE SETTLEMENT LOANS
AND PERMITTED SPECIAL ADVANCES. Notwithstanding the occurrence
of a Potential Default or an Event of Default and regardless
of whether the Administrative Agent has requested a settlement
with respect to a Swing Line Settlement Loan or Permitted
Special Advance, in the event that any Revolving Credit Loan
pursuant to Subsection (i) above cannot be made by the
Revolving Credit Lenders because any of the events
contemplated by Section 9.13 (to the extent within the scope
of clause (c) through (f) of the definition of "Financial
Impairment") hereof shall have occurred with respect to the
Borrower or because one or more of the Revolving Credit
Lenders shall determine that such Revolving Credit Lender is
otherwise legally prohibited from making such a Revolving
Credit Loan, each such Revolving Credit Lender shall
irrevocably and unconditionally purchase and receive from NCCF
or the Administrative Agent, as applicable, without recourse
or warranty, an undivided interest and participation in such
Swing Line Settlement Loan or Permitted Special Advance to the
extent of such Revolving Credit Lender's Ratable Portion
thereof by paying to the Administrative Agent, in immediately
available funds, an amount equal to such Revolving Credit
Lender's Ratable Portion of such Swing Line Settlement Loan or
Permitted Special Advance on the date the Revolving Credit
Loan would have been made pursuant to Section 2.4(e)(i) above.
On such purchase date, each Revolving Credit Lender or each
such Revolving Credit Lender so prohibited, as the case may
be, shall pay to the Administrative Agent, for the benefit of
NCCF or the Administrative Agent, as the case may be, in
Dollars in immediately available funds, at the account of the
Administrative Agent maintained at the Payment Office of the
Administrative Agent not later than the time such Revolving
Credit Lender would have been obligated to fund a Revolving
Credit Loan pursuant to Subsection (i) above, a participation
purchase price in amount equal to such Revolving Credit
Lender's Ratable Portion of the Swing Line Settlement Loan or
Permitted Special Advances being settled. The proceeds of
purchases by the Revolving Credit Lenders or such prohibited
Lender of such participating interests shall be applied
directly by the Administrative Agent to settle with NCCF or
the Administrative Agent with respect to such outstanding
Swing Line Settlement Loan or Permitted Special Advances being
settled. Upon receipt of such purchase price, NCCF or the
Administrative Agent, as applicable, shall, if requested by a
Revolving Credit Lender purchasing a participating interest,
issue a participation certificate, dated the date of NCCF's or
the Administrative Agent's receipt of such proceeds, and
evidencing such Revolving Credit Lender's participating
interest in such Swing Line Settlement Loan or Permitted
Special Advances. If such amount is not in fact made available
to the Administrative Agent by any Revolving Credit Lender,
the Administrative Agent shall be entitled to recover such
amount on demand from such Revolving Credit Lender together
with interest thereon at the Federal Funds Rate for the first
three (3) days from and after such demand and thereafter at
the Interest Rate then applicable to the Alternate Base Rate
Loans. From and after the date, if any, on which a Revolving
Credit Lender purchases an undivided interest and
participation in any Swing Line Settlement Loan or Permitted
Special Advance pursuant to this Section, and subject to
Section 2.14(b) and Sections 5.2 and 5.3, such Revolving
Credit Lender shall be entitled to its Ratable Portion of
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all payments made by or on behalf of the Borrower in respect
of, and all Collections and Remittances of Net Cash Proceeds
received by the Administrative Agent and credited to, such
Swing Line Settlement Loan or Permitted Special Advance.
(iv) DISTRIBUTIONS OF PAYMENTS. If, prior to any
Settlement Date, any payments made by or on behalf of the
Borrower or any Collections, Remittances of Net Cash Proceeds
and Intercompany Payments are received by the Administrative
Agent which, in accordance with the terms of this Agreement,
are to be applied to the reduction of the Revolving Credit
Loans, and no Revolving Credit Loans comprised of Swing Line
Settlement Loans or Permitted Special Advances are then
outstanding as to which such Collections and Remittances of
Net Cash Proceeds can be applied pursuant to Section 5.3, the
Administrative Agent may pay over such amounts to NCCF for
application to NCCF's Ratable Portion of such Revolving Credit
Loans other than Swing Line Settlement Loans and Permitted
Special Advances, unless application would result in an early
prepayment of a LIBOR Borrowing, in which case the
Administrative Agent shall immediately settle with the
Revolving Credit Lenders. As of any Settlement Date, if
payments, Collections, Remittances of Net Cash Proceeds or
Intercompany Payments received since the then immediately
preceding Settlement Date have been applied to NCCF's Ratable
Portion of the Revolving Credit Loans other than Swing Line
Settlement Loans and the Administrative Agent's Permitted
Special Advances, as provided for in the immediately preceding
sentence, then NCCF shall pay to the Administrative Agent, for
the accounts of the Revolving Credit Lenders, to be applied to
the outstanding Revolving Credit Loans of such Revolving
Credit Lenders, an amount such that each Revolving Credit
Lender shall have outstanding after giving effect to such
payments by NCCF, its Ratable Portion of such Revolving Credit
Loans; PROVIDED, HOWEVER, that the Administrative Agent may
net payments due from NCCF pursuant to this sentence against
payments due to NCCF hereunder on the applicable Settlement
Date, and require either NCCF or the other Revolving Credit
Lenders, as applicable, to make only the amount of the payment
due after such netting.
(v) ALLOCATION AND ACCRUAL OF INTEREST. Pursuant to
the Administrative Agent's election for periodic settlement,
the Administrative Agent or NCCF may be advancing and may be
receiving repayments in respect of Revolving Credit Loans
prior to the time the Revolving Credit Lenders actually
advance or are actually repaid Revolving Credit Loans. Each
of: (A) NCCF with respect to Swing Line Settlement Loans, (B)
the Administrative Agent with respect to Permitted Special
Advances, and (C) each Revolving Credit Lender with respect to
the Revolving Credit Loans other than Swing Line Settlement
Loans and Permitted Special Advances, shall be entitled to
interest at the applicable rate or rates payable under this
Agreement accruing on the amount of funds employed by reason
of actual Loans by NCCF, the Administrative Agent or such
Revolving Credit Lender. Funds shall be deemed employed by
NCCF, the Administrative Agent or the Revolving Credit
Lenders, as the case may be, until such time as: (I) in the
case of the Administrative Agent or NCCF, payments are
credited to the Borrower pursuant to Section 2.14 or
Collections,
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Remittances of Net Cash Proceeds and Intercompany Payments are
received by the Administrative Agent by reason of deposit to
the Cash Concentration Account and credited to the Borrower
pursuant to Sections 5.3 and 5.5 of this Agreement or (II) in
the case of a Revolving Credit Lender, funds representing such
Revolving Credit Lender's Ratable Portion of such payment or
Collections, Remittances of Net Cash Proceeds and Intercompany
Payments are received by such Revolving Credit Lender from the
Administrative Agent pursuant to Section 2.14 of this
Agreement.
2.5 TERM B FACILITY.
(a) TERM B LOANS.
Subject to the terms and conditions of this
Agreement, on the Closing Date of this Agreement, each Lender having a
Term B Commitment (each a "Term B Lender") hereunder severally agrees
to make a Loan on a term basis (the "Term B Loan") to the Borrower,
which Term B Loan can be incurred only on the Closing Date and only in
the entire amount of the Term B Commitment specified on Annex I in
respect to such Term B Lender; PROVIDED, HOWEVER, that the outstanding
principal amount of the Term B Loan by each Term B Lender shall not at
any time exceed the Term B Commitment of such Term B Lender. The Term B
Loan of each Term B Lender shall be comprised of a single Term B
Borrowing.
(b) TERM B NOTES.
Each Term B Lender's Term B Loan shall be evidenced
by and repayable in accordance with a Term B Note which shall: (i) be
executed and delivered by the Borrower, payable to the order of such
Term B Lender and (ii) be in a principal amount equal to the amount of
such Term B Lender's Term B Loan and be payable to the order of such
Lender in an amount equal to the unpaid principal amount of such
Lender's Term B Loan evidenced thereby, (iii) mature on the Term B Loan
Maturity Date applicable to the Term B Loan, (iv) bear interest as
provided in this Agreement, (v) be subject to mandatory prepayment as
provided in Section 2.9(d) hereof, and (vi) be entitled to the benefits
of this Agreement and the other Loan Documents. Each Term B Lender
shall endorse an appropriate entry in respect of disbursements and
repayments of the Term B Loans of such Lender comprising such Borrowing
on such Lender's Term B Note with respect to such Term B Loan or make
an appropriate entry in the Loan Account maintained in such Lender's
books and records, or both, to evidence such Lender's Term B Loans to
the Borrower. The Loan Account shall also evidence: (i) accrued
interest on the Term B Loans of such Lender to the Borrower, (ii) all
other amounts due to the Lender in respect of such Term B Loans, and
(iii) all payments made by the Borrower in respect of such Term B Loans
including all interest payments and all PIK Interest added to the
principal amount of the Term B Loan Obligations. Each entry on a
Lender's Term B Note, books and records or Loan Account shall be prima
facie evidence of the data entered. Such entries by a Term B Lender
shall not be a condition to the Borrower's obligation to repay the
Obligations.
(c) NON-AMORTIZATION; MATURITY OF TERM B LOANS.
The Term B Loan of each Term B Lender shall be a
non-amortizing term loan which, subject to mandatory repayment pursuant
to Sections 2.9(d)(i) and 2.9(d)(ii) hereof, shall not be prepaid until
the Term B Loan Maturity Date unless and until all other Secured
Obligations hereunder have been paid in full, the LC Exposure of the
Revolving Credit Lenders hereunder has been terminated or cash
collateralized pursuant to the terms of this Agreement, and the
Commitments of the Lenders and the Designated Letter of Credit Issuer
hereunder have been terminated.
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2.6 FUNDING OF TERM B LOANS BY TERM B LENDERS.
Each Term B Lender shall, before the close of business (local
time at the Payment Office of the Administrative Agent) on the Closing Date
hereof, make available to the Administrative Agent, in immediately available
funds at the account of the Administrative Agent maintained at the Payment
Office of the Administrative Agent as shall have been notified by the
Administrative Agent to the Term B Lenders prior to such date, the amount of
Term B Loans, as the case may be, specified in Annex I in respect of such Term B
Lender.
(a) DISBURSEMENT OF TERM B LOAN FUNDS RECEIVED.
Upon the Administrative Agent's receipt of the funds
representing a Term B Lender's Term B Loan and subject to the terms of
this Agreement and the Borrower's fulfillment of the conditions set
forth in Section 3 of this Agreement, the Administrative Agent will
make such Term B Loan of such Term B Lender available to the Borrower,
in immediately available finds, by wire transfer or intrabank transfer:
(A) to the Operating Account of the Borrower or (B) such other account
of the Borrower as the Administrative Agent and the Borrower shall have
agreed upon from time to time; PROVIDED, HOWEVER, that, if the Term B
Loan shall not occur on such date because any condition precedent
herein specified shall not have been met, the Administrative Agent
shall return the amounts so received to the respective Term B Lender.
(b) AVAILABILITY OF TERM B LOAN FUNDS.
Unless the Administrative Agent shall have received
notice from a Term B Lender on the Closing Date that such Term B Lender
will not make available to the Administrative Agent such Term B
Lender's Term B Loan, the Administrative Agent may assume that such
Term B Lender has made funds for its Term B Loan available to the
Administrative Agent on the Closing Date. In reliance upon such
assumption, the Administrative Agent may, but shall not be obligated
to, make available to the Borrower on such date, funds in the amount of
such Term B Lender's Term B Loan. Any disbursement by the
Administrative Agent in reliance on such assumption shall be deemed to
be the advance by such Term B Lender of its Term B Loan.
2.7 AFFILIATED FUNDING ON BEHALF OF LENDERS.
Notwithstanding anything to the contrary contained herein, all
or any part of a Loan that any Lender (an "Obligated Lender") may be obligated
to fund pursuant to this Agreement may be funded on such Lender's behalf by a
special purpose funding vehicle (an "SPV"); PROVIDED THAT, (a) if any SPV fails
to fund all or any part of such Loan, the Obligated Lender shall be obligated to
fund such Loan pursuant to the terms hereof and (b) in no event shall any such
funding by any SPV increase the costs or expenses for which the Borrower is
liable under this Agreement. The funding of a Loan by an SPV hereunder shall
utilize the Commitment of the Obligated Lender to the same extent, and as if,
such Loan were funded by such Obligated Lender, and for purposes of this
Agreement, such Loan shall be deemed to have been made by such Obligated Lender.
Each party hereto hereby agrees that (i) no SPV shall be liable for any
indemnity or payment under this Agreement for which an Obligated Lender would
otherwise be liable and (ii) the SPV shall act only on behalf of and through the
Obligated Lender and shall have no rights hereunder or otherwise with respect to
the Borrower independent of those of such Obligated Lender hereunder.
Notwithstanding anything to the contrary contained in this Agreement, any SPV
may disclose on a confidential basis any non-public information relating to its
funding of Loans to any rating agency, commercial paper dealer or provider of
any surety or guarantee for such SPV's obligations which has agreed in writing
to be bound by the provisions of Section 13.4 hereof. This Section 2.7 may not
be amended without the prior
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written consent of each Obligated Lender which has notified Borrower and the
Administrative Agent that all or any part of any of its Loans is being funded by
an SPV at the time of such amendment.
2.8 FAILURE OF LENDER TO FUND LOANS; PURCHASE PARTICIPATION.
If any Revolving Credit Lender has not made available to the
Administrative Agent such Revolving Credit Lender's Ratable Portion of any
Revolving Credit Borrowing (pursuant to either Sections 2.4 of this Agreement or
pursuant to Section 2.11(f) hereof in connection with Deemed Credit Requests for
Revolving Credit Loans to pay unpaid reimbursement obligations for Letter of
Credit hereunder), or any Term B Lender has not made available to the
Administrative Agent funds for its Term B Loan pursuant to Section 2.6 of this
Agreement, or any Revolving Credit Lender fails to make available to the
Administrative Agent the amount of such Lender's participation purchase price
payable for its participating interest in the unpaid reimbursement obligations
with respect to Letters of Credit pursuant to Section 2.11(f) hereof, such
Revolving Credit Lender or Term B Lender, as the case may be, shall pay such
amount to the Administrative Agent for application pursuant to this Section
immediately upon demand by the Administrative Agent. To the extent such
Revolving Credit Lender or Term B Lender does not pay such amount to the
Administrative Agent forthwith upon such demand by the Administrative Agent, the
Administrative Agent shall promptly request payment thereof from the Borrower,
and the Borrower shall immediately pay such amount to the Administrative Agent
for application pursuant to this Section. Such Revolving Credit Lender or Term B
Lender, as the case may be, and the Borrower shall be severally liable to pay
interest to the Administrative Agent on such amount for each day from the date
such amount should otherwise have been made available to the Administrative
Agent until the date any such amount is paid to the Administrative Agent by such
Revolving Credit Lender or Term B Lender or the Borrower, as the case may be, at
a per annum rate of interest equal to: (x) if paid by such Revolving Credit
Lender or Term B Lender, as the case may be, the Federal Funds Effective Rate or
(y) if paid by the Borrower, the interest rate applicable to such Revolving
Credit Borrowing or Term B Borrowing.
(a) CONTINUING OBLIGATION OF BORROWER.
Failure of any Revolving Credit Lender or Term B
Lender to fund its Ratable portion of any Borrowing or to pay any
participation purchase price for its participating interest required
hereunder shall not relieve or excuse the performance by the Borrower
of any of the Borrower's duties or obligations hereunder.
(b) PAYMENT CONSTITUTING RATABLE PORTION.
If any such Revolving Credit Lender pays to the
Administrative Agent such Revolving Credit Lender's Ratable Portion of
such Revolving Credit Borrowing or such Revolving Credit Lender's
participation purchase price, as the case may be, or any Term B Lender
pays to the Administrative Agent such Term B Lender's funds for its
Term B Loan, prior to repayment of such amount by the Borrower, the
amount so repaid shall constitute such Revolving Credit Lender's
Ratable Portion of such Revolving Credit Borrowing or participation
purchase price or such Term B Lender's Term B Loan, as the case may be.
In such circumstances, the Borrower shall have no further obligation to
make the payment required by this Section. Such payment shall be
applied as if paid when otherwise required hereunder and shall be
applied as provided in Sections 2.4 and 2.11(f) hereof, as the case may
be.
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(c) TREATMENT OF LENDER FAILING TO FUND.
To the extent any Revolving Credit Lender fails to
make available to the Administrative Agent such Revolving Credit
Lender's Ratable Portion of Revolving Credit Borrowings hereunder or
such Revolving Credit Lender's participation purchase price for its
participating interests in unpaid reimbursement obligation with respect
to Letters of Credit hereunder, or any Term B Lender fails to make
available to the Administrative Agent such Term B Lender's funds for
its Term B Loan hereunder, the Administrative Agent shall not be
obligated to transfer to such Lender any payments made by the Borrower
to the Administrative Agent for the benefit of such Lender until the
Lender has cured its failure. Until the earlier of such Lender's cure
of its failure to fund or the termination of the Commitments, all
amounts repaid to the Administrative Agent by the Borrower which would
otherwise be required to be applied to such Lender's Ratable Portion of
the Revolving Credit Loans, participation purchase price, or Term B
Loan, as the case may be, shall be advanced to the Borrower by the
Administrative Agent on behalf such Lender to cure, in full or in part,
the failure by such Lender to fund, but shall nevertheless be deemed to
have been paid to such Lender in satisfaction of the Obligations to
which such payment would otherwise have been applied. Notwithstanding
anything contained herein to the contrary, no such Lender failing to
fund shall have any voting or consent rights under or with respect to
the Loan Documents or constitute a "Revolving Credit Lender" or "Term B
Lender" (or be included in the calculation of "Required Lenders" or
"Required Term B lenders" hereunder) for any voting or consent rights
under or with respect to any Loan Document. The terms of this Section
2.8(c) shall: (i) remain effective with respect to such defaulting
Lender until such time as the Lender failing to fund shall no longer be
in default of any of its obligations under this Agreement and (ii)
shall not relieve or excuse the performance by the Borrower of any
duties or obligations hereunder.
(d) CONTINUING OBLIGATION OF LENDERS TO FUND.
It is understood that: (i) a Lender shall not be
responsible for any failure by any other Lender to perform its
obligation to make any Loans hereunder or pay any participation
purchase price for its participating interests hereunder, (ii) the
Commitment of a Lender shall not be increased or decreased as a result
of any failure by any other Lender to perform its obligation to make
any Loans or pay such participation purchase price hereunder, (iii)
failure by any Lender to perform its obligation to make any Loans or
pay any participation purchase price hereunder shall not excuse any
other Lender from its obligation to make any Loans hereunder or pay any
participation purchase price for its participating interests hereunder
and (iv) the obligations of each Lender hereunder shall be individual
and several, not joint and several.
(e) EFFECT OF REVOLVING CREDIT LENDER FAILING TO FUND ON
OBLIGATIONS OF DESIGNATED LETTER OF CREDIT ISSUER.
In the circumstance that any Revolving Credit Lender
fails to make available its Ratable Portion of Revolving Credit
Borrowings hereunder or participation purchase price, the Designated
Letter of Credit Issuer shall not be required to issue Letters of
Credit unless the Designated Letter of Credit Issuer has entered into
arrangements with the Borrower satisfactory to the Designated Letter of
Credit Issuer and the Borrower which either: (i) eliminate the
Designated Letter of Credit Issuer's risk with respect to the refunding
of or participation in Letters of Credit by such defaulting Revolving
Credit Lender, including creation of a cash collateral account to
assure payment of such defaulting Revolving Credit Lender's Ratable
Portion of outstanding Letter of Credit Obligations or (ii) provide
that the issuance of Letters of Credit
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hereunder, taking into account the potential failure of such defaulting
Revolving Credit Lender to refund or purchase participating interests
therein, will not cause the Designated Letter of Credit Issuer to incur
aggregate credit exposure hereunder with respect to Revolving Credit
Loans made thereby and Letter of Credit Obligations owing thereto to be
in excess of its Revolving Credit Commitment (the Borrower agreeing not
to incur Revolving Credit Loans and Letter of Credit Obligations
hereunder which would cause such aggregate excess exposure).
2.9 REPAYMENTS; PREPAYMENTS; REDUCTION OF COMMITMENTS.
(a) SCHEDULED REPAYMENTS.
The Borrower shall repay to the Administrative Agent,
in immediately available funds, in Dollars, for the account of the
Revolving Credit Lenders the outstanding principal amount of the
aggregate Revolving Credit Loans on the Revolving Credit Termination
Date; PROVIDED, HOWEVER, Collections, Remittances of Net Cash Proceeds
and Intercompany Payments deposited into the Cash Concentration Account
will be applied to the Revolving Credit Loans and Term B Loans on an
ongoing basis in accordance with Section 5.3 and; PROVIDED, FURTHER
that any outstanding Permitted Special Advances shall be prepaid on or
before the thirtieth (30th) day after the Administrative Agent has
advanced such Permitted Special Advances. Reimbursements of drawings on
Letters of Credit shall be made, in Dollars, in immediately available
funds. The Borrower shall repay to the Administrative Agent for the
account of the Term B Lenders the Term B Loans in accordance with
Section 2.5(c) of this Agreement in Dollars in immediately available
funds on the Term B Loan Maturity Date. In no circumstances shall Term
B Loans be payable out of the proceeds of Revolving Credit Loans.
Reimbursements of drawings on Letters of Credit shall be made, in
Dollars, in immediately available funds.
(b) MANDATORY PREPAYMENT OF REVOLVING CREDIT LOANS AND
PERMITTED SPECIAL ADVANCES.
(i) If on any Business Day, the aggregate Revolving
Credit Loans (including Swing Line Settlement Loans but
excluding Permitted Special Advances) then outstanding exceeds
the lesser of (x) the Borrowing Base MINUS the aggregate LC
Exposure of the Revolving Credit Lenders then existing or (y)
the aggregate Revolving Credit Commitment then applicable
MINUS the aggregate LC Exposure of the Revolving Credit
Lenders then existing, then the Borrower shall on such day
prepay to the Administrative Agent for the ratable account of
the Lenders an aggregate principal amount of such Revolving
Credit Loans (other than the Fixed Asset Component Loans) in
an amount at least equal to such excess.
(ii) If on any Business Day the aggregate amount of
Permitted Special Advances then outstanding exceeds an amount
equal to: (x) an amount equal to (A) the lesser of Five
Hundred Thousand Dollars ($500,000) or (y) an amount equal to
the aggregate Revolving Credit Commitments of the Lenders
MINUS the sum of outstanding Revolving Credit Loans (inclusive
of outstanding Swing Line Settlement Loans) at such time
and the aggregate LC Exposure of the Revolving Credit Lenders
at such time, then the Borrower shall on such day prepay to
the Administrative Agent for the ratable account of the
Lenders (or, to the extent not yet settled with the Revolving
Credit Lenders at such time, for the sole account of the
Administrative Agent) an aggregate principal amount of such
Permitted Special Advances in an amount at least equal to such
excess.
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(iii) If any outstanding Permitted Special Advances
have been outstanding for more than thirty (30) days, then the
Borrower shall on such day prepay to the Administrative Agent
for the ratable account of the Lenders (or, to the extent not
yet settled with the Revolving Credit Lenders at such time,
for the sole account of the Administrative Agent) an aggregate
principal amount of such outstanding Permitted Special
Advances.
(c) MANDATORY APPLICATION OF COLLECTIONS TO FIXED ASSET
COMPONENT LOANS.
If on any Business Day, the aggregate Fixed Asset
Component Loans comprising Revolving Credit Loans outstanding exceeds
the Fixed Asset Component of the Borrowing Base, then, Collections
shall thereafter be deemed to be applied to reduce the outstanding
Fixed Asset Component Loans in an amount equal to such excess.
(d) APPLICATION OF REMITTANCES OF NET CASH PROCEEDS;
MANDATORY PREPAYMENTS.
(i) APPLICATION OF REMITTANCES OF NET CASH PROCEEDS
(OTHER THAN WITH RESPECT TO PRIORITY TERM B COLLATERAL) TO
REVOLVING CREDIT LOANS; RESULTING MANDATORY PREPAYMENTS OF
TERM B LOANS. From and after the Closing Date, (x) 100% of all
Remittances of Net Cash Proceeds (other than Remittances of
Net Cash Proceeds arising from Priority Term B Collateral)
shall be applied to outstanding Revolving Credit Loans in
accordance with Section 5.3 hereof promptly upon receipt and
(y) and the resulting availability shall thereupon be used to
fund mandatory prepayments of Term B Loans outstanding to the
extent specified hereinafter:
(A) with respect to Remittances of Net Cash
Proceeds from the sale of assets, including from the
sale of Real Estate and related M&E at Borrower's Elk
Grove, Illinois facility, from the sale of Borrower's
slitter located at the Bettendorf, Iowa facility, and
from the sale of Special Property, (other than assets
comprising the Fixed Asset Component and other than
Priority Term B Collateral), all of such proceeds
shall be applied to outstanding Revolving Credit
Loans as follows: (A) FIRST, to outstanding Revolving
Credit Loans other than Fixed Asset Component Loans
without permanent reduction of availability therefor
or the Revolving Credit Commitments with respect
thereto, (B) THEN, if any excess remains after such
application has repaid in full the aggregate
outstanding Revolving Credit Loans, to provide cash
collateral for the aggregate LC Exposure and
subsequent Revolving Credit Loans (other than Fixed
Asset Component Loans);
(B) with respect to Remittances of Net Cash
Proceeds from the sale of assets comprising the Fixed
Asset Component, all of such proceeds shall be
applied to outstanding Revolving Credit Loans as
follows: (A) FIRST, to outstanding Revolving Credit
Loans comprised of Fixed Asset Component Loans in
permanent reduction of the availability therefor, (B)
THEN, to the outstanding Revolving Credit Loans other
than Revolving Credit Loans comprised of Fixed Asset
Component Loans without such permanent reduction and
(C) LAST, if any excess remains after such
application has repaid in full the aggregate
outstanding Revolving Credit Loans, to provide cash
collateral for the aggregate LC Exposure and
subsequent Revolving Credit Loans;
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(C) with respect to Remittances of Net Cash
Proceeds from the sale of equity or debt securities
pursuant to any public or private offering:
1) in the event that pro forma average
Excess Availability (calculated as relevant to
the determination on the basis of the 30 day
period before and the ninety day period after
the date of such issuance) is greater than
Thirty Million Dollars ($30,000,000) both before
and after giving effect to such issuance, THEN
(i) fifty percent (50%) of such Remittances of
Net Cash Proceeds shall be applied to
outstanding Revolving Credit Loans not comprised
of Fixed Asset Component Loans and the resulting
availability shall thereupon be used to fund the
Borrower's mandatory prepayment of a like amount
of Term B Loans outstanding in permanent
reduction thereof and (ii) the remaining
Remittances of Net Cash Proceeds from such
issuance shall be applied pro rata based on
outstandings to the outstanding Revolving Credit
Loans comprised of Fixed Asset Component Loans
in permanent reduction of the availability
therefor and to the outstanding Revolving Credit
Loans not comprised of Fixed Asset Component
Loans without such permanent reduction;
2) in the event that pro forma average
Excess Availability (calculated as relevant to
the determination on the basis of the 30 day
period before and the ninety day period after
the date of such issuance) is less than Thirty
Million Dollars ($30,000,000) before giving
effect to such issuance, THEN: (i) that portion
of such Remittances of Net Cash Proceeds equal
to the amount by which pro forma Excess
Availability is less than Thirty Million Dollars
($30,000,000) shall be applied to the
outstanding Revolving Credit Loans not comprised
of Fixed Asset Component Loans (ii) fifty
percent (50%) of the remainder of such
Remittances of Net Cash Proceeds shall be
applied to outstanding Revolving Credit Loans
not comprised of Fixed Asset Component Loans
without permanent reduction of the availability
therefor and the resulting additional
availability shall thereupon be used to fund the
Borrower's mandatory prepayment of a like amount
of Term B Loans outstanding in permanent
reduction thereof and (iii) 50% of the remainder
of such Remittances of Net Cash Proceeds shall
be applied pro rata to outstanding Revolving
Credit Loans comprised of Fixed Asset Component
Loans in permanent reduction of the availability
therefor and to the outstanding Revolving Credit
Loans not comprised of Fixed Asset Component
Loans without such reduction;
(D) with respect to Remittances of Net Cash
Proceeds from Material Recovery Events (other than
with respect to Priority Term B Collateral) and
subject to Section 4.14 hereof: (A) first, to
outstanding Revolving Credit Loans comprised of Fixed
Asset Component Loans in permanent reduction of the
availability therefor, (B) THEN, to the outstanding
Revolving Credit Loans not comprised of Fixed Asset
Component Loans without such reduction and (C) LAST,
if any excess remains after repayment in full of the
aggregate outstanding Revolving Credit Loans, to
provide cash collateral for the aggregate LC Exposure
and subsequent Revolving Credit Loans;
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PROVIDED, HOWEVER, that nothing in this Section
2.9(d)(i) or in the definition of "Remittances of Net
Cash Proceeds" shall constitute authorization not
otherwise permitted by this Agreement for the
Borrower to enter into any transaction that would
generate Remittances of Net Cash Proceeds.
(ii) APPLICATION OF REMITTANCES OF NET CASH
PROCEEDS OF PRIORITY TERM B COLLATERAL TO TERM B
LOANS. From and after the Closing Date, the Borrower
shall apply all Remittances of Net Cash Proceeds
arising from the sale of or Material Recovery Event
with respect to Priority Term B Collateral: (x) with
respect to Priority Term B Collateral consisting of
Real Estate, (I) FIRST, in accordance with Section
5.3 hereof, directly to Term B Loans outstanding in
permanent reduction thereof and (II) THEN, if there
is any remaining Remittances of Net Cash Proceeds
after repayment in full of the aggregate outstanding
Term B Loans, such remaining proceeds for application
by the Borrower pursuant to Section 5.1(c) to
Revolving Credit Loans and (y) with respect to
Priority Term B Collateral consisting of M&E, be
applied (I) FIRST, in accordance with Section 5.3
hereof directly to Term B Loans outstanding in
permanent reduction thereof and (II) THEN, if any
excess remains after repayment in full of the
aggregate outstanding Term B Loans, pro rata to
outstanding Revolving Credit Loans comprised of Fixed
Asset Component Loans in permanent reduction of the
availability therefor and to the outstanding
Revolving Credit Loans not comprised of Fixed Asset
Component Loans without permanent reduction thereof;
provided, HOWEVER, that nothing in this Section
2.9(d)(ii) or in the definition of "Remittances of
Net Cash Proceeds" shall constitute authorization not
otherwise permitted by this Agreement for the
Borrower to enter into any transaction that would
generate Remittances of Net Cash Proceeds from
Priority Term B Collateral.
(iii) POSTPONEMENT OF PREPAYMENT; EFFECT OF
PREPAYMENT. If no Event of Default has occurred which
has not been waived in accordance with Section 15.1
hereof and the making of any prepayment of Revolving
Credit Loans or Term B Loans required by this Section
2.9(d) would result in an obligation on the part of
the Borrower to make a breakage payment in respect
thereof under Section 14.4 of this Agreement, the
Borrower may, upon notice to the Administrative
Agent, postpone making such prepayment for a period
of up to 30 days or such shorter period as will
result in no such breakage payment being payable.
Each prepayment required by this Section: (x) in the
case of any prepayment of Term B Loans, shall be a
permanent reduction thereof and the amount of such
Term B Loans prepaid shall not be borrowed or
reborrowed (y) in the case of any prepayment of
Revolving Credit Loans comprised of Fixed Asset
Component Loans, shall be a permanent reduction in
the availability therefor and the amount of such
Fixed Asset Component Loans prepaid shall not be
borrowed or reborrowed and (z) in the case of any
prepayment of Revolving Credit Loans other than Fixed
Asset Component Loans, shall constitute only a
prepayment and shall not be a permanent reduction in
the amount of the Revolving Credit Commitments of the
Revolving Credit Lenders hereunder.
(e) REDUCTION OF REVOLVING CREDIT COMMITMENT.
Upon five (5) Business Days prior written notice from
the Borrower to the Administrative Agent, the Borrower may permanently
reduce, in whole or in part, the aggregate Revolving Credit
Commitments, whereupon the aggregate Revolving Credit Commitments shall
be so reduced. Each reduction shall be subject to the following: (i)
each such reduction shall be in an aggregate principal amount of not
less than Five
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Million Dollars ($5,000,000) or a multiple of One Million Dollars
($1,000,000) in excess thereof, and (ii) the Borrower shall not be
permitted to reduce the aggregate Revolving Credit Commitments unless,
concurrently with any reduction, the Borrower shall make a principal
payment on each Lender's then outstanding Revolving Credit Loans in an
amount equal to the excess, if any, of such Revolving Credit Loans over
the Revolving Credit Commitment of such Lender as so reduced. Each
reduction in the Revolving Credit Commitments hereunder shall be made
among the Lenders ratably in accordance with their Revolving Credit
Commitments and shall be a permanent reduction thereof. On the date of
each reduction, the Borrower shall pay to the Administrative Agent for
the account of the Lenders: (x) the commitment fees and interest
accrued through the date of such reduction in respect of the portion of
the aggregate Revolving Credit Commitments so reduced and (y) any
amounts required pursuant to the provisions of Section 14.4 of this
Agreement in respect of such reduced portion of the Revolving Credit
Commitments.
2.10 RATE CONVERSION AND RATE CONTINUATION.
The Borrower shall have the right to convert or continue all
or a portion of the Loans comprising a Borrowing into, or continue all or any
portion of the Loans comprising a Borrowing as, LIBOR Rate Loans or Alternate
Base Rate Loans, as the case may be, upon request delivered by the Borrower to
the Administrative Agent not later than 11:00 a.m. (local time at the Notice
office of the Administrative Agent) as follows: (a) on the Business Day that the
Borrower desires to convert all or a portion of the LIBOR Rate Loans comprising
a Revolving Credit Borrowing into Alternate Base Rate Loans, (b) three Business
Days prior to the Business Day on which the Borrower desires to convert any
Alternate Base Rate Loans comprising such Borrowing into LIBOR Rate Loans for a
given permissible Interest Period, (c) three Business Days prior to the Business
Day on which the Borrower desires to continue any LIBOR Rate Loans comprising
such a Borrowing as LIBOR Rate Loans for an additional Interest Period of the
same duration, and (d) three Business Days prior to the Business Day on which
the Borrower desires to convert any LIBOR Rate Loans having a particular
Interest Period comprising such a Borrowing into LIBOR Rate Loans having a
different permissible Interest Period; PROVIDED, HOWEVER, that each such Rate
Conversion or Rate Continuation shall be subject to the following:
(i) each Rate Conversion or Rate Continuation of
Loans comprising a Borrowing shall be made among the Lenders
based upon each such Lender's Ratable Portion of such
converted or continued Revolving Credit Borrowing;
(ii) if less than all of the outstanding principal
amount of a Loan comprising a Revolving Credit Borrowing is
converted or continued, the aggregate principal amount of such
Loans converted or continued shall be: (A) in the case of
LIBOR Rate Loans, not less than Three Million Dollars
($3,000,000), or an integral multiple of One Million Dollars
($1,000,000) in excess thereof and (B) in the case of
Alternate Base Rate Loans, Two Hundred Fifty Thousand Dollars
($250,000) or an integral multiple of Ten Thousand Dollars
($10,000) in excess thereof;
(iii) each Rate Conversion or Rate Continuation shall
be effected as if each Lender were applying the proceeds of
the Loans resulting from such Rate Conversion or Rate
Continuation to the Loans being converted or continued, as the
case may be, and the accrued interest on any such Loans (or
portion thereof) being converted or continued shall be paid to
the Administrative Agent on behalf of each Lender by the
Borrower at the time of such Rate Conversion or Rate
Continuation;
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(iv) LIBOR Rate Loans shall not be converted or
continued at a time other than the end of an Interest Period
applicable thereto unless the Borrower shall pay, upon demand,
any amounts due to the Administrative Agent pursuant to 14.4
of this Agreement;
(v) Loans may not be converted into or continued as
LIBOR Rate Loans so as to comprise a Revolving Credit
Borrowing if the Interest Period applicable thereto will
expire on or after to the Revolving Credit Termination Date;
(vi) after and during the continuance of a Potential
Default, and after the occurrence of an Event of Default which
is continuing and has not been waived in accordance with
Section 15.1 hereof, Loans may not be converted into or
continued (at the expiration of the Interest Period applicable
thereto) as LIBOR Rate Loans; and
(vii) Loans that cannot be converted into or
continued as LIBOR Rate Loans by reason of clause (iv), (v) or
(vi) of this Section shall be automatically converted at the
end of the Interest Period in effect for such LIBOR Rate Loans
into Alternate Base Rate Loans.
Each such request for conversion or continuation (a "Rate
Conversion/Continuation Request") shall be a written or telephonic notice (in
the case of a telephonic notice, promptly confirmed in writing if so requested
by the Administrative Agent). Each written Rate Conversion/Continuation Request
or written confirmation thereof shall be substantially in the form of Exhibit C
attached hereto, signed by the Borrower and transmitted to the Administrative
Agent by telecopier. Each written and telephonic Credit Request and each
confirmation thereof shall specify: (A) the amount of the Loans comprising a
Revolving Credit or a Term B Borrowing that the Borrower requests be converted
or continued, (B) the Type of Loans into which such Loans are to be converted or
continued, (C) if such notice requests a Rate Conversion, the date of the Rate
Conversion (which shall be a Business Day) and (D) in the case of Loans
comprising a Borrowing being converted into or continued as LIBOR Rate Loans,
the Interest Period for such LIBOR Rate Loans. The Administrative Agent may rely
on such telephonic Rate Conversion/Continuation Request to the same extent that
the Administrative Agent may rely on a written Rate Conversion/Continuation
Request. Each Rate Conversion/Continuation Request, whether telephonic or
written, shall be irrevocable and binding on the Borrower and subject the
Borrower to the indemnification provisions of Section 14 of this Agreement. The
Borrower shall bear all risks related to giving any Rate Conversion/Continuation
Request telephonically.
2.11 LETTERS OF CREDIT.
Subject to the terms and conditions set forth in this
Agreement, the Designated Letter of Credit Issuer agrees, at any time and from
time to time, from and including the Closing Date but in no event after the
fifteenth (15th) Business Day immediately preceding the Revolving Credit
Termination Date, to issue and deliver, or to extend the expiration of, Letters
of Credit, denominated in Dollars, for the account of the Borrower or any
Subsidiary thereof (the Borrower and such Subsidiary being herein referred to as
"Letter of Credit Obligors"); PROVIDED, HOWEVER, that, the aggregate LC Exposure
of the Revolving Credit Lenders shall not at any time exceed the lesser of: (x)
Fifteen Million Dollars ($15,000,000), (y) an amount equal to the Borrowing Base
at such time MINUS the aggregate outstanding Revolving Credit Loans (excluding
the amount of Permitted Special Advances outstanding at such time) of the
Revolving Credit Lenders to the Borrower at such time or (z) the sum of the
aggregate Revolving Credit Commitments of the Revolving Lenders at such time
MINUS the sum of the aggregate outstanding
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Revolving Credit Loans (including the amount of Permitted Special Advances
outstanding at such time) of the Revolving Credit Lenders to the Borrower at
such time.
(a) FORM AND TERM OF LETTERS OF CREDIT.
Each Letter of Credit shall be issued in such form as the
Designated Letter of Credit Issuer may reasonably require subject (i) in the
case of documentary letters of credit, to the Uniform Customs and Practice for
Documentary Credits (1993 Revision), International Chamber of Commerce
Publication No. 500, and any subsequent revisions thereof, and (ii) in the case
of standby letters of credit, to the International Standby Practices (1998),
International Chamber of Commerce Publication No. 590, and any subsequent
revisions thereof. Each Letter of Credit shall: (w) permit drawings upon
presentation of one or more sight drafts and such other documents as specified
by the Borrower in the Letter of Credit Request delivered pursuant to Section
2.11(b) below and agreed to by such Designated Letter of Credit Issuer, which
drawings shall occur on or prior to the applicable expiration date of such
Letter of Credit, (x) by its terms, provide for payment of drawings only in
Dollars, (y) in the case of a standby Letter of Credit, by its terms expire on
the earlier of (I) the date one year after the date of issuance of such Letter
of Credit (or, in the case of renewal or extension thereof, one year after such
renewal or extension) and (II) the date which is not later than the fifteenth
(15th) Business Day prior to the Revolving Credit Termination Date, PROVIDED
that each standby Letter of Credit may, upon the request of the Borrower,
include a provision whereby such Letter of Credit shall be renewed automatically
for additional consecutive periods of 12 months or less (but not beyond the date
that is fifteen (15) Business Days prior to the Revolving Credit Termination
Date) unless the Designated Letter of Credit Issuer notifies the beneficiary
thereof at least 30 days prior to the then-applicable expiration date that such
Letter of Credit will not be renewed and (z) in the case of a commercial Letter
of Credit, by its terms expire at or prior to the close of business on the
earlier of (i) the date 90 days after the date of the issuance of such
commercial Letter of Credit and (ii) the date which is not later than the
fifteenth (15th) Business Day prior to the Revolving Credit Termination Date.
(b) REQUESTS AND CONDITIONS OF LETTERS OF CREDIT.
Requests for Letters of Credit for the account of the
Borrower or any Subsidiary of the Borrower shall be given by the
Borrower to the Administrative Agent and Designated Letter of Credit
Issuer not later than 12:00 noon (local time at the Notice Office of
the Administrative Agent) three (3) Business Days prior to the
specified date for the issuance of the requested Letter of Credit. Each
such request (a "Letter of Credit Request") for a Letter of Credit
shall be a written or telephonic notice (in the case of a telephonic
notice, promptly confirmed in writing if so requested by the Designated
Letter of Credit Issuer). Each written Letter of Credit Request or
written confirmation thereof shall be substantially in the form of
Exhibit B-2 attached hereto, signed by the Borrower and transmitted by
the Borrower to the Designated Letter of Credit Issuer and the
Administrative Agent by telecopier. Each written and telephonic Letter
of Credit Request and each confirmation thereof shall specify with
respect to each Letter of Credit requested: (i) the Borrower or the
Subsidiary thereof which is to be the account party for whose benefit
the Letter of Credit is being requested, (ii) the face amount thereof
which shall be denominated in Dollars, (iii) the beneficiary, (iv) the
intended date of issuance and (v) the terms (including the anticipated
expiry date) of the Letter of Credit. Concurrently with each Credit
Request requesting a Letter of Credit, the applicable Letter of Credit
Obligor shall execute and deliver to the Designated Letter of Credit
Issuer in respect of such requested Letter of Credit a reimbursement or
similar agreement, in the Designated Letter of Credit Issuer's then
standard form of application for and reimbursement agreement with
respect to letters of credit (such documents being hereinafter
collectively referred to as a "Reimbursement Agreement"); PROVIDED,
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HOWEVER, that in the event of any conflict between the provisions of
any such Reimbursement Agreement and this Agreement, the provisions of
this Agreement shall govern. The Administrative Agent may rely on such
telephonic Letter of Credit Request to the same extent that the
Administrative Agent may rely on a written Letter of Credit Request.
The Borrower for which a Letter of Credit Request was made or, if the
Letter of Credit Request is for the account of a Letter of Credit
Obligor which is not the Borrower, the Borrower shall bear all risks
related to the giving of such Letter of Credit Request by the Borrower
on behalf of such Letter of Credit Obligor whether given telephonically
or by such other method of transmission as the Borrower shall elect.
(c) EXISTING LETTERS OF CREDIT.
The Disclosure Schedule contains a description of all
Existing Letters of Credit outstanding on, and to continue in effect
after, the Closing Date. With respect to Existing Letters of Credit
issued by NCB, each such Existing Letter of Credit shall, to the extent
indicated in the Disclosure Schedule, constitute on and as of the
Closing Date a "Letter of Credit" hereunder for all purposes hereof,
and shall be deemed to have been issued, for purposes of Section
2.13(c)(i) hereof, on the Closing Date. From and after the Closing
Date, the terms of this Agreement shall apply to such Existing Letters
of Credit, superseding any other agreement otherwise applicable to them
to the extent inconsistent with the terms hereof.
(d) PARTICIPATION BY LENDERS IN LETTERS OF CREDIT.
By its issuance of a Letter of Credit and without
further action on its part, the Designated Letter of Credit Issuer
hereby grants to each Lender, and each Lender hereby acquires from the
Designated Letter of Credit Issuer, a participation in such Letter of
Credit equal to such Lender's Ratable Portion of the Letter of Credit's
face amount, effective on the date of the issuance of such Letter of
Credit. In consideration, each Lender hereby absolutely and
unconditionally agrees to pay to the Administrative Agent for the
account of the Designated Letter of Credit Issuer such Lender's Ratable
Portion of each disbursement made by the Designated Letter of Credit
Issuer in respect of such Letter of Credit and not reimbursed by the
applicable Letter of Credit Obligor or, if the applicable Letter of
Credit Obligor is not the Borrower, the Borrower, for any reason or as
to which any reimbursement payment made by or on behalf of such Letter
of Credit Obligor is required to be refunded to the Borrower or
applicable Letter of Credit Obligor for any reason. Each Lender
acknowledges and agrees that its obligation to acquire risk
participations pursuant to this Section 2.11(d) is absolute and
unconditional and shall not be affected by any event or circumstance
whatsoever, including the occurrence of any Potential Default or Event
of Default hereunder or the failure of any condition precedent set
forth in Section 3 of this Agreement to be satisfied and each payment
in satisfaction thereof shall be made without any offset, abatement,
withholding or reduction whatsoever; PROVIDED, HOWEVER, that the
foregoing shall not be construed to excuse the Designated Letter of
Credit Issuer from liability to any Lender to the extent of any direct
damages (as opposed to consequential damages, claims in respect of
which are hereby waived by each of the Lenders to the fullest extent
permitted by applicable Law) suffered by such Lender that are caused by
the Designated Letter of Credit Issuer's gross negligence or willful
misconduct.
(e) REIMBURSEMENT; INTEREST.
The Borrower agrees that (x) whenever there is a
drawing on a Letter of Credit issued by the Designated Letter of Credit
Issuer for the account of the Borrower, the Borrower shall pay and (y)
whenever there is a drawing on a Letter of Credit issued
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by the Designated Letter of Credit Issuer for the account of a Letter
of Credit Obligor which is not the Borrower and whose reimbursement
obligation the Borrower is guarantying pursuant to Section 2.11(l) of
this Agreement, the Borrower shall cause such Letter of Credit Obligor
to pay, or shall on behalf of such Letter of Credit Obligor pay, to the
Administrative Agent on the date of such drawing an amount equal to
such drawing, such payment to be made in immediately available funds
and in Dollars. The Administrative Agent shall promptly remit any such
payment to the Designated Letter of Credit Issuer. If there is a
drawing on a Letter of Credit, then, unless the Letter of Credit
Obligor or, if the Letter of Credit Obligor is not the Borrower, the
Borrower shall reimburse such amount in full on the date of such
drawing, the unpaid amount thereof shall bear interest for the account
of the Designated Letter of Credit Issuer for each day from and
including the date of such drawing until the earlier of the date of
reimbursement by the applicable Letter of Credit Obligor or, if the
applicable Letter of Credit Obligor is not the Borrower, the Borrower,
on the date on which such drawing is reimbursed by Revolving Credit
Loans, at the rate per annum that would apply to such amount if such
amount were a Revolving Credit Borrowing comprised of Alternate Base
Rate Loans.
(f) FAILURE TO REIMBURSE DRAWINGS.
In the event that the applicable Letter of Credit
Obligor or, if the applicable Letter of Credit Obligor is not the
Borrower, the Borrower fails to make a timely reimbursement, together
with any interest thereon, to the Administrative Agent on the date of
any drawing on a Letter of Credit, such failure shall constitute a
Deemed Credit Request requesting an Alternate Base Rate Loan to be made
to such Letter of Credit Obligor if such Letter of Credit Obligor is
the Borrower or, if such Letter of Credit Obligor is not the Borrower,
to the Borrower, in an aggregate amount equal to the amount
reimbursable to the Designated Letter of Credit Issuer plus any
interest thereon. The Administrative Agent shall disburse all such loan
proceeds directly to the Designated Letter of Credit Issuer to satisfy
the aforesaid reimbursement liability. The obligations of the Lenders
to the Administrative Agent under this Section 2.11(f) are in addition
to and not in limitation of the obligations of the Lenders under
Section 12 of this Agreement. In the event that the obligation of the
Lenders to make a Revolving Credit Loan pursuant to this Section
2.11(f) cannot be satisfied by the Lenders because any of the events
contemplated by Section 9.13 (to the extent within the scope of clause
(c) through (f) of the definition of "Financial Impairment") hereof
shall have occurred with respect to the Borrower, or one or more of the
Lenders shall determine that such Lenders are otherwise legally
prohibited from making such a Revolving Credit Loan, each Lender (other
than the applicable Designated Letter of Credit Issuer) or each such
Lender so prohibited (other than the Designated Letter of Credit
Issuer), as the case may be, shall be obligated to consummate the
purchase, on the date the Revolving Credit Loan would have been made
pursuant to this Section (e), of its undivided participating interest
in the outstanding unpaid reimbursement obligation owing to the
Designated Letter of Credit Issuer in an amount equal to the Revolving
Credit Loan that such Lender would otherwise have been obligated to
fund. On the purchase date, each Lender or each such Lender so
prohibited shall pay to the Administrative Agent, for the benefit of
the Designated Letter of Credit Issuer, in immediately available funds,
at the account of the Administrative Agent maintained at the Payment
Office of the Administrative Agent not later than the time such Lender
would have been obligated to fund such Revolving Credit Loan pursuant
to this Section 2.11(f), a participation purchase price for such
participating interest in amount equal to such Revolving Credit Loan.
The proceeds of purchases by the Lenders of such participating
interests shall be applied directly by the Administrative Agent to
reimburse the Designated Letter of Credit for such unpaid reimbursed
obligation. Upon receipt of such participation purchase price, the
Designated Letter of Credit Issuer shall, if requested by a Lender
purchasing a participating interest, issue a participation
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certificate, dated the date of the Designated Letter of Credit Issuer's
receipt of such proceeds, and evidencing such Lender's participating
interest in such unpaid reimbursement obligation. Whenever, at any time
after a Designated Letter of Credit Issuer has received from the
Administrative Agent the proceeds of any such participating interest by
any other Lender, such Designated Letter of Credit Issuer receives any
payment from or on behalf of the applicable Letter of Credit Obligor
or, if such Letter of Credit Obligor is not the Borrower, from or on
behalf of the Borrower, on account of such unpaid reimbursed
obligation, such Designated Letter of Credit will promptly pay to the
Administrative Agent for distribution to such Lender its Ratable
Portion of such payments (appropriately adjusted, in the case of
interest payments, to reflect the period of time during which such
Lender's participating interest was outstanding); PROVIDED, HOWEVER,
in the event such payment in respect of unpaid reimbursement
obligations is required to be returned by the Designated Letter of
Credit Issuer, such Lender will return to the Administrative Agent for
payment to the Designated Letter of Credit Issuer any portion of such
payment previously distributed by the Administrative Agent on behalf of
the Designated Letter of Credit Issuer.
(g) OBLIGATIONS ABSOLUTE.
The obligation of the Borrower to reimburse, or, if
the applicable Letter of Credit Obligor is not the Borrower, the
obligation of the Borrower to reimburse, the Designated Letter of
Credit Issuer shall be absolute and unconditional and shall be
performed under all circumstances including, without limitation: (i)
any lack of validity or enforceability of any Letter of Credit, (ii)
the existence of any claim, offset, defense or other right that the
Borrower or such Letter of Credit Obligor may have against the
beneficiary of any Letter of Credit or any successor in interest
thereto, (iii) the existence of any claim, offset, defense or other
right that any Lender or the Administrative Agent may have against the
Borrower or such Letter of Credit Obligor or against the beneficiary of
any Letter of Credit or against any successor in interest thereto, (iv)
the existence of any fraud or misrepresentation in the presentment of
any draft or other item drawn and paid under any Letter of Credit by
any Person other than the Designated Letter of Credit Issuer, (v) any
payment of any draft or other item by a Designated Letter of Credit
Issuer which does not strictly comply with the terms of any Letter of
Credit issued by such Designated Letter of Credit Issuer, so long as,
in each case, such payment shall not have constituted gross negligence
or willful misconduct on the part of such Designated Letter of Credit
Issuer, (vi) any improper use which may be made of the Letter of Credit
or any improper acts or omissions of any beneficiary or transferee of
the Letter of Credit in connection therewith, (vii) any statement or
any other documents presented under any Letter of Credit proving to be
insufficient, forged, fraudulent or invalid in any respect or any
statement therein being untrue or inaccurate in any respect whatsoever,
(viii) the insolvency of any Person issuing any documents in connection
with the Letter of Credit, (ix) any irregularity in the transaction
with respect to which a Letter of Credit is issued, including any fraud
by the beneficiary or any transferee of such Letter of Credit, (x) any
errors, omissions, interruptions or delays in transmission or delivery
of any messages, (xi) any act, error, neglect or default, omission,
insolvency or failure of business of any of the correspondents of the
Designated Letter of Credit Issuer, or (xii) any other circumstances
arising from causes beyond the control of the Designated Letter of
Credit Issuer.
(h) LIABILITY OF DESIGNATED LETTER OF CREDIT ISSUER.
It is expressly understood and agreed that the
absolute and unconditional obligation of the Borrower as a Letter of
Credit Obligor hereunder to reimburse, or, if the applicable Letter of
Credit Obligor is not the Borrower, the obligation of the Borrower to
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reimburse or cause such Letter of Credit Obligor to reimburse,
disbursements in respect of Letters of Credit issued by the Designated
Letter of Credit Issuer shall not be construed to excuse the Designated
Letter of Credit Issuer from liability to the Borrower or such Letter
of Credit Obligor to the extent of any direct damages (as opposed to
consequential damages, claims in respect of which are hereby waived by
the Borrower to the extent permitted by applicable Law) suffered by the
Borrower or such Letter of Credit Obligor of the foregoing that are
caused by the gross negligence or willful misconduct of such Designated
Letter of Credit Issuer in determining whether drafts and other
documents presented under a Letter of Credit comply with the terms
thereof. The parties agree that each Designated Letter of Credit 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 may make payment upon presentation of
documents that appear on their face to be in substantial compliance
with the terms of such Letter of Credit; PROVIDED, HOWEVER, that each
Designated Letter of Credit Issuer shall have the right in its sole
discretion to decline to accept such documents and to decline to make
such payment if such documents are not in strict compliance with the
terms of such Letter of Credit. In making any payment under any Letter
of Credit, the Designated Letter of Credit Issuer's (i) exclusive
reliance as to any and all matters set forth therein on documents,
signatures and endorsements presented to it under such Letter of Credit
which on their face appear to be in order, whether not the amount due
to the beneficiary thereunder equals the amount of such draft, whether
any document presented pursuant to such Letter of Credit proves to be
in order, and whether any other statement or any other document or any
signature or endorsement with respect thereto 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
(ii) making payment upon presentation of documents not complying in
immaterial respects with the terms of the Letter of Credit shall, in
each case, not be deemed to constitute willful misconduct or gross
negligence of the Designated Letter of Credit Issuer. Any action,
inaction or omission on the part of the Designated Letter of Credit
Issuer or any of its correspondents, under or in connection with any
Letter of Credit issued by the Designated Letter of Credit Issuer or
any renewal or extension thereof or the related instruments or
documents, if taken in good faith and in conformity with applicable
Laws and regulations governing Letters of Credit generally and the
terms of this Section 2.11(h), shall be binding upon the Borrower and
such other applicable Letter of Credit Obligor and shall not place the
Designated Letter of Credit Issuer or any of its correspondents under
any liability to the Borrower or such other Letter of Credit Obligor.
The Designated Letter of Credit Issuer's rights, powers, privileges and
immunities specified in or arising under this Agreement are in addition
to any heretofore or at any time hereafter otherwise created or arising
rights, powers, privileges and immunities, whether by statute or rule
of Law or contract.
(i) DESIGNATED LETTER OF CREDIT ISSUER INDEMNITY.
The Borrower whether pursuant to a Letter of Credit
issued for its account or pursuant to its guarantying the reimbursement
obligation of another Letter of Credit Obligor shall indemnify the
Designated Letter of Credit Issuer issuing such Letter of Credit from
and against: (i) any loss or liability (other than any caused by the
Designated Letter of Credit Issuer's gross negligence or willful
misconduct as determined by the final judgment of a court of competent
jurisdiction) incurred by the Designated Letter of Credit Issuer in
respect of this Agreement and the Letters of Credit issued by the
Designated Letter of Credit Issuer for the account of the Borrower or
such Letter of Credit Obligor and (ii) any out-of-pocket expenses
incurred by such Designated Letter of Credit Issuer in defending itself
or otherwise related to this Agreement or any such Letter of Credit
issued by such Designated Letter of Credit Issuer (other than any
caused by the
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Designated Letter of Credit Issuer's gross negligence or willful
misconduct as determined by the final judgment of a court of competent
jurisdiction) including, without limitation, reasonable fees and
expenses of legal counsel incurred by such Designated Letter of Credit
Issuer in the defense of any claim against it or in the prosecution of
its rights and remedies.
(j) EFFECT OF APPLICABLE LAW OR CUSTOM.
All Letters of Credit issued hereunder, all
reimbursement obligations hereunder and all reimbursement obligations
under any Reimbursement Agreement will, except to the extent otherwise
expressly provided in this Agreement, the Reimbursement Agreements or
such Letters of Credit, be governed: (i) in the case of commercial
documentary letters of credit, by the Uniform Customs and Practice for
Documentary Credits (1993 Revision), International Chamber of Commerce
Publication No. 500, and any subsequent revisions thereof, and (ii) in
the case of standby letters of credit, by the International Standby
Practices (1998), International Chamber of Commerce Publication No.
590, and any subsequent revisions thereof. All Letters of Credit shall
be deemed to be made under the laws of the State of Ohio (including
Article 5 of the Uniform Commercial Code as currently in effect in the
State of Ohio), and shall, as to matters not governed by the Uniform
Customs or the International Standby Practices, be governed by and
construed in accordance with the laws of the State of Ohio.
(k) TERMINATION OF LETTER OF CREDIT COMMITMENT.
In the event that: (i) any restriction is imposed on
the Designated Letter of Credit Issuer (including, without limitation,
any legal lending or acceptance limits imposed by the United States of
America or any political subdivision thereof or of any foreign
government or central Lender) which in the judgment of the Designated
Letter of Credit Issuer would prevent the Designated Letter of Credit
Issuer from issuing Letters of Credit or maintaining its commitment to
issue Letters of Credit or (ii) there shall have occurred, at any time
during the term of this Agreement: (A) any outbreak of hostilities or
other national or international crisis or change in economic conditions
if the effect of such outbreak, crisis or change would make the
issuance of Letters of Credit impracticable, (B) the enactment,
publication, decree or other promulgation of any statute, regulation,
rule or order of any court or other governmental authority which would
materially and adversely affect the ability of the Borrower to perform
their obligations under this Agreement or the ability of any Letter of
Credit Obligor to perform its obligations under this Agreement or any
Reimbursement Agreement, or (C) the taking of any action by any
government or agency in respect of its monetary or fiscal affairs which
would have a material adverse effect on the issuance of Letters of
Credit, THEN the Designated Letter of Credit Issuer, in the case of the
occurrence of any event described hereinabove, shall give written
notice of the occurrence of such event to the Borrower and the
Administrative Agent whereupon the commitment of the Designated Letter
of Credit Issuer to issue or extend any Letter of Credit shall be
suspended on the effective date of such notice and shall continue to be
suspended until the effect of such event shall cease to exist.
(l) GUARANTY OF OTHER LETTER OF CREDIT OBLIGOR'S LETTER
OF CREDIT OBLIGATIONS.
(i) With respect to each Letter of Credit Obligor
which is not the Borrower, the Borrower hereby unconditionally
guarantees, jointly and severally with such Letter of Credit
Obligor, for the benefit of the Administrative Agent, the
Lenders and the Designated Letter of Credit Issuer, the full
and punctual
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payment of the obligations of such Letter of Credit Obligor
under each Letter of Credit Document to which such Letter of
Credit Obligor is now or hereafter becomes a party. Upon
failure by any such Letter of Credit Obligor to pay punctually
any such amount, the Borrower shall be jointly and severally
obligated with such Letter of Credit Obligor to forthwith on
demand by the Administrative Agent pay the amount not so paid
at the place and in the currency and otherwise in the manner
specified in this Agreement or any applicable Letter of Credit
Document. As a separate, additional and continuing obligation,
the Borrower unconditionally and irrevocably undertakes and
agrees, for the benefit of the Administrative Agent and the
Lenders, that, should any of the foregoing amounts not be
recoverable from the Borrower for any reason whatsoever, THEN,
notwithstanding any notice or knowledge thereof by any Lender,
the Administrative Agent, or the Designated Letter of Credit
Issuer, any of their respective Affiliates, or any other
Person, at any time, the Borrower as sole, original and
independent obligor, upon demand by the Administrative Agent,
will make payment to the Administrative Agent, for the account
of the Lenders and the Administrative Agent, of all such
obligations not so recoverable by way of full indemnity, in
such currency and otherwise in such manner as is provided in
the Loan Documents.
(ii) The obligations of the Borrower under this
Section 2.11(l) with respect to the obligations of a Letter of
Credit Obligor other than the Borrower shall be unconditional
and absolute and, without limiting the generality of the
foregoing shall not be released, discharged or otherwise
affected by the occurrence, one or more times, of any of the
following:
(A) any extension, renewal, settlement,
compromise, waiver or release in respect to any
obligation of such Letter of Credit Obligor under any
Letter of Credit Document, by operation of law or
otherwise;
(B) any modification or amendment of or
supplement to this Agreement, any Note or any other
Loan Document;
(C) any release, non-perfection or invalidity of
any direct or indirect security for any obligation of
the Borrower under this Agreement, any Note or any
other Loan Document or of any other Letter of Credit
Obligor under any Letter of Credit Document;
(D) any change in the corporate existence,
structure or ownership of such Letter of Credit
Obligor or any insolvency, bankruptcy, reorganization
or other similar proceeding affecting such Letter of
Credit Obligor or its assets or any resulting release
or discharge of any obligation of such Letter of
Credit Obligor contained in any Letter of Credit
Document;
(E) the existence of any claim, set-off or other
rights which the Borrower may have at any time
against such Letter of Credit Obligor, the
Administrative Agent, any Lender, the Designated
Letter of Credit Issuer or any other Person, whether
in connection herewith or any unrelated transactions;
(F) any invalidity or unenforceability relating
to or against such Letter of Credit Obligor for any
reason or any Letter of Credit Document, or any
provision of applicable law or regulation purporting
to prohibit the
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payment by such Letter of Credit Obligor of any
Letter of Credit Obligations in respect of any Letter
of Credit; or
(G) any other act or omission to act or delay of
any kind by such Letter of Credit Obligor, the
Administrative Agent, any Lender, the Designated
Letter of Credit Issuer or any other Person or any
other circumstance whatsoever which might, but for
the provisions of this section, constitute a legal or
equitable discharge of the Borrower's obligations
under this section.
(iii) The obligations of the Borrower under this
Section 2.11(l) shall remain in full force and effect until
the Commitments shall have terminated and the principal of and
interest on the Revolving Credit Notes and all other amounts
payable by the Borrower under the Loan Documents and by such
Letter of Credit Obligor under the Letter of Credit Documents
shall have been paid in full. If at any time any payment of
any of the reimbursement obligations of such Letter of Credit
Obligor in respect of any Letter of Credit Documents is
rescinded or must be otherwise restored or returned upon the
insolvency, bankruptcy or reorganization of such Letter of
Credit Obligor, the Borrower's obligations under this Section
with respect to such payment shall be reinstated at such time
as though such payment had been due but not made at such time.
(iv) The Borrower irrevocably waives acceptance
hereof, presentment, demand, protest and any notice not
provided for herein, as well as any requirement that at any
time any action be taken by any Person against such Letter of
Credit Obligor or any other Person, or against any collateral
or guaranty of any other Person.
(v) Until the indefeasible payment in full of all of
the Secured Obligations and the termination of the Commitments
of the Lenders hereunder, the Borrower shall not have any
rights, by operation of law or otherwise, upon making any
payment under this section, to be subrogated to the rights of
the payee against such Letter of Credit Obligor with respect
to such payment or otherwise to be reimbursed, indemnified or
exonerated by such Letter of Credit Obligor in respect
thereof.
In the event that acceleration of the time for payment of any amount
payable by any Letter of Credit Obligor under any Letter of Credit
Document is stayed upon insolvency, bankruptcy or reorganization of
such Letter of Credit Obligor, all such amounts otherwise subject to
acceleration under the terms of any applicable Letter of Credit
Document shall nonetheless be payable by the Borrower under this
Section 2.11(l) forthwith on demand by the Administrative Agent.
2.12 INTEREST ON LOANS.
(a) INTEREST RATE.
The Borrower shall pay interest on the unpaid
principal amount of each Revolving Credit Loan and Term B Loan, as the
case may be, made by the Lenders from the date of such Loan is advanced
until the principal amount thereof shall have been paid in full as
follows:
(i) ALTERNATE BASE RATE LOANS -- REVOLVING CREDIT
LOANS. During such periods as any Alternate Base Rate Loans
comprising a Revolving Credit
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Borrowing are outstanding, the Borrower shall pay interest on
such Alternate Base Rate Loans at a rate per annum equal to
the sum of the Alternate Base Rate PLUS the Applicable Margin
which is then in effect and applicable to the Borrowings
comprised of Alternate Base Rate Loans, payable monthly, in
arrears, on the first day of each calendar month and on the
date such Alternate Base Rate Loans comprising any such
Borrowing shall be converted or paid in full (whether at
maturity, by reason of acceleration or otherwise) and, after
maturity, on demand, and
(ii) LIBOR RATE LOANS -- REVOLVING CREDIT LOANS.
During such periods as any LIBOR Rate Loans comprising a
Revolving Credit Borrowing are outstanding, the Borrower shall
pay interest on such LIBOR Rate Loans at a rate per annum
equal to the sum of the London Interbank Offered Rate PLUS the
Applicable Margin which is in effect and applicable to
Borrowings comprised of LIBOR Rate Loans as of the most
recently preceding Margin Adjustment Date occurring prior to
the date of the making of such LIBOR Rate Loans, or the
conversion or continuation of such LIBOR Rate Loans in
accordance with Section 2.10 hereof, payable: (A) on the last
day of each Interest Period and (B) if such Interest Period
has a duration of more than three months, three months after
the first day of such Interest Period and (C) on the date such
LIBOR Rate Loans comprising such Borrowing shall be converted
to Base Rate Loans, or paid in full (whether at maturity, by
reason of acceleration or otherwise) and (D) after maturity,
on demand.
(iii) TERM B LOANS. During such periods as any Term B
Loans are outstanding, the Borrower shall pay interest on such
Term B Loans at a rate per annum equal to seventeen percent
(17%), payable monthly, in arrears, on the first day of each
calendar month and on the date such Term B Loans are paid in
full (whether at maturity, by reason of acceleration or
otherwise) and, after maturity, on demand; PROVIDED, HOWEVER
that the Borrower shall pay 9% of the interest otherwise
payable on the Term B Loan by adding such amount of interest
("PIK Interest") to the principal amount outstanding on the
Term B Loans on the first day of each such calendar month.
(b) APPLICABLE MARGIN; TERMS OF ADJUSTMENT.
(i) COMMENCEMENT; CONDITIONS. So long as no Event of
Default shall have occurred which is continuing and has not
been waived in accordance with Section 15.1 hereof, the
Applicable Margin shall be calculated as herein specified as
of the Closing Date and as of the first day of each calendar
month commencing on and after the Administrative Agent shall
have received the Borrower's annual audited financial
statements for Fiscal Year ending December 31, 2001 (each such
date, a "Margin Adjustment Date"), based upon the average
Excess Availability for the Fiscal Month immediately preceding
such Margin Adjustment Date; PROVIDED, HOWEVER, that, on each
such Margin Adjustment Date, the Administrative Agent shall
have received a certificate complying with Section 8.1(d)(iv)
hereof certifying that, as of such Margin Adjustment Date, all
accounts payable of the Borrower and the Subsidiary Guarantors
are being paid on a timely basis consistent with past
practices and within stated terms (except to the extent other
arrangements are consistent with past practices) and EXCEPT
where the Borrower or Subsidiary Guarantor is in good faith
exercising set off rights as to such Account or alleging a
dispute with respect to such Account.
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(ii) CALCULATION AND DURATION OF ADJUSTMENT. On each
Margin Adjustment Date, the Applicable Margin shall be the
Applicable Margin set forth in the definition of "Applicable
Margin" for Alternate Base Rate Loans or the LIBOR Rate Loans,
as the case may be, comprising Revolving Credit Borrowings
which corresponds to the Borrower's average Excess
Availability for the immediately preceding Fiscal Month. The
Applicable Margin effective as of a particular Margin
Adjustment Date shall remain effective only until the next
succeeding Margin Adjustment Date at which time the Applicable
Margin shall be recalculated pursuant to this Subsection (b);
PROVIDED, HOWEVER, that:
(A) if (x) an Event of Default shall have
occurred which is continuing and has not been waived
in accordance with Section 15.1 hereof or (y) the
Administrative Agent does not receive the certificate
complying with Section 8.1(d)(iv) hereof as to
accounts payable, then, subject to the Required
Lender election specified in Section 2.12(c) hereof,
the Applicable Margin shall be: (a) with respect to
Revolving Credit Borrowings comprised of Alternate
Base Rate Loans, the Alternate Base Rate PLUS 1.25%
per annum and (b) with respect to (X) Revolving
Credit Borrowings comprised of LIBOR Rate Loans other
than Fixed asset Component Loans, the London
Interbank Offered Rate PLUS 3.25% per annum and (Y)
Revolving Credit Borrowings comprised of LIBOR Rate
Loans comprise of Fixed asset Component Loans, the
London Interbank Offered Rate PLUS 3.75% per annum;
and
(B) if an Event of Default shall have occurred
which is continuing and has not been waived in
accordance with Section 15.1 hereof, the interest
rate shall be, upon the election of the Required
Lenders, the default interest rate applicable
pursuant to Section 2.12(c) of this Agreement.
(c) DEFAULT INTEREST.
If any principal, interest or fees due under this
Agreement shall not be paid when due or if any Note or any amounts due
under any Note shall not be paid at maturity, whether such maturity
occurs by reason of lapse of time or by operation of any provision of
acceleration of maturity therein contained, or if there shall otherwise
occur an Event of Default which is continuing and has not been waived
in accordance with Section 15.1 hereof, then, at the election of the
Required Lenders, (a) the principal of each outstanding Loan and, to
the extent permitted by law, the unpaid interest thereon shall bear
interest, payable on demand, at a rate per annum equal at all times to
2% per annum in excess of the interest rate otherwise then payable
(including, if imposed, the interest rate reflecting the increased
Applicable Margin set forth in Section 2.12(b)(ii) hereof) pursuant to
the terms of this Agreement and (b) the Applicable Fee Percentage shall
be 2% in excess of the Applicable Fee Percentage per annum otherwise
applicable pursuant to the proviso to Section 2.13(d) of this
Agreement. In the case of Term B Loans, an election to impose the
additional 2% default interest shall be reflected in an increase in the
current pay component of such interest to 10% per annum; with the PIK
Interest component remaining at 9% per annum.
(d) ADMINISTRATIVE AGENT DETERMINATION OF INTEREST RATE,
NOTICE.
The Administrative Agent shall determine the London
Interbank Offered Rate in accordance with the definition of "London
Interbank Offered Rate" set forth in Annex II of this Agreement. The
Administrative Agent shall give prompt notice to each
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of the Lenders and the Borrower of the applicable interest rate
determined by the Administrative Agent for purposes of this Section
2.12.
(e) FAILURE OF BORROWER TO ELECT INTEREST PERIOD.
If no Interest Period is specified in any Credit
Request or any Rate Conversion/Continuation Request for any LIBOR Rate
Loan, the Borrower shall be deemed to have converted such Loan to an
Alternate Base Rate Loan. If the Borrower shall not have given notice
in accordance with Section 2.10 of this Agreement to continue any LIBOR
Rate Loans into a subsequent Interest Period (and shall not have
otherwise delivered a Rate Conversion/Continuation Request in
accordance with Section 2.10 of this Agreement to convert such Loans),
THEN, at the end of the Interest Period applicable to such LIBOR Rate
Loans (unless such LIBOR Rate Loans are repaid pursuant to the terms
hereof), the Borrower shall be deemed to have converted such Loans to
Alternate Base Rate Loans.
2.13 FEES.
The following fees shall be payable as set forth below:
(a) ADMINISTRATIVE AGENT FEES
The Borrower agrees to pay to the Administrative
Agent for its sole account such arranging and structuring fees, annual
Administrative Agent fees and collateral monitoring fees to the extent
and at such times as specified in the Administrative Agent Fee Letter.
(b) UNUSED COMMITMENT FEE.
The Borrower agrees to pay to the Administrative
Agent for the ratable benefit of the Lenders, allocable to the Lenders
in accordance with each Lender's Ratable Portion thereof, an unused
commitment fee on the average daily unused portion of the aggregate
Revolving Credit Commitments of the Lenders from the Closing Date until
the Revolving Credit Termination Date at a rate per annum equal to the
Applicable Fee Percentage then in effect, payable monthly in arrears on
the first day of the calendar month, commencing August 1, 2001, and on
the Revolving Credit Termination Date.
(c) LETTER OF CREDIT FEES.
The Borrower shall pay the following fees with
respect to Letters of Credit:
(i) ANNUAL STANDBY LETTER OF CREDIT FEE. The Borrower
agrees to pay to the Administrative Agent for the ratable
benefit of the Lenders, payable monthly in arrears on the
first Business Day of each calendar month occurring after the
Closing Date, an annual risk participation fee with respect to
each then outstanding standby Letter of Credit equal to: (x)
the Applicable Fee Percentage then in effect MULTIPLIED BY (y)
the maximum amount available from time to time to be drawn
under such Letter of Credit (unless such amount attributable
to such Letter of Credit Obligor has been directly paid to the
Designated Letter of Credit Issuer pursuant to the applicable
Reimbursement Agreement) and MINUS (z) the amount of the
facing fee specified in clause (iii) below otherwise payable
to the Designated Letter of Credit Issuer.
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(ii) ANNUAL COMMERCIAL LETTER OF CREDIT FEE. The
Borrower agrees to pay to the Administrative Agent for the
ratable benefit of the Lenders, payable monthly in arrears on
the first Business Day of each calendar month occurring after
the Closing Date, an annual risk participation fee with
respect to each then outstanding commercial Letter of Credit
equal to: (x) the Applicable Fee Percentage then in effect
MULTIPLIED BY (y) the maximum amount available from time to
time to be drawn under such Letter of Credit (unless such
amount attributable to such Letter of Credit Obligor has been
directly paid to the Designated Letter of Credit Issuer
pursuant to the applicable Reimbursement Agreement) and MINUS
(z) the amount of the facing fee specified in clause (iii)
below otherwise payable to the Designated Letter of Credit
Issuer.
(iii) LETTER OF CREDIT FACING FEE. The Borrower
agrees to pay to the Administrative Agent, for the sole
account of the Designated Letter of Credit Issuer, a facing
fee for each then outstanding Letter of Credit issued by such
Designated Letter of Credit Issuer for the account of the
Borrower or such other Letter of Credit Obligor being
guaranteed by the Borrower (unless such amount attributable to
such Letter of Credit Obligor has been directly paid to the
Designated Letter of Credit Issuer pursuant to the applicable
Reimbursement Agreement) equal to 0.25% per annum MULTIPLIED
BY the maximum amount available from time to time to be drawn
under such Letter of Credit issued by such Designated Letter
of Credit Issuer, payable monthly in arrears on the first
Business Day of each calendar month occurring after the
Closing Date.
(iv) OTHER FEES RELATING TO LETTERS OF CREDIT. The
Borrower agrees to pay to the Designated Letter of Credit
Issuer designated for the Borrower, for its sole account, upon
issuance by such Designated Letter of Credit Issuer of any
Letters of Credit for the account of the Borrower or such
other Letter of Credit Obligor being guaranteed by the
Borrower (unless such amount attributable to such Letter of
Credit Obligor has been directly paid to the Designated Letter
of Credit Issuer pursuant to the applicable reimbursement
agreement), any standard amendment and modification fees,
issuance fees, draw fees and any other standard fees and
charges charged by such Designated Letter of Credit Issuer in
connection with Letters of Credit.
(d) APPLICABLE FEE PERCENTAGES.
So long as no Event of Default shall have occurred
which is continuing and has not been waived in accordance with Section
15.1 hereof, each Applicable Fee Percentage shall be calculated as
herein specified as of the Closing Date and as of the last day of each
calendar month commencing on and after the Administrative Agent shall
have received the Borrower's annual audited financial statements for
Fiscal Year ending December 31, 2001 (each such date, a "Fee Percentage
Adjustment Date"), based upon the average Excess Availability for the
immediately preceding Fiscal Month, if on each such Fee Percentage
Adjustment Date, the Administrative Agent shall have received a
certificate complying with Section 8.1(d)(iv) hereof certifying that,
as of such Margin Adjustment Date, all accounts payable of the Borrower
are being paid on a timely basis consistent with past practices and
within stated terms (except to the extent other arrangements are
consistent with past practices) EXCEPT where the Borrower or Subsidiary
Guarantor is in good faith exercising set off rights as to such Account
or alleging a dispute with respect to such Account. On each Fee
Percentage Adjustment Date, each Applicable Fee Percentage shall be the
percentage set forth in the definition of "Applicable Fee Percentage"
which corresponds to the Borrower's average Excess Availability for the
immediately preceding Fiscal Month. The Applicable Fee Percentage
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effective as of a particular Fee Percentage Adjustment Date shall
remain effective only until the next succeeding Fee Percentage
Adjustment Date, at which time the Applicable Fee Percentage shall be
recalculated pursuant to this Section 2.13(d); provided, HOWEVER, that,
if an Event of Default shall have occurred which is continuing and has
not been waived in accordance with Section 15.1 hereof, or if the
Borrower shall not have delivered as of such Fee Percentage Adjustment
Date such required certificate as to accounts payable, then, subject to
the Required Lender election specified in Section 2.12(c) hereof, the
Applicable Fee Percentage shall be the highest per annum percentage
appearing in the tables incorporated into such definition.
(e) PAYMENT OF FEES; NONREFUNDABLE.
All fees set forth in this Section 2.13 shall be paid
in Dollars on the date due, in immediately available funds, to the
Administrative Agent for distribution, if and as appropriate, to the
Lenders or the Designated Letter of Credit Issuer. Once paid, to the
extent permitted by applicable Law and absent manifest error on the
part of the Administrative Agent, none of such fees shall be refundable
under any circumstances.
2.14 PAYMENTS AND COMPUTATIONS.
(a) PAYMENTS.
Except in connection with the application of
Collections, Remittances of Net Cash Proceeds and Intercompany Payments
deposited to the Cash Concentration Account to outstanding Obligations
(other than outstanding Term B Loans) as specified in Section 5.2
hereof, the Borrower shall otherwise make all other payments to be made
or which are voluntarily made by the Borrower under this Agreement with
respect to the Obligations hereunder, not later than 12:00 noon (local
time at the Payment Office of the Administrative Agent) on the day when
due, by deposit of Dollars, in immediately available funds, without
setoff, counterclaim, defense or deduction of any kind, to the
Administrative Agent's account maintained at the Payment Office of the
Administrative Agent as specified in this Agreement for distribution by
the Administrative Agent to the Lenders and application thereof by the
Lenders to the Borrower's Loan Accounts. Payments received after 12:00
noon (local time at the Payment Office of the Administrative Agent)
shall be deemed to have been received on the next succeeding Business
Day.
(b) APPLICATION OF PAYMENTS.
After receipt of any such payment by the
Administrative Agent, the Administrative Agent will cause to be
distributed on the day of such receipt like funds relating to such
payment (other than amounts payable pursuant to Section 2.13(a) of this
Agreement solely to the Administrative Agent and amounts payable
pursuant to Section 2.13(d) of this Agreement solely to the applicable
Designated Letter of Credit Issuer) ratably to each of the Lenders for
the account of its respective Lending Office. At the time of the
Borrower's making such payment hereunder, the Borrower shall specify to
the Administrative Agent the Obligations of the Borrower to which such
payment is to be applied. If the Borrower does not specify an
application for such payment or if an Event of Default has occurred and
is continuing which has not been waived in accordance with Section 15.1
hereof, the Administrative Agent may, subject to Sections 2.16 and
10.5(d) of this Agreement, distribute such payment to the Lenders for
application to such Obligations as the Administrative Agent, in its
sole discretion, elects or as the Required Lenders shall have directed;
PROVIDED, HOWEVER, the Administrative Agent will use
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reasonable efforts to avoid an application of a payment which causes
early prepayment of a LIBOR Rate Borrowing prior to expiration of its
applicable Interest Period.
(c) ADMINISTRATIVE AGENT MAINTENANCE OF CONTROL ACCOUNT.
The Administrative Agent shall maintain on its books
and records a control account (the "Control Account") in respect of the
Borrower which shall reflect: (i) with respect to Revolving Credit
Borrowings: (w) the outstanding Revolving Credit Loans to the Borrower,
(x) the Ratable Portion of each Lender in the outstanding Revolving
Credit Borrowings to the Borrower, (y) the Ratable Portion of each
Lender in all payments made in respect of such Revolving Credit Loans
and (z) accrued interest on the Revolving Credit Loans to the Borrower,
(ii) all Letter of Credit drawings and (iii) all other Obligations of
the Borrower that have become payable hereunder. Each entry by the
Administrative Agent in the Control Account shall be, absent manifest
error, prima facie evidence of the data entered. Such entries by the
Administrative Agent shall not be a condition to the Borrower's
obligation to repay the Obligations.
(d) CONTROL ACCOUNT CHARGES AND CREDITS; ADMINISTRATIVE
AGENT REPORTS.
The Control Account maintained by the Administrative
Agent in respect of the Borrower will be charged with all Revolving
Credit Loans to the Borrower and all other Obligations of the Borrower
under this Agreement or any other Loan Document. The Borrower hereby
authorizes each Lender to charge the Loan Account in respect of the
Borrower with such Obligations. The Control Account in respect of the
Borrower will be credited in accordance with the provisions of this
Agreement with all payments received by the Administrative Agent
directly from the Borrower or for the account of the Borrower. The
Administrative Agent shall send the Borrower statements for the
Borrower in accordance with the Administrative Agent's standard
procedures. Any and all such periodic or other statements or
reconciliations of the Control Account shall be final, binding and
conclusive upon the Borrower in all respects, absent manifest error,
unless the Administrative Agent receives specific written objection
thereto from the Borrower within forty five (45) Business Days after
such statements or reconciliation shall have been sent to the Borrower
by the Administrative Agent. The Loan Accounts of each Lender shall
reflect the activity in the Control Account applicable to such Lender.
(e) AUTHORIZATION TO CHARGE BANKING ACCOUNTS.
If and to the extent any payment owed by the Borrower
to the Administrative Agent, any Lender or the Designated Letter of
Credit Issuer is not made when due hereunder or under the Revolving
Credit Notes, each of the Borrower hereby authorizes the Administrative
Agent, such Lender and the Designated Letter of Credit Issuer, as the
case may be, to charge from time to time against any or all of the
accounts of the Borrower with the Administrative Agent, such Lender or
the Designated Letter of Credit Issuer, as the case may be, any amount
so due. Notice of any such charge shall be given promptly to the
Borrower by the Administrative Agent, such Lender or the Designated
Letter of Credit Issuer, as the case may be.
(f) COMPUTATIONS OF INTEREST AND FEES.
All computations of interest on Alternate Base Rate
Loans and LIBOR Rate Loans hereunder and of fees and other compensation
hereunder shall be made by the Administrative Agent on the basis of a
year of 360 days in each case for the actual number of days elapsed
(commencing on the day such Loan was advanced but excluding the day
such Loan shall be paid in full) occurring in the period for which such
interest or
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fees are payable. Each determination by the Administrative Agent of
interest, fees or other amounts of compensation due hereunder shall be
rebuttably presumed to be correct.
(g) PAYMENT NOT ON BUSINESS DAY.
Whenever any payment hereunder or under the Revolving
Credit Notes shall be stated to be due on a day other than a Business
Day, such payment shall be made on the next succeeding Business Day.
Any such extension or reduction of time shall in such case be included
in the computation of payment of interest, fees or other compensation,
as the case may be.
(h) PRESUMPTION OF PAYMENT IN FULL BY THE BORROWER.
Unless the Administrative Agent shall have received
notice from the Borrower prior to the date on which any payment is due
to the Lenders 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. In
reliance upon such assumption, the Administrative Agent may, but shall
not be obligated to, distribute to each Lender on such due date the
amount then due such Lender. If and to the extent the Borrower shall
not have made such payment in full to the Administrative Agent, each
Lender shall repay to the Administrative Agent promptly upon demand the
amount distributed to such Lender, together with interest thereon
(except to the extent otherwise paid by the Borrower) 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 at the Federal
Funds Effective Rate.
2.15 LIBOR RATE LOANS: UNASCERTAINABLE RATE; ILLEGALITY; INCREASED
COSTS.
(a) UNASCERTAINABLE RATE; ILLEGALITY; INCREASED COSTS.
In the event that (x) in the case of clause (i)
below, the Administrative Agent or (y) in the case of clauses (ii) and
(iii) below, any Lender, shall have determined on a reasonable basis
(which determination shall, absent manifest error, be final and
conclusive and binding upon all parties hereto):
(i) on any date for determining the LIBOR Rate for
LIBOR Rate Loans for any Interest Period that, by reason of
any changes arising after the Effective Date affecting the
London interbank eurocurrrency market, adequate and fair means
do not exist for ascertaining the applicable interest rate on
the basis provided for in the definition of the "London
Interbank Offered Rate"; or
(ii) at any time, that such Lender shall incur
increased costs or reductions in the amounts received or
receivable hereunder in an amount which such Lender deems
material with respect to any LIBOR Rate Loans (other than any
increased cost or reduction in the amount received or
receivable resulting from the imposition of or a change in the
rate of taxes or similar charges) to the Borrower because of
any change since the Effective Date in any applicable law,
governmental rule, regulation, guideline, order or request
(whether or not having the force of law), or in the
interpretation or administration thereof and including the
introduction of any new law or governmental rule, regulation,
guideline, order or request (such as, for example, but not
limited to, a change in official reserve requirements, but, in
all events, excluding reserves includable in the "London
Interbank Offered Rate" pursuant to the definition thereof);
or
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(iii) at any time, that the making or continuance of
any Eurocurrency Loan denominated in Dollars has become
unlawful by compliance by such Lender in good faith with any
change since the Effective Date in any law, governmental rule,
regulation, guideline or order, or the interpretation or
application thereof, or would conflict with any thereof not
having the force of law but with which such Lender customarily
complies;
THEN, and in any such event, such Lender (or the Administrative Agent
in the case of clause (i) above) shall: (x) on such date and (y) within
10 Business Days of the date on which such event no longer exists give
notice (by telephone confirmed in writing) to the Borrower and to the
Administrative Agent of such determination (which notice the
Administrative Agent shall promptly transmit to each of the other
applicable Lenders). Thereafter (A) in the case of clause (i) above,
LIBOR Rate Loans shall no longer be available until such time as the
Administrative Agent notifies the Borrower and the applicable Lenders
that the circumstances giving rise to such notice by the Administrative
Agent no longer exist, and any Credit Request or Rate
Conversion/Continuation Request given by the Borrower with respect to
LIBOR Rate Loans which have not yet been incurred or converted shall be
deemed rescinded by the Borrower or, in the case of a Credit Request,
shall, at the option of the Borrower, be deemed converted into a Credit
Request for Alternate Base Rate Loans to be made on the date of
Borrowing contained in such Credit Request, (B) in the case of clause
(ii) above, the Borrower shall pay to such Lender, upon written demand
therefor, such additional amounts (in the form of an increased rate of,
or a different method of calculating, interest or otherwise as such
Lender shall determine) as shall be required to compensate such Lender,
for such increased costs or reductions in amounts receivable hereunder
(a written notice as to the additional amounts owed to such Lender,
showing the basis for the calculation thereof, which basis must be
reasonable, submitted to the Borrower by such Lender shall, absent
manifest error, be final and conclusive and binding upon all parties
hereto) and (C) in the case of clause (iii) above, the Borrower shall
take one of the actions specified in Section 2.15(b) hereof as promptly
as possible and, in any event, within the time period required by law.
(b) CANCELLATION OF REQUESTS; CONVERSION OF OUTSTANDINGS.
At any time that any LIBOR Rate Loan is affected by
the circumstances described in Section 2.15(a)(ii) above, the Borrower
may, and, in the event any LIBOR Rate Loan is affected by the
circumstances described in Section 2.15(a)(iii) above, the Borrower
shall, either (i) if the affected LIBOR Rate Loan is then being made
pursuant to a Credit Request for a Borrowing, by causing the Borrower
to give the Administrative Agent telephonic (confirmed promptly in
writing if requested) notice thereof on the same date that the Borrower
was notified by a Lender pursuant to Section 2.15(a)(ii) or (iii)
above, cancel said Borrowing, convert the related Credit Request into
one requesting a Borrowing of Alternate Base Rate Loans or require the
affected Lender to make its requested Loan as a Alternate Base Rate
Loan, or (ii) if the affected LIBOR Rate Loan is then outstanding, upon
at least one Business Day's notice from the Borrower to the
Administrative Agent, require the affected Lender to convert each such
LIBOR Rate Loan into an Alternate Base Rate Loan with such conversion
to be effective on the last day of the Interest Period currently
applicable to such LIBOR Rate Loan, if the affected Lender may lawfully
continue to maintain and fund such Loan until such last day, or
immediately, if the affected Lender is not legally permitted to
maintain and fund such Loan until such last day; PROVIDED, that if more
than one Lender is affected at any time, then all affected Lenders must
be treated the same pursuant to this Section 2.15(b).
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2.16 PRO RATA TREATMENT OF LENDERS.
Except as set forth in Sections 2.13 and 10.6 of this
Agreement, and except as set forth in the Administrative Agent Fee Letter, each
Borrowing and participating interest hereunder, each payment or prepayment of
principal of any Borrowing, any reduction of commitments, each payment of
interest on the Loans, and each payment of the fees provided for hereunder shall
be allocated among the Lenders ratably in accordance with each Lender's Ratable
Portion thereof.
SECTION 3 CONDITIONS OF LENDING.
3.1 CONDITIONS PRECEDENT TO INITIAL LOANS.
The effectiveness of this Agreement, the obligation of each
Lender to make a Revolving Credit Loan on the occasion of each Borrowing
hereunder, and the obligation of the Designated Letter of Credit Issuer to issue
any Letters of Credit, are subject to the condition precedent that: (i) the
conditions set forth in ANNEX III, attached hereto and incorporated herein by
reference, shall have been satisfied, as determined by the Administrative Agent,
in its sole discretion, on or before the Closing Date of this Agreement and (ii)
the Administrative Agent shall have received on or before the Closing Date of
this Agreement the documents and deliveries set forth on said ANNEX III (which,
in the case of exhibits to this Agreement, shall be in the forms attached
hereto, with blanks completed).
3.2 CONDITIONS PRECEDENT TO ALL LOANS.
The obligation of each Lender to make a Loan on the occasion
of each Borrowing, Rate Conversion and Rate Continuation hereunder and the
obligation of the Designated Letter of Credit Issuer to issue or renew any
Letter of Credit are subject to the conditions precedent that:
(a) REPRESENTATION BRINGDOWN.
As of the date of any Credit Event, and before and
after giving effect thereto, the representations and warranties
contained in this Agreement and all other Loan Documents are (i) to the
extent such representations and warranties are not otherwise subject by
their terms to a materiality or Material Adverse Effect threshold, true
and correct in all material respects on and as of the date of such
Credit Event 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, and (ii) to the extent such
representations and warranties are otherwise subject by their terms to
a materiality or Material Adverse Effect threshold, true and correct in
all respects on and as of the date of such Credit Event 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; and
(b) NO DEFAULT; COMPLIANCE WITH TERMS.
As of the date of any Credit Event, and before and
after giving effect thereto, the Borrower shall be in compliance with
all other terms and provisions set forth herein and in each other Loan
Document on its part to be observed or performed, and at the time of
and immediately after such Credit Event, no Potential Default or Event
of Default shall have occurred and be continuing; and
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(c) NO MATERIAL ADVERSE CHANGE.
As of the date of any Credit Event, and before and
after giving effect thereto, there shall have been no event which has
had, or could reasonably be expected to have, a Material Adverse
Effect; and
(d) CONFIRMATION OF BORROWING BASE.
The Borrower shall have delivered to the
Administrative Agent each Borrowing Base Certificate required to have
been delivered for weekly period immediately preceding the occurrence
of such Credit Event or, in the event that daily reporting of the
Borrowing Base Certificate is required pursuant to Section 8.1(d)(ii)
hereof, for each of the five (5) days immediately preceding the
occurrence of such Credit Event; and
(e) OTHER DELIVERIES.
The Administrative Agent shall have received such
other approvals or documents as the Administrative Agent may reasonably
request consistent with the terms of this Agreement.
Each Credit Event shall constitute a representation and warranty by the Borrower
that on the date of such Credit Event, the statements in clauses (a) through (c)
above are true and correct as of such date and that the actions required under
clause (d) and (e) above have in fact been taken as of such date.
SECTION 4 SECURITY INTEREST IN COLLATERAL; COLLATERAL REQUIREMENTS.
4.1 GRANT OF SECURITY INTEREST.
To secure the prompt payment and performance of Secured
Obligations, the Borrower hereby grants and each Subsidiary Guarantor hereby
grants to the Administrative Agent, for itself in its capacity as Administrative
Agent hereunder and for the benefit of the Lenders (including the Administrative
Agent in its capacity as a Lender), the Designated Letter of Credit Issuer and
any Designated Hedge Creditor a continuing security interest in and to and a
pledge of all of the tangible and intangible personal property and assets of the
Borrower and such Subsidiary Guarantor, whether now owned or existing or
hereafter acquired or arising and wheresoever located including, without
limitation: (a) all Accounts, (b) all Inventory, (c) all Equipment and fixtures,
(d) all General Intangibles and Intellectual Property, (e) all Investment
Property, (f) all Deposit Accounts and any and all deposits or other sums at any
time credited by or due from the Lenders to the Borrower or any Subsidiary
Guarantor, whether in the Cash Concentration Account, any Blocked Account,
another depository account, or other account, (g) all Pledged Collateral, (h)
all Instruments, Documents, documents of title, policies and certificates of
insurance, securities, goods, choses in action, Chattel Paper, cash or other
property, to the extent owned by the Borrower or such Subsidiary Guarantor or in
which the Borrower or such Subsidiary Guarantor has an interest, (i) all
Collateral of the Borrower or such Subsidiary Guarantor which now or hereafter
is at any time in the possession or control of any of the Lenders or in transit
by mail or carrier to or from any of the Lenders or in the possession of any
Person acting in a Lender's behalf, without regard to whether such Lender
received the same in pledge, for safekeeping, as Administrative Agent for
collection or transmission or otherwise or whether such Lender had conditionally
released the same, and any and all balances, sums, proceeds and credits of the
Borrower or such Subsidiary Guarantor with such Lender, (j) all accessions to,
substitutions for, and all replacements, Products and Proceeds of the herein
above-
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referenced property of the Borrower or such Subsidiary Guarantor described in
this Section including, but not limited to, proceeds of insurance policies
insuring such property, and proceeds of any insurance, indemnity, warranty or
guaranty payable to the Borrower or such Subsidiary Guarantor and (k) all books,
records, and other property (including, but not limited to, credit files,
programs, printouts, computer software, and disks, magnetic tape and other
magnetic media, and other materials and records) of the Borrower and any
Subsidiary Guarantor pertaining to any such above-referenced property of the
Borrower or such Subsidiary Guarantor; PROVIDED, HOWEVER, that the foregoing
grant of a security interest and pledge shall not include a security interest in
or pledge of Excluded Property and provided, further, that if and when the
prohibition which prevents the granting by the Borrower or such Subsidiary
Guarantor to the Administrative Agent of a security interest in such Excluded
Property is removed or otherwise terminated, the Administrative Agent will be
deemed to have, and at all times from and after the date hereof to have had, a
security interest in and pledge of such Excluded Property, as the case may be,
and that, notwithstanding anything set forth herein to the contrary, the
Administrative Agent will be deemed to have, and at all times from and after the
date hereof to have had, a security interest in and pledge of the proceeds of
such Excluded Property.
4.2 REQUIRED GRANT OF REAL PROPERTY LIENS
Pursuant to Section 3.1, on the Closing Date, the Borrower and
each Subsidiary Guarantor shall execute a mortgage or deed of trust granting a
lien on the real property and fixtures of the Borrower and such Subsidiary
Guarantor specified therein.
4.3 PERFECTION.
The Borrower and each Subsidiary Guarantor shall execute such
financing statements provided for by applicable law, and otherwise take such
other action and execute such assignments or other instruments or documents, in
each case as the Administrative Agent may request, to evidence, perfect or
record the Administrative Agent's security interest in the Collateral or to
enable the Administrative Agent to exercise and enforce its rights and remedies
under this Agreement with respect to any Collateral. The Borrower and each
Subsidiary Guarantor hereby authorizes the Administrative Agent on behalf of the
Administrative Agent, the Lenders, the Designated Letter of Credit Issuer and
the Designated Hedge Creditor to execute and file any such financing statement
or continuation statement on the Borrower's or such Subsidiary Guarantor's
behalf. The parties acknowledge that a carbon, photographic, or other
reproduction of this Agreement shall be sufficient as a financing statement to
the extent permitted by law.
4.4 CHANGES AFFECTING PERFECTION.
Neither the Borrower nor any Subsidiary Guarantor shall, nor
shall the Borrower and any Subsidiary Guarantor permit any their respective
Subsidiaries to, without giving the Administrative Agent at least twenty (20)
days prior notice thereof: (a) make any change in any location where Inventory
or Equipment of the Borrower or such Subsidiary Guarantor or any of their
respective Subsidiaries is maintained, or locate any of such Inventory or
Equipment at any new locations (other than in connection with sales of Inventory
in the ordinary course of business), (b) change its state of incorporation or
make any change in the location of its chief executive office, principal place
of business or the office where its records pertaining to its Accounts and
General Intangibles are kept, (c) add any new places of business and (d) make
any change in its name or corporate structure, adopt new trade names, assumed
names or fictitious names or otherwise add any name under which the Borrower or
such Subsidiary Guarantor does business.
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4.5 PROTECTION OF COLLATERAL; REIMBURSEMENT.
All reasonable insurance expenses and all reasonable expenses
of protecting, storing, warehousing, insuring, handling, maintaining, and
shipping any Collateral, any and all excise, property, sales, use, or other
taxes imposed by any Federal, state, or local authority on any of the
Collateral, or in respect of the sale thereof, or otherwise in respect of the
Borrower's or each Subsidiary Guarantor's business operations which, if unpaid,
could result in the imposition of any Lien upon the Collateral, shall be borne
and paid by the Borrower or such Subsidiary Guarantor, as the case may be,
subject to the provisions of Section 8.2(i). If the Borrower or such Subsidiary
Guarantor fails to pay any portion thereof promptly when due, except as may
otherwise be permitted under this Agreement or under any of the other Loan
Documents, the Administrative Agent, at its option, may, but shall not be
required to, pay the same; PROVIDED, such amount remains unpaid for ten (10)
Business Days after the Administrative Agent has notified the Borrower of such
failure. All sums so paid or incurred by the Administrative Agent for any of the
foregoing and any and all other sums for which the Borrower or any Subsidiary
Guarantor may become liable under this Agreement and all costs and expenses
(including reasonable attorneys' fees and paralegals' fees, legal expenses, and
court costs, expenses and other charges related thereto) which the
Administrative Agent may incur in enforcing or protecting its Liens on or rights
and interests in the Collateral or any of its rights or remedies under this
Agreement or any other agreement between the parties to this Agreement or in
respect of any of the transactions to be had under this Agreement shall be
repayable on demand and upon the expiration of five (5) calendar days after
receipt by the Borrower of such demand, the Borrower shall be deemed to have
delivered a Deemed Credit Request in the relevant amount, whereupon such amount
shall become a Revolving Credit Borrowing. Unless otherwise provided by Law, the
Administrative Agent shall not be liable or responsible in any way for the
safekeeping of any of the Collateral or for any loss or damage thereto or for
any diminution in the value thereof, or for any act or default of any
warehouseman, carrier, forwarding agency, or other Person whomsoever.
4.6 FIELD EXAMINATION AND COLLATERAL AUDIT; INSPECTION;
VERIFICATION; APPRAISALS.
During regular business hours and after reasonable notice to
the Borrower, the Administrative Agent (by any of its officers, employees,
agents, representatives, or designees, including a Lender) shall have the right,
at the Borrower's expense, to inspect the Collateral and to conduct an
asset-based field examination and collateral audit of all books, records,
journals, orders, receipts, or other correspondence related thereto (and to make
extracts or copies thereof as the Administrative Agent may request) and to
inspect the premises upon which any of the Collateral is located for the purpose
of verifying the amount, quality, quantity, value, and condition of, or any
other matter relating to, the Collateral; PROVIDED, HOWEVER, that subject to the
following proviso, the aggregate number of such examinations and collateral
audits shall not exceed four (4) in any calendar year; PROVIDED, FURTHER, that
during any period commencing upon the occurrence of an Event of Default and
continuing until such Event of Default no longer continues or has been waived in
accordance with Section 15.1 hereof, the Administrative Agent may exercise such
access and other rights, at the Borrower's expense, at any time and as often as
the Administrative Agent deems such action necessary or desirable. In addition
to such examinations and collateral audits as outlined above (and only to the
extent exercised concurrently with such inspection and to a reasonable extent),
the Administrative Agent or its designee shall have the right, upon reasonable
notice to and consultation with the Borrower, to make test verifications of the
Accounts and other Collateral and physical verifications of the Inventory and
other tangible items of the Collateral at the expense of the Borrower and in any
manner and through any commercially reasonable medium that the Administrative
Agent considers advisable, and the Borrower and each Subsidiary Guarantor agrees
to furnish all such assistance and information as the Administrative Agent may
require in connection therewith. In
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addition, the Administrative Agent shall be entitled to conduct, at the
Borrower's expense, an inventory appraisal of the Inventory of the Borrower or
each Subsidiary Guarantor; PROVIDED, HOWEVER, that subject to the following
proviso, the aggregate number of such Inventory appraisals shall not exceed two
(2) in any calendar year; PROVIDED, FURTHER, that during any period commencing
upon the occurrence of an Event of Default and continuing until such Event of
Default no longer continues or has been waived in accordance with Section 15.1
hereof, the Administrative Agent may exercise such Inventory appraisal rights,
at the Borrower's expense, at any time and as often as the Administrative Agent
deems such action necessary or desirable. Further, the Administrative Agent
shall conduct, upon a request of the Borrower if such request is reasonably
justified by a change in market conditions, an inventory appraisal at the
expense of the Borrower; PROVIDED, HOWEVER, that the Borrower shall not be
entitled to make more than two (2) such requests during any twelve (12) month
period.
4.7 REPORTING REGARDING ACCOUNTS AND SCHEDULES OF ACCOUNTS.
On or before the fifteenth (15th) calendar day of each month
from and after the date of this Agreement, the Borrower shall deliver to the
Administrative Agent, in form and substance acceptable to the Administrative
Agent, (x) a summary trial balance aged by original invoice date of the
Borrower's and each Subsidiary Guarantor's Accounts dated as of the last day of
the preceding month (and upon the Administrative Agent's request, a detailed
trial balance aged by original invoice date of all then existing Accounts
specifying the names, face value and dates of invoices for each Account Debtor
obligated on an Account so listed) and (y) a reconciliation of the Borrowing
Base with such trial balance and the Borrower's calculation of ineligible
Accounts. In addition, upon the Administrative Agent's request, the Borrower
shall furnish the Administrative Agent with copies of proof of delivery and the
original copy, if available, of all documents relating to the Accounts
including, but not limited to, repayment histories and present status reports,
and such other matters and information relating to the status of then existing
Accounts as the Administrative Agent shall reasonably request. If, upon the
occurrence of an Event of Default, the Administrative Agent so requests, the
Borrower shall execute and deliver to the Administrative Agent, on forms
supplied by the Administrative Agent and at such intervals as the Administrative
Agent may from time to time require, written assignments of all of its Accounts
after shipment of the subject goods, together with copies of invoices and/or
invoice registers related thereto. Upon request of a Lender, the Administrative
Agent shall deliver to such Lender copies of each report and all other items
delivered pursuant to this Section 4.7.
4.8 REPORTING REGARDING INVENTORY.
The Borrower shall deliver to the Administrative Agent an
Inventory listing no later than fifteen (15) days after the end of each month
based upon month-end balances reconciled to the period end balance sheet and
accompanied by an Inventory certification in form and substance acceptable to
the Administrative Agent. The Borrower's and each Subsidiary Guarantor's
Inventory shall be reported based upon reconciliation of the financial
statements to the perpetual inventory system and: (a) the Borrower shall deliver
monthly to the Administrative Agent Inventory records, broken down into such
detail and with such categories as the Administrative Agent shall require
(including, but not limited to, a report indicating active and inactive
Inventory, the type, location and total value of Inventory and all other
information deemed necessary by the Administrative Agent to determine the level
of Eligible Inventory and Ineligible Inventory), (b) the values shown on reports
of Inventory shall be at the lower of cost (determined on a specific
identification method basis) or market value determined in accordance with the
Borrower's and such Subsidiary Guarantor's usual cost accounting system,
consistently applied. Upon request of a Lender, the Administrative Agent shall
deliver to such Lender copies of each report and all other items delivered
pursuant to this Section 4.8.
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4.9 REPORTING REGARDING ACCOUNTS PAYABLE, FORM OF COLLATERAL
REPORTS.
The Borrower shall furnish the Administrative Agent with, on
or before the fifteenth (15th) day of each month from and after the date of this
Agreement, in form and substance acceptable to the Administrative Agent, a
summary accounts payable report of the Borrower's and each Subsidiary
Guarantor's accounts payable dated as of the last day of the preceding month
(and upon the Administrative Agent's request, detail on all then existing
accounts payable specifying the names, face value and dates of invoices for each
account payable). The Borrowing Base Certificate required pursuant to Section
8.1(d) hereof, and all other reports required hereunder, shall be on forms
requested or provided by the Administrative Agent and shall contain such
detailed information as is reasonably satisfactory to the Administrative Agent.
Upon request of a Lender, the Administrative Agent shall deliver to such Lender
copies of each report and all other items delivered pursuant to this Section
4.9.
4.10 SPECIAL PROPERTY.
As of the Closing Date, except as set forth in the Disclosure
Schedule, there is no Special Property. The Borrower shall disclose all Special
Property to the Administrative Agent by giving written notice to the
Administrative Agent identifying in reasonable detail the Special Property (and
stating in such notice that such Special Property constitutes "Excluded
Property") and shall provide to the Administrative Agent such other information
regarding the Special Property as the Administrative Agent may reasonably
request. From and after the Closing Date, neither the Borrower nor any
Subsidiary Guarantor shall permit to become effective in any document creating,
governing or providing for any permit, lease or license, a provision that would
prohibit the creation of a Lien on such permit, lease, license or equipment in
favor of the Administrative Agent unless the Borrower or such Subsidiary
Guarantor believes, in its reasonable judgment, that such prohibition is usual
and customary in transactions of such type.
4.11 STATUS OF COLLATERAL.
The Borrower agrees to advise the Administrative Agent
promptly, in sufficient detail, upon becoming aware of: (a) any substantial
change relating to the type, quantity or quality of the Collateral (other than
the ordinary course purchase and sale of Inventory consistent with past
practice), or (b) any event which, singly or in the aggregate with other such
events, could reasonably be expected to have a material and adverse effect on
Collateral values generally or Collateral values as to any specific type of
Collateral, or (c) any event which, singly or in the aggregate with other such
events, could reasonably be expected to adversely effect the security interests
granted to the Administrative Agent herein.
4.12 REINSTATEMENT.
The provisions of Section 4 and Section 6 of this Agreement
shall remain in full force and effect and continue to be effective in respect of
the Borrower and each Subsidiary Guarantor should any petition be filed by or
against the Borrower or such Subsidiary Guarantor for liquidation or
reorganization, should the Borrower or such Subsidiary Guarantor become
insolvent or make an assignment for the benefit of creditors or should a
receiver or trustee be appointed for all or any part of the Borrower's or such
Subsidiary Guarantor's assets or should any other Financial Impairment relating
to the Borrower or such Subsidiary Guarantor occur, and shall continue to be
effective or be reinstated, as the case may be, if at any time payment and
performance of the Secured Obligations, or any part thereof, is, pursuant to
applicable law, rescinded or reduced in amount, or must otherwise be restored or
returned by any obligee of the Secured Obligations, whether as a "voidable
preference", "fraudulent conveyance", or otherwise, all as though such payment
or performance had not been made. In the event that any payment, or any part
thereof, is rescinded, reduced, restored or returned, the Secured Obligations
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shall, to the extent permitted by applicable law, be reinstated and deemed
reduced only by such amount paid and not so rescinded, reduced, restored or
returned.
4.13 ADDITIONAL SECURITY; FURTHER ASSURANCES.
(a) ADDITIONAL SECURITY.
In the event that at any time after the Closing Date:
(i) the Borrower or any Subsidiary Guarantor or a
Person which has become a Subsidiary Guarantor owns or holds,
an interest in any real property, assets, stock, securities or
any other property or interest, located in the United States
or arising out of business conducted in or from the United
States, which is not at the time included in the Collateral,
the Borrower will notify the Administrative Agent in writing
of such event, identifying the property or interests in
question and referring specifically to the rights of the
Administrative Agent and the Lenders hereunder,
(ii) the Borrower or any Subsidiary Guarantor at any
time owns or holds an interest in any real property, assets,
stock, securities or any other property or interest, located
in the United States or arising out of business conducted in
or from the United States, (A) which is not at the time
included in the Collateral, and (B) as to which the
Administrative Agent on its own initiative or upon
instructions from the Required Lenders has notified the
Borrower that it requires that the same be included in the
Collateral, or
(iii) an Event of Default shall have occurred which
is continuing and has not been waived in accordance with
Section 15.1 hereof and the Borrower or any Subsidiary
Guarantor at such time owns or holds an interest in any real
property, assets, stock, securities or any other property or
interest, located within or outside of the United States or
arising out of business conducted from any location within or
outside the United States, which is not at the time included
in the Collateral,
the Borrower will, or will cause such Subsidiary Guarantor to, within
thirty (30) days following request by the Administrative Agent (who may
make such request on its own initiative or upon instructions from the
Required Lenders), (x) grant to the Administrative Agent for the
benefit of the Lenders additional security interests, pledges, liens
and mortgages or deeds of trust in such assets, interests or properties
of the Borrower or any Subsidiary Guarantor and (y) execute any new
documentation necessary for taking any such security interests,
pledges, liens and mortgages or deeds of trust (each an "Additional
Security Document"), subject to obtaining any required consents from
third parties (including third party lessors and co-venturers)
necessary to be obtained for the granting of a Lien on the interests or
assets involved (with the Borrower and each Subsidiary Guarantor hereby
agreeing to use reasonable best efforts to obtain such consents).
(b) ADDITIONAL SECURITY DOCUMENTS.
Each Additional Security Document shall be reasonably
satisfactory in form and substance to the Administrative Agent. In the
case of real property owned in fee, such Additional Security Documents
shall be accompanied by such Phase I environmental reports or
assessments, a mortgage policy of title insurance (subject to a
standard survey exception), and other supporting documentation
requested by and
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reasonably satisfactory in form and substance to the Administrative
Agent; and (ii) shall constitute a valid and enforceable perfected Lien
upon the interests or properties so included in the Collateral,
superior to and prior to the rights of all third Persons and subject to
no other Liens except those permitted by Section 8.3(d) hereof or
otherwise agreed by the Administrative Agent at the time of perfection
thereof, and, in the case of real property or interests therein, such
other encumbrances as may be set forth in the mortgage policy and which
shall be satisfactory in form and substance to the Administrative
Agent. The Borrower, at its sole cost and expense, will cause each
Additional Security Document or instruments related thereto to be duly
recorded or filed in such manner and in such places as are required by
law to establish, perfect, preserve and protect the Liens created
thereby required to be granted pursuant to the Additional Security
Document, and will pay or cause to be paid in full all taxes, fees and
other charges payable in connection therewith. Furthermore, the
Borrower shall cause to be delivered to the Administrative Agent such
opinions of local counsel, appraisals, title insurance, surveys,
environmental assessments, consents of landlords, lien waivers from
landlords or mortgagees, all of which documents shall be in form and
substance reasonably satisfactory to the Administrative Agent.
(c) FURTHER ASSURANCES.
The Borrower and each Subsidiary Guarantor will, and
will cause the Subsidiaries thereof to, at the expense of the Borrower,
make, execute, endorse, acknowledge, file and/or deliver to the
Administrative Agent from time to time such conveyances, financing
statements, transfer endorsements, powers of attorney, certificates,
and other assurances or instruments and take such further steps
relating to the Collateral covered by this Agreement and the other Loan
Documents (including any Additional Security Documents) as the
Administrative Agent may reasonably require. If at any time the
Administrative Agent determines, based on applicable law, that all
applicable taxes (including, without limitation, mortgage recording
taxes or similar charges) were not paid in connection with the
recordation of any mortgage or deed of trust, the Borrower shall
promptly pay the same upon demand. The Borrower will, if requested by
any Lender at any time, in order to meet any legal requirement
applicable to such Lender, provide to the Administrative Agent and the
Lenders, at the sole cost and expense of the Borrower, appraisals and
other supporting documentation relating to any mortgage hereunder, as
specified by any Lender, meeting the appraisal and other documentation
requirements of the Real Estate Reform Amendments of the Financial
Institution Reform, Recovery and Enforcement Act of 1989, as amended,
or any other legal requirements applicable to any Lender, which in the
case of any such appraisal shall be prepared by one or more valuation
firms of national standing, acceptable to the Required Lenders,
utilizing appraisal standards satisfying such Real Estate Reform
Amendments, Act or other legal requirements.
(d) ADDITIONAL AND UPDATED SEARCH REPORTS.
As promptly as practicable after the date (i) the
Borrower or any Subsidiary Guarantor has any Collateral located in a
jurisdiction as to which the Administrative Agent shall not previously
have received a search report listing all effective UCC financing
statements filed against the Borrower or any Subsidiary Guarantor in
such jurisdiction and containing copies of all such effective UCC
financing statements, (ii) any Person first becomes a Subsidiary
Guarantor and is located within the United States, or (iii) any UCC
financing statement is filed
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against the Borrower or any Subsidiary Guarantor to perfect security
interests granted pursuant to any Security Documents, the Borrower
will, at its expense, cause to be delivered to the Administrative Agent
and the Lenders search reports listing all effective UCC financing
statements filed against such Person, the Borrower or such Subsidiary
Guarantor in each applicable jurisdiction and containing copies of all
such effective UCC financing statements. In addition, whenever
requested by the Administrative Agent may order and obtain at the
Borrower's expense such new or updated title, lien, judgment, patent,
trademark and UCC financing statement searches or reports as to the
Borrower or such Subsidiary Guarantor, or any Collateral of the
Borrower or such Subsidiary Guarantor, as the Administrative Agent may
deem appropriate; PROVIDED, HOWEVER, that subject to the following
proviso, the aggregate number of such updates shall not exceed four (4)
in any calendar year; PROVIDED, FURTHER, that during any period
commencing upon the occurrence of an Event of Default and continuing
until such Event of Default no longer continues or has been waived in
accordance with Section 15.1 hereof, the Administrative Agent may
exercise such update rights, at the Borrower's expense, at any time and
as often as the Administrative Agent deems such action necessary or
desirable
(e) MODIFICATIONS OF SECURITY DOCUMENTS.
The Administrative Agent is authorized, without the
consent of any of the Lenders, to (i) enter into any modification of
any Loan Documents (including Additional Security Document) which the
Administrative Agent reasonably believes is required to conform to the
mandatory requirements of local law, or to local customs followed by
financial institutions with respect to similar collateral documents
involving property located in any particular jurisdiction, (ii) in the
case of any Additional Security Document relating to property located
in a particular jurisdiction which imposes a tax with respect to such
Additional Security Document based on the amount of the Secured
Obligations secured thereby, expressly limit the amount of such Secured
Obligations which are secured by such property to such amount as, in
the Administrative Agent's good faith judgment, is appropriate so that
the amount of such tax is reasonable in light of the estimated value of
the property located in such jurisdiction, and/or (iii) designate the
amount of title insurance coverage for any title insurance policy
provided hereunder in an amount reasonably believed by the
Administrative Agent to be representative of the fair value of the
property covered thereby.
(f) REVISED UCC ARTICLE 9.
The parties to this Agreement acknowledge that
Revised Article 9 may become effective in the State of Ohio and in
various other Enactment States on July 1, 2001, and that it may be
adopted and become effective in one or more other Enactment States at
any time thereafter. In anticipation of the effectiveness of Revised
Article 9 in any Enactment State and its resulting application to the
Loan Documents or any matters contemplated thereby, the Administrative
Agent, the Lenders, the Borrower and each Subsidiary Guarantor hereby
agree as follows:
(i) ATTACHMENT. Without otherwise limiting any other
provision of this Agreement or of Part 7 of Revised Article 9,
in applying the law of any Enactment State at any time on and
after the Enactment Date with respect to such Enactment State
(i) the Collateral includes, without limitation, each of the
following categories as defined by Revised Article 9, and all
property of the Borrower included therein at any time owned or
acquired: goods (including, without limitation, inventory,
equipment, fixtures and accessions); instruments (including,
without limitation, promissory notes); documents of title;
accounts; chattel paper (whether tangible or electronic);
deposit accounts; letter-of- credit rights; commercial tort
claims (to the extent described in any notice delivered by the
Borrower); investment property; general intangibles; leases;
money; supporting obligations; and proceeds; in each case
wherever located, and
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whenever owned or acquired, and (ii) the Administrative
Agent's lien in all such property created under this Agreement
(whether pursuant to Existing Article 9 or other requirement
of law) on the Closing Date shall continue in full force and
effect on and under and pursuant to Revised Article 9 and
other requirements of law.
(ii) PERFECTION BY FILING. The Administrative Agent
may, at any time and from time to time, file financing
statements, continuation statements, and amendments thereto
that describe the Collateral as "all assets" of the Borrower
and each of the Subsidiary Guarantors, or words of similar
effect, and which contain any other information required
pursuant to Revised Article 9 for the sufficiency of filing
office acceptance of any financing statement, continuation
statement, or amendment, and the Borrower and each Subsidiary
Guarantor agree to furnish any such information to the
Administrative Agent promptly upon request. Any such financing
statement, continuation statement, or amendment may be signed
by the Administrative Agent on behalf of the Borrower or such
Subsidiary Guarantor and may be filed at any time in any
jurisdiction whether or not Revised Article 9 is then in
effect in that jurisdiction.
(iii) OTHER PERFECTION METHODS. The Borrower and each
Subsidiary Guarantor shall, at any time and from time to time,
whether or not Revised Article 9 is in effect in any
particular jurisdiction, take such steps as the Administrative
Agent may reasonably request for the Administrative Agent (i)
to obtain an acknowledgment, in form and substance reasonably
satisfactory to the Administrative Agent, of any bailee having
possession of any of the Collateral, stating that the bailee
holds such Collateral for the Administrative Agent, (ii) to
obtain "control" of any investment property, deposit accounts,
letter-of-credit rights, or electronic chattel paper (as such
terms are defined by Revised Article 9 with corresponding
provisions thereof defining what constitutes "control" for
such items of Collateral), with any agreements establishing
control to be in form and substance reasonably satisfactory to
the Administrative Agent, and (iii) otherwise to insure the
continued perfection and priority of the Administrative
Agent's security interest in any of the Collateral and of the
preservation of its rights therein, whether in anticipation of
or following the effectiveness of Revised Article 9 in any
jurisdiction. If the Borrower or any Subsidiary Guarantor
shall at any time, whether or not Revised Article 9 is in
effect in any particular jurisdiction, acquire a "commercial
tort claim" (as such term is defined in Revised Article 9) in
excess of $250,000, the Borrower or such Subsidiary Guarantor
shall promptly notify the Administrative Agent thereof in a
writing, therein providing a reasonable description and
summary thereof, and upon delivery thereof to the
Administrative Agent, the Borrower or such Subsidiary
Guarantor shall be deemed to thereby grant to the
Administrative Agent (and the Borrower or such Subsidiary
Guarantor hereby grants to the Administrative Agent) a
security interest and lien in and to such commercial tort
claim and all proceeds thereof, all upon the terms of and
governed by this Agreement.
(iv) SAVINGS CLAUSE. Nothing contained in this
Section 4.13 shall be construed to narrow the scope of the
Administrative Agent's Liens or the perfection or priority
thereof or to impair or otherwise limit any of the rights,
powers, privileges, or remedies of the Administrative Agent
under the Loan Documents.
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4.14 MATERIAL RECOVERY EVENT.
The Borrower will promptly (and in any event within 10 days)
furnish to the Administrative Agent written notice of any Material Recovery
Event. If any Material Recovery Event results in a Remittance of Net Cash
Proceeds (whether in the form of insurance proceeds, a condemnation award or
otherwise), a portion or all of which is required to be applied as a prepayment
of the Loans or to the rebuilding or restoration of any affected property
pursuant to Section 2.9(d)(i) hereof, the Administrative Agent is authorized to
collect such Net Cash Proceeds and, if received by the Borrower or any
Subsidiary Guarantor, the Borrower will pay over or cause to be paid over such
Remittance of Net Cash Proceeds to the Administrative Agent as required by
Section 5.2 hereof. Notwithstanding the foregoing, in the event any property
suffers a Material Recovery Event and (i) no Default or Event of Default has
occurred which is continuing and not waived in accordance with Section 15.1
hereof and (ii) the Borrower notifies the Administrative Agent and the Lenders
in writing that the Borrower or any Subsidiary Guarantor intend to rebuild or
restore the affected property, that such rebuilding or restoration can be
accomplished within Twelve (12) months out of such Remittance of Net Cash
Proceeds and other funds available to the Borrower or the Subsidiary Guarantors,
then no such prepayment of the Loans shall be required if the Borrower
immediately deposits or causes to be deposited such Remittance of Net Cash
Proceeds in a cash collateral deposit account over which the Administrative
Agent shall have sole dominion and control, and which shall constitute part of
the Collateral hereunder and may be applied as provided in Section 10.5(d) of
this Agreement if an Event of Default occurs which is continuing and has not
been waived in accordance with Section 15.1 hereof. So long as no Default or
Event of Default has occurred which is continuing and has not been waived in
accordance with Section 15.1 hereof, the Administrative Agent is authorized to
disburse amounts from such cash collateral deposit account to or at the
direction of the Borrower for application to the costs of rebuilding or
restoration of the affected property. Any amounts not so applied to the costs of
rebuilding or restoration shall be applied to the prepayment of the Obligations
as provided in Section 5.3 of this Agreement.
4.15 TERMINATION OF SECURITY INTEREST; RELEASE OF COLLATERAL.
(a) PAYMENT IN FULL OF THE SECURED OBLIGATIONS.
Upon the payment in full of all of the Secured Obligations
hereunder, the termination of the LC Exposure of the Lenders hereunder, and the
termination of the Commitments of the Lenders and the Designated Letter of
Credit Issuer hereunder: (a) the security interests and the other Liens and
licenses granted to the Administrative Agent under this Agreement and under any
other Loan Documents shall terminate, (b) all rights to the Collateral shall
revert to the Borrower or the Subsidiary Guarantor with rights therein, (c) the
Administrative Agent will, at the Borrower's expense, (x) execute and deliver to
the Borrower all documents as the Borrower may reasonably request to evidence
the termination of such security interests and the release of such Collateral,
and (y) take such other actions with respect to this Agreement, the other Loan
Documents, the Liens created thereby, and the Secured Obligations as the
Borrower shall reasonably request, and (d) this Agreement and all of the other
Loan Documents will be terminated, and the Borrower will have no further
liabilities or obligations thereunder (except any liabilities and/or obligations
which under the terms of this Agreement or any Loan Document survive termination
thereof); PROVIDED, HOWEVER, that, in the event all Secured Obligations other
than the Designated Hedge Obligations owing to the Lenders are paid and the
Commitments of the Lenders and the Designated Letter of Credit Issuer terminated
but the Designated Hedge Obligations remain outstanding, the foregoing
termination, reversions and actions will be taken only with respect to the
Secured Obligations other than the Designated Hedge Obligations and the security
interests securing the Designated Hedge Obligations shall continue hereunder
pursuant to and subject to the terms hereof.
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(b) PARTIAL RELEASES.
Each of the Lenders hereby irrevocably authorize the
Administrative Agent, at its option and in its discretion, to release any Lien
granted to or held by the Administrative Agent upon any property covered by this
Agreement or the other Loan Documents which: (i) constitutes property being sold
or disposed of and the Borrower certifies to the Administrative Agent that the
sale or disposition is made in compliance with the provisions of this Agreement
(and the Administrative Agent may rely in good faith conclusively on any such
certificate, without further inquiry), (ii) constitutes property leased to the
Borrower or a Subsidiary Guarantor under a lease which has expired or been
terminated in a transaction permitted under this Agreement or is about to expire
and which has not been, and is not intended by the Borrower or such Subsidiary
Guarantor, as the case may be, to be renewed or extended, (iii) constitutes
property covered by Permitted Liens with lien priority superior to those Liens
in favor or for the benefit of the Lenders or constitutes property as to which
the Required Lenders have otherwise consented in writing to the sale thereof.
SECTION 5 LOCKBOXES AND BLOCKED ACCOUNTS; PROCEEDS OF ACCOUNTS AND
INVENTORY; APPLICATION
5.1 LOCKBOXES AND BLOCKED ACCOUNTS; RECEIPT IN TRUST.
(a) MAINTENANCE OF LOCKBOXES AND BLOCKED ACCOUNTS.
On or prior to the Closing Date, the Borrower and
each Subsidiary Guarantor shall rent, and shall hereafter continue to
rent, one or more post office boxes (the "Lockboxes") in the name of
the Borrower or of such Subsidiary Guarantor for the sole purpose of
receiving Collections from Account obligors of the Borrower or such
Subsidiary Guarantor, as the case may be, and such other post office
boxes for Collections as the Administrative Agent, upon request of the
Borrower, may approve from time to time. The Borrower and each
Subsidiary Guarantor shall establish and maintain Deposit Accounts as
set forth in the Disclosure Schedule with one or more Lockbox Banks
into which all such Collections from the applicable Lockbox shall be
deposited and into which all Remittances of Net Cash Proceeds and any
Intercompany Payments shall be deposited. The Borrower and each
Subsidiary Guarantor shall have entered into: (x) one or more
agreements with each Lockbox Bank relating to the Lockbox maintained by
the Borrower or such Subsidiary Guarantor with such Lockbox Bank and
(y) one or more agreements with each Lockbox Bank relating to the
Blocked Account maintained by the Borrower or such Subsidiary Guarantor
with such Lockbox Bank, each such agreement to be in form and substance
satisfactory to the Administrative Agent. The Disclosure Schedule shall
set forth a list of (i) all present Lockboxes, Deposit Accounts, and
any other Permitted Account maintained by the Borrower or any
Subsidiary Guarantor, (ii) the name and address of the depository,
(iii) the account numbers maintained with such depository, (v) a
contact at such depository and (vi) a list describing all of the
agreements establishing such Lockboxes, Deposit Accounts and Permitted
Accounts.
(b) DEPOSIT ACCOUNT CONTROL LETTER.
The Borrower and each Subsidiary Guarantor shall have
entered into a letter agreement with each Lockbox Bank relating to
rights of the Administrative Agent with respect to the Lockbox and the
Blocked Account maintained by the Borrower or such Subsidiary Guarantor
with such Lockbox Bank (a "Deposit Account Control Letter"), each such
Deposit Account Control Letter to be in form and substance satisfactory
to the Administrative Agent. All Collections from Account Debtors of
the
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Borrower or such Subsidiary Guarantor sent directly to the Lockboxes
shall be deposited into the Blocked Account or the Cash Concentration
Account in accordance with the terms of the applicable Deposit Account
Control Letter. Each Subsidiary Guarantor will immediately deposit all
Remittances of Net Cash Proceeds, in the identical form in which such
Remittances of Net Cash Proceeds were made (except for any necessary
endorsements) into the Blocked Account in accordance with the terms of
the applicable Deposit Account Control Letter. To the extent
commercially reasonable to do so, each such Subsidiary Guarantor shall
instruct all payees of Remittances of Net Cash Proceeds to pay such
Remittances of Net Cash Proceeds to the Blocked Account of such
Subsidiary Guarantor.
At all times, each Lockbox Bank, and to the extent
not inconsistent with the applicable Deposit Account Control Letter,
the Administrative Agent on behalf of the Lenders, shall have sole
access to the Lockbox maintained with such Lockbox Bank. The Borrower
and each Subsidiary Guarantor shall take all action necessary to grant
each Lockbox Bank and, to the extent not inconsistent with the
applicable Deposit Account Control Letter, the Administrative Agent
such sole access. At no time shall the Borrower or the Subsidiary
Guarantors or their agents remove any item from any Lockbox without the
Administrative Agent's prior written consent. The Borrower and each
Subsidiary Guarantor shall notify all customers or Account Debtors
thereof to pay all Collections to the Lockboxes (such notices to be in
such form and substance as the Administrative Agent may require from
time to time), and shall not instruct any Account Debtor to pay any
Collection to any other place or address without the Administrative
Agent's prior written consent. If the Borrower or any Subsidiary
Guarantor should neglect or refuse to notify any customer or Account
Debtor to pay any Collection to the Lockbox applicable thereto, the
Administrative Agent shall be entitled to make such notification. To
the extent not inconsistent with the applicable Deposit Account Control
Letter, the Borrower and each Subsidiary Guarantor hereby grant to the
Administrative Agent an irrevocable power of attorney, coupled with an
interest, to take in the Borrower's name or such Subsidiary Guarantor's
name all action necessary to: (i) grant the Administrative Agent sole
access to the Lockbox, (ii) after the occurrence of an Event of Default
which is continuing and which has not been waived in accordance with
Section 15.1 of this Agreement), contact Account Debtors to pay any
Collections to the Lockbox or for any other reason, and (iii) endorse
each Collection delivered to the Lockbox for deposit to the Blocked
Account. The Borrower and each Subsidiary Guarantor agree, and the
Lockbox Banks shall acknowledge and agree, in a manner satisfactory to
the Administrative Agent, that, so long as the Secured Obligations are
outstanding and the Commitments of the Lender are not terminated: (i)
all Collections deposited in the Blocked Accounts are the sole and
exclusive property of the Administrative Agent for the benefit of the
Lenders and (ii) such Lockbox Banks shall have no right to setoff
(except as the Administrative Agent, in its sole discretion, may
expressly agree upon in writing) against the Blocked Accounts. Neither
the Borrower nor any Subsidiary Guarantor shall have any interest
therein or control over such funds.
(c) RECEIPT IN TRUST.
Any Collections, Remittances of Net Cash Proceeds or
Intercompany Payments received directly by the Borrower or any
Subsidiary Guarantor shall be deemed held by the Borrower or such
Subsidiary Guarantor, as the case may be, in trust and as fiduciary for
the Administrative Agent for the benefit of the Lenders. The Borrower
shall immediately deposit any such Collections, Remittance of Net Cash
Proceeds and Intercompany Payments received by the Borrower, in its
original form, into the Cash Concentration Account. Each Subsidiary
Guarantor shall immediately deposit any such Collections and any
Remittance of Net Cash Proceeds received by such Subsidiary
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Guarantor, in its original form, into the Blocked Account applicable to
such Subsidiary Guarantor. Pending such deposit, the Borrower and each
such Subsidiary Guarantor agree that it will not commingle any such
Collection, Remittance of Net Cash Proceeds or Intercompany Payment
with any of its other funds or property, but will hold such Collection,
Remittance of Net Cash Proceeds or Intercompany Payment separate and
apart therefrom in trust and as fiduciary for the Administrative Agent
until deposit is made into the Blocked Account or Cash Concentration
Account, as the case may be.
5.2 CASH CONCENTRATION ACCOUNT; SECURITY INTEREST.
NCB will establish and maintain at NCB in the name of NCCF a
concentration account which will constitute the Cash Concentration Account of
the Administrative Agent with respect to the Borrower. In accordance with the
terms of the applicable Deposit Account Control Letters, each Lockbox Bank will
wire, or otherwise transfer immediately available funds in a manner satisfactory
to the Administrative Agent, all Collections into the Cash Concentration Account
on a daily basis as soon as good funds in respect to such Collection are
collected. The Borrower will immediately deposit all Remittances of Net Cash
Proceeds received directly by the Borrower, in the identical form in which such
Remittances of Net Cash Proceeds were made (except for any necessary
endorsements), into the Cash Concentration Account in accordance with the terms
of the Deposit Account Control Letter applicable thereto. To the extent
commercially reasonable to do so, the Borrower shall instruct all payees of
Remittances of Net Cash Proceeds to pay such Remittances of Net Cash Proceeds to
the Cash Concentration Account. All funds in the Cash Concentration Account
shall be deemed to be the sole and exclusive property of the Administrative
Agent for the benefit of the Lenders and shall be subject only to the signing
authority designated from time to time by the Administrative Agent. The
Administrative Agent shall have sole access to the Cash Concentration Account,
and neither the Borrower nor any Subsidiary Guarantor shall have any access
thereto.
The Borrower and each Subsidiary Guarantor hereby grant to the
Administrative Agent a security interest in all funds held in any Lockbox with
respect thereto and, to the extent funds in the Cash Concentration Account or
any Blocked Account were to be construed to be the property of the Borrower or
such Subsidiary Guarantor, in all funds held in the Cash Concentration Account
or such Blocked Account as security for the Secured Obligations. Neither the
Cash Concentration Account nor any Blocked Account shall be subject to any
deduction, set-off, banker's lien or any other right in favor of any Person or
entity other than the Administrative Agent or as provided in the applicable
Deposit Account Control Letter.
5.3 APPLICATION OF DEPOSITS IN CASH CONCENTRATION ACCOUNT
TO BORROWER'S LOAN ACCOUNT.
Prior to the occurrence of an Event of Default and after the
occurrence of an Event of Default which has been waived in accordance with
Section 15.1 hereof, deposits of Collections, Remittances of Net Cash Proceeds
and Intercompany Payments from Subsidiary Guarantors to the Cash Concentration
Account shall be credited to the Borrower as follows: (i) to the outstanding
principal amount of any Revolving Credit Loans of the Borrower: (A) first, to
Revolving Credit Loans comprised of Permitted Special Advances to the extent
then due and payable pursuant to Section 2.9(b) hereof, (B) second, to Revolving
Credit Loans comprised of Swing Line Settlement Loans, and (C) third, to the
ratable payment of such other Revolving Credit Loans in such order as the
Administrative Agent may choose in its sole discretion; PROVIDED, HOWEVER that,
prior to the occurrence of an Event of Default hereunder which is continuing and
has not been waived in accordance with Section 15.1 hereof, all such
applications shall be deemed, for purposes of calculating the outstanding
balance of Fixed Asset Component Loans, to have been applied to Revolving Credit
Loans other than Fixed Asset Component Loans EXCEPT to the extent required by
Section 2.9(d) hereof with respect to mandatory prepayments
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from Remittances of Net Cash Proceeds and mandatory prepayments required by
Section 2.9(c) hereof by reason of reductions in the Fixed Asset Component of
the Borrowing Base; PROVIDED, FURTHER, that, the Administrative Agent will use
reasonable efforts to avoid applications that would cause early prepayment of a
LIBOR Rate Borrowing prior to expiration of its applicable Interest Period, (ii)
SECOND, as cash collateral security against the aggregate undrawn amount of any
Letter of Credit outstanding, and (iii) LAST, to the extent of any excess not so
credited, such deposits shall remain in the Cash Concentration Account for
application against subsequent Loans to the Borrower and as collateral security
for the Secured Obligations (whether then or thereafter outstanding) of the
Borrower; provided, FURTHER, in the case of deposits comprised of Remittances of
Net Cash Proceeds from Priority Term B Collateral, such deposits shall in all
cases be applied (x) directly to the ratable payment of the Term B Loans held by
the Term B Lenders as required by Section 2.9(d) hereof and (y) if any excess
remains after repayment in full of the aggregate outstanding Term B Loans, for
application on behalf of the Borrower pursuant to Section 5.1(c) to Revolving
Credit Loans.
Upon the occurrence of an Event of Default which is continuing
and has not been waived in accordance with Section 15.1, all such deposits to
the Cash Concentration Account shall be credited until payment in full of all
Secured Obligations to the Borrower as follows: (i) FIRST, to the payment of any
fees, expenses or indemnities due and payable by the Borrower to the
Administrative Agent hereunder or under any of the other Loan Documents; (ii)
SECOND, to the payment of any fees, expenses or indemnities due and payable by
the Borrower to the Designated Letter of Credit Issuers hereunder or under any
of the other Loan Documents; (iii) THIRD, to the ratable payment of any fees,
expenses or indemnities due and payable by the Borrower to the Lenders hereunder
or under any of the other Loan Documents; (iv) FOURTH, to the ratable payment of
interest due on the Loans made to the Borrower; (v) FIFTH, to the outstanding
principal amount of any other outstanding Obligations of the Borrower (other
than in respect of the aggregate undrawn amount of any Letter of Credit
outstanding for the account of the Borrower) as follows: (A) first, to Revolving
Credit Loans comprised of Permitted Special Advances until paid in full, (B)
second, to Revolving Credit Loans comprised of Swing Line Settlement Loans until
paid in full, and (C) third, to the ratable payment of such other Obligations
(other than the Term B Loans) in such order as the Administrative Agent may
choose in its sole discretion subject to Section 10.5(d) hereof; (vi) SIXTH, as
cash collateral security against the aggregate undrawn amount of any Letter of
Credit outstanding for the account of the Borrower, (vii) SEVENTH, to any other
Secured Obligations (whether then or thereafter reasonably anticipated to be
outstanding) of the Borrower (other than Term B Loans), and (viii) LAST, upon
payment in full to all such Secured Obligations (other than Term B Loans) and
the termination of all Revolving Credit Commitments for Revolving Credit Loans
and the termination of all LC Exposure, to the ratable payment of Term B Loans;
PROVIDED, HOWEVER, that, in the case of deposits comprised of Remittances of Net
Cash Proceeds from Priority Term B Collateral, such deposits shall in all cases
be applied first to the ratable payment of the Term B Loans held by the Term B
Lenders and (y) if any excess remains after repayment in full of the aggregate
outstanding Term B Loans, for application on behalf of the Borrower pursuant to
Section 5.1(c) to Revolving Credit Loans.
5.4 APPLICATION OF COLLECTIONS AND REMITTANCES OF NET CASH
PROCEEDS OF SUBSIDIARY GUARANTORS.
Pursuant to the applicable Deposit Account Control Letter,
deposits of Collections and Remittances of Net Cash Proceeds to the Blocked
Account of each Subsidiary Guarantor shall be automatically swept, at the close
of each Business Day, to the Cash Concentration Account of the Borrower where
such deposits shall be applied as follows: (i) FIRST, to the payment of any
outstanding balance of Intercompany Loans to such Subsidiary Guarantor from the
Borrower thereof or to the payment of consolidated tax liabilities of the
Borrower attributable to such Subsidiary Guarantor (as permitted by Section
8.3(b) hereof) and (ii) SECOND, to the extent of any excess not so credited to
outstanding Intercompany Loans, credited against obligations of
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such Subsidiary Guarantor under its Subsidiary Guaranty hereunder, whether such
obligations are then due or not due (I.E. to the extent not yet due, such
amounts shall be deemed prepayments of any such obligations to the Borrower
which shall be credited to the Loan Account balance of the Borrower in
accordance with Section 5.3 hereof), and (iii) THIRD, to the extent of any
excess not so applied, such deposits shall remain in the Cash Concentration
Account of the Borrower for application against subsequent Intercompany Loans by
the Borrower to such Subsidiary Guarantor or subsequent Loan Account balances of
the Borrower thereafter outstanding and in each case as cash collateral
therefor.
5.5 CREDITING OF COLLECTIONS, REMITTANCES OF NET CASH PROCEEDS AND
INTERCOMPANY PAYMENTS.
For the purpose of calculating interest on the Obligations and
determining the aggregate Loans outstanding and resulting borrowing base
availability for additional Loans hereunder, all Collections, Remittances of Net
Cash Proceeds and Intercompany Payments shall be credited to the Borrower on the
Business Day on which the Administrative Agent has received notice of the
deposit of the proceeds of such Collections, Remittances of Net Cash Proceeds
and Intercompany Payments into the Cash Concentration Account, and is in good
funds with respect thereto, prior to 2:00 p.m. (local time at the Payment Office
of the Administrative Agent). From time to time, upon advance written notice to
the Borrower, the Administrative Agent may adopt such additional or modified
regulations and procedures as it may deem reasonable and appropriate with
respect to the operation of the Cash Concentration Account and not inconsistent
with the terms of this Agreement.
5.6 COSTS OF COLLECTION.
All reasonable costs of collection of the Borrower's Accounts,
including out-of-pocket expenses, administrative and record-keeping costs,
reasonable attorney's fees, and all service charges and costs related to the
establishment and maintenance of the Lockbox and the Cash Concentration Account,
shall be the sole responsibility of the Borrower, whether the same are incurred
by the Administrative Agent or the Borrower, and the Administrative Agent, in
its sole discretion, may charge the same against the Borrower and/or any account
maintained by the Borrower with the Administrative Agent and the same shall be
deemed part of the Obligations hereunder. The Borrower hereby indemnifies and
holds the Administrative Agent harmless from and against any loss or damage with
respect to any Collection or Remittance of Net Cash Proceeds deposited in the
Cash Concentration Account which is dishonored or returned for any reason. If
any Collection or Remittance of Net Cash Proceeds deposited in the Cash
Concentration Account is dishonored or returned unpaid for any reason, the
Administrative Agent, in its sole discretion, may charge the amount of such
dishonored or returned Collection or Remittance of Net Cash Proceeds directly
against the Borrower and/or any account maintained by the Borrower with the
Administrative Agent and such amount shall be deemed part of the Obligations
hereunder. The Administrative Agent shall not be liable for any loss or damage
resulting from any error, omission, failure or negligence on the part of the
Administrative Agent under this Agreement, except losses or damages resulting
from the Administrative Agent's gross negligence or willful misconduct as
determined by a final judgment of a court of competent jurisdiction.
5.7 RETURN OF FUNDS.
Upon the payment in full of all Secured Obligations (other
than continuing Indemnification Obligations) and the termination of the
aggregate Commitments and LC Exposure hereunder: (a) the Administrative Agent's
security interests and other rights in funds in the Cash Concentration Account
under Section 5.2 of this Agreement shall terminate, (b) all rights to such
funds shall revert to the Borrower and each of the Subsidiary Guarantors, as
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applicable, and (c) the Administrative Agent will, at the Borrower's expense,
take such steps as the Borrower or such Subsidiary Guarantor may reasonably
request to evidence the termination of such security interests and to effect the
return to the Borrower or such Subsidiary Guarantor of such funds.
5.8 NOTICE TO ACCOUNT DEBTORS.
The Borrower hereby authorizes the Administrative Agent, now
and at any time or times hereafter, in accordance with the powers conferred upon
the Administrative Agent pursuant to Section 5 or any other applicable provision
of this Agreement, to: (a) notify any or all Account Debtors that the Accounts
have been assigned to the Administrative Agent, for the ratable benefit of the
Administrative Agent, the Lenders and the other holders of the Secured
Obligations, and that the Administrative Agent has a security interest therein,
and (b) direct such Account Debtors to make all payments due from them to the
Borrower upon the Accounts directly to the Administrative Agent or to a Lockbox
designated by the Administrative Agent; PROVIDED, HOWEVER, that the
Administrative Agent shall not exercise any of its rights under this sentence
unless an Event of Default has occurred which is then continuing and which has
not been waived in accordance with Section 15.1 hereof and unless the
Administrative Agent concurrently notifies the Borrower of its exercise of such
rights. The Administrative Agent shall promptly furnish the Borrower with a copy
of any such notice sent. Any such notice, in the Administrative Agent's sole
discretion, may be sent on the Borrower's stationery, in which event the
Borrower shall co-sign such notice with the Administrative Agent.
SECTION 6 REPRESENTATIONS, WARRANTIES AND COVENANTS RELATING TO
COLLATERAL.
6.1 GENERAL REPRESENTATIONS AS TO COLLATERAL.
The Borrower and each of the Subsidiary Guarantors represent
that the Disclosure Schedule sets forth: (a) the place of incorporation of the
Borrower and each of the Subsidiary Guarantors, the principal place of business
of the Borrower and each of the Subsidiary Guarantors and the office where the
chief executive offices and accounting offices of the Borrower and the
Subsidiary Guarantors are located, (b) the office where the Borrower and each of
the Subsidiary Guarantors keep their respective records concerning the Accounts
and General Intangibles, (c) the location of the Borrower's and each of the
Subsidiary Guarantor's registered office and all locations of the Borrower's and
each of the Subsidiary Guarantor's operations and whether such locations are
owned or leased, (d) all locations at which any Inventory, Equipment or other
tangible Collateral of the Borrower and each of the Subsidiary Guarantors are
located, including, without limitation, the location and name of any
warehousemen, bailee, processor or consignee at which Collateral is located
(with respect to Collateral not located at a specified main location owned by
the Borrower or the Subsidiary Guarantors, the Disclosure Schedule shall
expressly indicate to the reasonable satisfaction of the Administrative Agent
(1) the type of location of the Collateral (e.g., warehouse, bailee, processor,
consignee or otherwise); (2) the type of Collateral located at each such
location (e.g., whether the Collateral is Equipment, Inventory or other tangible
Collateral) and which of the Borrower or such Subsidiary Guarantors own such
Collateral; (3) whether the Collateral is segregated or otherwise identifiable
at each such location (and if not segregated at such locations or readily
identifiable from the records of such warehousemen, bailee, processor consignee,
specifying the manner of identification); and (4) the approximate dollar value
of the Collateral located at each such location), (e) the locations and
addresses of all owned or leased real property of the Borrower and each of the
Subsidiary Guarantors, including the name of the record owner of such property
and its respective legal description, (f) the locations of the Borrower's and
each of its Subsidiary Guarantor's registered offices, other offices and places
of business during the five (5) years prior to the Closing Date, (g) all trade
names, assumed names, fictitious names and other names used by the Borrower and
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each of the Subsidiary Guarantors during the five (5) years prior to the Closing
Date, (h) all Deposit Accounts, Securities Accounts and Commodity Accounts
maintained by the Borrower or any Subsidiary Guarantor, and (i) all Special
Property. Other than as set forth in the Disclosure Schedule attached hereto
neither the Borrower nor any of the Subsidiary Guarantors keeps any Collateral
owned by them on any property not owned in fee simple by the Borrower or such
Subsidiary, as the case may be or subject to a mortgage or other Lien.
6.2 TITLE TO COLLATERAL; LIENS; TRANSFERS.
The Borrower and each of the Subsidiary Guarantors have good
and indefeasible title to and ownership of the Collateral, free and clear of all
Liens, except for Liens permitted under Section 8.3(d). Except as permitted by
Section 8.3(d) or 8.3(a) hereof or as otherwise provided herein or in any other
Loan Document, the Borrower and the Subsidiary Guarantors shall not, and shall
not permit any of their Subsidiaries to, encumber, pledge, mortgage, grant a
security interest in, assign, sell, lease or otherwise dispose of or transfer,
whether by sale, merger, consolidation, liquidation, dissolution or otherwise,
any of the Collateral.
6.3 LIEN PERFECTION AND PRIORITY.
From and after the Closing Date, by reason of the filing of
financing statements, assignments of financing statements and termination
statements in all requisite governmental offices, this Agreement and the other
Loan Documents will create and constitute a valid and perfected first priority
security interest (except as permitted by this Agreement or the other Loan
Documents) in and Lien on that portion of the Collateral which can be perfected
by such filing and by the execution and delivery of this Agreement and the other
Loan Documents, which security interest will be enforceable against the Borrower
and the Subsidiary Guarantors and all third parties as security for payment of
all Secured Obligations. From and after the Closing Date, by reason of 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, this Agreement and the other Loan Documents
will create and constitute a valid and perfected first priority security
interest (except as permitted by this Agreement or the other Loan Documents) in
and Lien on that portion of the Collateral which can be perfected by such
possession and endorsement and by the execution and delivery of this Agreement
and the other Loan Documents, which security interest will be enforceable
against the Borrower and the Subsidiary Guarantors and all third parties as
security for payment of all Secured Obligations. From and after the Closing
Date, by reason of the filing of the mortgages and deeds of trust, this
Agreement and the other Loan Documents will create and constitute a valid first
priority Lien on the Collateral that is real property except as set forth on the
Disclosure Schedule.
6.4 COVENANTS REGARDING LIEN WAIVERS, LANDLORD, MORTGAGEE, BAILEE
AND PROCESSOR NOTICES AND WAIVERS, WAREHOUSE RECEIPTS.
The Borrower and each of the Subsidiary Guarantors will not
create, permit or suffer to exist, and will defend the Collateral against and
take such other action as is necessary to remove, any Lien, claim or right, in
or to the Collateral, other than the Liens permitted by Section 8.3(d) of this
Agreement, and will defend the right, title and interest of the Administrative
Agent in and to any of the Borrower's or such Subsidiary Guarantors' rights to
the Collateral and in and to the Proceeds and Products thereof against the
claims and demands of all Persons whomsoever.
In the event any Inventory or Equipment of the Borrower or any
of the Subsidiary Guarantors is at any time located on any real property not
owned by the Borrower or such Subsidiary Guarantor, or is at any time located on
any real property owned by Borrower or such
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Subsidiary Guarantor which is subject to a mortgage or other Lien other than in
favor of the Administrative Agent, the Borrower or such Subsidiary Guarantor, as
the case may be, will obtain and maintain in effect at all times while any such
Inventory or Equipment is so located valid and effective Lien waivers, in form
and substance satisfactory to the Administrative Agent, whereby each owner,
landlord and mortgagee, and such other mortgagees from time to time consented to
by the Required Lenders, having an interest in such real property shall disclaim
any interest in such Inventory or Equipment, as the case may be, and shall agree
to allow the Administrative Agent reasonable access to such real property in
connection with any enforcement of the security interest granted hereunder.
Further, neither the Borrower nor any Subsidiary Guarantor
shall store any Inventory with a bailee, processor, warehouseman or consignee or
similar party under arrangements existing as of the Closing Date without the
Administrative Agent's prior written consent (which consent shall not to be
unreasonably withheld or delayed and shall be evidenced by the acceptance of the
Disclosure Schedule) and, to the extent the Administrative Agent gives such
consent, the Borrower or such Subsidiary shall use all commercially reasonable
efforts pursued diligently to cause each such bailee, processor, warehouseman or
similar party (other than a consignee) to issue and deliver to the
Administrative Agent, in form and substance satisfactory to the Administrative
Agent, bailee or consignee waivers or warehouse receipts therefor in the
Administrative Agent's name, as the case may be; PROVIDED, HOWEVER that, prior
to the occurrence of an Event of Default which is continuing and has not been
waived in accordance with Section 15.1 hereof, such requirements will not be
applicable, with respect to any existing location where the value of Inventory
(valued at the lower of cost (determined on a specific identification method
basis) or market value), and excluding from such calculation the value of any
consigned Inventory, is less than $100,000.
With respect to Inventory on consignment delivered to a
consignee, the Borrower or such Subsidiary will concurrently with such delivery:
(x) give all appropriate notices required by the UCC to any secured parties of
such consignee having a blanket security interest against the assets of the
consignee or a security interest in Inventory of the consignee prior to delivery
of any item of Inventory to such consignee, (y) file all appropriate financing
statements against such consignee prior to such delivery of any item of
Inventory to the consignee and (z) deliver to the Administrative Agent, in form
and substance satisfactory to the Administrative Agent, consignee waivers
therefor in favor of the Administrative Agent, PROVIDED, HOWEVER that, prior to
the occurrence of an Event of Default which is continuing and has not been
waived in accordance with Section 15.1 hereof, such requirements will not be
applicable other than with respect to consignments of Inventory to Xxxxxxxxx
Xxxx Company and Xxxxxxxxx Manufacturing, Inc. and then only as to Inventory
being delivered after the Effective Date of this Agreement; provided, however,
that, prior to an Event of Default, the Borrower or such Subsidiary, as the case
may be, shall use all commercially reasonable efforts pursued diligently to
cause each consignee which is holding Inventory having a value (valued at the
lower of cost (determined on a specific identification method basis) or market
value), greater than $100,000 to issue and deliver to the Administrative Agent,
in form and substance satisfactory to the Administrative Agent, consignee
waivers.
In addition, the Borrower shall notify the Administrative
Agent within thirty (30) days: (i) after becoming aware, that the value (valued
at the lower of cost (determined on a specific identification method) or market
value) of Inventory at any off site location exceeds $100,000 and (ii) after
moving any Inventory from a location at which the Administrative Agent has
received such waivers and has filed financing statements to a location where
either of such required actions have not been accomplished except no such
notification shall be required where the value of Inventory (valued at the lower
of cost (determined on a specific identification method basis) or market value)
or Equipment (valued at a Force Liquidation Value basis) moved
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is less than $50,000 until the aggregate Inventory or Equipment value so moved
to all such locations exceeds $250,000.
After the Closing Date, no Inventory will be stored with a
bailee, processor, warehouseman or consignee or similar party under arrangements
established after the Closing Date, without the Administrative Agent's prior
written consent unless such bailee, processor, warehouseman or similar party
issues and delivers to the Administrative Agent, in form and substance
satisfactory to the Administrative Agent, bailee or consignee waivers or
warehouse receipts in the Administrative Agent's name, as the case may be. In
addition, after the Closing Date, no Inventory will be stored with a bailee,
processor, warehouseman or consignee or similar party under arrangements
existing as of the Closing Date from which such bailee or consignee waivers or
warehouse receipts in the Administrative Agent's name have not been obtained
other than: (i) storage of Inventory whose value (valued at the lower of cost
(determined on a specific identification method basis) or market value) is not
in excess of the value of Inventory previously stored at such site consistent
with past practices and (ii) such storage is required by commercially reasonable
and good faith business needs of the Borrower or the applicable Subsidiary
Guarantor.
6.5 REPRESENTATIONS AND WARRANTIES REGARDING ACCOUNTS.
The Borrower and each Subsidiary Guarantor agree and represent
that each Account and each invoice representing any Account shall: (a) cover a
bona fide sale or lease and delivery of merchandise usually dealt in by the
Borrower or such Subsidiary Guarantor, or the rendition by the Borrower of such
Subsidiary Guarantor of services to customers in the ordinary course of
business, (b) be for a liquidated amount maturing as stated in the schedule
thereof and in the duplicate invoice covering said sale, and (c) other than the
Administrative Agent's security interest therein, not be subject to any Lien
other than Liens to the extent permitted in clause (E) and (G) of Section
8.3(d), or subject to any offset, deduction or counterclaim other than those
asserted by the Account Debtor in the ordinary course of business. None of the
Borrower's nor any of the Subsidiary Guarantors' invoices shall be backdated,
postdated or redated and no Borrower or Subsidiary Guarantor shall make any
sales on extended dating or credit terms other than in accordance the Borrower's
or the Subsidiary Guarantor's past practices as disclosed to the Administrative
Agent in writing in the Disclosure Schedule. No amount payable to the Borrower
or any Subsidiary Guarantor under or in connection with any Account is evidenced
by any Instrument or Chattel Paper which has not been delivered to the
Administrative Agent, properly endorsed for transfer, to the extent delivery is
required pursuant to Section 6.8.
6.6 DISPUTES AND CLAIMS REGARDING ACCOUNTS.
The Borrower and each of the Subsidiary Guarantors shall use
commercially reasonable efforts to settle or adjust promptly all disputes and
claims regarding Accounts at no expense to the Administrative Agent, but no
discount, credit or allowance outside the ordinary course of business or
material adverse extension, compromise or settlement shall be granted to any
customer or Account Debtor, and no returns of merchandise outside the ordinary
course of business shall be accepted by the Borrower or such Subsidiary
Guarantor without the Administrative Agent's consent which consent shall not be
unreasonably withheld or delayed.
6.7 DEPOSITORY ACCOUNTS.
Other than (a) the Lockboxes, the Blocked Accounts and the
Cash Concentration Account and (b) those other operating accounts (whether
checking or Deposit Accounts) disclosed on the Disclosure Schedule (which the
Borrower and the Subsidiary Guarantor shall use solely for the purpose of
disbursing monies of the Borrower and not for collecting or depositing
Collections, Remittances of Net Cash Proceeds or any Intercompany Payments)
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which have been consented to by the Administrative Agent from time to time (such
other operating accounts being referred to herein as "Permitted Accounts"),
neither the Borrower, nor any of the Subsidiary Guarantors nor any other Person
maintains a post office box, Deposit Account or other checking account receiving
Collections, Remittances of Net Cash Proceeds or any Intercompany Payments or
otherwise holding monies of the Borrower or any Subsidiary Guarantor.
6.8 DELIVERY OF INSTRUMENTS AND CHATTEL PAPER.
If any amount in excess of $ 25,000 payable under or in
connection with any of the Collateral owned by the Borrower or any Subsidiary
Guarantor shall be or become evidenced by an Instrument or Chattel Paper, the
Borrower or such Subsidiary Guarantor shall immediately deliver such Instrument
or Chattel Paper to the Administrative Agent, duly endorsed in a manner
satisfactory to the Administrative Agent, or, if consented to by the
Administrative Agent, shall xxxx 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 National City Commercial Finance, Inc.,
as Administrative Agent".
6.9 COMPLIANCE WITH TERMS OF ACCOUNTS; GENERAL INTANGIBLES.
The Borrower and each of the Subsidiary Guarantors will
perform and comply in all material respects with all obligations in respect of
Accounts, Chattel Paper, General Intangibles and under all other contracts and
agreements to which it is a party or by which it is bound relating to the
Collateral where failure to so comply would result in a Material Adverse Effect,
unless the validity thereof is being contested in good faith by appropriate
proceedings and such proceedings do not involve the material danger of the sale,
forfeiture or loss of the Collateral which is the subject of such proceedings or
the priority of the lien in favor of the Administrative Agent thereon.
6.10 NO WAIVERS, EXTENSIONS, AMENDMENTS.
Other than in the ordinary course of business and in
accordance with its business practices prior to the execution and delivery of
this Agreement, neither the Borrower nor any of the Subsidiary Guarantors will,
without the Administrative Agent's prior written consent, which consent shall
not be unreasonably withheld or delayed, grant any extension of the time of
payment of any of the Accounts, Chattel Paper or Instruments, compromise,
compound or settle the same for less than the full amount thereof, release,
wholly or partly, any Person liable for the payment thereof, or allow any credit
or discount whatsoever thereon.
6.11 REPRESENTATIONS AND WARRANTIES REGARDING PLEDGED COLLATERAL.
With respect to the Pledged Collateral: (a) except for the
Liens permitted to exist on the Collateral pursuant to this Agreement, the
Borrower and each Subsidiary Guarantor is the record and beneficial owner of the
Pledge Collateral pledged by it hereunder constituting Instruments or
Certificated Securities and is the entitlement holder of all such Pledged
Collateral constituting Investment Property held in a Securities Account, (b)
the Pledged Stock, Pledged Partnership Interests and Pledged LLC Interests
pledged hereunder constitutes that percentage of the issued and outstanding
equity of all classes of each issuer thereof as set forth on the Disclosure
Schedule; (c) all of the Pledged Stock, Pledged Partnership Interests and
Pledged LLC Interests have been duly and validly issued and are fully paid and
nonassessable; (d) to the best knowledge of the Borrower, each of the Pledged
Notes constitutes the legal, valid and binding obligation of the obligor with
respect thereto, enforceable in accordance with its terms, subject to the
effects of bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws relating to or affecting creditors' rights
generally, and general
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equitable principles (whether considered in a proceeding in equity or at law);
(e) all Pledged Stock, Pledged Partnership Interests and Pledged LLC Interests
of the Borrower and any Subsidiary Guarantor as of the Closing Date are listed
on the Disclosure Schedule; (f) all Pledged Collateral and, if applicable, any
Additional Pledged Collateral, consisting of Certificated Securities or
Instruments has been delivered to the Administrative Agent in accordance with
Section 6.12; (g) all Pledged Collateral held by a Securities Intermediary in a
Securities Account is in a Control Account; (h) other than the Pledged
Partnership Interests and the Pledged LLC Interests that constitute 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 consisting of Financial Assets held in a Control Account; (i) no
Person other than the Administrative Agent has Control over any Investment
Property of the Borrower or any Subsidiary Guarantor; and (j) except in the case
of OLP LLC, Trumark Steel and Processing, LLC, and Olympic Receivables LLC, the
LLC Agreement governing any Pledged LLC Interests and the Partnership Agreement
governing any Pledged Partnership Interests provide that, upon the occurrence
and during the continuance of an Event of Default, the Administrative Agent
shall be entitled to exercise all of the rights of the Borrower or any
Subsidiary Guarantor granting the security interest therein, and that a
transferee or assignee of a membership interest or partnership interest, as the
case may be, of such LLC or Partnership, as the case may be, shall become a
member or partner, as the case may be, of such LLC or Partnership, as the case
may be, entitled to participate in the management thereof and, upon the transfer
of the entire interest of the Borrower or such Subsidiary Guarantor, the
Borrower or such Subsidiary Guarantor ceases to be a member or partner, as the
case may be.
6.12 COVENANTS REGARDING PLEDGED COLLATERAL.
(a) DELIVERY AND MAINTENANCE OF PLEDGED COLLATERAL.
The Borrower and each Subsidiary Guarantor will (i) deliver to
the Administrative Agent, all certificates or Instruments representing
or evidencing any Pledged Collateral (including Additional Pledged
Collateral), whether now arising or hereafter acquired, in suitable
form for transfer by delivery or, as applicable, accompanied by the
Borrower's or such Subsidiary Guarantor's endorsement, where necessary,
or duly executed instruments of transfer or assignment in blank, all in
form and substance satisfactory to the Administrative Agent, together,
in respect of any such Pledged Collateral, with a Pledge and Security
Agreement, duly executed by (a) the Borrower, substantially in the form
of Exhibit D-1, and (b) each Subsidiary Guarantor, substantially in the
form of Exhibit D-2 or such other documentation acceptable to the
Administrative Agent and (ii) maintain all other Pledged Collateral
constituting Investment Property in a Control Account. The
Administrative Agent shall have the right, at any time in its
discretion and without notice to the Borrower or any Subsidiary
Guarantor, to transfer to or to register in its name or in the name of
its nominees any or all of the Pledged Collateral. The Administrative
Agent shall have the right at any time to exchange certificates or
instruments representing or evidencing any of the Pledged Collateral
for certificates or instruments of smaller or larger denominations.
(b) PAYMENT OF DIVIDENDS AND DISTRIBUTIONS.
Except as provided in Section 10, the Borrower or the
applicable Subsidiary Guarantor 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 of the Pledged
Collateral upon the liquidation or dissolution of any issuer of any of
the Pledged Collateral, any distribution of capital made on or in
respect of any of the Pledged Collateral or any property distributed
upon or with respect to any of the Pledged Collateral pursuant to the
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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 sums of money or property so paid or
distributed in respect of any of the Pledged Collateral shall be
received by the Borrower or such Subsidiary Guarantor, the Borrower or
such Subsidiary Guarantor 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
the Borrower of such Subsidiary Guarantor, as additional security for
the Obligations.
(c) VOTING RIGHTS.
Except as provided in Section 10, the Borrower or the
applicable Subsidiary Guarantor will be entitled to exercise all
voting, consent and corporate 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 the Borrower or such
Subsidiary Guarantor which would impair the Collateral or which would
be inconsistent with or result in any violation of any provision of
this Agreement or any other Loan Document or, without prior notice to
the Administrative Agent, to enable or take any other action to 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) CONTROL OF INVESTMENT PROPERTY.
Neither the Borrower nor any Subsidiary Guarantor shall grant
Control over any Investment Property to any Person other than the
Administrative Agent.
(e) CONSENT TO PLEDGE OF PLEDGED COLLATERAL.
In the case of the Borrower or each Subsidiary Guarantor which
is an issuer of Pledged Collateral, the Borrower or such Subsidiary
Guarantor agrees to be bound by the terms of this Agreement relating to
the Pledged Collateral issued by it and will comply with such terms
insofar as such terms are applicable to it. In the case of the Borrower
or each Subsidiary Guarantor which is a partner in a Partnership, the
Borrower or such Subsidiary Guarantor hereby consents to the extent
required by the applicable Partnership Agreement to the pledge by the
Borrower or each other Subsidiary Guarantor, pursuant to the terms
hereof, of the Pledged Partnership Interests in such Partnership and,
upon the occurrence of an Event of Default which is continuing and has
not been waived in accordance with Section 15.1 hereof, to the transfer
of such Pledged Partnership Interests to the Administrative Agent or
its nominee and to the substitution of the Administrative Agent or its
nominee as a substituted partner in such Partnership with all the
rights, powers and duties of a general partner or a limited partner, as
the case may be. In the case of the Borrower or each Subsidiary
Guarantor which is a member of an LLC, the Borrower or such Subsidiary
Guarantor hereby consents to the extent required by the applicable LLC
Agreement to the pledge by the Borrower or each other Subsidiary
Guarantor, pursuant to the terms hereof, of the Pledged LLC Interests
in such LLC and to the transfer of such Pledged LLC Interests to the
Administrative Agent or its nominee and, upon the occurrence of an
Event of Default which is continuing and has not been waived in
accordance with Section 15.1 hereof, to the substitution of the
Administrative Agent or its nominee as a substituted member of the LLC
with all the rights, powers and duties of a member of the LLC in
question.
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(f) AMENDMENTS.
None of the Borrower or any Subsidiary Guarantor will agree to
any amendment of an LLC Agreement or Partnership Agreement that in any
way adversely affects the perfection of the security interest of the
Administrative Agent in the Pledged Partnership Interests or Pledged
LLC Interests pledged by the Borrower or such Subsidiary Guarantor
hereunder, including electing to treat the membership interest or
partnership interest of the Borrower or such Subsidiary Guarantor as a
security under Section 8-103 of the UCC.
6.13 CONTROL ACCOUNTS.
Neither the Borrower nor any Subsidiary Guarantor shall
maintain any Securities Account or Commodity Account that is not a Control
Account.
6.14 MAINTENANCE OF INSURANCE WITH RESPECT TO COLLATERAL.
The Borrower and each of the Subsidiary Guarantors will
maintain with financially sound and reputable companies, insurance policies: (a)
insuring the Equipment, the Inventory, and all equipment subject to any lease,
against loss by fire, explosion, theft and such other casualties as are usually
insured against by companies engaged in the same or similar businesses, (b)
insuring the Borrower and such Subsidiary Guarantor against liability for
personal injury and property damage relating to such Equipment, Inventory and
equipment covered by any equipment lease, such policies to be in such form and
in such amounts and coverage as may be reasonably satisfactory to the
Administrative Agent (but in any event be upon such terms as are usual for
companies engaged in the same or similar businesses as the Borrower), with
losses payable to the Borrower or such Subsidiary Guarantor, as the case may be,
and the Administrative Agent as their respective interests may appear and
subject to Section 2.9(d)(i) of this Agreement and (c) naming the Administrative
Agent as additional insured and loss payee with respect to such insurance. All
insurance with respect to the Equipment and Inventory shall (i) provide that no
cancellation, reduction in amount, change in coverage or expiration thereof
shall be effective until at least thirty (30) days after written notice to the
Administrative Agent thereof, and (ii) be reasonably satisfactory in all
respects to the Administrative Agent (but in any event be upon such terms as are
usual for companies engaged in the same or similar businesses as the Borrower).
6.15 TRANSFER OF ACCOUNTS FROM OLYMPIC STEEL RECEIVABLES L.L.C.
Not later than Six (6) Business Days after the Closing Date,
Olympic Steel Receivables LLC shall transfer to each of the Borrower, Olympic
Steel Minneapolis, Inc. and Olympic Steel Lafayette, Inc. the outstanding
balance of its Accounts previously acquired from the Borrower, Olympic Steel
Minneapolis, Inc. and Olympic Steel Lafayette, Inc.; such re-conveyance of title
to the Accounts to be in accordance with the Re-conveyancing Agreement.
SECTION 7 GENERAL REPRESENTATIONS AND WARRANTIES.
So long as any of the Secured Obligations hereunder remain
outstanding, or any LC Exposure hereunder remains outstanding, or the Lenders or
Designated Letter of Credit Issuer have any Commitment hereunder, the Borrower
and each Subsidiary Guarantor represent and warrant to the Administrative Agent,
the Lenders, the Designated Letter of Credit Issuer and the Designated Hedge
Creditor as follows:
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7.1 EXISTENCE.
The Disclosure Schedule sets forth a list of the Borrower and
all of its Subsidiaries, including a list of all locations of operations of the
Borrower and its Subsidiaries and locations of tangible real and personal
property of the Borrower and its Subsidiaries. The Borrower, and each Subsidiary
thereof, is duly organized, validly existing and in good standing under the laws
of their respective states of incorporation. Neither the Borrower nor any of the
Subsidiary Guarantors has any Subsidiaries other than as listed in the
Disclosure Schedule. The Borrower and each Subsidiary thereof are duly qualified
or licensed to transact business in their respective jurisdictions of
organization and in each additional jurisdiction where such qualification or
licensure is necessary, except where failure to do so will not have a Material
Adverse Effect.
7.2 AUTHORIZATION.
The execution, delivery and performance of this Agreement and
the other Loan Documents to which the Borrower or each Subsidiary Guarantor is a
party: (a) are within the Borrower's or such Subsidiary Guarantor's corporate
powers, (b) have been duly authorized, and are not in contravention of Law or
the terms of the Borrower's or such Subsidiary Guarantor's Charter Documents or,
except as set forth on the Disclosure Schedule thereto, of any indenture or
other document or instrument evidencing borrowed money or any other agreement or
undertaking to which the Borrower or such Subsidiary Guarantor is a party or by
which it or its property is bound.
7.3 ENFORCEABILITY.
This Agreement and the other Loan Documents constitute the
legal, valid and binding obligations of the Borrower or each Subsidiary
Guarantor which is a party thereto, enforceable against the Borrower or such
Subsidiary Guarantor in accordance with the terms thereof, subject to any
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the enforcement of creditors' rights generally and by general
equitable principles (whether enforcement is sought by proceedings in equity or
at law).
7.4 LITIGATION; PROCEEDINGS.
As of the Closing Date, except as set forth in the Disclosure
Schedule, there are no actions, suits, investigations or proceedings, and no
orders, writs, injunctions, judgments or decrees, now pending, existing or, to
the knowledge of the Borrower or any of the Subsidiary Guarantors, threatened
against any of the Borrower or any of its Subsidiaries affecting any property of
the Borrower, any Subsidiary thereof, this Agreement or any other Loan Document,
whether at law, in equity or otherwise, before any court, board, commission,
agency or instrumentality of any federal, state, local or foreign government or
of any agency or subdivision thereof, or before any arbitrator or panel of
arbitrators. There is no action, suit, investigation, proceeding, order, writ,
injunction, or decree against the Borrower or any Subsidiary thereof that, if
adversely determined, when taken singly or with all other actions, suits,
investigations, proceedings, orders, writs, injunctions or decrees currently
pending, could reasonably be expected to result in a Material Adverse Effect.
7.5 TAXES.
The Borrower and each of the Subsidiaries thereof have filed
all federal, state and local tax returns which are required to be filed by any
of them, and, except to the extent permitted by Section 8.2(i) of this
Agreement, have paid all taxes and assessments due as shown on such returns,
including interest, penalties and fees.
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7.6 TITLE.
The Borrower, and each of the Subsidiaries thereof, have good
title to all personal property assets reflected in, and good and marketable
title to all real property assets reflected in, the financial statements
referred to in Section 7.13 of this Agreement (other than the Third Party
Intellectual Property) and in the consolidated financial statements delivered
from time to time pursuant to Section 8.1 of this Agreement. All such assets are
free of all Liens other than those in favor of the Administrative Agent and
those otherwise disclosed in the Disclosure Schedule or permitted by Section
8.3(d) of this Agreement or the other Loan Documents.
7.7 CONSENTS; APPROVALS.
Except as set forth on the Disclosure Schedule, no action,
consent or approval of, registration or filing with or any other action by any
governmental authority or other Person is or will be required in connection with
the transactions contemplated by this Agreement and the other Loan Documents,
except such as have been made or obtained and are in full force and effect and
except for the filings required to create or perfect the Liens in favor of the
Administrative Agent that are contemplated hereby and by the other Loan
Documents. Except as set forth in the Disclosure Schedule (and expressly
consented to by the Administrative Agent and the Lenders), to the extent the
terms of any material General Intangible (including any Material License
Agreement) contain a legally effective prohibition against assignment (including
constructive assignment by reason of a sale of control or the granting of a
security interest), a consent permitting assignment shall have been obtained by
the Borrower and each Subsidiary Guarantor in connection with the Loan Documents
to overcome such prohibition.
7.8 LAWFUL OPERATIONS.
The operations of the Borrower and each of the Subsidiaries
thereof are in compliance with applicable requirements imposed by Law, including
without limitation, occupational safety and health laws, and zoning ordinances,
except to the extent any such noncompliance, when taken singly or with all other
such noncompliance, has not resulted, and could not reasonably be expected to
result in a Material Adverse Effect.
7.9 ENVIRONMENTAL COMPLIANCE.
Each parcel of real property in which the Borrower or any
Subsidiary thereof has a real property interest (whether as fee owner, operator,
lessor (directly or indirectly), lessee (directly or indirectly), mortgagee or
otherwise) (collectively, "Properties") is in compliance with Environmental Laws
except for any noncompliance, when taken singly or with all other such
noncompliance, has not resulted, and could not reasonably be expected to result,
in a Material Adverse Effect and has not otherwise resulted, and could not
reasonably be expected to result, in liabilities or claims against the Borrower
or any Subsidiary thereof in an amount exceeding One Million Dollars
($1,000,000). With respect to each of the Properties, (a) there is no pending
or, to the knowledge of the Borrower or the Subsidiary Guarantor, threatened
Environmental Claim against the Borrower or any Subsidiaries thereof, or any
other environmental condition with respect to any Property which Environmental
Claim or condition, when taken singly or with all other such Environmental
Claims or conditions, has not resulted, and could not reasonably be expected to
result, in a Material Adverse Effect and has not otherwise resulted, and could
not reasonably be expected to result, in liabilities or claims against the
Borrower or any Subsidiary thereof in an amount exceeding One Million Dollars
($1,000,000) and (b) the Borrower and the Subsidiaries thereof are in compliance
with all Environmental Permits, except to the extent any such noncompliance,
when taken singly or together with all other instances of such noncompliance,
has not resulted, and could not reasonably be expected to result, in a Material
Adverse Effect and has not otherwise resulted,
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and could not reasonably be expected to result, in liabilities or claims
against the Borrower or any Subsidiary thereof in an amount exceeding One
Million Dollars ($1,000,000). Except as disclosed on the Disclosure Schedule, no
Property is listed or proposed for listing on the National Priorities List
pursuant to CERCLA, on the CERCLIS or on any similar federal or state list of
sites requiring investigation or clean-up. Except as disclosed on the Disclosure
Schedule, to the best knowledge of the Borrower, neither the Borrower nor any
Subsidiary thereof has directly transported or directly arranged for the
transportation of any Hazardous Material to any location which is listed or
proposed for listing on the National Priorities List pursuant to CERCLA, on the
CERCLIS or on any similar federal or state list or which is the subject of any
federal, state or local enforcement actions or other investigations which could
reasonably be expected to lead to claims against the Borrower or any Subsidiary
thereof for any remedial work, damage to natural resources or personal injury,
including claims under CERCLA. Except as disclosed in the Disclosure Schedule
(including any items specified in environmental assessment reports (prepared by
GaiaTech, Inc. and furnished to the Administrative Agent) to the extent
specifically referenced in the Disclosure Schedule), (X) neither the Borrower
nor the Subsidiary Guarantors are aware: (i) of any underground storage tanks,
active or abandoned, including petroleum storage tanks, landfills, lagoons,
surface impoundments, disposal areas or disposal ponds on or under any Property
that are in violation of any applicable Environmental Law, (ii) of any
polychlorinated biphenyls or friable asbestos present at any Property in
violation of any applicable Environmental Law, or (iii) of any prior use of any
Property by any Persons that constitutes a violation of any Environmental Laws
or has resulted in a release of Hazardous Materials into the environment such as
would give rise to a cleanup obligation or other Environmental Claim, and (Y) no
Hazardous Materials have been (i) released or disposed of on any such Property
or, to the best knowledge of the Borrower or the Subsidiary Guarantors, on any
property adjoining any such Property, except in compliance with applicable
Environmental Laws, or (ii) generated, manufactured, stored, treated,
transported or disposed of on or from any such Property; PROVIDED, HOWEVER,
that, in any event, whether or not disclosed in the Disclosure Schedule or known
by the Borrower or such Subsidiary Guarantors, any such environmental property
conditions, materials, prior use, or Hazardous Material non-compliant release or
disposal, or Hazardous Material generation, manufacture, storage, treatment, or
transportation, when taken singly or together with all other such matters, has
not resulted, and could not reasonably be expected to result, in a Material
Adverse Effect and has not resulted, and could not reasonably be expected to
result, in liabilities or claims against the Borrower or any Subsidiaries in an
amount exceeding One Million Dollars ($1,000,000).
7.10 ENVIRONMENTAL LAWS AND PERMITS.
Without limiting the representations made in Section 7.9
above, to the best knowledge of the Borrower or the Subsidiary Guarantors, there
are no circumstances with respect to any Property or the operations of the
Borrower or any Subsidiaries thereof that could reasonably be expected to: (i)
form the basis of an Environmental Claim against any or all of the Borrower or
any Subsidiaries thereof which would constitute a violation of Section 8.2(e)
hereof, or (ii) cause any Property owned, leased or funded by the Borrower or
any Subsidiaries thereof to be subject to any material restrictions on
ownership, occupancy, use or transferability under any applicable Environmental
Law.
7.11 ERISA.
The Disclosure Schedule sets forth a list of all of the
Employee Benefit Plans of the Borrower, all Subsidiaries thereof, and each ERISA
Affiliate thereof as of the Closing Date. Each Employee Benefit Plan of the
Borrower and all Subsidiaries thereof which is intended to qualify under Section
401 of the Code does so qualify, and any trust created thereunder is exempt from
tax under the provision of Section 501 of the Code, except where such failures
in the aggregate would not have a Material Adverse Effect. No Accumulated
Funding Deficiency
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exists in respect of any Employee Benefit Plan that is subject to Code Section
412 and no Reportable Event has occurred in respect of any Employee Benefit Plan
that is subject to Title IV of ERISA which is continuing and which, in the case
of such Accumulated Funding Deficiency or Reportable Event, when taken singly or
with all other such Reportable Events or Accumulated Funding Deficiencies, has
resulted, or could reasonably be expected to result, in a Material Adverse
Effect, or has otherwise resulted, or could reasonably be expected to result, in
liabilities or claims against the Borrower or any Subsidiaries thereof in an
amount exceeding Five Hundred Thousand Dollars ($500,000). No "prohibited
transactions" (as defined in Section 406 of ERISA or Section 4975 of the Code),
have occurred which, when taken singly or with all other such "prohibited
transactions," has resulted, or could reasonably be expected to result, in a
Material Adverse Effect, or has otherwise resulted, or could reasonably be
expected to result, in liabilities or claims against the Borrower or any
Subsidiaries thereof in an amount exceeding Five Hundred Thousand Dollars
($500,000). Neither the Borrower, nor any of the Subsidiaries thereof, nor any
ERISA Affiliate thereof, has: (i) had an obligation to contribute to any
Multiemployer Plan except as disclosed in the Disclosure Schedule or (ii)
incurred or reasonably expects to incur any liability for the withdrawal from
such a Multiemployer Plan which withdrawal liability, when taken singly or with
all other such withdrawal liabilities, has resulted, or could reasonably be
expected to result, in a Material Adverse Effect, or has otherwise resulted, or
could reasonably be expected to result, in liabilities or claims against any or
all of the Borrower or any Subsidiaries thereof in an amount exceeding Five
Hundred Thousand Dollars ($500,000).
7.12 AGREEMENTS; ADVERSE OBLIGATIONS; LABOR DISPUTES.
The Disclosure Schedule sets forth a list of all Material
Business Agreements of the Borrower and the Subsidiaries thereof as of the
Closing Date. As of the Closing Date, the Material Business Agreements of the
Borrower and such Subsidiaries are in full force and effect and have not been
revoked or otherwise modified since the execution thereof, except as disclosed
on the Disclosure Schedule. The Borrower and such Subsidiaries thereof are in
material compliance with the terms of the Material Business Agreements. Neither
the Borrower, nor any Subsidiaries thereof, is subject to any contract,
agreement, or corporate restriction which could reasonably be expected to have a
Material Adverse Effect. Neither the Borrower, nor any of the Subsidiaries
thereof, is a party to any labor dispute (including any strike, slowdown,
walkout or other concerted interruptions by its employees, but excluding
grievance disputes) which could, individually or in the aggregate, be reasonably
expected to result in a Material Adverse Effect. There are no material strikes,
slow downs, walkouts or other concerted interruptions of operations by employees
of any of the Borrower or any of the Subsidiaries thereof whether or not
relating to any labor contracts.
7.13 FINANCIAL STATEMENTS; PROJECTIONS.
(a) FINANCIAL STATEMENTS.
The Borrower has furnished to the Administrative
Agent complete and correct copies of (i) the audited balance sheets of
the Borrower and its consolidated Subsidiaries for the Fiscal Year
ending December 31, 2000, and the related statements of income,
shareholder's equity, and cash flows, and, as applicable, changes in
financial position or cash flows for such Fiscal Year, and the notes to
such financial statements, reported upon by Xxxxxx Xxxxxxxx, L.L.P.,
certified public accountants, and (ii) the internal unaudited balance
sheets of the Borrower and its consolidated Subsidiaries for the Fiscal
Month ending May 31, 2001, and the related statements of income,
shareholder's equity, and cash flows for the five months ended May 31,
2001, certified by an executive officer of the Borrower. All such
financial statements: (a) have been prepared in accordance with GAAP,
applied on a consistent basis (except as stated therein), with the
Borrower's financial statements from prior Fiscal Years and (b) fairly
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present in all material respects the financial condition of the
Borrower and its consolidated Subsidiaries as of the respective dates
thereof and the results of operations for the respective fiscal periods
then ending, subject in the case of any such financial statements which
are unaudited, to the absence of any notes to such financial statement
and to normal audit adjustments, none of which are known to or could
reasonably be expected to involve a Material Adverse Effect. Neither
the Borrower nor any Subsidiary thereof has experienced a Material
Adverse Effect since the December 31, 2000 financial statements, nor
has there been any material change in the Borrower's or any of its
Subsidiaries accounting procedures used therein. The Borrower and its
consolidated Subsidiaries did not as of December 31, 2000, and will not
as of the Closing Date, after giving effect to the Loans made on the
Closing Date, have any material contingent liabilities, material
liabilities for taxes, unusual and material forward or long-term
commitments or material unrealized or anticipated losses from any
unfavorable commitments, except those reflected in such financial
statements or the notes thereto in accordance with GAAP or, to the
extent not required to be reflected by GAAP, are disclosed in the
Disclosure Schedule and which reflected or disclosed matters in any
such case will not be material in relation to the business, operations,
properties, assets or condition (financial or otherwise) of the
Borrower and its consolidated Subsidiaries considered on a consolidated
basis.
(b) FINANCIAL PROJECTIONS.
The Borrower has delivered to the Administrative
Agent prior to the execution and delivery of this Agreement a copy of
financial and business projections for the Borrower and its
consolidated Subsidiaries (including balance sheet, income and cash
flow and other forecasts) prepared by the Borrower (the "Financial
Projections") with respect to the Borrower and its Subsidiaries for the
fiscal years therein covered. Such Financial Projections for the
Borrower and its Subsidiaries submitted to the Administrative Agent
were prepared in good faith and were based upon assumptions which the
Borrower believed to be reasonable (as of the dates the Financial
Projections were prepared). No facts are known to the executive
officers and management of the Borrower at the date hereof which, if
reflected in the Financial Projections, would result in a material
adverse change in the projected assets, liabilities, results of
operations, or cash flows reflected therein.
7.14 INTELLECTUAL PROPERTY.
The Borrower and each of the Subsidiaries thereof owns or has
the legal and valid right to use all Intellectual Property necessary for the
operation of its business as presently conducted, free from any Lien not
permitted under Section 8.3(d) hereof and free of any restrictions which could
reasonably be expected to have a Materially Adverse Effect on the operation of
its business as presently conducted. Except as set forth in the Disclosure
Schedule, neither the Borrower nor any of the Subsidiaries thereof: (a) owns any
Intellectual Property, (b) licenses any Intellectual Property (whether as
licensor or licensee), or (c) is a party to any Material License Agreement with
respect to Intellectual Property.
7.15 STRUCTURE; CAPITALIZATION.
The Borrower is the record and beneficial owner of all issued
and outstanding common shares of Olympic Steel Minneapolis, Inc., Olympic Steel
Lafayette, Inc., Olympia International, Inc. and Oly Steel Welding, Inc. and (b)
Olympic Steel Minneapolis, Inc. is the record and beneficial owner of all issued
and outstanding common shares of Olympic Steel Iowa, Inc. The authorized and
issued capital stock of the Borrower is as follows: 20,000,000 shares of common
stock of which 9,631,000 shares of such common stock are issued and outstanding
and
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5,000,000 shares of preferred stock, none of which are issued and outstanding.
The authorized and issued capital stock of Olympic Steel, Lafayette, Inc. is as
follows: 850 shares of common stock of which 100 shares of such common stock are
issued and outstanding. The authorized and issued capital stock of Olympic
Steel, Minneapolis, Inc. is as follows: 100 shares of common stock of which 100
shares of such common stock are issued and outstanding. The authorized and
issued capital stock of Olympic Steel, Iowa, Inc. is as follows: 100 shares of
common stock of which 100 shares of such common stock are issued and
outstanding. The authorized and issued capital stock of Oly Steel Welding, Inc.
is as follows: 60,000 shares of common stock of which 100 shares of such common
stock are issued and outstanding. There are no options, warrants or other rights
to acquire any of the capital stock of the Borrower or any of the Subsidiary
Guarantors. The Borrower and the Subsidiary Guarantors have and will continue to
have a Fiscal Year end on the last day of December in each calendar year.
7.16 INSURANCE.
The insurance policies maintained by the Borrower and each
Subsidiary thereof as of the Closing Date comply with the requirements of
Section 6.14 of this Agreement. As of the Closing Date, the Borrower has
delivered or caused to be delivered to the Administrative Agent certificates, in
form and substance satisfactory to the Administrative Agent, in its sole
discretion, reflecting the Borrower's and its Subsidiaries' insurance coverage
required under this Agreement.
7.17 VALUE; SOLVENCY.
The Borrower and each Subsidiary Guarantor have received fair
consideration and reasonably equivalent value for the obligations and
liabilities it has incurred to the Lenders hereunder. After giving effect to the
transactions contemplated hereby, the Borrower and each Subsidiary Guarantor is
Solvent.
7.18 INVESTMENT COMPANY ACT STATUS.
Neither the Borrower nor any Subsidiary thereof is an
"investment company", or an "affiliated person" of, or a "promoter" or
"principal underwriter" for an "investment company" (as such terms are defined
in the Investment Company Act of 1940, as amended (15 U.S.C. Section 80(a)(1),
et seq.).
7.19 REGULATION U/REGULATION X COMPLIANCE.
Neither the Borrower nor any Subsidiaries thereof owns any
"margin stock", as that term is defined in Regulation U and Regulation X of the
Board of Governors of the Federal Reserve System ("Margin Stock"). The proceeds
of Loans made to the Borrower pursuant to this Agreement will be used only for
the purposes contemplated by Section 8.2(g) hereof. No part of the proceeds of
Loans made to any of the Borrower pursuant to this Agreement will be used,
directly or indirectly, to purchase or carry any Margin Stock (as defined above)
or for a purpose which violates any applicable law, rule, or regulation
including, without limitation, the provisions of Regulation U or X of the Board
of Governors of the Federal Reserve System, as amended.
7.20 FULL DISCLOSURE.
None of the written information, exhibits or reports furnished
by the Borrower to the Administrative Agent or the Lenders omit to state any
fact necessary to make the statements contained therein not materially
misleading in light of the circumstances and purposes for which
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such information was provided. All information supplied by the Borrower to the
Administrative Agent and the Lenders is complete and accurate in all material
respects.
SECTION 8 COVENANTS OF THE BORROWER.
So long as any of the Secured Obligations hereunder remain outstanding,
or any LC Exposure hereunder remains outstanding, or the Lenders or Designated
Letter of Credit Issuer have any Commitment hereunder, the Borrower will comply,
and will cause each of the Subsidiaries thereof to comply, with the following
provisions:
8.1 REPORTING AND NOTICE COVENANTS.
(a) MONTHLY FINANCIAL STATEMENTS.
The Borrower shall furnish to the Administrative
Agent and each Lender, as soon as practicable and in any event within
twenty (20) days after the end of each Fiscal Month of the Borrower and
its Subsidiaries internal unaudited consolidated balance sheets of the
Borrower and its consolidated Subsidiaries as of the end of that Fiscal
Month and the related statements of income, shareholder's equity and
cash flow for such Fiscal Month each prepared on a comparative basis
with the comparable period during the prior year and in accordance with
GAAP, all in reasonable detail and certified, subject to normal
year-end audit adjustments, by a Responsible Officer of the Borrower.
(b) QUARTERLY FINANCIAL STATEMENTS.
The Borrower shall furnish to the Administrative
Agent and each Lender, as soon as practicable and in any event within
forty five (45) days after the end of each Fiscal Quarter of the
Borrower and its Subsidiaries unaudited consolidated balance sheets of
the Borrower and its consolidated Subsidiaries as of the end of that
Fiscal Quarter and the related statements of income, shareholder's
equity and cash flow for such Fiscal Quarter each prepared on an
comparative basis with the comparable period during the prior year and
in accordance with GAAP, all in reasonable detail and certified,
subject to normal year-end audit adjustments, by a Responsible Officer
of the Borrower; PROVIDED that such requirement for the furnishing of
such annual financial statements may be fulfilled by the furnishing the
quarterly report of the Borrower on Form 10-Q which includes such
financial statements, as filed with the Securities and Exchange
Commission, for the applicable Fiscal Quarter.
(c) ANNUAL FINANCIAL STATEMENTS.
The Borrower shall furnish to the Administrative
Agent and each of the Lenders, as soon as practicable and in any event
within ninety (90) days after the end of each Fiscal Year of the
Borrower and its consolidated Subsidiaries, a complete copy of the
annual audit report of the Borrower and its consolidated Subsidiaries
(including, without limitation, all consolidated financial statements
of the Borrower and notes thereto) for that Fiscal Year: (i) prepared
on a comparative basis with the prior year and in accordance with GAAP,
(ii) audited and certified (without qualification as to GAAP), by
Xxxxxx Xxxxxxxx LLP or other independent public accountants of
recognized national standing selected by the Borrower and acceptable to
the Required Lenders, and (iii) accompanied by the accountants'
management report and any management letters relating thereto, if any,
and an opinion of such accountants, which opinion shall be unqualified
and shall (A) state that such accountants audited such consolidated
financial statements in accordance with generally accepted auditing
standards, that such accountants believe that such audit provides a
reasonable basis for their opinion, and that
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in their opinion such consolidated financial statements present fairly,
in all material respects, the consolidated financial position of the
Borrower and its consolidated Subsidiaries as at the end of such Fiscal
Year and the consolidated results of their operations and cash flows
for such Fiscal Year in conformity with generally accepted accounting
principles, and (B) contain such statements as are customarily included
in unqualified reports of independent accountants in conformity with
the recommendations and requirements of the American Institute of
Certified Public Accountants (or any successor organization); PROVIDED
that such requirement for the furnishing of such annual financial
statements may be fulfilled by the furnishing the annual report of the
Borrower on Form 10-K which includes such financial statements, as
filed with the Securities and Exchange Commission, for the applicable
Fiscal Year;
(d) OFFICER'S CERTIFICATE.
The Borrower shall furnish to the Administrative
Agent and each Lender:
(i) concurrently with the financial statements
delivered in connection with Sections 8.1(a), 8.1(b) and
8.1(c) above, a certificate of a Responsible Officer of the
Borrower, in his or her capacity as a Responsible Officer,
setting forth the computations necessary to determine whether
the Borrower and its consolidated Subsidiaries are in
compliance with Section 8.4 of this Agreement and certifying
that: (A) those financial statements fairly present in all
material respects the financial condition and results of
operations of the Borrower, subject in the case of interim
financial statements, to routine year-end audit adjustments
and (B) no Potential Default or Event of Default then exists
or, if any Potential Default or Event of Default does exist, a
brief description of the Potential Default or Event of Default
and the Borrower's intentions in respect thereof, and
(ii) on a weekly basis, a certificate reflecting the
calculation of the Borrower's and the Subsidiary Guarantors'
Eligible Accounts and Eligible Inventory (the calculation of
Eligible Inventory reflecting the then most recent month end
balance pursuant to Section 4.8 hereof), satisfactory to the
Administrative Agent and substantially in the form attached
hereto as EXHIBIT H-1 (each a "Borrowing Base
Certificate");PROVIDED, HOWEVER, that, should the Excess
Availability of the Borrower be less than $15,000,000 at any
time, THEN from and after the date of such occurrence the
Borrowing Base Certificate shall be furnished to the
Administrative Agent on a daily basis until such time as the
Excess Availability of the Borrower has been equal to or in
excess of $15,000,000 for sixty (60) consecutive days at which
time the Borrower will be required to furnish such Borrowing
Base Certificate on a weekly basis, and
(iii) a certificate as to Inventory when and as
required by Section 4.8 hereof, satisfactory to the
Administrative Agent and substantially in the form attached
hereto as EXHIBIT H-2 (each a "Inventory Certificate"), and
(iv) a certificate as to accounts payable when and as
required by Section 2.12(b)(i) hereof, satisfactory to the
Administrative Agent and substantially in the form attached
hereto as EXHIBIT H-3 (each a "Accounts Payable Certificate").
(e) COMPANY REPORTS.
The Borrower shall deliver, or shall cause its
Subsidiaries to deliver, as applicable, to the Administrative Agent and
each Lender, no later than the date of the
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sending or filing thereof, copies of all proxy statements, financial
statements and reports that the Borrower sends to its stockholders
generally, and copies of all regular, periodic and special reports on
Form 10-K, 10-Q or 8-K (or successor forms), and all registration
statements on Form X-0, X-0 or S-3 (or successor forms), and amendments
thereto, that the Borrower or any Subsidiary of the Borrower files with
the Securities and Exchange Commission (or any foreign national or
provincial securities commission) or any governmental authority that
may be substituted therefor, or with any national securities exchange;
(f) MONTHLY PROJECTIONS.
On or before the beginning of each Fiscal Year of the
Borrower, the Borrower shall furnish to the Administrative Agent and
each Lender projected monthly consolidated balance sheets, income
statements, and cash flow statements for, at a minimum, such Fiscal
Year and the next succeeding Fiscal Year.
(g) OTHER INFORMATION.
The Borrower shall furnish to the Administrative
Agent and each Lender, promptly upon the Administrative Agent's written
request, such other information about the financial condition,
properties and operations of the Borrower and the Subsidiaries thereof
and any of their Employee Benefit Plans as the Administrative Agent or
any Lender may from time to time reasonably request.
(h) NOTICES.
The Borrower will cause the Responsible Officer of
the Borrower, to give the Administrative Agent and each Lender prompt
written notice whenever (and in any event within ten (10) Business Days
after): (i) the Borrower or any Subsidiaries thereof receives notice
from any court, agency or other governmental authority of any alleged
non-compliance with any Law or order which would reasonably be expected
to have or result in, if such noncompliance is found to exist, a
Material Adverse Effect, (ii) the Internal Revenue Service or any other
federal, state or local taxing authority shall allege any default by
the Borrower or the Subsidiaries thereof in the payment of any tax
material in amount or shall threaten or make any assessment in respect
thereof which, if resulting in a determination adverse to the Borrower,
would reasonably be expected to have or result in a Material Adverse
Effect, (iii) any litigation or proceeding shall be brought against the
Borrower or the Subsidiaries thereof before any court or administrative
agency which would, if successfully brought, reasonably be expected to
have or result in a Material Adverse Effect, (iv) any material adverse
change or development in connection with any such litigation
proceeding, or (v) such Responsible Officer reasonably believes that
any Potential Default or Event of Default has occurred or that any
other representation or warranty made herein shall for any reason have
ceased to be true and complete in any material respect.
(i) NOTICE OF DEFAULT UNDER ERISA.
If the Borrower shall receive notice from any ERISA
Regulator or otherwise have actual knowledge that a Default under ERISA
exists with respect to any Employee Benefit Plan, the Borrower shall
notify the Administrative Agent and each Lender of the occurrence of
such Default under ERISA, within ten (10) Business Days after receiving
such notice or obtaining such knowledge (the disclosures contained in
the Disclosure Schedule being such notice of each Default under ERISA
disclosed therein to the extent of the disclosure therein) and shall:
(i) so long as the Default under ERISA has
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not been corrected to the satisfaction of, or waived in writing by the
party giving notice, the Borrower shall thereafter treat as a current
liability (if not otherwise so treated) all liability of the Borrower
or the Subsidiaries thereof that would arise by reason of the
termination of or withdrawal from such Employee Benefit Plan if such
plan was then terminated, and (ii) within forty-five (45) days of the
receipt of such notice or obtaining such knowledge, furnish to the
Administrative Agent and each Lender a current consolidated balance
sheet of the Borrower with the amount of the current liability referred
to above.
(j) ENVIRONMENTAL REPORTING.
The Borrower shall promptly deliver to the
Administrative Agent and each Lender, and in any event within fifteen
(15) Business Days after receipt or transmittal by the Borrower or the
Subsidiaries thereof, as the case may be, copies of all material
communications with any government or governmental agency relating to
Environmental Laws and all material communications with any other
Person relating to Environmental Claims brought against such Person
which could, in either case, if successfully brought against the
Borrower or such Subsidiaries, reasonably be expected to result in a
Material Adverse Effect.
(k) MULTIEMPLOYER PLAN WITHDRAWAL LIABILITY.
The Borrower shall (i) once in each calendar year
beginning in 2001, request a current statement of withdrawal liability
from each Multiemployer Plan to which any of the Borrower or any ERISA
Affiliate is or has been obligated to contribute during such year and
(ii) within fifteen (15) days after the Borrower receives such current
statement, transmit a copy of such statement to the Administrative
Agent and each Lender.
8.2 AFFIRMATIVE COVENANTS.
(a) CORPORATE EXISTENCE.
The Borrower shall, and shall cause each of its
Subsidiaries to, at all times maintain its corporate existence, rights
and franchises, except as permitted under Section 8.3(a), maintain its
good standing in the jurisdiction of its incorporation, and qualify as
a foreign corporation in each jurisdiction where failure to qualify
could reasonably be expected to result in a Material Adverse Effect.
(b) FINANCIAL RECORDS.
The Borrower shall maintain at all times, true and
complete financial records with respect to the Borrower and its
Subsidiaries in accordance with GAAP, consistently applied, and,
without limiting the generality of the foregoing, make appropriate
accruals to reserves for estimated and contingent losses and
liabilities as required under GAAP.
(c) FINANCIAL EXAMINATIONS AND REVIEW.
The Borrower shall, at the Borrower's expense, upon
reasonable prior written notice from the Administrative Agent or any
Lender to the Borrower permit, and shall cause each of its Subsidiaries
to permit, the Administrative Agent or such Lender, as the case may be,
during normal business hours in the presence of an officer of the
Borrower: (i) to examine, with the guidance and supervision of the
Borrower, the
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Borrower's financial records and to make copies of and extracts from
such records and (ii) to consult with the Borrower's and Subsidiaries'
officers, directors, accountants, actuaries, trustees and plan
administrators, as the case may be, in respect of the Borrower's and
Subsidiaries' financial condition, each of which parties is hereby
authorized by the Borrower to make such information available to the
Administrative Agent or such Lender, as the case may be, to the same
extent that it would to the Borrower; PROVIDED, HOWEVER, that subject
to the following proviso, the aggregate number of such examinations
shall not exceed four (4) in any calendar year and shall not include
any audit of collateral which is provided for in Section 4.6 of this
Agreement; PROVIDED, further, HOWEVER, that during any period
commencing upon the occurrence of an Event of Default and continuing
for one year after the waiver (if any), in accordance with Section
15.1, of such Event of Default, the Administrative Agent and the
Lenders may exercise such access and other rights at any time the
Administrative Agent or any Lender deems such action reasonably
necessary or desirable.
(d) COMPLIANCE WITH LAW.
The Borrower will comply, and will cause each of its
Subsidiaries to comply, in all respects with all applicable provisions
of all Laws (whether statutory, administrative, judicial or other and
whether federal, state or local and excluding Environmental Laws to the
extent addressed in Section 8.2(e) of this Agreement) and every lawful
governmental order; PROVIDED, HOWEVER, that any alleged noncompliance
shall not be deemed to be a violation of this Section 8.2(d) so long
as: (i) such noncompliance by the Borrower or such Subsidiaries has not
resulted or would not reasonably be expected to result in a Material
Adverse Effect and (ii) either (A) appropriate corrective measures are
commenced within thirty (30) days after the non-compliance becomes
apparent or is alleged, and thereafter are being diligently pursued to
the satisfaction of the court, agency or other governmental authority
in question or (B) the alleged non-compliance is contested in good
faith by timely and appropriate proceedings effective to stay, during
the pendency of such proceedings, the enforcement thereof, the Borrower
or such Subsidiary has established appropriate reserves and taken such
other appropriate measures as may be required GAAP.
(e) COMPLIANCE WITH ENVIRONMENTAL LAWS.
The Borrower will use and operate its facilities and
properties, and cause each of its Subsidiaries to use and operate its
respective facilities and properties, in such a manner that no remedial
or similar obligation shall arise under any Environmental Law,
including any clean-up obligations, which when taken singly or with all
other such obligations, has resulted or could reasonably be expected to
result in a Material Adverse Effect or has otherwise resulted or could
reasonably be expected to result in liabilities or claims against any
or all of the Borrower in an amount exceeding One Million Dollars
($1,000,000); PROVIDED, HOWEVER, that, if any Environmental Claim (even
if such claim will not have a Material Adverse Effect or exceed the
liability limitations set forth above) is made or any such remedial or
similar obligation (even if such remedial or similar obligation would
not have a Material Adverse Effect or exceed the liability limitations
set forth above) arises, the Borrower and the Subsidiaries thereof
shall, at its own cost and expense, timely satisfy such claim or
remedial or similar obligation, PROVIDED, HOWEVER, that no such claim
or remedial or similar obligation need be satisfied if it is being
contested in good faith by appropriate proceedings promptly instituted
and diligently conducted and if appropriate reserves or other
appropriate provision, if any, as shall be required by GAAP have been
made on the books of the Borrower or the Subsidiaries thereof, as the
case may be. The Borrower will keep, and will cause each of its
Subsidiaries to keep, all necessary Environmental Permits in effect and
remain in
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compliance therewith, and handle all Hazardous Materials in compliance
with all applicable Environmental Laws, except to the extent that any
such lack of effectiveness or non-compliance, when taken singly or with
all other instances lack of effectiveness or non-compliance, has not
resulted and could not reasonably be expected to result in a Material
Adverse Effect or has otherwise resulted or liabilities or claims
against the Borrower or any Subsidiary thereof in an amount exceeding
One Million Dollars ($1,000,000). Neither the Borrower shall suffer to
exist, and shall not permit any of its Subsidiaries to suffer to exist,
an environmental condition which, when taken singly or with all other
such conditions, has resulted or could reasonably be expected to result
in a Material Adverse Effect or has otherwise resulted or could
reasonably be expected to result in liabilities or claims against the
Borrower or any Subsidiary thereof in an amount exceeding One Million
Dollars ($1,000,000). The Borrower shall not suffer or permit the
aggregate of all liabilities or claims against the Borrower or any
Subsidiaries thereof for any noncompliance with Environmental Laws,
Environmental Claim, environmental condition, remedial or similar
obligations under Environmental Laws, or lack of effectiveness of
Environmental Permits referenced in this Section and Section 7.9
hereof, which, when taken singly or together with all other such
noncompliance, Environmental Claims, environmental conditions, remedial
or similar obligations, and lack of effectiveness, has resulted or
could reasonably be expected to result in a Material Adverse Effect or
has resulted or could reasonably be expected to result in liabilities
or claims against the Borrower or any Subsidiaries thereof in an amount
exceeding One Million Dollars ($1,000,000).
(f) PROPERTIES.
Subject to Sections 6.5 and 8.3(a) of this Agreement,
the Borrower shall maintain, in all material respects, and shall cause
each of its Subsidiaries to maintain, in all material respects, all
assets necessary to its continuing operations in good working order and
condition, ordinary wear and tear excepted, and shall refrain, and
shall cause each of its Subsidiaries to refrain, from wasting or
destroying any such assets or any part thereof.
(g) USE OF PROCEEDS.
The proceeds of the Loans shall be used: (i) to
refinance the Existing Bank Indebtedness, (ii) refinance the Existing
TARN Indebtedness, (iii) to finance the purchase by the Borrower of the
outstanding balance of Accounts previously sold to Olympic Steel
Receivables L.L.C., (iv) to fund the payment of all transaction costs
and expenses in connection with the transactions contemplated hereby,
(v) to fund permitted Intercompany Loans by the Borrower, (vi) to
incorporate Existing Letters of Credit as Letters of Credit hereunder
and (vii) to fund working capital and other general corporate purposes
of the Borrower.
(h) COMPLIANCE WITH TERMS OF ALL MATERIAL CONTRACTS.
The Borrower shall perform and observe, and shall
cause each of its Subsidiaries to perform and observe, all the material
terms and provisions of each of the Material Business Agreements and
the Material License Agreements to which it is a party except those
which are subject to a good faith dispute provided such dispute shall
not reasonably be expected to result in a Material Adverse Effect. The
Borrower shall maintain each such Material Business Agreement and
Material License Agreement in full force and effect, and enforce, to
the extent that the Borrower or such Subsidiary, in its reasonable
judgment, determines to be appropriate, each such Material Business
Agreement and Material License Agreement in accordance with its terms.
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(i) TAXES.
The Borrower shall pay in full, and shall cause each
of its Subsidiaries to pay in full, prior in each case to the date when
penalties for the nonpayment thereof would attach, all taxes,
assessments and governmental charges and levies for which it may be or
become subject and all lawful claims therefor which, if unpaid, could
reasonably be expected to result in a Lien upon its property; PROVIDED,
HOWEVER, that no such tax, assessment, charge or levy need be paid so
long as and to the extent that: (i) it is contested in good faith and
by timely and appropriate proceedings effective, during the pendency of
such proceedings, to stay the enforcement of such taxes, assessments
and governmental charges and levies and (x) such stay prevents the
creation of any Lien (other than inchoate Liens for property taxes) or
(y) a bond has been provided which prevents the creation of any Lien
(other than inchoate Liens for property taxes) and (ii) appropriate
reserves, as required by GAAP, are made on the books of the Borrower
and its Subsidiaries, as applicable.
(j) INSURANCE.
The Borrower shall, on the Closing Date and within
five (5) Business Days of the request by the Administrative Agent
thereafter, provide evidence satisfactory to the Administrative Agent
that the Borrower has personal and real property, casualty, liability,
business interruption and product liability insurance as required by
Section 6.14 hereof, with the Administrative Agent listed as loss payee
and additional insured (as applicable).
(k) LICENSE TO THIRD PARTIES AND SUBSIDIARIES.
Except as disclosed in the Disclosure Schedule,
neither the Borrower nor any Subsidiaries thereof has any existing
license agreement as licensor with respect to Intellectual Property of
the Borrower or such Subsidiaries that does not provide, and neither
the Borrower nor such Subsidiary will execute any license agreement as
licensor with any Person (including, without limitation, any Subsidiary
of the Borrower) with respect to any such Intellectual Property that
does not provide that (i) upon an Event of Default and the acceleration
of the Obligations, such license agreement shall, upon the written
request of the Administrative Agent, terminate and (ii) such agreement
may only be amended as to material terms thereof with the express
written consent of the Administrative Agent, such consent not to be
unreasonably withheld or delayed.
(l) CERTAIN SUBSIDIARIES TO JOIN IN SUBSIDIARY GUARANTY
AND STOCK PLEDGE.
If, at any time after the date hereof: (a) the
Borrower creates or acquires any Material Subsidiary or (b) any
Subsidiary of the Borrower that is not a party to this Agreement as a
Subsidiary Guarantor is or becomes a Material Subsidiary, THEN the
Borrower shall (x) notify the Administrative Agent promptly in writing
of such event, identifying the Subsidiary in question and referring
specifically to the rights of the Administrative Agent and the Lenders
under this Section, and (y) cause such Material Subsidiary to execute
and deliver to the Administrative Agent for the benefit of the Lenders,
within thirty (30) days after the occurrence of such event (A) a
joinder supplement, in form and substance satisfactory to the
Administrative Agent and the Required Lenders, to this Agreement
pursuant to which such Material Subsidiary joins in this Agreement as a
Subsidiary Guarantor hereunder and (B) such evidence of the authority
of such Material Subsidiary to execute and deliver such documents as
the Administrative Agent shall reasonably request and (z) cause the
Borrower or any
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applicable Subsidiary thereof to execute a supplement, in form and
substance satisfactory to the Administrative Agent and the Required
Lenders, to the Subsidiary Pledge Agreement pursuant to which the stock
of such Material Subsidiary is pledged to the Administrative Agent to
secure the Secured Obligations.
(m) HEDGE AGREEMENTS.
The Borrower may enter into Hedge Agreements or
replacements therefore in order to provide protection to the Borrower
and such Subsidiaries from fluctuations and other changes in interest
rates, PROVIDED (i) the notional amount is acceptable to the
Administrative Agent, (ii) such arrangements do not expose the Borrower
to predominantly speculative risks unrelated to the amount of
Indebtedness intended to be subject to coverage on a notional basis
under all such Hedge Agreements and (iii) the counterparty for any such
Hedge Agreement may only be treated as a Designated Hedge Creditor
hereunder to the extent provided in this Agreement.
8.3 NEGATIVE COVENANTS.
(a) CONSOLIDATION, MERGER, SALE AND PURCHASE OF ASSETS.
Neither the Borrower shall, nor permit any
Subsidiaries thereof to, (i) merge or consolidate with or into, or
enter into any agreement to merge or consolidate with or into, any
other Person or otherwise be a party to any merger or consolidation;
(ii) purchase all or substantially all of the assets and business of
another Person; or (iii) except as set forth in the Disclosure
Schedule, lease as lessor, sell, sell-leaseback, license or otherwise
transfer (whether in one transaction or a series of transactions) any
of its assets (whether now owned or hereafter acquired); PROVIDED,
HOWEVER, that:
(A) the Borrower or any Subsidiary thereof may sell
or otherwise dispose of Inventory in the ordinary course of
its business; and
(B) (x) the Borrower or any Subsidiary thereof may:
(x) sell or otherwise dispose of its Equipment that is
obsolete, worn out, unnecessary or no longer used or useful in
the Borrower's or such Subsidiary Guarantor's business or that
is sold or otherwise disposed of in the ordinary course of
business, (y) the Borrower may sell its Real Estate and
related M&E currently located at the Borrower's Elk Grove,
Illinois facility, Winder, Georgia facility, and Chambersburg,
Pennsylvania facility and (z) Olympic Steel Iowa, Inc. may
sell its slitter currently located at its Bettendorf, Iowa
facility, in each such case, so long as the Remittances of Net
Cash Proceeds of any such sales of Equipment and M&E shall be
applied to the Secured Obligations in accordance with Section
5.3 of this Agreement, if applicable; and
(C) any Wholly-Owned Subsidiary of the Borrower may
merge or consolidate with or into, or dispose of its assets
to, the Borrower or any Subsidiary Guarantor (PROVIDED,
HOWEVER, that no such merger, consolidation, or disposition
may be effected into, with or to Olympic Steel Receivables,
LLC or Oly Steel Welding, Inc. (whether such disposal is by
means of lease, sale, sale-leaseback, license or another type
of transfer).
(b) CREDIT EXTENSIONS; PREPAYMENTS.
Neither the Borrower shall, nor permit any
Subsidiaries thereof to, (i) make prepayments or advance payments in
respect of Indebtedness to others (except to
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the Administrative Agent for the benefit of the Lenders in accordance
with this Agreement) or (ii) loan any money to, assume any Indebtedness
of or any other obligation of, or undertake any Guaranty Obligations
with respect to the Indebtedness of, any other Person, EXCEPT:
(A) the Borrower and its Subsidiaries may endorse
checks, drafts, and similar instruments for deposit or
collection in the ordinary course of business;
(B) so long as no Event of Default has occurred that
has not been waived in accordance with Section 15.1 hereof,
the Borrower and its Subsidiaries may pay scheduled principal
and interest payments of Indebtedness set forth on the
Disclosure Schedule pursuant to Section 8.3(c) of this
Agreement;
(C) the Borrower may make Intercompany Loans to the
Subsidiary Guarantors (other than to Oly Steel Welding, Inc.
or Olympic Steel Receivables, L.L.C.) for working capital and
ordinary corporate purposes consistent with past practices;
PROVIDED, HOWEVER, that the resulting Indebtedness of the
applicable Subsidiary Guarantor is, in the discretion of the
Administrative Agent, either subordinated to the Obligations,
pursuant to a subordination agreement in form and substance
satisfactory to the Administrative Agent, or assigned to the
Administrative Agent as additional Collateral;
(D) each Subsidiary Guarantor may make Intercompany
Payments to the Borrower pursuant to Section 5.4 hereof;
(E) each Subsidiary Guarantor may undertake Guaranty
Obligations to pay Guaranteed Obligations hereunder as
provided by Section 11 hereof;
(F) the Borrower may undertake Guaranty Obligations
as the guarantor of any other Letter of Credit Obligor as
provided in Section 2.11(l) hereof; and
(G) the Borrower may make a loan to Oly Steel
Welding, Inc. in order to permit Oly Steel Welding, Inc. to
make capital contributions to OLP LLC and Trumark Steel &
Processing LLC PROVIDED such loan shall be permitted only if
made prior to December 31, 2001 and shall not exceed Three
Hundred and Fifty Thousand Dollars ($350,000) in the
aggregate.
(c) INDEBTEDNESS.
The Borrower shall not, nor permit any Subsidiaries
thereof to, create, assume, incur, suffer to exist or have outstanding
at any time any Indebtedness or other debt of any kind or be or become
a Guarantor of or otherwise undertake or assume any Guaranty Obligation
with respect to any Indebtedness of any other Person; EXCEPT, that this
Section 8.3(c) shall not prohibit:
(i) the Secured Obligations;
(ii) ordinary course trade accounts payable or
customer deposits;
(iii) the Indebtedness on the Disclosure Schedule
(including the Indebtedness evidenced by the Guaranty by
Olympic Steel, Inc., Olympic Steel Lafayette, Inc., Olympic
Steel Minneapolis, Inc. and Oly Steel Welding, Inc. of the
Indebtedness of OLP LLC and the Indebtedness of Trumark Steel
and Processing, LLC to Comerica Bank), which disclosed
Indebtedness shall not be
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increased and which, in the case of such referenced
Guaranties, shall not exceed $10,000,000 in aggregate
contingent liability with respect to the Guaranty of OLP LLC
and $2,000,000 in aggregate contingent liability with respect
to the Guaranty of Trumark Steel and Processing, LLC;
(iv) Indebtedness in respect of currency or interest
rate swaps or similar transactions entered into in the
ordinary course of business and not for speculative purposes;
(v) Indebtedness secured by a Lien permitted by
clauses (H), (I), (K) or (N) of Section 8.3(d) hereof;
(vi) Indebtedness permitted by Sections 8.3(b) and
8.3(e) hereof;
(vii) any Indebtedness extending the maturity of,
refunding or refinancing (but not increasing), in whole or in
part, any of the Indebtedness permitted under this Section
8.3(c);
(viii) Indebtedness of any Subsidiary Guarantor
consisting of its obligation to pay Guaranteed Obligations
hereunder as provided by Section 11 of this Agreement;
(ix) Indebtedness of the Borrower to any of the
Subsidiary Guarantors in connection with Intercompany Payments
to the Borrower pursuant to Section 5.4 hereof (to the extent
constituting prepayments under the Subsidiary Guaranty to the
extent permitted by Section 8.3(b) hereof); and
(x) Indebtedness of Oly Steel Welding, Inc. to the
Borrower in connection with the loan by the Borrower to Oly
Steel Welding, Inc. in order to permit Oly Steel Welding, Inc.
to make capital contributions to OLP LLC and Trumark Steel &
Processing LLC PROVIDED such Indebtedness shall be permitted
only if such loan is made prior to December 31, 2001 and shall
not exceed Three Hundred and Fifty Thousand Dollars ($350,000)
in the aggregate.
(d) LIENS; LEASES.
The Borrower shall not, nor permit any Subsidiaries
thereof to, (i) acquire or hold any assets or property subject to any
Lien, (ii) sell or otherwise transfer any Accounts, whether with or
without recourse, except for assignments of defaulted Accounts without
recourse for purposes of collection in the ordinary course of business,
(iii) suffer or permit any property now owned or hereafter acquired by
it to be or become encumbered by a Lien or (iv) lease as lessee any
personal or real property under any operating lease; PROVIDED, HOWEVER,
that this Subsection shall not prohibit:
(A) any lien for a tax, assessment or government
charge or levy for taxes, assessments or charges not yet due
and payable or not yet required to be paid pursuant to Section
8.2(i);
(B) any deposit or cash pledges securing only
workers' compensation, unemployment insurance or similar
obligations (other than Liens arising under ERISA) in the
ordinary course of business;
(C) any mechanic's, carrier's, landlord's or similar
common law or statutory lien incurred in the ordinary course
of business for amounts that are not
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yet due and payable or which are being diligently contested in
good faith, so long as the Administrative Agent has been
notified thereof and adequate reserves are maintained by the
Borrower for their payment;
(D) zoning or deed restrictions, public utility
easements, rights of way, minor title irregularities and
similar matters relating to any real property of the Borrower
or its Subsidiaries, in all such cases having no effect which
is materially adverse as a practical matter on the ownership
or use of any such Real Estate in question, as such property
is used in the ordinary course of business of by the Borrower
or its Subsidiaries;
(E) any Lien which arises in connection with
judgments or attachments (1) the occurrence of which does not
constitute an Event of Default under Section 9.11, (2) the
execution or other enforcement of such Lien is effectively
stayed and the claims secured thereby are being actively
contested in good faith and by appropriate proceedings and (3)
which is junior in priority to the Liens of the Administration
Administrative Agent securing the Secured Obligations from
time to time outstanding;
(F) deposits or cash pledges securing performance of
contracts, bids, tenders, leases (other than Capitalized
Leases), statutory obligations, surety and appeal bonds (other
than contracts for the payment of Indebtedness for borrowed
money) arising in the ordinary course of business;
(G) any Lien in favor of the Administrative Agent
created pursuant to the Loan Documents for the ratable benefit
of the Administrative Agent (in its capacity as Administrative
Agent), the Lenders, the Letter of Credit Issuer or any
Designated Hedge Creditor;
(H) any Lien created or assumed in purchasing,
constructing or improving any Real Estate or to which any Real
Estate is subject when purchased; PROVIDED, HOWEVER, that: (x)
the mortgage, security interest or other lien is confined to
the property in question and (y) the Indebtedness secured
thereby does not exceed the total cost of the purchase,
construction or improvement and (z) the aggregate outstanding
Indebtedness of the Borrower secured by such Liens (when taken
together with any secured Indebtedness permitted to be secured
pursuant to clause (K) of this subsection) shall not at any
time exceed One Million Dollars ($1,000,000) in the aggregate;
PROVIDED, HOWEVER that (A) the Liens in favor of GE Capital
Public Finance, Inc. on the Chambersburg, Pennsylvania Real
Estate of the Borrower and in favor of Fifth Third Bank on the
Winder, Georgia Real Estate of the Borrower shall be permitted
and not taken into account in determining compliance with this
covenant and (B) the Liens otherwise disclosed on the
Disclosure Schedule as existing on the Closing Date shall not
be taken into account in determining compliance with this
covenant;
(I) any operating lease entered into by the Borrower
as lessee; PROVIDED; HOWEVER, that the scheduled rental
payments in respect to all such leases of the Borrower (when
taken together with all such leases of the Borrower) shall not
at any time exceed One Million Dollars ($1,000,000) in the
aggregate during any Fiscal Year of the Borrower; PROVIDED,
HOWEVER that the aggregate rental payments obligations of the
Borrower otherwise disclosed on the Disclosure Schedule as
existing on the Closing Date shall not be taken into account
in determining compliance with this covenant
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(J) any transfer of a check or other medium of
payment for deposit or collection, or any similar transaction
in the ordinary course of business;
(K) any Lien (including any Lien in respect of a
Capitalized Lease of personal property) which is created in
connection with the purchase of personal property; PROVIDED,
HOWEVER, that: (x) the Lien is confined to the property in
question, (y) the Indebtedness secured thereby does not exceed
the total cost of the purchase, and (z) the aggregate
outstanding Indebtedness secured by such Liens (when taken
together with any secured Indebtedness permitted to be secured
pursuant to clause (H) of this subsection and when taken
together with the aggregate Indebtedness of the Borrower) does
not at any time exceed One Million Dollars ($1,000,000) in the
aggregate; PROVIDED, HOWEVER that: (A) the Liens in favor of
GE Capital Public Finance, Inc. on Equipment of the Borrower
located at its Chambersburg, Pennsylvania plant and Fifth
Third Bank on Equipment of the Borrower located at its Winder,
Georgia plant shall be permitted and not taken into account in
determining compliance with this covenant and (B) the Liens
otherwise disclosed on the Disclosure Schedule as existing on
the Closing Date shall not be taken into account in
determining compliance with this covenant;
(L) security deposits to secure the performance of
operating leases and deposits received from customers, in each
case in the ordinary course of business;
(M) Liens securing the replacement, extension or
renewal of any Indebtedness permitted to be refinanced by
Section 8.3(c) hereof so long as such Lien is upon and limited
to the same property previously subject thereto;
(N) any Lien against assets of Subsidiary Guarantors
in favor of the Borrower securing Intercompany Loans; PROVIDED
such Lien is, in the discretion of the Administrative Agent,
either subordinated to the Obligations, pursuant to a
subordination agreement in form and substance satisfactory to
the Administrative Agent, or assigned to the Administrative
Agent as additional Collateral; or
(O) any existing Lien fully disclosed in the
Disclosure Schedule and accepted by the Administrative Agent.
(e) INVESTMENTS.
Other than as disclosed in the Disclosure Schedule or
as permitted by Section 8.3(b) or Section 8.3(c) hereof, the Borrower
shall not, nor permit any of its Subsidiaries to, (i) make or hold any
investment in any common stocks, bonds or securities of any Person, or
make any further capital contribution to any Person, other than (x) the
common stock of its Subsidiaries existing on the Closing Date and the
capital contributions therein outstanding as of the Closing Date, (y)
notes or securities issued by a customer of the Borrower or its
Subsidiaries in connection with a proceeding in respect of the
Financial Impairment of such customer or (ii) be or become a party to
any joint venture or other partnership; PROVIDED, HOWEVER that (A) the
Borrower may be party to contract joint venture agreements not
involving equity investments in or the purchase of debt instruments
from the joint venture entity, (B) Oly Steel Welding, Inc. may be a
party to the following joint ventures: OLP LLC and Trumark Steel and
Processing, LLC, (C) Olympic Steel, Inc. and Olympic Steel Receivables,
Inc. may remain members of Olympic Steel Receivables, LLC, PROVIDED
such entity remains inactive unless otherwise consented to by the
Required Lenders and (D) Oly Steel Welding, Inc. may make capital
contributions to OLP LLC and Trumark Steel & Processing LLC PROVIDED
such capital
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contributions shall be permitted to be made only until December 31,
2001 and shall not exceed Three Hundred and Fifty Thousand Dollars
($350,000) in the aggregate.
(f) DIVIDENDS; MANAGEMENT FEE.
The Borrower shall not make or commit itself to make,
nor permit any of its Subsidiaries to make or commit to make, any
Distribution to its shareholders or members at any time or pay or
commit itself to pay any management fee to any Affiliate of the
Borrower or its Subsidiaries at any time; EXCEPT, that the Subsidiaries
may declare and pay cash dividends to the Borrower in the ordinary
course of business.
(g) CHANGE IN NATURE OF BUSINESS.
The Borrower shall not, nor permit any Subsidiaries
thereof to, make any material change in the nature of its business as
carried on at the date hereof; PROVIDED, HOWEVER, that operation of
complementary lines or business (including machining and tooling
operations) shall not be deemed to be a change in the nature of
business.
(h) CHARTER AMENDMENTS.
The Borrower shall not amend any of its Charter
Documents nor permit amendment of the Charter Documents of any of its
Subsidiaries if such amendment would conflict with or cause a Potential
Default under this Agreement.
(i) COMPLIANCE WITH ERISA.
The Borrower shall not, nor permit any Subsidiaries
thereof or any ERISA Affiliate to: (i) engage in any transaction in
connection with which the Borrower or any ERISA Affiliate could
reasonably be expected to be subject to either a civil penalty assessed
pursuant to section 502(i) of ERISA or a tax imposed by section 4975 of
the Internal Revenue Code, terminate or withdraw from any Employee
Benefit Plan (other than a Multiemployer Plan) in a manner, or take any
other action with respect to any such Employee Benefit Plan (including,
without limitation, a substantial cessation of business operations or
an amendment of an Employee Benefit Plan within the meaning of section
4041(e) of ERISA), which could reasonably be expected to result in any
liability of any or all of the Borrower or any ERISA Affiliate to the
PBGC, to the Department of Labor or to a trustee appointed under
section 4042(b) or (c) of ERISA, incur any liability to the PBGC on
account of a withdrawal from or a termination of an Employee Benefit
Plan under section 4063 or 4064 of ERISA, incur any liability for
post-retirement benefits under any and all welfare benefit plans (as
defined in section 3(1) of ERISA) other than as required by applicable
statute, fail to make full payment when due of all amounts which, under
the provisions of any Employee Benefit Plan or applicable Law, the
Borrower or any ERISA Affiliate is required to pay as contributions
thereto, or permit to exist any Accumulated Funding Deficiency, whether
or not waived, with respect to any Employee Benefit Plan (other than a
Multiemployer Plan); PROVIDED, HOWEVER, that such engagement,
termination, withdrawal, action, incurrence, failure or permitting
shall not be deemed to have violated this clause (i) UNLESS any such
engagement, termination, withdrawal, action, incurrence, failure or
permitting (A) has resulted or could reasonably be expected to result
in a Material Adverse Effect or (B) has otherwise resulted or could
reasonably be expected to result in liabilities or claims against any
or all of the Borrower in an amount exceeding Five Hundred Thousand
Dollars ($500,000); (ii) at any time permit the termination of any
defined benefit pension plan intended to be qualified under section
401(a) and 501(a) of the Internal Revenue Code; PROVIDED, however, that
such termination shall not be deemed to have violated this clause (ii)
UNLESS (A) the value of
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any benefit liability (as defined in section 4001(a)(16) of ERISA) upon
the termination date of any such terminated defined benefit pension
plans of the Borrower, the Borrower's Subsidiaries, and their ERISA
Affiliates exceeds the then current value (as defined in section 3 of
ERISA) of all assets in such terminated defined benefit pension plans
by an amount in excess of Five Hundred Thousand Dollars ($500,000), or
(B) the payment of such amount has resulted or could reasonably be
expected to result in a Material Adverse Effect or has resulted or
could reasonably be expected to result in liabilities or claims against
the Borrower or any Subsidiary thereof in an amount exceeding Five
Hundred Thousand Dollars ($500,000); or (iii) if the Borrower or any
ERISA Affiliate becomes obligated under a Multiemployer Plan (except
with respect to the potential liabilities now existing as disclosed in
the Disclosure Schedule), effect a complete or partial withdrawal such
that the Borrower, such Subsidiaries thereof, or their ERISA Affiliates
incur Withdrawal Liability under Title IV of ERISA with respect to
Multiemployer Plans or otherwise have liability under Title IV of
ERISA; PROVIDED, HOWEVER, that the incurrence of such Withdrawal
Liability or other liability under Title IV of ERISA shall not be
deemed to be a violation of this clause (iii) UNLESS (A) the amount of
the payment by any or all of the Borrower of such Withdrawal Liability
or other liability has resulted or could reasonably be expected to
result in a Material Adverse Effect or (B) has otherwise resulted or
could reasonably be expected to result in liabilities or claims against
the Borrower or any Subsidiary thereof in an amount exceeding Five
Hundred Thousand Dollars ($500,000).
(j) REGULATION U COMPLIANCE.
The Borrower shall not use any portion of the
proceeds of any Loan for the purpose of purchasing or carrying any
Margin Stock or for any other purpose in violation of any requirement
of Law or of the terms and conditions of this Agreement.
(k) ACCOUNTING CHANGES.
The Borrower will not, nor permit any of its
Subsidiaries to, make or permit any change in its accounting policies
or financial reporting practices and procedures, except as required or
permitted by GAAP or as required by applicable law, in each case as to
which the Borrower shall have delivered to the Administrative Agent
prior to the effectiveness of any such change a report prepared by a
Responsible Officer of the Borrower describing such change and
explaining in reasonable detail the basis therefor and effect thereof.
(l) ARM'S-LENGTH TRANSACTIONS.
Except as set forth on the Disclosure Schedule, the
Borrower will not, nor permit any of its Subsidiaries to, enter into or
permit to exist any transaction (including, without limitation, any
transaction involving the investment, purchase, sale, lease, transfer
or exchange of any property or the rendering of any service) with any
Affiliate of the Borrower or such Subsidiaries except in the ordinary
course of the business of the Borrower or such Subsidiaries and upon
fair and reasonable terms not less favorable to the Borrower or such
Subsidiaries than would be usual and customary in transactions with
persons who are not such Affiliates; PROVIDED, HOWEVER, that any
payment made pursuant to Section 8.3(f) hereof shall be permitted by
this Section 8.3(l).
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8.4 FINANCIAL COVENANTS.
(a) MINIMUM EXCESS AVAILABILITY.
The Borrower shall not permit Excess Availability of
the Borrower and the Subsidiary Guarantors to be less than $10,000,000
at any time.
(b) MINIMUM CONSOLIDATED FIXED CHARGE COVERAGE RATIO.
The Borrower shall not permit the Consolidated Fixed
Charge Coverage Ratio of the Borrower and its consolidated Subsidiaries
as of the end of any Fiscal Month ending during the period commencing
on and after December 31, 2002 until and including March 31, 2003, to
be less than 1.10 to 1.00, and during the period commencing on April 1,
2003 and continuing thereafter, to be less than 1.25 to 1.00, in each
case, for the Testing Period ending as of such Fiscal Month end.
For purposes of this Section 8.4(b), "Testing Period" shall mean, in
respect of each Fiscal Month ending on and after December 31, 2002, the
period consisting of the twelve (12) consecutive Fiscal Months then
ended (whether or not such Fiscal Months are all within the same Fiscal
Year).
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(c) MINIMUM CONSOLIDATED ADJUSTED EBITDA.
Upon the occurrence of a Covenant Compliance Event
which is continuing, commencing with Fiscal Month ending immediately
prior to the date such Covenant Compliance Event occurs and with
respect to which the Administrative Agent has received the financial
statements required hereunder and for each Fiscal Month thereafter
while such Covenant Compliance Event remains existing, the Borrower
shall not permit the Consolidated Adjusted EBITDA of the Borrower and
its Subsidiaries for each such Fiscal Month (determined for the Testing
Period then ending) to be less than the amount set forth below
corresponding to such Fiscal Month:
FISCAL MONTH ENDING CONSOLIDATED ADJUSTED EBITDA
FOR TESTING PERIOD THEN ENDING
July 31, 2001 $500,000
August 31, 2001 $2,100,000
September 30, 2001 $1,200,000
October 31,2001 $1,400,000
November 30, 2001 $1,400,000
December 31, 2001 $750,000
January 31, 2002 $1,100,000
February 28, 2002 $1,600,000
March 31, 2002 $2,700,000
April 30, 2002 $2,200,000
May 31, 2002 $2,800,000
June 30, 2002 $2,100,000
July 31, 2002 $1,000,000
August 31, 2002 $2,200,000
September 30, 2002 $1,600,000
October 31, 2002 $1,700,000
November 30, 2002 $1,400,000
For purposes of this Section 8.4(c), "Testing Period" shall mean, in
respect of each Fiscal Month ending prior to December 2002, the period
consisting of the Fiscal Month period then ended.
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(d) CONSOLIDATED CAPITAL EXPENDITURES.
The Borrower shall not permit the Consolidated Capital Expenditures
(including, for the purpose of calculating this Consolidated Capital
Expenditures covenant, any purchase money Indebtedness permitted under
Section 8.3(c) of this Agreement) of the Borrower and its consolidated
Subsidiaries to exceed: (i) for Fiscal Year ending December 31, 2001,
$5,000,000; for Fiscal Year ending December 31, 2002, $5,500,000 and
(iii) for Fiscal Year ending December 31, 2003, $3,500,000; PROVIDED,
HOWEVER, that, with respect to a given Fiscal Year, to the extent the
amount of Consolidated Capital Expenditures actually made in such
Fiscal Year is less than the amount of Consolidated Capital
Expenditures permitted to be made in such Year, such excess ("CapEx
Carryover") may be added to the permitted amount of Consolidated
Capital Expenditures in the next succeeding Fiscal Year. For purposes
of calculating compliance with this Section 8.4(d), the amount of
Capital Expenditures made during any Fiscal Year shall be calculated by
applying such amounts first against any CapEx Carryover available in
such Fiscal Year and next to the amount of Capital Expenditures
permitted in such Fiscal Year (without taking into account any such
CapEx Carryover). Any amount of CapEx Carryover not utilized in the
immediately succeeding Fiscal Year shall not be available in any
subsequent Fiscal Year.
SECTION 9 EVENTS OF DEFAULT.
The occurrence of any one or more of the following events
shall constitute an "Event of Default" hereunder:
9.1 PAYMENT.
Failure by the Borrower (a) to make payment of principal or
interest on the Loans when due or (b) to pay any other Obligation payable by the
Borrower when required to be paid hereunder to the extent such failure is not
remedied within three (3) Business Days after such required date of payment
hereunder or thereunder; or
9.2 REPRESENTATIONS AND WARRANTIES.
Any warranty or representation made or deemed made by the
Borrower or any Subsidiary Guarantor in respect of the Borrower, any Subsidiary
of the Borrower or any Subsidiary Guarantor in this Agreement, any other Loan
Document or any certificate, document or financial or other written statement
furnished at any time in compliance with this Agreement shall prove to have been
false or inaccurate when made or deemed made; or
9.3 REPORTING AND NOTICE PROVISIONS; VIOLATION OF CERTAIN
AFFIRMATIVE COVENANTS.
Failure by the Borrower or any Subsidiary Guarantor (in
respect of the Borrower, any Subsidiary of the Borrower, or any Subsidiary
Guarantor) to perform, keep or observe any other term, provision, condition or
covenant contained in this Agreement (other than those provisions, terms or
conditions referenced in Sections 9.1, 9.2, and 9.4 of this Agreement) or any
other Loan Document that is required to be kept or observed by the Borrower or
any Subsidiary Guarantor (in respect of the Borrower, any Subsidiary of the
Borrower, or any Subsidiary Guarantor) and such failure shall continue without
remedy for a period of thirty (30) Business Days; or
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9.4 VIOLATION OF NEGATIVE COVENANTS AND FINANCIAL COVENANTS.
Failure by the Borrower (in respect of the Borrower, any
Subsidiary of the Borrower, or any Subsidiary Guarantor) to perform, keep, or
observe any other term, provision, condition or covenant contained in Sections
4.2, 4.3, 4.4, 4.6, 4.7, 4.8, 4.9, 4.13 or 6.3 of this Agreement, or Sections
8.1(b) through 8.1(f) of this Agreement or Sections 8.2(a), 8.2(c), 8.3 or 8.4
of this Agreement which is required to be performed, kept, or observed by the
Borrower (in respect of the Borrower, any Subsidiary of the Borrower, or any
Subsidiary Guarantor); or
9.5 CROSS-DEFAULT; CALL ON GUARANTY.
(i) Failure by the Borrower or any Subsidiary of the Borrower
to make any payment on any Indebtedness of the Borrower or such Subsidiary
having a principal amount in excess of $500,000 or more, when the same becomes
due and payable (whether by scheduled maturity, required prepayment,
acceleration, demand or otherwise), or (ii) the occurrence of any other event or
the existence of any condition 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) the
declaration of any such Indebtedness to be due and payable, or the requiring of
any such Indebtedness to be prepaid or repurchased (other than by a regularly
scheduled required prepayment), prior to the stated maturity thereof, or (iv)
except with respect to employment agreements with officers or union agreements
(even if such agreement are disclosed by the Borrower to be Material Business
Agreements), default by the Borrower or any Subsidiary of the Borrower in
respect of any Material Business Agreement or any Material License Agreement
where such default (A) would permit the other party or parties to such agreement
to terminate such agreement and (B) has resulted or could reasonably be expected
to result in a Material Adverse Effect, or (v) demand on the Borrower or any
Subsidiary Guarantor for payment under the Guaranties of the indebtedness of OLP
LLC or Trumark Steel and Processing LLC to Comerica Bank; or
9.6 DESTRUCTION OF COLLATERAL.
The loss, theft, damage or destruction of any portion of the
Collateral having an aggregate value in excess of Five Hundred Thousand Dollars
($500,000), to the extent not insured by an insurance carrier which has
acknowledged coverage in the amount of the claim without any reservation of
rights or which has been ordered by a court of competent jurisdiction to pay
such claim (excluding any loss of Intellectual Property by reason of abandonment
where such abandonment is undertaken in good faith, pursuant to prudent business
practice and would reasonably be expected to result in a Material Adverse
Effect); or
9.7 MATERIAL ADVERSE EFFECT; CHANGE OF CONTROL.
The occurrence of any Material Adverse Effect or the
occurrence of any Change of Control; or
9.8 TERMINATION OF EXISTENCE.
The dissolution or termination of existence of the Borrower or
any Subsidiary Guarantor, but only to the extent not permitted under Section
8.3(a); or
9.9 FAILURE OF ENFORCEABILITY OF THIS AGREEMENT, CREDIT DOCUMENT;
SECURITY.
If: (a) any covenant, material agreement or any Secured
Obligation of the Borrower or any Subsidiary Guarantor contained in or evidenced
by this Agreement or any of the other Loan Documents shall cease to be
enforceable, or shall be determined to be unenforceable,
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in accordance with its terms, or (b) the Borrower or any Subsidiary Guarantor
shall deny or disaffirm its obligations under this Agreement or any of the other
Loan Documents or any of the Liens granted in connection therewith, or (c) any
Liens in favor of the Administrative Agent or the Lenders granted in this
Agreement or any of the other Loan Documents shall be determined to be void,
voidable or invalid, or are subordinated or not otherwise given the priority
contemplated by this Agreement, or (d) any perfected Liens granted in favor of
the Administrative Agent or the Lenders shall be determined to be unperfected
except in connection with sales of Inventory in the normal course of the
business of the Borrower or the Subsidiary Guarantor, as expressly contemplated
and permitted by this Agreement and the other Loan Documents and except to the
extent that the aggregate book value of the Collateral secured by such
unperfected Liens does not exceed $250,000 in the aggregate or (e) any
Subsidiary Guarantor shall revoke or permit a payment default under such
Subsidiary Guarantor's Subsidiary Guaranty; or
9.10 ERISA.
If: (a) the Borrower, its Subsidiaries, or any of their ERISA
Affiliates or any other Person institutes any steps to terminate an Employee
Benefit Plan of the Borrower, such Subsidiaries, or such ERISA Affiliates, which
Employee Benefit Plan is subject to Title IV of ERISA and, as a result of such
termination, the Borrower, its Subsidiary, or ERISA Affiliate is required to
make or could reasonably be expected to be required to make, a contribution to
such Employee Benefit Plan the payment of which (i) when taken together with all
like termination payments suffered by, the Borrower, its Subsidiaries or such
ERISA Affiliates, either has resulted in, or could reasonably be expected to
result in, a Material Adverse Effect or (ii) has resulted in, or could
reasonably be expected to result in, liabilities or claims against the Borrower
or any Subsidiaries thereof in an amount exceeding $500,000, or (b) the
Borrower, such Subsidiary or such ERISA Affiliate fails to make a contribution
to any Employee Benefit Plan which failure would be sufficient to give rise to a
Lien under Section 302(f) of ERISA; or
9.11 JUDGMENTS.
Any money judgment, writ or warrant of attachment or similar
process involving an amount, when aggregated with all such money judgment, writ
or warrant of attachment or similar process outstanding at such time, in excess
of $500,000, to the extent not insured by an insurance carrier which has
acknowledged coverage in the amount of the claim without any reservation of
rights or which has been ordered by a court of competent jurisdiction to pay
such claim, is entered or filed against any or all of the Borrower or any
Subsidiary thereof or against any of their respective assets and is not
released, discharged, vacated, fully bonded or stayed within thirty (30) days
after such judgment, writ or warrant of attachment or similar proceeding is
entered; or
9.12 FORFEITURE PROCEEDINGS.
An adjudication against the Borrower or any Subsidiary of the
Borrower or in any criminal proceedings requiring the Borrower's, or such
Subsidiary's forfeiture of any asset or assets having, either individually or in
the aggregate, a value in excess of Fifty Thousand Dollars ($50,000); or
9.13 FINANCIAL IMPAIRMENT.
The Financial Impairment of the Borrower any Subsidiary
Guarantor, or any other Material Subsidiary.
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SECTION 10 REMEDIES.
10.1 ACCELERATION; TERMINATION.
Upon the occurrence of an Event of Default described in
Sections 9.1 through 9.12 above, inclusive, the Administrative Agent may, and,
at the written request of the Required Lenders, shall, without presentment,
demand or notice of any kind all of which are hereby expressly waived by the
Borrower: (a) declare all of the Obligations due or to become due from the
Borrower to the Administrative Agent and the Lenders, whether under this
Agreement, the Notes or otherwise, immediately due and payable, anything in the
Notes or other evidence of the Obligations or in any of the other Loan Documents
to the contrary notwithstanding, (b) terminate each Lender's Revolving Credit
Commitment whereupon no Lender shall have any further obligation to make any
Loan, (c) terminate the Designated Letter of Credit Issuer's obligation to issue
Letters of Credit whereupon the Designated Letter of Credit Issuer shall not
have any further obligation to issue any Letter of Credit hereunder and (d)
terminate each Lender's obligation to participate in Letters of Credit issued
after such termination of the obligation of the Designated Letter of Credit
Issuer to issue Letters of Credit. In the circumstance that both the Required
Lenders and the Required Term B Lenders have requested the Administrative Agent
to take the foregoing actions, the Administrative Agent shall follow any
specific instructions of the Required Lenders as to the actions to be taken to
the extent not within the sole discretion of the Administrative Agent.
10.2 AUTOMATIC ACCELERATION AND TERMINATION.
If any Event of Default referred to in Section 9.13 above
shall occur, (a) each Lender's Commitments shall automatically and immediately
terminate (if not already expired or terminated by the Borrower or terminated
pursuant to this Section 10) whereupon no Lender shall have any obligation
thereafter to make any Loan hereunder, (b) each Designated Letter of Credit
Issuer's obligation to issue Letters of Credit shall immediately terminate
whereupon the Designated Letter of Credit Issuer shall not have any obligation
thereafter to issue any Letters of Credit hereunder, and (c) all of the
Obligations and the Letter of Credit Obligations then owing to the
Administrative Agent, the Lenders or the Designated Letter of Credit Issuer
shall thereupon become and thereafter be immediately due and payable in full,
all without any presentment, demand or notice of any kind, which are hereby
waived by the Borrower.
10.3 ACCELERATION OF TERM B LOANS.
In the event either (i) the Revolving Credit Loans have been
declared due and payable pursuant to Section 10.2 or (ii) fifteen (15) Business
Days have elapsed since the occurrence of a Term B Loan Event which is
continuing and has not been waived by Required Term B Lenders in accordance with
Section 15.1 hereof, the Administrative Agent shall, at the request of Required
Term B Lenders, or may with the consent of the Required Term B Lenders, by
notice to the Borrower (with a copy to each Lender), and without presentment,
demand or other notice of any kind all of which are hereby expressly waived by
the Borrower: (A) declare the Term B Loans then outstanding, all interest
thereon and all other Obligations payable under this Agreement with respect to
the Term B Loans immediately due and payable, anything in the Term B Notes or in
any other Loan Document to the contrary notwithstanding, and (B) exercise
remedies provided by applicable Law. If the Revolving Credit Loans are declared
to be due and payable pursuant to Section 10.1 or 10.2, then the Administrative
Agent shall follow the instructions of the Required Lenders subject to the
provisions of this Agreement.
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10.4 GENERAL RIGHTS AND REMEDIES OF ADMINISTRATIVE AGENT AND THE
LENDERS.
With respect to the Collateral, the Administrative Agent shall
have all of the rights and remedies of a secured party under the UCC or under
other applicable Law. The Administrative Agent, the Lenders and the Designated
Letter of Credit Issuer shall have all other legal and equitable rights to which
each may be entitled, all of which rights and remedies shall be cumulative, and
none of which shall be exclusive, to the extent permitted by law, in addition to
any other rights or remedies contained in this Agreement or in any of the other
Loan Documents. Each Lender and each Designated Letter of Credit Issuer hereby
expressly agree that, unless requested by the Administrative Agent, upon the
concurrence of the Required Lenders, such Lender and the Designated Letter of
Credit Issuer will not take or cause to be taken, in respect of the Loans or the
other Obligations or the Collateral, any action or remedy that is independent
from the actions or remedies taken or to be taken by the Administrative Agent,
except for any actions taken by any Lender or any Designated Letter of Credit
Issuer necessary to preserve its rights in connection with any Event of Default
described in Section 9.13 of this Agreement.
10.5 ADDITIONAL REMEDIES.
After the Obligations and/or the Letter of Credit Obligations
shall have been declared by the Administrative Agent to be or shall have
otherwise hereunder become immediately due and payable, the Administrative Agent
may, in its sole discretion, and, upon direction of the Required Lenders, shall,
exercise the following rights and remedies to the extent permitted by applicable
law and in addition to any other right or remedy provided for in this Agreement:
(a) POSSESSION OF COLLATERAL.
The Administrative Agent shall have the right to take
immediate possession of the Collateral and all Proceeds relating to
such Collateral and: (i) require the Borrower and each of the
Subsidiary Guarantors, at the Borrower's expense, to assemble the
Collateral of the Borrower and the Subsidiary Guarantors and make it
available to the Administrative Agent at such facilities of the
Borrower and the Subsidiary Guarantor as the Administrative Agent shall
designate or (ii) enter any of the premises of the Borrower or the
Subsidiary Guarantors or wherever any Collateral shall be located and
to keep and store the same on such premises until sold. If the premises
on which the Collateral are located is owned or leased by the Borrower
or the Subsidiary Guarantor, then the Borrower or such Subsidiary
Guarantor shall not charge the Administrative Agent for storage of such
Collateral on such premises.
(b) FORECLOSURE OF LIENS.
The Administrative Agent shall have the right to
foreclose the Liens created under this Agreement and each of the other
Loan Documents or under any other agreement relating to the Collateral.
(c) DISPOSITION OF COLLATERAL.
The Administrative Agent shall have the right to sell
or to otherwise dispose of all or any Collateral in its then condition,
or after any further processing thereof, at public or private sale or
sales, wholesale dispositions, or sales pursuant to one or more
contracts, with such notice as may be required by law, in lots or in
bulk, for cash or on credit, all as the Administrative Agent, in its
discretion, may deem advisable. The Borrower and each Subsidiary
Guarantor acknowledges and covenants that ten (10) days written notice
to the Borrower or such Subsidiary Guarantor of any public or private
sale
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or other disposition of Collateral shall be reasonable notice thereof,
and such sale shall be at the Borrower's or such Subsidiary Guarantor's
premises or at such other locations where the Collateral then is
located, or as otherwise determined by the Administrative Agent. The
Administrative Agent shall have the right to conduct such sales on the
Borrower's or the Subsidiary Guarantors' premises, without charge
therefor, and such sales may be adjourned from time to time in
accordance with applicable law without further requirement of notice to
the Borrower or such Subsidiary Guarantor. Each Lender and each
Designated Letter of Credit Issuer shall have the right to bid or
credit bid any such sale on its own behalf.
(d) APPLICATION OF COLLATERAL; APPLICATION OF LIQUIDATION
PROCEEDS.
The Administrative Agent, with or without proceeding
with sale or foreclosure or demanding payment of the Obligations,
shall, without notice, at any time, appropriate and apply to the
Secured Obligations any and all Collateral of the Borrower and the
Subsidiary Guarantors in the possession of the Administrative Agent,
the Lenders or a Designated Letter of Credit Issuer as follows.
(A) PRIORITY REVOLVING CREDIT COLLATERAL. Subject to
Section 5.3 hereof with respect to Collections and Remittances
of Net Cash Proceeds and Intercompany Payments, all monies
received by the Administrative Agent or any Lender or a
Designated Letter of Credit Issuer from the exercise of
remedies under this Agreement or the other Loan Documents with
respect to Priority Revolving Credit Collateral shall, unless
otherwise required by the terms of the other Loan Documents or
by applicable law, be applied as follows:
(i) FIRST, to the payment of all expenses (to the
extent not otherwise paid by the Borrower) incurred
by the Administrative Agent and the Lenders in
connection with the exercise of such remedies,
including, without limitation, all reasonable costs
and expenses of collection, reasonable documented
attorneys' fees, court costs and any foreclosure
expenses;
(ii) SECOND, to the payment pro rata of any fees then
accrued and payable to the Administrative Agent or
any Lender under this Agreement;
(iii) THIRD, to the payment pro rata of interest then
accrued on the outstanding Revolving Credit Loans of
the Borrower;
(iv) FOURTH, to the payment pro rata of the principal
balance then owing on the outstanding Revolving
Credit Loans as follows: (A) first, to Revolving
Credit Loans comprised of Permitted Special Advances,
(B) second, to Revolving Credit Loans comprised of
Swing Line Settlement Loans, and (C) third, to the
ratable payment of such other Revolving Credit Loans
in such order as the Administrative Agent may choose
in its sole discretion;
(v) FIFTH, as cash collateral security against the
aggregate undrawn amount of any Letter of Credit
outstanding for the account of the Borrower and any
other Letter of Credit Obligations (whether then or
thereafter anticipated to be outstanding) of the
Borrower;
(vi) SIXTH, the amounts then due under Designated
Hedge Agreements to the Designated Hedge Creditor,
subject to confirmation by the
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Administrative Agent of any calculations of
termination or other payment amounts being made in
accordance with normal industry practice;
(vii) SEVENTH, to the payment pro rata of all other
amounts owed by the Borrower to the Administrative
Agent or any Lender or the Designated Letter of
Credit Issuer under this Agreement or any other Loan
Document and to any counterparties under Designated
Hedge Agreements of the Borrower, and if such
proceeds are insufficient to pay such amounts in
full, to the payment of such amounts pro rata;
(viii) EIGHTH, to the payment pro rata of interest
then accrued on the outstanding Terms B Loans of the
Borrower;
(ix) NINTH, to the payment pro rata of (A) the
principal balance then owing on the outstanding Term
B Loans in such order as the Administrative Agent may
choose in its sole discretion; and
(x) LAST, any remaining surplus after all of the
Secured Obligations have been paid in full, to the
Borrower or to whomsoever shall be lawfully entitled
thereto.
(B) PRIORITY TERM B COLLATERAL. Subject to Section
5.3 hereof with respect to Collections and Remittances of Net
Cash Proceeds and Intercompany Payments, all monies received
by the Administrative Agent or any Lender or a Designated
Letter of Credit Issuer from the exercise of remedies under
this Agreement or the other Loan Documents with respect to
Priority Term B Collateral shall, unless otherwise required by
the terms of the other Loan Documents or by applicable law, be
applied as follows:
(i) FIRST, to the payment of all expenses (to the
extent not otherwise paid by the Borrower) incurred
by the Administrative Agent and the Term B Lenders in
connection with the exercise of such remedies,
including, without limitation, all reasonable costs
and expenses of collection, reasonable documented
attorneys' fees, court costs and any foreclosure
expenses;
(ii) SECOND, to the payment pro rata of interest then
accrued on the outstanding Term B Loans of the
Borrower;
(iii) THIRD, to the payment pro rata of the principal
balance then owing on the outstanding Term B Loans in
such order as the Administrative Agent may choose in
its sole discretion;
(iv) FOURTH, to the payment pro rata of any fees then
accrued and payable to the Administrative Agent or
any Lender under this Agreement;
(v) FIFTH, with respect to Priority Term B Collateral
other than real estate, to the payment pro rata of
the principal balance then owing on the outstanding
Revolving Credit Loans as follows: (A) first, to
Revolving Credit Loans comprised of Permitted Special
Advances, (B) second, to Revolving Credit Loans
comprised of Swing Line Settlement Loans, and (C)
third, to the ratable payment of such other Revolving
Credit Loans in such order as the Administrative
Agent may choose in its sole discretion; and
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(vi) Finally, any remaining surplus, after all of the
Term B Loans have been paid in full and the Lenders
have been paid as provided in clause V hereof, to the
Borrower or for application on behalf of the Borrower
pursuant to Section 5.1(c) to Revolving Credit Loans
or to whomsoever shall be lawfully entitled thereto.
10.6 SET-OFF.
If any Event of Default referred to in SECTION 9 of this
Agreement shall occur which is continuing and has not been waived in accordance
with Section 15.1 hereof, each Lender, each Designated Letter of Credit Issuer
and each Affiliate thereof shall have the right (in addition to such other
rights as it may have by operation of Law or otherwise but subject to Section
10.14 of this Agreement) at any time to set off against and to appropriate to
and apply toward the payment of the Obligations and the Letter of Credit
Obligations, and all other liabilities under this Agreement and the other Loan
Documents then owing to it (and any participation purchased or to be purchased
pursuant to Section 10.14 below) whether or not the same shall then have
matured, any and all deposit (general or special) and any other Indebtedness at
any time held or owing by such Lender or each Affiliate thereof (including
branches and agencies thereof wherever located) to or for the credit or account
of the Borrower, all without notice to or demand upon the Borrower or any other
Person, all such notices and demands being hereby expressly waived.
10.7 ACTIONS IN RESPECT OF THE LETTERS OF CREDIT UPON DEFAULT.
Upon the occurrence of an Event of Default which is continuing
and has not been waived in accordance with Section 15.1 hereof, to the extent
that any Letters of Credit have been issued which then are outstanding, the
Administrative Agent, for the benefit of the Designated Letter of Credit Issuer
and the Lenders, may, and upon the direction of the Required Lenders shall
(whether in addition to taking any of the actions described in this Section 10
or otherwise), make demand upon Borrower to, and forthwith upon such demand the
Borrower will, pay to the Administrative Agent in same day funds and in the
currency in which such Letter of Credit is denominated, for deposit in a special
Cash Concentration Account (the "Letter of Credit Collateral Account"), an
amount equal to 105% of the maximum amount available to be drawn under the
Letters of Credit (i) to secure the Letter of Credit Obligations and (ii) upon
payment in full thereof, to secure any other outstanding Secured Obligations. In
the event that the Borrower shall not deposit such funds upon demand by the
Administrative Agent, the Administrative Agent may, in its sole discretion,
deposit any funds of the Borrower in the possession of the Administrative Agent
to the Letter of Credit Collateral Account until the amount deposited in such
account equals the maximum amount available to be drawn under the Letters of
Credit. The Letter of Credit Collateral Account shall be in the name of
Administrative Agent (as a Cash Concentration Account), but under the sole
dominion and control of the Administrative Agent and subject to the terms of
this Agreement.
10.8 LETTER OF CREDIT COLLATERAL ACCOUNT.
(a) APPLICATION.
The Administrative Agent may, at any time or from
time to time after funds are deposited in the Letter of Credit
Collateral Account, apply funds then held in the Letter of Credit
Collateral Account to the payment of any amounts, in such order as the
Administrative Agent may elect or shall be directed by the Lenders, as
shall have become or shall become due and payable by the Borrower to
the Designated Letter of Credit Issuer under this Agreement or any
Reimbursement Agreement first, in respect of
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the Letters of Credit and second, after the occurrence and during the
continuance of any Event of Default, in respect of all other amounts
constituting Secured Obligations.
(b) NO BORROWER OR THIRD PARTY CLAIMS.
Neither the Borrower nor any Person claiming on
behalf of or through the Borrower shall have any right to withdraw any
of the funds held in the Letter of Credit Collateral Account.
(c) NO LIENS OR TRANSFERS OF ACCOUNT.
The Borrower agrees that it will not: (i) sell or
otherwise dispose of any interest in the Letter of Credit Collateral
Account or any funds held therein, or (ii) create or permit to exist
any lien, security interest or other charge or encumbrances upon or
with respect to the Letter of Credit Collateral Account or any funds
held therein, except as provided in or contemplated by this Agreement.
10.9 ACTIONS IN RESPECT OF PLEDGED COLLATERAL UPON DEFAULT.
(a) VOTING; DIVIDENDS.
Upon the occurrence of an Event of Default which is
continuing and which has not been waived in accordance with Section
15.1 hereof, upon notice by the Administrative Agent to the Borrower or
any applicable relevant Subsidiary Guarantor, (i) the Administrative
Agent shall have the right to receive any and all cash dividends,
payments or other Proceeds paid in respect of the Pledged Collateral
and make application thereof to the Secured Obligations in the order
set forth in Section 10.5(d) of this Agreement, and (ii) the
Administrative Agent or its nominee may exercise (A) all voting,
consent, corporate and other rights 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 and all rights of conversion, exchange and
subscription and any other rights, privileges or options pertaining
to the Pledged Collateral as if it were the absolute owner thereof
(including the right to exchange at its discretion any and all of the
Pledged Collateral upon the merger, consolidation, reorganization,
recapitalization or other fundamental change in the corporate structure
of any issuer of Pledged Securities, the right to deposit and deliver
any and all of the 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, but
the Administrative Agent shall have no duty to the Borrower or any
Subsidiary Guarantor 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) DELIVERY OF PROXIES.
In order to permit the Administrative Agent to
exercise the voting and other consensual rights which it may be
entitled to exercise pursuant hereto and to receive all dividends and
other distributions which it may be entitled to receive hereunder, (i)
Upon the occurrence of an Event of Default which is continuing and
which has not been waived in accordance with Section 15.1 hereof, the
Borrower and each Subsidiary Guarantor 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, the Borrower
or such Subsidiary
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Guarantor 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 which has not been waived in
accordance with Section 15.1 hereof and which proxy shall only
terminate upon the payment in full of the Secured Obligations.
(c) AUTHORIZATION TO ISSUERS.
The Borrower and each Subsidiary Guarantor hereby
expressly authorizes and instructs each issuer of any Pledged
Collateral pledged hereunder by the Borrower or such Subsidiary
Guarantor 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 the Borrower or such Subsidiary Guarantor,
and the Borrower and each Subsidiary Guarantor agrees that such issuer
shall be fully protected in so complying and (ii) unless otherwise
expressly permitted hereby, pay any dividends or other payments with
respect to the Pledged Collateral directly to the Administrative Agent.
10.10 REGISTRATION RIGHTS.
(a) REGISTRATION OF PLEDGED COLLATERAL.
If the Administrative Agent shall determine to
exercise its right to sell any or all of the Pledged Collateral
pursuant to Section 10.9, and if in the opinion of the Administrative
Agent it is necessary or advisable to have the Pledged Collateral, or
any portion thereof to be registered under the provisions of the
Securities Act, the Borrower or the applicable Subsidiary Guarantor
will cause the issuer thereof to (i) execute and deliver, and cause the
directors and officers of such issuer to execute and deliver, all such
instruments and documents, and do or cause to be done all such other
acts as may be, in the opinion of the Administrative Agent, necessary
or advisable to register the Pledged Collateral, or that portion
thereof to be sold, under the provisions of the Securities Act, (ii)
use its best efforts to cause the registration statement relating
thereto to become effective and to remain effective for a period of one
year from the date of the first public offering of the Pledged
Collateral, or that portion thereof to be sold and (iii) make all
amendments thereto and/or to the related prospectus which, in the
opinion of the Administrative Agent, are necessary or advisable, all in
conformity with the requirements of the Securities Act and the rules
and regulations of the Securities and Exchange Commission applicable
thereto. The Borrower and each Subsidiary Guarantor agree to cause such
issuer to comply with the provisions of the securities or "Blue Sky"
laws of any and all jurisdictions which the Administrative Agent shall
designate and to make available to its security holders, as soon as
practicable, an earnings statement (which need not be audited) which
will satisfy the provisions of Section 11(a) of the Securities Act.
(b) PRIVATE SALE.
The Borrower and each Subsidiary Guarantor recognize
that the Administrative Agent may be unable to effect a public sale of
any or all the Pledged
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Collateral by reason of certain prohibitions contained in the
Securities Act and applicable state securities laws or otherwise or may
determine that a public sale is impracticable or not commercially
reasonable and, accordingly, may resort to one or more private sales
thereof to a restricted group of purchasers which will be obliged to
agree, among other things, to acquire such securities for their own
account for investment and not with a view to the distribution or
resale thereof. The Borrower and each Subsidiary Guarantor acknowledge
and agree that any such private sale may result in prices and other
terms less favorable than if such sale were a public sale and,
notwithstanding such circumstances, agrees that any such private sale
shall be deemed to have been made in a commercially reasonable manner.
The Administrative Agent shall be under no obligation to delay a sale
of any of the Pledged Collateral for the period of time necessary to
permit the issuer thereof to register such securities for public sale
under the Securities Act, or under applicable state securities laws,
even if such issuer would agree to do so.
(c) SPECIFIC ENFORCEMENT.
The Borrower and each Subsidiary Guarantor agree to
use its best efforts to do or cause to be done all such other acts as
may be necessary to make such sale or sales of all or any portion of
the Pledged Collateral pursuant to this Section 10.10 valid and binding
and in compliance with any and all other applicable requirements of
Law. The Borrower and each Subsidiary Guarantor further agree that (i)
a breach of any of the covenants contained in this Section 10.10 will
cause irreparable injury to the Administrative Agent, the Lenders, the
Designated Letter of Credit Issuer and the Designated Hedge Creditor,
(ii) the Administrative Agent, the Lenders, the Designated Letter of
Credit Issuer and the Designated Hedge Creditor have no adequate remedy
at law in respect of such breach and (iii) as a consequence, that each
and every covenant contained in this Section 10.10 shall be
specifically enforceable against the Borrower and such Subsidiary
Guarantor, and the Borrower or such Subsidiary Guarantor hereby waives
and agrees not to assert any defenses against an action for specific
performance of such covenants except for a defense that no Event of
Default has occurred under the Credit Agreement.
10.11 TERMINATION; EFFECT ON BORROWER OBLIGATIONS.
Any termination by the Administrative Agent and/or any Lender
or any Designated Letter of Credit Issuer pursuant to this Section 10 of its
performance shall not absolve, release, or otherwise affect the liability of the
Borrower or any Subsidiary Guarantor in respect of transactions prior to such
termination or affect any of the Liens, rights, powers, and remedies of the
Administrative Agent or such Lender or such Designated Letter of Credit Issuer
which such Liens, rights, powers and remedies shall, in all events, continue
until all Secured Obligations are satisfied.
10.12 AUTHORITY TO EXECUTE TRANSFERS.
Without limitation of any authorization granted to the
Administrative Agent hereunder, the Borrower and each Subsidiary Guarantor also
hereby authorizes the Administrative Agent, upon the occurrence of an Event of
Default which is continuing and has not been waived in accordance with Section
15.1 hereof, to execute, in connection with the exercise by the Administrative
Agent of its remedies hereunder, any endorsements, assignments or other
instruments of conveyance or transfer with respect to the Collateral.
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10.13 LIMITED LICENSE TO LIQUIDATE.
The Borrower and each Subsidiary Guarantor hereby grants to
the Administrative Agent for the benefit of the Lenders and the Designated
Letter of Credit Issuer: (a) a non-exclusive, royalty-free license or other
right to use, without charge, all of the Borrower's or such Subsidiary
Guarantor's Intellectual Property (including all rights of use of any name or
trade secret) as it pertains to the Collateral, in manufacturing, advertising
for sale and selling any Collateral; PROVIDED, HOWEVER, that such license and
right to use shall be exercisable by the Administrative Agent for the benefit of
the Lenders only upon request by the Administrative Agent after the occurrence
of an Event of Default which is continuing and has not been waived in accordance
with Section 15.1 hereof, and (b) to the extent permitted thereunder, all of the
Borrower's or such Subsidiary Guarantor's rights under all licenses and all
franchise agreements, which shall inure to the Administrative Agent for the
benefit of the Lenders and the Designated Letter of Credit Issuer without charge
but only upon request by the Administrative Agent after the occurrence of an
Event of Default which is continuing and has not been waived in accordance with
Section 15.1 hereof.
10.14 EQUALIZATION.
Each Lender agrees with the other Lenders that if at any time
it shall obtain any Advantage over the other Lenders or any thereof in respect
of the Loans it will purchase from such other Lender or Lenders, for cash and at
par, such additional participation in the Loans owing to the other or others as
shall be necessary to nullify the Advantage. If any such Advantage resulting in
the purchase of an additional participation as aforesaid shall be recovered in
whole or in part from the Lender receiving the Advantage, each such purchase
shall be rescinded, and the purchase price restored (with interest and other
charges if and to the extent actually incurred by the Lender receiving the
Advantage) ratably to the extent of the recovery. During the existence of any
Potential Default or upon the occurrence of an Event of Default which is
continuing and has not been waived in accordance with Section 15.1 hereof, any
payment (whether made voluntarily or involuntarily, by offset of any deposit or
other indebtedness or otherwise) of any Indebtedness owing by the Borrower to
any Lender or the Designated Letter of Credit Issuer shall be applied to the
Obligations, as the case may be, owing to such Lender until the same shall have
been paid in full before any thereof shall be applied to other Indebtedness
owing to such Lender.
10.15 REMEDIES CUMULATIVE.
The above-stated remedies are not intended to be exhaustive
and the full or partial exercise of any of such remedies shall not preclude the
full or partial exercise of any other remedy by the Administrative Agent under
this Agreement, under any Loan Document, or at equity or under law.
10.16 APPOINTMENT OF ATTORNEY-IN-FACT.
The Administrative Agent shall hereby have the right, and the
Borrower and each Subsidiary Guarantor hereby irrevocably make, constitute, and
appoint the Administrative Agent (and all officers, employees, or Administrative
Agents designated by the Administrative Agent) as its true and lawful
attorney-in-fact and Administrative Agent, with full power of substitution, from
time to time but only to the extent following the occurrence of an Event of
Default which is continuing and has not been waived in accordance with Section
15.1 hereof: (a) to effectuate, in the Borrower's or such Subsidiary Guarantor's
name, the Borrower's or such Subsidiary Guarantor's obligations under this
Agreement, (b) in the Borrower's, such Subsidiary Guarantor's, or Administrative
Agent's name: (i) to demand payment of the Accounts, (ii) to enforce payment of
the Accounts, by legal proceedings or otherwise, (iii) to exercise all of the
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Borrower's or such Subsidiary Guarantor's rights and remedies with respect to
the collection of the Accounts and any other Collateral, (iv) to settle, adjust,
compromise, extend, or renew the Accounts, (v) to settle, adjust, or compromise
any legal proceedings brought to collect the Accounts, (vi) if permitted by
applicable Law, to sell or assign the Accounts and other Collateral upon such
terms, for such amounts, and at such time or times as the Administrative Agent
deems advisable, (vii) to discharge and release the Accounts and any other
Collateral, (viii) to take control, in any manner, of any item of payment or
Proceeds relating to any Collateral, (ix) to prepare, file, and sign the
Borrower's or such Subsidiary Guarantor's name on a proof of claim in bankruptcy
or similar document against any Account Debtor, (x) to prepare, file, and sign
the Borrower's or such Subsidiary Guarantor's name on any notice of Lien,
assignment, or satisfaction of Lien or similar document in connection with the
Accounts, (xi) to do all acts and things reasonably necessary, in the
Administrative Agent's good faith discretion, to fulfill the Borrower's or such
Subsidiary Guarantor's obligations under this Agreement, (xii) to endorse the
name of the Borrower or such Subsidiary Guarantor upon any of the items of
payment or Proceeds relating to any Collateral and deposit the same to the Cash
Concentration Account of the Administrative Agent, (xiii) to endorse the name of
the Borrower or such Subsidiary Guarantor upon any Chattel Paper, document,
Instrument, invoice, freight xxxx, xxxx of lading, or similar document or
agreement relating to the Accounts, Inventory and any other Collateral, (xiv) to
use the Borrower's or such Subsidiary Guarantor's stationery and sign the name
of the Borrower or such Subsidiary Guarantor to verifications of the Accounts
and notices thereof to Account Debtors, (xv) to use the information recorded on
or contained in any data processing equipment and computer hardware and software
relating to the Accounts, Inventory, and any other Collateral to which the
Borrower or such Subsidiary Guarantor has access, (xvi) to make and adjust
claims under such policies of insurance insuring the Collateral, receive and
endorse the name of the Borrower or such Subsidiary Guarantor on any check,
draft, instrument or other item of payment for the proceeds of such policies of
insurance insuring the Collateral, and make all determinations and decisions
with respect to such policies of insurance and (xvii) to notify post office
authorities to change the address for delivery of the Borrower's or such
Subsidiary Guarantor's mail to an address designated by the Administrative
Agent, receive and open all mail addressed to the Borrower, and, after removing
all Collections, Remittances of Net Cash Proceeds and Intercompany Payment as
well as all other Proceeds of Collateral, forward the mail to the Borrower. The
Borrower and each Subsidiary Guarantor hereby ratifies all that said attorneys
shall lawfully do or cause to be done by virtue hereof. This power of attorney
is a power coupled with an interest and shall be irrevocable.
SECTION 11 SUBSIDIARY GUARANTY.
11.1 GUARANTEED OBLIGATIONS.
To induce the Lenders to make the Loans to the Borrower and
the Designated Letter of Credit Issuer to issue Letters of Credit for the
account of the Borrower or other Letter of Credit Obligor, and in consideration
thereof, each of the Subsidiary Guarantors hereby unconditionally and
irrevocably: (a) guarantees, jointly and severally, to the Administrative Agent,
the Designated Letter of Credit Issuer, and the Lenders the due and punctual
payment, in Dollars, in immediately available funds, of all of the Secured
Obligations (whether by acceleration or otherwise) and (b) agrees, jointly and
severally, to pay any and all expenses which may be incurred by the
Administrative Agent in enforcing its rights with respect to such Secured
Obligations on behalf of the Lenders (collectively, the "Guaranteed
Obligations").
11.2 MAXIMUM LIABILITY.
Solely in the event it is necessary for the enforceability of
the Subsidiary Guaranty, the maximum liability of the Subsidiary Guarantor under
its Subsidiary Guaranty for Guaranteed Obligations of the Borrower or its
Subsidiaries shall be the greatest amount which,
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after taking into consideration all other valid and enforceable debts and
liabilities of the Subsidiary Guarantor, an applicable court has determined
(after any appeals) would not render the Subsidiary Guarantor insolvent at the
date legally relevant for such determination, unable to pay its debts as they
become due, inadequately capitalized for the business which it intends to
conduct (in all such cases, within the meaning of Section 548 of the Bankruptcy
Code, 11 U.S.C. Section 101, et. seq., or any other similar state law), or
unable to pay a judgment rendered upon a claim that is the subject of an action
or proceeding pending at the time when the obligations of this Subsidiary
Guaranty are incurred or increased.
11.3 GUARANTY UNCONDITIONAL.
The obligations of the Subsidiary Guarantors under this
Subsidiary Guaranty shall be, joint and several, irrevocable, unconditional and
absolute and, without limiting the generality of the foregoing, shall not be
released, discharged or otherwise affected by (i) any extension, renewal,
settlement, compromise, waiver or release in respect of any obligation of any
advance under this Agreement or any Loan Document by operation of Law or
otherwise; (ii) any modification or amendment of or supplement to this Agreement
or any Loan Document; (ii) any modification, amendment, waiver, release,
non-perfection or invalidity of any direct or indirect security, or of any
guarantee or other liability of any third party, of the Guaranteed Obligations
of the Borrower or its Subsidiary; (iii) any change in the corporate existence,
structure, or ownership of, or any insolvency, Bankruptcy, reorganization or
other similar proceeding affecting any Subsidiary Guarantor or its assets or any
resulting release or discharge of any of the Obligations of the Subsidiary
Guarantors contained in this Agreement or any Loan Document; (iv) the existence
of any claim, set-off or other rights which the Subsidiary Guarantor may have at
any time against the Administrative Agent, the Designated Letter of Credit
Issuer, the Designated Hedge Creditor, any Lender or any other Person, whether
or not arising in connection with this Agreement or any Loan Document, PROVIDED,
HOWEVER, that nothing herein shall prevent the assertion of any such claim by
separate suit or compulsory counterclaim; (v) any invalidity or unenforceability
relating to or against the Borrower or its Subsidiary for any reason of this
Agreement or any Loan Document or any provision of applicable law or regulation
purporting to prohibit the payment by the Borrower under this Agreement or any
Loan Document; or (vi) to the extent permitted by applicable Law, any other act
or omission to act or delay of any kind by the Subsidiary Guarantor, the
Administrative Agent, the Designated Letter of Credit Issuer, the Designated
Hedge Creditor, any Lender or any other Person or any other circumstance
whatsoever that might, but for the provisions of this paragraph, constitute a
legal or equitable discharge of the Guaranteed Obligations of the Borrower under
this Section 11.
11.4 DISCHARGE; REINSTATEMENT.
The Guaranteed Obligations of each Subsidiary Guarantor under
this Section 11 shall remain in full force and effect until the Commitments of
the Lenders are terminated, no LC Exposure remains outstanding, and the Secured
Obligations shall have been paid in full. If at any time any payment of any
amount payable by Subsidiary Guarantor under this Section 11, any other section
of this Agreement or other Loan Document is rescinded or must be otherwise
restored or returned upon the insolvency, Bankruptcy or reorganization of any
Subsidiary Guarantor or otherwise, the other Subsidiary Guarantor's obligations
under this Section 11 with respect to such payment shall be reinstated at such
time as though such payment had become due but had not been made at such time.
This Section 11 shall survive the termination of this Agreement until the
payment in full of all amounts payable under this Agreement and any Loan
Documents.
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11.5 WAIVER.
No Subsidiary Guarantor shall be entitled to enforce any
remedy which the Administrative Agent, the Designated Letter of Credit Issuer,
the Designated Hedge Creditor or any Lender now has or may hereafter have
against the Borrower, any endorser or any Guarantor or other Subsidiary
Guarantor in respect of all or any part of the Guaranteed Obligations paid by
the Subsidiary Guarantor until all of the Secured Obligations and all
Commitments are terminated. Each Subsidiary Guarantor hereby waives any benefit
of, and any right to participate in, any security or collateral given to the
Administrative Agent for the benefit of the Designated Letter of Credit Issuer
and the Lenders to secure payment of the Guaranteed Obligations or any other
liability of the Borrower or any Subsidiary Guarantor to the Administrative
Agent, the Designated Letter of Credit Issuer, the Designated Hedge Creditor or
any Lender. Each Subsidiary Guarantor also waives all setoffs and counterclaims
and all presentments, demands for performance, notices of nonperformance,
protests, notices of protest, notices of dishonor, and notices of acceptance of
this Subsidiary Guaranty. Each Subsidiary Guarantor further waives all notices
of the existence, creation or incurring of additional Secured Obligations by the
Borrower, and also waives all notices that the principal amount, or any portion
thereof, and/or any interest on any instrument or document evidencing all or any
part of the Guaranteed Obligations is due, notices of any and all proceedings to
collect all or any part of the Guaranteed Obligations, and, to the extent
permitted by law, notices of exchange, sale, surrender or other handling of any
Collateral given to the Administrative Agent for the benefit of the
Administrative Agent, the Designated Letter of Credit Issuer, the Designated
Hedge Creditor and the Lenders to secure payment of the Guaranteed Obligations.
11.6 STAY OF ACCELERATION.
If acceleration of the time for payment of any amount payable
by any Subsidiary Guarantor under this Agreement or other Loan Document in
respect of a Guaranteed Obligation is stayed upon the insolvency, Bankruptcy or
reorganization of any Subsidiary Guarantor all such amounts otherwise subject to
acceleration under the terms of this Agreement shall nonetheless be payable by
the other Subsidiary Guarantors hereunder forthwith on demand by the
Administrative Agent.
11.7 SUBROGATION AND CONTRIBUTION RIGHTS.
(a) INDEMNITY AND SUBROGATION.
In addition to all rights of indemnity and subrogation that
the Subsidiary Guarantors may have under applicable law, the Borrower agrees
that the Borrower will indemnify such Subsidiary Guarantor for the full amount
of any payment made thereby pursuant to this Section with respect to the
Guaranteed Obligations of the Borrower and such Subsidiary Guarantor shall be
subrogated to the rights of the Person to whom payment is made to the extent of
such payment; PROVIDED, HOWEVER, that such Subsidiary Guarantor shall not
enforce its rights to any payment by way of indemnity or subrogation until all
of the Secured Obligations shall have been finally paid in full and may not
under applicable insolvency laws be required to be repaid by the Designated
Letter of Credit Issuer, the Designated Hedge Creditor or the Lenders.
If any Subsidiary Guarantor makes a payment in respect of the
Guaranteed Obligations, it shall be subrogated to the rights, if any, of the
payees against the other Subsidiary Guarantors with respect to such payment and
shall have the rights of contribution set forth below against the other
Subsidiary Guarantors.
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(b) CONTRIBUTION RIGHTS.
To the extent that any Subsidiary Guarantor makes a payment of
a portion of the Secured Obligations which exceeds (after taking into account
all indemnity payments made to such Subsidiary Guarantor by the Borrower
hereunder) the greater of: (i) the amount of the economic benefit actually
received by the Subsidiary Guarantor from the Loans and (ii), the amount which
the Subsidiary Guarantor would otherwise have paid if the Subsidiary Guarantor
had paid the aggregate amount of the Secured Obligations in the same proportion
as the Subsidiary Guarantor's Allocable Amount, as determined immediately prior
to the making of such payment, bears to the aggregate Allocable Amount of all of
the Subsidiary Guarantors as of such date of determination, THEN such Subsidiary
Guarantor shall be reimbursed by the other Subsidiary Guarantors for the amount
of such excess, pro rata, based on the respective Allocable Amounts of such
other Subsidiary Guarantors as such date of determination; PROVIDED, HOWEVER,
that such Subsidiary Guarantor shall not enforce its rights to any payment by
way of subrogation or by exercising its right of contribution until all of the
Secured Obligations shall have been finally paid in full and may not under
applicable insolvency laws be required to be repaid by the Designated Letter of
Credit Issuer, the Designated Hedge Creditor or the Lenders.
For purposes hereof, the term "Allocable Amount" with respect
to the Subsidiary Guarantor, at any date of determination, shall be equal to the
maximum amount of the claim that could then be recovered from such Subsidiary
Guarantor under this Section 11 without rendering such claim voidable or
avoidable under Section 548 of Chapter 11 of the Bankruptcy Code or under
applicable state Uniform Fraudulent Transfer Act, Uniform Fraudulent Conveyance
Act or similar state statute or common law.
SECTION 12 THE ADMINISTRATIVE AGENT AND LEAD ARRANGER.
12.1 THE ADMINISTRATIVE AGENT.
Each Lender and the Designated Letter of Credit Issuer
irrevocably appoints the Administrative Agent to act as Administrative Agent
under this Agreement and the other Loan Documents for the benefit of such Lender
and the Designated Letter of Credit Issuer with full authority to take such
actions, and to exercise such powers, on behalf of such Lender and the
Designated Letter of Credit Issuer in respect of this Agreement and the other
Loan Documents as are herein and therein respectively delegated to the
Administrative Agent or as are reasonably incidental to those delegated powers.
The Administrative Agent in such capacity shall be deemed to be an independent
contractor of the Lenders and the Designated Letter of Credit Issuer. Each of
the Lenders and the Designated Letter of Credit Issuer hereby expressly agrees
that, without first obtaining the prior written consent of the Administrative
Agent or the Required Lenders, such Lender and the Designated Letter of Credit
Issuer, as the case may be, shall not take or cause to be taken, in respect of
the Secured Obligations hereunder or the Collateral, any enforcement or remedial
action that is independent from the actions or remedies taken or to be taken by
the Administrative Agent, except for any actions taken by any Lender or the
Designated Letter of Credit Issuer which are necessary to preserve its rights in
connection with any Event of Default described in Section 9.13 of this
Agreement.
12.2 LEAD ARRANGER.
Each Lender hereby irrevocably designates and appoints NCB as
Lead Arranger (the "Lead Arranger") to act as specified herein and in the other
Loan Documents, and each such Lender hereby irrevocably authorizes the Lead
Arranger to take such action on its behalf under the provisions of this
Agreement and the other Loan Documents and to exercise such powers and perform
such duties as are expressly delegated to the Lead Arranger by the terms of this
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Agreement and the other Loan Documents, together with such other powers as are
reasonably incidental thereto.
12.3 MARKETING FLEXIBILITY.
At any time prior to the completion of the Syndication Period,
the Lead Arranger reserve the right, after consultation with the Borrower, to
change the amount, structure, maturity, pricing, composition, or other terms,
conditions or provisions of the credit facilities hereunder from those specified
or otherwise indicated herein, in order to ensure and complete, in the sole
judgment of the Lead Arranger, a successful syndication of the credit facilities
hereunder. This paragraph shall survive the execution and delivery of this
Agreement, the closing hereof and the extensions of Loans and Letters of Credit
hereunder until the syndication is, in the sole discretion of the Lead Arranger,
successfully completed. The Borrower and each Subsidiary Guarantor will enter
into any amendments hereto or to the other Loan Documents which the
Administrative Agent and the Lead Arranger consider necessary to give effect to
the exercise of the Lead Arranger's rights under this paragraph.
12.4 NATURE OF APPOINTMENT.
Neither the Administrative Agent nor the Lead Arranger shall
have any fiduciary relationship with any Lender or the Designated Letter of
Credit Issuer by reason of this Agreement and the other Loan Documents. Neither
the Administrative Agent nor the Lead Arranger shall have any duty or
responsibility whatsoever to any Lender or the Designated Letter of Credit
Issuer except those expressly set forth in this Agreement and the other Loan
Documents. Without limiting the generality of the foregoing, each Lender or the
Designated Letter of Credit Issuer acknowledges that the Administrative Agent
and the Lead Arranger, as the case may be, is acting as such solely as a
convenience to the Lenders and not as a manager of the Commitments or the
Obligations evidenced by the Notes. This Section 12 does not confer any rights
upon the Borrower or anyone else (except the Lenders and the Designated Letter
of Credit Issuer), whether as a third party beneficiary or otherwise.
12.5 ADMINISTRATIVE AGENT AS LENDERS; OTHER TRANSACTIONS.
The Administrative Agent's rights as a Lender under this
Agreement and the other Loan Documents shall not be affected by serving as the
Administrative Agent. The Administrative Agent and its Affiliates may generally
transact any banking, financial, trust, advisory or other business with the
Borrower and its Subsidiaries (including, without limitation, the acceptance of
deposits, the extension of credit and the acceptance of fiduciary appointments)
without notice to the Lenders or the Designated Letter of Credit Issuer, without
accounting to the Lenders or the Designated Letter of Credit Issuer and without
prejudice to the Administrative Agent's rights as a Lender under this Agreement
and the other Loan Documents except as may be expressly required under this
Agreement.
12.6 INSTRUCTIONS FROM LENDERS.
The Administrative Agent shall not be required to exercise any
discretion or take any action as to matters not expressly provided for by this
Agreement and the other Loan Documents (including, without limitation,
collection and enforcement actions in respect of any Secured Obligations and any
Collateral therefor) EXCEPT that the Administrative Agent shall take such action
(or omit to take such action) other than actions referred to in Section 13.1 of
this Agreement, as may be reasonably requested of it in writing by the Required
Lenders with instructions and which actions and omissions shall be binding upon
all of the Lenders or the Designated Letter of Credit Issuer; PROVIDED, HOWEVER,
that the Administrative Agent shall not be required to act (or omit any act) if,
in its judgment, any such action or omission might expose the
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Administrative Agent to personal liability or might be contrary to this
Agreement, any Loan Document or any applicable Law.
12.7 LENDER'S DILIGENCE.
Each Lender and the Designated Letter of Credit Issuer: (a)
represents and warrants that it has made its decision to enter into this
Agreement and the other Loan Documents and (b) agrees that it will make its own
decision as to taking or not taking future actions in respect of this Agreement
and the other Loan Documents; in each case without reliance on the
Administrative Agent, the Lead Arranger, or any other Lender and the Designated
Letter of Credit Issuer and on the basis of its independent credit analysis and
its independent examination of and inquiry into such documents and other matters
as it deems relevant and material.
12.8 NO IMPLIED REPRESENTATIONS.
Neither the Administrative Agent nor the Lead Arranger shall
be liable for any representation, warranty, agreement or obligation of any kind
of any other party to this Agreement or anyone else, whether made or implied by
the Borrower or any Subsidiary Guarantor in this Agreement or any Loan Document
or by a Lender or the Designated Letter of Credit Issuer in any notice or other
communication or by anyone else or otherwise.
12.9 SUB-ADMINISTRATIVE AGENTS.
The Administrative Agent may employ agents and shall not be
liable (except as to money or property received by it or its agents) for any
negligence or willful misconduct of any such agent selected by it with
reasonable care.
12.10 ADMINISTRATIVE AGENT'S DILIGENCE.
Neither the Administrative Agent nor the Lead Arranger shall
be required: (a) to keep itself informed as to anyone's compliance with any
provision of this Agreement or any Loan Document, (b) to make any inquiry into
the properties, financial condition or operation of the Borrower and its
Subsidiaries or any other matter relating to this Agreement or any Loan
Document, (c) to report to any Lender and the Designated Letter of Credit Issuer
any information (other than which this Agreement or any Loan Document expressly
requires to be so reported) that the Administrative Agent or any of its
Affiliates may have or acquire in respect of the properties, business or
financial condition of the Borrower and its Subsidiaries or any other matter
relating to this Agreement or any Loan Document or (d) to inquire into the
validity, effectiveness or genuineness of this Agreement or any Loan Document.
12.11 NOTICE OF DEFAULT.
The Administrative Agent shall not be deemed to have knowledge
of any Potential Default or Event of Default unless and until it shall have
received a written notice describing such Potential Default or Event of Default
and citing the relevant provision of this Agreement or any Loan Document. The
Administrative Agent shall give each Lender (except the Lender or the Designated
Letter of Credit Issuer giving such notice) reasonably prompt notice of any such
written notice.
12.12 ADMINISTRATIVE AGENT'S LIABILITY.
Neither the Administrative Agent (acting in its capacity as
Administrative Agent) nor the Lead Arranger acting in its capacity as Lead
Arranger, nor any directors, officers, employees, attorneys, and other
Administrative Agents acting for the Administrative Agent or
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the Lead Arranger, as the case may be, in such capacities respectively, shall be
liable for any action or omission on their respective parts except for gross
negligence or willful misconduct. Without limitation of the generality of the
foregoing, the Administrative Agent and the Lead Arranger: (a) may treat the
payee of any Note as the holder thereof until the Administrative Agent receives
a fully executed copy of any assignment with respect thereto, signed by such
payee and in form satisfactory to the Administrative Agent; (b) may consult with
legal counsel, independent public accountants and other experts selected by it
and shall not be liable for any action taken or omitted to be taken in good
faith by it in accordance with the advice of such counsel, accountants or
experts which have been selected by the Administrative Agent with reasonable
care; (c) makes no warranty or representation to any Lender and shall not be
responsible to any Lender or the Designated Letter of Credit Issuer for any
statements, warranties or representations made in or in connection with this
Agreement or any other Loan Document, including, without limitation, the truth
of the statements made in any certificate delivered by the Borrower under
Section 2, Section 3, Section 4, Section 7 or Section 8 of this Agreement or in
any Credit Request, Rate Continuation/Conversion Request, Reimbursement
Agreement or any other similar notice or delivery, the Administrative Agent (and
Lead Arranger to the extent relevant thereto) being entitled for the purposes of
determining fulfillment of the conditions set forth therein to rely conclusively
upon such certificates; (d) shall not have any duty to ascertain or to inquire
as to the performance or observance of any of the terms, covenants or conditions
of this Agreement, the Revolving Credit Notes or any other Loan Document or to
inspect the property (including the books and records) of the Borrower; (e)
shall not be responsible to any Lender or the Designated Letter of Credit Issuer
for the due execution, legality, validity, enforceability, genuineness,
sufficiency or value of this Agreement, or collateral covered by any agreement
or any other Loan Document and (f) shall incur no liability under or in respect
of this Agreement, the Revolving Credit Notes or any other Loan Document by
acting upon any notice, consent, certificate or other instrument or writing
(which may be by telegram, telecopy, cable or telex) believed by it in good
faith to be genuine and correct and signed or sent by the proper party or
parties.
Neither the Administrative Agent, nor the Lead Arranger, nor
any of directors, officers, employees or Administrative Agents thereof shall
have any responsibility to the Borrower or any Subsidiary Guarantor on account
of the failure of or delay in performance or breach by any Lender or the
Designated Letter of Credit Issuer of any of its obligations hereunder or to any
Lender on account of the failure of or delay in performance or breach by any
other Lender or the Designated Letter of Credit Issuer or the Borrower of any of
their respective obligations hereunder or under any Loan Document or in
connection herewith or therewith. The Lenders and the Designated Letter of
Credit Issuer each hereby acknowledge that the Administrative Agent and the Lead
Arranger shall be under no duty to take any discretionary action permitted to be
taken by it pursuant to the provisions of this Agreement, the Revolving Credit
Notes or any other Loan Document unless it shall be requested in writing to do
so by the Required Lenders.
12.13 ADMINISTRATIVE AGENT'S AND LEAD ARRANGER'S INDEMNITY.
The Lenders shall indemnify the Administrative Agent, in its
capacity as Administrative Agent, and the Lead Arranger in its capacity as Lead
Arranger (to the extent the Administrative Agent and the Lead Arranger, as the
case may be, is not reimbursed by the Borrower), from and against: (a) any loss
or liability (other than any caused by the Administrative Agent's or the Lead
Arranger's gross negligence or willful misconduct) incurred by the
Administrative Agent as such and the Lead Arranger as such in respect of this
Agreement, the Revolving Credit Notes or any Loan Document and (b) any
out-of-pocket expenses incurred in defending itself or otherwise related to this
Agreement, the Revolving Credit Notes or any Loan Document (other than any
caused by the Administrative Agent's or the Lead Arranger's, as the case may be,
gross negligence or willful misconduct) including, without limitation,
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reasonable fees and disbursements of legal counsel of its own selection
(including, without limitation, the reasonable interdepartmental charges of its
salaried attorneys) in the defense of any claim against it or in the prosecution
of its rights and remedies as the Administrative Agent or the Lead Arranger, as
the case may be, (other than the loss, liability or costs incurred by the
Administrative Agent or the Lead Arranger in the defense of any claim against it
by the Lenders or the Designated Letter of Credit Issuer arising in connection
with its actions in its capacity as Administrative Agent); PROVIDED, HOWEVER,
that each Lender shall be liable for only its Ratable Portion of the whole loss
or liability.
12.14 RESIGNATION OF ADMINISTRATIVE AGENT.
The Administrative Agent may resign as Administrative Agent
for any reason effective twenty (20) Business Days after giving notice thereof
to the Lenders and the Designated Letter of Credit Issuer and the Borrower. If
the Administrative Agent shall resign as Administrative Agent under this
Agreement, the Required Lenders shall appoint from among the Lenders (other than
the Lender that has resigned) a successor Administrative Agent for the Lenders
and the Designated Letter of Credit Issuer which successor Administrative Agent
shall be reasonably acceptable to the Borrower. If, however, in the case of
resignation by the Administrative Agent, no successor Administrative Agent shall
have been appointed by the time such resignation becomes effective, then the
retiring Administrative Agent may, on behalf of the Lenders and the Designated
Letter of Credit Issuer, appoint a successor Administrative Agent from among the
remaining Lenders. Upon appointment (whether effected by the Required Lenders or
the retiring Administrative Agent on behalf of the Lenders) and acceptance of
such appointment as "Administrative Agent," the successor Administrative Agent
shall succeed to the rights, powers and duties of the Administrative Agent, and
the term "Administrative Agent" shall mean such successor Administrative Agent,
effective upon its appointment and acceptance, and the former Administrative
Agent's rights, powers and duties as Administrative Agent shall be terminated,
without any other or further act or deed on the part of such former
Administrative Agent or any of the parties to this Agreement or any holder of
the Revolving Credit Notes. After any retiring Administrative Agent's
resignation hereunder as Administrative Agent, the provisions of Section 12.13
shall inure to its benefit as to any actions taken or omitted to be taken by it
while it was Administrative Agent under this Agreement.
SECTION 13 TRANSFERS AND ASSIGNMENTS.
13.1 TRANSFER OF COMMITMENTS.
Each Lender shall have the right at any time or times to
transfer to another financial institution that is an Eligible Assignee, without
recourse, all or, if less than all, any fixed percentage of (which percentage
does not have to be pro rata and may vary in percentage among the Commitment and
outstanding Revolving Credit Loans and/or Term B Loans of such Lender but the
assigned portion resulting therefrom must (i) in each case of a transfer of
Revolving Credit Commitments and Loans, be at least equal to $5,000,000 or an
integral multiple of $1,000,000 in excess thereof and, in each case of a
transfer of Term B Loans and Commitments, be at least equal to $1,000,000 or an
integral multiple of $100,000 in excess thereof), such Lender's rights and
obligations under this Agreement and the other Loan Documents, including,
without limitation, such Lender's Commitments, any Loan made by such Lender, any
Note executed in favor of such Lender, any participations in Letters of Credit
and any participations purchased by the Lender pursuant to Section 10.14 of this
Agreement; PROVIDED, HOWEVER, in each such case, that the transferor and the
transferee shall have complied with the following requirements:
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(a) PRIOR CONSENT.
Transfers (other than transfers by any Lender to any
Affiliate of such Lender or to any other Lender hereunder which is not
a Defaulting Lender) to any Eligible Assignee may be consummated
pursuant to this Section 13 only upon the prior written consent of the
Administrative Agent (which consent shall not be unreasonably withheld
or delayed) and, unless an Event of Default has occurred which is
continuing and has not been waived in accordance with Section 15.1
hereof, the written consent of the Borrower (which consent shall not be
unreasonably withheld or delayed). Notwithstanding anything to the
contrary, any Lender may at any time (i) assign all or any portion of
its rights under this Agreement and its Notes to a Federal Reserve
Bank, or (ii) create a security interest in all or any portion of such
rights in favor of any Federal Reserve Bank, in each case in accordance
with Regulation A or the Board of Governors of the Federal Reserve
System, and no such assignment or creation shall release such assigning
Lender from its obligations hereunder.
(b) AGREEMENT; TRANSFER FEE.
The transferor: (i) shall remit to the Administrative
Agent an administrative fee of Three Thousand Five Hundred Dollars
($3,500) and (ii) shall cause the transferee to execute and deliver to
the Borrower, the Administrative Agent and each Lender (A) an
Assignment Agreement, substantially in the form of EXHIBIT J attached
hereto, and otherwise in form and substance satisfactory to the
Administrative Agent and its counsel (an "Assignment Agreement"),
together with the consents and releases referenced therein and (B) such
additional amendments, assurances and other writings as the
Administrative Agent may reasonably require to effect such transfer.
(c) NO PROHIBITED TRANSACTION.
The transferee shall be required to represent and
warrant that its purchase shall not constitute a "prohibited
transaction" (as defined in Section 406 of ERISA or Section 4975 of the
Code).
(d) REVOLVING CREDIT NOTES.
The Borrower shall execute and deliver: (i) to the
Administrative Agent, the transferor and the transferee, any consent or
release (of all or a portion of the obligations of the transferor) to
be delivered in connection with the Assignment Agreement, (ii) if a
Lender's entire interest in its Commitments and in all of its Loans
have been transferred, to the transferee appropriate replacement notes
against return of the Notes (each marked "replaced") held by the
transferor and (iii) if only a portion of a Lender's interest in its
Commitments and Loans has been transferred, replacement notes to each
of the transferor and the transferee against return of the original
such Revolving Credit Notes of the transferor (each marked "replaced")
held by the transferor; PROVIDED, that, simultaneously with the
Borrower's delivery of new Revolving Credit Notes pursuant to this
Section 12(c), the transferor Lender will deliver to the Borrower any
note being replaced in whole or in part, and each such note delivered
by the transferor Lender shall be conspicuously marked "replaced" when
so delivered.
(e) PARTIES.
Upon satisfaction of the requirements of this Section
13.1, including the payment of the fee and the delivery of the
documents set forth in Section 13.1(b) above, (i) the transferee shall
become and thereafter be deemed to be a "Lender" for the
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purposes of this Agreement and (ii) the transferor (A) shall continue
to be a "Lender" for the purposes of this Agreement only if and to the
extent that the transfer shall not have been a transfer of its entire
interest in its Commitments and Loans, (B) shall cease to be and
thereafter shall no longer be deemed to be a "Lender" in the case of
any transfer of its entire interest in its Commitments and Loans and
(C) the signature pages hereto and Annex I hereto shall be
automatically amended, without further action, to reflect the result of
any such transfer.
13.2 SALE OF PARTICIPATIONS.
Each Lender shall have the right at any time or times to sell
one or more participations or subparticipations to a financial institution in
all or, if less than all, any constant fixed percentage of: such Lender's
Commitments, any Loan made by such Lender, any Note executed in favor of such
Lender, any participation by such Lender in a Letter of Credit and any
participations, if any, purchased by such Lender pursuant to Section 10.14 of
this Agreement or this Section 13; PROVIDED, HOWEVER, in each such case, that
the transferor and the transferee shall have complied with the following
requirements:
(a) BENEFITS OF PARTICIPANT.
The provisions of Section 14 of this Agreement shall
inure to the benefit of each purchaser of a participation or
subparticipation (provided that (i) each such participant shall look
solely to the seller of its participation for those benefits, (ii) no
such seller (whether or not a Lender) shall have a claim against the
Borrower of any kind whatsoever resulting from such benefits, and (iii)
the Borrower's liabilities, if any, under any of those sections shall
not be increased as a result of the sale of any such participation) and
Administrative Agent shall continue to distribute payments pursuant to
this Agreement as if no participation has been sold.
(b) RIGHTS RESERVED.
In the event any Lender shall sell any participation
or subparticipation, that Lender shall, as between itself and the
purchaser, retain all of its rights (including, without limitation,
rights to enforce against the Borrower this Agreement and the other
Loan Documents) and duties pursuant to this Agreement and the other
Loan Documents, including, without limitation, that Lender's right to
approve any waiver, consent or amendment pursuant to Section 15.1 of
this Agreement and such purchaser shall not be a Lender for any
purposes of this Agreement and the other Loan Documents, EXCEPT if and
to the extent that any such waiver, consent or amendment would (A)
reduce any fee or commission allocated to the participation or
subparticipation, as the case may be, (B) reduce the amount of any
principal payment on any Loan allocated to the participation or
subparticipation, as the case may be, or reduce the principal amount of
any Loan so allocated or the rate of interest payable thereon, (C)
extend the time for payment of any amount allocated to the
participation or subparticipation, as the case may be, or (D) result in
the release of a substantial portion of the Collateral.
(c) NO DELEGATION.
No participation or subparticipation shall operate as
a delegation of any duty of the seller of such participation or
subparticipation. Under no circumstance shall any participation or
subparticipation be deemed a novation in respect of all or any part of
the selling Lender's obligations pursuant to this Agreement.
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(d) NO PROHIBITED TRANSACTION.
Each purchaser of a participation or subparticipation
shall be required to represent and warrant that its purchase shall not
constitute a "prohibited transaction" (as defined in Section 406 of
ERISA or Section 4975 of the Code).
13.3 CHANGE OF LENDING OFFICE; REPLACEMENT OF LENDERS.
(a) CHANGE OF LENDING OFFICE.
Each Lender and the Designated Letter of Credit
Issuer agrees that, upon the occurrence of any event giving rise to the
operation of any of Sections 2.11(k), 2.15, 14.1 or 14.3 with respect
to such Lender and the Designated Letter of Credit Issuer it will, if
requested by the Borrower, use reasonable efforts (subject to overall
policy considerations of such Lender and the Designated Letter of
Credit Issuer) to designate another Lending Office for any Loans or
Commitment affected by such event, PROVIDED that such designation is
made on such terms that such Lender and its Lending Office suffer no
material economic, legal or regulatory disadvantage, with the object of
avoiding the consequence of the event giving rise to the operation of
any such section. All terms of this Agreement shall apply to any
Lending Office and the Loans and any Revolving Credit Notes issued
hereunder shall be deemed held by each Lender and the Designated Letter
of Credit Issuer for the benefit of its Lending Office.
(b) REPLACEMENT OF LENDERS.
If any Lender or the Designated Letter of Credit
Issuer requests any compensation, reimbursement or other payment under
any of Sections 2.11(k), 2.15 or 14.1 with respect to such Lender or
the Designated Letter of Credit Issuer, or if the Borrower is required
to pay any additional amount to any Lender or the Designated Letter of
Credit Issuer or governmental authority pursuant to Section 14.3, or if
any Lender is a "Defaulting Lender" hereunder, or if any Lender
otherwise fails to fund its Ratable Portion of Revolving Credit
Borrowings or the participation purchase price payable by such Lender
for its participating interest hereunder as specified in Section
2.4(e)(iii) hereof, or if any Lender notifies the Administrative Agent
that it is exercising any right under this Agreement not to fund or
maintain a LIBOR Rate Loan denominated in Dollars which the other
Lenders are willing or prepared to fund or maintain, THEN, the Borrower
may, at its sole expense and effort, upon notice to such Lender or the
Designated Letter of Credit Issuer and the Administrative Agent,
require such Lender or the Designated Letter of Credit Issuer, as the
case may be, to assign and delegate, without recourse (in accordance
with the restrictions contained in Section 13.1), all of its interests,
rights and obligations under this Agreement to an Eligible Assignee
that shall assume such obligations (which assignee may be another
Lender, if a Lender accepts such assignment); PROVIDED that (i) the
Borrower shall have received the prior written consent of the
Administrative Agent, which consent shall not be unreasonably withheld,
(ii) such Lender or the Designated Letter of Credit Issuer shall have
received payment of an amount equal to the outstanding principal of its
Loans, accrued interest thereon, accrued fees and all other amounts
payable to it hereunder, from the assignee (to the extent of such
outstanding principal and accrued interest and fees) or the Borrower
(in the case of all other amounts, including any breakage compensation
under Section 14.4 hereof), and (iii) in the case of any such
assignment resulting from a claim for compensation, reimbursement or
other payments required to be made under any of Sections 2.11(k), 2.15
or 14.1 with respect to such Lender or the Designated Letter of Credit
Issuer, or resulting from any required payments to any Lender or
governmental authority pursuant to Section 14.3, such assignment will
result in a reduction in such
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compensation, reimbursement or payments. None of the Lenders nor the
Designated Letter of Credit Issuer shall be required to make any such
assignment and delegation if, prior thereto, as a result of a waiver by
such Lender or the Designated Letter of Credit Issuer or otherwise, the
circumstances entitling the Borrower to require such assignment and
delegation cease to apply.
(c) REPLACEMENT OF NON-CONSENTING LENDERS.
If, in connection with any proposed amendment, waiver
or consent hereunder pursuant to Section 15.1 hereof:
(i) requiring the consent of all Lenders, the consent
of Required Lenders is obtained but the consent of all Lenders
whose consent is required is not obtained,
(ii) requiring the consent of Required Lenders, the
consent Lenders holding 51% or more is obtained but the
consent of Required Lenders is not obtained (any Lender
withholding consent as described in clause (i) and (ii) hereof
being referred to as a "Non-Consenting Lender"),
THEN, so long as the Administrative Agent or any Term B Lender is not the
Non-Consenting Lender, the Borrower may, at its sole expense and effort, upon
notice to such Non-Consenting Lender and the Administrative Agent, require such
Non-Consenting Lender to assign and delegate, without recourse (in accordance
with the restrictions contained in Section 13.1), all of its interests, rights
and obligations under this Agreement to an Eligible Assignee that shall assume
such obligations (which assignee may be another Lender, if a Lender accepts such
assignment); PROVIDED that (i) the Borrower shall have received the prior
written consent of the Administrative Agent, which consent shall not be
unreasonably withheld, (ii) such Lender shall have received payment of an amount
equal to the outstanding principal of its Loans, accrued interest thereon,
accrued fees and all other amounts payable to it hereunder, from the assignee
(to the extent of such outstanding principal and accrued interest and fees) or
the Borrower (in the case of all other amounts, including any breakage
compensation under Section 14.4 hereof).
(d) EFFECT ON RIGHTS AND OBLIGATIONS.
Nothing in this Section 13.3 shall affect or postpone any of
the obligations of the Borrower or the right of any Lender or the Designated
Letter of Credit Issuer provided in any of Sections 2.11(k), 2.15 14.1 or 14.3
hereof.
13.4 CONFIDENTIALITY.
The Administrative Agent, the Designated Letter of Credit
Issuer and each Lender hereby agree to use all commercially reasonable efforts
to hold all non-public information obtained pursuant to the requirements of this
Agreement and the other Loan Documents in accordance with the customary
procedures of the Administrative Agent, the Designated Letter of Credit Issuer
or such Lender, as the case may be, for handling confidential information of
this nature and in accordance with safe and sound banking practices, EXCEPT that
this Section shall not preclude the Administrative Agent, the Designated Letter
of Credit Issuer or any Lender from furnishing any such confidential
information: (i) subject to the Borrower's receipt of prior notice from the
Administrative Agent, such Designated Letter of Credit Issuer or such Lender, as
the case may be, if permitted under applicable Law and such legal proceedings,
to the extent which may be required by subpoena or similar order of any court of
competent jurisdiction, (ii) subject to the Borrower's receipt of prior notice
from the Administrative Agent, such Designated Letter of Credit Issuer or such
Lender, as the case may be, if permitted under applicable Law, to the
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extent such information is required to be disclosed to any regulatory or
administrative governmental agency or commission having any regulatory authority
over the Administrative Agent, the Designated Letter of Credit Issuer or such
Lender or its securities, (iii) to any other party to this Agreement, (iv) to
any Affiliate of the Administrative Agent, the Designated Letter of Credit
Issuer or such Lender so long as such Affiliate agrees to be bound in writing by
the provisions of this Section 13.4 prior to the time of such disclosure and so
long as such information is received in connection with customary banking
practices, (v) to any actual or prospective transferee, participant or
subparticipant of all or part of a Lender's rights arising out of or in
connection with the Loan Documents and this Agreement or any thereof so long as
such prospective transferee, participant or subparticipant to whom disclosure is
made agrees in writing to be bound by the provisions of this Section 13.4 prior
to the time of such disclosure, (vi) to anyone if it shall have been already
publicly disclosed (other than by the Administrative Agent, the Designated
Letter of Credit Issuer or such Lender, as the case may be, in contravention of
this Section 13.4) prior to the time of such disclosure, (vii) to the extent
reasonably required in connection with the preparation, negotiation or
administration of this Agreement and the other Loan Documents or the exercise of
any right or remedy under this Agreement or any other Loan Document, to the
counsel, auditors, professional advisors and consultants, and accountants to the
Administrative Agent, the Designated Letter of Credit Issuer or the Lenders, who
have a need to know such information in accordance with customary banking
practices and requirements and who receive the information having been made
aware of the restrictions set forth herein and (viii) to the extent reasonably
required in connection with any legal proceedings instituted by or against the
Administrative Agent, the Designated Letter of Credit Issuer or such Lender in
its respective capacities as the Administrative Agent, the Designated Letter of
Credit Issuer or a Lender under this Agreement; PROVIDED, FURTHER that for any
disclosure pursuant to clauses (i), (ii), (vii) or (viii) hereof, the
Administrative Agent, the Designated Letter of Credit Issuer or such disclosing
Lender, as the case may be, shall (A) use reasonable efforts to disclose only
that portion of the confidential information as it is legally required, in the
opinion of counsel, to disclose and (B) to the extent possible under the
applicable proceeding, at the Borrower's expense, request a protective order as
to the confidentially thereof.
SECTION 14 INDEMNITIES.
14.1 INCREASED COSTS.
If, after the Effective Date of this Agreement, (a) the
introduction of any Law, rule or regulation or any change therein, (b) any
change in the interpretation or administration of any Law, rule or regulation by
any central bank or other governmental authority or (b) the compliance by any
Lender or the Designated Letter of Credit Issuer with any guideline, request or
directive from any central bank or other governmental authority (whether or not
having the force of Law) shall increase the cost to any Lender or the Designated
Letter of Credit Issuer (other than any increase in the cost of the overhead of
such Lender or the Designated Letter of Credit Issuer) of agreeing to make or
making, funding or maintaining Loans to the Borrower or the cost to any
Designated Letter of Credit Issuer or Lender of issuing, maintaining or
participating in any Letter of Credit, then the Borrower shall from time to
time, upon demand by such Lender (with a copy of such demand to the
Administrative Agent), pay to the Administrative Agent for the account of such
Lender or the Designated Letter of Credit Issuer additional amounts sufficient
to indemnify such Lender and the Designated Letter of Credit Issuer for such
increased cost.
14.2 RISK-BASED CAPITAL.
If any Lender or the Designated Letter of Credit Issuer shall
have determined that after the Effective Date, the adoption of any applicable
law, rule or regulation regarding capital adequacy, or any change therein, or
any change in the interpretation or administration thereof by
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any governmental authority, central bank or comparable agency charged by law
with the interpretation or administration thereof, or compliance by such Lender
or the Designated Letter of Credit Issuer or the parent corporation of any
thereof with any request or directive regarding capital adequacy (whether or not
having the force of law) of any such authority, central bank, or comparable
agency, in each case made subsequent to the Effective Date, has or would have
the effect of reducing by an amount reasonably deemed by such Lender or the
Designated Letter of Credit Issuer to be material to the rate of return on the
capital or assets of such Lender or the Designated Letter of Credit Issuer or
the parent corporation of any thereof as a consequence of the commitments or
obligations of such Lender or the Designated Letter of Credit Issuer hereunder
to a level below that which such Lender or the Designated Letter of Credit
Issuer or the parent corporation of any thereof could have achieved but for such
adoption, effectiveness, change or compliance (taking into consideration
policies of such Lender or the Designated Letter of Credit Issuer or the parent
corporation of any thereof with respect to capital adequacy), then from time to
time, within 15 days after demand by such Lender or the Designated Letter of
Credit Issuer (with a copy to the Administrative Agent), the Borrower shall pay
to such Lender such additional amount or amounts as will compensate such Lender
or the Designated Letter of Credit Issuer or the parent corporation of any
thereof for such reduction. Each Lender and the Designated Letter of Credit
Issuer, as the case may be, upon determining in good faith that any additional
amounts will be payable pursuant to this section 14.2, will give prompt written
demand therefor.
14.3 TAXES.
(a) TAXES; WITHHOLDING.
Any and all payments by the Borrower hereunder, under
the Revolving Credit Notes or the Term Note or the other Loan Documents
shall be made, in accordance with the provisions of Section 2, 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, in the case of each Lender
and the Designated Letter of Credit Issuer taxes imposed on its income,
and franchise taxes imposed on it, by the jurisdiction under the Laws
of which such Lender is organized or is doing business, or any
political subdivision thereof (all such non-excluded taxes, levies,
imposts, deductions, charges, withholdings and liabilities being
hereinafter referred to as "Taxes"). If the Borrower shall be required
by Law to deduct any Taxes from or in respect of any sum payable
hereunder or under any Note to any Lender, the Designated Letter of
Credit Issuer or the Administrative Agent: (i) 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 14.3) such Lender receives an amount equal to the
sum it would have received had no such deductions been made, (ii) the
Borrower shall make such deductions and (iii) the Borrower shall pay
the full amount deducted to the relevant taxation authority or other
authority in accordance with applicable Law. All such Taxes shall be
paid by the Borrower prior to the date on which penalties attach
thereto or interest accrues thereon; PROVIDED, HOWEVER, that, if any
such penalties or interest become due, the Borrower shall make prompt
payment thereof to the appropriate governmental authority. The Borrower
shall indemnify the Administrative Agent, each Lender and the
Designated Letter of Credit Issuer for the full amount of such Taxes
(including any Taxes on amounts payable under this Section 14.3(a) paid
by such Lender, the Designated Letter of Credit Issuer and the
Administrative Agent and any liability (including penalties, interest
and expenses) arising therefrom or with respect thereto, whether or not
such Taxes were correctly or legally asserted. Any indemnification
payment shall be made within thirty (30) days from the date such
Lender, the Designated Letter of Credit Issuer or the Administrative
Agent makes written demand therefor.
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(b) STAMP TAXES.
The Borrower agrees to pay, and will indemnify each
Lender, the Designated Letter of Credit Issuer and the Administrative
Agent for, any present or future stamp or documentary taxes or any
other excise or property taxes, charges or similar levies which arise
from any payment made hereunder or under the Revolving Credit Notes or
the Term B Notes or from the execution, delivery or registration of, or
otherwise with respect to, this Agreement or the Revolving Credit Notes
or the Term B Notes (hereinafter referred to as "Other Taxes").
(c) OTHER TAXES.
Except as specifically limited by Section 14.3(a), the Borrower will
indemnify each Lender, the Designated Letter of Credit Issuer and the
Administrative Agent for the full amount of Taxes or Other Taxes
(including, without limitation, any Taxes or Other Taxes imposed by any
jurisdiction on amounts payable under this Section 14.3) paid by such
Lender, the Designated Letter of Credit Issuer or the Administrative
Agent (as the case may be) and any liability (including penalties,
interest and expenses) arising therefrom or with respect thereto,
whether or not such Taxes or Other Taxes were correctly or legally
asserted. Any indemnification payment shall be made within 30 days from
the date such Lender, the Designated Letter of Credit Issuer or the
Administrative Agent (as the case may be) makes written demand
therefor.
(d) REQUEST FOR REFUND.
At the reasonable request of the Borrower, each
Lender, the Designated Letter of Credit Issuer or the Administrative
Agent shall apply at the applicable Borrower's expense for a refund in
respect of Taxes or Other Taxes previously paid by the Borrower
pursuant to this Section 14.3 if in the opinion of such Lender or the
Administrative Agent there is a reasonable basis for such refund.
Notwithstanding the foregoing, none of the Lenders, the Designated
Letter of Credit Issuer or the Administrative Agent shall be obligated
to pursue such refund if, in its sole good faith judgment, such action
would be disadvantageous to it, but shall be required to cooperate in
good faith with the Borrower if the Borrower should choose to pursue
such refund. If any Lender, the Designated Letter of Credit Issuer or
the Administrative Agent subsequently receives from a taxing authority
a refund of any Tax previously paid by the Borrower and for which the
Borrower has indemnified the Lender pursuant to this Section 14.3, such
Lender, the Designated Letter of Credit Issuer or the Administrative
Agent shall within thirty (30) days after receipt of such refund, and
to the extent permitted by applicable law, pay to the Borrower the net
amount of any such recovery after deducting taxes and expenses
attributable thereto.
(e) EXEMPTION CERTIFICATE.
Not later than: (a) the Closing Date, (b) in the case
of any bank or financial institution that becomes a Lender or the
Designated Letter of Credit Issuer after the Closing Date, the date of
the instrument of assignment pursuant to which such bank or financial
institution became a Lender or the Designated Letter of Credit Issuer,
(c) annually on each Anniversary Date thereafter or (d) such other
times as the Administrative Agent or the Borrower may reasonably
request: (i) each Lender or the Designated Letter of Credit Issuer
organized under the laws of a jurisdiction outside the United States
shall provide the Administrative Agent and the Borrower with duly
completed copies of Form 1001 or Form 4224 or any successor form
prescribed by the Internal Revenue Service of the United States
certifying that such Lender or the
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Designated Letter of Credit Issuer is exempt from United States
withholding taxes with respect to all payments to be made to such
Lender hereunder or other document satisfactory to the Borrower and the
Administrative Agent indicating that all payments to be made to such
Lender or the Designated Letter of Credit Issuer hereunder are not
subject to such taxes and (ii) each other Lender or the Designated
Letter of Credit Issuer shall provide the Administrative Agent and the
Borrower with a written statement which certifies that such Lender or
the Designated Letter of Credit Issuer is not a non-resident alien or
foreign corporation and which otherwise satisfies Treasury Regulation
Section 1.1441-5(b) or any successor regulation under the Internal
Revenue Code (each such certificate or statement, an "Exemption
Certificate"). Unless the Administrative Agent and the Borrower have
received an Exemption Certificate from such Lender or the Designated
Letter of Credit Issuer, the Borrower, or the Administrative Agent if
the Borrower have not withheld, may withhold taxes from such payments
at the applicable statutory rate (subject, in the case of the Borrower
to the requirements of Section 14.3(a) above); PROVIDED, HOWEVER, that,
if the Borrower have withheld, the Borrower shall so notify the
Administrative Agent. Any Lender or the Designated Letter of Credit
Issuer which ceases to be exempt from United States withholding taxes
shall notify the Administrative Agent and the Borrower promptly
thereof.
(f) FURNISHING OF CERTIFICATE.
Within 30 days after the date of any payment of
Taxes, the Borrower will furnish to the Administrative Agent, at its
address referred to in Section 15.12 of this Agreement, the original or
a certified copy of a receipt evidencing payment thereof. If Taxes ever
become payable in respect of any payment hereunder or under the
Revolving Credit Notes made during a Fiscal Quarter, thereafter the
Borrower will furnish to the Administrative Agent, within thirty (30)
days after the end of such Fiscal Quarter, at such address, a
certificate from the Borrower stating that any payments made during
such Fiscal Quarter are exempt from or not subject to Taxes.
(g) SURVIVAL OF PROVISION.
Without prejudice to the survival of any other
agreement of the Borrower hereunder, the agreements and liabilities of
the Borrower contained in this Section 14.3 shall survive the payment
in full of the Secured Obligations.
14.4 LOSSES.
If any payment of principal of, or Rate Conversion or Rate
Continuation of, any LIBOR Rate Loan is not paid when due or is made on a day
other than on the last day of an Interest Period relating to such Loan, as a
result of a payment or Rate Conversion or Rate Continuation pursuant to the
provisions of Section 2.10 of this Agreement or acceleration of the maturity of
the Notes pursuant to Section 10 of this Agreement or for any other reason, the
Borrower shall, upon demand by any Lender (with a copy of such demand to the
Administrative Agent), pay to the Administrative Agent for the account of such
Lender any amounts required to compensate such Lender for any additional losses,
costs or expenses which it may reasonably incur as a result of such payment or
Rate Conversion or Rate Continuation, including, without limitation, any loss,
cost or expense (other than any expenses directly attributable to loan
origination efforts) incurred by reason of the liquidation or reemployment of
deposits or other funds acquired by such Lender to fund or maintain such Loan.
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14.5 INDEMNIFICATION FOR REQUESTS.
Whenever the Borrower: (a) shall revoke any Credit Request or
Rate Conversion/Continuation Request involving any LIBOR Rate Loan, (b) shall
for any other reason fail to borrow pursuant to any such Credit Request or Rate
Conversion/Continuation Request or otherwise comply therewith, (c) shall fail to
fulfill, on or before the date specified in any such request, the applicable
conditions set forth in Section 3 of this Agreement or (d) shall fail to honor
any prepayment notice with respect to LIBOR Rate Loans, then, in each case on
any Lender's demand, the Borrower shall indemnify each Lender and the
Administrative Agent against any loss, cost or expense incurred by such Lender
or the Administrative Agent as a result of any such failure by the Borrower,
including, without limitation, any loss, cost or expense incurred by reason of
the liquidation or reemployment of deposits or other funds acquired by such
Lender or the Administrative Agent to fund the LIBOR Rate Loan to be made by
such Lender or the Administrative Agent in connection with such request when
such LIBOR Rate Loan, as a result of such failure by the Borrower, is not made
on such date.
14.6 GENERAL INDEMNITY.
The Borrower and each Subsidiary Guarantor shall jointly and
severally indemnify and hold harmless the Administrative Agent, the Lead
Arranger and each Lender and the Designated Letter of Credit Issuer, and the
respective directors, officers, employees and Affiliates thereof, from and
against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses and disbursements of any kind or
nature whatsoever including, without limitation, reasonable fees and
disbursements of counsel and settlements costs, which may be imposed on,
incurred by, or asserted against the Administrative Agent, the Lead Arranger,
any Lender or the Designated Letter of Credit Issuer, or the respective
directors, officers, employees and Affiliates thereof in connection with any
investigative, administrative or judicial proceeding (whether the Administrative
Agent, the Lead Arranger, such Lender or the Designated Letter of Credit Issuer
is or is not designated as a party thereto) directly or indirectly relating to
or arising out of this Agreement or any other Loan Document, the transactions
contemplated thereby, or any actual or proposed use of proceeds hereunder or
thereunder, except that neither the Administrative Agent, the Lead Arranger, any
Lender nor the Designated Letter of Credit Issuer, nor any such directors,
officers, employees and Affiliates thereof shall have the right to be
indemnified hereunder for its own gross negligence or willful misconduct as
determined by a court of competent jurisdiction.
14.7 ENVIRONMENTAL INDEMNITY.
The Borrower and each Subsidiary Guarantor shall, at its sole
cost and expense, jointly and severally indemnify, defend and save harmless the
Administrative Agent, the Lead Arranger, each Lender and the Designated Letter
of Credit Issuer (and each of their respective officers, directors, employees,
Administrative Agents, representatives and contractors and any subsequent owner
of the Collateral who purchases Collateral through the Lender or pursuant to any
enforcement action by the Lender) from and against any and all damages, losses,
liabilities, obligations, penalties, claims, litigations, demands, defenses,
judgments, suits, actions, proceedings, costs, disbursements and/or expenses
(including, without limitation, reasonable attorneys' and experts' fees,
expenses and disbursements) of any kind or nature whatsoever which may at any
time be imposed upon, incurred by or asserted against any of such indemnified
Persons directly or indirectly relating to, resulting from or arising out of:
(i) Environmental Claims against the Borrower or such Subsidiary Guarantor, (ii)
a material misrepresentation or inaccuracy in any representation or warranty
contained in this Agreement relating to any environmental matters applicable to
the Borrower or (iii) a breach or failure to perform any covenant made by the
Borrower in this Agreement with respect to environmental matters which continues
uncured after the expiration of any applicable grace period. The Borrower will
pay
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any sums owing by the Borrower to the Administrative Agent, each Lender and the
Designated Letter of Credit Issuer pursuant to this indemnification obligation
five (5) days after demand by the Administrative Agent, on behalf of the
Administrative Agent, such Lender the Lead Arranger or the Designated Letter of
Credit Issuer, together with interest on such amount accruing from and after the
expiration of such period at the default rate of interest hereunder.
14.8 CERTIFICATE FOR INDEMNIFICATION.
Each demand by the Administrative Agent, the Lead Arranger, a
Lender or the Designated Letter of Credit Issuer for payment pursuant to this
Section 14 shall be accompanied by a certificate setting forth the reason for
the payment, the amount to be paid, and the computations and assumptions in
determining the amount, which certificate shall, absent manifest error, be
presumed to be correct. In determining the amount of any such payment
thereunder, the Administrative Agent, each Lender, the Lead Arranger and the
Designated Letter of Credit Issuer may use reasonable averaging and attribution
methods, so long as such methods are set forth in the certificate referred to in
the preceding sentence. The failure to give any such notice shall not release or
diminish any of the Borrower's obligations to pay additional amounts pursuant to
this Section 14 upon the subsequent receipt of such notice.
14.9 DUTY TO MITIGATE; STANDARD TREATMENT; REIMBURSEMENT LIMITATION
PERIOD.
The Administrative Agent, the Lead Arranger and each Lender or
the Designated Letter of Credit Issuer seeking payment pursuant to this Section
14 shall use reasonable efforts and take all reasonable actions to avoid the
cause of the payment and to minimize the amount thereof. Each Lender agrees that
it will not seek compensation or reimbursement provided for in this Section 14.9
unless the Administrative Agent, such Lender, the Lead Arranger, or the
Designated Letter of Credit Issuer, as the case may be, as a matter of policy
intends generally to seek comparable compensation or reimbursement from other
borrowers similarly situated and similarly documented financial accommodations.
Notwithstanding anything in this Agreement to the contrary, neither the
Administrative Agent nor any Lender, the Lead Arranger or the Designated Letter
of Credit Issuer, as the case may be, shall be entitled to compensation or
payment or reimbursement of other amounts (a) under Sections 2.15, 14.1, 14.2,
14.4 and 14.5 hereof for any amounts incurred or accruing more than 180 days
prior to the giving of notice to the Borrower of additional costs or other
amounts of the nature described in such Sections and (b) under Section 14.3 for
any amounts incurred or accruing more than three (3) years prior to the giving
of notice to the Borrower of the amounts of the nature described in such
Section.
SECTION 15 GENERAL.
This Agreement and the other Loan Documents shall be governed by the
following provisions:
15.1 AMENDMENTS AND WAIVERS.
No amendment or waiver of any provision of this Agreement or
the Notes or any other Loan Document, nor consent to any departure by the
Borrower or any Subsidiary Guarantor therefrom, shall in any event be effective
unless the same shall be in writing and signed by the Required Lenders, the
Administrative Agent, the Borrower, and, to the extent that any amendment,
waiver or consent hereunder shall be effective only in the specific instance and
for the specific purpose for which given: PROVIDED, HOWEVER that:
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(a) REQUIRED UNANIMOUS CONSENT.
Unanimous consent of all of the Lenders shall be
required with respect to (a) the extension of maturity of any Note, or
the extension of the payment date for interest, principal and/or fees
thereunder, or (b) any reduction in fees hereunder or the rate of
interest on any Note (other than a reduction in fees or interest by
virtue of a waiver of an Event of Default as provided for in Sections
2.13(d) and 2.12(b)(ii) of this Agreement), or in any amount of
principal or interest due on any Note, or in the manner of pro rata
application of any payments made by the Borrower to the Lenders
hereunder, or (c) any change in any percentage voting requirements in
this Agreement, or (d) any increase in the principal amount of or
percentage of any Lender's Commitments, or (e) any change in the
definitions "Collateral", "Required Lenders" or "Required Term B
Lenders under this Agreement, or (f) increase the permitted amount of
Permitted Special Advances, or (g) except as otherwise permitted
herein, the release in one or more actions of Collateral with an
aggregate value exceeding $250,000 or (h) the release of any Subsidiary
Guarantor, (i) any change in Section 12, Sections 13.1 or 13.2, or
Section 14 hereof or this Section 15.1 itself, or (j) subject to the
Administrative Agent's exercise of its Permitted Discretion pursuant to
Section 2.2 hereof with respect to reserves, any change in the advance
rates set forth in the definition of "Borrowing Base" or in any other
component thereof or definition applicable thereto, or (k) any waiver
or amendment of Section 8.4(a) and 8.4(c) hereof and the definition of
"Covenant Compliance Event". Notice of amendments or consents ratified
by the Lenders hereunder shall immediately be forwarded by the
Administrative Agent to the Borrower and to all Lenders.
(b) REQUIRED TERM B LENDER CONSENT.
Consent of the Required Term B Lenders shall be
required with respect to any amendment, waiver, or consent to: (i)
modify the payment terms, interest on or maturity of the Term B Loans
(other than in connection with an Event of Default hereunder), (ii)
release any portion of the Priority Term B Collateral, (iii) modify or
otherwise effect of waiver of any event specified in the definition of
"Term B Loan Event", (iv) waive any Term B Loan Event, (v) create an
additional "Event of Default" without creating a corresponding addition
to the definition of "Term B Loan Event" or (vi) instruct the
Administrative Agent to accelerate the Term B Loans pursuant to Section
10.3 hereof. Notice of amendments or consents ratified by the Term B
Lenders hereunder shall immediately be forwarded by the Administrative
Agent to the Borrower and to all other Lenders.
(c) REQUIRED DESIGNATED LETTER OF CREDIT ISSUER CONSENT.
Consent of the Designated Letter of Credit Issuer
shall be required with respect to any amendment, waiver, or consent,
with respect to Section 2.11 or any other provision the amendment or
waiver of which would adversely affect the Designated Letter of Credit
Issuer.
Each Lender, the Designated Letter of Credit Issuer and any other holder of a
Note hereunder shall be bound by any amendment, waiver or consent obtained as
authorized by this Section 15.1, regardless of its failure to agree thereto. Any
amendment, waiver, discharge, termination or consent pursuant to this Section
15.1 shall be effective only in the specific instance and for the specific
purpose for which it was given. Any amendment, modification, termination, waiver
or consent effected in accordance with this Section shall be binding upon each
Lender at the time outstanding, each future Lender and, upon being signed by the
Borrower, on the Borrower. For purposes of this Section, the Administrative
Agent and the Borrower shall have primary
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responsibility for the negotiation, preparation and documentation relating to
any amendment, waiver, discharge, termination or consent of this Agreement or
other Loan Documents.
15.2 GENERAL APPOINTMENT AS ATTORNEY-IN-FACT.
In addition to the provisions of Sections 10.16 of this
Agreement, the Borrower and each Subsidiary Guarantor hereby irrevocably
constitute and appoint the Administrative Agent and any officer or
Administrative 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 the Borrower and such Subsidiary Guarantor and in the name of the
Borrower and such Subsidiary Guarantor or in its own name, from time to time
following the occurrence of an Event of Default which is continuing (unless
waived in accordance with Section 15.1 of this Agreement), in the Administrative
Agent's reasonable discretion, for the purpose of carrying out the terms of this
Agreement, without notice (except as specifically provided herein) to or assent
by the Borrower, to take to the extent permitted by law 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,
without limiting the generality of the foregoing, the power and right, on behalf
of the Borrower and such Subsidiary Guarantor, to do the following: (a) to pay
or discharge taxes, liens, security interests or other encumbrances levied or
placed on or threatened against the Collateral, to effect any repairs or any
insurance, called for by the terms of this Agreement and to pay all or any part
of the premiums therefor and the costs thereof, and otherwise to itself perform
or comply with, or otherwise cause performance or compliance with, any of the
covenants or other agreements of the Borrower and such Subsidiary Guarantor
contained in this Agreement which the Borrower or such Subsidiary Guarantor has
failed to perform or with which the Borrower or such Subsidiary Guarantor has
not complied; (b) upon notice to the Borrower, to commence and prosecute any
suits, actions or proceedings at law or in equity in any court of competent
jurisdiction to collect the Collateral or any part thereof and to enforce any
other right in respect of any Collateral; (c) upon notice to the Borrower, to
defend any suit, action or proceeding brought against the Borrower or such
Subsidiary Guarantor with respect to any Collateral; (d) upon notice to the
Borrower, to settle, compromise or adjust any suit, action or proceeding
described above and, in connection therewith, to give such discharges or
releases as the Administrative Agent may deem appropriate; (e) to sell,
transfer, pledge, make any agreement with respect to or otherwise deal with any
of the Collateral generally as fully and completely as though the Administrative
Agent were the absolute owner thereof for all purposes; and (f) to do, at the
Administrative Agent's option and the Borrower's expense, at any time, or from
time to time, all acts and things which the Administrative Agent reasonably
deems necessary to protect, preserve or realize upon the Collateral and the
Administrative Agent's security interest therein, in order to effect the intent
of this Agreement, all as fully and effectively as the Borrower or such
Subsidiary Guarantor might do. The Borrower and each Subsidiary Guarantor hereby
ratifies all that said attorneys shall lawfully do or cause to be done by virtue
hereof. This power of attorney is a power coupled with an interest and shall be
irrevocable.
(a) ADMINISTRATIVE AGENT NOT LIABLE.
The powers conferred on the Administrative Agent
hereunder are solely to protect its interests in the Collateral and
shall not impose any duty upon it to exercise any such powers. The
Administrative Agent shall be accountable only for amounts that it
actually receives as a result of the exercise of such powers and
neither it nor any of its officers, directors, employees or
Administrative Agents shall be responsible to the Borrower for any act
or failure to act, except for its own gross negligence or willful
misconduct.
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(b) PERFORMANCE BY ADMINISTRATIVE AGENT OF THE BORROWER'S
OBLIGATIONS.
If the Borrower or any Subsidiary Guarantor fails to
perform or comply with any of its agreements contained herein and an
Event of Default shall have occurred which is continuing and has not
been waived in accordance with Section 15.1 hereof, and the
Administrative Agent shall itself perform or comply, or otherwise cause
performance or compliance, with such agreement, the expenses of the
Administrative Agent incurred in connection with such performance or
compliance, together with interest thereon at the highest rate of
interest that would from time to time apply to any Type of Borrowing
under Section 2.12(c), shall be payable by the Borrower to the
Administrative Agent on demand and upon the expiration of five (5)
calendar days after such demand the Borrower shall be deemed to have
delivered a Deemed Credit Request in the relevant amounts. The
Administrative Agent will notify the Borrower as soon as it is
practicable of any action taken by it of the nature referred to herein.
15.3 CUMULATIVE PROVISIONS.
Each right, power or privilege specified or referred to in
this Agreement is in addition to and not in limitation of any other rights,
powers and privileges that the Administrative Agent and the Lenders may
otherwise have or acquire by operation of Law, by other contract or otherwise.
15.4 EFFECTIVE AGREEMENT; BINDING EFFECT.
This Agreement shall become effective on the date and as of
the time (the "Effective Date") on and as of which the Borrower, each Subsidiary
Guarantor and each of the Lenders and the Designated Letter of Credit Issuer
shall have signed a copy hereof (whether the same or different copies) and shall
have delivered the same to the Administrative Agent at the address specified in
Section 15.12 or, in the case of the Lenders, shall have given to the
Administrative Agent telephonic (confirmed in writing), written telex or
facsimile transmission notice (actually received) at such office that the same
has been signed and mailed to it. As of the Effective Time, this Agreement shall
be binding upon and inure to the benefit of the Borrower, the Subsidiary
Guarantors, the Administrative Agent, the Lenders and the Designated Letter of
Credit Issuer, and their respective successors and assigns, except that neither
the Borrower nor the Subsidiary Guarantors shall have the right to assign their
rights hereunder or any interest herein without the prior unanimous written
consent of the Administrative Agent, the Lenders and the Designated Letter of
Credit Issuer.
15.5 COSTS AND EXPENSES.
The Borrower agrees to pay on demand (a) all reasonable costs
and expenses of: (x) the Administrative Agent (including, without limitation,
the reasonable fees and out-of-pocket expenses of counsel for the Administrative
Agent) in connection with the preparation, execution, delivery, administration,
modification, amendment and waiver of this Agreement or the other Loan Documents
and (y) the Lead Arranger in connection with the arrangement on or after the
Closing Date of a syndicate of Lenders to purchase a portion of the Commitments
(including travel and administration expenses of the Administrative Agent, Lead
Arranger and any Syndication Agent); PROVIDED, HOWEVER, that the Borrower shall
not be responsible to pay for any costs or expenses of the Designated Letter of
Credit Issuer or the Lenders (including, without limitation, the fees and
out-of-pocket expenses of counsel to the Designated Letter of Credit Issuer and
the Lenders) in connection with any of the matters specified in clauses (a)(x)
and (y) above and (b) the Administrative Agent, the Designated Letter of Credit
Issuer and the Lenders (including, without limitation, the reasonable fees and
out-of-pocket expenses of counsel to the Administrative Agent, the Designated
Letter of Credit Issuer and the Lenders) in connection with
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the enforcement of, the exercise of remedies under, or the preservation of
rights and remedies under this Agreement or any of the other Loan Documents
(including any collection, bankruptcy or other enforcement proceedings arising
with respect to the Borrower, this Agreement, or any Event of Default under this
Agreement); PROVIDED, HOWEVER, that Lenders who are not acting in the capacity
as the Administrative Agent or the Designated Letter of Credit Issuer shall be
entitled to reimbursement for no more than one counsel representing all such
Lenders (absent a conflict of interest in which case the Lenders may engage and
be reimbursed for additional counsel).
15.6 SURVIVAL OF PROVISIONS.
All representations and warranties made in or pursuant to this
Agreement shall survive the execution and delivery of this Agreement and of the
Revolving Credit Notes. The provisions of Section 13.4 and Section 14 of this
Agreement shall survive the payment of the Secured Obligations and any other
Indebtedness owed by the Borrower hereunder and the termination of this
Agreement (whether by acceleration or otherwise).
15.7 CAPTIONS.
The several captions to different Sections and the respective
subsections thereof are inserted for convenience only and shall be ignored in
interpreting the provisions of this Agreement.
15.8 SHARING OF INFORMATION.
Subject to the provisions of Section 13.4, the Administrative
Agent, the Lead Arranger, each Lender and the Designated Letter of Credit Issuer
shall have the right to furnish to its Affiliates, its accountants, its
employees, its officers, its directors, its legal counsel, potential
participants, and to any governmental agency having jurisdiction over the
Administrative Agent, the Lead Arranger, such Lender and the Designated Letter
of Credit Issuer information concerning the business, financial condition, and
property of the Borrower, the amount of the Loans of the Borrower hereunder, and
the terms, conditions and other provisions applicable to the respective parts
thereof.
15.9 INTEREST RATE LIMITATION.
Notwithstanding anything herein to the contrary, if at any
time the applicable interest rate, together with all fees and charges that are
treated as interest under applicable law as provided for herein or in any other
document executed in connection herewith, or otherwise contracted for, charged,
taken, received or reserved by any Lender or the Designated Letter of Credit
Issuer shall exceed the maximum lawful rate that may be contracted for, charged,
taken, received or reserved by the Lender in accordance with applicable law (the
"Maximum Lawful Rate"), then so long as the Maximum Lawful Rate would be so
exceeded, the rate of interest and all such charges payable, contracted for,
charged, taken, received or reserved in respect of the Loans of the Lenders or
the Designated Letter of Credit Issuer to the Borrower shall be equal to the
Maximum Lawful Rate; PROVIDED, that, if any time thereafter the applicable
interest rate, together with all fees and charges that are treated as interest
under applicable law as provided for herein or in any other document executed in
connection herewith, or otherwise contracted for, charged, taken, received or
reserved by the Lenders shall be less than the Maximum Lawful Rate, the Borrower
shall continue to pay such interest and fees hereunder at the Maximum Lawful
Rate until such time as the total interest received by the Administrative Agent
for the benefit of the Lenders and the Designated Letter of Credit Issuer, is
equal to the total interest and fees that would have been received had the
interest rate payable hereunder been (but for the operation of this Section
15.9) the interest rate payable since the Closing Date as otherwise
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provided in this Agreement. Thereafter, interest payable hereunder shall be paid
at the rate(s) of interest and the charges provided in Section 2.12 of this
Agreement, unless and until the rate of interest again exceeds the Maximum
Lawful Rate, and at that time this Section 15.9 shall again apply. In no event
shall the total interest, together with all fees and charges that are treated
like interest, received by any Lender or the Designated Letter of Credit Issuer
pursuant to the terms hereof exceed the amount which such Lender or the
Designated Letter of Credit Issuer could lawfully have received had the interest
and such fees and charges due hereunder been calculated for the full term hereof
at the Maximum Lawful Rate. If, notwithstanding the provisions of this Section
15.9, a court of competent jurisdiction shall finally determine that a Lender or
the Designated Letter of Credit Issuer has received interest, or fees and
charges that are treated like interest, hereunder in excess of the Maximum
Lawful Rate, the Administrative Agent shall, to the extent permitted by
applicable Law, promptly apply such excess to the principal amounts owing to
such Lender or the Designated Letter of Credit Issuer and thereafter shall
refund any excess to the Borrower or as a court of competent jurisdiction may
otherwise order.
15.10 LIMITATION OF LIABILITY.
To the extent permitted by applicable law, no claim may be
made by the Borrower, any of the Subsidiary Guarantors, the Administrative
Agent, the Lead Arranger, the Designated Letter of Credit Issuer, any Lender or
any other Person against the Administrative Agent, the Lead Arranger, any the
Designated Letter of Credit Issuer or Lender, or the Affiliates, directors,
officers, employees, Administrative Agents, attorneys and consultants of any of
them, for any special, indirect, consequential or punitive damages in respect of
any claim for breach of contract or any other theory of liability arising out of
or related to the transactions contemplated by this Agreement, or any act,
omission or event occurring in connection therewith; and the Administrative
Agent, the Lead Arranger, the Designated Letter of Credit Issuer, the Borrower,
each Subsidiary Guarantor and the Lenders hereby waive, release and agree not to
xxx upon any claim for any such damages, whether or not accrued and whether or
not known or suspected to exist in its favor.
15.11 ILLEGALITY.
If any provision in this Agreement or any other Loan Document
shall for any reason be or become illegal, void or unenforceable, that
illegality, voidness or unenforceability shall not affect any other provision.
15.12 NOTICES.
All notices, requests, demands and other communications
provided for hereunder shall be in writing and shall be given solely: (a) by
hand delivery or by overnight courier delivery service, with all charges paid,
(b) by facsimile transmission, if confirmed same day in writing by first class
mail mailed, or (c) by registered or certified mail, postage prepaid and
addressed to the parties. For the purposes of this Agreement, such notices shall
be deemed to be given and received: (i) if by hand or by overnight courier
service, upon actual receipt, (ii) if by facsimile transmission, upon receipt of
machine-generated confirmation of such transmission (and provided the
above-stated written confirmation is sent) or (iii) if by registered or
certified mail, upon the first to occur of actual receipt or the expiration of
48 hours after deposit with the U.S. Postal Service; PROVIDED, HOWEVER, that
notices from the Borrower to Administrative Agent, the Lenders, the Designated
Letter of Credit Issuer pursuant to any of the provisions hereof, including
without limitation Section 2 and Section 8.1 of this Agreement, shall not be
effective until actually received by the Administrative Agent, the Lenders, the
Designated Letter of Credit Issuer or the Designated Hedge Creditor, as the case
may be. Notices or other communications hereunder shall be addressed, if to the
Borrower and any Subsidiary Guarantor, to the Borrower at the address specified
on the signature pages of this Agreement with respect to the Borrower
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with a copy to the attention of: Xxxxxxx X. Xxxxxxxx, CFO and Treasurer,
(provided any failure to deliver such copy shall not affect the operative effect
or enforceability of such notice), if to the Administrative Agent, to the Notice
Office of the Administrative Agent specified on the signature pages of this
Agreement; if to the Lead Arranger, to the Notice Office of the Lead Arranger
specified on the signature pages of this Agreement; if to a Lender, to the
Notice Office of such Lender specified on the signature pages of this Agreement
or, if such Lender shall have become a party hereto pursuant to Section 13.1, in
the most recent Assignment Agreement to which such Lender is a party; if to the
Designated Letter of Credit Issuer, to the Notice Office of such Designated
Letter of Credit Issuer specified on the signature pages of this Agreement; and,
if to the Designated Hedge Creditor, to the address thereof specified in the
Hedge Agreement applicable thereto.
15.13 GOVERNING LAW.
This Agreement and the other Loan Documents (including the
Administrative Agent Fee Letter) and the respective rights and obligations of
the parties hereto shall be governed by and construed in accordance with the
internal laws of the State of Ohio (without giving effect to the conflict of
laws rules thereof and except to the extent perfection of the Administrative
Agent's security interests and Liens and the effect thereof are otherwise
governed pursuant to the UCC or the applicable Law of any foreign jurisdiction).
15.14 ENTIRE AGREEMENT.
This Agreement and the other Loan Documents (including the
Administrative Agent Fee Letter whenever executed) referred to in or otherwise
contemplated by this Agreement set forth the entire agreement of the parties as
to the transactions contemplated by this Agreement.
15.15 JURY TRIAL WAIVER.
THE BORROWER, EACH OF THE SUBSIDIARY GUARANTORS, THE
ADMINISTRATIVE AGENT, THE LEAD ARRANGER, THE DESIGNATED LETTER OF CREDIT ISSUER
AND EACH OF THE LENDERS WAIVE ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING
ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE, AMONG THE
BORROWER, THE SUBSIDIARY GUARANTORS, THE ADMINISTRATIVE AGENT, THE LEAD
ARRANGER, THE DESIGNATED LETTER OF CREDIT ISSUER AND THE LENDERS, OR ANY
THEREOF, ARISING OUT OF, IN CONNECTION WITH, RELATED TO, OR INCIDENTAL TO THE
RELATIONSHIP ESTABLISHED AMONG THEM IN CONNECTION WITH THIS AGREEMENT OR ANY
NOTE OR OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN
CONNECTION HEREWITH OR THE TRANSACTIONS RELATED THERETO.
15.16 JURISDICTION.
EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY AND
UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE NONEXCLUSIVE
JURISDICTION OF ANY OHIO STATE COURT OR FEDERAL COURT OF THE UNITED STATED OF
AMERICA SITTING IN CUYAHOGA COUNTY, OHIO, AND ANY APPELLATE COURT FROM ANY
THEREOF, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS
AGREEMENT, THE REVOLVING CREDIT NOTES OR ANY LOAN DOCUMENT, OR FOR RECOGNITION
OR ENFORCEMENT OF ANY JUDGMENT, AND EACH OF THE PARTIES HERETO HEREBY
IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL CLAIMS IN
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RESPECT OF ANY SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH
OHIO STATE OR, TO THE EXTENT PERMITTED BY LAW, IN SUCH FEDERAL COURT. EACH OF
THE PARTIES 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 MAY OTHERWISE HAVE TO BRING ANY ACTION OR
PROCEEDING RELATING TO THIS AGREEMENT, THE REVOLVING CREDIT NOTES OR ANY LOAN
DOCUMENT IN THE COURTS OF ANY JURISDICTION.
15.17 VENUE; INCONVENIENT FORUM.
EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT IT MAY LEGALLY AND EFFECTIVELY DO
SO, ANY OBJECTION THAT 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, THE
REVOLVING CREDIT NOTES OR ANY OTHER LOAN DOCUMENT IN ANY OHIO STATE OR FEDERAL
COURT SITTING IN OHIO. EACH OF THE PARTIES HERETO HEREBY 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. THE BORROWER AND EACH SUBSIDIARY
GUARANTOR CONFIRM THAT THE FOREGOING WAIVERS ARE INFORMED AND FREELY MADE.
15.18 EXECUTION IN COUNTERPARTS; EXECUTION BY FACSIMILE.
This 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 taken together shall
constitute but one and the same agreement. Delivery of an executed counterpart
hereof by facsimile shall be effective as manual delivery of such counterpart;
PROVIDED, HOWEVER, that, each party hereto will promptly thereafter deliver
counterpart originals of such counterpart facsimiles delivered by or on behalf
of such party.
[REMAINDER OF PAGE INTENTIONALLY BLANK]
119
126
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers or Administrative Agents thereunto duly
authorized, as of the date first above written.
BORROWER
OLYMPIC STEEL, INC., AS THE BORROWER
-------------------------------------------------
By: Xxxxxxx X. Xxxxxxxx
Its: Chief Financial Officer
Address for notices:
0000 Xxxxxxxx Xxxx
Xxxxxxxxx, Xxxx 00000
Attention: Xxxxxxx X. Xxxxxxxx
Telecopy: (000) 000-0000
With a copy to:
Kahn, Kleinman, Xxxxxxxx & Xxxxxx Co., LPA
Xxx Xxxxx xx Xxxxxxxx, Xxxxx 0000
Xxxxxxxxx, Xxxx 00000
Attention: Xxxxx X. Xxxxxx
Telecopy (000) 000-0000
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SUBSIDIARY GUARANTORS
OLYMPIC STEEL LAFAYETTE, INC., AS A
SUBSIDIARY GUARANTOR
-------------------------------------------------
By: Xxxxxxx X. Xxxxxxxx
Its: Chief Financial Officer, Treasurer and
Assistant Secretary
Address for notices:
0000 Xxxxxxxx Xxxx
Xxxxxxxxx, Xxxx 00000
Attention: Xxxxxxx X. Xxxxxxxx
Telecopy: (000) 000-0000
With a copy to:
Kahn, Kleinman, Xxxxxxxx & Xxxxxx Co., LPA
Xxx Xxxxx xx Xxxxxxxx, Xxxxx 0000
Xxxxxxxxx, Xxxx 00000
Attention: Xxxxx X. Xxxxxx
Telecopy (000) 000-0000
OLYMPIC STEEL MINNEAPOLIS, INC., AS A
SUBSIDIARY GUARANTOR
-------------------------------------------------
By: Xxxxxxx X. Xxxxxxxx
Its: Chief Financial Officer, Treasurer and
Assistant Secretary
Address for notices:
0000 Xxxxxxxx Xxxx
Xxxxxxxxx, Xxxx 00000
Attention: Xxxxxxx X. Xxxxxxxx
Telecopy: (000) 000-0000
With a copy to:
Kahn, Kleinman, Xxxxxxxx & Xxxxxx Co., LPA
Xxx Xxxxx xx Xxxxxxxx, Xxxxx 0000
Xxxxxxxxx, Xxxx 00000
Attention: Xxxxx X. Xxxxxx
Telecopy (000) 000-0000
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128
OLYMPIC STEEL IOWA, INC., AS A
SUBSIDIARY GUARANTOR
-------------------------------------------------
By: Xxxxxxx X. Xxxxxxxx
Its: Chief Financial Officer and Treasurer
Address for notices:
0000 Xxxxxxxx Xxxx
Xxxxxxxxx, Xxxx 00000
Attention: Xxxxxxx X. Xxxxxxxx
Telecopy: (000) 000-0000
With a copy to:
Kahn, Kleinman, Xxxxxxxx & Xxxxxx Co., LPA
Xxx Xxxxx xx Xxxxxxxx, Xxxxx 0000
Xxxxxxxxx, Xxxx 00000
Attention: Xxxxx X. Xxxxxx
Telecopy (000) 000-0000
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129
OLY STEEL WELDING, INC.,
AS A SUBSIDIARY GUARANTOR
-------------------------------------------------
By: Xxxxxxx X. Xxxxxxxx
Its: Chief Financial Officer and Treasurer
Address for notices:
0000 Xxxxxxxx Xxxx
Xxxxxxxxx, Xxxx 00000
Attention: Xxxxxxx X. Xxxxxxxx
Telecopy: (000) 000-0000
With a copy to:
Kahn, Kleinman, Xxxxxxxx & Xxxxxx Co., LPA
Xxx Xxxxx xx Xxxxxxxx, Xxxxx 0000
Xxxxxxxxx, Xxxx 00000
Attention: Xxxxx X. Xxxxxx
Telecopy (000) 000-0000
OLYMPIC STEEL RECEIVABLES LLC,
AS A SUBSIDIARY GUARANTOR
-------------------------------------------------
By: Olympic Steel Receivables, Inc.
Its: Managing Member
By: Xxxxxxx X. Xxxxxxxx
Its: Chief Executive Officer and President
Address for notices:
0000 Xxxxxxxx Xxxx
Xxxxxxxxx, Xxxx 00000
Attention: Xxxxxxx X. Xxxxxxxx
Telecopy: (000) 000-0000
With a copy to:
Kahn, Kleinman, Xxxxxxxx & Xxxxxx Co., LPA
Xxx Xxxxx xx Xxxxxxxx, Xxxxx 0000
Xxxxxxxxx, Xxxx 00000
Attention: Xxxxx X. Xxxxxx
Telecopy (000) 000-0000
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ADMINISTRATIVE AGENT
NATIONAL CITY COMMERCIAL FINANCE, INC., as
Administrative Agent
-------------------------------------------------
By: Xxxxx X. Xxxxxx
Its: Vice President
Address for Notices:
National City Commercial Finance, Inc.
0000 Xxxx Xxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxx, Xxxx 00000
Attention: Xxxxx Xxxxxx
Telecopy: (000) 000-0000
Payment Office:
National City Commercial Finance, Inc.
0000 Xxxx Xxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxx, Xxxx 00000
Attention: Xxxx Xxxxxx
Telecopy (000) 000-0000
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LEAD ARRANGER AND DESIGNATED LETTER OF
CREDIT ISSUER
NATIONAL CITY BANK, as Designated Letter of
Credit Issuer and Lead Arranger
-------------------------------------------------
By: Xxxxx X. Xxxxxxx
Its: Managing Director
Address for Notices:
National City Bank
0000 Xxxx Xxxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000
As to Lead Arranger:
Attention: Xxxxx Xxxxx, Ad. Agent Services
Assistant
National City Bank, Ad. Agent Services
0000 Xxxx 0xx Xxxxxx
Xxxxxxxxx, Xxxx 00000
Telecopy (000)-000-0000
As to Designated Letter of Credit Issuer:
C\o National City Commercial Finance, Inc.
0000 Xxxx Xxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxx, Xxxx 00000
Attention: Xxxxx Xxxxxx
Telecopy: (000) 000-0000
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SYNDICATION AGENT
CITICORP USA, INC., as Syndication Agent
-------------------------------------------------
By: Xxxxx Xxxxx
Its: Vice President
Address for Notices:
000 Xxxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx
Attn: Xxxxx Xxxxx
Telecopy: (000) 000-0000
Lending Office:
000 Xxxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx
Attn: Xxxxx Xxxxx
Telecopy: (000) 000-0000
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133
LENDERS:
NATIONAL CITY COMMERCIAL FINANCE, INC., as a
Lender
-------------------------------------------------
By: Xxxxx X. Xxxxxx
Its: Vice President
Address for Notices:
National City Commercial Finance, Inc.
0000 Xxxx Xxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxx, Xxxx 00000
Attention: Xxxxx Xxxxxx, Vice President.
Telecopy: (000) 000-0000
Lending Office:
0000 X. Xxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxx, Xxxx 00000
Attention: Xxxxx Xxxxxx, Vice President.
Telecopy (000) 000-0000
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134
CITICORP USA, INC., as a Lender
-------------------------------------------------
By: Xxxxx Xxxxx
Its: Vice President
Address for Notices:
000 Xxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxx Xxxxx
Telecopy: (000) 000-0000
Lending Office:
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxx Xxxxx
Telecopy: (000) 000-0000
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135
ANNEX I
CREDIT AND SECURITY AGREEMENT, DATED AS OF JUNE 28, 2001, AMONG THE BORROWER,
THE ADMINISTRATIVE AGENT, THE DESIGNATED LETTER OF CREDIT ISSUER AND THE LENDERS
COMMITMENTS AND PERCENTAGES OF THE LENDERS
=============================================================================================================================
Revolving Credit Ratable Portion Term B Term B Commitment
Name of Lender Commitment (percentage) Commitment (percentage)
=============================================================================================================================
National City Commercial Finance $65,000,000 56.521739135% $20,000,000 100%
-----------------------------------------------------------------------------------------------------------------------------
Citicorp USA, Inc. $50,000,000 43.478260865% $0.00 0.00%
=============================================================================================================================
TOTAL COMMITMENT $115,000,000 100% $20,000,000 100%
-----------------
=============================================================================================================================
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ANNEX II
TO
CREDIT AND SECURITY AGREEMENT
DEFINITIONS
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):
"ACCOUNT" means "account" as defined in the UCC.
"ACCOUNT DEBTOR" means any Person who is or becomes obligated
to the Borrower under, with respect to, or on account of an Account.
"ACCOUNTS PAYABLE CERTIFICATE" has the meaning specified in
Section 8.1(d)(iv) of this Agreement.
"ACCUMULATED FUNDING DEFICIENCY" has the meaning ascribed
thereto in section 302(a)(2) of ERISA.
"ADDITIONAL PLEDGED COLLATERAL" means all shares of, limited
and /or general partnership interest in, and limited liability company
interests in, and all securities convertible into, and warrants,
options and other rights to purchase or otherwise acquire, stock of,
either (i) any Person that, after the Closing Date of this Agreement,
as a result of any occurrence, becomes a Subsidiary of the Borrower, or
(ii) any issuer of Pledged Stock, any Partnership or any LLC that are
acquired by the Borrower or any Subsidiary Guarantor after the Closing
Date; all certificates or other instruments representing any of the
foregoing; all Security Entitlements of the Borrower or any Subsidiary
Guarantor in respect of any of the foregoing; all additional
indebtedness from time to time owed to the Borrower or any Subsidiary
Guarantor by any obligor on the Pledged Notes and the instruments
evidencing such indebtedness; and 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 or all of
the foregoing. Additional Pledged Collateral may be General Intangibles
or Investment Property.
"ADDITIONAL SECURITY DOCUMENT" has the meaning specified in
Section 4.13 of this Agreement.
"ADVANCE RATE" means (a) up to 85% in the case of Eligible
Accounts, (ii) up to the percentages set forth on Annex IV (Inventory
Advance Rates) in the case of each class of Eligible Inventory
specified on Annex IV, (iii) 75% of the Forced Liquidation Value of
Eligible M&E and (iv) 50% of the Fair Market Value of Eligible Real
Estate.
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"ADMINISTRATIVE AGENT" means National City Commercial Finance,
Inc., in its capacity as Administrative Agent for the Lenders.
"ADVANTAGE" means any payment (whether made voluntarily or
involuntarily, by offset of any deposit or other Indebtedness or
otherwise) received by a Lender in respect of the Obligations if the
payment results in any other Lender's having more than its Ratable
Portion of the Obligations in question.
"ADMINISTRATIVE AGENT FEE LETTER" means that certain letter
executed by the Borrower and the Administrative Agent, dated May 24,
2001.
"AFFILIATE" means, with respect to a specified Person, any
other Person: (a) which directly or indirectly through one or more
intermediaries controls, or is controlled by, or is under common
control with such Person ("control" meaning the possession, directly or
indirectly, of the power to direct or cause the direction of the
management and policies of a Person, whether through the ownership of
voting securities, by contract or otherwise), (b) which beneficially
owns or holds with power to vote five percent (5%) or more of any class
of the voting stock or similar interest of such Person, (c) five
percent (5%) or more of the voting stock or similar interest of which
other Person is beneficially owned or held by such Person, or (d) who
is an executive officer or director of such Person or of such other
Person.
"AGREEMENT" means this Credit and Security Agreement and any
amendment, supplement or modification, if any, to this Credit and
Security Agreement.
"ALTERNATE BASE RATE" means, for any day, a rate per annum
equal to the higher of: (a) the rate of interest which is established
from time to time by NCB at its principal office in Cleveland, Ohio as
its "prime rate" or "base rate" in effect, such rate to be adjusted
automatically, without notice, as of the opening of business on the
effective date of any change in such rate (it being agreed that: (i)
such rate is not necessarily the lowest rate of interest then available
from NCB on fluctuating rate loans and (ii) such rate may be
established by NCB by public announcement or otherwise) and (b) the
Federal Funds Effective Rate in effect on such day PLUS one half of one
percent (1/2 of 1%) per annum.
"ALTERNATE BASE RATE LOAN" means an Loan, denominated in
Dollars which bears interest as provided in Section 2.12(a)(i) of this
Agreement.
"ALTERNATE BASE RATE BORROWING" means a Borrowing consisting
of Alternate Base Rate Loans.
"APPLICABLE FEE PERCENTAGE" means (i) until the Fee Percentage
Adjustment Date commencing on or after the Administrative Agent's
receipt of the Borrower's annual audited financial statements for
Fiscal Year ending December 31, 2001, a percentage equal to 0.50% per
annum with respect to the unused commitment fee payable pursuant to
Section 2.13(b) hereof, a percentage equal to 3.00% per annum with
respect to the annual standby Letter of Credit fee payable in respect
of the LC Exposure of the Lenders pursuant to Section 2.13(c)(i)
hereof, and 3.00% per annum with respect to commercial documentary
Letters of Credit payable in respect of the LC Exposure of the Lenders
pursuant to Section 2.13(c)(i) hereof and (ii) with respect to any Fee
Percentage Adjustment Date commencing on and after on or after the date
of the Administrative Agent's receipt of such financial statements, and
with respect to the unused commitment fee payable pursuant to Section
2.13(b) hereof and the annual standby Letter of Credit fee payable in
respect of the LC Exposure of the Lenders pursuant to Section
2.13(c)(i) hereof, the applicable percentage corresponding to the
Borrower's average Excess
AII-2
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Availability for the Fiscal Month immediately preceding such Fee
Percentage Adjustment Date):
======================================================================================================
Excess Applicable Standby Applicable Commercial Applicable Unused
Availability Letter of Credit Letter of Credit Fee Commitment Fee
Fee Percentage Percentage Percentage
------------------------------------------------------------------------------------------------------
greater than $30 MM 2.75% 2.75% 0.375%
------------------------------------------------------------------------------------------------------
less than or $30 MM but 3.00% 3.00% 0.500%
equal to
greater than $15 MM
or equal to
------------------------------------------------------------------------------------------------------
less than $15 MM 3.25% 3.25% 0.500%
======================================================================================================
"APPLICABLE MARGIN" means with respect to Revolving Credit Loans, (i)
until the Margin Adjustment Date commencing on or after the Administrative
Agent's receipt of the Borrower's annual audited financial statements for Fiscal
Year ending December 31, 2001, 3.00% per annum with respect to LIBOR Rate Loans
(other than Fixed Asset Component Loans) comprising a Borrowing and 1.00% per
annum with respect to Alternate Base Rate Loans (other than Fixed Asset
Component Loans) comprising a Borrowing, (ii) until the Margin Adjustment Date
commencing on or after the date of the Administrative Agent's receipt of such
financial statements, 3.50% per annum with respect to LIBOR Rate Loans (which
are Fixed Asset Component Loans) comprising a Borrowing and 1.50% per annum with
respect to Alternate Base Rate Loans (which are Fixed Asset Component Loans)
comprising a Borrowing PROVIDED HOWEVER, that such Applicable Margin shall be
immediately increased on the first day of any Fiscal Month to the higher
percentage per annum corresponding to the Borrower's average Excess Availability
for the Fiscal Month immediately preceding such day to the extent such average
Excess Availability would have resulted in such increase had such day been a
Margin Adjustment Date, (iii) with respect to any Margin Adjustment Date
commencing on and after the date of the Administrative Agent's receipt of such
financial statements, the percentage per annum applicable to Alternate Base Rate
Loans or LIBOR Rate Loans (whether Fixed Asset Component Loans or Revolving
Credit Loans other than Fixed Asset Component Loans), as the case may be,
corresponding to the Borrower's average Excess Availability for the Fiscal Month
immediately preceding such Margin Adjustment Date:
===========================================================================================
Excess ABR Loans Non LIBOR Rate Loan ABR Loans LIBOR Rate Loan
Availability Fixed Asset (Non Fixed Asset (Fixed Asset (Fixed Asset
Loans) Loans) Loans) Loans)
-------------------------------------------------------------------------------------------
greater than $30 MM 0.75% 2.75% 1.25% 3.25%
-------------------------------------------------------------------------------------------
less than or $30 MM but 1.00% 3.00% 1.50% 3.50%
equal to
greater than $15 MM
or equal to
-------------------------------------------------------------------------------------------
less than $15 MM 1.25% 3.25% 1.75% 3.75%
===========================================================================================
"APPROVED SECURITIES INTERMEDIARY" means a Securities
Intermediary or Commodity Intermediary selected or approved by the
Administrative Agent and with
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respect to which the Borrower or any Subsidiary Guarantor has
delivered to the Administrative Agent an executed Control Account
Letter.
"ASSIGNMENT AGREEMENT" has the meaning specified in Section
13.1(b).
"BLOCKED ACCOUNT" means a deposit account established with a
Lockbox Bank by the Borrower or a Subsidiary Guarantor in its
respective name pursuant to a Blocked Account Letter and to which only
the Lockbox Bank and the Administrative Agent have access pursuant to
Section 5.1 of this Agreement.
"BORROW" means to obtain a Borrowing.
"BORROWER" means Olympic Steel, Inc.
"BORROWING" means a group of Loans of a single Type made by
the Lenders on a single date and as to which a single Interest Period
is in effect i.e. any group of Loans made by the Lenders of a different
Type, or having a different Interest Period (regardless of whether such
Interest Period commences on the same date as another Interest Period),
or made on a different date shall be considered to comprise a different
Borrowing).
"BORROWING BASE" means, at any date of determination; an
amount not in excess of the difference of the following:
(a) the sum of:
(i) the product of the Advance Rate then in
effect for Eligible Accounts of the Borrower
and the Subsidiary Guarantors (other than
Oly Steel Welding , Inc. and Olympic Steel
Receivables, L.L.C., from and after
completion of the transfer of its Accounts
to the Borrower, Olympic Steel Minneapolis,
Inc. and Olympic Steel Lafayette, Inc. as
required by Section 6.15 hereof) and the
face amount of all Eligible Accounts of the
Borrower and the Subsidiary Guarantors
(other than Oly Steel Welding , Inc. and
Olympic Steel Receivables, L.L.C., from and
after completion of the transfer of its
Accounts to the Borrower, Olympic Steel
Minneapolis, Inc. and Olympic Steel
Lafayette, Inc. as required by Section 6.15
hereof,); PLUS
(ii) the product of the Advance Rate then in
effect for each class of Eligible Inventory
of the Borrower and the Subsidiary
Guarantors (other than Oly Steel Welding ,
Inc. and Olympic Steel Receivables, L.L.C.)
specified on Annex IV (Inventory Advance
Rates) and the book value of Inventory
stated at the lower of cost (determined on a
specific identification method basis) or
market value of such Eligible Inventory and
determined based on the days elapsed since
the original purchase date of the Inventory
as invoiced to the Borrower or such
Subsidiary Guarantor; PLUS
(iii) the lesser of
(x) Twenty Five Million Dollars
($25,000,000) or
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(y) an amount equal to the sum of the
product of the Advance Rate in effect
for Eligible M&E of the Borrower and
the Subsidiary Guarantors (other than
Oly Steel Welding , Inc. and Olympic
Steel Receivables, L.L.C.) PLUS the
Advance Rate in effect for Eligible
Real Estate of the Borrower and the
Subsidiary Guarantors (other than Oly
Steel Welding , Inc. and Olympic Steel
Receivables, L.L.C.)
(provided, each such threshold amount in
clause (iii)(x) and clause (iii)(y) hereof
(collectively, the "Fixed Asset Component")
shall reduce by $166,667 per month on the
first day of each calendar month commencing
April 1, 2002); MINUS
(b) the Reserve Amount.
"BORROWING BASE CERTIFICATE" has the meaning specified in
Section 8.1(d)(ii) of this Agreement.
"BUSINESS DAY" means: (i) a day of the year on which Lenders
are not required or authorized to close in the city in which the
applicable Payment Office of the Administrative Agent is located and
(ii) if the applicable Business Day relates to LIBOR Rate Advances, a
day of the year which is a Business Day described in clause (i) above
and which is also a day on which dealings in Dollar deposits are
carried on in the London interbank market and banks are open for
business in London.
"CAPITAL EXPENDITURES" means any and all amounts invested,
expended or incurred (including Indebtedness under Capitalized Leases)
by a Person in respect of the purchase, acquisition, improvement,
renovation or expansion of any land and depreciable or amortizable
property of such Person (including, without limitation, expenditures
required to be capitalized in accordance with GAAP), each as determined
on a consolidated basis in accordance with GAAP.
"CAPITALIZED LEASE OBLIGATIONS" means all obligations under
Capitalized Leases of a Person in each case taken into account in the
amount thereof accounted for as liabilities identified as "capitalized
lease obligations" (or any similar words) on a consolidated balance
sheet of such Person and its Subsidiaries, as determined on a
consolidated basis in accordance with GAAP.
"CAPITALIZED LEASES" means, in respect of any Person, any
lease of property imposing obligations on such Person, as lessee of
such property, which are required in accordance with GAAP to be
capitalized on a balance sheet of such Person.
"CASH CONCENTRATION ACCOUNT" means, with respect to the
Borrower, the certain commercial deposit account described in the
Disclosure Schedule at NCB, in the name of the Administrative Agent for
the benefit of the Lenders, designated as "National City Commercial
Finance, Inc., as Administrative Agent for the benefit of the Lenders
and Designated Letter of Credit Issuer Cash Concentration Account",
which shall be: (a) maintained by the Borrower with NCB pursuant to the
Deposit Account Control Letter, without liability by the Administrative
Agent or NCB to pay interest thereon, and (b) from which account the
Administrative Agent shall have the irrevocable and exclusive right to
withdraw funds until all of the Secured Obligations are paid,
performed, satisfied and enforced in full and all Commitments and LC
Exposure terminated.
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"CERCLA" means the Comprehensive Environmental Response,
Compensation and Liability Act, as amended, 42 U.S.C. Section Section
9601 ET SEQ.
"CERTIFICATED SECURITY" means "certificated security" as
defined in the UCC.
"CHANGE IN CONTROL" means, from and after the Closing Date,
(i) the ceasing of the Borrower to have beneficial ownership (within
the meaning of Rule 13d-3 of the Securities and Exchange Commission
under the Securities Exchange Act of 1934, as amended) or control of
(a) one hundred percent (100%) (on a fully-diluted basis, disregarding
any director qualifying share ownership) of the combined voting power
of the then outstanding membership interests or stock of the Subsidiary
Guarantors (other than Olympic Steel Iowa, Inc.), Olympia
International, Inc., Olympic Steel Receivables, Inc. and Olympic Steel
Welding, Inc. (or any successor, by operation of law or otherwise, or
assign thereof) entitled to vote generally in the election of directors
or managers thereof and (b) ninety nine percent (99%) (on a
fully-diluted basis, disregarding any director qualifying share
ownership) of the combined voting power of the then outstanding
membership interests or stock (or any successor, by operation of law or
otherwise, or assign thereof) entitled to vote generally in the
election of directors or managers of Olympic Steel Receivables L.L.C.,
or (ii) the ceasing of Olympic Steel Minneapolis, Inc. to have
beneficial ownership (within the meaning of Rule 13d-3 of the
Securities and Exchange Commission under the Securities Exchange Act of
1934, as amended) or control of one hundred percent (100%) (on a
fully-diluted basis, disregarding any director qualifying share
ownership) of the combined voting power of the then outstanding stock
of Olympic Steel Iowa, Inc. (or any successor, by operation of law or
otherwise, or assign thereof) entitled to vote generally in the
election of directors or managers of Olympic Steel Iowa, Inc., or (iii)
individuals who constitute the board of directors of the Borrower (the
"Incumbent Board") as of the Closing Date shall cease to constitute for
any reason at least a majority of the Board of Directors of the
Borrower at any time; PROVIDED, HOWEVER, that any Person becoming a
director subsequent to the date hereof whose election (or nomination
for election) was approved by a vote of at least 66-2/3% of the
directors comprising the Incumbent Board shall be considered for
purposes hereof as though such Person was a member of the Incumbent
Board (and the former member of the Incumbent Board who has been
replaced thereby shall thereupon no longer be considered to be a member
of the Incumbent Board).
"CHARTER DOCUMENTS" means, as to any Person (other than a
natural person), the charter, certificate or articles of incorporation,
by-laws, regulations, general or limited partnership agreement,
certificate of limited partnership, certificate of formation, operating
agreement, or other similar organizational or governing documents of
such Person.
"CHATTEL PAPER" means "chattel paper" as defined in the UCC.
"CLOSING DATE" means the date and the time as of which the
initial Revolving Credit Borrowing is advanced under this Agreement.
"CLOSING FEE" means an amount set forth in the Administrative
Agent Fee Letter.
"COLLATERAL" means all assets of the Borrower and the
Subsidiary Guarantors in which a security interest or Lien is granted
to the Administrative Agent for the benefit of the Lenders pursuant to
Section 4.1 hereof to secure repayment of the Secured Obligations and
all other property of the Borrower or the Subsidiary Guarantors
(including the real property and fixtures referenced in Section 4.2) in
which a Lien is granted to the Administrative Agent for the benefit of
the Lenders to secure repayment of
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the Secured Obligations and expressly excludes any Excluded Property
except to the extent provided in the definition thereof.
"COLLECTIONS" means all payments to a Person from Account
Debtors in respect of Accounts owing to such Person.
"COMMITMENT" means, with respect to any Lender, such Lender's
Revolving Credit Commitment or Term B Commitment.
"COMMODITY ACCOUNT" means "commodity account" as defined in
the UCC.
"COMMODITY CONTRACT" means "commodity contract" as defined in
the UCC.
"COMMODITY CUSTOMER" means "commodity customer" as defined in
the UCC.
"COMMODITY INTERMEDIARY" means "commodity intermediary" as
defined in the UCC.
"CONSOLIDATED ADJUSTED EBITDA" means, with respect to a
Person, for any period, the Consolidated EBITDA of such Person and its
consolidated Subsidiaries for such period adjusted, notwithstanding
anything to the contrary contained herein, so as to:
(A) include for any Testing Period the appropriate financial
items for any Person or business unit of a Person which has been
acquired by the Borrower on a going concern basis, for the portion of
such Testing Period prior to the date of acquisition; PROVIDED THAT, in
so including financial items for such Person or business unit for any
period prior to the date of acquisition, such items shall be included
based on an assumed contribution to Consolidated Adjusted EBITDA
acceptable to the Lenders in their reasonable credit judgment; and
(B) exclude for any Testing Period the appropriate financial
items for any Person or business unit of a Person which has been
disposed of by the Borrower, for the portion of such Testing Period
prior to the date of disposition; PROVIDED THAT, in so excluding
financial items for such Person or business unit for any period prior
to the date of disposition, such items shall be excluded based on an
assumed contribution to Consolidated Adjusted EBITDA acceptable to the
Lenders in their reasonable credit judgment.
"CONSOLIDATED AMORTIZATION EXPENSE" means, with respect to a
Person, for any period, all amortization expenses of such Person and
its consolidated Subsidiaries during such period, as determined on a
consolidated basis in accordance with GAAP.
"CONSOLIDATED CAPITAL EXPENDITURES" means, with respect to a
Person for any period, all Capital Expenditures of such Person and its
consolidated Subsidiaries during such period, as determined on a
consolidated basis in accordance with GAAP.
"CONSOLIDATED DEPRECIATION EXPENSE" means, with respect to a
Person, for any period, all depreciation expenses of such Person and
its consolidated Subsidiaries during such period, as determined on a
consolidated basis in accordance with GAAP.
"CONSOLIDATED EBIT" means, with respect to a Person, for any
period, (a) Consolidated Net Income of such Person and its consolidated
Subsidiaries for such period; PLUS (b) the sum (without duplication) of
the amounts taken into account for such
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period in determining such Consolidated Net Income of (i) Consolidated
Interest Expense of such Person and its consolidated Subsidiaries for
such period, (ii) Consolidated Income Tax Expense of such Person and
its consolidated Subsidiaries for such period, (iii) amortization or
write-off of deferred financing costs of such Person and its
consolidated Subsidiaries for such period, and (iv) extraordinary and
other non-recurring non-cash losses and charges for such period; LESS
(c) gains on sales of assets (other than sales of Inventory in the
ordinary course of business of such Person or its consolidated
Subsidiaries) and other extraordinary gains and other non-recurring
non-cash gains; all as determined on a consolidated basis in
accordance with GAAP.
"CONSOLIDATED EBITDA" means, with respect to a Person, for any
period, (a) Consolidated EBIT of such Person and its consolidated
Subsidiaries for such period; PLUS (b) the sum (without duplication) of
the amounts taken into account for such period in determining such
Consolidated EBIT of (i) Consolidated Depreciation Expense of such
Person and its consolidated Subsidiaries for such period, (ii)
Consolidated Amortization Expense of such Person and its consolidated
Subsidiaries for such period, and (iii) Consolidated Non-Cash Expenses
of such Person and its consolidated Subsidiaries for such period, all
as determined on a consolidated basis in accordance with GAAP.
"CONSOLIDATED FIXED CHARGE COVERAGE RATIO" means, with respect
to a Person, for any Testing Period, the ratio of: (x) the Consolidated
Adjusted EBITDA of such Person and its consolidated Subsidiaries for
such period TO (y) the Consolidated Fixed Charges of such Person and
its consolidated Subsidiaries for such Testing Period, as determined on
a consolidated basis in accordance with GAAP.
"CONSOLIDATED FIXED CHARGES" means, with respect to a Person,
for any period of determination, the sum, without duplication, of: (a)
the Consolidated Interest Expense of such Person and its consolidated
Subsidiaries for such period, PLUS (b) the Consolidated Income Tax
Expense of such Person and its consolidated Subsidiaries during such
period, PLUS (c) the Consolidated Capital Expenditures of such Person
and its consolidated Subsidiaries for such period, PLUS (d) all
scheduled principal payments (including the principal payment portion
of any scheduled Capitalized Lease rental payments) of such Person and
its consolidated Subsidiaries made during such period, PLUS (e) in the
case of the Borrower and its consolidated Subsidiaries, for purposes of
calculating compliance with Section 8.4 hereof, the amount of any
mandatory prepayment required by Section 2.9(c) hereof during such
period, all as determined on a consolidated basis in accordance with
GAAP.
"CONSOLIDATED INCOME TAX EXPENSE" means, with respect to a
Person, for any period, all taxes (based on the net income of such
Person and its consolidated Subsidiaries for such period) paid in cash
during such period (including, without limitation, any additions to
such taxes and any penalties and interest with respect thereto and net
of any tax refunds received during such period), all as determined on a
consolidated basis in accordance with GAAP.
"CONSOLIDATED INTEREST EXPENSE" means, with respect to a
Person, for any period, (a) the net amount of interest expense of such
Person and its consolidated Subsidiaries for such period on the
aggregate outstanding principal amount of the Indebtedness of such
Person and its consolidated Subsidiaries paid in cash during such
period PLUS (b) the interest payment portion of any Capitalized Lease
rental payment of such Person and its consolidated Subsidiaries made
during such period, all as determined on a consolidated basis in
accordance with GAAP.
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"CONSOLIDATED NET INCOME" means, with respect to a Person, for
any period, the net income (or loss) of such Person and its
consolidated Subsidiaries for such period (after taxes and
extraordinary items but without giving effect to any expense related to
the fair market value adjustment of inventory) taken as a single
accounting period determined on a consolidated basis in conformity with
GAAP; provided, HOWEVER, THAT there shall be excluded from Consolidated
Net Income of the Borrower and its consolidated Subsidiaries: (i) the
income, (or loss) of any entity (other than the consolidated
Subsidiaries of the Borrower) in which the Borrower or any such
consolidated Subsidiaries has a joint interest, except to the extent of
the amount of dividends or other distributions actually paid to the
Borrower or any of its consolidated Subsidiaries during such period,
and (ii) the income of any Subsidiary of the Borrower or any of its
consolidated Subsidiaries to the extent that the declaration or payment
of dividends or similar distributions by that Subsidiary of that income
is not at the time permitted by operation of the terms of its charter
or any agreement, instrument, judgment, decree, order, statute, rule or
governmental regulation applicable to that Subsidiary.
"CONSOLIDATED NON-CASH EXPENSES" means, with respect to a
Person, for any period, the non-cash expenses of such Person and its
consolidated Subsidiaries for such period (for the purposes of this
definition, excluding any capitalized interest and deferred taxes), all
as determined on a consolidated basis in accordance with GAAP.
"CONTROL ACCOUNT" means a Securities Account or Commodity
Account maintained by the Borrower or any Subsidiary Guarantor with an
Approved Securities Intermediary which account is the subject of an
effective Control Account Letter, and includes all Financial Assets
held therein and all certificates and instruments, if any, representing
or evidencing the Financial Assets contained therein.
"CONTROL ACCOUNT LETTER" means a letter agreement,
substantially in the form of Exhibit P (with such changes as may be
agreed to by the Administrative Agent), executed by the Borrower or the
applicable Subsidiary Guarantor and the Administrative Agent and
acknowledged and agreed to by the relevant Approved Securities
Intermediary.
"COVENANT COMPLIANCE EVENT" means the occurrence of the
condition that Excess Availability of the Borrower is at any time less
than $13,000,000.
"CREDIT EVENT" means: (a) the incurrence of the obligation of
(i) each Lender to make a Revolving Credit Loan on the occasion of each
Borrowing, (ii) the Designated Letter of Credit Issuer to issue any
Letter of Credit, or (iii) any Lender to participate in the risk of any
Letter of Credit, (b) the making of a Revolving Credit Loan by any
Lender, (c) the issuance of any Letter of Credit by the Designated
Letter of Credit Issuer and the participation by the Lenders in the
risk thereof, (d) the delivery by the Borrower of (i) a Credit Request
requesting a Revolving Credit Borrowing or a Letter of Credit or (ii) a
Rate Conversion\Continuation Request requesting the conversion or
continuation of any Borrowings, (e) a Rate Conversion or Rate
Continuation or (f) the acceptance by the Borrower of proceeds of any
Borrowing.
"CREDIT REQUEST" means a request for a Revolving Credit
Borrowing made in accordance with Section 2.3(a), in the form attached
hereto as EXHIBIT B and incorporated herein by reference.
"DEEMED CREDIT REQUEST" has the meaning specified in Section
2.3(b) of this Agreement.
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"DEFAULT UNDER ERISA" means: (a) the occurrence or existence
of a material Accumulated Funding Deficiency in respect of any Employee
Benefit Plan within the scope of Section 302(a) of ERISA, or (b) any
failure by Borrower or any Subsidiary to make a full and timely payment
of premiums required by Section 4001 of ERISA in respect of any
Employee Benefit Plan, or (c) the occurrence or existence of any
material liability under Section 4062, 4063, 4064, 4069, 4201, 4217 or
4243 of ERISA in respect of any Employee Benefit Plan, or (d) the
occurrence or existence of any material breach of any other law or
regulation in respect of any such Employee Benefit Plan, or (e) the
institution or existence of any action for the forcible termination of
any such Employee Benefit Plan which is within the scope of Section
4001(a)(3) or (15) of ERISA.
"DEFAULTING LENDER" means any Lender with respect to which a
Lender Default is in effect.
"DEPOSIT ACCOUNT" means "deposit account" as defined in the
UCC.
"DEPOSIT ACCOUNT CONTROL LETTER" has the meaning specified in
Section 5.1 of this Agreement and further specifically means a letter
agreement, substantially in the form of Exhibit N (with such changes as
may be agreed to by the Administrative Agent), executed by the Borrower
or a Subsidiary Guarantor, as the case may be, acknowledged and agreed
to by the relevant Lockbox Bank, and accepted by the Administrative
Agent, and regarding the Lockbox and the Blocked Account maintained by
such Lockbox Bank for the Borrower or Subsidiary Guarantor.
"DESIGNATED HEDGE AGREEMENT" means any Hedge Agreement to
which the Borrower is a party which, pursuant to a written instrument
signed by the Administrative Agent, has been designated as a Designated
Hedge Agreement so that credit exposure of the counterparty thereunder
with respect to the Borrower will be entitled to share in the benefits
of the grant of security interests by the Borrower set forth in Section
4.1 of this Agreement under Designated Hedge Agreements. The
Administrative Agent may, without the approval or consent of the
Lenders, designate a Hedge Agreement as a Designated Hedge Agreement if
the counterparty is a Lender or an Affiliate of a Lender and the
maximum credit exposure of such counterparty under such Hedge Agreement
to the applicable Borrower is reasonably determined by the
Administrative Agent, in accordance with its own customary valuation
practices, not to exceed $3,000,000; HOWEVER, if the counterparty is
not a Lender or an Affiliate of a Lender, or such maximum credit
exposure is so determined by the Administrative Agent to be greater
than $3,000,000, the Administrative Agent shall only designate the
Hedge Agreement involving such counterparty as a Designated Hedge
Agreement if the Administrative Agent is instructed to do so by the
Required Lenders. The Administrative Agent may impose as a condition to
any designation of a Designated Hedge Agreement a requirement that the
counterparty enter into an intercreditor or similar agreement with the
Administrative Agent under which recoveries from the Borrower with
respect to such Designated Hedge Agreement will be shared in a manner
consistent with the provisions of Section 10.5(d) of this Agreement.
"DESIGNATED HEDGE CREDITOR" means the counterparty to any
Hedge Agreement to which the Borrower is a party which has been
designated by the Administrative Agent in accordance with this
Agreement as a Designated Hedge Agreement.
"DESIGNATED HEDGE OBLIGATIONS" means the obligations of the
Borrower to the Designated Hedge Creditor under any Designated Hedge
Agreement.
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"DESIGNATED LETTER OF CREDIT ISSUER" means, with respect to
any Letter of Credit, the issuer of such Letter of Credit and shall be,
with respect to any Letter of Credit hereunder, NCB, or each other
Lender that is requested by the Administrative Agent with the approval
of the Borrower, and agrees to act as a Designated Letter of Credit
Issuer, and each of their successors and assigns (and which may be
replaced at the sole discretion of the Administrative Agent).
"DISCLOSURE SCHEDULE" means the schedule which is attached
hereto as Annex IV and is incorporated into this Agreement.
"DISTRIBUTION" means a payment made, liability incurred or
other consideration (other than any stock dividend or stock split
payable solely in capital stock of the Borrower) given by the Borrower
for the purchase, acquisition, redemption or retirement of any capital
stock (whether added to treasury or otherwise) of the Borrower or as a
dividend, return of capital or other distribution in respect of the
capital stock of the Borrower.
"DOCUMENT" means "document" as defined in the UCC.
"DOLLARS" and the sign "$" each means lawful money of the
United States.
"DOMESTIC SUBSIDIARY" means any Subsidiary of the Borrower or
any Subsidiary Guarantor organized under the laws of any state of the
United States of America or the District of Columbia.
"EFFECTIVE DATE" has the meaning specified in Section 15.4 of
this Agreement.
"ELIGIBLE ACCOUNTS" means the Accounts of the Borrower and the
Subsidiary Guarantors (other than Oly Steel Welding, Inc. and Olympic
Steel Receivables, L.L.C., from and after completion of the transfer of
its Accounts to the Borrower, Olympic Steel Minneapolis, Inc. and
Olympic Steel Lafayette, Inc. as required by Section 6.15 hereof) which
are comprised of a right to payment for goods sold or leased or for
services rendered (subject to any eligibility reserves established from
time to time by the Administrative Agent in the good faith exercise of
its Permitted Discretion as being reasonable in the circumstances) but,
by way of example and not limitation, excluding Accounts which:
(a) remain unpaid more than ninety (90) days after
the original date of invoice;
(b) have arisen from services performed by the
Borrower to or for the Account Debtor outside the
ordinary course of business;
(c) have arisen from the sale by the Borrower of
goods where such goods have not been shipped or
delivered to the Account Debtor;
(d) have arisen from transactions which are not
complete, are not bona fide, or require further acts
on the part of the Borrower to make such Account
payable by the Account Debtor;
(e) have arisen in connection with sales of goods
which were shipped or delivered to the Account Debtor
on other than an absolute sale basis, such as
shipments or deliveries made on consignment, a sale
or return
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basis, a guaranteed sale basis, a xxxx and hold
basis, or on the basis of any similar understanding;
(f) have arisen in connection with sales of goods
which were, at the time of sale thereof, subject to
any Lien, except the security interest in favor of
the Administrative Agent created by the Loan
Documents;
(g) are subject to any provision prohibiting
assignment or requiring notice of or consent to such
assignment;
(h) are subject to any Lien other than the Lien in
favor of the Administrative Agent;
(i) are subject to any asserted setoff, counterclaim,
defense, allowance, dispute, or adjustment to the
extent thereof, or have arisen in connection with the
sale of goods which have been returned, rejected,
repossessed, lost or damaged to the extent of such
return;
(j) are owed from an Account Debtor of which the
Borrower has received notice that such Account Debtor
is the subject of Financial Impairment or has
suspended normal business operations, dissolved,
liquidated or terminated its existence;
(k) are owed by any Account Debtor located in New
Jersey or Minnesota unless the Borrower has filed all
legally required Notice of Business Activities
Reports with the New Jersey Department of Taxation or
the Minnesota Department of Revenue, respectively;
(l) are Accounts with respect to which the Account
Debtor is located in any state which requires that
the Borrower, in order to xxx any Person in such
state's courts, either (i) qualify to do business in
such state or (ii) file a report with the taxation
division of such state for the then current year,
unless the Borrower has fulfilled such requirements
to the extent applicable for the then current year;
(m) are evidenced by Chattel Paper or any Instrument
of any kind (including, without limitation, any
promissory Revolving Credit Notes);
(n) are Accounts with respect to which any of the
representations, warranties, covenants and agreements
contained in this Agreement or any of the Loan
Documents are not or have ceased to be complete and
correct or have been breached;
(o) are Accounts with respect to which the
Administrative Agent does not have a first priority,
perfected security interest;
(p) represent a progress billing or have had the time
for payment extended by the Borrower without the
consent of the Administrative Agent (for the purposes
hereof, "progress billing" means any invoice for
goods sold or leased or services rendered under a
contract or agreement pursuant to which the Account
Debtor's obligation to pay such invoice is
conditioned upon the Borrower's completion of any
further performance under the contract or agreement);
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(q) are owed by a Person that is not a citizen of or
organized under the laws of the United States or any
State (inclusive of the Commonwealth of Puerto Rico
and the U.S. Virgin Islands) or are owed by any
Person located outside of the United States
(inclusive of the Commonwealth of Puerto Rico and the
U.S. Virgin Islands) unless (i) such Accounts are
owed by an Account Debtor located in Canada and the
Administrative Agent has a first priority lien
perfected to its satisfaction in such Accounts, or
(ii) payment of such Accounts is guaranteed by a
letter of credit in form and substance and issued by
a financial institution satisfactory to the
Administrative Agent, in its sole discretion, and
which has been transferred or assigned to the
Administrative Agent as security for the Secured
Obligations;
(r) are owed by the United States or any department,
agency, or instrumentality thereof unless the
Borrower has complied with the Federal Assignment of
Claims Act in respect of the Administrative Agent's
security interest therein as granted hereunder;
(s) are owed by any State or any department, agency,
or instrumentality thereof unless the Borrower has
complied with any applicable statutory or regulatory
requirements thereof in respect of the Administrative
Agent's security interest therein as granted
hereunder;
(t) are owed by an Affiliate of the Borrower or any
Subsidiary Guarantor (for purposes of this clause
(t), Accounts owing from Trumark Steel and Processing
LLC shall be treated as Eligible Accounts to the
extent otherwise constituting Eligible Accounts but
only up to an aggregate amount not to exceed
$100,000) ;
(u) are owed by an Account Debtor with respect to
which more than twenty-five percent (25%) of the
balances then outstanding on Accounts owed by such
Account Debtor and its Affiliates to the Borrower has
remained unpaid for more than ninety (90) days from
the dates of their original dates of invoice, as
applicable; or
(v) are, in the Administrative Agent's good faith
exercise of its Permitted Discretion, Accounts of an
Account Debtor which Account Debtor is deemed to be
an unacceptable credit risk or Accounts which are
otherwise deemed unacceptable or ineligible. The
Administrative Agent shall use reasonable efforts to
notify the Borrower of any such determination under
this clause (v), but shall not be liable for any
damages arising out of any failure to so notify the
Borrower.
"ELIGIBLE ASSIGNEE" means (i) a Lender or any Affiliate
thereof; (ii) a commercial bank having total assets in excess of
$1,000,000,000; (iii) a savings and loan association or savings bank
organized under the laws of the United States or any state thereof
having total assets in excess of $1,000,000,000; or (iv) a finance
company, insurance company, other financial institution or fund
acceptable to the Administrative Agent and the Borrower, which
acceptance shall not be unreasonably withheld; PROVIDED that each
Person described in each of the foregoing clauses (i) through (iv)
shall have provided to the Borrower and the Administrative Agent (A) if
such Person is organized under the laws of a jurisdiction outside the
United States, duly completed copies of Form 1001 or Form 4224 or any
successor form prescribed by the Internal Revenue Service of the United
States certifying that such Person is exempt from United States
withholding taxes
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with respect to all payments to be made to such Person if such Person
were to become a Lender hereunder or other documents satisfactory to
the Borrower and the Administrative Agent indicating that all payments
to be made to such Person if such Person were to become a Lender
hereunder are not subject to such taxes and, if any such forms or
other documents are so provided, such Person was eligible under
applicable law at the time such information was so provided to make
such provision and (B) for any other Person, an Exemption Certificate
(as defined in Section 14.3(e)).
"ELIGIBLE INVENTORY" means the Inventory of the Borrower and
the Subsidiary Guarantors (other than Oly Steel Welding, Inc., Olympic
Steel Receivables, L.L.C.) (subject to any eligibility reserves
established from time to time by the Administrative Agent in the good
faith exercise of its Permitted Discretion as being reasonable in the
circumstances) but, by way of example and not limitation, excluding
Inventory which:
(a) consists of damaged; defective, unmerchantable;
spoiled or unsalable items;
(b) consists of goods (i) not held for sale, such as
any labels, any maintenance items, any supplies and
packaging or (ii) any Inventory used in connection
with research and development;
(c) is subject to a Lien in favor of any party other
than the Administrative Agent;
(d) is not subject to a first priority, perfected
security interest in favor of the Administrative
Agent;
(e) is located at a location not owned by the
Borrower or a Subsidiary Guarantor, as the case may
be, or at a location owned by the Borrower or such
Subsidiary Guarantor with respect to which location a
Person other the Administrative Agent has a first
priority mortgage Lien thereon and for which the
Borrower has not delivered to the Administrative
Agent an appropriate landlord, warehouseman's or
mortgagee's waiver, in form, and substance
satisfactory to the Administrative Agent;
(f) is in the possession of a bailee or other third
Person (other than a consignee) including Inventory
held by a third party for processing or Inventory
purchased by but not yet delivered to the Borrower
and for which the Borrower has not delivered to the
Administrative Agent an appropriate bailee's waiver,
in form and substance satisfactory to the
Administrative Agent;
(g) is Inventory of the Borrower or any Subsidiary
Guarantor held by a third Person on consignment or is
held by or placed into the possession of a third
Person for sale or display by that Person UNLESS,
HOWEVER, with respect to consignments to Xxxxxxxxx
Xxxx Company and Xxxxxxxx Manufacturing, Inc. only,
the Borrower or the Subsidiary Guarantor, as the case
may be, can establish with respect to an item of
Inventory that: (x) all appropriate notices required
by the UCC have been given by the Borrower or the
applicable Subsidiary Guarantor to any secured
parties of such consignee having a blanket security
interest against the assets of the consignee or a
security interest in Inventory of the consignee prior
to delivery of such item of Inventory to such
consignee, (y) all appropriate financing statements
have been filed by the Borrower or the applicable
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Subsidiary Guarantor against such consignee prior to
such delivery of such item of Inventory to the
consignee and (z) consignee waivers, in form and
substance satisfactory to the Administrative Agent,
in favor of the Administrative Agent have been
executed by the consignee and delivered to the
Administrative Agent;
(h) is located outside of the United States; except,
that Inventory located in Canada shall not be
excluded from Eligible Inventory under this clause
(h) unless the Administrative Agent's security
interest therein for the benefit of the Lenders is
not able to be perfected by filing;
(i) is processed or purchased pursuant to any
contract with the United States government, any
agency or instrumentality thereof or prime contractor
thereof, which contract provides for progress or
advance payments to the extent such Inventory is
identified to such contract; or
(j) is, in the Administrative Agent's good faith
exercise of its Permitted Discretion, Inventory which
is otherwise deemed ineligible. The Administrative
Agent shall use reasonable efforts to notify the
Borrower of any such determination under this clause
(j), but shall not be liable for any damages arising
out of any failure to so notify the Borrower.
"ELIGIBLE M&E" means the operating Equipment of the Borrower
and the Subsidiary Guarantors (other than M&E of Olympic Steel
Minneapolis, Inc. located in Minnesota, M&E comprised of Special
Property, and M&E of the Borrower located in the Borrower's
Chambersburg, Pennsylvania, Winder, Georgia and Elk Grove, Illinois
facilities and the slitter located at Olympic Steel Iowa, Inc.'s
Bettendorf, Iowa facility), used in the process of manufacturing or
processing Inventory (unless considered as a real estate fixture), in
each case only if such M&E satisfies each of the following conditions:
(a) the Borrower or such Subsidiary Guarantor owns
fee title thereto; and
(b) the Administrative Agent has a perfected
first-priority lien in such Equipment for the benefit
of the Lenders; and
(e) such Equipment has been appraised by a third
party appraiser acceptable to the Administrative
Agent.
"ELIGIBLE REAL ESTATE" means the Real Estate listed on Annex
VII hereto of the Borrower and each of the Subsidiary Guarantors (other
than the Real Estate of Olympic Steel Minneapolis, Inc. located in
Minnesota and the Real Estate of the Borrower located in Winder,
Georgia and Chambersburg, Pennsylvania), in each case only if such Real
Estate satisfies each of the following conditions:
(a) the Borrower or such Subsidiary Guarantor owns
fee title thereto; and
(b) the Borrower has executed and delivered to the
Administrative Agent such mortgages and other
documents as the Administrative Agent may reasonably
request; and
(c) the Borrower shall have delivered to the
Administrative Agent title insurance, environmental
studies, and other real estate items, as reasonably
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required by, and satisfactory to, the Administrative
Agent, including, but not limited to, those items
required by the Financial Institutions Reform,
Recovery and Enforcement Act of 1989, as amended, and
the rules and regulations adopted pursuant thereto;
and
(d) the Administrative Agent has a perfected
first-priority lien in such properties for the
benefit of the Lenders; and
(e) each of such properties have been appraised by a
third party appraiser acceptable to the
Administrative Agent; and
(f) as to any particular property, as to which the
Borrower or Subsidiary Guarantor, as the case may be,
is in compliance with the representations, warranties
and covenants set forth in the mortgage relating to
such property, unless the Administrative Agent, in
its discretion, otherwise determines to waive this
requirement in the determination of Eligible Real
Estate.
"EMPLOYEE BENEFIT PLAN" means an "employee benefit plan" as
defined in Section 3(3) of ERISA of the Borrower or any of its ERISA
Affiliates or any "multiemployer plan" as defined in Section 4001(a)(3)
of ERISA or any "pension plan" as defined in Section 3(2) of ERISA or
any "welfare plan" as defined in Section 3(1) of ERISA.
"ENACTMENT STATE" means, from and after the effective date of
its enactment thereof, any state (or the District of Columbia) of the
United States that enacts Revised Article 9.
"ENTITLEMENT HOLDER" means and includes "entitlement holder"
as defined in the UCC.
"ENTITLEMENT ORDER" means and includes "entitlement order" as
defined in the UCC. "ENVIRONMENTAL CLAIMS" means any and all
administrative, regulatory or judicial actions, suits,
demands, demand letters, claims, complaints, liens, notices of
non-compliance, investigations, proceedings, consent orders or consent
agreements relating in any way to any Environmental Law or any
Environmental Permit, instituted by any Person, including, without
limitation, (a) by governmental or regulatory authorities for
enforcement, cleanup, removal, response, remedial or other actions or
damages pursuant to any applicable Environmental Law or (b) by any
third party seeking damages, contribution, indemnification, cost
recovery, compensation or injunctive relief resulting from Hazardous
Materials or arising from alleged injury or threat of injury to health
or the environment.
"ENVIRONMENTAL LAWS" means any federal, state or local law,
regulation, ordinance, or order pertaining to the protection of the
environment and the health and safety of the public, including (but
not limited to) CERCLA, RCRA, the Hazardous Materials Transportation
Act, 49 USC Section Section 1801 et seq., the Federal Water Pollution
Control Act (33 USC Section Section 1251 et seq.), the Toxic
Substances Control Act (15 USC Section Section 2601 et seq.) and the
Occupational Safety and Health Act (29 USC Section Section 651 et
seq.), and all similar state, regional or local laws, treaties,
regulations, statutes or ordinances, common law, civil laws, or any
case precedents, rulings, requirements, directives or
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requests having the force of law of any foreign or domestic
governmental authority, agency or tribunal, and all foreign equivalents
thereof, as the same have been or hereafter may be amended, and any and
all analogous future laws, treaties, regulations, statutes or
ordinances, common law, civil laws, or any case precedents, rulings,
requirements, directives or requests having the force of law of any
foreign or domestic governmental authority, agency and which govern:
(a) the existence, cleanup and/or remedy of contamination on property;
(b) the emission or discharge of Hazardous Materials into the
environment; (c) the control of hazardous wastes; (d) the use,
generation, transport, treatment, storage, disposal, removal or
recovery of Hazardous Materials; or (e) the maintenance and development
of wetlands.
"ENVIRONMENTAL PERMITS" means all permits, approvals,
certificates, notifications, identification numbers, licenses and other
authorizations required under any applicable Environmental Laws or
necessary for the conduct of business.
"ENVIRONMENTAL REMEDIATION" means any curative measure taken
in respect of any non-compliance with, or otherwise related to, any
Environmental Law.
"EQUIPMENT" means "equipment" as defined in the UCC.
"ERISA" means the Employee Retirement Income Security Act of
1974 (Public Law 93-406), as amended, and in the event of any amendment
affecting any section thereof referred to in this Agreement, that
reference shall be a reference to that section as amended,
supplemented, replaced or otherwise modified.
"ERISA AFFILIATE" means, with respect to any Person, any other
Person that is under common control with such Person within the meaning
of Section 4001(a)(14) of ERISA, or is a member of a group which
includes such Person and which is treated as a single employer under
Sections 414(b) or (c) of the Internal Revenue Code. In addition, for
provisions of this Agreement that relate to Section 412 of the Internal
Revenue Code, the term "ERISA Affiliate" of any Person shall mean any
other Person aggregated with such Person under Sections 414(b), (c),
(m) or (o) of the Internal Revenue Code.
"ERISA REGULATOR" means any governmental agency (such as the
Department of Labor, the Internal Revenue Service and the Pension
Benefit Guaranty Corporation) having any regulatory authority over any
Employee Benefit Plan.
"EUROCURRENCY LIABILITIES" has the meaning assigned to that
term in Regulation D of the Board of Governors of the Federal Reserve
System, as in effect from time to time.
"EUROCURRENCY RESERVE PERCENTAGE" means, for any Interest
Period in respect of any LIBOR Rate Loan, as of any date of
determination, the aggregate of the then stated maximum reserve
percentages (including any marginal, special, emergency or supplemental
reserves), expressed as a decimal, applicable to such Interest Period
(if more than one such percentage is applicable, the daily average of
such percentages for those days in such Interest Period during which
any such percentages shall be so applicable) by the Board of Governors
of the Federal Reserve System, any successor thereto, or any other
banking authority, domestic or foreign, to which the Administrative
Agent or any Lender may be subject in respect to eurocurrency funding
(currently referred to as "Eurocurrency Liabilities" in Regulation D of
the Federal Reserve Board) or in respect of any other category of
liabilities including deposits by reference to which the interest rate
on LIBOR Rate Loans is determined or any category of extension of
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credit or other assets that include the LIBOR Rate Loans. For purposes
hereof, such reserve requirements shall include, without limitation,
those imposed under Regulation D of the Federal Reserve Board and the
LIBOR Rate Loans shall be deemed to constitute Eurocurrency Liabilities
subject to such reserve requirements without benefit of credits for
proration, exceptions or offsets which may be available from time to
time to any Lender under said Regulation D.
"EVENT OF DEFAULT" has the meaning specified in Section 9 of
this Agreement.
"EXCESS AVAILABILITY" means, as of any date of determination,
the excess, if any, of the (x) lesser of (A) an amount equal to the
Borrowing Base of the Borrower at such time or (B) the aggregate amount
of the Lenders' Revolving Credit Commitments in effect at such time
OVER (y) the sum of the aggregate amount of Revolving Credit Loans of
the Lenders outstanding at such time PLUS the aggregate LC Exposure of
the Lenders at such time.
"EXCLUDED PROPERTY" means Special Property other than the
following:
(a) the right to receive any payment of money
(including, without limitation, general intangibles for money
due or to become due); and
(b) any proceeds, products, offspring, accessions,
rents, profits, income, benefits, substitutions or
replacements of any Special Property (unless such proceeds,
products, offspring, accessions, rents, profits, income,
benefits, substitutions or replacements itself would
constitute Special Property).
"EXISTING ARTICLE 9" means, with respect to the UCC as in
effect in any state (or the District of Columbia) of the United States,
Article 9 of the UCC as in effect in such jurisdiction from time to
time prior to the date of enactment by such state of Revised Article 9.
"EXISTING BANK INDEBTEDNESS" means that the Indebtedness of
the Borrower pursuant to and under that certain Credit Agreement, dated
as of October 4, 1996, by and among the Borrower, certain financial
institution named therein, National City Bank as Agent and Issuing
Bank, as amended from time to time.
"EXISTING TARN INDEBTEDNESS" means the reimbursement
obligations or related payment obligations of the Borrower to Fifth
Third Bank with respect to the Borrowers Milford, Connecticut, Elk
Grove, Illinois, Plymouth, Minnesota and Bedford, Ohio plant
facilities.
"EXISTING LETTERS OF CREDIT" means letters of credit
outstanding on the Closing Date which will continue to be outstanding
after the Closing Date and which pursuant to the terms hereof will be
deemed to be "Letters of Credit" hereunder and for all purposes hereof
pursuant to Section 2.11(c)of this Agreement.
"FAIR MARKET VALUE" means, as to any Eligible Real Estate, the
most probable price that such Eligible Real Estate should bring in a
competitive and open market under all conditions requisite to a fair
sale, the buyer and seller each acting prudently and knowledgeably, and
assuming the price is not affected by undue stimulus and wherein the
buyer and seller are typically motivated, both parties are well
informed and a reasonable time of between 12 and 18 months is allowed
for exposure in the open market.
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"FEDERAL FUNDS EFFECTIVE RATE" means, for any day, the rate
per annum (rounded upwards, if necessary, to the nearest one hundredth
of one percent (1/100th of 1%) equal to the weighted average of the
rates on overnight Federal funds transactions with members of the
Federal Reserve System arranged by Federal funds brokers on such day,
as published by the Federal Reserve Bank of New York on the Business
Day next succeeding such day; PROVIDED, HOWEVER, that: (a) if the day
for which such rate is to be determined is not a Business Day, the
Federal Funds Rate for such day shall be such a rate on such
transactions on the immediately preceding Business Day as so published
on the next succeeding Business Day and (b) if such rate is not so
published for any Business Day, the Federal Funds Rate for such
Business Day shall be the average of quotations for such day on such
transactions received by the Administrative Agent from three Federal
funds brokers of recognized standing selected by the Administrative
Agent.
"FEE PERCENTAGE ADJUSTMENT DATE" has the meaning specified in
Section 2.13(d) of this Agreement.
"FINANCIAL ASSET" means and includes "financial asset" as
defined in the UCC.
"FINANCIAL IMPAIRMENT" means, in respect of a Person, the
distressed economic condition of such Person manifested by any one or
more of the following events:
(a) the discontinuation of the business of the
Person;
(b) the Person generally ceases or is generally
unable or admits in writing its inability, generally, to make
timely payment upon the Person's debts, obligations, or
liabilities as they mature or come due;
(c) the assignment by the Person for the benefit of
creditors;
(d) the voluntary institution by the Person of, or
the consent granted by the Person to the involuntary
institution of (whether by petition, complaint, application,
default, answer (including, without limitation, an answer or
any other permissible or required responsive pleading
admitting: (i) the jurisdiction of the forum or (ii) any
material allegations of the petition, complaint, application,
or other writing to which such answer serves as a responsive
pleading thereto), or otherwise) of any bankruptcy,
insolvency, reorganization, arrangement, readjustment of debt,
dissolution, liquidation, receivership, trusteeship, or
similar proceeding pursuant to or purporting to be pursuant to
any bankruptcy, insolvency, reorganization, arrangement,
readjustment of debt, dissolution, liquidation, receivership,
trusteeship, or similar law of any jurisdiction;
(e) the voluntary application by the Person for or
consent granted by the Person to the involuntary appointment
of any receiver, trustee, or similar officer (i) for the
Person or (ii) of or for all or any substantial part of the
Person's property; or
(f) the commencement or filing against a Person,
without such Person's application, approval or consent, of an
involuntary proceeding or an involuntary petition seeking: (a)
liquidation, reorganization or other relief in respect of such
Person, its debts or all or a substantial part of its assets
under any Federal, state or foreign bankruptcy, insolvency,
receivership, or similar law now or hereafter in effect or (b)
the appointment of a receiver, trustee, custodian,
sequestrator, conservator or similar official for such Person
or for a substantial
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part of its assets, and, in any such case, either (i) such
proceeding or petition shall continue undismissed for sixty
(60) days or (ii) an order or decree approving or ordering any
of the foregoing shall be entered; or
(g) in the case of a Person which is an Account
obligor, any judgment, writ, warrant of attachment, execution,
or similar process is issued or levied against all or any
substantial part of such Person's property and such judgment,
writ, warrant of attachment, execution, or similar process is
not released, vacated, or fully bonded within thirty (30) days
after it is issued, levied or rendered.
"FINANCIAL PROJECTIONS" has the meaning specified in Section
7.13(b) of this Agreement.
"FISCAL MONTH" means any of the twelve consecutive monthly
fiscal accounting periods collectively forming a Fiscal Year of the
Borrower.
"FISCAL QUARTER" means any of the four consecutive three-month
fiscal accounting periods collectively forming a Fiscal Year of the
Borrower.
"FISCAL YEAR" means the Borrower's regular annual accounting
period for federal income tax purposes ending December 31.
"FIXED ASSET COMPONENT" has the meaning specified in the
definition "Borrowing Base" set forth in this Agreement.
FIXED ASSET COMPONENT LOANS" means that portion of the
Revolving Credit Loans made available by reason of the Fixed Asset
Component of the Borrowing Base.
"FORCED LIQUIDATION VALUE" means, as to any Eligible M&E, the
estimated most probable price of such Eligible M&E typically realized
at a properly advertised and conducted public auction sale held under
forced sale conditions with all such assets being sold on a piecemeal
basis "as is, where is" and with the purchaser being responsible for
removal of the asset.
"GAAP" means generally accepted accounting principles
consistent with those applied in the preparation of the financial
statements referred to in Section 8.1 of this Agreement and otherwise
consistently applied.
"GENERAL INTANGIBLE" means "general intangible" as defined in
the UCC.
"GUARANTEED OBLIGATIONS" has the meaning specified in Section
11.1 of this Agreement.
"GUARANTOR" means a Person who pledges his credit or property
in any manner for the payment or other performance of Indebtedness,
agreements or other obligation of another Person including, without
limitation, any guarantor (whether of collection or payment), any
obligor in respect of a standby letter of credit or surety bond issued
for the account of another Person, any surety, any co-maker, any
endorser, and any Person who agrees conditionally or otherwise to make
any loan, purchase or investment in order thereby to enable another
Person to prevent or correct a default of any kind.
"GUARANTY" means the obligation of a Guarantor.
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"GUARANTY OBLIGATIONS" means, with respect to any Person,
without duplication, any obligation of such Person guaranteeing any
Indebtedness (`primary Indebtedness") of any other Person (the `primary
obligor') in any manner, whether directly or indirectly, including,
without limitation, any obligation of such Person, whether contingent
or not contingent, (a) to purchase any such primary Indebtedness or any
property constituting direct or indirect security therefor, (b) to
advance or supply funds (i) for the purchase or payment of any such
primary Indebtedness or (ii) to maintain working capital or equity
capital of the primary obligor or otherwise maintain the net worth or
solvency of the primary obligor, (c) to purchase property, securities
or services primarily for the purpose of assuring the owner of any such
primary Indebtedness of the ability of the primary obligor to make
payment of such primary Indebtedness, or (d) otherwise to assure or
hold harmless the owner of such primary Indebtedness against loss in
respect thereof; PROVIDED, HOWEVER, that the term "Guaranty
Obligations" shall not include endorsements of instruments for deposit
or collection in the ordinary course of business. The amount of any
Guaranty Obligation shall be deemed to be an amount equal to the stated
or determinable amount of the primary Indebtedness in respect of which
such Guaranty Obligation is made or, if not stated or determinable, the
maximum reasonably anticipated liability in respect thereof (assuming
such Person is required to perform thereunder) as determined by such
Person in good faith.
"HAZARDOUS MATERIAL" means and includes: (a) any asbestos or
other material composed of or containing asbestos which is, or may
become, even if properly managed, friable, (b) petroleum and any
petroleum product, including crude oil or any fraction thereof, and
natural gas or synthetic natural gas liquids or mixtures thereof, (c)
any hazardous, toxic or dangerous waste, substance or material defined
as such in (or for purposes of) CERCLA or RCRA, any so-called
"Superfund" or "Superlien" law, or any other applicable Environmental
Laws, and (d) any other substance whose generation, handling,
transportation, treatment or disposal is regulated pursuant to any
Environmental Laws.
"HEDGE AGREEMENT" means any interest rate swap agreement, any
interest rate cap agreement, any interest rate collar agreement, or
similar agreement or arrangement designed to protect against
fluctuations in interest rates.
"INDEBTEDNESS" means, with respect to any Person, without
duplication, (a) Indebtedness for Borrowed Money, (b) obligations to
pay the deferred purchase price of property or services, (c)
obligations as lessee under leases which shall have been or should be,
in accordance with GAAP, recorded as capital leases, (d) all
obligations of such Person as an account party in respect of letters of
credit or banker's acceptances, (e) liabilities in respect of unfunded
vested benefits under plans covered by Title IV of ERISA, (f)
obligations secured by any Lien on the properties or assets of the
Person, (g) obligations of such Person in respect of currency or
interest rate swap or comparable transactions and (h) obligations under
direct or indirect Guaranties in respect of, and obligations
(contingent or otherwise) to purchase or otherwise acquire, or
otherwise to assure a creditor against loss in respect of, indebtedness
or obligations of others of the kinds referred to in clauses (a)
through (g) above.
"INDEBTEDNESS FOR BORROWED MONEY" means, with respect to any
Person, without duplication, all obligations of such Person for money
borrowed including, without limitation, all Capitalized Leases,
Revolving Credit Notes payable, drafts accepted representing extensions
of credit, obligations evidenced by bonds, debentures, Revolving Credit
Notes or other similar instruments, and obligations upon which interest
charges are customarily paid or discounted, and all Guaranties of such
obligations.
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"INSTRUMENT" means "instrument" as defined in the UCC.
"INTELLECTUAL PROPERTY" means all inventions, designs,
patents, and applications therefor, trademarks, service marks, trade
names, and registrations and applications therefor, copyrights, any
registrations therefor, and any licenses thereof, whether now owned or
existing or hereafter arising or acquired.
"INTERCOMPANY LOANS" means loans by the Borrower to the
Subsidiary Guarantors permitted pursuant to Section 8.3(b) of this
Agreement.
"INTERCOMPANY PAYMENTS" means, with respect to a Subsidiary
Guarantor, all amounts transferred by such Subsidiary Guarantor
pursuant to Section 5.4 hereof to the Borrower whether constituting
repayment of Intercompany Loans by the Borrower to such Subsidiary
Guarantor, payment in connection with the Subsidiary Guaranty of such
Subsidiary Guarantor or payment of consolidated tax liabilities
attributable to the income of such Subsidiary Guarantor.
"INTEREST PERIOD" means, for each LIBOR Rate Loan comprising a
Borrowing, the period commencing on the date of such LIBOR Rate Loan or
the date of the Rate Conversion or Rate Continuation of any Loans into
such LIBOR Rate Loan and ending on the numerically corresponding day of
the period selected by the Borrower pursuant to the provisions hereof
and each subsequent period commencing on the last day of the
immediately preceding Interest Period in respect of such LIBOR Rate
Loans and ending on the last day of the period selected by the Borrower
pursuant to the provisions hereof; PROVIDED, HOWEVER, that the duration
of each such Interest Period shall be one, two or three, in each case
as the Borrower may select by delivery to the Administrative Agent of a
Credit Request therefor in accordance with Section 2.3(a) of this
Agreement or a Rate Conversion\Continuation Request in accordance with
Section 2.10 of this Agreement and; PROVIDED, FURTHER, that, during the
Syndication Period, if the Borrower selects Interest Periods of greater
than one month, the Borrower shall be obligated to reimburse the
Lenders pursuant to Section 14.4 hereof for any prepayment of LIBOR
Rate Loans made on other than the last day of such Interest Periods
resulting from completion of the Syndication Period hereunder and;
PROVIDED, FURTHER, that:
(i) the Interest Period for each LIBOR Rate Loan
comprising part of the same Borrowing shall be of the
same duration;
(ii) whenever the last day of any Interest Period would
otherwise occur on a day other than a Business Day,
the last day of such Interest Period shall be
extended to occur on the next succeeding Business
Day; PROVIDED, HOWEVER, that, if such extension would
cause the last day of such Interest Period to occur
in the next following calendar month, the last day of
such Interest Period shall occur on the immediately
preceding Business Day;
(iii) if the Interest Period commences on a Business Day
for which there is no numerical equivalent in the
calendar month in which the Interest Period is to
end, such Interest Period shall end on the last
Business Day of that calendar month; and
(iv) with respect to LIBOR Rate Loans comprising any
Revolving Credit Borrowing, no Interest Period may
end on a date later than the Revolving Credit
Termination Date.
"INVENTORY" means "inventory" as defined in the UCC.
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"INVENTORY CERTIFICATE" has the meaning specified in Section
8.1(d)(iii) of this Agreement.
"INVESTMENT PROPERTY" means a Security, whether Certificated
or Uncertificated, Security Entitlement, Securities Account, Commodity
Contract, or Commodity Account.
"ISSUER" means and includes "issuer" as defined in the UCC.
"LAW" means any law, treaty, regulation, statute or ordinance,
common law, civil law, or any case precedent, ruling, requirement,
directive or request having the force of law of any foreign or domestic
governmental authority, agency or tribunal.
"LC EXPOSURE" means, with respect to any Revolving Credit
Lender, at any time of determination, such Lender's Ratable Portion of
the sum of: (a) the aggregate undrawn amount of all Letters of Credit
outstanding at such time, PLUS (b) the aggregate amount that has been
drawn under such Letters of Credit for which the Designated Letter of
Credit Issuer (or the Revolving Credit Lenders, pursuant to any
participation therein), has not at such time been reimbursed by the
Borrower or, in the case of a Letter of Credit Obligor which is not the
Borrower, the applicable Letter of Credit Obligor.
"LEAD ARRANGER" has the meaning set forth in Section 12.2 of
this Agreement.
"LEASE" means and includes "lease" as defined in the UCC.
"LENDER DEFAULT" means (i) the refusal (which has not been
retracted) of a Lender in violation of its obligations under this
Agreement to make available to the Administrative Agent its Ratable
Portion of any Revolving Credit Borrowing or Term Borrower hereunder or
to fund any portion of the participation purchase price payable by such
Lender for its participating interests hereunder or (ii) the
notification to the Administrative Agent or the Borrower by a Lender
that such Lender does not intend to comply with its obligations
hereunder to make available to the Administrative Agent its Ratable
Portion of any Revolving Credit Borrowing or Term B Borrowing hereunder
or to fund any portion of the participation purchase price payable by
such Lender for its participating interests hereunder.
"LENDERS" means the financial institutions listed on the
signature pages hereof as "Revolving Credit Lenders" or "Term B
Lenders" and the successors thereto and assignees thereof.
"LENDING OFFICE" means, with respect to any Lender or
Designated Letter of Credit Issuer, the office of such Lender or
Designated Letter of Credit Issuer specified as its "Lending Office"
under its name on the signature pages hereto, or such other office of
such Lender or Designated Letter of Credit Issuer as such Lender or
Designated Letter of Credit Issuer may from time to time specify in
writing to the Borrower and the Administrative Agent as the office at
which Revolving Credit Loans or Letters of Credit are to be made,
issued and maintained, as the case may be.
"LESSOR" means and includes "lessor" as defined in the UCC.
"LETTER OF CREDIT" means each (i) commercial documentary
letter of credit issued in connection with the purchase of goods in the
ordinary course of business thereof and consistent with past practices
thereof and (ii) each documentary standby letter of credit for the
account of the Borrower or any of its Subsidiaries issued by the
Designated Letter
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of Credit Issuer, in each case in support or guarantee of (x) worker
compensation obligations, liability insurance, releases of contract
retention obligations, contract tender or bid performance obligations,
obligations for repayment of advance payments, contract performance
obligations, and other bonding obligations of the Borrower or such
Subsidiaries incurred in the ordinary course of business thereof and
consistent with past practices thereof and (y) such other standby
obligations of the Borrower and such Subsidiaries incurred in the
ordinary course of business thereof and consistent with past practices
thereof: PROVIDED, HOWEVER, that in no case may the Borrower or any
Subsidiary thereof request or have issued for its account any standby
Letter of Credit to secure or otherwise support any Indebtedness for
Borrowed Money of the Borrower or any Subsidiary thereof, or any
Affiliates thereof, existing as of the Effective Date (other than
Indebtedness supported by the Existing Letters of Credit) or any
Guaranties of the Borrower or such Subsidiaries existing as of or after
the Effective Date even to the extent such Indebtedness or Guaranties
are otherwise permitted hereunder.
"LETTER OF CREDIT COLLATERAL ACCOUNT" has the meaning set
forth in Section 10.8 hereof.
"LETTER OF CREDIT OBLIGATIONS" means (a) the obligations of
the Borrower to reimburse any Designated Letter of Credit Issuer
hereunder, (b) all fees owing by the Borrower to any Designated Letter
of Credit Issuer under this Agreement and the other Loan Documents, (c)
any costs and expenses reimbursable by the Borrower to a Designated
Letter of Credit Issuer pursuant to Section 15.5 of this Agreement, (d)
taxes, Other Taxes, compensation, indemnification obligations or other
amounts owing by the Borrower to a Designated Letter of Credit Issuer
under this Agreement, the reimbursement agreement executed in favor of
a Designated Letter of Credit Issuer or any other Loan Document, and
(e) any amounts owing by the Borrower as a guarantor of the
reimbursement obligations of Letter of Credit Obligors under Section
2.11(l).
"LETTER OF CREDIT OBLIGORS" has the meaning specified in
Section 2.11 of this Agreement.
"LETTER OF CREDIT REQUEST" means a request for the issuance of
a Letter of Credit made in accordance with Section 2.11(b) hereof, in
the form attached hereto as EXHIBIT B and incorporated herein by
reference.
. "LIBOR RATE LOAN" means a Loan, denominated in Dollars, which bears
interest as provided in Section 2.12(a)(ii) of this Agreement.
"LIBOR RATE BORROWING" means a Borrowing consisting of LIBOR
Rate Loans.
"LIEN" means any lien, security interest or other charge or
encumbrance of any kind, or any other type of preferential arrangement,
including, without limitation, the lien or retained security title of a
conditional vendor and any easement, right of way or other encumbrance
on title to real property.
"LLC" means each limited liability company in which the
Borrower or a Subsidiary Guarantor has an interest, including those set
forth on the Disclosure Schedule.
"LLC AGREEMENT" means each operating agreement governing an
LLC, as each such agreement has heretofore been and may hereafter be
amended, restated, supplemented or otherwise modified.
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"LOAN" means a Revolving Credit Loan or a Term B Loan.
"LOAN ACCOUNT" has the meaning set forth in Section 2.1(c).
"LOAN DOCUMENTS" means this Agreement, any note, mortgage,
deed of trust, security agreement, or other lien instrument,
reimbursement agreement, financial statement, audit report,
environmental audit, notice, request of Loan, Hedge Agreement, cash
management agreement, officer's certificate or other writing of any
kind which is now or hereafter required to be delivered by or on behalf
of the Borrower to the Administrative Agent, the Designated Letter of
Credit Issuer or the Lenders (or any of their respective Affiliates) in
connection with this Agreement, including, without limitation, the
Revolving Credit Notes and the Term B Notes and the other writings
referred to in Section 2 and Section 3 of this Agreement.
"LOCKBOX" has a post office box rented by and in the name of
the Borrower or a Subsidiary Guarantor as required by Section 5.1(a) of
this Agreement and as to which only the Lockbox Bank and the
Administrative Agent has access pursuant to the requirements of Section
5.1(a) of this Agreement.
"LOCK BOX BANK" means such Lenders or such other financial
institutions that are reasonably acceptable to the Administrative Agent
as set forth in the Disclosure Schedule hereto.
"LONDON INTERBANK OFFERED RATE" means, for any Interest Period
with respect to a LIBOR Rate Borrowing, the quotient (rounded upwards,
if necessary, to the nearest one sixteenth of one percent (1/16th of
1%) of: (x) the per annum rate of interest, determined by the
Administrative Agent in accordance with its usual procedures (which
determination shall be conclusive absent manifest error) as of
approximately 11:00 a.m. (London time) two Business Days prior to the
beginning of such Interest Period pertaining to such LIBOR Rate Loan,
appearing on page 3750 of the Dow Xxxxx Telerate Screen (or any
successor or substitute page of such Service, or any successor to or
substitute for such Service providing rate quotations comparable to
those currently provided on such page of such Service, as determined by
the Administrative Agent from time to time for purposes of providing
quotations of interest rates applicable to deposits in Dollars or in
the London interbank market) as the rate in the London interbank market
for deposits in Dollars in immediately available funds with a maturity
comparable to such Interest Period DIVIDED BY (y) a number equal to
1.00 MINUS the Eurocurrency Reserve Percentage. In the event that such
rate quotation is not available for any reason, then the rate (for
purposes of clause (x) hereof) shall be the rate, determined by the
Administrative Agent as of approximately 11:00 a.m. (London time) two
Business Days prior to the beginning of such Interest Period pertaining
to such LIBOR Rate Loan, to be the average (rounded upwards, if
necessary, to the nearest one sixteenth of one percent (1/16th of 1%))
of the per annum rates at which deposits in Dollars in immediately
available funds in an amount comparable to NCB's Ratable Portion of
such LIBOR Borrowing and with a maturity comparable to such Interest
Period are offered to the prime banks by leading banks in the London
interbank market. The London Interbank Offered Rate shall be adjusted
automatically on and as of the effective date of any change in the
Eurocurrency Reserve Percentage.
"M&E" means, with respect to a Person, the operating Equipment
of such Person used in the process of manufacturing or processing
Inventory (unless constituting a real estate fixture).
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"MARGIN ADJUSTMENT DATE" has the meaning specified in Section
2.12(b) of this Agreement.
"MATERIAL ADVERSE EFFECT" means a material adverse effect on:
(a) the business, properties, operations or condition (financial or
otherwise) of the Borrower and the Subsidiary Guarantors, taken as a
whole, (b) a material portion of the Collateral, (c) the Borrower's
ability to repay the Secured Obligations, (d) the Administrative
Agent's security interest and lien on any of the Collateral or the
priority thereof, or (e) the legality, validity or enforceability of
this Agreement, the other Loan Documents or any Lien created hereby or
thereby.
"MATERIAL BUSINESS AGREEMENT" means each agreement of the
Borrower (not including Material License Agreements) the termination of
which could reasonably be expected to result in a Material Adverse
Effect.
"MATERIAL LICENSE AGREEMENT" means each license agreement of
the Borrower or any Subsidiary Guarantor in respect of Third Party
Intellectual Property set forth on the Disclosure Schedule as being a
license agreement the termination of which could reasonably be expected
to result in a Material Adverse Effect.
"MATERIAL RECOVERY EVENT" means (i) any casualty loss in
respect of assets of the Borrower or any Subsidiary Guarantor covered
by casualty insurance, (ii) any compulsory transfer or taking under
threat of compulsory transfer of any asset of the Borrower or such
Subsidiary Guarantor by any agency, department, authority, commission,
board, instrumentality or political subdivision of the United States,
any state or municipal government and (iii) any recovery in good funds
by the Borrower or such Subsidiary Guarantor by reason of a
nonappealable judgment against any other Person in excess of $100,000
to the full extent thereof.
"MATERIAL SUBSIDIARY" means, at any time, with reference to
any Person, any Subsidiary of such Person (x) that has assets at such
time comprising 5% or more of the consolidated assets of such Person
and its Subsidiaries (the consolidated assets of such Person also being
determined on a consolidated basis with the assets any other Person
with respect to which such Person is a Subsidiary) or (y) whose
operations in the current fiscal year are expected to, or whose
operations in the most recent fiscal year did (or would have if such
Person had been a Subsidiary for such entire fiscal year), represent 5%
or more of the consolidated earnings before interest, taxes,
depreciation and amortization of such Person and its Subsidiaries
(determined on a consolidated basis with any other Person with respect
to which such Person is a Subsidiary) for such fiscal year.
"MAXIMUM LAWFUL RATE" has the meaning specified in Section
15.9 of this Agreement.
"MULTIEMPLOYER PLAN" means any Employee Benefit Plan which is
a "multiemployer plan" as such term is defined in section 4001(a)(3) of
ERISA.
"NCB" means National City Bank, a national banking
association.
"NCCF" means National City Commercial Finance, Inc., an Ohio
corporation.
"NOTICE OFFICE" means (i) with respect to the Administrative
Agent, such office of the Administrative Agent specified as its "Notice
Office" under its name on the signature pages hereto, or such other
office, located in a city in the United States Eastern Time Zone, as
the Administrative Agent may from time to time specify in writing to
the
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Borrower, the Lenders and the Designated Letters of Credit Issuer as
the office to which notices to the Administrative Agent are to be given
by the Borrower, the Lenders and the Designated Letters of Credit
Issuer, as the case may be, and (ii) with respect to each Lender and
each Designated Letter of Credit Issuer, such office thereof specified
as its "Notice Office" under its name on the signature pages hereto, or
such other office as such Lender or Designated Letter of Credit Issuer
may from time to time specify in writing to the Borrower, the
Administrative Agent, the other Lenders and the Designated Letters of
Credit Issuer as the office to which notices thereto are to be given by
the Borrower, the Lenders the Designated Letters of Credit Issuer, as
the case may be.
"NOTES" means the Revolving Credit Notes and the Term B Notes.
"OBLIGATED LENDER" has the meaning specified in Section 2.7 of
this Agreement.
"OBLIGATIONS" means the present and future obligations of each
of the Borrower to the Lenders under this Agreement or any other Loan
Document including without limitation (a) the outstanding principal and
accrued interest (including interest accruing after a petition for
relief under the federal bankruptcy laws has been filed) in respect of
any Revolving Credit Loans and Term B Loans advanced to the Borrower by
the Lenders PLUS the outstanding LC Exposure of the Lenders and the
obligation of the Borrower to repay the Lenders for Loans thereby in
connection with the LC Exposure, (b) all fees owing to the Lenders or
the Administrative Agent under this Agreement and the other Loan
Documents, (c) any amounts owing by the Borrower as the Subsidiary
Guarantor with respect to its guaranty of the Guaranteed Obligations
owing by the Borrower to the Lenders or as a guarantor of the
obligations of other Letter of Credit Obligors under Section 2.11(l)
hereof, (d) any costs and expenses reimbursable to the Lenders or the
Administrative Agent pursuant to Section 15.5 of this Agreement; and
(e) Taxes, Other Taxes, compensation, indemnification obligations or
other amounts owing by the Borrower to the Administrative Agent or the
Lenders under this Agreement, the Revolving Credit Notes or any Loan
Document.
"OPERATING ACCOUNT" means, with respect to the Borrower, the
account described in the Disclosure Schedule and maintained by and in
the name of the Borrower with NCB for the purposes of disbursing the
proceeds of Revolving Credit Loans, which account shall in no case be a
payroll account.
"OTHER TAXES" has the meaning specified in Section 14.3(c) of
this Agreement.
"PARTNERSHIP" means each partnership in which the Borrower or
a Subsidiary Guarantor has an interest, including those set forth on
the Disclosure Schedule.
"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.
"PAYMENT OFFICE" means, with respect to the Administrative
Agent, such office of the Administrative Agent specified as its
"payment office" under its name on the signature pages hereto, or such
other office as the Administrative Agent may from time to time specify
in writing to the Borrower and the Lenders as the office to which
payments are to be made by the Borrower or funds are to be made
accessible to the Administrative Agent by the Lenders, as the case may
be.
"PBGC" means the Pension Benefit Guaranty Corporation or any
other governmental authority succeeding to any of its functions.
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"PERMITTED ACCOUNT" has the meaning specified in Section 6.7
of this Agreement but expressly excludes any Blocked Account or any
other Deposit Account into which Collections are received which is
required to be a Blocked Account hereunder.
"PERMITTED DISCRETION" means the good faith judgment or
exercise of discretion by the Administrative Agent to the extent based
upon (and to the extent exercised in proportion to the Administrative
Agent's good faith determination of the potential effect of), any
factor or circumstance which the Administrative Agent believes in good
faith (the burden of establishing lack of good faith being on the
Borrower): (a) will or could reasonably be expected to adversely affect
the value of any Collateral, the enforceability or priority of the
Administrative Agent's Liens thereon in favor of the Lenders or the
amount which the Administrative Agent and the Lenders would be likely
to receive (after giving consideration to delays in payment and costs
of enforcement) in the liquidation of such Collateral; (b) may
demonstrate that any collateral report or financial information
delivered to the Administrative Agent by any Person on behalf of the
Borrower is incomplete, inaccurate or misleading in any material
respect; (c) could reasonably be expected to increase materially the
likelihood of a bankruptcy, reorganization or other insolvency
proceeding involving the Borrower or any of the Collateral; or (d)
creates or could reasonably be expected to create a Potential Default
or Event of Default. In exercising such judgment, the Administrative
Agent may consider such factors or circumstances already included in or
tested by the definition of "Eligible Accounts" or "Eligible
Inventory", as well as any of the following: (i) the financial and
business condition of the Borrower, (ii) changes in collection history
and dilution with respect to the Accounts, (iii) material changes in
demand for, and changes in pricing of, Inventory, (iv) changes material
to any concentration of risk with respect to Accounts or Inventory, (v)
any other factors or circumstances that will or could reasonably be
expected to have a Material Adverse Effect, (vi) history of
charge-backs or other credit adjustments, and (vii) any other factors
that change or could reasonably be expected to materially change the
credit risk of lending to any of the Borrower on the security of the
Accounts or the Inventory:
"PERMITTED SPECIAL ADVANCES" means Revolving Credit Loans made
by the Administrative Agent on behalf of the Lenders pursuant to
Section 2.4(d) hereof and which are advanced in one or more of the
following circumstances: (i) such Loans are advanced after the
occurrence and during the continuance of a Potential Default or after
the occurrence of an Event of Default (including an Event of Default
resulting from a violation of Section 8.4(a) hereof) which is
continuing and has not been waived in accordance with Section 15.1
hereof or (ii) such Loans are advanced at any time that any of the
other applicable conditions precedent set forth in Section 3.2 of this
Agreement have not been satisfied, or (iii) such Loans cause the
outstanding balance of Revolving Credit Loans to exceed the Borrowing
Base at such time MINUS the sum of outstanding Revolving Credit Loans
at such time and the aggregate LC Exposure of the Revolving Credit
Lenders at such time.
"PERSON" means an individual, partnership, corporation
(including a business trust), joint stock company, trust,
unincorporated association, joint venture or other entity, or a
government or any political subdivision or agency thereof.
"PIK INTEREST" has the meaning specified in Section 2.12(a) of
this Agreement.
"PLEDGED COLLATERAL" means, collectively, the Pledged Notes,
the Pledged Stock, the Pledged Partnership Interests, the Pledged LLC
Interests, any other Investment Property of the Borrower or any
Subsidiary Guarantor, all certificates or other instruments
representing any of the foregoing, all Security Entitlements of the
Borrower
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or any Subsidiary Guarantor in respect of any of the foregoing, all
dividends, interest distributions, cash, warrants, rights, instruments
and other property or Proceeds from time to time received, receivable
or otherwise distributed in respect of or in exchange for any or all of
the foregoing. Pledged Collateral may be General Intangibles or
Investment Property.
"PLEDGED LLC INTERESTS" means all of the Borrower's or any
Subsidiary Guarantor's right, title and interest as a member of any
LLCs and all of such Borrower's or Subsidiary Guarantor's right, title
and interest in, to and under any LLC Agreement to which it is a party.
"PLEDGED NOTES" means all right, title and interest of
Borrower or any Subsidiary Guarantor, in the Instruments evidencing all
Indebtedness owed to such Borrower or Subsidiary Guarantor, including
all Indebtedness described on the Disclosure Schedule, issued by the
obligors named therein, and 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 or all of
such Indebtedness.
"PLEDGED PARTNERSHIP INTERESTS" shall mean all of the Borrower
or any Subsidiary Guarantor's right, title and interest as a limited
and/or general partner in all Partnerships and all of such Borrower's
or such Subsidiary Guarantor's right, title and interest in, to and
under any Partnership Agreements to which it is a party.
"PLEDGED STOCK" means the shares of capital stock owned by the
Borrower and each Subsidiary Guarantor, including all shares of capital
stock listed on the Disclosure Schedule; provided, however, that only
the outstanding capital stock of a Subsidiary that is not a Domestic
Subsidiary possessing up to but not exceeding 65% of the voting power
of all classes of capital stock of such controlled foreign corporation
entitled to vote shall be deemed to be pledged hereunder.
"POTENTIAL DEFAULT" means an event, condition or thing which
with the lapse of any applicable grace period or with the giving of
notice or both would constitute, an Event of Default referred to in
Section 9 of this Agreement and which has not been appropriately waived
in writing in accordance with this Agreement or fully corrected, prior
to becoming an actual Event of Default.
"PRIORITY REVOLVING CREDIT COLLATERAL" means Collateral that
is not Priority Term B Collateral.
"PRIORITY TERM B COLLATERAL" means the Collateral of the
Borrower or the Subsidiary Guarantors listed on Annex VI.
"PROCEEDS" means "proceeds" as defined in the UCC.
"PRODUCTS" means property directly or indirectly resulting
from any manufacturing, processing, assembling or commingling of any
Inventory.
"PROPERTIES" has the meaning specified in Section 7.9 of this
Agreement.
"RATABLE PORTION" means, in respect of any Lender, the
quotient (expressed as a percentage) obtained at any time by dividing:
(x) the sum of such Lender's Revolving Credit Commitment at such time
PLUS such Lender's outstanding Term B Loans at such time BY (y) the sum
of the aggregate amount of the Revolving Credit Commitments of all
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of the Lenders PLUS the aggregate outstanding Term B Loans of all of
the Lenders; PROVIDED, HOWEVER, that, if all of the Revolving Credit
Commitments are terminated pursuant to the terms hereof, then, such
Lender's Ratable Portion shall mean the quotient (expressed as a
percentage) obtained by dividing (x) the aggregate amount of such
Lender's Loans (together with any participating interests of such
Lender hereunder) outstanding at such time by (y) the aggregate amount
of Loans (together with all such participating interests of all of the
Lenders hereunder) of all of the Lenders outstanding at such time;
PROVIDED, FURTHER, that to the extent any Lender does not have a
constant but rather a variable percentage of the aggregate outstanding
Revolving Credit Commitments (or aggregate outstanding Revolving Credit
Loans upon termination of the Revolving Credit Commitments) of the
Lenders and aggregate outstanding Term B Loans of the Lenders, such
Lender's Ratable Portion shall be (I) calculated separately with
respect to such Lender's percentage interest in the Revolving Credit
Commitments (or Revolving Credit Loans upon such termination) and
percentage interest in the Term B Loans, and (II) for purposes of
allocations pursuant to and determinations under this Agreement, such
Lender's variable Ratable Portion as so calculated shall be applied
separately where appropriate to the context of such allocation or
determination with respect to outstanding Revolving Credit Commitments
(or Revolving Credit Loans upon such termination) and\or outstanding
and Term B Loans, as the case may be.
"RATE CONTINUATION" means a continuation pursuant to Section
2.10 of this Agreement of LIBOR Rate Loans having a particular Interest
Period as LIBOR Rate Loans having an Interest Period of the same
duration.
"RATE CONVERSION" means a conversion pursuant to Section 2.10
of this Agreement of Loans of one Type into Loans of another Type and,
with respect to LIBOR Rate Loans, from one permissible Interest Period
to another permissible Interest Period.
"RATE CONVERSION/CONTINUATION REQUEST" has the meaning
specified in Section 2.10 of this Agreement.
"RCRA" means the Resource Conservation and Recovery Act,
42 U.S.C. Section Section 6901 ET SEQ.
"REAL ESTATE" means, with respect to a Person, all land,
together with the buildings, structures, parking areas, and other
improvements thereon, now or hereafter owned by such Person, including
all easements, rights-of-way, and similar rights relating thereto and
all leases, tenancies, and occupancies thereof.
"REALTY RESERVES" means such reserves as the Administrative
Agent from time to time determines in the Administrative Agent's
discretion as being appropriate to reflect the impediments to the
Administrative Agent's ability to realize upon any Eligible Real
Estate. Without limiting the generality of the foregoing, Realty
Reserves may include (but are not limited to) reserves for (i)
environmental remediation, (ii) municipal taxes and assessments, (iii)
repairs and (iv) remediation of title defects.
"RE-CONVEYANCING AGREEMENT" means that certain Assignment and
Repurchase of Receivables and Release, dated as of the date hereof,
among Olympic Steel Receivables L.L.C., the Borrower, Olympic Steel
Minneapolis, Inc. and Olympic Steel Lafayette, Inc.
"RECORD" means and includes "record" as defined in the UCC.
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"REGULATORY CHANGE" means, as to any Lender, any change in
United States federal, state or foreign Laws or regulations or the
adoption or making of any interpretations, directives or requests of or
under any United States federal; state or foreign Laws or regulations
(whether or not having the force of Law) by any court or governmental
authority charged with the interpretation or administration thereof.
"REIMBURSEMENT AGREEMENT" has the meaning set forth in Section
2.11(a) of this Agreement.
"REMITTANCES OF NET CASH PROCEEDS" means: (i) the cash
proceeds (including cash proceeds subsequently received in respect of
non-cash consideration initially received) from any sale, lease,
transfer or other disposition of assets of the Borrower or any
Subsidiary Guarantor to a Person (other than Collections in respect of
Accounts) received by the Borrower or such Subsidiary Guarantor,
including, without limitation, cash payments in respect of Inventory
sales, payments in respect to other dispositions of Collateral (other
than the sale of Inventory in the ordinary course of Business to the
extent giving rise to Accounts) and real property of the Borrower and
the Subsidiary Guarantors (net of (x) selling expenses, including
without limitation any reasonable broker's fees or commissions, costs
of discontinuing operations associated with such assets and sales,
transfer and similar taxes and (y) the repayment of any Indebtedness
secured by a purchase money Lien on such assets that is permitted under
this Agreement and, in any event, with respect to the Borrower's
Chambersburg, Pennsylvania and Winder, Georgia facilities, repayment of
the Borrower's Indebtedness to GE Capital Public Finance, Inc. and
Fifth Third Bank, as the case may be, related to such facilities),
insurance proceeds, condemnation awards and tax refunds; (ii) the cash
proceeds from the issuance and/or sale of equity securities, to the
extent such proceeds or debt securities of the Borrower and the
Subsidiary Guarantors pursuant to any public offering or private
placement, net of transaction costs (in each case, net of customary
fees, costs and expenses including, without limitation, underwriters'
or placement Administrative Agents' discounts and commissions and
transfer and similar taxes and legal and accounting fees and expenses)
and (iii) the cash proceeds from any Material Recovery Event.
"REPORTABLE EVENT" means any of the events set forth in
Section 4043 of ERISA excluding those events for which the requirement
of notice has been waived by the PBGC.
"REQUIRED LENDERS" means, at any time, Lenders (excluding, for
purposes of this definition, any Lender then constituting a "Defaulting
Lender" under Section 2.8(c)) having at least 66 and 2\3rds% of the
aggregate outstanding Revolving Credit Commitments of the Revolving
Credit Lenders at such time PLUS the outstanding principal amount of
the Term B Loans outstanding at such time; PROVIDED, HOWEVER, that, if
the Revolving Credit Commitments are terminated pursuant to the terms
hereof, then, the term "Required Lenders" shall mean Lenders (excluding
any Lender then constituting a "Defaulting Lender) having at least 66
and 2\3rds% of the aggregate outstanding principal amount of the
Revolving Credit Loans and Term B Loans of all of the Lenders
outstanding at such time (excluding, for purposes of determining the
aggregate outstanding Revolving Credit Commitments of the Revolving
Credit Lenders and the aggregate outstanding principal amount of
Revolving Credit Loans and Term B Loans of the Lenders, as the case may
be, at such time, the outstanding Revolving Credit Commitments and the
outstanding principal amount of the Revolving Credit Loans and Term B
Loans, as the case may be, of any such Defaulting Lender).
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"REQUIRED TERM B LENDERS" means, at any time, the Term B
Lenders (excluding, for purposes of this definition, any Term B Lender
then constituting a "Defaulting Lender" under Section 2.8(c)) having at
least 66 and 2\3rds of the aggregate outstanding principal amount of
the Term B Loans of all of the Term B Lenders outstanding at such time;
(excluding, for purposes of determining the aggregate outstanding
principal amount of Term B Loans of the Term B Lenders outstanding at
such time, the outstanding Term B Loans of any such Defaulting Lender).
"RESERVE AMOUNT" means the aggregate amount determined by the
Administrative Agent, in its sole Permitted Discretion, as a reserve in
the Borrowing Base against Collateral values and potential or
anticipated obligations of the Borrower but without duplication of
amounts already reserved against the value of the Collateral comprised
within the definitions of "Eligible Inventory" or "Eligible Accounts."
Without limiting the generality of the foregoing, the Reserve Amount
includes any Realty Reserve and may include reserves for: (a) tax
liabilities and other obligations owing to governmental entities, (b)
litigation liabilities, (c) amounts that are required to be expended in
order for Borrower and each of Borrower's operations and property to
comply with Environmental Laws or in order to correct any violation by
Borrower or each of the Borrower's operations or property of
Environmental Laws, (d) the anticipated costs and expenses relating to
the liquidation of Collateral, (e) unpaid sales taxes, (f) liabilities
and other obligations owing by Borrower to any lessor of real property
leased by Borrower or to any warehouseman, (g) reserves for any claims
asserted or likely to be asserted (in Administrative Agent's sole
determination) that have resulted or would result in Liens on the
Collateral, (h) impediments on the Administrative Agent's ability to
realize upon the Collateral, (i) rental obligations on leased sites or
mortgage payment obligations on third party mortgaged sites and (j) any
Designated Hedge Obligations of the Borrower to any Designated Hedge
Credit or any other credit exposure to any other hedge creditor. As of
the Closing Date hereof, the Reserve Amount shall include (x) a reserve
in the amount equal to 6 months rent (or applicable amortization
amounts with respect to Indebtedness secured thereby) with respect to
Borrower's Winder, Georgia and Chambersburg, Pennsylvania plants and
(y) a reserve in an amount equal to the aggregate payments agreed to be
made by the Administrative Agent to any bailee, consignee mortgagee,
landlord or warehouseman in connection with any bailee waiver,
consignee waiver, landlord\mortgagee waiver or warehouseman's waiver;
"RESPONSIBLE OFFICER" means, with respect to the Borrower, the
Chief Executive Officer, President or Chief Financial Officer thereof.
"REVISED ARTICLE 9" means, with respect to the UCC as in
effect in any Enactment State, Uniform Commercial Code, Article 9, 1999
Official Text, as enacted in such state.
"REVOLVING CREDIT BORROWING" means a Borrowing consisting of
Revolving Credit Loans.
"REVOLVING CREDIT COMMITMENT" means the commitment of each
Revolving Credit Lender to advance Revolving Credit Loans up to (i) the
amount, if any, set forth in opposite such Revolving Credit Lender's
name in Annex I hereto as its Revolving Credit Commitment or (ii) the
amount, if any, set forth opposite such Revolving Credit Lender's name
in that certain Letter Allocating Initial Commitments to be executed as
of the completion of the Syndication Period as its "Revolving Credit
Commitment," as either may be reduced from time to time pursuant to
Sections 2.9(e) and/or Section 10 hereof, or adjusted from time to time
as a result of assignments to or from such Revolving Credit Lender
pursuant to Section 13.1 of this Agreement.
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"REVOLVING CREDIT LENDER" means Lenders having Revolving
Credit Commitments hereunder or outstanding Revolving Credit Loans
hereunder.
"REVOLVING CREDIT LOAN" means a Loan made by a Revolving
Credit Lender to the Borrower pursuant to Section 2.1 of this Agreement
(whether made by a Revolving Credit Lender pursuant to a Credit Request
or by reason of a Deemed Credit Request), including Swing Line
Settlement Loans and Permitted Special Advances (except to the extent
Swing Line Settlement Loans or Permitted Special Advances are expressly
excluded therefrom for purposes of certain calculations by the terms of
this Agreement).
"REVOLVING CREDIT NOTE" means, with respect to the Borrower,
the promissory note of the Borrower payable to the order of a Revolving
Credit Lender, in substantially the form of EXHIBIT A-1 hereto, and in
the original principal 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 Credit Loans made by such Lender.
"REVOLVING CREDIT TERMINATION DATE" means June 28, 2004, or
earlier if terminated pursuant to the terms of this Agreement.
"SALE" means and includes "sale" as defined in the UCC.
SECURED OBLIGATIONS: (x) the Obligations (including the LC
Exposure of the Revolving Credit Lenders and the Obligations of each
Subsidiary Guarantors to pay the Guaranteed Obligations of the Borrower
owing to the Lenders), (y) the Letter of Credit Obligations of the
Borrower owing to the Designated Letter of Credit Issuer and (z) the
Designated Hedge Obligations owing by the Borrower to any Designated
Hedge Creditor, as the case may be.
"SECURED PARTY" means and includes "secured party" as defined
in the UCC.
"SECURITIES ACCOUNT" means and includes "securities account"
as defined in the UCC.
"SECURITIES ACT' means the Securities Act of 1933, as amended
from time to time.
"SECURITIES INTERMEDIARY" means "securities intermediary" as
defined in the UCC.
"SECURITY" means "security" as defined in the UCC
"SECURITY AGREEMENT" means "security agreement" as defined in
the UCC.
"SECURITY CERTIFICATE" means "security certificate" as defined
in the UCC,.
"SECURITY ENTITLEMENT" means "security entitlement" as defined
in the UCC.
"SECURITY INTEREST" means "security interest" as defined in
the UCC.
"SETTLEMENT" has the meaning specified in Section 2.4(e) of
this Agreement.
"SETTLEMENT DATE" has the meaning specified in Section
2.4(e)(i) of this Agreement.
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"SOLVENT" means, with respect to any Person, as of any date of
determination, that: (a) the fair value of the property of the Person
as of such date is greater than the total amount of the liabilities
(including contingent liabilities computed at the amount that, in light
of all the facts and circumstances existing as of such date, represents
the amount that can reasonably be expected to become an actual or
matured liability) of the Person, (b) the present fair salable value of
the assets of the Person as of such date is not less than the amount
that will be required to pay the probable liabilities of the Person on
its debts as they become absolute and matured, (c) the Person is able
to pay all liabilities of the Person as those liabilities mature, and
(d) the Person does not have unreasonably small capital for the
business in which it is engaged or for any business or transaction in
which it is about to engage. The determination of whether a Person is
Solvent shall take into account all such Person's assets and
liabilities regardless of whether, or the amount at which, any such
asset or liability is included on a balance sheet of such Person
prepared in accordance with GAAP, including assets such as contingent
contribution or subrogation rights, business prospects, distribution
channels and goodwill. In computing the amount of contingent or
unrealized assets or contingent or unliquidated liabilities at any
time, such assets and liabilities will be computed at the amounts
which, in light of all the facts and circumstances existing at such
time, represent the amount that reasonably can be expected to become
realized assets or matured liabilities, as the case may be. In
computing the amount that would be required to pay a Person's probable
liability on its existing debts as they become absolute and matured,
reasonable valuation techniques, including a present value analysis,
shall be applied using such rates over such periods as are appropriate
under the circumstances, and it is understood that, in appropriate
circumstances, the present value of contingent liabilities may be zero.
"SPECIAL PROPERTY" means:
(a) any permit, lease or license held by the Borrower
or any Subsidiary Guarantor (in each case as otherwise
permitted by this Agreement) that validly prohibits the
creation by the Grantors of a security interest therein;
(b) any permit, lease or license held by the Borrower
or any Subsidiary Guarantor (in each case as otherwise
permitted by this Agreement) to the extent that any
Requirement of Law applicable thereto prohibits the creation
of a security interest therein; and
(c) Equipment owned by the Borrower or any Subsidiary
Guarantor on the date hereof that is subject to a purchase
money Lien or a Capitalized Lease Obligation (in each case as
otherwise permitted by this Agreement) if the contract or
other agreement in which such Lien is granted (or in the
documentation providing for such Capitalized Lease Obligation)
validly prohibits the creation of any other Lien on such
Equipment; and
(d) Real Estate and M&E of the Borrower located at
the Borrower's Chambersburg, Pennsylvania and Winder, Georgia
facilities to the extent security interests and Liens have
been granted therein in favor of GE Capital Public Finance,
Inc. and Fifth Third Bank, respectively,
in each case, only to the extent, and for so long as, such permit,
lease, license, contract or other agreement, or Requirement of Law
applicable thereto, validly prohibits the creation of a Lien in such
property in favor of the Administrative Agent and, upon the termination
of such prohibition (howsoever occurring), such permit, lease, license,
Equipment, Real Estate and M&E shall cease to be "Special Property".
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"SPV" has the meaning specified in Section 2.7 of this
Agreement.
"SUBSIDIARY" means, in respect of a corporate Person, a
corporation or other business entity the shares constituting a majority
of the outstanding capital stock (or other form of ownership) or
constituting a majority of the voting power in any election of
directors (or shares constituting both majorities) of which are (or
upon the exercise of any outstanding warrants, options or other rights
would be) owned directly or indirectly at the time in question by such
Person or another subsidiary of such Person or any combination of the
foregoing; PROVIDED, HOWEVER, that, for purposes of this Agreement, OLP
LLC and Trumark Steel and Processing, LLC will not be deemed to be
Subsidiaries of the Borrower or any of its other direct or indirect
Subsidiaries.
"SUBSIDIARY GUARANTORS" means Olympic Steel Lafayette, Inc.,
an Ohio corporation, Olympic Steel Minneapolis, Inc., a Minnesota
corporation, Olympic Steel Iowa, Inc., an Iowa corporation, Oly Steel
Welding, Inc., a Michigan corporation, and Olympic Steel Receivables
L.L.C., a Delaware limited liability company.
"SUBSIDIARY GUARANTY" means the joint and several obligation
of each Subsidiary Guarantor to pay the Secured Obligations of the
Borrower pursuant to Section 11 of this Agreement.
"SWING LINE SETTLEMENT LOAN" has the meaning set forth in
Section 2.4(c) of this Agreement.
"SYNDICATION PERIOD" means the period commencing with the
Effective Date and ending as of the date which the Lead Arranger
determines, in its sole discretion (and notifies the Borrower) that the
primary syndication by the Lead Arranger of portions of the Revolving
Credit Loans and Revolving Credit Commitments of NCCF and Citicorp USA,
Inc. to new Revolving Credit Lenders has been completed to the targeted
hold levels of NCCF and Citicorp USA, Inc. and, during which
Syndication Period, the reservation of rights of the Lead Arranger to
modify the structure, terms and pricing of the credit facilities
hereunder to the extent specified in Section 12.3 hereof to complete
the syndication hereof shall remain in effect and enforceable between
the Lead Arranger, the Administrative Agent and the Borrower.
"TERM B BORROWING" means a Borrowing by the Borrower from all
of the Term B Lenders having Term B Commitments which Borrowing
comprises all or a portion of the Term B Loan of each of the Term B
Lenders to the Borrower.
"TERM B COMMITMENT" means, with respect to each Term B Lender,
(i) the amount, if any, set forth opposite such Term B Lender's name in
Annex I hereto as its Term B Commitment or (ii) the amount, if any, set
forth opposite such Term B Lender's name in that certain Letter
Allocating Initial Commitments to be executed as of the completion of
the Syndication Period as its "Term B Commitment," as either may be
reduced from time to time pursuant to Section 10 hereof, or adjusted
from time to time as a result of assignments to or from such Term B
Lender pursuant to Section 13.1 of this Agreement.
"TERM B LENDER" means Lenders having Term B Commitments
hereunder or outstanding Term B Loans hereunder.
"TERM B LOAN" means the one time Loan made by a Term B Lender
on non-amortizing term basis pursuant to Section 2.5(a)of this
Agreement.
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"TERM B LOAN EVENT" means the occurrence of one or more of the
following events unless waived by Required Term B Lenders pursuant to
Section 15.1(b) hereof: (i) occurrence of an Event of Default described
in Section 9.1 hereof with respect to the Term B Loans, or (ii)
acceleration of the Revolving Credit Loans, (iii) breach of Section
8.4(a) hereof shall occur and be continuing for more than ten (10)
consecutive Business Days, or (iv) occurrence of an Event of Default
described in Section 9.13 hereof.
"TERM B LOAN MATURITY DATE" means June 28, 2004, or such
earlier date on which the Term B Commitments are terminated hereunder.
"TERM B NOTE" means, with respect to each Term B Lender, the
promissory note of the Borrower payable to the order of such Term B
Lender, in substantially the form of EXHIBIT A-3 hereto, and in the
original principal amount of the Term B Commitment of such Term B
Lender, evidencing the aggregate Indebtedness of the Borrower to such
Term B Lender resulting from the Term B Loan made by such Lender to the
Borrower.
"TESTING PERIOD" means, for any determination, a single period
consisting of the twelve consecutive fiscal months of the Borrower and
its consolidated Subsidiaries then last ended (whether or not such
months are all within the same fiscal year), EXCEPT that, if a
particular provision of this Agreement indicates that a Testing Period
shall be of a different specified duration, such Testing Period shall
consist of the particular Fiscal Month or Fiscal Months, or the
particular Fiscal Quarter or Fiscal Quarters, as the case may be, of
the Borrower and its consolidated Subsidiaries then last ended which
are so indicated in such provision.
"THIRD PARTY INTELLECTUAL PROPERTY" means any Intellectual
Property not owned by the Borrower or the Subsidiary Guarantors.
"TYPE" means, when used in respect of any Loan, the LIBOR Rate
or the Alternate Base Rate in effect in respect of such Loan.
"UCC" means the Uniform Commercial Code as from time to time
in effect in the State of Ohio; PROVIDED, HOWEVER, that in the event
that, by reason of mandatory provisions of law, any or all of the
attachment, perfection or priority of the Administrative Agent's and
the Lenders' security interest in any Collateral is governed by the
Uniform Commercial Code as in effect in a jurisdiction other than the
State of Ohio, the term "UCC" shall mean the Uniform Commercial Code as
from time to time in effect in such other jurisdiction for purposes of
the provisions hereof relating to such attachment, perfection or
priority and for the purposes of definitions related to such
provisions; PROVIDED, FURTHER, that if the UCC is amended after the
date hereof, such amendment will not be given effect for the purposes
of this Agreement if and to the extent the result of such amendment
would be to limit or eliminate any item of Collateral.
"UNCERTIFICATED SECURITY" means "uncertificated security" as
defined in the UCC.
"UNITED STATES" and "U.S." each means United States of
America.
"VEHICLES" means all vehicles covered by a certificate of
title law of any state.
"VOTING STOCK" means capital stock of a corporation, the
holders of which are ordinarily, in the absence of contingencies,
entitled to elect a majority of the corporate directors (or persons
performing similar functions).
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"WITHDRAWAL LIABILITY" means (in respect of the Borrower,
Subsidiaries thereof and their ERISA Affiliates), at any date of
determination, the amount equal to the aggregate present value (as
defined in section 3 of ERISA) at such date of the amount claimed to
have been incurred as a result of a withdrawal LESS any portion thereof
as to which the Borrower reasonably believes, after appropriate
consideration of the possible adjustments arising under subtitle E of
Title IV of ERISA, the Borrower, Subsidiaries thereof and their ERISA
Affiliates will have no liability; PROVIDED; HOWEVER, that the Borrower
shall obtain promptly written advice from independent actuarial
consultants supporting such determination.
"WHOLLY-OWNED SUBSIDIARY" means, in respect of any Person, a
Subsidiary of such Person in which such Person owns all of the
outstanding capital stock (or other form of ownership) and controls all
of the voting power in any election of directors or otherwise.
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ANNEX III
TO
CREDIT AND SECURITY AGREEMENT
CONDITIONS PRECEDENT TO INITIAL LOANS
[refer to actual Conditions Precedent Annex III attached hereto]
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ANNEX IV
TO
CREDIT AND SECURITY AGREEMENT
INVENTORY ADVANCE RATES
ACTIVE BY TYPE: (Less than 365 DAYS)** ADVANCE RATE
------------
Hot Rolled 57.0%
Cold Rolled 55.7%
Plate 59.9%
Coated 53.1%
Specialty 52.0%
Other 42.9%
INACTIVE (More than 365 DAYS)** 20.0%
** Whether Inventory is classified as active or inactive is determined on the
basis of the number of days elapsed since the original purchase date of the
Inventory as invoiced to the Borrower or Subsidiary Guarantor purchasing such
Inventory from the outside vender; inactive Inventory being Inventory remaining
after the expiration of more than 365 days from the original invoice date
thereof.
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ANNEX V
TO
CREDIT AND SECURITY AGREEMENT
DISCLOSURE SCHEDULE
[refer to actual Disclosure Schedule attached hereto]
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176
ANNEX VI
TO
CREDIT AND SECURITY AGREEMENT
PRIORITY TERM B COLLATERAL
All Real Estate and M&E of Olympic Steel Minneapolis, Inc. located in
Minnesota.
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177
ANNEX VII
TO
CREDIT AND SECURITY AGREEMENT
REAL ESTATE SUBJECT TO ELIGIBILITY
000 Xxxxxx Xxxx, Xxxxxxxx, Xxxxxxxxx
Xxx Xxxxxxx Xxxxx Xxxx, Xxxxxxx, Xxxxxxxxxxx
0000 Xxxxxxxx Xxxxxxxxx, Xxxxxxxxxx, Xxxxxxxx
0000 Xxxxx Xxxxxxxx Xxxx, Xxxxxxx, Xxxxxxxx
00000 00xx Xxxxxx Xxxxx, Xxxxxxxx, Xxxxxxxxx
0000 Xxxxx Xxxxxx, Xxxxxxxxxx, Xxxx
0000, 5092 and 0000 Xxxxxxxx Xxxx, Xxxxxxx Xxxxxxx, Xxxx
0000 X. 000xx Xxxxxx, Xxxxxxxxx, Xxxx
AVII-1
