COPY AS EXECUTED
TOGETHER WITH XXXXXXXX
X, X, X, X, X, X-0, X-0, and O
AS SEPARATELY EXECUTED
U.S. $150,000,000
THIRD AMENDED AND RESTATED CREDIT AGREEMENT
Dated as of April 30, 1999
Among
WHEELING-PITTSBURGH STEEL CORPORATION
as Borrower
-----------
and
THE LENDERS PARTY HERETO
as Lenders
and
CITIBANK, N.A.
as Agent and as Initial Issuing Bank
------------------------------------
T A B L E O F C O N T E N T S
Section Page
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
1.1. Defined Terms .........................................................2
1.2. Computation of Time Periods............................................29
1.3. Accounting Terms.......................................................29
1.4. Certain Terms ........................................................29
ARTICLE II
AMOUNTS AND TERMS OF THE LOANS
2.1. The Revolving Credit Loans.............................................29
2.2. The Swing Loans........................................................30
2.3. Making the Loans.......................................................30
2.4. Fees...................................................................32
2.5. Reduction and Termination of the Revolving Credit Commitments..........32
2.6. Repayment..............................................................32
2.7. Prepayments............................................................32
2.8. Conversion/Continuation Option.........................................34
2.9. Interest...............................................................35
2.10. Interest Rate Determination...........................................35
2.11. Increased Costs.......................................................36
2.12. Illegality............................................................36
2.13. Capital Adequacy......................................................37
2.14. Payments and Computations.............................................37
2.15. Taxes.................................................................39
2.16. Sharing of Payments, Etc..............................................41
2.17. Letter of Credit Facility.............................................42
2.18. Settlement of Accounts................................................47
2.19. The Blocked Account...................................................48
ARTICLE III
CONDITIONS PRECEDENT
3.1. Conditions Precedent to the Effective Date.............................49
i
3.2. Additional Conditions Precedent to the Effective Date...................51
3.3. Conditions Precedent to Each Loan and Letter of Credit..................53
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
4.1. Corporate Existence; Compliance with Law................................54
4.2. Corporate Power; Authorization; Enforceable Obligations.................54
4.3. Taxes...................................................................56
4.4. Full Disclosure.........................................................56
4.5. Financial Matters.......................................................56
4.6. Litigation..............................................................58
4.7. Margin Regulations......................................................58
4.8. Ownership of the Borrower and Subsidiaries..............................58
4.9. ERISA...................................................................59
4.10. Liens..................................................................60
4.11. Replacement Notes......................................................60
4.12. No Burdensome Restrictions; No Defaults................................60
4.13. No Other Ventures......................................................61
4.14. Investment Company Act.................................................61
4.15. Insurance..............................................................61
4.16. Labor Matters..........................................................61
4.17. Force Majeure..........................................................62
4.18. Use of Proceeds........................................................62
4.19. Environmental Protection...............................................63
4.20. Intellectual Property..................................................64
4.21. Title..................................................................65
4.22. Year 2000..............................................................67
ARTICLE V
FINANCIAL COVENANTS
5.1. Maintenance of Senior Leverage Ratio....................................67
5.2. Maintenance of Interest Coverage Ratio..................................68
5.3. Limitation on Capital Expenditures......................................69
ii
ARTICLE VI
ADDITIONAL AFFIRMATIVE COVENANTS
6.1. Compliance with Laws, Etc...............................................69
6.2. Conduct of Business.....................................................70
6.3. Payment of Taxes, Etc...................................................70
6.4. Maintenance of Insurance................................................70
6.5. Preservation of Corporate Existence, Etc................................71
6.6. Access..................................................................71
6.7. Keeping of Books........................................................71
6.8. Maintenance of Properties, Etc..........................................71
6.9. Application of Proceeds.................................................72
6.10. Financial Statements...................................................72
6.11. Reporting Requirements.................................................75
6.12. Employee Plans.........................................................78
6.13. Fiscal Year............................................................79
6.14. Borrowing Base Determination...........................................79
6.15. Environmental..........................................................79
6.16. Securitization Intercreditor Agreement.................................79
ARTICLE VII
NEGATIVE COVENANTS
7.1. Liens, Etc..............................................................80
7.2. Indebtedness............................................................82
7.3. Lease Obligations.......................................................84
7.4. Restricted Payments.....................................................85
7.5. Mergers, Stock Issuances, Sale of Assets, Etc...........................86
7.6. Investments in Other Persons............................................87
7.7. Change in Nature of Business............................................89
7.8. Material Agreements.....................................................89
7.9. Accounting Changes......................................................89
7.10. Transactions with Affiliates...........................................89
7.11. Cancellation of Indebtedness Owed to It................................90
7.12. No New Subsidiaries....................................................90
7.13. Capital Structure......................................................91
7.14. No Speculative Transactions............................................91
7.15. Margin Regulations.....................................................91
7.16. Bank Accounts .........................................................91
iii
7.17. Environmental Release..................................................92
ARTICLE VIII
EVENTS OF DEFAULT
8.1. Events of Default.......................................................92
8.2. Remedies .........................................................95
8.3. Actions in Respect of Letters of Credit.................................96
ARTICLE IX
THE AGENT
9.1. Authorization and Action................................................98
9.2. Agent's Reliance, Etc...................................................98
9.3. Citibank, Citicorp and Affiliates.......................................99
9.4. Lender Party Credit Decision............................................99
9.5. Indemnification.........................................................99
9.6. Successor Agent........................................................101
ARTICLE X
MISCELLANEOUS
10.1. Amendments, Etc......................................................102
10.2. Notices, Etc. .......................................................104
10.3. No Waiver; Remedies..................................................104
10.4. Costs; Expenses; Indemnities.........................................104
10.5. Right of Set-off.....................................................107
10.6. Binding Effect.......................................................107
10.7. Assignments and Participations.......................................108
10.8. Governing Law .......................................................111
10.9. Submission to Jurisdiction...........................................111
10.10. Section Titles......................................................111
10.11. Execution in Counterparts...........................................112
10.12. No Liability of the Issuers.........................................112
10.13. Entire Agreement....................................................112
10.14. Confidentiality.....................................................112
10.15. Waiver of Jury Trial................................................114
iv
SCHEDULES
Schedule I - List of Issuers
Schedule II - Commitments
Schedule III - List of Applicable Lending Offices and Addresses for Notices
Schedule IV - Borrowing Base Advance Rates
Schedule 2.3 - List of Eligible Signatories
Schedule 3.1 - UCC Termination Statements
Schedule 4.3 - Taxes
Schedule 4.6 - Litigation
Schedule 4.8 - List of Subsidiaries
Schedule 4.9 - List of Plans
Schedule 4.10 - List of Liens
Schedule 4.13 - Joint Ventures
Schedule 4.16 - Labor
Schedule 4.19 - Environmental Protection
Schedule 4.21(a) - List of Owned Real Estate
Schedule 4.21(b) - List of Leased Real Estate
Schedule 4.21(c) - Existing Options
Schedule 7.2 - Existing Indebtedness
Schedule 7.3 - Leases
Schedule 7.4.1 - Restricted Payments
Schedule 7.4.2 - Restricted Payments
Schedule 7.6 - Existing Investments
v
Schedule 7.10 - Transactions with Affiliates
Schedule 7.16 - Permitted Bank Accounts
EXHIBITS
Exhibit A - Form of Revolving Credit Note
Exhibit B - Form of Notice of Borrowing
Exhibit C - Form of Letter of Credit Request
Exhibit D - Form of Notice of Conversion or Continuation
Exhibit E - Form of Assignment and Acceptance
Exhibit F - Form of Borrowing Base Certificate
Exhibit G - Form of Holdings Guaranty
Exhibit H - Form of Holdings Pledge Agreement
Exhibit I - Form of Guaranty
Exhibit J - Form of Security Agreement
Exhibit K - Form of Keepwell Agreement
Exhibit L - Form of Holdings Intercreditor Agreement
Exhibit M-1 - Opinion of Xxxxxx Xxxxxxxx Frome, Xxxxxxxxxx & Wolosky
-- Outside Counsel for the Borrower
Exhibit M-2 - Opinion of Xxxx Xxxxx Xxxx & XxXxxx LLP
-- Local Counsel for the Borrower
Exhibit N - Form of Guarantor Intercompany Notes
Exhibit O - Form of Cash Collateral Account Agreement
Exhibit P - Form of Securitization Intercreditor Agreement
vi
THIRD AMENDED AND RESTATED CREDIT AGREEMENT
THIRD AMENDED AND RESTATED CREDIT AGREEMENT, dated as of April 30,
1999, among Wheeling-Pittsburgh Steel Corporation, a Delaware corporation (the
"Borrower"), the financial institutions listed on the signature pages hereof
(each individually a "Lender" and collectively the "Lenders"), and Citibank,
N.A. ("Citibank"), as agent hereunder for the Lenders (in such capacity,
together with any successor appointed pursuant to Article IX, the "Agent"), and
as issuer of letters of credit (the "Initial Issuing Bank").
PRELIMINARY STATEMENTS.
1. The Borrower is a party to a Second Amended and Restated Credit
Agreement, dated as of December 28, 1995 (as amended to date, the "Original
Credit Agreement"), with the financial institutions party thereto and Citibank,
as agent.
2. Wheeling-Pittsburgh Corporation, a Delaware corporation
("Holdings"), is the direct parent of the Borrower and WHX Corporation, a
Delaware corporation ("WHX") is the direct parent of Holdings.
3. The Borrower and Holdings have requested that the Lenders, the
Issuers (as hereinafter defined) and the Agent amend and restate the Original
Credit Agreement to, among other things, increase the Commitments and extend the
Termination Date (as such terms are defined in the Original Credit Agreement).
4. The Lender Parties (as hereinafter defined) have indicated their
willingness to agree to amend and restate the Original Credit Agreement on the
terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the premises and the covenants and
agreements contained herein, the parties hereto agree that the Original Credit
Agreement is hereby amended and restated as follows:
1
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
1.1. Defined Terms. As used in this Agreement, the following
terms have the following meanings (such meanings to be equally applicable to
both the singular and plural forms of the terms defined):
"Accounts" has the meaning specified in the Security
Agreement.
"Adjusted Net Worth" means, as to any Guarantor at the
Effective Date, the lesser of (x) the amount by which the book value of the
property of such Guarantor exceeds the total amount of liabilities on its
existing "Debt" (as such term is defined in Section 270 of the New York Debtor
Creditor Law), including, without limitation, probable contingent liabilities,
but excluding liabilities under the Guaranty, of such Guarantor at such date and
(y) the amount by which the book value of the assets of such Guarantor at such
date exceeds the amount that will be required to pay the probable liability of
such Guarantor on its Debt, excluding Debt in respect of the Guaranty, as they
become absolute and matured.
"Affiliate" means, as to any Person, any Subsidiary of such
Person and any other Person which, directly or indirectly, controls, is
controlled by or is under common control with such Person and includes each
officer or director or general partner of such Person, and each Person who is
the direct or indirect beneficial owner of 15% or more of any class of voting
Stock of such Person or, with respect to the Borrower, of Holdings or WHX. For
the purposes of this definition, "control" means the possession of the power to
direct or cause the direction of management and policies of such Person, whether
through the ownership of voting securities, by contract or otherwise.
"Agent" has the meaning specified in the recital of parties to
this Agreement.
"Agent's Account" means the account of the Agent maintained by
the Agent at Citibank at its office at 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000, Account No. 3682 2248, Attention: Xxxxxxxxx Xxxxxxxx.
"Agreement" means this Third Amended and Restated Credit
Agreement, together with all Exhibits and Schedules hereto, as the same may be
amended, supplemented or otherwise modified from time to time.
2
"Applicable Lending Office" means, with respect to each Lender
Party, its Domestic Lending Office in the case of a Base Rate Loan and its
Eurodollar Lending Office in the case of a Eurodollar Rate Loan.
"Applicable Margin" means, as of any date, a percentage per
annum determined by reference to the Performance Level in effect on such date as
set forth below:
Applicable Margin Applicable Margin Applicable Margin for
Performance Level for Base Rate Loans for Eurodollar Letter of Credit Fees
Rate Loans
------------------------------------------------------------------------------------------------------------------------------------
I 1.00% 2.00% 1.75%
------------------------------------------------------------------------------------------------------------------------------------
II 1.125% 2.125% 1.875%
------------------------------------------------------------------------------------------------------------------------------------
III 1.25% 2.25% 2.00%
------------------------------------------------------------------------------------------------------------------------------------
IV 1.375% 2.375% 2.125%
------------------------------------------------------------------------------------------------------------------------------------
provided that, for the period commencing on the Effective Date and ending on the
date of delivery of the financial statements in accordance with Section 6.10(c)
related to the Fiscal Year ending 1999, the Applicable Margin shall be as set
forth opposite Performance Level III.
"Applicable Percentage" means, as of any date, a percentage
per annum determined by reference to the Performance Level in effect on such
date as set forth below:
Applicable
Performance Level Percentage
I 0.375%
--------------------------------------------------------------------------------
II 0.50%
--------------------------------------------------------------------------------
III 0.50%
--------------------------------------------------------------------------------
IV 0.50%
--------------------------------------------------------------------------------
3
"Assignment and Acceptance" means an assignment and acceptance
entered into by a Lender and an Eligible Assignee, and accepted by the Agent in
accordance with Section 10.7 and in substantially the form of Exhibit E.
"Available Credit" means, at any time, an amount equal to (i)
the lower of (a) the Revolving Credit Commitments outstanding at such time, and
(b) the Borrowing Base at such time minus (ii) the aggregate principal amount of
the Revolving Credit Loans and Swing Line Loans outstanding at such time and the
outstanding Letter of Credit Obligations at such time.
"Base Rate" means, for any period, a fluctuating interest rate
per annum as shall be in effect from time to time, which rate per annum shall be
equal at all times to the highest of:
(a) the rate of interest announced publicly by Citibank in New
York, New York, from time to time, as Citibank's base rate; and
(b) the sum (adjusted to the nearest 1/4 of one percent or, if
there is no nearest 1/4 of one percent, to the next higher 1/4 of one percent)
of (i) 1/2 of one percent per annum, plus (ii) the rate per annum obtained by
dividing (A) the latest three-week moving average of secondary market morning
offering rates in the United States for three-month certificates of deposit of
major United States money market banks, such three-week moving average (adjusted
to the basis of a year of 360 days) being determined weekly on each Monday (or,
if any such day is not a Business Day, on the next succeeding Business Day) for
the three-week period ending on the previous Friday by Citibank on the basis of
such rates reported by certificate of deposit dealers to and published by the
Federal Reserve Bank of New York or, if such publication shall be suspended or
terminated, on the basis of quotations for such rates received by Citibank from
three New York certificate of deposit dealers of recognized standing selected by
Citibank, by (B) a percentage equal to 100% minus the average of the daily
percentages specified during such three-week period by the Board of Governors of
the Federal Reserve System (or any successor) for determining the maximum
reserve requirement (including, without limitation, any emergency, supplemental
or other marginal reserve requirement) for Citibank in respect of liabilities
consisting of or including (among other liabilities) three-month U.S. dollar
nonpersonal time deposits in the United States, plus (iii) the average during
such three-week period of the annual assessment rates estimated by Citibank for
determining the then current annual assessment payable by Citibank to the
Federal Deposit Insurance Corporation (or any successor) for insuring U.S.
dollar deposits of Citibank in the United States; and
4
(c) the sum (adjusted to the nearest one percent or, if there
is no nearest one percent, to the next higher one percent) of (i) one percent
per annum plus (ii) the Federal Funds Rate.
"Base Rate Loan" means any outstanding principal amount of the
Loans of any Lender Party that bears interest with reference to the Base Rate.
"Blocked Account" has the meaning specified in Section 2.19.
"Blocked Account Letter" means the letter agreement, dated
August 17, 1994, executed by the Borrower and the Agent and acknowledged and
agreed to by PNC Bank, National Association, as such letter agreement may be
amended, supplemented or otherwise modified from time to time in accordance with
the terms hereof.
"Borrowing" means each of a Revolving Credit Borrowing and a
Swing Loan Borrowing.
"Borrowing Base" means, at any time, an amount up to a
percentage of the value of various categories of Eligible Inventory at such
time, as set forth on Schedule IV hereto; provided that with respect to the
Eligible Inventory of any Guarantor, such amount shall not exceed such
Guarantor's Adjusted Net Worth at the Effective Date; provided, however, that
such advance rates may be adjusted by the Agent from time to time in its sole
discretion based upon an outside valuation; provided further, however, that such
advance rates may not be adjusted, without the consent of all of the Lenders (x)
above 67.5% for any category of Inventory set forth on Schedule IV hereto or (y)
above 52.5% for the weighted average of all categories of Inventory set forth on
Schedule IV hereto. The Agent shall provide the Borrower and the Lenders with
two Business Days' prior written notice of any such change.
"Borrowing Base Certificate" means a certificate of the
Borrower substantially in the form of Exhibit F.
"Business Day" means a day of the year on which banks are not
required or authorized by law to close in New York City and, if the applicable
Business Day relates to a Eurodollar Rate Loan, a day on which dealings are also
carried on in the London interbank market.
"Capital Expenditures" means, for any Person for any period,
the aggregate of all expenditures by such Person and its Subsidiaries, except
interest capitalized during construction, during such period for property, plant
or equipment,
5
including, without limitation, renewals, improvements, replacements and
capitalized repairs, that would be reflected as additions to property, plant or
equipment on a consolidated balance sheet of such Person and its Subsidiaries
prepared in accordance with GAAP, but not including any Investments permitted
pursuant to Section 7.6. For the purpose of this definition, the purchase price
of equipment which is acquired simultaneously with the trade-in of existing
equipment owned by such Person or any of its Subsidiaries or with insurance
proceeds shall be included in Capital Expenditures only to the extent of the
gross amount of such purchase price less the amount of the credit granted by the
seller of such equipment being traded in at such time or the amount of such
proceeds, as the case may be.
"Capitalized Lease" means, as to any Person, any lease of
property by such Person as lessee which would be capitalized on a balance sheet
of such Person prepared in accordance with GAAP.
"Capitalized Lease Obligations" means, as to any Person, the
capitalized amount of all obligations of such Person or any of its Subsidiaries
under Capitalized Leases, as determined on a consolidated basis in accordance
with GAAP.
"Cash Collateral Account Agreement" means the amended and
restated cash collateral agreement, dated as of the date hereof, executed by the
Borrower and the Agent, substantially in the form of Exhibit O, as such
agreement may be further amended, supplemented or modified from time to time.
"Cash Equivalents" means (i) securities with maturities of one
year or less from the date of acquisition issued or fully guaranteed or insured
by the United States government or any agency thereof and backed by the full
faith and credit of the United States, (ii) certificates of deposit, eurodollar
time deposits, overnight bank deposits and bankers' acceptances of any Lender
Party having maturities of one year or less from the date of acquisition, (iii)
commercial paper of an issuer rated at least A-1 by Standard & Poor's Ratings
Group or P-1 by Xxxxx'x Investors Service, Inc., or carrying an equivalent
rating by a nationally recognized rating agency if both of the two named rating
agencies cease publishing ratings of investments, and (iv) repurchase agreements
and reverse repurchase agreements relating to marketable direct obligations
issued or unconditionally guaranteed by the United States Government or issued
by any agency thereof and backed by the full faith and credit of the United
States, in each case maturing within one year from the date of acquisition,
provided that (x) the terms of such agreements comply with the guidelines set
forth in the Federal Financial Agreements of Depository Institutions with
Securities and Others, as adopted by the Comptroller of the Currency and (y)
such agreements are entered into with the Agent or any Lender Party.
6
"Cash Interest Expense" means, for any Person for any period,
the Net Interest Expense of such Person for such period, plus (a) interest
expense capitalized for such period to the extent deducted in the determination
of such Net Interest Expense, less (b) Non-Cash Interest Expense of such Person
for such period.
"Cash Release Condition" means the occurrence of any of the
following: (i) the amount of the Available Credit exceeds $70,000,000 for a
period of five consecutive Business Days and (ii) no Default or Event of Default
has occurred and is continuing.
"Cash Release Condition Unwind" means the amount of the
Available Credit is less than or equal to $50,000,000 for a period of five
consecutive Business Days or a Default or Event of Default has occurred and is
continuing.
"Citibank" has the meaning specified in the recital of parties
to this Agreement.
"Citicorp" means Citicorp USA, Inc.
"Code" means the Internal Revenue Code of 1986 (or any
successor legislation thereto), as amended from time to time.
"Co-Generation Agreement" means that certain Energy Services
Agreement dated as of October 3, 1994 by and between Air Liquide America
Corporation (as successor to National Power Exchange Group, Inc. pursuant to the
Asset Purchase Agreement between Air Liquide America Corporation and National
Power Exchange Group, Inc. dated March 25, 1996) and the Borrower, as the same
may be amended, modified or supplemented from time to time.
"Collateral" means all "Collateral" referred to in the
Collateral Documents and all other property and interests in property and
proceeds thereof that is or is intended to be subject to a Lien in favor of the
Agent for the benefit of the Secured Parties.
"Collateral Documents" means the Holdings Pledge Agreement,
the Security Agreement, the Cash Collateral Account Agreement, the Blocked
Account Letter and any other document that creates or purports to create a Lien
in favor of the Agent for the benefit of the Secured Parties in connection with
the Loan Documents.
7
"Commitment" means as to any Lender, such Lender's Revolving
Credit Commitment and "Commitments" means the aggregate Revolving Credit
Commitments of all Lenders.
"Commitment Fee" has the meaning specified in Section 2.4(a).
"Computation Date" has the meaning assigned to it in Section
2.18.
"Concentration Account" has the meaning specified in the Cash
Collateral Account Agreement.
"Consolidated" refers to the consolidation of accounts in
accordance with GAAP.
"Contaminant" means any substance regulated or forming the
basis of liability under any Environmental Law, including, without limitation,
any waste, pollutant, hazardous substance, toxic substance, hazardous waste,
special waste, petroleum or petroleum-derived substance or waste, or any
constituent of such substance or waste.
"Contingent Obligation" means, as applied to any Person, any
direct or indirect liability, contingent or otherwise, of such Person with
respect to any Indebtedness or Contractual Obligation of another Person, if the
purpose or intent of such Person in incurring the Contingent Obligation is to
provide assurance to the obligee of such Indebtedness or Contractual Obligation
that such Indebtedness or Contractual Obligation will be paid or discharged, or
that any agreement relating thereto will be complied with, or that any holder of
such Indebtedness or Contractual Obligation will be protected (in whole or in
part) against loss in respect thereof. Contingent Obligations of a Person
include, without limitation, (a) the direct or indirect guarantee, endorsement
(other than for collection or deposit in the ordinary course of business),
co-making, discounting with recourse or sale with recourse by such Person of an
obligation of another Person, and (b) any liability of such Person for an
obligation of another Person through any agreement (contingent or otherwise) (i)
to purchase, repurchase or otherwise acquire such obligation or any security
therefor, or to provide funds for the payment or discharge of such obligation
(whether in the form of a loan, advance, stock purchase, capital contribution or
otherwise), (ii) to maintain the solvency or any balance sheet item, level of
income or financial condition of another Person, (iii) to make take-or-pay or
similar payments, if required, regardless of non-performance by any other party
or parties to an agreement, (iv) to purchase, sell or lease (as lessor or
lessee) property, or to purchase or sell services, primarily for the purpose of
enabling the debtor to make payment of such obligation or to assure the
8
holder of such obligation against loss, or (v) to supply funds to or in any
other manner invest in such other Person (including, without limitation, to pay
for property or services irrespective of whether such property is received or
such services are rendered), if in the case of any agreement described under
subclause (i), (ii), (iii), (iv) or (v) of this sentence the primary purpose or
intent thereof is as described in the preceding sentence. The amount of any
Contingent Obligation shall be equal to the amount of the obligation so
guaranteed or otherwise supported, except to the extent exposure of the
contingent obligor is expressly limited to a lesser amount.
"Contractual Obligation" of any Person means any obligation,
agreement, undertaking or similar provision of any security issued by such
Person or of any agreement, undertaking, contract, lease, indenture, mortgage,
deed of trust or other instrument to which such Person is a party or by which it
or any of its property is bound or to which any of its properties is subject.
"Default" means any event which with the passing of time or
the giving of notice or both would become an Event of Default.
"DOL" means the United States Department of Labor, or any
successor thereto.
"Dollars" and the sign "$" each mean the lawful money of the
United States of America.
"Domestic Lending Office" means, with respect to any Lender
Party, the office of such Lender Party specified as its "Domestic Lending
Office" opposite its name on Schedule III or in the Assignment and Acceptance
pursuant to which it became a Lender Party, as the case may be, or such other
office of such Lender Party as such Lender Party may from time to time specify
in writing to the Borrower and the Agent.
"EBITDA" means, for any Person for any period, the Net Income
(Loss) of such Person for such period taken as a single accounting period, plus
(a) the sum of the following amounts of such Person and its Subsidiaries for
such period determined on a consolidated basis in accordance with GAAP to the
extent included in the determination of such Net Income (Loss): (i) depreciation
expense, (ii) amortization expense, (iii) Net Interest Expense, (iv) income tax
expense, (v) extraordinary losses or losses on non-current asset sales or the
write-down of non-current assets and (vi) the amount of cash dividends or
distributions paid to such Person; less (b) the sum of the following amounts of
such Person and its Subsidiaries determined on a consolidated basis in
accordance with GAAP to the extent included in the determination of such Net
Income (Loss): (i) extraordinary gains or gains on non-current asset sales or
the write-
9
up of non-current assets, (ii) the Net Income (Loss) of any other Person that is
accounted for by the equity method of accounting and (iii) the Net Income (Loss)
of any other Person acquired by such Person or a Subsidiary of such Person in a
transaction accounted for as a pooling of interests for any period prior to the
date of such acquisition.
"Effective Date" means the first date that all of the
conditions contained in Article III are satisfied.
"Eligible Assignee" means (i) a Lender, (ii) any Affiliate of
a Lender, (iii) a commercial bank or finance company organized under the laws of
the United States of America, or any state thereof, and having total assets in
excess of $1,000,000,000; (iv) a commercial bank organized under the laws of any
other country which is a member of the Organization for Economic Cooperation and
Development ("OECD"), or a political subdivision of any such country, and having
total assets in excess of $3,000,000,000, provided that such bank is acting
though a branch or agency located in the country in which it is organized or
another country which is a member of the OECD; (v) the central bank of any
country which is a member of the OECD; and (vi) any other financial institution
approved in writing by the Borrower and the Agent as an Eligible Assignee for
purposes of this Agreement; provided that the Borrower's approval shall not be
unreasonably withheld. Without limitation on the foregoing, the Borrower may
withhold its consent of any such other financial institution if the proposed
assignment of any portion of any Lender Party's rights and obligations under
this Agreement to such other financial institution would materially increase the
amount of Taxes required to be deducted by the Borrower from or in respect of
any sum payable under the Loan Documents (determined as of the date on which
such other financial institution is proposed to become a Lender Party
hereunder).
"Eligible Inventory" means such of the Inventory of the
Borrower and the Guarantors valued at the lower of market or cost on a first in
first out basis as the Agent, in its sole discretion consistent with its
customary business practices and generally applicable criteria for comparable
secured financings, deems eligible, less all reserves as the Agent, in its sole
discretion consistent with its customary business practices and generally
applicable criteria for comparable secured financings, from time to time deems
appropriate. For the purposes of this definition, the Agent does not intend to
treat the following Inventory as eligible: (a) Inventory in transit, (b)
Inventory held by a bailee or Inventory held on leased premises where the
landlord thereof has not executed a waiver and financing statement in form and
substance satisfactory to the Agent and (c) Inventory subject to a Lien prior in
right to that of the Lien in favor of the Secured Parties or subject to any
other Lien not permitted by Section 7.1. Nothing contained in the preceding
sentence shall limit the Agent's right,
10
in its sole discretion consistent with its customary business practices and
generally applicable criteria for comparable secured financings, to treat any
item of Inventory as ineligible.
"Environmental Laws" means all federal, state and local laws, statutes,
ordinances and regulations, now or hereafter in effect, and in each case as
amended or supplemented from time to time, and any judicial or administrative
interpretation thereof, including, without limitation, any judicial or
administrative order, consent decree or judgment relating to the regulation and
protection of human health, safety, the environment or natural resources
(including, without limitation, ambient air, surface water, groundwater,
wetlands, land surface or subsurface strata, wildlife, aquatic species and
vegetation).
"Environmental Liabilities and Costs" means, as to any Person, all
liabilities, obligations, responsibilities, Remedial Actions, losses, damages,
punitive damages, consequential damages, treble damages, costs and expenses
(including, without limitation, all fees, disbursements and expenses of counsel,
experts and consultants, and costs of investigation and feasibility studies),
fines, penalties, sanctions and interest incurred (either as an expense or other
charge or as would be included on the liabilities side of the consolidated
balance sheet of such Person and its Subsidiaries or, if the amount and the
liability is fixed, in a footnote thereto) or reserved against as a result of
any claim or demand by any other Person, whether based in contract, tort,
implied or express warranty, strict liability, criminal or civil statute,
including, without limitation, any thereof arising under any Environmental Law,
Permit, order or agreement with any Governmental Authority or other Person, and
which relate to any environmental, health or safety condition, or a Release or
threatened Release, and result from the past, present or future operations of
such Person or any of its Subsidiaries.
"Environmental Lien" means any Lien in favor of any Governmental
Authority for Environmental Liabilities and Costs.
"ERISA" means the Employee Retirement Income Security Act of 1974 (or
any successor legislation thereto), as amended from time to time, and the
regulations promulgated and rulings issued thereunder.
"ERISA Affiliate" means any trade or business (whether or not
incorporated) under common control with any Loan Party or any of its
Subsidiaries within the meaning of Section 414 (b), (c), (m) or (o) of the Code.
11
"ERISA Event" means (i) a Reportable Event with respect to a Title IV
Plan or a Multiemployer Plan; (ii) the withdrawal of any Loan Party or any of
its Subsidiaries or any ERISA Affiliate from a Title IV Plan subject to Section
4063 of ERISA during a plan year in which it was a substantial employer, as
defined in Section 4001(a)(2) of ERISA; (iii) the complete or partial withdrawal
of any Loan Party or any of its Subsidiaries or any ERISA Affiliate from any
Multiemployer Plan; (iv) the filing of a notice of intent to terminate a Title
IV Plan or the treatment of a plan amendment as a termination under Section 4041
of ERISA; (v) the institution of proceedings to terminate a Title IV Plan or
Multiemployer Plan by the PBGC; (vi) the failure to make required contributions
to a Qualified Plan; (vii) any other event or condition which might reasonably
be expected to constitute grounds under Section 4042 of ERISA for the
termination of, or the appointment of a trustee to administer, any Title IV Plan
or Multiemployer Plan or the imposition of any liability under Title IV of
ERISA, other than PBGC premiums due but not delinquent under Section 4007 of
ERISA, excluding any such event or condition to the extent that the PBGC has,
prior to the date hereof, (A) waived any such termination, appointment or
imposition as a result of such event or condition and each of the Loan Parties
and their respective Subsidiaries and each of the ERISA Affiliates are in
compliance with all applicable requirements of any such waiver or (B) consented
to the occurrence of such event or the existence of such condition in
circumstances that could not reasonably be expected to result in any liability
of any Loan Party or any of its Subsidiaries or any ERISA Affiliate after the
date hereof; (viii) a prohibited transaction (as described in Section 4975 of
the Code or Section 406 of ERISA) that occurs with respect to any Plan; or (ix)
the request by any Loan Party, any of its Subsidiaries or any ERISA Affiliate
for a minimum funding waiver from the IRS with respect to any Pension 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.
"Eurodollar Lending Office" means, with respect to any Lender Party,
the office of such Lender specified as its "Eurodollar Lending Office" below its
name on Schedule III or in the Assignment and Acceptance pursuant to which it
became a Lender Party, as the case may be (or, if no such office is specified,
its Domestic Lending Office), or such other office of such Lender Party as such
Lender Party may from time to time specify in writing to the Borrower and the
Agent.
"Eurodollar Rate" means, for any Interest Period, an interest rate per
annum equal to the rate per annum obtained by dividing (a) the rate of interest
determined by the Agent to be the average (rounded upward to the nearest whole
multiple of 1/16 of 1% per annum, if such average is not such a multiple) of the
rate
per annum at which deposits in Dollars are offered by the principal office of
Citibank in London, England to prime banks in the London interbank market at
11:00 A.M. (London time) two Business Days before the first day for such
Interest Period in an amount substantially equal to the Eurodollar Rate Loan of
Citicorp during such Interest Period and for a period equal to such Interest
Period by (b) a percentage equal to 100% minus the Eurodollar Rate Reserve
Percentage for such Interest Period.
"Eurodollar Rate Loan" means any outstanding principal amount of the
Loans of any Lender Party that, for an Interest Period, bears interest at a rate
determined with reference to the Eurodollar Rate.
"Eurodollar Rate Reserve Percentage" for any Interest Period means the
reserve percentage applicable two Business Days before the first day of such
Interest Period under regulations issued from time to time by the Board of
Governors of the Federal Reserve System (or any successor) for determining the
maximum reserve requirement (including, without limitation, any emergency,
supplemental or other marginal reserve requirement) for a member bank of the
Federal Reserve System in New York City with respect to liabilities or assets
consisting of or including Eurocurrency Liabilities (or with respect to any
other category of liabilities which includes deposits by reference to which the
Eurodollar Rate is determined) having a term equal to such Interest Period.
"Event of Default" has the meaning specified in Section 8.1.
"Fabricating Joint Ventures" means, collectively, the joint ventures,
corporations or partnerships owned by Holdings, the Borrower or any Guarantor
(or a wholly owned Subsidiary of Holdings, the Borrower or any Guarantor ) which
may make acquisitions of businesses whose primary operations are fabricating,
coating or other processing of steel products.
"Fair Market Value" means (i) with respect to any asset (other than a
marketable security) at any date, the value of the consideration obtainable in a
sale of such asset at such date assuming a sale by a willing seller to a willing
purchaser dealing at arm's length and arranged in an orderly manner over a
reasonable period of time having regard to the nature and characteristics of
such asset or, if such asset shall have been the subject of a relatively
contemporaneous appraisal by an independent third party appraiser, the basic
assumptions underlying which have not materially changed since its date, as set
forth in such appraisal, and (ii) with respect to any marketable security at any
date, the closing sale price of such security on the business day (on which any
national securities exchange is open for the normal transaction of business)
next preceding such date, as appearing in any published list of any national
securities
13
exchange or in the National Market List of the National Association of
Securities Dealers, Inc. or, if there is no such closing sale price of such
security, the average of the asked and bid prices for the purchase of such
security at face value quoted on such business day by a financial institution of
recognized standing which regularly deals in securities of such type.
"Federal Funds Rate" means, for any period, a fluctuating interest rate
per annum equal for each day during such period to the weighted average of the
rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers, as published for such day (or,
if such day is not a Business Day, for the next preceding Business Day) by the
Federal Reserve Bank of New York, or, if such rate is not so published for any
day which is a Business Day, the average of the quotations for such day on such
transactions received by the Agent from three Federal funds brokers of
recognized standing selected by it.
"Fiscal Month" means one calendar month.
"Fiscal Quarter" means the three month period ending on March 31, June
30, September 30 or December 31.
"Fiscal Year" means the 12 month period ending on December 31.
"Funding" means Wheeling-Pittsburgh Funding, Inc., a Delaware special
purpose corporation and wholly owned Subsidiary of the Borrower.
"GAAP" means generally accepted accounting principles in the United
States of America as in effect from time to time as set forth in the opinions
and pronounce ments of the Accounting Principles Board and the American
Institute of Certified Public Accountants and the statements and pronouncements
of the Financial Accounting Standards Board, which are applicable to the
circumstances as of the date of determination except that, for purposes of
Article V, GAAP shall be determined on the basis of such principles in effect on
the date hereof and consistent with those used in the preparation of the audited
financial statements referred to in Section 4.5.
"Governmental Authority" means any nation or government, any state or
other political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government.
"Guarantor" means any of PCC or Wheeling Construction, and such other
permitted Subsidiaries of the Borrower or any other Guarantor that may become a
14
party to the Guaranty in the future, as required by the Agent in accordance with
Section 7.12.
"Guarantor Intercompany Notes" means intercompany notes made by the
Guarantors in favor of the Borrower in substantially the form of Exhibit N.
"Guaranty" means the amended and restated guaranty executed by each of
the Guarantors, substantially in the form of Exhibit I, as such guaranty may be
amended, supplemented or otherwise modified from time to time.
"Holdings" has the meaning specified in the Preliminary Statements.
"Holdings Guaranty" means the amended and restated guaranty executed by
Holdings, substantially in the form of Exhibit G, as such guaranty may be
amended, supplemented or otherwise modified from time to time.
"Holdings Intercreditor Agreement" means the amended and restated
intercreditor agreement executed by WHX, Holdings, the Borrower and the Agent,
in substantially the form of Exhibit L as such agreement may be amended,
supplemented or otherwise modified from time to time.
"Holdings IPO" means the initial public offering of Stock of Holdings
(including a sale of such Stock held by WHX pursuant to a registration statement
filed under the Securities Act of 1933).
"Holdings IPO Threshold" means that not less than 50% of the issued and
outstanding Stock of Holdings shall have been sold to Persons other than WHX and
its Affiliates pursuant to the Holdings IPO.
"Holdings Note" means those certain notes, each dated as of October 24,
1994, of the Borrower in favor of Holdings in the aggregate principal amount of
$301,974,000 (as of March 31, 1999).
"Holdings Pledge Agreement" means the amended and restated pledge
agreement executed by Holdings, substantially in the form of Exhibit H, as such
pledge agreement may be amended, supplemented or otherwise modified from time to
time.
"Indebtedness" of any Person means (i) all indebtedness of such Person
for borrowed money (including, without limitation, reimbursement and all other
obligations with respect to surety bonds, letters of credit and bankers'
acceptances, whether or not matured) or for the deferred purchase price of
property or services,
15
(ii) all obligations of such Person evidenced by notes, bonds, debentures or
similar instruments, (iii) all indebtedness of such Person created or arising
under any conditional sale or other title retention agreement with respect to
property acquired by such Person (even though the rights and remedies of the
seller or lender under such agreement in the event of default are limited to
repossession or sale of such property), (iv) all Capitalized Lease Obligations
of such Person, (v) all Contingent Obligations of such Person, (vi) all
obligations of such Person to purchase, redeem, retire, defease or otherwise
acquire for value any Stock or Stock Equivalent of such Person, valued, in the
case of redeemable preferred stock, at the greater of its voluntary or
involuntary liquidation preference plus accrued and unpaid dividends, (vii) all
obligations of such Person under any interest rate contract, (viii) all
Indebtedness referred to in clause (i), (ii), (iii), (iv), (v), (vi) or (vii)
above secured by (or for which the holder of such Indebtedness has an existing
right, contingent or otherwise, to be secured by) any Lien upon or in property
(including, without limitation, Accounts and general intangibles) owned by such
Person, even though such Person has not assumed or become liable for the payment
of such Indebtedness, and (ix) in the case of the Borrower, the Obligations.
"Indemnitee" has the meaning specified in Section 10.4.
"Indentures" means (a) the Replacement Indenture and (b) the Term Loan
Agreement.
"Interest Coverage Ratio" means, for each Fiscal Quarter and determined
on the basis of the four Fiscal Quarters ending on the date of determination, a
ratio of (a) EBITDA of the Loan Party Consolidated Group to (b) Cash Interest
Expense of the Loan Party Consolidated Group plus the aggregate "Discount
Amount" (under and as defined in each Supplement included in the Securitization
Documents) for such period.
"Interest Period" means (a) initially, the period commencing on the
date a Eurodollar Rate Loan is made or on the date of conversion of a Base Rate
Loan to a Eurodollar Rate Loan and ending three months thereafter and (b)
thereafter, if such Loan is continued, in whole or in part, as a Eurodollar Rate
Loan pursuant to Section 2.9, the period commencing on the last day of the
immediately preceding Interest Period therefor and ending three months
thereafter; provided, however, that:
(A) if any Interest Period would otherwise end on a day which is not a
Business Day, such Interest Period shall be extended to the next
succeeding Business Day, unless the result of such extension would be to
extend such
16
Interest Period into another calendar month, in which event such Interest
Period shall end on the immediately preceding Business Day;
(B) any Interest Period that begins on the last Business Day of a
calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest
Period) shall end on the last Business Day of a calendar month;
(C) the Borrower may not select any Interest Period which ends after
the Termination Date;
(D) the Borrower may not select any Interest Period in respect of Loans
having an aggregate principal amount of less than $5,000,000; and
(E) there shall be outstanding at any one time no more than seven
Interest Periods in the aggregate.
"Interest Rate Contract" means interest rate swap, cap or collar
agreements and interest rate future or option contracts and similar agreements.
"Inventory" has the meaning specified in the Security Agreement.
"Investment" has the meaning specified in Section 7.6.
"Investment Account" has the meaning specified in the Cash Collateral
Account Agreement.
"IRS" means the Internal Revenue Service, or any successor thereto.
"Issuer" means each Person listed on Schedule I.
"Keepwell Agreement" means the amended and restated agreement, executed
by each of WHX, Holdings and the Borrower, substantially in the form of Exhibit
K, as such agreement may be amended, supplemented or otherwise modified from
time to time.
"Keepwell Payments" has the meaning specified in the Keepwell
Agreement.
"L/C Cash Collateral Account" has the meaning specified in Section 8.3.
17
"Leases" means, with respect to the Borrower, any Guarantor or any of
their Subsidiaries, all of those leasehold estates in real property now owned as
lessee or hereafter acquired including, without limitation, those listed on
Schedule 4.21(b), as such may be amended, supplemented or otherwise modified
from time to time to the extent permitted by this Agreement.
"Lender Party" means any Lender, any Issuer or the Swing Bank.
"Letter of Credit" means any letter of credit issued for the account of
the Borrower or any of its Subsidiaries by an Issuer pursuant to Section 2.17.
"Letter of Credit Agreement" means the agreement, dated as of August
24, 1994, among the Borrower and Citibank, as issuer, as such agreement may be
amended, supplemented or otherwise modified from time to time.
"Letter of Credit Obligations" means, at any time, all liabilities at
such time of the Borrower to all Issuers with respect to Letters of Credit,
whether or not any such liability is contingent, and includes the sum of (i) the
Reimbursement Obligations at such time and (ii) the Letter of Credit Undrawn
Amounts at such time.
"Letter of Credit Reimbursement Agreement" has the meaning specified in
Section 2.17(c).
"Letter of Credit Request" has the meaning specified in Section
2.17(d).
"Letter of Credit Undrawn Amounts" means, at any time, the aggregate
undrawn face amount of all Letters of Credit outstanding at such time.
"Lien" means any mortgage, deed of trust, pledge, hypothecation,
assignment, deposit arrangement, encumbrance, lien (statutory or other),
security interest or other similar kind of preference, priority or security
agreement or preferential arrangement, including, without limitation, any
conditional sale or other title retention agreement, the interest of a lessor
under a Capitalized Lease Obligation, any financing lease having substantially
the same economic effect as any of the foregoing, and the filing, under the UCC
or comparable law of any jurisdiction, of any financing statement naming the
owner of the asset to which such Lien relates as debtor (other than a filing
which does not evidence an outstanding secured obligation, a commitment to make
advances, incur obligations or otherwise give value).
"Loan" means a Revolving Credit Loan or a Swing Loan made by a Lender
to the Borrower pursuant to Article II.
18
"Loan Documents" means, collectively, this Agreement, the Revolving
Credit Notes, the Keepwell Agreement, each Letter of Credit Reimbursement
Agreement, the Holdings Intercreditor Agreement, the Securitization
Intercreditor Agreement, the Guarantor Intercompany Notes and the Collateral
Documents.
"Loan Party" means each of the Borrower, each Guarantor, Holdings and
each Subsidiary or Affiliate of the Borrower (other than WHX) which executes and
delivers a Loan Document.
"Loan Party Consolidated Group" means each Loan Party and its
Subsidiaries.
"Majority Lenders" means, at any time, Lenders holding at least 51% of
the aggregate of the Revolving Credit Commitments at such time.
"Material Adverse Change" means a material adverse change in any of (i)
the condition (financial or otherwise), business, performance, prospects,
operations or properties of Holdings, the Borrower, the Guarantors and their
respective Subsidiaries taken as one enterprise, (ii) the legality, validity or
enforceability of any Loan Document, (iii) the perfection or priority of the
Liens granted pursuant to the Collateral Documents, other than solely by reason
of action by the Agent or the Lender Parties, (iv) the ability of the Borrower
to repay the Obligations or of any Loan Party to perform its obligations under
any Loan Document in any material respects or (v) the rights and remedies of the
Lender Parties or the Agent under the Loan Documents; provided that any such
change related to matters described in Section 4.16(a), (b), (e), (f) and (g)
shall not constitute a Material Adverse Change at any time that the Available
Credit plus the aggregate amount then on deposit in the Concentration Account,
the Investment Account and the L/C Cash Collateral Account, is equal to or
greater than $50,000,000.
"Material Adverse Effect" means an effect that has a reasonable
likelihood of resulting in or causing a material adverse change in any of (i)
the condition (financial or otherwise), business, performance, prospects,
operations or properties of Holdings, the Borrower, the Guarantor and their
respective Subsidiaries taken as one enterprise, (ii) the legality, validity or
enforceability of any Loan Document, (iii) the perfection or priority of the
Liens granted pursuant to the Collateral Documents, other than solely by reason
of action by the Agent or the Lender Parties, (iv) the ability of the Borrower
to repay the Obligations or of any Loan Party to perform its obligations under
any Loan Document in any material respects or (v) the rights and remedies of the
Lender Parties or the Agent under the Loan Documents; provided that any such
effect related to matters described in Section 4.16(a), (b), (e),
19
(f) and (g) shall not constitute a Material Adverse Effect at any time that the
Available Credit plus the aggregate amount then on deposit in the Concentration
Account, the Investment Account and the L/C Cash Collateral Account, is equal to
or greater than $50,000,000.
"Material Contractual Obligation" of any Person means such Person's
Contractual Obligations in respect of Indebtedness of the types described in
clauses (i) and (ii) of the definition of "Indebtedness" and each other
Contractual Obligation that is material to the business, prospects, operations
or financial condition of such Person.
"Multiemployer Plan" means a multiemployer plan, as defined in Section
4001(a)(3) of ERISA, and to which the Borrower, any of its Subsidiaries or any
ERISA Affiliate is making, is obligated to make, has made or been obligated to
make, contributions on behalf of participants who are or were employed by any of
them.
"Net Income (Loss)" means, for any Person for any period, the aggregate
net income (or loss) from continuing operations of such Person and its
Subsidiaries for such period, determined on a consolidated basis in accordance
with GAAP.
"Net Interest Expense" means, for any Person for any period, (i) gross
interest expense of such Person and its Subsidiaries for such period determined
on a consolidated basis in accordance with GAAP, less (ii) the following for
such Person and its Subsidiaries determined on a consolidated basis determined
in accordance with GAAP: the sum of (1) interest capitalized during construction
for such period, (2) interest income for such period, and (3) gains for such
period on Interest Rate Contracts (to the extent not included in interest income
above and to the extent not deducted in the calculation of such gross interest
expense), plus (iii) the following for such Person and its Subsidiaries
determined on a consolidated basis in accordance with GAAP: the sum of (1)
losses for such period on Interest Rate Contracts (to the extent not included in
gross interest expense), (2) upfront costs or fees for such period associated
with Interest Rate Contracts (to the extent not included in gross interest
expense) and (3) the aggregate "Discount Amount" (under and as defined in each
Supplement included in the Securitization Documents) for such period.
"Net Worth" of any Person means, at any date, the excess of (a) the
Total Assets of such Person at such date over (b) the Total Liabilities of such
Person at such date minus the aggregate principal amount of Parent Loans
received by such Person and outstanding at such date minus, in the case of the
Borrower, the aggregate amount of Keepwell Payments that are designated as loans
or advances made on behalf of such Person on or prior to such date.
20
"Non-Cash Interest Expense" means, for any Person for any period, the
sum of the following amounts to the extent included in Net Interest Expense of
such Person for such period: (i) the amount of amortized debt discount and (ii)
charges relating to write-ups or write-downs in the book or carrying value of
existing Indebtedness.
"Notice of Borrowing" has the meaning specified in Section 2.3(a).
"Notice of Continuation or Conversion" has the meaning specified in
Section 2.8.
"Obligations" means the Loans, the Letter of Credit Obligations and,
all other advances, debts, liabilities, obligations, covenants and duties owing
by any Loan Party to the Agent, any Lender Party, any Affiliate of any of them
or any Indemnitee, of every type and description, present or future, whether or
not evidenced by any note, guaranty or other instrument, arising under this
Agreement, under any other Loan Document or under any agreement of the type
described in clause (iv) of the definition of Cash Equivalents, whether or not
for the payment of money, whether arising by reason of an extension of credit,
opening or amendment of a Letter of Credit or payment of any draft drawn
thereunder, loan, guaranty, indemnification, foreign exchange transaction,
interest rate contract, commodity contract or in any other manner, whether
direct or indirect (including, without limitation, those acquired by
assignment), absolute or contingent, due or to become due, now existing or
hereafter arising and however acquired. The term "Obligations" includes, without
limitation, all interest, charges, expenses, fees, attorneys' fees and
disbursements and any other sum chargeable to the Borrower under this Agreement
or any other Loan Document.
"Original Credit Agreement" has the meaning specified in the recitals
hereto.
"Other Taxes" has the meaning specified in Section 2.15(b).
"Parent Loans" means intercompany loans in the form of cash advances
made by WHX from time to time, since December 31, 1998, to the Borrower or any
of the Guarantors.
"PBGC" means the Pension Benefit Guaranty Corporation, or any successor
thereto.
"PCC" means Pittsburgh-Xxxxxxxx Corporation, a Pennsylvania corporation
wholly owned by Holdings.
21
"Pension Plan" means an employee pension benefit plan, as defined in
Section 3(2) of ERISA, which is not an individual account plan, as defined in
Section 3(34) of ERISA, and which the Borrower or any of its Subsidiaries or, if
a Title IV Plan, any ERISA Affiliate maintains, contributes to or has an
obligation to contribute to on behalf of participants who are or were employed
by any of them.
"Performance Level" means, as of any date, the level set forth below
then in effect, as determined in accordance with the following provisions of
this definition:
================================================================================
Performance Level Interest Coverage Ratio
I Greater than 5.00:1.00
--------------------------------------------------------------------------------
II Less than or equal to 5.00:1.00 but
greater than 4.00:1.00
--------------------------------------------------------------------------------
III Less than or equal to 4.00:1.00 but
greater than 2.50:1.00
--------------------------------------------------------------------------------
IV Less than or equal to 2.50:1.00
================================================================================
For the purposes of this definition, the Performance Level shall be determined
by reference to the financial statements delivered pursuant to Sections 6.10(b)
or (c); changes in the Performance Level shall become effective on the first day
of the month next succeeding the date on which such financial statements are
delivered to the Lender Parties and shall remain in effect until the next change
to be effected pursuant to this definition.
"Permit" means any permit, approval, authorization, license, variance
or permission required from a Governmental Authority under an applicable
Requirement of Law.
"Permitted Liens" means Liens permitted by Section 7.1(a), (d), (e),
(q) and (r).
"Person" means an individual, partnership, corporation (including,
without limitation, a business trust), limited liability company, joint stock
company, trust, unincorporated association, joint venture or other entity, or a
Governmental Authority.
22
"Plan" means an employee benefit plan, as defined in Section 3(3) of
ERISA, which the Borrower or any of its Subsidiaries maintains, contributes to
or has an obligation to contribute to on behalf of participants who are or were
employed by any of them.
"Projections" means those financial projections dated March 25, 1999
covering the Fiscal Years ending in 1999, 2000, 2001, 2002 and 2003, delivered
to the Lender Parties by the Borrower.
"Qualified Plan" means an employee pension benefit plan, as defined in
Section 3(2) of ERISA, which is intended to be tax-qualified under Section
401(a) of the Code, and which the Borrower, any of its Subsidiaries or any ERISA
Affiliate maintains, contributes to or has an obligation to contribute to on
behalf of participants who are or were employed by any of them.
"Ratable Portion" or ratably means, with respect to any Lender Party,
the following: (i) in the case of principal and interest, the quotient obtained
by dividing the aggregate principal amount of all Loans held by such Lender
Party by the aggregate principal amount of all Loans held by all Lender Parties
and (ii) in all other cases, the quotient obtained by dividing the principal
amount of the Revolving Credit Commitment of such Lender by the aggregate
principal amount of all Revolving Credit Commitments of all Lenders.
"Real Estate" means all of those plots, pieces or parcels of land now
owned or hereafter acquired by the Borrower, any Guarantor or any of their
Subsidiaries (the "Land"), including, without limitation, those listed on
Schedule 4.21(a), together with the right, title and interest of the Borrower,
such Guarantor or such Subsidiary, if any, in and to the streets, the land lying
in the bed of any streets, roads or avenues, opened or proposed, in front of,
adjoining or abutting the Land to the center line thereof, the air space and
development rights pertaining to the Land and the right to use such air space
and development rights, all rights of way, privileges, liberties, tenements,
hereditaments and appurtenances belonging or in any way appertaining thereto,
all fixtures, all easements now or hereafter benefitting the Land and all
royalties and rights appertaining to the use and enjoyment of the Land,
including, without limitation, all alley, vault, drainage, mineral, water, oil
and gas rights, together with all of the buildings and other improvements now or
hereafter erected on the Land, and any fixtures appurtenant thereto.
"Receivables Securitization" means the program pursuant to which the
Borrower sells, transfers or otherwise conveys certain of its accounts
receivables, together with the accounts receivables of the Guarantors and
certain other Affiliates of
23
the Borrower from time to time, to Funding for inclusion in Funding's
receivables securitization program, as the same may be modified, amended,
replaced, renewed or otherwise substituted pursuant to a similar financing or
sale arrangement.
"Register" has the meaning specified in Section 10.7.
"Reimbursement Obligations" means all reimbursement or repayment
obligations of the Borrower to Issuers with respect to Letters of Credit
pursuant to Letter of Credit Reimbursement Agreements.
"Release" means, as to any Person, any release, spill, emission,
leaking, pumping, injection, deposit, disposal, discharge, dispersal, leaching
or migration into the indoor or outdoor environment or into or out of any
property owned by such Person, including, without limitation, the movement of
Contaminants through or in the air, soil, surface water, ground water or
property.
"Remedial Action" means all actions required to (i) clean up, remove,
treat or in any other way address Contaminants in the indoor or outdoor
environment, (ii) prevent the Release or threat of Release or minimize the
further Release of Contaminants so they do not migrate or endanger or threaten
to endanger public health or welfare or the indoor or outdoor environment, or
(iii) perform pre-remedial studies and investigations and post-remedial
monitoring and care.
"Replacement Indenture" means the indenture, dated as of November 26,
1997, among Holdings, the guarantors named on the signature pages thereof and
Bank One, N.A., as trustee, pursuant to which the Replacement Notes have been
issued, as the same may be amended, supplemented or modified from time to time.
"Replacement Notes" means Holding's 9 1/4% Senior Notes due 2007 issued
pursuant to the Replacement Indenture, as amended prior to the Effective Date.
"Reportable Event" means any event described in Section 4043(c) of
ERISA.
"Requirement of Law" means, as to any Person, the certificate of incor
poration and by-laws or other organizational or governing documents of such
Person, and all federal, state and local laws, rules and regulations, including,
without limitation, federal, state or local securities laws, ERISA and
Environmental Laws, and the disclosure requirements thereof and all orders,
judgments, decrees or other determinations of any Governmental Authority or
arbitrator, applicable to or binding
24
upon such Person or any of its property or to which such Person or any of its
property is subject.
"Responsible Officer" means, with respect to any Person, any of the
principal executive officers of such Person.
"Revolving Credit Borrowing" means a borrowing consisting of Revolving
Credit Loans made on the same day by the Lenders ratably according to their
respective Revolving Credit Commitments.
"Revolving Credit Commitment" means, as to each Lender, the commitment
of such Lender to make Revolving Credit Loans to the Borrower pursuant to
Section 2.1 in the aggregate principal amount outstanding not to exceed the
amount set forth opposite such Lender's name on Schedule II under the caption
"Revolving Credit Commitment" or, if such Lender has entered into one or more
Assignments and Acceptances, set forth in the Register maintained by the Agent
pursuant to Section 10.7 as such Lender's "Revolving Credit Commitment", as such
amount may be reduced or modified pursuant to this Agreement.
"Revolving Credit Loan" means a Loan made by a Lender to the Borrower
pursuant to Section 2.1.
"Revolving Credit Note" means a promissory note of the Borrower payable
to the order of any Lender in a principal amount equal to the amount of such
Lender's Revolving Credit Commitment as originally in effect, in substantially
the form of Exhibit A, evidencing the aggregate Indebtedness of the Borrower to
such Lender resulting from the Revolving Credit Loans made by such Lender.
"Secured Parties" means the Lender Parties and the Agent.
"Securitization Documents" means each agreement, document and
instrument entered into by the Borrower, any Guarantor or Funding in connection
with the Receivables Securitization, including without limitation, the
Receivables Purchase Agreement executed by the Borrower and Funding and the
subordinated promissory note of Funding in favor of the Borrower made in
connection therewith and the Securitization Intercreditor Agreement.
"Securitization Intercreditor Agreement" means the intercreditor
agreement executed by Citicorp USA, Inc., as Program Agent, the Borrower, PCC,
Wheeling Construction, Funding, Bank One, Columbus, N.A., as Trustee, and the
25
Agent, in substantially the form of Exhibit P as such agreement may be amended,
supplemented or otherwise modified from time to time.
"Security Agreement" means the amended and restated security agreement,
dated as of the date hereof, executed by the Borrower and each Guarantor,
substantially in the form of Exhibit J, as such agreement may be further
amended, supplemented or otherwise modified from time to time.
"Senior Secured Debt" means Indebtedness secured by a Permitted Lien.
"Settlement Date" has the meaning assigned to it in Section 2.18.
"Solvent" means, with respect to any Person, that the value of the
assets of such Person (both at fair value and present fair saleable value) is,
on the date of determination, greater than the total amount of liabilities
(including, without limitation, contingent and unliquidated liabilities) of such
Person as of such date and that, as of such date, such Person is able to pay all
liabilities of such Person as such liabilities mature and does not have
unreasonably small capital. In computing the amount of contingent or
unliquidated liabilities at any time, such liabilities will be computed at the
amount which, in light of all the facts and circumstances existing at such time,
represents the amount that can reasonably be expected to become an actual or
matured liability.
"Stock" means shares of capital stock, beneficial or partnership
interests, participations or other equivalents (regardless of how designated) of
or in a corporation or equivalent entity, whether voting or non-voting, and
includes, without limitation, common stock and preferred stock.
"Stock Equivalents" means all securities convertible into or
exchangeable for Stock and all warrants, options or other rights to purchase or
subscribe for any Stock, whether or not presently convertible, exchangeable or
exercisable.
"Subsidiary" means, with respect to any Person, any corporation,
partnership, limited liability company, or other business entity of which an
aggregate of more than 50% of the outstanding Stock having ordinary voting power
to elect a majority of the board of directors, managers, trustees or other
controlling persons, is, at the time, directly or indirectly, owned by such
Person and/or one or more Subsidiaries of such Person (irrespective of whether,
at the time, Stock of any other class or classes of such entity shall have or
might have voting power by reason of the happening of any contingency).
26
"Swing Bank" means Citicorp or such other Lender who shall also be the
Agent or who shall agree with the Agent to act as Swing Bank.
"Swing Loan" means a Loan made by the Swing Bank to the Borrower
pursuant to Section 2.2.
"Swing Loan Borrowing" means a Borrowing consisting of a Swing Loan.
"Tangible Net Worth" of any Person means, at any date, the Net Worth of
such Person at such date, excluding (i) any noncash effects of adopting the
accounting principles described in FAS No. 87, FAS No. 88 and any subsequent FAS
promulgated by the Financial Accounting Standards Board addressing pensions,
(ii) all unamortized financing costs or unamortized debt discount and expense
and (iii) all intangibles and deferred charges other than for taxes, pensions
and cash escrow.
"Tax Affiliate" means, as to any Person, (i) any Subsidiary of such
Person, and (ii) any Affiliate of such Person with which such Person filed,
files or is eligible to file consolidated, combined or unitary tax returns.
"Tax Return" has the meaning specified in Section 4.3.
"Tax Sharing Agreement" means the agreement, dated as of April 12,
1991, between the Borrower and Holdings, as modified by the Contribution and
Assumption Agreement dated as of July 26, 1994 between WHX and Holdings and by
the Tax Sharing Agreement, dated as of July 26, 1994, between WHX and Holdings,
as such agreement may be further amended, supplemented or otherwise modified
from time to time.
"Taxes" has the meaning specified in Section 2.15(a).
"Term Loan Agreement" means the Term Loan Agreement dated as of
November 26, 1997 among Holdings, various financial institutions, DLJ Capital
Funding, Inc. and Citicorp USA, Inc., as amended by Amendment No. 1 dated as of
December 31, 1997 and as the same may be further amended, supplemented or
otherwise modified form time to time.
"Termination Date" means the earlier of (i) May 3, 2003 and (ii) the
date of termination in whole of the Revolving Credit Commitments pursuant to
Section 2.5 or 8.2.
27
"Title IV Plan" means a Pension Plan, other than a Multiemployer Plan,
which is covered by Title IV of ERISA.
"Total Assets" of any Person means, at any date, the total assets of
such Person and its Subsidiaries at such date, determined on a consolidated
basis in accordance with GAAP.
"Total Liabilities" of any Person means, at any date, all obligations
which in accordance with GAAP would be included in determining total liabilities
as shown on the liabilities side of a consolidated balance sheet of such Person
and its Subsidiaries at such date.
"UCC" shall have the meaning assigned to it in the Security Agreement.
"Unfunded Pension Liability" means, as to the Borrower at any time, the
aggregate amount, if any, of the sum of (i) the amount by which the present
value of all accrued benefits under each Title IV Plan exceeds the fair market
value of all assets of such Title IV Plan allocable to such benefits in
accordance with Title IV of ERISA, all determined as of the most recent
valuation date for each such Title IV Plan using the actuarial assumptions in
effect under such Title IV Plan, and (ii) for a period of five years following a
transaction reasonably likely to be covered by Section 4069 of ERISA, the
liabilities (whether or not accrued) that could be avoided by the Borrower, the
Borrower's Subsidiaries and all ERISA Affiliates as a result of such
transaction.
"USWA Right of First Refusal" shall mean the right of first refusal
granted by Holdings and the Borrower pursuant to an agreement, dated as of
August 12, 1997, between Holdings, the Borrower and the United Steelworkers of
America, AFL-CIO-CLC and any agreements ancillary thereto or amendments,
renewals or modifications thereof.
"Welfare Benefit Plan" means an employee welfare benefit plan, as
defined in Section 3(1) of ERISA, which the Borrower or any of its Subsidiaries
maintains, contributes to, has contributed to within the six year period
preceding the Effective Date or has an obligation to contribute to on behalf of
their respective former or active employees (or their beneficiaries).
"Wheeling Construction" means Wheeling Construction Products, Inc., a
Delaware corporation wholly owned by Holdings.
28
"Wheeling-Nisshin" means Wheeling-Nisshin, Inc., a Delaware
corporation, all the outstanding Stock and Stock Equivalents of which is owned
by Holdings and Nisshin Steel Co., Ltd.
"WHX" has the meaning specified in the Preliminary Statements.
"Withdrawal Liability" means, as to the Borrower, at any time, the
aggregate amount of the liabilities of the Borrower, the Borrower's Subsidiaries
or any ERISA Affiliate pursuant to Section 4201 of ERISA, and any increase in
contributions required to be made pursuant to Section 4243 of ERISA, with
respect to all Multiemployer Plans.
1.2. Computation of Time Periods. In this Agreement, in the computation
of periods of time from a specified date to a later specified date, the word
"from" means "from and including" and the words "to" and "until" each mean "to
but excluding" and the word "through" means "to and including".
1.3. Accounting Terms. All accounting terms not specifically defined
herein shall be construed in accordance with GAAP and all accounting
determinations required to be made pursuant hereto shall, unless expressly
otherwise provided herein, be made in accordance with GAAP.
1.4. Certain Terms. (a) The words "herein," "hereof" and "hereunder"
and other words of similar import refer to this Agreement as a whole, and not to
any particular Article, Section, subsection or clause in this Agreement.
References herein to an Exhibit, Schedule, Article, Section, subsection or
clause refer to the appropriate Exhibit or Schedule to, or Article, Section,
subsection or clause in this Agreement.
(b) The terms "Lender", "Issuer" and "Agent" include their respective
successors and the term "Lender" includes each assignee of such Lender who
becomes a party hereto pursuant to Section 10.7.
ARTICLE II
AMOUNTS AND TERMS OF THE LOANS
2.1. The Revolving Credit Loans. On the terms and subject to the
conditions contained in this Agreement, each Lender severally agrees to make
Revolving Credit Loans to the Borrower from time to time on any Business Day
during the period from the Effective Date until the Termination Date in an
aggregate amount not to exceed at any time outstanding such Lender's Revolving
Credit Commitment;
29
provided, however, that at no time shall any Lender be obligated to make a
Revolving Credit Loan in excess of such Lender's Ratable Portion of the
Available Credit. In addition, each Lender agrees to make Revolving Credit Loans
in accordance with Section 2.18. Within the limits of each Lender's Revolving
Credit Commitment, amounts prepaid pursuant to Section 2.7(c) may be reborrowed
under this Section 2.1. The Revolving Credit Loans of each Lender shall be
evidenced by a Revolving Credit Note to the order of such Lender.
2.2. The Swing Loans. The Swing Bank, in its sole discretion, on the
terms and subject to the conditions contained in this Agreement, may make loans
(each a "Swing Loan") to the Borrower from time to time on any Business Day
during the period from the date hereof until the Termination Date (i) in an
aggregate amount not to exceed at any time outstanding $20,000,000 and (ii) in
an amount for each Swing Loan Borrowing not to exceed the Available Credit of
the Lenders at such time. The Swing Bank shall be entitled to rely on the most
recent Borrowing Base Certificate delivered to the Agent.
2.3. Making the Loans. (a) Except as provided for in Sections 2.4(a),
2.9(b), 2.17(h) and 2.18, each Revolving Credit Borrowing shall be made on
notice, given by the Borrower to the Agent (x) in the case of a Revolving Credit
Borrowing requested to refinance a Swing Loan, not later than 12:00 P.M. (New
York City time) on one Business Day prior to the date of the proposed Revolving
Credit Borrowing and (y) in the case of a Revolving Credit Borrowing requested
as a direct advance to the Borrower, not later than 11:00 A.M. (New York City
time) on the date of the proposed Revolving Credit Borrowing. Each such notice
shall be executed by an officer of the Borrower indicated on Schedule 2.3 or
such other persons as agreed to, in writing, by the Agent (a "Notice of
Borrowing"), which notice shall be in substantially the form of Exhibit B,
specifying therein (i) the date of such proposed Borrowing, (ii) the aggregate
amount of such proposed Borrowing and (iii) a statement that the proposed
Borrowing does not exceed the Available Credit. The Revolving Credit Loans shall
be made as Base Rate Loans.
(b) Each Swing Loan Borrowing shall be made on notice, given by the
Borrower to the Swing Bank not later than 12:00 P.M. (New York City time) on the
Business Day of the proposed Swing Loan Borrowing. All Swing Loans shall be made
as Base Rate Loans.
(c) The Agent shall give to each Lender prompt notice of the Agent's
receipt of a Notice of Borrowing. Each Lender shall, (x) in the case of a
Revolving Credit Borrowing requested to refinance a Swing Loan, before 12:00
P.M. (New York City time) and (y) in the case of a Revolving Credit Loan
requested as a direct advance
30
to the Borrower, before 2:00 P.M. (New York City time), in each case on the date
of the proposed Borrowing, make available for the account of its Applicable
Lending Office to the Agent's Account, in immediately available funds, such
Lender's Ratable Portion of such proposed Revolving Credit Borrowing. After the
Agent's receipt of such funds and upon fulfillment of the applicable conditions
set forth in Article III, the Agent will promptly make such funds available to
the Borrower at the Agent's aforesaid address. In determining whether such
applicable conditions have been satisfied, the Agent shall be entitled to rely
on the most recent Borrowing Base Certificate received from the Borrower.
(d) Each Revolving Credit Borrowing shall be in an aggregate amount of
not less than $100,000. Each Swing Loan shall be in the amount of not less than
$100,000 unless a lower amount is permitted by the Swing Bank in its sole
discretion from time to time.
(e) Each Notice of Borrowing shall be irrevocable and binding on the
Borrower.
(f) Unless the Agent shall have received notice from a Lender prior to
the date of any proposed Revolving Credit Borrowing that such Lender will not
make available to the Agent such Lender's Ratable Portion of such Revolving
Credit Borrowing, the Agent may assume that such Lender has made such Ratable
Portion of the proposed Revolving Credit Borrowing available to the Agent on the
date of such Borrowing in accordance with this Section 2.3 and the Agent may, in
reliance upon such assumption, make available to the Borrower on such date a
corresponding amount. If and to the extent that such Lender shall not have so
made such portion available to the Agent, such Lender and the Borrower severally
agree to repay to the Agent forthwith on the next Business Day following the day
on which the Lender does not make such portion available such corresponding
amount together with interest thereon, for each day from the date such amount is
made available to the Borrower until the date such amount is repaid to the
Agent, at (i) in the case of the Borrower, the interest rate applicable at the
time to the Revolving Credit Loans comprising such Borrowing and (ii) in the
case of such Lender, the Federal Funds Rate. If such Lender shall repay to the
Agent such corresponding amount, such amount so repaid shall constitute such
Lender's Loan as part of such Borrowing for purposes of this Agreement. If the
Borrower shall repay to the Agent such corresponding amount, such payment shall
not relieve such Lender of any obligation it may have to the Borrower hereunder.
(g) The failure of any Lender to make the Loan to be made by it as part
of any Borrowing shall not relieve any other Lender of its obligation, if any,
hereunder to make its Loan on the date of such Borrowing, but no Lender shall be
31
responsible for the failure of any other Lender to make the Loan to be made by
such other Lender on the date of any Borrowing.
2.4. Fees. (a) The Borrower agrees to pay to the Agent for the benefit
of each Lender a commitment fee (the "Commitment Fee") on the daily unused
portion of such Lender's Revolving Credit Commitment from the date hereof until
the Termination Date at a rate per annum determined by reference to the
Applicable Percentage, payable in arrears on (i) the first day of each month
during the term of such Lender's Revolving Credit Commitment and (ii) the
Termination Date. If the Borrower fails to pay (either from the proceeds of a
Borrowing or otherwise) any Commitment Fee when due, such Commitment Fee shall
immediately constitute, without necessity of further act or evidence, a
Revolving Credit Loan to the Borrower. All Revolving Credit Loans made pursuant
to this Section 2.4 shall be made as Base Rate Loans.
(b) The Borrower has agreed to pay to Citibank additional fees, the
amount and dates of payment of which are embodied in a separate agreement by and
between the Borrower and Citibank dated April 13, 1999.
2.5. Reduction and Termination of the Revolving Credit Commitments. The
Borrower may, upon at least three Business Days' prior notice to the Agent,
terminate in whole or reduce ratably in part the unused portions of the
respective Revolving Credit Commitments of the Lenders; provided, however, that
each partial reduction shall be in the aggregate amount of not less than
$5,000,000 or an integral multiple of $1,000,000 in excess thereof.
2.6. Repayment. The Borrower shall repay the entire unpaid principal
amount of the Loans on the Termination Date.
2.7. Prepayments. (a) The Borrower shall have no right to prepay the
principal amount of any Revolving Credit Loan or any Swing Loan other than as
provided in this Section 2.7.
(b) The Borrower may at any time prepay the outstanding principal
amount of the Swing Loans in whole or ratably in part.
(c) (i) The Borrower may at any time prepay the outstanding principal
amount of the Loans in whole or ratably in part with the proceeds of Collateral.
32
(ii) The Borrower may, upon at least one Business Day's prior notice to
the Agent stating the proposed date of the prepayment, prepay the outstanding
principal amount of the Loans in whole (together with accrued interest to the
date of such prepayment) or ratably in part. Upon the giving of such notice of
prepayment, the principal amount of the Loans specified to be prepaid shall
become due and payable on the date specified for each such prepayment.
(iii) The Borrower shall, on each Business Day, prepay an aggregate
principal amount of the Revolving Credit Loans comprising part of the same
Borrowing and Swing Loans equal to the amount by which (A) (I) the sum of the
aggregate principal amount of Revolving Credit Loans, Letter of Credit
Obligations and Swing Loans then outstanding minus (II) the aggregate amount
then on deposit in the Concentration Account, the Investment Account and the L/C
Cash Collateral Account exceeds (B) the lesser of the Revolving Credit
Commitments and the Borrowing Base.
(iv) Any prepayment made pursuant to this Section 2.7(c) shall be
applied first to the Swing Loans outstanding and, if no Swing Loans are
outstanding, then, to the Revolving Credit Loans outstanding. If (A) the only
Loans outstanding are Eurodollar Rate Loans, (B) there are no Letter of Credit
Obligations immediately due and payable, (C) the application of such immediately
available funds will cause the Borrower to incur an obligation under Section
10.4 and (D) there is no Default or Event of Default then continuing, then such
prepayment shall be deposited into the Investment Account and shall be retained
therein until one of the conditions set forth in clauses (A) through (D) are no
longer met, in which case such funds shall be applied as provided in this
Section 2.7(c); provided, however, that at any time the only condition not met
is the condition specified in clause (B), then such funds shall be applied to
fund the L/C Cash Collateral Account.
(d) All immediately available funds in the Concentration Account shall
be applied on the date on which they are immediately available first to the
outstanding principal amount of the Swing Loans, next to the outstanding
principal amount of the Revolving Credit Loans, and next to the other
Obligations (other than any Letter of Credit Obligations), as more fully
described in Section 5 of the Cash Collateral Account Agreement. Thereafter, the
Borrower may direct the disposition of any funds remaining in the Concentration
Account and the Investment Account; provided that, if a Default or an Event of
Default shall have occurred and be continuing, then such funds in the
Concentration Account and the Investment Account shall be used to cash
collateralize the Letter of Credit Obligations, and thereafter, the Borrower
shall direct the disposition of such remaining funds. After the occurrence of a
Cash Release Condition and until the occurrence of a Cash Release Condition
33
Unwind, the Borrower may direct the disposition of any funds in the
Concentration Account and the Investment Account.
(e) All proceeds of Collateral received by the Secured Parties after
the giving of notice to the Borrower pursuant to clause (i) or (ii) of the first
sentence of Section 8.2 shall be applied first to fund the L/C Cash Collateral
Account, and if the L/C Cash Collateral Account has been fully funded pursuant
to Section 8.3, to repay any Swing Loans then outstanding together with accrued
interest thereon, and if no Swing Loans or accrued interest are outstanding,
ratably, to repay all other Loans outstanding together with accrued interest
thereon, and if no such Loans or accrued interest are outstanding, then to repay
the Secured Parties, ratably, in respect of all other Obligations hereunder.
2.8. Conversion/Continuation Option. The Borrower may elect (i) at any
time to convert Base Rate Loans or any portion thereof to Eurodollar Rate Loans
or (ii) at the end of any Interest Period with respect thereto, to convert
Eurodollar Rate Loans or any portion thereof into Base Rate Loans, or to
continue such Eurodollar Rate Loans or any portion thereof for an additional
Interest Period; provided, however, that the aggregate of the Eurodollar Rate
Loans for each Interest Period therefor must be in the amount of $5,000,000 or
an integral multiple of $1,000,000 in excess thereof. Each conversion or
continuation shall be allocated among the Revolving Credit Loans of all Lenders
in accordance with their Ratable Portion. Each such election shall be in
substantially the form of Exhibit D hereto (a "Notice of Conversion or
Continuation") and shall be made by giving the Agent at least three Business
Days' prior written notice thereof specifying (A) the amount and type of
conversion or continuation, and (B) in the case of a conversion, the date of
conversion (which date shall be a Business Day and, if a conversion from
Eurodollar Rate Loans, shall also be the last day of the Interest Period
therefor). No conversion of any Swing Loan from a Base Rate Loan may be made.
The Agent shall promptly notify each Lender of its receipt of a Notice of
Conversion or Continuation and of the contents thereof. Notwithstanding the
foregoing, no conversion in whole or in part of Base Rate Loans to Eurodollar
Rate Loans, and no continuation in whole or in part of Eurodollar Rate Loans
upon the expiration of any Interest Period therefor, shall be permitted at any
time at which a Default or an Event of Default shall have occurred and be
continuing. If, within the time period required under the terms of this Section
2.8, the Agent does not receive a Notice of Conversion or Continuation from the
Borrower containing a permitted election to continue any Eurodollar Rate Loans
for an additional Interest Period or to convert any such Loans, or on any date
the aggregate unpaid principal amount of Eurodollar Rate Loans comprising any
Borrowing is reduced, by payment or prepayment or otherwise, to less than
$5,000,000, then, upon the expiration of the
34
Interest Period therefor, such Loans will be automatically converted to Base
Rate Loans. Each Notice of Conversion or Continuation shall be irrevocable.
2.9. Interest. (a) The Borrower shall pay interest on the unpaid
principal amount of each Loan from the date thereof until the principal amount
thereof shall be paid in full, at the following rates per annum:
(i) Base Rate Loans. For Base Rate Loans, at a rate per annum equal at
all times to the Applicable Margin plus the Base Rate in effect from time
to time, payable in arrears monthly on the first day of each month and on
the Termination Date; provided, however, that during the continuance of an
Event of Default, Base Rate Loans shall bear interest, payable on demand,
at a rate per annum equal at all times to 2% per annum above the Base Rate
in effect from time to time plus the Applicable Margin.
(ii) Eurodollar Rate Loans. For Eurodollar Rate Loans, at a rate per
annum equal at all times to the sum of the Eurodollar Rate for the
applicable Interest Period for such Eurodollar Rate Loan plus the
Applicable Margin in effect from time to time, payable in arrears on each
day during such Interest Period which occurs on the first day of a month
and on the last day of such Interest Period; provided, however, that
during the continuance of an Event of Default, all Eurodollar Rate Loans
shall bear interest, payable on demand, at a rate per annum equal at all
times to 2% above the Eurodollar Rate for such Eurodollar Rate Loan plus
the Applicable Margin.
(b) If the Borrower fails to pay any interest when due, such interest
shall immediately constitute, without necessity of further act or evidence, a
Revolving Credit Loan to the Borrower.
2.10. Interest Rate Determination. (a) The Eurodollar Rate for each
Interest Period for Eurodollar Rate Loans shall be determined by the Agent two
Business Days before the first day of such Interest Period.
(b) The Agent shall give prompt notice to the Borrower and the Lenders
of the applicable interest rate determined by the Agent for purposes of Section
2.8.
(c) If, with respect to Eurodollar Rate Loans, any Lender notifies the
Agent that the Eurodollar Rate for any Interest Period therefor will not
adequately reflect the cost to such Lender of making such Loans or funding or
maintaining its
35
respective Eurodollar Rate Loans for such Interest Period, the
Agent shall forthwith so notify the Borrower and the Lenders, whereupon;
(i) each Eurodollar Rate Loan will
automatically, on the last day of the then existing Interest
Period therefor, convert into a Base Rate Loan; and
(ii) the obligations of all the Lenders to
make Eurodollar Rate Loans or to convert Base Rate Loans into
Eurodollar Rate Loans shall be suspended until the Agent shall
notify the Borrower that such Lenders have determined that the
circumstances causing such suspension no longer exist.
2.11. Increased Costs. If, due to either (i) the introduction of or any
change in or in the interpretation of any law or regulation (other than any
change by way of imposition or increase of reserve requirements included in
determining the Eurodollar Rate Reserve Percentage) or (ii) compliance with any
guideline or request from any central bank or other Governmental Authority
(whether or not having the force of law), there shall be any increase in the
cost to any Lender Party of agreeing to make or making, funding or maintaining
any Eurodollar Rate Loans or of agreeing to issue or of issuing or maintaining
Letters of Credit, then the Borrower shall from time to time, upon demand by
such Lender Party (with a copy of such demand to the Agent), pay to the Agent
for the account of such Lender Party additional amounts sufficient to compensate
such Lender Party for such increased cost. A certificate as to the amount of
such increased cost, submitted to the Borrower and the Agent by such Lender
Party, shall be conclusive and binding for all purposes, absent manifest error.
If the Borrower so notifies the Agent within five Business Days after any Lender
Party notifies the Borrower of any increased cost pursuant to the foregoing
provisions of this Section 2.11, the Borrower may convert all Eurodollar Rate
Loans of all Lenders then outstanding into Base Rate Loans, in accordance with
Section 2.8 and, additionally, reimburse such Lender Party for such increased
cost in accordance with this Section 2.11.
2.12. Illegality. Notwithstanding any other provision of this Agree
ment, if the introduction of, or any change in, or any change in the
interpretation of, any law or regulation shall make it unlawful, or any central
bank or other Governmental Authority shall assert that it is unlawful, for any
Lender or its Eurodollar Lending Office to make Eurodollar Rate Loans or to
continue to fund or maintain Eurodollar Rate Loans, then, on notice thereof and
demand therefor by such Lender to the Borrower through the Agent, (i) the
obligation of such Lender to make or to continue Eurodollar Rate Loans and to
convert Base Rate Loans into Eurodollar Rate Loans shall terminate and (ii) the
Borrower shall forthwith prepay in full all Eurodollar Rate Loans of such Lender
then outstanding, together with interest accrued thereon,
36
unless the Borrower, within five Business Days of such notice and demand,
converts all Eurodollar Rate Loans of all Lenders then outstanding into Base
Rate Loans.
2.13. Capital Adequacy. If (i) the introduction of, or any change in or
in the interpretation of, any law or regulation, (ii) the compliance with any
law or regulation, or (iii) compliance with any guideline or request from any
central bank or other Governmental Authority (whether or not having the force of
law), affects or would affect the amount of capital required or expected to be
maintained by any Lender Party or any corporation controlling any Lender Party
and such Lender Party reasonably determines that such amount is based upon the
existence of such Lender Party's Commitment and Loans and other commitments and
loans of this type including, without limitation, such Lender Party's
commitments in respect of Letters of Credit (or similar contingent obligations),
then, upon demand by such Lender Party (with a copy of such demand to the
Agent), the Borrower shall pay to the Agent for the account of such Lender
Party, from time to time as specified by such Lender Party, additional amounts
sufficient to compensate such Lender Party in the light of such circumstances,
to the extent that such Lender Party reasonably determines such increase in
capital to be allocable to the existence of such Lender Party's Commitment or
Loans and such Lender Party's agreements herein with respect to the issuance or
maintenance of Letters of Credit. A certificate as to such amounts submitted to
the Borrower and the Agent by such Lender Party shall be conclusive and binding
for all purposes absent manifest error.
2.14. Payments and Computations. (a) The Borrower shall make each
payment hereunder and under the Revolving Credit Notes not later than 12:00 P.M.
(New York City time) (except for payments made pursuant to Section 2.7(e) which
shall be credited no later than when received by the Agent) on the day when due,
in Dollars, to the Agent at its address referred to in Section 10.2 in
immediately available funds without set-off or counterclaim. The Agent will, on
the Business Day of its receipt thereof, cause to be distributed like funds
relating to the payment of principal of or interest on the Loans (other than
Swing Loans) or fees with respect to any Loans (other than amounts payable
pursuant to Section 2.11, 2.12, 2.13, 2.15, or 2.17(h)) to the Lenders, in
accordance with their respective Ratable Portions, for the account of their
respective Applicable Lending Offices, and like funds relating to the payment of
any other amount payable to any Lender Party to such Lender Party for the
account of its Applicable Lending Office, in each case to be applied in
accordance with the terms of this Agreement; provided, however, that payment of
principal of the Swing Loans pursuant to Section 2.7(e) need not be distributed
by the Agent prior to the Settlement Date referred to in Section 2.18. With
respect to the Swing Loans, the Agent will promptly thereafter cause to be
distributed like funds relating to the payment of principal of or interest on
the Swing Loans to the Swing Bank for the account of its
37
Applicable Lending Office. Upon its acceptance of an Assignment and Acceptance
and recording of the information contained therein in the Register pursuant to
Section 10.7, from and after the effective date of such Assignment and
Acceptance, the Agent shall make all payments hereunder and under the Revolving
Credit Notes in respect of the interest assigned thereby to the Lender Party
assignee thereunder, and the parties to such Assignment and Acceptance shall
make all appropriate adjustments in such payments for periods prior to such
effective date directly between themselves. Payment received by the Agent after
12:00 P.M. (New York City time) shall be deemed to be received on the next
Business Day (except for payments made pursuant to Section 2.7(e) which shall be
credited no later than when received by the Agent). Prior to the distribution of
any funds to any Lender Party pursuant to this Section 2.14, the Agent shall use
its best efforts to notify such Lender Party of such distribution.
(b) Until the occurrence of the Cash Release Condition, all amounts on
deposit in each of the Blocked Account, the Concentration Account and the
Investment Account shall be applied by the Agent against the outstanding balance
of the Obligations in accordance with Section 2.7(d); provided, however, that in
no event shall any amount be required to be applied by the Agent against the
outstanding balance of the Obligations unless and until such amount shall have
been credited in immediately available funds to the Blocked Account, the
Concentration Account or the Investment Account.
(c) The Borrower hereby authorizes each Lender Party, if and to the
extent payment owed to such Lender Party is not made when due hereunder, to
charge from time to time against any or all of the Borrower's accounts with such
Lender Party any amount so due or to treat any amounts due hereunder as having
been paid by proceeds of a Revolving Credit Borrowing. The Borrower and the
Lender Parties hereby authorize the Swing Bank to pay directly any amount due
hereunder and to treat such payment as a Swing Loan.
(d) All computations of interest and fees shall be made by the Agent on
the basis of a year of 360 days, and the actual number of days (including the
first day but excluding the last day) occurring in the period for which such
interest and fees are payable. Each determination by the Agent of an interest
rate hereunder shall be conclusive and binding for all purposes, absent manifest
error.
(e) 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, and such extension of time shall in
such case be included in the computation of payment of interest or fee, as the
case may be; provided, however, that if such extension would cause payment of
interest on or
38
principal of any Eurodollar Rate Loan to be made in the next calendar month,
such payment shall be made on the next preceding Business Day.
(f) Unless the Agent shall have received notice from the Borrower prior
to the date on which any payment is due hereunder to any Lender Party hereunder
that the Borrower will not make such payment in full, the Agent may assume that
the Borrower has made such payment in full to the Agent on such date and the
Agent may, in reliance upon such assumption, cause to be distributed to each
such Lender Party on such due date an amount equal to the amount then due such
Lender Party. If and to the extent the Borrower shall not have so made such
payment in full to the Agent, each such Lender Party shall repay to the Agent
forthwith on demand such amount distributed to such Lender Party together with
interest thereon, for each day from the date such amount is distributed to such
Lender Party until the date such Lender Party repays such amount to the Agent,
at the Federal Funds Rate.
2.15. Taxes. (a) Any and all payments by the Borrower hereunder, under
the Revolving Credit Notes and under the Letter of Credit Reimbursement
Agreements shall be made, in accordance with Section 2.14, free and clear of and
without deduction for any and all present or future taxes, levies, imposts,
deductions, charges or withholdings, and all liabilities with respect thereto,
excluding, (i) in the case of each Lender Party and the Agent, taxes measured by
its net income, and franchise taxes imposed on it, by the jurisdiction under the
laws of which such Lender Party or the Agent (as the case may be) is organized
or any political subdivision thereof, (ii) in the case of each Lender Party,
taxes (including, but not limited to, the Branch Profits Tax under Section 884
of the Code) measured by its net income, and franchise taxes imposed on it, by
the jurisdiction of such Lender Party's Applicable Lending Office or any
political subdivision thereof and (iii) in the case of each Lender Party
organized under the laws of a jurisdiction outside the United States, United
States federal withholding tax payable with respect to payments by the Borrower
which would not have been imposed had such Lender Party, to the extent then
required thereunder, delivered to the Borrower and the Agent the forms
prescribed by Section 2.15(f) (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 to any Lender Party or the Agent, (i)
the sum payable shall be increased as may be necessary so that after making all
required deductions (including, without limitation, deductions applicable to
additional sums payable under this Section 2.15) such Lender Party or the Agent
(as the case may be) receives an amount equal to the sum it would have received
had no such deductions been made, (ii) the Borrower shall make such deductions,
(iii) the Borrower shall pay the full amount deducted to the relevant taxing
authority or
39
other authority in accordance with applicable law, and (iv) the Borrower shall
deliver to the Agent evidence of such payment to the relevant taxation or other
authority.
(b) In addition, the Borrower agrees to pay any present or future stamp
or documentary taxes or any other excise or property taxes, charges or similar
levies of the United States or any political subdivision thereof or any
applicable foreign jurisdiction which arise from any payment made by the
Borrower hereunder or under any Letter of Credit Reimbursement Agreement or from
the execution, delivery or registration of, or otherwise with respect to, any
Loan Document (hereinafter referred to as "Other Taxes").
(c) The Borrower agrees to indemnify each Lender Party and the Agent
for the full amount of Taxes and Other Taxes (including, without limitation, any
Taxes and Other Taxes imposed by any jurisdiction on amounts payable under this
Section 2.15) imposed on or paid by such Lender Party or the Agent (as the case
may be) and any liability (including, without limitation, for penalties,
interest and expenses) arising therefrom or with respect thereto, whether or not
such Taxes or Other Taxes were correctly or legally asserted. This
indemnification shall be made within 30 days from the date such Lender Party or
the Agent (as the case may be) makes written demand therefor. Any such demand
shall show in reasonable detail the amount payable and the calculations used to
determine, in good faith, such amount and shall provide reasonably acceptable
proof of payment of such Tax or Other Tax.
(d) Within 30 days after the date of any payment of Taxes or Other
Taxes, the Borrower will furnish to the Agent, at its address referred to in
Section 10.2, the original or a certified copy of a receipt evidencing payment
thereof. If no Taxes are payable in respect of any payment hereunder made (i) by
or on behalf of the Borrower other than by a "United States person" within the
meaning of Section 7701(a)(30) of the Code or (ii) out of funds from an account
outside the United States, the Borrower will furnish to the Agent a certificate
from each appropriate taxing authority, or an opinion of counsel acceptable to
the Agent, in either case stating that such payment is exempt from or not
subject to Taxes. For purposes of this subsection (d) and subsection (f), the
term "United States" shall have the meaning specified in Section 7701 of the
Code.
(e) Without prejudice to the survival of any other agreement of the
Borrower hereunder, the agreements and obligations of the Borrower contained in
this Section 2.15 shall survive the payment in full of principal and interest
hereunder and the termination of the Revolving Credit Commitments.
40
(f) Each Lender Party organized under the laws of a jurisdiction
outside the United States, on or prior to the Effective Date in the case of each
Lender Party listed on the signature pages hereof, and on the date of the
Assignment and Acceptance pursuant to which it becomes a Lender Party in the
case of each other Lender Party, and from time to time thereafter if reasonably
requested by the Borrower or the Agent (unless such Lender Party is unable to do
so by reason of a change in law (including, without limitation, any statute,
treaty, ruling, determination or regulation) occurring subsequent to the
Effective Date or date of Assignment and Acceptance, as the case may be), shall
provide the Agent and the Borrower with two original IRS Forms 4224 or 1001, as
appropriate, or other applicable form, certificate or document prescribed by the
IRS, certifying that such Lender Party is exempt from or entitled to a reduced
rate of United States withholding tax with respect to all payments to be made to
such Lender Party hereunder, under any Revolving Credit Note and under any
Letter of Credit Reimbursement Agreement. If any form or document referred to in
this subsection (f) requires the disclosure of information, other than
information necessary to compute the tax payable and information required on the
date hereof by Internal Revenue Service Form 1001 or 4224 that the Lender Party
reasonably considers to be confidential, the Lender Party shall give notice
thereof to the Borrower and shall not be obligated to include in such form or
document such confidential information. Unless the Borrower and the Agent have
received forms or other documents satisfactory to them indicating that payments
hereunder, under any Revolving Credit Note or under any Letter of Credit
Reimbursement Agreement are not subject to United States withholding tax, the
Borrower or the Agent shall, in the case of payments to or for any Lender Party
organized under the laws of a jurisdiction outside the United States, (i)
withhold taxes from such payments at the applicable statutory rate, or at a rate
reduced by an applicable tax treaty (provided that the Borrower and the Agent
have received forms or other documents satisfactory to them indicating that such
reduced rate applies) and (ii) pay such Lender Party such payment net of any
taxes withheld; provided, however, that should a Lender Party become subject to
Taxes because of its failure to deliver a form required hereunder, the Borrower
shall take such steps as such Lender Party shall reasonably request to assist
such Lender Party to recover such Taxes.
2.16. Sharing of Payments, Etc. If any Lender Party shall obtain any
payment (whether voluntary, involuntary, through the exercise of any right of
set-off, or otherwise) on account of the Loans (other than Swing Loans) made by
it (other than pursuant to Section 2.7, 2.11, 2.12, 2.13, 2.14 or 2.17(h)) in
excess of its Ratable Portion of payments on account of the Loans (other than
Swing Loans) obtained by all the Lender Parties, such Lender Party shall
forthwith purchase from the other Lender Parties such participations in their
Loans (other than Swing Loans) as shall be necessary to cause such purchasing
Lender Party to share the excess payment ratably with each of
41
them; provided, however, that if all or any portion of such excess payment is
thereafter recovered from such purchasing Lender Party, such purchase from each
Lender Party shall be rescinded and such Lender Party shall repay to the
purchasing Lender Party the purchase price to the extent of such recovery
together with an amount equal to such Lender Party's ratable share (according to
the proportion of (i) the amount of such Lender Party's required repayment to
(ii) the total amount so recovered from the purchasing Lender Party) of any
interest or other amount paid or payable by the purchasing Lender Party in
respect of the total amount so recovered. The Borrower agrees that any Lender
Party so purchasing a participation from another Lender Party pursuant to this
Section 2.16 may, to the fullest extent permitted by law, exercise all its
rights of payment (including, without limitation, the right of set-off) with
respect to such participation as fully as if such Lender Party were the direct
creditor of the Borrower in the amount of such participation.
2.17. Letter of Credit Facility. (a) On the terms and subject to the
conditions contained in this Agreement, each Issuer agrees to issue one or more
Letters of Credit at the request of the Borrower for the account of the Borrower
from time to time during the period commencing on the date hereof and ending on
the Termination Date; provided, however, that no Issuer shall issue any Letter
of Credit if:
(i) any order, judgment or decree of any Governmental Authority or
arbitrator shall purport by its terms to enjoin or restrain such Issuer
from issuing such Letter of Credit or any Requirement of Law applicable to
such Issuer or any request or directive (whether or not having the force
of law) from any Governmental Authority with jurisdiction over such Issuer
shall prohibit, or request that such Issuer refrain from, the issuance of
letters of credit generally or such Letter of Credit in particular or
shall impose upon such Issuer with respect to such Letter of Credit any
restriction or reserve or capital requirement (for which such Issuer is
not otherwise compensated) not in effect on the date hereof or result in
any unreimbursed loss, cost or expense which was not applicable, in effect
or known to such Issuer as of the date hereof and which such Issuer in
good xxxxx xxxxx material to it;
(ii) such Issuer shall have received written notice from any Lender
Party or the Borrower, on or prior to the Business Day prior to the
requested date of issuance of such Letter of Credit, that one or more of
the applicable conditions contained in Article III is not then satisfied;
(iii) the amount of the Letter of Credit requested exceeds the
Available Credit or, upon the issuance of the requested Letter of Credit,
the Letter of Credit Undrawn Amounts would exceed $25,000,000; or
42
(iv) fees due in connection with a requested issuance have not been
paid.
None of the Lender Parties (other than the Issuers) shall have any obligation to
issue any Letters of Credit.
(b) In no event shall:
(i) the expiration date of any Letter of Credit be more than one year
after the date of issuance thereof, nor shall the expiration date of any
Letter of Credit fall after the date that is 60 days prior to the
Termination Date; except that any such Letter of Credit may also be on the
following terms: such Letter of Credit shall have an initial one year term
which shall be automatically extended for successive one-year terms (but
in no case may such Letter of Credit be extended such that its expiration
date falls after the date that is 60 days prior to the Termination Date);
provided, however, that such a Letter of Credit shall not be automatically
extended if either (A) the beneficiary of such Letter of Credit is sent a
notice that an Event of Default shall have occurred and be continuing at
any time prior to the date that is 30 days prior to the date of such
extension or (B) the Borrower requests in writing no later than 40 days
prior to the date of such extension that the term of such Letter of Credit
shall not be extended; or
(ii) any Issuer issue any Letter of Credit for the purpose of
supporting the issuance of any letter of credit by any other Person except
with the prior written consent of the Agent.
(c) Prior to the issuance of each Letter of Credit, and as a condition
of such issuance and of the participation of each Lender (other than the Issuer
thereof) in the Letter of Credit Obligations arising with respect thereto, the
Borrower shall have delivered to the Issuer thereof a letter of credit
reimbursement agreement, in a form satisfactory to the Issuer (as the same as
may be amended or otherwise modified, a "Letter of Credit Reimbursement
Agreement"), signed by the Borrower, and such other documents or items as may be
required pursuant to the terms thereof or otherwise reasonably required by the
Issuer. In the event of any conflict between the terms of any Letter of Credit
Reimbursement Agreement and this Agreement, the terms of this Agreement shall
govern.
(d) In connection with the issuance of each Letter of Credit, the
Borrower shall give the Issuer thereof and the Agent at least two Business Days'
prior written notice of its requested issuance of a Letter of Credit in
substantially the form of
43
Exhibit C (a "Letter of Credit Request"). Such notice shall be irrevocable and
shall specify the stated amount of the Letter of Credit requested, which stated
amount shall not be less than $50,000, the date of issuance of such requested
Letter of Credit (which day shall be a Business Day), the date on which such
Letter of Credit is to expire, and the Person for whose benefit the requested
Letter of Credit is to be issued. Such notice, to be effective, must be received
by such Issuer and the Agent not later than 11:00 A.M. (New York City time) on
or prior to the last Business Day on which notice can be given under the
immediately preceding sentence. Prior to the close of business on the Business
Day following the Business Day on which the Agent first receives such notice,
the Agent shall confirm to the Issuer of the requested Letter of Credit whether
the applicable conditions in Article III are satisfied as of such date.
(e) Subject to the terms and conditions of this Section 2.17 and
provided that the applicable conditions set forth in Article III have been
satisfied, such Issuer shall, on the requested date, issue a Letter of Credit on
behalf of the Borrower in accordance with the Issuer's usual and customary
business practices.
(f) Immediately upon the issuance by an Issuer of a Letter of Credit in
accordance with the terms and conditions of this Agreement, such Issuer shall be
deemed to have sold and transferred to each Lender, and each Lender shall be
deemed irrevocably and unconditionally to have purchased and received from such
Issuer, without recourse or warranty, an undivided interest and participation,
to the extent of such Lender's Ratable Portion, in such Letter of Credit and the
obligations of the Borrower with respect thereto (including, without limitation,
all Letter of Credit Obligations with respect thereto) and any security therefor
and guaranty pertaining thereto and each Lender's Revolving Credit Commitment
shall be deemed used to the extent of such Lender's Ratable Portion of such
Letter of Credit Obligations.
(g) In determining whether to pay under any Letter of Credit, no Issuer
shall have any obligation relative to the Lenders other than to confirm that any
documents required to be delivered under such Letter of Credit appear to have
been delivered and that they appear to comply on their face with the
requirements of such Letter of Credit. Any action taken or omitted to be taken
by any Issuer under or in connection with any Letter of Credit, if taken or
omitted in the absence of gross negligence or willful misconduct, shall not put
such Issuer under any resulting liability to any Lender, or diminish the Agent's
or any Lender's obligations hereunder to the Issuer.
(h) In the event that any Issuer makes any payment under any Letter of
Credit and the Borrower shall not have repaid such amount to such Issuer
pursuant to Section 2.17(l), such Issuer shall promptly
44
notify the Agent, which shall promptly notify each Lender of such failure, and
each Lender shall promptly and unconditionally pay to the Agent for the account
of such Issuer the amount of such Lender's Ratable Portion of such payment in
Dollars and in same day funds (and upon receipt the Agent shall promptly pay the
same to the Issuer); provided, however, if the Swing Bank so elects and if a
Swing Loan can be made in such amount, the Agent shall promptly notify the Swing
Bank of such failure, and the Swing Bank shall pay to the Agent for the account
of such Issuer the amount of such payment in Dollars and in same day funds. This
Revolving Credit Loan shall be made, or the Swing Loan may be made,
notwithstanding the Borrower's failure to satisfy the conditions set forth in
Section 3.3. If the Agent so notifies such Lender prior to 11:00 A.M. (New York
City time) on any Business Day, such Lender shall make available to the Agent
for the account of such Issuer its Ratable Portion of the amount of such payment
on such Business Day in same day funds. If and to the extent such Lender shall
not have so made such Lender's Ratable Portion of the amount of such payment
available to the Agent for the account of such Issuer, such Lender agrees to
repay to the Agent for the account of such Issuer forthwith on demand such
amount together with interest thereon, for each day from such date until the
date such amount is repaid to the Agent for the account of such Issuer, at the
Federal Funds Rate. The failure of any Lender to make available to the Agent for
the account of such Issuer its Ratable Portion of any such payment shall not
relieve any other Lender of its obligation hereunder to make available to the
Agent for the account of such Issuer its Ratable Portion of any payment on the
date such payment is to be made, but no Lender shall be responsible for the
failure of any other Lender to make available to the Agent for the account of
any Issuer such other Lender's Ratable Portion of any such payment.
(i) Whenever any Issuer receives a payment of a Reimbursement
Obligation as to which the Agent has received for the account of such Issuer any
payment from a Lender pursuant to Section 2.17(h) (and such amount has been paid
to such Issuer), the Issuer shall pay to the Agent such amount so received and
the Agent shall promptly pay to each Lender which has paid such Lender's Ratable
Portion thereof, in same day funds, an amount equal to such Lender's Ratable
Portion thereof.
(j) Upon the request of any Lender, each Issuer shall furnish to such
Lender copies of any Letter of Credit Reimbursement Agreement to which such
Issuer is a party and such other documentation as may reasonably be requested by
such Lender.
(k) The obligations of the Lenders to make payments to the Agent for
the account of each Issuer with respect to Letters of Credit shall be
irrevocable and not subject to any qualification or exception whatsoever and
shall be made in accordance with the terms and conditions of this Agreement
under all circumstances (except as
45
expressly provided in Section 2.17(g)), including, without limitation, any of
the following circumstances:
(i) any lack of validity or enforceability of this Agreement or any of
the Collateral Documents;
(ii) the existence of any claim, set-off, defense or other right which
the Borrower may have at any time against a beneficiary named in a Letter
of Credit, any transferee of any Letter of Credit (or any Person for whom
any such transferee may be acting), the Agent, any Lender Party or any
other Person, whether in connection with this Agreement, any Letter of
Credit, the transactions contemplated herein or any unrelated transactions
(including, without limitation, any underlying transaction between the
Borrower and the beneficiary named in any Letter of Credit);
(iii) any draft, certificate or any other document presented under the
Letter of Credit proving to be forged, fraudulent, invalid or insufficient
in any respect or any statement therein being untrue or inaccurate in any
respect;
(iv) the surrender or impairment of any security for the performance or
observance of any of the terms of any of the Collateral Documents; or
(v) the occurrence of any Default or Event of Default.
(l) The Borrower agrees to pay to each Issuer the amount of all
Reimbursement Obligations owing to such Issuer under any Letter of Credit
immediately when due, irrespective of any claim, set-off, defense or other right
which the Borrower may have at any time against such Issuer or any other Person.
The Borrower agrees to reimburse each Issuer for all amounts which such Issuer
pays under such Letter of Credit no later than the time specified in such Letter
of Credit Reimbursement Agreement. If the Borrower does not pay (either from the
proceeds of a Borrowing or otherwise) any such Reimbursement Obligation when
due, such Reimbursement Obligation shall immediately constitute, without
necessity of further act or evidence, a Loan made by the relevant Issuer payable
on demand or, to the extent the Agent has received any payments from Lenders for
the account of such Issuer pursuant to Section 2.17(h), Revolving Credit Loans
made by such Lenders (which, in the case of each Lender, shall be to the extent
of such Lender's Ratable Portion of such Reimbursement Obligation) to the
Borrower, in an aggregate principal amount equal to such Reimbursement
Obligation remaining unpaid, or, to the extent the Agent has received any
payments from the Swing Bank for the account of such Issuer pursuant to Section
2.17(h), Swing Loans made by the Swing Bank, computed from the date on
46
which such Reimbursement Obligation arose to the date of repayment in full
thereof at the rate of interest applicable to past due Revolving Credit Loans at
a rate based on the Base Rate during such period. If any payment made by or on
behalf of the Borrower and received by any Issuer with respect to any Letter of
Credit is rescinded or must otherwise be returned by such Issuer for any reason,
each Lender shall, upon notice by such Issuer, forthwith pay over to such Issuer
an amount equal to such Lender's Ratable Portion of the amount which must be so
returned by such Issuer or the Swing Bank may, upon notice to the Issuer,
forthwith pay over to such Issuer an amount equal to the amount which must be
returned by such Issuer.
(m) The Borrower agrees to pay the following amounts with respect to
Letters of Credit issued for it:
(i) to the Agent, for the benefit of each Lender who has purchased or
has been deemed to have purchased participations in the Letters of Credit,
with respect to each standby Letter of Credit or documentary Letter of
Credit, an administrative fee equal to a rate per annum equal at all times
to the Applicable Margin for Letter of Credit Fees multiplied by the
average daily maximum amount available from time to time to be drawn under
such Letter of Credit, payable monthly in arrears and on the termination
of such Letter of Credit, and, in each case, calculated on the basis of a
360-day year and the actual number of days elapsed; provided, however,
that, during the continuance of an Event of Default, such administrative
fee shall increase by 2% per annum and shall be payable on demand;
(ii) to each Issuer, with respect to each standby Letter of Credit or
documentary Letter of Credit issued by such Issuer, 0.375% per annum of
the average daily maximum amount available from time to time to be drawn
under such Letter of Credit, payable monthly in arrears and on the
termination of such Letter of Credit, and, in each case calculated on the
basis of a 360-day year and the actual number of days elapsed; and
(iii) to each Issuer, with respect to the issuance, amendment or
transfer of each Letter of Credit and each drawing made thereunder,
issuance, documentary, processing and other charges in accordance with
such Issuer's standard schedule for such charges in effect at the time of
issuance, amendment, transfer or drawing, as the case may be.
2.18. Settlement of Accounts. The Agent shall notify each Lender
periodically, as determined by the Agent, of the principal amount of Swing Loans
outstanding as of 1:00 P.M. (New York City time) as of such date (the
"Computation
47
Date") and each Lender's Ratable Portion thereof. Each Lender shall before 1:00
P.M. (New York City time) on the next Business Day (the "Settlement Date") make
available to the Agent, in immediately available funds, the amount of its
Ratable Portion of such principal amount of Swing Loans outstanding. Upon such
payment by a Lender, such Lender shall be deemed to have made a Revolving Credit
Loan to the Borrower, notwithstanding any failure by the Borrower to satisfy the
conditions in Section 3.3. The Agent shall use such funds to repay the principal
amount of Swing Loans to the Swing Bank. All interest due on the Swing Loans
shall be payable to the Swing Bank in accordance with Sections 2.9 and 2.14.
2.19. The Blocked Account. (a) The Borrower has established and shall
maintain, pursuant to the Blocked Account Letter, an account with PNC Bank,
N.A., account number 0002881016, in the name and under the sole dominion and
control of the Agent (the "Blocked Account").
(b) As collateral security for the Obligations, the Borrower hereby
transfers, assigns and pledges to the Agent and grants to the Agent a Lien on
and security interest in, for the benefit of the Secured Parties on a first
priority basis, all of the right, title and interest of the Borrower in the
Blocked Account and all cash, deposits, Cash Equivalents and other instruments
held in the Blocked Account, as security for the Obligations. The Agent shall
possess sole dominion and control over the Blocked Account as provided in the
Blocked Account Letter. Except as provided in Section 2.7(d) and the Blocked
Account Letter, as long as any of the Obligations remain unpaid or any of the
Commitments are outstanding, the Borrower agrees that neither the Borrower nor
any Person or entity claiming by, through or under the Borrower shall have any
control over the use of, or any right to effect a withdrawal from, the Blocked
Account. All amounts in the Blocked Account shall be applied to the Obligations
by the Agent as specified in Section 2.7(d).
(c) Except for the funds held in the bank accounts otherwise permitted
by Section 7.16, the Borrower shall cause all cash, Cash Equivalents, checks,
notes, drafts or similar items of payments received by it which constitute (i)
payments from account debtors for Accounts not sold pursuant to the Receivables
Securitization, including, without limitation, all intercompany receivables and
(ii) proceeds of all other Collateral to be deposited on the date of receipt
thereof or the next Business Day following receipt thereof in the Blocked
Account.
48
ARTICLE III
CONDITIONS PRECEDENT
3.1. Conditions Precedent to the Effective Date. The effectiveness of
this Agreement is subject to satisfaction of the conditions precedent that the
Agent shall have received, on or before the Effective Date, the following, each
dated as of the Effective Date unless otherwise indicated, in form and substance
satisfactory to the Agent and (except for the Revolving Credit Notes) in
sufficient copies for each Lender Party:
(a) The Revolving Credit Notes to the order of each Lender, respec
tively.
(b) Certified copies of (i) the resolutions of the Board of Directors
of each Loan Party approving each Loan Document to which it is a party, and (ii)
all documents evidencing other necessary corporate action and required
governmental and third party approvals, licenses and consents to the
transactions contemplated hereby.
(c) A copy of the articles or certificate of incorporation of each Loan
Party and of each of the Borrower's Subsidiaries which is not a Loan Party
certified as of a recent date by the Secretary of State of the state of
incorporation of such Loan Party or Subsidiary, together with certificates of
such official attesting to the good standing of each such Loan Party and
Subsidiary, and a copy of the certificate of incorporation and the By-Laws of
each Loan Party and of each of the Borrower's Subsidiaries certified as of the
Effective Date by the Secretary or an Assistant Secretary of each Loan Party or
Subsidiary.
(d) A certificate of the Secretary or an Assistant Secretary of each
Loan Party certifying the names and true signatures of each officer of such Loan
Party who have been authorized to execute and deliver any Loan Document or other
document required to be executed and delivered hereunder by or on behalf of such
Loan Party.
(e) The Holdings Guaranty, duly executed by Holdings.
(f) The Holdings Pledge Agreement, duly executed by Holdings, together
with:
(A) certificates representing the Pledged Shares referred to
therein accompanied by undated stock powers executed in blank; and
49
(B) evidence that all other action that the Agent may deem
necessary or desirable in order to perfect and protect the Liens created
under the Holdings Pledge Agreement has been taken or will be taken in
accordance with the terms of the Loan Documents.
(g) The Guaranty, duly executed by the Guarantors.
(h) The Security Agreement, duly executed by the Borrower and each
Guarantor, together with:
(A) certificates representing the Pledged Shares referred to
therein accompanied by undated stock powers executed in blank and
instruments, if any, evidencing the Pledged Debt referred to therein
indorsed in blank, and
(B) acknowledgment copies of proper termination statements (Form
UCC-3 or a comparable form), duly filed on or before the Effective Date
under the Uniform Commercial Code of the States listed on Schedule 3.1 and
all other jurisdictions that the Agent may deem necessary or desirable in
order to terminate the Liens (other than the Liens created by the Security
Agreement) covering the Collateral described in the Security Agreement,
(C) acknowledgment copies of proper financing statements (Form
UCC-1), duly filed on or before the Effective Date under the Uniform
Commercial Code of all jurisdictions that may be necessary or that the
Agent may deem desirable in order to perfect and protect the Liens created
by the Security Agreement, covering the Collateral described in the
Security Agreement,
(D) evidence of the completion of all other recordings and
filings of or with respect to the Security Agreement that the Agent may
deem necessary or appropriate in order to perfect and protect the Liens
created thereby,
(E) evidence of the insurance required by the terms of the
Security Agreement,
(F) copies of the Assigned Agreements, if any, referred to in the
Security Agreement, together with a consent to such assignment, duly
executed by each party to such Assigned Agreements other than the Borrower
or a Guarantor,
50
(G) the Blocked Account Letters referred to therein, duly
executed by PNC Bank, and
(H) evidence that all other action that the Agent may deem
necessary or desirable in order to perfect and protect the Liens created
under the Security Agreement has been taken or will be taken in accordance
with the terms of the Loan Documents.
(i) The Keepwell Agreement, duly executed by the Borrower, WHX and
Holdings.
(j) The Holdings Intercreditor Agreement, duly executed by WHX,
Holdings and the Borrower.
(k) The Cash Collateral Account Agreement, duly executed by the
Borrower.
(l) A favorable opinion of (i) Olshan, Grundman, Frome, Xxxxxxxxxx &
Xxxxxxx LLP, outside general counsel to Holdings, the Borrower and the
Guarantors, and Xxxx Xxxxx Xxxx & XxXxxx LLP, special counsel to the Borrower in
Pennsylvania, each in substantially the form of Exhibit M-1 or M-2,
respectively, and as to such other matters as any Lender through the Agent may
reasonably request.
(m) A certificate, signed by a Responsible Officer of the Borrower,
stating that the conditions specified in Sections 3.2(a), (b) and (f) and
3.3(a)(i) have been met.
(n) A certificate of the chief financial officer of the Borrower in
form and substance satisfactory to the Lender Parties, attesting to the Solvency
of each Loan Party after giving effect to the transactions contemplated hereby.
(o) Such additional documents, information and materials as any Lender
Party, through the Agent, may reasonably request.
3.2. Additional Conditions Precedent to the Effective Date. The
effectiveness of this Agreement is subject to the further conditions precedent
that:
(a) On the Effective Date, the following statements shall be true:
(i) All necessary governmental and third party approvals required to be
obtained by any Loan Party, in connection with the transactions
contemplated
51
hereby, including, without limitation, the obtaining of the Loans and
Letters of Credit, have been obtained and remain in effect, and all
applicable waiting periods have expired without any action being taken by
any competent authority which restrains, prevents, impedes, delays or
imposes materially adverse conditions upon, the consummation of the
transactions contemplated hereby;
(ii) There exists no claim, action, suit, investigation or proceeding
pending or, to the knowledge of the Borrower, threatened in any court or
before any arbitrator or Governmental Authority which relates to the
financing hereunder or those which, if adversely determined, would have a
Material Adverse Effect;
(iii) There exists no default under the Original Credit Agreement or
any loan documents executed in connection with the Original Credit
Agreement; and
(iv) There exists no default under the Indenture or the Replacement
Notes.
(b) All costs and accrued and unpaid fees (including, without
limitation, all upfront fees) and expenses (including, without limitation, the
legal fees and expenses of the Agent) required to be paid to the Lender Parties
or the Agent on or before the Effective Date, including, without limitation,
those referred to in Sections 2.4, 2.17 and 10.4, to the extent then due and
payable, shall have been paid.
(c) Nothing contained in any public disclosure made by the Borrower or
any of its Subsidiaries shall lead any Lender Party, in its sole judgment,
exercised reasonably, to determine that any Loan Party's or any of its
Subsidiaries' condition (financial or otherwise), operations, performance,
properties or prospects is different in any material and adverse respect from
that contained in public filings since December 31, 1998, except to the extent
that subsequent filings have updated, amended or supplemented such information
(and other documents delivered to the Agent prior to the date hereof) of any
Loan Party or its Subsidiaries prior to such date.
(d) No Lender Party, in its sole judgment, exercised reasonably, shall
have determined that there is any claim, action, suit, investigation, litigation
or proceeding (including, without limitation, shareholder or derivative
litigation) pending or threatened against any Loan Party in any court or before
any arbitrator or Governmental Authority which, if adversely determined, would
have a Material Adverse Effect.
52
(e) Each Lender Party shall be satisfied, in its sole judgment,
exercised reasonably, with all tax aspects of the transactions contemplated
hereby, and with the corporate, capital, tax, legal and management structure of
the Loan Parties and their Subsidiaries, and shall be satisfied, in its sole
judgment exercised reasonably, with the nature and status of all Contractual
Obligations, securities, labor, tax, ERISA, employee benefit, environmental,
health and safety matters, in each case, involving or affecting any Loan Party
or any of its Subsidiaries.
(f) The Tangible Net Worth of the Borrower as of the Effective Date is
at least $13,000,000 and the Consolidated Tangible Net Worth of the Loan Party
Consolidated Group as of the Effective Date is at least $122,000,000.
3.3. Conditions Precedent to Each Loan and Letter of Credit. The
obligation of each Lender to make any Loan or of each Issuer to issue any Letter
of Credit shall be subject to the further conditions precedent that:
(a) The following statements shall be true on the date of such Loan or
issuance, before and after giving effect thereto and to the application of the
proceeds therefrom and to such issuance (and the acceptance by the Borrower of
the proceeds of such Loan or of the issuance by such Issuer of such Letter of
Credit shall constitute a representation and warranty by the Borrower that on
the date of such Loan or issuance such statements are true):
(i) The representations and warranties of the Borrower contained in
Article IV and of each Loan Party in the other Loan Documents are correct
on and as of such date as though made on and as of such date except
insofar as such representations and warranties speak only as of a prior
date or reflect transactions and events after the Effective Date permitted
by the Loan Documents; and
(ii) No Default or Event of Default has occurred and is continuing or
would result from the Loans being made or any Letter of Credit being
issued on such date.
(b) The making of the Loans or the issuance of such Letter of Credit on
such date does not violate any Requirement of Law and is not enjoined,
temporarily, preliminarily or permanently.
(c) No Revolving Credit Loans shall be made if any Swing Loans are
outstanding unless the proceeds of such Revolving Credit Loans are being used to
repay in full the Swing Loans or the Swing Bank otherwise consents.
53
(d) The Agent shall have received such additional documents,
information and materials as any Lender Party, through the Agent, may reasonably
request.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
To induce the Lender Parties and the Agent to enter into this
Agreement, the Borrower represents and warrants to the Lender Parties and the
Agent that:
4.1. Corporate Existence; Compliance with Law. Each Loan Party and each
of its Subsidiaries (i) is a corporation duly organized, validly existing and in
good standing under the laws of the jurisdiction of its incorporation; (ii) is
duly qualified or licensed as a foreign corporation and in good standing under
the laws of each jurisdiction in which it is required to so qualify or be
licensed, except for failures which in the aggregate would have no Material
Adverse Effect; (iii) has all requisite corporate power and authority and the
legal right to own, pledge, mortgage and operate its properties, to lease the
property it operates under lease and to conduct its business as now or currently
proposed to be conducted; (iv) is in compliance with its certificate of
incorporation and by-laws; (v) is in compliance with all other applicable
Requirements of Law, except for such non-compliances as would in the aggregate
have no Material Adverse Effect; and (vi) except as disclosed on Schedule 4.19,
has all necessary licenses, permits, consents or approvals from or by, has made
all necessary filings with, and has given all necessary notices to, each
Governmental Authority having jurisdiction, to the extent required for such
ownership, operation and conduct, except for licenses, permits, consents or
approvals which can be obtained by the taking of ministerial action to secure
the grant or transfer thereof or failures which, in the aggregate would have no
Material Adverse Effect.
4.2. Corporate Power; Authorization; Enforceable Obligations. (a) The
execution, delivery and performance by each Loan Party of the Loan Documents to
which it is a party and the consummation of the transactions related to the
financing contemplated hereby:
(i) are within such Loan Party's corporate powers;
(ii) have been duly authorized by all necessary corporate action,
including, without limitation, the consent of stockholders where required;
and
54
(iii) do not (A) contravene any Loan Party's or any of its
Subsidiaries' respective certificates of incorporation or by-laws or other
comparable governing documents, (B) as to any Loan Party, violate any
other applicable Requirement of Law (including, without limitation,
Regulations G, T, U and X of the Board of Governors of the Federal Reserve
System), or any order or decree of any Governmental Authority or
arbitrator, (C) conflict with or result in the breach of, or constitute a
default under, or result in or permit the termination or acceleration of,
any Material Contractual Obligation of any Loan Party or any of its
Subsidiaries, or (D) result in the creation or imposition of any Lien upon
any of the property of any Loan Party or any of its Subsidiaries, other
than those in favor of the Agent pursuant to the Collateral Documents.
(b) No authorization by, approval of, notice to, or filing or
registration with, any Governmental Authority or any other Person, other than
those which have been obtained or made and copies of which in the case of those
involving a Governmental Authority have been delivered to the Agent, is required
for (i) the due execution, delivery, recordation, filing or performance by any
Loan Party of this Agreement, the Revolving Credit Notes or any other Loan
Document to which it is or is to be a party, or for the consummation of the
transactions contemplated hereby, (ii) the grant by any Loan Party of the Liens
granted by it pursuant to the Collateral Documents, (iii) the perfection or
maintenance of the Liens created by the Collateral Documents (including, as of
the Effective Date, the first priority nature thereof (subject to Permitted
Liens)) or (iv) the exercise by the Agent or any Lender Party of its rights
under the Loan Documents or the remedies in respect of the Collateral pursuant
to the Collateral Documents. On any date after the Effective Date, no
authorization by, approval of, notice to, or filing or registration with, any
Governmental Authority or any other Person, other than those which have been
obtained or made and copies of which in the case of those involving a
Governmental Authority have been delivered to the Agent, is required for the
perfection or maintenance of the Liens created by the Collateral Documents
(including the first priority thereof (subject to Permitted Liens)).
(c) This Agreement has been and each of the other Loan Documents will
have been upon delivery thereof pursuant to Section 3.1, duly executed and
delivered by each Loan Party party thereto. This Agreement is, and each other
Loan Document will be when delivered hereunder, the legal, valid and binding
obligation of each Loan Party party thereto, enforceable against it in
accordance with its terms subject to applicable bankruptcy, insolvency,
moratorium or similar laws affecting creditors' rights generally and to general
principles of equity regardless of whether enforcement is sought in a proceeding
in equity or at law.
55
4.3. Taxes. All federal, and all material state, local and foreign tax
returns, reports and statements (collectively, the "Tax Returns") required to be
filed by any Loan Party or any of their Tax Affiliates have been filed with the
appropriate governmental agencies in all jurisdictions in which such Tax Returns
are required to be filed, and all taxes, charges and other impositions due and
payable have been timely paid prior to the date on which any fine, penalty,
interest, late charge or loss may be added thereto for non-payment thereof,
except where contested in good faith and by appropriate proceedings if adequate
reserves therefor have been established on the books of such Loan Party or such
Tax Affiliate in accordance with GAAP and all such non-payments, in the
aggregate, if adversely determined would have no Material Adverse Effect. Proper
and accurate amounts have been withheld by each Loan Party and each of their Tax
Affiliates from their respective employees for all periods in material
compliance with the tax, social security and unemployment withholding provisions
of applicable federal, state, local and foreign law and such withholdings have
been timely paid to the respective Governmental Authorities. No Loan Party or
any of their Tax Affiliates has (i) except as set forth on Schedule 4.3,
executed or filed with the IRS or any other Governmental Authority any agreement
or other document (which agreement or other document is presently in effect)
extending, or having the effect of extending, the period for assessment or
collection of any charges, or agreed or been requested to make any adjustment
under Section 481(a) of the Code by reason of a change in accounting method or
otherwise which will result in any material aggregate tax liability for the
three taxable years beginning with the year of adjustment; or (ii) except as set
forth on Schedule 4.3, any obligation under any written or oral tax sharing
agreement other than the Tax Sharing Agreement.
4.4. Full Disclosure. No written statement prepared or furnished by or
on behalf of any Loan Party or any of its Affiliates in connection with any of
the Loan Documents or the consummation of the transactions contemplated thereby,
and no financial statement delivered pursuant hereto or thereto, contains any
untrue statement of a material fact or omits to state a material fact necessary
to make the statements contained herein or therein not misleading, if, in either
case, such fact is material to an understanding of the financial condition,
business, properties or prospects of any Loan Party or any of its Affiliates or
the ability of such Persons to fulfill its obligations under any Loan Document
to which it is a party.
4.5. Financial Matters. (a) (i) The Consolidated balance sheet of WHX
and its Consolidated Subsidiaries as at December 31, 1998, and the related
Consolidated statements of income, retained earnings and cash flow of WHX and
its Subsidiaries for the fiscal year then ended and (ii) the Consolidated
balance sheet of the Borrower and its Consolidated Subsidiaries as at December
31, 1998, and the related Consolidated statements of income, retained earnings
and cash flow of the Borrower
56
and its Subsidiaries for the fiscal year then ended, in each case certified by
PricewaterhouseCoopers, LLP, and the Consolidated balance sheet of the Loan
Party Consolidated Group as at February 28, 1999, and the related Consolidated
statements of income, retained earnings and cash flow of the Loan Party
Consolidated Group for the two months then ended, duly certified by the chief
financial officer of Holdings, copies of which have been furnished to each
Lender Party, fairly present, subject, in the case of said balance sheets as at
February 28, 1999, and said statements of income and cash flow for the two
months then ended, to year-end audit adjustments, the Consolidated financial
condition of such Person and its Subsidiaries as at such dates and the
Consolidated results of the operations of such Person and its Subsidiaries for
the period ended on such date, all in conformity with GAAP.
(b) Since December 31, 1998 and through the Effective Date, there has
been no Material Adverse Change and there have been no events or developments
that in the aggregate have had a Material Adverse Effect.
(c) None of the Loan Parties or any of its Subsidiaries had at December
31, 1998 any material obligation, contingent liability or liability for taxes,
long-term leases or unusual forward or long-term commitment that is required by
GAAP to be included in a balance sheet which is not reflected in the balance
sheet referred to in subsection (a) above or in the notes thereto (other than in
connection with the Receivables Securitization).
(d) As of the Effective Date, each Loan Party is, and each Loan Party
and its Subsidiaries are, on a consolidated basis, Solvent.
(e) The unaudited pro forma consolidated balance sheet of the Borrower
and its Consolidated Subsidiaries, a copy of which has been delivered to each
Lender Party, has been prepared as of January 1, 1999 and reflects as of such
date, on a pro forma basis, the projected Consolidated financial condition of
the Borrower and its Subsidiaries. Such pro forma financial statements
(including any related schedules and notes) have been prepared in accordance
with GAAP on the basis of the statements and assumptions set forth in the
respective notes thereto. The Projections and assumptions expressed therein were
reasonably based on the information available to the Borrower at the time so
furnished and on the Effective Date, including, without limitation, the World
Steel Dynamics Outlook Monitor Report for February 1999, titled Global Pricing
Forecast. The Lender Parties hereby acknowledge as reasonable the economic
forecast contained in such Industry Review and the Loan Party Consolidated
Group's reliance thereon and that such Projections are subject to significant
uncertainties and contingencies, many of which are beyond the Borrower's
control, and that no assurance can be given that the Projections will be
realized.
57
4.6. Litigation. Except as set forth in Schedule 4.6, there are no
pending or, to the knowledge of the Borrower, threatened actions, investigations
or proceedings affecting any Loan Party or any of its Subsidiaries before any
Governmental Authority or arbitrator which, in the aggregate, would have a
Material Adverse Effect. The performance of any action by any Loan Party
required or contemplated by any of the Loan Documents is not restrained or
enjoined (either temporarily, preliminarily or permanently), and no material
adverse condition has been imposed by any Governmental Authority or arbitrator
upon any of the foregoing transactions.
4.7. Margin Regulations. No Loan Party is engaged in the business of
extending credit for the purpose of purchasing or carrying margin stock (within
the meaning of Regulation U issued by the Board of Governors of the Federal
Reserve System), and no proceeds of any Borrowing will be used to purchase or
carry any margin stock or to extend credit to others for the purpose of
purchasing or carrying any margin stock in contravention of Regulation G, T, U
or X of the Board of Governors of the Federal Reserve System.
4.8. Ownership of the Borrower and Subsidiaries. (a) Set forth on
Schedule 4.8 hereto as may be supplemented from time to time pursuant to Section
6.11(n), is a complete and accurate list showing, as to the Borrower and each
Guarantor, the jurisdiction of its incorporation, the number of shares of each
class of Stock authorized, the number outstanding on the date hereof and the
ownership of the outstanding shares of each class. No authorized but unissued
shares, no treasury shares and, to the best knowledge of the Borrower and each
Guarantor, no other outstanding shares of capital stock of the Borrower or such
Guarantor are subject to any option, warrant, right of conversion or purchase or
any similar right. There are no agreements or understandings with respect to the
voting, sale or transfer of any shares of capital stock of the Borrower or any
Guarantor or, to the best knowledge of the Borrower or such Guarantor, any
agreement restricting the transfer or hypothecation of any such shares, except,
in the case of the Borrower, for the USWA Right of First Refusal and, in the
case of PCC and Wheeling Construction, under the Holdings Pledge Agreement.
(b) Set forth on Schedule 4.8 hereto, as may be supplemented from time
to time pursuant to Section 6.11(n), is a complete and accurate list showing all
direct and indirect Subsidiaries of the Borrower and, as to each such
Subsidiary, the jurisdiction of its incorporation, the number of shares of each
class of Stock authorized, the number outstanding on the date hereof and the
percentage of the outstanding shares of each such class owned (directly or
indirectly) by the Borrower. No Stock of any Subsidiary of the Borrower is
subject to any outstanding option, warrant, right of conversion or purchase or
any similar right. All of the outstanding Stock of each such
58
Subsidiary has been validly issued, is fully paid and non-assessable and is
owned by the Borrower, free and clear of all Liens other than the Liens granted
to the Agent pursuant to the Security Agreement. Neither the Borrower nor any
such Subsidiary is a party to, or has knowledge of, any agreement restricting
the transfer or hypothecation of any Stock of any such Subsidiary. The Borrower
does not own or hold, directly or indirectly, any capital stock or equity
security of, or any equity interest in, any Person other than such Subsidiaries.
4.9. ERISA. (a) Schedule 4.9 separately identifies, as of the Effective
Date, all Plans, all Qualified Plans, all Title IV Plans, all Multiemployer
Plans, all unfunded Pension Plans and all Welfare Benefit Plans that provide
retiree benefits.
(b) Except as set forth on Schedule 4.9, each Qualified Plan has been
determined by the IRS to qualify under Section 401 of the Code, and the trusts
created thereunder have been determined to be exempt from tax under the
provisions of Section 501 of the Code, and to the best knowledge of the
Borrower, nothing has occurred which would cause the loss of such qualification
or tax-exempt status.
(c) Except as set forth on Schedule 4.9, each Plan is in compliance in
all material respects with applicable provisions of ERISA and the Code,
including, without limitation, the filing of reports required under the Code or
ERISA which are true and correct in all material respects as of the date filed,
and, with respect to each Plan (other than a Qualified Plan), all required
contributions and benefits have been paid in accordance with the provisions of
each such Plan.
(d) No Loan Party or any of its Subsidiaries or any ERISA Affiliate,
with respect to any Qualified Plan, has failed to make any contribution or pay
any amount due as required by Section 412 of the Code or Section 302 of ERISA or
the terms of any such Qualified Plan.
(e) Except as set forth on Schedule 4.9, there has been no, nor is
there reasonably expected to occur any, ERISA Event or event described in
Section 4068 of ERISA with respect to any Title IV Plan.
(f) Except as set forth on Schedule 4.9, there are no pending or, to
the knowledge of the Borrower, threatened claims, actions or lawsuits (other
than claims for benefits in the normal course), asserted or instituted against
(i) any Plan or its assets, (ii) any fiduciary with respect to any Plan or (iii)
any Loan Party, any of its Subsidiaries or any ERISA Affiliate with respect to
any Plan.
59
(g) Except as set forth on Schedule 4.9, none of the Borrower, any of
its Subsidiaries or any ERISA Affiliate has incurred, or has any reasonable
likelihood of incurring, any Withdrawal Liability under Section 4201 of ERISA as
a result of a complete or partial withdrawal from a Multiemployer Plan (and no
event has occurred which, with the giving of notice under Section 4219 of ERISA,
would result in any such liability).
(h) Except as set forth on Schedule 4.9, within the last five years
none of any Loan Party, any of its Subsidiaries or any ERISA Affiliate has
engaged in a transaction which resulted in a Title IV Plan with Unfunded Pension
Liabilities being transferred outside of the "controlled group" (within the
meaning of Section 4001(a)(14) of ERISA) of any such entity.
4.10. Liens. There are no Liens of any nature whatsoever on any
properties of any Loan Party or any of their Subsidiaries other than those
permitted by Section 7.1 and as described on Schedule 4.10. The Liens granted by
the Loan Parties to the Agent pursuant to the Collateral Documents are fully
perfected first priority Liens in and to the Collateral (subject to Permitted
Liens).
4.11. Replacement Notes. Neither the Replacement Indenture nor the Term
Loan Agreement has been amended or modified since its effective date and no
provision therein has been waived and no event has occurred or condition exists
under the Replacement Notes, the effect of such event or condition is to
accelerate or permit the acceleration of, the maturity of the Replacement Notes.
4.12. No Burdensome Restrictions; No Defaults. (a) No Loan Party or any
of its Subsidiaries (i) is a party to any Contractual Obligation which would
have a Material Adverse Effect or the performance of which by any thereof,
either uncondi tionally or upon the happening of an event, will result in the
creation of a Lien (other than a Lien permitted by Section 7.1) on the property
or assets of any thereof, (ii) is subject to a charter or corporate restriction
that would have a Material Adverse Effect, or (iii) is, to the knowledge of the
Borrower, in default (except a non-payment default on any of the Replacement
Notes, the effect of which is not to accelerate or permit the acceleration of
the maturity of any of the Replacement Notes) under or with respect to any
Contractual Obligation other than those defaults which in the aggregate would
have no Material Adverse Effect.
(b) No Event of Default has occurred and is continuing.
(c) No Requirement of Law has a Material Adverse Effect.
60
(d) Except as provided in the Indentures, none of the Loan Parties'
Subsidiaries is subject to any restriction or limitation on its ability to
declare or make any dividend payment or other distribution on account of any
shares of any class of its Stock or on its ability to purchase, redeem, or
otherwise acquire for value or make any payment in respect of any such shares or
any shareholder rights.
4.13. No Other Ventures. Except as listed on Schedule 4.13, as may be
supplemented from time to time pursuant to Section 6.11(n), or otherwise
permitted under Section 7.6, no Loan Party or any of its Subsidiaries is engaged
in any joint venture or partnership with any other Person.
4.14. Investment Company Act. The Borrower is not an "investment
company" or an "affiliated person" of, or "promoter" or "principal underwriter"
for, an "investment company", as such terms are defined in the Investment
Company Act of 1940, as amended. The making of the Loans and the issuance of the
Letters of Credit by the Lender Parties, the application of the proceeds and
repayment thereof by the Borrower and the consummation of the transactions
contemplated by the Loan Documents on the part of any Loan Party will not
violate any provision of such Act or any rule, regulation or order issued by the
Securities and Exchange Commission thereunder.
4.15. Insurance. As of the Effective Date, all policies of insurance of
any kind or nature owned by or issued to any Loan Party or any of its
Subsidiaries, including, without limitation, policies of life, fire, theft,
product liability, public liability, property damage, other casualty, employee
fidelity, workers' compensation, employee health and welfare, title and property
insurance, are in full force and effect and are of a nature and provide such
coverage as is sufficient and as is customarily carried by companies of the size
and character of the Borrower and its Subsidiaries.
4.16. Labor Matters. (a) Except as set forth on Schedule 4.16, there
are no strikes, work stoppages, slowdowns or lockouts pending, or reasonably
likely to occur in the immediate future, against or involving any Loan Party or
any of its Subsidiaries, other than those which in the aggregate would have no
Material Adverse Effect.
(b) Except as set forth on Schedule 4.16, there are no arbitrations or
grievances pending against or involving any Loan Party or any of its
Subsidiaries, nor, to the best knowledge of the Loan Parties and their
Subsidiaries, are there any arbitrations or grievances threatened involving any
Loan Party or any of its Subsidiaries, other than those which in the aggregate
would have no Material Adverse Effect.
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(c) Except as set forth on Schedule 4.16, as of the Effective Date, no
Loan Party or any of its Subsidiaries are parties to, or have any obligations
under, any collective bargaining agreement.
(d) Except as set forth on Schedule 4.16, as of the Effective Date,
there are no representation proceedings pending or, to the best knowledge of the
Borrower, threatened with the National Labor Relations Board, and no labor
organization or group of employees of any Loan Party or any of its Subsidiaries
have made a pending demand for recognition.
(e) There are no unfair labor practice charges, grievances or
complaints pending or in process or, to the best knowledge of the Borrower,
threatened by or on behalf of any employee or group of employees of any Loan
Party or any of its Subsidiaries other than those which in the aggregate would
have no Material Adverse Effect.
(f) Except as set forth on Schedule 4.16, there are no complaints or
charges against any Loan Party or any of its Subsidiaries pending or, to the
best knowledge of the Borrower, threatened to be filed with any Governmental
Authority or arbitrator based on, arising out of, in connection with, or
otherwise relating to the employment by any Loan Party or any of its
Subsidiaries of any individual, other than those which in the aggregate would
have no Material Adverse Effect.
(g) Each Loan Party and each of its Subsidiaries are in compliance with
all laws, and all orders of any court, governmental agency or arbitrator,
relating to the employment of labor, including all such laws relating to wages,
hours, collective bargaining, discrimination, civil rights, and the payment of
withholding and/or social security and similar taxes, other than such
non-compliances as in the aggregate would have no Material Adverse Effect.
4.17. Force Majeure. Neither the business nor the properties of any
Loan Party or any of its Subsidiaries is currently suffering from the effects of
any fire, explosion, accident, drought, storm, hail, earthquake, embargo, act of
God or of the public enemy or other casualty (whether or not covered by
insurance) other than those which in the aggregate would have no Material
Adverse Effect.
4.18. Use of Proceeds. The proceeds of the Loans and the Letters of
Credit are being used solely (i) to refinance Indebtedness outstanding under the
Original Credit Agreement, (ii) for the payment of related transaction costs,
fees and expenses and (iii) for general working capital purposes and other
general corporate
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purposes of the Loan Parties, including, without limitation,
Investments permitted under Section 7.6.
4.19. Environmental Protection. Except as disclosed on Schedule 4.19:
(a) The operations of each Loan Party and each of its Subsidiaries or
tenants comply with all Environmental Laws, other than such non-compliance as in
the aggregate would have no Material Adverse Effect;
(b) Each Loan Party and each of its Subsidiaries have obtained all
environmental, health and safety Permits necessary for their operations other
than those failures which in the aggregate would have no Material Adverse
Effect, and all such Permits are in good standing, except where such failure
would have no Material Adverse Effect, and each Loan Party and each of its
Subsidiaries are in compliance with the terms and conditions of such Permits
other than for such non-compliance which in the aggregate would have no Material
Adverse Effect;
(c) Neither any Loan Party nor any of its Subsidiaries have any
currently or previously owned or leased property or operations subject to any
threatened or outstanding order from or agreement with any Governmental
Authority or other Person or subject to any judicial or docketed administrative
proceeding respecting (i) Environmental Laws, (ii) Remedial Action or (iii)
Environmental Liabilities and Costs, other than those which in the aggregate
would have no Material Adverse Effect;
(d) As of the Effective Date, no Loan Party and none of their
Subsidiaries is a treatment, storage or disposal facility requiring a permit
under the Resource Conservation and Recovery Act, 42 U.S.C. ss. 6901 et seq.,
the regulations thereunder or any state analog and, as of the Effective Date,
each Loan Party and each of its Subsidiaries is in compliance with all
applicable financial responsibility requirements of all Environmental Laws,
including, without limitation, those contained in 40 C.F.R., parts 264, 265 and
280, subparts H, and any state equivalents, other than those that in the
aggregate would have no Material Adverse Effect;
(e) No Loan Party and none of their Subsidiaries has filed or failed to
file any notice required under any applicable Environmental Law reporting a
Release other than those which in the aggregate would have no Material Adverse
Effect;
(f) There are not now nor have there been in the past any events,
conditions or circumstances associated with or arising from currently owned or
leased properties or current operations of any Loan Party or any of its
Subsidiaries or, to the best of the Borrower's knowledge, tenants or, to the
best of the Borrower's knowledge,
63
any events, conditions or circumstances associated with or arising from any
previously owned or leased properties or the previous operations of any Loan
Party or any of its Subsidiaries or, to the best of the Borrower's knowledge,
tenants, which may give rise to any Environmental Liabilities and Costs other
than those in the aggregate that would have no Material Adverse Effect;
(g) As of the Effective Date, no Environmental Lien and no unrecorded
Environmental Lien has attached to any property of any Loan Party or any of its
Subsidiaries and, as of any date after the Effective Date, no Environmental Lien
and no unrecorded Environmental Lien has attached to any property of any Loan
Party or any of its Subsidiaries other than those that in the aggregate would
have no Material Adverse Effect; and
(h) With respect to any property owned, leased or operated by any Loan
Party or any of its Subsidiaries: (i) there are no underground storage tanks or
surface impoundments, (ii) except to the extent that the presence thereof, in
the aggregate, would not have a Material Adverse Effect, there is not any
asbestos- containing material in friable form or any airborne asbestos
containing material in excess of amounts proscribed by Environmental Laws, or
(iii) there is not any polychlorinated biphenyls ("PCBs") other than those used,
maintained or disposed of in compliance with all applicable Environmental Laws
or the removal of which would have a Material Adverse Effect.
4.20. Intellectual Property. The Loan Parties and their Subsidiaries
own or license or otherwise have the right to use all material licenses,
permits, patents, patent applications, trademarks, trademark applications,
service marks, trade names, copyrights, copyright applications, franchises,
authorizations and other intellectual property rights that are necessary for the
operation of their respective businesses, without infringement upon or conflict
with the rights of any other Person with respect thereto, including, without
limitation, all trade names, except where such failure would have no Material
Adverse Effect. To the best knowledge of the Borrower, no slogan or other
advertising device, product, process, method, substance, part or other material
now employed, or now contemplated to be employed, by any Loan Party or any of
its Subsidiaries infringes upon or conflicts with any rights owned by any other
Person, and no claim or litigation regarding any of the foregoing is pending or
threatened, other than those which in the aggregate would have no Material
Adverse Effect. No patent, invention, device, application, principle or any
statute, law, rule, regulation, standard or code relating thereto is pending or,
to the knowledge of the Borrower, proposed, other than those the consequences of
which, in the aggregate would have no Material Adverse Effect.
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4.21. Title. (a) The Loan Parties and their Subsidiaries own fee simple
absolute title to all of the Real Estate described in Schedule 4.21(a), and
marketable title to, or valid leasehold interests pursuant to the Leases in, all
other properties and assets purported to be owned by any Loan Party or any of
their Subsidiaries, including, without limitation, valid leasehold interests
pursuant to the Leases and all property reflected in the balance sheet referred
to in Section 4.5(a), except for such failures which in the aggregate would have
no Material Adverse Effect. None of such properties and assets, including,
without limitation, the Real Estate and the Leases, is subject to any Lien,
except Liens permitted hereunder. The Loan Parties and their Subsidiaries have
received all deeds, assignments, waivers, consents, non-disturbance and
recognition or similar agreements, bills of sale and other documents, and have
duly effected all recordings, filings and other actions necessary to establish,
protect and perfect such Loan Parties and its Subsidiaries' right, title and
interest in and to all such property except for such failures which would in the
aggregate have no Material Adverse Effect.
(b) All real property leased, with an annual base rent of at least
$100,000, at the date of this Agreement by any Loan Party or any of its
Subsidiaries is listed on Schedule 4.21(b), setting forth information regarding
the commencement date, termination date, renewal options and purchase options
(if any) and annual base rents as specified therein. Each of such leases is
valid and enforceable in accordance with its terms and is in full force and
effect other than those leases which if not valid and enforceable, would in the
aggregate have no Material Adverse Effect. None of any Loan Party or any of its
Subsidiaries or, to the knowledge of the Borrower, any other party to any such
lease is in default of its obligations thereunder or has delivered or received
any notice of default under any such lease and no event has occurred which, with
the giving of notice, the passage of time or both, would constitute a default
under any such lease, except, in either case, for defaults the consequence of
which in the aggregate would have no Material Adverse Effect.
(c) Except as listed on Schedule 4.21(c), neither any Loan Party nor
any of its Subsidiaries owns or holds, or is obligated under or a party to, any
option, right of first refusal or other contractual right to purchase, acquire,
sell, assign or dispose of any real property owned or leased by such Loan Party
or any of its Subsidiaries.
(d) All components of all improvements included within the real
property owned or leased by any Loan Party or any of its Subsidiaries
(collectively, "Improvements"), including, without limitation, the roofs and
structural elements thereof and the heating, ventilation, air conditioning,
plumbing, electrical, mechanical, sewer, waste water, storm water, paving and
parking equipment, systems and facilities
65
included therein, are in good working order and repair other than such failures
the consequences of which in the aggregate would have no Material Adverse
Effect. All water, gas, electrical, steam, compressed air, telecommunication,
sanitary and storm sewage lines and systems and other similar systems serving
the real property owned or leased by any Loan Party or any of its Subsidiaries
are installed and operating and are sufficient to enable the real property owned
or leased by such Loan Party and its Subsidiaries to continue to be used and
operated in the manner currently being used and operated other than such
failures which in the aggregate would have no Material Adverse Effect, and
neither any Loan Party nor any of its Subsidiaries has any knowledge of any fact
or condition that could result in the termination or material impairment of the
furnishing thereof, other than such failures which in the aggregate would have
no Material Adverse Effect. No Improvement or portion thereof is dependent for
its access, operation or utility on any land, building or other Improvement not
included in the real property owned or leased by any Loan Party or any of its
Subsidiaries except where the consequences of such in the aggregate would have
no Material Adverse Effect.
(e) All Permits required to have been issued or appropriate to enable
all real property owned or leased by any Loan Party or any of its Subsidiaries
to be lawfully occupied and used for all of the purposes for which they are
currently occupied and used, have been lawfully issued and are in full force and
effect, other than such failures the consequences of which in the aggregate
would have no Material Adverse Effect.
(f) Neither any Loan Party nor any of its Subsidiaries has received any
notice, nor has any knowledge, of any pending, threatened or contemplated
condemnation proceeding affecting any real property owned or leased by such Loan
Party or any of its Subsidiaries or any part thereof, or any proposed
termination or impairment of any parking at any such owned or leased real
property or of any sale or other disposition of any real property owned or
leased by such Loan Party or any of its Subsidiaries or any part thereof in lieu
of condemnation, except for notices affecting real property which in the
aggregate, if lost, would have no Material Adverse Effect.
(g) No portion of any real property owned or leased by any Loan Party
or any of its Subsidiaries has suffered any material damage by fire or other
casualty loss which has not heretofore been completely replaced, repaired and
restored to its original condition, except to the extent that the failure to
replace, repair or restore such real property would in the aggregate have no
Material Adverse Effect.
4.22. Year 2000. The Borrower has (a) initiated a review and assessment
of all areas within its and each of its Subsidiaries' business and operations
(including those
66
materially affected by suppliers, vendors and customers) that could be
materially adversely affected by the risk that computer applications used by the
Borrower or any of its Subsidiaries may be unable to recognize and perform
properly date-sensitive functions involving certain dates prior to and any date
after December 31, 1999 (the "Year 2000 Problem"), (b) used its reasonable
efforts to develop a plan and timetable for addressing the Year 2000 Problem on
a timely basis and (c) to date, implemented in all material respects that plan
in accordance with such timetable. Based on the foregoing, the Borrower believes
that all computer applications that are material to its or any of its
Subsidiaries' business and operations are reasonably expected on a timely basis
to be able to perform properly date-sensitive functions for all dates before and
after January 1, 2000 ("Year 2000 Compliant"), except to the extent that a
failure to do so could not reasonably be expected to have a Material Adverse
Effect.
ARTICLE V
FINANCIAL COVENANTS
As long as any of the Obligations or the Revolving Credit Commitments
remain outstanding, unless the Majority Lenders otherwise consent in writing:
5.1. Maintenance of Senior Leverage Ratio. The Loan Party Consolidated
Group shall maintain as of the last day of each Fiscal Quarter a ratio of Senior
Secured Debt, as of such last day, to EBITDA, determined on the basis of the
four Fiscal Quarters ending on such day, of not more than the ratio set forth
below for such period:
For the Period Ending Maximum Senior Leverage Ratio
--------------------- -----------------------------
June 30, 1999 4.75:1.00
September 30, 1999 4.75:1.00
December 31, 1999 4.75:1.00
March 31, 2000 4.00:1.00
June 30, 2000 3.50:1.00
September 30, 2000 3.00:1.00
December 31, 2000 3.00:1.00
March 31, 2001 2.75:1.00
June 30, 2001 2.75:1.00
September 30, 2001 2.50:1.00
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December 31, 2001 2.50:1.00
March 31, 2002 2.25:1.00
June 30, 2002 2.25:1.00
September 30, 2002 2.15:1.00
December 31, 2002 2.15:1.00
March 31, 2003 2.15:1.00
and thereafter
5.2. Maintenance of Interest Coverage Ratio. The Loan Party
Consolidated Group shall maintain as of the last day of each Fiscal Quarter an
Interest Coverage Ratio for such period not less than the ratio set forth below:
For the Fiscal Minimum Ratio
Quarter Ending Required
June 30, 1999 0.90:1.00
September 30, 1999 0.90:1.00
December 31, 1999 0.90:1.00
March 31, 2000 1.25:1.00
June 30, 2000 1.50:1.00
September 30, 2000 1.70:1.00
December 31, 2000 1.85:1.00
March 31, 2001 2.00:1.00
June 30, 2001 2.15:1.00
September 30, 2001 2.25:1.00
December 31, 2001 2.25:1.00
March 31, 2002 2.25:1.00
June 30, 2002 2.25:1.00
September 30, 2002 2.25:1.00
December 31, 2002 2.25:1.00
March 31, 2003 2.25:1.00
and thereafter
5.3. Limitation on Capital Expenditures. The Loan Party Consolidated
Group shall not make, or permit any of their Subsidiaries to make, Capital
68
Expenditures for the period from January 1, 1999 through the last day of each
Fiscal Year set forth below in excess of the amount set forth opposite such
date:
Maximum Amount of
For the Fiscal Year Ending Capital Expenditures
-------------------------- --------------------
December 31, 1999 $120,000,000
December 31, 2000 $110,000,000
December 31, 2001 $110,000,000
December 31, 2002 $130,000,000
December 31, 2003 $120,000,000
and thereafter
provided, however, that if, at the end of any Fiscal Year set forth above, the
amount specified above for such Fiscal Year exceeds the amount of Capital
Expenditures made by the Borrower and its Subsidiaries during such Fiscal Year
(the amount of such excess being the "Excess Amount"), the Borrower and its
Subsidiaries shall be entitled to make additional Capital Expenditures in the
succeeding Fiscal Year in an amount (such amount being referred to herein as the
"Carryover Amount") equal to the lesser of (i) the Excess Amount and (ii) 50% of
the amount specified above for such prior Fiscal Year. The first amount of
Capital Expenditures spent in any such succeeding Fiscal Year shall be deemed to
be the Carryover Amount.
ARTICLE VI
ADDITIONAL AFFIRMATIVE COVENANTS
As long as any of the Obligations or the Revolving Credit Commitments
remain outstanding, unless the Majority Lenders otherwise consent in writing:
6.1. Compliance with Laws, Etc. The Loan Parties shall comply, and
shall cause each of their Subsidiaries to comply, with all Requirements of Law,
Contractual Obligations, commitments, instruments, licenses, permits and
franchises, including, without limitation, all Permits, other than such
non-compliances the consequences of which in the aggregate would have no
Material Adverse Effect.
6.2. Conduct of Business. The Loan Parties shall (a) conduct, and shall
cause each of their Subsidiaries to conduct, its business in a regular manner
consistent with sound business practice in such Loan Party's or such
Subsidiary's industry; (b) use, and cause each of their Subsidiaries to use, its
reasonable efforts, in the
69
ordinary course and consistent with past practice, to preserve its business and
the goodwill and business of the customers, advertisers, suppliers and others
having business relations with any Loan Party or any of their Subsidiaries; (c)
preserve, and cause each of their Subsidiaries to preserve, all registered
patents, trademarks, trade names, copyrights and service marks necessary for the
conduct of its business; and (d) perform and observe, and cause each of their
Subsidiaries to perform and observe, all the terms, covenants and conditions
required to be performed and observed by it under its Contractual Obligations
(including, without limitation, to pay all rent and other charges payable under
any lease and to pay all other payables and obligations as they become due), and
do, and cause their Subsidiaries to do, all things necessary to preserve and to
keep unimpaired its rights under such Contractual Obligations, other than, in
the case of (a) through (d), such failures the consequences of which in the
aggregate would have no Material Adverse Effect.
6.3. Payment of Taxes, Etc. The Loan Parties shall pay and discharge,
and shall cause each of their Subsidiaries to pay and discharge, before the same
shall become delinquent, all lawful governmental claims, taxes, assessments and
charges or levies against it or any of its Subsidiaries or for which its or any
of its Subsidiaries assets may be subject, except where contested in good faith,
by proper proceedings, if adequate reserves therefor have been established on
the books of such Loan Party or such Subsidiary in conformity with GAAP and
where the consequence of all such non- payments in the aggregate would have no
Material Adverse Effect. To the extent such claims, taxes, assessments, charges
or levies are computed on a consolidated, combined or unitary basis, any
payments by any Loan Party and its Subsidiaries shall not exceed their allocable
share thereof.
6.4. Maintenance of Insurance. The Loan Parties shall maintain, and
shall cause each of their Subsidiaries to maintain, insurance with responsible
and reputable insurance companies or associations in such amounts and covering
such risks as is usually carried by companies engaged in similar businesses and
owning similar properties in the same general areas in which such Loan Party or
such Subsidiary operates and as otherwise satisfactory to the Agent, in its sole
judgment exercised reasonably, and, in any event, all insurance required by any
Collateral Document. All insurance required by any Collateral Document shall
name the Agent as additional insured or loss payee, as the Agent shall
determine. Each Loan Party will furnish to the Agent (together with copies for
each Lender) from time to time such information as may be reasonably requested
by the Agent as to such insurance.
6.5. Preservation of Corporate Existence, Etc. Each Loan Party shall
preserve and maintain, and shall cause each of their Subsidiaries to preserve
and maintain, its corporate existence and, except for failures which in the
aggregate would
70
have no Material Adverse Effect, all rights (charter and statutory) and
franchises, except as permitted by Section 7.5.
6.6. Access. Each Loan Party shall, at any reasonable time and from
time to time, upon reasonable prior notice, (i) permit the Agent, any agents and
any representatives thereof, to (A) examine and make copies of and abstracts
from the records and books of account of such Loan Party and each of its
Subsidiaries, (B) visit the properties of such Loan Party and each of its
Subsidiaries and (C) communicate directly with such Loan Party's independent
certified public accountants, and (ii) permit the Agent, any agents and any
representatives thereof, to discuss the affairs, finances and accounts of such
Loan Party each of its Subsidiaries with any of their respective officers or
directors. Each Loan Party hereby authorizes its independent certified public
accountants to disclose to the Agent, any agents and any representatives
thereof, which authorization shall be confirmed at the request of the Agent, any
and all financial statements and other information of any kind, including,
without limitation, to furnish copies of any management letter, or the substance
of any oral information that such accountants may have with respect to the
business, financial condition, results of operations or other affairs of such
Loan Party or any of its Subsidiaries, except that such accountants shall not be
obligated to disclose to the Agent or any agents and any representatives thereof
its work papers or other confidential information, in each case relating to
either (1) any preliminary reports or studies conducted by such accountants
unrelated to any information previously disclosed to the Agent, any agents or
any representatives thereof, (2) information provided by the attorneys of any
Loan Party with respect to litigation matters if such information is
confidential by reason of the applicable attorney work product doctrine or (3)
any reports or communications concerning the negotiations of the collective
bargaining agreements with any Loan Party's unions at any time prior to the
execution of such agreements.
6.7. Keeping of Books. Each Loan Party shall keep, and shall cause each
of its Subsidiaries to keep, proper books of record and account, in which full
and correct entries shall be made of all financial transactions and the assets
and business of such Loan Party and each such Subsidiary in conformity with GAAP
and applicable law, rules and regulations.
6.8. Maintenance of Properties, Etc. Each Loan Party shall maintain and
preserve, and shall cause each of its Subsidiaries to maintain and preserve, (i)
all of its properties which are useful or necessary in the conduct of its
business in good working order and condition, and (ii) all rights, permits,
licenses, approvals and privileges (including, without limitation, all Permits)
which are used or useful or necessary in the conduct of its business, other than
those which the failure to maintain and preserve would in the aggregate have no
Material Adverse Effect.
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6.9. Application of Proceeds. The Borrower and the Guarantors shall use
the entire amount of the proceeds of the Loans as provided in Section 4.18.
6.10. Financial Statements. The Loan Parties shall furnish to the
Lender Parties:
(a) as soon as available and in any event within 30 days after the end
of each month, the Consolidated balance sheet without footnotes of the Loan
Party Consolidated Group and the balance sheet without footnotes of the Borrower
as of the end of such month and the Consolidated statements of income and cash
flow of the Loan Party Consolidated Group and the statement of income and cash
flow of the Borrower for the period commencing at the end of the previous Fiscal
Year and ending with the end of such month, certified by the chief financial
officer of Holdings as fairly presenting the financial condition and results of
operations of the Loan Party Consolidated Group and the Borrower, respectively,
at such date and for such period subject to normal year end audit adjustments,
together with (A) a certificate of said officer stating that no Default or Event
of Default has occurred and is continuing or, if a Default or an Event of
Default has occurred and is continuing, a statement as to the nature thereof and
the action which the Borrower proposes to take with respect thereto, (B) a
schedule in form satisfactory to the Agent of the computations used by the
Borrower in determining compliance with all financial covenants contained
herein, and (C) a written discussion and analysis by the management of the
Borrower of the financial statements furnished in respect of such month;
(b) (i) prior to the occurrence of the Holdings IPO Threshold, as soon
as available and in any event within 45 days after the end of each of the first
three Fiscal Quarters of each Fiscal Year, the Consolidated balance sheets of
WHX and its Subsidiaries and the consolidating balance sheets of the Loan Party
Consolidated Group as of the end of such quarter and the Consolidated statements
of income, retained earnings and cash flow of WHX and its Subsidiaries and the
consolidating statements of income, retained earnings and cash flow of the Loan
Party Consolidated Group for the period commencing at the end of the previous
Fiscal Year and ending with the end of such Fiscal Quarter, certified by the
chief financial officer of Holdings as fairly presenting the financial condition
and results of operations of WHX and its Subsidiaries and of the Loan Party
Consolidated Group, respectively, at such date and for such period subject to
normal year end audit adjustments, together with (A) a certificate of said
officer stating that no Default or Event of Default has occurred and is
continuing or, if a Default or an Event of Default has occurred and is
continuing, a statement as to the nature thereof and the action which the
Borrower proposes to take with respect thereto, (B) a schedule in form
satisfactory to the Agent of the computations used by the Borrower in
determining compliance with all financial covenants contained herein,
72
and (C) a written discussion and analysis by the management of the Borrower of
the financial statements furnished in respect of such Fiscal Quarter;
(ii) after the occurrence of the Holdings IPO Threshold, as soon as
available and in any event within 45 days after the end of each of the first
three Fiscal Quarters of each Fiscal Year, Consolidated and consolidating
balance sheets of the Loan Party Consolidated Group as of the end of such
quarter and Consolidated and consolidating statements of income, retained
earnings and cash flow of the Loan Party Consolidated Group for the period
commencing at the end of the previous Fiscal Year and ending with the end of
such Fiscal Quarter, certified by the chief financial officer of Holdings as
fairly presenting the financial condition and results of operations of the Loan
Party Consolidated Group at such date and for such period subject to normal year
end audit adjustments, together with (A) a certificate of said officer stating
that no Default or Event of Default has occurred and is continuing or, if a
Default or an Event of Default has occurred and is continuing, a statement as to
the nature thereof and the action which the Borrower proposes to take with
respect thereto, (B) a schedule in form satisfactory to the Agent of the
computations used by the Borrower in determining compliance with all financial
covenants contained herein, and (C) a written discussion and analysis by the
management of the Borrower of the financial statements furnished in respect of
such Fiscal Quarter;
(c) (i) prior to the occurrence of the Holdings IPO Threshold, as soon
as available and in any event within 90 days after the end of each Fiscal Year,
the Consolidated balance sheet of WHX and its Subsidiaries and the consolidating
balance sheets of the Loan Party Consolidated Group as of the end of such year
and the Consolidated statements of income, retained earnings and cash flow of
WHX and its Subsidiaries and the consolidating statements of income, retained
earnings and cash flow of the Loan Party Consolidated Group for the period
commencing at the end of the previous Fiscal Year and ending with the end of
such Fiscal Year, certified in the case of such Consolidated financial
statements without qualification as to the scope of the audit by
PricewaterhouseCoopers, LLP, any other "Big Five" accounting firm or other
independent public accountants acceptable to the Majority Lenders, together with
(A) a certificate of such accounting firm stating that in the course of the
regular audit of the business of WHX and its Subsidiaries, which audit was
conducted by such accounting firm in accordance with generally accepted auditing
standards, such accounting firm obtained no knowledge that a Default or Event of
Default has occurred and is continuing, or, if in the opinion of such accounting
firm, a Default or Event of Default has occurred and is continuing, a statement
as to the nature thereof, (B) a schedule in form satisfactory to the Agent of
the computations used by such accountants in determining, as of the end of such
Fiscal Year, the Borrower's compliance with all financial covenants contained
herein, and (C) a written discussion and analysis by the
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management of the Borrower of the financial statements furnished in respect of
such Fiscal Year;
(ii) after the occurrence of the Holdings IPO Threshold, as soon as
available and in any event within 90 days after the end of each Fiscal Year,
Consolidated and consolidating balance sheets of the Loan Party Consolidated
Group as of the end of such year and Consolidated and consolidating statements
of income, retained earnings and cash flow of the Loan Party Consolidated Group
for the period commencing at the end of the previous Fiscal Year and ending with
the end of such Fiscal Year, certified in the case of such Consolidated
financial statements without qualification as to the scope of the audit by
PricewaterhouseCoopers, LLP, any other "Big Five" accounting firm or other
independent public accountants acceptable to the Majority Lenders, together with
(A) a certificate of such accounting firm stating that in the course of the
regular audit of the business of the Loan Party Consolidated Group, which audit
was conducted by such accounting firm in accordance with generally accepted
auditing standards, such accounting firm obtained no knowledge that a Default or
Event of Default has occurred and is continuing, or, if in the opinion of such
accounting firm, a Default or Event of Default has occurred and is continuing, a
statement as to the nature thereof, (B) a schedule in form satisfactory to the
Agent of the computations used by such accountants in determining, as of the end
of such Fiscal Year, the Borrower's compliance with all financial covenants
contained herein, and (C) a written discussion and analysis by the management of
the Borrower of the financial statements furnished in respect of such Fiscal
Year;
(d) not later than the date on which the Loan Parties shall deliver to
the Lender Parties the financial statements referred to in Section 6.10(c) for
any Fiscal Year, a letter from the Loan Parties' independent public accountants
in form and substance satisfactory to the Agent;
(e) promptly after the same are received by the Loan Parties, a copy of
each management letter provided to the Loan Party Consolidated Group by its
independent certified public accountants which refers in whole or in part to any
material inadequacy, defect, problem, qualification or other lack of fully
satisfactory accounting controls utilized by the Loan Party Consolidated Group;
and
(f) monthly, or more frequently as the Agent may require in its sole
discretion, a Borrowing Base Certificate executed by an officer of Holdings
listed on Schedule 2.3 or by such other Person as otherwise agreed to by the
Agent, in writing, as of the end of the preceding month.
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6.11. Reporting Requirements. The Loan Parties shall furnish to the
Lender Parties:
(a) as soon as available and in any event no later than 30 days after
the end of each Fiscal Year, an annual budget (subject to finalization by the
Borrower) of the Loan Party Consolidated Group for the current Fiscal Year,
displaying on a monthly and quarterly basis anticipated balance sheets,
forecasted revenues, net income and cash flow, all on a consolidated basis, and
EBITDA and sales on a consolidating basis;
(b) as soon as available and in any event no later than 30 days after
the end of each Fiscal Year, a forecast (subject to finalization by the
Borrower) of annual sales, EBITDA, Capital Expenditures, working capital
requirements and projected cash flow results of the Loan Party Consolidated
Group on a Consolidated and consolidating basis through the Fiscal Year ending
in 2003;
(c) as soon as available and in any event within 45 days after the end
of each Fiscal Quarter, revisions or updates to the reports delivered pursuant
to (a) and (b) above;
(d) promptly and in any event within three Business Days after any Loan
Party, any of their Subsidiaries or any ERISA Affiliate knows or has reason to
know that any ERISA Event has occurred or is threatened, a written statement of
the chief financial officer or other appropriate officer of the Borrower
describing such ERISA Event or waiver request and the action, if any, which the
Borrower, the Guarantors, their Subsidiaries and ERISA Affiliates propose to
take with respect thereto and a copy of any notice filed with the PBGC or the
IRS pertaining thereto;
(e) promptly and in any event within three days after receipt thereof,
a copy of any adverse notice, determination letter, ruling or opinion any Loan
Party, any of their Subsidiaries or any ERISA Affiliate receives from the PBGC,
DOL or IRS with respect to any Qualified Plan and, at the request of any Lender,
a copy of any favorable notice, determination letter, ruling or opinion with
respect thereto from any Governmental Authority;
(f) promptly after the commencement thereof, notice of all actions,
suits and proceedings before any domestic or foreign Governmental Authority or
arbitrator, affecting any Loan Party or any of their Subsidiaries, except those
which, individually or in the aggregate, if adversely determined, would have no
Material Adverse Effect;
75
(g) promptly and in any event within three Business Days after any Loan
Party becomes aware of the existence of (i) any Default or Event of Default,
(ii) any material breach or material non-performance of, or any default under,
any Contractual Obligation which is material to the business, prospects,
operations or financial condition of the Loan Party Consolidated Group, (iii)
any breach or non-performance of, or any default under, any Lease of property
where Inventory is located or any other material Lease, or (iv) any Material
Adverse Effect or any Material Adverse Change, or any development or other
information, including, without limitation, any development or information of a
type described in Section 4.16, which has any reasonable likelihood of resulting
in a Material Adverse Change, telephonic or telegraphic notice in reasonable
detail specifying the nature of the Event of Default, Default, development or
information, including, without limitation, the anticipated effect thereof,
which notice shall be promptly confirmed in writing within five days;
(h) promptly after the sending or filing thereof, copies of all
notices, certificates or reports delivered by Holdings pursuant to the
Indentures or to the holders of the Replacement Notes;
(i) promptly after the sending or filing thereof, copies of all reports
which Holdings sends to its security holders generally, and copies of all
reports and registration statements which WHX, Holdings or any of its
Subsidiaries files with the Securities and Exchange Commission, any national
securities exchange or the National Association of Securities Dealers, Inc.;
(j) upon the request of any Lender Party, through the Agent, copies of
all federal, state and local tax returns and reports filed by any Loan Party or
any of their Subsidiaries (including consolidated, combined or unitary returns
filed with any of the Borrower's Tax Affiliates) and governmental audit reports
issued to the Borrower, any Guarantor or any of their Tax Affiliates in respect
of taxes measured by income of any Loan Party or any of their Subsidiaries
(excluding sales, use and like taxes);
(k) promptly upon, and in any event within 30 days of any Loan Party or
any of their Subsidiaries learning of any of the following, written notice of:
(i) the receipt by any Loan Party or any of their Subsidiaries of
written notice of or a claim to the effect that any Loan Party or any of
their Subsidiaries is or may be liable to any Person as a result of a
Release or threatened Release which could reasonably be expected to
subject the Loan Parties and their Subsidiaries to Environmental
Liabilities and Costs of $5,000,000 or more;
76
(ii) the receipt by any Loan Party or any of their Subsidiaries of
notification that any real or personal property of any Loan Party or any
of their Subsidiaries is subject to any Environmental Lien;
(iii) the receipt by any Loan Party or any of their Subsidiaries of any
notice of violation of, or knowledge by any Loan Party or any of their
Subsidiaries that there exists a condition which might reasonably result
in a violation by any Loan Party or any of their Subsidiaries of, any
Requirement of Law involving environmental, health or safety matters,
except for violations, the consequences of which in the aggregate would
have no reasonable likelihood of subjecting the Loan Parties and their
Subsidiaries to Environmental Liabilities and Costs of $5,000,000 or more;
(iv) the commencement of any judicial or administrative proceeding or
investigation alleging a violation of any Requirement of Law involving
environmental, health or safety matters other than those the consequence
of which in the aggregate would have no reasonable likelihood of
subjecting the Loan Parties and their Subsidiaries to Environmental
Liabilities and Costs of $5,000,000 or more;
(v) any proposed acquisition of stock, assets or real estate, or any
proposed leasing of property, or any other similar action by any Loan
Party or any of their Subsidiaries, other than those the consequences of
which in the aggregate have no reasonable likelihood of subjecting the
Loan Parties and their Subsidiaries to Environmental Liabilities and Costs
of $5,000,000 or more;
(vi) any proposed action taken by any Loan Party or any of their
Subsidiaries to commence, recommence or cease manufacturing, industrial or
other operations, other than those the consequences of which in the
aggregate have no reasonable likelihood of requiring any Loan Party or any
of their Subsidiaries to obtain additional environmental, health or safety
Permits that require the expenditure of $5,000,000 or more or becoming
subject to additional Environmental Liabilities and Costs of $5,000,000 or
more; and
(vii) any of the items referred to in (i) through (vi) above regardless
of the amount of Environmental Liabilities and Costs to the extent not
already reported pursuant to this Section 6.11(k), if the aggregate
Environmental Liabilities and Costs for such items would exceed
$10,000,000 in any Fiscal Year;
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(l) upon written request by any Lender Party through the Agent, a
report providing an update of the status of any environmental, health or safety
compliance, hazard or liability issue identified in any notice or report
required pursuant to this Section 6.11 and any other environmental, health or
safety compliance obligation, remedial obligation or liability, other than those
which in the aggregate have no reasonable likelihood of subjecting the Loan
Parties and their Subsidiaries to Environmental Liabilities and Costs of
$5,000,000 or more;
(m) promptly upon any Loan Party or any of their Subsidiaries being
refused insurance for which it applied or had any policy of insurance terminated
(other than at its request), all information relating to such refusal or
termination;
(n) promptly and in any event within 45 days of the end of each Fiscal
Year, amendments and supplements to Schedules 4.8 and 4.13 hereto and Schedule
II to the Security Agreement to the extent required to ensure that such
Schedules are accurate and complete in all material respects as to the subject
matter thereof as of such date;
(o) promptly after the Borrower discovers or determines that any
computer application (including those of its suppliers, vendors and customers)
that is material to its or any of its Subsidiaries' business and operations will
not be Year 2000 Compliant (as defined in Section 4.22), except to the extent
that such failure could not reasonably be expected to have a Material Adverse
Effect, notice of such failure, and
(p) such other information respecting the business, properties,
condition, financial or otherwise, or operations of any Loan Party or any of
their Subsidiaries as any Lender Party through the Agent may from time to time
reasonably request.
6.12. Employee Plans. With respect to other than a Multiemployer Plan,
for each Qualified Plan hereafter adopted or maintained by any Loan Party, any
of their Subsidiaries or any ERISA Affiliate, such Loan Party shall (i) seek,
and cause such of their Subsidiaries and ERISA Affiliates to seek, and receive
determination letters from the IRS to the effect that such Qualified Plan is
qualified within the meaning of Section 401(a) of the Code; and (ii) from and
after the adoption of any such Qualified Plan, cause such plan to be qualified
within the meaning of Section 401(a) of the Code and to be administered in all
material respects in accordance with the requirements of ERISA and Section
401(a) of the Code.
6.13. Fiscal Year. Each Loan Party shall maintain as its Fiscal Year
the twelve month period ending on December 31 of each year.
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6.14. Borrowing Base Determination. The Borrower and each Guarantor
shall conduct, or shall cause to be conducted, at its expense, and upon request
of the Agent, and present to the Agent for approval, such appraisals,
investigations or reviews as the Agent shall reasonably request for the purpose
of determining the Borrowing Base, all upon reasonable notice and at such
reasonable times during normal business hours and as often as may be reasonably
requested. The Borrower and each Guarantor shall furnish to the Agent any
information which the Agent may reasonably request regarding the determination
and calculation of the Borrowing Base including, without limitation, correct and
complete copies of any invoices, underlying agreements, instruments or other
documents and the identity of all obligors.
6.15. Environmental. Upon receipt of any notification or otherwise
obtaining knowledge of any Release or Environmental Liabilities and Costs in con
nection with any property or operations of any Loan Party or any of their
Subsidiaries, the Borrower shall, at its cost, conduct, or pay for consultants
to conduct, appropriate (as reasonably determined by the Borrower) tests or
assessments, if any, at such time and in such manner as Borrower shall
reasonably determine, of environmental conditions at such operations or
properties including, without limitation, investigation and testing of
subsurface conditions, and shall take such remedial, investigational or other
action as any Governmental Authority lawfully requires or, if there is no such
Governmental Authority requirement, as is appropriate and consistent with good
business practice (as reasonably determined by the Borrower).
6.16. Securitization Intercreditor Agreement. The Borrower shall
deliver to the Agent, not later than June 30, 1999, the Securitization
Intercreditor Agreement, duly executed by each of the parties thereto (other
than the Agent) and in substantially the form of Exhibit P hereto.
ARTICLE VII
NEGATIVE COVENANTS
As long as any of the Obligations or Revolving Credit Commitments
remain outstanding, without the written consent of the Majority Lenders (or the
Agent, as provided in this Article VII):
7.1. Liens, Etc. No Loan Party shall create or suffer to exist, or
permit any of its Subsidiaries to create or suffer to exist, any Lien upon or
with respect to any of its or such Subsidiary's properties, whether now owned or
hereafter acquired, or
79
assign, or permit any of its Subsidiaries to assign, any right to receive
income, except for the following (each of which will be given independent
effect); provided, however, no such Liens permitted by this Section 7.1 (other
than as described in clauses (a), (e), (g), (h) and (p) shall be Liens on any
property constituting Collateral:
(a) Liens created pursuant to the Loan Documents;
(b) Capitalized Lease Obligations, purchase money Liens or purchase
money security interests upon or in any property of, or owned, acquired or held
by such Loan Party or any Subsidiary of such Loan Party or any Person acquired
by such Loan Party or any of their Subsidiaries in accordance with Section 7.5,
in the ordinary course of business to secure the purchase price of such property
and Liens existing on such property at the time of its direct or indirect
acquisition by such Loan Party or such Subsidiary (other than any such Lien
created in contemplation of anticipation of such acquisition); provided,
however, that (i) any such Lien is created solely for the purpose of securing
Indebtedness representing, or incurred to acquire, finance, refinance or refund,
the cost (including, without limitation, the cost of construction) of the
property subject thereto, (ii) the principal amount of the Indebtedness secured
by such Lien does not exceed 100% of such cost, (iii) any such Lien on property
owned by any Person that is acquired by a Loan Party is on terms that are
commercially reasonable, (iv) such Lien does not extend to or cover any property
other than such item of property and any improvements on such item and (v) the
incurrence of such Indebtedness is permitted by Section 7.2(g);
(c) Liens on the Collateral (as defined in each of the Indentures)
securing the guaranty, if any, by any Loan Party under the Replacement Notes;
(d) Liens created pursuant to the Letter of Credit Agreement;
(e) Liens, if any, on Accounts and proceeds thereof of Funding, the
Borrower and the Guarantors in connection with the Receivables Securitization;
(f) Any Lien securing the renewal, extension, refinancing or refunding
of any Indebtedness or other obligation secured by any Lien permitted by
subsections (b), (c), (d), (e), (l), (m) or (n) of this Section 7.1 without any
increase in the amount secured thereby or in the assets subject to such Lien;
(g) Liens arising by operation of law in favor of materialmen,
mechanics, warehousemen, carriers, lessors or other similar Persons incurred by
the Borrower, any Guarantor or any of their Subsidiaries in the ordinary course
of business which secure its obligations to such Person; provided, however, that
the Borrower,
80
such Guarantor or such Subsidiary (i) is not in default with respect to such
payment obligation to such Person or (ii) is in good faith and by appropriate
proceedings diligently contesting such obligation and adequate provision is made
for the payment thereof and the consequences of all such liens in the aggregate
would have no Material Adverse Effect;
(h) Liens (excluding Environmental Liens) securing taxes, assessments
or governmental charges or levies; provided, however, that (i) none of the
Borrower, any Guarantor or any of their Subsidiaries is in default in respect of
any payment obligation with respect thereto and adequate provision is made for
the payment thereof or (ii) the Borrower, such Guarantor or such Subsidiary is
in good faith and by appropriate proceedings diligently contesting such
obligation, adequate provision is made for the payment thereof and the
consequence of all such failures in the aggregate would have no Material Adverse
Effect;
(i) Liens incurred or pledges and deposits made in the ordinary course
of business in connection with workers' compensation, unemployment insurance,
old-age pensions and other social security or welfare benefits;
(j) Liens securing the performance of bids, tenders, leases, contracts
(other than for the repayment of borrowed money), statutory obligations, surety
and appeal bonds and other obligations of like nature, incurred as an incident
to and in the ordinary course of business, and judgment liens; provided,
however, that all such Liens in the aggregate (i) would have in the aggregate no
Material Adverse Effect and (ii) do not secure directly or indirectly judgments
in excess of $5,000,000;
(k) Zoning restrictions, easements, licenses, reservations,
restrictions on the use of real property or minor irregularities incident
thereto which do not in the aggregate materially detract from the value or use
of the property or assets of the Borrower, the Guarantors and their Subsidiaries
taken as a whole;
(l) Liens existing on the date of this Agreement and disclosed on
Schedule 4.10;
(m) Liens on fixtures in connection with existing mortgages on real
property or mortgages on real property permitted hereunder;
(n) Liens on property (not constituting Collateral) of the Borrower or
any Guarantor to secure certain accumulated post-employment benefit and related
obligations of the Borrower or any Guarantor for current and future retirees
represented by the United Steelworkers of America;
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(o) Liens securing non-recourse project financing Indebtedness incurred
by any member of the Loan Party Consolidated Group or against any property of
any member of the Loan Party Consolidated Group solely for the purpose of
financing the acquisition, construction or improvement of property acquired,
owned, held, controlled or used by, or contributed to a joint venture by, any
Loan Party or any of their respective Subsidiaries, including, without
limitation, in connection with the development of the Borrower's Steubenville
South Oxygen plant; provided, however, such Indebtedness shall be on competitive
terms and conditions and in any event no less favorable than those available to
companies similar to such Loan Party; and provided further that such
Indebtedness shall not exceed $25,000,000 in the aggregate at any time;
(p) Liens incurred in connection with transactions of the type
described in clause (iv) of the definition of Cash Equivalents;
(q) Liens on property securing Indebtedness of the type described in
Section 7.2(j)(ii), provided that such Liens were not created in contemplation
of any such merger, consolidation or acquisition and do not extend to any
current assets of such Person or to any assets other than those of the Person so
merged into or consolidated with the Borrower or such Subsidiary or acquired by
the Borrower or such Subsidiary, provided, further, that the aggregate principal
amount of the Indebtedness secured by such Liens permitted by this clause (q)
shall not exceed the amount permitted under Section 7.2(j)(ii) at any time
outstanding; and
(r) other Liens to the extent not included in (a) through (o) above
provided that the aggregate principal amount of the Indebtedness secured by such
Liens permitted by this clause (q) shall not exceed the amount permitted under
Section 7.2(j)(iii) at any time outstanding.
7.2. Indebtedness. No Loan Party shall create or suffer to exist, or
permit any of its Subsidiaries to create or suffer to exist, any Indebtedness
except (each of which will be given independent effect):
(a) the Obligations;
(b) Indebtedness with respect to Contingent Obligations incurred in
connection with transactions permitted under this Agreement;
(c) current liabilities in respect of taxes, assessments and
governmental charges or levies incurred, or claims for labor, materials,
inventory, services, supplies and rentals incurred, or for goods or services
purchased, in the ordi-
82
nary course of business consistent with the past practice of such Loan Party and
its Subsidiaries;
(d) Indebtedness of such Loan Party or any of its Subsidiaries
outstanding on the Effective Date and reflected on Schedule 7.2;
(e) Indebtedness owing to such Loan Party by any of their respective
Subsidiaries;
(f) Indebtedness arising under any surety, payment or performance bond
reimbursement obligation entered into in the ordinary course of such Loan
Party's business and consistent with the past practice of such Loan Party;
(g) Indebtedness of any Loan Party or any of their Subsidiaries under
Capitalized Lease Obligations and Indebtedness secured by Liens permitted by
Section 7.1(b), provided, however, that the sum of (i) the aggregate principal
amount of Capitalized Lease Obligations incurred under this clause (g) by the
Loan Parties and their Subsidiaries (and not pursuant to clause 7.1(b) above)
and (ii) the aggregate principal amount of Indebtedness incurred pursuant to
clause 7.1(b) above by the Loan Parties and their Subsidiaries, shall not exceed
$50,000,000 at any one time outstanding;
(h) Indebtedness (i) evidenced by the Holdings Note, (ii) under the
Keepwell Payments made to the Borrower by WHX and/or Holdings pursuant to the
Keepwell Agreement and (iii) under Parent Loans;
(i) Indebtedness arising under any appeal bond reimbursement obligation
entered into with respect to any judgment;
(j) Indebtedness (i) secured by Liens permitted under Section 7.1(o),
(ii) of a Person existing at the time such Person is merged into or consolidated
with the Borrower or any Subsidiary of the Borrower or becomes a Subsidiary of
the Borrower, provided that Indebtedness was not created in contemplation of
such merger, consolidation or acquisition, not to exceed in the aggregate
$10,000,000 in any Fiscal Year plus, for each Fiscal Year after Fiscal Year
1999, an amount equal to the excess of (x) the amount of such Indebtedness
permitted to be incurred during the immediately preceding Fiscal Year over (y)
the amount of such Indebtedness actually incurred during such preceding Fiscal
Year, but, in any case, not to exceed $30,000,000 in the aggregate at any time
and (iii) not otherwise permitted by this Section 7.2 not to exceed in the
aggregate $50,000,000 at any time outstanding;
83
(k) Indebtedness of the Borrower arising under the Letter of Credit
Agreement;
(l) Indebtedness constituting a renewal, extension, refinancing or
refunding of Indebtedness described in Sections 7.2(d), (g), (j) and (n), (i)
for a principal amount not in excess of the principal amount of such
Indebtedness and (ii) in the case of Indebtedness described in Sections 7.2(d),
(g), (j) and (n), on other terms and conditions as or more favorable to the
Borrower, any Guarantor and their Subsidiaries than the terms of the
Indebtedness being renewed, extended or refunded;
(m) Indebtedness incurred in connection with transactions described in
clause (iv) of Cash Equivalents; and
(n) Indebtedness of Holdings arising under the Replacement Notes and
the guaranty by any Loan Party of the Replacement Notes or any renewal,
extension, refinancing or refunding thereof for a principal amount not in excess
of the Replacement Notes outstanding at such time and on other terms and
conditions as or more favorable to Holdings, the Borrower and its Subsidiaries .
7.3. Lease Obligations. (a) Except for existing or proposed leases
listed on Schedule 7.3 or as permitted by Section 7.5(c), no Loan Party shall
create or suffer to exist, or permit any of its Subsidiaries to create or suffer
to exist, any obligations as lessee for the rental or hire of real or personal
property in connection with any sale and leaseback transaction or for the rental
or hire of real or personal property of any kind under other leases or
agreements to lease having an original term of one year or more which would
cause the direct or contingent liabilities of the Loan Parties and their
Subsidiaries, on a consolidated basis, in respect of all such obligations (other
than any such liabilities in respect of renewals or replacements of existing
leases in amounts not in excess of those payable under existing leases) to
exceed $15,000,000 payable in any period of 12 consecutive months.
(b) Except for any lease or agreement authorized or permitted pursuant
to Section 7.3(a), no Loan Party shall, or permit any of its Subsidiaries to,
become or remain liable as lessee or guarantor or other surety with respect to
any lease, whether an operating lease or a Capitalized Lease, of any property
(whether real or personal or mixed), whether now owned or hereafter acquired,
which (i) such Loan Party or any of its respective Subsidiaries has sold or
transferred or is to sell or transfer to any other Person, or (ii) such Loan
Party or any of its respective Subsidiaries intends to use for substantially the
same purposes as any other property which has been or is to be sold or
transferred by that entity to any other Person in connection with such lease.
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7.4. Restricted Payments. No Loan Party shall (a) declare or make, and
shall not permit any of its Subsidiaries to declare or make, any dividend
payment or other distribution of assets, properties, cash, rights, obligations
or securities on account or in respect of any of its Stock or Stock Equivalents
except (i) dividends paid to a Loan Party or any wholly owned Subsidiary of a
Loan Party by any Loan Party or any of its Subsidiaries, (ii) payments to WHX in
an aggregate amount not to exceed the amount set forth on Schedule 7.4.1, (iii)
payments to WHX in an aggregate amount not to exceed the aggregate amount of
capital contributions made to any Loan Party subsequent to the date of this
Agreement and (iv) any payments made to WHX pursuant to the Tax Sharing
Agreement; provided, that with respect to any payments made pursuant to clauses
(a)(ii), (iii) or (iv) above (A) no Default or Event of Default shall have
occurred and be continuing or would result from such payment and (B) such
payment shall not result in a condition that would require Keepwell Payments, or
(b) except as set forth in Schedule 7.4.2, purchase, redeem, prepay, defease or
otherwise acquire for value or make any payment (other than required payments)
on account or in respect of (or permit any of its Subsidiaries to do so) any
principal amount of Indebtedness for borrowed money, including, without
limitation, interest, now or hereafter outstanding, except (i) the Loans, (ii)
payments made by a Loan Party or its Subsidiary to any other Loan Party on
account of any Indebtedness owing to a Loan Party by such other Loan Party or
Subsidiary, (iii) in connection with Indebtedness being refinanced in accordance
with Section 7.2(l), (iv) payments made to repay the Holdings Note and not
otherwise prohibited by the Holdings Intercreditor Agreement, and loans or
advances made prior to the date of this Agreement as set forth on Schedule
7.4.1, (v) on account of any loans or advances in the form of Keepwell Payments
made to a Loan Party pursuant to the Keepwell Agreement or other loans or
advances (other than Parent Loans) made by WHX to any Loan Party subsequent to
the date of this Agreement, (vi) with the consent of the Agent, payments made by
a Loan Party to repay Parent Loans and (vii) any repayments of any "Series" that
has a variable "Invested Amount" (under and as defined in the Securitization
Documents); provided, that with respect to any repayments, repurchases or
redemptions made (x) pursuant to clauses (b)(iv) (other than with respect to the
Holdings Note), (v), (vi) or (vii) above (A) no Default or Event of Default
shall have occurred and be continuing or would result from such payment, (B)
such repayment, repurchase or redemption shall not result in a condition that
would require Keepwell Payments and (C) in the event of a repayment of any
Keepwell Payments, such repayment may only be made after the end of a period of
three months commencing on the last day of the calendar month in which the
immediately preceding Keepwell Payment was made and only so long as no Parent
Loans are outstanding or (y) pursuant to clause (b)(iv) above with respect to
the Holdings Note, no Default or Event of Default shall have occurred and be
continuing or would result from such payment.
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7.5. Mergers, Stock Issuances, Sale of Assets, Etc. (a) No Loan Party
shall, or permit any of its Subsidiaries to (i) merge, consolidate with or into,
any Person, (ii) acquire all or substantially all of the Stock or Stock
Equivalents of any Person or acquire all or substantially all of the assets of
any Person or (iii) enter into any joint venture or transaction with any Person;
provided that (x) any direct or indirect Subsidiary of the Borrower may merge or
consolidate with or into, the Borrower or any other Subsidiary of the Borrower
and (y) the Borrower or any Guarantor may enter into any joint venture or
transaction permitted by Section 7.6(b), (c), (f) or (g).
(b) No Loan Party shall (i) issue or transfer, or permit any of its
Subsidiaries to issue or transfer, any Stock or Stock Equivalents other than any
such issuance or transfer (A) by a Subsidiary of the Borrower to the Borrower or
a wholly owned Subsidiary of the Borrower or (B) by a direct wholly owned
Subsidiary of a Guarantor to such Guarantor or (C) in connection with
transactions permitted by Section 7.5(a), 7.5(c) (other than with respect to a
Loan Party) or 7.6(f), or (ii) sell, convey, transfer, lease or otherwise
dispose of, or from and after the Effective Date permit any of its Subsidiaries
to sell, convey, transfer, lease or otherwise dispose of, any Stock or Stock
Equivalents of any of such Loan Party's Subsidiaries unless, in any such case,
both there is transferred all of the Stock and Stock Equivalents of such
Subsidiary owned by such Loan Party and their Subsidiaries and such issuance,
sale, conveyance, transfer, lease or disposition would be permitted by Section
7.5(c).
(c) No Loan Party shall, or permit any of its Subsidiaries to, sell,
convey, transfer, lease or otherwise dispose of any of its assets or any
interest therein to any Person or permit or suffer any other Person to acquire
any interest in any of assets of such Loan Party or any such Subsidiary, except
(i) the sale or disposition of inventory in the ordinary course of business or
assets which have become obsolete, (ii) leases of personal property by the
Borrower or any wholly owned Subsidiary of the Borrower to the Borrower or to
any wholly owned Subsidiary of the Borrower, (iii) the lease or sublease of real
property not constituting a sale and leaseback, to the extent not otherwise
prohibited by this Agreement, (iv) any such sale, conveyance, transfer, lease or
other disposition to the Borrower, (v) as long as no Default or Event of Default
is continuing or would result therefrom, any such sale of any assets (other than
assets constituting Collateral) for the Fair Market Value thereof and, in the
case of any such sales that are not related to trade-ins for replacements of
existing assets, in an aggregate amount not to exceed $20,000,000 in any Fiscal
Year, plus, for each Fiscal Year, an amount equal to 50% of the excess of such
amount over the Fair Market Value of such assets actually sold in the
immediately preceding Fiscal Year, payable in cash or in notes upon such sale;
provided, that such notes shall not exceed 50% of the aggregate consideration
per Fiscal Year; and provided further that no such sale shall include
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assets which are necessary to the continuing operations of any Loan Party and
its Subsidiaries, (vi) sales of accounts receivable of the Borrower and the
Guarantors permitted by Section 7.5(d), (vii) so long as no Default or Event of
Default is continuing or would result therefrom, sale and leaseback transactions
involving property having a Fair Market Value at the time of such sale and
leaseback transaction in an aggregate amount not to exceed $15,000,000 in any
Fiscal Year, (viii) sales of assets incurred in connection with transactions of
the type described in clause (iv) of the definition of Cash Equivalents and (ix)
transfers of assets permitted under Section 7.6(f).
(d) No Loan Party shall sell or otherwise dispose of, or factor at
maturity or collection, or permit any of its Subsidiaries to sell or otherwise
dispose of, or factor at maturity or collection, any of their respective
accounts receivables, except that the Borrower, the Guarantors and their
Subsidiaries may sell, transfer, pledge or otherwise convey accounts receivables
in connection with the Receivables Securitization; provided, however, that no
Loan Party or any of their Subsidiaries shall sell, transfer, pledge or
otherwise convey accounts receivables at any time an event occurs under any
Securitization Document which results in either the termination of, or relieves
the Borrower of, its obligation to do so.
7.6. Investments in Other Persons. No Loan Party shall, directly or
indirectly, make or maintain, or permit any of its Subsidiaries to make or
maintain, any loan or advance to any Person or own, purchase or otherwise
acquire, or permit any of its Subsidiaries to own, purchase or otherwise
acquire, any Stock, Stock Equivalents, other equity interest, obligations or
other securities of, or any assets constituting the purchase of a business or
line of business, or make or maintain, or permit any of its Subsidiaries to make
or maintain, any capital contribution to, or otherwise invest in, any Person
(any such transaction being an "Investment"), except:
(a) Investments in accounts, contract rights and chattel paper (each as
defined in the UCC), notes receivable and similar items arising or acquired in
the ordinary course of business consistent with the past practice of the
Borrower, such Guarantor and their Subsidiaries;
(b) Investments made after the Effective Date in wholly-owned
Subsidiaries in existence as of the Effective Date; provided, however, that no
Default or Event of Default has occurred and is continuing or would result
therefrom and the aggregate amount of Investments in such Subsidiary do not
exceed (i) with respect to Funding, the amount necessary from time to time to
consummate the transactions contemplated by the Receivables Securitization,
including any repayments of any
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"Series" that has a variable "Invested Amount" (under and as defined in the
Securitization Documents) and (ii) with respect to all other Subsidiaries,
$6,000,000;
(c) Investments in Subsidiaries of such Loan Party permitted by Section
7.12; provided that no Default or Event of Default has occurred and is
continuing or would result therefrom and the aggregate amount of such
Investments shall not exceed $10,000,000 in any Fiscal Year plus, for each
Fiscal Year after Fiscal Year 1999, an amount equal to the excess of (x) the
amount of such Investments permitted to be incurred during the immediately
preceding Fiscal Year over (y) the amount of such Investments actually incurred
during such preceding Fiscal Year, but, in any case, not to exceed $30,000,000
in the aggregate at any time;
(d) loans or advances to employees of the Borrower, such Guarantor or
any of their Subsidiaries, which loans and advances shall not in the aggregate
exceed $2,000,000 outstanding at any time; provided, however, that such loans or
advances in respect of relocation expenses shall not in the aggregate exceed
$1,000,000;
(e) Investments in Cash Equivalents;
(f) Investments in (i) the Fabricating Joint Ventures, (ii) the Co-
Generation Agreement, (iii) cold-rolling joint ventures and (iv) other joint
ventures as set forth on Schedule 7.6; provided that no Default or Event of
Default has occurred and is continuing or would result therefrom and the amount
of such Investments permitted pursuant to this clause (f) made from and after
the Effective Date shall not exceed in the aggregate at any time the sum of (A)
$30,000,000 and (B) all cash loans, contributions and advances, other than
Keepwell Payments, made after the Effective Date by WHX to the Loan Party
Consolidated Group;
(g) Investments in joint ventures or other entities not otherwise
described in clause (f) above; provided that no Default or Event of Default has
occurred and is continuing or would result therefrom and the amount of such
Investment shall not exceed $3,000,000 in the aggregate at any time;
(h) Investments existing on the date hereof and set forth on Schedule
7.6; and
(i) advances by the Borrower to the Guarantors under the Guarantor
Intercompany Notes.
7.7. Change in Nature of Business. No Loan Party shall, directly or
indirectly, make, or permit any of its Subsidiaries to make, any material change
in the
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nature or conduct of its business as carried on at the date hereof, except as
otherwise expressly permitted herein or to the extent necessary or appropriate
to adapt to changes or anticipated changes in the business environment or
otherwise deemed appropriate by management for the manufacturing and sale of
steel and steel-related products.
7.8. Material Agreements. No Loan Party shall, or permit any of its
Subsidiaries to, alter, amend, modify, rescind, terminate or waive any of their
respective rights under, or fail to comply in all respects with all of their
respective Contractual Obligations; provided, however, that, with respect to any
Contractual Obligations (other than the Loan Documents, the Replacement Notes,
the Securitization Documents and the Tax Sharing Agreement), the Borrower, the
Guarantors and their Subsidiaries may do so if the consequences thereof in the
aggregate have no Material Adverse Effect and, with respect to any Contractual
Obligations under the Replacement Notes, the Securitization Documents and the
Tax Sharing Agreement, the Borrower, the Guarantors and their Subsidiaries may
do so with the Agent's consent if the effect of such action is not adverse to
the Loan Parties and the Lender Parties; and provided further that in the event
of any breach or event of default by a Person other than the Borrower, any
Guarantor or any of their Subsidiaries, the Borrower shall promptly notify the
Agent of any such breach or event of default and take all such action as may be
reasonably necessary in order to endeavor to cause such breach or event of
default to be cured unless the failure to do so would have no Material Adverse
Effect.
7.9. Accounting Changes. No Loan Party shall make, or permit any of its
Subsidiaries to make, any change in accounting treatment and reporting practices
or tax reporting treatment, except as required by GAAP or law, rule or
regulation and disclosed to the Lender Parties and the Agent.
7.10. Transactions with Affiliates. No Loan Party shall, or permit any
of its Subsidiaries to, except as otherwise expressly permitted herein, do any
of the following: (i) make any Investment in an Affiliate of such Loan Party not
a wholly owned Subsidiary of such Loan Party; (ii) transfer, sell, lease, assign
or otherwise dispose of any asset to any Affiliate of such Loan Party not a
wholly owned Subsidiary of such Loan Party; (iii) merge into or consolidate with
or purchase or acquire assets from any Affiliate of such Loan Party other than a
wholly owned Subsidiary of such Loan Party; (iv) repay any Indebtedness to any
Affiliate of such Loan Party; or (v) enter into any other transaction directly
or indirectly with or for the benefit of any Affiliate of such Loan Party not a
wholly owned Subsidiary of such Loan Party (including, without limitation,
guaranties and assumptions of obligations of any such Affiliate) except for (A)
transactions in the ordinary course of business on a basis no less favorable to
such Loan Party or such Subsidiary as would be obtained in a comparable arm's
length transaction with a Person not an Affiliate,
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(B) reasonable salaries and other employee compensation, including, without
limitation, any profit sharing and other established bonus or deferred
compensation plans, to officers or directors of such Loan Party or any of its
Subsidiaries commensurate with current compensation levels; provided, however
that such Loan Party may pay salaries or other employee compensation at levels
commensurate with industry practice to new employees who are not Affiliates of
the such Loan Party immediately prior to the date of hire, (C) any transaction
required or otherwise permitted by this Agreement, (D) fees paid to WHX by the
Borrower not in excess of $5,000,000 per Fiscal Year to pay management fees, the
proceeds of which are then used by WHX solely to (1) pay management fees
pursuant to the management agreement between WHX and WPN Corp. in effect on the
Effective Date and (2) pay bonuses to management of the Borrower; provided,
however, that no such loans, advances or management fees may be paid if there
has occurred and is continuing a Default or Event of Default, or a Default or an
Event of Default would occur as a result of the payment of such management fee,
(E) those transactions listed on Schedule 7.10, (F) transactions with Ohio
Coatings Company, Wheeling-Nisshin and Xxxx Xxxx previously disclosed in writing
to the Agent and the Lender Parties on a basis no less favorable to the Borrower
or such Subsidiary as would be obtained in a comparable arm's-length transaction
with a Person not an Affiliate, (G) payments under the Tax Sharing Agreement,
(H) advances of cash by the Borrower to the Guarantors under the Guarantor
Intercompany Notes or (I) other transactions with Affiliates to the extent not
included in (A) through (H) provided that the amounts payable by the Borrower
and the Guarantors in connection with such transactions shall not in the
aggregate exceed $2,000,000 per Fiscal Year.
7.11. Cancellation of Indebtedness Owed to It. No Loan Party shall
cancel, or permit any of its Subsidiaries to cancel, any claim or Indebtedness
owed to it except for adequate consideration and in the ordinary course of
business, except to the extent that such cancellation occurs in connection with
the consummation of a plan of reorganization or liquidation of the obligor under
such Indebtedness and such cancellation would not have a Material Adverse
Effect.
7.12. No New Subsidiaries. No Loan Party shall, or permit any of its
Subsidiaries to, incorporate or otherwise organize any Subsidiary which was not
in existence on the Effective Date (a "New Subsidiary") without the prior
written consent of the Majority Lenders except as otherwise permitted pursuant
to Sections 7.5 and 7.6; provided that only the prior written consent of the
Agent shall be necessary in connection with any New Subsidiary of the Borrower
or any Guarantor if such New Subsidiary's Net Worth is not in excess of
$1,000,000; provided further that (a) in any case, the Stock of any such New
Subsidiary is pledged to the Agent for the benefit of the Secured Parties
pursuant to a pledge agreement in form and substance satisfactory
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to the Agent and (b) in the case of any New Subsidiary having a Net Worth of
$500,000 or more, such New Subsidiary shall execute and deliver to the Agent,
within 15 days of its formation or determination of such Net Worth, as
applicable, a Guaranty Supplement (as defined in the Guaranty) and a Security
Agreement Supplement (as defined in the Security Agreement) and such other
documents as the Agent shall reasonably request.
7.13. Capital Structure. Except as otherwise permitted hereunder, no
Loan Party shall make, or permit any of its Subsidiaries to make, any change in
its capital structure (including, without limitation, in the terms of its
outstanding Stock) or amend its certificate of incorporation or by-laws, other
than those changes which, in the aggregate, would have no Material Adverse
Effect.
7.14. No Speculative Transactions. No Loan Party shall, or permit any
of its Subsidiaries to, engage in any speculative transaction or, except for the
sole purpose of hedging in the normal course of business and consistent with
industry practices, engage in any transaction involving commodity options or
futures contracts.
7.15. Margin Regulations. The Loan Parties shall not use the proceeds
of any Loans to purchase or carry any margin stock.
7.16. Bank Accounts. None of the Borrower or any Guarantor shall
maintain any bank account other than those provided in Section 2.19, the
Concentration Account, the Investment Account, the collateral accounts required
to be maintained by the Borrower pursuant to the Letter of Credit Agreement,
those listed on Schedule 7.16 for the purposes listed thereon and other
operational accounts with the prior written consent of the Agent; provided that
the Borrower may open one or more bank accounts to facilitate the performance of
its servicing obligations in connection with the Receivables Securitization.
Notwithstanding the foregoing, the Borrower and the Guarantors shall be entitled
to open new accounts (i) in replacement of those identified on Schedule 7.16
having the same purposes and (ii) for specified purposes including employee
payroll, trustee and escrow accounts and if approved by the Agent, for new
Subsidiaries, so long as the Agent receives prior written notification of each
such new account and a blocked account letter, in form and substance
satisfactory to the Agent.
7.17. Environmental Release. No Loan Party shall, or permit any of its
Subsidiaries to, or allow any lessee or other Person to, effect or suffer to
occur, from and after the Effective Date, any Release in respect of, or dispose
of, from and after the Effective Date, any Contaminant which creates liability
under or is in violation of any Environmental Law if the consequence of all such
Releases and disposals in the aggregate would result in a Material Adverse
Effect.
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ARTICLE VIII
EVENTS OF DEFAULT
8.1. Events of Default. Each of the following events shall be an Event
of Default:
(a) The Borrower shall fail to pay any principal of any Loan
(including, without limitation, mandatory prepayments of principal) or any fee
due any Lender Party or the Agent, other amount due hereunder or under the other
Loan Documents or other of the Obligations when the same becomes due and payable
(except for interest on any Loan) or the Borrower shall fail to pay interest on
any Loan within three days after the same becomes due and payable; or
(b) Any representation or warranty made or deemed made by any Loan
Party in any Loan Document or by any Loan Party (or any of its officers) in
connection with any Loan Document shall prove to have been incorrect in any
material respect when made or deemed made; or
(c) Any Loan Party shall fail to perform or observe (i) any term,
covenant or agreement contained in Articles V, VI or VII, in any Collateral
Document or in the Keepwell Agreement or (ii) any other term, covenant or
agreement contained in this Agreement or in any other Loan Document if such
failure under this clause (ii) shall remain unremedied for ten Business Days
after the earlier of the date on which (A) a Responsible Officer of any Loan
Party becomes aware of such failure or (B) written notice thereof shall have
been given to the Borrower by the Agent or any Lender Party; or
(d) Any Loan Party or any of its Subsidiaries shall fail to pay any
principal of or premium or interest on any Indebtedness for borrowed money of
such Loan Party or Subsidiary that is outstanding in a principal amount of at
least $1,000,000 (excluding Indebtedness evidenced by the Revolving Credit
Notes), when the same becomes due and payable after, in the case of all such
Indebtedness, any applicable period of grace (whether by scheduled maturity,
required prepayment, acceleration, demand or otherwise); or any other event
shall occur or condition shall exist under any agreement or instrument relating
to any such Indebtedness, if the effect of such event or condition is to
accelerate, or to permit the acceleration of, the maturity of such Indebtedness;
or any such Indebtedness shall be declared to be due and payable, or required to
be prepaid (other than by a regularly scheduled required prepayment), prior to
the stated maturity thereof; or
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(e) Any Loan Party or any of its Subsidiaries shall generally not pay
its debts as such debts become due, or shall admit in writing its inability to
pay its debts generally, or shall make a general assignment for the benefit of
creditors, or any proceeding shall be instituted by or against any Loan Party or
any of its Subsidiaries seeking to adjudicate it a bankrupt or as insolvent, or
seeking liquidation, winding up, reorganization, arrangement, adjustment,
protection, relief or composition of it or its debts under any law relating to
bankruptcy, insolvency or reorganization or relief of debtors, or seeking the
entry of an order for relief or the appointment of a receiver, trustee or other
similar official for it or for any substantial part of its property and, in the
case of any such proceedings instituted against any Loan Party or any of its
Subsidiaries (but not instituted by it), either such proceedings shall remain
undismissed or unstayed for a period of 30 days or any of the actions sought in
such proceedings shall occur; or any Loan Party or any of its Subsidiaries shall
take any corporate action to authorize any of the actions set forth above in
this subsection (e); or
(f) Any final judgment or order for the payment of money in excess of
$1,000,000 shall be rendered against any Loan Party or any of its Subsidiaries
and either (i) enforcement proceedings shall have been commenced by any creditor
upon such judgment or order, or (ii) there shall be any period of 10 consecutive
days following entry of such judgment or order (or, in the event that the terms
of such judgment or order do not require immediate payment, following the date
or dates on which such payment is to be made) during which such judgment or
order shall not have been paid, compromised or otherwise satisfied and a stay of
enforcement of such judgment or order, by reason of a pending appeal or
otherwise, shall not be in effect; provided, however, that such final judgment
or order shall not be deemed an Event of Default if (x) such final judgment or
order is less than $1,000,000, (y) such final judgment or order is fully covered
by insurance carried by any Loan Party and (z) such non-payment, non-compromise
or non-satisfaction is solely the result of the insurance company's tardiness in
payment; or
(g) an ERISA Event shall occur which, in the reasonable determination
of the Majority Lenders, has a reasonable possibility of a liability, deficiency
or waiver request of the Borrower or any ERISA Affiliate, whether or not
assessed, exceeding $5,000,000; or
(h) Any material provision of any Collateral Document, the Keepwell
Agreement prior to the release thereof in accordance with its terms or the
Holdings Intercreditor Agreement after delivery thereof shall for any reason
cease to be valid and binding on any Loan Party thereto, or any such Loan Party
shall so state in writing; or
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(i) At any time prior to the consummation of the Holdings IPO, WHX
shall fail to own of record and beneficially all of the outstanding Stock and
Stock Equivalents of Holdings (other than non-voting, non-participating
perpetual preferred Stock that satisfies the requirements of Section 1504(a)(4)
of the Code), free and clear of all Liens; or
(j) Holdings shall fail to own of record and beneficially all of the
outstanding Stock and Stock Equivalents of each of the Borrower, PCC and
Wheeling Construction (except as otherwise permitted by Section 7.5(a) and other
than non-voting, non-participating perpetual preferred Stock that satisfies the
requirements of Section 1504(a)(4) of the Code), free and clear of all Liens
except those Liens created under the Collateral Documents; or
(k) At any time on or after the Holdings IPO, (i) a majority of the
members of the Board of Directors of Holdings shall be replaced over a two-year
period, from the directors who constituted the Board of Directors at the
Effective Date, and such replacement shall not have been approved by the Board
of Directors of Holdings as constituted at the Effective Date (or its
replacements approved by the Board of Directors of Holdings); or (ii) a Person
or group of Persons acting in concert as partnership or other group (other than
WHX) shall, as a result of a tender or exchange offer, open market purchases,
privately negotiated purchases or otherwise, have become the beneficial owner
(within the meaning of Rule 13d-3 under the Securities and Exchange Act of 1934,
as amended) of securities of Holdings representing 20% or more of the combined
voting power of the then outstanding securities of Holdings ordinarily (and
apart from rights accruing under special circumstances) having the right to vote
in the election of directors, provided, however, ownership by institutional or
other investors, whose disclosed investment intent does not include any of
matters (b) through (j) (except to the extent (j) incorporates (a)) of Item 4 of
Schedule 13D (as required by Rule 13d-1 under the Securities Exchange Act of
1934, as amended), shall not be prohibited hereunder and shall not be an Event
of Default; or
(l) at any time prior to the occurrence of Holdings IPO Threshold, a
Person or group of Persons acting in concert as a partnership or other group
shall, as a result of a tender or exchange offer, open market purchases,
privately negotiated purchases or otherwise, have become the beneficial owner
(within the meaning of Rule 13d-3 under the Securities and Exchange Act of 1934,
as amended) of securities of WHX representing 20% or more of the combined voting
power of the then outstanding securities of WHX ordinarily (and apart from
rights accruing under special circumstances) having the right to vote in the
election of directors, provided, however, ownership by institutional or other
investors whose disclosed investment intent does not include any of matters (b)
through (j) (except to the extent (j) incorporates (a)) of Item 4 of Schedule
13D (as required by Rule 13d-1 under the Securities Exchange Act of
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1934, as amended), shall not be prohibited hereunder and shall not be an Event
of Default; or
(m) There shall occur a Material Adverse Change or an event which would
have a Material Adverse Effect; or
(n) A "termination event" (other than an "early amortization event")
(as such terms are defined in the Securitization Documents) shall occur and be
continuing and shall not have been rescinded in accordance with the terms of the
Securitization Documents; or
(o) Holdings or the Borrower shall, or shall permit any of the
Borrower's Subsidiaries to, (i) alter, rescind, terminate, amend, supplement,
waive or otherwise modify any provision of or permit any breach or default or
other event to exist under the Replacement Notes or the Holdings Note, or take
or fail to take any action thereunder, unless any of the foregoing would not in
the aggregate have a Material Adverse Effect; or (ii) amend, modify or change,
or consent or agree to any amendment, modification or change to, any of the
terms relating to the payment or prepayment of principal of, or premium or
interest on, any Replacement Note or the Holdings Note (other than any such
amendment, modification or change which would extend the maturity or reduce the
amount of any payment of principal thereof or which would reduce the rate or
extend the date for payment of interest thereon).
8.2. Remedies. If there shall occur and be continuing an Event of
Default, the Agent (i) shall at the request, or may with the consent, of the
Majority Lenders, by notice to the Borrower, terminate the obligation of each
Lender to make Loans and of each Issuer to issue Letters of Credit, whereupon
the same shall forthwith terminate, and (ii) shall at the request, or may with
the consent, of the Majority Lenders, by notice to the Borrower, declare the
Loans, all interest thereon and all other Obligations payable under this
Agreement to be forthwith due and payable, whereupon the Revolving Credit Notes,
all such interest and all such Obligations shall become and be forthwith due and
payable, without presentment, demand, protest or further notice of any kind, all
of which are hereby expressly waived by the Borrower; provided, however, that
upon the occurrence of the Event of Default specified in subparagraph (e) above,
(A) the obligation of each Lender to make Loans and of each Issuer to issue
Letters of Credit shall automatically be terminated and (B) the Revolving Credit
Notes, all such interest and all such Obligations shall automatically become and
be due and payable, without presentment, demand, protest or any notice of any
kind, all of which are hereby expressly waived by the Borrower. In addition to
the remedies set forth above, the Agent may, or at the request of the Majority
Lenders shall, after the giving of notice as provided in clause (ii) above,
exercise any remedies provided for by the
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Collateral Documents in accordance with the terms thereof or any other remedies
provided by applicable law.
8.3. Actions in Respect of Letters of Credit. (a) If any Event of
Default shall have occurred and be continuing, the Agent may, from time to time,
irrespective of whether it is taking any of the actions described in Section 8.2
or otherwise, make demand upon the Borrower to, and forthwith upon such demand
the Borrower will, pay to the Agent on behalf of the Lender Parties in same day
funds at the Agent's office, for deposit in a special cash collateral account
(Account #00000000) maintained in the name of the Agent on behalf of the Secured
Parties at Citibank (the "L/C Cash Collateral Account"), an amount equal to all
outstanding Letter of Credit Obligations. In the Agent's discretion, the L/C
Cash Collateral Account may be an interest or a non-interest bearing account.
(b) The Borrower hereby pledges, and grants to the Agent a Lien on and
security interest in, all of its right, title and interest in and to the L/C
Cash Collateral Account, all funds held in the L/C Cash Collateral Account from
time to time and all proceeds thereof, as security for the payment of all
amounts due and to become due from the Borrower to the Secured Parties under the
Loan Documents.
(c) The Agent shall, from time to time after funds are deposited in the
L/C Cash Collateral Account, apply funds then held in the L/C Cash Collateral
Account to the Issuer for the payment of any Reimbursement Obligations owing to
it and then in such order as the Agent shall determine, as shall have become or
shall become due and payable by the Borrower to the Secured Parties in respect
of the Obligations.
(d) 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 L/C Cash Collateral Account.
(e) The Borrower agrees that it will not (i) sell or otherwise dispose
of any interest in the L/C Cash Collateral Account or any funds held therein or
(ii) create or permit to exist any Lien upon or with respect to the L/C Cash
Collateral Account or any funds held therein, except as provided in or
contemplated by this Agreement.
(f) The Agent may also exercise, in its sole discretion, in respect of
the L/C Cash Collateral Account, in addition to the other rights and remedies
provided for herein or otherwise available to it, all the rights and remedies of
a secured party upon default under the UCC in effect in the State of New York at
that time, and the
96
Agent may, without notice except as specified below, sell the L/C Cash
Collateral Account or any part thereof in one or more parcels at public or
private sale, at any of the Agent's offices or elsewhere, for cash, or credit or
for future delivery, and upon such other terms as the Agent may deem
commercially reasonable. The Borrower agrees that, to the extent notice of sale
shall be required by law, at least ten days' notice to the Borrower of the time
and place of any public sale or the time after which any private sale is to be
made shall constitute reasonable notification. The Agent shall not be obligated
to make any sale of the L/C Cash Collateral Account, regardless of notice of
sale having been given. The Agent may adjourn any public or private sale from
time to time by announcement at the time and place fixed therefor, and such sale
may, without further notice, be made at the time and place to which it was so
adjourned.
(g) Any cash held in the L/C Cash Collateral Account, and all cash
proceeds received by the Agent in respect of any sale of, collection from or
other realization upon all or any part of the L/C Cash Collateral Account, may,
in the discretion of the Agent, then or at any time thereafter be applied (after
the expiration of all outstanding Letters of Credit and the payment of any
amounts payable pursuant to Sections 8.3(c) and 10.4) in whole or in part by the
Agent against all or any part of the Obligations now or hereafter existing under
any of the Loan Documents in such order as the Agent shall elect. Any surplus of
such cash or cash proceeds held by the Agent and remaining after the
indefeasible cash payment in full of all of the Obligations shall be paid over
to the Borrower or to whomsoever may be lawfully entitled to receive such
surplus.
ARTICLE IX
THE AGENT
9.1. Authorization and Action. Each Lender Party (in its capacities as
a Lender, the Swing Bank and an Issuer, as applicable) hereby appoints and
authorizes the Agent to take such action as agent on its behalf and to exercise
such powers and discretion under this Agreement and the other Loan Documents as
are delegated to the Agent by the terms hereof and thereof, together with such
powers and discretion as are reasonably incidental thereto. As to any matters
not expressly provided for by this Agreement and the other Loan Documents
(including, without limitation, enforcement or collection of the Revolving
Credit Notes), the Agent shall not be required to exercise any discretion or
take any action, but shall be required to act or to refrain from acting (and
shall be fully protected in so acting or refraining from acting) upon the
instructions of the Majority Lenders or, solely in the circumstances requiring
action by
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all of the Lenders in accordance with the first proviso to Section 10.1(a), all
of the Lenders, and such instructions shall be binding upon all Lender Parties
and all holders of Revolving Credit Notes; provided, however, that the Agent
shall not be required to take any action which the Agent in good faith believes
exposes it to personal liability or is contrary to this Agreement or applicable
law. The Agent agrees to give to each Lender Party prompt notice of each notice
given to it by any Loan Party pursuant to the terms of this Agreement or the
other Loan Documents.
9.2. Agent's Reliance, Etc. None of the Agent or any of its Affiliates
or any of the respective directors, officers, agents or employees of the Agent
or any such Affiliate shall be liable for any action taken or omitted to be
taken by it or them under or in connection with this Agreement or the other Loan
Documents, except for its or their own gross negligence or willful misconduct.
Without limitation of the generality of the foregoing, the Agent (i) may treat
the payee of any Revolving Credit Note as the holder thereof until such Note has
been assigned in accordance with Section 10.7; (ii) may rely on the Register to
the extent set forth in Section 10.7(c), (iii) may consult with legal counsel
(including, without limitation, counsel to the Borrower or any other Loan
Party), independent public accountants and other experts selected by it and
shall not be liable for any action taken or omitted to be taken in good faith by
it in accordance with the advice of such counsel, accountants or experts; (iv)
makes no warranty or representation to any Lender Party and shall not be
responsible to any Lender Party for any statement, warranty or representation
(whether written or oral) made in or in connection with this Agreement or any of
the other Loan Documents; (v) 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 or any of the other Loan Documents on the part of the Borrower
or any other Loan Party or to inspect the property (including, without
limitation, the books and records) of the Borrower or any other Loan Party; (vi)
shall not be responsible to any Lender Party for the due execution, legality,
validity, enforceability, genuineness, sufficiency or value of, or the
perfection or priority of any lien or security interest created or purported to
be created under or in connection with any Loan Document, of this Agreement or
any of the other Loan Documents or any other instrument or document furnished
pursuant hereto or thereto; and (vii) shall incur no liability under or in
respect of this Agreement or any of the other Loan Documents by acting upon any
notice, consent, certificate or other instrument or writing (which may be by
telegram, telecopy, cable or telex) believed by it to be genuine and signed or
sent by the proper party or parties.
9.3. Citibank, Citicorp and Affiliates. With respect to its Revolving
Credit Commitment, the Loans (including, without limitation, the Revolving
Credit Loans and Swing Loans) made by it, any each Revolving Credit Note and any
Letters of Credit issued by it, Citicorp shall have the same rights and powers
under this
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Agreement as any other Lender Party and may exercise the same as though it were
not an Affiliate of the Agent; and the term "Lender Party" or "Lender Parties"
shall, unless otherwise expressly indicated, include Citicorp in its individual
capacity. Citibank and its Affiliates may accept deposits from, lend money to,
act as trustee under indentures of, accept investment banking engagements from
and generally engage in any kind of business with, the Borrower or any other
Loan Party or any of their respective Subsidiaries and any Person who may do
business with or own securities of the Borrower or any other Loan Party or any
of their respective Subsidiaries, all as if Citibank were not the Agent and
without any duty to account therefor to the Lender Parties.
9.4. Lender Party Credit Decision. Each Lender Party acknowledges that
it has, independently and without reliance upon the Agent or any other Lender
Party and based on the financial statements referred to in Article IV and such
other documents and information as it has deemed appropriate, made its own
credit analysis and decision to enter into this Agreement. Each Lender Party
also acknowledges that it will, independently and without reliance upon the
Agent or any other Lender Party and based on such documents and information as
it shall deem appropriate at the time, continue to make its own credit decisions
in taking or not taking action under this Agreement and other Loan Documents.
9.5. Indemnification. (a) The Lender Parties severally agree to
indemnify the Agent, its Affiliates and their respective directors, officers,
employees, agents and advisors (to the extent not reimbursed by the Borrower or
other Loan Parties), from and against such Lender Party's ratable share
(determined as provided below) of any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses and disbursements
(including, without limitation, fees and disbursements of legal counsel) of any
kind or nature whatsoever which may be imposed on, incurred by, or asserted
against, the Agent in any way relating to or arising out of this Agreement or
any of the other Loan Documents or any action taken or omitted by the Agent
under this Agreement or any of the other Loan Documents including, without
limitation, the preparation of reports with respect to the Collateral; provided,
however, that no Lender Party shall be liable for any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements resulting from the Agent's (or any of its
agent's) gross negligence or willful misconduct. Without limitation of the
foregoing, each Lender Party agrees to reimburse the Agent promptly upon demand
for its ratable share of any out-of-pocket expenses (including, without
limitation, fees and disbursements of legal counsel) incurred by the Agent in
connection with the preparation, execution, delivery, administration (including,
without limitation, field examinations of Collateral), modification, amendment
or enforcement (whether through negotiations, legal proceed-
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ings or otherwise) of, or legal advice in respect of its rights or
responsibilities under, this Agreement or any of the other Loan Documents, to
the extent that the Agent is not reimbursed for such expenses by the Borrower or
another Loan Party except to the extent such expenses result from the Agent's
(or any of its agent's) gross negligence or willful misconduct. For purposes of
this Section 9.5, the Lender Parties' respective ratable shares of any amount
shall be determined, at any time, according to the sum of (a) the aggregate
principal amount of the Loans outstanding at such time and owing to the
respective Lender Parties, (b) their respective Ratable Portions of the
aggregate Letter of Credit Obligations outstanding at such time plus (c) their
respective Ratable Portions of the Available Credit at such time. The failure of
any Lender Party to reimburse the Agent promptly upon demand for its ratable
share of any amount required to be paid by the Lender Party to the Agent as
provided herein shall not relieve any other Lender Party of its obligation
hereunder to reimburse the Agent for its ratable share of such amount, but no
Lender Party shall be responsible for the failure of any other Lender Party to
reimburse the Agent for such other Lender Party's ratable share of such amount.
Without prejudice to the survival of any other agreement of any Lender Party
hereunder, the agreement and obligations of each Lender Party contained in this
Section 9.5(a) shall survive the payment in full of principal, interest and all
other amounts payable hereunder and under the other Loan Documents.
(b) Each Lender Party severally agrees to indemnify each Issuer (to the
extent not promptly reimbursed by the Borrower) from and against such Lender
Party's ratable share (determined as provided below) of any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever that may be imposed
on, incurred by, or asserted against such Issuer in any way relating to or
arising out of the Loan Documents or any action taken or omitted by such Issuer
under the Loan Documents; provided, however, that no Lender Party shall be
liable for any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements resulting
from such Issuer's (or any of its agent's) gross negligence or willful
misconduct. Without limitation of the foregoing, each Lender Party agrees to
reimburse such Issuer promptly upon demand for its ratable share of any costs
and expenses (including, without limitation, fees and expenses of counsel)
payable by the Borrower under Section 10.4, to the extent that such Issuer is
not promptly reimbursed for such costs and expenses by the Borrower except to
the extent such expenses result form such Issuer's (or any of its agent's) gross
negligence or willful misconduct. For purposes of this Section 9.5(b), the
Lender Parties' respective ratable shares of any amount shall be determined, at
any time, according to the sum of (a) the aggregate principal amount of the
Loans outstanding at such time and owing to the respective Lender Parties, (b)
their respective Ratable Portions of the aggregate Letter of Credit Obligations
outstanding at such time plus (c) their respective Ratable
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Portions of the Available Credit at such time. The failure of any Lender Party
to reimburse such Issuer promptly upon demand for its ratable share of any
amount required to be paid by the Lender Parties to such Issuer as provided
herein shall not relieve any other Lender Party of its obligation hereunder to
reimburse such Issuer for its ratable share of such amount, but no Lender Party
shall be responsible for the failure of any other Lender Party to reimburse such
Issuer for such other Lender Party's ratable share of such amount. Without
prejudice to the survival of any other agreement of any Lender Party hereunder,
the agreement and obligations of each Lender Party contained in this Section
9.5(b) shall survive the payment in full of principal, interest and all other
amounts payable hereunder and under the other Loan Documents.
9.6. Successor Agent. The Agent may resign at any time by giving
written notice thereof to the Lender Parties and the Borrower. Upon any such
resignation, the Majority Lenders shall have the right to appoint a successor
Agent; provided, that if no Default or Event of Default shall have occurred and
be continuing, such successor Agent shall be reasonably satisfactory to the
Borrower, which shall be (a) a commercial bank organized under the laws of the
United States of America or any State thereof and having total assets of at
least $1,000,000,000 and a combined capital and surplus of at least $50,000,000
or (b) a Lender as of the Effective Date. If no successor Agent shall have been
so appointed by the Majority Lenders, and shall have accepted such appointment,
within 30 days after the retiring Agent's giving of notice of resignation or the
removal of the retiring Agent at the request of all of the Lenders (other than
the Agent and its Affiliates), then the retiring Agent may, on behalf of the
Lender Parties, appoint a successor Agent approved, as long as no Default or
Event of Default has occurred and is continuing, by the Borrower, such approval
not be unreasonably withheld or delayed, which successor shall be (a) a
commercial bank organized under the laws of the United States of America or of
any State thereof and having total assets of at least $1,000,000,000 and a
combined capital and surplus of at least $50,000,000 or (b) a Lender as of the
Effective Date. Upon the acceptance of any appointment as Agent hereunder by a
successor Agent and upon the execution and filing or recording of such financing
statements, or amendments thereto, and such other instruments or notices, as may
be necessary or desirable, or as the Majority Lenders may request, in order to
continue the perfection of the Liens granted or purported to be granted by the
Collateral Documents, such successor Agent shall thereupon succeed to and become
vested with all the rights, powers, discretions, privileges and duties of the
retiring Agent, and the retiring Agent shall be discharged from its duties and
obligations under this Agreement and the other Loan Documents. After any
retiring Agent's resignation or removal hereunder as Agent, the provisions of
this Article IX shall inure to its benefit as to any actions taken or omitted to
be taken by it while it was Agent under this Agreement and the other Loan
Documents.
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ARTICLE X
MISCELLANEOUS
10.1. Amendments, Etc. (a) No amendment or waiver of any provision of
this Agreement or any other Loan Document (including, without limitation, the
waiver of any Default or Event of Default) nor consent to any departure by the
Borrower or any other Loan Party therefrom shall in any event be effective
unless the same shall be in writing and signed (or, in the case of the
Collateral Documents, consented to) by the Borrower and the Majority Lenders,
and then any such waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given; provided, however, that
no amendment, waiver or consent shall, unless in writing and signed by all the
Lenders do any of the following at any time: (i) waive any of the conditions
specified in Sections 3.1 or 3.2 except as otherwise provided therein; (ii)
increase, or extend the expiration date of, the Revolving Credit Commitments of
the Lenders or subject the Lenders to any additional obligations; (iii) reduce
(A) the amount of any payment of any principal of, or interest on, the Loans due
under this Agreement, (B) the stated rate of any interest payable hereunder or
(C) the amount of any fees or other amounts payable hereunder; (iv) postpone any
date fixed for any payment of principal of, or interest on, the Loans or any
fees or other amounts payable hereunder; (v) change the percentage of the
Revolving Credit Commitments, the aggregate unpaid principal amount of the Loans
or the Letter of Credit Obligations, or the number of Lenders which shall be
required for the Lenders or any of them to take any action hereunder; (vi)
release any of the Collateral except that, so long as no Default or Event of
Default has occurred and is continuing or would result therefrom, (A) as shall
otherwise be provided in the Collateral Documents and Section 7.5(d) and (B) in
any Fiscal Year, Collateral having an aggregate Fair Market Value not in excess
of $25,000,000 shall require only the consent of the Agent; (vii) amend this
Section 10.1; (viii) amend the definition of Majority Lenders; (ix) terminate
the Keepwell Agreement (except pursuant to its terms), the Holdings Guaranty,
the Guaranty or any other keepwell agreement or guaranty delivered pursuant to
the Loan Documents; or (x) increase the advance rates above those set forth on
Schedule IV hereto for Eligible Inventory except as otherwise permitted in
accordance with this Agreement; provided further that no amendment, waiver or
consent shall, unless in writing and signed by the Swing Bank or each Issuer, as
the case may be, in addition to the Lenders required above to take such action,
affect the rights or obligations of the Swing Bank or of the Issuers, as the
case may be, under this Agreement, and provided further that no amendment,
waiver or consent shall, unless in writing and signed by the Agent in addition
to the Lenders required above to
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take such action, affect the rights or duties of the Agent under this Agreement
or the other Loan Documents.
(b) Each Lender Party grants (x) to the Agent the right to purchase all
(but not less than all) of such Lender Party's Commitments and Loans owing to it
and the Notes held by it and all of its rights and obligations hereunder and
under the other Loan Documents at a price equal to the aggregate amount of
outstanding Loans owed to such Lender Party (together with all accrued and
unpaid interest and fees owed to such Lender), and (y) to the Borrower the right
to cause an assignment of all (but not less than all) of such Lender Party's
Commitments and Loans owing to it and the Notes held by it and all of its rights
and obligations hereunder and under the other Loan Documents, which right may be
exercised by the Agent or the Borrower, as the case may be, if such Lender Party
refuses to execute any amendment, waiver or consent which requires the written
consent of all the Lenders and to which the Agent and the Borrower have agreed.
Each Lender Party agrees that if the Agent or the Borrower, as the case may be,
exercises its option hereunder, it shall promptly execute and deliver all
agreements and documentation necessary to effectuate such assignment as set
forth in Section 10.7. Any purchase of such Lender Party's Commitments and Loans
owing to it and the Notes held by it must (i) occur within 30 Business Days from
the date that such Lender Party refuses to execute any amendment, waiver or
consent which requires the written consent of all the Lenders and to which the
Agent and the Borrower have agreed and (ii) include an amount payable to such
Lender Party which is sufficient to compensate such Lender Party for any loss,
expense, or liability as a result of any purchase of such Lender Party's
Commitments and Loans owing to it and the Notes held by it under this Section
10.1(b) which arises out of, or is in connection with, any funds acquired by
such Lender Party to make, continue, or maintain any portion of the principal
amount of any Loan as, or to convert any portion of the principal amount of any
Loan into, a Eurodollar Rate Loan.
10.2. Notices, Etc. All notices and other communications provided for
hereunder shall be in writing (including, without limitation, telegraphic,
telex, telecopy or cable communication) and mailed, telegraphed, telexed,
telecopied, cabled or delivered by hand, if to the Borrower, at its address at
0000 Xxxxxx Xxxxxx, Xxxxxxxx, Xxxx Xxxxxxxx 00000, Attention: Chief Financial
Officer with copy to WHX or WPN Corp. at 000 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx
Xxxx 00000, Attention: Xx. Xxxxxxx Xxxxx; if to any Lender, at its Domestic
Lending Office specified opposite its name on Schedule III hereto; and if to the
Agent, at its address at 000 Xxxx Xxxxxx, 0xx Xxxxx, Xxxx 4, New York, New York
10043, Attention: Xxxxx X. Xxxxxx; or, as to the Borrower or the Agent, at such
other address as shall be designated by such party in a written notice to the
other parties and, as to each other party, at such other address as shall be
designated by such party in a written notice to the Borrower and the Agent.
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All such notices and communications shall, when mailed, telegraphed, telexed,
telecopied, cabled or delivered, be effective when deposited in the mails,
delivered to the telegraph company, confirmed by telex answerback, telecopied
with confirmation of receipt, delivered to the cable company or delivered by
hand to the addressee or its agent, respectively, except that notices and
communications to the Agent pursuant to Article II or IX shall not be effective
until received by the Agent.
Delivery by telecopier of an executed counterpart of any amendment or
waiver of any provision of this Agreement or the Revolving Credit Notes or of
any Exhibit hereto to be executed and delivered hereunder shall be effective as
delivery of a manually executed counterpart thereof.
10.3. No Waiver; Remedies. No failure on the part of any Lender Party
or the Agent to exercise, and no delay in exercising, any right hereunder or
under any Revolving Credit Note shall operate as a waiver thereof; nor shall any
single or partial exercise of any such right preclude any other or further
exercise thereof or the exercise of any other right. The remedies herein
provided are cumulative and not exclusive of any remedies provided by law.
10.4. Costs; Expenses; Indemnities. (a) The Borrower agrees to pay on
demand (i) the reasonable costs and expenses of the Agent in connection with the
preparation, execution, delivery, administration, modification and amendment of
this Agreement, each of the other Loan Documents and each of the other documents
to be delivered hereunder and thereunder, including, without limitation, (A) all
due diligence, collateral review, syndication, transportation, computer,
duplication, appraisal, audit, insurance, consultant, search, filing and
recording fees and expenses and (B) the reasonable fees and out-of-pocket
expenses of counsel to the Agent with respect thereto and with respect to
advising the Agent as to its rights and responsibilities or the perfection,
protection or preservation of rights or interests under this Agreement and the
other Loan Documents with respect to negotiations with any Loan Party or with
other creditors of any Loan Party or any of its Subsidiaries arising out of any
Default or Event of Default or any events or circumstances that may give rise
thereto and with respect to presenting claims in or otherwise participating in
or monitoring any bankruptcy, insolvency or other similar proceeding involving
creditors rights generally and any proceeding ancillary thereto, (ii) the per
diem cost of any audit or collateral evaluation (of not more than $1000 per day)
of the Agent and (iii) the reasonable costs and expenses of the Lender Parties
(including, without limitation, reasonable counsel fees and expenses) in
connection with the enforcement (whether through negotiation, legal proceedings
or otherwise) of this Agreement, the other Loan Documents and the other
documents to be delivered hereunder or thereunder.
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(b) The Borrower agrees to indemnify and hold harmless the Agent, each
Lender Party and their respective Affiliates, and the directors, officers,
employ ees, agents, attorneys, consultants and advisors of or to any of the
foregoing (including, without limitation, those retained in connection with the
satisfaction or attempted satisfaction of any of the conditions set forth in
Article III) (each of the foregoing being an "Indemnitee") from and against any
and all claims, damages, liabilities, obligations, losses, penalties, actions,
judgments, suits, costs, disbursements and expenses of any kind or nature
(including, without limitation, reasonable fees and disbursements of counsel to
any such Indemnitee) which may be imposed on, incurred by or asserted against
any such Indemnitee in connection with or arising out of any investigation,
litigation or proceeding, whether or not any such Indemnitee is a party thereto,
whether direct, indirect or consequential and whether based on any federal,
state or local law or other statutory regulation, securities or commercial law
or regulation, or under common law or in equity, or on contract, tort or
otherwise, in any manner relating to or arising out of this Agreement, any other
Loan Document, any Obligation, any Letter of Credit or any act, event or
transaction related or attendant to any thereof or in connection with any
investigation by any Governmental Authority of any potential matter covered
hereby or thereby (collectively, the "Indemnified Matters"), including, without
limitation, (i) all Environmental Liabilities and Costs arising from or
connected with the past, present or future operations of the Borrower or any of
its Subsidiaries, or damage to real or personal property or natural resources or
harm or injury alleged to have resulted from any Release; (ii) any costs or
liabilities incurred in connection with the investigation, removal, cleanup
and/or remediation of any Contaminant present or arising out of the operations
of any facility of the Borrower or any of its Subsidiaries; (iii) any costs or
liabilities incurred in connection with any Environmental Lien; (iv) any costs
or liabilities incurred in connection with any other matter affecting any
facility pursuant to Environmental Laws, including, without limitation, CERCLA
and applicable state property transfer laws, including, without limitation,
whether, with respect to any of the foregoing, such Indemnitee is a mortgagee
pursuant to any leasehold mortgage, a mortgagee in possession, the successor in
interest to the Borrower or any of its Subsidiaries, or the owner, lessee or
operator of any facility of the Borrower or any of its Subsidiaries by virtue of
foreclosure, except, with respect to any of the foregoing referred to in clauses
(i), (ii), (iii) and (iv), to the extent attributable solely to acts of the
Agent or such Indemnitee or any agent on behalf of the Agent or such Lender
following (x) foreclosure by the Agent or any Indemnitee, or (y) the Agent or
any Lender having become the successor in interest to the Borrower or any of its
Subsidiaries; (v) the management of the Loans and Letters of Credit, or (vi) the
use or intended use of the proceeds of the Loans or Letters of Credit; provided,
however, that the Borrower shall not have any obligation under this Section
10.4(b) to an Indemnitee with respect to any Indemnified Matter caused by or
resulting from the gross negligence or willful misconduct of that Indemnitee.
105
(c) If any Lender receives any payment of principal of, or is subject
to a conversion of, any Eurodollar Rate Loan, other than on the last day of an
Interest Period relating to such Loan, as a result of any payment or conversion
made by the Borrower (other than a payment made to the Agent pursuant to Section
2.3(f)) or acceleration of the maturity of the Revolving Credit Notes pursuant
to Section 8.2 or for any other reason or a conversion of a Eurodollar Rate Loan
does not occur by reason of the fourth sentence of Section 2.8, the Borrower
shall, upon demand by such Lender (with a copy of such demand to the Agent), pay
to the Agent for the account of such Lender all amounts required to compensate
such Lender for any additional losses, costs or expenses which it may reasonably
have incurred or in the future incur as a result of such payment or conversion,
including, without limitation, any actual out-of-pocket loss, cost or expense
incurred by reason of the liquidation or reemployment of deposits or other funds
acquired by such Lender to fund or maintain such Loan.
(d) The Agent and each Lender agree that in the event that any such
investigation, litigation or proceeding set forth in subparagraph (b) above is
asserted or threatened in writing or instituted against it or any other
Indemnitee, or any remedial, removal or response action is requested of it or
any of its officers, directors, agents and employees, for which any Indemnitee
may desire indemnity or defense hereunder, such Indemnitee shall promptly notify
the Borrower in writing.
(e) The Borrower, at the request of any Indemnitee, shall have the
obligation to defend against such investigation, litigation or proceeding or
requested remedial, removal or response action, and the Borrower, in any event,
may control the defense thereof with legal counsel of the Borrower's choice. In
the event that such Indemnitee requests the Borrower to defend against such
investigation, litigation or proceeding or requested remedial, removal or
response action, the Borrower shall promptly do so and such Indemnitee shall
have the right to have legal counsel of its choice participate in such defense
at such Indemnitee's expense. If, without the Borrower's prior written consent
which consent shall not be unreasonably withheld, an Indemnitee shall settle any
such investigation, litigation, proceeding or other action, such Indemnitee
shall be deemed to have waived its rights to indemnity and defense hereunder.
(f) The obligations of the Borrower under this Section 10.4 and under
Sections 2.10 and 2.12 shall survive the repayment of the Loans and the
termination of the Revolving Credit Commitments.
10.5. Right of Set-off. Upon the occurrence and during the continuance
of any Event of Default, each Lender Party and each of its respective Affiliates
is hereby authorized at any time and from time to time, to the fullest extent
permitted by
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law, to set off and apply any and all deposits (general or special, time or
demand, provisional or final) at any time held and other indebtedness at any
time owing by such Lender Party or such Affiliate to or for the credit or the
account of the Borrower against any and all of the Obligations now or hereafter
existing irrespective of whether or not such Lender Party shall have made any
demand under this Agreement, any Revolving Credit Note or any Reimbursement
Agreement or any other Loan Document and although such Obligations may be
unmatured. Each Lender Party agrees promptly to notify the Borrower after any
such set-off and application made by such Lender Party or its Affiliate;
provided, however, that the failure to give such notice shall not affect the
validity of such set-off and application. The rights of each Lender Party and
its respective Affiliates under this Section are in addition to the other rights
and remedies (including, without limitation, other rights of set-off) which such
Lender Party and its respective Affiliates may have.
10.6. Binding Effect. This Agreement shall become effective when it
shall have been executed by the Borrower and the Agent and when the Agent shall
have been notified by each Lender Party that such Lender Party has executed it
and thereafter shall be binding upon and inure to the benefit of the Borrower,
the Agent and each Lender Party and their respective successors and assigns,
except that the Borrower shall not have the right to assign its rights hereunder
or any interest herein without the prior written consent of the Lender Parties.
10.7. Assignments and Participations. (a) Each Lender may sell, trans
fer, negotiate or assign to one or more other Lenders or Eligible Assignees all
or a portion of its Revolving Credit Commitments, commitment to issue Letters of
Credit and the Loans and Letter of Credit Obligations owing to it and Revolving
Credit Notes held by it and a commensurate portion of its rights and obligations
hereunder and under the other Loan Documents; provided, however, that (i) if
such an assignment is of Revolving Credit Loans and Revolving Credit
Commitments, each such assignment shall be of a constant, and not a varying,
percentage of the assigning Lender's rights and obligations under this Agreement
with respect to Revolving Credit Loans, Letters of Credit and Revolving Credit
Commitments, (ii) the aggregate amount of the Revolving Credit Commitments,
Letters of Credit, Letter of Credit Obligations and Loans being assigned
pursuant to each such assignment (determined as of the date of the Assignment
and Acceptance with respect to such assignment) shall in no event be less than
$5,000,000, in the case of an assignment to a Lender Party, or $15,000,000, in
the case of an assignment to a Person that is not a Lender Party, or, in each
case, an integral multiple of $1,000,000 in excess thereof, unless such
assignment is of the Lender's entire Revolving Credit Commitment, and (iii) each
assignee hereunder shall be an Eligible Assignee. The parties to each assignment
shall execute and deliver to the Agent, for its acceptance and recording in the
Register, an Assignment and
107
Acceptance, together with a fee of $3,500 and the Revolving Credit Note (or an
affidavit of loss and indemnity with respect to such Revolving Credit Note,
satisfactory to the Agent) subject to such assignment. Upon such execution,
delivery, acceptance and recording, from and after the effective date specified
in such Assignment and Acceptance, (A) the assignee thereunder shall become a
party hereto and, to the extent that rights and obligations under the Loan
Documents have been assigned to such assignee pursuant to such Assignment and
Acceptance, have the rights and obligations of a Lender, and if such Lender was
an Issuer, of an Issuer hereunder and thereunder with respect to Letters of
Credit issued after such effective date, and (B) the assignor thereunder shall,
to the extent that rights and obligations under this Agreement have been
assigned by it pursuant to such Assignment and Acceptance, relinquish its rights
(except for those rights which survive the payment in full of principal and
interest hereunder) and be released from its obligations under the Loan
Documents (and, in the case of an Assignment and Acceptance covering all or the
remaining portion of an assigning Lender's or Issuer's rights and obligations
under the Loan Documents, such Lender or Issuer shall cease to be a party
hereto).
(b) By executing and delivering an Assignment and Acceptance, the
Lender assignor thereunder and the assignee thereunder confirm to and agree with
each other and the other parties hereto as follows: (i) other than as provided
in such Assignment and Acceptance, such assigning Lender Party makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with this
Agreement or any other Loan Document or any instrument or other document
furnished pursuant hereto or thereto or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of, or the perfection or
priority of any lien or security interest created or purported to be created
under or in connection with, this Agreement or any other Loan Document or any
other instrument or document furnished pursuant hereto or thereto; (ii) such
assigning Lender Party makes no representation or warranty and assumes no
responsibility with respect to the financial condition of any Loan Party or the
performance or observance by any Loan Party of any of its obligations under this
Agreement or any other Loan Document or of any other instrument or document fur
nished pursuant hereto or thereto; (iii) such assignee confirms that it has
received a copy of this Agreement and each of the other Loan Documents together
with a copy of any of the financial statements referred to in Section 4.5 of
this Agreement and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into such
Assignment and Acceptance; (iv) such assignee will, independently and without
reliance upon the Agent, such assigning Lender Party or any other Lender Party,
and based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not taking action
under this Agreement; (v) such assignee confirms that it is an Eligible
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Assignee; (vi) such assignee appoints and authorizes the Agent to take such
action as agent on its behalf and to exercise such powers and discretion under
this Agreement and the other Loan Documents as are delegated to the Agent by the
terms hereof and thereof, together with such powers and discretion as are
reasonably incidental thereto; and (vii) such assignee agrees that it will
perform in accordance with their terms all of the obligations which by the terms
of this Agreement are required to be performed by it as a Lender and, if
appropriate, an Issuer.
(c) The Agent shall maintain at its address referred to in Section 10.2
a copy of each Assignment and Acceptance delivered to and accepted by it and a
register for the recordation of the names and addresses of the Lender Parties
and the Revolving Credit Commitments of, Letter of Credit Obligations owing to,
and principal amount of the Loans owing to each Lender Party from time to time
(the "Register"). The entries in the Register shall be conclusive and binding
for all purposes, absent manifest error, and the Loan Parties, the Agent and the
Lender Parties may treat each Person whose name is recorded in the Register as a
Lender Party for all purposes of this Agreement. The Register shall be available
for inspection by the Borrower, the Agent or any Lender Party at any reasonable
time and from time to time upon reasonable prior notice.
(d) Upon its receipt of an Assignment and Acceptance executed by an
assigning Lender Party and an assignee representing that it is an Eligible
Assignee, together with the Revolving Credit Note subject to such assignment,
the Agent shall, if such Assignment and Acceptance has been completed, (i)
accept such Assignment and Acceptance, (ii) record the information contained
therein in the Register and (iii) give prompt notice thereof to the Borrower.
Within five Business Days after its receipt of such notice, the Borrower, at its
own expense, shall execute and deliver to the Agent, in exchange for such
surrendered Revolving Credit Note, a new Revolving Credit Note to the order of
such Eligible Assignee in an amount equal to the Revolving Credit Commitment
assumed by it pursuant to such Assignment and Acceptance and, if the assigning
Lender Party has retained a Revolving Credit Commitment hereunder, a new
Revolving Credit Note to the order of the assigning Lender Party in an amount
equal to the Revolving Credit Commitment retained by it hereunder. Such new
Revolving Credit Note shall be dated the same date as the surrendered Revolving
Credit Note and be in substantially the form of Exhibit A hereto.
(e) Each Lender Party may sell participations to one or more banks or
other Persons in or to all or a portion of its rights and obligations under the
Loan Documents (including, without limitation, all or a portion of its Revolving
Credit Commitment, the Letter of Credit Obligations owing to it and the Loans
owing to it and the Revolving Credit Note held by it). The terms of such
participation shall not, in
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any event, require the participant's consent to any amendment, waiver or other
modification of any provision of any Loan Document, the consent to any departure
by any Loan Party therefrom, or to the exercising or refraining from the
exercise of any powers or rights which such Lender Party may have under or in
respect of the Loan Documents (including, without limitation, the right to
enforce the obligations of the Loan Parties), except if any such amendment,
waiver or other modification or consent would (i) reduce the amount, or postpone
any date fixed for, any amount (whether of principal, interest or fees) payable
to such participant under the Loan Documents to which such participant would
otherwise be entitled under such participation or (ii) result in the release of
any of the Collateral, except (A) as shall otherwise be provided in the
Collateral Documents and (B) Collateral having an aggregate Fair Market Value
not in excess of $25,000,000 in any Fiscal Year. In the event of the sale of any
participation by any Lender Party, (i) such Lender Party's obligations under the
Loan Documents (including, without limitation, its Revolving Credit Commitment)
shall remain unchanged, (ii) such Lender Party shall remain solely responsible
to the other parties hereto for the performance of such obligations, (iii) such
Lender Party shall remain the holder of such Revolving Credit Note and
Obligations for all purposes of this Agreement, (iv) such Lender Party shall
disclose to the Agent the identity of each bank or other entity purchasing a
participation and the principal amount of such participation within five
Business Days after the sale and purchase of such participation, and (v) the
Borrower, the Agent and the other Lender Parties shall continue to deal solely
and directly with such Lender in connection with such Lender Party's rights and
obligations under this Agreement.
(f) Notwithstanding any other provision set forth in this Agreement,
any Lender may at any time create a security interest in all or any portion of
its rights under this Agreement (including, without limitation, the Loans owing
to it and the Note or Notes held by it) in favor of any Federal Reserve Bank in
accordance with Regulation A of the Board of Governors of the Federal Reserve
System.
10.8. Governing Law. This Agreement and the Revolving Credit Notes and
the rights and obligations of the parties hereto and thereto shall be governed
by, and construed in accordance with, the law of the State of New York.
10.9. Submission to Jurisdiction. (a) Any legal action or proceeding
with respect to this Agreement or the Revolving Credit Notes or any document
related thereto may be brought in the courts of the State of New York or of the
United States of America for the Southern District of New York, and, by
execution and delivery of this Agreement, the Borrower hereby accepts for itself
and in respect of its property, generally and unconditionally, the jurisdiction
of the aforesaid courts. The parties hereto hereby irrevocably waive any
objection, including, without limitation, any
110
objection to the laying of venue or based on the grounds of forum non
conveniens, which any of them may now or hereafter have to the bringing of any
such action or proceeding in such respective jurisdictions.
(b) The Borrower irrevocably consents to the service of process of any
of the aforesaid courts in any such action or proceeding by the mailing of a
copy thereof by registered or certified mail, postage prepaid, to the Borrower
at its address provided herein.
(c) Nothing contained in this Section 10.9 shall affect the right of
the Agent or any Lender Party or any holder of a Revolving Credit Note to serve
process in any other manner permitted by law or commence legal proceedings or
otherwise proceed against the Borrower in any other jurisdiction.
10.10. Section Titles. The Section titles contained in this Agreement
are and shall be without substantive meaning or content of any kind whatsoever
and are not a part of the agreement among the parties hereto.
10.11. Execution in Counterparts. 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 one and the same agreement.
10.12. No Liability of the Issuers. The Borrower assumes all risks of
the acts or omissions of any beneficiary or transferee of any Letter of Credit
with respect to its use of such Letter of Credit. Neither any Issuer nor any of
its officers or directors shall be liable or responsible for: (a) the use that
may be made of any Letter of Credit or any acts or omissions of any beneficiary
or transferee in connection therewith; (b) the validity, sufficiency or
genuineness of documents, or of any endorsement thereon, even if such documents
should prove to be in any or all respects invalid, insufficient, fraudulent or
forged; (c) payment by such Issuer against presentation of documents that do not
comply with the terms of a Letter of Credit, including failure of any documents
to bear any reference or adequate reference to the Letter of Credit; or (d) any
other circumstances whatsoever in making or failing to make payment under any
Letter of Credit, except that the Borrower shall have a claim against such
Issuer, and such Issuer shall be liable to the Borrower, to the extent of any
direct, but not consequential, damages suffered by the Borrower that the
Borrower prove were caused by (i) such Issuer's willful misconduct or gross
negligence in determining whether documents presented under any Letter of Credit
comply with the terms of the Letter of Credit or (ii) such Issuer's willful
failure to make lawful payment under a Letter of Credit after the presentation
to it of a draft and certificates strictly
111
complying with the terms and conditions of the Letter of Credit. In furtherance
and not in limitation of the foregoing, such 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.
10.13. Entire Agreement. This Agreement, together with all of the other
Loan Documents and all certificates and documents delivered hereunder or
thereunder, and the fee letter by and between the Borrower and each of the
Lender Parties embody the entire agreement of the parties and supersedes all
prior agreements and understandings relating to the subject matter hereof.
10.14. Confidentiality. Each Lender Party and the Agent agree to keep
information obtained by it pursuant hereto and the other Loan Documents
confidential in accordance with such Lender Party's or the Agent's, as the case
may be, customary practices and agrees that it will only use such information in
connection with the transactions contemplated by this Agreement and not disclose
any of such information other than (i) to such Lender Party's or the Agent's, as
the case may be, Affiliates, employees, representatives and agents who are or
are expected to be involved in the evaluation of such information in connection
with the transactions contemplated by this Agreement and who are advised of the
confidential nature of such information, (ii) to the extent such information
presently is or hereafter becomes available to such Lender Party or the Agent,
as the case may be, on a non-confidential basis from a source other than the
Borrower, (iii) to the extent disclosure is required by law, regulation or
judicial order (which requirement or order shall be promptly notified to the
Borrower) or requested or required by bank regulators or auditors, or (iv) to
assignees or participants or potential assignees or participants who agree to be
bound by the provisions of this Section.
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10.15. Waiver of Jury Trial. Each of the Borrower, the Agent and the
Lender Parties irrevocably waives all right to trial by jury in any action,
proceeding or counterclaim (whether based on contract, tort or otherwise)
arising out of or relating to any of the Loan Documents, the Loans or the
actions of the Agent or any Lender Party in the negotiation, administration,
performance or enforcement thereof.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized as of the date
first above written.
BORROWER
--------
WHEELING-PITTSBURGH STEEL
CORPORATION
By: /s/ Xxxx Xxxxxx
-------------------------------
Name: Xxxx Xxxxxx
Title: Executive Vice President and Chief
Financial Officer
AGENT
-----
CITIBANK, N.A.,
as Agent
By: /s/ Illegible
-------------------------------
Name:
Title:
113
LENDERS
-------
CITICORP USA, INC.
By: /s/ Illegible
-------------------------------
Name:
Title:
FIRST UNION NATIONAL BANK
By: /s/ Xxxxxxxx Arrigian
-------------------------------
Name: Xxxxxxxx Arrigian
Title: Assistant Vice President
BANK OF AMERICA NT&SA
By: /s/ Xxxxxx X. Xxxxxxxx
-------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Vice President
NATIONAL CITY COMMERCIAL
FINANCE, INC.
By: /s/ Xxxx X. Xxxx
-------------------------------
Name: Xxxx X. Xxxx
Title: Vice President
XXXXXX FINANCIAL, INC.
By: /s/ Xxxx Xxxx
-------------------------------
Name: Xxxx Xxxx
Title: Senior Vice President
AMERICAN NATIONAL BANK AND TRUST
COMPANY, A BANK ONE COMPANY
By: /s/ Xxxxx X. Xxxxx
-------------------------------
Name: Xxxxx X. Xxxxx
Title: Vice President
ISSUER (AND NOT LENDER)
-----------------------
CITIBANK, N.A.
By: /s/ Illegible
-------------------------------
Name:
Title:
