REVOLVING CREDIT AGREEMENT
by and among
REPUBLIC TECHNOLOGIES INTERNATIONAL, LLC
BANKBOSTON, N.A.
as Administrative Agent and Co-Book Manager
BANK OF AMERICA, N.A.
as Syndication Agent and Co-Book Manager
and
THE CHASE MANHATTAN BANK
as Documentation Agent and Co-Book Manager
and the Lending Institutions listed on Schedule 1 hereto
as Banks
with
BANCBOSTON XXXXXXXXX XXXXXXXX INC.
and
BANK OF AMERICA, N.A.,
as Co-Arrangers
August 13, 1999
TABLE OF CONTENTS
Section 1. DEFINITIONS AND RULES OF INTERPRETATION.............................1
Section 1.1. Definitions...................................................1
Section 1.2. Rules of Interpretation......................................27
Section 2. THE REVOLVING CREDIT FACILITY......................................28
Section 2.1. Commitment to Lend...........................................28
Section 2.2. Commitment Fee...............................................29
Section 2.3. Reduction of Total Commitment................................29
Section 2.4. The Revolving Credit Notes...................................29
Section 2.5. Interest on Revolving Credit Loans...........................30
Section 2.6. Requests for Revolving Credit Loans..........................30
2.6.1. General........................................................30
2.6.2. Swing Line.....................................................30
Section 2.7. Conversion Options...........................................31
2.7.1. Conversion to Different Type of Revolving Credit Loan..........31
2.7.2. Continuation of Type of Revolving Credit Loan..................31
2.7.3. Eurodollar Rate Loans..........................................32
Section 2.8. Funds for Revolving Credit Loan..............................32
2.8.1. Funding Procedures.............................................32
2.8.2. Advances by Agent..............................................32
2.8.3. Settlements....................................................33
2.8.3.1. General..................................................33
2.8.3.2. Failure to Make Funds Available..........................33
2.8.3.3. No Effect on Other Banks.................................34
Section 2.9. Change in Borrowing Base.....................................34
Section 2.10. Canadian Subfacility........................................34
Section 3. REPAYMENT OF THE REVOLVING CREDIT LOANS............................34
Section 3.1. Maturity.....................................................34
Section 3.2. Mandatory Repayments of Revolving Credit Loans...............34
Section 3.3. Optional Repayments of Revolving Credit Loans................36
Section 3.4. Automatic Repayments of Revolving Credit Loans Prior
to Event of Default...........................................................37
3.4.1. Credit for Funds Transferred from Swept Accounts...............37
3.4.2. Application of Automatic Payments Prior to Event of Default....37
Section 3.5. Automatic Repayments of Revolving Credit Loans After
Event of Default..............................................................38
Section 4. LETTERS OF CREDIT..................................................38
Section 4.1. Letter of Credit Commitments.................................38
4.1.1. Commitment to Issue Letters of Credit..........................38
4.1.2. Letter of Credit Applications..................................39
4.1.3. Terms of Letters of Credit.....................................39
4.1.4. Reimbursement Obligations of Banks.............................39
4.1.5. Participation of Banks.........................................39
Section 4.2. Reimbursement Obligation of the Borrower.......................39
Section 4.3. Letter of Credit Payments......................................40
Section 4.4. Obligations Absolute...........................................41
Section 4.5. Reliance by Issuer.............................................41
Section 4.6. Letter of Credit Fee...........................................42
Section 5. CERTAIN GENERAL PROVISIONS.........................................42
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Section 5.1. Fees.........................................................42
Section 5.2. Funds for Payments...........................................42
5.2.1. Payments to Agent..............................................42
5.2.2. No Offset, Etc.................................................42
Section 5.3. Computations.................................................44
Section 5.4. Inability to Determine Eurodollar Rate.......................44
Section 5.5. Illegality...................................................45
Section 5.6. Additional Costs, Etc........................................45
Section 5.7. Capital Adequacy.............................................46
Section 5.8. Certificate..................................................47
Section 5.9. Indemnity....................................................47
Section 5.10. Interest After Default......................................47
5.10.1. Overdue Amounts...............................................47
5.10.2. Amounts Not Overdue...........................................47
5.10.3. Maximum Interest..............................................47
5.11. Replacement Banks...................................................48
Section 6. SECURITY AND GUARANTY..............................................48
Section 6.1. Collateral Security..........................................48
Section 6.2. Guaranty.....................................................49
Section 6.2.1. Guaranty of Payment and Performance......................49
Section 6.2.2. Guarantors' Agreement to Pay Enforcement Costs, etc......49
Section 6.2.3. Waivers by Guarantors; Bank's Freedom to Act.............50
Section 6.2.4. Unenforceability of Obligations Against Borrower.........51
6.2.5. Subrogation; Subordination.....................................51
6.2.5.1. Waiver of Rights Against Borrower........................51
6.2.5.2. Subordination............................................51
6.2.5.3. Provisions Supplemental..................................51
6.2.6. Setoff.........................................................52
6.2.7. Further Assurances.............................................52
6.2.8. Termination; Reinstatement.....................................52
6.2.9. Successors and Assigns.........................................52
Section 7. REPRESENTATIONS AND WARRANTIES.....................................52
Section 7.1. Corporate Authority..........................................53
7.1.1. Incorporation; Good Standing...................................53
7.1.2. Authorization..................................................53
7.1.3. Enforceability.................................................53
Section 7.2. Governmental Approvals.......................................53
Section 7.3. Title to Properties; Leases..................................53
Section 7.4. Financial Statements and Projections.........................54
7.4.1. Financial Statements...........................................54
7.4.2. Projections....................................................54
Section 7.5. No Material Changes, Etc.....................................54
Section 7.6. Franchises, Patents, Copyrights, Etc.........................55
Section 7.7. Litigation...................................................55
Section 7.8. No Materially Adverse Contracts, Etc.........................55
Section 7.9. Compliance with Other Instruments, Laws, Etc.................55
Section 7.10. Tax Status..................................................56
Section 7.11. No Event of Default.........................................56
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Section 7.12. Holding Company and Investment Company Acts.................56
Section 7.13. Absence of Financing Statements, Etc........................56
Section 7.14. Perfection of Security Interest.............................56
Section 7.15. [Intentionally Omitted].....................................57
Section 7.16. Employee Benefit Plans......................................57
7.16.1. In General....................................................57
7.16.2. Guaranteed Pension Plans......................................57
7.16.3. Multiemployer Plans...........................................57
Section 7.17. Regulations U and X...........................................57
Section 7.18. Environmental Compliance......................................58
Section 7.19. Subsidiaries, Etc.............................................59
Section 7.20. Bank Accounts.................................................59
Section 7.21. Fiscal Year...................................................59
Section 7.22. Disclosure....................................................59
Section 7.23. Year 2000 Problem.............................................60
Section 7.24. Ownership of Assets of Constituent Companies..................60
Section 7.25. Ineligible Securities.........................................60
Section 8. AFFIRMATIVE COVENANTS OF THE BORROWER..............................60
Section 8.1. Punctual Payment.............................................60
Section 8.2. Maintenance of Office........................................60
Section 8.3. Records and Accounts.........................................61
Section 8.4. Financial Statements, Certificates and Information...........61
Section 8.5. Notices......................................................64
8.5.1. Defaults.......................................................64
8.5.2. Environmental Events...........................................64
8.5.3. Notification of Claim against Collateral.......................64
8.5.4. Notice of Litigation and Judgments.............................64
8.5.5. Notices Concerning Inventory Collateral........................65
Section 8.6. Existence; Maintenance of Properties.........................65
Section 8.7. Insurance....................................................65
Section 8.8. Taxes, Etc...................................................67
Section 8.9. Inspection of Properties and Books, Etc......................67
8.9.1. General........................................................67
8.9.2. Commercial Finance Examinations................................68
8.9.3. Communications with Accountants................................68
8.9.4. Environmental Assessments......................................68
Section 8.10. Compliance with Laws, Contracts, Licenses, and Permits......68
Section 8.11. Employee Benefit Plans......................................69
Section 8.12. Use of Proceeds.............................................69
Section 8.13. Bank Accounts; Agency Account Arrangements..................69
Section 8.13.1. Bank Accounts. Commencing on or prior to the
Sweep Deadline,...............................................................69
Section 8.13.2. Agency Account Arrangements...........................69
Section 8.14. Borrowing Base..............................................70
Section 8.15. Further Assurances..........................................71
Section 9. CERTAIN NEGATIVE COVENANTS OF THE BORROWER.........................71
Section 9.1. Restrictions on Indebtedness.................................71
Section 9.2. Restrictions on Liens........................................74
Section 9.3. Restrictions on Investments..................................76
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Section 9.4. Change in Terms of Capital Stock; Distributions and
other Restricted Payments.....................................................78
Section 9.5. Merger and Consolidation.....................................79
Section 9.6. Sale and Leaseback; Disposition of Assets....................80
Section 9.7. Compliance with Environmental Laws...........................80
Section 9.8. Indebtedness in respect of the Notes.........................81
Section 9.9. Employee Benefit Plans.......................................81
Section 9.10. Bank Accounts...............................................81
Section 9.11. Limitation on Issuance of Shares of Subsidiaries;
Disposition of Shares and Indebtedness of Subsidiaries........................82
Section 9.12. Intentionally Omitted.......................................82
Section 9.13. No Material Changes, Etc....................................82
Section 9.14. No Subsidiaries.............................................82
Section 9.15. Transactions with Affiliates................................82
Section 9.16. Parent......................................................83
Section 10. FINANCIAL COVENANTSOFTHEBORROWER..................................83
Section 10.1. Capital Expenditures........................................83
Section 10.2. Minimum Fixed Charge Coverage Ratio.........................84
Section 11. CONCERNING THE EFFECTIVE DATE; CONDITIONS TO EFFECTIVENESS........84
Section 11.1. Loan Documents..............................................84
Section 11.2. NoteDocuments; Restructuring Documents; Warrant Documents...84
Section 11.3. Certified Copies of Charter Documents.......................84
Section 11.4. Corporate or Limited Liability Company Action...............85
Section 11.5. Incumbency Certificate......................................85
Section 11.6. Validity of Liens...........................................85
Section 11.7. Perfection Certificates and UCC Search Results..............85
Section 11.8. Certificates of Insurance...................................85
Section 11.9. Borrowing Base Report.......................................85
Section 11.10. Opinions of Counsel........................................86
Section 11.11. Payment of Fees............................................86
Section 11.12. Payment of Interest and Fees under Prior Credit Agreement..86
Section 11.13. [Intentionally Omitted.]...................................86
Section 11.14. Commercial Finance Examination.............................86
Section 11.15. Indebtedness in respect of the Notes.......................86
Section 11.16. Equity Contribution........................................86
Section 11.17. Restructuring..............................................86
Section 11.18. EBITDA.....................................................87
Section 11.19. Reports by Deloitte & Touche, Hatch Engineering and
Metal Strategies, Inc.........................................................87
Section 11.20. Hazardous Waste Assessments................................87
Section 11.21. Labor Agreements...........................................87
Section 11.22. Excess Availability........................................87
Section 11.23. Solvency Opinion...........................................87
Section 11.24. Appraisal of Canton Cast-Roll Facility.....................87
Section 11.25. Survey and Taxes...........................................87
Section 11.26. Title Insurance............................................87
Section 12. CONDITIONS TO ALL BORROWINGS......................................88
Section 12.1. Representations True........................................88
Section 12.2. No Legal Impediment.........................................88
Section 12.3. Governmental Regulation.....................................88
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Section 12.4. Proceedings and Documents...................................88
Section 12.5. Borrowing Base Report.......................................88
Section 13. EVENTS OF DEFAULT; ACCELERATION; ETC..............................88
Section 13.1. Events of Default and Acceleration..........................89
Section 13.2. Termination of Commitments..................................91
Section 13.3. Remedies....................................................92
Section 13.4. Distribution of Collateral Proceeds.........................92
Section 14. SETOFF............................................................93
Section 15. THE AGENT.........................................................94
Section 15.1. Authorization.................................................94
Section 15.2. Employees and Agents..........................................94
Section 15.3. No Liability..................................................94
Section 15.4. No Representations............................................94
Section 15.5. Payments......................................................95
15.5.1. Payments to Agent.............................................95
15.5.2. Distribution by Agent.........................................95
15.5.3. Delinquent Banks..............................................95
Section 15.6. Holders of Revolving Credit Notes...........................96
Section 15.7. Indemnity...................................................96
Section 15.8. Agent as Bank...............................................96
Section 15.9. Resignation.................................................96
Section 15.10. Notification of Defaults and Events of Default.............97
Section 15.11. Duties in the Case of Enforcement..........................97
Section 16. EXPENSES..........................................................97
Section 17. INDEMNIFICATION...................................................98
Section 18. SURVIVAL OF COVENANTS, ETC........................................99
Section 19. ASSIGNMENT AND PARTICIPATION......................................99
Section 19.1. Conditions to Assignment by Banks...........................99
Section 19.2. Certain Representations and Warranties; Limitations;
Covenants....................................................................100
Section 19.3. Register...................................................100
Section 19.4. New Revolving Credit Notes.................................101
Section 19.5. Participations.............................................101
Section 19.6 [Intentionally Omitted]....................................101
Section 19.7. Assignee or Participant Affiliated with the Borrower.......101
Section 19.8. Miscellaneous Assignment Provisions........................102
Section 19.9. Assignment by Borrower.....................................102
Section 20. NOTICES, ETC.....................................................102
Section 21. GOVERNING LAW....................................................103
Section 22. HEADINGS.........................................................103
Section 23. COUNTERPARTS.....................................................103
Section 24. ENTIRE AGREEMENT, ETC............................................103
Section 25. WAIVER OF JURY TRIAL.............................................103
Section 26. CONSENTS, AMENDMENTS, WAIVERS, ETC...............................104
Section 27. SEVERABILITY.....................................................105
Section 28. TREATMENT OF CERTAIN CONFIDENTIAL INFORMATION....................105
Section 28.1. Sharing of Information with Section 20 Subsidiary..........105
Section 28.2. Confidentiality............................................105
Section 28.3. Prior Notification ............................................106
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Section 28.4. Other .........................................................106
REVOLVING CREDIT AGREEMENT
This REVOLVING CREDIT AGREEMENT is made as of the 13th day of August,
1999, by and among REPUBLIC TECHNOLOGIES INTERNATIONAL, LLC, a Delaware limite d
liability company having its principal place of business at 0000 Xxxxxxx
Xxxxxxx, Xxxxx, XX 00000 (the "Borrower"), Republic Technologies International
HOLDINGS, LLC, a Delaware limited liability company, RTI Capital Corp., a
Delaware corporation, Bliss & Xxxxxxxx, LLC, a Delaware limited liability
company, Canadian Drawn Steel Company Inc. a Canadian corporation and
Nimishillen & Tuscarawas, LLC, a Delaware limited liability company
(collectively, the "Guarantors"), BANKBOSTON, N.A. ("BKB"), BANK OF AMERICA,
N.A. ("BofA"), THE CHASE MANHATTAN BANK ("Chase"), the other lending
institutions from time to time listed on Schedule 1 hereto (the "Banks"), BofA
as syndication agent (as such, the "Syndication Agent") and co-book manager (as
such, a "Co-Book Manager"), Chase as documentation agent (as such, the
"Documentation Agent") and co-book manager (as such, a "Co-Book Manager") and
BKB as administrative agent for itself and the Banks (as such, the "Agent") and
co-book manager (as such, a "Co-Book Manager"). BofA, Chase and BKB are referred
to herein collectively as the "Co-Agents".
RES and BarTech wish to consolidate and combine their operations and to
include certain divisions of USS/Kobe in such consolidations and combinations
pursuant to the Restructuring, and, in connection therewith, the Borrower is
assuming certain of the assets and liabilities of RES, BarTech and USS/Kobe. The
Borrower has requested, and the Banks and the Agent have agreed subject to the
terms and conditions specified herein, to extend credit to the Borrower as
provided for herein. Accordingly, the parties hereto agree as follows:
Section 1. DEFINITIONS AND RULES OF INTERPRETATION.
Section 1.1. Definitions. The following terms shall have the meanings set
forth in this Section 1 or elsewhere in the provisions of this Credit Agreement
referred to below:
Accounts Receivable. All rights of the Borrower or any of the Subsidiary
Guarantors to payment for goods sold, leased or otherwise marketed in the
ordinary course of business and all rights of the Borrower or any of the
Subsidiary Guarantors to payment for services rendered in the ordinary course of
business and all sums of money or other proceeds due thereon pursuant to
transactions with account debtors recorded on books of account in accordance
with generally accepted accounting principles. Solely for the purpose of
calculating the Borrowing Base, Accounts Receivable shall not include that
portion of the sum of money or other proceeds due thereon that relate to sales,
use or property taxes in conjunction with such transactions with account
debtors.
Acquired Portions of USS/Kobe. Those assets and liabilities of USS/Kobe
that are acquired by the Borrower pursuant to the Restructuring, including,
without limitation, the "USS/Kobe Bar Business" as such term is defined in the
Master Restructuring Agreement.
Affected Bank. See Section 5.11.
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Affiliate. Any Person that would be considered to be an affiliate of the
Borrower under Rule 144(a) of the Rules and Regulations of the Securities and
Exchange Commission, as in effect on the date hereof, if the Borrower were
issuing securities.
Agent. See preamble.
Agent's Head Office. The Agent's head office located at 000 Xxxxxxx
Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000, or at such other location as the Agent may
designate from time to time.
Agent's Special Counsel. Xxxxxxx Xxxx LLP or such other counsel as may be
approved by the Agent.
Agency Agreement. See Section 8.13.2.
Applicable Margin. On any date, Applicable Margin shall be the applicable
margin set forth below with respect to the Borrower's Excess Availability and
Availability Block on such date:
=======================================================================================
Letter of Credit
Base Rate Eurodollar Rate Fee
Applicable Applicable Applicable
Excess Availability Margin Margin Margin
---------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------
Excess Availability is greater than
or equal to $45,000,000 and
Availability Block is $35,000,000 1.25% 3.25% 3.25%
---------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------
Excess Availability is less than
$45,000,000 or Availability
Block is greater than $35,000,000 1.50% 3.50% 3.50%
---------------------------------------------------------------------------------------
=======================================================================================
Assignment and Acceptance. See Section 19.1.
Availability. As of any date of determination, the lesser of (a) the Total
Commitment and (b) the remainder of the Borrowing Base, minus the Rate
Protection Exposure.
Availability Block. As of the date of determination, an amount determined
by the Agent, in each case determined in accordance with adjustments set forth
below, provided, however, that (i) the Availability Block shall not be less than
$35,000,000 at any time, (ii) the Availability Block shall not be greater than
the Availability Block Cap at any time and (iii) the Availability Block on the
Effective Date shall be $35,000,000. In determining the Availability Block at
any time, the following adjustments shall be made:
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(a) If, on any date, given the amount of the Availability Block on such
date prior to any adjustment of the Borrowing Base pursuant hereto, Excess
Availability is within the ranges set forth in the column below labeled
"Pre-Adjustment Excess Availability", the Availability Block shall be adjusted
upwards to the amounts set forth in the column below labeled "Post-Adjustment
Availability Block" (provided, however, that upon the Availability Block's being
adjusted upwards pursuant to this clause (a), (i) if Excess Availability returns
within two Business Days to the range corresponding to the Availability Block
amount which existed before such upward adjustment, the Availability Block shall
be readjusted downwards pursuant to this clause (a) to such amount and (ii) the
Availability Block may be subject to further adjustment downwards pursuant to
clause (b) below):
--------------------------------------------------------------------------------
Pre-Adjustment Excess Availability: Post-Adjustment Availability Block:
----------------------------------- -----------------------------------
--------------------------------------------------------------------------------
Greater than or equal to $45,000,000 $35,000,000
--------------------------------------------------------------------------------
Greater than or equal to $30,000,000 and
less than $45,000,000 $42,500,000
--------------------------------------------------------------------------------
Less than $30,000,000 $50,000,000
--------------------------------------------------------------------------------
(b) If, on any date, Excess Availability has remained within one of the
ranges set forth in the column below labeled "Thirty-Day Excess Availability"
for the period of 30 consecutive days ending on such day, the Availability Block
shall be adjusted downwards to the amounts set forth in the column below labeled
"Post-Adjustment Availability Block":
--------------------------------------------------------------------------------
Thirty Day Excess Availability: Post Adjustment Availability Block:
------------------------------- -----------------------------------
--------------------------------------------------------------------------------
Greater than or equal to $55,000,000 $35,000,000
--------------------------------------------------------------------------------
Greater than or equal to $40,000,000 and
less than $55,000,000 $42,500,000
--------------------------------------------------------------------------------
Availability Block Cap. An amount equal to $50,000,000, provided that on
each day on which the Eligible Fixed Asset Cap is reduced in accordance with the
schedule set forth in the definition of Eligible Fixed Asset Cap, the
Availability Block Cap shall be reduced on the same day by $4,500,000, provided
further that any such reduction of the Availability Block Cap on any such day
shall be made only if no Event of Default is continuing on such date.
Banks. See preamble.
BarTech Balance Sheet Date. January 2, 1999.
Base Rate. The higher of (a) the annual rate of interest announced from
time to time by BKB at its head office in Boston, Massachusetts, as its "base
rate" and (b) one-half of one percent (1/2%) above the Federal Funds Effective
Rate. For the purposes of this definition, "Federal Funds Effective Rate" shall
mean for any day, the rate per annum equal to the weighted average of the rates
on overnight federal funds transactions with members of the Federal Reserve
System arranged by federal funds brokers, as published
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for such day (or, if such day is not a Business Day, for the next preceding
Business Day) by the Federal Reserve Bank of New York, or, if such rate is not
so published for any day that is a Business Day, the average of the quotations
for such day on such transactions received by the Agent from three funds brokers
of recognized standing selected by the Agent.
Base Rate Loans. Revolving Credit Loans bearing interest calculated by
reference to the Base Rate.
BKB. See preamble.
Blackstone. (A) Blackstone Capital Partners II Merchant Banking Fund, L.P.
a Delaware limited partnership, (B) Blackstone Capital Partners III Merchant
Banking Fund L.P., a Delaware limited partnership (C), Blackstone Offshore
Capital Partners II L.P., a Cayman Islands exempted limited partnership, (D)
Blackstone Family Investment Partnership II L.P., a Delaware limited
partnership, (E) each general partner of any of the foregoing who is a partner
or employee of The Blackstone Group, L.P. and (F) any Affiliates of any of the
foregoing.
Blocked Account. See Section 8.13.2.
Blocked Account Bank. See Section 8.13.2.
BofA. See preamble.
Borrower. As defined in the preamble hereto.
Borrowing Base. As of any date of determination, an amount determined by
the Agent by reference to the most recent Borrowing Base Report which is equal
to:
(a) 85% of Eligible Accounts Receivable for which invoices have been
issued and are payable; plus
(b) 60% of the net book value (determined on a first-in first-out basis at
lower of cost or market) of Eligible Inventory; provided, that in no event shall
the amount of the Borrowing Base allocable to Eligible Inventory exceed
$190,000,000; plus
(c) 67% of Eligible Fixed Assets; provided, that in no event shall the
amount of the Borrowing Base allocable to Eligible Fixed Assets exceed the
Eligible Fixed Asset Cap; minus
the Availability Block;
provided however, the Agent reserves the right to change, upon five (5)
business days notice to and consultation with the Borrower but without its
consent, eligibility criteria contained in the definitions of Eligible Accounts
Receivable, Eligible Finished Goods Inventory, Eligible Raw Materials, Eligible
Work-in-Process, Eligible Fixed Assets and Canton Cast-Roll Facility and to
change and/or establish reserves taken in connection with any of the foregoing
from time to time based upon the results of any commercial finance examination
conducted pursuant to Section 8.9.2, any appraisals or other sources of
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information which demonstrate in the Agent's reasonable judgment based on due
inquiry a change in the collectability of Accounts Receivable and/or the
marketability of inventory and/or the value or marketability of the Canton
Cast-Roll Facility not reflected in reserves taken by the Borrower, provided,
further, however, that the value of Eligible Fixed Assets shall not be adjusted
after the Effective Date and prior to March 31, 2001 based on any appraisal of
the Canton Cast-Roll Facility.
Borrowing Base Report. A Borrowing Base Report signed by the treasurer or
other authorized financial officer of the Borrower and the Subsidiary Guarantors
and in substantially the form of Exhibit A hereto.
Business Day. Any day on which banking institutions in Boston,
Massachusetts, are open for the transaction of banking business and, in the case
of Eurodollar Rate Loans, also a day which is a Eurodollar Business Day.
Canadian Dollars or C$. Dollars designated as lawful currency in Canada.
Canadian IP Assignment. The Assignment of Intellectual Property dated as
of the date hereof, and as amended and in effect from time to time, between
Canadian Drawn Steel Company Inc. and the Agent.
Canadian Security Agreement. The Security Agreement dated as of the date
hereof and as amended and in effect from time to time, between Canadian Drawn
Steel Company and the Agent.
Canton Cast Roll Facility. The cast-roll facility and related assets of
the Borrower located in Canton, Ohio at the premises described in Exhibit A to
the Mortgage, including, without limitation, all equipment, fixtures, goods and
other fixture and personal property located from time to time at such premises
and related property.
Canton Indebtedness. See Section 9.1.
Capital Assets. Fixed assets (such as land, buildings, fixtures, machinery
and equipment) and intangible assets (such as patents, copyrights, trademarks,
franchises and goodwill); provided that Capital Assets shall not include any
item customarily charged directly to expense or depreciated over a useful life
of twelve (12) months or less in accordance with generally accepted accounting
principles.
Capital Expenditures. Amounts paid or Indebtedness incurred by the
Borrower or any of its Subsidiaries in connection with (a) the purchase or lease
by the Borrower or any of its Subsidiaries of Capital Assets that would be
required to be capitalized and shown on the balance sheet of such Person in
accordance with generally accepted accounting principles or (b) the lease of any
assets by the Borrower or any of its Subsidiaries as lessee under any synthetic
lease referred to in clause (vi) of the definition of the term "Indebtedness" to
the extent that such assets would have been Capital Assets had the synthetic
lease been treated for accounting purposes as a Capitalized Lease; provided,
however, that Capital Expenditures for the Borrower and its Subsidiaries shall
not include (i) expenditures of proceeds of insurance settlements, condemnation
awards and other settlements in respect of lost, destroyed, damaged or condemned
assets, equipment or
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other property to the extent such expenditures are made to replace or repair
such lost, destroyed, damaged or condemned assets, equipment or other property
or otherwise to acquire assets or properties useful in the business of the
Borrower and its Subsidiaries within 180 days of receipt of such proceeds, (ii)
expenditures that are accounted for as Capital Expenditures of such person and
that actually are paid for by a third party (excluding Borrower or any
Subsidiary thereof) and for which neither the Borrower nor any Subsidiary
thereof has provided any consideration or obligation to such third party or
(iii) the book value of any asset owned by such Person prior to or during such
period to the extent that such book value is included as a capital expenditure
during such period as a result of such person reusing or beginning to reuse such
asset during such period without a corresponding expenditure actually having
been made in such period or committed to be made in a later period, provided
that any expenditure necessary in order to permit such asset to be reused shall
be included as a Capital Expenditure during the period that such expenditure
actually is made and such book value shall have been included in Capital
Expenditures when such asset was originally acquired.
Capitalized Interest. For any period, the aggregate amount of interest
paid or accrued, without duplication as to any previous period, by the Borrower
during such period in respect of the financing of any Capital Expenditures and
required to be capitalized in accordance with generally accepted accounting
principles.
Capitalized Leases. Leases under which the Borrower or any of its
Subsidiaries is the lessee or obligor, the discounted future rental payment
obligations under which are required to be capitalized on the balance sheet of
the lessee or obligor in accordance with generally accepted accounting
principles.
CERCLA. See Section 7.18.
Change of Control. At any time, the occurrence of one or more of the
following events: (i) the sale, lease or transfer, in one or a series of related
transactions, of all or substantially all the assets of the Borrower and its
Subsidiaries, taken as a whole, to a person other than the Permitted Holders; or
(ii) (A) the acquisition by any person or group (within the meaning of Section
13(d) (3) or Section 14(d) (2) of the Exchange Act, or any successor provision),
including any group acting for the purpose of acquiring, holding or disposing of
securities (within the meaning of Rule 13d-5(b) (1) under the Exchange Act),
other than the Permitted Holders, in a single transaction or in a related series
of transactions, by way of merger, consolidation or other business combination
or purchase of beneficial ownership (within the meaning of Rule 13d-3 under the
Exchange Act, or any successor provision), of 35% or more of the total voting
power of the capital stock or membership interests of the Borrower and (B) the
Permitted Holders beneficially own (as defined above), directly or indirectly,
in the aggregate a lesser percentage of the total voting power of the Voting
Stock of the Borrower than such other Person or group and do not have the right
or ability by voting power, contract or otherwise to elect or designate for
election a majority of the Board of Directors or similar governing body of the
Borrower; or (iii) Blackstone shall own, beneficially, directly or indirectly,
less than 20% of the total voting and economic interest of the capital stock or
membership interests of the Borrower; or (iv) directors elected by Blackstone
shall cease to represent a majority of the members of the board of directors or
similar governing body of the Borrower.
-7-
Chase. The Chase Manhattan Bank.
Chase Letter of Credit. The Letter of Credit in the amount of $3,852,000
dated December 5, 1996 issued by Chase for the benefit of U.S. Bank Trust
National Association as Trustee under the Indenture of Trust between the
Development Authority of Cartersville and the U.S. Bank Trust National
Association as Trustee. The Chase Letter of Credit is a Letter of Credit
hereunder.
Closed Facilities. Upon their shut down or closure and subsequent sale,
scrapping or other disposition, the No. 4 blast Furnace, the No. 1 Billet Caster
and the 4 Stand Billet Mill at the Lorain facility, the No. 4(B) and No. 4(C)
Electric Arc Furnaces, the Blooming Mill and the ingot teeming facility in the
Canton, Ohio facility, the 12" bar mill in Canton, Ohio, the cold-finishing
facilities in Medina, Ohio and Batavia; Illinois, the 18" bar mill in Masillon,
Ohio and the 11" bar mill in Chicago, Illinois and one additional cold-finishing
facility, in each case to the extent (i) separable and identifiable and not in
impairment in any material respect of any other Collateral, and (ii) not
constituting the Cast Roll Facility.
Co-Agents. See preamble.
Code. The Internal Revenue Code of 1986, as amended from time to time.
Collateral. All accounts, inventory, instruments, documents and
intellectual property of the Borrower and each of the Guarantors (including,
without limitation, patents, copyrights, trademarks, franchises and goodwill),
in each case as provided in the Security Documents; the Canton Cast-Roll
Facility; the outstanding stock or other equity interests of the Borrower and
its Subsidiaries; and all general intangibles related to the foregoing and all
other properties, rights and assets of the Borrower or any Guarantor that are or
that are intended to be subject to the security interests and mortgages created
by the Security Documents.
Commitment. With respect to each Bank, the amount set forth on Schedule 1
hereto as the amount of such Bank's commitment to make Revolving Credit Loans
to, and to participate in the issuance, extension and renewal of Letters of
Credit for the account of, the Borrower in accordance with and subject to the
terms hereof, as the same may be reduced from time to time pursuant to the
provisions hereof; or if such commitment is terminated pursuant to the
provisions hereof, zero.
Commitment Percentage. With respect to each Bank, the percentage set forth
on Schedule 1 hereto as such Bank's percentage of the aggregate Commitments of
all of the Banks, as such percentages may be adjusted for assignments from time
to time.
Compliance Certificate. See Section 8.4(d).
Concentration Account. Account #531-32381 maintained by the Agent in the
name of the Borrower.
Consolidated or consolidated. With reference to any term defined herein,
shall mean that term as applied to the accounts of the Borrower and its
Subsidiaries, consolidated in accordance with generally accepted accounting
principles.
-8-
Consolidated Cash Interest Expense. For any period, the aggregate amount
of interest required to be paid in cash by the Borrower and its Subsidiaries
during such period on all Indebtedness of the Borrower and its Subsidiaries
outstanding during all or any part of such period, including payments consisting
of interest in respect of any Capitalized Lease, or any synthetic lease referred
to in clause (vi) of the definition of the term "Indebtedness," and including
commitment fees, agency fees, facility fees and similar fees or expenses in
connection with the borrowing of money.
Consolidated Earnings Before Interest, Taxes, Depreciation and
Amortization or EBITDA. With respect to the Borrower and its Subsidiaries for
any period, the Consolidated Net Income of the Borrower and its Subsidiaries for
such period, after all expenses and other proper charges, plus, without
duplication and to the extent deducted from the calculation of Consolidated Net
Income for such period (a) payment or provision for any income and other taxes
based on income for such period, (b) interest expense for such period, (c)
depreciation and amortization for such period and (d) pension curtailment and
severance expenses and other pension and post-retirement benefit expenses, in
each case determined on a consolidated basis for the Borrower and its
Subsidiaries in accordance with generally accepted accounting principles.
Notwithstanding the foregoing, for purposes of calculating EBITDA, Marked to
Market Materials Cost of Sales and Marked to Market Manufacturing and Conversion
Cost of Sales shall be deducted as expenses in the calculation of Consolidated
Net Income (rather than such expenses calculated in accordance with generally
accepted accounting principles).
Consolidated Net Income. With respect to the Borrower and its Subsidiaries
for any period, the consolidated net income (or deficit) of the Borrower and its
Subsidiaries for such period, after deduction of all expenses, taxes, and other
proper charges, including, without limitation, minority interest, determined on
a consolidated basis for such Persons in accordance with generally accepted
accounting principles, after eliminating therefrom all extraordinary
nonrecurring items of income or loss (subtracting, in the case of income and
adding, in the case of loss), provided that there shall be no elimination of
losses or one-time provisions to the extent the same shall result in cash
expenditures in such period or relate to anticipated cash expenditures in a
future period.
Consolidated Operating Cash Flow. For any period, an amount equal to (i)
EBITDA for such period, less (ii) the sum of (A) cash payments actually made for
all taxes paid or tax distributions during such period, plus (B) to the extent
not already deducted in the determination of EBITDA for such period, Capital
Expenditures made during such period to the extent permitted by Section 10.1,
plus (C) to the extent not already deducted in the determination of EBITDA for
such period, cash charges related to pension curtailment and severance expenses
and other pension and post-retirement benefit expenses.
Consolidated Total Debt Service. For any period, Consolidated Cash
Interest Expense for such period plus all mandatory principal payments on
Indebtedness scheduled to be paid during such period by the Borrower and its
Subsidiaries, including payments of principal in respect of any Capitalized
Lease, less, to the extent included in Consolidated Total Debt Service for such
period, any required repayments of the Revolving Credit Loans during such period
to the extent that such repayments were made as a result of any reduction in the
Eligible Fixed Asset Cap.
-9-
Conversion Request. A notice given by the Borrower to the Agent of the
Borrower's election to convert or continue a Revolving Credit Loan in accordance
with Section 2.7.
Credit Agreement. This Revolving Credit Agreement, including the Schedules
and Exhibits hereto, all as amended and in effect from time to time.
Default. See Section 13.1.
Delinquent Bank. See Section 15.5.3.
Distribution. With respect to any Person, the declaration or payment of
any dividend on or in respect of any shares of any class of capital stock,
membership interests or other equity interests of such Person, other than
dividends payable solely in shares of common equity interests of such Person;
the purchase, redemption, or other retirement of, any shares of any class of
capital stock, membership interests or other equity interests of such Person,
directly or indirectly through a Subsidiary of such Person or otherwise; the
return of capital by such Person to its shareholders or other equity holders as
such; or any other distribution on or in respect of any shares of any class of
capital stock, membership interests or other equity interests of such Person.
Documentation Agent. See preamble.
Dollars or $. Dollars in lawful currency of the United States of America.
Dollar Equivalent. With respect to an amount of Canadian Dollars on any
date, the amount of Dollars that may be purchased with such amount of Canadian
Dollars at the Exchange Rate; with respect to an amount of Dollars on any date,
such amount in Dollars.
Domestic Lending Office. Initially, the office of each Bank designated as
such in Schedule 1 hereto; thereafter, such other office of such Bank, if any,
located within the United States that will be making or maintaining Base Rate
Loans.
Domestic Security Agreement. The Security Agreement dated as of the date
hereof and as further amended and in effect from time to time, among the
Borrower, the Guarantors other than Canadian Drawn Steel Company and the Agent.
Drawdown Date. The date on which any Revolving Credit Loan is made or is
to be made, and the date on which any Revolving Credit Loan is converted or
continued in accordance with Section 2.7.
Effective Date. The first date on which the conditions set forth in
Section 11 and Section 12 have been satisfied or waived in writing by each of
the Banks and any Revolving Credit Loans are to be converted or made or any
Letter of Credit is to be issued hereunder.
Eligible Accounts Receivable. On any date, the Dollar Equivalent of the
aggregate of the unpaid portions of Accounts Receivable (net of any credits,
setoffs, deductions, discounts, counterclaims, rebates, offsets, holdbacks,
contras or other adjustments or commissions payable to third parties that are
adjustments to such Accounts Receivable) as to which the Borrower has furnished
reasonably detailed information to the Banks in a
-10-
Borrowing Base Report (i) that the Borrower reasonably and in good faith
determines to be collectible; (ii) that are with account debtors that (A) (x)
are not factors or Affiliates of the Borrower or (y) are American Axle or USX or
other Affiliates approved by the Agent (each of American Axle and USX and such
other approved Affiliates being an "Exempted Affiliate") and either the relevant
date of determination is a date on or prior to thirty (30) days after the
Effective Date or the Agent has received an executed letter in form and
substance satisfactory to the Agent from such Exempted Affiliate, as to the
arms-length nature of the transaction giving rise to the Account Receivable owed
by such Exempted Affiliate, waiving set-off rights and containing such other
provisions as the Agent may reasonably require, (B) purchased the goods or
services giving rise to the relevant Account Receivable in an arm's length
transaction, (C) are not insolvent or involved in any case or proceeding,
whether voluntary or involuntary, under any bankruptcy, reorganization,
arrangement, insolvency, adjustment of debt, dissolution, liquidation or similar
law of any jurisdiction and (D) are, in the Agent's reasonable judgment,
creditworthy (in the event the Agent determines that any account debtor is not
creditworthy, the Agent shall endeavor to notify the Borrower as to such account
debtor); (iii) that are in payment of obligations that have been fully
performed, do not consist of progress xxxxxxxx or xxxx and hold invoices and are
not subject to dispute, or any other similar claims that would reduce the cash
amount payable therefor; (iv) that are not subject to any pledge, restriction,
security interest or other lien or encumbrance other than those created by the
Loan Documents; (v) in which the Agent has a valid and perfected first priority
security interest; (vi) that are neither more than thirty (30) days past due
under the original terms of the sale nor outstanding more than ninety (90) days
past the invoice date therefor; (vii) that are not due from an account debtor
located in Minnesota unless the Borrower (A) has received a certificate of
authority to do business and is in good standing in such state or (B) has filed
a notice of business activities report with the appropriate office or agency of
such state for the current year; (viii) that are not due from any single account
debtor if more than fifty percent (50%) of the aggregate amount of all Accounts
Receivable owing from such account debtor would otherwise not be Eligible
Accounts Receivable; (ix) that are payable in Dollars or Canadian Dollars; (x)
that are not due from the United States of America or any department, agency or
instrumentality thereof, except for those Accounts Receivable for which the
Borrower or its Subsidiaries has complied with the Federal Assignment of Claims
Act; (xi) that are not with account debtors whose obligation to pay is
conditional or subject to a repurchase obligation or right to return, including
xxxx and hold sales, guaranteed sales, sale or return transactions, sales on
approval or consignment sales; (xii) that are not due from any single account
debtor to the extent that after giving effect to the inclusion of such Accounts
Receivable (or a portion thereof) in the Borrowing Base more than twenty percent
(20%) of the Eligible Accounts Receivable included in the Borrowing Base are
owed by such account debtor and (xiii) that are not payable from an office
outside of the United States or Canada unless such account debtor has provided
to the Borrower an irrevocable letter of credit from a financial institution
reasonably satisfactory to the Agent to secure such account debtor's obligations
to the Borrower (but only to the extent of the amount of such letter of credit
and such Letter of Credit is immediately assigned to, and delivered into the
possession of, the Agent).
Eligible Assignee. Any of (a) a commercial bank or finance company
organized under the laws of the United States, or any State thereof or the
District of Columbia, and having total assets in excess of $1,000,000,000; (b) a
savings and loan association or
-11-
savings bank organized under the laws of the United States, or any State thereof
or the District of Columbia, and having a net worth of at least $100,000,000,
calculated in accordance with generally accepted accounting principles; (c) a
commercial bank organized under the laws of any other country which is a member
of the Organization for Economic Cooperation and Development (the "OECD"), or a
political subdivision of any such country, and having total assets in excess of
$1,000,000,000, provided that such bank is acting through a branch or agency
located in the country in which it is organized or another country which is also
a member of the OECD; (d) the central bank of any country which is a member of
the OECD; and (e) any other bank, insurance company, commercial finance company
or other financial institution approved by the Agent, such approval not to be
unreasonably withheld.
Eligible Finished Goods Inventory. On any date, with respect to the
Borrower and the Subsidiary Guarantors, the Dollar Equivalent of the gross book
value, determined in accordance with the first-in, first-out method of inventory
accounting, as reflected on the Borrower's or a Subsidiary Guarantor's books in
accordance with generally accepted accounting principles consistently applied,
of finished goods inventory owned by the Borrower or the Subsidiary Guarantors
and as to which the Borrower has furnished reasonably detailed information to
the Banks in a Borrowing Base Report; provided that Eligible Inventory shall not
include any inventory (i) held on consignment by the Borrower or one of the
Subsidiary Guarantors, or not otherwise owned by the Borrower or the Subsidiary
Guarantors, or of a type no longer sold by the Borrower or the Subsidiary
Guarantors, (ii) which has been returned by a customer and is not in saleable
condition or is damaged or subject to any legal encumbrance, (iii) which is not
located on property owned by the Borrower or one of the Subsidiary Guarantors
unless such inventory is (A) held by the Borrower or a Subsidiary Guarantor on
properties leased by the Borrower or the Subsidiary Guarantors as to which the
Agent has received a waiver from the lessor of such property in form and
substance satisfactory to the Agent, unless the relevant date of determination
is on or prior to thirty (30) days after the Effective Date, (B) not in the
possession of the Borrower or the Subsidiary Guarantors and is not in transit
and (x) the Agent has received a waiver from the party in possession of such
inventory in form and substance satisfactory to the Agent, (y) the Agent has
reduced the value of such inventory by reserves reasonably deemed adequate by
the Agent, and in any event in an amount equal to all obligations of the
Borrower and its Subsidiaries to the party in possession or (z) the relevant
date of determination is prior to thirty (30) days after the Effective Date or
(C) in transit from one location in which the Agent had a perfected security
interest in such inventory to a second location where the Agent has taken all
steps necessary to obtain a perfected security interest in inventory at such
location, and has been in transit for a period of less than ten (10) days, (iv)
as to which the Agent does not have a valid and perfected first priority
security interest, (v) which is not located within the United States of America
or Canada, (vi) which the Agent reasonably deems to be obsolete or not
marketable, (vii) which constitutes supplies or spare parts of the Borrower or
its Subsidiaries, or (viii) which constitutes, railroad inventory or conversion
inventory, in each case as such is reflected on the Borrower's books. Finished
goods inventory immediately loses the status of Eligible Finished Goods
Inventory if and when the Borrower or one of the Subsidiary Guarantors sells it,
otherwise passes title thereto, or consumes it or the Agent releases or
transfers its security interest therein, or if and when an Eligible Account
Receivable arises by virtue of constituting proceeds of such inventory.
Notwithstanding
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the foregoing, but without duplication, Eligible Finished Goods Inventory shall
be reduced by the amount of any specific reserve established by the Borrower
with respect to any Eligible Finished Goods Inventory other than the LIFO
reserve maintained by the Borrower in accordance with generally accepted
accounting principles.
Eligible Fixed Asset Cap. With respect to any period, the amount set forth
below opposite such period:
---------------------------------------------------------------
Period: Eligible Fixed
------- --------------
Asset Cap:
----------
---------------------------------------------------------------
---------------------------------------------------------------
Effective Date - December 31, 2000 $125,000,000
---------------------------------------------------------------
January 1, 2001 - March 31, 2001 $120,500,000
---------------------------------------------------------------
April 1, 2001 - June 30, 2001 $116,000,000
---------------------------------------------------------------
July 1, 2001 - September 30, 2001 $111,500,000
---------------------------------------------------------------
October 1, 2001 - December 31, 2001 $107,000,000
---------------------------------------------------------------
January 1, 2002 - March 31, 2002 $102,500,000
---------------------------------------------------------------
April 1, 2002 - June 30, 2002 $98,000,000
---------------------------------------------------------------
July 1, 2002 - September 30, 2002 $93,500,000
---------------------------------------------------------------
October 1, 2002 - December 31, 2002 $89,000,000
---------------------------------------------------------------
January 1, 2003 - March 31, 2003 $84,500,000
---------------------------------------------------------------
April 1, 2003 - June 30, 2003 $80,000,000
---------------------------------------------------------------
July 1, 2003 - September 30, 2003 $75,500,000
---------------------------------------------------------------
October 1, 2003 - December 31, 2003 $71,000,000
---------------------------------------------------------------
January 1, 2004 - March 31, 2004 $66,500,000
---------------------------------------------------------------
April 1, 2004 - June 30, 2004 $62,000,000
---------------------------------------------------------------
July 1, 2004 - Maturity Date $57,500,000
---------------------------------------------------------------
Eligible Fixed Assets. The appraised liquidation in-place value of the
Canton Cast-Roll Facility in which the Agent, for the benefit of the Banks, has
a first priority perfected security interest, as determined by the Agent at the
Borrower's expense, provided that the value of Eligible Fixed Assets shall not
be adjusted downward based on any revaluation (other than the amortization of
the Eligible Fixed Asset Cap) prior to March 31, 2001, provided further that in
no event shall the amount of the Borrowing Base allocable to Eligible Fixed
Assets exceed the Eligible Fixed Asset Cap.
Eligible Inventory. Eligible Finished Goods Inventory, Eligible
Work-in-Process and Eligible Raw Materials.
Eligible Raw Materials. On any date, an amount equal to the Dollar
Equivalent of the gross book value, determined in accordance with the first-in,
first-out method of inventory accounting, as reflected on the Borrower's or a
Subsidiary Guarantor's books in accordance with generally accepted accounting
principles consistently applied, of raw materials used to produce the Borrower's
or one of the Subsidiary Guarantor's inventory, including any finished goods
inventory returned by a customer or no longer sold by the Borrower or the
Subsidiary Guarantors and (a) which has been converted into Eligible Raw
Materials, (b) which is (i) located on property owned by the Borrower or the
Subsidiary
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Guarantors, (ii) held by the Borrower or a Subsidiary Guarantor on properties
leased by the Borrower or the Subsidiary Guarantors as to which the Agent has
received a waiver from the lessor of such property in form and substance
satisfactory to the Agent, unless the relevant date of determination is on or
prior to thirty (30) days after the Effective Date, (iii) not in the possession
of the Borrower or the Subsidiary Guarantors and is not in transit and (X) the
Agent has received a waiver from the party in possession of such inventory in
form and substance satisfactory to the Agent, (Y) the Agent has reduced the
value of such inventory by reserves reasonably deemed adequate by the Agent, and
in any event in an amount equal to all obligations of the Borrower and its
Subsidiaries to the party in possession or (Z) the relevant date is on prior to
thirty (30) days after the Effective Date or (iv) is in transit from one
location in which the Agent had a perfected security interest in such inventory
to a second location where the Agent has taken all steps necessary to obtain a
perfected security interest in inventory at such location, and has been in
transit for a period of less than ten (10) days, (c) as to which the Borrower or
one of the Subsidiary Guarantors has acquired title and the Agent has a valid
and perfected first-priority security interest under all applicable law, and (d)
as to which the Borrower has furnished reasonably detailed information to the
Banks in a Borrowing Base Report, after taking into account all charges and
liens (other than those of the Agent and carrier, warehouse, customs and similar
statutory liens arising in the ordinary course of business) of all kinds against
such raw materials. Without limiting the generality of the foregoing, Eligible
Raw Materials shall not include any raw materials covered by a document of title
until the document of title has been delivered to the Agent or which the Agent
reasonably deems to be obsolete or not useable raw materials. Raw material
immediately loses the status of Eligible Raw Material if and when the Borrower
or one of the Subsidiary Guarantors sells it, otherwise passes title thereto,
consumes it, or materially changes it in the course of processing the same, or
the Agent releases or transfers its security interest therein. Notwithstanding
the foregoing, but without duplication, Eligible Raw Materials shall be reduced
by the amount of any specific reserve established by the Borrower with respect
to any Eligible Raw Materials other than the LIFO reserve maintained by the
Borrower in accordance with generally accepted accounting principles.
Eligible Work-in-Process. On any date, an amount equal to the Dollar
Equivalent of the gross book value, as reflected on the Borrower's or a
Subsidiary Guarantor's books in accordance with generally accepted accounting
principles consistently applied, of usable work-in-process of the Borrower and
the Subsidiary Guarantors and as to which the Borrower has furnished reasonably
detailed information to the Banks in a Borrowing Base Report in connection with
the manufacture of its products in the ordinary course of its business,
including any finished goods inventory returned by a customer or no longer sold
by the Borrower or the Subsidiary Guarantors and which has been converted into
Eligible Work-in-Process, which is (a) (i) located on property owned by the
Borrower or the Subsidiary Guarantors, (ii) held by the Borrower or a Subsidiary
Guarantor on properties leased by the Borrower or the Subsidiary Guarantors as
to which the Agent has received a waiver from the lessor of such property in
form and substance satisfactory to the Agent, unless the relevant date of
determination is on or prior to thirty (30) days after the Effective Date, (iii)
not in the possession of the Borrower or the Subsidiary Guarantors and is not in
transit and (X) the Agent has received a waiver from the party in possession of
such inventory in form and substance satisfactory to the Agent, (Y) the Agent
has reduced the value of such inventory by reserves reasonably deemed adequate
by the Agent, and in
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any event in an amount equal to all obligations of the Borrower and the
Subsidiary Guarantors to the party in possession or (Z) the relevant date of
determination is on or prior to thirty (30) days after the Effective Date or
(iv) is in transit from one location in which the Agent had a perfected security
interest in such inventory to a second location where the Agent has taken all
steps necessary to obtain a perfected security interest in such inventory at
such location, and has been in transit for a period of less than ten (10) days,
and (b) as to which the Borrower or one of the Subsidiary Guarantors has title
and the Agent has a valid and perfected first-priority security interest.
Without limiting the generality of the foregoing, Eligible Work-in-Process shall
not include work-in-process which the Agent reasonably deems to be obsolete or
not marketable. Work-in-process immediately loses the status of Eligible
Work-in-Process if and when the Borrower or one of the Subsidiary Guarantors
sells it, otherwise passes title thereto, consumes it, or the Agent releases or
transfers its security interest therein. Notwithstanding the foregoing, but
without duplication, Eligible Work-in-Process shall be reduced by the amount of
any specific reserves established by the Borrower with respect to any Eligible
Work-in-Process other than the LIFO reserve maintained by the Borrower in
accordance with generally accepted accounting principles.
Employee Benefit Plan. Any employee benefit plan within the meaning
of Section 3(3) of ERISA maintained or contributed to by the Borrower or any
ERISA Affiliate, other than a Guaranteed Pension Plan or a Multiemployer Plan.
Environmental Laws. See Section 7.18(a).
Equityholders Agreement. The Equityholders Agreement amended and restated
as of August, 1999 by and among the investors in RTII and the Parent, RTII, the
Parent and RES Holding Corporation, in the form delivered to the Agent on the
Effective Date.
Equity Documents. The Equityholders Agreement, the Master Restructuring
Agreement and the documents delivered pursuant thereto.
ERISA. The Employee Retirement Income Security Act of 1974, as amended and
in effect from time to time.
ERISA Affiliate. Any Person which is treated as a single employer with the
Borrower under Section 414 of the Code.
ERISA Reportable Event. A reportable event with respect to a Guaranteed
Pension Plan within the meaning of Section 4043 of ERISA and the regulations
promulgated thereunder.
Eurocurrency Reserve Rate. For any day with respect to a Eurodollar Rate
Loan, the maximum rate (expressed as a decimal) at which any lender subject
thereto would be required to maintain reserves under Regulation D of the Board
of Governors of the Federal Reserve System (or any successor or similar
regulations relating to such reserve requirements) against "Eurocurrency
Liabilities" (as that term is used in Regulation D), if such liabilities were
outstanding. The Eurocurrency Reserve Rate shall be adjusted automatically on
and as of the effective date of any change in the Eurocurrency Reserve Rate.
-15-
Eurodollar Business Day. Any day on which commercial banks are open for
international business (including dealings in Dollar deposits) in London or such
other eurodollar interbank market as may be selected by the Agent in its sole
discretion acting in good faith.
Eurodollar Lending Office. Initially, the office of each Bank designated
as such in Schedule 1 hereto; thereafter, such other office of such Bank, if
any, that shall be making or maintaining Eurodollar Rate Loans.
Eurodollar Rate. For any Interest Period with respect to a Eurodollar Rate
Loan, the rate of interest equal to (a) the arithmetic average of the rates per
annum for each Reference Bank (rounded upwards to the nearest 1/16 of one
percent) of the rate at which such Reference Bank's Eurodollar Lending Office is
offered Dollar deposits two (2) Eurodollar Business Days prior to the beginning
of such Interest Period in the interbank eurodollar market where the eurodollar
and foreign currency and exchange operations of such Eurodollar Lending Office
are customarily conducted, for delivery on the first day of such Interest Period
for the number of days comprised therein and in an amount comparable to the
amount of the Eurodollar Rate Loan of such Reference Bank to which such Interest
Period applies, divided by (b) a number equal to 1.00 minus the Eurocurrency
Reserve Rate, if applicable.
Eurodollar Rate Loans. Revolving Credit Loans bearing interest calculated
by reference to the Eurodollar Rate.
Event of Default. See Section 13.1.
Excess Availability. As of any date of determination, the result of (a)
the Availability as of such date, minus (b) the sum of (i) the outstanding
amount of the Revolving Credit Loans as of such date plus (ii) the Maximum
Drawing Amount plus (iii) all Unpaid Reimbursement Obligations.
Exchange Rate. With respect to any amount in Dollars the rate of exchange
as quoted by the Bank of Canada as the noon rate of Canadian Dollars for Dollars
on or about 12:00 p.m. (noon) Toronto time on the Business Day on which the
determination is required to be made.
Fee Letters. See Section 5.1.
Fixed Charge Coverage Ratio. At the end of any fiscal period of the
Borrower, the ratio of Consolidated Operating Cash Flow for such period to
Consolidated Total Debt Service for such period.
generally accepted accounting principles. (a) When used in Section 10,
whether directly or indirectly through reference to a capitalized term used
therein, means (i) principles that are consistent with the principles
promulgated or adopted by the Financial Accounting Standards Board and its
predecessors, in effect on the RES Balance Sheet Date, and (ii) to the extent
consistent with such principles, the accounting practice of RES reflected in its
financial statements for the year ended on the RES Balance Sheet Date, and (b)
when used in general, other than as provided above, means principles that are
(i) consistent with the
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principles promulgated or adopted by the Financial Accounting Standards Board
and its predecessors, as in effect from time to time, and (ii) consistently
applied with past financial statements of the Borrower adopting the same
principles, provided that in each case referred to in this definition of
"generally accepted accounting principles" a certified public accountant would,
insofar as the use of such accounting principles is pertinent, be in a position
to deliver an unqualified opinion (other than a qualification regarding changes
in generally accepted accounting principles) as to financial statements in which
such principles have been properly applied.
Government Assisted Indebtedness. Indebtedness of the Borrower or any of
its Subsidiaries incurred from any federal, state or local governmental
authority, agency or instrumentality, or for which any such authority, agency or
instrumentality provides direct or indirect credit support, including under any
industrial revenue bonds.
Guaranteed Pension Plan. Any employee pension benefit plan within the
meaning of Section 3(2) of ERISA maintained or contributed to by the Borrower or
any ERISA Affiliate the benefits of which are guaranteed on termination in full
or in part by the PBGC pursuant to Title IV of ERISA, other than a Multiemployer
Plan.
Guaranty. The Guaranty made by the Guarantors in favor of the Banks and
the Agent pursuant to Section 6.2 hereof, pursuant to which the Guarantors
guaranty to the Banks and the Agent the payment and performance of the
Obligations.
Guarantors. The Parent, RTI Capital, Bliss & Xxxxxxxx, LLC, a Delaware
limited liability company, Canadian Drawn Steel Company Inc. a Canadian
corporation and Nimishillen & Tuscarawas, LLC, a Delaware limited liability
company.
Hazardous Substances. See Section 7.18(b).
Indebtedness. As to any Person and whether recourse is secured by or is
otherwise available against all or only a portion of the assets of such Person
and whether or not contingent, but without duplication:
(i) every obligation of such Person for money borrowed,
(ii) every obligation of such Person evidenced by bonds, debentures, notes
or other similar instruments,
(iii) every reimbursement obligation of such Person with respect to
letters of credit, bankers' acceptances or similar facilities issued for the
account of such Person,
(iv) every obligation of such Person issued or assumed as the deferred
purchase price of property or services (including securities repurchase
agreements but excluding trade accounts payable existing on the Effective Date,
or trade accounts payable or accrued liabilities arising in the ordinary course
of business which are not overdue by more than 90 days or which are being
contested in good faith),
(v) every obligation of such Person under any Capitalized Lease,
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(vi) every obligation of such Person under any lease (a "synthetic lease")
treated as an operating lease under generally accepted accounting principles and
as a loan or financing for U.S. income tax purposes,
(vii) all sales by such Person of (A) accounts or general intangibles for
money due or to become due (other than general intangibles related to assets
disposed of in accordance with this Agreement and the other Loan Documents), (B)
chattel paper, instruments or documents creating or evidencing a right to
payment of money or (C) other receivables (collectively "receivables"), whether
pursuant to a purchase facility or otherwise, other than in connection with the
disposition of the business operations of such Person relating thereto or a
disposition of defaulted receivables for collection and not as a financing
arrangement, and together with any obligation of such Person to pay any
discount, interest, fees, indemnities, penalties, recourse, expenses or other
amounts in connection therewith,
(viii) every obligation of such Person under any forward contract, futures
contract, swap, option or other financing agreement or arrangement (including,
without limitation, caps, floors, collars and similar agreements), the value of
which is dependent upon interest rates, currency exchange rates, commodities or
other indices (a "derivative contract"),
(ix) every obligation in respect of Indebtedness of any other entity
(including any partnership in which such Person is a general partner) to the
extent that such Person is liable therefor as a result of such Person's
ownership interest in or other relationship with such entity, except to the
extent that the terms of such Indebtedness provide that such Person is not
liable therefor and such terms are enforceable under applicable law,
(x) every obligation, contingent or otherwise, of such Person
guaranteeing, or having the economic effect of guarantying or otherwise acting
as surety for, any obligation of a type described in any of clauses (i) through
(x) (the "primary obligation") of another Person (the "primary obligor"), in any
manner, whether directly or indirectly, and including, without limitation, any
obligation of such Person (A) to purchase or pay (or advance or supply funds for
the purchase of) any security for the payment of such primary obligation, (B) to
purchase property, securities or services for the purpose of assuring the
payment of such primary obligation, or (C) to maintain working capital, equity
capital or other financial statement condition or liquidity of the primary
obligor so as to enable the primary obligor to pay such primary obligation.
The "amount" or "principal amount" of any Indebtedness at any time of
determination represented by (u) any Indebtedness, issued at a price that is
less than the principal amount at maturity thereof, shall be the amount of the
liability in respect thereof determined in accordance with generally accepted
accounting principles, (v) any Capitalized Lease shall be the principal
component of the aggregate of the rentals obligation under such Capitalized
Lease payable over the term thereof that is not subject to termination by the
lessee, (w) any sale of receivables shall be the amount of unrecovered capital
or principal investment of the purchaser (other than the Borrower or any of its
wholly-owned Subsidiaries) thereof, excluding amounts representative of yield or
interest earned on such investment, (x) any synthetic lease shall be the
stipulated loss value, termination value or other equivalent amount, and (y) any
derivative contract shall be the
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maximum amount of any termination or loss payment required to be paid by such
Person if such derivative contract were, at the time of determination, to be
terminated by reason of any event of default or early termination event
thereunder, whether or not such event of default or early termination event has
in fact occurred.
Indenture. The Indenture, of even date herewith, among the Borrower, RTI
Capital and the Trustee, pursuant to which the Notes are issued, in the form
delivered to the Co-Agents on or prior to the Effective Date.
Ineligible Securities. Securities which may not be underwritten or dealt
in by member banks of the Federal Reserve System under Section 16 of the Banking
Act of 1933 (12 U.S.C.Section 24, Seventh), as amended.
Intercreditor Agreements. The Pledge Intercreditor Agreement and the Other
Asset Intercreditor Agreement.
Interest Payment Date. (a) As to any Base Rate Loan, the first day of the
calendar month with respect to interest accrued during the immediately preceding
calendar month, including, without limitation, the calendar month which includes
the Drawdown Date of such Base Rate Loan; (or if such day is not a Business Day,
then the next immediately following Business Day); and (b) as to any Eurodollar
Rate Loan in respect of which the Interest Period is (i) 3 months or less, the
last day of such Interest Period and (ii) more than 3 months, the date that is 3
months from the first day of such Interest Period and, in addition, the last day
of such Interest Period.
Interest Period. With respect to each Revolving Credit Loan, (a)
initially, the period commencing on the Drawdown Date of such Loan and ending
on, (i) for any Base Rate Loan, the last day of the calendar month; and (ii) for
any Eurodollar Rate Loan, the last day of the 1, 2, 3, or 6 month period as
selected by the Borrower in a Loan Request; and (b) thereafter, each period
commencing on the last day of the next preceding Interest Period applicable to
such Revolving Credit Loan and ending on the last day of the next calendar month
for any Base Rate Loan and the last day of one of the periods set forth above,
as selected by the Borrower in a Conversion Request, for any Eurodollar Rate
Loan; provided that all of the foregoing provisions relating to Interest Periods
are subject to the following:
(A) if any Interest Period with respect to a Eurodollar Rate Loan would
otherwise end on a day that is not a Eurodollar Business Day, that Interest
Period shall be extended to the next succeeding Eurodollar Business Day unless
the result of such extension would be to carry such Interest Period into another
calendar month, in which event such Interest Period shall end on the immediately
preceding Eurodollar Business Day;
(B) if any Interest Period with respect to a Base Rate Loan would end on a
day that is not a Business Day, that Interest Period shall end on the next
succeeding Business Day;
(C) if the Borrower shall fail to give notice as provided in Section 2.7,
the Borrower shall be deemed to have requested a conversion of the affected
Eurodollar Rate Loan to a
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Base Rate Loan and the continuance of all Base Rate Loans as Base Rate Loans on
the last day of the then current Interest Period with respect thereto;
(D) any Interest Period relating to any Eurodollar Rate Loan that begins
on the last Eurodollar 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 Eurodollar Business Day of a
calendar month; and
(E) any Interest Period relating to any Eurodollar Rate Loan that would
otherwise extend beyond the Revolving Credit Loan Maturity Date shall end on the
Revolving Credit Loan Maturity Date.
International Standby Practices. With respect to any standby Letter of
Credit, International Standby Practices (ISP98), International Chamber of
Commerce Publication No. 590, or any successor code of standby letter of credit
practices among banks adopted by the Agent in the ordinary course of its
business as a standby letter of credit issuer and in effect at the time of
issuance of such Letter of Credit.
Investments. All expenditures made and all liabilities incurred
(contingently or otherwise) for the acquisition of stock, other equity interests
or Indebtedness of, or for loans, advances, capital contributions or transfers
of property for a similar purpose to, or in respect of any guaranties of (or
other commitments as described under Indebtedness), or obligations of, any
Person. In determining the aggregate amount of Investments outstanding at any
particular time: (a) the amount of any Investment represented by a guaranty
shall be taken at not less than the principal amount of the obligations
guaranteed and still outstanding, except that if such guaranty is limited in
amount, the amount of such Investment shall be equal to the amount to which such
guaranty is limited; (b) there shall be deducted in respect of each such
Investment any amount received as a return of capital (but only by repurchase,
redemption, retirement, repayment, dividend or distribution); (c) there shall
not be deducted in respect of any Investment any amounts received as earnings on
such Investment, whether as dividends, interest or otherwise; and (d) there
shall not be deducted from the aggregate amount of Investments any decrease in
the value thereof.
Letter of Credit. See Section 4.1.1.
Letter of Credit Application. See Section 4.1.1.
Letter of Credit Fee. See Section 4.6.
Letter of Credit Participation. See Section 4.1.4.
Loan Documents. This Credit Agreement, the Revolving Credit Notes, the
Letter of Credit Applications, the Letters of Credit, the Intercreditor
Agreements and the Security Documents and the Rate Protection Agreements.
Loan Request. See Section 2.6.
Majority Banks. As of any date, the Banks holding at least fifty-one
percent (51%) of the outstanding principal amount of the Revolving Credit Notes
on such date; and if no
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such principal is outstanding, the Banks whose aggregate Commitments constitutes
more than fifty-one percent (51%) of the Total Commitment, provided, that
Majority Banks shall in any event include at least three (3) or more Banks which
are not Co-Agents.
Marked to Market Manufacturing and Conversion Costs of Sales. For each
month in any fiscal period, the product of (a) the cost per ton incurred for
manufacturing and converting products during such month, weighted by the
appropriate process routing based on shipments during such month, times (b) the
aggregate shipments (by ton) during such month.
Marked to Market Materials Cost of Sales. For each month in any fiscal
period, the product of (a) receipted materials costs per ton weighted by the
Borrower's and its Subsidiaries' actual product mix of shipments during such
month, times (b) the aggregate shipments (by ton) during such month.
Master Pledge Agreement. The Master Pledge Agreement, of even date
herewith, made by the Borrower, the Parent and the other "Pledgors" named
therein in favor of the United States Trust Company of New York as collateral
agent for the benefit of the Banks, the Agent, the Trustee and the other
"Secured Parties" named therein..
Master Restructuring Agreement. The Master Restructuring Agreement, dated
as of August, 1999 among Bar Technologies, Inc. ("BarTech"), Republic Engineered
Steels, Inc. ("RES"), USS/Kobe Steel Company ("USS/Kobe") and the other parties
thereto, pursuant to which such Persons combine their operating assets into the
Borrower and enter into certain transactions related thereto.
Material Adverse Effect. A material adverse effect on the consolidated
assets, business, condition (financial or otherwise) or operations of the
Borrower or on the Borrower's ability to perform its material Obligations under
the Loan Documents or the Banks' and the Agent's material rights under the Loan
Documents.
Maximum Drawing Amount. The maximum aggregate amount from time to time
that the beneficiaries are or may become entitled to draw under issued and
outstanding Letters of Credit, as such aggregate amount may be reduced from time
to time pursuant to the terms of the Letters of Credit.
Mortgaged Property. The real estate and fixtures related to the Canton
Cast-Roll Facility and subject to the Mortgage and any related properties,
rights and assets subject to the Mortgage.
Mortgage. The mortgage, dated or to be dated on or prior to the Effective
Date, from the Borrower to the Agent for the benefit of the Banks with respect
to the Mortgaged Property and in form and substance satisfactory to the Banks
and the Agent.
Multiemployer Plan. Any multiemployer plan within the meaning of Section
3(37) of ERISA maintained or contributed to by the Borrower or any ERISA
Affiliate.
Net Cash Proceeds. In connection with any sale or other disposition of
assets, any issuance of equity or any incurrence of Indebtedness after the
Effective Date, the cash
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proceeds received from such sale, disposition, issuance or incurrence, net of
all customary and reasonable costs of sale, underwriting or brokerage costs,
fees, commissions, costs, expenses, and taxes paid or payable as a result
thereof (including resulting income tax distributions of the type described in
Section 9.4(d)) by the Borrower or any of its Subsidiaries, including, without
limitation, attorneys' fees, survey costs, title insurance premiums, and related
search and recording charges, transfer taxes and deed or mortgage recording
taxes, and, in the case of any sale or other disposition of assets, after the
satisfaction of all Indebtedness and other obligations permitted hereby and
secured by such assets or required to by paid upon the sale of such assets.
New Banks. See Section 29.3.
Non-Affected Bank. See Section 5.11.
Note Documents. The Notes, the Indenture and all documents, instruments
and agreements executed in connection therewith, each in the form delivered to
the Co-Agents or on prior to the Effective Date.
Notes. The 13 3/4% Senior Secured Notes, of even date herewith, due 2009
issued by the Borrower and RTI Capital in the form delivered to the Co-Agents on
or prior to the Effective Date.
Obligations. All indebtedness, obligations and liabilities of any of the
Borrower and its Subsidiaries to any of the Banks and the Agent, individually or
collectively, existing on the date of this Credit Agreement or arising
thereafter, direct or indirect, joint or several, absolute or contingent,
matured or unmatured, liquidated or unliquidated, secured or unsecured, arising
by contract, operation of law or otherwise (including any indebtedness of
Borrower incurred in connection with cash management services provided by BKB),
arising or incurred under this Credit Agreement, any of the other Loan
Documents, or in respect of any of the Revolving Credit Loans made or
Reimbursement Obligations incurred, or any of the Revolving Credit Notes, Letter
of Credit Application, Letter of Credit, Rate Protection Agreements, or other
instruments at any time evidencing any thereof .
Operating Account. The Borrower's operating account (No. 00000000)
maintained with BKB.
outstanding. With respect to the Revolving Credit Loans, the aggregate
unpaid principal thereof as of any date of determination.
Other Asset Intercreditor Agreement. That Amended and Restated
Intercreditor and Subordination Agreement, dated as of August 13, 1999, by and
among United States Trust Company of New York, as collateral agent and as
trustee, the "Pennsylvania Lenders", as defined therein, the Agent, the Parent,
the Borrower, RTI Capital and the other parties thereto.
Parent. Republic Technologies International Holdings, LLC, a Delaware
limited liability company.
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Parent Guaranty. The Guaranty contained in Section 6.2 hereof by the
Parent in favor of the Banks and the Agent.
Patent Assignment. The Patent Collateral Assignment and Security
Agreement, made by the Borrower in favor of the Agent.
PBGC. The Pension Benefit Guaranty Corporation created by Section 4002 of
ERISA and any successor entity or entities having similar responsibilities.
Pennsylvania Indebtedness Indebtedness of the Borrower to the Pennsylvania
Lenders under the Pennsylvania Lenders Debt Instruments.
Pennsylvania Lenders. The "Pennsylvania Lenders" as defined in the Other
Asset Intercreditor Agreement
Pennsylvania Lenders Debt Instruments. The "Pennsylvania Lenders Debt
Instruments" as defined in the Other Asset Intercreditor Agreement.
Perfection Certificates. The Perfection Certificates as defined in the
Security Agreements.
Permitted Holders. (i) Blackstone Capital Partners II Merchant Banking
Fund L.P., a Delaware limited partnership, Blackstone Offshore Capital Partners
II L.P., a Cayman Islands exempted limited partnership, and Blackstone Family
Investment Partnership II L.P., a Delaware limited partnership, (ii) each
general partner of any of the foregoing who is a partner or employee of The
Blackstone Group L.P., (iii) USX Corporation, (iv) Kobe Steel, Ltd. and (v) any
Affiliate of the persons specified in clauses (i)-(iv) of this definition.
Permitted Liens. Liens, security interests and other encumbrances
permitted by Section 9.2.
Person. Any individual, corporation, partnership, limited liability
company, trust, unincorporated association, business, or other legal entity, and
any government or any governmental agency or political subdivision thereof.
Xxxxx Cash Accounts. Those accounts listed and described on Schedule 7.20
as xxxxx cash accounts.
Rate Protection Agreements. Any interest rate swap, cap, collar or similar
agreement or arrangement entered into, from time to time, by the Borrower or any
of its Subsidiaries which is a Guarantor and any of the Banks or any of their
respective Affiliates to protect the Borrower or such Subsidiary against
fluctuations in interests rates on Indebtedness of such Borrower or such
Subsidiary permitted hereunder and as to which the Bank (or Affiliates) which is
a party thereto has provided notice to the Agent of such Rate Protection
Agreement's existence, type, notional amount, tenor and cost to terminate.
Rate Protection Exposure. As of any date of determination, the net cost to
terminate all Rate Protection Agreements, marked to market no less frequently
than monthly, or more frequently if requested by the Agent.
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Real Estate. All real property at any time owned or leased (as lessee or
sublessee) by the Borrower or any of its Subsidiaries.
Record. The grid attached to a Revolving Credit Note, or the continuation
of such grid, or any other similar record, including computer records,
maintained by any Bank with respect to any Revolving Credit Loan referred to in
such Note.
Reference Bank. BKB.
Register. See Section 19.3.
Reimbursement Obligation. The Borrower's obligation to reimburse the Agent
and the Banks on account of any drawing under any Letter of Credit as provided
in Section 5.2.
Rental Obligations. All present or future obligations of the Borrower or
any of its Subsidiaries under any rental agreements or leases of real or
personal property, other than (a) obligations that can be terminated by the
giving of notice without liability to the Borrower or such Subsidiary in excess
of the liability for rent due within thirty (30) days of the date on which such
notice is given and under which no penalty or premium is paid as a result of any
such termination, and (b) obligations in respect of Capitalized Leases or any
synthetic leases referred to in clause (vi) of the definition of the term
"Indebtedness".
RES Balance Sheet Date. June 30, 1998.
Restricted Payment. As to the Borrower and its Subsidiaries, any (a)
Distribution, (b) any payment or prepayment by the Borrower or its Subsidiaries
to the Parent or to any Affiliate of the Borrower or the Parent (other than a
payment to a Subsidiary of the Borrower which is a Guarantor or the Borrower) or
(c) any payment in respect of any Indebtedness which is subordinated in right of
payment by its terms to the repayment of the applicable Obligations.
RES Holding. RES Holding Corporation, a Delaware corporation.
Restructuring. The combination of the operating assets and liabilities of
BarTech, RES, and the Acquired Portions of USS/Kobe and certain other Persons
into the Borrower pursuant to the Master Restructuring Agreement and any related
documents and agreements.
Restructuring Documents. The Master Restructuring Agreement and all
documents, instruments and agreements executed in connection therewith, each in
form and substance satisfactory to the Co-Agents.
Revolving Credit Loan Maturity Date. August 13, 2004.
Revolving Credit Loans. Revolving credit loans made or to be made by the
Banks to the Borrower pursuant to Section 2.
Revolving Credit Note Record. A Record with respect to a Revolving Credit
Note.
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Revolving Credit Notes. See Section 2.4.
Roll-up Transaction. Any merger or consolidation of the Borrower with, or
any transfer of all of the assets of, or membership interests of, the Borrower
to, any newly organized Affiliate thereof (having no material liabilities other
than investments in or liabilities with respect to the Borrower or its
Subsidiaries) or to RTII (provided it has no material liabilities, other than
investments in or liabilities with respect to the Borrower or its Subsidiaries)
if such transaction and any series off related transactions are for the sole
purpose of creating a corporation that will own all of the assets that the
Borrower owned immediately prior to such transactions.
RTI Capital. RTI Capital Corp., a Delaware corporation.
RTII. Republic Technologies International, Inc., a Delaware corporation.
Section 20 Subsidiary. A Subsidiary of the bank holding company
controlling any Bank, which Subsidiary has been granted authority by the Federal
Reserve Board to underwrite and deal in certain Ineligible Securities.
Security Agreements. The Domestic Security Agreement and the Canadian
Security Agreement.
Security Documents. The Security Agreements, the Master Pledge Agreement,
the Patent Assignment, the Trademark Assignment, the Mortgage and the Agency
Agreements.
Settlement. The making of, or receiving of payments, in immediately
available funds, by the Banks, to the extent necessary to cause each Bank's
actual share of the outstanding amount of Revolving Credit Loans (after giving
effect to any Loan Request and including any Revolving Credit Loans made
pursuant to Section 2.6.2) to be equal to each Bank's Commitment Percentage of
the outstanding amount of such Revolving Credit Loans (after giving effect to
any Loan Request and including any Revolving Credit Loans made pursuant to
Section 2.6.2), where, prior to such event or action, the actual share is not so
equal.
Settlement Amount. See Section 2.8.3.1.
Settling Bank. See Section 2.8.3.2.
Settling Date. A Settling Date shall occur upon any one or more of the
following: (a) the Drawdown Date of any Loan Request, (b) the last Business Day
of each calendar week, (c) any date on which the Borrower's Obligations to the
Agent in respect of Revolving Credit Loans made pursuant to Section 2.6.2
exceeds $15,000,000 and (d) more frequently, if the Agent so designates to the
Banks from time to time.
Specialty Steel Assets. Those assets associated exclusively with the
Specialty Steel business of Republic Engineered Steels, Inc., including the
equipment of Xx. 0 Xxxx Xxxx xxx Xx. 0 Xxxxxxxx Xxxxxxxxxx in the Canton, Ohio
0xx Xxxxxx Plant, the equipment and property of the Canton, Ohio Harrison Road
Specialty Plant and the equipment and property of the Baltimore, Maryland
specialty steels plant.
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Specified Non-Consenting Bank. A Bank that shall have refused to approve
or consent to a waiver, consent or amendment hereunder or under the Loan
Documents which waiver, consent or amendment is, pursuant to Section 26,
approved by the Majority Banks or such greater number of Banks as are required
to cause such waiver, consent or amendment to be effective.
Stock Intercreditor Agreement. That Pledge Intercreditor Agreement of even
date herewith among the Agent, the Trustee and the United States Trust Company
of New York as collateral agent regarding the stock, membership interests and
other equity interests pledged pursuant to the Master Pledge Agreement.
Subsidiary. Any corporation, association, trust, or other business entity
of which the designated parent shall at any time own directly or indirectly
through a Subsidiary or Subsidiaries at least a majority (by number of votes) of
the outstanding Voting Stock.
Subsidiary Guarantors. As of the Effective Date, RTI Capital, Bliss &
Xxxxxxxx, LLC, a Delaware limited liability company, Canadian Drawn Steel
Company Inc. a Canadian corporation and Nimishillen & Tuscarawas, LLC, a
Delaware limited liability company; as of any other date, such Subsidiaries and
any other Subsidiaries of the Borrower that are also Guarantors.
Super-Majority Banks. As of any date, the Banks holding at least
eighty-five percent (85%) of the outstanding principal amount of the Revolving
Credit Notes on such date (which must in any event include all of the
Co-Agents); and if no such principal is outstanding, each of the Co-Agents and
the Banks whose aggregate Commitments constitutes more than eighty-five percent
(85%) of the Total Commitment.
Survey. An instrument survey of the Mortgaged Property dated as of a date
subsequent to January 1, 1999, which shall show the location of all buildings,
structures, easements and utility lines on the Mortgaged Property, shall be
sufficient to remove the survey exception from the Title Policy, shall show that
all buildings and structures are within the lot lines of the Mortgaged Property,
shall not show any encroachments by others, shall show the zoning district or
districts in which the Mortgaged Property is located in a flood hazard district
as established by the Federal Emergency Management Agency or any successor
agency or is located in any flood plain, flood hazard or wetland protection
district established under federal, state or local law.
Surveyor Certificate. In relation to the Mortgaged Property, a certificate
executed by the surveyor who prepared the Survey dated as of a recent date and
containing such information relating to the Mortgaged Property as the Agent or
the Title Insurance Company may require, such certificate to be satisfactory to
the Agent in form and substance.
Sweep Deadline. The date forty-five (45) days after the Effective Date.
Swept Accounts. Those depository accounts from which, commencing on or
prior to the Sweep Deadline, all funds and cash proceeds shall be transferred to
the Agent pursuant to Sections 3.4, 8.13 and the Agency Agreements
applicable thereto and any future such accounts that may be established in
accordance with this Agreement.
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Swept Lockboxes. Those lockboxes from which, commencing on or prior to the
Sweep Deadline, all funds shall be transferred to the Swept Accounts pursuant to
Section 8.13.1 and the lockbox agreements pursuant thereto and any future such
lockboxes that may be established in accordance with this Agreement.
Syndication Agent. See preamble.
Title Insurance Company. Title Associates Inc.
Title Policy. In relation to the Mortgaged Property, an ALTA standard form
title insurance policy issued by the Title Insurance Company (with such
reinsurance or co-insurance as the Agent may require, any such reinsurance to be
with direct access endorsements) in such amount as may be determined by the
Agent insuring the priority of the Mortgage of the Mortgaged Property and that
the Borrower or one of its Subsidiaries holds marketable fee simple title to the
Mortgaged Property, subject only to the encumbrances permitted by the Mortgage
and which shall not contain exceptions for mechanics liens, persons in occupancy
or matters which would be shown by a survey (except as may be permitted by the
Mortgage), shall not insure over any matter except to the extent that any such
affirmative insurance is acceptable to the Agent in its sole discretion, and
shall contain such endorsements and affirmative insurance as the Agent in its
discretion may require, including but not limited to (i) comprehensive
endorsement, (ii) variable rate of interest endorsement, (iii) usury
endorsement, (iv) revolving credit endorsement, (vii) doing business
endorsement, (viii) last-dollar endorsement and (ix) ALTA form 3.1 zoning
endorsement.
Total Commitment. The sum of the Commitments of the Banks, as in effect
from time to time. The Total Commitment as of the Effective Date is
$425,000,000.
Trademark Assignment. The Trademark Collateral Assignment Agreement, of
even date herewith, made by the Borrower in favor of the Agent.
Trustee. The United States Trust Company of New York, as trustee under the
Indenture.
Type. As to any Revolving Credit Loan, its nature as a Base Rate Loan or a
Eurodollar Rate Loan.
Uniform Customs. With respect to any Letter of Credit, the Uniform Customs
and Practice for Documentary Credits (1993 Revision), International Chamber of
Commerce Publication No. 500 or any successor version thereto adopted by the
Agent in the ordinary course of its business as a letter of credit issuer and in
effect at the time of issuance of such Letter of Credit.
Unpaid Reimbursement Obligation. Any Reimbursement Obligation for which
the Borrower does not reimburse the Agent and the Banks on the date specified in
and in accordance with Section 4.2.
USS/Kobe. See definition of Master Restructuring Agreement.
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USS/Kobe Balance Sheet Date. March 31, 1999.
USX. USX Corporation, a Delaware corporation.
Veritas. The Veritas Capital Fund, L.P., a Delaware limited partnership,
KDJ L.L.C., a Delaware limited liability company, and HVR Holdings, L.L.C., a
Delaware limited liability company.
Voting Stock. Stock, membership interests or similar interests, of any
class or classes (however designated), the holders of which are at the time
entitled, as such holders, to vote under ordinary circumstances for the election
of a majority of the directors (or persons performing similar functions) of the
corporation, association, limited liability company, trust or other business
entity involved irrespective of whether any other stock, membership interests or
similar interests have the right to vote by reason of the happening of a
contingency.
Warrant Agreement. The Warrant Agreement of even date herewith among the
Warrant-Issuer and United States Trust Company of New York, as Warrant Agent.
Warrant-Issuer. Republic Technologies International, Inc., a Delaware
corporation.
Warrant Documents. The Warrant Agreement and all documents, instruments
and agreements executed in connection therewith, each in the form delivered to
the Co-Agents on or prior to the Effective Date.
Warrants. The Warrants to purchase Class D Common Stock of the
Warrant-Issuer issued to purchasers of the Notes on the Effective Date.
Section 1.2. Rules of Interpretation.
(a) A reference to any document or agreement shall include such document
or agreement as amended, modified or supplemented from time to time in
accordance with its terms and the terms of this Credit Agreement.
(b) The singular includes the plural and the plural includes the singular.
(c) A reference to any law includes any amendment or modification to such
law.
(d) A reference to any Person includes its permitted successors and
permitted assigns.
(e) Accounting terms not otherwise defined herein have the meanings
assigned to them by generally accepted accounting principles applied on a
consistent basis by the accounting entity to which they refer.
(f) The words "include", "includes" and "including" are not limiting.
(g) All terms not specifically defined herein or by generally accepted
accounting principles, which terms are defined in the Uniform Commercial Code as
in
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effect in the Commonwealth of Massachusetts, have the meanings assigned to them
therein, with the term "instrument" being that defined under Article 9 of the
Uniform Commercial Code.
(h) Reference to a particular "Section" refers to that section of this
Credit Agreement unless otherwise indicated.
(i) The words "herein", "hereof", "hereunder" and words of like import
shall refer to this Credit Agreement as a whole and not to any particular
section or subdivision of this Credit Agreement.
(j) Unless otherwise expressly indicated, in the computation of periods of
time from a specified date to a later specified date, the word "from" means
"from and including," the words "to" and "until" each mean "to but excluding,"
and the word "through" means "to and including."
(k) This Credit Agreement and the other Loan Documents may use several
different limitations, tests or measurements to regulate the same or similar
matters. All such limitations, tests and measurements are, however, cumulative
and are to be performed in accordance with the terms thereof.
(l) This Credit Agreement and the other Loan Documents are the result of
negotiation among, and have been reviewed by counsel to, among others, the Agent
and the Borrower and are the product of discussions and negotiations among all
parties. Accordingly, this Credit Agreement and the other Loan Documents are not
intended to be construed against the Agent or any of the Banks merely on account
of the Agent's or any Bank's involvement in the preparation of such documents.
Section 2. THE REVOLVING CREDIT FACILITY.
Section 2.1. Commitment to Lend. Subject to the terms and conditions set
forth in this Credit Agreement, each of the Banks severally (and not jointly)
agrees to lend to the Borrower and the Borrower may borrow, repay, and reborrow
from time to time between the Effective Date and the Revolving Credit Loan
Maturity Date upon notice by the Borrower to the Agent given in accordance with
Section 2.6, such sums as are requested by the Borrower up to a maximum
aggregate amount outstanding (after giving effect to all amounts requested) at
any one time equal to such Bank's Commitment minus such Bank's Commitment
Percentage of the sum of the Maximum Drawing Amount and all Unpaid Reimbursement
Obligations, provided that the sum of the outstanding amount of the Revolving
Credit Loans (after giving effect to all amounts requested) plus the Maximum
Drawing Amount and all Unpaid Reimbursement Obligations shall not at any time
exceed the Availability. The Revolving Credit Loans shall be made pro rata in
accordance with each Bank's Commitment Percentage. Each request for a Revolving
Credit Loan hereunder shall constitute a representation and warranty by the
Borrower that the conditions set forth in Section 11 and Section 12, in the case
of the initial Revolving Credit Loans, and Section 12, in the case of all other
Revolving Credit Loans, have been satisfied on the date of such request.
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Section 2.2. Commitment Fee. The Borrower agrees to pay to the Agent for
the accounts of the Banks in accordance with their respective Commitment
Percentages a commitment fee calculated at the rate of one half of one percent
(1/2%) per annum on the average daily amount during each calendar month or
portion thereof from the Effective Date to the Revolving Credit Loan Maturity
Date, by which the Total Commitment minus the Maximum Drawing Amount and all
Unpaid Reimbursement Obligations exceeds the outstanding amount of Revolving
Credit Loans (excluding the Swing Line Loans) during such period or calendar
month. The commitment fee shall be payable monthly in arrears on the first
Business Day of each calendar month for the immediately preceding calendar month
commencing on the first such date following the date hereof, with a final
payment on the Revolving Credit Maturity Date or any earlier date on which the
Commitments shall terminate.
Section 2.3. Reduction of Total Commitment. The Borrower shall have the
right at any time with respect to any unused portion of the Total Commitment and
at the end of the applicable Interest Period with respect to Eurodollar Rate
Loans, and from time to time upon three (3) Business Days' prior written notice
to the Agent to reduce by $10,000,000 or an integral multiple thereof the Total
Commitment or terminate entirely the Total Commitment, whereupon the Commitments
of the Banks shall be reduced pro rata in accordance with their respective
Commitment Percentages of the amount specified in such notice or, as the case
may be, terminated. Promptly after receiving any notice of the Borrower
delivered pursuant to this Section 2.3, the Agent will notify the Banks of the
substance thereof. Upon the effective date of any such reduction or termination,
the Borrower shall pay to the Agent for the respective accounts of the Banks the
full amount of any commitment fee then accrued on the amount of the reduction.
No reduction or termination of the Commitments may be reinstated.
Section 2.4. The Revolving Credit Notes. The Revolving Credit Loans shall
be evidenced by separate promissory notes of the Borrower in substantially the
form of Exhibit B hereto, as applicable (each a "Revolving Credit Note"), dated
as of the Effective Date (or other such date on which a Bank may become a party
hereto in accordance with Section 19 hereof) and completed with appropriate
insertions. One Revolving Credit Note shall be payable to the order of each Bank
in a principal amount equal to such Bank's Commitment or, if less, the
outstanding amount of all Revolving Credit Loans made by such Bank, plus
interest accrued thereon, as set forth below. The Borrower irrevocably
authorizes each Bank to make or cause to be made, at or about the time of the
Drawdown Date of any Revolving Credit Loan or at the time of receipt of any
payment of principal on such Bank's Revolving Credit Note, an appropriate
notation on such Bank's Revolving Credit Note Record reflecting the making of
such Revolving Credit Loan or (as the case may be) the receipt of such payment.
The outstanding amount of the Revolving Credit Loans set forth on such Bank's
Revolving Credit Note Record shall be prima facie evidence of the principal
amount thereof owing and unpaid to such Bank, but the failure to record, or any
error in so recording, any such amount on such Bank's Revolving Credit Note
Record shall not limit or otherwise affect the obligations of the Borrower
hereunder or under any Revolving Credit Note, including, without limitation, its
obligations to make payments of principal of or interest on any Revolving Credit
Note when due.
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Section 2.5. Interest on Revolving Credit Loans. Except as otherwise
provided in Section 5.10,
(a) Each Base Rate Loan shall bear interest at the rate per annum equal to
the Base Rate plus the Applicable Margin.
(b) Each Eurodollar Rate Loan shall bear interest for the period
commencing with the Drawdown Date thereof and ending on the last day of the
Interest Period with respect thereto at the rate per annum equal to the
Eurodollar Rate determined for such Interest Period plus the Applicable Margin.
(c) The Borrower promises to pay interest on each Revolving Credit Loan in
arrears on each Interest Payment Date with respect thereto.
Section 2.6. Requests for Revolving Credit Loans.
2.6.1. General. The Borrower shall give to the Agent written notice
in the form of Exhibit C hereto (or telephonic notice confirmed in a
writing in the form of Exhibit C hereto) of each Revolving Credit Loan
requested hereunder (a "Loan Request") no later than 11:00 a.m. (Boston
time) on the proposed Drawdown Date of any Base Rate Loan and (b) three
(3) Eurodollar Business Days prior to the proposed Drawdown Date of any
Eurodollar Rate Loan. Each such notice shall specify (i) the principal
amount of the Revolving Credit Loan requested, (ii) the proposed Drawdown
Date of such Revolving Credit Loan, (iii) the Type of such Revolving
Credit Loan and (iv) the Interest Period for such Revolving Credit Loan if
a Eurodollar Rate Loan. Promptly upon receipt of any such notice, the
Agent shall notify each of the Banks thereof. Each Loan Request shall be
irrevocable and binding on the Borrower and shall obligate the Borrower to
accept the Revolving Credit Loan requested from the Banks on the proposed
Drawdown Date. Each Loan Request for Eurodollar Loans shall be in a
minimum aggregate amount of $5,000,000 or an integral multiple of
$1,000,000 in excess thereof and no more than five (5) Eurodollar Rate
Loans Interest Periods may run concurrently at any time during the term of
this Credit Agreement.
2.6.2. Swing Line. Notwithstanding the notice and minimum amount
requirements set forth in Section 2.6.1 but otherwise in accordance with
the terms and conditions of this Credit Agreement, the Agent may, in its
sole discretion and without conferring with the Banks, make Revolving
Credit Loans to the Borrower up to a maximum aggregate amount outstanding
(after giving effect to all amounts borrowed under this Section 2.6.2) at
any one time equal to $30,000,000 (i) by entry of credits to the
Borrower's Operating Account with the Agent to cover checks or other
charges which the Borrower has drawn or made against such account or (ii)
in an amount as otherwise requested by the Borrower. The Borrower hereby
requests and authorizes the Agent to make from time to time such Revolving
Credit Loans by means of appropriate entries of such credits sufficient to
cover checks and other charges then presented for payment from the
Operating Account or as otherwise so requested. The Borrower acknowledges
and agrees that the making of such Revolving Credit Loans shall, in each
case, be subject in all respects to the provisions of this Credit
Agreement as if they were Revolving Credit Loans covered
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by a Loan Request including, without limitation, the limitations set forth
in Section 2.1 and the requirements that the applicable provisions of
Section 11 (in the case of Revolving Credit Loans made on the Effective
Date) and Section 12 be satisfied. All actions taken by the Agent pursuant
to the provisions of this Section 2.6.2 shall be conclusive and binding on
the Borrower and the Banks absent the Agent's gross negligence or willful
misconduct. Revolving Credit Loans made pursuant to this Section 2.6.2
shall be Base Rate Loans until converted in accordance with the provisions
of this Agreement and, prior to a Settlement, such interest shall be for
the account of the Agent. The Banks shall pay the Agent their pro rata
share of Revolving Credit Loans made pursuant to this Section 2.6.2
pursuant to the Settlement provisions of Section 2.8.3.
Section 2.7. Conversion Options.
2.7.1. Conversion to Different Type of Revolving Credit Loan. The
Borrower may elect from time to time to convert any outstanding Revolving
Credit Loan to a Revolving Credit Loan of another Type, provided that (a)
with respect to any such conversion of a Revolving Credit Loan to a Base
Rate Loan, the Borrower shall give the Agent at least one (1) Business
Day's prior written notice of such election; (b) with respect to any such
conversion of a Revolving Credit Loan to a Eurodollar Rate Loan, the
Borrower shall give the Agent at least three (3) Eurodollar Business Days'
prior written notice of such election; (c) with respect to any such
conversion of a Eurodollar Rate Loan into a Revolving Credit Loan of
another Type, such conversion shall only be made on the last day of the
Interest Period with respect thereto and (d) no Revolving Credit Loan may
be converted into a Eurodollar Rate Loan when any Default or Event of
Default has occurred and is continuing. On the date on which such
conversion is being made each Bank shall take such action as is necessary
to transfer its Commitment Percentage of such Revolving Credit Loans to
its Domestic Lending Office or its Eurodollar Lending Office, as the case
may be. All or any part of outstanding Revolving Credit Loans of any Type
may be converted into a Revolving Credit Loan of another Type as provided
herein, provided that any partial conversion shall be in an aggregate
principal amount of $5,000,000 or an integral multiple of $1,000,000 in
excess thereof. Each Conversion Request relating to the conversion of a
Revolving Credit Loan to a Eurodollar Rate Loan shall be irrevocable by
the Borrower.
2.7.2. Continuation of Type of Revolving Credit Loan. Any Revolving
Credit Loan of any Type may be continued as a Revolving Credit Loan of the
same Type upon the expiration of an Interest Period with respect thereto
by compliance by the Borrower with the notice provisions contained in
Section 2.7.1; provided that no Eurodollar Rate Loan may be continued as
such when any Default or Event of Default has occurred and is continuing
and the Agent has given the Borrower notice that the option to borrow or
continue Eurodollar Rate Loans has been suspended or terminated, but shall
be automatically converted to a Base Rate Loan on the last day of the
first Interest Period relating thereto ending during the continuance of
any Default or Event of Default and following such notice. In the event
the Borrower fails to provide any such notice with respect to the
continuation of any Eurodollar Rate Loan as such, then such Eurodollar
Rate Loan shall be automatically converted to a Base Rate Loan on the last
day of the Interest Period
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relating thereto. The Agent shall notify the Banks promptly when any such
automatic conversion contemplated by this Section 2.7 is scheduled to
occur.
2.7.3. Eurodollar Rate Loans. Any conversion to or from Eurodollar
Rate Loans shall be in such amounts and be made pursuant to such elections
so that, after giving effect thereto, the aggregate principal amount of
all Eurodollar Rate Loans having the same Interest Period shall not be
less than $5,000,000 or an integral multiple of $1,000,000 in excess
thereof.
Section 2.8. Funds for Revolving Credit Loan.
2.8.1. Funding Procedures. Not later than 12:00 Noon (Boston time)
on the proposed Drawdown Date (other than the date on which any Revolving
Credit Loan is converted or continued in accordance with Section 2.7) of
any Revolving Credit Loans, each of the Banks will make available to the
Agent, at its Head Office, in immediately available funds, the amount of
such Bank's Commitment Percentage of the amount of the requested Revolving
Credit Loans. Upon receipt from each Bank of such amount, and upon receipt
of the documents required by Sections 11 and 12 on the Effective
Date and thereafter required by Section 12 and the satisfaction of the
other conditions set forth therein, to the extent applicable, the Agent
will make available to the Borrower the aggregate amount of such Revolving
Credit Loans made available to the Agent by the Banks. The failure or
refusal of any Bank to make available to the Agent at the aforesaid time
and place on any such Drawdown Date the amount of its Commitment
Percentage of the requested Revolving Credit Loans shall not relieve any
other Bank from its several obligation hereunder to make available to the
Agent the amount of such Bank's Commitment Percentage of any requested
Revolving Credit Loans.
2.8.2. Advances by Agent. The Agent may, unless notified to the
contrary by any Bank prior to a Drawdown Date (other than the date on
which any Revolving Credit Loan is converted or continued in accordance
with Section 2.7), assume that such Bank has made available to the Agent
on such Drawdown Date the amount of such Bank's Commitment Percentage of
the Revolving Credit Loans to be made on such Drawdown Date, and the Agent
may (but it shall not be required to), in reliance upon such assumption,
make available to the Borrower a corresponding amount. If any Bank makes
available to the Agent such amount on a date after such Drawdown Date,
such Bank shall pay to the Agent on demand an amount equal to the product
of (a) the average computed for the period referred to in clause (c)
below, of the weighted average interest rate paid by the Agent for federal
funds acquired by the Agent during each day included in such period, times
(b) the amount of such Bank's Commitment Percentage of such Revolving
Credit Loans, times (c) a fraction, the numerator of which is the number
of days that elapse from and including such Drawdown Date to the date on
which the amount of such Bank's Commitment Percentage of such Revolving
Credit Loans shall become immediately available to the Agent, and the
denominator of which is 365. A statement of the Agent submitted to such
Bank with respect to any amounts owing under this paragraph shall be prima
facie evidence of the amount due and owing to the Agent by such Bank. If
the amount of such Bank's Commitment Percentage of such
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Revolving Credit Loans is not made available to the Agent by such Bank
within three (3) Business Days following such Settling Date, the Agent
shall be entitled to recover such amount from the Borrower on demand, with
interest thereon at the rate per annum applicable to the Revolving Credit
Loans made most recently preceding such Drawdown Date.
2.8.3. Settlements.
2.8.3.1. General. On each Settling Date, the Agent shall, not
later than 11:00 a.m. (Boston time), give telephonic or facsimile
notice (i) to the Banks and the Borrower of the respective
outstanding amount of Revolving Credit Loans made by the Agent on
behalf of the Banks from the immediately preceding Settling Date
through the close of business on the prior day and the amount of any
Eurodollar Rate Loans to be made (following the giving of notice
pursuant to Section 2.6.1(b)) on such date pursuant to a Loan
Request and (ii) to the Banks of the amount (a "Settlement Amount")
that each Bank (a "Settling Bank") shall pay to effect a Settlement
of any Revolving Credit Loan. A statement of the Agent submitted to
the Banks and the Borrower or to the Banks with respect to any
amounts owing under this Section 2.8.3 shall be prima facie evidence
of the amount due and owing. Each Settling Bank shall, not later
than 3:00 p.m. (Boston time) on such Settling Date, effect a wire
transfer of immediately available funds to the Agent in the amount
of the Settlement Amount for such Settling Bank. All funds advanced
by any Bank as a Settling Bank pursuant to this Section 2.8.3 shall
for all purposes be treated as a Revolving Credit Loan made by such
Settling Bank to the Borrower and all funds received by any Bank
pursuant to this Section 2.8.3 shall for all purposes be treated as
repayment of amounts owed with respect to Revolving Credit Loans
made by such Bank. In the event that any bankruptcy, reorganization,
liquidation, receivership or similar cases or proceedings in which
the Borrower is a debtor prevent a Settling Bank from making any
Revolving Credit Loan to effect a Settlement as contemplated hereby,
such Settling Bank will make such dispositions and arrangements with
the other Banks with respect to such Revolving Credit Loans, either
by way of purchase of participations, distribution, pro tanto
assignment of claims, subrogation or otherwise as shall result in
each Bank's share of the outstanding Revolving Credit Loans being
equal, as nearly as may be, to such Bank's Commitment Percentage of
the outstanding amount of the Revolving Credit Loans.
2.8.3.2. Failure to Make Funds Available. The Agent may,
unless notified to the contrary by any Settling Bank prior to a
Settling Date, assume that such Settling Bank has made or will make
available to the Agent on such Settling Date the amount of such
Settling Bank's Settlement Amount, and the Agent may (but it shall
not be required to), in reliance upon such assumption, make
available to the Borrower a corresponding amount. If any Settling
Bank makes available to the Agent such amount on a date after such
Settling Date, such Settling Bank shall pay to the Agent on demand
an amount equal to the product of (i) the average computed for the
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period referred to in clause (iii) below, of the weighted average
interest rate paid by the Agent for federal funds acquired by the
Agent during each day included in such period, times (ii) the amount
of such Settlement Amount, times (iii) a fraction, the numerator of
which is the number of days that elapse from and including such
Settling Date to the date on which the amount of such Settlement
Amount shall become immediately available to the Agent, and the
denominator of which is 360. A statement of the Agent submitted to
such Settling Bank with respect to any amounts owing under this
Section 2.8.3.2 shall be prima facie evidence of the amount due and
owing to the Agent by such Settling Bank. If such Settling Bank's
Settlement Amount is not made available to the Agent by such
Settling Bank within three (3) Business Days following such Settling
Date, the Agent shall be entitled to recover such amount from the
Borrower on demand, with interest thereon at the rate per annum
applicable to the Revolving Credit Loans as of such Settling Date.
2.8.3.3. No Effect on Other Banks. The failure or refusal of
any Settling Bank to make available to the Agent at the aforesaid
time and place on any Settling Date the amount of such Settling
Bank's Settlement Amount shall not (i) relieve any other Settling
Bank from its several obligations hereunder to make available to the
Agent the amount of such other Settling Bank's Settlement Amount or
(ii) impose upon any Bank, other than the Settling Bank so failing
or refusing, any liability with respect to such failure or refusal
or otherwise increase the Commitment of such other Bank.
Section 2.9. Change in Borrowing Base. The Borrowing Base shall be
determined weekly (or at such other interval as may be specified pursuant
to Section 8.4(i)) by the Agent by reference to the Borrowing Base Report.
Section 2.10. Canadian Subfacility. Upon the reasonable request of the
Borrower, the Banks and the Agent shall negotiate in good faith to amend this
Agreement to permit Canadian Drawn Steel Company Inc. to borrow Dollars or
Canadian Dollars, the amount of such loans to be subject to such caps, terms and
conditions as shall be satisfactory to the Banks and the Agent, provided,
however, that the Banks and the Agent shall be under no obligation to increase
the Total Commitment to permit such borrowings by Canadian Drawn Steel Company
Inc.
Section 3. REPAYMENT OF THE REVOLVING CREDIT LOANS.
Section 3.1. Maturity. The Borrower promises to pay on the Revolving
Credit Loan Maturity Date, and there shall become absolutely due and payable on
the Revolving Credit Loan Maturity Date, all of the Revolving Credit Loans
outstanding on such date, together with any and all accrued and unpaid interest
thereon.
Section 3.2. Mandatory Repayments of Revolving Credit Loans.
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(a) If at any time the sum of the outstanding amount of the
Revolving Credit Loans, the Maximum Drawing Amount and all Unpaid
Reimbursement Obligations exceeds the Availability, then the Borrower
shall immediately pay the amount of such excess to the Agent for the
respective accounts of the Banks. Any amounts paid to the Agent for the
respective accounts of the Banks under this Section 3.2(a) shall be
applied, first, to any Unpaid Reimbursement Obligations; second, in the
absence of instruction by the Borrower, to the principal of Base Rate
Loans and then to the principal of Eurodollar Rate Loans; and third, to
provide to the Agent cash collateral for Reimbursement Obligations as
contemplated by Section 4.2(b) and (c). Each payment of any Unpaid
Reimbursement Obligations or prepayment of Revolving Credit Loans shall be
allocated among the Banks, in proportion, as nearly as practicable, to
each Unpaid Reimbursement Obligation or (as the case may be) the
respective unpaid principal amount of each Bank's Revolving Credit Note,
with adjustments to the extent practicable to equalize any prior payments
or repayments not exactly in proportion.
(b) The Borrower hereby agrees that:
(i) if the Borrower or any of its Subsidiaries shall sell the
Canton Cast-Roll Facility or any substantial portion thereof (other
than de minimus sales of obsolete equipment in the ordinary course
of business), (A) the Eligible Fixed Asset Cap shall be reduced
immediately to $0, and (B) the Borrower shall immediately apply an
amount equal to the Net Cash Proceeds of such sale of the Canton
Cast Roll Facility to the Unpaid Reimbursement Obligations,
Revolving Credit Loans and Reimbursement Obligations in the order
provided for in Section 3.2(a);
(ii) if the Borrower or any of its Subsidiaries shall sell or
issue any shares of its stock, options or warrants for the purchase
of its stock or any other equity interests in a public offering of
its stock or the stock of any company resulting from the Roll-up
Transaction, the Net Cash Proceeds of such sale shall be applied and
the following adjustments shall occur as follows: (I) first, up to
50% of such Net Cash Proceeds may be used to redeem the Notes
pursuant to Section 5 of the Notes and the Indenture, (II) second,
the Eligible Fixed Asset Cap shall be reduced by an amount equal to
that portion of such Net Cash Proceeds that is not used to redeem
the Notes (the "Unused Portion"), or, if the Unused Portion exceeds
the Eligible Fixed Asset Cap, the Eligible Fixed Asset Cap shall be
reduced to $0, (III) third, an amount equal to the amount by which
the Eligible Fixed Asset Cap was reduced pursuant to the preceding
clause shall be applied to the Unpaid Reimbursement Obligations,
Revolving Credit Loans and Reimbursement Obligations in the order
provided for in Section 3.2(a), (IV) fourth, to the extent that the
Unused Portion exceeds the amount by which the Eligible Fixed Asset
Cap was reduced pursuant to clause (III) above, such excess may be
used to redeem the Notes pursuant to Section 5 of the Notes and the
Indenture; and (V) fifth, to the extent that any portion of the Net
Cash Proceeds remain, such portion shall be applied to the Unpaid
Reimbursement Obligations,
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Revolving Credit Loans and Reimbursement Obligations in the order
provided for in Section 3.2(a).
(iii) if the Borrower or any of its Subsidiaries shall receive
insurance proceeds related to the Canton Cast-Roll Facility or
receive awards for takings or condemnation of any of the Collateral
and, (A), if the Borrower notifies the Agent on or before the
receipt of such awards or proceeds of its intention to reinvest the
Net Cash Proceeds of such awards or proceeds, such Net Cash Proceeds
shall be immediately delivered to the Agent to be held as cash
collateral for the Obligations until the earlier to occur of (x) the
disbursement of such Net Cash Proceeds by the Agent, upon terms and
conditions as the Agent may reasonably prescribe, for direct
application by the Borrower to the repair or replacement of such
Collateral and (y) the termination of the 180 day period following
receipt of such proceeds, upon which date the Borrower shall repay
the Revolving Credit Loans in an aggregate amount equal to the
remaining unreinvested amount of Net Cash Proceeds of such proceeds
or awards or, in the case of proceeds or awards related to the
Canton Cast-Roll Facility and not applied to repair or replace the
same as provided in clause (x) above, to repay the Revolving Credit
Loans in an amount equal to such Net Cash Proceeds and reduce the
Eligible Fixed Asset Cap in at least an amount equal to the
reduction in appraised value of the Canton Cast-Roll Facility if the
Canton Cast-Roll Facility remains operational or the entire amount
of the Eligible Fixed Asset Cap if the Canton Cast-Roll Facility is
no longer operational and, (B) if the Borrower does not notify the
Agent on or before the receipt of such awards or proceeds of its
intention to reinvest the Net Cash Proceeds of such awards or
proceeds the Borrower repay the Revolving Credit Loans in an
aggregate amount equal to the Net Cash Proceeds of such proceeds or
awards immediately upon the receipt of such Net Cash Proceeds and in
the case of the Canton Cast-Roll Facility, if the Canton Cast-Roll
Facility is no longer operational the Eligible Fixed Asset Cap shall
be immediately reduced to $0;
(iv) if the Borrower or any of its Subsidiaries shall incur
Canton Indebtedness, the Revolving Credit Loans shall be repaid in
an aggregate amount equal to the Net Cash Proceeds thereof and the
Eligible Fixed Asset Cap shall be permanently reduced immediately to
$0.
To the extent that any reduction in the Total Commitment shall
result in the sum of the outstanding amount of the Revolving Credit Loans,
the Maximum Drawing Amount and all Unpaid Reimbursement Obligations to be
greater than the Availability, the Borrower shall repay such excess in
accordance with Section 3.2(a) hereof.
Section 3.3. Optional Repayments of Revolving Credit Loans. The Borrower
shall have the right, at its election, to repay the outstanding amount of the
Revolving Credit Loans, as a whole or in part, at any time without penalty or
premium, provided that any full or partial prepayment of the outstanding amount
of any Eurodollar Rate Loans pursuant to this Section 3.3 may be made only on
the last day of the Interest Period relating
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thereto. The Borrower shall give the Agent, no later than 11:00 a.m., Boston
time, on the day of the proposed repayment prior written notice of any proposed
prepayment pursuant to this Section 3.3 of Base Rate Loans, and three (3)
Eurodollar Business Days' notice of any proposed prepayment pursuant to this
Section 3.3 of Eurodollar Rate Loans, in each case specifying the proposed date
of prepayment of Revolving Credit Loans and the principal amount to be prepaid.
Each such partial prepayment of the Revolving Credit Loans shall be in an
integral multiple of $1,000,000 and shall be applied, in the absence of
instruction by the Borrower, first to the principal of Base Rate Loans and then
to the principal of Eurodollar Rate Loans. Each partial prepayment shall be
allocated among the Banks, in proportion, as nearly as practicable, to the
respective unpaid principal amount of each Bank's Revolving Credit Note, with
adjustments to the extent practicable to equalize any prior repayments not
exactly in proportion.
Section 3.4. Automatic Repayments of Revolving Credit Loans Prior to Event
of Default.
3.4.1. Credit for Funds Transferred from Swept Accounts. Prior to
the occurrence of an Event of Default as to which the account officers of
the Agent active upon the Borrower's account have actual knowledge, (i)
all funds and cash proceeds in the form of a wire transfer transferred to
the Agent from the Swept Accounts as contemplated by Section 8.13.2(c)
shall be credited on the same Business Day as the Agent's receipt of such
amounts (or up to such later date as the Agent determines that good
collected funds have been received), and applied as contemplated by
Section 3.4.2, and (ii) all funds and cash proceeds in the form of an
automated clearing house transfer transferred to the Agent from the Swept
Accounts as contemplated by Section 8.13.2(c) shall be credited, on the
next Business Day following the Agent's receipt of such amounts (or up to
such later date as the Agent determines that good collected funds have
been received), and applied as contemplated by Section 3.4.2. For purposes
of the foregoing provisions of this Section 3.4, the Agent shall not be
deemed to have received any such funds or cash proceeds on any day unless
received by the Agent before 3:00 p.m. (Boston time) on such day. The
Borrower further acknowledges and agrees that any such provisional credits
or credits in respect of wire or automatic clearing house funds transfers
shall be subject to reversal if final collection in good funds of the
related item is not received by, or final settlement of the funds transfer
is not made in favor of, the Agent in accordance with the Agent's
customary procedures and practices for collecting provisional items or
receiving settlement of funds transfers.
3.4.2. Application of Automatic Payments Prior to Event of Default.
(a) Prior to the occurrence of an Event of Default of which
the account officers of the Agent active on the Borrower's account
have knowledge, all funds transferred to the Agent for application
against the Obligations and for which the Borrower has received
credits shall be applied to the Obligations as follows:
(i) first, to pay amounts then due and payable under
this Credit Agreement, the Revolving Credit Notes and the
other Loan Documents;
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(ii) second, to reduce Revolving Credit Loans made by
the Agent pursuant to Section 2.6.2 and for which Settlement
has not then been made;
(iii) third, to reduce Revolving Credit Loans made by
the Agent pursuant to Section 2.8.2 and for which Settlement
has not then been made;
(iv) fourth, to reduce other Revolving Credit Loans
which are Base Rate Loans;
(v) fifth, to reduce Revolving Credit Loans which are
Eurodollar Rate Loans; and
(vi) sixth, except as otherwise required by Section
4.2(b) and (c), to the Concentration Account.
(b) All prepayments of Eurodollar Rate Loans prior to the end
of an Interest Period shall obligate the Borrower to pay any
breakage costs associated with such Eurodollar Rate Loans in
accordance with Section 5.9.
(c) All repayments of the Revolving Credit Loans pursuant to
this Section 3.4.2 shall be allocated among the Banks making such
Revolving Credit Loans, in proportion, as nearly as practicable, to
the respective unpaid principal amount of such Revolving Credit
Loans outstanding, with adjustments to the extent practicable to
equalize any prior payments or repayments not exactly in proportion.
Prior to any Settlement Date, however, all repayments of the
Revolving Credit Loans shall be applied in accordance with this
Section 3.4.2, first to outstanding Revolving Credit Loans of the
Agent.
Section 3.5. Automatic Repayments of Revolving Credit Loans After Event of
Default. Following the occurrence and during the continuance of an Event of
Default of which the account officers of the Agent active on the Borrower's
account have knowledge, all funds transferred to the Agent from the Swept
Accounts for which the Borrower has received credits shall be applied to the
Obligations in accordance with Section 13.4.
Section 4. LETTERS OF CREDIT.
Section 4.1. Letter of Credit Commitments.
4.1.1. Commitment to Issue Letters of Credit. Subject to the terms
and conditions hereof and the execution and delivery by the Borrower of a
letter of credit application on the Agent's customary form (a "Letter of
Credit Application"), the Agent and, in case of the Chase Letter of
Credit, Chase, on behalf of the Banks and in reliance upon the agreement
of the Banks set forth in Section 4.1.4 and upon the representations and
warranties of the Borrower contained herein, agrees, in its individual
capacity, to issue, extend and renew for the account of the Borrower one
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or more standby or documentary letters of credit (individually, a "Letter
of Credit"), in such form as may be requested from time to time by the
Borrower and agreed to by the Agent; provided, however, that, after giving
effect to such request, (a) the sum of the aggregate Maximum Drawing
Amount shall not exceed $100,000,000 at any one time and (b) the sum of
(i) the Maximum Drawing Amount on all Letters of Credit, (ii) all Unpaid
Reimbursement Obligations, and (iii) the amount of all Revolving Credit
Loans outstanding shall not exceed the Availability; provided, further,
that Chase shall issue, extend or renew no Letters of Credit other than
the Chase Letter of Credit.
4.1.2. Letter of Credit Applications. Each Letter of Credit
Application shall be completed to the satisfaction of the Agent. In the
event that any provision of any Letter of Credit Application shall be
inconsistent with any provision of this Credit Agreement, then the
provisions of this Credit Agreement shall, to the extent of any such
inconsistency, govern.
4.1.3. Terms of Letters of Credit. Each Letter of Credit issued,
extended or renewed hereunder shall, among other things, (a) provide for
the payment of sight drafts for honor thereunder when presented in
accordance with the terms thereof and when accompanied by the documents
described therein, and (b) have an expiry date no later than the date
which is ten (10) days (or, if the beneficiary is located outside of the
United States of America or the Letter of Credit is confirmed by a
confirmer or otherwise provides for one or more nominated persons,
forty-five (45) days) prior to the Revolving Credit Loan Maturity Date.
Each Letter of Credit so issued, extended, maintained or renewed shall be
subject to the Uniform Customs or, in the case of a standby Letter of
Credit, either the Uniform Customs or the International Standby Practices.
4.1.4. Reimbursement Obligations of Banks. Each Bank and the
Borrower hereby acknowledge that each Letter of Credit issued or
maintained by the Agent or Chase pursuant to this Credit Agreement is
issued or maintained by the Agent or Chase, as applicable, on behalf of
the Banks. Each Bank severally agrees that it shall be absolutely liable,
without regard to the occurrence of any Default or Event of Default or any
other condition precedent whatsoever, to the extent of such Bank's
Commitment Percentage, to reimburse the Agent or Chase, as applicable, on
demand for the amount of each draft paid by the Agent or Chase under each
Letter of Credit to the extent that such amount is not reimbursed by the
Borrower pursuant to Section 4.2 (such agreement for a Bank being called
herein the "Letter of Credit Participation" of such Bank).
4.1.5. Participation of Banks. Each such payment made by a Bank
shall be treated as the purchase by such Bank of a participating interest
in the Borrower's Reimbursement Obligation under Section 4.2 in an amount
equal to such payment. Each Bank shall share in accordance with its
participating interest in any interest which accrues pursuant to Section
4.2.
Section 4.2. Reimbursement Obligation of the Borrower. In order to induce
the Agent to issue, extend and renew each Letter of Credit other than the Chase
Letter of Credit, or, in the case of Chase, to maintain the Chase Letter of
Credit, and the Banks to participate therein, the Borrower hereby agrees to
reimburse or pay to the Agent, for
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the account of the Agent, Chase or (as the case may be) the Banks, with respect
to each Letter of Credit issued, extended or renewed by the Agent or Chase
hereunder,
(a) except as otherwise expressly provided in Section 4.2(b) and (c), on
each date that any draft presented under such Letter of Credit is honored by the
Agent or any draft presented under the Chase Letter of Credit is honored by
Chase, or the Agent or Chase otherwise makes a payment with respect thereto, (i)
the amount paid by the Agent or Chase under or with respect to such Letter of
Credit, and (ii) the amount of any taxes, fees, charges or other costs and
expenses whatsoever incurred by the Agent or any Bank in connection with any
payment made by the Agent or any Bank, under, or with respect to, such Letter of
Credit,
(b) upon the reduction (but not termination) of the Total Commitment to an
amount less than the Maximum Drawing Amount, an amount equal to such difference,
which amount shall be held by the Agent for the benefit of the Banks and the
Agent as cash collateral for all Reimbursement Obligations, and
(c) upon the termination of the Total Commitment, or the acceleration of
the Reimbursement Obligations with respect to all Letters of Credit in
accordance with Section 13, an amount equal to the then Maximum Drawing Amount
on all Letters of Credit, which amount shall be held by the Agent for the
benefit of the Banks and the Agent as cash collateral for all Reimbursement
Obligations.
Each such payment shall be made to the Agent at the Agent's Head Office in
immediately available funds. Interest on any and all amounts remaining unpaid by
the Borrower under this Section 4.2 at any time from the date such amounts
become due and payable (whether as stated in this Section 4.2, by acceleration
or otherwise) until payment in full (whether before or after judgment) shall be
payable to the Agent on demand at the rate specified in Section 5.10 for overdue
principal on the Revolving Credit Loans.
Section 4.3. Letter of Credit Payments. If any draft shall be presented or
other demand for payment shall be made under any Letter of Credit, the Agent or
Chase, as applicable, shall notify the Borrower of the date and amount of the
draft presented or demand for payment and of the date and time when it expects
to pay such draft or honor such demand for payment. If the Borrower fails to
reimburse the Agent as provided in Section 4.2 on or before the date that such
draft is paid or other payment is made by the Agent, the Agent may at any time
thereafter notify the Banks of the amount of any such Unpaid Reimbursement
Obligation. No later than 3:00 p.m. (Boston time) on the Business Day next
following the receipt of such notice, each Bank shall make available to the
Agent, at its Head Office, in immediately available funds, such Bank's
Commitment Percentage of such Unpaid Reimbursement Obligation, together with an
amount equal to the product of (i) the average, computed for the period referred
to in clause (iii) below, of the weighted average interest rate paid by the
Agent or Chase, as applicable, for federal funds acquired by the Agent or Chase,
as applicable, during each day included in such period, times (ii) the amount
equal to such Bank's Commitment Percentage of such Unpaid Reimbursement
Obligation, times (iii) a fraction, the numerator of which is the number of days
that elapse from and including the date the Agent or Chase, as applicable, paid
the draft presented for honor or otherwise made
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payment to the date on which such Bank's Commitment Percentage of such Unpaid
Reimbursement Obligation shall become immediately available to the Agent, and
the denominator of which is 365. If such payments by the Banks are made with
respect to the Chase Letter of Credit, such payments to the Agent shall be for
the account of Chase. The responsibility of the Agent and Chase, as applicable,
to the Borrower and the Banks shall be only to determine that the documents
(including each draft) delivered under each Letter of Credit in connection with
such presentment shall be in accordance in all material respects with such
Letter of Credit.
Section 4.4. Obligations Absolute. The Borrower's obligations under this
Section 4 to repay drawings under the Letters of Credit as provided hereunder
shall rank pari passu with the obligations of the Borrower to repay all other
Revolving Credit Loans, and shall be absolute and unconditional under any and
all circumstances and irrespective of the occurrence of any Default or Event of
Default or any condition precedent whatsoever or any setoff, counterclaim or
defense to payment which the Borrower may have or have had against the Agent,
Chase, any Bank or any beneficiary of a Letter of Credit. The Borrower further
agrees with the Agent, Chase and the Banks that the Agent, Chase and the Banks
shall not be responsible for, and the Borrower's Reimbursement Obligations under
Section 4.2 shall not be affected by, among other things, the validity or
genuineness of documents or of any endorsements thereon, even if such documents
should in fact prove to be in any or all respects invalid, fraudulent or forged,
or any dispute between or among the Borrower, the beneficiary of any Letter of
Credit or any financing institution or other party to which any Letter of Credit
may be transferred or any claims or defenses whatsoever of the Borrower against
the beneficiary of any Letter of Credit or any such transferee. The Agent, Chase
and the Banks shall not be liable for any error, omission, interruption or delay
in transmission, dispatch or delivery of any message or advice, however
transmitted, in connection with any Letter of Credit. The Borrower agrees that
any action taken or omitted by the Agent or any Bank under or in connection with
each Letter of Credit and the related drafts and documents, if done in good
faith and not constituting gross negligence or willful misconduct, shall be
binding upon the Borrower and shall not result in any liability on the part of
the Agent, Chase or any Bank to the Borrower.
Section 4.5. Reliance by Issuer. To the extent not inconsistent with
Section 4.4, the Agent (and Chase, with respect to the Chase Letter of Credit)
shall be entitled to rely, and shall be fully protected in relying upon, any
Letter of Credit, draft, writing, resolution, notice, consent, certificate,
affidavit, letter, cablegram, telegram, telecopy, telex or teletype message,
statement, order or other document believed by it to be genuine and correct and
to have been signed, sent or made by the proper Person or Persons and upon
advice and statements of legal counsel, independent accountants and other
experts selected by the Agent (or Chase, in the case of the Chase Letter of
Credit). The Agent (and Chase, with respect to the Chase Letter of Credit) shall
be fully justified in failing or refusing to take any action under this
Agreement unless it shall first have received such advice or concurrence of the
Majority Banks as it reasonably deems appropriate or it shall first be
indemnified to its reasonable satisfaction by the Banks against any and all
liability and expense which may be incurred by it by reason of taking or
continuing to take any such action. The Agent (and Chase, with respect to the
Chase Letter of Credit) shall in all cases be fully protected in acting, or in
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refraining from acting, under this Agreement in accordance with a request of the
Majority Banks, and such request and any action taken or failure to act pursuant
thereto shall be binding upon the Banks and all future holders of the Revolving
Credit Notes or of a Letter of Credit Participation.
Section 4.6. Letter of Credit Fee. The Borrower shall pay a fee (in each
case, a "Letter of Credit Fee") to the Agent at a rate per annum (a) in respect
of each standby Letter of Credit equal to (i) the Applicable Margin plus
one-eighth of one percent (1/8%) per annum of the face amount of such standby
Letter of Credit plus (ii) the Agent's customary issuance fee for any Letter of
Credit issued after the Effective Date, and (b) in respect of each documentary
Letter of Credit equal to (i) the Agent's customary issuance fee or amendment
fee, as the case may be, plus (ii) the Agent's customary time negotiation fee
per document examination plus (iii) an amount equal to the Applicable Margin
plus one-eighth of one percent (1/8%) per annum of the face amount of such
documentary Letter of Credit. Each issuance, amendment, negotiation or document
examination fee and, with respect to each Letter of Credit, a portion of the
Letter of Credit Fee in the amount of one-eighth of one percent (1/8%) of the
face amount of each standby Letter of Credit and each documentary Letter of
Credit shall be for the Agent's own account (or for the account of Chase, in the
case of the Chase Letter of Credit) and the remaining portion of each Letter of
Credit Fee shall be for the accounts of the Banks in accordance with their
respective Commitment Percentages. The Letter of Credit Fee referred to in
clauses (a)(i) and (b)(iii) shall be payable quarterly in arrears, and all such
other Letter of Credit Fees shall be payable upon issuance, amendment or
negotiation, as the case may be.
Section 5. CERTAIN GENERAL PROVISIONS.
Section 5.1. Fees. The Borrower shall pay to the Co-Agents for each
Co-Agent's own account closing fees, underwriting fees and such other fees as
specified in the letter agreements of even date herewith (the "Fee Letters").
Section 5.2. Funds for Payments.
5.2.1. Payments to Agent. All payments of principal, interest,
Reimbursement Obligations, commitment fees, Letter of Credit Fees and any
other amounts due hereunder or under any of the other Loan Documents shall
be made to the Agent, for the respective accounts of the Banks and the
Agent, at the Agent's Head Office or at such other location in the Boston,
Massachusetts, area that the Agent may from time to time designate, in
each case in immediately available funds.
5.2.2. No Offset, Etc.
(a) All payments by the Borrower hereunder and under any of
the other Loan Documents shall be made without setoff or
counterclaim and, except as provided in paragraph (c) below, free
and clear of and without deduction for any taxes, levies, imposts,
duties, charges, fees, deductions or withholdings of any nature now
or hereafter imposed or levied by any jurisdiction or any political
subdivision thereof or taxing or other authority
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therein unless the Borrower is compelled by law to make such
deduction or withholding. If any such obligation is imposed upon the
Borrower with respect to any amount payable by it hereunder or under
any of the other Loan Documents, the Borrower will, except as
provided in paragraph (c) below, pay to the Agent, for the account
of the Banks or (as the case may be) the Agent, on the date on which
such amount is due and payable hereunder or under such other Loan
Document, such additional amount in Dollars as shall be necessary to
enable the Banks or the Agent to receive the same net amount which
the Banks or the Agent would have received on such due date had no
such obligation been imposed upon the Borrower. The Borrower will
deliver promptly to the Agent certificates or other valid vouchers
for all taxes or other charges deducted from or paid with respect to
payments made by the Borrower hereunder or under such other Loan
Document.
(b) Each Bank and the Agent that is not a U.S. Person as
defined in Section 7701(a)(30) of the Code hereby agrees that, if
and to the extent it is legally able to do so, it shall, prior to
the date of the first payment by the Borrower hereunder to be made
to such Bank or the Agent or for such Bank's or the Agent's account,
deliver to the Borrower and the Agent, as applicable, such
certificates, documents or other evidence, as and when required by
the Code or Treasury Regulations issued pursuant thereto, including
two (2) duly completed copies of Internal Revenue Service Form
W-8BEN or Form W-8ECI and any other certificate or statement of
exemption required by Treasury Regulations, or any subsequent
versions thereof or successors thereto, properly completed and duly
executed by such Bank or the Agent establishing that with respect to
payments of principal, interest or fees hereunder it is (i) not
subject to United States federal withholding tax under the Code
because such payment is effectively connected with the conduct by
such Bank or Agent of a trade or business in the United States or
(ii) totally exempt or partially exempt from United States federal
withholding tax under a provision of an applicable tax treaty. Each
Bank or Agent agrees that it shall, promptly upon a change of its
lending office or the selection of any additional lending office, to
the extent the forms previously delivered by it pursuant to this
section are no longer effective, and promptly upon the Borrower's or
the Agent's reasonable request after the occurrence of any other
event (including the passage of time) requiring the delivery of a
Form W-8BEN or Form W-8ECI in addition to or in replacement of the
forms previously delivered, deliver to the Borrower and the Agent,
as applicable, if and to the extent it is properly entitled to do
so, a properly completed and executed Form W-8BEN or Form W-8ECI (or
any successor forms thereto). Unless the Borrower and the Agent have
received forms or other documents satisfactory to them indicating
that such payments hereunder or under the other Loan Documents are
not subject to the United States federal withholding tax, the
Borrower or the Agent shall withhold taxes from such payments at the
applicable statutory rate, or a reduced rate pursuant to an
applicable tax treaty if such Bank has delivered a form evidencing
such tax treaty benefit.
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(c) Notwithstanding paragraph (a) above, the Borrower shall not be
required to pay any additional amounts to any Bank or the Agent for the
account of the lending office of such Bank or Agent, pursuant to this
Section 5.2.2, if (i) the obligation to pay such additional amounts would
not have arisen but for a failure by such Bank or the Agent to comply with
the provisions of subsection (b) above; (ii) the Bank or the Agent is not
eligible, in respect of such lending office, for complete exemption from
United States federal withholding tax with respect to payments of
interest, principal or fees under this Credit Agreement or under any of
the other Loan Documents, other than by reason of any change, after the
Initial Date, of any applicable law, treaty or regulation by any
governmental authority or other agency charged with the interpretation or
administration thereof; or (iii) the tax is an income or franchise tax
imposed on net income either by the jurisdiction under which such Bank or
the Agent is organized or any political subdivision thereof or in which
its principal office is located or by the jurisdiction of such Bank's or
Agent's lending office or any political subdivision thereof. For purposes
of this subsection (c), the term "Initial Date" shall mean, with respect
to any Bank or the Agent which is a party hereto on the Effective Date,
and with respect to each assignee or transferee of any Bank, the date of
the grant of the participation in, or transfer or assignment of an
interest hereunder to such assignee or transferee.
Section 5.3. Computations. All computations of interest on the Revolving
Credit Loans other than Eurodollar Rate Loans and of commitment fees, Letter of
Credit Fees or other fees shall, unless otherwise expressly provided herein be
based on a 365/366-day year and paid for the actual number of days elapsed. All
computations of interest on the Eurodollar Rate Loans shall be based on a 360
day year and paid for the actual number of days elapsed. Except as otherwise
provided in the definition of the term "Interest Period" with respect to
Eurodollar Rate Loans, whenever a payment hereunder or under any of the other
Loan Documents becomes due on a day that is not a Business Day, the due date for
such payment shall be extended to the next succeeding Business Day, and interest
shall accrue during such extension. The outstanding amount of the Revolving
Credit Loans as reflected on the Revolving Credit Note Records from time to time
shall be considered correct and binding on the Borrower unless within five (5)
Business Days after receipt of any notice by the Agent or any of the Banks of
such outstanding amount, the Agent or such Bank shall notify the Borrower to the
contrary.
Section 5.4. Inability to Determine Eurodollar Rate. In the event, prior
to the commencement of any Interest Period relating to any Eurodollar Rate Loan,
the Agent shall determine or be notified by the Majority Banks that adequate and
reasonable methods do not exist for ascertaining the Eurodollar Rate that would
otherwise determine the rate of interest to be applicable to any Eurodollar Rate
Loan during any Interest Period, the Agent shall forthwith give notice of such
determination (which shall be conclusive and binding on the Borrower and the
Banks) to the Borrower and the Banks. In such event (a) any Loan Request or
Conversion Request with respect to Eurodollar Rate Loans shall be automatically
withdrawn and shall be deemed a request for Base Rate Loans, (b) each Eurodollar
Rate Loan will automatically, on the
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last day of the then current Interest Period relating thereto, become a Base
Rate Loan, and (c) the obligations of the Banks to make Eurodollar Rate Loans
shall be suspended until the Agent or the Majority Banks determines that the
circumstances giving rise to such suspension no longer exist, whereupon the
Agent or, as the case may be, the Agent upon the instruction of the Majority
Banks, shall so notify the Borrower and the Banks.
Section 5.5. Illegality. Notwithstanding any other provisions herein, if
any present or future law, regulation, treaty or directive or in the
interpretation or application thereof shall make it unlawful for any Bank to
make or maintain Eurodollar Rate Loans, such Bank shall forthwith give notice of
such circumstances to the Borrower and the other Banks and thereupon (a) the
commitment of such Bank to make Eurodollar Rate Loans or convert Loans of
another Type to Eurodollar Rate Loans shall forthwith be suspended and (b) such
Bank's Revolving Credit Loans then outstanding as Eurodollar Rate Loans, if any,
shall be converted automatically to Base Rate Loans on the last day of each
Interest Period applicable to such Eurodollar Rate Loans or within such earlier
period as may be required by law. The Borrower hereby agrees promptly to pay the
Agent for the account of such Bank, upon demand by such Bank, any additional
amounts necessary to compensate such Bank for any costs incurred by such Bank in
making any conversion in accordance with this Section 5.5, including any
interest or fees payable by such Bank to lenders of funds obtained by it in
order to make or maintain its Eurodollar Loans hereunder.
Section 5.6. Additional Costs, Etc. If any present or future applicable
law, which expression, as used herein, includes statutes, rules and regulations
thereunder and interpretations thereof by any competent court or by any
governmental or other regulatory body or official charged with the
administration or the interpretation thereof and requests, directives,
instructions and notices at any time or from time to time hereafter made upon or
otherwise issued to any Bank by any central bank or other fiscal, monetary or
other authority (whether or not having the force of law), shall:
(a) subject any Bank to any tax, levy, impost, duty, charge, fee,
deduction or withholding of any nature with respect to this Credit Agreement,
the other Loan Documents, any Letters of Credit, such Bank's Commitment or such
Bank's Revolving Credit Loans (other than taxes based upon or measured by the
income or profits of such Bank), or
(b) materially change the basis of taxation (except for changes in taxes
on income or profits) of payments to any Bank of the principal of or the
interest on any Revolving Credit Loans or any other amounts payable to any Bank
or the Agent under this Credit Agreement or any of the other Loan Documents, or
(c) impose or increase or render applicable (other than to the extent
specifically provided for elsewhere in this Credit Agreement) any special
deposit, reserve, assessment, liquidity, capital adequacy or other similar
requirements (whether or not having the force of law) against assets held by, or
deposits in or for the account of, or loans by or letters of credit issued by,
or commitments of an office of such Bank, or
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(d) impose on any Bank or the Agent any other conditions or requirements
with respect to this Credit Agreement, the other Loan Documents, any Letters of
Credit, the Revolving Credit Loans, such Bank's Commitment or any class of
loans, letters of credit or commitments of which any of the Revolving Credit
Loans or such Bank's Commitment forms a part, and the result of any of the
foregoing is
(i) to increase the cost to any Bank of making, funding, issuing,
renewing, extending or maintaining any of the Revolving Credit Loans or
such Bank's Commitment or any Letter of Credit, or
(ii) to reduce the amount of principal, interest, Reimbursement
Obligation or other amount payable to such Bank or the Agent hereunder on
account of such Bank's Commitment, any Letter of Credit or any of the
Revolving Credit Loans, or
(iii) to require such Bank or the Agent to make any payment or to
forego any interest or Reimbursement Obligation or other sum payable
hereunder, the amount of which payment or foregone interest or
Reimbursement Obligation or other sum is calculated by reference to the
gross amount of any sum receivable or deemed received by such Bank or the
Agent from the Borrower hereunder,
then, except as otherwise provided in Section 5.2(c), and in each such case, the
Borrower will, upon demand made by such Bank or (as the case may be) the Agent
at any time and from time to time and as often as the occasion therefor may
arise, pay to such Bank or the Agent such additional amounts as will be
sufficient in the good faith opinion of such Bank or the Agent, to compensate
such Bank or the Agent for such additional cost, reduction, payment or foregone
interest or Reimbursement Obligation or other sum. Each Bank shall allocate such
costs (or the effect of such reductions, payments or foregone interest) among
its customers similarly situated in good faith and on an equitable basis.
Section 5.7. Capital Adequacy. If after the date hereof any Bank or the
Agent determines that (a) the adoption of or change in any law, governmental
rule, regulation, policy, guideline or directive (whether or not having the
force of law) regarding capital requirements for banks or bank holding companies
or any change in the interpretation or application thereof by a court or
governmental authority with appropriate jurisdiction, or (b) compliance by such
Bank or the Agent or any corporation controlling such Bank or the Agent with any
law, governmental rule, regulation, policy, guideline or directive (whether or
not having the force of law) of any such entity regarding capital adequacy, has
the effect of reducing the return on such Bank's or the Agent's commitment with
respect to any Revolving Credit Loans to a level below that which such Bank or
the Agent could have achieved but for such adoption, change or compliance
(taking into consideration such Bank's on the Agent's then existing policies
with respect to capital adequacy and assuming full utilization of such entity's
capital) by any amount deemed by such Bank or (as the case may be) the Agent to
be material, then such Bank or the Agent may notify the Borrower of such fact.
To the extent that the amount of such reduction in the return on capital is not
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reflected in the Base Rate, the Borrower and such Bank or the Agent, as the case
may be, shall thereafter attempt to negotiate in good faith, within thirty (30)
days of the day on which the Borrower receives such notice, an adjustment
payable hereunder that will adequately compensate such Bank or the Agent, as the
case may be, in light of these circumstances. If the Borrower and such Bank or
the Agent, as the case may be, are unable to agree to such adjustment within
thirty (30) days of the date on which the Borrower receives such notice, then
commencing on the date of such notice (but not earlier than the effective date
of any such increased capital requirement), the fees payable hereunder shall
increase by an amount that will, in such Bank's reasonable determination,
provide adequate compensation. Each Bank and the Agent shall allocate such cost
increases among its customers in good faith and on an equitable basis.
Section 5.8. Certificate. A certificate setting forth any additional
amounts payable pursuant to Sections 5.6 or 5.7 and a brief explanation
of such amounts which are due, submitted by any Bank or the Agent to the
Borrower, shall be conclusive, absent manifest error, that such amounts are due
and owing.
Section 5.9. Indemnity. The Borrower agrees to indemnify each Bank and to
hold each Bank harmless from and against any loss, cost or expense (including
loss of anticipated profits) that such Bank may sustain or incur as a
consequence of (a) default by the Borrower in payment of the principal amount of
or any interest on any Eurodollar Rate Loans as and when due and payable,
including any such loss or expense arising from interest or fees payable by such
Bank to lenders of funds obtained by it in order to maintain its Eurodollar Rate
Loans, (b) default by the Borrower in making a borrowing or conversion after the
Borrower has given (or is deemed to have given) a Loan Request or a Conversion
Request relating thereto in accordance with Section 2.6 or Section 2.7 or (c)
the making of any payment of a Eurodollar Rate Loan or the making of any
conversion of any such Loan to a Base Rate Loan on a day that is not the last
day of the applicable Interest Period with respect thereto, including interest
or fees payable by such Bank to lenders of funds obtained by it in order to
maintain any such Loans. The Borrower hereby authorizes the Agent to debit from
time to time its Operating Account for the amount of any such loss, cost or
expense.
Section 5.10. Interest After Default.
5.10.1. Overdue Amounts. Overdue principal and (to the extent
permitted by applicable law) interest on the Revolving Credit Loans and
all other overdue amounts payable hereunder or under any of the other Loan
Documents shall bear interest compounded monthly and payable on demand at
a rate per annum equal to two percent (2%) above the Base Rate plus the
Applicable Margin otherwise applicable to Base Rate Loans until such
amount shall be paid in full (after as well as before judgment).
5.10.2. Amounts Not Overdue. During the continuance of an Event of
Default and upon written notice from the Agent to the Borrower, the
principal of the Revolving Credit Loans not overdue and all other amounts
not overdue payable hereunder (including, without limitation, Letter of
Credit Fees) or under any of the other Loan Documents shall, until such
Event of Default has been cured or
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remedied or such Event of Default has been waived by the Banks pursuant to
Section 26, bear interest at a rate per annum equal to two percent (2%)
above the rate otherwise applicable thereto until such amount shall be
paid in full (after as well as before judgment).
5.10.3. Maximum Interest. Notwithstanding any other term of this
Credit Agreement or any Revolving Credit Note or any other document
referred to herein or therein, the maximum amount of interest which may be
charged to or collected from any person liable hereunder or under any
Revolving Credit Note by the Banks shall be absolutely limited to, and
shall in no event exceed, the maximum amount of interest which could
lawfully be charged or collected under applicable law (including, to the
extent applicable, the provisions of Section 5197 of the Revised Statutes
of the United States of America, as amended, 12 U.S.C. Section 85, as
amended), so that the maximum of all amounts constituting interest under
applicable law, howsoever computed, shall never exceed as to any person
liable therefor such lawful maximum, and any term of this Credit Agreement
or any Revolving Credit Note or any other document referred to herein or
therein which could be construed as providing for interest in excess of
such lawful maximum shall be and hereby is made expressly subject to and
modified by the provisions of this paragraph.
5.11. Replacement Banks. Within thirty (30) days after (a) any Bank has
demanded compensation from the Borrower pursuant to Sections 5.2.2(a),
5.6 or 5.7 hereof, (b) there shall have occurred a change in law with respect to
any Bank as a consequence of which it shall have become unlawful for such Bank
to make a Eurodollar Rate Loan on any Drawdown Date, as described in Section 5.5
hereof or (c) any Bank shall be a Specified Non-Consenting Bank (any such Bank
described in the foregoing clauses (a), (b) or (c) is hereinafter referred to as
an "Affected Bank"), the Borrower may request that the Banks other than the
Affected Banks (the "Non-Affected Banks") acquire all, but not less than all, of
the Affected Bank's outstanding Revolving Credit Loans and assume all, but not
less than all, of the Affected Bank's Commitment. If the Borrower so requests,
the Non-Affected Banks may elect to acquire all or any portion of the Affected
Bank's outstanding Revolving Credit Loans and to assume all or any portion of
the Affected Bank's Commitment. If the Non-Affected Banks do not elect to
acquire and assume all of the Affected Bank's outstanding Revolving Credit Loans
and Commitment, the Borrower may designate a replacement bank or banks, which
must be satisfactory to the Agent, to acquire and assume that portion of the
outstanding Revolving Credit Loans and Commitment of the Affected Bank not being
acquired and assumed by the Non-Affected Banks. The provisions of Section 19
hereof shall apply to all reallocations pursuant to this Section 5.11, and the
Affected Bank and any Non-Affected Banks and/or replacement banks which are to
acquire the Revolving Credit Loans and Commitment of the Affected Bank shall
execute and deliver to the Agent, in accordance with the provisions of Section
19 hereof, such Assignments and Acceptances and other instruments, including,
without limitation, Revolving Credit Notes, as are required pursuant to Section
19 hereof to give effect to such reallocations. Any Non-Affected Banks and/or
replacement banks which are to acquire the Revolving Credit Loans and Commitment
of the Affected Bank shall be deemed to be Eligible Assignees for all purposes
of Section 19 hereof. On the effective date of the
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applicable Assignments and Acceptances, the Borrower shall pay to the Affected
Bank all interest accrued on its Revolving Credit Loans up to but excluding such
date, along with any fees payable to such Affected Bank hereunder up to but
excluding such date.
Section 6. SECURITY AND GUARANTY.
Section 6.1. Collateral Security. The Obligations shall be secured by a
perfected first-priority security interest (subject only to Permitted Liens) in
certain of the assets of the Borrower, whether now owned or hereafter acquired,
pursuant to the Security Documents. The Obligations shall also be guaranteed
pursuant to the terms of the Guaranty. The obligations of the Guarantors under
the Guaranty shall be in turn secured by a perfected first priority security
interest (subject only to Permitted Liens) in certain of the assets of the
Guarantors, whether now owned or hereafter acquired, pursuant to the terms of
the Security Documents to which the Guarantors are party.
Section 6.2. Guaranty. Whereas, (i) each Guarantor and the Borrower are
members of a group of related corporations, the success of any one of which is
dependent in part on the success of the other members of such group, (ii) each
Guarantor expects to receive substantial direct and indirect benefit from the
Loans advanced and other credit extended to the Borrower by the Banks pursuant
to this Loan Agreement (which benefits are hereby acknowledged), (iii) it is a
condition precedent to the Banks' advancing Loans and Letters of Credit to the
Borrower under this Loan Agreement that each Guarantor execute and deliver to
the Bank a guaranty substantially in the form of this Section 6.2 and (iv) each
Guarantor wishes to guaranty the Borrower's obligations to the Agent and the
Banks under or in respect of the Loan Agreement, each Guarantor hereby agrees
with the Agent and the Banks as set forth in this Section 6.2.
Section 6.2.1. Guaranty of Payment and Performance. Each Guarantor
hereby jointly and severally guarantees to the Banks and the Agent the
full and punctual payment when due (whether at stated maturity, by
required pre-payment, by acceleration or otherwise), as well as the
performance, of all of the Obligations of the Borrower (referred to in
this Section 6.2 as the "Borrower's Obligations"), including all such
which would become due but for the operation of the automatic stay
pursuant to Section 362(a) of the Federal Bankruptcy Code and the
operation of Sections 502(b) and 506(b) of the Federal Bankruptcy
Code. This Guaranty is an absolute, unconditional and continuing guaranty
of the full and punctual payment and performance of all of the Borrower's
Obligations and not of their collectibility only and is in no way
conditioned upon any requirement that the Agent or any Bank first attempt
to collect any of the Borrower's Obligations from the Borrower or any
other Guarantor or resort to any collateral security or other means of
obtaining payment. Should the Borrower default in the payment or
performance of any of the Borrower's Obligations, the obligations of each
Guarantor hereunder with respect to such Borrower's Obligations in default
shall, upon demand by the Agent, become immediately due and payable to the
Agent, for the benefit of the Banks and the Agent, without demand or
notice of any nature, all of which are expressly waived by each Guarantor.
Payments by each Guarantor hereunder may be required by the Agent on any
number of occasions. All payments by each Guarantor hereunder shall be
made to the Agent, in the manner and at the place of payment specified
therefor in this Agreement, for the account of the Banks and the Agent.
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Section 6.2.2. Guarantors' Agreement to Pay Enforcement Costs, etc.
Each Guarantor further agrees, as the principal obligor and not as a
guarantor only, to pay to the Agent, on demand, all costs and expenses
(including court costs and legal expenses) incurred or expended by the
Agent or any Bank in connection with the Obligations, this Guaranty and
the enforcement thereof, together with interest on amounts recoverable
under this Section 6.2.2 from the time when such amounts become due until
payment, whether before or after judgment, at the rate of interest for
overdue principal set forth in this Agreement, provided that if such
interest exceeds the maximum amount permitted to be paid under applicable
law, then such interest shall be reduced to such maximum permitted amount.
Section 6.2.3. Waivers by Guarantors; Bank's Freedom to Act. Each
Guarantor agrees that the Obligations will be paid and performed strictly
in accordance with their respective terms, regardless of any law,
regulation or order now or hereafter in effect in any jurisdiction
affecting any of such terms or the rights of the Agent or any Bank with
respect thereto. Each Guarantor waives promptness, diligences,
presentment, demand, protest, notice of acceptance, notice of any
Obligations incurred and all other notices of any kind, all defenses which
may be available by virtue of any valuation, stay, moratorium law or other
similar law now or hereafter in effect, any right to require the
marshalling of assets of the Borrower or any other entity or other person
primarily or secondarily liable with respect to any of the Obligations,
and all suretyship defenses generally. Without limiting the generality of
the foregoing, each Guarantor agrees to the provisions of any instrument
evidencing, securing or otherwise executed in connection with any
Obligation and agrees that the obligations of such Guarantor hereunder
shall not be released or discharged, in whole or in part, or otherwise
affected by (i) the failure of the Agent or any Bank to assert any claim
or demand or to enforce any right or remedy against the Borrower or any
other entity or other person primarily or secondarily liable with respect
to any of the Obligations; (ii) any extensions, compromise, refinancing,
consolidation or renewals of any Obligation; (iii) any change in the time,
place or manner of payment of any of the Obligations or any rescissions,
waivers, compromise, refinancing, consolidation or other amendments or
modifications of any of the terms or provisions of this Agreement, the
Revolving Credit Notes, the other Loan Documents or any other agreement
evidencing, securing or otherwise executed in connection with any of the
Obligations, (iv) the addition, substitution or release of any entity or
other person primarily or secondarily liable for any Obligation; (v) the
adequacy of any rights which the Agent or any Bank may have against any
collateral security or other means of obtaining repayment of any of the
Obligations; (vi) the impairment of any collateral securing any of the
Obligations, including without limitation the failure to perfect or
preserve any rights which the Agent or any Bank might have in such
collateral security or the substitution, exchange, surrender, release,
loss or destruction of any such collateral security; or (vii) any other
act or omission which might in any manner or to any extent vary the risk
of any Guarantor or otherwise operate as a release or discharge of any
Guarantor, all of which may be done without notice to any Guarantor. To
the fullest extent permitted by law, each Guarantor hereby expressly
waives any and all rights or defenses arising by reason of (A) any "one
action" or "anti-deficiency" law which would otherwise prevent the Agent
or any
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Bank from bringing any action, including any claim for a deficiency, or
exercising any other right or remedy (including any right of set-off),
against any Guarantor before or after the Agent's or such Bank's
commencement or completion of any foreclosure action, whether judicially,
by exercise of power of sale or otherwise, or (B) any other law which in
any other way would otherwise require any election of remedies by the
Agent or any Bank.
Section 6.2.4. Unenforceability of Obligations Against Borrower. If
for any reason the Borrower has no legal existence or is under no legal
obligation to discharge any of the Borrower's Obligations, or if any of
the Borrower's Obligations have become irrecoverable from the Borrower by
reason of the Borrower's insolvency, bankruptcy or reorganization or by
other operation of law or for any other reason, this Guaranty shall
nevertheless be binding on each Guarantor to the same extent as if such
Guarantor at all times had been the principal obligor on all such
Obligations. In the event that acceleration of the time for payment of any
of the Borrower's Obligations is stayed upon the insolvency, bankruptcy or
reorganization of the Borrower, or for any other reason, all such amounts
otherwise subject to acceleration under the terms of this Agreement, the
Revolving Credit Notes, the other Loan Documents or any other agreement
evidencing, securing or otherwise executed in connection with any
Obligation of the Borrower shall be immediately due and payable by each
Guarantors.
6.2.5. Subrogation; Subordination.
6.2.5.1. Waiver of Rights Against Borrower. Until the
indefeasible payment and performance in full of all of the
Borrower's Obligations, no Guarantor shall exercise and each
Guarantor hereby waives any rights against the Borrower arising as a
result of payment by such Guarantor hereunder, by way of
subrogation, reimbursement, restitution, contribution or otherwise,
and will not prove any claim in competition with the Agent or any
Bank in respect of any payment hereunder in any bankruptcy,
insolvency or reorganization case or proceedings of any nature; no
Guarantor will claim any setoff, recoupment or counterclaim against
the Borrower in respect of any liability of such Guarantor to the
Borrower; and each Guarantor waives any benefit of and any right to
participate in any collateral security which may be held by the
Agent or any Bank.
6.2.5.2. Subordination. The payment of any amounts due with
respect to any indebtedness of the Borrower for money borrowed or
credit received now or hereafter owed to each Guarantor is hereby
subordinated to the prior payment in full of all of the Borrower's
Obligations. Each Guarantor agrees that, after the occurrence of any
default in the payment or performance of any of the Borrower's
Obligations, each Guarantor will not demand, xxx for or otherwise
attempt to collect any such indebtedness of the Borrower to such
Guarantor until all of the Borrower's Obligations shall have been
paid in full. If, notwithstanding the foregoing sentence, any
Guarantor shall collect, enforce or receive any amounts in respect
of such indebtedness while any Borrower's Obligations are still
outstanding, such amounts shall be collected, enforced and received
by such Guarantor as
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trustee for the Banks and the Agent and be paid over to the Agent,
for the benefit of the Banks and the Agent, on account of the
Borrower's Obligations without affecting in any manner the liability
of any Guarantor under the other provisions of this Guaranty.
6.2.5.3 Provisions Supplemental. The provisions of this
Section 6.2.5 shall be supplemental to and not in derogation of any
rights and remedies of the Banks and the Agent under any separate
subordination agreement which the Agent may at any time and from
time to time enter into with any Guarantor for the benefit of the
Banks and the Agent.
6.2.6. Setoff. Regardless of the adequacy of any collateral security
or other means of obtaining payment of any of the Borrower's Obligations,
each of the Agent and the Banks is hereby authorized at any time and from
time to time, without notice to any Guarantor (any such notice being
expressly waived by each Guarantor) and to the fullest extent permitted by
law, to set off and apply any deposits and other sums credited by or due
from the Agent or such Bank to any Guarantor or subject to withdrawal by
such Guarantor against the obligations of any Guarantor under this
Guaranty, whether or not the Agent or such Bank shall have made any demand
under this Guaranty and although such obligations may be contingent or
unmatured.
6.2.7. Further Assurances. Each Guarantor agrees that it will from
time to time, at the request of the Agent, do all such things and execute
all such documents as the Agent may consider necessary or desirable to
give full effect to this Guaranty and to perfect and preserve the rights
and powers of the Banks and the Agent hereunder. Each Guarantor
acknowledges and confirms that such Guarantor itself has established its
own adequate means of obtaining from the Borrower on a continuing basis
all information desired by such Guarantor concerning the financial
condition of the Borrower and that each Guarantor will look to the
Borrower and not to the Agent or any Bank in order for such Guarantor to
keep adequately informed of changes in the Borrower's financial condition.
6.2.8. Termination; Reinstatement. This Guaranty shall remain in
full force and effect until all of the Borrower's Obligations have been
irrevocably paid in full in cash and all commitments under this Loan
Agreement have been terminated. This Guaranty shall continue to be
effective or be reinstated, if at any time any payment made or value
received with respect to any Borrower's Obligation is rescinded or must
otherwise be returned by the Agent or any Bank upon the insolvency,
bankruptcy or reorganization of the Borrower, or otherwise, all as though
such payment had not been made or value received.
6.2.9. Successors and Assigns. This Guaranty shall be binding upon
each Guarantor, its successors and assigns, and shall inure to the benefit
of the Agent and the Banks and their respective successors, transferees
and assigns. Without limiting the generality of the foregoing sentence,
each Bank may assign or otherwise transfer this Agreement, the Revolving
Credit Notes, the other Loan Documents or any other agreement or note held
by it evidencing, securing or otherwise executed in connection with the
Borrower's Obligations, or sell participations in any interest therein, to
any other entity or other person, and such
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other entity or other person shall thereupon become vested, to the extent
set forth in the agreement evidencing such assignment, transfer or
participation, with all the rights in respect thereof granted to such Bank
herein, all in accordance with Section 19 of this Agreement. No Guarantor
may assign any of its obligations hereunder.
Section 7. REPRESENTATIONS AND WARRANTIES. The Borrower (and, where
applicable, the Parent), represents and warrants to the Banks and the Agent as
follows:
Section 7.1. Corporate Authority.
7.1.1. Incorporation; Good Standing. Each of the Parent, the
Borrower and their respective Subsidiaries (a) is a corporation or limited
liability company duly organized, validly existing and in good standing
under the laws of its state or other jurisdiction of incorporation or
organization, (b) has all requisite corporate or limited liability company
power to own its property and conduct its business as now conducted and as
presently contemplated, and (c) is in good standing as a foreign
corporation or limited liability company and is duly authorized to do
business in each jurisdiction where such qualification is necessary except
where a failure to be so qualified would not have a Material Adverse
Effect.
7.1.2. Authorization. The execution, delivery and performance by the
Parent, the Borrower and their respective Subsidiaries of this Credit
Agreement and the other Loan Documents to which it is a party and the
transactions contemplated hereby and thereby (a) are within the corporate
or limited liability company authority of such Person, (b) have been duly
authorized by all necessary corporate or limited liability company
proceedings, (c) do not conflict with or result in any breach or
contravention of any provision of law, statute, rule or regulation to
which such Person is subject or any judgment, order, writ, injunction,
license or permit applicable to such Person where such conflict, breach or
contravention could reasonably be expected to have a Material Adverse
Effect and (d) do not conflict with any provision of the corporate charter
or bylaws of, or any agreement or other instrument binding upon, such
Person where such conflict could reasonably be expected to have a Material
Adverse Effect.
7.1.3. Enforceability. The execution and delivery by the Parent, the
Borrower and their respective Subsidiaries of this Credit Agreement and
the other Loan Documents to which it is a party will result in valid and
legally binding obligations of such Person enforceable against such Person
in accordance with the respective terms and provisions hereof and thereof,
except as enforceability is limited by bankruptcy, insolvency,
reorganization, moratorium or other laws relating to or affecting
generally the enforcement of creditors' rights and except to the extent
that availability of the remedy of specific performance or injunctive
relief is subject to the discretion of the court before which any
proceeding therefor may be brought.
Section 7.2. Governmental Approvals. The execution, delivery and
performance by the Parent, the Borrower and their respective Subsidiaries of
this Credit Agreement and the other Loan Documents to which it is party and the
transactions contemplated hereby and thereby do not require the approval or
consent of, or filing with, any governmental agency or authority which have not
been obtained except for those which
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the failure to obtain the same could reasonably be expected to have a Material
Adverse Effect.
Section 7.3. Title to Properties; Leases. Except as indicated on Schedule
7.3 hereto, the Borrower and each of its Subsidiaries own all of the assets
reflected in the consolidated balance sheets of RES, BarTech and the Acquired
Portions of USS/Kobe as at the RES Balance Sheet Date, the BarTech Balance Sheet
Date or the USS/Kobe Balance Sheet, respectively, or acquired since such dates
(except (i) property and assets sold or otherwise disposed of in the ordinary
course of business since that date or otherwise permitted hereunder and (ii)
minor defects in title that do not interfere with the Borrower's ability to
conduct its business or utilize such assets), subject to no rights of others,
including any mortgages, leases, conditional sales agreements, title retention
agreements, liens or other encumbrances except Permitted Liens.
Section 7.4. Financial Statements and Projections.
7.4.1. Financial Statements. There has been furnished to each of the
Banks consolidated balance sheets of RES, BarTech, and the Acquired
Portion of USS/Kobe as at, respectively, the RES Balance Sheet Date, the
BarTech Balance Sheet Date and the USS/Kobe Balance Sheet Date, and
consolidated statements of income of RES, BarTech, the Acquired Portion of
USS/Kobe and each of their respective Subsidiaries for the respective
fiscal years then ended, certified by the independent certified public
accountants of RES, BarTech or USS/Kobe, as applicable. Such balance
sheets and statements of income have been prepared in accordance with
generally accepted accounting principles and fairly present the financial
condition of RES, BarTech and the Acquired Portion of USS/Kobe as at the
close of business on such dates and the results of operations for the
fiscal years then ended. There are no contingent liabilities of RES,
BarTech, the Acquired Portion of USS/Kobe or any of their respective
Subsidiaries as of such date involving material amounts, known to the
officers of the Borrower, which were not disclosed in such balance sheets
and the notes related thereto.
7.4.2. Projections. The projections of the annual operating budgets
of the Borrower and its Subsidiaries on a consolidated basis, calculated
on a quarterly basis, including quarterly balance sheets, income
statements, borrowing base availability and cash flow statements for the
1999 through 2000 fiscal years and the annual operating budgets of the
Borrower and its Subsidiaries on a consolidated basis, annual balance
sheets, income statements and borrowing base availability and cash flow
statements for the 1999 through 2004 fiscal years have been delivered to
each Bank. To the knowledge of the Borrower or any of its Subsidiaries, no
facts exist that (individually or in the aggregate) would as of the
Effective Date, result in any material change in any of such projections.
The projections (including any updated projections) are based upon
reasonable estimates and assumptions, have been prepared on the basis of
the assumptions stated therein and reflect the reasonable estimates of the
Borrower and its Subsidiaries of the results of operations and other
information projected therein.
Section 7.5. No Material Changes, Etc. (A) Since the RES Balance Sheet
Date there has occurred no materially adverse change in the consolidated
financial condition or
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business of RES as shown on or reflected in the consolidated balance sheet of
RES as at the RES Balance Sheet Date, or the consolidated statement of income
for the fiscal year then ended, other than changes in the ordinary course of
business or contemplated herein that have not had any material adverse effect in
the aggregate on the business or financial condition of RES or any of its
Subsidiaries, taken as a whole. Since the RES Balance Sheet Date, except to the
extent permitted under this Credit Agreement and except as set forth on Schedule
7.5 hereto, RES has not made any Distribution. (B) Since the BarTech Balance
Sheet Date there has occurred no materially adverse change in the consolidated
financial condition or business of BarTech as shown on or reflected in the
consolidated balance sheet of BarTech at the BarTech Balance Sheet Date, or the
consolidated statement of income for the fiscal year then ended, other than
changes in the ordinary course of business or contemplated herein that have not
had any material adverse effect in the aggregate on the business or financial
condition of BarTech and its Subsidiaries, taken as a whole. Since the BarTech
Balance Sheet Date, except to the extent permitted under this Credit Agreement
and except as set forth on Schedule 7.5 hereto, BarTech has not made any
Distribution. (C) Since the USS/Kobe Balance Sheet Date there has occurred no
materially adverse change in the financial condition or business of the Acquired
Portions of USS/Kobe as shown on or reflected in the consolidated balance sheet
of USS/Kobe as at the USS/Kobe Balance Sheet Date, or the consolidated statement
of income for the fiscal year then ended, other than changes in the ordinary
course of business or contemplated herein that have not had any material adverse
effect in the aggregate on the business or financial condition of the Acquired
Portions of USS/Kobe. Since the Balance Sheet Date, except to the extent
permitted under this Credit Agreement and except as set forth on Schedule 7.5
hereto, USS/Kobe has not made any Distribution.
Section 7.6. Franchises, Patents, Copyrights, Etc. Each of the Borrower
and its Subsidiaries possesses all franchises, patents, copyrights, trademarks,
trade names, licenses and permits, and rights in respect of the foregoing,
adequate for the conduct of its business substantially as now conducted without
known conflict with any rights of others except where failure to do so would not
have a Material Adverse Effect.
Section 7.7. Litigation. Except as set forth in Schedule 7.7 hereto, there
are no actions, suits, proceedings or investigations of any kind pending or
threatened against the Borrower or any of its Subsidiaries before any court,
tribunal or administrative agency or board that would be reasonably likely to,
either in any case or in the aggregate, materially adversely affect the
properties, assets, financial condition or business of the Borrower and its
Subsidiaries, taken as a whole, or materially impair the right of the Borrower
and its Subsidiaries, taken as a whole, to carry on the business conducted by
them, or which question the validity of this Credit Agreement or any of the
other Loan Documents.
Section 7.8. No Materially Adverse Contracts, Etc. Neither the Borrower
nor any of its Subsidiaries is subject to any charter, corporate or other legal
restriction (including any legal restrictions created by any other
organizational document of the Borrower or any of its Subsidiaries), or any
judgment, decree, order, rule or regulation that has or is expected in the
future to have a materially adverse effect on the business, assets or
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financial condition of the Borrower or any of its Subsidiaries. Neither the
Borrower nor any of its Subsidiaries is a party to any contract or agreement
that has or is expected to have any materially adverse effect on the business of
the Borrower or any of its Subsidiaries.
Section 7.9. Compliance with Other Instruments, Laws, Etc. Neither the
Borrower nor any of its Subsidiaries is in violation of any provision of its
charter documents, bylaws, or any agreement or instrument to which it is subject
or by which it or any of its properties is bound or any decree, order, judgment,
statute, license, rule or regulation, in any of the foregoing cases in a manner
that would reasonably be expected to have a Material Adverse Effect.
Section 7.10. Tax Status. The Borrower and its Subsidiaries (a) have made
or filed all federal and state income and all other material tax returns,
reports and declarations required by any jurisdiction to which any of them is
subject, (b) have paid all material taxes and other governmental assessments and
charges shown or determined to be due on such returns, reports and declarations,
except those being contested in good faith and by appropriate proceedings or
those having an aggregate principal amount of $10,000,000 or less and (c) have
established on their books provisions reasonably adequate for the payment of all
material taxes for periods subsequent to the periods to which such returns,
reports or declarations apply. There are no unpaid taxes in any material amount
claimed to be due by the taxing authority of any jurisdiction, and the officers
of the Borrower know of no basis for any such claim.
Section 7.11. No Event of Default. No Default or Event of Default has
occurred and is continuing.
Section 7.12. Holding Company and Investment Company Acts. Neither the
Borrower nor any of its Subsidiaries is a "holding company", or a "subsidiary
company" of a "holding company", or an "affiliate" of a "holding company", as
such terms are defined in the Public Utility Holding Company Act of 1935; nor is
it an "investment company", or an "affiliated company" or a "principal
underwriter" of an "investment company", as such terms are defined in the
Investment Company Act of 1940.
Section 7.13. Absence of Financing Statements, Etc. Except with respect to
Permitted Liens and financing statements filed to give notice that the Borrower
holds certain raw materials on consignment from vendors or to give notice of
operating leases permitted under Section 9.1(f), there is no financing
statement, security agreement, chattel mortgage, real estate mortgage or other
document filed or recorded with any filing records, registry or other public
office, that purports to cover, affect or give notice of any present or possible
future lien on, or security interest in, any assets or property of the Borrower
or any rights relating thereto other than financing statements that have not yet
been released of record relating to Indebtedness that has been repaid in full.
Section 7.14. Perfection of Security Interest. All filings, assignments,
pledges and deposits of documents or instruments have been made and all other
actions have been taken that are necessary or advisable, under applicable law,
to establish and perfect the Agent's security interest in the Collateral. The
Collateral and the Agent's rights
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with respect to the Collateral are not subject to any setoff, claims,
withholdings or other defenses. The Borrower is the owner of the Collateral free
from any lien, security interest, encumbrance and any other claim or demand,
except for Permitted Liens.
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Section 7.15. [Intentionally Omitted]
Section 7.16. Employee Benefit Plans.
7.16.1. In General. Each Employee Benefit Plan and each Guaranteed
Pension Plan has been maintained and operated in compliance in all
material respects with the provisions of ERISA and, to the extent
applicable, the Code.
7.16.2. Guaranteed Pension Plans. Each contribution required to be
made to a Guaranteed Pension Plan, to avoid the notice or lien provisions
of Section 302(f) of ERISA, and each other contribution required to be
made to a Guaranteed Pension Plan to avoid a Material Adverse Effect, has
been timely made. No waiver of an accumulated funding deficiency or
extension of amortization periods has been received with respect to any
Guaranteed Pension Plan, and neither the Borrower nor any ERISA Affiliate
is obligated to or has posted security in connection with an amendment of
a Guaranteed Pension Plan pursuant to Section 307 of ERISA or Section
401(a)(29) of the Code, other than as would not be reasonably likely to
result in a Material Adverse Effect. No liability to the PBGC (other than
required insurance premiums, has been incurred by the Borrower or any
ERISA Affiliate with respect to any Guaranteed Pension Plan, other than as
would not be reasonably likely to result in a Material Adverse Effect and
there has not been any ERISA Reportable Event with respect to which the
requirement of thirty (30) days notice has not been waived, or any other
event or condition which presents a material risk of termination of any
Guaranteed Pension Plan by the PBGC. Based on the latest valuation of each
Guaranteed Pension Plan (which in each case occurred within twelve months
of the date of this representation), and on the actuarial methods and
assumptions employed for that valuation, the aggregate present value of
accumulated benefits of all such Guaranteed Pension Plans did not exceed
the aggregate value of the assets of all such Guaranteed Pension Plans,
disregarding for this purpose the accumulated benefits and assets of any
Guaranteed Pension Plan with assets in excess of accumulated benefits, by
more than an amount reasonably likely to result in a Material Adverse
Effect.
7.16.3. Multiemployer Plans. Neither the Borrower nor any ERISA
Affiliate has incurred any unsatisfied liability (including secondary
liability) to any Multiemployer Plan as a result of a complete or partial
withdrawal from such Multiemployer Plan under Section 4201 of ERISA or as
a result of a sale of assets described in Section 4204 of ERISA other than
such amounts of liability as in aggregate would not be reasonably likely
to result in a Material Adverse Effect. Neither the Borrower nor any ERISA
Affiliate has been notified that any Multiemployer Plan is in
reorganization or insolvent under and within the meaning of Section 4241
or Section 4245 of ERISA or is at risk of entering reorganization or
becoming insolvent, or that any Multiemployer Plan intends to terminate or
has been terminated under Section 4041A of ERISA other than as would not
be reasonably likely to result in a Material Adverse Effect.
Section 7.17. Regulations U and X. The proceeds of the Revolving Credit
Loans shall be used for, and the Borrower will obtain Letters of Credit solely
for, working capital
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and general corporate purposes. No portion of any Revolving Credit Loan is to be
used, and no portion of any Letter of Credit is to be obtained, for the purpose
of purchasing or carrying any "margin security" or "margin stock" as such terms
are used in Regulations U and X of the Board of Governors of the Federal Reserve
System, 12 C.F.R. Parts 221 and 224.
Section 7.18. Environmental Compliance. Except as previously disclosed to
the Banks in writing or as set forth on Schedule 7.18 attached hereto, to the
knowledge of the Borrower:
(a) none of the Borrower, its Subsidiaries or any operator of the Real
Estate or any operations thereon has received a notice that it is in violation
of any applicable Environmental Law, which includes the Resource Conservation
and Recovery Act ("RCRA"), the Comprehensive Environmental Response,
Compensation and Liability Act of 1980 as amended ("CERCLA"), the Superfund
Amendments and Reauthorization Act of 1986 ("XXXX"), the Federal Clean Water
Act, the Federal Clean Air Act, the Toxic Substances Control Act, and any
analogous state or local statute, regulation, ordinance, or order or decree
(including, without limitation, the Corrective Action Order entered into under
RCRA on June 16, 1999 between the EPA and RES relating to RES's facilities in
Canton, Ohio) to which the Borrower or any of its Subsidiaries is a party
relating to health, safety (as relating to the environment or Hazardous
Substances) or the environment (hereinafter "Environmental Laws"), which
violation would have a Material Adverse Effect;
(b) neither the Borrower nor any of its Subsidiaries has received notice
from any third party including, without limitation: any federal, state or local
governmental authority, (i) that any one of them has been identified by the
United States Environmental Protection Agency ("EPA") as a potentially
responsible party under CERCLA with respect to a site listed on the National
Priorities List, 40 C.F.R. Part 000 Xxxxxxxx X; (ii) that any hazardous waste,
as defined by 42 U.S.C. Section 6903(5), any hazardous substances as defined by
42 U.S.C. Section 9601(14), any pollutant or contaminant as defined by 42 U.S.C.
Section 9601(33) and any toxic substances, oil or hazardous materials or other
chemicals or substances regulated by any Environmental Laws ("Hazardous
Substances") which any one of them has generated, transported or disposed of has
been found at any site at which a federal, state or local agency or other third
party has conducted or has ordered that any Borrower or any of its Subsidiaries
conduct a remedial investigation, removal or other response action pursuant to
any Environmental Law which would result in expenditures in excess of
$5,000,000; or (iii) that it is or shall be a named party to any claim, action,
cause of action, complaint, or legal or administrative proceeding (in each case,
contingent or otherwise) arising out of any third party's incurrence of costs,
expenses, losses or damages of any kind whatsoever in connection with the
release of Hazardous Substances on the Real Estate or generated, transported or
disposed of by the Borrower or any of its Subsidiaries which would result in
expenditures in excess of $5,000,000;
(c) except where non-compliance would not have a Material Adverse Effect,
(i) no portion of the Real Estate has been used by the Borrower or any of its
Subsidiaries for the handling, processing, storage or disposal of Hazardous
Substances
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except in compliance with applicable Environmental Laws; and no underground tank
or other underground storage receptacle for Hazardous Substances is located on
any portion of the Real Estate; (ii) in the course of any activities conducted
by the Borrower, its Subsidiaries or operators of its properties, no Hazardous
Substances have been discharged, emitted, generated or used except in accordance
with applicable Environmental Laws; (iii) in addition, to the extent required by
applicable Environmental Law, any Hazardous Substances that have been
transported from the Real Estate have been transported offsite only by carriers
having an identification number issued by the EPA, treated or disposed of only
by treatment or disposal facilities maintaining valid permits as required under
applicable Environmental Laws, which transporters and facilities have been and
are, to the best of the Borrower's knowledge, operating in compliance with such
permits and applicable Environmental Laws; (iv) there have been no releases
(i.e., any past or present releasing, spilling, leaking, pumping, pouring,
emitting, emptying, discharging, injecting, escaping, disposing or dumping) or
threatened releases of Hazardous Substances on, upon, into or from the
properties of the Borrower or its Subsidiaries, which releases would have a
material adverse effect on the value of the Real Estate or adjacent properties
or the environment; and (v) to the best of Borrower's knowledge, there have been
no releases on, upon, from or into any real property in the vicinity of any of
the Real Estate which, through soil or groundwater contamination, may have come
to be located on, and which would have a material adverse effect on the value
of, the Real Estate; and
(d) none of the Borrower and its Subsidiaries nor any of the Real Estate
is subject to any applicable environmental law requiring the performance of
Hazardous Substances site assessments or the removal or remediation of Hazardous
Substances, or the giving of notice to any governmental agency or the recording
or delivery to other Persons of an environmental disclosure document or
statement by virtue of the transactions set forth herein and contemplated
hereby.
Section 7.19. Subsidiaries, Etc. RTI Capital., Nimishillen & Tuscarawas,
LLC, Bliss & Xxxxxxxx, LLC, Canadian Drawn Steel Company Inc. and the Oberlin
Insurance Company are the only Subsidiaries of the Borrower on the Effective
Date. Except as set forth on Schedule 7.19 hereto, neither the Borrower nor any
Subsidiary of the Borrower is engaged in any joint venture or partnership with
any other Person on the Effective Date.
Section 7.20. Bank Accounts. Schedule 7.20 sets forth the account numbers
and location of all bank accounts of the Borrower or any of its Subsidiaries.
Section 7.21. Fiscal Year. The Borrower has a fiscal year which ends on
December 31 in each year.
Section 7.22. Disclosure. No representation or warranty made by the
Borrower in any of the Loan Documents or any agreement, instrument, document,
certificate or letter furnished by or on behalf of the Borrower pursuant to any
Loan Document or in connection with any of the transactions contemplated thereby
when taken as a whole with all other such representations and warranties
contains any untrue statement of any material fact or omits to state any
material fact necessary in order to make the
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statement contained therein not misleading. There is no fact known to the
Borrower (excluding general industry, economic and political conditions) which
materially adversely affects, or which could reasonably be expected to
materially adversely affect in the reasonable foreseeable future the financial
condition, business, operations, or affairs or the Borrower, which has not been
disclosed in writing to the Agent.
Section 7.23. Year 2000 Problem. The Borrower and its Subsidiaries have
(i) reviewed the areas within their businesses and operations which could be
adversely affected by failure to become "Year 2000 Compliant" (i.e. that
computer applications, imbedded microchips and other systems used by the
Borrower or any of its Subsidiaries or any of its material vendors, will be able
properly to recognize and perform properly date-sensitive functions involving
certain dates prior to and any date after December 31, 1999), (ii) developed a
detailed plan and timetable to become Year 2000 Compliant in a timely manner,
and (iii) committed adequate resources to support the Year 2000 plan of the
Borrower and its Subsidiaries. Based upon such review, the Borrower reasonably
believes that the Borrower and its Subsidiaries will become "Year 2000
Compliant" in a timely manner except to the extent that failure to do so will
not have any materially adverse effect on the business or financial condition of
the Borrower or any of its Subsidiaries.
Section 7.24. Ownership of Assets of Constituent Companies. The Borrower
owns all of the assets and business of RES, BarTech and the Acquired Portions of
USS/Kobe and each of their respective Subsidiaries that were owned by such
Persons immediately prior to the Restructuring except those assets and
businesses listed on Schedule 7.24 hereto.
Section 7.25. Ineligible Securities. No portion of the proceeds of any
Revolving Credit Loans is to be used, and no portion of any Letter of Credit is
to be obtained, for the purpose of knowingly purchasing, or providing credit
support for the purchase of, during the underwriting or placement period or
within 30 days thereafter, any Ineligible Securities underwritten or privately
placed by a Section 20 Subsidiary.
Section 8. AFFIRMATIVE COVENANTS OF THE BORROWER. The Borrower covenants
and agrees that, so long as any Revolving Credit Loan, Letter of Credit or
Revolving Credit Note is outstanding or any Bank has any obligation to make any
Revolving Credit Loans or the Agent has any obligation to issue, extend or renew
any Letters of Credit:
Section 8.1. Punctual Payment. The Borrower will duly and punctually pay
or cause to be paid the principal and interest on the Revolving Credit Loans,
all Reimbursement Obligations, the Letter of Credit Fees, the commitment fees,
the Agent's fee and all other amounts provided for in this Credit Agreement and
the other Loan Documents, all in accordance with the terms of this Credit
Agreement and such other Loan Documents.
Section 8.2. Maintenance of Office. The Borrower will maintain its chief
executive office in 0000 Xxxxxxx Xxxxxxx, Xxxxx, XX 00000, or at such other
place in the United States of America as the Borrower shall designate upon
written notice to the
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Agent, where notices, presentations and demands to or upon the Borrower in
respect of the Loan Documents to which the Borrower is a party may be given or
made.
Section 8.3. Records and Accounts. The Borrower will (a) keep, and cause
each of its Subsidiaries to keep, true and accurate records and books of account
in which full, true and correct entries will be made in accordance with
generally accepted accounting principles and (b) maintain adequate accounts and
reserves for all taxes (including income taxes), depreciation, depletion,
obsolescence and amortization of its properties and the properties of its
Subsidiaries, contingencies, and other reserves.
Section 8.4. Financial Statements, Certificates and Information. The
Borrower will deliver to each of the Banks:
(a) as soon as practicable, but in any event not later than ninety (90)
days after the end of each fiscal year (or portion thereof) of the Borrower, the
consolidated balance sheet of the Borrower and its Subsidiaries and the
consolidating balance sheet of the Borrower and its Subsidiaries, each as at the
end of such year, and the related consolidated statement of income and retained
earnings and consolidated statement of cash flow and consolidating statement of
income and retained earnings and consolidating statement of cash flow for such
year, each setting forth in comparative form the figures set forth in the
projections delivered pursuant to Section 7.4.2 (or, if updated, pursuant to
Section 8.4(k)) for the comparable period and, to the extent available, those
figures for the previous fiscal year and all such consolidated and consolidating
statements to be in reasonable detail, prepared in accordance with generally
accepted accounting principles, and, with respect to the consolidated financial
statements, certified without qualification (except for qualification for a
change in accounting principles with which the independent public accountant
concurs) by a nationally recognized firm of independent certified public
accountants satisfactory to the Agent, together with a written statement from
such accountants to the effect that they have read a copy of this Credit
Agreement, and that, in making the examination necessary to said certification,
they have obtained no knowledge of any Default or Event of Default, or, if such
accountants shall have obtained knowledge of any then existing Default or Event
of Default they shall disclose in such statement any such Default or Event of
Default; provided that such accountants shall not be liable to the Banks for
failure to obtain knowledge of any Default or Event of Default;
(b) as soon as practicable, but in any event not later than forty-five
(45) days after the end of each of the fiscal quarters of the Borrower, copies
of the unaudited consolidated balance sheet of the Borrower and its Subsidiaries
as at the end of such quarter, and the related consolidated statement of income
and retained earnings and consolidated statement of cash flow for the portion of
the Borrower's fiscal year then elapsed, each setting forth in comparative form
the figures set forth in the projections delivered pursuant to Section 7.4.2
(or, if updated, pursuant to Section 8.4(k)) for the comparable period and, to
the extent available, those figures for the comparable period in the preceding
fiscal year, all in reasonable detail and prepared in accordance with generally
accepted accounting principles, together with a certification by the treasurer
or other authorized financial officer of the Borrower that the information
contained in such financial statements fairly presents the financial position of
the Borrower and its Subsidiaries on the date thereof (subject to year-end
adjustments and the exclusion of footnotes) provided that the
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financial statements for the fiscal quarter ending September 30, 1999 shall be
accompanied by information relating to the period following the Effective Date
reasonably satisfactory to the Co-Agents;
(c) (i) as soon as practicable, but in any event within thirty (30) days
after the end of each month commencing with September, 1999, in each fiscal year
of the Borrower, copies of the unaudited monthly consolidated balance sheet of
the Borrower and its Subsidiaries for such month, and the related consolidated
statement of income and retained earnings and consolidated statement of cash
flow for the portion of the Borrower's fiscal year then elapsed, each setting
forth in comparative form the figures set forth in the projections delivered
pursuant to Section 7.4.2 (or, if updated, pursuant to Section 8.4(k)) for the
comparable period and, to the extent available, those figures for the comparable
period in the preceding fiscal year, all in reasonable detail and prepared in
accordance with generally accepted accounting principles, together with a
certification by the treasurer or other authorized financial officer of the
Borrower that the information contained in such financial statements fairly
presents the financial condition of the Borrower and its Subsidiaries on the
date thereof (subject to year-end adjustments and the exclusion of footnotes),
and (ii) for the month of August, 1999 as soon as practicable but in any event
within thirty (30) days after the end of such month, copies of the production
statistics and such other financial information, if any, as is prepared by the
Borrower for delivery to its other lenders or equity holders of the Borrower and
its Subsidiaries for such period;
(d) simultaneously with the delivery of the financial statements referred
to in subsections (a) and (b) above, a statement certified by the treasurer or
other authorized financial officer of the Borrower in substantially the form of
Exhibit D hereto (the "Compliance Certificate") and setting forth in reasonable
detail computations evidencing compliance with the covenants contained in
Section 10 and (if applicable) (i) reconciliations to reflect changes in
generally accepted accounting principles since the RES Balance Sheet Date, and
(ii) reconciliations to generally accepted accounting principles of any amounts
shown on a marked to market basis, and on a quarterly basis, a report in form
and substance reasonably satisfactory to the Agent, on the status of
environmental matters affecting the Borrower, including any material changes in
remedial activity requested by any governmental agency or authority and the
impact, if any, of such changes on the budget for the year delivered pursuant to
subsection (h) below;
(e) simultaneously with delivery of the financial statements referred to
in subsections (a) and (b), a certificate, executed by the treasurer or other
authorized financial officer of the Borrower, stating that such officer has
caused this Credit Agreement to be reviewed and has no knowledge of any material
default by the Borrower in the performance or observance of any of the
provisions of this Credit Agreement, during the applicable quarter or at the end
of the applicable year, or, if such officer has such knowledge, specifying each
default and the nature thereof;
(f) promptly upon receipt thereof, copies of all final management letters
of substance and other material reports of substance which are submitted to the
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Borrower by its independent accountants in connection with any annual or interim
audit of the books of the Borrower made by such accountants;
(g) as soon as practicable but, in any event, within ten (10) Business
Days after the issuance thereof, copies of such other financial statements and
reports as the Borrower shall send to its stockholders as such, and copies of
all regular and periodic reports which the Borrower may be required to file with
the Securities and Exchange Commission or any similar or corresponding
governmental commission, department or agency substituted therefor, or any
similar or corresponding governmental commission, department, board, bureau, or
agency, federal or state;
(h) within thirty (30) days after the first day of each fiscal year of the
Borrower, its budget, including quarterly balance sheets, income statements,
borrowing base availability and cash flow statements for the Borrower and its
Subsidiaries for such fiscal year prepared by the Borrower for its Board of
Directors or similar authority, which shall include detail by quarter and shall
include projected spending for such year relating to Capital Expenditures,
including with respect to environmental matters affecting the Borrower;
(i) on Wednesday of each week or at such earlier time as the Agent may
reasonably request, or, if an Event of Default shall have occurred and be
continuing or upon the request of the Agent, on a daily basis, a Borrowing Base
Report setting forth the Borrowing Base as at the end of the preceding week or
the preceding day, as the case may be;
(j) within twenty (20) days after the end of each calendar month, an
Accounts Receivable aging report, a Borrowing Base Report setting forth the
Borrowing Base as at the end of the preceding month, reconciliations and an
inventory report;
(k) simultaneously with delivery of each annual budget pursuant to Section
8.4(h) and from time to time upon request of the Agent, projections of the
Borrower and its Subsidiaries (including, without limitation, as to availability
of the Revolving Credit Loans) updating those projections delivered to the Banks
and referred to in Section 7.4.2 or, if applicable, updating any later such
projections delivered pursuant to this Section 8.4(k);
(l) from time to time such other financial data and information (including
accountants and management letters) as the Agent or any Bank may reasonably
request;
(m) as soon as practicable, but in any event not later than 45 days after
notice by the Agent made after determining in its discretion that an appraisal
or reappraisal of the value of the Canton Cast-Roll Facility or Eligible
Inventory of the Borrower or any Subsidiary of the Borrower is necessary to
ensure the accuracy of the Borrowing Base, an appraisal or reappraisal, as the
case may be, of the value of the Canton Cast-Roll Facility or Eligible
Inventory, which appraisal or reappraisal shall be conducted by the Agent or its
designee at the expense of the Borrower or such Subsidiary by an appraiser
retained by the Agent in form and substance satisfactory to the Agent, provided
that Eligible Fixed Assets shall not be adjusted as a result of any
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such appraisal before March 31, 2001, provided further, that, in the absence of
an Event of Default or a reasonable belief on the part of the Agent that the
value of the Canton Cast-Roll Facility has materially changed, no more than one
appraisal of the Canton Cast-Roll Facility shall be required before March 31,
2001 and no more than one appraisal of the Canton Cast-Roll Facility shall be
required during any period of twelve months beginning on April 1 and ending on
March 31 thereafter; and
(n) not later than September 30, 1999, the consolidated financial
statements of each of RES, BarTech and USS/Kobe for the period ended June 30,
1999, in each case in reasonable detail and prepared in accordance with
generally accepted accounting principles, evidencing that the combined EBITDA of
RES, BarTech and USS/Kobe for the period of three (3) consecutive fiscal months
ended on June 30, 1999, was at least $15,000,000, together with such
reconciliations as are necessary to reflect any changes in such EBITDA from the
EBITDA certified pursuant to Section 11.16.
Section 8.5. Notices.
8.5.1. Defaults. The Borrower will promptly notify the Agent and
each of the Banks in writing of the occurrence of any Default or Event of
Default. If any Person shall give any notice or take any other action in
respect of a claimed default (whether or not constituting an Event of
Default) under this Credit Agreement or any other note, evidence of
indebtedness, indenture or other obligation, the amount of which is in
excess of $2,500,000, to which or with respect to which the Borrower or
any of its Subsidiaries is a party or obligor, whether as principal,
guarantor, surety or otherwise, the Borrower shall forthwith give written
notice thereof to the Agent and each of the Banks, describing the notice
or action and the nature of the claimed default.
8.5.2. Environmental Events. The Borrower will promptly give written
notice to the Agent and each of the Banks (i) of any violation of any
Environmental Law that the Borrower or any of its Subsidiaries reports in
writing or is reportable by the Borrower or any of its Subsidiaries in
writing (or for which any written report supplement to any oral report is
made) to any federal, state or local environmental agency and (ii) upon
becoming aware thereof of any inquiry, proceeding, investigation, or
notice of violation, or order from any agency of potential environmental
liability, or any federal, state or local environmental agency or board,
that, in the case of either (i) or (ii) above, would reasonably be
expected to materially adversely affect the assets, liabilities, financial
conditions or operations of the Borrower and its Subsidiaries, taken as a
whole, or the Agent's security interests pursuant to the Security
Documents.
8.5.3. Notification of Claim against Collateral. The Borrower will,
immediately upon becoming aware thereof, notify the Agent and each of the
Banks in writing of any setoff, claims (including, with respect to the
Real Estate, environmental claims in excess of $1,500,000), withholdings
or other defenses to which any of the Collateral, or the Agent's rights
with respect to the Collateral, are subject.
8.5.4. Notice of Litigation and Judgments. The Borrower will, and
will cause each of its Subsidiaries to, give notice to the Agent and each
of the Banks in
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writing within fifteen (15) days of becoming aware of any litigation or
proceedings threatened in writing or any pending litigation and
proceedings affecting the Borrower or any of its Subsidiaries or to which
the Borrower or any of its Subsidiaries is or becomes a party involving an
uninsured claim against the Borrower or any of its Subsidiaries that could
reasonably be expected to have a materially adverse effect on the Borrower
or any of its Subsidiaries and stating the nature and status of such
litigation or proceedings. The Borrower will, and will cause each of its
Subsidiaries to, give notice to the Agent and each of the Banks, in
writing, in form and detail satisfactory to the Agent, within twenty (20)
days of any judgment not covered by insurance, final or otherwise, against
the Borrower or any of its Subsidiaries in an amount in excess of
$2,500,000.
8.5.5. Notices Concerning Inventory Collateral. The Borrower shall
provide to the Agent prompt notice of (i) any physical count of the
Borrower's or any of its Subsidiaries' inventory, together with a copy of
the results thereof certified by the Borrower or such Subsidiary, (ii) any
determination by the Borrower or any of its Subsidiaries that the
inventory levels of the Borrower or such Subsidiary are not adequate to
meet the sales projections of the Borrower or such Subsidiary, and (iii)
any failure of the Borrower or any of its Subsidiaries to pay rent at any
location, which failure continues for more than five days following the
day on which such rent is due and payable by the Borrower or such
Subsidiary. If so requested by the Agent or any Bank, the Borrower shall
provide to the Agent or such Bank copies of all advertising by the
Borrower or any of its Subsidiaries including copies of all print
advertising and duplicate tapes of all video and radio advertising.
Section 8.6. Existence; Maintenance of Properties. Except as otherwise
permitted by Section 9.5 or Section 9.6, the Borrower will do or cause to be
done all things necessary to preserve and keep in full force and effect its
limited liability company existence and material rights and franchises and the
corporate or limited liability company existence and material rights and
franchises of its Subsidiaries. It (a) will cause all of its properties and
those of its Subsidiaries material to the conduct of its business or the
business of its Subsidiaries to be maintained and kept in good condition, repair
and working order and supplied with all necessary equipment (ordinary wear and
tear excepted), (b) will cause to be made all necessary repairs, renewals,
replacements, betterments and improvements thereof, all as in the judgment of
the Borrower may be necessary so that the business carried on in connection
therewith may be properly and advantageously conducted at all times, and (c)
will, and will cause each of its Subsidiaries to, continue to engage primarily
in the businesses now conducted by them and in related businesses; provided that
nothing in this Section 8.6 shall prevent the Borrower from discontinuing the
operation and maintenance of any of its properties or any of those of its
Subsidiaries if such discontinuance is, in the judgment of the Borrower,
desirable in the conduct of its or their business and that do not in the
aggregate materially adversely affect the business of the Borrower and its
Subsidiaries on a consolidated basis.
Section 8.7. Insurance.
(a) The Borrower will and will cause each of its Subsidiaries to maintain
with an insurer rated B+ or better by A.M. Best, insurance with respect to its
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properties and business against such casualties and contingencies as shall be in
accordance with sound business practices of businesses engaged in similar
activities in similar geographic areas. Such insurance shall be in such minimum
amounts that the Borrower will not be deemed a co-insurer under applicable
insurance laws, regulations and policies and otherwise shall be in such amounts,
contain such terms, be in such forms and be for such periods as may be
reasonably satisfactory to the Agent. In addition, all insurance (except third
party liability insurance) insuring any of the Collateral and the interruption
of the business of the Borrower shall be payable to the Agent (subject to the
rights of other creditors to receive such business interruption insurance as
provided for below) as a loss payee under a standard loss payee clause for the
benefit of the Banks and the Agent and shall designate the Agent as an
additional insured, as applicable. With respect to the business interruption
insurance maintained by the Borrower, in the event of a loss and during the
continuance of an Event of Default (or other occurrence that would give rise to
the right of the Agent, the Pennsylvania Lenders or the Trustee to payment of
such proceeds) all proceeds thereof shall be paid on a pro rata basis to the
Agent, the Pennsylvania Lenders and the Trustee as co-loss payees and allocated
based upon the ratio, the numerator of which shall be equal to (i) the
outstanding amount of the Obligations, with respect to the Agent and the Banks,
(ii) the outstanding amount of the Indebtedness of the Borrower in respect of
the Pennsylvania Indebtedness, with respect to the Pennsylvania Lenders and
(iii) the outstanding amount of the Indebtedness of the Borrower in respect of
the Notes, with respect to the Trustee, and the denominator of which shall be
equal to the sum of the Obligations plus the outstanding amount of Pennsylvania
Indebtedness plus the outstanding amount of Indebtedness of the Borrower in
respect of the Notes, in each case determined as of the date of such payment.
Without limiting the foregoing, the Borrower will, and will cause each of its
Subsidiaries to, (i) keep all of its physical property insured with casualty or
physical hazard insurance on an "all risks" basis, with broad form flood and
earthquake coverages and electronic data processing coverage, with a full
replacement cost endorsement and an "agreed amount" clause in an amount equal to
100% of the full replacement cost of such property exclusive of deductibles and
self insurance in amounts not greater than those generally maintained by
businesses engaged in similar activities in similar geographic areas, (ii)
maintain all such workers' compensation or similar insurance or self-insurance
as may be required by law, and (iii) maintain, in amounts and with deductibles
or retentions equal to those generally maintained by businesses engaged in
similar activities in similar geographic areas, general public liability
insurance against claims for bodily injury, death or property damage occurring
on, in or about the properties of the Borrower or its Subsidiaries, business
interruption insurance and product liability insurance. The Borrower will, and
will cause any applicable Subsidiary to, maintain insurance on the Mortgaged
Property in accordance with the terms of the Mortgage.
(b) The proceeds of any casualty insurance in respect of any casualty loss
of any of the Collateral shall, subject to the rights, if any, of other parties
with a prior interest in the property covered thereby, (i) so long as no Default
or Event of Default has occurred and is continuing and to the extent that the
amount of such proceeds is less than $1,000,000, be disbursed to the Borrower
for direct application by the Borrower solely to the repair or replacement of
the Borrower's property so damaged or destroyed or for the purchase of other
similar properties and (ii) in all other
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circumstances, be held by the Agent as cash collateral for the Obligations,
provided, that if such insurance is in respect of any casualty loss of any
Collateral consisting of the Canton Cast-Roll Facility, such proceeds shall be
applied or reinvested in the manner provided in Section 3.2(b)(iii). The Agent
may, at its sole option, disburse from time to time all or any part of such
proceeds so held as cash collateral, upon such terms and conditions as the Agent
may reasonably prescribe, for direct application by the Borrower solely to the
repair or replacement of the Borrower's property so damaged or destroyed or for
the purchase of other similar properties, or the Agent may apply all or any part
of such proceeds to the Obligations, provided, that if such proceeds are in
respect of any casualty loss of any Collateral consisting of the Canton
Cast-Roll Facility, such proceeds shall be applied or reinvested in the manner
provided in Section 3.2(b)(iii).
(c) All policies of insurance shall provide for thirty (30) days prior
written minimum cancellation notice to the Agent. In the event of failure to
provide and maintain insurance as herein provided, the Agent may, at its option,
after giving notice to the Borrower provide such insurance and charge the amount
thereof to the Borrower. The Borrower shall furnish to the Agent certificates or
other evidence satisfactory to the Agent of compliance with the foregoing
insurance provision.
Section 8.8. Taxes, Etc. The Borrower will, and will cause each of its
Subsidiaries to, duly pay and discharge, or cause to be paid and discharged,
before the same shall become overdue, all material taxes, assessments and other
governmental charges imposed upon it and its real properties, sales and
activities, or any part thereof, or upon the income or profits therefrom, as
well as all claims for labor, materials, or supplies that if unpaid might by law
become a lien or charge upon any of its property; provided that any such tax,
assessment, charge, levy or claim need not be paid if the validity or amount
thereof shall currently be contested in good faith by appropriate proceedings
and if the Borrower or such Subsidiary shall have established on its books
adequate reserves with respect thereto; and provided further that the Borrower
and each Subsidiary of the Borrower will pay all such taxes, assessments,
charges, levies or claims forthwith upon the commencement of proceedings to
foreclose any lien that may have attached as security therefor unless the
Borrower has obtained a stay of such proceedings which remains in effect.
Section 8.9. Inspection of Properties and Books, Etc.
8.9.1. General. The Borrower shall permit the Banks, through the
Agent or any of the Banks' other designated representatives, to visit and
inspect any of the properties of the Borrower or any of its Subsidiaries,
to examine the books of account of the Borrower and its Subsidiaries (and
to make copies thereof and extracts therefrom), and to discuss the
affairs, finances and accounts of the Borrower and its Subsidiaries with,
and to be advised as to the same by, its and their officers, all at such
reasonable times and intervals as the Agent or any Bank may reasonably
request. The Agent and the Banks will, to the extent practicable, exercise
their rights under this Section 8.9.1 in a manner which causes no material
disruption of the Borrower's operations. Each of the Agent and the Banks
agrees that it will treat in confidence all financial information with
respect to the Borrower and its Subsidiaries, and all information obtained
during such inspection which is
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designated by the Borrower as confidential and will not, without the
consent of the Borrower, disclose such information to any third party and,
if any representative or agent of the Agent or the Bank shall not be an
employee of the Agent or such Bank or any affiliate of the Agent or such
Bank, such designee shall be reputable and of recognized standing and
shall agree in writing to treat in confidence the information obtained
during any such inspection and, without the prior written consent of the
Borrower, not to disclose such information to any third party or make use
of such information for personal gain. Notwithstanding the foregoing, the
Borrower hereby authorizes the Agent and each Bank to disclose information
obtained pursuant to this Credit Agreement to other banks or financial
institutions who are participants in the Revolving Credit Loans and
Letters of Credit made or issued or to be made or issued hereunder and to
potential participants with the consent of the Borrower, such consent not
to be unreasonably withheld; provided that such participant or potential
participant agrees to be bound by the confidentiality provisions of this
Section 8.9.1, and where required or requested by governmental or
regulatory authorities.
8.9.2. Commercial Finance Examinations. The Borrower will permit the
Agent's examiners and, if accompanied by the Agent or its examiners, a
Bank's examiners, from time to time, to conduct, at the Borrower's
reasonable expense, commercial finance examinations of the Borrower and
its Subsidiaries.
8.9.3. Communications with Accountants. The Borrower authorizes the
Agent and, if accompanied by the Agent, the Banks to communicate with the
Borrower's independent certified public accountants and authorizes such
accountants to disclose to the Agent and the Banks any and all financial
statements and other supporting financial documents and schedules
including copies of any management letter with respect to the business,
financial condition and other affairs of the Borrower or any of its
Subsidiaries. At the request of the Agent, the Borrower shall deliver a
letter addressed to such accountants instructing them to comply with the
provisions of this Section 8.9.3.
8.9.4. Environmental Assessments. Whether or not an Event of Default
shall have occurred and be continuing, the Agent may, from time to time,
in its reasonable discretion for the purpose of assessing and ensuring the
value of the Mortgaged Property, obtain one or more environmental
assessments or audits of reasonable scope and expense of the Mortgaged
Property prepared by a hydrogeologist, an independent engineer or other
qualified consultant or expert retained by the Agent to evaluate or
confirm (i) whether any Hazardous Substances are present in the soil or
water at the Mortgaged Property and (ii) whether the use and operation of
such Mortgaged Property materially complies with all Environmental Laws.
Environmental assessments may include without limitation detailed visual
inspections of the Mortgaged Property including any and all storage areas,
storage tanks, drains, dry xxxxx and leaching areas, and the taking of
soil samples, surface water samples and ground water samples, as well as
such other investigations or analyses as the Agent reasonably deems
appropriate. All such environmental assessments shall be conducted and
made at the expense of the Borrower.
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Section 8.10. Compliance with Laws, Contracts, Licenses, and Permits. The
Borrower will, and will cause each of its Subsidiaries to, comply with (a) the
applicable laws and regulations wherever its business is conducted, including
all Environmental Laws, except where failure to do so will not have a Material
Adverse Effect, (b) the provisions of its charter documents and by-laws, and all
agreements and instruments by which it or any of its properties may be bound,
except where failure to do so will not have a Material Adverse Effect, and (c)
all applicable decrees, orders, and judgments, except where failure to do so
will not have a Material Adverse Effect . If any authorization, consent,
approval, permit or license from any officer, agency or instrumentality of any
government shall become necessary or required in order that the Borrower may
fulfill any of its obligations hereunder or any of the other Loan Documents, the
Borrower will promptly take or cause to be taken all reasonable steps within the
power of the Borrower to obtain such authorization, consent, approval, permit or
license and furnish the Agent and the Banks with evidence thereof.
Section 8.11. Employee Benefit Plans. The Borrower will (a) promptly upon
request of the Agent, furnish to the Agent a copy of the most recent actuarial
statement required to be submitted under Section 103(d) of ERISA and Annual
Report, Form 5500, with all required attachments, in respect of each Guaranteed
Pension Plan with unfunded benefit liabilities in excess of $2,500,000 and (b)
promptly upon receipt or dispatch, furnish to the Agent any notice, report or
demand sent or received in respect of a Guaranteed Pension Plan with unfunded
benefit liabilities in excess of $2,500,000 under Sections 302, 4041,
4042, 4043, 4063, 4066 and 4068 of ERISA, or in respect of a Multiemployer Plan,
under Sections 4041A, 4202, 4219, 4242, or 4245 of ERISA.
Section 8.12. Use of Proceeds. The Borrower will use the proceeds of the
Revolving Credit Loans, and will obtain Letters of Credit, solely to repay
existing indebtedness, to finance working capital and for general corporate
purposes.
Section 8.13. Bank Accounts; Agency Account Arrangements.
Section 8.13.1. Bank Accounts. Commencing on or prior to the Sweep
Deadline, the Borrower shall, and shall cause each of its Subsidiaries to,
require all account debtors to make payments to the Swept Lockboxes or
Swept Accounts. The Borrower shall maintain lockbox agreements, in form
and substance reasonably satisfactory to the Agent, with the Blocked
Account Banks which maintain Swept Lockboxes, pursuant to which lockbox
agreements all checks, drafts or other items or amounts in such Swept
Lockboxes shall be deposited by such Blocked Account Bank in the Swept
Accounts maintained by such Blocked Account Bank. The Borrower shall, and
shall cause each of its Subsidiaries to, together with the employees,
agents and other Persons acting on behalf of the Borrower or any such
Subsidiary, receive and hold in trust for the Agent and the Banks all
payments constituting proceeds of Accounts Receivable or other Collateral
which, notwithstanding the foregoing, come into their possession or under
their control and, immediately upon receipt thereof, deposit such payments
in the form received, with any appropriate endorsements, in one of the
Swept Accounts.
Section 8.13.2. Agency Account Arrangements.
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(a) On or before the Sweep Deadline, the Borrower will, and will
cause each of its Subsidiaries to, execute and deliver to the Agent for
the benefit of the Agent and the Banks, Agency Agreements in form and
substance reasonably acceptable to the Agent (collectively, the "Agency
Agreements") executed by the Borrower and its Subsidiaries and the
financial institution (each a "Blocked Account Bank") with which the
Borrower or its Subsidiaries maintain any Swept Accounts or other accounts
with respect to which the Agent may determine that the execution of a
Agency Agreement is advisable (collectively, together with the Swept
Accounts, the "Blocked Accounts") simultaneously with the opening of such
Blocked Account. The Agent shall be granted a security interest by the
Borrower and each of its Subsidiaries in all Blocked Accounts. No Agency
Agreement may be modified or amended without the prior written consent of
the Agent.
(b) The Borrower expressly agrees that (i) following notice to the
Blocked Account Banks of the existence and continuance of a Default or an
Event of Default the Agent may at anytime require that, from and after the
date specified in such notice, all monies deposited in the Blocked
Accounts be transferred on a daily basis to the Concentration Account,
which monies shall be credited against Obligations (or such monies shall
be applied directly to pay down the Obligations without such monies being
transferred first to such the Concentration Account) and (ii) in the event
such transfer is required, upon the request of the Agent, the Borrower
will take any steps necessary, to effect such transfer, including, without
limitation, the execution and delivery of amendments to each of the Agency
Agreements. From time to time, upon the Agent's reasonable request, the
Borrower shall furnish to the Agent copies of all bank statements and
other notices received by it with respect to the Blocked Accounts.
(c) The Borrower agrees that all monies deposited in the Swept
Accounts shall be transferred to the Agent on a daily basis and applied on
a daily basis to the Obligations as provided in Section 3.4.1, and the
Borrower shall take any steps reasonably deemed by the Agent to be
necessary or advisable to effect such application, including, without
limitation, the execution and delivery of lockbox agreements and
amendments to each of the Agency Agreements. The Borrower further agrees
that the Xxxxx Cash Accounts shall contain, considered together and in the
aggregate, no more than $60,000.
Section 8.14. Borrowing Base. The Borrower represents, warrants and
covenants as follows:
(a) At the time any Eligible Account Receivable is included in the
Borrowing Base and to the extent of the value of such Eligible Account
Receivable as reflected in the Borrowing Base, such Eligible Account Receivable
shall conform to the definition of Eligible Account Receivable.
(b) The Borrower is, and as to Eligible Inventory to be acquired after the
date hereof and to be included in the Borrowing Base, shall be the owner of all
Eligible Inventory to be included in the Borrowing Base and (except for the
liens for carrier, warehouse, customs and similar statutory liens arising in the
ordinary course of
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business) shall neither create nor suffer to exist any lien or encumbrance
thereon or security interest therein in favor of any Person other than the
Agent.
(c) The Borrower is the owner of the Canton Cast-Roll Facility and shall
neither create nor suffer to exist any lien or encumbrance thereon or security
interest therein in favor of any Person other than the Agent (other than liens
permitted by the Mortgage and a subordinate lien that may be permitted to secure
certain payables subject to the negotiation and delivery of a subordination
agreement in form and substance satisfactory to the Co-Agents).
(d) The Borrower shall give the Agent on the Effective Date a list of, and
thereafter shall give thirty (30) days written notice prior to any change in,
each warehouse location at which inventory is or will be kept and each office of
the Borrower at which the records of the Borrower pertaining to Accounts
Receivable and contract rights are kept. All Eligible Inventory is and shall be
kept, and all records pertaining to Accounts Receivable and contract rights are
and shall be kept, only at locations of which the Agent has been given notice as
provided in this Section 8.14(d).
(e) The Borrower shall promptly notify the Agent of any of the following
events of which any senior or executive officer of the Borrower becomes aware:
any material loss or depreciation in value of Eligible Inventory or the Canton
Cast-Roll Facility and the amount of the loss or depreciation; rejection,
return, repossession or loss of any material amount of goods giving rise to
Eligible Accounts Receivable; material damage to any such goods; any request by
an account debtor for any credits or adjustments of Eligible Accounts Receivable
which are material in the aggregate; any adjustments of the amounts owing on
Eligible Accounts Receivable which are material in the aggregate; any other
disputes which are material in the aggregate; any other event which materially
affects Eligible Inventory, Eligible Fixed Assets or Eligible Accounts
Receivable or the value or amount thereof, provided, that during any period when
Eligible Accounts Receivable are being determined on a daily basis, all
applicable adjustments to the amount thereof shall be taken on the day such
adjustment(s) are made, and shall not be delayed by virtue of this Section
8.14(e). For purposes of this Section 8.14(e), "material" shall mean involving
amounts in excess of $1,000,000 in the aggregate in the case of Eligible
Accounts Receivable and $5,000,000 in the aggregate in the case of Eligible
Inventory.
Section 8.15. Further Assurances. The Borrower will, and will cause each
of its Subsidiaries to, cooperate with the Banks and the Agent and execute such
further instruments and documents as the Banks or the Agent shall reasonably
request to carry out to their satisfaction the transactions contemplated by this
Credit Agreement and the other Loan Documents.
Section 9. CERTAIN NEGATIVE COVENANTS OF THE BORROWER. The Borrower
covenants and agrees that, so long as any Revolving Credit Loan, Letter of
Credit or Revolving Credit Note is outstanding or any Bank has any obligation to
make any Revolving Credit Loans or the Agent has any obligations to issue,
extend or renew any Letters of Credit:
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Section 9.1. Restrictions on Indebtedness. The Borrower will not, and will
not permit any of its Subsidiaries to, create, incur, assume, guarantee or be or
remain liable, contingently or otherwise, with respect to any Indebtedness or
Rental Obligations other than:
(a) Indebtedness to the Banks and the Agent arising under any of the Loan
Documents;
(b) current liabilities of the Borrower or such Subsidiary incurred in the
ordinary course of business not incurred through (i) the borrowing of money, or
(ii) the obtaining of credit except for credit on an open account basis
customarily extended and in fact extended in connection with normal purchases of
goods and services;
(c) Indebtedness of the Borrower and its Subsidiaries in respect of taxes,
assessments, governmental charges or levies and claims for labor, materials and
supplies to the extent that payment therefor shall not at the time be required
to be made in accordance with the provisions of Section 8.8;
(d) Indebtedness of the Borrower and its Subsidiaries in respect of
judgments or awards that have been in force for less than the applicable period
for taking and pursuing an appeal so long as execution is not levied thereunder
or in respect of which the Borrower or such Subsidiary shall at the time in good
faith be prosecuting an appeal or proceedings for review and in respect of which
a stay of execution shall have been obtained pending such appeal or review;
(e) endorsements for collection, deposit or negotiation and warranties of
products or services, in each case incurred in the ordinary course of business;
(f) Indebtedness of the Borrower and its Subsidiaries consisting of Rental
Obligations under operating leases with aggregate payments due in any year not
in excess of $36,000,000;
(g) Indebtedness consisting of contingent liabilities in respect of
litigation against the Borrower so long as such Indebtedness would not be
required by the Borrower's independent public accountants to be included in the
footnotes to the financial statements delivered pursuant to Section 8.4(a) or
the reserves for which required to be established on the books of the Borrower
are not in excess of $15,000,000;
(h) Indebtedness of the Borrower and its Subsidiaries incurred in
connection with the Capitalized Lease or acquisition after the date hereof of
personal or tangible property by the Borrower or any Subsidiary or the
refinancing thereof; provided that the principal amount of such Indebtedness
shall not exceed in any case 90% of the cost, to the Borrower or such
Subsidiary, of the personal or tangible property so acquired, and provided,
further, that the aggregate principal amount of such Indebtedness outstanding
shall not exceed $30,000,000 at any time;
(i) Indebtedness in respect of the Notes not exceeding the aggregate
principal amount of $425,000,000;
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(j) Indebtedness existing on the date hereof and listed and described on
Schedule 9.1 hereto, and Indebtedness incurred pursuant to the refinancing of
such Indebtedness provided that such Indebtedness (i) is in an aggregate
principal amount no greater than that portion of the Indebtedness listed on
Schedule 9.1 hereto so refinanced, (ii) has a final scheduled maturity later
than the final scheduled maturity of the Indebtedness refinanced, (iii) shall
not be secured by any lien or any assets that did not secure the Indebtedness
refinanced, (iv) shall be otherwise subject to terms and conditions reasonably
satisfactory to the Co-Agents;
(k) Indebtedness of a Subsidiary Guarantor of the Borrower to the Borrower
or another Subsidiary Guarantor and of the Borrower to a Subsidiary Guarantor;
(l) Indebtedness with respect to surety bonds and other obligations of the
type described in Section 9.2(x) required in the ordinary course of business of
the Borrower and its Subsidiaries, provided that the aggregate principal amount
of such Indebtedness shall not at any time exceed $9,000,000;
(m) Indebtedness of the Borrower and its Subsidiaries consisting of
contingent liabilities with respect to Guaranteed Pension Plans to the extent
permitted under Section 9.9;
(n) Indebtedness incurred under any interest rate swap, cap, collar or
similar arrangements or foreign currency exchange transactions with respect to
Indebtedness permitted by this Agreement;
(o) Indebtedness of the Borrower and its Subsidiaries not otherwise
permitted by this Section 9.1 not exceeding the aggregate principal amount of
$20,000,000 at any time;
(p) Indebtedness of the Borrower and its Subsidiaries representing
obligations in respect of performance bonds, bid bonds, appeal bonds, surety
bonds, completion guarantees and similar obligations and trade-related letters
of credit, in each case provided in the ordinary course of business, including
those incurred to secure health, safety and environmental obligations in the
ordinary course of business;
(q) Indebtedness of the Borrower in an aggregate amount not to exceed the
amount represented by the appraised value of the Canton Cast-Roll Facility on
the date on which such Indebtedness was incurred and not less than the value of
that portion of the Borrowing Base applicable to Eligible Fixed Assets on the
date on which such Indebtedness was incurred (such Indebtedness referred to
herein as the "Canton Indebtedness"), provided that (i) on the date of the
incurrence of the Canton Indebtedness the Eligible Fixed Asset Cap shall be
reduced immediately to $0, (ii) the annual interest rate applicable to the
Canton Indebtedness shall at no time be more than two hundred basis points above
the rate applicable to the Revolving Credit Loans at such time, (iii) any
covenants entered into by the Borrower or any of its Subsidiaries in connection
with the Canton Indebtedness shall be, when taken in the aggregate, no more
restrictive or onerous to the Borrower or such Subsidiary than those contained
in this Credit Agreement and the other Loan Documents, (iv) the Canton
Indebtedness
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shall mature after the Revolving Credit Loan Maturity Date, (v) the Borrower has
delivered Compliance Certificates demonstrating, both immediately prior to and
immediately after the incurrence of such Canton Indebtedness, compliance with
the covenants set forth in Section 10, (vi) no Default or Event of Default has
occurred and is continuing or would exist after incurring the Canton
Indebtedness, (vii) the Canton Indebtedness shall be subject to an intercreditor
agreement in form and substance reasonably satisfactory to the Agent if
reasonably requested by the Agent to protect its security interest in the
remaining collateral, and (viii) the Canton Indebtedness shall otherwise be
subject to such terms and conditions as are reasonably satisfactory in form and
substance to the Co-Agents;
(r) Government Assisted Indebtedness of Borrower or of its Subsidiaries,
provided that (i) such Government Assisted Indebtedness shall not have a final
scheduled maturity prior to the final scheduled maturity of the Revolving Credit
Loans, (ii) such Government Assisted Indebtedness shall not be secured by any
lien on any Collateral that would not constitute a Permitted Lien with respect
to such Collateral, (iii) Government Assisted Indebtedness incurred after the
Effective Date (excluding Government Assisted Indebtedness existing on the
Effective Date) shall not at any time exceed the aggregate principal amount of
$100,000,000 and (iv) such Government Assisted Indebtedness shall be subject to
terms and conditions reasonably satisfactory to the Co-Agents;
(s) Indebtedness consisting of commodity hedging contracts entered into in
the ordinary course of business in order to hedge actual transactions and not
for speculative purposes in an aggregate notional amount not to exceed the gross
amount of $10,000,000 at any time; and
(t) Indebtedness of the Borrower or any of its Subsidiaries consisting of
obligations of the Borrower or any of its Subsidiaries in respect of workers'
compensation, health, disability or other employee benefits, social security
payments, property, casualty or liability insurance premiums or other payment
obligations in connection with self-insurance or similar requirements in the
ordinary course of business.
Section 9.2. Restrictions on Liens. The Borrower will not, and will not
permit any of its Subsidiaries to, (a) create or incur or suffer to be created
or incurred or to exist any lien, encumbrance, mortgage, pledge, charge,
restriction or other security interest of any kind upon any of its property or
assets of any character whether now owned or hereafter acquired, or upon the
income or profits therefrom; (b) transfer any of such property or assets or the
income or profits therefrom for the purpose of subjecting the same to the
payment of Indebtedness or performance of any other obligation in priority to
payment of its general creditors; (c) acquire any property or assets upon
conditional sale or other title retention or purchase money security agreement,
device or arrangement; (d) suffer to exist for a period of more than thirty (30)
days after the same shall have been incurred any Indebtedness or claim or demand
against it that if unpaid would by law or upon bankruptcy or insolvency, or
otherwise, be given any priority whatsoever over its general creditors; or (e)
sell, assign, pledge or otherwise transfer any accounts, contract rights,
general intangibles (other than general
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intangibles related to assets disposed of in accordance with this Agreement and
the other Loan Documents), chattel paper or instruments, with or without
recourse; provided that the Borrower and any Subsidiary of the Borrower may
create or incur or suffer to be created or incurred or to exist:
(i) liens in favor of the Borrower on all or part of the assets of
Subsidiaries of the Borrower securing Indebtedness owing by Subsidiaries
of the Borrower to the Borrower;
(ii) liens on assets of the Borrower or its Subsidiaries to secure
taxes, assessments and other government charges in respect of obligations
not overdue or liens on properties other than the Mortgaged Property of
the Borrower or its Subsidiaries to secure claims for labor, material or
supplies in respect of obligations not overdue (or, in each case, which
are being contested in good faith and by appropriate proceedings and as to
which adequate reserves have been provided);
(iii) deposits or pledges made by the Borrower or its Subsidiaries
in connection with, or to secure payment of, workmen's compensation,
unemployment insurance, old age pensions or other social security
obligations or in connection with self-insurance arrangements in respect
of such obligations;
(iv) liens on properties of the Borrower or its Subsidiaries in
respect of judgments or awards, the Indebtedness with respect to which is
permitted by Section 9.1(d);
(v) liens of carriers, warehousemen, mechanics, repairmen, laborers,
suppliers and materialmen on properties of the Borrower or its
Subsidiaries other than the Mortgaged Property in existence less than 120
days from the date of creation thereof in respect of obligations not
overdue;
(vi) encumbrances on Real Estate other than the Mortgaged Property
of the Borrower or its Subsidiaries consisting of easements, rights of
way, zoning restrictions, restrictions on the use of real property and
defects and irregularities in the title thereto, landlord's or lessor's
liens under leases to which the Borrower or a Subsidiary of the Borrower
is a party, and other minor liens or encumbrances none of which in the
opinion of the Borrower interferes materially with the use of the property
affected in the ordinary conduct of the business of the Borrower and its
Subsidiaries, which defects do not individually or in the aggregate have a
materially adverse effect on the business of the Borrower individually or
of the Borrower and its Subsidiaries on a consolidated basis;
(vii) liens of the Borrower and its Subsidiaries existing on the
date hereof and listed on Schedule 9.2 hereto and refinancings of such
Indebtedness permitted under Section 9.1(j);
(viii) Capitalized Leases secured by, and purchase money security
interests in, personal or tangible property of the Borrower or its
Subsidiaries
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acquired or refinanced after the date hereof to secure purchase money
Indebtedness of the type and amount permitted by Section 9.1(h), incurred
in connection with the acquisition of such property, which security
interests cover only the personal or tangible property so acquired;
(ix) liens in favor of the holders of the Notes, which liens shall
in no event include any lien or encumbrance of any kind on the Collateral
except for such portion of the Collateral which is pledged pursuant to the
Master Pledge Agreement;
(x) liens securing the performance of tenders, bids, contracts
(other than for Indebtedness), leases (other than Capitalized Lease
Obligations), statutory obligations, surety and appeal bonds, performance
bonds and other obligations of like nature to the extent permitted by
Section 9.1(l) on assets of the Borrower and Subsidiary Guarantors not
constituting Collateral;
(xi) liens in favor of the Agent for the benefit of the Banks and
the Agent under the Loan Documents;
(xii) liens on the Canton Cast-Roll Facility and the capital stock
or membership interests of the Borrower and its Subsidiaries to secure
Canton Indebtedness to the extent permitted under Section 9.1(q);
(xiii) liens on assets of the Borrower or its Subsidiaries not
constituting Collateral securing Indebtedness permitted under Section
9.1(r) provided, that if any such liens cover property on which any
Collateral is located, the holders of such liens shall have entered into
an intercreditor agreement, if reasonably requested by the Agent to
protect its remaining Collateral, with the Agent reasonably satisfactory
to the Agent and the Banks;
(xiv) liens and encumbrances on the Mortgaged Property as and to the
extent permitted by the Mortgage and any mortgage entered into pursuant to
clause (xii) above;
(xv) liens on assets of the Borrower or any Subsidiary Guarantor not
constituting Collateral which assets secure the Borrower's obligations in
respect of the Notes to the extent that such liens are permitted under the
Indenture;
(xvi) a subordinate lien that may be permitted to secure certain
payables subject to the negotiation and delivery of a subordination
agreement in form and substance satisfactory to the Co-Agents;
(xvii) any leases or subleases to other Persons of properties or
assets owned or leased by the Borrower or any of its Subsidiaries; and
(xviii) liens on cash deposits, not exceeding $3,000,000 in the
aggregate, to secure the Borrower's and Subsidiary Guarantors' obligations
in respect of insurance and items of the type referred to in clause (iii)
or (x) above.
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Section 9.3. Restrictions on Investments. The Borrower will not, and will
not permit any of its Subsidiaries to, make or permit to exist or to remain
outstanding any Investment except:
(a) Investments by the Borrower or its Subsidiaries in marketable direct
or guaranteed obligations of the United States of America that mature within one
(1) year from the date of purchase by the Borrower;
(b) Investments by the Borrower or its Subsidiaries in demand deposits,
certificates of deposit, Eurodollar deposits, bankers acceptances and time
deposits of United States banks having total assets in excess of $1,000,000,000,
or foreign subsidiaries of such banks;
(c) Investments by the Borrower or its Subsidiaries in securities commonly
known as "commercial paper" issued by a corporation organized and existing under
the laws of the United States of America or any state thereof that at the time
of purchase have been rated and the ratings for which are not less than "P 1" if
rated by Xxxxx'x Investors Services, Inc., and not less than "A 1" if rated by
Standard and Poor's Ratings Group or, so long as no Obligations are outstanding,
not less than "P 2" if rated by Xxxxx'x Investors Services, Inc., and not less
than "A 2" if rated by Standard and Poor's Ratings Group;
(d) Investments by the Borrower or its Subsidiaries in debt of any state
or political subdivision that is rated "A" or better and due within one (1) year
from the date of purchase by the Borrower or its Subsidiaries;
(e) Investments by the Borrower or its Subsidiaries in repurchase
agreements secured by any one or more of the foregoing;
(f) Investments existing on the date hereof and listed on Schedule 9.3
hereto;
(g) Investments with respect to Indebtedness permitted by Section 9.1(k)
so long as such entities remain Subsidiaries of the Borrower and Guarantors
hereunder;
(h) Investments consisting of non-cash consideration received as proceeds
of asset dispositions permitted by Section 9.6;
(i) Investments by the Borrower or its Subsidiaries in shares of any
so-called "money market fund", provided that such fund is registered under the
Investment Company Act of 1940, has net assets of at least $500,000,000 and has
an investment portfolio with an average maturity of 365 days or less;
(j) Investments by the Borrower or its Subsidiaries in securities of any
Person acquired in full or partial satisfaction of liabilities of said Person to
the Borrower, in a workout or a bankruptcy or insolvency proceeding with respect
to such Person;
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(k) Investments by the Borrower or its Subsidiaries in interest rate
swaps, caps, collars or similar arrangements or foreign currency exchange
transactions entered into in connection with respect to Indebtedness permitted
under this Agreement or commodities xxxxxx;
(l) Investments permitted by Section 9.5;
(m) investments consisting of deposits provided to third parties with
respect to leases or utilities in the ordinary course of business;
(n) Investments by the Borrower or its Subsidiaries in loans or advances
to officers or employees not in excess of $1,000,000 at any time;
(o) Investments by the Borrower or its Subsidiaries consisting of
purchases and acquisitions of inventory, supplies, materials and equipment or
licenses or leases of intellectual property otherwise not prohibited hereunder;
and
(p) other Investments not exceeding $10,000,000 in the aggregate at any
time outstanding.
provided, however, that, if an Event of Default shall have occurred and be
continuing, upon request by the Agent, with respect to all Investments other
than demand deposits referred to in Section 9.3(b), Investments other than short
term Investments listed on Schedule 9.3 hereto or described in clause (h) above
and Investments of the type described in clauses (g) and (j) through (t), either
(p) such Investments shall be immediately converted into cash and deposited in a
Blocked Account or (ii) all actions with respect to such Investments shall be
taken to the satisfaction of the Agent to provide to the Agent, for the benefit
of the Banks and the Agent, a first-priority perfected security interest in such
Investments free of all encumbrances other than Permitted Liens.
Section 9.4. Change in Terms of Capital Stock; Distributions and other
Restricted Payments. The Borrower shall not, and shall not permit any Subsidiary
to, effect or permit any change in or amendment to any document or instrument
pertaining to the terms of the Borrower's or such Subsidiary's capital stock
which would be adverse to the interests of the Banks. The Borrower will not, and
will not permit any of its Subsidiaries to, make any Restricted Payments except:
(a) Distributions by Subsidiaries of the Borrower to the Borrower without
limitation;
(b) Restricted Payments in an amount not to exceed $2,000,000 per annum to
Parent, RES Holding and RTII to allow Parent, RES Holding and RTII to pay their
operating and administrative expenses, including, without limitation, directors
fees, legal and audit expenses, SEC compliance expenses and corporate franchise
and other taxes that are directly attributable to the Borrower and its
Subsidiaries;
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(c) provided that no Default or Event of Default has occurred and is then
continuing, Restricted Payments made to Parent, RES Holding and RTII or by
Borrower to permit the purchase or redemption of their capital stock or other
equity interests (including related stock and equity appreciation rights or
similar securities) held by present or former officers, employees or consultants
of RTII or the Borrower or any of its Subsidiaries or by any employee pension
benefit plan or management equity or stock option plan or agreement upon such
Person's death, disability, retirement or termination of employment or under the
terms of any such employee pension benefit plan or any other agreement under
which such capital stock or other equity interests or related rights were
issued; provided that the aggregate amount of such purchases or redemptions that
may be made under this clause (c) shall not exceed $3,000,000 per year ("Base
Amount"), provided, that, to the extent that not all of the Base Amount is
utilized in any year, the unused portion of such Base Amount may be carried
forward to and be deemed part of the Base Amount (which may be utilized after
exhausting the original Base Amount) only for the immediately subsequent year
and not any succeeding year;
(d) provided that the Borrower is then treated as a partnership
(pass-through or disregarded entity) for federal or state income tax purposes,
Distributions to the extent necessary to permit direct or indirect beneficial
holders to receive tax distributions as provided in the limited liability
agreement of the Parent not to exceed the tax liabilities payable by such owners
in respect of income of the Borrower and its Subsidiaries that, for tax
purposes, are treated as pass-through or disregarded entities, provided that
nothing in this clause (d) will be deemed to permit any such Distribution (i) in
excess of amounts that a consolidated group that includes the Borrower as the
"parent" and its Subsidiaries that, for tax purposes are treated as pass-through
or disregarded entities would be required to pay on a stand alone basis were
such entities taxable as a consolidated group of corporations, except for
distributions to the extent necessary to permit such holders to pay their tax
liabilities attributable to the disproportionate sharing of income or loss of
the Borrower and its Subsidiaries and (ii) to pay any tax liabilities of direct
or indirect investors of the Borrower or the Parent resulting from the
conversion of the Borrower from a limited liability company to corporate form,
including pursuant to a Roll-up Transaction;
(e) so long as no Default or Event of Default shall have occurred and be
continuing, Distributions made in order to enable RTII to make dividend payments
on, and the scheduled redemption of, the Bethlehem Preferred Stock, as in effect
on the Effective Date;
(f) so long as no Default or Event of Default shall have occurred and be
continuing, Distributions the proceeds of which are or will be used to pay or to
fund the payment of management, consulting or advisory fees and monitoring fees
payable to Blackstone and its Affiliates in an annual amount not to exceed
$1,500,000, Veritas and its Affiliates in an annual amount not to exceed
$500,000 USX and its Affiliates in an annual amount not to exceed $1,000,000 and
Kobe Steel Ltd. and its Affiliates in an annual amount not to exceed $1,000,000,
provided that the aggregate amount of all Distributions under this clause (f)
shall not exceed $4,000,000 per annum;
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(g) noncash repurchases of capital stock or other equity interests deemed
to occur upon exercise of stock options if such capital stock represent a
portion of the exercise price of such options; and
(h) Restricted Payments consisting of (i) the sale, purchase or provision
of goods and services from Affiliates in the conduct of the Borrower's and
Subsidiary Guarantors business and (ii) tranactions permitted under Section
9.15, in each case on arms length terms and which are not otherwise expressly
provided for and restricted in this Section 9.4.
Section 9.5. Merger and Consolidation. The Borrower will not, and will not
permit any of its Subsidiaries to, become a party to any merger or
consolidation, or agree to or effect any asset acquisition or stock acquisition
(other than the acquisition of assets in the ordinary course of business
consistent with past practices) except (i) the merger or consolidation of one or
more of the Subsidiaries of the Borrower with and into the Borrower, or the
merger or consolidation of two or more Subsidiaries of the Borrower, (ii) the
merger or consolidation of any Subsidiary acquired in a transaction permitted by
Section 9.3(p) and (iii) in connection with the Roll-up Transaction, provided
that any entity that survives in such transaction that is not a party hereto
shall expressly assume all Obligations of the merged entities and grant security
interests in all of its assets of a type constituting Collateral, and any new
Subsidiary formed as a result of such transaction will become a Subsidiary
Guarantor and enter into other security agreements reasonably acceptable to the
Agent.
Section 9.6. Sale and Leaseback; Disposition of Assets. The Borrower will
not, and will not permit any of its Subsidiaries to, enter into any arrangement,
directly or indirectly, whereby the Borrower or any Subsidiary of the Borrower
shall sell, transfer, lease or otherwise dispose of any assets or property owned
by it or hereafter acquired by it in one transaction or a series of
transactions, including, without limitation, in order then or thereafter to
lease such property or lease other property that the Borrower or any Subsidiary
of the Borrower intends to use for substantially the same purpose as the
property being sold or transferred other than (a) the disposition of assets
(obsolete or otherwise) in the ordinary course of business, (b) so long as no
Event of Default shall have occurred and be continuing, (i) the disposition of
Investments permitted by Section 9.3; (ii) the disposition of assets listed on
Schedule 9.6 hereto; (iii) the disposition of additional assets on an arms
length basis having an aggregate fair market value (after deducting from such
aggregate value the cash proceeds of previous asset sales which are reinvested,
within 180 days after sale, with such deduction being treated as having been
made in the fiscal year of such reinvestment) of no more than 10% of the
Borrower's total consolidated assets as reflected on the Borrower's pro forma
balance sheet as at the Effective Date, provided that assets having a fair
market value of no more than 5% of the Borrower's total consolidated assets as
reflected on the Borrower's pro forma balance sheet as at the Effective Date
shall be disposed in any fiscal year of the Borrower pursuant to this clause
(iii); (iv) the sale of the Specialty Steel Assets on an arms-length basis for
consideration consisting of at least 75% cash in an amount not less than
$30,000,000; and (v) the sale of the Closed Facilities on an arms-length basis
for consideration consisting of at least 75% cash. All Net Cash Proceeds of any
disposition of assets shall be deposited immediately into a Blocked Account,
provided however, that such
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Net Cash Proceeds shall subject such other provisions of Section 3.2(b) as may
be applicable. Notwithstanding the foregoing, the Borrower and its Subsidiaries
may enter into and assume the Safe Harbor Leases (as defined in the Master
Restructuring Agreement) to which USS/Kobe is a party pursuant to the Master
Restructuring Agreement.
Section 9.7. Compliance with Environmental Laws. Except for actions which
are in material compliance with Environmental Laws or would not result in a
Material Adverse Effect, the Borrower will not, and will not permit any of its
Subsidiaries to, (a) use any of the Real Estate or any portion thereof for the
handling, processing, storage or disposal of Hazardous Substances, (b) cause or
permit to be located on any of the Real Estate any underground tank or other
underground storage receptacle for Hazardous Substances, (c) generate any
Hazardous Substances on any of the Real Estate, (d) conduct any activity at any
Real Estate or use any Real Estate in any manner so as to cause a release (i.e.
releasing, spilling, leaking, pumping, pouring, emitting, emptying, discharging,
injecting, escaping, leaching, disposing or dumping) or threatened release of
Hazardous Substances on, upon or into the Real Estate or (e) otherwise conduct
any activity at any Real Estate or use any Real Estate in any manner that would
cause a violation of Environmental Laws the result of which violation would have
a Material Adverse Effect.
Section 9.8. Indebtedness in respect of the Notes. The Borrower shall not
amend, supplement or otherwise modify the terms of the Indebtedness in respect
of the Notes or any of the Note Documents to increase the interest rate on, or
principal amount or any premium thereof, shorten the average maturity thereof,
or permit or require the granting or pledging of collateral in addition to the
collateral granted or pledged under the Note Documents as of the date hereof or
required on the date hereof to be granted or pledged, or make any provisions
thereof more restrictive on the Borrower or the Parent than they are on the date
hereof, or otherwise if, in the reasonable opinion of the Banks, such amendment,
supplement or modification could be adverse to the interests of the Banks. The
Borrower shall not prepay, redeem or repurchase any of the Indebtedness in
respect of the Notes or give notice in respect of such prepayment, redemption or
repurchase other than as required under the Note Documents as of the date hereof
and as permitted by Section 3.2(b).
Section 9.9. Employee Benefit Plans. Unless a Material Adverse Effect is
not reasonably likely to result, neither the Borrower nor any ERISA Affiliate
will:
(a) engage in any non-exempt "prohibited transaction" within the meaning
of Section 406 of ERISA or Section 4975 of the Code which is reasonably likely
to result in a liability for the Borrower or any of its Subsidiaries; or
(b) permit any Guaranteed Pension Plan to incur an "accumulated funding
deficiency", as such term is defined in Section 302 of ERISA, whether or not
such deficiency is or may be waived; or
(c) fail to contribute to any Guaranteed Pension Plan to an extent which,
or terminate any Guaranteed Pension Plan in a manner which, could result in the
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imposition of a lien or encumbrance on the assets of the Borrower or any of its
Subsidiaries pursuant to Section 302(f) or Section 4068 of ERISA;
(d) amend any Guaranteed Pension Plan in circumstances requiring the
posting of security pursuant to Section 307 of ERISA or Section 401(a)(29) of
the Code; or
(e) permit or take any action which would result in the aggregate benefit
liabilities (within the meaning of Section 4001 of ERISA) of all Guaranteed
Pension Plans exceeding the value of the aggregate assets of such Plans,
disregarding for this purpose the benefit liabilities and assets of any such
Plan with assets in excess of benefit liabilities, by more than the amount set
forth in Section 7.16.3.
Section 9.10. Bank Accounts. The Borrower will not, and will not permit
any of its Subsidiaries to, (a) establish any bank accounts other than those
listed on Schedule 7.20 without the Agent's prior written consent, which consent
shall not be unreasonably withheld, (b) violate directly or indirectly any bank
agency agreement in favor of the Agent for the benefit of the Banks and the
Agent with respect to such account, or (c) deposit into any of the payroll
accounts listed on Schedule 7.20 any amounts in excess of amounts necessary to
pay current payroll obligations from such accounts based on the Borrower's
reasonable estimates of such amounts.
Section 9.11. Limitation on Issuance of Shares of Subsidiaries;
Disposition of Shares and Indebtedness of Subsidiaries.
(a) Except as permitted by Sections 9.4, 9.5 or 9.6, the Borrower
will not permit any of its Subsidiaries to issue, sell or otherwise dispose of
any shares of such Subsidiary or any securities convertible into or exchangeable
for or carrying rights to subscribe for shares of such Subsidiary, except (i) to
the Borrower, or (ii) for the purpose of qualifying directors. The Borrower will
not, in any event, permit any Subsidiary to have outstanding any preferred
shares, other than preferred shares owned by the Borrower.
(b) Except as permitted by Sections 9.4, 9.5 or 9.6, the Borrower
will not sell, transfer or otherwise dispose of any shares (except for the
purpose of qualifying directors) or any Indebtedness of any Subsidiary.
Section 9.12. Intentionally Omitted.
Section 9.13. No Material Changes, Etc. The Borrower shall not permit, at
any time after the RES Balance Sheet Date, any fact or circumstance (whether or
not the result thereof would be covered by insurance) as to which singly or in
the aggregate there is a reasonable likelihood of (a) a material adverse change
with respect to the value of the Collateral taken as a whole, or (b) the
inability of the Banks or the Agent to enforce in any material respect their
rights to be granted hereunder or under any of the other Loan Documents or the
Obligations (including realizing on the Collateral).
Section 9.14. No Subsidiaries. The Borrower will not, and will not permit
any of its Subsidiaries to, create or form, by acquisition or otherwise, any
Subsidiary in addition
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to the Subsidiaries of the Borrower described in Section 7.19 unless such new
Subsidiary shall have become a Guarantor, shall have pledged its assets of the
type pledged by the Borrower and the Guarantors as of the Effective Date and
shall have provided such other documentation as the Agent may reasonably
request, including, without limitation, amendments to the Security Agreements,
UCC searches and filings, legal opinions and corporate authorization
documentation, and, if the Eligible Fixed Asset Cap is not $0, 100% of the
equity interests of such new Subsidiary shall be pledged for the benefit of the
Banks and the Agent and the holders of the Senior Notes, such pledge to be
subject to terms and conditions substantially similar to those contained in the
Master Pledge Agreement.
Section 9.15. Transactions with Affiliates. Except for the sale of stock
of the Borrower to the Parent for cash and except as described on Schedule 9.15,
the Borrower will not, and will not permit any of its Subsidiaries to, engage in
any transaction with any Affiliate (other than for services as employees,
officers and directors), including any contract, agreement or other arrangement
providing for the furnishing of services to or by, providing for real or
personal property to or from, or otherwise requiring payments to or from any
such Affiliate or, to the knowledge of the Borrower, any corporation,
partnership, trust or other entity in which such Affiliate has a substantial
interest or is an officer, director, trustee or partner, on terms more favorable
to such Person than would have been obtainable on an arms-length basis. The
Borrower will not enter into any tax sharing agreement with any Person that is
not the Parent or a Subsidiary of the Borrower, unless such tax sharing
agreement has been approved by the Co-Agents, such consent not to be
unreasonably withheld. Notwithstanding the foregoing, no payments may be made
with respect to any items set forth on Schedule 9.15 during the existence of an
Event of Default if so indicated on Schedule 9.15. This covenant will not
restrict the Borrower or its Subsidiaries from (a) making Investments permitted
under Section 9.3 or Distributions permitted under Section 9.4 and (b) engaging
in transactions among the Borrower and its Subsidiaries and among Subsidiaries
of the Borrower otherwise permitted by this Agreement. This covenant shall not
restrict the Borrower or its Subsidiaries from (a) payments to Blackstone,
Veritas, USX and Kobe Steel Ltd. or any of their Affiliates made for any
financial advisory, underwriting or placement services in connection with any
acquisition or divestiture made by the Borrower or any of its Subsidiaries in an
amount not to exceed in the aggregate 1% of the total enterprise value of such
acquisition or divestiture, which payments are approved by a majority of the
board of directors of the Borrower in good faith, or (b) transactions with
customers, clients, suppliers, purchasers or sellers of goods or services, in
each case in the ordinary course of business and on arms length terms and
otherwise in compliance with this Agreement.
Section 9.16. Parent. The Parent shall at no time own any material assets
other than the membership interests of the Borrower. The Parent shall at no time
engage in any business other than the ownership, directly or indirectly, of the
membership interests of the Borrower and activities incidental thereto. The
Parent shall not incur any Indebtedness in respect of borrowed money except
under the Loan Documents and its guaranty of the Notes and the Pennsylvania
Indebtedness. The Parent shall not create or incur or suffer to be created or
incurred or to exist any lien, encumbrance, mortgage,
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pledge, charge, restriction or other security interest of any kind upon the
membership interests of the Borrower other than under the Master Pledge
Agreement.
Section 10. FINANCIAL COVENANTS OF THE BORROWER. The Borrower covenants
and agrees that, so long as any Revolving Credit Loan, Letter of Credit or
Revolving Credit Note is outstanding or any Bank has any obligation to make any
Revolving Credit Loans or the Agent has any obligation to issue, extend or renew
any Letters of Credit:
Section 10.1. Capital Expenditures. The Borrower will not make, or permit
any Subsidiary of the Borrower to make, Capital Expenditures during any of the
periods set forth below that exceed, in the aggregate for the Borrower and its
Subsidiaries, the amounts set forth below opposite such periods, provided,
however, that if, at the end of any of the periods listed below, the amount of
Capital Expenditures permitted for such period is not fully utilized, the lesser
of (i) 25% of Maximum Capital Expenditures for such period and (ii) the
difference between Maximum Capital Expenditures and actual Capital Expenditures
for such fiscal period may be carried over and utilized in any succeeding period
listed below, provided further, that if, at the end of Fiscal Year 2001 or any
subsequent period listed below, the amount of Capital Expenditures permitted for
such period is not fully utilized and the Fixed Charge Coverage Ratio is greater
than or equal to 1.10:1.00 on the last quarter of any Fiscal Year during such
period tested pursuant to Section 10.2, the lesser of (i) 50% of Maximum Capital
Expenditures for such period and (ii) the difference between Maximum Capital
Expenditures and actual Capital Expenditures for such fiscal period may be
carried over and utilized in the any succeeding period listed below:
--------------------------------------------------------------------------------
Period: Maximum Capital Expenditures:
--------------------------------------------------------------------------------
Effective Date - December 31, 1999 $19,000,000
--------------------------------------------------------------------------------
Fiscal Year 2000 $53,000,000
--------------------------------------------------------------------------------
Fiscal Year 2001 $61,000,000
--------------------------------------------------------------------------------
Fiscal Year 2002 $125,000,000
--------------------------------------------------------------------------------
Fiscal Year 2003 $97,000,000
--------------------------------------------------------------------------------
January 1, 2004 - Revolving Credit
Loan Maturity Date $23,000,000
--------------------------------------------------------------------------------
Section 10.2. Minimum Fixed Charge Coverage Ratio. The Borrower shall not
permit, for the fiscal quarter ending March 31, 2001, the two consecutive fiscal
quarters ending June 30, 2001, the three consecutive fiscal quarters ending
September 30, 2001 and each period of four consecutive fiscal quarters ending
thereafter, the Fixed Charge Coverage Ratio to be less than 1.10:1.00.
Section 11. CONCERNING THE EFFECTIVE DATE; CONDITIONS TO EFFECTIVENESS.
The Agent's and the Banks' obligations to convert their claims against the
Borrower under this Credit Agreement and the obligation of the Banks to make the
Revolving Credit Loans and to issue, extend or renew any Letters of Credit
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provided for in this Credit Agreement shall be subject to satisfaction of the
following conditions precedent on or prior to the Effective Date:
Section 11.1. Loan Documents. Each of the Loan Documents shall have been
duly executed and delivered by the respective parties thereto, shall be in full
force and effect and shall be in form and substance satisfactory to each of the
Banks
Section 11.2. Note Documents; Restructuring Documents; Warrant Documents.
Each of the Note Documents, Restructuring Documents, Equity Documents and the
Warrant Documents shall have been duly executed and delivered by the respective
parties thereto, shall be in full force and effect and shall be in form and
substance satisfactory to each of the Banks.
Section 11.3. Certified Copies of Charter Documents.
(a) The Agent shall have received from the Parent, the Borrower and each
of the Subsidiary Guarantors a copy, certified by a duly authorized officer of
such Person to be true and complete on the Effective Date, of each of (a) its
charter or other incorporation or organizational documents as in effect on such
date of certification, and (b) its by-laws or other governing documents as in
effect on such date.
(b) The Agent shall have received from the Parent, the Borrower and each
of the Subsidiary Guarantors a certificate from the Secretary of State, or other
appropriate authority of the jurisdiction of its incorporation or organization,
evidencing its good standing in such jurisdiction and in each other jurisdiction
in which a failure to so qualify could have a Material Adverse Effect.
Section 11.4. Corporate or Limited Liability Company Action. All corporate
or limited liability company action, as applicable, necessary for the valid
execution, delivery and performance by the Parent, the Borrower and each of the
Subsidiary Guarantors of this Credit Agreement and the other Loan Documents to
which such Person is party shall have been duly and effectively taken, and
evidence thereof satisfactory to the Banks shall have been provided to the
Agent.
Section 11.5. Incumbency Certificate. The Agent shall have received from
the Parent, the Borrower and each of the Subsidiary Guarantors an incumbency
certificate, dated as of the Effective Date, signed by a duly authorized officer
of the Borrower or such Subsidiary, and giving the name and bearing a specimen
signature of each individual who shall be authorized: (a) to sign, in the name
and on behalf of the Parent, the Borrower or such Subsidiary Guarantor, each of
the Loan Documents to which such Person is party; (b) to make Loan Requests and
Conversion Requests and to apply for Letters of Credit; and (c) to give notices
and to take other action on its behalf under the Loan Documents.
Section 11.6. Validity of Liens. The Security Documents shall be effective
to create in favor of the Agent a legal, valid and enforceable first (except for
Permitted Liens) security interest in and lien upon the Collateral. All filings,
recordings, deliveries of instruments and other actions necessary or desirable
in the opinion of the Agent to
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protect and preserve such security interests shall have been duly effected. The
Agent shall have received evidence thereof in form and substance satisfactory to
the Agent.
Section 11.7. Perfection Certificates and UCC Search Results. The Agent
shall have received from the Parent, the Borrower and each of the Subsidiary
Guarantors a completed and fully executed Perfection Certificate and the results
of UCC searches with respect to the Collateral, indicating no liens other than
Permitted Liens and otherwise in form and substance satisfactory to the Agent.
Section 11.8. Certificates of Insurance. The Agent shall have received (a)
a certificate of insurance from an independent insurance broker dated as of the
Effective Date, identifying insurers, types of insurance, insurance limits, and
policy terms, and otherwise describing the insurance obtained in accordance with
the provisions of Section 8.7 and (b) certified copies of all policies
evidencing such insurance (or certificates therefor signed by the insurer or an
agent authorized to bind the insurer).
Section 11.9. Borrowing Base Report. The Agent shall have received from
the Borrower a Borrowing Base Report for the preceding week.
Section 11.10. Opinions of Counsel. The Co-Agents shall have received
favorable legal opinions addressed to the Banks and the Agent, dated as of the
Effective Date and in form and substance satisfactory to the Co-Agents, from
each of
(i) Xxxxxxx Xxxxxxx & Xxxxxxxx;
(ii) Xxxxxxx & Kolczun;
(iii) McDonald, Hopkins, Xxxxx & Xxxxx;
(iv) Xxxxxx, Xxxxxxxxx & Xxxxxxxxx;
(v) Xxxxxx & Elliot; and
(vi) Xxxxxxx Xxxx LLP
Section 11.11. Payment of Fees. The Borrower shall have paid to the Banks,
the Co-Agents or the Agent, as appropriate, all fees due and payable as of the
Effective Date, including, without limitation, the commitment fee pursuant to
Section 2.2, the fees pursuant to Section 5.1 and, if applicable, Letter of
Credit Fees pursuant to Section 4.6.
Section 11.12. Payment of Interest and Fees under Prior Credit Agreement.
All interest and fees in respect of the Prior Credit Agreement accrued and
unpaid as of the Effective Date shall have been paid in full.
Section 11.13. [Intentionally Omitted.].
Section 11.14. Commercial Finance Examination. The Co-Agents shall have
received a the results of commercial finance examinations of the Borrower and
its Subsidiaries, including, without limitation, a prefunding commercial finance
examination conducted in order to determine Availability on the Effective Date,
and such reports shall be in form and substance satisfactory to the Co-Agents.
Section 11.15. Indebtedness in respect of the Notes. The Co-Agents shall
have received evidence satisfactory to the Co-Agents that the Borrower and RTI
Capital
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Corp. shall have received gross cash proceeds from the Notes in an aggregate
amount of not less than $419,000,000 pursuant to the Note Documents without any
material waiver with respect thereto and otherwise on terms and conditions
reasonably satisfactory to the Co-Agents.
Section 11.16. Equity Contribution. The Co-Agents shall have received
evidence satisfactory to the Co-Agents that the Borrower shall have received a
cash equity contribution in an amount of at least $75,000,000 pursuant to the
Equity Documents without any material waiver with respect thereto and otherwise
on terms and conditions reasonably satisfactory to the Co-Agents, provided that
cash proceeds in respect of the Notes and proceeds in respect of the investments
in the Borrower pursuant to the Equity Documents shall not be less than
$550,000,000 in the aggregate.
Section 11.17. Restructuring. The Co-Agents shall have received evidence
satisfactory to the Co-Agents that the Restructuring shall have occurred
pursuant to and in accordance with the Restructuring Documents without any
material waiver with respect thereto and otherwise on terms and conditions
reasonably satisfactory to the Co-Agents and that the Borrower shall own
substantially all of the assets and business owned by RES, BarTech, the Acquired
Portion of USS/Kobe and each of their respective Subsidiaries immediately prior
to the Restructuring except those assets and business listed on Schedule 7.24
hereto.
Section 11.18. EBITDA. The actual combined EBITDA for each of RES, BarTech
and USS/Kobe for the period of three consecutive fiscal months ending on June
30, 1999 shall not be less than $15,000,000, and the Borrower shall have
delivered to the Co-Agents an officer's certificate evidencing such combined
EBITDA.
Section 11.19. Reports by Deloitte & Touche, Hatch Engineering and Metal
Strategies, Inc. Hatch Engineering and Metal Strategies, Inc. shall each have
completed a report regarding the expected synergies arising out of the
Restructuring and the Borrower's business plans, and the Co-Agents shall be
reasonably satisfied with the results of such reports. Deloitte & Touche shall
have delivered a "comfort letter" in connection with the issuance of the Notes
in the form delivered to the Co-Agents on or prior to the Effective Date.
Section 11.20. Hazardous Waste Assessments. The Co-Agents shall have
received hazardous waste site assessments from environmental engineers in form
and substance satisfactory to the Co-Agents, such assessments to include an
analysis of the environmental liabilities of the Borrower and its Subsidiaries.
Section 11.21. Labor Agreements. The Co-Agents shall have received any
labor agreements of the Borrower, including, without limitation, labor
agreements entered into with the AFL-CIO, and such agreements shall be
reasonably satisfactory in form and substance to the Co-Agents.
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Section 11.22. Excess Availability. Excess Availability, as determined by
the Co-Agents on the Effective Date, shall not be less than $130,000,000, after
giving effect to the Availability Block and any extensions of credit hereunder
on the Effective Date.
Section 11.23. Solvency Opinion. The Co-Agents shall have received a copy
of an opinion from Xxxxxx, Xxxxxx & Co., describing in detail the solvency of
the Borrower and its Subsidiaries after the consummation of the transactions
contemplated herein and in form and substances satisfactory to the Co-Agents.
Section 11.24. Appraisal of Canton Cast-Roll Facility. The Co-Agents shall
have received an appraisal of the Canton Cast-Roll Facility in form and
substance satisfactory to the Co-Agents.
Section 11.25. Survey and Taxes. The Agent shall have received (i) an
updated Survey of the Mortgaged Property together with a Surveyor Certificate
relating thereto and (ii) evidence of payment of real estate taxes and municipal
charges on the Mortgaged Property not delinquent on or before the Effective
Date.
Section 11.26. Title Insurance. The Agent shall have received a Title
Policy covering the Mortgaged Property (or commitments to issue such policies,
with all conditions to issuance of the Title Policy deleted by an authorized
agent of the Title Insurance Company) together with proof of payment of all fees
and premiums for such policies, from the Title Insurance Company and in amounts
satisfactory to the Agent, insuring the interest of the Agent and each of the
Banks as mortgagee under the Mortgage.
Section 12. CONDITIONS TO ALL BORROWINGS. The obligations of the Banks to
make any Revolving Credit Loan, and of the Agent to issue, extend or renew any
Letter of Credit, in each case whether on or after the Effective Date, shall
also be subject to the satisfaction of the following conditions precedent.
Section 12.1. Representations True. Each of the representations and
warranties of any of the Borrower and its Subsidiaries contained in this Credit
Agreement and the other Loan Documents shall be in all material respects true as
of the date as of which they were made and shall also be true at and as of the
time of the making of such Revolving Credit Loan or the issuance, extension or
renewal of such Letter of Credit, with the same effect as if made at and as of
that time (except to the extent of changes resulting from transactions
contemplated or permitted by this Credit Agreement and the other Loan Documents
and changes occurring in the ordinary course of business that singly or in the
aggregate are not materially adverse, and to the extent that such
representations and warranties relate expressly to an earlier date) and no
Default or Event of Default shall have occurred and be continuing.
Section 12.2. No Legal Impediment. No change shall have occurred in any
law or regulations thereunder or interpretations thereof that in the reasonable
opinion of any Bank would make it illegal for such Bank to make such Revolving
Credit Loan or to participate in the issuance, extension or renewal of such
Letter of Credit or in the reasonable opinion of the Agent would make it illegal
for the Agent to issue, extend or renew such Letter of Credit.
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Section 12.3. Governmental Regulation. Each Bank shall have received such
statements in substance and form reasonably satisfactory to such Bank as such
Bank shall require for the purpose of compliance with any applicable regulations
of the Comptroller of the Currency or the Board of Governors of the Federal
Reserve System.
Section 12.4. Proceedings and Documents. All proceedings in connection
with the transactions contemplated by this Credit Agreement, the other Loan
Documents and all other documents incident thereto shall be satisfactory in
substance and in form to the Banks and to the Agent and the Agent's Special
Counsel, and the Banks, the Agent and such counsel shall have received all
information and such counterpart originals or certified or other copies of such
documents as the Agent may reasonably request.
Section 12.5. Borrowing Base Report. The Agent shall have received the
most recent Borrowing Base Report required to be delivered to the Agent in
accordance with Section 8.4(i) and, if requested by the Agent, a Borrowing Base
Report dated within one (1) Business Day of the Drawdown Date of such Revolving
Credit Loan or of the date of issuance, extension or renewal of such Letter of
Credit.
Section 13. EVENTS OF DEFAULT; ACCELERATION; ETC.
Section 13.1. Events of Default and Acceleration. If any of the following
events ("Events of Default" or, if the giving of notice or the lapse of time or
both is required, then, prior to such notice or lapse of time, "Defaults") shall
occur:
(a) the Borrower shall fail to pay any principal of the Revolving Credit
Loans when the same shall become due and payable, whether at the stated date of
maturity or any accelerated date of maturity or at any other date fixed for
payment;
(b) the Borrower shall fail to pay any interest on the Revolving Credit
Loans, the commitment fee, any Letter of Credit Fee, the Agent's fee, or other
sums due hereunder or under any of the other Loan Documents, within three (3)
days of the stated date of maturity or any accelerated date of maturity or at
any other date fixed for payment;
(c) the Borrower shall fail to comply with any of its covenants contained
in Section 8.1 (including, as it applies to Section 13.1(b), any grace period
applicable thereto), Section 8.4 (within five (5) days of when any monthly
financial statement would otherwise be due and within fifteen (15) days of when
any quarterly or annual statement would otherwise be due), Section 8.5.1,
Section 8.5.4 (within fifteen (15) days of when notice would otherwise be due),
the first sentence of Section 8.6, Section 8.7, Section 8.12, Sections
9.1 through 9.6, Sections 9.8 through 9.13, Section 10 or any covenant
contained in the Mortgage the violation of which would constitute an immediate
"Event of Default" under such Mortgage;
(d) the Borrower shall fail to perform any term, covenant or agreement
contained herein or in any of the other Loan Documents (other than those
specified elsewhere in this Section 13.1) for thirty (30) days after written
notice of such failure has been given to the Borrower by the Agent;
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(e) any representation or warranty of the Borrower or any of its
Subsidiaries in this Credit Agreement or any of the other Loan Documents or in
any other document or instrument delivered pursuant to or in connection with
this Credit Agreement shall prove to have been false in any material respect
upon the date when made or deemed to have been made or repeated;
(f) the Borrower or any of its Subsidiaries shall fail to pay at maturity,
or within any applicable period of grace, any obligation for borrowed money or
credit received or in respect of any Capitalized Leases the outstanding
principal amount of which exceeds $15,000,000, or fail to observe or perform any
material term, covenant or agreement contained in any agreement by which it is
bound, evidencing or securing borrowed money or credit received or in respect of
any Capitalized Leases, the outstanding principal amount of which exceeds
$15,000,000, for such period of time as would permit (assuming the giving of
appropriate notice if required) the holder or holders thereof or of any
obligations issued thereunder to accelerate the maturity thereof;
(g) the Borrower or any of its Subsidiaries shall make an assignment for
the benefit of creditors, or admit in writing its inability to pay or generally
fail to pay its debts as they mature or become due, or shall petition or apply
for the appointment of a trustee or other custodian, liquidator or receiver of
the Borrower or any of its Subsidiaries or of any substantial part of the assets
of the Borrower or any of its Subsidiaries or shall commence any case or other
proceeding relating to the Borrower or any of its Subsidiaries under any
bankruptcy, reorganization, arrangement, insolvency, readjustment of debt,
dissolution or liquidation or similar law of any jurisdiction, now or hereafter
in effect, or shall take any action to authorize or in furtherance of any of the
foregoing, or if any such petition or application shall be filed or any such
case or other proceeding shall be commenced against the Borrower or any of its
Subsidiaries and the Borrower or any of its Subsidiaries shall indicate its
approval thereof, consent thereto or acquiescence therein or such petition or
application shall not have been dismissed within forty-five (45) days following
the filing thereof;
(h) a decree or order is entered appointing any such trustee, custodian,
liquidator or receiver or adjudicating the Borrower or any of its Subsidiaries
bankrupt or insolvent, or approving a petition in any such case or other
proceeding, or a decree or order for relief is entered in respect of the
Borrower or any Subsidiary of the Borrower in an involuntary case under federal
bankruptcy laws as now or hereafter constituted;
(i) there shall remain in force, undischarged, unsatisfied, unstayed and
unbonded, for more than thirty (30) days, whether or not consecutive, any final
judgment against the Borrower or any of its Subsidiaries that, with other
outstanding final judgments, undischarged, unsatisfied, unstayed and unbonded,
against the Borrower or any of its Subsidiaries exceeds in the aggregate
$15,000,000;
(j) if the Agency Agreements required pursuant to Section 8.13.2(a) shall
not be in full force and effect within forty-five (45) days after the Effective
Date;
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(k) if any of the Loan Documents shall be canceled, terminated, revoked or
rescinded or the Agent's security interests or liens in a substantial portion of
the Collateral shall cease to be perfected, or shall cease to have the priority
contemplated by the Security Documents in each case otherwise than in accordance
with the terms thereof or with the express prior written agreement, consent or
approval of the Banks, or any action at law, suit or in equity or other legal
proceeding to cancel, revoke or rescind any of the Loan Documents shall be
commenced by or on behalf of the Borrower or any of its Subsidiaries party
thereto or any of their respective stockholders, or any court or any other
governmental or regulatory authority or agency of competent jurisdiction shall
make a determination that, or issue a judgment, order, decree or ruling to the
effect that, any one or more of the Loan Documents is illegal, invalid or
unenforceable in accordance with the terms thereof;
(l) the Borrower or any ERISA Affiliate incurs any liability to the PBGC
or in the event of a termination or withdrawal from a Guaranteed Pension Plan
pursuant to Title IV of ERISA in an aggregate amount exceeding $15,000,000; the
Borrower or any ERISA Affiliate is assessed withdrawal liability pursuant to
Title IV of ERISA by a Multiemployer Plan requiring aggregate annual payments
exceeding $15,000,000, or any of the following occurs with respect to a
Guaranteed Pension Plan: (i) an ERISA Reportable Event, or a failure to make a
required installment or other payment (within the meaning of Section 302(f)(1)
of ERISA), provided the Agent determines in its reasonable judgment that such
event (A) could be expected to result in liability of the Borrower to the PBGC
or the Plan in an aggregate amount exceeding $15,000,000 and (B) could
constitute grounds for the termination of such Plan by the PBGC, for the
appointment by the appropriate United States District Court of a trustee to
administer such Plan or for the imposition of a lien in favor of the Guaranteed
Pension Plan; (ii) the appointment by a United States District Court of a
trustee to administer such Plan; or (iii) the institution by the PBGC of
proceedings to terminate such Plan;
(m) the Borrower or any of its Subsidiaries shall be enjoined, restrained
or in any way prevented by the order of any court or any administrative or
regulatory agency from conducting any material part of its business and such
order shall continue in effect for more than thirty (30) days;
(n) there shall occur any material damage to, or loss, theft or
destruction of, any Collateral, whether or not insured, or any strike, lockout,
labor dispute, embargo, condemnation, act of God or public enemy, or other
casualty, which in any such case causes, for more than fifteen (15) consecutive
days, the cessation or substantial curtailment of revenue producing activities
at any facility of the Borrower or any of its Subsidiaries if such event or
circumstance is not covered by business interruption insurance and would have a
Material Adverse Effect;
(o) there shall occur the loss, suspension or revocation of, or failure to
renew, any license or permit now held or hereafter acquired by the Borrower or
any of its Subsidiaries if such loss, suspension, revocation or failure to renew
would have a Material Adverse Effect;
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(p) the Borrower or any of its Subsidiaries shall be convicted for a
federal crime, a punishment for which could include the forfeiture of any assets
of the Borrower or such Subsidiary included in the Borrowing Base or any assets
of the Borrower or such Subsidiary not included in the Borrowing Base but having
a fair market value in excess of $15,000,000;
(q) a Change of Control shall have occurred;
(r) the Availability shall at any time be less than zero;
then, and in any such event, so long as the same may be continuing, the Agent
may, and upon the request of the Majority Banks shall, by notice in writing to
the Borrower declare all amounts owing with respect to this Credit Agreement,
the Revolving Credit Notes and the other Loan Documents to be, and they shall
thereupon forthwith become, immediately due and payable without presentment,
demand, protest or other notice of any kind, all of which are hereby expressly
waived by the Borrower; provided that in the event of any Event of Default
specified in Sections 13.1(g) or 13.1(h), all such amounts shall become
immediately due and payable automatically and without any requirement of notice
from the Agent or any Bank.
Section 13.2. Termination of Commitments. If any one or more of the Events
of Default specified in Section 13.1(g) or Section 13.1(h) shall occur, any
unused portion of the credit hereunder shall forthwith terminate and each of the
Banks shall be relieved of all further obligations to make Revolving Credit
Loans to the Borrower and the Agent shall be relieved of all further obligations
to issue, extend or renew Letters of Credit. If any other Event of Default shall
have occurred and be continuing, the Agent may and, upon the request of the
Majority Banks, shall, by notice to the Borrower, terminate the unused portion
of the credit hereunder, and upon such notice being given such unused portion of
the credit hereunder shall terminate immediately and each of the Banks shall be
relieved of all further obligations to make Revolving Credit Loans and the Agent
shall be relieved of all further obligations to issue, extend or renew Letters
of Credit. No termination of the credit hereunder shall relieve the Borrower or
any of its Subsidiaries of any of the Obligations.
Section 13.3. Remedies. In case any one or more of the Events of Default
shall have occurred and be continuing, and whether or not the Banks shall have
accelerated the maturity of the Revolving Credit Loans pursuant to Section 13.1,
each Bank, if owed any amount with respect to the Revolving Credit Loans, may,
with the consent of the Majority Banks, but not otherwise, proceed to protect
and enforce its rights by suit in equity, action at law or other appropriate
proceeding, whether for the specific performance of any covenant or agreement
contained in this Credit Agreement and the other Loan Documents or any
instrument pursuant to which the Obligations to such Bank are evidenced,
including as permitted by applicable law the obtaining of the ex parte
appointment of a receiver, and, if such amount shall have become due, by
declaration or otherwise, proceed to enforce the payment thereof or any other
legal or equitable right of such Bank. No remedy herein conferred upon any Bank
or the Agent or the holder of any Revolving Credit Note or purchaser of any
Letter of Credit Participation is intended to be exclusive of any other remedy
and each and every
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remedy shall be cumulative and shall be in addition to every other remedy given
hereunder or now or hereafter existing at law or in equity or by statute or any
other provision of law.
Section 13.4. Distribution of Collateral Proceeds. In the event that,
following the occurrence or during the continuance of any Default or Event of
Default, the Agent or any Bank, as the case may be, receives any monies in
connection with the enforcement of any the Security Documents, or otherwise with
respect to the realization upon any of the Collateral, such monies shall be
distributed for application as follows:
(a) First, to the payment of, or (as the case may be) the reimbursement of
the Agent for or in respect of all reasonable costs, expenses, disbursements and
losses which shall have been incurred or sustained by the Agent in connection
with the collection of such monies by the Agent, for the exercise, protection or
enforcement by the Agent of all or any of the rights, remedies, powers and
privileges of the Agent under this Credit Agreement or any of the other Loan
Documents or in respect of the Collateral or in support of any provision of
adequate indemnity to the Agent against any taxes or liens which by law shall
have, or may have, priority over the rights of the Agent to such monies;
(b) Second, to all other Obligations (other than those Obligations arising
or incurred under any ancillary facilities provided by the Agent or any Banks in
their individual capacities to the Borrower) in such order or preference as the
Majority Banks may determine; provided, however, that distributions in respect
of (i) such obligations shall be made pari passu among Obligations with respect
to the Agent's fee payable pursuant to Section 5.1 and all other Obligations and
(ii) Obligations owing to the Banks with respect to each type of Obligation such
as interest, principal, fees and expenses, shall be made among the Banks pro
rata; and provided, further, that the Agent may in its discretion make proper
allowance to take into account any Obligations not then due and payable;
(c) Third, to those Obligations arising under any cash management
services, Rate Protection Agreements or any other ancillary facilities provided
by the Agent or any other Banks in their individual capacities to the Borrower
in connection with this Agreement;
(d) Fourth, upon payment and satisfaction in full or other provisions for
payment in full satisfactory to the Banks and the Agent of all of the
Obligations, to the payment of any obligations required to be paid pursuant to
Section 9-504(1)(c) of the Uniform Commercial Code of the Commonwealth of
Massachusetts; and
(e) Fifth, the excess, if any, shall be returned to the Borrower or to
such other Persons as are entitled thereto.
Section 14. SETOFF. Regardless of the adequacy of any collateral, during
the continuance of any Event of Default, any deposits or other sums credited by
or due from any of the Banks to the Borrower and any securities or other
property of the Borrower in the possession of such Bank may be applied to or set
off by such Bank
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against the payment of Obligations and any and all other liabilities, direct or
indirect, absolute or contingent, due or to become due, now existing or
hereafter arising, of the Borrower to such Bank. Each of the Banks agrees with
each other Bank that (a) if an amount to be set off is to be applied to
Indebtedness of the Borrower to such Bank, other than Indebtedness evidenced by
the Revolving Credit Notes held by such Bank or constituting Reimbursement
Obligations owed to such Bank, such amount shall be applied ratably to such
other Indebtedness and to the Indebtedness evidenced by all such Notes held by
such Bank or constituting Reimbursement Obligations owed to such Bank and (b) if
such Bank shall receive from the Borrower, whether by voluntary payment,
exercise of the right of setoff, counterclaim, cross action, enforcement of the
claim evidenced by the Revolving Credit Notes held by, or constituting
Reimbursement Obligations owed to, such Bank by proceedings against the Borrower
at law or in equity or by proof thereof in bankruptcy, reorganization,
liquidation, receivership or similar proceedings, or otherwise, and shall retain
and apply to the payment of the Revolving Credit Note or Notes held by, or
constituting Reimbursement Obligations owed to, such Bank any amount in excess
of its ratable portion of the payments received by all of the Banks with respect
to the Revolving Credit Notes held by all of the Banks, such Bank will make such
disposition and arrangements with the other Banks with respect to such excess,
either by way of distribution, pro tanto assignment of claims, subrogation or
otherwise as shall result in each Bank receiving in respect of the Revolving
Credit Notes held by it or Reimbursement Obligations owed it, its proportionate
payment as contemplated by this Credit Agreement; provided that if all or any
part of such excess payment is thereafter recovered from such Bank, such
disposition and arrangements shall be rescinded and the amount restored to the
extent of such recovery, but without interest.
Section 15. THE AGENT.
Section 15.1. Authorization.
(a) The Agent is authorized to take such action on behalf of each of the
Banks and to exercise all such powers as are hereunder and under any of the
other Loan Documents and any related documents delegated to the Agent, together
with such powers as are reasonably incident thereto, provided that no duties or
responsibilities not expressly assumed herein or therein shall be implied to
have been assumed by the Agent.
(b) The relationship between the Agent and each of the Banks is that of an
independent contractor. The use of the term "Agent" is for convenience only and
is used to describe, as a form of convention, the independent contractual
relationship between the Agent and each of the Banks. Nothing contained in this
Credit Agreement nor the other Loan Documents shall be construed to create an
agency, trust or other fiduciary relationship between the Agent and any of the
Banks.
(c) As an independent contractor empowered by the Banks to exercise
certain rights and perform certain duties and responsibilities hereunder and
under the other Loan Documents, the Agent is nevertheless a "representative" of
the Banks, as that term is defined in Article 1 of the Uniform Commercial Code,
for purposes of actions
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for the benefit of the Banks and the Agent with respect to all collateral
security and guaranties contemplated by the Loan Documents. Such actions include
the designation of the Agent as "secured party", "mortgagee" or the like on all
financing statements and other documents and instruments, whether recorded or
otherwise, relating to the attachment, perfection, priority or enforcement of
any security interests, mortgages or deeds of trust in collateral security
intended to secure the payment or performance of any of the Obligations, all for
the benefit of the Banks and the Agent.
Section 15.2. Employees and Agents. The Agent may exercise its powers and
execute its duties by or through employees or agents and shall be entitled to
take, and to rely on, advice of counsel concerning all matters pertaining to its
rights and duties under this Credit Agreement and the other Loan Documents. The
Agent may utilize the services of such Persons as the Agent in its sole
discretion may reasonably determine, and all reasonable fees and expenses of any
such Persons shall be paid by the Borrower.
Section 15.3. No Liability. Neither the Agent nor any of its shareholders,
directors, officers or employees nor any other Person assisting them in their
duties nor any agent or employee thereof, shall be liable for any waiver,
consent or approval given or any action taken, or omitted to be taken, in good
faith by it or them hereunder or under any of the other Loan Documents, or in
connection herewith or therewith, or be responsible for the consequences of any
oversight or error of judgment whatsoever, except that the Agent or such other
Person, as the case may be, may be liable for losses due to its willful
misconduct or gross negligence.
Section 15.4. No Representations. The Agent shall not be responsible for
the execution or validity or enforceability of this Credit Agreement, the
Revolving Credit Notes, the Letters of Credit, any of the other Loan Documents
or any instrument at any time constituting, or intended to constitute,
collateral security for the Revolving Credit Notes, or for the value of any such
collateral security or for the validity, enforceability or collectability of any
such amounts owing with respect to the Revolving Credit Notes, or for any
recitals or statements, warranties or representations made herein or in any of
the other Loan Documents or in any certificate or instrument hereafter furnished
to it by or on behalf of the Borrower or any of its Subsidiaries, or be bound to
ascertain or inquire as to the performance or observance of any of the terms,
conditions, covenants or agreements herein or in any instrument at any time
constituting, or intended to constitute, collateral security for the Revolving
Credit Notes or to inspect any of the properties, books or records of the
Borrower or any of its Subsidiaries. The Agent shall not be bound to ascertain
whether any notice, consent, waiver or request delivered to it by the Borrower
or any holder of any of the Revolving Credit Notes shall have been duly
authorized or is true, accurate and complete. The Agent has not made nor does it
now make any representations or warranties, express or implied, nor does it
assume any liability to the Banks, with respect to the creditworthiness or
financial conditions of the Borrower or any of its Subsidiaries. Each Bank
acknowledges that it has, independently and without reliance upon the Agent or
any other Bank, and based upon such information and documents as it has deemed
appropriate, made its own credit analysis and decision to enter into this Credit
Agreement.
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Section 15.5. Payments.
15.5.1. Payments to Agent. A payment by the Borrower to the Agent
hereunder or any of the other Loan Documents for the account of any Bank shall
constitute a payment to such Bank. The Agent agrees promptly to distribute to
each Bank such Bank's pro rata share of payments received by the Agent for the
account of the Banks except as otherwise expressly provided herein or in any of
the other Loan Documents.
15.5.2. Distribution by Agent. If in the opinion of the Agent the
distribution of any amount received by it in such capacity hereunder, under the
Revolving Credit Notes or under any of the other Loan Documents might involve it
in liability, it may refrain from making distribution until its right to make
distribution shall have been adjudicated by a court of competent jurisdiction.
If a court of competent jurisdiction shall adjudge that any amount received and
distributed by the Agent is to be repaid, each Person to whom any such
distribution shall have been made shall either repay to the Agent its
proportionate share of the amount so adjudged to be repaid or shall pay over the
same in such manner and to such Persons as shall be determined by such court.
15.5.3. Delinquent Banks. Notwithstanding anything to the contrary
contained in this Credit Agreement or any of the other Loan Documents, any Bank
that fails (a) to make available to the Agent its pro rata share of any
Revolving Credit Loan or to purchase or make any payment on account of any
Letter of Credit Participation or (b) to comply with the provisions of Section
14 with respect to making dispositions and arrangements with the other Banks,
where such Bank's share of any payment received, whether by setoff or otherwise,
is in excess of its pro rata share of such payments due and payable to all of
the Banks, in each case as, when and to the full extent required by the
provisions of this Credit Agreement or Section 15.7, shall be deemed delinquent
(a "Delinquent Bank") and shall be deemed a Delinquent Bank until such time as
such delinquency is satisfied. A Delinquent Bank shall be deemed to have
assigned any and all payments due to it from the Borrower, whether on account of
outstanding Revolving Credit Loans, Unpaid Reimbursement Obligations, interest,
fees or otherwise, to the remaining nondelinquent Banks for application to, and
reduction of, their respective pro rata shares of all outstanding Revolving
Credit Loans and Unpaid Reimbursement Obligations. The Delinquent Bank hereby
authorizes the Agent to distribute such payments to the nondelinquent Banks in
proportion to their respective pro rata shares of all outstanding Revolving
Credit Loans and Unpaid Reimbursement Obligations. A Delinquent Bank shall be
deemed to have satisfied in full a delinquency when and if, as a result of
application of the assigned payments to all outstanding Revolving Credit Loans
of the nondelinquent Banks, the Banks' respective pro rata shares of all
outstanding Revolving Credit Loans and Unpaid Reimbursement Obligations have
returned to those in effect immediately prior to such delinquency and without
giving effect to the nonpayment causing such delinquency. Until such delinquency
is satisfied, the Delinquent Bank shall have no right to participate in any vote
on or consent to any matter in respect of or in connection with this Credit
Agreement.
Section 15.6. Holders of Revolving Credit Notes. The Agent may deem
and treat the payee of any Revolving Credit Note and the purchaser of any Letter
of Credit
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Participation as the absolute owner or purchaser thereof for all purposes hereof
until it shall have been furnished in writing with a different name by such
payee or by a subsequent holder, assignee or transferee.
Section 15.7. Indemnity. The Banks ratably agree hereby to indemnify and
hold harmless the Agent from and against any and all claims, actions and suits
(whether groundless or otherwise), losses, damages, costs, expenses (including
any expenses for which the Agent has not been reimbursed by the Borrower as
required by Section 16), and liabilities of every nature and character arising
out of or related to this Credit Agreement, the Revolving Credit Notes, or any
of the other Loan Documents or the transactions contemplated or evidenced hereby
or thereby, or the Agent's actions taken hereunder or thereunder without
limiting the Borrower's and Guarantors' indemnity obligations, except to the
extent that any of the same shall be directly caused by the Agent's willful
misconduct or gross negligence.
Section 15.8. Agent as Bank. In its individual capacity, BKB shall have
the same obligations and the same rights, powers and privileges in respect to
its Commitment and the Revolving Credit Loans made by it, and as the holder of
any of the Revolving Credit Notes and as the purchaser of any Letter of Credit
Participations, as it would have were it not also the Agent.
Section 15.9. Resignation. The Agent may resign at any time by giving
sixty (60) days' prior written notice thereof to the Banks and the Borrower.
Upon any such resignation, the Majority Banks shall have the right to appoint a
successor Agent. Unless a Default or Event of Default shall have occurred and be
continuing, such successor Agent shall be reasonably acceptable to the Borrower.
If no successor Agent shall have been so appointed by the Majority Banks and
shall have accepted such appointment within thirty (30) days after the retiring
Agent's giving of notice of resignation, then the retiring Agent may, on behalf
of the Banks, appoint a successor Agent, which shall be a financial institution
having a rating of not less than A or its equivalent by Standard & Poor's
Ratings Group. Upon the acceptance of any appointment as Agent hereunder by a
successor Agent, such successor Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the retiring Agent,
and the retiring Agent shall be discharged from its duties and obligations
hereunder. After any retiring Agent's resignation, the provisions of this Credit
Agreement and the other Loan Documents shall continue in effect for its benefit
in respect of any actions taken or omitted to be taken by it while it was acting
as Agent.
Section 15.10. Notification of Defaults and Events of Default. Each Bank
hereby agrees that, upon learning of the existence of a Default or an Event of
Default, it shall promptly notify the Agent thereof. The Agent hereby agrees
that upon receipt of any notice under this Section 15.10 it shall promptly
notify the other Banks of the existence of such Default or Event of Default.
Section 15.11. Duties in the Case of Enforcement. In case one of more
Events of Default have occurred and shall be continuing, and whether or not
acceleration of the Obligations shall have occurred, the Agent shall, if (a) so
requested by the Majority
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Banks and (b) the Banks have provided to the Agent such additional indemnities
and assurances against expenses and liabilities as the Agent may reasonably
request, proceed to enforce the provisions of the Security Documents authorizing
the sale or other disposition of all or any part of the Collateral and exercise
all or any such other legal and equitable and other rights or remedies as it may
have in respect of such Collateral. The Majority Banks may direct the Agent in
writing as to the method and the extent of any such sale or other disposition,
the Banks hereby agreeing to indemnify and hold the Agent harmless from all
liabilities incurred in respect of all actions taken or omitted in accordance
with such directions, provided that the Agent need not comply with any such
direction to the extent that the Agent reasonably believes the Agent's
compliance with such direction to be unlawful or commercially unreasonable in
any applicable jurisdiction.
Section 16. EXPENSES. The Borrower agrees to pay (a) the reasonable costs
of producing and reproducing this Credit Agreement, the other Loan Documents and
the other agreements and instruments mentioned herein, (b) any excise taxes or
current or future stamp or documentary taxes or similar charges (including any
interest and penalties in respect thereto) payable by the Agent or any of the
Banks (other than taxes based upon the Agent's or any Bank's net income) on or
with respect to the transactions contemplated by this Credit Agreement (the
Borrower hereby agreeing to indemnify the Agent and each Bank with respect
thereto), (c) the reasonable fees, expenses and disbursements of the Agent's
Special Counsel, any Co-Agent's counsel and any local counsel to the Agent
incurred in connection with the preparation, administration, interpretation or
syndication of the Loan Documents and other instruments mentioned herein, each
closing hereunder, and amendments, modifications, approvals, consents or waivers
hereto or hereunder, (d) the fees, expenses and disbursements of the Agent or
any Co-Arranger incurred by the Agent or such Co-Arranger in connection with the
preparation, administration, interpretation or syndication of the Loan Documents
and other instruments mentioned herein, including all appraisal charges and
charges of other professionals retained by the Agent or such Co-Arranger, (e)
the fees, expenses and disbursements of the Agent incurred by the Agent or its
designee in connection with all commercial finance examinations conducted by or
on behalf of the Agent, (f) any fees, costs, expenses and bank charges,
including bank charges for returned checks, incurred by the Agent in
establishing, maintaining or handling agency accounts, lock box accounts and
other accounts for the collection of any of the Collateral; (g) all reasonable
out-of-pocket expenses (including without limitation reasonable attorneys' fees
and costs, which attorneys may be employees of any Bank or the Agent, and
reasonable consulting, accounting, appraisal, investment banking and similar
professional fees and charges) incurred by any Bank or the Agent in connection
with (i) the enforcement of or preservation of rights under any of the Loan
Documents against the Borrower or any of its Subsidiaries or the administration
thereof after the occurrence of a Default or Event of Default and (ii) any
litigation, proceeding or dispute whether arising hereunder or otherwise, in any
way related to any Bank's or the Agent's relationship with the Borrower or any
of its Subsidiaries and (h) all reasonable fees, expenses and disbursements of
any Bank or the Agent incurred in connection with UCC searches or UCC filings.
The covenants of this Section 16 shall survive payment or satisfaction of all
other Obligations.
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Section 17. INDEMNIFICATION. The Borrower agrees to indemnify and hold
harmless the Agent, the Co-Agents, the Co-Arrangers, the Banks and their
respective shareholders, directors, agents, officers, subsidiaries and
affiliates from and against any and all claims, actions and suits whether
groundless or otherwise, and from and against any and all liabilities, losses,
damages and reasonable expenses of every nature and character arising out of
this Credit Agreement or any of the other Loan Documents or the transactions
contemplated hereby including, without limitation, (a) any actual or proposed
use by the Borrower or any of its Subsidiaries of the proceeds of any of the
Revolving Credit Loans or Letters of Credit, (b) the reversal or withdrawal of
any provisional credits granted by the Agent upon the transfer of funds from
bank agency or lock box accounts or in connection with the provisional honoring
of checks or other items, (c) any actual or alleged infringement of any patent,
copyright, trademark, service xxxx or similar right of the Borrower or any of
its Subsidiaries comprised in the Collateral, (d) the Borrower or any of its
Subsidiaries entering into or performing this Credit Agreement or any of the
other Loan Documents or (e) with respect to the Borrower and its Subsidiaries
and their respective properties and assets, the violation of any Environmental
Law, the disposal, discharge, release or threatened release of any Hazardous
Substances or any action, suit, proceeding or investigation brought or
threatened with respect to any Hazardous Substances (including, but not limited
to, claims with respect to wrongful death, personal injury or damage to
property), in each case including, without limitation, the reasonable fees and
disbursements of counsel and allocated costs of internal counsel incurred in
connection with any such investigation, litigation or other proceeding,
provided, however, that the foregoing indemnity as to any Person shall not apply
to liabilities, damages, losses, settlement expenses and expenses to the extent
that they arise from the willful misconduct or gross negligence of such
indemnified person or its Affiliates. In litigation, or the preparation
therefor, each of the Banks, the Co-Agents, the Co-Arrangers and the Agent shall
be entitled to select their own counsel and, in addition to the foregoing
indemnity, the Borrower agrees to pay promptly the reasonable fees and expenses
of such counsel. If, and to the extent that the obligations of the Borrower
under this Section 17 are unenforceable for any reason, the Borrower hereby
agrees to make the maximum contribution to the payment in satisfaction of such
indemnified obligations which is permissible under applicable law. The covenants
contained in this Section 17 shall survive payment or satisfaction in full of
all other Obligations.
Section 18. SURVIVAL OF COVENANTS, ETC. All covenants, agreements,
representations and warranties made herein, in the Revolving Credit Notes, in
any of the other Loan Documents or in any documents or other papers delivered by
or on behalf of the Borrower or any of its Subsidiaries pursuant hereto shall be
deemed to have been relied upon by the Banks and the Agent, notwithstanding any
investigation heretofore or hereafter made by any of them, and shall survive the
making by the Banks of any of the Revolving Credit Loans and the issuance,
extension or renewal of any Letters of Credit, as herein contemplated, and shall
continue in full force and effect so long as any Letter of Credit or any amount
due under this Credit Agreement or the Revolving Credit Notes or any of the
other Loan Documents remains outstanding or any Bank has any obligation to make
any Revolving Credit Loans or the Agent has any obligation to issue, extend or
renew any Letter of Credit, and for such further time as may be otherwise
expressly specified in this Credit Agreement. All statements contained in any
certificate or other paper delivered to any Bank or the Agent at any time by or
on behalf of the Borrower or any of its
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Subsidiaries pursuant hereto or in connection with the transactions contemplated
hereby shall constitute representations and warranties by the Borrower or such
Subsidiary hereunder.
Section 19. ASSIGNMENT AND PARTICIPATION.
Section 19.1. Conditions to Assignment by Banks. Except as provided
herein, each Bank may assign to one or more Eligible Assignees all or a portion
of its interests, rights and obligations under this Credit Agreement (including
all or a portion of its Commitment Percentage and Commitment and the same
portion of the Revolving Credit Loans at the time owing to it, the Revolving
Credit Notes held by it and its participating interest in the risk relating to
any Letters of Credit); provided that (a) each of the Agent and, unless a
Default or Event of Default shall have occurred and be continuing, the Borrower
shall have given its prior written consent to such assignment, which consent, in
the case of the Borrower, will not be unreasonably withheld, (b) each such
assignment shall be of a constant, and not a varying, percentage of all the
assigning Bank's rights and obligations under this Credit Agreement, (c) each
assignment shall be in an amount that is not less than $10,000,000 or the
remaining amount of its Commitment, if less, and (d) the parties to such
assignment shall execute and deliver to the Agent, for recording in the Register
(as hereinafter defined), an Assignment and Acceptance, substantially in the
form of Exhibit E hereto (an "Assignment and Acceptance"), together with any
Revolving Credit Notes subject to such assignment. Upon such execution,
delivery, acceptance and recording, from and after the effective date specified
in each Assignment and Acceptance, which effective date shall be at least five
(5) Business Days after the execution thereof, (i) the assignee thereunder shall
be a party hereto and, to the extent provided in such Assignment and Acceptance,
have the rights and obligations of a Bank hereunder, and (ii) the assigning Bank
shall, to the extent provided in such assignment and upon payment to the Agent
of the registration fee referred to in Section 19.3, be released from its
obligations under this Credit Agreement.
Section 19.2. Certain Representations and Warranties; Limitations;
Covenants. By executing and delivering an Assignment and Acceptance, the parties
to the assignment thereunder confirm to and agree with each other and the other
parties hereto as follows: (a) other than the representation and warranty that
it is the legal and beneficial owner of the interest being assigned thereby free
and clear of any adverse claim, the assigning Bank makes no representation or
warranty, express or implied, and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with this
Credit Agreement or the execution, legality, validity, enforceability,
genuineness, sufficiency or value of this Credit Agreement, the other Loan
Documents or any other instrument or document furnished pursuant hereto or the
attachment, perfection or priority of any security interest or mortgage; (b) the
assigning Bank makes no representation or warranty and assumes no responsibility
with respect to the financial condition of the Borrower and its Subsidiaries or
any other Person primarily or secondarily liable in respect of any of the
Obligations, or the performance or observance by the Borrower and its
Subsidiaries or any other Person primarily or secondarily liable in respect of
any of the Obligations or any of their other obligations under this Credit
Agreement or any of the other Loan
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Documents or any other instrument or document furnished pursuant hereto or
thereto; (c) such assignee confirms that it has received a copy of this Credit
Agreement, together with copies of the most recent financial statements referred
to in Section 7.4 and Section 8.4 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; (d) such assignee will, independently and
without reliance upon the assigning Bank, the Agent or any other Bank and based
on such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action under
this Credit Agreement; (e) such assignee represents and warrants that it is an
Eligible Assignee; (f) such assignee appoints and authorizes the Agent to take
such action as agent on its behalf and to exercise such powers under this Credit
Agreement and the other Loan Documents as are delegated to the Agent by the
terms hereof or thereof, together with such powers as are reasonably incidental
thereto; (g) such assignee agrees that it will perform in accordance with their
terms all of the obligations that by the terms of this Credit Agreement are
required to be performed by it as a Bank; (h) such assignee represents and
warrants that it is legally authorized to enter into such Assignment and
Acceptance; and (i) such assignee acknowledges that it has made arrangements
with the assigning Bank satisfactory to such assignee with respect to its pro
rata share of Letter of Credit Fees in respect of outstanding Letters of Credit.
Section 19.3. Register. The Agent shall maintain a copy of each Assignment
and Acceptance delivered to it and a register or similar list (the "Register")
for the recordation of the names and addresses of the Banks and the Commitment
Percentage of, and principal amount of the Revolving Credit Loans owing to and
Letter of Credit Participations purchased by, the Banks from time to time. The
entries in the Register shall be conclusive, in the absence of manifest error,
and the Borrower, the Agent and the Banks may treat each Person whose name is
recorded in the Register as a Bank hereunder for all purposes of this Credit
Agreement. The Register shall be available for inspection by the Borrower and
the Banks at any reasonable time and from time to time upon reasonable prior
notice. Upon each such recordation, the assigning Bank agrees to pay to the
Agent a registration fee in the sum of $3,500.
Section 19.4. New Revolving Credit Notes. 19.4.Upon its receipt of an
Assignment and Acceptance executed by the parties to such assignment, together
with each Revolving Credit Note subject to such assignment, the Agent shall (a)
record the information contained therein in the Register, and (b) give prompt
notice thereof to the Borrower and the Banks (other than the assigning Bank).
Within five (5) Business Days after receipt of such notice, the Borrower, at its
own expense, shall execute and deliver to the Agent, in exchange for each
surrendered Revolving Credit Note, a new Revolving Credit Note to the order of
such Eligible Assignee in an amount equal to the amount assumed by such Eligible
Assignee pursuant to such Assignment and Acceptance and, if the assigning Bank
has retained some portion of its obligations hereunder, a new Revolving Credit
Note to the order of the assigning Bank in an amount equal to the amount
retained by it hereunder. Such new Notes shall provide that they are
replacements for the surrendered Revolving Credit Notes, shall be in an
aggregate principal amount equal to the aggregate principal amount of the
surrendered Revolving Credit Notes, shall be dated the effective date of such
Assignment and
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Acceptance and shall otherwise be substantially in the form of the assigned
Revolving Credit Notes. The surrendered Revolving Credit Notes shall be canceled
and returned to the Borrower.
Section 19.5. Participations. Each Bank may sell participations to one or
more banks or other entities in all or a portion of such Bank's rights and
obligations under this Credit Agreement and the other Loan Documents; provided
that (a) each such participation shall be in an amount of not less than
$10,000,000, (b) any such sale or participation shall not affect the rights and
duties of the selling Bank hereunder to the Borrower and (c) the only right of
the assignor granted to the participant pursuant to such participation
arrangements with respect to waivers, amendments or modifications of the Loan
Documents shall be such assignor's right to approve waivers, amendments or
modifications that would require the consent of all Banks affected thereby.
Section 19.6. [Intentionally Omitted]
Section 19.7. Assignee or Participant Affiliated with the Borrower. If any
assignee Bank is an Affiliate of the Borrower, then any such assignee Bank shall
have no right to vote as a Bank hereunder or under any of the other Loan
Documents for purposes of granting consents or waivers or for purposes of
agreeing to amendments or other modifications to any of the Loan Documents or
for purposes of making requests to the Agent pursuant to Section 13.1 or Section
13.2, and the determination of the Majority Banks shall for all purposes of this
Agreement and the other Loan Documents be made without regard to such assignee
Bank's interest in any of the Revolving Credit Loans. If any Bank sells a
participating interest in any of the Revolving Credit Loans to a participant,
and such participant is the Borrower or an Affiliate of the Borrower, then such
transferor Bank shall promptly notify the Agent of the sale of such
participation. A transferor Bank shall have no right to vote as a Bank hereunder
or under any of the other Loan Documents for purposes of granting consents or
waivers or for purposes of agreeing to amendments or modifications to any of the
Loan Documents or for purposes of making requests to the Agent pursuant to
Section 13.1 or Section 13.2 to the extent that such participation is
beneficially owned by the Borrower or any Affiliate of the Borrower, and the
determination of the Majority Banks shall for all purposes of this Credit
Agreement and the other Loan Documents be made without regard to the interest of
such transferor Bank in the Revolving Credit Loans to the extent of such
participation.
Section 19.8. Miscellaneous Assignment Provisions. Any assigning Bank
shall retain its rights to be indemnified pursuant to Section 17 with respect to
any claims or actions arising prior to the date of such assignment. If any
assignee Bank is not incorporated under the laws of the United States of America
or any state thereof, it shall, prior to the date on which any interest or fees
are payable hereunder or under any of the other Loan Documents for its account,
deliver to the Borrower and the Agent certification as to its exemption from
deduction or withholding of any United States federal income taxes. If any
Reference Bank transfers all of its interest, rights and obligations under this
Credit Agreement, the Agent shall, in consultation with the Borrower and with
the consent of the Borrower and the Majority Banks, appoint another Bank to act
as a Reference Bank hereunder. Anything contained in this Section 19 to the
contrary notwithstanding, any Bank may at any time pledge all or any portion of
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its interest and rights under this Credit Agreement (including all or any
portion of its Revolving Credit Notes) to any of the twelve Federal Reserve
Banks organized under Section 4 of the Federal Reserve Act, 12 U.S.C. Section
341. No such pledge or the enforcement thereof shall release the pledgor Bank
from its obligations hereunder or under any of the other Loan Documents.
Section 19.9. Assignment by Borrower. The Borrower shall not assign or
transfer any of its rights or obligations under any of the Loan Documents
without the prior written consent of each of the Banks.
Section 20. NOTICES, ETC. Except as otherwise expressly provided in this
Credit Agreement, all notices and other communications made or required to be
given pursuant to this Credit Agreement or the Revolving Credit Notes or any
Letter of Credit Applications shall be in writing and shall be delivered in
hand, mailed by United States registered or certified first class mail, postage
prepaid, sent by overnight courier, or sent by facsimile and confirmed by
delivery via courier or postal service or by facsimile transmission
confirmation, as the case may be, addressed as follows:
(a) if to the Borrower, at 0000 Xxxxxxx Xxxxxxx, Xxxxx, XX 00000,
Attention: Chief Executive Officer, or at such other address for notice as the
Borrower shall last have furnished in writing to the Person giving the notice;
(b) if to the Agent, at 000 Xxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000,
XXX, Attention: Xxxxx X. Xxxxx, Managing Director, Asset Based Lending, or such
other address or addressee for notice as the Agent shall last have furnished in
writing to the Person giving the notice; and
(c) if to any Bank, at such Bank's address set forth on Schedule 1 hereto,
or such other address for notice as such Bank shall have last furnished in
writing to the Person giving the notice.
Any such notice or demand shall be deemed to have been duly given or made
and to have become effective (i) if delivered by hand, overnight courier or
facsimile to a responsible officer of the party to which it is directed, at the
time of the receipt thereof by such officer or the sending of such facsimile
with transmission confirmed and (ii) if sent by registered or certified
first-class mail, postage prepaid, on the third Business Day following the
mailing thereof.
Section 21. GOVERNING LAW. THIS CREDIT AGREEMENT AND, EXCEPT AS OTHERWISE
SPECIFICALLY PROVIDED THEREIN, EACH OF THE OTHER LOAN DOCUMENTS ARE CONTRACTS
UNDER THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS AND SHALL FOR ALL PURPOSES
BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF SAID COMMONWEALTH
(EXCLUDING THE LAWS APPLICABLE TO CONFLICTS OR CHOICE OF LAW). THE BORROWER
AGREES THAT ANY SUIT FOR THE ENFORCEMENT OF THIS CREDIT AGREEMENT OR ANY OF THE
OTHER LOAN DOCUMENTS MAY BE BROUGHT IN THE COURTS OF THE COMMONWEALTH OF
MASSACHUSETTS OR ANY FEDERAL COURT
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SITTING THEREIN AND CONSENTS TO THE NONEXCLUSIVE JURISDICTION OF SUCH COURT AND
SERVICE OF PROCESS IN ANY SUCH SUIT BEING MADE UPON THE BORROWER BY MAIL AT THE
ADDRESS SPECIFIED IN Section 20. THE BORROWER HEREBY WAIVES ANY OBJECTION THAT
IT MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH SUIT OR ANY SUCH COURT OR
THAT SUCH SUIT IS BROUGHT IN AN INCONVENIENT COURT.
Section 22. HEADINGS. The captions in this Credit Agreement are for
convenience of reference only and shall not define or limit the provisions
hereof.
Section 23. COUNTERPARTS. This Credit Agreement and any amendment hereof
may be executed in several counterparts and by each party on a separate
counterpart, each of which when executed and delivered shall be an original, and
all of which together shall constitute one instrument. In proving this Credit
Agreement it shall not be necessary to produce or account for more than one such
counterpart signed by the party against whom enforcement is sought.
Section 24. ENTIRE AGREEMENT, ETC. The Loan Documents and any other
documents executed in connection herewith or therewith express the entire
understanding of the parties with respect to the transactions contemplated
hereby. Neither this Credit Agreement nor any term hereof may be changed,
waived, discharged or terminated, except as provided in Section 26.
Section 25. WAIVER OF JURY TRIAL. Each party to this Credit Agreement
hereby waives its right to a jury trial with respect to any action or claim
arising out of any dispute in connection with this Credit Agreement, the
Revolving Credit Notes or any of the other Loan Documents, any rights or
obligations hereunder or thereunder or the performance of which rights and
obligations. Except as prohibited by law, the Borrower and each Guarantor hereby
waives any right it may have to claim or recover in any litigation referred to
in the preceding sentence any special, exemplary, punitive or consequential
damages or any damages other than, or in addition to, actual damages. The
Borrower and each Guarantor (a) certifies that no representative, agent or
attorney of any Bank or the Agent has represented, expressly or otherwise, that
such Bank or the Agent would not, in the event of litigation, seek to enforce
the foregoing waivers and (b) acknowledges that the Agent and the Banks have
been induced to enter into this Credit Agreement, the other Loan Documents to
which it is a party by, among other things, the waivers and certifications
contained herein.
Section 26. CONSENTS, AMENDMENTS, WAIVERS, ETC. Any consent or approval
required or permitted by this Credit Agreement to be given by the Banks may be
given, and any term of this Credit Agreement, the other Loan Documents or any
other instrument related hereto or mentioned herein may be amended, and the
performance or observance by the Borrower or any of its Subsidiaries of any
terms of this Credit Agreement, the other Loan Documents or such other
instrument or the continuance of any Default or Event of Default may be waived
(either generally or in a particular instance and either retroactively or
prospectively) with, but only with, the written consent of the Borrower and the
written consent of the Majority Banks.
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Notwithstanding the foregoing, (i) any decrease in the rate of interest on the
Revolving Credit Notes (other than in connection with the waiver of Section
5.10.2), any extension of scheduled maturity of the Revolving Credit Notes, any
increase in the amount of the Commitments of the Banks, any decrease in the
amount of commitment fee, Letter of Credit Fees or any other fee hereunder (in
each case in this clause (i) except that any amendment or modification to the
definitions in this Agreement relating to the calculation of the Borrowing Base
and eligibility criteria shall be approved by the Majority Banks and each of the
Co-Agents), any release of a substantial portion of the Collateral (other than
as provided for in clauses (iv) and (v) below) and any amendment of this Section
26 requires the written consent of the Borrower and the written consent of each
Bank affected thereby, (ii) the definition of "Majority Banks" or "Supermajority
Banks" may not be amended without the written consent of all of the Banks, (iii)
the definition of "Co-Agents" may not be amended without the written consent of
all of the Co-Agents, (iv) Collateral consisting of assets disposed of pursuant
to Section 9.6 may be released in connection with such disposition, (v)
Collateral consisting of the Canton Cast-Roll Facility and pledged stock or
membership interests constituting Collateral may be released in connection with
the permitted incurrence by the Borrower of the Canton Indebtedness or the
permitted disposition of the Canton Cast-Roll Facility (without implying any
such required permission will be given by the Banks), (vi) amendments or waivers
which affect the Availability Block (other than consents or waivers which have
the effect of directly decreasing the Availability Block) and amendments and
waivers of definitions of this Credit Agreement relating to eligibility criteria
for assets included in the Borrowing Base require the consent of Majority Banks
and each of the Co-Agents, (vii) amendments or waivers which have the effect of
directly decreasing the Availability Block, increasing the Eligible Fixed Asset
Cap or the cap on the amount of the Borrowing Base that may be allocated to
Eligible Inventory set forth clause (b) of the definition of Borrowing Base and
increases in the percentages set forth in the definition of Borrowing Base
require the consent of the Super-Majority Banks (which shall include each of the
Co-Agents), and (viii) the amount of the Agent's fee, any Letter of Credit Fees
or any other fees payable for the Agent's account and Section 15 may not be
amended without the written consent of the Agent. No waiver shall extend to or
affect any obligation not expressly waived or impair any right consequent
thereon. No course of dealing or delay or omission on the part of the Agent or
any Bank in exercising any right shall operate as a waiver thereof or otherwise
be prejudicial thereto. No notice to or demand upon the Borrower shall entitle
the Borrower to other or further notice or demand in similar or other
circumstances.
Section 27. SEVERABILITY. The provisions of this Credit Agreement are
severable and if any one clause or provision hereof shall be held invalid or
unenforceable in whole or in part in any jurisdiction, then such invalidity or
unenforceability shall affect only such clause or provision, or part thereof, in
such jurisdiction, and shall not in any manner affect such clause or provision
in any other jurisdiction, or any other clause or provision of this Credit
Agreement in any jurisdiction.
Section 28. TREATMENT OF CERTAIN CONFIDENTIAL INFORMATION.
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Section 28.1. Sharing of Information with Section 20 Subsidiary. The
Borrower acknowledges that from time to time financial advisory, investment
banking and other services may be offered or provided to the Borrower or one or
more of its Subsidiaries, in connection with this Credit Agreement or otherwise,
by a Section 20 Subsidiary. The Borrower, for itself and each of its
Subsidiaries, hereby authorizes (a) such Section 20 Subsidiary to share with the
Agent and each Bank any information delivered to such Section 20 Subsidiary by
the Borrower or any of its Subsidiaries, and (b) the Agent and each Bank to
share with such Section 20 Subsidiary any information delivered to the Agent or
such Bank by the Borrower or any of its Subsidiaries pursuant to this Credit
Agreement, or in connection with the decision of such Bank to enter into this
Credit Agreement; it being understood, in each case, that any such Section 20
Subsidiary receiving such information shall be bound by the confidentiality
provisions of this Credit Agreement. Such authorization shall survive the
payment and satisfaction in full of all of Obligations.
Section 28.2. Confidentiality. Each of the Banks and the Agent agrees, on
behalf of itself and each of its affiliates, directors, officers, employees and
representatives, to use reasonable precautions to keep confidential, in
accordance with their customary procedures for handling confidential information
of the same nature and in accordance with safe and sound banking practices, any
non-public information supplied to it by the Borrower or any of its Subsidiaries
pursuant to this Credit Agreement that is identified by such Person as being
confidential at the time the same is delivered to the Banks or the Agent,
provided that nothing herein shall limit the disclosure of any such information
(a) after such information shall have become public other than through a
violation of this Section 28, (b) to the extent required by statute, rule,
regulation or judicial process, (c) to counsel for any of the Banks or the
Agent, (d) to bank examiners or any other regulatory authority having
jurisdiction over any Bank or the Agent, or to auditors or accountants, (e) to
the Agent, any Bank or any Section 20 Subsidiary, (f) in connection with any
litigation to which any one or more of the Banks, the Agent or any Section 20
Subsidiary is a party, or in connection with the enforcement of rights or
remedies hereunder or under any other Loan Document, (g) to a Subsidiary or
affiliate of such Bank as provided in Section 28.1 or (h) to any assignee or
participant (or prospective assignee or participant) so long as such assignee or
participant agrees to be bound by the provisions of Section 8.9.1. The Agent,
the Banks and any Section 20 Subsidiary may refer to any of the Borrower and its
Subsidiaries in connection with any advertising, promotion or marketing
undertaken by the Agent, such Bank or such Section 20 Subsidiary and, for such
purpose, the Agent, such Bank or such Section 20 Subsidiary may utilize any
trade name, trademark, logo or other distinctive symbol associated with the
Borrower or any of its Subsidiaries or any of their businesses.
Section 28.3. Prior Notification. Unless specifically prohibited by
applicable law or court order, each of the Banks and the Agent shall, prior to
disclosure thereof, notify the Borrower of any request for disclosure of any
such non-public information by any governmental agency or representative thereof
(other than any such request in connection with an examination of the financial
condition of such Bank by such governmental agency) or pursuant to legal
process.
-108-
Section 28.4. Other. In no event shall any Bank or the Agent be obligated
or required to return any materials furnished to it or any Section 20 Subsidiary
by the Borrower or any of its Subsidiaries. The obligations of each Bank under
this Section 28 shall supersede and replace the obligations of such Bank under
any confidentiality letter in respect of this financing signed and delivered by
such Bank to the Borrower prior to the date hereof and shall be binding upon any
assignee of, or purchaser of any participation in, any interest in any of the
Loans or Reimbursement Obligations from any Bank.
IN WITNESS WHEREOF, the undersigned have duly executed this Credit
Agreement as a sealed instrument as of the date first set forth above.
THE BORROWER:
REPUBLIC TECHNOLOGIES INTERNATIONAL, LLC
By:_____________________________________
Name:
Title:
THE GUARANTORS:
REPUBLIC TECHNOLOGIES
INTERNATIONAL HOLDINGS, LLC
By:_____________________________________
Name:
Title:
RTI Capital Corp.
By:_____________________________________
Name:
Title:
Bliss & Xxxxxxxx, LLC
By:_____________________________________
Name:
Title:
CANADIAN DRAWN STEEL COMPANY INC.
By:_____________________________________
Name:
Title:
NIMISHILLEN & TUSCARAWAS, LLC
By:_____________________________________
Name:
Title:
THE BANKS AND THE CO-AGENTS:
BANKBOSTON, N.A., individually,
as Administrative Agent and
Co-Book Manager
By:_____________________________________
Name:
Title:
BANK OF AMERICA, N.A., individually, as
Syndication Agent and Co-Book Manager
By:_____________________________________
Name:
Title:
THE CHASE MANHATTAN BANK, individually,
as Documentation Agent and
Co-Book Manager
By:_____________________________________
Name:
Title:
FOOTHILL CAPITAL CORPORATION
By:_____________________________________
Name:
Title:
XXXXXX FINANCIAL, INC.
By:_____________________________________
Name:
Title:
CONGRESS FINANCIAL CORPORATION
By:_____________________________________
Name:
Title:
THE CIT GROUP / BUSINESS CREDIT, INC.
By:_____________________________________
Name:
Title:
LASALLE BUSINESS CREDIT, INC.
By:_____________________________________
Name:
Title:
MELLON BANK, N.A.
By:_____________________________________
Name:
Title:
DIME COMMERCIAL CORP.
By:_____________________________________
Name:
Title:
GREENTREE FINANCIAL SERVICING
CORPORATION
By:_____________________________________
Name:
Title:
ORIX BUSINESS CREDIT, INC.
By:_____________________________________
Name:
Title:
SUNROCK CAPITAL CORP.
By:_____________________________________
Name:
Title:
UNION BANK OF CALIFORNIA, N.A.
By:_____________________________________
Name:
Title:
