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U.S. $200,000,000
CREDIT AGREEMENT
Dated as of November 19, 1999
by and among
National Steel Corporation
as Borrower
and
The Lenders and Issuers Party hereto
and
Citicorp USA, Inc.
as Administrative Agent
and
The Fuji Bank, Limited
as Syndication Agent and Arranger
and
Salomon Smith Barney Inc.
as Book Manager and Arranger
Weil, Gotshal & Manges LLP
767 Fifth Avenue
New York, NY 10153-0119
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Table of Contents
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Article I Definitions, Interpretation and Accounting Terms............................. 1
Section 1.1 Defined Terms................................................................ 1
Section 1.2 Accounting Terms and Principles.............................................. 29
Section 1.3 Certain Terms and References................................................. 30
Section 1.4 Time Periods................................................................. 31
Section 1.5 Quantities................................................................... 31
Section 1.6 Pronouns..................................................................... 32
Section 1.7 Construction................................................................. 32
Section 1.8 Certain Computations......................................................... 32
Article II The Facilities............................................................... 32
Section 2.1 The Commitments.............................................................. 32
Section 2.2 Borrowing Procedures......................................................... 33
Section 2.3 Swing Loans.................................................................. 34
Section 2.4 Letters of Credit............................................................ 36
Section 2.5 Reduction and Termination of the Commitments................................. 42
Section 2.6 Repayment of Loans........................................................... 42
Section 2.7 Evidence of Indebtedness..................................................... 42
Section 2.8 Optional Prepayments......................................................... 43
Section 2.9 Mandatory Prepayments........................................................ 44
Section 2.10 Interest..................................................................... 45
Section 2.11 Conversion and Continuation Options.......................................... 46
Section 2.12 Fees......................................................................... 47
Section 2.13 Payments and Computations; Protective Advances............................... 47
Section 2.14 Cash Collateral Account...................................................... 50
Section 2.15 Special Provisions Governing Eurodollar Rate Loans........................... 50
Section 2.16 Capital Adequacy............................................................. 52
Section 2.17 Taxes........................................................................ 53
Section 2.18 Substitution of Lenders...................................................... 54
Section 2.19 Collateral Audits............................................................ 55
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Article III Conditions Precedent to the Effectiveness of this Agreement and to Loans
and Letters of Credit........................................................ 55
Section 3.1 Conditions Precedent to the Effectiveness of this Agreement.................. 55
Section 3.2 Conditions Precedent to Each Loan and Letter of Credit....................... 58
Article IV Representations and Warranties............................................... 59
Section 4.1 Corporate Existence; Compliance with Law..................................... 59
Section 4.2 Corporate Power; Authorization; Enforceable Obligations...................... 60
Section 4.3 Financial Statements......................................................... 61
Section 4.4 Legal Proceedings............................................................ 62
Section 4.5 Taxes........................................................................ 62
Section 4.6 Full Disclosure.............................................................. 63
Section 4.7 Margin Regulations........................................................... 63
Section 4.8 Ownership of the Material Subsidiaries....................................... 63
Section 4.9 ERISA........................................................................ 63
Section 4.10 Liens and Encumbrances....................................................... 64
Section 4.11 Related Documents............................................................ 64
Section 4.12 No Burdensome Restrictions; No Defaults...................................... 65
Section 4.13 No Other Ventures............................................................ 65
Section 4.14 Investment Company Act....................................................... 66
Section 4.15 Public Utility Holding Company Act........................................... 66
Section 4.16 Insurance.................................................................... 66
Section 4.17 Labor Matters................................................................ 66
Section 4.18 Use of Proceeds.............................................................. 66
Section 4.19 Environmental Matters........................................................ 67
Section 4.20 Ownership of Properties...................................................... 67
Section 4.21 Existing Indebtedness........................................................ 68
Section 4.22 Solvency..................................................................... 68
Section 4.23 Year 2000 Compliance......................................................... 69
Article V Financial Covenants.......................................................... 69
Section 5.1 Leverage Ratio............................................................... 69
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Section 5.2 Minimum Interest Coverage Ratio............................................. 70
Section 5.3 Capital Expenditures........................................................ 71
Article VI Reporting Covenants......................................................... 72
Section 6.1 Financial Statements........................................................ 72
Section 6.2 Default Notices............................................................. 74
Section 6.3 Asset Sales................................................................. 75
Section 6.4 ERISA Matters............................................................... 75
Section 6.5 Litigation.................................................................. 75
Section 6.6 Notices under Related Documents............................................. 76
Section 6.7 SEC Filings; Press Releases................................................. 76
Section 6.8 Labor Relations............................................................. 76
Section 6.9 Insurance................................................................... 76
Section 6.10 Environmental Matters....................................................... 76
Section 6.11 Other Information........................................................... 77
Article VII Affirmative Covenants....................................................... 78
Section 7.1 Preservation of Corporate Existence, Etc.................................... 78
Section 7.2 Compliance with Law, Etc.................................................... 78
Section 7.3 Conduct of Business......................................................... 78
Section 7.4 Payment of Taxes, Etc....................................................... 78
Section 7.5 Maintenance of Insurance.................................................... 78
Section 7.6 Access...................................................................... 79
Section 7.7 Keeping of Books............................................................ 79
Section 7.8 Maintenance of Properties, Etc.............................................. 79
Section 7.9 Maintenance of Contractual Obligations, Etc................................. 79
Section 7.10 Application of Proceeds..................................................... 80
Section 7.11 Year........................................................................ 80
Section 7.12 Environmental............................................................... 80
Section 7.13 Borrowing Base Determination................................................ 80
Section 7.14 Year 2000 Compliance........................................................ 81
Section 7.15 Accounting Changes; Year.................................................... 81
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Article VIII Negative Covenants.......................................................... 81
Section 8.1 Liens, Etc.................................................................. 81
Section 8.2 Indebtedness................................................................ 83
Section 8.3 Guaranty Obligations........................................................ 84
Section 8.4 Restrictions on Subsidiary Distributions; No New Negative Pledge............ 84
Section 8.5 Restricted Payments......................................................... 84
Section 8.6 Restriction on Fundamental Changes.......................................... 85
Section 8.7 Sale of Assets.............................................................. 85
Section 8.8 Investments in Other Persons................................................ 85
Section 8.9 Change in Nature of Business................................................ 86
Section 8.10 Compliance with ERISA....................................................... 86
Section 8.11 Modification of Related Documents........................................... 86
Section 8.12 Modification of Existing Indebtedness Agreements............................ 87
Section 8.13 Transactions with Affiliates................................................ 87
Section 8.14 Operating Leases............................................................ 88
Section 8.15 Sale and Leaseback Transactions............................................. 88
Section 8.16 Cancellation of Indebtedness Owed to It..................................... 89
Section 8.17 Material Subsidiaries....................................................... 89
Section 8.18 Capital Structure........................................................... 89
Section 8.19 No Speculative Transactions................................................. 89
Article IX Events of Default........................................................... 89
Section 9.1 Events of Default........................................................... 89
Section 9.2 Remedies.................................................................... 92
Section 9.3 Cash Collateralization of Letters of Credit................................. 92
Article X The Administrative Agent.................................................... 92
Section 10.1 Authorization and Action.................................................... 92
Section 10.2 Agents' Reliance, Etc....................................................... 93
Section 10.3 The Administrative Agent as Lender.......................................... 94
Section 10.4 Lender Credit Decision...................................................... 94
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Section 10.5 Indemnification............................................................. 95
Section 10.6 Successor Administrative Agent.............................................. 95
Section 10.7 Concerning the Collateral and the Collateral Documents...................... 96
Article XI Miscellaneous............................................................... 98
Section 11.1 Amendments, Waivers, Etc.................................................... 98
Section 11.2 Assignments and Participations.............................................. 99
Section 11.3 Costs; Expenses; Indemnities................................................ 102
Section 11.4 Right of Set-off............................................................ 105
Section 11.5 Sharing of Payments, Etc.................................................... 105
Section 11.6 Independence of Representations and Warranties.............................. 106
Section 11.7 Governing Law............................................................... 106
Section 11.8 Submission to Jurisdiction; Consent to Service of Process................... 106
Section 11.9 Notices, Etc................................................................ 107
Section 11.10 No Waiver; Remedies......................................................... 107
Section 11.11 Execution in Counterparts; Effectiveness; Assignments by the Borrower....... 108
Section 11.12 Entire Agreement............................................................ 108
Section 11.13 Further Assurances.......................................................... 108
Section 11.14 Confidentiality............................................................. 108
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Schedules
Schedule I - Commitments
Schedule II - Applicable Lending Offices and
Addresses for Notices
Schedule III - Applicable Margins and Fees
Schedule IV - Advance Rates
Schedule 1.1 - Non-Material Subsidiaries
Schedule 4.2 - Permits
Schedule 4.9 - Employee Benefit Plans
Schedule 4.11 - Amendments to Related Documents
Schedule 4.13 - Joint Ventures and Partnerships
Schedule 4.19(d) - Disposal Facilities
Schedule 4.21 - Existing Indebtedness
Schedule 8.1 - Existing Liens
Schedule 8.8 - Existing Investments
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Exhibits
Exhibit A - Form of Revolving Credit Note
Exhibit B - Form of Notice of Borrowing
Exhibit C - Form of Notice of Conversion or Continuation
Exhibit D - Form of Security Agreement
Exhibit E - Form of Pledge Agreement
Exhibit F - Form of Intercreditor Agreement
Exhibit G - Form of Borrowing Base Certificate
Exhibit H - Form of Guaranty
Exhibit I - Form of Opinion of Counsel for the Loan Parties
Exhibit J - Form of Assignment and Acceptance
Exhibit K - Form of Letter of Credit Request
Exhibit L - Eleventh Supplemental Indenture
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CREDIT AGREEMENT, dated as of November 19, 1999, by and among
National Steel Corporation, a Delaware corporation (the "Borrower"), the Lenders
(as defined below), the Issuers (as defined below) and Citicorp USA, Inc.
("Citicorp"), as agent for the Lenders and the Issuers (in such capacity, the
"Administrative Agent") and The Fuji Bank, Limited ("Fuji Bank"), as syndication
agent for the Lenders and the Issuers (in such capacity, the "Syndication
Agent").
W i t n e s s e t h:
Whereas, the Borrower has requested that the Lenders and Issuers make
available for the purposes specified in this Agreement a revolving credit and
letter of credit facility; and
Whereas, the Borrower has agreed to secure its obligations to the
Lenders and Issuers in connection with such financing with security interests
in, and liens on, all of the Borrower's inventory and other Collateral (as
hereinafter defined), as provided for herein; and
Whereas, the Lenders and Issuers are willing to make available to the
Borrower such revolving credit and letter of credit facility upon the terms and
subject to the conditions set forth herein;
Now, Therefore, in consideration of the foregoing, the mutual
covenants and obligations herein set forth and other good and valuable
consideration, the adequacy and receipt of which is hereby acknowledged, and in
reliance upon the representations, warranties and covenants herein contained,
the parties hereto, intending to be legally bound, hereby agree as follows:
ARTICLE I
Definitions, Interpretation And Accounting Terms
Section 1.1 Defined Terms. As used in this Agreement, the following
terms have the following meanings (such meanings to be equally applicable to
both the singular and plural forms and, unless the context otherwise requires,
to all genders and all other grammatical forms of the terms defined):
"Account" has the meaning specified in the Security Agreement.
"Account Debtor" has the meaning specified in the Security Agreement.
"Administrative Agent" has the meaning specified at the beginning of
this Agreement.
"Advance Rate" means, at any time, in respect of any class of Eligible
Inventory, the advance rate set forth on Schedule IV (Advance Rates)
corresponding to
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such class, as such rate may be increased or decreased from time to time with
respect to all or any portion of any class of Eligible Inventory by the
Administrative Agent in its sole discretion, acting commercially reasonably and
in accordance with its regular practices and policies applicable to asset based
loans with advance rates based on current assets in effect from time to time
(which practices and policies may be changed by the Administrative Agent in its
sole discretion), with any change in such rates to be effective two (2) Business
Days after written notice thereof from the Administrative Agent to the Borrower;
provided, however, that the Administrative Agent shall not increase such rates
above the rates set forth on Schedule IV (Advance Rates) without the consent of
the Super Majority Lenders; provided, further, that the Administrative Agent
shall not increase such rates more than five percent (5%) above the rates set
forth in Schedule IV (Advance Rates) without the consent of all of the Lenders.
"Affiliate" means, with respect to any Person, any other Person which,
directly or indirectly, controls, is controlled by or is under common control
with such Person and each officer, director, general partner or joint-venturer
of such Person. For the purposes of this definition, "control" means the
possession of the power to direct or cause the direction of management and
policies of such Person, whether through the ownership of voting securities, by
contract or otherwise.
"Affiliate Transaction" has the meaning specified in Section 8.13(a)
(General Limitation on Affiliate Transactions).
"Agreement" means this Credit Agreement, together with all exhibits
and schedules hereto, as the same may be amended, supplemented or otherwise
modified from time to time.
"Alternative Currency" means any lawful currency other than Dollars
which is freely transferable into Dollars.
"Applicable Lending Office" means, with respect to any Lender, its
Domestic Lending Office in the case of a Base Rate Loan and its Eurodollar
Lending Office in the case of a Eurodollar Rate Loan.
"Applicable Margin" means (i) during the period commencing on the
Effective Date and ending the first day of the first calendar month following
the receipt by the Administrative Agent of the Financial Statements pursuant to
Section 6.1(a) (Quarterly Financial Statements and Compliance Certificates) for
the Quarter ending September 30, 2000, with respect to the Loans (a) maintained
as Base Rate Loans, a rate equal to three-fourth of one percent (0.75%) per
annum and (b) maintained as Eurodollar Rate Loans, a rate equal to 1.75% per
annum and (ii) thereafter, as of any date of determination, a per annum rate
equal to the rate set forth on Schedule III (Applicable Margins and Fees)
opposite the applicable type of Loans and the then applicable Interest Coverage
Ratio set forth on such schedule.
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Subsequent changes in the Applicable Margin resulting from a change in
the Interest Coverage Ratio shall become effective as to all Loans the first day
of the first calendar month following delivery by the Borrower to the
Administrative Agent of new Financial Statements for each Quarter pursuant to
Section 6.1(a) (Quarterly Financial Statements and Compliance Certificates) or
each Year pursuant to Section 6.1(b) (Annual Audited Financial Statements).
Notwithstanding anything to the contrary set forth in this Agreement (including
the then effective Interest Coverage Ratio), if the Borrower shall fail to
deliver Financial Statements (i) pursuant to Section 6.1(a), within fifty (50)
days after the end of any Quarter or (ii) pursuant to Section 6.1(b), within
ninety-five (95) days after the end of any Year, the Applicable Margin from and
including the fifty-first (51st) or ninety-sixth (96th) day, as the case may be,
after the end of such Quarter or Year, as the case may be, to but not including
the date the Borrower delivers to the Administrative Agent such Financial
Statements shall conclusively equal the highest Applicable Margin set forth
above in this definition.
"Approved Fund" means, with respect to any Lender that is a fund that
invests in bank loans, any other fund that invests in bank loans and is advised
or managed by the same investment advisor as such Lender or by an Affiliate of
such investment advisor.
"Asset Sale" means a sale, lease or other transfer of (a) any shares
of Stock or Stock Equivalents of a Material Subsidiary, (b) all or substantially
all of the assets or any division or line of business of the Borrower or any
Material Subsidiary or (c) any other asset of the Borrower or a Material
Subsidiary outside the ordinary course of business.
"Assignment and Acceptance" means an assignment and acceptance, in
substantially the form of Exhibit J, entered into by a Lender and an Eligible
Assignee and accepted by the Administrative Agent.
"Attributable Securitization Indebtedness" means the aggregate amount
theretofore paid to, or owing to, the Borrower for the sale of any Account under
the Receivables Purchase Facility to the extent such Account has not yet been
repaid, or been deemed repaid, by the corresponding Account Debtor or
repurchased by the Borrower. For the avoidance of doubt, it is understood and
agreed that the parties intend that the amount of Attributable Securitization
Indebtedness outstanding at any time approximate as closely as possible the
principal amount of Indebtedness that would be outstanding at such time under
the Receivables Purchase Facility if such Receivables Purchase Facility were
restructured as a secured loan agreement instead of a purchase agreement.
"Availability Reserves" means, as of two (2) Business Days after the
receipt of written notice by the Borrower from the Administrative Agent of any
determination thereof, such reserves as the Administrative Agent, in its sole
discretion acting commercially reasonably and in accordance with its regular
business practices and policies applicable to asset based loans with advance
rates based on current assets in
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effect from time to time (which practices and policies may be changed by the
Administrative Agent in its sole discretion), may from time to time establish as
reserves against the Available Credit in order either (i) to preserve the value
of, or the Administrative Agent's Lien on, the Collateral or (ii) to reflect
unanticipated liabilities of the Borrower arising after the Effective Date that
are reasonably likely to affect adversely the Secured Parties' rights or
remedies in respect of the Collateral; provided, however, that "Availability
Reserves" shall, unless the Administrative Agent determines otherwise, include
the Outside Processing Inventory Reserve.
"Available Credit" means, at any time, an amount equal to (a) the
lower of (i) the then effective aggregate Commitments and (ii) the Borrowing
Base at such time minus (b) the aggregate Outstanding Amounts at such time.
"Balance Sheet Date" has the meaning specified in Section 4.3(a)
(Accuracy of Financial Statements).
"Base Rate" means, with respect to any period, a fluctuating interest
rate per annum as shall be in effect from time to time, which rate per annum
shall be equal at all times to the highest of:
(a) the rate of interest announced publicly by Citibank in New York,
New York, from time to time, as Citibank's base rate;
(b) the sum (adjusted to the nearest one-fourth of one percent
(0.25%) or, if there is no nearest one-fourth of one percent (0.25%), to
the next higher one-fourth of one percent) (0.25%) of (i) one-half of one
percent (0.5%) per annum plus (ii) the rate per annum obtained by dividing
(A) the latest three-week moving average of secondary market morning
offering rates in the United States for three-month certificates of deposit
of major U.S. money market banks, such three-week moving average being
determined weekly on each Monday (or, if any such Monday is not a Business
Day, on the next succeeding Business Day) for the three-week period ending
on the previous Friday by Citibank on the basis of such rates reported by
certificate of deposit dealers to, and published by, the Federal Reserve
Bank of New York or, if such publication shall be suspended or terminated,
on the basis of quotations for such rates received by Citibank from three
(3) New York certificate of deposit dealers of recognized standing selected
by Citibank, by (B) a percentage equal to one hundred percent (100%) minus
the average of the daily percentages specified during such three-week
period by the Federal Reserve Board for determining the maximum reserve
requirement (including any emergency, supplemental or other marginal
reserve requirement) for Citibank in respect of liabilities consisting of
or including (among other liabilities) three-month Dollar nonpersonal time
deposits in the United States, plus (iii) the average during such three-
week period of the maximum annual assessment rates estimated by Citibank
for determining the then current annual
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assessment payable by Citibank to the Federal Deposit Insurance Corporation
(or any successor) for insuring Dollar deposits in the United States; and
(c) the sum of (i) one-half of one percent (0.5%) per annum (or, in
respect of the period from December 15, 1999 to January 15, 2000, two
percent (2%)) plus (ii) the Federal Funds Rate.
"Base Rate Loan" means Loans the rate of interest applicable to which
is based upon the Base Rate.
"Book Value" means, as to any Inventory in respect of which such
amount is to be determined, the lower of (i) the cost thereof (as reflected in
the general ledgers of the owner of such Inventory and determined in accordance
with GAAP calculated on a first in first out basis) or (ii) the market value
thereof.
"Borrower" has the meaning specified at the beginning of this
Agreement.
"Borrowing" means a borrowing consisting of Loans made on the same day
by the Lenders ratably according to their respective Commitments.
"Borrowing Base" means, at any time, (a) the product of (i) the
Advance Rate then in effect for each class of Eligible Inventory and (ii) the
Book Value of the Eligible Inventory constituting such class at such time less
(b) any Eligibility Reserves then in effect with respect to such Eligible
Inventory and any Availability Reserves then in effect.
"Borrowing Base Certificate" means a certificate of the Borrower
substantially in the form of Exhibit G.
"Borrowing Base Deficiency" means, at any time, the failure of the
Borrowing Base to exceed the aggregate Outstanding Amounts.
"Business Day" means a day of the year on which banks are not required
or authorized to close in New York City and, if the applicable Business Day
relates to notices, determinations, fundings and payments in connection with the
Eurodollar Rate or any Eurodollar Rate Loans, a day on which dealings in Dollar
deposits are also carried on in the London interbank market.
"Capital Expenditures" means, with respect to any Person for any
period, the aggregate of amounts that would be reflected as additions to
property, plant or equipment on a consolidated balance sheet of such Person and
its Subsidiaries prepared in conformity with GAAP, excluding interest
capitalized during construction.
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"Capitalized Lease" means, with respect to any Person, any lease of
property by such Person as lessee which would be accounted for as a capital
lease on a balance sheet of such Person prepared in conformity with GAAP.
"Capitalized Lease Obligations" means, with respect to any Person, the
capitalized amount of all obligations of such Person or any of its Subsidiaries
under Capitalized Leases, as determined on a consolidated basis in conformity
with GAAP.
"Cash Collateral Account" has the meaning specified in Section 2.14
(Cash Collateral Account).
"Cash Dominion Event" means (a) the occurrence of an Event of Default
or (b) the failure to exceed thirty million Dollars ($30,000,000) of the sum of
the Available Credit plus the Receivables Availability.
"Cash Dominion Period" means the period of time between the occurrence
of a Cash Dominion Event and the next succeeding Cash Dominion Release Date.
"Cash Dominion Release Date" means any date on which the sum of the
Available Credit plus the Receivables Availability shall have exceeded fifty
million Dollars ($50,000,000) for eleven (11) consecutive Business Days;
provided, however, that no Event of Default shall have occurred or be continuing
during such period.
"Cash Equivalents" means (a) as long as the sum of the Available
Credit plus the Receivables Availability shall exceed two hundred million
Dollars ($200,000,000), "Cash Equivalents", as defined in Section 1.01
(Definitions) of the Indenture and (b) otherwise, (i) securities issued or fully
guaranteed or insured by the government of the United States or any agency
thereof, (ii) certificates of deposit, eurodollar time deposits, overnight bank
deposits and bankers' acceptances of any Lender or any commercial bank organized
under the laws of the United States, any state thereof or the District of
Columbia or any foreign bank or its branches or agencies (fully protected
against currency fluctuations), which, at the time of acquisition, are rated at
least "A-1" by Standard & Poor or "P-1" by Moody's, (iii) commercial paper of an
issuer rated at least "A-1" by Standard & Poor or "P-1" by Moody's and (iv)
shares of any money market fund that (A) has at least ninety-five percent (95%)
of its assets invested continuously in the types of investments referred to in
clauses (i) through (iii) above, (B) has net assets of not less than five
hundred million Dollars ($500,000,000) and (C) is rated at least "A-1" by
Standard & Poor or "P-1" by Moody's; provided, however, that the maturities of
all obligations of the type specified in clauses (i) through (iii) above shall
not exceed one hundred and eighty (180) days.
"Cash Interest Expense" means, with respect to any Person for any
period, the Interest Expense of such Person for such period less the Non-Cash
Interest Expense of such Person for such period.
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"Change of Control" means any of the following: (a) NKK shall cease to
own and control, directly or indirectly, all of the voting rights associated
with a majority of the outstanding Stock and the outstanding Voting Stock of the
Borrower, (b) NKK shall cease to own and control all of the economic rights
associated with twenty five percent (25%) or more of the outstanding Stock of
the Borrower or (c) the Borrower shall cease to own and control, directly or
indirectly, all of the economic and voting rights associated with all of the
outstanding Stock of any of its Material Subsidiaries.
"Citibank" means Citibank, N.A., a national banking association.
"Citicorp" has the meaning specified at the beginning of this
Agreement.
"Code" means the United States Internal Revenue Code of 1986, as
amended.
"Collection Account" has the meaning specified in the Receivables
Purchase Agreement.
"Collateral" means all property and interests in property and proceeds
thereof now owned or hereafter acquired by any Loan Party in or upon which a
Lien is purported to be granted under any of the Collateral Documents.
"Collateral Documents" means the Security Agreement, the Pledge
Agreement and any other document executed and delivered by a Loan Party granting
a Lien on any of its property to secure payment of the Secured Obligations.
"Commitment" means, as to each Lender, the commitment of such Lender
to make Loans and acquire interests in other Outstanding Amounts in the
aggregate principal amount outstanding not to exceed the amount set forth
opposite such Lender's name on Schedule I under the caption "Commitment," as
amended to reflect each Assignment and Acceptance executed by such Lender and as
such amount may be reduced or modified pursuant to this Agreement. "Commitments"
means the aggregate Commitments of all Lenders.
"Compliance Certificate" has the meaning specified in Section 6.1
(Financial Statements).
"Consolidated Net Income" means, for any Person for any period, the
net income (or loss) of such Person and its Subsidiaries for such period,
determined on a consolidated basis in conformity with GAAP.
"Constituent Documents" means, with respect to any Person, (i) the
certificate of incorporation (or the equivalent organizational documents) of
such Person, (ii) the bylaws (or the equivalent governing documents) of such
Person and (iii) any document generally setting forth the manner of election and
duties of the directors or
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managing members of such Person (if any) and the designation, amount and/or
relative rights, limitations and preferences of any class or series of such
Person's Stock.
"Contaminant" means any material, substance or waste that is
classified, regulated or otherwise characterized under any Environmental Law as
hazardous, toxic, a contaminant or a pollutant or by other words of similar
meaning or regulatory effect, including any petroleum or petroleum-derived
substance or waste, asbestos and polychlorinated biphenyls.
"Contractual Obligation" of any Person means any obligation, promise,
agreement (whether written or oral, express or implied and whether or not
legally binding), contract (including settlements and collective bargaining
agreements), undertaking or similar provision of any security issued by such
Person or of any agreement, undertaking, contract, lease, indenture, mortgage,
deed of trust or other instrument (excluding a Loan Document) to which such
Person is a party or by which it or any of its property is bound or to which any
of its properties is subject.
"Credit Event" has the meaning specified in Section 3.2 (Conditions
Precedent to Each Loan and Letter of Credit).
"Debt Issuance" means the incurrence of any Financial Covenant Debt by
the Borrower or any of its Subsidiaries.
"Default" means any event which with the passing of time or the giving
of notice or both would become an Event of Default.
"Documentary Letter of Credit" means any letter of credit issued by an
Issuer pursuant to Section 2.4(a) (Obligation to Issue) for the account of the
Borrower which can be drawn upon presentation of documents evidencing the sale
or shipment of goods purchased by the Borrower in the ordinary course of its
business.
"Dollar" and the sign "$" each mean the lawful currency of the United
States.
"Dollar Equivalent" means with respect to any Alternative Currency at
the time of determination thereof, the equivalent of such currency in Dollars
determined at the rate of exchange quoted by the Administrative Agent in New
York, New York at 11:00 A.M. (New York time) on the date of determination, to
prime banks in New York for the spot purchase in the New York foreign exchange
market of such amount of Dollars with such Alternative Currency.
"Domestic Lending Office" means, with respect to any Lender, the
office of such Lender specified as its "Domestic Lending Office" opposite its
name on Schedule II or on the Assignment and Acceptance by which it became a
Lender or such
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other office of such Lender as such Lender may from time to time specify to the
Borrower and the Administrative Agent.
"EBITDA" means, with respect to any Person for any period, an amount
equal to (a) Consolidated Net Income of such Person for such period plus (b) the
sum of, in each case to the extent included in the calculation of Consolidated
Net Income of such Person for such period in accordance with GAAP, but without
duplication, (i) any provision for income taxes, (ii) Interest Expense, (iii)
loss from extraordinary items, (iv) depreciation, depletion and amortization of
intangibles or financing or acquisition costs and (v) all other non-cash charges
and non-cash losses for such period, including the amount of any compensation
deduction as the result of any grant of Stock or Stock Equivalents to employees,
officers, directors or consultants minus (c) the sum of, in each case to the
extent included in the calculation of Consolidated Net Income of such Person for
such period in accordance with GAAP, but without duplication, (i) any credit for
income tax, (ii) gains from extraordinary items for such period, (iii) any
aggregate net gain (but not any aggregate net loss) from the sale, exchange or
other disposition of capital assets by such Person, (iv) any other non-cash
gains which have been added in determining Consolidated Net Income and (v) cash
payments in respect of employee or retiree benefits (but only to the extent not
reflected in Consolidated Net Income in accordance with Statement of Financial
Accounting Standard No. 106 (Employer's Accounting for Postretirement Benefits
Other than Pensions) of the Financial Accounting Standards Board).
"Effective Date" means the date on which this Agreement becomes
effective.
"Eligibility Reserves" means, effective as of two (2) Business Days
after the date of written notice of any determination thereof to the Borrower by
the Administrative Agent, such amounts as the Administrative Agent, in its sole
discretion, acting commercially reasonably and in accordance with its regular
business practices and policies in effect from time to time and applicable to
asset based loans with advance rates based on current assets (which practices
and policies may be changed by the Administrative Agent in its sole discretion),
may from time to time establish against the gross amounts of Eligible Inventory
to reflect risks or contingencies that (a) arise after the Effective Date, (b)
relate to or may otherwise affect the Collateral or the Secured Parties' risks
or remedies in respect thereof and (c) have not already been taken into account
in the determination of Eligible Inventory.
"Eligible Assignee" means (a) a Lender or any Affiliate of such
Lender; (b) a commercial bank having total assets in excess of five billion
Dollars ($5,000,000,000) acceptable to the Borrower (which acceptance may not be
unreasonably withheld); or (c) a finance company, insurance company, other
financial institution or fund, acceptable to the Administrative Agent and the
Borrower, each acting commercially reasonably, that regularly is engaged in
making, purchasing or investing in
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loans; provided, however, that, with respect to clauses (b) and (c) of this
definition, no consent of the Borrower shall be required during the continuance
of an Event of Default.
"Eligible Inventory" means Inventory of the Borrower (other than any
Inventory which has been consigned by the Borrower) (i) which is owned solely by
the Borrower, (ii) with respect to which the Administrative Agent has a valid
and perfected first-priority Lien, (iii) with respect to which no warranty
contained in any of the Loan Documents has been breached, (iv) which is not, as
determined in the sole discretion of the Administrative Agent acting in a
commercially reasonable manner, obsolete or unmerchantable and (v) which the
Administrative Agent deems to be Eligible Inventory, based on such credit and
collateral considerations as the Administrative Agent may deem appropriate, in
its sole discretion acting commercially reasonably and in accordance with its
regular business practices and policies in effect from time to time and
applicable to asset based loans with advance rates based on current assets
(which practices and policies may be changed by the Administrative Agent in its
sole discretion).
"Encumbrances" means, with respect to property, all Liens, leases,
options, preferences, priorities, rights of first refusal, easements,
servitudes, rights-of-way, licenses, securities purchase option, call or similar
right, restrictions under any shareholder agreement or any other Contractual
Obligation, encumbrance or any other restriction or limitation whatsoever on any
right incident to the ownership in fee of such property (including rights to
transfer, use or possess such property), whether contingent or non-contingent,
matured or unmatured, known or unknown.
"Environmental Laws" means all applicable Requirements of Law now or
hereafter in effect and as amended or supplemented from time to time, relating
to pollution or the regulation and protection of human health, safety, the
environment or natural resources, including the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980, as amended (42 U.S.C.(S) 9601
et seq.); the Hazardous Material Transportation Act, as amended (49 U.S.C.(S)
180 et seq.); the Federal Insecticide, Fungicide, and Rodenticide Act, as
amended (7 U.S.C.(S) 136 et seq.); the Resource Conservation and Recovery Act,
as amended (42 U.S.C.(S) 6901 et seq.); the Toxic Substance Control Act, as
amended (42 U.S.C.(S) 7401 et seq.); the Clean Air Act, as amended (42 U.S.C.(S)
740 et seq.); the Federal Water Pollution Control Act, as amended (33 U.S.C.(S)
1251 et seq.); the Occupational Safety and Health Act, as amended (29 U.S.C.(S)
651 et seq.); and the Safe Drinking Water Act, as amended (42 U.S.C.(S) 300f et
seq.) and their state and local counterparts or equivalents and any transfer of
ownership notification or approval statute.
"Environmental Liabilities and Costs" means, as to any Person, all
liabilities, obligations, responsibilities, Remedial Actions, losses, damages,
punitive damages, consequential damages, treble damages, costs and expenses
(including all fees, disbursements and expenses of counsel, experts and
consultants and costs of investigation and feasibility studies), fines,
penalties, sanctions and interest incurred as a result of any claim or demand by
any other Person, whether based in contract, tort, implied or express
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warranty, strict liability, criminal or civil statute, including any thereof
arising under any Environmental Law, Permit, Order or Contractual Obligation
with any Governmental Authority or other Person, which relate to any
environmental, health or safety condition or a Release or threatened Release and
result from the past, present or future operations of, or ownership of property
by, such Person or any of its Subsidiaries.
"Environmental Lien" means any Lien in favor of any Governmental
Authority for Environmental Liabilities and Costs.
"Equity Issuance" means the issue or sale of any Stock of the Borrower
by the Borrower.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"ERISA Affiliate" means any trade or business (whether or not
incorporated) under common control or treated as a single employer with the
Borrower or any of its Subsidiaries within the meaning of Section 414 (b), (c),
(m) or (o) of the Code.
"ERISA Event" means (i) a reportable event described in Section
4043(b) or 4043(c)(1), (2), (3), (5), (6), (8) or (9) of ERISA with respect to a
Title IV Plan or a Multiemployer Plan; (ii) the withdrawal of the Borrower, any
of its Subsidiaries or any ERISA Affiliate from a Title IV Plan subject to
Section 4063 of ERISA during a plan year in which it was a substantial employer,
as defined in Section 4001(a)(2) of ERISA; (iii) the complete or partial
withdrawal of the Borrower, any of its Subsidiaries or any ERISA Affiliate from
any Multiemployer Plan; (iv) notice of reorganization or insolvency of a
Multiemployer Plan; (v) the filing of a notice of intent to terminate a Title IV
Plan or the treatment of a plan amendment as a termination under Section 4041 of
ERISA; (vi) the institution of proceedings to terminate a Title IV Plan or
Multiemployer Plan by the PBGC; (vii) the failure to make any required
contribution to a Title IV Plan or Multiemployer Plan; (viii) the imposition of
a lien under Section 412 of the Code or Section 302 of ERISA on the Borrower or
any of its Subsidiaries or any ERISA Affiliate; or (ix) any other event or
condition which might reasonably be expected to constitute grounds under Section
4042 of ERISA for the termination of, or the appointment of a trustee to
administer, any Title IV Plan or Multiemployer Plan or the imposition of any
liability under Title IV of ERISA, other than for PBGC premiums due but not
delinquent under Section 4007 of ERISA.
"Eurocurrency Liabilities" has the meaning assigned to that term in
Regulation D of the Federal Reserve Board, as amended.
"Eurodollar Base Rate" means the rate of interest determined by the
Administrative Agent to be the average (rounded upward to the nearest whole
multiple of one sixteenth of one percent (0.0625%) per annum, if such average is
not such a multiple) of the rates per annum at which deposits in Dollars are
offered by the principal office of
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Citibank in London, England, to major banks in the London interbank market at
11:00 A.M. (London Time) two (2) Business Days before the first day of such
Interest Period for a principal amount substantially equal to the maximum
principal amount of the Eurodollar Rate Loan scheduled to be outstanding during
such Interest Period and for a period equal to such Interest Period.
"Eurodollar Borrowing Unit" means ten million Dollars ($10,000,000).
"Eurodollar Lending Office" means, with respect to any Lender, the
office of such Lender specified as its "Eurodollar Lending Office" opposite its
name on Schedule II (Applicable Lending Offices and Addresses for Notices) or on
the Assignment and Acceptance by which it became a Lender (or, if no such office
is specified, its Domestic Lending Office) or such other office of such Lender
as such Lender may from time to time specify to the Borrower and the
Administrative Agent.
"Eurodollar Rate" means, with respect to any Interest Period for any
Eurodollar Rate Loan, an interest rate per annum equal to the rate per annum
obtained by dividing (a) the Eurodollar Base Rate determined as set forth below
by (b) (i) a percentage equal to one hundred percent (100%) minus (ii) the
reserve percentage applicable two (2) Business Days before the first day of such
Interest Period under regulations issued from time to time by the Federal
Reserve Board for determining the maximum reserve requirement (including any
emergency, supplemental or other marginal reserve requirement) for a member bank
of the United States Federal Reserve System in New York City with respect to
liabilities or assets consisting of or including Eurocurrency Liabilities (or
with respect to any other category of liabilities which includes deposits by
reference to which the Eurodollar Base Rate is determined) having a term equal
to such Interest Period.
"Eurodollar Rate Loan" means any outstanding principal amount of the
Loans of any Lender that, for an Interest Period, bears interest at a rate
determined with reference to the Eurodollar Rate.
"Event of Default" has the meaning specified in Section 9.1 (Events of
Default).
"Existing Indebtedness" has the meaning specified in Section 8.2(e).
"Facilities" means the Commitments and the provisions herein related
to the Revolving Loans, Swing Loans and Letters of Credit.
"Fair Market Value" means (a) with respect to any asset or group of
assets (other than a marketable security) at any time, the value of the
consideration obtainable in a sale of such asset at such date assuming a sale by
a willing seller to a willing purchaser dealing at arm's length and arranged in
an orderly manner over a reasonable period of time having regard to the nature
and characteristics of such asset, provided, however,
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that, if such asset shall have been the subject of a relatively contemporaneous
appraisal by an independent third-party appraiser, the basic assumptions
underlying which have not materially changed since its date, the "Fair Market
Value" of such asset shall be the value set forth in such appraisal and (b) with
respect to any marketable security at any time, the closing sale price of such
security on the Business Day next preceding such date, as appearing in any
published list of any national securities exchange or in the National Market
List of the National Association of Securities Dealers, Inc. or, if there is no
such closing sale price of such security, the final price for the purchase of
such security at face value quoted on such Business Day by a financial
institution of recognized standing which regularly deals in securities of such
type.
"Federal Funds Rate" means, for any period, a fluctuating interest
rate per annum equal for each day during such period to the weighted average of
the rates on overnight Federal funds transactions with members of the United
States Federal Reserve System arranged by Federal funds brokers, as published
for such day (or, if such day is not a Business Day, for the next preceding
Business Day) by the Federal Reserve Bank of New York or, if such rate is not so
published for any day which is a Business Day, the average of the quotations for
such day on such transactions received by the Administrative Agent from three
Federal funds brokers of recognized standing selected by it.
"Federal Reserve Board" means the Board of Governors of the United
States Federal Reserve System or any successor thereto.
"Fee Letter" shall mean the letter dated as of August 27, 1999,
between Citicorp, as the Administrative Agent, and the Borrower with respect to
certain fees to be paid from time to time to Citicorp.
"Financial Covenant Debt" means, with respect to any Person at any
time, the sum, without duplication, of (a) all Indebtedness that would be
required to be reflected on a consolidated balance sheet at such date of such
Person and its Subsidiaries prepared in conformity with GAAP plus (b) all
Attributable Securitization Indebtedness.
"Financial Statements" means the consolidated and consolidating income
statements, statements of cash flows and balance sheets of the Borrower and its
Subsidiaries delivered in accordance with Section 4.3 (Financial Statements) and
Section 6.1 (Financial Statements).
"Fuji Bank" has the meaning specified at the beginning of this
Agreement.
"GAAP" means generally accepted accounting principles in the United
States of America as in effect from time to time set forth in the opinions and
pronouncements of the Accounting Principles Board and the American Institute of
Certified Public Accountants and the statements and pronouncements of the
Financial Accounting Standards Board, or in such other statements by such other
entity as may be
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in general use by significant segments of the accounting profession, which are
applicable to the circumstances as of the date of determination.
"Governmental Authority" means any nation or government, any
state or other political subdivision thereof and any individual or entity
exercising (x) executive or administrative functions of, or generally pertaining
to, governments, nations, states or other political subdivisions thereof or (y)
legislative, judicial or regulatory functions, including central banks, the PBGC
and arbitrators.
"Guarantor" means National Steel Pellet Company, a Delaware
corporation.
"Guaranty" means a guaranty, in substantially the form of
Exhibit H, executed by the Guarantor.
"Guaranty Obligation" means, as applied to any Person, any
obligation, contingent or otherwise, of such Person directly or indirectly
guaranteeing Indebtedness of another Person and any obligation, direct or
indirect, contingent or otherwise, of such Person (a) to purchase or pay (or
advance or supply funds for the purchase of or payment of) such Indebtedness of
such other Person (whether arising by virtue of partnership arrangements, or by
agreements to keep-well, to purchase assets, goods, securities or services, to
take-or-pay or to maintain financial statement conditions or otherwise) or (b)
entered into for the purpose of assuring in any other manner the obligee against
loss in respect thereof (in whole or in part); provided, however, that the term
"Guaranty Obligation" shall not include endorsements for collection or deposit
in the ordinary course of business.
"Hedging Contracts" means all Interest Rate Contracts, foreign
exchange contracts, currency swap or option agreements, forward contracts,
commodity swap, purchase or option agreements, other commodity price hedging
arrangements and all other similar agreements or arrangements designed to alter
the risks of any Person arising from fluctuations in interest rates, currency
values or commodity prices.
"Imputed Securitization Interest Cost" means the difference
between (a) the face amount of Accounts sold under the Receivables Purchase
Facility to the extent such Accounts have not yet been repaid or been deemed
repaid by the corresponding Account Debtor or repurchased by the Borrower minus
(b) the Attributable Securitization Indebtedness derived from the sale of such
Accounts.
"Indebtedness" of any Person means without duplication (a) all
indebtedness of such Person for borrowed money (including reimbursement and all
other obligations with respect to letters of credit, bankers' acceptances,
surety bonds and performance bonds, whether or not matured) or for the deferred
purchase price of property or services, (b) all obligations of such Person
evidenced by notes, bonds, debentures or similar instruments, (c) all
indebtedness of such Person created or arising
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under any conditional sale or other title retention agreement with respect to
property acquired by such Person (even though the rights and remedies of the
seller or lender under such agreement in the event of default are limited to
repossession or sale of such property), (d) all Capitalized Lease Obligations of
such Person and the present value of future rental payments under all synthetic
leases, (e) all Guaranty Obligations of such Person, (f) all obligations of such
Person to purchase, redeem, retire, defease or otherwise acquire for value any
Stock or Stock Equivalents of such Person, valued, in the case of redeemable
preferred stock, at the greater of its voluntary or involuntary liquidation
preference plus accrued and unpaid dividends, (g) all payments that such Person
would have to make in the event of an early termination on the date Indebtedness
of such Person is being determined in respect of Hedging Contracts of such
Person, (h) all Indebtedness referred to above secured by (or for which the
holder of such Indebtedness has an existing right, contingent or otherwise, to
be secured by) any Lien upon or in property (including accounts and general
intangibles) owned by such Person, even though such Person has not assumed or
become liable for the payment of such Indebtedness and (i) in the case of the
Borrower, all Attributable Securitization Indebtedness.
"Indemnitees" has the meaning specified in Section 11.3
(Costs; Expenses; Indemnities).
"Indenture" means the Indenture of Mortgage and Deed of Trust,
dated May 1, 1952, between the Borrower, Great Lakes Steel Corporation (a
predecessor in interest of the Borrower) and City Bank Farmers Trust Company and
Ralph E. Morton, as Trustees, as supplemented by all instruments supplemental
thereto, including the Eleventh Supplemental Indenture, dated as of March 31,
1999, to the Indenture of Mortgage and Deed of Trust, dated May 1, 1952, between
the Borrower and The Chase Manhattan Bank and Frank J. Grippo, as Trustees,
attached hereto as Exhibit L.
"Intercreditor Agreement" means an agreement, in substantially
the form of Exhibit F, dated as of the date hereof, executed by the Borrower,
the Guarantor, the Administrative Agent and the Receivables Facility Agent.
"Interest Coverage Ratio" means, with respect to any Person
for any period, the ratio of EBITDA of such Person for such period to the
Interest Expense of such Person for such period.
"Interest Expense" means, for any Person for any period, the
difference between (i) the sum, without duplication, of (x) the total interest
expense of such Person and its Subsidiaries for such period determined on a
consolidated basis in conformity with GAAP and including, in any event, interest
capitalized during construction for such period, plus (y) net costs under
Interest Rate Contracts for such period and plus (z) the Imputed Securitization
Interest Costs for such period, minus (ii) net gains of such Person and its
Subsidiaries under Interest Rate Contracts for such period determined on a
consolidated basis in conformity with GAAP and minus (iii) any interest income
of such
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Person and its Subsidiaries for such period determined on a consolidated basis
in conformity with GAAP.
"Interest Period" means, in the case of any Eurodollar Rate
Loan, (a) initially, the period commencing on the date such Eurodollar Rate Loan
is made or on the date of conversion of a Base Rate Loan to such Eurodollar Rate
Loan and ending one (1), two (2), three (3) or six (6) months thereafter, as
selected by the Borrower in its Notice of Borrowing or Notice of Conversion or
Continuation given to the Administrative Agent pursuant to Section 2.2
(Borrowing Procedures) or Section 2.11 (Conversion and Continuation Options) and
(b) thereafter, if such Loan is continued, in whole or in part, as a Eurodollar
Rate Loan pursuant to Section 2.11, a period commencing on the last day of the
immediately preceding Interest Period therefor and ending one (1), two (2),
three (3) or six (6) months thereafter, as selected by the Borrower in its
Notice of Conversion or Continuation given to the Administrative Agent pursuant
to Section 2.11; provided, however, that all of the foregoing provisions
relating to Interest Periods in respect of Eurodollar Rate Loans are subject to
the following:
(A) if any Interest Period would otherwise end on a
day which is not a Business Day, such Interest Period shall be
extended to the next succeeding Business Day, unless, in the
case of Eurodollar Rate Loans only, the result of such
extension would be to extend such Interest Period into another
calendar month, in which event such Interest Period shall end
on the immediately preceding Business Day;
(B) any Interest Period that begins on the last
Business Day of a calendar month (or on a day for which there
is no numerically corresponding day in the calendar month at
the end of such Interest Period) shall end on the last
Business Day of a calendar month;
(C) the Borrower may not select any Interest Period
that ends after the date of a scheduled principal payment on
the Loans as set forth in Article II (The Facilities) unless,
after giving effect to such selection, the aggregate unpaid
principal amount of the Loans for which Interest Periods end
after such scheduled principal payment shall be equal to or
less than the principal amount to which the Loans are required
to be reduced after such scheduled principal payment is made;
(D) the Borrower may not select any Interest Period in
respect of Loans having an aggregate principal amount of less
than ten million Dollars ($10,000,000); and
(E) there shall be outstanding at any one time no more
than six (6) Interest Periods in the aggregate.
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"Interest Rate Contracts" means all interest rate swap
agreements, interest rate cap agreements, interest rate collar agreements and
interest rate insurance.
"Investment" means, with respect to any Person, (i) any
purchase or other acquisition by such Person of Securities, or of a beneficial
interest in Securities issued by or other equity ownership interest in any other
Person, (ii) any purchase by that Person of all or a significant part of the
assets of a business conducted by another Person and (iii) any loan, advance
(other than deposits with financial institutions available for withdrawal on
demand, prepaid expenses, accounts receivable and similar items made or incurred
in the ordinary course of business as presently conducted), or capital
contribution by such Person to any other Person, including all Indebtedness to
such Person arising from a sale of property by such Person other than in the
ordinary course of its business.
"Inventory" has the meaning specified in the Security
Agreement.
"IRS" means the Internal Revenue Service of the United States
or any successor thereto.
"Issuer" means each Lender or Affiliate of a Lender listed on
the signature pages hereof as an "Issuer" or who hereafter becomes an Issuer
with the approval of the Administrative Agent and the Borrower by agreeing to be
bound by the terms hereof applicable to Issuers pursuant to an agreement with
and in form and substance satisfactory to the Administrative Agent and the
Borrower.
"Leases" means, with respect to any Person, all of those
leasehold estates in real property owned by such Person, as lessee, as such may
be amended, supplemented or otherwise modified from time to time.
"Legal Proceeding" means any judicial, administrative,
investigative, informal or arbitral action, arbitration, suit, claim, demand,
audit, investigation, litigation, hearing (public or private), including
proceedings of a Governmental Authority.
"Lender" means each financial institution or other entity
listed on Schedule I (Commitments) or that from time to time becomes a party
hereto by execution of an Assignment and Acceptance, including pursuant to
Section 2.18 (Substitution of Lenders).
"Letter of Credit" means any letter of credit issued for the
account of the Borrower by any Issuer pursuant to Section 2.4 (Letters of
Credit).
"Letter of Credit Fee" means, with respect to a Standby Letter
of Credit or a Documentary Letter of Credit, (i) during the period commencing on
the Effective Date and ending the first day of the first calendar month
following the receipt by the Administrative Agent of the Financial Statements
pursuant to Section 6.1(a) (Quarterly
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Financial Statements and Compliance Certificates) for the Quarter ending
September 30, 2000, three quarters of one percent (0.75%) per annum, in the case
of a Documentary Letter of Credit, and one and one-quarter percent (1.25%) per
annum, in the case of a Standby Letter of Credit, of the maximum amount
available from time to time to be drawn under such Standby Letter of Credit or
Documentary Letter of Credit (or, if such Letter of Credit is to be denominated
in an Alternative Currency, based on the average undrawn amount thereof, using
the Dollar Equivalent thereof) and (ii) thereafter, as of any date of
determination, a rate per annum equal to the rate set forth on Schedule III
(Applicable Margins and Fees) opposite the applicable type of Letter of Credit
and the then applicable Interest Coverage Ratio set forth on such schedule.
Subsequent changes in the Letter of Credit Fee resulting from
a change in the Interest Coverage Ratio shall become effective as to all Loans
the first day of the first calendar month following delivery by the Borrower to
the Administrative Agent of new Financial Statements for each Quarter pursuant
to Section 6.1(a) (Quarterly Financial Statements and Compliance Certificates)
or each Year pursuant to Section 6.1(b) (Annual Audited Financial Statements).
Notwithstanding anything to the contrary set forth in this Agreement (including
the then effective Interest Coverage Ratio), if the Borrower shall fail to
deliver Financial Statements (i) pursuant to Section 6.1(a), within fifty (50)
days after the end of any Quarter or (ii) pursuant to Section 6.1(b), within
ninety-five (95) days after the end of any Year, the Applicable Margin from and
including the fifty-first (51st) or ninety-sixth (96th) day, as the case may be,
after the end of such Quarter or Year, as the case may be, to but not including
the date the Borrower delivers to the Administrative Agent such Financial
Statements shall conclusively equal the highest Applicable Margin set forth
above in this definition.
"Letter of Credit Obligations" means, at any time, the
aggregate of all liabilities at such time of the Borrower to all Issuers with
respect to Letters of Credit, whether or not any such liability is contingent
and includes, without limitation, the sum of (a) the Reimbursement Obligations
at such time and (b) the Letter of Credit Undrawn Amounts at such time.
"Letter of Credit Reimbursement Agreement" has the meaning
specified in Section 2.4(f) (Execution of Letter of Credit Reimbursement
Agreement).
"Letter of Credit Request" has the meaning specified in
Section 2.4(c) (Contents of Letter of Credit Request).
"Letter of Credit Sublimit" has the meaning specified in
Section 2.4(a)(iv).
"Letter of Credit Undrawn Amounts" means, at any time, the
aggregate undrawn face amount of all Letters of Credit outstanding at such time.
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"Leverage Ratio" means, with respect to any Person for any
period, the ratio of (a) Financial Covenant Debt of such Person as of the last
day of such period to (b) EBITDA for such Person for such period.
"Lien" means any lien (statutory or other), pledge, mortgage,
deed of trust, charge, pledge, hypothecation, assignment, deposit arrangement,
encumbrance, security interest or preference, priority or other security
agreement or preferential arrangement of any kind or nature whatsoever intended
to assure payment of any Indebtedness or other obligation, including any
conditional sale or other title retention agreement, the interest of a lessor
under a Capitalized Lease, any financing lease having substantially the same
economic effect as any of the foregoing and the filing of any financing
statement under the Uniform Commercial Code or comparable Requirement of Law
naming the owner of the asset to which such Lien relates as debtor.
"Loan" means any loan made by any Lender to the Borrower
pursuant to this Agreement.
"Loan Documents" means, collectively, this Agreement, any
Notes, the Guaranty, the Intercreditor Agreement, the Fee Letter, each Letter of
Credit Reimbursement Agreement, the Collateral Documents, each Hedging Contract
with a Lender or any Affiliate thereof and all agreements for cost management
services provided by a Lender or any Affiliate thereof, and each certificate,
agreement or document executed by a Loan Party and delivered to the
Administrative Agent or any Lender in connection with or pursuant to any of the
foregoing.
"Loan Party" means each of the Borrower, the Guarantor and
each other Subsidiary of the Borrower that executes and delivers a Loan
Document.
"Material Adverse Change" means a material adverse change in
any of (a) the condition (financial or otherwise), business, performance,
prospects, operations or properties of the Borrower or the Borrower and its
Subsidiaries taken as one enterprise, (b) the legality, validity or
enforceability of any Loan Document, (c) the perfection or priority of the Liens
granted pursuant to the Collateral Documents, (d) the ability of the Borrower to
repay the Obligations or of the Loan Parties to perform their obligations under
the Loan Documents or (e) the rights and remedies of the Administrative Agent or
the Lenders under the Loan Documents.
"Material Adverse Effect" means an effect that results in or
causes, or could reasonably be expected to result in or cause, a Material
Adverse Change.
"Material Subsidiary" means (a) the Guarantor, (b) NSFC and
(c) any Subsidiary of the Borrower other than (i) the Guarantor and NSFC, (ii)
any Subsidiary of the Borrower listed on Schedule 1.1 (Non-Material
Subsidiaries) as long as the book value of the total assets of such Subsidiary
does not exceed the figure set forth opposite such subsidiary on Schedule 1.1 by
more than ten million Dollars ($10,000,000) and (iii)
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any Subsidiary of the Borrower that has total assets with a book value not in
excess of ten million Dollars ($10,000,000).
"Moody's" means Moody's Investors Service.
"Multiemployer Plan" means a multiemployer plan, as defined in
Section 4001(a)(3) of ERISA, to which the Borrower, any of its Subsidiaries or
any ERISA Affiliate has any obligation or liability, contingent or otherwise.
"NSFC" means National Steel Funding Corporation, a Delaware
corporation.
"Net Cash Proceeds" means (i) proceeds received by the
Borrower or any of its Material Subsidiaries after the Effective Date in cash or
Cash Equivalents from any Asset Sale, other than Asset Sales permitted under
clauses (i) through (iv) Section 8.7(a) (Sale of Assets), net of (x) the
reasonable cash costs of sale, assignment or other disposition, (y) taxes paid
or payable as a result thereof and (z) any amount required to be paid or prepaid
on Indebtedness (other than the Obligations) secured by the assets subject to
such Asset Sale; provided, however, that evidence of each of (x), (y) and (z) in
form and substance satisfactory to the Administrative Agent is provided to the
Administrative Agent; (ii) proceeds of insurance on account of the loss of or
damage to any such assets or property and payments of compensation for any such
assets or property taken by condemnation or eminent domain, to the extent such
proceeds or payments exceed twenty-five million Dollars ($25,000,000) in the
aggregate and, within one hundred and eighty (180) days after the receipt
thereof, replacement or repair of such asset or property has not commenced,
except that in the event that at any time such replacement or repair is
abandoned or otherwise discontinued or is not diligently pursued, the remaining
award or proceeds, as the case may be, shall constitute Net Cash Proceeds at
such time and (iii) proceeds received after the Effective Date by any Loan Party
in cash or Cash Equivalents from (A) any Equity Issuance (other than any such
issuance of common Stock of the Borrower occurring in the ordinary course of
business to any director, member of the management or employee of the Borrower
or any of its Material Subsidiaries) or (B) any Debt Issuance (except for
Indebtedness permitted under Section 8.2 (Indebtedness)), in each case net of
brokers' and advisors' fees and other costs incurred in connection with such
transaction, satisfactory evidence of which is provided to the Administrative
Agent.
"NKK" means NKK Corporation, a company organized and existing
under the laws of Japan.
"Non-Cash Interest Expense" means, with respect to any Person
for any period, the sum of the following amounts to the extent included in the
calculation of Interest Expenses of such Person for such period: (a) the amount
of debt discount and debt issuances costs amortized (b) charges relating to
write-ups or write-downs in the book or carrying value of existing Financial
Covenant Debt and (c) interest payable in evidences of Indebtedness or by
addition to the principal of the related Indebtedness.
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"Non-Funding Lender" has the meaning specified in Section
2.2(d) (Independence of Funding Obligations).
"Notes" means, collectively, any Revolving Credit Note and any
Swing Loan Note.
"Notice of Borrowing" has the meaning specified in Section
2.2(a) (Form of Notice of Borrowing).
"Notice of Conversion or Continuation" has the meaning
specified in Section 2.11(a) (Delivery of Notice of Conversion or Continuation).
"Obligations" means the Loans, the Letter of Credit
Obligations and all other advances, debts, liabilities, obligations, covenants
and duties owing by the Borrower to the Administrative Agent, any Lender, any
Issuer, any Affiliate of any of them or any Indemnitee, of every type and
description, present or future, whether or not evidenced by any note, guaranty
or other instrument, arising under this Agreement or under any other Loan
Document, whether or not for the payment of money, arising by reason of an
extension of credit, opening or amendment of a Letter of Credit or payment of
any draft drawn thereunder, or any loan, guaranty, indemnification, foreign
exchange transaction, Hedging Contract or cash management system or in any other
manner, whether direct or indirect (including those acquired by assignment),
absolute or contingent, due or to become due, now existing or hereafter arising
and however acquired. The term "Obligations" includes, without limitation, all
interest, charges, expenses, fees, attorneys' fees and disbursements and other
sums chargeable to the Borrower under this Agreement or any other Loan Document,
all obligations of the Borrower to cash collateralize the Letter of Credit
Obligations and all amounts payable for cash management services.
"Order" means any order, award, injunction, judgment, decree,
settlement, process, ruling, subpoena, writ, assessment, arbitration award,
verdict (whether temporary, preliminary or permanent) or any determination or
pronouncement (whether or not such determination or pronouncement can be
appealed or otherwise modified) of any Governmental Authority reached as a
result of a Legal Proceeding.
"Outside Processing Inventory Reserve" means (a) at any time
after the Administrative Agent shall have received the first Outside Processing
Notice, one hundred and twenty percent (120%) of the average over the six (6)
calendar months preceding the date of the most recent Outside Processing Notice
delivered pursuant to and in accordance with Section 6.1(e) (Outside Processing
Notice) of the aggregate Book Value of Inventory of the Borrower that, on any
given day during such six (6)-month period, has been located, stored, used or
held at the premises of one or more third parties for more than one hundred and
twenty (120) days (but excluding any Inventory that the Administrative Agent has
determined is located, stored, used or held at locations covered by the
appropriate filings under the Uniform Commercial Code and so advised the
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Borrower) or (b) at any other time, twenty million four hundred thousand Dollars
($20,400,000).
"Outside Processing Notice" has the meaning specified in
Section 6.1(e) (Outside Processing Notice).
"Outstanding Amounts" means, at any particular time, the sum
of (a) the principal amount of the Revolving Loans outstanding at such time plus
(b) the Letter of Credit Obligations outstanding at such time plus (c) the
principal amount of the Swing Loans outstanding at such time.
"PBGC" means the Pension Benefit Guaranty Corporation or any
successor thereto.
"Permit" means any certificate, permit, franchise, approval,
authorization, license, variance, exemption, privilege, immunity, waiver, or
permission required from, or otherwise granted by, a Governmental Authority
under an applicable Requirement of Law or in connection with any Contractual
Obligation with a Governmental Authority.
"Person" means an individual, partnership, corporation
(including a business trust), joint stock company, estate, trust, labor union,
limited liability company, unincorporated association, joint venture or other
entity or a Governmental Authority.
"Pledge Agreement" means an agreement, in substantially the
form of Exhibit E, executed by the Borrower.
"Projections" means those financial projections delivered to
the Lenders by the Borrower prior to the Effective Date, dated September 30,
1999 and covering the Year ending in 1999 through the first Year ending after
the Scheduled Termination Date, inclusive, together with all updates thereto.
"Purchasing Lender" has the meaning specified in Section
11.5(a) (Purchase of Participations).
"Quarter" means each of the three-month periods ending on
March 31, June 30, September 30 and December 31.
"Ratable Portion" or "ratably" means, with respect to any
Lender, the percentage obtained by dividing (a) the Commitment of such Lender by
(b) the aggregate Commitments of all Lenders (or, at any time after the
Termination Date, the percentage obtained by dividing the aggregate outstanding
principal balance of the Outstanding Amounts owing to such Lender by the
aggregate outstanding principal balance of the Outstanding Amounts owing to all
Lenders).
"Receivables Availability" means, at any time, the aggregate
"Purchase Price" of all additional "Receivables" and related assets owned by
NSFC at such time
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that the "Buyers" would have to purchase from NSFC in an "Incremental Purchase"
under the Receivables Purchase Agreement if NSFC were to send to the
"Administrative Agent" the appropriate "Purchase Notice" (as such terms are
defined in the Receivables Purchase Agreement).
"Receivables Facility Agent" means Morgan Guaranty Trust
Company of New York, as administrative agent and structuring and collateral
agent under the Receivables Purchase Agreement.
"Receivables Purchase Agreement" means the Receivables
Purchase Agreement, dated as of May 16, 1994, as amended, among NSFC, the
Borrower, as servicer, the financial institutions listed therein, as buyers,
Morgan Guaranty Trust Company of New York ("MGT"), The Fuji Bank and Trust
Company, The Mitsubishi Bank, Ltd. and Comerica Bank as letter of credit issuing
banks, MGT, as reserve letter of credit bank, and MGT, as administrative agent
and structuring and collateral agent.
"Receivables Purchase Facility" means the Receivables Purchase
Agreement, the Receivables Sale Agreement and each other document and instrument
executed in respect thereof.
"Receivables Sale Agreement" means the Purchase and Sale
Agreement, dated as of May 16, 1994, as amended, between the Borrower, as
seller, and NSFC, as purchaser.
"Refinancing" means the repayment in full of all Indebtedness
owed to the lenders under (i) the $50,000,000 Credit Agreement, dated as of July
18, 1996, as amended to date, between National Steel Corporation and The Fuji
Bank, Limited (as successor to The Fuji Bank and Trust Company) and (ii) the
Inventory Credit Agreement, dated as of July 18, 1996, as amended to date, by
and among National Steel Corporation, The Fuji Bank, Limited (as successor to
The Long Term Credit Bank of Japan), as administrative agent, and various other
Lenders, and the termination of such facilities and all Lies granted thereunder
in form and substance satisfactory to the Administrative Agent.
"Register" has the meaning specified in Section 11.2(d)
(Maintenance of Records).
"Reimbursement Obligations" means all matured reimbursement or
repayment obligations of the Borrower to any Issuer with respect to amounts
drawn under Letters of Credit.
"Reinvestment Deferred Amount" means, with respect to any
Reinvestment Event, the aggregate Net Cash Proceeds received by the Borrower or
any of its Subsidiaries in connection therewith that are not applied immediately
upon receipt
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to prepay the Loans pursuant to Section 2.9(a) (Asset Sales or Debt Issuances)
as a result of the delivery of a Reinvestment Notice.
"Reinvestment Event" means any Asset Sale in respect of which
the Borrower is authorized to deliver, and has delivered, a Reinvestment Notice.
"Reinvestment Notice" means a written notice executed by a
Responsible Officer of the Borrower stating that (a) no Event of Default has
occurred and is continuing and (b) the Borrower (directly or indirectly through
a Subsidiary) intends and expects to use all or a specified portion of the Net
Cash Proceeds of a sale, assignment or other disposition constituting an Asset
Sale to acquire replacement assets useful in the business of the Borrower or any
of its Subsidiaries.
"Reinvestment Prepayment Amount" means, with respect to any
Reinvestment Event, the Reinvestment Deferred Amount relating thereto minus any
amount expended or required to be expended pursuant to a Contractual Obligation
entered into prior to the relevant Reinvestment Prepayment Date to acquire
replacement assets useful in the Borrower's business.
"Reinvestment Prepayment Date" means, with respect to any Net
Cash Proceeds, the earlier of (a) the date occurring one hundred and eighty
(180) days after the receipt of such Net Cash Proceeds and (b) the date five (5)
Business Days after the receipt by the Administrative Agent of a notice by the
Borrower of the determination of the Borrower not to acquire replacement assets
useful in the business of a Borrower or a Subsidiary with all or any portion of
the relevant Reinvestment Deferred Amount.
"Related Documents" means the Indenture, the Receivables
Purchase Facility and each other document and instrument executed in respect
thereof (including agreements and other documents and instruments in respect of
the Borrower's existing cash management system, lockboxes and concentration
accounts).
"Release" means, as to any Person, any release, spill,
emission, leaking, pumping, injection, deposit, disposal, discharge, dispersal,
leaching or migration, in each case, of any Contaminant into the indoor or
outdoor environment or into or out of any property owned by such Person,
including the movement of Contaminants through or in the air, soil, surface
water, ground water or property.
"Remedial Action" means all actions required to (a) clean up,
remove, treat or in any other way address any Contaminant in the indoor or
outdoor environment, (b) prevent the Release or threat of Release or minimize
the further Release so that a Contaminant does not migrate or endanger or
threaten to endanger public health or welfare or the indoor or outdoor
environment or (c) perform pre-remedial studies and investigations and
post-remedial monitoring and care.
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"Requirement of Law" means, as to any Person, the Constituent
Documents of such Person and any federal, state, local, foreign or international
law, treaty, constitution, statute, rules, regulations, ordinance, principles of
common law and equity and Orders of any Governmental Authority applicable to or
binding upon such Person or any of its property or to which such Person or any
of its property is subject.
"Requisite Lenders" means, collectively, Lenders having more
than (a) before the termination of the Commitments, fifty percent (50%) of the
aggregate outstanding amount of the Commitments or (b) otherwise, fifty percent
(50%) of the aggregate Outstanding Amounts. A Non-Funding Lender shall not be
included in the calculation of "Requisite Lenders."
"Responsible Officer" means, with respect to any Person, any
of the principal executive officers or general partners of such Person, but, in
any event, with respect to financial matters (including matters relating to the
solvency of such Person, Financial Statements or the Borrowing Base), the chief
financial officer, treasurer or controller of such Person.
"Restricted Payment" means (a) any dividend or other
distribution, direct or indirect, on account of any Stock or Stock Equivalents
of the Borrower or any of its Subsidiaries now or hereafter outstanding, except
a divided payable solely in Stock or Stock Equivalents or a dividend or
distribution payable solely to the Borrower and/or the Guarantor, (b) any
redemption, retirement, sinking fund or similar payment, purchase or other
acquisition for value, direct or indirect, of any Stock or Stock Equivalents of
the Borrower or any of its Subsidiaries now or hereafter outstanding other than
one payable solely to the Borrower and/or the Guarantor and (c) any payment or
prepayment of principal, premium (if any), interest fees or other charges on, or
redemption, purchase, retirement, defeasance, sinking fund or similar payment
with respect to, any Indebtedness of the Borrower or any of its Subsidiaries or
any other Loan Party, other than any required redemptions, retirement, purchases
or other payments, in each case to the extent permitted to be made by the terms
of such Indebtedness after giving effect to any applicable subordination
provisions.
"Revolving Credit Note" means a promissory note of the
Borrower payable to the order of any Lender in a principal amount equal to the
amount of such Lender's Commitment evidencing the aggregate Indebtedness of the
Borrower to such Lender resulting from the Revolving Loans owing to such Lender.
"Revolving Loan" has the meaning specified in Section 2.1 (The
Commitments).
"Sale" means an Asset Sale, Debt Issuance or Equity Issuance.
"Sale and Leaseback Transaction" means any arrangement,
directly or indirectly, whereby a Person or its Subsidiary shall sell or
transfer any property, real or
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personal, and used or useful in its business, whether or now owned or hereafter
acquired, and thereafter rent or lease such property or other property that such
Person or its Subsidiary intends to use for substantially the same purpose as
the property being sold or transferred.
"Scheduled Termination Date" means the fifth (5/th/)
anniversary of the Effective Date.
"Secured Obligations" means, in the case of the Borrower, the
Obligations, and, in the case of any other Loan Party, the obligations of such
Loan Party under the Guaranty and other Loan Documents to which it is a party.
"Secured Parties" means the Lenders, the Issuers, the
Administrative Agent and any other holder of any of the Obligations.
"Securities" means Stock, Stock Equivalents, voting trust
certificates, bonds, debentures, notes, other evidence of indebtedness, whether
secured, unsecured, convertible or subordinated, and certificates of interest,
shares or participations in, and temporary or interim certificates for the
purchase or acquisition of, and rights to subscribe to, purchase or acquire, any
of the foregoing, but shall not include any evidence of the Obligations.
"Security Agreement" means an agreement, in substantially the
form of Exhibit D, executed by the Borrower and the Guarantor.
"Selling Lender" has the meaning specified in Section 11.5(a)
(Purchase of Participations).
"Solvent" means, with respect to any Person, that the value of
the assets of such Person (both at fair value and present fair saleable value)
is, on the date of determination, greater than the total amount of liabilities
(including contingent and unliquidated liabilities) of such Person as of such
date and that, as of such date, such Person is able to pay all liabilities of
such Person as such liabilities mature and does not have unreasonably small
capital. In computing the amount of contingent or unliquidated liabilities at
any time, such liabilities will be computed at the amount which, in light of all
the facts and circumstances existing at such time, represents the amount that
can reasonably be expected to become an actual or matured liability.
"Standby Letter of Credit" means any letter of credit issued
for the account of the Borrower by an Issuer pursuant to Section 2.4(a)
(Obligation to Issue) that is not a Documentary Letter of Credit.
"Standard & Poor" means Standard & Poor's Rating Corp., a
division of The McGraw-Hill Companies.
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"Stock" means shares of capital stock (whether denominated as
common stock or preferred stock), beneficial, partnership or membership
interests, participations or other equivalents (regardless of how designated) of
or in a corporation or equivalent entity, whether voting or non-voting.
"Stock Equivalents" means all securities convertible into or
exchangeable for Stock and all warrants, options or other rights to purchase or
subscribe for any stock, whether or not presently convertible, exchangeable or
exercisable.
"Subsidiary" means, with respect to any Person, any
corporation, partnership, limited liability company or other business entity of
which an aggregate of more than fifty percent (50%) of the outstanding Voting
Stock is, at the time, directly or indirectly, owned or controlled by such
Person and/or one or more Subsidiaries of such Person.
"Super Majority Lenders" means, collectively, Lenders having
more than (a) before the termination of the Commitments, sixty-six and
two-thirds percent (66 2/3/rd/ %) of the aggregate outstanding amount of the
Commitments or (b) otherwise, sixty-six and two-thirds percent (66 2/3/rd/ %) of
the aggregate Outstanding Amounts. A Non-Funding Lender shall not be included in
the definition of "Super Majority Lenders."
"Swing Loan" means a Loan made by the Swing Loan Lender to the
Borrower pursuant to Section 2.3 (Swing Loans).
"Swing Loan Borrowing" means a borrowing consisting of a Swing
Loan.
"Swing Loan Commitment" means, as to the Swing Loan Lender,
the commitment of such Swing Loan Lender to make Swing Loans to the Borrower
pursuant to Section 2.3 (Swing Loans) in the aggregate principal amount at any
time outstanding not to exceed twenty five million Dollars ($25,000,000).
"Swing Loan Lender" means Citicorp.
"Swing Loan Request" has the meaning specified in Section
2.3(b) (Notice of Borrowing).
"Syndication Agent" has the meaning specified at the beginning
of this Agreement.
"Tax Affiliate" means, as to any Person, (a) any Subsidiary of
such Person and (b) any Affiliate of such Person with which such Person files or
is eligible to file consolidated, combined or unitary tax returns.
"Tax Return" has the meaning specified in Section 4.5(a)
(Timely Filing of Tax Returns and Payment of Taxes).
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"Taxes" has the meaning specified in Section 2.17(a)
(Deduction of Taxes).
"Termination Date" shall mean the earliest of (a) the
Scheduled Termination Date, (b) the date of termination of the Commitments
pursuant to the terms hereof and (c) the date on which the Obligations become
due and payable pursuant to Section 9.2 (Remedies).
"Title IV Plan" means a pension plan, other than a
Multiemployer Plan, which is covered by Title IV of ERISA to which the Borrower
any of its Subsidiaries or any ERISA Affiliate has any obligation or liability
(contingent or otherwise).
"Uniform Commercial Code" means the Uniform Commercial Code as
the same may, from time to time, be in effect in the State of New York;
provided, however, that in the event that, by reason of any mandatory
Requirement of Law, any or all of the attachment, perfection or priority of any
security interest granted under the Security Agreement in any Collateral is
governed by the Uniform Commercial Code as in effect in a jurisdiction other
than the State of New York, the term "Uniform Commercial Code" shall mean the
Uniform Commercial Code as in effect in such other jurisdiction for purposes of
the provisions hereof relating to such attachment, perfection or priority and
for purpose of definitions related to such provisions.
"Unfunded Pension Liability" means, as to the Borrower at any
time, the sum of (a) the amount, if any, by which the present value of all
accrued benefits under each Title IV Plan (other than any Title IV Plan subject
to Section 4063 of ERISA) exceeds the fair market value of all assets of such
Title IV Plan allocable to such benefits in accordance with Title IV of ERISA,
as determined as of the most recent valuation date for such Title IV Plan using
the actuarial assumptions in effect under such Title IV Plan and (b) the
aggregate amount of withdrawal liability that could be assessed under Section
4063 with respect to each Title IV Plan subject to such Section, separately
calculated for each such Title IV Plan as of its most recent valuation date and
(c) for a period of five years following a transaction reasonably likely to be
covered by Section 4069 of ERISA, the liabilities (whether or not accrued) that
could be avoided by the Borrower, any of its Subsidiaries or any ERISA Affiliate
as a result of such transaction.
"United States" or "U.S." shall mean the United States of
America or any political subdivision thereof.
"Unused Commitment Fee" has the meaning specified in Section
2.12(a) (Unused Commitment Fee).
"Unused Commitment Fee Rate" means (i) during the period
commencing on the Effective Date and ending the first day of the first calendar
month following the receipt by the Administrative Agent of the Financial
Statements pursuant to Section 6.1(a) (Quarterly Financial Statements and
Compliance Certificates) for the
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Quarter ending September 30, 2000, 0.375% per annum and (ii) thereafter, as of
any date of determination, a per annum rate equal to the rate set forth on
Schedule III (Applicable Margins and Fees) opposite the then applicable Interest
Coverage Ratio set forth on such schedule.
Subsequent changes in the Unused Commitment Fee Rate resulting
from a change in the Interest Coverage Ratio shall become effective on the first
day of the first calendar month following the receipt by the Administrative
Agent of new Financial Statements for each Quarter pursuant to Section 6.1(a)
(Quarterly Financial Statements and Compliance Certificates) or each Year
pursuant to Section 6.1(b) (Annual Audited Financial Statements).
Notwithstanding anything to the contrary set forth in this Agreement (including
the then effective Leverage Ratio), if the Borrower shall fail to deliver
Financial Statements (i) pursuant to Section 6.1(a) within fifty (50) days after
the end of any Quarter or (ii) pursuant to Section 6.1(b) within ninety-five
(95) days after the end of any Year, the Unused Commitment Fee from and
including the fifty-first (51st) or ninety-first (96th) day, as the case may be,
after the end of such Quarter or Year, as the case may be, to but not including
the date the Borrower delivers to the Administrative Agent such Financial
Statements shall conclusively equal the highest Unused Commitment Fee Rate set
forth on Schedule III.
"Voting Stock" means Stock of any Person having ordinary
voting power to elect a majority of the board of directors, managers, trustees
or other controlling Persons, of such Person (irrespective of whether, at the
time, Stock of any other class or classes of such entity shall have or might
have voting power by reason of the happening of any contingency).
"Withdrawal Liability" means, as to the Borrower at any time,
the aggregate liability incurred (whether or not assessed) with respect to all
Multiemployer Plans pursuant to Section 4201 of ERISA or for increases in
contributions required to be made pursuant to Section 4243 of ERISA.
"Year" means the calendar year.
"Year 2000 Compliant" means the ability of hardware, firmware
or software systems associated with information processing and delivery,
operations or services, operated by, provided to or otherwise necessary to the
business or operations of the Borrower or its Material Subsidiaries to recognize
and properly perform date-sensitive functions involving certain dates prior to,
and at any time after, December 31, 1999.
Section 1.2 Accounting Terms and Principles.
(a) Except as set forth below, all accounting terms not
specifically defined herein shall be construed in conformity with GAAP and all
accounting determinations
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required to be made pursuant hereto shall, unless expressly otherwise provided
herein, be made in conformity with GAAP.
(b) If any change in the accounting principles used in the
preparation of the most recent Financial Statements referred to in Section 6.1
(Financial Statements) is hereafter required or permitted by the rules,
regulations, pronouncements and opinions of the Financial Accounting Standards
Board or the American Institute of Certified Public Accountants (or any
successors thereto) and such change is adopted by the Borrower with the
agreement of its independent public accountants and results in a change in the
method of calculation of any of the covenants, standards or defined terms found
in or Article V (Financial Covenants) or Article IX (Events of Default), the
parties hereto agree to enter into negotiations in order to amend such
provisions so as to equitably reflect such change with the desired results that
the criteria for evaluating compliance with such covenants, standards and
defined terms by the Borrower shall be the same after such change as if such
change had not been made; provided, however, that no change in GAAP that would
affect a calculation that measures compliance with any such covenant, standard
or defined term shall be given effect until such provisions are amended to
reflect such changes in GAAP.
Section 1.3 Certain Terms and References.
(a) Certain Terms. The term "including" when used in any Loan
Document means "including without limitation" unless the context otherwise
requires and except as used in Section 1.4 (Time Periods) and any substantially
similar section of any Loan Document. When used in any Loan Document, the words
"either" and "or" do not refer to an exclusive choice.
(b) Internal Cross References. Unless otherwise expressly
noted, references in any Loan Document to an Exhibit, Schedule, Article,
Section, subsection or clause refer to the appropriate Exhibit or Schedule to,
or Article, Section, subsection or clause in, such Loan Document. The words
"herein," "hereof" and "hereunder" and other words of similar import as used in
any Loan Document refer to such Loan Document as a whole and not to any
particular Article, Section, subsection or clause in such Loan Document.
(c) Table of Contents and Headings. The table of contents and
section headings of any Loan Document are for reference purposes only and are to
be given no effect in the construction or interpretation of such Loan Document;
provided, however, that headings may be used for cross-reference purposes and,
when used as such, shall prevail over an inconsistent reference to a section
number.
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(d) References to Parties. In this Agreement, the terms
"Administrative Agent," "Borrower," "Lender" and "Swing Loan Lender" include,
without limitation, their respective successors and permitted assigns. Upon the
appointment of any successor Administrative Agent pursuant to Section 10.6
(Successor Administrative Agent), references to Citicorp in Section 11.9
(Notices, Etc.) and to Citibank in the definitions of Base Rate and Eurodollar
Rate shall be deemed to refer to the financial institution then acting as the
Administrative Agent or one of its Affiliates if it so designates.
(e) References to Agreements. References to each agreement
defined in this Article I shall include, without limitation, all appendices,
exhibits and schedules thereto and, unless specifically stated otherwise, shall
include, without limitation, amendments, restatements, supplements or other
modifications thereto and as the same may be in effect at any and all times such
reference becomes operative, but only (if required) with the prior written
consent of the Requisite Lenders or Super Majority Lenders, as the case may be.
(f) References to Legislation. Unless the context otherwise
requires, references in any Loan Document to any legislation or administrative
rule or regulation include, without limitation, references to any amendment or
modification of such legislation, rule or regulation, to any successor
legislation, rule or regulation and to any subordinate legislation, rule or
regulation made thereunder. A reference to conduct in any Loan Document
includes, without limitation, references to an omission, statement or
undertaking.
(g) Reference to Indenture. Any reference herein to any
numbered section of the Indenture shall be a reference to a section of the
Eleventh Supplemental Indenture, dated as of March 31, 1999 to the Indenture of
Mortgage and Deed of Trust, dated May 1, 1952, between the Borrower and The
Chase Manhattan Bank and Frank J. Grippo, as Trustees as in effect on the date
hereof.
Section 1.4 Time Periods. In this Agreement and any other
Loan Document, in the computation of periods of time from a specified date to a
later specified date, the word "from" means "from and including" and the words
"to" and "until" each mean "to but excluding" and the word "through" means "to
and including."
Section 1.5 Quantities. In any Loan Document, in all
instances where the same Dollar amount, time period, percentage or other
quantity is expressed both using roman numerals and fully written out, the
latter expression shall prevail over the expression using roman numerals in case
of direct conflicts.
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Section 1.6 Pronouns. All pronouns contained in any Loan
Document and any variations thereof shall be deemed to refer to the masculine,
feminine or neuter, singular or plural, as the identity of the parties may
require.
Section 1.7 Construction. The parties hereto acknowledge
and agree that they have participated jointly in the negotiation and drafting of
this Agreement. In the event an ambiguity or question of intent or
interpretation arises, this Agreement shall be construed as if drafted jointly
by the parties hereto and no presumption or burden of proof shall arise favoring
or disfavoring any party by virtue of the authorship of any of the provisions of
this Agreement.
Section 1.8 Certain Computations. In the absence of a
"Termination Event" under, and as defined in, the Receivables Purchase Facility
and unless the Administrative Agent in its reasonable judgment determines
otherwise, the amount of the Receivables Availability at any date shall be as
certified as of such date by the Borrower. In the absence of an Event of Default
and unless the Administrative Agent in its reasonable judgment determines
otherwise, any calculation of the Borrowing Base to be made in connection with
this Agreement or any of the other Loan Documents (other than any calculation
made in order to produce and deliver a new Borrowing Base Certificate pursuant
to Section 3.1(k) (Initial Borrowing Base Certificate)) may be based on the last
Borrowing Base Certificate delivered pursuant to Section 3.1(k) (Initial
Borrowing Base Certificate) or Section 6.1(d) (Borrowing Base Certificate), as
applicable, as long as the Borrower is in compliance with the delivery
requirements of such Sections.
ARTICLE II
The Facilities
Section 2.1 The Commitments. On the terms and subject to
the conditions contained in this Agreement, each Lender severally agrees to make
loans (each a "Revolving Loan") to the Borrower from time to time on any
Business Day during the period from the date hereof until the Termination Date
in an aggregate amount at any time outstanding for all such loans by such Lender
not to exceed such Lender's Commitment; provided, however, that at no time shall
any Lender be obligated to make a Revolving Loan in excess of such Lender's
Ratable Portion of the Available Credit. Within the limits of each Lender's
Commitment, amounts of Revolving Loans repaid may be reborrowed under this
Section 2.1 on the terms and subject to the conditions contained in this Section
2.1 and the remainder of this Agreement.
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Section 2.2 Borrowing Procedures.
(a) Form of Notice of Borrowing. Each Borrowing shall be
made on notice given by the Borrower to the Administrative Agent not later than
11:00 A.M. (New York City time) (i) one (1) Business Day, in the case of a
Borrowing of Base Rate Loans and (ii) three (3) Business Days, in the case of a
Borrowing of Eurodollar Rate Loans, prior to the date of the proposed Borrowing.
Each such notice (a "Notice of Borrowing") shall be in substantially the form of
Exhibit B, specifying therein (A) the date of such proposed Borrowing, (B) the
aggregate amount of such proposed Borrowing, (C) whether any of the proposed
Borrowing will be of Base Rate Loans or Eurodollar Rate Loans and (D) the
initial Interest Period or Periods for any such Eurodollar Rate Loans. The
Revolving Loans shall be made as Base Rate Loans unless (subject to Section 2.15
(Special Provisions Governing Eurodollar Rate Loans)) the Notice of Borrowing
specifies that all or a pro rata portion thereof shall be Eurodollar Rate Loans.
Each Borrowing shall be in an aggregate amount of a Eurodollar Borrowing Unit or
an integral multiple of five million Dollars ($5,000,000) in excess thereof;
provided, however, that the aggregate amount of the Eurodollar Rate Loans for
each Interest Period must be in an amount of a Eurodollar Borrowing Unit or an
integral multiple of five million Dollars ($5,000,000) in excess thereof. The
Borrower may not request more than five (5) Borrowings per month without the
consent of the Administrative Agent.
(b) Disbursement. The Administrative Agent shall give to
each Lender prompt notice of the Administrative Agent's receipt of a Notice of
Borrowing and, if Eurodollar Rate Loans are properly requested in such Notice of
Borrowing, the applicable interest rate determined pursuant to Section 2.10(b)
(Accrual). Each Lender shall, before 11:00 A.M. (New York City time) on the date
of the proposed Borrowing, make available for the account of its Applicable
Lending Office to the Administrative Agent at its address referred to in Section
11.9 (Notices, Etc.), in immediately available funds, such Lender's Ratable
Portion of such proposed Borrowing. After the Administrative Agent's receipt of
such funds and upon fulfillment of the applicable conditions set forth in
Section 3.1 (Conditions Precedent to Effectiveness of this Agreement) and
Section 3.2 (Conditions Precedent to Each Loan and Letter of Credit), the
Administrative Agent will make such funds available to the Borrower.
(c) Assumption of Lender Funding. Unless the Administrative
Agent shall have received notice from a Lender prior to the date of any proposed
Borrowing that such Lender will not make available to the Administrative Agent
such Lender's Ratable Portion of such Borrowing, the Administrative Agent may
assume that such Lender has made such Ratable Portion available to the
Administrative Agent on the date of such Borrowing in accordance with this
Section 2.2 and the Administrative Agent may, in reliance upon such assumption,
make available to the Borrower on such date a corresponding amount. If and to
the extent that such Lender shall not have so made such Ratable Portion
available to the Administrative Agent, such Lender and the Borrower
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severally agree to repay to the Administrative Agent forthwith on demand such
corresponding amount together with interest thereon, for each day from the date
such amount is made available to the Borrower until the date such amount is
repaid to the Administrative Agent, at (i) in the case of the Borrower, the
interest rate applicable at the time to the Loans comprising such Borrowing and
(ii) in the case of such Lender, the Federal Funds Rate. If such Lender shall
repay to the Administrative Agent such corresponding amount, such amount so
repaid shall constitute such Lender's Loan as part of such Borrowing for
purposes of this Agreement. If the Borrower shall repay to the Administrative
Agent such corresponding amount, such payment shall not relieve such Lender of
any obligation it may have hereunder to the Borrower.
(d) Independence of Funding Obligations. The failure of any
Lender to make the Loan or any payment required by it hereunder on the date
specified therefor, including any payment in respect of its participation in
Swing Loans and Letter of Credit Obligations (a "Non-Funding Lender"), shall not
relieve any other Lender of its obligations to make such Loan or payment on such
date but no such other Lender shall be responsible for the failure of any Non-
Funding Lender to make a Loan or payment required under this Agreement.
Section 2.3 Swing Loans.
(a) Terms of the Swing Loans. On the terms and subject to
the conditions contained in this Agreement, the Swing Loan Lender shall make
loans (each a "Swing Loan") otherwise available to the Borrower under the
Commitments from time to time on any Business Day during the period from the
date hereof until the Termination Date in an aggregate amount at any time
outstanding at any time not to exceed the lesser of (i) the Swing Loan Lender's
Swing Loan Commitment and (ii) the Borrowing Base minus the aggregate
Outstanding Amounts. Each Swing Loan shall be in an aggregate amount of not less
than one hundred thousand Dollars ($100,000). Each Swing Loan shall bear
interest at the Base Rate. Within the limits set forth in the first sentence of
this Section 2.3(a), amounts of Swing Loans repaid may be reborrowed under this
Section 2.3(a). Within the limits set forth in the first sentence of this
Section 2.3(a), amounts prepaid pursuant to Section 2.8 (Optional Prepayments)
may be reborrowed under this Section 2.3(a).
(b) Notice of Borrowing. In order to request a Swing Loan,
the Borrower shall telecopy to the Administrative Agent a duly completed request
setting forth the date, the requested amount and date of the Swing Loan (a
"Swing Loan Request"), to be received by the Administrative Agent not later than
1:00 P.M. (New York City time) on the day of the proposed borrowing. The
Administrative Agent shall promptly notify the Swing Loan Lender of the details
of the requested Swing Loan. Subject to the terms of this Agreement, the Swing
Loan Lender shall make a Swing Loan available to the Administrative Agent which
will make such amounts available to the Borrower on the
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date of the relevant Swing Loan Request. The Swing Loan Lender shall not make
any Swing Loan in the period commencing on the first Business Day after it
receives written notice from any Lender that one or more of the conditions
precedent contained in Section 3.2 (Conditions Precedent to Each Loan and Letter
of Credit) shall not on such date be satisfied and ending when such conditions
are satisfied. The Swing Loan Lender shall not otherwise be required to
determine that, or take notice whether, the conditions precedent set forth in
Section 3.2 have been satisfied in connection with the making of any Swing Loan.
(c) Periodic Notifications. The Swing Loan Lender shall
notify the Administrative Agent in writing (which may be by telecopy) weekly, by
no later than 10:00 A.M. (New York City time) on the first Business Day of each
week, of the aggregate principal amount of its Swing Loans then outstanding.
(d) Payment on Demand. The Swing Loan Lender may demand at
any time that each Lender pay to the Administrative Agent, for the account of
the Swing Loan Lender, in the manner provided in Section 2.3(e) (Settlement of
the Swing Loans), such Lender's Ratable Portion of all or a portion of the
outstanding Swing Loans, which demand shall be made through the Administrative
Agent, shall be in writing and shall specify the outstanding principal amount of
Swing Loans demanded to be paid.
(e) Settlement of the Swing Loans. The Administrative Agent
shall forward each demand referred to in Section 2.3(d) (Payment on Demand) to
each Lender on the day such notice or such demand is received by the
Administrative Agent (except that any such notice or demand received by the
Administrative Agent after 2:00 P.M. (New York City time) on any Business Day or
any such demand received on a day that is not a Business Day shall not be
required to be forwarded to the Lenders by the Administrative Agent until the
next succeeding Business Day), together with a statement prepared by the
Administrative Agent specifying the amount of each Lender's Ratable Portion of
the aggregate principal amount of the Swing Loans stated to be outstanding in
such notice or demanded to be paid pursuant to such demand, and, notwithstanding
whether or not the conditions precedent set forth in Section 3.1 (Conditions
Precedent to the Effectiveness of this Agreement) or Section 3.2 (Conditions
Precedent to Each Loan and Letter of Credit) shall have been satisfied (which
conditions precedent the Lenders hereby irrevocably waive), each Lender shall,
before 11:00 A.M. (New York City time) on the Business Day next succeeding the
date of such Lender's receipt of such written statement, make available to the
Administrative Agent, in immediately available funds, for the account of such
Swing Loan Lender, the amount specified in such statement. Upon such payment by
a Lender, such Lender shall, except as provided in Section 2.3(f) (Pro-Rata
Participation Upon Default), be deemed to have made a Revolving Loan to the
Borrower. The Administrative Agent shall use such funds to repay the Swing Loans
to the Swing Loan Lender. To the extent that any Lender fails to make such
payment
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available to the Administrative Agent for the account of the Swing Loan Lender,
the Borrower shall repay such Swing Loan on demand.
(f) Pro-Rata Participation Upon Default. Upon the occurrence
of a Default under Section 9.1(i) (Bankruptcy, Etc.), each Lender shall acquire,
without recourse or warranty, an undivided participation in each Swing Loan
otherwise required to be repaid by such Lender pursuant to Section 2.3(e)
(Settlement of the Swing Loans), which participation shall be in a principal
amount equal to such Lender's Ratable Portion of such Swing Loan, by paying to
the Swing Loan Lender on the date on which such Lender would otherwise have been
required to make a payment in respect of such Swing Loan pursuant to Section
2.3(e), in immediately available funds, an amount equal to such Lender's Ratable
Portion of such Swing Loan. If such amount is not in fact made available by such
Lender to the Swing Loan Lender on such date, the Swing Loan Lender shall be
entitled to recover such amount on demand from such Lender together with
interest accrued from such date at the Federal Funds Rate for the first Business
Day after such payment was due and thereafter at the rate of interest then
applicable to Base Rate Loans.
(g) Post-Default Distribution of Payments. From and after
the date on which any Lender is deemed to have made a Revolving Loan with
respect to any Swing Loan pursuant to Section 2.3(e) (Settlement of the Swing
Loans) or purchases an undivided participation interest in a Swing Loan pursuant
to Section 2.3(f) (Pro-Rata Participation Upon Default), a Swing Loan Lender
shall promptly distribute to such Lender such Lender's Ratable Portion of all
payments of principal of and interest received by the Swing Loan Lender on
account of such Swing Loan other than those received from a Lender pursuant to
Section 2.3(e) or Section 2.3(f).
Section 2.4 Letters of Credit.
(a) Obligation to Issue. On the terms and subject to the
conditions contained in this Agreement, each Issuer agrees to issue one or more
Letters of Credit at the request of the Borrower for the account of the Borrower
from time to time during the period commencing on the Effective Date and ending
thirty (30) days prior to the Scheduled Termination Date or such later date
prior to the Scheduled Termination Date as may be agreed to by the
Administrative Agent; provided, however, that no Issuer shall be under any
obligation to issue any Letter of Credit if:
(i) any order, judgment or decree of any Governmental
Authority shall purport by its terms to enjoin or restrain such Issuer from
issuing such Letter of Credit or any Requirement of Law applicable to such
Issuer or any request or directive (whether or not having the force of law) from
any Governmental Authority with jurisdiction over such Issuer shall prohibit, or
request that such Issuer refrain from, the issuance of letters of credit
generally or such Letter of Credit in particular or shall impose
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upon such Issuer with respect to such Letter of Credit any restriction or
reserve or capital requirement (for which such Issuer is not otherwise
compensated) not in effect on the date hereof or result in any unreimbursed
loss, cost or expense which was not applicable, in effect or known to such
Issuer as of the date hereof and which such Issuer in good faith deems material
to it;
(ii) such Issuer shall have received written notice
from the Administrative Agent, any Lender or the Borrower, on or prior to the
requested date of issuance of such Letter of Credit, that one or more of the
applicable conditions contained in Section 3.1 (Conditions Precedent to the
Effectiveness of this Agreement) or Section 3.2 (Conditions Precedent to Each
Loan and Letter of Credit) is not then satisfied;
(iii) after giving effect to the issuance of such
Letter of Credit, the aggregate Outstanding Amounts would exceed the lesser of
(A) the aggregate of the Commitments in effect at such time or (B) the Borrowing
Base at such time;
(iv) after giving effect to the issuance of such
Letter of Credit, the sum of (i) the Letter of Credit Undrawn Amounts at such
time and (ii) the Reimbursement Obligations at such time exceeds fifty million
Dollars ($50,000,000) (the "Letter of Credit Sublimit");
(v) any fees due in connection with a requested
issuance have not been paid; or
(vi) with respect to any requested Letter of Credit
denominated in an Alternative Currency, if the Issuer receives written notice
from the Administrative Agent at or before 11:00 A.M. (New York time) on the
date of the proposed issuance of such Letter of Credit that, immediately after
giving effect to the issuance of such Letter of Credit, the Letter of Credit
Obligations at such time in respect of outstanding Letters of Credit denominated
in Alternative Currencies would exceed the Dollar Equivalent of the Letter of
Credit Sublimit minus the Letter of Credit Obligations at such time in respect
of outstanding Letters of Credit other than those denominated in Alternative
Currencies.
None of the Lenders (other than the Issuers in their capacity as such) shall
have any obligation to issue any Letter of Credit.
(b) Expiration Date. In no event shall the expiration date
of any Letter of Credit (i) be more than one (1) year after the date of issuance
thereof or (ii) be less than seven (7) days prior to the Scheduled Termination
Date; provided, however, that any Letter of Credit with a one-year term may
provide for the renewal thereof for additional
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one-year periods (which shall in no event extend beyond the expiry date referred
to in subsection (ii) of this Section 2.4(b)).
(c) Contents of Letter of Credit Request. In connection with
the issuance of each Letter of Credit, the Borrower shall give the relevant
Issuer and the Administrative Agent at least two (2) Business Days' prior
written notice (a "Letter of Credit Request"), in substantially the form of
Exhibit K (or in such other written or electronic form as is acceptable to the
Issuer), of the requested issuance of such Letter of Credit. Such notice shall
be irrevocable and shall specify the Issuer of such Letter of Credit, the stated
amount of the Letter of Credit requested, which stated amount shall not be less
than two hundred and fifty thousand Dollars ($250,000) (or, if such Letter of
Credit is to be denominated in an Alternative Currency, the Dollar Equivalent
thereof), the date of issuance of such requested Letter of Credit (which day
shall be a Business Day), the date on which such Letter of Credit is to expire
(which date shall be a Business Day) and the Person for whose benefit the
requested Letter of Credit is to be issued. Such notice, to be effective, must
be received by the relevant Issuer and the Administrative Agent not later than
11:00 A.M. (New York City time) on the last Business Day on which notice can be
given under the immediately preceding sentence.
(d) Procedure for Issuance. Subject to the terms and
conditions of this Section 2.4(d) and the following sentence, the relevant
Issuer shall, on the requested date, issue a Letter of Credit on behalf of the
Borrower in accordance with such Issuer's usual and customary business
practices. No Issuer shall issue any Letter of Credit in the period commencing
on the first Business Day after it receives written notice from any Lender that
one or more of the conditions precedent contained in Section 3.2 (Conditions
Precedent to Each Loan and Letter of Credit) shall not on such date be satisfied
and ending when such conditions are satisfied. The relevant Issuer shall not
otherwise be required to determine that, or take notice whether, the conditions
precedent set forth in Section 3.2 have been satisfied in connection with the
issuance of any Letter of Credit.
(e) Compliance with Conditions Precedent. On the date of the
proposed issuance of the Letter of Credit, the Administrative Agent shall
confirm to the relevant Issuer that the applicable conditions set forth in
Section 3.1 (Conditions Precedent to the Effectiveness of this Agreement) or
Section 3.2 (Conditions Precedent to Each Loan and Letter of Credit) are
satisfied.
(f) Execution of Letter of Credit Reimbursement Agreement.
If requested by the relevant Issuer, prior to the issuance of each Letter of
Credit by such Issuer and as a condition of such issuance and of the
participation of each Lender in the Letter of Credit Obligations arising with
respect thereto, the Borrower shall have delivered to such Issuer a letter of
credit reimbursement agreement, in such form as the Issuer may employ in its
ordinary course of business for its own account (a "Letter of Credit
Reimbursement Agreement"), signed by the Borrower and such other documents or
items as may be
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required pursuant to the terms thereof. In the event of any conflict between the
terms of any Letter of Credit Reimbursement Agreement and this Agreement, the
terms of this Agreement shall govern.
(g) Payment Obligations of the Borrower. The Borrower agrees
to pay to the Issuer of any Letter of Credit the amount of all Reimbursement
Obligations owing to such Issuer under any Letter of Credit issued for its
account when such amounts are due and payable, irrespective of any claim, set-
off, defense or other right which the Borrower may have at any time against such
Issuer or any other Person. In the absence of gross negligence or willful
misconduct by the Issuer, the Borrower's obligations to pay each Reimbursement
Obligation shall be absolute, unconditional and irrevocable, and shall be
performed strictly in accordance with the terms of this Agreement, under any and
all circumstances whatsoever, and irrespective of:
(i) any lack of validity or enforceability of any
Letter of Credit or any Loan Document, or any term or provision therein;
(ii) any amendment or waiver of or any consent to
departure from all or any of the provisions of any Letter of Credit or any Loan
Document;
(iii) the existence of any claim, set off, defense or
other right that the Borrower, any other party guaranteeing, or otherwise
obligated with, the Borrower, any Subsidiary or other Affiliate thereof or any
other person may at any time have against the beneficiary under any Letter of
Credit, Issuer, the Administrative Agent or any Lender or any other Person,
whether in connection with this Agreement, any other Loan Document or any other
related or unrelated agreement or transaction;
(iv) any draft or other document presented under a
Letter of Credit proving to be forged, fraudulent, invalid or insufficient in
any respect or any statement therein being untrue or inaccurate in any respect;
(v) payment by the Issuer under a Letter of Credit
against presentation of a draft or other document that does not comply with the
terms of such Letter of Credit; and
(vi) any other act or omission to act or delay of
any kind of the Issuer, the Lenders, the Administrative Agent or any other
Person or any other event or circumstance whatsoever, whether or not similar to
any of the foregoing, that might, but for the provisions of this Section,
constitute a legal or equitable discharge of the Borrower's obligations
hereunder.
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(h) Obligations of the Lenders to Purchase an Undivided
Interest. Immediately upon the issuance by an Issuer of a Letter of Credit in
accordance with the terms and conditions of this Agreement, such Issuer shall be
deemed to have sold and transferred to each Lender, and each Lender shall be
deemed irrevocably and unconditionally to have purchased and received from such
Issuer, without recourse or warranty, an undivided interest and participation,
to the extent of such Lender's Ratable Portion of the Commitments, in such
Letter of Credit and the obligations of the Borrower with respect thereto
(including all Letter of Credit Obligations with respect thereto) and any
security therefor and guaranty pertaining thereto.
(i) Non-Payment by the Borrower; Payment Obligation of the
Lenders. In the event that any Issuer makes any payment under any Letter of
Credit and the Borrower shall not have repaid such amount to such Issuer
pursuant to Section 2.4(g) (Payment Obligations of the Borrower) or such payment
is rescinded or set aside for any reason, such Reimbursement Obligation shall be
payable on demand with interest thereon computed from the date on which such
Reimbursement Obligation arose to the date of repayment in full at the rate of
interest applicable to past due Base Rate Loans during such period, and such
Issuer shall promptly notify the Administrative Agent, which shall promptly
notify each Lender of such failure, and each Lender shall promptly and
unconditionally pay to the Administrative Agent for the account of such Issuer
the amount of such Lender's Ratable Portion of such payment in Dollars (or the
Dollar Equivalent thereof if such payment was made in an Alternative Currency)
and in immediately available funds. If the Administrative Agent so notifies such
Lender prior to 11:00 A.M. (New York City time) on any Business Day, such Lender
shall make available to the Administrative Agent for the account of such Issuer
its Ratable Portion of the amount of such payment on such Business Day in
immediately available funds. Upon such payment by a Lender, such Lender shall,
except during the continuance of a Default or Event of Default under Section
9.1(i) (Bankruptcy, Etc.) and notwithstanding whether or not the conditions
precedent set forth in Section 3.2 (Conditions Precedent to Each Loan and Letter
of Credit) shall have been satisfied (which conditions precedent the Lenders
hereby irrevocably waive) be deemed to have made a Loan to the Borrower in the
principal amount of such payment. Whenever any Issuer receives from the Borrower
a payment of a Reimbursement Obligation as to which the Administrative Agent has
received for the account of such Issuer any payment from a Lender pursuant to
Section 2.4(g) (Payment Obligations of the Borrower), such Issuer shall pay to
the Administrative Agent and the Administrative Agent shall promptly pay to each
Lender, in immediately available funds, an amount equal to such Lender's Ratable
Portion of the amount of such payment adjusted, if necessary, to reflect the
respective amounts the Lenders have paid in respect of such Reimbursement
Obligation.
(j) Non-Payment by a Lender. If and to the extent a Lender
shall not have made its Ratable Portion of the amount of the payment referred to
in Section 2.4(i) (Non Payment by the Borrower; Payment Obligations of the
Lenders) available to the Administrative Agent for the account of such Issuer,
such Lender agrees to pay to the
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Administrative Agent for the account of such Issuer forthwith on demand such
amount together with interest thereon, for the first (1st) Business Day after
payment was first due at the Federal Funds Rate, and thereafter until such
amount is repaid to the Administrative Agent for the account of such Issuer, at
the rate per annum applicable to Base Rate Loans. The failure of any Lender to
make available to the Administrative Agent for the account of such Issuer its
Ratable Portion of any such payment shall not relieve any other Lender of its
obligation hereunder to make available to the Administrative Agent for the
account of such Issuer its Ratable Portion of any payment on the date such
payment is to be made, but no Lender shall be responsible for the failure of any
other Lender to make available to the Administrative Agent for the account of
the Issuer such other Lender's Ratable Portion of any such payment.
(k) Obligations of the Lenders Towards the Issuer. The
obligations of the Lenders to make payments to the Administrative Agent for the
account of the Issuers with respect to Letters of Credit shall be irrevocable
and not subject to any qualification or exception whatsoever and shall be made
in accordance with the terms and conditions of this Agreement under all
circumstances including the occurrence of any Default or Event of Default.
Without limiting the foregoing, in determining whether to pay under any Letter
of Credit, the relevant Issuer shall not have any obligation relative to the
Lenders other than to confirm that any documents required to be delivered under
such Letter of Credit appear to have been delivered and that they appear to
comply on their face with the requirements of such Letter of Credit. Any action
taken or omitted to be taken by the relevant Issuer under or in connection with
any Letter of Credit, if taken or omitted in the absence of gross negligence or
willful misconduct, shall not put such Issuer under any resulting liability to
any Lender.
(l) Obligations of Issuer Towards the Lenders. Each Issuer
shall:
(i) give the Administrative Agent written notice (or
telephonic notice confirmed promptly thereafter in writing, which may be by
telecopier) of the issuance or renewal of a Letter of Credit issued by it, of
all drawings under a Letter of Credit issued by it and the payment (or the
failure to pay when due) by the Borrower of any Reimbursement Obligation when
due (which notice the Administrative Agent shall promptly transmit by telecopy
or similar transmission to each Lender).
(ii) upon the request of any Lender, furnish to such
Lender copies of any Letter of Credit Reimbursement Agreement to which such
Issuer is a party and such other documentation as may reasonably be requested by
such Lender; and
(iii) no later than the tenth (10/th/) Business Day
following the last day of each calendar month, provide to the Administrative
Agent (and the Administrative Agent shall provide a copy thereof to each Lender
requesting the same) and the Borrower separate schedules for Documentary and
Standby Letters of Credit
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issued by it, in form and substance reasonably satisfactory to the
Administrative Agent, setting forth the aggregate Letter of Credit Obligations
outstanding at the end of such calendar month and any information requested by
the Borrower or the Administrative Agent relating thereto.
(m) Rights of Issuers to Rely on Documents Presented. In the
absence of gross negligence or willful misconduct by the Issuer, in determining
whether drafts and other documents presented under a Letter of Credit comply
with the terms thereof, the Issuer may accept documents that appear on their
face to be in order, without responsibility for further investigation,
regardless of any notice or information to the contrary and, in making any
payment under any Letter of Credit, the Issuer may rely exclusively on the
documents presented to it under such Letter of Credit as to any and all matters
set forth therein, including reliance on the amount of any draft presented under
such Letter of Credit, whether or not the amount due to the beneficiary
thereunder equals the amount of such draft and whether or not any document
presented pursuant to such Letter of Credit proves to be insufficient in any
respect, if such document on its face appears to be in order, and whether or not
any other statement or any other document presented pursuant to such Letter of
Credit proves to be forged or invalid or any statement therein proves to be
inaccurate or untrue in any respect whatsoever. Any noncompliance in any
immaterial respect of the documents presented under such Letter of Credit with
the terms thereof shall, in each case, be deemed not to constitute willful
misconduct or gross negligence of the Issuer.
Section 2.5 Reduction and Termination of the Commitments.
The Borrower may, upon at least three (3) Business Days' prior notice to the
Administrative Agent, terminate in whole or reduce ratably in part the unused
portions of the respective Commitments of the Lenders; provided, however, that
each partial reduction shall be in the aggregate amount of not less than five
million Dollars ($5,000,000) or an integral multiple of five million Dollars
($5,000,000) in excess thereof.
Section 2.6 Repayment of Loans. The Borrower shall repay
the entire unpaid principal amount of the Revolving Loans on the Scheduled
Termination Date.
Section 2.7 Evidence of Indebtedness.
(a) Maintenance of Accounts by Lenders. Each Lender shall
maintain in accordance with its usual practice an account or accounts evidencing
indebtedness of the Borrower to such Lender resulting from each Loan of such
Lender from time to time, including the amounts of principal and interest
payable and paid to such Lender from time to time under this Agreement.
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(b) Maintenance of Accounts by Administrative Agent. The
Administrative Agent shall maintain accounts in accordance with its usual
practice in which it will record (i) the amount of each Loan made and the
Interest Period applicable thereto, (ii) the amount of any principal or interest
due and payable by the Borrower to each Lender hereunder and (iii) the amount of
any sum received by the Administrative Agent hereunder from the Borrower and
each Lender's share thereof, if applicable.
(c) Accounts as Prima Facie Evidence. The entries made in
the accounts maintained pursuant to Section 2.7(a) (Maintenance of Accounts by
Lenders) and Section 2.7(b) (Maintenance of Accounts by Administrative Agent)
shall, to the extent permitted by applicable law, be prima facie evidence of the
existence and amounts of the obligations recorded therein; provided, however,
that the failure of any Lender or the Administrative Agent to maintain such
accounts or any error therein shall not in any manner affect the obligation of
the Borrower to repay the Loans in accordance with their terms.
(d) Prompt Execution of Notes. Notwithstanding any other
provision of the Agreement, in the event that any Lender requests that the
Borrower execute and deliver a promissory note or notes payable to such Lender
in order to evidence the indebtedness owing to such Lender by the Borrower
hereunder, the Borrower will promptly execute and deliver a Note or Notes to
such Lender evidencing any Revolving Loans of such Lender, substantially in the
form of Exhibit A, and the interests evidenced by such note or notes shall at
all times (including after assignment of all or part of such interests) be
evidenced by one or more Notes payable to the payee named therein or its
registered assigns.
Section 2.8 Optional Prepayments.
(a) Procedure for Prepayment. The Borrower may, upon at
least three (3) Business Days' prior notice to the Administrative Agent, stating
the proposed date and aggregate principal amount of the prepayment, prepay the
outstanding principal amount of the Revolving Loans in whole or ratably in part,
together with accrued interest to the date of such prepayment on the principal
amount prepaid; provided, however, that if any prepayment of any Eurodollar Rate
Loan is made by the Borrower other than on the last day of an Interest Period
for such Loan, the Borrower shall also pay any amounts owing pursuant to Section
11.3(d) (Reimbursement of Brokers' Fees); and, provided, further, that each
partial prepayment shall be in an aggregate principal amount not less than five
million Dollars ($5,000,000) or integral multiples of one million Dollars
($1,000,000) in excess thereof. Upon the giving of such notice of prepayment,
the principal amount of the Revolving Loans specified to be prepaid shall become
due and payable on the date specified for such prepayment.
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(b) Exclusive Procedure. The Borrower shall have no right to
prepay the principal amount of any Revolving Loan other than as provided in this
Section 2.8.
Section 2.9 Mandatory Prepayments.
(a) Asset Sales or Debt Issuances. Upon receipt by the
Borrower or any of its Subsidiaries of Net Cash Proceeds arising (i) from an
Asset Sale or a Debt Issuance, the Borrower shall forthwith prepay the Loans in
an amount equal to one hundred percent (100%) of such Net Cash Proceeds and (ii)
from an Equity Issuance, the Borrower shall forthwith prepay the Loans in an
amount equal to fifty percent (50%) of such Net Cash Proceeds; provided,
however, that this Section 2.9(a) shall not apply to all or part of the Net Cash
Proceeds received in connection with a sale, assignment or other disposition
constituting an Asset Sale as long as (x) all or such part of such Net Cash
Proceeds are identified in a Reinvestment Notice validly delivered in respect
thereof and (y) on the Reinvestment Payment Date corresponding to such Net Cash
Proceeds, an amount equal to the corresponding Reinvestment Prepayment Amount is
paid to the Administrative Agent by the Borrower and applied in accordance with
this Section 2.9(a) to prepay the Loans; provided, further, that the Borrower
may, in its sole discretion, apply all or part of the amount of Net Cash
Proceeds of "Mortgaged Property" (as defined in Section 1.01 (Definitions) of
the Indenture) as required under the Indenture.
(b) Excess Borrowing. If at any time, (i) the aggregate
principal amount of Outstanding Amounts exceed the aggregate Commitments or (ii)
a Borrowing Base Deficiency exists and is continuing, the Borrower shall
forthwith pay the full amount of such excess or deficiency, as the case may be,
together with accrued interest. If any such excess or deficiency, as the case
may be, remains after repayment in full of the aggregate outstanding Loans, the
Borrower agrees to promptly cash collateralize the Obligations by paying to the
Administrative Agent immediately available funds in an amount necessary to
eliminate such excess or deficiency, as the case may be, for deposit in the Cash
Collateral Account, which funds shall be maintained in, and disbursed from, the
Cash Collateral Account in accordance with the provisions of Section 2.9(c)
(Application of Funds During Cash Dominion Period) and Section 9.3 (Cash
Collateralization of Letters of Credit).
(c) Application of Funds During Cash Dominion Period. During
a Cash Dominion Period, all available funds in the Cash Collateral Account shall
be applied daily as follows: first, to repay the outstanding principal balance
of the Swing Loans until such Swing Loans shall have been repaid in full;
second, to repay the outstanding principal balance of the Revolving Loans until
such Revolving Loans shall have been paid in full; third, to provide cash
collateral for any Letter of Credit Obligations in the manner set forth in
Section 9.3 (Cash Collateralization of Letters of Credit) until all such Letter
of Credit Obligations have been fully cash collateralized in the manner set
forth therein; fourth, as provided in Section 2.13(e) (Application of Loan
Payments); and fifth,
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any remaining funds in the Cash Collateral Account shall be paid over to the
Borrower or as directed by the Borrower; provided, however, that the
Administrative Agent shall have the right to change the order of application of
payments pursuant to Section 2.13(e) (Application of Loan Payments) upon the
occurrence and during the continuance of a Default or Event of Default.
Section 2.10 Interest.
(a) Rate. All Loans and the outstanding principal balance
of all other Obligations shall bear interest on the unpaid principal amount
thereof from the date such Loans are made and such other Obligations are due and
payable until paid in full, except as otherwise provided in Section 2.10(c)
(Default Rate), as follows:
(i) if a Base Rate Loan or such other Obligation, at
a rate per annum equal to the sum of (A) the Base Rate as in effect
from time to time as interest accrues, plus (B) the Applicable Margin;
and
(ii) if a Eurodollar Rate Loan, at a rate per annum
equal to the sum of (A) the Eurodollar Rate determined for the
applicable Interest Period, plus (B) the Applicable Margin in effect
from time to time during such Eurodollar Interest Period.
(b) Accrual. (i) Interest accrued on each Base Rate Loan
(other than Swing Loans) shall be payable in arrears (A) on the last day of each
Quarter, commencing on the first such day following the making of such Base Rate
Loan and (B) if not theretofore paid in full, at maturity (whether by
acceleration or otherwise) of such Base Rate Loan; (ii) interest accrued on
Swing Loans shall be payable in arrears on the first Business Day of the
immediately succeeding Quarter; (iii) interest accrued on each Eurodollar Rate
Loan shall be payable in arrears (A) on the last day of each Interest Period
applicable to such Loan and if such Interest Period has a duration of more than
three (3) months, on each day during such Interest Period which occurs every
three (3) months from the first day of such Interest Period, (B) upon the
payment or prepayment thereof in full or in part and (C) if not theretofore paid
in full, at maturity (whether by acceleration or otherwise) of such Eurodollar
Rate Loan; and (iv) interest accrued on the principal balance of all other
Obligations shall be payable in arrears (A) on the last day of each Quarter,
commencing on the first such day following the incurrence of such Obligation,
(B) upon repayment thereof in full or in part and (C) if not theretofore paid in
full, at the time such other Obligation becomes due and payable (whether by
acceleration or otherwise).
(c) Default Rate. Notwithstanding the rates of interest
specified in Section 2.10(a) (Rate) or elsewhere herein, effective immediately
upon the occurrence of
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an Event of Default and for as long thereafter as such Event of Default shall be
continuing, the principal balance of all Loans and of all other Obligations
shall bear interest at a rate which is two percent (2%) per annum in excess of
the rate of interest applicable to such Obligations from time to time.
Section 2.11 Conversion and Continuation Options.
(a) Delivery of Notice of Conversion or Continuation. The Borrower
may elect (i) at any time, to convert Base Rate Loans (other than Swing Loans)
or any portion thereof to Eurodollar Rate Loans or (ii) at the end of any
applicable Interest Period, to convert Eurodollar Rate Loans or any portion
thereof into Base Rate Loans or to continue such Eurodollar Rate Loans or any
portion thereof for an additional Interest Period; provided, however, that the
aggregate amount of the Eurodollar Loans for each Interest Period must be in the
amount of a Eurodollar Borrowing Unit or an integral multiple of five million
Dollars ($5,000,000) in excess thereof. Each conversion or continuation shall be
allocated among the Loans of each Lender in accordance with its Ratable Portion.
Each such election shall be made by giving the Administrative Agent at least
three(3) Business Days' prior written notice (a "Notice of Conversion or
Continuation"), which shall in substantially the form of Exhibit C hereto and
shall specify (A) the amount and type of Loan being converted or continued, (B)
in the case of a conversion to, or a continuation of, Eurodollar Rate Loans, the
applicable Interest Period and (C) in the case of a conversion, the date of
conversion (which date shall be a Business Day and, if a conversion from
Eurodollar Rate Loans, shall also be the last day of the applicable Interest
Period). Each Notice of Conversion or Continuation shall be irrevocable and
binding upon the Borrower. The Administrative Agent shall promptly notify each
Lender of its receipt of a Notice of Conversion or Continuation and of the
options selected therein. The election of the Borrower made in accordance with
this Section 2.11(a) shall be effective, subject to Section 2.11(b) (Event of
Default; Failure to Give Appropriate Notice).
(b) Event of Default; Failure to Give Appropriate Notice.
Notwithstanding the foregoing, no conversion in whole or in part of Base Rate
Loans to Eurodollar Rate Loans, and no continuation in whole or in part of
Eurodollar Rate Loans upon the expiration of any applicable Interest Period,
shall be permitted at any time at which (i) a Default or an Event of Default
shall have occurred and be continuing or (ii) the continuation of, or conversion
into, would violate any of the provisions of Section 2.15 (Special Provisions
Governing Eurodollar Rate Loans). If, within the time period required under the
terms of this Section 2.11, the Administrative Agent does not receive a Notice
of Conversion or Continuation from the Borrower containing a permitted election
to continue any Eurodollar Rate Loans for an additional Interest Period or to
convert any such Loans, then, upon the expiration of the applicable Interest
Period, such Loans will be automatically converted to Base Rate Loans.
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Section 2.12 Fees.
(a) Unused Commitment Fee. The Borrower agrees to pay to each Lender
a commitment fee (the "Unused Commitment Fee") on the average daily unused
portion of such Lender's Commitment from the date hereof until the Termination
Date at the Unused Commitment Fee Rate, payable in arrears (i) on the last day
of each Quarter, commencing on the first such day following the Effective Date
and (ii) on the Termination Date.
(b) Additional Fees. The Borrower has agreed to pay to Citicorp
additional fees, the amount and dates of payment of which are embodied in the
Fee Letter.
(c) Letter of Credit Fees. The Borrower agrees to pay the following
amounts with respect to Letters of Credit issued for its account:
(i) to the Administrative Agent for the account of the
Issuer of any Letter of Credit, with respect to each Letter of Credit
issued by such Issuer, an issuance fee equal to one quarter of one percent
(0.25%) per annum of the maximum amount available from time to time to be
drawn under such Standby Letter of Credit, payable in arrears on the last
day of each Quarter, commencing on the first such day following the
issuance of such Letter of Credit and (ii) on the Termination Date;
(ii) to the Administrative Agent for the ratable benefit of
the Lenders, with respect to each Letter of Credit, the Letter of Credit
Fee, payable in arrears on the last day of each calendar Quarter,
commencing on the first such day following the issuance of such Letter of
Credit and (ii) on the Termination Date; provided, however, that during the
continuance of an Event of Default, the Letter of Credit Fee shall be
increased by two percent (2%) per annum and shall be payable on demand; and
(iii) to the Issuer of any Letter of Credit, with respect to
the issuance, amendment or transfer of each Letter of Credit and each
drawing made thereunder, documentary and processing charges in accordance
with such Issuer's standard schedule for such charges in effect at the time
of issuance, amendment, transfer or drawing, as the case may be.
Section 2.13 Payments and Computations; Protective Advances.
(a) Payment Procedures. The Borrower shall make each payment
hereunder (including fees and expenses) not later than 1:00 P.M. (New York City
time)
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on the day when due, in Dollars to the Administrative Agent at its address
referred to in Section 11.9 (Notices, Etc.) in immediately available funds
without set-off or counterclaim. The Administrative Agent will promptly
thereafter cause to be distributed immediately available funds relating to the
payment of principal or interest or fees to the Lenders, in accordance with the
application of payments set forth in Section 2.13(e) (Application of Loan
Payments), for the account of their respective Applicable Lending Offices and
like funds relating to the payment of any other amount payable to any Lender to
such Lender for the account of its Applicable Lending Office, in each case to be
applied in accordance with the terms of this Agreement; provided, however, that
amounts payable pursuant to Section 2.15(c) (Cost Increases Due to Changes in
Law), Section 2.15(d) (Eurodollar Lending Declared Unlawful), Section 2.16
(Capital Adequacy) and Section 2.17 (Taxes) shall be paid only to the affected
Lender or Lenders and amounts payable with respect to Swing Loans shall be paid
only to the Swing Loan Lender. Payments received by the Administrative Agent
after 1:00 P.M. (New York City time) shall be deemed to be received on the next
Business Day.
(b) Computations of Interest. All computations of interest and fees
shall be made by the Administrative Agent on the basis of a year of three
hundred and sixty (360) days for the actual number of days (including the first
day but excluding the last day) occurring in the period for which such interest
and fees are payable. Each determination by the Administrative Agent of an
interest rate hereunder shall be conclusive and binding for all purposes, absent
manifest error.
(c) Payments on Business Days. Whenever any payment hereunder shall
be stated to be due on a day other than a Business Day, such payment shall be
made on the next succeeding Business Day, and such extension of time shall in
such case be included in the computation of payment of interest or fees, as the
case may be; provided, however, that if such extension would cause payment of
interest on or principal of any Eurodollar Rate Loan to be made in the next
calendar month, such payment shall be made on the immediately preceding Business
Day.
(d) Assumption that Payment Has Been Made. Unless the Administrative
Agent shall have received notice from the Borrower prior to the date on which
any payment is due hereunder to the Lenders that the Borrower will not make such
payment in full, the Administrative Agent may assume that the Borrower has made
such payment in full to the Administrative Agent on such date and the
Administrative Agent may, in reliance upon such assumption, cause to be
distributed to each Lender on such due date an amount equal to the amount then
due such Lender. If and to the extent the Borrower shall not have made such
payment in full to the Administrative Agent, each Lender shall repay to the
Administrative Agent forthwith on demand such amount distributed to such Lender
together with interest thereon at the Federal Funds Rate, for each day from the
date such amount is distributed to such Lender until the date such Lender repays
such amount to the Administrative Agent.
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(e) Application of Loan Payments. As long as no Default or Event of
Default shall have occurred and be continuing, all payments received by the
Administrative Agent shall be paid to the Lenders (i) if in respect of Revolving
Loans, pro rata in accordance with the principal amount of the Revolving Loans
thereof held by each Lender and (ii) if in respect of fees payable to the
Lenders, in accordance with their Ratable Portions. As to all payments made and
proceeds of Collateral received when a Default or Event of Default shall have
occurred and be continuing or following the Termination Date, the Borrower
hereby irrevocably waives the right to direct the application of any and all
payments and proceeds received and agrees that the Administrative Agent shall
have the continuing exclusive right to apply any and all such payments and
proceeds against the Obligations in such order as the Administrative Agent may
deem advisable. In the absence of a specific determination by the Administrative
Agent with respect thereto (and to the extent not otherwise provided in Section
2.9(c) (Application of Funds During Cash Dominion Period)), all such payments
and proceeds of Collateral shall be applied to the Obligations in the following
order: first, to pay interest on and then principal of any portion of the
Revolving Loans which the Administrative Agent or any of its Affiliates may have
advanced on behalf of any Lender for which the Administrative Agent or such
Affiliate has not then been reimbursed by such Lender or the Borrower; second,
to pay interest on and then principal of any Swing Loan; third, to pay any cash
management fee or any Obligation due under any Hedging Contract with any Lender
or any of its Affiliates; fourth, to pay Obligations in respect of any expense
reimbursements or indemnities then due the Administrative Agent or any of its
Affiliates; fifth, to pay Obligations in respect of any expense reimbursements
or indemnities then due to the Lenders and the Issuers; sixth, to pay Obligation
in respect of any fees then due to the Administrative Agent or any of its
Affiliates, the Lenders and the Issuers; seventh, to pay interest then due and
payable in respect of the Loans and Reimbursement Obligations; eighth, to pay or
prepay principal payments on the other Loans and to provide cash collateral for
outstanding Letter of Credit Obligations in the manner described in Section 9.3
(Cash Collateralization of Letters of Credit), ratably to the aggregate
principal amount of such other Loans and Letter of Credit Obligations; and
ninth, to the ratable payment of all other Obligations; provided, however, that
if sufficient funds are not available to fund all payments to be made in respect
of any of the Obligations described in any of the foregoing clauses first
through ninth, the available funds being applied with respect to any such
Obligation (unless otherwise specified in such clause) shall be allocated to the
payment of such Obligations ratably, based on the proportion of the
Administrative Agent's and each Lender's or Issuer's interest in the aggregate
outstanding Obligations described in such clauses. The order of priority set
forth in this Section 2.13(e) and the related provisions hereof are set forth
solely to determine the rights and priorities of the Administrative Agent, the
Swing Loan Lender, the Lenders, the Issuers and other Secured Parties as among
themselves. The order of priority set forth in clauses fifth through ninth of
this Section 2.13(e) may at any time and from time to time be changed by the
agreement of the Requisite Lenders without necessity of notice to or consent of
or approval by the Borrower, any Secured Party which is not a Lender or Issuer
or any other Person. The order of priority set forth in
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clauses first through sixth of this Section 2.13(e) may be changed only with the
prior written consent of the Administrative Agent (in addition to any consent
that may be required of the Lenders hereunder).
(f) Payments from Loans; Protective Advances. All payments of
principal on the Swing Loans, Reimbursement Obligations, interest, fees,
expenses and other sums due and payable in respect of the Loans (including those
expenses, disbursements and advances incurred by the Administrative Agent
pursuant to the Loan Documents after the occurrence and during the continuance
of an Event of Default which the Administrative Agent, in its sole discretion,
deems necessary or desirable to preserve or protect the Collateral or any
portion thereof or to enhance the likelihood or maximize the amount of repayment
of the Obligations) may, at the option of the Administrative Agent, be paid from
the proceeds of Swing Loans or Revolving Loans. The Borrower hereby authorizes
the Swing Loan Lender to make pursuant to Section 2.3 (Swing Loans) and the
Lenders to make pursuant to Section 2.2 (Borrowing Procedures), from time to
time in such Swing Loan Lender's, or such Lender's discretion, Swing Loans or
Revolving Loans, as applicable, which are in the amounts of any and all
principal payable with respect to the Swing Loans and interest, fees, expenses
and other sums payable in respect of the Revolving Loans and further authorizes
the Administrative Agent to give the Lenders notice of any Borrowing with
respect to such Swing Loans and Revolving Loans and to distribute the proceeds
of such Swing Loans and Revolving Loans to pay such amounts; provided, however,
that the aggregate principal amount outstanding in respect of such Swing Loans
and Revolving Loans shall not exceed five million Dollars ($5,000,000). The
Borrower agrees that all such Swing Loans and Revolving Loans so made shall be
deemed to have been requested by it (irrespective of the satisfaction of the
conditions in Section 3.2 (Conditions Precedent to Each Loan and Letter of
Credit), which conditions the Lenders irrevocably waive) and directs that all
proceeds thereof shall be used to pay such amounts.
Section 2.14 Cash Collateral Account. As provided in, and subject to
the provisions of, the Security Agreement, on or prior to the Effective Date,
the Borrower shall have established the cash collateral account No. 30412663
under the title "CUSA F/A/O National Steel Corporation" with Citibank in New
York, New York (the "Cash Collateral Account").
Section 2.15 Special Provisions Governing Eurodollar Rate Loans.
(a) Determination of Eurodollar Rate. The Eurodollar Rate for each
Interest Period for Eurodollar Rate Loans shall be determined by the
Administrative Agent pursuant to the procedures set forth in the definition of
"Eurodollar Rate." The Administrative Agent's determination shall be presumed to
be correct, absent manifest error, and shall be binding on the Borrower. The
Administrative Agent shall give prompt
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notice to the Borrower and the Lenders of the applicable interest rate
determined by the Administrative Agent for purposes of Section 2.9(b) (Excess
Borrowing).
(b) Impossibility to Ascertain Eurodollar Rate. In the event that (i)
the Administrative Agent determines that adequate and fair means do not exist
for ascertaining the applicable interest rates by reference to which the
Eurodollar Rate then being determined is to be fixed or (ii) the Requisite
Lenders notify the Administrative Agent that the Eurodollar Rate for any
Interest Period will not adequately reflect the cost to the Lenders of making or
maintaining such Loans for such Interest Period, the Administrative Agent shall
forthwith so notify the Borrower and the Lenders, whereupon each Eurodollar Loan
will automatically, on the last day of the current Interest Period for such
Loan, convert into a Base Rate Loan and the obligations of the Lenders to make
Eurodollar Rate Loans or to convert Base Rate Loans into Eurodollar Rate Loans
shall be suspended until the Administrative Agent shall notify the Borrower that
the Requisite Lenders have determined that the circumstances causing such
suspension no longer exist.
(c) Cost Increases Due to Changes in Law. If at any time any Lender
shall determine that the introduction of or any change in or in the
interpretation of any law, treaty or governmental rule, regulation or order
(other than any change by way of imposition or increase of reserve requirements
included in determining the Eurodollar Rate Reserve Percentage) or the
compliance by such Lender with any guideline, request or directive from any
central bank or other Governmental Authority (whether or not having the force of
law), there shall be any increase in the cost to such Lender of agreeing to make
or making, funding or maintaining any Eurodollar Rate Loans, then the Borrower
shall from time to time, upon demand by such Lender (with a copy of such demand
to the Administrative Agent), pay to the Administrative Agent for the account of
such Lender additional amounts sufficient to compensate such Lender for such
increased cost. A certificate as to the amount of such increased cost, submitted
to the Borrower and the Administrative Agent by such Lender, shall be conclusive
and binding for all purposes, absent manifest error.
(d) Eurodollar Lending Declared Unlawful. Notwithstanding any other
provision of this Agreement, if any Lender determines that the introduction of,
or any change in or in the interpretation of, any Requirement of Law shall make
it unlawful, or any central bank or other Governmental Authority shall assert
that it is unlawful, for any Lender or its Eurodollar Lending Office to make
Eurodollar Rate Loans or to continue to fund or maintain Eurodollar Rate Loans,
then, on notice thereof and demand therefor by such Lender to the Borrower
through the Administrative Agent, (i) the obligation of such Lender to make or
to continue Eurodollar Rate Loans and to convert Base Rate Loans into Eurodollar
Rate Loans shall be suspended, and each such Lender shall make a Base Rate Loan
as part of any requested Borrowing of Eurodollar Rate Loans and (ii) if the
affected Eurodollar Rate Loans are then outstanding, the Borrower shall
immediately convert each such Loan into a Base Rate Loan. If, at any time after
a Lender gives notice
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under this Section 2.15(d), such Lender determines that it may lawfully make
Eurodollar Rate Loans, such Lender shall promptly give notice of that
determination to the Borrower and the Administrative Agent, and the
Administrative Agent shall promptly transmit the notice to each other Lender.
The Borrower's right to request, and such Lender's obligation (if any) to make
Eurodollar Rate Loans, shall thereupon be restored.
(e) Specific Losses for Eurodollar Loans. In addition to all amounts
otherwise required to be paid by the Borrower pursuant to this Agreement, the
Borrower shall compensate each Lender, upon demand, for all losses, expenses and
liabilities (including any loss or expense incurred by reason of the liquidation
or reemployment of deposits or other funds acquired by such Lender to fund or
maintain such Lender's Eurodollar Rate Loans to the Borrower but excluding any
loss of the Applicable Margin on the relevant Loans) which that Lender may
sustain (i) if for any reason a proposed Borrowing, conversion into or
continuation of Eurodollar Rate Loans does not occur on a date specified
therefor in a Notice of Borrowing or a Notice of Conversion or Continuation
given by a Borrower or in a telephonic request by it for borrowing or conversion
or continuation or a successive Interest Period does not commence after notice
therefor is given pursuant to Section 2.11(a) (Delivery of Notice of Conversion
or Continuation), (ii) if for any reason any Eurodollar Rate Loan is prepaid
(including any mandatory prepayment pursuant to Section 2.9 (Mandatory
Prepayments)) on a date which is not the last day of the applicable Interest
Period, (iii) as a consequence of a required conversion of a Eurodollar Rate
Loan to a Base Rate Loan as a result of any of the events indicated in Section
2.15(b) (Impossibility to Ascertain Eurodollar Rate) or Section 2.15(d)
(Eurodollar Lending Declared Unlawful) or (iv) as a consequence of any failure
by a Borrower to repay Eurodollar Rate Loans when required by the terms hereof.
The Lender making demand for such compensation shall deliver to the Borrower
concurrently with such demand a written statement as to such losses, expenses
and liabilities, and this statement shall be conclusive as to the amount of
compensation due to that Lender, absent manifest error.
Section 2.16 Capital Adequacy. If at any time any Lender determines
that (a) the adoption of, or any change in or in the interpretation of, any
Requirement of Law regarding capital adequacy, (b) compliance with any such
Requirement of Law or (c) compliance with any guideline or request or directive
from any central bank or other Governmental Authority (whether or not having the
force of law) shall have the effect of reducing the rate of return on such
Lender's (or any Person controlling such Lender's) capital as a consequence of
its obligations hereunder, or under or in respect of any Letter of Credit, to a
level below that which such Lender or such Person could have achieved but for
such adoption, change, compliance or interpretation, then, upon demand from time
to time by such Lender (with a copy of such demand to the Administrative Agent),
the Borrower shall pay to the Administrative Agent for the account of such
Lender, from time to time as specified by such Lender, additional amounts
sufficient to compensate such Lender for such reduction. A certificate as to
such amounts submitted to the
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Borrower and the Administrative Agent by such Lender shall be conclusive and
binding for all purposes absent manifest error.
Section 2.17 Taxes.
(a) Deduction of Taxes. Any and all payments by the Borrower under
each Loan Document shall be made free and clear of and without deduction for any
and all present or future taxes, levies, imposts, deductions, charges or
withholdings and all liabilities with respect thereto, excluding, (x) in the
case of each Lender and the Administrative Agent, taxes measured by its net
income and franchise taxes imposed on it, by the jurisdiction (or any political
subdivision thereof) under the laws of which such Lender or the Administrative
Agent (as the case may be) is organized and, (y) in the case of each Lender,
taxes measured by its net income and franchise taxes imposed on it, by the
jurisdiction in which such Lender's Applicable Lending Office is located (all
such non-excluded taxes, levies, imposts, deductions, charges, withholdings and
liabilities being hereinafter referred to as "Taxes"). If the Borrower shall be
required by any Requirement of Law to deduct any Taxes from or in respect of any
sum payable under any Loan Document to any Lender or the Administrative Agent
(i) the sum payable shall be increased as may be necessary so that after making
all required deductions (including deductions applicable to additional sums
payable under this Section 2.17) such Lender or the Administrative Agent (as the
case may be) receives an amount equal to the sum it would have received had no
such deductions been made, (ii) the Borrower shall make such deductions, (iii)
the Borrower shall pay the full amount deducted to the relevant taxing authority
or other authority in accordance with applicable Requirements of Law and (iv)
the Borrower shall deliver to the Administrative Agent evidence of such payment.
(b) Stamp or Documentary Taxes. In addition, the Borrower agrees to
pay any present or future stamp or documentary taxes or any other excise or
property taxes, charges or similar levies of the United States or any applicable
foreign jurisdiction and all liabilities with respect thereto, which arise from
any payment made under any Loan Document or from the execution, delivery or
registration of, or otherwise with respect to, any Loan Document (collectively,
"Other Taxes").
(c) Indemnification. The Borrower will indemnify each Lender and the
Administrative Agent for the full amount of Taxes or Other Taxes (including any
Taxes or Other Taxes imposed by any jurisdiction on amounts payable under this
Section 2.17) paid by such Lender or the Administrative Agent (as the case may
be) and any liability (including for penalties, interest and expenses) arising
therefrom or with respect thereto, whether or not such Taxes or Other Taxes were
correctly or legally asserted. This indemnification shall be made within thirty
(30) days from the date such Lender or the Administrative Agent (as the case may
be) makes written demand therefor.
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(d) Receipt. Within thirty (30) days after the date of any payment of
Taxes or Other Taxes, the Borrower will furnish to the Administrative Agent, at
its address referred to in Section 11.9 (Notices, Etc.), the original or a
certified copy of a receipt evidencing payment thereof.
(e) Without prejudice to the survival of any other agreement of the
Borrower hereunder, the agreements and obligations of the Borrower contained in
this Section 2.17 shall survive the payment in full of the Obligations.
Section 2.18 Substitution of Lenders. In the event that (a) (i) any
Lender makes a claim under Section 2.15(c) (Cost Increases Due to Changes in
Law), Section 2.15(d) (Eurodollar Lending Declared Unlawful) or Section 2.16
(Capital Adequacy), (ii) it becomes illegal for any Lender to continue to fund
or make any Eurodollar Rate Loan and such Lender notifies the Borrower pursuant
to Section 2.15(e) (Specific Losses for Eurodollar Loans), (iii) the Borrower is
required to make any payment pursuant to Section 2.17 (Taxes) that is
attributable to any individual Lender or (iv) any Lender is a Non-Funding
Lender, (any such Lender, an "Affected Lender") (b) in the case of clause (a)(i)
above, as a consequence of increased costs in respect of which such claim is
made, the effective rate of interest payable to such Affected Lender under this
Agreement with respect to its Loans materially exceeds the effective average
annual rate of interest payable to the Requisite Lenders under this Agreement
and (c) Lenders holding at least seventy-five percent (75%) of the Commitments
are not subject to such increased costs or illegality, payment or proceedings,
the Borrower may substitute an Eligible Assignee for such Affected Lender
hereunder, upon reasonable prior written notice (which written notice must be
given within ninety (90) days following the occurrence of any of the events
described in clauses (a)(i), (ii), (iii) or (iv)) by the Borrower to the
Administrative Agent and the Affected Lender that the Borrower intends to make
such substitution, which Eligible Assignee, if not a Lender, must be reasonably
acceptable to the Administrative Agent, provided, however, that if more than one
Lender claims increased costs, illegality or right to payment arising from the
same act or condition and such claims are received by the Borrower within thirty
(30) days of each other then the Borrower may substitute all, but not (except to
the extent the Borrower has already substituted one of such Affected Lenders
before the Borrower's receipt of the other Affected Lenders' claim) less than
all, Lenders making such claims. In the event that the proposed substitute
Eligible Assignee is a Lender or is reasonably acceptable to the Administrative
Agent and the written notice was properly issued under this Section 2.18, the
Affected Lender shall sell, and such Eligible Assignee shall purchase, pursuant
to an Assignment and Acceptance, all rights and claims of such Affected Lender
under the Loan Documents, and such Eligible Assignee shall assume the
Commitments of the Affected Lender, and the Affected Lender shall be relieved of
such Commitments, and all other theretofore unperformed obligations of the
Affected Lender under the Loan Documents (other than in respect of any damages
(other than exemplary or punitive damages, to the extent permitted by applicable
Requirement of Law) in respect of any such unperformed obligations). Upon the
effectiveness of such sale, purchase and
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assumption (which, in any event shall be conditioned upon the payment in full by
the Borrower to the Affected Lender in cash of all fees, non-reimbursed costs
and expenses and indemnities accrued and unpaid through such effective date),
the substitute Eligible Assignee or other Person shall become a "Lender"
hereunder for all purposes of this Agreement having a Commitment (if applicable)
in the amount of such Affected Lender's Commitment assumed by it and such
Commitment (if applicable) of the Affected Lender shall be terminated; provided,
however, that all indemnities under the Loan Documents shall continue in favor
of such Affected Lender.
Section 2.19 Collateral Audits. As long as any Commitment or Loan is
outstanding, the Administrative Agent shall conduct, at the sole cost and
expense of the Borrower, at least one collateral audit each Year commencing with
the Year 2000.
ARTICLE III
Conditions Precedent to the Effectiveness of This Agreement
and to Loans and Letters of Credit
Section 3.1 Conditions Precedent to the Effectiveness of this
Agreement. This Agreement shall not become effective until, and the obligation
of each Lender to make the Loans requested to be made by it and the obligation
of each Issuer to issue Letters of Credit is subject to, the receipt by the
Administrative Agent of each of the following, each dated the Effective Date
unless otherwise indicated or agreed to by the Administrative Agent, in form and
substance satisfactory to the Administrative Agent and in sufficient copies for
each Lender:
(a) Credit Agreement. This Agreement, duly executed and delivered by
the Borrower and, for the account of each Lender requesting the same, a Note or
Notes of the Borrower conforming to the requirements set forth herein;
(b) Guaranty. The Guaranty, duly executed by the Guarantor;
(c) Security Agreement. The Security Agreement, duly executed by the
Borrower and the Guarantor, together with evidence satisfactory to the
Administrative Agent that the Administrative Agent (for the benefit of the
Secured Parties) has a valid and perfected first priority security interest in
the Collateral, including (A) such documents duly executed by each Loan Party as
the Administrative Agent may request with respect to the perfection of its
security interests in the Collateral (including evidence satisfactory to the
Administrative Agent that financing statements under the Uniform Commercial Code
and other applicable documents under any Requirement of Law of any jurisdiction
have been appropriately filed with respect to the perfection of Liens created by
the Security Agreement) and (B) copies of search reports pursuant to the Uniform
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Commercial Code as of a recent date listing all effective financing statements
that name any Loan Party as debtor, together with copies of such financing
statements, none of which shall cover the Collateral except for those which
shall be terminated on the Effective Date);
(d) Pledge Agreement. The Pledge Agreement, duly executed by the
Borrower, together with share certificates representing all of the certificated
Securities being pledged pursuant to such Pledge Agreement and stock powers for
such share certificates executed in blank;
(e) Opinions of Counsel. A favorable opinion of (i) Yukevich,
Marchetti, Liekar & Zangrilli, P.C., counsel to the Loan Parties, in
substantially the form of Exhibit I, and (ii) counsel to the Loan Parties in
Indiana, Illinois and Michigan, in each case addressed to the Administrative
Agent and the Lenders and addressing such other matters as any Lender through
the Administrative Agent may reasonably request;
(f) Intercreditor Agreement. The Intercreditor Agreement, in
substantially the form of Exhibit F, duly executed by the Borrower, the
Guarantor and the Receivables Facility Agent;
(g) Related Documents. A copy of each Related Document certified as
being complete and correct by a Responsible Officer of the Borrower;
(h) Constituent Documents. A copy of all Constituent Documents of
each Loan Party that have been filed with the Secretary of State of the state of
incorporation of such Loan Party or another Governmental Authority, certified as
of a recent date by such Secretary of State or other Governmental Authority,
together with certificates of such official attesting to the good standing of
each such Loan Party;
(i) Secretary Certificate. A certificate of the secretary or
assistant secretary of each Loan Party certifying as of the Effective Date (A)
the names and true signatures of each officer of such Loan Party who has been
authorized to execute and deliver any Loan Document or other document required
hereunder to be executed and delivered by or on behalf of such Loan Party, (B)
the Constituent Documents of such Loan Party as in effect on the date of such
certification and, in respect of those Constituent Document subject to Section
3.1(h) (Constituent Documents), that there have been no changes in such
Constituent Documents from the date of the certification by a Governmental
Authority delivered pursuant to Section 3.1(h) and (C) the resolutions of such
Loan Party's Board of Directors (or equivalent governing body) approving and
authorizing the execution, delivery and performance of this Agreement and the
other Loan Documents to which it is a party;
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(j) Solvency Certificate. A certificate of a Responsible Officer of
the Borrower, stating that the Borrower is Solvent as of the Effective Date
after giving effect to the payment of all estimated legal, accounting and other
fees related hereto;
(k) Initial Borrowing Base Certificate. An initial Borrowing Base
Certificate, substantially in the form of Exhibit G, setting forth the Borrowing
Base as of a recent date satisfactory to the Administrative Agent executed by a
Responsible Officer of the Borrower evidencing to the satisfaction of the
Administrative Agent an Available Credit greater than one hundred million
Dollars ($100,000,000) as of the Effective Date, after giving effect to (i) the
payment of all estimated legal, accounting and other fees related hereto and
(ii) any Loan and Letter of Credit (if any) to be made or issued on the
Effective Date;
(l) Officer Certificate. A certificate of a Responsible Officer to
the effect that (i) the conditions set forth in Section 3.2(b) (Representations
and Warranties; Borrowing Base Deficiency; Events of Default) have been
satisfied and (ii) no Legal Proceedings shall have been initiated against any
Loan Party or any of its Material Subsidiaries which, if adversely determined,
would have a Material Adverse Effect;
(m) Insurance. Evidence satisfactory to the Administrative Agent that
the insurance policies required by Section 7.5 (Maintenance of Insurance) and
each Collateral Document are in full force and effect, together with
endorsements naming the Administrative Agent, on behalf of the Secured Parties,
as an additional insured or loss payee under all insurance policies to be
maintained with respect to the Collateral;
(n) Auditors. A letter from the Loan Parties to their independent
certified public accountants authorizing the independent certified public
accountants of the Loan Parties to communicate with the Administrative Agent and
the Lenders in accordance with Section 7.6 (Access);
(o) Cash Management. Evidence satisfactory to the Administrative
Agent that, as of the Effective Date, the procedures with respect to cash
management required by Section 2.14 (Cash Collateral Account) and by the
Collateral Documents have been established and are currently being maintained by
each Loan Party, together with copies of all executed lockbox and blocked
account agreements executed by such Loan Party in connection therewith;
(p) Fee and Expenses Paid. Evidence satisfactory to the
Administrative Agent that, as of the Effective Date, all costs accrued and
unpaid fees and expenses due and payable on or before the Effective Date
(including all such fees described in the Fee Letter) required to be paid to the
Administrative Agent and the Lenders on or before the Effective Date have been
paid;
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(q) Consents, Etc. Evidence satisfactory to the Administrative Agent
that, as of the Effective Date, each of the Borrower and its Material
Subsidiaries shall have received all consents and authorizations required
pursuant to any material Contractual Obligation with any other Person and shall
have obtained all Permits of, and effected all notices to and filings with, any
Governmental Authority, in each case, as may be necessary to allow each of the
Borrower and its Material Subsidiaries lawfully (A) to execute, deliver and
perform, in all material respects, their respective obligations hereunder, the
Loan Documents to which each of them, respectively, is, or shall be, a party and
each other agreement or instrument to be executed and delivered by each of them,
respectively, pursuant thereto or in connection therewith and (B) to create and
perfect the Liens on the Collateral to be owned by each of them in the manner
and for the purpose contemplated by the Loan Documents;
(r) Refinancing. Evidence satisfactory to the Administrative Agent
that, as of the Effective Date, the Refinancing shall have occurred in form and
substance satisfactory to the Administrative Agent; and
(s) Additional Documents. Such other certificates, documents,
agreements and information with respect to any Loan Party as the Administrative
Agent may, in its sole discretion, request.
Section 3.2 Conditions Precedent to Each Loan and Letter of Credit.
The obligation of each Lender to make any Loan and of each Issuer on any date to
issue any Letter of Credit shall be subject to the satisfaction of all of the
following further conditions precedent, that:
(a) Notices and Requests. With respect to any Loan, the
Administrative Agent shall have received a duly executed Notice of Borrowing
(or, in the case of Swing Loans, a duly executed Swing Loan Request), and, with
respect to any Letter of Credit, the Administrative Agent and the Issuer shall
have received a duly executed Letter of Credit Request;
(b) Representations and Warranties; Borrowing Base Deficiency; Events
of Default. The following statements shall be true on the date of such Loan or
issuance, both before and after giving effect thereto and to the application of
the proceeds therefrom and to such issuance:
(i) the representations and warranties set forth in Article
IV (Representations and Warranties) shall be true and correct in all
material respects on and as of such date with the same effect as though
made on and as of such date, except to the extent such representations and
warranties expressly relate to an earlier date;
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(ii) no Borrowing Base Deficiency shall exist; and
(iii) no Default or Event of Default shall have occurred and
be continuing;
(c) The Borrower shall certify in writing to the Administrative
Agent the amount of the Receivables Availability as of the close of business on
the Business Day immediately preceding such Loan or issuance.
(d) Requirements of Law. The making of such Loan or the issuance
of such Letter of Credit on such date does not violate any Requirement of Law on
the date of or immediately following such Loan or issuance and is not enjoined,
temporarily, preliminarily or permanently; and
(e) Additional Documents. The Administrative Agent shall have
received such additional documents, information and materials as any Lender,
through the Administrative Agent, may reasonably request.
Each submission by the Borrower to the Administrative Agent of a Notice of
Borrowing or a Swing Loan Request, each acceptance by the Borrower of the
proceeds of a Loan, each submission by the Borrower to an Issuer of a Letter of
Credit Request and the issuance of each Letter of Credit (each such event being
a "Credit Event"), shall be deemed to constitute a representation and warranty
by the Borrower on the date of the making of such Loan or the issuance of such
Letter of Credit as to the matters specified in Section 3.2(b) (Representations
and Warranties; Borrowing Base Deficiency; Events of Default).
ARTICLE IV
Representations and Warranties
To induce the Lenders, the Issuers and the Administrative Agent
to enter into this Agreement, the Borrower represents and warrants to the
Lenders, the Issuers and the Administrative Agent that, on and as of the
Effective Date (after giving effect to the making of any Loan or other financial
accommodations on the Effective Date) and on and as of each date as required by
Section 3.2(b)(i):
Section 4.1 Corporate Existence; Compliance with Law. Each of
the Borrower and its Material Subsidiaries, (a) is duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation, (b) is duly qualified as a foreign corporation and in good
standing under the laws of each jurisdiction where such qualification is
necessary, except where the failure to be so qualified or in good standing
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would not in the aggregate have a Material Adverse Effect, (c) has all requisite
power and authority and the legal right to own, pledge, mortgage and operate its
properties, to lease the property it operates under lease and to conduct its
business as now or currently proposed to be conducted, (d) is in compliance with
its Constituent Documents, (e) is in compliance with all other applicable
Requirements of Law except where the failure to be in compliance would not in
the aggregate have a Material Adverse Effect and (f) has obtained all Permits
from or by, has made all necessary filings with and has given all necessary
notices to, each Governmental Authority having jurisdiction, to the extent
required for such ownership, operation and conduct, except for Permits which can
be obtained or made by the taking of ministerial action to secure the grant or
transfer thereof or the failure to obtain or make would not in the aggregate
have a Material Adverse Effect.
Section 4.2 Corporate Power; Authorization; Enforceable
Obligations.
(a) Noncontravention. The execution, delivery and performance by each
Loan Party of the Loan Documents to which it is a party and the consummation of
the transactions contemplated thereby:
(i) are within such Loan Party's corporate or other powers;
(ii) have been duly authorized by all necessary corporate
action, including the consent of stockholders where required;
(iii) do not and will not (A) violate any applicable Requirement
of Law applicable to any Loan Party (including under its Constituent
Documents or Regulations T, U and X of the Federal Reserve Board, as the
same are from time to time in effect, and all official rulings and
interpretations thereunder) or any Order of any Governmental Authority
applicable to any Loan Party, (B) conflict with or result in the breach of,
constitute a default under, or result in or permit the termination or
acceleration of, any Contractual Obligation of any Loan Party or any of its
Material Subsidiaries or (C) result in the creation or imposition of any
Lien or Encumbrance upon any of the property of any Loan Party or any of
its Material Subsidiaries, other than those in favor of the Secured Parties
pursuant to the Collateral Documents; and
(iv) do not require obtaining any Permit from or filing or
registration with, any Governmental Authority or any other Person, other
than those listed on Schedule 4.2 (Permits) and which have been obtained or
made, copies of which have been or will be delivered to the Administrative
Agent pursuant to Section 3.1(q) (Consents, Etc.) and each of which on the
Effective Date will be in full force and effect and, with respect to the
Collateral, filings required to perfect the Liens created by the Collateral
Documents.
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(b) Due Execution. This Agreement has been, and each of the other
Loan Documents will have been upon delivery thereof pursuant to Section 3.1
(Conditions Precedent to the Effectiveness of this Agreement), duly executed and
delivered by each Loan Party that is a party thereto. This Agreement is, and the
other Loan Documents will be, when delivered hereunder, the legal, valid and
binding obligation of each Loan Party that is a party thereto, enforceable
against such Loan Party in accordance with its terms.
Section 4.3 Financial Statements.
(a) Accuracy of Financial Statements. The consolidated balance sheet
of the Borrower and its Subsidiaries as at December 31, 1998 (the "Balance Sheet
Date"), and the related consolidated statements of income, retained earnings and
cash flows of the Borrower and its Subsidiaries for the Year then ended,
certified by Ernst & Young, LLP, and the consolidated balance sheets of the
Borrower and its Subsidiaries as at September 30, 1999, and the related
consolidated statements of income, retained earnings and cash flows of the
Borrower and its Subsidiaries for the nine (9) months then ended, certified by a
Responsible Officer of the Borrower, copies of which have been furnished to each
Lender, fairly present, subject, in the case of said balance sheets as at
September 30, 1999, and said statements of income, retained earnings and cash
flows for the nine (9) months then ended, to the absence of footnote disclosure
and normal recurring year-end audit adjustments, the consolidated financial
condition of the Borrower and its Subsidiaries as at such dates and the
consolidated results of the operations of the Borrower and its Subsidiaries for
the period ended on such dates, all in conformity with GAAP.
(b) No Material Adverse Change. Since the Balance Sheet Date, there
has been no Material Adverse Change and there have been no events or
developments that in the aggregate have had a Material Adverse Effect.
(c) No Additional Liability. Neither the Borrower nor any of its
Material Subsidiaries has any material obligation, contingent liability or
liability for taxes, long-term leases or unusual forward or long-term commitment
which is not reflected in the Financial Statements referred to in Section 4.3(a)
(Accuracy of Financial Statements) or in the notes thereto or otherwise
permitted by this Agreement.
(d) Projections. The Projections have been prepared by the Borrower
in light of the past operations of its business and reflect projections for the
period beginning on January 1, 1999 and ending on the last day of the Year in
which the Scheduled Termination Date occurs, on a month by month basis for the
year 2000 and otherwise on a year by year basis. The Projections are based upon
estimates and assumptions stated therein, all of which the Borrower believes to
be reasonable and fair in light of current conditions and current facts known to
the Borrower and, as of the Effective Date, reflect the Borrower's good faith
and reasonable estimates of the future financial performance of
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the Borrower and its Subsidiaries and of the other information projected therein
for the period set forth therein.
Section 4.4 Legal Proceedings. There are no pending, or, to the
knowledge of the Borrower, threatened, Legal Proceedings that may affect the
Borrower or any of its Material Subsidiaries or their respective properties
before any Governmental Authority other than those that, if determined adversely
to any Loan Party, would not have a Material Adverse Effect. The performance of
any action by any Loan Party required or contemplated by any of the Loan
Documents is not restrained or enjoined (either temporarily, preliminarily or
permanently).
Section 4.5 Taxes.
(a) Timely Filing of Tax Returns and Payment of Taxes. All material
federal, state, local and foreign tax returns, reports and statements
(collectively, the "Tax Returns") required to be filed by the Borrower or any of
its Tax Affiliates have been filed with the appropriate governmental agencies in
all jurisdictions in which such Tax Returns are required to be filed, all such
Tax Returns are true and correct in all material respects, and all taxes,
charges and other impositions reflected therein or otherwise due and payable
have been paid prior to the date on which any fine, penalty, interest, late
charge or loss may be added thereto for non-payment thereof, except where
contested in good faith and by appropriate proceedings if adequate reserves
therefor have been established on the books of the Borrower or such Tax
Affiliate in conformity with GAAP. Proper and accurate amounts have been
withheld by the Borrower and each of its Tax Affiliates from their respective
employees for all periods in full and complete compliance with the tax, social
security and unemployment withholding provisions of applicable Requirements of
Law and such withholdings have been timely paid to the respective Governmental
Authorities.
(b) Tax-Sharing Agreements. None of the Borrower or any of its Tax
Affiliates has (i) executed or filed with the IRS or any other Governmental
Authority any agreement or other document extending, or having the effect of
extending, the period for assessment or collection of any charges, (ii) agreed
or been requested to make any adjustment under Section 481(a) of the Code by
reason of a change in accounting method or otherwise or (iii) any obligation
under any written tax sharing agreement or other Contractual Obligation for the
allocation of the payment of taxes other than those delivered to the
Administrative Agent prior to the date hereof.
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Section 4.6 Full Disclosure. The information prepared or furnished
by or on behalf of the Borrower in connection with this Agreement or the
consummation of the financing hereunder taken as a whole does not contain any
untrue statement of a material fact nor omits to state a material fact necessary
to make the statements contained therein or herein not misleading. All facts
known to the Borrower which are material to an understanding of the financial
condition, business, properties or prospects of the Borrower and its Material
Subsidiaries taken as one enterprise have been disclosed to the Lenders.
Section 4.7 Margin Regulations. The Borrower is not engaged in the
business of extending credit for the purpose of purchasing or carrying margin
stock (within the meaning of Regulation U issued by the Federal Reserve Board,
as the same is from time to time in effect, and all official rulings and
interpretations thereunder), and no proceeds of any Borrowing will be used to
purchase or carry any margin stock or to extend credit to others for the purpose
of purchasing or carrying any margin stock in contravention of Regulation T, U
or X of the Federal Reserve Board, as the same are from time to time in effect,
and all official rulings and interpretations thereunder.
Section 4.8 Ownership of the Material Subsidiaries. Set forth on
Schedule 4.8 (Material Subsidiaries) is a true, complete and accurate list
showing, as of the date hereof, all Material Subsidiaries of the Borrower and,
as to each such Material Subsidiary, the jurisdiction of its incorporation, the
number of shares of each class of Stock authorized, the number outstanding on
the date hereof and the percentage of the outstanding shares of each such class
owned (directly or indirectly) by the Borrower and any other Stock and Stock
Equivalents of such Material Subsidiary. All of the outstanding Stock of each
Material Subsidiary of the Borrower has been validly issued, is fully paid and
non-assessable and is owned by the Borrower or a Material Subsidiary of the
Borrower free and clear of all Liens and Encumbrances (other than the Lien in
favor of the Secured Parties created pursuant to the Security Agreement and the
Pledge Agreement). Neither the Borrower nor any such Material Subsidiary is a
party to, or has knowledge of, any Contractual Obligation restricting the
transfer or hypothecation of any Stock or Stock Equivalent of any such Material
Subsidiary, other than the Loan Documents. The Borrower does not own or hold,
directly or indirectly, any Securities of any Person other than such
Subsidiaries and Investments permitted by Section 8.8 (Investments in Other
Persons). There are no Material Subsidiaries other than the Guarantor and NSFC.
Section 4.9 ERISA.
(a) List of Employee Benefit Plans. Schedule 4.9 (Employee Benefit
Plans) separately identifies, as of the date hereof, all Title IV Plans, all
Multiemployer Plans and all of the employee benefit plans within the meaning of
Section 3(3) of ERISA
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to which the Borrower or any of its Material Subsidiaries has any obligation or
liability, contingent or otherwise.
(b) Tax Qualification. Each employee benefit plan of the Borrower or
any of its Material Subsidiaries which is intended to qualify under Section 401
of the Code does so qualify, and any trust created thereunder is exempt from tax
under the provisions of Section 501 of the Code, except where all such failures
have no Material Adverse Effect.
(c) Compliance with Requirements of Law. Each Title IV Plan is in
compliance in all material respects with applicable provisions of ERISA, the
Code and other Requirements of Law except for non-compliance that in the
aggregate would not have no Material Adverse Effect.
(d) No Material Adverse Effect. There has been no, nor is there
reasonably expected to occur, any ERISA Event which will have a Material Adverse
Effect.
(e) No Withdrawal Liability. Except to the extent set forth on
Schedule 4.9, none of the Borrower, any of the Borrower's Subsidiaries or any
ERISA Affiliate would have any Withdrawal Liability as a result of a complete
withdrawal as of the date hereof from any Multiemployer Plan.
Section 4.10 Liens and Encumbrances. There are no Liens or
Encumbrances of any nature whatsoever on any properties of any Loan Party or any
of its Material Subsidiaries other than those permitted by Section 8.1 (Liens,
Etc.). The Liens granted by the Loan Parties to the Administrative Agent
pursuant to the Collateral Documents are fully perfected first priority Liens in
and to the Collateral, subject only to timely filing with Governmental
Authorities of the appropriate UCC-1 and UCC-3 financing statements.
Section 4.11 Related Documents. Except as set forth on Schedule 4.11
(Amendments to Related Documents), none of the Related Documents has been
amended or modified in any respect and no provision therein has been waived.
Each of the representations and warranties in each of the Related Documents are
true and correct in all material respects, and no default or material breach (or
event which with the giving of notice or lapse of time or both would be a
default or a material breach) has occurred thereunder.
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Section 4.12 No Burdensome Restrictions; No Defaults.
(a) Material Contracts. Neither the Borrower nor any of its Material
Subsidiaries (i) is a party to any Contractual Obligation the compliance with
which would have a Material Adverse Effect or the performance of which, either
unconditionally or upon the happening of an event, will result in the creation
of a Lien or other Encumbrance (other than a Lien or Encumbrance granted
pursuant to a Loan Document or otherwise permitted hereby) on the property or
assets of the Borrower or any of its Material Subsidiaries or (ii) is subject to
any restriction under its Constituent Documents which would have a Material
Adverse Effect.
(b) No Default. Neither the Borrower nor any of its Material
Subsidiaries is in default under or with respect to any Contractual Obligation
owed by it and, to the knowledge of the Borrower, no other party is in default
under or with respect to any Contractual Obligation owed to any Loan Party or to
any Material Subsidiary of a Loan Party, other than, in either case, those
defaults which in the aggregate would have no Material Adverse Effect.
(c) Requirements of Law. To the best knowledge of the Borrower, there
is no Requirement of Law applicable to any Loan Party the compliance with which
by such Loan Party would have a Material Adverse Effect.
(d) Restrictions on Stock. No Material Subsidiary of the Borrower is
subject to any Contractual Obligation restricting or limiting its ability to
declare or make any dividend payment or other distribution on account of any
shares of any class of its Stock or its ability to purchase, redeem, or
otherwise acquire for value or make any payment in respect of, any such shares
or any shareholder rights, except pursuant to a Loan Document.
Section 4.13 No Other Ventures. Except as set forth on Schedule 4.13
(Joint Ventures and Partnerships), none of the Borrower or any of its Material
Subsidiaries is engaged in any joint venture or partnership with any other
Person.
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Section 4.14 Investment Company Act. Neither the Borrower nor any of
its Material Subsidiaries is an "investment company", or an "affiliated person"
of, or "promoter" or "principal underwriter" for, an "investment company," as
such terms are defined in the Investment Company Act of 1940, as amended. None
of the making of the Loans and the issuance of the Letters of Credit by the
Lenders and the Issuers, the application of the proceeds and repayment thereof
by the Borrower and the consummation of the transactions contemplated by the
Loan Documents will result in a violation by the Borrower or any of its Material
Subsidiaries of any provision of such act or any Requirement of Law created by
the Securities and Exchange Commission thereunder.
Section 4.15 Public Utility Holding Company Act. Neither the
Borrower nor any of its Material Subsidiaries is a "holding company," or an
"affiliate" or a "holding company" or a "subsidiary company" of a "holding
company," as each such term is defined and used in the Public Utility Holding
Act of 1935, as amended.
Section 4.16 Insurance. All policies of insurance of any kind or
nature of the Borrower or any of its Material Subsidiaries are in full force and
effect and are of a nature and provide such coverage (a) as is sufficient and as
is customarily carried by companies of the size and character of the Borrower or
such Material Subsidiary and (b) as is required under any of the Related
Documents or Loan Documents.
Section 4.17 Labor Matters.
(a) No Strikes. There are no strikes, work stoppages, slowdowns or
lockouts pending, threatened against or involving, the Borrower or any of its
Material Subsidiaries, other than those that in the aggregate would not have a
Material Adverse Effect.
(b) No Claims or Complaints. There are no unfair labor practices,
grievances or complaints pending, or, to the best of the Borrower knowledge
after due inquiry, threatened, against or involving the Borrower or any of its
Material Subsidiaries, nor are there any arbitration or grievances threatened
that are reasonably likely to involve the Borrower or any of its Material
Subsidiaries, other than those which, in the aggregate, if resolved adversely to
the Borrower or such Material Subsidiary, would have no Material Adverse Effect.
Section 4.18 Use of Proceeds. The proceeds of the Loans and the
Letters of Credit are being used by the Borrower solely as follows: (a) to
refinance existing Indebtedness of the Borrower and its Material Subsidiaries
and for the payment of related transaction costs, fees and expenses and (b) for
general working capital and corporate purposes.
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Section 4.19 Environmental Matters.
(a) Environmental Laws. The operations of the Borrower and each of
its Material Subsidiaries and their respective tenants have been and are in
compliance with all Environmental Laws, other than such non-compliances that in
the aggregate have no Material Adverse Effect or have been disclosed in the
Financial Statements delivered pursuant to Section 4.3(a) (Accuracy of Financial
Statements).
(b) Permits. The Borrower and its Material Subsidiaries have obtained
and currently possess all Permits necessary for their operations, all such
Permits are in good standing and the Borrower and each of its Material
Subsidiaries is in compliance with the terms and conditions of such Permits,
except for failures to comply that in the aggregate have no Material Adverse
Effect.
(c) No Threatened Legal Proceeding. None of the Borrower or any of
its Material Subsidiaries currently (or, to the best of the knowledge of the
Borrower after due inquiry, previously) owned or leased property or engaged
operations subject to any threatened or outstanding Order, Contractual
Obligation, notice of violation or potential liability or is subject to any
pending, or, to the Borrower's knowledge, threatened, Legal Proceeding with
respect to (i) any Environmental Law, (ii) a Remedial Action or (iii)
Environmental Liabilities and Costs arising from a Release or threatened
Release, other than those that in the aggregate have no Material Adverse Effect.
(d) Disposal Facilities. Except as set forth on Schedule 4.19(d)
(Disposal Facilities), none of the Borrower or any of its Material Subsidiaries
is a treatment, storage or disposal facility requiring a Permit under the
Resource Conservation and Recovery Act, 42 U.S.C.(S) 6901 et seq., as amended,
the regulations thereunder or similar Requirement of Law.
(e) No Undisclosed Information. There are no facts, circumstances or
conditions arising out of or relating to the operations or ownership of real
property owned or operated by the Borrower or any of its Material Subsidiaries
that are not specifically included in the information furnished to the Lenders
other than those that in the aggregate have no Material Adverse Affect.
(f) No Environmental Lien. As of the date hereof, no Environmental
Lien has attached to any property of the Borrower or any of its Material
Subsidiaries.
Section 4.20 Ownership of Properties.
(a) Title. The Borrower and its Material Subsidiaries own good,
indefeasible and marketable title to, or valid leasehold interests in, all real
properties and
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good and indefeasible title to all personal properties and assets purported to
be owned by the Borrower or any of its Material Subsidiaries, including those
reflected on the most recent Financial Statements delivered by the Borrower, and
none of such properties and assets is subject to any Lien or other Encumbrance,
except Liens granted to the Administrative Agent pursuant to the Loan Documents
or otherwise permitted hereunder. The Borrower and its Material Subsidiaries
have received all deeds, assignments, waivers, consents, non-disturbance and
recognition or similar agreements, bills of sale and other documents and have
duly effected all recordings, filings and other actions necessary to establish,
protect and perfect the Borrower's and its Material Subsidiaries' right, title
and interest in and to all such property.
(b) Permits. All Permits required to have been issued or appropriate
to enable all real property owned or leased by the Borrower or any of its
Material Subsidiaries to be lawfully occupied and used for all of the purposes
for which they are currently occupied and used have been lawfully issued and are
in full force and effect, other than those which in the aggregate would have no
Material Adverse Effect.
(c) No Condemnation Proceeding. None of the Borrower nor any of its
Material Subsidiaries has received any notice, or has any knowledge, of any
pending, threatened or contemplated condemnation or other Legal Proceeding
affecting any real property owned or leased by the Borrower or any of its
Material Subsidiaries or any part thereof, except those which, in the aggregate,
would have no Material Adverse Effect.
(d) No Damage. No portion of any real property owned or leased by the
Borrower or any of its Material Subsidiaries has suffered any material damage by
fire or other casualty loss which has not heretofore been completely repaired
and restored to its original condition.
Section 4.21 Existing Indebtedness. Schedule 4.21 (Existing
Indebtedness) separately identifies all Indebtedness as of the date hereof of
the Borrower and its Subsidiaries which is to remain outstanding after the
Effective Date and is (i) for borrowed money or (ii) incurred outside of the
ordinary course of the business and in a manner and to the extent consistent
with past practice or (iii) material to the financial condition, business,
operations or prospects of the Borrower and its Subsidiaries, taken as a whole
(or will be material to the financial condition, business, operations or
prospects of the Borrower and its Subsidiaries, taken as a whole). For purpose
of subsection (iii) of this Section 4.21, Indebtedness equal to or in excess of
ten million Dollars ($10,000,000) is deemed material.
Section 4.22 Solvency. Both before and after giving effect to (a)
the Loans and Letter of Credit Obligations to be made or extended on the
Effective Date or such other date as Loans and Letter of Credit Obligations
requested hereunder are made or extended, (b) the disbursement of the proceeds
of such Loans pursuant to the
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instructions of the Borrower, (c) the Refinancing and the consummation of the
other financing transactions contemplated hereby and (d) the payment and accrual
of all transaction costs in connection with the foregoing, each Loan Party is
Solvent.
Section 4.23 Year 2000 Compliance. The Borrower has reviewed the
areas within its business and operations and the business and operations of its
Material Subsidiaries which could be adversely affected by the risk that
computer applications used by the Borrower and its Material Subsidiaries may not
be Year 2000 Compliant and has developed a comprehensive program to eliminate
all such non-compliance on or before the Effective Date.
ARTICLE V
Financial Covenants
As long as any of the Obligations or the Commitments remain
outstanding, unless the Super Majority Lenders otherwise consent in writing, the
Borrower agrees with the Lenders and the Administrative Agent that:
Section 5.1 Leverage Ratio. The Borrower will maintain at the end
of each Quarter set forth below a Leverage Ratio not in excess of the ratio set
forth below for such Quarter:
For the Maximum
Quarter Ending on Ratio
------------------------- -------------
December 31, 1999 4.50 to 1
March 31, 2000 4.50 to 1
June 30, 2000 4.50 to 1
September 30, 2000 4.50 to 1
December 31, 2000 4.25 to 1
March 31, 2001 4.25 to 1
June 30, 2001 4.25 to 1
September 30, 2001 4.25 to 1
December 31, 2001 4.00 to 1
March 31, 2002 4.00 to 1
June 30, 2002 4.00 to 1
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September 30, 2002 4.00 to 1
December 31, 2002 4.00 to 1
March 31, 2003 4.00 to 1
June 30, 2003 4.00 to 1
September 30, 2003 4.00 to 1
December 31, 2003 4.00 to 1
March 31, 2004 4.00 to 1
June 30, 2004 4.00 to 1
September 30, 2004 4.00 to 1
Section 5.2 Minimum Interest Coverage Ratio. The Borrower will
maintain at the end of each Quarter during the Years set forth below a minimum
Interest Coverage Ratio, in each case determined on the basis of the four
Quarters ending on the date of determination, not less than the ratio set forth
below for such Quarter:
Maximum Interest
For the Quarter Ending on Coverage Ratio
------------------------- -----------------------
December 31, 1999 2.00 to 1
March 31, 2000 2.00 to 1
June 30, 2000 2.00 to 1
September 30, 2000 2.00 to 1
December 31, 2000 2.25 to 1
March 31, 2001 2.25 to 1
June 30, 2001 2.25 to 1
September 30, 2001 2.25 to 1
December 31, 2001 2.35 to 1
March 31, 2002 2.35 to 1
June 30, 2002 2.35 to 1
September 30, 2002 2.35 to 1
December 31, 2002 2.45 to 1
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March 31, 2003 2.45 to 1
June 30, 2003 2.45 to 1
September 30, 2003 2.55 to 1
December 31, 2003 2.55 to 1
March 31, 2004 2.55 to 1
June 30, 2004 2.55 to 1
September 30, 2004 2.55 to 1
Section 5.3 Capital Expenditures. The Borrower will not permit any
Capital Expenditures to be made during each of the Years set forth below, to be
in excess of the maximum amount set forth below:
Maximum Amount of
Year Beginning on Capital Expenditures
------------------------- -----------------------
January 1, 1999 $ 350,000,000
January 1, 2000 $ 285,000,000
January 1, 2001 $ 275,000,000
January 1, 2002 $ 115,000,000
January 1, 2003 $ 135,000,000
January 1, 2004 $ 125,000,000
;provided, however, that,
(a) Capital Expenditures attributable to the purchase by the Borrower
or the Guarantor of property being, at the time of such purchase, leased to the
Borrower or the Guarantor under an operating lease shall be excluded from all of
the foregoing limitations if the consideration for such purchase is not more
than the Fair Market Value of such property and the aggregate consideration for
all such purchases does not exceed one hundred million Dollars ($100,000,000);
(b) to the extent that actual Capital Expenditures for any Year shall
be less than the maximum amount set forth in the chart above for such Year, the
difference between such stated maximum amount and such actual Capital
Expenditures up to seventy-five percent (75%) such stated maximum amount shall
increase the maximum permissible Capital Expenditures that would have otherwise
been authorized hereunder in
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the next succeeding Year (and in such succeeding Year, the Capital Expenditures
actually made shall be applied first to reduce the carryover permitted by this
proviso); and
(c) commencing in the Year 2002, the amount of maximum permissible
Capital Expenditures in any Year as set forth in the chart above shall be
increased by an amount equal to the difference between (i) two-thirds (2/3/rd/)
of the excess, if any, of (A) the sum of the EBITDA of the Borrower in all
previous Years commencing in the Year 2000 (as calculated from the audited
Financial Statements for such previous Years) over (B) the sum of the EBITDA of
the Borrower reflected in the Projections delivered to the Lenders on September
30, 1999 (without considering any updates thereto) for all such previous Years
and (ii) the aggregate of all Capital Expenditures made pursuant to this
proviso.
ARTICLE VI
Reporting Covenants
As long as any of the Obligations or the Commitments remain
outstanding, unless the Requisite Lenders otherwise consent in writing, the
Borrower agrees with the Lenders and the Administrative Agent that:
Section 6.1 Financial Statements. The Borrower shall furnish to the
Administrative Agent (with sufficient copies for eac h of the Lenders) the
following Financial Statements:
(a) Quarterly Financial Statements and Compliance Certificates. As
soon as available and in any event within fifty (50) days after the end of each
Quarter of each Year, consolidated and consolidating balance sheets of the
Borrower and its Subsidiaries as of the end of such quarter and consolidated and
consolidating statements of income, retained earnings and cash flow of the
Borrower and its Subsidiaries for the period commencing at the end of the
previous Year and ending with the end of such Quarter, all prepared in
conformity with GAAP and certified by the Responsible Officer of the Borrower
and accompanied by a statement in reasonable detail (each, a "Compliance
Certificate") showing the calculations used in determining compliance with each
of the financial covenants set forth in Article V (Financial Covenants) which is
tested on a quarterly basis together with (i) a statement by such Responsible
Officer that such financial information presents fairly in accordance with GAAP
(subject to the absence of footnote disclosure and normal recurring year-end
adjustments) the financial position, results of operations and statements of
cash flow of the Borrower and its Subsidiaries, on both a consolidated and
consolidating basis, as at the end of such Quarter and for the period then
ended, (ii) a certificate of such Responsible Officer stating that no Default or
Event of Default has occurred and is continuing or, if a Default or an Event of
Default has occurred and is continuing, a statement as to the nature thereof and
the action which
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the Borrower proposes to take with respect thereto and (iii) a written
discussion and analysis by the management of the Borrower of the financial
statements furnished in respect of such Quarter;
(b) Annual Audited Financial Statements. As soon as available and in
any event within ninety-five (95) days after the end of each Year, consolidated
and consolidating balance sheets of the Borrower and its Subsidiaries as of the
end of such year and consolidated and consolidating statements of income,
retained earnings and cash flows of the Borrower and its Subsidiaries for such
Year, all prepared in conformity with GAAP and certified, in the case of such
consolidated financial statements, without qualification as to the scope of the
audit or as to the Borrower being a going concern by Ernst & Young, LLP or other
independent public accountants of recognized international standing and
acceptable to the Administrative Agent, together with (i) a certificate of such
accounting firm stating that in the course of the regular audit of the business
of the Borrower and its Subsidiaries, which audit was conducted by such
accounting firm in accordance with generally accepted auditing standards, such
accounting firm has obtained no knowledge that a Default or Event of Default has
occurred and is continuing or, if in the opinion of such accounting firm a
Default or Event of Default has occurred and is continuing, a statement as to
the nature thereof, (ii) a schedule in form satisfactory to the Administrative
Agent of the computations used by such accountants in determining, as of the end
of such Year, the Borrower's compliance with all financial covenants set forth
in Article V (Financial Covenants) and (iii) a written discussion and analysis
by the management of the Borrower of the financial statements furnished in
respect of such Year;
(c) Annual Operating Plans. Not later than thirty (30) days after the
end of each Year beginning with the Year ending December 31, 2000, an update to
the Projections prepared in accordance with Section 4.3(d) (Projections) and an
annual operating plan of the Borrower and its Subsidiaries for the following
Year, approved by the Board of Directors of the Borrower, which will include,
without limitation, a statement of all of the material assumptions on which such
plan is based, monthly balance sheets and a monthly budget for the following
year and which will integrate sales, gross profits, operating expenses,
operating profit and cash flow projections all prepared on the same basis and in
similar detail as that on which operating results are reported (and in the case
of cash flow projections, representing management's good faith estimates of
future financial performance based on historical performance);
(d) Borrowing Base Certificate. As soon as available and in any event
not later than twenty (20) days after the end of each calendar month (or more
frequently as the Administrative Agent in its sole discretion may require,
acting in a commercially reasonable manner) a Borrowing Base Certificate as of
the end of such calendar month executed by a Responsible Officer of the
Borrower;
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(e) Outside Processing Notice. As soon as available, and in any event
not later than January 20 and July 20 of each Year (commencing on July 20,
2000), a notice (the "Outside Processing Notice") sent to the Administrative
Agent setting forth the average over the six (6) full calendar months preceding
such notice of the aggregate Book Value of Inventory of the Borrower that, on
any given day during such six (6)-month period, has been located, stored, used
or held at the premises of one or more third parties for more than one hundred
and twenty (120) days (but excluding any Inventory that the Administrative Agent
has determined is located, stored, used or held at locations covered by the
appropriate filings under the Uniform Commercial Code and so advised the
Borrower);
(f) Availability under the Receivables Purchase Agreement. With each
delivery of a Borrowing Base Certificate, the Borrower shall certify to the
Administrative Agent (i) what the Receivables Availability is as of such date
and (ii) what was the average such Receivables Availability during the preceding
calendar month;
(g) Changes in Bank Accounts. Prior written notice of any closing or
other change in the existing bank accounts of the Borrower or the Guarantor (or
the establishment of any new bank account by the Borrower or the Guarantor) or
any agreement relating thereto; and
(h) Additional Information. Promptly, from time to time, such other
information regarding the operations, including information regarding specific
product categories and lines of business of the Borrower and its Subsidiaries,
the business affairs and financial condition (including financial controls and
accounting practices) of the Borrower or any of its Subsidiaries or compliance
by any of the Loan Parties with the terms of any Loan Document, as the
Administrative Agent or any Lender may reasonably request.
Section 6.2 Default Notices. (a) Promptly, and in any event within
five (5) Business Days after any Responsible Officer of the Borrower becomes
aware of any occurrence which it knows to constitute any Default or Event of
Default, the Borrower shall deliver to the Administrative Agent a certificate of
a Responsible Officer setting forth the details of such occurrence and the
action which the Borrower is taking or proposes to take with respect thereto.
(b) Promptly, and in any event within five (5) Business Days after
any Responsible Officer of the Borrower becomes aware of any occurrence which it
knows to constitute a Cash Dominion Event, the Borrower shall deliver to the
Administrative Agent a certificate of a Responsible Officer to such effect
setting forth the Receivables Availability and the explanation, if any and if
applicable, for the decrease in liquidity.
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Section 6.3 Asset Sales. In conjunction with any Sale anticipated
to generate in excess of twenty-five million Dollars ($25,000,000) (or its
Dollar Equivalent) in Net Cash Proceeds, the Borrower shall send the
Administrative Agent a notice (a) describing such Sale or the nature and
material terms and conditions of such transaction and (b) stating the estimated
Net Cash Proceeds anticipated to be received by the Borrower or any of its
Subsidiaries.
Section 6.4 ERISA Matters. The Borrower shall furnish the
Administrative Agent (with sufficient copies for each of the Lenders):
(a) ERISA Event. Promptly and in any event within thirty (30) days
after the Borrower, any of its Subsidiaries or any ERISA Affiliate knows or has
reason to know that any ERISA Event has occurred, a written statement of a
Responsible Officer of the Borrower describing such ERISA Event and the action,
if any, that the Borrower, its Subsidiaries or its ERISA Affiliates propose to
take with respect thereto and a copy of any notice filed with any Governmental
Authority pertaining thereto;
(b) Request for Minimum Funding Waiver. Promptly and in any event
within ten (10) days after the Borrower, any of its Subsidiaries or any ERISA
Affiliate knows or has reason to know that a request for a minimum funding
waiver under Section 412 of the Code has been filed with respect to any Title IV
Plan or Multiemployer Plan, a written statement of a Responsible Officer of the
Borrower describing such waiver request and the action, if any, which the
Borrower, its Subsidiaries and ERISA Affiliates propose to take with respect
thereto and a copy of any notice filed with any Governmental Authority
pertaining thereto;
(c) Notice of Intent to Terminate. Simultaneously with the date that
the Borrower, any of its Subsidiaries or any ERISA Affiliate files a notice of
intent to terminate any Title IV Plan, if such termination would require
material additional contributions in order to be considered a standard
termination within the meaning of Section 4041(b) of ERISA, a copy of each
notice.
Section 6.5 Litigation. Promptly after the commencement thereof,
the Borrower shall give the Administrative Agent written notice of the
commencement of any Legal Proceeding that, if adversely determined, would have a
Material Adverse Effect. Not later than fifty (50) days after the end of each
Quarter, the Borrower shall deliver to the Administrative Agent a written report
describing any Legal Proceeding that may affect the Borrower or any of its
Subsidiaries and that, in the reasonable judgment of the Borrower, exposes the
Borrower or such Subsidiary to liability in an amount aggregating two million
Dollars ($2,000,000) or more.
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Section 6.6 Notices under Related Documents. Promptly after the
sending or filing thereof, the Borrower shall send the Administrative Agent
copies of all material notices, certificates or reports delivered pursuant to or
in connection with any Related Document.
Section 6.7 SEC Filings; Press Releases. Promptly after the sending
or filing thereof, the Borrower shall send the Administrative Agent copies of
(a) all reports which the Borrower sends to its security holders generally or to
the holders of Securities issued under the Indenture, (b) all reports and
registration statements which the Borrower or any of its Subsidiaries files with
the Securities and Exchange Commission or any national securities exchange or
the National Association of Securities Dealers, Inc., (c) all press releases and
(d) all other statements concerning material changes or developments in the
business of such Loan Party made available by any Loan Party to the public.
Section 6.8 Labor Relations. Promptly after becoming aware of the
same, the Borrower shall give the Administrative Agent written notice of (a) any
material labor dispute to which the Borrower of any of its Material Subsidiaries
is or may become a party, including any strikes, lockouts or other disputes
relating to such Person's plants and other facilities and (b) any Worker
Adjustment and Retraining Notification Act or related liability incurred with
respect to the closing of any plant or other facility of any of such Person.
Section 6.9 Insurance. As soon as is practicable and in any event
within thirty (30) days prior to the expiration or termination of any insurance
coverage for which the Borrower is required to name the Administrative Agent as
additional insured or lender loss payee hereunder or under any other Loan
Document, the Borrower will furnish the Administrative Agent (in sufficient
copies for each of the Lenders) a confirmation executed by the insurance company
or the Borrower's insurance broker and in form and substance satisfactory to the
Administrative Agent that such coverage has been continued.
Section 6.10 Environmental Matters. The Borrower shall provide the
Administrative Agent promptly and in any event within ten (10) days of the
Borrower or any of its Material Subsidiaries learning of any of the following,
written notice of any of the following:
(a) Environmental Lien. The receipt by any Loan Party of notification
that any real or personal property of such Loan Party is subject to any
Environmental Lien that has a Material Adverse Effect;
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(b) Notice of Violation of an Environmental Law. The receipt by any
Loan Party of any notice of violation of or potential liability under, or
knowledge by such Loan Party that there exists a condition which could
reasonably be expected to result in a violation of or liability under, any
Environmental Law, except for violations and liabilities the consequence of
which in the aggregate would have no reasonable likelihood of subjecting the
Loan Parties collectively to Environmental Liabilities and Costs that have a
Material Adverse Effect;
(c) Commencement of a Legal Proceeding. The commencement of any Legal
Proceeding alleging a violation of or liability under any Environmental Law,
other than those the consequences of which in the aggregate would have no
reasonable likelihood of subjecting the Loan Parties collectively to
Environmental Liabilities and Costs that have a Material Adverse Effect;
(d) Property Acquisition. Any proposed acquisition of Securities,
assets or real estate, any proposed leasing of property or any other action by
any Loan Party or any of its Material Subsidiaries other than those the
consequences of which in the aggregate have reasonable likelihood of subjecting
the Loan Parties collectively to Environmental Liabilities and Costs that have a
Material Adverse Effect; and
(e) Additional Permits; Additional Capital Improvements. Any proposed
action by any Loan Party or any of its Material Subsidiaries which in the
aggregate have a reasonable likelihood of requiring the Loan Parties to obtain
additional environmental, health or safety Permits or make additional capital
improvements to obtain compliance with Environmental Laws that in the aggregate
subject the Loan Parties to additional Environmental Liabilities and Costs that
have a Material Adverse Effect; and
(f) Status Report. Upon written request by any Lender through the
Administrative Agent, a report providing an update of the status of any
environmental, health or safety compliance, hazard or liability issue identified
in any notice or report delivered pursuant to this Agreement.
Section 6.11 Other Information. The Borrower will provide the
Administrative Agent or any Lender with such other information respecting the
business, properties, condition (financial or otherwise) or operations of the
Borrower or any of its Subsidiaries as any Lender through the Administrative
Agent may from time to time reasonably request.
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ARTICLE VII
Affirmative Covenants
As long as the Obligations or the Commitments remain outstanding,
unless the Requisite Lenders otherwise consent in writing, the Borrower agrees
with the Lenders and the Administrative Agent that:
Section 7.1 Preservation of Corporate Existence, Etc. The Borrower
shall, and shall cause each of its Material Subsidiaries to, preserve and
maintain, its corporate existence, rights (charter and statutory) and
franchises, except as permitted by Section 8.6 (Restriction on Fundamental
Changes).
Section 7.2 Compliance with Law, Etc. The Borrower shall, and shall
cause each of its Material Subsidiaries to, comply in all material respects with
all applicable Requirements of Law, Contractual Obligations and Permits;
provided, however, that the Borrower shall not be deemed in default of this
Section 7.2 if such non-compliance in the aggregate would not have a Material
Adverse Effect.
Section 7.3 Conduct of Business. The Borrower shall, and shall
cause each of its Material Subsidiaries to conduct its business in the ordinary
course consistent with past practice and use its reasonable efforts, in the
ordinary course and consistent with past practice, to preserve its business and
the goodwill and business of the customers, advertisers, suppliers and others
having business relations with the Borrower or any of its Material Subsidiaries;
provided, however, that the Borrower shall not be deemed in default of this
Section 7.3 if all such failures to comply in the aggregate would have no
Material Adverse Effect.
Section 7.4 Payment of Taxes, Etc. The Borrower shall, and shall
cause each of its Material Subsidiaries to, pay and discharge before the same
shall become delinquent, all lawful claims, taxes, assessments, charges and
levies of a Governmental Authority, except where contested in good faith, by
proper proceedings and adequate reserves therefor have been established on the
books of the Borrower or the appropriate Subsidiary in conformity with GAAP.
Section 7.5 Maintenance of Insurance. The Borrower shall (i)
maintain, and cause to be maintained for each of its Material Subsidiaries,
insurance with responsible and reputable insurance companies or associations in
such amounts and covering such risks as is usually carried by companies engaged
in similar businesses and owning similar properties in the same general areas in
which the Borrower or such Material Subsidiary operates and, in any event, all
insurance required by any Collateral Documents.
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Section 7.6 Access. The Borrower shall from time to time, permit
the Administrative Agent, or any agents or representatives thereof, within five
(5) Business Days after written notification of the same (except that during the
continuance of an Event of Default, no such notice shall be required), on any
Business Day, to (a) examine and make copies of and abstracts from the records
and books of account of the Borrower and each of its Subsidiaries, (b) visit the
properties of the Borrower and each of its Subsidiaries, (c) discuss the
affairs, finances and accounts of the Borrower and each of its Subsidiaries with
any of their respective officers or directors and (d) communicate directly with
the Borrower's independent certified public accountants. The Borrower shall
authorize its independent certified public accountants to disclose to the
Administrative Agent or any Lender any and all financial statements and other
information of any kind, as the Administrative Agent or any Lender reasonably
requests from the Borrower and which such accountants may have with respect to
the business, financial condition, results of operations or other affairs of the
Borrower or any of its Subsidiaries.
Section 7.7 Keeping of Books. The Borrower shall, and shall cause
each of its Material Subsidiaries to, keep, proper books of record and account,
in which full and correct entries shall be made of all financial transactions
and the assets and business of the Borrower and each such Material Subsidiary.
Section 7.8 Maintenance of Properties, Etc. The Borrower shall, and
shall cause each of its Material Subsidiaries to, maintain and preserve and (if
necessary) acquire, (a) all of its properties which are necessary in the conduct
of its business in good working order and condition, (b) all rights, permits,
licenses, approvals and privileges (including all Permits) which are used or
useful or necessary in the conduct of its business and (c) all Intellectual
Property owned by the Borrower or its Material Subsidiaries or that is necessary
for the operations of their respective businesses; provided, however, that the
Borrower shall not be deemed in default of this Section 7.8 if all such failures
in the aggregate would have no Material Adverse Effect.
Section 7.9 Maintenance of Contractual Obligations, Etc. The
Borrower shall, and shall cause each of its Material Subsidiaries to, perform,
observe and comply with each of the covenants, conditions and agreements set
forth in the Related Documents and under each other Contractual Obligation under
which it or any of its Material Subsidiaries may be bound (including to pay all
rent and other charges payable under any lease and all Indebtedness and other
obligations as the same become due) and do all things necessary to preserve and
to keep unimpaired any rights the Borrower or any of its Material Subsidiaries
may have under any Contractual Obligation; provided, however, that the Borrower
shall not be deemed in default of this Section 7.9 if all such failures in the
aggregate would have no Material Adverse Effect.
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Section 7.10 Application of Proceeds. The Borrower shall use the
entire amount of the proceeds of the Loans as provided in Section 4.18 (Use of
Proceeds).
Section 7.11 Year. The Borrower shall, and shall cause each of its
Material Subsidiaries to, maintain as its Year the twelve month period ending on
the thirty-first (31/st/) of D ecember of each year.
Section 7.12 Environmental. The Borrower shall, and shall cause any
Material Subsidiary to, comply in all material respects with Environmental Laws
and, without limiting the foregoing, the Borrower shall, at its sole cost and
expense, upon receipt of any notification or otherwise obtaining knowledge of
any Release or other event that has any reasonable likelihood of the Borrower or
any of its Material Subsidiaries incurring Environmental Liabilities and Costs
that have a Material Adverse Effect, promptly advise the Administrative Agent
thereof and (i) if requested by the Administrative Agent, conduct or pay for
consultants to conduct, tests or assessments of environmental conditions at such
operations or properties, including the investigation and testing of subsurface
conditions and (ii) take such Remedial Action, undertake such investigation or
other action as required by Environmental Laws or other Requirements of Law or
as any Governmental Authority requires or as is appropriate and consistent with
good business practice to address the Release or event.
Section 7.13 Borrowing Base Determination.
(a) Appraisals and Investigations. The Borrower and the Guarantor
shall conduct, or shall cause to be conducted, at its expense, upon request of
the Administrative Agent, and present to the Administrative Agent for approval,
such appraisals, investigations and reviews as the Administrative Agent shall
request for the purpose of determining the Borrowing Base, all upon notice and
at such times during normal business hours and as often as may be reasonably
requested. The Borrower and the Guarantor shall furnish to the Administrative
Agent any information which the Administrative Agent may reasonably request
regarding the determination and calculation of the Borrowing Base, including
correct and complete copies of any invoices, underlying agreements, instruments
or other documents.
(b) Sharp Decreases in Borrowing Base or Other Liquidity. The
Borrower shall promptly notify the Administrative Agent in writing in the event
that at any time the Borrower or any of its Material Subsidiaries receives or
otherwise gains knowledge that (i) the Borrowing Base is less than ninety (90%)
of the Borrowing Base reflected in the most recent Borrowing Base Certificate
delivered pursuant to Section 6.1(d) (Borrowing Base Certificate), (ii) a
Borrowing Base Deficiency exists as a result of a decrease in the Borrowing
Base, and the amount of such deficiency or (iii) there has been a decrease of
more than fifteen percent (15%) in the Receivables Availability for the amount
last reported to the Administrative Agent by the Borrower.
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(c) Physical Verifications. The Administrative Agent may make
physical verifications of the Inventory in any manner and through any medium
that the Administrative Agent considers advisable, and the Borrower and the
Guarantor shall furnish, or shall cause to be furnished, all such assistance and
information as the Administrative Agent may require in connection therewith.
Section 7.14 Year 2000 Compliance. The Borrower shall, and shall
cause each of its Material Subsidiaries to, take all action reasonably necessary
to assure that the computer applications used by the Borrower and its Material
Subsidiaries remain Year 2000 Compliant.
Section 7.15 Accounting Changes; Year. The Borrower will disclose in
writing to the Administrative Agent promptly after such change, any change in
(a) the accounting treatment, reporting practices or tax reporting treatment of
the Borrower or any of its Material Subsidiaries and (b) the fiscal year of the
Borrower or any of its Material Subsidiaries.
ARTICLE VIII
Negative Covenants
As long as any of the Obligations or the Commitments remain
outstanding and unless the Requisite Lenders otherwise consent in writing, the
Borrower agrees with the Lenders and the Administrative Agent that:
Section 8.1 Liens, Etc. The Borrower will not, and will not permit
any of its Subsidiaries to, create or suffer to exist, any Lien or other
Encumbrance upon, or with respect to, any of its properties or assets, whether
now owned or hereafter acquired, or assign, or permit any of its Subsidiaries to
assign, any right to receive income, except for:
(a) Liens created pursuant to the Loan Documents;
(b) Liens securing Indebtedness permitted under Section 8.2(g);
(c) Purchase Money Liens. purchase money Liens or purchase money
security interests upon or in any property (other than the Collateral) acquired
or held by any Loan Party in the ordinary course of business to secure the
purchase price of such property or to secure Indebtedness incurred solely for
the purpose of financing the acquisition of such property; provided, however,
that (i) any such Lien is created solely for the purpose of securing
Indebtedness representing, or incurred to finance, refinance or refund, the cost
(including the cost of construction) of the property subject thereto, (ii) the
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principal amount of the Indebtedness secured by such Lien does not exceed one
hundred percent (100%) of such cost, (iii) such Lien does not extend to or cover
any other property other than such item of property and any improvements on such
item and (iv) the aggregate principal amount of the Indebtedness secured by the
Liens permitted by this Section 8.1(c) (Purchase Money Liens) at any time
outstanding shall not exceed fifty million Dollars ($50,000,000) in the
aggregate;
(d) Refinancing of Indebtedness. any Lien securing the renewal,
extension, refinancing or refunding of any Indebtedness or other Obligation
secured by any Lien permitted by Section 8.1(b) or Section 8.1(c) (Purchase
Money Liens) without any increase in the amount secured thereby or in the assets
subject to such Lien;
(e) Mechanics' Liens. Liens arising by operation of law in favor of
materialmen, mechanics, warehousemen, carriers, lessors or other similar Persons
incurred by any Loan Party in the ordinary course of business which secure its
obligations to such Person; provided, however, that (i) such Loan Party is not
in default with respect to such payment obligation to such Person or (ii) such
Loan Party is in good faith and by appropriate proceedings diligently contesting
such obligation and adequate provision is made for the payment thereof on the
books of such Loan Party in conformity with GAAP and all such Liens in the
aggregate would, if all such contests are adversely determined, have no Material
Adverse Effect;
(f) Tax Liens. Liens (excluding Environmental Liens) securing taxes,
assessments or governmental charges or levies; provided, however, that (i) no
Loan Party is in default in respect of any payment obligation with respect
thereto or (ii) such Loan Party is in good faith and by appropriate proceedings
diligently contesting such obligation and adequate provision is made for the
payment thereof on the books of such Loan Party in conformity with GAAP and all
such Liens in the aggregate would, if all such contests are adversely
determined, have no Material Adverse Effect;
(g) Employment Benefits Liens. Liens incurred, or pledges and
deposits made in the ordinary course of business, in connection with workers'
compensation, unemployment insurance, old-age pensions and other social security
benefits;
(h) Performance Liens. pledges or deposits of Cash or Cash
Equivalents securing the performance of bids, tenders, leases, contracts (other
than for the repayment of borrowed money), statutory obligations, surety and
performance bonds and other obligations of like nature, in each case incurred as
an incident to and in the ordinary course of business;
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(i) Judgment Liens. pledges or deposits of cash or Cash Equivalents
securing appeal bonds and judgment liens; provided, however, that all such Liens
in the aggregate have no Material Adverse Effect;
(j) Zoning Restrictions and Easements. zoning restrictions,
easements, licenses, reservations or restrictions on the use of real property or
minor irregularities of title incident thereto which do not in the aggregate
render title thereto unmarketable or impair, in any material manner, the use of
such property for the purposes for which such property is held by such Loan
Party;
(k) Expired Financing Statements and Operating Leases. expired
financing statements, financing statements filed for precautionary purposes in
respect of operating leases, and financing statements in respect of Liens
permitted hereby; and
(l) Existing Liens. Liens existing as of the date hereof set forth on
Schedule 8.1 (Existing Liens).
Section 8.2 Indebtedness. The Borrower will not, and will not
permit any of its Subsidiaries to, directly or indirectly create, incur, assume,
maintain or otherwise become or remain directly or indirectly liable with
respect to any Indebtedness except:
(a) the Obligations;
(b) Indebtedness with respect to Guaranty Obligations permitted by
Section 8.3 (Guaranty Obligations);
(c) current liabilities for goods or services purchased in the
ordinary course of business;
(d) Indebtedness owing to any wholly-owned Subsidiary of the Borrower
by the Borrower or by any other wholly-owned Subsidiary of the Borrower and
Indebtedness owing to the Borrower by any Subsidiary of the Borrower which is
subordinated to the Obligations on terms acceptable to the Requisite Lenders;
(e) Indebtedness outstanding on the Effective Date and listed on
Schedule 4.22 (Existing Indebtedness) ("Existing Indebtedness") and any
refinancing thereof without any increase in the principal amount of such
Indebtedness or decrease in the average maturity thereof;
(f) Indebtedness incurred pursuant to the Indenture;
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(g) (i) purchase money Indebtedness used to purchase properties of
the Borrower or the Guarantor subject to an operating lease as of the date
hereof if the aggregate principal amount of such Indebtedness is not more than
the Fair Market Value thereof and (ii) Capitalized Lease Obligations if the
corresponding Capitalized Lease is the result of the conversion of an operating
lease of the Borrower existing as of the date hereof and the present value of
all payments due under the corresponding Capitalized Lease is not more than one
hundred and five percent (105%) of the present value of all payments due or that
will become due under such operating lease;
(h) Indebtedness otherwise permitted by Section 4.05 (Limitation on
Debt and Restricted Subsidiary Preferred Stock) of the Indenture; and
(i) surety bonds for the performance of a contract other than for the
payment of money entered into in the ordinary course of business consistent with
past practice.
Section 8.3 Guaranty Obligations. The Borrower will not, and will
not permit any of its Subsidiaries to, incur, assume, endorse, be or become
liable for, guaranty (whether directly or indirectly) or permit or suffer to
exist, any Guaranty Obligation, except for (a) Guaranty Obligations evidenced by
a Loan Document and (b) Guaranty Obligations incurred by the Borrower or the
Guarantor in respect of Indebtedness of the Borrower or the Guarantor permitted
by Section 8.2 (Indebtedness).
Section 8.4 Restrictions on Subsidiary Distributions; No New
Negative Pledge.
(a) No Encumbrance on Dividend Payments. The Borrower will not, and
will not permit any of its Material Subsidiaries to, agree to enter into or
suffer to exist or become effective any consensual encumbrance or restriction of
any kind on the ability of such Material Subsidiary to pay dividends or make any
other distribution or transfer of funds or assets or make loans or advances to
or other Investments in, or pay any Indebtedness owed to, the Borrower or any
other Material Subsidiary.
(b) No New Negative Pledges. The Borrower will not, and will not
permit any of its Subsidiaries to, enter into or suffer to exist or become
effective any Contractual Obligation which prohibits or limits the ability of
the Borrower or any Subsidiary to create, incur, assume or suffer to exist any
Lien or Encumbrance upon any of the Collateral, whether now owned or hereafter
acquired, to secure the Obligations.
Section 8.5 Restricted Payments. The Borrower will not, and will
not permit any of its Material Subsidiaries to, directly or indirectly, declare,
order, pay, make or set apart any sum for any Restricted Payment; provided,
however, that any Material
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Subsidiary may make Restricted Payments to the Borrower or the Guarantor;
provided, further, that, except during the Cash Dominion Period, the Borrower
and its Material Subsidiaries may make other Restricted Payments permitted under
Section 4.06 (Limitation on Restricted Payments) of the Indenture up to ten
million Dollars ($10,000,000) in the aggregate.
Section 8.6 Restriction on Fundamental Changes. The Borrower will
not, and will not permit any of its Material Subsidiaries to, (i) merge with any
Person other than a wholly-owned Material Subsidiary of the Borrower, provided,
however, that the Guarantor shall not merge with any other Person, (ii)
consolidate with any Person, (iii) acquire all or substantially all of the Stock
or Stock Equivalents of any Person or (iv) acquire all or substantially all of
the assets of any Person or all or substantially all of the assets constituting
the business of a division, branch or other unit operation of any Person;
provided, however, that the Borrower or the Guarantor shall be authorized to
consummate any transaction described in clauses (i) through (iv) to the extent
the Stock, Stock Equivalents and assets that are acquired do not have in the
aggregate a Fair Market Value of more than fifty million Dollars ($50,000,000)
per Year and, in the case of any transaction described in clause (i) involving
the Borrower, the surviving corporation is the Borrower.
Section 8.7 Sale of Assets.
(a) Sale of Assets. The Borrower will not, and will not permit any of
its Material Subsidiaries to, engage in any Asset Sale, except (i) the sale of
Accounts and certain related property pursuant to the Receivables Purchase
Facility to the extent permitted under the Intercreditor Agreement or (ii) any
Asset Sale permitted under Section 4.08 (Limitation on Sale of Mortgaged
Property) or (other than an Asset Sale involving any Collateral) Section 4.10
(Limitation on Sale of Assets Other than Mortgaged Property) of the Indenture.
(b) Sale of Accounts Receivable. The Borrower will not sell,
otherwise dispose of or factor at maturity or collection, or permit any of its
Subsidiaries to sell or otherwise dispose of, or factor at maturity or
collection, any Accounts, except pursuant to the Receivables Purchase Facility
to the extent permitted under the Intercreditor Agreement.
Section 8.8 Investments in Other Persons. The Borrower will not,
and will not permit any of its Subsidiaries to, directly or indirectly make or
maintain any Investment, except:
(a) Investments in Accounts, contract rights and chattel paper (each
as defined in the Uniform Commercial Code), notes receivable and similar
items
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arising or acquired in the ordinary course of business consistent with the
past practice of the Borrower and its Subsidiaries;
(b) Investments received in settlement of amounts due to a Loan Party
effected in the ordinary course of business;
(c) Investments in Subsidiaries existing as of the Closing Date, any
Investment in the Guarantor and any Investment resulting from any
transaction permitted under Section 8.6 (Restriction on Fundamental
Changes);
(d) Loans or advances to employees of any of the Loan Parties in the
ordinary course of business, which loans and advances shall not in the
aggregate exceed one million Dollars ($1,000,000) outstanding at any time;
(e) Investments in Cash Equivalents;
(f) Investments existing on the date hereof and set forth on Schedule
8.8 (Existing Investments); and
(g) Investments in joint ventures to the extent permitted under
clause (g) or (h) of the definition of "Permitted Investments" in Section
1.01 (Definitions) of the Indenture.
Section 8.9 Change in Nature of Business. The Borrower will not,
and will not permit any of its Material Subsidiaries to, make any material
change in the nature or conduct of its business as carried on at the date
hereof.
Section 8.10 Compliance with ERISA. The Borrower will not, and will
not permit any of its Subsidiaries to, or cause or permit any ERISA Affiliate
to, cause or permit to occur (a) an event that could result in the imposition of
a Lien under Section 412 of the IRC or Section 302 or 4068 of ERISA or (b) an
ERISA Event that could have a Material Adverse Effect.
Section 8.11 Modification of Related Documents. The Borrower will
not, and will not permit any of its Subsidiaries to, (a) without the prior
written consent of the Administrative Agent, alter, rescind, terminate, amend,
supplement, refinance, refund, waive or otherwise modify any provision of any
Related Document or (b) if to do so would have a Material Adverse Effect, permit
any breach or default to exist under any Related Document or take or fail to
take any action thereunder.
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Section 8.12 Modification of Existing Indebtedness Agreements. The
Borrower will not, and will not permit any of its Subsidiaries to, change or
amend the terms of any Existing Indebtedness if the effect of such amendment is
to (a) increase the interest rate on such Existing Indebtedness; (b) change the
dates upon which payments of principal or interest are due on such Existing
Indebtedness other than to extend such dates; (c) change any default or event of
default other than to delete or make less restrictive any default provision
therein or add any covenant with respect to such Existing Indebtedness; (d)
change the redemption or prepayment provisions of such Existing Indebtedness
other than to extend the dates therefor or to reduce the premiums payable in
connection therewith; (e) grant any security or collateral to secure payment of
such Existing Indebtedness; or (f) change or amend any other term if such change
or amendment would materially increase the obligations of the obligor or confer
additional material rights to the holder of such Existing Indebtedness in a
manner adverse to the Borrower, any of its Subsidiaries, the Administrative
Agent or any Lender.
Section 8.13 Transactions with Affiliates.
(a) General Limitation on Affiliate Transactions. The Borrower will
not, and will not permit any of its Subsidiaries to, except as otherwise
expressly permitted herein, directly or indirectly, conduct any business or
enter into or suffer to exist any transaction or series of transactions
(including the purchase, sale, transfer, assignment, lease, conveyance or
exchange or the rendering of any service) (an "Affiliate Transaction") with, or
for the benefit of, any Affiliate of the Borrower unless (i) the terms of such
Affiliate Transaction are (A) set forth in writing and (B) not less favorable to
the Borrower or such Subsidiary, as the case may be, that those that could be
obtained in a comparable arm's-length transaction with a Person that is not an
Affiliate of the Borrower, (ii) if such Affiliate Transaction involves aggregate
payments or value in excess of ten million Dollars ($10,000,000), the board of
directors of the Borrower (including a majority of the disinterested members of
the board of directors of the Borrower) approves such Affiliate Transaction and,
in its good faith judgment, believes that such Affiliate Transaction complies
with clause (i) of this Section 8.13(a) as evidenced by a board resolution
promptly delivered to the Administrative Agent and (iii) if such Affiliate
Transaction involves aggregate payments or value in excess of twenty million
Dollars ($20,000,000), the Borrower obtains a written opinion from an
independent financial advisor to the effect that such Affiliate Transaction is
fair, from a financial point of view, to the Borrower or such Subsidiary, as the
case may be.
(b) Approval of Specific Affiliate Transactions. The following
Affiliate Transactions shall not be prohibited under Section 8.13(a) (General
Limitation on Affiliate Transactions):
(i) any Affiliate Transaction between the Borrower and the
Guarantor;
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(ii) any Restricted Payment permitted to be made pursuant
to Section 8.5 (Restricted Payments);
(iii) any issuance of securities, or other payments, awards
or grants in securities or otherwise pursuant to, or the funding of, employment
arrangements, pension or other benefit plans, stock option and stock ownership
plans and other compensatory arrangements approved by the board of directors of
the Borrower;
(iv) the payment of reasonable fees to directors of the
Borrower or such Subsidiary who are not employees of the Borrower or any of its
Subsidiaries;
(v) loans and advances to employees made in the ordinary
course of business and consistent with the past practices of the Borrower or
such Subsidiary, as the case may be, provided, however, that such loans and
advances do not exceed $5,000,000 in the aggregate at any time outstanding;
(vi) any payments for the purchase of steel products from
NKK or any of its Affiliates or the provision of services by NKK or any of its
Affiliates, including the construction by NKK or any Affiliate thereof of the
new hot dip galvanizing facility at the "Great Lakes Division"; provided,
however, that, in each case, the terms of such payments are determined on an
arm's length basis and are approved by the disinterested members of the board of
directors of the Borrower; and
(vii) any Affiliate Transaction between the Borrower or any
Subsidiary, on the one hand, and one or more joint ventures that are Affiliates
of the Borrower or any Subsidiary, on the other hand, that (A) are on terms no
less favorable to the Borrower or such Subsidiary, as the case may be, than
those that could be obtained in a comparable arm's length transaction with a
person that is not an Affiliate of the Borrower and (B) if such Affiliate
Transactions involve aggregate payments or value in excess of ten million
Dollars ($10,000,000), the board of directors of the Borrower (including a
majority of the disinterested members thereof) approves such Affiliate
Transaction and, in its good faith judgment, believes that such Affiliate
Transaction complies with clause (A) of this Section 8.13(b)(vii).
Section 8.14 Operating Leases. The Borrower will not, and will not
permit any of its Subsidiaries to, become or remain liable as lessee or
guarantor or other surety with respect to any operating lease, unless that
aggregate amount of all rents payable under all such operating leases shall not
exceed one hundred million Dollars ($100,000,000) in any Year.
Section 8.15 Sale and Leaseback Transactions. The Borrower will not,
and will not permit any of its Subsidiaries to, enter into any Sale and
Leaseback
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Transaction covering any property with a Fair Market Value in excess of one
hundred million Dollars ($100,000,000) in the aggregate.
Section 8.16 Cancellation of Indebtedness Owed to It. The Borrower
will not, and will not permit any of its Subsidiaries to, cancel any claim or
Indebtedness owed to it except for reasonable consideration and in the ordinary
course of business consistent with the past practice.
Section 8.17 Material Subsidiaries. The Borrower will not have any
Subsidiary other than the Guarantor and NSFC that is a Material Subsidiary. The
Borrower will not permit the sum of (a) the aggregate of the amounts by which
the book value of the total assets of each Subsidiary listed in Section 1.1
(Non-Material Subsidiaries) exceeds the amount set forth opposite such
Subsidiary in such Schedule plus (b) the aggregate book value of all assets of
all Subsidiaries of the Borrower (other than the Guarantor, NSFC and such
Subsidiaries listed on Schedule 1.1) to exceed ten million Dollars
($10,000,000).
Section 8.18 Capital Structure. The Borrower will not, and will not
permit any of its Material Subsidiaries to, change its capital structure
(including in the terms of its outstanding Stock) or amend its Constituent
Documents other than for changes and amendments which in the aggregate have no
Material Adverse Effect.
Section 8.19 No Speculative Transactions. The Borrower will not, and
will not permit any of its Subsidiaries to, engage in any speculative
transaction or in any transaction involving Hedging Contracts except for the
sole purpose of hedging in the normal course of business and consistent with
industry practices.
ARTICLE IX
Events Of Default
Section 9.1 Events of Default. Each of the following events shall
be an Event of Default:
(a) Failure to Repay Principal. The Borrower shall fail to pay any
principal of any Loan or any Reimbursement Obligation when the same becomes due
and payable; or
(b) Failure to Pay Interest. The Borrower shall fail to pay any
interest on any Loan, any fee under any of the Loan Documents or any other
Obligation (other than those subject to Section 9.1(a) (Failure to Repay
Principal)) and such non-payment continues for a period of five (5) Business
Days after the due date therefor; or
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(c) Borrowing Base Deficiency. A Borrowing Base Deficiency shall
exist and be continuing for a period of more than five (5) consecutive Business
Days after a Responsible Officer of the Borrower first becomes aware of such
Borrowing Base Deficiency; or
(d) Representation and Warranties. Any representation or warranty
made or deemed made by any Loan Party in any Loan Document or by any Loan Party
(or any of its officers) in connection with any Loan Document shall prove to
have been incorrect in any material respect when made or deemed made; or
(e) Covenants. Any Loan Party shall fail to perform or observe (i)
any term, covenant or agreement contained in Section 6.1 (Financial Statements),
Article V (Financial Covenants) or Article VIII (Negative Covenants) or (ii) any
other term, covenant or agreement contained in this Agreement or in any other
Loan Document if such failure under this clause (ii) shall remain unremedied for
ten (10) days after the earlier of the date on which (A) a Responsible Officer
of the Borrower becomes aware of such failure or (B) written notice thereof
shall have been given to the Borrower by the Administrative Agent or any Lender;
or
(f) Unenforceability of Collateral Documents. Any material provision
of any Collateral Document or any Guaranty after delivery thereof pursuant to
this Agreement or any other Loan Document shall for any reason cease to be valid
and binding, or enforceable against, on any Loan Party party thereto, or any
Loan Party shall so state in writing; or
(g) Unenforceability of Liens. Any Collateral Document shall for any
reason cease to create a valid Lien on any of the Collateral purported to be
created thereby or, except as permitted by any Loan Document, such a Lien shall
cease to be a perfected and first-priority Lien or any Loan Party shall state in
writing any of the foregoing; or
(h) Default Under Other Indebtedness. (i) The Borrower or any of its
Material Subsidiaries shall fail to make any payment on any Indebtedness (other
than Indebtedness incurred hereunder) of the Borrower or such Material
Subsidiary (or any Guaranty Obligation in respect of Indebtedness of any other
Person) having a principal amount equal to or greater than ten million Dollars
($10,000,000), when the same becomes due and payable (whether by scheduled
maturity, required prepayment, acceleration, demand or otherwise), (ii) any
other event shall occur or condition shall exist under any agreement or
instrument relating to any such Indebtedness, if the effect of such event or
condition is to accelerate, or to permit the acceleration of, the maturity of
such Indebtedness or (iii) any such Indebtedness shall become or be declared to
be due and payable, or required to be prepaid or repurchased (other than by a
regularly scheduled required prepayment), prior to the stated maturity thereof;
or
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(i) Bankruptcy, Etc. (i) The Borrower or any of its Material
Subsidiaries shall generally not pay its debts as such debts become due, shall
admit in writing its inability to pay its debts generally, shall make a general
assignment for the benefit of creditors (ii) any Legal Proceeding shall be
instituted by or against the Borrower or any of its Material Subsidiaries
seeking (A) to adjudicate it bankrupt or insolvent, (B) liquidation, winding up,
reorganization, arrangement, adjustment, protection, relief or composition of it
or its debts under any Requirement of Law relating to bankruptcy, insolvency or
reorganization or relief of debtors or (C) the entry of an order for relief or
the appointment of a custodian, receiver, trustee or other similar official for
it or for any substantial part of its property and, in the case of any such
Legal Proceeding instituted against the Borrower or any of its Material
Subsidiaries (but not instituted by the Borrower or such Material Subsidiary),
either such Legal Proceeding shall remain undismissed or unstayed for a period
of thirty (30) days or any of the actions sought in such Legal Proceeding shall
occur or (iii) the Borrower or any of its Material Subsidiaries shall take any
corporate action to authorize any of the actions set forth in subsection (i) or
(ii) above; or
(j) Orders. One or more Orders shall have been entered against the
Borrower or any of its Material Subsidiaries (involving, in the case of Orders
providing solely for the payment of a sum of money, an amount in excess of ten
million Dollars ($10,000,000) in the aggregate to the extent not fully covered
by insurance) if (i) enforcement proceedings shall not have been commenced by
any creditor upon any such Order or (ii) there shall be any period of thirty
(30) consecutive days during which a stay of enforcement of any such Order, by
reason of a pending appeal or otherwise, shall not be in effect; or
(k) Material Adverse Change. At any time when there shall be Loans or
Letters of Credit outstanding hereunder, there shall occur a Material Adverse
Change or any event or circumstances which could have a Material Adverse Effect;
or
(l) Change of Control. There shall occur any Change of Control; or
(m) ERISA Event. An ERISA Event shall occur and the amount of all
liabilities and deficiencies, whether or not assessed, and all waiver requests
resulting therefrom, exceeds ten million Dollars ($10,000,000) in the aggregate;
or
(n) Environmental Law Violation. The Borrower or any of its Material
Subsidiaries shall have entered into any Contractual Obligation with any
Governmental Authority or any Order shall have been entered against the Borrower
or any of its Material Subsidiaries, in either case based on, arising from the
violation of or pursuant to, any Environmental Law or the generation, storage,
transportation, treatment, disposal or Release of any Contaminant and, in
connection with all the foregoing, Borrower and its
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Material Subsidiaries are likely to incur Environmental Liabilities and Costs in
excess of ten million Dollars ($10,000,000) in the aggregate.
Section 9.2 Remedies. During the continuance of any Event of
Default, the Administrative Agent (i) may, and shall at the request of the
Requisite Lenders, by notice to the Borrower, declare the obligation of each
Lender to make Loans and the Issuer to issue Letters of Credit to be terminated,
whereupon the same shall forthwith terminate and (ii) may, and shall at the
request of the Requisite Lenders, by notice to the Borrower, declare the Loans,
all interest thereon and all other amounts and Obligations payable under this
Agreement to be forthwith due and payable, whereupon the Loans, all such
interest and all such amounts and Obligations shall become and be forthwith due
and payable without presentment, demand, protest or further notice of any kind,
all of which are hereby expressly waived by the Borrower; provided, however,
that upon the occurrence of the Event of Default specified in Section 9.1(i)
(Bankruptcy, Etc.), (A) the obligation of each Lender to make Loans and of each
Issuer to issue Letters of Credit shall automatically be terminated and (B) the
Loans, all interest thereon and all other amounts and Obligations payable under
this Agreement shall automatically become and be due and payable without
presentment, demand, protest or any notice of any kind, all of which are hereby
expressly waived by the Borrower. In addition to the remedies set forth above,
the Administrative Agent may exercise any remedies provided for by the
Collateral Documents in accordance with the terms thereof or any other remedies
provided by applicable Requirements of Law.
Section 9.3 Cash Collateralization of Letters of Credit. On the
Termination Date or as required by Section 2.9(b) (Excess Borrowing), the
Borrower shall (i) pay to the Administrative Agent in immediately available
funds at the Administrative Agent's office referred to in Section 11.9 (Notices,
Etc.), for deposit in the Cash Collateral Account, an amount equal to one
hundred and five percent (105%) of the sum of all outstanding Letter of Credit
Obligations or (ii) deliver to each Issuer a "back-to-back" letter of credit
issued on behalf, or for the account of, such Issuer in form and substance, and
issued by a financial institution, satisfactory to the Administrative Agent in
an amount equal to one hundred and five percent (105%) of the sum of all
outstanding Letter of Credit Obligations arising from the letters of credit
issued by such Issuer.
ARTICLE X
The Administrative Agent
Section 10.1 Authorization and Action.
(a) Appointment of Administrative Agent. Each Lender and each Issuer
hereby appoints Citicorp as the Administrative Agent hereunder, and each Lender
and each Issuer authorizes the Administrative Agent to take such action as agent
on its behalf
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and to exercise such powers under this Agreement and the other Loan Documents as
are delegated to the Administrative Agent by the terms hereof and thereof and to
exercise such powers as are reasonably incidental thereto. Without limitation of
the foregoing, each Lender and each Issuer hereby authorizes the Administrative
Agent to execute, deliver and to perform its obligations under, each of the Loan
Documents to which the Administrative Agent is a party and to exercise all
rights, powers and remedies that the Administrative Agent may have under such
Loan Documents. Each Lender and each Issuer hereby appoints Fuji Bank as
Syndication Agent and hereby authorizes the Syndication Agent to act as
Syndication Agent on its behalf in accordance with the terms of this Agreement
and the other Loan Documents.
(b) Instructions of the Requisite Lenders. As to any matters not
expressly provided for by this Agreement and the other Loan Documents (including
enforcement or collection), the Administrative Agent shall not be required to
exercise any discretion or take any action, but shall be required to act or to
refrain from acting (and shall be fully protected in so acting or refraining
from acting) upon the instructions of the Requisite Lenders, and such
instructions shall be binding upon all Lenders and each Issuer; provided,
however, that the Administrative Agent shall not be required to take any action
which (i) the Administrative Agent in good faith believes could expose it to
personal liability unless the Administrative Agent receives an indemnification
satisfactory to it from the Lenders and the Issuers with respect to such action
or (ii) is contrary to this Agreement or applicable Requirements of Law. The
Administrative Agent agrees to give to each Lender and each Issuer prompt notice
of each notice given to it by any Loan Party pursuant to the terms of this
Agreement or the other Loan Documents.
(c) No Fiduciary Relationship. In performing its functions and duties
hereunder, the Administrative Agent shall act solely as agent of the Lenders and
the Issuers and does not assume and shall not be deemed to have assumed any
obligation or relationship of agency, fiduciary or trustee with or for any
Lender or Issuer. The Administrative Agent may perform any of its duties under
any of the Loan Documents by or through its agents or employees.
(d) Duties of Syndication Agent. Notwithstanding anything to the
contrary contained in this Agreement, the Syndication Agent is a Lender
designated as "Syndication Agent" for title purposes only and in such capacity
shall have no obligations or duties whatsoever under this Agreement or any other
Loan Document to any Loan Party, any Lender or any Issuer and shall have no
rights separate from its rights as a Lender except as expressly provided in this
Agreement.
Section 10.2 Agents' Reliance, Etc. None of the Administrative
Agent, any of its Affiliates or any of their respective directors, officers,
employees, agents or advisors shall be liable for any action taken or omitted to
be taken by it, him, her or them under, or in connection with, this Agreement or
the other Loan Documents, except for its,
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his, her or their own gross negligence or willful misconduct. Without limitation
of the generality of the foregoing, the Administrative Agent (a) may treat the
payee of any Note as the holder thereof until such Note has been assigned in
accordance with Section 11.2 (Assignments and Participations); (b) may rely on
the Register to the extent set forth in Section 11.2; (c) may consult with legal
counsel (including counsel to the Borrower or any other Loan Party), independent
public accountants and other experts selected by it and shall not be liable for
any action taken or omitted to be taken in good faith by it in accordance with
the advice of such counsel, accountants or experts; (d) makes no warranty or
representation to any Lender or Issuer and shall not be responsible to any
Lender or Issuer for any statements, warranties or representations made by or on
behalf of the Borrower or any of its Material Subsidiaries in, or in connection
with, this Agreement or any of the other Loan Documents; (e) shall not have any
duty to ascertain or to inquire either as to (i) the performance or observance
of any of the terms, covenants or conditions of this Agreement or any of the
other Loan Documents or (ii) the financial condition of any Loan Party or (iii)
the existence or possible existence of any Default or Event of Default; (f)
shall not be responsible to any Lender or Issuer for the due execution,
legality, validity, enforceability, genuineness, sufficiency or value of this
Agreement or any of the other Loan Documents or any other instrument or document
furnished pursuant hereto or thereto; and (g) shall incur no liability under or
in respect of this Agreement or any of the other Loan Documents by acting upon
any notice, consent, certificate or other instrument or writing (including
writings transmitted by facsimile or by electronic means) or any telephone
message believed by it to be genuine and signed or sent by the proper party or
parties.
Section 10.3 The Administrative Agent as Lender. With respect to its
Ratable Portion, Citicorp shall have and may exercise the same rights and powers
hereunder and is subject to the same obligations and liabilities as and to the
extent set forth herein for any other Lender. The terms "Lenders," "Requisite
Lenders," "Super Majority Lenders" or any similar terms shall, unless the
context clearly otherwise indicates, include, without limitation, Citicorp in
its individual capacity as a Lender, as one of the Requisite Lenders or as one
of the Super Majority Lenders. Citicorp and its Affiliates may accept deposits
from, lend money to and generally engage in any kind of banking, trust or other
business with, any Loan Party as if it were not acting as the Administrative
Agent pursuant hereto.
Section 10.4 Lender Credit Decision. Each Lender and each Issuer
acknowledges that it shall, independently and without reliance upon the Agents
or any other Lender conduct its own independent investigation of the financial
condition and affairs of the Borrower, its Material Subsidiaries and each other
Loan Party in connection with the making and continuance of the Loans hereunder
and with the issuance of the Letters of Credit. Each Lender and each Issuer also
acknowledges that it will, independently and without reliance upon the
Administrative Agent or any other Lender and based on such documents and
information as it shall deem appropriate at the time,
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continue to make its own credit decisions in taking or not taking action under
this Agreement and other Loan Documents.
Section 10.5 Indemnification. Each Lender agrees to indemnify the
Administrative Agent, the Syndication Agent and each of their respective
Affiliates, and the directors, officers, employees, agents and advisors of or to
any of the foregoing (to the extent not reimbursed by the Borrower), from and
against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses and disbursements (including fees and
disbursements of legal counsel) of any kind or nature whatsoever which may be
imposed on, incurred by or asserted against, the Administrative Agent or any of
its Affiliates, directors, officers, employees, agents or advisors in any way
relating to or arising out of this Agreement or the other Loan Documents or any
action taken or omitted by the Administrative Agent under this Agreement or the
other Loan Documents; provided, however, that no Lender shall be liable for any
portion of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements resulting from the
Administrative Agent or such Affiliate's gross negligence or willful misconduct.
Without limitation of the foregoing, each Lender agrees to reimburse the
Administrative Agent promptly upon demand for its ratable share of any out-of-
pocket expenses (including fees and disbursements of legal counsel) incurred by
the Administrative Agent in connection with the preparation, execution,
delivery, administration, modification, amendment or enforcement (whether
through negotiations, Legal Proceedings or otherwise) of, or legal advice in
respect of its rights or responsibilities under, this Agreement or the other
Loan Documents, to the extent that the Administrative Agent is not reimbursed
for such expenses by the Borrower or another Loan Party.
Section 10.6 Successor Administrative Agent. The Administrative
Agent may resign at any time by giving written notice thereof to the Lenders and
the Borrower. Upon any such resignation, the Requisite Lenders shall have the
right to appoint a successor Administrative Agent. If no successor
Administrative Agent shall have been so appointed by the Requisite Lenders and
shall have accepted such appointment within thirty (30) days after the retiring
Administrative Agent's giving of notice of resignation, then the retiring
Administrative Agent may, on behalf of the Lenders, appoint a successor
Administrative Agent selected from among the Lenders, which appointment shall be
subject to the prior written approval of the Borrower (which approval may not be
unreasonably withheld and shall not be required upon the occurrence during the
continuance of an Event of Default). Upon the acceptance by a successor
Administrative Agent of any appointment as Administrative Agent hereunder, such
successor Administrative Agent shall thereupon succeed to, and become vested
with, all of the rights, powers, privileges and duties of the retiring
Administrative Agent, and the retiring Administrative Agent shall be discharged
from its duties and obligations under this Agreement and the other Loan
Documents. After any retiring Administrative Agent's resignation hereunder as
Administrative Agent, the provisions of this Article X shall inure to the
benefit of such retiring Administrative Agent, its Affiliates, and their
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respective directors, officers, employees, agents and advisors as to any action
taken, or omitted to be taken, by such retiring Administrative Agent while such
retiring Administrative Agent was Administrative Agent under this Agreement and
the other Loan Documents.
Section 10.7 Concerning the Collateral and the Collateral Documents.
(a) Authorization to Enter into Collateral Documents. Each Lender and
each Issuer authorizes and directs the Administrative Agent to enter into the
Collateral Documents for the benefit of the Lenders and the Issuers. Each Lender
and each Issuer agrees that any action taken by the Administrative Agent or the
Requisite Lenders (or, where required by the express terms hereof, a greater
proportion of the Lenders) in accordance with the provisions hereof or of the
other Loan Documents, and the exercise by the Administrative Agent or the
Requisite Lenders (or, where so required, such greater proportion) of the powers
set forth herein or therein, together with such other powers as are reasonably
incidental thereto, shall be authorized and binding upon all of the Lenders and
Issuers. Without limiting the generality of the foregoing, the Administrative
Agent shall have the sole and exclusive right and authority to (i) act as the
disbursing and collecting agent for the Lenders and the Issuers with respect to
all payments and collections arising in connection herewith and with the
Collateral Documents; (ii) execute and deliver each Collateral Document and
accept delivery of each such agreement delivered by the Borrower or any of its
Material Subsidiaries; (iii) act as collateral agent for the Lenders and the
Issuers for purposes of the perfection of all security interests and Liens
created by such agreements and all other purposes stated therein; provided,
however, that the Administrative Agent hereby appoints, authorizes and directs
each Lender and Issuer to act as collateral sub-agent for the Administrative
Agent, the Lenders and the Issuers for purposes of the perfection of all
security interests and Liens with respect to the Borrower's and its Material
Subsidiaries' respective deposit accounts maintained with, and cash and Cash
Equivalents held by, such Lender or such Issuer; provided, further, that such
appointment as collateral sub-agent is limited to such deposit accounts for
perfection and collection purposes and that the preceding proviso in this clause
(iii) shall not give any Lender or Issuer any obligations or duties whatsoever
in respect of any other Collateral and shall not give any Lender or Issuer any
rights separate from its rights as a Lender or Issuer; (iv) manage, supervise
and otherwise deal with the Collateral; (v) take such action as is necessary or
desirable to maintain the perfection and priority of the security interests and
Liens created or purported to be created by the Collateral Documents; and (vi)
except as may be otherwise specifically restricted by the terms hereof or of any
other Loan Document, exercise all remedies given to the Administrative Agent,
the Lenders or the Issuers with respect to the Collateral under the Loan
Documents relating thereto, applicable Requirement of Law or otherwise.
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(b) Release of Liens. Each of the Lenders and the Issuers hereby
directs, in accordance with the terms hereof, the Administrative Agent to
release any Lien held by the Administrative Agent for the benefit of the Lenders
and the Issuers:
(i) against all of the Collateral, upon termination of the
Commitments and payment and satisfaction in full of all Loans,
Reimbursement Obligations and all other Obligations which have matured and
which the Administrative Agent has been notified in writing are then due
and payable (and, in respect of contingent Letter of Credit Obligations,
with respect to which cash collateral has been deposited or a back-up
letter of credit has been issued, in either case on terms satisfactory to
the Administrative Agent and the Issuers);
(ii) against any part of the Collateral sold or disposed of
by a Loan Party if such sale or disposition is permitted by this Agreement
(or permitted pursuant to a waiver or consent of a transaction otherwise
prohibited by this Agreement) or, if not pursuant to such sale or
disposition, (A) against Collateral with a book value of up to forty
million Dollars ($40,000,000) in the aggregate if such release is consented
to by the Requisite Lenders or (B) against any part of the Collateral in
excess of such amount, if such release is consented to by all the Lenders;
and
(iii) as expressly provided for in any of the Collateral
Documents.
Each of the Lenders and the Issuers hereby directs the Administrative Agent to
execute and deliver or file such termination and partial release statements and
do such other things as are necessary to release Liens to be released pursuant
to this Section 10.7 promptly upon the effectiveness of any such release.
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ARTICLE XI
Miscellaneous
Section 11.1 Amendments, Waivers, Etc. No amendment or waiver of any
provision of this Agreement or any other Loan Document nor consent to any
departure by any Loan Party therefrom shall in any event be effective unless the
same shall be in writing and signed by the Requisite Lenders and then any such
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which given; provided, however, that no amendment, waiver
or consent shall, unless in writing and signed by the Super Majority Lenders,
amend, waive or modify any of the provisions of Article V (Financial Covenants)
or Section 2.9 (Mandatory Prepayments); provided, further, that no amendment,
waiver or consent shall, unless in writing and signed by all the Lenders, do any
of the following:
(a) Waive any of the conditions specified in Section 3.1 (Conditions
Precedent to the Effectiveness of this Agreement) except as otherwise provided
therein;
(b) Increase the Commitments of the Lenders or subject the Lenders to
any additional obligations;
(c) Extend the scheduled final maturity of any Loan or waive, reduce
or postpone any date fixed for the payment or reduction of principal or the
Commitments;
(d) Reduce the principal amount of any Loan, the rate of interest
thereon or any fee payable hereunder, or otherwise extend the time for payment
of such interest or fees;
(e) Change the percentage of the Commitments, the aggregate unpaid
principal amount of the Loans or the Outstanding Amounts, or the number of
Lenders which shall be required for the Lenders or any of them to take any
action hereunder or otherwise change the definition of the terms "Requisite
Lenders", "Super Majority Lenders" or "Ratable Portion" herein;
(f) Release any significant portion of the Collateral except as shall
otherwise be provided in Section 10.7 (Concerning the Collateral and the
Collateral Documents), in the Collateral Documents or the Intercreditor
Agreement except in connection with an Asset Sale permitted by Section 8.7 (Sale
of Assets) or release the Guarantor from its obligations under any Guarantee; or
(g) Amend this Section 11.1;
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provided, however, that no amendment, waiver or consent shall affect the rights
or duties of the Administrative Agent under this Agreement or the other Loan
Documents unless such amendment, waiver or consent is in writing and signed by
the Administrative Agent in addition to the Lenders otherwise required under
this Section 11.1 to take such action.
Section 11.2 Assignments and Participations.
(a) Right to Assign. Each Lender may sell, transfer, negotiate or
assign to one or more Eligible Assignees all or a portion of its rights and
obligations hereunder (including all of its rights and obligations with respect
to the Revolving Loans, the Swing Loans and the Letters of Credit); provided,
however, that (i) if any such assignment shall be of the assigning Lender's
Outstanding Amounts and Commitment, such assignment shall cover the same
percentage of such Lender's Outstanding Amounts and Commitment, (ii) the
aggregate amount being assigned pursuant to each such assignment (determined as
of the date of the Assignment and Acceptance with respect to such assignment)
shall in no event (if less than the Assignor's entire interest) be less than
fifteen million Dollars ($15,000,000) or an integral multiple of one million
Dollars ($1,000,000) in excess thereof, except, in either case, (A) with the
consent of the Borrower and the Administrative Agent or (B) if such assignment
is being made to a Lender or an Affiliate of such Lender and (iii) if such
Eligible Assignee is not, prior to the date of such assignment, a Lender or an
Affiliate of a Lender, such assignment shall be subject to the prior consent of
the Administrative Agent and the Borrower (which consent shall not be
unreasonably withheld); provided, further, that, notwithstanding any other
provision of this Section 11.2, the consent of the Borrower shall not be
required for any assignment effective when any Event of Default shall have
occurred and be continuing.
(b) Effect of Assignment. The parties to each assignment shall
execute and deliver to the Administrative Agent, for its acceptance and
recording, an Assignment and Acceptance, together with any Note (if the
assigning Lender's Loans are evidenced by a Note) subject to such assignment.
Upon such execution, delivery, acceptance and recording and the receipt by the
Administrative Agent from the assignee of an assignment fee in the amount of
three thousand five hundred Dollars ($3,500) from and after the effective date
specified in such Assignment and Acceptance, (i) the assignee thereunder shall
become a party hereto and, to the extent that rights and obligations under the
Loan Documents have been assigned to such assignee pursuant to such Assignment
and Acceptance, have the rights and obligations of a Lender and, if such Lender
were an Issuer, of such Issuer hereunder and thereunder and (ii) the assignor
thereunder shall, to the extent that rights and obligations under this Agreement
have been assigned by it pursuant to such Assignment and Acceptance, relinquish
its rights (except those which survive the payment in full of the Obligations)
and be released from its obligations under the Loan Documents, other than those
relating to events or circumstances occurring prior to such assignment (and, in
the case of an Assignment and Acceptance covering all or the
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remaining portion of an assigning Lender's rights and obligations under the Loan
Documents, such Lender shall cease to be a party hereto).
(c) Representations, Warranties and Covenants of Assignor and
Assignee. By executing and delivering an Assignment and Acceptance, the assignor
thereunder and the assignee thereunder confirm to and agree with each other and
the other parties hereto as follows: (i) other than as provided in such
Assignment and Acceptance, such assigning Lender makes no representation or
warranty and assumes no responsibility with respect to any of the statements,
warranties or representations made in or in connection with this Agreement or
any other Loan Document furnished pursuant thereto or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of this Agreement or
any other Loan Document or any other instrument or document furnished pursuant
hereto or thereto; (ii) such assigning Lender makes no representation or
warranty and assumes no responsibility with respect to the financial condition
of any Loan Party or the performance or observance by any Loan Party of any of
its obligations under this Agreement or any other Loan Document or of any other
instrument or document furnished pursuant hereto or thereto; (iii) the assignee
confirms that it has received a copy of this Agreement and each of the Loan
Documents together with a copy of the most recent financial statements delivered
by the Borrower to the Lenders pursuant to this Agreement and such other
documents and information as it has deemed appropriate to make its own credit
analysis and decision to enter into such Assignment and Acceptance; (iv) such
assignee will, independently and without reliance upon the Administrative Agent,
such assigning Lender or any other Lender and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under this Agreement; (v) such
assignee confirms that it is an Eligible Assignee; (vi) such assignee appoints
and authorizes the Administrative Agent to take such action as Administrative
Agent on its behalf and to exercise such powers under this Agreement and the
other Loan Documents as are delegated to the Administrative Agent by the terms
hereof and thereof, together with such powers as are reasonably incidental
thereto; and (vii) such assignee agrees that it will perform in accordance with
their terms all of the obligations which by the terms of this Agreement are
required to be performed by it as a Lender.
(d) Maintenance of Records. The Administrative Agent shall maintain
at its address referred to in Section 11.9 (Notices, Etc.) a copy of each
Assignment and Acceptance delivered to and accepted by it and a register for the
recordation of the names and addresses of the Lenders and the Commitments of and
principal amount of the Loans and Letter of Credit Obligations owing to each
Lender from time to time (the "Register"). The entries in the Register shall be
conclusive and binding for all purposes, absent manifest error, and the Loan
Parties, the Administrative Agent and the Lenders may treat each Person whose
name is recorded in the Register as a Lender for all purposes of this Agreement.
The Register shall be available for inspection by the Borrower, the
Administrative Agent or any Lender at any reasonable time and from time to time
upon reasonable prior notice.
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(e) Procedure for Assignment. Upon its receipt of an Assignment and
Acceptance executed by an assigning Lender and an assignee representing that it
is an Eligible Assignee, the Administrative Agent shall, if such Assignment and
Acceptance has been completed, (i) accept such Assignment and Acceptance, (ii)
record the information contained therein in the Register and (iii) give prompt
notice thereof to the Borrower. Within five (5) Business Days after its receipt
of such notice, the Borrower, at its own expense, shall, if requested by such
assignee, execute and deliver to the Administrative Agent, new Notes to the
order of such Eligible Assignee in an amount equal to the Commitments assumed by
it pursuant to such Assignment and Acceptance and, if the assigning Lender has
surrendered any Note for exchange in connection with the assignment and has
retained Commitments hereunder, new Notes to the order of the assigning Lender
in an amount equal to the Commitments retained by it hereunder. Such new Notes
shall be dated the same date as the surrendered Notes and be in substantially
the form of Exhibit A.
(f) Assignment to the Federal Reserve Bank. In addition to any other
right each Lender may have under this Section 11.2 or otherwise, each Lender may
assign, as collateral or otherwise, any of its rights under this Agreement
(including rights to payments of principal or interest on the Loans) to any
Federal Reserve Bank without notice to or consent of the Borrower or the
Administrative Agent; provided, however, that no such assignment shall release
the assigning Lender from any of its obligations hereunder. The terms and
conditions of any such assignment and the documentation evidencing such
assignment shall be in form and substance satisfactory to the assigning Lender
and the assignee Federal Reserve Bank.
(g) Sale of Participations. Each Lender may sell participations to
one or more banks or other Persons in or to all or a portion of its rights and
obligations under the Loan Documents (including all its rights and obligations
with respect to the Revolving Loans and Letters of Credit); provided, however,
that such sale shall be effective only upon receipt by the Administrative Agent
of a notice of such sale in form and substance satisfactory to the
Administrative Agent. The terms of such participation shall not, in any event,
require the participant's consent to any amendments, waivers or other
modifications of any provision of any Loan Documents, any departure by any Loan
Party therefrom or the exercising or refraining from exercising any powers or
rights which such Lender may have under or in respect of the Loan Documents
(including the right to enforce the obligations of the Loan Parties), except if
any such amendment, waiver or other modification or consent would (i) reduce the
amount, or postpone any date fixed for, any amount (whether of principal,
interest or fees) payable to such participant under the Loan Documents, to which
such participant would otherwise be entitled under such participation or (ii)
result in the release of all or substantially all of the Collateral other than
in accordance with the Collateral Documents. In the event of the sale of any
participation by any Lender, (A) such Lender's obligations under the Loan
Documents shall remain unchanged, (B) such Lender shall remain solely
responsible to the other parties hereto for the performance of such obligations,
(C) such Lender shall remain the
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holder of such Obligations for all purposes of this Agreement, (D) such Lender
shall disclose to the Borrower the identity of each bank or other entity
purchasing a participation within a reasonable time after the sale and purchase
of such participation, and (E) the Borrower, the Administrative Agent and the
other Lenders shall continue to deal solely and directly with such Lender in
connection with such Lender's rights and obligations under this Agreement.
(h) Assignments to Other Lenders. Any Issuer may at any time assign
its rights and obligations hereunder to any other Lender by an instrument in
form and substance satisfactory to the Borrower, the Administrative Agent, such
Issuer and such Lender.
Section 11.3 Costs; Expenses; Indemnities.
(a) Reimbursement of Costs and Expenses. The Borrower agrees to pay
on demand (i) all costs and expenses of the Administrative Agent in connection
with the preparation, execution, delivery, administration, modification and
amendment of this Agreement, each of the other Loan Documents and each of the
other documents to be delivered hereunder and thereunder, including (A) the fees
and out-of-pocket expenses of Weil, Gotshal & Manges LLP, counsel to the
Administrative Agent, (B) the reasonable fees of accountants, appraisers,
consultants or industry experts retained by the Administrative Agent with
respect thereto and (C) all filings and recording fees, and all syndication
(including printing, distribution and bank meetings) transportation and audit
costs and expenses and (ii) all costs and expenses of the Administrative Agent,
each Lender and each Issuer in connection with the restructuring or enforcement
(whether through negotiation, legal proceedings or otherwise) of this Agreement
and the other Loan Documents.
(b) Indemnification Against Third-Party Claims. The Borrower agrees
to indemnify and hold harmless the Administrative Agent, each Lender and each
Issuer and their respective Affiliates, and the directors, officers, employees,
Administrative Agents, attorneys, consultants and advisors of or to any of the
foregoing (including those retained in connection with the satisfaction or
attempted satisfaction of any of the conditions set forth in Article III
(Conditions Precedent to the Effectiveness of this Agreement and to Loans and
Letters of Credit)) (each of the foregoing being an "Indemnitee") from and
against any and all claims, damages, liabilities, obligations, losses,
penalties, actions, judgments, suits, costs, disbursements and expenses of any
kind or nature (including fees and disbursements of counsel to any such
Indemnitee) which may be imposed on, incurred by or asserted against any such
Indemnitee in connection with or arising out of any Legal Proceeding, whether or
not any such Indemnitee is a party thereto, whether direct, indirect or
consequential and whether based on any Requirement of Law or a Contractual
Obligation or otherwise, in any manner relating to or arising out of this
Agreement, any other Loan Document, any Obligation, any Letter of Credit, any
Related
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Document, or any act, event or transaction related or attendant to any thereof,
the use or intended use of the proceeds of the Loans or Letters of Credit or in
connection with any investigation of any potential matter covered hereby
(collectively, the "Indemnified Matters"); provided, however, that the Borrower
shall not have any obligation under this Section 11.3(b) to an Indemnitee with
respect to any Indemnified Matter caused by or resulting from the gross
negligence or willful misconduct of that Indemnitee, as determined by a court of
competent jurisdiction in a final non-appealable judgment or order. Without
limiting the foregoing, Indemnified Matters include, without limitation, (i) all
Environmental Liabilities and Costs arising from or connected with the past,
present or future operations of the Borrower or any of its Subsidiaries
involving any property subject to a Collateral Document or damage to real or
personal property or natural resources or harm or injury alleged to have
resulted from any Release of Contaminants on, upon or into such property or any
contiguous real estate; (ii) any costs or liabilities incurred in connection
with any Remedial Action concerning the Borrower or any of its Subsidiaries;
(iii) any costs or liabilities incurred in connection with any Environmental
Lien; (iv) any costs or liabilities incurred in connection with any other matter
under any Environmental Law, including CERCLA and applicable state property
transfer laws, whether, with respect to any of the foregoing, such Indemnitee is
a mortgagee pursuant to any leasehold mortgage, a mortgagee in possession, the
successor in interest to the Borrower or any of its Subsidiaries or the owner,
lessee or operator of any property of the Borrower or any of its Subsidiaries by
virtue of foreclosure, except, with respect to any of the foregoing referred to
in clauses (i), (ii), (iii) and (iv), to the extent incurred following (A)
foreclosure by the Administrative Agent, any Lender, any Issuer or the
Administrative Agent, any Lender or any Issuer having become the successor in
interest to the Borrower or any of its Subsidiaries and (B) attributable solely
to acts of the Administrative Agent, such Lender or such Issuer or any agent on
behalf of the Administrative Agent or such Lender.
(c) Eurodollar Loans. If any Lender receives any payment of principal
of, or is subject to a conversion of, any Eurodollar Rate Loan other than on the
last day of an Interest Period relating to such Loan, whether as a result of any
payment or conversion made by the Borrower or acceleration of the maturity of
the Loans pursuant to Section 9.2 (Remedies) or for any other reason, the
Borrower shall, upon demand by such Lender (with a copy of such demand sent to
the Administrative Agent), pay to the Administrative Agent for the account of
such Lender all amounts required to compensate such Lender for any additional
losses, costs or expenses which it may reasonably incur as a result of such
payment or conversion, including any loss, cost or expense incurred by reason of
the liquidation or reemployment of deposits or other funds acquired by such
Lender to fund or maintain such Loan.
(d) Reimbursement of Brokers' Fees. The Borrower shall indemnify the
Administrative Agent, the Lenders and each Issuer for and hold the
Administrative Agent, the Lenders and each Issuer harmless from and against, any
and all claims for brokerage commissions, fees and other compensation made
against the Administrative
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Agent, the Lenders and the Issuers for any broker, finder or consultant with
respect to any agreement, arrangement or understanding made by or on behalf of
any Loan Party or any of its Material Subsidiaries in connection with the
transactions contemplated by this Agreement.
(e) Notification of Borrower. The Administrative Agent, each Lender
and each Issuer agree that, in the event that any such Legal Proceeding set
forth in Section 11.3(b) (Indemnification Against Third-Party Claims) is
asserted or threatened in writing or instituted against it or any other
Indemnitee, or any Remedial Action is requested of it, any of its Affiliates or
any of their respective directors, officers, employees, agents and advisors, for
which any Indemnitee may desire indemnity or defense hereunder, such Indemnitee
shall promptly notify the Borrower in writing.
(f) Borrower's Obligation to Defend. The Borrower, at the request of
any Indemnitee, shall have the obligation to defend against such Legal
Proceeding or requested Remedial Action and the Borrower, in any event, may
participate in the defense thereof with legal counsel of the Borrower's choice.
In the event that such Indemnitee requests the Borrower to defend against such
Legal Proceeding or requested Remedial Action, the Borrower shall promptly do so
and such Indemnitee shall have the right to have legal counsel of its choice
participate in such defense. No action taken by legal counsel chosen by such
Indemnitee in defending against any such Legal Proceeding or requested Remedial
Action, shall vitiate or in any way impair the Borrower's obligation and duty
hereunder to indemnify and hold harmless such Indemnitee.
(g) Survival of Indemnification Obligation. The Borrower agrees that
any indemnification or other protection provided to any Indemnitee pursuant to
this Agreement (including pursuant to this Section 11.3) or any other Loan
Document shall (i) survive payment in full of the Obligations and (ii) inure to
the benefit of any Person who was at any time an Indemnitee under this Agreement
or any other Loan Document.
(h) Limitation of Liability. The Borrower agrees that no Indemnitee
shall have any liability (whether direct or indirect, based on any Requirement
of Law, Contractual Obligation or otherwise) to any Loan Party or any of their
respective Subsidiaries or any of their equity holders or creditors for, in
relation to, or in connection with the transactions contemplated hereby and in
the other Loan Documents and Related Documents, except to the extent such
liability is found in a final judgment by a court of competent jurisdiction to
have resulted from such Indemnitee's gross negligence or willful misconduct. In
no event, however, shall any Indemnified Party be liable on any theory of
liability for any special, indirect, consequential or punitive damages and the
Borrower hereby waives, releases and agrees (for itself and on behalf of its
Subsidiaries) not to sue upon any such claim for any such damages, whether or
not accrued and whether or not known or suspected to exist in its favor.
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<PAGE>
Section 11.4 Right of Set-off. Upon the occurrence and during the
continuance of any Event of Default, each Lender and each Affiliate thereof is
hereby authorized at any time and from time to time, to the fullest extent
permitted by Requirements of Law, to set off and apply any and all deposits
(general or special, time or demand, provisional or final) at any time held and
other Indebtedness at any time owing by such Lender or its Affiliates to or for
the credit or the account of the Borrower against any and all of the Obligations
now or hereafter existing whether or not such Lender shall have made any demand
under this Agreement or any other Loan Document and although such Obligations
may be unmatured. Each Lender agrees promptly to notify the Borrower after any
such set-off and application made by such Lender or its Affiliates; provided,
however, that the failure to give such notice shall not affect the validity of
such set-off and application. The rights of each Lender under this Section 11.4
are in addition to the other rights and remedies (including other rights of set-
off) that such Lender may have.
Section 11.5 Sharing of Payments, Etc.
(a) Purchase of Participations. If any Lender shall obtain any
payment (whether voluntary, involuntary, through the exercise of any right of
set-off or otherwise) on account of the Revolving Loans made by it (other than
pursuant to Section 2.15 (Special Provisions Governing Eurodollar Rate Loans),
Section 2.16 (Capital Adequacy) or Section 2.17 (Taxes)) in excess of its
Ratable Portion of payments obtained by all the Lenders on account of such
Obligations, such Lender (a "Purchasing Lender") shall forthwith purchase from
the other Lenders (each, a "Selling Lender") such participations in their Loans
or other Obligations as shall be necessary to cause such Purchasing Lender to
share the excess payment ratably with each of them.
(b) Payment Refunded. If all or any portion of any payment received
by a Purchasing Lender is thereafter recovered from such Purchasing Lender, such
purchase from each Selling Lender shall be rescinded and such Selling Lender
shall repay to the Purchasing Lender the purchase price to the extent of such
recovery together with an amount equal to such Selling Lender's ratable share
(according to the proportion of (i) the amount of such Selling Lender's required
repayment to (ii) the total amount so recovered from the Purchasing Lender) of
any interest or other amount paid or payable by the purchasing Lender in respect
of the total amount so recovered.
(c) Rights of Purchasing Lender. The Borrower agrees that any
Purchasing Lender so purchasing a participation from a Selling Lender pursuant
to this Section 11.5 may, to the fullest extent permitted by Requirements of
Law, exercise all its rights of payment (including the right of set-off) with
respect to such participation as fully as if such Lender were the direct
creditor of the Borrower in the amount of such participation.
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<PAGE>
Section 11.6 Independence of Representations and Warranties. The
parties hereto intend that each representation, warranty and covenant contained
herein shall have independent significance. If the Borrower has breached any
representation, warranty or covenant contained herein in any respect, the fact
that there exists another representation, warranty or covenant relating to the
same subject matter (regardless of the relative levels of specificity) that the
Borrower has not breached shall not detract from or mitigate the fact that such
party is in breach of the first representation, warranty or covenant.
Section 11.7 Governing Law. This Agreement shall be governed by and
construed in accordance with the law of the State of New York.
Section 11.8 Submission to Jurisdiction; Consent to Service of
Process.
(a) Submission to Jurisdiction. The parties hereto irrevocably
submit, for themselves and in respect of their property, to the non-exclusive
jurisdiction of any federal or state court located within the Borough of
Manhattan, in the City and State of New York over any dispute arising out of, in
connection with, or relating to this Agreement, any Loan Document or any of the
transactions contemplated hereby and each party hereby irrevocably agrees that
all Legal Proceedings related to such dispute may be heard and determined in
such courts. The parties hereto irrevocably waive, to the fullest extent
permitted by all applicable Requirements of Law, any objection which they may
now or hereafter have to the laying of venue of any such dispute brought in such
court or any defense of inconvenient forum for the maintenance of such dispute.
Each of the parties hereto agrees that any Order in any such dispute may be
enforced in other jurisdictions by suit on the judgment, other Legal Proceedings
or in any other manner provided by all applicable Requirements of Law.
(b) Consent to Service of Process. The Borrower irrevocably consents
to the service of any and all process in any such action or proceeding by the
mailing (by registered or certified mail, postage prepaid) of a copy of such
process to the Borrower at its address specified in Section 11.9 (Notices,
Etc.). The Borrower agrees that a final judgment in any such action or
proceeding shall be conclusive and may be enforced in other jurisdictions by
suit on the judgment, other Legal Proceedings or in any other manner provided by
any Requirement of Law.
(c) Jurisdiction Non-Exclusive. Nothing contained in this Section
11.8 shall affect the right of the Administrative Agent or any Lender to serve
process in any other manner permitted by applicable Requirements of Law or
commence Legal Proceedings or otherwise proceed against the Borrower or any
other Loan Party in any other jurisdiction.
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<PAGE>
(d) Currency Conversion. If for the purposes of obtaining judgment in
any court it is necessary to convert a sum due hereunder in Dollars into another
currency, the parties hereto agree, to the fullest extent that they may
effectively do so, that the rate of exchange used shall be that at which in
accordance with normal banking procedures the Administrative Agent could
purchase Dollars with such other currency at the spot rate of exchange quoted by
the Administrative Agent at 11:00 A.M. (New York time) on the Business Day
preceding that on which final judgment is given, for the purchase of Dollars,
for delivery two Business Days thereafter.
(e) Waiver of Trial By Jury. Each of the Administrative Agent, the
Lenders, the Issuers and each Loan Party hereby irrevocably waives trial by jury
in any Legal proceeding brought by another party hereto involving, directly or
indirectly, any matter in any way arising out of, related to or connected with
this Agreement, any other Loan Document or the transactions contemplated hereby.
Section 11.9 Notices, Etc. All notices and other communications
provided for in this Agreement shall be in writing (including telecopy) and
mailed, telecopied or delivered by hand, if to the Borrower, at its address at
4100 Edison Lakes Parkway; Mishawaka, I.N. 46565-3440 (telecopy number: (219)
273-7478) (telephone number: (219) 273-7414), Attention: Mr. William E.
McDonough, with copy to Ronald J. Werhnyak, Esq. at the same address; if to the
Syndication Agent or any Lender, at its Domestic Lending Office specified
opposite its name on Schedule II; and if to the Administrative Agent, at its
address at 399 Park Avenue, 6th Floor, New York, N.Y. 10043 (telecopy number:
(212) 793-1290) (telephone number: (212) 559-3149), Attention: Mr. Keith R.
Karako, with copy to Weil, Gotshal & Manges LLP, 757 Fifth Avenue, New York,
N.Y. 10153 (telecopy number (212) 310-8007) (telephone number: (212) 310-8000),
Attention: Ronald F. Daitz, Esq.; or, as to the Borrower or the Administrative
Agent, at such other address as shall be designated by such party in a written
notice to the other parties and, as to each other party, at such other address
as shall be designated by such party in a written notice to the Borrower and the
Administrative Agent. All such notices and communications shall, when mailed,
telecopied or delivered, be effective when deposited in the mails, telecopied
with confirmation of receipt or delivered by hand to the addressee or its
Administrative Agent, respectively, except that notices and communications to
the Administrative Agent pursuant to Article II (The Facilities) or Article X
(The Administrative Agent) shall not be effective until received by the
Administrative Agent.
Section 11.10 No Waiver; Remedies. No failure on the part of any
Lender or the Administrative Agent to exercise, and no delay in exercising, any
right hereunder shall operate as a waiver thereof; nor shall any single or
partial exercise of any such right preclude any other or further exercise
thereof or the exercise of any other right.
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<PAGE>
The remedies herein provided are cumulative and not exclusive of any remedies
provided under any Requirement of Law.
Section 11.11 Execution in Counterparts; Effectiveness; Assignments
by the Borrower. This Agreement may be executed in any number of counterparts,
each of which when so executed shall be deemed an original, and all of which
taken together shall constitute one and the same agreement. This Agreement shall
become effective when it shall have been executed by the Borrower and the
Administrative Agent, when the Administrative Agent shall have been notified by
each Lender that such Lender has executed it and when each of the conditions set
forth in Section 3.1 (Conditions Precedent to the Effectiveness of this
Agreement) shall have been satisfied (or satisfaction of such conditions shall
have been duly waived), and thereafter this Agreement shall be binding upon and
inure to the benefit of the Borrower, the Administrative Agent and each Lender
and their respective successors and permitted assigns. The Borrower shall not
have the right to assign its rights hereunder or any interest herein without the
prior written consent of the Lenders.
Section 11.12 Entire Agreement. This Agreement, together with all of
the other Loan Documents and all certificates and documents delivered hereunder
or thereunder, embodies the entire agreement of the parties and supersedes all
prior Contractual Obligations relating to the subject matter hereof (and any
such prior Contractual Obligations are hereby terminated and of no further force
and effect).
Section 11.13 Further Assurances. The Seller and the Purchaser each
agrees to execute and deliver such other documents or agreements and to take
such other action as may be reasonably necessary or desirable for the
implementation of this Agreement and the consummation of the transactions
contemplated hereby.
Section 11.14 Confidentiality. Each Lender and the Administrative
Agent agree to keep information obtained by it pursuant hereto and pursuant to
the other Loan Documents confidential in accordance with such Lender's or the
Administrative Agent's, as the case may be, customary practices and agrees that
it will only use such information in connection with the transactions
contemplated by this Agreement and not disclose any of such information other
than (a) to such Lender's or the Administrative Agent's, as the case may be,
employees, representatives and agents who are or are expected to be involved in
the evaluation of such information in connection with the transactions
contemplated by this Agreement and who are advised of the confidential nature of
such information, (b) to the extent such information presently is or hereafter
becomes available to such Lender or the Administrative Agent, as the case may
be, on a non-confidential basis from a source other than the Borrower, (c) to
the extent disclosure is required by any Requirement of Law (including as may be
required by bank regulators or auditors) or helpful in any Legal Proceeding or
(d) to assignees or participants or
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<PAGE>
potential assignees or participants who agree to be bound by the provisions of
this sentence.
[Signature Page Follows]
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<PAGE>
In Witness Whereof, the parties hereto have caused this Agreement to
be executed by their respective officers thereunto duly authorized, as of the
date first above written.
National Steel Corporation
By: ________________________
Title:
Citicorp U.S.A., Inc.
as Administrative Agent
By: ________________________
Title:
The Fuji Bank, Limited
as Syndication Agent
By: ________________________
Title:
Citibank, N.A.
as Issuer
By: ________________________
Title:
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<PAGE>
Lenders
Bank of America, N.A.
By: ________________________
Title:
Citicorp USA, Inc.
By: ________________________
Title:
Comerica Bank
By: ________________________
Title:
Morgan Guaranty Trust Company Of
New York
By: ________________________
Title:
LaSalle Business Credit, Inc.
By: ________________________
Title:
Mellon Bank, N.A.
By: ________________________
Title:
-111-
<PAGE>
National City Commercial
Finance, Inc.
By: ________________________
Title:
The Fuji Bank, Limited
By: ________________________
Title:
-112-
<PAGE>
Exhibit A
Form of
Revolving Credit Note
U.S. $______________ Dated: November __, 1999
For Value Received, the undersigned, National Steel Corporation, a
Delaware corporation (the "Borrower"), Hereby Promises To Pay to the order of
[NAME OF LENDER] (the "Lender") the principal sum of ______________ United
States Dollars ($__________), or, if less, the aggregate unpaid principal amount
of all Revolving Loans (as defined in the Credit Agreement referred to below) of
the Lender to the Borrower, payable at such times, and in such amounts, as are
specified in the Credit Agreement.
The Borrower promises to pay interest on the unpaid principal amount
of the Revolving Loans from the date made until such principal amount is paid in
full, at such interest rates, and payable at such times, as are specified in the
Credit Agreement.
Both principal and interest are payable in lawful money of the United
States of America to Citicorp USA, Inc., as Administrative Agent, at 399 Park
Avenue, New York, New York 10043, in immediately available funds. The Revolving
Loans made by the Lender to the Borrower, and all payments made on account of
the principal thereof, shall be recorded by the Lender and, prior to any
transfer hereof, endorsed on this Note.
This Note is one of the Revolving Credit Notes referred to in, and is
entitled to the benefits of, the Credit Agreement, dated as of November 19,
1999, with the financial institutions and other entities from time to time party
thereto as a Lender or Issuer and Citicorp USA, Inc. as agent for the Lenders
and Issuers, and Fuji Bank, Limited as syndication agent for the Lenders and
Issuers (said Credit Agreement, as it may be amended or otherwise modified from
time to time, being the "Credit Agreement" and capitalized terms used herein but
not defined herein being used herein as defined in the Credit Agreement). The
Credit Agreement, among other things, (i) provides for the making of Revolving
Loans by the Lender to the Borrower in an aggregate amount not to exceed at any
time outstanding the United States dollar amount first above mentioned, the
indebtedness of the Borrower resulting from such Revolving Loans being evidenced
by this Note and (ii) contains provisions for acceleration of the maturity of
the unpaid principal amount of this Note upon the happening of certain stated
events and also for prepayments on account of the principal hereof prior to the
maturity hereof upon the terms and conditions therein specified.
This Note is entitled to the benefits of certain guaranties and is
secured as provided in the Loan Documents (as defined in the Credit Agreement).
A-1
<PAGE>
Demand, presentment, protest and notice of nonpayment and protest are
hereby waived by the Borrower.
This Note shall be governed by, and construed and interpreted in
accordance with, the law of the State of New York, without regard to any choice
or conflict of law provision or rule thereof that would result in the
application of the law of any other jurisdiction.
National Steel Corporation
By:__________________________
Title:
A-2
<PAGE>
Loans And Payments Of Principal
-------------------------------
Amount Amount of Principal Notation
Date of Loan Paid or Prepaid Made by
----- --------- --------------------- ----------
A-3
<PAGE>
Exhibit B
Form of
Notice Of Borrowing
Citicorp USA Inc.,
as Administrative Agent for
the financial institutions party to the
Credit Agreement referred to below
399 Park Avenue
New York, New York 10043 [Date]
Attention: Mr. Keith R. Karako
Re: National Steel Corporation
--------------------------
Gentlemen:
The undersigned, National Steel Corporation, refers to the Credit
Agreement, dated as of November 19, 1999, by and among National Steel
Corporation, a Delaware corporation (the "Borrower"), with the financial
institutions and other entities from time to time party thereto as a Lender or
Issuer and Citicorp USA, Inc. as agent for the Lenders and Issuers, and Fuji
Bank, Limited as syndication agent for the Lenders and Issuers (said Credit
Agreement, as it may be amended or otherwise modified from time to time, being
the "Credit Agreement" and capitalized terms used herein but not defined herein
being used herein as defined in the Credit Agreement) and hereby gives you
notice, irrevocably, pursuant to Section 2.2 (Borrowing Procedures) of the
Credit Agreement that the undersigned hereby requests a Revolving Credit Note
under the Credit Agreement and, in that connection, sets forth below the
information relating to such Borrowing (the "Proposed Borrowing") as required by
Section 2.2 of the Credit Agreement:
(i) The Business Day of the Proposed Borrowing is
________, ____.
(ii) The aggregate amount of the Proposed Borrowing is
$___________, of which amount [$_________ consists of Base Rate Loans]
[ and $_________ consists of Eurodollar Rate Loans having an initial
Interest Period of [1] [2] [3] [6] months].
The undersigned hereby certifies that the amount of the Receivables
Availability as of the close of the business on the Business Day immediately
preceding the date hereof is ____ and the following statements are true on the
date hereof, and will be true on the date of the Proposed Borrowing, before and
after giving effect thereto and to the application of the proceeds therefrom:
(A) the representations and warranties contained in Article
IV (Representations and Warranties) of the Credit Agreement and in
each of
B-1
<PAGE>
the other Loan Documents are true and correct as though made on and as
of such date;
(B) no Borrowing Base Deficiency exists or will result from
the Proposed Borrowing; and
(C) no Default or Event of Default exists or will result
from the Proposed Borrowing.
Very truly yours,
National Steel Corporation
By:_________________________________
Name:
Title:
B-2
<PAGE>
Exhibit C
Form of
Notice of Conversion Or Continuation
Citicorp USA, Inc.,
as Administrative Agent for the
financial institutions party to the
Credit Agreement referred below
399 Park Avenue
New York, New York 10043
[Date]
Attention: Mr. Keith R. Karako
Re: National Steel Corporation
--------------------------
Gentlemen:
The undersigned, National Steel Corporation (the "Borrower"),
refers to the Credit Agreement, dated as of November 19, 1999, with the
financial institutions and other entities from time to time party thereto as a
Lender or Issuer and Citicorp USA, Inc. as agent for the Lenders and Issuers,
and Fuji Bank, Limited as syndication agent for the Lenders and Issuers (said
Credit Agreement, as it may be amended or otherwise modified from time to time,
being the "Credit Agreement" and capitalized terms used herein but not defined
herein being used herein as defined in the Credit Agreement) and hereby gives
you notice pursuant to Section 2.11 (Conversion/Continuation Option) of the
Credit Agreement that the undersigned hereby requests a [conversion]
[continuation] on ______________ ___, ____ of $____________ in principal amount
of presently outstanding Revolving Loans that are [Base Rate Loans] [Eurodollar
Rate Loans] having an Interest Period ending on _____________ __, 200- [to] [as]
[Base Rate][Eurodollar Rate] Loans. The Interest Period for such amount
requested to be converted to or continued as Eurodollar Rate Loans is [1] [2]
[3] [6] months.
_______________________
C-1
<PAGE>
In connection herewith, the undersigned hereby certifies that no
Default or Event of Default is continuing and that the proposed [conversion]
[continuation] would not violate any of the provisions of Section 2.15 (Special
Provisions Governing Eurodollar Rate Loans) of the Credit Agreement.
Very truly yours,
National Steel Corporation
By:_______________________________
Name:
Title:
C-2
<PAGE>
EXHIBIT D
FORM OF
SECURITY AGREEMENT
SECURITY AGREEMENT, dated as of November __, 1999 (this "Security
Agreement"), by and among NATIONAL STEEL CORPORATION, a Delaware corporation
(the "Borrower"), NATIONAL STEEL PELLET COMPANY, a Delaware corporation ("NSPC"
and each of NSPC and the Borrower being a "Grantor" and together the "Grantors")
to CITICORP USA, INC., as agent for the Lenders and Issuers party to the Credit
Agreement referred to below (in such capacity, the "Administrative Agent").
W I T N E S S E T H:
WHEREAS, the Borrower is party to a Credit Agreement dated as of
November 19, 1999, with the financial institutions and other entities from time
to time party thereto as a Lender or Issuer and Citicorp USA, Inc. as agent for
the Lenders and Issuers, and The Fuji Bank, Limited as Syndication Agent (as
amended or otherwise modified from time to time, the "Credit Agreement";
capitalized terms used herein but not defined herein are used herein as defined
in the Credit Agreement); and
WHEREAS, the Borrower owns beneficially and of record all of the
capital stock of NSPC, and the Borrower and NSPC are members of the same
consolidated group of companies and are engaged in related businesses, and NSPC
will derive substantial direct and indirect economic benefit from the Loans and
Letters of Credit; and
WHEREAS, NSPC has entered into a Guaranty, dated as of the date
hereof, in favor of the Secured Parties (as defined in the Guaranty) (as may be
amended, supplemented or otherwise modified from time to time, being a
"Guaranty"); and
WHEREAS, it is a condition precedent to the making of the Loans and
the issuance of the Letters of Credit pursuant to the Credit Agreement that the
Grantors shall have entered into this Agreement;
NOW, THEREFORE, in consideration of the premises and in order to
induce the Lenders to make the Loans and the Issuer to issue the Letters of
Credit each Grantor hereby agrees with the Administrative Agent on behalf and
for the ratable benefit of the Secured Parties as follows:
1. Defined Terms. As used in this Agreement, the following terms
have the meanings specified below (such meanings being equally applicable to
both the singular and plural forms of the terms defined):
"Account" means any "account," as such term is defined in
Section 9-106 of the Uniform Commercial Code, now owned or hereafter
acquired by a Grantor and, in any event, includes (i) all accounts
receivable, book
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debts and other forms of obligations (other than forms of obligations
evidenced by Chattel Paper, Documents or Instruments) now owned or
hereafter received or acquired by or belonging or owing to such
Grantor (including under any trade name, style or division thereof)
whether arising out of goods sold or services rendered by such Grantor
or from any other transaction, whether or not the same involves the
sale of goods or services by such Grantor (including any such
obligation which might be characterized as an account or contract
right under the Uniform Commercial Code), (ii) all of such Grantor's
rights in, to and under all purchase orders or receipts now owned or
hereafter acquired by it for goods or services, and all of such
Grantor's rights to any goods represented by any of the foregoing
(including unpaid seller's rights of rescission, replevin, reclamation
and stoppage in transit and rights to returned, reclaimed or
repossessed goods), (iii) all moneys due or to become due to such
Grantor under all contracts for the sale of goods or the performance
of services or both by such Grantor (whether or not yet earned by
performance on the part of such Grantor or in connection with any
other transaction), now in existence or hereafter occurring, including
the right to receive the proceeds of said purchase orders and
contracts, and (iv) all collateral security and guarantees of any kind
given by any Person with respect to any of the foregoing.
"Account Debtor" means any "account debtor," as such term is
defined in Section 9-105(1)(a) of the Uniform Commercial Code.
"Cash Collateral Account" means the cash collateral account
No. 30412663 under the title "CUSA F/A/O National Steel Corporation"
with Citibank in New York, New York.
"Chattel Paper" means any "chattel paper," as such term is
defined in Section 9-105(1)(b) of the Uniform Commercial Code, now
owned or hereafter acquired by a Grantor.
"Documents" means any "document," as such term is defined in
Section 9-105(1)(f) of the Uniform Commercial Code, or other receipts
covering, evidencing or representing Inventories, now owned or
hereafter acquired by a Grantor.
"General Intangibles" means any "general intangibles," as
such term is defined in Section 9-106 of the Uniform Commercial Code,
now owned or hereafter acquired by a Grantor and, in any event,
includes all customer lists, trademarks, patents, rights in
intellectual property, licenses, permits, copyrights, trade secrets,
proprietary or confidential information, inventions (whether patented
or patentable or not) and technical
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information, procedures, designs, knowledge, know-how, software, data
bases, data, skill, expertise, experience, processes, models,
drawings, materials and records, goodwill, rights of indemnification
and all right, title and interest which such Grantor may now or
hereafter have in or under any contract, now owned or hereafter
acquired by such Grantor.
"Instrument" means any "instrument," as such term is defined
in Section 9-105(1)(i) of the Uniform Commercial Code, now owned or
hereafter acquired by a Grantor.
"Inventory" means any "inventory," as such term is defined
in Section 9-109(4) of the Uniform Commercial Code, now owned or
hereafter acquired by a Grantor, and wherever located, and, in any
event, includes all inventory, merchandise, goods and other personal
property now owned or hereafter acquired by such Grantor which are
held for sale or lease or are furnished or are to be furnished under a
contract of service or which constitute raw materials, work in process
or materials used or consumed or to be used or consumed in such
Grantor's business, or the processing, packaging, delivery or shipping
of the same, and all finished goods.
"Proceeds" means "proceeds," as such term is defined in
Section 9-306(1) of the Uniform Commercial Code, and, in any event,
shall include (i) any and all proceeds of any insurance, indemnity,
warranty or guaranty payable to a Grantor from time to time with
respect to any of the Collateral, (ii) any and all payments (in any
form whatsoever) made or due and payable to a Grantor from time to
time in connection with any requisition, confiscation, condemnation,
seizure or forfeiture of all or any part of the Collateral by any
Governmental Authority (or any Person acting under color of
Governmental Authority), and (iii) any and all other amounts from time
to time paid or payable under or in connection with any of the
Collateral.
2. Grant of Security Interest.
(a) As collateral security for the full and prompt payment when due
(whether at stated maturity, by acceleration or otherwise) of, and the
performance of, all of the Secured Obligations for which it is responsible and
to induce the Lenders to make the Loans and the Issuer to issue the Letters of
Credit pursuant to the Credit Agreement, each Grantor hereby assigns, conveys,
mortgages, pledges, hypothecates and transfers to the Administrative Agent, on
behalf and for the ratable benefit of the Secured Parties, and hereby grants to
the Administrative Agent, on behalf and for the ratable benefit of the Secured
Parties, a security interest in, all of such Grantor's right, title and interest
in, to
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and under the following (all of which being hereinafter collectively called the
"Collateral"):
(i) all Inventory;
(ii) all Accounts;
(iii) all General Intangibles that relate to Inventory;
(iv) all of the rights (but none of the obligations) owed to
the Borrower by National Steel Funding Corporation under the
Receivables Sale Agreement, including each Instrument evidencing any
of the same;
(v) all the rights (but none of the obligations) owed to NSPC
by the Borrower under Contractual Obligations for the sale of goods by
NSPC to the Borrower, including each Instrument evidencing any of the
same;
(vi) the Cash Collateral Account including all funds and other
property held therein; and
(vii) to the extent not otherwise included, all Proceeds of each
of the foregoing and all accessions to, substitutions and replacements
for, and rents, profits and products of, each of the foregoing,
including Proceeds in the form of Accounts, Chattel Paper, Contractual
Obligations, General Intangibles and Instruments.
(b) As further collateral security for the prompt and complete
payment when due of the Secured Obligations, each Secured Party is hereby
granted a lien and security interest in all property of a Grantor held by such
Secured Party or any Affiliate of such Secured Party, including all property of
every description, now or hereafter in the possession or custody of or in
transit to such Secured Party for any purpose, including safekeeping, collection
or pledge, for the account of the Grantor, or as to which a Grantor may have any
right or power.
(c) Notwithstanding the foregoing but subject to the provisions of
Section 2(d) of this Agreement, the Lien provided for herein on any Account,
including an Account and related item of Collateral that is Proceeds of
Inventory, shall automatically be released without the need for any action on
the part of the Administrative Agent upon the sale to NSFC of such Account and
related item of Collateral by the Borrower pursuant to the Receivables Sale
Agreement.
(d) Upon the occurrence of the earliest of:
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(i) an Event of Default specified in clause (i) of Section 9.1
of the Credit Agreement (and without any further act or notice), or
(ii) the giving by the Administrative Agent of notice to the
Borrower that an Event of Default under clause (a), (b), (c), (d) (but
only with respect to Section 4.1 or 4.2 of the Credit Agreement), (e),
(f), (g), (k) or (l) of Section 9.1 of the Credit Agreement has
occurred and is continuing
then, in such event the automatic release set forth in Section 2(c) of this
Agreement shall terminate (an "Automatic Release Termination") with respect to
all Accounts sold to NSFC subsequent to the second Business Day after the day on
which the notice referred to in clause (ii) above is given or, if an Event of
Default specified in clause (i) of Section 9.1 of the Credit Agreement has
occurred, subsequent to the day after which such Event of Default occurs.
3. Rights of the Secured Parties; Limitations on Secured Parties'
Secured Obligations. With respect to Accounts, Contractual Obligations, Chattel
Paper, and Instruments constituting the Collateral:
(a) It is expressly agreed by each Grantor that, anything herein to
the contrary notwithstanding, such Grantor shall remain liable under each of the
Contractual Obligations to observe and perform all the conditions and
obligations to be observed and performed by it thereunder and such Grantor shall
perform all of its duties and obligations thereunder, all in accordance with and
pursuant to the terms and provisions of each such Contractual Obligations. None
of the Secured Parties shall have any obligation or liability under any
Contractual Obligations by reason of, or arising out of, this Agreement or the
granting of a security interest in any Contractual Obligations to the
Administrative Agent on behalf, and for the ratable benefit of, the Secured
Parties or the receipt by the Administrative Agent or any Lender of any payment
relating to any Contractual Obligations pursuant hereto, nor shall the
Administrative Agent or any Lender be required or obligated in any manner to
perform or fulfill any of the obligations of such Grantor under, or pursuant to,
any Contractual Obligations, or to make any payment, or to make any inquiry as
to the nature or the sufficiency of any payment received by it or the
sufficiency of any performance by any party to any Contractual Obligations, or
to present or file any claim, or to take any action to collect or enforce any
performance or the payment of any amounts which may have been assigned to it or
to which it may be entitled at any time or times.
(b) The Administrative Agent authorizes each Grantor to collect its
Accounts, Chattel Paper and Instruments that are Collateral, provided that such
collection is performed in a prudent and businesslike manner, and the
Administrative Agent may, upon the occurrence and during the continuance of any
Event of Default and without notice, limit or terminate said authority at any
time. If required by the Administrative
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Agent at any time during the continuance of any Event of Default, any Proceeds,
when first collected by such Grantor, received in payment of any such Account or
in payment for any of its Inventory or on account of any of its Contractual
Obligations, shall be promptly deposited by such Grantor in precisely the form
received (with all necessary endorsements) in a special bank account maintained
by the Administrative Agent and subject to withdrawal only by the Administrative
Agent, as hereinafter provided, and until so turned over shall be deemed to be
held in trust by such Grantor for and as the Administrative Agent's property and
shall not be commingled with such Grantor's other funds or properties. Such
Proceeds, when deposited, shall continue to be collateral security for all of
the Secured Obligations and shall not constitute payment thereof until applied
as hereinafter provided. The Administrative Agent shall, upon the request of the
Requisite Lenders, apply all or a part of the funds on deposit in such special
account to pay all or part of the Secured Obligations in accordance with the
provisions of Section 2.13(e) of the Credit Agreement, and any part of such
funds that the Requisite Lenders elect not to apply in such manner and to deem
not required as collateral security for the Secured Obligations shall be paid
over from time to time by the Administrative Agent to such Grantor. If an Event
of Default has occurred and is continuing, at the request of the Administrative
Agent, such Grantor shall deliver to the Administrative Agent all original and
other documents evidencing, and relating to, the sale and delivery of such
Inventory or the performance of labor or service which created such Accounts,
including all original orders, invoices and shipping receipts.
(c) The Administrative Agent may, at any time upon the occurrence and
during the continuance of any Default or Event of Default and after first
notifying the relevant Grantor of its intention to do so, notify Account Debtors
of such Grantor, parties to Contractual Obligations of such Grantor, obligors of
Instruments of such Grantor, and obligors in respect of Chattel Paper of such
Grantor that the Accounts and the right, title and interest of such Grantor in
and under such Contractual Obligations, Instruments and Chattel Paper have been
assigned to the Administrative Agent and that payments shall be made directly to
the Administrative Agent. Upon the request of the Administrative Agent, such
Grantor will so notify all such Account Debtors, parties to such Contractual
Obligations, obligors of such Instruments and obligors in respect of such
Chattel Paper. Upon the occurrence and during the continuance of an Event of
Default, the Administrative Agent may in its own name or in the name of others
communicate with such Account Debtors, parties to such Contractual Obligations,
obligors of such Instruments and obligors in respect of such Chattel Paper to
verify with such Persons to the Administrative Agent's satisfaction the
existence, amount and terms of any such Accounts or Instruments or Chattel
Paper.
(d) Upon reasonable prior notice to the relevant Grantor (unless an
Event of Default has occurred and is continuing, in which case no notice is
necessary), the Administrative Agent shall have the right to make test
verifications of the Accounts and physical verifications of the Inventory of
such Grantor in any manner and through any
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<PAGE>
medium that it considers advisable, and each Grantor agrees to furnish all such
assistance and information as the Administrative Agent may require in connection
therewith.
4. Cash Collateral Account.
(a) Dominion Over Cash Collateral Account. The Borrower acknowledges
and agrees that the Administrative Agent shall possess sole dominion and control
over the Cash Collateral Account and as long as any of the Secured Obligations
remain unpaid or all of the Commitments have not been terminated, neither the
Borrower nor any Person or entity claiming by, through or under the Borrower,
shall have any control over the use of, or any right to effect a withdrawal
from, the Cash Collateral Account. At any time other than during a Cash Dominion
Period of the Credit Agreement, the Administrative Agent agrees to disburse
funds held in the Cash Collateral Account as instructed in writing by the
Borrower.
(b) Preservation of Funds. The Borrower agrees that it will not (i)
sell or otherwise dispose of any interest in the Cash Collateral Account or any
funds held therein or (ii) create or permit to exist any Lien upon, or with
respect to, the Cash Collateral Account or any funds held therein, except as
provided in or contemplated by this Agreement.
(c) Cash Management System. Upon the Final Payment Date (under and as
defined in the Receivables Purchase Facility), the Grantors shall, and the
Borrower shall cause each of its Material Subsidiaries to, establish and
thereafter maintain until the indefeasible payment in full of the Obligations, a
cash management system, including lockboxes and concentration accounts,
satisfactory in all respects to the Administrative Agent in its sole discretion.
(d) Certain Payments to the Administrative Agent. Following notice
from the Administrative Agent that a Cash Dominion Event has occurred and until
the Administrative Agent shall have notified the Borrower of the occurrence of a
Cash Dominion Release Date, the Borrower agrees to cause the portion of
Collections that are payable to NSFC pursuant to the Program Documents (as
defined in the Receivables Purchase Facility) to be paid directly to the Cash
Collateral Account.
5. Representations and Warranties. Each Grantor hereby represents
and warrants to the Secured Parties as follows:
(a) The representations and warranties in the Credit Agreement as to
it are true and correct.
(b) Each Borrowing Base Certificate herewith or heretofore delivered
by or on behalf of such Grantor is true and correct in all material respects
regarding all Inventory of such Grantor reflected therein.
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(c) Such Grantor is the sole owner of each item of the Collateral in
which it purports to grant a security interest hereunder, having good title
thereto, free and clear of any and all Liens, except for the security interest
granted pursuant to this Agreement. No material amounts payable under or in
connection with any of its Accounts (to the extent constituting Collateral) or
any other Collateral are evidenced by Instruments which have not been delivered
to the Administrative Agent, endorsed as requested by Section 6(a) hereof. The
amounts represented by such Grantor to the Administrative Agent from time to
time as owing by an Account Debtor and by all Account Debtors in respect of the
Accounts of such Grantor will at such time be the correct amounts actually and
unconditionally owing by such Account Debtors thereunder.
(d) No effective security agreement, financing statement, equivalent
security or lien instrument or continuation statement covering all or any part
of the Collateral is on file or of record in any public office, except such as
may have been filed by such Grantor in favor of the Administrative Agent
pursuant to this Agreement.
(e) Appropriate financing statements having been filed in the
jurisdictions listed on Schedule I hereto, this Agreement is effective to create
a valid and continuing first priority Lien on and prior to all other Liens. All
action necessary or desirable to protect and perfect such security interest in
each item of the Collateral has been duly taken.
(f) Schedule II attached hereto reflects:
(i) such Grantor's exact corporate name as it appears in its
certificate of incorporation;
(ii) each other corporate name such Grantor has had since its
organization, if any, together with the date of the relevant
change;
(iii) all names (including trade names or similar appellations)
used by such Grantor or any of its divisions or other business units
at any time during the past three years;
(iv) the current location of the chief executive office of such
Grantor along with each previous location of such chief executive
office within the past three years;
(v) all places of business of such Grantor (giving street
address and county name and with notations as to whether such places
of business are owned or leased or are a bailment location); and
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(vi) to the extent not covered by clause (v) above, all
locations where such Grantor maintains or has maintained Inventory
within the past year.
(g) The locations listed on Part IIB of Schedule II attached hereto
constitute third parties who have no title or right to dispose of such Grantor's
Inventory.
6. Covenants. Each Grantor covenants and agrees with the
Administrative Agent and the Lenders that from and after the date of this
Agreement and until the Secured Obligations are fully satisfied:
(a) Further Documentation; Pledge of Instruments. At any time and from
time to time, upon the written request of the Administrative Agent, and at the
sole expense of each Grantor, such Grantor will promptly and duly execute and
deliver any and all such further instruments and documents and take such further
action as the Administrative Agent may reasonably deem desirable to obtain the
full benefits of this Agreement and of the rights and powers herein granted,
including using its best efforts to secure all consents and approvals necessary
or appropriate for the assignment to the Administrative Agent of any Contractual
Obligations (to the extent constituting part of the Collateral) held by such
Grantor or in which such Grantor has any rights not heretofore assigned, the
filing of any financing or continuation statements under the Uniform Commercial
Code with respect to the Liens and security interests granted hereby,
transferring Collateral to the Administrative Agent's possession (if a security
interest in such Collateral can be perfected by possession) and placing the
interest of the Administrative Agent as lienholder on the certificate of title
of any vehicle. Each Grantor also hereby authorizes the Administrative Agent to
file any such financing or continuation statement without the signature of such
Grantor to the extent permitted by applicable Requirements of Law. If any of the
Collateral shall be or become evidenced by any Instrument, each Grantor agrees
to pledge such Instrument to the Administrative Agent and shall duly endorse
such Instrument in a manner satisfactory to the Administrative Agent and deliver
the same to the Administrative Agent; provided, however, that the Borrower shall
not be required to deliver the Parent Note (as defined in the Receivables
Purchase Agreement) except at the request of the Administrative Agent made
during a Cash Dominion Period and the Administrative Agent shall be required to
redeliver such Parent Note at the request of the Borrower made at any time
thereafter that is not during a subsequent Cash Dominion Period.
(b) Maintenance of Records. Each Grantor will keep and maintain at its
own cost and expense satisfactory and complete records of the Collateral,
including a record of all payments received and all credits granted with respect
to the Collateral and all other dealings with the Collateral. Each Grantor will
mark its books and records pertaining to the Collateral to evidence this
Agreement and the Lien and security interests granted hereby. If requested by
the Administrative Agent, all Chattel Paper that is Collateral will be marked
with the following legend: "This writing and the obligations
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evidenced or secured hereby are subject to the security interest of Citicorp
USA, Inc., as the Administrative Agent." If requested by the Administrative
Agent, the security interest of the Administrative Agent shall be noted on the
certificate of title of each vehicle that is Collateral. For the Administrative
Agent's and the Lenders' further security, each Grantor agrees that, upon the
occurrence and during the continuance of any Event of Default, each Grantor
shall deliver and turn over all of such Grantor's books and records pertaining
to the Collateral to the Administrative Agent or to its representatives at any
time on demand of the Administrative Agent. Prior to the occurrence of an Event
of Default and upon reasonable notice from the Administrative Agent, each
Grantor shall permit any representative of the Administrative Agent to inspect
such books and records and will provide photocopies thereof to the
Administrative Agent all in accordance with the provisions of the Credit
Agreement.
(c) Indemnification. In any Legal Proceeding brought by the
Administrative Agent or any Lender relating to any Account, Chattel Paper,
General Intangible or Instrument constituting Collateral for any sum owing
thereunder, or to enforce any provision of any such Account, Chattel Paper,
General Intangible or Instrument, each Grantor will save, indemnify and keep
each of the Administrative Agent and the Lenders harmless from and against all
expense, loss or damage suffered by reason of any defense, set-off,
counterclaim, recoupment or reduction of liability whatsoever of the obligor
thereunder, arising out of a breach by such Grantor of any obligation thereunder
or arising out of any other agreement, Indebtedness or liability at any time
owing to, or in favor of, such obligor or its successors from such Grantor, and
all such obligations of such Grantor shall be and remain enforceable against and
only against such Grantor and shall not be enforceable against the
Administrative Agent or the Lenders.
(d) Compliance with Laws, Etc. Each Grantor will comply, in all
material respects, with all Requirements of Law of any Governmental Authority,
applicable to the Collateral or any part thereof or to the operation of such
Grantor's business; provided, however, that such Grantor may contest any
Requirement of Law in any reasonable manner which shall not, in the sole opinion
of the Administrative Agent, adversely affect the Administrative Agent's rights
hereunder or adversely affect the first priority of its Lien on and security
interest in the Collateral.
(e) Payment of Obligations. Each Grantor will pay promptly when due
all taxes, assessments and governmental charges or levies imposed upon the
Collateral or in respect of its income or profits therefrom and all claims of
any kind (including claims for labor, materials and supplies), except that no
such charge need be paid if (i) such non-payment does not involve any danger of
the sale, forfeiture or loss of any of the Collateral or any interest therein
and (ii) such charge is adequately reserved against in accordance with and to
the extent required by GAAP.
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(f) Compliance with Terms of Accounts, Etc. In all material respects,
each Grantor will comply with and perform with all obligations, covenants,
conditions and agreements with respect to any Account, Chattel Paper,
Contractual Obligations, License and all other agreements to which it is a party
or by which it is bound (to the extent constituting Collateral).
(g) Limitation on Liens on Collateral. No Grantor will create, permit
or suffer to exist, and each Grantor will defend the Collateral against and take
such other action as is necessary to remove, any Lien on the Collateral, and
will defend the right, title and interest of the Administrative Agent and the
Lenders in and to any of such Grantor's rights under the Chattel Paper,
Contractual Obligations, Documents, General Intangibles and Instruments (to the
extent constituting Collateral) and to the Inventory and in and to the Proceeds
thereof against the claims and demands of all Persons whomsoever.
(h) Limitations on Modifications of Accounts. Upon the occurrence and
during the continuance of any Event of Default, no Grantor will, without the
Administrative Agent's prior written consent, grant any extension of the time of
payment of any of the Accounts, Chattel Paper or Instruments that are Collateral
or compromise, compound or settle the same for less than the full amount
thereof, or release, wholly or partly, any Person liable for the payment
thereof, or allow any credit or discount whatsoever thereon.
(i) Maintenance of Insurance. Each Grantor will maintain, with
financially sound and reputable companies, insurance policies (i) insuring its
Inventory against loss by fire, explosion, theft and such other casualties as
are usually insured against by companies engaged in the same or similar
businesses and (ii) insuring such Grantor and the Administrative Agent and each
Secured Party against liability for personal injury and property damage relating
to such Inventory, such policies to be in such amounts and against at least such
risks as are usually insured against in the same general area by companies
engaged in the same or a similar business, naming the Administrative Agent as an
additional insured with a lender loss payable clause in favor of the
Administrative Agent on behalf and for the ratable benefit of the Secured
Parties. Each Grantor shall, if so requested by the Administrative Agent,
deliver to the Administrative Agent as often as the Administrative Agent may
reasonably request, a report of a reputable insurance broker satisfactory to the
Administrative Agent with respect to the insurance on such Inventory. All
insurance with respect to such Inventory shall (i) contain a clause which
provides that the Secured Parties' interest under the policy will not be
invalidated by any act or omission of, or any breach of warranty by, the
insured, or by any change in the title, ownership or possession of the insured
property, or by the use of the property for purposes more hazardous than is
permitted in the policy and (ii) provide that no cancellation, reduction in
amount or change in coverage thereof shall
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be effective until at least ten (10) days after receipt by the Administrative
Agent of written notice thereof.
(j) Limitations on Disposition. No Grantor will sell, lease, transfer
or otherwise dispose of any of the Collateral, or attempt or contract to do so,
except as permitted by the Credit Agreement.
(k) Further Identification of Collateral. Each Grantor will, if so
requested by the Administrative Agent, furnish to the Administrative Agent, as
often as the Administrative Agent reasonably requests, statements and schedules
further identifying and describing the Collateral and such other reports in
connection with the Collateral as the Administrative Agent may reasonably
request, all in reasonable detail.
(l) Notices. Each Grantor will advise the Administrative Agent
promptly, in reasonable detail, (i) of any material Lien or claim made or
asserted against any of the Collateral, (ii) of any material change in the
composition of the Collateral and (iii) of the occurrence of any other event
which would have a material adverse effect on the aggregate value of the
Collateral or in the security interests created hereunder.
(m) Right of Inspection. Upon reasonable notice to the relevant
Grantor (unless an Event of Default has occurred and is continuing, in which
case no notice is necessary), the Administrative Agent shall at all times have
full and free access during normal business hours to all the books and records
and correspondence of such Grantor, and the Administrative Agent or its
representatives may examine the same, take extracts therefrom and make
photocopies thereof, and such Grantor agrees to render to the Administrative
Agent, at such Grantor's cost and expense after an Event of Default has occurred
and is continuing, such clerical and other assistance as may be reasonably
requested with regard thereto. Upon reasonable notice to the relevant Grantor
(unless an Event of Default has occurred and is continuing, in which case no
notice is necessary), the Administrative Agent and its representatives shall
also have the right to enter into and upon any premises where any of the
Inventory is located for the purpose of inspecting the same, observing its use
or otherwise protecting its interests therein.
(n) Continuous Perfection. No Grantor will change its name, identity
or corporate structure in any manner which might make any financing or
continuation statement filed in connection herewith seriously misleading within
the meaning of Section 9-402(7) of the Uniform Commercial Code (or any other
then applicable provision of the Uniform Commercial Code) unless such Grantor
shall have given the Administrative Agent at least thirty (30) days' prior
written notice thereof and shall have taken all action (or made arrangements to
take such action substantially simultaneously with such change if it is
impossible to take such action in advance) necessary or reasonably requested by
the Administrative Agent to amend such financing statement or continuation
statement so that it is not seriously misleading. No Grantor will change its
principal place of business or remove its records or change the location of its
Inventory,
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each as set forth on Schedule II attached hereto, unless it gives the
Administrative Agent at least thirty (30) days' prior written notice thereof and
has taken such action as is necessary to cause the security interest of the
Administrative Agent in the Collateral to continue to be perfected; provided,
however, that the Borrower may without notice to the Administrative Agent other
than as set forth in a Borrower Base Certificate change the location of
Inventory at bailee and outside processor locations.
7. The Administrative Agent's Appointment as Attorney-in-Fact.
(a) Each Grantor hereby irrevocably constitutes and appoints the
Administrative Agent and any officer or agent thereof, with full power of
substitution, as its true and lawful attorney-in-fact with full irrevocable
power and authority in the place and stead of such Grantor and in the name of
such Grantor or in its own name, from time to time in the Administrative Agent's
discretion, for the purpose of carrying out the terms of this Agreement, to take
any and all appropriate action and to execute and deliver any and all documents
and instruments which the Administrative Agent may deem necessary or desirable
to accomplish the purposes of this Agreement and, without limiting the
generality of the foregoing, hereby gives the Administrative Agent the power and
right, on behalf of such Grantor, without notice to or assent by such Grantor to
do the following:
(i) to ask, demand, collect, receive and give acquittances
and receipts for any and all moneys due and to become due under
any Collateral and, in the name of such Grantor or in its own
name or otherwise, to take possession of and endorse and collect
any checks, drafts, notes, acceptances or other Instruments for
the payment of moneys due under any Collateral and to file any
claim or to take any other action or proceeding in any court of
law or equity or otherwise deemed appropriate by the
Administrative Agent for the purpose of collecting any and all
such moneys due under any Collateral whenever payable and to file
any claim or to take any other action or proceeding in any court
of law or equity or otherwise deemed appropriate by the
Administrative Agent for the purpose of collecting any and all
such moneys due under any Collateral whenever payable;
(ii) to pay or discharge taxes, Liens, security interests
or other encumbrances levied or placed on or threatened against
the Collateral, to effect any repairs or any insurance called for
by the terms of this Agreement and to pay all or any part of the
premiums therefor and the costs thereof; and
(iii) (A) to direct any party liable for any payment under
any of the Collateral to make payment of any and all moneys due,
and to become due thereunder, directly to the Administrative
Agent or as the
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<PAGE>
Administrative Agent shall direct; (B) to receive payment of
and receipt for any and all moneys, claims and other amounts
due, and to become due at any time, in respect of or arising
out of any Collateral; (C) to sign and endorse any invoices,
freight or express bills, bills of lading, storage or
warehouse receipts, drafts against debtors, assignments,
verifications, and notices in connection with Accounts and
other Documents constituting or relating to the Collateral;
(D) to commence and prosecute any suits, actions or
proceedings at law or in equity in any court of competent
jurisdiction to collect the Collateral or any part thereof
and to enforce any other right in respect of any Collateral;
(E) to defend any suit, action or proceeding brought against
such Grantor with respect to any Collateral; (F) to settle,
compromise or adjust any suit, action or proceeding
described above and, in connection therewith, to give such
discharges or releases as the Administrative Agent may deem
appropriate; (G) to license or, to the extent permitted by
an applicable license, sublicense, whether general, special
or otherwise, and whether on an exclusive or non-exclusive
basis, any patent or trademark, throughout the world for
such term or terms, on such conditions, and in such manner,
as the Administrative Agent shall in its sole discretion
determine; and (H) generally to sell, transfer, pledge, make
any agreement with respect to or otherwise deal with any of
the Collateral as fully and completely as though the
Administrative Agent were the absolute owner thereof for all
purposes, and to do, at the Administrative Agent's option
and such Grantor's expense, at any time, or from time to
time, all acts and things which the Administrative Agent
reasonably deems necessary to protect, preserve or realize
upon the Collateral and the Administrative Agent's and the
Lenders' Lien therein, in order to effect the intent of this
Agreement, all as fully and effectively as such Grantor
might do.
(b) The Administrative Agent agrees that, except upon the
occurrence and during the continuance of an Event of Default, it will forbear
from exercising the power of attorney or any rights granted to the
Administrative Agent pursuant to this Section 7. Each Grantor hereby ratifies,
to the extent permitted by law, all that any said attorney shall lawfully do or
cause to be done by virtue hereof. The power of attorney granted pursuant to
this Section 7, being coupled with an interest, shall be irrevocable until the
Secured Obligations are indefeasibly paid in full.
(c) The powers conferred on the Administrative Agent
hereunder are solely to protect the Administrative Agent's and the Lenders'
interests in the Collateral and shall not impose any duty upon it to exercise
any such powers. The Administrative Agent shall be accountable only for amounts
that it actually receives as a result of the exercise of such powers and neither
it nor any of its officers, directors, employees or
14
<PAGE>
agents shall be responsible to any Grantor for any act or failure to act, except
for its own gross negligence or willful misconduct.
(d) Each Grantor also authorizes the Administrative Agent,
at any time and from time to time upon the occurrence and during the continuance
of an Event of Default, (i) to communicate in its own name with any party to any
Contractual Obligations with regard to the assignment of the right, title and
interest of such Grantor in and under the Contractual Obligations hereunder and
other matters relating thereto and (ii) to execute, in connection with the sale
provided for in Section 9 hereof, any endorsements, assignments or other
instruments of conveyance or transfer with respect to the Collateral.
8. Performance by the Administrative Agent of Each
Grantor's Secured Obligations. If any Grantor fails to perform or comply with
any of its agreements contained herein and the Administrative Agent, as provided
for by the terms of this Agreement, shall itself perform or comply, or otherwise
cause performance or compliance, with such agreement, the reasonable expenses of
the Administrative Agent incurred in connection with such performance or
compliance, together with interest thereon at the highest rate then in effect in
respect of the Loans, shall be payable by such Grantor to the Administrative
Agent on demand and shall constitute Secured Obligations secured hereby.
9. Remedies, Rights Upon an Event of Default.
(a) If an Event of Default shall occur and be continuing,
the Administrative Agent may, and shall at the request of the Requisite Lenders,
exercise in addition to all other rights and remedies granted to it in this
Agreement and in any other instrument or agreement securing, evidencing or
relating to the Secured Obligations, all rights and remedies of a secured party
under the Uniform Commercial Code. Without limiting the generality of the
foregoing, each Grantor expressly agrees that in any such event the
Administrative Agent, without demand of performance or other demand,
advertisement or notice of any kind (except the notice specified below of time
and place of public or private sale) to or upon such Grantor or any other Person
(all and each of which demands, advertisements and/or notices are hereby
expressly waived to the maximum extent permitted by the Uniform Commercial Code
and other applicable law), may forthwith collect, receive, appropriate and
realize upon the Collateral, or any part thereof, and/or may forthwith sell,
lease, assign, give an option or options to purchase, or sell or otherwise
dispose of and deliver said Collateral (or contract to do so), or any part
thereof, in one or more parcels at public or private sale or sales, at any
exchange or broker's board or any of the Administrative Agent's offices or
elsewhere at such prices as it may deem best, for cash or on credit or for
future delivery without assumption of any credit risk. The Administrative Agent
or any Lender shall have the right upon any such public sale or sales, and, to
the extent permitted by law, upon any such private sale or sales, to purchase
the whole or any part of said Collateral so sold, free of any right or
15
<PAGE>
equity of redemption, which equity of redemption such Grantor hereby releases to
the fullest extent permitted by law. Each Grantor further agrees, at the
Administrative Agent's request to assemble the Collateral and make it available
to the Administrative Agent at places which the Administrative Agent shall
reasonably select, whether at such Grantor's premises or elsewhere. The
Administrative Agent shall apply the net proceeds of any such collection,
recovery receipt, appropriation, realization or sale, as provided in Section
9(d) hereof, each Grantor remaining liable for any deficiency remaining unpaid
after such application, and only after so paying over such net proceeds and
after the payment by the Administrative Agent of any other amount required by
any provision of law, including Section 9-504(1)(c) of the Uniform Commercial
Code, need the Administrative Agent account for the surplus, if any, to such
Grantor. To the maximum extent permitted by applicable law, each Grantor waives
all claims, damages, and demands against the Secured Parties arising out of the
repossession, retention or sale of the Collateral. Each Grantor agrees that the
Administrative Agent need not give more that ten (10) days' notice of the time
and place of any public sale or of the time after which a private sale may take
place and that such notice is reasonable notification of such matters. Each
Grantor shall remain liable for any deficiency if the proceeds of any sale or
disposition of the Collateral are insufficient to pay all amounts to which the
Secured Parties are entitled, such Grantor also being liable for the fees and
expenses of any attorneys employed by the Administrative Agent and the Lenders
to collect such deficiency.
(b) Each Grantor also agrees to pay all costs of the
Administrative Agent and the Lenders, including attorneys' fees, incurred in
connection with the enforcement of any of its rights and remedies hereunder.
(c) Each Grantor hereby waives presentment, demand, protest
or any notice (to the maximum extent permitted by applicable law) of any kind in
connection with this Agreement or any Collateral.
(d) Any cash held by the Administrative Agent as part of
the Collateral and all cash proceeds received by the Administrative Agent in
respect of any sale of, collection from, or other realization upon all or any
part of the Collateral shall be applied by the Administrative Agent as provided
in Section 2.13(e) of the Credit Agreement.
10. Limitation on the Secured Parties' Duty in Respect of
Collateral. No Secured Party shall have any duty as to any Collateral in its
possession or control or in the possession or control of any agent or nominee of
it or any income thereon or as to the preservation of rights against prior
parties or any other rights pertaining thereto, except that each Secured Party
shall use reasonable care with respect to the Collateral in its possession or
under its control. Upon request of the relevant Grantor, the Administrative
Agent shall account for any moneys received by it in respect of any foreclosure
on or disposition of the Collateral.
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<PAGE>
11. Notices. All notices and other communications under
this Agreement shall be in writing and shall be deemed given when delivered
personally or mailed by certified mail, return receipt requested, to the parties
hereto (and shall also be transmitted by facsimile to the Persons receiving
copies thereof) at the following addresses (or to such other address as a party
may have specified by notice given to the other party pursuant to this
provision) or sent by electronic transmission (with answerback confirmation
received) to the facsimile numbers specified below:
If to either of the Grantors, to:
National Steel Corporation
4100 Edison Lakes Parkway
Mishawaka, IN 46545-3440
Fax: (219) 273 - 7478
Attn: William E. McDonough
With a copy to:
Ronald J. Wehrnyak, Esq.
(at the same address)
If to the Administrative Agent, to:
Citicorp USA, Inc.
Attn: Keith R. Karako
399 Park Avenue, 6/th/ Floor
New York, NY 10043
Fax: (212) 793 - 1290
With a copy to:
Weil, Gotshal & Manges LLP
Attn: Ronald Daitz, Esq.
767 Fifth Avenue
New York, NY 10153-0119
Fax: (212) 310 - 8007
12. Successors and Assigns. This Agreement and all
obligations of each Grantor hereunder shall be binding upon the successors and
assigns of such Grantor, and shall, together with the rights and remedies of the
Administrative Agent hereunder, inure to the benefit of the Administrative
Agent, the Lenders, and their respective successors and assigns.
17
<PAGE>
13. Governing Law. This Agreement shall be governed by,
and be construed and interpreted in accordance with, the law of the State of New
York. Wherever possible, each provision of this Agreement shall be interpreted
in such manner as to be effective and valid under applicable law, but if any
provision of this Agreement shall be prohibited by or invalid under applicable
law, such provision shall be ineffective only to the extent of such prohibition
or invalidity and without invalidating the remaining provisions of this
Agreement.
14. Entire Agreement; Amendments and Waivers. This
Agreement (together with the Credit Agreement and any agreement, instrument,
certificate or other document to be executed as contemplated hereby) represents
the entire understanding and agreement between the parties hereto with respect
to the subject matter hereof, supersedes any other prior oral or written
contracts between the parties hereto with respect to the subject matter hereof
(and any such prior contracts are hereby terminated and of no further force and
effect) and can be amended, supplemented or changed, and any provision hereof
can be waived, only by written instrument making specific reference to this
Agreement executed by the party against whom enforcement of any such amendment,
supplement, modification or waiver is sought. No action taken pursuant to this
Agreement, including any investigation by or on behalf of any party, shall be
deemed to constitute a waiver by the party taking such action of compliance with
any representation, warranty, covenant or agreement contained herein. The waiver
by any party hereto of a breach of any provision of this Agreement shall not
operate or be construed as a further or continuing waiver of such breach or as a
waiver of any other or subsequent breach. No failure on the part of any party to
exercise, and no delay in exercising, any right, power or remedy hereunder shall
operate as a waiver thereof, nor shall any single or partial exercise of such
right, power or remedy by such party preclude any other or further exercise
thereof or the exercise of any other right, power or remedy. All remedies
hereunder are cumulative and are not exclusive of any other remedies provided by
law.
15. Table of Contents and Headings. The table of contents
and section headings of this Agreement are for reference purposes only and are
to be given no effect in the construction or interpretation of this Agreement;
provided, however, that headings may be used for cross-reference purposes and,
when used as such, shall prevail over an inconsistent reference to a section
number.
16. Construction and Interpretation. This Agreement is
governed by certain rules of construction and interpretation set forth in
Sections 1.3(a), 1.3(b), 1.3(c), 1.3(e), 1.3(f), 1.4, 1.5 and 1.6 of the Credit
Agreement, which are hereby incorporated herein and made an integral part
hereof. The parties hereto acknowledge and agree that they have participated
jointly in the negotiation and drafting of this Agreement. In the event an
ambiguity or question of intent or interpretation arises, this Agreement shall
be construed as if drafted jointly by the parties hereto and no presumption or
burden of proof
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<PAGE>
shall arise favoring or disfavoring any party by virtue of the authorship of any
of the provisions of this Agreement.
17. Further Indemnification. Each Grantor agrees to pay,
and to save the Administrative Agent and each Lender harmless from, any and all
liabilities with respect to, or resulting from any delay in paying, any and all
excise, sales or other similar taxes which may be payable or determined to be
payable with respect to any of the Collateral or in connection with any of the
transactions contemplated by this Agreement.
18. Severability. Any term or provision of this Agreement
that is held invalid, illegal or unenforceable as to any Person in any situation
in any jurisdiction shall not affect the validity, enforceability or legality of
the remaining terms and provisions hereof or the validity, enforceability or
legality of the offending term or provision in any other situation, in any other
jurisdiction or as applied to any other Person.
19. Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed to be an original, but all of
which taken together shall constitute one and the same instrument. Such
execution shall be effective when one or more such counterparts shall have been
executed by each of the parties hereto and at least one of each such counterpart
shall have been delivered to each of the other parties hereto.
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<PAGE>
In Witness Whereof, each Grantor has caused this Agreement
to be executed and delivered by its duly authorized officer on the date first
above written.
National Steel Corporation
By:_________________________
Name:
Title:
National Steel Pellet Company
By:_________________________
Name:
Title:
Accepted and acknowledged:
Citicorp USA, Inc.,
as Administrative Agent
By: _____________________________
Name:
Title:
20
<PAGE>
Table of Contents
<TABLE>
<CAPTION>
Page
<S> <C>
1. Defined Terms........................................................ 1
2. Grant of Security Interest........................................... 3
3. Rights of the Secured Parties; Limitations on Secured Parties'
Secured Obligations.................................................. 5
4. Cash Collateral Account.............................................. 6
5. Representations and Warranties....................................... 7
6. Covenants............................................................ 9
7. The Administrative Agent's Appointment as Attorney-in-Fact........... 13
8. Performance by the Administrative Agent of Each Grantor's Secured
Obligations.......................................................... 15
9. Remedies, Rights Upon an Event of Default............................ 15
10. Limitation on the Secured Parties' Duty in Respect of Collateral..... 16
11. Notices.............................................................. 16
12. Successors and Assigns............................................... 17
13. Governing Law........................................................ 17
14. Entire Agreement; Amendments and Waivers............................. 18
15. Table of Contents and Headings....................................... 18
16. Construction and Interpretation...................................... 18
17. Further Indemnification.............................................. 18
18. Severability......................................................... 19
19. Counterparts......................................................... 19
</TABLE>
i
<PAGE>
Exhibit E
Form of
Pledge Agreement
Pledge Agreement, dated November __, 1999 (this "Pledge Agreement"),
made by National Steel Corporation, a Delaware corporation (the "Borrower"), to
Citicorp USA, Inc., as agent for the Lenders and Issuers party to the Credit
Agreement referred to below (in such capacity, the "Administrative Agent").
W i t n e s s e t h:
Whereas, the Borrower is party to a Credit Agreement dated as of
November 19, 1999, with the financial institutions and other entities from time
to time party thereto as a Lender or Issuer and Citicorp USA, Inc. as agent for
the Lenders and Issuers, (in such capacity, the "Administrative Agent") and Fuji
Bank, Limited as Syndication Agent for the Lenders and Issuers (in such
capacity, the "Syndication Agent") (as amended or otherwise modified from time
to time, the "Credit Agreement"; capitalized terms used herein but not defined
herein are used herein as defined in the Credit Agreement); and
Whereas, the Borrower is the legal and beneficial owner of the shares
of capital stock described in Schedule I hereto (collectively, the "Pledged
Shares"); and
Whereas, it is a condition precedent under the Credit Agreement to the
making of the Loans and the issuance of Letters of Credit that the Borrower
shall have made the pledge contemplated by this Pledge Agreement;
Now, Therefore, in consideration of the premises and to induce the
Lenders to make the Loans and the Issuers to issue Letters of Credit, the
Borrower hereby agrees with the Administrative Agent on behalf and for the
benefit of the Secured Parties as follows:
1. Pledge. The Borrower hereby pledges to the Administrative Agent on
behalf and for the ratable benefit of the Secured Parties, and grants to the
Administrative Agent on behalf and for the ratable benefit of the Secured
Parties a security interest in, the Borrower's interest in the following
(collectively, the "Pledged Collateral"):
(i) all of the Pledged Shares;
(ii) all additional shares of stock or other securities of any
issuer of the Pledged Shares from time to time acquired by the
Borrower (any such shares being "Additional Shares");
(iii) the certificates representing the shares referred to in
clauses (i) and (ii) above;
<PAGE>
(iv) all dividends, cash, interest, instruments and other
property or proceeds, from time to time received, receivable or
otherwise distributed in respect of or in exchange for any or all of
the foregoing.
2. Security For Obligations. The Pledged Collateral is security for
the full and prompt payment when due (whether at stated maturity, by
acceleration or otherwise) of, and the performance of, the Obligations whether
now or hereafter existing and whether for principal, interest, fees, expenses or
otherwise.
3. Delivery Of Pledged Collateral. All certificates or instruments
representing or evidencing the Pledged Collateral shall be delivered to and held
by or on behalf of the Administrative Agent pursuant hereto and shall be in
suitable form for transfer by delivery, or shall be accompanied by duly executed
instruments of transfer or assignment in blank, all in form and substance
satisfactory to the Administrative Agent. The Administrative Agent shall have
the right, at any time after the occurrence and during the continuance of a
Default or an Event of Default, in its discretion and without notice to the
Borrower, to transfer to or to register in its name or in the name of any of its
nominees any or all of the Pledged Collateral. In addition, the Administrative
Agent shall have the right at any time to exchange certificates or instruments
representing or evidencing any of the Pledged Collateral for certificates or
instruments of smaller or larger denominations.
4. Representations And Warranties. The Borrower makes the following
representations:
(a) The Pledged Shares (i) have been duly authorized and validly
issued; (ii) are fully paid and non-assessable; and (iii) constitute all of the
issued and outstanding shares of stock of the respective issuers thereof.
(b) The Borrower is the legal and beneficial owner of the Pledged
Collateral relating to it, free and clear of any Lien or Encumbrances.
(c) The pledge of the Pledged Shares pursuant to this Pledge Agreement
creates a valid and perfected first priority security interest in the Pledged
Collateral, in favor of the Administrative Agent on behalf and for the ratable
benefit of the Secured Parties securing the payment of all of the Obligations.
(d) No consent, authorization, approval, or other action by, and no
notice to or filing with, any Governmental Authority is required either (i) for
the pledge by it of the Pledged Collateral relating to it pursuant to this
Pledge Agreement or for the due execution, delivery or performance of this
Pledge Agreement by it, or (ii) for the exercise by the Administrative Agent of
the voting or other rights provided for in this Pledge Agreement or of the
remedies in respect of the Pledged Collateral relating to it pursuant to this
Pledge Agreement, except as may be required in connection with the disposition
of
2
<PAGE>
the Pledged Collateral relating to it by laws affecting the offering and sale
of securities generally.
5. Further Assurances, Etc.
(a) The Borrower agrees that at any time and from time to time, at its
cost and expense, it will promptly execute and deliver all further instruments
and documents, and take all further action, that may be necessary or desirable,
or that the Administrative Agent may reasonably request, in order to perfect and
protect the Lien granted or purported to be granted hereby or to enable the
Administrative Agent to exercise and enforce its rights and remedies hereunder
with respect to any of the Pledged Collateral relating to it.
(b) The Borrower agrees to defend its title to the Pledged Collateral
relating to it and the Lien thereon of the Administrative Agent against the
claim of any other Person and to maintain and preserve such Lien until
indefeasible payment in full of all of the Obligations.
6. Voting Rights; Dividends; Etc.
(a) As long as no Default or Event of Default shall have occurred and
be continuing (or, in the case of this Section 6(a)(i), as long as no notice
thereof shall have been given by the Administrative Agent to the Borrower):
(i) The Borrower shall be entitled to exercise any and all
voting and other consensual rights pertaining to the Pledged
Collateral or any part thereof for any purpose not inconsistent with
the terms of this Pledge Agreement or any other Loan Document;
provided, however, that the Borrower shall not exercise or shall
refrain from exercising any such right if, in the Administrative
Agent's judgment, such action would have a material adverse effect on
the value of the Pledged Collateral or any part thereof.
(ii) The Borrower shall be entitled to receive and retain any
and all dividends and interest paid in respect of the Pledged
Collateral, other than any and all:
(A) dividends and interest paid or payable other than in
cash in respect of, and instruments and other property received,
receivable or otherwise distributed in respect of, or in exchange
for, any Pledged Collateral,
(B) dividends and other distributions paid or payable in
cash in respect of any Pledged Shares or Additional Pledged
3
<PAGE>
Shares in connection with a partial or total liquidation or
dissolution or in connection with a reduction of capital,
capital surplus or paid-in-surplus, and
(C) cash paid, payable or otherwise distributed in
redemption of, or in exchange for, any Pledged Collateral;
all of which shall be forthwith delivered to the Administrative Agent to
hold as Pledged Collateral and shall, if received by the Borrower, be
received in trust for the benefit of the Administrative Agent, be
segregated from the other property or funds of the Borrower, and be
forthwith delivered to the Administrative Agent as Pledged Collateral in
the same form as so received (with any necessary endorsement).
(iii) The Administrative Agent shall execute and deliver (or
cause to be executed and delivered) to the Borrower all such proxies
and other instruments as the Borrower may reasonably request for the
purpose of enabling the Borrower to exercise the voting and other
rights which it is entitled to exercise pursuant to paragraph (i)
above and to receive the dividends or interest payments which it is
authorized to receive and retain pursuant to paragraph (ii) above.
(b) Upon the occurrence and during the continuance of a Default or an
Event of Default:
(i) Upon notice by the Administrative Agent to the Borrower,
all rights of the Borrower to exercise the voting and other consensual
rights which it would otherwise be entitled to exercise pursuant to
paragraph of Section 6(a)(i) above shall cease, and all such rights
shall thereupon become vested in the Administrative Agent who shall
thereupon have the sole right to exercise such voting and other
consensual rights.
(ii) All rights of the Borrower to receive the dividends and
other payments which it would otherwise be authorized to receive and
retain pursuant to Section 6(a)(ii) above shall cease, and all such
rights shall thereupon become vested in the Administrative Agent who
shall thereupon have the sole right to receive and hold as Pledged
Collateral such dividends and other payments.
(iii) All dividends and other payments which are received by the
Borrower contrary to the provisions of Section 6(b)(ii) shall be
received in trust for the benefit of the Administrative Agent, shall
be segregated from other funds of the Borrower and shall be forthwith
paid
4
<PAGE>
over to the Administrative Agent as Pledged Collateral in the
same form as so received (with any necessary endorsement).
(iv) The Borrower shall, if necessary to permit the
Administrative Agent to exercise the voting and other rights which it
may be entitled to exercise pursuant to Section 6(b)(i) and to receive
all dividends and distributions which it may be entitled to receive
under Section 6(b)(ii), execute and deliver to the Administrative
Agent, from time to time and upon written notice of the Administrative
Agent, appropriate proxies, dividend payment orders and other
instruments as the Administrative Agent may reasonably request. The
foregoing shall not in any way limit the Administrative Agent's power
and authority granted pursuant to Section 8 (Agent Appointed Attorney-
in-Fact and Proxy) hereof.
7. Transfers And Other Liens; Additional Shares.
(a) The Borrower agrees that it will not (i) sell or otherwise
dispose of, or grant any option or warrant with respect to, any of the Pledged
Collateral relating to it, or (ii) create or permit to exist any Lien upon or
with respect to any of the Pledged Collateral relating to it, except for the
Lien created pursuant to this Pledge Agreement.
(b) The Borrower agrees that it will (i) cause each issuer of the
Pledged Shares relating to it not to issue any shares of stock or other
securities in addition to or in substitution for such Pledged Shares, except,
with the written consent of the Requisite Lenders, to the Borrower, (ii) pledge
hereunder, immediately upon its acquisition (directly or indirectly) thereof,
any and all Additional Shares, and (iii) promptly (and in any event within three
(3) Business Days) deliver to the Administrative Agent a Pledge Amendment, duly
executed by the Borrower, in substantially the form of Schedule II hereto (a
"Pledge Amendment"), in respect of the Additional Shares relating to it,
together with all certificates, notes or other instruments representing or
evidencing the same. The Borrower hereby (i) authorizes the Administrative Agent
to attach each Pledge Amendment to this Pledge Agreement, (ii) agrees that all
Additional Shares listed on any Pledge Amendment delivered to the Administrative
Agent shall for all purposes hereunder constitute Pledged Shares and (iii) shall
be deemed to have made, upon such delivery, the representations and warranties
contained in Section 4 (Representations and Warranties) hereof with respect to
such Pledged Collateral.
8. Agent Appointed Attorney-In-Fact And Proxy. The Borrower hereby
irrevocably constitutes and appoints the Administrative Agent and any officer or
agent thereof, with full power of substitution, as its true and lawful attorney-
in-fact and proxy with full irrevocable power and authority in the place and
stead of the Borrower and in the name of the Borrower or in its own name, from
time to time in the Administrative Agent's discretion after the occurrence and
during the continuance of a Default or an
5
<PAGE>
Event of Default, for the purpose of carrying out the terms of this Pledge
Agreement, to take, subject to any and all appropriate action and to execute and
deliver any and all documents and instruments which the Administrative Agent may
deem necessary or advisable to accomplish the purposes of this Pledge Agreement,
including to receive, indorse and collect all instruments made payable to the
Borrower representing any dividend or other distribution or payment in respect
of the Pledged Collateral or any part thereof, to give full discharge for the
same, and to vote or grant any consent in respect of the Pledged Shares
authorized by Section 6(b) hereof. The Borrower hereby ratifies, to the extent
permitted by law, all that any said attorney shall lawfully do or cause to be
done by virtue hereof. This power, being coupled with an interest, is
irrevocable until the Secured Obligations are paid in full.
9. Administrative Agent May Perform. If the Borrower fails to perform
any agreement contained herein, the Administrative Agent may itself perform, or
cause performance of, such agreement, and the expenses of the Administrative
Agent incurred in connection therewith shall be payable by the Borrower under
Section 12 (Expenses) hereof and constitute obligations secured hereby.
10. Reasonable Care. The Administrative Agent shall be deemed to have
exercised reasonable care in the custody and preservation of the Pledged
Collateral in its possession if the Pledged Collateral is accorded treatment
substantially equal to that which the Administrative Agent accords its own
property, it being understood that neither the Administrative Agent nor any
other Secured Party shall have responsibility for (i) ascertaining or taking
action with respect to calls, conversions, exchanges, maturities, tenders or
other matters relative to any Pledged Collateral, whether or not the
Administrative Agent or any other Secured Party has or is deemed to have
knowledge of any such matter, or (ii) taking any necessary steps to preserve
rights against any Person with respect to any Pledged Collateral.
11. Remedies Upon Default.
(a) If any Event of Default shall have occurred and be continuing:
(i) The Administrative Agent may exercise in respect of the
Pledged Collateral, in addition to other rights and remedies provided
for herein or otherwise available to it, all the rights and remedies
of a secured party after default under the Uniform Commercial Code in
effect in the State of New York (the "Code") at that time, and the
Administrative Agent may also, without notice except as specified
below, sell the Pledged Collateral or any part thereof in one or more
parcels at public or private sale, at any exchange, broker's board or
at any office of the Administrative Agent or elsewhere, for cash, on
credit or for future delivery, and upon such other terms as the
Administrative Agent may deem commercially reasonable. The Borrower
agrees that, to the extent notice of sale shall be
6
<PAGE>
required by law, at least ten (10) days' notice to the Borrower of the
time and place of any public sale or the time after which any private
sale is to be made shall constitute reasonable notification. The
Administrative Agent shall not be obligated to make any sale of
Pledged Collateral regardless of notice of sale having been given. The
Administrative Agent may adjourn any public or private sale from time
to time by announcement at the time and place fixed therefor, and such
sale may, without further notice, be made at the time and place to
which it was so adjourned. The Borrower hereby waives any claims
against the Administrative Agent arising by reason of the fact that
the price at which any Pledged Collateral may have been sold at such a
private sale was less than the price which might have been obtained at
a public sale, even if the Administrative Agent accepts the first
offer received and does not offer such Pledged Collateral to more than
one offeree.
(ii) The Borrower recognizes that the Administrative Agent may
be compelled, with respect to any sale of all or any part of the
Pledged Collateral, to limit purchasers to those who will agree, among
other things, to acquire such securities for their own account, for
investment, and not with a view to the distribution or resale thereof.
The Borrower acknowledges and agrees that any such sale may result in
prices and other terms less favorable to the seller than if such sale
were a public sale without such restrictions and, notwithstanding such
circumstances, agrees that any such sale shall be deemed to have been
made in a commercially reasonable manner. The Administrative Agent
shall be under no obligation to delay the sale of any of the Pledged
Collateral for the period of time necessary to permit the Borrower to
register such securities for public sale under the Securities Act of
1933, or under applicable state securities laws, even if the Borrower
would agree to do so.
(b) If the Administrative Agent determines to exercise its right to
sell any or all of the Pledged Collateral, upon written request, the Borrower
shall, from time to time, furnish to the Administrative Agent all such
information as the Administrative Agent may request in order to determine the
number of shares and other instruments included in the Pledged Collateral which
may be sold by the Administrative Agent as exempt transactions under the Act and
rules of the Securities Exchange Commission thereunder, as the same are from
time to time in effect.
(c) Any cash held by the Administrative Agent as Pledged Collateral
and all cash proceeds received by the Administrative Agent in respect of any
sale of, collection from, or other realization upon all or any part of the
Pledged Collateral shall be applied by the Administrative Agent as provided in
Section 2.13(e) of the Credit Agreement.
7
<PAGE>
12. Expenses. The Borrower will upon demand pay to the
Administrative Agent the amount of any and all reasonable expenses, including
the reasonable fees and expenses of the Administrative Agent's counsel and of
any experts and agents, which the Administrative Agent may incur in connection
with (i) the administration of this Pledge Agreement, (ii) the custody or
preservation of, sale of, collection from, or other realization upon, any of the
Pledged Collateral, (iii) the exercise or enforcement of any of the rights and
remedies hereunder of the Administrative Agent and the Secured Parties, or (iv)
the failure by the Borrower to perform or observe any of the provisions hereof.
13. Amendments, Etc. No amendment or waiver of any provision of this
Pledge Agreement nor consent to any departure by the Borrower herefrom shall in
any event be effective unless the same shall be in writing, approved by the
Requisite Lenders and signed by the Administrative Agent, and then such waiver
or consent shall be effective only in the specific instance and for the specific
purpose for which given.
14. Notices. All notices and other communications provided for
hereunder shall be made in accordance with Section 11.9 (Notices, Etc.) of the
Credit Agreement.
15. Continuing Security Interest; Transfer Of Notes Or Obligations.
This Pledge Agreement shall create a continuing security interest in the Pledged
Collateral and shall (i) remain in full force and effect until indefeasible
payment in full in cash of the Obligations and the termination of the
Commitments, (ii) be binding upon the Borrower, its successors and assigns, and
(iii) inure, together with the rights and remedies of the Administrative Agent
hereunder, to the benefit of and be enforceable by the Secured Parties and their
respective successors, transferees and assigns. Without limiting the generality
of the foregoing clause (iii), any Lender may assign or otherwise transfer any
Note held by it or Obligation owing to it to any other Person, and such other
Person shall thereupon become vested with all the rights in respect thereof
granted to such Lender herein or otherwise with respect to such of the Notes or
Obligations so transferred or assigned, subject, however, to compliance with the
provisions of Section 11.2 (Assignments and Participation) of the Credit
Agreement in respect of assignments. Upon the payment in full (after the
Termination Date) of the Obligations, the Borrower shall be entitled to the
return, upon its request and at its expense, of such of the Pledged Collateral
relating to it as shall not have been sold or otherwise applied pursuant to the
terms hereof.
16. Section Titles. The Section titles contained in this Pledge
Agreement are and shall be without substantive meaning or content of any kind
whatsoever and are not part of this Pledge Agreement.
17. Construction and Interpretation. This Pledge Agreement is
governed by certain rules of construction and interpretation set forth in
Sections 1.3(a), 1.3(b), 1.3(c), 1.3(e), 1.3(f), 1.4, 1.5 and 1.6 of the Credit
Agreement, which are hereby incorporated herein and made an integral part
hereof.
8
<PAGE>
18. Governing Law. This Pledge Agreement shall be governed by, and be
construed and interpreted in accordance with, the law of the State of New York.
Wherever possible, each provision of this Pledge Agreement shall be interpreted
in such manner as to be effective and valid under applicable law, but if any
provision of this Pledge Agreement shall be prohibited by or invalid under
applicable law, such provision shall be ineffective only to the extent of such
prohibition or invalidity and without invalidating the remaining provisions of
this Pledge Agreement.
[Signature Page Follows]
9
<PAGE>
In Witness Whereof, the Borrower has caused this Borrower Pledge
Agreement to be duly executed and delivered by its duly authorized officer on
the date first above written.
National Steel Corporation
By:__________________________
Name:
Title:
Accepted and Acknowledged:
Citicorp USA, Inc.,
as Administrative Agent
By: ______________________
Name:
Title:
10
<PAGE>
Exhibit F
Form of
Intercreditor Agreement
Intercreditor Agreement, dated as of November __, 1999, by and
among National Steel Corporation, a Delaware corporation (the "Borrower"),
National Steel Funding Corporation, a Delaware corporation (the "NSFC"),
Citicorp USA, Inc., as agent (in such capacity, the "Inventory Agent") for the
financial institutions and other entities from time to time party as a Lender or
Issuer to the Credit Agreement, dated as of November 19, 1999, among the
Borrower, the Lenders, the Issuers the Inventory Agent and The Fuji Bank,
Limited as Syndication Agent (as the same may be amended from time to time the
"Credit Agreement" and capitalized terms used herein but not defined herein
being used herein having the meanings given to them in the Credit Agreement) and
Morgan Guaranty Trust Company Of New York as Administrative Agent and
Structuring and Collateral Agent (the "Receivables Collateral Agent") under the
Receivables Purchase Agreement (the "Receivables Purchase Agreement"), dated as
of May 16, 1994, as amended from time to time, among NSFC, the Borrower as
servicer (in such capacity, and together with its successors and permitted
assigns under the Receivables Purchase Agreement, the "Servicer"), the financial
institutions listed therein as buyers, the letter of credit issuing banks and
reserve letter of credit bank listed therein and the Receivables Collateral
Agent.
W i t n e s s e t h:
Whereas, pursuant to a Purchase and Sale Agreement, dated as
of May 16, 1994, as amended from time to time (the "Receivables Sale Agreement")
between the Borrower and NSFC the Borrower has agreed to sell, transfer and
assign to NSFC, and NSFC has agreed to purchase from the Borrower, upon the
terms and subject to the conditions therein provided, all of the right, title
and interest of the Borrower in and to the Receivables and certain related
property; and
Whereas, pursuant to the Receivables Purchase Agreement, NSFC
has agreed to sell, transfer and assign to the Buyers, and the Buyers have
agreed to purchase from NSFC, upon the terms and subject to the conditions
therein provided, all of the right, title and interest of NSFC in and to the
Receivables and certain related property; and
Whereas, to secure certain obligations pursuant to the Credit
Agreement, the Borrower and the Guarantor have granted to the Inventory Agent,
for the benefit of the Secured Parties, a security interest in the Inventory of
the Borrower and the Guarantor; and
<PAGE>
Whereas, the Receivables are proceeds of the Collateral; and
Whereas, the parties hereto have agreed to enter into this
Agreement to set forth certain provisions regarding their respective rights with
respect to the Purchased Property; and
Whereas, it is a condition precedent to the making of any Loan
and the issuance of any Letter of Credit under the Credit Agreement that the
parties enter into this Agreement;
Now, Therefore, in consideration of the foregoing, the mutual
covenants and obligations herein set forth and other good and valuable
consideration, the adequacy and receipt of which is hereby acknowledged, and in
reliance upon the representations, warranties and covenants herein contained,
the parties hereto, intending to be legally bound, hereby agree as follows:
ARTICLE I
Definitions
Section 1.01 Defined Terms. As used in this Agreement, the
following terms have the following meanings (such meanings to be equally
applicable to both the singular and plural forms and, unless the context
otherwise requires, to all genders and all other grammatical forms of the terms
defined):
"Account" has the meaning specified in the Security Agreement.
"Account Debtor" has the meaning specified in the Security
Agreement.
"Agreement" means this Intercreditor Agreement, together with
all exhibits and schedules hereto, as the same may be amended, supplemented or
otherwise modified from time to time.
"Automatic Release Termination" has the meaning specified in
the Security Agreement.
"Buyers" has the meaning specified in the Receivables Purchase
Agreement.
"Collateral" means all "Collateral" as defined in the Credit
Agreement exclusive of all Purchased Property.
-2-
<PAGE>
"Collections" has the meaning specified in the Receivables
Purchase Agreement.
"Final Payment Date" has the meaning specified in the
Receivables Purchase Agreement.
"Issuing Bank" has the meaning specified in the Receivables
Purchase Agreement.
"Lockbox Account" has the meaning specified in the Receivables
Purchase Agreement.
"Lockbox Bank" has the meaning specified in the Receivables
Purchase Agreement.
"Parent Note" has the meaning specified in the Receivables
Purchase Agreement.
"Purchased Property" means (a) the Purchased Receivables, (b)
all Related Security with respect to the Purchased Receivables, (c) all
Collections related to the Purchased Receivables and (d) all proceeds of the
foregoing.
"Purchased Receivables" has the meaning specified in the
Receivables Purchase Agreement.
"Program Document" has the meaning specified in the
Receivables Purchase Agreement.
"Receivable" has the meaning specified in the Receivables
Purchase Agreement.
"Records" means all contracts and other documents evidencing
Purchased Property, and any other document, book, record and other information
(including reasonable means of access to such information and computer programs,
tapes, disks, punch cards, data processing software and related property and
rights) maintained with respect to the Purchased Receivables and the related
Account Debtors.
"Related Security" has the meaning specified in the
Receivables Purchase Agreement.
"Unsold Receivables" means any Accounts of the Borrower other
than Purchased Receivables.
-3-
<PAGE>
Section 1.02 References to Terms Defined in the Program
Documents and the Loan Documents. Whenever, in Section 1.01, a term is defined
by reference to the meaning specified in any agreement, then, unless otherwise
specified herein, such term shall have the meaning specified in such agreement
as in existence on the date hereof without giving effect to any amendment of
such term as may hereafter be agreed to by the parties to such documents unless
such amendment, if after the date hereof, has been consented to in writing by
the parties hereto adversely affected by such amendment.
ARTICLE II
Intercreditor Provisions
Section 2.01 Release of Inventory Agent's Lien. The Inventory Agent
hereby agrees that, upon the sale or other transfer prior to an Automatic
Release Termination by the Borrower to NSFC of a Receivable pursuant to the
Receivables Sale Agreement, any Lien granted by the Borrower to the Inventory
Agent in such Purchased Receivable, all Related Security with respect thereto,
all Collections with respect thereto and all proceeds thereof shall
automatically and without further action by the Inventory Agent or the Borrower
cease and be released; provided, however, that nothing in this Section 2.01
shall be deemed to constitute a release by the Inventory Agent of any Lien on
the Proceeds received by the Borrower of the transfer of the Purchased Property
to NSFC (including any cash payment, the Parent Note and any other promissory
note or Instrument evidencing the same) or on any other Collateral (including
any Unsold Receivable and Collections with respect thereto). The Inventory Agent
further covenants and agrees that, at the time it delivers any of the notices
described in Section 2(d)(ii) of the Security Agreement, it shall deliver a copy
of such notice to the Receivables Collateral Agent.
Section 2.02 Priority of Inventory Agent's Lien. As long as this
Agreement is in effect, except as provided in Section 2.01, the Receivables
Collateral Agent on behalf of itself and the Buyers agree that, notwithstanding
(i) the date, manner or order of perfection of the security interests in and
liens on the Collateral or the lien notation or filing of financing statements
or continuation statements and (ii) any provisions of the Uniform Commercial
Code of any applicable jurisdiction or any other applicable law or judicial
decision, the security interest of the Inventory Agent in the Collateral shall
have priority over the security interest of the Receivables Collateral Agent in
the Collateral to the full extent of the Borrower's Obligations outstanding from
time to time under the Credit Agreement.
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<PAGE>
Section 2.03 Interests of Receivables Collateral Agent in Collateral.
The interest of the Receivables Collateral Agent in the Collateral, if any, is
limited to the Related Security.
Section 2.04 Termination Under Receivables Sale Agreement. The
Borrower and NSFC agree that the occurrence of an Automatic Release Termination
or the replacement of the Servicer by a successor servicer that has not agreed
to be bound by the terms of this Agreement shall constitute a notice by the
Borrower under the Receivables Sale Agreement that the "Final Purchase Date"
(under and as defined in the Receivables Sale Agreement) shall be five (5)
Business Days from the date of such notice.
Section 2.05 Cash Management System.
(a) Collection of Unsold Receivables Through Cash Management System.
During a Cash Dominion Period, the Servicer shall promptly notify the
Receivables Collateral Agent and the Inventory Agent of any Collections of
Unsold Receivables that are deposited in any Lockbox Account or the Collection
Account, and the Servicer shall promptly cause such funds to be delivered to the
Inventory Agent.
(b) Identification of Collections. For purposes of determining whether
Collections deposited in a Lockbox Account or the Collection Account have been
received on account of Purchased Property or on account of Unsold Receivables,
the parties hereto agree as follows:
(i) Any payment made by an Account Debtor that is
obligated to make payment on a Purchased Receivable but is not
obligated to make payment on any Unsold Receivable shall be
conclusively presumed to be a payment on account of such Purchased
Receivable. All payments made by an Account Debtor which is obligated
to make payments on an Unsold Receivable but is not obligated to make
any payments on a Purchased Receivable shall be conclusively presumed
to be payments on account of such Unsold Receivable.
(ii) Any payment made by an Account Debtor that is
obligated to make payment with respect to both a Purchased Receivable
and an Unsold Receivable shall be applied against the specific
Account, if any, designated by such Account Debtor (by reference to
the applicable invoice) or otherwise identified by the Servicer as the
Account against which such payment should be applied. In the absence
of such designation or identification after reasonable efforts by the
Servicer to obtain such designation or make such identification, such
payment shall be
-5-
<PAGE>
conclusively presumed to be a payment on account of the Account that
has been unpaid the longest unless the Account Debtor has advised the
Servicer that such oldest Account is in dispute, in which case such
payment shall be conclusively presumed to be payment on account of any
undisputed portion of such oldest Account, if any, and thereafter on
account of the next oldest Account.
(c) Cash Management System. Upon the Final Payment Date, the Borrower
shall, and shall cause each of its Material Subsidiaries to, establish and
thereafter maintain until the indefeasible payment in full of the Obligations, a
cash management system, including lockboxes and concentration accounts,
satisfactory in all respects to the Administrative Agent in its sole discretion.
(d) Monitoring and Sharing of Information. The Servicer agrees that,
from and after an Automatic Release Termination, it shall provide the Inventory
Agent with a copy of all reports and statements received from each Lockbox Bank
and access to all Records.
Section 2.06 Effect upon Loan Documents and Program Documents. By
executing this Agreement, the Borrower agrees to be bound by the provisions
hereof as they relate to the relative rights of the Inventory Agent and the
Receivables Collateral Agent with respect to the property of the Borrower. The
Borrower acknowledges and agrees that the provisions of this Agreement shall not
give the Borrower any substantive rights as against any other Person and that
nothing in this Agreement shall amend, modify, change or supersede the terms of
(x) the Loan Documents as between the Borrower and the other parties to the
Credit Agreement or (y) the Program Documents as among the Borrower and the
other parties to the Receivables Purchase Agreement.
ARTICLE III
Miscellaneous
Section 3.01 Notices. All notices and other communications provided
for hereunder shall, unless otherwise stated herein, be in writing (including
telex and facsimile communication) and shall be personally delivered or sent by
certified mail, postage prepaid, or overnight courier or facsimile, to the
intended party at the address or facsimile number of such party set forth below
or at such other address or facsimile number as shall be designated by such
party in a written notice to the other parties hereto. All such notices and
communications shall be effective (a) if personally delivered, when received,
(b) if sent by certified mail, four Business Days after having been deposited in
the mail, postage prepaid, (c) if sent by overnight courier, two Business Days
after having
-6-
<PAGE>
been given to such courier, unless sooner received by the addressee and (d) if
transmitted by facsimile, when sent, upon receipt confirmed by telephone or
electronic means. Notices and communications sent hereunder on a day that is not
a Business Day shall be deemed to have been sent on the following Business Day.
If to the Borrower or NSFC:
National Steel Corporation
4100 Edison Lakes Parkway
Mishawaka, IN 46545-3440
Telecopy: (219) 273-7478
Telephone: (219) 273-7414
Attention: Mr. William E. McDonough
With copy to:
Ronald J. Werhnyak, Esq.
(at the same address)
If to the Inventory Agent:
Citicorp USA, Inc.
399 Park Avenue, 6/th/ Floor
New York, NY 10043
Telecopy: (212) 793-1290
Telephone: (212) 559-3149
Attention: Mr. Keith R. Karako
With copy to:
Weil, Gotshal & Manges LLP
757 Fifth Avenue
New York, NY 10153
Telecopy: (212) 310-8007
Telephone: (212) 310-8000
Attention: Ronald F. Daitz, Esq.
If to the Receivables Collateral Agent:
Morgan Guaranty Trust Company of New York
500 Stanton Christiana Road
Newark, DE 19713
Telecopy: (302) 634-5490
-7-
<PAGE>
Telephone: (302) 634-5487
Attention: Asset Finance Group--
Janine Marsini
Veronica Roehsler
Section 3.02 Agreement Absolute. Each of the Lenders and Issuers
shall be deemed to have entered into the Loan Documents in express reliance upon
this Agreement. This Agreement shall be and remain absolute and unconditional
under any and all circumstances, and no acts or omissions on the part of any
other party to this Agreement shall affect or impair the agreement of any party
to this Agreement, unless otherwise agreed to in writing by all of the parties
hereto. This Agreement shall be applicable both before and after the filing of
any petition by or against the Borrower under the United States Bankruptcy Code
and all references herein to the Borrower shall be deemed to apply to a debtor-
in-possession or trustee for such party and all allocations of payments among
the parties hereto shall, subject to any court order to the contrary, continue
to be made after the filing of such petition on the same basis that the payments
were to be applied prior to the date of the petition.
Section 3.03 Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of each of the parties hereto and their respective
successors and assigns. The successors and assigns for the Borrower shall
include a debtor-in-possession or trustee of or for such party. The successors
and assigns for the Inventory Agent or the Receivables Collateral Agent, as the
case may be, shall include any successor Inventory Agent or Receivables
Collateral Agent, as the case may be, appointed under the terms of the Loan
Documents or the Program Documents, as applicable. Each of the Inventory Agent
and the Receivables Collateral Agent, as the case may be, agrees not to transfer
any interest it may have in the Loan Documents or the Program Documents, as the
case may be, unless such transferee has been notified of the existence of this
Agreement and has agreed to be bound hereby.
Section 3.04 Third-Party Beneficiaries. The terms and provisions of
this Agreement shall be for the sole benefit of the parties hereto, the Lenders,
the Issuers, the Buyers, the Issuing Banks and their respective successors and
assigns and no other Person shall have any right, benefit or priority by reason
of this Agreement.
Section 3.05 Amendments, Etc. No amendment or waiver of any
provision of this Agreement shall in any event be effective unless the same
shall be in writing and signed by all the parties hereto, and any such amendment
or waiver shall be effective only in the specific instance and for the specific
purpose for which given.
Section 3.06 Severability. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective
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<PAGE>
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof or thereof or affecting the validity or
enforceability of such provision in any other jurisdiction.
Section 3.07 Execution in Counterparts. This Agreement may be
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which when taken together shall constitute one and the same
agreement. Delivery of an executed counterpart of a signature page of this
Agreement by telecopier shall be effective as delivery of a manually executed
counterpart of this Agreement.
Section 3.08 Governing Law. This Agreement shall be governed by the
law of the State of New York.
Section 3.09 Submission to Jurisdiction. (a) Each of the parties
hereto hereby irrevocably and unconditionally submits, for itself and its
property, to the nonexclusive jurisdiction of any New York State court or
federal court of the United States of America sitting in New York City, Borough
of Manhattan, and any appellate court from any thereof, in any legal proceeding
arising out of or relating to this Agreement or any of the Loan Documents or
Program Documents to which it is a party, or for recognition or enforcement of
any judgment, and each of the parties hereto hereby irrevocably and
unconditionally agrees that all claims in respect of any such legal proceeding
may be heard and determined in any such New York State court or, to the extent
permitted by Requirements of Law, in such federal court. Each of the parties
hereto other than the Receivables Collateral Agent agrees that a final judgment
in any such legal proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by any
Requirement of Law. Nothing in this Agreement or any of the Loan Documents or
Program Documents shall affect any right that any party may otherwise have to
bring any action or proceeding relating to this Agreement or any Loan Documents
or Program Documents to which it is a party in the courts of any jurisdiction.
(b) Each of the parties hereto irrevocably and unconditionally waives,
to the fullest extent it may legally and effectively do so, any objection that
it may now or hereafter have to the laying of venue of any legal proceeding
arising out of or relating to this Agreement or any of the Loan Documents or
Program Documents to which it is a party in any New York State or federal court.
Each of the parties hereto hereby irrevocably waives, to the fullest extent
permitted by Requirements of Law, the defense of an inconvenient forum to the
maintenance of such action or proceeding in any such court.
-9-
<PAGE>
Section 3.10 Construction and Interpretation. This Agreement is
governed by certain rules of construction and interpretation set forth in
Sections 1.3(a), 1.3(b), 1.3(c), 1.4, 1.5 and 1.6 of the Credit Agreement as in
effect on the date hereof, which are hereby incorporated herein and made an
integral part hereof. The parties hereto acknowledge and agree that they have
participated jointly in the negotiation and drafting of this Agreement. In the
event an ambiguity or question of intent or interpretation arises, this
Agreement shall be construed as if drafted jointly by the parties hereto and no
presumption or burden of proof shall arise favoring or disfavoring any party by
virtue of the authorship of any of the provisions of this Agreement.
Section 3.11 Waiver of Jury Trial. Each party to this Agreement
waives any right to a trial by jury in any legal proceeding to enforce or defend
any rights under or relating to this Agreement or any amendment, instrument,
document or agreement delivered or which may in the future be delivered in
connection herewith or therewith or arising from any course of conduct, course
of dealing, statements (whether oral or written), actions of any of the parties
hereto or any other relationship existing in connection with this Agreement, and
agrees that any such legal proceeding shall be tried before a court and not
before a jury.
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<PAGE>
In Witness Whereof, the parties have executed this Agreement
as of the date first above written.
National Steel Corporation
By:_______________________________
Name:
Title:
National Steel Funding Corporation
By:_______________________________
Name:
Title:
Citicorp USA, Inc., as Inventory
Agent
By:_______________________________
Name:
Title:
Morgan Guaranty Trust Company
of New York, as Receivables
Collateral Agent
By:_______________________________
Name:
Title:
-11-
<PAGE>
Exhibit G
Form of
Borrowing Base Certificate
National Steel Corporation
Borrowing Base Certificate
Period ending __/__/__
CITICORP USA, Inc. as
Administrative Agent
399 Park Avenue
New York, NY 10043
Pursuant to provisions of the Credit Agreement, dated as of November 19, 1999,
among National Steel Corporation, a Delaware corporation (the "Borrower"), with
the financial institutions and other entities from time to time party thereto as
a Lender or Issuer and Citicorp USA, Inc. as agent for the Lenders and Issuers,
and Fuji Bank, Limited as Syndication Agent (said Credit Agreement, as it may be
amended or otherwise modified from time to time, being the "Credit Agreement"
and capitalized terms used herein but not defined herein being used herein as
defined in the Credit Agreement), the undersigned hereby certifies that the
attached information is true, complete and correct as of the close of business
on _____________, and no Default or Event of Default has occurred and is
continuing on the date hereof.
National Steel Corporation
By:: _________________________
Name:
Title:
<PAGE>
National Steel Corporation
Borrowing Base Certificate
As of _____, 200__
Summary Eligibility: Gross Inventory Ineligible Eligible
Raw Materials
Finished & Semi-finished
Operating supplies and inventory
in warehouses
Stores and Rolls
Total Inventory
Summary Availability Eligible % Available
Raw Materials
Finished & Semi-finished
Operating supplies and inventory
in warehouses
Stores and Rolls
Total Inventory Availability:
Less: Outside Processing Inventory
Reserve
Less: Other Availability Reserves
Net Inventory Availability(A)
Commitments (B)
Minimum Availability of (A) & (B)
Borrowings
Letters of Credit
Available Credit
Note: Please see attached schedule for advance rates for each category.
2
<PAGE>
<TABLE>
<CAPTION>
National Steel Inc.
Borrowing Base Certificate
Month of __/__/__
($000's)
Eligible
RAW MATERIAL Book Ineligible Inventory ROA % Eligibility Reserves Availability
----------------- -------- ---------- ----------- --------- -------------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Coal H.V.
Coal L.V.
Ore
Pellets
Coke
Scrap
BOP Scrap
Hot Metal
Flux
Tin M#
Zinc M#
Additives
Concentrates
Other
Total RAW
WORK IN PROCESS/
FINISHED GOODS
LSIL
Slabs
Bands - HR
Bands - CR
HR proc/Fin
CR proc/Fin
Total In Process
</TABLE>
3
<PAGE>
OP & W
Warehouses
Consigned
Processors
Total OP&W
Stores
Rolls
Total Stores
Total Inventory
4
<PAGE>
Exhibit H
Form of
Subsidiary Guaranty
Guaranty, dated November __, 1999 (this "Guaranty"), by National Steel
Pellet Company, a Delaware corporation (the "Guarantor"), in favor of the
Secured Parties (as defined in the Credit Agreement referred to below).
W i t n e s s e t h:
Whereas, National Steel Corporation, a Delaware corporation (the
"Borrower"), is party to a Credit Agreement dated as of November 19, 1999, with
the financial institutions and other entities party thereto from time to time as
a Lender or Issuer and Citicorp USA, Inc. as agent for the Lenders and Issuers,
and The Fuji Bank, Limited as syndication agent for the Lenders and Issuers (as
may be amended or otherwise modified from time to time, the "Credit Agreement";
capitalized terms used herein but not defined herein are used herein as defined
in the Credit Agreement); and
Whereas, the Borrower and the Guarantor are members of the same
consolidated group of companies, are engaged in related businesses, and the
Guarantor will derive substantial direct and indirect benefit from the making of
the Loans and the issuances of the Letters of Credit, and the other financial
accommodations made under the Credit Agreement; and
Whereas, it is a condition precedent under the Credit Agreement to the
making of Loans and the issuance of Letters of Credit that the Guarantor shall
have executed and delivered this Guaranty;
Now, Therefore, in consideration of the premises and to induce the
Lenders to make Loans and the Issuers to issue Letters of Credit, the Guarantor
hereby agrees as follows:
1. Guaranty. The Guarantor hereby unconditionally and irrevocably
guarantees the full and prompt payment when due, whether at stated maturity, by
acceleration or otherwise, of, and the performance of, the Obligations, whether
now or hereafter existing and whether for principal, interest, fees, expenses or
otherwise, and any and all expenses (including, without limitation, counsel fees
and expenses) incurred by any of the Secured Parties in enforcing any rights
under this Guaranty. This Guaranty is an absolute guaranty of payment and
performance and not a guaranty of collection.
2. Guaranty Absolute. The Guarantor guarantees that the Obligations
will be paid strictly in accordance with the terms of the Credit Agreement and
the other Loan Documents, 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 Secured Parties with
<PAGE>
respect thereto. The liability of the Guarantor under this Guaranty shall be
absolute and unconditional irrespective of:
(a) any lack of validity or enforceability of any provision of any
other Loan Document or any other agreement or instrument relating to any Loan
Document, or avoidance or subordination of any of the Obligations;
(b) any change in the time, manner or place of payment of, or in any
other term of, or any increase in the amount of, all or any of the Obligations,
or any other amendment or waiver of any term of, or any consent to departure
from any requirement of, the Credit Agreement, or any other Loan Documents;
(c) any exchange, release or non-perfection of any Lien on any
collateral for, or any release or amendment or waiver of any term of any other
guaranty of, or any consent to departure from any requirement of any other
guaranty of, all or any of the Obligations;
(d) the absence of any attempt to collect any of the Obligations from
the Borrower or any other guaranty of the Obligations or any other action to
enforce the same or the election of any remedy by any of the Secured Parties;
(e) any waiver, consent, extension, forbearance or granting of any
indulgence by any of the Secured Parties with respect to any provision of any
other Loan Document;
(f) the election by any of the Secured Parties in any proceeding
under chapter 11 of the Bankruptcy Code or the application of section 1111(b)(2)
of the Bankruptcy Code;
(g) any borrowing or grant of a security interest by the Borrower, as
debtor-in-possession, under section 364 of the Bankruptcy Code;
(h) the disallowance, under section 502 of the Bankruptcy Code, of
all or any portion of the claims of any of the Secured Parties for payment of
any of the Obligations; or
(i) any other circumstance which might otherwise constitute a legal
or equitable discharge or defense of a borrower or a guarantor.
3. Waiver.
(a) The Guarantor hereby (i) waives (A) promptness, diligence, notice
of acceptance and any and all other notices with respect to any of the
Obligations or this Guaranty, (B) any requirement that any of the Secured
Parties protect, secure, perfect or insure any security interest in or other
Lien on any property subject thereto or exhaust any right or take any action
against the Borrower or any other Person or any Collateral,
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(C) the filing of any claim with a court in the event of receivership or
bankruptcy of the Borrower, (D) protest or notice with respect to nonpayment of
all or any of the Obligations, (E) the benefit of any statute of limitation, and
(F) all demands whatsoever (and any requirement that same be made on the
Borrower as a condition precedent to the Guarantor's obligations hereunder); and
(ii) covenants and agrees that this Guaranty will not be discharged except by
complete performance of the Obligations and any other obligations of the
Guarantor contained herein.
(b) If, in the exercise of any of its rights and remedies, any of the
Secured Parties shall forfeit any of its rights or remedies, including, without
limitation, its right to enter a deficiency judgment against the Borrower or any
other Person, whether because of any applicable law pertaining to "election of
remedies" or the like, the Guarantor hereby consents to such action by such
Secured Party and waives any claim based upon such action. Any election of
remedies which results in the denial or impairment of the right of such Secured
Party to seek a deficiency judgment against the Borrower shall not impair the
obligation of the Guarantor to pay the full amount of the Obligations or any
other obligation of the Guarantor contained herein.
(c) In the event any of the Secured Parties shall bid at any
foreclosure or trustee's sale or at any private sale permitted by law and
conducted pursuant to any of the Loan Documents, such Secured Party may bid all
or less than the amount of the Obligations and the amount of such bid need not
be paid by such Secured Party but shall be credited against the Obligations. The
amount of the successful bid at any such sale, whether such Secured Party or any
other Person is the successful bidder, shall be conclusively deemed to be the
fair market value of the Collateral and the difference between such bid amount
and the remaining balance of the Obligations shall be conclusively deemed to be
the amount of the Obligations guaranteed under this Guaranty, notwithstanding
that any present or future law or court decision or ruling may have the effect
of reducing the amount of any deficiency claim to which any of the Secured
Parties might otherwise be entitled by reason of such bidding at any such sale.
(d) The Guarantor agrees that notwithstanding the foregoing and
without limiting the generality of the foregoing, if, after the occurrence and
during the continuance of an Event of Default, the Secured Parties are prevented
by applicable law from exercising their respective rights to accelerate the
maturity of the Obligations, to collect interest on the Obligations, or to
enforce or exercise any other right or remedy with respect to the Obligations,
or the Administrative Agent is prevented from taking any action to realize on
the Collateral, the Guarantor agrees to pay to the Administrative Agent for the
account of the Secured Parties, upon demand therefor, the amount that would
otherwise have been due and payable had such rights and remedies been permitted
to be exercised by the Secured Parties.
(e) The Guarantor hereby assumes responsibility for keeping itself
informed of the financial condition of the Borrower of all or any part of the
Obligations, and of all other circumstances bearing upon the risk of nonpayment
of the Obligations or
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<PAGE>
any part thereof, that diligent inquiry would reveal. The Guarantor hereby
agrees that the Secured Parties shall have no duty to advise the Guarantor of
information known to any of the Secured Parties regarding such condition or any
such circumstance. In the event that any of the Secured Parties in its sole
discretion undertakes at any time or from time to time to provide any such
information to the Guarantor, such Secured Party shall be under no obligation
(i) to undertake any investigation not a part of its regular business routine,
(ii) to disclose any information which, pursuant to accepted or reasonable
banking or commercial finance practices, such Secured Party wishes to maintain
confidential or (iii) to make any other or future disclosures of such
information or any other information to the Guarantor.
(f) The Guarantor consents and agrees that the Secured Parties shall
be under no obligation to marshall any assets in favor of the Guarantor or
otherwise in connection with obtaining payment of any or all of the Obligations
from any Person or source.
4. Subrogation; Subordination.
(a) The Guarantor agrees that it will not exercise any rights which
it may acquire by way of subrogation, contribution or reimbursement by reason of
this Guaranty or by any payment made hereunder until the Obligations have been
paid in full in cash, there is no Letter of Credit outstanding and the
Commitments are terminated.
(b) The Guarantor agrees that any and all claims against the Borrower
or any endorser or other guarantor of all or any part of the Obligations, or
against any of their respective properties, shall be subordinate and subject in
right of payment to the prior payment, in full and in cash, of all Obligations.
Notwithstanding any right of the Guarantor to ask, demand, sue for, take or
receive any payment from the Borrower, all rights, liens and security interests
of the Guarantor, whether now or hereafter arising and howsoever existing, in
any assets of the Borrower (whether constituting part of the Collateral) shall
be and hereby are subordinated to the rights of the Secured Parties in those
assets. Except as permitted by the Credit Agreement, the Guarantor shall have no
right to possession of any such asset or to foreclose upon any such asset,
whether by judicial action or otherwise, unless and until all of the Obligations
shall have been fully paid in cash and the Credit Agreement has been terminated.
If all or any part of the assets of the Borrower, or the proceeds thereof, are
subject to any distribution, division or application to the creditors of the
Borrower, whether partial or complete, voluntary or involuntary, and whether by
reason of liquidation, bankruptcy, arrangement, receivership, assignment for the
benefit of creditors or any other action or proceeding, or if the business of
the Borrower is dissolved or if (except as permitted by the Credit Agreement)
substantially all of the assets of the Borrower are sold, then, and in any such
event, any payment or distribution of any kind or character, either in cash,
securities or other property, which shall be payable or deliverable upon or with
respect to any indebtedness of the Borrower to the Guarantor ("Borrower
Indebtedness"), shall be paid or delivered to the Administrative Agent for
application on any of the Obligations then due and payable,
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<PAGE>
until such Obligations shall have first been paid in cash. The Guarantor
irrevocably authorizes and empowers the Administrative Agent to demand, sue for,
collect and receive every such payment or distribution and give acquittance
therefor and to made a present for and on behalf of the Guarantor such proofs of
claim and take such other action, in the Administrative Agent's own name or in
the name of the Guarantor or otherwise, as the Administrative Agent may deem
necessary or advisable for the enforcement of this Guaranty. The Administrative
Agent may vote such proofs of claim in any such proceeding, receive and collect
any and all dividends or other payments or disbursements made on the Borrower
Indebtedness in whatever form the same may be paid or issued and apply the same
on account of any of the Obligations then due and payable. If any payment,
distribution, security or instrument or proceeds thereof is received by the
Guarantor upon or with respect to the Borrower Indebtedness prior to the payment
in full in cash of the Obligations and the termination of the Credit Agreement,
the Guarantor shall receive and hold the same in trust, as trustee for the
benefit of the Administrative Agent and the other Secured Parties, and shall
forthwith deliver the same to the Administrative Agent, for the benefit of the
Administrative Agent and the other Secured Parties, in precisely the form
received (except for the endorsement or assignment of the Guarantor where
necessary), for application to any of the Obligations then due and payable, and,
until so delivered, the same shall be held in trust by the Guarantor as the
collateral security of the Administrative Agent, for the benefit of the
Administrative Agent and the other Secured Parties. If the Guarantor fails to
make any such endorsement or assignment to the Administrative Agent, the
Administrative Agent or any of its officers or employees are hereby irrevocably
authorized to make the same. The Guarantor agrees that until the Obligations
have been paid in full in cash and the Credit Agreement has been terminated, the
Guarantor will not assign or transfer to any Person any claim the Guarantor has
or may have against the Borrower.
5. Representations And Warranties. The Guarantor hereby represents
and warrants to the Secured Parties that all representations and warranties
applicable to the Guarantor contained in Article IV (Representations and
Warranties) of the Credit Agreement as they relate to the Guarantor and in the
other Loan Documents to which the Guarantor is a party, each of which is hereby
incorporated herein by reference, are true and correct in all material respects
and the Administrative Agent and Secured Parties shall be entitled to rely on
each of them as if they were fully set forth herein.
6. Covenants. The Guarantor agrees to comply with any covenant
contained in the Credit Agreement or any other Loan Document that is applicable
to it and otherwise to take or refrain from taking, as the case may be, each
action that is necessary to be taken or not taken, as the case may be, so that
no Default or Event of Default is caused by the failure to take such action or
to refrain from taking such action by the Guarantor or any of its Subsidiaries.
7. Amendments, Etc. No amendment or waiver of any provision of this
Guaranty nor consent to any departure by the Guarantor herefrom shall in any
event
5
<PAGE>
be effective unless the same shall be in writing, approved by the Requisite
Lenders and signed by the Administrative Agent, and then such waiver or consent
shall be effective only in the specific instance and for the specific purpose
for which given; provided, however, that no amendment, waiver or consent shall,
unless in writing and signed by all the Secured Parties, limit the liability of
the Guarantor (other than as expressly provided herein) or postpone any date
fixed for payment hereunder.
8. Addresses For Notices. All notices and other communications
provided for hereunder shall be made in accordance with Section 11.9 (Notices,
Etc) of the Credit Agreement, if to the Guarantor, shall be mailed, telecopied
or delivered by hand at its address specified in the signature pages hereof.
9. No Waiver; Remedies.
(a) No failure on the part of any Secured Party to exercise, and no
delay in exercising, any right hereunder shall operate as a waiver thereof; nor
shall any single or partial exercise of any right hereunder preclude any other
or further exercise thereof or the exercise of any other right. The remedies
herein provided are cumulative and not exclusive of any remedies provided by law
or any of the other Loan Documents.
(b) Failure by any of the Secured Parties at any time or times
hereafter to require strict performance by the Borrower, the Guarantor or any
other Person of any of the provisions, warranties, terms or conditions contained
in any of the Loan Documents now or at any time or times hereafter executed by
any such Borrower, the Guarantor or any such other Person and delivered to any
of the Secured Parties shall not waive, affect or diminish any right of any of
the Secured Parties at any time or times hereafter to demand strict performance
thereof, and such right shall not be deemed to have been modified or waived by
any course of conduct or knowledge of any of the Secured Parties or any agent,
officer, employee of any of the Secured Parties.
(c) No waiver by the Secured Parties of any default shall operate as
a waiver of any other default or the same default on a future occasion, and no
action by any of the Secured Parties permitted hereunder shall in way affect or
impair any of the rights of the Secured Parties or the obligations of the
Guarantor under this Guaranty or under any of the other Loan Documents. Any
determination by a court of competent jurisdiction of the amount of any
principal and/or interest or other amount constituting any of the Obligations
shall be conclusive and binding on the Guarantor irrespective of whether the
Guarantor was a party to the suit or action in which such determination was
made.
10. Right Of Set-Off. Upon the occurrence and during the continuance
of any Event of Default, each of the Secured Parties is hereby authorized at any
time and from time to time, to the fullest extent permitted by law, to set off
and apply any and all deposits (general or special, time or demand, provisional
or final) at any time held and other indebtedness at any time owing by such
Secured Party to or for the credit
6
<PAGE>
or the account of the Guarantor against any and all of the obligations of the
Guarantor now or hereafter existing under this Guaranty, irrespective of whether
or not such Secured Party shall have made any demand under this Guaranty and
although such obligations may be contingent and unmatured. Each of the Secured
Parties agrees promptly to notify the Guarantor after any such set-off and
application made by such Secured Party; provided, however, that the failure to
give such notice shall not affect the validity of such set-off and application.
The rights of each Secured Party under this Section are in addition to other
rights and remedies (including, without limitation, other rights of set-off)
which such Secured Party may have.
11. Continuing Guaranty; Transfer Of Notes. This Guaranty is a
continuing guaranty and shall (i) remain in full force and effect until
indefeasible payment in full in cash of the Obligations and all other amounts
payable under this Guaranty, (ii) be binding upon the Guarantor, and its
successors and assigns, and (iii) inure to the benefit of and be enforceable by
the Secured Parties and their respective successors, transferees, and assigns.
Without limiting the generality of the foregoing clause (iii), any of the
Secured Parties may assign or otherwise transfer any Note held by it or
Obligation owing to it to any other Person, and such other Person shall
thereupon become vested with all the rights in respect thereof granted to such
Secured Party herein or otherwise with respect to such of the Notes and
Obligations so transferred or assigned, subject, however, to compliance with the
provisions of Section 11.2 (Assignments and Participations) of the Credit
Agreement in respect of assignments.
12. Limitation Of Guaranty. Any term or provision of this Guaranty or
any other Loan Document to the contrary notwithstanding, the maximum aggregate
amount of the Obligations for which the Guarantor shall be liable shall not
exceed the maximum amount for which the Guarantor can be liable without
rendering this Guaranty or any other Loan Document, as it relates to the
Guarantor, voidable under applicable law relating to fraudulent conveyance or
fraudulent transfer.
13. Reinstatement. This Guaranty shall remain in full force and
effect and continue to be effective should any petition be filed by or against
any Loan Party for liquidation or reorganization, should any Loan Party become
insolvent or make an assignment for the benefit of creditors or should a
receiver or trustee be appointed for all or any significant part of any Loan
Party's assets, and shall, to the fullest extent permitted by law, continue to
be effective or be reinstated, as the case may be, if at any time payment and
performance of the Obligations, or any part thereof, is, pursuant to applicable
law, rescinded or reduced in amount, or must otherwise be restored or returned
by any obligee of the Obligations or such part thereof, whether as a "voidable
preference", "fraudulent transfer", or otherwise, all as though such payment or
performance had not been made. In the event that any payment, or any part
thereof, is rescinded, reduced, restored or returned, the Obligations shall, to
the fullest extent permitted by law, be reinstated and deemed reduced only by
such amount paid and not so rescinded, reduced, restored or returned.
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14. Governing Law. This Guaranty shall be governed by, and be
construed and interpreted in accordance with, the law of the State of New York.
Wherever possible, each provision of this Guaranty shall be interpreted in such
manner as to be effective and valid under applicable law, but if any provision
of this Guaranty shall be prohibited by or invalid under applicable law, such
provision shall be ineffective only to the extent of such prohibition or
invalidity and without invalidating the remaining provisions of this Guaranty.
15. Submission to Jurisdiction; Service of Process; Jury Trial.
(a) Any legal action or proceeding with respect to this Guaranty or
any document related thereto including, without limitation, the Security
Agreement, may be brought in the courts of the State of New York or of the
United States of America for the Southern District of New York, and, by
execution and delivery of this Guaranty, the Guarantor hereby accepts for itself
and in respect of its Property, generally and unconditionally, the jurisdiction
of the aforesaid courts. The parties hereto hereby irrevocably waive any
objection, including any objection to the laying of venue or based on the
grounds of forum non conveniens, which any of them may now or hereafter have to
the bringing of any such action or proceeding in such respective jurisdictions.
(b) The Guarantor irrevocably consents to the service of process of
any of the aforesaid courts in any such action or proceeding by the mailing of
copies thereof by registered or certified mail, postage prepaid, to the
Guarantor at the address provided in the Credit Agreement.
(c) Nothing contained in this Section 15 shall affect the right of
the Administrative Agent or any Lender to serve process in any other manner
permitted by law or commence legal proceedings or otherwise proceed against the
Guarantor in any other jurisdiction.
(d) The parties hereto waive any right to trial by jury in any Legal
Proceeding brought to resolve any dispute, whether sounding in contract, tort or
otherwise, between the Administrative Agent, the Lenders and/or the Issuers and
the Guarantor arising out of, connected with, related to, or incidental to the
relationship established amount them in connection with this Guaranty or any of
the other Loan Documents or the transactions related thereto.
16. Section Titles. The Section titles contained in this Guaranty
are and shall be without substantive meaning or content of any kind whatsoever
and are not a part of this Guaranty.
17. Construction and Interpretation. This Guaranty is governed by
certain rules of construction and interpretation set forth in Sections 1.3(a),
1.3(b), 1.3(c),
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<PAGE>
1.3(e), 1.3(f), 1.4, 1.5 and 1.6 of the Credit Agreement, which are hereby
incorporated herein and made an integral part hereof.
18. Execution In Counterparts. This Guaranty may be executed in any
number of counterparts and by different parties hereto in separate counterparts,
each of which when so executed shall be deemed to be an original and all of
which taken together shall constitute one and the same Guaranty.
19. Miscellaneous. All references herein to the Borrower or to the
Guarantor shall include their respective successors and assigns, including,
without limitation, a receiver, trustee or debtor-in-possession of or for the
Borrower or the Guarantor. All references to the singular shall be deemed to
include the plural where the context so requires.
[Signature Page Follows]
9
<PAGE>
In Witness Whereof, the Guarantor has caused this Guaranty to be duly
executed and delivered by its duly authorized officer on the date first above
written.
National Steel Pellet Corporation
By: ___________________________
Name:
Title:
Address:
Telecopy:
Accepted and acknowledged:
Citicorp USA, Inc.,
as Administrative Agent
By: _______________________________
Name:
Title:
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<PAGE>
Exhibit I
Form of
Opinion of Counsel
for the Loan Parties
Citicorp, USA, Inc., as Administrative Agent
and the Lenders listed on Schedule I to the
Credit Agreement
Ladies and Gentlemen:
We have acted as counsel for National Steel Corporation, a Delaware
corporation ("Borrower"), National Steel Pellet Company, a Delaware Corporation
and wholly-owned subsidiary of Borrower ("NSPC"), and National Steel Funding
corporation, a Delaware corporation and wholly-owned subsidiary of Borrower
("NSFC") in connection with the Credit Agreement, dated as of the date hereof
(the "Credit Agreement"), among Borrower, Citicorp USA, Inc. as Administrative
Agent and the banks listed on Schedule I to the Credit Agreement, and the
agreements contemplated thereby, including, but not limited to, the Security
Agreement, the Guaranty, the Intercreditor Agreement and the Pledge Agreement,
all dated the date hereof (the "Loan Documents").
We have examined originals or copies, certified or otherwise identified to
our satisfaction, of such documents, corporate records, certificates of public
officials and other instruments and have conducted such other investigations of
fact and law as we have deemed necessary or advisable for purposes of this
Opinion.
In furnishing the following Opinion, we have relied upon the following
assumptions:
(a) the factual representations of each of the Borrower and NSPC set forth
in the Loan Documents or in any certificate delivered pursuant thereto are and
will continue to be accurate; and
(b) the Loan Documents have been executed by duly authorized officers of
parties other than Borrower or NSPC.
Based on the foregoing, we are of the opinion that:
1. Each of the Borrower and NSPC is a corporation validly existing and in
good standing under the law of the State of Delaware and has all requisite
<PAGE>
corporate power and authority to own, lease and operate its properties and to
carry on its business as now being conducted.
2. The Borrower is duly qualified to transact business and is in good
standing as a foreign corporation in Michigan, Illinois, and Indiana. NSPC is
duly qualified to transact business and is in good standing as a foreign
corporation in Minnesota.
3. All of the outstanding shares of capital stock of NSPC and NSFC is (i)
owned of record and to our knowledge, beneficially by the Borrower free and
clear of all adverse claims, (ii) are duly authorized, validly issued, fully
paid and nonassessable, and (iii) have not been issued in violation of any
preemptive rights pursuant to law or such corporation's certificate of
incorporation.
4. Each of the Borrower, NSFC and NSPC has all requisite corporate power
and authority to execute and deliver the Loan Documents, obtain, in the case of
the Borrower, Loans and Letters of Credit thereunder, grant, in the case of
Borrower and NSPC, the Liens provided for therein and otherwise perform its
obligations thereunder. The execution, delivery and performance of the Loan
Documents to which it is a party by the Borrower, NSFC and NSPC have been duly
authorized by all necessary corporate action on the part of the Borrower, NSFC
and NSPC. The Loan Documents to which it is a party have been duly and validly
executed and delivered by the Borrower, NSFC and NSPC and constitute the legal,
valid and binding obligation of each of the Borrower, NSFC and NSPC, enforceable
against it in accordance with its terms, subject to applicable bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and similar laws
affecting creditors' rights and remedies generally, and subject, as to
enforceability, to general principles of equity, including principles of
commercial reasonableness, good faith and fair dealing (regardless of whether
enforcement is sought in a proceeding at law or in equity).
5. The execution and delivery by each of the Borrower, NSFC and NSPC of
the Loan Documents to which it is a party and the performance by the Borrower,
NSFC and NSPC of their obligations thereunder will not conflict with, constitute
a default under or violate (i) any of the terms, conditions or provisions of the
Certificates of Incorporation or by-laws of the Borrower, NSFC or NSPC, (ii) any
of the terms, conditions or provisions of any material Contractual Obligation of
the Borrower, NSFC or NSPC of which we are aware, (iii) any New York, Indiana,
Illinois, Michigan, Minnesota or federal law or regulation or (iv) any judgment,
writ, injunction, decree, order or ruling of any court or Governmental Authority
binding on the Borrower, NSFC or NSPC of which we are aware.
6. No consent, approval, waiver, license or authorization or other action
by or filing with any New York, Indiana, Illinois, Michigan, Minnesota or
federal Governmental Authority is required in connection with the execution and
delivery by the Borrower, NSFC and NSPC of the Loan Documents to which it is a
party, obtain, in the case of the Borrower Loans and Letters of Credit
thereunder, grant the Liens provided for
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<PAGE>
therein (subject to the provisions of paragraph 9(a) hereof), or the performance
by the Borrower, NSFC or NSPC of any of its obligations thereunder.
7. The borrowings by and other financial accommodations provided to the
Borrower and NSPC under the Loan Documents and the application of proceeds
thereof as provided in the Credit Agreement will not violate Regulation T, U or
X of the Board of Governors of the Federal Reserve System.
8. Neither Borrower nor NSPC is an "investment company" within the meaning
of the Investment Company Act of 1940, as amended, or a "holding company" or a
"subsidiary company" of a "holding company" within the meaning of the Public
Utility Holding Company Act of 1935, as amended.
9. (a) The Security Agreement creates in favor of the Administrative
Agent, as security for Borrower's obligations under the Credit Agreement and
NSPC's obligations under the Guaranty, a valid security interest in all of the
right, title and interest of the Borrower and NSPC, as the case may be, in the
Collateral which security interest is given, assuming the filing of the
financing statements on Form UCC-1 filed in the offices in the jurisdictions
indicated on Schedule 1 hereto will be duly perfected, to the extent perfection
of a security interest in the Collateral may be perfected by the filing of a
financing statement under the UCC. No further filing or recording of any
document or instrument or other action is currently required to perfect the
Security Interests, except that (i) continuation statements with respect to each
Financing Statement must be filed within the respective time periods set forth
in the Perfection Certificate; and (ii) additional filings may be necessary if
either of NSC or NSPC changes its name, identity or corporate structure or the
jurisdiction in which its places of business, its chief executive office or the
Collateral are located.
(b) Assuming (i) delivery and continued possession in New York by the
Administrative Agent (the "Pledgee") of certificates representing the Pledged
Securities, together with stock powers properly executed in blank with respect
thereto, and (ii) that the Pledgee was without notice of any adverse claim (as
such phrase is defined in Section 8-105 of the UCC) with respect to the Pledged
Securities, the Pledge Agreement creates a valid and duly perfected lien on and
security interest in the Pledged Securities, as security for the Secured
Obligations, which is free of any adverse claim.
The opinion in subparagraph (a) is subject to the following exceptions:
A. that with respect to any Collateral as to which the perfection
of a lien or security interest is governed by the law of any jurisdiction other
than the States of New York, Indiana, Illinois, Michigan or Minnesota, we
express no opinion;
B. that with respect to any Collateral which is or may become
fixtures (within the meaning of Section 9-313 of the UCC) we express no opinion;
and
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C. that with respect to transactions excluded from Article 9 of
the UCC by Section 9-104 thereof, we express no opinion.
D. with respect to the laws of Illinois, Indiana and Michigan,
we have relied on the opinions of Sorling, Northrup, Hanna, Cullen and Cochran,
Ltd., Douglas, Alexa, Koeppen & Hurley, and Honigman Miller Schwartz and Cohn,
respectively.
The opinion set forth in subparagraph (b) is subject to the following
exceptions:
A. that with respect to (i) federal tax liens accorded priority
under law and (ii) liens created under Title IV of the Employee Retirement
Income Security Act of 1974, as amended, which are properly filed after the date
hereof, we express no opinion as to the relative priority of such liens and the
security interests created by the Pledge Agreement; and
B. that with respect to any claim in favor of any state or any
of its respective agencies, authorities, municipalities or political
subdivisions which claim is given lien status and/or priority under any law of
such state, we express no opinion as to the relative priority of such liens and
the security interests created by the Pledge Agreement.
In addition, the opinions in subparagraphs (a) and (b) are subject to
(i) the limitations on perfection of security interests in proceeds resulting
from the operation of Section 9-306 of the UCC; (ii) the limitations with
respect to buyers in the ordinary course of business imposed by Sections 9-307
and 9-308 of the UCC; (iii) the limitations with respect to documents,
instruments and securities imposed by Sections 8-302, 9-304 and 9-309 of the
UCC; (iv) the provisions of Section 9-203 of the UCC relating to the time of
attachment; and (v) Section 552 of Title 11 of the United States Code (the
"Bankruptcy Code") with respect to any Collateral acquired by the Borrower or
NSPC subsequent to the commencement of a case against or by the Borrower or NSPC
under the Bankruptcy Code.
We have assumed the genuineness of all signatures, the authenticity of all
documents submitted to us as originals and the conformity with the originals of
all documents submitted to us as copies.
We are licensed to practice law only in the Commonwealth of Pennsylvania,
although as indicated our opinion herein is not limited to such jurisdiction and
to the extent relevant covers matters of New York, Delaware corporate, Federal,
Indiana, Illinois, Michigan and Minnesota law.
This opinion has been delivered at your request for the purposes
contemplated by the Loan Documents. Without our prior written consent, this
opinion is not to be utilized or quoted for any other purpose and no Person
other than you, and
4
<PAGE>
permitted assignees and transferees under the Credit Agreement, is entitled to
rely thereon.
Very truly yours,
YUKEVICH, MARCHETTI, LIEKAR
& ZANGRILLI, P.C.
By: _____________________________
5
<PAGE>
Exhibit J
Form Of
Assignment And Acceptance
__________________ _____, 200__
Reference is made to the Credit Agreement, dated as of November 19,
1999, among National Steel Corporation, a Delaware corporation (the "Borrower"),
with the financial institutions and other entities from time to time party
thereto as a Lender or Issuer and Citicorp USA, Inc. as agent for the Lenders
and Issuers, and Fuji Bank, Limited as syndication agent for the Lenders and
Issuers (said Credit Agreement, as it may be amended or otherwise modified from
time to time, being the "Credit Agreement" and capitalized terms used herein but
not defined herein being used herein as defined in the Credit Agreement).
_______________________ (the "Assignor") and _________________________
(the "Assignee") agree as follows:
1. The Assignor hereby sells and assigns to the Assignee, and the Assignee
hereby purchases and assumes from the Assignor, that interest in and to all
of the Assignor's rights and obligations under the Credit Agreement as of
the date hereof which represents the percentage interest specified on
Schedule I of all outstanding rights and obligations under the Credit
Agreement (including, without limitation, such interest in each of the
Assignor's outstanding Commitments, if any, the Obligations owing to it and
the Notes held by it). After giving effect to such sale and assignment, the
Assignee's Commitments and the amount of the Loans owing to the Assignee
[and the amount of Letters of Credit participated in by the Assignee) will
be as set forth in Section 2 of Schedule I.
2. The Assignor (i) represents and warrants that it is the legal and
beneficial owner of the interest being assigned by it hereunder and that
such interest is free and clear of any adverse claim; (ii) makes no
representation or warranty and assumes no responsibility with respect to
any statements, warranties or representations made in or in connection with
the Credit Agreement or any other Loan Document or any other instrument or
document furnished pursuant thereto or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of the Credit Agreement
or any other Loan Document or any other instrument or document furnished
pursuant thereto; (iii) makes no representation or warranty and assumes no
responsibility with respect to the financial condition of the Borrower or
the performance or observance by the Borrower of any of its obligations
under the Credit Agreement or any other Loan Document or any other
instrument or document furnished pursuant thereto; and (iv) attaches the
Notes referred to above
J-1
<PAGE>
and requests that the Administrative Agent exchange such Notes for new
Notes as follows: [specify date of Notes, amounts, Assignee).
3. The Assignee (i) agrees that it will, independently and without reliance
upon the Administrative Agent, the Assignor or any other Lender and based
on such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action
under the Credit Agreement; (ii) appoints and authorizes the Administrative
Agent to take such action as agent on its behalf and to exercise such
powers under the Credit Agreement as are delegated to the Administrative
Agent by the terms thereof, together with such powers as are reasonably
incidental thereto; (iii) agrees that it will perform in accordance with
their terms all of the obligations which by the terms of the Credit
Agreement are required to be performed by it as a Lender; (iv) represents
and warrants that it is an Eligible Assignee; (v) confirms it has received
the Credit Agreement and each of the Loan Documents together with a copy of
the most recent financial statements delivered by the Borrower to the
Lenders and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into this
Assignment and Acceptance; [and] (vi) specifies as its Domestic Lending
Office (and address for notices) and Eurodollar Lending Office the offices
set forth beneath its name on the signature pages hereof[; and* (vii)
attaches the forms prescribed by the Internal Revenue Service of the United
States certifying as to the Assignee's status for purposes of determining
exemption from United States withholding taxes with respect to all payments
to be made to the Assignee under the Credit Agreement and the Notes or such
other documents as are necessary to indicate that all such payments are
subject to such rates at a rate reduced by an applicable tax treaty].
4. Following the execution of this Assignment and Acceptance by the Assignor
and the Assignee, it will be delivered to the Administrative Agent for
acceptance and recording by the Administrative Agent. The effective date of
this Assignment and Acceptance shall be the date of acceptance thereof by
the Administrative Agent, unless otherwise specified on Schedule I hereto
(the "Effective Date").
5. Upon such acceptance and recording by the Administrative Agent, as of the
Effective Date (i) the Assignee shall be a party to the Credit Agreement
and, to the extent provided in this Assignment and Acceptance, have the
rights and obligations under the Credit Agreement of a Lender thereunder
and (ii) the Assignor shall, to the extent provided in this Assignment and
Acceptance, relinquish its rights and be released from its obligations
under the Credit Agreement.
_________________________________
* If Assignee is organized under the laws of a jurisdiction outside of the
United States.
J-2
<PAGE>
6. Upon such acceptance and recording by the Administrative Agent, from and
after the Effective Date, the Administrative Agent shall make all payments
under the Credit Agreement and the Notes in respect of the interest
assigned hereby (including, without limitation, all payments of principal,
interest and fees with respect thereto) to the Assignee. The Assignor and
Assignee shall make all appropriate adjustments in payments under the
Credit Agreement and the Notes for periods prior to the Effective Date
directly between themselves.
7. This Assignment and Acceptance shall be governed by, and be construed and
interpreted in accordance with, the law of the State of New York without
regard to any choice or conflict of law provision or rule thereof that
would result in the application of the law of any other jurisdiction.
IN WITNESS WHEREOF, the parties hereto have caused this Assignment and
Acceptance to be executed by their respective officers thereunto duly
authorized, as of the date first above written, such execution being made on
Schedule I hereto.
J-3
<PAGE>
Exhibit K
Form of
Letter of Credit Request
_______________, _____
[Issuer], as Issuer
under the Credit Agreement referred
to below and to
Citicorp USA, Inc.
399 Park Avenue
New York, New York 10043
as the Administrative Agent
RE: National Steel Corporation
--------------------------
Dear Sirs:
Pursuant to Section 2.4 (Letters of Credit) of the Credit Agreement
dated as of November 19, 1999, with the financial institutions and other
entities from time to time party thereto as a Lender or Issuer and Citicorp USA,
Inc. as agent for the Lenders and Issuers, and Fuji Bank, Limited as syndication
agent for the Lenders and Issuers (said Credit Agreement, as it may be amended
or otherwise modified from time to time, being the "Credit Agreement" and
capitalized terms used herein but not defined herein being used herein as
defined in the Credit Agreement), this writing represents notice of the
undersigned's request for the issuance by the Issuer of a Letter of Credit on
behalf of the undersigned in the form of a [standby] [documentary] letter of
credit for the benefit of [Beneficiary], in the amount of [$________](the Dollar
Equivalent of which is _____ as of the date hereof), to be issued on ________,
____(the "Issue Date") and having an expiration date of _________, 200__.
The form of the requested Letter of Credit is attached hereto.
The undersigned hereby certifies that the amount of the Receivables
Availability as of the close of the business on the Business Day immediately
preceding the date hereof is ____ and the following statements are true on the
date hereof, and will be true on the date of the Proposed Borrowing, before and
after giving effect thereto and to the application of the proceeds therefrom:
(A) the representations and warranties contained in Article IV
(Representations and Warranties) of the Credit Agreement and in each
of the other Loan Documents are true and correct as though made on and
as of such date;
K-1
<PAGE>
(B) no Borrowing Base Deficiency exists or will result from the
Proposed Borrowing; and
(C) no Default or Event of Default exists or will result from
the Proposed Borrowing.
Very truly yours,
National Steel Corporation
By:___________________________
Name:
Title:
Accepted this ________ day
of _________________, 2000
CITICORP USA Inc.,
as Administrative Agent
By:___________________________
Name:
K-2
<PAGE>
EXHIBIT L
Eleventh Supplemental Indenture
Dated as of March 31, 1999
To
INDENTURE OF MORTGAGE AND DEED OF TRUST
Dated May 1, 1952
(See Exhibit 4-H of the Company's Annual Report on Form 10-K for the year ended
December 31, 1999)
<PAGE>
[LETTERHEAD OF CITIBANK USA, INC.]
January 26, 2000
To: National Steel Corporation
4100 Edison Lakes Parkway
Mishawaka, I.N. 46565-3440
Ladies and Gentlemen:
Reference is made to that certain Credit Agreement dated as of November 19, 1999
by and among National Steel Corporation ("Borrower"), with the financial
institutions and other entities from time to time party thereto as a Lender or
Issuer and Citicorp USA, Inc. as agent for the Lenders and Issuers
("Administrative Agent") and Fuji Bank, Limited as syndication agent for the
Lenders and Issuers (said Credit Agreement, as it may be amended or otherwise
modified from time to time, being the "Credit Agreement" and capitalized terms
used herein but not defined herein being used herein as defined in the Credit
Agreement).
The undersigned Requisite Lenders hereby consent to amending the first paragraph
of Exhibit G (Borrowing Base Certificate) to the Credit Agreement to read as
follows:
Pursuant to provisions of the Credit Agreement, dated as of November
19, 1999, among National Steel Corporation, a Delaware corporation
(the "Borrower"), with the financial institutions and other entities
from time to time party thereto as a Lender or Issuer and Citicorp
USA, Inc. as agent for the Lenders and Issuers, and Fuji Bank, Limited
as Syndication Agent (said Credit Agreement, as it may be amended or
otherwise modified from time to time, being the "Credit Agreement" and
capitalized terms used herein but not defined herein being used herein
as defined in the Credit Agreement), the undersigned hereby certifies
that the attached information is true, complete and correct as of the
close of business on ____________.
This consent is limited to the matters contained herein and nothing herein shall
be deemed a waiver of any provision of the Credit Agreement or the other Loan
Documents except as expressly provided herein.
This consent shall be governed by, and be construed and interpreted in
accordance with, the law of the State of New York.
This consent may be executed in one or more counterparts, each of which shall be
deemed an original and all of which shall constitute one and the same document
and one or more of which (or portions hereof) may be delivered by telecopier,
with the intention that they shall have the same effect as an original
counterpart hereof (or portions hereof).
<PAGE>
Very truly yours,
Citicorp USA, Inc.,
By:________________________________
Name:
Title:
Accepted and Agreed:
National Steel Corporation
By:________________________
Name:
Title:
Citicorp U.S.A., Inc.
as Administrative Agent
By:________________________
Title:
The Fuji Bank, Limited
as Syndication Agent
By:________________________
Title:
2
<PAGE>
Citibank, N.A.
as Issuer
By:_______________________
Title:
Lenders
Bank of America, N.A.
By:_______________________
Title:
Citicorp USA, Inc.
By:_______________________
Title:
Comerica Bank
By:_______________________
Title:
Morgan Guaranty Trust
Company of New York
By:_______________________
Title:
LaSalle Business Credit, Inc.
By:_______________________
Title:
3
<PAGE>
Mellon Bank, N.A.
By:_______________________
Title:
National City Commercial
Finance, Inc.
By:_______________________
Title:
The Fuji Bank, Limited
By:_______________________
Title:
4
<PAGE>
Amendment 1
To
National Steel Credit Agreement
Amendment 1 (this "Amendment"), dated as of April __, 2000, by and
among National Steel Corporation (the "Borrower"), the financial institutions
parties hereto (the "Consenting Lenders"), Citicorp USA, Inc. as agent for the
Lenders and Issuers under the Credit Agreement defined below (the
"Administrative Agent") and Fuji Bank, Limited as syndication agent for the
Lenders and Issuers under the Credit Agreement (defined below) (the "Syndication
Agent") to that certain Credit Agreement dated as of November 19, 1999 by and
among the Borrower, the Administrative Agent, the Syndication Agent and the
financial institutions and other entities from time to time party thereto as a
Lender or Issuer (said Credit Agreement, as it may be amended or otherwise
modified from time to time, being the "Credit Agreement" and capitalized terms
used herein but not defined herein being used herein as defined in the Credit
Agreement).
W i t n e s s e t h:
Whereas, the Borrower, the Consenting Lenders, the Administrative
Agent and the Syndication Agent are parties to the Credit Agreement and, as of
the date hereof, the Consenting Lenders holds more than sixty-six and two-third
percent (66 2/3rd %) of the aggregate outstanding amounts of the Commitments;
and
Whereas, the parties hereto wish to amend the terms of the Credit
Agreement as set forth herein;
Now, Therefore, in consideration of the foregoing, the mutual
covenants and obligations herein set forth and other good and valuable
consideration, the adequacy and receipt of which is hereby acknowledged, and in
reliance upon the representations, warranties and covenants herein contained,
the parties hereto, intending to be legally bound, hereby agree as follows:
Section 1. Amendment to Article 5 (Financial Covenants). Article 5 of the
Agreement is hereby amended by deleting in its entirety the lead-in paragraph of
Section 5.1 (Leverage Ratio) and substituting therefor the following:
The Borrower will maintain at the end of each
Quarter during the years set forth below a Leverage Ratio,
in each determined (x) in respect of Financial Covenant
Debt of the Borrower, on the last day of such Quarter and
(y) in respect of EBITDA of the Borrower, on the basis of
the four Quarters ending on the last day of such Quarter,
not in excess of the ratio set forth below for such
Quarter:
Section 2. Conditions of Effectiveness. Section 1 hereof shall become
effective when, and only when, the Administrative Agent shall have received
copies of this Amendment executed by the Borrower and Lenders constituting Super
Majority Lenders.
<PAGE>
Section 3. Representations and Warranties. The Borrower represents and
warrants to the Administrative Agent that this Amendment has been duly
authorized, executed and delivered by the Borrower and constitutes a legal,
valid and binding obligation of the Borrower, enforceable against the Borrower
in accordance with its terms.
Section 4. Reference to the Effect on the Loan Documents.
(a) Upon the effectiveness of Section 1 hereof, on and after the date
hereof, each reference in the Agreement to "this Agreement," "hereunder,"
"hereof," "herein," or words of like import, and each reference in the other
Loan Documents to the Agreement, shall mean and be a reference to the Agreement
as amended hereby.
(b) Except as specifically amended herein, the Agreement and all other
Loan Documents shall remain in full force and effect and are hereby ratified and
confirmed.
(c) The execution, delivery and effectiveness of this Amendment shall
not, except as expressly provided herein, operate as a waiver of any right,
power or remedy of the Lenders or the Administrative Agent under any of the Loan
Documents, nor constitute a waiver of any provision of any of the Loan
Documents.
Section 5. Execution in Counterparts. This Amendment may be executed in
any number of counterparts and by different parties hereto in separate
counterparts, each of which, when so executed and delivered, shall be deemed to
be an original and all of which taken together shall constitute but one and the
same instrument.
Section 6. Governing Law. This Amendment shall be governed by and
construed in accordance with the law of the State of New York.
Section 7. Headings. Section headings in this Amendment are included
herein for convenience of reference only and shall not constitute a part of this
Amendment for any other purpose.
[Signature Page Follows]
-2-
<PAGE>
In Witness Whereof, the parties hereto have caused this Amendment to
be executed by their respective officers and general partners thereunto duly
authorized, as of the date first above written.
National Steel Corporation
By:_________________________
Name:
Title:
Citicorp U.S.A., Inc.,
as Administrative Agent
By:_________________________
Name:
Title:
The Fuji Bank, Limited,
as Syndication Agent
By:_________________________
Name:
Title:
[Signature Page for Amendment 1 to the Credit Agreement]
<PAGE>
Citibank, N.A.,
as Issuer
By:_________________________
Name:
Title:
Lenders:
Bank Of America, N.A.
By:_________________________
Name:
Title:
Citicorp USA, Inc.
By:_________________________
Name:
Title:
Comerica Bank
By:_________________________
Name:
Title:
Morgan Guaranty Trust Company
Of New York
By:_________________________
Name:
Title:
[Signature Page for Amendment 1 to the Credit Agreement]
<PAGE>
LaSalle Business Credit, Inc.
By:_________________________
Name:
Title:
Mellon Bank, N.A.
By:_________________________
Name:
Title:
National City Commercial
Finance, Inc
By:_________________________
Name:
Title:
The Fuji Bank, Limited
By:_________________________
Name:
Title:
[Signature Page for Amendment 1 to the Credit Agreement]
<PAGE>
AMENDMENT NO. 2
TO
NATIONAL STEEL CREDIT AGREEMENT
AMENDMENT NO. 2, dated as of September 28, 2000 (this "Amendment No.
-------------
2"), to the Credit Agreement, dated as of November 19, 1999, as heretofore
-
amended (the "Credit Agreement"), by and among NATIONAL STEEL CORPORATION (the
----------------
"Borrower"), the financial institutions party thereto as lenders and issuers
--------
(the "Lenders and Issuers"), CITICORP USA, INC. as agent for the Lenders and
-------------------
Issuers under the Credit Agreement (the "Administrative Agent") and THE FUJI
--------------------
BANK, LIMITED as syndication agent for the Lenders and Issuers under the Credit
Agreement (the "Syndication Agent").
-----------------
W i t n e s s e t h:
WHEREAS, the Borrower has requested that the Lenders amend the Credit
Agreement as herein provided; and
WHEREAS, Lenders constituting the Requisite Lenders have agreed to
such amendment;
NOW, THEREFORE, in consideration of the premises and mutual covenants
contained herein, the parties hereto hereby agree as follows:
Section 1. Amendment to Section 8.5 (Restricted Payments). Section 8.5
(Restricted Payments) is hereby amended by deleting in its entirety the text
thereof and substituting therefor the following:
The Borrower will not, and will not permit any of its
Material Subsidiaries to, directly or indirectly, declare,
order, pay, make or set apart any sum for any Restricted
Payment; provided, however, that any Material Subsidiary may
make Restricted Payments to the Borrower or the Guarantor;
provided, further, that, except during the Cash Dominion
Period, the Borrower and its Material Subsidiaries may make
other Restricted Payments permitted under Section 4.06
(Limitation on Restricted Payments) of the Indenture up to
eighteen million Dollars ($18,000,000) in the aggregate.
Section 2. Conditions of Effectiveness. This Amendment No. 2 shall become
effective when, and only when, the Administrative Agent shall have received
copies of this Amendment No. 2 executed by the Borrower and Lenders constituting
the Requisite Lenders.
<PAGE>
Section 3. Representations and Warranties. The Borrower represents and
warrants to the Administrative Agent that this Amendment No. 2 has been duly
authorized, executed and delivered by the Borrower and constitutes a legal,
valid and binding obligation of the Borrower, enforceable against the Borrower
in accordance with its terms. After giving effect to this Amendment No. 2.,
each of the representations and warranties set forth in Article IV of the Credit
Agreement is true and correct on and as of the date hereof, and no Default or
Event of Default has occurred and is continuing.
Section 4. Reference to the Effect on the Loan Documents.
(a) Upon the effectiveness of this Amendment No. 2, on and after the
date hereof, each reference in the Agreement to "this Agreement," "hereunder,"
"hereof," "herein," or words of like import, and each reference in the other
Loan Documents to the Agreement, shall mean and be a reference to the Agreement
as amended hereby.
(b) Except as specifically amended herein, the Agreement and all
other Loan Documents shall remain in full force and effect and are hereby
ratified and confirmed.
(c) The execution, delivery and effectiveness of this Amendment No. 2
shall not, except as expressly provided herein, operate as a waiver of any
right, power or remedy of the Lenders or the Administrative Agent under any of
the Loan Documents, nor constitute a waiver of any provision of any of the Loan
Documents.
Section 5. Execution in Counterparts. This Amendment No. 2 may be executed
in any number of counterparts and by different parties hereto in separate
counterparts, each of which, when so executed and delivered, shall be deemed to
be an original and all of which taken together shall constitute but one and the
same instrument.
Section 6. Governing Law. This Amendment No. 2 shall be governed by and
construed in accordance with the law of the State of New York.
Section 7. Headings. Section headings in this Amendment No. 2 are included
herein for convenience of reference only and shall not constitute a part of this
Amendment No. 2 for any other purpose.
[Signature Page Follows]
-2-
<PAGE>
In Witness Whereof, the parties hereto have caused this Amendment to
be executed by their respective officers and general partners thereunto duly
authorized, as of the date first above written.
National Steel Corporation
By:_________________________
Name:
Title:
Citicorp U.S.A., Inc.,
as Administrative Agent
By:_________________________
Name:
Title:
The Fuji Bank, Limited,
as Syndication Agent
By:_________________________
Name:
Title:
[Signature Page for Amendment No. 2 to the Credit Agreement]
<PAGE>
Citibank, N.A.,
as Issuer
By:_________________________
Name:
Title:
Lenders:
Bank of America, N.A.
By:_________________________
Name:
Title:
Citicorp USA, Inc.
By:_________________________
Name:
Title:
Comerica Bank
By:_________________________
Name:
Title:
Morgan Guaranty Trust Company
of New York
By:_________________________
Name:
Title:
[Signature Page for Amendment No. 2 to the Credit Agreement]
<PAGE>
LaSalle Business Credit, Inc.
By:_________________________
Name:
Title:
Mellon Bank, N.A.
By:_________________________
Name:
Title:
National City Commercial
Finance, Inc.
By:_________________________
Name:
Title:
The Fuji Bank, Limited
By:_________________________
Name:
Title:
[Signature Page for Amendment No. 2 to the Credit Agreement]
