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United States
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------
FORM 10-K/A
(Amendment No. 1)
(Mark One)
[X]ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the fiscal year ended June 30, 1999
OR
[_]TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
From the transition period from to
Commission File Number 1-9820
----------------
BIRMINGHAM STEEL CORPORATION
(Exact Name of Registrant as Specified in its Charter)
<TABLE>
<S> <C>
Delaware 13-3213634
(State or other jurisdiction of (I.R.S.Employer
incorporation or organization) Identification Number)
1000 Urban Center Drive, Suite 300
Birmingham, Alabama 35242-2516
(Address of principal executive offices) (Zip Code)
</TABLE>
(205) 970-1200
(Registrant's telephone number, including area code)
----------------
Securities Registered pursuant to Section 12 (b) of the Act:
<TABLE>
<CAPTION>
Name of Each Exchange
Title of Each Class on Which Registered
------------------- ---------------------
<S> <C>
Common Stock, par value New York Stock
$0.01 per share Exchange
</TABLE>
Securities Registered pursuant to Section 12 (g) of the Act:
NONE
----------------
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such report), and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No [_]
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to
the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [X]
As of September 30, 1999, 29,732,615 shares of Common Stock of the
registrant were outstanding. On such date the aggregate market value of shares
(based upon the closing market price of the Company's Common Stock on the New
York Stock Exchange on September 30, 1999) held by non-affiliates was
$221,856,443. For purposes of this calculation only directors and officers are
deemed to be affiliates.
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DOCUMENTS INCORPORATED BY REFERENCE
Portions of our Proxy Statement for the 1999 Annual Meeting of Stockholders
are incorporated herein by reference in response to items 10 through 12 in
Part III of the Registrant's Annual Report on Form 10-K for the fiscal year
ended June 30, 1999 originally filed on October 13, 1999.
EXPLANATORY NOTE
The Registrant hereby amends its Annual Report on Form 10-K for the fiscal
year ended June 30, 1999, previously filed on October 13, 1999, solely to
include Exhibits 4.1.3, 4.1.4, 4.2.2, 4.2.3, 4.3, 10.18, 10.26.5 and
10.26.6 and to amend Part IV, Item 14(c) to reflect the inclusion of such
Exhibits.
1
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PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
ITEM 14 (c) EXHIBITS
<TABLE>
<CAPTION>
Exhibit Description of Exhibits
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<C> <S>
3.1 Restated Certificate of Incorporation of the Registrant (incorporated
by reference from Form 8-A, Exhibit 2.2, filed November 16, 1986)
3.2 By-laws of the Registrant as amended on August 3, 1999 (incorporated
by reference to Exhibit 3.1 from Current Report on Form 8-K filed
August 11, 1999)
4.1 Birmingham Steel Corporation $130,000,000 Senior Note Purchase
Agreement dated December 15, 1993 between the Registrant and the
following group of investors: The Equitable Life Assurance Society of
the U.S., The Guardian Life Insurance Company of America, Principal
Mutual Life Insurance Company, The Travelers Indemnity Company,
Jefferson-Pilot Life Insurance Company, Phoenix Home Life Mutual Life
Insurance Company, American United Life Insurance Company, Canada Life
Assurance Company, Canada Life Assurance Company of America, Canada
Life Assurance Company of New York, Ameritas Life Insurance
Corporation, Berkshire Life Insurance Company, Provident Mutual Life
Insurance Company-CALIC, Provident Mutual Life Insurance Company of
Philadelphia (incorporated by reference from Form 10-Q for quarter
ended December 31, 1993, Exhibit 4.1)
4.1.1 First Amendment to $130,000,000 Senior Note Purchase Agreement dated
October 18, 1996 (to be filed by amendment)
4.1.2 Second Amendment to $130,000,000 Senior Note Purchase Agreement dated
December 14, 1998 (incorporated by reference to Exhibit 10.3 from Form
10-Q for quarter ended December 31, 1998)
4.1.3* Waiver and Third Amendment to $130,000,000 Senior Note Purchase
Agreement dated as of October 12, 1999
4.1.4* Amended and Restated $130,000,000 Senior Note Purchase Agreement dated
as of October 12, 1999
4.2 Birmingham Steel Corporation $150,000,000 Senior Note Purchase
Agreement dated December 15, 1995 between the Registrant and the
following group of investors: Connecticut General Life Insurance
Company, Life Insurance Company of North America, CIGNA Property and
Casualty Insurance Company, Principal Mutual Life Insurance Company,
Nationwide Life Insurance Company, Employers Life Insurance Company of
Wausau, The Northwestern Mutual Life Insurance Company, The Equitable
Life Assurance Society of the United States, Sun Life Assurance
Company of Canada (U.S.), Sun Life Assurance Company of Canada, Sun
Life Insurance and Annuity Company of New York, The Minnesota Mutual
Life Insurance Company, Mutual Trust Life Insurance Company, The
Reliable Life Insurance Company, Federated Mutual Insurance Company,
Federated Life Insurance Company, Minnesota Fire and Casualty Company,
National Travelers Life Company, First National Life Insurance Company
of America, Guarantee Reserve Life Insurance Company, First Colony
Life Insurance Company, American United Life Insurance Company, The
State Life Insurance Company, Ameritas Life Insurance Company
(incorporated by reference from Form 10-Q for quarter ended December
31, 1995, Exhibit 4.1).
4.2.1 Amendment to $150,000,000 Senior Note Purchase Agreement dated
December 14, 1998 (incorporated by reference to Exhibit 10.2 from Form
10-Q for quarter ended December 31, 1998)
</TABLE>
2
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<TABLE>
<CAPTION>
Exhibit Description of Exhibits
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<C> <S>
4.2.2* Waiver and Second Amendment to $150,000,000 Senior Note Purchase
Agreement dated as of October 12, 1999
4.2.3* Amended and Restated $150,000,000 Senior Note Purchase Agreement dated
as of October 12, 1999
4.3* Letter from Birmingham Steel Corporation to Senior Noteholders dated
October 13, 1999
4.4 Shareholder Rights Plan of Registrant (incorporated by reference from
Form 8-K filed January 23, 1996)
4.5 Reimbursement Agreement, dated as of October 1, 1996, between
Birmingham Steel Corporation and PNC Bank, Kentucky, Inc.
(incorporated by reference from Form 10-Q for quarter ended December
31, 1996, exhibit 4.1)
10.1 1986 Stock Option Plan of Registrant, as amended (incorporated by
reference from Registration Statement on Form S-8 (No. 33-16648),
filed August 20, 1987)**
10.2 Amended and Restated Management Security Plan, effective January 1,
1994 (incorporated by reference from Form 10-K for year ended June 30,
1994, Exhibit 10.2)**
10.3 Steel Billet Sale and Purchase Master Agreement between American Steel
& Wire Corporation and QIT-Fer et Titane, Inc. dated July 1, 1994
(incorporated by reference from Annual Report on Form 10-K for year
ended June 30, 1995, Exhibit 10.3)
10.4 Supply Agreement, dated as of August 2, 1985, among MC Acquisition
Corp., Birmingham Bolt Company, Inc., Magna Corporation, Contractors
Material Co., Inc., and Hackney Steel Co., Inc. (incorporated by
reference from Registrant Statement No. 33-945, Exhibit 10.6.3, filed
November 20, 1985)
10.5 1989 Non-Union Employees' Stock Option Plan of the Registrant
(incorporated by reference from a Registration Statement on Form S-8,
Registration No. 33-30848, filed August 31, 1989, Exhibit 4.1)**
10.6 Restated Birmingham Steel Corporation 401(k) Plan restated as of
January 1, 1990 (incorporated by reference from Post-Effective
Amendment No. 1 to Form S-8, Registration No. 33-23563, filed July 12,
1990, Exhibit 4.1)**
10.7 Special Severance Benefits Plan of the Registrant (incorporated by
reference from the Annual Report on Form 10-K for the Year ended June
30, 1989, Exhibit 10.12)**
10.8 Lease Agreement, as amended, dated July 13, 1993 between Torchmark
Development Corporation and Birmingham Steel Corporation (incorporated
by reference from Annual Report on Form 10-K for year ended June 30,
1993, Exhibit 10.12)
10.8.1 Third Amendment to Lease Agreement, dated November 30, 1993, between
Torchmark Development Corporation and Birmingham Steel Corporation
(incorporated by reference from Annual Report on Form 10-K for year
ended June 30, 1997, Exhibit 10.8.1)
10.8.2 Fourth Amendment to Lease Agreement, dated June 13, 1994, between
Torchmark Development Corporation and Birmingham Steel Corporation
(incorporated by reference from Annual Report on Form 10-K for year
ended June 30, 1997, Exhibit 10.8.2)
10.8.3 Fifth Amendment to Lease Agreement, dated September 6, 1995, between
Torchmark Development Corporation and Birmingham Steel Corporation
(incorporated by reference from Annual Report on Form 10-K for year
ended June 30, 1997, Exhibit 10.8.3)
</TABLE>
3
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<TABLE>
<CAPTION>
Exhibit Description of Exhibits
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<C> <S>
10.8.4 Sixth Amendment to Lease Agreement, dated April 11, 1997, between
Torchmark Development Corporation and Birmingham Steel Corporation
(incorporated by reference from Annual Report on Form 10-K for year
ended June 30, 1997, Exhibit 10.8.4)
10.8.5 Seventh Amendment to Lease Agreement, dated April 11, 1997, between
Torchmark Development Corporation and Birmingham Steel Corporation
(incorporated by reference from Annual Report on Form 10-K for year
ended June 30, 1997, Exhibit 10.8.5)
10.8.6 Eighth Amendment to Lease Agreement, dated April 11, 1997, between
Torchmark Development Corporation and Birmingham Steel Corporation
(incorporated by reference from Annual Report on Form 10-K for the
year ended June 30, 1998, Exhibit 10.8.6)
10.9 1990 Management Incentive Plan of the Registrant (incorporated by
reference from a Registration Statement on Form S-8, Registration No.
33-41595, filed July 5, 1991, Exhibit 4.1)**
10.10 1992 Non-Union Employees' Stock Option Plan of the Registrant
(incorporated by reference from a Registration Statement on Form S-8,
Registration No. 33-51080, filed August 21, 1992, Exhibit 4.1)**
10.11 Employment Agreement, dated January 5, 1996 between Registrant and
Robert A. Garvey (incorporated by reference from Form 10-Q for quarter
ended December 31, 1995 exhibit 10.1)**
10.11.1 Amendment to Employment Agreement, dated January 5, 1996 between
Registrant and Robert A. Garvey dated August 10, 1998 (incorporated by
reference from Annual Report on Form 10-K for year ended June 30, 1998
Exhibit 10.11.1)**
10.11.2 Second Amendment to Employment Agreement, dated January 5, 1996
between Registrant and Robert A. Garvey dated September 20, 1999
(incorporated herein by reference to the same numbered exhibit
previously filed with the Registrant's Annual Report on Form 10-K for
the fiscal year ended June 30, 1999, as filed on October 13, 1999) **
10.12 Employment Agreement, dated May 11, 1999, between Registrant and Brian
F. Hill (incorporated herein by reference to the same numbered exhibit
previously filed with the Registrant's Annual Report on Form 10-K for
the fiscal year ended June 30, 1999, as filed on October 13, 1999) **
10.12.1 Amendment to Employment Agreement, dated September 21, 1999, between
Registrant and Brian F. Hill (incorporated herein by reference to the
same numbered exhibit previously filed with the Registrant's Annual
Report on Form 10-K for the fiscal year ended June 30, 1999, as filed
on October 13, 1999) **
10.13 Employment Agreement, dated September 20, 1999, between Registrant and
Kevin E. Walsh (incorporated herein by reference to the same numbered
exhibit previously filed with the Registrant's Annual Report on
Form 10-K for the fiscal year ended June 30, 1999, as filed on
October 13, 1999) **
10.15 Stock Accumulation Plan of the Registrant (incorporated by reference
from a Registration Statement on Form S-8, Registration No. 33-64069,
filed November 8, 1995, Exhibit 4.1)**
10.16 Lease Agreement, dated January 7, 1997, between Torchmark Development
Corporation and Birmingham Southeast LLC (incorporated by reference
from Annual Report on Form 10-K for year ended June 30, 1998, Exhibit
10.13)
10.17 Director Stock Option Plan of the Registrant (incorporated by
reference from Form 10-Q for quarter ended September 30, 1996, exhibit
10.1)**
10.18* Director Compensation Plan of the Registrant**
</TABLE>
4
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<TABLE>
<CAPTION>
Exhibit Description of Exhibits
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<C> <S>
10.19 Amended and Restated Executive Severance Plan of the Registrant
(incorporated herein by reference to the same numbered exhibit
previously filed with the Registrant's Annual Report on Form 10-K for
the fiscal year ended June 30, 1999, as filed on October 13, 1999) **
10.20 Chief Executive Officer Incentive Compensation Plan of the Registrant
(incorporated by reference from Form 10-Q for quarter ended September
30, 1996, exhibit 10.2)**
10.21 Equity Contribution Agreement among American Iron Reduction, L.L.C.,
GS Technologies Operating Co., Inc., Birmingham Steel Corporation and
Nationsbank, N.A., dated August 30, 1996 (incorporated by reference
from Form 10-Q for quarter ended September 30, 1996, exhibit 10.3)
10.22 DRI Purchase Agreement between Birmingham Steel Corporation and
American Iron Reduction, L.L.C., dated as of August 30, 1996
(incorporated by reference from Form 10-Q for quarter ended September
30, 1996, exhibit 10.4)
10.23 Operating Agreement between Birmingham Steel Corporation and Raw
Material Development Co., Ltd., dated as of September 18, 1996
(incorporated by reference from Form 10-Q for quarter ended September
30, 1996, exhibit 10.5)
10.24 Asset Purchase Agreement, dated as of October 31, 1996, among Mitsui
& Co., Ltd., R. Todd Neilson, as Chapter 11 Trustee for the
bankruptcy estate of Hiuka America Corporation, All-Ways Recycling
Company, B&D Auto & Truck Salvage, and Weiner Steel Corporation
(incorporated by reference from Form 10-Q for quarter ended December
31, 1996, exhibit 10.1)
10.25 Contribution Agreement, dated as of November 15, 1996, among IVACO,
Inc., Atlantic Steel Industries, Inc., Birmingham Steel Corporation
and Birmingham Southeast, LLC (incorporated by reference from Current
report on Form 8-K filed December 12, 1996)
10.26 $300 million Credit Agreement, dated as of March 17, 1997 by and
among Birmingham Steel Corporation, as Borrower, the financial
institutions party hereto and their assignees under section 12.5.(d),
as Lenders, PNC Bank, National Association and The Bank of Nova
Scotia, as Co-agents and Nationsbank, N.A. (South), as Agent and as
Arranger (incorporated by reference from Form 10-Q for quarter ended
March 31, 1997, exhibit 10.1)
10.26.1 First Amendment to Credit Agreement dated June 23, 1998 (incorporated
by reference to Exhibit 10.2 from Current Report on Form 8-K filed
September 30, 1999)
10.26.2 Second Amendment to Credit Agreement dated September 30, 1998
(incorporated by reference to Exhibit 10.1 from Form 10-Q for quarter
ended December 31, 1998)
10.26.3 Third Amendment to Credit Agreement dated July 27, 1999 (incorporated
by reference to Exhibit 10.4 from Current Report on Form 8-K filed
September 30, 1999)
10.26.4 Fourth Amendment to Credit Agreement dated September 28, 1999
(incorporated by reference to Exhibit 10.5 from Current Report on
Form 8-K filed September 30, 1999)
10.26.5* Fifth Amendment to Credit Agreement dated October 12, 1999
10.26.6* Collateral Agency and Intercreditor Agreement dated October 12, 1999
10.27 Executive Retirement and Compensation Deferral Plan of the Registrant
(incorporated by reference from Annual Report on Form 10-K for year
ended June 30, 1998, Exhibit 10.22)**
10.28 1997 Management Incentive Plan of the Registrant (incorporated by
reference from a Registration Statement on Form S-8, Registration No.
333-46771, filed February 24, 1998, Exhibit 4.6).**
22.1 Subsidiaries of the Registrant (incorporated herein by reference to
the same-numbered exhibit to the Registrant's Annual Report on
Form 10-K for the fiscal year ended June 30, 1999, as filed on
October 13, 1999)
</TABLE>
5
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<TABLE>
<CAPTION>
Exhibit Description of Exhibits
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<C> <S>
23.1 Consent of Ernst & Young LLP, Independent Auditors (incorporated
herein by reference to the same-numbered exhibit to the Registrant's
Annual Report on Form 10-K for the fiscal year ended June 30, 1999, as
filed on October 13, 1999)
23.2 Accountants' Consent (KPMG LLP) (incorporated herein by reference to
the same-numbered exhibit to the Registrant's Annual Report on
Form 10-K for the fiscal year ended June 30, 1999, as filed on
October 13, 1999)
27 Financial Data Schedule (incorporated herein by reference to the same-
numbered exhibit to the Registrant's Annual Report on Form 10-K for
the fiscal year ended June 30, 1999, as filed on October 13, 1999)
99.1 Risk Factors that May Affect Future Operating Results (incorporated
herein by reference to the same-numbered exhibit to the Registrant's
Annual Report on Form 10-K for the fiscal year ended June 30, 1999, as
filed on October 13, 1999)
</TABLE>
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* Being filed herewith
** Denotes a management contract or compensatory plan or arrangement required
to be filed as an exhibit to this report.
6
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed
on its behalf by the Undersigned, thereunto duly authorized.
BIRMINGHAM STEEL CORPORATION
/s/ Robert A. Garvey
By: _________________________________
Robert A. Garvey
Chairman of the Board, President and
CEO
(signing in his capacity as a duly
authoried officer of the Registrant
pursuant to Rule 12b-15)
October 19, 1999
Date: _______________________________
7
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================================================================================
EXHIBIT 4.1.3
BIRMINGHAM STEEL CORPORATION
-----------------------
WAIVER AND THIRD AMENDMENT TO NOTE PURCHASE AGREEMENT
-----------------------
Re:
Note Purchase Agreements Dated as of September 1, 1993
and
$130,000,000 Original Principal Amount of
7.28% Senior Notes Due December 15, 2005
DATED OCTOBER 12, 1999
================================================================================
<PAGE>
TABLE OF CONTENTS
PAGE
1. PRELIMINARY STATEMENT...................................................1
1.1 BACKGROUND..........................................................1
1.2 DEFINITIONS.........................................................3
2. AMENDMENTS AND WAIVERS..................................................6
2.1 AMENDMENT AND RESTATEMENT OF EXISTING NOTE PURCHASE AGREEMENT.......6
2.2 AMENDMENT AND RESTATEMENT OF EXISTING NOTES.........................6
2.3 WAIVERS OF EXISTING EVENTS OF DEFAULT...............................6
2.4 CONTINUITY AND AFFIRMATION OF OBLIGATIONS...........................6
3. REPRESENTATIONS AND WARRANTIES..........................................7
3.1 SUBSIDIARIES AND STOCK OWNERSHIP....................................7
3.2 CORPORATE EXISTENCE AND POWER.......................................7
3.3 CORPORATE AUTHORITY.................................................8
3.4 BINDING EFFECT......................................................8
3.5 NO CONFLICTS WITH AGREEMENTS, ETC...................................8
3.6 CONSENTS, ETC.......................................................9
3.7 FULL DISCLOSURE.....................................................9
3.8 OUTSTANDING DEBT AND LIENS..........................................9
3.9 PENDING LITIGATION.................................................10
3.10 NO DEFAULTS.......................................................10
3.11 COMPLIANCE WITH LAW...............................................10
3.12 TITLE TO PROPERTIES...............................................10
3.13 ENVIRONMENTAL COMPLIANCE..........................................11
3.14 RESTRICTIONS ON COMPANY AND SUBSIDIARIES..........................12
3.15 COLLATERAL........................................................13
3.16 SOLVENCY..........................................................14
4. CONDITIONS PRECEDENT...................................................15
4.1 CERTIFICATES.......................................................15
4.2 OPINIONS OF COUNSEL................................................16
4.3 OMNIBUS COLLATERAL AGREEMENT.......................................15
4.4 GUARANTY AGREEMENT.................................................16
4.5 1995 SECOND AMENDMENT..............................................16
4.6 FIFTH AMENDMENT TO CREDIT AGREEMENT................................16
4.7 LETTER OF CREDIT DOCUMENTS.........................................17
4.8 OTHER RELATED MATTERS..............................................17
4.9 INTERCREDITOR AGREEMENT............................................17
4.10 SECURITY DOCUMENTS................................................17
4.11 LIEN SEARCHES.....................................................19
4.12 RESTRUCTURING FEE.................................................19
4.13 PRIVATE PLACEMENT NUMBER..........................................19
4.14 PAYMENT OF SPECIAL COUNSEL AND FINANCIAL ADVISOR FEES.............19
4.15 LEASE LETTERS.....................................................20
4.16 PROCEEDINGS AND DOCUMENTS SATISFACTORY............................20
I
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TABLE OF CONTENTS
PAGE
5. MISCELLANEOUS..........................................................20
5.1 EFFECT OF AMENDMENT AND WAIVER.....................................20
5.2 NO LEGEND REQUIRED.................................................20
5.3 FEES AND EXPENSES..................................................20
***5.4 SURVIVAL........................................................21
5.5 DUPLICATE ORIGINALS; EXECUTION IN COUNTERPART......................21
5.6 RELEASE OF CLAIMS..................................................22
5.7 GOVERNING LAW......................................................22
Schedule 3.1 -- Subsidiaries
Schedule 3.8 -- Outstanding Debt and Liens
Schedule 3.14 -- Restrictive Agreements
Schedule 3.15 -- Recording Information
Exhibit A -- Amended and Restated Note Purchase Agreement
Exhibit B1 -- Form of Opinion of Special Company Counsel to the Company
and the Restricted Subsidiaries
Exhibit B2 -- Form of Opinion of Local Counsel to the Company and the
Restricted Subsidiaries
Exhibit B3 -- Form of Opinion of Special Counsel to the Collateral Agent
Exhibit C -- Form of Omnibus Collateral Agreement
Exhibit D -- Form of Guaranty Agreement
Exhibit E -- Form of Intercreditor Agreement
Exhibit F1 -- Form of Alabama Mortgage
Exhibit F2 -- Form of Florida Mortgage
Exhibit F3 -- Form of Illinois Mortgage
Exhibit F4 -- Form of Mississippi Mortgage
Exhibit F5 -- Form of Ohio Mortgage
Exhibit F6 -- Form of Tennessee Mortgage
Exhibit F7 -- Form of Washington Mortgage
Exhibit G -- Form of Security Agreement
Exhibit H -- Form of Trademark/Copyright Security Agreement
Exhibit I -- Form of Stock Pledge Agreement
Exhibit J -- Form of Note Pledge Agreement
II
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BIRMINGHAM STEEL CORPORATION
WAIVER AND THIRD AMENDMENT TO NOTE PURCHASE AGREEMENT
Re:
Note Purchase Agreements Dated as of September 1, 1993
and
$130,000,000 Original Principal Amount of
7.28% Senior Notes Due December 15, 2005
Dated October 12, 1999
To the Persons listed on
the signature pages hereof
Ladies and Gentlemen:
BIRMINGHAM STEEL CORPORATION, a Delaware corporation (together with its
successors and assigns, the "Company"), hereby agrees with you as follows:
1. PRELIMINARY STATEMENT.
1.1 Background.
(a) The Company entered into those certain Note Purchase Agreements
dated as of September 1, 1993, as amended by an Amendment to Note Purchase
Agreement dated as of October 18, 1996 and as further amended by Amendment
to 1993 Note Purchase Agreement dated as of December 14, 1998
(collectively, as in effect immediately prior to the Effective Date, the
"Existing Note Purchase Agreement," and as amended hereby, the "Amended
Note Purchase Agreement"), with each of the institutions named in Annex 1
thereto, under and pursuant to which the Company issued and sold to such
institutions an aggregate principal amount of One Hundred
<PAGE>
Thirty Million Dollars ($130,000,000) of the Company's 7.28% Senior Notes
due December 15, 2005 (as in effect immediately prior to the Effective
Date, the "Existing Notes," and as amended hereby, the "Amended Notes").
(b) The institutions (other than the Company) listed on the signature
pages to this Agreement (collectively, the "Noteholders") are the holders
of one hundred percent (100%) of the Existing Notes outstanding as of the
Effective Date.
(c) The Company entered into those certain Note Purchase Agreements
dated as of September 15, 1995, with each of the institutions named in
Annex 1 thereto (together with their successors and assigns, the "1995
Noteholders"), as amended by an Amendment to 1995 Note Purchase Agreement
dated as of December 14, 1998 (collectively, as in effect immediately prior
to the Effective Date, the "1995 Existing Note Purchase Agreement," and, as
amended by a Waiver and Second Amendment to 1995 Note Purchase Agreement
dated as of the date hereof (the "1995 Second Amendment"), the "1995
Amended Note Purchase Agreement"), under and pursuant to which the Company
issued and sold to such institutions (i) an aggregate principal amount of
Seventy-Six Million Dollars ($76,000,000) of the Company's 6.96% Series A
Senior Notes due December 15, 2002, (ii) an aggregate principal amount of
Fourteen Million Dollars ($14,000,000) of the Company's 7.07% Series B
Senior Notes due December 15, 2005, and (iii) an aggregate principal amount
of Sixty Million Dollars ($60,000,000) of the Company's 7.17% Series C
Senior Notes due December 15, 2005 (collectively, the "1995 Notes").
(d) The Company entered into that certain Credit Agreement dated as of
March 17, 1997 (as in effect immediately prior to the Effective Date, the
"Existing Credit Agreement," and as heretofore amended and as amended by a
Fifth Amendment to Credit Agreement dated as of the date hereof (the "Fifth
Amendment"), the "Amended Credit Agreement"), by and among the Company, the
banks party thereto (collectively, the "Banks"), and Bank of America, N.A.,
as agent (the "Agent"), pursuant to which a Three Hundred Million Dollar
($300,000,000) credit facility has been provided to the Company.
(e) Bank of America, N.A. and PNC Bank, National Association
(collectively, the "L/C Issuers") have separately provided the Company with
three (3) letters of credit (collectively, the "Letters of Credit") which
have an aggregate face amount of Fifty-One Million Nine Hundred
Ninety-Three Thousand One Hundred Fifty-One Dollars ($51,993,151), which
Letters of
2
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Credit were issued pursuant to (i) an Amended and Restated Reimbursement
Agreement, dated as of October 12, 1999, among the Company, American Steel
& Wire Corporation and Bank of America, N.A. (as amended, the "B of A
Reimbursement Agreement"), (ii) a Reimbursement Agreement dated as of
October 1, 1996, between PNC Bank, National Association successor to PNC
Bank, Kentucky, Inc. and the Company (as amended, "PNC Reimbursement
Agreement One") and (iii) a Reimbursement Agreement dated as of August 15,
1995 between the Company and PNC Bank, National Association, successor to
PNC Bank, Kentucky, Inc. ("PNC Reimbursement Agreement Two," and
collectively with the B of A Reimbursement Agreement and PNC Reimbursement
Agreement One, the "Existing Reimbursement Agreements").
(f) The Company has notified the Noteholders, the 1995 Noteholders,
the Banks and the L/C Issuers of certain Defaults and Events of Default
under, and as defined in, the Existing Note Purchase Agreement, the 1995
Existing Note Purchase Agreement, the Existing Credit Agreement and the
Existing Reimbursement Agreements, respectively.
(g) The Company requests the amendment and restatement of the Existing
Note Purchase Agreement and the waiver of the existing Defaults and Events
of Default specified herein, and, in exchange therefor, the Company agrees
to amend and restate the Existing Notes to, among other things, increase
the interest rate applicable thereto, to cause one or more of its
Restricted Subsidiaries to enter into the Guaranty Agreement, and to grant,
and to cause one or more of its Restricted Subsidiaries to grant, the
security interests described in the Security Documents to the Collateral
Agent for the ratable benefit of the Noteholders, the 1995 Noteholders, the
Banks and the L/C Issuers and for the benefit of the Indenture Trustee and
the Owner Trustee.
(h) The Noteholders are agreeable, subject to the terms and conditions
set forth herein, to amending and restating in full the Existing Note
Purchase Agreement and the Existing Notes as provided herein.
1.2 Definitions.
Capitalized terms used but not specifically defined in this Agreement have
the respective meanings assigned to them in the Existing Note Purchase
Agreement. As used in this Agreement, the following terms have the respective
meanings specified below or set forth in the Section hereof following such term:
Acceptable SBQ Asset Sale - has the meaning specified in the
3
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Amended Note Purchase Agreement.
Agent - Section 1.1(d).
Agreement, this - means this Waiver and Third Amendment to Note
Purchase Agreement, as it may be amended or otherwise modified from time to
time.
Amended Credit Agreement - Section 1.1(d).
Amended Note Purchase Agreement - Section 1.1(a).
Amended Notes - Section 1.1(a).
Banks - Section 1.1(d).
B of A Reimbursement Agreement - Section 1.1(e).
Collateral Agent - means State Street Bank and Trust Company, in its
capacity as collateral agent under the Intercreditor Agreement.
Company - the introductory sentence.
Effective Date - Section 4.
Existing Credit Agreement - Section 1.1(d).
Existing Note Purchase Agreement - Section 1.1(a).
Existing Notes - Section 1.1(a).
Existing Reimbursement Agreements - Section 1.1(e).
Fifth Amendment - Section 1.1(d).
Financing Documents - means, collectively, this Agreement, the Omnibus
Collateral Agreement, the Intercreditor Agreement, the Guaranty Agreement
and each of the Security Documents, in each case, as may be amended or
otherwise modified from time to time.
Guaranty Agreement - Section 4.4.
Indenture Trustee - has the meaning set forth in the Intercreditor
Agreement.
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Intercreditor Agreement - Section 4.9.
L/C Issuers - Section 1.1(e).
Letters of Credit - Section 1.1(e).
Mortgages - Section 4.10(a).
1995 Amended Note Purchase Agreement - Section 1.1(c).
1995 Existing Note Purchase Agreement - Section 1.1(c).
1995 Noteholders - Section 1.1(c).
1995 Notes - Section 1.1(c).
1995 Second Amendment - Section 1.1(c).
Note Pledge Agreement - Section 4.10(e).
Noteholders - Section 1.1(b).
Omnibus Collateral Agreement - Section 4.3.
Operative Agreements - has the meaning specified in Appendix A to that
certain Participation Agreement (Birmingham Steel Trust 97-1), dated as of
September 30, 1997, among the Company, as lessee, the Owner Trustee, the
Indenture Trustee and the institutional lenders party thereto, as amended.
Owner Trustee - has the meaning set forth in the Intercreditor
Agreement.
PNC Reimbursement Agreement One - Section 1.1(e).
PNC Reimbursement Agreement Two - Section 1.1(e).
Security Agreement - Section 4.10(b).
Security Documents - means, collectively, each of the Mortgages, the
Security Agreement, the Trademark/Copyright Security Agreement, the Stock
Pledge Agreement and the Note Pledge Agreement.
Stock Pledge Agreement - Section 4.10(d).
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Trademark/Copyright Security Agreement - Section 4.10(c).
Transaction Documents - has the meaning specified in the Omnibus
Collateral Agreement.
2. AMENDMENTS AND WAIVERS
2.1 Amendment and Restatement of Existing Note Purchase Agreement.
The Existing Note Purchase Agreement (including Exhibit A) is hereby
amended and restated in full in the form attached hereto as Exhibit A. On the
Effective Date, the Amended Note Purchase Agreement shall supercede and replace
the Existing Note Purchase Agreement and the Existing Note Purchase Agreement
will cease to be of further force and effect.
2.2 Amendment and Restatement of Existing Notes.
(a) The form of the Existing Notes attached to the Existing Note
Purchase Agreement as Exhibit A is hereby amended and restated in full in
the form attached as Exhibit A to the Amended Note Purchase Agreement.
(b) All Existing Notes outstanding on the Effective Date are hereby,
without any further action being required on the part of the Noteholders or
on the part of any other Person, deemed to be conformed to the form of
Amended Note attached to the Amended Note Purchase Agreement as Exhibit A.
The outstanding Amended Notes shall be and are entitled to all of the
rights and benefits provided therefor in the Amended Note Purchase
Agreement.
2.3 Waivers of Existing Events of Default.
Each existing Default and Event of Default under the Existing Note Purchase
Agreement arising as a result of facts, circumstances or events in effect or
existence on or prior to the effectiveness of this Agreement on the date hereof
is hereby permanently and irrevocably waived and the Company and the Noteholders
hereby agree that each such existing Default and Event of Default shall be
deemed to have been permanently and irrevocably waived as of the date of the
initial occurrence thereof.
2.4 Continuity and Affirmation of Obligations.
Notwithstanding any other provision of this Agreement or any other document
or agreement, the indebtedness of the Company under the Existing Note
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Purchase Agreement and the Existing Notes shall not be or be deemed to be paid
or discharged or novated hereby and shall continue in full force and effect as
amended hereby.
3. REPRESENTATIONS AND WARRANTIES
To induce the Noteholders to enter into this Agreement, the Company makes
the representations and warranties set forth in this Section 3. The Company
agrees and acknowledges that for purposes of Section 10.1(e) of the Amended Note
Purchase Agreement, its representations and warranties, as set forth in this
Agreement, are and constitute representations and warranties furnished in
connection with the Amended Note Purchase Agreement.
3.1 Subsidiaries and Stock Ownership.
Schedule 3.1 hereto states the name of each Subsidiary (indicating which
Subsidiaries are Restricted Subsidiaries), its jurisdiction of incorporation and
the percentage of its Voting Stock owned by the Company and each other
Subsidiary. Each of the Company and the Subsidiaries has good and marketable
title to all of the shares it purports to own of the stock of each Subsidiary,
free and clear in each case of any Lien. All such shares have been duly issued
and are fully paid and nonassessable.
3.2 Corporate Existence and Power.
Each of the Company and the Subsidiaries:
(a) is a corporation duly incorporated, validly existing and in good
standing under the laws of its jurisdiction of incorporation;
(b) has the legal and corporate power and authority necessary to own
and operate its Properties and to carry on its business as now conducted
and as presently proposed to be conducted;
(c) has all necessary licenses, certificates, permits, franchises and
other governmental authorizations necessary to own and operate its
Properties and to carry on its business as now conducted and as presently
proposed to be conducted, except where the failure to have such licenses,
certificates and permits, in the aggregate for all such failures, could not
reasonably be expected to have a Material Adverse Effect;
(d) has duly qualified or has been duly licensed, and is authorized to
do business and is in good standing, as a foreign corporation, in each
state
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where the failure to be so qualified or licensed and authorized and in good
standing could reasonably be expected to have a Material Adverse Effect;
and
(e) has, in the case of each Restricted Subsidiary, all requisite
power and authority to execute, deliver and perform its obligations under
each Financing Document to which it is a party.
3.3 Corporate Authority.
The execution, delivery and performance by the Company and each Restricted
Subsidiary of each Financing Document to which the Company or such Restricted
Subsidiary is a party, and the performance by the Company of the Amended Note
Purchase Agreement and the Amended Notes, is within the corporate powers of the
Company or such Restricted Subsidiary, as the case may be, and has been duly
authorized by all necessary corporate action on the part of the board of
directors (no action on the part of the stockholders of the Company or any such
Restricted Subsidiary being required by law, other than such actions which have
been duly taken), of the Company or such Restricted Subsidiary.
3.4 Binding Effect.
Each Financing Document to which the Company or any Restricted Subsidiary
is a party has been duly executed by the Company or such Restricted Subsidiary
and each Financing Document, the Amended Note Purchase Agreement and each
Amended Note is a legal, valid and binding obligation of the Company or such
Restricted Subsidiary, as the case may be, enforceable against the Company or
such Restricted Subsidiary in accordance with its terms, except as such
enforceability may be limited by bankruptcy, insolvency or similar laws
affecting the enforcement of creditors' rights generally, or by general
principles of equity.
3.5 No Conflicts with Agreements, Etc.
Neither the execution and delivery by the Company or any Restricted
Subsidiary of any Financing Document to which it is a party, nor the fulfillment
of, or compliance with, the terms and provisions of any Financing Document, the
Amended Note Purchase Agreement or the Amended Notes, will conflict with, or
result in a breach or violation of any term, condition or provision of, or
constitute a default under, or result in the creation of any Lien (other than
Liens under the Security Documents) on any Property of the Company or such
Restricted Subsidiary pursuant to its charter or by-laws, or any contract,
agreement, mortgage, indenture, lease or instrument to which it is a party or by
which it is bound or to which it or any of its Property is subject, or any
order, statute, law, rule or regulation to which it or any of its Property is
subject.
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3.6 Consents, Etc.
No consent, approval or authorization of, or declaration, registration or
filing (except as contemplated under Section 4) with, any Governmental Authority
or any nongovernmental Person, including, without limitation, any creditor
(other than the 1995 Noteholders, the Banks and the L/C Issuers) or stockholder
of the Company or any Restricted Subsidiary, is required in connection with the
execution or delivery by the Company or any Restricted Subsidiary of any
Financing Document to which it is a party or the performance by the Company or
such Restricted Subsidiary of its obligations under any Financing Document, the
Amended Note Purchase Agreement or the Amended Notes, or as a condition to the
legality, validity or enforceability of any such Financing Document, the Amended
Note Purchase Agreement or the Amended Notes, except, in each case, those which
have been obtained or which are contemplated by the Transaction Documents.
3.7 Full Disclosure.
The financial statements and other written statements, certificates and
materials provided to the Noteholders pursuant to the Existing Note Purchase
Agreement and the written statements, certificates and materials furnished by or
on behalf of the Company to you in connection with this Agreement and the
transactions contemplated hereby do not contain any untrue statement of a
material fact or omit a material fact necessary to make the statements contained
therein or herein not misleading in light of the circumstances in which they
were made. Except as disclosed (i) in the Company's Annual Report on Form 10-K
for the fiscal year ended June 30, 1998, (ii) in the other reports filed by the
Company with the Securities and Exchange Commission after June 30, 1998, (iii)
in press releases issued by the Company prior to the Effective Date, or (iv) to
you or Nightingale Associates, LLC in writing, there is no fact known to the
Company which materially affects adversely or, so far as the Company can now
reasonably foresee, will materially affect adversely the business, prospects,
profits, Properties or condition (financial or otherwise) of the Company and the
Subsidiaries, taken as a whole, or the ability of the Company and each
Restricted Subsidiary to perform its obligations set forth in the Financing
Documents to which it is a party or, in the case of the Company, the Amended
Note Purchase Agreement or the Amended Notes.
3.8 Outstanding Debt and Liens.
Schedule 3.8 hereto sets forth a correct and complete schedule and brief
description of all Debt of the Company and the Subsidiaries outstanding on the
Effective Date and all consensual Liens securing such Debt. There are no Liens
on any of the Property of the Company or any Restricted Subsidiary except Liens
permitted by Section 8.17(a) of the Amended Note Purchase Agreement.
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3.9 Pending Litigation.
There are no proceedings, actions or investigations pending or, to the
knowledge of the Company, threatened against or affecting the Company or any
Subsidiary in any court or before any Governmental Authority or arbitration
board or tribunal (a) challenging, or in any way dealing with, the legality,
validity or enforceability of any Financing Document, the Amended Note Purchase
Agreement or the Amended Notes or the authority of the Company or any Restricted
Subsidiary to enter into or execute any Financing Document, the Amended Note
Purchase Agreement or the Amended Notes, or (b) except as disclosed (i) in the
Company's Annual Report on Form 10-K for the fiscal year ended June 30, 1998,
(ii) in the other reports filed by the Company with the Securities and Exchange
Commission after June 30, 1998, (iii) in press releases issued by the Company
prior to the Effective Date, or (iv) to you or Nightingale Associates, LLC in
writing, that, in the aggregate for all such proceedings, actions and
investigations, could reasonably be expected to have a Material Adverse Effect.
3.10 No Defaults.
No event has occurred and is continuing and no condition exists which, upon
execution and delivery of this Agreement (and giving effect to Section 2.3) and
the other Transaction Documents, would constitute a Default or Event of Default.
Neither the Company nor any Subsidiary is in violation in any respect of any
term of any charter instrument or by-law and neither the Company nor any
Subsidiary is in default in the payment of principal or interest on any Debt or
in default under any instrument or instruments or agreements under and subject
to which any Debt has been issued and no event has occurred and is continuing
under the provisions of any such instrument or agreement which with the lapse of
time or the giving of notice, or both, would constitute a default or an event of
default thereunder, which individually or in the aggregate could reasonably be
expected to have a Material Adverse Effect.
3.11 Compliance with Law.
Neither the Company nor any Subsidiary is in violation of any law,
ordinance, governmental rule or regulation to which it is subject, except for
such violations that, in the aggregate, could not reasonably be expected to have
a Material Adverse Effect.
3.12 Title to Properties.
(a) Each of the Company and the Subsidiaries has good and marketable
title to all real Property, and good title to all of the other
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Property, reflected in the most recent balance sheet delivered pursuant to
Section 9.1 of the Existing Note Purchase Agreement (except as sold or
otherwise disposed of in the ordinary course of business), except for such
failures to have such good and marketable title as are immaterial to such
financial statements and that, in the aggregate for all such failures,
could not reasonably be expected to have a Material Adverse Effect. All
such Property is free from Liens not permitted by Section 8.17 of the
Amended Note Purchase Agreement.
(b) Upon execution and delivery of this Agreement and the other
Transaction Documents, each lease of real Property in the name or for the
benefit of the Company or any Subsidiary is valid and subsisting and in
full force and effect and good standing, except for such failures to be
valid and subsisting and in full force and effect and good standing that,
in the aggregate, could not reasonably be expected to have a Material
Adverse Effect.
(c) Each of the Company and the Subsidiaries owns, possesses or has
the right to use all of the patents, trademarks, service marks, trade
names, copyrights and licenses, and rights with respect thereto, necessary
for the present and currently planned future conduct of its business,
without any known conflict with the rights of others, except for such
failures to own, possess, or have the right to use, that, in the aggregate
for all such failures, could not reasonably be expected to have a Material
Adverse Effect.
3.13 Environmental Compliance.
Except as disclosed (i) in the Company's Annual Report on Form 10-K for
the fiscal year ended June 30, 1998, (ii) in the other reports filed by the
Company with the Securities and Exchange Commission after June 30, 1998, (iii)
in press releases issued by the Company prior to the Effective Date, or (iv) to
the Noteholders or Nightingale Associates, LLC in writing:
(a) Compliance -- each of the Company and the Subsidiaries is in
compliance with all Environmental Protection Laws in effect in each
jurisdiction where it is presently doing business, and in which the failure
so to comply could be reasonably expected to have a Material Adverse
Effect;
(b) Liability -- neither the Company nor any of the Subsidiaries is
subject to any liability under any Environmental Protection Laws that, in
the aggregate, could reasonably be expected to have a Material Adverse
Effect; and
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(c) Notices -- neither the Company nor any Subsidiary has received any
(i) notice from any Governmental Authority by which any of its
present or previously-owned or leased real Properties has been
designated, listed, or identified in any manner by any Governmental
Authority charged with administering or enforcing any Environmental
Protection Law as a Hazardous Substance disposal or removal site,
"Super Fund" clean-up site, or candidate for removal or closure
pursuant to any Environmental Protection Law,
(ii) notice of any Lien arising under or in connection with any
Environmental Protection Law that has attached to any revenues of, or
to, any of its owned or leased real Properties, or
(iii) summons, citation, notice, directive, letter, or other
communication, written or oral, from any Governmental Authority
concerning any intentional or unintentional action or omission by the
Company or such Subsidiary in connection with its ownership or leasing
of any real Property resulting in the releasing, spilling, leaking,
pumping, pouring, emitting, emptying, dumping, or otherwise disposing
of any Hazardous Substance into the environment resulting in any
material violation of any Environmental Protection Law,
in each case where the effect of the matters that are the subject of any
such notice, summons, citation, directive, letter or other communication
could reasonably be expected to have a Material Adverse Effect.
3.14 Restrictions on Company and Subsidiaries.
Neither the Company nor any Subsidiary:
(a) except as set forth in Schedule 3.14 hereto, is a party to any
contract or agreement, or subject to any charter or other corporate
restriction that, in the aggregate for all such contracts, agreements,
charter and corporate restrictions, could reasonably be expected to have a
Material Adverse Effect;
(b) is a party to any contract or agreement that restricts the right
or ability of such corporation to incur Debt, other than the Amended Note
Purchase Agreement, the 1995 Amended Note Purchase Agreement, the Amended
Credit Agreement, any other Transaction Document and the agreements listed
in Schedule 3.14 hereto, the terms of none of which is
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violated by the execution and delivery by the Company or any Restricted
Subsidiary of the Financing Documents to which it is a party, or compliance
by the Company or any Restricted Subsidiary with the Financing Documents to
which it is a party or, in the case of the Company, the Amended Note
Purchase Agreement and the Amended Notes; and
(c) has agreed or consented to cause or permit in the future (upon the
happening of a contingency or otherwise) any of its Property, whether now
owned or hereafter acquired, to be subject to a Lien not permitted by
Section 8.17 of the Amended Note Purchase Agreement.
3.15 Collateral.
(a) Collateral Documents.
(i) Mortgages. Each Mortgage creates a valid Lien upon the
grantor's right, title and interest in the real property and interests
described therein in favor of the Collateral Agent, and when such
document has been recorded as indicated on Schedule 3.15 and all
appropriate recording fees and taxes have been paid, such Lien shall
be a perfected first priority Lien subject to no other Liens except to
the extent permitted by Section 8.17 of the Amended Note Purchase
Agreement;
(ii) Security Agreement. The Security Agreement creates a valid
Lien in and to the Collateral (as defined in the Security Agreement)
in favor of the Collateral Agent, and when all UCC-1 financing
statements required by the Security Agreement to be filed with public
recording offices have been so filed, and all taxes, recording fees
and other fees and charges required by applicable law to be paid in
connection therewith have been duly paid in full, such Lien shall be a
perfected, first priority Lien on the Collateral of a type which may
be perfected by the filing of a UCC financing statement or by
possession, subject to no Liens except to the extent permitted by
Section 8.17 of the Amended Note Purchase Agreement;
(iii) Trademark/Copyright Security Agreement. The
Trademark/Copyright Security Agreement creates a valid Lien in and to
the Trademark Collateral, Copyright Collateral and Related Assets (as
such terms are defined in the Trademark/Copyright Security Agreement)
in favor of the Collateral Agent, and upon the filing thereof with the
United States Patent and Trademark Office or the United States
Copyright Office and the filing of UCC-1 financing statements
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as therein provided for, such Lien will be a perfected first priority
Lien in and to the Trademark Collateral, Copyright Collateral and
Related Assets in which a Lien may be perfected by the filing of a UCC
financing statement or filing with the United States Patent and
Trademark Office or the United States Copyright Office, subject to no
Liens except to the extent permitted by Section 8.17 of the Amended
Note Purchase Agreement;
(iv) Stock Pledge Agreement. The Stock Pledge Agreement creates a
valid Lien in and to the Pledged Collateral (as defined in the Stock
Pledge Agreement) in favor of the Collateral Agent, and upon delivery
of certificates or instruments evidencing the Pledged Collateral to
the Collateral Agent and the filing of related UCC-1 Financing
Statements, such Lien will be a perfected first priority Lien in and
to such of the Pledged Collateral as to which a Lien may be perfected
by delivery, subject to no Liens except to the extent permitted by
Section 8.17 of the Amended Note Purchase Agreement; and
(v) Note Pledge Agreement. The Note Pledge Agreement creates a
valid Lien in and to the Pledged Collateral (as defined in the Note
Pledge Agreement) in favor of the Collateral Agent, and upon delivery
of the instrument or instruments evidencing the Pledged Collateral to
the Collateral Agent and the filing of related UCC-1 Financing
Statements, such Lien will be a perfected first priority Lien in and
to such of the Pledged Collateral as to which a Lien may be perfected
by delivery, subject to no Liens except to the extent permitted by
Section 8.17 of the Amended Note Purchase Agreement.
(b) Warranties and Representations True. All warranties and
representations made by the Company and the Restricted Subsidiaries in each
of the Security Documents are true and correct as of the date hereof.
3.16 Solvency.
After giving effect to the transactions contemplated by the Transaction
Documents, (a) the fair value and the fair salable value of the assets of the
Company and each Restricted Subsidiary (excluding any Debt due from any
Affiliate of the Company or such Restricted Subsidiary, as the case may be) will
each be in excess of the fair valuation of its total liabilities (including all
contingent liabilities), (b) the Company and each Restricted Subsidiary will be
able to pay its debts or other obligations in the ordinary course as they
mature, and (c) the Company and each Restricted Subsidiary has capital not
unreasonably small to
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carry on its business and all business in which it proposes to be engaged.
4. CONDITIONS PRECEDENT
The amendments and the waivers set forth in Sections 2.1, 2.2 and 2.3 shall
become effective upon the satisfaction of the following conditions (the date of
such effectiveness is herein referred to as the "Effective Date"):
4.1 Certificates.
(a) Company Officer's Certificate. The Company shall have delivered to
the Noteholders (or their special counsel) a certificate signed by the
Chairman, the Vice Chairman, the President or the Executive Vice
President-Chief Financial Officer of the Company, dated the Effective Date,
certifying that (i) no Default or Event of Default under the Amended Note
Purchase Agreement exists and (ii) the representations and warranties set
forth in Section 3 and in each of the other Financing Documents (excluding,
however, for purposes of such officer's certificate, Section 2 of the
Amended Note Purchase Agreement) are true and correct on the Effective
Date. Such officer's certificate may expressly state that it is not
certifying as to the accuracy of the representations and warranties set
forth in Section 2 of the Amended Note Purchase Agreement.
(b) Company Secretary's Certificate. The Company shall have delivered
to the Noteholders a certificate signed by Secretary or one of the
Assistant Secretaries of the Company, dated the Effective Date, certifying
as true and correct copies of the Company's charter and by-laws and the
resolutions attached thereto and other corporate proceedings relating to
the authorization, execution and delivery of each of the Financing
Documents to which the Company is a party.
(c) Subsidiary Secretary's Certificates. Each Restricted Subsidiary
entering into one or more of the Financing Documents shall have delivered
to the Noteholders a certificate signed by the Secretary or one of the
Assistant Secretaries of such Restricted Subsidiary, dated the Effective
Date, certifying as true and correct copies of such Restricted Subsidiary's
charter and by-laws and the resolutions attached thereto and other
corporate proceedings relating to the authorization, execution and delivery
of the Financing Documents to which such Restricted Subsidiary is a party.
4.2 Opinions of Counsel.
The Noteholders shall have received opinions from
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(a) Balch & Bingham, special counsel for the Company and the
Restricted Subsidiaries,
(b) special local counsel for the Company and the Restricted
Subsidiaries in the States of Florida, Georgia, Illinois, Mississippi,
Ohio, New York, Tennessee and Washington, and
(c) Shipman & Goodwin, special counsel for the Collateral Agent,
each dated as of the Effective Date, substantially in the respective forms set
forth in Exhibit B1, Exhibit B2 and Exhibit B3, and as to such other matters as
the Noteholders may reasonably request. The Noteholders also shall have received
an opinion from Bingham Dana LLP, special counsel for the Noteholders, in form
and substance satisfactory to the Noteholders.
4.3 Omnibus Collateral Agreement.
The Omnibus Collateral Agreement, in the form of Exhibit C hereto (the
"Omnibus Collateral Agreement"), shall be duly executed and delivered to the
Noteholders (or their special counsel) by the Company and each of the Restricted
Subsidiaries identified on the signature pages thereto.
4.4 Guaranty Agreement.
The Guaranty Agreement, in the form of Exhibit D hereto (the "Guaranty
Agreement"), shall be duly executed by each of the Restricted Subsidiaries
identified on the signature pages thereto in favor of the Collateral Agent and
delivered to the Noteholders (or their special counsel).
4.5 1995 Second Amendment.
The Company and the 1995 Noteholders shall have executed and delivered to
the Noteholders (or their special counsel) a counterpart of the 1995 Second
Amendment.
4.6 Fifth Amendment to Credit Agreement.
The Company, the Banks and the Agent shall have executed and delivered to
the Noteholders (or their special counsel) a copy of the Fifth Amendment, which
shall be in form and substance satisfactory to the Noteholders and their special
counsel.
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4.7 Letter of Credit Documents.
The Company shall have executed and delivered to the Noteholders (or their
special counsel) a copy of each of the following Letter of Credit documents:
(a) the B of A Reimbursement Agreement,
(b) PNC Reimbursement Agreement One, and
(c) PNC Reimbursement Agreement Two,
each of which shall be in form and substance satisfactory to the Noteholders and
their special counsel.
4.8 Other Related Matters.
The Company shall have delivered a letter addressed to the Noteholders with
respect to certain other matters relating to the Transaction Documents the
receipt of which shall have been acknowledged by special counsel to the
Noteholders.
4.9 Intercreditor Agreement.
The Banks, the 1995 Noteholders, the L/C Issuers, State Street Bank and
Trust Company, the Company, the Owner Trustee, the Indenture Trustee and each of
the Restricted Subsidiaries identified on the signature pages thereto, shall
have delivered to the Noteholders (or their special counsel) a fully executed
counterpart of the Collateral Agency and Intercreditor Agreement, in form
attached hereto as Exhibit E (the "Intercreditor Agreement").
4.10 Security Documents.
(a) Mortgages. Separate Mortgages and Deeds of Trust, substantially in
the form of Exhibit F1 through Exhibit F7 hereto (collectively, the
"Mortgages"), relating to real properties of the Company and certain
Restricted Subsidiaries located in the States of Alabama, Florida,
Illinois, Mississippi, Ohio, Tennessee and Washington, shall be duly
executed and delivered to the Collateral Agent, and a copy
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of each thereof evidencing such due execution and delivery shall be
delivered to the Noteholders (or their special counsel).
(b) Security Agreement. A Security Agreement, substantially in the
form of Exhibit G hereto (the "Security Agreement"), shall be duly executed
and delivered by the Company, each of the Restricted Subsidiaries
identified on the signature pages thereto, and the Collateral Agent, and a
copy of each thereof evidencing such due execution and delivery shall be
delivered to the Noteholders (or their special counsel).
(c) Trademark/Copyright Security Agreement. A Trademark and Copyright
Collateral Assignment and Security Agreement (the "Trademark/Copyright
Security Agreement"), substantially in the form of Exhibit H hereto, shall
be duly executed and delivered by the Company, each of the Restricted
Subsidiaries identified on the signature pages thereto, and the Collateral
Agent, and a copy thereof evidencing such due execution and delivery shall
be delivered to the Noteholders (or their special counsel).
(d) Stock Pledge Agreement. The Stock Pledge Agreement, substantially
in the form of Exhibit I hereto (the "Stock Pledge Agreement"), shall be
duly executed and delivered by the Company, each of the Restricted
Subsidiaries identified on the signature pages thereto, and the Collateral
Agent, and a copy of each thereof evidencing such due execution and
delivery shall be delivered to the Noteholders (or their special counsel).
All stock certificates and undated stock powers executed in blank required
to be executed and delivered to the Collateral Agent by the terms of the
Stock Pledge Agreement shall have been so delivered, and the Company shall
provide the Noteholders with copies thereof.
(e) Note Pledge Agreement. A Note Pledge Agreement, substantially in
the form of Exhibit J hereto (the "Note Pledge Agreement"), shall be duly
executed and delivered by the Company and the Collateral Agent, and a copy
thereof evidencing such due execution and delivery shall be delivered to
the Noteholders (or their special counsel). The instrument or instruments
evidencing the Pledged Collateral (as defined in the Note Pledge Agreement)
and a power of attorney executed by the Company required to be executed and
delivered by the Company to the Collateral Agent by the terms of the Note
Pledge Agreement shall have been so delivered, and the Company shall
provide the Noteholders (or their special counsel) with a copy thereof.
(f) Perfection of Liens. The Company and each Restricted Subsidiary
that has entered into a Security Document shall have executed and delivered
to the Collateral Agent all UCC-1 financing statements as are necessary to
perfect the Liens of the Collateral Agent in the Collateral which may be
perfected by the filing thereof .
(g) Title Matters. With respect to each of the Mortgages, the Company
shall have delivered or caused to be delivered to the Collateral Agent one
or more loan policies of title insurance, or commitment therefor,
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satisfactory to you and showing no exceptions to title except as reasonably
acceptable to the Noteholders (or their special counsel).
(h) Certificates of Insurance. The Company shall have delivered to the
Noteholders (or their special counsel) certificates of insurance evidencing
the insurance required by the Security Documents, showing the Collateral
Agent as loss payee (as its interest may appear) thereunder.
(i) Taxes. All taxes, fees and other charges payable in connection
with the execution, delivery, recording, filing and registration of the
Security Documents shall have been paid or provision for such payment shall
have been made to the reasonable satisfaction of the Noteholders (or their
special counsel).
4.11 Lien Searches.
The Noteholders (or their special counsel) shall have received Lien
searches showing that the Collateral (as defined in the Security Agreement) of
the Company and the Subsidiaries is subject to no Liens other than Liens
permitted under Section 8.17 of the Amended Note Purchase Agreement.
4.12 Restructuring Fee.
The Company shall have paid to the Noteholders an aggregate of Two Hundred
Sixty Thousand Dollars ($260,000) as a restructuring fee in respect of the
transactions contemplated by this Agreement. Such payment shall be made to the
Noteholders in proportion, as nearly as practicable, to the respective unpaid
principal amount of Existing Notes held by each Noteholder on the Effective
Date, in the manner provided in the Existing Note Purchase Agreement for the
payment of principal.
4.13 Private Placement Number.
A private placement number issued by Standard & Poor's CUSIP Service Bureau
(in cooperation with the Securities Valuation Office of the National Association
of Insurance Commissioners) shall have been obtained for the Notes.
4.14 Payment of Special Counsel and Financial Advisor Fees.
Without limiting the provisions of Section 5.3, the Company shall have paid
on or before the Effective Date the fees, charges and disbursements of the
Noteholders' special counsel referred to in Section 4.2, and Nightingale
Associates, LLC, in each case to the extent reflected in statements rendered to
the Company on or prior to the Effective Date.
19
<PAGE>
4.15 Lease Letters.
Letters from the owner participants and the debt participants in respect of
the Equipment Lease Agreement dated as of September 30, 1997, as amended, shall
have been delivered to the Noteholders (or their special counsel), in form,
scope and substance satisfactory to the Noteholders and their special counsel.
4.16 Proceedings and Documents Satisfactory.
All opinions, certificates and other instruments and all proceedings taken
in connection with the execution and delivery of this Agreement and the
transactions contemplated hereby shall be reasonably satisfactory to the
Noteholders and their special counsel; and the Noteholders and their special
counsel shall have received copies of such documents and papers as may be
reasonably requested in connection therewith.
5. MISCELLANEOUS
5.1 Effect of Amendment and Waiver.
If the foregoing is acceptable to you, please note your acceptance in the
space provided below. Upon the execution and delivery of this Agreement by each
of the Noteholders and the Company, the conditions set forth in Section 4 shall
be deemed satisfied or waived and the Existing Note Purchase Agreement shall be
deemed to be amended and restated as set forth above and the waivers as set
forth above shall be deemed to be effective. This Agreement shall be binding
upon, and shall inure to the benefit of, the permitted successors and assigns of
the parties hereto and the holders from time to time of the Amended Notes.
5.2 No Legend Required.
Any and all notices, requests, certificates and other instruments
including, without limitation, the Amended Notes, may refer to the Note Purchase
Agreement or the Note Purchase Agreement dated as of September 1, 1993 without
making specific reference to this Waiver and Third Amendment to Note Purchase
Agreement, but nevertheless all such references shall be deemed to include this
Waiver and Third Amendment to Note Purchase Agreement unless the context shall
otherwise require.
5.3 Fees and Expenses.
Whether or not the transactions herein contemplated shall be consummated,
the Company agrees to pay directly all reasonable out-of-pocket travel expenses
and other reasonable out-of-pocket expenses of the Noteholders in connection
with the
20
<PAGE>
preparation, negotiation, execution and delivery of the Financing Documents and
the Amended Note Purchase Agreement, and the transactions contemplated hereby
and thereby, including, but not limited to, the reasonable fees and
disbursements of Bingham Dana LLP, the Noteholders' special counsel, and
Nightingale Associates, LLC, financial advisor to the Noteholders and the 1995
Noteholders, photocopying costs, and charges for shipping the Amended Notes,
adequately insured, to each Noteholder at its home office or at such other place
as such Noteholder may designate, and so long as any Noteholder shall hold any
of the Amended Notes, all such expenses relating to any amendments, waivers or
consents pursuant to the provisions of the Amended Note Purchase Agreement,
including, without limitation, any amendments, waivers or consents resulting
from any work-out, restructuring or similar events relating to the performance
by the Company and the Restricted Subsidiaries of their respective obligations
under the Financing Documents, the Amended Note Purchase Agreement and the
Amended Notes. The Company also agrees that it will pay and save each Noteholder
harmless against any and all liability with respect to stamp and other similar
taxes, if any, which may be payable or which may be determined to be payable in
connection with the execution and delivery of the Financing Documents, the
Amended Note Purchase Agreement and the Amended Notes, whether or not any
Amended Notes are then outstanding. The Company agrees to protect and indemnify
each Noteholder against any liability for any and all brokerage fees and
commissions payable or claimed to be payable to any Person retained by the
Company, their Subsidiaries, or any of their respective Affiliates that are
controlled by the Company in connection with the transactions contemplated by
this Agreement. Without limiting the foregoing, the Company agrees to pay the
costs of obtaining a private placement number for the Amended Notes, and
authorizes the submission of such information as may be required by the CUSIP
Service Bureau of Standard & Poor's for the purpose of obtaining such a number.
5.4 Survival.
All warranties, representations, certifications and covenants made by the
Company in this Agreement or in any certificate or other instrument delivered by
it or on its behalf under this Agreement shall be considered to have been relied
upon by the Noteholders and shall survive the execution of this Agreement,
regardless of any investigation made by or on behalf of the Noteholders. All
statements in any such certificate or other instrument shall constitute
warranties and representations of the Company under this Agreement.
5.5 Duplicate Originals; Execution in Counterpart.
Two or more duplicate originals of this Agreement may be signed by the
parties, each of which shall be an original but all of which together shall
constitute
21
<PAGE>
one and the same instrument. This Agreement may be executed in one or more
counterparts and shall be effective when at least one counterpart shall have
been executed by each party to this Agreement, and each set of counterparts
which, collectively, show execution by each such party to this Agreement shall
constitute one duplicate original.
5.6 Release of Claims.
The Company, for itself and all of its predecessors, successors and
assigns, acknowledges, affirms and represents that immediately prior to giving
effect to this Agreement, it is legally, validly and enforceably obligated to
each of the Noteholders under and pursuant to the Existing Notes and the
Existing Note Purchase Agreement and that the Company has no defense, offset,
counterclaim or right of recoupment with regard to such obligations.
Additionally, the Company for itself and all of its predecessors, successors and
assigns, does hereby fully, forever and completely release and discharge each of
the Noteholders and all of their respective employees, officers, directors,
trustees, shareholders, affiliates, agents, attorneys, representatives,
predecessors, successors and assigns (collectively, the "Released Parties"),
from any and all claims, demands, liabilities, damages and causes of action of
any kind whatsoever, whether based on facts in existence prior to or as of the
date hereof, whether known or unknown, which the Company may now have or may
have had at any time heretofore or may have at anytime hereafter, whether for
contribution or indemnity or otherwise, and whether direct or indirect, fixed or
contingent, liquidated or unliquidated, arising out of or related in any way to
any of the following: (a) the Existing Notes and the Existing Note Purchase
Agreement and all documents relating thereto or executed in connection therewith
(the "Existing Note Documents"); and (b) any action, inaction or omission by any
of the Released Parties in connection with the Existing Note Documents or the
administration thereof.
5.7 Governing Law.
THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND SHALL BE GOVERNED
BY THE INTERNAL LAWS OF THE STATE OF NEW YORK.
[Remainder of page intentionally left blank; next page is signature page.]
22
<PAGE>
If you are in agreement with the foregoing, please sign the form of
acceptance in the space provided below, whereupon the foregoing shall become a
binding agreement between you and the Company as of the date first above
written.
BIRMINGHAM STEEL CORPORATION
By:
----------------------------
Name:
Title:
<PAGE>
Accepted:
PRINCIPAL LIFE INSURANCE COMPANY
(f/k/a Principal Mutual Life Insurance
Company)
By: Principal Capital Management, LLC
a Delaware limited liability company,
its authorized signatory
By
-----------------------------------
Name:
Title:
By
-----------------------------------
Name:
Title:
THE EQUITABLE LIFE ASSURANCE SOCIETY
OF THE UNITED STATES
By
-----------------------------------
Name:
Title:
JEFFERSON-PILOT LIFE INSURANCE
COMPANY
By
-----------------------------------
Name:
Title:
AMERICAN UNITED LIFE INSURANCE
COMPANY
By
-----------------------------------
Name:
Title:
<PAGE>
THE STATE LIFE INSURANCE COMPANY
By
-----------------------------------
Name:
Title:
GREAT-WEST LIFE & ANNUITY INSURANCE
COMPANY
By
-----------------------------------
Name:
Title:
By
-----------------------------------
Name:
Title:
THE GREAT-WEST LIFE ASSURANCE
COMPANY
By
-----------------------------------
Name:
Title:
By
-----------------------------------
Name:
Title:
J. ROMEO & CO. as nominee for MONY LIFE
INSURANCE COMPANY OF NEW YORK
By
-----------------------------------
Name:
Title:
<PAGE>
TEACHERS INSURANCE AND ANNUITY
ASSOCIATION OF AMERICA
By
-----------------------------------
Name:
Title:
PHOENIX HOME LIFE MUTUAL INSURANCE
COMPANY
By
-----------------------------------
Name:
Title:
CANADA LIFE ASSURANCE COMPANY
By
-----------------------------------
Name:
Title:
CANADA LIFE ASSURANCE COMPANY OF
NEW YORK
By
-----------------------------------
Name:
Title:
CANADA LIFE INSURANCE COMPANY OF
AMERICA
By
-----------------------------------
Name:
Title:
<PAGE>
AMERITAS LIFE INSURANCE CORP.
By Ameritas Investment Advisors Inc.,
as Agent
By
-----------------------------------
Name:
Title:
BERKSHIRE LIFE INSURANCE COMPANY
By
-----------------------------------
Name:
Title:
PROVIDENT MUTUAL LIFE INSURANCE
COMPANY
By
-----------------------------------
Name:
Title:
<PAGE>
EXHIBIT 4.1.4
BIRMINGHAM STEEL CORPORATION
AMENDED AND RESTATED NOTE PURCHASE AGREEMENT
Dated as of October 12, 1999
$130,000,000
10.03% Senior Notes due December 15, 2005
================================================================================
<PAGE>
TABLE OF CONTENTS
PAGE
1. DESCRIPTION OF NOTES AND COMMITMENT................... 1
1.1. Amendment of Original Note Purchase Agreements..... 1
1.2. Description of Notes............................... 2
1.3. The Closing........................................ 5
1.4. Purchase for Investment............................ 5
1.5. Expenses........................................... 6
2. WARRANTIES AND REPRESENTATIONS........................ 8
2.1. Nature of Business................................. 8
2.2. Financial Statements; Debt; Material Adverse
Change............................................ 8
2.3. Subsidiaries and Affiliates........................ 9
2.4. Pending Litigation................................. 10
2.5. Title to Properties................................ 10
2.6. Taxes.............................................. 10
2.7. Full Disclosure.................................... 11
2.8. Corporate Organization and Authority............... 11
2.9. Restrictions on Company and Subsidiaries........... 12
2.10. Compliance with Law............................... 12
2.11. ERISA............................................. 12
2.12. Certain Laws...................................... 14
2.13. Environmental Compliance.......................... 14
2.14. Sale is Legal and Authorized; Obligations are
Enforceable...................................... 15
2.15. Governmental Consent.............................. 16
2.16. Private Offering.................................. 16
2.17. No Defaults....................................... 17
2.18. Use of Proceeds................................... 17
3. INTENTIONALLY OMITTED................................. 18
4. HOLDERS' SPECIAL RIGHTS............................... 18
4.1. Direct Payment..................................... 18
4.2. Delivery Expenses.................................. 18
4.3. Issuance Taxes..................................... 19
5. PREPAYMENTS........................................... 19
5.1. Required Scheduled Prepayments..................... 19
5.2. Other Prepayments.................................. 19
5.3. Notice of Optional Prepayment...................... 21
5.4. Partial Prepayment Pro Rata........................ 22
5.5. Notation of Amended Notes on Prepayment............ 22
5.6. No Other Optional Prepayments...................... 23
6. CHANGE IN CONTROL PUT................................. 23
6.1. Offer to Prepay upon Change in Control............. 23
6.2. Effect of Prepayments.............................. 25
7. REGISTRATION; SUBSTITUTION OF NOTES................... 25
7.1. Registration of Notes.............................. 25
7.2. Exchange of Notes.................................. 25
7.3. Replacement of Notes............................... 25
i
<PAGE>
8. COMPANY BUSINESS COVENANTS............................ 26
8.1. Payment of Taxes and Claims........................ 26
8.2. Maintenance of Properties and Corporate Existence.. 26
8.3. Payment of Notes and Maintenance of Office......... 28
8.4. ERISA.............................................. 28
8.5. Line of Business................................... 29
8.6. Transactions with Affiliates....................... 29
8.7. Pro-Rata Offers.................................... 29
8.8. Private Offering................................... 30
8.9. Designation of Subsidiaries........................ 30
8.10. New Restricted Subsidiaries or Properties......... 31
8.11. Fixed Charge Coverage Ratio....................... 32
8.12. Minimum Consolidated EBITDA....................... 33
8.13. Minimum Tangible Net Worth........................ 33
8.14. Capital Expenditures.............................. 33
8.15. Debt to Consolidated EBITDA Ratio................. 34
8.16. Debt.............................................. 34
8.17. Liens............................................. 35
8.18. Mergers; Consolidations........................... 38
8.19. Disposition of Assets............................. 38
8.20. Restricted Payments............................... 39
8.21. Permitted Investments............................. 39
8.22. Accounts with Financial Institutions other than
the Banks........................................ 40
8.23. Proceeds from Equity Issuances.................... 40
8.24. No Voluntary Reductions in Commitment............. 40
9. INFORMATION AS TO COMPANY............................. 40
9.1. Financial and Business Information................. 40
9.2. Officers' Certificates............................. 45
9.3. Accountants' Certificates.......................... 46
9.4. Quarterly Review With Financial Advisor............ 46
9.5. Inspection......................................... 47
10. EVENTS OF DEFAULT.................................... 47
10.1. Nature of Events.................................. 47
10.2. Default Remedies.................................. 50
10.3. Annulment of Acceleration of Notes................ 51
11. INTERPRETATION OF THIS AGREEMENT..................... 52
11.1. Terms Defined..................................... 52
11.2. GAAP.............................................. 73
11.3. Directly or Indirectly............................ 73
11.4. Section Headings and Table of Contents and
Construction..................................... 73
11.5. Governing Law..................................... 74
12. MISCELLANEOUS........................................ 74
12.1. Communications.................................... 74
12.2. Reproduction of Documents......................... 75
12.3. Survival.......................................... 76
12.4. Successors and Assigns............................ 76
12.5. Amendment and Waiver.............................. 76
12.6. Payments, When Received........................... 78
12.7. Entire Agreement.................................. 78
12.8. Duplicate Originals, Execution in Counterpart..... 78
ii
<PAGE>
Annex 1 - Information as to Purchasers
Annex 2 -- Payment Instructions at Closing
Annex 3 - Information as to Company
Exhibit A - Form of 10.03% Senior Note due December 15, 2005
iii
<PAGE>
BIRMINGHAM STEEL CORPORATION
----------------------------------
AMENDED AND RESTATED NOTE PURCHASE AGREEMENT
----------------------------------
$130,000,000
10.03% Senior Notes due December 15, 2005
Dated as of October 12, 1999
To the Purchaser Named on the
Signature Page Hereto
Ladies and Gentlemen:
BIRMINGHAM STEEL CORPORATION, a Delaware corporation (together with
its successors and assigns, the "Company"), hereby agrees with you as follows:
1. DESCRIPTION OF NOTES AND COMMITMENT
1.1. Amendment of Original Note Purchase Agreements.
The Company entered into those separate Note Purchase Agreements dated as
of September 1, 1993 (collectively, as amended by the Amendment to Note Purchase
Agreement dated as of October 18, 1996, as further amended by the Amendment to
1993 Note Purchase Agreement dated as of December 14, 1998, the "Original Note
Purchase Agreements"), with each of the purchasers identified on Annex 1 thereto
(such purchasers, including their successors or assigns from and after the
Original Closing Date, are referred to collectively as the "Purchasers"). The
Company and the Purchasers have agreed, pursuant to the Waiver and Third
Amendment to Note Purchase Agreement, dated as of the date hereof (the "Waiver
and Third Amendment"), entered into by the Company and the Purchasers, to amend
and restate in full the Original Note Purchase Agreements, and to amend and
restate in full the Original Notes in the form attached hereto as Exhibit A.
The term "Note Purchase Agreements" means this Agreement and the other Amended
and Restated Note Purchase Agreements, as amended from time to time hereafter.
<PAGE>
1.2. Description of Notes.
(a) Original Notes. On the Original Closing Date, the Company
authorized the issue and sale of One Hundred Thirty Million Dollars
($130,000,000) in aggregate principal amount of its 7.28% Senior Notes due
December 15, 2005 (the "Original Notes"), dated the date of issue, bearing
interest (computed on the basis of a 360-day year of twelve 30-day months)
on the unpaid principal balance thereof at the rate of seven and twenty-
eight one-hundredths percent (7.28%) per annum, payable semi-annually on
the fifteenth (15th) day of June and December in each year, commencing on
the payment date next succeeding the date of such Original Note, and at
maturity, and bearing interest on overdue principal and premium, if any,
and (to the extent legally enforceable) on any overdue installment of
interest at a rate equal to the lesser of (A) the highest rate allowed by
applicable law and (B) the rate of nine and twenty-eight hundredths percent
(9.28%) per annum;
(b) Amended Notes. Pursuant to the Waiver and Third Amendment, the
Company and the Purchasers have agreed to amend and restate the Original
Notes in the form attached hereto as Exhibit A (the "Amended Notes," such
term to include each Amended Note delivered from time to time in accordance
with any of the Note Purchase Agreements). The Amended Notes shall be in
an aggregate principal amount of One Hundred Thirty Million Dollars
($130,000,000). Each Amended Note will:
(i) be dated the most recent date on which interest shall have
been paid on the Note surrendered in exchange for such Amended Note or
the lost, stolen, destroyed or mutilated Note in respect of which such
Amended Note is being issued;
(ii) bear interest (computed on the basis of a 360-day year of
twelve 30-day months) from such date to and including the Effective
Date at the rate of seven and twenty-eight one-hundredths percent
(7.28%) per annum, payable on November 15, 1999;
(iii) bear interest at all times after the Effective Date and
until (and including) the maturity date thereof (whether such maturity
is scheduled or occurs by reason of acceleration or otherwise), at the
rate of ten and three one-hundredths percent (10.03%) per annum,
payable monthly on the fifteenth (15th) day of each month in each year
(commencing on November 15, 1999) and at maturity;
(iv) bear interest, payable on demand, on any overdue principal
(including any overdue prepayment of principal) and Make-Whole Amount,
if any, and (to the extent permitted by applicable law) on any overdue
installment of interest, at a rate equal to the lesser of
2
<PAGE>
(A) the highest rate allowed by applicable law, and
(B) twelve and three one-hundredths percent (12.03%) per
annum;
(v) mature on December 15, 2005; and
(vi) be in the form of the Amended Note set out in Exhibit A
hereto.
(c) Interest Rate Adjustments.
(i) Interest Payments under Credit Agreement. If at any time
after the Effective Date the Credit Agreement shall be amended to
provide that interest payments on the principal loan obligations under
the Credit Agreement shall be paid quarterly (rather than monthly),
the Company may, by giving written notice thereof to each holder of
Notes, elect to pay interest on the Notes quarterly on the fifteenth
(15th) day of March, June, September and December in each year,
beginning with the period commencing on the interest payment date
immediately following the date of such notice, provided that the
unpaid principal amount of the Notes shall bear interest
(A) at all times from and after the first day of such
quarterly interest period and until (and including) the maturity
date thereof (whether such maturity is scheduled or occurs by
reason of acceleration or otherwise) at a rate per annum equal to
(1) the interest rate then applicable to the Notes plus (2) ten
hundredths of one percent (.10%); and
(B) on any overdue principal (including any overdue
prepayment of principal) and Make-Whole Amount, if any, and (to
the extent permitted by applicable law) on any overdue
installment of interest, at a rate per annum equal to the lesser
of (1) the highest rate allowed by applicable law, and (2) the
interest rate then applicable to the Notes (after giving effect
to the adjustment required by clause (A) above) plus two percent
(2%).
If following any adjustment pursuant to this Section 1.2(c)(i) the
Credit Agreement shall be amended to provide for interest payments on
the principal loan obligations under the Credit Agreement to be made
monthly, the Company shall promptly provide written notice of such
fact to all of the holders of the Notes and the interest payments on
the Notes shall be adjusted, concurrently with the adjustment of the
interest payments in respect of the principal loan obligations under
the
3
<PAGE>
Credit Agreement, to be made on the dates, and at the rate (subject to
subsection 1.2(c)(ii) below), provided in subsection 1.2(b)(iii).
(ii) SBQ Asset Sale. If the Company shall fail to make the SBQ
Asset Sale Prepayment on or prior to January 31, 2001, the unpaid
principal amount of the Notes shall bear interest
(A) at all times after January 31, 2001 and until (and
including) the maturity date thereof (whether such maturity is
scheduled or occurs by reason of acceleration or otherwise) at a
rate per annum equal to (x) the interest rate then applicable to
the Notes plus (y) one percent (1%), provided, however, that if
the Company shall make the SBQ Asset Sale Prepayment after
January 31, 2001, then at all times after the date of the SBQ
Asset Sale Prepayment and until (and including) the maturity date
of the Notes, the one percent (1%) increase in the interest rate
applicable to the Notes referred to in clause (y) above shall be
reduced to a fifty one-hundredths percent (.50%) increase; and
(B) on any overdue principal (including any overdue
prepayment of principal) and Make-Whole Amount, if any, and (to
the extent permitted by applicable law) on any overdue
installment of interest, at a rate per annum equal to the lesser
of (1) the highest rate allowed by applicable law, and (2) the
interest rate then applicable to the Notes (after giving effect
to the adjustment required by clause (A) above) plus two percent
(2%).
(d) Notes. The term "Note" as used herein shall include each Note
delivered pursuant to this Agreement and the other Note Purchase Agreements
and each Note delivered in substitution or exchange for any such Note
pursuant to Section 7.2 or Section 7.3 of this Agreement or any of the
other Note Purchase Agreements, and shall be deemed, when reference is made
to a date prior to the Effective Date, to be a reference to the Original
Notes, and when reference is made to a date on or after the Effective Date,
to be a reference to the Amended Notes.
1.3. The Closing.
(a) Purchase and Sale of Notes. On the Original Closing Date, the
Company agreed to sell to you and you agreed to purchase from the Company,
in accordance with the provisions hereof, the aggregate principal amount of
Notes set forth below your name on Annex 1 to the Original Note
4
<PAGE>
Purchase Agreements (in the amount or amounts set forth therein) at one
hundred percent (100%) of the principal amount thereof.
(b) The Closing. The closing (the "Closing") of the Company's sale of
Notes occurred on December 15, 1993 (the date of the Closing herein
referred to as the "Original Closing Date"). At the Closing, the Company
delivered to you one or more Notes (as set forth below your name on Annex 1
to the Original Note Purchase Agreements), in the denominations indicated
on Annex 1 to the Original Note Purchase Agreements, in the aggregate
principal amount of your purchase, dated the Original Closing Date and
payable to you or payable as indicated on Annex 1 hereto, against payment
by federal funds wire transfer in immediately available funds of the
purchase price thereof, as directed by the Company on Annex 2 hereto.
1.4. Purchase for Investment.
(a) Purchase for Investment. On the Original Closing Date, you
represented to the Company that you were purchasing the Notes listed on
Annex 1 to the Original Note Purchase Agreements below your name for your
own account for investment and with no present intention of distributing
the Notes or any part thereof, but without prejudice to your right at all
times to:
(i) sell or otherwise dispose of all or any part of the Notes
under a registration statement filed under the Securities Act, or in a
transaction exempt from the registration requirements of the
Securities Act; and
(ii) have control over the disposition of all of your assets to
the fullest extent required by any applicable insurance law.
It is understood that when the Company made the representations set out in
Section 2.14(a) hereof and Section 2.15 hereof on the Original Closing
Date, the Company was relying, to the extent applicable, upon your
representation as aforesaid.
(b) ERISA. On the Original Closing Date, you represented that:
(i) you were acquiring the Notes for your own account with your
general corporate assets and that no part of such assets constitutes
assets of an "employee benefit plan" (as defined in section 3 of
ERISA) or a "plan" (as defined in section 4975(e)(1) of the IRC);
(ii) if any part of the funds being used by you to purchase the
Notes came from assets of an employee benefit plan or plan, that:
5
<PAGE>
(A) if such funds were attributable to a "separate account" (as defined in
section 3 of ERISA), then
(1) all requirements for an exemption under DOL
Prohibited Transaction Exemption 90-1, issued January 29,
1990 were met with respect to the use of such funds to
purchase the Notes, or
(2) the employee benefit plans with an interest in such
separate account had been identified in a writing delivered
by you to the Company;
(B) if such funds were attributable to a "separate account" (as defined
in section 3 of ERISA) that was maintained solely in connection with fixed
contracted obligations of an insurance company, any amounts payable, or
credited, to any employee benefit plan having an interest in such account
and to any participant or beneficiary of such plan (including an annuitant)
were not affected in any manner by the investment performance of the
separate account; or
(C) if such funds were attributable to an "investment fund" managed by a
"qualified plan asset manager" (as such terms are defined in Part V of DOL
Prohibited Transaction Exemption 84-14, issued March 13, 1984), all
requirements for an exemption under such Exemption are met with respect to
the use of such funds to purchase the Notes; or
(iii) such employee benefit plan was excluded from the
provisions of section 406 of ERISA by virtue of section 4(b) of ERISA.
1.5. Expenses.
(a) Generally. Whether or not the transactions contemplated hereby
are consummated, the Company will promptly (and in any event within thirty
(30) days of receiving any statement or invoice therefor) pay all fees,
expenses and costs (including reasonable attorneys' fees of a special
counsel and, if reasonably required, local or other counsel) incurred by
you and each other holder of a Note in connection with such transactions
and in connection with any amendments, waivers or consents under or in
respect of this Agreement or the Notes (whether or not such amendment,
waiver or consent becomes effective), including, but not limited to:
(i) the reasonable costs and expenses incurred in enforcing or
defending (or determining whether or how to enforce or defend) any
6
<PAGE>
rights under this Agreement, the Notes or any other Financing Document
or in responding to any subpoena or other legal process or informal
investigative demand issued in connection this Agreement, the Notes or
any other Financing Document, or by reason of being a holder of any
Note,
(ii) the reasonable fees, costs and expenses, including
reasonable attorneys' and reasonable financial advisors' fees, costs
and expenses incurred in connection with the insolvency or bankruptcy
of the Company or any Subsidiary or in connection with any work-out or
restructuring of the transactions contemplated hereby and by the
Notes, and
(iii) the reasonable costs and expenses (including travel
expenses) incurred in connection with the review, evaluation,
negotiation, analysis, due diligence investigation or other activity
related to any of the Financing Documents and the holders' and the
Collateral Agent's rights and remedies thereunder (including any such
activity occurring during any work-out or restructuring of the
transactions contemplated hereby and by the Notes or during a
bankruptcy, insolvency, reorganization or similar proceeding).
(b) Counsel. Without limiting the generality of the foregoing, it is
agreed and understood that the Company will pay, contemporaneously with the
execution and delivery of the Waiver and Third Amendment on the Effective
Date, each statement for reasonable fees and disbursements of your special
counsel presented in connection with such execution and delivery and the
Company will also pay, upon receipt of any statement thereof, each
additional statement for reasonable fees and disbursements of your special
counsel rendered after the Effective Date in connection with the Waiver and
Third Amendment.
(c) Broker's Fees. The Company agrees to indemnify and hold you
harmless against any and all fees, expenses and costs of any broker or
investment banker retained by the Company, if any, incurred in connection
with the issuance and delivery of the Amended Notes, the execution and
delivery of the Waiver and Third Amendment, or the transactions
contemplated thereby.
(d) Survival. The obligations of the Company under this Section 1.5
shall survive the payment or prepayment of the Notes and the termination
hereof.
7
<PAGE>
2. WARRANTIES AND REPRESENTATIONS
To induce the Purchasers to enter into the Original Note Purchase
Agreements and to purchase the Original Notes, the Company warranted and
represented, as of the Original Closing Date, as set forth in this Section 2.
The following representations and warranties are historical in nature and
included in this Agreement as a matter of convenience only. All such
representations and warranties and related disclosure schedules were made only
as of the Original Closing Date and the Company makes no representation or
warranty in this Agreement as to whether such representations and warranties
were true on the Original Closing Date or at any time thereafter. Solely for
purposes of this Section 2 references to "this Agreement," "hereto," "hereof,"
and terms of similar import are to the Original Note Purchase Agreements.
2.1. Nature of Business.
Except as set forth in Part 2.1 of Annex 3 hereto, the Private Placement
Memorandum, dated April, 1993 and prepared by Nationsbank Investment Banking
(together with all exhibits and annexes thereto, the "Placement Memorandum") (a
copy of which previously has been delivered to you), correctly describes the
general nature of the business and principal Properties of the Company and the
Subsidiaries as of the Original Closing Date.
2.2. Financial Statements; Debt; Material Adverse Change.
(a) Financial Statements. The following financial statements (copies
of which have been delivered to you):
(i) the consolidated balance sheets of the Company and its
consolidated subsidiaries as of June 30 in the years 1990, 1991 and
1992, and the related consolidated statements of income, changes in
shareholders' equity and cash flows for the fiscal years ended on such
dates, all accompanied by opinions thereon by Ernst & Young,
independent certified public accountants, and
(ii) the consolidated balance sheet of the Company and its
consolidated subsidiaries as of March 31, 1993, and the related
consolidated statements of income and cash flows for the nine (9)
months ended on such date,
have been prepared in accordance with generally accepted accounting
principles consistently applied, and present fairly, in all material
respects, the consolidated financial position of the Company and its
consolidated subsidiaries as of such dates and the results of their
operations and cash flows for such periods. All such financial statements
include the accounts of all subsidiaries of the Company for the respective
periods during which a
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subsidiary relationship has existed. Except as set forth on Part 2.2(a) of
Annex 3, all Restricted Subsidiaries were subsidiaries of the Company
during all of the periods covered by such financial statements.
(b) Indebtedness. Part 2.2(b) of Annex 3 hereto correctly lists all
outstanding Indebtedness of the Company and the Subsidiaries (showing which
portion is classified as current under GAAP) as of the Original Closing
Date.
(c) Material Adverse Change. Since June 30, 1992, there has been no
change in the business, prospects, profits, Properties or condition
(financial or otherwise) of the Company or any of the Subsidiaries except
changes in the ordinary course of business that, in the aggregate for all
such changes, could not reasonably be expected to have a Material Adverse
Effect.
2.3. Subsidiaries and Affiliates.
Part 2.3 of Annex 3 hereto states:
(a) the name of each Subsidiary (indicating which Subsidiaries are
Restricted Subsidiaries), its jurisdiction of incorporation and the
percentage of its Voting Stock owned by the Company and each other
Subsidiary; and
(b) the name of each Affiliate that is a corporation, partnership or
joint venture (other than Subsidiaries) and the nature of the affiliation.
Each of the Company and the Subsidiaries has good and marketable title to all of
the shares it purports to own of the stock of each Subsidiary, free and clear in
each case of any Lien. All such shares have been duly issued and are fully paid
and nonassessable.
2.4. Pending Litigation.
There are no proceedings, actions or investigations pending or, to the
knowledge of the Company, threatened against or affecting the Company or any
Subsidiary in any court or before any Governmental Authority or arbitration
board or tribunal that, in the aggregate for all such proceedings, actions and
investigations, could reasonably be expected to have a Material Adverse Effect.
Neither the Company nor any Subsidiary is in default with respect to any
judgment, order, writ, injunction, or decree of any court, Governmental
Authority or arbitration board or tribunal that, in the aggregate for all such
proceedings, actions and investigations, could reasonably be expected to have a
Material Adverse Effect.
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2.5. Title to Properties.
(a) Each of the Company and the Subsidiaries has good and marketable
title to all of the real Property, and good title to all of the other
Property, reflected in the most recent balance sheet referred to in Section
2.2(a) hereto (except as sold or otherwise disposed of in the ordinary
course of business), except for such failures to have such good and
marketable title as are immaterial to such financial statements and that,
in the aggregate for all such failures, could not reasonably be expected to
have a Material Adverse Effect. All such Property is free from Liens not
permitted by Section 8.9 of the Original Note Purchase Agreements.
(b) Each of the Company and the Subsidiaries owns, possesses or has
the right to use all of the patents, trademarks, service marks, trade
names, copyrights and licenses, and rights with respect thereto, necessary
for the present and currently planned future conduct of its business,
without any known conflict with the rights of others, except for such
failures to own, possess, or have the right to use, that, in the aggregate
for all such failures, could not reasonably be expected to have a Material
Adverse Effect.
2.6. Taxes.
(a) Returns Filed; Taxes Paid. All tax returns required to be filed
by each of the Company and each Subsidiary and any other Person with which
the Company or any Subsidiary files or has filed a consolidated return in
any jurisdiction have in fact been filed on a timely basis, and all taxes,
assessments, fees and other governmental charges upon each of the Company,
such Subsidiary and any such Person, and upon any of their respective
Properties, income or franchises, that are due and payable have been paid.
Except as disclosed in Part 2.6(a) of Annex 3 hereto, the Company does not
know of any proposed additional tax assessment against it or any such
Person. All liabilities of the Company and such Persons with respect to
federal income taxes have been finally determined except for the fiscal
years 1985 through 1992, the only years not closed by the completion of an
audit or the expiration of the statute of limitations.
(b) Book Provisions Adequate. The amount of the liability for taxes
reflected in the consolidated balance sheet of the Company and its
consolidated subsidiaries as of March 31, 1993 referred to in Section
2.2(a) hereof is an adequate provision for taxes (including, without
limitation, any payment due pursuant to any tax sharing agreement) as are
or may become payable by any one or more of the Company and its
consolidated subsidiaries in respect of all tax periods ending on or prior
to such date.
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2.7. Full Disclosure.
The financial statements referred to in Section 2.2(a) hereof do not, nor
does this Agreement, the Placement Memorandum or any written statement furnished
by or on behalf of the Company to you in connection with the negotiation of the
sale of the Original Notes, contain any untrue statement of a material fact or
omit a material fact necessary to make the statements contained therein or
herein not misleading. There is no fact that the Company has not disclosed to
you in writing that has had or, so far as the Company can now reasonably
foresee, could have a Material Adverse Effect.
2.8. Corporate Organization and Authority.
Each of the Company and the Subsidiaries:
(a) is a corporation duly incorporated, validly existing and in good
standing under the laws of its jurisdiction of incorporation;
(b) has all legal and corporate power and authority necessary to own
and operate its Properties and to carry on its business as now conducted
and as presently proposed to be conducted;
(c) has all licenses, certificates, permits, franchises and other
governmental authorizations necessary to own and operate its Properties and
to carry on its business as now conducted and as presently proposed to be
conducted, except where the failure to have such licenses, certificates and
permits, in the aggregate for all such failures, could not reasonably be
expected to have a Material Adverse Effect; and
(d) has duly qualified or has been duly licensed, and is authorized to
do business and is in good standing, as a foreign corporation, in each
state where the failure to be so qualified or licensed and authorized and
in good standing could reasonably be expected to have a Material Adverse
Effect.
2.9. Restrictions on Company and Subsidiaries.
Neither the Company nor any Subsidiary:
(a) is a party to any contract or agreement, or subject to any charter
or other corporate restriction that, in the aggregate for all such
contracts, agreements, charter and corporate restrictions, could reasonably
be expected to have a Material Adverse Effect;
(b) is a party to any contract or agreement that restricts the right
or ability of such corporation to incur Debt, other than this Agreement and
the agreements listed in Part 2.9 of Annex 3 hereto, the terms of none of
which is
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violated by the issuance of the Original Notes or the execution and
delivery of, or compliance with, this Agreement by the Company; and
(c) has agreed or consented to cause or permit in the future (upon the
happening of a contingency or otherwise) any of its Property, whether now
owned or hereafter acquired, to be subject to a Lien not permitted by
Section 8.9 hereof.
2.10. Compliance with Law.
Neither the Company nor any Subsidiary is in violation of any law,
ordinance, governmental rule or regulation to which it is subject, which
violations, in the aggregate, could reasonably be expected to have a Material
Adverse Effect.
2.11. ERISA.
(a) Relationship of Vested Benefits to Pension Plan Assets. The
present value of all benefits, determined as of the most recent valuation
date for such benefits as provided in Section 8.11(c) hereof, vested under
each Pension Plan does not exceed the value of the assets of such Pension
Plan allocable to such vested benefits, determined as of such date as
provided in Section 8.11(c) hereof.
(b) ERISA Requirements. Each of the Company and the ERISA Affiliates:
(i) has fulfilled all obligations under the minimum funding
standards of ERISA and the IRC with respect to each Pension Plan that
is not a Multiemployer Plan;
(ii) has satisfied all respective contribution obligations in
respect of each Multiemployer Plan;
(iii) is in compliance in all material respects with all other
applicable provisions of ERISA and the IRC with respect to each
Pension Plan and each Multiemployer Plan; and
(iv) has not incurred any liability under Title IV of ERISA to
the PBGC (other than in respect of required insurance premiums, all of
which that are due having been paid), with respect to any Pension
Plan, any Multiemployer Plan or any trust established thereunder.
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No Pension Plan, or trust created thereunder, has incurred any "accumulated
funding deficiency" (as defined in section 302 of ERISA), whether or not
waived, as of the last day of the most recently ended plan year of such
Pension Plan.
(c) Prohibited Transactions.
(i) The purchase of the Original Notes by you will not constitute
a "prohibited transaction" (as defined in section 406 of ERISA or
section 4975 of the IRC) that could subject any Person to the penalty
or tax on prohibited transactions imposed by section 502 of ERISA or
section 4975 of the IRC, and neither the Company or any ERISA
Affiliate, nor any "employee benefit plan" (as hereinafter defined) of
the Company or any ERISA Affiliate or any trust created thereunder or
any trustee or administrator thereof, has engaged in any "prohibited
transaction" that could subject any such Person, or any other party
dealing with such employee benefit plan or trust, to such penalty or
tax. The representation by the Company in the preceding sentence is
made in reliance upon and subject to the accuracy of the
representations in Section 1.3(b) hereof as to the source of funds
used by you.
(ii) Part 2.11(c)(ii) of Annex 3 hereto completely lists all
ERISA Affiliates and all employee benefit plans with respect to which
the Company or any "affiliate" (as hereinafter defined) is a "party-
in-interest" (as hereinafter defined) or in respect of which the
Original Notes could constitute an "employer security" (as hereinafter
defined).
As used in this Section 2.11(c), the terms "employee benefit plan" and
"party-in-interest" have the meanings specified in section 3 of ERISA,
"affiliate" and "employer security" have the meanings specified in section
407(d) of ERISA.
(d) Reportable Events. No Pension Plan or trust created thereunder
has been terminated, and there have been no "reportable events" (as defined
in section 4043 of ERISA), with respect to any Pension Plan or trust
created thereunder or with respect to any Multiemployer Plan, which
reportable event or events will or could result in the termination of such
Pension Plan or Multiemployer Plan and give rise to a liability of the
Company or any ERISA Affiliate in respect thereof.
(e) Multiemployer Plans. Except as set forth in Part 2.11(e) of Annex
3 hereto, neither the Company nor any ERISA Affiliate is an employer
required to contribute to any Multiemployer Plan. Neither the Company nor
any ERISA Affiliate has incurred, or is expected to incur, any withdrawal
liability (that has not previously been fully satisfied) under ERISA with
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respect to any Multiemployer Plan. None of the Multiemployer Plans
referred to in such Part of Annex 3 hereto have been terminated under
section 4041A of ERISA, have been placed in reorganization status under
Title IV of ERISA or have been determined to be "insolvent" (as defined in
section 4245 of ERISA).
(f) Multiple Employer Pension Plans. Except as set forth in Part
2.11(f) of Annex 3 hereto, neither the Company nor any ERISA Affiliate is a
"contributing sponsor" (as defined in section 4001 of ERISA) in any
Multiple Employer Pension Plan and neither the Company nor any ERISA
Affiliate has incurred (without fully satisfying the same), or reasonably
expects to incur, withdrawal liability in respect of any such Multiple
Employer Pension Plan listed in such Part of Annex 3 hereto, which
withdrawal liability could have a Material Adverse Effect.
(g) Foreign Pension Plan. No Foreign Pension Plans presently exist or
existed in the past.
2.12. Certain Laws.
(a) Investment Company Act. Neither the Company nor any Subsidiary
is, or is directly or indirectly controlled by, or acting on behalf of any
Person that is, an "investment company" within the meaning of the
Investment Company Act of 1940, as amended.
(b) Holding Company Status. Neither the Company nor any Subsidiary is
a "holding company" or an "affiliate" of a "holding company," or a
"subsidiary company" of a "holding company," or a "public utility" within
the meaning of the Public Utility Holding Company Act of 1935, as amended.
2.13. Environmental Compliance.
Except as set forth in Part 2.13 of Annex 3 hereto:
(a) Compliance - each of the Company and the Subsidiaries is in
compliance with all Environmental Protection Laws in effect in each
jurisdiction where it is presently doing business, and in which the failure
so to comply could be reasonably expected to have a Material Adverse
Effect;
(b) Liability - neither the Company nor any of the Subsidiaries is
subject to any liability under any Environmental Protection Laws that, in
the aggregate, could reasonably be expected to have a Material Adverse
Effect; and
(c) Notices - neither the Company nor any Subsidiary has received any
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(i) notice from any Governmental Authority by which any of its
present or previously-owned or leased real Properties has been
designated, listed, or identified in any manner by any Governmental
Authority charged with administering or enforcing any Environmental
Protection Law as a Hazardous Substance disposal or removal site,
"Super Fund" clean-up site, or candidate for removal or closure
pursuant to any Environmental Protection Law,
(ii) notice of any Lien arising under or in connection with any
Environmental Protection Law that has attached to any revenues of, or
to, any of its owned or leased real Properties, or
(iii) summons, citation, notice, directive, letter, or other
communication, written or oral, from any Governmental Authority
concerning any intentional or unintentional action or omission by the
Company or such Subsidiary in connection with its ownership or leasing
of any real Property resulting in the releasing, spilling, leaking,
pumping, pouring, emitting, emptying, dumping, or otherwise disposing
of any Hazardous Substance into the environment resulting in any
material violation of any Environmental Protection Law,
in each case where the effect of the matters that are the subject of any
such notice, summons, citation, directive, letter or other communication
could reasonably be expected to have a Material Adverse Effect.
2.14. Sale is Legal and Authorized; Obligations are Enforceable.
(a) Sale is Legal and Authorized. Each of the issuance, sale and
delivery of the Original Notes by the Company, the execution and delivery
hereof by the Company and compliance by the Company with all of the
provisions hereof and of the Original Notes:
(i) is within the corporate powers of the Company; and
(ii) is legal and does not conflict with, result in any breach in
any of the provisions of, constitute a default under, or result in the
creation of any Lien upon any Property of the Company or any
Subsidiary under the provisions of, any agreement, charter instrument,
bylaw or other instrument to which it is a party or by which it or any
of its Property may be bound.
(b) Obligations are Enforceable. Each of this Agreement and the
Original Notes has been duly authorized by all necessary action on the part
of the Company, has been executed and delivered by duly authorized officers
of the Company and constitutes a legal, valid and binding obligation
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of the Company, enforceable in accordance with its terms, except that the
enforceability hereof and of the Original Notes may be:
(i) limited by applicable bankruptcy, reorganization,
arrangement, insolvency, moratorium or other similar laws affecting
the enforceability of creditors' rights generally; and
(ii) subject to the availability of equitable remedies.
2.15. Governmental Consent.
Neither the nature of the Company or any Subsidiary, or of any of their
respective businesses or Properties, nor any relationship between the Company or
any Subsidiary and any other Person, nor any circumstance in connection with the
offer, issuance, sale or delivery of the Original Notes and the execution and
delivery of this Agreement, is such as to require a consent, approval or
authorization of, or filing, registration or qualification with, any
Governmental Authority on the part of the Company as a condition to the
execution and delivery of this Agreement or the offer, issuance, sale or
delivery of the Original Notes.
2.16. Private Offering.
Neither the Company nor NationsBank Investment Banking (the only Person
authorized or employed by the Company as agent, broker, dealer or otherwise in
connection with the offering or sale of the Original Notes or any similar
Security of the Company, other than employees of the Company) has offered any of
the Original Notes or any similar Security of the Company for sale to, or
solicited offers to buy any thereof from, or otherwise approached or negotiated
with respect thereto with, any prospective purchaser, other than you and one
hundred ten (110) other institutional investors, each of whom was offered all or
a portion of the Original Notes at private sale for investment.
2.17. No Defaults.
(a) The Original Notes. No event has occurred and no condition exists
that, upon the issuance of the Original Notes and the execution and
delivery of this Agreement, would constitute a Default or an Event of
Default.
(b) Charter Instrument, Other Agreements. Neither the Company nor any
Subsidiary is in violation in any respect of any term of any charter
instrument or bylaw and neither the Company nor any Subsidiary is in
violation in any respect of any term in any agreement or other instrument
to which it is a party or by which it or any of its Property may be bound,
except for violations which, in the aggregate for all such violations,
could not reasonably be expected to have a Material Adverse Effect.
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2.18. Use of Proceeds.
(a) Use of Proceeds. The Company will apply the proceeds from the
sale of the Original Notes in the manner specified in Part 2.18(a) of Annex
3 hereto.
(b) Margin Securities. None of the transactions contemplated herein
and in the Original Notes (including, without limitation, the use of the
proceeds from the sale of the Original Notes) violates, will violate or
will result in a violation of section 7 of the Securities Exchange Act of
1934, as amended, or any regulations issued pursuant thereto, including,
without limitation, Regulations G, T and X of the Board of Governors of the
Federal Reserve System, 12 C.F.R., Chapter II. Neither the Company nor any
Subsidiary owns, or with the proceeds of the sale of the Original Notes
intends to own, carry or purchase, or refinance borrowings that were used
to own, carry or purchase, any Margin Security, including Margin Securities
originally issued by the Company or any Subsidiary. The obligations of the
Company under this Agreement and the Original Notes are not and will not be
secured by any Margin Security, and no Original Notes are being sold on the
basis of any such collateral.
(c) Absence of Foreign or Enemy Status. The Company is not an "enemy"
or an "ally of the enemy" within the meaning of section 2 of the Trading
with the Enemy Act (50 U.S.C. App. (S)(S) 1 et seq.), as amended. The
Company is not in violation of, and neither the issuance and sale of the
Original Notes by the Company nor its use of the proceeds thereof as
contemplated by this Agreement will violate, the Trading with the Enemy
Act, as amended, or the International Emergency Economic Powers Act, as
amended, or any executive orders, proclamations or regulations issued
pursuant thereto including, without limitation, regulations administered by
the Office of Foreign Asset Control of the Department of the Treasury (31
C.F.R., Subtitle B, Chapter V).
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3. INTENTIONALLY OMITTED
4. HOLDERS' SPECIAL RIGHTS
4.1. Direct Payment.
Notwithstanding anything to the contrary contained herein or in the Amended
Notes, but subject to the terms of the Intercreditor Agreement, the Company will
pay, or will direct the Collateral Agent to pay, all amounts payable with
respect to each Amended Note held by an Institutional Investor (without any
presentment of such Amended Notes and without any notation of such payment being
made thereon) by crediting (prior to 11:00 a.m. local time of such Institutional
Investor's bank), by federal funds bank wire transfer, the account of such
Institutional Investor in any bank in the United States of America as may be
designated in writing by such Institutional Investor, or in such other manner as
may be reasonably directed or to such other address in the United States of
America as may be reasonably designated in writing by such Institutional
Investor. Your address on Annex 1 hereto will be deemed to constitute notice,
direction or designation (as appropriate) to the Company with respect to direct
payments as aforesaid. In all other cases, all amounts payable with respect to
each Amended Note will be made by check mailed and addressed to the registered
holder of each Amended Note at the address shown in the register maintained by
the Company pursuant to Section 8.3 hereof. Each holder of Amended Notes agrees
that, in the event it shall sell or transfer any Amended Note, it shall:
(a) prior to the delivery of such Amended Note, make a notation
thereon of all principal, if any, prepaid on such Amended Note and shall
also note thereon the date to which interest shall have been paid on such
Amended Note; and
(b) promptly notify the Company of the name and address of the
transferee of any such Amended Note so transferred and the effective date
of such transfer.
4.2. Delivery Expenses.
If any holder of Amended Notes surrenders any Amended Note to the Company
pursuant hereto, the Company will pay the cost of delivering to or from such
holder's home office or custodian bank from or to the Company, insured to the
reasonable satisfaction of such holder, the surrendered Amended Note and any
Amended Note issued in substitution or replacement for the surrendered Amended
Note.
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4.3. Issuance Taxes.
The Company will pay all taxes (other than any income taxes imposed upon
any Purchaser) arising in connection with the issuance and sale of the Amended
Notes or in connection with any modification of this Agreement and the Amended
Notes, and will save each holder of Amended Notes harmless without limitation as
to time against any and all liabilities with respect to all such taxes. The
obligations of the Company under this Section 4.3 shall survive the payment or
prepayment of the Amended Notes and the termination hereof.
5. PREPAYMENTS
5.1. Required Scheduled Prepayments.
In addition to paying the entire principal amount and the interest due on
the Amended Notes outstanding on the maturity date thereof, the Company shall
prepay, and there shall become due and payable, Twenty-Six Million Dollars
($26,000,000) principal amount of the Amended Notes on December 15 in each year
beginning on December 15, 2001 and ending on December 15, 2004, inclusive. Each
such prepayment shall be at one hundred percent (100%) of the principal amount
prepaid, together with interest accrued thereon to the date of prepayment. The
principal of the Amended Notes remaining outstanding on December 15, 2005,
together with interest accrued thereon, shall become due and payable on December
15, 2005.
5.2. Other Prepayments.
(a) Optional Prepayments. The Company may at any time after the
Original Closing Date prepay the principal amount of the Amended Notes in
part, in integral multiples of Five Million Dollars ($5,000,000), or in
whole, in each case together with:
(i) an amount equal to the Make-Whole Amount at such time in
respect of the principal amount of the Amended Notes being so prepaid,
and
(ii) interest on such principal amount then being prepaid accrued
to the prepayment date.
(b) Special Prepayments. In any event wherein the Company requests
from all of the holders of the Amended Notes (pursuant to Section 12.5
hereof) an amendment to, or waiver of (in each case setting forth in such
request detailed information concerning the transaction or condition for
which the amendment or waiver is requested), the Company's obligations
hereunder that are permitted by the provisions of Section 12.5 to be
amended or waived with consent of the Majority Holders, and the Majority
Holders do not, within sixty (60) days of the date on which such request is
made, grant
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their consent to the proposed amendment or waiver, the Company may prepay
Amended Notes as set forth in this Section 5.2(b), provided that all of the
following conditions are met:
(i) the Company elects to prepay all, but not less than all, of
the Amended Notes held by each holder of Amended Notes that shall have
not consented to the proposed amendment or waiver; and
(ii) the Company, within forty-five (45) days of the expiration
of such sixty (60) day period contemporaneously prepays each holder of
Amended Notes who has not consented to the proposed amendment or
waiver in an amount equal to the aggregate principal amount of all
Amended Notes held by such holder, together with interest accrued and
unpaid on such principal amount and the Make-Whole Amount in respect
of such principal amount of Amended Notes.
(c) Cash Flow Sweep Prepayments. In the event that any Secured Party
acquires custody, control or possession of any payment constituting a Post-
Default Cash Sweep Payment (as defined in the Intercreditor Agreement),
such amount shall be paid over to the Collateral Agent for distribution as
provided in Section 4.1(b) of the Intercreditor Agreement. Each amount
received from the Collateral Agent as contemplated by this Section 5.2(c)
in respect of the Amended Notes shall constitute an amount paid in respect
of a prepayment of the Amended Notes which includes a principal amount,
together with interest accrued thereon to the date of prepayment and the
Make-Whole Amount in respect of such principal amount of Amended Notes.
(d) Disposition Prepayments. If the Collateral Agent receives any
cash amounts as payments under the Security Documents or as proceeds of or
otherwise constituting Collateral (including, without limitation, net
proceeds received in connection with an Acceptable SBQ Asset Sale or any
other Disposition (as defined in the Intercreditor Agreement as in effect
on the Effective Date)), as more particularly described in Section 4.1(b)
of the Intercreditor Agreement, such amounts shall be distributed as
provided in Section 4.1(b) of the Intercreditor Agreement. Each amount
received from the Collateral Agent as contemplated by this Section 5.2(d)
in respect of the Amended Notes shall constitute an amount paid in respect
of a prepayment of the Amended Notes which includes a principal amount,
together with interest accrued thereon to the date of prepayment and the
Make-Whole Amount in respect of such principal amount of Amended Notes.
(e) Equity Issuance Prepayments. In the event of any Equity Issuance
by the Company, sixty percent (60%) of the Net Proceeds of such Equity
Issuance shall be promptly paid over to the Collateral Agent for
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distribution as provided in Section 4.1(b) of the Intercreditor Agreement.
Each amount received from the Collateral Agent as contemplated by this
Section 5.2(e) in respect of the Amended Notes shall constitute an amount
paid in respect of a prepayment of the Amended Notes which includes a
principal amount, together with interest accrued thereon to the date of
prepayment and the Make-Whole Amount in respect of such principal amount of
Amended Notes.
(f) Effect of Prepayments. Each prepayment of principal of the
Amended Notes pursuant to Section 5.2(a), Section 5.2(c), Section 5.2(d)
and Section 5.2(e) hereof shall be applied first, to the principal amount
of the Amended Notes due on the maturity date of the Amended Notes and
second, to the mandatory principal prepayments applicable to the Amended
Notes, as set forth in Section 5.1 hereof, in the inverse order of the
maturity thereof. Each prepayment of principal of the Amended Notes
pursuant to Section 5.2(b) and each purchase of Amended Notes pursuant to
Section 8.7 hereof shall be applied ratably to the principal amount of the
Amended Notes due on the maturity date thereof and to each remaining
mandatory principal prepayment required by Section 5.1 hereof.
5.3. Notice of Optional Prepayment.
The Company will give notice of each prepayment of the Amended Notes made
pursuant to the provisions of Section 5.2 to each holder of Amended Notes (in
the case of prepayments made pursuant to Section 5.2(a), Section 5.2(c), Section
5.2(d) and Section 5.2(e)) and to each holder of Amended Notes to be prepaid (in
the case of prepayments made pursuant to Section 5.2(b)), in each case not less
than thirty (30) days or more than sixty (60) days before the date fixed for
prepayment, specifying:
(a) such date;
(b) the Section hereof under which the prepayment is to be made;
(c) the principal amount of each Amended Note to be prepaid on such
date;
(d) the interest to be paid on each such Amended Note, accrued to the
date fixed for payment; and
(e) a reasonably detailed calculation of an estimated Make-Whole
Amount, if any (calculated as if the date of such notice was the date of
prepayment), that would be due in connection with such prepayment.
Such notice of prepayment shall also certify all facts that are conditions
precedent to any such prepayment. Further, with respect to any prepayment made
pursuant to Section 5.2(c), 5.2(d) or 5.2(e) hereof, the notice required in the
first sentence of
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this Section 5.3 shall be given within the time period specified to the extent
practicable given the timing of the event or events triggering the obligations
of the Company to make such prepayment. Notice of prepayment having been so
given, the aggregate principal amount of the Amended Notes specified in such
notice, together with the Make-Whole Amount, if any, and accrued interest
thereon shall become due and payable on the specified prepayment date.
Contemporaneously with such prepayment, the Company shall deliver to each holder
of Amended Notes to be prepaid a certificate of the Chairman, the Vice Chairman,
a Vice President, the Treasurer or the President of the Company specifying the
calculation of such Make-Whole Amount as of the specified prepayment date,
accompanied by a copy of any applicable documentation used in connection with
determining the Make-Whole Discount Rate in respect of such prepayment.
5.4. Partial Prepayment Pro Rata.
If at the time any required or optional prepayment under Section 5.1 or
Section 5.2(a), Section 5.2(c), Section 5.2(d) or Section 5.2(e) hereof is due
there is more than one Amended Note outstanding, the aggregate principal amount
of each required or optional partial prepayment of the Amended Notes shall be
allocated among the holders of the Amended Notes at the time outstanding in
proportion as nearly as practicable, to the respective unpaid principal amounts
of the Amended Notes then outstanding, with adjustments, to the extent
practicable, to equalize for any prior prepayments not in such proportion.
5.5. Notation of Amended Notes on Prepayment.
Upon any partial prepayment of an Amended Note, such Amended Note may, at
the option of the holder thereof, be
(a) surrendered to the Company pursuant to Section 7.2 hereof in
exchange for a new Amended Note in a principal amount equal to the
principal amount remaining unpaid on the surrendered Amended Note,
(b) made available to the Company for notation thereon of the portion
of the principal so prepaid, or
(c) marked by such holder with a notation thereon of the portion of
the principal so prepaid.
In case the entire principal amount of any Amended Note is prepaid, such Amended
Note shall be surrendered to the Company for cancellation and shall not be
reissued, and no Amended Note shall be issued in lieu of the prepaid principal
amount of any Amended Note.
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5.6. No Other Optional Prepayments.
Except as provided in Section 5.2 hereof or in accordance with an offer
made in compliance with Section 6 or Section 8.7 hereof, the Company shall not
make any optional prepayment (whether directly or indirectly by purchase or
other acquisition) in respect of the Amended Notes.
6. CHANGE IN CONTROL PUT
6.1. Offer to Prepay upon Change in Control.
(a) Notice and Offer. In the event of either
(i) a Change in Control, or
(ii) the obtaining of knowledge of a Control Event by the Company
(including, without limitation, via the receipt of notice of a Control
Event from any holder of Notes),
the Company will, within three (3) Business Days of the occurrence of
either of such events (or, in the case of any Change in Control the
consummation or finalization of which would involve any action of the
Company, at least thirty (30) days prior to such Change in Control), give
written notice of such Change in Control or Control Event to each holder of
Notes by registered mail and, simultaneously with the sending of such
written notice, send a copy of such notice to each such holder via an
overnight courier of national reputation. In the event of a Change in
Control, such written notice shall contain, and such written notice shall
constitute, an irrevocable offer to prepay all, but not less than all, the
Notes held by such holder on a date specified in such notice (the "Control
Prepayment Date") that is not less than thirty (30) days and not more than
sixty (60) days after the date of such notice. If the Control Prepayment
Date shall not be specified in such notice, the Control Prepayment Date
shall be the thirtieth (30th) day after the date of such holder's first
receipt of such notice. If the Company shall not have received a written
response to such notice from each holder of Notes within ten (10) days
after the date of posting of such notice to such holder of Notes, then the
Company shall immediately send a second written notice via an overnight
courier of national reputation to each such holder of Notes who shall have
not previously responded to the Company. In no event will the Company take
any action to consummate or finalize a Change in Control unless
contemporaneously with such action the Company prepays all Notes required
to be prepaid in accordance with Section 6.1(b) hereof.
(b) Acceptance and Payment. To accept such offered prepayment, a
holder of Notes shall cause a notice of such acceptance to be delivered to
the Company not later than fifteen (15) days after the date of
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receipt by such holder of the latest written offer of such prepayment (it
being understood that the failure by a holder to respond to such written
offer of prepayment within such period of fifteen (15) days shall be deemed
to constitute a rejection of such offer, provided that such deemed
rejection shall not prejudice such holder's right to accept any subsequent
offer). If so accepted, such offered prepayment shall be due and payable on
the Control Prepayment Date. Such offered prepayment shall be made at one
hundred percent (100%) of the principal amount of such Notes, together with
any Make-Whole Amount as of the Control Prepayment Date with respect
thereto and interest on the Notes then being prepaid accrued to the Control
Prepayment Date. Two (2) Business Days prior to the making of any such
prepayment, the Company shall deliver to each holder of such Notes by
facsimile transmission a certificate of the Chairman, the Chief Executive
Officer, an Executive Vice President, a Vice President, the Treasurer or
the President of the Company specifying the details of the calculation of
such Make-Whole Amount as of the specified Control Prepayment Date,
accompanied by a copy of any applicable documentation used in connection
with determining the Make-Whole Discount Rate in respect of such
prepayment.
(c) Officer's Certificate. Each offer to prepay the Notes pursuant to
this Section 6.1 shall be accompanied by a certificate, executed by the
Chairman, the Chief Executive Officer, an Executive Vice President, a Vice
President, the Treasurer or the President of the Company and dated the date
of such offer, specifying:
(i) the Control Prepayment Date;
(ii) the Section hereof under which such offer is made;
(iii) the principal amount of each Note offered to be prepaid;
(iv) the interest that would be due on each such Note offered to
be prepaid, accrued to the date fixed for payment;
(v) a reasonably detailed calculation of an estimated Make-Whole
Amount, if any (calculated as if the date of such notice was the date
of prepayment), that would be due in connection with such offered
prepayment;
(vi) that the conditions of this Section 6.1 have been fulfilled;
and
(vii) in reasonable detail, the nature and date or proposed date
of the Change in Control.
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6.2. Effect of Prepayments.
Each prepayment of principal of the Notes pursuant to Section 6.1 shall be
applied ratably to the principal amount of the Notes due on the maturity date of
the Notes and to each remaining mandatory principal prepayment required by
Section 5.1 hereof.
7. REGISTRATION; SUBSTITUTION OF NOTES
7.1. Registration of Notes.
The Company will cause to be kept at its office, maintained pursuant to
Section 8.3 hereof, a register for the registration and transfer of Notes. The
name and address of each holder of one or more Notes, the outstanding principal
amount of each such Note, each transfer thereof and the name and address of each
transferee of one or more Notes shall be registered in the register. The Person
in whose name any Note shall be registered shall be deemed and treated as the
owner and holder thereof for all purposes hereof, and the Company shall not be
affected by any notice or knowledge to the contrary.
7.2. Exchange of Notes.
Upon surrender of any Note at the office of the Company maintained pursuant
to Section 8.3 hereof duly endorsed or accompanied by a written instrument of
transfer duly executed by the registered holder of such Note or its attorney
duly authorized in writing, the Company will execute and deliver, within five
(5) Business Days after such surrender, at the Company's expense (except as
provided below), new Notes in exchange therefor, in denominations of at least
One Hundred Thousand Dollars ($100,000) (except as may be necessary to reflect
any principal amount not evenly divisible by One Hundred Thousand Dollars
($100,000)), in an aggregate principal amount equal to the unpaid principal
amount of the surrendered Note. Each such new Note shall be payable to such
Person as such holder may request and shall be substantially in the form of
Exhibit A hereto. Each such new Note shall be dated and bear interest from the
date to which interest shall have been paid on the surrendered Note or dated the
date of the surrendered Note if no interest shall have been paid thereon. The
Company may require payment of a sum sufficient to cover any stamp tax or
governmental charge imposed in respect of any such transfer of Notes.
7.3. Replacement of Notes.
Upon receipt by the Company of evidence reasonably satisfactory to it of
the ownership of and the loss, theft, destruction or mutilation of any Note
(which evidence shall be, in the case of an Institutional Investor, notice from
such Institutional Investor (or of such Institutional Investor's nominee) of
such ownership and such loss, theft, destruction or mutilation) and
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(a) in the case of loss, theft or destruction, of indemnity reasonably
satisfactory to it (provided that if the holder of such Note is an
Institutional Investor or a nominee of an Institutional Investor, such
Institutional Investor's own unsecured agreement of indemnity shall be
deemed to be satisfactory for such purpose), or
(b) in the case of mutilation, upon surrender and cancellation
thereof,
the Company at its own expense will execute and deliver, within five (5)
Business Days after such receipt, in lieu thereof, a new Note, dated and bearing
interest from the date to which interest shall have been paid on such lost,
stolen, destroyed or mutilated Note or dated the date of such lost, stolen,
destroyed or mutilated Note if no interest shall have been paid thereon.
8. COMPANY BUSINESS COVENANTS
The Company covenants that on and after the Effective Date and so long as
any of the Notes shall be outstanding:
8.1. Payment of Taxes and Claims.
The Company will, and will cause each Subsidiary to, pay before they become
delinquent:
(a) all taxes, assessments and governmental charges or levies imposed
upon it or its Property; and
(b) all claims or demands of materialmen, mechanics, carriers,
warehousemen, landlords and other like Persons that, if unpaid, might
result in the creation of a Lien upon its Property;
provided, that items of the foregoing description need not be paid
(i) while being contested in good faith and by appropriate
proceedings as long as adequate book reserves have been established
and maintained and exist with respect thereto, and
(ii) so long as the title of the Company or the Subsidiary, as
the case may be, to, and its right to use, such Property, is not
materially adversely affected thereby.
8.2. Maintenance of Properties and Corporate Existence.
The Company will, and will cause each Subsidiary to:
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(a) Property - maintain its Property in good condition for its
intended purpose, ordinary wear and tear excepted, and make all necessary
renewals, replacements, additions, betterments and improvements thereto;
(b) Insurance - maintain, with Acceptable Insurers, insurance with
respect to its Property and business against such casualties and
contingencies, of such types (including, without limitation, insurance with
respect to losses arising out of Property loss or damage, public liability,
business interruption, larceny, workers' compensation, embezzlement or
other criminal misappropriation) and in such amounts as is customary in the
case of corporations of established reputations engaged in the same or a
similar business and similarly situated, provided, however, that if an
insurer is an Acceptable Insurer at the beginning of any policy period, it
shall be deemed to remain an Acceptable Insurer for the balance of such
policy period;
(c) Financial Records - keep accurate books of records and accounts in
which full and correct entries shall be made of all its business
transactions and that will permit the provision of accurate and complete
financial statements in accordance with GAAP;
(d) Corporate Existence and Rights - do or cause to be done all things
necessary
(i) to preserve and keep in full force and effect its corporate
existence, rights (charter and statutory) and franchises, subject to
Section 8.18 hereof, except where the failure to do so could not
reasonably be expected to have a Material Adverse Effect, and
(ii) to maintain each Restricted Subsidiary as a Restricted
Subsidiary, except as otherwise permitted by Section 8.18 hereof; and
(e) Compliance with Law - not be in violation of any law, ordinance or
governmental rule or regulation to which it is subject (including, without
limitation, any Environmental Protection Law and OSHA) and not fail to
obtain any license, certificate, permit, franchise or other governmental
authorization necessary to the ownership of its Properties or to the
conduct of its business if such violation or failure to obtain could be
reasonably expected to have a Material Adverse Effect.
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8.3. Payment of Notes and Maintenance of Office.
The Company will punctually pay, or cause to be paid, the principal of and
interest (and Make-Whole Amount, if any) on, the Notes, as and when the same
shall become due according to the terms hereof and of the Notes, and will
maintain an office at the address of the Company set forth in Section 12.1
hereof where notices, presentations and demands in respect hereof or the Notes
may be made upon it. Such office will be maintained at such address until such
time as the Company shall notify the holders of the Notes of any change of
location of such office, which will in any event be located within the United
States of America.
8.4. ERISA.
(a) Compliance. The Company will, and will cause each ERISA Affiliate
to, at all times with respect to each Pension Plan, make timely payment of
contributions required to meet the minimum funding standard set forth in
ERISA or the IRC with respect thereto, and to comply with all other
applicable provisions of ERISA.
(b) Relationship of Vested Benefits to Pension Plan Assets. The
Company will not at any time permit the present value of all employee
benefits vested under each Pension Plan to exceed the assets of such
Pension Plan allocable to such vested benefits at such time, in each case
determined pursuant to Section 8.4(c) hereof.
(c) Valuations. All assumptions and methods used to determine the
actuarial valuation of vested employee benefits under Pension Plans and the
present value of assets of Pension Plans will be reasonable in the good
faith judgment of the Company and will comply with all requirements of law.
(d) Prohibited Actions. The Company will not, and will not permit any
ERISA Affiliate to:
(i) engage in any "prohibited transaction" (as defined in section
406 of ERISA or section 4975 of the IRC) that would result in the
imposition of a material tax or penalty;
(ii) incur with respect to any Pension Plan any "accumulated
funding deficiency" (as defined in section 302 of ERISA), whether or
not waived;
(iii) terminate any Pension Plan in a manner that could result
in
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(A) the imposition of a Lien on the Property of the Company
or any Subsidiary pursuant to section 4068 of ERISA, or
(B) the creation of any liability under section 4062 of
ERISA;
(iv) fail to make any payment required by section 515 of ERISA;
or
(v) at any time be an "employer" (as defined in section 3(5) of
ERISA) required to contribute to any Multiemployer Plan if, at such
time, it could reasonably be expected that the Company or any
Restricted Subsidiary will incur withdrawal liability in respect of
such Multiemployer Plan and such liability, if incurred, together with
the aggregate amount of all other withdrawal liability as to which
there is a reasonable expectation of incurrence by the Company or any
Restricted Subsidiary under any one or more Multiemployer Plans, could
reasonably be expected to have a Material Adverse Effect.
8.5. Line of Business.
The Company will not, and will not permit any Restricted Subsidiary to,
engage in any business other than the businesses related to their present
businesses or those that are substantially similar to their present businesses.
8.6. Transactions with Affiliates.
The Company will not, and will not permit any Restricted Subsidiary to,
enter into any transaction, including, without limitation, the purchase, sale or
exchange of Property or the rendering of any service, with any Affiliate, except
in the ordinary course of and pursuant to the reasonable requirements of the
Company's or such Restricted Subsidiary's business and upon fair and reasonable
terms no less favorable to the Company or such Restricted Subsidiary than would
be obtained in a comparable arm's-length transaction with a Person not an
Affiliate.
8.7. Pro-Rata Offers.
Except as provided in Section 5.2(b) above, the Company will not, and will
not permit any Restricted Subsidiary or any Affiliate to, directly or
indirectly, acquire or make any offer to acquire any Notes unless the Company or
such Restricted Subsidiary or Affiliate shall have offered to acquire Notes, pro
rata, from all holders of Notes and upon the same terms. In case the Company
acquires any Notes, such Notes will immediately thereafter be cancelled and no
Notes will be issued in substitution therefor.
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8.8. Private Offering.
The Company will not, and will not permit any Person acting on its behalf
to, offer the Notes or any part thereof or any similar Securities for issuance
or sale to, or solicit any offer to acquire any of the same from, any Person so
as to bring the issuance and sale of the Notes within the provisions of section
5 of the Securities Act.
8.9. Designation of Subsidiaries.
(a) Right of Designation. Each Subsidiary acquired after the Effective
Date that, as of the date of such acquisition or at any future date, meets
all of the requirements of a Restricted Subsidiary, as set forth in the
definition thereof, shall be deemed, on and after such date and without any
further action by the Company or any holder of Notes, to have been
designated by the Company as a Restricted Subsidiary. Each Subsidiary
designated as a Restricted Subsidiary in Schedule 3.1 to the Waiver and
Third Amendment and each other Restricted Subsidiary shall, so long as it
shall continue to satisfy the requirements of the definition of Restricted
Subsidiary, be a Restricted Subsidiary on and after the Effective Date and
all other Subsidiaries, if any, listed in such Schedule 3.1 shall, subject
to Section 8.9(b) hereof, be Unrestricted Subsidiaries on and after the
Effective Date.
(b) Right of Redesignation. Subject to the satisfaction of the
requirements of Section 8.9(c) hereof, the Company shall have the right,
with respect to each Subsidiary that is an Unrestricted Subsidiary as of
the Effective Date, to designate such Subsidiary as a Restricted Subsidiary
by delivering a written notice to such effect, signed by the Chairman,
Chief Executive Officer, an Executive Vice President, a Vice President or
the President of the Company, to each holder of Notes. Any designation
under and in accordance with this Section 8.9(b) shall become effective,
for purposes of this Agreement, on the day that notice thereof shall have
been mailed (postage prepaid, by registered or certified mail, return
receipt requested) by the Company to each holder of Notes at the addresses
as provided in Section 12.1 hereof. The Company shall not have the right to
designate a Restricted Subsidiary as an Unrestricted Subsidiary.
(c) Designation Criteria.
(i) No Unrestricted Subsidiary shall at any time after the
Effective Date be designated as a Restricted Subsidiary unless:
(A) such Subsidiary at such time meets all of the
requirements of a Restricted Subsidiary as set forth in the
definition thereof; and
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(B) immediately before and after, and after giving effect to
such designation, and assuming that all Investments of, all
obligations and liabilities of, and all Liens on the Property of,
such Subsidiary being so designated were made or incurred
contemporaneously with such designation, no Default or Event of
Default exists or would exist.
(ii) No Restricted Subsidiary shall at any time after the
Effective Date be designated as an Unrestricted Subsidiary.
8.10. New Restricted Subsidiaries or Properties.
(a) Guaranty Agreement. The Company will cause each Person that,
after the Effective Date, becomes a direct or indirect Restricted
Subsidiary of the Company, to become, promptly and in any event within ten
(10) Business Days of becoming a Restricted Subsidiary, a Guarantor by
executing and delivering an Accession Agreement.
(b) Security Agreement and Stock Pledge Agreement. The Company will
cause each Person that, after the Effective Date, becomes a direct or
indirect Restricted Subsidiary of the Company, to become, promptly and in
any event within ten (10) Business Days of becoming a Restricted
Subsidiary, a Pledgor under (and as defined in) each of the Security
Agreement and the Stock Pledge Agreement by executing and delivering to the
Collateral Agent and to each holder of Notes an Accession Agreement, and to
take all other actions necessary to perfect the Liens of the Collateral
Agent in the Property of such Person pledged thereunder (including, without
limitation, the filing of all appropriate Uniform Commercial Code financing
statements, the recording of all appropriate documents with public
officials, the payment of all fees and taxes, and the delivery to the
Collateral Agent of all certificates and documents constituting Pledged
Collateral (as defined in the Stock Pledge Agreement) together with all
related stock powers that in the opinion of the Collateral Agent are
necessary to create and preserve the Liens with respect to all of the
capital stock of each domestic Restricted Subsidiary and at least 65% of
the capital stock of each Restricted Subsidiary incorporated, and doing
business, outside the United States of America, in accordance with the
provisions of the Security Agreement and the Stock Pledge Agreement.
(c) Future Real Property. The Company will, and will cause each
Restricted Subsidiary to, promptly following the acquisition of any fee
simple property, provide written notice thereof to the holders of the Notes
and execute and deliver to the Collateral Agent a Mortgage in form and
substance satisfactory to the Collateral Agent, creating a first priority
Lien on such Property (including fixtures) in favor of the Collateral
Agent, subject
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to no Liens, except to the extent permitted by Section 8.17(a), and provide
to the Collateral Agent such customary lender's title insurance policies,
environmental reports and other related documents as the Collateral Agent
or the Majority Holders may reasonably request.
(d) Assets Subject to Lien Restrictions. If at any time any
Restricted Subsidiary is prohibited by contract from entering into the
Guaranty Agreement, or the Company or any Restricted Subsidiary is
prohibited by contract from granting a Lien on any of its unencumbered
Property in favor of the Collateral Agent, the Company shall, or shall
cause such Restricted Subsidiary to, use its good faith efforts to obtain a
waiver of such prohibition and promptly execute an Accession Agreement or
Security Document, as applicable, necessary to make such Restricted
Subsidiary a Guarantor, or to make such Property a part of the Collateral,
as the case may be, and to take all other actions necessary to perfect the
Liens of the Collateral Agent in such additional Collateral.
(e) Certificates Regarding Authorization, etc. Each Accession
Agreement and each Security Document delivered by the Company or any
Restricted Subsidiary pursuant to this Section 8.10 shall be accompanied by
copies of the constitutive documents and corporate resolutions (or
equivalent) of the Company or such Restricted Subsidiary authorizing the
respective transactions contemplated thereby, in each case certified as
true and correct by an officer of the Company or such Restricted
Subsidiary.
(f) Further Assurances. The Company will, at the request of the
Majority Holders or the Collateral Agent, execute and deliver, or cause to
be executed and delivered, such further instruments and do, or cause to be
done, such further acts as the Majority Holders or the Collateral Agent
deem necessary or advisable to maintain the priority and validity of the
Lien of the Security Documents and to carry out more effectively the
purposes of the Financing Documents.
8.11. Fixed Charge Coverage Ratio.
The Company will not permit the Fixed Charge Coverage Ratio for any Four-
Quarter Period specified in the following table to be less than or equal to the
ratio corresponding to such period in the table:
Four-Quarter Period Ending Minimum Ratio
- -------------------------------------------------------------------------------
September 30, 1999 1.05 to 1.00
- -------------------------------------------------------------------------------
December 31, 1999 1.05 to 1.00
- -------------------------------------------------------------------------------
March 31, 2000 1.05 to 1.00
- -------------------------------------------------------------------------------
June 30, 2000 1.05 to 1.00
- -------------------------------------------------------------------------------
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September 30, 2000 1.05 to 1.00
- -------------------------------------------------------------------------------
December 31, 2000 1.05 to 1.00
- -------------------------------------------------------------------------------
March 31, 2001 1.10 to 1.00
- -------------------------------------------------------------------------------
June 30, 2001 1.10 to 1.00
- -------------------------------------------------------------------------------
September 30, 2001 1.20 to 1.00
- -------------------------------------------------------------------------------
December 31, 2001 and 0.95 to 1.00
thereafter
- -------------------------------------------------------------------------------
8.12. Minimum Consolidated EBITDA.
The Company will not permit the aggregate amount of Consolidated EBITDA for
any Four-Quarter Period specified in the following table to be less than the
amount corresponding to such period in such table:
Four-Quarter Period Ending Minimum EBITDA
- -------------------------------------------------------------------------------
September 30, 1999 $57,000,000
- -------------------------------------------------------------------------------
December 31, 1999 $57,000,000
- -------------------------------------------------------------------------------
March 31, 2000 $57,000,000
- -------------------------------------------------------------------------------
June 30, 2000 $61,500,000
- -------------------------------------------------------------------------------
September 30, 2000 $61,500,000
- -------------------------------------------------------------------------------
December 31, 2000 $65,500,000
- -------------------------------------------------------------------------------
March 31, 2001 $66,000,000
- -------------------------------------------------------------------------------
June 30, 2001 $64,000,000
- -------------------------------------------------------------------------------
September 30, 2001 $67,500,000
- -------------------------------------------------------------------------------
December 31, 2001 and $71,000,000
thereafter
- -------------------------------------------------------------------------------
8.13. Minimum Tangible Net Worth.
The Company will not permit Consolidated Tangible Net Worth at any time to
be less than (i) One Hundred Eighty-Eight Million Dollars ($188,000,000) plus
(ii) fifty percent (50%) of consolidated income from continuing operations (only
if greater than Zero Dollars ($0)) of the Company and the Restricted
Subsidiaries for each fiscal quarter of the Company ending after June 30, 1999,
minus (iii) one hundred percent (100%) of consolidated net loss from
discontinued operations (including any write-downs) of the Company and the
Restricted Subsidiaries after June 30, 1999, plus (iv) sixty percent (60%) of
the Net Proceeds from each Equity Issuance by the Company after June 30, 1999.
8.14. Capital Expenditures.
The Company will not permit the aggregate amount of Capital Expenditures of
the Company and the Restricted Subsidiaries to be greater than: (i) Thirty
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Million Dollars ($30,000,000) during the Company's fiscal year ending June 30,
2000; (ii) Thirty-Five Million Dollars ($35,000,000) during the Company's fiscal
year ending June 30, 2001; and (iii) Forty Million Dollars ($40,000,000) during
the Company's fiscal year ending June 30, 2002.
8.15. Debt to Consolidated EBITDA Ratio.
The Company will not permit, for any Four-Quarter Period ending on or after
the Performance Release Date, the Debt to Consolidated EBITDA Ratio to be
greater than or equal to 3.50 to 1.00.
8.16. Debt.
The Company will not, and will not permit any Restricted Subsidiary to,
create, incur, assume, or permit or suffer to exist, any Debt other than the
following:
(a) Debt arising under this Agreement and the other Note Purchase
Agreements, including Debt evidenced by the Amended Notes;
(b) Debt existing or arising under the Credit Agreement, the Existing
Reimbursement Agreements, the 1995 Notes and the other Transaction
Documents; or
(c) other Debt existing on the Effective Date and described in Part
2.2(b) of Annex 3 to the Waiver and Third Amendment;
(d) Debt extending the maturity of, or refunding, refinancing or
replacing, in whole or in part, any Debt of the Company or any Restricted
Subsidiary described in the immediately preceding clauses (a) through (c)
above on terms no more restrictive in the aggregate (as reasonably
determined by the Majority Holders) to the Company or such Restricted
Subsidiary, as applicable, than the terms of the Debt so extended,
refunded, refinanced or replaced, and in a principal amount not in excess
of that outstanding as of the date of such renewal, refinancing,
replacement or extension;
(e) Debt of a Restricted Subsidiary owing to the Company or to another
Restricted Subsidiary that is a Guarantor;
(f) Debt in respect of Capitalized Lease obligations secured as
permitted under Section 8.17(a)(xi) and Debt secured by Purchase Money
Liens permitted under Section 8.17(a)(vii); provided that the aggregate
outstanding principal amount of all such Debt does not exceed Thirty-five
Million Dollars ($35,000,000) at any time;
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(g) Debt of a Person secured by real property or Debt of a Person
represented by an industrial revenue bond financing, in each case where
such Person becomes a Restricted Subsidiary of the Company or is merged
with or into the Company or a then-existing Restricted Subsidiary, so long
as such Debt was not incurred in anticipation of such Person becoming a
Restricted Subsidiary or merging with the Company or a Restricted
Subsidiary; and
(h) Debt that is unsecured Debt and that is not otherwise permitted
under any of the preceding clauses (a) through (g) in an aggregate amount
not to exceed Twenty-Five Million Dollars ($25,000,000) at any time
outstanding.
8.17. Liens.
(a) Negative Pledge. The Company will not, and will not permit any
Restricted Subsidiary to, cause or permit to exist, or agree or consent to
cause or permit to exist in the future (upon the happening of a contingency
or otherwise), any of their Property, whether now owned or hereafter
acquired, to be subject to a Lien except:
(i) Liens securing taxes, assessments or governmental charges or
levies or the claims or demands of materialmen, mechanics, carriers,
warehousemen, landlords and other like Persons, provided that the
payment thereof is not at the time required by Section 8.1 hereof;
(ii) Liens incurred or deposits made in the ordinary course of
business
(A) in connection with workers' compensation, unemployment
insurance, social security and other like laws, and
(B) to secure the performance of letters of credit, bids,
tenders, sales contracts, leases, statutory obligations, surety
and performance bonds (of a type other than set forth in Section
8.17(a)(iii)) hereof) and other similar obligations not incurred
in connection with the borrowing of money, the obtaining of
advances or the payment of the deferred purchase price of
Property;
(iii) Liens
(A) arising from judicial attachments and judgments,
(B) securing appeal bonds, supersedeas bonds, and
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(C) arising in connection with court proceedings (including,
without limitation, surety bonds and letters of credit or any
other instrument serving a similar purpose),
provided that the execution or other enforcement of such Liens is
effectively stayed and the claims secured thereby are being actively
contested in good faith and by appropriate proceedings, and provided
further that the aggregate amount so secured will not at any time
exceed Ten Million Dollars ($10,000,000);
(iv) Liens on Property of a Restricted Subsidiary, provided that
such Liens secure only obligations owing to the Company or a
Restricted Subsidiary that is a Guarantor;
(v) Liens in the nature of reservations, exceptions,
encroachments, easements, rights-of-way, covenants, conditions,
restrictions, leases and other similar title exceptions or
encumbrances affecting real property, provided that such exceptions
and encumbrances do not in the aggregate materially detract from the
value of such Properties or materially interfere with the use of such
Property in the ordinary conduct of the business of the Company and
the Restricted Subsidiaries;
(vi) (A) Liens securing Debt in existence on the Effective
Date and listed in Schedule 3.8 to the Waiver and Third
Amendment, and
(B) Liens securing renewals, extensions (as to time) and
refinancings of such Debt secured by such Liens listed in such
Schedule, provided that (1)the amount of Debt secured by each
such Lien is not increased in excess of the amount of Debt
outstanding on the date of such renewal, extension or
refinancing, (2) none of such Liens is, or is required to be,
extended to include any additional Property of the Company or any
Restricted Subsidiary as a condition to, or as a result of, such
renewal, extension or refinancing, and (3) in the case of Debt
existing under the Credit Agreement, the renewal, extension or
refinancing of such Debt is permitted by, and is consummated in
accordance with the provisions of, Section 4.10 of the
Intercreditor Agreement; and
(vii) Purchase Money Liens securing Debt incurred within the
limitations of Section 8.16(f) hereof, so long as each such Purchase
Money Lien secures Debt of the Company or a Restricted Subsidiary in
an amount not exceeding one hundred percent (100%) of the cost of
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construction or acquisition of the particular Property to which such
Debt relates (or, in the case of a Lien existing on any Property of
any corporation the time it becomes a Restricted Subsidiary, the Fair
Market Value of such Property at such time);
(viii) Liens securing the Secured Obligations (as defined in the
Omnibus Collateral Agreement);
(ix) Liens arising by virtue of any statutory or common law
provision relating to bankers' liens, rights of setoff or similar
rights as to deposit accounts or other funds maintained with a
creditor depository institution;
(x) Liens constituting intellectual property licenses entered
into in the ordinary course of business;
(xi) Liens securing Capitalized Lease obligations to the extent
such Debt is permitted under Section 8.16(f), so long as any such Lien
secures Debt of the Company or a Restricted Subsidiary in an amount
not exceeding one hundred percent (100%) of the cost of construction
or acquisition of the particular Property that is the subject of such
Capitalized Lease;
(xii) Liens securing Off Balance Sheet Liabilities which do not
constitute Debt;
(xiii) financing statements permitted to be signed or filed
under Section 8.17(b);
(xiv) leases and subleases of Property of the Company or a
Restricted Subsidiary to other Persons entered into in the ordinary
course of business; and
(xv) Liens permitted under the express terms of the Security
Documents.
In addition, the Company will not, and will not permit any Restricted
Subsidiary, directly or indirectly, to create or otherwise cause, incur,
assume, suffer or permit to exist or become effective any consensual
encumbrance or restriction of any kind on the ability of such Person to
grant a security interest in, or assign its property to, the Collateral
Agent, except for encumbrances or restrictions existing under or by reason
of (i) customary non-assignment provisions in any lease governing a
leasehold interest, license or other contract, (ii) with respect to any
Person which becomes a Subsidiary of the Company after the Effective Date,
an agreement or other instrument of such Person existing at the time it
becomes a Subsidiary,
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provided that such encumbrance or restriction is not applicable to any
other Person, other than such Person becoming a Subsidiary and was not
entered into in contemplation of such Person becoming a Subsidiary, (iii)
this Agreement and the other Financing Documents, and (iv) any agreement of
the Company or any Restricted Subsidiary existing on the Effective Date and
any renewal or extension of any such agreement.
(b) Financing Statements. The Company will not, and will not permit
any Restricted Subsidiary to, sign or file a financing statement under the
Uniform Commercial Code of any jurisdiction that names the Company or such
Restricted Subsidiary as debtor, or sign any security agreement authorizing
any secured party thereunder to file any such financing statement, except,
in any such case, a financing statement filed or to be filed to perfect or
protect a security interest that the Company or such Restricted Subsidiary
is entitled to create, assume or incur, or permit to exist, under the
foregoing provisions of this Section 8.17 or to evidence for informational
purposes a lessor's interest in Property leased to the Company or any such
Restricted Subsidiary.
8.18. Mergers; Consolidations.
The Company will not, and will not permit any Restricted Subsidiary to,
merge with or into or consolidate with or into any other Person or permit any
other Person to merge or consolidate with or into it; provided, however, so long
as no Default or Event of Default exists at the time thereof, or would exist
immediately after giving effect thereto, a Restricted Subsidiary may (x) merge
into or consolidate with a Wholly-Owned Restricted Subsidiary that is a
Guarantor and (y) merge with and into the Company so long as the Company is the
survivor of such merger.
8.19. Disposition of Assets.
The Company will not, and will not permit any Restricted Subsidiary to,
convey, sell, lease, sublease, transfer or otherwise dispose of any assets
(including without limitation, capital stock of or other equity interests in any
Subsidiary or other Person) except for:
(a) sales of inventory in the ordinary course of business;
(b) the sale, lease, sublease, transfer or other disposition of
machinery and equipment no longer used or useful in the conduct of
business;
(c) the sale, lease, sublease, transfer or other disposition of assets
to the Company or to a Wholly-Owned Restricted Subsidiary that is a
Guarantor;
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(d) the sale of assets of the SBQ Division (Memphis/Cleveland) to the
extent permitted under the express terms of the Intercreditor Agreement;
(e) transfers of assets made as consideration for Permitted
Investments;
(f) the transfer by Cumberland Recyclers, LLC to BSE of the assets
known as the "mega shredder" so long as: (i) the Company shall have given
at least sixty (60) days prior written notice of such transfer to each
holder of Notes; (ii) no Default or Event of Default exists at the time of
such transfer; (iii) such transfer is made subject to the Lien of the
Collateral Agent in such assets; and (iv) all actions required under the
Security Agreement to maintain the validity, perfection, enforceability and
priority and rank of such Lien in connection with such transfer are taken;
and
(g) other sales and dispositions of Property of the Company or any
Restricted Subsidiary, so long as the Fair Market Value of such Property
does not exceed Ten Million Dollars ($10,000,000) in the aggregate during
any fiscal year of the Company.
8.20. Restricted Payments.
The Company will not declare or make, or permit any Restricted Subsidiary
to declare or make, any Restricted Payment; provided, however, that (a)
Restricted Subsidiaries may declare and make Restricted Payments payable to the
Company or any other Restricted Subsidiary that is a Guarantor, and (b) so long
as no Default or Event of Default shall have occurred and be continuing, or
would result therefrom, the Company may declare and make cash dividends with
respect to its common stock so long as (i) the aggregate amount of such cash
dividends paid during any fiscal quarter of the Company does not exceed Seven
Hundred Fifty Thousand Dollars ($750,000) and (ii) immediately after giving
effect to the payment of any such cash dividend, the aggregate amount of all
cash dividends paid by the Company during the period commencing on July 1, 1999
and ending on the date of the payment of such cash dividend (excluding the cash
dividend in the amount of $737,836.76 paid on August 9, 1999) would not exceed
50% of cumulative consolidated income from continuing operations of the Company
and the Restricted Subsidiaries for such entire period.
8.21. Permitted Investments.
The Company will not, and will not permit any Restricted Subsidiary to,
make any Investment other than Permitted Investments.
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8.22. Accounts with Financial Institutions other than the Banks.
The Company shall not, and shall not permit any Subsidiary to, maintain any
deposit account, savings account, investment account or other similar account
with any financial institution or other Person except for the agent bank and the
Banks under the Credit Agreement, excluding: (a) lockbox accounts existing as of
the Effective Date and disclosed on Schedule 2.10 to the Omnibus Collateral
Agreement the entire balances of which are automatically transferred on a daily
basis to a deposit account of the Company maintained with such agent bank; and
(b) other deposit accounts so long as the balances of such deposit accounts do
not exceed $150,000 in the aggregate at any time; provided, however, Birmingham
Steel Overseas, Ltd. may maintain its existing deposit account with Barclay's
Bank, PLC in Barbados in which the proceeds of foreign sales are deposited so
long as (i) the balance of such account does not exceed One Million Dollars
($1,000,000) in the aggregate at any time and (ii) such Subsidiary remains
qualified as a "foreign sales corporation" under Section 922 of the IRC.
8.23. Proceeds from Equity Issuances.
The Company may use such portion of the Net Proceeds from any Equity
Issuance which the Company is permitted to retain under the terms of the
Intercreditor Agreement and the other applicable Transaction Documents (a) to
fund Restricted Payments not otherwise permitted under Section 8.20, (b) to
finance Investments not otherwise permitted under Section 8.21, (c) to finance
Capital Expenditures not otherwise permitted under Section 8.14 and (d) for any
other purpose not otherwise prohibited by this Agreement.
8.24. No Voluntary Reductions in Commitment.
The Company will not, without the prior written consent of the Special
Majority Holders, agree to any voluntary reduction of the Commitments as defined
in Section 2.12 of the Credit Agreement, whether such voluntary reductions would
be pursuant to such Section 2.12 or otherwise.
9. INFORMATION AS TO COMPANY
9.1. Financial and Business Information.
The Company will deliver to each holder of Notes:
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(a) Monthly Statements - promptly following, and in any event within
thirty (30) days of, the end of each calendar month, the consolidated
balance sheet of the Company and the Subsidiaries as at the end of such
month and the related consolidated statement of income of the Company and
the Subsidiaries for such month, all of which shall be certified by the
Executive Vice President-Chief Financial Officer or Vice President-Finance
and Control of the Company, in his or her opinion, to present fairly, in
accordance with GAAP and in all material respects, the consolidated
financial position of the Company and the Subsidiaries as at the date
thereof and the results of operations for such month (without notes and
subject to normal year-end adjustments), together with a cash analysis
report substantially in the form of Exhibit N to the Credit Agreement;
(b) Quarterly Statements - as soon as practicable after the end of
each quarterly fiscal period in each fiscal year of the Company (other than
the last quarterly fiscal period of each such fiscal year), and in any
event within forty-five (45) days thereafter, duplicate copies of:
(i) a consolidated balance sheet of the Company and the
Subsidiaries as at the end of such quarter, and
(ii) consolidated statements of income and cash flows of the
Company and the Subsidiaries for such quarter and (in the case of the
second and third quarters) for the portion of the fiscal year ending
with such quarter,
setting forth in each case in comparative form the figures for the
corresponding periods in the previous fiscal year, all in reasonable
detail, prepared in accordance with GAAP (without notes and subject to
normal year-end adjustments) applicable to quarterly financial statements
generally, and certified as complete and correct, subject to changes
resulting from year-end adjustments, by the Vice President-Finance and
Control or Executive Vice President of the Company, and accompanied by the
certificate required by Section 9.2 hereof;
(c) Annual Statements - as soon as practicable after the end of each
fiscal year of the Company, and in any event within ninety-five (95) days
thereafter, duplicate copies of:
(i) a consolidated balance sheet of the Company and the
Subsidiaries as at the end of such year, and
(ii) consolidated statements of income, changes in shareholders'
equity and cash flows of the Company and the Subsidiaries for such
year,
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setting forth in each case in comparative form the figures for the previous
fiscal year, all in reasonable detail, prepared in accordance with GAAP,
and accompanied by
(iii) an opinion thereon of the accountants named in Section 2.2
hereof or other independent certified public accountants of recognized
national standing selected by the Company, which opinion shall,
without qualification, state that such financial statements present
fairly, in all material respects, the financial position of the
companies being reported upon and their results of operations and cash
flows and have been prepared in conformity with GAAP, and that the
examination of such accountants in connection with such financial
statements has been made in accordance with generally accepted
auditing standards, and that such audit provides a reasonable basis
for such opinion in the circumstances, and
(iv) the certificates required by Section 9.2 and Section 9.3
hereof;
(d) Company Business Plan -- On or before September 1 of each calendar
year, commencing September 1, 2000, a copy of the Company's internal
business plan for the fiscal year commencing on July 1 of such calendar
year and ending on June 30 of the following year, such plan to include the
Company's forecast on a month-by-month basis;
(e) Effects of APB 30 - together with each financial statement
required to be delivered pursuant to Section 9.1(a), Section 9.1(b) or
Section 9.1(c) hereof, copies of such financial statements prepared by the
Company in accordance with GAAP (without notes and subject to normal year-
end adjustments) in all respects but which excludes the effect of the
accounting entries made by the Company with respect to its financial
statements for the fiscal year ending June 30, 1999 and as required under
Accounting Principles Board Opinion No. 30 ("APB 30") solely to the extent
relating to the SBQ Division. Each such financial statement shall
disclose, in form and substance satisfactory to the Majority Holders, the
resulting differences between such statement and one prepared entirely in
accordance with GAAP;
(f) Audit Reports - promptly upon receipt thereof, a copy of each
other report submitted to the Company or any Subsidiary by independent
accountants in connection with any management report, special audit report
or comparable analysis prepared by them with respect to the books of the
Company or any Subsidiary;
(g) SEC and Other Reports - promptly upon their becoming available,
one copy of each financial statement, report, notice or proxy
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statement sent by the Company or any Subsidiary to stockholders generally,
and of each regular or periodic report and any registration statement,
prospectus or written communication (other than transmittal letters and
routine comment letters with respect to drafts of such statements, reports
or prospectuses), and each amendment thereto, in respect thereof filed by
the Company or any Subsidiary with, or received by, such Person in
connection therewith from, the National Association of Securities Dealers,
any securities exchange or the Securities and Exchange Commission or any
successor agency;
(h) ERISA - immediately upon becoming aware of the occurrence of any
(i) "reportable event" (as defined in section 4043 of ERISA) or
(ii) "prohibited transaction" (as defined in section 406 or
section 4975 of the IRC)
in connection with any Pension Plan or any trust created thereunder, a
written notice specifying the nature thereof, what action the Company is
taking or proposes to take with respect thereto, and, when known, any
action taken by the IRS, the DOL or the PBGC with respect thereto;
(i) ERISA Waivers - prompt written notice of and a description of any
request pursuant to section 303 of ERISA or section 412 of the IRC for, or
notice of the granting pursuant to such section 303 or section 412 of, a
waiver in respect of all or part of the minimum funding standard set forth
in ERISA or the IRC, as the case may be, of any Pension Plan, and, in
connection with the granting of any such waiver, the amount of any waived
funding deficiency (as defined in such section 303 or such section 412) and
the terms of such waiver, in each of the cases specified in this clause
(i), where the effect of such conditions or events or of events or
conditions related thereto could reasonably be expected to have a Material
Adverse Effect;
(j) Other ERISA Notices - prompt written notice of and, where
applicable, a description of
(i) any notice from the PBGC in respect of the commencement of
any proceedings pursuant to section 4042 of ERISA to terminate any
Pension Plan or for the appointment of a trustee to administer any
Pension Plan,
(ii) any distress termination notice delivered to the PBGC under
section 4041 of ERISA in respect of any Pension Plan, and any
determination of the PBGC in respect thereof,
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(iii) the placement of any Multiemployer Plan in reorganization
status under Title IV of ERISA,
(iv) any Multiemployer Plan becoming "insolvent" (as defined in
section 4245 of ERISA) under Title IV of ERISA,
(v) the whole or partial withdrawal of the Company or any ERISA
Affiliate from any Multiemployer Plan and the withdrawal liability
incurred in connection therewith, and
(vi) the withdrawal of the Company or any ERISA Affiliate from
any Multiple Employer Pension Plan and the withdrawal liability under
ERISA incurred in connection therewith;
in each of the cases specified in the foregoing clauses (i) through (vi),
inclusive, where the effect of such conditions or events or of events or
conditions related thereto could reasonably be expected to have a Material
Adverse Effect;
(k) Notice of Default or Event of Default - immediately upon becoming
aware of the existence of any condition or event that constitutes a Default
or an Event of Default, a written notice specifying the nature and period
of existence thereof or of such failure and what action the Company is
taking or proposes to take with respect thereto;
(l) Notice of Claimed Default - immediately upon becoming aware that
the holder of any Note, or of any evidence of indebtedness or other
Security of the Company or any Subsidiary, shall have given notice or taken
any other action with respect to a claimed Default, Event of Default,
default or event of default, a written notice specifying the notice given
or action taken by such holder and the nature of the claimed Default, Event
of Default, default or event of default and what action the Company is
taking or proposes to take with respect thereto;
(m) Notice of Violation of Environmental Protection Law - promptly
upon becoming aware of the existence of any violation by the Company or any
Subsidiary of any Environmental Protection Law that could reasonably be
expected to have a Material Adverse Effect, a written notice specifying the
nature and period of such violation and what action any one or more of the
Company and such Subsidiary, as the case may be, are taking or propose to
take with respect thereto;
(n) Information furnished to Banks, etc. - not later than the time
furnished to any of the Banks or any agent acting for the Banks under the
Credit Agreement, copies of each report, statement, document, notice or
other item furnished pursuant to Article VIII of the Credit Agreement or
any related instrument, agreement or other document;
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(o) Monthly Financial Report - as soon as practicable after the end of
each quarterly fiscal period in each fiscal year of the Company, and in any
event within thirty (30) days thereafter, a copy of the "Financial Report"
(the Company's monthly internal operating report) together with the
schedules that are supplemental thereto; and
(p) Requested Information - with reasonable promptness, such other
data and information as from time to time may be reasonably requested by
any holder of Notes, including, without limitation,
(i) copies of any statement, report or certificate furnished to
any holder of Debt of the Company or any Subsidiary,
(ii) information requested to comply with any request of the
National Association of Insurance Commissioners in respect of the
designation of the Notes, and
(iii) information requested to comply with 17 C.F.R.
(S)230.144A, as amended from time to time,
(any such request with respect to the data and information referred to in
the foregoing clauses (i), (ii) and (iii) being deemed to be reasonable for
purposes of this clause (p)).
9.2. Officers' Certificates.
Each set of financial statements delivered to each holder of Notes pursuant
to Section 9.1(b) or Section 9.1(c) hereof shall be accompanied by a certificate
of the Vice President-Finance and Control or the Executive Vice President-Chief
Financial Officer of the Company setting forth:
(a) Covenant Compliance - the information (including detailed
calculations) required in order to establish whether the Company was in
compliance with the requirements of Sections 8.11 through Section 8.17
hereof, inclusive, and Sections 8.19, 8.20 and 8.23 during the period
covered by the income statement then being furnished (including with
respect to each such Section, where applicable, the calculations of the
maximum or minimum amount, ratio or percentage, as the case may be,
permissible under the terms of such Sections, and the calculation of the
amounts, ratio or percentage then in existence); and
(b) Event of Default - a statement that the signers have reviewed the
relevant terms hereof and have made, or caused to be made, under their
supervision, a review of the transactions and conditions of the Company and
the Subsidiaries from the beginning of the accounting period covered by the
income statements being delivered therewith to the date of the certificate
and
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that such review shall not have disclosed the existence during such period
of any condition or event that constitutes a Default or an Event of Default
or, if any such condition or event existed or exists, specifying the nature
and period of existence thereof and what action the Company shall have
taken or proposes to take with respect thereto.
9.3. Accountants' Certificates.
Each set of annual financial statements delivered pursuant to Section
9.1(c) shall be accompanied by a certificate of the accountants who certify such
financial statements, stating that they have reviewed this Agreement and stating
further, whether, in making their audit, such accountants have become aware of
any condition or event that then constitutes a Default or an Event of Default,
and, if such accountants are aware that any such condition or event then exists,
specifying the nature and period of existence thereof.
9.4. Quarterly Review With Financial Advisor.
Within ten (10) Business Days of the delivery of the financial statements
provided pursuant to Section 9.1(b) for each quarterly period ending on or prior
to an Acceptable SBQ Asset Sale, the Company will cause its Chief Financial
Officer or Vice President-Finance and Control to meet, either in person at the
Company's executive office or via telephone conference call, with a
representative of Nightingale or such other Person designated by the Majority
Holders to discuss the Company's financial condition and results of operations
as such condition and results of operations relate to the Company's projections
for such items previously delivered to Nightingale or the holders of the Notes.
The Company agrees to pay, for each such quarterly period, Nightingale's fees in
connection with such review and any reporting thereof to the holders of the
Notes in an amount not to exceed Three Thousand Dollars ($3,000), plus its
reasonable out-of-pocket costs and expenses in connection therewith.
9.5. Inspection.
The Company will permit the representatives of each holder of Notes, once
only during each fiscal quarter of the Company at such reasonable time as may be
requested by such holder, to visit and inspect any of the Properties of the
Company or any Subsidiary, to examine all their respective books of account,
records, reports and other papers, to make copies and extracts therefrom, and to
discuss their respective affairs, finances and accounts with their respective
officers, employees and independent public accountants (and by this provision
the Company authorizes such accountants to discuss the finances and affairs of
the Company and the Subsidiaries), provided that during any time when an Event
of Default exists, any such inspection or visit shall be at the expense of the
Company and may be made as often as may be requested.
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10. EVENTS OF DEFAULT
10.1. Nature of Events.
An "Event of Default" shall exist if any of the following occurs and is
continuing:
(a) Principal or Make-Whole Amount Payments - the Company shall fail
to make any payment of principal or Make-Whole Amount on any Note on or
before the date such payment is due;
(b) Certain Prepayments - the Company shall fail to fulfill any of its
obligations set forth in Section 6.1 hereof;
(c) Interest Payments - the Company shall fail to make any payment of
interest on any Note on or before five (5) Business Days after the date
such payment is due;
(d) Other Defaults - the Company or any Subsidiary shall fail to
comply with any other provision of this Agreement or any other Financing
Document, and such failure shall continue for more than thirty (30) days
after such failure shall first become known to any officer of the Company;
(e) Warranties or Representations - any warranty, representation or
other statement by or on behalf of the Company contained in this Agreement
or any other Financing Document or in any instrument furnished in
compliance with or in reference to this Agreement or any other Financing
Document shall have been false or misleading in any material respect when
made or deemed made;
(f) Default on Debt or Other Security -
(i) the Company or any Restricted Subsidiary shall fail to make
any payment on any Debt when due, or
(ii) any event shall occur or any condition shall exist in
respect of Debt or any Security of the Company or any Restricted
Subsidiary, or under any agreement securing or relating to such Debt
or Security, that immediately or with any one or more of (x) the
passage of time, (y) the giving of notice or (z) the expiration of
waivers or modifications granted in respect of such event or
condition:
(A) causes (or permits any one or more of the holders
thereof or a trustee therefor to cause) such Debt or Security, or
a portion thereof, to become due prior to its stated maturity or
prior to its regularly scheduled date or dates of payment; or
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(B) permits any one or more of the holders thereof or a
trustee therefor to require the Company or any Restricted
Subsidiary to repurchase such Debt or Security;
provided that either such Debt is outstanding under the Credit
Agreement or the aggregate amount of all obligations in respect of
such Debt and Securities exceeds at such time Ten Million Dollars
($10,000,000); provided, further, however, this clause (ii) shall not
be deemed to apply to the Debt evidenced by the industrial revenue
bonds described in Schedule 3.8 to the Waiver and Third Amendment
which are supported by letters of credit issued for the account of the
Company or American Steel & Wire Corporation;
(g) Involuntary Bankruptcy Proceedings -
(i) a receiver, liquidator, custodian or trustee of the Company,
or any Restricted Subsidiary, or of all or any of the Property of
either, shall be appointed by court order and such order remains in
effect for more than forty-five (45) days; or an order for relief
shall be entered with respect to the Company or any Restricted
Subsidiary, or the Company or any Restricted Subsidiary shall be
adjudicated a bankrupt or insolvent,
(ii) any of the Property of the Company or any Restricted
Subsidiary shall be sequestered by court order and such order remains
in effect for more than forty-five (45) days, or
(iii) a petition shall be filed against the Company or any
Restricted Subsidiary under any bankruptcy, reorganization,
arrangement, insolvency, readjustment of debt, dissolution or
liquidation law of any jurisdiction, whether now or hereafter in
effect, and shall not be dismissed within forty-five (45) days after
such filing;
(h) Voluntary Petitions - the Company or any Restricted Subsidiary
shall file a petition in voluntary bankruptcy or seeking relief under any
provision of any bankruptcy, reorganization, arrangement, insolvency,
readjustment of debt, dissolution or liquidation law of any jurisdiction,
whether now or hereafter in effect, or shall consent to the filing of any
petition against it under any such law;
(i) Assignments for Benefit of Creditors, etc. - the Company or a
Restricted Subsidiary shall make an assignment for the benefit of its
creditors, or shall admit in writing its inability, or shall fail, to pay
its debts generally as they become due, or shall consent to the appointment
of a receiver, liquidator or trustee of the Company or a Restricted
Subsidiary or of all or any part of the Property of either;
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(j) Undischarged Final Judgments - a final judgment or final judgments
for the payment of money aggregating in excess of Ten Million Dollars
($10,000,000) shall be outstanding against one or more of the Company and
the Restricted Subsidiaries and any one of such judgments shall have been
outstanding for more than thirty (30) days from the date of its entry and
shall not have been discharged in full or stayed; or
(k) Other Financing Documents -
(i) the Guaranty Agreement or any Security Document shall cease
to be in full force and effect or shall be declared by a court or
Governmental Authority of competent jurisdiction to be void, voidable
or unenforceable against the Company or any Restricted Subsidiary
which is a party to such Financing Document;
(ii) the Company or any Restricted Subsidiary shall disavow,
revoke or terminate any Financing Document to which it is a party or
shall otherwise challenge or contest in any action, suit or proceeding
in any court or before any Governmental Authority the validity or
enforceability of any Financing Document; or
(iii) the Collateral Agent shall, for a period of thirty (30)
days, cease to have a valid and perfected first-priority security
interest (subject only to Liens permitted by the Financing Documents)
in Collateral having an aggregate book value in excess of Five Million
Dollars ($5,000,000), or in any other material portion of the
Collateral, for any reason other than the failure of the Collateral
Agent to take any action within its control.
10.2. Default Remedies.
(a) Acceleration on Event of Default.
(i) If an Event of Default specified in clause (g), (h) or (i) of
Section 10.1 hereof shall exist, all of the Notes at the time
outstanding shall automatically become immediately due and payable
together with interest accrued thereon and, to the extent permitted by
law, the Make-Whole Amount at such time with respect to the principal
amount of such Notes, without presentment, demand, protest or notice
of any kind, all of which are hereby expressly waived.
(ii) If an Event of Default other than those specified in clause
(g), (h) or (i) of Section 10.1 hereof shall exist, the holder or
holders of at least thirty-five percent (35%) in principal amount of
the Notes then outstanding (exclusive of Notes then owned by any one
or more of the Company, any Restricted Subsidiary or any Affiliate)
may exercise any
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right, power or remedy permitted to such holder or holders by law, and
shall have, in particular, without limiting the generality of the
foregoing, the right to declare the entire principal of, and all
interest accrued on, all the Notes then outstanding to be, and such
Notes shall thereupon become, forthwith due and payable, without any
presentment, demand, protest or other notice of any kind, all of which
are hereby expressly waived, and the Company shall forthwith pay to
the holder or holders of all the Notes then outstanding the entire
principal of, and interest accrued on, the Notes and, to the extent
permitted by law, the Make-Whole Amount at such time with respect to
such principal amount of such Notes.
(b) Acceleration on Payment Default. During the existence of an Event
of Default described in Section 10.1(a), Section 10.1(b) or Section 10.1(c)
hereof, and irrespective of whether the Notes then outstanding shall have
been declared to be due and payable pursuant to Section 10.2(a)(ii) hereof,
any holder of Notes that shall have not consented to any waiver with
respect to such Event of Default may, at its option, by notice in writing
to the Company, declare the Notes then held by such holder to be, and such
Notes shall thereupon become, forthwith due and payable together with all
interest accrued thereon, without any presentment, demand, protest or other
notice of any kind, all of which are hereby expressly waived, and the
Company shall forthwith pay to such holder the entire principal of and
interest accrued on such Notes and, to the extent permitted by law, the
Make-Whole Amount at such time with respect to such principal amount of
such Notes.
(c) Valuable Rights. The Company acknowledges, and the parties hereto
agree, that the right of each holder to maintain its investment in the
Notes free from repayment by the Company (except as herein specifically
provided for) is a valuable right and that the provision for payment of a
Make-Whole Amount by the Company in the event that the Notes are prepaid or
are accelerated as a result of an Event of Default, is intended to provide
compensation for the deprivation of such right under such circumstances.
(d) Other Remedies. During the existence of an Event of Default and
irrespective of whether the Notes then outstanding shall have been declared
to be due and payable pursuant to Section 10.2(a)(ii) hereof and
irrespective of whether any holder of Notes then outstanding shall
otherwise have pursued or be pursuing any other rights or remedies, any
holder of Notes may proceed to protect and enforce its rights under this
Agreement, under such Notes and under the other Financing Documents by
exercising such remedies as are available to such holder in respect thereof
under applicable law, either by suit in equity or by action at law, or
both, whether for specific performance of any agreement contained herein or
in aid of the exercise of any power granted herein, provided that the
maturity of such
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holder's Notes may be accelerated only in accordance with Section 10.2(a)
and Section 10.2(b) hereof.
(e) Nonwaiver and Expenses. No course of dealing on the part of any
holder of Notes nor any delay or failure on the part of any holder of Notes
to exercise any right shall operate as a waiver of such right or otherwise
prejudice such holder's rights, powers and remedies. If the Company shall
fail to pay when due any principal of, or Make-Whole Amount or interest on,
any Note, or shall fail to comply with any other provision hereof, the
Company shall pay to each holder of Notes, to the extent permitted by law,
such further amounts as shall be sufficient to cover the costs and
expenses, including, but not limited to, reasonable attorneys' fees,
incurred by such holder in collecting any sums due on such Notes or in
otherwise assessing, analyzing or enforcing any rights or remedies that are
or may be available to it.
10.3. Annulment of Acceleration of Notes.
If a declaration is made pursuant to Section 10.2(a)(ii) hereof, then and
in every such case, the holders of sixty-six percent (66%) in aggregate
principal amount of the Notes then outstanding (exclusive of Notes then owned by
any one or more of the Company, any Restricted Subsidiaries and any Affiliates)
may, by written instrument filed with the Company, rescind and annul such
declaration, and the consequences thereof, provided that at the time such
declaration is annulled and rescinded:
(a) no judgment or decree shall have been entered for the payment of
any moneys due on or pursuant hereto or the Notes;
(b) all arrears of interest upon all the Notes and all other sums
payable hereunder and under the Notes (except any principal of, or interest
or Make-Whole Amount on, the Notes that shall have become due and payable
by reason of such declaration under Section 10.2(a)(ii) hereof) shall have
been duly paid; and
(c) each and every other Default and Event of Default shall have been
waived pursuant to Section 12.5 hereof or otherwise made good or cured,
and provided further that no such rescission and annulment shall extend to or
affect any subsequent Default or Event of Default or impair any right consequent
thereon.
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11. INTERPRETATION OF THIS AGREEMENT
11.1. Terms Defined.
As used herein, the following terms have the respective meanings set forth
below or set forth in the Section hereof following such term:
Acceptable Insurer - means any financially sound and reputable insurance
company accorded a rating by A.M. Best Company of "A-" or better and a size
rating of "VI" or better (or a comparable rating by any comparable successor
rating agency).
Acceptable SBQ Asset Sale - means a sale by the Company of the SBQ Division
(Memphis/Cleveland).
Accession Agreement - means an Accession Agreement in the form attached as
Exhibit F to the Omnibus Collateral Agreement.
Affiliate - means, at any time, a Person (other than a Restricted
Subsidiary)
(a) that directly or indirectly through one or more intermediaries
Controls, or is Controlled by, or is under common Control with, the
Company,
(b) that beneficially owns or holds five percent (5%) or more of any
class of the Voting Stock of the Company, or
(c) five percent (5%) or more of the Voting Stock (or in the case of a
Person that is not a corporation, five percent (5%) or more of the equity
interest) of which is beneficially owned or held by the Company or a
Subsidiary,
at such time.
As used in this definition:
Control - means the possession, directly or indirectly, of the
power to direct or cause the direction of the management and policies
of a Person, whether through the ownership of voting securities, by
contract or otherwise.
Agreement, this - means this agreement, as it may be amended and restated
from time to time.
AIR - means American Iron Reduction, L.L.C., a limited liability company
organized under the laws of the State of Delaware.
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Amended Notes - Section 1.2(b).
Banks - means the lending institutions listed on the signature pages of the
Credit Agreement and their respective successors and assigns.
Board of Directors - means, at any time, the board of directors of the
Company or any committee thereof that, in the instance, shall have the lawful
power to exercise the power and authority of such board of directors.
BSE - means Birmingham Southeast, LLC, a limited liability company
organized under the laws of the State of Delaware.
Business Day - means a day other than a Saturday, a Sunday or, if the
provisions of Section 4.1 hereof are applicable with respect to any Note, a day
on which the bank designated (by the holder of such Note) to receive (for such
holder's account) payments on such Note is required by law (other than a general
banking moratorium or holiday for a period exceeding four (4) consecutive days)
to be closed.
Capital Expenditures - means, with respect to any Person, all expenditures
made and liabilities incurred for the acquisition of assets which are not, in
accordance with GAAP, treated as expense items for such Person in the year made
or incurred or as a prepaid expense applicable to a future year or years, and
shall include all Capitalized Lease obligations.
Capitalized Lease - means, at any time, a lease with respect to which,
under GAAP, the lessee is or will be required to recognize the acquisition of an
asset and the incurrence of a liability at such time.
Change in Control - means any Acquisition subsequent to the Original
Closing Date by any Person, or related Persons constituting a "group" (as such
term is defined in section 13(d) of the Securities Exchange Act of 1934), of
(a) the power to elect, appoint or cause the election or appointment of
at least a majority of the members of the Board of Directors (other than
the normal acquisition of proxies by the then current Board of Directors),
through beneficial ownership of the capital stock of the Company or
otherwise, or
(b) all or substantially all of the properties and assets of the
Company;
provided, however, that a Change in Control pursuant to the foregoing clause (b)
shall not be deemed to have occurred if no Person, or related Persons
constituting a "group" for purposes of section 13(d) of the Securities Exchange
Act of 1934, shall have the
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power to elect, appoint or cause the election or appointment of at least a
majority of the members of the board of directors of such successor or
transferee.
For purposes of this definition "Acquisition" of the power or properties
and assets stated in the preceding sentence means the earlier of
(i) the actual possession thereof and
(ii) the consummation of any transaction or series of related
transactions which, with the passage of time, will give such Person or
Persons the actual possession thereof.
Closing - Section 1.3.
Collateral - has the meaning specified in the Intercreditor Agreement.
Collateral Agent - has the meaning specified in the Intercreditor
Agreement.
Commitment - has the meaning specified in the Credit Agreement as in effect
on the Effective Date.
Company - has the meaning specified in the introductory sentence hereof.
Consolidated EBITDA - means, for any period, the sum of (a) Consolidated
Net Income for such period, plus (b) the aggregate amount of (i) taxes imposed
on, or measured by, income or excess profits, (ii) Consolidated Interest
Expense, and (iii) depreciation and amortization for such period (to the extent,
and only to the extent, that any such amount in clauses (i), (ii) or (iii) was
deducted in the computation of Consolidated Net Income for such period), in each
case accrued for such period by the Company and the Restricted Subsidiaries,
determined on a consolidated basis for such Persons.
Consolidated EBITDAR - means, for any period, the sum of (a) Consolidated
EBITDA for such period, plus (b) Rental Expense for such period (to the extent,
and only to the extent, deducted in the computation of Consolidated Net Income
for such period).
Consolidated Interest Expense - means, for any period, all interest charges
for such period accrued on or with respect to Debt of the Company and the
Restricted Subsidiaries (including, without limitation, amortization of debt
discount and expense and imputed interest on Capitalized Lease obligations).
Consolidated Net Income - means, with respect to the Company and the
Restricted Subsidiaries for any period of computation thereof, the net income
(or loss)
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of the Company and the Restricted Subsidiaries on a consolidated basis for such
period; provided, however, that the following shall be excluded when determining
Consolidated Net Income:
(a) any item of gain or loss resulting from the sale, conversion or
other disposition of plant, property and equipment;
(b) gains or losses on the acquisition, retirement, sale or other
disposition of capital stock and other securities of the Company and the
Restricted Subsidiaries;
(c) the income (or loss) for such fiscal period of any Person prior to
the date such Person becomes a Restricted Subsidiary or is merged into or
consolidated with the Company or any of the Restricted Subsidiaries, or
such Person's assets are acquired by the Company or any of the Restricted
Subsidiaries;
(d) any write-up of any asset;
(e) any other net gains or losses of an extraordinary nature as
determined in accordance with GAAP;
(f) any earnings attributable to the amortization of negative
goodwill;
(g) that portion of net earnings of any Restricted Subsidiary that is
unavailable for payment as dividends to the Company or another Restricted
Subsidiary as a result of a legal or contractual prohibition, unless such
portion of such net earnings is legally available for either: (x)
reimbursement to the Company or another Restricted Subsidiary for advances,
loans or allocated expenses, or (y) advances or loans to the Company or
another Restricted Subsidiary;
(h) pre-operating/start-up costs as would be set forth in the
financial statements of the Company and the Restricted Subsidiaries for
such period prepared in accordance with GAAP; provided, however, the amount
of such costs excluded for a fiscal quarter occurring during any such
period shall not exceed the following amounts: (w) $10,000,000 for the
fiscal quarter ending on September 30, 1999; (x) $8,000,000 for the fiscal
quarter ending December 31, 1999; (y) $5,000,000 for the fiscal quarter
ending March 31, 2000; and (z) $0 for each fiscal quarter ended thereafter;
(i) any losses on disposal of the SBQ Division; and
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(j) any non-cash charges relating to the restructuring of, or write-
down of the investments of the Company in, AIR and PCR.
For purposes of calculating Consolidated Net Income, the amount shall
include income from both continuing and discontinued operations, except that
adjustments to the allowance for discontinued operations and the related tax
effects shall be excluded from such amount.
Consolidated Tangible Net Worth - means (a) the Company's stockholder's
equity which would appear as such on a consolidated balance sheet of the Company
and the Restricted Subsidiaries prepared in accordance with GAAP less (b) all
intangible items reflected therein, including all goodwill, all intangible plant
expansion costs, all unamortized debt discount and expense, unamortized research
and development expense, unamortized deferred charges, patents, trademarks,
service marks, trade names and copyrights, unamortized excess cost of investment
in Subsidiaries over equity at dates of acquisition, and all similar items which
should properly be treated as intangibles in accordance with GAAP.
Control Event - means the execution of any written agreement that, when
fully performed by the parties thereto, would result in a Change in Control.
Control Prepayment Date - Section 6.1.
Credit Agreement - means that certain Credit Agreement dated as of March
17, 1997, by and among the Company, Bank of America, N.A., as agent, and the
Banks, as may be amended, restated or modified from time to time.
Debt - means, with respect to a Person and at the time of determination
thereof, all of the following (without duplication):
(a) obligations of such Person in respect of money borrowed;
(b) obligations of such Person (other than trade debt incurred in the
ordinary course of business), (i) represented by notes payable, or drafts
accepted, in each case representing extensions of credit, (ii) evidenced by
bonds, debentures, notes or similar instruments, or (iii) constituting
purchase money indebtedness, conditional sales contracts, title retention
debt instruments or other similar instruments, upon which interest charges
are customarily paid or that are issued or assumed as full or partial
payment for property;
(c) obligations of such Person in respect of mandatorily redeemable
Securities issued by such Person;
(d) Capitalized Lease obligations of such Person;
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(e) all reimbursement obligations of such Person under any letters of
credit or acceptances (whether or not the same have been presented for
payment); and
(f) all Debt of other Persons which (i) such Person has Guaranteed or
(ii) are secured by a Lien on any property of such Person (whether or not
such Person has assumed liability with respect to such Debt).
Debt to Consolidated EBITDA Ratio - means, for any Four-Quarter Period of
determination, the ratio of (a) Debt of the Company and the Restricted
Subsidiaries as determined on a consolidated basis at the end of such period to
(b) Consolidated EBITDA for such period.
Default - means an event or condition the occurrence of which would, with
the lapse of time or the giving of notice or both, become an Event of Default.
DOL - means the Department of Labor of the United States of America or any
successor organization thereof.
Dollars or $ - means United States of America dollars.
Effective Date - means October 12, 1999.
Environmental Protection Law - means any federal, state, county, regional
or local law, statute or regulation (including, without limitation, CERCLA, RCRA
and SARA) enacted in connection with or relating to the protection or regulation
of the environment, including, without limitation, those laws, statutes and
regulations regulating the disposal, removal, production, storing, refining,
handling, transferring, processing or transporting of Hazardous Substances, and
any regulations, issued or promulgated in connection with such statutes by any
Governmental Authority and any orders, decrees or judgments issued by any court
of competent jurisdiction in connection with any of the foregoing.
As used in this definition:
CERCLA - means the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as amended from time to time
(by SARA or otherwise), and all rules and regulations promulgated in
connection therewith.
RCRA - means the Resource Conservation and Recovery Act of 1976,
as amended from time to time, and all rules and regulations issued in
connection therewith.
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SARA - means the Superfund Amendments and Reauthorization Act of
1986, as amended from time to time, and all rules and regulations
promulgated in connection therewith.
Equity Issuance - has the meaning specified in the Intercreditor Agreement
(as in effect on the Effective Date).
ERISA - means the Employee Retirement Income Security Act of 1974, as
amended from time to time.
ERISA Affiliate - means any corporation or trade or business that
(i) is a member of the same controlled group of corporations (within
the meaning of section 414(b) of the IRC) as the Company, or
(ii) is under common control (within the meaning of section 414(c) of
the IRC) with the Company.
Event of Default - Section 10.1.
Existing Reimbursement Agreements - means (a) that certain Amended and
Restated Reimbursement Agreement, dated as of October 12, 1999, among the
Company, American Steel & Wire Corporation and Bank of America, N.A., (b) that
certain Reimbursement Agreement, dated as of October 1, 1996, between PNC Bank,
National Association successor to PNC Bank, Kentucky, Inc. and the Company, and
(c) that certain Reimbursement Agreement, dated as of August 15, 1995, between
the Company and PNC Bank, National Association, successor to PNC Bank, Kentucky,
Inc.
Fair Market Value - means, at any time, with respect to any Property, the
sale value of such Property that would be realized in an arm's-length sale at
such time between an informed and willing buyer, and an informed and willing
seller, under no compulsion to buy or sell, respectively.
Financing Documents - means this Agreement, the Notes, the Omnibus
Collateral Agreement, the Guaranty Agreement, the Intercreditor Agreement, the
Security Documents and all other documents, instruments and agreements executed
in connection therewith or contemplated thereby, as the same may be amended,
restated or otherwise modified from time to time.
Fixed Charge Coverage Ratio - means, with respect to any period of
determination, the ratio of (a) Consolidated EBITDAR for such period to (b) the
sum of (i) Consolidated Interest Expense for such period plus (ii) Rental
Expense for such period plus (iii) the aggregate amount of all scheduled
principal payments on
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Debt made by the Company and the Restricted Subsidiaries during such period
(excluding any payments made by the Company to PNC Bank, National Association in
respect of reimbursement obligations owing in connection with Irrevocable Letter
of Credit No. 14321 dated August 30, 1995 issued by PNC Bank, Kentucky, Inc. for
the benefit of PNC Bank, Kentucky, Inc. (predecessor to The Chase Manhattan
Trust Company, National Association), as Trustee and having an initial stated
amount of $10,493,151), plus (iv) the aggregate amount of all cash dividends
paid by the Company with respect to any of its capital stock during such period.
Foreign Pension Plan - means any plan, fund or other similar program
(a) established or maintained outside of the United States of America by
any one or more of the Company or the Subsidiaries primarily for the
benefit of the employees (substantially all of whom are aliens not residing
in the United States of America) of the Company or such Subsidiaries which
plan, fund or other similar program provides for retirement income for such
employees or results in a deferral of income for such employees in
contemplation of retirement, and
(b) not otherwise subject to ERISA.
Four-Quarter Period - means a period of four full consecutive fiscal
quarters of the Company and the Restricted Subsidiaries, taken together as one
accounting period, and unless set forth herein to the contrary, shall mean the
four full consecutive fiscal quarters of the Company and the Restricted
Subsidiaries ending on (or most recently ending before) the date of any
computation of any given financial ratio or covenant contained herein.
GAAP - means accounting principles as promulgated from time to time in
statements, opinions and pronouncements by the American Institute of Certified
Public Accountants and the Financial Accounting Standards Board and in such
statements, opinions and pronouncements of such other entities with respect to
financial accounting of for-profit entities as shall be accepted by a
substantial segment of the accounting profession in the United States.
Governmental Authority - means
(a) the government of
(i) the United States of America and any State or other
political subdivision thereof, or
(ii) any jurisdiction (y) in which the Company or any Subsidiary
conducts all or any part of its business or (z) that
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asserts jurisdiction over the conduct of the affairs or Properties of
the Company or any Subsidiary, or
(b) any entity exercising executive, legislative, judicial, regulatory or
administrative functions of, or pertaining to, any such government.
Guarantor - means, at any time, any Restricted Subsidiary that is a
Guarantor at such time under the Guaranty Agreement.
Guaranty - means with respect to any Person (for the purposes of this
definition, the "Guarantor") any obligation (except the endorsement in the
ordinary course of business of negotiable instruments for deposit or collection)
of such Person guaranteeing or in effect guaranteeing any indebtedness, dividend
or other obligation of any other Person (the "Primary Obligor") in any manner,
whether directly or indirectly, including (without limitation) obligations
incurred through an agreement, contingent or otherwise, by the Guarantor:
(a) to purchase such indebtedness or obligation or any Property or
assets constituting security therefor;
(b) to advance or supply funds
(i) for the purpose of payment of such indebtedness or
obligation, or
(ii) to maintain working capital or other balance sheet
condition or any income statement condition of the Primary Obligor or
otherwise to advance or make available funds for the purchase or
payment of such indebtedness or obligation;
(c) to lease Property or to purchase Securities or other Property or
services primarily for the purpose of assuring the owner of such
indebtedness or obligation of the ability of the Primary Obligor to make
payment of the indebtedness or obligation; or
(d) otherwise to assure the owner of the indebtedness or obligation of
the Primary Obligor against loss in respect thereof.
For purposes of computing the amount of any Guaranty, in connection with any
computation of indebtedness or other liability, it shall be assumed that the
indebtedness or other liabilities that are the subject of such Guaranty are
direct obligations of the issuer of such Guaranty.
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Guaranty Agreement - means that certain Guaranty Agreement, dated as of the
Effective Date, entered into by each of the Restricted Subsidiaries identified
on the signature pages thereto in favor of the Collateral Agent, as the same may
be amended, restated, modified or supplemented (including to add new
Guarantors), and as in effect from time to time.
Hazardous Substances - means any and all pollutants, contaminants, toxic or
hazardous wastes or any other substances that might pose a hazard to health or
safety, the removal of which may be required or the generation, manufacture,
refining, production, processing, treatment, storage, handling, transportation,
transfer, use, disposal, release, discharge, spillage, seepage, or filtration of
which is or shall be restricted, prohibited or penalized by any applicable law.
Indebtedness - means, at any time, with respect to any Person, without
duplication,
(a) its liabilities for borrowed money (whether or not evidenced by a
Security) and its obligations in respect of mandatorily redeemable
preferred stock;
(b) any liabilities for borrowed money secured by any Lien existing on
Property owned by such Person (whether or not such liabilities have been
assumed);
(c) any obligations in respect of any Capitalized Lease of such Person;
(d) the present value of all payments due under any arrangement for
retention of title or any conditional sale agreement (other than a
Capitalized Lease) discounted at the implicit rate, if known, with respect
thereto or, if unknown, at 8% per annum;
(e) obligations of such Person in respect of letters of credit or
instruments serving a similar function issued or accepted by banks and
other financial institutions for the account of such Person (whether or not
representing obligations for borrowed money); and
(f) any Guaranty of such Person of any Indebtedness of another Person.
Institutional Investor - means the Purchasers, any affiliate of any of the
Purchasers, and any holder of Notes that is an "accredited investor" as defined
in section 2(15) of the Securities Act.
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Intercreditor Agreement - means that certain Collateral Agency and
Intercreditor Agreement dated as of the Effective Date, among the Collateral
Agent, the Banks, the L/C Issuers, the holders of the 1995 Notes, the holders of
the Notes, The Chase Manhattan Trust Company, National Association, as successor
to PNC Bank, National Association, as successor to PNC Bank, Kentucky, Inc., in
the capacity specified therein, First Union National Bank, in the capacity
specified therein, the Company and each of the Restricted Subsidiaries
identified on the signature pages thereto, as amended from time to time.
Investment - means any investment, made in cash or by delivery of Property,
by the Company or any Restricted Subsidiary (x) in any Person, whether by
acquisition of stock, indebtedness or other obligation or Security, or by loan,
Guaranty, advance or capital contribution, or otherwise, or (y) in any Property.
IRC - means the Internal Revenue Code of 1986, together with all rules and
regulations promulgated pursuant thereto, as amended from time to time.
IRS - means the Internal Revenue Service and any successor agency.
L/C Issuer - means, with respect to the Existing Reimbursement Agreements,
Bank of America, N.A. and PNC Bank, National Association, as applicable.
Lien - means any interest in Property constituting any pledge, assignment,
hypothecation, mortgage, security interest, deposit arrangement, conditional
sale or title retaining contract, sale and leaseback transaction, financing
statement filing, lessor's or lessee's interest under any lease, subordination
of any claim or right, or any type of lien, charge, encumbrance, preferential
arrangement or other claim or right. The term "Lien" includes, with respect to
stock, stockholder agreements, voting trust agreements, buy-back agreements and
all similar arrangements. For the purposes hereof, the Company and each
Subsidiary is deemed to be the owner of any Property that it shall have acquired
or holds subject to a conditional sale agreement, Capitalized Lease or other
arrangement pursuant to which title to the Property has been retained by or
vested in some other Person for security purposes, and such retention or vesting
is deemed a Lien.
Majority Holders - means, at any time, the holders of at least fifty-one
percent (51%) in principal amount of the Notes at the time outstanding
(exclusive of Notes then owned by any one or more of the Company, any Restricted
Subsidiary, any Affiliate and any officer or director of any thereof).
Make-Whole Amount - means, with respect to any date (the "Payment Date"),
and any principal amount of Notes required for any reason to be paid prior to
the regularly scheduled maturity thereof on such Payment Date:
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(a) if the Make-Whole Discount Rate, determined with respect to such
principal amount and such Payment Date, equals or exceeds seven and twenty-
eight one-hundredths percent (7.28%) per annum, then Zero Dollars ($0); or
(b) if the Make-Whole Discount Rate, determined with respect to such
principal amount and such Payment Date, is less than seven and twenty-eight
one-hundredths percent (7.28%) per annum, then
(i) the sum of the present values of the then remaining scheduled
payments of principal and interest for the Notes (on the basis of the
interest rate applicable to the Original Notes) that would be payable
in respect of such principal amount but for such prepayment or
acceleration, minus
(ii) such principal amount plus the amount of interest accrued on
such principal amount since the scheduled interest payment date
immediately preceding such Payment Date.
In determining such present values, a discount rate equal to the Make-Whole
Discount Rate (with respect to the Payment Date and such principal amount)
divided by two (2), and a discount period of six (6) months of thirty (30)
days each, shall be used.
Make-Whole Discount Rate - means, with respect to any date and any
principal amount of Notes required for any reason to be paid prior to the
regularly scheduled maturity thereof on such date, the sum of
(a) the Treasury Rate with respect to such principal amount and such
date, plus
(b) if such payment is made
(i) pursuant to Section 5.2(b) hereof, one percent (1.00%) per
annum, or
(ii) pursuant to Section 6.1 hereof, one hundred twenty-five one-
hundredths percent (1.25%) per annum, or
(iii) pursuant to any provision of this Agreement other than
Section 5.2(b) or Section 6.1 hereof, fifty one-hundredths percent
(0.50%) per annum.
As used in this definition only:
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Remaining Dollar-Years - means, with respect to any date and any
principal amount of Notes being paid prior to the regularly scheduled
maturity thereof for any reason on such date, the result obtained by
(a) multiplying, in the case of each required payment of
principal (including payment at maturity) that would be payable in
respect of such principal amount being so prepaid but for such
prepayment,
(i) an amount equal to such required payment of
principal, by
(ii) the number of years (calculated to the nearest one-
twelfth (1/12)) that will elapse between such date and the date
such required principal payment would be due if such prepayment
had not occurred, and
(b) calculating the sum, with respect to each of such required
payments of principal, of each of the products obtained in the
preceding subsection (a).
Treasury Rate - means, with respect to any date and any principal amount
of Notes of required for any reason to be paid prior to the regularly
scheduled maturity thereof on such date,
(a) the yield reported as of 10:00 a.m., New York City time, on
the day on which such calculation is being made, on the display
designated as "Page 678" on the Bridge Telerate (or such other display
as may replace Page 678 on the Bridge Telerate) (or, if not available,
any other nationally recognized trading screen reporting on-line
intraday trading in United States government Securities) providing the
most current yields for actively traded United States Treasury
securities with maturities corresponding to the remaining Weighted
Average Life to Maturity on such date of such principal amount of the
Notes (such Weighted Average Life to Maturity being determined as of
the date of such calculation and rounded to the nearest month), or
(b) if and only if such Bridge Telerate ceases to exist or fails
to report such yield, such yield as reported on a reasonably
comparable electronic service as may be designated by the Majority
Holders, or
(c) if and only if such Bridge Telerate ceases to exist or fails
to report such yield and the Majority Holders shall fail to agree upon
a
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comparable electronic service pursuant to clause (b) of this
definition, such yield reported under the heading "Week Ending" for
the week most recently ended and under the caption "Treasury Constant
Maturities" of the maturity corresponding to the remaining Weighted
Average Life to Maturity on such date of such principal amount of the
Notes being prepaid or accelerated (such Weighted Average Life to
Maturity being determined as of the date of such calculation and
rounded to the nearest month) as most recently published and made
available to the public in the statistical release designated
"H.15(519)" or any successor publication that is published weekly by
the Federal Reserve System and that establishes yields on actively
traded United States Treasury securities or, if no such successor
publication is available, then any other source of current information
in respect of interest rates on the securities of the United States of
America that is generally available and, in the judgment of the
Majority Holders, provides information reasonably comparable to the
H.15(519) statistical release.
If no maturity exactly corresponds to such rounded Weighted Average Life to
Maturity, yields for the two (2) most closely corresponding published
maturities next above and below such rounded Weighted Average Life to
Maturity shall be calculated pursuant to the immediately preceding sentence
and the Treasury Rate shall be interpolated from such yields on a straight-
line basis, rounding with respect to each such relevant period to the
nearest month.
Weighted Average Life to Maturity - means, with respect to any date and
any principal amount of Notes being paid on such date, the number of years
obtained by dividing the Remaining Dollar-Years on such date of such
principal amount by such principal amount.
Margin Security - means "margin stock" within the meaning of Regulations T,
U and X of the Board of Governors of the Federal Reserve System, 12 C.F.R.,
Chapter II, as amended from time to time.
Material Adverse Effect - means a material adverse effect on (a) the
business, prospects, profits, Properties or condition (financial or otherwise)
of the Company and the Restricted Subsidiaries, taken as a whole, (b) the
ability of the Company or any Restricted Subsidiary to perform its obligations
under any of the Financing Documents to which it is a party, or (c) the validity
or enforceability of any of the Financing Documents.
Moody's - means Moody's Investors Service, Inc.
Mortgages- means, collectively, those certain mortgages and deeds of trust,
dated the Effective Date, executed by the Company and certain Restricted
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Subsidiaries, respectively, in favor of the Collateral Agent, as more
specifically identified in the Omnibus Collateral Agreement, together with any
additional mortgages or deeds of trust executed and delivered pursuant to the
terms of this Agreement or any other Financing Documents, in each case as
amended, restated or otherwise modified from time to time.
Multiemployer Plan - means any multiemployer plan (as defined in section
3(37) of ERISA) in respect of which the Company or any ERISA Affiliate is an
"employer" (as defined in section 3 of ERISA).
Multiple Employer Pension Plan - means any employee benefit plan within the
meaning of section 3(3) of ERISA (other than a Multiemployer Plan), subject to
Title IV of ERISA, to which the Company or any ERISA Affiliate and an employer
(as defined in section 3 of ERISA) other than an ERISA Affiliate or the Company
contribute.
Net Proceeds - has the meaning specified in the Intercreditor Agreement, as
in effect on the Effective Date.
Nightingale - means Nightingale Associates, LLC.
1995 Notes - means the Company's 9.71% Series A Senior Notes due December
15, 2002, the Company's 9.82% Series B Senior Notes due December 15, 2005, and
the Company's 9.92% Series C Senior Notes due December 15, 2005.
Note Pledge Agreement - means that certain Note Pledge Agreement, dated as
of the Effective Date, executed by the Company in favor of the Collateral Agent,
as amended, restated or otherwise modified from time to time.
Note Purchase Agreements - Section 1.1.
Notes - Section 1.2(d).
Off Balance Sheet Liabilities - means, with respect to any Person, all
obligations of such Person under any synthetic lease, tax retention operating
lease, off balance sheet loan or similar off balance sheet financing if the
transaction giving rise to such obligation (a) is considered indebtedness for
borrowed money for tax purposes but is classified as an operating lease or (b)
does not (and is not required to pursuant to GAAP) appear as a liability on the
balance sheet of such Person.
Omnibus Collateral Agreement - means that certain Omnibus Collateral
Agreement dated as of the Effective Date, executed by the Company and each of
the Restricted Subsidiaries identified on the signature pages thereto in favor
of the
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Collateral Agent and the Secured Parties (as such term is defined therein), as
amended, restated or otherwise modified from time to time.
Original Bank Commitment Amount - means Three Hundred Million Dollars
($300,000,000).
Original Closing Date - Section 1.3.
Original Note Purchase Agreements - Section 1.1.
Original Notes - Section 1.2(a).
OSHA - means the Occupational Safety and Health Act of 1970, together with
all rules, regulations and standards promulgated pursuant thereto, as amended
from time to time.
PBGC - means the Pension Benefit Guaranty Corporation and any successor
corporation or governmental agency.
PCR - means Pacific Coast Recycling, LLC, a limited liability company
formed under the laws of the State of Delaware.
Pension Plan - means, at any time, any "employee pension benefit plan" (as
defined in section 3 of ERISA) maintained at such time by the Company or any
ERISA Affiliate for employees of the Company or such ERISA Affiliate, excluding
any Multiemployer Plan, but including, without limitation, any Multiple Employer
Pension Plan.
Performance Release Date - means the date on which the Company has
delivered to the Majority Holders evidence satisfactory to the Majority Holders
demonstrating that the Debt to Consolidated EBITDA Ratio calculated as of the
end of two consecutive fiscal quarters of the Company ending after the Effective
Date was less than 3.50 to 1.00.
Permitted Investments - means any of the following Investments:
(a) direct obligations of the United States of America or obligations
guaranteed by the United States of America maturing no later than 365 days
from the date of acquisition;
(b) repurchase agreements or eurodollar deposits with, or certificates
of deposit maturing no later than 365 days from the date of acquisition and
issued by, banks having a combined capital and surplus of over Two Hundred
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Fifty Million Dollars ($250,000,000) and rated at least A- by S&P, and at
least A3 by Moody's;
(c) Investment in commercial paper issued by corporations incorporated
in the United States of America or any state thereof and maturing in 270
days or less and rated at least A-1 by S&P or P-1 by Moody's;
(d) Investments in Property used in the ordinary course of business of
the Company and the Guarantors;
(e) Investments in AIR;
(f) Investments in Restricted Subsidiaries which were Restricted
Subsidiaries as of the Effective Date;
(g) Investments in other Persons (whether a Person which became a
Restricted Subsidiary after the Effective Date, an Unrestricted Subsidiary,
or any unconsolidated Affiliate (excluding AIR)) not to exceed $3,000,000
in the aggregate during any period of twelve (12) consecutive months so
long as, in the case of this clause (g) only, immediately prior to, and
immediately after the consummation of such Investment, and after giving
effect thereto, no Default or Event of Default would exist; and
(h) loans and advances to employees (x) for moving, entertainment,
travel and other similar expenses, (y) to finance tax liabilities incurred
with respect to restricted stock bonuses and (z) for other purposes, so
long as all such loans and advances referred to in the preceding clauses
(x) through (z) are made in the ordinary course of the Company's business
consistent with past practices and do not exceed Two Million Dollars
($2,000,000) in aggregate outstanding principal amount at any time.
For purpose of this definition, an "Investment" shall include the direct or
indirect acquisition, in one or a series of transactions, of any ongoing
business, of all or substantially all of the assets of any Person, or of a
division or asset group of a Person with identifiable net earnings (or loss),
whether through purchase of assets, merger or otherwise. Following the
Performance Release Date, the dollar amount limitation contained in the
immediately preceding clause (g) shall no longer apply.
Person - means an individual, partnership, corporation, trust,
unincorporated organization, or a government or agency or political subdivision
thereof.
Placement Memorandum - Section 2.1.
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Preferred Stock - means any class of capital stock of a corporation that is
preferred over any other class of capital stock of such corporation as to the
payment of dividends or the payment of any amount upon liquidation or
dissolution of such corporation.
Property - means any interest in any kind of property or asset, whether
real, personal or mixed, and whether tangible or intangible.
Purchase Money Lien - means (a) any Lien held by any Person (whether or not
the seller of such Property) on tangible Property (or a group of related items
of Property the substantial portion of which are tangible) acquired or
constructed by the Company or any Restricted Subsidiary, which Lien secures all
or a portion of the related purchase price or construction costs of such
Property, provided that such Purchase Money Lien (i) encumbers only Property
acquired or constructed after the Effective Date and acquired with the proceeds
of the Debt secured thereby, and (ii) such Lien is not thereafter extended to
any other Property, and (b) any Lien existing on Property of any Person at the
time it becomes a Restricted Subsidiary, provided that (i) no such Lien shall
extend to or cover any Property other than the Property subject to such Lien at
the time of any such transaction, and (ii) such Lien was not created in
contemplation of any such transaction.
Purchasers - Section 1.1.
Rental Expense - means, with respect to any period of determination, lease,
rental and all other payments made in respect of or in connection with the use
of property (whether real, personal or mixed) by the Company and the Restricted
Subsidiaries with respect to such period other than (a) payments with respect to
Capitalized Leases and (b) payments made with respect to any operating lease
under which the annual lease payments do not exceed Twenty-Five Thousand Dollars
($25,000) in the aggregate.
Restricted Payment - means:
(a) any dividend or other distribution, direct or indirect, on account
of any shares of any class of stock or other equity interest of the Company
or any of the Restricted Subsidiaries now or hereafter outstanding, other
than (i) a dividend payable solely in shares of that class of stock to the
holders of that class and (ii) a distribution of Rights under, and as
defined in, that certain Rights Agreement dated as of January 16, 1996
between the Company and First Union National Bank, successor to First Union
National Bank of North Carolina, as such agreement has been amended prior
to, and is in effect on, the Effective Date;
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(b) any redemption, conversion, exchange, retirement, sinking fund or
similar payment, purchase or other acquisition for value, direct or
indirect, of any shares of any class of stock or other equity interest of
the Company or any of the Restricted Subsidiaries now or hereafter
outstanding;
(c) any payment or prepayment of principal of, premium, if any, or
interest on, redemption, conversion, exchange, purchase, retirement,
defeasance, sinking fund or similar payment with respect to, any Debt of
the Company or any of the Restricted Subsidiaries that is subordinated in
right of payment and otherwise to the Notes or the obligations of the
Restricted Subsidiaries that are Guarantors under the Guaranty Agreement;
and
(d) any payment made to retire, or to obtain the surrender of, any
outstanding warrants, options or other rights to acquire shares of any
class of stock of the Company or any of the Restricted Subsidiaries now or
hereafter outstanding.
Restricted Subsidiary - means, at any time, a corporation,
(a) organized under the laws of the United States, Puerto Rico or
Canada or a jurisdiction thereof at such time,
(b) that conducts substantially all of its business and has
substantially all of its Property within the United States, Puerto Rico and
Canada at such time, and
(c) at least eighty percent (80%) (by number of votes) of each class
of Voting Stock of which and one hundred percent (100%) of all Preferred
Stock and other equity Securities of which are legally and beneficially
owned by the Company and its Wholly-Owned Restricted Subsidiaries at such
time.
S&P - means Standard & Poor's Rating Group, a division of McGraw-Hill, Inc.
SBQ Asset Sale Prepayment - means a prepayment of the Notes in connection
with an Acceptable SBQ Asset Sale pursuant to Section 5.2(d) hereof and in
accordance with Section 4.1(b) of the Intercreditor Agreement.
SBQ Division - means the "special bar quality" division of the Company and
the Subsidiaries which includes (a) all assets of the Company located in, or
related to its operations in, Memphis, Tennessee; (b) the assets of American
Steel and Wire Corporation (and the Company's equity interests in American Steel
and Wire Corporation) but excluding the "missile wire" facility located in
Cleveland, Ohio; and
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(c) the Company's equity interest in AIR. The SBQ Division, excluding the
Company's equity interest in AIR, is referred to herein as "SBQ Division
(Memphis/Cleveland)."
Securities Act - means the Securities Act of 1933, as amended from time to
time.
Security - means "security" as defined by section 2(1) of the Securities
Act.
Security Agreement - means that certain Security Agreement, dated as of the
Effective Date, executed by the Company and each of the Restricted Subsidiaries
identified on the signature pages thereto in favor of the Collateral Agent, as
amended, restated or otherwise modified from time to time.
Security Documents - means, collectively, the Mortgages, the Security
Agreement, the Trademark/Copyright Security Agreement, the Stock Pledge
Agreement, the Note Pledge Agreement and all other mortgages, deeds of trust,
security agreements, pledges, powers of attorney, assignments, financing
statements and all other written instruments and documents now or hereafter
executed by or on behalf of the Company or any of the Restricted Subsidiaries
for the direct or indirect benefit of the holders of the Notes, together with
all agreements and documents referred to therein or contemplated thereby.
Special Majority Holders - means, at any time, the holders of at least
sixty-six and two-thirds percent (66-2/3%) in principal amount of the Notes at
the time outstanding (exclusive of the Notes then owned by any one or more of
the Company, any Restricted Subsidiary, any Affiliate or any officer or director
thereof.
Stock Pledge Agreement - means that certain Stock Pledge Agreement, dated
as of the Effective Date, executed by the Company and each of the Restricted
Subsidiaries identified on the signature pages thereto in favor of the
Collateral Agent, as amended, restated or otherwise modified from time to time.
Subsidiary - means, at any time, a corporation of which the Company owns,
directly or indirectly, more than fifty percent (50%) (by number of votes) of
each class of Voting Stock at such time.
Trademark/Copyright Security Agreement - means that certain Trademark and
Copyright Collateral Assignment and Security Agreement, dated as of the
Effective Date, executed by the Company and each of the Restricted Subsidiaries
identified on the signature pages thereto in favor of the Collateral Agent, as
amended, restated or otherwise modified from time to time.
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Transaction Documents - has the meaning specified in the Omnibus Collateral
Agreement.
Voting Stock - means capital stock of any class or classes of a corporation
the holders of which are ordinarily, in the absence of contingencies, entitled
to elect corporate directors (or Persons performing similar functions).
Unrestricted Subsidiary - means, at any time, any Subsidiary that has been
designated by the Company's Board of Directors as an Unrestricted Subsidiary,
provided that at the time of such designation
(a) the Subsidiary so designated neither owns, directly or indirectly,
any Debt of the Company or any Restricted Subsidiary or any capital stock
of any Restricted Subsidiary,
(b) no Debt of such Subsidiary is guaranteed by the Company or a
Restricted Subsidiary, and
(c) no Default or Event of Default would occur as a result of such
designation.
Waiver and Third Amendment - Section 1.1.
Wholly-Owned Restricted Subsidiary - means, at any time, any Restricted
Subsidiary one hundred percent (100%) of all of the Debt and equity Securities
(except directors' qualifying shares) of which are owned by any one or more of
the Company and the Company's other Wholly-Owned Restricted Subsidiaries at such
time.
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11.2. GAAP.
All accounting terms, ratios and measurements shall be interpreted or
determined in accordance with GAAP except (x) the Company's compliance with the
covenants contained in Section 8.11, Section 8.12 and, if applicable, Section
8.15 and calculations of the Debt to Consolidated EBITDA Ratio for purposes of
determining the Performance Release Date shall be determined based on the
financial statements required to be provided by the Company pursuant to Section
9.1(b) and (y) as otherwise expressly provided in this Agreement or any other
Financing Document. If a change in GAAP occurs after the Effective Date and
such change materially affects the ability of the Company to comply with the
provisions of Section 8.11, Section 8.12 or Section 8.15 or any other financial
covenant contained in this Agreement, the Company and the holders of the Notes
shall enter into good faith negotiations with a view to amending such provisions
with the desired result that determination of the Company's compliance with such
provisions taking into account such change in GAAP will be as close as possible
to the determination of the Company's compliance with such provisions prior to
such change.
11.3. Directly or Indirectly.
Where any provision herein refers to action to be taken by any Person, or
that such Person is prohibited from taking, such provision shall be applicable
whether such action is taken directly or indirectly by such Person, including
actions taken by or on behalf of any partnership in which such Person is a
general partner.
11.4. Section Headings and Table of Contents and Construction.
(a) Section Headings and Table of Contents, etc. The titles of the
Sections and the Table of Contents appear as a matter of convenience only,
do not constitute a part hereof and shall not affect the construction
hereof. The words "herein," "hereof," "hereunder" and "hereto" refer to
this Agreement as a whole and not to any particular Section or other
subdivision.
(b) Construction. Each covenant contained herein shall be construed
(absent an express contrary provision herein) as being independent of each
other covenant contained herein, and compliance with any one covenant shall
not (absent such an express contrary provision) be deemed to excuse
compliance with one or more other covenants.
11.5. Governing Law.
THIS AGREEMENT AND THE NOTES SHALL BE GOVERNED BY, AND CONSTRUED AND
ENFORCED IN ACCORDANCE WITH, INTERNAL NEW YORK LAW.
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12. MISCELLANEOUS
12.1. Communications.
(a) Method; Address. All communications hereunder or under the Notes
shall be in writing, shall be hand delivered, deposited into the United
States mail (registered or certified mail), postage prepaid, or sent by
overnight courier, and shall be addressed,
(i) if to the Company,
1000 Urban Center Drive, Suite 300
Birmingham, Alabama 35242-2516
Attention: Chief Financial Officer
provided, that the failure to provide any such copy shall in no way
affect the validity of any communication to the Company for purposes
of this Agreement),
or at such other address as the Company shall have furnished in writing to
all holders of the Notes at the time outstanding, and
(ii) if to any of the holders of the Notes,
(A) if such holders are the Purchasers, at their respective
addresses set forth on Annex 1 hereto, and further including any
parties referred to on such Annex 1 that are required to receive
notices in addition to such holders of the Notes, and
(B) if such holders are not the Purchasers, at their
respective addresses set forth in the register for the
registration and transfer of Notes maintained pursuant to Section
8.3 hereof,
or to any such party at such other address as such party may designate by
notice duly given in accordance with this Section 12.1 to the Company
(which other address shall be entered in such register).
(b) When Given. Any communication so addressed and deposited in the
United States mail, postage prepaid, by registered or certified mail (in
each case, with return receipt requested) shall be deemed to be received on
the third (3rd) succeeding Business Day after the day of such deposit (not
including the date of such deposit). Any notice so addressed and otherwise
delivered shall be deemed to be received when actually received at the
address of the addressee.
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12.2. Reproduction of Documents.
This Agreement and all documents relating thereto, including, without
limitation,
(a) consents, waivers and modifications that may hereafter be
executed,
(b) documents received by you at the closing of your purchase of the
Notes (except the Notes themselves), and
(c) financial statements, certificates and other information
previously or hereafter furnished to you or any other holder of Notes,
may be reproduced by any holder of Notes by any photographic, photostatic,
microfilm, micro-card, miniature photographic, digital or other similar process
and each holder of Notes may destroy any original document so reproduced. The
Company agrees and stipulates that any such reproduction shall be admissible in
evidence as the original itself in any judicial or administrative proceeding
(whether or not the original is in existence and whether or not such
reproduction was made by such holder of Notes in the regular course of business)
and that any enlargement, facsimile or further reproduction of such reproduction
shall likewise be admissible in evidence. Nothing in this Section 12.2 shall
prohibit the Company or any holder of Notes from contesting the accuracy of any
such reproduction.
12.3. Survival.
All warranties, representations, certifications and covenants made by the
Company herein or in any certificate or other instrument delivered by it or on
its behalf hereunder shall be considered to have been relied upon by you and
shall survive the delivery to you of the Amended Notes regardless of any
investigation made by you or on your behalf. The representations made in
Section 1.4 hereof shall be considered to have been relied upon by the Company
and shall survive the execution and delivery of this Agreement and delivery to
you of the Amended Notes regardless of any investigation made by the Company or
on its behalf. All statements in any such certificate or other instrument shall
constitute warranties and representations by the Company hereunder.
12.4. Successors and Assigns.
This Agreement shall inure to the benefit of and be binding upon the
successors and assigns of each of the parties hereto. The provisions hereof are
intended to be for the benefit of all holders, from time to time, of Notes, and
shall be enforceable by any such holder, whether or not an express assignment to
such holder of rights hereunder shall have been made by you or your successor or
assign.
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12.5. Amendment and Waiver.
(a) Requirements. This Agreement may be amended, and the observance
of any term hereof may be waived, with (and only with) the written consent
of the Company and the Majority Holders; provided that no such amendment or
waiver of any of the provisions of Section 1 through Section 4 hereof,
inclusive, or any defined term used therein, shall be effective as to any
holder of Notes unless consented to by such holder in writing; provided
that no such amendment or waiver shall, without the written consent of the
holders of all Notes (exclusive of Notes held by the Company, any
Restricted Subsidiary or any Affiliate) at the time outstanding,
(i) subject to the provisions of Section 10.2 and Section 10.3
hereof, change the amount or time of any prepayment or payment of
principal or Make-Whole Amount or the rate or time of payment of
interest (including, without limitation, by amendment of Section 5 or
Section 6 hereof),
(ii) amend Section 10 hereof,
(iii) amend the definition of Majority Holders, or
(iv) amend this Section 12.5.
The holder of any Note may specify that any such written consent executed
by it shall be effective only with respect to a portion of the Notes held
by it (in which case it shall specify, by Dollar amount, the aggregate
principal amount of Notes with respect to which such consent shall be
effective) and in the event of any such specification such holder shall be
deemed to have executed such written consent only with respect to the
portion of the Notes so specified.
(b) Solicitation of Noteholders.
(i) Solicitation. The Company shall not solicit, request or
negotiate for or with respect to any proposed waiver or amendment of
any of the provisions hereof or of the Notes unless each holder of
Notes (irrespective of the amount of Notes then owned by it) shall be
informed thereof by the Company with sufficient information to enable
it to make an informed decision with respect thereto. Executed or
true and correct copies of any waiver or consent effected pursuant to
the provisions of this Section 12.5 shall be delivered by the Company
to each holder of outstanding Notes forthwith following the date on
which the same shall have been executed and delivered by all holders
of
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outstanding Notes required to consent or agree to such waiver or
consent.
(ii) Payment. The Company shall not, directly or indirectly, pay
or cause to be paid any remuneration, whether by way of supplemental
or additional interest, fee or otherwise, or grant any security, to
any holder of Notes as consideration for or as an inducement to the
entering into by any holder of Notes of any waiver or amendment of any
of the terms and provisions hereof unless such remuneration is
concurrently paid, or such security is concurrently granted, on the
same terms, ratably to the holders of all Notes then outstanding.
(iii) Scope of Consent. Any consent made pursuant to this
Section 12.5 by a holder of Notes that has transferred or has agreed
to transfer its Notes to the Company, any Restricted Subsidiary or any
Affiliate and has provided or has agreed to provide such written
consent as a condition to such transfer shall be void and of no force
and effect except solely as to such holder, and any amendments
effected or waivers granted or to be effected or granted that would
not have been or would not be so effected or granted but for such
consent (and the consents of all other holders of Notes that were
acquired under the same or similar conditions) shall be void and of no
force and effect, retroactive to the date such amendment or waiver
initially took or takes effect, except solely as to such holder.
(c) Binding Effect. Except as provided in Section 12.5(b) hereof, any
amendment or waiver consented to as provided in this Section 12.5 shall
apply equally to all holders of Notes and shall be binding upon them and
upon each future holder of any Note and upon the Company whether or not
such Note shall have been marked to indicate such amendment or waiver. No
such amendment or waiver shall extend to or affect any obligation,
covenant, agreement, Default or Event of Default not expressly amended or
waived or impair any right consequent thereon.
12.6. Payments, When Received.
(a) Payments Due on Holidays. If any payment due on, or with respect
to, any Note shall fall due on a day other than a Business Day, then such
payment shall be made on the first Business Day following the day on which
such payment shall have so fallen due; provided that if all or any portion
of such payment shall consist of a payment of interest, for purposes of
calculating such interest, such payment shall be deemed to have been
originally due on such first following Business Day, such interest shall
accrue and be payable to (but not including) the actual date of payment,
and the
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amount of the next succeeding interest payment shall be adjusted
accordingly.
(b) Payments, When Received. Any payment to be made to the holders of
Notes hereunder or under the Notes shall be deemed to have been made on the
Business Day such payment actually becomes available to such holder at such
holder's bank prior to 11:00 a.m. (local time of such bank).
12.7. Entire Agreement.
This Agreement constitutes the final written expression of all of the terms
hereof and is a complete and exclusive statement of those terms.
12.8. Duplicate Originals, Execution in Counterpart.
Two or more duplicate originals hereof may be signed by the parties, each
of which shall be an original but all of which together shall constitute one and
the same instrument. This Agreement may be executed in one or more counterparts
and shall be effective when at least one counterpart shall have been executed by
each party hereto, and each set of counterparts that, collectively, show
execution by each party hereto shall constitute one duplicate original. Each of
the parties hereto agrees that the contract evidenced by this Agreement shall
for all purposes be considered to have been made in New York, New York.
[Remainder of page intentionally left blank; next page is signature page.]
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If this Agreement is satisfactory to you, please so indicate by
signing the acceptance at the foot of a counterpart hereof and returning such
counterpart to the Company, whereupon this Agreement shall become binding
between us in accordance with its terms.
Very truly yours,
BIRMINGHAM STEEL CORPORATION
By
-----------------------------
Name:
Title:
Accepted:
[PURCHASER]
By
-----------------------------
Name:
Title:
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================================================================================
EXHIBIT 4.2.2
BIRMINGHAM STEEL CORPORATION
-----------------------
WAIVER AND SECOND AMENDMENT TO NOTE PURCHASE AGREEMENT
-----------------------
Re:
Note Purchase Agreements Dated as of September 15, 1995
and
$76,000,000 Original Principal Amount of
6.96% Series A Senior Notes Due December 15, 2002
$14,000,000 Original Principal Amount of
7.07% Series B Senior Notes Due December 15, 2005
$60,000,000 Original Principal Amount of
7.17% Series C Senior Notes Due December 15, 2005
DATED OCTOBER 12, 1999
================================================================================
<PAGE>
TABLE OF CONTENTS
PAGE
1. PRELIMINARY STATEMENT....................................................1
1.1 BACKGROUND...........................................................1
1.2 DEFINITIONS..........................................................4
2. AMENDMENTS AND WAIVERS...................................................6
2.1 AMENDMENT AND RESTATEMENT OF EXISTING NOTE PURCHASE AGREEMENT........6
2.2 AMENDMENT AND RESTATEMENT OF EXISTING NOTES..........................6
2.3 WAIVERS OF EXISTING EVENTS OF DEFAULT................................7
2.4 CONTINUITY AND AFFIRMATION OF OBLIGATIONS............................7
3. REPRESENTATIONS AND WARRANTIES...........................................7
3.1 SUBSIDIARIES AND STOCK OWNERSHIP.....................................7
3.2 CORPORATE EXISTENCE AND POWER........................................8
3.3 CORPORATE AUTHORITY..................................................8
3.4 BINDING EFFECT.......................................................8
3.5 NO CONFLICTS WITH AGREEMENTS, ETC....................................9
3.6 CONSENTS, ETC........................................................9
3.7 FULL DISCLOSURE......................................................9
3.8 OUTSTANDING DEBT AND LIENS..........................................10
3.9 PENDING LITIGATION..................................................10
3.10 NO DEFAULTS........................................................10
3.11 COMPLIANCE WITH LAW................................................11
3.12 TITLE TO PROPERTIES................................................11
3.13 ENVIRONMENTAL COMPLIANCE...........................................12
3.14 RESTRICTIONS ON COMPANY AND SUBSIDIARIES...........................13
3.15 COLLATERAL.........................................................13
3.16 SOLVENCY...........................................................15
4. CONDITIONS PRECEDENT....................................................15
4.1 CERTIFICATES........................................................15
4.2 OPINIONS OF COUNSEL.................................................16
4.3 OMNIBUS COLLATERAL AGREEMENT........................................16
4.4 GUARANTY AGREEMENT..................................................17
4.5 1993 THIRD AMENDMENT................................................17
4.6 FIFTH AMENDMENT TO CREDIT AGREEMENT.................................17
4.7 LETTER OF CREDIT DOCUMENTS..........................................17
4.8 OTHER RELATED MATTERS...............................................17
4.9 INTERCREDITOR AGREEMENT.............................................18
4.10 SECURITY DOCUMENTS.................................................18
4.11 LIEN SEARCHES......................................................19
4.12 RESTRUCTURING FEE..................................................20
***4.13 PRIVATE PLACEMENT NUMBERS.......................................20
4.14 PAYMENT OF SPECIAL COUNSEL AND FINANCIAL ADVISOR FEES..............20
4.15 LEASE LETTERS......................................................20
4.16 PROCEEDINGS AND DOCUMENTS SATISFACTORY.............................20
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TABLE OF CONTENTS
PAGE
5. MISCELLANEOUS...........................................................20
5.1 EFFECT OF AMENDMENT AND WAIVER......................................21
5.2 NO LEGEND REQUIRED..................................................21
5.3 FEES AND EXPENSES...................................................21
5.4 SURVIVAL............................................................22
5.5 DUPLICATE ORIGINALS; EXECUTION IN COUNTERPART.......................22
5.6 RELEASE OF CLAIMS...................................................22
5.7 GOVERNING LAW.......................................................23
Schedule 3.1 -- Subsidiaries
Schedule 3.8 -- Outstanding Debt and Liens
Schedule 3.14 -- Restrictive Agreements
Schedule 3.15 -- Recording Information
Exhibit A -- Amended and Restated Note Purchase Agreement
Exhibit B1 -- Form of Opinion of Special Company Counsel to the Company
and the Restricted Subsidiaries
Exhibit B2 -- Form of Opinion of Local Counsel to the Company and the
Restricted Subsidiaries
Exhibit B3 -- Form of Opinion of Special Counsel to the Collateral Agent
Exhibit C -- Form of Omnibus Collateral Agreement
Exhibit D -- Form of Guaranty Agreement
Exhibit E -- Form of Intercreditor Agreement
Exhibit F1 -- Form of Alabama Mortgage
Exhibit F2 -- Form of Florida Mortgage
Exhibit F3 -- Form of Illinois Mortgage
Exhibit F4 -- Form of Mississippi Mortgage
Exhibit F5 -- Form of Ohio Mortgage
Exhibit F6 -- Form of Tennessee Mortgage
Exhibit F7 -- Form of Washington Mortgage
Exhibit G -- Form of Security Agreement
Exhibit H -- Form of Trademark/Copyright Security Agreement
Exhibit I -- Form of Stock Pledge Agreement
Exhibit J -- Form of Note Pledge Agreement
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BIRMINGHAM STEEL CORPORATION
WAIVER AND SECOND AMENDMENT TO NOTE PURCHASE AGREEMENT
Re:
Note Purchase Agreements Dated as of September 15, 1995
and
$76,000,000 Original Principal Amount of
6.96% Series A Senior Notes Due December 15, 2002
$14,000,000 Original Principal Amount of
7.07% Series B Senior Notes Due December 15, 2005
$60,000,000 Original Principal Amount of
7.17% Series C Senior Notes Due December 15, 2005
Dated October 12, 1999
To the Persons listed on
the signature pages hereof
Ladies and Gentlemen:
BIRMINGHAM STEEL CORPORATION, a Delaware corporation (together with its
successors and assigns, the "Company"), hereby agrees with you as follows:
1. PRELIMINARY STATEMENT.
1.1 Background.
(a) The Company entered into those certain Note Purchase Agreements
dated as of September 15, 1995, as amended by an Amendment to 1995 Note
Purchase Agreement dated as of December 14, 1998 (collectively, as in
effect immediately prior to the Effective Date, the
<PAGE>
"Existing Note Purchase Agreement," and as amended hereby, the "Amended
Note Purchase Agreement"), with each of the institutions named in Annex 1
thereto, under and pursuant to which the Company issued and sold to such
institutions (i) an aggregate principal amount of Seventy-Six Million
Dollars ($76,000,000) of the Company's 6.96% Series A Senior Notes due
December 15, 2002 (the "Existing Series A Notes"), (ii) an aggregate
principal amount of Fourteen Million Dollars ($14,000,000) of the Company's
7.07% Series B Senior Notes due December 15, 2005 (the "Existing Series B
Notes"), and (iii) an aggregate principal amount of Sixty Million Dollars
($60,000,000) of the Company's 7.17% Series C Senior Notes due December 15,
2005 (the "Existing Series C Notes;" collectively with the Existing Series
A Notes and the Existing Series B Notes, as in effect immediately prior to
the Effective Date, the "Existing Notes" and as amended hereby, the
"Amended Notes").
(b) The institutions (other than the Company) listed on the signature
pages to this Agreement (collectively, the "Noteholders") are the holders
of one hundred percent (100%) of the Existing Notes outstanding as of the
Effective Date.
(c) The Company entered into those certain Note Purchase Agreements
dated as of September 1, 1993, with each of the institutions named in Annex
1 thereto (together with their successors and assigns, the "1993
Noteholders"), as amended by an Amendment to Note Purchase Agreement dated
as of October 18, 1996 and an Amendment to 1993 Note Purchase Agreement
dated as of December 14, 1998 (collectively, as in effect immediately prior
to the Effective Date, the "1993 Existing Note Purchase Agreement," and, as
amended by a Waiver and Third Amendment to 1993 Note Purchase Agreement
dated as of the date hereof (the "1993 Third Amendment"), the "1993 Amended
Note Purchase Agreement"), under and pursuant to which the Company issued
and sold to such institutions an aggregate principal amount of One Hundred
Thirty Million Dollars ($130,000,000) of the Company's 7.28% Senior Notes
due December 15, 2005 (collectively, the "1993 Notes").
(d) The Company entered into that certain Credit Agreement dated as of
March 17, 1997 (as in effect immediately prior to the Effective Date, the
"Existing Credit Agreement," and as heretofore amended and as amended by a
Fifth Amendment to Credit Agreement dated as of the date hereof (the "Fifth
Amendment"), the "Amended Credit Agreement"), by and among the Company, the
banks party thereto (collectively, the "Banks"), and Bank of America, N.A.,
as agent (the "Agent"), pursuant to which a Three Hundred
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Million Dollar ($300,000,000) credit facility has been provided to the
Company.
(e) Bank of America, N.A. and PNC Bank, National Association
(collectively, the "L/C Issuers") have separately provided the Company with
three (3) letters of credit (collectively, the "Letters of Credit") which
have an aggregate face amount of Fifty-One Million Nine Hundred
Ninety-Three Thousand One Hundred Fifty-One Dollars ($51,993,151), which
Letters of Credit were issued pursuant to (i) an Amended and Restated
Reimbursement Agreement, dated as of October 12, 1999, among the Company,
American Steel & Wire Corporation and Bank of America, N.A. (as amended,
the "B of A Reimbursement Agreement"), (ii) a Reimbursement Agreement dated
as of October 1, 1996, between PNC Bank, National Association successor to
PNC Bank, Kentucky, Inc. and the Company (as amended, "PNC Reimbursement
Agreement One") and (iii) a Reimbursement Agreement dated as of August 15,
1995 between the Company and PNC Bank, National Association, successor to
PNC Bank, Kentucky, Inc. ("PNC Reimbursement Agreement Two," and
collectively with the B of A Reimbursement Agreement and PNC Reimbursement
Agreement One, the "Existing Reimbursement Agreements").
(f) The Company has notified the Noteholders, the 1993 Noteholders,
the Banks and the L/C Issuers of certain Defaults and Events of Default
under, and as defined in, the Existing Note Purchase Agreement, the 1993
Existing Note Purchase Agreement, the Existing Credit Agreement and the
Existing Reimbursement Agreements, respectively.
(g) The Company requests the amendment and restatement of the Existing
Note Purchase Agreement and the waiver of the existing Defaults and Events
of Default specified herein, and, in exchange therefor, the Company agrees
to amend and restate the Existing Notes to, among other things, increase
the interest rate applicable thereto, to cause one or more of its
Restricted Subsidiaries to enter into the Guaranty Agreement, and to grant,
and to cause one or more of its Restricted Subsidiaries to grant, the
security interests described in the Security Documents to the Collateral
Agent for the ratable benefit of the Noteholders, the 1993 Noteholders, the
Banks and the L/C Issuers and for the benefit of the Indenture Trustee and
the Owner Trustee.
(h) The Noteholders are agreeable, subject to the terms and conditions
set forth herein, to amending and restating in full the Existing
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Note Purchase Agreement and the Existing Notes as provided herein.
1.2 Definitions.
Capitalized terms used but not specifically defined in this Agreement have
the respective meanings assigned to them in the Existing Note Purchase
Agreement. As used in this Agreement, the following terms have the respective
meanings specified below or set forth in the Section hereof following such term:
Acceptable SBQ Asset Sale - has the meaning specified in the Amended
Note Purchase Agreement.
Agent - Section 1.1(d).
Agreement, this - means this Waiver and Second Amendment to Note
Purchase Agreement, as it may be amended or otherwise modified from time to
time.
Amended Credit Agreement - Section 1.1(d).
Amended Note Purchase Agreement - Section 1.1(a).
Amended Notes - Section 1.1(a).
Banks - Section 1.1(d).
B of A Reimbursement Agreement - Section 1.1(e).
Collateral Agent - means State Street Bank and Trust Company, in its
capacity as collateral agent under the Intercreditor Agreement.
Company - the introductory sentence.
Effective Date - Section 4.
Existing Credit Agreement - Section 1.1(d).
Existing Note Purchase Agreement - Section 1.1(a).
Existing Notes - Section 1.1(a).
Existing Reimbursement Agreements - Section 1.1(e).
Existing Series A Notes - Section 1.1(a).
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Existing Series B Notes - Section 1.1(a).
Existing Series C Notes - Section 1.1(a).
Fifth Amendment - Section 1.1(d).
Financing Documents - means, collectively, this Agreement, the
Omnibus Collateral Agreement, the Intercreditor Agreement, the Guaranty
Agreement and each of the Security Documents, in each case, as may be
amended or otherwise modified from time to time.
Guaranty Agreement - Section 4.4.
Indenture Trustee - has the meaning set forth in the Intercreditor
Agreement.
Intercreditor Agreement - Section 4.9.
L/C Issuers - Section 1.1(e).
Letters of Credit - Section 1.1(e).
Mortgages - Section 4.10(a).
1993 Amended Note Purchase Agreement - Section 1.1(c).
1993 Existing Note Purchase Agreement - Section 1.1(c).
1993 Noteholders - Section 1.1(c).
1993 Notes - Section 1.1(c).
1993 Third Amendment - Section 1.1(c).
Note Pledge Agreement - Section 4.10(e).
Noteholders - Section 1.1(b).
Omnibus Collateral Agreement - Section 4.3.
Operative Agreements - has the meaning specified in Appendix A to
that certain Participation Agreement (Birmingham Steel Trust 97-1), dated
as of September 30, 1997, among the Company, as lessee, the Owner Trustee,
the Indenture Trustee and the institutional lenders party thereto, as
amended.
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Owner Trustee - has the meaning set forth in the Intercreditor
Agreement.
PNC Reimbursement Agreement One - Section 1.1(e).
PNC Reimbursement Agreement Two - Section 1.1(e).
Security Agreement - Section 4.10(b).
Security Documents - means, collectively, each of the Mortgages, the
Security Agreement, the Trademark/Copyright Security Agreement, the Stock
Pledge Agreement and the Note Pledge Agreement.
Stock Pledge Agreement - Section 4.10(d).
Trademark/Copyright Security Agreement - Section 4.10(c).
Transaction Documents - has the meaning specified in the Omnibus
Collateral Agreement.
2. AMENDMENTS AND WAIVERS
2.1 Amendment and Restatement of Existing Note Purchase Agreement.
The Existing Note Purchase Agreement (including Exhibit A1, Exhibit A2 and
Exhibit A3) is hereby amended and restated in full in the form attached hereto
as Exhibit A. On the Effective Date, the Amended Note Purchase Agreement shall
supercede and replace the Existing Note Purchase Agreement and the Existing Note
Purchase Agreement will cease to be of further force and effect.
2.2 Amendment and Restatement of Existing Notes.
(a) The forms of the Existing Series A Note, Existing Series B Note
and Existing Series C Note attached to the Existing Note Purchase Agreement
as Exhibit A1, Exhibit A2 and Exhibit A3, respectively, are hereby amended
and restated in full in the forms attached as Exhibit A1, Exhibit A2 and
Exhibit A3, respectively, to the Amended Note Purchase Agreement.
(b) All Existing Notes of each Series outstanding on the Effective
Date are hereby, without any further action being required on the part of
the Noteholders or on the part of any other Person, deemed to be conformed
to the form of Amended Note of such Series attached to the Amended Note
6
<PAGE>
Purchase Agreement as Exhibit A1, Exhibit A2 or Exhibit A3, as the case may
be. The outstanding Amended Notes shall be and are entitled to all of the
rights and benefits provided therefor in the Amended Note Purchase
Agreement.
2.3 Waivers of Existing Events of Default.
Each existing Default and Event of Default under the Existing Note Purchase
Agreement arising as a result of facts, circumstances or events in effect or
existence on or prior to the effectiveness of this Agreement on the date hereof
is hereby permanently and irrevocably waived and the Company and the Noteholders
hereby agree that each such existing Default and Event of Default shall be
deemed to have been permanently and irrevocably waived as of the date of the
initial occurrence thereof.
2.4 Continuity and Affirmation of Obligations.
Notwithstanding any other provision of this Agreement or any other document
or agreement, the indebtedness of the Company under the Existing Note Purchase
Agreement and the Existing Notes shall not be or be deemed to be paid or
discharged or novated hereby and shall continue in full force and effect as
amended hereby.
3. REPRESENTATIONS AND WARRANTIES
To induce the Noteholders to enter into this Agreement, the Company makes
the representations and warranties set forth in this Section 3. The Company
agrees and acknowledges that for purposes of Section 10.1(e) of the Amended Note
Purchase Agreement, its representations and warranties, as set forth in this
Agreement, are and constitute representations and warranties furnished in
connection with the Amended Note Purchase Agreement. 3.1 Subsidiaries and Stock
Ownership.
Schedule 3.1 hereto states the name of each Subsidiary (indicating which
Subsidiaries are Restricted Subsidiaries), its jurisdiction of incorporation and
the percentage of its Voting Stock owned by the Company and each other
Subsidiary. Each of the Company and the Subsidiaries has good and marketable
title to all of the shares it purports to own of the stock of each Subsidiary,
free and clear in each case of any Lien. All such shares have been duly issued
and are fully paid and nonassessable.
7
<PAGE>
3.2 Corporate Existence and Power.
Each of the Company and the Subsidiaries:
(a) is a corporation duly incorporated, validly existing and in good
standing under the laws of its jurisdiction of incorporation;
(b) has the legal and corporate power and authority necessary to own
and operate its Properties and to carry on its business as now conducted
and as presently proposed to be conducted;
(c) has all necessary licenses, certificates, permits, franchises and
other governmental authorizations necessary to own and operate its
Properties and to carry on its business as now conducted and as presently
proposed to be conducted, except where the failure to have such licenses,
certificates and permits, in the aggregate for all such failures, could not
reasonably be expected to have a Material Adverse Effect;
(d) has duly qualified or has been duly licensed, and is authorized to
do business and is in good standing, as a foreign corporation, in each
state where the failure to be so qualified or licensed and authorized and
in good standing could reasonably be expected to have a Material Adverse
Effect; and
(e) has, in the case of each Restricted Subsidiary, all requisite
power and authority to execute, deliver and perform its obligations under
each Financing Document to which it is a party.
3.3 Corporate Authority.
The execution, delivery and performance by the Company and each Restricted
Subsidiary of each Financing Document to which the Company or such Restricted
Subsidiary is a party, and the performance by the Company of the Amended Note
Purchase Agreement and the Amended Notes, is within the corporate powers of the
Company or such Restricted Subsidiary, as the case may be, and has been duly
authorized by all necessary corporate action on the part of the board of
directors (no action on the part of the stockholders of the Company or any such
Restricted Subsidiary being required by law, other than such actions which have
been duly taken), of the Company or such Restricted Subsidiary.
3.4 Binding Effect.
Each Financing Document to which the Company or any Restricted
Subsidiary is a party has been duly executed by the Company or such Restricted
8
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Subsidiary and each Financing Document, the Amended Note Purchase Agreement and
each Amended Note is a legal, valid and binding obligation of the Company or
such Restricted Subsidiary, as the case may be, enforceable against the Company
or such Restricted Subsidiary in accordance with its terms, except as such
enforceability may be limited by bankruptcy, insolvency or similar laws
affecting the enforcement of creditors' rights generally, or by general
principles of equity.
3.5 No Conflicts with Agreements, Etc.
Neither the execution and delivery by the Company or any Restricted
Subsidiary of any Financing Document to which it is a party, nor the fulfillment
of, or compliance with, the terms and provisions of any Financing Document, the
Amended Note Purchase Agreement or the Amended Notes, will conflict with, or
result in a breach or violation of any term, condition or provision of, or
constitute a default under, or result in the creation of any Lien (other than
Liens under the Security Documents) on any Property of the Company or such
Restricted Subsidiary pursuant to its charter or by-laws, or any contract,
agreement, mortgage, indenture, lease or instrument to which it is a party or by
which it is bound or to which it or any of its Property is subject, or any
order, statute, law, rule or regulation to which it or any of its Property is
subject.
3.6 Consents, Etc.
No consent, approval or authorization of, or declaration, registration or
filing (except as contemplated under Section 4) with, any Governmental Authority
or any nongovernmental Person, including, without limitation, any creditor
(other than the 1993 Noteholders, the Banks and the L/C Issuers) or stockholder
of the Company or any Restricted Subsidiary, is required in connection with the
execution or delivery by the Company or any Restricted Subsidiary of any
Financing Document to which it is a party or the performance by the Company or
such Restricted Subsidiary of its obligations under any Financing Document, the
Amended Note Purchase Agreement or the Amended Notes, or as a condition to the
legality, validity or enforceability of any such Financing Document, the Amended
Note Purchase Agreement or the Amended Notes, except, in each case, those which
have been obtained or which are contemplated by the Transaction Documents.
3.7 Full Disclosure.
The financial statements and other written statements, certificates and
materials provided to the Noteholders pursuant to the Existing Note Purchase
Agreement and the written statements, certificates and materials furnished by or
on behalf of the Company to you in connection with this Agreement and the
transactions contemplated hereby do not contain any untrue statement of a
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material fact or omit a material fact necessary to make the statements contained
therein or herein not misleading in light of the circumstances in which they
were made. Except as disclosed (i) in the Company's Annual Report on Form 10-K
for the fiscal year ended June 30, 1998, (ii) in the other reports filed by the
Company with the Securities and Exchange Commission after June 30, 1998, (iii)
in press releases issued by the Company prior to the Effective Date, or (iv) to
you or Nightingale Associates, LLC in writing, there is no fact known to the
Company which materially affects adversely or, so far as the Company can now
reasonably foresee, will materially affect adversely the business, prospects,
profits, Properties or condition (financial or otherwise) of the Company and the
Subsidiaries, taken as a whole, or the ability of the Company and each
Restricted Subsidiary to perform its obligations set forth in the Financing
Documents to which it is a party or, in the case of the Company, the Amended
Note Purchase Agreement or the Amended Notes.
3.8 Outstanding Debt and Liens.
Schedule 3.8 hereto sets forth a correct and complete schedule and brief
description of all Debt of the Company and the Subsidiaries outstanding on the
Effective Date and all consensual Liens securing such Debt. There are no Liens
on any of the Property of the Company or any Restricted Subsidiary except Liens
permitted by Section 8.17(a) of the Amended Note Purchase Agreement.
3.9 Pending Litigation.
There are no proceedings, actions or investigations pending or, to the
knowledge of the Company, threatened against or affecting the Company or any
Subsidiary in any court or before any Governmental Authority or arbitration
board or tribunal (a) challenging, or in any way dealing with, the legality,
validity or enforceability of any Financing Document, the Amended Note Purchase
Agreement or the Amended Notes or the authority of the Company or any Restricted
Subsidiary to enter into or execute any Financing Document, the Amended Note
Purchase Agreement or the Amended Notes, or (b) except as disclosed (i) in the
Company's Annual Report on Form 10-K for the fiscal year ended June 30, 1998,
(ii) in the other reports filed by the Company with the Securities and Exchange
Commission after June 30, 1998, (iii) in press releases issued by the Company
prior to the Effective Date, or (iv) to you or Nightingale Associates, LLC in
writing, that, in the aggregate for all such proceedings, actions and
investigations, could reasonably be expected to have a Material Adverse Effect.
3.10 No Defaults.
No event has occurred and is continuing and no condition exists which, upon
execution and delivery of this Agreement (and giving effect to Section 2.3) and
the
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other Transaction Documents, would constitute a Default or Event of Default.
Neither the Company nor any Subsidiary is in violation in any respect of any
term of any charter instrument or by-law and neither the Company nor any
Subsidiary is in default in the payment of principal or interest on any Debt or
in default under any instrument or instruments or agreements under and subject
to which any Debt has been issued and no event has occurred and is continuing
under the provisions of any such instrument or agreement which with the lapse of
time or the giving of notice, or both, would constitute a default or an event of
default thereunder, which individually or in the aggregate could reasonably be
expected to have a Material Adverse Effect.
3.11 Compliance with Law.
Neither the Company nor any Subsidiary is in violation of any law,
ordinance, governmental rule or regulation to which it is subject, except for
such violations that, in the aggregate, could not reasonably be expected to have
a Material Adverse Effect.
3.12 Title to Properties.
(a) Each of the Company and the Subsidiaries has good and marketable
title to all real Property, and good title to all of the other Property,
reflected in the most recent balance sheet delivered pursuant to Section
9.1 of the Existing Note Purchase Agreement (except as sold or otherwise
disposed of in the ordinary course of business), except for such failures
to have such good and marketable title as are immaterial to such financial
statements and that, in the aggregate for all such failures, could not
reasonably be expected to have a Material Adverse Effect. All such Property
is free from Liens not permitted by Section 8.17 of the Amended Note
Purchase Agreement.
(b) Upon execution and delivery of this Agreement and the other
Transaction Documents, each lease of real Property in the name or for the
benefit of the Company or any Subsidiary is valid and subsisting and in
full force and effect and good standing, except for such failures to be
valid and subsisting and in full force and effect and good standing that,
in the aggregate, could not reasonably be expected to have a Material
Adverse Effect.
(c) Each of the Company and the Subsidiaries owns, possesses or has
the right to use all of the patents, trademarks, service marks, trade
names, copyrights and licenses, and rights with respect thereto, necessary
for the present and currently planned future conduct of its business,
without any
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known conflict with the rights of others, except for such failures to own,
possess, or have the right to use, that, in the aggregate for all such
failures, could not reasonably be expected to have a Material Adverse
Effect.
3.13 Environmental Compliance.
Except as disclosed (i) in the Company's Annual Report on Form 10-K for the
fiscal year ended June 30, 1998, (ii) in the other reports filed by the Company
with the Securities and Exchange Commission after June 30, 1998, (iii) in press
releases issued by the Company prior to the Effective Date, or (iv) to the
Noteholders or Nightingale Associates, LLC in writing:
(a) Compliance -- each of the Company and the Subsidiaries is in
compliance with all Environmental Protection Laws in effect in each
jurisdiction where it is presently doing business, and in which the failure
so to comply could be reasonably expected to have a Material Adverse
Effect;
(b) Liability -- neither the Company nor any of the Subsidiaries is
subject to any liability under any Environmental Protection Laws that, in
the aggregate, could reasonably be expected to have a Material Adverse
Effect; and
(c) Notices -- neither the Company nor any Subsidiary has received any
(i) notice from any Governmental Authority by which any of its
present or previously-owned or leased real Properties has been
designated, listed, or identified in any manner by any Governmental
Authority charged with administering or enforcing any Environmental
Protection Law as a Hazardous Substance disposal or removal site,
"Super Fund" clean-up site, or candidate for removal or closure
pursuant to any Environmental Protection Law,
(ii) notice of any Lien arising under or in connection with any
Environmental Protection Law that has attached to any revenues of, or
to, any of its owned or leased real Properties, or
(iii) summons, citation, notice, directive, letter, or other
communication, written or oral, from any Governmental Authority
concerning any intentional or unintentional action or omission by the
Company or such Subsidiary in connection with its ownership or leasing
of any real Property resulting in the releasing, spilling, leaking,
pumping, pouring, emitting, emptying, dumping, or otherwise
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disposing of any Hazardous Substance into the environment resulting in
any material violation of any Environmental Protection Law,
in each case where the effect of the matters that are the subject of any such
notice, summons, citation, directive, letter or other communication could
reasonably be expected to have a Material Adverse Effect.
3.14 Restrictions on Company and Subsidiaries.
Neither the Company nor any Subsidiary:
(a) except as set forth in Schedule 3.14 hereto, is a party to any
contract or agreement, or subject to any charter or other corporate
restriction that, in the aggregate for all such contracts, agreements,
charter and corporate restrictions, could reasonably be expected to have a
Material Adverse Effect;
(b) is a party to any contract or agreement that restricts the right
or ability of such corporation to incur Debt, other than the Amended Note
Purchase Agreement, the 1993 Amended Note Purchase Agreement, the Amended
Credit Agreement, any other Transaction Document and the agreements listed
in Schedule 3.14 hereto, the terms of none of which is violated by the
execution and delivery by the Company or any Restricted Subsidiary of the
Financing Documents to which it is a party, or compliance by the Company or
any Restricted Subsidiary with the Financing Documents to which it is a
party or, in the case of the Company, the Amended Note Purchase Agreement
and the Amended Notes; and
(c) has agreed or consented to cause or permit in the future (upon the
happening of a contingency or otherwise) any of its Property, whether now
owned or hereafter acquired, to be subject to a Lien not permitted by
Section 8.17 of the Amended Note Purchase Agreement.
3.15 Collateral.
(a) Collateral Documents.
(i) Mortgages. Each Mortgage creates a valid Lien upon the
grantor's right, title and interest in the real property and interests
described therein in favor of the Collateral Agent, and when such
document has been recorded as indicated on Schedule 3.15 and all
appropriate recording fees and taxes have been paid, such Lien shall be a
perfected first priority Lien subject to no other Liens except to the
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extent permitted by Section 8.17 of the Amended Note Purchase
Agreement;
(ii) Security Agreement. The Security Agreement creates a valid
Lien in and to the Collateral (as defined in the Security Agreement)
in favor of the Collateral Agent, and when all UCC-1 financing
statements required by the Security Agreement to be filed with public
recording offices have been so filed, and all taxes, recording fees
and other fees and charges required by applicable law to be paid in
connection therewith have been duly paid in full, such Lien shall be a
perfected, first priority Lien on the Collateral of a type which may
be perfected by the filing of a UCC financing statement or by
possession, subject to no Liens except to the extent permitted by
Section 8.17 of the Amended Note Purchase Agreement;
(iii) Trademark/Copyright Security Agreement. The
Trademark/Copyright Security Agreement creates a valid Lien in and to
the Trademark Collateral, Copyright Collateral and Related Assets (as
such terms are defined in the Trademark/Copyright Security Agreement)
in favor of the Collateral Agent, and upon the filing thereof with the
United States Patent and Trademark Office or the United States
Copyright Office and the filing of UCC-1 financing statements as
therein provided for, such Lien will be a perfected first priority
Lien in and to the Trademark Collateral, Copyright Collateral and
Related Assets in which a Lien may be perfected by the filing of a UCC
financing statement or filing with the United States Patent and
Trademark Office or the United States Copyright Office, subject to no
Liens except to the extent permitted by Section 8.17 of the Amended
Note Purchase Agreement;
(iv) Stock Pledge Agreement. The Stock Pledge Agreement creates a
valid Lien in and to the Pledged Collateral (as defined in the Stock
Pledge Agreement) in favor of the Collateral Agent, and upon delivery
of certificates or instruments evidencing the Pledged Collateral to
the Collateral Agent and the filing of related UCC-1 Financing
Statements, such Lien will be a perfected first priority Lien in and
to such of the Pledged Collateral as to which a Lien may be perfected
by delivery, subject to no Liens except to the extent permitted by
Section 8.17 of the Amended Note Purchase Agreement; and
(v) Note Pledge Agreement. The Note Pledge Agreement
14
<PAGE>
creates a valid Lien in and to the Pledged Collateral (as defined in
the Note Pledge Agreement) in favor of the Collateral Agent, and upon
delivery of the instrument or instruments evidencing the Pledged
Collateral to the Collateral Agent and the filing of related UCC-1
Financing Statements, such Lien will be a perfected first priority
Lien in and to such of the Pledged Collateral as to which a Lien may
be perfected by delivery, subject to no Liens except to the extent
permitted by Section 8.17 of the Amended Note Purchase Agreement.
(b) Warranties and Representations True. All warranties and
representations made by the Company and the Restricted Subsidiaries in each
of the Security Documents are true and correct as of the date hereof.
3.16 Solvency.
After giving effect to the transactions contemplated by the Transaction
Documents, (a) the fair value and the fair salable value of the assets of the
Company and each Restricted Subsidiary (excluding any Debt due from any
Affiliate of the Company or such Restricted Subsidiary, as the case may be) will
each be in excess of the fair valuation of its total liabilities (including all
contingent liabilities), (b) the Company and each Restricted Subsidiary will be
able to pay its debts or other obligations in the ordinary course as they
mature, and (c) the Company and each Restricted Subsidiary has capital not
unreasonably small to carry on its business and all business in which it
proposes to be engaged.
4. CONDITIONS PRECEDENT
The amendments and the waivers set forth in Sections 2.1, 2.2 and 2.3 shall
become effective upon the satisfaction of the following conditions (the date of
such effectiveness is herein referred to as the "Effective Date"):
4.1 Certificates.
(a) Company Officer's Certificate. The Company shall have delivered
to the Noteholders (or their special counsel) a certificate signed by the
Chairman, the Vice Chairman, the President or the Executive Vice President-
Chief Financial Officer of the Company, dated the Effective Date,
certifying that (i) no Default or Event of Default under the Amended Note
Purchase Agreement exists and (ii) the representations and warranties set
forth in Section 3 and in each of the other Financing Documents (excluding,
however, for purposes of such officer's certificate, Section 2 of the
Amended Note Purchase Agreement) are true and correct on the Effective
Date. Such officer's certificate may expressly state that it is not
certifying as to the
15
<PAGE>
accuracy of the representations and warranties set forth in Section 2 of
the Amended Note Purchase Agreement.
(b) Company Secretary's Certificate. The Company shall have delivered
to the Noteholders a certificate signed by Secretary or one of the
Assistant Secretaries of the Company, dated the Effective Date, certifying
as true and correct copies of the Company's charter and by-laws and the
resolutions attached thereto and other corporate proceedings relating to
the authorization, execution and delivery of each of the Financing
Documents to which the Company is a party.
(c) Subsidiary Secretary's Certificates. Each Restricted Subsidiary
entering into one or more of the Financing Documents shall have delivered
to the Noteholders a certificate signed by the Secretary or one of the
Assistant Secretaries of such Restricted Subsidiary, dated the Effective
Date, certifying as true and correct copies of such Restricted Subsidiary's
charter and by-laws and the resolutions attached thereto and other
corporate proceedings relating to the authorization, execution and delivery
of the Financing Documents to which such Restricted Subsidiary is a party.
4.2 Opinions of Counsel.
The Noteholders shall have received opinions from
(a) Balch & Bingham, special counsel for the Company and the
Restricted Subsidiaries,
(b) special local counsel for the Company and the Restricted
Subsidiaries in the States of Florida, Georgia, Illinois, Mississippi,
Ohio, New York, Tennessee and Washington, and
(c) Shipman & Goodwin, special counsel for the Collateral Agent,
each dated as of the Effective Date, substantially in the respective forms set
forth in Exhibit B1, Exhibit B2 and Exhibit B3, and as to such other matters as
the Noteholders may reasonably request. The Noteholders also shall have received
an opinion from Bingham Dana LLP, special counsel for the Noteholders, in form
and substance satisfactory to the Noteholders.
4.3 Omnibus Collateral Agreement.
The Omnibus Collateral Agreement, in the form of Exhibit C hereto (the
"Omnibus Collateral Agreement"), shall be duly executed and delivered to the
16
<PAGE>
Noteholders (or their special counsel) by the Company and each of the Restricted
Subsidiaries identified on the signature pages thereto.
4.4 Guaranty Agreement.
The Guaranty Agreement, in the form of Exhibit D hereto (the "Guaranty
Agreement"), shall be duly executed by each of the Restricted Subsidiaries
identified on the signature pages thereto in favor of the Collateral Agent and
delivered to the Noteholders (or their special counsel).
4.5 1993 Third Amendment.
The Company and the 1993 Noteholders shall have executed and delivered to
the Noteholders (or their special counsel) a counterpart of the 1993 Third
Amendment.
4.6 Fifth Amendment to Credit Agreement.
The Company, the Banks and the Agent shall have executed and delivered to
the Noteholders (or their special counsel) a copy of the Fifth Amendment, which
shall be in form and substance satisfactory to the Noteholders and their special
counsel. 4.7 Letter of Credit Documents.
The Company shall have executed and delivered to the Noteholders (or their
special counsel) a copy of each of the following Letter of Credit documents:
(a) the B of A Reimbursement Agreement,
(b) PNC Reimbursement Agreement One, and
(c) PNC Reimbursement Agreement Two,
each of which shall be in form and substance satisfactory to the Noteholders and
their special counsel.
4.8 Other Related Matters.
The Company shall have delivered a letter addressed to the Noteholders with
respect to certain other matters relating to the Transaction Documents the
receipt of which shall have been acknowledged by special counsel to the
Noteholders.
17
<PAGE>
4.9 Intercreditor Agreement.
The Banks, the 1993 Noteholders, the L/C Issuers, State Street Bank and
Trust Company, the Company, the Owner Trustee, the Indenture Trustee and each of
the Restricted Subsidiaries identified on the signature pages thereto, shall
have delivered to the Noteholders (or their special counsel) a fully executed
counterpart of the Collateral Agency and Intercreditor Agreement, in form
attached hereto as Exhibit E (the "Intercreditor Agreement").
4.10 Security Documents.
(a) Mortgages. Separate Mortgages and Deeds of Trust, substantially in
the form of Exhibit F1 through Exhibit F7 hereto (collectively, the
"Mortgages"), relating to real properties of the Company and certain
Restricted Subsidiaries located in the States of Alabama, Florida,
Illinois, Mississippi, Ohio, Tennessee and Washington, shall be duly
executed and delivered to the Collateral Agent, and a copy of each thereof
evidencing such due execution and delivery shall be delivered to the
Noteholders (or their special counsel).
(b) Security Agreement. A Security Agreement, substantially in the
form of Exhibit G hereto (the "Security Agreement"), shall be duly executed
and delivered by the Company, each of the Restricted Subsidiaries
identified on the signature pages thereto, and the Collateral Agent, and a
copy of each thereof evidencing such due execution and delivery shall be
delivered to the Noteholders (or their special counsel).
(c) Trademark/Copyright Security Agreement. A Trademark and Copyright
Collateral Assignment and Security Agreement (the "Trademark/Copyright
Security Agreement"), substantially in the form of Exhibit H hereto, shall
be duly executed and delivered by the Company, each of the Restricted
Subsidiaries identified on the signature pages thereto, and the Collateral
Agent, and a copy thereof evidencing such due execution and delivery shall
be delivered to the Noteholders (or their special counsel).
(d) Stock Pledge Agreement. The Stock Pledge Agreement, substantially
in the form of Exhibit I hereto (the "Stock Pledge Agreement"), shall be
duly executed and delivered by the Company, each of the Restricted
Subsidiaries identified on the signature pages thereto, and the Collateral
Agent, and a copy of each thereof evidencing such due execution and
delivery shall be delivered to the Noteholders (or their special counsel).
All stock certificates and undated stock powers executed in blank required
to be executed and delivered to the Collateral Agent by the terms of the
Stock
18
<PAGE>
Pledge Agreement shall have been so delivered, and the Company shall
provide the Noteholders with copies thereof.
(e) Note Pledge Agreement. A Note Pledge Agreement, substantially in
the form of Exhibit J hereto (the "Note Pledge Agreement"), shall be duly
executed and delivered by the Company and the Collateral Agent, and a copy
thereof evidencing such due execution and delivery shall be delivered to
the Noteholders (or their special counsel). The instrument or instruments
evidencing the Pledged Collateral (as defined in the Note Pledge Agreement)
and a power of attorney executed by the Company required to be executed and
delivered by the Company to the Collateral Agent by the terms of the Note
Pledge Agreement shall have been so delivered, and the Company shall
provide the Noteholders (or their special counsel) with a copy thereof.
(f) Perfection of Liens. The Company and each Restricted Subsidiary
that has entered into a Security Document shall have executed and delivered
to the Collateral Agent all UCC-1 financing statements as are necessary to
perfect the Liens of the Collateral Agent in the Collateral which may be
perfected by the filing thereof.
(g) Title Matters. With respect to each of the Mortgages, the Company
shall have delivered or caused to be delivered to the Collateral Agent one
or more loan policies of title insurance, or commitment therefor,
satisfactory to you and showing no exceptions to title except as reasonably
acceptable to the Noteholders (or their special counsel).
(h) Certificates of Insurance. The Company shall have delivered to the
Noteholders (or their special counsel) certificates of insurance evidencing
the insurance required by the Security Documents, showing the Collateral
Agent as loss payee (as its interest may appear) thereunder.
(i) Taxes. All taxes, fees and other charges payable in connection
with the execution, delivery, recording, filing and registration of the
Security Documents shall have been paid or provision for such payment shall
have been made to the reasonable satisfaction of the Noteholders (or their
special counsel).
4.11 Lien Searches.
The Noteholders (or their special counsel) shall have received Lien
searches showing that the Collateral (as defined in the Security Agreement) of
the Company and the Subsidiaries is subject to no Liens other than Liens
permitted under Section 8.17 of the Amended Note Purchase Agreement.
19
<PAGE>
4.12 Restructuring Fee.
The Company shall have paid to the Noteholders an aggregate of Three
Hundred Thousand Dollars ($300,000) as a restructuring fee in respect of the
transactions contemplated by this Agreement. Such payment shall be made to the
Noteholders in proportion, as nearly as practicable, to the respective unpaid
principal amount of Existing Notes held by each Noteholder on the Effective
Date, in the manner provided in the Existing Note Purchase Agreement for the
payment of principal.
4.13 Private Placement Numbers.
A private placement number issued by Standard & Poor's CUSIP Service Bureau
(in cooperation with the Securities Valuation Office of the National Association
of Insurance Commissioners) shall have been obtained for each Series of Notes.
4.14 Payment of Special Counsel and Financial Advisor Fees.
Without limiting the provisions of Section 5.3, the Company shall have paid
on or before the Effective Date the fees, charges and disbursements of the
Noteholders' special counsel referred to in Section 4.2, and Nightingale
Associates, LLC, in each case to the extent reflected in statements rendered to
the Company on or prior to the Effective Date.
4.15 Lease Letters.
Letters from the owner participants and the debt participants in respect of
the Equipment Lease Agreement dated as of September 30, 1997, as amended, shall
have been delivered to the Noteholders (or their special counsel), in form,
scope and substance satisfactory to the Noteholders and their special counsel.
4.16 Proceedings and Documents Satisfactory.
All opinions, certificates and other instruments and all proceedings taken
in connection with the execution and delivery of this Agreement and the
transactions contemplated hereby shall be reasonably satisfactory to the
Noteholders and their special counsel; and the Noteholders and their special
counsel shall have received copies of such documents and papers as may be
reasonably requested in connection therewith.
5. MISCELLANEOUS
20
<PAGE>
5.1 Effect of Amendment and Waiver.
If the foregoing is acceptable to you, please note your acceptance in the
space provided below. Upon the execution and delivery of this Agreement by each
of the Noteholders and the Company, the conditions set forth in Section 4 shall
be deemed satisfied or waived and the Existing Note Purchase Agreement shall be
deemed to be amended and restated as set forth above and the waivers as set
forth above shall be deemed to be effective. This Agreement shall be binding
upon, and shall inure to the benefit of, the permitted successors and assigns of
the parties hereto and the holders from time to time of the Amended Notes.
5.2 No Legend Required.
Any and all notices, requests, certificates and other instruments
including, without limitation, the Amended Notes, may refer to the Note Purchase
Agreement or the Note Purchase Agreement dated as of September 15, 1995 without
making specific reference to this Waiver and Second Amendment to Note Purchase
Agreement, but nevertheless all such references shall be deemed to include this
Waiver and Second Amendment to Note Purchase Agreement unless the context shall
otherwise require.
5.3 Fees and Expenses.
Whether or not the transactions herein contemplated shall be consummated,
the Company agrees to pay directly all reasonable out-of-pocket travel expenses
and other reasonable out-of-pocket expenses of the Noteholders in connection
with the preparation, negotiation, execution and delivery of the Financing
Documents and the Amended Note Purchase Agreement, and the transactions
contemplated hereby and thereby, including, but not limited to, the reasonable
fees and disbursements of Bingham Dana LLP, the Noteholders' special counsel,
and Nightingale Associates, LLC, financial advisor to the Noteholders and the
1993 Noteholders, photocopying costs, and charges for shipping the Amended
Notes, adequately insured, to each Noteholder at its home office or at such
other place as such Noteholder may designate, and so long as any Noteholder
shall hold any of the Amended Notes, all such expenses relating to any
amendments, waivers or consents pursuant to the provisions of the Amended Note
Purchase Agreement, including, without limitation, any amendments, waivers or
consents resulting from any work-out, restructuring or similar events relating
to the performance by the Company and the Restricted Subsidiaries of their
respective obligations under the Financing Documents, the Amended Note Purchase
Agreement and the Amended Notes. The Company also agrees that it will pay and
save each Noteholder harmless against any and all liability with respect to
stamp and other similar taxes, if any, which may be payable or which may be
determined to be payable in connection with the execution and
21
<PAGE>
delivery of the Financing Documents, the Amended Note Purchase Agreement and the
Amended Notes, whether or not any Amended Notes are then outstanding. The
Company agrees to protect and indemnify each Noteholder against any liability
for any and all brokerage fees and commissions payable or claimed to be payable
to any Person retained by the Company, their Subsidiaries, or any of their
respective Affiliates that are controlled by the Company in connection with the
transactions contemplated by this Agreement. Without limiting the foregoing, the
Company agrees to pay the costs of obtaining a private placement number for each
Series of Amended Notes, and authorizes the submission of such information as
may be required by the CUSIP Service Bureau of Standard & Poor's for the purpose
of obtaining such numbers.
5.4 Survival.
All warranties, representations, certifications and covenants made by the
Company in this Agreement or in any certificate or other instrument delivered by
it or on its behalf under this Agreement shall be considered to have been relied
upon by the Noteholders and shall survive the execution of this Agreement,
regardless of any investigation made by or on behalf of the Noteholders. All
statements in any such certificate or other instrument shall constitute
warranties and representations of the Company under this Agreement.
5.5 Duplicate Originals; Execution in Counterpart.
Two or more duplicate originals of this Agreement may be signed by the
parties, each of which shall be an original but all of which together shall
constitute one and the same instrument. This Agreement may be executed in one or
more counterparts and shall be effective when at least one counterpart shall
have been executed by each party to this Agreement, and each set of counterparts
which, collectively, show execution by each such party to this Agreement shall
constitute one duplicate original.
5.6 Release of Claims.
The Company, for itself and all of its predecessors, successors and
assigns, acknowledges, affirms and represents that immediately prior to giving
effect to this Agreement, it is legally, validly and enforceably obligated to
each of the Noteholders under and pursuant to the Existing Notes and the
Existing Note Purchase Agreement and that the Company has no defense, offset,
counterclaim or right of recoupment with regard to such obligations.
Additionally, the Company for itself and all of its predecessors, successors and
assigns, does hereby fully, forever and completely release and discharge each of
the Noteholders and all of their respective employees, officers, directors,
trustees, shareholders, affiliates, agents, attorneys,
22
<PAGE>
representatives, predecessors, successors and assigns (collectively, the
"Released Parties"), from any and all claims, demands, liabilities, damages and
causes of action of any kind whatsoever, whether based on facts in existence
prior to or as of the date hereof, whether known or unknown, which the Company
may now have or may have had at any time heretofore or may have at anytime
hereafter, whether for contribution or indemnity or otherwise, and whether
direct or indirect, fixed or contingent, liquidated or unliquidated, arising out
of or related in any way to any of the following: (a) the Existing Notes and the
Existing Note Purchase Agreement and all documents relating thereto or executed
in connection therewith (the "Existing Note Documents"); and (b) any action,
inaction or omission by any of the Released Parties in connection with the
Existing Note Documents or the administration thereof.
5.7 Governing Law.
THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND SHALL BE
GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK.
[Remainder of page intentionally left blank; next page is signature page.]
If you are in agreement with the foregoing, please sign the form of
acceptance in the space provided below, whereupon the foregoing shall become a
binding agreement between you and the Company as of the date first above
written.
BIRMINGHAM STEEL CORPORATION
By:
-----------------------------
Name:
Title:
Accepted:
PRINCIPAL LIFE INSURANCE COMPANY
(f/k/a Principal Mutual Life Insurance Company)
By: Principal Capital Management, LLC
a Delaware limited liability company,
its authorized signatory
By
--------------------------------
Name:
Title:
By
--------------------------------
Name:
Title:
THE EQUITABLE LIFE ASSURANCE SOCIETY OF THE UNITED STATES
By
--------------------------------
Name:
Title:
NATIONWIDE LIFE INSURANCE COMPANY
By
--------------------------------
Name:
Title:
EMPLOYERS LIFE INSURANCE COMPANY OF WAUSAU
By
--------------------------------
Name:
Title:
CONNECTICUT GENERAL LIFE INSURANCE COMPANY
By CIGNA Investments, Inc., its authorized agent
By
--------------------------------
Name:
Title:
LIFE INSURANCE COMPANY OF NORTH AMERICA
By CIGNA Investments, Inc., its authorized agent
By
--------------------------------
Name:
Title:
CIGNA PROPERTY AND CASUALTY INSURANCE COMPANY
By CIGNA Investments, Inc., its authorized agent
By
--------------------------------
Name:
Title:
THE NORTHWESTERN MUTUAL LIFE INSURANCE COMPANY
By
--------------------------------
Name:
Title:
AMERICAN UNITED LIFE INSURANCE COMPANY
By
--------------------------------
Name:
Title:
THE STATE LIFE INSURANCE COMPANY
By
--------------------------------
Name:
Title:
THE MINNESOTA MUTUAL LIFE INSURANCE COMPANY
By: MIMLIC Asset Management Company
By
--------------------------------
Name:
Title:
FEDERATED LIFE INSURANCE COMPANY
By: MIMLIC Asset Management Company
By
--------------------------------
Name:
Title:
FEDERATED MUTUAL INSURANCE COMPANY
By: MIMLIC Asset Management Company
By
--------------------------------
Name:
Title:
MUTUAL TRUST LIFE INSURANCE COMPANY
By: MIMLIC Asset Management Company
By
--------------------------------
Name:
Title:
GUARANTEE RESERVE LIFE INSURANCE COMPANY
By: MIMLIC Asset Management Company
By
--------------------------------
Name:
Title:
FIRST NATIONAL LIFE INSURANCE COMPANY OF AMERICA
By: MIMLIC Asset Management Company
By
--------------------------------
Name:
Title:
MINNESOTA FIRE & CASUALTY COMPANY
By: MIMLIC Asset Management Company
By
--------------------------------
Name:
Title:
NATIONAL TRAVELERS LIFE COMPANY
By: MIMLIC Asset Management Company
By
--------------------------------
Name:
Title:
SUN LIFE ASSURANCE COMPANY OF CANADA (U.S.)
By
--------------------------------
Name:
Title:
By
--------------------------------
Name:
Title:
SUN LIFE ASSURANCE COMPANY OF CANADA
By
--------------------------------
Name:
Title:
By
--------------------------------
Name:
Title:
SUN LIFE INSURANCE AND ANNUITY COMPANY OF NEW YORK
By
--------------------------------
Name:
Title:
By
--------------------------------
Name:
Title:
GENERAL ELECTRIC CAPITAL ASSURANCE COMPANY
(formerly known as Great Northern Insured Annuity Corporation)
By
--------------------------------
Name:
Title:
THE LINCOLN NATIONAL LIFE INSURANCE COMPANY
By: Lincoln Investment Management, Inc.,
Its Attorney-In-Fact
By
--------------------------------
Name:
Title:
AMERITAS LIFE INSURANCE COMPANY
By
--------------------------------
Name:
Title:
23
<PAGE>
EXHIBIT 4.2.3
BIRMINGHAM STEEL CORPORATION
AMENDED AND RESTATED NOTE PURCHASE AGREEMENT
Dated as of October 12, 1999
$76,000,000
9.71% Series A Senior Notes due December 15, 2002
$14,000,000
9.82% Series B Senior Notes due December 15, 2005
$60,000,000
9.92% Series C Senior Notes due December 15, 2005
================================================================================
<PAGE>
TABLE OF CONTENTS
PAGE
1. DESCRIPTION OF NOTES AND COMMITMENT............................. 1
1.1. Amendment of Original Note Purchase Agreements............... 1
1.2. Description of Notes......................................... 2
1.3. The Closing.................................................. 7
1.4. Purchase for Investment...................................... 8
1.5. Expenses..................................................... 9
2. WARRANTIES AND REPRESENTATIONS.................................. 11
2.1. Nature of Business........................................... 11
2.2. Financial Statements; Debt; Material Adverse Change.......... 11
2.3. Subsidiaries and Affiliates.................................. 12
2.4. Pending Litigation........................................... 12
2.5. Title to Properties.......................................... 12
2.6. Taxes........................................................ 13
2.7. Full Disclosure.............................................. 14
2.8. Corporate Organization and Authority......................... 14
2.9. Restrictions on Company and Subsidiaries..................... 14
2.10. Compliance with Law......................................... 15
2.11. ERISA....................................................... 15
2.12. Certain Laws................................................ 17
2.13. Environmental Compliance.................................... 17
2.14. Sale is Legal and Authorized; Obligations are Enforceable... 18
2.15. Governmental Consent........................................ 19
2.16. Private Offering............................................ 19
2.17. No Defaults................................................. 19
2.18. Use of Proceeds............................................. 20
3. INTENTIONALLY OMITTED........................................... 21
4. HOLDERS' SPECIAL RIGHTS......................................... 21
4.1. Direct Payment............................................... 21
4.2. Delivery Expenses............................................ 21
4.3. Issuance Taxes............................................... 22
5. PREPAYMENTS..................................................... 22
5.1. Required Scheduled Prepayments............................... 22
5.2. Other Prepayments............................................ 22
5.3. Notice of Optional Prepayment................................ 25
5.4. Partial Prepayment Pro Rata.................................. 26
5.5. Notation of Amended Notes on Prepayment...................... 26
5.6. No Other Optional Prepayments................................ 26
6. CHANGE IN CONTROL PUT........................................... 26
6.1. Offer to Prepay upon Change in Control....................... 26
6.2. Effect of Prepayments........................................ 28
7. REGISTRATION; SUBSTITUTION OF NOTES............................. 29
7.1. Registration of Notes........................................ 29
7.2. Exchange of Notes............................................ 29
7.3. Replacement of Notes......................................... 29
i
<PAGE>
8. COMPANY BUSINESS COVENANTS...................................... 30
8.1. Payment of Taxes and Claims.................................. 30
8.2. Maintenance of Properties and Corporate Existence............ 30
8.3. Payment of Notes and Maintenance of Office................... 31
8.4. ERISA........................................................ 32
8.5. Line of Business............................................. 33
8.6. Transactions with Affiliates................................. 33
8.7. Pro-Rata Offers.............................................. 33
8.8. Private Offering............................................. 33
8.9. Designation of Subsidiaries.................................. 33
8.10. New Restricted Subsidiaries or Properties................... 34
8.11. Fixed Charge Coverage Ratio................................. 36
8.12. Minimum Consolidated EBITDA................................. 36
8.13. Minimum Tangible Net Worth.................................. 37
8.14. Capital Expenditures........................................ 37
8.15. Debt to Consolidated EBITDA Ratio........................... 37
8.16. Debt........................................................ 37
8.17. Liens....................................................... 38
8.18. Mergers; Consolidations..................................... 42
8.19. Disposition of Assets....................................... 42
8.20. Restricted Payments......................................... 43
8.21. Permitted Investments....................................... 43
8.22. Accounts with Financial Institutions other than the Banks... 43
8.23. Proceeds from Equity Issuances.............................. 44
8.24. No Voluntary Reductions in Commitment....................... 44
9. INFORMATION AS TO COMPANY....................................... 44
9.1. Financial and Business Information........................... 44
9.2. Officers' Certificates....................................... 49
9.3. Accountants' Certificates.................................... 50
9.4. Quarterly Review With Financial Advisor...................... 50
9.5. Inspection................................................... 50
10. EVENTS OF DEFAULT.............................................. 50
10.1. Nature of Events............................................ 50
10.2. Default Remedies............................................ 53
10.3. Annulment of Acceleration of Notes.......................... 55
11. INTERPRETATION OF THIS AGREEMENT............................... 55
11.1. Terms Defined............................................... 55
11.2. GAAP........................................................ 77
11.3. Directly or Indirectly...................................... 77
11.4. Section Headings and Table of Contents and Construction..... 77
11.5. Governing Law............................................... 78
12. MISCELLANEOUS.................................................. 78
12.1. Communications.............................................. 78
12.2. Reproduction of Documents................................... 79
12.3. Survival.................................................... 80
12.4. Successors and Assigns...................................... 80
12.5. Amendment and Waiver........................................ 80
12.6. Payments, When Received..................................... 82
12.7. Entire Agreement............................................ 82
12.8. Duplicate Originals, Execution in Counterpart............... 82
ii
<PAGE>
Annex 1 - Information as to Purchasers
Annex 2 - Payment Instructions at Closing
Annex 3 - Information as to Company
Exhibit A1 - Form of 9.71% Series A Senior Note due December 15, 2002
Exhibit A2 - Form of 9.82% Series B Senior Note due December 15, 2005
Exhibit A3 - Form of 9.92% Series C Senior Note due December 15, 2005
iii
<PAGE>
BIRMINGHAM STEEL CORPORATION
--------------------------------
AMENDED AND RESTATED NOTE PURCHASE AGREEMENT
--------------------------------
$76,000,000
9.71% Series A Senior Notes due December 15, 2002
$14,000,000
9.82% Series B Senior Notes due December 15, 2005
$60,000,000
9.92% Series C Senior Notes due December 15, 2005
Dated as of October 12, 1999
To the Purchaser Named on the
Signature Page Hereto
Ladies and Gentlemen:
BIRMINGHAM STEEL CORPORATION, a Delaware corporation (together with
its successors and assigns, the "Company"), hereby agrees with you as follows:
1. DESCRIPTION OF NOTES AND COMMITMENT
1.1. Amendment of Original Note Purchase Agreements.
The Company entered into those separate Note Purchase Agreements dated as of
September 15, 1995 (collectively, as amended by the Amendment to 1995 Note
Purchase Agreement dated as of December 14, 1998, the "Original Note Purchase
Agreements"), with each of the purchasers identified on Annex 1 thereto (such
purchasers, including their successors or assigns from and after the Original
Closing Date, are referred to collectively as the "Purchasers"). The Company
and the Purchasers have agreed, pursuant to the Waiver and Second Amendment to
Note Purchase Agreement, dated as of the date hereof (the "Waiver and Second
Amendment"), entered into by the Company and the Purchasers, to amend and
restate in full the Original Note Purchase Agreements, and to amend and restate
in full the Original Notes of each Series in the respective forms attached
hereto as
<PAGE>
Exhibit A1, Exhibit A2 and Exhibit A3. The term "Note Purchase Agreements" as
used herein shall mean this Agreement and the other Amended and Restated Note
Purchase Agreements, as amended from time to time hereafter.
1.2. Description of Notes.
(a) Original Notes. On the Original Closing Date, the Company
authorized the issue and sale of
(i) Seventy-Six Million Dollars ($76,000,000) in aggregate
principal amount of its 6.96% Series A Senior Notes due December 15,
2002 (the "Original Series A Notes"), dated the date of issue, bearing
interest (computed on the basis of a 360-day year of twelve 30-day
months) on the unpaid principal balance thereof at the rate of six and
ninety-six one-hundredths percent (6.96%) per annum, payable semi-
annually on the fifteenth (15th) day of June and December in each
year, commencing on the payment date next succeeding the date of such
Original Series A Note, and at maturity, and bearing interest on
overdue principal and premium, if any, and (to the extent legally
enforceable) on any overdue installment of interest at a rate equal to
the lesser of (A) the highest rate allowed by applicable law and (B)
the rate of eight and ninety-six hundredths percent (8.96%) per annum;
(ii) Fourteen Million Dollars ($14,000,000) in aggregate
principal amount of its 7.07% Series B Senior Notes due December 15,
2005 (the "Original Series B Notes"), dated the date of issue, bearing
interest (computed on the basis of a 360-day year of twelve 30-day
months) on the unpaid principal balance thereof at the rate of seven
and seven one-hundredths percent (7.07%) per annum, payable semi-
annually on the fifteenth (15th) day of June and December in each
year, commencing on the payment date next succeeding the date of such
Original Series B Note, and at maturity, and bearing interest on
overdue principal and premium, if any, and (to the extent legally
enforceable) on any overdue installment of interest at a rate equal to
the lesser of (A) the highest rate allowed by applicable law and (B)
the rate of nine and seven one-hundredths percent (9.07%) per annum;
and
(iii) Sixty Million Dollars ($60,000,000) in aggregate principal
amount of its 7.17% Series C Senior Notes due December 15, 2005 (the
"Original Series C Notes"), dated the date of issue, bearing interest
(computed on the basis of a 360-day year of twelve 30-day months) on
the unpaid principal balance thereof at the rate of seven and
seventeen one-hundredths percent (7.17%) per annum, payable semi-
annually on the fifteenth (15th) day of June and December in each
year, commencing on the payment date next succeeding the date of such
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Original Series C Note, and at maturity, and bearing interest on
overdue principal and premium, if any, and (to the extent legally
enforceable) on any overdue installment of interest at a rate equal to
the lesser of (A) the highest rate allowed by applicable law and (B)
the rate of nine and seventeen one-hundredths percent (9.17%) per
annum.
The Original Series A Notes, the Original Series B Notes and the
Original Series C Notes are herein referred to collectively as the
"Original Notes."
(b) Amended Series A Notes. Pursuant to the Waiver and Second
Amendment, the Company and the Purchasers have agreed to amend and restate
the Original Series A Notes in the form attached hereto as Exhibit A1 (the
"Amended Series A Notes," such term to include each Amended Series A Note
delivered from time to time in accordance with any of the Note Purchase
Agreements). The Amended Series A Notes shall be in an aggregate principal
amount of Seventy-Six Million Dollars ($76,000,000). Each Amended Series A
Note will:
(i) be dated the most recent date on which interest shall have
been paid on the Note surrendered in exchange for such Amended Series
A Note or the lost, stolen, destroyed or mutilated Note in respect of
which such Amended Series A Note is being issued;
(ii) bear interest (computed on the basis of a 360-day year of
twelve 30-day months) from such date to and including the Effective
Date at the rate of six and ninety-six one-hundredths percent (6.96%)
per annum, payable on November 15, 1999;
(iii) bear interest at all times after the Effective Date and
until (and including) the maturity date thereof (whether such maturity
is scheduled or occurs by reason of acceleration or otherwise), at the
rate of nine and seventy-one one-hundredths percent (9.71%) per annum,
payable monthly on the fifteenth (15th) day of each month in each year
(commencing on November 15, 1999) and at maturity;
(iv) bear interest, payable on demand, on any overdue principal
(including any overdue prepayment of principal) and Make-Whole Amount,
if any, and (to the extent permitted by applicable law) on any overdue
installment of interest, at a rate equal to the lesser of
(A) the highest rate allowed by applicable law, and
(B) eleven and seventy-one one-hundredths percent (11.71%)
per annum;
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(v) mature on December 15, 2002; and
(vi) be in the form of the Amended Series A Note set out in
Exhibit A1 hereto.
(c) Amended Series B Notes. Pursuant to the Waiver and Second
Amendment, the Company and the Purchasers have agreed to amend and restate
the Original Series B Notes in the form attached hereto as Exhibit A2 (the
"Amended Series B Notes," such term to include each Amended Series B Note
delivered from time to time in accordance with any of the Note Purchase
Agreements). The Amended Series B Notes shall be in an aggregate principal
amount of Fourteen Million Dollars ($14,000,000). Each Amended Series B
Note will:
(i) be dated the most recent date on which interest shall have
been paid on the Note surrendered in exchange for such Amended Series
B Note or the lost, stolen, destroyed or mutilated Note in respect of
which such Amended Series B Note is being issued;
(ii) bear interest (computed on the basis of a 360-day year of
twelve 30-day months) from such date to and including the Effective
Date at the rate of seven and seven one-hundredths percent (7.07%) per
annum, payable on November 15, 1999;
(iii) bear interest at all times after the Effective Date and
until (and including) the maturity date thereof (whether such maturity
is scheduled or occurs by reason of acceleration or otherwise), at the
rate of nine and eighty-two one-hundredths percent (9.82%) per annum,
payable monthly on the fifteenth (15th) day of each month in each year
(commencing on November 15, 1999) and at maturity;
(iv) bear interest, payable on demand, on any overdue principal
(including any overdue prepayment of principal) and Make-Whole Amount,
if any, and (to the extent permitted by applicable law) on any overdue
installment of interest, at a rate equal to the lesser of
(A) the highest rate allowed by applicable law, and
(B) eleven and eighty-two one-hundredths percent (11.82%)
per annum;
(v) mature on December 15, 2005; and
(vi) be in the form of the Amended Series B Note set out in
Exhibit A2 hereto.
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(d) Amended Series C Notes. Pursuant to the Waiver and Second
Amendment, the Company and the Purchasers have agreed to amend and restate
the Original Series C Notes in the form attached hereto as Exhibit A3 (the
"Amended Series C Notes," such term to include each Amended Series C Note
delivered from time to time in accordance with any of the Note Purchase
Agreements). The Amended Series C Notes shall be in an aggregate principal
amount of Sixty Million Dollars ($60,000,000). Each Amended Series C Note
will:
(i) be dated the most recent date on which interest shall have
been paid on the Note surrendered in exchange for such Amended Series
C Note or the lost, stolen, destroyed or mutilated Note in respect of
which such Amended Series C Note is being issued;
(ii) bear interest (computed on the basis of a 360-day year of
twelve 30-day months) from such date to and including the Effective
Date at the rate of seven and seventeen one-hundredths percent (7.17%)
per annum, payable on November 15, 1999;
(iii) bear interest at all times after the Effective Date and
until (and including) the maturity date thereof (whether such maturity
is scheduled or occurs by reason of acceleration or otherwise), at the
rate of nine and ninety-two one-hundredths percent (9.92%) per annum,
payable monthly on the fifteenth (15th) day of each month in each year
(commencing on November 15, 1999) and at maturity;
(iv) bear interest, payable on demand, on any overdue principal
(including any overdue prepayment of principal) and Make-Whole Amount,
if any, and (to the extent permitted by applicable law) on any overdue
installment of interest, at a rate equal to the lesser of
(A) the highest rate allowed by applicable law, and
(B) eleven and ninety-two one-hundredths percent (11.92%)
per annum;
(v) mature on December 15, 2005; and
(vi) be in the form of the Amended Series C Note set out in
Exhibit A3 hereto.
(e) Interest Rate Adjustments.
(i) Interest Payments under Credit Agreement. If at any time
after the Effective Date the Credit Agreement shall be amended to
provide that interest payments on the principal loan
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obligations under the Credit Agreement shall be paid quarterly (rather
than monthly), the Company may, by giving written notice thereof to
each holder of Notes, elect to pay interest on the Notes quarterly on
the fifteenth (15th) day of March, June, September and December in
each year, beginning with the period commencing on the interest
payment date immediately following the date of such notice, provided
that the unpaid principal amount of the Notes of each Series shall
bear interest
(A) at all times from and after the first day of such
quarterly interest period and until (and including) the maturity
date thereof (whether such maturity is scheduled or occurs by
reason of acceleration or otherwise) at a rate per annum equal to
(1) the interest rate then applicable to the Notes plus (2) ten
hundredths of one percent (.10%); and
(B) on any overdue principal (including any overdue
prepayment of principal) and Make-Whole Amount, if any, and (to
the extent permitted by applicable law) on any overdue
installment of interest, at a rate per annum equal to the lesser
of (1) the highest rate allowed by applicable law, and (2) the
interest rate then applicable to the Notes (after giving effect
to the adjustment required by clause (A) above) plus two percent
(2%).
If following any adjustment pursuant to this Section 1.2(e)(i) the
Credit Agreement shall be amended to provide for interest payments on
the principal loan obligations under the Credit Agreement to be made
monthly, the Company shall promptly provide written notice of such
fact to all of the holders of the Notes and the interest payments on
the Notes of each Series shall be adjusted, concurrently with the
adjustment of the interest payments in respect of the principal loan
obligations under the Credit Agreement, to be made on the dates, and
at the rates (subject to subsection 1.2(e)(ii) below), provided in
subsections 1.2(b)(iii), 1.2(c)(iii) and 1.2(d)(iii), respectively.
(ii) SBQ Asset Sale. If the Company shall fail to make the SBQ
Asset Sale Prepayment on or prior to January 31, 2001, the unpaid
principal amount of the Notes of each Series shall bear interest
(A) at all times after January 31, 2001 and until (and
including) the maturity date thereof (whether such maturity is
scheduled or occurs by reason of acceleration or otherwise) at a
rate per annum equal to (x) the interest rate then applicable to
the Notes plus (y) one percent (1%), provided, however, that if
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the Company shall make the SBQ Asset Sale Prepayment after
January 31, 2001, then at all times after the date of the SBQ
Asset Sale Prepayment and until (and including) the maturity date
of the Notes, the one percent (1%) increase in the interest rate
applicable to the Notes referred to in clause (y) above shall be
reduced to a fifty one-hundredths percent (.50%) increase; and
(B) on any overdue principal (including any overdue
prepayment of principal) and Make-Whole Amount, if any, and (to
the extent permitted by applicable law) on any overdue
installment of interest, at a rate per annum equal to the lesser
of (1) the highest rate allowed by applicable law, and (2) the
interest rate then applicable to the Notes (after giving effect
to the adjustment required by clause (A) above) plus two percent
(2%).
(f) Notes. The term "Note" as used herein shall include each Note
delivered pursuant to this Agreement and the other Note Purchase Agreements
and each Note delivered in substitution or exchange for any such Note
pursuant to Section 7.2 or Section 7.3 of this Agreement or any of the
other Note Purchase Agreements, and shall be deemed, when reference is made
to a date prior to the Effective Date, to be a reference to the Original
Notes, and when reference is made to a date on or after the Effective Date,
to be a reference to the Amended Series A Notes, Amended Series B Notes and
Amended Series C Notes. The Amended Series A Notes, Amended Series B Notes
and Amended Series C Notes are referred to collectively as the "Amended
Notes."
1.3. The Closing.
(a) Purchase and Sale of Notes. On the Original Closing Date, the
Company agreed to sell to you and you agreed to purchase from the Company,
in accordance with the provisions hereof, the aggregate principal amount of
each Series of Notes set forth below your name on Annex 1 to the Original
Note Purchase Agreements (in the amount or amounts and of the Series set
forth therein) at one hundred percent (100%) of the principal amount
thereof.
(b) The Closing. The closing (the "Closing") of the Company's sale of
Notes occurred on December 15, 1995 (the date of the Closing herein
referred to as the "Original Closing Date"). At the Closing, the Company
delivered to you one or more Notes (as set forth below your name on Annex 1
to the Original Note Purchase Agreements), in the Series and denominations
indicated on Annex 1 to the Original Note Purchase Agreements, in the
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aggregate principal amount of your purchase, dated the Original Closing
Date and payable to you or payable as indicated on Annex 1 hereto, against
payment by federal funds wire transfer in immediately available funds of
the purchase price thereof, as directed by the Company on Annex 2 hereto.
1.4. Purchase for Investment.
(a) Purchase for Investment. On the Original Closing Date, you
represented to the Company that you were purchasing the Notes listed on
Annex 1 to the Original Note Purchase Agreements below your name for your
own account for investment and with no present intention of distributing
the Notes or any part thereof, but without prejudice to your right at all
times to:
(i) sell or otherwise dispose of all or any part of the Notes
under a registration statement filed under the Securities Act, or in a
transaction exempt from the registration requirements of the
Securities Act; and
(ii) have control over the disposition of all of your assets to
the fullest extent required by any applicable insurance law.
It is understood that when the Company made the representations set out in
Section 2.14(a) hereof and Section 2.15 hereof on the Original Closing
Date, the Company was relying, to the extent applicable, upon your
representation as aforesaid.
(b) ERISA. On the Original Closing Date, you represented that:
(i) you were acquiring the Notes for your own account with funds
from your general account assets or from assets of one or more
segments of such general account, as the case may be, and that, solely
for purposes of determining whether such acquisition is a "prohibited
transaction" (as provided for in section 406 of ERISA or section 4975
of the IRC) and in reliance on the representations of the Company set
forth in Section 2.11(c)(ii) to the Original Note Purchase Agreement
and the related disclosure of "employee benefit plans" set forth in
Part 2.11(c)(ii) of Annex 3 to the Original Note Purchase Agreement,
you have met all requirements for an exemption under DOL Prohibited
Transaction Exemption 95-60 (60 FR 35925, July 12, 1995) in respect of
such "employee benefit plans"; or
(ii) if any part of the funds being used by you to purchase the
Notes came from assets of an employee benefit plan (as defined in
section 3 of ERISA) or a plan (as defined in section 4975(e)(1) of the
IRC), that:
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(A) if such funds are attributable to a "separate account"
(as defined in section 3 of ERISA), then
(1) all requirements for an exemption under DOL
Prohibited Transaction Exemption 90-1, issued January 29,
1990 were met with respect to the use of such funds to
purchase the Notes, or
(2) the employee benefit plans with an interest in such
separate account had been identified in a writing delivered
by you to the Company;
(B) if such funds were attributable to a "separate account"
(as defined in section 3 of ERISA) that was maintained solely in
connection with fixed contracted obligations of an insurance
company, any amounts payable, or credited, to any employee
benefit plan having an interest in such account and to any
participant or beneficiary of such plan (including an annuitant)
were not affected in any manner by the investment performance of
the separate account; or
(C) if such funds were attributable to an "investment fund"
managed by a "qualified plan asset manager" (as such terms are
defined in Part V of DOL Prohibited Transaction Exemption 84-14,
issued March 13, 1984), all requirements for an exemption under
such Exemption are met with respect to the use of such funds to
purchase the Notes; or
(iii) such employee benefit plan was excluded from the
provisions of section 406 of ERISA by virtue of section 4(b) of ERISA.
1.5. Expenses.
(a) Generally. Whether or not the transactions contemplated hereby
are consummated, the Company will promptly (and in any event within thirty
(30) days of receiving any statement or invoice therefor) pay all fees,
expenses and costs (including reasonable attorneys' fees of a special
counsel and, if reasonably required, local or other counsel) incurred by
you and each other holder of a Note in connection with such transactions
and in connection with any amendments, waivers or consents under or in
respect of this Agreement or the Notes (whether or not such amendment,
waiver or consent becomes effective), including, but not limited to:
(i) the reasonable costs and expenses incurred in enforcing or
defending (or determining whether or how to enforce or defend) any
rights under this Agreement, the Notes or any other Financing
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Document or in responding to any subpoena or other legal process or
informal investigative demand issued in connection this Agreement, the
Notes or any other Financing Document, or by reason of being a holder
of any Note,
(ii) the reasonable fees, costs and expenses, including
reasonable attorneys' and reasonable financial advisors' fees, costs
and expenses incurred in connection with the insolvency or bankruptcy
of the Company or any Subsidiary or in connection with any work-out or
restructuring of the transactions contemplated hereby and by the
Notes, and
(iii) the reasonable costs and expenses (including travel
expenses) incurred in connection with the review, evaluation,
negotiation, analysis, due diligence investigation or other activity
related to any of the Financing Documents and the holders' and the
Collateral Agent's rights and remedies thereunder (including any such
activity occurring during any work-out or restructuring of the
transactions contemplated hereby and by the Notes or during a
bankruptcy, insolvency, reorganization or similar proceeding).
(b) Counsel. Without limiting the generality of the foregoing, it is
agreed and understood that the Company will pay, contemporaneously with the
execution and delivery of the Waiver and Second Amendment on the Effective
Date, each statement for reasonable fees and disbursements of your special
counsel presented in connection with such execution and delivery and the
Company will also pay, upon receipt of any statement thereof, each
additional statement for reasonable fees and disbursements of your special
counsel rendered after the Effective Date in connection with the Waiver and
Second Amendment.
(c) Broker's Fees. The Company agrees to indemnify and hold you
harmless against any and all fees, expenses and costs of any broker or
investment banker retained by the Company, if any, incurred in connection
with the issuance and delivery of the Amended Notes, the execution and
delivery of the Waiver and Second Amendment, or the transactions
contemplated thereby.
(d) Survival. The obligations of the Company under this Section 1.5
shall survive the payment or prepayment of the Notes and the termination
hereof.
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2. WARRANTIES AND REPRESENTATIONS
To induce the Purchasers to enter into the Original Note Purchase
Agreements and to purchase the Original Notes, the Company warranted and
represented, as of the Original Closing Date, as set forth in this Section 2.
The following representations and warranties are historical in nature and
included in this Agreement as a matter of convenience only. All such
representations and warranties and related disclosure schedules were made only
as of the Original Closing Date and the Company makes no representation or
warranty in this Agreement as to whether such representations and warranties
were true on the Original Closing Date or at any time thereafter. Solely for
purposes of this Section 2 references to "this Agreement," "hereto," "hereof,"
and terms of similar import are to the Original Note Purchase Agreements.
2.1. Nature of Business.
Except as set forth in Part 2.1 of Annex 3 hereto, the Private Placement
Memorandum, dated June 1995 and prepared by Nationsbanc Capital Markets, Inc.
(together with all exhibits and annexes thereto, the "Placement Memorandum") (a
copy of which previously has been delivered to you), correctly describes the
general nature of the business and principal Properties of the Company and the
Subsidiaries as of the Original Closing Date.
2.2. Financial Statements; Debt; Material Adverse Change.
(a) Financial Statements. The Company has delivered to you the
consolidated balance sheets of the Company and its consolidated
subsidiaries as of June 30 in the years 1990, 1991, 1992, 1993, 1994 and
1995 and the related consolidated statements of income, changes in
shareholders' equity and cash flows for the fiscal years ended on such
dates, all accompanied by opinions thereon by Ernst & Young, independent
certified public accountants. Such financial statements have been prepared
in accordance with generally accepted accounting principles consistently
applied, and present fairly, in all material respects, the consolidated
financial position of the Company and its consolidated subsidiaries as of
such dates and the results of their operations and cash flows for such
periods. All such financial statements include the accounts of all
subsidiaries of the Company for the respective periods during which a
subsidiary relationship has existed. Except as set forth in Part 2.2(a) of
Annex 3 hereto, all Restricted Subsidiaries were subsidiaries of the
Company during all of the periods covered by such financial statements.
(b) Indebtedness. Part 2.2(b) of Annex 3 hereto correctly lists all
outstanding Indebtedness of the Company and the Subsidiaries (showing which
portion is classified as current under GAAP) as of the Original Closing
Date.
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(c) Material Adverse Change. Since June 30, 1995, there has been no
change in the business, prospects, profits, Properties or condition
(financial or otherwise) of the Company or any of the Subsidiaries except
changes in the ordinary course of business that, in the aggregate for all
such changes, could not reasonably be expected to have a Material Adverse
Effect.
2.3. Subsidiaries and Affiliates.
Part 2.3 of Annex 3 hereto states:
(a) the name of each Subsidiary (indicating which Subsidiaries are
Restricted Subsidiaries), its jurisdiction of incorporation and the
percentage of its Voting Stock owned by the Company and each other
Subsidiary; and
(b) the name of each Affiliate that is a corporation, partnership or
joint venture (other than Subsidiaries) and the nature of the affiliation.
Each of the Company and the Subsidiaries has good and marketable title to all of
the shares it purports to own of the stock of each Subsidiary, free and clear in
each case of any Lien. All such shares have been duly issued and are fully paid
and nonassessable.
2.4. Pending Litigation.
There are no proceedings, actions or investigations pending or, to the
knowledge of the Company, threatened against or affecting the Company or any
Subsidiary in any court or before any Governmental Authority or arbitration
board or tribunal that, in the aggregate for all such proceedings, actions and
investigations, could reasonably be expected to have a Material Adverse Effect.
Neither the Company nor any Subsidiary is in default with respect to any
judgment, order, writ, injunction, or decree of any court, Governmental
Authority or arbitration board or tribunal that, in the aggregate for all such
defaults, could reasonably be expected to have a Material Adverse Effect.
2.5. Title to Properties.
(a) Each of the Company and the Subsidiaries has good and marketable
title to all of the real Property, and good title to all of the other
Property, reflected in the most recent balance sheet referred to in Section
2.2(a) hereof (except as sold or otherwise disposed of in the ordinary
course of business), except for such failures to have such good and
marketable title as are immaterial to such financial statements and that,
in the aggregate for all such failures, could not reasonably be expected to
have a Material Adverse Effect. All such Property is free from Liens not
permitted by Section 8.9 of the Original Note Purchase Agreements.
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(b) Each lease of real Property in the name or for the benefit of the
Company or any Subsidiary is valid and subsisting and in full force and
effect and good standing, except for such failures to be valid and
subsisting and in full force and effect and good standing that, in the
aggregate, could not reasonably be expected to have a Material Adverse
Effect.
(c) Each of the Company and the Subsidiaries owns, possesses or has
the right to use all of the patents, trademarks, service marks, trade
names, copyrights and licenses, and rights with respect thereto, necessary
for the present and currently planned future conduct of its business,
without any known conflict with the rights of others, except for such
failures to own, possess, or have the right to use, that, in the aggregate
for all such failures, could not reasonably be expected to have a Material
Adverse Effect.
2.6. Taxes.
(a) Returns Filed; Taxes Paid. All tax returns required to be filed
by each of the Company and each Subsidiary and any other Person with which
the Company or any Subsidiary files or has filed a consolidated return in
any jurisdiction have in fact been filed on a timely basis, and all taxes,
assessments, fees and other governmental charges upon each of the Company,
such Subsidiary and any such Person, and upon any of their respective
Properties, income or franchises, that are due and payable have been paid.
Except as disclosed in Part 2.6(a) of Annex 3 hereto, the Company does not
know of any proposed additional tax assessment against it or any such
Person. All liabilities of the Company and such Persons with respect to
federal income taxes have been finally determined except for the fiscal
years 1989 through 1995, the only years not closed by the completion of an
audit or the expiration of the statute of limitations.
(b) Book Provisions Adequate. The amount of the liability for taxes
reflected in the consolidated balance sheet of the Company and its
consolidated subsidiaries as of June 30, 1995 referred to in Section 2.2(a)
hereof is an adequate provision for taxes (including, without limitation,
any payment due pursuant to any tax sharing agreement) as are or may become
payable by any one or more of the Company and its consolidated subsidiaries
in respect of all tax periods ending on or prior to such date.
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2.7. Full Disclosure.
The financial statements referred to in Section 2.2(a) hereof do not, nor
does this Agreement, the Placement Memorandum or any written statement furnished
by or on behalf of the Company to you in connection with the negotiation of the
sale of the Original Notes, contain any untrue statement of a material fact or
omit a material fact necessary to make the statements contained therein or
herein not misleading. There is no fact that the Company has not disclosed to
you in writing that has had or, so far as the Company can now reasonably
foresee, could have a Material Adverse Effect.
2.8. Corporate Organization and Authority.
Each of the Company and the Subsidiaries:
(a) is a corporation duly incorporated, validly existing and in good
standing under the laws of its jurisdiction of incorporation;
(b) has all legal and corporate power and authority necessary to own
and operate its Properties and to carry on its business as now conducted
and as presently proposed to be conducted;
(c) has all licenses, certificates, permits, franchises and other
governmental authorizations necessary to own and operate its Properties and
to carry on its business as now conducted and as presently proposed to be
conducted, except where the failure to have such licenses, certificates and
permits, in the aggregate for all such failures, could not reasonably be
expected to have a Material Adverse Effect; and
(d) has duly qualified or has been duly licensed, and is authorized to
do business and is in good standing, as a foreign corporation, in each
state where the failure to be so qualified or licensed and authorized and
in good standing could reasonably be expected to have a Material Adverse
Effect.
2.9. Restrictions on Company and Subsidiaries.
Neither the Company nor any Subsidiary:
(a) is a party to any contract or agreement, or subject to any charter
or other corporate restriction that, in the aggregate for all such
contracts, agreements, charter and corporate restrictions, could reasonably
be expected to have a Material Adverse Effect;
(b) is a party to any contract or agreement that restricts the right
or ability of such corporation to incur Debt, other than this Agreement and
the agreements listed in Part 2.9 of Annex 3 hereto, the terms of none of
which is
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violated by the issuance of the Original Notes or the execution and
delivery of, or compliance with, this Agreement by the Company; and
(c) has agreed or consented to cause or permit in the future (upon the
happening of a contingency or otherwise) any of its Property, whether now
owned or hereafter acquired, to be subject to a Lien not permitted by
Section 8.9 hereof.
2.10. Compliance with Law.
Neither the Company nor any Subsidiary is in violation of any law,
ordinance, governmental rule or regulation to which it is subject, which
violations, in the aggregate, could reasonably be expected to have a Material
Adverse Effect.
2.11. ERISA.
(a) Relationship of Vested Benefits to Pension Plan Assets. The
present value of all benefits, determined as of the most recent valuation
date for such benefits as provided in Section 8.11(c) hereof, vested under
each Pension Plan does not exceed the value of the assets of such Pension
Plan allocable to such vested benefits, determined as of such date as
provided in Section 8.11(c) hereof.
(b) ERISA Requirements. Each of the Company and the ERISA Affiliates:
(i) has fulfilled all obligations under the minimum funding
standards of ERISA and the IRC with respect to each Pension Plan that
is not a Multiemployer Plan;
(ii) has satisfied all respective contribution obligations in
respect of each Multiemployer Plan;
(iii) is in compliance in all material respects with all other
applicable provisions of ERISA and the IRC with respect to each
Pension Plan and each Multiemployer Plan; and
(iv) has not incurred any liability under Title IV of ERISA to
the PBGC (other than in respect of required insurance premiums, all of
which that are due having been paid), with respect to any Pension
Plan, any Multiemployer Plan or any trust established thereunder.
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No Pension Plan, or trust created thereunder, has incurred any "accumulated
funding deficiency" (as defined in section 302 of ERISA), whether or not
waived, as of the last day of the most recently ended plan year of such
Pension Plan.
(c) Prohibited Transactions.
(i) The purchase of the Original Notes by you will not constitute
a "prohibited transaction" (as defined in section 406 of ERISA or
section 4975 of the IRC) that could subject any Person to the penalty
or tax on prohibited transactions imposed by section 502 of ERISA or
section 4975 of the IRC, and neither the Company or any ERISA
Affiliate, nor any "employee benefit plan" (as hereinafter defined) of
the Company or any ERISA Affiliate or any trust created thereunder or
any trustee or administrator thereof, has engaged in any "prohibited
transaction" that could subject any such Person, or any other party
dealing with such employee benefit plan or trust, to such penalty or
tax. The representation by the Company in the preceding sentence is
made in reliance upon and subject to the accuracy of the
representations in Section 1.3(b) hereof as to the source of funds
used by you.
(ii) Part 2.11(c)(ii) of Annex 3 hereto completely lists all
ERISA Affiliates and all employee benefit plans with respect to which
the Company or any "affiliate" (as hereinafter defined) is a "party-
in-interest" (as hereinafter defined) or in respect of which the
Original Notes could constitute an "employer security" (as hereinafter
defined).
As used in this Section 2.11(c), the terms "employee benefit plan" and
"party-in-interest" have the meanings specified in section 3 of ERISA,
"affiliate" has the meaning specified in section 407(d) of ERISA and
section V of DOL Prohibited Transaction Exemption 95-60 (60 FR 35925, July
12, 1995) and "employer security" has the meaning specified in section
407(d) of ERISA.
(d) Reportable Events. No Pension Plan or trust created thereunder
has been terminated, and there have been no "reportable events" (as defined
in section 4043 of ERISA), with respect to any Pension Plan or trust
created thereunder or with respect to any Multiemployer Plan, which
reportable event or events will or could result in the termination of such
Pension Plan or Multiemployer Plan and give rise to a liability of the
Company or any ERISA Affiliate in respect thereof.
(e) Multiemployer Plans. Except as set forth in Part 2.11(e) of Annex
3 hereto, neither the Company nor any ERISA Affiliate is an employer
required to contribute to any Multiemployer Plan. Neither the Company nor
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any ERISA Affiliate has incurred, or is expected to incur, any withdrawal
liability (that has not previously been fully satisfied) under ERISA with
respect to any Multiemployer Plan. None of the Multiemployer Plans
referred to in such Part of Annex 3 hereto have been terminated under
section 4041A of ERISA, have been placed in reorganization status under
Title IV of ERISA or have been determined to be "insolvent" (as defined in
section 4245 of ERISA).
(f) Multiple Employer Pension Plans. Except as set forth in Part
2.11(f) of Annex 3 hereto, neither the Company nor any ERISA Affiliate is a
"contributing sponsor" (as defined in section 4001 of ERISA) in any
Multiple Employer Pension Plan and neither the Company nor any ERISA
Affiliate has incurred (without fully satisfying the same), or reasonably
expects to incur, withdrawal liability in respect of any such Multiple
Employer Pension Plan listed in such Part of Annex 3 hereto, which
withdrawal liability could have a Material Adverse Effect.
(g) Foreign Pension Plan. No Foreign Pension Plans presently exist or
existed in the past.
2.12. Certain Laws.
(a) Investment Company Act. Neither the Company nor any Subsidiary
is, or is directly or indirectly controlled by, or acting on behalf of any
Person that is, an "investment company" within the meaning of the
Investment Company Act of 1940, as amended.
(b) Holding Company Status. Neither the Company nor any Subsidiary is
a "holding company" or an "affiliate" of a "holding company," or a
"subsidiary company" of a "holding company," or a "public utility" within
the meaning of the Public Utility Holding Company Act of 1935, as amended.
2.13. Environmental Compliance.
Except as set forth in Part 2.13 of Annex 3 hereto:
(a) Compliance - each of the Company and the Subsidiaries is in
compliance with all Environmental Protection Laws in effect in each
jurisdiction where it is presently doing business, and in which the failure
so to comply could be reasonably expected to have a Material Adverse
Effect;
(b) Liability - neither the Company nor any of the Subsidiaries is
subject to any liability under any Environmental Protection Laws that, in
the aggregate, could reasonably be expected to have a Material Adverse
Effect; and
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(c) Notices - neither the Company nor any Subsidiary has received any
(i) notice from any Governmental Authority by which any of its
present or previously-owned or leased real Properties has been
designated, listed, or identified in any manner by any Governmental
Authority charged with administering or enforcing any Environmental
Protection Law as a Hazardous Substance disposal or removal site,
"Super Fund" clean-up site, or candidate for removal or closure
pursuant to any Environmental Protection Law,
(ii) notice of any Lien arising under or in connection with any
Environmental Protection Law that has attached to any revenues of, or
to, any of its owned or leased real Properties, or
(iii) summons, citation, notice, directive, letter, or other
communication, written or oral, from any Governmental Authority
concerning any intentional or unintentional action or omission by the
Company or such Subsidiary in connection with its ownership or leasing
of any real Property resulting in the releasing, spilling, leaking,
pumping, pouring, emitting, emptying, dumping, or otherwise disposing
of any Hazardous Substance into the environment resulting in any
material violation of any Environmental Protection Law,
in each case where the effect of the matters that are the subject of any
such notice, summons, citation, directive, letter or other communication
could reasonably be expected to have a Material Adverse Effect.
2.14. Sale is Legal and Authorized; Obligations are Enforceable.
(a) Sale is Legal and Authorized. Each of the issuance, sale and
delivery of the Original Notes by the Company, the execution and delivery
hereof by the Company and compliance by the Company with all of the
provisions hereof and of the Original Notes:
(i) is within the corporate powers of the Company; and
(ii) is legal and does not conflict with, result in any breach in
any of the provisions of, constitute a default under, or result in the
creation of any Lien upon any Property of the Company or any
Subsidiary under the provisions of, any agreement, charter instrument,
bylaw or other instrument to which it is a party or by which it or any
of its Property may be bound.
(b) Obligations are Enforceable. Each of this Agreement and the
Original Notes has been duly authorized by all necessary action on the
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part of the Company, has been executed and delivered by duly authorized
officers of the Company and constitutes a legal, valid and binding
obligation of the Company, enforceable in accordance with its terms, except
that the enforceability hereof and of the Original Notes may be:
(i) limited by applicable bankruptcy, reorganization,
arrangement, insolvency, moratorium or other similar laws affecting
the enforceability of creditors' rights generally; and
(ii) subject to the availability of equitable remedies.
2.15. Governmental Consent.
Neither the nature of the Company or any Subsidiary, or of any of their
respective businesses or Properties, nor any relationship between the Company or
any Subsidiary and any other Person, nor any circumstance in connection with the
offer, issuance, sale or delivery of the Original Notes and the execution and
delivery of this Agreement, is such as to require a consent, approval or
authorization of, or filing, registration or qualification with, any
Governmental Authority on the part of the Company as a condition to the
execution and delivery of this Agreement or the offer, issuance, sale or
delivery of the Original Notes.
2.16. Private Offering.
Neither the Company nor NationsBanc Capital Markets, Inc. (the only Person
authorized or employed by the Company as agent, broker, dealer or otherwise in
connection with the offering or sale of the Original Notes or any similar
Security of the Company, other than employees of the Company) has offered any of
the Original Notes or any similar Security of the Company for sale to, or
solicited offers to buy any thereof from, or otherwise approached or negotiated
with respect thereto with, any prospective purchaser, other than you and one
hundred twenty-five (125) other institutional investors, each of whom was
offered all or a portion of the Original Notes at private sale for investment.
2.17. No Defaults.
(a) The Original Notes. No event has occurred and no condition exists
that, upon the issuance of the Original Notes and the execution and
delivery of this Agreement, would constitute a Default or an Event of
Default.
(b) Charter Instrument, Other Agreements. Neither the Company nor any
Subsidiary is in violation in any respect of any term of any charter
instrument or bylaw and neither the Company nor any Subsidiary is in
violation in any respect of any term in any agreement or other instrument
to which it is a party or by which it or any of its Property may be bound,
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except for violations which, in the aggregate for all such violations,
could not reasonably be expected to have a Material Adverse Effect.
2.18. Use of Proceeds.
(a) Use of Proceeds. The Company will apply the proceeds from the
sale of the Original Notes in the manner specified in Part 2.18(a) of Annex
3 hereto.
(b) Margin Securities. None of the transactions contemplated herein
and in the Original Notes (including, without limitation, the use of the
proceeds from the sale of the Original Notes) violates, will violate or
will result in a violation of section 7 of the Securities Exchange Act of
1934, as amended, or any regulations issued pursuant thereto, including,
without limitation, Regulations G, T and X of the Board of Governors of the
Federal Reserve System, 12 C.F.R., Chapter II. Neither the Company nor any
Subsidiary owns, or with the proceeds of the sale of the Original Notes
intends to own, carry or purchase, or refinance borrowings that were used
to own, carry or purchase, any Margin Security, including Margin Securities
originally issued by the Company or any Subsidiary. The obligations of the
Company under this Agreement and the Original Notes are not and will not be
secured by any Margin Security, and no Original Notes are being sold on the
basis of any such collateral.
(c) Absence of Foreign or Enemy Status. The Company is not an "enemy"
or an "ally of the enemy" within the meaning of section 2 of the Trading
with the Enemy Act (50 U.S.C. App. (S)(S) 1 et seq.), as amended. The
Company is not in violation of, and neither the issuance and sale of the
Original Notes by the Company nor its use of the proceeds thereof as
contemplated by this Agreement will violate, the Trading with the Enemy
Act, as amended, or the International Emergency Economic Powers Act, as
amended, or any executive orders, proclamations or regulations issued
pursuant thereto including, without limitation, regulations administered by
the Office of Foreign Asset Control of the Department of the Treasury (31
C.F.R., Subtitle B, Chapter V).
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3. INTENTIONALLY OMITTED
4. HOLDERS' SPECIAL RIGHTS
4.1. Direct Payment.
Notwithstanding anything to the contrary contained herein or in the Amended
Notes, but subject to the terms of the Intercreditor Agreement, the Company will
pay, or will direct the Collateral Agent to pay, all amounts payable with
respect to each Amended Note held by an Institutional Investor (without any
presentment of such Amended Notes and without any notation of such payment being
made thereon) by crediting (prior to 11:00 a.m. local time of such Institutional
Investor's bank), by federal funds bank wire transfer, the account of such
Institutional Investor in any bank in the United States of America as may be
designated in writing by such Institutional Investor, or in such other manner as
may be reasonably directed or to such other address in the United States of
America as may be reasonably designated in writing by such Institutional
Investor. Your address on Annex 1 hereto will be deemed to constitute notice,
direction or designation (as appropriate) to the Company with respect to direct
payments as aforesaid. In all other cases, all amounts payable with respect to
each Amended Note will be made by check mailed and addressed to the registered
holder of each Amended Note at the address shown in the register maintained by
the Company pursuant to Section 8.3 hereof. Each holder of Amended Notes agrees
that, in the event it shall sell or transfer any Amended Note, it shall:
(a) prior to the delivery of such Amended Note, make a notation
thereon of all principal, if any, prepaid on such Amended Note and shall
also note thereon the date to which interest shall have been paid on such
Amended Note; and
(b) promptly notify the Company of the name and address of the
transferee of any such Amended Note so transferred and the effective date
of such transfer.
4.2. Delivery Expenses.
If any holder of Amended Notes surrenders any Amended Note to the Company
pursuant hereto, the Company will pay the cost of delivering to or from such
holder's home office or custodian bank from or to the Company, insured to the
reasonable satisfaction of such holder, the surrendered Amended Note and any
Amended Note issued in substitution or replacement for the surrendered Amended
Note.
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4.3. Issuance Taxes.
The Company will pay all taxes (other than any income taxes imposed upon
any Purchaser) arising in connection with the issuance and sale of the Amended
Notes or in connection with any modification of this Agreement and the Amended
Notes, and will save each holder of Amended Notes harmless without limitation as
to time against any and all liabilities with respect to all such taxes. The
obligations of the Company under this Section 4.3 shall survive the payment or
prepayment of the Amended Notes and the termination hereof.
5. PREPAYMENTS
5.1. Required Scheduled Prepayments.
(a) Amended Series A Notes. There shall be no required scheduled
prepayments in respect of the Amended Series A Notes. The entire principal
amount of the Amended Series A Notes remaining outstanding on December 15,
2002, together with accrued unpaid interest thereon, shall be due and
payable on such date.
(b) Amended Series B Notes. The Company shall prepay, and there shall
become due and payable, Three Million Five Hundred Thousand Dollars
($3,500,000) in aggregate principal amount of the Amended Series B Notes on
December 15 in each year beginning on December 15, 2002 and ending on
December 15, 2004, inclusive. Each such prepayment shall be at one hundred
percent (100%) of the principal amount prepaid, together with interest
accrued thereon to the date of prepayment. The entire principal amount of
the Amended Series B Notes remaining outstanding on December 15, 2005,
together with accrued unpaid interest thereon, shall be due and payable on
such date.
(c) Amended Series C Notes. There shall be no required scheduled
prepayments in respect of the Amended Series C Notes. The entire principal
amount of the Amended Series C Notes remaining outstanding on December 15,
2005, together with accrued unpaid interest thereon, shall be due and
payable on such date.
5.2. Other Prepayments.
(a) Optional Prepayments. The Company may at any time after the
Original Closing Date prepay (without distinguishing among the different
Series) the principal amount of the Amended Notes in part, in integral
multiples of Five Million Dollars ($5,000,000), or in whole, in each case
together with:
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(i) an amount equal to the Make-Whole Amount at such time in
respect of the principal amount of each Series of the Amended Notes
being so prepaid, and
(ii) interest on such principal amount then being prepaid accrued
to the prepayment date.
(b) Special Prepayments. In any event wherein the Company requests
from all of the holders of the Amended Notes (pursuant to Section 12.5
hereof) an amendment to, or waiver of (in each case setting forth in such
request detailed information concerning the transaction or condition for
which the amendment or waiver is requested), the Company's obligations
hereunder that are permitted by the provisions of Section 12.5 to be
amended or waived with consent of the Majority Holders, and the Majority
Holders do not, within sixty (60) days of the date on which such request is
made, grant their consent to the proposed amendment or waiver, the Company
may prepay Amended Notes as set forth in this Section 5.2(b), provided that
all of the following conditions are met:
(i) the Company elects to prepay all, but not less than all, of
the Amended Notes held by each holder of Amended Notes that shall have
not consented to the proposed amendment or waiver; and
(ii) the Company, within forty-five (45) days of the expiration
of such sixty (60) day period contemporaneously prepays each holder of
Amended Notes who has not consented to the proposed amendment or
waiver in an amount equal to the aggregate principal amount of all
Amended Notes of each Series held by such holder, together with
interest accrued and unpaid on such principal amount and the Make-
Whole Amount in respect of such principal amount of Amended Notes of
each such Series.
(c) Cash Flow Sweep Prepayments. In the event that any Secured Party
acquires custody, control or possession of any payment constituting a Post-
Default Cash Sweep Payment (as defined in the Intercreditor Agreement),
such amount shall be paid over to the Collateral Agent for distribution as
provided in Section 4.1(b) of the Intercreditor Agreement. Each amount
received from the Collateral Agent as contemplated by this Section 5.2(c)
in respect of the Amended Notes shall constitute an amount paid in respect
of a prepayment of the Amended Notes which includes a principal amount,
together with interest accrued thereon to the date of prepayment and the
Make-Whole Amount in respect of such principal amount of Amended Notes of
each such Series.
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(d) Disposition Prepayments. If the Collateral Agent receives any
cash amounts as payments under the Security Documents or as proceeds of or
otherwise constituting Collateral (including, without limitation, net
proceeds received in connection with an Acceptable SBQ Asset Sale or any
other Disposition (as defined in the Intercreditor Agreement as in effect
on the Effective Date)), as more particularly described in Section 4.1(b)
of the Intercreditor Agreement, such amounts shall be distributed as
provided in Section 4.1(b) of the Intercreditor Agreement. Each amount
received from the Collateral Agent as contemplated by this Section 5.2(d)
in respect of the Amended Notes shall constitute an amount paid in respect
of a prepayment of the Amended Notes which includes a principal amount,
together with interest accrued thereon to the date of prepayment and the
Make-Whole Amount in respect of such principal amount of Amended Notes of
each such Series.
(e) Equity Issuance Prepayments. In the event of any Equity Issuance
by the Company, sixty percent (60%) of the Net Proceeds of such Equity
Issuance shall be promptly paid over to the Collateral Agent for
distribution as provided in Section 4.1(b) of the Intercreditor Agreement.
Each amount received from the Collateral Agent as contemplated by this
Section 5.2(e) in respect of the Amended Notes shall constitute an amount
paid in respect of a prepayment of the Amended Notes which includes a
principal amount, together with interest accrued thereon to the date of
prepayment and the Make-Whole Amount in respect of such principal amount of
Amended Notes of each such Series.
(f) Effect of Prepayments. Each prepayment of principal of the
Amended Notes pursuant to Section 5.2(a), Section 5.2(c), Section 5.2(d)
and Section 5.2(e) hereof shall be applied first, to the principal amount
of the Amended Notes of each Series due on the maturity date of the Amended
Notes of such Series and second, in the case of the Amended Series B Notes,
to the mandatory principal prepayments applicable to the Amended Series B
Notes, as set forth in Section 5.1 hereof, in the inverse order of the
maturity thereof. Each prepayment of principal of the Amended Notes of any
Series pursuant to Section 5.2(b) and each purchase of Amended Notes
pursuant to Section 8.7 hereof shall be applied ratably to the principal
amount of the Amended Notes of such Series due on the maturity date of the
Amended Notes of such Series and, in the case of the Amended Series B
Notes, to each remaining mandatory principal prepayment required by Section
5.1 hereof.
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5.3. Notice of Optional Prepayment.
The Company will give notice of each prepayment of the Amended Notes made
pursuant to the provisions of Section 5.2 to each holder of Amended Notes (in
the case of prepayments made pursuant to Section 5.2(a), Section 5.2(c), Section
5.2(d) and Section 5.2(e)) and to each holder of Amended Notes to be prepaid (in
the case of prepayments made pursuant to Section 5.2(b)), in each case not less
than thirty (30) days or more than sixty (60) days before the date fixed for
prepayment, specifying:
(a) such date;
(b) the Section hereof under which the prepayment is to be made;
(c) the principal amount of each Amended Note to be prepaid on such
date;
(d) the interest to be paid on each such Amended Note, accrued to the
date fixed for payment; and
(e) a reasonably detailed calculation of an estimated Make-Whole
Amount, if any (calculated as if the date of such notice was the date of
prepayment), that would be due in connection with such prepayment.
Such notice of prepayment shall also certify all facts that are conditions
precedent to any such prepayment. Further, with respect to any prepayment made
pursuant to Section 5.2(c), 5.2(d) or 5.2(e) hereof, the notice required in the
first sentence of this Section 5.3 shall be given within the time period
specified to the extent practicable given the timing of the event or events
triggering the obligations of the Company to make such prepayment. Notice of
prepayment having been so given, the aggregate principal amount of the Amended
Notes specified in such notice, together with the Make-Whole Amount, if any, and
accrued interest thereon shall become due and payable on the specified
prepayment date. Two (2) Business Days prior to the making of any such
prepayment, the Company shall deliver to each holder of Amended Notes to be
prepaid a certificate of the Chairman, the Vice Chairman, a Vice President, the
Treasurer or the President of the Company specifying the calculation of such
Make-Whole Amount as of the specified prepayment date, accompanied by a copy of
any applicable documentation used in connection with determining the Make-Whole
Discount Rate in respect of such prepayment.
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5.4. Partial Prepayment Pro Rata.
If at the time any required or optional prepayment under Section 5.1 or
Section 5.2(a), Section 5.2(c), Section 5.2(d) or Section 5.2(e) hereof is due
there is more than one Amended Note outstanding, the aggregate principal amount
of each required or optional partial prepayment of the Amended Notes shall be
allocated among the holders of the Amended Notes at the time outstanding in
proportion (without distinguishing among the different Series), as nearly as
practicable, to the respective unpaid principal amounts of the Amended Notes
then outstanding, with adjustments, to the extent practicable, to equalize for
any prior prepayments not in such proportion.
5.5. Notation of Amended Notes on Prepayment.
Upon any partial prepayment of an Amended Note, such Amended Note may, at
the option of the holder thereof, be
(a) surrendered to the Company pursuant to Section 7.2 hereof in
exchange for a new Amended Note in a principal amount equal to the
principal amount remaining unpaid on the surrendered Amended Note,
(b) made available to the Company for notation thereon of the portion
of the principal so prepaid, or
(c) marked by such holder with a notation thereon of the portion of
the principal so prepaid.
In case the entire principal amount of any Amended Note is prepaid, such Amended
Note shall be surrendered to the Company for cancellation and shall not be
reissued, and no Amended Note shall be issued in lieu of the prepaid principal
amount of any Amended Note.
5.6. No Other Optional Prepayments.
Except as provided in Section 5.2 hereof or in accordance with an offer
made in compliance with Section 6 or Section 8.7 hereof, the Company shall not
make any optional prepayment (whether directly or indirectly by purchase or
other acquisition) in respect of the Amended Notes.
6. CHANGE IN CONTROL PUT
6.1. Offer to Prepay upon Change in Control.
(a) Notice and Offer. In the event of either
(i) a Change in Control, or
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(ii) the obtaining of knowledge of a Control Event by the Company
(including, without limitation, via the receipt of notice of a Control
Event from any holder of Notes),
the Company will, within three (3) Business Days of the occurrence of
either of such events (or, in the case of any Change in Control the
consummation or finalization of which would involve any action of the
Company, at least thirty (30) days prior to such Change in Control), give
written notice of such Change in Control or Control Event to each holder of
Notes by registered mail and, simultaneously with the sending of such
written notice, send a copy of such notice to each such holder via an
overnight courier of national reputation. In the event of a Change in
Control, such written notice shall contain, and such written notice shall
constitute, an irrevocable offer to prepay all, but not less than all, the
Notes held by such holder on a date specified in such notice (the "Control
Prepayment Date") that is not less than thirty (30) days and not more than
sixty (60) days after the date of such notice. If the Control Prepayment
Date shall not be specified in such notice, the Control Prepayment Date
shall be the thirtieth (30th) day after the date of such holder's first
receipt of such notice. If the Company shall not have received a written
response to such notice from each holder of Notes within ten (10) days
after the date of posting of such notice to such holder of Notes, then the
Company shall immediately send a second written notice via an overnight
courier of national reputation to each such holder of Notes who shall have
not previously responded to the Company. In no event will the Company take
any action to consummate or finalize a Change in Control unless
contemporaneously with such action the Company prepays all Notes required
to be prepaid in accordance with Section 6.1(b) hereof.
(b) Acceptance and Payment. To accept such offered prepayment, a
holder of Notes shall cause a notice of such acceptance to be delivered to
the Company not later than fifteen (15) days after the date of receipt by
such holder of the latest written offer of such prepayment (it being
understood that the failure by a holder to respond to such written offer of
prepayment within such period of fifteen (15) days shall be deemed to
constitute a rejection of such offer, provided that such deemed rejection
shall not prejudice such holder's right to accept any subsequent offer).
If so accepted, such offered prepayment shall be due and payable on the
Control Prepayment Date. Such offered prepayment shall be made at one
hundred percent (100%) of the principal amount of such Notes, together with
any Make-Whole Amount as of the Control Prepayment Date with respect
thereto and interest on the Notes then being prepaid accrued to the Control
Prepayment Date. Two (2) Business Days prior to the making of any such
prepayment, the Company shall deliver to each holder of such Notes by
facsimile transmission a certificate of the Chairman, the Chief Executive
Officer, an Executive Vice President, a Vice President, the Treasurer or
the
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President of the Company specifying the details of the calculation of such
Make-Whole Amount as of the specified Control Prepayment Date, accompanied
by a copy of any applicable documentation used in connection with
determining the Make-Whole Discount Rate in respect of such prepayment.
(c) Officer's Certificate. Each offer to prepay the Notes pursuant to
this Section 6.1 shall be accompanied by a certificate, executed by the
Chairman, the Chief Executive Officer, an Executive Vice President, a Vice
President, the Treasurer or the President of the Company and dated the date
of such offer, specifying:
(i) the Control Prepayment Date;
(ii) the Section hereof under which such offer is made;
(iii) the principal amount of each Note offered to be prepaid;
(iv) the interest that would be due on each such Note offered to
be prepaid, accrued to the date fixed for payment;
(v) a reasonably detailed calculation of an estimated Make-Whole
Amount, if any (calculated as if the date of such notice was the date
of prepayment), that would be due in connection with such offered
prepayment;
(vi) that the conditions of this Section 6.1 have been fulfilled;
and
(vii) in reasonable detail, the nature and date or proposed date
of the Change in Control.
6.2. Effect of Prepayments.
Each prepayment of principal of the Notes of any Series pursuant to Section
6.1 shall be applied ratably to the principal amount of the Notes of such Series
due on the maturity date of the Notes of such Series and, in the case of the
Amended Series B Notes, to each remaining mandatory principal prepayment
required by Section 5.1 hereof.
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7. REGISTRATION; SUBSTITUTION OF NOTES
7.1. Registration of Notes.
The Company will cause to be kept at its office, maintained pursuant to
Section 8.3 hereof, a register for the registration and transfer of Notes. The
name and address of each holder of one or more Notes, the outstanding principal
amount and Series of each such Note, each transfer thereof and the name and
address of each transferee of one or more Notes shall be registered in the
register. The Person in whose name any Note shall be registered shall be deemed
and treated as the owner and holder thereof for all purposes hereof, and the
Company shall not be affected by any notice or knowledge to the contrary.
7.2. Exchange of Notes.
Upon surrender of any Note at the office of the Company maintained pursuant
to Section 8.3 hereof duly endorsed or accompanied by a written instrument of
transfer duly executed by the registered holder of such Note or its attorney
duly authorized in writing, the Company will execute and deliver, within five
(5) Business Days after such surrender, at the Company's expense (except as
provided below), new Notes in exchange therefor, of the same Series as such
surrendered Note, in denominations of at least One Hundred Thousand Dollars
($100,000) (except as may be necessary to reflect any principal amount not
evenly divisible by One Hundred Thousand Dollars ($100,000)), in an aggregate
principal amount equal to the unpaid principal amount of the surrendered Note.
Each such new Note shall be payable to such Person as such holder may request
and shall be substantially in the form of Exhibit A1, Exhibit A2 or Exhibit A3
hereto, as applicable. Each such new Note shall be dated and bear interest from
the date to which interest shall have been paid on the surrendered Note or dated
the date of the surrendered Note if no interest shall have been paid thereon.
The Company may require payment of a sum sufficient to cover any stamp tax or
governmental charge imposed in respect of any such transfer of Notes.
7.3. Replacement of Notes.
Upon receipt by the Company of evidence reasonably satisfactory to it of
the ownership of and the loss, theft, destruction or mutilation of any Note
(which evidence shall be, in the case of an Institutional Investor, notice from
such Institutional Investor (or of such Institutional Investor's nominee) of
such ownership and such loss, theft, destruction or mutilation) and
(a) in the case of loss, theft or destruction, of indemnity reasonably
satisfactory to it (provided that if the holder of such Note is an
Institutional Investor or a nominee of an Institutional Investor, such
Institutional Investor's own unsecured agreement of indemnity shall be
deemed to be satisfactory for such purpose), or
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(b) in the case of mutilation, upon surrender and cancellation
thereof,
the Company at its own expense will execute and deliver, within five (5)
Business Days after such receipt, in lieu thereof, a new Note, dated and bearing
interest from the date to which interest shall have been paid on such lost,
stolen, destroyed or mutilated Note or dated the date of such lost, stolen,
destroyed or mutilated Note if no interest shall have been paid thereon.
8. COMPANY BUSINESS COVENANTS
The Company covenants that on and after the Effective Date and so long as
any of the Notes shall be outstanding:
8.1. Payment of Taxes and Claims.
The Company will, and will cause each Subsidiary to, pay before they become
delinquent:
(a) all taxes, assessments and governmental charges or levies imposed
upon it or its Property; and
(b) all claims or demands of materialmen, mechanics, carriers,
warehousemen, landlords and other like Persons that, if unpaid, might
result in the creation of a Lien upon its Property;
provided, that items of the foregoing description need not be paid
(i) while being contested in good faith and by appropriate
proceedings as long as adequate book reserves have been established
and maintained and exist with respect thereto, and
(ii) so long as the title of the Company or the Subsidiary, as
the case may be, to, and its right to use, such Property, is not
materially adversely affected thereby.
8.2. Maintenance of Properties and Corporate Existence.
The Company will, and will cause each Subsidiary to:
(a) Property - maintain its Property in good condition for its
intended purpose, ordinary wear and tear excepted, and make all necessary
renewals, replacements, additions, betterments and improvements thereto;
(b) Insurance - maintain, with Acceptable Insurers, insurance with
respect to its Property and business against such casualties and
contingencies, of such types (including, without limitation, insurance with
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<PAGE>
respect to losses arising out of Property loss or damage, public liability,
business interruption, larceny, workers' compensation, embezzlement or
other criminal misappropriation) and in such amounts as is customary in the
case of corporations of established reputations engaged in the same or a
similar business and similarly situated, provided, however, that if an
insurer is an Acceptable Insurer at the beginning of any policy period, it
shall be deemed to remain an Acceptable Insurer for the balance of such
policy period;
(c) Financial Records - keep accurate books of records and accounts in
which full and correct entries shall be made of all its business
transactions and that will permit the provision of accurate and complete
financial statements in accordance with GAAP;
(d) Corporate Existence and Rights - do or cause to be done all things
necessary
(i) to preserve and keep in full force and effect its corporate
existence, rights (charter and statutory) and franchises, subject to
Section 8.18 hereof, except where the failure to do so could not
reasonably be expected to have a Material Adverse Effect, and
(ii) to maintain each Restricted Subsidiary as a Restricted
Subsidiary, except as otherwise permitted by Section 8.18 hereof; and
(e) Compliance with Law - not be in violation of any law, ordinance or
governmental rule or regulation to which it is subject (including, without
limitation, any Environmental Protection Law and OSHA) and not fail to
obtain any license, certificate, permit, franchise or other governmental
authorization necessary to the ownership of its Properties or to the
conduct of its business if such violation or failure to obtain could be
reasonably expected to have a Material Adverse Effect.
8.3. Payment of Notes and Maintenance of Office.
The Company will punctually pay, or cause to be paid, the principal of and
interest (and Make-Whole Amount, if any) on, the Notes, as and when the same
shall become due according to the terms hereof and of the Notes, and will
maintain an office at the address of the Company set forth in Section 12.1
hereof where notices, presentations and demands in respect hereof or the Notes
may be made upon it. Such office will be maintained at such address until such
time as the Company shall notify the holders of the Notes of any change of
location of such office, which will in any event be located within the United
States of America.
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8.4. ERISA.
(a) Compliance. The Company will, and will cause each ERISA Affiliate
to, at all times with respect to each Pension Plan, make timely payment of
contributions required to meet the minimum funding standard set forth in
ERISA or the IRC with respect thereto, and to comply with all other
applicable provisions of ERISA.
(b) Relationship of Vested Benefits to Pension Plan Assets. The
Company will not at any time permit the present value of all employee
benefits vested under each Pension Plan to exceed the assets of such
Pension Plan allocable to such vested benefits at such time, in each case
determined pursuant to Section 8.4(c) hereof.
(c) Valuations. All assumptions and methods used to determine the
actuarial valuation of vested employee benefits under Pension Plans and the
present value of assets of Pension Plans will be reasonable in the good
faith judgment of the Company and will comply with all requirements of law.
(d) Prohibited Actions. The Company will not, and will not permit any
ERISA Affiliate to:
(i) engage in any "prohibited transaction" (as defined in section
406 of ERISA or section 4975 of the IRC) that would result in the
imposition of a material tax or penalty;
(ii) incur with respect to any Pension Plan any "accumulated
funding deficiency" (as defined in section 302 of ERISA), whether or
not waived;
(iii) terminate any Pension Plan in a manner that could result
in
(A) the imposition of a Lien on the Property of the Company
or any Subsidiary pursuant to section 4068 of ERISA, or
(B) the creation of any liability under section 4062 of
ERISA;
(iv) fail to make any payment required by section 515 of ERISA;
or
(v) at any time be an "employer" (as defined in section 3(5) of
ERISA) required to contribute to any Multiemployer Plan if, at such
time, it could reasonably be expected that the Company or any
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Restricted Subsidiary will incur withdrawal liability in respect of
such Multiemployer Plan and such liability, if incurred, together with
the aggregate amount of all other withdrawal liability as to which
there is a reasonable expectation of incurrence by the Company or any
Restricted Subsidiary under any one or more Multiemployer Plans, could
reasonably be expected to have a Material Adverse Effect.
8.5. Line of Business.
The Company will not, and will not permit any Restricted Subsidiary to,
engage in any business other than the businesses related to their present
businesses or those that are substantially similar to their present businesses.
8.6. Transactions with Affiliates.
The Company will not, and will not permit any Restricted Subsidiary to,
enter into any transaction, including, without limitation, the purchase, sale or
exchange of Property or the rendering of any service, with any Affiliate, except
in the ordinary course of and pursuant to the reasonable requirements of the
Company's or such Restricted Subsidiary's business and upon fair and reasonable
terms no less favorable to the Company or such Restricted Subsidiary than would
be obtained in a comparable arm's-length transaction with a Person not an
Affiliate.
8.7. Pro-Rata Offers.
Except as provided in Section 5.2(b) above, the Company will not, and
will not permit any Restricted Subsidiary or any Affiliate to, directly or
indirectly, acquire or make any offer to acquire any Notes unless the Company or
such Restricted Subsidiary or Affiliate shall have offered to acquire Notes, pro
rata, from all holders of Notes and upon the same terms. In case the Company
acquires any Notes, such Notes will immediately thereafter be cancelled and no
Notes will be issued in substitution therefor.
8.8. Private Offering.
The Company will not, and will not permit any Person acting on its behalf
to, offer the Notes or any part thereof or any similar Securities for issuance
or sale to, or solicit any offer to acquire any of the same from, any Person so
as to bring the issuance and sale of the Notes within the provisions of section
5 of the Securities Act.
8.9. Designation of Subsidiaries.
(a) Right of Designation. Each Subsidiary acquired after the Effective
Date that, as of the date of such acquisition or at any future date, meets
all of the requirements of a Restricted Subsidiary, as set forth in the
definition thereof, shall be deemed, on and after such date and without any
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<PAGE>
further action by the Company or any holder of Notes, to have been
designated by the Company as a Restricted Subsidiary. Each Subsidiary
designated as a Restricted Subsidiary in Schedule 3.1 to the Waiver and
Second Amendment and each other Restricted Subsidiary shall, so long as it
shall continue to satisfy the requirements of the definition of Restricted
Subsidiary, be a Restricted Subsidiary on and after the Effective Date and
all other Subsidiaries, if any, listed in such Schedule 3.1 shall, subject
to Section 8.9(b) hereof, be Unrestricted Subsidiaries on and after the
Effective Date.
(b) Right of Redesignation. Subject to the satisfaction of the
requirements of Section 8.9(c) hereof, the Company shall have the right,
with respect to each Subsidiary that is an Unrestricted Subsidiary as of
the Effective Date, to designate such Subsidiary as a Restricted Subsidiary
by delivering a written notice to such effect, signed by the Chairman, the
Chief Executive Officer, an Executive Vice President, a Vice President or
the President of the Company, to each holder of Notes. Any designation
under and in accordance with this Section 8.9(b) shall become effective,
for purposes of this Agreement, on the day that notice thereof shall have
been mailed (postage prepaid, by registered or certified mail, return
receipt requested) by the Company to each holder of Notes at the addresses
as provided in Section 12.1 hereof. The Company shall not have the right to
designate a Restricted Subsidiary as an Unrestricted Subsidiary.
(c) Designation Criteria.
(i) No Unrestricted Subsidiary shall at any time after the
Effective Date be designated as a Restricted Subsidiary unless:
(A) such Subsidiary at such time meets all of the
requirements of a Restricted Subsidiary as set forth in the
definition thereof; and
(B) immediately before and after, and after giving effect to
such designation, and assuming that all Investments of, all
obligations and liabilities of, and all Liens on the Property of,
such Subsidiary being so designated were made or incurred
contemporaneously with such designation, no Default or Event of
Default exists or would exist.
(ii) No Restricted Subsidiary shall at any time after the
Effective Date be designated as an Unrestricted Subsidiary.
8.10. New Restricted Subsidiaries or Properties.
(a) Guaranty Agreement. The Company will cause each Person that,
after the Effective Date, becomes a direct or indirect Restricted
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Subsidiary of the Company, to become, promptly and in any event within ten
(10) Business Days of becoming a Restricted Subsidiary, a Guarantor by
executing and delivering an Accession Agreement.
(b) Security Agreement and Stock Pledge Agreement. The Company will
cause each Person that, after the Effective Date, becomes a direct or
indirect Restricted Subsidiary of the Company, to become, promptly and in
any event within ten (10) Business Days of becoming a Restricted
Subsidiary, a Pledgor under (and as defined in) each of the Security
Agreement and the Stock Pledge Agreement by executing and delivering to the
Collateral Agent and to each holder of Notes an Accession Agreement, and to
take all other actions necessary to perfect the Liens of the Collateral
Agent in the Property of such Person pledged thereunder (including, without
limitation, the filing of all appropriate Uniform Commercial Code financing
statements, the recording of all appropriate documents with public
officials, the payment of all fees and taxes, and the delivery to the
Collateral Agent of all certificates and documents constituting Pledged
Collateral (as defined in the Stock Pledge Agreement) together with all
related stock powers that in the opinion of the Collateral Agent are
necessary to create and preserve the Liens with respect to all of the
capital stock of each domestic Restricted Subsidiary and at least 65% of
the capital stock of each Restricted Subsidiary incorporated, and doing
business, outside the United States of America, in accordance with the
provisions of the Security Agreement and the Stock Pledge Agreement.
(c) Future Real Property. The Company will, and will cause each
Restricted Subsidiary to, promptly following the acquisition of any fee
simple property, provide written notice thereof to the holders of the Notes
and execute and deliver to the Collateral Agent a Mortgage in form and
substance satisfactory to the Collateral Agent, creating a first priority
Lien on such Property (including fixtures) in favor of the Collateral
Agent, subject to no Liens, except to the extent permitted by Section
8.17(a), and provide to the Collateral Agent such customary lender's title
insurance policies, environmental reports and other related documents as
the Collateral Agent or the Majority Holders may reasonably request.
(d) Assets Subject to Lien Restrictions. If at any time any
Restricted Subsidiary is prohibited by contract from entering into the
Guaranty Agreement, or the Company or any Restricted Subsidiary is
prohibited by contract from granting a Lien on any of its unencumbered
Property in favor of the Collateral Agent, the Company shall, or shall
cause such Restricted Subsidiary to, use its good faith efforts to obtain a
waiver of such prohibition and promptly execute an Accession Agreement or
Security Document, as applicable, necessary to make such Restricted
Subsidiary a Guarantor, or to make such Property a part of the Collateral,
as the case may
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be, and to take all other actions necessary to perfect the Liens of the
Collateral Agent in such additional Collateral.
(e) Certificates Regarding Authorization, etc. Each Accession
Agreement and each Security Document delivered by the Company or any
Restricted Subsidiary pursuant to this Section 8.10 shall be accompanied by
copies of the constitutive documents and corporate resolutions (or
equivalent) of the Company or such Restricted Subsidiary authorizing the
respective transactions contemplated thereby, in each case certified as
true and correct by an officer of the Company or such Restricted
Subsidiary.
(f) Further Assurances. The Company will, at the request of the
Majority Holders or the Collateral Agent, execute and deliver, or cause to
be executed and delivered, such further instruments and do, or cause to be
done, such further acts as the Majority Holders or the Collateral Agent
deem necessary or advisable to maintain the priority and validity of the
Lien of the Security Documents and to carry out more effectively the
purposes of the Financing Documents.
8.11. Fixed Charge Coverage Ratio.
The Company will not permit the Fixed Charge Coverage Ratio for any Four-
Quarter Period specified in the following table to be less than or equal to the
ratio corresponding to such period in the table:
<TABLE>
<CAPTION>
Four-Quarter Period Ending Minimum Ratio
- -----------------------------------------------------------------------------------------
<S> <C>
September 30, 1999 1.05 to 1.00
- -----------------------------------------------------------------------------------------
December 31, 1999 1.05 to 1.00
- -----------------------------------------------------------------------------------------
March 31, 2000 1.05 to 1.00
- -----------------------------------------------------------------------------------------
June 30, 2000 1.05 to 1.00
- -----------------------------------------------------------------------------------------
September 30, 2000 1.05 to 1.00
- -----------------------------------------------------------------------------------------
December 31, 2000 1.05 to 1.00
- -----------------------------------------------------------------------------------------
March 31, 2001 1.10 to 1.00
- -----------------------------------------------------------------------------------------
June 30, 2001 1.10 to 1.00
- -----------------------------------------------------------------------------------------
September 30, 2001 1.20 to 1.00
- -----------------------------------------------------------------------------------------
December 31, 2001 and 0.95 to 1.00
thereafter
- -----------------------------------------------------------------------------------------
</TABLE>
8.12. Minimum Consolidated EBITDA.
The Company will not permit the aggregate amount of Consolidated EBITDA for
any Four-Quarter Period specified in the following table to be less than the
amount corresponding to such period in such table:
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<PAGE>
<TABLE>
<CAPTION>
Four-Quarter Period Ending Minimum EBITDA
- -----------------------------------------------------------------------------------------
<S> <C>
September 30, 1999 $57,000,000
- -----------------------------------------------------------------------------------------
December 31, 1999 $57,000,000
- -----------------------------------------------------------------------------------------
March 31, 2000 $57,000,000
- -----------------------------------------------------------------------------------------
June 30, 2000 $61,500,000
- -----------------------------------------------------------------------------------------
September 30, 2000 $61,500,000
- -----------------------------------------------------------------------------------------
December 31, 2000 $65,500,000
- -----------------------------------------------------------------------------------------
March 31, 2001 $66,000,000
- -----------------------------------------------------------------------------------------
June 30, 2001 $64,000,000
- -----------------------------------------------------------------------------------------
September 30, 2001 $67,500,000
- -----------------------------------------------------------------------------------------
December 31, 2001 and $71,000,000
thereafter
- -----------------------------------------------------------------------------------------
</TABLE>
8.13. Minimum Tangible Net Worth.
The Company will not permit Consolidated Tangible Net Worth at any time to
be less than (i) One Hundred Eighty-Eight Million Dollars ($188,000,000) plus
(ii) fifty percent (50%) of consolidated income from continuing operations (only
if greater than Zero Dollars ($0)) of the Company and the Restricted
Subsidiaries for each fiscal quarter of the Company ending after June 30, 1999,
minus (iii) one hundred percent (100%) of consolidated net loss from
discontinued operations (including any write-downs) of the Company and the
Restricted Subsidiaries after June 30, 1999, plus (iv) sixty percent (60%) of
the Net Proceeds from each Equity Issuance by the Company after June 30, 1999.
8.14. Capital Expenditures.
The Company will not permit the aggregate amount of Capital Expenditures of
the Company and the Restricted Subsidiaries to be greater than: (i) Thirty
Million Dollars ($30,000,000) during the Company's fiscal year ending June 30,
2000; (ii) Thirty-Five Million Dollars ($35,000,000) during the Company's fiscal
year ending June 30, 2001; and (iii) Forty Million Dollars ($40,000,000) during
the Company's fiscal year ending June 30, 2002.
8.15. Debt to Consolidated EBITDA Ratio.
The Company will not permit, for any Four-Quarter Period ending on or after
the Performance Release Date, the Debt to Consolidated EBITDA Ratio to be
greater than or equal to 3.50 to 1.00.
8.16. Debt.
The Company will not, and will not permit any Restricted Subsidiary to,
create, incur, assume, or permit or suffer to exist, any Debt other than the
following:
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(a) Debt arising under this Agreement and the other Note Purchase
Agreements, including Debt evidenced by the Amended Notes;
(b) Debt existing or arising under the Credit Agreement, the Existing
Reimbursement Agreements, the 1993 Notes and the other Transaction
Documents; or
(c) other Debt existing on the Effective Date and described in Part
2.2(b) of Annex 3 to the Waiver and Second Amendment;
(d) Debt extending the maturity of, or refunding, refinancing or
replacing, in whole or in part, any Debt of the Company or any Restricted
Subsidiary described in the immediately preceding clauses (a) through (c)
above on terms no more restrictive in the aggregate (as reasonably
determined by the Majority Holders) to the Company or such Restricted
Subsidiary, as applicable, than the terms of the Debt so extended,
refunded, refinanced or replaced, and in a principal amount not in excess
of that outstanding as of the date of such renewal, refinancing,
replacement or extension;
(e) Debt of a Restricted Subsidiary owing to the Company or to another
Restricted Subsidiary that is a Guarantor;
(f) Debt in respect of Capitalized Lease obligations secured as
permitted under Section 8.17(a)(xi) and Debt secured by Purchase Money
Liens permitted under Section 8.17(a)(vii); provided that the aggregate
outstanding principal amount of all such Debt does not exceed Thirty-five
Million Dollars ($35,000,000) at any time;
(g) Debt of a Person secured by real property or Debt of a Person
represented by an industrial revenue bond financing, in each case where
such Person becomes a Restricted Subsidiary of the Company or is merged
with or into the Company or a then-existing Restricted Subsidiary, so long
as such Debt was not incurred in anticipation of such Person becoming a
Restricted Subsidiary or merging with the Company or a Restricted
Subsidiary; and
(h) Debt that is unsecured Debt and that is not otherwise permitted
under any of the preceding clauses (a) through (g) in an aggregate amount
not to exceed Twenty-Five Million Dollars ($25,000,000) at any time
outstanding.
8.17. Liens.
(a) Negative Pledge. The Company will not, and will not permit any
Restricted Subsidiary to, cause or permit to exist, or agree or consent to
cause or permit to exist in the future (upon the happening of a contingency
or
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otherwise), any of their Property, whether now owned or hereafter acquired,
to be subject to a Lien except:
(i) Liens securing taxes, assessments or governmental charges or
levies or the claims or demands of materialmen, mechanics, carriers,
warehousemen, landlords and other like Persons, provided that the
payment thereof is not at the time required by Section 8.1 hereof;
(ii) Liens incurred or deposits made in the ordinary course of
business
(A) in connection with workers' compensation, unemployment
insurance, social security and other like laws, and
(B) to secure the performance of letters of credit, bids,
tenders, sales contracts, leases, statutory obligations, surety
and performance bonds (of a type other than set forth in Section
8.17(a)(iii)) hereof) and other similar obligations not incurred
in connection with the borrowing of money, the obtaining of
advances or the payment of the deferred purchase price of
Property;
(iii) Liens
(A) arising from judicial attachments and judgments,
(B) securing appeal bonds, supersedeas bonds, and
(C) arising in connection with court proceedings (including,
without limitation, surety bonds and letters of credit or any
other instrument serving a similar purpose),
provided that the execution or other enforcement of such Liens is
effectively stayed and the claims secured thereby are being actively
contested in good faith and by appropriate proceedings, and provided
further that the aggregate amount so secured will not at any time
exceed Ten Million Dollars ($10,000,000);
(iv) Liens on Property of a Restricted Subsidiary, provided that
such Liens secure only obligations owing to the Company or a
Restricted Subsidiary that is a Guarantor;
(v) Liens in the nature of reservations, exceptions,
encroachments, easements, rights-of-way, covenants, conditions,
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restrictions, leases and other similar title exceptions or
encumbrances affecting real property, provided that such exceptions
and encumbrances do not in the aggregate materially detract from the
value of such Properties or materially interfere with the use of such
Property in the ordinary conduct of the business of the Company and
the Restricted Subsidiaries;
(vi) (A) Liens securing Debt in existence on the Effective
Date and listed in Schedule 3.8 to the Waiver and Second
Amendment, and
(B) Liens securing renewals, extensions (as to time) and
refinancings of such Debt secured by such Liens listed in such
Schedule, provided that (1)the amount of Debt secured by each
such Lien is not increased in excess of the amount of Debt
outstanding on the date of such renewal, extension or
refinancing, (2) none of such Liens is, or is required to be,
extended to include any additional Property of the Company or any
Restricted Subsidiary as a condition to, or as a result of, such
renewal, extension or refinancing, and (3) in the case of Debt
existing under the Credit Agreement, the renewal, extension or
refinancing of such Debt is permitted by, and is consummated in
accordance with the provisions of, Section 4.10 of the
Intercreditor Agreement; and
(vii) Purchase Money Liens securing Debt incurred within the
limitations of Section 8.16(f) hereof, so long as each such Purchase
Money Lien secures Debt of the Company or a Restricted Subsidiary in
an amount not exceeding one hundred percent (100%) of the cost of
construction or acquisition of the particular Property to which such
Debt relates (or, in the case of a Lien existing on any Property of
any corporation the time it becomes a Restricted Subsidiary, the Fair
Market Value of such Property at such time);
(viii) Liens securing the Secured Obligations (as defined in the
Omnibus Collateral Agreement);
(ix) Liens arising by virtue of any statutory or common law
provision relating to bankers' liens, rights of setoff or similar
rights as to deposit accounts or other funds maintained with a
creditor depository institution;
(x) Liens constituting intellectual property licenses entered
into in the ordinary course of business;
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(xi) Liens securing Capitalized Lease obligations to the extent
such Debt is permitted under Section 8.16(f), so long as any such Lien
secures Debt of the Company or a Restricted Subsidiary in an amount
not exceeding one hundred percent (100%) of the cost of construction
or acquisition of the particular Property that is the subject of such
Capitalized Lease;
(xii) Liens securing Off Balance Sheet Liabilities which do not
constitute Debt;
(xiii) financing statements permitted to be signed or filed
under Section 8.17(b);
(xiv) leases and subleases of Property of the Company or a
Restricted Subsidiary to other Persons entered into in the ordinary
course of business; and
(xv) Liens permitted under the express terms of the Security
Documents.
In addition, the Company will not, and will not permit any Restricted
Subsidiary, directly or indirectly, to create or otherwise cause, incur,
assume, suffer or permit to exist or become effective any consensual
encumbrance or restriction of any kind on the ability of such Person to
grant a security interest in, or assign its property to, the Collateral
Agent, except for encumbrances or restrictions existing under or by reason
of (i) customary non-assignment provisions in any lease governing a
leasehold interest, license or other contract, (ii) with respect to any
Person which becomes a Subsidiary of the Company after the Effective Date,
an agreement or other instrument of such Person existing at the time it
becomes a Subsidiary, provided that such encumbrance or restriction is not
applicable to any other Person, other than such Person becoming a
Subsidiary and was not entered into in contemplation of such Person
becoming a Subsidiary, (iii) this Agreement and the other Financing
Documents, and (iv) any agreement of the Company or any Restricted
Subsidiary existing on the Effective Date and any renewal or extension of
any such agreement.
(b) Financing Statements. The Company will not, and will not permit
any Restricted Subsidiary to, sign or file a financing statement under the
Uniform Commercial Code of any jurisdiction that names the Company or such
Restricted Subsidiary as debtor, or sign any security agreement authorizing
any secured party thereunder to file any such financing statement, except,
in any such case, a financing statement filed or to be filed to perfect or
protect a security interest that the Company or such Restricted Subsidiary
is entitled to create, assume or incur, or permit to exist, under the
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<PAGE>
foregoing provisions of this Section 8.17 or to evidence for informational
purposes a lessor's interest in Property leased to the Company or any such
Restricted Subsidiary.
8.18. Mergers; Consolidations.
The Company will not, and will not permit any Restricted Subsidiary
to, merge with or into or consolidate with or into any other Person or permit
any other Person to merge or consolidate with or into it; provided, however, so
long as no Default or Event of Default exists at the time thereof, or would
exist immediately after giving effect thereto, a Restricted Subsidiary may (x)
merge into or consolidate with a Wholly-Owned Restricted Subsidiary that is a
Guarantor and (y) merge with and into the Company so long as the Company is the
survivor of such merger.
8.19. Disposition of Assets.
The Company will not, and will not permit any Restricted Subsidiary to, convey,
sell, lease, sublease, transfer or otherwise dispose of any assets (including
without limitation, capital stock of or other equity interests in any Subsidiary
or other Person) except for:
(a) sales of inventory in the ordinary course of business;
(b) the sale, lease, sublease, transfer or other disposition of
machinery and equipment no longer used or useful in the conduct of
business;
(c) the sale, lease, sublease, transfer or other disposition of assets
to the Company or to a Wholly-Owned Restricted Subsidiary that is a
Guarantor;
(d) the sale of assets of the SBQ Division (Memphis/Cleveland) to the
extent permitted under the express terms of the Intercreditor Agreement;
(e) transfers of assets made as consideration for Permitted
Investments;
(f) the transfer by Cumberland Recyclers, LLC to BSE of the assets
known as the "mega shredder" so long as: (i) the Company shall have given
at least sixty (60) days prior written notice of such transfer to each
holder of Notes; (ii) no Default or Event of Default exists at the time of
such transfer; (iii) such transfer is made subject to the Lien of the
Collateral Agent in such assets; and (iv) all actions required under the
Security Agreement to maintain the validity, perfection, enforceability and
priority and rank of such Lien in connection with such transfer are taken;
and
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<PAGE>
(g) other sales and dispositions of Property of the Company or any
Restricted Subsidiary, so long as the Fair Market Value of such Property
does not exceed Ten Million Dollars ($10,000,000) in the aggregate during
any fiscal year of the Company.
8.20. Restricted Payments.
The Company will not declare or make, or permit any Restricted Subsidiary
to declare or make, any Restricted Payment; provided, however, that (a)
Restricted Subsidiaries may declare and make Restricted Payments payable to the
Company or any other Restricted Subsidiary that is a Guarantor, and (b) so long
as no Default or Event of Default shall have occurred and be continuing, or
would result therefrom, the Company may declare and make cash dividends with
respect to its common stock so long as (i) the aggregate amount of such cash
dividends paid during any fiscal quarter of the Company does not exceed Seven
Hundred Fifty Thousand Dollars ($750,000) and (ii) immediately after giving
effect to the payment of any such cash dividend, the aggregate amount of all
cash dividends paid by the Company during the period commencing on July 1, 1999
and ending on the date of the payment of such cash dividend (excluding the cash
dividend in the amount of $737,836.76 paid on August 9, 1999) would not exceed
50% of cumulative consolidated income from continuing operations of the Company
and the Restricted Subsidiaries for such entire period.
8.21. Permitted Investments.
The Company will not, and will not permit any Restricted Subsidiary to,
make any Investment other than Permitted Investments.
8.22. Accounts with Financial Institutions other than the Banks.
The Company shall not, and shall not permit any Subsidiary to, maintain any
deposit account, savings account, investment account or other similar account
with any financial institution or other Person except for the agent bank and the
Banks under the Credit Agreement, excluding: (a) lockbox accounts existing as of
the Effective Date and disclosed on Schedule 2.10 to the Omnibus Collateral
Agreement the entire balances of which are automatically transferred on a daily
basis to a deposit account of the Company maintained with such agent bank; and
(b) other deposit accounts so long as the balances of such deposit accounts do
not exceed $150,000 in the aggregate at any time; provided, however, Birmingham
Steel Overseas, Ltd. may maintain its existing deposit account with Barclay's
Bank, PLC in Barbados in which the proceeds of foreign sales are deposited so
long as (i) the balance of such account does not exceed One Million Dollars
($1,000,000) in the aggregate at any time and (ii) such Subsidiary remains
qualified as a "foreign sales corporation" under Section 922 of the IRC.
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8.23. Proceeds from Equity Issuances.
The Company may use such portion of the Net Proceeds from any Equity
Issuance which the Company is permitted to retain under the terms of the
Intercreditor Agreement and the other applicable Transaction Documents (a) to
fund Restricted Payments not otherwise permitted under Section 8.20, (b) to
finance Investments not otherwise permitted under Section 8.21, (c) to finance
Capital Expenditures not otherwise permitted under Section 8.14 and (d) for any
other purpose not otherwise prohibited by this Agreement.
8.24. No Voluntary Reductions in Commitment.
The Company will not, without the prior written consent of the Special
Majority Holders, agree to any voluntary reduction of the Commitments as defined
in Section 2.12 of the Credit Agreement, whether such voluntary reductions would
be pursuant to such Section 2.12 or otherwise.
9. INFORMATION AS TO COMPANY
9.1. Financial and Business Information.
The Company will deliver to each holder of Notes:
(a) Monthly Statements - promptly following, and in any event within
thirty (30) days of, the end of each calendar month, the consolidated
balance sheet of the Company and the Subsidiaries as at the end of such
month and the related consolidated statement of income of the Company and
the Subsidiaries for such month, all of which shall be certified by the
Executive Vice President-Chief Financial Officer or Vice President-Finance
and Control of the Company, in his or her opinion, to present fairly, in
accordance with GAAP and in all material respects, the consolidated
financial position of the Company and the Subsidiaries as at the date
thereof and the results of operations for such month (without notes and
subject to normal year-end adjustments), together with a cash analysis
report substantially in the form of Exhibit N to the Credit Agreement;
(b) Quarterly Statements - as soon as practicable after the end of
each quarterly fiscal period in each fiscal year of the Company (other than
the last quarterly fiscal period of each such fiscal year), and in any
event within forty-five (45) days thereafter, duplicate copies of:
(i) a consolidated balance sheet of the Company and the
Subsidiaries as at the end of such quarter, and
(ii) consolidated statements of income and cash flows of the
Company and the Subsidiaries for such quarter and (in the case of the
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second and third quarters) for the portion of the fiscal year ending
with such quarter,
setting forth in each case in comparative form the figures for the
corresponding periods in the previous fiscal year, all in reasonable
detail, prepared in accordance with GAAP (without notes and subject to
normal year-end adjustments) applicable to quarterly financial statements
generally, and certified as complete and correct, subject to changes
resulting from year-end adjustments, by the Vice President-Finance and
Control or Executive Vice President of the Company, and accompanied by the
certificate required by Section 9.2 hereof;
(c) Annual Statements - as soon as practicable after the end of each
fiscal year of the Company, and in any event within ninety-five (95) days
thereafter, duplicate copies of:
(i) a consolidated balance sheet of the Company and the
Subsidiaries as at the end of such year, and
(ii) consolidated statements of income, changes in shareholders'
equity and cash flows of the Company and the Subsidiaries for such
year,
setting forth in each case in comparative form the figures for the previous
fiscal year, all in reasonable detail, prepared in accordance with GAAP,
and accompanied by
(iii) an opinion thereon of the accountants named in Section 2.2
hereof or other independent certified public accountants of recognized
national standing selected by the Company, which opinion shall,
without qualification, state that such financial statements present
fairly, in all material respects, the financial position of the
companies being reported upon and their results of operations and cash
flows and have been prepared in conformity with GAAP, and that the
examination of such accountants in connection with such financial
statements has been made in accordance with generally accepted
auditing standards, and that such audit provides a reasonable basis
for such opinion in the circumstances, and
(iv) the certificates required by Section 9.2 and Section 9.3
hereof;
(d) Company Business Plan -- On or before September 1 of each calendar
year, commencing September 1, 2000, a copy of the Company's internal
business plan for the fiscal year commencing on July 1 of such
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calendar year and ending on June 30 of the following year, such plan to
include the Company's forecast on a month-by-month basis;
(e) Effects of APB 30 - together with each financial statement
required to be delivered pursuant to Section 9.1(a), Section 9.1(b) or
Section 9.1(c) hereof, copies of such financial statements prepared by the
Company in accordance with GAAP (without notes and subject to normal year-
end adjustments) in all respects but which excludes the effect of the
accounting entries made by the Company with respect to its financial
statements for the fiscal year ending June 30, 1999 and as required under
Accounting Principles Board Opinion No. 30 ("APB 30") solely to the extent
relating to the SBQ Division. Each such financial statement shall
disclose, in form and substance satisfactory to the Majority Holders, the
resulting differences between such statement and one prepared entirely in
accordance with GAAP;
(f) Audit Reports - promptly upon receipt thereof, a copy of each
other report submitted to the Company or any Subsidiary by independent
accountants in connection with any management report, special audit report
or comparable analysis prepared by them with respect to the books of the
Company or any Subsidiary;
(g) SEC and Other Reports - promptly upon their becoming available,
one copy of each financial statement, report, notice or proxy statement
sent by the Company or any Subsidiary to stockholders generally, and of
each regular or periodic report and any registration statement, prospectus
or written communication (other than transmittal letters and routine
comment letters with respect to drafts of such statements, reports or
prospectuses), and each amendment thereto, in respect thereof filed by the
Company or any Subsidiary with, or received by, such Person in connection
therewith from, the National Association of Securities Dealers, any
securities exchange or the Securities and Exchange Commission or any
successor agency;
(h) ERISA - immediately upon becoming aware of the occurrence of any
(i) "reportable event" (as defined in section 4043 of ERISA) or
(ii) "prohibited transaction" (as defined in section 406 or
section 4975 of the IRC)
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in connection with any Pension Plan or any trust created thereunder, a
written notice specifying the nature thereof, what action the Company is
taking or proposes to take with respect thereto, and, when known, any
action taken by the IRS, the DOL or the PBGC with respect thereto;
(i) ERISA Waivers - prompt written notice of and a description of any
request pursuant to section 303 of ERISA or section 412 of the IRC for, or
notice of the granting pursuant to such section 303 or section 412 of, a
waiver in respect of all or part of the minimum funding standard set forth
in ERISA or the IRC, as the case may be, of any Pension Plan, and, in
connection with the granting of any such waiver, the amount of any waived
funding deficiency (as defined in such section 303 or such section 412) and
the terms of such waiver, in each of the cases specified in this clause
(i), where the effect of such conditions or events or of events or
conditions related thereto could reasonably be expected to have a Material
Adverse Effect;
(j) Other ERISA Notices - prompt written notice of and, where
applicable, a description of
(i) any notice from the PBGC in respect of the commencement of
any proceedings pursuant to section 4042 of ERISA to terminate any
Pension Plan or for the appointment of a trustee to administer any
Pension Plan,
(ii) any distress termination notice delivered to the PBGC under
section 4041 of ERISA in respect of any Pension Plan, and any
determination of the PBGC in respect thereof,
(iii) the placement of any Multiemployer Plan in reorganization
status under Title IV of ERISA,
(iv) any Multiemployer Plan becoming "insolvent" (as defined in
section 4245 of ERISA) under Title IV of ERISA,
(v) the whole or partial withdrawal of the Company or any ERISA
Affiliate from any Multiemployer Plan and the withdrawal liability
incurred in connection therewith, and
(vi) the withdrawal of the Company or any ERISA Affiliate from
any Multiple Employer Pension Plan and the withdrawal liability under
ERISA incurred in connection therewith;
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in each of the cases specified in the foregoing clauses (i) through (vi),
inclusive, where the effect of such conditions or events or of events or
conditions related thereto could reasonably be expected to have a Material
Adverse Effect;
(k) Notice of Default or Event of Default - immediately upon becoming
aware of the existence of any condition or event that constitutes a Default
or an Event of Default, a written notice specifying the nature and period
of existence thereof or of such failure and what action the Company is
taking or proposes to take with respect thereto;
(l) Notice of Claimed Default - immediately upon becoming aware that
the holder of any Note, or of any evidence of indebtedness or other
Security of the Company or any Subsidiary, shall have given notice or taken
any other action with respect to a claimed Default, Event of Default,
default or event of default, a written notice specifying the notice given
or action taken by such holder and the nature of the claimed Default, Event
of Default, default or event of default and what action the Company is
taking or proposes to take with respect thereto;
(m) Notice of Violation of Environmental Protection Law - promptly
upon becoming aware of the existence of any violation by the Company or any
Subsidiary of any Environmental Protection Law that could reasonably be
expected to have a Material Adverse Effect, a written notice specifying the
nature and period of such violation and what action any one or more of the
Company and such Subsidiary, as the case may be, are taking or propose to
take with respect thereto;
(n) Information furnished to Banks, etc. - not later than the time
furnished to any of the Banks or any agent acting for the Banks under the
Credit Agreement, copies of each report, statement, document, notice or
other item furnished pursuant to Article VIII of the Credit Agreement or
any related instrument, agreement or other document;
(o) Monthly Financial Report - as soon as practicable after the end of
each quarterly fiscal period in each fiscal year of the Company, and in any
event within thirty (30) days thereafter, a copy of the "Financial Report"
(the Company's monthly internal operating report) together with the
schedules that are supplemental thereto; and
(p) Requested Information - with reasonable promptness, such other
data and information as from time to time may be reasonably requested by
any holder of Notes, including, without limitation,
(i) copies of any statement, report or certificate furnished to
any holder of Debt of the Company or any Subsidiary,
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(ii) information requested to comply with any request of the
National Association of Insurance Commissioners in respect of the
designation of the Notes, and
(iii) information requested to comply with 17 C.F.R.
(S)230.144A, as amended from time to time,
(any such request with respect to the data and information referred to in
the foregoing clauses (i), (ii) and (iii) being deemed to be reasonable for
purposes of this clause (p)).
9.2. Officers' Certificates.
Each set of financial statements delivered to each holder of Notes pursuant
to Section 9.1(b) or Section 9.1(c) hereof shall be accompanied by a certificate
of the Vice President-Finance and Control or the Executive Vice President-Chief
Financial Officer of the Company setting forth:
(a) Covenant Compliance - the information (including detailed
calculations) required in order to establish whether the Company was in
compliance with the requirements of Sections 8.11 through Section 8.17
hereof, inclusive, and Sections 8.19, 8.20 and 8.23 during the period
covered by the income statement then being furnished (including with
respect to each such Section, where applicable, the calculations of the
maximum or minimum amount, ratio or percentage, as the case may be,
permissible under the terms of such Sections, and the calculation of the
amounts, ratio or percentage then in existence); and
(b) Event of Default - a statement that the signers have reviewed the
relevant terms hereof and have made, or caused to be made, under their
supervision, a review of the transactions and conditions of the Company and
the Subsidiaries from the beginning of the accounting period covered by the
income statements being delivered therewith to the date of the certificate
and that such review shall not have disclosed the existence during such
period of any condition or event that constitutes a Default or an Event of
Default or, if any such condition or event existed or exists, specifying
the nature and period of existence thereof and what action the Company
shall have taken or proposes to take with respect thereto.
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9.3. Accountants' Certificates.
Each set of annual financial statements delivered pursuant to Section
9.1(c) shall be accompanied by a certificate of the accountants who certify such
financial statements, stating that they have reviewed this Agreement and stating
further, whether, in making their audit, such accountants have become aware of
any condition or event that then constitutes a Default or an Event of Default,
and, if such accountants are aware that any such condition or event then exists,
specifying the nature and period of existence thereof.
9.4. Quarterly Review With Financial Advisor.
Within ten (10) Business Days of the delivery of the financial statements
provided pursuant to Section 9.1(b) for each quarterly period ending on or prior
to an Acceptable SBQ Asset Sale, the Company will cause its Chief Financial
Officer or Vice President-Finance and Control to meet, either in person at the
Company's executive office or via telephone conference call, with a
representative of Nightingale or such other Person designated by the Majority
Holders to discuss the Company's financial condition and results of operations
as such condition and results of operations relate to the Company's projections
for such items previously delivered to Nightingale or the holders of the Notes.
The Company agrees to pay, for each such quarterly period, Nightingale's fees in
connection with such review and any reporting thereof to the holders of the
Notes in an amount not to exceed Three Thousand Dollars ($3,000), plus its
reasonable out-of-pocket costs and expenses in connection therewith.
9.5. Inspection.
The Company will permit the representatives of each holder of Notes, once
only during each fiscal quarter of the Company at such reasonable time as may be
requested by such holder, to visit and inspect any of the Properties of the
Company or any Subsidiary, to examine all their respective books of account,
records, reports and other papers, to make copies and extracts therefrom, and to
discuss their respective affairs, finances and accounts with their respective
officers, employees and independent public accountants (and by this provision
the Company authorizes such accountants to discuss the finances and affairs of
the Company and the Subsidiaries), provided that during any time when an Event
of Default exists, any such inspection or visit shall be at the expense of the
Company and may be made as often as may be requested.
10. EVENTS OF DEFAULT
10.1. Nature of Events.
An "Event of Default" shall exist if any of the following occurs and is
continuing:
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(a) Principal or Make-Whole Amount Payments - the Company shall fail
to make any payment of principal or Make-Whole Amount on any Note on or
before the date such payment is due;
(b) Certain Prepayments - the Company shall fail to fulfill any of its
obligations set forth in Section 6.1 hereof;
(c) Interest Payments - the Company shall fail to make any payment of
interest on any Note on or before five (5) Business Days after the date
such payment is due;
(d) Other Defaults - the Company or any Subsidiary shall fail to
comply with any other provision of this Agreement or any other Financing
Document, and such failure shall continue for more than thirty (30) days
after such failure shall first become known to any officer of the Company;
(e) Warranties or Representations - any warranty, representation or
other statement by or on behalf of the Company contained in this Agreement
or any other Financing Document or in any instrument furnished in
compliance with or in reference to this Agreement or any other Financing
Document shall have been false or misleading in any material respect when
made or deemed made;
(f) Default on Debt or Other Security -
(i) the Company or any Restricted Subsidiary shall fail to make
any payment on any Debt when due, or
(ii) any event shall occur or any condition shall exist in
respect of Debt or any Security of the Company or any Restricted
Subsidiary, or under any agreement securing or relating to such Debt
or Security, that immediately or with any one or more of (x) the
passage of time, (y) the giving of notice or (z) the expiration of
waivers or modifications granted in respect of such event or
condition:
(A) causes (or permits any one or more of the holders
thereof or a trustee therefor to cause) such Debt or Security, or
a portion thereof, to become due prior to its stated maturity or
prior to its regularly scheduled date or dates of payment; or
(B) permits any one or more of the holders thereof or a
trustee therefor to require the Company or any Restricted
Subsidiary to repurchase such Debt or Security;
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provided that either such Debt is outstanding under the Credit
Agreement or the aggregate amount of all obligations in respect of
such Debt and Securities exceeds at such time Ten Million Dollars
($10,000,000); provided, further, however, this clause (ii) shall not
be deemed to apply to the Debt evidenced by the industrial revenue
bonds described in Schedule 3.8 to the Waiver and Second Amendment
which are supported by letters of credit issued for the account of the
Company or American Steel & Wire Corporation;
(g) Involuntary Bankruptcy Proceedings -
(i) a receiver, liquidator, custodian or trustee of the Company,
or any Restricted Subsidiary, or of all or any of the Property of
either, shall be appointed by court order and such order remains in
effect for more than forty-five (45) days; or an order for relief
shall be entered with respect to the Company or any Restricted
Subsidiary, or the Company or any Restricted Subsidiary shall be
adjudicated a bankrupt or insolvent,
(ii) any of the Property of the Company or any Restricted
Subsidiary shall be sequestered by court order and such order remains
in effect for more than forty-five (45) days, or
(iii) a petition shall be filed against the Company or any
Restricted Subsidiary under any bankruptcy, reorganization,
arrangement, insolvency, readjustment of debt, dissolution or
liquidation law of any jurisdiction, whether now or hereafter in
effect, and shall not be dismissed within forty-five (45) days after
such filing;
(h) Voluntary Petitions - the Company or any Restricted Subsidiary
shall file a petition in voluntary bankruptcy or seeking relief under any
provision of any bankruptcy, reorganization, arrangement, insolvency,
readjustment of debt, dissolution or liquidation law of any jurisdiction,
whether now or hereafter in effect, or shall consent to the filing of any
petition against it under any such law;
(i) Assignments for Benefit of Creditors, etc. - the Company or a
Restricted Subsidiary shall make an assignment for the benefit of its
creditors, or shall admit in writing its inability, or shall fail, to pay
its debts generally as they become due, or shall consent to the appointment
of a receiver, liquidator or trustee of the Company or a Restricted
Subsidiary or of all or any part of the Property of either;
(j) Undischarged Final Judgments - a final judgment or final judgments
for the payment of money aggregating in excess of Ten Million Dollars
($10,000,000) shall be outstanding against one or more of the
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Company and the Restricted Subsidiaries and any one of such judgments shall
have been outstanding for more than thirty (30) days from the date of its
entry and shall not have been discharged in full or stayed; or
(k) Other Financing Documents -
(i) the Guaranty Agreement or any Security Document shall cease
to be in full force and effect or shall be declared by a court or
Governmental Authority of competent jurisdiction to be void, voidable
or unenforceable against the Company or any Restricted Subsidiary
which is a party to such Financing Document;
(ii) the Company or any Restricted Subsidiary shall disavow,
revoke or terminate any Financing Document to which it is a party or
shall otherwise challenge or contest in any action, suit or proceeding
in any court or before any Governmental Authority the validity or
enforceability of any Financing Document; or
(iii) the Collateral Agent shall, for a period of thirty (30)
days, cease to have a valid and perfected first-priority security
interest (subject only to Liens permitted by the Financing Documents)
in Collateral having an aggregate book value in excess of Five Million
Dollars ($5,000,000), or in any other material portion of the
Collateral, for any reason other than the failure of the Collateral
Agent to take any action within its control.
10.2. Default Remedies.
(a) Acceleration on Event of Default.
(i) If an Event of Default specified in clause (g), (h) or (i) of
Section 10.1 hereof shall exist, all of the Notes at the time
outstanding shall automatically become immediately due and payable
together with interest accrued thereon and, to the extent permitted by
law, the Make-Whole Amount at such time with respect to the principal
amount of such Notes, without presentment, demand, protest or notice
of any kind, all of which are hereby expressly waived.
(ii) If an Event of Default other than those specified in clause
(g), (h) or (i) of Section 10.1 hereof shall exist, the holder or
holders of at least thirty-five percent (35%) in principal amount of
the Notes then outstanding (exclusive of Notes then owned by any one
or more of the Company, any Restricted Subsidiary or any Affiliate)
may exercise any right, power or remedy permitted to such holder or
holders by law, and shall have, in particular, without limiting the
generality of the foregoing, the right to declare the entire principal
of, and all interest
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accrued on, all the Notes then outstanding to be, and such Notes shall
thereupon become, forthwith due and payable, without any presentment,
demand, protest or other notice of any kind, all of which are hereby
expressly waived, and the Company shall forthwith pay to the holder or
holders of all the Notes then outstanding the entire principal of, and
interest accrued on, the Notes and, to the extent permitted by law,
the Make-Whole Amount at such time with respect to such principal
amount of such Notes.
(b) Acceleration on Payment Default. During the existence of an Event
of Default described in Section 10.1(a), Section 10.1(b) or Section 10.1(c)
hereof, and irrespective of whether the Notes then outstanding shall have
been declared to be due and payable pursuant to Section 10.2(a)(ii) hereof,
any holder of Notes that shall have not consented to any waiver with
respect to such Event of Default may, at its option, by notice in writing
to the Company, declare the Notes then held by such holder to be, and such
Notes shall thereupon become, forthwith due and payable together with all
interest accrued thereon, without any presentment, demand, protest or other
notice of any kind, all of which are hereby expressly waived, and the
Company shall forthwith pay to such holder the entire principal of and
interest accrued on such Notes and, to the extent permitted by law, the
Make-Whole Amount at such time with respect to such principal amount of
such Notes.
(c) Valuable Rights. The Company acknowledges, and the parties hereto
agree, that the right of each holder to maintain its investment in the
Notes free from repayment by the Company (except as herein specifically
provided for) is a valuable right and that the provision for payment of a
Make-Whole Amount by the Company in the event that the Notes are prepaid or
are accelerated as a result of an Event of Default, is intended to provide
compensation for the deprivation of such right under such circumstances.
(d) Other Remedies. During the existence of an Event of Default and
irrespective of whether the Notes then outstanding shall have been declared
to be due and payable pursuant to Section 10.2(a)(ii) hereof and
irrespective of whether any holder of Notes then outstanding shall
otherwise have pursued or be pursuing any other rights or remedies, any
holder of Notes may proceed to protect and enforce its rights under this
Agreement, under such Notes and under the other Financing Documents by
exercising such remedies as are available to such holder in respect thereof
under applicable law, either by suit in equity or by action at law, or
both, whether for specific performance of any agreement contained herein or
in aid of the exercise of any power granted herein, provided that the
maturity of such holder's Notes may be accelerated only in accordance with
Section 10.2(a) and Section 10.2(b) hereof.
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(e) Nonwaiver and Expenses. No course of dealing on the part of any
holder of Notes nor any delay or failure on the part of any holder of Notes
to exercise any right shall operate as a waiver of such right or otherwise
prejudice such holder's rights, powers and remedies. If the Company shall
fail to pay when due any principal of, or Make-Whole Amount or interest on,
any Note, or shall fail to comply with any other provision hereof, the
Company shall pay to each holder of Notes, to the extent permitted by law,
such further amounts as shall be sufficient to cover the costs and
expenses, including, but not limited to, reasonable attorneys' fees,
incurred by such holder in collecting any sums due on such Notes or in
otherwise assessing, analyzing or enforcing any rights or remedies that are
or may be available to it.
10.3. Annulment of Acceleration of Notes.
If a declaration is made pursuant to Section 10.2(a)(ii) hereof, then and
in every such case, the holders of sixty-six percent (66%) in aggregate
principal amount of the Notes then outstanding (exclusive of Notes then owned by
any one or more of the Company, any Restricted Subsidiaries and any Affiliates)
may, by written instrument filed with the Company, rescind and annul such
declaration, and the consequences thereof, provided that at the time such
declaration is annulled and rescinded:
(a) no judgment or decree shall have been entered for the payment of
any moneys due on or pursuant hereto or the Notes;
(b) all arrears of interest upon all the Notes and all other sums
payable hereunder and under the Notes (except any principal of, or interest
or Make-Whole Amount on, the Notes that shall have become due and payable
by reason of such declaration under Section 10.2(a)(ii) hereof) shall have
been duly paid; and
(c) each and every other Default and Event of Default shall have been
waived pursuant to Section 12.5 hereof or otherwise made good or cured,
and provided further that no such rescission and annulment shall extend to or
affect any subsequent Default or Event of Default or impair any right consequent
thereon.
11. INTERPRETATION OF THIS AGREEMENT
11.1. Terms Defined.
As used herein, the following terms have the respective meanings set forth
below or set forth in the Section hereof following such term:
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Acceptable Insurer - means any financially sound and reputable
insurance company accorded a rating by A.M. Best Company of "A-" or better and a
size rating of "VI" or better (or a comparable rating by any comparable
successor rating agency).
Acceptable SBQ Asset Sale - means a sale by the Company of the SBQ
Division (Memphis/Cleveland).
Accession Agreement - means an Accession Agreement in the form
attached as Exhibit F to the Omnibus Collateral Agreement.
Affiliate - means, at any time, a Person (other than a Restricted
Subsidiary)
(a) that directly or indirectly through one or more intermediaries
Controls, or is Controlled by, or is under common Control with, the
Company,
(b) that beneficially owns or holds five percent (5%) or more of any
class of the Voting Stock of the Company, or
(c) five percent (5%) or more of the Voting Stock (or in the case of a
Person that is not a corporation, five percent (5%) or more of the equity
interest) of which is beneficially owned or held by the Company or a
Subsidiary,
at such time.
As used in this definition:
Control - means the possession, directly or indirectly, of the
power to direct or cause the direction of the management and policies
of a Person, whether through the ownership of voting securities, by
contract or otherwise.
Agreement, this - means this agreement, as it may be amended and
restated from time to time.
AIR - means American Iron Reduction, L.L.C., a limited liability
company organized under the laws of the State of Delaware.
Amended Notes - Section 1.2(f).
Amended Series A Notes - Section 1.2(a).
Amended Series B Notes - Section 1.2(b).
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Amended Series C Notes - Section 1.2(c).
Banks - means the lending institutions listed on the signature pages
of the Credit Agreement and their respective successors and assigns.
Board of Directors - means, at any time, the board of directors of the
Company or any committee thereof that, in the instance, shall have the lawful
power to exercise the power and authority of such board of directors.
BSE - means Birmingham Southeast, LLC, a limited liability company
organized under the laws of the State of Delaware.
Business Day - means a day other than a Saturday, a Sunday or, if the
provisions of Section 4.1 hereof are applicable with respect to any Note, a day
on which the bank designated (by the holder of such Note) to receive (for such
holder's account) payments on such Note is required by law (other than a general
banking moratorium or holiday for a period exceeding four (4) consecutive days)
to be closed.
Capital Expenditures - means, with respect to any Person, all
expenditures made and liabilities incurred for the acquisition of assets which
are not, in accordance with GAAP, treated as expense items for such Person in
the year made or incurred or as a prepaid expense applicable to a future year or
years, and shall include all Capitalized Lease obligations.
Capitalized Lease - means, at any time, a lease with respect to which,
under GAAP, the lessee is or will be required to recognize the acquisition of an
asset and the incurrence of a liability at such time.
Change in Control - means any Acquisition subsequent to the Original
Closing Date by any Person, or related Persons constituting a "group" (as such
term is defined in section 13(d) of the Securities Exchange Act of 1934), of
(a) the power to elect, appoint or cause the election or appointment
of at least a majority of the members of the Board of Directors (other than
the normal acquisition of proxies by the then current Board of Directors),
through beneficial ownership of the capital stock of the Company or
otherwise, or
(b) all or substantially all of the properties and assets of the
Company;
provided, however, that a Change in Control pursuant to the foregoing clause (b)
shall not be deemed to have occurred if no Person, or related Persons
constituting a "group" for purposes of section 13(d) of the Securities Exchange
Act of 1934, shall
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have the power to elect, appoint or cause the election or appointment of at
least a majority of the members of the board of directors of such successor or
transferee.
For purposes of this definition "Acquisition" of the power or properties
and assets stated in the preceding sentence means the earlier of
(i) the actual possession thereof and
(ii) the consummation of any transaction or series of related
transactions which, with the passage of time, will give such Person or
Persons the actual possession thereof.
Closing - Section 1.3.
Collateral - has the meaning specified in the Intercreditor Agreement.
Collateral Agent - has the meaning specified in the Intercreditor
Agreement.
Commitment - has the meaning specified in the Credit Agreement as in effect
on the Effective Date.
Company - has the meaning specified in the introductory sentence hereof.
Consolidated EBITDA - means, for any period, the sum of (a) Consolidated
Net Income for such period, plus (b) the aggregate amount of (i) taxes imposed
on, or measured by, income or excess profits, (ii) Consolidated Interest
Expense, and (iii) depreciation and amortization for such period (to the extent,
and only to the extent, that any such amount in clauses (i), (ii) or (iii) was
deducted in the computation of Consolidated Net Income for such period), in each
case accrued for such period by the Company and the Restricted Subsidiaries,
determined on a consolidated basis for such Persons.
Consolidated EBITDAR - means, for any period, the sum of (a) Consolidated
EBITDA for such period, plus (b) Rental Expense for such period (to the extent,
and only to the extent, deducted in the computation of Consolidated Net Income
for such period).
Consolidated Interest Expense - means, for any period, all interest charges
for such period accrued on or with respect to Debt of the Company and the
Restricted Subsidiaries (including, without limitation, amortization of debt
discount and expense and imputed interest on Capitalized Lease obligations).
Consolidated Net Income - means, with respect to the Company and the
Restricted Subsidiaries for any period of computation thereof, the net income
(or loss)
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of the Company and the Restricted Subsidiaries on a consolidated basis for such
period; provided, however, that the following shall be excluded when determining
Consolidated Net Income:
(a) any item of gain or loss resulting from the sale, conversion or
other disposition of plant, property and equipment;
(b) gains or losses on the acquisition, retirement, sale or other
disposition of capital stock and other securities of the Company and the
Restricted Subsidiaries;
(c) the income (or loss) for such fiscal period of any Person prior to
the date such Person becomes a Restricted Subsidiary or is merged into or
consolidated with the Company or any of the Restricted Subsidiaries, or
such Person's assets are acquired by the Company or any of the Restricted
Subsidiaries;
(d) any write-up of any asset;
(e) any other net gains or losses of an extraordinary nature as
determined in accordance with GAAP;
(f) any earnings attributable to the amortization of negative
goodwill;
(g) that portion of net earnings of any Restricted Subsidiary that is
unavailable for payment as dividends to the Company or another Restricted
Subsidiary as a result of a legal or contractual prohibition, unless such
portion of such net earnings is legally available for either: (x)
reimbursement to the Company or another Restricted Subsidiary for advances,
loans or allocated expenses, or (y) advances or loans to the Company or
another Restricted Subsidiary;
(h) pre-operating/start-up costs as would be set forth in the
financial statements of the Company and the Restricted Subsidiaries for
such period prepared in accordance with GAAP; provided, however, the amount
of such costs excluded for a fiscal quarter occurring during any such
period shall not exceed the following amounts: (w) $10,000,000 for the
fiscal quarter ending on September 30, 1999; (x) $8,000,000 for the fiscal
quarter ending December 31, 1999; (y) $5,000,000 for the fiscal quarter
ending March 31, 2000; and (z) $0 for each fiscal quarter ended thereafter;
(i) any losses on disposal of the SBQ Division; and
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(j) any non-cash charges relating to the restructuring of, or write-
down of the investments of the Company in, AIR and PCR.
For purposes of calculating Consolidated Net Income, the amount shall include
income from both continuing and discontinued operations, except that adjustments
to the allowance for discontinued operations and the related tax effects shall
be excluded from such amount.
Consolidated Tangible Net Worth - means (a) the Company's stockholder's
equity which would appear as such on a consolidated balance sheet of the Company
and the Restricted Subsidiaries prepared in accordance with GAAP less (b) all
intangible items reflected therein, including all goodwill, all intangible plant
expansion costs, all unamortized debt discount and expense, unamortized research
and development expense, unamortized deferred charges, patents, trademarks,
service marks, trade names and copyrights, unamortized excess cost of investment
in Subsidiaries over equity at dates of acquisition, and all similar items which
should properly be treated as intangibles in accordance with GAAP.
Control Event - means the execution of any written agreement that, when
fully performed by the parties thereto, would result in a Change in Control.
Control Prepayment Date - Section 6.1.
Credit Agreement - means that certain Credit Agreement dated as of March
17, 1997, by and among the Company, Bank of America, N.A., as agent, and the
Banks, as may be amended, restated or modified from time to time.
Debt - means, with respect to a Person and at the time of determination
thereof, all of the following (without duplication):
(a) obligations of such Person in respect of money borrowed;
(b) obligations of such Person (other than trade debt incurred in the
ordinary course of business), (i) represented by notes payable, or drafts
accepted, in each case representing extensions of credit, (ii) evidenced by
bonds, debentures, notes or similar instruments, or (iii) constituting
purchase money indebtedness, conditional sales contracts, title retention
debt instruments or other similar instruments, upon which interest charges
are customarily paid or that are issued or assumed as full or partial
payment for property;
(c) obligations of such Person in respect of mandatorily redeemable
Securities issued by such Person;
(d) Capitalized Lease obligations of such Person;
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(e) all reimbursement obligations of such Person under any letters of
credit or acceptances (whether or not the same have been presented for
payment); and
(f) all Debt of other Persons which (i) such Person has Guaranteed or
(ii) are secured by a Lien on any property of such Person (whether or not
such Person has assumed liability with respect to such Debt).
Debt to Consolidated EBITDA Ratio - means, for any Four-Quarter Period of
determination, the ratio of (a) Debt of the Company and the Restricted
Subsidiaries as determined on a consolidated basis at the end of such period to
(b) Consolidated EBITDA for such period.
Default - means an event or condition the occurrence of which would, with
the lapse of time or the giving of notice or both, become an Event of Default.
DOL - means the Department of Labor of the United States of America or any
successor organization thereof.
Dollars or $ - means United States of America dollars.
Effective Date - means October 12, 1999.
Environmental Protection Law - means any federal, state, county, regional
or local law, statute or regulation (including, without limitation, CERCLA, RCRA
and SARA) enacted in connection with or relating to the protection or regulation
of the environment, including, without limitation, those laws, statutes and
regulations regulating the disposal, removal, production, storing, refining,
handling, transferring, processing or transporting of Hazardous Substances, and
any regulations, issued or promulgated in connection with such statutes by any
Governmental Authority and any orders, decrees or judgments issued by any court
of competent jurisdiction in connection with any of the foregoing.
As used in this definition:
CERCLA - means the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as amended from time to time
(by SARA or otherwise), and all rules and regulations promulgated in
connection therewith.
RCRA - means the Resource Conservation and Recovery Act of 1976,
as amended from time to time, and all rules and regulations issued in
connection therewith.
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SARA - means the Superfund Amendments and Reauthorization Act of
1986, as amended from time to time, and all rules and regulations
promulgated in connection therewith.
Equity Issuance - has the meaning specified in the Intercreditor Agreement
(as in effect on the Effective Date).
ERISA - means the Employee Retirement Income Security Act of 1974, as
amended from time to time.
ERISA Affiliate - means any corporation or trade or business that
(i) is a member of the same controlled group of corporations (within
the meaning of section 414(b) of the IRC) as the Company, or
(ii) is under common control (within the meaning of section 414(c) of
the IRC) with the Company.
Event of Default - Section 10.1.
Existing Reimbursement Agreements - means (a) that certain Amended and
Restated Reimbursement Agreement, dated as of October 12, 1999, among the
Company, American Steel & Wire Corporation and Bank of America, N.A., (b) that
certain Reimbursement Agreement, dated as of October 1, 1996, between PNC Bank,
National Association successor to PNC Bank, Kentucky, Inc. and the Company, and
(c) that certain Reimbursement Agreement, dated as of August 15, 1995, between
the Company and PNC Bank, National Association, successor to PNC Bank, Kentucky,
Inc.
Fair Market Value - means, at any time, with respect to any Property, the sale
value of such Property that would be realized in an arm's-length sale at such
time between an informed and willing buyer, and an informed and willing seller,
under no compulsion to buy or sell, respectively.
Financing Documents - means this Agreement, the Notes, the Omnibus Collateral
Agreement, the Guaranty Agreement, the Intercreditor Agreement, the Security
Documents and all other documents, instruments and agreements executed in
connection therewith or contemplated thereby, as the same may be amended,
restated or otherwise modified from time to time.
Fixed Charge Coverage Ratio - means, with respect to any period of
determination, the ratio of (a) Consolidated EBITDAR for such period to (b) the
sum of (i) Consolidated Interest Expense for such period plus (ii) Rental
Expense for such period plus (iii) the aggregate amount of all scheduled
principal payments on
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Debt made by the Company and the Restricted Subsidiaries during such period
(excluding any payments made by the Company to PNC Bank, National Association in
respect of reimbursement obligations owing in connection with Irrevocable Letter
of Credit No. 14321 dated August 30, 1995 issued by PNC Bank, Kentucky, Inc. for
the benefit of PNC Bank, Kentucky, Inc. (predecessor to The Chase Manhattan
Trust Company, National Association), as Trustee and having an initial stated
amount of $10,493,151), plus (iv) the aggregate amount of all cash dividends
paid by the Company with respect to any of its capital stock during such period.
Foreign Pension Plan - means any plan, fund or other similar program
(a) established or maintained outside of the United States of America
by any one or more of the Company or the Subsidiaries primarily for the
benefit of the employees (substantially all of whom are aliens not residing
in the United States of America) of the Company or such Subsidiaries which
plan, fund or other similar program provides for retirement income for such
employees or results in a deferral of income for such employees in
contemplation of retirement, and
(b) not otherwise subject to ERISA.
Four-Quarter Period - means a period of four full consecutive fiscal quarters
of the Company and the Restricted Subsidiaries, taken together as one accounting
period, and unless set forth herein to the contrary, shall mean the four full
consecutive fiscal quarters of the Company and the Restricted Subsidiaries
ending on (or most recently ending before) the date of any computation of any
given financial ratio or covenant contained herein.
GAAP - means accounting principles as promulgated from time to time in
statements, opinions and pronouncements by the American Institute of Certified
Public Accountants and the Financial Accounting Standards Board and in such
statements, opinions and pronouncements of such other entities with respect to
financial accounting of for-profit entities as shall be accepted by a
substantial segment of the accounting profession in the United States.
Governmental Authority - means
(a) the government of
(i) the United States of America and any State or other
political subdivision thereof, or
(ii) any jurisdiction (y) in which the Company or any Subsidiary
conducts all or any part of its business or (z) that
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asserts jurisdiction over the conduct of the affairs or Properties of
the Company or any Subsidiary, or
(b) any entity exercising executive, legislative, judicial, regulatory
or administrative functions of, or pertaining to, any such government.
Guarantor - means, at any time, any Restricted Subsidiary that is a
Guarantor at such time under the Guaranty Agreement.
Guaranty - means with respect to any Person (for the purposes of this
definition, the "Guarantor") any obligation (except the endorsement in the
ordinary course of business of negotiable instruments for deposit or collection)
of such Person guaranteeing or in effect guaranteeing any indebtedness, dividend
or other obligation of any other Person (the "Primary Obligor") in any manner,
whether directly or indirectly, including (without limitation) obligations
incurred through an agreement, contingent or otherwise, by the Guarantor:
(a) to purchase such indebtedness or obligation or any Property or
assets constituting security therefor;
(b) to advance or supply funds
(i) for the purpose of payment of such indebtedness or
obligation, or
(ii) to maintain working capital or other balance sheet
condition or any income statement condition of the Primary Obligor or
otherwise to advance or make available funds for the purchase or
payment of such indebtedness or obligation;
(c) to lease Property or to purchase Securities or other Property or
services primarily for the purpose of assuring the owner of such
indebtedness or obligation of the ability of the Primary Obligor to make
payment of the indebtedness or obligation; or
(d) otherwise to assure the owner of the indebtedness or obligation of
the Primary Obligor against loss in respect thereof.
For purposes of computing the amount of any Guaranty, in connection with any
computation of indebtedness or other liability, it shall be assumed that the
indebtedness or other liabilities that are the subject of such Guaranty are
direct obligations of the issuer of such Guaranty.
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Guaranty Agreement - means that certain Guaranty Agreement, dated as of the
Effective Date, entered into by each of the Restricted Subsidiaries identified
on the signature pages thereto in favor of the Collateral Agent, as the same may
be amended, restated, modified or supplemented (including to add new
Guarantors), and as in effect from time to time.
Hazardous Substances - means any and all pollutants, contaminants, toxic or
hazardous wastes or any other substances that might pose a hazard to health or
safety, the removal of which may be required or the generation, manufacture,
refining, production, processing, treatment, storage, handling, transportation,
transfer, use, disposal, release, discharge, spillage, seepage, or filtration of
which is or shall be restricted, prohibited or penalized by any applicable law.
Indebtedness - means, at any time, with respect to any Person, without
duplication,
(a) its liabilities for borrowed money (whether or not evidenced by a
Security) and its obligations in respect of mandatorily redeemable
preferred stock;
(b) any liabilities for borrowed money secured by any Lien existing on
Property owned by such Person (whether or not such liabilities have been
assumed);
(c) any obligations in respect of any Capitalized Lease of such
Person;
(d) the present value of all payments due under any arrangement for
retention of title or any conditional sale agreement (other than a
Capitalized Lease) discounted at the implicit rate, if known, with respect
thereto or, if unknown, at 8% per annum;
(e) obligations of such Person in respect of letters of credit or
instruments serving a similar function issued or accepted by banks and
other financial institutions for the account of such Person (whether or not
representing obligations for borrowed money); and
(f) any Guaranty of such Person of any Indebtedness of another Person.
Institutional Investor - means the Purchasers, any affiliate of any of the
Purchasers, and any holder of Notes that is an "accredited investor" as defined
in section 2(15) of the Securities Act.
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Intercreditor Agreement - means that certain Collateral Agency and
Intercreditor Agreement dated as of the Effective Date, among the Collateral
Agent, the Banks, the L/C Issuers, the holders of the 1993 Notes, the holders of
the Notes, The Chase Manhattan Trust Company, National Association, as successor
to PNC Bank, National Association, as successor to PNC Bank, Kentucky, Inc., in
the capacity specified therein, First Union National Bank, in the capacity
specified therein, the Company and each of the Restricted Subsidiaries
identified on the signature pages thereto, as amended from time to time.
Investment - means any investment, made in cash or by delivery of Property,
by the Company or any Restricted Subsidiary (x) in any Person, whether by
acquisition of stock, indebtedness or other obligation or Security, or by loan,
Guaranty, advance or capital contribution, or otherwise, or (y) in any Property.
IRC - means the Internal Revenue Code of 1986, together with all rules and
regulations promulgated pursuant thereto, as amended from time to time.
IRS - means the Internal Revenue Service and any successor agency.
L/C Issuer - means, with respect to the Existing Reimbursement Agreements,
Bank of America, N.A. and PNC Bank, National Association, as applicable.
Lien - means any interest in Property constituting any pledge, assignment,
hypothecation, mortgage, security interest, deposit arrangement, conditional
sale or title retaining contract, sale and leaseback transaction, financing
statement filing, lessor's or lessee's interest under any lease, subordination
of any claim or right, or any type of lien, charge, encumbrance, preferential
arrangement or other claim or right. The term "Lien" includes, with respect to
stock, stockholder agreements, voting trust agreements, buy-back agreements and
all similar arrangements. For the purposes hereof, the Company and each
Subsidiary is deemed to be the owner of any Property that it shall have acquired
or holds subject to a conditional sale agreement, Capitalized Lease or other
arrangement pursuant to which title to the Property has been retained by or
vested in some other Person for security purposes, and such retention or vesting
is deemed a Lien.
Majority Holders - means, at any time, the holders of at least fifty-one
percent (51%) in principal amount of the Notes at the time outstanding
(exclusive of Notes then owned by any one or more of the Company, any Restricted
Subsidiary, any Affiliate and any officer or director of any thereof).
Make-Whole Amount - means, with respect to any date (the "Payment Date"),
and any principal amount of Notes of any Series required for any reason to be
paid prior to the regularly scheduled maturity thereof on such Payment Date:
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(a) if the Make-Whole Discount Rate, determined with respect to such
principal amount of such Series and such Payment Date,
(i) in the case of the Amended Series A Notes equals or exceeds
six and ninety-six one-hundredths percent (6.96%) per annum,
(ii) in the case of the Amended Series B Notes equals or exceeds
seven and seven one-hundredths percent (7.07%) per annum, or
(iii) in the case of the Amended Series C Notes equals or
exceeds seven and seventeen one-hundredths percent (7.17%) per annum,
then Zero Dollars ($0); or
(b) if the Make-Whole Discount Rate, determined with respect to such
principal amount of such Series and such Payment Date,
(i) in the case of the Amended Series A Notes is less than six
and ninety-six one-hundredths percent (6.96%) per annum,
(ii) in the case of the Amended Series B Notes is less than
seven and seven one-hundredths percent (7.07%) per annum, or
(iii) in the case of the Amended Series C Notes is less than
seven and seventeen one-hundredths percent (7.17%) per annum,
then
(A) the sum of the present values of the then remaining
scheduled payments of principal and interest for the Notes of any
Series (in each case, on the basis of the interest rate
applicable to the Original Notes of such Series) that would be
payable in respect of such principal amount of such Series but
for such prepayment or acceleration, minus
(B) such principal amount of such Series plus the amount of
interest accrued on such principal amount since the scheduled
interest payment date immediately preceding such Payment Date.
In determining such present values, a discount rate equal to the Make-Whole
Discount Rate (with respect to the Payment Date and such principal amount of
such Series) divided by two (2), and a discount period of six (6) months of
thirty (30) days each, shall be used.
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Make-Whole Discount Rate - means, with respect to any date and any
principal amount of Notes of any Series required for any reason to be paid prior
to the regularly scheduled maturity thereof on such date, the sum of
(a) the Treasury Rate with respect to such principal amount of such
Series and such date, plus
(b) if such payment is made
(i) pursuant to Section 5.2(b) hereof, ninety one-hundredths
percent (0.90%) per annum, or
(ii) pursuant to Section 6.1 hereof, ninety-five one-hundredths
percent (0.95%) per annum, or
(iii) pursuant to any provision of this Agreement other than
Section 5.2(b) or Section 6.1 hereof, fifty one-hundredths percent
(0.50%) per annum.
As used in this definition only:
Remaining Dollar-Years - means, with respect to any date and any principal
amount of Notes of any Series being paid prior to the regularly scheduled
maturity thereof for any reason on such date, the result obtained by
(a) multiplying, in the case of each required payment of
principal (including payment at maturity) that would be payable in
respect of such principal amount being so prepaid but for such
prepayment,
(i) an amount equal to such required payment of
principal, by
(ii) the number of years (calculated to the nearest one-
twelfth (1/12)) that will elapse between such date and the date
such required principal payment would be due if such prepayment
had not occurred, and
(b) calculating the sum, with respect to each of such required
payments of principal, of each of the products obtained in the
preceding subsection (a).
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Treasury Rate - means, with respect to any date and any principal amount of
Notes of any Series required for any reason to be paid prior to the
regularly scheduled maturity thereof on such date,
(a) the yield reported as of 10:00 a.m., New York City time, on
the second Business Day preceding the date of payment, on the display
designated as "Page 678" on the Bridge Telerate (or such other display
as may replace Page 678 on the Bridge Telerate) (or, if not available,
any other nationally recognized trading screen reporting on-line
intraday trading in United States government Securities) providing the
most current yields for actively traded United States Treasury
securities with maturities corresponding to the remaining Weighted
Average Life to Maturity on such date of such principal amount of the
Notes of such Series (such Weighted Average Life to Maturity being
determined as of the date of such calculation and rounded to the
nearest month), or
(b) if and only if such Bridge Telerate ceases to exist or fails
to report such yield, such yield as reported on a reasonably
comparable electronic service as may be designated by the Majority
Holders, or
(c) if and only if such Bridge Telerate ceases to exist or fails
to report such yield and the Majority Holders shall fail to agree upon
a comparable electronic service pursuant to clause (b) of this
definition, such yield reported under the heading "Week Ending" for
the week most recently ended and under the caption "Treasury Constant
Maturities" of the maturity corresponding to the remaining Weighted
Average Life to Maturity on such date of such principal amount of the
Notes being prepaid or accelerated (such Weighted Average Life to
Maturity being determined as of the date of such calculation and
rounded to the nearest month) as most recently published and made
available to the public in the statistical release designated
"H.15(519)" or any successor publication that is published weekly by
the Federal Reserve System and that establishes yields on actively
traded United States Treasury securities or, if no such successor
publication is available, then any other source of current information
in respect of interest rates on the securities of the United States of
America that is generally available and, in the judgment of the
Majority Holders, provides information reasonably comparable to the
H.15(519) statistical release.
If no maturity exactly corresponds to such rounded Weighted Average Life to
Maturity, yields for the two (2) most closely corresponding published
maturities next above and below such rounded Weighted Average Life to
Maturity shall be calculated pursuant to the immediately preceding sentence
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and the Treasury Rate shall be interpolated from such yields on a straight-
line basis, rounding with respect to each such relevant period to the
nearest month.
Weighted Average Life to Maturity - means, with respect to any date and any
principal amount of Notes of any Series being paid on such date, the number
of years obtained by dividing the Remaining Dollar-Years on such date of
such principal amount of such Series by such principal amount.
Margin Security - means "margin stock" within the meaning of Regulations
T, U and X of the Board of Governors of the Federal Reserve System, 12 C.F.R.,
Chapter II, as amended from time to time.
Material Adverse Effect - means a material adverse effect on (a) the
business, prospects, profits, Properties or condition (financial or otherwise)
of the Company and the Restricted Subsidiaries, taken as a whole, (b) the
ability of the Company or any Restricted Subsidiary to perform its obligations
under any of the Financing Documents to which it is a party, or (c) the validity
or enforceability of any of the Financing Documents.
Moody's - means Moody's Investors Service, Inc.
Mortgages- means, collectively, those certain mortgages and deeds of trust,
dated the Effective Date, executed by the Company and certain Restricted
Subsidiaries, respectively, in favor of the Collateral Agent, as more
specifically identified in the Omnibus Collateral Agreement, together with any
additional mortgages or deeds of trust executed and delivered pursuant to the
terms of this Agreement or any other Financing Documents, in each case as
amended, restated or otherwise modified from time to time.
Multiemployer Plan - means any multiemployer plan (as defined in section
3(37) of ERISA) in respect of which the Company or any ERISA Affiliate is an
"employer" (as defined in section 3 of ERISA).
Multiple Employer Pension Plan - means any employee benefit plan within the
meaning of section 3(3) of ERISA (other than a Multiemployer Plan), subject to
Title IV of ERISA, to which the Company or any ERISA Affiliate and an employer
(as defined in section 3 of ERISA) other than an ERISA Affiliate or the Company
contribute.
Net Proceeds - has the meaning specified in the Intercreditor Agreement, as
in effect on the Effective Date.
Nightingale - means Nightingale Associates, LLC.
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1993 Notes - means the Company's 10.03% Senior Notes due December 15, 2005.
Note Pledge Agreement - means that certain Note Pledge Agreement, dated as
of the Effective Date, executed by the Company in favor of the Collateral Agent,
as amended, restated or otherwise modified from time to time.
Note Purchase Agreements - Section 1.1.
Notes - Section 1.2(f).
Off Balance Sheet Liabilities - means, with respect to any Person, all
obligations of such Person under any synthetic lease, tax retention operating
lease, off balance sheet loan or similar off balance sheet financing if the
transaction giving rise to such obligation (a) is considered indebtedness for
borrowed money for tax purposes but is classified as an operating lease or (b)
does not (and is not required to pursuant to GAAP) appear as a liability on the
balance sheet of such Person.
Omnibus Collateral Agreement - means that certain Omnibus Collateral
Agreement dated as of the Effective Date, executed by the Company and each of
the Restricted Subsidiaries identified on the signature pages thereto in favor
of the Collateral Agent and the Secured Parties (as such term is defined
therein), as amended, restated or otherwise modified from time to time.
Original Bank Commitment Amount - means Three Hundred Million Dollars
($300,000,000).
Original Closing Date - Section 1.3.
Original Note Purchase Agreements - Section 1.1.
Original Notes - Section 1.2(a).
Original Series A Notes - Section 1.2(a)(i).
Original Series B Notes - Section 1.2(a)(ii).
Original Series C Notes - Section 1.2(a)(iii).
OSHA - means the Occupational Safety and Health Act of 1970, together with
all rules, regulations and standards promulgated pursuant thereto, as amended
from time to time.
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PBGC - means the Pension Benefit Guaranty Corporation and any successor
corporation or governmental agency.
PCR - means Pacific Coast Recycling, LLC, a limited liability company
formed under the laws of the State of Delaware.
Pension Plan - means, at any time, any "employee pension benefit plan" (as
defined in section 3 of ERISA) maintained at such time by the Company or any
ERISA Affiliate for employees of the Company or such ERISA Affiliate, excluding
any Multiemployer Plan, but including, without limitation, any Multiple Employer
Pension Plan.
Performance Release Date - means the date on which the Company has
delivered to the Majority Holders evidence satisfactory to the Majority Holders
demonstrating that the Debt to Consolidated EBITDA Ratio calculated as of the
end of two consecutive fiscal quarters of the Company ending after the Effective
Date was less than 3.50 to 1.00.
Permitted Investments - means any of the following Investments:
(a) direct obligations of the United States of America or obligations
guaranteed by the United States of America maturing no later than 365 days
from the date of acquisition;
(b) repurchase agreements or eurodollar deposits with, or certificates
of deposit maturing no later than 365 days from the date of acquisition and
issued by, banks having a combined capital and surplus of over Two Hundred
Fifty Million Dollars ($250,000,000) and rated at least A- by S&P, and at
least A3 by Moody's;
(c) Investment in commercial paper issued by corporations incorporated
in the United States of America or any state thereof and maturing in 270
days or less and rated at least A-1 by S&P or P-1 by Moody's;
(d) Investments in Property used in the ordinary course of business of
the Company and the Guarantors;
(e) Investments in AIR;
(f) Investments in Restricted Subsidiaries which were Restricted
Subsidiaries as of the Effective Date;
(g) Investments in other Persons (whether a Person which became a
Restricted Subsidiary after the Effective Date, an Unrestricted Subsidiary,
or
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any unconsolidated Affiliate (excluding AIR)) not to exceed $3,000,000 in
the aggregate during any period of twelve (12) consecutive months so long
as, in the case of this clause (g) only, immediately prior to, and
immediately after the consummation of such Investment, and after giving
effect thereto, no Default or Event of Default would exist; and
(h) loans and advances to employees (x) for moving, entertainment,
travel and other similar expenses, (y) to finance tax liabilities incurred
with respect to restricted stock bonuses and (z) for other purposes, so
long as all such loans and advances referred to in the preceding clauses
(x) through (z) are made in the ordinary course of the Company's business
consistent with past practices and do not exceed Two Million Dollars
($2,000,000) in aggregate outstanding principal amount at any time.
For purpose of this definition, an "Investment" shall include the direct or
indirect acquisition, in one or a series of transactions, of any ongoing
business, of all or substantially all of the assets of any Person, or of a
division or asset group of a Person with identifiable net earnings (or loss),
whether through purchase of assets, merger or otherwise. Following the
Performance Release Date, the dollar amount limitation contained in the
immediately preceding clause (g) shall no longer apply.
Person - means an individual, partnership, corporation, trust,
unincorporated organization, or a government or agency or political subdivision
thereof.
Placement Memorandum - Section 2.1.
Preferred Stock - means any class of capital stock of a corporation that is
preferred over any other class of capital stock of such corporation as to the
payment of dividends or the payment of any amount upon liquidation or
dissolution of such corporation.
Property - means any interest in any kind of property or asset, whether
real, personal or mixed, and whether tangible or intangible.
Purchase Money Lien - means (a) any Lien held by any Person (whether or not
the seller of such Property) on tangible Property (or a group of related items
of Property the substantial portion of which are tangible) acquired or
constructed by the Company or any Restricted Subsidiary, which Lien secures all
or a portion of the related purchase price or construction costs of such
Property, provided that such Purchase Money Lien (i) encumbers only Property
acquired or constructed after the Effective Date and acquired with the proceeds
of the Debt secured thereby, and (ii) such Lien is not thereafter extended to
any other Property, and (b) any Lien existing on Property of any Person at the
time it becomes a Restricted Subsidiary, provided that (i) no such Lien shall
extend to or cover any Property other than the Property
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subject to such Lien at the time of any such transaction, and (ii) such Lien was
not created in contemplation of any such transaction.
Purchasers - Section 1.1.
Rental Expense - means, with respect to any period of determination, lease,
rental and all other payments made in respect of or in connection with the use
of property (whether real, personal or mixed) by the Company and the Restricted
Subsidiaries with respect to such period other than (a) payments with respect to
Capitalized Leases and (b) payments made with respect to any operating lease
under which the annual lease payments do not exceed Twenty-Five Thousand Dollars
($25,000) in the aggregate.
Restricted Payment - means:
(a) any dividend or other distribution, direct or indirect, on account
of any shares of any class of stock or other equity interest of the Company
or any of the Restricted Subsidiaries now or hereafter outstanding, other
than (i) a dividend payable solely in shares of that class of stock to the
holders of that class and (ii) a distribution of Rights under, and as
defined in, that certain Rights Agreement dated as of January 16, 1996
between the Company and First Union National Bank, successor to First Union
National Bank of North Carolina, as such agreement has been amended prior
to, and is in effect on, the Effective Date;
(b) any redemption, conversion, exchange, retirement, sinking fund or
similar payment, purchase or other acquisition for value, direct or
indirect, of any shares of any class of stock or other equity interest of
the Company or any of the Restricted Subsidiaries now or hereafter
outstanding;
(c) any payment or prepayment of principal of, premium, if any, or
interest on, redemption, conversion, exchange, purchase, retirement,
defeasance, sinking fund or similar payment with respect to, any Debt of
the Company or any of the Restricted Subsidiaries that is subordinated in
right of payment and otherwise to the Notes or the obligations of the
Restricted Subsidiaries that are Guarantors under the Guaranty Agreement;
and
(d) any payment made to retire, or to obtain the surrender of, any
outstanding warrants, options or other rights to acquire shares of any
class of stock of the Company or any of the Restricted Subsidiaries now or
hereafter outstanding.
Restricted Subsidiary - means, at any time, a corporation,
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(a) organized under the laws of the United States, Puerto Rico or
Canada or a jurisdiction thereof at such time,
(b) that conducts substantially all of its business and has
substantially all of its Property within the United States, Puerto Rico and
Canada at such time, and
(c) at least eighty percent (80%) (by number of votes) of each class
of Voting Stock of which and one hundred percent (100%) of all Preferred
Stock and other equity Securities of which are legally and beneficially
owned by the Company and its Wholly-Owned Restricted Subsidiaries at such
time.
S&P - means Standard & Poor's Rating Group, a division of McGraw-Hill, Inc.
SBQ Asset Sale Prepayment - means a prepayment of the Notes in connection
with an Acceptable SBQ Asset Sale pursuant to Section 5.2(d) hereof and in
accordance with Section 4.1(b) of the Intercreditor Agreement.
SBQ Division - means the "special bar quality" division of the Company and
the Subsidiaries which includes (a) all assets of the Company located in, or
related to its operations in, Memphis, Tennessee; (b) the assets of American
Steel and Wire Corporation (and the Company's equity interests in American Steel
and Wire Corporation) but excluding the "missile wire" facility located in
Cleveland, Ohio; and (c) the Company's equity interest in AIR. The SBQ
Division, excluding the Company's equity interest in AIR, is referred to herein
as "SBQ Division (Memphis/Cleveland)."
Securities Act - means the Securities Act of 1933, as amended from time to
time.
Security - means "security" as defined by section 2(1) of the Securities
Act.
Security Agreement - means that certain Security Agreement, dated as of the
Effective Date, executed by the Company and each of the Restricted Subsidiaries
identified on the signature pages thereto in favor of the Collateral Agent, as
amended, restated or otherwise modified from time to time.
Security Documents - means, collectively, the Mortgages, the Security
Agreement, the Trademark/Copyright Security Agreement, the Stock Pledge
Agreement, the Note Pledge Agreement and all other mortgages, deeds of trust,
security agreements, pledges, powers of attorney, assignments, financing
statements and all other written instruments and documents now or hereafter
executed by or on behalf of the Company or any of the Restricted Subsidiaries
for the direct or indirect
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benefit of the holders of the Notes, together with all agreements and documents
referred to therein or contemplated thereby.
Series - means any or all of any series of Notes issued hereunder.
Special Majority Holders -- means, at any time, the holders of at least
sixty-six and two-thirds percent (66-2/3%) in principal amount of the Notes at
the time outstanding (exclusive of the Notes then owned by any one or more of
the Company, any Restricted Subsidiary, any Affiliate or any officer or director
thereof.
Stock Pledge Agreement - means that certain Stock Pledge Agreement, dated
as of the Effective Date, executed by the Company and each of the Restricted
Subsidiaries identified on the signature pages thereto in favor of the
Collateral Agent, as amended, restated or otherwise modified from time to time.
Subsidiary - means, at any time, a corporation of which the Company owns,
directly or indirectly, more than fifty percent (50%) (by number of votes) of
each class of Voting Stock at such time.
Trademark/Copyright Security Agreement - means that certain Trademark and
Copyright Collateral Assignment and Security Agreement, dated as of the
Effective Date, executed by the Company and each of the Restricted Subsidiaries
identified on the signature pages thereto in favor of the Collateral Agent, as
amended, restated or otherwise modified from time to time.
Transaction Documents - has the meaning specified in the Omnibus Collateral
Agreement.
Voting Stock - means capital stock of any class or classes of a corporation
the holders of which are ordinarily, in the absence of contingencies, entitled
to elect corporate directors (or Persons performing similar functions).
Unrestricted Subsidiary - means, at any time, any Subsidiary that has been
designated by the Company's Board of Directors as an Unrestricted Subsidiary,
provided that at the time of such designation
(a) the Subsidiary so designated neither owns, directly or indirectly,
any Debt of the Company or any Restricted Subsidiary or any capital stock
of any Restricted Subsidiary,
(b) no Debt of such Subsidiary is guaranteed by the Company or a
Restricted Subsidiary, and
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(c) no Default or Event of Default would occur as a result of such
designation.
Waiver and Second Amendment - Section 1.1.
Wholly-Owned Restricted Subsidiary - means, at any time, any Restricted
Subsidiary one hundred percent (100%) of all of the Debt and equity Securities
(except directors' qualifying shares) of which are owned by any one or more of
the Company and the Company's other Wholly-Owned Restricted Subsidiaries at such
time.
11.2. GAAP.
All accounting terms, ratios and measurements shall be interpreted or
determined in accordance with GAAP except (x) the Company's compliance with the
covenants contained in Section 8.11, Section 8.12 and, if applicable, Section
8.15 and calculations of the Debt to Consolidated EBITDA Ratio for purposes of
determining the Performance Release Date shall be determined based on the
financial statements required to be provided by the Company pursuant to Section
9.1(b) and (y) as otherwise expressly provided in this Agreement or any other
Financing Document. If a change in GAAP occurs after the Effective Date and
such change materially affects the ability of the Company to comply with the
provisions of Section 8.11, Section 8.12 or Section 8.15 or any other financial
covenant contained in this Agreement, the Company and the holders of the Notes
shall enter into good faith negotiations with a view to amending such provisions
with the desired result that determination of the Company's compliance with such
provisions taking into account such change in GAAP will be as close as possible
to the determination of the Company's compliance with such provisions prior to
such change.
11.3. Directly or Indirectly.
Where any provision herein refers to action to be taken by any Person, or
that such Person is prohibited from taking, such provision shall be applicable
whether such action is taken directly or indirectly by such Person, including
actions taken by or on behalf of any partnership in which such Person is a
general partner.
11.4. Section Headings and Table of Contents and Construction.
(a) Section Headings and Table of Contents, etc. The titles of the
Sections and the Table of Contents appear as a matter of convenience only,
do not constitute a part hereof and shall not affect the construction
hereof. The words "herein," "hereof," "hereunder" and "hereto" refer to
this Agreement as a whole and not to any particular Section or other
subdivision.
(b) Construction. Each covenant contained herein shall be construed
(absent an express contrary provision herein) as being independent
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of each other covenant contained herein, and compliance with any one
covenant shall not (absent such an express contrary provision) be deemed to
excuse compliance with one or more other covenants.
11.5. Governing Law.
THIS AGREEMENT AND THE NOTES SHALL BE GOVERNED BY, AND CONSTRUED AND
ENFORCED IN ACCORDANCE WITH, INTERNAL NEW YORK LAW.
12. MISCELLANEOUS
12.1. Communications.
(a) Method; Address. All communications hereunder or under the Notes
shall be in writing, shall be hand delivered, deposited into the United
States mail (registered or certified mail), postage prepaid, or sent by
overnight courier, and shall be addressed,
(i) if to the Company,
1000 Urban Center Drive, Suite 300
Birmingham, Alabama 35242-2516
Attention: Chief Financial Officer
provided, that the failure to provide any such copy shall in no way
affect the validity of any communication to the Company for purposes
of this Agreement),
or at such other address as the Company shall have furnished in writing to
all holders of the Notes at the time outstanding, and
(ii) if to any of the holders of the Notes,
(A) if such holders are the Purchasers, at their respective
addresses set forth on Annex 1 hereto, and further including any
parties referred to on such Annex 1 that are required to receive
notices in addition to such holders of the Notes, and
(B) if such holders are not the Purchasers, at their
respective addresses set forth in the register for the
registration and transfer of Notes maintained pursuant to Section
8.3 hereof,
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or to any such party at such other address as such party may designate by
notice duly given in accordance with this Section 12.1 to the Company
(which other address shall be entered in such register).
(b) When Given. Any communication so addressed and deposited in the
United States mail, postage prepaid, by registered or certified mail (in
each case, with return receipt requested) shall be deemed to be received on
the third (3rd) succeeding Business Day after the day of such deposit (not
including the date of such deposit). Any notice so addressed and otherwise
delivered shall be deemed to be received when actually received at the
address of the addressee.
12.2. Reproduction of Documents.
This Agreement and all documents relating thereto, including, without
limitation,
(a) consents, waivers and modifications that may hereafter be
executed,
(b) documents received by you at the closing of your purchase of the
Notes (except the Notes themselves), and
(c) financial statements, certificates and other information
previously or hereafter furnished to you or any other holder of Notes,
may be reproduced by any holder of Notes by any photographic, photostatic,
microfilm, micro-card, miniature photographic, digital or other similar process
and each holder of Notes may destroy any original document so reproduced. The
Company agrees and stipulates that any such reproduction shall be admissible in
evidence as the original itself in any judicial or administrative proceeding
(whether or not the original is in existence and whether or not such
reproduction was made by such holder of Notes in the regular course of business)
and that any enlargement, facsimile or further reproduction of such reproduction
shall likewise be admissible in evidence. Nothing in this Section 12.2 shall
prohibit the Company or any holder of Notes from contesting the accuracy of any
such reproduction.
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12.3. Survival.
All warranties, representations, certifications and covenants made by the
Company herein or in any certificate or other instrument delivered by it or on
its behalf hereunder shall be considered to have been relied upon by you and
shall survive the delivery to you of the Amended Notes regardless of any
investigation made by you or on your behalf. The representations made in
Section 1.4 hereof shall be considered to have been relied upon by the Company
and shall survive the execution and delivery of this Agreement and delivery to
you of the Amended Notes regardless of any investigation made by the Company or
on its behalf. All statements in any such certificate or other instrument shall
constitute warranties and representations by the Company hereunder.
12.4. Successors and Assigns.
This Agreement shall inure to the benefit of and be binding upon the
successors and assigns of each of the parties hereto. The provisions hereof are
intended to be for the benefit of all holders, from time to time, of Notes, and
shall be enforceable by any such holder, whether or not an express assignment to
such holder of rights hereunder shall have been made by you or your successor or
assign.
12.5. Amendment and Waiver.
(a) Requirements. This Agreement may be amended, and the observance
of any term hereof may be waived, with (and only with) the written consent
of the Company and the Majority Holders; provided that no such amendment or
waiver of any of the provisions of Section 1 through Section 4 hereof,
inclusive, or any defined term used therein, shall be effective as to any
holder of Notes unless consented to by such holder in writing; provided
that no such amendment or waiver shall, without the written consent of the
holders of all Notes (exclusive of Notes held by the Company, any
Restricted Subsidiary or any Affiliate) at the time outstanding,
(i) subject to the provisions of Section 10.2 and Section 10.3
hereof, change the amount or time of any prepayment or payment of
principal or Make-Whole Amount or the rate or time of payment of
interest (including, without limitation, by amendment of Section 5 or
Section 6 hereof),
(ii) amend Section 10 hereof,
(iii) amend the definition of Majority Holders, or
(iv) amend this Section 12.5.
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The holder of any Note may specify that any such written consent executed
by it shall be effective only with respect to a portion of the Notes held
by it (in which case it shall specify, by Dollar amount, the aggregate
principal amount of Notes with respect to which such consent shall be
effective) and in the event of any such specification such holder shall be
deemed to have executed such written consent only with respect to the
portion of the Notes so specified.
(b) Solicitation of Noteholders.
(i) Solicitation. The Company shall not solicit, request or
negotiate for or with respect to any proposed waiver or amendment of
any of the provisions hereof or of the Notes unless each holder of
Notes (irrespective of the amount of Notes then owned by it) shall be
informed thereof by the Company with sufficient information to enable
it to make an informed decision with respect thereto. Executed or
true and correct copies of any waiver or consent effected pursuant to
the provisions of this Section 12.5 shall be delivered by the Company
to each holder of outstanding Notes forthwith following the date on
which the same shall have been executed and delivered by all holders
of outstanding Notes required to consent or agree to such waiver or
consent.
(ii) Payment. The Company shall not, directly or indirectly, pay
or cause to be paid any remuneration, whether by way of supplemental
or additional interest, fee or otherwise, or grant any security, to
any holder of Notes as consideration for or as an inducement to the
entering into by any holder of Notes of any waiver or amendment of any
of the terms and provisions hereof unless such remuneration is
concurrently paid, or such security is concurrently granted, on the
same terms, ratably to the holders of all Notes then outstanding.
(iii) Scope of Consent. Any consent made pursuant to this
Section 12.5 by a holder of Notes that has transferred or has agreed
to transfer its Notes to the Company, any Restricted Subsidiary or any
Affiliate and has provided or has agreed to provide such written
consent as a condition to such transfer shall be void and of no force
and effect except solely as to such holder, and any amendments
effected or waivers granted or to be effected or granted that would
not have been or would not be so effected or granted but for such
consent (and the consents of all other holders of Notes that were
acquired under the same or similar conditions) shall be void and of no
force and effect, retroactive to the date such amendment or waiver
initially took or takes effect, except solely as to such holder.
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(c) Binding Effect. Except as provided in Section 12.5(b) hereof, any
amendment or waiver consented to as provided in this Section 12.5 shall
apply equally to all holders of Notes and shall be binding upon them and
upon each future holder of any Note and upon the Company whether or not
such Note shall have been marked to indicate such amendment or waiver. No
such amendment or waiver shall extend to or affect any obligation,
covenant, agreement, Default or Event of Default not expressly amended or
waived or impair any right consequent thereon.
12.6. Payments, When Received.
(a) Payments Due on Holidays. If any payment due on, or with respect
to, any Note shall fall due on a day other than a Business Day, then such
payment shall be made on the first Business Day following the day on which
such payment shall have so fallen due; provided that if all or any portion
of such payment shall consist of a payment of interest, for purposes of
calculating such interest, such payment shall be deemed to have been
originally due on such first following Business Day, such interest shall
accrue and be payable to (but not including) the actual date of payment,
and the amount of the next succeeding interest payment shall be adjusted
accordingly.
(b) Payments, When Received. Any payment to be made to the holders of
Notes hereunder or under the Notes shall be deemed to have been made on the
Business Day such payment actually becomes available to such holder at such
holder's bank prior to 11:00 a.m. (local time of such bank).
12.7. Entire Agreement.
This Agreement constitutes the final written expression of all of the terms
hereof and is a complete and exclusive statement of those terms.
12.8. Duplicate Originals, Execution in Counterpart.
Two or more duplicate originals hereof may be signed by the parties, each
of which shall be an original but all of which together shall constitute one and
the same instrument. This Agreement may be executed in one or more counterparts
and shall be effective when at least one counterpart shall have been executed by
each party hereto, and each set of counterparts that, collectively, show
execution by each party hereto shall constitute one duplicate original. Each of
the parties hereto agrees that the contract evidenced by this Agreement shall
for all purposes be considered to have been made in New York, New York.
[Remainder of page intentionally left blank; next page is signature page.]
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If this Agreement is satisfactory to you, please so indicate by
signing the acceptance at the foot of a counterpart hereof and returning such
counterpart to the Company, whereupon this Agreement shall become binding
between us in accordance with its terms.
Very truly yours,
BIRMINGHAM STEEL CORPORATION
By
--------------------------
Name:
Title:
Accepted:
[PURCHASER]
By
--------------------------
Name:
Title:
<PAGE>
EXHIBIT 4.3
October 13, 1999
To Each of the Purchasers Named
In the Amended and Restated Note
Purchase Agreements dated as of
October 12, 1999 with Birmingham
Steel Corporation referred to below:
RE: (i) Amended and Restated Note Purchase Agreement - $130,000,000,
10.03% Senior Notes Due December 15, 2005; (ii) Amended and Restated
Note Purchase Agreement - $76,000,000, 9.71% Series A Senior Notes due
December 15, 2002; $14,000,000, 9.82% Series B Senior Notes due
December 15, 2005; $60,000,000, 9.92% Series C Senior Notes due
December 15, 2005 (collectively, the "Note Purchase Agreements").
Ladies and Gentlemen:
Reference is made to (a) the Note Purchase Agreements, and (b) the Limited
Liability Company Agreement of American Iron Reduction, LLC ("AIR"), of which
Birmingham Steel Corporation (the "Company") is a member, and to the DRI
Purchase Agreement, Sponsor Performance and Indemnity Agreement, Equity
Contribution Agreement, and other agreements and documents executed in
connection with any of the foregoing (collectively, including the Limited
Liability Company Agreement, the "AIR Documents"). Capitalized terms used
herein and not defined herein have the meanings ascribed to them in the AIR
Documents or Note Purchase Agreements, as applicable.
As a condition to your entering into the Waiver and Second Amendment to
Note Purchase Agreement and Waiver and Third Amendment to Note Purchase
Agreement, as applicable, the Company has agreed as follows with respect to the
AIR Documents and the Company's rights and obligations thereunder:
1. Neither the Company nor any Subsidiary of the Company will make any
payment or transfer any asset at any time, pursuant to any of the AIR Documents
or with respect to the purchase of DRI, that (i) is greater than the amount that
the Company is required to pay, or (ii) is made prior to the time that it is due
pursuant to the AIR Documents as in effect on the date hereof, except that (x)
the Company may pay the purchase price for DRI that the Company would be
obligated to pay under the DRI Purchase Agreement if the AIR facility were fully
operational and Completion had occurred, whether or not the AIR facility is not
yet fully operational or Completion has not yet occurred, and (y) the Company
may from time to time advance to AIR, in
<PAGE>
accordance with prior practices of the Company, up to 50% of the expenses
incurred in the ordinary course of AIR's business, if AIR does not have
sufficient cash to pay such expenses and if such advances will be credited
against each subsequent invoice and other amount owed by the Company to DRI
until the amount of such advance is paid in full. The Company acknowledges that
the business plan that it has delivered to you contemplates the Company having
to make the payments referred to in the preceding sentence.
2. Without the written consent of the Special Majority Holders, the
Company will not enter into any agreement for the purpose or having the effect
of terminating the Company's obligations under any of the AIR Documents or
entering into a settlement of any such obligations or any agreement to pay any
of the Company's obligations under any of the AIR Documents prior to the time
that they would otherwise be payable under the AIR Documents, except that the
Company may enter into an agreement to settle all of its obligations under the
AIR Documents if the Company delivers to the Note Purchasers pro forma financial
statements showing that (a) the Company, after giving effect to such settlement
and/or payments, will have sufficient cash to pay all of its obligations as they
become due, and (b) the Company will be in compliance and will remain in
compliance with each of the financial covenants set forth in the Note Purchase
Agreements.
This letter is intended to constitute, and shall constitute, a "Security
Document" (and accordingly a "Financing Document") under each of the Note
Purchase Agreements, and any failure of the Company to carry out its agreements
in this letter shall accordingly constitute an Event of Default under Section
10.1(d) of each of the Note Purchase Agreements upon the expiration of the 30
day grace period provided for therein. This letter will become effective in
accordance with its terms upon the delivery of this letter in connection with
the delivery of the Waiver Documents, without any requirement that any of you
execute or acknowledge receipt of this letter.
Very truly yours,
BIRMINGHAM STEEL CORPORATION
By:
-----------------------------------
Its
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EXHIBIT 10.18
BIRMINGHAM STEEL CORPORATION
1999 DIRECTOR COMPENSATION PLAN
Section 1. Purpose of the Plan.
-------------------
The purpose of the Birmingham Steel Corporation 1999 Director
Compensation Plan (the "Plan") is to provide cash and stock based compensation
to non-employee directors of Birmingham Steel Corporation (the "Company") in
order to encourage the highest level of director performance and to promote
long-term shareholder value by providing such directors with a proprietary
interest in the Company's success and progress through the issuance of shares of
the Company's common stock ("Common Stock").
Section 2. Certain Definitions.
-------------------
(a) "Board" means the Board of Directors of the Company.
(b) "Committee" means the Compensation and Stock Option Committee of
the Board.
(c) "Common Stock" means the common stock of the Company.
(d) "Company" means Birmingham Steel Corporation, a Delaware
corporation.
(e) "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
(f) "Non-Employee Director" means each member of the Board who is not
an employee of the Company or any of its subsidiaries at the date of each grant
or award.
(g) "Plan" means the Birmingham Steel Corporation 1999 Director
Compensation Plan.
(h) "Rule 16b-3" means Rule 16b-3, as currently in effect or as
hereinafter amended or modified, promulgated under the Exchange Act.
Section 3. Administration of the Plan.
--------------------------
The Plan shall be administered by the Committee of the Board of
Directors of the Company. Grants of cash and Common Stock under the Plan shall
be made automatically as provided in Section 6 hereof. However, the Committee
shall have full authority to interpret the Plan, to promulgate such rules and
regulations with respect to the Plan as it deems desirable, and to make
<PAGE>
all other determinations necessary or appropriate for the administration of the
Plan, and such determinations shall be final and binding upon all persons having
an interest in the Plan.
Section 4. Common Stock Subject to the Plan.
--------------------------------
The total number of shares of Common Stock reserved and available for
distribution under the Plan shall be 500,000. Such shares may consist, in whole
or in part, of authorized and unissued shares or treasury shares. In the event
of any merger, reorganization, consolidation, recapitalization, Common Stock
dividend, or other change in corporate structure affecting the Common Stock, a
substitution or adjustment shall be made in the aggregate number of shares
reserved for issuance under the Plan and in the number of shares granted under
the Plan as may be determined to be appropriate by the Committee, in its sole
discretion, provided that the number of shares subject to any award shall always
be a whole number.
Section 5. Participation.
-------------
Each Non-Employee Director shall be eligible to participate in the
Plan.
Section 6. Annual Retainer.
---------------
On the date of each Annual Meeting of Stockholders of Birmingham Steel
Corporation at which directors are elected, commencing with the 1999 Annual
Meeting of Stockholders, each director who is elected to the Board of Directors
at such Annual Meeting and who is not an employee of the Company shall receive
in payment of such director's annual retainer shares of Common Stock with a
market value of $30,000 based on the closing price on the last trading day of
the month preceding such annual meeting, except that cash shall be paid in lieu
of fractional shares.
Section 7. Termination or Amendment of the Plan.
------------------------------------
The Board may suspend or terminate the Plan or any portion thereof at
any time, and the Board may amend the Plan from time to time as may be deemed to
be in the best interests of the Company; except as may be required by applicable
laws or regulations.
Section 8. Section 16.
----------
It is intended that the Plan and any grants made to a person subject
to Section 16 of the Exchange Act meet all of the requirements of Rule 16b-3.
If any provision of the Plan or any award hereunder would disqualify the Plan or
such award, or would otherwise not comply with Rule 16b-3, such provision or
award shall be construed or deemed amended to conform to Rule 16b-3.
Section 9. General Provisions.
------------------
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(a) No Right of Continued Service. Nothing in the Plan shall be
-----------------------------
deemed to create any obligation on the part of the Board to nominate any Non-
Employee Director for reelection by the Company's stockholders.
(b) Payment of Taxes. A Non-Employee Director shall, no later than
----------------
the date as of which the value of any award under this Plan first becomes
includable in the Non-Employee Director's gross income for federal income tax
purposes, make arrangements satisfactory to the Committee regarding payment of
any federal, state, local or FICA taxes of any kind required by law to be
withheld with respect to such award.
(c) Shares. The shares of Common Stock issued under the Plan may be
------
either authorized but unissued shares or shares which have been or may be
reacquired by the Company, as determined from time to time by the Board.
(d) Governing Law. The Plan and all actions taken thereunder shall be
-------------
governed by and construed in accordance with the laws of the State of Delaware
(other than its law respecting choice of law). The Plan shall be construed to
comply with all applicable law, and to avoid liability to the Company or a Non-
Employee Director, including, without limitation, liability under Section 16(b)
of the Exchange Act.
(e) Effective Date of Plan. The Plan shall be effective July 1, 1999.
----------------------
(f) Headings. The headings contained in this Plan are for reference
--------
purposes only and shall not affect the meaning or interpretation of this Plan.
(g) Severability. If any provision of this Plan shall for any reason
------------
be held to be invalid or unenforceable, such invalidity or unenforceability
shall not affect any other provision hereby, and this Plan shall be construed as
if such invalid or unenforceable provision were omitted.
(h) Successors and Assigns. This Plan shall inure to the benefit of
----------------------
and be binding upon each successor and assign of the Company. All obligations
imposed upon a Non-Employee Director, and all rights granted to the Company
hereunder, shall be binding upon the Non-Employee Director's heirs, legal
representatives and successors.
(i) Status of Existing Plan. This Plan supercedes and replaces the
-----------------------
Birmingham Steel Corporation Director's Compensation Plan effective July 1,
1992, as amended May 14, 1993.
-3-
<PAGE>
Exhibit 10.26.5
Execution Copy
FIFTH AMENDMENT TO CREDIT AGREEMENT
THIS FIFTH AMENDMENT TO CREDIT AGREEMENT dated as of October 12, 1999 (this
"Agreement"), by and among BIRMINGHAM STEEL CORPORATION (the "Borrower"), each
of the financial institutions party hereto, and BANK OF AMERICA, N.A., successor
to NationsBank, N.A. (South), as Agent (the "Agent").
WHEREAS, the Borrower, the Lenders, the Swingline Lender and the Agent have
entered into that certain Credit Agreement dated as of March 17, 1997, as
amended as of June 23, 1998, as of September 30, 1998, as of July 27, 1999 and
as of September 28, 1999 (as so amended, the "Credit Agreement");
WHEREAS, the Borrower, the Agent, the Lenders and the Swingline Lender
desire to amend the Credit Agreement upon the terms and conditions set forth
herein;
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged by all of the parties hereto, all
of the parties hereto agree as follows:
Section 1. Amendments to Credit Agreement. Subject to the terms and
------------------------------
conditions hereof, including without limitation, satisfaction of the conditions
contained in Section 2, the parties hereto agree that the Credit Agreement is
amended as follows:
(a) The Credit Agreement is amended by deleting from Section 1.1 the
definition of the terms "Consolidated EBIT", "Consolidated Net Worth" and "Debt
to Capitalization Ratio" in their entirety.
(b) The Credit Agreement is amended by deleting from Section 1.1 the
definitions of the terms "Applicable Facility Fee", "Applicable Margin",
"Consolidated Net Income", "Consolidated Tangible Net Worth", "Loan Document",
"Material Adverse Effect", "Obligations", "Permitted Investments" and "Post-
Default Rate" in their entirety and substituting in their places the following:
"Applicable Facility Fee" means one-half of one percent (0.50%); provided,
--------
however, following the Performance Release Date, so long as the Agent shall
-------
have received the unanimous written consent of the Lenders thereto (and the
execution of the Fifth Amendment by any Lender shall constitute such
Lender's irrevocable consent to such reduction of the Applicable Facility
Fee upon the Performance Release Date), the Applicable Facility Fee shall
equal seven-twentieths of one percent (0.350%).
"Applicable Margin" means, subject to adjustment as provided herein, (a)
two percent (2.00%) with respect to LIBOR Loans and (b) one-half of one
percent (0.50%)
<PAGE>
with respect to Base Rate Loans. If the Borrower shall fail to consummate
the sale of all of the SBQ Division (Memphis/Cleveland) on or before
January 31, 2001 (or such later date as the Requisite Lenders may agree to
in writing), the Applicable Margin for both Types of Loans shall be
increased by 1.00% above the Applicable Margin set forth in the first
sentence of this definition; provided, however, upon receipt by the Agent
of evidence reasonably satisfactory to the Agent that such sale shall have
been consummated, the Applicable Margin for both Types of Loans shall be
decreased to 0.50% above the Applicable Margin set forth in the first
sentence of this definition on and after the effective date of such sale.
Following the Performance Release Date, so long as the Agent shall have
received the unanimous written consent of the Lenders thereto (and the
execution of the Fifth Amendment by any Lender shall constitute such
Lender's irrevocable consent to such reduction of the Applicable Margin
upon the Performance Release Date), the Applicable Margin for (x) LIBOR
Loans shall equal one and two-fifths of one percent (1.40%) and (b) Base
Rate Loans shall equal zero percent (0.00%).
"Consolidated Net Income" means, with respect to the Borrower and its
Restricted Subsidiaries for any period of computation thereof, the net
income (or loss) of the Borrower and its Restricted Subsidiaries on a
consolidated basis for such period; provided, however, that the following
-------- -------
shall be excluded when determining Consolidated Net Income: (a) any item of
gain or loss resulting from the sale, conversion or other disposition of
plant, property, and equipment; (b) gains or losses on the acquisition,
retirement, sale or other disposition of capital stock and other securities
of the Borrower and its Restricted Subsidiaries; (c) the income (or loss)
for such fiscal period of any Person prior to the date such Person becomes
a Restricted Subsidiary of the Borrower or is merged into or consolidated
with the Borrower or any of its Restricted Subsidiaries, or such Person's
assets are acquired by the Borrower or any of its Restricted Subsidiaries;
(d) any write-up of any asset; (e) any other net gains or losses of an
extraordinary nature as determined in accordance with GAAP; (f) any
earnings attributable to the amortization of negative goodwill; (g) that
portion of net earnings of any Restricted Subsidiary that is unavailable
for payment as dividends to the Borrower or another Restricted Subsidiary
as a result of a legal or contractual prohibition, unless such portion of
such net earnings is legally available for either: (x) reimbursement to the
Borrower or another Restricted Subsidiary for advances, loans or allocated
expenses, or (y) advances or loans to the Borrower or another Restricted
Subsidiary; (h) pre-operating/start-up costs as would be set forth in the
financial statements of the Borrower and its Restricted Subsidiaries for
such period prepared in accordance with GAAP; provided, however, the amount
of such costs excluded for a fiscal quarter occurring during any such
period shall not exceed the following amounts: (w) $10,000,000 for the
fiscal quarter ending on September 30, 1999; (x) $8,000,000 for the fiscal
quarter ending December 31, 1999; (y) $5,000,000 for the fiscal quarter
ending March 31, 2000; and (z) $0 for each fiscal quarter ended thereafter;
(i) any losses on disposal of the SBQ Division; and (j) any non-cash
charges relating to the restructuring of, or write-down of the investments
of the Borrower in, AIR and PCR. For purposes of calculating Consolidated
Net Income, the amount shall include income (or loss) from both continuing
and discontinued operations, except that adjustments to the
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<PAGE>
allowance for discontinued operations and the related tax effects shall be
excluded from such amount.
"Consolidated Tangible Net Worth" means (a) the Borrower's stockholder's
equity which would appear as such on a consolidated balance sheet of the
Borrower and its Subsidiaries prepared in accordance with GAAP less (b) all
----
intangible items reflected therein, including all goodwill, all intangible
plant expansion costs, all unamortized debt discount and expense,
unamortized research and development expense, unamortized deferred charges,
patents, trademarks, service marks, trade names, copyrights, unamortized
excess cost of investment in Subsidiaries over equity at dates of
acquisition, and all similar items which should properly be treated as
intangibles in accordance with GAAP.
"Loan Document" means this Agreement, each Note, the Guarantee, the
Security Agreement, the Pledge Agreement, each Mortgage, the
Trademark/Copyright Security Agreement, the Note Pledge Agreement, each
document, instrument or agreement executed and delivered by the Borrower to
or in favor of the Agent in connection with or relating to any Letter of
Credit, the Collateral Agency Agreement, the Omnibus Agreement, and each
other document or instrument now or hereafter executed and delivered by the
Borrower or any Restricted Subsidiary to or in favor of the Agent, the
Swingline Lender or any Lender in connection with, pursuant to or relating
to this Agreement.
"Material Adverse Effect" means a materially adverse effect on (a) the
business, assets, liabilities, financial condition or results of operations
of the Borrower and its Restricted Subsidiaries taken as a whole, (b) the
ability of the Borrower or any Restricted Subsidiary to perform its
obligations under any Loan Document to which it is a party, (c) the
validity or enforceability of any of the Loan Documents, or (d) the timely
payment of the principal of or interest on the Loans or other amounts
payable in connection therewith.
"Obligations" means, individually and collectively: (a) the aggregate
principal balance of, and all accrued and unpaid interest on, all Loans;
(b) all Reimbursement Obligations and all other Letter of Credit
Liabilities; and (c) all other indebtedness, liabilities, obligations,
covenants and duties of the Borrower owing to the Agent, any Lender, the
Swingline Lender or NCMI of every kind, nature and description, under or in
respect of this Agreement or any of the other Loan Documents, including,
without limitation, all Fees and indemnification obligations, whether
direct or indirect, absolute or contingent, due or not due, contractual or
tortious, liquidated or unliquidated, and whether or not evidenced by any
promissory note.
"Permitted Investments" means any of the following Investments: (a)
direct obligations of the United States of America or obligations
guaranteed by the United States of America maturing no later than 365 days
from the date of acquisition; (b) repurchase agreements or eurodollar
deposits with or certificates of deposit maturing
-3-
<PAGE>
no later than 365 days from the date of acquisition and issued by banks
having a combined capital and surplus of over $250,000,000 and rated at
least A- by Standard & Poor's Rating Group, a division of McGraw-Hill, Inc.
("S&P") and at least A3 by Moody's Investor Service, Inc. ("Moody's"); (c)
Investment in commercial paper issued by corporations incorporated in the
United States of America or any state thereof and maturing in 270 days or
less and rated at least A-1 by S&P or P-1 by Moody's; (d) Investments in
Property used in the ordinary course of business of the Borrower and the
Guarantors; (e) Investments in AIR; (f) Investments in Restricted
Subsidiaries which were Restricted Subsidiaries as of the Fifth Amendment
Date; (g) Investments in other Persons (whether a Person which became a
Restricted Subsidiary after the Fifth Amendment Date, an Unrestricted
Subsidiary, or any unconsolidated Affiliate (excluding AIR)) not to exceed
$3,000,000 in the aggregate during any period of twelve consecutive months
so long as, in the case of this clause (g) only, immediately prior to, and
immediately after the consummation of such Investment, and after giving
effect thereto, no Default or Event of Default would exist; and (h) loans
and advances to employees (x) for moving, entertainment, travel and other
similar expenses, (y) to finance tax liabilities incurred with respect to
restricted stock bonuses and (z) for other purposes, so long as all such
loans and advances referred to in the preceding clauses (x) through (z) are
made in the ordinary course of the Borrower's business consistent with past
practices and do not exceed $2,000,000 in aggregate outstanding principal
amount at any time. For purpose of this definition, an Investment shall
include the direct or indirect acquisition, in one or a series of
transactions, of any ongoing business, of all or substantially all of the
assets of any Person, or of a division or asset group of a Person with
identifiable net earnings (or loss), whether through purchase of assets,
merger or otherwise. Following the Performance Release Date, the dollar
amount limitation contained in the immediately preceding clause (g) shall
no longer apply.
"Post-Default Rate" means, in respect of any principal of any Loan,
any Reimbursement Obligation or any other Obligation that is not paid when
due (whether at stated maturity, by acceleration, by optional or mandatory
prepayment or otherwise), a rate per annum during the period from and
including the due date to but excluding the date on which such amount is
paid in full equal to two percent (2.0%) plus the interest rate for Base
Rate Loans as provided in Section 2.5.(a); provided that, if the amount so
in default is the principal of a LIBOR Loan or a Bid Rate Loan and the due
date thereof is a day other than the last day of the Interest Period
therefor, the "Post-Default Rate" for such principal shall be, for the
period from and including such due date to but excluding the last day of
the Interest Period, two percent (2.0%) plus the interest rate for such
Loan as provided in Section 2.5.(a), and thereafter, the rate provided for
above in this definition.
(c) Section 1.1 of the Credit Agreement is hereby amended by adding the
definitions of the following terms thereto in the appropriate alphabetical
order:
"AIR" means American Iron Reduction, L.L.C., a limited liability
company organized under the laws of the State of Delaware.
-4-
<PAGE>
"Amount Limitation" has the meaning given that term in Section
2.8.(b)(ii).
"Available Cash" means the aggregate amount of all available cash,
cash equivalents and other funds on deposit in, held in or credited to, any
deposit account, savings account, investment account or other similar account
maintained by the Borrower or any Subsidiary with any financial institution or
any other Person.
"BSE" means Birmingham Southeast, LLC, a limited liability company
organized under the laws of the State of Delaware.
"Collateral Agent" means State Street Bank and Trust Company, solely
in its capacity as Collateral Agent under the Collateral Agency Agreement.
"Collateral Agency Agreement" means that certain Collateral Agency and
Intercreditor Agreement dated as of October 12, 1999 by and among the Borrower,
the Restricted Subsidiaries, the Secured Parties described therein and the
Collateral Agent.
"Consolidated EBITDA" means, for any period, the sum of (a)
Consolidated Net Income for such period, plus (b) the aggregate amount of (i)
taxes imposed on, or measured by, income or excess profits, (ii) Consolidated
Interest Expense, and (iii) depreciation and amortization for such period (to
the extent, and only to the extent, that any such amount in clauses (i), (ii) or
(iii) was deducted in the computation of Consolidated Net Income for such
period), in each case accrued for such period by the Borrower and the Restricted
Subsidiaries, determined on a consolidated basis for such Persons.
"Consolidated EBITDAR" means, for any period, the sum of (a)
Consolidated EBITDA for such period, plus (b) Rental Expense for such period (to
the extent, and only to the extent, deducted in the computation of Consolidated
Net Income for such period).
"Debt to Consolidated EBITDA Ratio" means, for any Four-Quarter
Period, the ratio of (a) Debt of the Borrower and its Restricted Subsidiaries as
determined on a consolidated basis at the end of such period to (b) Consolidated
EBITDA for such period.
"Disposition" has the meaning given that term in the Collateral Agency
Agreement (as in effect on the Fifth Amendment Date).
"Equity Issuance" has the meaning given that term in the Collateral
Agency Agreement (as in effect on the Fifth Amendment Date).
"Existing Note Purchase Agreements" means (a) that certain Amended and
Restated Note Purchase Agreement dated as of October 12, 1999 executed by the
Borrower in respect of the Borrower's 10.03% Senior Notes due December 15, 2005
in the aggregate amount of $130,000,000 and (b) that certain Amended and
Restated Note
-5-
<PAGE>
Purchase Agreement dated as of October 12, 1999 executed by the Borrower in
respect of the Borrower's (i) 9.71% Series A Senior Notes due December 15, 2002
in the aggregate amount of $76,000,000; (ii) 9.82% Series B Senior Notes due
December 15, 2005 in the aggregate amount of $14,000,000; and (iii) 9.92% Series
C Senior Notes due December 15, 2005 in the aggregate amount of $60,000,000.
"Existing Reimbursement Agreements" means (a) that certain Amended and
Restated Reimbursement Agreement dated as of October 12, 1999 among the
Borrower, American Steel & Wire Corporation, and Bank of America, N.A.; (b) that
certain Reimbursement Agreement dated as of October 1, 1996 between the Borrower
and PNC Bank, National Association, successor to PNC Bank, Kentucky, Inc.; and
(c) that certain Reimbursement Agreement dated as of August 15, 1995 between the
Borrower and PNC Bank, National Association, successor to PNC Bank, Kentucky,
Inc.
"Fixed Charge Coverage Ratio" means, with respect to any period of
determination, the ratio of (a) Consolidated EBITDAR for such period to (b) the
sum of (i) Consolidated Interest Expense for such period plus (ii) Rental
----
Expense for such period plus (iii) the aggregate amount of all scheduled
principal payments on Debt made by the Borrower and its Restricted Subsidiaries
during such period (excluding any payments made by the Borrower to PNC Bank,
National Association in respect of reimbursement obligations owing in connection
with Irrevocable Letter of Credit No. 14321 dated August 30, 1995 issued by PNC
Bank, Kentucky, Inc. for the benefit of PNC Bank, Kentucky, Inc. (predecessor to
Chase Manhattan Trust Company), as Trustee and having an initial stated amount
of $10,493,151), plus (iv) the aggregate amount of all cash dividends paid by
----
the Borrower with respect to any of its capital stock during such period.
"Fifth Amendment" means that certain Fifth Amendment to Credit
Agreement dated as of October 12, 1999 by and among the Borrower, the Lenders
party thereto and the Agent.
"Fifth Amendment Date" means the date on which all of the conditions
precedent set forth in Section 2 of the Fifth Amendment have been satisfied or
waived in writing by the Requisite Lenders.
"Guarantee" has the meaning given that term in the Omnibus Agreement.
"Guarantor" means each Person that executes, or otherwise becomes a
party to, the Guarantee.
"LC Issuer" means with respect to the Existing Reimbursement
Agreements, Bank of America, N.A. or PNC Bank, National Association, as
applicable.
"Mortgage" has the meaning given that term in the Omnibus Agreement.
-6-
<PAGE>
"Net Proceeds" has the meaning given that term in the Collateral
Agency Agreement (as in effect on the Fifth Amendment Date).
"Note Pledge Agreement" has the meaning given that term in the Omnibus
Agreement.
"Off Balance Sheet Liabilities" means, with respect to a Person, all
obligations of such Person under any synthetic lease, tax retention operating
lease, off balance sheet loan or similar off balance sheet financing if the
transaction giving rise to such obligation (a) is considered indebtedness for
borrowed money for tax purposes but is classified as an operating lease or (b)
does not (and is not required to pursuant to generally accepted accounting
principles) appear as a liability on the balance sheet of such Person.
"Omnibus Agreement" means that certain Omnibus Collateral Agreement
dated as of October 12, 1999 executed by the Borrower and the Restricted
Subsidiaries in favor of the Collateral Agent and the Secured Parties identified
therein.
"Outstanding Credit" means the aggregate principal amount of all
outstanding Revolving Loans, together with the aggregate amount of all Letter of
Credit Liabilities, the aggregate principal amount of all outstanding Swingline
Loans and the aggregate principal amount of all outstanding Bid Rate Loans.
"PCR" means Pacific Coast Recycling, LLC, a limited liability company
formed under the laws of the State of Delaware.
"Performance Release Date" means the date on which the Borrower has
delivered to the Agent evidence satisfactory to the Agent demonstrating that the
Debt to Consolidated EBITDA Ratio as of the end of two consecutive fiscal
quarters ending after the Fifth Amendment Date was less than 3.50 to 1.00.
"Pledge Agreement" has the meaning given the term "Stock Pledge
Agreement" in the Omnibus Agreement.
"Priority Threshold Amount" means an amount equal to $235,000,000 as
such amount may reduced from time to time in accordance with the provisions of
Section 2.12.(d).
"Rental Expense" means, with respect to any period of determination,
lease, rental and all other payments made in respect of or in connection with
the use of property (whether real, personal or mixed) by the Borrower and its
Restricted Subsidiaries with respect to such period other than (a) payments with
respect to Capitalized Leases and (b) payments made with respect to any
operating lease under which the annual lease payments do not exceed $25,000 in
the aggregate.
-7-
<PAGE>
"Restricted Payment" means: (a) any dividend or other distribution,
direct or indirect, on account of any shares of any class of stock or other
equity interest of the Borrower or any of its Restricted Subsidiaries now
or hereafter outstanding, other than (i) a dividend payable solely in
shares of that class of stock to the holders of that class and (ii) a
distribution of Rights under, and as defined in, that certain Rights
Agreement dated as of January 16, 1996 between the Borrower and First Union
National Bank, successor to First Union National Bank of North Carolina, as
such agreement has been amended prior to, and is in effect on, the Fifth
Amendment Date; (b) any redemption, conversion, exchange, retirement,
sinking fund or similar payment, purchase or other acquisition for value,
direct or indirect, of any shares of any class of stock or other equity
interest of the Borrower or any of its Restricted Subsidiaries now or
hereafter outstanding; (c) any payment or prepayment of principal of,
premium, if any, or interest on, redemption, conversion, exchange,
purchase, retirement, defeasance, sinking fund or similar payment with
respect to, any Debt of the Borrower or any of its Restricted Subsidiaries
that is subordinated in right of payment and otherwise to the Obligations
or the obligations of the Guarantors under or in respect of the Guarantee;
and (d) any payment made to retire, or to obtain the surrender of, any
outstanding warrants, options or other rights to acquire shares of any
class of stock of the Borrower or any of its Restricted Subsidiaries now or
hereafter outstanding.
"SBQ Division" means the "special bar quality" division of the
Borrower and its Subsidiaries which includes (a) all assets of the Borrower
located in, or in related to its operations in, Memphis, Tennessee; (b) the
assets of American Steel and Wire Corporation (and the Borrower's equity
interests in American Steel and Wire Corporation); and (c) the Borrower's
equity interest in AIR. The SBQ Division, excluding the Borrower's equity
interest in AIR and the "missile wire" facility located in Cleveland, Ohio,
is referred to herein as "SBQ Division (Memphis/Cleveland)".
"Security Agreement" has the meaning given that term in the Omnibus
Agreement.
"Trademark/Copyright Security Agreement" has the meaning given that
term in the Omnibus Agreement.
(d) The Credit Agreement is amended by deleting the first sentence of
Section 1.2. thereof in its entirety and substituting in its place the following
two sentences:
All accounting terms, ratios and measurements shall be interpreted or
determined in accordance with GAAP except (x) the Borrower's compliance
with the covenants contained in Section 9.1.(a), (b) and, if applicable,
(e) (and accordingly all applicable calculations contained in any
Compliance Certificate) and calculations of the Debt to Consolidated EBITDA
Ratio for purposes of determining the Performance Release Date shall be
determined based on the financial statements required to be provided by the
Borrower pursuant to Section 8.4.(e) and (y) as otherwise expressly
provided in this Agreement or any other Loan Document. If a change in GAAP
occurs after the Fifth
-8-
<PAGE>
Amendment Date and such change materially affects the ability of the
Borrower to comply with the provisions of Section 9.1. or any other
financial covenant contained in this Agreement, the parties hereto shall
enter into good faith negotiations with a view to amending such Section
with the desired result that determination of the Borrower's compliance
with such Section taking into account such change in GAAP will be as close
as possible to the determination of the Borrower's compliance with such
Section prior to such change.
(e) The Credit Agreement is amended by deleting Section 2.3.(a) in its
entirety and substituting in its place the following:
(a) Letters of Credit. Subject to the terms and conditions of this
-----------------
Agreement, the Agent, on behalf of the Lenders, agrees to issue for the
account of the Borrower during the period from and including the Effective
Date to, but excluding the date 90 days prior to the Termination Date one
or more stand-by or documentary letters of credit (each a "Letter of
Credit") up to a maximum aggregate Stated Amount at any one time
outstanding not to exceed the L/C Commitment Amount.
(f) The Credit Agreement is amended by deleting Section 2.5. in its
entirety and substituting in its place the following:
Section 2.5. Rates and Payment of Interest on Loans.
(a) Rates.
-----
(i) Generally. The Borrower promises to pay to the Agent for
---------
account of each Lender interest on the unpaid principal amount of each
Loan made by such Lender for the period from and including the date of the
making of such Loan to but excluding the date such Loan shall be paid in
full, at the following per annum rates:
(A) during such periods as such Loan is a Base Rate Loan, at
the Base Rate (as in effect from time to time), plus the Applicable
----
Margin;
(B) during such periods as such Loan is a LIBOR Loan, at the
Adjusted Eurodollar Rate for such Loan for the Interest Period
therefor, plus the Applicable Margin; and
----
(C) if such Loan is a Bid Rate Loan, at the Bid Rate for such
Loan for the Interest Period therefor quoted by the Lender making such
Loan in accordance with Section 2.2.
(ii) Additional Interest Amounts Payable on Outstanding Credit Below
---------------------------------------------------------------
Priority Threshold Amount. In addition to the interest payable pursuant to
-------------------------
the immediately preceding clause (i), the Borrower promises to pay to the
Agent for the
-9-
<PAGE>
account of each Lender additional interest calculated at a per annum rate
equal to one-quarter of one percent (0.250%) on the lesser of (A) the
outstanding balance of Revolving Loans and (B) an amount of Revolving Loans
equal to the Priority Threshold Amount minus the aggregate amount of Letter
-----
of Credit Liabilities. Such interest shall be calculated on a daily basis
and shall be payable as provided in the immediately following subsection
(b).
(iii) Default Interest. Notwithstanding the foregoing, during the
----------------
continuance of an Event of Default, the Borrower shall pay to the Agent for
the account of each Lender, or the Swingline Lender, as applicable,
interest at the Post-Default Rate on the outstanding principal amount of
all Loans made by such Lender or the Swingline Lender, on all Reimbursement
Obligations and on any other amount payable by the Borrower hereunder or
under the Notes held by such Lender to or for the account of such Lender
(including without limitation, accrued but unpaid interest to the extent
permitted under Applicable Law).
(b) Payment. Accrued interest on each Loan shall be payable (i) in the
-------
case of all Loans (including Swingline Loans), monthly on the last day of each
calendar month, (ii) in the case of a LIBOR Loan or a Bid Rate Loan, on the last
day of each Interest Period therefor, (iii) in the case of any LIBOR Loan, upon
the payment, prepayment or Continuation thereof or the Conversion of such Loan
to a Loan of another Type (but only on the principal amount so paid, prepaid or
Converted) and (iv) in the case of any Loan, upon the payment or prepayment
thereof in full. Subject to receipt by the Agent of the written consent of all
of the Lenders to the following payment terms contained in this sentence (which
the Agent agrees to use good faith efforts to obtain), accrued interest on each
Loan shall be payable (A) in the case of a Base Rate Loan, quarterly on the
Quarterly Dates, (B) in the case of a LIBOR Loan or a Bid Rate Loan, on the last
day of each Interest Period therefor and, if such Interest Period is longer than
three months, at three-month intervals following the first day of such Interest
Period, (C) in the case of any LIBOR Loan, upon the payment, prepayment or
Continuation thereof or the Conversion of such Loan to a Loan of another Type
(but only on the principal amount so paid, prepaid or Converted) and (D) in the
case of any Base Rate Loan, upon the payment or prepayment thereof in full.
Interest payable at the Post-Default Rate shall be payable from time to time on
demand. Promptly after the determination of any interest rate provided for
herein or any change therein, the Agent shall give notice thereof to the Lenders
to which such interest is payable and to the Borrower. All determinations by the
Agent of an interest rate hereunder shall be conclusive and binding on the
Lenders and the Borrower for all purposes, absent manifest error.
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<PAGE>
(g) The Credit Agreement is amended by deleting Section 2.8.(b) in its
entirety and substituting in its place the following:
(b) Mandatory.
---------
(i) Outstandings in Excess of Commitments; Reductions in
----------------------------------------------------
Commitments. If at any time the Outstanding Credit exceeds the
-----------
aggregate amount of the Commitments in effect at such time, the
Borrower shall immediately pay to the Agent for the account of the
Lenders the amount of such excess. In addition, the Borrower shall pay
to the Agent for the account of the Lenders for application to the
Outstanding Credit an amount equal to the amount of any reduction in
the Commitments pursuant to Section 2.12.
(ii) Outstandings in Excess of Amount Limitations.
--------------------------------------------
Notwithstanding the first sentence of Section 2.1.(a) or Section
2.14., the Borrower agrees that at no time during the following
periods shall it permit the aggregate Outstanding Credit to exceed the
amount limitation corresponding to such period in the following table
(each an "Amount Limitation"):
- --------------------------------------------------------------------------------
Period Amount
Limitation
- --------------------------------------------------------------------------------
Fifth Amendment Date through and
including October 31, 1999 $250,000,000
- --------------------------------------------------------------------------------
November 1, 1999 through
and including November 30, 1999 $260,000,000
- --------------------------------------------------------------------------------
December 1, 1999 through and
including December 31, 1999 $270,000,000
- --------------------------------------------------------------------------------
If at any time during any such period the Outstanding Credit shall
exceed the Amount Limitation corresponding to such period, the
Borrower shall immediately pay to the Agent for the account of the
Lenders, or the Swingline Lender, as the case may be, the amount of
such excess.
(iii) Excess Available Cash. If at any time the aggregate amount
---------------------
of Available Cash shall exceed $5,000,000, then the Borrower shall
immediately pay to the Agent for the account of the Lenders, or the
Swingline Lender, as the case may be, the amount of such excess.
(iv) Application of Mandatory Prepayments. Any payment received
------------------------------------
by the Agent as a result of the immediately preceding clauses (i)
through (iii), shall be applied first to pay all amounts of principal
outstanding on the Swingline Loans and then to pay all amounts of
principal outstanding on the other Loans and any Reimbursement
Obligations pro rata in accordance with Section 3.2. Subject to the
immediately following clause (v), if the Borrower is required to pay
any
-11-
<PAGE>
outstanding LIBOR Loans by reason of this subsection (b) prior to
the end of the applicable Interest Period therefor, the Borrower
shall pay all amounts due under Section 4.4.
(v) Investment of Certain Payments. With respect to any
------------------------------
payment received by the Agent as a result of the immediately
preceding clause (iii), if (x) in the judgment of the Agent such
payment was received late enough in the day that the application
of such payment would not be practicable on such day or (y) the
amount of such payment exceeds the amount of outstanding
Swingline Loans and Loans which can be prepaid without any
amounts being payable under Section 4.4, then the Agent shall
invest such payment, in the case of clause (x), or such excess,
in the case of clause (y), in such cash equivalents or other
investments as the Agent shall determine in its sole discretion
until the Agent has determined that the application of such
payment (or excess) is practicable or will not result in any
amounts being payable under Section 4.4. All such investments
shall be held in the name of, and be under the sole dominion and
control of, the Agent.
(h) The Credit Agreement is amended by deleting Section 2.12. in its
entirety and substituting in its place the following:
Section 2.12. Reductions of the Commitments, Amount Limitations and
Priority Threshold Amount.
(a) Voluntary. The Borrower shall have the right to terminate
---------
or reduce the aggregate unused amount of the Commitments (for which
purpose use of the Commitments shall be deemed to include the
aggregate amount of Letter of Credit Liabilities and the aggregate
principal amount of all outstanding Bid Rate Loans and Swingline
Loans) at any time and from time to time without penalty or premium
upon not less than 5 Business Days prior written notice to the Agent
of each such termination or reduction, which notice shall specify the
effective date thereof and the amount of any such reduction and shall
be irrevocable once given and effective only upon receipt by the
Agent. The Agent will promptly transmit such notice to each Lender.
(b) Mandatory. The aggregate amount of the Commitments shall be
---------
reduced by the amount of Net Proceeds distributed to the Lenders
pursuant to the terms of the Collateral Agency Agreement in connection
with any Disposition or Equity Issuance which amount so distributed
shall be applied in satisfaction of the Borrower's obligations under
the last sentence of Section 2.8(b)(i).
(c) Effect of Reductions of Commitments on Amount Limitations.
---------------------------------------------------------
Any reduction in the aggregate amount of Commitments shall result in a
simultaneous and equal reduction in the Amount Limitation in effect at
such time (as well as a simultaneous and equal reduction in each of
the dollar amounts in the table set forth in Section 2.8.(b)(ii)).
-12-
<PAGE>
(d) Effect of Reductions of Commitments on Priority Threshold
---------------------------------------------------------
Amount. Any reduction in the aggregate amount of Commitments shall
------
result in a simultaneous and equal reduction in the Priority Threshold
Amount in effect at such time if, and only if, such reduction in the
aggregate amount of Commitments results from (i) any Disposition of
the SBQ Division (Memphis/Cleveland) or (ii) an Equity Issuance.
(i) The Credit Agreement is amended by deleting Section 3.5.(b)
thereof in its entirety and substituting in its place the following:
(c) Reductions in Commitments. Each voluntary reduction in
-------------------------
Commitments under Section 2.12.(a) shall be in a minimum amount of
$5,000,000 and integral multiples of $1,000,000 in excess thereof.
(j) The Credit Agreement is amended by deleting Section 3.5.(d) in
its entirety and substituting in its place the following:
(d) Letters of Credit. The initial Stated Amount of each
-----------------
stand-by Letter of Credit shall be at least $100,000 and each
documentary letter of credit shall be at least $15,000.
(k) The Credit Agreement is amended by deleting the first sentence of
Section 3.6.(b) thereof in its entirety and substituting in its place the
following:
The Borrower agrees to pay to the Agent for account of each Lender a
letter of credit fee at a rate per annum equal to (i) the Applicable
Margin for LIBOR Loans plus one-quarter of one percent (0.250%) times
----
(ii) the daily average Stated Amount of each Letter of Credit for the
period from and including the date of issuance of such Letter of
Credit to and including the date such Letter of Credit is drawn in
full, expires or is terminated.
(l) The Credit Agreement is amended by adding to the end of Section
5.2 the following new sentence:
In addition, no Lender shall make any Revolving Loan or Bid Loan, the
Agent shall not issue any Letter of Credit, and the Swingline Lender
shall not make any Swingline Loan, if (i) the Borrower, or American
Steel & Wire Corporation, as the case may be, shall have failed to pay
to an LC Issuer any amount owing to it under the terms of an Existing
Reimbursement Agreement referred to in clause (a) or (b) of the
definition of "Existing Reimbursement Agreement" and such failure
shall have continued for a period of 3 Business Days, (ii) such LC
Issuer shall have given written notice of such failure to the Agent
and the Lenders and (iii) the resulting Event of Default under Section
10.1.(d) shall not have been waived by the Requisite Lenders
(including such LC Issuer).
(m) The Credit Agreement is amended by deleting clause (iii) of
Section 6.1.(d) thereof in its entirety and substituting in its place the
following:
-13-
<PAGE>
(iii) result in or require the imposition of any Lien upon or with
respect to any property now owned or hereafter acquired by the
Borrower or any Subsidiary, other than the Liens of the "Security
Documents" as defined in the Omnibus Agreement.
(n) The Credit Agreement is amended by deleting the last sentence of
Section 6.1.(g) thereof in its entirety and substituting in its place the
following:
All Debt of the Borrower (other than Debt secured by a Lien permitted
hereunder) ranks pari passu in, or subordinate to, right of repayment
----------
to all the Obligations.
(o) The Credit Agreement is amended by deleting Section 6.1.(i) in
its entirety and substituting in its place the following:
(i) Litigation. Except as disclosed (i) in the Borrower's
----------
Annual Report on Form 10K for the year ended June 30, 1998, (ii) in
any other report filed by the Borrower with the Securities and
Exchange Commission after June 30, 1998 but prior to the Fifth
Amendment Date, (iii) in any press release issued by the Borrower
after June 30, 1998 but prior to the Fifth Amendment Date or (iv) in
writing to the Agent by the Borrower prior to the Fifth Amendment
Date, there are no actions, suits or proceedings pending (nor, to the
knowledge of the Borrower, are there any actions, suits or proceedings
threatened) against or in any other way relating adversely to or
affecting the Borrower or any Subsidiary or any of its respective
property in any court or before any arbitrator of any kind or before
or by any governmental body which, if adversely determined, could
reasonably be expected to have a Material Adverse Effect, and there
are no strikes, slow downs, work stoppages or walkouts or other labor
disputes in progress, or to the knowledge of the Borrower threatened,
relating to the Borrower or any Subsidiary.
(p) The Credit Agreement is amended by deleting Section 6.1.(k)
thereof in its entirety and substituting in its place, the following:
(k) Financial Statements and Condition. The Borrower has
----------------------------------
furnished to each Lender copies of the audited consolidated balance
sheet of the Borrower and its consolidated Subsidiaries as at June 30,
1998, and the related consolidated statements of income, retained
earnings and cash flow for the fiscal year ending on such date, with
the opinion thereon of Ernst & Young LLP, and the unaudited
consolidated balance sheet of the Borrower and its consolidated
Subsidiaries as at March 31, 1999, and the related consolidated
statements of income, retained earnings and cash flow of the Borrower
and its consolidated Subsidiaries for the fiscal quarter ending on
such date. All such financial statements (including in each case
related schedules and notes) are complete and correct and present
fairly, in accordance with GAAP consistently applied throughout the
periods involved, in all material respects, the consolidated financial
position of the Borrower and its consolidated Subsidiaries as at their
respective dates and the results of operations and the cash flow for
such periods (subject, as to interim statements, to changes resulting
from audits and normal year-end adjustments). Except as disclosed (i)
in the Borrower's
-14-
<PAGE>
Annual Report on Form 10K for the year ended June 30, 1998, (ii) in
any other report filed by the Borrower with the Securities and
Exchange Commission after June 30, 1998 but prior to the Fifth
Amendment Date, (iii) in any press release issued by the Borrower
after June 30, 1998 but prior to the Fifth Amendment Date or (iv) in
writing to the Agent by the Borrower prior to the Fifth Amendment
Date, since June 30, 1998, there has been no material adverse change
in the financial condition, operations, or business of the Borrower
and its consolidated Subsidiaries taken as a whole. After giving
effect to the transactions contemplated by the Transaction Documents
(as defined in the Omnibus Agreement), each of the Borrower and the
Restricted Subsidiaries is Solvent.
(q) The Credit Agreement is amended by deleting Section 6.1.(m) in
its entirety and substituting in its place the following:
(m) Environmental Laws. Except as disclosed (i) in the
------------------
Borrower's Annual Report on Form 10K for the year ended June 30, 1998,
(ii) in any other report filed by the Borrower with the Securities and
Exchange Commission after June 30, 1998 but prior to the Fifth
Amendment Date, (iii) in any press release issued by the Borrower
after June 30, 1998 but prior to the Fifth Amendment Date or (iv) in
writing to the Agent by the Borrower prior to the Fifth Amendment
Date, each of the Borrower and its Subsidiaries has obtained all
Governmental Approvals which are required under Environmental Laws and
is in compliance with all terms and conditions of such Governmental
Approvals except for those Governmental Approvals, the failure to
obtain or the failure with which to comply, could not reasonably be
expected to have a Material Adverse Effect. Each of the Borrower and
its Subsidiaries is also in material compliance with all other
limitations, restrictions, conditions, standards, prohibitions,
requirements, obligations, schedules, and timetables contained in the
Environmental Laws. Except as disclosed (w) in the Borrower's Annual
Report on Form 10K for the year ended June 30, 1998, (x) in any other
report filed by the Borrower with the Securities and Exchange
Commission after June 30, 1998 but prior to the Fifth Amendment Date,
(y) in any press release issued by the Borrower after June 30, 1998
but prior to the Fifth Amendment Date or (z) in writing to the Agent
by the Borrower prior to the Fifth Amendment Date, and except for
matters which could not reasonably be expected to have a Material
Adverse Effect, the Borrower is not aware of, and has not received
notice of, any past, present, or future events, conditions,
circumstances, activities, practices, incidents, actions, or plans
which, with respect to the Borrower or any of its Subsidiaries, may
interfere with or prevent compliance or continued compliance with
Environmental Laws, or may give rise to any common-law or legal
liability, or otherwise form the basis of any claim, action, demand,
suit, proceeding, hearing, study, or investigation, based on or
related to the manufacture, processing, distribution, use, treatment,
storage, disposal, transport, or handling or the emission, discharge,
release or threatened release into the environment, of any pollutant,
contaminant, chemical, or industrial, toxic, or other Hazardous
Material. Except as disclosed (w) in the Borrower's Annual Report on
Form 10K for the year ended June 30, 1998, (x) in any other report
filed by the Borrower with the Securities and Exchange Commission
after June 30, 1998 but prior to the Fifth Amendment Date, (y) in any
press release issued by the Borrower after June 30, 1998 but prior to
the Fifth Amendment Date
-15-
<PAGE>
or (z) in writing to the Agent by the Borrower prior to the Fifth
Amendment Date, there is no civil, criminal, or administrative action,
suit, demand, claim, hearing, notice, or demand letter, notice of
violation, investigation, or proceeding pending or, to the Borrower's
knowledge, threatened, against the Borrower or any of its Subsidiaries
relating in any way to Environmental Laws an adverse determination in
respect of which could reasonably be expected to have a Material
Adverse Effect.
(r) The Credit Agreement is amended by deleting the first sentence of
Section 6.1.(r) in its entirety and substituting in its place the following:
Other than statements, estimates and projections provided by the
Borrower with respect to the anticipated future performance of the
Borrower and its Subsidiaries, all written information, reports and
other papers and data furnished to the Agent or any Lender by, on
behalf of, or at the direction of, the Borrower or any Subsidiary in
connection with any of the Loan Documents were, at the time the same
were so furnished, complete and correct in all material respects, to
the extent necessary to give the recipient a true and accurate
knowledge of the subject matter and did not contain any untrue
statement of a fact material to the creditworthiness of the Borrower
or any Subsidiary and did not omit to state a material fact necessary
in order to make the statements contained therein not misleading, or,
in the case of financial statements, present fairly, in all material
respects and in accordance with GAAP consistently applied throughout
the periods involved, the financial position of the Persons involved
as at the date thereof and the results of operations for such periods,
except as otherwise provided in Section 8.4.(e).
(s) The last sentence of Section 6.2. of the Credit Agreement is
deleted in its entirely and the following substituted in its place:
All representations and warranties made under this Agreement shall be
deemed to be made at and as of the Fifth Amendment Date and at and as
of the date of the occurrence of any Credit Event, except to the
extent that such representations and warranties expressly relate
solely to an earlier date (in which case such representations and
warranties shall have been true and accurate on and as of such earlier
date) and except for changes in factual circumstances specifically
permitted hereunder.
(t) The Credit Agreement is amended by deleting Section 7.2. thereof
in its entirety and substituting in its place the following:
Section 7.2. Compliance with Applicable Law and Material Contracts.
Comply, and cause each Subsidiary to comply, with (a) all
Applicable Law, including the obtaining of all Governmental Approvals,
if the failure to comply with which could reasonably be expected to
have a Material Adverse Effect, and (b) all material terms and
conditions of all Material Contracts to which it is a party unless, in
the good faith judgment of the Borrower failure to comply would be in
the best interests of the Borrower; provided, however, the provisions
-------- -------
of this clause (b) shall not be construed
-16-
<PAGE>
or deemed to be a waiver by a Lender of any rights it may have or
claim under or with respect to any such Material Contract.
(u) The Credit Agreement is amended by deleting the word "and" from
the end of Section 8.4.(b), replacing the "." at the end of Section 8.4.(c) with
a ";" and by adding to the end of Section 8.4. the following new subsections:
(d) Promptly following, and in any event within 30 days of, the
end of each calendar month, the consolidated balance sheet of the Borrower
and its Subsidiaries as at the end of such month and the related
consolidated statement of income of the Borrower and its Subsidiaries for
such month, all of which shall be certified by an assistant treasurer,
chief financial officer or vice president-finance and control of the
Borrower, in his or her opinion, to present fairly, in accordance with GAAP
and in all material respects, the consolidated financial position of the
Borrower and its Subsidiaries as at the date thereof and the results of
operations for such month (without notes and subject to normal year-end
adjustments). Together with such financial statements, the Borrower shall
deliver a cash analysis report substantially in the form of Exhibit N;
(e) Together with each financial statement required to be
delivered pursuant to Sections 8.1., 8.2. and the immediately preceding
subsection (d), that same financial statement prepared by the Borrower in
accordance with GAAP (without notes and subject to normal year-end
adjustments) in all respects but which excludes the effect of the
accounting entries made by the Borrower with respect to its financial
statements for the fiscal year ending June 30, 1999 and as required under
Accounting Principles Board Opinion No. 30 ("APB 30") solely to the extent
relating to the SBQ Division. Each such financial statement shall disclose,
in form and substance satisfactory to the Requisite Lenders, the resulting
differences between such statement and one prepared entirely in accordance
with GAAP; and
(f) On or before September 1 of each calendar year, commencing
September 1, 2000, a copy of the Borrower's internal business plan for the
fiscal year commencing on July 1 of such calendar year and ending on June
30 of the following year, such plan to include the Borrower's forecast on a
month-by-month basis; and
(g) Not later than the time furnished under the Existing Note
Purchase Agreements, copies of each report, statement, document, notice or
other item furnished pursuant to Section 9 of any such Existing Note
Purchase Agreement or any related instrument, agreement or other document,
to the extent not otherwise provided to the Lenders under any of the other
provisions of this Agreement.
(v) The Credit Agreement is amended by deleting Section 8.5.(b) in
its entirety and substituting in its place the following:
-17-
<PAGE>
(b) any amendment to the articles of incorporation, articles of
organization, certificate of limited partnership, by-laws, operating
agreement, partnership agreement or other comparable organizational
instrument of the Borrower or any Subsidiary;
(w) The Credit Agreement is amended by deleting Section 9.1. in its
entirety and substituting in its place the following:
Section 9.1. Financial Covenants.
The Borrower shall not:
(a) Fixed Charge Coverage Ratio. Permit the Fixed Charge
---------------------------
Coverage Ratio for any Four-Quarter Period specified in the following table
to be less than or equal to the ratio corresponding to such period in the
table:
--------------------------------------------------------------
Four-Quarter Period Ending Minimum Ratio
--------------------------------------------------------------
September 30, 1999 1.050 to 1.000
--------------------------------------------------------------
December 31, 1999 1.050 to 1.000
--------------------------------------------------------------
March 31, 2000 1.050 to 1.000
--------------------------------------------------------------
June 30, 2000 1.050 to 1.000
--------------------------------------------------------------
September 30, 2000 1.050 to 1.000
--------------------------------------------------------------
December 31, 2000 1.050 to 1.000
--------------------------------------------------------------
March 31, 2001 1.10 to 1.00
--------------------------------------------------------------
June 30, 2001 1.10 to 1.00
--------------------------------------------------------------
September 30, 2001 1.20 to 1.00
--------------------------------------------------------------
December 31, 2001 and any
date thereafter 0.950 to 1.000
--------------------------------------------------------------
(b) Minimum Consolidated EBITDA. Permit the aggregate amount
---------------------------
of Consolidated EBITDA for any Four-Quarter Period specified in the
following table to be less than the amount corresponding to such period in
the table:
----------------------------------------------------------------
Four-Quarter Period Ending Minimum EBITDA
----------------------------------------------------------------
September 30, 1999 $57,000,000
----------------------------------------------------------------
December 31, 1999 $57,000,000
----------------------------------------------------------------
March 31, 2000 $57,000,000
----------------------------------------------------------------
June 30, 2000 $61,500,000
----------------------------------------------------------------
September 30, 2000 $61,500,000
----------------------------------------------------------------
December 31, 2000 $65,500,000
----------------------------------------------------------------
March 31, 2001 $66,000,000
----------------------------------------------------------------
June 30, 2001 $64,000,000
----------------------------------------------------------------
September 30, 2001 $67,500,000
----------------------------------------------------------------
-18-
<PAGE>
----------------------------------------------------------------
December 31, 2001 and any date thereafter $71,000,000
----------------------------------------------------------------
(c) Minimum Tangible Net Worth. Permit Consolidated Tangible Net
--------------------------
Worth to be less than (i) $188,000,000 plus (ii) 50% of consolidated income
from continuing operations (only if greater than $0) of the Borrower and
its Subsidiaries for each fiscal quarter of the Borrower ending after June
30, 1999 minus (iii) 100% of consolidated net loss from discontinued
operations (including any write-downs) of the Borrower and its Subsidiaries
after June 30, 1999 plus (iv) 60% of all Net Proceeds from any Equity
Issuance after June 30, 1999.
(d) Capital Expenditures. Permit the aggregate amount of Capital
--------------------
Expenditures of the Borrower and its Restricted Subsidiaries to be greater
than: (i) $30,000,000 during the Borrower's fiscal year ending June 30,
2000; (i) $35,000,000 during the Borrower's fiscal year ending June 30,
2001; and (iii) $40,000,000 during the Borrower's fiscal year ending June
30, 2002.
(e) Debt to Consolidated EBITDA Ratio. For any Four-Quarter Period
---------------------------------
ending on or after the Performance Release Date, permit the Debt to
Consolidated EBITDA Ratio to be greater than or equal to 3.50 to 1.00.
(x) The Credit Agreement is amended by deleting Sections 9.2.(a) through
(d) in their entirety and substituting in their place the following:
(a) Negative Pledge. The Borrower covenants that it will not, and
---------------
will not permit any Restricted Subsidiary to, cause or permit to exist, or
agree or consent to cause or permit to exist in the future (upon the
happening of a contingency or otherwise), any of their Property, whether
now owned or hereafter acquired, to be subject to a Lien except:
(i) Liens securing taxes, assessments or governmental charges
or levies or the claims or demands of materialmen, mechanics,
carriers, warehousemen, landlords and other like Persons;
(ii) Liens incurred or deposits made in the ordinary course of
business
(1) in connection with workers' compensation, unemployment
insurance, social security and other like laws, and
(2) to secure the performance of letters of credit, bids,
tenders, sales contracts, leases, statutory obligations, surety and
performance bonds (of a type other than set forth in the immediately
following subsection (iii)) and other similar obligations not incurred
in connection with the borrowing of money, the obtaining of advances
or the payment of the deferred purchase price of Property;
-19-
<PAGE>
(iii) Liens
(1) arising from judicial attachments and judgments,
(2) securing appeal bonds, supersedeas bonds, and
(3) arising in connection with court proceedings (including,
without limitation, surety bonds and letters of credit or any other
instrument serving a similar purpose), provided that the execution or
--------
other enforcement of such Liens is effectively stayed and the claims
secured thereby are being actively contested in good faith and by
appropriate proceedings, and provided further that the aggregate
amount so secured will not at any time exceed $10,000,000;
(iv) Liens on Property of a Restricted Subsidiary which secure only
obligations owing to the Borrower or a Restricted Subsidiary that is a
Guarantor;
(v) Liens in the nature of reservations, exceptions, encroachments,
easements, rights-of-way, covenants, conditions, restrictions, leases and
other similar title exceptions or encumbrances affecting real property,
provided that such exceptions and encumbrances could not reasonably be
expected to materially interfere with the use of such Property in the
ordinary conduct of the business of the Borrower and the Restricted
Subsidiaries;
(vi) (1) Liens securing Debt in existence and listed in Schedule
6.1.(f) as of the Fifth Amendment Date, and
(2) Liens securing renewals, extensions (as to time) and
refinancings of such Debt secured by such Liens listed in such
Schedule, provided that (A) the amount of Debt secured by each such
Lien is not increased in excess of the amount of Debt outstanding on
the date of such renewal, extension or refinancing, (B) none of such
Liens is, or is required to be, extended to include any additional
Property of the Borrower or any Restricted Subsidiary as a condition
to, or as a result of, such renewal, extension or refinancing and (C)
the holder or holders of such Liens and Debt have become parties to
the Collateral Agency Agreement to the extent required to do so under
the terms thereof;
(vii) Purchase Money Liens, securing Debt to the extent permitted
under Section 9.2.(d)(viii), so long as each such Purchase Money Lien
secures Debt of the Borrower or a Restricted Subsidiary in an amount not
exceeding one hundred percent (100%) of the cost of construction or
acquisition of the particular
-20-
<PAGE>
Property to which such Debt relates (or, in the case of a Lien existing on
any Property of any corporation at the time it becomes a Restricted
Subsidiary, the Fair Market Value of such Property at such time);
(viii) Liens securing the Secured Obligations (as defined in the
Omnibus Agreement);
(ix) Liens arising by virtue of any statutory or common law
provision relating to bankers' liens, rights of setoff or similar rights as
to deposit accounts or other funds maintained with a creditor depository
institution;
(x) Liens constituting intellectual property licenses entered into
in the ordinary course of business;
(xi) Liens securing Capitalized Lease obligations to the extent such
Debt is permitted under Section 9.2.(d)(viii), so long as any such Lien
secures Debt of the Borrower or a Restricted Subsidiary in an amount not
exceeding one hundred percent (100%) of the cost of construction or
acquisition of the particular Property that is the subject of such
Capitalized Lease;
(xii) Liens securing Off Balance Sheet Liabilities which do not
constitute Debt;
(xiii) Financing statements permitted to be signed or filed under
Section 9.2.(b);
(xiv) Liens permitted under the express terms of the Security
Documents (as defined in the Omnibus Agreement);
(xv) Leases and subleases of Property to other Persons entered into
in the ordinary course of business.
In addition, the Borrower will not, and will not permit any Restricted
Subsidiary, directly or indirectly, to create or otherwise cause, incur, assume,
suffer or permit to exist or become effective any consensual encumbrance or
restriction of any kind on the ability of such Person to grant a security
interest in, or assign its property to, the Collateral Agent, except for
encumbrances or restrictions existing under or by reason of (i) customary
non-assignment provisions in any lease governing a leasehold interest, license
or other contract, (ii) with respect to any Person which becomes a Subsidiary of
the Borrower after the Fifth Amendment Date, an agreement or other instrument of
such Person existing at the time it becomes a Subsidiary, provided that such
encumbrance or restriction is not applicable to any other Person, other than
such Person becoming a Subsidiary and was not entered into in contemplation of
such Person becoming a Subsidiary, (iii) this Agreement and the other Loan
Documents, and (iv) any agreement existing on the Fifth Amendment Date to which
the Borrower or any Restricted
-21-
<PAGE>
Subsidiary is a party or by which any of their respective Properties is bound,
and any renewal or extension of any such agreement.
(b) Financing Statements. The Borrower will not, and will not permit
--------------------
any Restricted Subsidiary to, sign or file a financing statement under the
Uniform Commercial Code of any jurisdiction that names the Borrower or such
Restricted Subsidiary as debtor, or sign any security agreement authorizing any
secured party thereunder to file any such financing statement, except, in any
such case, a financing statement filed or to be filed to perfect or protect a
security interest that the Borrower or such Restricted Subsidiary is entitled to
create, assume or incur, or permit to exist, under the foregoing provisions of
this Section 9.2. or to evidence for information purposes a lessor's interest in
Property leased to the Borrower or any such Restricted Subsidiary.
(c) [Intentionally Omitted.]
(d) Debt. The Borrower will not, and will not permit any Restricted
----
Subsidiary to, create, incur, assume, or permit or suffer to exist, any
Debt other than the following:
(i) Debt arising under this Agreement and the other Loan
Documents;
(ii) Debt arising under the Existing Note Purchase Agreements;
(iii) Debt arising under the Existing Reimbursement Agreements;
(iv) Debt arising under the other Transaction Documents (as
defined in the Omnibus Agreement);
(v) other Debt existing on the Fifth Amendment Date and
described on Schedule 6.1.(g);
(vi) Debt extending the maturity of, or refunding, refinancing
or replacing, in whole or in part, any Debt described in the
immediately preceding clauses (i) through (v) above on terms no more
restrictive in the aggregate (as reasonably determined by the
Requisite Lenders) to the Borrower or such Restricted Subsidiary, as
applicable, than the terms of the Debt so extended, refunded,
refinanced or replaced, and in a principal amount not in excess of
that outstanding as of the date of such renewal, refinancing,
replacement or extension;
(vii) Debt owing to the Borrower or to another Restricted
Subsidiary that is a Guarantor;
(viii) Debt in respect of Capital Leases and Debt secured by
Purchase Money Liens permitted under Section 9.2.(a)(vii); provided
that the aggregate
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<PAGE>
outstanding principal amount of all such Debt does not exceed
$35,000,000 at any time; and
(ix) Debt that is unsecured Debt and that is not otherwise
permitted under any of the preceding clauses (i) through (ix) in an
aggregate amount not to exceed $25,000,000 at any time outstanding.
(y) The Credit Agreement is amended by deleting Sections 9.2.(f) and (g)
in their entirety and substituting in their place the following:
(f) [Intentionally Omitted.]
(g) Mergers; Consolidations. The Borrower will not, and will not
-----------------------
permit any Restricted Subsidiary to, merge with or into or consolidate with
or into any other Person or permit any other Person to merge or consolidate
with or into it; provided, however, so long as no Default or Event of
-------- -------
Default exists at the time thereof, or would exist immediately after giving
effect thereto, a Restricted Subsidiary may (x) merge into or consolidate
with a Wholly-Owned Restricted Subsidiary that is a Guarantor and (y) merge
with and into the Borrower so long as the Borrower is the survivor of such
merger.
(z) The Credit Agreement is amended by adding to the end of Article IX the
following new Sections:
Section 9.5. Restricted Payments.
The Borrower shall not declare or make, or permit any Restricted
Subsidiary to declare or make, any Restricted Payment; provided, however,
-------- -------
that (a) Restricted Subsidiaries may declare and make Restricted Payments
payable to the Borrower or any other Restricted Subsidiary that is a
Guarantor and; (b) so long as no Default or Event of Default shall have
occurred and be continuing, or would result therefrom, the Borrower may
declare and make cash dividends with respect to its common stock so long as
(i) the aggregate amount of such Restricted Payments paid during any fiscal
quarter of the Borrower does not exceed $750,000 and (ii) immediately after
giving effect to the payment of any such cash dividend, the aggregate
amount of all cash dividends paid by the Borrower during the period
commencing on July 1, 1999 and ending on the date of the payment of such
cash dividend (excluding the cash dividend in the amount of $737,836.76
paid on August 9, 1999) does not exceed 50% of cumulative consolidated
income from continuing operations of the Borrower and its Subsidiaries for
such entire period.
Section 9.6. Disposition of Assets.
The Borrower shall not, and shall not permit any Restricted
Subsidiary to, convey, sell, lease, sublease, transfer or otherwise dispose
of any assets (including without
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<PAGE>
limitation, capital stock of or other equity interests in any Subsidiary or
other Person) except for:
(a) sales of inventory in the ordinary course of business;
(b) the sale, lease, sublease, transfer or other disposition of
machinery and equipment no longer used or useful in the conduct of
business;
(c) the sale, lease, sublease, transfer or other disposition of
assets to the Borrower or to a Wholly-Owned Restricted Subsidiary that is a
Guarantor;
(d) the sale of assets of the SBQ Division (Memphis/Cleveland) to the
extent permitted under the express terms of the Collateral Agency
Agreement;
(e) transfers of assets made as consideration for Permitted
Investments;
(f) the transfer by Cumberland Recyclers, LLC to BSE of the assets
known as the "mega shredder" so long as: (i) the Borrower shall have given
the Collateral Agent and the Agent at least 60-days' prior written notice
of such transfer; (ii) no Default or Event of Default exists at the time of
such transfer; (iii) such transfer is made subject to the Lien of the
Collateral Agent in such assets; and (iv) all actions required under the
Security Agreement to maintain the validity, perfection, enforceability and
priority and rank of such Lien in connection with such transfer are taken;
and
(g) other sales and dispositions of Property of the Borrower or any
Restricted Subsidiary, so long as the Fair Market Value of such Property
does not exceed $10,000,000 in the aggregate during any fiscal year of the
Borrower.
The Borrower shall, and shall cause each Restricted Subsidiary that owns
any Collateral to, pay over to the Collateral Agent all Net Proceeds
received by the Borrower or such Restricted Subsidiary upon any Disposition
for application and distribution in accordance with the terms of the
Collateral Agency Agreement.
Section 9.7. Accounts with Financial Institutions other than the Lenders.
The Borrower shall not, and shall not permit any Subsidiary to,
maintain any deposit account, savings account, investment account or other
similar account with any financial institution or other Person except for
the Agent and the Lenders excluding: (a) lockbox accounts existing as of
the Fifth Amendment Date and disclosed on the applicable Schedule to the
Omnibus Agreement the entire balances of which are automatically
transferred on a daily basis to a deposit account of the Borrower
maintained with the Agent; and (b) other deposit accounts so long as the
balances of such deposit accounts do not exceed $150,000 in the aggregate
at any time; provided, however, Birmingham Steel Overseas, Ltd. may
--------- -------
maintain its existing deposit account with Barclay's Bank, PLC in Barbados
in which the proceeds of foreign sales are deposited so
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<PAGE>
long as (i) the balance of such account does not exceed $1,000,000 in the
aggregate at any time and (ii) such Subsidiary remains qualified as a
"foreign sales corporation" under Section 922 of the Internal Revenue Code.
Section 9.8. Certain Proceeds from Equity Issuances.
The Borrower may use Net Proceeds from any Equity Issuance which the
Borrower is permitted to retain under the terms of the Collateral Agency
Agreement and the other applicable Transaction Documents (as defined in the
Omnibus Agreement) (a) to fund Restricted Payments not otherwise permitted
under Section 9.5.; (b) to finance Investments not otherwise permitted
under Section 9.2.(e); (c) to finance Capital Expenditures not otherwise
permitted under Section 9.1.(d) and (d) for any other purpose not otherwise
prohibited by this Agreement. To the extent the Borrower is not permitted
to retain a portion of Net Proceeds from any Equity Issuance pursuant to
the terms of the Collateral Agency Agreement, the Borrower shall pay such
portion of Net Proceeds over to the Collateral Agent for application in
accordance with the terms of the Collateral Agency Agreement.
(aa) The Credit Agreement is amended by deleting subsections (b), (c), (d)
and (g) of Section 10.1. and substituting in their respective places the
following:
(b) Default in Performance. (i) The Borrower shall fail to perform
----------------------
or observe any term, covenant, condition or agreement contained in Article
IX. or (ii) the Borrower or any Restricted Subsidiary shall fail to perform
or observe any term, covenant, condition or agreement on its part to be
performed and contained in this Agreement or any other Loan Document to
which it is a party and not otherwise mentioned in this Section and such
failure shall continue for a period of 30 days after the earlier of (x) the
date upon which the Borrower or such Restricted Subsidiary, as applicable,
obtains knowledge of such failure or (y) the date upon which the Borrower
or such Restricted Subsidiary, as applicable, has received written notice
of such failure from the Agent.
(c) Misrepresentations. Any written statement, representation or
------------------
warranty made or deemed made by or on behalf of the Borrower or any
Restricted Subsidiary under this Agreement or under any other Loan
Document, or any amendment hereto or thereto, or in any other writing or
statement at any time furnished or made or deemed made by or on behalf of
the Borrower or any Restricted Subsidiary to the Agent, any Lender or the
Swingline Lender, shall at any time prove to have been incorrect or
misleading in any material respect when furnished or made.
(d) Debt Cross-Default.
------------------
(i) The Borrower or any Subsidiary shall fail to pay when due
and payable and after the expiration of any applicable grace and cure
periods the principal of, or interest on, any Debt other than the
Loans having an aggregate outstanding principal amount of $10,000,000
or more ("Material Debt"); or
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(ii) the maturity of any such Material Debt shall have (x) been
accelerated in accordance with the provisions of any indenture,
contract or instrument evidencing, providing for the creation of or
otherwise concerning such Material Debt or (y) been required to be
prepaid or repurchased prior to the stated maturity thereof; provided,
--------
however, this clause (y) shall not be deemed to apply to the Debt
-------
evidenced by the industrial revenue bonds described on Schedule
6.1.(g) which are supported by letters of credit issued for the
account of the Borrower or American Steel & Wire Corporation; or
(iii) any other event shall have occurred and be continuing which,
with or without the passage of time, the giving of notice, or
otherwise, would permit any holder or holders of such Material Debt,
any trustee or agent acting on behalf of such holder or holders or any
other Person, (x) to accelerate the maturity of any such Material Debt
or (y) require any such Material Debt to be prepaid or repurchased
prior to its stated maturity; provided, however, this clause (y) shall
-------- -------
not be deemed to apply to the Debt evidenced by the industrial revenue
bonds described on Schedule 6.1.(g) which are supported by letters of
credit issued for the account of the Borrower or American Steel & Wire
Corporation.
(g) Contesting Loan Documents. The Borrower or any Restricted
-------------------------
Subsidiary shall disavow, revoke or terminate any Loan Document to which it
is a party or shall otherwise challenge or contest in any action, suit or
proceeding in any court or before any Governmental Authority the validity
or enforceability of any Loan Document.
(bb) The Credit Agreement is amended by adding to the end of Section 10.1.
the following new subsection:
(o) Perfection. The Collateral Agent shall, for a period of 30 days,
----------
cease to have a valid and perfected first-priority security interest
(subject only to Permitted Liens) in Collateral having an aggregate book
value in excess of $5,000,000 or in any other material portion of the
Collateral, for any reason other than the failure of the Collateral Agent
to take any action within its control.
(cc) The Credit Agreement is hereby amended by deleting Section 12.3.
thereof in its entirety and substituting in its place the following:
In addition to any rights now or hereafter granted under Applicable
Law and not by way of limitation of any such rights, the Agent, each Lender
and each Participant is hereby authorized by the Borrower, at any time or
from time to time during the continuance of an Event of Default, without
notice to the Borrower or to any other Person, any such notice being hereby
expressly waived, but subject to receipt of the prior written consent of
the Requisite Lenders, to set-off and to appropriate and to apply any and
all deposits (general or special, including, but not limited to,
indebtedness evidenced by certificates of deposit, whether matured or
unmatured) and any other indebtedness at
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<PAGE>
any time held or owing by the Agent, such Lender or any affiliate of such
the Agent or such Lender, to or for the credit or the account of the
Borrower against and on account of any of the Obligations, irrespective of
whether or not any or all of the Loans and all other Obligations have been
declared to be, or have otherwise become, due and payable as permitted by
Section 10.2., and although such obligations shall be contingent or
unmatured.
(dd) The Credit Agreement is amended by deleting the portion of the first
sentence of Section 12.5.(d) preceding the proviso in its entirety and
substituting in its place the following:
Any Lender may with the prior written consent of the Agent (which consent
shall not be unreasonably withheld) and with notice to, but not the consent
of, the Borrower, assign to one or more banks or other financial
institutions (each an "Assignee") all or a portion of its Commitment and
its other rights and obligations under this Agreement and the Notes
(ee) The Credit Agreement is amended be deleting Section 12.8. thereof in
its entirety and substituting in its place the following:
Section 12.8. Designation of Subsidiaries.
(a) Right of Designation. Each Subsidiary acquired after the Fifth
--------------------
Amendment Date that, as of the date of such acquisition or at any future
date, meets all of the requirements of a Restricted Subsidiary, as set
forth in the definition thereof, shall be deemed, on and after such date
and without any further action by the Borrower or any holder of Notes, to
have been designated by the Borrower as a Restricted Subsidiary. Each
Subsidiary designated as a Restricted Subsidiary in Schedule 2.1 of the
Omnibus Agreement and each other Restricted Subsidiary shall, so long as it
shall continue to satisfy the requirements of the definition of Restricted
Subsidiary, be a Restricted Subsidiary on and after the Fifth Amendment
Date and all other Subsidiaries, if any, listed in Schedule 2.1 of the
Omnibus Agreement shall, subject to the immediately following subsection
(b), be Unrestricted Subsidiaries on and after the Fifth Amendment Date.
(b) Right of Redesignation. Subject to the satisfaction of the
----------------------
requirements of the immediately following subsection (c), the Borrower
shall have the right, with respect to each Subsidiary that is an
Unrestricted Subsidiary as of the Fifth Amendment Date, to designate such
Subsidiary as a Restricted Subsidiary by delivering a written notice to
such effect, signed by the Chairman, the Chief Executive Officer, an
Executive Vice President, a Vice President or the President of the
Borrower, to each Lender. Any designation under and in accordance with
this subsection shall become effective, for purposes of this Agreement, on
the day that notice thereof shall have been mailed (postage prepaid, by
registered or certified mail, return receipt requested) by the Borrower to
each Lender as provided in Section 12.1. The Borrower shall not have the
right to designate a Restricted Subsidiary as an Unrestricted Subsidiary.
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<PAGE>
(c) Designation Criteria.
--------------------
(i) No Unrestricted Subsidiary shall at any time after the
Fifth Amendment Date be designated as a Restricted Subsidiary unless:
(A) such Subsidiary at such time meets all of the
requirements of a Restricted Subsidiary as set forth in the
definition thereof; and
(B) immediately before and after, and after giving
effect to such designation, and assuming that all Investments
of, all obligations and liabilities of, and all Liens on the
Property of, such Subsidiary being so designated were made or
incurred contemporaneously with such designation, no Default or
Event of Default exists or would exist.
(ii) No Restricted Subsidiary shall at any time after the
Fifth Amendment Date be designated as an Unrestricted Subsidiary.
(ff) The Credit Agreement is amended by adding to the end of Article XII
the following new Section:
Section 12.20. Collateral Agency Agreement.
THIS AGREEMENT IS SUBJECT TO THE TERMS AND CONDITIONS OF THE
COLLATERAL AGENCY AGREEMENT.
(gg) The Credit Agreement is amended by deleting Schedules 6.1.(f) and (g)
thereto and substituting in their respective places Schedules 6.1.(f) and (g)
attached hereto.
(hh) The Credit Agreement is amended by deleting Exhibit B thereto and
substituting in its place Exhibit B attached hereto.
(ii) The Credit Agreement is amended by deleting Exhibit E thereto and
substituting in its place Exhibit E attached hereto.
(jj) The Credit Agreement is amended by adding as Exhibit N thereto the
Exhibit N attached hereto.
Section 2. Conditions Precedent. The effectiveness of Section 1 and
--------------------
Section 13 of this Amendment is subject to receipt by the Agent (unless receipt
thereof is wanted in writing by the Requisite Lenders) of each of the following,
each in form and substance satisfactory to the Agent:
(a) Evidence that the conditions precedent to the effectiveness of the
Omnibus Agreement as contained in Section 1.1(a) thereof have been satisfied or
waived as permitted under the terms thereof;
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<PAGE>
(b) Copies of fully-executed amendments to (or amendments and
restatements of) each of the following agreements evidencing that such
agreements have been amended in a manner comparable to the amendments to the
Credit Agreement provided for in Section 1 above:
(i) those certain Note Purchase Agreements dated as of September 1,
1993, as amended executed by the Borrower in favor of the purchasers of the
Borrower's 7.28% Senior Notes due December 15, 2005 in the aggregate amount
of $130,000,000;
(ii) those certain Note Purchase Agreements dated as of September
15, 1995 executed by the Borrower in favor of the purchasers of the
Borrower's (A) 6.96% Series A Senior Notes due December 15, 2002 in the
aggregate amount of $76,000,000; (B) 7.07% Series B Senior Notes due
December 15, 2005 in the aggregate amount of $14,000,000; and (C) 7.17%
Series C Senior Notes due December 15, 2005 in the aggregate amount of
$60,000,000;
(iii) that certain Reimbursement Agreement dated as of September 1,
1995, as amended, among the Borrower, American Steel and Wire Corporation
and Bank of America, N.A., successor to Bank of America Illinois;
(iv) that certain Reimbursement Agreement dated as of August 15,
1995, as amended, between the Borrower and PNC Bank, National Association,
successor to PNC Bank, Kentucky, Inc.; and
(v) that certain Reimbursement Agreement dated as of October 1,
1996, as amended, between the Borrower and PNC Bank, National Association,
successor to PNC Bank, Kentucky, Inc.;
(c) all fees and expenses payable by the Borrower to the Agent, Banc of
America Securities LLC and the Lenders on or prior to the effectiveness of this
Amendment, including without limitation, the closing fees referred to in that
certain letter agreement dated August 3, 1999 between the Agent and the
Borrower, all fees payable under Section 4 hereof, and all fees and expenses of
the Agent's counsel and each Lender's counsel as provided in Section 8 hereof;
(d) an opinion or opinions of counsel to the Borrower and the Restricted
Subsidiaries, in form reasonably satisfactory to the Agent, regarding (i) the
formation of the Borrower and each Guarantor, (ii) the authority of the Borrower
and each Guarantor to execute, deliver and perform this Amendment, the Credit
Agreement as amended by this Amendment, and other Loan Documents being executed
and delivered in connection herewith (to the extent a party thereto), (iii) the
enforceability of such Loan Documents under the laws of the State of Georgia or
New York, as the case may be, (iv) whether the execution, delivery and
performance by the Borrower and such Guarantor of such Loan Document violate
certain specified agreements to which the Borrower or any Guarantor is a party
and (v) such other matters as the Agent may reasonably request;
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<PAGE>
(e) If requested by the Agent, a letter from the Borrower addressed to the
Agent and the Lenders in which the Borrower agrees to use commercially
reasonable efforts to deliver to the Agent by specified dates items which were
to be delivered to the Agent on or prior to the date hereof;
(f) With respect to (i) the Equipment Lease Agreement dated as of
September 30, 1997, as amended (the "Equipment Lease"), between Chase Manhattan
Trust Company, National Association, successor to PNC Bank, National Association
(the "Owner Trustee"), as Lessor, and the Borrower, as Lessee, regarding certain
melt shop equipment leased by the Borrower, and (ii) the related Trust Indenture
and Security Agreement dated as of September 30, 1997, as amended, between the
Owner Trustee and First Union National Bank, as Indenture Trustee, a letter from
each of the Owner Participants (as defined in the Equipment Lease) and each
holder of an Equipment Note (as defined in the Equipment Lease) regarding the
right of the Borrower to terminate the Equipment Lease and to cause the
prepayment of such Equipment Notes; and
(g) such other documents, agreements and instruments as Agent may
reasonably request.
Upon the execution and delivery of this Agreement by Requested Lenders, the
Agent and the Borrower, the conditions in this Section 2 shall be deemed
satisfied and waived.
Section 3. Representations and Warranties of the Borrower. To induce the
----------------------------------------------
Agent, the Lenders and the Swingline Lender to enter into this Amendment, the
Borrower represents and warrants to each of them as follows as of the date
hereof (and assuming the effectiveness of this Amendment):
(a) No Default or Event of Default has occurred and is continuing;
(b) The representations and warranties made or deemed made by the
Borrower and each Restricted Subsidiary in the Loan Documents to which it is a
party, are true and correct with the same force and effect as if made on and as
of the date hereof except to the extent that such representations and warranties
expressly relate solely to an earlier date (in which case such representations
and warranties were true and accurate on and as of such earlier date) and except
for changes in factual circumstances specifically and expressly permitted under
the Credit Agreement;
(c) The Borrower and the Restricted Subsidiaries have the right and
power, and each has taken all necessary action to authorize it, to execute,
deliver and perform this Amendment, the Guarantee, the Collateral Agency
Agreement, the Security Agreement, the Pledge Agreement, the Mortgages (as each
such term is defined in the Omnibus Agreement) and all of the other documents,
instruments and agreements being executed by the Borrower or any Restricted
Subsidiary in connection with any of the foregoing (collectively, the "Amendment
Documents") to the extent such Person is a party thereto, and, with respect to
the Borrower, to perform the Credit Agreement as amended by this Amendment, in
each case in accordance with their respective terms. This Amendment and the
other Amendment Documents to which the
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Borrower or any Restricted Subsidiary is a party have been duly executed and
delivered by the duly authorized officers of the Borrower and its Restricted
Subsidiaries, as the case may be, and each of this Amendment, such other
Amendment Documents and the Credit Agreement as amended by this Amendment is a
legal, valid and binding obligation of the Borrower and each Restricted
Subsidiary a party thereto enforceable against such Person in accordance with
its respective terms except as may be limited by bankruptcy, insolvency or other
laws of general application relating to or affecting the enforcement of
creditors' rights generally and general principles of equity; and
(d) The execution and delivery of this Amendment, such other Amendment
Documents, and the performance of each of this Amendment, such other Amendment
Documents and the Credit Agreement as amended by this Amendment, in accordance
with its respective terms, do not and will not, by the passage of time, the
giving of notice, or otherwise: (i) require any Governmental Approval or violate
any Applicable Law relating to the Borrower or any Subsidiary; (ii) conflict
with, result in a breach of or constitute a default under the certificate of
incorporation or the bylaws of the Borrower or any Restricted Subsidiary, or any
indenture, agreement or other instrument to which the Borrower or any Subsidiary
is a party or by which the Borrower or any Subsidiary or any of its respective
properties may be bound; or (iii) result in or require the creation or
imposition of any Lien upon or with respect to any property now owned or
hereafter acquired by the Borrower or any Subsidiary except for Liens granted
pursuant to, or contemplated by, the Collateral Agency Agreement.
Section 4. Amendment Fee. In consideration of the Lenders amending the
-------------
Credit Agreement as provided herein, the Borrower agrees to pay to the Agent for
the account of each Lender a fee in an amount equal to two-tenths of one-percent
(0.20%) of the amount of such Lender's Commitment.
Section 5. No Third Party Beneficiaries. Except for the Borrower, the
----------------------------
Lenders, the Swingline Lender and the Agent, no Person is intended to be a
beneficiary of this Amendment and no other Person shall be authorized to rely
upon the contents of this Amendment.
Section 6. Effect. The amendments contained herein shall be deemed to have
------
prospective application only.
Section 7. Release of Claims. The Borrower, for itself and all of its
-----------------
predecessors, successors and assigns, acknowledges, affirms and represents that
immediately prior to giving effect to this Amendment, it is legally, validly and
enforceably obligated to each of the Agent, the Lenders and the Swingline Lender
under and pursuant to the Credit Agreement and each of the other Loan Documents
(as defined in the Credit Agreement) to which the Borrower is a party (the
Credit Agreement, together with such other Loan Document, the "Existing Loan
Documents") and that the Borrower has not defense, offset, counterclaim or right
of recoupment with regard to such obligations, hereby fully, forever and
completely releases and discharges each of the Agent, the Lenders and the
Swingline Lender and all of their respective employees, officers, directors,
trustees, shareholders, affiliates, agents (including, without limitation, Banc
of America Securities LLC), attorneys, representatives, predecessors, successors
and assigns
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<PAGE>
(collectively, the "Released Parties"), from any and all claims, demands,
liabilities, damages and causes of action of any kind whatsoever, whether based
on facts in existence prior to or as of the date of the effectiveness of this
Amendment, whether known or unknown, which the Borrower may now have or may have
had at any time heretofore or may have at anytime hereafter, whether for
contribution or indemnity or otherwise, and whether direct or indirect, fixed or
contingent, liquidated or unliquidated, arising out of or related in any way to
any of the following: (a) any of the Existing Loan Documents; and (b) any
action, inaction or omission by any of the Released Parties in connection with
any of the Existing Loan Documents or the administration thereof.
Section 8. Expenses. The Borrower agrees to pay or reimburse the Agent
--------
and each Lender for all of their reasonable out-of-pocket costs and expenses
incurred in connection with the preparation, negotiation and execution of this
Amendment, any of the other Amendment Documents (including due diligence
expenses and travel expenses relating to closing), and the consummation of the
transactions contemplated hereby and thereby, including the reasonable fees and
disbursements of counsel to the Agent and counsel to each Lender.
Section 9. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND
-------------
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF GEORGIA APPLICABLE TO
CONTRACTS EXECUTED, AND TO BE FULLY PERFORMED, IN SUCH STATE.
Section 10. 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 shall constitute an original, but all of which taken
together shall be one and the same instrument.
Section 11. Severability. If any provision of this Amendment shall be
------------
determined to be invalid, then only such provision shall be invalid and all
other provisions of this Amendment shall remain effective and binding.
Section 12. Defined Terms. Terms not otherwise defined in this Amendment
-------------
which are defined in the Credit Agreement are used herein with the respective
meanings given them in the Credit Agreement.
Section 13. Waiver of Existing Defaults. Subject to satisfaction of the
---------------------------
conditions precedent contained in Section 2 above, the Lenders hereby
irrevocably and permanently waive all Defaults and Events of Default which
existed immediately prior to the effectiveness of this Agreement and the Lenders
agree that each such existing Default and Event of Default shall be deemed to
have been permanently and irrevocably waived as of the date of the initial
occurrence thereof.
Section 14. Transaction Documents. The Lenders direct and authorize the
---------------------
Agent to enter into each Transaction Document (as defined in the Omnibus
Agreement) to which the Agent (in such capacity) is or is to become a party.
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[Signatures on Following Page]
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Fifth Amendment to
Credit Agreement to be executed as of the date first above written.
THE BORROWER:
BIRMINGHAM STEEL CORPORATION
By:
----------------------------
Name:
-----------------------
Title:
----------------------
THE AGENT AND THE LENDERS:
BANK OF AMERICA, N.A., successor to
NationsBank, N.A. (South), as Agent,
as a Lender and as Swingline Lender
By:
----------------------------
Name:
-----------------------
Title:
----------------------
PNC BANK, NATIONAL ASSOCIATION, as
Co-Agent and as a Lender
By:
----------------------------
Name:
-----------------------
Title:
----------------------
THE BANK OF NOVA SCOTIA, as Co-Agent
and as a Lender
By:
----------------------------
Name:
-----------------------
Title:
----------------------
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[Signatures continued on the following page]
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<PAGE>
[Signature Page to Fifth Amendment to Credit Agreement
dated as of October __, 1999 with Birmingham Steel Corporation]
THE BANK OF TOKYO - MITSUBISHI, LTD
ATLANTA AGENCY
By:
----------------------------
Name:
-----------------------
Title:
----------------------
CIBC INC.
By:
----------------------------
Name:
-----------------------
Title:
----------------------
AMSOUTH BANK
By:
----------------------------
Name:
-----------------------
Title:
----------------------
DG BANK DEUTSCHE GENOSSENSCHAFTSBANK,
CAYMAN ISLAND BRANCH
By:
----------------------------
Name:
-----------------------
Title:
----------------------
By:
----------------------------
Name:
-----------------------
Title:
----------------------
[Signatures continue on the following page]
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<PAGE>
[Signature Page to Fifth Amendment to Credit Agreement
dated as of October __, 1999 with Birmingham Steel Corporation]
GENERAL ELECTRIC CAPITAL CORPORATION
By:
----------------------------
Name:
-----------------------
Title:
----------------------
BANK ONE, NA, formerly known as The
First National Bank of Chicago
By:
----------------------------
Name:
-----------------------
Title:
----------------------
FIRST AMERICAN NATIONAL BANK
By:
----------------------------
Name:
-----------------------
Title:
----------------------
THE SANWA BANK, LIMITED
By:
----------------------------
Name:
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Title:
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[Signatures continue on the following page]
-37-
<PAGE>
[Signature Page to Fifth Amendment to Credit Agreement
dated as of October __, 1999 with Birmingham Steel Corporation]
UBS AG, SAMFORD BRANCH, successor to
Union Bank of Switzerland, New York
Branch
By:
----------------------------
Name:
-----------------------
Title:
----------------------
By:
----------------------------
Name:
-----------------------
Title:
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-38-
<PAGE>
EXHIBIT 10.26.6
EXECUTION COPY
COLLATERAL AGENCY AND INTERCREDITOR AGREEMENT
This COLLATERAL AGENCY AND INTERCREDITOR AGREEMENT (as may be amended from
time to time, this "Agreement") dated as of the 12th day of October, 1999, by
and among: (i) State Street Bank and Trust Company (in its individual capacity
herein referred to as the "Collateral Agent Bank" and in its capacity as
collateral agent herein referred to as the "Collateral Agent"), (ii) Bank of
America, N.A. and the other financial institutions (collectively, together with
their respective successors and assigns, the "Banks") which are parties to the
Credit Agreement (as defined below), (iii) Bank of America, N.A., as agent for
itself and the other Banks (the "Agent Bank"), (iv) each of the holders of Notes
(together with their respective successors and assigns as holders of Notes)
issued pursuant to the Note Purchase Agreements (as defined below) (the "Note
Holders"), (v) Bank of America, N.A. and PNC Bank, National Association, each as
the issuer of IRB Letters of Credit (as defined below) (each, an "LC Issuer"),
(vi) Birmingham Steel Corporation (the "Company"), (vii) Chase Manhattan Trust
Company, National Association, as successor to PNC Bank National Association, as
successor to PNC Bank, Kentucky, Inc., as Owner Trustee (the "Owner Trustee")
under the Equipment Lease Agreement dated as of September 30, 1997 between the
Owner Trustee, as Lessor, and Birmingham Steel Corporation, as Lessee, as
supplemented by Lease Supplement No. 1, dated November 10, 1997, and as further
amended, modified and supplemented from time to time (the "Equipment Lease"),
(viii) First Union National Bank, as Indenture Trustee (the "Indenture Trustee")
under the Trust Indenture and Security Agreement dated as of September 30, 1997,
as supplemented by Trust Indenture Supplement No. 1, dated November 10, 1997,
and as further amended, modified and supplemented from time to time (the
"Indenture") between the Owner Trustee and Indenture Trustee, and (ix) each
Guarantor (as defined below) which executes this Agreement or which from time to
time hereafter executes an instrument accepting and agreeing to the provisions
of this Agreement.
PREAMBLE
WHEREAS, pursuant to a Credit Agreement dated as of March 17, 1997, among
the Company, the Agent Bank, PNC Bank, National Association, and The Bank of
Nova Scotia, as Co-Agents, and the Banks (as amended from time to time, the
"Credit Agreement"), the Banks have, upon the terms and subject to the
conditions contained therein, made and agreed to make loans and otherwise
extended and agreed to extend credit to the Company; and
WHEREAS, the Credit Agreement has been amended by a First Amendment to
Credit Agreement dated as of June 23, 1998; a Second Amendment to Credit
Agreement dated as of September 30, 1998; a Third Amendment to Credit Agreement
dated as of July 27, 1999; and a Fourth Amendment to Credit Agreement dated as
of September 28, 1999; and
WHEREAS, the parties to such Credit Agreement have agreed to further amend
the Credit Agreement pursuant to the Fifth Amendment to Credit Agreement dated
as of the date hereof (the "New Bank Amendment"; references herein to the Credit
Agreement refer to the
<PAGE>
-2-
Credit Agreement as amended by the New Bank Amendment, and as may be further
amended from time to time); and
WHEREAS, pursuant to separate Note Purchase Agreements each dated as of
September 1, 1993 (collectively, as amended from time to time, the "1993 Note
Purchase Agreement"), between the Company and each purchaser as party thereto,
the Company issued, and such purchasers purchased, $130,000,000 principal amount
of the Company's 7.28% Senior Notes (the "1993 Notes"); and
WHEREAS, pursuant to separate Note Purchase Agreements, each dated as of
September 15, 1995 (as amended from time to time, the "1995 Note Purchase
Agreement" and, collectively with the 1993 Note Purchase Agreement, the "Note
Purchase Agreements"), between the Company and each purchaser as party thereto,
the Company has issued, and such purchasers purchased, (i) $76,000,000 principal
amount of the Company's 6.96% Series A Senior Notes, (ii) $14,000,000 principal
amount of the Company's 7.07% Series B Senior Notes, and (iii) $60,000,000
principal amount of the Company's 7.17% Series C Senior Notes (the Notes
described in clauses (i), (ii) and (iii), as such Notes may be amended from time
to time being the "1995 Notes" and, collectively with the 1993 Notes, the
"Notes"); and
WHEREAS, the Note Purchase Agreements have been amended by (i) an Amendment
to Note Purchase Agreement with respect to the 1993 Note Purchase Agreement,
dated as of October 18, 1996, and (ii) an Amendment to 1993 Note Purchase
Agreement and an Amendment to 1995 Note Purchase Agreement, each dated as of
December 14, 1998; and
WHEREAS, the Note Holders have agreed to further amend the Note Purchase
Agreements pursuant to the Waiver and Third Amendment to 1993 Note Purchase
Agreement and the Waiver and Second Amendment to 1995 Note Purchase Agreement,
each dated as of the date hereof (collectively, the "New Note Purchase
Amendment"; references herein to the Note Purchase Agreements refer to the Note
Purchase Agreements as amended by the New Note Purchase Amendment and as may be
further amended from time to time); and
WHEREAS, Bank of America, N.A. has issued a letter of credit pursuant to
which up to $15,172,603 may be drawn in connection with certain Industrial
Revenue Bonds issued to provide financing to the Company with respect to the
facility of America Steel and Wire Corporation in Cleveland, Ohio (the "Bank of
America Letter of Credit"); and PNC Bank, National Association, has issued a
letter of credit pursuant to which up to $26,299,179 may be drawn in connection
with certain Industrial Revenue Bonds issued to provide financing to the Company
with respect to the facility of the Company in Memphis, Tennessee (the "PNC
Letter of Credit"; and, collectively with the Bank of America Letter of Credit,
the "IRB Letters of Credit"); and the Company has agreed to reimburse the LC
Issuers for all amounts drawn on the IRB Letters of Credit pursuant to an
Amended and Restated Reimbursement Agreement dated as of the date hereof between
Bank of America, N.A. (as successor to Bank of America Illinois), American Steel
and Wire Corporation, and the Company (the "Bank of America Reimbursement
Agreement"), and a Reimbursement Agreement dated as of October 1, 1996, between
PNC Bank, National Association (as successor to PNC Bank, Kentucky, Inc.), and
the Company (the
<PAGE>
-3-
"PNC Reimbursement Agreements" and, collectively with the Bank of America
Reimbursement Agreement, as may be amended from time to time, the "Reimbursement
Agreements"); and
WHEREAS, the Company and the LC Issuers have agreed to amend the
Reimbursement Agreements by amendments dated as of the date hereof (the "LC
Amendments"; references herein to the Reimbursement Agreements refer to the
Reimbursement Agreements as amended by the LC Amendments, and as may be further
amended from time to time); and
WHEREAS, pursuant to the Equipment Lease, the Owner Trustee, as Lessor, has
leased certain melt shop equipment to the Company, as Lessee, and the rights of
the Owner Trustee to payments thereunder have been collaterally assigned to the
Indenture Trustee to secure amounts due with respect to the Equipment Notes
outstanding under (and as defined in) the Indenture (the "Equipment Notes"); and
WHEREAS, it was a condition precedent to (i) the Banks' entering into the
New Bank Amendment, (ii) the Note Holders entering into the New Note Purchase
Amendment, (iii) the LC Issuers entering into the LC Amendments, and (iv) the
Owner Trustee and Indenture Trustee entering into this Agreement that, among
other things, the Company and each of the Guarantors grant a first priority
perfected lien on and security interest in the Collateral (as hereinafter
defined) to the Collateral Agent, for the benefit of (1) the Banks and the Agent
Bank, as security for the Company's obligations to the Banks and the Agent Bank
under the Credit Agreement and the Guarantors' guarantee thereof, (2) the Note
Holders, as security for the Company's obligations under the Note Purchase
Agreements and the Notes and the Guarantors' guarantee thereof, (3) the LC
Issuers, as security for the Company's obligations under the Reimbursement
Agreements and the Guarantors' guarantee thereof, and (4) the Owner Trustee and
the Indenture Trustee, as assignee of the Owner Trustee, as security for the
Lease Claims, as defined herein.
WHEREAS, the Guarantors have executed and delivered guaranties of the
Secured Obligations (as hereinafter defined); and each of the Company and the
Guarantors has entered into certain security agreements and related documents
pursuant to which the Company or such Guarantor (as the case may be) has granted
to the Collateral Agent, for the benefit of the Secured Parties, a security
interest in and lien upon the Collateral, as defined herein.
NOW, THEREFORE, in consideration of the foregoing premises and for other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
(S)1. DEFINITIONS.
-----------
(S)1.1. Definitions. The following terms shall have the meanings set
-----------
forth in this (S)1 or elsewhere in the provisions of this Agreement referred to
below:
Action. See (S)2.2(a).
------
Actionable Default. Any failure of the Company or any Guarantor to
------------------
pay any of the Secured Obligations as and when due and payable in accordance
with the terms of any Bank
<PAGE>
-4-
Credit Document, Note Credit Document, Reimbursement Agreement, Equipment Lease
or Security Document, whether by acceleration (including automatic acceleration
upon the commencement of a bankruptcy case) or otherwise (collectively, a
"Payment Default"), or the commencement of any bankruptcy, insolvency,
reorganization or other similar case or proceeding by or against the Company or
any Guarantor, or the making by the Company or any Guarantor of an assignment
for the benefit of its creditors.
Additional Advance Amount. The principal amount of any additional
-------------------------
loans made or letters of credit issued under the Credit Agreement such that,
after giving effect to all of such additional loans and letters of credit, the
sum of the Loan and Reimbursement Principal Obligations and Outstanding Bank LC
Exposure at the time of reference thereto do not exceed in the aggregate the
Maximum Bank Commitment.
Affiliate. As to any Person, a Person controlling, controlled by, or
---------
under common control with such Person.
Agent Bank. As defined in the introductory paragraph hereto and shall
----------
include any replacement or successor Agent under the Credit Agreement, or any
like agent (or replacement thereof or successor thereto) under any Replacement
Credit Agreement.
Agreement. As defined in the introductory paragraph hereto.
---------
Applicable Amount. See (S)4.1(d) hereof.
-----------------
Applicable Deposit. See (S) 4.1(c) hereof.
------------------
Applicable LC Issuer. See (S) 4.1(d) hereof.
--------------------
Avoidance Event. The commencement of bankruptcy or insolvency
---------------
proceedings against the Company within ninety (90) days after the date that the
Lien of the Collateral Agent in the Collateral becomes perfected with respect to
such portion of the Collateral existing on the date hereof as may be perfected
by the filing of UCC-1 financing statements, and the avoidance of such Lien of
the Collateral Agent in any material amount of such Collateral as to which such
Lien that may be perfected by the filing of UCC-1 financing statements.
Bank Credit Documents. The Credit Agreement and the other Bank Loan
---------------------
Documents, and any Replacement Credit Agreement, as the same may hereafter be
amended, renewed, extended, restated, supplemented or otherwise modified from
time to time in accordance with the terms of this Agreement.
Bank Debt. The "Obligations" as defined in the Credit Agreement (as
---------
in effect on the date hereof), or any like term of the same meaning contained in
any Replacement Credit Agreement. Notwithstanding the foregoing, Bank Debt
shall not include Loan and Reimbursement Principal Obligations and Outstanding
Bank LC Exposure to the extent, and only to the extent, that the sum of the Loan
and Reimbursement Principal Obligations and Outstanding Bank LC Exposure exceeds
the Maximum Bank Commitment.
<PAGE>
-5-
Bank Loan Documents. The "Loan Documents", as defined in the Credit
-------------------
Agreement, or any like term of the same meaning contained in any Replacement
Credit Agreement.
Bank of America Letter of Credit. As defined in the Preamble hereto.
--------------------------------
Bank of America Reimbursement Agreement. As defined in the Preamble
---------------------------------------
hereto.
Bank of America Reimbursement Agreement Debt. All indebtedness,
--------------------------------------------
obligations and liabilities of the Company or American Steel & Wire Corporation
owing to Bank of America, N.A. arising or incurred under the Bank of America
Reimbursement Agreement, whether existing on the date of this Agreement or
arising hereafter, direct or indirect, joint or several, absolute or contingent,
matured or unmatured, arising by contract, operation of law or otherwise.
Notwithstanding the foregoing, Bank of America Reimbursement Agreement Debt
shall not include (a) the principal amount of any reimbursement obligations in
respect of drawings under the Bank of America Letter of Credit in excess of
$15,172,603 in the aggregate, or (b) any Outstanding IRB LC Exposure; provided,
--------
that (i) drawings of amounts which will be automatically reinstated unless a
notice is timely given by the LC Issuer that such amount will not be reinstated
will not be deemed to be drawings for the purposes of this sentence unless such
notice of non-reinstatement is in fact given, and (ii) drawings to fund any
tender purchase price of the related industrial revenue bonds will not be deemed
to be drawings for the purposes of this sentence so long as the related LC
Issuer has reinstated the amount of such paid drawing,.
Bankruptcy Event. (a) Commencement by the Company or any Guarantor
----------------
(the Company or any such Guarantor, a "Debtor") of a voluntary case in the
United States seeking liquidation, reorganization, or other relief under any
applicable bankruptcy, insolvency or other similar law now or hereafter in
effect, consent to the entry of an order for relief in an involuntary case under
any such law, or consent by the Debtor to the appointment of or taking
possession by a receiver, liquidator, assignee, trustee, custodian, sequestrator
(or other similar official) of a Debtor or of any substantial part of its
property, or any general assignment by a Debtor for the benefit of creditors;
(b) a court having jurisdiction in the premises shall enter a decree or order
for relief in respect of a Debtor in an involuntary case in the United States
under any applicable bankruptcy, insolvency or other similar law now or
hereafter in effect, or shall appoint a receiver, liquidator, assignee,
custodian, trustee, sequestrator (or similar official) of a Debtor or for any
substantial part of its property, or shall order the winding-up or liquidation
of its affairs; or (c) any involuntary bankruptcy petition shall have been filed
against any Debtor seeking a decree or order of relief of the type referred to
in clause (b) above and such petition shall not have been dismissed within a
period of sixty (60) consecutive days.
Banks. As defined in the introductory paragraph hereto, together with
-----
their respective successors and assigns, and shall include any replacement,
additional or successive lenders under any Replacement Credit Agreement.
Cash Collections Collateral. Collateral consisting of cash amounts
---------------------------
deposited in local depository bank accounts and lock-box accounts of the Company
or any of the Securing
<PAGE>
-6-
Guarantors and cash amounts deposited from such accounts into any like account
or accounts maintained by the Agent Bank or any of the other Banks or the
Collateral Agent.
Casualty Event. See definition of Net Proceeds in this (S) 1.1.
--------------
Collateral. Any of the properties and assets of whatever nature,
----------
tangible or intangible, now owned or existing or hereafter acquired or arising,
of the Company or any of the Guarantors in which at the time of reference a Lien
has been granted or has purportedly been granted to the Collateral Agent to
secure the Secured Obligations and which has not been released pursuant to the
terms hereof, including, without limitation, all Cash Collections Collateral and
all other cash provided to be the subject of a Lien to secure any of the Secured
Obligations as contemplated by any Security Document, and any property and
assets paid or payable to the Secured Parties or Collateral Agent under any of
the Guaranties or any subordination agreement, but specifically excluding the
Lease Assets.
Collateral Agent. As defined in the introductory paragraph hereto
----------------
unless and until a successor Collateral Agent shall have been appointed pursuant
to (S)5.4 hereof, and thereafter "Collateral Agent" shall mean such successor
Collateral Agent.
Collateral Agent Bank. As defined in the introductory paragraph
---------------------
hereto and any bank, in its individual capacity, serving as Collateral Agent.
Company. As defined in the introductory paragraph hereto.
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Credit Agreement. As defined in the Preamble hereto.
----------------
Credit Documents. Collectively, the Bank Credit Documents, the Note
----------------
Credit Documents, the Reimbursement Agreements, the Lease Documents, and the
Security Documents.
Debtor. See definition of Bankruptcy Event in this (S)1.1.
------
Default. Any event or condition which, with the giving of notice or
-------
the lapse of time, or both, would become an Event of Default.
Demand Notice. See (S)4.4(a).
-------------
Disposition. Any sale, exchange, or other disposition of assets,
-----------
except that the following shall not constitute Dispositions hereunder: (a) any
sale of inventory in the ordinary course of business; (b) the Transfer of assets
by the Company to a Guarantor or by a Guarantor to the Company or another
Guarantor, and (c) any sale or other Transfer of assets of Cumberland Recyclers
L.L.C. to Birmingham Southeast, LLC provided that such assets are sold subject
to the continuing Lien of the Collateral Agent.
Distribution Amount. See (S)4.1(c)(i).
-------------------
<PAGE>
-7-
Enforcement Notice. Written notice given by the Requisite Parties or
------------------
Special Requisite Parties, as the case may be, to the Collateral Agent (a)
stating that a Notice of Actionable Default has theretofore been given by such
Requisite Parties or Special Requisite Parties, as the case may be, to the
Collateral Agent and that the Actionable Default specified in such Notice of
Actionable Default continued to exist uncured for the applicable period
described in (S)4.5, and (b) setting forth instructions from such Requisite
Parties or Special Requisite Parties, as the case may be, to the Collateral
Agent to exercise all or any such rights, powers and remedies as are available
under the Security Documents and making such additional statements as may be
called for under (S)4.5.
Equipment Lease. As defined in the Preamble hereto.
---------------
Equipment Notes. As defined in the Preamble hereto.
---------------
Equity Interests. With respect to any Person, shares of capital stock
----------------
of (or other ownership or profit interests in) such Person, warrants, options or
other rights for the purchase or other acquisition from such Person of shares of
capital stock of (or other ownership or profit interests in) such Person,
securities convertible into or exchangeable for shares of capital stock of (or
other ownership or profit interests in) such Person or warrants, rights or
options for the purchase or other acquisition from such Person of such shares
(or such other interests), and other ownership or profit interests in such
Person (including, without limitation, partnership, member or trust interests
therein), whether voting or nonvoting, and whether or not such shares, warrants,
options, rights or other interests are authorized or otherwise existing on any
date of determination.
Equity Issuance. Any issuance or sale by a Person of any Equity
---------------
Interest in such Person; provided, however, that the term "Equity Issuance" does
not include any issuance or sale by a Person to the extent that such issuance or
sale is made (a) to a current or former director, officer or employee of such
Person pursuant to an "employee benefit plan", as such term is defined in Rule
405 promulgated under the Securities Act of 1933, as amended, or (b) pursuant to
a rights plan existing on the date hereof (or such other rights plan as to which
the issuance of Equity Interests thereunder has been excluded from the
definition of "Equity Interest" herein with the written consent of the Requisite
Parties).
Event of Default. Any "Event of Default" under and as defined in the
----------------
Credit Agreement, any "Event of Default" under and as defined in either of the
Note Purchase Agreements, any Event of Default under either of the Reimbursement
Agreements, any "Lease Event of Default" under or as defined in the Equipment
Lease or any like term of similar meaning contained in any Replacement Credit
Agreement.
Guaranties. See definition of "Guarantors" in this (S)1.1.
----------
Guarantors. American Steel & Wire Corporation, Birmingham East Coast
----------
Holdings, LLC, Norfolk Steel Corporation, Port Everglades Steel Corporation,
Birmingham Recycling Investment Company, Midwest Holdings, Inc., and Cumberland
Recyclers, LLC, and any other party that may from time to time hereafter execute
and deliver a guaranty for the
<PAGE>
-8-
benefit of any one or more of the Secured Parties guarantying the Secured
Obligations (collectively, the "Guaranties").
Indemnity. See Section 4.1(d) hereof.
---------
Indenture. As defined in the introductory paragraph hereto.
---------
Indenture Trustee. As defined in the introductory paragraph hereto.
-----------------
IRB Letters of Credit. As defined in the Preamble hereto.
---------------------
LC Amendments. As defined in the Preamble hereto.
-------------
LC Issuers. As defined in the introductory paragraph hereto, together
----------
with their respective successors and assigns (except that references to LC
Issuers in (S) 4.1(d) hereof refer to the LC Issuers without giving effect to
any succession or assignment that is effected or agreed to in connection with or
as a condition of a sale of the assets of SBQ).
Lease Assets. The "Equipment" and the "Indenture Estate", as each
------------
term is defined in the Equipment Lease (as in effect on the date hereof); and
any other property of the Owner Trustee or the Indenture Trustee.
Lease Claims. All Lease Payment Claims and Lease Expense/Indemnity
------------
Claims.
Lease Documents. The "Operative Agreements," as defined in the
---------------
Equipment Lease (as in effect on the date hereof).
Lease Expense/Indemnity Claims. All claims of the Owner Trustee, the
------------------------------
Indenture Trustee, or any of the Owner Participants or the Lenders against the
Company under any of the Lease Documents or under Section 11.11 of this
Agreement (other than the Lease Payment Claims), in each case whether existing
on the date of this Agreement or arising hereafter, direct or indirect, joint or
several, absolute or contingent, matured or unmatured, arising by contract,
operation of law or otherwise.
Lease Payment Claims. All claims of the Owner Trustee against the
--------------------
Company under the Equipment Lease (as in effect on the date hereof) for payment
of "Basic Rent," "Stipulated Loss Value," "Make-Whole Amount" (as each term is
defined therein), and interest accrued on any of the foregoing, in each case
whether existing on the date of this Agreement or arising hereafter, direct or
indirect, joint or several, absolute or contingent, matured or unmatured,
arising by contract, operation of law or otherwise.
Lease Sharing Amount. An amount equal, as of any date, to either (a)
--------------------
if the Equipment Lease has been terminated on or prior to such date, the
aggregate unpaid amount of Lease Payment Claims claimed by the Owner Trustee
(and/or the Indenture Trustee, as assignee) under Section 15 of the Equipment
Lease (or, in the event that such claim has been liquidated by adjudication or
settlement, such liquidated amount), or (b) if the Equipment Lease has not been
<PAGE>
-9-
terminated on or prior to such date, an amount equal to 33 1/3% of the
Stipulated Loss Value as of such date.
Lease Trigger Event. The occurrence of any of the following: (a) a
-------------------
Bankruptcy Event, (b) any of the Secured Obligations (other than the Lease
Claims) shall have been declared by the holder thereof to be due and payable
prior to the scheduled maturity date therefor, (c) any action shall have been
taken to realize on the Collateral at any time while an Actionable Default shall
be continuing, (d) a Lease Event of Default (as defined in the Equipment Lease
as in effect on the date hereof) shall have occurred and be continuing, or (e)
such time as the book value of all assets of the Company and its Subsidiaries
(other than the assets of SBQ) which have been included in Dispositions
subsequent to the date hereof shall be more than $75,000,000.
Lenders. As defined in the Indenture.
-------
Letter of Credit Collateral Obligations. The obligations of the
---------------------------------------
Company under any Bank Credit Document or Reimbursement Agreement (as in effect
on the date hereof) to deposit cash with respect to Outstanding Bank LC Exposure
or Outstanding IRB LC Exposure up to, but not exceeding, one dollar of cash for
each dollar of undrawn face amount of each applicable outstanding letter of
credit.
Lien. Any mortgage, security deed, deed of trust, pledge, lien,
----
security interest or other encumbrance, whether now existing or hereafter
created, acquired or arising, and whether voluntary or involuntary, to secure
payment of a debt or performance of an obligation.
Loan and Reimbursement Principal Obligations. At the time of
--------------------------------------------
reference thereto, Bank Debt consisting of the principal amount of loans
outstanding under the Bank Credit Documents and any unpaid reimbursement
obligations in respect of drawings under letters of credit issued pursuant to
the Bank Credit Documents.
Majority Secured Parties. (i) A group of holders of Secured
-------------------------
Obligations which includes (a) the holders of at least 51% of the Note Principal
Obligations, (b) the holders of at least 51% of the Reimbursement Agreement
Debt, and (c) the holders of at least 51% of the Loan and Reimbursement
Principal Obligations, or (ii) after the Secured Obligations referred to in
clause (i) above have been paid in full, the Indenture Trustee for so long as
the Lien of the Indenture remains outstanding, and thereafter the Owner Trustee.
Make-Whole Amount. With respect to either of the Note Purchase
-----------------
Agreements and the Note Debt owed thereunder, the "Make-Whole Amount" as defined
in such Note Purchase Agreement on the date hereof.
Maximum Bank Commitment. (a) $300,000,000 prior to any mandatory
-----------------------
reductions of the Commitments, as such term is defined in the Credit Agreement,
pursuant to Section 2.12 of the Credit Agreement; and (b) after any mandatory
reductions of such Commitments pursuant to Section 2.12 of the Credit Agreement,
the result of (i) $300,000,000 minus (ii) the aggregate amount of such mandatory
-----
reductions.
<PAGE>
-10-
Net Lease Sharing Amount. An amount equal, as of any date, to either
------------------------
(a) if the Equipment Lease has been terminated on or prior to such date, the
Lease Sharing Amount as of such date, or (b) if the Equipment Lease has not been
terminated on or prior to such date, the result of the Lease Sharing Amount as
of such date minus the sum of all amounts previously deposited in the Section
-----
4.1(e) Cash Collateral Account.
Net Proceeds. (a) In the case of (x) a Disposition, the aggregate
------------
amount of all cash received (including without limitation, all cash payments
received by way of deferred payment of principal or interest pursuant to a note
or installment receivable or otherwise, but only as and when received), directly
or indirectly, by the Company or any Guarantor in connection with such
Disposition or (y) in the case of any loss, theft, damage, destruction, or
taking or other eminent domain action (a "Casualty Event"), the aggregate amount
of cash proceeds of insurance, condemnation awards and other compensation
received by the Company or any Guarantor in respect of such Casualty Event, in
each case net of (i) the amount of any reasonable out-of-pocket legal fees,
title and recording tax expenses, commissions and other customary fees and
expenses actually incurred by the Company or any Guarantor in connection with
such Disposition or Casualty Event, (ii) any income taxes reasonably estimated
in good faith by the independent certified public accountant of the Company or
any such Guarantor to be payable in connection with such Disposition or Casualty
Event and other taxes thereon to the extent such other taxes are actually paid
by the Company or any Guarantor, (iii) any repayments by the Company or any
Guarantor of indebtedness (other than indebtedness under any of the Credit
Documents (other than the Lease Documents)) to the extent that such indebtedness
is secured by a Lien on the property that is the subject of such Disposition or
Casualty Event, (iv) in the case of a Casualty Event, the amount of any proceeds
permitted under the Security Documents to be paid to the Company or any
Guarantor for the purpose of replacing, rebuilding or restoring the Collateral
which was affected by the Casualty Event, (v) in the case of a Disposition, the
amount of any proceeds which are not required under the Credit Agreement or the
Note Purchase Agreements to be applied to prepay the Bank Debt or the Note Debt,
and (vi) in the case of a Disposition, any amount of cash reserves reasonably
required to be established to satisfy liabilities relating to the assets sold,
so long as such reserves are paid to and held by the Collateral Agent as
additional Collateral hereunder; and (b) in the case of an Equity Issuance,
sixty percent (60%) of the aggregate amount of all cash received by the Company
or any Guarantor in respect of such Equity Issuance, net of investment banking
fees, legal fees, accountants fees, underwriting discounts and commissions and
other customary fees and expenses actually incurred by the Company in connection
with such Equity Issuance.
New Bank Amendment. As defined in the Preamble hereto.
------------------
New Note Purchase Amendment. As defined in the Preamble hereto.
---------------------------
1993 Note Purchase Agreement. As defined in the Preamble hereto.
----------------------------
1995 Note Purchase Agreement. As defined in the Preamble hereto.
----------------------------
1993 Notes. As defined in the Preamble hereto.
----------
<PAGE>
-11-
1995 Notes. As defined in the Preamble hereto.
----------
Note Credit Documents. The Note Purchase Agreements and the other
---------------------
Note Purchase Documents, as the same may hereafter be amended, renewed,
extended, restated, supplemented or otherwise modified from time to time in
accordance with the terms of this Agreement.
Note Debt. All indebtedness, obligations and liabilities of any of
---------
the Company, the Guarantors and the Subsidiaries to or for the benefit of any
Note Holder arising or incurred under the Note Purchase Agreements (including,
without limitation, Make-Whole Amounts), the Notes or the Guaranties, existing
on the date of this Agreement or arising hereafter, direct or indirect, joint or
several, absolute or contingent, matured or unmatured, arising by contract,
operation of law or otherwise. Notwithstanding the foregoing, Note Debt shall
not include Note Principal Obligations to the extent, and only to the extent,
that such Note Principal Obligations at any time exceed $280,000,000.
Note Holders. As defined in the introductory paragraph hereto,
------------
together with their respective successors and assigns, and shall include any
replacement, additional or successive lender or note purchaser.
Note Principal Obligations. At the time of reference thereto, Note
--------------------------
Debt consisting of the amounts of principal outstanding under the Notes.
Note Purchase Agreements. As defined in the Preamble hereto.
------------------------
Note Purchase Documents. The Notes, the Note Purchase Agreements and
-----------------------
any "notes" and "loan documents", or any like terms of the same meaning, may be
amended, renewed, extended, restated, supplemented or otherwise modified from
time to time in accordance with the terms of this Agreement.
Notes. The Notes, as such term is defined in the Preamble hereto,
-----
together with any promissory notes or other evidences of indebtedness issued in
exchange for, replacement of or substitution for the Notes under the Note
Purchase Agreements.
Notice of Actionable Default. A notice by the Requisite Parties or
----------------------------
the Special Requisite Parties as the case may be, delivered to the Collateral
Agent, stating that an Actionable Default has occurred and is continuing.
Other Banks. See (S)4.1(d) hereof.
-----------
Outstanding Bank LC Exposure. The undrawn face amount of all
----------------------------
outstanding letters of credit issued under the Bank Credit Documents. For the
avoidance of doubt, the undrawn face amount of the Outstanding IRB Letters of
Credit are not included in the Outstanding Bank LC Exposure.
<PAGE>
-12-
Outstanding IRB LC Exposure. The aggregate undrawn face amount of the
---------------------------
outstanding IRB Letters of Credit.
Owner Participants. As defined in the Indenture.
------------------
Owner Trustee. As defined in the Preamble hereto.
-------------
Paid Percentage. See (S)4.1(c)(ii).
---------------
Payment Default. See (S)1.1 (in the definition of Actionable
---------------
Default).
Permitted Liens. Liens the existence of which does not breach Section
---------------
8.19(a) of each of the Note Purchase Agreements (as in effect on the date
hereof) and the existence of which does not breach Section 9.2(a) of the Credit
Agreement.
Person. Any individual, corporation, partnership, limited liability
------
company, trust, unincorporated association, business or other legal entity, and
any government or any governmental agency or political subdivision thereof.
PNC Letter of Credit. As defined in the Preamble hereto.
--------------------
PNC Reimbursement Agreement. As defined in the Preamble hereto.
---------------------------
PNC Reimbursement Agreement Debt. The "Company Obligations" as
--------------------------------
defined in the PNC Reimbursement Agreement. Notwithstanding the foregoing, PNC
Reimbursement Agreement Debt shall not include (a) the principal amount of any
reimbursement obligations in respect of drawings under the PNC Letter of Credit
in excess of $26,299,197 in the aggregate, or (b) any Outstanding IRB LC
Exposure; provided, that (i) drawings of amounts which will be automatically
--------
reinstated unless a notice is timely given by the LC Issuer that such amount
will not be reinstated will not be deemed to be drawings for the purposes of
this sentence unless such notice of non-reinstatement is in fact given, and (ii)
drawings to fund any tender purchase price of the related industrial revenue
bonds will not be deemed to be drawings for the purposes of this sentence so
long as the related LC Issuer has reinstated the amount of such paid drawing.
Post-Default Cash Sweep Payment. Any payment to any Bank pursuant to
-------------------------------
the provisions of (S)2.8(b)(iii) of the Credit Agreement (as in effect on the
date hereof) or any similar successor provision which, in any such case, shall
have been made after the Collateral Agent receives notice from any Bank, Note
Holder or LC Issuer of the occurrence of an Event of Default and prior to the
receipt by the Collateral Agent from such Bank, Note Holder or LC Issuer, or
from the Requisite Parties, of notice that payments referred to in this
definition made after such Event of Default shall nevertheless not constitute
Post-Default Cash Sweep Payments (subject to the implementation of the same
provisions after notice to the Collateral Agent of any subsequent Event of
Default).
Pre-Reduction Percentage. See (S)4.1(c)(i).
------------------------
<PAGE>
-13-
Principal Obligations. Loan and Reimbursement Principal Obligations,
---------------------
Note Principal Obligations, Bank of America Reimbursement Agreement Debt in an
amount not to exceed $15,172,603, and PNC Reimbursement Agreement Debt in an
amount not to exceed $26,299,197.
Priority Debt. The aggregate amount of Loan and Reimbursement
--------------
Principal Obligations and Outstanding Bank LC Exposure under any Bank Credit
Document at any time in an amount equal to the lesser of (a) the amount thereof
at such time in excess of the Priority Threshold Amount, and (b) $65,000,000.
Priority Threshold Amount. $235,000,000, as reduced from time to time
-------------------------
by the same amount as the "Priority Threshold Amount" (as such term is defined
in the Credit Agreement) is reduced pursuant to (S)2.12(d) thereof as in effect
on the date hereof.
Qualifying Assets. See (S)4.9(b) hereof.
-----------------
Reimbursement Agreements. As defined in the Preamble hereto.
------------------------
Reimbursement Agreement Debt. Collectively, the Bank of America
----------------------------
Reimbursement Agreement Debt and the PNC Reimbursement Agreement Debt.
Replacement Credit Agreement. See (S)4.10(a).
----------------------------
Requisite Parties. As of any date, (i) the holders of at least 66
-----------------
2/3% in aggregate principal amount of the sum of the Reimbursement Agreement
Debt, the Note Debt and the Bank Debt outstanding on such date, or (ii) after
the Secured Obligations referred to in clause (i) above have been paid in full,
the Indenture Trustee so long as the Lien of the Indenture remains outstanding,
and thereafter the Owner Trustee.
Responsible Officer. With respect to the Collateral Agent means an
-------------------
officer in its Corporate Trust Department.
Restricted Subsidiary. As defined in the Credit Agreement.
---------------------
SBQ. The "special bar quality" division of the Company and its
---
Subsidiaries which includes (a) all assets of the Company and its Subsidiaries
located in, or related to its operations in, Memphis, Tennessee; and (b) the
assets of American Steel and Wire Corporation (and the Company's equity
interests in American Steel and Wire Corporation), but specifically excluding
(i) the "missile wire" facility, located in Cleveland, Ohio, (ii) the Company's
equity interest in American Iron Reduction, LLC, and (iii) the interests of the
Owner Trustee and/or the Indenture Trustee in the Lease Assets.
Section 4.1(e) Cash Collateral Account. See (S)4.1(e) hereof.
--------------------------------------
Section 4.1(h) Cash Reserves Account. See (S) 4.1(h) hereof.
------------------------------------
<PAGE>
-14-
Section 4.1(e) Distribution Amount. See (S)4.1(e) hereof.
----------------------------------
Secured Obligations. Collectively, (a) the Bank Debt, unless and
-------------------
until the Agent Bank has given notice in writing to the Collateral Agent that
either (i) the Bank Debt has been paid in full and all commitments under the
Bank Credit Documents have terminated, been canceled or permanently reduced to
zero or (ii) the Bank Debt otherwise no longer constitutes Secured Obligations
hereunder, (b) the Note Debt, unless and until all of the Note Holders have
given notice in writing to the Collateral Agent that the Note Debt has been paid
in full or no longer constitutes Secured Obligations hereunder, (c) the Lease
Claims, unless and until the Indenture Trustee and Owner Trustee have given
notice in writing to the Collateral Agent that the Lease Claims have been paid
in full or no longer constitute Secured Obligations hereunder, (d) the Bank of
America Reimbursement Agreement Debt unless and until the holder thereof has
given notice in writing to the Collateral Agent that the Bank of America Letter
of Credit has been terminated and any and all Bank of America Reimbursement
Agreement Debt has been paid in full or no longer constitutes Secured
Obligations hereunder, (e) the PNC Reimbursement Agreement Debt unless and until
the holder thereof has given notice in writing to the Collateral Agent that the
PNC Letter of Credit has been terminated and any and all PNC Reimbursement
Agreement Debt has been paid in full or no longer constitutes Secured
Obligations hereunder, (f) involuntary overdrafts arising in the ordinary course
of banking business of cash management, payroll and similar deposit accounts
maintained by the Company with any of the Banks, which overdrafts exist at the
time that an Event of Default occurs, and (g) all indebtedness, obligations and
liability of the Company or any Guarantor to the Collateral Agent under any
Security Document.
Secured Parties. The Agent Bank, the Banks, the Note Holders, the
---------------
Owner Trustee, the Indenture Trustee, the LC Issuers and the Collateral Agent.
Securing Guarantors. The Guarantors who have granted to the
-------------------
Collateral Agent for the benefit of the Secured Parties a Lien on any of their
properties and assets to secure payment or performance of any of the Secured
Obligations.
Security Documents. Any and all instruments or agreements pursuant to
------------------
which a Lien is created or arises, or a Guaranty is delivered, in favor of the
Collateral Agent or any other Secured Party to secure or guarantee any of the
Secured Obligations (but excluding in any event the Lease Documents).
Special Cash Collateral Account. See (S)4.1(c).
-------------------------------
Special Requisite Parties. As of any date, either (a) the holders of
-------------------------
at least 25% in aggregate principal amount of the Reimbursement Agreement Debt,
the Note Debt, and the Bank Debt outstanding on such date if a Payment Default
shall have occurred and be continuing with respect to such Reimbursement
Agreement Debt, Note Debt or Bank Debt, as the case may be, on such date and at
least thirty (30) days prior to such date the Agent Bank, the LC Issuers, each
of the Note Holders and the Indenture Trustee (or, if the Lien of the Indenture
shall no longer remain outstanding, the Owner Trustee) shall have received
written notice of such Payment Default, or otherwise (b) the Requisite Parties.
<PAGE>
-15-
Stipulated Loss Value. As defined in the Equipment Lease (as in
---------------------
effect on the date hereof).
Stock Pledge Agreement. One or more instruments or agreements
----------------------
executed in favor of and delivered to the Collateral Agent in connection with
this Agreement which purports to pledge and grant a security interest to the
Collateral Agent in shares of capital stock or other debt or equity interest of
any Subsidiary or other Person.
Subsidiary. As defined in the Note Purchase Agreements (as in effect
----------
on the date hereof).
Terminated IRB LC. See (S) 4.1(d) hereof.
-----------------
Total Undrawn Letter of Credit Exposure. At the time of reference
---------------------------------------
thereto, the Outstanding Bank LC Exposure at such time and the Outstanding IRB
LC Exposure at such time.
Transfer. Any sale (including any sale and subsequent lease as
--------
lessee), lease as lessor, transfer or other disposition of any asset.
(S)1.2. Terms Generally. The definitions in (S)1.1 shall apply
----- ---------
(except as otherwise specified) equally to both the singular and plural forms of
the terms defined. Whenever the context may require, any pronoun shall include
the corresponding masculine, feminine and neuter forms. The words "include",
"includes" and "including" shall be deemed to be followed by the phrase "without
limitation". All references herein to Sections shall be deemed references to
Sections of this Agreement unless the context shall otherwise require.
(S)2. RECOURSE OF SECURED PARTIES; OTHER COLLATERAL; ACTION BY
-------- -- ------- ------- ----- ---------- ------ --
SECURED PARTIES.
- ------- -------
(S)2.1. Recourse of Secured Parties; Other Collateral.
-------- -- ------- ------- ----- ----------
(a) Each of the Secured Parties acknowledges and agrees that (i) it
shall only have recourse to the Guaranties and the Collateral through the
Collateral Agent and that it shall have no independent recourse to the
Guaranties or the Collateral and (ii) the Collateral Agent shall have no
obligation to, and shall not (except pursuant to (S)3.2(c) or as otherwise
specifically provided herein), take any action hereunder or under any Security
Document to which it is a party, except upon instructions from the Requisite
Parties in accordance with (S)2.2 hereof.
(b) Nothing contained herein shall restrict (i) the rights of any
Secured Party to pursue remedies, by proceedings in law and equity, to collect
any of the Secured Obligations or to enforce the performance of and provisions
of any of the Secured Obligations, to the extent in either case that such
remedies do not relate to the Collateral or interfere with the Collateral
Agent's ability to take action hereunder or under the Security Documents or (ii)
the rights of any Secured Party to initiate an action or actions in any
bankruptcy, reorganization, compromise, arrangement, insolvency, readjustment of
debt, dissolution or liquidation or similar proceeding in
<PAGE>
-16-
its individual capacity and to appear or be heard on any matter before the
bankruptcy or other applicable court in any such proceeding, including, without
limitation, with respect to any question concerning the post-petition usage of
Collateral and post-petition financing arrangements.
(c) None of the Agent Bank, the Collateral Agent or any other Secured
Party shall contest the validity, perfection, priority or enforceability of or
seek to avoid any Lien securing any Secured Obligation, and each party hereby
agrees to cooperate in the defense of any action contesting the validity,
perfection, priority or enforceability of such Liens. Except as expressly
provided in this Agreement with respect to distributions of Collateral or
proceeds by the Collateral Agent to the Secured Parties, no Secured Party shall
have the right to obtain any of the Collateral for its sole account or the
benefit for its sole account of any Lien securing any of the Secured
Obligations. No Secured Party may seek, and each Secured Party hereby waives,
any right to require any of the Collateral to be partitioned.
(d) Notwithstanding the foregoing, nothing in this Agreement, any
Security Document or any related agreement shall impair or otherwise adversely
affect in any respect any rights or entitlements of the Owner Trustee or the
Indenture Trustee under any of the Lease Documents or, in the event of any
Bankruptcy Event, under Section 365 of the United States Bankruptcy Code with
respect to any of the Lease Documents.
(S)2.2. Action by Secured Parties.
------ -- ------- -------
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action permitted or required by this Agreement to be given or
taken by the Requisite Parties or Special Requisite Parties shall be embodied in
and evidenced by one or more instruments and signed by or on behalf of such
Requisite Parties or Special Requisite Parties, as applicable, and, except as
otherwise expressly provided in any such instrument to be effective at a later
date, any such action shall become effective when such instrument or instruments
shall have been received by the Collateral Agent. The instrument or instruments
evidencing any action (and the action embodied therein and evidenced thereby)
are sometimes referred to herein as an "Action" of the Persons signing such
instrument or instruments.
(b) The Collateral Agent shall be entitled to rely absolutely upon an
Action of the Requisite Parties or Special Requisite Parties if such Action
purports to be taken by or on behalf of such Requisite Parties or Special
Requisite Parties, and nothing in this (S)2.2 or elsewhere in this Agreement
shall be construed to require the Collateral Agent to demonstrate that such
Requisite Parties or Special Requisite Parties have been authorized by the
Banks, Note Holders, LC Issuers, the Indenture Trustee and/or the Owner Trustee,
as applicable, to take any action which they purport to be taking, the
Collateral Agent being entitled to rely conclusively, and being fully protected
in so relying, on any Action of any Banks, any Note Holders, LC Issuers, the
Indenture Trustee and/or the Owner Trustee, as the case may be.
(S)3. DUTIES OF COLLATERAL AGENT.
------ -- ---------- -----
<PAGE>
-17-
(S)3.1. Notices to the Secured Parties. The Collateral Agent shall,
------- -- --- ------- -------
as soon as practicable but in any event, if applicable, within five (5) business
days following receipt thereof, furnish to each of the Agent Bank, each of the
Note Holders, each of the LC Issuers, and the Owner Trustee and the Indenture
Trustee:
(a) a copy of each Notice of Actionable Default, Demand Notice or
Enforcement Notice received by the Collateral Agent;
(b) a copy of each certificate received by the Collateral Agent
rescinding or withdrawing a Notice of Actionable Default, Demand Notice or
Enforcement Notice;
(c) written notice of any release or subordination by the
Collateral Agent of any Collateral;
(d) a copy of any notice or other communication given or received
by the Collateral Agent under any Security Document; and
(e) such other notices required by the terms of this Agreement to
be furnished by or to the Collateral Agent.
Any Notice of Actionable Default, Demand Notice or Enforcement Notice shall
be deemed to have been given when actually received by a Responsible Officer of
the Collateral Agent and, subject to (S)4.5(c), to have been rescinded or
withdrawn when a Responsible Officer of the Collateral Agent has actually
received from the notifying party a notice rescinding or withdrawing such Notice
of Actionable Default, Demand Notice or Enforcement Notice. Any Notice of
Actionable Default, Demand Notice or Enforcement Notice shall be deemed to be
outstanding at all times after such notice has been given until such time, if
any, as such notice has been rescinded or withdrawn.
(S)3.2. Actions Under Security Documents.
------- ----- -------- ---------
(a) The Collateral Agent shall not be obligated to take any action
under this Agreement or any of the Security Documents except for the performance
of such duties as are specifically set forth herein or therein. The Collateral
Agent shall take any action under or with respect to the Security Documents or
the Collateral which is requested by the Requisite Parties or Special Requisite
Parties pursuant to (S)4.5; provided that the Collateral Agent shall not amend
--------
or waive any provision of the Security Documents except in accordance with (S)7.
(b) The Collateral Agent shall exercise or refrain from exercising all
such rights, powers and remedies as shall be available to it under the Security
Documents to which it is a party or any of them or with respect to the
Collateral solely in accordance with an Enforcement Notice received from the
Requisite Parties or Special Requisite Parties in accordance with (S)4.5. The
Collateral Agent shall have the right to decline to follow any such direction if
(i) the Collateral Agent, being advised by counsel and acting in good faith,
determines that the directed action is not permitted by the terms of this
Agreement or the
<PAGE>
-18-
Security Documents or is unlawful or (ii) the Collateral Agent, being advised by
counsel and acting in good faith, is in reasonable doubt as to whether such
directed action is permitted by this Agreement or the Security Documents or
would involve it in personal liability and, in the case of this clause (ii), is
not provided, upon its request therefor, written confirmation from the Requisite
Parties or the Special Requisite Parties, as the case may be, providing the
Enforcement Notice that the Collateral Agent's indemnity by the other Secured
Parties contained in this Agreement would apply without exception for such
directed action. All directions from the Requisite Parties and Special Requisite
Parties shall be as contemplated and permitted by this Agreement and the
applicable Security Document and will not be illegal. The Collateral Agent may
rely on any such direction given to it by the Requisite Parties and Special
Requisite Parties and shall be fully protected, and shall under no circumstances
(absent the gross negligence and willful misconduct of the Collateral Agent) be
liable to the Company, any Guarantor, any holder of any Secured Obligations, or
any other Person for taking or refraining from taking action in accordance with
such direction and the otherwise applicable terms of this Agreement.
(c) In the absence of an Enforcement Notice (which may relate to the
exercise of specific remedies or to the exercise of remedies in general) from
the Requisite Parties or Special Requisite Parties, the Collateral Agent shall
not, without the written consent or direction of the Requisite Parties or
Special Requisite Parties, exercise remedies available to it under any Security
Documents or with respect to the Collateral or any part thereof.
(S)3.3. Status of Moneys Received.
------ -- ------ --------
All moneys received by the Collateral Agent pursuant to this Agreement
shall be held in trust for the purposes for which they were paid, and shall be
segregated from any other moneys held by the Collateral Agent, and may be
deposited by the Collateral Agent under such general conditions as may be
prescribed by law in the general banking department of the Collateral Agent, and
the Collateral Agent shall not be liable for any interest thereon except for
interest and other income obtained in accordance with this paragraph. The
Collateral Agent shall invest any funds held by it pursuant to this Agreement as
directed in writing by the Requisite Parties in any of the following: (i)
obligations issued or guaranteed by The United States of America or any agency
or instrumentality thereof; (ii) certificates of deposit of or interest bearing
accounts with national banks or corporations endowed with trust powers having
capital and surplus in excess of $100,000,000; (iii) commercial paper that at
the time of investment is rated A-1 by Standard & Poor's Ratings Group, a
division of McGraw-Hill, Inc., or Prime-1 by Moody's Investor's Service, Inc.;
(iv) repurchase agreements with any bank or corporation described in clause (ii)
fully secured by obligations described in clause (i); and (v) shares of a money
market fund investing only in short term U.S. Treasury obligations or
obligations backed by short-term U.S. Treasury obligations. The Collateral
Agent shall add any interest or other income from such investments to the
amounts to be distributed in accordance with (S)4.1(b) hereof.
All interest earned on such investments shall be considered the currently
reportable income of the Company for federal income tax purposes. The
Collateral Agent annually shall file information returns with the United States
Internal Revenue Service and payee statements with the Company, documenting such
interest payments. The Company shall provide the
<PAGE>
-19-
Collateral Agent all forms and information necessary to complete such
information returns and payee statements.
Should the Collateral Agent become liable for the payment of taxes
including withholding taxes, relating to income derived from any funds held by
its pursuant to this Agreement or any payment made hereunder, the Collateral
Agent may pay such taxes from such funds.
(S)4. CERTAIN INTERCREDITOR ARRANGEMENTS.
------- ------------- ------------
(S)4.1. General Rule: Pari Passu Rights Against Collateral.
------- ---- ---- ----- ------ ------- ----------
(a) General Rule. All amounts owing with respect to the Secured
------- ----
Obligations shall be secured by the Guaranties and the Collateral, without
distinction as to whether some Secured Obligations are then due and payable and
other Secured Obligations are not then due and payable, all in accordance with
the priorities established in this (S)4.
(b) Application of Collateral Proceeds Generally. If (i) the
----------- -- ---------- -------- ---------
Collateral Agent receives any cash amounts as payments under any Security
Documents or as proceeds of or otherwise constituting the Collateral (which
amounts, under the terms of any of the Security Documents, are to be applied to
any of the Secured Obligations), including (but subject to (S) 4.1(d) below) any
amounts received pursuant to (S)4.6 and (S)4.7, any proceeds received by the
Collateral Agent in connection with any Disposition of the assets of SBQ or any
of the other Collateral and, if applicable, any sum received by the Collateral
Agent pursuant to (S)507(b) of the Bankruptcy Code in any bankruptcy case in
which the Company or a Guarantor is a debtor, or (ii) the Company or any
Guarantor receives any Net Proceeds from a Disposition or Casualty Event with
respect to the Collateral or from an Equity Issuance, all such cash amounts
shall be applied (subject to (S)4.2 hereof):
(i) first, to the payment of any unpaid fees or other amounts
-----
owing to the Collateral Agent pursuant to (S)5.5, (S)5.6 or (S)5.7;
(ii) second, equally and ratably to reimburse the Secured
------
Parties for any amounts paid by the Secured Parties pursuant to (S)5.6;
(iii) third, equally and ratably to all outstanding accrued and
-----
unpaid interest on and principal of Priority Debt, provided that, except as
--------
provided in (S)4.1(g) hereof, none of the proceeds from any sale of the
assets of SBQ or any Equity Issuance shall be applied pursuant to this
clause (iii);
(iv) fourth, equally and ratably to all outstanding accrued and
------
unpaid interest and Make-Whole Amounts and outstanding Loan and
Reimbursement Principal Obligations, Reimbursement Agreement Debt,
Outstanding Bank LC Exposure, Outstanding IRB LC Exposure, and Note
Principal Obligations, constituting Bank Debt, Note Debt, or Reimbursement
Agreement Debt, and the Lease Payment Claims,
<PAGE>
-20-
according to the aggregate amounts thereof (other than the Lease Payment
Claims) on the date of such distribution and, in the case of Lease Payment
Claims, the Net Lease Sharing Amount as of the date of such distribution;
provided, however, that no such cash amounts arising from a Disposition
--------
of the assets of SBQ, or from or in connection with a release of Collateral
which is approved by the Requisite Parties (whether or not arising from a
Disposition thereof), shall be applied to the Lease Payment Claims pursuant
to this clause (iv) (or any other clause of this (S)4.1(b)) unless a Lease
Trigger Event has occurred and is continuing,
(v) fifth, equally and ratably, to all other Secured Obligations
-----
not covered by clauses (i) through (iv) of this (S) 4.1(b); and
(vi) sixth, after payment of all Secured Obligations, to the
-----
Company or to whomever else the Collateral Agent may be required to pay by
applicable law.
(c) Special Letter of Credit Provision. Except to the extent provided
-----------------------------------
otherwise in (S)4.1(d) hereof, any payment pursuant to clause (iv) of (S)4.1(b)
with respect to Outstanding Bank LC Exposure or Outstanding IRB LC Exposure (an
"Applicable Deposit") shall be paid to (or retained by) the Collateral Agent for
deposit in an account (the "Special Cash Collateral Account") to be held as
Collateral for the Secured Obligations and to be applied as provided in this
(S)4.1(c).
(i) Distributions of Cash Collateral. On each date after the
--------------------------------
creation of the Special Cash Collateral Account on which a reduction in
Total Undrawn Letter of Credit Exposure occurs by reason of either a
drawing under any letter of credit (including any IRB Letter of Credit) or
any other reduction, expiration or cancellation of any such letter of
credit, the Collateral Agent shall distribute from the Special Cash
Collateral Account an amount (a "Distribution Amount") equal to the product
of (1) the Paid Percentage immediately prior to such reduction in Total
Undrawn Letter of Credit Exposure (the "Pre-Reduction Percentage") and (2)
the amount of such reduction, provided, that any reduction of Outstanding
--------
IRB LC Exposure which will be automatically reinstated unless a notice is
timely given by the applicable LC Issuer that such reduction will not be
reinstated, shall not be deemed to be a reduction of Total Undrawn Letter
of Credit Exposure unless such notice of non-reinstatement is in fact
given. The Distribution Amount shall be distributed as follows: (A)
first, to pay any outstanding principal amount of whichever of the Loan and
Reimbursement Principal Obligations, Bank of America Reimbursement
Agreement Debt, and PNC Reimbursement Agreement Debt, if any, shall have
been increased by such reduction pro rata in proportion to the respective
--- ----
amounts thereof owed to each Bank and LC Issuer, to the extent, if any,
necessary so that the Paid Percentage of each of the Loan and Reimbursement
Principal Obligations, Bank of America Reimbursement Agreement Debt and PNC
Reimbursement Agreement Debt (not including Outstanding IRB LC Exposure)
immediately after giving effect both to any increase in the amount thereof
which may have occurred as a result of such reduction in the Total Undrawn
Letter of Credit Exposure and to such payment being made from the Special
Cash Collateral Account
<PAGE>
-21-
under this clause (A), is equal to the Pre-Reduction Percentage; and (B)
next, to the extent of any balance of the Distribution Amount, as provided
in clauses (iii), (iv), (v) and (vi) of (S)4.1(b). Subject to the
provisions of (S)4.1(d) hereof, at such times as the Outstanding Bank LC
Exposure and Outstanding IRB LC Exposure are reduced to zero, any amount
remaining in the Special Cash Collateral Account, after the payment of all
prior Distribution Amounts, shall be distributed as provided in clauses
(iii), (iv), (v) and (vi) of (S)4.1(b).
(ii) Definition of Paid Percentage. The "Paid Percentage" means,
-----------------------------
at the relevant time of reference thereto with respect to any Distribution
Amount, the fraction (expressed as a percentage) the numerator of which is
(x) the sum of all payments with respect to Principal Obligations made
pursuant to (S)4.1 prior to or at such time and the denominator of which is
(y) the aggregate amount of Principal Obligations outstanding, immediately
before the Applicable Deposit from which such Distribution Amount was
funded. In the event that, at the relevant time of reference thereto, no
payments with respect to Principal Obligations shall have been made
pursuant to (S)4.1, the Paid Percentage shall be zero.
(d) Special Provisions Regarding Proceeds from Sale of SBQ.
------------------------------------------------------
Notwithstanding the provisions of (S)4.1(b), under the circumstances set forth
in this (S)4.1(d), the distribution to the Note Holders, the Banks, and the LC
Issuers of the proceeds from any sale of the assets of SBQ shall be made in
accordance with the provisions of this (S)4.1(d), it being understood that
nothing in this (S)4.1(d) shall alter the amount of such proceeds otherwise
required to be distributed under (S)4.1(b) in respect of the Lease Payment
Claims in the event that a Lease Trigger Event has occurred and is continuing.
If (i) there is a sale of all or a substantial portion of the assets of SBQ, and
(ii) prior to, contemporaneous with, or as a condition of such sale, the IRB
Letters of Credit (or either of them) expire undrawn, are terminated, are
cancelled (any of the foregoing being a "Terminated IRB LC"), or the LC Issuers
receive any letter of credit, indemnity or other comfort (collectively
"Indemnity") that the IRB Letters of Credit (or any portion of them or either of
them) will not be drawn or that, if drawn, the LC Issuers will be reimbursed or
indemnified for all or a portion of the amount drawn by a Person or Persons
other than the Company and the Guarantors (or from assets other than those of
the Company and the Guarantors), regardless of whether such Indemnity is
absolute or is contingent or conditional (the issuer of a Terminated IRB LC or
recipient of an Indemnity being an "Applicable LC Issuer"), then
(w) for purposes of determining the amount payable to the Note
Holders, the net proceeds from any sale of the assets of SBQ
shall be deemed to have been greater than the actual net proceeds
from any sale of the assets of SBQ by an amount equal to the sum,
if any, of (A) with respect to Terminated IRB LCs, the aggregate
undrawn face amount of the IRB Letters of Credit immediately
prior to the expiration, termination or cancellation thereof, and
(B) with respect to IRB Letters of Credit as to which Indemnity
was obtained, the amount of such Indemnity (collectively, the sum
of (A) and (B) being the "Applicable Amount"),
<PAGE>
-22-
(x) the Note Holders will receive the same amount from the net
proceeds from the sale of the assets of SBQ as the Note Holders
would have received pursuant to (S)4.1(b) had such net proceeds
been increased by such Applicable Amount,
(y) after the Note Holders have received the amount payable to them
pursuant to (S)4.1(b) (after giving effect to this (S)4.1(d)),
the amounts payable pursuant to (S)4.1(b) to the Banks that are
not (and whose direct and indirect assignors were not) the
Applicable LC Issuers (the "Other Banks") shall be the amount
that the Other Banks would have received if the net proceeds from
the sale of the assets of SBQ had been increased by the
Applicable Amount, and
(z) after the Note Holders and the Other Banks have received the
amounts payable to them pursuant to (S)4.1(b) (after giving
effect to this (S)4.1(d)), the Banks that are (or whose direct or
indirect assignors were) the Applicable LC Issuers shall receive
on account of the Bank Debt the remaining net proceeds, if any,
allocable to the Banks that are the LC Issuers from the sale of
the assets of SBQ, provided that,
--------
(1) if the net proceeds from the sale of the assets of SBQ are not
sufficient for the Note Holders to receive the amount that they are entitled to
receive pursuant to (S)4.1(b) (after giving effect to this (S)4.1(d), then (A)
the Note Holders shall receive all of the proceeds from the sale of the assets
of SBQ covered by this (S)4.1(d), (B) the Applicable LC Issuers shall make such
arrangements with the Banks that are not the Applicable LC Issuers (which
arrangements shall be without cost to or effect on the Secured Parties other
than the Banks and the Applicable LC Issuers) so as to cause the Banks that are
not the Applicable LC Issuers to have received (at or about the same time that
the Note Holders are paid pursuant to clause (A) of this paragraph) the same
percentage of the amount that would have been payable to the Banks that are not
the Applicable LC Issuers pursuant to clause (y) (if there had been sufficient
proceeds to pay such amounts), as the percentage that the amount that the Note
Holders receive pursuant to clause (A) of this paragraph constitutes with
respect to the amount that the Note Holders would have received pursuant to
clause (x) had there been sufficient proceeds to pay such amounts, and (C) all
amounts that thereafter become payable pursuant to (S)4.1(b) with respect to the
Bank Debt to the Banks that are (or whose direct or indirect assignors were) the
Applicable LC Issuers shall be paid instead equally and ratably to the Note
Holders and the Banks that are not the Applicable LC Issuers (and allocated
among each of them equally and ratably) until the Note Holders and Banks that
are not Applicable LC Issuers have received, in addition to all other amounts
payable to them hereunder, the amounts that would have been paid to them
pursuant to this (S)4.1(d) but for the Net Proceeds from the sale of the assets
of SBQ being insufficient to pay such amounts to them, provided that,
--------
notwithstanding the foregoing, the provisions of this (S) 4.1(d) shall not be
applied to pay to the Note Holders or Banks that are not Applicable LC Issuers
amounts that are payable to the Applicable LC Issuers pursuant to clause (iii)
of (S) 4.1(b) after the following events have occurred: (1) the holders of 51%
of the Bank Debt give notice to the Collateral Agent that an Actionable Default
has occurred, and (2) the Banks declare all of the Bank Debt to be due and
payable on account of such Actionable Default.
<PAGE>
-23-
(e) Special Equipment Lease Provisions. Any payment pursuant to
----------------------------------
clause (iv) of (S)4.1(b) which is to be applied to Lease Payment Claims prior to
the termination of the Equipment Lease shall be paid to (or retained by) the
Collateral Agent for deposit in an account (the "Section 4.1(e) Cash Collateral
Account") to be held as Collateral for the sole and exclusive benefit of the
Lease Payment Claims (subject to and to the extent set forth in this (S)4.1(e))
and to be applied as provided in this (S)4.1(e). Any payment pursuant to clause
(iv) of (S)4.1(b) which is to be applied to Lease Payment Claims on or after
termination of the Equipment Lease shall be paid by the Collateral Agent to the
Indenture Trustee (for distribution by the Indenture Trustee in the order of
priority set forth in Section 3.03(a) of the Indenture for so long as the Lien
of the Indenture remains outstanding, and thereafter to the Owner Trustee).
(i) Distribution of Section 4.1(e) Cash Collateral After
----------------------------------------------------
Termination of Equipment Lease. If, on any date on or after creation of the
- ------------------------------
Section 4.1(e) Cash Collateral Account, the Equipment Lease is terminated, the
Collateral Agent shall distribute to the Indenture Trustee (for distribution by
the Indenture Trustee in the order of priority set forth in Section 3.03(a) of
the Indenture, for so long as the Lien of the Indenture remains outstanding, and
thereafter to the Owner Trustee), from the Section 4.1(e) Cash Collateral
Account an amount (a "Section 4.1(e) Distribution Amount") equal to the lesser
of (x) the Lease Sharing Amount as of such date, and (y) the amount in the
Section 4.1(e) Cash Collateral Account. Any amount remaining in the Section
4.1(e) Cash Collateral Account after such distribution to the Indenture Trustee
or the Owner Trustee, as the case may be, shall be applied in accordance with
(S)4.1(b) hereof.
(ii) Other Distributions of Section 4.1(e) Cash Collateral.
-----------------------------------------------------
If the Equipment Lease expires at the end of its term (and is not terminated
prior to such expiration) and all Lease Payment Claims have been paid in full,
then the amount in the Section 4.1(e) Cash Collateral Account shall be applied
in accordance with (S)4.1(b) hereof.
(f) Reallocation of Subsequent Distributions. Notwithstanding the
-----------------------------------------
foregoing, if (i) any deposit(s) shall be made into the Section 4.1(e) Cash
Collateral Account on any date(s) in respect of the Lease Payment Claims
pursuant to this (S)4.1 and (ii) the Equipment Lease shall be terminated on a
subsequent date and the Net Lease Sharing Amount thereupon shall become an
amount smaller or larger than 33 1/3% of the Stipulated Loss Value as of such
earlier date(s), a "true-up" shall be effected with respect to the next
distribution(s) of Collateral proceeds and other amounts pursuant to (S) 4.1
hereof so that the Lease Payment Claims shall receive pursuant to this (S) 4.1 a
cumulative amount of Collateral proceeds and other amounts pursuant to (S) 4.1
hereof equal to what the Indenture Trustee or Owner Trustee, as the case may be,
would have received pursuant to this (S) 4.1 had the revised Net Lease Sharing
Amount been in effect on and after the first occurrence of a Lease Trigger
Event.
(g) Special Provision Regarding Allocation of SBQ and Equity Issuance
-----------------------------------------------------------------
Proceeds After the Occurrence of an Event of Default. If the holders of 51% of
- ----------------------------------------------------
the Bank Debt give notice to the Collateral Agent before a distribution by the
Collateral Agent pursuant to (S)4.1(b)(iii) hereof that an Event of Default has
occurred under the Credit Agreement, and if such notice certifies that there is
at the time of such distribution any outstanding accrued and unpaid interest on
or principal of Priority Debt, and if such distribution includes proceeds from
the sale
<PAGE>
-24-
of the assets of SBQ or any Equity Issuance (the "SBQ or Equity Issuance
Proceeds"), then the amount of such distribution that is allocable to the SBQ or
Equity Issuance Proceeds shall be paid to (or retained by) the Collateral Agent
to the extent of the amount of such outstanding accrued and unpaid interest on
or principal of Priority Debt, for deposit in an account to be held as
Collateral for the Secured Obligations (the "Section 4.1(g) Account"), and to be
applied as provided in this (S)4.1(g).
(i) Distributions on Account of Priority Debt. If the Banks
-----------------------------------------
declare all of the Bank Debt to be due and payable on account of such
Event of Default within thirty (30) days after the date that such
notice is given to the Collateral Agent pursuant to this (S)4.1(g)
that an Event of Default has occurred, and if during such thirty (30)
day period after such notice is given such declaration is not
rescinded or waived and no loans are made and no credit is extended by
the Banks to the Company or the Guarantors, then the distribution that
is to be made by the Collateral Agent on account of the SBQ or Equity
Issuance Proceeds shall be applied to the Priority Debt, to the extent
of the amount thereof, before being applied pursuant to (S)4.1(b)(iv).
(ii) Distributions on Account of Other Secured Obligations.
-----------------------------------------------------
Any amounts in the Section 4.1(g) Account that are not distributable
to the Banks on account of Priority Debt pursuant to clause (i) of
this (S)4.1(g) shall be applied by the Collateral Agent in accordance
with clauses (iv), (v) and (vi) of (S)4.1(b) hereof.
(h) Special Provision Regarding Cash Reserves Relating for Sold
-----------------------------------------------------------
Assets. Any amount of cash reserves referred to in clause (vi) of the
definition of Net Proceeds shall be deposited by the Collateral Agent in an
account (the "Section 4.1(h) Cash Reserves Account") to be held as Collateral
for the Secured Obligations and to be applied as provided in this (S)4.1(h).
(i) If, prior to the Collateral Agent receiving notice from
any Bank, Note Holder, LC Issuer or the Requisite Parties that an
Actionable Default has occurred, the Company certifies to the
Collateral Agent in writing that an amount specified in such
certification is payable to the buyer of assets (the sale of which
gave rise to the requirement that cash reserves be maintained) to
satisfy liabilities owed to such buyer under the purchase agreement
relating to such assets, then the Collateral Agent shall pay to the
Company the amount specified in such certification (but not more than
the amount maintained in the Section 4.1(h) Cash Reserves Account on
account of the applicable sale).
(ii) If the Collateral Agent receives notice from any Bank,
Note Holder, LC Issuer or the Requisite Parties that an Actionable
Default has occurred, then the Collateral Agent shall not pay or
distribute any funds from the Section 4.1(h) Cash Reserves Account
except in accordance with the written instructions of the Requisite
Parties, provided that such instructions may only instruct the
--------
Collateral Agent to pay the funds (or a portion thereof) in the
Section 4.1(h) Cash Reserves Account to the Company (or the applicable
seller) or to the Secured Parties in accordance with this (S) 4.1.
<PAGE>
-25-
(i) On each occasion that the Collateral Agent makes any payment or
distribution to a Secured Party pursuant to this (S) 4.1, the Collateral Agent
shall give notice to the Company setting forth the amount paid or distributed to
each Secured Party.
(S)4.2. Non-Cash Distributions or Proceeds. If the Collateral Agent
-------- ------------- -- --------
receives any non-cash distributions or proceeds in respect of the Guaranties or
the Collateral, then, unless the Requisite Parties instruct the Collateral Agent
to the contrary, the Collateral Agent shall hold such non-cash distributions and
proceeds as Collateral upon the terms of this Agreement and the Security
Documents until converted to cash and thereupon applied or disbursed in
accordance with this (S)4; provided, however, that, if any non-cash distribution
-------- -------
is received by the Collateral Agent and is to be applied in satisfaction of any
Secured Obligation by operation of a plan of reorganization under Chapter 11 of
the United States Bankruptcy Code or otherwise as required by applicable law,
the Requisite Parties may, instead of awaiting the conversion of such non-cash
distribution to cash, direct the Collateral Agent to distribute such non-cash
distribution as provided in (S)4.1(b), except in respect of a distribution under
(S)4.1(b)(i).
(S)4.3. Additional Collateral. If any of the Banks, the Agent Bank,
---------- ----------
the LC Issuers or the Note Holders receives any mortgage, pledge, security
interest in or other lien or encumbrance on any assets of the Company, any
Guarantor or any other of the Company's Subsidiaries, then any such mortgage,
pledge, security interest or other lien or encumbrance shall secure the Secured
Obligations, and be assigned to the Collateral Agent for the benefit of the
Secured Parties.
(S)4.4. Notice of Demand; Acceleration.
------ -- ------ ------------
(a) Each of the Banks, the Agent Bank, the LC Issuers, the Note
Holders, the Owner Trustee and the Indenture Trustee hereby agrees to give
written notice to the Collateral Agent of any demand for payment in full of the
Secured Obligations owing to the demanding party, whether by acceleration of
such obligations or otherwise (a "Demand Notice").
(b) Neither the Agent Bank, any Bank, any LC Issuer, any Note Holder,
the Owner Trustee nor the Indenture Trustee shall incur liability of any kind
should it, upon the occurrence of any Actionable Default, refrain from
accelerating the maturity or otherwise demanding payment in full of any Secured
Obligations owing to it, or should it refrain from exercising any of its rights
and remedies against the Company, any Guarantor or any other obligor in respect
of the Secured Obligations.
(S)4.5. Enforcement.
-----------
(a) The Collateral Agent shall (subject to the provisions of (S)3.2
and (S)5) take any such actions in the exercise of rights and remedies under the
Security Documents as are directed in an Enforcement Notice given by the
Requisite Parties or Special Requisite Parties, as the case may be, at any time
more than three (3) business days after a Notice of Actionable Default has been
given to a Responsible Officer of the Collateral Agent with respect to the Event
of Default that is the basis (or one of the bases) of the Enforcement Notice.
The Requisite
<PAGE>
-26-
Parties or Special Requisite Parties, as the case may be, giving a Notice of
Actionable Default or Enforcement Notice to the Collateral Agent shall
contemporaneously give a copy thereof to the other Secured Parties.
(b) Each of the Agent Bank, each Bank, each LC Issuer, each Note
Holder, the Indenture Trustee and the Owner Trustee agrees that it will
promptly, and in any event within five (5) business days after the request by
one of the others (which request may be made telephonically), advise the
requesting party (telephonically, confirmed in writing) as to the outstanding
principal amount of the Loan and Reimbursement Principal Obligations,
Outstanding Bank LC Exposure, Outstanding IRB LC Exposure, Letter of Credit
Collateral Obligations, Reimbursement Agreement Debt, or Note Principal
Obligations owed to it (or, in the case of the Agent Bank, owed to the Banks) or
(in the case of the Owner Trustee or Indenture Trustee) as to the Lease Sharing
Amount. Any party may rely on such information (or other means available to it)
to determine whether the Requisite Parties have acted with respect to any action
or proposed action.
(c) No Enforcement Notice, when issued, may be rescinded or withdrawn
without the written consent of the Requisite Parties or Special Requisite
Parties, whichever shall have given such Enforcement Notice.
(S)4.6. Turnover of Collateral and Post-Default Cash Sweep. If any
-------- -- --------------------------------------
Secured Party (other than the Owner Trustee or Indenture Trustee) acquires
custody, control or possession of any payment or assets constituting a Post-
Default Cash Sweep Payment or any Collateral (including proceeds therefrom),
other than pursuant to the terms of (S)4.1 or (S)4.2 hereof, such Secured Party
shall, promptly with respect to Collateral (including proceeds thereof), and
within fifteen (15) days after their receipt thereof with respect to Post-
Default Cash Sweep Payments, cause such payment or assets to be delivered to or
put in the custody, possession or control of the Collateral Agent or, if the
Collateral Agent shall so designate, an agent of the Collateral Agent (which
agent may be a branch or affiliate of the Collateral Agent) in the same form of
payment received, with appropriate endorsements, for distribution in accordance
with the provisions of (S)4.1 or (S)4.2, as applicable. The Collateral Agent
shall notify each of the Secured Parties within two (2) business days after the
Collateral Agent receives any notice (a) from any Bank, Note Holder or LC Issuer
of the occurrence of an Event of Default, or (b) from the Requisite Parties that
payments referred to in the definition of Post-Default Cash Sweep Payments will
not constitute Post-Default Cash Sweep payments on account of such Event of
Default. If any cash is received by any of the Banks with respect to Letter of
Credit Collateral Obligations other than pursuant to (S)4.1 hereof, and such
cash has not been applied to reduce Loan and Reimbursement Principal Obligations
resulting from a drawing upon a letter of credit relating to such Letter of
Credit Collateral Obligations prior to the time that an Enforcement Notice is
given, such cash shall, at the time that such Enforcement Notice is given, be
delivered to the Collateral Agent and applied as provided in (S)4.1. Until such
time as the provisions of the immediately preceding sentences have been complied
with, such Secured Party shall be deemed to hold such Collateral in trust for
the Collateral Agent. Notwithstanding the foregoing, neither the Agent Bank,
the Banks, the LC Issuers nor the Note Holders shall be required to deliver to
the Collateral Agent or such agent of the Collateral Agent, any amounts received
by the Agent Bank, the Banks, the LC Issuers, or the Note Holders prior to
receipt by
<PAGE>
-27-
such Secured Party of a Notice of Actionable Default to the extent that such
amounts constitute (a) payments of principal (other than Post-Default Cash Sweep
Payments) on the Bank Debt, the Reimbursement Agreement Debt or the Notes
required to be made pursuant to the Credit Documents and due and paid prior to
such date, or (b) regular payments of interest, fees and other charges on or in
respect of the Bank Debt, the Reimbursement Agreement Debt or the Notes due and
paid prior to such date.
(S)4.7. Setoffs. Each of the Secured Parties agrees with each other
-------
Secured Party that (a) if any Secured Party (other than the Owner Trustee or
Indenture Trustee) exercises any right of setoff, banker's lien or similar right
with respect to any Collateral or any assets of the Company or any Guarantor
(other than a setoff by a Bank prior to any Notice of Actionable Default (x) to
repay an involuntary overdraft arising in the ordinary cause of banking business
of cash management, payroll and similar deposit accounts maintained by the
Company or any Guarantor with any of the Banks, or (y) to pay regular account
maintenance fees), the amount set off shall be applied ratably to the Secured
Obligations in accordance with (S)4.1 or (S)4.2, as the case may be, (b) if such
Secured Party (other than the Owner Trustee or Indenture Trustee) shall receive
from the Company or any Guarantor, (i) whether by voluntary payment, exercise of
the right of setoff, counterclaim, cross-action, enforcement of the claim in
respect of the Secured Obligations owing to such Secured Party by proceedings
against the Company at law or in equity or by proof thereof in bankruptcy,
reorganization, liquidation, receivership or similar proceedings, or otherwise,
for application to the payment of the Secured Obligations owing to such Secured
Party any amount in excess of its ratable portion of the payments received by
the other Secured Parties as contemplated by (S)4.1 or (S)4.2, as the case may
be, or (ii) any of the Banks shall receive any Post-Default Cash Sweep Payment,
such Bank or other Secured Party will make such disposition and arrangements
with the other Secured Parties with respect to such excess, either by way of
distribution, pro tanto assignment of claims, subrogation or otherwise as shall
--- -----
result in each Secured Party receiving in respect of the Secured Obligations
owing to it its proportionate payment as contemplated by (S)4.1 or (S)4.2, as
the case may be; provided that if all or any part of such excess payment is
--------
thereafter recovered from such Secured Party, such disposition and arrangements
shall be rescinded and the amount restored to the extent of such recovery, but
without interest.
(S)4.8. Waivers and Amendments of Credit Documents.
------- --- ---------- -- ------ ---------
(a) Without the prior written consent of the Agent Bank, the holders
of 51% of the Note Debt, the holders of 51% of the PNC Reimbursement Agreement
Debt, and the holders of 51% of the Bank of America Reimbursement Agreement
Debt, the parties hereto (other than the Owner Trustee and the Indenture
Trustee) shall not modify or amend any provisions of or give any waiver with
respect to the Credit Documents to which such party hereto is a signatory, if
the effect of such modification or amendment or waiver is (i) to cause the
maximum principal amount or maximum commitment of or in respect of the Bank Debt
to exceed the Maximum Bank Commitment, or (ii) to increase the principal amount
of the Note Debt or Reimbursement Agreement Debt then outstanding, or (iii) to
increase the stated rate of interest or any fees or other amounts due under any
of the Credit Documents to which such party hereto is a signatory as outstanding
on the date hereof, or (iv) to amend or modify any term defined therein which is
incorporated by reference into this Agreement, or is specifically referred to in
this Agreement in
<PAGE>
-28-
such a way as to alter its meaning in this Agreement. Without the prior written
consent of the Requisite Parties, the parties hereto (other than the Owner
Trustee and the Indenture Trustee) shall not modify or amend any provisions of
or give any waiver with respect to the Credit Documents to which such party is a
signatory, if the effect of such modification or amendment or waiver is to
provide for loans to be made or letters of credit to be issued (other than by
extension or renewal) after the issuance of an Enforcement Notice. Except as
otherwise specified in the two preceding sentences, the Agent Bank and the
Banks, the Note Holders and the LC Issuers, without the consent of the other
parties, shall be free to deal with the Company and the Guarantors in their
respective sole discretion under and in respect of the provisions of the Credit
Documents to which they are party, with the right and power without limitation
to modify, amend or waive any terms or provisions of such Credit Documents, to
grant extensions of the time of payment or performance, and to make compromises
and settlements with the Company or any Guarantor.
(b) The Agent Bank and the Banks agree that they will not modify or
amend any covenants, defaults or payment provisions which are based on the
financial condition or results of operations of the Company and/or its
Subsidiaries contained in the Bank Credit Documents without giving at least five
(5) business days' prior written notice thereof to the Note Holders, and the LC
Issuers; the Note Holders agree that they will not modify or amend any
covenants, defaults or payment provisions which are based on the financial
condition or results of operations of the Company and/or its Subsidiaries in the
Note Credit Documents without giving at least five (5) business days' prior
written notice thereof to the Agent Bank, and the LC Issuers; the Owner Trustee
and the Indenture Trustee agree that they will not modify or amend any
covenants, defaults or payment provisions which are based on the financial
condition or results of operations of the Company and/or its Subsidiaries in the
Equipment Lease without giving at least five (5) business days' prior written
notice thereof to the Agent Bank, the Note Holders and the LC Issuers; and each
LC Issuer agrees that it will not modify or amend any covenants, defaults or
payment provisions which are based on the financial condition or results of
operations of the Company and/or its Subsidiaries contained in the Reimbursement
Agreement to which it is a party without giving at least five (5) business days'
prior written notice thereof to the Agent Bank and the Note Holders.
<PAGE>
-29-
(S)4.9. Release or Subordination of Collateral.
------- -- ------------- -- ----------
(a) Collateral consisting of (i) Net Proceeds of any Disposition
which, together with the aggregate Net Proceeds of all other Dispositions of
Collateral within the preceding twelve (12) months, do not exceed $1,000,000,
and the proceeds of any other Disposition with the consent of the Requisite
Parties, and (ii) the Net Proceeds of any Casualty Event which, taken together
with the aggregate Net Proceeds of all other Casualty Events with respect to
Collateral within the preceding twelve (12) months, do not exceed $5,000,000,
shall, unless, in either case, a party hereto has notified the Collateral Agent
that a Default or an Event of Default has occurred and is continuing or would
occur after giving effect thereto, be released to the Company or Guarantor that
owned the Collateral, as the case may be, subject to the provisions of the next
sentence. The Collateral Agent is hereby authorized to release such Collateral
and to provide such discharge, release and termination statements with respect
to such Released Collateral upon receipt of a certificate of the chief financial
officer or any vice president of the Company to the effect that no Default or
Event of Default exists or would result therefrom and that such release is
permitted under this (S)4.9(a), and that, with respect to Net Proceeds of
Casualty Events, the Company intends to use such Net Proceeds to repair or
replace the Collateral that was the subject of the Casualty Event.
(b) The Collateral Agent shall, if requested by the Company or any
Guarantor, release any Collateral that is the subject of a Disposition but which
is not released pursuant to (S)4.9(a), and provide such releases and termination
statements as may be reasonably requested by the Company or any such Guarantor
with respect thereto in connection with any Disposition thereof, so long as (i)
the Requisite Parties have consented to such request, (ii) the Collateral Agent
receives a certificate of the chief financial officer or any vice president of
the Company to the effect that (A) no Default or Event of Default exists or
would result from the honoring of such request, (B) the transferee of the
Collateral is not an Affiliate of the Company, and (C) the proceeds of such
Disposition equal or exceed the fair market value of the Collateral subject to
such Disposition, (iii) the Collateral Agent obtains a perfected security
interest in any non-cash proceeds of such Disposition, (iv) except as otherwise
provided herein, the Net Proceeds of such Disposition are delivered to the
Collateral Agent, and (v) any cash portion of the Net Proceeds of such
Disposition are applied or paid in accordance with this Agreement; provided,
--------
that, with respect to a Disposition of the assets of SBQ, no consent of the
Requisite Parties shall be required under clause (i) of this paragraph and the
provisions of clause (ii)(C) of this paragraph shall not be applicable if: (1)
an executive officer of the Company certifies that the Company has consulted
with and received advice from Credit Suisse First Boston in connection with such
Disposition and has received a letter from Credit Suisse First Boston stating
that in its view the consideration to be received by the Company in connection
with such Disposition is fair from a financial point of view under the
circumstances; (2) the cash portion of the sales price is not less than 75% of
the total sales price; and (3) the cash portion of the Net Proceeds of such sale
are applied to the Secured Obligations in accordance with the terms of this
Agreement, and further provided that (x) if the certificate provided pursuant to
----------------
clause (ii) of this paragraph (b) further certifies that the Company intends to
purchase, within thirty (30) days after the date of such certificate, assets of
the same type of assets that were the subject of the Disposition (e.g. the
purchase of equipment after the sale of equipment) which are usable in the
ordinary course of the Company's business ("Qualifying Assets"), (y) subject to
the provisions of clause (z) below, the
<PAGE>
-30-
Collateral Agent shall retain, rather than distributing, the proceeds from such
Disposition (except that this clause (y) and clause (z) below in this paragraph
(b) shall not apply to any Disposition of SBQ or any Disposition that would
cause the proceeds received by the Collateral Agent from Dispositions during any
consecutive twelve (12) month period to exceed $10,000,000), and (z) if the
Collateral Agent receives a certificate of the chief financial officer or any
vice president of the Company on or within thirty (30) days after the date of
such disposition, to the effect that (1) the Company has purchased Qualifying
Assets on or within thirty (30) days after the date of the applicable
Disposition, (2) the cash portion of the purchase price of such Qualifying
Assets was as set forth in such certificate, (3) such Qualifying Assets were
purchased from a Person that is not an Affiliate of the Company, (4) the
purchase price for such Qualifying Assets did not exceed their fair market
value, and (5) no Default or Event of Default exists or would result from the
purchase of the Qualifying Assets, the Collateral Agent shall pay to the Company
the lesser of the purchase price for the Qualifying Assets and the amount
received by the Collateral Agent from the applicable Disposition. Any amounts
not paid to the Company pursuant to the preceding sentence shall be distributed
in accordance with (S) 4.1 hereof.
(c) The Net Proceeds from any Casualty Event with respect to
Collateral shall (i) be paid to (or retained by) the Collateral Agent for
distribution in accordance with (S)4.1 hereof, if such Net Proceeds from any
such Casualty Event equal or exceed $25,000,000, and (ii) except as provided in
(S)4.9(a) and except as set forth below in this paragraph (c), be paid to (or
retained by) the Collateral Agent for distribution in accordance with (S)4.1
hereof, if such Net Proceeds from any such Casualty Event are less than
$25,000,000. The Company may utilize the Net Proceeds from a Casualty Event
with respect to Collateral if such Net Proceeds are less than $25,000,000 (1)
with the written consent of the Requisite Parties, on such terms and conditions
as may be established by the Requisite Parties with respect thereto, or (2)
without such written consent of the Requisite Parties, on the following
conditions and in the following manner: (A) the Company shall provide to the
Collateral Agent, within thirty (30) days after the date that the amount of the
Net Proceeds is determined, a certificate of the chief financial officer or any
vice president of the Company to the effect that (x) no Default or Event of
Default exists (or would exist if the Net Proceeds from Casualty Event were used
to repair or replace the Collateral that was the subject of the Casualty Event),
(y) the Company intends to repair or replace the Collateral that was the subject
of the Casualty Event, and (z) the Company has sufficient cash on hand or
available in order to fund such repair or replacement, if such Net Proceeds are
made available to the Company, (B) to the extent that the Company desires
funding or reimbursement therefor from the Net Proceeds applicable thereto, the
Company shall submit to the Collateral Agent (or to such agent as may be
retained by the Collateral Agent to carry out the responsibilities of the
Collateral Agent pursuant to this sentence) such invoices as the Company
receives from time to time for goods or services purchased or obtained in
connection with such repair or replacement, together with a written request that
such invoice be paid from such applicable Net Proceeds (or that the Company be
reimbursed from such applicable Net Proceeds for its payment of such invoice),
(C) no Event of Default shall have occurred prior to the requested payment from
time to time of an invoice pursuant to this paragraph (c), and (D) the Company
shall provide such evidence as the Requisite Parties or any agent retained by
the Collateral Agent in accordance with clause (B) above may require in order to
evidence that the remaining Net Proceeds are sufficient to fund the balance of
cost of the repair or replacement of the Collateral that was the subject of the
Casualty Event. The Company shall pay to the
<PAGE>
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Collateral Agent, as and when billed therefor, all fees and reasonable expenses
incurred by the Collateral Agent or any such agent in connection with the
matters set forth in this paragraph.
(d) To the extent that the Credit Documents (other than the Lease
Documents) of any party explicitly permit any Disposition without consent under
such Credit Document but in respect to which such party's consent is required
pursuant to this (S)4.9, such party agrees to provide that consent. But nothing
in this (S)4.9 shall (i) be deemed to imply any waiver of any restriction on
Dispositions under the Credit Agreement, either of the Note Purchase Agreements
or any other Credit Document, or (ii) without the prior written consent of the
Requisite Parties, authorize the Collateral Agent in any bankruptcy case to
enter into any agreement for, or give any authorization or consent with respect
to, the post-petition usage of Collateral.
(e) In the event all of the security interests created by the Security
Documents in favor of the Secured Parties other than the Owner Trustee and
Indenture Trustee are terminated pursuant to Section 11.5(a)(i), (ii) and (iii)
hereof, the security interest created by the Security Documents in favor of the
Owner Trustee and Indenture Trustee shall also be released and thereupon the
Lease Claims shall no longer constitute Secured Obligations hereunder; provided
--------
that concurrently with such release, the Company shall secure the Lease Claims
with a perfected first priority security interest in separate collateral in
amount and in form reasonably satisfactory to the Indenture Trustee and the
Owner Trustee.
(f) Whether or not so instructed by the Requisite Parties, the
Collateral Agent may release any Collateral and may provide any release,
termination statement or instrument of subordination required by order of a
court of competent jurisdiction or otherwise required by applicable law.
(S)4.10. Replacement Credit Facilities.
-----------------------------
(a) The Company shall be free, without the consent of the Note
Holders, the LC Issuers, the Owner Trustee or the Indenture Trustee, to enter
into a Replacement Credit Agreement (as defined below) provided that (i) upon
--------
giving effect to such Replacement Credit Agreement all outstanding Secured
Obligations owed to the Banks shall have been discharged and the Credit
Agreement shall have been terminated, (ii) each lender under such Replacement
Credit Agreement shall assume in writing all obligations of the Banks hereunder
accruing on or after the date such lenders become parties hereto, as amended as
provided in clause (iv) hereof, (iii) after giving effect to such Replacement
Credit Agreement, no Default or Event of Default shall then be in existence, and
(iv) such technical amendments to the Note Credit Documents, the Lease Documents
and this Agreement, reasonably requested by the Note Holders, the LC Issuers,
the Owner Trustee or the Indenture Trustee, as the case may be, as necessary for
any terms in the Note Credit Documents, the Lease Documents or this Agreement
cross referencing the Credit Agreement to cross reference instead such
Replacement Credit Agreement, shall have been made. A "Replacement Credit
Agreement" shall mean a credit facility from one or more commercial banks or
other financial institutions providing the Company with loans, letters of
<PAGE>
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credit or other advances or extensions of credit (A) without any lien or other
priority over the other Secured Obligations, (B) not in excess of the
Commitments (as defined in the Credit Agreement) under the Credit Agreement
immediately prior to such refinancing and pursuant to which the loan
availability and loan commitments to the Company from such refinancing shall not
be less than that available and in effect immediately prior to such refinancing,
(C) for a committed term of at least 36 months, (D) the financial covenants of
such refinancing or extension shall not be more stringent than the financial
covenants contained in the amended Note Purchase Agreements as reasonably
determined by the holders of 51% of the Note Debt; and (E) such refinancing
would be permitted under the then applicable debt incurrence tests of the Note
Purchase Agreements.
(b) The term of the existing Credit Agreement may be extended (i)
without the consent of the Note Holders if such extension provides for no
Priority Debt, or (ii) in all other cases with, but only with, the consent of
the holders of 66 2/3% of the Note Debt. To the extent that the term of the
Credit Agreement is extended with such consent, or any other provisions thereof
are amended or modified by the parties thereto, the Credit Agreement shall not
be considered a Replacement Credit Agreement for purposes of (S)4.10(a).
(S)4.11. Independent Investigation; Sharing of Financial Information.
----------- ------------- ------- -- --------- -----------
Each of the Banks, the Agent Bank, the LC Issuers, and the Note Holders
acknowledges and agrees that it has entered into the Credit Documents to which
it is party and (as applicable) extended funds and/or credit or provided
services to the Company on the basis of its own independent investigation of the
Company, its Subsidiaries and affiliated companies, and their business,
operations and financial condition, that it shall continue to make such
investigations in connection with the credit and/or loans extended to the
Company as it deems appropriate and that it has not conducted any such
investigations in reliance upon information, analysis and recommendations which
it may have obtained from any other Secured Party. Without derogation in any
way of the preceding sentence, the Company acknowledges and consents to any
exchange of information by and among the Banks, the Agent Bank, the LC Issuers,
the Note Holders, the Owner Trustee and the Indenture Trustee, without regard to
whether the impact of any such exchange is favorable or unfavorable to the
Company and without regard to the accuracy or completeness of any information so
exchanged.
(S)4.12. Agents. Except as specifically provided in this Agreement,
------
and except for the role of the Collateral Agent as specified in this Agreement,
neither the Agent Bank nor any of the Banks is acting as agent for any Note
Holder, LC Issuer or the Owner Trustee or Indenture Trustee; no Note Holder is
acting as agent for the Agent Bank or any Bank or LC Issuer or the Owner Trustee
or Indenture Trustee; no LC Issuer is acting as agent for the Agent Bank, the
Banks, any Note Holder, or the Owner Trustee or Indenture Trustee; neither the
Owner Trustee nor the Indenture Trustee is acting as agent for the Agent Bank,
the Banks, the Note Holders or the LC Issuers; and nothing stated or implied in
this Agreement shall be deemed to create such an agency, or other fiduciary
relationship.
(S)4.13. Effect of Avoidance. If an Avoidance Event occurs, (a) the
-------------------
provisions of (S)2 hereof and this (S)4 with respect to the Collateral and
distribution of the proceeds thereof shall cease to be effective with respect to
the Collateral as to which the Lien of the Collateral Agent is
<PAGE>
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avoided and the proceeds thereof, (b) (S)4.1(d) shall cease to be effective, and
(c) this Agreement shall not thereafter restrict any party's right to amend and
administer its Credit Documents in such party's discretion. For the avoidance of
doubt, nothing in this paragraph is intended to affect any of the provisions
herein regarding the Guaranties.
(S)5. CONCERNING THE COLLATERAL AGENT.
---------- --- ---------- -----
(S)5.1. Appointment of Collateral Agent. The Agent Bank, acting on
----------- -- ---------- -----
instructions from the Banks, the Note Holders, the Owner Trustee, Indenture
Trustee, and the LC Issuers hereby appoint the Collateral Agent Bank to act as
collateral agent pursuant to the terms of this Agreement and the Security
Documents, and the Collateral Agent Bank hereby accepts such appointment. The
relationship between the Collateral Agent and the holders of the Secured
Obligations is and shall be that of agent and principal only, and nothing
contained in this Agreement or any of the Credit Documents shall be construed to
appoint the Collateral Agent as a trustee for any such holder.
(S)5.2. Limitations on Responsibility of Collateral Agent.
----------- -- -------------- -- ---------- -----
(a) The Collateral Agent shall not be responsible in any manner
whatsoever for the correctness of any recitals, statements, representations or
warranties contained herein or in any Security Document, except for those made
by it herein. The Collateral Agent makes no representation as to the value or
condition of the Collateral or any part thereof, as to the title of the Company
or any Guarantor to the Collateral, as to the security afforded by this
Agreement or any Security Document or, except as set forth in (S)6, as to the
validity, execution, enforceability, legality or sufficiency of this Agreement
or any Security Document, and the Collateral Agent shall incur no liability or
responsibility in respect of any such matters. The Collateral Agent shall not
be responsible for insuring the Collateral, for the payment of taxes, charges,
assessments or liens upon the Collateral or otherwise as to the maintenance of
the Collateral, except as provided in the immediately following sentence when
the Collateral Agent has possession of the Collateral. The Collateral Agent
shall have no duty to the Company or any Guarantor or to the holders of any of
the Secured Obligations as to the care of any Collateral in its possession or
control or in the possession or control of any agent or nominee of the
Collateral Agent or any income thereon or as to the preservation of rights
against prior parties or any other rights pertaining thereto, except the duty to
accord such of the Collateral as may be in its possession substantially the same
care as it accords its own assets and the duty to account for monies received by
it. The Collateral Agent's duties and responsibilities shall be determined
solely by the provisions of this Agreement and the Security Documents to which
it is a party, and the Collateral Agent shall not be liable or responsible for
any duties or obligations set forth in any other document to which it is not a
party.
(b) The Collateral Agent shall not be responsible for any loss
suffered with respect to any investment permitted to be made under this
Agreement and shall not be responsible for the consequences of any oversight or
error of judgment whatsoever, except that the Collateral Agent may be liable for
losses due to its willful misconduct, or negligence. The Collateral Agent shall
not be required to ascertain or inquire as to the performance by the Company of
any of the covenants or agreements contained herein or in any of the Credit
<PAGE>
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Documents. Neither the Collateral Agent nor any officer, agent or
representative thereof shall be personally liable for any action taken or
omitted to be taken by any such Person in connection with this Agreement or any
Security Document except for such Person's own gross negligence or willful
misconduct. Neither the Collateral Agent nor any officer shall be personally
liable for any action taken by any such Person in accordance with any notice
given by the Requisite Parties in accordance with and pursuant to the terms of
this Agreement even if, at the time such action is taken by any such Person, the
Requisite Parties or Persons purporting to be the Requisite Parties are not so
authorized by the Requisite Parties to give such notice, except where a
Responsible Officer of the Collateral Agent has actual knowledge that such
Requisite Parties or Persons purporting to be the Requisite Parties are not so
authorized by the Requisite Parties to give such notice. The Collateral Agent
may execute any of the powers granted under this Agreement or any of the
Security Documents and perform any duty hereunder or thereunder either directly
or by or through agents or attorneys-in-fact and shall not be responsible for
anything done by such agents or attorneys-in-fact selected by it with due care.
(c) Whenever pursuant to the provisions hereof or of any Security
Document it is required that any party hereto obtain the consent or approval of
the Collateral Agent, or that any matter prove satisfactory to the Collateral
Agent, or that any action be taken at the request, discretion, option or
determination of the Collateral Agent, the Collateral Agent, prior to giving any
such consent or approval or request, or exercising any such option, discretion
or determination, or indicating its satisfaction with any such matter, shall
(except where the failure to do so, in its good faith judgment, could imperil
the Collateral or the Liens thereon) be required to consult with the Secured
Parties in a manner deemed reasonable by the Collateral Agent, and the
Collateral Agent shall be protected in following any direction of the Requisite
Parties or Special Requisite Parties, as the case may be.
(d) The foregoing provisions of this (S)5.2 shall not relieve the
Collateral Agent of any liability for any failure to perform any contractual
duty expressly undertaken by it to be performed under this Agreement if such
liability is caused by the negligence or willful misconduct of the Collateral
Agent.
(S)5.3. Reliance by Collateral Agent; Etc.
-------- -- ---------- ----- ---
(a) Whenever in the performance of its duties under this Agreement the
Collateral Agent shall deem it necessary or desirable that a matter be proved or
established with respect to any Person in connection with the taking, suffering
or omitting of any action hereunder by the Collateral Agent, such matter may be
conclusively deemed to be proved or established by a certificate executed by an
officer of such Person, and the Collateral Agent shall have no liability with
respect to any action taken, suffered or omitted in reliance in good faith
thereon.
(b) The Collateral Agent may consult with counsel and shall be fully
protected in taking any action hereunder in good faith in accordance with any
advice of such counsel. The Collateral Agent shall have the right but not the
obligation at any time to seek instructions concerning the administration of
this Agreement, the duties created hereunder, or any of the Collateral from any
court of competent jurisdiction.
<PAGE>
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(c) The Collateral Agent shall be fully protected in relying in
good faith upon any resolution, statement, certificate, instrument, opinion,
report, notice, request, consent, order or other paper or document which it
believes to be genuine and to have been signed or presented by the proper party
or parties. In the absence of its gross negligence or willful misconduct, the
Collateral Agent may conclusively rely in good faith, as to the truth of the
statements and the correctness of the opinions expressed therein, upon any
certificate or opinions furnished to the Collateral Agent in connection with
this Agreement.
(d) The Collateral Agent shall not be deemed to have actual,
constructive, direct or indirect notice or knowledge of the occurrence of any
Event of Default or Actionable Default unless and until a Responsible Officer of
the Collateral Agent shall have received a Notice of Actionable Default or
notice of such Event of Default. The Collateral Agent shall have no obligation
whatsoever either prior to or after receiving such a Notice of Actionable
Default to inquire whether an Actionable Default has, in fact, occurred and
shall be entitled to rely in good faith conclusively, and shall be fully
protected in so relying, on any certificate so furnished to it and shall have no
obligation, absent written instructions from the Requisite Parties, to take or
omit to take any action with respect to such Notice of Actionable Default.
(e) To the extent the Collateral Agent is required (pursuant to
(S)4 or otherwise) to determine any amount of, or take any action to distribute
any amount in respect of, any Secured Obligation hereunder, it shall have no
obligation to do so unless such amount shall have been certified in writing by
the holder of such Secured Obligations as being the amount in question. Each of
the other parties hereto agrees to certify such amounts upon request of the
Collateral Agent. If any dispute or disagreement shall arise as to the
allocation of any sum of money received by the Collateral Agent hereunder or
under any Security Document, the Collateral Agent shall have the right to
deliver such sum to a court of competent jurisdiction and therein commence an
action for interpleader.
(f) The Collateral Agent shall assume for all purposes hereunder
that the Lien of the Indenture remains outstanding unless and until the
Collateral Agent receives notice from the Indenture Trustee that the Lien of the
Indenture is no longer outstanding.
(S)5.4. Resignation or Removal of the Collateral Agent. The
----------- ------------- --- ---------- -----
Collateral Agent may at any time resign by giving at least sixty (60) days prior
written notice thereof to each Secured Party and the Company, and the Collateral
Agent may at any time be removed for cause (consisting of fraud, gross
misconduct, willful or reckless breach of this Agreement or other just cause, as
determined in their discretion by the Requisite Parties) by at least sixty (60)
days prior written notice thereof to the Collateral Agent, each other Secured
Party and the Company given by the Requisite Parties, provided that no
--------
resignation or removal shall be effective until a successor for the Collateral
Agent is appointed. Upon such resignation or removal, the Requisite Parties
shall have the right to appoint a successor Collateral Agent. If no successor
Collateral Agent shall have been so appointed by the Requisite Parties and shall
have accepted such appointment within forty-five (45) days after the retiring
Collateral Agent's giving of notice of resignation or the giving of notice of
removal, as the case may be, then the retiring Collateral Agent may, on behalf
of the Secured Parties, appoint a successor Collateral Agent, which shall
<PAGE>
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be a financial institution having a long-term bank deposit rating of not less
than "A" from Standard & Poor's Ratings Group, a Division of McGraw-Hill, Inc.,
or "A-2" from Moody's Investors Service, Inc. Upon the acceptance of any
appointment as Collateral Agent hereunder by a successor Collateral Agent, such
successor Collateral Agent shall thereupon succeed to and become vested with all
the rights, powers, privileges and duties of the retiring Collateral Agent, and
the retiring Collateral Agent shall be discharged from its duties and
obligations hereunder. After any retiring Collateral Agent's resignation or
removal, the provisions of this Agreement and the Security Documents shall
continue in effect for its benefit in respect of any actions taken or omitted to
be taken by it while it was acting as Collateral Agent. Any corporation into
which the Collateral Agent Bank may be merged or with which it may be
consolidated, or any corporation which acquires all or substantially all of the
corporate trust business of the Collateral Agent Bank, including the Collateral
agency established pursuant to this Agreement, or any corporation resulting from
any merger or consolidation to which the Collateral Agent Bank shall be a party,
shall be the successor to the Collateral Agent Bank without the execution of any
paper.
(S)5.5. Expenses and Indemnification by the Company. By
-------- --- --------------- -- --- -------
countersigning this Agreement, the Company agrees (a) to reimburse the
Collateral Agent, on demand, for any expenses incurred by the Collateral Agent,
including reasonable counsel fees and disbursements and compensation of agents,
arising out of, in any way connected with, or as a result of, the execution or
delivery of this Agreement or any Security Document or any agreement or
instrument contemplated hereby or thereby or the performance by the parties
hereto or thereto of their respective obligations hereunder or thereunder or in
connection with the enforcement or protection of the rights of the Collateral
Agent and the Secured Parties hereunder or under the Security Documents, (b) to
indemnify and hold harmless the Collateral Agent and its directors, officers,
employees and agents, on demand, from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever which may be imposed
on, incurred by or asserted against the Collateral Agent Bank in its capacity as
the Collateral Agent or any of them in any way relating to or arising out of
this Agreement or any Security Document or any action taken or omitted by them
under this Agreement or any Security Document; provided that the Company shall
--------
not be liable to the Collateral Agent for any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements resulting from the gross negligence or willful
misconduct of the Collateral Agent or any of its directors, officers, employees
or agents as determined by a final non-appealable order of a court of competent
jurisdiction, and (c) to indemnify and hold harmless the Collateral Agent, on
demand, from and against any and all liabilities which may be imposed on or
incurred by the Collateral Agent Bank (in its capacity as Collateral Agent) for
the net amount of taxes (after taking into account any deduction, credit or
other tax reduction or benefit available by reason of the imposition of any such
tax) in any jurisdiction in which the Collateral Agent Bank would not otherwise
be subject to tax except by reason of its acting under this Agreement or the
Security Documents (directly or through agents); provided that such
--------
indemnification for taxes (i) shall apply only in respect of taxes attributable
to the performance of the Collateral Agent's obligations hereunder and (ii)
shall in no event cover any federal, state, local or other taxes imposed upon
the Collateral Agent Bank with respect to or measured by its gross or net income
or profits or franchise or excise taxes. A statement by the Collateral Agent
that is submitted to the Company with respect to the amount of
<PAGE>
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such expenses and containing a basic description thereof and/or the amount of
its indemnification obligation shall be prima facie evidence of the amount
----- -----
thereof owing to the Collateral Agent or the Collateral Agent Bank, as the case
may be. Except as otherwise expressly provided herein, the Collateral Agent
shall be under no obligation to take any action to protect, preserve or enforce
any rights or interests in the Collateral or to take any action in connection
with the execution or enforcement of its duties hereunder, whether on its own
motion or on request of any other Person, which in the opinion of the Collateral
Agent may involve loss, liability or expense to it, unless one or more of the
Requisite Parties shall offer and furnish security or indemnity, reasonably
satisfactory to the Collateral Agent in accordance herewith, against loss,
liability and expense to the Collateral Agent. Notwithstanding anything to the
contrary contained in this Agreement, or any Security Document, Credit Document
or any other document noted in Section 10 of this Agreement, in the event that
the Collateral Agent is entitled or required to commence an action to foreclose
on such Security Document, Credit Document or other document, or otherwise
exercise its remedies to acquire control or possession of any property
constituting all or part of the Collateral, the Collateral Agent shall not be
required to commence any such action or exercise any such remedy if the
Collateral Agent has determined in good faith that it may incur liability under
any federal or state environmental or hazardous waste law, rule or regulation as
the result of the presence at, or release on or from, any property of any
hazardous materials or waste, as defined under such federal or state laws,
unless it has received security or indemnity from a Person, in an amount and in
form, all satisfactory to the Collateral Agent in its sole discretion,
protecting the Collateral Agent from all such liability.
(S)5.6. Expenses and Indemnification by Secured Parties. Each of the
-------- --- --------------- -- ---------------
Banks, the LC Issuers and the Note Holders severally agrees (i) to reimburse the
Collateral Agent, on demand, in the amount of its pro rata share for any
--- ----
expenses referred to in (S)5.5 and fees due pursuant to (S)5.7 which shall not
have been reimbursed or paid by the Company or paid from the proceeds of
Collateral as provided herein and (ii) to indemnify and hold harmless the
Collateral Agent, the Collateral Agent Bank and its directors, officers,
employees and agents, on demand, in the amount of its pro rata share, from and
--- ----
against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements referred to in
(S)5.5, to the extent the same shall not have been reimbursed by the Company or
paid from the proceeds of Collateral as provided herein; provided that no Bank,
--------
LC Issuer, or Note Holder shall be liable to the Collateral Agent or the
Collateral Agent Bank for any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
resulting from the gross negligence or willful misconduct of, or the negligence
or willful misconduct in the failure to perform any express duty undertaken
under this Agreement to be performed by, the Collateral Agent or the Collateral
Agent Bank or any of its directors, officers, employees or agents. For purposes
of this (S)5.6, the pro rata share of any Bank's, Note Holder's, or LC Issuer's
---------
claim for which a reimbursement or indemnity obligation arises under this (S)5.6
shall be its percentage share of the sum of the Principal Obligations, the
Outstanding Bank LC Exposure and the Outstanding IRB LC Exposure as of the last
day of the calendar month preceding the date on which such claim was incurred
and on which any Outstanding Bank LC Exposure or Outstanding IRB LC Exposure
existed or any Principal Obligations were outstanding.
<PAGE>
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(S)5.7. Collateral Agent's Fee. By countersigning this Agreement,
---------- ------- ---
the Company agrees to pay to the Collateral Agent for the Collateral Agent's own
account, a non-refundable Collateral Agent's fee, in an amount designated in
writing by the Collateral Agent to the Company, on the date this Agreement is
entered into and at the end of each quarterly period hereafter until the Secured
Obligations have been paid in full in cash, the commitments represented by the
Bank Credit Documents shall have expired or been reduced to zero or terminated,
there is no Outstanding IRB LC Exposure, and the Collateral Agent no longer has
any duties hereunder.
(S)5.8. Appointments of Co-Agent or Separate Agent.
------------------------------------------
(a) Notwithstanding any other provision of this Agreement, at
any time, for the purpose of meeting any legal requirements of any
jurisdiction in which any part of the Collateral may at the time be
located, the Collateral Agent shall have the power and may execute and
deliver all instruments to appoint one or more Persons to act as a co-
agent, or separate agent, of all or any part of the Collateral, and to vest
in such Person, in such capacity and for the benefit of the Secured
Parties, subject to the other provisions of this (S)5.8, such powers,
duties, obligations, rights and trusts as the Collateral Agent may consider
necessary or desirable. No co-agent or separate agent hereunder shall be
required to meet the terms of eligibility as a successor Collateral Agent
under (S)5.4 and no notice to Secured Parties of the appointment of any co-
agent or separate agent shall be required.
(b) Every separate agent and co-agent shall, to the extent
permitted by law, be appointed and act subject to the following provisions and
conditions:
(i) all rights, powers, duties and obligations conferred or
imposed upon the Collateral Agent shall be conferred or imposed upon and
exercised or performed by the Collateral Agent and such separate agent or
co-agent jointly (it being understood that such separate agent or co-agent
is not authorized to act separately without the Collateral Agent joining in
such act), except to the extent that under any laws of any jurisdiction in
which any particular act or acts are to be performed, the Collateral Agent
shall be incompetent or unqualified to perform such act or acts, in which
event such rights, powers, duties and obligations (including the holding of
title to the Collateral or any portion thereof in any such jurisdiction)
shall be exercised and performed singly by such separate agent or co-agent,
but solely at the direction of the Collateral Agent;
(ii) no agent hereunder shall be personally liable by reason of
any act or omission of any other agent hereunder appointed with due care or
for any action or omission in connection with its duties hereunder not
constituting gross negligence or willful misconduct; and
(iii) the Collateral Agent may at any time accept the resignation
of or remove any separate agent or co-agent.
<PAGE>
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(c) Any notice, request or other writing given to the Collateral
Agent shall be deemed to have been given to each of the then separate agents and
co-agents, as effectively as if given to each of them. Every instrument
appointing any separate agent or co-agent shall refer to this Agreement and the
conditions of this (S)5.8. Each separate agent and co-agent, upon its acceptance
of the agency conferred, shall be vested with the estates or property specified
in its instrument of appointment, either jointly with the Collateral Agent or
separately, as may be provided therein, subject to all the provisions of this
Agreement, specifically including every provision of this Agreement relating to
the conduct of, affecting the liability of, or affording protection to, the
Collateral Agent. Every such instrument shall be filed with the Collateral
Agent.
(d) Any separate agent or co-agent may at any time appoint the
Collateral Agent, its agent or attorney-in-fact with full power and authority,
to the extent not prohibited by law, to do any lawful act under or in respect to
this Agreement on its behalf and in its name. If any separate agent or co-agent
shall die, become incapable of acting, resign or be removed, all of its estates,
properties, rights, remedies and trusts shall vest in and be exercised by the
Collateral Agent, to the extent permitted by law, without the appointment of a
new or successor agent.
(S)6. REPRESENTATIONS AND WARRANTIES. Each of the Collateral Agent,
--------------- --- ----------
the Agent Bank, the LC Issuers, the Note Holders, the Owner Trustee, the
Indenture Trustee, and, by countersigning this Agreement, the Company and each
Guarantor, represents and warrants to the other parties hereto that (a) the
execution, delivery and performance of this Agreement (i) have been duly
authorized by all requisite corporate action on its part and, in the case of the
Agent Bank, by the appropriate number of Banks required under the Credit
Agreement, and (ii) do not conflict with or result in any breach or
contravention of any provision of law, statute, rule or regulation to which it
is subject or any judgment, order, writ, injunction, license or permit
applicable to it and will not conflict with any provision of its corporate
charter or bylaws or any agreement or other instrument binding upon it; and (b)
this Agreement has been duly executed and delivered by it and constitutes its
legal, valid and binding obligation, enforceable in accordance with its terms.
(S)7. AMENDMENT OF THIS AGREEMENT.
--------- -- ---- ---------
(S)7.1. Amendments. No modification or amendment of this Agreement
----------
shall be effective unless the same shall be in writing and signed by the
Majority Secured Parties and no modification or amendment of any Security
Document shall be effective, nor shall any waiver of any provision of any
Security Document be executed by the Collateral Agent, without the written
consent of the Requisite Parties; provided, however, (i) no amendment or waiver
-------- -------
shall adversely affect any of the Collateral Agent's rights, immunities or
rights to indemnification hereunder or under any of the Security Documents or
expand its duties or reduce any amount payable to the Collateral Agent hereunder
or under any Security Documents without the written consent of the Collateral
Agent; (ii) (S)(S)3 and 5 of this Agreement and any other provision of this
Agreement or of any of the Security Documents affecting the rights and
obligations of the Collateral Agent hereunder may not be amended without the
written consent of the Collateral Agent; (iii) no modification or amendment of
(x) (S)4.1(i), (S)4.9(a), (S)4.9(b) (except for the last sentence thereof),
(S)4.9(c), (S)4.9(e), (S)5.5, (S)5.7, clause (iii) of (S)7.1, (S)8, (S)11.5(a),
(S)11.5(b), (S)11.5(c), or (S)11.11 of this
<PAGE>
-40-
Agreement, or (y) the definitions of Equity Interests, Equity Issuance,
Disposition, Net Proceeds, SBQ, Lease Claims, Lease Payment Claims on Lease
Expense/Indemnity Claims set forth herein, or (z) (S)4.8, if the effect of the
modification or amendment is to increase the vote that is required to give any
waiver with respect to any of the Credit Documents, shall be effective unless
the same shall have been consented to in writing by the Company; (iv) no
modification, amendment or waiver of the provisions of this Agreement or any of
the Security Documents that changes the amount that a Secured Party receives
from a distribution hereunder or that delays the time of a distribution or
expands the obligations of such Secured Party hereunder shall be effective
without the consent of such Secured Party, and (v) no amendment, modification or
waiver of the provisions of this Agreement or any of the Security Documents that
could directly or indirectly prejudice the Lease Claims in a discriminatory
manner vis-a-vis the other Secured Parties shall be effective without the
written consent of the Owner Trustee and, for so long as the Lien of the
Indenture remains outstanding, the Indenture Trustee, provided that the Agent
--------
Bank shall be authorized to give such consent on behalf of the Banks if the
Agent Bank represents that it has such authority under the Credit Agreement. Any
Security Document executed after the date hereof shall be approved by the
Requisite Parties as to form and, in the case of Collateral consisting of any
mortgage or deed of trust over a real estate interest, shall not be deemed to
have been accepted until such time as environmental site assessments
satisfactory to the Requisite Parties have been delivered if requested by such
Requisite Parties.
(S)7.2. Waivers. No waiver of any provision of this Agreement and no
-------
consent to any departure by any party hereto from the provisions hereof shall be
effective unless such waiver or consent shall be set forth in a written
instrument executed by the party against which it is sought to be enforced, and
then such waiver or consent shall be effective only in the specific instance and
for the purpose for which given. No notice to or demand on any party hereto in
any case shall entitle such party to any other or further notice or demand in
the same, similar or other circumstances.
(S)8. APPROVAL BY THE COMPANY AND GUARANTORS; COMPANY'S OBLIGATIONS
-------- -- --- ------- --- ---------- --------- -----------
ABSOLUTE.
- --------
(S)8.1. General. By countersigning this Agreement, each of the
-------
Company and the Guarantors acknowledges and consents to and agrees to perform
and be bound by each provision of this Agreement which expressly recites that
the Company or such Guarantor is agreeing to such provision by countersigning
this Agreement.
(S)8.2 Obligations Absolute. Nothing contained in this Agreement
--------------------
shall impair, as between the Company, or any Guarantor and the Agent, the Banks,
the LC Issuers, the Note Holders, the Owner Trustee and the Indenture Trustee,
(a) the obligation of the Company or such Guarantor to pay to the Agent Bank and
the Banks all amounts payable in respect of the Bank Debt as and when the same
shall become due and payable in accordance with the terms thereof, or prevent
the Agent Bank or any of the Banks (except as expressly otherwise provided in
this Agreement) from exercising all rights, powers and remedies otherwise
permitted by the Bank Credit Documents and by applicable law upon a default in
the payment of the Bank Debt, all, however, subject to the rights of the Note
Holders and LC Issuers as set forth in this Agreement; or (b) the obligation of
the Company or such Guarantor to pay to the Note Holders all amounts
<PAGE>
-41-
payable in respect of the Note Debt as and when the same shall become due and
payable in accordance with the terms thereof, or prevent any of the Note Holders
(except as expressly otherwise provided in this Agreement) from exercising all
rights, powers and remedies otherwise permitted by the Note Credit Documents and
by applicable law upon a default in the payment of the Note Debt, all, however,
subject to the rights of the Agent Bank, the Banks and the LC Issuers as set
forth in this Agreement, or (c) the obligation of the Company or such Guarantor
to pay to the LC Issuers all amounts payable in respect of the Reimbursement
Agreement Debt as and when the same shall become due and payable in accordance
with the terms thereof, or prevent either of the LC Issuers (except as expressly
otherwise provided in this Agreement) from exercising all rights, powers and
remedies otherwise permitted by the Reimbursement Agreements and by applicable
law upon a default in the payment of the Reimbursement Agreement Debt, all,
however, subject to the rights of the Agent Bank, the Banks and the Note Holders
as set forth in this Agreement.
(S)8.3. No Additional Rights for Company Hereunder. If the
------------------------------------------
Collateral Agent, the Agent Bank, or any Secured Party shall enforce its rights
or remedies in violation of the terms of this Agreement, the Company and each
Guarantor agrees, by its consent hereto, that it shall not use such violation as
a defense to such enforcement by any such party nor assert such violation as a
counterclaim or basis for setoff or recoupment against any such party. Nothing
contained in this Agreement shall constitute a commitment by any Bank, LC Issuer
or Note Holder to make available to the Company any loans or letters of credit
which would comprise, in the case of the Banks, an Additional Advance Amount or,
in the case of the LC Issuers and the Note Holders, any additional loans or
letters of credit.
(S)9. COLLATERAL AGENT AS AGENT AND LENDER. If a Secured Party is
---------- ----- -- ----- --- ------
at any time the Collateral Agent or a co-agent or separate agent pursuant to
(S)5.8, such Secured Party shall, in its individual capacity and as Collateral
Agent, have the same obligations and the same rights, powers and privileges as
it would have had were it not also the Collateral Agent.
(S)10 INTENTIONALLY DELETED.
---------------------
(S)11. MISCELLANEOUS.
-------------
(S)11.1. Further Assurances, Etc. The Agent Bank, the Banks, the LC
------- ---------- ---
Issuers and the Note Holders and, by countersigning this Agreement, the Company
and each Guarantor, agree to execute and deliver such other documents and
instruments, in form and substance reasonably satisfactory to the Collateral
Agent, and shall take such other action, in each case as the Collateral Agent
(upon instructions from the Requisite Parties) or any Secured Party may
reasonably request (at the sole, but reasonable, cost and expense of the Company
which, by countersigning this Agreement, agrees to pay such reasonable costs and
expenses), to effectuate and carry out the provisions of this Agreement
including, without limitation, by recording or filing in such places as the
requesting party may deem desirable, this Agreement or such other documents or
instruments.
<PAGE>
-42-
(S)11.2. No Individual Action; Marshaling; Etc. No holder of any
-- ---------- ------ ---------- ---
Secured Obligations may require the Collateral Agent to take or refrain from
taking any action hereunder or under any of the Security Documents or with
respect to any of the Collateral except as and to the extent expressly set forth
in this Agreement. The Collateral Agent shall have no duty to, and the Company
and each Guarantor hereby waives any and all right to require the Collateral
Agent to, marshal any assets or otherwise to take any actions with respect to
marshaling.
(S)11.3. Successors and Assigns.
---------- --- -------
(a) This Agreement shall be binding on and inure to the benefit
of the Collateral Agent, each of the Banks, the Agent Bank, each of the LC
Issuers, each of the Note Holders, the Owner Trustee, the Indenture Trustee, and
their respective successors and assigns, and shall be binding on the Company and
each Guarantor and their respective successors and permitted assigns. Each of
the Note Holders acknowledges that the provisions of this Agreement apply
regardless of any sale, transfer, pledge, assignment, hypothecation or other
disposition by such Note Holder of any Notes to any Person, each of the Banks,
LC Issuers, Owner Trustee and Indenture Trustee agrees that the provisions of
this Agreement apply regardless of any sale, transfer, pledge, assignment,
hypothecation or other disposition by such Bank, LC Issuer, Owner Trustee or
Indenture Trustee of any instrument or right evidencing the Bank Debt,
Reimbursement Agreement Debt or Lease Claims to any Person. Each Secured Party
agrees that it shall not sell, transfer, assign or otherwise dispose of any
interest in any Secured Obligation unless the buyer, transferee or assignee
assumes in writing the obligations of such Secured Party under this Agreement;
provided, however, that the foregoing shall not prohibit any Secured Party from
- -------- -------
pledging or otherwise granting a security interest in any Secured Obligation so
long as the pledgee or other secured party, as a condition to its retaining or
further transferring such Secured Obligation by way of enforcement of such
pledge or other security interest, assumes or causes its transferee to assume in
writing the obligations of such Secured Party under this Agreement.
(b) No Secured Party (other than the Owner Trustee or Indenture
Trustee) may sell any Secured Obligation or any interest therein to the Company
or any Subsidiary or affiliate of the Company, or accept any payment of a
Secured Obligation from an affiliate of the Company that is not a Guarantor,
without the consent of the Requisite Parties. The Agent Bank shall require each
Bank becoming a party to the Credit Agreement after the date of this Agreement
to execute and deliver to the other parties hereto a counterpart of this
Agreement. Any Note Holder assigning all or a portion of its note shall require
its assignee to execute and deliver to all other parties hereto a counterpart of
this Agreement.
(c) Nothing contained in this (S)11.3 shall permit any
assignment of any Secured Obligation created or evidenced by any Credit Document
if such assignment is not otherwise permitted by that Credit Document.
(S)11.4. Notices. All notices and other communications made or
-------
required to be given pursuant to this Agreement or the Security Documents shall
be in writing and shall be delivered in hand, mailed by United States registered
or certified first class mail, postage prepaid, sent by overnight courier or
sent by telecopy, confirmed by delivery via courier or postal service, addressed
as set forth on Schedule 11.4 hereto or to such other address or
-------------
<PAGE>
-43-
addresses as any such party shall specify by notice given to the other parties.
Any such notice and other communications shall be deemed to have been duly given
or made and to have become effective (i) if delivered by hand, overnight courier
or facsimile, at the time of the receipt thereof, and (ii) if sent by registered
or certified first class mail postage prepaid, on the fourth (4th) business
day following the mailing thereof; provided, however, that a Notice of
-------- -------
Actionable Default or any other notice to be delivered to the Collateral Agent
pursuant to the terms of this Agreement shall not be deemed to have been
received by a Responsible Officer of the Collateral Agent until the Collateral
Agent actually receives such notice. Any party hereto (other than the Collateral
Agent) that is required or permitted to give notice to any other party hereto
may, in lieu of giving such notice directly to such other party, give such
notice to the Collateral Agent for delivery to such other party or parties,
provided that (a) the party giving such notice shall expressly instruct the
Collateral Agent in writing as to which parties to deliver such notice to, (b)
the Collateral Agent shall give such notice within two (2) Business Days after
receiving such request, and (c) such notice will only be deemed to have been
given (in accordance with clauses (i) and (ii) of the preceding sentence) to the
recipients thereof after such notice was given by the Collateral Agent, rather
than when such request was made to the Collateral Agent.
(S)11.5. Termination.
-----------
(a) The security interests created by the Security Documents,
including the security interest of the Collateral Agent, shall terminate and all
right, title and interest in the Collateral shall revert to the Company and its
successors and assigns upon the satisfaction of each of the following five
conditions:
(i) receipt by the Collateral Agent from the Agent Bank of
notice stating that either:
(A) the Bank Debt has been paid in full, in cash, and
all commitments under the Credit Agreement have terminated, been
canceled or been reduced to zero; or
--
(B) the Bank Debt no longer constitutes a Secured
Obligation under the Security Documents; and
---
(ii) receipt by the Collateral Agent from each of the Note
Holders of notice that either:
(A) the Note Debt held by such Note Holders has been
paid in full, in cash, in accordance with the Note Purchase Agreement;
or
--
(B) the Note Debt held by such Note Holders no longer
constitutes a Secured Obligation under the Security Documents; and
---
<PAGE>
-44-
(iii) receipt by the Collateral Agent from each of the LC
Issuers of notice stating that:
(A) the Reimbursement Obligations due to it have been
paid in full, in cash, and it has no Outstanding IRB LC Exposure; or
--
(B) the Reimbursement Obligations due to it no longer
constitute a Secured Obligation under the Security Documents; and
---
(iv) receipt by the Collateral Agent from the Owner Trustee and
Indenture Trustee of notice that either:
(A) the Lease Claims have been paid in full, in cash, in
accordance with the Lease Documents; or
(B) the Lease Claims no longer constitute a Secured
Obligation under the Security Documents; and
(v) payment in full in cash of all amounts owed to the
Collateral Agent pursuant to (S)5.5 and (S)5.7.
The Secured Parties agree, severally and not jointly, to provide the
notices contemplated by (S)11.5(a)(i), (S)11.5(a)(ii), (S)11.5(a)(iii), and
(S)11.5(a)(iv) under the circumstances provided in Clause (A) of such Sections
for such notices to be capable of being given, upon the Company's request and in
any event as if (S)9-208 of the Uniform Commercial Code as in effect in the
State of New York on the date hereof were applicable to them as direct secured
parties.
(b) Upon the termination of the Collateral Agent's security interest
and the release of the Collateral in accordance with subsection (a) of this
(S)11.5, the Collateral Agent will promptly, at the Company's written request
and expense, (i) execute and deliver to the Company such documents as the
Company shall reasonably request to evidence the termination of such security
interest, the release of the Collateral or the discharge of the Guaranties and
(ii) deliver or cause to be delivered to the Company all property of the Company
constituting Collateral then held by Collateral Agent or any agent thereof.
(c) This Agreement shall terminate automatically when the security
interests granted under the Security Documents have terminated and the
Collateral has been released to the Company by the Collateral Agent as provided
in the foregoing provisions of this (S)11.5.
(d) If, at any time, any payment made or value received with respect
to any Secured Obligation must be returned by the Secured Party receiving the
same upon the insolvency, bankruptcy or reorganization of the Company or any
Guarantor, or otherwise, with the effect as though such payment had not been
made or value received, the security interest in the Collateral created by the
Security Documents in favor of the Collateral Agent and the rights of the
Collateral Agent to act as agent hereunder and to receive amounts pursuant to
this Agreement shall be reinstated to the extent those rights had previously
been terminated. In such
<PAGE>
-45-
event each Secured Party (other than the Owner Trustee and the Indenture
Trustee) agrees that it will pay to the other Secured Parties such amounts so
that, after giving effect to the payments hereunder by all Secured Parties, the
amounts received by all Secured Parties are not in excess of the amounts to be
paid to them hereunder as though any payment so returned had not been made.
(e) Notwithstanding the foregoing, (S)5.5, (S)5.6 and (S)5.7 of
this Agreement shall survive, and remain operative and in full force and effect,
regardless of the termination of this Agreement.
(S)11.6. Applicable Law. THIS AGREEMENT SHALL BE CONSTRUED IN
---------- ---
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK (WITHOUT
REFERENCE TO ITS CONFLICT OF LAWS PRINCIPLES).
(S)11.7. Waiver of Rights. Neither any failure nor any delay on the
------ -- ------
part of any party hereto in exercising any right, power or privilege hereunder
shall operate as a waiver thereof, and a single or partial exercise thereof
shall not preclude any other or further exercise or the exercise of any other
right, power or privilege.
(S)11.8. Severability. In case any one or more of the provisions
------------
contained in this Agreement should be invalid, illegal or unenforceable in any
respect, the validity, legality and enforceability of the remaining provisions
contained herein shall not in any way be affected or impaired thereby. The
parties shall endeavor in good faith negotiations to replace the invalid,
illegal or unenforceable provisions with valid provisions the economic effect of
which comes as close as possible to that of the invalid, illegal or
unenforceable provision.
(S)11.9. Counterparts. This Agreement may be executed in two or more
------------
counterparts, each of which shall constitute an original, but all of which, when
taken together, shall constitute but one instrument.
(S)11.10. Section Headings. The section headings used herein are for
------- --------
convenience of reference only and are not to affect the construction of or be
taken into consideration in interpreting this Agreement.
(S)11.11 Additional Fees. Contemporaneously with the execution
---------- ----
hereof, the Company (a) shall pay all reasonable counsel fees of the Owner
Trustee, the Indenture Trustee, the Lenders and the Owner Participants under the
Indenture in connection with the negotiation and execution of this Agreement.
In addition, the Company and the Guarantors shall pay all on-going fees and
expenses (including any fees and expenses of counsel) of the Owner Trustee, the
Indenture Trustee, the Owner Participants and the Lenders to enforce this
Agreement, and (b) agree to indemnify the Owner Participants against any adverse
tax consequences resulting from the Owner Trustee's entering into this
Agreement. The parties hereto acknowledge that the Owner Participants and the
Lenders are third party beneficiaries of this (S)11.11 and agree not to amend
this (S)11.11 as it pertains to the Owner Participants and the Lenders without
their prior written consent. The Company acknowledges and agrees that, in
executing and delivering this Agreement to the other parties hereto and in
performing its obligations hereunder, the Indenture Trustee shall be entitled to
all of the rights and benefits afforded to the Indenture Trustee under
<PAGE>
-46-
the Lease Documents, including, without limitation, the Company's
indemnification obligations under Section 7.2 of the Participation Agreement, as
such term is defined in the Indenture, and the limitations on liability provided
under Section 10.11(a) of the Participation Agreement and Section 5.04 of the
Indenture, and the Company hereby agrees that its indemnification of the
Indenture Trustee under Section 7.2 of the Participation Agreement shall
include, subject to the provisions of Section 7.2(d) thereof, any and all Claims
(as defined therein) arising out of the Indenture Trustee's execution, delivery
and performance of its obligations under this Agreement.
(S)11.12. Complete Agreement. This Agreement constitutes the entire
-------- ---------
agreement among the parties hereto with respect to the subject matter hereof and
supersedes and all other prior representations, negotiations, writings,
memoranda and agreements. To the extent any provision of this Agreement
conflicts with the Credit Agreement, the Note Purchase Agreements or any other
Credit Document (other than the Lease Documents), as between the Secured Parties
the provisions of this Agreement shall be controlling. Nothing in this
Agreement, expressed or implied, is intended to confer upon any person other
than the parties hereto any rights or remedies under or by reason of this
Agreement.
(S)11.13. No Recourse to the Owner Trustee or Indenture Trustee. It
-- -------- -- --- ----- ------- -- --------- -------
is expressly understood and agreed by the parties hereto that, subject to the
proviso contained in this (S)11.13, all representations, warranties and
agreements of the Owner Trustee and Indenture Trustee hereunder shall be binding
upon the Owner Trustee and Indenture Trustee, only in their respective
capacities as Owner Trustee and Indenture Trustee and (except as expressly
provided herein) the Owner Trustee and Indenture Trustee shall not be liable in
their respective individual capacities for any breach thereof, except for their
gross negligence or willful misconduct, or for breach of their respective
agreements, representations and warranties contained herein, except to the
extent agreed or made in their respective individual capacities; provided,
--------
however, that nothing in this (S)11.13 shall be construed to limit in scope or
- -------
substance those representations and warranties of the Owner Trustee or Indenture
Trustee made expressly in its individual capacity set forth herein. The terms
"Owner Trustee" and "Indenture Trustee" as used in this Agreement shall include
any successor thereto as Owner Trustee or Indenture Trustee.
[SIGNATURES FOLLOW ON NEXT PAGE]
<PAGE>
IN WITNESS WHEREOF, the Collateral Agent Bank, the Collateral Agent,
the Agent Bank, the Banks, the Note Holders, the LC Issuers, the Owner Trustee,
the Indenture Trustee, the Company and each of the Guarantors have caused this
Collateral Agency and Intercreditor Agreement to be duly executed by their duly
authorized officers, all as of the day and year first above written.
STATE STREET BANK AND TRUST
COMPANY, in its individual capacity and
in its capacity as Collateral Agent
By:
---------------------------------
Name:
-----------------------------
Title:
----------------------------
BANK OF AMERICA, N.A.
in its capacity as Agent Bank
By:
---------------------------------
Name:
-----------------------------
Title:
----------------------------
BANK OF AMERICA, N.A.,
in its capacity as Bank and LC Issuer
By:
---------------------------------
Name:
-----------------------------
Title:
----------------------------
<PAGE>
PNC BANK, NATIONAL ASSOCIATION,
as LC Issuer
By:
---------------------------------
Name:
-----------------------------
Title:
----------------------------
FIRST UNION NATIONAL BANK,
in its capacity as Indenture Trustee
By:
---------------------------------
Name:
-----------------------------
Title:
----------------------------
CHASE MANHATTAN TRUST COMPANY,
NATIONAL ASSOCIATION as Successor
to PNC BANK, NATIONAL ASSOCIATION,
in its capacity as Owner Trustee
By:
---------------------------------
Name:
-----------------------------
Title:
----------------------------
<PAGE>
NOTE HOLDERS
PRINCIPAL LIFE INSURANCE COMPANY
(f/k/a Principal Mutual Life Insurance
Company)
By: Principal Capital Management, LLC,
A Delaware limited liability company,
Its authorized signatory
By
---------------------------------
Its:
By
---------------------------------
Its:
JEFFERSON-PILOT LIFE INSURANCE COMPANY
By
---------------------------------
Name:
Title:
THE EQUITABLE LIFE ASSURANCE
SOCIETY OF THE UNITED STATES
By
---------------------------------
Name:
Title:
J. ROMEO & CO., as nominee for MONY LIFE
INSURANCE COMPANY OF NEW YORK
By
---------------------------------
Name:
Title:
<PAGE>
THE RELIABLE LIFE INSURANCE COMPANY
By: Advantus Capital Management, Inc.
By
---------------------------------
Name:
Title:
GREAT-WEST LIFE & ANNUITY
INSURANCE COMPANY
By
---------------------------------
Name:
Title:
By
---------------------------------
Name:
Title:
THE GREAT-WEST LIFE ASSURANCE COMPANY
By
---------------------------------
Name:
Title:
By
---------------------------------
Name:
Title:
TEACHERS INSURANCE AND ANNUITY
ASSOCIATION OF AMERICA
By
---------------------------------
Name:
Title:
<PAGE>
PHOENIX HOME LIFE MUTUAL
INSURANCE COMPANY
By
---------------------------------
Name:
Title:
AMERICAN UNITED LIFE INSURANCE COMPANY
By
---------------------------------
Name:
Title:
THE CANADA LIFE ASSURANCE COMPANY
(Cummings & Co. as nominee)
By
---------------------------------
Name:
Title:
CANADA LIFE INSURANCE COMPANY OF AMERICA
(CUMMINGS & CO. as nominee)
By
---------------------------------
Name:
Title:
CANADA LIFE INSURANCE COMPANY OF NEW YORK
(CUMMINGS & CO. as nominee)
By
---------------------------------
Name:
Title:
AMERITAS LIFE INSURANCE CORP.
By: Ameritas Investment Advisors Inc.,
By
---------------------------------
Name:
Title:
<PAGE>
BERKSHIRE LIFE INSURANCE COMPANY
By
---------------------------------
Name:
Title:
PROVIDENT MUTUAL LIFE INSURANCE
COMPANY - CALIC
By
---------------------------------
Name:
Title:
NATIONWIDE LIFE INSURANCE COMPANY
By
---------------------------------
Name:
Title:
NATIONWIDE LIFE INSURANCE
COMPANY (as successor to EMPLOYERS
LIFE INSURANCE COMPANY OF WAUSAU)
By
---------------------------------
Name:
Title:
CONNECTICUT GENERAL LIFE
INSURANCE COMPANY
By CIGNA Investments, Inc.,
its authorized agent
By
---------------------------------
Name:
Title:
<PAGE>
LIFE INSURANCE COMPANY OF NORTH AMERICA
By CIGNA Investments, Inc., its authorized agent
By
---------------------------------
Name:
Title:
CIGNA PROPERTY AND CASUALTY INSURANCE COMPANY
By CIGNA Investments, Inc., its authorized agent
By
---------------------------------
Name:
Title:
CENTURY INDEMNITY COMPANY
By: CIGNA Investments, Inc., its authorized
agent
By
---------------------------------
Name:
Title:
THE NORTHWESTERN MUTUAL LIFE INSURANCE COMPANY
By
---------------------------------
Name:
Title:
<PAGE>
THE STATE LIFE INSURANCE COMPANY
By
----------------------------
Name:
Title:
MINNESOTA LIFE INSURANCE COMPANY
By: Advantus Capital Management, Inc.
By
----------------------------
Name:
Title:
FEDERATED LIFE INSURANCE COMPANY
By: Advantus Capital Management, Inc.
By
----------------------------
Name:
Title:
FEDERATED MUTUAL INSURANCE COMPANY
By: Advantus Capital Management, Inc.
By
----------------------------
Name:
Title:
MUTUAL TRUST LIFE INSURANCE COMPANY
By: Advantus Capital Management, Inc.
By
----------------------------
Name:
Title:
<PAGE>
GUARANTEE RESERVE LIFE INSURANCE
COMPANY
By: Advantus Capital Management, Inc.
By
--------------------------------
Name:
Title:
NATIONAL TRAVELERS LIFE COMPANY
By: Advantus Capital Management, Inc.
By
--------------------------------
Name:
Title:
SUN LIFE ASSURANCE COMPANY OF
CANADA (U.S.)
By
--------------------------------
Name:
Title:
By
--------------------------------
Name:
Title:
SUN LIFE ASSURANCE COMPANY OF CANADA
By
--------------------------------
Name:
Title:
By
--------------------------------
Name:
Title:
<PAGE>
SUN LIFE INSURANCE AND ANNUITY
COMPANY OF NEW YORK
By
--------------------------------
Name:
Title:
By
--------------------------------
Name:
Title:
GENERAL ELECTRIC CAPITAL
ASSURANCE COMPANY
(formerly known as Great Northern
Insured Annuity Corporation)
By
--------------------------------
Name:
Title:
THE LINCOLN NATIONAL LIFE
INSURANCE COMPANY
By: Lincoln Investment Management, Inc.,
Its Attorney-In-Fact
By
--------------------------------
Name:
Title:
ACACIA LIFE INSURANCE COMPANY
By: Ameritas Investment Advisors Inc.,
as Agent
By
--------------------------------
Name:
Title:
<PAGE>
ACCEPTED AND AGREED TO:
BIRMINGHAM STEEL CORPORATION
By:
--------------------------
Name:
----------------------
Title:
---------------------
GUARANTORS:
AMERICAN STEEL & WIRE CORPORATION
BIRMINGHAM EAST COAST HOLDINGS, LLC
NORFOLK STEEL CORPORATION
PORT EVERGLADES STEEL CORPORATION
BIRMINGHAM RECYCLING INVESTMENT COMPANY
MIDWEST HOLDINGS, INC.
CUMBERLAND RECYCLERS, LLC
By:
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Name:
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Title:
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<PAGE>
SCHEDULE 11.4
(ADDRESSES)
State Street Bank and Trust Company
225 Asylum Street
Hartford, Connecticut 06103
Bank of America, N.A.
600 Peachtree Street, 9/th/ Floor
Atlanta, GA 30308
PNC Bank, National Association
One PNC Plaza
249 5/th/ Avenue, 3/rd/ Floor
Pittsburgh, PA 15222-2707
First Union National Bank
Chase Manhattan Trust Company, National Association
Principal Life Insurance Company
801 Grand Avenue
Des Moines, IA 50392-0800
Jefferson-Pilot Life Insurance Company
100 North Greene Street
Greensboro, NC 27420
The Equitable Life Assurance Society of the United States
1290 Avenue of the Americas
New York, NY 10104
<PAGE>
J. Romeo & Co.
c/o MONY Life Insurance Company
1740 Broadway
New York, NY 10019
The Reliable Life Insurance Company
c/o Advantus Capital Management, inc.
400 Robert Street North
St. Paul, MN 55101
Great-West Life & Annuity Insurance Company
8515 East Orchard Road
Englewood, CO 80111
The Great-West Life Assurance Company
8515 East Orchard Road
Englewood, CO 80111
Teachers Insurance And Annuity Association of America
Phoenix Home Life Mutual Insurance Company
One American Row
Hartford, CT 06115
American United Life Insurance Company
One American Square
Indianapolis, IN 46282
The Canada Life Assurance Company
330 University Avenue
Toronto, Ontario M5H 2X7
Canada
<PAGE>
Canada Life Insurance Company of America
330 University Avenue
Toronto, Ontario M5H 2X7
Canada
Canada Life Insurance Company of New York
330 University Avenue
Toronto, Ontario M5H 2X7
Canada
Ameritas Life Insurance Corp.
c/o Ameritas Investment Advisors, Inc.
5900 "O" Street
Lincoln, NE 68510-2234
Berkshire Life Insurance Company
700 South Street
Pittsfield, MA 01201
Provident Mutual Life Insurance Company
1205 Westlakes Drive
Berwyn, PA 19312-249
Nationwide Life Insurance Company
One Nationwide Plaza
Columbus, OH 43215-2220
Connecticut General Life Insurance Company
c/o CIGNA Investments, Inc.
900 Cottage Grove Road
Bloomfield, CT 06002
<PAGE>
Life Insurance Company of North America
c/o CIGNA Investments, Inc.
900 Cottage Grove Road
Bloomfield, CT 06002
CIGNA Property and Casualty Insurance Company
c/o CIGNA Investments, Inc.
900 Cottage Grove Road
Bloomfield, CT 06002
Century Indemnity Company
c/o CIGNA Investments, Inc.
900 Cottage Grove Road
Bloomfield, CT 06002
The Northwestern Mutual Life Insurance Company
720 East Wisconsin Avenue
Milwaukee, WI 53202
The State Life Insurance Company
c/o American United Life Insurance Company
One American Square
Indianapolis, IN 46282
Minnesota Life Insurance Company
c/o Advantus Capital Management, Inc.
400 Robert Street North
St. Paul, MN 55101
Federated Life Insurance Company
<PAGE>
c/o Advantus Capital Management, Inc.
400 Robert Street North
St. Paul, MN 55101
Federated Mutual Insurance Company
c/o Advantus Capital Management, Inc.
400 Robert Street North
St. Paul, MN 55101
Mutual Trust Life Insurance Company
c/o Advantus Capital Management, Inc.
400 Robert Street North
St. Paul, MN 55101
Guarantee Reserve Life Insurance Company
c/o Advantus Capital Management, Inc.
400 Robert Street North
St. Paul, MN 55101
National Travelers Life Company
c/o Advantus Capital Management, Inc.
400 Robert Street North
St. Paul, MN 55101
Sun Life Assurance Company of Canada (U.S.)
One Sun Life Executive Park
Wellesley, MA 02481
Sun Life Assurance Company of Canada
One Sun Life Executive Park
Wellesley, MA 02481
Sun Life Insurance and Annuity Company of New York
One Sun Life Executive Park
<PAGE>
Wellesley, MA 02481
General Electric Capital Assurance Company
601 Union Street, Suite 1500
Seattle, WA 98101
The Lincoln National Life Insurance Company
c/o Lincoln Investment Management, Inc.
200 East Berry Street
Fort Wayne, IN 46802
ACACIA Life Insurance Company
c/o Ameritas Investment Advisors, Inc.
5900 "O" Street
Lincoln, NE 68510-2234
American Steel & Wire Corporation
1000 Urban Center Drive
Suite 300
Birmingham, AL 35242
Birmingham East Coast Holdings, LLC
1000 Urban Center Drive
Suite 300
Birmingham, AL 35242
Norfolk Steel Corporation
1000 Urban Center Drive
Suite 300
Birmingham, AL 35242
Port Everglades Steel Corporation
1000 Urban Center Drive
Suite 300
Birmingham, AL 35242
<PAGE>
Birmingham Recycling Investment Company
1000 Urban Center Drive
Suite 300
Birmingham, AL 35242
Midwest Holdings, Inc.
1000 Urban Center Drive
Suite 300
Birmingham, AL 35242
Cumberland Recycles, LLC
1000 Urban Center Drive
Suite 300
Birmingham, AL 35242
