1
EXHIBIT 4.1
CONFORMED COPY
============================================================
AMENDED AND RESTATED CREDIT AGREEMENT
dated as of August 16, 1988
As Amended and Restated as of April 30, 1996
Among
NORTHWESTERN STEEL AND WIRE COMPANY
(as successor, by merger, to NW Acquisition Corporation),
NORTHWESTERN STEEL AND WIRE COMPANY
(formerly known as H/N Steel Company, Inc.)
THE LENDERS NAMED HEREIN
and
CHEMICAL BANK,
as Administrative Agent and as Collateral Agent
[CS&M Ref. No.: 6700-315]
============================================================
2
TABLE OF CONTENTS
Article Section Page
- ------- ------- ----
I. DEFINITIONS .............................. 2
II. THE LOANS ................................ 35
2.01 Revolving Credit Commitments ...... 35
2.02 Rollover Term Loans ............... 35
2.03 Revolving Credit Loans ............ 36
2.04 Notice of Revolving Credit Loans .. 38
2.05 Notes; Repayment of Loans ......... 38
2.06 Interest Elections ............. 40
2.07 Interest on Loans ................. 42
2.08 Fees .............................. 43
2.09 Alternate Rate of Interest ........ 44
2.10 Extension, Termination and
Reduction of Revolving Credit
Commitments .................. 44
2.11 Interest on Overdue Amounts ....... 48
2.12 Prepayment of Loans ............... 48
2.13 Change in Circumstances ........... 54
2.14 Yield-Maintenance Premium ......... 56
2.15 Break Funding Losses .............. 58
2.16 Pro Rata Treatment ................ 59
2.17 Sharing of Setoffs ................ 59
2.18 Letters of Credit ................. 60
2.19 Taxes.............................. 68
2.20 Mitigation Obligations:
Replacement of Lenders ....... 69
III. REPRESENTATIONS AND WARRANTIES ................ 70
3.01 Organization, Corporate Powers .... 70
3.02 Authorization ..................... 70
3.03 Governmental Approvals ............ 71
3.04 Enforceability .................... 71
3.05 Financial Statements............... 71
3.06 Title to Properties; Receivables... 72
3.07 Litigation; Compliance with Laws;
etc. ......................... 73
3.08 Agreements ........................ 74
3.09 Federal Reserve Regulations ....... 74
3.10 Security Documents ................ 74
3.11 Taxes ............................. 75
3.12 ERISA ............................. 75
3.13 No Material Misstatements ......... 75
3
3.14 Investment Company Act; Public
Utility Holding Company Act .. 76
3.15 Solvency .......................... 76
3.16 Labor Matters ..................... 76
3.17 Employment and Management
Agreements ................... 77
3.18 Environmental Matters ............. 77
IV. CONDITIONS OF EFFECTIVENESS AND
LENDING ..................................... 78
4.01 All Events ........................ 78
4.02 Effectiveness ..................... 78
V. AFFIRMATIVE COVENANTS ......................... 82
5.01 Corporate Existence ............... 82
5.02 Businesses and Properties ......... 82
5.03 Insurance ......................... 83
5.04 Obligations and Taxes ............. 83
5.05 Financial Statements; Reports ..... 84
5.06 Litigation and Other Notices ...... 85
5.07 ERISA and Environmental Matters ... 86
5.08 Maintaining Records; Access to
Properties and Inspections ... 87
5.09 Use of Proceeds ................... 87
5.10 Collateral for the Obligations .... 87
5.11 Further Assurances ................ 88
5.12 Fiscal Year; Accounting ........... 88
5.13 Business Notices .................. 88
VI. NEGATIVE COVENANTS ............................ 89
6.01 Indebtedness ...................... 89
6.02 Liens ............................. 90
6.03 No Guarantees ..................... 92
6.04 Sale and Lease-Back Transactions .. 92
6.05 Acquisitions, Consolidations,
Mergers and Sales of Assets .. 93
6.06 Investments, Loans and Advances ... 94
6.07 Transactions with Affiliates ...... 95
6.08 Line of Business .................. 95
6.09 Credit Standards .................. 95
6.10 Dividends ......................... 95
6.11 Priority of Loan Payments ......... 95
6.12 Amendment of Constituent Documents
and Certain Agreements ....... 96
6.13 Plan of Liquidation, etc. ......... 96
4
6.14 Current Ratio ..................... 96
6.15 Fixed Charge Coverage Ratio ....... 96
6.16 No Subsidiaries ................... 96
6.17 Capital Expenditures .............. 97
6.18 Leverage Ratio .................... 98
VII. EVENTS OF DEFAULT ............................. 98
VIII. THE ADMINISTRATIVE AGENT AND THE COLLATERAL
AGENT ......................................... 102
IX. MISCELLANEOUS ................................. 106
9.01 Notices ........................... 106
9.02 Survival of Agreement ............. 106
9.03 Successors and Assigns;
Participations ............... 107
9.04 Expenses; Indemnity ............... 111
9.05 Right of Setoff ................... 112
9.06 Applicable Law; Submission to
Jurisdiction; Service of
Process ...................... 113
9.07 Payments on Business Days ......... 114
9.08 Waivers; Amendments ............... 114
9.09 Limitation of Interest ............ 116
9.10 Severability ...................... 116
9.11 Counterparts ...................... 117
9.12 Headings .......................... 117
9.13 Confidentiality ................... 117
9.14 Entire Agreement; Waiver of
Jury Trial, etc. ............. 118
9.15 Effectiveness; Original Credit
Agreement .................... 119
9.16 Joint Obligations ................. 119
9.17 Release of NWS/Texas .............. 120
5
Exhibits
Form of Revolving Credit Note Exhibit A-1
Form of Rollover Term Note Exhibit A-2
Form of Assignment and Acceptance Exhibit B
Form of Borrowing Base Certificate Exhibit C
Request for Extension of Revolving Exhibit D
Credit Maturity Date
Form of Opinion Exhibit E
Form of Administrative Questionnaire Exhibit F
Amended and Restated Security Agreement Exhibit G
Amended and Restated Pledge Agreement Exhibit H
Form of Guarantee Agreement Exhibit I
Form of Indemnity, Subrogation and Exhibit J
Contribution Agreement
Schedules
Guarantors Schedule 1.01(a)
Revolving Credit Commitments Schedule 2.01
Outstanding Rollover Term Loans Schedule 2.02
Governmental Approvals Schedule 3.03
Receivables Schedule 3.06
Filings Schedule 3.10
Liens Schedule 6.02
6
AMENDED AND RESTATED CREDIT AGREEMENT dated
as of August 16, 1988, as amended and restated as of
April 30, 1996, among NORTHWESTERN STEEL AND WIRE
COMPANY (as successor, by merger, to NW Acquisition
Corporation), an Illinois corporation ("NWS"),
NORTHWESTERN STEEL AND WIRE COMPANY (formerly known
as H/N Steel Company, Inc.), a Texas corporation and
a direct, wholly owned subsidiary of NWS ("NWS/Texas"
and, together with NWS, individually a "Borrower" and
collectively the "Borrowers"), the Lenders (as
defined in Article I), and CHEMICAL BANK, a New York
banking corporation, as issuing bank (in such
capacity, the "Issuing Bank"), as administrative
agent for the Lenders (in such capacity, the
"Administrative Agent") and as collateral agent for
the Lenders (in such capacity, the "Collateral
Agent").
The Borrowers, the Original Lenders and the Administrative
Agent are parties to a Credit Agreement dated as of August 16, 1988, as amended
and restated as of June 21, 1989, as further amended and restated as of July
27, 1992, and as subsequently amended and in effect prior to the effectiveness
of this Agreement (the "Original Credit Agreement"). The Borrowers have
requested that the Lenders, the Administrative Agent, the Collateral Agent and
the Issuing Bank agree to amend and restate the Original Credit Agreement in
order to provide for (a) continuation of the Rollover Term Loans outstanding as
of the Effective Date under and pursuant to the terms of this Agreement,
without any change to the maturity, interest rate or other payment terms
applicable thereto, (b) replacement of the Revolving Credit Commitments under
the Original Credit Agreement with Revolving Credit Commitments hereunder
providing for Revolving Credit Loans to the Borrowers at any time and from time
to time prior to the Revolving Credit Maturity Date, in an aggregate principal
amount at any time outstanding not in excess of $100,000,000, the proceeds of
which shall be used (i) to pay on the Effective Date all indebtedness and other
obligations outstanding under the Original Credit Agreement (other than the
Rollover Term Loans and accrued interest thereon), (ii) to pay fees and
expenses payable in connection with the amendment and restatement of the
Original Credit Agreement and (iii) for working capital and other general
corporate purposes of the Borrowers and their
7
2
Subsidiaries, (c) the issuance of Letters of Credit, in an aggregate face
amount at any time outstanding not in excess of $15,000,000, to support payment
obligations incurred in the ordinary course of business by the Borrowers and
their Subsidiaries and (d) certain other changes to the Original Credit
Agreement. The Lenders, the Administrative Agent, the Collateral Agent and the
Issuing Bank are willing to agree to such amendment and restatement of the
Original Credit Agreement, subject to the terms and conditions hereinafter set
forth. Accordingly, the Borrowers, the Lenders, the Administrative Agent, the
Collateral Agent and the Issuing Bank hereby agree as follows:
I. DEFINITIONS
"ABR Borrowing" shall mean a Borrowing comprised of ABR
Revolving Credit Loans.
"ABR Revolving Credit Loan" shall mean any Revolving Credit
Loan bearing interest at a rate determined by reference to the Alternate Base
Rate in accordance with the provisions of Article II.
"Account Debtor" shall mean any person who is or who may
become obligated to a Borrower or one of its Subsidiaries under, with respect
to, or on account of, an Account.
"Accounts" shall mean any and all rights of the Borrowers and
their Subsidiaries to payment for goods and services sold or leased, including
any such right evidenced by chattel paper, whether due or to become due,
whether or not it has been earned by performance, and whether now or hereafter
acquired or arising in the future, including, without limitation, accounts
receivable from Affiliates.
"Adjusted Indebtedness" shall mean, in respect of NWS and its
consolidated Subsidiaries as at any date of determination, the sum (without
duplication) of all Indebtedness (determined on a consolidated basis) including
without limitation (i) the Senior Notes, (ii) the aggregate amount of Revolving
Credit Exposure at such date (and, if the revolving credit facility under this
Agreement is replaced, in whole or in part, by any other revolving credit
facility, the aggregate amount of loans and letters of credit outstanding
thereunder at such date), and (iii) the aggregate amount of Rollover Term Loans
at such date, including the Capitalized Rollover Interest Amount thereof
8
3
but excluding any portion thereof that is secured by cash collateral or
defeased as provided in Section 2.12.
"Adjusted LIBO Rate" shall mean, with respect to any
Eurodollar Borrowing for any Interest Period, an interest rate per annum
(rounded upwards, if necessary, to the next 1/16 of 1%) equal to the product of
(a) the LIBO Rate in effect for such Interest Period and (b) Statutory
Reserves.
"Adjusted Stockholders' Equity" shall mean, in respect of NWS
and its consolidated Subsidiaries as at any date of determination, the sum of
(i) the sum of capital stock taken at par or stated value, capital in excess of
par or stated value, retained earnings and any other account which, in
accordance with generally accepted accounting principles, constitutes
stockholders's equity, less (ii) treasury stock (to the extent not deducted in
clause (i)) and any minority interest in Subsidiaries, less (iii) the amount of
all assets reflected as goodwill, patents, research and development and all
other assets required to be classified as intangibles in accordance with
generally accepted accounting principles, less (iv) the amount of any write-up
after January 31, 1993, in the value of any asset above the cost or depreciated
cost thereof; provided, however, that "Adjusted Stockholders' Equity" shall be
determined without giving effect to the adoption by NWS of Statement of
Financial Accounting Standard No. 106 or changes in actuarial calculations
resulting from Financial Accounting Standards Nos. 87 and 106.
"Administrative Questionnaire" shall mean an Administrative
Questionnaire in the form of Exhibit F hereto, which each Lender shall complete
and return to the Administrative Agent.
"Affiliate" shall mean any person (including any member of the
immediate family of any such natural person) which directly or indirectly
beneficially owns or controls 5% or more of the total voting power of shares of
capital stock of NWS or any of its Subsidiaries having the right to vote for
directors under ordinary circumstances, any person controlling, controlled by
or under common control with any such person (within the meaning of Rule 405
under the Securities Act of 1933), any director or executive officer of such
person, and any person 5% or more of the total voting power of shares of
capital stock (or equivalent equity interests) of which is directly or
indirectly owned
9
4
or controlled by any director or executive officer (or any member of the
immediate family thereof) of NWS or any of its Subsidiaries.
"Alternate Base Rate" shall mean, for any day, a rate per
annum (rounded upwards, if necessary, to the next 1/100 of 1%) equal to the
greatest of (a) the Prime Rate in effect on such day, (b) the Base CD Rate in
effect on such day plus 1% and (c) the Federal Funds Effective Rate in effect
on such day plus 1/2 of 1%. The term "Prime Rate" shall mean the rate of
interest per annum publicly announced from time to time by Chemical Bank as its
prime rate in effect at its principal office in the City of New York; each
change in the Prime Rate shall be effective on the date such change is publicly
announced as being effective. The term "Base CD Rate" shall mean the sum of
(x) the product of (i) the Three-Month Secondary CD Rate and (ii) Statutory
Reserves and (y) the Assessment Rate. The term "Federal Funds Effective Rate"
shall mean, for any day, the weighted average of the rates on overnight Federal
funds transactions with members of the Federal Reserve System arranged by
Federal funds brokers, as published on the next succeeding Business Day by the
Federal Reserve Bank of New York, or, if such rate is not so published for any
day that is a Business Day, the average of the quotations for the day of such
transactions received by the Administrative Agent from three Federal funds
brokers of recognized standing selected by it. If for any reason the
Administrative Agent shall have determined (which determination shall be
conclusive absent manifest error) that it is unable to ascertain the Base CD
Rate or the Federal Funds Effective Rate or both for any reason, including,
without limitation, the inability or failure of the Administrative Agent to
obtain sufficient quotations in accordance with the terms of the definition
thereof, the Alternate Base Rate shall be determined without regard to clause
(b) or (c), or both, of the definition of Alternate Base Rate above, as
appropriate, until the circumstances giving rise to such inability no longer
exist. Any change in the Alternate Base Rate due to a change in the Prime
Rate, the Base CD Rate or the Federal Funds Effective Rate shall be effective
on the effective date of such change in the Prime Rate, the Base CD Rate or the
Federal Funds Effective Rate, respectively.
"Alternate Currency" shall mean Italian Lire or any other
currency (other than U.S. dollars) approved in writing by the Issuing Bank as
an "Alternate Currency" hereunder.
10
5
"Alternate Currency Letter of Credit" shall mean a Letter of
Credit that provides for payments of drawings thereunder in an Alternate
Currency.
"Applicable Margin" shall mean, for any day, with respect to
any Revolving Credit Loan or with respect to the Letter of Credit Participation
Fees, as the case may be, (i) during the 12-month period commencing on the
Effective Date (x) 2.00% with respect to Eurodollar Revolving Credit Loans and
Letter of Credit Participation Fees and (y) 1.00% with respect to ABR Revolving
Credit Loans and (ii) thereafter, the applicable margin set forth below, based
upon the ratio of Adjusted Indebtedness to Consolidated Cash Flow Available for
Fixed Charges as of the most recent date of determination (determined as
provided below):
Applicable Margin
LC Participation
Eurodollar ABR Fee
Category Ratio Spread Spread Percentage
- -------- -------------- ------- ------ ----------
(1) Greater than 2.75 to 1.00 2.25% 1.25% 2.25%
(2) Greater than 2.25 to 1.00, but less than
or equal to 2.75 to 1.00 2.00% 1.00% 2.00%
(3) Greater than 2.00 to 1.00 but less than or
equal to 2.25 to 1.00 1.75% 0.75% 1.75%
(4) Less than or equal to 2.00 to 1.00 1.25% 0.25% 1.25%
For purposes of determining the Applicable Margin, the ratio of Adjusted
Indebtedness to Consolidated Cash Flow Available for Fixed Charges shall be
determined as of, and any change in the Applicable Margin as a result of such
determination shall be effective on and after, the date of delivery to the
Administrative Agent of the financial statements and certificates required by
Section 5.05(a) or (b) indicating such ratio (based upon Adjusted Indebtedness
as of, and Consolidated Cash Flow Available for Fixed Charges for the
11
6
period of four consecutive fiscal quarters ended on, the date of the most
recent consolidated balance sheet of NWS included in such financial statements)
until the date immediately preceding the next date of delivery of such
financial statements and certificates indicating another such ratio.
Notwithstanding the foregoing (i) at any time during which the Borrowers have
failed to deliver the financial statements and certificates required by Section
5.05(a) or (b) and such failure has continued more than five days after the
date such delivery was required, or (ii) at any time after the occurrence and
during the continuance of an Event of Default, the ratio of Adjusted
Indebtedness to Consolidated Cash Flow Available for Fixed Charges shall be
deemed to be in category (1) for purposes of determining the Applicable Margin.
"Applicable Percentage" of any Lender at any time shall mean
the percentage of the Total Revolving Credit Commitment represented by such
Lender's Revolving Credit Commitment.
"Assessment Rate" shall mean for any date the annual rate
(rounded upwards, if necessary, to the next 1/100 of 1%) most recently
estimated by the Administrative Agent as the then current net annual assessment
rate that will be employed in determining amounts payable by Chemical Bank to
the Federal Deposit Insurance Corporation (or any successor thereto) for
insurance by such Corporation (or such successor) of time deposits made in
dollars at Chemical Bank's domestic offices.
"Assignment and Acceptance" shall mean an assignment and
acceptance entered into by a Lender and an assignee, and accepted by the
Administrative Agent, in the form of Exhibit B hereto or such other form as
shall be approved by the Administrative Agent.
"Board" shall mean the Board of Governors of the Federal
Reserve System of the United States of America.
"Borrowing" shall mean a group of Revolving Credit Loans of a
single Type made by the Lenders on a single date and as to which a single
Interest Period is in effect.
"Borrowing Base" shall mean, at any time, an amount equal to
the sum of (a) 85% of the unpaid aggregate amount of all Eligible Accounts
Receivable of NWS and its Subsidiaries plus (b) 55% of the Eligible Inventory
Value of
12
7
Eligible Inventory (excluding steel plant supplies and rolling stock) plus (c)
25% of the Eligible Inventory Value of Eligible Inventory consisting of steel
plant supplies and rolling stock; provided that, at any time, the Eligible
Inventory Value component of the Borrowing Base (the sum of the amounts
determined pursuant to clauses (b) and (c) above) shall not comprise more than
50% of the Borrowing Base in effect at such time. The Borrowing Base at any
time shall be determined by reference to the most recent Borrowing Base
Certificate delivered to the Administrative Agent, absent any error in such
Borrowing Base Certificate as of the date delivered.
"Borrowing Base Certificate" shall mean a certificate in the
form of Exhibit C hereto, duly completed and executed by a Financial Officer of
each Borrower accompanied by an accounts receivable aging schedule
substantially in the form set forth in such Exhibit C.
"Business Day" shall mean any day other than a Saturday, Sunday or
legal holiday in the State of New York or Illinois, on which banks are open for
substantially all their banking business; provided, however, that when used in
connection with a Eurodollar Revolving Credit Loan, the term "Business Day"
shall also exclude any day on which banks are not open for dealing in dollar
deposits in the London interbank market.
"Capital Expenditure Deduction" shall mean, for any period, an
amount equal to (a) the aggregate amount of Capital Expenditures made by NWS
and its consolidated Subsidiaries during such period (net of the amount of
Indebtedness, other than Indebtedness hereunder, incurred to finance any such
Capital Expenditures) plus (b) the aggregate amount of Capital Expenditures
that, as of the end of such period, NWS and its consolidated Subsidiaries shall
have committed, pursuant to binding agreements as evidenced by issued purchase
orders, to make within three months after the end of such period and that NWS
shall, at its option, elect (by specifying such amounts in reasonable detail in
the certificate delivered pursuant to Section 2.12(e) regarding the calculation
of Excess Cash Flow for such period) to include as a "Capital Expenditure
Deduction" for such period, minus (c) the aggregate amount, if any, included in
the calculation of "Capital Expenditure Deduction" pursuant to clause (b) above
for the immediately preceding period minus (d) the aggregate amount of Capital
Expenditures made by NWS and its consolidated Subsidiaries
13
8
during such period in excess of the amount that would have been permitted
during such period under Section 6.17 (disregarding for this purpose any
increases in the amount of Capital Expenditures permitted under Section 6.17
pursuant to clauses (i) and (ii) of the proviso therein); provided, however,
that the aggregate "Capital Expenditure Deduction" for any period shall not
exceed the aggregate amount of Capital Expenditures permitted during such
period under Section 6.17 (disregarding for these purposes any increases in the
amount of Capital Expenditures permitted under Section 6.17 pursuant to clauses
(i) and (ii) of the proviso therein).
"Capital Expenditures" shall mean, for any person in any
period, all amounts that would, in accordance with generally accepted
accounting principles consistently applied, be included as additions to
property, plant and equipment or as other capital expenditures, in each case on
a consolidated balance sheet for such person, excluding any such amounts
representing expenditures (a) made with insurance proceeds to repair or replace
property that shall have suffered a casualty, (b) in respect of interest
payments that are capitalized (rather than expensed) or (c) consisting of
consideration paid in connection with a Permitted Acquisition.
"Capital Stock" of any person means any and all shares,
interests, rights to purchase, warrants, options, participations or other
equivalents of or interests in (however designated) equity of such persons,
including any preferred stock, but excluding any debt securities convertible in
such equity.
"Capitalized Rollover Interest Amount" of any Rollover Term
Loan shall mean the portion of the outstanding principal amount of such
Rollover Term Loan representing the amount of interest that has been
capitalized and added to the principal of such Rollover Term Loan pursuant to
Section 2.07 of the Original Credit Agreement.
"Capital Lease Obligation" shall mean, as to any person, the
obligations of such person to pay rent or other amounts under a lease of (or
other agreement conveying the right to use) real and/or personal property which
obligations are required to be classified and accounted for as a capital lease
on a balance sheet of such person under generally accepted accounting
principles and, for purposes of this Agreement, the amount of such obligations
shall be the
14
9
capitalized amount thereof, determined in accordance with generally accepted
accounting principles.
"Cash Available for Principal Payments" shall mean, for any
period, the Net Income of NWS and its Subsidiaries during such period,
consolidated and determined in accordance with generally accepted accounting
principles, plus, without duplication, (i) the amount of all depreciation,
amortization, stock appreciation right expense and similar noncash charges
deducted from income in determining such Net Income, (ii) the amount of the
deduction from income for such period attributable to the ESOPContributions,
(iii) the amount by which the deferred pension liabilities, the deferred taxes
or the post employment benefit liabilities of NWS and its Subsidiaries
increased from the respective amounts as of the end of the previous period,
(iv) the amount by which the Working Capital of NWS and its Subsidiaries
decreased from the Working Capital of NWS and its Subsidiaries at the end of
the previous period, and (v) the amount of all cash deposits and prepaid costs
of the type referred to in (e) below that were refunded to NWS and its
Subsidiaries during such period and not included in income in determining such
Net Income minus, without duplication, (a) the amount by which the deferred
pension liabilities, the deferred taxes or post- employment benefit liabilities
of NWS and its Subsidiaries decreased from the respective amounts as of the end
of the previous period, (b) the amount by which the Working Capital of NWS and
its Subsidiaries increased from the Working Capital of NWS and its Subsidiaries
at the end of the previous period, (c) the Capital Expenditure Deduction for
such period, (d) the amount of interest and fees paid in cash by NWS and its
Subsidiaries during such period and capitalized, rather than deducted in
determining such Net Income, (e) deposits to secure environmental and workers'
compensation self insurance privileges and other similar deposits, and any
prepaid costs, but in each case only to the extent made in cash during such
period and not deducted in determining such Net Income, (f) the amount paid by
NWS and its Subsidiaries to management employees as reimbursement of their tax
liability attributable to stock appreciation rights, to the extent paid in cash
during such period and not deducted in determining such Net Income, (g) the
amount of any other noncash items included in income in determining such Net
Income, and (h) such other items as shall be requested from time to time by NWS
to be deducted in determining Cash Available for Principal Payments and
approved in writing by the Required Lenders; provided that
15
10
(1) any gain or loss resulting from any Prepayment Event shall be excluded from
such Net Income (to the extent included therein) in determining Cash Available
for Principal Payments and (2) in the event of any closure, sale, lease or
other disposition of the Houston Facility, any increase or decrease in Working
Capital reasonably attributable to such event shall be disregarded for purposes
of clauses (iv) and (b) above.
A "Change in Control" shall be deemed to have occurred if (a)
a majority of the seats (other than vacant seats) on the board of directors of
NWS shall at any time after the Effective Date have been occupied by persons
who were neither (i) nominated by Kohlberg & Co., any of its affiliates or the
board of directors of NWS, nor (ii) appointed by directors so nominated; (b)
any person or group other than Kohlberg & Co. and its affiliates shall
otherwise directly or indirectly Control NWS; (c) Kohlberg & Co., together with
its affiliates, shall for any reason cease to beneficially own shares of Common
Stock representing at least 20% of the aggregate ordinary voting power
represented by the issued and outstanding capital stock of NWS; (d) a "Change
of Control", as defined in the Senior Note Documents, occurs; or (e) any person
or group (within the meaning of Rule 13d-5 of the Securities Exchange Act of
1934 as in effect on the Effective Date), other than Kohlberg & Co. and its
affiliates, shall own directly or indirectly, beneficially or of record, shares
representing more than 30% of the aggregate ordinary voting power represented
by the issued and outstanding capital stock of NWS.
"Change in Law" means (a) the adoption of any law, rule or
regulation after the Effective Date, (b) any change in any law, rule or
regulation or in the interpretation or application thereof after the Effective
Date or (c) compliance by any Lender (or by any lending office of such Lender
or by such Lender's holding company, if any) with any request or directive
(whether or not having the force of law) of any Governmental Authority made or
issued after the Effective Date.
"Charges" shall have the meaning assigned such term in Section
9.09.
"Code" shall mean the Internal Revenue Code of 1986, as
amended.
16
11
"Collateral" shall have the meaning assigned to such term in
the Security Agreement and Pledge Agreement and shall also include the
Mortgaged Property.
"Collateral Agent" shall mean Chemical Bank, as collateral
agent for the Lenders under the Security Documents.
"Commitment" shall mean, with respect to each Lender, the sum
of (i) its Rollover Term Commitment, as defined in the Original Credit
Agreement, and (ii) its Revolving Credit Commitment. The Commitments referred
to in clause (i) above terminated in accordance with the Original Credit
Agreement.
"Commitment Fee" shall have the meaning assigned to such term
in Section 2.08(a).
"Common Stock" shall mean the Common Stock, par value $.01 per
share, of NWS.
"Consolidated Cash Flow Available for Fixed Charges" shall
have the meaning assigned thereto in the Senior Note Documents, as in effect on
the date of issuance of the Senior Notes and disregarding any subsequent
amendment, modification or termination of the Senior Note Documents.
"Consolidated Fixed Charges" shall have the meaning assigned
thereto in the Senior Note Documents, as in effect on the date of issuance of
the Senior Notes and disregarding any subsequent amendment, modification or
termination of the Senior Note Documents.
"Control" shall mean the possession, directly or indirectly,
of the power to direct or cause the direction of the management or policies of
a person, whether through the ownership of voting securities, by contract or
otherwise, and the terms "Controlling" and "Controlled" shall have meanings
correlative thereto.
"Current Assets" shall mean, as at any date of determination,
the total assets which would properly be classified as consolidated current
assets of NWS and its Subsidiaries in accordance with generally accepted
accounting principles.
17
12
"Current Liabilities" shall mean, as at any date of
determination, the total liabilities which would properly be classified as
consolidated current liabilities of NWS and its Subsidiaries (other than
current liabilities relating to long-term Indebtedness) in accordance with
generally accepted accounting principles.
"Dollar Equivalent" shall mean, on or as of any particular
date with respect to an amount in an Alternate Currency, the amount in U.S.
dollars, as conclusively determined by the Administrative Agent, which is
required for the Administrative Agent to purchase such Alternate Currency
amount on or as of such date on the basis of the spot exchange rate therefor in
the interbank currency market where the foreign currency and exchange
operations of the Administrative Agent are customarily conducted with respect
to such Alternate Currency.
"Effective Date" shall mean the date on which this Agreement
becomes effective in accordance with Sections 4.02 and 9.15.
"Eligible Accounts Receivable" shall mean at the time of any
determination thereof all Accounts (exclusive of Accounts arising from
transactions between NWS or any of its Subsidiaries, on the one hand, and any
Subsidiary or Affiliate of NWS on the other hand) that meet the following
criteria for an eligible Account at the time of creation and continue to meet
the same at all times relevant to such determination: (i) all payments on the
Account have been invoiced and are due not more than 45 days after the date of
the invoice rendered by NWS or its Subsidiary, except in the case of (A) Wire
Products Other Accounts, for which all payments on such Accounts shall be due
not more than 60 days after the date of invoice so rendered, and (B) Wire
Products Dating Program Accounts (which shall be considered Eligible Accounts
Receivable only to the extent such Accounts do not exceed $7,000,000 in the
aggregate at the time of such determination), for which all payments on such
Accounts shall be due not more than 120 days after the date of invoice so
rendered; (ii) the Account, and at least 50% of the aggregate amount of all
Accounts from the same Account Debtor, are not (A) more than 120 days past the
invoice date in the case of the Wire Products Dating Program Accounts or (B)
more than 90 days past the invoice date in the case of all other Accounts, in
each case, determined with reference to the date which the invoice rendered by
NWS or its Subsidiary to the Account Debtor specifies as the date on
18
13
which such payment with respect to the Account is due or, if no such date is
specified in such invoice, the date of such invoice; (iii) the Account arose
from a completed, outright and lawful sale of goods by or on behalf of NWS or
one of its Subsidiaries; (iv) the Account is free and clear of all Liens of any
nature whatsoever other than any security interest deemed to be held by NWS or
its Subsidiary or any security interest created pursuant to the Security
Documents or permitted by Section 6.02(d); (v) the Account constitutes an
"account" or "chattel paper" within the meaning of the Uniform Commercial Code
of the state in which the Account is located; (vi) the Account Debtor has not
asserted that the Account, and NWS and each Subsidiary is not aware that the
Account, is subject to any setoff, net-out contract, offset (it being
understood that, for this purpose, the Accounts from an Account Debtor shall be
deemed to be subject to offset to the extent of the amount of accounts payable
or other monetary liabilities owed by NWS or any Subsidiary thereof to the
Account Debtor), deduction, dispute, credit, counterclaim or other defense
arising out of the transactions represented by the Accounts or independently
thereof and the Account Debtor has not objected to its liability thereon or
returned any of the goods from the sale out of which the Account arose, except
for complaints made or goods returned in the ordinary course of business for
which, in the case of goods returned, goods of equal or greater value have been
shipped in return; (vii) the Account arose in the ordinary course of business
of NWS or one of its Subsidiaries and, to the best knowledge of NWS after
reasonable investigation, no event of death, bankruptcy or insolvency (or
notice thereof) with respect to the Account Debtor has occurred (or been
received); (viii) the Account Debtor is not the United States government or the
government of any state or political subdivision thereof or therein, or any
agency or department of any thereof; (ix) the Account Debtor is a United States
person or an obligor in the United States; (x) the Account complies with all
material requirements of all applicable laws and regulations, whether Federal,
state or local (including, without limitation, usury laws and laws, rules and
regulations relating to truth in lending, fair credit billing, fair credit
reporting, equal credit opportunity, fair debt collection practices and
privacy); (xi) to the knowledge of NWS after reasonable investigation, the
Account is in full force and effect and constitutes a legal, valid and binding
obligation of the Account Debtor enforceable in accordance with its terms,
except as the enforceability thereof may be limited by bankruptcy, insolvency,
moratorium and other similar laws
19
14
affecting the enforcement of creditors' rights generally and may be subject to
general equity principles; (xii) the Account is denominated in and provides for
payment by the Account Debtor in United States dollars; (xiii) the Account has
not been and is not required to be charged off or written off as uncollectible
in accordance with generally accepted accounting principles or the customary
business practice of NWS or its Subsidiaries; and (xiv) the Collateral Agent on
behalf of the Lenders possesses a valid first priority (except for Permitted
Encumbrances permitted under clauses (c) and (d) of Section 6.02) perfected
security interest in such Account as security for payment of the Obligations.
Notwithstanding the foregoing, all Accounts of any single Account Debtor which,
in the aggregate, exceed 10% of the total Eligible Accounts Receivables
(without taking into account the deduction for such Account or such Accounts
which would be disqualified by this sentence) at the time of any such
determination shall be deemed not to be Eligible Accounts Receivables to the
extent of such excess; provided, however, that, with the written consent of the
Required Lenders, the Accounts of any single Account Debtor relating to
semifinished steel products may, in the aggregate, constitute up to 20% of the
total Eligible Accounts Receivables.
"Eligible Assignee" shall mean a Qualified Lender which is (i)
a commercial bank organized under the laws of the United States, or any State
thereof, and having total assets in excess of $1,000,000,000; (ii) a savings
and loan association or savings bank organized under the laws of the United
States, or any State thereof, and having a net worth of at least $100,000,000,
calculated in accordance with generally accepted accounting principles; (iii) a
commercial bank organized under the laws of any other country which is a member
of the OECD, or a political subdivision of any such country, and having total
assets in excess of $1,000,000,000, provided that such bank is acting through a
branch or agency located in the country in which it is organized or another
country which is also a member of the OECD; (iv) the central bank of any
country which is a member of the OECD; (v) any investment company, insurance
company or similar financial institution organized under the laws of the United
States approved by the Administrative Agent; and (vi) any Lender.
"Eligible Inventory" shall mean at the time of any
determination thereof (a) all inventory of finished goods, salable in the
ordinary course of business of NWS and its
20
15
Subsidiaries, (b) semifinished steel inventory and work-in-progress inventory
of the Wire Products Division, (c) scrap inventory of NWS and its Subsidiaries,
and (d) supplies, including, without limitation, refractories, electrodes,
alloys and chemicals (but excluding all supplies relating to the Wire Products
Division, other than zinc), but in each case only to the extent (i) the
Collateral Agent on behalf of the Lenders possesses a valid first priority
(except for Permitted Encumbrances permitted under clauses (c) and (d) of
Section 6.02) perfected security interest in such inventory as security for
payment of the Obligations and (ii) such inventory is not subject to any Lien
permitted under clause (i) of Section 6.02.
"Eligible Inventory Value" shall mean at the time of any
determination thereof the lower of cost or posted market value of the Eligible
Inventory at such time, net of inventory reserves, determined on a basis
consistent with the financial statements referred to in Section 3.05.
"Employee Stock Option Plan" shall mean the Employee Stock
Purchase and Option Plan as described in the NWS 1995 Form 10-K.
"Environmental Laws" shall mean all laws, rules, regulations,
codes, ordinances, orders, decrees, judgments, injunctions, notices or binding
agreements issued, promulgated or entered into by any Governmental Authority,
relating in any way to the environment, preservation or reclamation of natural
resources, the management, release or threatened release of any Hazardous
Material or to health and safety matters.
"Environmental Liability" shall mean any liability, accrued or
contingent (including any liability for damages, costs of environmental
remediation, fines, penalties or indemnities), of either Borrower or any
Subsidiary directly or indirectly resulting from or based upon (a) violation of
any Environmental Law, (b) the generation, use, handling, transportation,
storage, treatment or disposal of any Hazardous Materials, (c) exposure to any
Hazardous Materials, (d) the release or threatened release of any Hazardous
Materials into the environment or (e) any contract, agreement or other
consensual arrangement pursuant to which liability is assumed or imposed with
respect to any of the foregoing.
21
16
"Environmental Permit" shall mean any permit, approval,
authorization, certificate, license, variance, filing or permission required by
or from any Governmental Authority pursuant to any Environmental Law.
"ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as the same may be amended from time to time.
"ERISA Affiliate" shall mean any trade or business (whether or
not incorporated) that, together with the Borrower, is treated as a single
employer under Section 414(b) or (c) of the Code, or solely for purposes of
Section 302 of ERISA and Section 412 of the Code, is treated as a single
employer under Section 414 of the Code.
"ERISA Event" shall mean (a) any "reportable event", as
defined in Section 4043 of ERISA or the regulations issued thereunder with
respect to a Plan; (b) the existence with respect to any Plan of an
"accumulated funding deficiency" (as defined in Section 412 of the Code or
Section 302 of ERISA), whether or not waived; (c) the filing pursuant to
Section 412(d) of the Code or Section 303(d) of ERISA of an application for a
waiver of the minimum funding standard with respect to any Plan; (d) the
incurrence of any liability under Title IV of ERISA with respect to the
termination of any Plan or the withdrawal or partial withdrawal of either
Borrower or any of its ERISA Affiliates from any Plan or Multiemployer Plan;
(e) the receipt by either Borrower or any ERISA Affiliate from the PBGC or a
plan administrator of any notice relating to the intention to terminate any
Plan or Plans or to appoint a trustee to administer any Plan; or (f) the
receipt by either Borrower or any ERISA Affiliate of any notice concerning the
imposition of Withdrawal Liability or a determination that a Multiemployer Plan
is, or is expected to be, insolvent or in reorganization, within the meaning of
Title IV of ERISA.
"ESOP" shall mean the Northwestern Steel and Wire Company
Employee Stock Ownership Plan, as in effect on August 16, 1988, with such
amendments thereto as are required to comply with applicable law or as not
prohibited under this Agreement, and the trust forming a part thereof and its
successors.
22
17
"ESOP Contributions" shall mean, with respect to any period,
the aggregate amount of all contributions made by NWS to the ESOP with respect
to such period.
"ESOP Shares" shall mean the shares of capital stock purchased
by the Trustee on behalf of the ESOP pursuant to the ESOP Stock Purchase
Agreement, as converted pursuant to the merger of NWS in 1988 and reclassified
into Common Stock pursuant to the Recapitalization Transactions.
"ESOP Stock Purchase Agreement" shall mean the Stock Purchase
Agreement dated as of August 16, 1988, between NWS and the Trustee on behalf of
the ESOP providing for the purchase by the Trustee on behalf of the ESOP of the
ESOP Shares for an aggregate purchase price of $25,000,000.
"Eurodollar Borrowing" shall mean a Borrowing comprised of
Eurodollar Revolving Credit Loans.
"Eurodollar Revolving Credit Loan" shall mean any Revolving
Credit Loan bearing interest at a rate determined by reference to the Adjusted
LIBO Rate in accordance with the provisions of Article II.
"Event of Default" shall have the meaning assigned such term
in Article VII.
"Excess Cash Flow" shall mean, for any period, the excess of
Cash Available for Principal Payments for such period over the sum of the
amount of (a) all principal payments made during such period as required
repayments pursuant to the terms of any Indebtedness of NWS and its
Subsidiaries permitted under this Agreement, including Indebtedness under this
Agreement, but excluding (i) any principal repayments made under Section 2.12
with respect to any Loans, (ii) any required principal repayments made in
respect of any Indebtedness to the extent of the proceeds of any Indebtedness
incurred to refinance such principal repayments, and (iii) any required
principal repayments made in respect of any Indebtedness incurred in reliance
upon clause (e) or (g) of Section 6.01, (b) voluntary prepayments of Rollover
Term Loans made during such period and (c) payments made during such period for
the repurchase of shares of Common Stock in accordance with Section 6.10;
provided, however, that for purposes of determining Excess Cash Flow for any
period, there shall be deducted from the foregoing an amount equal to
$5,000,000.
23
18
"Excluded Equity Sales" shall mean the issuance and sale by
NWS of equity securities pursuant to (i) the Management Stock Option Plan, (ii)
the Employee Stock Option Plan, (iii) the 1994 Long Term Incentive Plan (as
described in the NWS 1995 Form 10-K) or (iv) the 1994 Director Stock Plan (as
described in the NWS 1995 Form 10-K).
"Excluded Taxes" shall mean, with respect to the
Administrative Agent, the Collateral Agent, the Issuing Bank, any Lender or any
other recipient of any payment to be made by or on account of any obligation of
the Borrowers hereunder, (a) income or franchise taxes imposed on (or measured
by) its net income by the jurisdiction under the laws of which it is organized,
or the jurisdiction in which its principal office is located or, in the case of
any Lender, in which its applicable lending office is located, (b) any branch
profits taxes imposed by the United States of America and (c) in the case of a
Foreign Lender, any U.S. Federal withholding tax imposed on amounts payable to
such Foreign Lender under this Agreement because of its failure or inability to
comply with Section 2.19(e) or otherwise, unless (and to the extent that) (i)
such withholding tax liability arises or is increased by reason of a Change in
Law occurring after such Foreign Lender becomes a Lender under this Agreement
or (ii) such Foreign Lender's assignor (if any) was entitled, at the time of
assignment, to receive additional amounts from the Borrowers with respect to
such withholding tax liability pursuant to Section 2.19(a).
"Executive Officer" shall mean an executive officer as defined
in Rule 3b-7 of the rules and regulations of the Securities and Exchange
Commission under the Securities and Exchange Act of 1934, as amended.
"Financial Officer" of any corporation shall mean its chief
financial officer, principal accounting officer, treasurer or controller.
"Fixed Rate" shall mean, with respect to each Rollover Term
Loan, the fixed rate of interest per annum that applied to such Rollover Term
Loan immediately prior to the Effective Date. The Administrative Agent shall
maintain a record of the Fixed Rate applicable to each Rollover Term Loan,
which shall be conclusive absent manifest error.
"Fixed Rate Amount" of any Rollover Term Loan shall mean the
portion of the outstanding principal amount
24
19
of such Rollover Term Loan in excess of the Capitalized Rollover Interest
Amount thereof.
"Fixed Rate Prepayment Account" shall have the meaning
assigned to such term in Section 2.12(g).
"Foreign Lender" shall mean any Lender that is organized under
the laws of a jurisdiction other than the United States of America or any State
thereof.
"Governmental Authority" shall mean the government of the
United States of America, any other nation or any political subdivision
thereof, whether state or local, and any agency, authority, instrumentality,
regulatory body, court, central bank or other entity exercising executive,
legislative, judicial, taxing, regulatory or administrative powers or functions
of or pertaining to government.
"Guarantee" shall mean any obligation, contingent or
otherwise, of any person guaranteeing or having the economic effect of
guaranteeing any Indebtedness or obligation of any other person (the "primary
obligor") in any manner, whether directly or indirectly, and including, without
limitation, any obligation of such person, direct or indirect, (i) to purchase
or pay (or advance or supply funds for the purchase or payment of) such
Indebtedness or to purchase (or to advance or supply funds for the purchase of)
any security for the payment of such Indebtedness, (ii) to purchase or lease
property, securities or services for the purpose of assuring the owner of such
Indebtedness of the payment of such Indebtedness, or (iii) to maintain working
capital, equity capital, cash flow, fixed charge coverage (or other coverage
ratio) or any other financial statement condition or liquidity of the primary
obligor so as to enable the primary obligor to pay such Indebtedness; provided,
however, that the term "Guarantee" shall not include endorsements for
collection or deposit, in either case in the ordinary course of business.
"Guarantee Agreement" shall mean the Guarantee Agreement,
substantially in the form of Exhibit I, made by the Guarantors in favor of the
Collateral Agent.
"Guarantors" shall mean NWS/Delaware, the Kentucky Subsidiary
and each other person that becomes a Subsidiary of NWS after the Effective
Date.
25
20
"Hazardous Materials" shall mean all explosive or radioactive
substances or wastes and all hazardous or toxic substances, wastes or other
pollutants, including petroleum or petroleum distillates, asbestos or asbestos
containing materials, polychlorinated biphenyls, radon gas, infectious or
medical wastes and all other substances or wastes of any nature regulated
pursuant to any Environmental Law.
"Houston Facility" shall mean the steel rolling mill and
related real estate located in or near Houston, Texas, acquired by NWS/Texas
from Armco, Inc.
"Impianti Notes" shall mean unsecured promissory notes of NWS
in an aggregate principal amount not exceeding 2,719,294,500.00 Italian Lire
and issued by NWS to Impianti Industriali S.P.A. in consideration of the
acquisition of equipment and machinery to be used by NWS in its business
operations.
"Indebtedness" shall mean, with respect to any person, without
duplication, (a) all obligations of such person for borrowed money, or with
respect to deposits or advances of any kind, (b) all obligations of such person
evidenced by bonds, debentures, notes or similar instruments, (c) all
obligations of such person upon which interest charges are customarily paid,
(d) all obligations of such person under conditional sale or other title
retention agreements relating to property purchased by such person, (e) all
obligations of such person issued or assumed as the deferred purchase price of
property or services (other than trade accounts payable to suppliers and
shippers, incurred in the ordinary course of business and paid when due or
within customary holdback periods), (f) all Indebtedness of others secured by
(or for which the holder of such Indebtedness has an existing right, contingent
or otherwise, to be secured by) any Lien on property owned or acquired by such
person, whether or not the obligations secured thereby have been assumed, (g)
all Capitalized Lease Obligations, (h) all Guarantees of such person, (i) the
outstanding face amount of all letters of credit issued for the account of such
person, (j) the redemption price of all mandatorily redeemable preferred stock
issued after the date hereof of such person and (k) all obligations of such
person in respect of interest rate protection agreements, foreign currency
exchange agreements or other interest or exchange rate hedging arrangements.
The Indebtedness of any person shall include the Indebtedness of any
partnership in which such person is a general partner.
26
21
"Indemnity, Subrogation and Contribution Agreement" shall mean
the Indemnity, Subrogation and Contribution Agreement, substantially in the
form of Exhibit J hereto, among the Borrowers, the Guarantors and the
Collateral Agent.
"Interest Payment Date" shall mean (a) with respect to any
Rollover Term Loan, the last Business Day of each calendar month and the
Rollover Term Loan Maturity Date, (b) with respect to any ABR Revolving Credit
Loan, the last Business Day of each January, April, July and October and the
Revolving Credit Maturity Date and (c) with respect to any Eurodollar Revolving
Credit Loan, the last day of the Interest Period applicable to the Borrowing of
which such Loan is a part and, in the case of a Eurodollar Revolving Credit
Loan with an Interest Period of more than three months' duration, each day that
would have been an Interest Payment Date had successive Interest Periods of
three months' duration been applicable to such Borrowing, and, in addition, the
date of any prepayment or conversion of such Borrowing.
"Interest Period" shall mean, with respect to any Eurodollar
Borrowing, the period commencing on the date of such Borrowing and ending on
the numerically corresponding day (or, if there is no numerically corresponding
day, on the last day) in the calendar month that is 1, 2, 3 or 6 months
thereafter, as the Borrower may elect; provided, however, that (a) if any
Interest Period would end on a day other than a Business Day, such Interest
Period shall be extended to the next succeeding Business Day unless such next
succeeding Business Day would fall in the next calendar month, in which case
such Interest Period shall end on the next preceding Business Day and (b) any
Interest Period pertaining to a Eurodollar Borrowing that commences on the last
Business Day of a calendar month (or on a day for which there is no numerically
corresponding day in the last calendar month of such Interest Period) shall end
on the last Business Day of the last calendar month of such Interest Period.
For purposes hereof, the date of a Eurodollar Borrowing initially shall be the
date on which such Borrowing is advanced and, thereafter, shall be the
effective date of the most recent conversion or continuation of such Borrowing.
"Issuing Bank" shall mean Chemical Bank or any other Lender
that shall agree in writing to act as the issuer of Letters of Credit
hereunder, subject to agreement
27
22
among such Lender and the Borrowers regarding the fees payable to such Lender
pursuant to clause (ii) of Section 2.18(f).
"Kentucky Plant" shall mean the wire mesh plant located in the
State of Kentucky to be constructed, owned and operated by the Kentucky
Subsidiary.
"Kentucky Subsidiary" shall mean Northwestern Steel and Wire
Company - Kentucky, a Delaware corporation and a wholly owned subsidiary of
NWS, established for the purpose of constructing, owning and operating the
Kentucky Plant.
"KNSW" shall mean KNSW Acquisition Company, L.P., a Delaware
limited partnership whose general partner is Kohlberg Associates.
"Kohlberg Associates" shall mean Kohlberg Associates, L.P., a
Delaware limited partnership affiliated with Kohlberg & Co.
"Kohlberg & Co." shall mean Kohlberg & Co., L.P., a Delaware
limited partnership.
"Kohlberg Purchase Agreement" shall mean the Stock Purchase
Agreement dated as of July 27, 1992, between KNSW and NWS.
"Lenders" shall mean the financial institutions listed on
Schedule 2.01 and Schedule 2.02 and any financial institution that has become a
party hereto pursuant to an Assignment and Acceptance, other than any such
financial institution that ceases to be a party hereto pursuant to an
Assignment and Acceptance.
"Letter of Credit" shall mean any letter of credit issued by
the Issuing Bank pursuant to Section 2.18.
"Letter of Credit Disbursement" shall mean a payment or
disbursement made by the Issuing Bank pursuant to a Letter of Credit.
"Letter of Credit Exposure" shall mean at any time the sum of
(i) the aggregate undrawn amount of all outstanding Letters of Credit and (ii)
the aggregate amount of all Letter of Credit Disbursements not yet reimbursed
by the Borrowers as provided in Section 2.18. The Letter of Credit
28
23
Exposure of any Lender at any time shall mean its Applicable Percentage of the
aggregate Letter of Credit Exposure at such time.
"Letter of Credit Participation Fees" shall mean fees payable
pursuant to clause (i) of Section 2.18(f).
"Leverage Ratio" shall mean, as at any date of determination,
the ratio of (i) Adjusted Indebtedness to (ii) the sum of Adjusted Indebtedness
and Adjusted Stockholders' Equity.
"LIBO Rate" shall mean, with respect to any Eurodollar
Borrowing for any Interest Period, the rate (rounded upwards, if necessary, to
the next 1/16 of 1%) at which dollar deposits approximately equal in principal
amount the Administrative Agent's portion of such Eurodollar Borrowing and for
a maturity comparable to such Interest Period are offered to the London office
of the Administrative Agent in immediately available funds in the London
interbank market at approximately 11:00 a.m., London time, two Business Days
prior to the commencement of such Interest Period.
"Lien" shall mean, with respect to any asset, (a) any
mortgage, deed of trust, lien, pledge, encumbrance, charge or security interest
in or on such asset, (b) the interest of a vendor or a lessor under any
conditional sale agreement, capital lease or title retention agreement (or any
financing lease having substantially the same economic effect as any of the
foregoing) relating to such asset and (c) in the case of securities, any
purchase option, call or similar right of a third party with respect to such
securities.
"Loan" shall mean any Revolving Credit Loan or Rollover Term
Loan.
"Loan Documents" shall mean this Agreement, the Notes, the
Guarantee Agreement, the Indemnity, Subrogation and Contribution Agreement and
the Security Documents.
"Loan Parties" shall mean the Borrowers, the Guarantors and
any other Subsidiary that is required to be a party to any Security Document.
"Lockbox Agreement" shall have the meaning assigned such term
in the Security Agreement.
29
24
"Management Stock Option Plan" shall mean the Management Stock
Option Plan as described in the NWS 1995 Form 10-K.
"Management Subscription Agreement" shall mean the Management
Subscription Agreement dated as of July 27, 1992, among NWS and certain
management employees of the Borrowers.
"Margin Stock" shall have the meaning assigned such term in
Regulation U.
"Material Adverse Effect" shall mean (a) a materially adverse
effect on the business, operations, assets, properties or condition, financial
or otherwise, of NWS and its Subsidiaries taken as a whole, (b) a materially
adverse effect on the ability of the Borrowers to perform any of their material
obligations under any Loan Document to which they are parties or (c) material
impairment of the rights or remedies available to or for the benefit of the
Lenders under any Loan Document.
"Maximum Rate" shall have the meaning assigned such term in
Section 9.09.
"Mortgages" shall mean (a) the Mortgage, Security Agreement
and Assignment of Rents dated August 16, 1988, as modified by the Modification
of Mortgage, Security Agreement and Assignment of Rents dated as of June 21,
1989, between NWS and the Collateral Agent, as amended from time to time, (b)
the Deed of Trust, Security Agreement and Assignment of Leases and Rents dated
as of June 21, 1989, between NWS/Texas and the Collateral Agent, as amended
from time to time and (c) the mortgage to be granted by the Kentucky Subsidiary
to the Collateral Agent with respect to the Kentucky Plant as contemplated by
clause (j) of Section 4.02.
"Mortgaged Property" shall have the meaning assigned thereto
in each Mortgage.
"Multiemployer Plan" shall mean a multiemployer plan as
defined in Section 4001(a)(3) of ERISA.
"Net Cash Proceeds" shall have the meaning ascribed thereto in
Section 2.12(d).
"Net Income" with respect to any person for any period shall
mean the aggregate net income (or net deficit)
30
25
of such person for such period equal to net revenues for such period less the
aggregate for such person during such period of, without duplication, (i) cost
of goods sold, (ii) interest expense, (iii) operating expenses, (iv) selling,
general and administrative expenses, (v) taxes, (vi) depreciation, depletion
and amortization of properties and (vii) any other items that are treated as
expenses under generally accepted accounting principles, but excluding from the
definition of Net Income (a) extraordinary gains and losses (provided that
extraordinary gains and losses shall not be excluded from Net Income for
purposes of determining Cash Available for Principal Payments) and (b) any
increase in cost of goods sold or other effect on Net Income resulting from any
write-up in the value of inventory, all computed in accordance with generally
accepted accounting principles.
"Note" or "Notes" shall mean a Revolving Credit Note or
Revolving Credit Notes or a Rollover Term Note or Rollover Term Notes, as the
case may be, of the Borrowers, executed and delivered as provided in Section
2.05.
"NWS" shall have the meaning assigned to such term in the
heading to this Agreement.
"NWS/Delaware" shall mean Northwestern Steel and Wire Company,
a Delaware corporation.
"NWS 1995 Form 10-K" shall mean NWS's Annual Report on Form
10-K for its fiscal year ended July 31, 1995.
"NWS/Texas" shall have the meaning assigned to such term in
the heading to this Agreement.
"Obligations" shall mean the obligations of the Borrowers to
pay principal of and interest on the Notes according to their respective tenor,
purport and effect and to pay the Commitment Fees, Letter of Credit
Participation Fees and to pay all other fees and amounts and to perform all
other obligations under this Agreement, the Notes and the Security Documents,
in each case, as the same may be amended, modified or supplemented, including
without limitation the obligations to perform and observe all covenants and
conditions herein and therein contained and to pay all expenses and
disbursements of the Administrative Agent, the Collateral Agent, the Issuing
Bank and the Lenders or their agents, to pay all reimbursement obligations
(including any annual fee or interest with
31
26
respect thereto) with respect to any Letter of Credit and the fees and expenses
of the attorneys for the Lenders incurred in connection with the execution and
delivery of the Loan Documents or any amendment or modification thereof or
waiver thereunder or exercise of rights or remedies upon any default or Event
of Default thereunder and required to be paid by either Borrower under the
terms of this Agreement or the Security Documents.
"OECD" shall mean the Organization for Economic Cooperation
and Development.
"Original Credit Agreement" shall have the meaning ascribed
thereto in the preamble to this Agreement.
"Original Lenders" shall mean the "Lenders" under, and as
defined in, the Original Credit Agreement immediately prior to the
effectiveness of this Agreement.
"Other Taxes" shall mean any and all present or future stamp
or documentary taxes or any other excise or property taxes, charges or similar
levies arising from any payment made hereunder or from the execution or
delivery of, or otherwise with respect to, this Agreement or any other Loan
Document.
"Permitted Acquisition" shall mean the purchase by NWS of (a)
all (but not less than all) of the outstanding capital stock of another
corporation or (b) the assets and properties of another person comprising a
business, business unit, plant or other facility; provided, however that any
such purchase shall not constitute a "Permitted Acquisition" unless (i)
immediately prior to and after giving effect to such purchase, no Event of
Default, and no event or condition that with notice, lapse of time or both
would constitute an Event of Default, shall have occurred and be continuing,
(ii) such purchase will not result in NWS or any of its Subsidiaries engaging
in any business not permitted by Section 6.08 and (iii) after giving effect to
such purchase, the aggregate amount of consideration for all "Permitted
Acquisitions" shall not exceed the sum of (A) $15,000,000, plus (B) 50% of the
excess, if any, of the amount of Net Cash Proceeds received after the Effective
Date from Prepayment Events described in clauses (2) and (3) of the definition
of the term "Prepayment Event" over the sum of (x) the aggregate principal
amount of Rollover Term Loans prepaid with respect to such Prepayment Events
pursuant to Section 2.12(d) or deposited or applied pursuant
32
27
to Section 2.12(g) in lieu of such prepayment and (y) the amount by which
Capital Expenditures are increased for any fiscal year in reliance upon clause
(i) of the proviso to Section 6.17 (or in reliance upon clause (iii) of such
proviso, to the extent attributable to such clause (i)), plus (C) the excess,
if any, of the cumulative amount of Excess Cash Flow for each fiscal year of
NWS ending after July 31, 1996, over the sum of (x) the aggregate principal
amount of Rollover Term Loans prepaid pursuant to Section 2.12(e) by reference
to such Excess Cash Flow and (y) the amount by which Capital Expenditures are
increased for any fiscal year in reliance upon clause (ii) of the proviso to
Section 6.17 (or in reliance upon clause (iii) of such proviso, to the extent
attributable to such clause (ii)).
"Permitted Encumbrances" shall mean those Liens expressly
permitted by Section 6.02 of this Agreement.
"Permitted Equity Purchases" shall mean (a) repurchases by NWS
of shares of Common Stock from deceased or retired employees, but only to the
extent required by the ESOP Stock Purchase Agreement (as in effect immediately
prior to the Recapitalization Transactions) or by the Code or ERISA and the
regulations thereunder, and then only after 10 days' prior notice to the
Administrative Agent, (b) repurchases by NWS of Common Stock from former
holders of NWS's Class B Common Shares pursuant to Section 7 of the
Stockholders Agreement referred to in and attached as Exhibit F to the Kohlberg
Purchase Agreement, and (c) repurchases by NWS of equity securities pursuant to
and in accordance with the Employee Stock Option Plan, the Management Stock
Option Plan or the Management Subscription Agreement; provided, however, that
(i) repurchases shall be permitted under the foregoing clause (b) only to the
extent that the aggregate cumulative consideration paid by NWS in connection
therewith shall not exceed the aggregate cash proceeds theretofore received by
NWS from Excluded Equity Sales pursuant to the Employee Stock Option Plan and
(ii) repurchases shall not be permitted under the foregoing clause (c) in
excess of $250,000 during any fiscal year of NWS (plus the excess, if any, of
the amount of such repurchases permitted in the preceding fiscal year over the
amount of such repurchases made in such preceding fiscal year).
33
28
"Permitted Investments" shall mean:
(i) direct obligations of, or obligations the principal of and
interest on which are unconditionally guaranteed by, the United States
of America (or by any agency thereof to the extent such obligations
are backed by the full faith and credit of the United States of
America), which are readily marketable and which mature within one
year from the date of acquisition thereof;
(ii) commercial paper of any corporation with a maturity not
in excess of one year from the date of acquisition thereof and having,
at such date of acquisition, a credit rating by Standard & Poor's
Ratings Group of A1 (or the then equivalent) or better or by Moody's
Investors Service, Inc., of P1 (or the then equivalent) or better; and
(iii) negotiable or nonnegotiable time certificates of deposit
and time deposits with a maturity not in excess of one year from the
date of the acquisition thereof, issued by or placed with, and money
market deposit accounts issued or offered by, any bank which (a) has a
combined capital and surplus and undivided profits of not less than
$200,000,000 and (b) all the rated senior long-term debt securities of
which continue to be rated at least A by either Moody's Investors
Service, Inc. or Standard & Poor's Rating Group and at least one
series of senior long-term debt securities of which continues to be
outstanding and so rated.
"person" shall mean any natural person, corporation, business
trust, association, company, joint venture, partnership or government or any
agency or political subdivision thereof.
"Plan" shall mean any employee pension benefit plan (other
than a Multiemployer Plan) subject to the provisions of Title IV of ERISA or
Section 412 of the Code or Section 302 of ERISA, and in respect of which either
Borrower or any ERISA Affiliate is (or, if such plan were terminated, would
under Section 4069 of ERISA be deemed to be) an "employer" as defined in
Section 3(5) of ERISA.
"Pledge Agreement" shall mean the Amended and Restated Pledge
Agreement between NWS, the Subsidiaries
34
29
named therein and the Collateral Agent, substantially in the form of Exhibit H
hereto, as amended or supplemented from time to time.
"Prepayment Determination Date" shall have the meaning
assigned thereto in Section 2.12(e).
"Prepayment Event" shall have the meaning assigned thereto in
Section 2.12(d).
"Process Agent" shall have the meaning assigned thereto in
Section 9.06(b).
"Qualified Lender" shall mean any bank, regulated investment
company, insurance company or corporation actively engaged in the business of
lending money as described in Section 133(a) of the Code as in effect on August
16, 1988, or, in the case of an assignment pursuant to Section 9.03, as in
effect on the date of the assignment.
"Recapitalization Transactions" shall mean the execution,
delivery and performance of the Kohlberg Purchase Agreement, including, without
limitation, (i) the amendment and restatement of NWS's certificate of
incorporation and by-laws as contemplated by the Kohlberg Purchase Agreement,
(ii) the reclassification of NWS's outstanding common stock into a single class
of Common Stock, (iii) the issuance by NWS and the purchase by KNSW of shares
of Common Stock representing a majority of the outstanding shares of Common
Stock (on a fully diluted basis) for cash consideration to NWS (when aggregated
with the cash consideration to NWS of the issuance of Common Stock pursuant to
the Management Subscription Agreement) not less than $34,750,000 and (iv) the
execution, delivery and performance of the other agreements and documents
contemplated by the Kohlberg Purchase Agreement.
"Register" shall have the meaning assigned to such term in
Section 9.03(d).
"Regulation D" shall mean Regulation D of the Board, as from
time to time in effect, and all official rulings and interpretations thereunder
or thereof.
"Regulation G" shall mean Regulation G of the Board, as from
time to time in effect, and all official rulings and interpretations thereunder
or thereof.
35
30
"Regulation T" shall mean Regulation T of the Board, as from
time to time in effect, and all official rulings and interpretations thereunder
or thereof.
"Regulation U" shall mean Regulation U of the Board, as from
time to time in effect, and all official rulings and interpretations thereunder
or thereof.
"Regulation X" shall mean Regulation X of the Board, as from
time to time in effect, and all official rulings and interpretations thereunder
or thereof.
"Required Lenders" shall mean at any time Lenders having
Loans, Letter of Credit Exposure and unused Commitments representing at least
51% of the sum of the aggregate principal amount of Loans outstanding (subject
to Section 2.12(g)), Letter of Credit Exposure and unused Commitments, except
that for purposes of determining the Lenders entitled to declare the Notes to
be forthwith due and payable pursuant to Article VII, "Required Lenders" shall
mean Lenders holding at least 51% of the aggregate principal amount of the
Loans at the time outstanding.
"Responsible Officer" shall mean any Executive Officer or
Financial Officer of either Borrower.
"Revolving Credit Borrowing" shall mean a Borrowing comprised
of Revolving Credit Loans.
"Revolving Credit Commitment" shall mean, with respect to any
Lender, the commitment of such Lender to make Revolving Credit Loans hereunder
as set forth in Schedule 2.01, or in the Assignment and Acceptance pursuant to
which such Lender assumed its Revolving Credit Commitment, as applicable, as
the same may be (a) reduced from time to time pursuant to this Agreement and
(b) reduced or increased from time to time pursuant to assignments by or to
such Lender pursuant to this Agreement. The Revolving Credit Commitment of
each Lender shall be deemed permanently terminated on the Revolving Credit
Maturity Date.
"Revolving Credit Exposure" shall mean, with respect to any
Lender at any time, the aggregate principal amount at such time of all
outstanding Revolving Credit Loans of such Lender, plus the aggregate amount at
such time of such Lender's Letter of Credit Exposure.
36
31
"Revolving Credit Loan" shall mean a revolving credit loan
made by the Lenders to the Borrowers pursuant to Sections 2.01 and 2.03. Each
Revolving Credit Loan shall be a Eurodollar Revolving Credit Loan or an ABR
Revolving Credit Loan.
"Revolving Credit Maturity Date" shall mean April 25, 2001,
subject to Section 2.10(d).
"Revolving Credit Notes" shall mean the Revolving Credit Notes
of the Borrowers, executed and delivered as provided in Section 2.05 in
substantially the form of Exhibit A-1 hereto.
"Rollover Term Loan" shall mean a rollover term loan made
pursuant to Sections 2.02 and 2.03 of the Original Credit Agreement and
outstanding hereunder and shall include, except as otherwise expressly provided
herein, the Capitalized Rollover Interest Amount with respect thereto.
"Rollover Term Loan Maturity Date" shall mean July 31, 1999.
"Rollover Term Notes" shall mean the Rollover Term Notes of
the Borrowers, executed and delivered as provided in Section 2.05 in
substantially the form of Exhibit A-2 hereto.
"Security Agreement" shall mean the Amended and Restated
Security Agreement among the Borrowers, each Subsidiary of the Borrowers and
the Collateral Agent, substantially in the form of Exhibit G hereto, as amended
or supplemented from time to time.
"Security Documents" shall mean the Mortgages, the Security
Agreement, each Lockbox Agreement (if any), the Pledge Agreement and the other
mortgages, deeds of trust, assignments, security agreements and other documents
executed and delivered pursuant to Section 5.11.
"Senior Note Documents" shall mean the Indenture dated as of
June 30, 1993, between NWS and Bank of America Illinois (as successor to
Continental Bank, National Association) in connection with the issuance of the
Senior Notes and any other agreement or instrument evidencing or governing the
Senior Notes.
37
32
"Senior Notes" shall mean the 9-1/2% Senior Notes Due 2001
issued by NWS, in an aggregate principal amount equal to $115,000,000.
"Statutory Reserves" shall mean a fraction (expressed as a
decimal), the numerator of which is the number one and the denominator of which
is the number one minus the aggregate of the maximum reserve percentages
(including, without limitation, any marginal, special, emergency or
supplemental reserves) expressed as a decimal established by the Board and any
other banking authority, domestic or foreign, to which the Administrative Agent
or any Lender (including any branch, Affiliate, or other fronting office making
or holding a Loan) is subject (a) with respect to the Base CD Rate, for new
nonpersonal negotiable time deposits in dollars of over $100,000 with
maturities of approximately three months and (b) with respect to the Adjusted
LIBO Rate, for Eurocurrency Liabilities (as defined in Regulation D of the
Board). Such reserve percentages shall include, without limitation, those
imposed under such Regulation D. Eurodollar Revolving Credit Loans shall be
deemed to constitute Eurocurrency Liabilities and as such shall be deemed to be
subject to such reserve requirements without benefit of or credit for
proration, exemptions or offsets that may be available from time to time to any
Lender under such Regulation D. Statutory Reserves shall be adjusted
automatically on and as of the effective date of any change in any reserve
percentage.
"Subsidiary" shall mean, with respect to any person (the
"parent"), any corporation, association or other business entity of which
securities or other ownership interests representing more than 50% of the
ordinary voting power are, at the time as of which any determination is being
made, owned or controlled by the parent or one or more subsidiaries of the
parent or by the parent and one or more subsidiaries of the parent.
"Successor Lender" shall have the meaning assigned thereto in
Section 2.10(d).
"Tamini Notes" shall mean unsecured promissory notes of NWS in
an aggreate principal amount not to exceed $1,462,951 and issued by NWS to
Tamini Costruzioni Elettromeccaniche S.r.1. in consideration of the acquisition
of equipment and machinery to be used by NWS in its business operations.
38
33
"Taxes" shall mean any and all present or future taxes,
levies, imposts, duties, deductions, charges or withholdings imposed by any
Governmental Authority, other than Excluded Taxes.
"Terminating Lender" shall have the meaning assigned thereto
in Section 2.10(d).
"Three-Month Secondary CD Rate" shall mean, for any day, the
secondary market rate for three-month certificates of deposit reported as being
in effect on such day (or, if such day shall not be a Business Day, the next
preceding Business Day) by the Board through the public information telephone
line of the Federal Reserve Bank of New York (which rate will, under the
current practices of the Board, be published in Federal Reserve Statistical
Release H.15(519) during the week following such day), or, if such rate shall
not be so reported on such day or such next preceding Business Day, the average
of the secondary market quotations for three-month certificates of deposit of
major money center banks in New York City received at approximately 10:00 a.m.,
New York City time, on such day (or, if such day shall not be a Business Day,
on the next preceding Business Day) by the Administrative Agent from three New
York City negotiable certificate of deposit dealers of recognized standing
selected by it.
"Total Revolving Credit Commitment" shall mean at any time the
sum of the Lenders' Revolving Credit Commitments.
"Type", when used with respect to any Revolving Credit Loan or
Borrowing, shall refer to the Rate by reference to which interest on such Loan
or on the Loans comprising such Borrowing is determined. For purposes hereof,
the term "Rate" shall include the Adjusted LIBO Rate and the Alternate Base
Rate.
"Transactions" shall have the meaning assigned to such term in
Section 3.02.
"Trustee" shall mean LaSalle National Bank, or any successor
trustee, not in its individual capacity but in its capacity as Trustee of the
ESOP.
"Wire Products Division" shall mean a division of NWS engaged
in the production and sale of wire products.
39
34
"Wire Products Accounts" shall mean all Accounts from sales of
wire products with standard terms of 2%/10 days net 60 days, or in the case of
the construction group of products, namely welded reinforcing fabric sold in
roll or sheet forms, standard terms of 1%/10 days net 30 days.
"Wire Products Dating Program Accounts" shall mean those
Accounts from sales of wire products which have received credit manager
approval and approval of specific annual marketing campaigns from the chief
executive officer in which seasonal shipments are made typically in the winter
months with maximum 120 days net terms.
"Wire Products Other Accounts" shall mean all Accounts from
sales of wire products other than Wire Products Accounts and Wire Products
Dating Program Accounts.
"Withdrawal Liability" means liability to a Multiemployer Plan
as a result of a complete or partial withdrawal from such Multiemployer Plan,
as such terms are defined in Part I of Subtitle E of Title IV of ERISA.
"Working Capital" shall mean, as of any date, the excess at
such date of (a) Current Assets (excluding cash and Permitted Investments) over
(b) Current Liabilities (excluding Indebtedness for borrowed money).
Except as otherwise herein specifically provided, each
accounting term used herein shall have the meaning given it under generally
accepted accounting principles in effect from time to time applied on a
consistent basis; provided, however, that each reference in Article VI and in
the definition of any term used in Article VI, as well as in the definition of
any term used for purposes of determining the Applicable Margin, to generally
accepted accounting principles shall mean generally accepted accounting
principles in effect on the Effective Date applied on a basis consistent with
those used in preparing the financial statements referred to in Section
3.05(a)(i).
All other undefined terms contained in this Agreement shall,
unless the context indicates otherwise, have the meanings provided for by the
Uniform Commercial Code as in effect in the State of New York from time to time
and to the extent the same are used or defined therein. The words "herein",
"hereof" and "hereunder" and other words of
40
35
similar import refer to this Agreement as a whole, including the exhibits and
schedules hereto, as the same may be amended, modified or supplemented and not
to any particular article, section, subsection or clause contained in this
Agreement. Terms defined in this Agreement in the singular include the plural,
and vice versa. Wherever from the context it appears appropriate, each term
stated in either the singular or plural shall include the singular and the
plural, and pronouns stated in the masculine, feminine or neuter gender shall
include the masculine, feminine and the neuter gender. As used herein with
respect to any Revolving Credit Commitment, the term "unused" shall refer to
the amount of such Commitment at the time in excess of the Revolving Credit
Exposure in respect of such Commitment at such time, all determined
disregarding any limitation on availability in respect of such Commitment
attributable to the Borrowing Base or any condition to borrowing hereunder, but
giving effect to any previous termination or permanent reduction of such
Commitment. The terms "used" and "usage" shall have correlative meanings when
used with respect to a Revolving Credit Commitment.
II. THE LOANS
SECTION 2.01. Revolving Credit Commitments. Subject to the
terms and conditions and relying upon the representations and warranties herein
set forth, each Lender agrees, severally and not jointly, to make Revolving
Credit Loans to the Borrowers, at any time and from time to time on or after
the Effective Date, and until the earlier of the Revolving Credit Maturity Date
and the termination of the Revolving Credit Commitment of such Lender in
accordance with the terms hereof, in an aggregate principal amount at any time
outstanding that will not result in (i) such Lender's Revolving Credit Exposure
exceeding (ii) the lesser of (x) such Lender's Revolving Credit Commitment and
(y) such Lender's Applicable Percentage of the Borrowing Base in effect at such
time. Within the foregoing limits and subject to the terms, provisions and
limitations set forth herein, the Borrowers may borrow, repay and reborrow, on
or after the Effective Date and prior to the Revolving Credit Maturity Date,
Revolving Credit Loans.
SECTION 2.02. Rollover Term Loans. (a) Subject to the terms
and conditions and relying upon the representations and warranties herein set
forth, each Lender agrees, severally and not jointly, that the Rollover Term
Loans of
41
36
such Lender outstanding under the Original Credit Agreement on the Effective
Date shall continue to be outstanding hereunder. Amounts paid or prepaid in
respect of the Rollover Term Loans may not be reborrowed.
(b) The Borrowers and the Lenders holding Rollover Term Loans
acknowledge and agree that the amounts set forth opposite the name of each
Lender in Schedule 2.02 hereto are, respectively, the outstanding principal
balance of and the Fixed Rate applicable to the Rollover Term Loans of such
Lender as of the Effective Date, separately identifying the Fixed Rate Amount
and Capitalized Rollover Interest Amount thereof.
SECTION 2.03. Revolving Credit Loans. (a) Each Revolving
Credit Loan shall be made as a part of a Borrowing consisting of Revolving
Credit Loans made by the Lenders ratably in accordance with their applicable
Revolving Credit Commitments; provided, however, that the failure of any Lender
to make any Revolving Credit Loan shall not in itself relieve any other Lender
of its obligation to lend hereunder (it being understood, however, that no
Lender shall be responsible for the failure of any other Lender to make any
Loan required to be made by such other Lender).
(b) Subject to Sections 2.09 and 2.13, each Borrowing shall
be comprised entirely of ABR Revolving Credit Loans or Eurodollar Revolving
Credit Loans as the Borrowers may request pursuant to Section 2.04. Each
Lender may at its option make any Eurodollar Revolving Credit Loan by causing
any domestic or foreign branch or Affiliate of such Lender to make such Loan;
provided that any exercise of such option shall not affect the obligation of
the Borrowers to repay such Loan in accordance with the terms of this
Agreement.
(c) At all times, including after giving effect to any
partial prepayment or conversion, each Eurodollar Borrowing shall be in an
aggregate principal amount that is an integral multiple of $100,000 and not
less than $1,000,000. At the time that each ABR Borrowing is made, such ABR
Borrowing shall be in an aggregate principal amount that is an integral
multiple of $100,000 and not less than $500,000; provided, that an ABR
Borrowing may be in a different aggregate principal amount that is equal to the
entire available amount of the unused Total Revolving Credit Commitment.
Borrowings of more than one Type may be outstanding at the same time; provided,
however, that the
42
37
Borrowers shall not be entitled to request any Borrowing that, if made, would
result in more than 10 Eurodollar Borrowings outstanding hereunder at any time.
For purposes of the foregoing, Borrowings having different Interest Periods,
regardless of whether they commence on the same date, shall be considered
separate Borrowings.
(d) Each Lender shall make each Revolving Credit Loan to be
made by it hereunder on the proposed date thereof by wire transfer of
immediately available funds no later than 12:00 noon, New York City time, to
the account of the Administrative Agent most recently designated by it for such
purpose by notice to the Lenders. Subject to satisfaction of the conditions
set forth in Article IV, the Administrative Agent shall by 3:00 p.m., New York
City time, credit the amounts so received to the general deposit account of the
Borrowers maintained with the Administrative Agent in New York City or, if a
Borrowing shall not occur because any condition precedent herein specified has
not been met, return the amounts so received to the respective Lenders.
(e) Unless the Administrative Agent shall have received
notice from a Lender prior to the date of any Borrowing that such Lender will
not make available to the Administrative Agent such Lender's portion of such
Borrowing, the Administrative Agent may assume that such Lender has made such
portion available to the Administrative Agent on the date of such Borrowing in
accordance with paragraph (d) above and the Administrative Agent may, in
reliance upon such assumption, make available to the Borrowers on such date a
corresponding amount. If the Administrative Agent shall have so made funds
available then, to the extent that such Lender shall not have made such portion
available to the Administrative Agent, such Lender and the Borrowers severally
agree to repay to the Administrative Agent forthwith on demand such
corresponding amount together with interest thereon, for each day from the date
such amount is made available to the Borrowers until the date such amount is
repaid to the Administrative Agent at (i) in the case of the Borrowers, the
interest rate applicable at the time to the Revolving Credit Loans comprising
such Borrowing and (ii) in the case of such Lender, a rate determined by the
Administrative Agent to represent its cost of overnight or short-term funds
(which determination shall be conclusive absent manifest error). If such
Lender shall repay to the Administrative Agent such corresponding amount, such
amount shall constitute such
43
38
Lender's Loan as part of such Borrowing for purposes of this Agreement.
(f) Notwithstanding any other provision of this Agreement, the
Borrowers shall not be entitled to request any Eurodollar Borrowing if the
Interest Period requested with respect thereto would end after the Revolving
Credit Maturity Date.
SECTION 2.04. Notice of Revolving Credit Loans. In order to request
a Borrowing, the Borrowers shall hand deliver or telecopy to the Administrative
Agent a written borrowing request (a) in the case of a Eurodollar Borrowing,
not later than 11:00 a.m., New York City time, three Business Days before a
proposed Borrowing, and (b) in the case of an ABR Borrowing, not later than
10:30 a.m., New York City time, on the day of a proposed Borrowing. Each
borrowing request shall be irrevocable, shall be signed by or on behalf of the
Borrowers and shall specify the following information: (i) whether such
Borrowing is to be a Eurodollar Borrowing or an ABR Borrowing; (ii) the date of
such Borrowing (which shall be a Business Day); (iii) the number and location
of the account to which funds are to be disbursed (which shall be an account
that complies with the requirements of Section 2.03(d)); (iv) the amount of
such Borrowing; and (v) if such Borrowing is to be a Eurodollar Borrowing, the
initial Interest Period with respect thereto; provided, however, that,
notwithstanding any contrary specification in any borrowing request, each
requested Borrowing shall comply with the requirements set forth in Section
2.03. If no election as to the Type of Borrowing is specified in any such
borrowing request, then the requested Borrowing shall be an ABR Borrowing. If
no Interest Period with respect to any Eurodollar Borrowing is specified in any
such borrowing request, then the Borrowers shall be deemed to have selected an
Interest Period of one month's duration. The Administrative Agent shall
promptly advise the applicable Lenders of any notice given pursuant to this
Section 2.04 (and the contents thereof), and of each Lender's portion of the
requested Borrowing.
SECTION 2.05. Notes; Repayment of Loans. (a) All Revolving Credit
Loans made by a Lender to the Borrowers shall be evidenced by a single
Revolving Credit Note, duly executed on behalf of the Borrowers, dated the
Effective Date, in substantially the form of Exhibit A-1 hereto, delivered and
payable to such Lender in a principal amount equal to its Revolving Credit
Commitment. All Rollover Term
44
39
Loans outstanding on the Effective Date shall continue to be evidenced by the
Rollover Term Notes previously executed and delivered by the Borrowers under
the Original Credit Agreement, unless and until the applicable Lender exchanges
its Rollover Term Note for one or more new Rollover Term Notes or transfers its
Rollover Term Note. Upon any such exchange or transfer, the Borrowers shall
execute and deliver one or more new Rollover Term Notes, dated the date of and
in the same aggregate principal amount as the original Rollover Term Note so
exchanged or transferred, in substantially the form of Exhibit A-2 hereto.
(b) All Revolving Credit Loans shall mature and be due and payable on
the Revolving Credit Maturity Date. Each Revolving Credit Note shall bear
interest from its date on the outstanding principal balance thereof as provided
in Section 2.07.
(c) Subject to paragraph (e) below, after giving effect to all
repayments and prepayments made prior to the Effective Date, the aggregate
principal amount of the Rollover Term Loans, as evidenced by the Rollover Term
Notes, shall be payable in quarterly installments, payable on the last day of
January, April, July and October of each year, commencing April 30, 1996.
Subject to paragraph (e) below, such installments (excluding the last
installment) shall be payable in the respective amounts set forth below
opposite the respective payment dates (it being understood that the amounts set
forth below have been determined after giving effect to all adjustments under
the Original Credit Agreement in respect of prepayments made prior to the
Effective Date):
Payment Date Amount Payment Date Amount
------------ ------ ------------ ------
April 30, 1996 $1,574,259 January 31, 1998 $1,852,069
July 31, 1996 $1,574,259 April 30, 1998 $1,852,069
October 31, 1996 $1,852,069 July 31, 1998 $1,852,069
January 31, 1997 $1,852,069 October 31, 1998 $3,981,949
April 30, 1997 $1,852,069 January 31, 1999 $3,981,949
July 31, 1997 $1,852,069 April 30, 1999 $3,981,949
October 31, 1997 $1,852,069
The final such installment shall be payable on the Rollover Term Loan Maturity
Date in an amount equal to the remaining unpaid principal amount of the
Rollover Term Loans (including the Capitalized Rollover Interest Amount). All
principal payments in respect of the Rollover Term Loans shall be accompanied
by accrued interest on the principal amount being repaid to the date of
payment. Each Rollover
45
40
Term Note shall bear interest from its date on the outstanding principal
balance thereof as provided in Section 2.07.
(d) Each Lender, or the Administrative Agent on its behalf, shall,
and is hereby authorized by the Borrowers to, endorse on the schedule attached
to the Revolving Credit Note or Rollover Term Note, as applicable, delivered to
such Lender (or on a continuation of such schedule attached to each such Note
and made a part thereof), or otherwise record in such Lender's internal
records, an appropriate notation evidencing the date and amount of each Loan
from the Lender to the Borrowers, as well as the date and amount of each
payment and prepayment with respect thereto; provided, however, that the
failure of any Lender or the Administrative Agent to make such a notation or
any error in such a notation shall not affect the obligations of the Borrowers
hereunder and under such Note.
(e) Each partial prepayment of Rollover Term Loans shall be applied
pro rata to reduce each subsequently scheduled installment of the remaining
outstanding Rollover Term Loans; provided, however, that the Capitalized
Rollover Interest Amount shall be disregarded for purposes of determining such
pro rata reductions unless the Capitalized Rollover Interest Amount was reduced
as a result of such prepayment. Any amount deposited in a Fixed Rate
Prepayment Account or applied to defease any Rollover Term Loan pursuant to
Section 2.12(g) in lieu of the prepayment of any Rollover Term Loan shall be
deemed to be a prepayment of such Rollover Term Loan for purposes of the
preceding sentence.
SECTION 2.06. Interest Elections. (a) Each Borrowing initially shall
be of the Type specified in the applicable borrowing request and, in the case
of a Eurodollar Borrowing, shall have an initial Interest Period as specified
in such borrowing request. Thereafter, the Borrowers may elect to convert such
Borrowing to a different Type or to continue such Borrowing and, in the case of
a Eurodollar Borrowing, may elect new Interest Periods therefor, all as
provided in this Section. The Borrowers may elect different options with
respect to different portions of the affected Borrowing, in which case each
such portion shall be allocated ratably among the Revolving Credit Loans
comprising such Borrowing and the Revolving Credit Loans comprising each such
portion shall be considered a separate Borrowing.
46
41
(b) In order to make an election pursuant to this Section, the
Borrowers shall hand deliver or telecopy to the Administrative Agent a duly
completed interest election request by the time that a borrowing request would
be required under Section 2.04 if the Borrowers were requesting a Borrowing of
the Type resulting from such election to be made on the effective date of such
interest election request.
(c) Each interest election request shall be signed by or on behalf of
the Borrowers and shall specify the following information:
(i) the Borrowing to which such interest election request
applies and, if different options are being elected with respect to
different portions thereof, the portions thereof to be allocated to
each resulting Borrowing (in which case the information to be
specified pursuant to clauses (iii) and (iv) below shall be specified
for each resulting Borrowing);
(ii) the effective date of the election made pursuant to such
interest election request, which shall be a Business Day;
(iii) whether the resulting Borrowing is to be an ABR
Borrowing or a Eurodollar Borrowing; and
(iv) if the resulting Borrowing is a Eurodollar Borrowing, the
Interest Period to be applicable thereto after giving effect to such
election, which shall be a period contemplated by the definition of
the term "Interest Period".
Notwithstanding any contrary specification in any interest election request,
each Borrowing resulting from any election hereunder shall comply with the
requirements of Section 2.03.
(d) Promptly following receipt of an interest election request, the
Administrative Agent shall advise each Lender of the contents thereof and of
such Lender's portion of each resulting Borrowing. An interest election
request shall not be revocable after the Lenders are so advised.
(e) If the Borrowers fail to deliver a timely interest election
request with respect to a Eurodollar Borrowing prior to the end of the Interest
Period applicable
47
42
thereto, then, unless such Borrowing is repaid as provided herein, such
Borrowing shall be converted to an ABR Borrowing. Notwithstanding any contrary
provision hereof, if an Event of Default has occurred and is continuing and the
Administrative Agent, at the request of Lenders holding at least 51% of the
outstanding Revolving Credit Loans, so notifies the Borrowers, then, so long as
an Event of Default is continuing (i) no outstanding Borrowing may be converted
to or continued as a Eurodollar Borrowing and (ii) unless repaid, each
Eurodollar Borrowing shall be converted to an ABR Borrowing at the end of the
Interest Period applicable thereto.
SECTION 2.07. Interest on Loans. (a) Subject to the provisions of
Section 2.11, the Revolving Credit Loans comprising each ABR Borrowing shall
bear interest (computed on the basis of the actual number of days elapsed over
a year of 365 or 366 days, as the case may be, when the Alternate Base Rate is
determined by reference to the Prime Rate and over a year of 360 days at all
other times) at a rate per annum equal to the Alternate Base Rate plus the
Applicable Margin in effect from time to time.
(b) Subject to the provisions of Section 2.11, the Revolving Credit
Loans comprising each Eurodollar Borrowing shall bear interest (computed on the
basis of the actual number of days elapsed over a year of 360 days) at a rate
per annum equal to the Adjusted LIBO Rate for the Interest Period in effect for
such Borrowing plus the Applicable Margin in effect from time to time.
(c) Accrued and unpaid interest on each Revolving Credit Loan shall
be payable on each Interest Payment Date applicable thereto; provided, however
that (i) interest accrued pursuant to Section 2.11 shall be payable on demand,
(ii) in the event of any repayment or prepayment of any Revolving Credit Loan
(other than a prepayment of an ABR Revolving Credit Loan prior to the
termination of the Revolving Credit Commitments), accrued interest on the
principal amount repaid or prepaid shall be payable on the date of such
repayment or prepayment and (iii) in the event of any conversion of a
Eurodollar Borrowing prior to the end of the current Interest Period therefor,
accrued interest on the Revolving Credit Loans included in such Borrowing so
converted shall be payable on the date of such conversion. The applicable
Alternate Base Rate or Adjusted LIBO Rate shall be determined by the
Administrative Agent, and such determination shall be conclusive absent
manifest error.
48
43
(d) Subject to the provisions of Section 2.11, the Fixed Rate Amount
of each Rollover Term Loan shall bear interest at a rate per annum (computed on
the basis of the actual number of days elapsed over a year of 360 days) equal
to the Fixed Rate applicable thereto.
(e) Subject to the provisions of Section 2.11, the Capitalized
Rollover Interest Amount of each Rollover Term Loan shall bear interest at a
rate per annum (computed on the basis of the actual number of days elapsed over
a year of 365 or 366 days, as the case may be, if based on the Prime Rate, or
over a year of 360 days if based on the Base CD Rate or the Federal Funds
Effective Rate) equal to the Alternate Base Rate plus 1-1/2%.
(f) Accrued and unpaid interest on each Rollover Term Loan shall be
payable on each Interest Payment Date applicable thereto unless otherwise
provided in this Agreement.
(g) Each partial repayment or prepayment of any Rollover Term Loan
shall be applied to reduce the Fixed Rate Amount thereof until the Fixed Rate
Amount has been reduced to zero (or fully secured by cash collateral or
defeased) and then to reduce the Capitalized Rollover Interest Amount thereof.
SECTION 2.08. Fees. (a) The Borrowers shall pay to the
Administrative Agent for the account of each Lender, on the last day of each
January, April, July and October and on the date on which the Revolving Credit
Commitment of such Lender shall expire or be terminated as provided herein, in
immediately available funds, a commitment fee (a "Commitment Fee") of 1/2 of 1%
per annum on the average daily unused amount of the Revolving Credit Commitment
of such Lender during the preceding quarter (or shorter period commencing with
the Effective Date or ending with the Revolving Credit Maturity Date or the
date on which the Revolving Credit Commitments of such Lender shall expire or
be terminated). All Commitment Fees shall be computed on the basis of the
actual number of days elapsed over a year of 360 days. The Commitment Fees due
to each Lender shall commence to accrue on the Effective Date and shall cease
to accrue on the date on which the Revolving Credit Commitment of such Lender
shall expire or be terminated as provided herein.
(b) The Borrowers shall pay to Chemical Bank, for its own account,
such additional fees in such amounts and at
49
44
such times as NWS and Chemical Bank have separately agreed in writing for
Chemical Bank's services as Administrative Agent and Collateral Agent.
(c) On the Effective Date, the Borrowers shall pay to the
Administrative Agent for the account of the persons entitled thereto (i) all
fees accrued and unpaid under the Original Credit Agreement through and
including the Effective Date (including the "Deferred Fees" referred to
therein) and (ii) the fees payable on the Effective Date for the account of
Chemical Bank and the Lenders extending Revolving Credit Commitments hereunder,
as separately agreed with such persons.
(d) The Borrowers also shall pay fees as provided in Section 2.18(f).
(e) Once paid, none of the Commitment Fees, the Letter of Credit
Participation Fees or any other fees payable to the Administrative Agent, the
Collateral Agent, the Issuing Bank or the Lenders shall be refundable in any
circumstances whatsoever.
SECTION 2.09. Alternate Rate of Interest. In the event, and on each
occasion, that on the day two Business Days prior to the commencement of any
Interest Period for a Eurodollar Borrowing the Administrative Agent shall have
determined that dollar deposits in the principal amounts of the Revolving
Credit Loans comprising such Borrowing are not generally available in the
London interbank market, or that the rates at which such dollar deposits are
being offered will not adequately and fairly reflect the cost to any Lender of
making or maintaining its Eurodollar Revolving Credit Loan during such Interest
Period, or that reasonable means do not exist for ascertaining the Adjusted
LIBO Rate, the Administrative Agent shall, as soon as practicable thereafter,
give telephone or telecopy notice of such determination to the Borrowers and
the Lenders. In the event of any such determination, until the Administrative
Agent shall have advised the Borrowers and the Lenders that the circumstances
giving rise to such notice no longer exist, any request by the Borrowers for a
Eurodollar Borrowing shall be deemed to be a request for an ABR Borrowing.
Each determination by the Administrative Agent hereunder shall be conclusive
absent manifest error.
SECTION 2.10. Extension, Termination and Reduction of Revolving Credit
Commitments. (a) Subject to
50
45
Section 2.12(b) and upon at least three Business Days' prior written, telecopy
or telex notice to the Administrative Agent, the Borrowers may at any time in
whole permanently terminate, or from time to time permanently reduce, the
Revolving Credit Commitments, ratably among the Lenders in accordance with
their respective Revolving Credit Commitments; provided, however, that (i) each
partial reduction of the Revolving Credit Commitments shall be in a minimum
aggregate principal amount of $5,000,000 and an integral multiple of $1,000,000
and (ii) the Total Revolving Credit Commitment shall not be reduced to an
amount that is less than the Letter of Credit Exposure at the time.
(b) The Revolving Credit Commitments shall automatically terminate on
the Revolving Credit Maturity Date.
(c) Simultaneously with any termination or reduction of Revolving
Credit Commitments pursuant to paragraph (a) or (b) of this Section 2.10, the
Borrowers shall pay to the Administrative Agent for the account of the Lenders
whose Revolving Credit Commitments are being terminated or reduced the
Commitment Fees on the amount of the Revolving Credit Commitments so terminated
or reduced, accrued to but excluding the date of such termination or reduction.
(d) The initial Revolving Credit Maturity Date of April 25, 2001,
shall be accelerated automatically, without the necessity of any consent or
approval of any party hereto, to July 31, 1999, unless, (i) the Rollover Term
Loans are fully repaid on or prior to July 31, 1999, (ii) the total Revolving
Credit Exposure of the Lenders as of July 31, 1999, does not exceed 75% of the
Borrowing Base as of such date and (iii) as of July 31, 1999, the lesser of the
Total Revolving Credit Commitment or the Borrowing Base exceeds the total
Revolving Credit Exposure of the Lenders by $20,000,000 or more. If the
initial Revolving Credit Maturity Date is not so accelerated, then thereafter,
subject to the conditions and procedures of this paragraph, the Borrowers may
from time to time but not more than once each year request that the then-
current Revolving Credit Maturity Date be extended for an additional one-year
period, and (subject to subparagraph (D) below) if 100% of the Lenders with
Revolving Credit Commitments (including any Successor Lenders referred to
below) agree to such request (in their sole and absolute discretion), the
Revolving Credit Maturity Date shall be so extended. Any such
51
46
extension of the Revolving Credit Maturity Date pursuant to the preceding
sentence shall be effected only pursuant to the following procedures:
(A) Not more than 90 days and not less than 60 days prior to
the Revolving Credit Maturity Date then in effect, the Borrowers shall
notify the Administrative Agent and each Lender with a Revolving
Credit Commitment in writing substantially in the form of Exhibit D
hereto of its request to extend the Revolving Credit Maturity Date by
one year to the first anniversary of the Revolving Credit Maturity
Date then in effect. Each Lender with a Revolving Credit Commitment
electing to extend the Revolving Credit Maturity Date shall execute
and deliver to the Borrowers and the Administrative Agent, not later
than 5:00 p.m., New York City time, on the date that is 45 days (or,
if such day is not a Business Day, the next succeeding Business Day)
prior to the Revolving Credit Maturity Date then in effect (which day
shall be set forth in the notice of such request given by the
Borrowers), counterparts of the Borrowers' request to extend the
Revolving Credit Maturity Date. Any Lender which shall not timely
notify the Borrowers and the Administrative Agent of its election
shall be deemed to have elected not to extend the Revolving Credit
Maturity Date.
(B) If any Lender with a Revolving Credit Commitment shall
timely notify the Administrative Agent and the Borrowers pursuant to
subparagraph (A) of this Section 2.10(d) of its election not to extend
the Revolving Credit Maturity Date or is deemed hereunder to have
elected not to extend the Revolving Credit Maturity Date (any such
Lenders being called " Terminating Lenders"), then the Administrative
Agent shall so advise the remaining Lenders, and the Borrowers may,
upon giving written telephonic or telex notice to the Administrative
Agent, at their option arrange to have one or more Eligible Assignees
acceptable to the Administrative Agent, which may include a Lender or
Lenders (each a "Successor Lender"), succeed, not later than 20 days
prior to the Revolving Credit Maturity Date then in effect, to all
(but, subject to subparagraph (D) below, not less than all) of the
Terminating Lenders' aggregate principal amount of all Revolving
Credit Loans and Rollover Term Loans outstanding, if any,
participations in outstanding Letters of Credit (including
unreimbursed
52
47
Letter of Credit Disbursements), if any, and interest in this
Agreement with respect to the Revolving Credit Loans, Rollover Term
Loans and Letters of Credit and assume all (but, subject to
subparagraph (D) below, not less than all) of the Terminating Lenders'
Revolving Credit Commitments hereunder. All amounts of Loans and
unreimbursed Letter of Credit Disbursements to be succeeded to shall
be purchased at a price equal to the aggregate outstanding principal
amount thereof plus accrued interest thereon, accrued Commitment Fees
and accrued fees under Section 2.18(f) and the Borrowers shall
indemnify any and all Terminating Lenders for any loss or cost
incurred in connection with the assignment of any Rollover Term Loan
in accordance with Section 2.14 and any Eurodollar Revolving Credit
Loan in accordance with Section 2.15. Each such Successor Lender
shall be deemed to have consented to the extension of the Revolving
Credit Maturity Date pursuant to subparagraph (A) above, and shall,
not later than 20 days prior to the Revolving Credit Maturity Date
then in effect, assume the Revolving Credit Commitments of the
Terminating Lenders to be assumed by it pursuant to the execution and
delivery of an Assignment and Acceptance in accordance with the
provisions of Section 9.03 of this Agreement. Provided that the
entire amount of the Revolving Credit Commitments of the Terminating
Lenders is assumed by the Successor Lenders, each Successor Lender
shall assume such portion of the Revolving Credit Commitments of the
Terminating Lenders as shall be agreed to with the Borrowers and
approved by the Administrative Agent.
(C) If for any reason a Successor Lender or Successor Lenders
do not replace any and all Terminating Lenders in accordance with the
provisions of subparagraph (B) above not later than 20 days prior to
the Revolving Credit Maturity Date then in effect, such that the
Borrowers are unable to obtain the consent to the extension of the
Revolving Credit Maturity Date of 100% of the Lenders with Revolving
Credit Commitments, after giving effect to the assumption of the
Revolving Credit Commitments by any Successor Lenders, the Revolving
Credit Maturity Date shall not be extended. In the event that Lenders
(including, if appropriate, Successor Lenders) having 100% of the
Revolving Credit Commitments have agreed to the extension of the
Revolving Credit Maturity Date not later than 20 days prior to the
Revolving Credit Maturity Date then in
53
48
effect, the Revolving Credit Maturity Date shall be extended to the
first anniversary of the Revolving Credit Maturity Date then in
effect.
(D) Notwithstanding the foregoing, the Borrowers may, at
their option, in lieu of replacing a Terminating Lender with a
Successor Lender as provided above, allow the Revolving Credit
Commitment of the Terminating Lender to terminate on the Revolving
Credit Maturity Date then in effect and extend the Revolving Credit
Maturity Date for less than 100% of the Lenders with Revolving Credit
Commitments; provided that the Revolving Credit Maturity Date shall be
extended only for those Lenders whose consent to such extension has
been obtained; and provided further that the Borrowers may not
exercise the option provided in this subparagraph if, as a result
thereof, the aggregate amount of Revolving Credit Commitments allowed
to terminate pursuant to this subparagraph, on a cumulative basis,
would exceed $10,000,000.
SECTION 2.11. Interest on Overdue Amounts. If the Borrowers shall
default in the payment of the principal of or interest on any Loan or any other
amount becoming due hereunder or under any other Loan Document, by acceleration
or otherwise, the Borrowers shall on demand from time to time pay interest, to
the extent permitted by law, on such defaulted amount to but excluding the date
of actual payment (after as well as before judgment), in the case of principal
or interest on any Loan, at a rate per annum (computed on the basis of the
actual number of days elapsed over a period of 360 days) equal to the rate of
interest otherwise applicable to such Loan, plus 2% per annum, and, in the case
of all other amounts, the rate of interest then applicable to ABR Revolving
Credit Loans under Section 2.07(a) plus 2% per annum.
SECTION 2.12. Prepayment of Loans. (a) The Borrowers shall have the
right at any time and from time to time to voluntarily prepay any Loan, in
whole or in part, subject to the requirements of Section 2.14 in the case of
Rollover Term Loans and Section 2.15 in the case of Eurodollar Revolving Credit
Loans but otherwise without premium or penalty, upon at least three Business
Days' (or, in the case of ABR Revolving Credit Loans, one Business Day's) prior
written, telecopy or telex notice to the Administrative Agent; provided,
however, that (i) each such partial prepayment shall be in an integral multiple
of
54
49
$100,000 and a minimum aggregate principal amount of $1,000,000 (or, in the
case of partial prepayment of ABR Revolving Credit Loans, $500,000); (ii) any
voluntary prepayment of Rollover Term Loans shall be made and applied pro rata
in accordance with the respective outstanding principal amounts of all Rollover
Term Loans then outstanding; and (iii) any voluntary prepayment of Rollover
Term Loans in part shall be subject to the option set forth in Section 2.12(h).
(b) On the date of any termination or reduction of the Revolving
Credit Commitment of any Lender pursuant to Section 2.10(a), the Borrowers
shall pay or prepay so much of the Revolving Credit Loans of such Lender as
shall be necessary in order that the Revolving Credit Exposure of such Lender
will not exceed the Revolving Credit Commitment of such Lender following such
termination or reduction.
(c) On any date when the total Revolving Credit Exposure of the
Lenders exceeds the lesser of (i) the Total Revolving Credit Commitment and
(ii) the then-current Borrowing Base, the Borrowers shall make a mandatory
prepayment of the Revolving Credit Loans in such amount as may be necessary so
that the total Revolving Credit Exposure of the Lenders after giving effect to
such prepayment does not exceed the lesser of (i) the Total Revolving Credit
Commitment and (ii) the then-current Borrowing Base.
(d) So long as any Rollover Term Loans are outstanding (other than
Rollover Term Loans fully secured by cash collateral or defeased), in the event
and on each occasion after the Effective Date that a Prepayment Event occurs,
the Borrowers shall, within three Business Days thereafter, make a mandatory
prepayment of the Rollover Term Loans in an amount equal to 100% of the Net
Cash Proceeds from such Prepayment Event (or, in the case of a Prepayment Event
described in clause (2) or (3) of the definition thereof, 50% of such Net Cash
Proceeds). Each such prepayment shall be made and applied pro rata in
accordance with the respective outstanding principal amounts of all Rollover
Term Loans then outstanding; provided, however, that any such prepayments shall
be subject to the option set forth in Section 2.12(g). For purposes hereof,
"Prepayment Event" shall mean (1) any sale, lease, transfer or other
disposition (including pursuant to Sections 7(e) or 9 of the Mortgages) of any
assets or property of NWS or any of its Subsidiaries other than sales of
inventory in the ordinary course of business and other than as permitted by
clause (v)
55
50
of Section 6.05(b), (2) the issuance by NWS or any of its Subsidiaries of any
equity securities, other than Excluded Equity Sales or the issuance by any
Subsidiary of equity securities to NWS, or (3) the receipt by NWS or any of its
Subsidiaries of a capital contribution, other than the receipt by a Subsidiary
of a capital contribution from NWS. For purposes hereof, "Net Cash Proceeds"
shall mean the gross amount of cash consideration received by NWS or any of its
Subsidiaries in respect of any Prepayment Event (including any cash received in
respect of any non-cash consideration, at the time so received), net of any
taxes required to be paid by NWS or any of its Subsidiaries as a result of such
Prepayment Event and reasonable and customary fees, commissions, expenses and
other costs paid by NWS or any Subsidiary to unaffiliated third parties in
connection with such Prepayment Event; provided, however, that, in the event of
a Prepayment Event that includes a sale or other disposition of all the capital
stock of NWS/Texas, or a sale or other disposition of assets of the Houston
Facility that includes inventory and/or Accounts of NWS/Texas, then (i) Net
Cash Proceeds in respect of such Prepayment Event shall be calculated excluding
an amount equal to the book value of the inventory and Accounts (net of
allowances and reserves for doubtful or uncollectible Accounts) of NWS/Texas
included in such sale or disposition and (ii) the Borrowers shall prepare and
deliver, on the date such Prepayment Event is consummated, a Borrowing Base
Certificate reflecting the disposition of assets theretofore included in the
Borrowing Base. The Borrowers shall deliver to the Administrative Agent at the
time of each such prepayment a certificate signed by a Financial Officer of
each Borrower setting forth in reasonable detail the calculation of the Net
Cash Proceeds resulting from any such Prepayment Event, including the amount of
and basis for calculating any Federal, state or local income taxes estimated by
the Chief Financial Officer of NWS to be payable in connection with such
Prepayment Event. In the event that the amount of such income taxes actually
paid is less than the amount set forth in such certificate, the excess of the
amount so certified over the amount actually paid shall become due and payable
hereunder simultaneously with the payment of any such tax.
(e) So long as any Rollover Term Loans are outstanding (other than
Rollover Term Loans fully secured by cash collateral or defeased), within 60
days after the end of each fiscal year of NWS (i) ending prior to the date (the
"Prepayment Determination Date") on which the sum of (A) the unused Revolving
Credit Commitments at such date, (B) the
56
51
aggregate principal amount of the then outstanding Loans and (C) the Letter of
Credit Exposure is reduced to $115,000,000, the Borrowers shall prepay the
Rollover Term Loans as provided below in an aggregate principal amount equal to
85% of the Excess Cash Flow for such fiscal year and (ii) ending on or after
the Prepayment Determination Date, the Borrowers shall prepay the Rollover Term
Loans as provided below in an aggregate principal amount equal to 50% of the
Excess Cash Flow for such fiscal year. Each required prepayment of the
Rollover Term Loans pursuant to this paragraph shall be made and applied to pay
all Rollover Term Loans then outstanding pro rata in accordance with the
respective outstanding principal amounts of all such Rollover Term Loans. The
Borrowers shall deliver to the Administrative Agent at the time of each such
prepayment required under this paragraph a certificate signed by a Financial
Officer of each Borrower setting forth in reasonable detail the calculation of
the amount of such prepayment.
(f) The Borrowers shall deliver to each Lender a notice of each
prepayment to be made under paragraph (a), (d) or (e) of this Section not less
than three Business Days prior to the date of such prepayment (except in the
case of prepayments under paragraph (a) permitted to be made on one Business
Day's notice), and any such notice delivered to a Lender holding a Rollover
Term Loan regarding a partial prepayment under paragraph (a) or any prepayment
under paragraph (d) shall request that such Lender promptly notify the
Administrative Agent whether such Lender exercises the option specified in
paragraph (g) or (h) below, as applicable, in lieu of receiving such
prepayment. Each notice of prepayment shall specify the prepayment date and
the principal amount of each Loan (or portion thereof) to be prepaid, shall be
irrevocable and shall commit the Borrowers to prepay such Loan by the amount
stated therein on the date stated therein. All prepayments shall be
accompanied by accrued interest on the principal amount being prepaid to the
date of prepayment, except for prepayments of ABR Revolving Credit Loans
prepaid on a date that is not an Interest Payment Date and is prior to the
termination of the Revolving Credit Commitments.
(g) In the event of any prepayment under paragraph (d) of this
Section that is required to be made in whole or in part in respect of Rollover
Term Loans and that would reduce the Fixed Rate Amount thereof, then at the
option of any Lender holding a Rollover Term Loan (to be
57
52
exercised by notice to the Administrative Agent and the Borrower promptly
following receipt by such Lender of notice of such prepayment) the amount that
would be required to be applied to prepay such Lender's Rollover Term Loan may,
in lieu of such prepayment, be (i) deposited with the Administrative Agent in a
Fixed Rate Prepayment Account, as provided below, as cash collateral securing
such Lender's Rollover Term Loan to which such prepayment would have been
applied or (ii) applied to defease such Lender's Rollover Term Loan in a manner
satisfactory to such Lender; provided, however, that, if any Lender holding a
Rollover Term Loan exercises such option, the portion of such Lender's Rollover
Term Loan equal to the amount applied in accordance with clause (i) or (ii)
above shall not thereafter be deemed to be outstanding for purposes of
allocating payments of principal of the Term Loans among the Lenders pursuant
to Section 2.05 and this Section 2.12 or for purposes of determining the
"Required Lenders" (unless and until the only Loans outstanding are Rollover
Term Loans fully secured by cash collateral or defeased and the Revolving
Credit Commitments have been terminated, at which time such Loans shall be
outstanding for purposes of determining the "Required Lenders"), but shall be
deemed to be outstanding for all other purposes, including calculating and
allocating interest payments. In the event that any Lender holding a Rollover
Term Loan exercises the foregoing option to require funds to be deposited in a
Fixed Rate Prepayment Account, funds shall be deposited in a Fixed Rate
Prepayment Account established by the Administrative Agent as required above,
which shall be maintained by the Administrative Agent in accordance with this
Agreement, and such funds (unless earlier applied to repay such Rollover Term
Loan as provided in this Section or Article VII) shall be applied to repayment
of the portion of such Rollover Term Loan secured by such funds at the times
and in the amounts that such portion of such Rollover Term Loan would have been
paid pursuant to Section 2.05 if such option had not been exercised; provided,
however, that at any time on or after the date that all Loans (other than
Rollover Term Loans fully secured by cash collateral or defeased) have been
repaid or prepaid in full and the Revolving Credit Commitments have been
terminated, the Borrowers shall have the right, upon at least three Business
Days' prior written or telex notice to the Administrative Agent, to prepay all
Rollover Term Loans then outstanding by directing the Administrative Agent in
such notice to apply all funds then in the Fixed Rate Prepayment Account to
repayment of such Rollover Term Loans (and paying to the Administrative Agent
58
53
for the account of the Lenders such additional amount as shall be necessary to
fully pay such Loans, including interest thereon and amounts due under Section
2.14), and such prepayment shall be treated for all purposes hereof (including
for purposes of Section 2.14) as a voluntary prepayment of the Rollover Term
Loans in full pursuant to paragraph (a) of this Section. For purposes of this
Agreement, "Fixed Rate Prepayment Account" shall mean an account established by
the Borrowers with the Administrative Agent, for the benefit of a Lender
holding a Rollover Term Loan exercising the option described in clause (i) of
this paragraph, and over which the Administrative Agent shall have exclusive
dominion and control, including the exclusive right to withdrawal, except that
(A) the Lender holding the Rollover Term Loan for which such Fixed Rate
Prepayment Account is established shall have the right to direct the
Administrative Agent at any time to pay the balance on deposit in such Account
(up to the aggregate amount theretofore deposited in such Account and excluding
any excess amounts attributable to interest or profits on investments) to such
Lender to be applied as a prepayment of such Lender's Rollover Term Loan (it
being understood that such prepayment shall not result in any further
adjustment under Section 2.05(e)) if such Lender shall waive its right to
receive the Yield- Maintenance Premium, if any, that would be due to such
Lender under Section 2.14 as a result of such prepayment and (B) unless an
Event of Default has occurred and is continuing, the Borrowers shall have the
exclusive right to direct the Administrative Agent as to the investment of
amounts on deposit in such account in Permitted Investments maturing prior to
the Rollover Term Loan Maturity Date; provided, however, that the
Administrative Agent shall not be required to make any investment that, in its
sole judgment, would require or cause the Administrative Agent to be, or would
result, in any violation of any law, statute, rule or regulation. The
Borrowers shall indemnify the Administrative Agent for any losses relating to
the investments so that the amount available to repay Rollover Term Loans is
not less than the amount which would have been available had no investments
been made pursuant thereto. Other than any interest earned on such
investments, such account shall not bear interest. Interest or profits, if
any, earned on such investments shall, unless an Event of Default has occurred
and is continuing, be payable to the Borrowers in arrears or credited and
applied against interest obligations of the Borrowers hereunder, at the option
of the Borrowers, within five Business Days after any request by the Borrowers
for
59
54
such application. The Borrowers grant the Administrative Agent a lien on and
security interest in any moneys deposited in any Fixed Rate Prepayment Account
and the Administrative Agent shall have the sole control over all moneys so
deposited; provided that such security interest shall secure only the Rollover
Term Loan in respect of which such deposits were made, and accrued interest
thereon.
(h) In the event of any prepayment under paragraph (a) of this
Section that is required to be made in whole or in part in respect of Rollover
Term Loans and that would reduce the Fixed Rate Amount thereof, then (unless
such prepayment would fully repay all outstanding Rollover Term Loans) at the
option of any Lender holding a Rollover Term Loan (to be exercised by notice to
the Administrative Agent and the Borrowers promptly following receipt by such
Lender of notice of such prepayment) such Lender may decline to receive such
prepayment, in which case such Lender's Rollover Term Loan shall not be prepaid
in connection with such prepayment; provided, however, that if any Lender shall
exercise such option, then the amount that otherwise would be required to be
applied to prepay such Lender's Rollover Term Loan shall be applied to prepay
all other Rollover Term Loans then outstanding (excluding only any other
Rollover Term Loans in respect of which the applicable Lender also shall have
exercised the option provided in this paragraph to decline to receive such
prepayment) pro rata in accordance with the respective outstanding principal
amounts of such Rollover Term Loans.
(i) Rollover Term Loans prepaid in accordance with this Section 2.12
may not be reborrowed.
(j) Except as otherwise expressly provided in this Section 2.12,
payments with respect to any paragraph of this Section 2.12 are in addition to
payments made or required to be made under any other paragraph of this Section
2.12.
SECTION 2.13. Change in Circumstances.
(a) If any Change in Law shall:
(i) impose, modify or deem applicable any reserve, special
deposit or similar requirement against assets of, deposits with or for
the account of, or credit extended by, any Lender (except any such
reserve
60
55
requirement reflected in the Adjusted LIBO Rate) or the Issuing Bank; or
(ii) impose on any Lender or the Issuing Bank or the London
interbank market any other condition affecting this Agreement or
Eurodollar Revolving Credit Loans made by such Lender or any Letter of
Credit or participation therein;
and the result of any of the foregoing shall be to increase the cost to such
Lender of making or maintaining any Eurodollar Revolving Credit Loan or to
increase the cost to such Lender or the Issuing Bank of participating in,
issuing or maintaining, any Letter of Credit or to reduce the amount of any sum
received or receivable by such Lender or the Issuing Bank hereunder (whether of
principal, interest or otherwise) by an amount deemed by such Lender or the
Issuing Bank to be material, then the Borrowers will pay to such Lender or the
Issuing Bank, as the case may be, such additional amount or amounts as will
compensate such Lender or the Issuing Bank, as the case may be, for such
additional costs incurred or reduction suffered.
(b) If any Lender or the Issuing Bank determines that any any Change
in Law regarding capital requirements has or would have the effect of reducing
the rate of return on such Lender's or the Issuing Bank's capital or on the
capital of such Lender's or the Issuing Bank's holding company, if any, as a
consequence of this Agreement or the Loans made by, or participations in
Letters of Credit held by, such Lender, or the Letters of Credit issued by the
Issuing Bank, to a level below that which such Lender or the Issuing Bank or
such Lender's or the Issuing Bank's holding company could have achieved but for
such Change in Law (taking into consideration such Lender's or the Issuing
Bank's policies and the policies of such Lender's or the Issuing Bank's holding
company with respect to capital adequacy) by an amount deemed by such Lender or
the Issuing Bank to be material, then from time to time the Borrower will pay
to such Lender or the Issuing Bank, as the case may be, such additional amount
or amounts as will compensate such Lender or the Issuing Bank or such Lender's
or the Issuing Bank's holding company for any such reduction suffered.
(c) A certificate of any Lender or the Issuing Bank setting forth
such amount or amounts as shall be necessary to compensate such Lender or the
Issuing Bank (or
61
56
participating banks or other entities pursuant to Article IX) as specified in
paragraph (a) or (b) above and certifying such amount or amounts are payable by
the Borrowers pursuant to such paragraph (a) or (b) shall be delivered to the
Borrowers and shall be conclusive absent manifest error. The Borrowers shall
pay each Lender or the Issuing Bank, as the case may be, the amount shown as
due on any such certificate within 10 days after its receipt of the same.
(d) Failure on the part of any Lender or the Issuing Bank to demand
compensation for any increased costs or reduction in amounts received or
receivable with respect to any period shall not constitute a waiver of such
Lender's or the Issuing Bank's rights to demand compensation for any increased
costs or reduction in amounts received or receivable in such period or in any
other period; provided, however, that any demand for compensation pursuant to
Section 2.13(a) or (b) with respect to any Loan shall be made not later than
one year following the date upon which the responsible account officer of such
Lender or the Issuing Bank had actual knowledge of such increased costs or
reductions in amounts received or receivable. The protection of this Section
2.13 shall be available to each Lender and the Issuing Bank regardless of any
possible contention of the invalidity or inapplicability of any Change in Law,
which shall give rise to any demand by such Lender or the Issuing Bank for
compensation.
SECTION 2.14. Yield-Maintenance Premium. In the event of any
prepayment or repayment of any Fixed Rate Amount of the Rollover Term Loan of
any Lender, whether as a result of any mandatory or optional prepayment
pursuant to this Agreement, any Event of Default or any other reason, the
Borrowers shall pay to such Lender, at the time of such prepayment or repayment
and in addition to the principal amount of such Rollover Term Loan being
prepaid or repaid and accrued interest thereon, an amount equal to the
Yield-Maintenance Premium (as defined below) with respect to such principal
amount, determined as of the date of such prepayment or repayment; provided,
however, that no Yield-Maintenance Premium shall be payable with respect to any
scheduled repayment of any Rollover Term Loan in accordance with Section
2.05(c), any prepayment or repayment of any Capitalized Rollover Interest
Amount, any mandatory prepayment in accordance
62
57
with paragraph (d) (it being understood that payments from the Fixed Rate
Prepayment Account shall not be construed as prepayments in accordance with
paragraph (d)) or (e) of Section 2.12 or any voluntary prepayment (other than a
voluntary prepayment that repays all Rollover Term Loans then outstanding or a
voluntary prepayment of Rollover Term Loans made from the proceeds of
Indebtedness issued or incurred by NWS or any of its Subsidiaries other than as
permitted under Section 6.01) in accordance with paragraph (a) of Section 2.12.
For purposes of the foregoing, (i) "Yield-Maintenance Premium" shall mean, with
respect to the Fixed Rate Amount of any Rollover Term Loan being prepaid or
repaid as of any date, a premium equal to the excess, if any, of (A) the
Discounted Value of such principal amount as of such date over (B) such
principal amount, but in no event shall the Yield-Maintenance Premium be less
than zero; (ii) "Discounted Value" shall mean, with respect to the principal
amount of any Rollover Term Loan being prepaid or repaid as of any date, the
amount calculated by discounting all Remaining Scheduled Payments with respect
to such principal amount from their respective scheduled due dates to such date
in accordance with accepted financial practice and at a discount rate (applied
on a quarterly basis) equal to the Reinvestment Yield with respect to such
principal amount; (iii) "Remaining Scheduled Payments" shall mean, with respect
to the principal amount of any Rollover Term Loan being prepaid or repaid as of
any date, all payments of such principal and interest thereon that would have
been payable after such date if such principal had been amortized as
contemplated by Section 2.05(c) rather than prepaid or repaid; (iv)
"Reinvestment Yield" shall mean, with respect to the principal amount of any
Rollover Term Loan being prepaid or repaid as of any date, the sum of (A) the
Treasury Rate plus (B) 0.75%; (v) "Treasury Rate" shall mean, with respect to
the principal amount of any Rollover Term Loan being prepaid or repaid as of
any date, a rate per annum determined by the Administrative Agent (which
determination shall be conclusive absent manifest error) to be equal to the
approximate yield to maturity (rounded upwards, if necessary, to the next 1/100
of 1%) for United States Treasury fixed-rate securities maturing on the Assumed
Maturity Date with respect to such Rollover Term Loan, determined as of the
date of such prepayment or repayment by interpolation between the most recent
weekly average yields to maturity for two series of United States Treasury
fixed-rate securities, (a) one maturing as close as possible to, but earlier
than, such Assumed Maturity Date and (b) the other maturing as close as
possible to, but later than, such Assumed Maturity Date, in each case as
published in the most recent weekly statistical release
63
58
designed H.15(519), or any successor publication, published by the Board (or,
if a weekly average yield to maturity for United States Treasury fixed-rate
securities maturing on such Assumed Maturity Date is reported in such
publication, the yield so published); and (vi) "Assumed Maturity Date" shall
mean, with respect to the principal amount of any Rollover Term Loan being
prepaid or repaid as of any date, the date that would be the maturity date of
such Rollover Term Loan if such Loan had a maturity date at the end of the
remaining average life of such Rollover Term Loan, determined as of the date of
such prepayment or repayment and based solely upon the then-remaining scheduled
payments with respect to the Fixed Rate Amount of such Loan under Section
2.05(c).
SECTION 2.15. Break Funding Losses. The Borrowers shall reimburse
each Lender for any loss or expense incurred as a consequence of (a) the
payment of any principal of any Eurodollar Revolving Credit Loan other than on
the last day of an Interest Period applicable thereto, (b) the conversion of
Eurodollar Revolving Credit Loan to a Loan of another Type, or conversion of
the Interest Period applicable thereto to a different Interest Period, other
than on the last day of the Interest Period applicable thereto, (c) the failure
to borrow, convert, continue or prepay any Revolving Credit Loan on the date
specified in any notice delivered pursuant to Section 2.04, 2.06 or 2.12 after
the Lenders are advised of such notice (regardless of whether such notice is
permitted to be revocable and is revoked in accordance herewith), (d)
revocation of any notice of termination of the Commitments as contemplated by
Section 2.10 or (e) the assignment of any Eurodollar Revolving Credit Loan
other than on the last day of the Interest Period applicable thereto pursuant
to the request of the Borrowers as contemplated by Section 2.10(d) or Section
2.20. Such losses shall include any loss incurred in obtaining, liquidating or
employing deposits from third parties (based on the assumption that the cost of
deposits for funding a Eurodollar Revolving Credit Loan for any Interest Period
equals the Adjusted LIBO Rate for such Interest Period), but shall exclude loss
of margin. A certificate of any Lender setting forth any amount or amounts
that such Lender is entitled to receive pursuant to this Section shall be
delivered to the Borrowers and shall be conclusive absent manifest error. The
Borrowers shall pay such Lender the amount shown as due in any such certificate
within 10 days after receipt thereof.
64
59
SECTION 2.16. Pro Rata Treatment. Each borrowing of Revolving Credit
Loans, each payment of the Commitment Fees and Letter of Credit Participation
Fees and each reduction of the Revolving Credit Commitments shall be made pro
rata among the Lenders in accordance with their respective Revolving Credit
Commitments (or, if such Commitments shall have expired or been terminated, in
accordance with the respective principal amounts of their outstanding Revolving
Credit Loans). Except as expressly provided otherwise herein, each payment or
prepayment of principal of the Notes, each payment of interest on the Notes and
each other reduction of the principal or interest outstanding under the Notes
shall be made pro rata among the Lenders in accordance with the respective
applicable amounts owed to such Lenders. Each Lender agrees that in computing
such Lender's portion of any Borrowing to be made hereunder, the Administrative
Agent may, in its discretion, round each Lender's percentage of such Borrowing
to the next higher or lower whole dollar amount.
SECTION 2.17. Sharing of Setoffs. Each Lender agrees that if it
shall, through the exercise of a right of banker's lien, setoff or counterclaim
against the Borrowers or any Guarantor, or pursuant to a secured claim under
Section 506 of Title 11 of the United States Code or other security or interest
arising from, or in lieu of, such secured claim, received by such Lender under
any applicable bankruptcy, insolvency or other similar law or otherwise, or by
any other means, obtain payment (voluntary or involuntary) in respect of any
Loan or Loans or Letter of Credit Disbursement as a result of which the unpaid
principal portion of its Rollover Term Loans and Revolving Credit Loans and
participations in Letter of Credit Disbursements shall be proportionately less
than the unpaid principal portion of Rollover Term Loans and Revolving Credit
Loans and participations in Letter of Credit Disbursements held by any other
Lender, it shall simultaneously purchase from such other Lender at face value,
and shall promptly pay to such other Lender the purchase price for, a
participation in the Rollover Term Loans and Revolving Credit Loans and Letter
of Credit Exposure, as the case may be, of such other Lender, so that the
aggregate unpaid principal amount of the Rollover Term Loans and Revolving
Credit Loans and Letter of Credit Exposure and participations in Rollover Term
Loans and Revolving Credit Loans and Letter of Credit Exposure held by each
Lender shall be in the same proportion to the aggregate unpaid principal amount
of all Rollover Term Loans and
65
60
Revolving Credit Loans and Letter of Credit Exposure then outstanding as the
principal amount of its Rollover Term Loans and Revolving Credit Loans and
Letter of Credit Exposure prior to such exercise of banker's lien, setoff or
counterclaim was to the principal amount of all Rollover Term Loans and
Revolving Credit Loans and Letter of Credit Exposure outstanding prior to such
exercise of banker's lien, setoff or counterclaim; provided, however, that if
any such purchase or purchases or adjustments shall be made pursuant to this
Section 2.17 and the payment giving rise thereto shall thereafter be recovered,
such purchase or purchases or adjustments shall be rescinded to the extent of
such recovery and the purchase price or prices or adjustment restored without
interest. The Borrowers expressly consent to the foregoing arrangements and
agree that any Lender holding a participation in a Rollover Term Loan or
Revolving Credit Loan or Letter of Credit Disbursement so purchased may
exercise any and all rights of banker's lien, setoff or counterclaim with
respect to any and all moneys owing by the Borrowers to such Lender as fully as
if such Lender had made a Loan directly to the Borrowers in the amount of such
participation.
SECTION 2.18. Letters of Credit. (a) The Borrowers may request the
issuance of Letters of Credit, in a form reasonably acceptable to the
Administrative Agent and the Issuing Bank, appropriately completed, for the
account of the Borrowers, at any time and from time to time while the Revolving
Credit Commitments remain in effect; provided, however, that (i) Letters of
Credit shall be available solely for the general corporate purposes of the
Borrowers and their Subsidiaries and (ii) any Letter of Credit shall be issued
only if, and each request by the Borrowers for the issuance of any Letter of
Credit shall be deemed a representation and warranty of the Borrowers that,
immediately following the issuance of any such Letter of Credit, (A) the total
Letter of Credit Exposure shall not exceed $15,000,000, and (B) the total
Revolving Credit Exposure shall not exceed the lesser of the then current
Borrowing Base and the Total Revolving Credit Commitment at the time. This
Section shall not be construed to impose an obligation upon the Issuing Bank to
issue any Letter of Credit that is inconsistent with the terms and conditions
of this Agreement.
(b) Each Letter of Credit shall expire at the close of business on
the earlier of the date one year after the date of the issuance of such Letter
of Credit (subject
66
61
to renewal) and the date that is five Business Days prior to Revolving Credit
Maturity Date (determined as of the date of issuance of such Letter of Credit),
unless such Letter of Credit expires by its terms on an earlier date; provided
that all Letters of Credit shall expire prior to July 31, 1999, unless and
until the conditions specified in the first sentence of Section 2.10(d) are
satisfied such that the Revolving Credit Maturity Date shall not be accelerated
to July 31, 1999. Each Letter of Credit shall provide for payments of drawings
in dollars or an Alternate Currency.
(c) Each issuance of any Letter of Credit shall be made on at least
three Business Days' prior written, telecopy or telex notice from the Borrowers
to the Issuing Bank and the Administrative Agent (which shall give prompt
notice thereof to each Lender) specifying the date of issuance, the date on
which such Letter of Credit is to expire (which shall comply with paragraph (b)
above), the amount of such Letter of Credit, the name and address of the
beneficiary thereof and such other information as shall be necessary to prepare
such Letter of Credit.
(d) By the issuance of a Letter of Credit and without any further
action on the part of the Issuing Bank or the Lenders in respect thereof, the
Issuing Bank hereby grants to each Lender with a Revolving Credit Commitment,
and each such Lender hereby agrees to acquire from the Issuing Bank, a
participation in such Letter of Credit equal to such Lender's Applicable
Percentage of the face amount of such Letter of Credit, effective upon the
issuance of such Letter of Credit. In consideration and in furtherance of the
foregoing, each such Lender hereby absolutely and unconditionally agrees to pay
to the Administrative Agent, on behalf of the Issuing Bank, such Lender's
Applicable Percentage of each Letter of Credit Disbursement made by the Issuing
Bank and not reimbursed by or on behalf of the Borrowers forthwith; provided
that the Lenders shall not be obligated to make any such payment to the Issuing
Bank with respect to any wrongful payment or disbursement made by the Issuing
Bank under any Letter of Credit as a result of the gross negligence or wilful
misconduct of the Issuing Bank.
(e) Each Lender with a Revolving Credit Commitment acknowledges and
agrees that its obligation to acquire participations pursuant to paragraph (d)
above in respect of Letters of Credit is absolute and unconditional and shall
not be affected by any circumstance whatsoever, including the occurrence and
continuance of an Event of Default or an
67
62
event which, with notice or lapse of time or both, would constitute an Event of
Default, and that each such payment shall be made without any offset,
abatement, withholding or reduction whatsoever.
(f) The Borrowers shall pay (i) to the Administrative Agent for the
account of the Lenders ratably in proportion to their Revolving Credit
Commitments a participation fee at a rate per annum equal to the Applicable
Margin from time to time in effect on the daily average aggregate undrawn
amount of the outstanding Letters of Credit, and (ii) to the Issuing Bank for
its own account such fees as shall be separately agreed among the Borrowers and
the Issuing Bank (which, in the case of Chemical Bank in its capacity as
Issuing Bank, are hereby agreed to be (A) a fronting fee at a rate per annum
equal to 1/4 of 1% on the daily average aggregate undrawn amount of the
outstanding Letters of Credit and (B) in connection with the issuance,
amendment or transfer of any Letter of Credit or any Letter of Credit
Disbursement, Chemical Bank's customary documentary and processing fees). Such
participation fees and fronting fees shall be computed on the basis of the
actual number of days elapsed over a year of 360 days and shall accrue from and
including the date of issuance of each Letter of Credit to but excluding the
date of its expiration, as such date may be extended or renewed, or earlier
cancellation. Accrued participation fees and fronting fees under this
paragraph shall be payable quarterly in arrears on the last Business Day of
each January, April, July and October and on the Revolving Credit Maturity Date
or earlier termination of the Revolving Credit Commitments.
(g) If the Issuing Bank shall make any Letter of Credit Disbursement
in respect a Letter of Credit, the Borrowers shall pay to the Administrative
Agent, on behalf of the Issuing Bank (and the Lenders that shall have made
payments to the Issuing Bank in respect of such Letter of Credit Disbursement,
as applicable), an amount equal to such Letter of Credit Disbursement before
(i) 12:00 Noon (New York City time), on the day on which the Issuing Bank shall
have notified the Borrowers that payment of such Letter of Credit Disbursement
will be made or (ii) if the Issuing Bank shall have notified the Borrowers of
such payment later than 9:45 a.m. (New York City time) on the Business Day on
which the payment of such Letter of Credit Disbursement will be made, 12:00
Noon (New York City time) on the next Business Day. The Administrative Agent
will promptly pay any such
68
63
amounts received by it to the Issuing Bank (or to such Lenders, as their
interests may appear). If the Borrowers shall fail to pay any amount required
to be paid under clause (i) of the first sentence of this paragraph when due,
or if the Borrowers shall fail to pay an amount equal to the amount of any
Letter of Credit Disbursement on the same day that such Letter of Credit
Disbursement is made by reason of clause (ii) of the first sentence of this
paragraph, then such unpaid amount shall bear interest, for each day from and
including the due date or the date of payment of such draft, as the case may
be, to but excluding the date of payment, at a rate per annum equal to the sum
of the rate of interest then applicable to ABR Revolving Credit Loans for such
day plus 2%.
(h) The Borrowers' obligation to repay the Issuing Bank and the
Lenders for payments and disbursements made by the Issuing Bank under any
Letter of Credit and payments made by the Lenders to the Issuing Bank in
respect thereof shall be absolute, unconditional and irrevocable, and shall be
performed strictly in accordance with the terms of this Agreement, under any
and all circumstances and irrespective of:
(i) any lack of validity or enforceability of any Letter of
Credit or any Loan Document, or any term or provision therein;
(ii) any amendment or waiver of or any consent to departure
from all or any of the provisions of any Letter of Credit or any Loan
Document;
(iii) the existence of any claim, setoff, defense or other
right that the Borrowers, any Subsidiary or other Affiliate thereof or
any other person may at any time have against the beneficiary under
any Letter of Credit, the Issuing Bank, the Administrative Agent or
any Lender (other than the defense of payment in accordance with the
terms of this Agreement) or any other person, whether in connection
with this Agreement, any other Loan Document or any other related or
unrelated agreement or transaction;
(iv) any draft or other document presented under a Letter of
Credit proving to be forged, fraudulent, invalid or insufficient in
any respect or any statement therein being untrue or inaccurate in any
respect;
69
64
(v) payment by the Issuing Bank under a Letter of Credit
against presentation of a draft or other document which does not
comply with the terms of such Letter of Credit; and
(vi) any other act or omission to act or delay of any kind of
the Issuing Bank, the Lenders, the Administrative Agent or any other
person or any other circumstance or event whatsoever, whether or not
similar to any of the foregoing that might, but for the provisions of
this Section, constitute a legal or equitable discharge of the
Borrowers' obligations hereunder.
Without limiting the generality of the foregoing, it is expressly
understood and agreed that the absolute and unconditional obligation of the
Borrowers hereunder to reimburse Letter of Credit Disbursements will not be
excused by the gross negligence or wilful misconduct of the Issuing Bank.
However, the foregoing shall not be construed to excuse the Issuing Bank from
liability to the Borrowers to the extent of any direct damages (as opposed to
consequential damages, claims in respect of which are hereby waived by the
Borrowers to the extent permitted by applicable law) suffered by the Borrowers
that are caused by the Issuing Bank's gross negligence or wilful misconduct in
determining whether drafts and other documents presented under a Letter of
Credit comply with the terms thereof; it is understood that the Issuing Bank
may accept documents that appear on their face to be in order, without
responsibility for further investigation, regardless of any notice or
information to the contrary and, in making any payment under any Letter of
Credit (i) the Issuing Bank's exclusive reliance on the documents presented to
it under such Letter of Credit as to any and all matters set forth therein,
including reliance on the amount of any draft presented under such Letter of
Credit, whether or not the amount due to the beneficiary thereunder equals the
amount of such draft and whether or not any document presented pursuant to such
Letter of Credit proves to be insufficient in any respect, if such document on
its face appears to be in order, and whether or not any other statement or any
other document presented pursuant to such Letter of Credit proves to be forged
or invalid or any statement therein proves to be inaccurate or untrue in any
respect whatsoever and (ii) any noncompliance in any immaterial respect of the
documents presented under such Letter of Credit with the terms thereof shall,
in each case, be deemed not to
70
65
constitute wilful misconduct or gross negligence of the Issuing Bank.
(i) The Issuing Bank shall, promptly following its receipt thereof,
examine all documents purporting to represent a demand for payment under a
Letter of Credit to ascertain that the same appear on their face to be in
substantial conformity with the terms and conditions of such Letter of Credit.
The Issuing Bank shall as promptly as possible give telephonic notification,
confirmed by telex or telecopy, to the Administrative Agent and the Borrowers
of such demand for payment and the determination by the Issuing Bank as to
whether such demand for payment was in accordance with the terms and conditions
of such Letter of Credit and whether the Issuing Bank has made or will make a
Letter of Credit Disbursement thereunder; provided that the failure to give
such notice shall not relieve the Borrowers of their obligation to reimburse
the Issuing Bank and the Lenders with respect to any such Letter of Credit
Disbursement. The Administrative Agent shall promptly give each Lender with a
Revolving Credit Commitment notice thereof.
(j) In the event that the Borrowers are required pursuant to the
terms of this Agreement or any other Loan Document to provide cash collateral
in respect of the Letter of Credit Exposure, the Borrowers shall deposit in an
account with the Administrative Agent, for the benefit of the Issuing Bank and
the Lenders with Revolving Credit Commitments, an amount in cash equal to the
Letter of Credit Exposure (or such lesser amount as shall be required hereunder
or thereunder). In addition, the Borrowers may elect to provide cash
collateral in order to increase the Borrowing Base by depositing in an account
with the Administrative Agent, for the benefit of the Issuing Bank and the
Lenders with Revolving Credit Commitments, an amount in cash equal to the
desired increase in the Borrowing Base. Any such deposit shall be held by the
Administrative Agent as collateral for the payment and performance of the
obligations in respect of the Revolving Credit Commitments (including Letters
of Credit). The Administrative Agent shall have exclusive dominion and
control, including the exclusive right of withdrawal, over any such account.
Other than any interest earned on the investment of such deposits in Permitted
Investments, which investments shall be selected by the Administrative Agent in
its sole but reasonable discretion (unless an Event of Default shall have
occurred and be continuing, in which case the Administrative Agent shall have
the option, in its sole discretion, to
71
66
decline to invest such deposits), such deposits shall not bear interest.
Interest or profits, if any, on such investments shall accumulate in such
account. Moneys in such account shall automatically be applied by the
Administrative Agent to reimburse the Issuing Bank for Letter of Credit
Disbursements and, if the maturity of the Loans has been accelerated, may be
applied (at the Administrative Agent's discretion, subject to directions from
the Required Lenders) to satisfy the Obligations secured thereby. If the
Borrowers are required to provide an amount of cash collateral hereunder as a
result of an Event of Default, such amount (to the extent not applied as
aforesaid) shall be returned to the Borrowers within three Business Days after
all Events of Default have been cured or waived. If the Borrowers elect to
provide an amount of cash collateral hereunder in order to increase the
Borrowing Base, such amount (to the extent not applied as aforesaid) shall be
returned to the Borrowers upon demand; provided that, after giving effect to
such return, (i) the Revolving Credit Exposure would not exceed the Borrowing
Base and (ii) no Event of Default shall have occurred and be continuing.
(k) In the event that an Alternate Currency Letter of Credit is
issued, the following provisions shall apply:
(i) Such Alternate Currency Letter of Credit shall constitute
a Letter of Credit for all purposes of this Agreement and the other
Loan Documents.
(ii) For purposes of determining the Letter of Credit
Exposure for any purpose other than expressly provided below, the
amount of such Letter of Credit and of any unreimbursed Letter of
Credit Disbursements in respect thereof shall be, as of any date of
determination, the Dollar Equivalent of the Alternate Currency amount
thereof at such date.
(iii) For purposes of calculating Commitment Fees, Letter of
Credit Participation Fees and fronting fees payable to the Issuing
Bank, the amount of such Letter of Credit and of any unreimbursed
Letter of Credit Disbursements in respect thereof shall be the Dollar
Equivalent of the Alternate Currency amount thereof as of the last
Business Day of each January, April, July and October (or the date on
which such Letter of Credit was issued or such Letter of Credit
Disbursement was
72
67
made, if such date is more recent than such last Business Day) during
the period for which such fees are being calculated.
(iv) The obligation of the Borrowers to reimburse Letter of
Credit Disbursements under such Alternate Currency Letter of Credit,
and to pay fees in respect thereof and interest or other amounts
thereon, shall be payable only in U.S. dollars and shall not be
discharged by paying an amount in an Alternate Currency. The
obligation of the Borrowers to reimburse any such Letter of Credit
Disbursement shall be in an amount of U.S. dollars equal to the Dollar
Equivalent of the Alternate Currency amount thereof determined as of
the date on which such Letter of Credit Disbursement is made, and any
interest on the unreimbursed amount thereof shall accrue on the
unreimbursed portion of such Dollar Equivalent amount.
(v) The obligation of each Lender with a Revolving Credit
Commitment to pay its Applicable Percentage of any unreimbursed Letter
of Credit Disbursement under such Alternate Currency Letter of Credit
shall be payable only in U.S. dollars and shall be in an amount equal
to such Applicable Percentage of the Dollar Equivalent amount of such
unreimbursed Letter of Credit Disbursement determined as provided in
clause (iv) above. Under no circumstances shall the provisions hereof
permitting the issuance of Alternate Currency Letters of Credit be
construed, by implication or otherwise, as imposing any obligation
upon any Lender to make any Loan or other payment under any Loan
Document, or to accept any payment from the Borrowers in respect of
any Obligations, in any currency other than U.S. dollars, it being
understood that the parties intend all Obligations to be denominated
and payable only in U.S. dollars.
(vi) As of the date of issuance of any Alternate Currency
Letter of Credit, the Dollar Equivalent of the Letter of Credit
Exposure in respect of all Alternate Currency Letters of Credit shall
not exceed $5,000,000 after giving effect to such issuance.
(l) As of the Effective Date, each letter of credit issued under the
Original Credit Agreement that remains outstanding shall be deemed to
constitute a Letter
73
68
of Credit issued hereunder for all purposes hereof and of the other Loan
Documents.
SECTION 2.19. Taxes. (a) Any and all payments by or an account of
any obligation of the Borrowers hereunder shall be made free and clear of and
without deduction for any Taxes or Other Taxes; provided that if the Borrowers
shall be required to deduct any Taxes or Other Taxes from such payments, then
(i) the sum payable shall be increased as necessary so that after making all
required deductions (including deductions applicable to additional sums payable
under this Section) the Administrative Agent, the Issuing Bank or Lender (as
the case may be) receives an amount equal to the sum it would have received had
no such deductions been made, (ii) the Borrowers shall make such deductions and
(iii) the Borrowers shall pay the full amount deducted to the relevant
Governmental Authority in accordance with applicable law.
(b) In addition, the Borrowers shall pay any Other Taxes to the
relevant Governmental Authority in accordance with applicable law.
(c) The Borrowers shall indemnify the Administrative Agent, the
Issuing Bank and each Lender, within 10 days after written demand therefor, for
the full amount of any Taxes or Other Taxes (including Taxes or Other Taxes
imposed or asserted on amounts payable under this Section) paid by the
Administrative Agent, the Issuing Bank or such Lender and any liability
(including penalties, interest and reasonable expenses) arising therefrom or
with respect thereto, whether or not such Taxes or Other Taxes were correctly
or legally asserted by the relevant Governmental Authority. A certificate as
to the amount of such payment or liability delivered to the Borrowers by the
Issuing Bank, by a Lender, or by the Administrative Agent on its own behalf or
on behalf of a Lender, shall be conclusive absent manifest error.
(d) As soon as practicable after any payment of Taxes or Other Taxes
by the Borrowers to a Governmental Authority, the Borrowers shall deliver to
the Administrative Agent the original or a certified copy of a receipt issued
by such Governmental Authority evidencing such payment.
(e) Any Foreign Lender that is entitled to an exemption from or
reduction of U.S. Federal withholding tax under the Code or any treaty to which
the United States of
74
69
America is a party with respect to payments under this Agreement shall deliver
to the Borrowers (with a copy to the Administrative Agent), at the time or
times prescribed by applicable law, a properly completed and executed Internal
Revenue Service Form 4224, 1001 or other form prescribed by applicable law
(together with such other documentation or certifications as the Borrowers may
reasonably request) that will permit the Borrowers to make such payments
without withholding or at a reduced rate.
SECTION 2.20. Mitigation Obligations; Replacement of Lenders. (a)
If any Lender requests compensation under Section 2.13, or if the Borrowers are
required to pay any additional amount to any Lender or any Governmental
Authority for the account of any Lender pursuant to Section 2.19, then such
Lender shall use reasonable efforts to designate a different lending office for
funding or booking its Loans hereunder or to assign its rights and obligations
hereunder to another of its offices, branches or affiliates, if, in the
judgment of such Lender, such designation or assignment (i) would eliminate or
reduce amounts payable pursuant to Section 2.13 or 2.19, as the case may be, in
the future and (ii) would not subject such Lender to any unreimbursed cost or
expense and would not otherwise be disadvantageous to such Lender. The
Borrowers hereby agree to pay all reasonable costs and expenses incurred by any
Lender in connection with any such designation or assignment.
(b) If any Lender requests compensation under Section 2.13, or if the
Borrowers are required to pay any additional amount to any Lender or any
Governmental Authority for the account of any Lender pursuant to Section 2.19,
or if any Lender defaults in its obligation to fund Loans hereunder, then the
Borrowers may, at their sole expense and effort, upon notice to such Lender and
the Administrative Agent, require such Lender to assign and delegate, without
recourse (in accordance with and subject to the restrictions contained in
Section 9.03), all its interests, rights and obligations under this Agreement
(other than any outstanding Rollover Term Loans held by it) to an assignee that
shall assume such obligations (which assignee may be another Lender, if a
Lender accepts such assignment); provided that (i) the Borrowers shall have
received the prior written consent of the Administrative Agent and the Issuing
Bank, which consents shall not unreasonably be withheld, and (ii) such Lender
shall have received payment of an amount equal to the outstanding
75
70
principal of its Loans (other than Rollover Term Loans) and participations in
Letter of Credit Disbursements, accrued interest thereon, accrued fees and all
other amounts payable to it hereunder (including any requested compensation
under Section 2.13 or 2.19), from the assignee (to the extent of such
outstanding principal and accrued interest and fees) or the Borrowers (in the
case of all other amounts). A Lender shall not be required to make any such
assignment and delegation if, prior thereto, as a result of a waiver by such
Lender or otherwise, the circumstances entitling the Borrowers to require such
assignment and delegation cease to apply.
III. REPRESENTATIONS AND WARRANTIES
Each Borrower represents and warrants to the Administrative Agent, the
Collateral Agent, the Issuing Bank and each of the Lenders that:
SECTION 3.01. Organization, Corporate Powers. Each of the Borrowers
and their respective Subsidiaries is duly organized, validly existing and in
good standing under the laws of its jurisdiction of incorporation, has the
requisite corporate power to own its property and assets and to carry on its
business as now conducted and is qualified to do business in, and is in good
standing in, every jurisdiction where such qualification is required, except
where the failure so to qualify would not have a Material Adverse Effect. Each
Borrower has the corporate power to execute, deliver and perform its
obligations under this Agreement, each other Loan Document to which it is or is
to be a party, and each other document contemplated hereby and thereby to which
it is or is to be a party, and to borrow hereunder. Except for NWS/Texas,
NWS/Delaware and the Kentucky Subsidiary, NWS does not have any Subsidiaries as
of the Effective Date.
SECTION 3.02. Authorization. The execution, delivery and performance
of this Agreement and each other Loan Document by each Loan Party that is or is
to be a party thereto and the borrowings hereunder (collectively, the
"Transactions") (a) have been duly authorized by all requisite corporate and,
if required, stockholder action on the part of the Loan Parties and (b) will
not (i) violate (A) any provision of law, statute, rule or regulation or of the
Certificate of Incorporation or the By-laws (or similar governing documents) of
any Loan Party, (B) any order of any court, or any rule, regulation or order of
any other agency
76
71
of government binding upon any Loan Party, or (C) any provisions of any
indenture, agreement or other instrument to which any Loan Party is a party, or
by which any of their respective properties or assets are or may be bound, (ii)
conflict with, result in a breach of or constitute (alone or with notice or
lapse of time or both) a default under, or give rise to any right to accelerate
or to require the prepayment, repurchase or redemption of any obligation under,
any such indenture, agreement or other instrument referred to in (b)(i)(C)
above or (iii) result in the creation or imposition of any Lien of any nature
whatsoever upon any property or assets of any Loan Party except pursuant to the
Security Documents.
SECTION 3.03. Governmental Approvals. No registration or filing with
or consent or approval of, or other action by, any Federal, state or other
governmental agency, authority or regulatory body is or will be required in
connection with the execution, delivery and performance of this Agreement, the
Notes and the other Loan Documents, the borrowings hereunder or any of the
Transactions other than (i) the filing of financing statements, security
agreements, mortgages and other instruments and documents referred to in
Section 3.10, (ii) such consents, approvals, filings and registrations as are
described on Schedule 3.03, all of which either have been obtained or made or
are not yet required to have been obtained or made and (iii) such consents,
approvals, filings and registrations as, if not obtained or made, do not have a
Material Adverse Effect.
SECTION 3.04. Enforceability. Each of this Agreement, the Notes, the
other Loan Documents and the other agreements contemplated hereby to which the
Loan Parties, or any of them, is a party, has been duly executed and delivered
by each applicable Loan Party and its obligations thereunder constitute legal,
valid and binding obligations of such Loan Party, enforceable in accordance
with their respective terms, except as the enforceability thereof may be
limited by bankruptcy, insolvency, moratorium and other similar laws affecting
the enforcement of creditors' rights generally and by general principles of
equity.
SECTION 3.05. Financial Statements. (a) NWS has heretofore
furnished to each of the Lenders consolidated balance sheets and statements of
income and cash flows of NWS (i) as of and for the fiscal year ended July 31,
1995, certified by Coopers & Lybrand L.L.P., independent public accountants for
NWS, and (ii) as of and for the fiscal
77
72
quarters ended October 31, 1995 and January 31, 1996, certified by a Financial
Officer of NWS. Such balance sheets and statements of income and cash flows
present fairly in all material respects the consolidated financial condition
and results of operations of NWS as of the dates and for the periods indicated.
The financial statements referred to in this Section 3.05 have been prepared in
accordance with generally accepted accounting principles consistently applied.
(b) Neither Borrower, as of the date of any balance sheet referred to
in this Section 3.05, had any material monetary obligations, contingent
liabilities or liabilities for taxes, long-term leases or unusual forward or
long-term commitments which are not reflected in such balance sheets or in the
notes or any schedule thereto.
(c) There has been no materially adverse change in the business,
operations, assets, properties or condition (financial or otherwise) of NWS and
its Subsidiaries, taken as a whole, from that reflected in the financial
statements as of and for the fiscal year ended July 31, 1995, referred to in
paragraph (a) above, that has had a Material Adverse Effect.
(d) As of the Effective Date, NWS has disclosed to the Lenders in
writing any and all facts (other than events and circumstances affecting the
industry generally) which materially and adversely affect, or may (insofar as
NWS can now reasonably foresee) materially and adversely affect, the business,
operations, assets, properties or condition (financial or otherwise) of NWS and
its Subsidiaries, considered as a whole.
SECTION 3.06. Title to Properties; Receivables. (a) Each of NWS and
its Subsidiaries has good and marketable (or insurable without material
exceptions by a reputable title company) title to, or valid leasehold interests
in, all its properties and assets except for such properties as are no longer
used or useful in the conduct of its businesses or as have been disposed of in
the ordinary course of business and except for minor Permitted Encumbrances and
defects in title that do not have a Material Adverse Effect. All such material
assets and properties referred to in the preceding sentence are free and clear
of all Liens other than Permitted Encumbrances.
78
73
(b) As of the Effective Date, since December 31, 1995, neither NWS
nor any Subsidiary thereof has taken any action other than in the ordinary
course of business to collect any of its Accounts or has changed in any
material respect its credit criteria or collection policies concerning its
Accounts. As of the date of the most recent Borrowing Base Certificate
delivered on or prior to the Effective Date and except as set forth in such
Borrowing Base Certificate, to the best knowledge of the Borrowers, each
Account of NWS or any Subsidiary thereof constitutes a legal, valid and binding
obligation of the Account Debtor enforceable against the Account Debtor in
accordance with its terms, except as the enforceability thereof may be limited
by bankruptcy, insolvency, moratorium and other similar laws affecting the
enforcement of creditors' rights generally and general equity principles, and
is not subject to any Lien or any other claim, defense or right of set-off
except pursuant to this Agreement and the Security Documents. Schedule 3.06
contains a complete and accurate aging from the applicable dates for payment
(on a current, 1-30-day past due, 30-60-day past due, 60-90-day past due and
over-90-day past due basis) of the Accounts of NWS and its Subsidiaries as of
December 31, 1995, and sets forth all applicable allowances as of such date for
doubtful or uncollectible accounts, computed in accordance with generally
accepted accounting principles applied on a basis consistent with NWS's balance
sheet dated July 31, 1995, referred to in Section 3.05(a).
SECTION 3.07. Litigation; Compliance with Laws; etc. (a) Other than
as disclosed in the financial statements delivered pursuant to Section 3.05,
there are not any actions, suits or proceedings at law or in equity or by or
before any governmental instrumentality or other agency or regulatory authority
now pending or, to the knowledge of either Borrower, threatened against or
affecting NWS or its Subsidiaries or the businesses, operations, assets,
properties, or rights of NWS or its Subsidiaries as to which there is a
reasonable likelihood of an adverse determination and which, if adversely
determined, would, individually or in the aggregate (after giving full effect
to such proceedings), have a Material Adverse Effect.
(b) Neither NWS nor any of its Subsidiaries is in violation of any
law, or in default under any material order, writ, injunction, award or decree
of any court, arbitrator, administrative agency or other Governmental Authority
binding upon it or its assets or any indenture,
79
74
mortgage, contract, agreement or other undertaking or instrument to which it is
a party or by which any of its properties may be bound, except for violations
and defaults that do not have a Material Adverse Effect.
SECTION 3.08. Agreements. (a) Neither NWS nor any of its
Subsidiaries is a party to any agreement or instrument or subject to any
corporate restriction that would result in a Material Adverse Effect.
(b) Neither NWS nor any of its Subsidiaries is in default in any
manner that would result in a Material Adverse Effect.
SECTION 3.09. Federal Reserve Regulations. (a) Neither Borrower is
engaged principally, or as one of its important activities, in the business of
extending credit for the purpose of purchasing or carrying Margin Stock.
(b) No part of the proceeds of the Loans will be used, whether
directly or indirectly, and whether immediately, incidentally or ultimately,
for any purpose which entails a violation of, or which is inconsistent with,
the provisions of the Regulations of the Board (including, without limitation,
Regulation G, T, U or X).
SECTION 3.10. Security Documents. Except as set forth in Schedule
3.10, the security interests created in favor of the Collateral Agent for the
benefit of the Lenders under the Security Documents (including but not limited
to the security interest in the items and amounts deposited in the lockboxes
and accounts established pursuant to the Security Agreement or, if applicable,
the Lockbox Agreement) will at all times constitute first priority (subject
only to Permitted Encumbrances referred to in clauses (c) through (i) of
Section 6.02), perfected security interests in the Collateral as security for
the Obligations, and the Collateral will not be subject to any Liens of any
other person except as permitted thereunder or hereunder. No filings or
recordings are or will be required in order to perfect the security interests
in such Collateral created under the Security Documents except as specified in
Schedule 3.10, which filings and recordings have been made (or, in the case of
the Mortgage with respect to the Kentucky Plant, will be recorded promptly
following the Effective Date).
80
75
SECTION 3.11. Taxes. Except where nonfiling would not have a
Material Adverse Effect, each of NWS and any Subsidiary thereof has filed or
caused to be filed all Federal, state and local tax returns which are required
to be filed by it, and has paid or caused to be paid all taxes shown to be due
and payable on such returns or on any assessments received by it, other than
any taxes or assessments the validity of which NWS or any Subsidiary thereof is
contesting in good faith by appropriate proceedings, and with respect to which
NWS or any Subsidiary thereof shall, to the extent required by generally
accepted accounting principles applied on a consistent basis, have set aside on
its books adequate reserves.
SECTION 3.12. ERISA. No ERISA Event has occurred or is reasonably
expected to occur that, when taken together with all other such ERISA Events,
could reasonably be expected to result in a Material Adverse Effect. The
accumulated benefit obligation under each Plan (based on those assumptions used
for purposes of Statement of Financial Accounting Standards No. 87) did not, as
of the last annual valuation date applicable thereto, exceed by more than
$35,000,000 the fair market value of the assets of such Plan, and the
accumulated benefit obligation of all underfunded Plans (based on those
assumptions used for purposes of Statement of Financial Accounting Standards
No. 87) did not, as of the last annual valuation dates applicable thereto,
exceed by more than $35,000,000 the fair market value of the assets of all such
underfunded Plans.
SECTION 3.13. No Material Misstatements. As of the date prepared or
furnished, no information, report, financial statement, financial projection,
exhibit or schedule prepared or furnished by either Borrower to the
Administrative Agent or any Lender in connection with the Transactions, or
included in or delivered pursuant to any Loan Document on or after the
Effective Date, contained or contains any material misstatement of fact or
omitted or omits to state any material fact necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading. The financial projections delivered to the Lenders in connection
with the Transactions have been and those to be delivered to the Lenders after
the Effective Date pursuant to Section 5.05(f) will be prepared on the basis of
the assumptions stated therein. Such projections represent the Borrowers' good
faith estimate of the Borrowers' future performance after the Effective Date
and such assumptions are believed by the
81
76
Borrowers to be fair and reasonable in light of current business conditions as
of the date made.
SECTION 3.14. Investment Company Act; Public Utility Holding Company
Act. Neither Borrower nor any of its Subsidiaries is an "investment company"
as defined in, or subject to regulation under, the Investment Company Act of
1940. Neither Borrower nor any of its Subsidiaries is a "holding company" as
defined in, or subject to regulation under, the Public Utility Holding Company
Act of 1935.
SECTION 3.15. Solvency. (a) The fair salable value of the assets of
NWS, immediately following the making of each Loan, and at the time of the
creation and perfection of each of the security interests referred to in
Section 3.10, exceeded and will exceed, the amount that will be required to be
paid on or in respect of the existing debts and other liabilities (including
contingent liabilities) of such corporation as they mature.
(b) The assets of NWS immediately following the making of each Loan,
and at the time of the creation and perfection of each of the security
interests referred to in Section 3.10, did not and will not, constitute
unreasonably small capital to carry out its business as conducted or as
proposed to be conducted.
(c) NWS, immediately following the making of each Loan, and at the
time of the creation and perfection of each of the security interests referred
to in Section 3.10, did not and will not intend to, and did not believe that it
will, incur debts beyond its ability to pay such debts as they mature (taking
into account the timing and amounts of cash to be received by it and of amounts
to be payable on or in respect of its debt).
SECTION 3.16. Labor Matters. As of the Effective Date, there are no
strikes or other material labor disputes against either Borrower or any
Subsidiary pending or, to the Borrowers' knowledge, threatened. As of the
Effective Date, the hours worked and payments made to employees of the
Borrowers and the Subsidiaries have not been in violation of the Fair Labor
Standards Act or, to the Borrowers' knowledge, any other applicable law dealing
with such matters. As of the Effective Date, all payments due from Borrowers
and the Subsidiaries, or for which any claim may be made against a Borrower or
any Subsidiary, on account of wages and employee health and welfare insurance
and other
82
77
benefits have been paid or accrued as a liability on the books of the
Borrowers. The consummation of the Transactions will not give rise to a right
of termination or right of renegotiation on the part of any union under any
collective bargaining agreement to which either Borrower or any Subsidiary is a
party or by which either Borrower or any Subsidiary is bound on the Effective
Date.
SECTION 3.17. Employment and Management Agreements. (a) As of the
Effective Date, there are no employment agreements covering the management of
the Borrowers or collective bargaining agreements or other labor agreements
covering any of the employees of the Borrowers and the Subsidiaries other than
as disclosed in the NWS 1995 Form 10-K.
(b) As of the Effective Date, there are no agreements for management
or consulting services to which either Borrower or any Subsidiary is a party or
by which it is bound except as disclosed in the NWS 1995 Form 10-K and except
short-term agreements entered into in the ordinary course of business.
SECTION 3.18. Environmental Matters. Except as set forth in the NWS
1995 Form 10-K and except with respect to any other matters that, individually
or in the aggregate, could not reasonably be expected to have a Material
Adverse Effect, neither any Borrower nor any Subsidiary (a) has failed to
comply with any Environmental Law or to obtain, maintain or comply with any
permit, license or other approval required under any Environmental Law, (b) has
become subject to any Environmental Liability, (c) has received notice of any
claim with respect to any Environmental Liability or (d) knows of any basis for
any Environmental Liability.
83
78
IV. CONDITIONS OF EFFECTIVENESS AND LENDING
The effectiveness of this Agreement and the obligations of the Lenders
to make Loans hereunder and of the Issuing Bank to issue Letters of Credit
hereunder shall be subject to the following conditions precedent:
SECTION 4.01. All Events. On the date of each borrowing of Revolving
Credit Loans hereunder and on the date of each issuance of a Letter of Credit
hereunder:
(a) The Administrative Agent shall have received a notice of
such borrowing or the Issuing Bank shall have received a notice
requesting the issuance of such Letter of Credit, as required by
Section 2.04 or 2.18, as applicable.
(b) The representations and warranties set forth in the Loan
Documents shall be true and correct with the same effect as though
made on and as of such date (except insofar as such representations
expressly relate to an earlier date), NWS and its Subsidiaries shall
be in compliance in all material respects with all the terms and
provisions contained herein and in the other Loan Documents required
to be observed or performed, and at the time of and immediately after
giving effect to such borrowing or issuance, no Event of Default or
event which with notice or lapse of time or both would constitute an
Event of Default shall have occurred and be continuing.
(c) The Lenders shall have received a Borrowing Base
Certificate in accordance with Section 5.05(d). After giving effect to
such new Revolving Credit Loan or the issuance of such Letter of
Credit, the Revolving Credit Exposure shall not exceed the lesser of
(i) the Total Revolving Credit Commitment and (ii) the then current
Borrowing Base.
Each borrowing hereunder and each issuance of a Letter of Credit hereunder
shall be deemed to be a representation and warranty by the Borrowers on the
date of such borrowing or issuance as to the matters specified in paragraph (b)
and the last sentence of paragraph (c) of this Section 4.01.
SECTION 4.02. Effectiveness. The effectiveness of this Agreement and
the obligations of the Lenders to make Loans hereunder and the obligation of
the Issuing Bank to
84
79
issue Letters of Credit on and after the Effective Date are subject to the
following additional conditions precedent:
(a) The Administrative Agent shall have received the
favorable written opinion of Katten Muchin & Zavis, counsel for the
Loan Parties, in substantially the form set forth in Exhibit E hereto
and covering such additional matters relating to the Loan Documents
and the Transactions as the Required Lenders shall reasonably request.
Such opinion shall be dated the Effective Date and addressed to the
Administrative Agent, the Issuing Bank and the Lenders.
(b) The Administrative Agent shall have received (i) copies
of the certificates of incorporation, as amended, of each Loan Party
certified by the Secretary of State of its jurisdiction of
organization, and a certificate or other satisfactory evidence as to
the good standing of such Loan Party from such Secretary of State;
(ii) certificates of the Secretary or an Assistant Secretary of each
Loan Party, dated the Effective Date and certifying (A) that attached
thereto are true and complete copies of the By-laws of such Loan Party
as in effect immediately prior to and at all times since a date prior
to the date of the resolutions described in (B) below, (B) that
attached thereto are true and complete copies of resolutions duly
adopted by the Board of Directors of such Loan Party authorizing the
execution, delivery and performance of the Loan Documents to which it
is or is to be a party and, in the case of the Borrowers, the
borrowings hereunder and all aspects of the Transactions requiring
approval by such Loan Party, and that such resolutions have not been
modified, rescinded or amended and are in full force and effect, (C)
that the certificate of incorporation of such Loan Party has not been
amended since the date of the last amendment thereto shown on the good
standing certificate furnished pursuant to (i) above, and (D) as to
the incumbency and specimen signature of each officer of such Loan
Party executing any Loan Document or any other document delivered or
executed by such Loan Party in connection herewith or therewith; (iii)
a certificate of another officer of each Loan Party as to the
incumbency and specimen signature of the Secretary or such Assistant
Secretary of such Loan Party; and (iv) such other documents as the
Required Lenders or Cravath, Swaine & Moore,
85
80
special counsel for the Administrative Agent, may reasonably request.
(c) The Administrative Agent shall have received a
certificate, dated the Effective Date and signed by a Financial
Officer of each Borrower, confirming compliance with the conditions
precedent set forth in paragraph (b) and the last sentence of
paragraph (c) of Section 4.01.
(d) The Administrative Agent shall have received, for the
account of each Lender with a Revolving Credit Commitment, a Revolving
Credit Note duly executed by the Borrowers payable to such Lender's
order and otherwise complying with the provisions of Section 2.05.
(e) The Guarantee Agreement shall have been duly executed by
the Guarantors, shall have been delivered to the Collateral Agent and
shall be in full force and effect.
(f) The Indemnity, Subrogation and Contribution Agreement
shall have been duly executed by the parties thereto, shall have been
delivered to the Collateral Agent and shall be in full force and
effect.
(g) The Security Agreement and the Pledge Agreement shall
have been duly executed by the parties thereto, shall have been
delivered to the Collateral Agent and shall be in full force and
effect and the Collateral Agent on behalf of the holders of the
Obligations shall continue to have a perfected, first priority
security interest in the Collateral as described therein.
(h) The Collateral Agent shall have received a duly completed
and executed Perfection Certificate (as defined in the Security
Agreement) and each document (including, without limitation, each
Uniform Commercial Code financing statement) required by law or
requested by the Collateral Agent to be filed, registered or recorded
in order to create and continue in favor of the Collateral Agent for
the benefit of the holders of the Obligations perfected security
interests in the Collateral under the Security Agreement shall have
been filed, registered or recorded in each jurisdiction in
86
81
which the filing, registration or recordation thereof is so required
or requested.
(i) The Collateral Agent shall have received the results of a
search of the Uniform Commercial Code filings made with respect to
each Loan Party in the jurisdictions in which Uniform Commercial Code
filings were made under the Original Credit Agreement or are to be
made pursuant to paragraph (h) above, which shall not have disclosed
any Lien, except Permitted Encumbrances.
(j) The Collateral Agent shall have received (i) the Mortgage
relating to the Kentucky Plant, in a form reasonably satisfactory to
the Collateral Agent and duly executed by the Kentucky Subsidiary,
(ii) a policy of title insurance, together with such co-insurance and
reinsurance as may be requested by the Collateral Agent, insuring the
Mortgage relating to the Kentucky Plant as a valid first Lien on the
Kentucky Plant, free of all Liens or other exceptions to title other
than Permitted Encumbrances and (iii) such amendments or modifications
to the other Mortgages as the Collateral Agent shall request in order
to provide for the continued protection, perfection and priority of
the Liens granted thereunder securing the Obligations.
(k) The Collateral Agent shall have received written
confirmation, in form and substance reasonably satisfactory to it,
from the title insurer(s) that provided policies of title insurance
insuring the Mortgages as valid first Liens on the Mortgaged
Properties, confirming that such policies of title insurance remain in
full force and effect after giving effect to this Agreement and any
amendment or modification of the Mortgages on the Effective Date.
(l) The Administrative Agent shall have received (i) all fees
payable to the Administrative Agent and the Lenders required to be
paid on or prior to the Effective Date and (ii) payment in respect of
all expenses of the Administrative Agent or the Collateral Agent
required to be paid or reimbursed by the Borrowers hereunder or under
any other Loan Document (to the extent that the amount thereof shall
have been communicated to the Borrowers prior to the Effective Date).
87
82
(m) The Borrowers shall have made arrangements satisfactory
to the Administrative Agent for (i) the termination of all lending
commitments under the Original Credit Agreement on the Effective Date
and (ii) the payment in full on the Effective Date of all
indebtedness, accrued interest thereon, accrued fees (including the
"Deferred Fees" referred to in the Original Credit Agreement) and
other obligations outstanding under the Original Credit Agreement on
the Effective Date (other than the Rollover Term Loans and accrued
interest thereon).
V. AFFIRMATIVE COVENANTS
Each Borrower jointly and severally covenants and agrees with each
Lender that, so long as this Agreement shall remain in effect or the principal
of or interest on any Note, any fee, or any other expense or amount payable
hereunder shall be unpaid, or any Letter of Credit remains outstanding, unless
the Required Lenders shall otherwise consent in writing, it will, and will
cause its Subsidiaries to:
SECTION 5.01. Corporate Existence. Do or cause to be done all things
necessary to preserve, renew and keep in full force and effect its legal
existence.
SECTION 5.02. Businesses and Properties. At all times do or cause to
be done all things necessary to preserve, renew, extend and keep in full force
and effect the rights, licenses, permits, franchises, authorizations, patents,
copyrights, trademarks and trade names then material to the conduct of its
businesses; maintain and operate such businesses in substantially the manner in
which they are presently conducted and operated by it (subject to changes in
the ordinary course of business and changes contemplated by Section 6.05(b));
comply in all material respects with all laws and regulations applicable to the
operation of such businesses (including any zoning, building, Environmental
Law, ordinance, code or approval or any building permits or any restrictions of
record or agreements affecting the Mortgaged Properties) and decrees and orders
of any Governmental Authority whether now in effect or hereafter enacted and
with all other applicable laws and regulations; take all action which may be
required to obtain, preserve, renew and extend all licenses, permits and other
authorizations which may be material to the
88
83
operation of such businesses; and at all times maintain, preserve and protect
all property material to the conduct of such businesses, defend such property
from all claims asserted against it, operate such property in a good and
workmanlike manner and keep such property in good repair, working order and
condition and from time to time make, or cause to be made, all needful and
proper repairs, renewals, additions, improvements and replacements thereto
necessary in the reasonable opinion of the Borrowers' management in order that
the business carried on in connection therewith may be properly conducted at
all times.
SECTION 5.03. Insurance. (i) Keep its insurable properties
adequately insured at all times by financially sound and reputable insurers,
(ii) maintain such other insurance, to such extent and against such risks,
including fire and other risks insured against by extended coverage, as is
customary with companies similarly situated and in the same or similar
businesses and as reasonably requested by the Lenders, (iii) maintain in full
force and effect public liability insurance against claims for personal injury
or death or property damage occurring upon, in, about or in connection with the
use of any properties owned, occupied or controlled by it and its Subsidiaries,
in such amount as it shall reasonably deem necessary and as reasonably
requested by the Lenders and (iv) maintain such other insurance as may be
required by any other Loan Document or as may be required by law.
SECTION 5.04. Obligations and Taxes. Pay and discharge all
indebtedness and obligations promptly (subject to any applicable grace period)
when due in accordance with their terms, and pay and discharge promptly when
due all royalties, taxes, assessments and governmental charges or levies
imposed upon it or upon its income or profits or in respect of its property
before the same shall become delinquent or in default, as well as all lawful
claims for labor, materials and supplies or otherwise that, if unpaid, might
give rise to Liens upon such properties or any part thereof; provided, however,
that the Borrowers and their Subsidiaries shall not be required to pay and
discharge or to cause to be paid and discharged any such tax, assessment,
charge, levy or claim so long as the validity or amount thereof shall be
contested in good faith by appropriate proceedings and the Borrowers and their
Subsidiaries shall, to the extent required by generally accepted accounting
principles applied on a consistent basis, have set aside on its books adequate
reserves with respect thereto and such contest operates to
89
84
suspend collection of the contested obligation, tax, assessment or charge and
enforcement of a Lien and, in the case of a Mortgaged Property, there is no
risk of forfeiture of such property.
SECTION 5.05. Financial Statements; Reports. Furnish to each Lender:
(a) within 120 days after the end of each fiscal year of NWS,
consolidated balance sheets of NWS and its Subsidiaries and related
consolidated statements of income and cash flows showing the financial
condition of NWS and its Subsidiaries as of the close of such fiscal
year and the results of their operations and cash flows during such
fiscal year, all audited by Coopers & Lybrand L.L.P. or other
independent certified public accountants of recognized national
standing and accompanied by an opinion of such accountants (which
shall not be qualified in any material respect) to the effect that
such financial statements fairly present the financial condition,
results of operations and cash flows of NWS and its Subsidiaries, in
accordance with generally accepted accounting principles consistently
applied (except for any changes with which such accountants concur in
writing);
(b) within 60 days after the end of each of the first three
fiscal quarters in each fiscal year of NWS, unaudited consolidated
balance sheets and related statements of income and cash flows showing
the financial condition of NWS and its Subsidiaries as of the close of
such quarter and the results of their operations and cash flows for
such quarter and the then elapsed portion of the fiscal year, all
certified by a Financial Officer of NWS as fairly presenting the
financial condition, results of operations and cash flows of NWS and
its Subsidiaries, in accordance with generally accepted accounting
principles applied consistently with those used in preparing the
statements delivered pursuant to (a) above and subject to normal
year-end audit adjustments;
(c) concurrently with any delivery under (a) or (b) above, a
certificate of a Financial Officer of NWS certifying (i) that no Event
of Default, or event or condition which with notice or lapse of time
or both would constitute an Event of Default, has occurred or, if such
an Event of Default or event or condition has
90
85
occurred, specifying the nature and extent thereof and (ii) setting
forth computations in reasonable detail satisfactory to the
Administrative Agent demonstrating (x) compliance with the covenants
contained in Sections 6.14, 6.15, 6.17 and 6.18 and (y) the ratio of
Adjusted Indebtedness to Consolidated Cash Flow Available for Fixed
Charges for purposes of determining the Applicable Margin;
(d) within 12 Business Days after the end of each calendar
month, a Borrowing Base Certificate certified by a Financial Officer
of each Borrower (which certificate the Lenders shall have the right
to audit);
(e) promptly upon their becoming available, copies of all
regular and periodic reports, proxy statements and other materials
filed by NWS with the Securities and Exchange Commission, or any
Governmental Authority succeeding to any of or all the functions of
said Commission, or with any national securities exchange, or
distributed to the stockholders of NWS or its Subsidiaries;
(f) prior to the commencement of each fiscal year of NWS,
financial projections for such fiscal year certified by a Financial
Officer to represent a good faith estimate of the Borrowers'
performance for such fiscal year based upon assumptions set forth
therein believed to be fair and reasonable in light of current
business conditions; and copies of any other material financial
projections and budgets prepared by or on behalf of the Borrowers and
approved by the Board of Directors of NWS; and
(g) promptly, from time to time, such other information
regarding the operations, business affairs, assets and financial
condition of NWS and its Subsidiaries as any Lender may reasonably
request including, but not limited to, monthly accounts receivable
aging and inventory schedules.
SECTION 5.06. Litigation and Other Notices. After either Borrower
has knowledge thereof, give each Lender prompt written notice of the following:
(a) the issuance by any court or governmental agency or
authority of any injunction, order or other restraint prohibiting, or
having the effect of prohib-
91
86
iting, the performance of this Agreement, any other Loan Document, or
the making of the Loans or the consummation of any Transaction or the
initiation of any litigation seeking any such injunction, order or
other restraint;
(b) the making of any claim or demand or the filing or
commencement of any other action, suit or proceeding against NWS or
its Subsidiaries, whether at law or in equity or by or before any
court or any Federal, state, municipal or other governmental agency or
authority as to which there is a reasonable possibility of an adverse
determination and which, if adversely determined, would (after giving
full effect to such determination) have a Material Adverse Effect;
(c) any Event of Default (other than a payment default or
default for failure to provide the financial statements required by
Section 5.05) or event or condition which, upon notice or lapse of
time or both, would constitute an Event of Default (other than a
payment default or default for failure to provide the financial
statements required by Section 5.05), specifying the nature and extent
thereof and the action (if any) which is proposed to be taken with
respect thereto; and
(d) any development in the business or affairs of NWS or its
Subsidiaries (other than events or circumstances affecting the
industry generally) which has resulted in or which is likely, in the
reasonable judgment of either Borrower, to have a Material Adverse
Effect.
SECTION 5.07. ERISA and Environmental Matters. (a) Comply in all
material respects with the applicable provisions of ERISA and the Code and (b)
furnish to the Administrative Agent as soon as possible after, and in any event
within 10 days after any Responsible Officer of either Borrower or any ERISA
Affiliate knows or has reason to know that, any ERISA Event has occurred that,
alone or together with any other ERISA Event could reasonably be expected to
result in liability of the Borrowers and their Subsidiaries in an aggregate
amount exceeding $4,000,000, a statement of a Financial Officer of the Borrower
setting forth details as to such ERISA Event and the action, if any, that the
Borrowers propose to take with respect thereto.
92
87
(b) Comply, and cause all lessees and other persons occupying its
properties to comply, in all material respects with all Environmental Laws
applicable to its operations and properties.
(c) If either Borrower obtains knowledge of any Environmental
Liability (other than as disclosed in the NWS 1995 Form 10-K) that alone, or
together with any other Environmental Liabilities, exceeds $5,000,000, promptly
notify the Administrative Agent thereof and, at the request of the Required
Lenders through the Administrative Agent, provide to the Lenders within 45 days
after such request, at the expense of the Borrowers, an environmental site
assessment report for the properties that are the subject of such Environmental
Liabilities prepared by an environmental consulting firm acceptable to the
Administrative Agent and indicating the presence or absence of Hazardous
Materials and the estimated cost of any compliance or remedial action in
connection with such properties.
SECTION 5.08. Maintaining Records; Access to Properties and
Inspections. Maintain financial records in accordance with generally accepted
accounting principles and, upon reasonable notice, at all reasonable times,
permit any authorized representative designated by the Administrative Agent or
any Lender to visit and inspect the properties of either Borrower or its
Subsidiaries and permit any authorized representative designated by the
Administrative Agent or any Lender access for purposes of auditing any
Borrowing Base Certificate delivered pursuant to Section 5.05(d) and the
existence and condition of the Accounts, inventory and other assets of either
Borrower and its Subsidiaries, reviewing the compliance by the Borrowers and
their Subsidiaries with the terms and conditions of this Agreement and the
other Loan Documents and discussing the affairs, finances and condition of
either Borrower or its Subsidiaries with such officers and employees of and
accountants for either Borrower or its Subsidiaries as the Administrative Agent
or any Lender shall deem appropriate.
SECTION 5.09. Use of Proceeds. Use the proceeds of the Revolving
Credit Loans solely for the purposes set forth in the preamble to this
Agreement.
SECTION 5.10. Collateral for the Obligations. Promptly upon
acquisition thereof, pledge all assets and properties (including all Accounts,
inventory, real property and other assets and properties) of each Borrower and
its Subsidiaries constituting Collateral under the Security Documents in each
case as security for the Obligations, maintain in full force and effect the
lockbox arrangements contemplated by the Security Agreement and perform all
obligations of each Borrower and its
93
88
Subsidiaries set forth in any Lockbox Agreement (including without limitation
issuing irrevocable directions to all Account Debtors to remit payments in
respect of Accounts to the lockboxes or accounts established with the
Collateral Agent or pursuant to any Lockbox Agreement).
SECTION 5.11. Further Assurances. Execute any and all further
documents, agreements and instruments, and take all further actions which may
be required under applicable law, or which the Administrative Agent, the
Collateral Agent or the Required Lenders may reasonably request, in order to
effectuate the transactions contemplated by the Loan Documents and in order to
grant, preserve, protect and perfect the validity and priority of the security
interests intended to be created by the Security Documents and Liens on any
properties and assets acquired pursuant to any Permitted Acquisition. In the
event that any Subsidiary is acquired or organized after the Effective Date,
the Borrowers will cause the capital stock of such Subsidiary to be pledged
pursuant to the Pledge Agreement and will cause such Subsidiary to become a
party to the Guarantee Agreement, the Indemnity, Subrogation and Contribution
Agreement, the Pledge Agreement and the Security Agreement, to execute and
deliver such other mortgages, deeds of trust, assignments, agreements,
documents and instruments as the Collateral Agent or the Required Lenders
reasonably request to grant Liens on its properties and assets securing the
Obligations and to file and record such documents and instruments as shall be
necessary or appropriate to perfect and protect all Liens so granted.
SECTION 5.12. Fiscal Year; Accounting. Maintain its present method
of accounting and current accounting policies (other than insignificant changes
of method) except as permitted by generally accepted accounting principles and
maintain its present fiscal year.
SECTION 5.13. Business Notices. The Borrowers shall give to Lenders
prompt notice of (a) any strikes or other similar labor disputes, (b) any
employment agreement or amendment thereto entered into after the Effective Date
covering the management of either Borrower or any collective bargaining
agreement or amendment thereto and (c) any
94
89
agreement or amendment thereto entered into for management or consulting
services with any Affiliate.
VI. NEGATIVE COVENANTS
Each Borrower jointly and severally covenants and agrees with each
Lender that, so long as this Agreement shall remain in effect or the principal
of or interest on any Note, any fee, or any other expense or amount payable
hereunder shall be unpaid, or any Letter of Credit remains outstanding, unless
the Required Lenders (or Lenders holding Loans, participations in Letters of
Credit and unused Commitments representing 90% of the sum of all outstanding
Loans, the Letter of Credit Exposure and unused Commitments, in the case of
Section 6.11) shall otherwise consent in writing, it will not, and will not
cause or permit any Subsidiary to:
SECTION 6.01. Indebtedness. Incur, create, assume or permit to exist
any Indebtedness, including pursuant to Guaranties, except:
(a) Indebtedness represented by the Loan Documents;
(b) the Letters of Credit;
(c) purchase money indebtedness not in excess of $4,000,000
aggregate principal amount outstanding at any time incurred in
connection with the purchase of property other than inventory,
recourse for which is limited solely to the assets financed thereby;
(d) vehicle leases or equipment leases in the ordinary course
of business consistent with past practice;
(e) in the case of any Subsidiary other than NWS/ Texas,
Indebtedness owing to one or both of the Borrowers permitted under
Section 6.16 and, in the case of the Borrowers, Indebtedness owing
from NWS to NWS/Texas or from NWS/Texas to NWS;
(f) Indebtedness of the Borrowers in respect of the purchase
price of scrap steel not in excess of $5,000,000 aggregate unpaid
amount at any time, secured
95
90
solely by Liens permitted under clause (i) of Section 6.02;
(g) unsecured Indebtedness (in addition to any unsecured
Indebtedness permitted under any other clause of this Section) not in
excess of $25,000,000 in the aggregate at any time;
(h) unsecured Indebtedness consisting of obligations in
respect of interest rate protection arrangements entered into to hedge
interest rate exposure on Indebtedness permitted hereunder;
(i) Indebtedness of NWS represented by the Senior Notes; and
(j) Indebtedness of NWS represented by the Impianti Notes and
the Tamini Notes;
provided, however, that (i) no Subsidiary (other than NWS/Texas) shall have any
Indebtedness that is not also permitted by Section 6.16 and (ii) without the
prior written consent of the Required Lenders, no Indebtedness shall be
incurred in reliance upon the provisions of the Senior Note Documents that
allow the incurrence of up to $15,000,000 of Indebtedness without regard to
compliance with the limitations thereunder generally applicable to the
incurrence of Indebtedness.
SECTION 6.02. Liens. Incur, create, assume or permit to
exist any Lien on any of its property or assets (including stock or
other securities of any person, including any Subsidiary), whether
owned at the date hereof or hereafter acquired, or assign or convey
any rights to or security interests in any future revenues, except
Liens created pursuant to the Security Documents and the following:
(a) Liens incurred and pledges and deposits made in the
ordinary course of business in connection with workmen's compensation,
unemployment insurance, pensions and other social security benefits;
(b) Liens securing the performance of bids, tenders, leases,
contracts, statutory obligations, surety, customs and appeal bonds and
other obligations of like nature (but in any case not securing
Indebtedness),
96
91
incurred as an incident to and in the ordinary course of business;
(c) Liens imposed by law, such as carriers', warehousemen's,
mechanics', materialmen's and vendors' liens, incurred in good faith
in the ordinary course of business and securing obligations which are
not yet due or which are being contested in good faith by appropriate
proceedings and as to which NWS and its Subsidiaries shall, to the
extent required by generally accepted accounting principles applied on
a consistent basis, have set aside on their books adequate reserves;
(d) Liens securing the payment of taxes, assessments and
governmental charges or levies, either (i) not delinquent or (ii)
being contested in good faith by appropriate legal or administrative
proceedings and as to which NWS and its Subsidiaries shall, to the
extent required by generally accepted accounting principles applied on
a consistent basis, have set aside on their books adequate reserves;
(e) zoning restrictions, easements, licenses, reservations,
provisions, covenants, conditions, waivers, restrictions on the use of
real property or minor irregularities of title to real property (and
with respect to leasehold encumbrances or interests, mortgages,
obligations, liens and other encumbrances incurred, created, assumed
or permitted to exist and arising by, through or under or asserted by
a landlord or owner of the leased property, with or without consent of
the lessee), none of which materially impairs the use of any parcel of
real property material to the operation of the business of either
Borrower or the value of such property for the purpose of such
business;
(f) Liens on property other than Accounts existing at the time
such property is acquired by NWS or a Subsidiary thereof; provided, in
each case, that (i) such Liens were not created in contemplation of
the acquisition by either Borrower or its Subsidiary of such property
and (ii) such Lien does not attach to any other property or assets;
(g) Liens securing purchase money indebtedness permitted by
Section 6.01(c); provided that such Liens shall attach only to the
property financed thereby and
97
92
the purchase price of all such property shall not exceed $6,000,000 in
the aggregate;
(h) Liens existing on the Effective Date and disclosed in the
financial statements referred to in Section 3.05 or the notes thereto
or set forth in Schedule 6.02 hereto;
(i) Liens securing Indebtedness permitted by Section 6.01(f);
provided that such Liens shall attach only to the property financed
thereby and not yet paid for; and
(j) extensions, renewals and replacements of Liens referred to
in paragraphs (a) through (g) of this Section 6.02; provided that any
such extension, renewal or replacement Lien shall be limited to the
property or assets covered by the Lien extended, renewed or replaced
and that the obligations secured by any such extension, renewal or
replacement Lien shall be in an amount not greater than the amount of
the obligations secured by the Lien extended, renewed or replaced.
SECTION 6.03. No Guarantees. Guarantee, endorse or otherwise
become contingently liable for any obligations or Indebtedness of any other
person, except (a) as otherwise expressly permitted by this Agreement and (b)
guarantees by either Borrower of obligations of each other or their
wholly-owned Subsidiaries; provided, however, that (i) clause (b) of the
foregoing shall not be construed to permit any guarantee of or other contingent
liability with respect to any Indebtedness not permitted under Section 6.01 and
(ii) neither Borrower shall guarantee any Indebtedness of any Subsidiary
acquired pursuant to a Permitted Acquisition if such Indebtedness was incurred
or created prior to such Permitted Acquisition, except that such Indebtedness
may be so guaranteed up to an aggregate principal amount of $5,000,000
outstanding at any time.
SECTION 6.04. Sale and Lease-Back Transactions. Enter into
any arrangement, directly or indirectly, with any person whereby either
Borrower or any Subsidiary thereof shall sell or transfer any property, real or
personal, and used or useful in its business, whether now owned or hereafter
acquired, and thereafter rent or lease such property or other property which
either Borrower or such Subsidiary intends to use for substantially the same
purpose or purposes as the property being sold or
98
93
transferred, without the prior written consent of the Required Lenders.
SECTION 6.05. Acquisitions, Consolidations, Mergers and Sales
of Assets. (a) Acquire all or substantially all the assets of, merge with or
into or consolidate or combine with, any other person or sell, lease, transfer
or assign to any person or otherwise dispose of (whether in one transaction or
a series of transactions) all or substantially all its assets (whether now
owned or hereafter acquired); provided, however, that the foregoing shall not
be construed to prohibit (i) the sale by NWS of all the outstanding capital
stock of NWS/Texas, or the sale, lease or other disposition by NWS/Texas of all
or substantially all its assets, in a transaction permitted under paragraph (b)
below or (ii) Permitted Acquisitions.
(b) Sell, lease, transfer or assign to any person or
otherwise dispose of any asset (including any stock of any other corporation)
without the prior written consent of the Required Lenders; provided, however,
that, without the prior written consent of the Required Lenders (i) the
Borrowers and their Subsidiaries may sell or otherwise dispose of assets in the
ordinary course of business, (ii) NWS may sell all the outstanding capital
stock of NWS/Texas in an arm's length transaction (in which case Section 9.17
shall apply), (iii) NWS/Texas may sell, lease or otherwise dispose of the
assets of the Houston Facility (including inventory and Accounts associated
therewith) in an arm's length transaction, (iv) the Borrowers may lease real
property to any supplier of scrap steel to the Borrowers for the purpose of
providing such supplier with a location at the site of the Borrowers'
facilities to store scrap steel to be purchased by the Borrowers, (v) the
Borrowers may sell, lease, assign, transfer or otherwise dispose of assets in
arm's length transactions, for cash consideration, with an aggregate fair
market value in any year not in excess of (A) $2,000,000 (in the case of an
arm's length transaction with a non-Affiliate, the fair market value shall be
deemed to be the cash consideration actually received), plus (B) an amount
equal to the excess of $2,000,000 over the fair market value of all assets
actually disposed of pursuant to this sentence in each prior fiscal year that
commenced after the Effective Date, less (C) an amount equal to the excess of
the fair market value of all assets actually disposed of pursuant to this
clause (v) in each prior fiscal year that commenced after the Effective Date
over $2,000,000 and (vi) NWS/Texas may transfer a parcel of vacant land
adjacent
99
94
to the Houston Facility to, or for the benefit of, a local Governmental
Authority to build a fire station, and the Collateral Agent may release such
parcel from the Liens of the Security Documents in connection therewith,
subject only to the satisfaction of the Collateral Agent that such transfer and
release is effected in a manner that does not adversely affect the Lien of the
Security Documents with respect to the Houston Facility.
SECTION 6.06. Investments, Loans and Advances. Make any
loan, advance or capital contribution to, make or hold any investment in,
purchase or commit to purchase or hold any stock or other securities or
evidences of obligations of or interests in, any person or entity, other than:
(i) Accounts in the ordinary course of business;
(ii) Permitted Investments;
(iii) loans and advances in the ordinary course of its
business to employees of NWS or any Subsidiary of NWS in an aggregate
outstanding principal amount not in excess of $1,000,000 on a
consolidated basis;
(iv) loans and advances to suppliers in the ordinary course of
its business in aggregate outstanding principal amount at any time not
in excess of $3,000,000 on a consolidated basis;
(v) capital contributions by NWS to any of its wholly-owned
Subsidiaries other than NWS/Delaware, cash capital contributions to
NWS/Delaware by NWS not in excess of $1,000 on a consolidated basis,
and noncash capital contributions to NWS/Delaware by NWS to the extent
permitted under Section 6.16;
(vi) dated accounts receivable from customers in the ordinary
course of business; provided that the aggregate outstanding amount of
such receivables in excess of 90-day dating shall not exceed
$7,000,000 on a consolidated basis;
(vii) securities of an Account Debtor or any successor thereto
received as settlement or partial settlement of an Account in
connection with the reorganization of such Account Debtor;
100
95
(viii) loans to NWS or a wholly-owned Subsidiary of NWS
permitted under subsection (e) of Section 6.01; and
(ix) Permitted Acquisitions.
SECTION 6.07. Transactions with Affiliates. Enter into any
transaction with any Affiliate except in the ordinary course of business and
upon fair and reasonable terms no less favorable than the Borrowers could, in
the good-faith judgment of the Board of Directors of NWS, obtain or could
become entitled to in an arm's-length transaction with a person or entity which
was not an Affiliate; provided that the foregoing shall not apply to
transactions between or among the Borrowers and their wholly-owned Subsidiaries
not involving any other Affiliate.
SECTION 6.08. Line of Business. Engage in any business other
than the business in which it is presently engaged or materially change the
nature of its business as presently conducted.
SECTION 6.09. Credit Standards. Modify in any material
respect the credit standards and procedures, the collection policies or the
loss recognition procedures with respect to the creation or collection of
Accounts from those in effect at NWS on July 31, 1995.
SECTION 6.10. Dividends. Declare or pay, directly or
indirectly, any dividends (other than in shares of its common stock) or make
any other distribution, whether in cash, property, securities or a combination
thereof, with respect to (whether by reduction of capital or otherwise) any
shares of capital stock, or directly or indirectly redeem, purchase, retire or
otherwise acquire for a consideration, any shares of any class of capital
stock, or set apart any sum for the aforesaid purposes, except that the
Subsidiaries of either Borrower may pay dividends to such Borrower.
Notwithstanding the foregoing, NWS may repurchase shares of its Common Stock
pursuant to Permitted Equity Purchases.
SECTION 6.11. Priority of Loan Payments. Directly or
indirectly make any optional payment, retirement, repurchase or redemption (a)
on account of the principal of any Indebtedness, other than the Loans and the
Indebtedness referred to in clauses (c), (e), (f) and (g) of Section 6.01, or
(b) on account of the par, stated or liquidation value of any preferred stock
or other capital
101
96
stock incurred or issued by NWS whether by prepayment, redemption, refinancing,
exchange, defeasance or otherwise, except Permitted Equity Purchases.
SECTION 6.12. Amendment of Constituent Documents and Certain
Agreements. (a) Permit any amendment or modification adverse to the interests
of the Lenders to be made to the Certificate of Incorporation or By-laws of any
Loan Party.
(b) Permit any amendment or modification to be made to the
Senior Note Documents or the terms and conditions of the Senior Notes.
SECTION 6.13. Plan of Liquidation, etc. Cause or permit any
liquidation of, or the adoption of any plan of liquidation with respect to,
either Borrower or any of its Subsidiaries, or distribute any assets of either
Borrower or any of its Subsidiaries without the prior written consent of the
Required Lenders; provided that the assets of any Subsidiary may be distributed
to NWS.
SECTION 6.14. Current Ratio. On or after the Effective Date,
permit (other than as a direct result of the closure, sale or other disposition
of the Houston Facility or the sale or other disposition by NWS of all the
capital stock of NWS/Texas, and then only to the extent attributable to such
event) at any time the ratio of Current Assets to Current Liabilities to be
less than 1.3 to 1.
SECTION 6.15. Fixed Charge Coverage Ratio. Permit the ratio
of Consolidated Cash Flow Available for Fixed Charges to Consolidated Fixed
Charges, in each case as of the end of any fiscal quarter of NWS ending after
the Effective Date determined for the period of four consecutive fiscal
quarters ending on such date, to be less than 2.0 to 1.
SECTION 6.16. No Subsidiaries. Have any Subsidiaries other
than (a) NWS/Texas; (b) NWS/Delaware, provided that (i) the sole business
activity of NWS/Delaware shall be to perform services for the Borrowers, (ii)
NWS/Delaware shall not own any substantial assets, (iii) NWS/Delaware shall not
incur any Indebtedness other than (A) vehicle leases or equipment leases in the
ordinary course of business, (B) purchase money indebtedness not in excess of
$500,000 aggregate principal amount incurred in connection with the purchase of
property other than
102
97
inventory, recourse for which is limited solely to the assets financed thereby,
(C) other Indebtedness owed to NWS or NWS/Texas in an aggregate principal
amount outstanding at any time not to exceed $500,000 and (D) Indebtedness
consisting of a Guarantee of the Obligations and (iv) the Borrowers and their
other Subsidiaries shall not transfer any substantial assets (including any
substantial amount of cash) to NWS/Delaware; (c) the Kentucky Subsidiary,
provided that (i) the sole business activity of the Kentucky Subsidiary shall
be the acquisition, construction, ownership and operation of the assets
comprising the Kentucky Plant and (ii) the Kentucky Subsidiary shall not incur
any Indebtedness other than Indebtedness owed to NWS or NWS/Texas and
Indebtedness consisting of a Guarantee of the Obligations; and (d) any
Subsidiary acquired pursuant to a Permitted Acquisition, provided that any such
Subsidiary shall not incur any Indebtedness other than Indebtedness owed to NWS
or NWS/Texas, Indebtedness consisting of a Guarantee of the Obligations and
Indebtedness that is both outstanding at the time such Subsidiary is acquired
by NWS and is permitted under clause (g) of Section 6.01; provided further that
all the outstanding shares of capital stock of each Subsidiary shall be owned
directly by NWS.
SECTION 6.17. Capital Expenditures. Make or permit Capital
Expenditures during any fiscal year in excess of the amount set forth below
opposite such fiscal year:
Fiscal Period Amount
------------- ------
Fiscal Year Ending July 31, 1996 $55,000,000
Fiscal Year Ending July 31, 1997 $50,000,000
Fiscal Year Ending July 31, 1998 $35,000,000
Fiscal Year Ending July 31, 1999 $35,000,000
Fiscal Year Ending July 31, 2000 or thereafter $37,000,000
provided, however, that (i) the amount set forth above with respect to any
fiscal year shall be increased by the amount, if any, by which the Net Cash
Proceeds received during such fiscal year in respect of any Prepayment Event
described in clause (2) or (3) of the definition of such term exceeds the
aggregate principal amount of Rollover Term Loans prepaid with respect to such
Prepayment Event pursuant to Section 2.12(d) or deposited or applied pursuant
to Section 2.12(g) in lieu of such prepayment, (ii) the amount
103
98
set forth above with respect to any fiscal year (other than the fiscal year
ending July 31, 1996) shall be increased by the amount, if any, by which the
amount of Excess Cash Flow for the immediately preceding fiscal year exceeds
the aggregate principal amount of Rollover Term Loans prepaid pursuant to
Section 2.12(e) by reference to such Excess Cash Flow, (iii) if Capital
Expenditures made in any fiscal year are less than the applicable maximum
amount set forth above opposite such fiscal year (plus the additional amount,
if any, of Capital Expenditures permitted in such fiscal period pursuant to
clauses (i) and (ii) above, but excluding the additional amount, if any, of
Capital Expenditures permitted in such fiscal period as a result of a carryover
from the preceding fiscal period by reason of this clause), then an amount
equal to the lesser of such shortfall or $15,000,000 shall be carried forward
and added to the amount of Capital Expenditures permitted in the next fiscal
year; provided further, however, that the amount of any consideration paid or
given in connection with a Permitted Acquisition in reliance upon sub- clause
(B) or (C) of clause (iii) of the definition of "Permitted Acquisition" shall
not thereafter be available for Capital Expenditures pursuant to the foregoing
proviso.
SECTION 6.18. Leverage Ratio. Permit the Leverage Ratio to
be greater than (a) 0.66 to 1, at any time on or prior to and including July
31, 1996, or (b) 0.61 to 1, at any time after July 31, 1996.
VII. EVENTS OF DEFAULT
In case of the happening of any of the following events
(herein called "Events of Default"):
(a) any representation or warranty made, or deemed pursuant to
Section 4.01, on or after the Effective Date in or in connection with
this Agreement or the Notes or the other Loan Documents or the
borrowings hereunder or any report, certificate, financial statement
or other instrument furnished in connection with this Agreement or the
execution and delivery of the Notes or the borrowings hereunder shall
prove to have been false or misleading in any material respect when
made, deemed made or furnished;
(b) default shall be made in the payment of any principal of,
or any installment of principal of, any
104
99
Note, or any reimbursement obligation in respect of any Letter
of Credit Disbursement, when and as the same shall become due and
payable, whether at the due date thereof or at a date fixed for
prepayment thereof or by acceleration thereof or otherwise;
(c) default shall be made in the payment of (i) any interest
on any Note or any Commitment Fee or any fee payable pursuant to
Section 2.18(f) when and as the same shall become due and payable and
such default shall continue unremedied for a period of five days, or
(ii) any other fee or amount (other than an amount referred to in
paragraph (b) above) due under this Agreement or any other Loan
Document, when and as the same shall become due and payable, and such
default shall continue unremedied for a period of 10 days after demand
for payment thereof shall have been made;
(d) default shall be made in the due observance or performance
of any covenant, condition or agreement contained in Section 5.01,
5.06 or 5.09 or Article VI; provided, however, in the case of Section
5.06(d), such default shall continue unremedied for a period of 30
days;
(e) at any time that any Letter of Credit or any Revolving
Credit Loans are outstanding, default shall be made in delivering the
Borrowing Base Certificate as required by Section 5.05(d) and such
default shall continue unremedied for five days;
(f) default shall be made in the due observance or performance
of any other covenant, condition or agreement to be observed or
performed pursuant to this Agreement or any other Loan Document and
such default shall continue unremedied for 30 days after written
notice thereof from the Administrative Agent or a Lender;
(g) either Borrower or any Subsidiary thereof shall (i)
voluntarily commence any proceeding or file any petition seeking
relief under Title 11 of the United States Code or any other Federal
or state bankruptcy, insolvency, liquidation or similar law, (ii)
consent to the institution of, or fail to contravene in a timely and
appropriate manner, any such proceeding or the filing of any such
petition, (iii) apply for or consent to the appointment of a
105
100
receiver, trustee, custodian, sequestrator or similar official for
either Borrower or any Subsidiary or for a substantial part of either
Borrower's or one of its Subsidiaries' property or assets, (iv) file
an answer admitting the material allegations of a petition filed
against it in any such proceeding, (v) make a general assignment for
the benefit of creditors, (vi) become unable, admit in writing its
inability or fail generally to pay its debts as they become due or
(vii) take corporate action for the purpose of effecting any of the
foregoing;
(h) an involuntary proceeding shall be commenced or an
involuntary petition shall be filed in a court of competent
jurisdiction seeking (i) relief in respect of either Borrower or any
of its Subsidiaries or of a substantial part of the property or assets
of either Borrower or a Subsidiary under Title 11 of the United States
Code or any other Federal or state bankruptcy, insolvency,
receivership or similar law, (ii) the appointment of a receiver,
trustee, custodian, sequestrator or similar official for either
Borrower or a Subsidiary or for a substantial part ofthe property of
either Borrower or a Subsidiary thereof or (iii) thewinding- up or
liquidation of either Borrower or a Subsidiary; and such proceeding or
petition shall continue undismissed for 60 days or an order or decree
approving or ordering any of the foregoing shall continue unstayed and
in effect for 60 days;
(i) default shall be made with respect to any Indebtedness of
either Borrower or any Subsidiary in an aggregate amount in excess of
$4,000,000 if the effect of any such default shall be to accelerate,
or to permit the holder or obligee of any Indebtedness (or any trustee
on behalf of such holder or obligee) to accelerate, the maturity of
such Indebtedness; or any payment of principal or interest, regardless
of amount, on any Indebtedness of either Borrower or a Subsidiary in
an aggregate amount in excess of $2,000,000 shall not be paid when
due, whether at maturity, by acceleration or otherwise (after giving
effect to any period of grace specified in the instrument evidencing
or governing such Indebtedness);
(j) an ERISA Event shall have occurred that, in the opinion of
the Required Lenders, when taken together with all other such ERISA
Events, could
106
101
reasonably be expected to result in liability of the Borrowers
and their ERISA Affiliates in an aggregate amount in excess of
$35,000,000 or requiring payment exceeding $6,000,000 in any year;
(k) a judgment for the payment of money (which alone, or when
aggregated with all such other unpaid judgments to the extent not
fully covered by insurance from financially sound and reputable
insurers against the Borrowers and their Subsidiaries at such time, is
for $5,000,000 or more) shall be rendered by a court or other tribunal
against either Borrower or any of its Subsidiaries and shall remain
unpaid or otherwise undischarged and unstayed for a period of 60 days,
or any action is taken by the judgment creditor in respect of such
judgment to levy thereon;
(l) this Agreement, any Note, the Guarantee Agreement, the
Indemnity, Subrogation and Contribution Agreement or any of the
Security Documents shall for any reason cease to be, or be asserted by
any Loan Party not to be, a legal, valid and binding obligation of any
Loan Party that is a party thereto, enforceable in accordance with its
terms, or any Lien purported to be created by any of the Security
Documents shall for any reason (other than failure of the Collateral
Agent to maintain possession of Collateral delivered to it under the
Pledge Agreement) cease to be, or be asserted by any Loan Party not to
be, a valid, first priority (subject only to Permitted Encumbrances
referred to in clauses (c) through (i) of Section 6.02) perfected
security interest in any Collateral; or
(m) a Change in Control shall occur;
then, and in any such event (other than an event with respect to a Borrower
described in paragraph (g) or (h) above), and at any time thereafter during the
continuance of such event, the Administrative Agent may, but only at the request
of the Required Lenders (and upon such request the Administrative Agent shall),
by written or telegraphic notice to the Borrowers, take either or both of the
following actions at the same or different times (in addition to any other
remedies available under any Security Document or otherwise): (i) terminate
forthwith the Total Revolving Credit Commitments of the Lenders hereunder and
(ii) declare the Notes then outstanding to be forthwith due and payable
whereupon the principal of the Notes, together
107
102
with accrued interest thereon and any unpaid accrued fees and all other
liabilities of the Borrowers accrued hereunder, shall become forthwith due and
payable both as to principal and interest, without presentment, demand, protest
or any other notice of any kind, all of which are hereby expressly waived by the
Borrowers, anything contained herein or in any Note to the contrary
notwithstanding; and in any event with respect to a Borrower described in
paragraph (g) or (h) above, the Total Revolving Credit Commitments of the
Lenders shall automatically terminate and the Notes shall automatically
become due and payable, both as to principal and interest, together with all
accrued and unpaid fees and all other liabilities of the Borrowers accrued
hereunder, without presentment, demand, protest or other notice of any kind, all
of which are hereby expressly waived by the Borrowers, anything contained herein
or in any Note to the contrary notwithstanding. In addition to the foregoing
remedies the Collateral Agent may, upon and at any time during the continuance
of any Event of Default, exercise remedies under the Security Documents, or any
of them, may (and, at the request of any Lender holding a Rollover Term Loan
secured by funds held in a Fixed Rate Prepayment Account, shall) apply any funds
in the Fixed Rate Prepayment Account to payment of the related Rollover Term
Loans and at the request of the Required Lenders, shall demand that the
Borrowers provide, and thereupon the Borrowers shall provide, cash collateral in
respect of the outstanding Letters of Credit in accordance with Section 2.18(j).
VIII. THE ADMINISTRATIVE AGENT AND THE COLLATERAL AGENT
In order to expedite the transactions contemplated by this
Agreement, Chemical Bank is hereby appointed to act as Administrative Agent and
Collateral Agent on behalf of the Lenders and the Issuing Bank (for purposes of
this Article VIII, the Administrative Agent and the Collateral Agent are
referred to collectively as the "Agents"). Each of the Lenders and the Issuing
Bank hereby irrevocably authorizes the Agents to take such actions on behalf of
such Lender or the Issuing Bank and to exercise such powers as are specifically
delegated to the Agents by the terms and provisions hereof and of the other
Loan Documents, together with such actions and powers as are reasonably
incidental thereto. The Administrative Agent is hereby expressly authorized by
the Lenders and the Issuing Bank, without hereby limiting any implied
authority, (a) to receive on behalf of the Lenders and the Issuing Bank all
payments of
108
103
principal of and interest on the Loans, all payments in respect of Letter of
Credit Disbursements and all other amounts due to the Lenders hereunder, and
promptly to distribute to each Lender or the Issuing Bank its proper share of
each payment so received; (b) to give notice on behalf of each of the Lenders
to the Borrowers of any Event of Default specified in this Agreement of which
the Administrative Agent has actual knowledge acquired in connection with its
agency hereunder; and (c) to distribute to each Lender copies of all notices,
financial statements and other materials delivered by the Borrowers or any
other Loan Party pursuant to this Agreement or the other Loan Documents as
received by the Administrative Agent. Without limiting the generality of the
foregoing, the Agents are hereby expressly authorized to execute any and all
documents (including releases) with respect to the Collateral and the rights of
the Secured Parties (as defined in the Security Agreement) with respect
thereto, as contemplated by and in accordance with the provisions of this
Agreement and the Security Documents.
Neither the Agents, their affiliates nor any of their respective
directors, officers, employees or agents shall be liable as such for any action
taken or omitted by any of them except for its or his own gross negligence or
wilful misconduct, or be responsible for any statement, warranty or
representation herein or the contents of any document delivered in connection
herewith, or be required to ascertain or to make any inquiry concerning the
performance or observance by the Borrowers or any other Loan Party of any of the
terms, conditions, covenants or agreements contained in any Loan Document. The
Agents shall not be responsible to the Lenders for the due execution,
genuineness, validity, enforceability or effectiveness of this Agreement or any
other Loan Documents, instruments or agreements. The Agents shall in all cases
be fully protected in acting, or refraining from acting, in accordance with
written instructions signed by the Required Lenders (or such lesser or greater
percentage of the Lenders as may be required in this Agreement under the
circumstances) and, except as otherwise specifically provided herein, such
instructions and any action or inaction pursuant thereto shall be binding on all
the Lenders. Each Agent shall, in the absence of knowledge to the contrary, be
entitled to rely on any instrument or document believed by it in good faith to
be genuine and correct and to have been signed or sent by the proper person or
persons. Neither the Agents, their affiliates nor any of
109
104
their respective directors, officers, employees or agents shall have any
responsibility to the Borrowers or any other Loan Party on account of the
failure of or delay in performance or breach by any Lender or the Issuing Bank
of any of its obligations hereunder or to any Lender or the Issuing Bank on
account of the failure of or delay in performance or breach by any other Lender
or the Issuing Bank or the Borrowers or any other Loan Party of any of their
respective obligations hereunder or under any other Loan Document or in
connection herewith or therewith. Each of the Agents may execute any and all
duties hereunder by or through agents or employees and shall be entitled to
rely upon the advice of legal counsel selected by it with respect to all
matters arising hereunder and shall not be liable for any action taken or
suffered in good faith by it in accordance with the advice of such counsel.
The Lenders hereby acknowledge that neither Agent shall be under any
duty to take any discretionary action permitted to be taken by it pursuant to
the provisions of this Agreement or any other Loan Document unless it shall be
requested in writing to do so by the Required Lenders.
Subject to the appointment and acceptance of a successor Agent as
provided below, either Agent may resign at any time by notifying the Lenders and
the Borrowers. Upon any such resignation, the Required Lenders shall have the
right to appoint a successor. If no successor shall have been so appointed by
the Required Lenders and shall have accepted such appointment within 30 days
after the retiring Agent gives notice of its resignation, then the retiring
Agent may, on behalf of the Lenders, appoint a successor Agent which shall be a
bank with an office in New York, New York, having a combined capital and surplus
of at least $500,000,000 or an affiliate of any such bank. Upon the acceptance
of any appointment as Agent hereunder by a successor, such successor shall
succeed to and become vested with all the rights, powers, privileges and duties
of the retiring Agent and the retiring Agent shall be discharged from its duties
and obligations hereunder. After the Agent's resignation hereunder, the
provisions of this Article and Section 9.04 shall continue in effect for its
benefit in respect of any actions taken or omitted to be taken by it while it
was acting as Agent.
With respect to the Loans made by it hereunder, each Agent in its
individual capacity and not as Agent shall have the same rights and powers as
any other Lender and may
110
105
exercise the same as though it were not an Agent, and the Agents and their
affiliates may accept deposits from, lend money to and generally engage in any
kind of business with either Borrower or any Subsidiary or other Affiliate
thereof as if it were not an Agent.
Each Lender agrees (a) to reimburse the Agents, on demand, in the amount
of its pro rata share (based on its ratable share of the sum of the Rollover
Term Loans, Revolving Credit Exposure and unused Revolving Credit Commitments)
of any expenses incurred for the benefit of the Lenders by the Agents, including
counsel fees and compensation of agents and employees paid for services rendered
on behalf of the Lenders, to the extent required to be reimbursed by the
Borrowers and not so reimbursed and (b) to indemnify and hold harmless each
Agent and any of its directors, officers, employees or agents, on demand, in the
amount of such pro rata share, from and against any and all liabilities, taxes,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever that may be imposed
on, incurred by or asserted against it in its capacity as Agent or any of them
(acting on behalf of the Agent and not on behalf of the Agent in its capacity as
a Lender hereunder) in any way relating to or arising out of this Agreement or
any other Loan Document or any action taken or omitted by it or any of them
under this Agreement or any other Loan Document, to the extent the same is
required to be paid or reimbursed by the Borrowers or any other Loan Party and
is not so paid or reimbursed, provided that no Lender shall be liable to an
Agent or any such other indemnified person for any portion of such liabilities,
taxes, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements to have resulted from the gross negligence or
wilful misconduct of such Agent or any of its directors, officers, employees or
agents.
Each Lender acknowledges that it has, independently and without reliance
upon the Agents or any other Lender and based on such documents and information
as it has deemed appropriate, made its own credit analysis and decision to enter
into this Agreement. Each Lender also acknowledges that it will, independently
and without reliance upon the Agents or any other Lender and based on such
documents and information as it shall from time to time deem appropriate,
continue to make its own decisions in taking or not taking action under or based
upon this
111
106
Agreement or any other Loan Document, any related agreement or any document
furnished hereunder or thereunder.
IX. MISCELLANEOUS
SECTION 9.01. Notices. Except as otherwise expressly provided herein,
notices and other communications provided for herein shall be in writing and
shall be delivered by hand or overnight courier service, mailed by certified or
registered mail or sent by telecopy as follows (or, in the case of telegraphic
communication, delivered by telex, graphic scanning or other telegraphic
communications equipment) addressed,
(a) if to the Borrowers, in care of NWS at 121 Wallace Street,
Sterling, Illinois 61081, Attention of Chief Financial Officer;
(b) if to the Administrative Agent, to Chemical Bank Agency
Services Corporation, Grand Central Tower, 140 East 45th Street, New
York, New York 10017, Attention of Janet Belden (Telecopy No. (212)
270-0002), with a copy to Chemical Bank, at 270 Park Avenue, New York,
New York 10017, Attention of James H. Ramage (Telecopy No.
212-270-2625); and
(c) if to any Lender, at its address set forth in Schedule
2.01 or 2.02, as applicable, or its Administrative Questionnaire.
All notices and other communications given to any party hereto in accordance
with the provisions of this Agreement shall be deemed to have been given upon
receipt, in each case addressed to such party as provided in this Section 9.01
or in accordance with the latest unrevoked direction from such party.
SECTION 9.02. Survival of Agreement. All covenants,
agreements, representations and warranties made by any Loan Party herein, in
any other Loan Document and in the certificates or other instruments prepared
or delivered in connection with this Agreement or any other Loan Document shall
be considered to have been relied upon by the Lenders and the Issuing Bank and
shall survive the making by the Lenders of the Loans and the issuance of
Letters of Credit by the Issuing Bank, regardless of any investigation made by
the Lenders or the Issuing Bank or on their behalf and shall
112
107
continue in full force and effect as long as the principal of or any accrued
interest on any Note, any Commitment Fee or any other fee or amount payable
under the Notes or this Agreement or any other Loan Document is outstanding and
unpaid and so long as the Revolving Credit Commitments have not been
terminated.
SECTION 9.03. Successors and Assigns; Participations. (a)
Whenever in this Agreement any of the parties hereto is referred to, such
reference shall be deemed to include the successors and assigns of such party;
and all covenants, promises and agreements by or on behalf of the Borrowers or
the Lenders that are contained in this Agreement shall bind and inure to the
benefit of their respective successors and assigns. Neither Borrower may
assign or transfer any of its rights or obligations hereunder without the prior
written consent of all the Lenders.
(b) Each Lender may assign to one or more assignees all or a
portion of its interests, rights and obligations under this Agreement
(including, without limitation, all or a portion of its Rollover Term Loan or
all or a portion of any of its Revolving Credit Commitment and the same portion
of the related Revolving Credit Loans at the time owing to it and the related
participations in Letters of Credit and the Note or Notes held by it);
provided, however, that (i) except in the case of an assignment to a Lender or
an affiliate of a Lender or for an assignment by a Lender to a Federal Reserve
Bank, the Administrative Agent and NWS must give their prior written consent by
countersigning the Assignment and Acceptance (which consents shall not be
unreasonably withheld), (ii) each such assignment of a Revolving Credit
Commitment or any Revolving Credit Exposure shall be of a constant, and not a
varying, percentage of all the assigning Lender's rights and obligations under
this Agreement in respect of its Revolving Credit Commitment, Revolving Credit
Loans and participations in Letters of Credit to be assigned, (iii) in the case
of a partial assignment, each such assignment shall be in an amount which is
not less than $5,000,000 (unless NWS shall consent to a partial assignment of a
lesser amount) and is an integral multiple of $1,000,000 (provided, however,
that any assignment may in any event be equal to the entire amount of the
Rollover Term Loan or the entire amount of the Revolving Credit Loans,
participations in Letters of Credit and Revolving Credit Commitment of the
assigning Lender), (iv) the parties to each such assignment
113
108
shall execute and deliver to the Administrative Agent, for its acceptance and
recording in the Register, an Assignment and Acceptance, together with any Note
subject to such assignment and a processing and recordation fee of $3,500 and
(v) the assignee, if it shall not be a Lender, shall deliver to the
Administrative Agent an Administrative Questionnaire. Upon such execution,
delivery, acceptance and recording, from and after the effective date specified
in each Assignment and Acceptance, which effective date shall be at least five
Business Days after the execution thereof, (x) the assignee thereunder shall be
a party hereto and, to the extent provided in such Assignment and Acceptance,
have the rights and obligations of a Lender hereunder and (y) the assigning
Lender thereunder shall, to the extent provided in such assignment, be released
from its obligations under this Agreement (and, in the case of an Assignment
and Acceptance covering all or the remaining portion of an assigning Lender's
rights and obligations under this Agreement, such Lender shall cease to be a
party hereto. Assignments in accordance with this paragraph are not required
to be made pro rata as between the assigning Lender's Rollover Term Loan, on
the one hand, and Revolving Credit Commitment and Revolving Credit Exposure, on
the other.
(c) By executing and delivering an Assignment and Acceptance, the
Lender assignor thereunder and the assignee thereunder confirm to and agree with
each other and the other parties hereto as follows: (i) other than the
representation and warranty that it is the legal and beneficial owner of the
interest being assigned thereby free and clear of any adverse claim, such Lender
assignor makes no representation or warranty and assumes no responsibility with
respect to any statements, warranties or representations made in or in
connection with this Agreement or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of this Agreement, any other
Loan Document or any other instrument or document furnished pursuant hereto;
(ii) such Lender assignor makes no representation or warranty and assumes no
responsibility with respect to the financial condition of the Loan Parties or
the performance or observance by the Loan Parties of any of their obligations
under this Agreement or any other instrument or document furnished pursuant
hereto; (iii) such assignee represents and warrants that it is legally
authorized to enter into such Assignment and Acceptance; (iv) such assignee
confirms that it has received a copy of this Agreement, together with copies of
the most recent
114
109
financial statements referred to in Section 3.05 or delivered under Section
5.05 and such other documents and information as it has deemed appropriate to
make its own credit analysis and decision to enter into such Assignment and
Acceptance; (v) such assignee will, independently and without reliance upon the
Administrative Agent, the Collateral Agent, such Lender assignor or any other
Lender and based on such documents and information as it shall deem appropriate
at the time, continue to make its own credit decisions in taking or not taking
action under this Agreement; (vi) such assignee appoints and authorizes the
Administrative Agent and the Collateral Agent, respectively, to take such
action as agent on its behalf and to exercise such powers under this Agreement
as are delegated to the Administrative Agent or the Collateral Agent by the
terms hereof or any other Loan Document, together with such powers as are
reasonably incidental thereto; and (vii) such assignee agrees that it will
perform in accordance with their terms all of the obligations which by the
terms of this Agreement are required to be performed by it as a Lender.
(d) The Administrative Agent shall maintain at one of its offices in
The City of New York a copy of each Assignment and Acceptance delivered to it
and a register for the recordation of the names and addresses of the Lenders and
the Revolving Credit Commitments of, and principal amount of the Loans owing to,
each Lender from time to time (the "Register"). The entries in the Register
shall be conclusive, in the absence of manifest error, and the Borrowers, the
Administrative Agent, the Collateral Agent, the Issuing Bank and the Lenders may
treat each person whose name is recorded in the Register as a Lender hereunder
for all purposes of this Agreement. The Register shall be available for
inspection by the Borrowers, the Collateral Agent, the Issuing Bank or any
Lender at any reasonable time and from time to time upon reasonable prior
notice.
(e) Upon its receipt of an Assignment and Acceptance executed by an
assigning Lender and an assignee together with any Note subject to such
assignment, and the fee referred to in Section 9.03(b), the Administrative Agent
shall, if such Assignment and Acceptance has been completed and is in the form
of Exhibit B hereto and, if required, the Administrative Agent and NWS have
consented to such assignment as contemplated by paragraph (b) above, (i) accept
such Assignment and Acceptance, (ii) record the information contained therein in
the Register, and
115
110
(iii) give prompt notice thereof to the Borrowers. Promptly after receipt of
notice, the Borrowers, at their own expense, shall execute and deliver to the
Administrative Agent in exchange for the surrendered Note or Notes, a new Note
or Notes of the same type to the order of such assignee in an amount equal to
the applicable Revolving Credit Commitment or Rollover Term Loans assigned to
it pursuant to such Assignment and Acceptance and, if the assigning Lender has
retained an interest hereunder, a new Note or Notes to the order of the
assigning Lender in an amount equal to the Revolving Credit Commitment or
Rollover Term Loans retained by it hereunder. Such new Notes shall be in an
aggregate principal amount equal to the aggregate principal amount of such
surrendered Notes, shall be dated the effective date of such Assignment and
Acceptance and shall otherwise be in substantially the form of Exhibit A-1 or
Exhibit A-2 hereto, as appropriate. Canceled Notes shall be returned to the
Borrowers.
(f) Each Lender may without the consent of the Borrowers sell
participations to one or more banks or other entities in all or a portion of its
rights and obligations under this Agreement (including, without limitation, all
or a portion of its Rollover Term Loan or all or a portion of its Revolving
Credit Commitment and the Revolving Credit Loans owing to it and the
participations in Letters of Credit and the Note or Notes held by it); provided,
however, that (i) such Lender's obligations under this Agreement shall remain
unchanged, (ii) such Lender shall remain solely responsible to the other parties
hereto for the performance of such obligations, (iii) the participating banks or
other entities shall be entitled to the cost protection provisions contained in
Sections 2.13 through 2.15 and 2.19, (iv) the Borrowers, the Administrative
Agent and the other Lenders shall continue to deal solely and directly with such
Lender in connection with such Lender's rights and obligations under this
Agreement and (v) the selling Lender shall retain the sole right to approve
amendments, modifications and waivers under the Loan Documents (other than
amendments, modifications or waivers decreasing any fees payable hereunder or
the amount of principal of or the rate at which interest is payable on the
Loans, extending any scheduled principal payment date or date fixed for the
payment of interest on the Loans, increasing or extending the Commitments or
releasing all or substantially all the Collateral).
116
111
(g) Any Lender may, in connection with any assignment or participation
or proposed assignment or participation pursuant to this Section 9.03, disclose
to the assignee or participant or proposed assignee or participant any
information relating to the Borrowers furnished to such Lender by or on behalf
of either Borrower; provided that prior to any such disclosure, each such
assignee or participant or proposed assignee or participant shall agree (subject
to customary exceptions) to preserve in the manner set forth in Section 9.13 the
confidentiality of any confidential information relating to the Borrowers
received from such Lender.
SECTION 9.04. Expenses; Indemnity. (a) The Borrowers jointly and
severally agree to pay all out-of-pocket expenses reasonably incurred by the
Administrative Agent, the Collateral Agent and the Issuing Bank in connection
with negotiation and the preparation of this Agreement and the other Loan
Documents or with any amendments, modifications or waivers of, or any consents
with respect to, any of the provisions hereof or thereof (whether or not the
transactions hereby contemplated shall be consummated) or reasonably incurred by
the Administrative Agent, the Collateral Agent or the Issuing Bank in connection
with the administration of this Agreement or any other Loan Document (including,
without limitation, in connection with any audit of the Borrowing Base) or
reasonably incurred by the Administrative Agent, the Collateral Agent, the
Issuing Bank or any Lender in connection with the enforcement or protection of
their rights in connection with this Agreement or any other Loan Document or
with the Loans made or the Notes or Letters of Credit issued hereunder
(excluding, however, those costs and expenses arising from any proceeding solely
between one or more Lenders to which neither Borrower is a party) including, but
not limited to, the reasonable fees and disbursements of Cravath, Swaine &
Moore, special counsel for the Administrative Agent, and, in connection with
such enforcement or protection, the reasonable fees and disbursements of other
counsel for any Lender, including allocated staff counsel costs. The Borrowers
further jointly and severally agree to indemnify the Lenders from and hold them
harmless against any documentary taxes, assessments or charges made by any
Governmental Authority by reason of the execution and delivery of this Agreement
or any of the Notes or any of the other Loan Documents. The provisions of this
Section 9.04 shall be in addition to and not in limitation of or substitution
for NWS's obligations
117
112
with respect to fees and expenses contained in the separate agreements between
NWS and Chemical Bank.
(b) The Borrowers jointly and severally agree to indemnify each of the
Administrative Agent, the Collateral Agent, the Issuing Bank and the Lenders and
their directors, officers, employees and agents against, and to hold the
Administrative Agent, the Collateral Agent, the Issuing Bank and the Lenders and
such persons harmless from, any and all losses, claims, damages, liabilities and
related expenses, including reasonable counsel fees and expenses, incurred by or
asserted against any of the Administrative Agent, the Collateral Agent, the
Issuing Bank, the Lenders or any such persons arising out of, in any way
connected with, or as a result of (i) this Agreement, the other Loan Documents
and the other documents contemplated hereby, the performance by the parties
hereto and thereto of their respective obligations hereunder and thereunder
(including but not limited to the making of the Commitments) and consummation of
the transactions contemplated hereby and thereby, (ii) any Environmental
Liabilty or any related or unrelated liability attributable to Hazardous
Materials generated, used, handled, transported, stored, treated or disposed of
by or on behalf of any Loan Party or any previous owner of its property or any
Hazardous Materials released from, on or about any property of any Loan Party,
or (iii) any claim, litigation, investigation or proceedings relating to any of
the foregoing, whether or not any such person is a party thereto; provided that
such indemnity shall not, as to any Lender, apply to any such losses, claims,
damages, liabilities or related expenses arising from (A) any unexcused breach
by such Lender of any of its obligations under this Agreement or (B) the gross
negligence or willful misconduct of such Lender.
(c) The provisions of this Section 9.04, Sections 2.13 and 2.19 and
Article VIII shall remain operative and in full force and effect regardless of
the expiration of the term of this Agreement, the consummation of the
transactions contemplated hereby, the repayment of any of the Loans, the
invalidity or unenforceability of any term or provision of this Agreement, any
Note or other Loan Document, or any investigation made by or on behalf of any
Lender. All amounts due under this Section 9.04 shall be payable on written
demand therefor.
SECTION 9.05. Right of Setoff. If an Event of Default shall have
occurred and be continuing, each Lender
118
113
is hereby authorized at any time and from time to time, to setoff and apply any
and all deposits (general or special, time or demand, provisional or final) at
any time held and other indebtedness at any time owing by such Lender to or for
the credit or the account of either Borrower against any of and all the
obligations of the Borrowers now or hereafter existing under this Agreement and
the Notes held by such Lender, irrespective of whether or not such Lender shall
have made any demand under this Agreement or such Notes and although such
obligations may be unmatured. Each Lender agrees promptly to notify the
Borrowers after any such setoff and application made by such Lender, but the
failure to give such notice shall not affect the validity of such setoff and
application. The rights of each Lender under this Section are in addition to
other rights and remedies (including, without limitation, other rights of
setoff) which such Lender may have under applicable law and shall be subject to
Section 2.17.
SECTION 9.06. Applicable Law; Submission to Jurisdiction; Service of
Process. (a) THIS AGREEMENT AND THE NOTES SHALL BE CONSTRUED IN ACCORDANCE
WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS
MADE AND TO BE PERFORMED IN NEW YORK.
(b) Each Borrower hereby irrevocably submits itself to the jurisdiction
of the Supreme Court of the State of New York, New York County, and to the
jurisdiction of the United States District Court for the Southern District of
New York, for the purpose of any suit, action or other proceeding arising out of
or relating to this Agreement, the Notes or any other Loan Document or any of
the transactions contemplated hereby or thereby, and hereby waives, and agrees
not to assert, by way of motion, as a defense, or otherwise, in any suit, action
or proceeding, any claim that it is not personally subject to the jurisdiction
of the above-named courts for any reason whatsoever, that such suit, action or
proceeding is brought in an inconvenient forum or that the venue of such suit,
action or proceeding is improper or that this Agreement, the Notes or any other
Loan Document or, to the full extent permitted by applicable law, any subject
matter of any thereof may not be enforced in or by such courts.
Each Borrower hereby agrees that process against it may be served by
delivery of service of process in any of the aforesaid actions, suits or
proceedings to C T Corporation System, 1633 Broadway, New York, New York 10019
(here-
119
114
inafter called the "Process Agent") and each Borrower hereby designates and
appoints the Process Agent as its attorney-in-fact to receive service of
process in any action or proceeding with respect to any matter as to which it
submits to jurisdiction as set forth above, it being agreed that service to the
Process Agent or upon such attorney-in-fact shall constitute valid service upon
such party or its successors or assigns, subject to the sole condition that a
duplicate copy shall have been sent by registered or certified mail to such
Borrower at its address set forth in Section 9.01 or as otherwise specified
pursuant thereto. Each Borrower shall promptly notify the Administrative Agent
of any change in the address of its Process Agent and may, by prior written
notice to the Administrative Agent, change the identity of its Process Agent.
If the Process Agent of either Borrower shall at any time cease to be duly
qualified to do business in the State of New York or cease to exist or maintain
an office in the City of New York, such Borrower shall forthwith designate a
successor Process Agent which maintains an office in the City of New York and
shall give prompt notice of such designation to the Administrative Agent.
SECTION 9.07. Payments on Business Days. Should the principal of or
interest on the Notes or any Commitment Fee or any other fee or amount payable
hereunder become due and payable on other than a Business Day, payment in
respect thereof may be made on the next succeeding Business Day, and such
extension of time shall in such case be included in computing interest, if any,
in connection with such payment.
SECTION 9.08. Waivers; Amendments. (a) No failure or delay of the
Administrative Agent, the Collateral Agent, the Issuing Bank or any Lender in
exercising any power or right hereunder or under any other Loan Document shall
operate as a waiver thereof, nor shall any single or partial exercise of any
such right or power, or any abandonment or discontinuance of steps to enforce
such a right or power, preclude any other or further exercise thereof or the
exercise of any other right or power. The rights and remedies of the
Administrative Agent, the Collateral Agent, the Issuing Bank or the Lenders
hereunder and under the other Loan Documents are cumulative and not exclusive of
any rights or remedies which they would otherwise have. No waiver of any
provision of this Agreement or the Notes or any other Loan Document or consent
to any departure by the Borrowers therefrom shall in any event be effective
unless the same shall be authorized as
120
115
provided in paragraph (b) below, and then such waiver or consent shall be
effective only in the specific instance and for the purpose for which given.
No notice or demand on either Borrower in any case shall entitle either
Borrower to any other or further notice or demand in similar or other
circumstances. Each holder of any of the Notes shall be bound by any
amendment, modification, waiver or consent authorized as provided herein,
whether or not such Note shall have been marked to indicate such amendment,
modification, waiver or consent.
(b) Neither this Agreement, the other Loan Documents nor any
provision hereof or thereof may be waived, amended or modified except pursuant
to an agreement or agreements in writing entered into by the Borrower or
Borrowers (or other Loan Parties) party thereto with the written consent of the
Required Lenders; provided, however, that no such agreement shall (i) change
the principal amount of, or extend or advance the maturity of or any date for
the payment of any principal of or interest on, any Loan, or waive or excuse
any such payment or any part thereof, or change the rate of interest on any
Loan, without the written consent of each Lender affected thereby, (ii) change
the Revolving Credit Commitment of any Lender or reduce the Commitment Fees or
Letter of Credit Participation Fees without the written consent of each Lender
affected thereby, (iii) waive, amend or modify the provisions of Section 6.11
or 6.13, without the written consent of Lenders holding in excess of 50% of the
Rollover Term Loans (in addition to the written consent otherwise required of
the Lenders in respect thereof), or (iv) waive, amend or modify the provisions
of this Section 9.08, Section 2.10(d), Sections 2.11 through 2.17 (other than
an amendment or modification to or waiver of Section 2.13 that does not affect
Section 2.12(g) or (h) or otherwise affect the designated allocation among the
Lenders of any prepayments thereunder), Section 2.19, Section 4.02, Section
9.03 or the definition of the "Required Lenders", without the written consent
of each Lender; and provided further that no such agreement shall amend, modify
or otherwise affect the rights or duties of the Administrative Agent, the
Collateral Agent or the Issuing Bank hereunder or under any other Loan Document
without the written consent of the Administrative Agent, the Collateral Agent
or the Issuing Bank, as the case may be. Each Lender and holder of any Note
shall be bound by any modification or amendment authorized by this Section 9.08
regardless of whether its Notes shall be marked to make reference thereto, and
any consent by any Lender or holder
121
116
of a Note pursuant to this Section 9.08 shall bind any person subsequently
acquiring a Note from it, whether or not such Note shall be so marked.
(c) No Collateral in which the Collateral Agent has been granted a
security interest for the benefit of the Lenders pursuant to any Security
Document may be released other than in accordance with the terms of such
Security Document or in connection with a sale or other disposition of such
Collateral permitted under Section 6.05(b) nor may the definition of "Borrowing
Base" be amended or any Guarantor be released from its obligations under the
Guarantee Agreement, without the prior written consent of the Lenders holding
Loans, participations in Letters of Credit and unused Commitments representing
more than 90% of the sum of the aggregate principal amount of Loans outstanding,
the Letter of Credit Exposure and unused Commitments.
SECTION 9.09. Limitation of Interest. Notwithstanding anything herein
to the contrary, if at any time the applicable interest rate, together with all
fees and charges which are treated as interest under applicable laws
(collectively the "Charges"), as provided for herein or in any other document
executed in connection herewith, or otherwise contracted for, charged, received,
taken or reserved by any one of the Lenders in connection with the Loans made by
it hereunder, exceeds the maximum lawful rate (the "Maximum Rate") which may be
contracted for, charged, taken, received or reserved by such Lender in
accordance with applicable laws (including Federal laws of the United States of
America), the rate of interest payable hereunder and under the Notes delivered
to such Lender, together with all Charges payable to such Lender, shall be
limited to the Maximum Rate.
SECTION 9.10. Severability. In the event any one or more of the
provisions contained in this Agreement or in the Notes or any other Loan
Document should be held invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions contained
herein or therein 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 provisions.
122
117
SECTION 9.11. 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 contract.
SECTION 9.12. Headings. Article and Section headings and the Table of
Contents used herein are for convenience of reference only and are not to affect
the construction of, or to be taken into consideration in interpreting, this
Agreement.
SECTION 9.13. Confidentiality. Each Lender agrees (which
agreement shall survive the termination of this Agreement) that financial
information, information from NWS's books and records, information concerning
NWS's trade secrets and patents and any other information received from the
Borrowers hereunder which at the time of receipt is clearly labeled as
confidential and subject to this Section 9.13 shall be treated as confidential
by such Lender, and each Lender agrees to use its best efforts to ensure that
such information is not published, disclosed or otherwise divulged to anyone
other than employees or officers of such Lender and its counsel and agents;
provided it is understood that the foregoing shall not apply to:
(i) disclosure made with the prior written authorization of a
Borrower;
(ii) disclosure of information (other than that received from
the Borrowers prior to or under this Agreement) already known by, or in
the possession of such Lender without restrictions on the disclosure
thereof at the time such information is supplied to such Lender by the
Borrowers hereunder;
(iii) disclosure of information which is required by
applicable law or to a governmental agency having supervisory
authority over any party hereto or to the National Association of
Insurance Commissioners;
(iv) disclosure of information in connection with any suit,
action or proceeding in connection with the enforcement of rights
hereunder or under any Note or Loan Document or in connection with the
transactions contemplated hereby or thereby;
(v) disclosure to any bank (or other entity) which may acquire
a participation or other interest in the
123
118
Loans or rights of any Lender hereunder or under the Notes or
Loan Documents; provided that such bank (or other entity) agrees to
maintain any such information to be received in accordance with the
provisions of this Section 9.13;
(vi) disclosure by any party hereto to any other party hereto
or their counsel or agents;
(vii) disclosure by any party hereto to any entity, or to any
subsidiary of such an entity, which owns, directly or indirectly, more
than 50% of the voting stock of such party, or to any subsidiary of
such an entity; or
(viii) disclosure of information that prior to such disclosure
has become public knowledge through no violation of this Agreement.
SECTION 9.14. Entire Agreement; Waiver of Jury Trial, etc.
(a) Except as provided in Sections 2.08(b) and (c)(ii) and 9.04(a), this
Agreement and the other Loan Documents constitute the entire contract between
the parties relative to the subject matter hereof. Any previous agreement
among the parties with respect to the transactions contemplated hereby is
superseded by this Agreement and the other Loan Documents. Except as expressly
provided herein or in the other Loan Documents, nothing in this Agreement or in
the other Loan Documents, expressed or implied, is intended to confer upon any
party, other than the parties hereto, any rights, remedies, obligations or
liabilities under or by reason of this Agreement or the other Loan Documents.
(b) Except as prohibited by law, each party hereto hereby
waives any right it may have to a trial by jury in respect of any litigation
directly or indirectly arising out of, under or in connection with this
Agreement, any of the other Loan Documents or the transactions contemplated
hereby.
(c) Except as prohibited by law, each party hereto hereby
waives any right it may have to claim or recover in any litigation referred to
in paragraph (b) of this Section 9.14 any special, exemplary, punitive or
consequential damages or any damages other than, or in addition to, actual
damages.
124
119
(d) Each party hereto (i) certifies that no representative,
agent or attorney of any Lender has represented, expressly or otherwise, that
such Lender would not, in the event of litigation, seek to enforce the
foregoing waivers and (ii) acknowledges that it has been induced to enter into
this Agreement or the other Loan Documents, as applicable, by, among other
things, the mutual waivers and certifications herein.
SECTION 9.15. Effectiveness; Original Credit Agreement. This
Agreement shall not be effective until (a) copies hereof which, when taken
together, bear the signatures of each party hereto shall be received by the
Administrative Agent and (b) the conditions to such effectiveness set forth in
Section 4.02 shall have been satisfied. Until this Agreement becomes
effective, the Original Credit Agreement shall remain in full force and effect
and shall not be affected hereby. After this Agreement becomes effective, all
obligations of the Borrowers under the Original Credit Agreement shall become
obligations of the Borrowers hereunder, secured by the Security Documents, any
Original Lender that is not a Lender shall be released from all its obligations
under the Original Credit Agreement, and the provisions of the Original Credit
Agreement shall be superseded by the provisions hereof.
SECTION 9.16. Joint Obligations. All obligations of the
Borrowers under this Agreement and the other Loan Documents shall be joint and
several, including, without limitation, obligations in respect of the payment
of principal of and interest on the Notes, Commitment Fees, Letter of Credit
Participation Fees and all other amounts payable hereunder and under the other
Loan Documents. The obligations of each Borrower under any Loan
125
120
Document to which it is a party but the other Borrower is not a party are
hereby guaranteed by such other Borrower.
SECTION 9.17. Release of NWS/Texas. In the event of a sale
by NWS of all the outstanding shares of capital stock of NWS/Texas in a
transaction permitted hereunder, then upon such sale, notwithstanding any
contrary provision herein or in any other Loan Document (a) NWS/Texas shall
cease to be a Borrower hereunder for all purposes hereof and shall not be
entitled to borrow hereunder or to obtain Letters of Credit hereunder, (b)
NWS/Texas shall be released from any liability in respect of the Obligations,
(c) NWS shall be the sole Borrower hereunder and shall remain liable for all
the Obligations, (d) all outstanding Loans shall be deemed Loans made to NWS
and all outstanding Letters of Credit shall be for its account and (e) NWS
shall enter into such agreements and instruments as the Administrative Agent or
the Required Lenders shall reasonably request to give effect to the foregoing.
126
121
IN WITNESS WHEREOF, the Borrowers, the Lenders, the
Administrative Agent, the Collateral Agent and the Issuing Bank have caused
this Agreement to be duly executed by their respective authorized officers as
of the day and year first above written.
NORTHWESTERN STEEL AND WIRE
COMPANY, an Illinois corporation,
by Robert N. Gurnitz
----------------------------------
Name: Robert N. Gurnitz
Title: Chief Executive
Officer
NORTHWESTERN STEEL AND WIRE
COMPANY, a Texas corporation,
by Robert N. Gurnitz
----------------------------------
Name: Robert N. Gurnitz
Title: Chief Executive
Officer
CHEMICAL BANK,
in its capacity as a Lender
and as Administrative Agent,
Collateral Agent and IssuingBank,
by James Ramage
---------------------------------
Name: James Ramage
Title: Vice President
HSBC BUSINESS LOANS, INC.,
by Michael J. O'Connell
----------------------------------
Name: Michael J. O'Connell
Title: Ass't Vice President
127
122
WELLS FARGO BANK, N.A.,
by Christine C. Rotter
----------------------------------
Name: Christine C. Rotter
Title: Vice President
MITSUI NEVITT CAPITAL CORP.,
by Peter K. Nevitt
---------------------------------
Name: Peter K. Nevitt
Title: President
THE TRAVELERS INSURANCE COMPANY,
by John W. Petchler
---------------------------------
Name: John W. Petchler
Title: Second Vice President
THE TRAVELERS INDEMNITY COMPANY,
by John W. Petchler
----------------------------------
Name: John W. Petchler
Title: Second Vice President
THE PHOENIX INSURANCE COMPANY,
by John W. Petchler
----------------------------------
Name: John W. Petchler
Title: Second Vice President
128
123
THE TRAVELERS INSURANCE
COMPANY (AS TO SEPARATE ACCOUNT D),
by John W. Petchler
----------------------------------
Name: John W. Petchler
Title: Second Vice President
HELLER FINANCIAL, INC.,
by Linda W. Wolf
----------------------------------
Name: Linda W. Wolf
Title: Senior Vice President
SOCIETE GENERALE,
by Olivia N. Feldman
----------------------------------
Name: Olivia N. Feldman
Title: Assistant Treasurer
BANK OF AMERICA ILLINOIS,
by Paul A. O'Mara
----------------------------------
Name: Paul A. O'Mara
Title: Senior Vice President
CAISSE NATIONALE DE CREDIT AGRICOLE,
by David Bouhl F.V.P.
--------------------------------
Name: David Bouhl F.V.P.
Title: Head of Corporate
Banking, Chicago