FindLaw | Find a Lawyer. Find Answers.
Are you a legal Professional?
My current location:
Los Angeles, CA
| Change location
| Featured Attorneys | |
Providing Exceptional Representation for Businesses. Call Today to Speak with Our Attorneys. 1-888-WHGCLaw (944-2529)
|
1-888-WHGCLaw
|
$200,000,000
INVENTORY CREDIT AGREEMENT
dated as of
September 12, 1995
among
BETHLEHEM STEEL CORPORATION,
THE LENDERS LISTED HEREIN,
MORGAN GUARANTY TRUST COMPANY OF NEW YORK,
as Administrative Agent
and
J.P. MORGAN DELAWARE,
as Structuring and Collateral Agent
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE 1
DEFINITIONS
1.1. Definitions .............................................. 1
1.2. UCC Terms ................................................ 21
1.3. Accounting Terms and Determinations ...................... 21
ARTICLE 2
THE CREDITS
2.1. Commitments to Lend ...................................... 22
2.2. Letters of Credit ........................................ 23
2.3. Method of Borrowing ...................................... 33
2.4. Notes .................................................... 35
2.5. Maturity of Loans ........................................ 35
2.6. Method of Electing Interest Rates ........................ 35
2.7. Interest Rates ........................................... 37
2.8. Fees ..................................................... 42
2.9. Optional Termination or Reduction of Commitments ......... 43
2.10. Mandatory Termination of Commitments .................... 43
2.11. Optional Prepayments .................................... 44
2.12. Mandatory Prepayments ................................... 44
2.13. General Provisions as to Payments ....................... 46
2.14. Funding Losses .......................................... 47
2.15. Computation of Interest and Fees ........................ 47
ARTICLE 3
CONDITIONS TO BORROWINGS AND ISSUANCES
3.1. Closing .................................................. 48
3.2. All Borrowings and Issuances ............................. 50
ARTICLE 4
REPRESENTATIONS AND WARRANTIES
4.1. Corporate Existence and Power ............................ 51
4.2. Corporate and Governmental Authorization; No Contravention 51
4.3. Binding Effect ........................................... 52
4.4. Financial Information .................................... 52
4.5. Litigation ............................................... 53
i
<PAGE>
4.6. Compliance with ERISA .................................... 53
4.7. Taxes .................................................... 53
4.8. Environmental Compliance ................................. 54
4.9. Full Disclosure .......................................... 55
ARTICLE 5
COVENANTS
5.1. Information .............................................. 56
5.2. Maintenance of Property; Insurance ....................... 60
5.3. Compliance with Laws ..................................... 61
5.4. Inspection of Property, Books and Records ................ 62
5.5. Compliance with Certain Covenants in the Indenture ....... 62
5.6. Minimum Adjusted Consolidated Tangible Net Worth ......... 63
5.7. Sale of Borrower's Collateral ............................ 63
5.8. Use of Proceeds .......................................... 64
5.9. Mergers and Sales of Assets .............................. 64
5.10. Environmental Matters ................................... 64
ARTICLE 6
DEFAULTS
6.1. Events of Default ........................................ 65
6.2. Notice of Default ........................................ 69
ARTICLE 7
THE ADMINISTRATIVE AGENT
7.1. Appointment and Authorization ............................ 69
7.2. Administrative Agent and Affiliates ...................... 70
7.3. Action by Administrative Agent ........................... 70
7.4. Consultation with Experts ................................ 70
7.5. Liability of Administrative Agent ........................ 70
7.6. Indemnification .......................................... 71
7.7. Credit Decision .......................................... 71
7.8. Successor Administrative Agent ........................... 71
ARTICLE 8
CHANGE IN CIRCUMSTANCES
8.1. Basis for Determining Interest Rate Inadequate or Unfair . 72
8.2. Illegality ............................................... 73
8.3. Increased Cost and Reduced Return ........................ 74
8.4. Taxes .................................................... 77
8.5. Base Rate Loans Substituted for Affected Fixed Rate Loans. 81
ARTICLE 9
ii
<PAGE>
MISCELLANEOUS
9.1. Notices .................................................. 82
9.2. No Waivers ............................................... 82
9.3. Expenses; Indemnification ................................ 83
9.4. Sharing of Set-Offs ...................................... 85
9.5. Amendments and Waivers ................................... 85
9.6. Successors and Assigns ................................... 86
9.7. Margin Stock Collateral .................................. 89
9.8. Confidentiality .......................................... 89
9.9. Governing Law; Submission to Jurisdiction ................ 89
9.10. Counterparts; Integration; Effectiveness ................ 90
9.11. Termination of Existing Credit Agreement................. 90
9.12. WAIVER OF JURY TRIAL .................................... 91
1
<PAGE>
AGREEMENT dated as of September 12, 1995 among BETHLEHEM
STEEL CORPORATION, the LENDERS listed on the signature pages hereof,
MORGAN GUARANTY TRUST COMPANY OF NEW YORK, as Administrative Agent and
J.P. MORGAN DELAWARE, as Structuring and Collateral Agent.
RECITALS
WHEREAS, subject to the terms and conditions of this
Agreement, the Borrower desires to borrow Loans and to have Letters of
Credit issued for its account, all in an aggregate amount not to
exceed $200,000,000;
WHEREAS, the obligations of the Borrower with respect to such
Borrowings and such Letters of Credit will be secured by a security
interest in substantially all of the Borrower's Inventories, the
Pledged Securities and the Pledged Interests (as defined in the
Inventory Security Agreement);
WHEREAS, the Lenders are willing to make Loans to the
Borrower and to issue Letters of Credit and participate in Letters of
Credit issued for the account of the Borrower or any Subsidiary, all
on the terms and conditions set forth herein; and
WHEREAS, Morgan Guaranty has been requested and is willing to
act as the Administrative Agent and J.P. Morgan Delaware has been
requested and is willing to act as the Structuring and Collateral
Agent;
NOW, THEREFORE, the parties hereto hereby agree as follows:
ARTICLE 1
DEFINITIONS
SECTION 1.1. Definitions. The following terms, as used
herein, have the following meanings:
"Adjusted CD Rate" has the meaning set forth in Section.
"Adjusted Consolidated Tangible Net Worth" means, at any date
of determination, Consolidated Tangible Net Worth adjusted upward by
the amount of any material non-recurring charges to income (without
deduction for any related income tax effect) resulting from
discontinuance of operations after December 31, 1994, all determined
as of such date of determination.
2
<PAGE>
"Adjusted London Interbank Offered Rate" has the meaning set
forth in Section .
"Administrative Agent" means Morgan Guaranty in its capacity
as administrative agent for the Lenders, and its successors and
assigns in such capacity.
"Administrative Questionnaire" means, with respect to each
Lender or L/C Issuing Bank, an administrative questionnaire in the
form prepared by the Administrative Agent and submitted to the
Administrative Agent (with a copy to the Borrower) duly completed by
such Lender or L/C Issuing Bank.
"Affiliate" means (i) any Person that directly, or indirectly
through one or more intermediaries, controls the Borrower (a
"Controlling Person") or (ii) any Person (other than the Borrower or a
Subsidiary) which is controlled by or is under common control with a
Controlling Person. As used herein, the term "control" means
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.
"Agent" means the Administrative Agent or the Collateral
Agent and "Agents" means the Administrative Agent and the Collateral
Agent.
"Aggregate Letter of Credit Amount" means, at any time, the
sum of (i) the then aggregate outstanding face amount of the Letters
of Credit issued pursuant to Section 2.2 hereof and (ii) the then
aggregate outstanding face amount of letters of credit issued pursuant
to Section 2.9 of the Receivables Purchase Agreement.
"Agreement" means this Inventory Credit Agreement, as amended
from time to time.
"Applicable Lending Office" means, with respect to any
Lender, (i) in the case of its Domestic Loans, its Domestic Lending
Office and (ii) in the case of its Euro-Dollar Loans, its Euro-Dollar
Lending Office.
"Applicable Percentage" means (i) 100%, if no Increased
Coverage Event has occurred, or (ii) 105%, if an Increased Coverage
Event has occurred; provided that if the Secured Principal Amount does
not exceed 85% of the Borrowing Base for a period of six consecutive
months beginning at any time after the occurrence of the most recent
Increased Coverage Event, the Applicable Percentage shall be decreased
at the end of such six month period to 100% (unless and until another
Increased Coverage Event occurs).
"Assessment Rate" has the meaning set forth in Section.
"Assignee" has the meaning set forth in Section.
"Base Rate" means, for any day, a rate per annum equal to the
higher of (i) the Prime Rate for such day and (ii) the sum of 1/2 of
1% plus the Federal Funds Rate for such day.
3
<PAGE>
"Base Rate Loan" means a loan which bears interest at the
Base Rate pursuant to the applicable Notice of Borrowing or Notice of
Interest Rate Election or the provisions of Section 2.6(c) or Article
8".
"Base Rate Margin" means a rate per annum determined in
accordance with the Pricing Schedule.
"Benefit Arrangement" means at any time an "employee benefit
plan" within the meaning of Section 3(3) of ERISA which is not a Plan
or a Multiemployer Plan and which is maintained, or otherwise
contributed to, by any member of the ERISA Group.
"Borrower" means Bethlehem Steel Corporation, a Delaware
corporation, and its successors.
"Borrower's 1994 Form 10-K" means the Borrower's annual
report on Form 10-K for 1994, as filed with the Securities and
Exchange Commission pursuant to the Securities Exchange Act of 1934.
"Borrowers Latest Form 10-Q" means the Borrower's quarterly
report on Form 10-Q for the quarter ended June 30, 1995, as filed with
the Securities and Exchange Commission pursuant to the Securities
Exchange Act of 1934.
"Borrowing" means a borrowing hereunder consisting of Loans
made to the Borrower on the same day pursuant to Article 2, all of
which Loans are of the same type (subject to Article 8") and, except
in the case of Base Rate Loans, have the same initial Interest Period.
A Borrowing is a "Domestic Borrowing" if such Loans are Domestic Loans
or a "Euro-Dollar Borrowing" if such Loans are Euro-Dollar Loans. A
Domestic Borrowing is a "CD Borrowing" if such Domestic Loans are CD
Loans or a "Base Rate Borrowing" if such Domestic Loans are Base Rate
Loans.
"Borrowing Base" means, at any date, an amount equal to the
sum of (i) 55% of the aggregate amount of Eligible Inventories which
are Finished and Semifinished Inventories at such date, and (ii) 25%
of the aggregate amount of Eligible Inventories which are Raw
Materials Inventories at such date; provided that (x) the Borrowing
Base shall at no time exceed the Receivables Maximum Purchase Price at
such time and (y) if an Event of Default specified in clause (l) of
Section 6.1 shall have been waived pursuant to Section 9.5, the
Borrowing Base shall be reduced by the aggregate amount of claims
secured by Federal Liens (or by such lesser amount as the Required
Lenders may agree).
"Borrowing Base Certificate" means a certificate duly
executed by the Chief Financial Officer, the Treasurer or the
Controller of the Borrower, appropriately completed and substantially
in the form of Exhibit F hereto.
"BSF" means Bethlehem Steel Funding, LLC, a Maryland limited
liability company.
"CD Base Rate" has the meaning set forth in Section.
4
<PAGE>
"CD Loan" means a loan which bears interest at a CD Rate
pursuant to the applicable Notice of Borrowing or Notice of Interest
Rate Election.
"CD Margin" means a rate per annum determined in accordance
with the Pricing Schedule.
"CD Rate" means a rate of interest determined pursuant to
Section on the basis of an Adjusted CD Rate.
"CD Reference Banks" means Chemical Bank, The Long-Term
Credit Bank of Japan, Ltd. and Morgan Guaranty and each such other
bank as may be appointed pursuant to Section 9.6(d).
"CERCLA" means the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended, and regulations
promulgated thereunder.
"Closing Date" means the date on or after the Effective Date
on which the conditions set forth in Section 3.1 shall have been
satisfied.
"Collateral" has the meaning set forth in Section 1 of the
Inventory Security Agreement.
"Collateral Agent" means J.P. Morgan Delaware as Structuring
and Collateral Agent for the Lenders, and its successors and assigns
in such capacity.
"Collateral Report" means a report of the Collateral Agent
with respect to the Inventories included in the Borrowing Base
calculation by the Borrower referred to in such report. Such report
will state that it is based upon a review (but not an audit) by the
Collateral Agent of information supplied by the Borrower relating to
the Inventories (including information as to the cost, market price,
location and respective categories thereof).
"Commitment" means (i) with respect to each Lender, the
amount set forth opposite the name of such Lender on the signature
pages hereof, or (ii) with respect to any Assignee, the amount of the
transferor Lenders's Commitment assigned to such Assignee pursuant to
Section 9.6(c), in each case as such amount may be reduced from time
to time pursuant to Section 2.9! or changed as a result of an
assignment pursuant to Section 9.6(c).
"Commitment Fee" has the meaning set forth in Section 2.8.
"Consolidated Subsidiary" means, at any date, any Subsidiary
or other entity the accounts of which would be consolidated with those
of the Borrower in its consolidated financial statements if its
consolidated financial statements were prepared as of such date.
"Consolidated Tangible Net Worth" means, at any date, the
consolidated stockholders' equity of the Borrower and its Consolidated
Subsidiaries less their consolidated Intangible Assets, all determined
as of such date. For purposes of this definition "Intangible Assets"
means the amount (to the extent reflected in
5
<PAGE>
determining such consolidated stockholders' equity) of (i) all
write-ups (other than write-ups resulting from foreign currency
translations and write-ups of assets of a going concern business made
within twelve months after the acquisition of such business)
subsequent to December 31, 1994 in the book value of any asset owned
by the Borrower or a Consolidated Subsidiary, and (ii) all unamortized
debt discount and expense, unamortized deferred charges, goodwill,
patents, trademarks, service marks, trade names, copyrights,
organization or developmental expenses and other intangible assets
(but not including any deferred income tax asset or any pension
asset).
"Debt" of any Person means, at any date, without duplication,
(i) all obligations of such Person for borrowed money, (ii) all
obligations of such Person evidenced by bonds, debentures, notes or
other similar instruments, (iii) all obligations of such Person to pay
the deferred purchase price of property or services, except trade
accounts payable arising in the ordinary course of business, (iv) all
obligations of such Person as lessee which are capitalized in
accordance with generally accepted accounting principles, (v) all
non-contingent obligations of such Person to reimburse or repay any
lender or other Person in respect of amounts paid under a letter of
credit, banker's acceptance or similar instrument, and (vi) all Debt
secured by a Lien on any asset of such Person, whether or not such
Debt is otherwise an obligation of such Person.
"Default" means any condition or event which constitutes an
Event of Default or which with the giving of notice or passage of time
or both would, unless cured or waived, become an Event of Default.
"Domestic Business Day" means any day except a Saturday,
Sunday or other day on which commercial banks in New York City are
authorized by law to close.
"Domestic Lending Office" means, as to each Lender, its
office located at its address set forth in its Administrative
Questionnaire (or identified in its Administrative Questionnaire as
its Domestic Lending Office) or such other office as such Lender may
hereafter designate as its Domestic Lending Office by notice to the
Borrower and the Administrative Agent; provided that any Lender may so
designate separate Domestic Lending Offices for its Base Rate Loans,
on the one hand, and its CD Loans, on the other hand, in which case
all references herein to the Domestic Lending Office of such Lender
shall be deemed to refer to either or both of such offices, as the
context may require.
"Dollar" and "$" means lawful currency of the United States.
"Domestic Loan" means a CD Loan or a Base Rate Loan and
"Domestic Loans" means CD Loans or Base Rate Loans or both.
"Domestic Reserve Percentage" has the meaning set forth in Section .
"EDS" means Electronic Data Systems Corporation, a Texas
corporation, and its successors and assigns.
6
<PAGE>
"Effective Date" means the date on which this Agreement
becomes effective in accordance with Section 9.10(.
"Eligible Inventories" means, at any date, the value
(determined at the lower of cost or market on a basis consistent with
the balance sheet as at December 31, 1994 referred to in Section
4.4(a)) at such date of all Inventories which are
(a) owned by the Borrower free of all Liens, other than
Permitted Liens (as defined in the Inventory Security
Agreement),
(b) in the possession of the Borrower (i) on premises owned
(or, in the case of the premises leased from Twincast
Property Leasing, Inc. at Burns Harbor and Sparrows Point,
leased) by the Borrower at its Burns Harbor, Sparrows Point,
Bethlehem, Steelton and Lackawanna facilities; provided that
in the case of leased premises the Collateral Agent has
received evidence satisfactory to it (including landlord
waivers satisfactory to it) that it may enter such leased
premises for the purposes specified in Section 8(C) of the
Inventory Security Agreement, (ii) on premises leased by the
Borrower at any of the locations listed on Exhibit B hereto;
provided that the Collateral Agent has received evidence
satisfactory to it (including landlord waivers satisfactory
to it) that it may enter such premises for the purposes
specified in Section 8(C) of the Inventory Security
Agreement, (iii) at such other premises, owned or leased by
the Borrower, as the Required Lenders may approve, or (iv) at
such other premises listed on Exhibit C-1 hereto and
maintained by processors or warehouses (the "Bailees") or as
the Required Lenders may approve; provided that (i) the
Inventories at such premises are (x) reflected on the
Borrower's books and records, (y) audited by the Borrower or
the Borrower's external auditors on a basis approved by the
Collateral Agent, and (z) appropriately identified and
monitored by the Borrower's Outside Processing Inventory
Control System or any successor system satisfactory to the
Collateral Agent, (ii) upon transfer or sale of such
Inventory, such Inventory is delivered on behalf of and for
the account of the Borrower, (iii) the form of the Inventory
is not fundamentally altered, and (iv) the Bailee has entered
into a Collateral Access Agreement substantially in the form
of Exhibit C-2 hereto;
(c) as to which appropriate UCC financing statements have
been filed naming the Borrower as "debtor" and the Collateral
Agent as "secured party";
provided that Eligible Inventories shall not include (i) any
Inventories which have been shipped to a customer of the Borrower,
even on a consignment basis; (ii) any Inventories which are not Raw
Materials Inventories or Finished and Semifinished Inventories; (iii)
any Inventories held by the Borrower for sale,
7
<PAGE>
lease or other disposition, or to be furnished by the Borrower under a
contract for services, or to be used or consumed by the Borrower, in
the Borrower's marine construction business; (iv) all Finished and
Semifinished Inventories in any product account at a facility of the
Borrower (a "Facility Product Account") included in any category or
subcategory of Finished and Semifinished Inventories set forth on
Exhibit D if such Facility Product Account has an Inventory Turnover
Rate lower than the rate for such category or subcategory set forth on
Exhibit D; and (v) any Inventories which the Required Lenders
reasonably determine in good faith to be unmarketable. For purposes
of this definition, "Inventory Turnover Rate" means, with respect to
any category or subcategory of Finished and Semifinished Inventories
and at any date, the quotient obtained by dividing (a) the average of
the amount of Eligible Inventories in such category or subcategory
sold or consumed by the Borrower during each of the three calendar
months ending immediately prior to such date, expressed on an
annualized basis, by (b) the average of the amount of Eligible
Inventories in such category or subcategory at the end of each of the
three calendar months ending immediately prior to such date. The
amount of Eligible Inventories in any such category or subcategory
shall be determined on the basis of the tonnage of such Eligible
Inventories.
"Environmental Laws" means any and all federal, state and
local statutes, laws (including case law), regulations, ordinances,
rules, judgments, orders, decrees, codes, plans, injunctions, permits,
concessions, grants, franchises, licenses, agreements and governmental
restrictions, whether now or hereafter in effect, relating to the
environment, to the effect of the environment on human health or the
Release of pollutants, contaminants, Hazardous Substances, wastes or
any other materials into the environment or the clean-up or other
remediation thereof.
"Environmental Liabilities" means all liabilities of the
Borrower and any of its Subsidiaries, whether vested or unvested,
contingent or fixed, actual or potential, known or unknown, which
arise under or relate to matters covered by Environmental Laws.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended, or any successor statute.
"ERISA Group" means the Borrower and all members of a
controlled group of corporations and all trades or businesses (whether
or not incorporated) under common control which, together with the
Borrower, are treated as a single employer under Section 414 of the
Internal Revenue Code.
"Euro-Dollar Business Day" means any Domestic Business Day on
which commercial banks are open for international business (including
dealings in Dollar deposits) in London.
"Euro-Dollar Lending Office" means, as to each Lender, its
office, branch or affiliate located at its address set forth in its
Administrative Questionnaire (or identified in its Administrative
Questionnaire as its Euro-Dollar Lending Office) or such other office,
branch or affiliate of such Lender as it may hereafter designate as
its Euro-Dollar Lending Office by notice to the Borrower and the
Administrative Agent.
8
<PAGE>
"Euro-Dollar Loan" means a loan which bears interest at a
Euro-Dollar Rate pursuant to the applicable Notice of Borrowing or
Notice of Interest Rate Election.
"Euro-Dollar Margin" means a rate per annum determined in
accordance with the Pricing Schedule.
"Euro-Dollar Rate" means a rate of interest determined
pursuant to Section on the basis of an Adjusted London Interbank
Offered Rate.
"Euro-Dollar Reference Banks" means the principal London
offices of Chemical Bank, The Long-Term Credit Bank of Japan, Ltd.
and Morgan Guaranty and each such other bank as may be appointed
pursuant to Section 9.6(d).
"Euro-Dollar Reserve Percentage" has the meaning set forth in Section.
"Event of Default" has the meaning set forth in Section 6.1.
"Existing Credit Agreement" means the Credit Agreement dated as of
December 15, 1987 among the Borrower, the lenders party thereto and Morgan
Guaranty, as agent, as amended to the date hereof.
"Existing Letters of Credit" means the letters of credit issued before
the Closing Date and listed on Schedule 1 hereto.
"Existing Security Agreement" means the Security Agreement dated as of
December 15, 1987 among the Borrower, J.P. Morgan Delaware, as security agent
and Morgan Guaranty, as concentration bank and loan agent, as amended to the
date hereof.
"Federal Funds Rate" means, for any day, the rate per annum (rounded
upward, if necessary, to the nearest 1/100th of 1%) equal to the weighted
average of the rates on overnight Federal funds transactions with members of
the Federal Reserve System arranged by Federal funds brokers on such day, as
published by the Federal Reserve Bank of New York on the Domestic Business Day
next succeeding such day; provided that (i) if such day is not a Domestic
Business Day, the Federal Funds Rate for such day shall be such rate on such
transactions on the next preceding Domestic Business Day as so published on the
next succeeding Domestic Business Day, and (ii) if no such rate is so published
on such next succeeding Domestic Business Day, the Federal Funds Rate for such
day shall be the average rate quoted to Morgan Guaranty on such day on such
transactions as determined by the Administrative Agent.
"Federal Lien" has the meaning set forth in Section 6.1(l).
"Fees" means the Commitment Fee and the Letter of Credit Fees.
"Financing Documents" means this Agreement (including the Schedules
and Exhibits hereto), the Notes and the Inventory Security Agreement.
9
<PAGE>
"Finished and Semifinished Inventories" means, at any date,
all assets of the Borrower which were or would have been classified as
finished and semifinished products (including contract work in
progress less billings), in the Borrower's consolidated balance sheets
referred to in Section 4.4(a), except for tool steel, foundry products
and bolts, nuts, rivets and spikes.
"Fixed Rate Borrowing" means a CD Borrowing or a Euro-Dollar
Borrowing.
"Fixed Rate Loans" means CD Loans or Euro-Dollar Loans or
both.
"Group of Loans" means at any time a group of Loans
consisting of (i) all Loans which are Base Rate Loans at such time,
(ii) all Euro-Dollar Loans having the same Interest Period at such
time or (iii) all CD Loans having the same Interest Period at such
time; provided that, if a Loan of any particular Lender is converted
to or made as a Base Rate Loan pursuant to Article 8", such Loan shall
be included in the same Group or Groups of Loans from time to time as
it would have been in if it had not been so converted or made.
"Guarantee" by any Person means any obligation, contingent or
otherwise, of such Person directly or indirectly guaranteeing any Debt
of any other Person and, without limiting the generality of the
foregoing, any obligation, direct or indirect, contingent or
otherwise, of such Person (i) to purchase or pay (or advance or supply
funds for the purchase or payment of) such Debt (whether arising by
virtue of partnership arrangements, by agreement to keep-well, to
purchase assets, goods, securities or services, to take-or-pay, or to
maintain financial statement conditions or otherwise) or (ii) entered
into for the purpose of assuring in any other manner the holder of
such Debt of the payment thereof or to protect such holder against
loss in respect thereof (in whole or in part); provided that the term
Guarantee shall not include endorsements for collection or deposit in
the ordinary course of business. The term "Guarantee" used as a verb
has a corresponding meaning.
"Hazardous Substances" means any toxic, radioactive, caustic
or otherwise hazardous substance, including petroleum, its
derivatives, by-products and other hydrocarbons, or any substance
having any constituent elements displaying any of the foregoing
characteristics, whether or not regulated under Environmental Laws.
"Increased Coverage Event" means any one of the following
three events or conditions:
(i) the maturity of Debt of the Borrower and its
Subsidiaries exceeding $10,000,000 in aggregate principal
amount is accelerated,
(ii) the maturity of Debt Guaranteed by the Borrower or
any Subsidiary is accelerated and the aggregate principal
amount which the Borrower and its Subsidiaries become
obligated to pay under their Guarantees of such Debt by
reason of such acceleration exceeds $10,000,000 in any twelve
month period or an aggregate of $30,000,000 at any time prior
to the Termination Date, or
10
<PAGE>
(iii) one or more defaults occur under any agreement or
agreements in respect of Debt Guaranteed by the Borrower or
any Subsidiary and the aggregate principal amount of such
Guaranteed Debt exceeds $10,000,000 and as a consequence of
such default or defaults the Borrower or any of its
Subsidiaries shall make any payment or give or agree to give
any consideration or benefit of any kind (including, without
limitation, any increased compensation, prepayment,
shortening of maturities, security or other credit support)
to the holders of such Guaranteed Debt and such payment,
consideration or benefit is determined by the Required
Lenders, after taking into account any payment, consideration
or benefit paid, given or agreed to be given by such holders
to the Borrower or any of its Subsidiaries (other than a
waiver of such default), to be a material benefit to the
holders of such Guaranteed Debt.
"Indemnitee" has the meaning set forth in Section 9.3(c).
"Initial Commitment" means, with respect to any Lender, such
Lender's initial commitment under this Agreement, as reflected in such
Lender's commitment letter delivered to the Borrower, with a copy to
the Administrative Agent.
"Interest Period" means: (i) with respect to each
Euro-Dollar Loan, the period commencing on the date of borrowing
specified in the applicable Notice of Borrowing or on the date
specified in the applicable Notice of Interest Rate Election and
ending one, two, three or six months thereafter, as the Borrower may
elect in the applicable notice; provided that:
(a) any Interest Period which would otherwise end on a
day which is not a Euro-Dollar Business Day shall be extended
to the next succeeding Euro-Dollar Business Day unless such
Euro-Dollar Business Day falls in another calendar month, in
which case such Interest Period shall end on the next
preceding Euro-Dollar Business Day;
(b) any Interest Period which begins on the last
Euro-Dollar Business Day of a calendar month (or on a day for
which there is no numerically corresponding day in the
calendar month at the end of such Interest Period) shall,
subject to clause (c) below, end on the last Euro-Dollar
Business Day of a calendar month; and
(c) any Interest Period which would otherwise end after
the Termination Date shall end on the Termination Date;
(ii) with respect to each CD Loan, the period commencing on
the date of borrowing specified in the applicable Notice of Borrowing
or on the date specified in the applicable Notice of Interest Rate
Election and ending 30, 60 or 90 days thereafter, as the Borrower may
elect in the applicable notice; provided that:
11
<PAGE>
(a) any Interest Period (other than an Interest Period
determined pursuant to clause (b) below) which would
otherwise end on a day which is not a Euro-Dollar
Business Day shall be extended to the next succeeding
Euro-Dollar Business Day; and
(b) any Interest Period which would otherwise end after the
Termination Date shall end on the Termination Date.
"Internal Revenue Code" means the Internal Revenue Code of
1986, as amended, or any successor statute.
"Inventories" means, whether now owned or hereafter acquired
by the Borrower, all "inventory" (as defined in the UCC), wherever
located, and shall also mean and include, without limitation, all raw
materials and other materials and supplies, work-in-process and
finished goods and any products made or processed therefrom and all
substances, if any, commingled therewith or added thereto, or which,
in accordance with generally accepted accounting principles, would be
included in inventories on the Borrower's balance sheets, (excluding,
however, any of the foregoing which (i) is located outside the United
States, (ii) is held at the Borrower's marine construction facilities
at Sparrows Point, Maryland or Port Arthur, Texas for sale or other
disposition, or to be furnished by the Borrower under a contract for
services, or to be used or consumed by the Borrower, in the Borrower's
marine construction business or (iii) has been returned to or
repossessed by the Borrower or stopped in transit (including all
additions and accessions thereto and replacements thereof)).
"Inventory Information Memorandum" means the Bethlehem Steel
Corporation Inventory Financing Facility Overview of Structure and
Collateral dated as of July 1995.
"Inventory Security Agreement" means the Inventory Security
and Pledge Agreement dated as of September 12, 1995 among the
Borrower, the Special Purpose Members, the Collateral Agent and the
Administrative Agent, substantially in the form of Exhibit E hereto,
as amended from time to time.
"Issuance" means the issuance of a Letter of Credit pursuant
to Section 2.2.
"L/C Fee Rate" means a rate per annum determined in
accordance with the Pricing Schedule.
"L/C Issuing Bank" means each of Morgan Guaranty, Chemical
Bank and The Long-Term Credit Bank of Japan, Ltd., each in its
capacity as issuing bank for the Letters of Credit hereunder, or all
of them, as the context may require, and their respective successors
and each such other bank as may be appointed pursuant to Section
2.2(j); provided that when used with respect to any Syndicated Letter
of Credit, "L/C Issuing Bank" shall mean Morgan Guaranty, and when
used with respect to any Participated Letter of Credit, "L/C Issuing
Bank" shall mean whichever of Morgan Guaranty, Chemical Bank, The
Long-
12
<PAGE>
Term Credit Bank of Japan, Ltd. and such other Lender as may be
appointed pursuant to Section 2.2 (j) shall have issued such
Participated Letter of Credit.
"L/C Issuing Bank Letter of Credit Fee" has the meaning set
forth in Section 2.2(g).
"Lender" means each lender listed on the signature pages
hereof, each Assignee which becomes a Lender pursuant to Section , and
their respective successors.
"Letter of Credit Fees" means the Letter of Credit
Participation Fee and the L/C Issuing Bank Letter of Credit Fee.
"Letter of Credit Participation Fee" has the meaning set
forth in Section 2.2(g).
"Letters of Credit" has the meaning set forth in Section
2.2(a)!.
"Lien" means, with respect to any asset, any mortgage,
pledge, lien, security interest, charge or other encumbrance or
security arrangement of any nature whatsoever, including, without
limitation, any conditional sale, capital lease or title retention
arrangement in respect of such asset.
"Loan" means a Domestic Loan or a Euro-Dollar Loan and
"Loans" means Domestic Loans or Euro-Dollar Loans or both.
"London Interbank Offered Rate" has the meaning set forth in
Section .
"Maximum Letter of Credit Amount" means at any time
$150,000,000.
"Morgan Guaranty" means Morgan Guaranty Trust Company of New
York, a New York State banking corporation.
"Multiemployer Plan" means at any time an employee pension
benefit plan within the meaning of Section 4001(a)(3) of ERISA to
which any member of the ERISA Group is then making or accruing an
obligation to make contributions or has within the preceding five plan
years made contributions, including for these purposes any Person
which ceased to be a member of the ERISA Group during such five year
period.
"Notes" means promissory notes of the Borrower, substantially
in the form of Exhibit A hereto, evidencing the obligation of the
Borrower to repay the Loans, and "Note" means any one of such
promissory notes issued hereunder.
"Notice of Borrowing" has the meaning set forth in Section
2.3(a)#.
"Notice of Interest Rate Election" has the meaning set forth
in Section 2.6(a)".
13
<PAGE>
"Notice of Issuance" has the meaning set forth in Section
2.2(b).
"Parent" means, with respect to any Lender, any Person
controlling such Lender.
"Participant" has the meaning set forth in Section .
"Participated Letter of Credit" has the meaning set forth in
Section 2.2(a)(ii).
"PBGC" means the Pension Benefit Guaranty Corporation or any
entity succeeding to any or all of its functions under ERISA.
"Person" means an individual, a corporation, a partnership,
an association, a trust or any other entity or organization, including
a government or political subdivision or an agency or instrumentality
thereof.
"Plan" means at any time an employee pension benefit plan
(other than a Multiemployer Plan) which is covered by Title IV of
ERISA or subject to the minimum funding standards under Section 412 of
the Internal Revenue Code and either (i) is maintained, or contributed
to, by any member of the ERISA Group for employees of any member of
the ERISA Group or (ii) for purposes of Section 6.1(j) only, has at
any time within the preceding five years been maintained, or
contributed to, by any Person which was at such time a member of the
ERISA Group for employees of any Person which was at such time a
member of the ERISA Group, if any member of the ERISA Group would be
subject to liability pursuant to Section 4069(a) of ERISA or any other
provision of Title IV of ERISA relating to treatment of transactions
to evade liability with respect to such plan.
"Pricing Schedule" means the Schedule attached hereto
identified as such.
"Prime Rate" means the rate of interest publicly announced by
Morgan Guaranty in New York City from time to time as its prime rate.
"Quarterly Date" means each March 31, June 30, September 30
and December 31.
"Raw Materials Inventories" means, at any date, all assets of
the Borrower which were or would have been classified by the Borrower
as raw materials and supplies in the Borrower's consolidated financial
statements referred to in Section 4.4(a), except for stores supplies,
foundry products and supplies, initial complement of maintenance spare
parts, brick, lubrication oils and greases, paint, cleaning mixture
(including acids), bolts, nuts, rivets and tool steel.
"Receivables Commitment" means at any time with respect to
each financial institution which is a party to the Receivables
Purchase Agreement, the
14
<PAGE>
commitment of such financial institution under the Receivables
Purchase Agreement.
"Receivables Documents" means the Receivables Purchase
Agreement and such other agreements, documents or instruments entered
into and delivered by BSF or the Borrower in connection with the
transactions contemplated by the Receivables Purchase Agreement.
"Receivables Facility" means the receivables facility
established pursuant to the Receivables Documents.
"Receivables Maximum Purchase Price" means, at any date, the
level of the Adjusted Aggregate Net Investment (as defined in the
Receivables Purchase Agreement) under the Receivables Facility which
would give rise at such date to an Adjusted Buyers' Interest of 100%
under the Receivables Facility.
"Receivables Purchase Agreement" means the Receivables
Purchase Agreement dated as of September 12, 1995 among BSF, the
Special Purpose Members, the Borrower, as servicer, the financial
institutions party thereto, Morgan Guaranty, as administrative agent
and J.P. Morgan Delaware, as structuring and collateral agent,
substantially in the form delivered to the Lenders prior to the date
hereof, and as amended from time to time.
"Reference Banks" means the CD Reference Banks or the
Euro-Dollar Reference Banks, as the context may require, and
"Reference Bank" means any one of such Reference Banks.
"Regulated Activity" means any generation, treatment,
storage, recycling, transportation or disposal of any Hazardous
Substance.
"Regulation U" means Regulation U of the Board of Governors
of the Federal Reserve System, as in effect from time to time.
"Reimbursement Obligation" means an obligation of the
Borrower to reimburse the L/C Issuing Banks or the Lenders, as the
case may be, pursuant to Section 2.2 for the amount of a drawing under
a Letter of Credit.
"Release" means any discharge, emission or release, including
a Release as defined in CERCLA at 42 U.S.C. Section 9601(22). The
term "Released" has a corresponding meaning.
"Required Lenders" means, at any time, Lenders having at
least 66 2/3% of the aggregate amount of the Commitments or, if the
Commitments shall have been terminated, having at least 66 2/3% of the
aggregate Total Exposure of all the Lenders.
"Revolving Credit Period" means the period from and including
the Closing Date to but not including the Termination
Date.
15
<PAGE>
"S&P" means Standard & Poor's Ratings Group, together with
its successors.
"Secured Principal Amount" means, at any time, the sum of (i)
the aggregate principal amount of the Loans then outstanding, (ii) the
aggregate undrawn amount which is then, or may thereafter become,
available for drawing under outstanding Letters of Credit, (iii) the
aggregate amount of all unpaid Reimbursement Obligations for drawings
theretofore made under Letters of Credit and (iv) the aggregate
principal amount of Secured Tax Exempt Debt then outstanding.
"Secured Tax Exempt Debt" means all obligations (whether
contingent or non-contingent) of the Borrower arising under the
Reimbursement Agreement dated as of October 1, 1994 between the
Borrower and NBD Bank and the Tender Agent Agreement dated as of
October 1, 1994 between the Borrower and NBD Bank and all documents
and instruments executed in connection with the foregoing and all
renewals, extensions and amendments thereof; provided that the
aggregate principal amount of such Secured Tax Exempt Debt shall not
at any time exceed $3,000,000.
"Security Interests" means the security interests in the
Collateral granted under the Inventory Security Agreement to secure
the Secured Obligations and Guaranties (as defined therein).
"Significant Subsidiary" means at any time any Subsidiary,
except Subsidiaries which at such time have been designated by the
Borrower (by notice to the Administrative Agent, which may be amended
from time to time) as nonmaterial and which, if aggregated and
considered as a single subsidiary, would not meet the definition of a
"significant subsidiary" contained as of the date hereof in Regulation
S-X of the Securities and Exchange Commission.
"Special Purpose Member" means Bethlehem Steel Credit
Affiliate One, Inc., a Maryland corporation, or Bethlehem Steel Credit
Affiliate Two, Inc., a Maryland corporation, and "Special Purpose
Members" means both Bethlehem Steel Credit Affiliate One, Inc., a
Maryland corporation and Bethlehem Steel Credit Affiliate Two, Inc., a
Maryland corporation.
"Subsidiary" means, as to any Person, any corporation or
other entity of which securities or other ownership interests having
ordinary voting power to elect a majority of the board of directors or
other persons performing similar functions are at the time directly or
indirectly owned by such Person; unless otherwise specified,
"Subsidiary" means a Subsidiary of the Borrower.
"Syndicated Letter of Credit" has the meaning set forth in
Section 2.2(a)!(i).
"Termination Date" means September 12, 2000, or, if such day
is not a Euro-Dollar Business Day, the next succeeding Euro-Dollar
Business Day unless such Euro-Dollar Business Day falls in another
calendar month, in which case the Termination Date shall be the next
preceding Euro-Dollar Business Day.
16
<PAGE>
"Total Exposure" means, with respect to any Lender at any
time, the sum of (i) the aggregate principal amount of its Loans then
outstanding, (ii) its share of the undrawn amount which is then, or
may thereafter become, available for drawing under each outstanding
Letter of Credit and (iii) its share of the amount of each unpaid
Reimbursement Obligation for drawings theretofore made under any
Letter of Credit.
"UCC" means the Uniform Commercial Code as in effect on the
date hereof in the State of New York; provided that if, by reason of
mandatory provisions of law, the perfection or the effect of
perfection or non-perfection of the Security Interests in any
Collateral is governed by the Uniform Commercial Code as in effect in
a jurisdiction other than New York, "UCC" means the Uniform Commercial
Code as in effect in such other jurisdiction for purposes of the
provisions hereof relating to such perfection or effect of perfection
or non-perfection.
"Undrawn L/C Amount" shall mean, with respect to each Letter
of Credit at any date of determination thereof, the undrawn amount of
such Letter of Credit on such date.
"Unfunded Liabilities" means, with respect to any Plan at any
time, the amount (if any) by which (i) the present value of all
benefits under such Plan exceeds (ii) the fair market value of all
Plan assets allocable to such benefits (excluding any accrued but
unpaid contributions), all determined as of the then most recent
valuation date for such Plan, but only to the extent that such excess
represents a potential liability of a member of the ERISA Group to the
PBGC or any other Person under Title IV of ERISA.
"United States" means the United States of America, including
the States and the District of Columbia, but excluding its territories
and possessions.
SECTION 1.2. UCC Terms. With respect to the Security
Interests, terms not otherwise defined herein which are defined in the
UCC shall, unless the context otherwise requires, have the meanings
set forth therein.
SECTION 1.3. Accounting Terms and Determinations. Unless
otherwise specified herein, all accounting terms used herein shall be
interpreted, all accounting determinations hereunder shall be made,
and all financial statements required to be delivered hereunder shall
be prepared in accordance with generally accepted accounting
principles as in effect from time to time, applied on a basis
consistent (except for changes concurred in by the Borrower's
independent public accountants) with the most recent audited
consolidated financial statements of the Borrower and its Consolidated
Subsidiaries delivered to the Lenders; provided that, if any change in
generally accepted accounting principles after June 30, 1995 in itself
materially affects Adjusted Consolidated Tangible Net Worth, the
Borrower may by notice to the Administrative Agent, or the
Administrative Agent (at the request of the Required Lenders) may by
notice to the Borrower, require that Adjusted Consolidated Tangible
Net Worth thereafter be calculated in accordance with generally
accepted accounting principles as in effect, and applied by the
Borrower, immediately before such change in generally accepted
accounting principles occurs. If such notice is given,
17
<PAGE>
the compliance certificates delivered pursuant to Section 5.1(c) after
such change occurs shall be accompanied by reconciliations of the
difference between the calculation set forth therein and a calculation
made in accordance with generally accepted accounting principles as in
effect from time to time after such change occurs.
ARTICLE 2
THE CREDITS
SECTION 2.1. Commitments to Lend. During the Revolving
Credit Period, each Lender severally agrees, on the terms and
conditions set forth in this Agreement, to make Loans to the Borrower
from time to time; provided that, immediately after each such Loan is
made, such Lender's Total Exposure shall not exceed the amount of its
Commitment. Each Borrowing under this Section shall be in an
aggregate principal amount of $20,000,000 or any larger multiple of
$1,000,000 (except that any such Borrowing may be in the aggregate
amount of the unused Commitments) and shall be made from the several
Lenders ratably in proportion to their respective Commitments. Within
the foregoing limits, the Borrower may borrow under this Section,
prepay Loans to the extent permitted by Section 2.11" and reborrow at
any time during the Revolving Credit Period under this Section.
SECTION 2.2. Letters of Credit.
(a) Commitment to Issue Letters of Credit.
-------------------------------------
(i) The Borrower may from time to time request that (A) the
Lenders, acting through the L/C Issuing Bank in accordance with
subsection (iii) below, issue a letter of credit (a "Syndicated Letter
of Credit") pursuant to which the Lenders shall be severally obligated
to the beneficiary to pay any drawings made thereunder ratably in
proportion to their respective Commitments or (B) an L/C Issuing Bank
issue a letter of credit (a "Participated Letter of Credit") pursuant
to which such L/C Issuing Bank shall be obligated to the beneficiary
to pay any drawings made thereunder and the Lenders shall be obligated
to the L/C Issuing Bank to participate ratably in such drawings in
proportion to their respective Commitments as hereinafter provided.
Syndicated Letters of Credit and Participated Letters of Credit are
collectively referred to herein as "Letters of Credit".
(ii) On the Closing Date, each L/C Issuing Bank that has
issued an Existing Letter of Credit shall be deemed, without further
action by any party hereto, to have issued a Participated Letter of
Credit hereunder, and each Lender
18
<PAGE>
shall be deemed, without further action by any party hereto, to have
agreed to participate ratably in proportion to its Commitment in any
drawings made under such Existing Letter of Credit. The Borrower and
the Lenders party hereto that are also party to the Existing Credit
Agreement agree that, concurrently with such issuance hereunder, the
participations in the Existing Letters of Credit under the Existing
Credit Agreement shall be automatically canceled without further
action by any of the parties thereto. On and after the Closing Date
each Existing Letter of Credit shall be deemed issued hereunder and
shall thereupon be a Letter of Credit hereunder.
(iii) Subject to subsection (v) below, and in accordance with
its customary procedures (to the extent such procedures are not
inconsistent with the terms of this Agreement), the L/C Issuing Bank
agrees, on the terms and conditions set forth in this Agreement and at
the request of the Borrower, to execute and deliver Syndicated Letters
of Credit on behalf of each of the Lenders (and not as sole issuer)
for the account of the Borrower or any Subsidiary from time to time
from and including the Effective Date to but excluding the Termination
Date; provided that no Syndicated Letter of Credit shall be issued,
extended or renewed if such L/C Issuing Bank has been notified in
writing by the Borrower, the Administrative Agent or the Required
Lenders that any condition set forth in Section 3.2 is not satisfied
on the date such Syndicated Letter of Credit is to be issued, extended
or renewed; provided further that if any Syndicated Letter of Credit
contains a provision pursuant to which it is deemed extended unless
notice of termination is given by the L/C Issuing Bank, the L/C
Issuing Bank shall give such notice of termination on behalf of each
of the Lenders if it has been notified as provided in the immediately
preceding proviso. The terms of each such Syndicated Letter of Credit
shall provide that each Lender is obligated, severally and not
jointly, to pay any drawings under such Letter of Credit ratably in
proportion to such Lender's Commitment as in effect when such Letter
of Credit is issued. Upon receipt of a Notice of Issuance pursuant to
subsection (b) of this Section with respect to a Syndicated Letter of
Credit, the L/C Issuing Bank shall prepare such Letter of Credit in a
form customarily issued by it for its own account as issuing bank, but
with such changes as the L/C Issuing Bank deems necessary or
appropriate to reflect the fact that such Letter of Credit is a
Syndicated Letter of Credit. Each Lender authorizes the L/C Issuing
Bank to execute and issue such Syndicated Letter of Credit on its
behalf as its attorney in fact; provided that such Syndicated Letter
of Credit is issued in compliance with the provisions of this Section
and within the limitations set forth in subsection (v) below.
Promptly after issuance of any Syndicated Letter of Credit, the L/C
Issuing Bank will send to each of the Lenders a copy of such Letter of
Credit in the form in which it was issued.
(iv) Subject to subsection (v) below, and in accordance with
its customary procedures (to the extent such procedures are not
inconsistent with the terms of this Agreement), the L/C Issuing Bank
agrees, on the terms and conditions set forth in this Agreement and at
the request of the Borrower, to issue Participated Letters of Credit
as sole issuing bank for the account of the Borrower or any Subsidiary
from time to time from and including the Effective Date to but
excluding the Termination Date; provided that no Participated Letter
of Credit shall be issued, extended or renewed if such L/C Issuing
Bank has been notified in writing by the Borrower, the Administrative
Agent or the Required Lenders that any condition set forth in Section
3.2 is not satisfied on the date such Participated.
19
<PAGE>
Letter of Credit is to be issued, extended or renewed; provided
further that if any Participated Letter of Credit contains a provision
pursuant to which it is deemed extended unless notice of termination
is given by the L/C Issuing Bank, the L/C Issuing Bank shall give such
notice of termination if it has been notified as provided in the
immediately preceding proviso. Each Lender agrees to participate
ratably in proportion to its Commitment in any drawings made under
each Participated Letter of Credit.
(v) The obligations of the Lenders and the L/C Issuing Banks
to issue Letters of Credit pursuant to clauses (iii) and (iv) above
are subject to the following additional conditions:
(A) no Letter of Credit shall be issued (or extended or
renewed) if, immediately after the issuance thereof, any
Lender's Total Exposure would exceed the amount of its
Commitment;
(B) no Letter of Credit shall be issued (or extended or
renewed) if, immediately after the issuance thereof, the
Aggregate Letter of Credit Amount would exceed the Maximum
Letter of Credit Amount;
(C) no Letter of Credit shall expire more than 18 months
after its date of issuance; provided that a Letter of Credit
may contain a provision pursuant to which it is deemed to be
extended on an annual basis unless notice of termination is
given by the L/C Issuing Bank; provided further that no
Letter of Credit shall have an expiry date later than seven
Domestic Business Days prior to the Termination Date;
(D) without the approval of the Required Lenders (and in
the case of Participated Letters of Credit, the L/C Issuing
Bank), no Letter of Credit shall be issued (x) to support the
obligations of the Borrower or any Subsidiary with respect to
any Debt or Guarantee, or (y) to finance the export or import
of weapons;
(E) the Borrower shall have used its reasonable best
efforts to cause, to the extent practicable, the aggregate
face amount of all outstanding Participated Letters of Credit
issued by each L/C Issuing Bank to be equal to the aggregate
face amount of all outstanding Participated Letters of Credit
issued by each other L/C Issuing Bank; and
(F) the aggregate face amount of all outstanding
Participated Letters of Credit issued by any one L/C Issuing
Bank shall not exceed $80,000,000.
(vi) The L/C Issuing Banks and the Lenders shall not be
obligated to issue any Letter of Credit in connection with the
financing of imports into or exports from the United States if the L/C
Issuing Bank believes that the issuance of such Letter of Credit would
not meet the criteria (with regard to goods shipped, nationality of
beneficiary, country of origin, or other similar considerations)
customarily applied by it when considering a request to issue such
letters of credit.
20
<PAGE>
(b) Notice of Issuance. The Borrower shall give, at least
------------------
three Domestic Business Days before each Letter of Credit is to be
issued, notice (a "Notice of Issuance") to (x) the Administrative
Agent and (y) to the L/C Issuing Bank issuing such Letter of Credit
(which, in the case of a Participated Letter of Credit, shall, subject
to Section 2.2(a), be the L/C Issuing Bank selected by the Borrower)
specifying: (A) the date of issuance and expiry date of such Letter
of Credit, (B) if Morgan Guaranty is the L/C Issuing Bank, whether
such Letter of Credit is to be a Syndicated Letter of Credit or a
Participated Letter of Credit, (C) the proposed terms of such Letter
of Credit, including the face amount thereof, and (D) the transaction
that is to be supported or financed by such Letter of Credit. The
Administrative Agent shall, upon receipt of a Notice of Issuance,
promptly notify each Lender of the contents thereof and of the amount
of such Lender's ratable share of or participation in such Letter of
Credit and such Notice of Issuance shall not thereafter be revocable
by the Borrower.
(c) Undrawn L/C Amounts. Any increase in the Undrawn L/C
-------------------
Amount with respect to any outstanding Letter of Credit may be by
amendment or replacement of such Letter of Credit, but in either event
such increase shall be deemed to constitute the issuance of a new
Letters of Credit and, therefore, subject to the satisfaction of the
conditions set forth in Section 3.2. Reductions in the Undrawn L/C
Amounts of outstanding Letters of Credit (other than by drawings
thereunder) may occur by the terms thereof or by amendment or
replacement of such Letters of Credit, in which event such reduction
shall be effective at the time of such amendment or exchange.
(d) Drawings under Letters of Credit.
--------------------------------
(i) Upon receipt from the beneficiary of any Letter of
Credit of demand for payment under such Letter of Credit, the
L/C Issuing Bank shall promptly notify the Borrower and the
Administrative Agent of such request for payment and shall
determine in accordance with the terms of such Letter of
Credit whether such request for payment should be honored.
(ii) If the L/C Issuing Bank determines that a demand
for payment by the beneficiary of a Syndicated Letter of
Credit should be honored, the L/C Issuing Bank shall promptly
notify the Borrower, the Administrative Agent and each Lender
of the aggregate amount to be paid as a result of such demand
and shall notify each Lender of its share of such amount.
Each Lender shall make available its share of the amount so
demanded in accordance with the terms of such Syndicated
Letter of Credit, in Federal or other funds immediately
available in New York City, to the L/C Issuing Bank at the
L/C Issuing Bank's address specified in or pursuant to
Section 9.1. The L/C Issuing Bank will make the funds so
received from the Lenders available to the beneficiary at the
L/C Issuing Bank's aforesaid address in accordance with the
terms of such Syndicated Letter of Credit.
(iii) If the L/C Issuing Bank determines that a demand
for payment by the beneficiary of a Participated Letter of
Credit should be honored, the L/C Issuing Bank shall make
available to the beneficiary in
21
<PAGE>
accordance with the terms of such Participated Letter of
Credit the amount of the drawing under such Participated
Letter of Credit. The L/C Issuing Bank shall thereupon
notify the Borrower, the Administrative Agent and each Lender
of the amount of such drawing paid by it and the amount of
each Lender's participation therein.
(e) Reimbursement and Other Payments by the Borrower.
------------------------------------------------
(i) If any amount is drawn under any Letter of Credit, the
Borrower agrees to reimburse (A) the Administrative Agent for the
account of each Lender, in the case of a Syndicated Letter of Credit,
and (B) the L/C Issuing Bank, in the case of a Participated Letter of
Credit, for all amounts paid by such Lender or the L/C Issuing Bank
(as the case may be) upon such drawing, together with any and all
reasonable charges and expenses which any Lender or the L/C Issuing
Bank may pay or incur relative to such drawing and (x) interest on the
amount drawn at the average rate charged to the L/C Issuing Bank on
overnight Federal funds transactions for each day from and including
the date such amount is drawn to but excluding the date such
reimbursement payment is due and payable and (y) interest on any and
all amounts unpaid by the Borrower when due hereunder with respect to
a Letter of Credit from the date when due until such amount is paid in
full, whether before or after judgment, payable on demand, at a rate
per annum equal to the sum of 2% plus the Base Rate. Such
reimbursement payment shall be due and payable (x) on the date the L/C
Issuing Bank notifies the Borrower of such drawing, if such notice is
given at or before 12:00 Noon (New York City time), or (y) if such
notice is given after 12:00 Noon (New York City time), then not later
than 10:00 A.M. (New York City time) on the first Domestic Business
Day succeeding the date such notice is given. Promptly upon receipt
of a reimbursement payment with respect to a Syndicated Letter of
Credit, the Administrative Agent shall distribute to each Lender its
pro rata share thereof, including interest, to the extent received by
the Administrative Agent.
(ii) In addition, the Borrower agrees to pay to each Lender
(in the case of a Syndicated Letter of Credit) and the L/C Issuing
Bank (in the case of a Participated Letter of Credit) upon each
transfer of any Letter of Credit in accordance with its terms, a sum
equal to such amount as shall be necessary to cover the reasonable
costs and expenses of such Lender or the L/C Issuing Bank (as the case
may be) incurred in connection with such transfer.
(f) Payments by Lenders with Respect to Participated Letters
--------------------------------------------------------
of Credit.
---------
(i) Each Lender shall make available an amount equal to its
ratable share of any drawing under a Participated Letter of Credit, in
Federal or other funds immediately available in New York City, to the
L/C Issuing Bank by 3:00 P.M. (New York City time) on the Domestic
Business Day following such drawing, together with interest on such
amount at the average rate charged to the L/C Issuing Bank on
overnight Federal funds transactions on the date of such drawing as
determined by the L/C Issuing Bank, at the L/C Issuing Bank's address
specified in or pursuant to Section 9.1; provided that each Lender's
obligation shall be reduced by its pro rata share of any reimbursement
by the Borrower in respect of such drawing pursuant to Section
2.2(e)(i); provided further that no Lender shall be obligated to make
any payment under this Section with respect to.
22
<PAGE>
any Participat ed Letter of Credit issued, extended or renewed if such
L/C Issuing Bank had been notified in writing by the Borrower, the
Administra tive Agent or the Required Lenders that any condition set
forth in Section 3.2 was not satisfied on the date such Participat ed
Letter of Credit was issued, extended or renewed. The L/C Issuing
Bank shall notify each Lender and the Administra tive Agent of the
amount of such Lender's obligation in respect of any drawing under a
Participat ed Letter of Credit not later than 10:00 A.M. (New York
City time) on the day such payment by such Lender is due. Each Lender
shall be subrogated to the rights of the L/C Issuing Bank against the
Borrower to the extent of all amounts paid by such Lender to the L/C
Issuing Bank, plus interest thereon, from and including the day such
amount is paid by such Lender to the L/C Issuing Bank to but excluding
the day the Borrower makes payment to the L/C Issuing Bank pursuant to
subsection (d) above, whether before or after judgment, at a rate per
annum equal to the sum of 2% plus the Base Rate.
(ii) If any Lender fails to pay any amount required pursuant
to clause (i) of this subsection on the date on which such payment is
due, interest shall accrue on such Lender's obligation to make such
payment from and including the date such payment is due to but
excluding the day such Lender makes such payment, whether before or
after judgment, at a rate per annum equal to (A) in the case of the
day such payment is due to and including the first succeeding Domestic
Business Day (and any intervening days) following the day on which
notice of such Lender's obligation in respect of any drawing was
given, the average rate charged to the L/C Issuing Bank on overnight
Federal funds transactions for each such day as determined by the L/C
Issuing Bank and (B) thereafter, the sum of 2% plus the Base Rate.
Any payment made by any Lender after 3:00 P.M., New York City time, on
any Domestic Business Day shall be deemed for purposes of the
preceding sentence to have been made on the next succeeding Domestic
Business Day.
(iii) The obligation of each Lender to pay to the L/C Issuing
Bank its proportionate share of each drawing under a Participated
Letter of Credit and the obligation of the Borrower to reimburse the
Lenders or the L/C Issuing Banks for payments pursuant to this
Section, shall be irrevocable, shall not be subject to any
qualification or exception whatsoever and shall be binding in
accordance with the terms and conditions of this Agreement under all
circumstances, including, without limitation, the following
circumstances:
(A) any lack of validity or enforceability of this Agreement;
(B) the existence of any claim, set-off, defense or other
right which the Borrower or any Lender may have at any time
against a beneficiary of any Letter of Credit or any
transferee of any Letter of Credit (or any Person for whom
any such transferee may be acting), any L/C Issuing Bank, any
Lender or any other Person, whether in connection with this
Agreement, any Letter of Credit, the transactions
contemplated herein or any unrelated transactions;
(C) any draft, certificate or any other document presented
under any Letter of Credit proving to be forged, fraudulent,
invalid or insufficient.
23
<PAGE>
in any respect or any statement therein being untrue or
inaccurate in any respect;
(D) the surrender or impairment of any security for the
performance or observance of any of the terms of this
Agreement; or
(E) the occurrence or continuance of any Default or Event of
Default.
(g) Letter of Credit Fees. The Borrower agrees to pay to the
---------------------
Administrative Agent for the account of each Lender a letter of credit
fee (the "Letter of Credit Participation Fee") with respect to each
Letter of Credit, computed for each day from and including the date of
issuance of such Letter of Credit until the last day a drawing is
available under such Letter of Credit, at the L/C Fee Rate on the
Undrawn L/C Amount. The Borrower also agrees to pay to each L/C
Issuing Bank, for its own account, a fee (the "L/C Issuing Bank Letter
of Credit Fee"), computed with respect to the Undrawn L/C Amount of
each Participated Letter of Credit issued by such L/C Issuing Bank as
set forth in the preceding sentence, at a rate per annum equal to 1/4
of 1%. Such Letter of Credit Fees shall be payable quarterly in
arrears on each Quarterly Date and on the Termination Date.
(h) Payment upon Acceleration. If the Commitments shall be
-------------------------
terminated or the principal of the Notes shall become immediately due
and payable pursuant to Section 2.10 or 6.1, but the Administrative
Agent shall not have given an Enforcement Notice (as defined in the
Inventory Security Agreement) as provided in Section 6.1, the Borrower
shall pay to the L/C Issuing Bank for application to drawings under
any then outstanding Letters of Credit an amount equal to the
aggregate amount which is then, or may thereafter become, available
for drawing under such Letters of Credit. The L/C Issuing Bank shall
invest such amount in Liquid Investments (as defined in the Inventory
Security Agreement) at the direction of the Administrative Agent. If
the Administrative Agent subsequently gives an Enforcement Notice or
an event specified in clause (h) or (i) of Section 6.1 shall have
occurred and be continuing with respect to the Borrower, the L/C
Issuing Bank shall pay all amounts held by it pursuant to this
subsection to the Collateral Agent for application pursuant to the
Inventory Security Agreement. If an Enforcement Notice is not then in
effect and no event specified in clause (h) or (i) of Section 6.1
shall have occurred and be continuing with respect to the Borrower,
any amount so paid by the Borrower to the L/C Issuing Bank with
respect to a Letter of Credit and not applied to a drawing thereunder
shall be repaid to the Borrower, with interest or other income (to the
extent received by the L/C Issuing Bank on the related Liquid
Investments), as promptly as practicable after such Letter of Credit
expires or is fully drawn.
(i) Limited Liability of the L/C Issuing Bank. The Borrower
-----------------------------------------
assumes all risks of the acts or omissions of any beneficiary and any
transferee of any Letter of Credit with respect to its use of such
Letter of Credit. The Lenders, the L/C Issuing Banks and their
respective officers and directors shall not be liable or responsible
for: (i) the use which may be made of any Letter of Credit or any
acts or omissions of any beneficiary or transferee in connection
therewith; (ii) the validity, sufficiency or genuineness of documents
presented under any Letter of Credit, or of any endorsements thereon,
even if such documents should in fact.
24
<PAGE>
prove to be in any or all respects invalid, insufficient, fraudulent
or forged; (iii) payment by the L/C Issuing Bank or, in the case of a
Syndicated Letter of Credit, any Lender against presentation of
documents to the L/C Issuing Bank which do not comply with the terms
of any Letter of Credit, including failure of any documents to bear
any reference or adequate reference to the Letter of Credit; or (iv)
any other circumstances whatsoever in making or failing to make or
notifying or failing to notify any Lender that it is required to make
any payment under any Letter of Credit. Notwithstanding the
foregoing, the Borrower shall have a claim against the L/C Issuing
Bank and, in the case of clause (ii)(B) of this sentence, against any
Lender, and the L/C Issuing Bank or a Lender, as the case may be,
shall be liable to the Borrower, to the extent, but only to the
extent, of any direct, as opposed to consequential, damages suffered
by the Borrower which were caused by (i) the L/C Issuing Bank's
willful misconduct or gross negligence in determining whether
documents presented under any Letter of Credit comply with the terms
thereof or (ii) (A) the L/C Issuing Bank's willful failure to pay, or
to notify any Lender that it is required to pay, or, (B) in the case
of Syndicated Letters of Credit, a Lender's willful failure to pay,
after receipt of notice from the L/C Issuing Bank pursuant to Section
2.2(d)(ii) , under any Letter of Credit after the presentation to the
L/C Issuing Bank by any beneficiary (or a successor beneficiary to
whom such Letter of Credit has been transferred in accordance with
its terms) of documents strictly complying with the terms and
conditions of such Letter of Credit; provided that this clause (ii)
shall not apply to any failure by the L/C Issuing Bank or Lender to
pay under any Letter of Credit to the extent that such payment is
prevented by injunction or other similar court order. Subject to the
preceding sentence, the L/C 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 unless any beneficiary (or a successor beneficiary to
whom such Letter of Credit has been transferred in accordance with
its terms) and the Borrower shall have notified the L/C Issuing Bank
that such documents do not comply with the terms and conditions of
such Letter of Credit. Each Lender shall, ratably in accordance with
its Commitment , indemnify the L/C Issuing Bank (to the extent not
reimbursed by the Borrower) against any cost, expense (including
counsel fees and disbursements), claim, demand, action, loss or
liability (except such as result from the L/C Issuing Bank's gross
negligence or willful misconduct ) that the L/C Issuing Bank may
suffer or incur in connection with this Agreement or any action taken
or omitted by the L/C Issuing Bank hereunder.
(j) Appointment of L/C Issuing Bank. The Borrower and the
-------------------------------
Administrative Agent may, by one or more written instruments
acceptable to and executed by each of them, appoint one or more
Lenders to perform all or any portion of the functions of an L/C
Issuing Bank with respect to Participated Letters of Credit under this
Agreement.
SECTION 2.3. Method of Borrowing. (a) The Borrower shall
-------------------
give the Administrative Agent notice (a "Notice of Borrowing") not
later than (x) 10:30 A.M. (New York City time) on the date of each
Base Rate Borrowing, (y) 12:00 Noon (New York City time) on the second
Domestic Business Day before each CD Borrowing and (z) 12:00 Noon (New
York City time) on the third Euro-Dollar Business Day before each
Euro-Dollar Borrowing, specifying:
25
<PAGE>
(i) the date of such Borrowing, which shall be a
Domestic Business Day in the case of a Domestic Borrowing or
a Euro-Dollar Business Day in the case of a Euro-Dollar
Borrowing;
(ii) the aggregate amount of such Borrowing;
(iii) whether the Loans comprising such Borrowing are to
bear interest initially at the Base Rate, a CD Rate or a
Euro-Dollar Rate; and
(iv) in the case of a Fixed Rate Borrowing, the duration
of the initial Interest Period applicable thereto, subject to
the provisions of the definition of Interest Period.
A Notice of Borrowing shall not be required in connection
with a conversion pursuant to the second sentence of Section 2.6(c) or
a borrowing of Base Rate Loans pursuant to Section 8.1 or Section 8.2.
(b) Upon receipt of a Notice of Borrowing, the Administrative
Agent shall promptly notify each Lender of the contents thereof and of
such Lender's ratable share of such Borrowing and such Notice of
Borrowing shall not thereafter be revocable by the Borrower.
(c) Not later than 12:00 Noon (New York City time) on the
date of each Borrowing, each Lender shall make available its ratable
share of such Borrowing, in Federal or other funds immediately
available in New York City, to the Administrative Agent at its address
referred to in Section 9.1. Unless the Administrative Agent
determines that any applicable condition specified in Article 3 has
not been satisfied, the Administrative Agent will make the funds so
received from the Lenders available to the Borrower at the
Administrative Agent's aforesaid address.
(d) 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 share of such Borrowing, the Administrative Agent may assume
that such Lender has made such share available to the Administrative
Agent on the date of such Borrowing in accordance with subsection (c)
of this Section and the Administrative Agent may, in reliance upon
such assumption, make available to the Borrower on such date a
corresponding amount. If and to the extent that such Lender shall not
have so made such share available to the Administrative Agent, such
Lender and the Borrower severally agree to repay to the Administrative
Agent forthwith on demand such corresponding amount together with
interest thereon, for each day from the date such amount is made
available to the Borrower until the date such amount is repaid to the
Administrative Agent, at (i) in the case of the Borrower, a rate per
annum equal to the higher of the Federal Funds Rate and the interest
rate applicable thereto pursuant to Section 2.7 and (ii) in the case
of such Lender, the Federal Funds Rate. If such Lender shall repay to
the Administrative Agent such corresponding amount, such amount so
repaid shall constitute such Lender's Loan included in such Borrowing
for purposes of this Agreement.
26
<PAGE>
SECTION 2.4. Notes. (a) The Loans of each Lender shall be
-----
evidenced by a single Note payable to the order of such Lender for the
account of its Applicable Lending Office in an amount equal to the
aggregate unpaid principal amount of such Lender's Loans.
(b) Each Lender may, by notice to the Borrower and the
Administrative Agent, request that its Loans of a particular type be
evidenced by a separate Note in an amount equal to the aggregate
unpaid principal amount of such Loans. Each such Note shall be in
substantially the form of Exhibit A hereto with appropriate
modifications to reflect the fact that it evidences solely Loans of
the relevant type. Each reference in this Agreement to the "Note" of
such Lender shall be deemed to refer to and include any or all of such
Notes, as the context may require.
(c) Upon receipt of each Lender's Note pursuant to Section ,
the Administrative Agent shall forward such Note to such Lender. Each
Lender shall record the date, amount and type of each Loan made by it
and the date and amount of each payment of principal made by the
Borrower with respect thereto, and may, if such Lender so elects in
connection with any transfer or enforcement of its Note, endorse on
the schedule forming a part thereof appropriate notations to evidence
the foregoing information with respect to each such Loan then
outstanding; provided that the failure of any Lender to make any such
recordation or endorsement shall not affect the obligations of the
Borrower hereunder or under the Notes. Each Lender is hereby
irrevocably authorized by the Borrower so to endorse its Note and to
attach to and make a part of its Note a continuation of any such
schedule as and when required.
SECTION 2.5. Maturity of Loans. Each Loan shall mature, and
-----------------
the principal amount thereof shall be due and payable, on the
Termination Date.
SECTION 2.6. Method of Electing Interest Rates. (a) The
---------------------------------
Loans included in each Borrowing shall bear interest initially at the
type of rate specified by the Borrower in the applicable Notice of
Borrowing. Thereafter, the Borrower may from time to time elect to
change or continue the type of interest rate borne by each Group of
Loans (subject in each case to the provisions of Article 8"), as
follows:
(i) if such Loans are Base Rate Loans, the Borrower may
elect to convert such Loans to CD Loans or Euro-Dollar Loans;
(ii) if such Loans are CD Loans, the Borrower may elect
to convert such Loans to Base Rate Loans or Euro-Dollar Loans
or elect to continue such Loans as CD Loans for an additional
Interest Period, subject to Section 2.14 in the case of any
such conversion or continuation effective on any day other
than the last day of the then current Interest Period
applicable to such Loans; and
(iii) if such Loans are Euro-Dollar Loans, the Borrower
may elect to convert such Loans to Base Rate Loans or CD
Loans or elect to continue such Loans as Euro-Dollar Loans
for an additional Interest Period, subject to Section 2.14 in
the case of any such conversion or
27
<PAGE>
continuation effective on any day other than the last day of
the then current Interest Period applicable to such Loans.
Each such election shall be made by delivering a notice (a
"Notice of Interest Rate Election") to the Administrative
Agent not later than 10:00 A.M. (New York City time) on the
third Euro-Dollar Business Day before the conversion or
continuation selected in such notice is to be effective
(unless the relevant Loans are Domestic Loans to be converted
to Domestic Loans of the other type or are CD Rate Loans to
be continued as CD Rate Loans for an additional Interest
Period, in which case such notice shall be delivered to the
Administrative Agent not later than 10:00 A.M. (New York
City time) on the second Domestic Business Day before such
conversion or continuation is to be effective). A Notice of
Interest Rate Election may, if it so specifies, apply to only
a portion of the aggregate principal amount of the relevant
Group of Loans; provided that (i) such portion is allocated
ratably among the Loans comprising such Group and (ii) the
portion to which such Notice applies, and the remaining
portion to which it does not apply, are each $20,000,000 or
any larger multiple of $1,000,000.
(b) Each Notice of Interest Rate Election shall specify:
(i) the Group of Loans (or portion thereof) to which
such notice applies;
(ii) the date on which the conversion or continuation
selected in such notice is to be effective, which shall
comply with the applicable clause of subsection (a) above;
(iii) if the Loans comprising such Group are to be
converted, the new type of Loans and, if the Loans being
converted are to be Fixed Rate Loans, the duration of the
next succeeding Interest Period applicable thereto; and
(iv) if such Loans are to be continued as CD Loans or
Euro-Dollar Loans for an additional Interest Period, the
duration of such additional Interest Period.
Each Interest Period specified in a Notice of Interest Rate
Election shall comply with the provisions of the definition of
Interest Period.
(c) Upon receipt of a Notice of Interest Rate Election from
the Borrower pursuant to subsection (a) above, the Administrative
Agent shall promptly notify each Lender of the contents thereof and
such notice shall not thereafter be revocable by the Borrower. If the
Administrative Agent does not receive a Notice of Interest Period
Election for Fixed Rate Loans pursuant to subsection (a) of this
Section within the applicable time limit specified therein prior to
the last day of the current Interest Period applicable to such Loans,
and the Borrower has not
28
<PAGE>
delivered a notice of prepayment relating to such Loans, then the
Borrower shall be deemed to have elected that such Loans be converted
to Base Rate Loans on the last day of such Interest Period.
(d) An election by the Borrower to change or continue the
rate of interest applicable to any Group of Loans pursuant to this
Section shall not constitute a "Borrowing" subject to the provisions
of Section 3.2.
SECTION 2.7. Interest Rates. (a) Each Base Rate Loan shall
--------------
bear interest on the outstanding principal amount thereof, for each
day from the date such Loan is made until it becomes due, at a rate
per annum equal to the sum of the Base Rate Margin for such day plus
the Base Rate for such day. Such interest shall be payable quarterly
on each Quarterly Date and on the Termination Date, commencing on the
first such date after such Base Rate Loan is made and, with respect to
the principal amount of any Base Rate Loan converted to a CD Loan or a
Euro-Dollar Loan, on each date a Base Rate Loan is so converted. Any
overdue principal of or interest on any Base Rate Loan shall bear
interest, payable on demand, for each day until paid at a rate per
annum equal to the sum of 2% plus the rate otherwise applicable to
Base Rate Loans for such day.
(b) Each CD Loan shall bear interest on the outstanding
principal amount thereof, for each day during each Interest Period
applicable thereto, at a rate per annum equal to the sum of the CD
Margin for such day plus the Adjusted CD Rate applicable to such
Interest Period; provided that if any CD Loan shall, as a result of
clause (ii)(b) of the definition of Interest Period, have an Interest
Period of less than 30 days, such CD Loan shall bear interest during
such Interest Period at the rate applicable to Base Rate Loans during
such period. Such interest shall be payable for each Interest Period
on the last day thereof and, with respect to the principal amount of
any CD Loan converted or continued pursuant to Section 2.6 on a day
other than the last day of the Interest Period applicable thereto, on
the date of such conversion or continuation. Any overdue principal of
or interest on any CD Loan shall bear interest, payable on demand, for
each day until paid at a rate per annum equal to the sum of 2% plus
the higher of (i) the rate applicable to Base Rate Loans for such day
and (ii) the sum of the CD Margin plus the Adjusted CD Rate applicable
to such Loan at the date such payment was due.
The "Adjusted CD Rate" applicable to any Interest Period
means a rate per annum determined pursuant to the following formula:
[ CDBR ] 1
ACDR = [ ------- ] + AR
[ 1.00 - DRP ]
ACDR = Adjusted CD Rate
CDBR = CD Base Rate
---------------------
1 The amount in brackets being rounded upward, if necessary, to the
next higher 1/100 of 1%.
29
<PAGE>
DRP = Domestic Reserve Percentage
AR = Assessment Rate.
The "CD Base Rate" applicable to any Interest Period is the
rate of interest determined by the Administrative Agent to be the
average (rounded upward, if necessary, to the next higher 1/100 of 1%)
of the prevailing rates per annum bid at 10:00 A.M. (New York City
time) (or as soon thereafter as practicable) on the first day of such
Interest Period by two or more New York certificate of deposit dealers
of recognized standing for the purchase at face value from each CD
Reference Bank of its certificates of deposit in an amount comparable
to the principal amount of the CD Loan of such CD Reference Bank to
which such Interest Period applies and having a maturity comparable to
such Interest Period.
"Domestic Reserve Percentage" means for any day that
percentage (expressed as a decimal) which is in effect on such day, as
prescribed by the Board of Governors of the Federal Reserve System (or
any successor) for determining the maximum reserve requirement
(including without limitation any basic, supplemental or emergency
reserves) for a member bank of the Federal Reserve System in New York
City with deposits exceeding five billion dollars in respect of new
non-personal time deposits in dollars in New York City having a
maturity comparable to the related Interest Period and in an amount of
$100,000 or more. The Adjusted CD Rate shall be adjusted
automatically on and as of the effective date of any change in the
Domestic Reserve Percentage.
"Assessment Rate" means for any day the annual assessment
rate in effect on such day which is payable by a member of the Bank
Insurance Fund classified as adequately capitalized and within
supervisory subgroup "A" (or a comparable successor assessment risk
classification) within the meaning of 12 C.F.R. Sec 327.4(a) (or any
successor provision) to the Federal Deposit Insurance Corporation (or
any successor) for such Corporation's (or such successor's) insuring
time deposits at offices of such institution in the United States.
The Adjusted CD Rate shall be adjusted automatically on and as of the
effective date of any change in the Assessment Rate.
(c) Each Euro-Dollar Loan shall bear interest on the
outstanding principal amount thereof, for each day during each
Interest Period applicable thereto, at a rate per annum equal to the
sum of the Euro-Dollar Margin for such day plus the Adjusted London
Interbank Offered Rate applicable to such Interest Period; provided
that, if any Euro-Dollar Loan shall, as a result of clause (i)(c) of
the definition of Interest Period, have an Interest Period of less
than one month, such Euro-Dollar Loan shall bear interest during such
Interest Period at the rate applicable to Base Rate Loans during such
period. Such interest shall be payable for each Interest Period on
the last day thereof and, if such Interest Period is longer than three
months, at intervals of three months after the first day thereof and,
with respect to the principal amount of any Euro-Dollar Loan converted
or continued pursuant to Section 2.6 on a day other than the last day
of the Interest Period applicable thereto, on the date of such
conversion or continuation.
30
<PAGE>
The "Adjusted London Interbank Offered Rate" applicable to
any Interest Period means a rate per annum equal to the quotient
obtained (rounded upward, if necessary, to the next higher 1/100 of
1%) by dividing (i) the applicable London Interbank Offered Rate by
(ii) 1.00 minus the Euro-Dollar Reserve Percentage.
The "London Interbank Offered Rate" applicable to any
Interest Period means the average (rounded upward, if necessary, to
the next higher 1/16 of 1%) of the respective rates per annum at which
deposits in Dollars are offered to each of the Euro-Dollar Reference
Banks in the London interbank market at approximately 11:00 A.M.
(London time) two Euro-Dollar Business Days before the first day of
such Interest Period in an amount approximately equal to the principal
amount of the Euro-Dollar Loan of such Euro-Dollar Reference Bank to
which such Interest Period is to apply and for a period of time
comparable to such Interest Period.
"Euro-Dollar Reserve Percentage" means for any day that
percentage (expressed as a decimal) which is in effect on such day, as
prescribed by the Board of Governors of the Federal Reserve System (or
any successor) for determining the maximum reserve requirement for a
member bank of the Federal Reserve System in New York City with
deposits exceeding five billion dollars in respect of "Eurocurrency
liabilities" (or in respect of any other category of liabilities which
includes deposits by reference to which the interest rate on
Euro-Dollar Loans is determined or any category of extensions of
credit or other assets which includes loans by a non-United States
office of any Lender to United States residents). The Adjusted London
Interbank Offered Rate shall be adjusted automatically on and as of
the effective date of any change in the Euro-Dollar Reserve
Percentage.
(d) Any overdue principal of or interest on any Euro-Dollar
Loan shall bear interest, payable on demand, for each day until paid
at a rate per annum equal to the higher of (i) the sum of 2% plus the
Euro-Dollar Margin for such day plus the quotient obtained (rounded
upward, if necessary, to the next higher 1/100 of 1%) by dividing (x)
the average (rounded upward, if necessary, to the next higher 1/16 of
1%) of the respective rates per annum at which one day (or, if such
amount due remains unpaid more than three Euro-Dollar Business Days,
then for such other period of time not longer than three months as the
Administrative Agent may select) deposits in dollars in an amount
approximately equal to such overdue payment due to each of the
Euro-Dollar Reference Banks are offered to such Euro-Dollar Reference
Bank in the London interbank market for the applicable period
determined as provided above by (y) 1.00 minus the Euro-Dollar Reserve
Percentage (or, if the circumstances described in clause (a) or (b) of
Section 8.1" shall exist, at a rate per annum equal to the sum of 2%
plus the rate applicable to Base Rate Loans for such day) and (ii) the
sum of 2% plus the Euro-Dollar Margin for such day plus the Adjusted
London Interbank Offered Rate applicable to such Loan at the date such
payment was due.
(e) The Administrative Agent shall determine each interest
rate applicable to the Loans hereunder. The Administrative Agent
shall give prompt notice to the Borrower and the participating Lenders
of each rate of interest so determined, and its determination thereof
shall be conclusive in the absence of manifest error.
31
<PAGE>
(f) Each Reference Bank agrees to use its best efforts to
furnish quotations to the Administrative Agent as contemplated by this
Section. If any Reference Bank does not furnish a timely quotation,
the Administrative Agent shall determine the relevant interest rate on
the basis of the quotation or quotations furnished by the remaining
Reference Bank or Banks or, if none of such quotations is available on
a timely basis, the provisions of Section 8.1" shall apply.
SECTION 2.8. Fees. (a) Subject to subsection (b) below, the
Borrower shall pay to the Administrative Agent for the account of each
Lender a commitment fee (the "Commitment Fee") calculated at the
Commitment Fee Rate (determined daily in accordance with the Pricing
Schedule) on the excess of such Lender's Commitment over such Lender's
Total Exposure.
(b) Commitment Fees shall accrue from and including the
Closing Date to but excluding the date of termination of the
Commitments in their entirety and shall be payable on each Quarterly
Date prior to the Termination Date with respect to the three month
period ending one month prior to such Quarterly Date, and on the
Termination Date. Commitment Fees which are payable on the
Termination Date or on any other date on which the termination of the
Commitments in their entirety is effective (the "Final Fee Payment
Date") shall be calculated with respect to the period from the most
recent date with respect to which such fees have been paid pursuant to
this Section to the Final Fee Payment Date. The aggregate amount of
Commitment Fees payable to the Administrative Agent for the account of
each Lender on each Quarterly Date shall be reduced by an amount
determined by the Borrower and such Lender to be equal to the product
of (i) the amount of Net Free Balances (if any) maintained by the
Borrower and its Subsidiaries with such Lender during the three month
period ending two months prior to such Quarterly Date and (ii) the
Average Credit Balance Rate for the three month period ending two
months prior to such Quarterly Date; provided that the portion of any
payment of Commitment Fees due on the Final Fee Payment Date that
relates to a period that is more recent than two months prior to such
date shall not be reduced on account of any Net Free Balances. Upon
making each payment of such Commitment Fees to the Administrative
Agent, the Borrower shall advise the Administrative Agent as to the
portion thereof to be paid for the account of each Lender, and the
Administrative Agent shall distribute such payment in accordance with
such advice. For purposes of this Section 2.8, "Net Free Balances"
for any Lender during any period means the daily average amount of
collected balances maintained by the Borrower and its Subsidiaries in
non-interest bearing accounts with such Lender during such period that
the Borrower and such Lender have agreed do not support credit or
operational services performed by such Lender (other than pursuant to
this Agreement) for the Borrower and its Subsidiaries, and "Average
Credit Balance Rate" means for any period the average of the 90-day
U.S. Treasury Bill rate as of the end of each week or portion thereof
during such period as calculated by the Administrative Agent, such
calculation to be conclusive in the absence of manifest error.
(c) On the Closing Date, the Borrower shall pay to the
Agents, for their own accounts, such fees and compensation in such
amounts as are set forth in the letter dated July 24, 1995.
32
<PAGE>
(d) On the Closing Date, the Borrower shall pay to the
Administrative Agent for the account of each Lender, a fee equal to
(w) 5/8 of 1% of such Lender's Commitment, if such Lender's Initial
Commitment was at least $30,000,000, (x) 1/2 of 1% of such Lender's
Commitment, if such Lender's Initial Commitment was at least
$20,000,000 but less than $30,000,000, (y) G of 1% of such Lender's
Commitment, if such Lender's Initial Commitment was at least
$10,000,000 but less than $20,000,000, and (z) 1/4 of 1% of such
Lender's Commitment, if such Lender's Initial Commitment was at least
$6,000,000 but less than $10,000,000.
SECTION 2.9. Optional Termination or Reduction of
------------------------------------
Commitments. During the Revolving Credit Period, the Borrower may,
-----------
upon at least three Domestic Business Days' notice to the
Administrative Agent, (i) terminate the Commitments at any time, if no
Loans, Letters of Credit or Reimbursement Obligations are then
outstanding or (ii) reduce the Commitments from time to time by an
aggregate amount of $25,000,000 or any multiple of $5,000,000 in
excess thereof; provided that, in connection with each such reduction
of the Commitments, (x) the amounts by which the Commitments of the
several Lenders are reduced shall be in proportion to the amounts
shown on the signature pages hereof as their respective Commitments
and (y) after giving effect to such reduction, the Total Exposure of
each Lender shall not exceed the amount of its Commitment as so
reduced. If the Commitments are reduced, any accrued Commitment Fees
applicable to the amount by which the Commitments were so reduced
shall be due and payable one month after the effective date of such
reduction. If the Commitments are terminated in their entirety, all
accrued Commitment Fees shall be payable on the effective date of such
termination.
SECTION 2.10. Mandatory Termination of Commitments. The
------------------------------------
Commitments shall terminate on the earliest of (i) the Termination
Date, (ii) the date on which commitments are terminated under the
Receivables Purchase Agreement, and (iii) the date on which
Commitments are terminated in accordance with this Agreement, and, in
any case, any Loans then outstanding (together with accrued interest
thereon) shall be due and payable on such date and any Letters of
Credit then outstanding shall be cash collateralized on such date in
accordance with Section 2.2(h).
SECTION 2.11. Optional Prepayments. (a) Subject in the case
--------------------
of any Fixed Rate Borrowing to Section 2.14, the Borrower may, (i)
upon notice delivered to the Administrative Agent not later than 10:00
A.M. (New York City time) on the day of any prepayment, prepay the
Group of Base Rate Loans, (ii) upon notice delivered to the
Administrative Agent not later than 12:00 Noon (New York City time) on
the second Domestic Business Day before the day of prepayment, prepay
any Group of CD Loans, and (iii) upon notice delivered to the
Administrative Agent not later than 12:00 Noon (New York City time) on
the third Euro-Dollar Business Day before the day of prepayment,
prepay any Group of Euro-Dollar Loans, in each case, in whole at any
time, or from time to time in part in amounts aggregating $20,000,000
or any larger multiple of $1,000,000, by paying the principal amount
to be prepaid together with interest accrued thereon to the date of
prepayment. Each such optional prepayment shall be applied to prepay
ratably the Loans of the several Lenders included in such Group.
33
<PAGE>
(b) Upon receipt of a notice of prepayment pursuant to this
Section, the Administrative Agent shall promptly notify each Lender of
the contents thereof and of such Lender's ratable share of such
prepayment and such notice shall not thereafter be revocable by the
Borrower.
SECTION 2.12. Mandatory Prepayments. (a) If on the date of
---------------------
delivery of any Borrowing Base Certificate pursuant to Section
5.1(e)(ii), 5.1(f), 5.1(g) or 5.1(k) or on the date of any closing
referred to in any certificate delivered pursuant to Section 5.7(ii),
the Applicable Percentage of the Secured Principal Amount shall exceed
the Borrowing Base reflected in the applicable certificate, the
Borrower shall prepay the Loans (together with interest accrued
thereon) to the extent required so that the Applicable Percentage of
the Secured Principal Amount on such date does not exceed the
Borrowing Base so reflected.
(b) Each prepayment of Loans required by subsection (a) of
this Section shall be made with respect to such Group or Groups of
Loans as the Borrower may specify by notice to the Administrative
Agent at or before the time of such prepayment and shall be applied to
prepay the Loans comprising each such Group pro rata; provided that,
if no such timely specification is given by the Borrower, such payment
shall be allocated to such Group or Groups as the Administrative Agent
may determine.
(c) If after all Loans have been repaid pursuant to
subsection (a) of this Section the Total Exposure of any Lender still
exceeds the amount of such Lender's Commitment or the Applicable
Percentage of the Secured Principal Amount still exceeds the Borrowing
Base, the Borrower shall pay to the L/C Issuing Bank for application
to future drawings under any then outstanding Letters of Credit an
amount equal to such excess (or such lesser amount as the Lenders
agree is sufficient to cover such future drawings). Any amounts paid
to Morgan Guaranty in its capacity as L/C Issuing Bank with respect to
any Syndicated Letter of Credit shall be held and invested by Morgan
Guaranty on behalf of each of the Lenders. The L/C Issuing Bank shall
invest such amount in Liquid Investments (as defined in the Inventory
Security Agreement) at the direction of the Administrative Agent, and
shall apply such amount to drawings in the order in which such
drawings are made. To the extent not applied to drawings under any
Letter of Credit, such amount shall be repaid to the Borrower with
interest in the manner provided in Section 2.2(h) as promptly as
practicable after the earlier of (i) the date on which all outstanding
Letters of Credit have expired or been fully drawn and (ii) the date
("Delivery Date") the Collateral Agent delivers a Collateral Report,
if the Borrowing Base on each date for which the Borrower has been
required to calculate the Borrowing Base pursuant to Section 5.1(e)
since the date of payment by the Borrower of such amount and on any
other date for which an estimate has been made during the thirty-day
period preceding the Delivery Date exceeds the Applicable Percentage
of the Secured Principal Amount on such date. If the Administrative
Agent gives an Enforcement Notice (as defined in the Inventory
Security Agreement), the L/C Issuing Bank shall pay all amounts held
by it pursuant to this subsection to the Collateral Agent for
application pursuant to the Inventory Security Agreement.
(d) At any time the Borrower is required to make a payment to
the L/C Issuing Banks pursuant to subsection (c), the Collateral
Agent, if requested by the
34
<PAGE>
Required Lenders, shall prepare and deliver a Collateral Report to the
Lenders, the L/C Issuing Banks, the Administrative Agent and the
Borrower. The Borrower will, promptly upon notice of such request,
provide to the Collateral Agent all information and evidence
reasonably requested concerning the Inventory to enable the Collateral
Agent to prepare the Collateral Report.
SECTION 2.13. General Provisions as to Payments. (a) The
---------------------------------
Borrower shall make each payment of principal of, and interest on, the
Loans and of Fees and other amounts payable hereunder, not later than
12:00 Noon (New York City time) on the date when due, in Federal or
other funds immediately available in New York City, to the
Administrative Agent at its address referred to in Section 9.1. The
Administrative Agent shall promptly distribute to each Lender its
ratable share of each such payment received by the Administrative
Agent for the account of the Lenders. Whenever any payment of
principal of, or interest on, the Domestic Loans or of Fees or other
amounts payable hereunder shall be due on a day which is not a
Domestic Business Day, the date for payment thereof shall be extended
to the next succeeding Domestic Business Day. Whenever any payment of
principal of, or interest on, the Euro-Dollar Loans shall be due on a
day which is not a Euro-Dollar Business Day, the date for payment
thereof shall be extended to the next succeeding Euro-Dollar Business
Day unless such Euro-Dollar Business Day falls in another calendar
month, in which case the date for payment thereof shall be the next
preceding Euro-Dollar Business Day. If the date for any payment of
principal is extended by operation of law or otherwise, interest
thereon shall be payable for such extended time.
(b) Unless the Administrative Agent shall have received
notice from the Borrower prior to the date on which any payment is due
to the Lenders hereunder that the Borrower will not make such payment
in full, the Administrative Agent may assume that the Borrower has
made such payment in full to the Administrative Agent on such date and
the Administrative Agent may, in reliance upon such assumption, cause
to be distributed to each Lender on such due date an amount equal to
the amount then due such Lender. If and to the extent that the
Borrower shall not have so made such payment, each Lender shall repay
to the Administrative Agent forthwith on demand such amount
distributed to such Lender together with interest thereon, for each
day from the date such amount is distributed to such Lender until the
date such Lender repays such amount to the Administrative Agent, at
the Federal Funds Rate.
SECTION 2.14. Funding Losses. If the Borrower makes any
--------------
payment of principal with respect to any Fixed Rate Loan or any Fixed
Rate Loan is converted or continued (pursuant to Article 2, 6, 8" or
otherwise) on any day other than the last day of an Interest Period
applicable thereto, or the last day of an applicable period fixed
pursuant to Section , or if the Borrower fails to borrow, prepay,
convert or continue any Fixed Rate Loans after notice has been given
to any Lender in accordance with Section , 2.6 or the Borrower shall
reimburse each Lender within 15 days after demand for any resulting
loss or expense incurred by it (or by any existing or prospective
Participant in the related Loan), including (without limitation) any
loss incurred in obtaining, liquidating or employing deposits from
third parties, but excluding loss of margin for the period after any
such payment, conversion or continuation or failure to borrow, prepay,
convert or continue; provided that such Lender shall have delivered to
the Borrower a
35
<PAGE>
certificate as to the amount of such loss or expense, which
certificate shall be conclusive in the absence of manifest error.
SECTION 2.15. Computation of Interest and Fees. Interest
--------------------------------
based on the Prime Rate hereunder shall be computed on the basis of a
year of 365 days (or 366 days in a leap year) and paid for the actual
number of days elapsed (including the first day but excluding the last
day). All other interest and Commitment Fees shall be computed on the
basis of a year of 360 days and paid for the actual number of days
elapsed (including the first day but excluding the last day). Letter
of Credit Fees shall be computed on the basis of a year of 360 days
and paid for the actual number of days elapsed, calculated for the
relevant period (including the first day and including the last day).
ARTICLE 3
CONDITIONS TO BORROWINGS AND ISSUANCES
SECTION 3.1. Closing. The closing hereunder shall occur
-------
upon receipt by the Agents of the following, all of which shall be in
form and substance acceptable to the Agents:
(a) a duly executed Note for the account of each Lender dated
on or before the Closing Date complying with the provisions of Section
2.4;
(b) an opinion dated the Closing Date of the Assistant
General Counsel of the Borrower in substantially the form of Exhibit G
hereto and covering such other matters as the Administrative Agent may
reasonably request;
(c) an opinion dated the Closing Date of Davis Polk &
Wardwell, special counsel for the Agents in substantially the form of
Exhibit H hereto and covering such other matters as the Administrative
Agent may reasonably request;
(d) evidence satisfactory to the Administrative Agent that
the commitments under the Existing Credit Agreement have terminated,
all loans thereunder have been repaid in full (all Lenders hereunder
which are also lenders under the Existing Credit Agreement hereby
agreeing that such repayment may be made, whether at the end of
interest periods under the Existing Credit Agreement or not), all
accrued fees and other amounts payable thereunder (including, without
limitation, any funding costs payable pursuant to the Existing Credit
Agreement) have been paid in full and that all letters of credit
issued thereunder (other than those listed on Schedule 1 and those
deemed to be issued under the Receivables Purchase Agreement) have
been returned to the issuers thereof (or to the Administrative Agent)
for cancellation;
36
<PAGE>
(e) a Borrowing Base Certificate dated the Closing Date
setting forth the Borrowing Base as of August 31, 1995;
(f) a duly executed copy of the Inventory Security Agreement,
a duly executed copy of the Perfection Certificate (as defined in the
Inventory Security Agreement); all Pledged Instruments (as defined in
the Inventory Security Agreement) delivered to the Collateral Agent
and endorsed to the order of the Collateral Agent; and all
certificates representing Pledged Stock or Pledged Interests (in each
case as defined in the Inventory Security Agreement), accompanied by
duly executed instruments of transfer or assignment in blank,
delivered to the Collateral Agent;
(g) acknowledgement copies of proper financing statements
(Form UCC-1) naming the Borrower as the debtor and the Collateral
Agent, on behalf of the Lenders, as the secured party, or other
similar instruments or documents as may be necessary or, in the
opinion of the Collateral Agent or its counsel, desirable under the
UCC of all appropriate jurisdictions to evidence and perfect the
Lenders' Security Interests in the Borrower's Collateral (as defined
in the Inventory Security Agreement);
(h) acknowledgement copies of proper financing statements
(Form UCC-1) naming the Special Purpose Members as the debtors and the
Collateral Agent, on behalf of the Lenders, as the secured party, or
other similar instruments or documents as may be necessary or, in the
opinion of the Collateral Agent or its counsel, desirable under the
UCC of all appropriate jurisdictions to evidence and perfect the
Lenders' Security Interests in the Special Purpose Members' Collateral
(as defined in the Inventory Security Agreement);
(i) executed financing statements (Form UCC-3) necessary to
release all security interests and other rights of any Person
previously granted by the Borrower in the Borrower's Collateral;
(j) (i) requests for information or copies (Form UCC-11) (or
a similar search report certified by parties acceptable to the
Collateral Agent or its counsel) dated a date reasonably near the
Closing Date listing all effective financing statements which name the
Borrower (under its present name and any previous name) as debtor,
together with copies of such financing statements (none of which,
unless subject to a release referred to in clause (h) above, shall
cover any Collateral) and (ii) requests for information dated a date
reasonably near the Closing Date regarding tax liens against the
Borrower in the relevant offices in the States of Indiana, Maryland,
New York and Pennsylvania;
(k) from NBD Bank a certificate of an authorized officer of
NBD Bank attaching a true and correct copy of the instrument or
instruments evidencing the Secured Tax Exempt Debt;
(l) a certificate as to insurance coverage as required by
Section 5.2(b);
(m) a certificate signed by the Chief Financial Officer,
Treasurer or Controller of the Borrower that the representations and
warranties of the Borrower contained in this Agreement shall be true
on and as of the Closing Date;
37
<PAGE>
(n) the fees described in Section 2.8(c) and (d);
(o) evidence satisfactory to the Administrative Agent of the
satisfaction of all the conditions to the closing of the Receivables
Facility on the Closing Date, and that all transactions contemplated
by the Receivables Documents to be consummated on the Closing Date
will take place prior to or contemporaneously with the closing
contemplated hereunder; and
(p) all documents the Agents may reasonably request relating
to the existence of the Borrower, the corporate authority for and the
validity of the Financing Documents, and any other matters relevant
hereto, all in form and substance satisfactory to the Agents.
The Administrative Agent shall promptly notify the Borrower
and the Lenders of the date on which the foregoing conditions have
been satisfied, and such notice shall be conclusive and binding on all
parties hereto.
SECTION 3.2. All Borrowings and Issuances. The obligation
----------------------------
of each Lender to make a Loan on the occasion of each Borrowing and
the obligation of the L/C Issuing Bank to issue each Letter of Credit
are subject to the satisfaction of the following conditions:
(a) (i) receipt by the Administrative Agent of a Notice of
Borrowing as required by Section 2.3(a)# or (ii) receipt by the L/C
Issuing Bank of a Notice of Issuance as required by Section 2.2, as
the case may be;
(b) receipt by the Administrative Agent of a certificate
dated the date of such Borrowing or Issuance and signed by the Chief
Financial Officer, the Treasurer or the Controller of the Borrower
certifying that:
(i) immediately before and after such Borrowing or
Issuance, no Default or Potential Termination Event or
Termination Event (as such terms are defined in the
Receivables Purchase Agreement) shall have occurred and be
continuing; and
(ii) the representations and warranties of the Borrower
contained in this Agreement (other than the representation
and warranty set forth in Section 4.4(c)) and the other
Financing Documents shall be true on and as of the date of
such Borrowing;
(c) the fact that immediately after such Borrowing or
Issuance the Applicable Percentage of the Secured Principal Amount
shall not exceed the lesser of (i) the Borrowing Base reflected in the
most recent Borrowing Base Certificate delivered to the Administrative
Agent and (ii) the Receivables Maximum Purchase Price; and
38
<PAGE>
(d) the fact that no Federal Lien shall have been filed
against the Borrower which covers or may cover any Collateral (as
defined in the Inventory Security Agreement) and such Federal Lien
remains undischarged.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants that:
SECTION 4.1. Corporate Existence and Power. The Borrower is
-----------------------------
a corporation duly incorporated, validly existing and in good standing
under the laws of the State of Delaware, and has all corporate powers
and all material governmental licenses, authorizations, consents and
approvals required to carry on its business as now conducted.
SECTION 4.2. Corporate and Governmental Authorization; No
--------------------------------------------
Contravention. The execution, delivery and performance by the
-------------
Borrower of the Financing Documents are within the Borrower's
corporate powers, have been duly authorized by all necessary corporate
action, require no action by or in respect of, or filing with, any
governmental body, agency or official (except as contemplated by the
Inventory Security Agreement) and do not contravene, or constitute a
default under, any provision of applicable law or re