<PAGE>
EXHIBIT 4.10
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COLLATERAL AGENCY AND INTERCREDITOR AGREEMENT
DATED AS OF THE
20TH DAY OF MARCH, 2003
BY AND AMONG
U.S. BANK NATIONAL ASSOCIATION, INDIVIDUALLY AND
AS COLLATERAL AGENT
BANK OF AMERICA, N.A.,
VARIOUS NOTEHOLDERS,
THE NORTHERN TRUST COMPANY,
A. M. CASTLE & CO.
AND
VARIOUS GUARANTORS
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TABLE OF CONTENTS
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PAGE
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Section 1.
DEFINITIONS.......................................................................
4
Section 1.1.
Definitions........................................................
4
Section 1.2.
Terms Generally...................................................
17
Section 2. RECOURSE OF SECURED PARTIES; OTHER
COLLATERAL; ACTION BY SECURED PARTIES.......... 17
Section 2.1.
Recourse of Secured Parties; Other Collateral......................
17
Section 2.2.
Action by Secured Parties..........................................
18
Section 3. DUTIES OF COLLATERAL
AGENT........................................................
18
Section 3.1.
Notices to the Secured Parties.....................................
18
Section 3.2.
Actions Under Security Documents...................................
19
Section 3.3.
Status of Moneys Received..........................................
20
Section 4. CERTAIN INTERCREDITOR
ARRANGEMENTS................................................
20
Section 4.1.
General Rule: Pari
Passu Rights Against Collateral................ 20
Section 4.2.
Non-Cash Distributions or Proceeds.................................
22
Section 4.3.
Additional Collateral..............................................
22
Section 4.4.
Certain Notices....................................................
22
Section 4.5.
Enforcement........................................................
23
Section 4.6.
Turnover of Collateral.............................................
23
Section 4.7.
Payments From Enforcement Rights...................................
24
Section 4.8.
Waivers and Amendments of Credit Documents.........................
24
Section 4.9.
Independent Investigation; Sharing of Financial Information........
25
Section 4.10.
Agents.............................................................
25
Section 5. CONCERNING THE COLLATERAL
AGENT...................................................
25
Section 5.1.
Appointment of Collateral Agent....................................
25
Section 5.2.
Limitations on Responsibility of Collateral Agent..................
26
Section 5.3.
Reliance by Collateral Agent; Etc..................................
27
Section 5.4.
Resignation or Removal of the Collateral Agent.....................
28
Section 5.5.
Expenses and Indemnification.......................................
29
Section 5.6.
Expenses and Indemnification by Secured Parties....................
31
Section 5.7.
Collateral Agent's Fee.............................................
31
Section 6. REPRESENTATIONS AND
WARRANTIES....................................................
31
Section 7. AMENDMENT OF THIS
AGREEMENT.......................................................
32
Section 7.1.
Amendments.........................................................
32
Section 7.2.
Waivers............................................................
32
Section 8. APPROVAL BY THE COMPANY AND
GUARANTORS; COMPANY'S OBLIGATIONS ABSOLUTE............ 32
Section 8.1.
General............................................................
32
Section 8.2.
Obligations Absolute...............................................
33
Section 8.3.
No Additional Rights for Company Hereunder.........................
33
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Section 9. COLLATERAL AGENT AS AGENT AND
LENDER.............................................. 33
Section 10. COVENANTS CONCERNING
COLLATERAL...................................................
34
Section 10.1.
Additional Assignments, and Mortgages..............................
34
Section 10.2.
Perfection Certificate.............................................
34
Section 11.
CONDEMNATION......................................................................
35
Section 11.1.
Takings............................................................
35
Section 11.2.
Application of Awards..............................................
35
Section 11.3.
Settlement of Condemnation Claims..................................
36
Section 11.4.
Offered Repayment..................................................
37
Section 11.5.
Applicable Prepayment Provisions...................................
38
Section 11.6.
Waiver of Offered Repayment........................................
38
Section 11.7.
Collateral Agent Expenses..........................................
38
Section 12. APPLICATION OF INSURANCE
PROCEEDS.................................................
39
Section 12.1.
General............................................................
39
Section 12.2.
Offered Repayment..................................................
40
Section 12.3.
Remnant Insurance Proceeds.........................................
41
Section 12.4.
Notice of Casualty; Adjusting Loss ................................
42
Section 12.5.
Reimbursement of Collateral Agent's Expenses.......................
42
Section 13. PROCEEDS FROM SALE OF
ASSETS......................................................
43
Section 13.1.
General............................................................
43
Section 13.2. Net
Proceeds from an Asset Disposition.............................
43
Section 13.3.
Offered Repayment..................................................
43
Section 13.4.
Collateral Agent Expenses..........................................
44
Section 14.
MISCELLANEOUS.....................................................................
45
Section 14.1.
Further Assurances, Etc............................................
45
Section 14.2. No
Individual Action; Marshaling; Etc..............................
45
Section 14.3.
Successors and Assigns.............................................
45
Section
14.4.
Notices............................................................
46
Section 14.5.
Termination; Full Release of Collateral............................
46
Section 14.6.
Partial Release of Collateral......................................
48
Section 14.7.
Applicable Law.....................................................
49
Section 14.8.
Severability.......................................................
50
Section 14.9.
Counterparts.......................................................
50
Section 14.10. Section
Headings..................................................
50
Section 14.11. Complete
Agreement.................................................
50
Section 14.12. Additional
Future Debt.............................................
50
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COLLATERAL AGENCY AND INTERCREDITOR AGREEMENT
This
COLLATERAL AGENCY AND INTERCREDITOR AGREEMENT (as may be amended
from
time to time, this "AGREEMENT"), dated as
of the 20th day of March, 2003, by and
among: (i) U.S. Bank National Association
(in its individual capacity herein
referred to as the "COLLATERAL AGENT BANK"
and in its capacity as collateral
agent herein referred to as the "COLLATERAL
AGENT"), (ii) Bank of America, N.A.,
a national banking association, as an
issuer of BofA Letters of Credit (as
defined below) and a party to certain
Reimbursement Agreements (as defined
below) and the holder of the LaPorte Bonds
and the Mecklenburg Bonds (each as
defined below) (together with its
successors and assigns, "BOFA"), (iii) each of
the holders of Notes (together with their
respective successors and assigns as
holders of Notes) issued pursuant to the
Note Agreements (as defined below) (the
"NOTE HOLDERS"), (iv) The Northern Trust
Company, an Illinois banking
corporation, as party to a Trade Agreement
(as defined below) (together with its
successors and assigns, "NORTHERN"), (v) A.
M. Castle & Co., a Maryland
corporation (together with its successors
and assigns, the "COMPANY"), (vi) each
Guarantor (as defined below) which executes
this Agreement or which from time to
time hereafter executes an instrument
accepting and agreeing to the provisions
of this Agreement, and (vii) any holders of
Additional Future Debt (as defined
below).
PREAMBLE
WHEREAS,
pursuant to a Note Agreement dated as of April 1, 1996 (as
amended from time to time, the "1996 NOTE
AGREEMENT"), among the Company and the
purchasers set forth on Schedule 1 thereto,
the Company issued, and such
purchasers purchased, $20,000,000 aggregate
principal amount of the Company's
6.49% Senior Notes due April 15, 2008 (as
may be amended from time to time,
collectively, the "1996 Notes"); and
WHEREAS,
pursuant to a Note Agreement, dated as of May 15, 1997 (as
amended from time to time, the "1997 NOTE
AGREEMENT"), among the Company and the
purchasers set forth on Schedule 1 thereto,
the Company issued, and such
purchasers purchased, $25,000,000 aggregate
principal amount of the Company's
7.54% Senior Notes due May 30, 2009 (as may
be amended from time to time,
collectively, the "1997 NOTES"), and
WHEREAS,
pursuant to a Note Agreement, dated as of March 1, 1998 (as
amended from time to time, the "1998 NOTE
AGREEMENT", and together with the 1996
Note Agreement and the 1997 Note Agreement,
collectively, the "NOTE
AGREEMENTS"), among the Company and the
purchasers set forth on Schedule 1
thereto, the Company issued, and such
purchasers purchased, (i) $15,000,000
aggregate principal amount of the Company's
6.40% Series A Senior Notes due
March 1, 2008, (ii) $25,000,000 aggregate
principal amount of the Company's
6.53% Series B Senior Notes due March 1,
2010, and (iii) $15,000,000 aggregate
principal amount of the Company's 6.69%
Series C Senior Notes due March 1, 2012
(the Notes described in clauses (i), (ii)
and (iii), as such Notes may be
amended from time to time, collectively,
the "1998 NOTES", and together with the
1996 Notes and the 1997 Notes,
collectively, the "NOTES"), and
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WHEREAS,
each of the Note Agreements has been amended by a separate
First
Amendment and Waiver to Note Agreement,
each dated as of December 1, 1998; and
WHEREAS,
each of the Note Agreements has been further amended pursuant
to
separate Second Amendment to Note
Agreement, each dated as of November 22, 2002,
a Third Amendment to Note Agreements dated
as of December 26, 2002 and a Fourth
Amendment to Note Agreements dated as of
the date hereof (collectively, the "NEW
NOTE AGREEMENT AMENDMENTS"; references
herein to the Note Agreements refer to
the Note Agreements as amended by each
First Amendment and Waiver to Note
Agreement, the New Note Agreement
Amendments and as may be further amended from
time to time); and
WHEREAS,
BofA has issued letters of credit (i) pursuant to which up to a
maximum amount of $611,337 may be drawn at
any one time to secure payments due
in connection with certain State of Ohio,
Industrial Development Refunding
Revenue Bonds (A.M. Castle & Co.
Project) Series 1994 issued to provide
financing to the Company, (ii) pursuant to
which up to a maximum amount of
$1,008,188 may be drawn at any one time to
secure payments due in connection
with certain The Industrial Development
Authority of the City of Kansas City,
Missouri, Industrial Development Refunding
Revenue Bonds (A.M. Castle & Co.
Project) Series 1994 issued to provide
financing to the Company, (iii) pursuant
to which up to a maximum of $672,544 may be
drawn at any one time in connection
with certain Village of Franklin Park
Illinois Industrial Development Refunding
Revenue Bonds (A.M. Castle & Co.
Project) Series 1994 issued to provide
financing to the Company, (iv) pursuant to
which up to a maximum of $194,281 may
be drawn at any one time to secure payments
due in connection with certain
Village of Rosemont, Illinois Industrial
Development Refunding Revenue Bonds
(A.M. Castle & Co. Project) Series 1994
issued to provide financing to the
Company (v) pursuant to which up to a
maximum of $3,762,740 may be drawn at any
one time to secure payments due in
connection with certain City of Hammond,
Indiana Adjustable Rate Economic
Development Revenue Bonds (A.M. Castle & Co.
Project), Series 1994 issued to provide
financing to the Company and (vi)
pursuant to which up to $5,000,000 may be
drawn to secure payments due from
Kreher Steel Company LLC ("KREHER") in
connection with a certain Amended and
Restated Credit Agreement, dated as of
March 8, 2002 (as may be amended or
modified from time to time) between Kreher
and BofA, as Agent (the items
described in clauses (i) - (vi) are herein
collectively referred to as the "BOFA
LETTERS OF CREDIT"); and
WHEREAS,
the Company has entered into (i) that certain Reimbursement
Agreement dated as of June 1, 1994 (the
"JUNE 1994 AGREEMENT") between the
Company and BofA, (ii) that certain
Reimbursement Agreement dated as of November
1, 1994 (the "NOVEMBER 1994 AGREEMENT")
between the Company and BofA, and (iii)
that certain Application and Agreement for
Standby Letter of Credit dated March
5, 2002 between the Company and BofA (the
"MARCH 2002 AGREEMENT", and together
with the June 1994 Agreement and the
November 1994 Agreement, collectively, as
may be amended from time to time, the
"REIMBURSEMENT AGREEMENTS") pursuant to
which BofA issued the BofA Letters of
Credit; and
WHEREAS,
the June 1994 Agreement was amended by an Assignment and
Amendment to Reimbursement Agreement dated
as of June 12, 2001, and the November
1994 Agreement
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was amended by an Assignment and Amendment
to Reimbursement Agreement dated as
of November 1, 2001, and further amended by
a Second Amendment to Reimbursement
Agreement dated November 1, 2001; and
WHEREAS,
the Company and BofA have amended the Reimbursement Agreements
by
separate amendments each dated as of
November 22, 2002 and the Reimbursement
Agreements have been further amended by
separate amendments each dated December
26, 2002 and separate amendments each dated
as of the date hereof (collectively
the "NEW REIMBURSEMENT AGREEMENT
AMENDMENTS"; references herein to the
Reimbursement Agreements refer to the
Reimbursement Agreements as so amended and
as further amended by the New Reimbursement
Agreement Amendments, as applicable,
and as may be further amended from time to
time); and
WHEREAS,
the Company has also entered into (a) that certain Guarantee
Agreement, dated as of November 22, 2002,
of the Company in favor of BofA
pursuant to which the Company guarantees to
BofA (i) the payment by the City of
LaPorte, Indiana (the "KEYSTONE ISSUER") of
all principal, interest and any
other amounts payable by the Keystone
Issuer in respect of the Keystone Issuer's
Economic Development Revenue Bonds, Series
1998 (Keystone Services, Inc.
Project) (the "LAPORTE BONDS"), and (ii)
the payment and performance by Keystone
Service, Inc. of all of its covenants,
agreements, obligations and liabilities
under that certain Loan Agreement, dated as
of April 1, 1998, between the
Keystone Issuer and Keystone Service, Inc.
and (b) that certain Guarantee
Agreement, dated of November 22, 2002, of
the Company in favor of BofA pursuant
to which the Company guarantees the payment
to BofA by The Mecklenburg County
Industrial Facilities and Pollution Control
Financing Authority (the
"MECKLENBURG ISSUER") of all principal,
interest and any other amounts payable
by the Mecklenburg Issuer in respect to the
Mecklenburg Issuer's Tax-Exempt
Industrial Revenue Bonds (A.M. Castle &
Co. Project) Series 1996 (the
"MECKLENBURG BONDS;" the obligations of the
Company under each of said Guarantee
Agreements are herein collectively referred
to as the "IRB BOND GUARANTY
OBLIGATIONS" and each such Guarantee
Agreement is herein referred to as an "IRB
BOND GUARANTY" and collectively as the "IRB
BOND GUARANTEES"); and
WHEREAS,
pursuant to a Trade Acceptance Purchase Agreement, dated as of
August 13, 2001, between the Company and
Northern (the "TRADE AGREEMENT"), the
Company agreed to sell certain trade
acceptances to Northern and Northern agreed
to purchase certain trade acceptances to
generate working capital for the
Company's operations; and
WHEREAS, the Trade Agreement
has been amended by a First Amendment dated
as of April 29, 2002, and a Second
Amendment to Trade Acceptance Purchase
Agreement dated as of June 30, 2002;
and
WHEREAS,
the Company and Northern have further amended the Trade
Agreement
pursuant to a Third Amendment to Trade
Acceptance Purchase Agreement dated as of
November 22, 2002, a Fourth Amendment to
Trade Acceptance Purchase Agreement
dated as of December 26, 2002 and a Fifth
Amendment to Trade Acceptance Purchase
Agreement dated as of the date hereof
(collectively, the "NEW TRADE AGREEMENT
AMENDMENTS"; references herein to the
Trade
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Agreement refer to the Trade Agreement as
so amended and as further amended by
the New Trade Agreement Amendments and as
may be further amended from time to
time); and
WHEREAS,
in connection with (i) the Note Holders entering into the New
Note Agreement Amendments, (ii) BofA
entering into the New Reimbursement
Agreement Amendments, (iii) the issuance of
the IRB Bond Guarantees and (iv)
Northern entering into the New Trade
Agreement Amendments it was provided that,
among other things, (a) the Company and
each of the Guarantors grant a perfected
lien on and security interest in the
Collateral (as hereinafter defined) to the
Collateral Agent, for the pro rata benefit
of (1) the Note Holders, as security
for the Company's obligations under the
Note Agreements and the Notes and the
Guarantors' guarantee thereof, (2) BofA, as
security for the Company's
obligations under the Reimbursement
Agreements and the Guarantors' guarantee
thereof and under the IRB Bond Guaranties
and the Guarantors' guarantee thereof,
(3) Northern, as security for the Company's
obligations under the Trade
Agreement and the Guarantors' guarantee
thereof, and (4) any holders of
Additional Future Debt; and
WHEREAS,
the Guarantors have executed and delivered guaranties of the
Secured Obligations (as hereinafter
defined); and each of the Company and the
Guarantors has entered into certain
security agreements and related documents
pursuant to which the Company or such
Guarantor (as the case may be) has granted
to the Collateral Agent, for the benefit of
Northern, the Note Holders, BofA and
any holders of Additional Future Debt, a
security interest in and Lien upon the
Collateral (as hereinafter defined).
NOW,
THEREFORE, in consideration of the foregoing premises and for
other
good and valuable consideration, the
receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as
follows:
SECTION 1. DEFINITIONS.
SECTION 1.1. DEFINITIONS. The following terms shall have the
meanings set forth in this Section 1 or
elsewhere in the provisions of this
Agreement referred to below:
Acceptable Revolving Credit Facility. Shall mean a loan agreement
or
similar facility pursuant to which a lender
or lenders provides revolving loans
to the Company or any Subsidiary for the
primary purpose of financing such
Person's ongoing business operations so
long as such agreement or facility (a)
is not secured by Liens on the property of
the Company or any Subsidiary and (b)
provides for interest rates, fees and other
pricing terms similar to those
generally available to borrowers whose
unsecured long term debt is rated
Investment Grade.
Account Collateral. Shall have the meaning ascribed to it in Annex
X
to each of the documents referred to in
clauses (i) and (ii) of the definition
of GECC Securitization Documents (in effect
on the date hereof).
Action. See Section 2.2(a).
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Actionable Default. Shall mean any Actionable Payment Default
and
any other Event of Default which permits
any one or more holders of Secured
Obligations to accelerate the maturity of
the Secured Obligations held by it.
Actionable Payment Default. Shall mean any failure of the Company
or
any Guarantor to pay any of the Secured
Obligations as and when due and payable
in accordance with the terms of any Note
Document, any Reimbursement Agreement,
any IRB Bond Guaranty, the Trade Agreement,
any Additional Future Debt Document
or Security Document, whether by
acceleration (including automatic acceleration
upon the commencement of a bankruptcy case)
or otherwise and the expiration of
ninety (90) days after such failure
(collectively, a "PAYMENT DEFAULT"), or the
commencement of any bankruptcy, insolvency,
reorganization or other similar case
or proceeding by or against the Company or
any Guarantor, or the making by the
Company or any Guarantor of an assignment
for the benefit of its creditors.
Additional Future Debt. Shall mean (a) any increase in the
principal
amount of the Principal Obligations
incurred after the date hereof in compliance
with the terms of the Credit Documents and
this Agreement and/or (b) any
additional indebtedness of the Company, in
each case, incurred after the date
hereof in compliance with the terms of the
Credit Documents and this Agreement
so long as, in each such case, the holder
of such additional indebtedness shall
have executed and delivered to the
Collateral Agent and each of the holders of
the Secured Obligations a Joinder Agreement
in the form of Exhibit A attached
hereto.
Additional Future Debt Documents. Shall mean documents,
instruments
and agreements relating to Additional
Future Debt as the same may be amended,
renewed, extended, restated, supplemented
or otherwise modified from time to
time.
Affiliate. Shall mean as to any Person, a Person controlling,
controlled by, or under common control with
such Person.
Agreement. As defined in the introductory paragraph hereto.
Approved Asset Disposition. Shall mean an Asset Disposition the
terms of which have been approved in
writing by the Requisite Parties so long as
the Collateral Agent shall have received
written direction from the Requisite
Holders of such approval.
A/R Intercreditor Agreement. Shall mean that certain
Intercreditor
Agreement, of even date herewith, among the
Collateral Agent, GECC, as purchaser
and administrative agent, the Company,
Total Plastics, Inc., Oliver Steel Plate
Co., Keystone Tube Company LLC, Castle
SPED, LLC, Castle IND MGR, Inc., the Note
Holders, BofA and Northern in the form
attached hereto as Exhibit B.
Asset Disposition. Shall mean any Transfer so long as
immediately
before and immediately after the
consummation of any such Transfer and after
giving effect thereto, no Default or Event
of Default exists.
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Asset Disposition Certificate. Shall mean with respect to any
proposed Asset Disposition a certificate
executed by a Senior Officer which (a)
states that no Default or Event of Default
then exists or will exist upon the
consummation of such Asset Disposition and
such Asset Disposition is permitted
by the terms of each of the Loan Documents,
(b) describes such Asset
Disposition, (c) sets forth (i) estimated
Net Proceeds to be received by the
Obligors upon consummation of such Asset
Disposition and (ii) net book value of
the Asset Disposition Collateral in respect
of such Asset Disposition together
with the aggregate net book value of all
Asset Disposition Collateral in respect
of all Asset Dispositions completed in the
then current calendar year.
Asset Disposition Collateral. Shall mean any Collateral to be
Transferred in connection with an Asset
Disposition.
BofA. As defined in the introductory paragraph hereto.
BofA Debt. Shall mean the Reimbursement Agreement Debt and the
IRB
Bond Guaranty Obligations.
BofA Letters of Credit. As defined in the Preamble hereto.
Bankruptcy Code. Shall mean the Bankruptcy Code of 1978, as
amended,
or any successor statute.
Bankruptcy Event. Shall mean and include:
(a) the pendency of any case against the Company or any
Guarantor
arising
under the Bankruptcy Code;
(b) the pendency of any case against the Company or any
Guarantor
arising
under any other bankruptcy, reorganization, compromise,
arrangement, insolvency, readjustment of debt, dissolution,
liquidation or
other
similar law of any jurisdiction;
(c) the appointment of, or taking possession by, a trustee,
receiver,
custodian, liquidator or similar official of the Company or any
Guarantor
or any substantial assets of any of them;
(d) any assignment for the benefit of creditors of the Company
or
any
Guarantor; and
(e) the failure of the Company or any Guarantor generally to pay
its
debts as
they become due.
Business Day. Shall mean any day, other than Saturday, Sunday or
a
legal holiday or any other day on which
banking institutions in Chicago,
Illinois and St. Paul, Minnesota generally
are authorized by law to close.
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Collateral. Shall mean any of the properties and assets of
whatever
nature, tangible or intangible, now owned
or existing or hereafter acquired or
arising, of the Company or any of the
Guarantors in which at the time of
reference a Lien has been granted or has
purportedly been granted to the
Collateral Agent to secure the Secured
Obligations and which has not been
released pursuant to the terms hereof or of
the A/R Intercreditor Agreement, and
all other cash provided to be the subject
of a Lien to secure any of the Secured
Obligations as contemplated by any Security
Document, and any property and
assets paid or payable to the Collateral
Agent under any of the Guaranties or
any subordination agreement, in each case
other than Excluded Collateral.
Collateral Agent. As defined in the introductory paragraph
hereto
unless and until a successor Collateral
Agent shall have been appointed pursuant
to Section 5.4 hereof, and thereafter
"Collateral Agent" shall mean such
successor Collateral Agent.
Collateral Agent Bank. As defined in the introductory paragraph
hereto and any successor bank, in its
individual capacity, serving as a
successor Collateral Agent pursuant to
Section 5.4.
Company. As defined in the introductory paragraph hereto.
Credit Documents. Shall mean, collectively, the Note Documents,
the
Reimbursement Agreements, the IRB Bond
Guaranties, the Trade Agreement, any
Additional Future Debt Documents and the
Security Documents.
Default. Shall mean any event or condition which, with the giving
of
notice or the lapse of time, or both, would
become an Event of Default.
Demand Notice. See Section 4.4(a).
Disposition. See Section 4.1(b).
Distribution Amount. See Section 4.1(c)(i).
Enforcement Notice. Shall mean written notice given by the
Requisite
Parties or Special Requisite Parties, as
the case may be, to the Collateral
Agent (a) stating that a Notice of
Actionable Default has theretofore been given
by such Requisite Parties or Special
Requisite Parties, as the case may be, to
the Collateral Agent and that the
Actionable Default specified in such Notice of
Actionable Default continued to exist
uncured for the applicable period
described in Section 4.5, and (b) setting
forth instructions from such Requisite
Parties or Special Requisite Parties, as
the case may be, to the Collateral
Agent to exercise all or any such rights,
powers and remedies as are available
under the Security Documents and making
such additional statements as may be
called for under Section 4.5.
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Event of Default. Shall mean any "Event of Default" under and
as
defined in the Trade Agreement, any "Event
of Default" under and as defined in
any of the Note Agreements, any "Event of
Default" under and as defined in any
of the Reimbursement Agreements or the IRB
Bond Guaranties, or any similar event
or condition giving rise to the right of a
holder or holders of Additional
Future Debt to accelerate or which results
in the acceleration of the maturity
of such Additional Future Debt.
Notwithstanding anything to the contrary set
forth in any Credit Document, each Secured
Party hereby agrees that any default
by the Company or any Guarantor in the
performance or observance of any covenant
or provisions of this Agreement or any
Security Document shall not constitute an
"Event of Default" under such Credit
Document unless such default shall continue
for more than thirty (30) days after the
first date on which a Senior Officer of
the Company becomes aware of such
default.
Excluded Collateral. Shall mean (a) any property (whether
currently
existing or subsequently acquired) subject
to a Permitted First Priority Lien,
to the extent the agreement creating such
Lien prohibits additional Liens on
such property; (b) cash sufficient to
secure the Company's (or any of its
Subsidiaries') obligations to pay its
workmen's compensation benefits, including
obligations to any Person providing surety,
insurance, letters of credit or
other credit support so long as such cash
does not secure any other obligation
for any other purpose; (c) all property
purchased with proceeds of the note
issued pursuant to the Loan Agreement dated
as of November 1, 1994 between the
Company and the City of Hammond, Indiana;
(d) all properties and assets of A. M.
Castle & Co. (Canada), Inc., and any
successor holder of such assets; (e) other
property with a deminumus fair market value
that, individually or in the
aggregate with all other such property, is
not material to the continued
business operations of the Company or any
Subsidiary which owns such property;
(f) any leasehold interest in any real
property leased by the Company or any
Subsidiary the termination of which would
not result in a Material Adverse
Effect; (g) the Excluded Receivables; (h)
Excluded GECC Collateral; (i) all
shares of capital stock (or other similar
equity or ownership interests) in a
Person (other than the Company or any
wholly-owned Subsidiary of the Company)
where the assignment, transfer or
hypothecation thereof, for collateral
purposes, is prohibited or restricted by
the terms and conditions of its
constitutive (or similar formation related)
documents, any agreements or
arrangements with the holders of its
capital stock, (or other similar equity or
ownership interests) or any other similar
agreements, and, as a result of any
such assignment, transfer or hypothecation
by any Obligor, such Obligor would be
deprived of any material right or otherwise
suffer any material adverse affect
in respect of such capital stock, other
interests or otherwise under such
documents, agreements or arrangements; (j)
the capital stock or other ownership
or equity interests in Castle IND MGR, Inc.
(so long as its only asset is its
interest in Castle SPFD, LLC); (k) any
interest of Castle IND MGR, Inc. in
Castle SPFD, LLC, and (l) all Property of a
Person existing at the time such
Person becomes a Subsidiary of the Company
to the extent that any agreement or
arrangement (the amount of all obligations
which are created or evidenced by, or
the subject of, such agreements or
arrangements are herein referred to as
"Future Negative Pledge Obligations") to
which such Person is a party or by
which such Person is bound prohibits or
restricts Liens on such Property so long
as such agreement or arrangement was not
entered into in contemplation of such
Person becoming a Subsidiary and the
existence of the Lien of the Collateral
Agent would result in such Subsidiary being
deprived of any material right or
otherwise suffering any material adverse
effect with respect to such Property or
otherwise under any such agreement or
<PAGE>
-9-
arrangement so long as the aggregate amount
of all Future Negative Pledge
Obligations and the aggregate amount of
obligations secured by Future Acquired
Liens does not exceed 10% of Adjusted
Consolidated Net Worth (as such term is
defined in the Note Documents as in effect
on the date hereof).
Excluded GECC Collateral. Shall mean the Receivables Assets (as
such
term is defined in the A/R Intercreditor
Agreement).
Excluded Insurance Proceeds. Shall mean any proceeds of
insurance
directly relating to a claim for, or a loss
arising from, (a) business
interruption insurance so long as all such
proceeds are used by the Obligors to
maintain the business operations whose
interruption was the subject of the claim
giving rise to such proceeds and (b) the
damage, destruction or loss of
inventory so long as such proceeds are used
by the Obligors for working capital
or to replace the inventory whose damage,
destruction or loss was the subject of
the claim giving use to such proceeds.
Excluded Receivables. Shall mean, at any time, outstanding
Receivables and Related Security arising
out of the ordinary course of business
of the Company or its Subsidiaries which
shall have been sold to generate funds
for working capital purposes pursuant to
the provisions of one or more
Receivables Purchase Agreements which makes
funds available to the Company or
any Subsidiary in an aggregate amount, for
all Receivables Purchase Agreements,
not exceeding $65,000,000 at any time and
covering Receivables not exceeding, in
the aggregate, $90,000,000 at any time.
Existing First Priority Liens. Shall mean Liens securing
obligations
existing on the date of this Agreement as
such liens and obligations are
disclosed in one or more lender's title
insurance policies delivered to each of
the Secured Parties on the date hereof or
in Schedule 1.1 to this Agreement.
Future Acquired Liens. Shall mean Liens on Property of a Person
which shall have become a Subsidiary after
the date of this Agreement so long as
(a) each such Lien existed on the date such
Person became a Subsidiary and such
Lien was not created in contemplation of
such Person becoming a Subsidiary and
(b) the aggregate amount of obligations
secured by all such Liens, together with
the aggregate amount of all Future Negative
Pledge Obligations, does not exceed
10% of Adjusted Consolidated Net Worth (as
such term is defined in the Note
Agreements as in effect on the date
hereof).
Future Negative Pledge Obligations. See definition of "Excluded
Collateral" in this Section 1.1.
GECC. Shall mean General Electric Capital Corporation, and its
successors and assigns.
GECC Securitization Documents. Shall mean, collectively, (a)
the
Receivables Sale and Contribution Agreement
dated as of December 26, 2002 by and
among the Company,
<PAGE>
-10-
Total Plastics, Inc., Oliver Steel Plate
Co. and Keystone Tube Company, LLC,
each as an originator, and Castle SPFD, LLC
as buyer, (b) the Receivables
Purchase and Servicing Agreement dated as
of December 26, 2002 by and among
Castle SPFD, LLC, as seller, the Company,
as master servicer, Total Plastics,
Inc. and Oliver Steel Plate Co., each as a
servicer, Castle IND MGR, Inc., as
independent member, and GECC as purchaser
and as administrative agent and (iii)
all other Related Documents (as defined in
Annex X to each of the documents
referred to in clause (i) and clause (ii)
above).
Guaranties. See definition of "Guarantors" in this Section 1.1.
Guarantors. Shall mean each of Datamet, Inc., an Illinois
corporation, Keystone Tube Company, LLC, a
Delaware limited liability company,
Total Plastics, Inc., a Michigan
corporation, Paramont Machine Company, LLC, a
Delaware limited liability company,
Advanced Fabricating Technology, LLC, a
Delaware limited liability company, Oliver
Steel Plate Co., a Delaware
corporation, and Metal Mart, LLC, a
Delaware limited liability company, and any
other party that may from time to time
hereafter execute and deliver a guaranty
for the benefit of any one or more of the
Secured Parties guarantying the
Secured Obligations (collectively, the
"GUARANTIES").
Indemnified Liabilities. See Section 5.5(b)
Indemnified Parties. See Section 5.5(b)
Insured. See Section 12.1(a)(i).
Investment Grade. Shall mean in respect of any obligation that
such
obligation (i) has a rating of Baa3 or
better by Moody's Investor Service or a
rating BBB-or better by Standard &
Poor's; or (ii) has a rating of NAIC 1 or
NAIC 2 from the National Association of
Insurance Commissioners; or (iii) in the
judgment of the Majority Secured Parties
has a credit quality equal to or better
than one which would be afforded either of
the ratings described in clause (i)
or clause (ii) of this definition.
IRB Bond Guaranty. As defined in the Preamble hereto.
IRB Bond Guaranty Obligations. As defined in the Preamble
hereto.
Notwithstanding the foregoing, IRB Bond
Guaranty Obligations shall not include
any obligations in respect of the principal
amount of the LaPorte Bonds in
excess of $4,300,000 or in respect of the
principal amount of the Mecklenburg
Bonds in excess of $1,500,000.
Joinder Agreement. Attached as Exhibit A hereto.
June 1994 Agreement. As defined in the Preamble hereto.
Kreher. As defined in the Preamble hereto.
<PAGE>
-11-
LaPorte Bonds. As defined in the Preamble hereto.
LC Amendments. As defined in the Preamble hereto.
Lien. Shall mean
any mortgage, security deed, deed of trust, pledge,
lien, security interest or other
encumbrance, whether now existing or hereafter
created, acquired or arising, and whether
voluntary or involuntary, to secure
payment of a debt or performance of an
obligation.
Loan Documents. Shall mean the Credit Documents (other than the
Security Documents).
Majority Secured Parties. Shall mean a group of holders of
Secured
Obligations which includes each of (a)
holders of at least 51% of the Note
Principal Obligations, (b) the holders of
at least 51% in principal amount
(including contingent reimbursement
obligations) of BofA Debt, (c) the holders
of at least 51% in principal amount of the
Trade Agreement Debt and (d) the
holders of at least 51% in principal amount
of Additional Future Debt, if any.
Make-Whole Amount. Shall mean with respect to any of the Note
Agreements and the Note
Debt owed thereunder, the "Make-Whole Amount" as defined in
such
Note Agreement on the date hereof.
March 2002 Agreement. As defined in the Preamble hereto.
Material Adverse Effect. Shall mean a material adverse effect on
(a)
the business, assets, properties, profits,
prospects, operations or condition,
financial or otherwise, of the Company and
its Subsidiaries, on a consolidated
basis or (b) the ability of the Company to
perform its obligations under any of
the Credit Documents, or (c) the ability of
any of the holders of the Secured
Obligations to enforce the Company's
obligations under any of the Credit
Documents.
Material Provisions. Shall mean, in respect of any Security
Documents, any provision which describes
the nature of the Secured Obligations
secured thereby or establishes that all
Secured Obligations are pari passu with
respect to the Lien created by such
Security Document.
Mecklenburg Bonds. As defined in the Preamble hereto.
Mortgage. Shall mean any mortgage or deed of trust, whether now
existing or hereafter created, encumbering
any of the Mortgaged Property.
Mortgaged Property. Shall mean any Significant Real Estate
Interest,
now owned or hereafter acquired, of the
Company or any of the Guarantors with
respect to which at the time of reference a
mortgage or deed of trust has been
granted or has purportedly been granted to
the Collateral Agent to secure the
Secured Obligations and which has not been
released pursuant to the terms
hereof.
<PAGE>
-12-
Mortgagor. Shall mean the Company or any of the Guarantors who
has
granted to the Collateral Agent for the
benefit of the Secured Parties a
Mortgage on any Mortgaged Property.
Net Proceeds. Shall mean, with respect to any Taking, damage,
destruction or loss of Collateral or any
Asset Disposition (each, a "Payment
Event"), the cash payments (including any
cash received by way of deferred
payment pursuant to, or by monetization of,
a note receivable or otherwise, but
only as and when so received) received by
one or more Obligors or the Collateral
Agent as a result of such Payment Event, in
each case, net of (a) any bona fide
direct out of pocket costs and expenses
incurred in connection with such Payment
Event, (b) payments made by any such
Obligor to retire or repay indebtedness
(other than the Secured Obligations) where
payment of such indebtedness is
secured by Permitted First Priority Liens
on the Property which is the subject
of such Payment Event and such indebtedness
shall have become due or payable as
a result of such Payment Event and (c) so
long as no Default or Event of Default
shall have occurred and be continuing,
amounts required to be paid to any Person
(other than the Company of any wholly-owned
Subsidiary of the Company) owning a
beneficial interest in any Property which
is the subject of such Payment Event.
New Note Agreement Amendments. As defined in the Preamble
hereto.
1996 Note Agreement. As defined in the Preamble hereto.
1997 Note Agreement. As defined in the Preamble hereto.
1998 Note Agreement. As defined in the Preamble hereto.
1996 Notes. As defined in the Preamble hereto.
1997 Notes. As defined in the Preamble hereto.
1998 Notes. As defined in the Preamble hereto.
Northern. As defined in the introductory paragraph hereto.
Note Agreements. As defined in the Preamble hereto.
Note Debt. Shall mean all indebtedness, obligations and
liabilities
of any of the Company and the Guarantors to
or for the benefit of any Note
Holder arising or incurred under the Note
Agreements (including, without
limitation, Make-Whole Amounts), the Notes
or the Guaranties related thereto,
existing on the date of this Agreement or
arising hereafter, direct or indirect,
joint or several, absolute or contingent,
matured or unmatured, arising by
contract, operation of law or otherwise.
Notwithstanding the foregoing, Note
Debt shall not include Note Principal
Obligations to the extent that such Note
Principal Obligations exceed $96,250,000
plus the principal amount of any
Additional Future Debt incurred under the
Note Documents.
<PAGE>
-13-
Note Documents. Shall mean the Notes and the Note Agreements.
Note Holders. As defined in the introductory paragraph hereto,
together with their respective successors
and assigns.
Note Principal Obligations. Shall mean at the time of reference
thereto, the principal amount then
outstanding under the Notes or any
instruments or agreements issued or entered
into in compliance with the terms of
this Agreement and the Credit
Documents.
Notes. Shall mean the Notes, as such term is defined in the
Preamble
hereto, together with any promissory notes
or other evidences of indebtedness
issued in exchange for, replacement of or
substitution for any Notes under any
of the Note Agreements.
Notice of Actionable Default. A notice by (i) the Requisite
Parties
delivered to the Collateral Agent, stating
that an Actionable Default has
occurred and is continuing or (ii) the
Special Requisite Parties delivered to
the Collateral Agent stating that an
Actionable Payment Default has occurred and
is continuing.
November 1994 Agreement. As defined in the Preamble hereto.
Obligors. Shall mean collectively, the Company and each of the
Guarantors.
Offered Repayment. Shall mean a written offer made by any of
the
Obligors to each of the holders of Secured
Obligations to use the Net Proceeds
in respect of any Taking under Section
11, or damage,
destruction or loss under
Section 12, or Asset Disposition under
Section 13 to ratably prepay (based on
the aggregate unpaid principal amount
(including contingent reimbursement
obligations)) the Secured Obligations
outstanding at the time of any such
Offered Repayment, any accrued and unpaid
interest thereon and, in the case of
any Asset Disposition as contemplated by
Section 13, Make Whole Amount and other
prepayment or breakage fees) in an
aggregate amount equal to such Net Proceeds
as the case may be;
in each
case, such Offered Repayment shall be net of all reasonable
costs
incurred by the Collateral Agent in
connection with the obtaining or collecting
of such proceeds, including, without
limitation, reasonable attorney's fees.
Payment Default. See Section 1.1 (in the definition of
Actionable
Payment Default).
Permitted First Priority Lien. Shall mean (a) Existing First
Priority Liens (b) Future Acquired Liens
and (c) the Liens described in (and
permitted by) each of (i) clause (a) and
clause (h) of Section 7.4 of each of
the Note Agreements (as in effect
immediately after giving effect to the New
Note Agreement Amendments), (ii) clause (i)
and clause (viii) of Section 6.12 of
the Trade Agreement (immediately after
giving effect to the New Trade Agreement
Amendments), (iii) clause (i) and clause
(viii) of Section 5.02(d) of each of
the Reimbursement Agreements (immediately
after giving effect to the New
Reimbursement Agreement Amendments) and
(iv) similar clauses in any Additional
Future Debt Documents.
<PAGE>
-14-
Permitted Investments. Shall mean
(a) investments in certificates of deposit (and equivalent
investments, including, without limitation, overnight federal
reserve fund
deposits)
issued by any bank, trust company or national association that
is acting
as Collateral Agent hereunder and having a maturity of 365 days
or
less;
(b) investments in commercial paper rated on the date of
acquisition
thereof
"A-1"(or higher) by Standard & Poor's or "P-1" (or higher)
by
Moody's
(or any future comparable ratings issued by Standard & Poor's
or
Moody's),
provided that such obligations mature within 270 days of the
date of
acquisition thereof;
(c) investments in obligations of the United States of America,
provided
that such obligations mature within 365 days of the date of
acquisition thereof;
(d) investments in "money market" funds limited to obligations
of
the type
defined in clauses (a), (b) and (c) above.
Person. Shall mean any individual, corporation, partnership,
limited
liability company, trust, unincorporated
association, business or other legal
entity, and any government or any
governmental agency or political subdivision
thereof.
Principal Obligations. Shall mean Note Principal Obligations in
an
amount not to exceed $96,250,000
Reimbursement Agreement Debt in an amount not
to exceed $17,049,090 and Trade Agreement
Debt in an amount not to exceed
$8,000,000, and the outstanding principal
amount of all Additional Future Debt.
Proceeds Deposit. Shall mean amounts distributed to the
Collateral
Agent pursuant to Sections 11.5, 12.2 and
13.2 to be held as cash
collateral for the benefit of BofA pursuant
to the provisions of
Section 4.1(c)(ii).
Property. Shall mean,
unless otherwise specifically limited, real or
personal property of any kind, tangible or
intangible, choate or inchoate.
Real Estate Facility. Shall mean any real property owned by any
Obligor, including any land, buildings and
other improvements thereon.
Receivable. Shall mean a payment owing to a Person (whether
constituting an account, chattel paper,
document, instrument, letter-of-credit
right, letter of credit, investment
property or general intangible) arising from
the provision of merchandise, goods or
services by such Person, including the
right to payment of any interest or finance
charges and other obligations owing
to such Person with respect thereto.
<PAGE>
-15-
Receivables Purchase Agreements. Shall mean an agreement or
agreements pursuant to which any one or
more of the Company or any Subsidiary
sells its accounts receivable as a means of
providing it working capital for its
business operations, including, without
limitation, any one or more of the GECC
Securitization Documents.
Reimbursement Agreements. As defined in the Preamble hereto.
Reimbursement Agreement Debt. Shall mean all indebtedness,
obligations and liabilities of any of the
Company and the Guarantors to or for
the benefit of BofA arising or incurred
under the Reimbursement Agreements or
the Guaranties, existing on the date of
this Agreement or arising hereafter,
direct or indirect, joint or several,
absolute or contingent, matured or
unmatured, arising by contract, operation
of law or otherwise. Notwithstanding
the foregoing, Reimbursement Agreement Debt
shall not include any reimbursement
obligations in respect of drawings under
the BofA Letters of Credit in excess of
$17,049,090 (plus the amount of any
applicable fees and costs payable to BofA
under the Reimbursement Agreements) in the
aggregate, at any time outstanding
plus the principal amount of any Additional
Future Debt which is the subject of
such reimbursement obligations.
Related Security. Shall mean with respect to any Receivable: (a)
all
supporting obligations, security interests
or Liens and property subject thereto
from time to time securing or purporting to
secure the payment of such
Receivable by the Person obligated thereon,
(b) all guaranties, indemnities and
warranties, insurance policies, financing
statements and other agreements or
arrangements of whatever character from
time to time supporting or securing
payment of such Receivable, (c) all right,
title and interest of the Company or
any Subsidiary in and to any goods
(including returned, repossessed, foreclosed
goods or Scrapped Goods) the sale of which
gave rise to such Receivable;
provided, that Related Security will
exclude returned goods to the extent that
all amounts required to be paid pursuant to
the transactions involving the
transfer of such Receivable in respect of
such goods have been paid, (d) all
collections with respect to any of the
foregoing or the Account Collateral, (e)
all records with respect to any of the
foregoing, and (f) all proceeds of such
Receivable or with respect to any of the
foregoing.
Requisite Parties. Shall mean as of any date the holders of at
least
51% in aggregate outstanding principal
amount of all BofA Debt (including
Undrawn LC/Guaranty Exposure), Note Debt,
Trade Agreement Debt and Additional
Future Debt on such date.
Responsible Officer. Shall mean with respect to the Collateral
Agent, an officer in its Corporate Trust
Services Department (or similar
department) of the Collateral Agent
Bank.
Scrapped Goods. Goods, the sale of which gave rise to a
Receivable,
which are rejected by the applicable
obligor on such Receivable for any reason
but which are scrapped rather than being
returned to the seller of such goods or
any of its Affiliates.
Secured Obligations. Shall mean collectively, (a) the Note Debt,
(b)
the Reimbursement Agreement Debt, (c) the
Trade Agreement Debt, (d) the IRB Bond
Guaranty
<PAGE>
-16-
Obligations, (e) any Additional Future Debt
and (e) all indebtedness,
obligations and liability of the Company or
any Guarantor to the Collateral
Agent under any Security Document.
Secured Parties. Shall mean each of the holders of Note Debt,
Reimbursement Agreement Debt, Trade Debt
and Additional Future Debt.
Security Documents. Shall mean any and all instruments or
agreements
pursuant to which a Lien is created or
arises in favor of the Collateral Agent
or any other Secured Party to secure any of
the Secured Obligations.
Senior Officer. Means the chief executive officer, chief
financial
officer, principal accounting officer,
treasurer or controller of the Company.
Significant Real Estate Interest. Shall mean each Real Estate
Facility (other than any Excluded
Collateral).
Significant Subsidiary. As defined in the Note Agreements (as
in
effect immediately after giving effect to
the New Note Agreement Amendments).
Special Cash Collateral Account. See Section 4.1(c).
Special Requisite Parties. Shall mean as of any date the holders
of
at least 25% in aggregate outstanding
principal amount of all BofA Debt
(including Undrawn LC/Guaranty Exposure),
Note Debt, Trade Agreement Debt and
Additional Future Debt on such date.
Stock Pledge Agreement. Shall mean one or more instruments or
agreements executed and delivered to the
Collateral Agent in connection with the
execution and delivery of this Agreement
which purports to pledge and grant a
security interest to the Collateral Agent
in shares of capital stock or other
equity interest of any Subsidiary or other
Person that are certificated or
otherwise physically evidenced.
Subsidiary. As defined in the Note Agreements (as in effect on
the
date hereof).
Taking. See Section 11.1.
Trade Agreement. As defined in the Preamble hereto.
Trade Agreement Debt. Shall mean all indebtedness, obligations
and
liabilities of any of the Company and
Guarantors to or for the benefit of
Northern arising or incurred under the
Trade Agreement (including any prepayment
premium) or the Guaranties related thereto,
existing on the date of this
Agreement or arising hereafter, direct or
indirect, joint or several, absolute
or contingent, matured or unmatured,
arising by contract, operation of law or
otherwise. Notwithstanding the foregoing,
Trade Agreement Debt shall not include
any obligations in excess of $8,000,000
(plus the amount of any applicable fees
and costs payable to Northern
<PAGE>
-17-
under the Trade Agreement) plus the amount
of any Additional Future Debt
incurred under the Trade Agreement.
Transfer. Shall mean any sale or other disposition of assets
(including, without limitation, stock of
Subsidiaries) constituting Collateral
in accordance with the terms of the Note
Documents, the Trade Agreement, the
Reimbursement Agreements or any Additional
Future Debt Documents.
Undrawn LC/Guaranty Exposure. Shall mean the aggregate undrawn
face
amount of the outstanding BofA Letters of
Credit and outstanding contingent
liability under the IRB Bond
Guaranties.
SECTION 1.2. TERMS GENERALLY. The definitions in Section 1.1
shall
apply (except as otherwise specified)
equally to both the singular and plural
forms of the terms defined. Whenever the
context may require, any pronoun shall
include the corresponding masculine,
feminine and neuter forms. The words
"include", "includes" and "including" shall
be deemed to be followed by the
phrase "without limitation". All references
herein to Sections shall be deemed
references to Sections of this Agreement
unless the context shall otherwise
require.
SECTION 2. RECOURSE OF SECURED PARTIES; OTHER COLLATERAL; ACTION
BY
SECURED PARTIES.
SECTION 2.1. RECOURSE OF SECURED PARTIES; OTHER COLLATERAL.
(a) Each of the Secured Parties acknowledges and agrees that (i)
it
shall only have recourse to the Collateral
through the Collateral Agent and that
it shall have no independent recourse to
the Collateral and (ii) the Collateral
Agent shall have no obligation to, and
shall not (except as otherwise
specifically provided herein) take, any
action hereunder or under any Security
Document to which it is a party, except
upon instructions from the Requisite
Parties or the Special Requisite Parties,
as the case may be, in accordance with
Section 2.2 hereof.
(b) Nothing contained herein shall restrict (i) the rights of
any
Secured Party (other than the Collateral
Agent) to pursue remedies, by
proceedings in law and equity, to collect
any of the Secured Obligations or to
enforce the performance of and provisions
of any of the Secured Obligations, to
the extent in either case that such
remedies do not relate to the Collateral or
interfere with the Collateral Agent's
ability to take action hereunder or under
any Security Document or (ii) the rights of
any Secured Party (other than the
Collateral Agent) to initiate an action or
actions in any bankruptcy,
reorganization, compromise, arrangement,
insolvency, readjustment of debt,
dissolution or liquidation or similar
proceeding in its individual capacity and
to appear or be heard on any matter before
the bankruptcy or other applicable
court in any such proceeding, including,
without limitation, with respect to any
question concerning the post-petition usage
of Collateral and post-petition
financing arrangements.
(c) Neither the Collateral Agent nor any other Secured Party
shall
contest the validity, perfection, priority
or enforceability of or seek to avoid
any Lien securing any Secured Obligation,
and each party hereby agrees to
cooperate in the defense of any action
contesting the
<PAGE>
-18-
validity, perfection, priority or
enforceability of such Liens. Except as
expressly provided in this Agreement with
respect to distributions of
Collateral or proceeds by the Collateral
Agent to the Secured Parties, no
Secured Party shall have the right to
obtain any of the Collateral for its sole
account or the benefit for its sole account
of any Lien securing any of the
Secured Obligations. No Secured Party may
seek, and each Secured Party hereby
waives, any right ot require any of the
Collateral to be partitioned.
SECTION 2.2. ACTION BY SECURED PARTIES.
(a) Any request, demand, authorization, direction, notice,
consent,
waiver or other action permitted or
required by this Agreement to be given or
taken by the Requisite Parties, the Special
Requisite Parties or the Majority
Secured Parties, as the case may be, shall
be embodied in and evidenced by one
or more instruments and signed by or on
behalf of such Requisite Parties, such
Special Requisite Parties or such Majority
Secured Parties, as the case may be,
and, except as otherwise expressly provided
in any such instrument to be
effective at a later date, any such action
shall become effective when such
instrument or instruments shall have been
received by the Collateral Agent. The
instrument or instruments evidencing any
action (and the action embodied therein
and evidenced thereby) are sometimes
referred to herein as an "ACTION" of the
Persons signing such instrument or
instruments.
(b) The Collateral Agent shall be entitled to rely absolutely
upon
an Action of the Requisite Parties, the
Special Requisite Parties or the
Majority Secured Parties, as the case may
be, if such Action purports to be
taken by or on behalf of such Requisite
Parties, such Special Requisite Parties
or such Majority Secured Parties, as the
case may be, and nothing in this
Section 2.2 or elsewhere in this Agreement
shall be construed to require the
Collateral Agent to demonstrate that such
Requisite Parties, such Special
Requisite Parties or such Majority Secured
Parties, as the case may be, have
been authorized by the Note Holders,
Northern, BofA and/or the holders of
Additional Future Debt, as applicable, to
take any action which they purport to
be taking, the Collateral Agent being
entitled to rely conclusively, and being
fully protected in so relying, on any
Action of the Note Holders, Northern, BofA
and/or the holders of Additional Future
Debt, as the case may be.
SECTION 3. DUTIES OF COLLATERAL AGENT.
SECTION 3.1. NOTICES TO THE SECURED PARTIES. The Collateral
Agent shall use commercially reasonable
efforts to, within five (5) Business
Days following receipt thereof, furnish to
each of the Note Holders, Northern,
BofA and the holders of Additional Future
Debt:
(a) a copy of each Notice of Actionable Default, Demand Notice
or
Enforcement Notice received by the
Collateral Agent;
(b) a copy of each certificate received by the Collateral Agent
rescinding or withdrawing a Notice of
Actionable Default, Demand Notice or
Enforcement Notice;
(c) written notice of any release or subordination of rights by
the
Collateral Agent of any Collateral; and
<PAGE>
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(d) a copy of any notice or other communication given or received
by
the Collateral Agent under any Security
Document.
The
Collateral Agent shall not be required to furnish any of the
foregoing
of the items to any Person to the extent
the specific terms of this Agreement
require another party to this Agreement to
furnish such item to such Person.
Any Notice
of Actionable Default, Demand Notice or Enforcement Notice
shall be deemed to have been given when
actually received by a Responsible
Officer of the Collateral Agent and,
subject to Section 4.5(c), to have been
rescinded or withdrawn when a Responsible
Officer of the Collateral Agent has
actually received from the notifying party
a notice rescinding or withdrawing
such Notice of Actionable Default, Demand
Notice or Enforcement Notice. Any
Notice of Actionable Default, Demand Notice
or Enforcement Notice shall be
deemed to be outstanding at all times after
such notice has been given until
such time, if any, as such notice has been
rescinded or withdrawn.
SECTION 3.2. ACTIONS UNDER SECURITY DOCUMENTS.
(a) The Collateral Agent shall not be obligated to take any
action
under this Agreement or any of the Security
Documents except for the performance
of such duties as are specifically set
forth herein or therein. The Collateral
Agent shall take any action under or with
respect to the Security Documents or
the Collateral which is requested by the
Requisite Parties or the Special
Requisite Parties, as the case may be,
pursuant to Section 4.5; provided that
the Collateral Agent shall not amend or
waive any provision of the Security
Documents except in accordance with Section
7.
(b) The Collateral Agent shall exercise or refrain from
exercising
all such rights, powers and remedies as
shall be available to it under the
Security Documents to which it is a party
or any of them or with respect to the
Collateral solely in accordance with an
Enforcement Notice received from the
Requisite Parties or the Special Requisite
Parties, as the case may be, in
accordance with Section 4.5. The Collateral
Agent shall have the right to
decline to follow any such direction if (i)
the Collateral Agent, being advised
by counsel and acting in good faith,
determines that the directed action is not
permitted by the terms of this Agreement or
the Security Documents or is
unlawful or (ii) the Collateral Agent,
being advised by counsel and acting in
good faith, is in reasonable doubt as to
whether such directed action is
permitted by this Agreement or the Security
Documents or would involve it in
personal liability unless the Collateral
Agent shall be provided written
confirmation from the Requisite Parties or
the Special Requisite Parties, as the
case may be, providing the Enforcement
Notice that the Collateral Agent's
indemnity by the other Secured Parties
contained in this Agreement would apply
without exception for such directed action
(absent gross negligence and willful
misconduct of the Collateral Agent). All
directions from the Requisite Parties
or the Special Requisite Parties, as the
case may be, shall be as contemplated
and permitted by this Agreement and the
applicable Security Document. The
Collateral Agent may rely on any such
direction given to it by the Requisite
Parties or the Special Requisite Parties,
as the case may be, and shall be fully
protected, and shall under no circumstances
(absent the gross negligence and
willful misconduct of the Collateral Agent)
be liable to the Company, any
Guarantor, any holder of any Secured
<PAGE>
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Obligations, or any other Person for taking
or refraining from taking action in
accordance with such direction and the
otherwise applicable terms of this
Agreement.
(c) In the absence of an Enforcement Notice (which may relate to
the
exercise of specific remedies or to the
exercise of remedies in general) from
the Requisite Parties or the Special
Requisite Parties, as the case may be, the
Collateral Agent shall not, without the
consent of the Requisite Parties or the
Special Requisite Parties, as the case may
be, exercise remedies available to it
under any Security Documents or with
respect to the Collateral or any part
thereof.
SECTION 3.3. STATUS OF MONEYS RECEIVED. All moneys received by
the Collateral Agent pursuant to this
Agreement shall be held in trust for the
purposes for which they were paid, and
shall be segregated from any other moneys
held by the Collateral Agent, and may be
deposited by the Collateral Agent under
such general conditions as may be
prescribed by law in the general banking
department of the Collateral Agent, and the
Collateral Agent shall not be liable
for any interest thereon.
SECTION 4. CERTAIN INTERCREDITOR ARRANGEMENTS.
SECTION 4.1. GENERAL RULE: PARI PASSU RIGHTS AGAINST
COLLATERAL.
(a) General Rule. All amounts owing with respect to the Secured
Obligations shall be secured by the
Collateral, without distinction as to
whether some Secured Obligations are then
due and payable and other Secured
Obligations are not then due and payable,
all in accordance with the priorities
established in this Section 4.
(b) Application
of Collateral Proceeds Generally. Except as
specifically provided in Section 11,
Section 12 and Section 13, if the
Collateral Agent receives any cash amounts
as payments under any Security
Documents or as proceeds of or otherwise
constituting the Collateral (which
amounts, under the terms of any of the
Security Documents, are to be applied to
any of the Secured Obligations), including,
without limitation, any amounts
received pursuant to Section 4.6 and
Section 4.7, any net proceeds received by
the Collateral Agent in connection with any
sale, exchange or other disposition
(a "DISPOSITION") of Collateral and, if
applicable, any sum received by the
Collateral Agent pursuant to Section 507(b)
of the Bankruptcy Code in any
bankruptcy case in which the Company or a
Guarantor is a debtor, such cash
amounts shall be applied (subject to
Section 4.2 and Section 5.3(e) hereof):
(i) first, to the payment of any unpaid fees or other amounts
expressly
owing under this Agreement to the Collateral Agent pursuant to
Section
5.5, Section 5.6 or Section 5.7;
(ii) second, equally and ratably to reimburse the Secured
Parties
for any amounts paid by the Secured Parties pursuant to Section
5.6;
(iii) third, pro rata to all accrued and unpaid interest on
BofA Debt
(other than Undrawn LC/Guaranty Exposure), Note Debt, Trade
Agreement
Debt, Additional Future Debt and Undrawn LC/Guaranty Exposure
in
proportion
to the respective amounts thereof owing to each Secured Party
on the
date of such distribution;
<PAGE>
-21-
(iv) fourth, pro rata to all outstanding principal amounts of
BofA Debt
(other than Undrawn LC/Guaranty Exposure), Note Debt (other
than
Make-Whole
Amounts), Trade Agreement Debt, Additional Future Debt and
Undrawn
LC/Guaranty Exposure in proportion to the respective amounts
thereof
owing to each Secured Party on the date of distribution;
(v) fifth, pro rata, to all other Secured Obligations
(including, without limitation, Make-Whole Amounts and fees payable
under
the Credit
Documents), if any, then remaining unpaid, in proportion to the
respective
amounts owed to each Secured Party; and
(vi) sixth, after indefeasible payment in full of and
provision
for all Secured Obligations, to the Company or to whomever else
the
Collateral Agent may be required to pay by applicable law.
(c) Special Deposit Provisions. Any payment pursuant to clause
(iii)
or clause (iv) of Section 4.1(b) with
respect to Undrawn LC/Guaranty Exposure
and any payment constituting a Proceeds
Deposit shall be paid to (or retained
by) the Collateral Agent for deposit in an
account (the "SPECIAL CASH COLLATERAL
ACCOUNT") to be held as Collateral for the
Secured Obligations and to be applied
as provided in this Section 4.1(c).
(i) Distributions of Cash Collateral. On each date after the
creation
of the Special Cash Collateral Account on which a reduction in
Undrawn
LC/Guaranty Exposure occurs by reason of either a drawing under
any BofA
Letter of Credit or a claim made by BofA against the Company on
an IRB Bond
Guaranty as certified to the Collateral Agent by BofA the
Collateral
Agent shall distribute from the Special Cash Collateral Account
an amount
(a "DISTRIBUTION AMOUNT") equal to the lesser of (1) the
balance
held by
the Collateral Agent in the Special Cash Collateral Account and
(2) all or
a portion of the amount of such draw or claim, as certified to
the
Collateral Agent by BofA, which would have been received by BofA
prior
to such
time had such draw or claim been made immediately prior to the
first
distribution made under Section 4.1(b) and the Secured
Obligation
resulting
from such draw or claim represented a separate non-contingent
Secured
Obligation. The Distribution Amount shall be distributed to pay
any
outstanding non-contingent amount of non-contingent BofA Debt
representing an increase in the amount of BofA Debt on account of
such
draw or
claim. At such times as the Undrawn LC/Guaranty Exposure is
reduced to
zero, any amount remaining in the Special Cash Collateral
Account,
after the payment of all prior Distribution Amounts, shall be
distributed as provided in clauses (iii), (iv), (v) and (vi) of
Section
4.1(b).
BofA shall provide copies of each certificate delivered to the
Collateral
Agent under this Section 4.1(c) to the Company and each of the
other
Secured Parties when such certificate is delivered to the
Collateral
Agent.
(ii) Distributions of Proceeds Collateral. On any date after a
Proceeds
Deposit occurs, the Collateral Agent shall distribute from the
Special
Cash Collateral Account an amount (a "PROCEEDS DISTRIBUTION
AMOUNT")
equal to all or a portion of the amount of such Proceeds
Deposit,
in each
case as requested in writing by BofA. The
<PAGE>
-22-
Proceeds
Distribution Amount shall be distributed to BofA for
application
to the
Reimbursement Agreement Debt. At such times as the Secured
Obligations owing to BofA are reduced to zero, any amount remaining
in the
Special
Cash Collateral Account attributable to Proceeds Deposits,
shall
be
distributed as provided in clauses (iii), (iv), (v) and (vi) of
Section
4.1(b).
(iii) Investment of Special Cash Collateral Account. All
amounts in
the Special Cash Collateral Account shall be invested by the
Collateral
Agent in Permitted Investments, as directed in writing by the
Company
and all income on such Permitted Investments shall be retained
in
the
Special Cash Collateral Account until all BofA Debt is paid in
full
and
thereafter shall be distributed as provided in Section 4.1(b).
SECTION 4.2. NON-CASH DISTRIBUTIONS OR PROCEEDS. If the
Collateral Agent receives any non-cash
distributions or proceeds in respect of
the Collateral, then, unless the Requisite
Parties instruct the Collateral Agent
to the contrary, the Collateral Agent shall
hold such non-cash distributions and
proceeds as Collateral upon the terms of
this Agreement and the Security
Documents until converted to cash and
thereupon applied or disbursed in
accordance with this Section 4; provided,
however, that, if any non-cash
distribution is received by the Collateral
Agent and is to be applied in
satisfaction of any Secured Obligation by
operation of a plan of reorganization
under Chapter 11 of the federal Bankruptcy
Code or otherwise as required by
applicable law, the Requisite Parties may,
instead of awaiting the conversion of
such non-cash distribution to cash, direct
the Collateral Agent to distribute
such non-cash distribution as provided in
Section 4.1(b), except in respect of a
distribution under Section 4.1(b)(i).
SECTION
4.3. ADDITIONAL COLLATERAL. Each of BofA, each Note
Holder, Northern and each holder of
Additional Future Debt hereby covenants and
agrees that it will not take, hold or
suffer to exist any security interest in
or Lien on any assets as security for any
of the Secured Obligations unless such
security interest or Lien is granted in
favor of, or otherwise made available
to, the Collateral Agent for the benefit of
BofA, the Note Holders, Northern and
the holders of Additional Future Debt as
contemplated by this Agreement.
SECTION 4.4. CERTAIN NOTICES.
(a) Each of BofA, each Note Holder, Northern and each holder of
Additional Future Debt hereby agrees to
give written notice to the Collateral
Agent of any demand for payment in full of
the Secured Obligations owing to the
demanding party, whether by acceleration of
such obligations or otherwise (a
"DEMAND NOTICE"). Any Requisite Parties or
Special Requisite Parties, as the
case may be, giving a Notice of Actionable
Default or Enforcement Notice to the
Collateral Agent shall contemporaneously
give a copy thereof to each of the
other Secured Parties.
(b) Neither BofA, any Note Holder, Northern nor any holder of
Additional Future Debt shall incur
liability of any kind should it, upon the
occurrence of any Event of Default, refrain
from accelerating maturity or
otherwise demanding payment in full of any
Secured Obligations owing to it, or
should it refrain from exercising any of
its rights and
<PAGE>
-23-
remedies against the Company, any Guarantor
or any other obligor in respect of
the Secured Obligations.
SECTION 4.5. ENFORCEMENT.
(a) The Collateral Agent shall (subject to the provisions of
Section
3.2 and Section 5) take any such actions in
the exercise of rights and remedies
under the Security Documents as are
directed in an Enforcement Notice given by
the Requisite Parties or Special Requisite
Parties, as the case may be, at any
time more than five (5) Business Days after
a Notice of Actionable Default shall
have been given to a Responsible Officer of
the Collateral Agent with respect to
the Event of Default that is the basis (or
one of the bases) of the Enforcement
Notice. In the event the Collateral Agent
shall have received conflicting
directions from the Special Requisite
Parties and the Requisite Parties, it
shall follow the directions of the
Requisite Parties, except to the extent that
such direction of the Requisite Parties
would have the effect of rescinding or
nullifying any Enforcement Notice given by
Special Requisite Parties, in which
case the Collateral Agent shall follow the
directions of the Special Requisite
Parties set forth in such Enforcement
Notice. In the event the Collateral Agent
shall receive conflicting directions as set
forth in two or more Enforcement
Notices delivered by any one or more
holders of Secured Obligations, each of
which constitutes Special Requisite
Parties, it shall either (i) follow the
directions of the Requisite Parties or (ii)
if no such directions shall have
been given by the Requisite Parties within
thirty (30) Business Days from the
most recent directions so received from a
group of holders constituting Special
Requisite Parties submit such matter to a
court of competent jurisdiction to
establish the proper course of action it
shall be required to take. It is
acknowledged that the Collateral Agent
shall have no obligation to take any
action (including, without limitation,
submitting such matter to court) unless
it has received security or indemnity as
contemplated by Section 5.5(a).
(b) BofA, each Note Holder, Northern and each holder of
Additional
Future Debt agrees that it will promptly,
and in any event within five (5)
Business Days after the request by one of
the others (which request may be made
telephonically), advise the requesting
party (telephonically, confirmed in
writing) as to the outstanding amount of
Undrawn LC/Guaranty Exposure, other
BofA Debt, Note Debt, Trade Agreement Debt
or Additional Future Debt owed to it.
Any party may rely on such information (or
other means available to it) to
determine whether the Requisite Parties or
the Special Requisite Parties, as the
case may be, have acted with respect to any
action or proposed action.
(c) Any Enforcement Notice, when issued, may be rescinded or
withdrawn with the consent of the Requisite
Parties or Special Requisite
Parties, whichever shall have given such
Enforcement Notice .
SECTION 4.6. TURNOVER OF COLLATERAL. If any Secured Party
acquires custody, control or possession of
any payment constituting any
Collateral (including proceeds therefrom),
other than pursuant to the terms of
Section 4.1(b), Section 4.1(c) or Section
4.2 hereof, such Secured Party shall
promptly cause such payment or Collateral
to be delivered to or put in the
custody, possession or control of the
Collateral Agent or, if the Collateral
Agent shall so designate, an agent of the
Collateral Agent (which agent may be a
branch or affiliate of the Collateral
Agent) in the same form of
<PAGE>
-24-
payment received, with appropriate
endorsements, for distribution in accordance
with the provisions of Section 4.1 or
Section 4.2, as applicable. Until such
time as the provisions of the immediately
preceding sentence have been complied
with, such Secured Party shall be deemed to
hold such Collateral in trust for
the Collateral Agent. Notwithstanding the
foregoing, neither BofA, any Note
Holder, Northern nor any holder of
Additional Future Debt shall be required to
deliver to the Collateral Agent or such
agent of the Collateral Agent, any
amounts received by BofA, such Note Holder,
Northern or such holder of
Additional Future Debt prior to receipt by
the Collateral Agent of a Notice of
Actionable Default to the extent that such
amounts constitute (a) payments of
principal on BofA Debt, the Note Debt, the
Trade Agreement Debt or Additional
Future Debt required to be made pursuant to
the Loan Documents and due and paid
prior to such date, or (b) regular payments
of interest, Make-Whole Amounts,
fees and other charges on or in respect of
BofA Debt, the Note Debt, the Trade
Agreement Debt or Additional Future Debt
due and paid prior to such date.
SECTION 4.7. PAYMENTS FROM ENFORCEMENT RIGHTS. Each of the
Secured Parties agrees with each other
Secured Party that (a) if any Secured
Party exercises any right of setoff,
banker's lien or similar right with respect
to any Collateral or any assets of the
Company or any Guarantor, the amount set
off shall be applied pro rata to the
Secured Obligations in accordance with
Section 4.1(b) or Section 4.2, as the case
may be, and (b) if such Secured Party
shall receive from the Company or any
Guarantor, whether by voluntary payment,
exercise of the right of setoff,
counterclaim, cross-action, enforcement of the
claim in respect of the Secured Obligations
owing to such Secured Party by
proceedings against the Company at law or
in equity or by proof thereof in
bankruptcy, reorganization, liquidation,
receivership or similar proceedings, or
otherwise, for application to the payment
of the Secured Obligations owing to
such Secured Party any amount in excess of
its ratable portion of the payments
received by the other Secured Parties with
respect to BofA Debt, Note Debt,
Trade Agreement Debt and Additional Future
Debt (as the case may be) held by all
of the Secured Parties as contemplated by
Section 4.1(b) or Section 4.2, as the
case may be, such Secured Party will make
such disposition and arrangements with
the other Secured Parties with respect to
such excess, either by way of
distribution, pro tanto assignment of
claims, subrogation or otherwise as shall
result in each Secured Party receiving in
respect of the Secured Obligations
owing to it its proportionate payment as
contemplated by Section 4.1(b) or
Section 4.2, as the case may be; provided
that if all or any part of such excess
payment is thereafter recovered from such
Secured Party, such disposition and
arrangements shall be rescinded and the
amount restored to the extent of such
recovery, but without interest.
SECTION 4.8. WAIVERS AND AMENDMENTS OF CREDIT DOCUMENTS. Each
of the Note Holders, Northern, BofA and
each holder of Additional Future Debt
agrees that, without the written consent of
the Majority Secured Parties, it
shall not modify or amend any provisions of
or give any waiver with respect to
the Credit Documents to which such party
hereto is a signatory, if the effect of
such modification or amendment or waiver is
(i) to increase the principal amount
of the Note Debt, Trade Agreement Debt,
BofA Debt or Additional Future Debt then
outstanding (unless such increase in Note
Debt, Trade Agreement Debt, BofA Debt
or Additional Future Debt constitutes
Additional Future Debt, in which case no
such consent shall be required), or (ii) to
amend or modify any term defined
therein which is incorporated by reference
into this Agreement, or is
specifically referred to in this Agreement
in such a way as to alter its meaning
in this Agreement, or (iii) to provide for
loans to be made or letters of credit
to be issued (other
<PAGE>
-25-
than by extension or renewal) after the
issuance of an Enforcement Notice, or
(iv) to amend or modify any provision of
any of the Security Documents or this
Agreement except as provided therein or
herein. Except as otherwise specified in
the preceding sentence, the Note Holders,
Northern, BofA and the holders of
Additional Future Debt, without the consent
of the other parties, shall be free
to deal with the Company and the Guarantors
in their respective sole discretion
under and in respect of the provisions of
the Loan Documents to which they are
party, with the right and power without
limitation to modify, amend or waive any
terms or provisions of such Loan Documents,
to grant extensions of the time of
payment or performance, and to make
compromises and settlements with the Company
or any Guarantor.
SECTION 4.9. INDEPENDENT INVESTIGATION; SHARING OF FINANCIAL
INFORMATION. Each of BofA, each Note
Holder, Northern and each holder of
Additional Future Debt acknowledges and
agrees that it has entered into the
Credit Documents to which it is party and
(as applicable) extended funds and/or
credit or provided services to the Company
on the basis of its own independent
investigation of the Company, its
Subsidiaries and affiliated companies, and
their business, operations and financial
condition, that it shall continue to
make such investigations in connection with
the credit and/or loans extended to
the Company as it deems appropriate and
that it has not conducted any such
investigations in reliance upon
information, analysis and recommendations which
it may have obtained from any other Secured
Party. Without derogation in any way
of the preceding sentence, the Company
acknowledges and consents to any exchange
of information by and among BofA, each Note
Holder, Northern and each holder of
Additional Future Debt, without regard to
whether the impact of any such
exchange is favorable or unfavorable to the
Company and without regard to the
accuracy or completeness of any information
so exchanged.
SECTION 4.10. AGENTS. Except as specifically provided in this
Agreement, and except for the role of the
Collateral Agent as specified in this
Agreement, BofA is not acting as agent for
any other Secured Party, no Note
Holder is acting as agent for any other
Secured Party and Northern is not acting
as agent for any other Secured Party; and
nothing stated or implied in this
Agreement shall be deemed to create such an
agency relationship.
SECTION 5.
CONCERNING THE COLLATERAL AGENT.
SECTION 5.1. APPOINTMENT OF COLLATERAL AGENT. The Note
Holders, BofA and Northern hereby appoint
the Collateral Agent Bank to act as
collateral agent pursuant to the terms of
this Agreement and the Security
Documents and hereby irrevocably authorize
the Collateral Agent to execute and
enter into the A/R Intercreditor Agreement
and an intercreditor agreement in
connection with any other Receivables
Purchase Agreement on their behalf and to
take such action and perform such duties as
provided therein, and the Collateral
Agent Bank hereby accepts such appointment.
The relationship between the
Collateral Agent and the holders of the
Secured Obligations is and shall be that
of agent and principal only, and nothing
contained in this Agreement or any of
the Credit Documents shall be construed to
appoint the Collateral Agent as a
trustee for any such holder.
<PAGE>
-26-
SECTION 5.2. LIMITATIONS ON RESPONSIBILITY OF COLLATERAL
AGENT.
(a) The Collateral Agent shall not be responsible in any manner
whatsoever for the correctness of any
recitals, statements, representations or
warranties contained herein or in any
Security Document, except for those made
by it herein. The Collateral Agent makes no
representation as to the value or
condition of the Collateral or any part
thereof, as to the title of the Company
or any Guarantor to the Collateral, as to
the security afforded by this
Agreement or any Security Document or,
except as set forth in Section 6, as to
the validity, execution, enforceability,
legality or sufficiency of this
Agreement or any Security Document, and the
Collateral Agent shall incur no
liability or responsibility in respect of
any such matters. The Collateral Agent
shall not be responsible for insuring the
Collateral, for the payment of taxes,
charges, assessments or liens upon the
Collateral or otherwise as to the
maintenance of the Collateral, except as
provided in the immediately following
sentence when the Collateral Agent has
possession of the Collateral. The
Collateral Agent shall have no duty to the
Company or any Guarantor or to the
holders of any of the Secured Obligations
as to the care of any Collateral in
its possession or control or in the
possession or control of any agent or
nominee of the Collateral Agent or any
income thereon or as to the preservation
of rights against prior parties or any
other rights pertaining thereto, except
the duty to accord such of the Collateral
as may be in its possession
substantially the same care as it accords
its own assets and the duty to account
for monies received by it. The Collateral
Agent's duties and responsibilities
shall be determined solely by the
provisions of this Agreement and the Security
Documents to which it is a party, and the
Collateral Agent shall not be liable
or responsible for any duties or
obligations set forth in any other document to
which it is not a party.
(b) The Collateral Agent shall not be responsible for any loss
suffered with respect to any investment
permitted to be made under this
Agreement and shall not be responsible for
the consequences of any oversight or
error of judgment whatsoever, except that
the Collateral Agent may be liable for
losses due to its willful misconduct, gross
negligence or breach of its
agreement set forth herein. The Collateral
Agent shall not be required to
ascertain or inquire as to the performance
by the Company of any of the
covenants or agreements contained herein or
in any of the Credit Documents.
Neither the Collateral Agent nor any
officer, agent or representative thereof
shall be personally liable for any action
taken or omitted to be taken by any
such Person in connection with this
Agreement or any Security Document except
for such Person's own gross negligence or
willful misconduct. Neither the
Collateral Agent nor any officer shall be
personally liable for any action taken
by any such Person in accordance with any
notice given by the Requisite Parties
or Special Requisite Parties, as the case
may be, in accordance with and
pursuant to the terms of this Agreement
even if, at the time such action is
taken by any such Person, the Requisite
Parties or Special Requisite Parties, as
the case may be, or Persons purporting to
be the Requisite Parties or Special
Requisite Parties, as the case may be, are
not so authorized by the Requisite
Parties or the Special Requisite Parties,
as the case may be, to give such
notice, except where a Responsible Officer
of the Collateral Agent has actual
knowledge that such Requisite Parties or
Special Requisite Parties, as the case
may be, or Persons purporting to be the
Requisite Parties or Special Requisite
Parties, as the case may be, are not so
authorized by the Requisite Parties or
Special Requisite Parties, as the case may
be, to give such notice. The
Collateral Agent may execute any of the
powers granted under this Agreement or
any of the Security Documents or the A/R
Intercreditor Agreement (or any other
<PAGE>
-27-
intercreditor agreement executed by the
Collateral Agent in accordance with the
terms of this Agreement) and perform any
duty hereunder or thereunder either
directly or by or through agents,
receivers, or attorneys-in-fact and shall not
be responsible for anything done by such
agents, receivers or attorneys-in-fact
selected by it with due care.
(c) Whenever pursuant to the provisions hereof or of any
Security
Document it is required that any party
hereto obtain the consent or approval of
the Collateral Agent, or that any matter
prove satisfactory to the Collateral
Agent, or if the Collateral Agent, in its
best judgment, needs clarification or
instruction concerning its duties or
obligations hereunder, the Collateral
Agent, prior to giving any such consent or
approval or indicating its
satisfaction with any such matter, or
performing such duty or obligation, shall
(except where the failure to do so, in its
good faith judgment, could imperil
the Collateral or the Liens thereon) be
required to consult with the Secured
Parties in a manner deemed reasonable by
the Collateral Agent, and the
Collateral Agent shall be protected in
following any direction of the Requisite
Parties or Special Requisite Parties, as
the case may be.
(d) The foregoing provisions of this Section 5.2 shall not
relieve
the Collateral Agent of any liability for
any failure to perform any contractual
duty expressly undertaken by it to be
performed under this Agreement if such
liability is caused by the gross negligence
or willful misconduct of the
Collateral Agent.
SECTION 5.3. RELIANCE BY COLLATERAL AGENT; ETC.
(a) Whenever in the performance of its duties under this
Agreement
the Collateral Agent shall deem it
necessary or desirable that a matter be
proved or established with respect to any
Person in connection with the taking,
suffering or omitting of any action
hereunder by the Collateral Agent, such
matter may be conclusively deemed to be
proved or established by a certificate
executed by an officer of such Person, and
the Collateral Agent shall have no
liability with respect to any action taken,
suffered or omitted in reliance in
good faith thereon.
(b) The Collateral Agent may consult with counsel and shall be
fully
protected in taking any action hereunder in
good faith in accordance with any
advice of such counsel. The Collateral
Agent shall have the right but not the
obligation at any time to seek instructions
concerning the administration of
this Agreement, the duties created
hereunder, or any of the Collateral from any
court of competent jurisdiction.
(c) The Collateral Agent shall be fully protected in relying in
good
faith upon any resolution, statement,
certificate, instrument, opinion, report,
notice, request, consent, order or other
paper or document which it believes to
be genuine and to have been signed or
presented by the proper party or parties.
In the absence of its gross negligence or
willful misconduct, the Collateral
Agent may conclusively rely in good faith,
as to the truth of the statements and
the correctness of the opinions expressed
therein, upon any certificate or
opinions furnished to the Collateral Agent
in connection with this Agreement.
(d) The Collateral Agent shall not be deemed to have actual,
constructive, direct or indirect notice or
knowledge of the occurrence of any
Event of Default or Actionable
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Default unless and until a Responsible
Officer of the Collateral Agent shall
have received a Notice of Actionable
Default or notice of such Event of Default.
The Collateral Agent shall have no
obligation whatsoever either prior to or
after receiving such a Notice of Actionable
Default to inquire whether an
Actionable Default has, in fact, occurred
and shall be entitled to rely in good
faith conclusively, and shall be fully
protected in so relying, on any
certificate so furnished to it and shall
have no obligation, absent written
instructions from the Requisite Parties or
Special Requisite Parties, as the
case may be, to take or omit to take any
action with respect to such Notice of
Actionable Default.
(e) To the extent the Collateral Agent is required (pursuant to
Section 4, Section 11, Section 12, Section
13, or otherwise) to determine any
amount, or take any action to distribute
any amount, of any Secured Obligation
or other payments hereunder, it shall have
no obligation to do so unless such
amount shall have been certified in writing
by the Requisite Parties or the
Special Requisite Parties, as the case may
be, as being the amount in question.
Each of the other parties hereto agrees to
certify such amounts upon request of
the Collateral Agent. If any dispute or
disagreement shall arise as to the
allocation of any sum of money received by
the Collateral Agent hereunder or
under any Security Document, the Collateral
Agent shall have the right to
deliver such sum to a court of competent
jurisdiction and therein commence an
action for interpleader.
SECTION 5.4. RESIGNATION OR REMOVAL OF THE COLLATERAL AGENT.
The Collateral Agent may at any time resign
by giving sixty (60) days prior
written notice thereof to each Secured
Party and the Company, and the Collateral
Agent may at any time be removed for cause
(consisting of fraud, gross
misconduct, willful or reckless breach of
this Agreement or other just cause, as
determined in their discretion by the
Majority Secured Parties) by sixty (60)
days prior written notice thereof to the
Collateral Agent, each other Secured
Party and the Company given by the Majority
Secured Parties, provided that in
the case of fraud, gross misconduct or
willful or reckless breach of this
Agreement such removal may be effective
immediately upon five (5) days after
giving of such notice to the Collateral
Agent and provided further that no
resignation or removal shall be effective
until a successor for the Collateral
Agent is appointed. Upon such resignation
or removal, the Majority Secured
Parties shall have the right to appoint a
successor Collateral Agent. If no
successor Collateral Agent shall have been
so appointed by the Majority Secured
Parties and shall have accepted such
appointment within forty-five (45) days
after the retiring Collateral Agent's
giving of notice of resignation or the
giving of notice of removal, as the case
may be, then the retiring Collateral
Agent may, on behalf of the Secured
Parties, appoint a successor Collateral
Agent, which shall be a financial
institution having a long-term bank deposit
rating of not less than "A" from Standard
& Poor's Ratings Group, a Division of
McGraw-Hill, Inc., or "A-2" from Moody's
Investors Services, Inc. Upon the
acceptance of any appointment as Collateral
Agent hereunder by a successor
Collateral Agent, such successor Collateral
Agent shall thereupon succeed to and
become vested with all the rights, powers,
privileges and duties of the retiring
Collateral Agent, and the retiring
Collateral Agent shall be discharged from its
duties and obligations hereunder. After any
retiring Collateral Agent's
resignation or removal, the provisions of
this Agreement and the Security
Documents shall continue in effect for its
benefit in respect of any actions
taken or omitted to be taken by it while it
was acting as Collateral Agent. Any
corporation into which the Collateral Agent
Bank may be merged or with which it
may be consolidated, or any corporation
which acquires all or
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substantially all of the corporate trust
business of the Collateral Agent Bank,
including the collateral agency established
pursuant to this Agreement, or any
corporation resulting from any merger or
consolidation to which the Collateral
Agent Bank shall be a party, shall be the
successor to the Collateral Agent Bank
without the execution of any paper.
SECTION 5.5. EXPENSES AND INDEMNIFICATION.
(a) By countersigning this Agreement, the Company agrees (i) to
reimburse the Collateral Agent, promptly,
for any reasonable expenses incurred
by the Collateral Agent, including
reasonable counsel fees and disbursements and
compensation of agents, arising out of, in
any way connected with, or as a
result of, the execution or delivery of
this Agreement or any Security Document
or any agreement or instrument contemplated
hereby or thereby or the performance
by the parties hereto or thereto of their
respective obligations hereunder or
thereunder or in connection with the
enforcement or protection of the rights of
the Collateral Agent and the Secured
Parties hereunder or under the Security
Documents, and (ii) to indemnify and hold
harmless the Collateral Agent and its
directors, officers, employees and agents,
promptly, from and against any and
all liabilities, obligations, losses,
damages, penalties, actions, judgments,
suits, and reasonable costs, expenses or
disbursements of any kind or nature
whatsoever ("LOSSES") which may be imposed
on, incurred by or asserted against
the Collateral Agent Bank in its capacity
as the Collateral Agent or any of them
in any way relating to or arising out of
this Agreement or any Security Document
or any action taken or omitted by them
under thi
