This Loan Agreement involves
Title: TERM LOAN AGREEMENT
Governing Law: New York Date: 5/8/2008
Law Firm: McGuireWoods;Shearman Sterling
TERM LOAN AGREEMENT
dated as of
May 2, 2008
Esmark Steel Service Group, Inc.,
The Other Loan Parties Party Hereto
The Lenders Party Hereto
Essar Steel Holdings Limited,
as Administrative Agent
TABLE OF CONTENTS
|Article I Definitions||1|
|Section 1.01.||Defined Terms||1|
|Section 1.02.||Classification of Loans and Borrowings||23|
|Section 1.03.||Terms Generally||23|
|Section 1.04.||Accounting Terms; GAAP||24|
|Section 1.05.||[Intentionally reserved]||24|
|Article II The Credits||24|
|Section 2.02.||Loans and Borrowings||24|
|Section 2.03.||Requests for Revolving Borrowings||25|
|Section 2.04.||Protective Advances||26|
|Section 2.05.||Swingline Loans and Overadvances||26|
|Section 2.06.||Letters of Credit||27|
|Section 2.07.||Funding of Borrowings||31|
|Section 2.08.||Interest Elections||31|
|Section 2.09.||Termination and Reduction of Commitments||32|
|Section 2.10.||Repayment and Amortization of Loans; Evidence of Debt||33|
|Section 2.11.||Prepayment of Loans||34|
|Section 2.14.||Alternate Rate of Interest||37|
|Section 2.15.||Increased Costs||37|
|Section 2.16.||Break Funding Payments||38|
|Section 2.18.||Payments Generally; Allocation of Proceeds; Sharing of Set-offs||40|
|Section 2.19.||Mitigation Obligations; Replacement of Lenders||42|
|Section 2.20.||Returned Payments||42|
|Article III Representations and Warranties||43|
|Section 3.01.||Organization; Powers||43|
|Section 3.02.||Authorization; Enforceability||43|
|Section 3.03.||Governmental Approvals; No Conflicts||43|
TABLE OF CONTENTS
|Section 3.04.||Financial Condition; No Material Adverse Change||43|
|Section 3.06.||Litigation and Environmental Matters||44|
|Section 3.07.||Compliance with Laws and Agreements||44|
|Section 3.08.||Investment Company Status||44|
|Section 3.12.||Material Agreements||45|
|Section 3.15.||Capitalization and Subsidiaries||46|
|Section 3.16.||Security Interest in Collateral||46|
|Section 3.17.||Employment Matters||46|
|Section 3.18.||Affiliate Transactions||46|
|Section 3.19.||Common Enterprise||46|
|Article IV Conditions||47|
|Section 4.01.||Effective Date||47|
|Section 4.02.||Each Credit Event||49|
|Article V Affirmative Covenants||50|
|Section 5.01.||Financial Statements; Borrowing Base and Other Information||50|
|Section 5.02.||Notices of Material Events||53|
|Section 5.03.||Existence; Conduct of Business||54|
|Section 5.04.||Payment of Obligations||54|
|Section 5.05.||Maintenance of Properties||54|
|Section 5.06.||Books and Records; Inspection Rights||54|
|Section 5.07.||Compliance with Laws||54|
|Section 5.08.||Use of Proceeds||54|
|Section 5.10.||Casualty and Condemnation||55|
|Section 5.11.||Appraisals; Field Examinations||55|
|Section 5.12.||Depository Banks||55|
TABLE OF CONTENTS
|Section 5.13.||Additional Collateral; Further Assurances||55|
|Section 5.14.||Post-Closing Covenants||56|
|Article VI Negative Covenants||57|
|Section 6.03.||Fundamental Changes||59|
|Section 6.04.||Investments, Loans, Advances, Guarantees and Acquisitions||60|
|Section 6.05.||Asset Sales||62|
|Section 6.06.||Sale and Leaseback Transactions||63|
|Section 6.07.||Swap Agreements||63|
|Section 6.08.||Restricted Payments; Certain Payments of Indebtedness||63|
|Section 6.09.||Transactions with Affiliates||64|
|Section 6.10.||Restrictive Agreements||64|
|Section 6.11.||Amendment of Material Documents||65|
|Section 6.12.||Fixed Charge Coverage Ratio||65|
|Article VII Events of Default||65|
|Article VIII The Administrative Agent||68|
|Article IX Miscellaneous||70|
|Section 9.02.||Waivers; Amendments||71|
|Section 9.03.||Expenses; Indemnity; Damage Waiver||73|
|Section 9.04.||Successors and Assigns||75|
|Section 9.06.||Counterparts; Integration; Effectiveness||78|
|Section 9.08.||Right of Setoff||78|
|Section 9.09.||Governing Law; Jurisdiction; Consent to Service of Process||78|
|Section 9.10.||WAIVER OF JURY TRIAL||79|
|Section 9.13.||Several Obligations; Nonreliance; Violation of Law||80|
|Section 9.14.||USA PATRIOT Act||80|
TABLE OF CONTENTS
|Section 9.16.||Appointment for Perfection||80|
|Section 9.17.||Interest Rate Limitation||80|
|Article X Loan Guaranty||81|
|Section 10.02.||Guaranty of Payment||81|
|Section 10.03.||No Discharge or Diminishment of Loan Guaranty||81|
|Section 10.04.||Defenses Waived||82|
|Section 10.05.||Rights of Subrogation||82|
|Section 10.06.||Reinstatement; Stay of Acceleration||82|
|Section 10.10.||Maximum Liability||83|
|Section 10.11.||Liability Cumulative||83|
|Article XI The Borrower||83|
|Section 11.01.||Appointment; Nature of Relationship||83|
|Section 11.03.||Employment of Agents||84|
|Section 11.05.||Successor Borrower||84|
|Section 11.06.||Execution of Loan Documents; Borrowing Base Certificate||84|
|Article XII Subordination of Intercompany Obligations||85|
|Section 12.01.||Subordination Generally||85|
|Section 12.02.||Specific Performance; Waiver of Defenses||85|
|Section 12.04.||Loan Parties Failure to Act||86|
|Article XIII Concerning Joint and Several Liability of the Borrowers||86|
|Section 13.01.||Joint and Several Liability||86|
|Section 13.02.||Obligation to Act||86|
|Section 13.03.||Full Recourse; Enforceability||86|
TABLE OF CONTENTS
|Section 13.04.||Waiver of Defenses||86|
|Section 13.05.||Termination; Use of Remedies||87|
|Article XIV Contribution Obligations||87|
|Section 14.02.||Subordination of Claims||88|
|Section 14.03.||Limit on Obligations||88|
|Section 14.04.||Termination; Use of Remedies||88|
|Schedule 3.05 — Properties|
|Schedule 3.06 — Disclosed Matters|
|Schedule 3.12 — Material Agreements|
|Schedule 3.14 — Insurance|
|Schedule 3.15 — Capitalization and Subsidiaries|
|Schedule 3.18 — Affiliate Transactions|
|Schedule 6.01 — Existing Indebtedness|
|Schedule 6.02 — Existing Liens|
|Schedule 6.04 — Existing Investments|
|Schedule 6.09 — Success Fee/Affiliate Transaction||/|
|Schedule 6.10 — Existing Restrictions|
|Exhibit A — Form of Assignment and Assumption|
|Exhibit B — Form of Closing Certificate|
|Exhibit D — Form of Compliance Certificate|
|Exhibit E — Joinder Agreement|
|Exhibit F — Form of Perfection Certificate|
|Exhibit G — Form of Exemption Certificate|
This TERM LOAN AGREEMENT, dated as of May 2, 2008 (as it may be amended or modified from time to time, this “ Agreement ”), is entered into by and among ESMARK INCORPORATED, a Delaware corporation (herein, together with its successors and assigns, “ Esmark ”), ESMARK STEEL SERVICE GROUP, INC., a Delaware corporation, (herein, together with its successors and assigns, the “ Borrower ”), the other Loan Parties party hereto, the Lenders party hereto, and ESSAR STEEL HOLDINGS LIMITED, as administrative agent for the Lenders (herein, together with its successors and assigns, the “ Administrative Agent ”).
The parties hereto agree as follows:
Section 1.01. Defined Terms . As used in this Agreement, the following terms have the meanings specified below:
“ ABR ”: for any day, a rate per annum (rounded upwards, if necessary, to the next 1/16 of 1%) equal to the greater of (a) the Prime Rate in effect on such day and (b) the Federal Funds Effective Rate in effect on such day plus 1/2 of 1%. For purposes hereof: “Prime Rate” shall mean, for any day, the rate of interest per annum determined from time to time by JPMorgan Chase Bank, N.A. as its prime commercial lending rate for United States dollar loans in the United States for such day (the Prime Rate not being intended to be the lowest rate of interest charged by JPMorgan Chase Bank, N.A. in connection with extensions of credit to debtors). Any change in the ABR due to a change in the Prime Rate or the Federal Funds Effective Rate shall be effective as of the opening of business on the effective day of such change in the Prime Rate or the Federal Funds Effective Rate, respectively.
“ Acquisition ” means any transaction or series of related transactions for the purpose of or resulting, directly or indirectly, in (i) the acquisition of all or substantially all of the assets of any Person, or any business or division of any Person, (ii) the acquisition or ownership of in excess of 50% of the Equity Interest of any Person, or (iii) the acquisition of another Person by a merger, consolidation, amalgamation or any other combination with such Person.
“ Acquisition Target ” shall mean any Person engaged in the steel business or primarily involved in the steel industry which Borrower desire to acquire in accordance with Section 6.04(o) hereof.
“ Administrative Agent ” has the meaning assigned to such term in the opening paragraph of this Agreement.
“ Affiliate ” means, as to any Person, any other Person that, directly or indirectly, is in control of, is controlled by, or is under common control with, such Person.
“ Affiliate Loans ” means, collectively, each loan made by the Esmark to WPC and/or one or more of WPC’s wholly-owned subsidiaries.
“ Agreement ” has the meaning assigned to such term in the opening paragraph of this Agreement.
“ Aggregate Exposure Percentage ”: with respect to any Lender at any time, the ratio (expressed as a percentage) of such Lender’s Loans at such time to the Loans of all Lenders at such time.
“ Applicable Margin ”: 0.50% per annum.
“ Assignment and Assumption ” means an assignment and assumption entered into by a Lender and an assignee (with the consent of any party whose consent is required by Section 9.06), and accepted by the Administrative Agent, in the form of Exhibit A or any other form approved by the Administrative Agent.
“ Board ” means the Board of Governors of the Federal Reserve System of the United States of America.
“ Borrower ” has the meaning assigned to such term in the opening paragraph of this Agreement.
“ Business Day ” means any day that is not a Saturday, Sunday or other day on which commercial banks in Chicago are authorized or required by law to remain closed; provided that, when used in connection with a Eurodollar Loan, the term “ Business Day ” shall also exclude any day on which banks are not open for dealings in dollar deposits in the London interbank market.
“ Capital Lease Obligations ” of any Person means the obligations of such Person to pay rent or other amounts under any lease of (or other arrangement conveying the right to use) real or personal property, or a combination thereof, which obligations are required to be classified and accounted for as capital leases on a balance sheet of such Person under GAAP, and the amount of such obligations shall be the capitalized amount thereof determined in accordance with GAAP.
“ Change of Control ” means the occurrence of any of the following: (a) Esmark shall cease to own 100% of the Voting Interests in WPC or the Borrower; or (b) any Person or two or more Persons acting in concert other than Franklin Mutual Advisers LLC shall have acquired beneficial ownership (within the meaning of Rule 13d-3 of the Securities and Exchange Commission under the Securities Exchange Act of 1934), directly or indirectly, of Voting Interests of Esmark (or other securities convertible into such Voting Interests) representing 20% or more of the combined voting power of all Voting Interests of Esmark; or (c) any Person or two or more Persons acting in concert other than Franklin Mutual Advisers LLC shall have acquired by contract or otherwise, or shall have entered into a contract or arrangement that, upon consummation, will result in its or their acquisition of control over Voting Interests of Esmark (or other securities convertible into such Voting Interests) representing 20% or more of the combined voting power of all Voting Interests of Esmark; or (d) WPC shall cease to own 100% of the Equity Interests in Wheeling-Pittsburgh Steel Corporation; or (e) Esmark or any of its subsidiaries Disposes of property in a single or series of Dispositions (other than Dispositions permitted under Section 6.05(a) through (f), inclusive) valued in the aggregate in excess of 5% of the total book value of the assets of Esmark and its subsidiaries; provided that the execution and delivery and consummation of the transaction contemplated by the Purchase Agreement shall not constitute a “Change of Control” hereunder.
“ Code ” means the Internal Revenue Code of 1986, as amended from time to time.
“ Collateral ” means any and all property owned, leased or operated by a Person covered by the Collateral Documents and any and all other property of any Loan Party, now existing or hereafter acquired, that may at any time be or become subject to a security interest or Lien in favor of the Administrative Agent, on behalf of itself and the Lenders, to secure the Secured Obligations.
“ Collateral Documents ” means, collectively, the Security Agreement and any other documents granting a Lien upon the Collateral as security for payment of the Secured Obligations.
“ Control ” means the possession, directly or indirectly, of the power, directly or indirectly, either to (a) vote 10% or more of the securities having ordinary voting power for the election of directors (or persons performing similar functions) of such Person or (b) direct or cause the direction of the management or policies of a Person, whether through the ability to exercise voting power, by contract or otherwise. “ Controlling ” and “ Controlled ” have meanings correlative thereto.
“ Default ” means any event or condition which constitutes an Event of Default or which upon notice, lapse of time or both would, unless cured or waived, become an Event of Default.
“ Disclosed Matters ” means the actions, suits and proceedings and the environmental matters disclosed in Schedule 3.06 .
“ Disposition ” means, respect to any property, any sale, lease, sale and leaseback, assignment, conveyance, transfer or other disposition thereof. The terms “Dispose” and “Disposed of” shall have correlative meanings.
“ Document ” has the meaning assigned to such term in the Security Agreement.
“ dollars ” or “ $ ” refers to lawful money of the United States of America.
“ Domestic Subsidiary ” means any Subsidiary organized under the laws of the United States of America, any State thereof, or the District of Columbia.
“ E2 Acquisition ” means the acquisition and related transactions described in the Purchase and Sale Agreement, dated as of August 1, 2007, by and among Mittal Steel USA Inc., ISG Sparrows Point LLC, ISG Acquisition Inc., Mittal Steel USA—Venture Inc., ISG Technologies Inc., Mittal Steel USA—Railways Inc., Bethlehem Acquisition Co. and BIP Acquisition Sub, Inc.
“ E2 Transaction Costs ” means Transaction Costs paid or payable in connection with the E2 Acquisition.
“ Effective Date ” means May 2, 2008 or, if later, the first date on which all of the conditions precedent set forth in Section 4.01 have been satisfied or waived by the Administrative Agent.
“ Environmental Laws ” means all laws, rules, regulations, codes, ordinances, orders, decrees, judgments, injunctions, notices or binding agreements issued, promulgated or entered into by any Governmental Authority, relating in any way to the environment, preservation or reclamation of natural resources, the management, release or threatened release of any Hazardous Material or to health and safety matters.
“ Environmental Liability ” means any liability, contingent or otherwise (including any liability for damages, costs of environmental remediation, fines, penalties or indemnities), of the Borrower or any Subsidiary directly or indirectly resulting from or based upon (a) violation of any Environmental Law, (b) the generation, use, handling, transportation, storage, treatment or disposal of any Hazardous Materials, (c) exposure to any Hazardous Materials, (d) the release or threatened release of any Hazardous Materials into the environment or (e) any contract, agreement or other consensual arrangement pursuant to which liability is assumed or imposed with respect to any of the foregoing.
“ Equity Interests ” means, with respect to any Person, shares of capital stock of (or other ownership or profit interests in) such Person, warrants, options or other rights for the purchase or other acquisition from such Person of shares of capital stock of (or other ownership or profit interests in) such Person, securities convertible into or exchangeable for shares of capital stock of (or other ownership or profit interests in) such Person or warrants, rights or options for the purchase or other acquisition from such Person of such shares (or such other interests), and other ownership or profit interests in such Person (including, without limitation, partnership, member or trust interests therein), whether voting or nonvoting, and whether or not such shares, warrants, options, rights or other interests are authorized or otherwise existing on any date of determination.
“ ERISA ” means the Employee Retirement Income Security Act of 1974, as amended from time to time.
“ ERISA Affiliate ” means any trade or business (whether or not incorporated) that, together with the Borrower, is treated as a single employer under Section 414(b) or (c) of the Code or, solely for purposes of Section 302 of ERISA and Section 412 of the Code, is treated as a single employer under Section 414 of the Code.
“ ERISA Event ” means (a) any “reportable event”, as defined in Section 4043 of ERISA or the regulations issued thereunder with respect to a Plan (other than an event for which the 30-day notice period is waived); (b) the existence with respect to any Plan of an “accumulated funding deficiency” (as defined in Section 412 of the Code or Section 302 of ERISA), whether or not waived; (c) the filing pursuant to Section 412(d) of the Code or Section 303(d) of ERISA of an application for a waiver of the minimum funding standard with respect to any Plan; (d) the incurrence by the Borrower or any of its ERISA Affiliates of any liability under Title IV of ERISA with respect to the termination of any Plan; (e) the receipt by the Borrower or any ERISA Affiliate from the PBGC or a plan administrator of any notice relating to an intention to terminate any Plan or Plans or to appoint a trustee to administer any Plan; (f) the incurrence by the Borrower or any of its ERISA Affiliates of any liability with respect to the withdrawal or partial withdrawal from any Plan or Multiemployer Plan; or (g) the receipt by the Borrower or any ERISA Affiliate of any notice, or the receipt by any Multiemployer Plan from the Borrower or any ERISA Affiliate of any notice, concerning the imposition of Withdrawal Liability or a determination that a Multiemployer Plan is, or is expected to be, insolvent or in reorganization, within the meaning of Title IV of ERISA.
“ Esmark ” has the meaning assigned to such term in the opening paragraph of this Agreement.
“ ESSG Revolving Credit Agreement ” means the Credit Agreement dated as of April 30, 2007, among the Borrower, certain subsidiaries of the Borrower, the banks and other financial institutions from time to time party thereto, General Electric Capital Corporation, as administrative agent and co-collateral agent, and the other agents named therein, as amended, supplemented or otherwise modified or on prior to the date hereof, and as otherwise modified in a manner permitted under the terms of the Intercreditor Agreement from time to time.
“ Eurodollar Rate ”: with respect to each day during each Interest Period pertaining to a Loan, the rate per annum determined on the basis of the rate for deposits in Dollars for a period equal to such Interest Period commencing on the first day of such Interest Period appearing on Page 3750 of the Telerate screen as of 11:00 A.M., London time, two Business Days prior to the beginning of such Interest Period. In the event that such rate does not appear on Page 3750 of the Telerate screen (or otherwise on such screen), the “Eurodollar Rate” shall be determined by reference to such other comparable publicly available service for displaying eurodollar rates as may be selected by the Administrative Agent
(including Page LIBO 01) or, in the absence of such availability, by reference to the rate at which JPMorgan Chase Bank, N.A. is offered Dollar deposits at or about 11:00 A.M., New York City time, two Business Days prior to the beginning of such Interest Period in the interbank eurodollar market where its eurodollar and foreign currency and exchange operations are then being conducted for delivery on the first day of such Interest Period for the number of days comprised therein.
“ Event of Default ” has the meaning assigned to such term in Article VII.
“ Federal Funds Effective Rate ”: for any day, the weighted average of the rates on overnight federal funds transactions with members of the Federal Reserve System arranged by federal funds brokers, as published on the next succeeding Business Day by the Federal Reserve Bank of New York, or, if such rate is not so published for any day that is a Business Day, the average of the quotations for the day of such transactions received by JPMorgan Chase Bank, N.A. from three federal funds brokers of recognized standing selected by it.
“ Financial Officer ” means the chief financial officer, principal accounting officer, vice president of finance, treasurer or controller of the Borrower.
“ Foreign Subsidiary ” means any Subsidiary that is not a Domestic Subsidiary.
“ Funding Office ”: the office of the Administrative Agent specified in Section 9.2 or such other office as may be specified from time to time by the Administrative Agent as its funding office by written notice to the Borrower.
“ GAAP ” means generally accepted accounting principles in the United States of America.
“ Governmental Authority ” means the government of the United States of America, any other nation or any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government.
“ Group Members ”: the collective reference to Holdings, the Borrower and their respective Subsidiaries.
“ Guarantee ” of or by any Person (the “ guarantor ”) means any obligation, contingent or otherwise, of the guarantor guaranteeing or having the economic effect of guaranteeing any Indebtedness or other obligation of any other Person (the “ primary obligor ”) in any manner, whether directly or indirectly, and including any obligation of the guarantor, direct or indirect, (a) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or other obligation or to purchase (or to advance or supply funds for the purchase of) any security for the payment thereof, (b) to purchase or lease property, securities or services for the purpose of assuring the owner of such Indebtedness or other obligation of the payment thereof, (c) to maintain working capital, equity capital or any other financial statement condition or liquidity of the primary obligor so as to enable the primary obligor to pay such Indebtedness or other obligation or (d) as an account party in respect of any letter of credit or letter of guaranty issued to support such Indebtedness or obligation; provided that the term Guarantee shall not include endorsements for collection or deposit in the ordinary course of business.
“ Guaranteed Obligations ” has the meaning assigned to such term in Section 10.01.
“ Hazardous Materials ” means all explosive or radioactive substances or wastes and all hazardous or toxic substances, wastes or other pollutants, including petroleum or petroleum distillates, asbestos or asbestos containing materials, polychlorinated biphenyls, radon gas, infectious or medical wastes and all other substances or wastes of any nature regulated pursuant to any Environmental Law.
“ Intercreditor Agreement ” means the Intercreditor, Lien Priority and Access Agreement, dated as of May 2, 2008, among the Borrower, Sun Steel Company LLC, Electric Coating Technologies LLC, Great Western Steel Company LLC, Century Steel Company LLC, Electric Coating Technologies Bridgeview LLC, U.S. Metals Supply LLC, Miami Valley Steel Service, Inc., Premier Resource Group LLC, Independent Steel Company LLC, the other Subsidiaries of Esmark party thereto, the Administrative Agent and General Electric Capital Corporation as agent for the lenders under the Borrower’s existing revolving credit facility.
“ Indebtedness ” of any Person means, without duplication, (a) all obligations of such Person for borrowed money or with respect to deposits or advances of any kind, (b) all obligations of such Person evidenced by bonds, debentures, notes or similar instruments, (c) all obligations of such Person upon which interest charges are customarily paid (excluding accounts payable in the ordinary course of business), (d) all obligations of such Person under conditional sale or other title retention agreements relating to property acquired by such Person, (e) all obligations of such Person in respect of the deferred purchase price of property or services (excluding current accounts payable incurred in the ordinary course of business), (f) all Indebtedness of others secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien on property owned or acquired by such Person, whether or not the Indebtedness secured thereby has been assumed, (g) all Guarantees by such Person of Indebtedness of others, (h) all Capital Lease Obligations of such Person (other than the Power Service Agreement Accounting Lease), (i) all obligations, contingent or otherwise, of such Person as an account party in respect of letters of credit and letters of guaranty, (j) all obligations, contingent or otherwise, of such Person in respect of bankers’ acceptances, (k) obligations under any liquidated earn-out and (l) all other Off-Balance Sheet Liabilities. The Indebtedness of any Person shall include the Indebtedness of any other entity (including any partnership in which such Person is a general partner) to the extent such Person is liable therefor as a result of such Person’s ownership interest in or other relationship with such entity, except to the extent the terms of such Indebtedness provide that such Person is not liable therefor.
“ Index Debt ” means senior, unsecured, long-term indebtedness for borrowed money of Esmark that is not guaranteed by any other Person or subject to any other credit enhancement.
“ Interest Payment Date ” means, as to any Loan, the last day of the Interest Period for such Loan and the date of any repayment or prepayment made in respect thereof.
“ Interest Period ” means, as to any Loan, (a) initially, the period commencing on the Effective Date and ending three months thereafter; and (b) thereafter, each period commencing on the last day of the immediately preceding Interest Period applicable to such Loan and ending three months thereafter; provided that, all of the foregoing provisions relating to Interest Periods are subject to the following:
(i) if any Interest Period would otherwise end on a day that is not a Business Day, such Interest Period shall be extended to the next succeeding Business Day unless the result of such extension would be to carry such Interest Period into another calendar month in which event such Interest Period shall end on the immediately preceding Business Day; and
(ii) any Interest Period that begins on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period) shall end on the last Business Day of a calendar month.
“ Joinder Agreement ” has the meaning assigned to such term in Section 5.13.
“ Lenders ” means initially, Essar Steel Holdings Limited and thereafter, any other Person that shall have become a party hereto pursuant to an Assignment and Assumption, other than any such Person that ceases to be a party hereto pursuant to an Assignment and Assumption.
“ Lien ” means, with respect to any asset, (a) any mortgage, deed of trust, lien, pledge, hypothecation, encumbrance, charge, option, claim, violation, lease, license, servient easement, reversion, reverter, preferential arrangement, restrictive covenant, adverse right or security interest in, on or of such asset, (b) the interest of a vendor or a lessor under any conditional sale agreement, capital lease or title retention agreement (or any financing lease having substantially the same economic effect as any of the foregoing) relating to such asset and (c) in the case of securities, any purchase option, call or similar right of a third party with respect to such securities.
“ Loan Documents ” means this Agreement, any promissory notes issued pursuant to the Agreement, the Collateral Documents, the Loan Guaranty and all other agreements, instruments, documents and certificates identified in Section 4.01 executed and delivered to, or in favor of, the Administrative Agent or any Lenders and all other perfection certificates, pledges, powers of attorney, consents, assignments, contracts, notices, letter of credit agreements and all other written matter whether heretofore, now or hereafter executed by or on behalf of any Loan Party, or any employee of any Loan Party, and delivered to the Administrative Agent or any Lender in connection with the Agreement or the transactions contemplated thereby. Any reference in the Agreement or any other Loan Document to a Loan Document shall include all appendices, exhibits or schedules thereto, and all amendments, restatements, supplements or other modifications thereto, and shall refer to the Agreement or such Loan Document as the same may be in effect at any and all times such reference becomes operative.
“ Loan Guarantor ” means Esmark and each Loan Party (other than the Borrower).
“ Loan Guaranty ” means, collectively, Article X of this Agreement, and each separate Guarantee, in form and substance satisfactory to the Administrative Agent, delivered by each Loan Guarantor that is a Foreign Subsidiary (which Guarantee shall be governed by the laws of the country in which such Foreign Subsidiary is located), as it may be amended or modified and in effect from time to time.
“ Loan Parties ” means, collectively, the Borrower, the Borrower’s Domestic Subsidiaries and any other Person who becomes a party to this Agreement pursuant to a Joinder Agreement and their successors and assigns; provided , however , that for the purposes of Article VII of this Agreement only, the terms “Loan Party” and “Loan Parties” shall include Esmark.
“ Loans ” has the meaning assigned to such term in Section 2.1.
“ Material Adverse Effect ” means a material adverse effect on (a) the business, assets, operations, performance, prospects or condition, financial or otherwise, of Esmark and its Subsidiaries taken as a whole, (b) the ability of any Loan Party to perform any of its obligations under the Loan Documents to which it is a party, (c) the Collateral, or the Administrative Agent’s Liens (on behalf of itself and the Secured Creditors) on the Collateral or the priority of such Liens, or (d) the rights of or benefits available to the Administrative Agent or the Lenders thereunder.
“ Material Indebtedness ” means Indebtedness (other than the Loan), or obligations in respect of one or more Swap Agreements, of any one or more of Esmark and the Loan Parties in an aggregate principal amount exceeding $2,000,000. For purposes of determining Material Indebtedness,
the “obligations” of Esmark or any Loan Party in respect of any Swap Agreement at any time shall be the maximum aggregate amount (giving effect to any netting agreements) that Esmark or such Loan Party would be required to pay if such Swap Agreement were terminated at such time.
“ Maturity Date ” means the earlier of (i) the fifteenth day following the Merger (as defined in the Purchase Agreement) and (ii) June 1, 2009.
“ Maximum Liability ” has the meaning assigned to such term in Section 10.10.
“ Moody’s ” means Moody’s Investors Service, Inc.
“ Mortgage Policies ” has the meaning assigned to such term in Section 5.14(b)(ii).
“ Mortgaged Properties ” has the meaning assigned to such term in Section 4.01(a)(vi).
“ Mortgages ” has the meaning assigned to such term in Section 4.01(a)(vi).
“ Multiemployer Plan ” means a multiemployer plan as defined in Section 4001(a)(3) of ERISA.
“ Multiple Employer Plan ” means a Single Employer Plan that (a) is maintained for employees of the Borrower or any Commonly Controlled Entity and at least one Person other than the Borrower and its Commonly Controlled Entities or (b) was so maintained and in respect of which the Borrower or any Commonly Controlled Entity could have liability under Section 4064 or 4069 of ERISA in the event such plan has been or were to be terminated.
“ Net Proceeds ” means, with respect to any event, (a) the cash proceeds received in respect of such event including (i) any cash received in respect of any non-cash proceeds (including any cash payments received by way of deferred payment of principal pursuant to a note or installment receivable or purchase price adjustment receivable or otherwise, but excluding any interest payments), but only as and when received, (ii) in the case of a casualty, insurance proceeds and (iii) in the case of a condemnation or similar event, condemnation awards and similar payments, net of (b) the sum of (i) all reasonable fees and out-of-pocket expenses paid to third parties (other than Affiliates) in connection with such event, (ii) in the case of a sale, transfer or other disposition of an asset (including pursuant to a sale and leaseback transaction or a casualty or a condemnation or similar proceeding), the amount of all payments required to be made as a result of such event to repay Indebtedness (other than Loans) secured by such asset or otherwise subject to mandatory prepayment as a result of such event and (iii) the amount of all taxes paid (or reasonably estimated to be payable) and the amount of any reserves established to fund contingent liabilities reasonably estimated to be payable, in each case during the year that such event occurred or the next succeeding year and that are directly attributable to such event (as determined reasonably and in good faith by a Financial Officer).
“ Non-Excluded Taxes ” has the meaning assigned to such term in Section 2.10(a).
“ Non-U.S. Lender ” has the meaning assigned to such term in Section 2.10(d).
“ Obligated Party ” has the meaning assigned to such term in Section 10.02.
“ Obligations ” means all unpaid principal of and accrued and unpaid interest on the Loans, all accrued and unpaid fees and all expenses, reimbursements, indemnities and other obligations of the Loan Parties to the Lenders or to any Lender, the Administrative Agent or any indemnified party arising under the Loan Documents.
“ Off-Balance Sheet Liabilities ” of a Person means (a) any repurchase obligation or liability of such Person with respect to accounts or notes receivable sold by such Person, (b) any indebtedness, liability or obligation under any so-called “synthetic lease” transaction entered into by such Person, or (c) any indebtedness, liability or obligation arising with respect to any other transaction which is the functional equivalent of or takes the place of borrowing but which does not constitute a liability on the balance sheets of such Person (other than operating leases).
“ Other ERISA Event ” means (a) the application for a minimum funding waiver with respect to a Plan; (b) the cessation of operations at a facility of the Borrower or any Commonly Controlled Entity in the circumstances described in Section 4062(e) of ERISA; (c) the conditions for imposition of a lien under Section 303(k) of ERISA shall have been met with respect to any Plan; (d) a determination that any Plan is in “at risk” status (within the meaning of Section 303 of ERISA); (e) the institution by the PBGC of proceedings to terminate a Plan pursuant to Section 4042 of ERISA, or the occurrence of any event or condition described in Section 4042 of ERISA that constitutes grounds for the termination of, or the appointment of a trustee to administer, such Plan; or (f) the withdrawal by the Borrower or any Commonly Controlled Entity from a Multiple Employer Plan during a plan year for which it was a substantial employer, as defined in Section 4001(a)(2) of ERISA.
“ Other Taxes ” means any and all present or future stamp or documentary Taxes or any other excise or property Taxes or other similar Taxes arising from any payment made hereunder or from the execution, delivery or enforcement of, or otherwise with respect to, this Agreement or any other Loan Document.
“ PBGC ” means the Pension Benefit Guaranty Corporation referred to and defined in ERISA and any successor entity performing similar functions.
“ Permitted Encumbrances ” means:
(a) Liens imposed by law for taxes that are not yet due or are being contested in compliance with Section 5.04;
(b) carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s and other like Liens imposed by law, arising in the ordinary course of business and securing obligations that are not overdue by more than 30 days or are being contested in compliance with Section 5.04;
(c) pledges and deposits made in the ordinary course of business in compliance with workers’ compensation, unemployment insurance and other social security laws or regulations;
(d) deposits to secure the performance of bids, trade contracts, leases, statutory obligations, surety and appeal bonds, performance bonds and other obligations of a like nature, in each case in the ordinary course of business;
(e) judgment liens in respect of judgments that do not constitute an Event of Default under clause (k) of Article VII;
(f) easements, zoning restrictions, rights-of-way and similar encumbrances on real property imposed by law or arising in the ordinary course of business that do not secure any monetary obligations and do not materially detract from the value of the affected property or interfere with the ordinary conduct of business of the Borrower or any Subsidiary;
(g) statutory landlord’s Liens under leases under which Esmark or any of its Subsidiaries is a tenant or other Liens on leased property reserved in leases thereof for rent; and
(h) liens referred to in the Intercreditor Agreement.
provided that except for clause (h), the term “Permitted Encumbrances” shall not include any Lien securing Indebtedness.
“ Permitted Investments ” means:
(a) direct obligations of, or obligations the principal of and interest on which are unconditionally guaranteed by, the United States of America (or by any agency thereof to the extent such obligations are backed by the full faith and credit of the United States of America), in each case maturing within one year from the date of acquisition thereof;
(b) investments in commercial paper maturing within 270 days from the date of acquisition thereof and having, at such date of acquisition, the highest credit rating obtainable from S&P or from Moody’s;
(c) investments in certificates of deposit, banker’s acceptances and time deposits maturing within 180 days from the date of acquisition thereof issued or guaranteed by or placed with, and money market deposit accounts issued or offered by, any domestic office of any commercial bank organized under the laws of the United States of America or any State thereof which has a combined capital and surplus and undivided profits of not less than $250,000,000;
(d) fully collateralized repurchase agreements with a term of not more than 30 days for securities described in clause (a) above and entered into with a financial institution satisfying the criteria described in clause (c) above; and
(e) money market funds that (i) comply with the criteria set forth in Securities and Exchange Commission Rule 2a-7 under the Investment Company Act of 1940, (ii) are rated AAA by S&P and Aaa by Moody’s and (iii) have portfolio assets of at least $5,000,000,000.
“ Person ” means any natural person, corporation, limited liability company, trust, joint venture, association, company, partnership, Governmental Authority or other entity.
“ Plan ” means any employee pension benefit plan (other than a Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section 412 of the Code or Section 302 of ERISA, and in respect of which the Borrower or any ERISA Affiliate is (or, if such plan were terminated, would under Section 4069 of ERISA be deemed to be) an “employer” as defined in Section 3(5) of ERISA.
“ Power Service Accounting Lease ” means the Second Amended and Restated Energy Services Agreement dated July 31, 2003 between Mingo Junction Energy Center, LLC and Wheeling-Pittsburgh Steel Corporation.
“ Prepayment Premium ” means with respect to any principal amount prepaid, an amount equal to interest on such principal amount calculated for the period from the Effective Date to the date of prepayment of such principal amount at a rate equal to 6% per annum calculated on the basis of a 360-day year for the actual days elapsed. Such amount shall be in addition to interest paid or payable with respect to such principal amount under Section 2.05.
“ Purchase Agreement ” means the Agreement and Plan of Merger to be entered into by and between Esmark and the company designated therein as the purchaser, relating to a tender offer for all of the shares of capital stock of Esmark.
“ Register ” has the meaning set forth in Section 9.06.
“ Related Parties ” means, with respect to any specified Person, such Person’s Affiliates and the respective directors, officers, employees, agents and advisors of such Person and such Person’s Affiliates.
“ Required Lenders ” means, at any time, the holders of more than 50% of the aggregate unpaid principal amount of the Loans outstanding at such time.
“ Requirement of Law ” means, as to any Person, the Certificate of Incorporation and By-Laws or other organizational or governing documents of such Person, and any law, treaty, rule or regulation or determination of an arbitrator or a court or other Governmental Authority, in each case applicable to or binding upon such Person or any of its property or to which such Person or any of its property is subject.
“ Restricted Payment ” means any dividend or other distribution (whether in cash, securities or other property) with respect to any Equity Interests in Esmark or any Subsidiary, or any payment (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any such Equity Interests in Esmark or any option, warrant or other right to acquire any such Equity Interests in Esmark.
“ S&P ” means Standard & Poor’s Ratings Services, a division of The McGraw Hill Companies, Inc.
“ Secured Creditors ” means the Administrative Agent, all Lenders and their respective Affiliates to which Secured Obligations are owed by any of the Loan Parties or their Subsidiaries.
“ Secured Obligations ” has the meaning set forth in the Security Agreement.
“ Security Agreement ” means that certain Pledge and Security Agreement, dated as of the date hereof, between the Loan Parties and the Administrative Agent, for the benefit of the Administrative Agent and the Secured Creditors, and any other pledge or security agreement entered into, after the date of this Agreement by any other Loan Party (as required by this Agreement or any other Loan Document), as the same may be amended, restated or otherwise modified from time to time.
“ Single Employer Plan ” means any Plan that is covered by Title IV of ERISA, but that is not a Multiemployer Plan.
“ Subordinated Indebtedness ” of a Person means any Indebtedness of such Person the payment of which is subordinated to payment of the Obligations to the written satisfaction of the Administrative Agent in its reasonable discretion.
“ subsidiary ” means, with respect to any Person (the “ parent ”) at any date, any corporation, limited liability company, partnership, association or other entity the accounts of which would be consolidated with those of the parent in the parent’s consolidated financial statements if such financial statements were prepared in accordance with GAAP as of such date, as well as any other corporation, limited liability company, partnership, association or other entity (a) of which securities or other ownership interests representing more than 50% of the equity or more than 50% of the ordinary voting power or, in the case of a partnership, more than 50% of the general partnership interests are, as of such date, owned, controlled or held, or (b) that is, as of such date, otherwise Controlled, by the parent or one or more subsidiaries of the parent or by the parent and one or more subsidiaries of the parent.
“ Subsidiary ” means any direct or indirect subsidiary of a Loan Party, as applicable.
“ Swap Agreement ” means any agreement with respect to any swap, forward, future or derivative transaction or option or similar agreement involving, or settled by reference to, one or more rates, currencies, commodities, equity or debt instruments or securities, or economic, financial or pricing indices or measures of economic, financial or pricing risk or value or any similar transaction or any combination of these transactions; provided that no phantom stock or similar plan providing for payments only on account of services provided by current or former directors, officers, employees or consultants of the Esmark or the Subsidiaries shall be a Swap Agreement.
“ Taxes ” has the meaning set forth in Section 2.10(a).
“ Transaction Costs ” means, with respect to any transaction, any advisory or other fees, bonuses, expenses, costs, charges or other amounts paid or payable in connection with such transaction.
“ Transactions ” means the execution, delivery and performance by the Loan Parties of this Agreement and the other Loan Documents, the borrowing of Loans hereunder and the use of the proceeds thereof.
“ UCC ” means the Uniform Commercial Code as in effect from time to time in the State of Illinois or any other state the laws of which are required to be applied in connection with the issue of perfection of security interests.
“ Withdrawal Liability ” means liability to a Multiemployer Plan as a result of a complete or partial withdrawal from such Multiemployer Plan, as such terms are defined in Part I of Subtitle E of Title IV of ERISA.
“ WPC ” means Wheeling-Pittsburgh Corporation, a Delaware corporation.
“ WPC Revolving Credit Agrement ” means the Amended and Restated Revolving Loan Agreement dated as of July 8, 2005 among Holdings, the Borrower, the banks and other financial institutions from time to time party thereto, General Electric Capital Corporation, as administrative agent, General Electric Capital Corporation, as inventory and receivables security agent, and the other agents named therein.
“ WPC Security Agreement ” means the Security Agreement, dated as of July 31, 2003, among WPC, Wheeling-Pittsburgh Steel Corporation, Royal Bank of Canada, as administrative agent for the lenders and certain other state and federal guarantors under the WPC Term Loan Agreement, The Bank of New York Trust Company, as trustee under the Series A Indenture referred to therein, General Electric Capital Corporation, as agent for the lenders under the WPC Revolving Credit Agreement, The Bank of New York Trust Company, as trustee under the Series B Indenture referred to therein, and Wilmington Trust Company, as collateral agent.
“ WPC Term Loan Agreement ” means the Amended and Restated Term Loan Agreement dated as of the date hereof among WPC, Wheeling-Pittsburgh Steel Corporation, as borrower, the lenders from time to time party thereto and Essar Steel Holdings Limited, as administrative agent.
Section 1.02. Terms Generally . The definitions of terms herein shall apply equally to 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”. The word “will” shall be construed to have the same meaning and effect as the word “shall”. Unless the context requires otherwise (a) any definition of or reference to any agreement, instrument or other document herein shall be construed as referring to such agreement, instrument or other document as from time to time amended, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth herein), (b) any reference herein to any Person shall be construed to include such Person’s successors and assigns to the extent permitted hereunder, (c) the words “herein”, “hereof” and “hereunder”, and words of similar import, shall be construed to refer to this Agreement in its entirety and not to any particular provision hereof, (d) all references herein to Articles, Sections, Exhibits and Schedules shall be construed to refer to Articles and Sections of, and Exhibits and Schedules to, this Agreement and (e) the words “asset” and “property” shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash, securities, accounts and contract rights.
Section 1.03. Accounting Terms; GAAP . Except as otherwise expressly provided herein, all terms of an accounting or financial nature shall be construed in accordance with GAAP, as in effect from time to time; provided that, if the Borrower notifies the Administrative Agent that the Borrower requests an amendment to any provision hereof to eliminate the effect of any change occurring after the date hereof in GAAP or in the application thereof on the operation of such provision (or if the Administrative Agent notifies the Borrower that the Required Lenders request an amendment to any provision hereof for such purpose), regardless of whether any such notice is given before or after such change in GAAP or in the application thereof, then such provision shall be interpreted on the basis of GAAP as in effect and applied immediately before such change shall have become effective until such notice shall have been withdrawn or such provision amended in accordance herewith.
Section 2.01. Commitment. Subject to the terms and conditions set forth herein, the Lenders agree to make a single advance to the Borrower on any Business Day during the period from the Effective Date until June 30, 2008, in an aggregate principal amount of $31,000,000 (the “Loans”). The amount borrowed under this Section 2.01 and repaid or prepaid may not be reborrowed.
Section 2.02. Repayment of Loans . On the Maturity Date, the Borrower shall repay to the Lenders the entire unpaid principal amount of the Loans.
Section 2.03. Optional Prepayments . The Borrower may at any time and from time to time prepay the Loans, in whole or in part, together with the Prepayment Premium upon irrevocable notice delivered to the Administrative Agent no later than 2:00 P.M., New York City time, three Business Days prior thereto, which notice shall specify the date and amount of prepayment; provided, that if a Loan
is prepaid on any day other than the last day of the Interest Period applicable thereto, the Borrower shall also pay any amounts owing pursuant to Section 2.11. If any such notice is given, the amount specified in such notice shall be due and payable on the date specified therein, together with accrued interest and the Prepayment Premium to such date on the amount prepaid. Partial prepayments of Loans shall be in an aggregate principal amount of $1,000,000 or a whole multiple thereof.
Section 2.04. Mandatory Prepayments . (a) If a Change of Control shall occur, the aggregate outstanding amount of the Loans shall be repaid in full on the date of such Change of Control, together with the amounts set forth in Section 2.04(b); provided that if the Administrative Agent shall have provided the Borrower and Esmark with a Conversion Exercise Notice prior to the date of such payment pursuant to Section 9.15 hereof, then the aggregate amount of principal, interest and any other amounts outstanding hereunder payable with respect to such Change of Control under this Section 2.04(a) shall be reduced by an amount up to the Conversion Amount (as defined in Section 9.15) as specified in such Conversion Exercise Notice. If Esmark fails to issue common stock to the Administrative Agent as and when required under Section 9.15, then the amount specified in such Conversion Exercise Notice shall be immediately due and payable to the Administrative Agent by the Borrower.
(b) Amounts to be applied in connection with prepayments made pursuant to this Section 2.04 shall be applied in accordance with Section 2.08. Each prepayment of the Loans under Section 2.04 shall be accompanied by accrued interest and the Prepayment Premium to the date of such prepayment on the amount prepaid; provided, that if a Loan is prepaid on any day other than the last day of the Interest Period applicable thereto, the Borrower shall also pay any amounts owing pursuant to Section 2.11.
Section 2.05. Interest Rates and Payment Dates . (a) After the Effective Date, the Loans shall bear interest for each day during each Interest Period with respect thereto at a rate per annum equal to the Eurodollar Rate plus the Applicable Margin.
(b) Interest shall be payable in arrears on each Interest Payment Date.
(c) If all or a portion of the principal amount of any Loan shall not be paid when due (whether at the stated maturity, by acceleration or otherwise) such overdue amount shall bear interest at the rate determined in accordance with paragraphs (a) and (b) above until such principal amount is paid in full. If all or a portion of any interest payable on any Loan or any other amount payable hereunder shall not be paid when due (whether at the stated maturity, or acceleration or otherwise), such overdue amount shall bear interest at a rate per annum equal to the amount specified in paragraph (a) above plus 2%.
Section 2.06. Computation of Interest and Fees . (a) Interest and fees payable pursuant hereto shall be calculated on the basis of a 360-day year for the actual days elapsed. The Administrative Agent shall as soon as practicable notify the Borrower of each determination of a Eurodollar Rate.
(b) Each determination of an interest rate by the Administrative Agent pursuant to any provision of this Agreement shall be conclusive and binding on the Borrower and the Lenders in the absence of manifest error. The Administrative Agent shall, at the request of the Borrower, deliver to the Borrower a statement showing the quotations used by the Administrative Agent in determining any interest rate pursuant to Section 2.06(a).
Section 2.07. Inability to Determine Interest Rate . If prior to the first day of any Interest Period:
(a) the Administrative Agent shall have determined (which determination shall be conclusive and binding upon the Borrower) that, by reason of circumstances affecting the relevant market, adequate and reasonable means do not exist for ascertaining the Eurodollar Rate for such Interest Period, or
(b) the Administrative Agent shall have received notice from the Required Lenders that the Eurodollar Rate determined or to be determined for such Interest Period will not adequately and fairly reflect the cost to such Lenders (as conclusively certified by such Lenders) of making or maintaining their affected Loans during such Interest Period, then the Administrative Agent shall give telecopy or telephonic notice thereof to the Borrower as soon as practicable thereafter. If such notice is given on the first day of such Interest Period the Loans shall bear interest at a rate per annum equal to ABR plus 3%.
Section 2.08. Pro Rata Treatment and Payments . All payments (including prepayments) to be made by the Borrower hereunder, whether on account of principal, interest, fees or otherwise, shall be made without setoff or counterclaim and shall be made prior to 2:00 p.m., New York City time, on the due date thereof to the Administrative Agent, for the account of the Lenders, at the Funding Office, in dollars and in immediately available funds. The Administrative Agent shall distribute such payments to the Lenders promptly upon receipt in like funds as received. If any payment hereunder (other than payments on the Loans) becomes due and payable on a day other than a Business Day, such payment shall be extended to the next succeeding Business Day. If any payment on a Loan becomes due and payable on a day other than a Business Day, the maturity thereof shall be extended to the next succeeding Business Day unless the result of such extension would be to extend such payment into another calendar month, in which event such payment shall be made on the immediately preceding Business Day. In the case of any extension of any payment of principal pursuant to the preceding two sentences, interest thereon shall be payable at the then applicable rate during such extension.
Section 2.09. Requirements of Law . (a) If the adoption of or any change in any Requirement of Law or in the interpretation or application thereof or compliance by any Lender with any request or directive (whether or not having the force of law) from any central bank or other Governmental Authority made subsequent to the date hereof:
(i) shall subject any Lender to any Tax of any kind whatsoever with respect to this Agreement or any Loan made by it, or change the basis of taxation of payments to such Lender in respect thereof (except for Non-Excluded Taxes covered by Section 2.10 and changes in the rate of Tax on the overall net income of such Lender);
(ii) shall impose, modify or hold applicable any reserve, special deposit, compulsory loan or similar requirement against assets held by, deposits or other liabilities in or for the account of, advances, loans or other extensions of credit by, or any other acquisition of funds by, any office of such Lender that is not otherwise included in the determination of the Eurodollar Rate; or
(iii) shall impose on such Lender any other condition; and the result of any of the foregoing is to increase the cost to such Lender, by an amount that such Lender deems to be material, of making, converting into, continuing or maintaining Loans, or to reduce any amount receivable hereunder in respect thereof, then, in any such case, the Borrower shall promptly pay such Lender, upon its demand, any additional amounts necessary to compensate such Lender for such increased cost or reduced amount receivable. If any Lender becomes entitled to claim any additional amounts pursuant to this paragraph, it shall promptly notify the Borrower (with a copy to the Administrative Agent) of the event by reason of which it has become so entitled.
(b) If any Lender shall have determined that the adoption of or any change in any Requirement of Law regarding capital adequacy or in the interpretation or application thereof or compliance by such Lender or any corporation controlling such Lender with any request or directive regarding capital adequacy (whether or not having the force of law) from any Governmental Authority made subsequent to the date hereof shall have the effect of reducing the rate of return on such Lender’s or such corporation’s capital as a consequence of its obligations hereunder to a level below that which such Lender or such corporation could have achieved but for such adoption, change or compliance (taking into consideration such Lender’s or such corporation’s policies with respect to capital adequacy) by an amount deemed by such Lender to be material, then from time to time, after submission by such Lender to the Borrower (with a copy to the Administrative Agent) of a written request therefor, the Borrower shall pay to such Lender such additional amount or amounts as will compensate such Lender or such corporation for such reduction.
(c) A certificate as to any additional amounts payable pursuant to this Section submitted by any Lender to the Borrower (with a copy to the Administrative Agent) shall be conclusive in the absence of manifest error. Notwithstanding anything to the contrary in this Section 2.09, the Borrower shall not be required to compensate a Lender pursuant to this Section 2.09 for any amounts incurred more than six months prior to the date that such Lender notifies the Borrower of such Lender’s intention to claim compensation therefor; provided that, if the circumstances giving rise to such claim have a retroactive effect, then such six-month period shall be extended to include the period of such retroactive effect. The obligations of the Borrower pursuant to this Section shall survive the termination of this Agreement and the payment of the Loans and all other amounts payable hereunder.
(d) Notwithstanding anything to the contrary contained herein, if the introduction of or any change in any law or regulation (or any change in the interpretation thereof) shall make it unlawful, or any central bank or other Governmental Authority shall assert that it is unlawful, for any Lender to agree to make or to make or to continue to fund or maintain any Loan, then on notice thereof and demand therefor by such Lender to Borrower made through the Administrative Agent, (i) the obligation of such Lender to agree to make or to make or to continue to fund or maintain Loans shall terminate and (ii) Borrower shall pay or convert in full all outstanding Loans owing to such Lender at the end of the applicable Interest Period (provided that if such Lender reasonably believes that it would be unlawful or that any central bank or other Governmental Authority would assert that it is unlawful to maintain such outstanding Loans, Borrower shall forthwith prepay in full all outstanding Loans owing to such Lender, together with interest accrued thereon).
Section 2.10. Taxes. (a) All payments made by the Borrower under this Agreement shall be made free and clear of, and without deduction or withholding for or on account of, any present or future income, stamp or other taxes, levies, imposts, duties, charges, fees, deductions or withholdings (“Taxes”), now or hereafter imposed, levied, collected, withheld or assessed by any Governmental Authority, excluding net income taxes and franchise taxes (imposed in lieu of net income taxes) imposed on the Administrative Agent or any Lender by the jurisdiction of its incorporation or its lending office for this Loan or any political subdivision or taxing authority thereof or therein. If any such non-excluded taxes, levies, imposts, duties, charges, fees, deductions or withholdings (“Non-Excluded Taxes”) or Other Taxes are required to be withheld from any amounts payable to the Administrative Agent or any Lender hereunder, the amounts so payable to the Administrative Agent or such Lender shall be increased to the extent necessary to yield to the Administrative Agent or such Lender (after payment of all Non-Excluded Taxes and Other Taxes) interest or any such other amounts payable hereunder at the rates or in the amounts specified in this Agreement, provided, however, that the Borrower shall not be required to increase any such amounts payable to any Lender with respect to any Non-Excluded Taxes (i) that are attributable to such Lender’s failure to comply with the requirements of paragraph (d) of this Section or (ii) that are United States withholding taxes imposed on amounts payable to such Lender at the time such
Lender becomes a party to this Agreement, except to the extent that such Lender’s assignor (if any) was entitled, at the time of assignment, to receive additional amounts from the Borrower with respect to such Non-Excluded Taxes pursuant to this paragraph.
(b) The Borrower shall timely pay any Non-Excluded Taxes or Other Taxes to the relevant Governmental Authority in accordance with applicable law.
(c) Whenever any Non-Excluded Taxes or Other Taxes are payable by the Borrower, as promptly as possible thereafter the Borrower shall send to the Administrative Agent for its own account or for the account of the relevant Lender, as the case may be, a certified copy of an original official receipt received by the Borrower (or other documentary evidence reasonably satisfactory to the Administrative Agent) showing payment thereof. The Borrower shall indemnify the Administrative Agent and the Lenders for such Non-Excluded Taxes or Other Taxes (to the extent paid by the Administrative Agent or the Lenders) and any incremental Taxes, interest or penalties that are due and payable by the Administrative Agent or any Lender as a result of any failure to pay any Non-Excluded Taxes or Other Taxes when due to the appropriate taxing authority or failure to remit to the Administrative Agent the required receipts or other required documentary evidence. Such indemnification shall be made within 30 days from the date the Administrative Agent or such Lender makes written demand therefor.
(d) Each Lender (or Transferee) that is a “U.S. Person” as defined in Section 7701(a)(30) of the Code shall deliver to the Borrower and the Administrative Agent (or, in the case of a Participant, to the Lender from which the related participation shall have been purchased) two copies of U.S. Internal Revenue Service Form W-9 (i) on or before the date on which it becomes a party to this Agreement (or, in the case of any Participant, on or before the date such Participant purchases the related participation) and (ii) upon the reasonable request of the Borrower. Each Lender (or Transferee) that is not a “U.S. Person” as defined in Section 7701(a)(30) of the Code (a “Non-U.S. Lender”) shall deliver to the Borrower and the Administrative Agent (or, in the case of a Participant, to the Lender from which the related participation shall have been purchased) two copies of either U.S. Internal Revenue Service Form W-8BEN or Form W-8ECI, or, in the case of a Non-U.S. Lender claiming exemption from U.S. federal withholding tax under Section 871(h) or 881(c) of the Code with respect to payments of “portfolio interest”, a statement substantially in the form of Exhibit D and a Form W-8BEN, or any subsequent versions thereof or successors thereto, properly completed and duly executed by such Non-U.S. Lender claiming exemption from, or reduction of, U.S. federal withholding tax on payments by the Borrower under this Agreement and the other Loan Documents. Such forms shall be delivered by each Non-U.S. Lender on or before the date it becomes a party to this Agreement (or, in the case of any Participant, on or before the date such Participant purchases the related participation). In addition, each Non-U.S. Lender shall deliver such forms promptly upon the reasonable request of the Borrower as a result of the obsolescence or invalidity of any form previously delivered by such Non-U.S. Lender. Notwithstanding any other provision of this paragraph, a Non-U.S. Lender shall not be required to deliver any form pursuant to this paragraph that such Non-U.S. Lender is not legally able to deliver. In accordance with applicable Treasury regulations, the Borrower may rely on the accuracy of the forms provided by a Non-U.S. Lender under this Section 2.10(d) absent actual knowledge or reason to know otherwise.
(e) If the Administrative Agent or any Lender determines, in its sole discretion, that it has received a refund of any Non-Excluded Taxes or Other Taxes as to which it has been indemnified by the Borrower or with respect to which the Borrower has paid additional amounts pursuant to this Section 2.10, it shall pay over such refund to the Borrower (but only to the extent of indemnity payments made, or additional amounts paid, by the Borrower under this Section 2.10 with respect to the Non-Excluded Taxes or Other Taxes giving rise to such refund), net of all out-of-pocket
expenses of the Administrative Agent or such Lender and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund); provided, that the Borrower, upon the request of the Administrative Agent or such Lender, agrees to repay the amount paid over to the Borrower (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) to the Administrative Agent or such Lender in the event the Administrative Agent or such Lender is required to repay such refund to such Governmental Authority. This paragraph shall not be construed to require the Administrative Agent or any Lender to make available its tax returns (or any other information relating to its taxes which it deems confidential) to the Borrower or any other Person.
(f) The agreements in this Section shall survive the termination of this Agreement and the payment of the Loans and all other amounts payable hereunder.
Section 2.11. Indemnity . The Borrower agrees to indemnify each Lender for, and to hold each Lender harmless from, any loss or expense that such Lender may sustain or incur as a consequence of (a) default by the Borrower in making a borrowing of, conversion into or continuation of Loans after the Borrower has given a notice requesting the same in accordance with the provisions of this Agreement, (b) default by the Borrower in making any prepayment of or conversion from Loans after the Borrower has given a notice thereof in accordance with the provisions of this Agreement or (c) the making of a prepayment of Loans on a day that is not the last day of an Interest Period with respect thereto. Such indemnification may include an amount equal to the excess, if any, of (i) the amount of interest that would have accrued on the amount so prepaid, or not so borrowed, converted or continued, for the period from the date of such prepayment or of such failure to borrow, convert or continue to the last day of such Interest Period (or, in the case of a failure to borrow, convert or continue, the Interest Period that would have commenced on the date of such failure) in each case at the applicable rate of interest for such Loans provided for herein (excluding, however, the Applicable Margin included therein, if any), over (ii) the amount of interest (as reasonably determined by such Lender) that would have accrued to such Lender on such amount by placing such amount on deposit for a comparable period with leading banks in the interbank eurodollar market. A certificate as to any amounts payable pursuant to this Section submitted to the Borrower by any Lender shall be conclusive in the absence of manifest error. This covenant shall survive the termination of this Agreement and the payment of the Loans and all other amounts payable hereunder.
Section 2.12. Change of Lending Office . Each Lender agrees that, upon the occurrence of any event giving rise to the operation of Section 2.09 or 2.10(a) with respect to such Lender, it will, if requested by the Borrower, use reasonable efforts (subject to overall policy considerations of such Lender) to designate another lending office for any Loans affected by such event with the object of avoiding the consequences of such event; provided that such designation is made on terms that, in the sole judgment of such Lender, cause such Lender and its lending office(s) to suffer no economic, legal, regulatory or other disadvantage, and provided, further, that nothing in this Section shall affect or postpone any of the obligations of the Borrower or the rights of any Lender pursuant to Section 2.09 or 2.10(a).
Representations and Warranties
Each Loan Party represents and warrants to the Lenders that:
Section 3.01. Organization; Powers . Each of the Loan Parties and each of its Subsidiaries is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization, has all requisite power and authority to carry on its business as now conducted and, except where the failure to do so, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect, is qualified to do business in, and is in good standing in, every jurisdiction where such qualification is required.
Section 3.02. Authorization; Enforceability . The Transactions are within each Loan Party’s organizational powers and have been duly authorized by all necessary organizational actions and, if required, actions by equity holders. The Loan Documents to which each Loan Party is a party have been duly executed and delivered by such Loan Party and constitute a legal, valid and binding obligation of such Loan Party, enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors’ rights generally and subject to general principles of equity, regardless of whether considered in a proceeding in equity or at law.
Section 3.03. Governmental Approvals; No Conflicts . The Transactions (a) do not require any consent or approval of, registration or filing with, or any other action by, any Governmental Authority, except such as have been obtained or made and are in full force and effect and except for filings necessary to perfect Liens created pursuant to the Loan Documents, (b) will not violate any material Requirement of Law applicable to any Loan Party or any of its Subsidiaries, (c) will not violate or result in a material default under any material indenture, agreement or other instrument binding upon any Loan Party or any of its Subsidiaries or its assets, or give rise to a right thereunder to require any payment to be made by any Loan Party or any of its Subsidiaries, and (d) will not result in the creation or imposition of any Lien on any asset of any Loan Party or any of its Subsidiaries, except Liens created pursuant to the Loan Documents.
Section 3.04. Financial Condition; No Material Adverse Change . (a) The unaudited consolidated balance sheet of Esmark as at December 31, 2007, and the related unaudited consolidated statements of income and cash flows for the twelve-month period ended on such date, present fairly the consolidated financial condition of Esmark and its subsidiaries as at such date, and the consolidated results of its operations and its consolidated cash flows for the twelve-month period then ended (subject to normal year-end audit adjustments). All such financial statements, including the related schedules and notes thereto, have been prepared in accordance with GAAP applied consistently throughout the periods involved (except as disclosed therein). Such financial statements present fairly, in all material respects, the financial position and results of operations and cash flows of Esmark and its consolidated subsidiaries as of such dates and for such periods in accordance with GAAP, subject to year-end audit adjustments and the absence of footnotes.
(b) No event, change or condition has occurred that has had, or could reasonably be expected to have, a Material Adverse Effect, since December 31, 2007.
Section 3.05. Properties . (a) As of the date of this Agreement, Schedule 3.05 sets forth the address of each parcel of real property that is owned or leased by each Loan Party. Each of such leases and subleases is valid and enforceable in accordance with its terms and is in full force and effect, and no material default by any party to any such lease or sublease exists. Each of the Loan Parties and its Subsidiaries has good and indefeasible title to, or valid leasehold interests in, all its real and personal property, free of all Liens other than those permitted by Section 6.02.
(b) Each Loan Party and its Subsidiaries owns, or is licensed to use, all trademarks, trade names, copyrights, patents and other intellectual property necessary to its business as currently conducted, a correct and complete list of which, as of the date of this Agreement, is set forth on Schedule 3.05 , and the use thereof by the Loan Parties and its Subsidiaries does not infringe in any material respect upon the rights of any other Person.
Section 3.06. Litigation and Environmental Matters . (a) There are no actions, suits or proceedings by or before any arbitrator or Governmental Authority pending against or, to the knowledge of any Loan Party, threatened against or affecting the Loan Parties or any of their Subsidiaries (i) as to which there is a reasonable possibility of an adverse determination and that, if adversely determined, could reasonably be expected, individually or in the aggregate, to result in a Material Adverse Effect or (ii) that involve this Agreement or the Transactions.
(b) (i) No Loan Party nor any of its Subsidiaries has received notice of any claim with respect to any Environmental Liability or knows of any basis for any Environmental Liability except for the Disclosed Matters and (ii) and except with respect to any other matters that, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect, no Loan Party nor any of its Subsidiaries (1) has failed to comply with any Environmental Law or to obtain, maintain or comply with any permit, license or other approval required under any Environmental Law or (2) has become subject to any Environmental Liability.
(c) Since the date of this Agreement, there has been no change in the status of the Disclosed Matters that, individually or in the aggregate, has resulted in, or could reasonably be expected to result in, a Material Adverse Effect.
Section 3.07. Compliance with Laws and Agreements . Each Loan Party and its Subsidiaries is in compliance with all Requirements of Law applicable to it or its property and all indentures, agreements and other instruments binding upon it or its property, except where the failure to do so, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect. No Default has occurred and is continuing.
Section 3.08. Investment Company Status . No Loan Party nor any of its Subsidiaries is an “investment company” as defined in, or subject to regulation under, the Investment Company Act of 1940.
Section 3.09. Taxes . Each Loan Party and its Subsidiaries has timely filed or caused to be filed all Federal, state and other material Tax returns that are required to be filed and has paid all Taxes shown to be due and payable on said returns or on any assessments made against it or any of its property and all other material Taxes, imposed on it or any of its property by any Governmental Authority or otherwise required to be paid by it (other than any the amount or validity of which are currently being contested in good faith by appropriate proceedings and with respect to which reserves in conformity with GAAP have been provided on the books of the relevant Loan Party or Subsidiary); no Tax Lien has been filed, and, no claim in excess of $1,000,000 is being asserted, with respect to any such Taxes. Other than tax indemnity agreements in leasing transactions entered into in the ordinary course of business, no Loan Party or any of its Subsidiaries is a party to any Tax sharing agreement with any Person other than another Loan Party or any of its Subsidiaries.
Section 3.10. ERISA . Except as set forth on Schedule 3.10 hereto, no Reportable Event (within the meaning of Section 412 of the Code or Section 302 of ERISA) has occurred during the five-year period prior to the date on which this representation is made or deemed made with respect to any Plan (other than a Multiemployer Plan), or is reasonably expected to occur. Each Plan has complied in all material respects with the applicable provisions of ERISA and the Code except for such instances of noncompliance which, individually or in the aggregate, would not reasonably be expected to result in a material liability. Except as set forth on Schedule 3.10 hereto, no termination of a Single Employer Plan
has occurred or is reasonably expected to occur, and no Lien in favor of the PBGC or a Plan has arisen, during such five-year period, or is reasonably expected to arise. The present value of all accrued benefits under each Single Employer Plan (based on those assumptions used to fund such Plans) did not, as of the last annual valuation date prior to the date on which this representation is made or deemed made, exceed the value of the assets of such Plan allocable to such accrued benefits by a material amount. Neither the Borrower nor any Commonly Controlled Entity has had a complete or partial withdrawal from any Multiemployer Plan that has resulted or could reasonably be expected to result in a material liability under ERISA, and neither the Borrower nor any Commonly Controlled Entity would become subject to any material liability under ERISA if the Borrower or any such Commonly Controlled Entity were to withdraw completely from all Multiple Employer Plans as of the valuation date most closely preceding the date on which this representation is made or deemed made. Neither the Borrower nor any Commonly Controlled Entity has been notified or is aware that any Multiemployer Plan is in Reorganization or Insolvent or has been terminated within the meaning of Title IV of ERISA and no such Multiemployer Plan is reasonably expected to be in Reorganization, become Insolvent or be terminated within the meaning of Title IV of ERISA. No Other ERISA Event has occurred or is reasonably expected to occur.
Section 3.11. Disclosure . Each Borrower has disclosed to the Lenders all agreements, instruments and corporate or other restrictions to which it or any Subsidiary is subject, and all other matters known to it, that, individually or in the aggregate, could reasonably be expected to result in a Material Adverse Effect. None of the reports, financial statements, certificates or other information furnished by or on behalf of the any Loan Party to the Administrative Agent or any Lender in connection with the negotiation of this Agreement or any other Loan Document (as modified or supplemented by other information so furnished) contains any material misstatement of fact or omits to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided that, with respect to projected financial information, the Borrower represents only that such information was prepared in good faith based upon assumptions believed to be reasonable at the time delivered and, if such projected financial information was delivered prior to the Effective Date, as of the Effective Date.
Section 3.12. Material Agreements . All material agreements and contracts to which any Loan Party is a party or is bound as of the date of this Agreement are listed on Schedule 3.12 . No Loan Party is in material default in the performance, observance or fulfillment of any of the obligations, covenants or conditions contained in (i) any material agreement to which it is a party or (ii) any agreement or instrument evidencing or governing Indebtedness in excess of $1,000,000.
Section 3.13. Solvency . (a) Immediately after the consummation of the Transactions to occur on the Effective Date, (i) the fair value of the assets of each Loan Party, at a fair valuation, will exceed its debts and liabilities, subordinated, contingent or otherwise; (ii) the present fair saleable value of the property of each Loan Party will be greater than the amount that will be required to pay the probable liability of its debts and other liabilities, subordinated, contingent or otherwise, as such debts and other liabilities become absolute and matured; (iii) each Loan Party will be able to pay its debts and liabilities, subordinated, contingent or otherwise, as such debts and liabilities become absolute and matured; and (iv) each Loan Party will not have unreasonably small capital with which to conduct the business in which it is engaged as such business is now conducted and is proposed to be conducted after the Effective Date.
(b) No Loan Party intends to, or will permit any of its Subsidiaries to, and no Loan Party believes that it or any of its Subsidiaries will, incur debts beyond its ability to pay such debts as they mature, taking into account the timing of and amounts of cash to be received by it or any such Subsidiary and the timing of the amounts of cash to be payable on or in respect of its Indebtedness or the Indebtedness of any such Subsidiary.
Section 3.14. Insurance . Schedule 3.14 sets forth a description of all insurance maintained by or on behalf of the Loan Parties and the Subsidiaries as of the Effective Date. As of the Effective Date, all premiums in respect of such insurance have been paid. The Borrower believes that the insurance maintained by or on behalf of Esmark and its Subsidiaries is adequate.
Section 3.15. Capitalization and Subsidiaries . Schedule 3.15 sets forth (a) a correct and complete list of the name and relationship to Esmark of each and all of Esmark’s Subsidiaries, (b) a true and complete listing of each class of each of the Borrower’s authorized Equity Interests, of which all of such issued shares are validly