FIRST AMENDED AND RESTATED REVOLVING
CREDIT
PNC BANK, NATIONAL ASSOCIATION
(AS LENDER, AS ADMINISTRATIVE AGENT AND AS COLLATERAL
AGENT)
JPMORGAN CHASE BANK, N.A. (AS
LENDER), BANK OF AMERICA, N.A. (AS LENDER AND AS
DOCUMENTATION AGENT), NATIONAL CITY BUSINESS CREDIT,
INC. (AS LENDER AND AS DOCUMENTATION AGENT), WACHOVIA BANK,
NATIONAL ASSOCIATION (AS LENDER AND AS DOCUMENTATION AGENT) AND
SUCH OTHER LENDERS WHICH ARE NOW OR HEREAFTER A PARTY
HERETO
PNC CAPITAL MARKETS, INC. AND J. P.
MORGAN SECURITIES, INC.,
(AS CO-LEAD ARRANGERS AND JOINT BOOK RUNNERS)
OREGON METALLURGICAL CORPORATION,
ALLEGHENY LUDLUM
CORPORATION, ATI PROPERTIES, INC., TDY INDUSTRIES, INC.,
ALC FUNDING CORPORATION, JESSOP STEEL COMPANY,
JEWEL ACQUISITION, LLC, ATI FUNDING CORPORATION AND JESSOP
STEEL
ACQUISITION, LLC
(AS BORROWERS)
THE GUARANTORS PARTY HERETO
(AS GUARANTORS)
FIRST AMENDED AND RESTATED
REVOLVING CREDIT AND SECURITY
AGREEMENT
First Amended and
Restated Revolving Credit and Security Agreement, dated as of
August 4, 2005, by and among Oregon Metallurgical Corporation,
a corporation organized under the laws of the State of Oregon
(“Oremet”), Allegheny Ludlum Corporation, a corporation
organized under the laws of the Commonwealth of Pennsylvania
(“ALC”), ATI Properties, Inc., a corporation organized
under the laws of the State of Delaware (“ATIP”), TDY
Industries, Inc., a corporation organized under the laws of the
State of California (“TDY”), ALC Funding Corporation, a
corporation organized under the laws of the State of Delaware
(“ALC Funding”), Jessop Steel Company, a corporation
organized under the laws of the Commonwealth of Pennsylvania
(“Jessop”), Jewel Acquisition, LLC, a limited liability
company organized under the laws of the State of Delaware
(“Jewel”), ATI Funding Corporation, a Delaware
corporation (“ATI Funding”), and Jessop Steel
Acquisition, LLC, a Pennsylvania limited liability company
(“Jessop LLC”) (Oremet, ALC, ATIP, TDY, ALC Funding,
Jessop, Jewel, ATI Funding and Jessop LLC are each a
“Borrower” and collectively the
“Borrowers”), each of the Guarantors (as hereinafter
defined), the financial institutions which are now or which
hereafter become a party hereto (collectively, the
“Lenders” and individually a “Lender”) and
PNC Bank, National Association (“PNC”), as
administrative agent and collateral agent for the Lenders (PNC, in
such capacity, the “Agent”), Bank of America, N.A.,
National City Business Credit, Inc. and Wachovia Bank, National
Association, as documentation agents for the Lenders (collectively,
the “Documentation Agents”) and PNC Capital Markets,
Inc. and J. P. Morgan Securities, Inc., as co-lead arrangers and
joint book runners (collectively, the “Co-Lead
Arrangers”).
WHEREAS, the
Borrowers (excluding ATI Funding and Jessop LLC), the Guarantors
(including ATI Funding and excluding AII LLC), various financial
institutions (the “Existing Lenders”), PNC, as
administrative agent and collateral agent for the Existing Lenders,
Congress Financial Corporation, Bank of America, N.A. (successor by
merger to Fleet Capital Corporation) and GMAC Commercial Finance
LLC, as documentation agents for the Existing Lenders entered into
that certain Revolving Credit and Security Agreement, dated
June 13, 2003 (as amended prior to the date hereof, the
“Existing Credit Agreement”); and
WHEREAS, the
Borrowers, the Guarantors, the Lenders, the Agent and the
Documentation Agents desire to amend and restate the Existing
Credit Agreement, pursuant to the terms and conditions set forth
herein.
IN CONSIDERATION
of the mutual covenants and undertakings herein contained, the
receipt and sufficiency of which are hereby acknowledged, the
Borrowers, the Guarantors, the Lenders, the Agent and the
Documentation Agents hereby agree as follows:
As
used in this Agreement, the Notes, or any certificate, report or
other document made or delivered pursuant to this Agreement,
accounting terms not defined in Section 1.2 or elsewhere in
this Agreement and accounting terms partly defined in
Section 1.2 to the extent not defined, shall have the
respective meanings given to them under GAAP; provided ,
however , whenever such accounting terms are used for the
purposes of determining compliance with financial covenants in this
Agreement, such accounting terms shall be defined in accordance
with GAAP.
For
purposes of this Agreement the following terms shall have the
following meanings:
“
AAC ” shall mean AII Acquisition Corp., a Delaware
corporation and its successors and assigns.
“
Accountants ” shall have the meaning set forth in
Section 9.5 hereof.
“
Account Control Agreement (ALC Funding) ” shall mean
the First Amended and Restated Notification and Control Agreement,
dated of even date herewith, by and among ALC Funding, PNC Bank,
Delaware, and Agent, together with all amendments, supplements,
modifications, substitutions and replacements thereto and
thereof.
“
Account Control Agreement (ATI Funding) ” shall mean
the Notification and Control Agreement, dated of even date
herewith, by and among ATI Funding, PNC Bank, Delaware, and Agent,
together with all amendments, supplements, modifications,
substitutions and replacements thereto and thereof.
“
Account Control Agreements ” shall mean, collectively,
the Account Control Agreement (ALC Funding), the Account Control
Agreement (ATI Funding), and any other Account Control Agreement in
form and substance satisfactory to the Agent entered into by and
among the applicable Borrower, the Agent and the Person at which
the applicable account is located, together with all amendments,
supplements, modifications, substitutions and replacements thereto
and thereof.
“
Additional Cash on Deposit ” shall mean the aggregate
cash balance in any Borrower’s account with any Person which
is assigned to the Agent pursuant to an Assignment of Account and
subject to an Account Control Agreement.
“
Adjusted EBITDA ” shall mean for any fiscal period
(a) the sum of (i) EBITDA (ii) minus any gain or
plus any loss of any other Person accounted for on the
equity method except to the extent of cash distributions received
during such fiscal period, (iii) plus or minus , as
applicable, any other non-cash non-recurring items of gain or loss
with respect to such fiscal period not already excluded hereunder,
(iv) plus any non-cash pension expense and minus
any
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non-cash
pension income of ATI and its Subsidiaries on a consolidated basis
resulting from the application of SFAS 87 and plus that
portion of SFAS 106 expenses equal to the cash payments from the
VEBA with respect to such fiscal period.
“
Advances ” shall mean and include the Revolving
Advances and Letters of Credit.
“
Advance Rates ” shall have the meaning set forth in
Section 2.1(a) hereof.
“
Affiliate ” of any Person shall mean (a) any
Person which, directly or indirectly, is in control of, is
controlled by, or is under common control with such Person, or
(b) any Person who is a director or officer (i) of such
Person, (ii) of any Subsidiary of such Person or (iii) of
any Person described in clause (a) above. For purposes of this
definition, control of a Person shall mean the power, direct or
indirect, (x) to vote ten percent (10%) or more of the
securities having ordinary voting power for the election of
directors of such Person, or (y) to direct or cause the
direction of the management and policies of such Person whether by
contract or otherwise.
“
Agent ” shall have the meaning set forth in the
preamble to this Agreement and shall include its successors and
assigns.
“
Agent’s Letter ” shall mean the First Amended
and Restated Agent’s Fee Letter dated of even date herewith,
by and among the Borrowers and the Agent.
“
Aggregate Consideration ” shall mean with respect to
any Permitted Acquisition the sum of (a) the cash paid by any
Loan Party, directly or indirectly, to the seller in connection
therewith, plus (b) common stock of ATI issued (valued
at market price at the close of trading on the date of the
definitive acquisition agreement pursuant to which the Permitted
Acquisition is to be made) in connection with such Permitted
Acquisition, plus (c) Indebtedness for Borrowed Money
incurred or assumed by any Loan Party, whether in favor of the
seller or otherwise and whether fixed or contingent, in connection
with such Permitted Acquisition, plus (d) any Guaranty
given or incurred by any Loan Party in connection therewith, and
plus (e) any other consideration given or obligation
incurred by any Loan Party in connection therewith.
“
AIC ” shall mean AII Investment Corp., a Delaware
corporation and its successors and assigns.
“
AII LLC ” shall mean AII Acquisition Holdings, LLC, a
Pennsylvania limited liability company and its successors and
assigns.
“
ALC ” shall have the meaning set forth in the preamble
to this Agreement and shall include its successors and
assigns.
“
ALC Funding ” shall have the meaning set forth in the
preamble to this Agreement and shall include its successors and
assigns.
“ALC J&L Note ” shall mean the Promissory
Note dated June 1, 2004, made by ALC in favor of J&L in
the original principal amount of Seven Million Five Hundred
Thousand and 00/100 Dollars ($7,500,000.00).
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“
Alternate Base Rate ” shall mean, for any day, a rate
per annum equal to the higher of (i) the Base Rate in effect
on such day and (ii) the Federal Funds Open Rate in effect on
such day plus one-half of one percent (.50%) per annum.
“
Anti-Terrorism Laws ” shall mean any laws relating to
terrorism or money laundering, including Executive Order
No. 13224, the USA Patriot Act, the laws comprising or
implementing the Bank Secrecy Act, and the laws administered by the
United States Treasury Department’s Office of Foreign Asset
Control (as any of the foregoing laws may from time to time be
amended, renewed, extended, or replaced).
“
Applicable Base Rate Margin ” shall have the meaning
set forth in Section 3.1(b) hereof.
“
Applicable Euro Dollar Rate Margin ” shall have the
meaning set forth in Section 3.1(b) hereof.
“
Applicable Commitment Fee Percentage ” shall have the
meaning set forth in Section 3.3 hereof.
“
Applicable Letter of Credit Fee Percentage ” shall
have the meaning set forth in Section 3.2(a)
hereof.
“
Arcelor ” shall mean Arcelor S.A., a corporation
organized under the laws of Luxembourg.
“
Assignment of Account (ALC Funding) ” shall mean the
First Amended and Restated Pledge and Security Agreement, dated of
even date herewith, by and between ALC Funding and the Agent,
together with all amendments, supplements, modifications,
substitutions and replacements thereto and thereof.
“
Assignment of Account (ATI Funding) ” shall mean the
Pledge and Security Agreement, dated of even date herewith, by and
between ATI Funding and the Agent, together with all amendments,
supplements, modifications, substitutions and replacements thereto
and thereof.
“
Assignments of Account ” shall mean, collectively, the
Assignment of Account (ALC Funding), the Assignment of Account (ATI
Funding), and any other Pledge and Security Agreement in form and
substance satisfactory to the Agent entered into by the applicable
Borrower and the Agent, together with all amendments, supplements,
modifications, substitutions and replacements thereto and
thereof.
“
ATI ” shall mean Allegheny Technologies Incorporated,
a Delaware corporation and its successors and assigns.
“
ATICH ” shall mean ATI Canada Holdings, Inc., a
Delaware corporation and its successors and assigns.
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“
ATI Funding ” shall have the meaning set forth in the
preamble to this Agreement and shall include its successors and
assigns..
“
ATII ” shall mean Allegheny Technologies
International, Inc., a California corporation and its successors
and assigns.
“
ATIP ” shall have the meaning set forth in the
preamble to this Agreement and shall include its successors and
assigns.
“
Authority ” shall have the meaning set forth in
Section 4.18(d) hereof.
“
Availability ” shall mean, with respect to any fiscal
period, the sum of (a) the amount derived in
Section 2.1(a)(y)(i) hereof, plus (b) the lesser
of the amount derived in (1) Section 2.1(a)(y)(ii)(A) or
(2) Section 2.1(a)(y)(ii)(B) hereof, plus
(c) the amount by which the amount derived in
Section 2.1(a)(y)(iii) exceeds Twenty Five Million and 00/100
Dollars ($25,000,000.00).
“
Availability Coverage Ratio ” shall mean and include,
with respect to any fiscal period, the ratio of
(a) Availability to (b) the amount of outstanding
Revolving Advances at the end of such period plus the Dollar
Equivalent amount of outstanding Letters of Credit at the end of
such period.
“
Base Rate ” shall mean the base commercial lending
rate of PNC as publicly announced to be in effect from time to
time, such rate to be adjusted automatically, without notice, on
the effective date of any change in such rate. This rate of
interest is determined from time to time by PNC as a means of
pricing some loans to its customers and is neither tied to any
external rate of interest or index nor does it necessarily reflect
the lowest rate of interest actually charged by PNC to any
particular class or category of customers of PNC.
“
Blocked Account Agreements ” shall mean, collectively,
the First Amended and Restated Blocked Account Agreement and the
Deposit Account Control Agreement in substantially the form of
Exhibit B attached hereto and made a part hereof
entered into by the Borrowers, as applicable, the Agent and the
bank at which the applicable Blocked Account is located, together
with all amendments, supplements, modifications, substitutions and
replacements thereto and thereof.
“
Blocked Accounts ” shall have the meaning set forth in
Section 4.15(h) hereof.
“
Blocked Person ” shall have the meaning assigned to
such term in Section 5.23(b) hereof.
“
Borrower ” or “ Borrowers ” shall
have the meaning set forth in the preamble to this Agreement and
shall extend to all permitted successors and assigns of such
Persons.
“
Borrowers’ Account ” shall have the meaning set
forth in Section 2.7 hereof.
“
Borrowing Agent ” shall mean ALC.
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“
Borrowing Base Certificate ” shall mean a certificate
duly executed by an officer of Borrowing Agent appropriately
completed and in substantially the form of Exhibit A
hereto.
“
Business Day ” shall mean any day other than Saturday
or Sunday or a legal holiday on which commercial banks are
authorized or required by law to be closed for business in
Pittsburgh, Pennsylvania and, if the applicable Business Day
relates to any Eurodollar Rate Loans, such day must also be a day
on which dealings are carried on in the London interbank
market.
“
Capital Expenditures ” shall mean any expenditure made
or liability incurred which is, in accordance with GAAP, treated as
a capital expenditure and not as an expense item for the year in
which it was made or incurred, as the case may be.
“
Cash Dominion Triggering Event ” shall mean the
Borrowers’ Undrawn Availability is less than the Required
Minimum Amount at which time the Borrowers shall comply with the
terms of Section 4.15(d) and (h).
“
Cash on Deposit ” shall mean the sum of the Cash on
Deposit (ALC Funding), the Cash on Deposit (ATI Funding) and any
Additional Cash on Deposit.
“
Cash on Deposit (ALC Funding) ” shall mean the
aggregate cash balance in ALC Funding’s account with PNC
Bank, Delaware which is assigned to the Agent pursuant to the
Assignment of Account (ALC Funding).
“
Cash on Deposit (ATI Funding) ” shall mean the
aggregate cash balance in ATI Funding’s account with PNC
Bank, Delaware which is assigned to the Agent pursuant to the
Assignment of Account (ATI Funding).
“
Cash on Deposit Advance Rate ” shall have the meaning
set forth in Section 2.1(a)(y)(iii) hereof.
“
CERCLA ” shall mean the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended, 42
U.S.C. §§9601 et seq .
“
Change of Control ” shall mean (i) any Person or
group of Persons acting in concert (within the meaning of Sections
13(d) or 14(a) of the Securities Exchange Act of 1934, as amended)
shall have acquired beneficial ownership of (within the meaning of
Rule 13d-3 promulgated by the Securities and Exchange
Commission under said Act) twenty percent (20%) or more of the
issued and outstanding voting capital stock of ATI; or
(ii) within the period of twelve (12) consecutive
calendar months, individuals who are directors of ATI on the first
(1 st
) day of such period, together with
any new directors whose election or nomination for election by the
equity holders of ATI was approved by a vote of at least a majority
of the directors of ATI then still in office or whose election or
nomination for election was previously so approved, shall cease to
constitute a majority of the board of directors of ATI.
“
Charges ” shall mean all taxes, charges, fees,
imposts, levies or other assessments, including, without
limitation, all net income, gross income, gross receipts, sales,
use, ad valorem, value added, transfer, franchise, profits,
inventory, capital stock, license,
6
withholding,
payroll, employment, social security, unemployment, excise,
severance, stamp, occupation and property taxes, custom duties,
fees, assessments, liens, claims and charges of any kind
whatsoever, together with any interest and any penalties, additions
to tax or additional amounts, imposed by any taxing or other
authority, domestic or foreign (including, without limitation, the
Pension Benefit Guaranty Corporation or any environmental agency or
superfund), upon the Collateral, any Loan Party or any Affiliates
of a Loan Party.
“
CIP Regulations ” shall have the meaning assigned to
such term in Section 14.11 hereof.
“
Closing Date ” shall mean August 4, 2005 or such
other date as may be agreed to by the parties hereto.
“
Code ” shall mean the Internal Revenue Code of 1986,
as amended from time to time and the regulations promulgated
thereunder.
“
Collateral ” shall mean and include:
(b) all
General Intangibles;
(d) all
Investment Property;
(f) all
of each Loan Party’s right, title and interest in and to
(i) all merchandise returned or rejected by Customers,
relating to or securing any of the Receivables; (ii) all of
each Loan Party’s rights as a consignor, a consignee, an
unpaid vendor, mechanic, artisan, or other lienor, including
stoppage in transit, setoff, detinue, replevin, reclamation and
repurchase; (iii) all additional amounts due to any Loan Party
from any Customer relating to the Receivables; (iv) other
property, including warranty claims, relating to any goods securing
this Agreement; (v) all of each Loan Party’s contract
rights, rights of payment which have been earned under a contract
right, instruments (including promissory notes), documents, chattel
paper (including electronic chattel paper), warehouse receipts,
deposit accounts including, but not limited to, the Blocked
Accounts, letters of credit, and money; (vi) all commercial
tort claims (whether now existing or hereafter arising);
(vii) if and when obtained by any Loan Party, all real and
personal property of third parties in which such Loan Party has
been granted a lien or security interest as security for the
payment or enforcement of Receivables; and (vii) any other
goods, personal property, if any, in which any Loan Party may
hereafter in writing grant a security interest to Agent hereunder,
or in any amendment or supplement hereto or thereto, or under any
other agreement between Agent and any Loan Party;
(g) all
of each Loan Party’s ledger sheets, ledger cards, files,
correspondence, records, books of account, business papers,
computer software (owned by any
7
Loan Party or
in which it has an interest), computer programs, tapes, disks and
documents relating to (a), (b), (c), (d), (e) or (f) of
this Paragraph; and
(h) all
proceeds and products of (a), (b), (c), (d), (e), (f) and
(g) in whatever form, including, but not limited to: cash,
deposit accounts (whether or not comprised solely of proceeds),
certificates of deposit, insurance proceeds (including hazard,
flood and credit insurance), negotiable instruments and other
instruments for the payment of money, chattel paper, security
agreements, documents, eminent domain proceeds, condemnation
proceeds and tort claim proceeds;
provided,
however, that Collateral shall exclude in all cases (x) stock
or other equity interest in any Subsidiaries of Loan Parties,
(y) all Indebtedness of any Loan Party or any Subsidiary of a
Loan Party owed to or held by a Loan Party and (z) to the
extent the terms of the Indebtedness of TDY to Lombard US Equipment
Finance Corporation (“Lombard Finance”) expressly
prohibit TDY from granting a Lien to someone other than Lombard
Finance on TDY’s rights under the Third Amendment to and
Restatement of Lease Purchase Agreement dated as of
December 1, 2002, by and between TDY and Chester County, South
Carolina (the “Chester County Lease Purchase
Agreement”), all assets (including real estate and
Equipment), General Intangibles and documents related thereto, all
Receivables, chattel paper, General Intangibles arising out of the
disposition of any of the foregoing, all right to receive return of
any premiums for or proceeds of any insurance, condemnation award,
indemnity or guaranty with respect to any of the foregoing, and all
products and proceeds of the foregoing (the “Lombard
Collateral”), such Lombard Collateral (to the extent it would
otherwise be Collateral hereunder) shall not be deemed Collateral
so long as such express prohibition is in effect.
“
Collateral Assignment ” shall mean the Collateral
Assignment of Representations, Warranties, Covenants, and Indemnity
and Purchase Price Adjustment Rights, dated June 1, 2004, made
by Jewel and ALC to the Agent with respect to the representations,
warranties, covenants, and indemnity and escrow provisions of the
J&L Asset Purchase Agreement, acknowledged by J&L and
Arcelor.
“
Commitment Percentage ” of any Lender shall mean the
percentage set forth below such Lender’s name on the
signature page hereof as same may be adjusted upon any assignment
by a Lender pursuant to Section 16.3(b) hereof and by any
increases under Section 2.25 hereof.
“
Commitment Transfer Supplement ” shall mean a document
in the form of Exhibit 16.3 hereto, properly completed and
otherwise in form and substance satisfactory to Agent by which the
Purchasing Lender purchases and assumes a portion of the obligation
of Lenders to make Advances under this Agreement.
“
Computation Date ” shall have the meaning set forth in
Section 2.20 hereof.
“
Consents ” shall mean all filings and all licenses,
permits, consents, approvals, authorizations, qualifications and
orders of governmental authorities and other third parties,
domestic or foreign, necessary to carry on any Loan Party’s
business, including, without limitation, any Consents required
under all applicable federal, state or other applicable
law.
8
“
Contract Rate ” shall mean, as of the date of
determination, the then applicable interest rate on any Domestic
Rate Loan or Eurodollar Rate Loan in accordance with
Section 3.1(a) or 3.1(b), as the case may be.
“
Controlled Group ” shall mean all members of a
controlled group of corporations and all trades or businesses
(whether or not incorporated) under common control which, together
with any Loan Party, are treated as a single employer under
Section 414 of the Code.
“
Customer ” shall mean and include the account debtor
with respect to any Receivable and/or the prospective purchaser of
goods, services or both with respect to any contract or contract
right, and/or any party who enters into or proposes to enter into
any contract or other arrangement with any Loan Party, pursuant to
which such Loan Party is to deliver any personal property or
perform any services.
“
Default ” shall mean an event which, with the giving
of notice or passage of time or both, would constitute an Event of
Default.
“
Default Rate ” shall have the meaning set forth in
Section 3.1 hereof.
“
Defaulting Lender ” shall have the meaning set forth
in Section 2.22(a) hereof.
“
Depository Accounts ” shall have the meaning set forth
in Section 4.15(h) hereof.
“
Dollar ” and the sign “$” shall mean
lawful money of the United States of America.
“
Dollar Equivalent ” shall mean, with respect to any
amount of any currency, the Equivalent Amount of such currency
expressed in Dollars.
“
Domestic Rate Loan ” shall mean any Advance that bears
interest based upon the Alternate Base Rate.
“
Drawing Date ” shall have the meaning assigned to such
term in Section 2.11(b) hereof.
“
Earnings Before Interest and Taxes ” shall mean for
any fiscal period the sum of (i) net income (or loss) of ATI and
its Subsidiaries on a consolidated basis for such period (excluding
extraordinary gains or losses including, without limitation, those
items created by mandated changes in accounting treatment),
plus (ii) all net interest expense of ATI and its
Subsidiaries on a consolidated basis for such period, (iii)
plus all charges against or minus credits to income
of ATI and its Subsidiaries on a consolidated basis for such period
for federal, state and local taxes.
“
EBITDA ” shall mean for any fiscal period the sum of
(i) Earnings Before Interest and Taxes for such period
plus (ii) depreciation expenses of ATI and its
Subsidiaries for such period, plus (iii) amortization
expenses of ATI and its Subsidiaries for such period.
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“
EI ” shall mean Environmental, Inc., a California
corporation and its successors and assigns.
“
Eligible Inventory ” shall mean and include with
respect to each Borrower, Inventory, including work in process
(unless otherwise deemed ineligible by Agent), of each Borrower
valued at the lower of cost or market value, determined on a
first-in-first-out basis, which is not, in Agent’s opinion,
obsolete, slow moving or unmerchantable and which Agent, in its
sole and reasonable discretion, shall not deem ineligible
Inventory, based on such considerations as Agent may from time to
time deem appropriate including, without limitation, whether the
Inventory is subject to a perfected, first priority security
interest in favor of Agent and whether the Inventory conforms to
all standards imposed by any governmental agency, division or
department thereof which has regulatory authority over such goods
or the use or sale thereof.
In addition, no
Inventory of any Borrower shall be Eligible Inventory if
it:
(a) is
not owned by such Borrower free and clear of all Liens and rights
of any other Person (including the rights of a purchaser that has
made progress payments and the rights of a surety that has issued a
bond to assure such Borrower’s performance with respect to
that Inventory), except the Liens in favor of Agent, on behalf of
itself and Lenders, and other Permitted Encumbrances (subject to
reserves established by Agent in accordance with the terms of this
Agreement);
(b) (i) is
not located on premises owned, leased or rented by such Borrower
and set forth in Schedule 4.5 (as such Schedule may be
updated from time to time), or (ii) is stored at a leased
location, unless Agent has given its prior consent thereto or
unless either (x) a reasonably satisfactory landlord waiver
has been delivered to Agent, or (y) reserves reasonably
satisfactory to Agent have been established by Agent with respect
thereto or (iii) is stored with a bailee or warehouseman
unless a reasonably satisfactory warehouseman waiver or a
reasonably satisfactory, acknowledged bailee letter has been
received by Agent or reserves reasonably satisfactory to Agent have
been established by Agent with respect thereto, or (iv) is
located at a location owned by a Borrower that is subject to a
mortgage in favor of a lender other than Agent unless a reasonably
satisfactory mortgagee waiver has been delivered to
Agent;
(c) is
in transit unless such otherwise Eligible Inventory is in transit
from a domestic location owned by a Borrower or a domestic location
identified on Schedule 8.1(t) (as such Schedule may be
updated from time to time) to a domestic location owned by a
Borrower or a location identified on Schedule 8.1(t)
(as such Schedule may be updated from time to time);
(d) is
covered by a negotiable document of title, unless such document has
been delivered to Agent with all necessary endorsements, free and
clear of all Liens except those in favor of Agent and
Lenders;
(e) is
placed on consignment (or is being held pursuant to a consignment
agreement);
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(f) is
excess, obsolete, unsalable, shopworn, seconds, damaged or unfit
for sale;
(g) consists
of display items or packing or shipping materials, manufacturing
supplies or replacement parts;
(h) is
not of a type held for sale in the ordinary course of such
Borrower’s business;
(i) breaches
any of the representations or warranties pertaining to Inventory of
such Borrower set forth in this Agreement or in any of the Other
Documents;
(j) consists
of any costs associated with “freight-in”
charges;
(k) consists
of any gross profit mark-up in connection with the sale and
distribution thereof to any division of any Borrower or to any
Affiliate of such Borrower;
(l) consists
of Hazardous Substances or goods that can be transported or sold
only with licenses that are not readily available;
(m) is
not covered by casualty insurance as required by terms of this
Agreement reasonably acceptable to Agent;
(n) was
produced in violation of the Fair Labor Standards Act and subject
to the “hot goods” provision contained in Title 29
U.S.C. §215(a)(1); or
(o) is
not otherwise satisfactory to Agent as determined in good faith by
Agent in the exercise of its discretion in a reasonable
manner.
“
Eligible Receivables ” shall mean and include with
respect to each Borrower, each Receivable of such Borrower arising
in the ordinary course of such Borrower’s business and which
Agent, in its sole and reasonable credit judgment, shall deem to be
an Eligible Receivable, based on such considerations as Agent may
from time to time deem appropriate. A Receivable shall not be
deemed eligible unless such Receivable is subject to Agent’s
first priority perfected security interest and no other Lien (other
than Permitted Encumbrances), and is evidenced by an invoice or
other documentary evidence satisfactory to Agent. In addition, no
Receivable of a Borrower shall be an Eligible Receivable
if:
(a) it
arises out of a sale made by any Borrower to an Affiliate of any
Borrower or to a Person controlled by an Affiliate of any
Borrower;
(b) it
is due or unpaid more than sixty (60) days after the original
due date or more than one hundred twenty (120) days after the
original invoice date;
(c) fifty
percent (50%) or more of the Receivables from such Customer are not
deemed Eligible Receivables hereunder;
11
(d) any
covenant, representation or warranty contained in this Agreement
with respect to such Receivable has been breached;
(e) the
Customer shall (i) apply for, suffer, or consent to the
appointment of, or the taking of possession by, a receiver,
custodian, trustee or liquidator of itself or of all or a
substantial part of its property or call a meeting of its
creditors, (ii) admit in writing its inability, or be
generally unable, to pay its debts as they become due or cease
operations of its present business, (iii) make a general
assignment for the benefit of creditors, (iv) commence a
voluntary case under any state or federal bankruptcy laws (as now
or hereafter in effect), (v) be adjudicated a bankrupt or
insolvent, (vi) file a petition seeking to take advantage of
any other law providing for the relief of debtors,
(vii) acquiesce to, or fail to have dismissed, any petition
which is filed against it in any involuntary case under such
bankruptcy laws, or (viii) take any action for the purpose of
effecting any of the foregoing;
(f) the
sale is to a Customer outside the continental United States of
America or Canada, unless the sale is on letter of credit, guaranty
or acceptance terms, in each case acceptable to Agent in its sole
discretion;
(g) the
sale to the Customer is on a bill-and-hold, guaranteed sale,
sale-and-return, sale on approval, consignment or any other
repurchase or return basis or is evidenced by chattel
paper;
(h) Agent
believes, in its sole reasonable judgment, that collection of such
Receivable is insecure or that such Receivable may not be paid by
reason of the Customer’s financial inability to
pay;
(i) the
Customer is the United States of America, any state or any
department, agency or instrumentality of any of them, unless the
applicable Borrower assigns its right to payment of such Receivable
to Agent pursuant to the Assignment of Claims Act of 1940, as
amended (31 U.S.C. Sub-Section 3727 et seq . and
41 U.S.C. Sub-Section 15 et seq .) or has
otherwise complied with other applicable laws and has complied with
Section 6.4 hereof;
(j) the
goods giving rise to such Receivable have not been shipped to the
Customer or the services giving rise to such Receivable have not
been performed by the applicable Borrower or the Receivable
otherwise does not represent a final sale;
(k) the
Receivables of the Customer exceed a credit limit determined by
Agent, in its sole reasonable discretion, to the extent such
Receivables exceed such limit;
(l) the
Receivable is subject to any offset, deduction, defense, dispute,
or counterclaim, or is owed by a Customer that is also a creditor
or supplier of a Borrower (but only to the extent of such
Borrower’s obligations to such Customer from time to time) or
the Receivable is contingent in any respect or for any
reason;
(m)
the applicable Borrower has made any agreement with any Customer
for any deduction therefrom (but only to the extent of such
deduction therefrom), except for discounts or allowances made in
the ordinary course of business for prompt payment,
12
all of which
discounts or allowances are reflected in the calculation of the
face value of each respective invoice related thereto;
(n) any
return, rejection or repossession of the merchandise has occurred
or the rendition of services has been disputed;
(o) such
Receivable is not payable to a Borrower; or
(p) such
Receivable is not otherwise satisfactory to Agent as determined in
good faith by Agent in the exercise of its discretion in a
reasonable manner.
“
Environmental Complaint ” shall have the meaning set
forth in Section 4.18(d) hereof.
“
Environmental Laws ” shall mean all federal, state and
local environmental, land use, zoning, health, chemical use, safety
and sanitation laws, statutes, ordinances and codes relating to the
protection of the environment and/or governing the use, storage,
treatment, generation, transportation, processing, handling,
production or disposal of Hazardous Substances and the rules,
regulations and orders of federal, state and local governmental
agencies and authorities with respect thereto.
“
Equivalent Amount ” shall mean, at any time, as
determined by the Agent (which determination shall be conclusive
absent manifest error), with respect to an amount of any currency
(the “Reference Currency”) which is to be computed as
an equivalent amount of another currency (the “Equivalent
Currency”): (i) if the Reference Currency and the
Equivalent Currency are the same, the amount of such Reference
Currency, or (ii) if the Reference Currency and the Equivalent
Currency are not the same, the amount of such Equivalent Currency
converted from such Reference Currency at the Agent’s spot
selling rate (based on the market rates then prevailing and
available to the Agent) for the sale of such Equivalent Currency
for such Reference Currency at a time determined by the Agent on
the second Business Day immediately preceding the event for which
such calculation is made.
“
Equivalent Currency ” shall have the meaning assigned
to such term in the definition of Equivalent Amount.
“
Equipment ” shall mean and include as to each Loan
Party all of such Loan Party’s goods (other than Inventory)
whether now owned or hereafter acquired and wherever located
including, without limitation, all equipment, machinery, apparatus,
motor vehicles, fittings, furniture, furnishings, fixtures, parts,
accessories and all replacements and substitutions therefor or
accessions thereto.
“
ERISA ” shall mean the Employee Retirement Income
Security Act of 1974, as amended from time to time and the rules
and regulations promulgated thereunder.
“
Euro ” shall mean the European common currency
pursuant to the European monetary union.
13
“
Eurodollar Rate ” shall mean for any Eurodollar Rate
Loan for the then current Interest Period relating thereto the
interest rate per annum determined by PNC by dividing (the
resulting quotient rounded upwards, if necessary, to the nearest
1/100th of 1% per annum) (i) the rate of interest determined
by PNC in accordance with its usual procedures (which determination
shall be conclusive absent manifest error) to be the average of the
London interbank offered rates for U.S. Dollars quoted by the
British Bankers’ Association as set forth on the Moneyline
Telerate (or appropriate successor or, if British Banker’s
Association or its successor ceases to provide such quotes, a
comparable replacement determined by PNC) display page 3750 (or
such other display page on the Moneyline Telerate Service as may
replace display page 3750) two (2) Business Days prior to the
first day of such Interest Period for an amount comparable to such
Eurodollar Rate Loan and having a borrowing date and a maturity
comparable to such Interest Period by (ii) a number equal to
1.00 minus the Reserve Percentage. The Eurodollar Rate may also be
expressed by the following formula:
Average of London interbank offered
rates quoted by BBA as shown on
Eurodollar Rate = Moneyline Telerate Service display page 3750
or appropriate successor
1.00 - Reserve Percentage
“
Eurodollar Rate Loan ” shall mean an Advance at any
time that bears interest based on the Eurodollar Rate.
“
Executive Order No. 13224 ” shall mean the
Executive Order No. 13224 on Terrorist Financing, effective
September 24, 2001, as the same has been, or shall hereafter
be, renewed, extended, amended or replaced.
“
Event of Default ” shall mean the occurrence of any of
the events set forth in Article X hereof.
“
Existing Lenders ” shall have the meaning set forth in
the preamble to this Agreement.
“
Existing Letters of Credit ” shall have the meaning
set forth in Section 2.9(a).
“
Federal Funds Effective Rate ” for any day shall mean
the rate per annum (based on a year of 360 days and actual
days elapsed and rounded upward to the nearest 1/100 of 1%)
announced by the Federal Reserve Bank of New York (or any
successor) on such day as being the weighted average of the rates
on overnight federal funds transactions arranged by federal funds
brokers on the previous trading day, as computed and announced by
such Federal Reserve Bank (or any successor) in substantially the
same manner as such Federal Reserve Bank computes and announces the
weighted average it refers to as the “Federal Funds Effective
Rate” as of the date of this Agreement; provided , if
such Federal Reserve Bank (or its successor) does not announce such
rate on any day, the “Federal Funds Effective Rate” for
such day shall be the Federal Funds Effective Rate for the last day
on which such rate was announced.
“
Federal Funds Open Rate ” shall mean the rate per
annum determined by the Agent in accordance with its usual
procedures (which determination shall be conclusive absent manifest
error) to be the “open” rate for federal funds
transactions as of the opening of business for federal funds
transactions among members of the Federal Reserve System arranged
by
14
federal funds
brokers on such day, as quoted by Garvin Guybutler, any successor
entity thereto, or any other broker selected by the Agent, as set
forth on the applicable Telerate display page; provided, however,
that if such day is not a Business Day, the Federal Funds Open Rate
for such day shall be the “open” rate on the
immediately preceding Business Day, or if no such rate shall be
quoted by a Federal funds broker at such time, such other rate as
determined by the Agent in accordance with its usual
procedures.
“
Financial Covenant Triggering Event ” shall mean
(a) the Borrowers’ Undrawn Availability is less than the
Required Minimum Amount for any period of five (5) consecutive
Business Days during the then current fiscal quarter or
(b) the Borrowers’ daily average Undrawn Availability
for any calendar month during the then current fiscal quarter is
less than the Required Minimum Amount, at which time the Loan
Parties shall comply with the terms of Section 6.5.
“
First Testing Quarter ” shall have the meaning set
forth in Section 6.5.
“
Fixed Charge Coverage Ratio ” shall mean and include,
with respect to any fiscal period, the ratio of (a) Adjusted
EBITDA minus Capital Expenditures that were not specifically
funded by Indebtedness (other than a Revolving Advance) of ATI and
its Subsidiaries on a consolidated basis with respect to such
period, plus cash tax refunds received by ATI and its
Subsidiaries on a consolidated basis with respect to such period,
minus cash taxes due and owing or paid of ATI and its
Subsidiaries on a consolidated basis with respect to such period to
(b) Fixed Charges.
“
Fixed Charges ” shall mean, with respect to any fiscal
period, the sum of (a) interest expense of ATI and its
Subsidiaries on a consolidated basis with respect to such period,
plus (b) scheduled principal payments on Indebtedness
of ATI and its Subsidiaries on a consolidated basis with respect to
such period, plus (c) cash dividends and distributions
paid and funds applied of ATI and its Subsidiaries on a
consolidated basis with respect to such period as permitted by
Section 7.7 hereof, plus (d) the amount by which
the total amount of cash contributed to the Pension Plans or any
Plan exceeds the amount of cash contributions to such Pension Plans
or Plan that were expensed of ATI and its Subsidiaries on a
consolidated basis with respect to such period, plus
(e) Restricted Payments of the Loan Parties with respect to
such period.
“
Formula Amount ” shall have the meaning set forth in
Section 2.1(a).
“
GAAP ” shall mean generally accepted accounting
principles in the United States of America in effect from time to
time.
“
General Intangibles ” shall mean and include as to
each Loan Party all of such Loan Party’s general intangibles,
whether now owned or hereafter acquired including, without
limitation, all payment intangibles, choses in action, causes of
action, corporate or other business records, United States patents
and patent applications, United States trademarks, United States
service marks, goodwill associated with such United States marks,
United States copyrights, whether registered or unregistered,
United States patent and trademark licenses, customer lists, tax
refunds, tax refund claims, all claims under guarantees, security
interests or other security
15
held by or
granted to such Loan Party to secure payment of any of the
Receivables by a Customer (other than to the extent covered by
Receivables) all rights of indemnification and all other intangible
property of every kind and nature (other than
Receivables).
“
Governmental Acts ” shall have the meaning assigned to
such term in Section 2.16 hereof.
“
Governmental Body ” shall mean any nation or
government, any state or other political subdivision thereof or any
entity exercising the legislative, judicial, regulatory or
administrative functions of or pertaining to a
government.
“
Guarantor ” shall mean ATI, TDYH, IHM, Rome, TIO,
Titanium Wire, ATICH, ATII, AAC, AII LLC, AIC and EI and any other
Person who may hereafter guarantee payment or performance of the
whole or any part of the Obligations and “ Guarantors
” means collectively all such Persons.
“
Guaranty ” shall mean any guaranty of the obligations
of Borrowers executed by a Guarantor in favor of Agent for its
benefit and for the ratable benefit of Lenders, together with all
amendments, supplements, modifications, substitutions and
replacements thereto and thereof and “Guarantees
” means, collectively, all such Guarantees.
“
Hazardous Discharge ” shall have the meaning set forth
in Section 4.18(d) hereof.
“
Hazardous Substance ” shall mean, without limitation,
any flammable explosives, radon, radioactive materials, asbestos,
urea formaldehyde foam insulation, polychlorinated biphenyls,
petroleum and petroleum products, methane, hazardous materials,
Hazardous Wastes, hazardous or Toxic Substances or related
materials as defined in CERCLA, the Hazardous Materials
Transportation Act, as amended (49 U.S.C. Sections 1801, et
seq .), RCRA or any other applicable Environmental Law and in
the regulations adopted pursuant thereto.
“
Hazardous Wastes ” shall mean all waste materials
subject to regulation under CERCLA, RCRA or applicable state law,
and any other applicable Federal and state laws now in force or
hereafter enacted relating to hazardous waste disposal.
“
Hedging Contracts ” shall mean currency swap
agreements, energy, raw material, commodity and other swap
agreements and futures agreements, interest rate swap agreements,
interest rate cap agreements, interest rate collar agreements,
option agreements or any other similar hedging agreements or
arrangements entered into by a Loan Party in the ordinary course of
business and not for speculative purposes.
“
Hedging Obligations ” shall mean all liabilities of a
Loan Party under Hedging Contracts.
“
IHM ” shall mean International Hearth Melting, LLC, an
Oregon limited liability company and its successors and
assigns.
“
Incentive Pricing Effective Date ” shall have the
meaning set forth in Section 3.1(b) hereof.
16
“
Indebtedness ” of a Person at a particular date shall
mean all obligations of such Person which in accordance with GAAP
would be classified upon a balance sheet as liabilities (except
capital stock and surplus earned or otherwise) and in any event,
without limitation by reason of enumeration, shall include all
Hedging Obligations, indebtedness, debt and other similar monetary
obligations of such Person whether direct or guaranteed, and all
premiums, if any, due at the required prepayment dates of such
indebtedness, and all indebtedness secured by a Lien on assets
owned by such Person, whether or not such indebtedness actually
shall have been created, assumed or incurred by such Person. Any
indebtedness of such Person resulting from the acquisition by such
Person of any assets subject to any Lien shall be deemed, for the
purposes hereof, to be the equivalent of the creation, assumption
and incurring of the indebtedness secured thereby, whether or not
actually so created, assumed or incurred.
“
Indebtedness for Borrowed Money ” shall mean, as to
any Person at any time, any and all indebtedness, obligations or
liabilities (whether matured or unmatured, liquidated or
unliquidated, direct or indirect, absolute of contingent, or joint
or several) of such Person for or in respect of: (i) borrowed
money, (ii) amounts raised under or liabilities in respect of
any note purchase or acceptance credit facility,
(iii) reimbursement obligations (contingent or otherwise)
under any Letter of Credit or Hedging Contract, or
(iv) obligations with respect to capitalized
leases.
“
Ineligible Security ” shall mean any security which
may not be underwritten or dealt in by member banks of the Federal
Reserve System under Section 16 of the Banking Act of 1933 (12
U.S.C. Section 24, Seventh), as amended.
“
Intellectual Property Security Agreement ” shall mean
the Patent and Trademark Security Agreement, dated June 13,
2003, made by ATIP for the benefit of the Agent, together with all
amendments, supplements, modifications, substitutions and
replacements thereto and thereof.
“
ISP ” shall have the meaning set forth in
Section 2.9(b) hereof.
“
Interest Period ” shall mean the period provided for
any Eurodollar Rate Loan pursuant to Section 2.2(b)
hereof.
“
Inventory ” shall mean and include as to each Loan
Party all of such Loan Party’s now owned or hereafter
acquired goods, merchandise and other personal property, wherever
located, to be furnished under any consignment arrangement,
contract of service or held for sale or lease, all raw materials,
work in process, finished goods and materials and supplies of any
kind, nature or description which are or might be used or consumed
in such Loan Party’s business or used in selling or
furnishing such goods, merchandise and other personal property, and
all documents of title or other documents representing
them.
“
Inventory Advance Rate ” shall have the meaning set
forth in Section 2.1(a)(y)(ii) hereof.
“
Investment Property ” shall mean and include as to
each Loan Party, all of such Loan Party’s now owned or
hereafter acquired securities (whether certificated or
uncertificated), securities entitlements, securities accounts,
commodities contracts and commodities accounts.
17
“
Issuer ” shall mean any Person who issues a Letter of
Credit pursuant to the terms hereof.
“
J&L ” shall mean J&L Specialty Steel, LLC, a
limited liability company organized under the laws of the State of
Delaware.
“
J&L Acquisition ” shall mean the acquisition by
Jewel of certain of the assets of J&L pursuant to and
substantially consistent with the J&L Asset Purchase
Agreement.
“
J&L Asset Acquisition Documents ” shall mean the
J&L Asset Purchase Agreement, the ALC J&L Note, the Jewel
J&L Note and all other documents, agreements and instruments
executed in connection with the J&L Asset Acquisition
Agreement.
“
J&L Asset Purchase Agreement ” shall mean the
Asset Purchase Agreement, dated as of February 16, 2004, by
and among J&L, Arcelor, Jewel and ALC.
“
J&L Note Repurchase ” shall have the meaning
assigned to such term in Section 7.16 hereof.
“
Jessop ” shall have the meaning set forth in the
preamble to this Agreement and shall include its successors and
assigns.
“
Jessop LLC ” shall have the meaning set forth in the
preamble to this Agreement and shall include its successors and
assigns.
“
Jewel ” shall have the meaning set forth in the
preamble to this Agreement and shall include its successors and
assigns.
“
Jewel J&L Note ” shall mean the Promissory Note
dated June 1, 2004, made by Jewel in favor of J&L in the
original principal amount of Fifty Two Million Two Hundred Nine
Thousand Three Hundred Sixty Seven and 00/100 Dollars
($52,209,367.00) which is secured by the Real Property and
Equipment of J&L acquired by Jewel pursuant to the J&L
Asset Acquisition Documents and which is subject to adjustment
pursuant to the J&L Asset Acquisition Documents.
“
Lender ” and “ Lenders ” shall have
the meaning ascribed to such term in the preamble to this Agreement
and shall include each Person which becomes a transferee, successor
or assign of any Lender.
“
Lender Hedging Obligations ” shall mean Hedging
Obligations of a Borrower or ATI owing to any Person that was a
Lender or an Affiliate of the Lender on the trade date for any such
Hedging Obligation, or an assignee of such Person; provided that
such Hedging Obligation is entered into in the ordinary course of
business of such Borrower or ATI and not for speculative purposes
and is reported by the Borrowing Agent to the Agent and the Lenders
on each Borrowing Base Certificate delivered hereunder.
“
Letter of Credit Application ” shall have the meaning
set forth in Section 2.9(a) hereof.
18
“
Letter of Credit Borrowing ” shall have the meaning
assigned to such term in Section 2.11(d) hereof.
“
Letter of Credit Fees ” shall have the meaning set
forth in Section 3.2 hereof.
“
Letters of Credit ” shall have the meaning set forth
in Section 2.8 hereof.
“
Lien ” shall mean any mortgage, deed of trust, pledge,
hypothecation, assignment, security interest, lien (whether
statutory or otherwise), Charge, claim or encumbrance, or
preference, priority or other security agreement or preferential
arrangement held or asserted in respect of any asset of any kind or
nature whatsoever including, without limitation, any conditional
sale or other title retention agreement, any lease having
substantially the same economic effect as any of the foregoing, and
the filing of, or agreement to give, any financing statement under
the Uniform Commercial Code or comparable law of any
jurisdiction.
“
Loan Party ” or “ Loan Parties ”
shall mean, singularly or collectively, as the context may require,
each Borrower and each Guarantor.
“
Material Adverse Effect ” shall mean a material
adverse effect on (a) the condition, operations, assets or
business of the Loan Parties, taken as a whole, (b) the Loan
Parties’ (taken as a whole) ability to pay the Obligations in
accordance with the terms thereof, (c) the value of the
Collateral, or Agent’s Liens on the Collateral or, subject to
Permitted Encumbrances, the priority of any such Lien or
(d) the practical realization of the benefits of Agent’s
and each Lender’s rights and remedies under this Agreement
and the Other Documents.
“
Maximum Revolving Advance Amount ” shall mean Three
Hundred Twenty-Five Million and 00/100 Dollars ($325,000,000.00) or
such higher amount which may result from the provisions of
Section 2.25 hereof.
“
Monthly Advances ” shall have the meaning set forth in
Section 3.1(a) hereof.
“
Multiemployer Plan ” shall mean a “multiemployer
plan” as defined in Sections 3(37) and 4001(a)(3) of
ERISA.
“
Net Orderly Liquidation Value ” means with regard to
any Inventory, the net proceeds that could be expected from an
orderly liquidation sale of such Inventory, after all expenses,
professionally managed, with the seller obligated to sell over a
defined period not to exceed twenty (20) weeks from the
commencement of such sale, assuming that (a) the
Borrowers’ facilities are in limited operation, utilizing
select current employees of the Borrowers, for the purpose of
liquidating the Inventory, (b) the Inventory would be disposed
of on a piecemeal basis or through appropriate groupings, under a
scenario whereby the purchasers are buying “as is, where
is” for cash or cash equivalent, (c) the terms are sold
on a Free On Board (“FOB”) warehouse basis, and (d)
taking into consideration current economic trends, condition,
location and marketability.
“
Note ” shall mean each Revolving Credit Note and
“ Notes ” shall collectively mean all of the
Revolving Credit Notes.
19
“
Obligations ” shall mean and include any and all
loans, advances, debts, liabilities, obligations, covenants and
duties (absolute, contingent, matured or unmatured) owing by any
one or more of the Loan Parties to any one or more of the Lenders
or Agent or to any other direct or indirect subsidiary or affiliate
of Agent or any Lender of any kind or nature, present or future
(including, without limitation, any interest accruing thereon after
maturity, or after the filing of any petition in bankruptcy, or the
commencement of any insolvency, reorganization or like proceeding
relating to any Loan Party, whether or not a claim for post-filing
or post-petition interest is allowed in such proceeding), whether
or not evidenced by any note, guaranty or other instrument, whether
arising under any agreement, instrument or document, (including,
without limitation, this Agreement and the Other Documents) whether
or not for the payment of money, whether arising by reason of an
extension of credit, opening of a letter of credit, loan, equipment
lease or guarantee, under any Hedging Contract or in connection
with any cash management or treasury administration services or in
any other manner, whether arising out of overdrafts or deposit or
other accounts or electronic funds transfers (whether through
automated clearing houses or otherwise) or out of the Agent’s
or any Lenders non-receipt of or inability to collect funds or
otherwise not being made whole in connection with depository
transfer check or other similar arrangements, whether direct or
indirect (including those acquired by assignment or participation),
absolute or contingent, joint or several, due or to become due, now
existing or hereafter arising, contractual or tortious, liquidated
or unliquidated, regardless of how such indebtedness or liabilities
arise or by what agreement or instrument they may be evidenced or
whether evidenced by any agreement or instrument, including, but
not limited to, any and all of any Loan Party’s Indebtedness
and/or liabilities under this Agreement, the Other Documents or
under any other agreement between Agent or Lenders and any Loan
Party and any amendments, extensions, renewals or increases and all
costs and expenses of Agent and any Lender incurred in the
documentation, negotiation, modification, enforcement, collection
or otherwise in connection with any of the foregoing, including but
not limited to reasonable attorneys’ fees and expenses and
all obligations of any Loan Party to Agent or Lenders to perform
acts or refrain from taking any action.
“
Optional Currency ” shall mean any of the Euro or
Swiss francs and any other currency approved by the Agent and the
Lenders pursuant to Section 2.20 hereof.
“
Order ” shall have the meaning assigned to such term
in Section 2.17 hereof.
“
Original Currency ” shall have the meaning set forth
in Section 2.24 hereof.
“
Other Currency ” shall have the meaning set forth in
Section 2.24 hereof.
“
Oremet ” shall have the meaning set forth in the
preamble to this Agreement and shall include its successors and
assigns.
“
Other Documents ” shall mean the Revolving Credit
Notes, the Questionnaire, the Intellectual Property Security
Agreement, the Assignments of Account, the Account Control
Agreements, the Collateral Assignment, the Waivers, any Guaranty,
and any and all other agreements, instruments and documents,
including, without limitation, guarantees, pledges, powers of
attorney, consents, and all other writings heretofore, now or
hereafter executed by any
20
Loan Party
and/or delivered to Agent or any Lender in respect of the
transactions contemplated by this Agreement.
“
Parent ” of any Person shall mean a corporation or
other entity owning, directly or indirectly at least 50% of the
shares of stock or other ownership interests having ordinary voting
power to elect a majority of the directors of the Person, or other
Persons performing similar functions for any such
Person.
“
Participant ” shall mean each Person who shall be
granted the right by any Lender to participate in any of the
Advances and who shall have entered into a participation agreement
in form and substance satisfactory to such Lender.
“
Participation Advance ” shall have the meaning
assigned to such term in Section 2.11(d) hereof.
“
Payment Office ” shall mean initially Two Tower Center
Boulevard, East Brunswick, New Jersey 08816; thereafter, such other
office of Agent, if any, which it may designate by notice to
Borrowing Agent and to each Lender to be the Payment
Office.
“
PBGC ” shall mean the Pension Benefit Guaranty
Corporation.
“
Pension Plans ” shall mean, singularly or
collectively, as the context may require, the Pension Plans listed
on Schedule 1.2(a) , as amended, modified or
supplemented from time to time.
“
Permitted Acquisitions ” shall mean as set forth in
Section 7.1 hereof.
“
Permitted Encumbrances ” shall mean (a) Liens in
favor of Agent for the benefit of Agent and Lenders; (b) Liens
for taxes, assessments or other governmental charges not delinquent
or being contested in good faith and by appropriate proceedings and
with respect to which proper reserves have been taken by the Loan
Parties; provided , that , such Liens shall have no
effect on the priority of the Liens in favor of Agent or the value
of the assets in which Agent has such a Lien and a stay of
enforcement of any such Lien shall be in effect; (c) deposits
or pledges to secure obligations under worker’s compensation,
social security or similar laws, or under unemployment insurance or
general liability or product liability insurance; (d) deposits
or pledges to secure bids, tenders, contracts (other than contracts
for the payment of money), leases, statutory obligations, surety
and appeal bonds and other obligations of like nature arising in
the ordinary course of any Loan Party’s business;
(e) mechanics’, workers’, materialmen’s or
other like Liens arising in the ordinary course of any Loan
Party’s business with respect to obligations which are not
due or which are being contested in good faith by the applicable
Loan Party; (f) Liens placed upon fixed assets hereafter
acquired to secure a portion of the purchase price thereof,
provided that (x) any such lien shall not encumber any other
property of the Loan Parties and (y) the aggregate amount of
Indebtedness secured by such Liens incurred as a result of such
purchases during any fiscal year shall not exceed the amount
provided for in Section 7.6; (g) easements, rights of
way, restrictions, leases and other similar title exceptions or
Liens affecting Real Property, none of which materially impairs the
use of such Real Property or the value thereof, and none of which
is violated in any material respect by existing or supporting
structures or land use; (h) Liens consisting of pledges of
government securities or not more than One
21
Hundred Million
and 00/100 Dollars ($100,000,000.00) of cash collateral to secure
obligations under Hedging Contracts entered into in the ordinary
course of business; (i) Liens arising solely by virtue of any
statutory or common law provision relating to banker’s liens,
rights of set-off or similar rights and remedies as to deposit
accounts or other funds maintained with a creditor depository
institution, provided that (1) such deposit account is not a
dedicated cash collateral account and is not subject to
restrictions against access by the applicable Loan Party in excess
of those set forth by regulations promulgated by the Federal
Reserve Board, and (2) such deposit account is not intended by
such Loan Party to provide collateral to the depository
institution; (j) Liens on assets (other than Collateral) acquired
in connection with a Permitted Acquisition, provided that such
Liens extend only to the assets acquired in such Permitted
Acquisition; (k) judgment liens which do not constitute an Event of
Default under Section 10.7; and (l) Liens disclosed on
Schedule 1.2 provided that, except as set forth
on Schedule 1.2 , the principal amount secured thereby is
not hereafter increased, and no additional assets become subject to
such Lien.
“
Person ” shall mean any individual, sole
proprietorship, partnership, corporation, business trust, joint
stock company, trust, unincorporated organization, association,
limited liability company, institution, public benefit corporation,
joint venture, entity or government (whether federal, state,
county, city, municipal or otherwise, including any
instrumentality, division, agency, body or department
thereof).
“
Plan ” shall mean any employee benefit plan within the
meaning of Section 3(3) of ERISA, maintained for employees of
Borrowers or any member of the Controlled Group or any such Plan to
which any Borrower or any member of the Controlled Group is
required to contribute on behalf of any of its
employees.
“
PNC ” shall have the meaning set forth in the preamble
to this Agreement and shall include its successors and
assigns.
“
Priority Lender Hedging Obligations ” shall mean all
Lender Hedging Obligations the aggregate mark to market value of
which does not exceed Twenty Five Million and 00/100 Dollars
($25,000,000.00) as reported by the Borrowing Agent to the Agent on
each Borrowing Base Certificate delivered hereunder. Such priority
shall be determined by the chronological order of such Hedging
Contracts beginning with those Hedging Contracts entered into the
date that most precedes the date of determination.
“
Projections ” shall have the meaning set forth in
Section 5.5(a) hereof.
“
Purchasing Lender ” shall have the meaning set forth
in Section 16.3 hereof.
“
Questionnaire ” shall mean the Documentation
Information Questionnaire and the responses thereto provided by the
Loan Parties and delivered to Agent.
“
RCRA ” shall mean the Resource Conservation and
Recovery Act, 42 U.S.C. §§ 6901 et seq ., as same
may be amended from time to time.
“
Real Property ” shall mean all real property, both
owned and leased, of the Loan Parties.
22
“
Receivables ” shall mean and include, as to each Loan
Party, all of such Loan Party’s accounts, contract rights,
instruments (including those evidencing indebtedness owed to Loan
Parties by their Affiliates), documents, chattel paper (including
electronic chattel paper), general intangibles relating to
accounts, drafts and acceptances, credit card receivables, and all
other forms of obligations owing to such Loan Party arising out of
or in connection with the sale or lease of Inventory or the
rendition of services, all supporting obligations, guarantees and
other security therefor, whether secured or unsecured, now existing
or hereafter created, and whether or not specifically sold or
assigned to Agent hereunder.
“
Receivables Advance Rate ” shall have the meaning set
forth in Section 2.1(a)(y)(i) hereof.
“
Reference Currency ” shall have the meaning assigned
to such term in the definition of Equivalent Amount.
“
Regulations ” shall have the meaning set forth in
Section 16.16 hereof.
“
Reimbursement Obligation ” shall have the meaning
assigned to such term in Section 2.11(b) hereof.
“
Releases ” shall have the meaning set forth in
Section 5.7(c)(i) hereof.
“
Reportable Event ” shall mean a reportable event
described in Section 4043(b) of ERISA or the regulations
promulgated thereunder.
“
Required Lenders ” shall mean Lenders holding at least
fifty-one percent (51%) of the Advances and, if no Advances are
outstanding, shall mean Lenders holding fifty-one percent (51%) of
the Commitment Percentages.
“
Required Minimum Amount ” shall mean Seventy Five
Million and 00/100 Dollars ($75,000,000.00); provided that such
amount shall be increased on a pro rata basis in connection with
any increase in the Maximum Revolving Advance Amount pursuant to
Section 2.25 hereof.
“
Reserve Percentage ” shall mean the maximum effective
percentage in effect on any day as prescribed by the Board of
Governors of the Federal Reserve System (or any successor) for
determining the reserve requirements (including, without
limitation, supplemental, marginal and emergency reserve
requirements) with respect to eurocurrency funding.
“
Restricted Payments ” shall mean (a) investments
made by any Loan Party in accordance with Section 7.4(i),
(b) loans and advances made by any Loan Party in accordance
with Section 7.5(d) that have not been repaid within ninety
(90) days of the date made, (c) prepayments, repurchases,
redemptions, retirements or acquisitions made by any Loan Party in
accordance with Section 7.16(c), and (d) prepayments,
repurchases, redemptions, retirements or acquisitions made by Jewel
in accordance with Section 7.16(d).
“
Revolving Advances ” shall mean Advances made other
than Letters of Credit.
23
“
Revolving Credit Note ” or “ Revolving Credit
Notes ” shall mean, singularly or collectively, as the
context may require, the promissory notes referred to in
Section 2.1(a) hereof, together with all amendments,
restatements, extensions, renewals, replacements, refinancings or
refundings thereof in whole or in part.
“
Rome ” shall mean Rome Metals, LLC, a Pennsylvania
limited liability company and its successors and
assigns.
“
Second Priority Lender Hedging Obligations ” shall
mean all Lender Hedging Obligations other than Priority Lender
Hedging Obligations. At the time a Hedging Contract (with respect
to which the Lender Hedging Obligations arising therefrom cause the
aggregate mark to market value of all Lender Hedging Obligations to
exceed Twenty-Five Million and 00/100 Dollars ($25,000,000.00)) is
executed, the Borrowing Agent shall specify in writing to the Agent
that after giving effect to such Lender Hedging Obligations, the
aggregate mark to market value of all Lender Hedging Obligations as
of such date will exceed Twenty Five Million and 00/100 Dollars
($25,000,000.00) and the parties to such Hedging Contract shall
have expressly agreed that the Lender Hedging Obligations arising
therefrom shall constitute Second Priority Lender Hedging
Obligations under this Agreement. Such Second Priority Lender
Hedging Obligations shall remain Second Priority Lender Hedging
Obligations until the Borrowing Agent shall have delivered written
notice to the Agent designating such Second Priority Lender Hedging
Obligations as Priority Lender Hedging Obligations, and the Agent
shall have approved such redesignation, which written notice shall
include a list of all Priority Lender Hedging Obligations, the
aggregate mark to market value of which shall not exceed Twenty
Five Million and 00/100 Dollars ($25,000,000.00).
“
Second Testing Quarter ” shall have the meaning set
forth in Section 6.5.
“
Section 20 Subsidiary ” shall mean the Subsidiary
of the bank holding company controlling PNC, which Subsidiary has
been granted authority by the Federal Reserve Board to underwrite
and deal in certain Ineligible Securities.
“
Settlement Date ” shall mean the Closing Date and
thereafter Wednesday of each week unless such day is not a Business
Day in which case it shall be the next succeeding Business
Day.
“
Subsidiary ” shall mean a corporation or other entity
of whose shares of stock or other ownership interests having
ordinary voting power (other than stock or other ownership
interests having such power only by reason of the happening of a
contingency) to elect a majority of the directors of such
corporation, or other Persons performing similar functions for such
entity, are owned, directly or indirectly, by such
Person.
“
TDY ” shall have the meaning set forth in the preamble
to this Agreement and shall include its successors and
assigns.
“
TDYH ” shall mean TDY Holdings, LLC, a Delaware
limited liability company and its successors and
assigns.
“
Term ” shall have the meaning set forth in
Section 13.1 hereof.
24
“
Termination Event ” shall mean (i) a Reportable
Event with respect to any Plan subject to Title IV of ERISA or
Multiemployer Plan; (ii) the withdrawal of any Loan Party or
any member of the Controlled Group from a Plan subject to Title IV
of ERISA or Multiemployer Plan during a plan year in which such
entity was a “substantial employer” as defined in
Section 4001(a)(2) of ERISA; (iii) the providing of
notice of intent to terminate a Plan in a distress termination
described in Section 4041(c) of ERISA; (iv) the institution by
the PBGC of proceedings to terminate a Plan or Multiemployer Plan;
(v) any event or condition (a) which might constitute
grounds under Section 4042 of ERISA for the termination of, or the
appointment of a trustee to administer, any Plan or Multiemployer
Plan, or (b) that may result in termination of a Multiemployer
Plan pursuant to Section 4041A of ERISA; or (vi) the
partial or complete withdrawal within the meaning of Sections 4203
and 4205 of ERISA, of any Borrower or any member of the Controlled
Group from a Multiemployer Plan.
“
Third Testing Quarter ” shall have the meaning set
forth in Section 6.5.
“
TIO ” shall mean TI Oregon, Inc., an Oregon
corporation and its successors and assigns.
“
Titanium Wire ” shall mean Titanium Wire Corporation,
a Pennsylvania corporation and its successors and
assigns.
“
Toxic Substance ” shall mean and include any material
present on the Real Property which has been shown to have
significant adverse effect on human health or which is subject to
regulation under the Toxic Substances Control Act (TSCA), 15 U.S.C.
§§ 2601 et seq ., applicable state law, or any
other applicable Federal or state laws now in force or hereafter
enacted relating to toxic substances. “Toxic Substance”
includes but is not limited to asbestos, polychlorinated biphenyls
(PCBs) and lead-based paints.
“
Transferee ” shall have the meaning set forth in
Section 16.3(b) hereof.
“
UCP ” shall have the meaning set forth in
Section 2.9(b) hereof.
“
Undrawn Availability ” shall mean an amount equal to
the lesser of (1) (a) the lesser of (i) the Formula
Amount plus the aggregate Dollar Equivalent amount of
outstanding Letters of Credit minus all Cash on Deposit or
(ii) the Maximum Revolving Advance Amount, minus
(b) the sum of (w) the outstanding amount of Revolving
Advances plus (x) the Dollar Equivalent amount of
outstanding Letters of Credit plus (y) all amounts due
and owing to Borrowers’ trade creditors which are outstanding
sixty (60) days or more beyond the due date, plus
(z) fees and expenses for which Borrowers are liable but which
have not been paid or charged to Borrowers’ Account,
plus (c) all Cash on Deposit or (2) the Maximum
Revolving Advance Amount.
“
USA Patriot Act ” shall mean the Uniting and
Strengthening America by Providing Appropriate Tools Required to
Intercept and Obstruct Terrorism Act of 2001, Public Law 107-56, as
the same has been, or shall hereafter be, renewed, extended,
amended or replaced.
25
“
VEBA ” shall mean collectively, for purposes of this
Agreement, the Allegheny Ludlum Corporation Bargaining Unit,
Voluntary Employee’s Benefit Trust and the Jessop Steel
Company Bargaining Unit Voluntary Employee’s Beneficiary
Trust.
“
Waivers ” shall mean, collectively, any and all
Landlord’s Waivers, Warehouseman’s Waivers,
Creditor’s Waivers, Landlord’s Waiver and Agreements,
Mortgagee Waivers, Bailee Letters and Processing Facility Waivers,
executed and delivered in connection with this Agreement, in form
and substance satisfactory to the Agent, together with all
amendments, supplements, modifications, substitutions and
replacements thereto and thereof.
“
Week ” shall mean the time period commencing with the
opening of business on a Wednesday and ending on the end of
business the following Tuesday.
1.3 Uniform
Commercial Code Terms .
All
terms used herein and defined in the Uniform Commercial Code as
adopted in the Commonwealth of Pennsylvania from time to time shall
have the meaning given therein unless otherwise defined herein. To
the extent the definition of any category or type of Collateral is
expanded by any amendment, modification or revision to the Uniform
Commercial Code, such expanded definition will apply automatically
as of the date of such amendment, modification or
revision.
1.4 Certain
Matters of Construction .
The
terms “herein”, “hereof” and
“hereunder” and other words of similar import refer to
this Agreement as a whole and not to any particular section,
paragraph or subdivision. Any pronoun used shall be deemed to cover
all genders. Wherever appropriate in the context, terms used herein
in the singular also include the plural and vice
versa . All references to statutes and related regulations
shall include any amendments of same and any successor statutes and
regulations. Unless otherwise provided, all references to any
instruments or agreements to which Agent is a party, including,
without limitation, references to any of the Other Documents, shall
include any and all modifications or amendments thereto and any and
all extensions or renewals thereof.
2.1 (a)
Revolving Advances . Subject to the terms and conditions set
forth in this Agreement, each Lender, severally and not jointly,
will make Revolving Advances to Borrowers in aggregate amounts
outstanding at any time equal to such Lender’s Commitment
Percentage of the lesser of (x) the Maximum Revolving Advance
Amount less the aggregate Dollar Equivalent amount of outstanding
Letters of Credit or (y) an amount equal to the sum
of:
(i) up
to eighty-five percent (85%), subject to the provisions of
Section 2.1(b) hereof (“Receivables Advance
Rate”), of Eligible Receivables, plus
(ii) up
to the least of (A) sixty-five percent (65%) of the value of
Eligible Inventory subject to the provisions of Section 2.1(b)
hereof or (B) eighty-five percent (85%) of the Net Orderly
Liquidation Value (expressed as a percentage of cost) of
Eligible
26
Inventory
subject to the provisions of Section 2.1(b) hereof (the lesser
of (A) and (B) above is the “Inventory Advance
Rate”) or (C) Two Hundred Forty Million and 00/100
Dollars ($240,000,000.00) in the aggregate at any one time,
plus
(iii) one
hundred percent (100%), subject to the provisions of
Section 2.1(b) hereof (“Cash on Deposit Advance
Rate”), of Cash on Deposit (the Receivables Advance Rate, the
Inventory Advance Rate and the Cash on Deposit Advance Rate shall
be referred to collectively, as the “Advance Rates”),
minus
(iv) the
aggregate Dollar Equivalent amount of outstanding Letters of
Credit, minus
(v) at
any time when the Borrowers’ Undrawn Availability is less
than the sum of the Required Minimum Amount plus Twenty Five
Million and 00/100 Dollars ($25,000,000.00), the aggregate mark to
market value of the Priority Lender Hedging Obligations,
minus
(vi) such
reserves as Agent may reasonably deem proper and necessary from
time to time.
The amount derived
from the sum of Sections 2.1(a)(y)(i), (ii) and (iii)
minus the sum of Section 2.1 (a)(y)(iv), (v) and
(vi) at any time and from time to time shall be referred to as
the “Formula Amount”. The Revolving Advances shall be
evidenced by one or more secured promissory notes (collectively,
the “Revolving Credit Note”) substantially in the form
attached hereto as Exhibit 2.1(a) .
(b)
Discretionary Rights . Subject to Section 16.2(b)(vii),
the Advance Rates may be increased or decreased by Agent at any
time and from time to time in the exercise of its reasonable
discretion. Each Borrower consents to any such increases or
decreases and acknowledges that decreasing the Advance Rates or
increasing the reserves may limit or restrict Advances requested by
Borrowing Agent. Agent shall give Borrowing Agent fifteen
(15) Business Days prior written notice of its intention to
decrease the Advance Rates.
2.2 Procedure
for Borrowing Advances .
(a) Borrowing
Agent on behalf of any Borrower may notify Agent prior to
11:00 a.m. (Pittsburgh, Pennsylvania time) on a Business Day
of a Borrower’s request to incur, on that day, a Revolving
Advance hereunder. Should any amount required to be paid as
interest hereunder, or as fees or other charges under this
Agreement or any other agreement with Agent or Lenders, or with
respect to any other Obligation, become due, same shall be deemed a
request for a Revolving Advance as of the date such payment is due,
in the amount required to pay in full such interest, fee, charge or
Obligation under this Agreement or any other agreement with Agent
or Lenders, and such request shall be irrevocable.
(b) Notwithstanding
the provisions of (a) above, in the event any Borrower desires
to obtain a Eurodollar Rate Loan, Borrowing Agent shall notify
Agent in writing no later than 10:00 a.m. (Pittsburgh,
Pennsylvania time) at least three (3) Business Days’
prior to the date of such proposed borrowing, specifying
(i) the date of the proposed borrowing
27
(which shall be
a Business Day), (ii) the type of borrowing and the amount of
such Revolving Advance to be borrowed, which amount shall be in a
minimum amount of Five Million and 00/100 Dollars ($5,000,000.00)
and in integral multiples of One Million and 00/100 Dollars
($1,000,000.00) thereafter, and (iii) the duration of the
first Interest Period therefor. Interest Periods for Eurodollar
Rate Loans shall be for one (1), two (2), three (3) or six
(6) months; provided , (A) if an Interest Period
would end on a day that is not a Business Day, it shall end on the
next succeeding Business Day unless such day falls in the next
succeeding calendar month in which case the Interest Period shall
end on the next preceding Business Day and (B) the Borrowing
Agent shall not select, convert to or renew any Interest Period for
any portion of the Revolving Advances that ends after the last day
of the Term. No Eurodollar Rate Loan shall be made available to
Borrower during the continuance of a Default or an Event of
Default.
(c) Each
Interest Period of a Eurodollar Rate Loan shall commence on the
date such Eurodollar Rate Loan is made and shall end on such date
as Borrowing Agent may elect as set forth in subsection (b)(iii)
above provided that the exact length of each Interest Period shall
be determined in accordance with the practice of the interbank
market for offshore Dollar deposits and no Interest Period shall
end after the last day of the Term.
The
Borrowing Agent shall elect the initial Interest Period applicable
to a Eurodollar Rate Loan by its notice of borrowing given to Agent
pursuant to Section 2.2(b) or by its notice of conversion
given to Agent pursuant to Section 2.2(d), as the case may be.
Borrowing Agent shall elect the duration of each succeeding
Interest Period by giving irrevocable written notice to Agent of
such duration not less than three (3) Business Days prior to
the last day of the then current Interest Period applicable to such
Eurodollar Rate Loan. If Agent does not receive timely notice of
the Interest Period elected by Borrowing Agent, Borrowers shall be
deemed to have elected to convert to a Domestic Rate Loan subject
to Section 2.2(d) hereinbelow.
(d) Provided
that no Event of Default shall have occurred and be continuing, any
Borrower may, on the last Business Day of the then current Interest
Period applicable to any outstanding Eurodollar Rate Loan, or on
any Business Day with respect to Domestic Rate Loans, convert any
such loan into a loan of another type in the same aggregate
principal amount provided that any conversion of a Eurodollar Rate
Loan shall be made only on the last Business Day of the then
current Interest Period applicable to such Eurodollar Rate Loan. If
a Borrower desires to convert a loan, Borrowing Agent shall give
Agent not less than three (3) Business Days’ prior
written notice to convert from a Domestic Rate Loan to a Eurodollar
Rate Loan or one (1) Business Day’s prior written notice
to convert from a Eurodollar Rate Loan to a Domestic Rate Loan,
specifying the date of such conversion, the loans to be converted
and if the conversion is from a Domestic Rate Loan to any other
type of loan, the duration of the first Interest Period therefor.
After giving effect to each such conversion, there shall not be
outstanding more than five (5) Eurodollar Rate Loans, in the
aggregate.
(e) At
its option and upon three (3) Business Days’ prior
written notice, any Borrower may prepay the Eurodollar Rate Loans
in whole at any time or in part from time to time, without premium
or penalty (except as set forth in the last sentence of this
Section 2.2(e)), but with accrued interest on the principal
being prepaid to the date of such repayment. Such Borrower shall
specify the date of prepayment of Advances which are Eurodollar
Rate
28
Loans and the
amount of such prepayment. In the event that any prepayment of a
Eurodollar Rate Loan is required or permitted on a date other than
the last Business Day of the then current Interest Period with
respect thereto, such Borrower shall indemnify Agent and Lenders
therefor in accordance with Section 2.2(f) hereof.
(f) Each
Borrower shall indemnify Agent and Lenders and hold Agent and
Lenders harmless from and against any and all losses or expenses
that Agent and Lenders may sustain or incur as a consequence of any
prepayment, conversion of or any default by any Borrower in the
payment of the principal of or interest on any Eurodollar Rate Loan
or failure by any Borrower to complete a borrowing of, a prepayment
of or conversion of or to a Eurodollar Rate Loan after notice
thereof has been given, including, but not limited to, any interest
payable by Agent or Lenders to lenders of funds obtained by it in
order to make or maintain its Eurodollar Rate Loans hereunder. A
certificate as to any additional amounts payable pursuant to the
foregoing sentence submitted by Agent or any Lender to Borrowing
Agent shall be conclusive absent demonstrable error.
(g) Notwithstanding
any other provision hereof, if any applicable law, treaty,
regulation or directive, or any change therein or in the
interpretation or application thereof, shall make it unlawful for
any Lender (for purposes of this subsection (g), the term
“Lender” shall include any Lender and the office or
branch where any Lender or any corporation or bank controlling such
Lender makes or maintains any Eurodollar Rate Loans) to make or
maintain its Eurodollar Rate Loans, the obligation of Lenders to
make Eurodollar Rate Loans hereunder shall forthwith be cancelled
and Borrowers shall, if any affected Eurodollar Rate Loans are then
outstanding, promptly upon request from Agent, either pay all such
affected Eurodollar Rate Loans or convert such affected Eurodollar
Rate Loans into loans of another type. If any such payment or
conversion of any Eurodollar Rate Loan is made on a day that is not
the last day of the Interest Period applicable to such Eurodollar
Rate Loan, Borrowers shall pay Agent, upon Agent’s request,
such amount or amounts as may be necessary to compensate Lenders
for any loss or expense sustained or incurred by Lenders in respect
of such Eurodollar Rate Loan as a result of such payment or
conversion, including (but not limited to) any interest or other
amounts payable by Lenders to lenders of funds obtained by Lenders
in order to make or maintain such Eurodollar Rate Loan. A
certificate as to any additional amounts payable pursuant to the
foregoing sentence submitted by Lenders to Borrowing Agent shall be
conclusive absent manifest error.
2.3
Disbursement of Advance Proceeds .
All
Advances shall be disbursed from whichever office or other place
Agent may designate from time to time and, together with any and
all other Obligations of Borrowers to Agent or Lenders, shall be
charged to Borrowers’ Account on Agent’s books. During
the Term, Borrowers may use the Revolving Advances by borrowing,
prepaying and reborrowing, all in accordance with the terms and
conditions hereof. The proceeds of each Revolving Advance requested
by Borrowers or deemed to have been requested by Borrowers under
Section 2.2(a) hereof shall, with respect to requested
Revolving Advances to the extent Lenders make such Revolving
Advances, be made available to the applicable Borrower on the day
so requested by way of credit to such Borrower’s operating
account at PNC, or such other bank as Borrowing Agent may designate
following notification to Agent, in immediately available federal
funds or
29
other
immediately available funds or, with respect to Revolving Advances
deemed to have been requested by any Borrower, be disbursed to
Agent to be applied to the outstanding Obligations giving rise to
such deemed request.
The
aggregate balance of outstanding Revolving Advances and the Dollar
Equivalent amount of Letters of Credit outstanding at any time
shall not exceed the lesser of (a) the Maximum Revolving
Advance Amount or (b) the Formula Amount.
2.5 Repayment
of Advances .
(a) The
Revolving Advances shall be due and payable in full on the last day
of the Term subject to earlier prepayment as herein
provided.
(b) To
the extent that Collateral of the Borrowers is required to be
deposited into Blocked Accounts or Depository Accounts pursuant to
Section 4.15(h) hereof, each Borrower recognizes that the
amounts evidenced by checks, notes, drafts or any other items of
payment relating to and/or proceeds of Collateral may not be
collectible by Agent on the date received. In consideration of
Agent’s agreement to conditionally credit Borrowers’
Account as of the Business Day on which Agent receives those items
of payment, each Borrower agrees that, in computing the charges
under this Agreement, all items of payment shall be deemed applied
by Agent on account of the Obligations one (1) Business Day
after the Business Day Agent receives such payments via wire
transfer or electronic depository check. Agent is not, however,
required to credit Borrowers’ Account for the amount of any
item of payment which is unsatisfactory to Agent and Agent may
charge Borrowers’ Account for the amount of any item of
payment which is returned to Agent unpaid.
(c) All
payments of principal, interest and other amounts payable
hereunder, or under any of the Other Documents shall be made to
Agent at the Payment Office not later than 1:00 P.M. (Pittsburgh,
Pennsylvania time) on the due date therefor in lawful money of the
United States of America in federal funds or other funds
immediately available to Agent. Agent shall have the right to
effectuate payment on any and all Obligations due and owing
hereunder by charging Borrowers’ Account or by making
Advances as provided in Section 2.2 hereof.
(d) Borrowers
shall pay principal, interest, and all other amounts payable
hereunder, or under any related agreement, without any deduction
whatsoever, including, but not limited to, any deduction for any
setoff or counterclaim.
2.6 Repayment
of Excess Advances .
The
aggregate balance of outstanding Revolving Advances and the Dollar
Equivalent amount of Letters of Credit outstanding at any time in
excess of the maximum amount of such Advances permitted hereunder
shall be immediately due and payable without the necessity of any
demand, at the Payment Office, whether or not a Default or Event of
Default has occurred.
30
2.7 Statement
of Account .
Agent
shall maintain, in accordance with its customary procedures, a loan
account (“Borrowers’ Account”) in the name of
Borrowers in which shall be recorded the date and amount of each
Advance made by Agent and the date and amount of each payment in
respect thereof; provided , however , the failure by
Agent to record the date and amount of any Advance shall not
adversely affect Agent or any Lender. Each month, Agent shall send
to Borrowing Agent a statement showing the accounting for the
Advances made, payments made or credited in respect thereof, and
other transactions between Agent and Borrowers (and, with respect
to Letters of Credit only, ATI) during such month. The monthly
statements shall be deemed correct and binding upon Borrowers in
the absence of demonstrable error and shall constitute an account
stated between Lenders and Borrowers unless Agent receives a
written statement of Borrowers’ specific exceptions thereto
within thirty (30) days after such statement is received by
Borrowing Agent. The records of Agent with respect to the loan
account shall be conclusive evidence absent demonstrable error of
the amounts of Advances (including the Dollar Equivalent amount of
Letters of Credit outstanding, as applicable) and other charges
thereto and of payments applicable thereto.
Subject
to the terms and conditions hereof, Agent shall (a) issue or
cause the issuance of documentary, standby or direct pay letters of
credit (such letters of credit and the Existing Letters of Credit
are collectively, the “Letters of Credit”) on behalf of
any Borrower or ATI; provided , however , that Agent
will not be required to issue or cause to be issued any Letters of
Credit to the extent that the face Dollar Equivalent amount of such
Letters of Credit would then cause the sum of (i) the
outstanding Revolving Advances plus (ii) the
outstanding Dollar Equivalent amount of Letters of Credit to exceed
the lesser of (x) the Maximum Revolving Advance Amount or
(y) the Formula Amount. The maximum amount of the Dollar
Equivalent amount of Letters of Credit outstanding shall not exceed
One Hundred Seventy Five Million and 00/100 Dollars
($175,000,000.00) in the aggregate at any time.
2.9 Issuance of
Letters of Credit .
(a) Borrowing
Agent, on behalf of any Borrower or ATI, may request Agent to issue
or cause the issuance of a Letter of Credit by delivering to Agent
at the Payment Office, Agent’s form of Letter of Credit
Application (the “Letter of Credit Application”)
completed to the satisfaction of Agent; and, such other
certificates, documents and other papers and information as Agent
may reasonably request no later than 10:00 a.m. (Pittsburgh,
Pennsylvania time) at least five (5) Business Days’
prior to the date of such proposed issuance. Borrowing Agent, on
behalf of Borrowers and ATI, also has the right to give
instructions and make agreements with respect to any application,
any applicable letter of credit and security agreement, any
applicable letter of credit reimbursement agreement and/or any
other applicable agreement, any letter of credit and the
disposition of documents, disposition of any unutilized funds, and
to agree with Agent upon any amendment, extension or renewal of any
Letter of Credit. As of the date hereof, those letters of credit
set forth on Schedule 2.9 attached hereto and made a
part hereof, which were issued pursuant to the Existing Credit
Agreement by the Agent
31
and are
outstanding on the date hereof (the “Existing Letters of
Credit”), are hereby deemed to be Letters of Credit issued
and outstanding hereunder.
(b) Each
Letter of Credit shall, among other things, (i) provide for
the payment of sight drafts or other forms of written demand for
payment or, acceptances of usance drafts when presented for honor
thereunder in accordance with the terms thereof and when
accompanied by the documents described therein, (ii) have an
expiry date not later than the last day of the Term, and
(iii) at the direction of the Borrowing Agent, be denominated
in either Dollars or an Optional Currency. Each documentary and
direct pay Letter of Credit shall be subject to the Uniform Customs
and Practice for Documentary Credits (1993 Revision), International
Chamber of Commerce Publication No. 500, and any amendments or
revisions thereof adhered to by the Issuer (the “UCP”).
Each standby Letter of Credit shall be subject to the International
Standby Practices 1998, International Chamber of Commerce
Publication 590 and any amendments or revisions thereof adhered to
by the Issuer (the “ISP”) or the UCP, as determined by
the Issuer. Each Letter of Credit shall be governed, to the extent
not inconsistent with the UCP or the ISP, as applicable, by the
laws of the Commonwealth of Pennsylvania (provided, however, upon
the request of the Borrowing Agent and the consent of the Issuer, a
Letter of Credit may be governed by the laws of a state other than
Pennsylvania).
(c) Agent
shall notify Lenders of the request by Borrowing Agent for a Letter
of Credit hereunder within a reasonable time after receiving such
request.
(d) Agent
shall have absolute discretion whether to accept any draft. Without
in any way limiting Agent’s absolute discretion whether to
accept any draft, Borrowing Agent will not present for acceptance
any draft, and Agent will generally not accept any drafts
(i) that arise out of transactions involving the sale of goods
by any Borrower or ATI not in the ordinary course of its business,
(ii) that involve a sale to an Affiliate of any Borrower or
ATI, (iii) that involve any purchase for which Agent has not
received all related documents, instruments and forms requested by
Agent, or (iv) that is not eligible for discounting with
Federal Reserve Banks pursuant to paragraph 7 of Section 13 of
the Federal Reserve Act, as amended.
2.10
Requirements For Issuance of Letters of Credit .
(b) Borrowing
Agent shall authorize and direct any Issuer to name the applicable
Borrower or ATI as the “Applicant” or “Account
Party” of each Letter of Credit. If Agent is not the Issuer
of any Letter of Credit, Borrowing Agent shall authorize and direct
the Issuer to deliver to Agent all instruments, documents, and
other writings and property received by the Issuer pursuant to the
Letter of Credit and to accept and rely upon Agent’s
instructions and agreements with respect to all matters arising in
connection with the Letter of Credit, the application therefor or
any acceptance therefor.
(c) In
connection with all Letters of Credit issued or caused to be issued
by Agent under this Agreement, each Borrower and ATI hereby
appoints Agent, or its designee, as its attorney, with full power
and authority upon the occurrence and during the
32
continuance of
an Event of Default or Default, (i) to sign and/or endorse
such Borrower’s or ATI’s name upon any warehouse or
other receipts, letter of credit applications and acceptances;
(ii) to sign such Borrower’s or ATI’s name on
bills of lading; (iii) to clear Inventory through the United
States of America Customs Department (“Customs”) in the
name of such Borrower or ATI or Agent or Agent’s designee,
and to sign and deliver to Customs officials powers of attorney in
the name of such Borrower or ATI for such purpose; and (iv) to
complete in such Borrower’s or ATI’s name or
Agent’s, or in the name of Agent’s designee, any order,
sale or transaction, obtain the necessary documents in connection
therewith, and collect the proceeds thereof. Neither Agent nor its
attorneys will be liable for any acts or omissions nor for any
error of judgment or mistakes of fact or law, except for
Agent’s or its attorney’s willful misconduct or gross
negligence. This power, being coupled with an interest, is
irrevocable as long as any Letters of Credit remain
outstanding.
2.11
Disbursements, Reimbursement .
(a) Immediately
upon the issuance of each Letter of Credit, each Lender shall be
deemed to, and hereby irrevocably and unconditionally agrees to,
purchase from Agent a participation in such Letter of Credit and
each drawing thereunder in an amount equal to such Lender’s
Commitment Percentage of the maximum amount available to be drawn
under such Letter of Credit and the amount of such drawing,
respectively.
(b) In
the event of any request for a drawing under a Letter of Credit by
the beneficiary or transferee thereof, Agent will promptly notify
the Borrowing Agent. Provided that the Borrowing Agent shall have
received such notice, Borrowers shall reimburse (such obligation to
reimburse Agent shall sometimes be referred to as a
“Reimbursement Obligation”) Agent prior to 12:00 noon,
Pittsburgh time on each date that an amount is paid by Agent under
any Letter of Credit (each such date, a “Drawing Date”)
in an amount equal to the amount so paid by Agent. In the event
Borrowers fail to reimburse Agent for the full amount of any
drawing under any Letter of Credit by 12:00 noon, Pittsburgh time,
on the Drawing Date, Agent will promptly notify each Lender
thereof, and Borrowers shall be deemed to have requested that
Domestic Rate Loans be made by Lenders to be disbursed on the
Drawing Date under such Letter of Credit, subject to the amount of
the unutilized portion of the lesser of the Maximum Revolving
Advance Amount or the Formula Amount and subject to the conditions
set forth in Section 8.2 other than any notice requirements.
Any notice given by Agent pursuant to this Section 2.11(b) may
be oral if immediately confirmed in writing; provided that the lack
of such an immediate confirmation shall not affect the
conclusiveness or binding effect of such notice.
(c) Each
Lender shall upon any notice pursuant to Section 2.11(b) make
available to Agent an amount in immediately available funds equal
to its Commitment Percentage of the amount of the drawing,
whereupon Lenders shall (subject to Section 2.11(d)) each be
deemed to have made a Domestic Rate Loan to Borrowers in that
amount. If any Lender so notified fails to make available to Agent
for the account of Agent the amount of such Lender’s
Commitment Percentage of such amount by no later than 2:00 p.m.,
Pittsburgh time on the Drawing Date, then interest shall accrue on
such Lender’s obligation to make such payment,
33
from the
Drawing Date to the date on which such Lender makes such payment
(i) at a rate per annum equal to the Federal Funds Effective
Rate during the first three (3) days following the Drawing
Date and (ii) at a rate per annum equal to the rate applicable
to Domestic Rate Loans on and after the fourth (4
th ) day following the Drawing Date. Agent will
promptly give notice of the occurrence of the Drawing Date, but
failure of the Agent to give any such notice on the Drawing Date or
in sufficient time to enable any Lender to effect such payment on
such date shall not relieve such Lender from its obligation under
this Section 2.11(c).
(d) With
respect to any unreimbursed drawing that is not converted into a
Domestic Rate Loan to Borrowers in whole or in part as contemplated
by Section 2.11(b), because of Borrowers’ failure to
satisfy the conditions set forth in Section 8.2 other than any
notice requirements or for any other reason, Borrowers shall be
deemed to have incurred from Agent a borrowing (each a
“Letter of Credit Borrowing”) in the amount of such
drawing. Such Letter of Credit Borrowing shall be due and payable
on demand (together with interest) and shall bear interest at the
rate per annum applicable to the Domestic Rate Loans. Each
Lender’s payment to Agent pursuant to Section 2.11(c)
shall be deemed to be a payment in respect of its participation in
such Letter of Credit Borrowing and shall constitute a
“Participation Advance” from such Bank in satisfaction
of its participation obligation under this
Section 2.11.
2.12 Repayment
of Participation Advances .
(a) Upon
(and only upon) receipt by Agent for its account of immediately
available funds from Borrowers (i) in reimbursement of any
payment made by Agent under the Letter of Credit with respect to
which any Lender has made a Participation Advance to Agent, or
(ii) in payment of interest on such a payment made by Agent
under such a Letter of Credit, Agent will pay to each Lender, in
the same funds as those received by Agent, the amount of such
Lender’s Commitment Percentage of such funds, except Agent
shall retain the amount of the Commitment Percentage of such funds
of any Lender that did not make a Participation Advance in respect
of such payment by Agent.
(b) If
Agent is required at any time to return to any Borrower, or to a
trustee, receiver, liquidator, custodian, or any official in any
insolvency proceeding, any portion of the payments made by any
Borrower to Agent pursuant to Section 2.11(b) in reimbursement
of a payment made under the Letter of Credit or interest or fee
thereon, each Lender shall, on demand of Agent, forthwith return to
Agent the amount of its Commitment Percentage of any amounts so
returned by Agent plus interest thereon from the date such demand
is made to the date such amounts are returned by such Lender to
Agent, at a rate per annum equal to the Federal Funds Effective
Rate in effect from time to time.
Each
Borrower agrees to be bound by the terms of Agent’s
application and agreement for letters of credit and Agent’s
written regulations and customary practices relating to letters of
credit, though such interpretation may be different from such
Borrower’s own. In the event of a conflict between such
application or agreement and this Agreement, this Agreement shall
govern. It is understood and agreed that, except in the case of
gross negligence or willful misconduct, Agent shall not be liable
for any error, negligence and/or mistakes, whether of
34
omission or
commission, in following any Borrower’s instructions or those
contained in the Letters of Credit or any modifications, amendments
or supplements thereto.
2.14
Determinations to Honor Drawing Requests .
In
determining whether to honor any request for drawing under any
Letter of Credit by the beneficiary thereof, Agent shall be
responsible only to determine that the documents and certificates
required to be delivered under such Letter of Credit have been
delivered and that they comply on their face with the requirements
of such Letter of Credit.
2.15 Nature of
Participation and Reimbursement Obligations .
Each
Lender’s obligation in accordance with this Agreement to make
the Revolving Advances or Participation Advances as a result of a
drawing under a Letter of Credit, and the Obligations of Borrowers
to reimburse Agent upon a draw under a Letter of Credit, shall be
absolute, unconditional and irrevocable, and shall be performed
strictly in accordance with the terms of this Section 2.15
under all circumstances, including the following
circumstances:
(i) any
set-off, counterclaim, recoupment, defense or other right which
such Lender may have against Agent or any of its Affiliates, any
Borrower, ATI or any other Person for any reason
whatsoever;
(ii) the
failure of any Borrower or any other Person to comply, in
connection with a Letter of Credit Borrowing, with the conditions
set forth in this Agreement for the making of a Revolving Advance,
it being acknowledged that such conditions are not required for the
making of a Letter of Credit Borrowing and the obligation of the
Lenders to make Participation Advances under Section
2.11;
(iii) any
lack of validity or enforceability of any Letter of
Credit;
(iv) any
claim of breach of warranty that might be made by any Borrower, any
Subsidiary of any Borrower, ATI, or any Lender against any
beneficiary of a Letter of Credit, or the existence of any claim,
set-off, recoupment, counterclaim, crossclaim, defense or other
right which any Borrower, ATI or any Lender may have at any time
against a beneficiary, successor beneficiary any transferee or
assignee of any Letter of Credit or the proceeds thereof (or any
Persons for whom any such transferee may be acting), Agent or its
Affiliates or any Lender or any other Person or, whether in
connection with this Agreement, the transactions contemplated
herein or any unrelated transaction (including any underlying
transaction between any Borrower, ATI or any Subsidiary of a
Borrower and the beneficiary for which any Letter of Credit was
procured);
(v) the
lack of power or authority of any signer of (or any defect in or
forgery of any signature or endorsement on) or the form of or lack
of validity, sufficiency, accuracy, enforceability or genuineness
of any draft, demand, instrument, certificate or other document
presented under or in connection with any Letter of Credit, or any
fraud or alleged fraud in connection with any Letter of Credit, or
the transport of any property or
35
provisions of
services relating to a Letter of Credit, in each case even if Agent
or any of Agent’s Affiliates has been notified
thereof;
(vi) payment
by Agent or any of its Affiliates under any Letter of Credit
against presentation of a demand, draft or certificate or other
document which does not comply with the terms of such Letter of
Credit;
(vii) the
solvency of, or any acts of omissions by, any beneficiary of any
Letter of Credit, or any other Person having a role in any
transaction or obligation relating to a Letter of Credit, or the
existence, nature, quality, quantity, condition, value or other
characteristic of any property or services relating to a Letter of
Credit;
(viii) any
failure by Agent or any of Agent’s Affiliates to issue any
Letter of Credit in the form requested by any Borrower or ATI,
unless Agent has received written notice from such Borrower or ATI
of such failure within three (3) Business Days after Agent
shall have furnished such Borrower or ATI a copy of such Letter of
Credit and such error is material and no drawing has been made
thereon prior to receipt of such notice;
(ix) any
Material Adverse Effect on any Borrower or ATI;
(x) any
breach of this Agreement or any other Loan Document by any party
thereto;
(xi) the
occurrence or continuance of an insolvency proceeding with respect
to any Borrower or ATI;
(xii) the
fact that an Event of Default or a Default shall have occurred and
be continuing;
(xiii) the
fact that the Term shall have expired or this Agreement or the
Commitments hereunder shall have been terminated; and
(xiv) any
other circumstance or happening whatsoever, whether or not similar
to any of the foregoing.
In
addition to amounts payable as provided in Section 16.5,
Borrowers hereby agree to protect, indemnify, pay and save harmless
Agent and any of Agent’s Affiliates that has issued a Letter
of Credit from and against any and all claims, demands,
liabilities, damages, taxes, penalties, interest, judgments,
losses, costs, charges and expenses (including reasonable fees,
expenses and disbursements of counsel) which Agent or any of
Agent’s Affiliates may incur or be subject to as a
consequence, direct or indirect, of the issuance of any Letter of
Credit, other than as a result of (A) the gross negligence or
willful misconduct of Agent as determined by a final judgment of a
court of competent jurisdiction or (B) the wrongful dishonor
by Agent or any of Agent’s Affiliates of a proper demand for
payment made under any Letter of Credit, except if such dishonor
resulted from any act or omission, whether rightful or wrongful, of
any present or
36
future de jure
or de facto government or governmental authority (all such acts or
omissions herein called “Governmental
Acts”).
2.17 Liability
for Acts and Omissions .
As
between any Borrower or ATI and Agent, or Agent’s Affiliates,
such Borrower or ATI assumes all risks of the acts and omissions
of, or misuse of the Letters of Credit by, the respective
beneficiaries of such Letters of Credit. In furtherance and not in
limitation of the foregoing, the Agent shall not be responsible for
any of the following including any losses or damages to any
Borrower, any Subsidiary of any Borrower, or other Person or
property relating therefrom: (i) the form, validity,
sufficiency, accuracy, genuineness or legal effect of any document
submitted by any party in connection with the application for an
issuance of any such Letter of Credit, even if it should in fact
prove to be in any or all respects invalid, insufficient,
inaccurate, fraudulent or forged (even if Agent or Agent’s
Affiliates shall have been notified thereof); (ii) the
validity or sufficiency of any instrument transferring or assigning
or purporting to transfer or assign any such Letter of Credit or
the rights or benefits thereunder or proceeds thereof, in whole or
in part, which may prove to be invalid or ineffective for any
reason; (iii) the failure of the beneficiary of any such
Letter of Credit, or any other party to which such Letter of Credit
may be transferred, to comply fully with any conditions required in
order to draw upon such Letter of Credit or any other claim of any
Borrower, ATI or any Subsidiary of any Borrower against any
beneficiary of such Letter of Credit, or any such transferee, or
any dispute between or among any Borrower, ATI or any Subsidiary of
any Borrower and any beneficiary of any Letter of Credit or any
such transferee; (iv) errors, omissions, interruptions or
delays in transmission or delivery of any messages, by mail, cable,
telegraph, telex or otherwise, whether or not they be in cipher;
(v) errors in interpretation of technical terms; (vi) any loss
or delay in the transmission or otherwise of any document required
in order to make a drawing under any such Letter of Credit or of
the proceeds thereof; (vii) the misapplication by the
beneficiary of any such Letter of Credit of the proceeds of any
drawing under such Letter of Credit; or (viii) any
consequences arising from causes beyond the control of Agent or
Agent’s Affiliates, as applicable, including any Governmental
Acts, and none of the above shall affect or impair, or prevent the
vesting of, any of Agent’s or Agent’s Affiliates rights
or powers hereunder. Nothing in the preceding sentence shall
relieve Agent from liability for Agent’s gross negligence or
willful misconduct in connection with actions or omissions
described in such clauses (i) through (viii) of such
sentence. In no event shall Agent or Agent’s Affiliates be
liable to any Borrower, ATI or any Subsidiary of any Borrower for
any indirect, consequential, incidental, punitive, exemplary or
special damages or expenses (including without limitation
attorneys’ fees), or for any damages resulting from any
change in the value of any property relating to a Letter of
Credit.
Without
limiting the generality of the foregoing, Agent and each of its
Affiliates (i) may rely on any oral or other communication
believed in good faith by Agent or such Affiliate to have been
authorized or given by or on behalf of the applicant for a Letter
of Credit, (ii) may honor any presentation if the documents
presented appear on their face substantially to comply with the
terms and conditions of the relevant Letter of Credit;
(iii) may honor a previously dishonored presentation under a
Letter of Credit, whether such dishonor was pursuant to a court
order, to settle or compromise any claim of wrongful dishonor, or
otherwise, and shall be entitled to reimbursement to the same
extent as if such presentation had initially been honored, together
with any interest paid by Agent or its Affiliate; (iv) may
honor any drawing
37
that is payable
upon presentation of a statement advising negotiation or payment,
upon receipt of such statement (even if such statement indicates
that a draft or other document is being delivered separately), and
shall not be liable for any failure of any such draft or other
document to arrive, or to conform in any way with the relevant
Letter of Credit; (v) may pay any paying or negotiating bank
claiming that it rightfully honored under the laws or practices of
the place where such bank is located; and (vi) may settle or
adjust any claim or demand made on Agent or its Affiliate in any
way related to any order issued at the applicant’s request to
an air carrier, a letter of guarantee or of indemnity issued to a
carrier or any similar document (each an “Order”) and
honor any drawing in connection with any Letter of Credit that is
the subject to such Order, notwithstanding that any drafts or other
documents presented in connection with such Letter of Credit fail
to conform in any way with such Letter of Credit.
In
furtherance and extension and not in limitation of the specific
provisions set forth above, any action taken or omitted by Agent or
Agent’s Affiliates under or in connection with the Letters of
Credit issued by it or any documents and certificates delivered
thereunder, if taken or omitted in good faith, shall not put Agent
or Agent’s Affiliates under any resulting liability to
Borrowers, ATI or any Lender.
2.18 Additional
Payments .
Any
sums reasonably expended by Agent or any Lender due to any
Borrower’s failure to perform or comply with its obligations
under this Agreement or any Other Document including, without
limitation, any Borrower’s obligations under
Sections 4.2, 4.4, 4.12, 4.13, 4.14 and 6.1 hereof, may be
charged to Borrowers’ Account as a Revolving Advance and
added to the Obligations.
2.19 Manner of
Borrowing and Payment .
(a) Each
borrowing of Revolving Advances shall be advanced according to the
applicable Commitment Percentages of Lenders.
(b) Each
payment (including each prepayment) by Borrowers on account of the
principal of and interest on the Revolving Advances, shall be
applied to the Revolving Advances pro rata according to the
applicable Commitment Percentages of Lenders. Except as expressly
provided herein, all payments (including prepayments) to be made by
any Borrower on account of principal, interest and fees shall be
made without set off or counterclaim and shall be made to Agent on
behalf of the Lenders to the Payment Office, in each case on or
prior to 1:00 P.M., Pittsburgh, Pennsylvania time, in Dollars and
in immediately available funds.
(c) (i) Notwithstanding
anything to the contrary contained in Sections 2.19(a) and
(b) hereof, commencing with the first Business Day following
the Closing Date, each borrowing of Revolving Advances shall be
advanced by Agent and each payment by any Borrower on account of
Revolving Advances shall be applied first to those Revolving
Advances advanced by Agent. On or before 1:00 P.M., Pittsburgh,
Pennsylvania time, on each Settlement Date commencing with the
first Settlement Date following the Closing Date, Agent and Lenders
shall make certain payments as follows: (I) if the aggregate
amount of new Revolving Advances made by Agent during the preceding
Week (if any) exceeds the aggregate
38
amount of
repayments applied to outstanding Revolving Advances during such
preceding Week, then each Lender shall provide Agent with funds in
an amount equal to its applicable Commitment Percentage of the
difference between (w) such Revolving Advances and
(x) such repayments and (II) if the aggregate amount of
repayments applied to outstanding Revolving Advances during such
Week exceeds the aggregate amount of new Revolving Advances made
during such Week, then Agent shall provide each Lender with funds
in an amount equal to its applicable Commitment Percentage of the
difference between (y) such repayments and (z) such
Revolving Advances.
(ii) Each
Lender shall be entitled to earn interest at the applicable
Contract Rate on outstanding Advances which it has
funded.
(iii) Promptly
following each Settlement Date, Agent shall submit to each Lender a
certificate with respect to payments received and Advances made
during the Week immediately preceding such Settlement Date. Such
certificate of Agent shall be conclusive in the absence of
demonstrable error.
(d) If
any Lender or Participant (a “benefitted Lender”) shall
at any time receive any payment of all or part of its Advances, or
interest thereon, or receive any Collateral in respect thereof
(whether voluntarily or involuntarily or by set-off) in a greater
proportion than any such payment to and Collateral received by any
other Lender, if any, in respect of such other Lender’s
Advances, or interest thereon, and such greater proportionate
payment or receipt of Collateral is not expressly permitted
hereunder, such benefitted Lender shall purchase for cash from the
other Lenders a participation in such portion of each such other
Lender’s Advances, or shall provide such other Lender with
the benefits of any such Collateral, or the proceeds thereof, as
shall be necessary to cause such benefitted Lender to share the
excess payment or benefits of such Collateral or proceeds ratably
with each of the other Lenders; provided , however ,
that if all or any portion of such excess payment or benefits is
thereafter recovered from such benefitted Lender, such purchase
shall be rescinded, and the purchase price and benefits returned,
to the extent of such recovery, but without interest. Each Lender
so purchasing a portion of another Lender’s Advances may
exercise all rights of payment (including, without limitation,
rights of set-off) with respect to such portion as fully as if such
Lender were the direct holder of such portion.
(e) Unless
Agent shall have been notified by telephone, confirmed in writing,
by any Lender that such Lender will not make the amount which would
constitute its applicable Commitment Percentage of the Advances
available to Agent, Agent may (but shall not be obligated to)
assume that such Lender shall make such amount available to Agent
on the next Settlement Date and, in reliance upon such assumption,
make available to Borrowers a corresponding amount. Agent will
promptly notify Borrowers of its receipt of any such notice from a
Lender. If such amount is made available to Agent on a date after
such next Settlement Date, such Lender shall pay to Agent on demand
an amount equal to the product of (i) the daily average
Federal Funds Effective Rate (computed on the basis of a year of
360 days) during such period as quoted by Agent, times (ii)
such amount, times (iii) the number of days from and including
such Settlement Date to the date on which such amount becomes
immediately available to Agent. A certificate of Agent submitted to
any Lender with respect to any amounts owing under this paragraph
(e) shall be conclusive, in the absence of demonstrable error.
If such
39
amount is not
in fact made available to Agent by such Lender within three
(3) Business Days after such Settlement Date, Agent shall be
entitled to recover such an amount, with interest thereon at the
rate per annum then applicable to such Revolving Advances
hereunder, on demand from Borrowers; provided ,
however , that Agent’s right to such recovery shall
not prejudice or otherwise adversely affect Borrowers’ rights
(if any) against such Lender.
2.20 Periodic
Computations of Dollar Equivalent Amounts of Outstanding Letters of
Credit; Requests for Additional Optional Currencies
.
The
Agent will determine the Dollar Equivalent amount of
(i) proposed Letters of Credit to be denominated in an
Optional Currency as of the requested date of issuance, as the case
may be, and (ii) outstanding Letters of Credit denominated in
an Optional Currency as of the last Business Day of each month,
(each such date under clauses (i) and (ii), a
“Computation Date”). The Borrowing Agent may deliver to
the Agent a written request that Letters of Credit to be issued
hereunder be permitted to be issued in any other lawful currency
(other than Dollars), in addition to the currency specified in the
definition of “Optional Currency” herein provided that
such currency must be freely convertible into Dollars. The Agent
will promptly notify the Lenders of any such request. The Agent and
each Lender may grant or accept such request in their sole
discretion. The Agent will promptly notify the Borrowing Agent of
the acceptance or rejection by the Agent and each of the Lenders of
the Borrowing Agent’s request. The requested currency shall
be approved as an Optional Currency hereunder only if the Agent and
all of the Lenders approve the Borrowing Agent’s
request.
Borrowers
shall apply the proceeds of Advances (i) to repay
Indebtedness, if any, (ii) to pay fees and expenses relating
to the transaction contemplated by this Agreement, (iii) for
general corporate purposes and (iv) to provide for working
capital needs.
(a) Notwithstanding
anything to the contrary contained herein, in the event any Lender
(x) has refused (which refusal constitutes a breach by such
Lender of its obligations under this Agreement) to make available
its portion of any Advance or (y) notifies either Agent or
Borrowing Agent that it does not intend to make available its
portion of any Advance (if the actual refusal would constitute a
breach by such Lender of its obligations under this Agreement)
(each, a “Lender Default”), all rights and obligations
hereunder of such Lender (a “Defaulting Lender”) as to
which a Lender Default is in effect and of the other parties hereto
shall be modified to the extent of the express provisions of this
Section 2.22 while such Lender Default remains in
effect.
(b) Advances
shall be incurred pro rata from Lenders (the “Non-Defaulting
Lenders”) which are not Defaulting Lenders based on their
respective Commitment Percentages, and no Commitment Percentage of
any Lender or any pro rata share of any Advances required to be
advanced by any Lender shall be increased as a result of such
Lender Default. Amounts received in respect of principal of any
type of Advances shall be applied to reduce the applicable Advances
of each Lender pro rata based on the aggregate of the
40
outstanding
Advances of that type of all Lenders at the time of such
application; provided, that, such amount shall not be applied to
any Advances of a Defaulting Lender at any time when, and to the
extent that, the aggregate amount of Advances of any Non-Defaulting
Lender exceeds such Non-Defaulting Lender’s Commitment
Percentage of all Advances then outstanding.
(c) A
Defaulting Lender shall not be entitled to give instructions to
Agent or to approve, disapprove, consent to or vote on any matters
relating to this Agreement and the Other Documents. All amendments,
waivers and other modifications of this Agreement and the Other
Documents may be made without regard to a Defaulting Lender and,
for purposes of the definition of “Required Lenders”, a
Defaulting Lender shall be deemed not to be a Lender and not to
have Advances outstanding.
(d) Other
than as expressly set forth in this Section 2.22, the rights
and obligations of a Defaulting Lender (including the obligation to
indemnify Agent) and the other parties hereto shall remain
unchanged. Nothing in this Section 2.22 shall be deemed to
release any Defaulting Lender from its obligations under this
Agreement and the Other Documents, shall alter such obligations,
shall operate as a waiver of any default by such Defaulting Lender
hereunder, or shall prejudice any rights which any Borrower, Agent
or any Lender may have against any Defaulting Lender as a result of
any default by such Defaulting Lender hereunder.
(e) In
the event a Defaulting Lender retroactively cures to the
satisfaction of Agent the breach which caused a Lender to become a
Defaulting Lender, such Defaulting Lender shall no longer be a
Defaulting Lender and shall be treated as a Lender under this
Agreement (provided that such reinstatement as a
“Lender” shall be without prejudice to any claims that
Borrowers may have against the Defaulting Lender as a result of its
default).
2.23 Currency
Fluctuations .
If
on any Computation Date the aggregate balance of outstanding
Revolving Advances and the Dollar Equivalent amount of Letters of
Credit outstanding is in excess of the maximum amount of such
Advances permitted hereunder as a result of a change in exchange
rates between the Optional Currency and Dollars, then the Agent
shall notify the Borrowing Agent of the same. The Borrowers shall
pay or prepay the Revolving Advances (subject to Borrowers’
indemnity obligations hereunder) within one (1) Business Day
after receiving such notice such that the aggregate balance of
outstanding Revolving Advances and the Dollar Equivalent amount of
Letters of Credit outstanding shall not exceed the maximum amount
of such Advances permitted hereunder after giving effect to such
payments or prepayments.
(a) If
for the purposes of obtaining judgment in any court it is necessary
to convert a sum due hereunder in any currency (the “Original
Currency”) into another currency (the “Other
Currency”), the parties hereby agree, to the fullest extent
permitted by law, that the rate of exchange used shall be that at
which in accordance with normal banking procedures each Lender
could purchase the Original Currency with the Other Currency after
any premium and costs of exchange on the Business Day preceding
that on which final judgment is given.
41
(b) The
obligation of the Borrowers in respect of any sum due from the
Borrowers to any Lender hereunder shall, notwithstanding any
judgment in an Other Currency, whether pursuant to a judgment or
otherwise, be discharged only to the extent that, on the Business
Day following receipt by any Lender of any sum adjudged to be so
due in such Other Currency, such Lender may in accordance with
normal banking procedures purchase the Original Currency with such
Other Currency. If the amount of the Original Currency so purchased
is less than the sum originally due to such Lender in the Original
Currency, Borrowers agree, as a separate obligation and
notwithstanding any such judgment or payment, to indemnify such
Lender against such loss.
2.25 Increase
of Maximum Revolving Advance Amount .
If
at any time after the Closing Date, and so long as no Event of
Default or Default has occurred and is continuing, the Borrowers
desire to increase the Maximum Revolving Advance Amount, the
Borrowers shall notify the Agent, who will promptly notify each
Lender thereof (such notice to contain a description of the
increase in the rate of interest or any fees contemplated in the
last sentence of this Section 2.25, if any), provided that any
such increase shall be in a minimum of Ten Million and 00/100
Dollars ($10,000,000.00) and the aggregate of all such increases
shall not exceed One Hundred Fifty Million and 00/100 Dollars
($150,000,000.00). The existing Lenders shall have the right (but
not the obligation) at any time or from time to time within fifteen
(15) Business Days following such notice to increase their
respective commitments to make Advances so as to provide such
additional commitment to make Advances pro-rata in accordance with
the Commitment Percentages of each, and any portion of such
requested increase which is not provided by any such existing
Lender shall be available to the other existing Lenders; provided,
that if more than one existing Lender desires to increase its
commitment to make Advances in respect of the portion not provided
by an existing Lender, such participating Lenders shall provide
such portion of the additional commitments to make Advances on a
pro rata basis in accordance with the proportion that their
respective Commitment Percentage bears to each other, and
thereafter, to the extent not provided by existing Lenders, to any
additional lending institution or institutions proposed by the
Borrowers and which is approved by the Agent (which approval will
not be unreasonably withheld) and which becomes a party to this
Agreement pursuant to documentation reasonably acceptable to the
Agent and prepared at the Borrowers’ expense, which
documentation may be executed by the Loan Parties and the Agent (as
agent for the Lenders) without further consent or action of the
Lenders, such consent hereby deemed to be irrevocably given to the
Agent by the Lenders; provided , however , that the
Borrowers shall have the right to have all of such increase
provided by such approved additional lending institution or
institutions if all the existing Lenders decline to increase their
commitments to make Advances to accommodate any such requested
increase. In the event of any such increase in the Maximum
Revolving Advance Amount and in the commitment to make Advances of
any Lender affected pursuant to the terms of this
Section 2.25, new Revolving Credit Notes shall, to the extent
deemed reasonably necessary or appropriate by the Agent (or as may
be reasonably requested by an existing Lender increasing its
commitment to make Advances hereunder or an additional Lender that
becomes a party hereto), be executed and delivered by the Borrowers
and, to the extent deemed appropriate by the Agent, the surrender
and cancellation of existing Revolving Credit Note(s) shall be
effected; and the Loan Parties shall execute and deliver such
additional documentation setting forth the new commitments to make
Advances as the Agent shall reasonably request (which
documentation
42
may be executed
by the Loan Parties and the Agent (as agent for the Lenders)
without further consent or action of the Lenders, such consent
herein is deemed to be irrevocably given to the Agent by the
Lenders). Each Lender hereby agrees that the Agent may, with the
prior consent of the Borrowers, increase the rate of interest or
increase any fee payable by the Borrowers to the Lenders pursuant
to this Agreement with respect to all Advances in order to effect
any such increase in the Maximum Revolving Advance Amount pursuant
to the terms of this Section 2.25.
(a) Interest
on Advances shall be payable in arrears on the first (1
st ) day of each month with respect to Domestic
Rate Loans and on the last day of the Term and, with respect to
Eurodollar Rate Loans, at the end of each Interest Period or, for
Eurodollar Rate Loans with an Interest Period in excess of three
(3) months, at the earlier of (a) each three months on
the anniversary date of the commencement of such Eurodollar Rate
Loan or (b) the end of the Interest Period. Interest charges
shall be computed on the actual principal amount of Advances
outstanding during the month (the “Monthly Advances”).
On the Closing Date through the day immediately preceding the first
(1 st
) Incentive Pricing Effective Date,
(x) Domestic Rate Loans shall bear interest for each day at a
rate per annum equal to the Alternate Base Rate plus one
quarter of one percent (.25%) and (y) Eurodollar Rate Loans
shall bear interest for each applicable Interest Period at a rate
per annum equal to the Eurodollar Rate plus one and one
quarter of one percent (1.25%).
(b) Subject
to the terms and conditions of this Agreement, during each calendar
month of the Borrowers, in accordance with Section 9.2 hereof,
the Borrowing Agent shall submit to the Agent a Borrowing Base
Certificate as of the last day of the prior calendar month. Upon
receipt of the Borrowing Base Certificate by the Agent as of
January 31, 2006 and as of the last day of each calendar month
thereafter, the Borrowers’ Availability Coverage Ratio shall
be calculated for the calendar month then ending. From the first
(1 st
) day of the first (1
st ) full calendar month following the
Agent’s receipt of such Borrowing Base Certificate (the
“Incentive Pricing Effective Date”) until the next
Incentive Pricing Effective Date, (x) Domestic Rate Loans
shall bear interest for each day at a rate per annum equal to the
Alternate Base Rate plus the applicable margin determined by
reference to the Borrowers’ Availability Coverage Ratio (the
“Applicable Base Rate Margin”) set forth below and
(y) Eurodollar Rate Loans shall bear interest during each
applicable Interest Period at a rate per annum equal to the
Eurodollar Rate plus the applicable margin determined by reference
to the Borrowers’ Availability Coverage Ratio (the
“Applicable Eurodollar Rate Margin”) set forth
below:
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Applicable
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Applicable Letter
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Applicable
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Availability
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Eurodollar Rate
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Applicable Base
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of Credit Fee
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Commitment Fee
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Tier
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Coverage Ratio
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Margin
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Rate Margin
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Percentage
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Percentage
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³ 5.00 to 1.00
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1.00
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%
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0
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%
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1.00
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%
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0.20
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%
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³ 4.00 to 1.00 < 5.00 to 1.00
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1.25
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%
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0.25
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%
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1.25
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%
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0.25
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%
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³ 3.00 to 1.00 < 4.00 to 1.00
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1.50
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%
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0.50
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%
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1.50
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%
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0.30
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%
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< 3.00
to 1.00
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1.75
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%
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1.00
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%
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1.75
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%
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0.35
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%
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(c) Subject
to the terms and conditions of this Agreement, in the event that
the Borrowers fail to timely deliver the Borrowing Base Certificate
in accordance with Section 9.2 hereof, the Applicable Base
Rate Margin, the Applicable Eurodollar Rate Margin and the
Applicable Letter of Credit Fee Percentage shall be the amount
corresponding to Tier IV until the delivery of such Borrowing Base
Certificate. In addition, subject to the terms and conditions of
this Agreement, in the event that the Borrowers fail to timely
deliver the Borrowing Base Certificate in accordance with
Section 9.2 hereof, the Applicable Commitment Fee Percentage
shall be the amount corresponding to Tier I until the delivery of
such Borrowing Base Certificate.
(d) Whenever,
subsequent to the date of this Agreement, the Alternate Base Rate
is increased or decreased, the applicable Contract Rate for
Domestic Rate Loans shall be similarly changed without notice or
demand of any kind by an amount equal to the amount of such change
in the Alternate Base Rate during the time such change or changes
remain in effect. The Eurodollar Rate shall be adjusted with
respect to Eurodollar Rate Loans without notice or demand of any
kind on the effective date of any change in the Reserve Percentage
as of such effective date. Upon and after the occurrence of an
Event of Default, and during the continuation thereof, the
Obligations shall bear interest at the applicable Contract Rate
plus two percent (2%) per annum (the “Default
Rate”).
3.2 Letter of
Credit Fees .
(a) Borrowers
shall pay (x) to Agent, for the ratable benefit of Lenders,
fees for each Letter of Credit for the period from and excluding
the date of issuance of same to and including the date of
expiration or termination, equal to the average daily face Dollar
Equivalent amount of each outstanding Letter of Credit multiplied
by (i) until the first (1st) Incentive Pricing Effective Date,
one and one quarter of one percent (1.25%) per annum and
(ii) on and after the first (1st) Incentive Pricing Effective
Date, the applicable percentage per annum determined by reference
to the Borrowers’ Availability Coverage Ratio as set forth in
Section 3.1(b) hereof (the “Applicable Letter of Credit
Fee Percentage”), such fees to be calculated on the basis of
a 360-day year for the actual number of days elapsed and to be
payable quarterly in arrears on the first day of each fiscal
quarter and on the last day of the Term and (y) to the Issuer,
for its own account, fees for each Letter of Credit for the period
from and excluding the date of issuance of same to and including
the date of expiration or termination, equal to the average daily
face Dollar Equivalent amount of each outstanding Letter of Credit
multiplied by one eighth of one percent (.125%) per annum, such
fees to be calculated on the basis of a three
44
hundred sixty
(360) day year for the actual number of days elapsed and to be
payable quarterly in arrears on the first (1
st ) day of each fiscal quarter and on the last day
of the Term and (z) to the Issuer, for its own account, any
and all fees and expenses as agreed upon by the Issuer and the
Borrowing Agent in connection with any Letter of Credit, including,
without limitation, in connection with the opening, amendment or
renewal of any such Letter of Credit and any acceptances created
thereunder and shall reimburse Agent for any and all fees and
expenses, if any, paid by Agent to the Issuer (all of the foregoing
fees, the “Letter of Credit Fees”). All such charges
shall be deemed earned in full on the date when the same are due
and payable hereunder and shall not be subject to rebate or
proration upon the termination of this Agreement for any reason.
Any such charge in effect at the time of a particular transaction
shall be the charge for that transaction, notwithstanding any
subsequent change in the Issuer’s prevailing charges for that
type of transaction. All Letter of Credit Fees payable hereunder
shall be deemed earned in full on the date when the same are due
and payable hereunder and shall not be subject to rebate or
proration upon the termination of this Agreement for any
reason.
Immediately
upon the request of the Agent after the occurrence and during the
continuance of an Event of Default, Borrowers will cause cash to be
deposited and maintained in an account with Agent, as cash
collateral, in an amount equal to one hundred and five percent
(105%) of the outstanding Dollar Equivalent amount of Letters of
Credit, and each Borrower hereby irrevocably authorizes Agent, in
its discretion, on such Borrower’s behalf and in such
Borrower’s name, to open such an account and to make and
maintain deposits therein, or in an account opened by such
Borrower, in the amounts required to be made by such Borrower, out
of the proceeds of Receivables or other Collateral or out of any
other funds of such Borrower coming into any Lender’s
possession at any time. Agent will invest such cash collateral
(less applicable reserves) in such short-term money-market items as
to which Agent and such Borrower mutually agree and the net return
on such investments shall be credited to such account and
constitute additional cash collateral. So long as such Default or
Event of Default is continuing, no Borrower may withdraw amounts
credited to any such
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