EXHIBIT 10.12
EXECUTION COPY
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PLASTIPAK HOLDINGS, INC.
FIFTH AMENDED AND RESTATED
REVOLVING CREDIT AGREEMENT
DATED AS OF JANUARY 28, 2005
COMERICA BANK, AS LEAD ARRANGER
AND ADMINISTRATIVE AGENT
FLEET NATIONAL BANK, AS SYNDICATION AGENT
JPMORGAN CHASE BANK N.A., AS SYNDICATION AGENT
STANDARD FEDERAL BANK N.A., AS DOCUMENTATION AGENT
BANK OF MONTREAL, AS DOCUMENTATION AGENT
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TABLE OF CONTENTS
1. DEFINITIONS....................................................................................... 1
1.1 CERTAIN DEFINED TERMS...................................................................... 1
2. REVOLVING CREDIT.................................................................................. 26
2.1 COMMITMENT................................................................................. 26
2.2 ACCRUAL OF INTEREST AND MATURITY; EVIDENCE OF INDEBTEDNESS................................. 26
2.3 REQUESTS FOR AND REFUNDINGS AND CONVERSIONS OF ADVANCES.................................... 27
2.4 DISBURSEMENT OF ADVANCES................................................................... 29
2.5 SWING LINE ADVANCES........................................................................ 31
2.6 PRIME-BASED INTEREST PAYMENTS.............................................................. 35
2.7 EUROCURRENCY-BASED INTEREST PAYMENTS AND QUOTED RATE INTEREST PAYMENTS..................... 35
2.8 INTEREST PAYMENTS ON CONVERSIONS........................................................... 35
2.9 INTEREST ON DEFAULT........................................................................ 36
2.10 OPTIONAL PREPAYMENT OF REVOLVING CREDIT ADVANCES........................................... 36
2.11 RESERVED................................................................................... 36
2.12 PRIME-BASED ADVANCE IN ABSENCE OF ELECTION OR UPON DEFAULT................................. 37
2.13 REVOLVING CREDIT FACILITY FEE.............................................................. 37
2.14 MANDATORY REDUCTION OF INDEBTEDNESS........................................................ 37
2.15 MANDATORY REPAYMENT OF REVOLVING ADVANCES; MANDATORY REDUCTION OF REVOLVING CREDIT
AGGREGATE COMMITMENT....................................................................... 38
2.16 OPTIONAL REDUCTION OR TERMINATION OF REVOLVING CREDIT AGGREGATE COMMITMENT................. 39
2.17 EXTENSION OF REVOLVING CREDIT MATURITY DATE................................................ 39
2.18 APPLICATION OF ADVANCES.................................................................... 40
3. LETTERS OF CREDIT................................................................................. 40
3.1 LETTERS OF CREDIT.......................................................................... 40
3.2 CONDITIONS TO ISSUANCE..................................................................... 41
3.3 NOTICE..................................................................................... 42
3.4 LETTER OF CREDIT FEES...................................................................... 42
3.5 OTHER FEES................................................................................. 43
3.6 DRAWS AND DEMANDS FOR PAYMENT UNDER LETTERS OF CREDIT...................................... 43
3.7 OBLIGATIONS IRREVOCABLE.................................................................... 45
3.8 RISK UNDER LETTERS OF CREDIT............................................................... 46
3.9 INDEMNIFICATION............................................................................ 47
3.10 RIGHT OF REIMBURSEMENT..................................................................... 48
3.11 EXISTING LETTERS OF CREDIT................................................................. 48
4. MARGIN ADJUSTMENTS................................................................................ 48
4.1 MARGIN ADJUSTMENTS......................................................................... 48
5. CONDITIONS........................................................................................ 49
5.1 EXECUTION OF NOTES AND THIS AGREEMENT...................................................... 49
5.2 CORPORATE AUTHORITY........................................................................ 49
5.3 COLLATERAL DOCUMENTS....................................................................... 50
5.4 INSURANCE.................................................................................. 50
5.5 COMPLIANCE WITH CERTAIN DOCUMENTS AND AGREEMENTS........................................... 50
5.6 OPINION OF COUNSEL......................................................................... 50
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5.7 BORROWERS' CERTIFICATE..................................................................... 50
5.8 PAYMENT OF FEES............................................................................ 50
5.9 CONTINUING CONDITIONS...................................................................... 51
5.10 FOREIGN SUBSIDIARIES....................................................................... 51
6. REPRESENTATIONS AND WARRANTIES.................................................................... 52
6.1 CORPORATE AUTHORITY........................................................................ 52
6.2 DUE AUTHORIZATION - BORROWERS.............................................................. 52
6.3 DUE AUTHORIZATION - SUBSIDIARIES........................................................... 52
6.4 LIENS...................................................................................... 53
6.5 TAXES...................................................................................... 53
6.6 NO DEFAULTS................................................................................ 53
6.7 ENFORCEABILITY OF AGREEMENT AND LOAN DOCUMENTS -- BORROWERS................................ 53
6.8 ENFORCEABILITY OF LOAN DOCUMENTS -- SUBSIDIARIES........................................... 53
6.9 COMPLIANCE WITH LAWS....................................................................... 53
6.10 NON-CONTRAVENTION -- BORROWERS............................................................. 54
6.11 NON-CONTRAVENTION -- SUBSIDIARIES.......................................................... 54
6.12 NO LITIGATION.............................................................................. 54
6.13 CONSENTS, APPROVALS AND FILINGS, ETC....................................................... 55
6.14 AGREEMENTS AFFECTING FINANCIAL CONDITION................................................... 55
6.15 NO INVESTMENT COMPANY OR MARGIN STOCK...................................................... 55
6.16 ERISA...................................................................................... 55
6.17 CONDITIONS AFFECTING BUSINESS OR PROPERTIES................................................ 56
6.18 ENVIRONMENTAL AND SAFETY MATTERS........................................................... 56
6.19 SUBSIDIARIES............................................................................... 56
6.20 ACCURACY OF INFORMATION.................................................................... 56
6.21 LABOR RELATIONS............................................................................ 57
6.22 SOLVENCY................................................................................... 57
6.23 CAPITALIZATION............................................................................. 57
6.24 RESERVED................................................................................... 58
6.25 SENIOR UNSECURED NOTE DOCUMENTS............................................................ 58
7. AFFIRMATIVE COVENANTS............................................................................. 58
7.1 FINANCIAL STATEMENTS....................................................................... 58
7.2 CERTIFICATES; OTHER INFORMATION............................................................ 59
7.3 PAYMENT OF OBLIGATIONS..................................................................... 59
7.4 CONDUCT OF BUSINESS AND MAINTENANCE OF EXISTENCE........................................... 59
7.5 MAINTENANCE OF PROPERTY; INSURANCE......................................................... 60
7.6 INSPECTION OF PROPERTY; BOOKS AND RECORDS, DISCUSSIONS; AUDITS............................. 60
7.7 NOTICES.................................................................................... 61
7.8 HAZARDOUS MATERIAL LAWS.................................................................... 61
7.9 DEBT SERVICE COVERAGE RATIO................................................................ 62
7.10 SENIOR SECURED DEBT RATIO.................................................................. 62
7.11 LEVERAGE RATIO............................................................................. 62
7.12 CONSOLIDATED TANGIBLE NET WORTH............................................................ 62
7.13 TAXES...................................................................................... 62
7.14 GOVERNMENTAL AND OTHER APPROVALS........................................................... 62
7.15 COMPLIANCE WITH ERISA...................................................................... 63
7.16 ERISA NOTICES.............................................................................. 63
7.17 SECURITY; FOREIGN SIGNIFICANT SUBSIDIARIES................................................. 63
7.18 DEFENSE OF COLLATERAL...................................................................... 64
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7.19 USE OF PROCEEDS............................................................................ 64
7.20 FUTURE SUBSIDIARIES; ADDITIONAL COLLATERAL................................................. 64
7.21 FURTHER ASSURANCES......................................................................... 65
8. NEGATIVE COVENANTS................................................................................ 65
8.1 LIMITATION ON DEBT......................................................................... 65
8.2 LIMITATION ON LIENS........................................................................ 66
8.3 LIMITATION ON GUARANTEE OBLIGATIONS........................................................ 67
8.4 ACQUISITIONS............................................................................... 67
8.5 LIMITATION ON MERGERS, OR SALE OF ASSETS................................................... 67
8.6 RESTRICTED PAYMENTS........................................................................ 68
8.7 LIMITATION ON INVESTMENTS, LOANS AND ADVANCES.............................................. 68
8.8 TRANSACTIONS WITH AFFILIATES............................................................... 69
8.9 SALE AND LEASEBACK......................................................................... 70
8.10 LIMITATION ON NEGATIVE PLEDGE CLAUSES...................................................... 70
8.11 PREPAYMENT OF DEBTS........................................................................ 70
8.12 AMENDMENT OF CERTAIN DOCUMENTS RELATING TO DEBT............................................ 70
8.13 MODIFICATION OF CERTAIN AGREEMENTS......................................................... 70
8.14 LIMITATION ON CAPITAL EXPENDITURES......................................................... 71
9. DEFAULTS.......................................................................................... 71
9.1 EVENTS OF DEFAULT.......................................................................... 71
9.2 EXERCISE OF REMEDIES....................................................................... 73
9.3 RIGHTS CUMULATIVE.......................................................................... 73
9.4 WAIVER BY BORROWERS OF CERTAIN LAWS........................................................ 73
9.5 WAIVER OF DEFAULTS......................................................................... 73
9.6 SET OFF.................................................................................... 74
10. PAYMENTS, RECOVERIES AND COLLECTIONS.............................................................. 74
10.1 PAYMENT PROCEDURE.......................................................................... 74
10.2 APPLICATION OF PROCEEDS OF COLLATERAL...................................................... 75
10.3 PRO-RATA RECOVERY.......................................................................... 76
11. CHANGES IN LAW OR CIRCUMSTANCES; INCREASED COSTS.................................................. 76
11.1 REIMBURSEMENT OF PREPAYMENT COSTS.......................................................... 76
11.2 EUROCURRENCY LENDING OFFICE................................................................ 76
11.3 CIRCUMSTANCES AFFECTING EUROCURRENCY-BASED RATE AVAILABILITY............................... 77
11.4 LAWS AFFECTING EUROCURRENCY-BASED ADVANCE AVAILABILITY..................................... 77
11.5 INCREASED COST OF EUROCURRENCY-BASED ADVANCES.............................................. 77
11.6 CAPITAL ADEQUACY AND OTHER INCREASED COSTS................................................. 78
11.7 SUBSTITUTION OF LENDERS.................................................................... 79
11.8 RIGHT OF LENDERS TO FUND THROUGH BRANCHES AND AFFILIATES................................... 79
12. AGENT............................................................................................. 79
12.1 APPOINTMENT OF AGENT....................................................................... 79
12.2 DEPOSIT ACCOUNT WITH AGENT................................................................. 80
12.3 SCOPE OF AGENT'S DUTIES.................................................................... 80
12.4 SUCCESSOR AGENT............................................................................ 81
12.5 AGENT IN ITS INDIVIDUAL CAPACITY........................................................... 81
12.6 CREDIT DECISIONS........................................................................... 81
12.7 AUTHORITY OF AGENT TO ENFORCE THIS AGREEMENT............................................... 81
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12.8 INDEMNIFICATION............................................................................ 82
12.9 KNOWLEDGE OF DEFAULT....................................................................... 82
12.10 AGENT'S AUTHORIZATION; ACTION BY LENDERS................................................... 82
12.11 ENFORCEMENT ACTIONS BY THE AGENT........................................................... 83
12.12 COLLATERAL MATTERS; REAL ESTATE LIEN RELEASE EVENT......................................... 83
12.13 AGENT'S FEES............................................................................... 84
12.14 NO DUTIES IMPOSED ON DOCUMENTATION AGENTS OR SYNDICATIONS AGENTS........................... 84
13. MISCELLANEOUS..................................................................................... 84
13.1 ACCOUNTING PRINCIPLES...................................................................... 84
13.2 CONSENT TO JURISDICTION.................................................................... 85
13.3 LAW OF MICHIGAN............................................................................ 85
13.4 INTEREST................................................................................... 85
13.5 CLOSING COSTS AND OTHER COSTS; INDEMNIFICATION............................................. 85
13.6 NOTICES.................................................................................... 87
13.7 FURTHER ACTION............................................................................. 87
13.8 SUCCESSORS AND ASSIGNS; PARTICIPATIONS; ASSIGNMENTS........................................ 87
13.9 INDULGENCE................................................................................. 90
13.10 COUNTERPARTS............................................................................... 90
13.11 AMENDMENT AND WAIVER....................................................................... 90
13.12 CONFIDENTIALITY............................................................................ 91
13.13 WITHHOLDING TAXES.......................................................................... 91
13.14 TAXES AND FEES............................................................................. 92
13.15 WAIVER OF JURY TRIAL....................................................................... 92
13.16 COMPLETE AGREEMENT; CONFLICTS.............................................................. 92
13.17 SEVERABILITY............................................................................... 93
13.18 TABLE OF CONTENTS AND HEADINGS............................................................. 93
13.19 CONSTRUCTION OF CERTAIN PROVISIONS......................................................... 93
13.20 INDEPENDENCE OF COVENANTS.................................................................. 93
13.21 RELIANCE ON AND SURVIVAL OF VARIOUS PROVISIONS............................................. 93
13.22 COMPLETE AGREEMENT; AMENDMENT AND RESTATEMENT.............................................. 93
13.23 TERMINATION OF PLEDGE AGREEMENTS........................................................... 94
13.24 YOUNG PARTIES.............................................................................. 94
13.25 RELEASE OF REAL ESTATE COLLATERAL.......................................................... 94
13.26 FOREIGN SUBSIDIARIES....................................................................... 94
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TABLE OF CONTENTS
(continued)
SCHEDULES
Schedule 1.1 Pricing Matrix
Schedule 1.2 Percentages and Allocations
Schedule 1.3 Existing Letters of Credit
Schedule 5.2 List of Jurisdictions in which Holdings and/or
Subsidiaries do business
Schedule 5.3 Real Estate Documentation
Schedule 5.3(b) List of Jurisdictions in which to file financing
statements
Schedule 6.9(a) Compliance with Laws
Schedule 6.9(c) Tax Identification Numbers
Schedule 6.12 Litigation
Schedule 6.16 Employee Pension Benefit Plans
Schedule 6.18 Environmental Matters
Schedule 6.19 Subsidiaries
Schedule 6.20 Contingent Obligations
Schedule 6.23 Capitalization
Schedule 8.1 Existing Funded Debt
Schedule 8.2 Permitted Liens
Schedule 8.3 Existing Guaranties
Schedule 8.7 Existing Investments
Schedule 13.6 Notices
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TABLE OF CONTENTS
(continued)
EXHIBITS
A FORM OF REQUEST FOR REVOLVING CREDIT ADVANCE
B FORM OF REVOLVING CREDIT NOTE
C FORM OF SWING LINE NOTE
D FORM OF REQUEST FOR SWING LINE ADVANCE
E FORM OF NOTICE OF LETTERS OF CREDIT
F FORM OF SWING LINE LENDER PARTICIPATION CERTIFICATE
G FORM OF BORROWER ADDENDUM
H FORM OF ASSIGNMENT AGREEMENT
I FORM OF COVENANT COMPLIANCE REPORT
J FORM OF INTERCOMPANY NOTE
K FORM OF BORROWING BASE CERTIFICATE
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FIFTH AMENDED AND RESTATED
REVOLVING CREDIT AGREEMENT
This Fifth Amended and Restated Revolving Credit Agreement ("Agreement")
is made as of the 28th day of January, 2005, by and among the financial
institutions from time to time signatory hereto (individually a "Lender," and
any and all such financial institutions collectively the "Lenders"), Comerica
Bank, as administrative agent for the Lenders (in such capacity, "Agent"),
Plastipak Holdings, Inc., a Michigan corporation ("Holdings"), Plastipak
Packaging, Inc., a Delaware corporation ("Packaging"), and the other Borrowers
(as defined below) from time to time signatory hereto.
RECITALS:
A. Packaging and the other Borrowers have requested that the Lenders
continue to extend to them credit and letters of credit as previously extended
by Comerica Bank, Key Corporate Capital Inc. and Bank One, Michigan, under the
Revolving Credit Agreement dated August 31, 1982, as amended and restated
pursuant to the Amended and Restated Credit Agreement dated January 19, 1993, as
amended, and as further amended and restated pursuant to the Second Amended and
Restated Credit Agreement dated as of September 1, 1994, by and between
Packaging and such banks, and as further amended and restated pursuant to the
Third Amended and Restated Revolving Credit Agreement dated as of December 22,
1999, as amended, and as further amended and restated pursuant to the Fourth
Amended and Restated Revolving Credit Agreement dated as of August 20, 2001 as
amended, by and among Holdings, Packaging, the other Borrowers party thereto,
the Lenders party thereto and Agent (as amended, the "Prior Credit Agreement")
on the terms and conditions set forth herein.
B. The Lenders are prepared to extend such credit as aforesaid, but only
upon the terms and conditions set forth in this Agreement.
C. This Agreement shall constitute an amendment and restatement of the
Prior Credit Agreement as provided in Section 13.22 hereof.
NOW THEREFORE, in consideration of the covenants contained herein,
Holdings, the Borrowers, the Lenders and Agent agree as follows:
1. DEFINITIONS
1.1 Certain Defined Terms. For the purposes of this Agreement the
following terms will have the following meanings:
"2002 Senior Notes" shall mean the unsecured notes issued by Holdings in
2002 pursuant to an amendment to the Senior Unsecured Debt Indenture, which
notes were issued in the original principal amount of $50,000,000.
"Account" shall mean any right to payment of a Person for goods sold or
leased or for services rendered.
"Account Party(ies)" shall mean, with respect to any Letter of Credit, the
account party or parties (which shall be a Borrower or, with the counter
signature of Packaging, a Guarantor or, if a Foreign
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Subsidiary has complied with the requirements of Section 5.10 hereof, a Foreign
Subsidiary) as named in an application to the Agent for the issuance of such
Letter of Credit.
"Advance(s)" shall mean, as the context may indicate, a borrowing
requested by any Borrower, and made by the Lenders under Section 2.1 hereof or
requested by any Borrower and made by the Swing Line Lender under Section 2.5
hereof, including without limitation any readvance, refunding or conversion of
such borrowing pursuant to Section 2.3 or 2.5 hereof, any advance in respect of
a Letter of Credit under Section 3.6 hereof (including without limitation the
unreimbursed amount of any draws under any Letters of Credit), and shall
include, as applicable, a Eurocurrency-based Advance, a Prime-based Advance, and
a Quoted Rate Advance.
"Affected Lender" shall have the meaning set forth in Section 11.7.
"Affiliate" shall mean, with respect to any Person, any other Person or
group acting in concert in respect of the first Person that, directly or
indirectly, through one or more intermediaries, controls, or is controlled by,
or is under common control with such first Person. For purposes of this
definition, "control" (including, with correlative meanings, the terms
"controlled by" and "under common control with"), as used with respect to any
Person or group of Persons, shall mean the possession, directly or indirectly,
of the power to direct or cause the direction of management and policies of such
Person, whether through the ownership of voting securities or by contract or
otherwise. Unless otherwise specified to the contrary herein, or the context
requires otherwise, Affiliate shall refer to Affiliates of Holdings.
"Agent" shall mean Comerica Bank, in its capacity as agent for the Lenders
hereunder, or any successor agent appointed in accordance with Section 12.4
hereof.
"Agent's Correspondent" shall mean Agent's Grand Cayman Branch (or for the
account of said branch office, at Agent's main office in Detroit, Michigan,
United States); or such other bank or banks as Agent may from time to time
designate by written notice to Borrowers and the Lenders.
"Alternate Base Rate" shall mean, for any day, an interest rate per annum
equal to the Federal Funds Effective Rate in effect on such day, plus one
percent (1%).
"Applicable Fee Percentage" shall mean, as of any date of determination
thereof, the applicable percentage used to calculate certain of the fees due and
payable hereunder, determined by reference to the appropriate columns in the
Pricing Matrix attached to this Agreement as Schedule 1.1.
"Applicable Interest Rate" shall mean (a) for Advances of the Revolving
Credit, the Eurocurrency-based Rate or the Prime-based Rate and (b) for Advances
of the Swing Line, the Prime-based Rate or a Quoted Rate, in each case as
selected by Borrowers from time to time subject to the terms and conditions of
this Agreement.
"Applicable Margin" shall mean, as of any date of determination thereof,
the applicable interest rate margin, determined by reference to the appropriate
columns in the Pricing Matrix attached to this Agreement as Schedule 1.1.
"Asset Sale" shall mean the sale, transfer or other disposition by the
Borrowers or any Subsidiary of any asset to any Person, other than sales,
transfers or other dispositions of inventory in the ordinary course of business
and sales of assets that have been damaged, become obsolete or are no longer
useable.
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"Assignment Agreement" shall mean any Assignment Agreement substantially
in the form of the Assignment Agreement attached hereto as Exhibit H, as amended
or otherwise modified from time to time.
"Borrower(s)" shall mean Packaging, Clean Tech, Whiteline and Xxxx Realty,
and any other Domestic Subsidiary which, after the Effective Date and with the
prior written approval of the Lenders, becomes a Borrower hereunder pursuant to
Section 2.1 hereof.
"Borrower Addendum" shall mean an addendum substantially in the form
attached hereto as Exhibit G, to be executed and delivered by each Borrower
which becomes a party to this Agreement after the date hereof, as such Exhibit G
may be amended from time to time.
"Borrower Sublimit" shall mean the following amounts as to each Borrower:
Packaging $ 300,000,000
Clean Tech $ 30,000,000
Whiteline $ 20,000,000
Xxxx Realty $ 165,000,000
In no event shall any Borrower Sublimit be in excess of the Revolving
Credit Aggregate Commitment. Upon reduction of the Revolving Credit Aggregate
Commitment resulting in a Borrower Sublimit being in excess thereof, such
Borrower Sublimit shall be deemed automatically reduced to an amount equal to
the Revolving Credit Aggregate Commitment then in effect.
"Borrowing Base" shall mean, as of any date of determination thereof, an
amount equal to the sum of (i) 85% of Eligible Accounts, plus (ii) the lesser of
(a) 65% of Eligible Inventory and (b) $60,000,000, plus (iii) 50% of Eligible
Equipment and plus (iv) 65% of Eligible Real Estate.
"Borrowing Base Certificate" shall mean a Borrowing Base certificate,
substantially in the form of Exhibit K, with appropriate insertions and executed
by a Responsible Officer.
"Borrowing Base Obligor" shall mean any Borrower or any Guarantor.
"Brazilian Maximum Amount" shall mean $60,000,000 plus fifty percent (50%)
of the net income (not reduced by losses) of Plastipak Brazil for the period
from October 31, 2004 to the date of determination, subject to reduction by the
amount of all then outstanding Letter of Credit Obligations of any other Foreign
Subsidiary.
"Brazilian Pledge" shall mean the Quota Pledge Agreement dated December
22, 1999, executed and delivered by Holdings in favor of the Agent, as amended
or otherwise modified from time to time.
"Business Day" shall mean any day, other than a Saturday or a Sunday, on
which commercial banks are open for domestic and international business
(including dealings in foreign exchange) in London and New York, and the Agent
is open for such business in Detroit.
"Capex Covenant Amount" shall mean Fifteen Million Five Hundred Thousand
Dollars ($15,500,000) for Fiscal Year 2004, increasing by Five Hundred Thousand
Dollars ($500,000) on the first day of each following Fiscal Year.
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"Capital Expenditures" shall mean, without duplication, any amounts paid
or accrued in respect of a period in respect of any purchase or other
acquisition for value of fixed or capital assets, whether by Operating Lease,
Capitalized Lease, purchase or otherwise; provided that, in no event shall
Capital Expenditures include amounts expended in respect of normal repair and
maintenance of plant facilities, machinery, fixtures and other like capital
assets utilized in the ordinary conduct of business (to the extent such amounts
would not be capitalized in preparing a balance sheet determined in accordance
with GAAP).
"Capitalized Lease" shall mean, as applied to any Person, any lease of any
property (whether real, personal or mixed) which, in conformity with GAAP, is
required to be capitalized on the balance sheet of such Person.
"Change in Control" shall mean any of the following events or
circumstances: if (a) Holdings or a controlling portion of its voting stock or a
substantial portion of its assets comes under the practical, beneficial or
effective control of one or more Persons other than Xxxxxxx X. Xxxxx (or any
Person becoming a successor to Xxxxxxx X. Xxxxx through a Change in Control in
which the Majority Lenders do not exercise the judgment referred to below),
whether by reason of death, merger, consolidation, sale or purchase of stock or
assets or otherwise; (b) Xxxxxxx X. Xxxxx (or any Person becoming a successor to
Xxxxxxx X. Xxxxx through a Change in Control in which the Majority Lenders do
not exercise the judgment referred to below) shall no longer remain in office as
President and Chief Executive Officer of Holdings, whether by reason of death,
resignation or otherwise; and any such change of control or office holder may
adversely affect, in the reasonable judgment of the Majority Lenders, the
ability of the Borrowers to carry on their business as conducted before such
change or may result in a Material Adverse Effect; or (c) any "Change in
Control" or "Change of Control" (or any other similar concept) as defined or
described in any Subordinated Debt Documents, Permitted Real Estate Debt
Documents or the Senior Unsecured Debt Documents.
"Clean Tech" shall mean Clean Tech, Inc., a 100% Subsidiary.
"Collateral" shall mean all property or rights in which a security
interest, mortgage, Lien or other encumbrance for the benefit of the Lenders is
or has been granted or arises or has arisen, under or in connection with this
Agreement, the other Loan Documents, or otherwise.
"Collateral Documents" shall mean the Security Agreement, the Pledge
Agreements, the Mortgages, the Equipment Pledge Agreements, any joinders to each
such document, and all of the other acknowledgments, certificates, stock powers,
financing statements, instruments and other security documents executed by
Credit Parties or any Subsidiary in favor of the Agent and delivered to the
Agent, as security for the Indebtedness, in each case prior to or as of the
Effective Date or, from time to time, subsequent thereto, in connection with
such Security Agreement, the Pledge Agreements, the Equipment Pledge Agreements,
this Agreement and the other Loan Documents, in each case, as such collateral
documents may be amended or otherwise modified from time to time.
"Comerica Bank" shall mean Comerica Bank, a Michigan banking corporation,
its successors or assigns.
"Commitment" shall mean the Revolving Credit Aggregate Commitment.
"Commonly Controlled Entity" shall mean an entity, whether or not
incorporated, which is under common control with any of the Credit Parties
within the meaning of Section 4001 of ERISA or which is part of a group which
includes the Credit Parties and which is treated as a single employer under
Section 414 of the Internal Revenue Code specifically excluding the Young
Parties.
4
"Consolidated" (or "consolidated") or "Consolidating" (or "consolidating")
shall mean, when used with reference to any financial term in this Agreement,
the aggregate for two or more Persons of the amounts signified by such term for
all such Persons determined on a consolidated basis in accordance with GAAP.
"Consolidated Debt" shall mean as of any date of determination, all Debt
of Holdings and its Consolidated Subsidiaries as of such date.
"Consolidated EBITDA" shall mean for any period, Consolidated Net Income
for such period plus, without duplication and only to the extent reflected as a
charge or reduction in the statement of such Consolidated Net Income for such
period, the sum of (a) Consolidated Income Tax Expense, (b) Consolidated
Interest Expense, (c) Consolidated depreciation and amortization expense,(d)
extraordinary losses (or minus extraordinary gains), (e) all unamortized costs
(not to exceed $1,236,729) relating to the Prior Credit Agreement, (f) all
non-capitalized expenses (not to exceed $1,500,000) related to this Agreement
and incurred in Fiscal Year 2005), (g) other non-cash expenses (excluding any
such non-cash expense to the extent that it represents an accrual of or reserve
for cash expenses in any future period or amortization of a prepaid cash expense
that was paid in a prior period) for such period to the extent that such
depreciation, amortization and other non-cash expenses were deducted in
computing such Consolidated Net Income, minus (h) non-cash items increasing such
Consolidated Net Income for such period, other than the accrual of revenue in
the ordinary course of business, in each case determined in accordance with
GAAP.
"Consolidated EBITDAR" shall mean for any period, Consolidated EBITDA for
such period plus, without duplication and only to the extent reflected as a
charge or reduction in the statement of such Consolidated EBITDA for such
period, Consolidated Rental Expense.
"Consolidated Fixed Charges" shall mean, for any period, the sum of (a)
Consolidated Interest Expense for such period, plus (b) Capital Expenditures of
Holdings and its Consolidated Subsidiaries for such period, plus (c)
Consolidated Income Tax Expense for such period, plus (d) the aggregate amount
of all dividends paid in cash on the Equity Interests of Holdings during such
period, plus (e) all installments of principal or other sums payable during such
period by Holdings and its Consolidated Subsidiaries with respect to
Consolidated Debt (excluding voluntary and mandatory prepayments of Revolving
Credit Advances).
"Consolidated Income Tax Expense" shall mean for any period the aggregate
amount of taxes based on the income or profits of Holdings and its Consolidated
Subsidiaries determined in accordance with GAAP (to the extent such income and
profits were included in determining Consolidated Net Income for such period).
"Consolidated Interest Expense" shall mean for any period the total
interest expense (including that attributable to Capitalized Leases) of Holdings
and its Consolidated Subsidiaries determined in accordance with GAAP for such
period.
"Consolidated Net Income" shall mean for any period, the net income (or
loss) of Holdings and its Consolidated Subsidiaries, determined on a
consolidated basis in accordance with GAAP; provided, that the cumulative effect
of a change in accounting principles shall be excluded.
"Consolidated Net Worth" shall mean, as of any date of determination, the
total common shareholders' equity of Holdings and its Consolidated Subsidiaries,
as reflected on the most recent regularly prepared quarterly or annual balance
sheet of Holdings and such Consolidated Subsidiaries, which balance sheet shall
be prepared in accordance with GAAP.
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"Consolidated Rental Expense" shall mean for any period all sums paid by
Holdings or any Consolidated Subsidiary with respect to Operating Leases during
such period.
"Consolidated Senior Secured Debt" shall mean as of any date of
determination, all Consolidated Total Debt that is secured by a Lien on any
assets of Holdings or any Subsidiary.
"Consolidated Subsidiaries" shall mean the Subsidiaries of Holdings which
are treated as Consolidated for purposes of GAAP.
"Consolidated Tangible Net Worth" shall mean as of any date of
determination, Consolidated Net Worth as of such date plus all Subordinated Debt
of Holdings and its Consolidated Subsidiaries and minus all intangible assets of
Holdings and its Consolidated Subsidiaries such as patents, trademarks,
copyrights, goodwill and similar intangible assets, as determined in accordance
with GAAP.
"Consolidated Total Debt" shall mean, as of any date of determination,
Total Debt of Holdings and its Consolidated Subsidiaries as of such date.
"Consolidated Total Liabilities" shall mean, as of any date of
determination, all Liabilities of Holdings and its Consolidated Subsidiaries as
of such date.
"Contractual Obligation" shall mean, as to any Person, any provision of
any security issued by such Person or of any agreement, instrument or other
undertaking to which such Person is a party or by which it or any of its
property is bound.
"Covenant Compliance Report" shall mean the report to be furnished by
Borrowers to the Agent pursuant to Section 7.2(a) hereof, in the form of
attached Exhibit I and certified by a Responsible Officer, in which report
Borrowers shall set forth, among other things, detailed calculations and the
resultant ratios or financial tests with respect to the Pledge Release Ratio,
the Fixed Charge Coverage Ratio and the financial covenants contained in
Sections 7.9 through 7.12A of this Agreement.
"Credit Parties" shall mean collectively any or all of Holdings and the
Borrowers provided that the "Credit Parties" shall mean all Credit Parties
unless the context indicates or otherwise requires and "Credit Party" shall mean
any one of them, as the context indicates or otherwise requires
"De Minimis Matters" shall mean environmental or other matters, the
existence of which and any liability which may result therefrom, would not,
individually or in the aggregate, reasonably be expected by the Agent to have a
material adverse effect on the financial condition or businesses of Holdings and
its Subsidiaries (taken as a whole) or on the ability of Holdings and its
Subsidiaries (taken as a whole) to pay their debts, as such debts become due.
"Debt" shall mean, as to any Person, without duplication, (a) all
indebtedness of such Person for borrowed money or for the deferred purchase
price of property or services as of such date (other than trade liabilities
incurred in the ordinary course of business and payable in accordance with
customary practices) or which is evidenced by a note, bond, debenture or similar
instrument, (b) the principal component of all obligations of such person under
Capitalized Leases, (c) all obligations of such Person in respect of letters of
credit, acceptances or similar obligations issued or created for the account of
such Person, (d) all liabilities secured by any Lien on any property owned by
such Person even though such Person has not assumed or otherwise become liable
for the payment thereof, (e) all Guarantee Obligations of such Person, (f) all
obligations of such Person under conditional sale or other title retention
agreements relating to property or assets purchased by such Person, (g) all
obligations (contingent or otherwise) under any interest rate swap transaction,
basis swap transaction, forward rate transaction, commodity swap
6
transaction, equity transaction, equity index transaction, foreign exchange
transaction, cap transaction, floor transaction (including any option with
respect to any of these transactions and any combination of any of the
foregoing) entered into by such Person and (h) any Debt or off balance sheet
obligations issued pursuant to a Securitization Transaction (whether by a
Special Purpose Subsidiary or otherwise).
"Debt Service Coverage Ratio" shall mean, as of the last day of each
fiscal quarter of Holdings, the ratio of (a) Consolidated EBITDAR for the four
fiscal quarters then ending, minus the sum of the Capex Covenant Amount and
Consolidated Income Tax Expense for such period to (b) the sum of all payments
of principal paid or due and payable with respect to Consolidated Debt
(excluding the Advances) for such period, plus Consolidated Interest Expense and
Consolidated Rental Expense for such period, plus all cash dividends paid by
Holdings to its shareholders during such period.
"Default" shall mean any event which with the giving of notice or the
passage of time, or both, would constitute an Event of Default under this
Agreement.
"Defaulting Lender" is defined in Section 2.4(c).
"Dollars" and the sign "$" shall mean lawful money of the United States of
America.
"Domestic Indebtedness" shall mean that portion of the Indebtedness
arising from any obligations of any Credit Party and any Domestic Subsidiary.
"Domestic Loan Party(ies)" shall mean any Borrower or any Guarantor
incorporated or organized under the laws of the United States of America, or any
state, territory, possession or other political subdivision thereof.
"Domestic Significant Subsidiary(ies)" shall mean each Domestic Subsidiary
which has assets totaling at least $1,000,000, or revenues of at least
$1,000,000 in any Fiscal Year.
"Domestic Subsidiary(ies)" shall mean any direct or indirect Subsidiary of
Holdings which is incorporated or organized under the laws of the United States
of America, or any state, territory, possession or other political subdivision
thereof which is a domestic Subsidiary for purposes of Section 956 of the
Internal Revenue Code; and "Domestic Subsidiaries" shall mean any or all of
them.
"Effective Date" shall mean the date on which all the conditions precedent
set forth in Sections 5.1 through 5.9, inclusive have been satisfied.
"Eligible Accounts" shall mean an Account which has been included in a
Borrowing Base Certificate to determine the Borrowing Base, and as to which
Account, unless otherwise approved by Agent in its sole discretion, the
following is true and accurate as of the time it was utilized to determine the
Borrowing Base:
(a) such Account arose in the ordinary course of the business of any
Borrowing Base Obligor out of either (i) a bona fide sale of Inventory by
a Borrowing Base Obligor, and in such case such Inventory has been shipped
to the applicable Account Debtor or (ii) services rendered by a Borrowing
Base Obligor and such services have been performed;
(b) such Account represents a legally valid and enforceable claim
which is due and owing by such Account Debtor to the Borrowing Base
Obligor and for such amount as is represented by the Borrowers to Agent in
the applicable Borrowing Base Certificate;
7
(c) it is evidenced by an invoice dated not later than the date of
shipment or performance, rendered to such Account Debtor;
(d) the unpaid balance of such Account as represented to Agent in
the applicable Borrowing Base Certificate is not subject to any defense,
counterclaim, setoff, contra account, credit, allowance or adjustment by
the Account Debtor because of returned, inferior or damaged Inventory or
services, or for any other reason;
(e) the transactions leading to the creation of such Account comply
with all applicable local, state and federal laws and regulations of the
jurisdiction in which such Account was created where the failure to comply
therewith could reasonably be expected to impair the collectibility of
such Account;
(f) the applicable Borrowing Base Obligor has granted to the Agent
pursuant to or in accordance with the Collateral Documents a perfected
first priority security interest in such Account prior in right to all
other Persons and such Account has not been sold, transferred or otherwise
assigned or encumbered by any Borrowing Base Obligor;
(g) it is not owing more than ninety (90) days after the date of the
original invoice or other writing evidencing such Account;
(h) it is not owing by an Account Debtor who, together with any
Affiliate(s) of such Account Debtor, as of the date of determination, has
failed to pay twenty-five percent (25%) or more of the aggregate amount of
its/their respective Accounts owing to any Borrowing Base Obligor within
ninety (90) days after the original invoice date;
(i) such Account is not represented by any note, trade acceptance,
draft or other negotiable instrument or by any chattel paper, except any
such as has been endorsed and delivered by the applicable Borrowing Base
Obligor, pursuant to or in accordance with the Collateral Documents or
this Agreement on or prior to such Account's inclusion in any applicable
Borrowing Base Certificate;
(j) it is not owing by any Account Debtor as to which Holdings or
any Subsidiary has received actual notice of the death of the related
Account Debtor or any general partner thereof, nor of the dissolution,
liquidation, termination of existence, insolvency, business failure,
appointment of a receiver for any part of the property of, assignment for
the benefit of creditors by, or the filing of a petition in bankruptcy or
the commencement of any proceeding under any bankruptcy or insolvency laws
by or against, such Account Debtor;
(k) the Account Debtor on such Account is not:
(i) an Affiliate of Holdings or any of its Subsidiaries other
than Absopure Water Company, Buffalo Don's Artesian Xxxxx, Ltd.,
Waters of America, L.L.C., One Water Source, L.L.C., Two Water
Source, L.L.C. and Sprinklets Water Centers, Inc. (provided,
however, that with respect to such entities, to constitute Eligible
Accounts, any such Accounts shall meet all other requirements of
this definition and shall be on arms-length terms; and such Eligible
Accounts shall not exceed $10,000,000 in the aggregate);
(ii) the United States of America or any state or political
subdivision thereof, or by any department, agency, or
instrumentality thereof, unless all necessary steps are taken to
comply with the Federal Assignment of Claims Act or with any
comparable state
8
law, if applicable, and all other necessary steps are taken to
perfect the Lenders' security interest in such Account;
(iii) a Foreign Person, unless such Account is secured by a
letter of credit or a guaranty issued by a bank acceptable to the
Agent or covered by foreign receivable insurance provided by an
insurer acceptable to the Agent and, in each case, in form and
substance acceptable to the Agent, in its sole discretion;
(iv) an Account Debtor whose obligations the Agent, acting in
its reasonable commercial discretion (based on the collectibility of
the Accounts owed to such Account Debtor), has notified Holdings are
deemed not to constitute Eligible Accounts; or
(l) It is not an Account billed in advance of transfer of title to
the Inventory being sold, payable on delivery, for consigned goods, for
guaranteed sales, for unbilled sales, for progress xxxxxxxx, payable at
any future date in accordance with its terms, subject to a retainage or
holdback, or insured by a surety company.
Any Account which is at any time an Eligible Account but which
subsequently fails to meet any of the foregoing requirements, shall forthwith
cease to be an Eligible Account.
"Eligible Assignee" shall mean a commercial bank, a mutual fund, an
insurance company, a financial institution, a "qualified institutional buyer"
(as defined in Rule 144A of the Securities Act), any fund that regularly invests
in bank loans or any other "accredited investor" (as defined in Regulation D)
but in any event excluding any individual and Holdings and its Subsidiaries and
Affiliates; provided that no Person shall be an Eligible Assignee in respect of
the Revolving Commitment unless, at the time of the proposed assignment to such
Person, such Person is able to make Revolving Advances in Dollars.
"Eligible Equipment" shall mean all Equipment owned by any Borrowing Base
Obligor which has been included in a Borrowing Base Certificate to determine the
Borrowing Base and as to which Equipment the following is true and accurate as
of the time it was utilized to determine the Borrowing Base and as of the time a
Borrower has requested a Revolving Credit Advance or a Swing Line Advance based
in part thereon:
(a) such item of Equipment is located in the United States of
America at such location as any Borrowing Base Obligor shall have
represented in the Loan Documents;
(b) such item of Equipment is not subject to a Lien in favor of any
Person other than the Agent for the benefit of the Lenders, and the Agent,
for the benefit of the Lenders, shall have a valid and perfected first
priority Lien thereon; and
(c) the value of such item of Equipment is determined based on its
appraised fair market value but only if such appraisal was prepared by an
appraiser acceptable to the Agent and was dated as of a date within
twenty-four (24) months of the date of valuation of the applicable
Equipment or its net book value as determined in accordance with GAAP if
no such appraisal exists.
"Eligible Foreign Subsidiary" shall mean any Foreign Subsidiary whose
Equity Interests are pledged to the Agent pursuant to a Foreign Pledge
Agreement.
"Eligible Inventory" shall mean Inventory of any Borrowing Base Obligor
which has been included in a Borrowing Base Certificate to determine the
Borrowing Base and as to which Inventory the
9
following is true and accurate as of the time it was utilized to determine the
Borrowing Base and as of the time a Borrower has requested a Revolving Credit
Advance or a Swing Line Advance based in part thereon:
(a) such item of Inventory is of merchantable quality and is usable
or saleable by any Borrowing Base Obligor in the ordinary course of its
business and is not obsolete or discontinued;
(b) such item of Inventory is properly classified under GAAP as "raw
materials inventory" or "finished goods inventory" and not as
"work-in-process";
(c) such item of Inventory has not been sold, transferred or
otherwise assigned by any Borrowing Base Obligor to any other Person;
(d) such item of Inventory is located within the United States of
America at such location or locations as any Borrowing Base Obligor shall
have represented in the Loan Documents relating to Inventory;
(e) such item of Inventory is not subject to a Lien in favor of any
Person other than the Agent for the benefit of the Lenders, and the Agent,
for the benefit of the Lenders, shall have a valid and perfected first
priority Lien therein;
(f) such item of Inventory is not consigned goods or subject to a
seller's right to repurchase; and
(g) the value of each item of Inventory utilized to determine the
Borrowing Base was determined in accordance with GAAP.
Any Inventory which is at any time Eligible Inventory, but which
subsequently fails to meet any of the foregoing requirements, shall forthwith
cease to be Eligible Inventory.
"Eligible Real Estate" shall mean all real estate owned by any Borrowing
Base Obligor which has been included in a Borrowing Base Certificate to
determine the Borrowing Base and as to which real estate the following is true
and accurate as of the time it was utilized to determine the Borrowing Base and
as of the time a Borrower has requested a Revolving Credit Advance or a Swing
Line Advance based in part thereon:
(a) the real estate is located in the United States of America at
such address as any Borrowing Base Obligor shall have represented in the
Loan Documents;
(b) the real estate is not subject to a Lien in favor of any Person
other than the Agent for the benefit of the Lenders, and the Agent, for
the benefit of the Lenders, shall have a valid and perfected first
priority Lien thereon;
(c) the value of such real estate is determined based on its
appraised fair market value, but only if such appraisal was prepared by an
appraiser acceptable to the Agent and was dated as of a date within
twenty-four (24) months of the date of valuation of the applicable real
estate or its net book value as determined in accordance with GAAP, if no
such appraisal exists; and
(d) Agent shall have on file an appraisal satisfying all FIRREA
requirements for the applicable parcel of real estate included in the
Borrowing Base.
10
"Equipment" shall mean all equipment as defined in the UCC.
"Equipment Pledge Agreement(s)" shall mean those certain pledge agreements
encumbering certain Equipment of a Foreign Subsidiary, from such Foreign
Subsidiary to Agent for the benefit of the Lenders and securing the Foreign
Indebtedness, to be dated as of the date of execution and delivery thereof, in
form and substance satisfactory to the Agent, as amended, restated or otherwise
modified from time to time.
"Equity Interests" means, with respect to any Person, any and all shares,
share capital, interests, participations, warrants, options or other equivalents
(however designated) of capital stock of a corporation and any and all
equivalent ownership interests in a Person (other than a corporation).
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended, or any successor act or code and the regulations in effect from time to
time thereunder.
"Eurocurrency-based Advance" shall mean any Advance which bears interest
at the Eurocurrency-based Rate.
"Eurocurrency-based Rate" shall mean a per annum interest rate which is
equal to the sum of the Applicable Margin (subject, if applicable, to adjustment
under Section 4.1 hereof), plus
(A) the per annum interest rate at which deposits in the
relevant eurocurrency are offered to Agent's Eurocurrency
Lending Office by other prime banks in the relevant
eurocurrency market in an amount comparable to the relevant
Eurocurrency-based Advance and for a period equal to the
relevant Eurocurrency-Interest Period two (2) Business Days
prior to the first day of such Eurocurrency-Interest Period,
divided by
(B) a percentage equal to 100% minus the maximum rate on
such date at which Agent is required to maintain reserves on
`eurocurrency liabilities' as defined in and pursuant to
Regulation D of the Board of Governors of the Federal Reserve
System or, if such regulation or definition is modified, and
as long as Agent is required to maintain reserves against a
category of liabilities which includes eurocurrency deposits
or includes a category of assets which includes eurocurrency
loans, the rate at which such reserves are required to be
maintained on such category.
"Eurocurrency-Interest Period" shall mean, an interest period of one, two,
three or six months (or any lesser or greater number of days agreed to in
advance by the relevant Borrower, Agent and the Lenders), in each case as
selected by such Borrower, as applicable, for a Eurocurrency-based Advance
pursuant to Section 2.3 or 2.5 hereof, as the case may be.
"Eurocurrency Lending Office" shall mean, (a) with respect to the Agent,
Agent's office located at its Grand Caymans Branch or such other branch of
Agent, domestic or foreign, as it may hereafter designate as its Eurocurrency
Lending Office by written notice to Borrowers and the Lenders and (b) as to each
of the Lenders, its office, branch or affiliate located at its address set forth
on the signature pages hereof (or identified thereon as its Eurocurrency Lending
Office), or at such other office, branch or affiliate of such Lender as it may
hereafter designate as its Eurocurrency Lending Office by written notice to
Borrowers and Agent.
11
"Event of Default" shall mean each of the Events of Default specified in
Section 9.1 hereof.
"Existing Letters of Credit" shall mean the Letters of Credit set forth on
Schedule 1.3 hereof.
"Federal Funds Effective Rate" shall mean, for any day, a fluctuating
interest rate per annum equal to the weighted average of the rates on overnight
Federal funds transactions with members of the Federal Reserve System arranged
by Federal funds brokers, as published for such day (or, if such day is not a
Business Day, for the next preceding Business Day) by the Federal Reserve Bank
of New York, or, if such rate is not so published for any day which is a
Business Day, the average of the quotations for such day on such transactions
received by Agent from three Federal funds brokers of recognized standing
selected by it, all as conclusively determined by the Agent.
"Fee Letter" shall mean that certain Agency Fee Letter dated as of October
26, 2004, as the same may be amended, restated or otherwise modified,
supplemented or replaced from time to time.
"Fees" shall mean the Revolving Credit Facility Fee, the Letter of Credit
Fees and the other fees and charges payable by Borrowers to the Lenders or Agent
hereunder.
"Financial Statements" shall mean all those balance sheets, earnings
statements, statement of cash flows, and other financial data (whether of
Holdings or its Subsidiaries) which have been furnished to the Agent or the
Lenders for the purposes of, or in connection with, this Agreement and the
transactions contemplated hereby.
"Fiscal Year" shall mean each fiscal year of Holdings, ending on the
Saturday closest to October 31 of each year. For purposes of this Agreement, a
designated Fiscal Year (e.g., Fiscal Year 2004) shall mean the Fiscal Year
ending in the year indicated.
"Fixed Charge Coverage Ratio" shall mean, as of the applicable date of
determination, a ratio, the numerator of which is Consolidated EBITDA for the
four fiscal quarters then ending and the denominator of which is Consolidated
Fixed Charges for the period then ending.
"Foreign Guarantor(s)" shall mean each Foreign Subsidiary which shall have
executed and delivered the Foreign Guaranty or a joinder agreement thereto.
"Foreign Guaranty" shall mean that certain Guaranty of all outstanding
Foreign Indebtedness, executed and delivered by certain of the Foreign
Subsidiaries (whether by execution thereof or by execution of a joinder
agreement) to the Agent for the benefit of the Lenders in form and substance
acceptable to Agent, as the same may be amended, restated or otherwise modified
from time to time.
"Foreign Indebtedness" shall mean that portion of the Indebtedness under
this Agreement on which any Foreign Subsidiary is directly obligated.
"Foreign Person" shall mean an Account Debtor which (i) does not maintain
its chief executive office in the United States of America, (ii) is not
organized under the laws of the United States of America, or any state thereof,
or (iii) is the government of any foreign country or sovereign state, or of any
state, province, municipality or other instrumentality thereof.
"Foreign Pledge Agreements" shall mean such domestic or local law share
pledge(s) as shall be advisable or necessary under applicable local law to
create and perfect Liens on the Equity Interests of the Foreign Subsidiaries and
securing the Indebtedness (subject to Section 956 of the Internal Revenue
12
Code), as the same may be amended, restated or otherwise modified from time to
time, and includes the Brazilian Pledge.
"Foreign Significant Subsidiary(ies)" shall mean each Foreign Subsidiary
which has assets totaling at least $10,000,000.
"Foreign Subsidiary(ies)" shall mean all direct or indirect Subsidiaries
of Holdings other than the Domestic Subsidiaries.
"GAAP" shall mean generally accepted accounting principles in the United
States of America, as in effect on the date hereof, consistently applied.
"Governmental Authority" shall mean any nation or government, any state,
province or other political subdivision thereof, any central bank (or similar
monetary or regulatory authority) thereof (including the Central Bank of
Brazil), any entity exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government, and any corporation or
other entity owned or controlled, through stock or capital ownership or
otherwise, by any of the foregoing.
"Governmental Obligations" means noncallable direct general obligations of
the United States of America or obligations the payment of principal of and
interest on which is unconditionally guaranteed by the United States of America.
"Guarantee Obligation" shall mean as to any Person (the "guaranteeing
person") any obligation of the guaranteeing person in respect of any obligation
of another Person (including, without limitation, any bank under any letter of
credit), the creation of which was induced by a reimbursement agreement, counter
indemnity or similar obligation issued by the guaranteeing person, in either
case guaranteeing or in effect guaranteeing any Debt, leases, dividends or other
obligations (the "primary obligations") of any other third Person (the "primary
obligor") in any manner, whether directly or indirectly, including, without
limitation, any obligation of the guaranteeing person, whether or not
contingent, (i) to purchase any such primary obligation or any property
constituting direct or indirect security therefor, (ii) to advance or supply
funds (1) for the purchase or payment of any such primary obligation or (2) to
maintain working capital or equity capital of the primary obligor or otherwise
to maintain the net worth or solvency of the primary obligor, (iii) to purchase
property, securities or services primarily for the purpose of assuring the owner
of any such primary obligation of the ability of the primary obligor to make
payment of such primary obligation or (iv) otherwise to assure or hold harmless
the owner of any such primary obligation against loss in respect thereof;
provided, however, that the term Guarantee Obligation shall not include
endorsements of instruments for deposit or collection in the ordinary course of
business. The amount of any Guarantee Obligation of any guaranteeing person
shall be deemed to be the lower of (a) an amount equal to the stated or
determinable amount of the primary obligation in respect of which such Guarantee
Obligation is made and (b) the maximum amount for which such guaranteeing person
may be liable pursuant to the terms of the instrument embodying such Guarantee
Obligation, unless such primary obligation and the maximum amount for which such
guaranteeing person may be liable are not stated or determinable, in which case
the amount of such Guarantee Obligation shall be such guaranteeing person's
maximum reasonably anticipated liability in respect thereof as determined by the
Credit Parties in good faith.
"Guaranty" shall mean that certain guaranty of all outstanding
Indebtedness, executed and delivered by Holdings and each of the Domestic
Subsidiaries (whether by execution thereof, or by execution of the joinder
agreement attached as "Exhibit A" to the form of such Guaranty), to the Agent,
on behalf of the Lenders, dated December 22, 1999, as amended from time to time.
13
"Guarantor(s)" shall mean Holdings and each Domestic Subsidiary which is
required by the Lenders to guarantee the obligations of the Borrowers hereunder
and under the other Loan Documents.
"Hazardous Material" shall mean and include any hazardous, toxic or
dangerous waste, substance or material defined as such in (or for purposes of)
the Hazardous Material Laws.
"Hazardous Material Law(s)" shall mean all laws, codes, ordinances, rules,
regulations, orders, decrees and directives issued by any Governmental Authority
pertaining to any hazardous, toxic or dangerous waste, substance or material on
or about any facilities owned, leased or operated by Holdings or any of its
Subsidiaries, or any portion thereof including, without limitation, those
relating to soil, surface, subsurface ground water conditions and the condition
of the ambient air; and any state, provincial and local laws and regulations
pertaining to any hazardous, toxic or dangerous waste, substance or material
and/or asbestos; any so-called "superfund" or "superlien" law; and any other
federal, state, provincial, foreign or local statute, law, ordinance, code,
rule, regulation, order or decree regulating, relating to, or imposing liability
or standards of conduct concerning, any hazardous, toxic or dangerous waste,
substance or material, as now or at any time hereafter in effect.
"Hedging Transaction" means each interest rate swap transaction, basis
swap transaction, forward rate transaction, commodity swap transaction, equity
transaction, equity index transaction, foreign exchange transaction, cap
transaction, floor transaction (including any option with respect to any of
these transactions and any combination of any of the foregoing) entered into by
the Borrowers from time to time; provided that such transaction is entered into
for risk management purposes and not for speculative purposes.
"Hereof", "hereto", "hereunder" and similar terms shall refer to this
Agreement and not to any particular paragraph or provision of this Agreement.
"Indebtedness" shall mean all indebtedness and liabilities (including,
without limitation, interest accruing at the then applicable rate provided in
this Agreement or any other applicable Loan Document after the Revolving Credit
Maturity Date and interest accruing at the then applicable rate provided in this
Agreement or any other applicable Loan Document after the filing of any petition
in bankruptcy, or the commencement of any insolvency, reorganization or like
proceeding, relating to any Credit Party, whether or not a claim for post-filing
or post-petition interest is allowed in such proceeding), fees and other charges
arising under this Agreement or any of the other Loan Documents, whether direct
or indirect, absolute or contingent, of any Credit Party to any of the Lenders
or Affiliates thereof or to the Agent, in any manner and at any time, whether
arising under this Agreement, or under any Guaranty or any of the other Loan
Documents, due or hereafter to become due, now owing or that may hereafter be
incurred by any Credit Party or any Subsidiary to, any of the Lenders or
Affiliates thereof or to the Agent (and which shall be deemed to include any
liabilities of any Borrower or any Subsidiary to any Lender arising in
connection with account overdrafts), and any judgments that may hereafter be
rendered on such indebtedness or any part thereof, with interest according to
the rates and terms specified, or as provided by law, any payment obligations,
if any, under Hedging Transactions evidenced by Interest Rate Protection
Agreements, and any and all consolidations, amendments, renewals, replacements,
substitutions or extensions of any of the foregoing; provided, however that for
purposes of calculating the Indebtedness outstanding under the Agreement or any
of the other Loan Documents, the direct and indirect and absolute and contingent
obligations of any Credit Party and the Subsidiaries (whether direct or
contingent) shall be determined without duplication.
"Insolvency Proceeding" shall mean, with respect to any Person, (a) any
case, action or proceeding with respect to such Person before any court or other
Governmental Authority relating to bankruptcy, reorganization, insolvency,
liquidation, receivership, dissolution, winding-up, administration
14
or relief of debtors, or (b) any general assignment for the benefit of
creditors, arrangement, compromise, composition, marshaling of assets for
creditors, or other, similar arrangement in respect of such Person's creditors
generally or any substantial portion of its creditors.
"Intercompany Loan" shall mean any loan (or advance in the nature of a
loan) by Holdings or any Subsidiary to any other Subsidiary or to Holdings,
provided that each such loan or advance is evidenced by an Intercompany Note
which subordinates such loan in right of payment and priority to the
Indebtedness on terms and conditions satisfactory to Agent and the Majority
Lenders.
"Intercompany Loans, Advances or Investments" shall mean any Intercompany
Loan, and any advance or investment by Holdings or any Subsidiary (including
without limitation any guaranty of obligations or indebtedness to third parties)
to or in another Subsidiary.
"Intercompany Notes" shall mean the promissory notes, substantially in the
form attached hereto as Exhibit J, issued or to be issued by Holdings or any
Subsidiary to evidence an Intercompany Loan.
"Interest Coverage Ratio" shall mean, as of the last day of each fiscal
quarter of Holdings, the ratio of (a) Consolidated EBITDA for the four fiscal
quarters then ending to (b) Consolidated Interest Expense for such period.
"Interest Period" shall mean (a) with respect to a Eurocurrency-based
Advance, a Eurocurrency-Interest Period commencing on the day a
Eurocurrency-based Advance is made, or on the effective date of an election of
the Eurocurrency-based Rate and (b) with respect to a Swing Line Advance carried
at the Quoted Rate, an interest period of one month (or any lesser number of
days agreed to in advance by a Borrower, Agent and the Swing Line Lender);
provided, however that (i) any Interest Period which would otherwise end on a
day which is not a Business Day shall end on the next succeeding Business Day,
except that as to a Eurocurrency-Interest Period, if the next succeeding
Business Day falls in another calendar month, such Eurocurrency-Interest Period
shall end on the next preceding Business Day, and (ii) when a
Eurocurrency-Interest Period begins on a day which has no numerically
corresponding day in the calendar month during which such Eurocurrency-Interest
Period is to end, it shall end on the last Business Day of such calendar month,
and (iii) no Interest Period shall extend beyond the Revolving Credit Maturity
Date.
"Interest Rate Protection Agreement" means any Hedging Transaction entered
into between a Borrower and any Lender or an Affiliate of a Lender.
"Internal Revenue Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time, and the regulations promulgated thereunder.
"Investment" shall mean, when used with respect to any Person, (a) any
loan, investment or advance made by such Person to any other Person (including,
without limitation, any contingent obligation) in respect of any capital stock,
Debt, obligation or liability of such other Person and (b) any other investment
made by such Person (however acquired) in stock or other ownership interests in
any other Person, including, without limitation, any investment made in exchange
for the issuance of shares of stock of such Person.
"Issuing Lender" shall mean Comerica Bank in its capacity as issuer of one
or more Letters of Credit hereunder, or its successor designated by the
Borrowers and the Lenders.
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"Issuing Office" shall mean Issuing Lender's office located at One Detroit
Center, 000 Xxxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx 00000-0000 or such other office
as Issuing Lender shall designate as its Issuing Office.
"Lenders" shall mean Comerica Bank and such other financial institutions
from time to time parties hereto as lenders and shall include the Lenders, the
Swing Line Lender, the Issuing Lender and any assignee which becomes a Lender
pursuant to Section 13.8 hereof.
"Letter(s) of Credit" shall mean any standby letters of credit issued by
Issuing Lender at the request of and for the account of an Account Party
pursuant to Article 3 hereof.
"Letter of Credit Agreement" shall mean, in respect of each Letter of
Credit, the application and related documentation satisfactory to the Issuing
Lender of an Account Party or Account Parties requesting Issuing Lender to issue
such Letter of Credit, as amended from time to time.
"Letter of Credit Documents" is defined in Section 3.7.
"Letter of Credit Fees" shall mean the fees payable to Agent for the
accounts of the Lenders in connection with Letters of Credit pursuant to Section
3.4 hereof.
"Letter of Credit Maximum Amount" shall mean One Hundred Million Dollars
($100,000,000).
"Letter of Credit Obligations" shall mean at any date of determination,
the sum of (a) the aggregate undrawn amount of all Letters of Credit then
outstanding, (b) the aggregate face amount of all Letters of Credit requested
but not yet issued as of such date and (c) the aggregate amount of Reimbursement
Obligations which have not been reimbursed as of such date.
"Letter of Credit Payment" shall mean any amount paid or required to be
paid by the Issuing Lender in its capacity hereunder as issuer of a Letter of
Credit as a result of a draft or other demand for payment under any Letter of
Credit.
"Leverage Ratio" shall mean, as of the last day of each fiscal quarter of
Holdings, the ratio of (a) Consolidated Total Debt as of such date to (b)
Consolidated EBITDA for the four fiscal quarters then ending.
"Liabilities" shall mean all items of indebtedness, obligation or
liability of a Person that should be classified as liabilities on a balance
sheet of such Person in accordance with GAAP, and shall include any liabilities
arising under or pursuant to any Permitted Securitization.
"Lien" shall mean any pledge, assignment, hypothecation, mortgage,
security interest, deposit arrangement, option, trust receipt, conditional sale
or title retaining contract, sale and leaseback transaction, financing statement
(but excluding precautionary financing statements in respect of Operating
Leases) or comparable notice or other filing or recording, Capitalized Lease,
subordination of any claim or right, or any other type of Lien, charge,
encumbrance, preferential or priority arrangement, whether based on common law
or statute.
"Loan Documents" shall mean, collectively, this Agreement, the Notes (if
issued), the Letter of Credit Agreements, the Letters of Credit, the
Guaranty(ies) (and any joinders thereto), the Foreign Guaranty (and any joinders
thereto), the Collateral Documents, any Interest Rate Protection Agreements and
any other documents, certificates, instruments or agreements executed pursuant
to or in connection with any such document or this Agreement, as such documents
may be amended from time to time.
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"Loan Parties" shall mean collectively any or all of the Borrowers and any
or all of the Guarantors, and any or all of the Foreign Significant Subsidiaries
provided that the "Loan Parties" shall mean all Loan Parties unless the context
indicates or otherwise requires and "Loan Party" shall mean any one of them, as
the context indicates or otherwise requires.
"Majority Lenders" shall mean (a) so long as the Revolving Credit
Aggregate Commitment is outstanding hereunder, at any time Lenders holding not
less than 51% of the aggregate principal amount of the Revolving Credit
Aggregate Commitment, and (b) if the Revolving Credit Aggregate Commitment has
been terminated, at any time Lenders holding not less than 51% of the aggregate
principal amount of the Indebtedness then outstanding hereunder (provided that,
for purposes of determining Majority Lenders hereunder, Indebtedness outstanding
under the Swing Line or under any Letter of Credit shall be allocated among the
Lenders based on their respective Percentages).
"Material Adverse Effect" shall mean a material adverse effect on (a) the
business or financial condition of Holdings and its Subsidiaries taken as a
whole, (b) the ability of the Loan Parties to perform their respective
obligations under this Agreement, the Notes (if issued) or any other Loan
Document to which any of them is a party, or (c) the validity or enforceability
of this Agreement, any of the Notes (if issued) or any of the other Loan
Documents or the rights or remedies of the Agent or the Lenders hereunder or
thereunder.
"Maximum Availability" shall mean, as of any date of determination, the
lesser of (a) the then applicable Revolving Credit Aggregate Commitment and (b)
the Borrowing Base minus the sum of (i) of the aggregate principal amount of all
Advances of the Revolving Credit and of the Swing Line then outstanding
hereunder plus (ii) of the aggregate amount of Letter of Credit Obligations
outstanding as of the date of the requested Advance in each case determined
pursuant to the terms hereof as of the date of the requested Advance or the
issuance of the requested Letter of Credit, as the case may be.
"Mortgages" shall mean the mortgages, deeds of trust or other documents
granting a Lien over real property owned or leased by Holdings or any Subsidiary
delivered at any time prior to or on or after the Effective Date, in each case
pursuant to Section 7.20 hereof, as such mortgages may be amended or otherwise
modified from time to time, and "Mortgage" shall mean any of them.
"Multiemployer Plan" shall mean a Pension Plan which is a multiemployer
plan as defined in Section 4001(a)(3) of ERISA.
"Net Cash Proceeds" shall mean, (a) with respect to any Asset Sale, the
aggregate cash payments received by Borrowers or any Subsidiary, as the case may
be, from such Asset Sale, net of the reasonable direct expenses of sale paid to
non-Affiliates such as commissions and pro rated property taxes and net of any
taxes actually payable by Borrowers or any Subsidiary in respect of such sales,
(b) with respect to the issuance of any Equity Interests, the aggregate cash
proceeds received by a Credit Party or any Subsidiary pursuant to such issuance,
net of the direct costs relating to such issuance (including sales and
underwriting commissions), and (c) with respect to issuance of Debt or Permitted
Securitizations, the aggregate cash proceeds received by a Credit Party or any
Subsidiary pursuant to such issuance of Debt, and pursuant to each transfer or
encumbrance of accounts receivable under or pursuant to any Permitted
Securitization, in each case net of the direct costs relating to such issuance
(including up-front fees and placement fees) or securitization.
"Non-Defaulting Lender" is defined in Section 2.4(c).
"Notes" shall mean the Revolving Credit Notes and the Swing Line Notes.
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"Operating Lease" shall mean, as applied to any Person, any lease of any
property (whether real, personal or mixed) which, in conformity with GAAP, is
not required to be capitalized on a balance sheet of such Person.
"Other Foreign Subsidiaries Maximum Amount" shall mean $60,000,000,
subject to reduction by the amount of the then outstanding Letter of Credit
Obligations of Plastipak Brazil.
"Percentage" shall mean with respect to each Lender, its percentage share,
as set forth on Schedule 1.2, of the Revolving Credit and its risk participation
in Letters of Credit and its participation in any outstanding Swing Line
Advances as such Schedule may be revised from time to time by Agent in
accordance with Section 13.8.
"Pension Plan" shall mean any plan established and maintained by a Credit
Party or any Subsidiary which is qualified under Section 401(a) of the Internal
Revenue Code and subject to the minimum funding standards of Section 412 of the
Internal Revenue Code.
"Permitted Acquisition" shall mean any acquisition (including by way of
merger or consolidation) by Holdings or any 100% Domestic Subsidiary of all or
substantially all of the assets of another Person, or of a division or line of
business of another Person, or Equity Interests of another Person, which is
conducted in accordance with the following requirements:
(a) Such acquisition is of a business or Person engaged in a
business related to a business conducted by Holdings or any Subsidiary;
(b) Holdings shall have delivered to the Agent and the Lenders not
less than twenty (20) nor more than ninety (90) days prior to the date of
such acquisition, notice of such acquisition together with Pro Forma
Projected Financial Information, copies of all material documents relating
to such acquisition, and an opinion of Holdings' general counsel stating
that to the best knowledge of such counsel such acquisition complies with
this Agreement and all laws and regulations, in each case in form and
substance satisfactory to the Agent and the Majority Lenders;
(c) Both before and after giving effect to such acquisition, Maximum
Availability shall not be less than Twenty Million Dollars ($20,000,000);
(d) Both immediately before and after such acquisition, no Default
or Event of Default shall have occurred and be continuing;
(e) The board of directors (or other Person(s) exercising similar
functions) of the seller of the assets or issuer of the Equity Interests
being acquired shall not have disapproved such transaction or recommended
that such transaction be disapproved;
(f) If the sum of the purchase price of such proposed new
acquisition, computed on the basis of total acquisition consideration paid
or incurred, or to be paid or incurred, by Holdings and its Subsidiaries
with respect thereto, including the amount of Debt assumed or to which
such assets, businesses or business or ownership interests or shares, or
any Person so acquired, is subject, plus the total of all such
consideration paid or incurred in connection with acquisitions closed in
the immediately preceding twelve month period, is greater than Twenty-Five
Million Dollars ($25,000,000), the acquisition shall have been approved in
writing by the Majority Lenders prior to its consummation; and
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(g) Unless approved in writing by the Majority Lenders, the Person
or assets to be acquired shall not have, or expose any Credit Party or any
Subsidiary to, any contingent liabilities or liabilities under any
Hazardous Materials Laws which may result in a Material Adverse Effect.
"Permitted Investments" shall mean with respect to any Person:
(a) Governmental Obligations;
(b) Obligations of a state of the United States, the District of
Columbia or any possession of the United States, or any political
subdivision thereof, which are described in Section 103(a) of the Internal
Revenue Code and are graded in any of the highest three (3) major grades
as determined by at least one Rating Agency; or secured, as to payments of
principal and interest, by a letter of credit provided by a financial
institution or insurance provided by a bond insurance company which in
each case is itself or its debt is rated in one of the highest three (3)
major grades as determined by at least one Rating Agency;
(c) Banker's acceptances, commercial accounts, demand deposit
accounts, certificates of deposit, or depository receipts issued by or
maintained with any Lender or a bank, trust company, savings and loan
association, savings bank or other financial institution whose deposits
are insured by the Federal Deposit Insurance Corporation and whose
reported capital and surplus equal at least $250,000,000, provided that
such minimum capital and surplus requirement shall not apply to demand
deposit accounts maintained by Holdings or any of its Subsidiaries in the
ordinary course of business;
(d) Commercial paper rated at the time of purchase within the two
highest classifications established by not less than two Rating Agencies,
and which matures within 270 days after the date of issue;
(e) Secured repurchase agreements against obligations itemized in
paragraph (a) above, and executed by a bank or trust company or by members
of the association of primary dealers or other recognized dealers in
United States government securities, the market value of which must be
maintained at levels at least equal to the amounts advanced;
(f) Any fund or other pooling arrangement which exclusively
purchases and holds the investments itemized in (a) through (e) above; and
(g) Investments by any Foreign Subsidiary in obligations similar in
nature, term and credit quality to those enumerated in clauses (a) through
(f) above, except that the country of such Foreign Subsidiary's formation
shall be substituted for the United States of America.
"Permitted Liens" shall mean with respect to any Person:
(a) Liens for taxes not yet due or which are being contested in good
faith by appropriate proceedings, provided that adequate reserves with
respect thereto are maintained on the books of such Person in conformity
with GAAP;
(b) carriers', warehousemen's, mechanics', materialmen's,
repairmen's, landlord's liens or other like Liens arising in the ordinary
course of business which are not overdue for a period of more than 60 days
or which are being contested in good faith by appropriate proceedings;
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(c) pledges or deposits in connection with workers' compensation,
unemployment insurance and other social security legislation and deposits
securing liability to insurance carriers under insurance or self-insurance
arrangements;
(d) deposits to secure (i) the performance of bids, trade contracts
(other than for borrowed money), statutory obligations, surety and appeal
bonds, performance bonds and other obligations of a like nature or (ii)
the performance of leases permitted hereunder, in each case given or
incurred on terms, in amounts and otherwise in the ordinary course of
business; and
(e) easements, rights-of-way, restrictions and other similar
encumbrances or Liens incurred in the ordinary course of business which,
in the aggregate, are not substantial in amount and which do not in any
case materially detract from the value of the property subject thereto or
materially interfere with the ordinary conduct of the business of such
Person.
"Permitted Real Estate Debt" shall mean that certain Debt of any Credit
Party or any of their respective Domestic Subsidiaries which is secured solely
by a Lien on real estate owned by any Credit Party or any of their respective
Domestic Subsidiaries.
"Permitted Real Estate Debt Documents" shall mean those certain
agreements, documents, certificates and other instruments evidencing the
Permitted Real Estate Debt, as the same may be amended, restated or otherwise
modified from time to time in accordance with the terms of this Agreement.
"Permitted Real Estate Lender" shall mean the bank or other financial
institution which shall have extended the Permitted Real Estate Debt to any
Credit Party or any of their respective Domestic Subsidiaries.
"Permitted Securitization" shall mean the transfer or encumbrance of
certain accounts receivable by a Borrower or any Subsidiary to a Special Purpose
Subsidiary conducted in accordance with the following requirements:
(a) The applicable Borrower and/or the Subsidiary disposing of accounts
receivable to a Special Purpose Subsidiary pursuant to such
Permitted Securitization shall itself actually receive
(substantially contemporaneously with such disposition) cash in
connection with any such Securitization Transaction in an amount
based on normal and customary advance rates (and taking into account
typical deductions for market-based, arms-length Securitization
Transactions);
(b) Each such disposition shall be without recourse to any Credit Party
or any Subsidiary and otherwise on normal and customary terms and
conditions for comparable asset-based Securitization Transactions;
(c) Each such Securitization Transaction shall be structured on the
basis of the issuance of non-recourse (to the Credit Parties and the
Subsidiaries) Debt or other similar securities by a Special Purpose
Subsidiary; and
(d) Both immediately before and immediately after each such disposition,
no Default or Event of Default (whether or not related to such
disposition) shall have occurred and be continuing.
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"Person" shall mean a natural person, corporation, limited liability
company, partnership, limited liability partnership, trust, incorporated or
unincorporated organization, joint venture, joint stock company, or a government
or any agency or political subdivision thereof or other entity of any kind.
"Plastipak Brazil" shall mean Plastipak Packaging do Brazil, Ltda, a
limited liability quota company organized under the laws of Brazil.
"Pledge Agreement(s)" shall mean the Foreign Pledge Agreements, the Young
Pledge Agreement, and each other stock pledge agreement executed and delivered
by Holdings or any Subsidiary in form satisfactory of the Agent and the Majority
Lenders, in each case as amended or otherwise modified from time to time.
"Pledge Release Ratio" shall mean, as of the last day of each fiscal
quarter of Holdings, the ratio of (a) the sum of Consolidated Total Liabilities
minus all Subordinated Debt as of such date to (b) Consolidated Tangible Net
Worth as of such date.
"Pledge Termination Conditions" shall mean the following conditions to be
satisfied prior to the termination of the Pledge Agreements, as follows:
(a) the Leverage Ratio and the Pledge Release Ratio, as determined
based on the most recent Covenant Compliance Certificate delivered by the
Borrowers pursuant to Section 7.2(a), shall be not greater than 2.0 to 1.0
and 2.5 to 1.0, respectively; and
(b) no Default or Event of Default has occurred and is continuing
under this Agreement or any of the other Loan Documents.
"Potential Financial Institution" is defined in Section 2.4(c).
"Prime-based Advance" shall mean an Advance which bears interest at the
Prime-based Rate.
"Prime-based Rate" shall mean, for any day, that rate of interest which is
equal to the Applicable Margin plus the greater of (i) the Prime Rate, and (ii)
the Alternate Base Rate.
"Prime Rate" shall mean the per annum rate of interest announced by the
Agent, at its main office from time to time as its "prime rate" (it being
acknowledged that such announced rate may not necessarily be the lowest rate
charged by the Agent to any of its customers), which Prime Rate shall change
simultaneously with any change in such announced rate.
"Prior Credit Agreement" is defined in the Recitals.
"Pro Forma Projected Financial Information" shall mean, as to any proposed
acquisition, a statement executed by a Responsible Officer (supported by
reasonable detail) setting forth the total consideration to be paid or incurred
in connection with the proposed acquisition, and pro forma combined projected
financial information for Holdings and its Consolidated Subsidiaries and the
acquisition target (if applicable), consisting of projected balance sheets as of
the proposed effective date of the acquisition or the closing date and as of the
end of at least the next succeeding three (3) Fiscal Years of Holdings following
the acquisition and projected statements of income and cash flows for each of
those years, including sufficient detail to permit calculation of the amounts
and the ratios described in Sections 7.9 through 7.12A hereof, as projected as
of the effective date of the acquisition and for those Fiscal Years and
accompanied by (i) a statement setting forth a calculation of the ratios and
amounts so described, (ii)
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a statement in reasonable detail specifying all material assumptions underlying
the projections and (iii) such other information as any Lender shall reasonably
request.
"Purchasing Lender" shall have the meaning set forth in Section 11.7.
"Quoted Rate" shall mean the rate of interest per annum offered by the
Swing Line Lender in its sole discretion with respect to a Swing Line Advance.
"Quoted Rate Advance" means any Swing Line Advance which bears interest at
the Quoted Rate.
"Rating Agency" shall mean Xxxxx'x Investor Services, Standard and Poor's
Ratings Group or any other nationally recognized statistical rating organization
which is acceptable to the Agent.
"Real Estate Lien Release" shall have the meaning set forth in Section
12.12(c) of this Agreement.
"Register" is defined in Section 13.8(f) hereof.
"Reimbursement Obligation(s)" shall mean the obligation of an Account
Party or Account Parties under each Letter of Credit Agreement and this
Agreement to reimburse the Issuing Lender for each payment made by the Issuing
Lender under the Letter of Credit issued pursuant to such Letter of Credit
Agreement, together with all other sums, fees, charges and amounts which may be
owing to the Issuing Lender under such Letter of Credit Agreement or this
Agreement relating to Letters of Credit.
"Request for Advance" shall mean a Request for Revolving Credit Advance or
a Request for Swing Line Advance as the context may indicate.
"Request for Revolving Credit Advance" shall mean a Request for Revolving
Credit Advance issued by any of the Borrowers under Section 2.3 of this
Agreement in the form annexed hereto as Exhibit A, as amended or otherwise
modified.
"Request for Swing Line Advance" shall mean a Request for Swing Line
Advance issued by any of the Borrowers under Section 2.5(c) of this Agreement in
the form attached hereto as Exhibit D, as amended or otherwise modified.
"Requirement of Law" shall mean as to any Person, the certificate of
incorporation and bylaws, certificate of formation and operating agreement, the
partnership agreement or other organizational or governing documents of such
Person and any law, treaty, rule or regulation or determination of an
arbitration or a court or other Governmental Authority, in each case applicable
to or binding upon such Person or any of its property or to which such Person or
any of its property is subject.
"Responsible Officer" shall mean the chief executive officer, chief
financial officer, president, treasurer or the general counsel of a Credit
Party, as applicable, or with respect to compliance with financial covenants,
the chief financial officer or the treasurer of a Credit Party, as applicable or
any other officer having substantially the same authority and responsibility.
"Revolving Credit" shall mean the revolving credit loan to be advanced to
a Borrower by the Lenders pursuant to Article 2 hereof, in an aggregate amount
(subject to the terms hereof), not to exceed, at any one time outstanding, the
Revolving Credit Aggregate Commitment.
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"Revolving Credit Advance" shall mean a borrowing requested by a Borrower
and made by the Lenders under Section 2.1 of this Agreement, including without
limitation any readvance, refunding or conversion of such borrowing pursuant to
Section 2.3 hereof and any advance in respect of a Letter of Credit under
Section 3.6 hereof, and shall include, as applicable, a Eurocurrency-based
Advance and/or a Prime-based Advance.
"Revolving Credit Aggregate Commitment" shall mean Three Hundred Million
Dollars ($300,000,000), subject to reduction or termination under Sections 2.15,
2.16 or 9.2 hereof.
"Revolving Credit Facility Fee" shall mean the fees payable to Agent for
distribution to the Lenders pursuant to Section 2.13 hereof.
"Revolving Credit Maturity Date" shall mean the earlier to occur of (i)
January 28, 2010, as such date may be extended in accordance with Section
2.17(a) of this Agreement and (ii) the date on which the Revolving Credit
Aggregate Commitment shall be terminated pursuant to Sections 2.15, 2.16 or 9.2
hereof.
"Revolving Credit Notes" shall mean the revolving credit notes described
in Section 2.1 hereof, made by each of the Borrowers to each of the Lenders in
the form annexed to this agreement as Exhibit B, as such notes may be amended or
supplemented from time to time, and any other notes issued in substitution,
replacement or renewal thereof from time to time.
"Securitization Transaction(s)" shall mean a transfer of, or grant of a
Lien on, accounts receivable by any Borrower or Subsidiary to a Special Purpose
Subsidiary or other special purpose or limited purpose entity and the issuance
(whether by such Special Purpose Subsidiary or other special purpose or limited
purpose entity or any other Person) of Debt or of any securities secured
directly or indirectly by interests in, or of trust or comparable certificates
or other securities directly or indirectly evidencing interests in, such
accounts receivable.
"Security Agreement" shall mean the Amended and Restated Security
Agreement dated as January 28, 2005, as amended or otherwise modified from time
to time.
"Senior Secured Debt Ratio" shall mean, as of the last day of each fiscal
quarter of Holdings, the ratio of (a) Consolidated Senior Secured Debt on such
date to (b) Consolidated EBITDA for the four fiscal quarters then ending.
"Senior Unsecured Debt" shall mean the indebtedness of Holdings evidenced
by the Senior Unsecured Notes.
"Senior Unsecured Debt Documents" shall mean the Senior Unsecured Notes,
the Senior Unsecured Debt Indenture, and all other documents and agreements to
evidence the Senior Unsecured Debt, as the same may be amended from time to time
(subject to the terms of this Agreement), and any and all other documents
executed in exchange therefor or replacement or renewal thereof.
"Senior Unsecured Debt Indenture" shall mean the Indenture relating to the
Senior Unsecured Notes.
"Senior Unsecured Notes" shall mean (a) the 10.75% Senior Notes of
Holdings due 2011 in the original principal amount of $275,000,000, and the
notes of Holdings issued in exchange therefor pursuant to the Registration
Rights Agreement entered into in connection with the Senior Unsecured Debt
Documents and (b) the 2002 Senior Notes, and the notes of Holdings issued in
exchange therefor pursuant
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to any Registration Rights Agreement entered into in connection with the Senior
Unsecured Debt Documents.
"Special Purpose Subsidiary" shall mean any wholly-owned direct or
indirect Subsidiary of Holdings established for the sole purpose of conducting a
Permitted Securitization and otherwise established and operated in accordance
with customary industry practices and not prohibited by this Agreement.
"Subordinated Debt" shall mean any Debt of Holdings or any Subsidiary
which has been subordinated, in writing, in right of payment and priority to the
Indebtedness, on terms and conditions satisfactory to the Agent and the Majority
Lenders.
"Subordinated Debt Documents" shall mean and include any documents
evidencing Subordinated Debt, as the same may be amended, modified or
supplemented from time to time in compliance with the terms of this Agreement.
"Subsidiary(ies)" shall mean any other corporation, association, joint
stock company, business trust, limited liability company or any other business
entity of which more than fifty percent (50%) of the outstanding voting stock,
share capital, membership or other interests, as the case may be, is owned
either directly or indirectly by any Person or one or more of its Subsidiaries,
or the management of which is otherwise controlled, directly, or indirectly
through one or more intermediaries, or both, by any Person and/or its
Subsidiaries. Unless otherwise specified to the contrary herein or the context
otherwise requires, Subsidiary(ies) shall refer to the Subsidiary(ies) of
Holdings. "100% Subsidiary(ies)" shall mean any of the Subsidiaries of Holdings
whose stock (other than directors' or qualifying shares to the extent required
under applicable law) or other ownership interests is owned 100% by any other
100% Subsidiary and/or Holdings.
"Swing Line" shall mean the revolving credit loan to be advanced to
Borrowers by the Swing Line Lender pursuant to Section 2.5 hereof, in an
aggregate amount (subject to the terms hereof), not to exceed, at any one time
outstanding, the Swing Line Maximum Amount.
"Swing Line Advance" shall mean a borrowing made by Swing Line Lender to
Borrowers pursuant to Section 2.5 hereof.
"Swing Line Lender" shall mean Comerica Bank in its capacity as lender
under Section 2.5 of this Agreement or its successor as lender of the Swing
Line.
"Swing Line Maximum Amount" shall mean Twenty Million Dollars
($20,000,000).
"Swing Line Notes" shall mean the swing line notes which may be issued by
each Borrower at the request of Swing Line Lender pursuant to Section 2.5(a)
hereof in the form annexed hereto as Exhibit C, as the case may be, as such
Notes may be amended or supplemented from time to time, and any notes issued in
substitution, replacement or renewal thereof from time to time.
"Xxxx Realty" shall mean XXXX Realty, LLC, a 100% Subsidiary.
"Tangible Net Worth Adjustment Amount" shall mean, as of any date of
determination, an amount equal to the sum of fifty percent (50%) of Consolidated
Net Income (not reduced by losses) for each fiscal quarter from the fiscal
quarter ending on or about October 31, 2004 to the date of determination, plus
one hundred percent (100%) of the Net Cash Proceeds of Subordinated Debt and
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issuances of Equity Interests received by Holdings or any Subsidiary after the
fiscal quarter ending on or about October 31, 2004.
"Total Debt" of any Person shall mean, as of the applicable date of
determination (but without duplication), all Debt of such Person other than
indebtedness described in sub-section (g) of the definition of Debt.
"Uniform Commercial Code" or "UCC" shall mean the Uniform Commercial Code
as in effect in the State of Michigan, as amended, revised or replaced from time
to time.
"Whiteline" shall mean Whiteline Express, Ltd., a 100% Subsidiary.
"Young Parties" shall mean (a) Absopure Water Company, Buffalo Don's
Artesian Xxxxx, Ltd., Sprinklets Water Centers, Inc., Multi-Investments Limited
Partnership, WCY Realty LLC, Xxxxxxx X. Xxxxx Company, Waters of America,
L.L.C., The Clean Drink Company, L.L.C., The Clean Drink Company II, L.L.C., My
XXXX, LLC, My XXXX XX, LLC, One Water Source, LLC, Two Water Source, LLC or any
Person owned (in whole or in part) by any of them, and (b) the estate of Xxxxxxx
X. Xxxxx, the estate of Xxxx X. Xxxxx, Xxxxxxx X. Xxxxx, their respective
families and trusts, and/or any Person now or hereafter owned (in whole or in
part) or which are under the control of any of them (other than the Loan Parties
and their respective Subsidiaries).
"Young Pledge Agreement" shall mean the Pledge Agreement dated as of
August 21, 2001, encumbering 23,257 shares of the common stock of Holdings, as
amended or otherwise modified from time to time.
2. REVOLVING CREDIT
2.1 Commitment. Subject to the terms and conditions of this Agreement,
each Lender severally and for itself alone agrees to make Advances of the
Revolving Credit to any of the Borrowers from time to time on any Business Day
during the period from the Effective Date hereof until (but excluding) the
Revolving Credit Maturity Date in an aggregate amount, not to exceed at any one
time outstanding such Lender's Percentage of the Revolving Credit Aggregate
Commitment. Subject to the terms and conditions set forth herein, advances,
repayments and readvances may be made under the Revolving Credit. Advances of
the Revolving Credit shall be subject to the following additional conditions and
limitations:
A Person shall not be entitled to request an Advance of the Revolving
Credit or the Swing Line or the issuance of a Letter of Credit hereunder until
(i) with the approval of all Lenders, it has become a party to this Agreement
either by execution and delivery of this Agreement, or by execution and delivery
of a Borrower Addendum to this Agreement, (ii) unless waived in writing by all
Lenders, it has become a party to the Guaranty by execution and delivery of the
Guaranty or of a joinder agreement to the Guaranty, (iii) unless waived in
writing by all Lenders, it has become a party to the Security Agreement, and
(iv) unless waived in writing by all Lenders, Holdings has encumbered and/or
delivered (or caused to be encumbered and/or delivered), as the case may be,
either pursuant to the Security Agreement or a separate Pledge Agreement those
Equity Interests issued by such Borrower and owned by Holdings or a Subsidiary
of Holdings which are required to be encumbered and/or delivered under Section
7.20 hereof, as applicable, and accompanied in each case by authority documents,
legal opinions and other supporting documents as required by Agent and the
Majority Lenders hereunder.
2.2 Accrual of Interest and Maturity; Evidence of Indebtedness.
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(a) Each Borrower hereby unconditionally promises to pay to the
Agent for the account of each Lender the then unpaid principal amount of
each Revolving Credit Advance (plus all accrued and unpaid interest) of
such Lender to such Borrower on the Revolving Credit Maturity Date and on
such other dates and in such other amounts as may be required from time to
time pursuant to this Agreement. Subject to the terms and conditions
hereof, each Revolving Credit Advance shall, from time to time from and
after the date of such Advance (until paid), bear interest at its
Applicable Interest Rate.
(b) Each Lender shall maintain in accordance with its usual practice
an account or accounts evidencing indebtedness of each Borrower to the
appropriate lending office of such Lender resulting from each Revolving
Credit Advance made by such lending office of such Lender from time to
time, including the amounts of principal and interest payable thereon and
paid to such Lender from time to time under this Agreement.
(c) The Agent shall maintain the Register pursuant to Section
13.8(f), and a subaccount therein for each Lender, in which Register and
subaccounts (taken together) shall be recorded (i) the amount of each
Revolving Credit Advance made hereunder, the type thereof and each
Interest Period applicable to any Eurocurrency-based Advance, (ii) the
amount of any principal or interest due and payable or to become due and
payable from the applicable Borrower, as the case may be, to each Lender
hereunder in respect of the Revolving Credit Advances and (iii) both the
amount of any sum received by the Agent hereunder from the applicable
Borrower in respect of the Revolving Credit Advances and each Lender's
share thereof.
(d) The entries made in the Register and the accounts of each Lender
maintained pursuant to paragraphs (b) and (c) of this Section 2.1 shall
absent manifest error, to the extent permitted by applicable law, be
conclusive evidence of the existence and amounts of the obligations of the
Borrowers therein recorded; provided, however, that the failure of any
Lender or the Agent to maintain the Register or any such account, as
applicable, or any error therein, shall not in any manner affect the
obligation of each Borrower to repay the Revolving Credit Advances (and
all other amounts owing with respect thereto) made to such Borrower by
such Lender in accordance with the terms of this Agreement.
(e) The Borrowers agree that, upon written request to the Agent
(with a copy to Holdings) by any Lender, each of the Borrowers will
execute and deliver, to such Lender, at such Borrower's own expense, a
Revolving Credit Note evidencing an amount equal to such Lender's
Percentage of the Revolving Credit Aggregate Commitment; provided, that
the delivery of such Revolving Credit Notes shall not be a condition
precedent to the Effective Date.
2.3 Requests for Advances; Refundings and Conversions of Advances. A
Borrower may request an Advance of the Revolving Credit, refund any such Advance
in the same type of Advance or convert any such Advance to any other type of
Advance of the Revolving Credit only after delivery to Agent of a Request for
Revolving Credit Advance executed by a person previously authorized (in a
writing delivered to the Agent by Holdings or such Borrower) to execute such
Request, subject to the following and to the remaining provisions hereof:
(a) each such Request for Revolving Credit Advance shall set forth
the information required on the Request for Revolving Credit Advance form
annexed hereto as Exhibit A, including without limitation:
(i) the proposed date of such Advance, which must be a
Business Day;
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(ii) whether such Advance is a refunding or conversion of an
outstanding Advance; and
(iii) whether such Advance is to be a Prime-based Advance or a
Eurocurrency-based Advance, and, except in the case of a Prime-based
Advance, the first Interest Period applicable thereto.
(b) each such Request for Revolving Credit Advance shall be
delivered to Agent by noon (Detroit time) three (3) Business Days prior to
the proposed date of Advance, except in the case of a Prime-based Advance,
for which the Request for Advance must be delivered by 11:00 a.m. (Detroit
time) on such proposed date;
(c) on the proposed date of such Advance,
(i) as to any Borrower as of any date of determination, after
giving effect to all Advances and Letters of Credit requested by any
Borrower on such date of determination, the sum of (i) the aggregate
outstanding principal amount of all Advances of the Revolving Credit
and of the Swing Line on such date plus (ii) the aggregate
outstanding amount of Letter of Credit Obligations on such date
shall not exceed the lesser of (a) the then applicable Revolving
Credit Aggregate Commitment and (b) the Borrowing Base;
(ii) as to any Borrower, after giving effect to all Advances
and Letters of Credit requested by any such Borrower on such date of
determination, the sum of (i) of the aggregate outstanding principal
amount of all Advances of the Revolving Credit and of the Swing Line
hereunder to such Borrower on such date plus (ii) the aggregate
outstanding amount of Letter of Credit Obligations for the account
of such Borrower on such date shall not exceed the Borrower Sublimit
applicable to such Borrower;
provided however, that, in the case of any Advance being applied to refund
an outstanding Advance, the aggregate principal amount of such Advances to
be refunded shall not be included for purposes of calculating availability
under this Section 2.3(c);
(d) in the case of a Prime-based Advance, the principal amount of
the initial funding of such Advance, as opposed to any refunding or
conversion thereof, shall be at least Two Million Dollars ($2,000,000);
(e) in the case of a Eurocurrency-based Advance the principal amount
of such Advance, plus the amount of any other outstanding Revolving Credit
Advance to be then combined therewith having the same Applicable Interest
Rate and Interest Period, if any, shall be at least Three Million Dollars
($3,000,000) (or a larger integral multiple of One Hundred Thousand
Dollars ($100,000)) and in any case, at any one time there shall not be in
effect for any Borrower more than six (6) Applicable Interest Rates and
Interest Periods;
(f) a Request for Revolving Credit Advance, once delivered to Agent,
shall not be revocable by the Borrowers;
(g) each Request for Revolving Credit Advance shall constitute a
certification by Holdings and the applicable Borrower, if any, as of the
date thereof that:
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(i) both before and after such Advance, the obligations of the
Borrowers and the Guarantors set forth in this Agreement and the
other Loan Documents to which such Persons are parties are valid,
binding and enforceable obligations of the applicable Borrowers and
Guarantors;
(ii) all conditions to Advances of the Revolving Credit have
been satisfied, and shall remain satisfied to and including the date
of such Advance (both before and after giving effect to such
Advance);
(iii) there is no Default or Event of Default in existence,
and none will exist upon the making of such Advance (both before and
after giving effect to such Advance);
(iv) the representations and warranties contained in this
Agreement and the other Loan Documents are true and correct in all
material respects and shall be true and correct in all material
respects as of the making of such Advance (both before and after
giving effect to such Advance); and
(v) the execution of such Request for Advance will not violate
the material terms and conditions of any material contract,
agreement or other borrowing of the Borrowers.
Agent, acting on behalf of the Lenders, may, at its option, lend under
this Section 2 upon the telephone request of a person previously authorized (in
a writing delivered to the Agent) by the applicable Borrower to make such
requests and, in the event Agent, acting on behalf of the Lenders, makes any
such Advance upon a telephone request, the requesting officer shall fax to
Agent, on the same day as such telephone request, a Request for Advance.
Borrowers hereby authorize Agent to disburse Advances under this Section 2.3
pursuant to the telephone instructions of any person purporting to be a person
identified by name on a written list of persons authorized by Borrowers and
delivered to Agent prior to the date of such request to make Requests for
Advance on behalf of the Borrowers. Notwithstanding the foregoing, each Borrower
acknowledges that each Borrower (i) shall bear all risk of loss resulting from
disbursements made upon any telephone request, and (ii) shall indemnify the
Lenders for all losses caused by their good faith reliance on any telephone
request. Each telephone request for an Advance shall constitute a certification
of the matters set forth in the Request for Revolving Credit Advance form as of
the date of such requested Advance.
2.4 Disbursement of Advances.
(a) Upon receiving any Request for Revolving Credit Advance from a
Borrower under Section 2.3 hereof, Agent shall promptly notify each Lender
by wire, or telephone (confirmed by wire or telecopy) of the amount of
such Advance to be made and the date such Advance is to be made by said
Lender pursuant to its Percentage of such Advance. Unless such Lender's
commitment to make Advances of the Revolving Credit hereunder shall have
been suspended or terminated in accordance with this Agreement, each such
Lender shall make available the amount of its Percentage of each Advance
in immediately available funds to Agent,
(i) for Prime-based Advances, at the office of Agent located
at Xxx Xxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx 00000, not later than 3:00
p.m. (Detroit time) on the date of such Advance;
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(ii) for Eurocurrency-based Advances, at the Agent's
Correspondent for the account of the Eurocurrency Lending Office of
the Agent, not later than 12 noon (the time of the Agent's
Correspondent) on the date of such Advance.
(b) Subject to submission of an executed Request for Revolving
Credit Advance by the applicable Borrower without exceptions noted in the
compliance certification therein and compliance with the terms and
conditions of this Agreement, Agent shall make available to the applicable
Borrower the aggregate of the amounts so received by it from the Lenders
in like funds:
(i) for Prime-based Advances, not later than 4:00 p.m.
(Detroit time) on the date of such Advance by credit to an account
of such Borrower maintained with Agent or to such other account or
third party as such Borrower may reasonably direct; and
(ii) for Eurocurrency-based Advances, not later than 4:00 p.m.
(the time of the Agent's Correspondent) on the date of such Advance,
by credit to an account of such Borrower maintained with Agent's
Correspondent or to such other account or third party as such
Borrower may reasonably direct.
(c) Agent shall deliver the documents and papers received by it for
the account of each Lender to such Lender or upon its order. Unless Agent
shall have been notified by any Lender prior to the date of any proposed
Revolving Credit Advance that such Lender does not intend to make
available to Agent such Lender's Percentage of such Advance, Agent may
assume that such Lender has made such amount available to Agent on such
date and in such currency, as aforesaid and may, in reliance upon such
assumption, make available to the applicable Borrower a corresponding
amount. If such amount is not in fact made available to Agent by such
Lender, as aforesaid, Agent shall be entitled to recover such amount on
demand from such Lender. If such Lender does not pay such amount forthwith
upon Agent's demand therefor, the Agent shall promptly notify Holdings,
and the applicable Borrower shall pay such amount to Agent. Agent shall
also be entitled to recover from such Lender or the applicable Borrower,
as the case may be, but without duplication, interest on such amount in
respect of each day from the date such amount was made available by Agent
to such Borrower, to the date such amount is recovered by Agent, at a rate
per annum equal to:
(i) in the case of such Lender, for the first two (2) Business
Days such amount remains unpaid, with respect to Prime-based
Advances, the Federal Funds Effective Rate, and with respect to
Eurocurrency-based Advances, Agent's aggregate marginal cost
(including the cost of maintaining any required reserves or deposit
insurance and of any fees, penalties, overdraft charges or other
costs or expenses incurred by Agent as a result of such failure to
deliver funds hereunder) of carrying such amount and thereafter, at
the rate of interest then applicable to such Revolving Credit
Advances; and
(ii) in the case of such Borrower, the rate of interest then
applicable to such Advance of the Revolving Credit.
The obligation of any Lender to make any Advance of the Revolving Credit
hereunder shall not be affected by the failure of any other Lender to make any
Advance hereunder, and no Lender shall have any liability to Holdings or any of
its Subsidiaries, the Agent, any other Lender, or any other party for another
Lender's failure to make any loan or Advance hereunder. In the event any Lender
shall fail to advance any amounts required to be advanced in accordance with the
terms of this Article 2 (a
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"Defaulting Lender"), the Agent shall promptly provide written notice thereof to
the Borrowers and to each other Lender (each such other Lender being referred to
in this Section as a "Non-Defaulting Lender"). Each Non-Defaulting Lender shall
have ten (10) Business Days from receipt of said notice to exercise its option
to agree to enter into an agreement pursuant to which the Non-Defaulting Lender
shall assume the Defaulting Lender's rights and obligations under this
Agreement, its Notes and the other Loan Documents. The Non-Defaulting Lender
shall exercise such option by providing written notice of same to the Defaulting
Lender (and if there is more than one Non-Defaulting Lender, the assignment
agreement shall be entered into with the Non-Defaulting Lender who first
notifies the Defaulting Lender of its decision to exercise said option) and to
Borrowers. If no Non-Defaulting Lender shall exercise the above-described option
within the said ten (10) Business Day period, (X) Borrowers may, subject to
Section 13.8(c) hereof, within thirty (30) days of the delivery of the notice
described above, advise such Defaulting Lender of another bank or financial
institution to which assignments are permitted pursuant to Section 13.8(c)
hereof and which is willing to assume such Defaulting Lender's rights and
obligations under this Agreement, its Notes and the other Loan Documents (each
such bank or financial institution being hereinafter referred to as a "Potential
Financial Institution"), whereupon such Defaulting Lender shall, subject to
Section 13.8(c), assign its said rights and obligations to the Potential
Financial Institution and (Y) at any time following the passage of thirty (30)
days after delivering the notice described above, Agent may, at its option,
reduce the Revolving Credit Aggregate Commitment by an amount equal to the
amount of such Defaulting Lender's Percentage, it being understood that after
such a reduction, the Borrowers shall comply with the requirements of Section
2.14(a) of this Agreement, if applicable, and provided that any assignment or
reduction pursuant to clauses (X) and (Y) of this Section 2.4 shall not alter
Borrowers' remedies vis a vis the Defaulting Lender.
2.5 Swing Line Advances.
(a) Advances. The Swing Line Lender shall, on the terms and subject
to the conditions hereinafter set forth (including without limitation
Section 2.5(c) hereof), make one or more Advances (each such advance being
a "Swing Line Advance") to any Borrower (provided that any Borrower
requesting Swing Line Advances hereunder has become a party to this
Agreement, either by execution and delivery of this Agreement or by
complying with the terms and conditions set forth in Section 2.1(a)
hereof), from time to time on any Business Day during the period from the
date hereof to (but excluding) the Revolving Credit Maturity Date an
amount not to exceed at any time outstanding the Swing Line Maximum
Amount. Swing Line Lender shall maintain in accordance with its usual
practice an account or accounts evidencing indebtedness of each of the
Borrowers to Swing Line Lender resulting from each Swing Line Advance of
such Lender from time to time, including the amounts of principal and
interest payable thereon and paid to such Lender from time to time. The
entries made in such account or accounts of Swing Line Lender shall, to
the extent permitted by applicable law, be conclusive evidence, absent
manifest error, of the existence and amounts of the obligations of the
Borrower therein recorded; provided, however, that the failure of Swing
Line Lender to maintain such account, as applicable, or any error therein,
shall not in any manner affect the obligation of each Borrower to repay
the Swing Line Advances (and all other amounts owing with respect thereto)
made to such Borrower by Swing Line Lender in accordance with the terms of
this Agreement. Advances, repayments and readvances under the Swing Line
may be made, subject to the terms and conditions of this Agreement. Each
Swing Line Advance shall mature and the principal amount thereof shall be
due and payable by the applicable Borrower on the last day of the Interest
Period applicable thereto (if any) and, in the case of any Prime-based
Advance, on the Revolving Credit Maturity Date.
The Borrowers agree that, upon the written request of Swing Line Lender
(with a copy to Holdings), each of the Borrowers will execute and deliver
to Swing Line Lender Swing Line
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Notes; provided, that the delivery of such Swing Line Notes shall not be a
condition precedent to the Effective Date.
(b) Accrual of Interest. Each Swing Line Advance shall, from time to
time after the date of such Advance, bear interest at its Applicable
Interest Rate. The amount and date of each Swing Line Advance, its
Applicable Interest Rate, its Interest Period, if any, and the amount and
date of any repayment shall be noted on Swing Line Lender's account
maintained pursuant to Section 2.5(a), which records will be conclusive
evidence thereof, absent manifest error; provided, however, that any
failure by the Swing Line Lender to record any such information shall not
relieve the applicable Borrower of its obligation to repay the outstanding
principal amount of such Advance, all interest accrued thereon and any
amount payable with respect thereto in accordance with the terms of this
Agreement and the other Loan Documents.
(c) Requests for Swing Line Advances. A Borrower may request a Swing
Line Advance only after delivery to Swing Line Lender of a Request for
Swing Line Advance executed by a person authorized (in a writing a copy of
which has been previously delivered to the Agent) by the applicable
Borrower to make such requests, subject to the following and to the
remaining provisions hereof:
(i) each such Request for Swing Line Advance shall set forth
the information required on the Request for Advance form annexed
hereto as Exhibit D, including without limitation:
(A) the proposed date of such Swing Line Advance, which
must be a Business Day;
(B) whether such Swing Line Advance is to be a
Prime-based Advance or a Quoted Rate Advance, and;
(C) in the case of a Quoted Rate Advance, the duration
of the Interest Period applicable thereto.
(ii) in the case of any Borrower requesting any Swing Line
Advance, after giving effect to all Swing Line Advances requested by
any Borrower on such date of determination, the aggregate principal
amount of all outstanding Swing Line Advances on such date shall not
exceed the Swing Line Maximum Amount;
(iii) as to any Borrower, after giving effect to all Swing
Line Advances requested by any such Borrower on such date of
determination, the sum of (i) of the aggregate outstanding principal
amount of all Advances of the Revolving Credit and of the Swing Line
hereunder to such Borrower on such date plus (ii) the aggregate
outstanding amount of Letter of Credit Obligations for the account
of such Borrower on such date shall not exceed the Borrower Sublimit
applicable to such Borrower;
(iv) in the case of any Borrower requesting any Swing Line
Advance, on the proposed date of such Swing Line Advance, after
giving effect to all Advances and Letters of Credit requested by any
Borrower on such date of determination, the sum of (x) of the
aggregate outstanding principal amount of all Advances of the
Revolving Credit and of the Swing Line on such date plus (y) the
aggregate outstanding amount of Letter of Credit Obligations on such
date shall not exceed the lesser of (a) the then applicable
Revolving Credit Aggregate Commitment and (b) the Borrowing Base;
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(v) the principal amount of the initial funding of such
Advance, as opposed to any refunding or conversion thereof, shall be
at least One Hundred Thousand Dollars ($100,000) or such lesser
amount as shall be agreed to by Swing Line Lender;
(vi) each such Request for Swing Line Advance shall be
delivered to the Swing Line Lender by 2:00 p.m. (Detroit time) on
the proposed date of the Advance;
(vii) each Request for Swing Line Advance, once delivered to
Swing Line Lender, shall be irrevocable by the Borrowers, and shall
constitute and include a certification by the applicable Borrower as
of the date thereof that:
(A) both before and after such Swing Line Advance, the
obligations of the Borrowers and Guarantors set forth in this
Agreement and the other Loan Documents, are valid, binding and
enforceable obligations of the Borrowers and Guarantors;
(B) all conditions to the making of Swing Line Advances
have been satisfied (both before and after giving effect to
such Advance);
(C) both before and after the making of such Swing Line
Advance, there is no Default or Event of Default in existence;
and
(D) both before and after such Swing Line Advance, the
representations and warranties contained in this Agreement and
the other Loan Documents are true and correct in all material
respects.
At the option of the Swing Line Lender, subject to revocation by Swing
Line Lender at any time and from time to time, Borrowers may utilize the Swing
Line Bank's "Sweep to Loan" automated system for obtaining Swing Line Advances.
Each time a Swing Line Advance is made using the "Sweep to Loan" system,
Borrowers shall be deemed to have certified to the Swing Line Lender and the
Lenders each of the matters set forth in clause (vii) of this Section 2.5(c).
Swing Line Lenders may revoke the Borrowers' privilege to use the "Sweep to
Loan" system at any time and from time to time for any reason and, immediately
upon any such revocation, the "Sweep to Loan" system shall no longer be
available to the Borrowers for the funding of Swing Line Advances hereunder (or
otherwise) and the regular procedures set forth for the making of Swing Line
Advances shall be deemed immediately to apply. Swing Line Lender may, at its
option, also elect to make Swing Line Advances upon a Borrower's telephone
requests on the basis set forth in the succeeding paragraph, provided that the
Borrowers comply with the provisions set forth in Section 2.5.
Swing Line Lender may, at its option, lend under this Section 2.5(c) upon
the telephone request of an authorized officer of a Borrower and, in the event
Swing Line Lender makes any such Advance upon a telephone request, the
requesting officer shall, if so requested by Swing Line Lender, fax to Swing
Line Lender, on the same day as such telephone request, a Request for Swing Line
Advance. Borrowers hereby authorize Swing Line Lender to disburse Advances under
this Section 2.5(c) pursuant to the telephone instructions of any person
purporting to be a person identified by name on a written list of persons
authorized by each Borrower to make Requests for Advance on behalf of the
Borrowers. Notwithstanding the foregoing, the Borrowers acknowledge that the
Borrowers shall bear all risk of loss resulting from disbursements made upon any
telephone request. Each telephone request for an Advance shall constitute a
certification of the matters set forth in the Request for Swing Line Advance
form as of the date of such requested Advance. Swing Line Lender shall promptly
deliver to Agent by telecopy a copy of any Request for Advance received
hereunder.
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(d) Disbursement of Swing Line Advances. Subject to submission of an
executed Request for Swing Line Advance by a Borrower without exceptions
noted in the compliance certification therein and to the other terms and
conditions hereof, Swing Line Lender shall make available to the
applicable Borrower the amount so requested, in like funds and currencies,
not later than 4:00 p.m. (Detroit time) on the date of such Advance by
credit to an account of the applicable Borrower maintained with Agent or
to such other account or third party as the Borrower may reasonably direct
in writing; and
Swing Line Lender shall promptly notify Agent of any Swing Line Advance by
telephone or telecopier.
(e) Refunding of or Participation Interest in Swing Line Advances.
(i) The Agent, at any time in its sole and absolute
discretion, may on behalf of the applicable Borrower (each of which
hereby irrevocably directs the Agent to act on its behalf) request
each of the Lenders (including the Swing Line Lender in its capacity
as a Lender) to make an Advance of the Revolving Credit to each of
the Borrowers, in an amount equal to such Lender's Percentage of the
principal amount of the aggregate Swing Line Advances outstanding to
each such party on the date such notice is given (the "Refunded
Swing Line Advances"). The applicable Advance of the Revolving
Credit used to refund such Swing Line Advance shall be a Prime-based
Advance. In connection with the making of any such Refunded Swing
Line Advances or the purchase of a participation interest in Swing
Line Advances under Section 2.5(e)(ii) hereof, the Swing Line Lender
shall retain its claim against the applicable Borrower for any
unpaid interest or fees in respect thereof. Unless any of the events
described in Section 9.1(k) hereof shall have occurred (in which
event the procedures of subparagraph (ii) of this Section 2.5(e)
shall apply) and regardless of whether the conditions precedent set
forth in this Agreement to the making of an Advance of the Revolving
Credit are then satisfied but subject to Section 2.5(e)(iii), each
Lender shall make the proceeds of its Advance of the Revolving
Credit available to the Agent for the benefit of the Swing Line
Lender at the office of the Agent specified in Section 2.4(a) hereof
prior to 11:00 a.m. Detroit time on the Business Day next succeeding
the date such notice is given in immediately available funds. The
proceeds of such Advances of the Revolving Credit shall be
immediately applied to repay the Refunded Swing Line Advances in
accordance with the provisions of Section 10.1 hereof.
(ii) If, prior to the making of an Advance of the Revolving
Credit pursuant to subparagraph (i) of this Section 2.5(e), one of
the events described in Section 9.1(k) hereof shall have occurred,
each Lender will, on the date such Advance of the Revolving Credit
was to have been made, purchase from the Swing Line Lender an
undivided participating interest in each Refunded Swing Line Advance
in an amount equal to its Percentage of such Refunded Swing Line
Advance. Each Lender within the time periods specified in Section
2.5(e)(i) hereof, as applicable, shall immediately transfer to the
Agent, in immediately available funds the amount of its
participation and upon receipt thereof the Agent will deliver to
such Lender a Swing Line Participation Certificate in the form of
Exhibit F evidencing such participation.
(iii) Each Lender's obligation to make Advances of the
Revolving Credit and to purchase participation interests in
accordance with clauses (i) and (ii) of this Section 2.5(e) shall be
absolute and unconditional and shall not be affected by any
circumstance, including, without limitation, (1) any set-off,
counterclaim, recoupment, defense or other
33
right which such Lender may have against Swing Line Lender, the
Borrowers or any other Person for any reason whatsoever; (2) the
occurrence or continuance of any Default or Event of Default; (3)
any adverse change in the condition (financial or otherwise) of any
Borrower or any other Person; (4) any breach of this Agreement by
any Borrower or any other Person; (5) any inability of the Borrowers
to satisfy the conditions precedent to borrowing set forth in this
Agreement on the date upon which such participating interest is to
be purchased; (6) the termination of the Revolving Credit Aggregate
Commitment; or (7) any other circumstance, happening or event
whatsoever, whether or not similar to any of the foregoing. If any
Lender does not make available to the Agent the amount required
pursuant to clause (1) or (2) above, as the case may be, the Agent
shall be entitled to recover such amount on demand from such Lender,
together with interest thereon for each day from the date of
non-payment until such amount is paid in full (x) for the first two
(2) Business Days such amount remains unpaid, at the Federal Funds
Effective Rate and (y) thereafter, at the rate of interest then
applicable to such Swing Line Advances.
Notwithstanding the foregoing, no Lender shall be required, except in the
case of Swing Line Advances deemed to have been made pursuant to Sections 3.6(a)
and 3.6(c) hereof, to make any Revolving Credit Advance to refund a Swing Line
Advance or to purchase a participation in a Swing Line Advance if prior to the
making of the Swing Line Advance by the Swing Line Lender, the Agent had
obtained actual knowledge that an Event of Default had occurred and was
continuing; provided, however that the obligation of the Lenders to make such
Revolving Credit Advances shall be reinstated upon the date of which such Event
of Default has been waived by the requisite Lenders, as applicable.
2.6 Prime-based Interest Payments. Interest on the unpaid balance of all
Prime-based Advances of the Revolving Credit and all Swing Line Advances carried
at a Prime-based Rate from time to time outstanding shall accrue from the date
of such Advance to the Revolving Credit Maturity Date (and until paid), at a per
annum interest rate equal to the Prime-based Rate, and shall be payable in
immediately available funds quarterly commencing on the first day of Holdings'
fiscal quarter next succeeding the calendar quarter during which the initial
Advance of the Revolving Credit or Swing Line Advance, as the case may be, is
made and on the first day of each fiscal quarter thereafter. Interest accruing
at the Prime-based Rate shall be computed on the basis of a 360 day year and
assessed for the actual number of days elapsed, and in such computation effect
shall be given to any change in the interest rate resulting from a change in the
Prime-based Rate on the date of such change in the Prime-based Rate.
2.7 Eurocurrency-based Interest Payments and Quoted Rate Interest
Payments.
(a) Interest on each Eurocurrency-based Advance of the Revolving
Credit shall accrue at the Eurocurrency-based Rate and shall be payable in
immediately available funds on the last day of the Interest Period
applicable thereto (and, if any Interest Period shall exceed three months,
then on the last Business Day of the third month of such Interest Period,
and at three month intervals thereafter). Interest accruing at the
Eurocurrency-based Rate shall be computed on the basis of a 360 day year
and assessed for the actual number of days elapsed from the first day of
the Interest Period applicable thereto to but not including the last day
thereof.
(b) Interest on each Quoted Rate Advance of the Swing Line shall
accrue at its Quoted Rate and shall be payable in immediately available
funds on the last day of the Interest Period applicable thereto. Interest
accruing at a Quoted Rate shall be computed on the basis of a 360 day year
and assessed for the actual number of days elapsed from the first day of
the Interest Period applicable thereto to, but not including, the last day
thereof.
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2.8 Interest Payments on Conversions. Notwithstanding anything to the
contrary in the preceding sections, all accrued and unpaid interest on any
Advance converted pursuant to Section 2.3 hereof shall be due and payable in
full on the date such Advance is converted.
2.9 Interest on Default. In the event and so long as any Event of Default
shall exist, in the case of any Event of Default under Section 9.1(a), 9.1(b) or
9.1(k), immediately upon the occurrence thereof, and in the case of all other
Events of Default, upon notice from the Majority Lenders, interest shall be
payable daily on all Advances from time to time outstanding at a per annum rate
equal to the Applicable Interest Rate plus three percent (3%).
2.10 Optional Prepayment of Revolving Credit Advances.
(a) The Borrowers may prepay all or part of the outstanding balance
of any Prime-based Advance(s) of the Revolving Credit at any time,
provided that the amount of any partial prepayment shall be at least One
Million Dollars ($1,000,000) and, after giving effect to any such partial
prepayment, the aggregate balance of Prime-based Advance(s) of the
Revolving Credit remaining outstanding, if any, shall be at least Two
Million Dollars ($2,000,000). The Borrowers may prepay all or part of any
Eurocurrency-based Advance (subject to not less than two (2) Business
Days' notice to Agent) provided that the minimum amount of any such
partial prepayment shall be One Million Dollars ($1,000,000), and, after
giving effect to any such partial prepayment, the unpaid portion of such
Advance which is refunded or converted under Section 2.3 hereof shall be a
minimum of Two Million Dollars ($2,000,000); provided further, however
that if the prepayment of a Eurocurrency-based Advance is made on a day
other than the last Business Day of the then current Interest Period
applicable to such Eurocurrency-based Advance, then, pursuant to Section
11.1, the applicable Borrower shall compensate the Lenders for any losses.
(b) The Borrowers may prepay all or part of the outstanding balance
of any Swing Line Advance carried at the Prime-based Rate at any time,
provided that after giving effect to any such partial prepayment, the
aggregate balance of such Swing Line Advances remaining outstanding, if
any, shall be at least a One Hundred Thousand Dollars ($100,000). The
Borrowers may prepay all or part of any Swing Line Advances carried at the
Quoted Rate (subject to not less than two (2) Business Days' notice to
Swing Line Lender and Agent), provided that after giving effect of any
such partial prepayment, and the unpaid portion of such Advance which is
refunded or converted under Section 2.5(c) hereof shall be at least of Two
Hundred Thousand Dollars ($200,000); provided further, however that if the
prepayment of a Quoted Rate Advance is made on a day other than the last
Business Day of the then current Interest Period applicable to such Quoted
Rate Advance, then, pursuant to Section 11.1, the applicable Borrower
shall compensate the Swing Line Lenders for any losses.
(c) Any prepayment made in accordance with this Section shall be
subject to Section 11.1 hereof, but otherwise without premium, penalty or
prejudice to the right to readvance under the terms of this Agreement.
2.11 Reserved.
2.12 Prime-based Advance in Absence of Election or upon Default. (a) Upon
the expiration of any Interest Period applicable to any Eurocurrency-based
Advance, if the applicable Borrower has failed to timely select a new Interest
Period to be applicable to such Eurocurrency Advance, such Borrower shall be
deemed to have elected to convert such Eurocurrency-based Advance into a
Prime-based Advance effective as of the expiration date of such Interest Period,
and (b) subject to Sections 2.9 and
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11.1 hereof, if a Default or an Event of Default shall have occurred and be
continuing, then the principal amount of any Eurocurrency-based Advance which
has not been prepaid shall, absent a contrary election of the Majority Lenders,
be converted at Agent's option to a Prime-based Advance and the Agent shall
thereafter promptly notify such Borrower of said action.
2.13 Revolving Credit Facility Fee. From the Effective Date to the
Revolving Credit Maturity Date, the Borrowers shall pay to the Agent for
distribution to the Lenders, pro rata in accordance with their respective
Percentages, a Revolving Credit Facility Fee on the Revolving Credit Aggregate
Commitment (determined without regard to usage thereof). The Revolving Credit
Facility Fee shall be equal to the Revolving Credit Aggregate Commitment
multiplied by the Applicable Fee Percentage computed on a daily basis. The
Revolving Credit Facility Fee shall be payable quarterly in arrears commencing
on the first day of the fiscal quarter immediately following the fiscal quarter
ending on or about January 31, 2005 (in respect of the prior quarter or portion
thereof) and on the first day of each fiscal quarter thereafter. The Revolving
Credit Facility Fee shall be computed on the basis of a year of three hundred
sixty (360) days and assessed for the actual number of days elapsed. Upon
receipt of such payment, Agent shall make prompt payment to each Lender of its
share of the Revolving Credit Facility Fee based upon its respective Percentage.
It is expressly understood that the Revolving Credit Facility Fees described in
this Section are not refundable under any circumstances.
2.14 Mandatory Reduction of Indebtedness.
(a) If at any time and for any reason, the sum of (A) the aggregate
outstanding principal amount of all Revolving Credit Advances plus (B) the
aggregate outstanding principal amount of all Swing Line Advances plus (C)
the aggregate outstanding amount of all Letter of Credit Obligations,
exceeds the lesser of (i) the Revolving Credit Aggregate Commitment and
(ii) the Borrowing Base (as used in this clause (a), the "Excess"), the
Borrowers shall immediately repay the Indebtedness by the amount of such
Excess, and/or reduce any pending request for an Advance on such day by
the amount of the Excess.
(b) If at any time and for any reason with respect to any Borrower,
the aggregate principal amount (tested in the manner set forth in clause
(a) above) of all Advances outstanding hereunder to such Borrower, plus
the aggregate amount of all Letter of Credit Obligations for the account
of such Borrower (tested in the manner set forth in clause (a) above),
exceeds the Borrower Sublimit applicable to such Borrower (as used in this
clause (b), the "Excess"), then in each case, such Borrower shall
(i) immediately repay that portion of the Indebtedness
outstanding to such Borrower then carried as a Prime-based Advance,
if any, by the amount of such Excess, and/or reduce on such day any
pending request for an Advance submitted by such Borrower by the
amount of such Excess, to the extent thereof; and
(ii) on the last day of each Interest Period of any
Eurocurrency-based Advance outstanding to such Borrower as of such
time, until the necessary reductions of Indebtedness under this
Section 2.14(b) have been fully made, repay such Indebtedness
carried in such Advances and/or reduce any requests for refunding or
conversion of such Advances submitted (or to be submitted) by such
Borrower in respect of such Advances, by the amount of such Excess,
to the extent thereof.
2.15 Mandatory Repayment of Revolving Advances; Mandatory Reduction of
Revolving Credit Aggregate Commitment.
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(a) Immediately upon receipt by Holdings or any Subsidiary of any
Net Cash Proceeds from any Asset Sale not permitted by Section 8.5(a),
(b), (c) or (d) (other than the sale of any asset or assets, in a single
transaction or series of transactions, with a value less than $1,000,000)
or from any Permitted Securitization, Borrowers shall repay (or cause to
be repaid) the Revolving Credit Advances and Swing Line Advances then
outstanding by an amount equal to one hundred percent (100%) of such Net
Cash Proceeds, until such Advances have been repaid in full; provided,
however, that (x) in the case of Asset Sales permitted under Section
8.5(e), such Borrower or Subsidiary may use all or any portion of the Net
Cash Proceeds of such Asset Sale to purchase replacement assets used or to
be used by such Borrower or such Subsidiary, as the case may be, in the
business as permitted under Section 7.4(a) so long as (i) no Default or
Event of Default has occurred and is continuing, (ii) each such purchase
is made within 180 days following the date of such Asset Sale and (iii)
such Borrower or Subsidiary delivers to the Agent, concurrently with or
prior to the date of such Asset Sale, a certificate of an authorized
officer of such Borrower or such Subsidiary stating that such Net Cash
Proceeds will be so used and (y) if such Asset Sale consists of real
property subject to the Lien of the Permitted Real Estate Lender, the Net
Cash Proceeds of such sale may be applied to prepay or pay the Permitted
Real Estate Debt, provided that any Net Cash Proceeds in excess of the
amounts required to prepay the Permitted Real Estate Debt pursuant to the
terms of the Permitted Real Estate Debt Documents shall be applied as
required under this Section 2.15(a) and (z) except to the extent used to
purchase replacement assets in compliance with clause (x) of this proviso,
or not required to be applied in compliance with clause (y) of this
proviso, in each case, such Borrower shall comply or such Subsidiary shall
comply with the mandatory prepayments provisions of this Section 2.15(a).
(b) Immediately upon receipt by Holdings or any Subsidiary of the
Net Cash Proceeds of the issuance of any Equity Interests of Holdings or
such Subsidiary or of any Subordinated Debt or Permitted Real Estate Debt
issued by Holdings or any Subsidiary on or after the Effective Date,
Borrowers shall repay the Revolving Advances and Swing Line Advances then
outstanding by an amount equal to (i) one hundred percent (100%) of such
Net Cash Proceeds in the case of the issuance of Subordinated Debt or of
Permitted Real Estate Debt and (ii) fifty percent (50%) of such Net Cash
Proceeds in the case of the issuance of Equity Interests until such
Advances have been paid in full.
(c) To the extent that, on the date any mandatory repayment of the
Revolving Advances under this Section 2.15 is due, the Indebtedness under
the Revolving Credit or any other Indebtedness to be prepaid is being
carried, in whole or in part, at the Eurocurrency-based Rate and no
Default or Event of Default has occurred and is continuing, the Borrowers
may deposit the amount of such mandatory prepayment in a cash collateral
account to be held by the Agent, for and on behalf of the Agent and the
Lenders (which shall be an interest-bearing account), on such terms and
conditions as are reasonably acceptable to Agent and the Lenders. Subject
to the terms and conditions of said cash collateral account, sums on
deposit in said cash collateral account shall be applied (until exhausted)
to reduce the principal balance of the Revolving Credit on the last day of
each Interest Period attributable to the Eurocurrency-based Advances of
such Revolving Advance. Subject to the terms and conditions set forth
herein, amounts repaid under this Section 2.15 may be immediately
reborrowed pursuant to Section 2.1 hereof.
(d) Upon the receipt of any Net Cash Proceeds as described in this
Section 2.15 (except from the issuance of the Permitted Real Estate Debt),
the Revolving Credit Aggregate Commitment shall be reduced by the amount
of such Net Cash Proceeds. Any such reduction shall reduce each Lender's
portion of the Revolving Credit Aggregate Commitment proportionately
(based on the applicable Percentages) and shall be permanent and
irrevocable.
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2.16 Optional Reduction or Termination of Revolving Credit Aggregate
Commitment. Provided that no Default or Event of Default has occurred and is
continuing, the Borrowers may upon at least five Business Days' prior written
notice to the Agent, permanently reduce the Revolving Credit Aggregate
Commitment in whole at any time, or in part from time to time, without premium
or penalty, provided that: (i) each partial reduction of the Revolving Credit
Aggregate Commitment shall be in an aggregate amount equal to Five Million
Dollars ($5,000,000) or a larger integral multiple of One Million Dollars
($1,000,000); (ii) each reduction shall be accompanied by the payment of the
Revolving Credit Facility Fee, if any, accrued to the date of such reduction;
(iii) the applicable Borrower shall prepay in accordance with the terms hereof
the amount, if any, by which the amount of the aggregate unpaid principal amount
of Advances outstanding hereunder, plus the amount of the aggregate undrawn
amount of outstanding Letter of Credit Obligations, exceeds the amount of the
then applicable Revolving Credit Aggregate Commitment as so reduced, together
with interest thereon to the date of prepayment, and no reduction shall reduce
the Revolving Credit Aggregate Commitment to an amount which is less than the
Swing Line Maximum Amount; and (iv) no reduction shall reduce the Revolving
Credit Aggregate Commitment to an amount which is less than the aggregate
undrawn amount of any Letters of Credit outstanding at such time; provided,
however, that if the termination or reduction of the Revolving Credit Aggregate
Commitment requires the prepayment of a Eurocurrency-based Advance or a Quoted
Rate Advance and such termination or reduction is made on a day other than the
last Business Day of the then current Interest Period applicable to such
Eurocurrency-based Advance or such Quoted Rate Advance, then, pursuant to
Section 11.1, the applicable Borrower shall compensate the Lenders for any
losses. Reductions of the Revolving Credit Aggregate Commitment and any
accompanying prepayments of Advances of the Revolving Credit shall be
distributed by Agent to each Lender in accordance with such Lender's Percentage
thereof, and will not be available for reinstatement by or readvance to any
Borrower. Any reductions of the Revolving Credit Aggregate Commitment hereunder
shall reduce each Lender's portion thereof proportionately (based on the
applicable Percentages) and shall be permanent and irrevocable. Any payments
made pursuant to this Section shall be applied first to outstanding Prime-based
Advances under the Revolving Credit, next to Swing Line Advances carried at the
Prime-based Rate, next to Eurocurrency-based Advances of the Revolving Credit
and then to Swing Line Advances carried at the Quoted Rate.
2.17 Extension of Revolving Credit Maturity Date.
(a) Provided that no Default or Event of Default has occurred and is
continuing, Borrowers may, by written notice to Agent (with sufficient
copies for each Lender) (which notice shall be irrevocable and which shall
not be deemed effective unless actually received by Agent) prior to March
1 but not before February 1 of each year beginning in 2006, request that
the Lenders extend the then applicable Revolving Credit Maturity Date to a
date that is one year later than the Revolving Credit Maturity Date then
in effect (each such request, a "Request"). Each Lender shall, not later
than 30 days after such Request, give written notice to the Agent stating
whether such Lender is willing to extend the Revolving Credit Maturity
Date as requested. If Agent has received the aforesaid written approvals
of such Request from each of the Lenders, then, effective upon the date of
Agent's receipt of all such written approvals from the Lenders, as
aforesaid, the Revolving Credit Maturity Date shall be so extended for
such additional one year period, the term Revolving Credit Maturity Date
shall mean such extended date and Agent shall promptly notify the
Borrowers that such extension has occurred.
(b) If (i) any Lender gives the Agent written notice that it is
unwilling to extend the Revolving Credit Maturity Date as requested or
(ii) any Lender fails to provide written approval to Agent of such a
Request on or before 30 days after the applicable Request, then (w) the
Lenders shall be deemed to have declined to extend the Revolving Credit
Maturity Date, (x) the then-current Revolving Credit Maturity Date shall
remain in effect (with no further right on the
38
part of Borrowers to request extensions thereof under this Section 2.17),
and (y) the commitments of the Lenders to make Advances of the Revolving
Credit hereunder shall terminate on the Revolving Credit Maturity Date
then in effect, and Agent shall promptly notify Borrowers thereof.
2.18 Application of Advances. Advances of the Revolving Credit (including
Swing Line Advances) shall be available, subject to the terms hereof, to fund
working capital needs, Permitted Acquisitions, or other general corporate
purposes of the Borrowers.
3. LETTERS OF CREDIT
3.1 Letters of Credit. Subject to the terms and conditions of this
Agreement, Issuing Lender shall through the Issuing Office, at any time and from
time to time from and after the date hereof until thirty (30) days prior to the
Revolving Credit Maturity Date, upon the written request of an Account
Party(ies) accompanied by a duly executed Letter of Credit Agreement and such
other documentation related to the requested Letter of Credit as the Issuing
Lender may require, issue Letters of Credit in Dollars for the account of such
Account Party(ies), in an aggregate amount for all Letters of Credit issued
hereunder at any one time outstanding not to exceed the Letter of Credit Maximum
Amount. Each Letter of Credit shall be in a minimum face amount of One Hundred
Thousand Dollars ($100,000) (or such lesser amount as may be agreed to by
Issuing Lender) and each Letter of Credit (including any renewal thereof) shall
expire on the earlier to occur of (x) one (1) year from the date of issuance and
(y) not later than ten (10) Business Days prior to the Revolving Credit Maturity
Date in effect on the date of issuance thereof. The submission of all
applications in respect of and the issuance of each Letter of Credit hereunder
shall be subject in all respects to the Uniform Customs and Practices for
Documentary Credits of the International Chamber of Commerce, 1993 Revisions,
ICC Publication No. 500 or, if applicable, ISP 98, and any successor
documentation thereto, as selected by the Issuing Lender. In the event of any
conflict between this Agreement and any Letter of Credit Document other than any
Letter of Credit, this Agreement shall control.
3.2 Conditions to Issuance. No Letter of Credit shall be issued at the
request and for the account of any Account Party(ies) unless, as of the date of
issuance of such Letter of Credit:
(a) in the case of any Account Party:
(i) after giving effect to the Letter of Credit requested, the
amount of all Letter of Credit Obligations does not exceed the
Letter of Credit Maximum Amount;
(ii) after giving effect to the face amount of the Letter of
Credit requested, the aggregate amount of all Letter of Credit
Obligations outstanding on such date plus the aggregate amount of
all Advances requested or outstanding on such date does not exceed
the lesser of (i) Revolving Credit Aggregate Commitment and (ii) the
Borrowing Base;
(iii) after giving effect to any Letter of Credit requested by
any Borrower, (x) the amount of all Letter of Credit Obligations
outstanding for the account of such Borrower on such date plus (y)
the amount of the principal amount of any Advances of the Revolving
Credit and of the Swing Line Credit requested or outstanding by such
Borrower on such date does not exceed the Borrower Sublimit
applicable to such Borrower; and
(iv) if the Letter of Credit requested is to be used to secure
borrowings by any Foreign Subsidiary, after giving effect to such
Letter of Credit, the amount of all Letter of
39
Credit Obligations in respect of borrowings by all Foreign
Subsidiaries shall not exceed in the case of Plastipak Brazil, the
Brazilian Maximum Amount and in the case of all other Foreign
Subsidiaries, the Other Foreign Subsidiaries Maximum Amount;
(b) the obligations of the Loan Parties set forth in this Agreement
and the other Loan Documents are valid, binding and enforceable
obligations of the Loan Parties and the valid, binding and enforceable
nature of this Agreement and the other Loan Documents has not been
disputed by any of the Loan Parties;
(c) the representations and warranties contained in this Agreement
and the other Loan Documents are true in all material respects as if made
on such date, and both immediately before and immediately after issuance
of the Letter of Credit requested, no Default or Event of Default exists;
(d) the execution of the Letter of Credit Agreement with respect to
the Letter of Credit requested will not violate the terms and conditions
of any contract, agreement or other borrowing of the relevant Account
Party;
(e) the Account Party requesting the Letter of Credit shall have
delivered to Issuing Lender at its Issuing Office, not less than three (3)
Business Days prior to the requested date for issuance (or such shorter
time as the Issuing Lender, in its sole discretion, may permit), the
Letter of Credit Agreement related thereto, together with such other
documents and materials as may be required pursuant to the terms thereof,
and the terms of the proposed Letter of Credit shall be satisfactory to
Issuing Lender;
(f) no order, judgment or decree of any Governmental Authority shall
purport by its terms to enjoin or restrain Issuing Lender from issuing the
Letter of Credit requested, or any Lender from taking an assignment of its
Percentage thereof pursuant to Section 3.6 hereof, and no law, rule,
regulation, request or directive of any Governmental Authority (whether or
not having the force of law) shall prohibit or request that Issuing Lender
refrain from issuing, or any Lender refrain from taking an assignment of
its Percentage of, the Letter of Credit requested or letters of credit
generally;
(g) there shall have been no introduction of or change in the
interpretation of any law or regulation that would make it unlawful or
unduly burdensome for the Issuing Lender to issue or any Lender to take an
assignment of its Percentage of the requested Letter of Credit, no
suspension of or material limitation on trading on the New York Stock
Exchange or any other national securities exchange, no declaration of a
general banking moratorium by banking authorities in the United States,
Michigan or the respective jurisdictions in which the Lenders, the
applicable Account Party and the beneficiary of the requested Letter of
Credit are located, and no establishment of any new restrictions on
transactions involving letters of credit or on banks materially affecting
the extension of credit by banks; and
(h) Issuing Lender shall have received the issuance fees required in
connection with the issuance of such Letter of Credit pursuant to Section
3.4 hereof.
Each Letter of Credit Agreement submitted to Issuing Lender pursuant
hereto shall constitute the certification by the Borrowers and the Account Party
of the matters set forth in Section 3.2 (a) through (d) hereof. The Agent shall
be entitled to rely on such certification without any duty of inquiry.
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3.3 Notice. The Issuing Lender will deliver to the Agent, concurrently or
promptly following its delivery of any Letter of Credit, a true and complete
copy of each Letter of Credit. Promptly upon its receipt thereof, Agent shall
give notice, substantially in the form attached as Exhibit E, to each Lender of
the issuance of each Letter of Credit, specifying the amount thereof and the
amount of such Lender's Percentage thereof.
3.4 Letter of Credit Fees. Borrowers (and the Subsidiaries which are
Account Parties with respect to Letters of Credit issued for such Subsidiaries'
respective accounts) shall pay to the Agent for distribution to the Lenders in
accordance with their Percentages, letter of credit fees as follows:
(a) A per annum letter of credit fee with respect to the undrawn
amount of each Letter of Credit issued pursuant hereto in the amount of
the Applicable Fee Percentage (determined with reference to Schedule 1.1
to this Agreement).
(b) A letter of credit facing fee in the amount equal to the greater
of (i) $250 and (ii) one-eighth of one percent per annum on the undrawn
amount of each Standby Letter of Credit to be retained by Issuing Lender
for its own account.
(c) If any change in any law or regulation or in the interpretation
thereof by any Governmental Authority charged with the administration
thereof shall either (i) impose, modify or cause to be deemed applicable
any reserve, special deposit, limitation or similar requirement against
letters of credit issued or participated in by, or assets held by, or
deposits in or for the account of, Issuing Lender or any Lender or (ii)
impose on Issuing Lender or any Lender any other condition regarding this
Agreement, the Letters of Credit or any participations in such Letters of
Credit, and the result of any event referred to in clause (i) or (ii)
above shall be to increase the cost or expense to Issuing Lender or such
Lender of issuing or maintaining or participating in any of the Letters of
Credit (which increase in cost or expense shall be determined by the
Issuing Lender's or such Lender's reasonable allocation of the aggregate
of such cost increases and expenses resulting from such events), then,
upon demand by the Issuing Lender or such Lender, as the case may be, the
applicable Account Party shall, within thirty (30) days following demand
for payment, pay to Issuing Lender or such Lender, as the case may be,
from time to time as specified by the Issuing Lender or such Lender,
additional amounts which shall be sufficient to compensate the Issuing
Lender or such Lender for such increased cost and expense, together with
interest on each such amount from ten days after the date demanded until
payment in full thereof at the Prime-based Rate. A certificate as to such
increased cost or expense incurred by the Issuing Lender or such Lender,
as the case may be, as a result of any event mentioned in clause (i) or
(ii) above, submitted to the applicable Account Party, shall be conclusive
evidence, absent manifest error, as to the amount thereof.
(d) All payments by the Borrowers to the Agent for distribution to
the Issuing Lender or the Lenders under this Section 3.4 shall be made in
immediately available funds at the Issuing Office or such other office of
the Agent as may be designated from time to time by written notice to the
Borrowers by the Agent. The fees described in clause (a) and (b) above
shall be nonrefundable under all circumstances, shall be payable annually
in advance (or such lesser period, if applicable, for Letters of Credit
issued with stated expiration dates of less than one year) upon the
issuance of each such Letter of Credit, and shall be calculated on the
basis of a 360 day year and assessed for the actual number of days from
the date of the issuance thereof to the stated expiration thereof.
3.5 Other Fees. In connection with the Letters of Credit, and in addition
to the Letter of Credit Fees, the Borrowers and the applicable Account
Party(ies) shall pay, for the sole account of the
41
Issuing Lender, standard documentation, administration, payment and cancellation
charges assessed by Issuing Lender or the Issuing Office, at the times, in the
amounts and on the terms set forth or to be set forth from time to time in the
standard fee schedule of the Issuing Office in effect from time to time and
delivered to the relevant Account Party(ies).
3.6 Draws and Demands for Payment Under Letters of Credit.
(a) Borrowers and each applicable Account Party agree to pay to the
Agent for the account of the Issuing Lender, on the day on which the
Issuing Lender shall honor a draft or other demand for payment presented
or made under any Letter of Credit, an amount equal to the amount paid by
the Issuing Lender in respect of such draft or other demand under such
Letter of Credit and all reasonable expenses paid or incurred by the
Issuing Lender relative thereto. Unless Borrowers or the applicable
Account Party shall have made such payment to the Agent for the account of
the Issuing Lender on such day, upon each such payment by the Issuing
Lender, the Agent shall be deemed to have disbursed to Borrowers or the
applicable Account Party, and Borrowers or the applicable Account Party
shall be deemed to have elected to substitute for its Reimbursement
Obligation, a Prime-based Advance of the Revolving Credit from the Lenders
in an amount equal to the amount so paid by the Issuing Lender in respect
of such draft or other demand under such Letter of Credit. Such Advance
shall be disbursed notwithstanding any failure to satisfy any conditions
for disbursement of any Advance set forth in Article 2 hereof, and, to the
extent of the Advance so disbursed, the Reimbursement Obligation of
Borrowers or the applicable Account Party to the Agent under this Section
3.6 shall (unless, taking into account any such deemed Advances, the
amount of the aggregate outstanding principal amount of Advances of the
Revolving Credit and the Swing Line on such date exceed the then
applicable Revolving Credit Aggregate Commitment minus the Letter of
Credit Maximum Amount) be deemed satisfied.
(b) If the Issuing Lender shall honor a draft or other demand for
payment presented or made under any Letter of Credit, the Issuing Lender
shall provide notice thereof to Borrowers and the applicable Account Party
on the date such draft or demand is honored, and, to each Lender on such
date unless Borrowers or the applicable Account Party shall have satisfied
its Reimbursement Obligation under Section 3.6(a) hereof by payment to the
Agent on such date. The Issuing Lender shall further use reasonable
efforts to provide notice to Borrowers or the applicable Account Party
prior to honoring any such draft or other demand for payment, but such
notice, or the failure to provide such notice, shall not affect the rights
or obligations of the Issuing Lender with respect to any Letter of Credit
or the rights and obligations of the parties hereto, including without
limitation the obligations of Borrowers or the applicable Account Party
under Section 3.6(a) hereof.
(c) Upon issuance by the Issuing Lender of each Letter of Credit
hereunder, each Lender shall automatically acquire a pro rata
participation interest in such Letter of Credit and each related Letter of
Credit Payment based on its respective Percentage. Each Lender, on the
date a draft or demand under any Letter of Credit is honored (or the next
succeeding Business Day if the notice required to be given by Agent to the
Lenders under Section 3.6(b) hereof is not given to the Lenders prior to
2:00 p.m. (Detroit time) on such date of draft or demand), shall make its
Percentage of the amount paid by the Issuing Lender, and not reimbursed by
Borrowers or the applicable Account Party on such day, in immediately
available funds at the principal office of the Agent for the account of
Issuing Lender. If and to the extent such Lender shall not have made such
pro rata portion available to the Agent, such Lender, Borrowers and the
applicable Account Party severally agree to pay to the Issuing Lender
forthwith on demand such amount together with interest thereon, for each
day from the date such amount was paid by the
42
Issuing Lender until such amount is so made available to the Agent at a
per annum rate equal to the interest rate applicable during such period to
the related Advance deemed to have been disbursed under Section 3.6(a) in
respect of the reimbursement obligation of Holdings and the applicable
Account Party, as set forth in Section 2.4(c)(i) or 2.4(c)(ii) hereof, as
the case may be. If such Lender shall pay such amount to the Agent for the
account of Issuing Lender together with such interest, such amount so paid
shall be deemed to constitute an Advance by such Lender disbursed in
respect of the reimbursement obligation of Borrowers or the applicable
Account Party under Section 3.6(a) hereof for purposes of this Agreement,
effective as of the dates applicable under said Section 3.6(a). The
failure of any Lender to make its pro rata portion of any such amount paid
by the Issuing Lender available to the Agent for the account of Issuing
Lender shall not relieve any other Lender of its obligation to make
available its pro rata portion of such amount, but no Lender shall be
responsible for failure of any other Lender to make such pro rata portion
available to the Agent for the account of Issuing Lender.
(d) Nothing in this Agreement shall be construed to require or
authorize any Lender to issue any Letter of Credit, it being recognized
that the Issuing Lender shall be the sole issuer of Letters of Credit
under this Agreement.
3.7 Obligations Irrevocable. The obligations of the Borrowers and any
Account Party to make payments to Agent for the account of Issuing Lender or the
Lenders with respect to Letter of Credit Obligations under Section 3.6 hereof,
shall be unconditional and irrevocable and not subject to any qualification or
exception whatsoever, including, without limitation:
(a) Any lack of validity or enforceability of any Letter of Credit
or any documentation relating to any Letter of Credit or to any
transaction related in any way to any Letter of Credit (the "Letter of
Credit Documents");
(b) Any amendment, modification, waiver, consent, or any
substitution, exchange or release of or failure to perfect any interest in
collateral or security, with respect to or under any of the Letter of
Credit Documents;
(c) The existence of any claim, setoff, defense or other right which
the Borrowers or any Account Party may have at any time against any
beneficiary or any transferee of any Letter of Credit (or any persons or
entities for whom any such beneficiary or any such transferee may be
acting), the Agent, the Issuing Lender or any Lender or any other person
or entity, whether in connection with any of the Letter of Credit
Documents, the transactions contemplated herein or therein or any
unrelated transactions;
(d) Any draft or other statement or document presented under any
Letter of Credit proving to be forged, fraudulent, invalid or insufficient
in any respect or any statement therein being untrue or inaccurate in any
respect;
(e) Payment by the Issuing Lender to the beneficiary under any
Letter of Credit against presentation of documents which do not comply
with the terms of such Letter of Credit, including failure of any
documents to bear any reference or adequate reference to such Letter of
Credit;
(f) Any failure, omission, delay or lack on the part of the Agent,
Issuing Lender or any Lender or any party to any of the Letter of Credit
Documents to enforce, assert or exercise any right, power or remedy
conferred upon the Agent, Issuing Lender, any Lender or any such party
under this Agreement, any of the other Loan Documents or any of the Letter
of Credit
43
Documents, or any other acts or omissions on the part of the Agent,
Issuing Lender, any Lender or any such party; or
(g) Any other event or circumstance that would, in the absence of
this Section 3.7, result in the release or discharge by operation of law
or otherwise of the Borrowers or any Account Party from the performance or
observance of any obligation, covenant or agreement contained in Section
3.6 hereof.
No setoff, counterclaim, reduction or diminution of any obligation or any
defense of any kind or nature which the Borrowers or any Account Party has or
may have against the beneficiary of any Letter of Credit shall be available
hereunder to the Borrowers or any Account Party against the Agent, Issuing
Lender or any Lender. Nothing contained in this Section 3.7 shall be deemed to
prevent the Borrowers or the Account Parties, after satisfaction in full of the
absolute and unconditional obligations of the Borrowers and the Account Parties
hereunder, from asserting in a separate action any claim, defense, set off or
other right which they (or any of them) may have against Agent, Issuing Lender
or any Lender.
3.8 Risk Under Letters of Credit.
(a) In the administration and handling of Letters of Credit and any
security therefor, or any documents or instruments given in connection
therewith, Issuing Lender shall have the sole right to take or refrain
from taking any and all actions under or upon the Letters of Credit.
(b) Subject to other terms and conditions of this Agreement, Issuing
Lender shall issue the Letters of Credit and shall hold the documents
related thereto in its own name and shall make all collections thereunder
and otherwise administer the Letters of Credit in accordance with Issuing
Lender's regularly established practices and procedures and will have no
further obligation with respect thereto. In the administration of Letters
of Credit, Issuing Lender shall not be liable for any action taken or
omitted on the advice of counsel, accountants, appraisers or other experts
selected by Issuing Lender with due care and Issuing Lender may rely upon
any notice, communication, certificate or other statement from the
Borrowers, any Account Party, beneficiaries of Letters of Credit, or any
other Person which Issuing Lender believes to be authentic. Issuing Lender
will, upon request, furnish the Lenders with copies of Letter of Credit
Documents related thereto.
(c) In connection with the issuance and administration of Letters of
Credit and the assignments hereunder, Issuing Lender makes no
representation and shall have no responsibility with respect to (i) the
obligations of the Borrowers or any Account Party or the validity,
sufficiency or enforceability of any document or instrument given in
connection therewith, or the taking of any action with respect to same,
(ii) the financial condition of, any representations made by, or any act
or omission of, the Borrowers, the applicable Account Party or any other
Person, or (iii) any failure or delay in exercising any rights or powers
possessed by Issuing Lender in its capacity as issuer of Letters of Credit
in the absence of its gross negligence or willful misconduct. Each of the
Lenders expressly acknowledges that it has made and will continue to make
its own evaluations of the Borrowers' and the Account Parties'
creditworthiness without reliance on any representation of Issuing Lender
or Issuing Lender's officers, agents and employees.
(d) If at any time Issuing Lender shall recover any part of any
unreimbursed amount for any draw or other demand for payment under a
Letter of Credit, or any interest thereon, Agent or Issuing Lender, as the
case may be, shall receive same for the pro rata benefit of the Lenders in
accordance with their respective Percentages and shall promptly deliver to
each Lender its share thereof, less such Lender's pro rata share of the
costs of such recovery, including court costs and
44
attorney's fees. If at any time any Lender shall receive from any source
whatsoever any payment on any such unreimbursed amount or interest thereon
in excess of such Lender's Percentage of such payment, such Lender will
promptly pay over such excess to Agent, for redistribution in accordance
with this Agreement.
3.9 Indemnification. Each of the Borrowers and each Account Party hereby
indemnifies and agrees to hold harmless the Lenders, the Issuing Lender and the
Agent, and their respective officers, directors, employees and agents, to the
extent that such indemnification and agreement is not limited by applicable law,
from and against any and all claims, damages, losses, liabilities, costs or
expenses of any kind or nature whatsoever which the Lenders, the Issuing Lender
or the Agent or any such Person may incur or which may be claimed against any of
them by reason of or in connection with any Letter of Credit, and none of the
Issuing Lender, any Lender or the Agent or any of their respective officers,
directors, employees or agents shall be liable or responsible for:
(a) the use which may be made of any Letter of Credit or for any
acts or omissions of any beneficiary in connection therewith;
(b) the validity, sufficiency or genuineness of documents or of any
endorsement thereon, even if such documents should in fact prove to be in
any or all respects invalid, insufficient, fraudulent or forged;
(c) payment by the Issuing Lender to the beneficiary under any
Letter of Credit against presentation of documents which do not strictly
comply with the terms of any Letter of Credit (unless such payment
resulted from the gross negligence or willful misconduct of the Issuing
Lender), including failure of any documents to bear any reference or
adequate reference to such Letter of Credit;
(d) any error, omission, interruption or delay in transmission,
dispatch or delivery of any message or advice, however transmitted, in
connection with any Letter of Credit; or
(e) any other event or circumstance whatsoever arising in connection
with any Letter of Credit;
provided, however, that with respect to subparagraphs (a) through (e) hereof,
none of the Borrowers nor the Account Parties shall be required to indemnify the
Issuing Lender, the other Lenders and the Agent and such other Persons, and the
Issuing Lender shall be liable to the Borrowers and the Account Parties to the
extent, but only to the extent, of any direct, as opposed to consequential or
incidental, damages suffered by any of the Borrowers and the Account Parties
which were caused by the Issuing Lender's gross negligence, willful misconduct
or wrongful honor or dishonor of any Letter of Credit after the presentation to
it by the beneficiary thereunder of a draft or other demand for payment and
other documentation strictly complying with the terms and conditions of such
Letter of Credit.
(f) It is understood that in making any payment under a Letter of
Credit the Issuing Lender will rely on documents presented to it under
such Letter of Credit as to any and all matters set forth therein without
further investigation and regardless of any notice or information to the
contrary. It is further acknowledged and agreed that Borrowers or an
Account Party may have rights against the beneficiary or others in
connection with any Letter of Credit with respect to which the Lenders are
alleged to be liable and it shall be a condition of the assertion of any
liability of the Lenders under this Section that the applicable Borrowers
or applicable Account Party shall contemporaneously pursue all remedies in
respect of the alleged loss against such beneficiary and any other parties
obligated or liable in connection with such Letter of Credit and
45
any related transactions; provided however that, to the extent that the
Issuing Lender or the Lenders are finally adjudicated to have been grossly
negligent or to have acted with willful misconduct, then the Issuing
Lender or the Lenders, as the case may be, shall reimburse the Borrowers
or such Account Party for the reasonable costs and expenses of pursuing
such remedies.
3.10 Right of Reimbursement. Each Lender agrees to reimburse the Issuing
Lender on demand, pro rata in accordance with its respective Percentage, for (i)
the reasonable out-of-pocket costs and expenses of the Issuing Lender to be
reimbursed by the Borrowers or any Account Party pursuant to any Letter of
Credit Agreement or any Letter of Credit, to the extent not reimbursed by the
Borrowers or any Account Party and (ii) any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, fees, reasonable
out-of-pocket expenses or disbursements of any kind and nature whatsoever which
may be imposed on, incurred by or asserted against Issuing Lender in any way
relating to or arising out of this Agreement, any Letter of Credit, any
documentation or any transaction relating thereto, or any Letter of Credit
Agreement, to the extent not reimbursed by the Borrowers or any Account Party,
except to the extent that such liabilities, losses, costs or expenses were
incurred by Issuing Lender as a result of Issuing Lender's gross negligence or
willful misconduct or by the Issuing Lender's wrongful dishonor of any Letter of
Credit after the presentation to it by the beneficiary thereunder of a draft or
other demand for payment and other documentation strictly complying with the
terms and conditions of such Letter of Credit or wrongful honor of any Letter of
Credit.
3.11 Existing Letters of Credit. The Existing Letters of Credit shall be
deemed for all purposes of this Agreement to be Letters of Credit, and each
application submitted in connection with the Existing Letters of Credit shall be
deemed for all purposes of this Agreement to be Letter of Credit Agreements. On
the Effective Date, the Issuing Lender shall be deemed automatically to have
sold and transferred, and each other Lender shall be deemed automatically,
irrevocably, and unconditionally to have purchased and received from the Issuing
Lender, without recourse or warranty, an undivided interest and participation,
to the extent of such other Lender's Percentage, in the Existing Letters of
Credit and the applicable Letter of Credit Obligations with respect thereto and
any security therefor or guaranty pertaining thereto. On the Effective Date,
Borrowers and any other applicable Account Party agree to pay to each Lender its
pro-rata share of an amount equal to Letter of Credit Fees which would have been
payable had such Existing Letters of Credit been issued on the Effective Date
(to the extent such Lender has not already received payment of the Letter of
Credit Fees in an amount equal to its pro-rata share on the Effective Date).
4. MARGIN ADJUSTMENTS
4.1 Margin Adjustments. Adjustments to the Applicable Margins and the
Applicable Fee Percentages, based on Schedule 1.1 shall be implemented on a
quarterly basis as follows:
(a) Such adjustments shall be given prospective effect only,
effective as to all Advances outstanding hereunder and the Applicable Fee
Percentage, upon the date of delivery of the Financial Statements to the
Agent under Sections 7.1(a) and 7.1(b) and the Covenant Compliance
Certificate under Section 7.2(a) hereunder, in each case establishing
applicability of the appropriate adjustment, in each case with no
retroactivity or claw-back. In the event Holdings fails timely to deliver
the Financial Statements required under Section 7.1(a) or 7.1(b) or the
Covenant Compliance Certificate under Section 7.2(a), then from the date
delivery to the Agent of such Financial Statements and certificate was
required until such Financial Statements and certificate are delivered,
the margins and fee percentages shall be at the highest level on the
Pricing Matrix attached to this Agreement as Schedule 1.1.
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(b) From the Effective Date until the receipt of Holdings' Financial
Statements for the fiscal quarter ending on or about October 31, 2004, the
margins and fee percentages shall be those set forth under the Level IV
column of the Pricing Matrix attached to this Agreement as Schedule 1.1.
5. CONDITIONS
The obligations of the Lenders to make Advances or loans pursuant to this
Agreement and the obligation of the Issuing Lender to issue Letters of Credit
are subject to the following conditions:
5.1 Execution of Notes and this Agreement. Each of the Loan Parties shall
have executed and delivered to Agent for the account of each Lender requesting
Notes, the Revolving Credit Notes, the Swing Line Notes, this Agreement and the
other Loan Documents to which they are a party (including all schedules,
exhibits, certificates, opinions, financial statements and other documents to be
delivered pursuant hereto), and such Notes, and this Agreement and the other
Loan Documents shall be in full force and effect.
5.2 Corporate Authority. Agent shall have received, with a counterpart
thereof for each Lender:
(a) For each Domestic Loan Party, a certificate of its Secretary or
Assistant Secretary as to:
(i) resolutions of the board of directors of such Domestic
Loan Party evidencing approval of the transactions contemplated by
this Agreement (and authorizing the execution and delivery hereof
and the borrowing of Advances hereunder, in the case of each
Borrower and in the case of each Borrower and each Account Party,
the requesting of Letters of Credit hereunder);
(ii) the incumbency and signature of the officers of such
Domestic Loan Party executing any Loan Document;
(iii) a certificate of good standing or continued existence
(or the equivalent thereof) from the state of its incorporation, and
from every state or other jurisdiction listed on Schedule 5.2 hereof
if issued by such jurisdiction, subject to the limitations (as to
qualification and authorization to do business) contained in Section
6.1; and
(iv) copies of such Domestic Loan Party's articles of
incorporation and bylaws or other constitutional documents, as in
effect on the Effective Date;
5.3 Collateral Documents. (a) As security for all Indebtedness, the Agent
shall have received the following documents:
(i) a Reaffirmation of the Guaranty by each Person party
thereto; and
(ii) an Amended and Restated Security Agreement.
(b) Any documents (including, without limitation, financing
statements, amendments to financing statements, and stock powers) required
to be filed in connection with the Collateral Documents to create, in
favor of the Agent (for and on behalf of Agent and the Lenders), a
perfected security interest in the Collateral thereunder shall have been
delivered to the Agent in a
47
proper form for filing in each office in each jurisdiction listed in
Schedule 5.3(b), or other office, as the case may be.
5.4 Insurance. The Agent shall have received evidence satisfactory to it
that the Loan Parties have obtained the insurance policies required by Section
7.5 hereof and that such insurance policies are in full force and effect.
5.5 Compliance with Certain Documents and Agreements. The Loan Parties
(and any of their respective Subsidiaries or Affiliates) shall have each
performed and complied in all material respects with all agreements and
conditions contained in this Agreement, other Loan Documents, or any agreement
or other document executed thereunder and required to be performed or complied
with by each of them (as of the applicable date) and none of such parties shall
be in material default in the performance or compliance with any of the terms or
provisions hereof or thereof.
5.6 Opinion of Counsel. The Loan Parties shall furnish Agent prior to the
initial Advance under this Agreement, and with signed copies for each Lender,
opinions of counsel to the Loan Parties (including opinions of local counsel to
the Loan Parties), dated the Effective Date and covering such matters as
reasonably required by and otherwise reasonably satisfactory in form and
substance to the Agent and each of the Lenders.
5.7 Borrowers' Certificate. The Agent shall have received a certificate of
Responsible Officers of the Credit Parties dated the Effective Date, stating
that to the best of his or her knowledge after due inquiry, (a) the conditions
set forth in this Section 5 have been satisfied, (b) the representations and
warranties made by Loan Parties or any other party to any of the Loan Documents
(excluding the Agent and Lenders) in this Agreement or any of the other Loan
Documents, shall have been true and correct in all material respects when made
and shall be true and correct in all material respects on and as of the
Effective Date; and (c) no Default or Event of Default shall have occurred and
be continuing.
5.8 Payment of Fees. Borrowers shall have paid to the Agent all fees,
costs and expenses required to be paid to Agent upon execution of this Agreement
under the terms of this Agreement and under the terms of the Fee Letter and any
Account Party shall have paid to Comerica Bank all interest and fees required to
be paid under the Prior Credit Agreement.
5.9 Continuing Conditions. The obligations of the Lenders to make Advances
(including the initial Advance) under this Agreement and the obligation of the
Issuing Lender to issue any Letters of Credit shall be subject to the continuing
conditions that:
(a) No Default or Event of Default shall exist as of the date of the
Advance or the request for the Letter of Credit; and
(b) Each of the representations and warranties contained in this
Agreement and in each of the other Loan Documents shall be true and
correct in all material respects as of the date of the Advance or Letter
of Credit.
5.10 Foreign Subsidiaries. The obligations of the Issuing Lender to issue
Letters of Credit for the account of any Foreign Subsidiary shall be subject to
the further conditions that:
(a) Pledge Agreements, granting a valid pledge of (i) 65% of the
Equity Interests of such Foreign Subsidiary to secure the Domestic
Indebtedness, if the direct parent of such Foreign Subsidiary is either a
Credit Party or a Domestic Subsidiary and (ii) 100% of its Equity
Interests to secure the Foreign Indebtedness shall have been executed,
delivered and effective;
48
(b) such Foreign Subsidiary shall have executed and delivered or
joined into the Foreign Guaranty;
(c) such Foreign Subsidiary shall have executed and delivered an
Equipment Pledge Agreement which grants a valid, enforceable and perfected
(if applicable) Lien over its Equipment to the Agent for the benefit of
the Lenders to secure the Foreign Indebtedness and any of its obligations
under the Foreign Guaranty;
(d) the Agent shall have received authority documents for such
Foreign Subsidiary similar to those described in Section 5.2;
(e) the Agent shall have received an opinion of counsel to such
Foreign Subsidiary in form and substance satisfactory to the Agent and
evidence that all Requirements of Law have been satisfied in connection
with the Loan Documents required under this Section 5.10;
(f) the Agent shall have received evidence satisfactory to it that
it has a valid and perfected first priority Lien on the Equity Interests
and Equipment pledged as required hereby; and
(g) all Loan Documents executed pursuant to this Section 5.10 shall
be, in form and substance, satisfactory to Agent in its sole discretion.
Notwithstanding the other requirements of this Section 5.10, if the local
law of the jurisdiction of formation of a Foreign Subsidiary or of the
jurisdiction where its Equipment is located prohibits, otherwise prevents or
renders commercially unreasonable (in the sole determination of the Agent) the
execution and delivery by such Foreign Subsidiary of a valid and enforceable
Foreign Guaranty (or joinder thereto), or of a valid and enforceable Pledge
Agreement or Equipment Pledge Agreement (and the creation of enforceable Liens
for the benefit of the Agent thereunder), Agent may, in its sole discretion,
waive delivery of such documentation and deem the requirements of this Section
5.10 otherwise satisfied. Agent will provide notice to Lenders of its formal
waiver of items required pursuant to this Section 5.10.
6. REPRESENTATIONS AND WARRANTIES
Each Credit Party represents and warrants with respect to itself and its
Subsidiaries and with respect to all other Loan Parties, and such
representations and warranties shall survive until the Revolving Credit Maturity
Date and thereafter until the expiration of all Letters of Credit and the final
payment in full of the Indebtedness and the performance by each Credit Party and
its Subsidiaries of all other obligations under this Agreement and the other
Loan Documents:
6.1 Corporate Authority. Each Credit Party is a corporation (or other
business entity) duly organized and existing in good standing under the laws of
the state or jurisdiction of its incorporation or formation, each Subsidiary of
a Credit Party is a corporation or other business entity duly organized and
existing in good standing under the laws of the jurisdiction of its
incorporation or formation; and each Credit Party and each Subsidiary is duly
qualified and authorized to do business as a foreign corporation in each
jurisdiction where the character of its assets or the nature of its activities
makes such qualification necessary and where failure to be so qualified would
have a Material Adverse Effect.
6.2 Due Authorization - Credit Parties. Execution, delivery and
performance of this Agreement, the other Loan Documents to which any Credit
Party is a party and any other documents and instruments required under or in
connection with this Agreement or the other Loan Documents (or to be
49
so executed and delivered), and the issuance of the Notes by Borrowers (if
requested) are within each Credit Party's corporate powers, have been duly
authorized, are not in contravention of law or the terms of any Credit Party's
organizational documents and, except as have been previously obtained or as
referred to in Section 6.13, below, do not require the consent or approval,
material to the transactions contemplated by this Agreement and the other Loan
Documents, of any Governmental Authority.
6.3 Due Authorization - Subsidiaries. Execution, delivery and performance
of the Guaranty, the Foreign Guaranty, and the other Loan Documents to which any
Subsidiary is a party, and all other documents and instruments required of any
Subsidiary of a Credit Party under or in connection with this Agreement and the
other Loan Documents (or to be so executed and delivered), are within the
corporate powers of each such Subsidiary of a Credit Party, have been duly
authorized, are not in contravention of law or the terms of any Subsidiary of a
Credit Party's organizational documents, and, except as have been previously
obtained (or as referred to in Section 6.13 below), do not require the consent
or approval, material to the transactions contemplated by this Agreement and the
other Loan Documents, of any Governmental Authority not previously obtained.
6.4 Liens. There are no Liens on and no financing statements on file with
respect to any of the property owned, pledged, mortgaged or otherwise encumbered
(or to be encumbered) by any of the Loan Parties or any of their respective
Subsidiaries except for Liens permitted pursuant to Section 8.2.
6.5 Taxes. Each of the Loan Parties, and each of their respective
Subsidiaries, has filed on or before their respective due dates or within the
applicable grace periods, all federal, state and foreign tax returns which are
required to be filed or has obtained extensions for filing such tax returns and
is not delinquent in filing such returns in accordance with such extensions and
has paid all taxes which have become due pursuant to those returns or pursuant
to any assessments received by any such party, as the case may be, to the extent
such taxes have become due, except to the extent such tax payments are being
actively contested in good faith by appropriate proceedings and with respect to
which adequate provision has been made on the books of the applicable Loan Party
or such other Subsidiary as may be required by GAAP.
6.6 No Defaults. There exists no default under the provisions of any
instrument evidencing any indebtedness for borrowed money of any Loan Party or
any of their respective Subsidiaries which is permitted hereunder or of any
agreement relating thereto.
6.7 Enforceability of Agreement and Loan Documents -- Credit Parties. This
Agreement, each of the other Loan Documents to which any Credit Party is a
party, and all other certificates, agreements and documents executed and
delivered by any Credit Party under or in connection herewith or therewith have
each been duly executed and delivered by their respective duly authorized
officers and constitute the valid and binding obligations of each Credit Party,
enforceable in accordance with their respective terms, except as enforcement
thereof may be limited by applicable bankruptcy, reorganization, insolvency,
fraudulent conveyance, moratorium or similar laws affecting the enforcement of
creditor's rights, generally and by general principles of equity (regardless of
whether enforcement is considered in a proceeding in law or equity).
6.8 Enforceability of Loan Documents -- Subsidiaries. The Loan Documents
to which any Subsidiary of a Credit Party is a party, and all certificates,
documents and agreements executed in connection therewith by any Subsidiary of a
Credit Party, have each been duly executed and delivered by the duly authorized
officers or members or managers, as the case may be, of such Subsidiary of a
Credit Party and constitute the valid and binding obligations of such Subsidiary
of a Credit Party, enforceable in accordance with their respective terms, except
as enforcement thereof may be limited by applicable bankruptcy, reorganization,
insolvency, fraudulent conveyance, moratorium or similar laws affecting the
50
enforcement of creditor's rights, generally and by general principles of equity
(regardless of whether enforcement is considered in a proceeding in law or
equity).
6.9 Compliance with Laws. (a)(i) Except as disclosed on Schedule 6.9(a),
each of the Loan Parties, and each of their respective Subsidiaries, has
complied with all Requirements of Law of any Governmental Authority having
jurisdiction over it or its businesses except to the extent that failure to
comply therewith would not have a Material Adverse Effect; and (ii) except for
such matters as are not likely to have a Material Adverse Effect, and except as
set forth in Schedule 6.9(a) hereof, and without limiting the generality of
Section 6.12, there is no pending or, to the actual knowledge of any Loan Party
threatened, litigation, action, proceeding or controversy affecting any Loan
Parties or any of their respective Subsidiaries, and no pending or, to the
actual knowledge of any Loan Party threatened complaint, notice or inquiry to
any of the Loan Parties or any of the other Subsidiaries, regarding potential
liability of any of the Loan Parties or any of the Subsidiaries, (b) neither the
extension of credit made pursuant to this Agreement or the use of the proceeds
thereof will violate the Trading with the Enemy Act, as amended, or any of the
foreign assets control regulations of the United States Treasury Department (31
CFR, Subtitle B, Chapter V, as amended) or any enabling legislation or executive
order relating thereto, or The United and Strengthening America by providing
appropriate Tools Required to Intercept and Obstruct Terrorism (USA Patriot Act)
Act of 2001, Public Law 10756, October 26, 2001 (the "Patriot Act") or Executive
Order 13224 of September 23, 2001 issued by the President of the United States
(66 Fed. Reg. 49049 (2001)); and (c) as of the date hereof, the Credit Parties
and their respective Subsidiaries have the federal tax identification numbers
set forth on Schedule 6.9(c) attached hereto.
6.10 Non-contravention -- Credit Parties. The execution, delivery and
performance of this Agreement and the other Loan Documents and any other
documents and instruments required under or in connection with this Agreement by
each Credit Party are not in contravention of the terms of any indenture,
agreement or undertaking to which any Credit Party or any of its Subsidiaries is
a party or by which its or their properties are bound or affected where such
violation would reasonably be expected to have a Material Adverse Effect.
6.11 Non-contravention -- Subsidiaries. The execution, delivery and
performance of those Loan Documents signed by a Subsidiary of any Credit Party
and any other documents and instruments required under or in connection with
this Agreement or any other Loan Document by any Subsidiary of a Credit Party
are not in contravention of the terms of any indenture, agreement or undertaking
to which a Subsidiary of a Credit Party is a party or by which it or its
properties are bound or affected where such violation would reasonably be
expected to have a Material Adverse Effect.
6.12 No Litigation. Except for De Minimis Matters or as set forth on
Schedule 6.12 hereof, there is no suit, action, proceeding, including, without
limitation, any bankruptcy proceeding or governmental investigation, pending
against or to the actual knowledge of the Credit Parties threatened against any
Loan Party or any of their respective Subsidiaries (other than any suit, action
or proceeding in which such Loan Party or such Subsidiary is the plaintiff and
in which no counterclaim or cross-claim against such Loan Party or such
Subsidiary has been filed), nor has any Loan Party or any of their respective
Subsidiaries or, to the actual knowledge of the Credit Parties any of its or
their officers, members, managers, or directors, as the case may be, been
subject to any suit, action, proceeding or governmental investigation as a
result of which any such officer, member, manager or director is or may be
entitled to indemnification by any Loan Party or any of their respective
Subsidiaries, as applicable, which suits, actions, proceedings or governmental
investigations are reasonably likely to be resolved adversely to such Loan Party
or such Subsidiary, and if so resolved are reasonably likely to have a Material
Adverse Effect. Except as set forth on Schedule 6.12, there is not outstanding
against any Loan Party or any Subsidiary any judgment, decree, injunction, rule,
or order of any court, government,
51
department, commission, agency, instrumentality or arbitrator nor is any Loan
Party or, to their actual knowledge, any other Subsidiary in violation of any
applicable law, regulation, ordinance, order, injunction, decree or requirement
of any governmental body or court where such matters would reasonably be
expected to have a Material Adverse Effect.
6.13 Consents, Approvals and Filings, Etc. Except as have been previously
obtained, no authorization, consent, approval, license, qualification or formal
exemption from, nor any filing, declaration or registration with, any
Governmental Authority or any other Person (whether or not governmental), is
required in connection with the execution, delivery and performance: (i) by any
Loan Party, of this Agreement, any of the other Loan Documents to which they are
a party, or any other documents or instruments to be executed and or delivered
by such Loan Parties in connection therewith or herewith; or (ii) by any Loan
Party, of the Liens, pledges, mortgages, security interests or other
encumbrances granted, conveyed or otherwise established (or to be granted,
conveyed or otherwise established) by or under this Agreement or the other Loan
Documents, except for such filings to be made concurrently herewith as are
required by the Collateral Documents to perfect Liens in favor of the Agent. All
such authorizations, consents, approvals, licenses, qualifications, exemptions,
filings, declarations and registrations which have previously been obtained or
made, as the case may be, are in full force and effect and are not the subject
of any attack, or to the actual knowledge of the Credit Parties threatened
attack (in any material respect) by appeal or direct proceeding or otherwise.
6.14 Agreements Affecting Financial Condition. None of the Loan Parties or
any of their respective Subsidiaries is party to any agreement or instrument or
subject to any charter or other corporate restriction which has a Material
Adverse Effect.
6.15 No Investment Company or Margin Stock. None of the Loan Parties or
any of their respective Subsidiaries is an "investment company" within the
meaning of the Investment Company Act of 1940, as amended. None of the Loan
Parties or any of their respective Subsidiaries is engaged principally, or as
one of its important activities, directly or indirectly, in the business of
extending credit for the purpose of purchasing or carrying margin stock. None of
the proceeds of any of the Advances will be used by any Loan Party or any of
their respective Subsidiaries to purchase or carry margin stock or will be made
available by any Loan Party or any of their respective Subsidiaries in any
manner to any other Person to enable or assist such Person in purchasing or
carrying margin stock. Terms for which meanings are provided in Regulation U of
the Board of Governors of the Federal Reserve System or any regulations
substituted therefor, as from time to time in effect, are used in this paragraph
with such meanings.
6.16 ERISA. None of the Loan Parties or any of their respective
Subsidiaries maintains or contributes to any Pension Plan subject to Title IV of
ERISA, except as set forth on Schedule 6.16 hereto; and there is no accumulated
funding deficiency within the meaning of ERISA, or any existing liability with
respect to any of the Pension Plans owed to the Pension Benefit Guaranty
Corporation or any successor thereto, and no "reportable event" or "prohibited
transaction", as defined in ERISA, has occurred with respect to any Pension
Plan, and all such Pension Plans are in material compliance with the
requirements of the Internal Revenue Code and ERISA.
6.17 Conditions Affecting Business or Properties. Neither the respective
businesses nor the properties of any Loan Party or any of their respective
Subsidiaries is affected by any fire, explosion, accident, strike, lockout or
other dispute (which in the case of any labor dispute is not merely threatened),
drought, storm, hail, earthquake, embargo, Act of God or other casualty (not
covered by insurance) which is reasonably likely to have a Material Adverse
Effect, or if such event or condition were to continue for more than thirty (30)
additional days would reasonably be expected to have a Material Adverse Effect.
52
6.18 Environmental and Safety Matters. Except as set forth in Schedules
6.18 and 6.12 and except for such matters as are not likely to have a Material
Adverse Effect:
(a) to the Credit Parties' actual knowledge, all facilities and
property owned or leased by the Loan Parties or any of their respective
Subsidiaries, are owned or leased by the Loan Parties and such
Subsidiaries in material compliance with all Hazardous Material Laws;
(b) to the actual knowledge of the Credit Parties, there have been
no past, and there are no pending or threatened
(i) claims, complaints, notices or requests for information
received by any Loan Party or any of their respective Subsidiaries
with respect to any alleged violation of any Hazardous Material Law,
or
(ii) complaints, notices or inquiries to any Loan Party or any
of their respective Subsidiaries regarding potential liability under
any Hazardous Material Law; and
(c) to the actual knowledge of the Credit Parties, no conditions
exist at, on or under any property now or previously owned or leased by
the Loan Parties or any of their respective Subsidiaries which, with the
passage of time, or the giving of notice or both, would give rise to
liability under any Hazardous Material Law.
6.19 Subsidiaries. As of the Effective Date, and except as disclosed on
Schedule 6.19 hereto, Holdings has no Subsidiaries.
6.20 Accuracy of Information.
(a) Each of the financial statements of Holdings and its
Subsidiaries furnished to Agent and the Lenders prior to the date of this
Agreement fairly presents (subject to year-end adjustments in the case of
interim statements) the financial condition of Holdings and its
Subsidiaries and the results of their operations for the periods covered
thereby, and has been prepared in accordance with GAAP. The projections
and pro forma financial information contained in the materials referenced
in this clause (a) are based upon good faith estimates and assumptions
believed by management of Holdings to be reasonable at the time made, it
being recognized by the Lenders that such financial information as it
relates to future events is not to be viewed as fact and that actual
results during the period or periods covered by such financial information
may differ from the projected results set forth therein.
(b) Since Holdings 2003 Fiscal Year end, there has been no material
adverse change in the financial condition of Holdings and its Subsidiaries
taken as a whole, to the best knowledge of Holdings, neither Holdings nor
any of its Subsidiaries has any contingent obligations (including any
liability for taxes) not disclosed by or reserved against in the balance
sheets previously supplied to the Agent, as applicable, except as set
forth on Schedule 6.20 hereof, and at the present time there are no
unrealized or anticipated losses from any present commitment of Holdings
or any of its Subsidiaries which contingent obligations and losses in the
aggregate are likely to have a Material Adverse Effect.
6.21 Labor Relations. None of the Loan Parties or any of their respective
Subsidiaries is engaged in any unfair labor practice that could reasonably be
expected to have a Material Adverse Effect. There is (i) no unfair labor
practice complaint pending against the Loan Parties nor any of their respective
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Subsidiaries or to the knowledge of the Credit Parties, threatened against any
of them, before the National Labor Relations Board or any other labor relations
board, and no grievance or arbitration proceeding arising out of or under any
collective bargaining agreement is so pending against any of them or, to the
knowledge of the Credit Parties, threatened against any of them, (ii) no strike,
labor dispute, slowdown or stoppage pending against the Credit Parties or any
Subsidiary or to the knowledge of Credit Parties, threatened against any of them
and (iii) no union representation question existing with respect to the
employees of the Loan Parties or any of their respective Subsidiaries, in each
case or in the aggregate which could reasonably be expected to have a Material
Adverse Effect.
6.22 Solvency. After giving effect to the consummation of the transactions
contemplated by this Agreement, Holdings and each of its Subsidiaries will be
solvent, able to pay its indebtedness as it matures and will have capital
sufficient to carry on its business and all business in which it is about to
engage. This Agreement is being executed and delivered by the Credit Parties to
Agent and the Lenders in good faith and in exchange for fair, equivalent
consideration. The capital and monies remaining in the Credit Parties and their
Subsidiaries are not now and are not reasonably expected to become so
unreasonably small as to preclude the Credit Parties or their Subsidiaries from
carrying on their businesses. None of the Credit Parties or any Subsidiary
intends to nor does management of Credit Parties or any Subsidiary believe it
will incur debts beyond its ability to pay as they mature. None of the Credit
Parties or any Subsidiary contemplates filing a petition in bankruptcy or for an
arrangement or reorganization under the federal bankruptcy code of the United
States of America or any similar law of any jurisdiction now or hereafter in
effect relating to any Credit Party or any Subsidiary, nor does any Credit Party
or any Subsidiary have any knowledge of any threatened bankruptcy or insolvency
proceedings against Credit Parties or any Subsidiary.
6.23 Capitalization. The authorized Equity Interests of each Credit Party
and each Subsidiary is as set forth in Schedule 6.23. All issued and outstanding
Equity Interests of each Credit Party are duly authorized and validly issued,
fully paid, nonassessable (to the extent applicable), and free and clear of all
Liens, and such Equity Interests were issued in compliance with all applicable
state, federal and foreign laws concerning the issuance of securities. The
Equity Interests of each of the Borrowers and of each Subsidiary are owned by
the stockholders and in the amounts set forth on Schedule 6.23. No Equity
Interests of any Borrower or any Subsidiary, other than those described above,
are issued and outstanding. Except as disclosed on Schedule 6.23, there are no
preemptive or other outstanding rights, options, warrants, conversion rights or
similar agreements or understandings for the purchase or acquisition from a
Borrower or any Subsidiary, of any Equity Interests or other securities of a
Borrower or any Subsidiary.
6.24 Reserved.
6.25 Senior Unsecured Note Documents. No "Event of Default" (as defined in
the Senior Unsecured Debt Indenture) exists, and no event or circumstance exists
which, with the giving of notice, the passage of time, or both, would constitute
such an "Event of Default"; and all Indebtedness incurred or to be incurred
under this Agreement at any time is and shall be incurred in compliance with
Section 4.09 of the Senior Unsecured Debt Indenture.
7. AFFIRMATIVE COVENANTS
Each Credit Party covenants and agrees that it will, and, as applicable,
it will cause each of its Subsidiaries (except any Special Purpose Subsidiary,
unless specifically indicated below), until the later of the Revolving Credit
Maturity Date and thereafter until expiration of all Letters of Credit and final
payment in full of the Indebtedness and the performance by the Credit Parties
and the Subsidiaries of all other obligations under this Agreement and the other
Loan Documents, to:
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7.1 Financial Statements. Furnish to the Agent and caused to be furnished
to each Lender:
(a) as soon as available, but in any event ninety (90) days after
the end of each Fiscal Year of Holdings, a copy of the audited
Consolidated and Consolidating financial statements of Holdings as at the
end of such year and the related audited statements of income, accumulated
earnings, and cash flows for such year and underlying assumptions, setting
forth in each case in comparative form the figures for the previous year,
certified as being fairly stated in all material respects by a nationally
recognized certified public accounting firm reasonably satisfactory to the
Agent and the Lenders; and
(b) as soon as available, but in any event not later than forty-five
(45) days after the end of each fiscal quarter of Holdings, the unaudited
Consolidated and Consolidating financial statements of Holdings as at the
end of such fiscal quarter and the related unaudited statements income,
accumulated earnings and cash flows of Holdings for the portion of the
Fiscal Year through the end of such fiscal quarter, setting forth in each
case in comparative form the figures for the previous year, and certified
by a Responsible Officer as being fairly stated in all material respects;
all such financial statements to be complete and correct in all material
respects and to be prepared in reasonable detail and in accordance with GAAP
throughout the periods reflected therein and with prior periods provided however
that the financial statements delivered pursuant to clause (b) hereof will not
be required to include footnotes and will be subject to year-end adjustments.
7.2 Certificates; Other Information. Furnish to the Agent with sufficient
copies for each Lender:
(a) Concurrently with the financial statements delivered pursuant to
Sections 7.1(a) and (b), a Covenant Compliance Certificate substantially
in form attached hereto as Exhibit I;
(b) Within ninety (90) days of the end of each Fiscal Year of
Holdings, projections for the three following Fiscal Years, including
budgets, balance sheets and income statements;
(c) Within fifteen (15) days after and as of the end of each month,
a Borrowing Base Certificate, agings of the Accounts and accounts payable
of Holdings and all Subsidiaries, and an Inventory report in form
acceptable to the Agent;
(d) Promptly following receipt thereof (but no more than ten (10)
Business Days following receipt), copies of all management letters from
any certified public accountants;
(e) (i) At least thirty (30) days (or such shorter time period as
may be agreed to by Agent) prior to any Permitted Securitization, draft
copies of the principal transaction documents relating to such Permitted
Securitization, (ii) at least five (5) days (or such shorter time period
as may be agreed to by Agent) prior to any Permitted Securitization, final
copies of such documentation and (iii) promptly following such Permitted
Securitization, executed copies of such documentation; and
(f) Promptly and in form to be reasonably satisfactory to Majority
Lenders, such additional financial and/or other information, or other
reports as any Lender may from time to time reasonably request.
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7.3 Payment of Obligations. Pay, discharge or otherwise satisfy at or
before maturity or before they become delinquent, as the case may be, all of its
material obligations of whatever nature, except where the amount or validity
thereof is currently being contested in good faith by appropriate proceedings
and reserves in conformity with GAAP with respect thereto have been provided on
the books of the Credit Parties.
7.4 Conduct of Business and Maintenance of Existence.
(a) Continue to engage primarily in the businesses conducted on the
Effective Date, and preserve, renew and keep in full force and effect its
existence, except as otherwise permitted pursuant to Sections 8.4 and 8.5;
(b) take all reasonable action to maintain all rights, privileges
and franchises necessary or desirable in the normal conduct of its
business except as otherwise permitted pursuant to Section 8.5; and
(c) comply with all Contractual Obligations and Requirements of Law,
except to the extent that failure to comply therewith would not, in the
aggregate, reasonably be expected to have a Material Adverse Effect.
7.5 Maintenance of Property; Insurance. Keep all property useful and
necessary in its business in working order and maintain insurance coverage on
its physical assets and against other business risks in such amounts and of such
types as are customarily carried by companies similar in size and nature
(including without limitation casualty and public liability and property damage
insurance), and in the event of acquisition of additional property, real or
personal, or of incurrence of additional risks of any nature, increase such
insurance coverage in such manner and to such extent as prudent business
judgment and present practice or any applicable Requirements of Law would
dictate; and in the case of all policies covering any Collateral, all such
insurance policies shall provide that the loss payable thereunder shall be
payable to the applicable Loan Party, and to the Agent for the benefit of the
Agent and the Lenders (Agent or Agent and Lenders, as applicable, as mortgagees,
or, in the case of personal property interests, lender loss payee(s)), as their
respective interests may appear. Upon request of Agent or any Lender,
certificates evidencing such policies, including all endorsements thereto, shall
be delivered to Agent or such Lender, as the case may be.
7.6 Inspection of Property; Books and Records, Discussions; Audits. (a)
Permit Agent and each Lender, through their authorized attorneys, accountants
and representatives (i) to examine each Credit Party's and each Subsidiary's
books, accounts, records, ledgers and assets and properties of every kind and
description wherever located at all reasonable times during normal business
hours, upon oral or written request of Agent or the Majority Lenders; (ii) at
any time and from time to time, at the request of the Majority Lenders, to
conduct full or partial collateral audits (which shall not be deemed to include
real estate, machinery and equipment appraisals) of each Credit Party and its
Subsidiaries to be completed by an appraiser as may be selected by Agent, with
all reasonable costs and expenses of such audits to be reimbursed by the Credit
Parties, provided, however, that except as provided in the following provision,
prior to the occurrence and continuance of any Default or Event of Default, the
Credit Parties shall only be required to reimburse the Agent for the reasonable
costs and expenses of no more than one (1) such audit conducted in any year and
provided further however that Credit Parties shall be required to reimburse the
Agent for all reasonable costs and expenses of all audits conducted after the
occurrence and during the continuance of a Default or Event of Default; and
(iii) permit Agent and each Lender or their authorized representatives, at
reasonable times and intervals, to visit all of their respective offices,
discuss their respective financial matters with their respective officers and
independent certified public accountants, as applicable, and, by this provision,
Credit Parties authorize such accountants to discuss the
56
finances and affairs of the Credit Parties and their Subsidiaries (provided that
the Credit Parties are given an opportunity to participate in such discussions)
and examine any of its or their books and other corporate records; and
(b) Holdings and its Subsidiaries shall commence with a collateral audit
within forty-five (45) days of the Effective Date, and deliver to Agent the
results of such collateral audit (which audit shall be in form and substance
acceptable to Agent and the Majority Lenders, and which audit shall have been
performed by auditors acceptable to the Agent) within ninety (90) days of the
Effective Date and the costs of such audit shall be paid by the Credit Parties,
without affecting the Majority Lenders' rights under clause (a)(ii) of this
Section 7.6 to request an additional collateral audit during Fiscal Year 2005 at
Credit Parties' expense.
7.7 Notices. Promptly upon having actual knowledge give written notice to
the Agent of:
(a) the occurrence of any Default or Event of Default of which any
Credit Party or any Subsidiary has knowledge;
(b) any (i) default or event of default under any Contractual
Obligation of any Credit Party or any Subsidiary or (ii) litigation,
investigation or proceeding which may exist at any time between a Credit
Party or any Subsidiary and any Governmental Authority or any third party,
which in either case, if not cured or if it is reasonably likely to be
adversely determined, as the case may be, would have a Material Adverse
Effect or (iii) any change in the financial condition of Holdings or any
of its Subsidiaries since the date of the last audited financial
statements delivered pursuant to Section 7.1(a) hereof which could
reasonably be expected to have a Material Adverse Effect;
(c) the following events, as soon as possible and in any event
within 30 days after a Credit Party knows thereof and to the extent the
same would have a Material Adverse Effect: (i) the occurrence of any
"reportable event" as defined in ERISA with respect to any Pension Plan,
or any withdrawal from or the termination, reorganization or insolvency of
any Multiemployer Plan or (ii) the institution of proceedings or the
taking of any other action by the Pension Benefit Guaranty Corporation or
Credit Parties or any Commonly Controlled Entity or any Multiemployer Plan
with respect to the withdrawal from or the terminating, reorganization or
insolvency of any Pension Plan;
(d) any event which is reasonably likely to have a Material Adverse
Effect;
(e) promptly after becoming aware of the taking by the Internal
Revenue Service or any foreign taxing jurisdiction of a written tax
position which could reasonably be expected to have a Material Adverse
Effect (or any such tax position taken by the Borrowers) setting forth the
details of such position and the financial impact thereof; and
Each notice pursuant to this Section shall be accompanied by a statement
of a Responsible Officer setting forth details of the occurrence referred to
therein and stating what action the Credit Parties propose to take with respect
thereto.
7.8 Hazardous Material Laws.
(a) Use and operate all of its facilities and properties in material
compliance with all Hazardous Material Laws, keep all necessary permits,
approvals, certificates, licenses and other authorizations relating to
environmental matters in effect and remain in material compliance
57
therewith, and handle all Hazardous Materials in material compliance with
all applicable Hazardous Material Laws; and
(b) Promptly notify Agent and provide copies upon receipt of all
written claims, complaints, notices or inquiries received by any Credit
Party or any of its Subsidiaries of a material nature relating to its
facilities and properties or compliance with Hazardous Material Laws, and
promptly cure and have dismissed any actions and proceedings relating to
compliance with Hazardous Material Laws to which any Credit Party or any
of Subsidiaries is named as a party and which could reasonably be likely
to have a Material Adverse Effect; and
(c) provide such information and certifications which any Lender may
reasonably request from time to time to evidence compliance with this
Section 7.8.
7.9 Debt Service Coverage Ratio. Maintain a Debt Service Coverage Ratio of
not less than 1.25 to 1.0, as of the end of each fiscal quarter of Holdings.
7.10 Senior Secured Debt Ratio. Maintain a Senior Secured Debt Ratio of
not more than 3.0 to 1.0, as of the end of each fiscal quarter of Holdings.
7.11 Leverage Ratio. Maintain a Leverage Ratio of not more than the
following, as of the end of each fiscal quarter of Holdings during the periods
indicated below:
Effective Date through October 29, 2005 4.85 to 1.0
October 30, 2005 through October 28, 2006 4.75 to 1.0
October 29, 2006 through November 2, 2007 4.50 to 1.0
November 3, 2007 and thereafter 4.25 to 1.0
7.12 Consolidated Tangible Net Worth. Maintain, as of the last day of each
fiscal quarter of Holdings, Consolidated Tangible Net Worth of not less than the
sum of $20,000,000 plus the Tangible Net Worth Adjustment Amount.
7.12A Interest Coverage Ratio. Maintain an Interest Coverage Ratio of not
less than the following as of the end of each fiscal quarter of Holdings during
the periods indicated below:
Effective Date through October 29, 2005 2.25 to 1.0
October 30, 2005 and at all times thereafter 2.50 to 1.0
7.13 Taxes. Pay and discharge all taxes and other governmental charges,
and all material contractual obligations calling for the payment of money,
before the same shall become overdue, unless and to the extent only that such
payment is being contested in good faith by appropriate proceedings and is
reserved for, as required by GAAP on its balance sheet, or where the failure to
pay any such matter could not have a Material Adverse Effect.
7.14 Governmental and Other Approvals. Apply for, obtain and/or maintain
in effect, as applicable, all authorizations, consents, approvals, licenses,
qualifications, exemptions, filings, declarations and registrations (whether
with any Governmental Authority or otherwise) which are necessary in connection
with the execution, delivery and performance by such Loan Parties, of this
Agreement, the other Loan Documents, or any other documents or instruments to be
executed and/or delivered by such Loan Parties in connection therewith or
herewith.
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7.15 Compliance with ERISA. Comply in all material respects with all
requirements imposed by ERISA as presently in effect or hereafter promulgated or
the Internal Revenue Code, including, but not limited to, the minimum funding
requirements of any Pension Plan, except where the failure to comply could not
have a Material Adverse Effect.
7.16 ERISA Notices. Promptly, upon having actual knowledge thereof, notify
Agent upon the occurrence of any of the following events:
(a) the termination of any Pension Plan subject to Subtitle C of
Title IV of ERISA;
(b) the appointment of a trustee by a United States District Court
to administer any Pension Plan subject to Title IV of ERISA;
(c) the commencement by the Pension Benefit Guaranty Corporation, or
any successor thereto, of any proceeding to terminate any Pension Plan
subject to Title IV of ERISA;
(d) the failure of a Credit Party or any Subsidiary to make any
payment in respect of any Pension Plan required under Section 412 of the
Internal Revenue Code;
(e) the withdrawal of a Credit Party or any Subsidiary from any
Multiemployer Plan; or
(f) the occurrence of a "reportable event" which is required to be
reported by a Credit Party under Section 4043 of ERISA or a "prohibited
transaction" as defined in Section 406 of ERISA or Section 4975 of the
Internal Revenue Code which in either case is likely to have a Material
Adverse Effect.
7.17 Security; Post-Closing Deliveries. Take such actions as the Agent or
the Majority Lenders may from time to time reasonably request to establish and
maintain first perfected security interests in and Liens on all of its
Collateral, subject only to Permitted Liens and other Liens permitted under
Section 8.2 hereof. Within one hundred and eighty days of the Effective Date,
the Credit Parties shall cause all Foreign Subsidiaries which are Foreign
Significant Subsidiaries on the Effective Date and shall cause Plastipak Czech
Republic, S.R.O. to execute and deliver the Loan Documents described in Section
5.10 of this Agreement (subject to Agent's right to waive certain deliveries as
set forth therein). Within ninety (90) days of the Effective Date cause to be
delivered the following documents: (i) Amendment to that certain Equipment
Pledge Agreement dated January 18, 2002, (ii) Amendment to that certain Quota
Pledge Agreement dated December 22, 1999; (iii) Mortgages for those certain
properties located in McCalla, Alabama, Pineville, Louisiana and Plant City,
Florida, together with the related documentation set forth on Schedule 5.3
attached hereto (provided, however, that appraisals are to be delivered as soon
as they become available, whether prior to or after the execution and delivery
of the Mortgages), together with such supporting documentation, opinions,
certificates and resolutions as Agent may reasonably request. Within sixty (60)
days of completion by England Economic & Industrial Development District
("EEIDD") of the railroad spur on the Pineville, Louisiana property, cause to be
delivered to Agent a Consent by EEIDD to the collateral assignment of its lease
of such railroad spur to Agent for the benefit of the Lenders. Within five (5)
days of the Effective Date, provide a final form of Schedule 1.1 to the Security
Agreement. All of the documentation to be delivered under this Section 7.17 is
to be in form and substance acceptable to Agent.
7.18 Defense of Collateral. Defend the Collateral from any Liens other
than Liens permitted by Section 8.2.
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7.19 Use of Proceeds. Use all Advances of the Revolving Credit for working
capital financing, general corporate purposes, and to finance Permitted
Acquisitions. Borrowers shall not use any portion of the proceeds of any such
advances for the purpose of purchasing or carrying any "margin stock" (as
defined in Regulation U of the Board of Governors of the Federal Reserve System)
in any manner which violates the provisions of Regulation T, U or X of said
Board of Governors or for any other purpose in violation of (x) any applicable
statute or regulation or (y) the terms and conditions of this Agreement.
7.20 Future Subsidiaries; Additional Collateral.
(a) With respect to each Person which becomes a Domestic Significant
Subsidiary of Holdings (directly or indirectly) after the Effective Date,
within thirty days of the date such Person is created, acquired or
otherwise becomes a Domestic Significant Subsidiary (whichever first
occurs), cause such Subsidiary to execute and deliver to the Agent (i) a
joinder agreement whereby such Domestic Significant Subsidiary becomes
obligated as a Guarantor under the Guaranty and (ii) a joinder agreement
whereby such Domestic Significant Subsidiary becomes obligated under the
Security Agreement;
(b) With respect to the Equity Interests of each Person which
becomes a Domestic Significant Subsidiary after the Effective Date, but
subject to the provisions of Section 13.23, within thirty days of the date
such Person is created, acquired or becomes a Domestic Significant
Subsidiary (whichever first occurs), Holdings shall execute, or cause to
be executed, and deliver to the Agent such documentation as may be
necessary to ensure a valid Lien over the applicable Equity Interests
under the Security Agreement or a separate Pledge Agreement encumbering
all of the Equity Interests of each such Domestic Significant Subsidiary
owned by Holdings or any Subsidiary to secure the Indebtedness;
(c) Holdings shall execute, or cause to be executed, and delivered
to the Agent within one hundred and eighty (180) days of the date each
Foreign Subsidiary shall be deemed a Foreign Significant Subsidiary, the
documentation required pursuant to Section 5.10 of this Agreement (subject
to Agent's ability to waive certain deliveries as set forth therein);
(d) With respect to real property owned by Holdings or any Domestic
Significant Subsidiary after the Effective Date, not later than forty-five
days after such property is acquired, Holdings shall execute or cause to
be executed a Mortgage covering such property, together with the real
estate documentation listed on Schedule 5.3 attached hereto (provided that
an appraisal need not be delivered prior to the execution and delivery of
the Mortgage, but rather as soon as such appraisal is made available); and
(e) If, at any time, the Permitted Real Estate Debt is repaid in
full (other than in connection with a refinancing), Holdings shall execute
or cause to be executed, no later than forty-five days after such
repayment, Mortgages covering all real property owned by it and its
Domestic Significant Subsidiaries on the date of such repayment, together
with the real estate documentation listed on Schedule 5.3 attached hereto;
in each case in form satisfactory to the Agent and the Majority Lenders, in
their reasonable discretion, together with such supporting documentation,
including without limitation corporate authority items, certificates and
opinions of counsel, as reasonably required by the Agent and the Majority
Lenders and the applicable Person shall take, or cause to be taken, such steps
as are necessary or advisable under applicable law to perfect the Liens granted
under this Section 7.20.
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7.21 Further Assurances. Execute and deliver or cause to be executed and
delivered to Agent within a reasonable time following the request of the Agent
or the Majority Lenders, and at the Credit Parties' expense, such other
documents or instruments as Agent or the Majority Lenders may reasonably require
to effectuate more fully the purposes of this Agreement or the other Loan
Documents.
8. NEGATIVE COVENANTS
Each Credit Party covenants and agrees that, until the Revolving Credit
Maturity Date and thereafter until expiration of all Letters of Credit and final
payment in full of the Indebtedness and the performance by Credit Parties and
the Subsidiaries of all other obligations under this Agreement and the other
Loan Documents, it will not, and will not permit any of its Subsidiaries, to:
8.1 Limitation on Debt. Create, incur, assume or suffer to exist any Debt,
except:
(a) Indebtedness under this Agreement and the other Loan Documents;
(b) any Debt, other than pursuant to this Agreement, existing on the
Effective Date and set forth in Schedule 8.1 attached hereto and any
renewals or refinancing of such Debt in amounts not exceeding the
scheduled amounts (less any required amortization according to the terms
thereof), on substantially the same terms and otherwise in compliance with
this Agreement;
(c) Debt of the Credit Parties or a Subsidiary other than pursuant
to this Agreement and other than Debt set forth in Schedule 8.1 attached
hereto incurred to finance the acquisition of fixed or capital assets
(whether pursuant to a loan or a Capitalized Lease) in an aggregate amount
not exceeding Twenty-Five Million Dollars ($25,000,000) at any time
outstanding, and any renewals or refinancing of such Debt in amounts not
exceeding the scheduled amounts (less any required amortization according
to the terms thereof), on substantially the same terms and otherwise in
compliance with this Agreement;
(d) Subordinated Debt;
(e) Debt under any Hedging Transactions;
(f) Intercompany Loans, but only to the extent permitted under the
other applicable terms and limitations of this Agreement, including but
not limited to Section 8.7 hereof;
(g) Debt assumed pursuant to a Permitted Acquisition, provided that
such Debt was not entered into, extended or renewed in contemplation of
such acquisition (including Debt secured by Liens permitted by Section
8.2(c)), and provided further that the aggregate amount of all such Debt
shall not exceed $10,000,000; and
(h) Senior Unsecured Debt, and any renewals, refundings and
refinancings thereof in amounts not exceeding $325,000,000 less all
permitted prepayments thereof;
(i) Permitted Real Estate Debt, provided that (i) the Permitted Real
Estate Debt Documents place no more restrictive covenants and obligations
on the Credit Parties and their Subsidiaries as are set forth in this
Agreement and the related Loan Documents, and are otherwise in form and
substance reasonably acceptable to Agent, (ii) at the time of incurring
the Permitted Real Estate Debt, no Default or Event of Default shall have
occurred and be continuing, or be reasonably expected to result from the
incurrence of the Permitted Real Estate Debt and (iii) a Real Estate Lien
Release shall have occurred and Agent shall have released, the Mortgages
over
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certain real property owned by the Credit Parties or the other
Subsidiaries as requested by the Credit Parties and in compliance with
Section 12.12 of this Agreement, as applicable; and
(j) additional unsecured Debt not exceeding $10,000,000 in aggregate
principal amount at any one time outstanding.
8.2 Limitation on Liens. Create, incur, assume or suffer to exist any Lien
upon any of its property, assets or revenues, whether now owned or hereafter
acquired, except for:
(a) Permitted Liens;
(b) Liens securing Debt permitted by Section 8.1(c) incurred to
finance the acquisition of fixed or capital assets, provided that (i) such
Liens shall be created substantially simultaneously with the acquisition
of such fixed or capital assets, (ii) such Liens do not at any time
encumber any property other than the property financed by such Debt, (iii)
the amount of Debt secured thereby is not increased and (iv) the principal
amount of Debt secured by any such Lien shall at no time exceed 100% of
the original purchase price of such property;
(c) any Lien securing Debt assumed pursuant to a Permitted
Acquisition, provided that such Lien is limited to the property so
acquired, and was not entered into, extended or renewed in contemplation
of such acquisition;
(d) Liens in favor of Agent, as security for the Indebtedness;
(e) Liens for the benefit of the Permitted Real Estate Lender
securing the Permitted Real Estate Debt provided that (i) a Real Estate
Lien Release has occurred, and (ii) such Liens encumber only real estate
so released;
(f) other Liens, existing on the Effective Date, set forth on
Schedule 8.2; and
(g) any Lien encumbering property interests, rights or proceeds
which are subject of a transfer or encumbrance pursuant to a Permitted
Securitization.
8.3 Limitation on Guarantee Obligations. Create, incur, assume or suffer
to exist any Guarantee Obligation, except (a) the Guaranties, (b) guaranties of
Senior Unsecured Debt, (c) any guaranties described on Schedule 8.3, (d)
Guarantee Obligations arising with respect to customary indemnification and
purchase price adjustment obligations incurred in connection with any sale or
disposition of assets otherwise permitted under this Agreement, (e) customary
clean up call provisions under any Permitted Securitization and (f) guaranties
of any Debt of a Foreign Subsidiary, provided that the aggregate amount of such
Guarantee Obligations shall not be in excess of $10,000,000 at any one time
outstanding and provided further that no Default or Event of Default has
occurred and is continuing at the time of the execution and delivery of any such
guaranty, or would result from the execution and delivery of any such guaranty.
8.4 Acquisitions. Other than Permitted Acquisitions, purchase or otherwise
acquire or become obligated for the purchase of all or substantially all or any
material portion of the assets or business interests of any Person, firm or
corporation, or any Equity Interests of any corporation, trusteeship or
association, or any business or going concern, or in any other manner effectuate
or attempt to effectuate an expansion of present business by acquisition.
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8.5 Limitation on Mergers, or Sale of Assets. Enter into any merger or
consolidation or convey, sell, lease, assign, transfer or otherwise dispose of
any of its property, business or assets (including, without limitation,
receivables and leasehold interests), whether now owned or hereafter acquired or
make any material change in its capital structure or its present method of
conducting business, except:
(a) inventory leased or sold in the ordinary course of business;
(b) obsolete or worn out property, property no longer useful in the
conduct of a Credit Party's or any Subsidiary's business or property from
closed offices;
(c) acquisitions by merger in which Holdings or a 100% Domestic
Subsidiary is the surviving corporation and which otherwise meet the
definition of "Permitted Acquisition" and Permitted Securitizations;
(d) mergers or consolidations of any Subsidiary with or into a
Borrower (so long as such Borrower shall be the continuing or surviving
corporation); or mergers or consolidations of any Subsidiary with or into
any Domestic Subsidiary that is a Guarantor (so long as such Guarantor
shall be the continuing or surviving corporation); and
(e) subject to the mandatory prepayment provisions of Section 2.15
hereof (and provided that no Default or Event of Default has occurred and
is continuing at the time of each such sale), Asset Sales in which the
sales price is at least the fair market value of the assets sold and the
aggregate amount of such Asset Sales is less than $10,000,000 in any
Fiscal Year, and other Asset Sales approved by the Majority Lenders.
8.6 Restricted Payments. Declare or make, or permit any Subsidiary to
declare or make, any distribution, dividend, payment or other distribution of
assets, properties, cash, rights, obligations or securities (collectively,
"Distributions") on account of any Equity Interests, or purchase, redeem or
otherwise acquire for value any Equity Interests, or any warrants, rights or
options to acquire such Equity Interests, now or hereafter outstanding, except
that (i) Holdings' Subsidiaries may make Distributions to the Credit Parties,
(ii) the Borrowers may redeem Equity Interests of employees pursuant to their
Restricted Stock Bonus Plan in amounts not to exceed $3,000,000 in the aggregate
in any Fiscal Year (which amount shall be increased by the amount of any cash
proceeds of "Key Man" life insurance policies (net of any relevant costs or
expenses), whenever received, that are used to make such repurchases or
redemptions), provided that no Distributions described in this sub-section (ii)
may be made if a Default or Event of Default is then continuing, either before
any such Distribution or after giving effect thereto (and for this purpose,
compliance with Sections 7.10 and 7.11 shall be determined on a pro forma basis
based on the Credit Parties' most recent quarterly financial statements and
Covenant Compliance Certificate) and (iii) Holdings may pay dividends to its
shareholders upon satisfaction of the following conditions: (A) payment of such
dividends shall be made solely on an annual basis, within thirty days of Agent's
receipt of the financial statements required under Section 7.1(a) of this
Agreement, (B) written evidence shall be delivered to Agent that the Fixed
Charge Coverage Ratio, calculated on a pro-forma basis for the four fiscal
quarters most recently ended, as if the planned dividend payment had been made
during such period shall be greater than 1.1:1.0; (C) the aggregate amount of
dividends paid in any Fiscal Year shall not exceed fifty percent (50%) of
Consolidated Net Income for the Fiscal Year immediately preceding the Fiscal
Year in which such dividend payment is made and (D) no Default or Event of
Default shall have occurred and be continuing at the time of such making such
dividend payment, or shall result from the making of such payment.
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8.7 Limitation on Investments, Loans and Advances. Make any advance, loan,
extension of credit or capital contribution to, or purchase any stock, bonds,
notes, debentures or other securities, of or any assets constituting a business
unit of, or make any other investment in, any Person, except:
(a) Permitted Investments;
(b) Investments existing on the Effective Date and listed on
Schedule 8.7 hereof;
(c) extensions of trade credit in the ordinary course of business;
(d) loans and advances to officers and employees of a Credit Party
or to officers and employees of any Subsidiary in the ordinary course of
business in an aggregate amount, not to exceed $1,000,000 at any one time
outstanding, to the extent permitted by applicable law;
(e) Intercompany Loans, Advances or Investments made on or after the
Effective Date by any Credit Party or any Guarantor to any Domestic Loan
Party; provided that any Intercompany Loan hereunder shall be evidenced by
and funded under an Intercompany Note encumbered in favor of the Agent
pursuant to a Security Agreement and provided further that at the time any
such loan, advance or investment is made (before and after giving effect
thereto) no Default or Event of Default has occurred and is continuing;
(f) Permitted Acquisitions;
(g) Intercompany Loans, Advances or Investments, including those
listed on Schedule 8.7 and those made after the Effective Date, by all
Credit Parties to any Eligible Foreign Subsidiary in an aggregate amount
not to exceed $35,000,000 at any one time outstanding (provided that all
Intercompany Loans covered by this clause (except the existing promissory
notes from Plastipak Brazil as maker to Packaging as payee, and any
extensions and renewals (but not increases) thereof in an aggregate
principal amount of $2,100,000 as of the date hereof) shall be evidenced
by and funded under an Intercompany Note encumbered in favor of the Agent
pursuant to the applicable Security Agreement and provided further that at
the time any such loan, advance or investment is made (before and after
giving effect thereto) no Default or Event of Default has occurred and is
continuing);
(h) Investments in aggregate amount outstanding at any one time not
to exceed $5,000,000; and
(i) Investments in an amount not to exceed the lesser of (i)
$25,000,000 and (ii) $19,891,235, plus 50% of Consolidated Net Income for
the period (taken as one accounting period) from the first day of the
fiscal quarter ending on or about January 31, 2005 to the end of Holdings'
most recently ended fiscal quarter for which internal financial statements
are available at the time of such Investment (or, if such Consolidated Net
Income for such period is a deficit, less 100% of such deficit); and
(j) Investments in any Subsidiary (including, without limitation,
any Special Purpose Subsidiary) from and after the date hereof (provided
that no Default or Event of Default has occurred and is continuing at the
time of such investment), consisting of (x) dispositions of specific
accounts receivable made pursuant to any Permitted Securitization and the
resultant Debt issued by a Special Purpose Subsidiary to another
Subsidiary as part of such Permitted Securitization, in each case to the
extent constituting Investments hereunder; and (y) the repurchase or
replacement from and after the date hereof of accounts receivable pursuant
to any
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representations or warranties or clean up call provisions included in such
Permitted Securitization in accordance with the definition thereof.
In valuing any Investments for the purpose of applying the limitations set
forth in this Section 8.7 (except as otherwise expressly provided herein), such
Investment shall be taken at the original cost thereof, without allowance for
any subsequent write-offs or appreciation or depreciation, but less any amount
repaid or recovered on account of capital or principal.
8.8 Transactions with Affiliates. Enter into any transaction, including,
without limitation, any purchase, sale, lease or exchange of property or the
rendering of any service, with any Affiliate of a Credit Party or any Subsidiary
unless such transaction is otherwise permitted under this Agreement or is in the
ordinary course of such Credit Party's or such Subsidiary's business and is upon
fair and reasonable terms no less favorable to the applicable Credit Party or
such Subsidiary than it would obtain in a comparable arms length transaction
with a Person not a Subsidiary and such transaction would not contravene any
financial assistance provision of applicable law.
8.9 Sale and Leaseback. Enter into any arrangement with any Person
providing for the leasing by a Credit Party or any Subsidiary of real or
personal property which has been or is to be sold or transferred by a Credit
Party or such Subsidiary to such Person or to any other Person to whom funds
have been or are to be advanced by such Person on the security of such property
or rental obligations of a Credit Party or such Subsidiary, as the case may be.
8.10 Limitation on Negative Pledge Clauses. Enter into any agreement,
document or instrument which would restrict or prevent the Credit Parties and
their Subsidiaries from granting to the Agent on behalf of the Agent and the
Lenders Liens upon, security interests in and pledges of their respective assets
which are senior in priority to all other Liens, except for Permitted Liens and
any other agreements, documents or instruments pursuant to which Liens not
prohibited by the terms of this Agreement are created, entered into, or allowed
to exist, or from declaring or paying dividends, principal or interest.
8.11 Prepayment of Debts. Prepay, purchase, redeem or defease any Debt for
money borrowed or any Capitalized Leases, except (i) prepayments of the
Indebtedness, and (ii) subject to the terms hereof so long as no Default or
Event of Default (including without limitation pursuant to Section 7.14 hereof)
has occurred and is continuing (both before and after giving effect thereto),
(A) prepayments of Subordinated Debt, except as prohibited by the terms of the
relevant subordination agreement, (B) the Senior Unsecured Notes, and (C) the
Permitted Real Estate Debt, provided that when any prepayment permitted under
clause (B) or (C) of this Section 8.11 is made, Borrowers shall provide evidence
satisfactory to Agent that they have availability under the Revolving Credit of
at least $25,000,000 as of the date of such repayment.
8.12 Amendment of Certain Documents relating to Debt. Amend, modify or
otherwise alter (or suffer to be amended, modified or altered) any of the
material terms and conditions of those documents or instruments evidencing or
otherwise related to any Debt set forth on Schedule 8.1, any Subordinated Debt,
the Senior Unsecured Debt, the Permitted Real Estate Debt or any Permitted
Securitization, or waive (or permit to be waived) any provision thereof in any
material respect, without the prior written approval of Agent and the Majority
Lenders. For purposes of those documents or instruments evidencing or otherwise
related to such Debt, any increase in the original interest rate or principal
amount, any shortening of the original amortization, any change in financial
covenants, any change in any default, remedial or other repayment terms and any
change in or waiver of conditions contained therein which are required under or
necessary for compliance with this Agreement or the other Loan Documents shall
(without reducing the scope of this Section 8.12) be deemed to be material.
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8.13 Modification of Certain Agreements. Make, permit or consent to any
amendment or other modification to the constitutional documents of any of the
Loan Parties, except to the extent that any such amendment (i) does not violate
the terms and conditions of this Agreement or any of the other Loan Documents,
(ii) does not materially adversely affect the interest of the Lenders as
creditor under this Agreement, the other Loan Documents or any other document or
instrument in any respect and (iii) could not reasonably be expected to have a
Material Adverse Effect.
8.14 Limitation on Capital Expenditures. Make or commit to make (by way of
the acquisition of securities of a Person or otherwise) any Capital Expenditure,
except for Capital Expenditures in an aggregate amount not in excess of
$100,000,000 in any Fiscal Year. In addition, the difference between permitted
Capital Expenditures and actual Capital Expenditures at the end of any Fiscal
Year and for the year then ended may be spent during the following Fiscal Year
(including any such difference between Capital Expenditures permitted under the
Prior Credit Agreement and the actual Capital Expenditures for Fiscal Year
2004), provided that any amounts carried forward pursuant to this paragraph
shall expire at the end of such following Fiscal Year.
9. DEFAULTS
9.1 Events of Default. The occurrence of any of the following events shall
constitute an Event of Default hereunder:
(a) non-payment when due of (i) the principal of any Advance or
interest thereon in accordance with the terms thereof, (ii) any
Reimbursement Obligation, or (iii) any Fees, and in the case of interest
payments and Fees, continuance thereof for three (3) Business Days;
(b) non-payment of any money by Borrowers under this Agreement or by
Credit Parties or any Subsidiary under any of the other Loan Documents to
which it is a party, other than as set forth in subsection (a), above
within five Business Days after notice from Agent that the same is due and
payable;
(c) default in the observance or performance of any of the
conditions, covenants or agreements of Credit Parties set forth in
Sections 2.14, 2.15, 7.1, 7.2, 7.4(a), 7.5, 7.6, 7.7, 7.9 through 7.12, or
8 (in its entirety);
(d) default in the observance or performance of any of the
conditions, covenants or agreements of Credit Parties set forth in Section
7.20 and continuance thereof for thirty (30) days;
(e) default in the observance or performance of any of the other
conditions, covenants or agreements set forth in this Agreement by Credit
Parties and continuance thereof for a period of thirty (30) consecutive
days after written notice from Agent;
(f) any certification, representation or warranty made by Credit
Parties or any Subsidiary herein or in any instrument submitted pursuant
hereto or by any other party to the Loan Documents proves untrue or
misleading in any material adverse respect when made;
(g) default in the observance or performance of or failure to comply
with any of the conditions, covenants or agreements of Credit Parties or
any Subsidiary set forth in any of the other Loan Documents, and the
continuance thereof beyond any period of grace or cure specified in any
such document or, in the case of the Collateral Documents, continuance
thereof for a period of thirty (30) days;
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(h) default (i) in the payment of any Debt (other than Indebtedness
hereunder, but including without limitation any Subordinated Debt, the
Senior Unsecured Debt, any Permitted Real Estate Debt and any Debt arising
in connection with or pursuant to any Permitted Securitization) of any
Credit Party or any Subsidiary in excess of One Million Dollars
($1,000,000), individually or in the aggregate when due (whether by
acceleration or otherwise) and continuance thereof beyond any applicable
period of cure or (ii) failure to comply with the terms of any such other
obligation for borrowed money of any Credit Party or any Subsidiary, which
continues beyond any applicable period of cure and which would permit the
holder or holders thereto to accelerate such other indebtedness for
borrowed money;
(i) the rendering of any judgment(s) for the payment of money in
excess of the sum of One Million Dollars ($1,000,000) (or the equivalent
thereof in any currency other than Dollars) individually or in the
aggregate against any Credit Party or any Subsidiary, and any such
judgment(s) shall remain unpaid, unvacated, unbonded or unstayed by appeal
or otherwise for a period of thirty (30) consecutive days, except as
covered by adequate insurance with a reputable carrier and an action is
pending in which an active defense is being made with respect thereto;
(j) the occurrence of a "reportable event", as defined in ERISA,
which is determined to constitute grounds for termination by the Pension
Benefit Guaranty Corporation of any Pension Plan subject to Title IV of
ERISA maintained or contributed to by or on behalf of a Credit Party or
any of its Subsidiaries for the benefit of any of its employees or for the
appointment by the appropriate United States District Court of a trustee
to administer such Pension Plan and such reportable event is not corrected
and such determination is not revoked within sixty (60) days after notice
thereof has been given to the plan administrator of such Pension Plan
(without limiting any of Agent's or any Lender's other rights or remedies
hereunder), or the institution of proceedings by the Pension Benefit
Guaranty Corporation to terminate any such Pension Plan or to appoint a
trustee by the appropriate United States District Court to administer any
such Pension Plan, which in either case could reasonably be expected to
have a Material Adverse Effect;
(k) any Loan Party (i) ceases or fails to be solvent, or generally
fails to pay, or admits in writing its inability to pay, its debts as they
become due; (ii) voluntarily ceases to conduct its business in the
ordinary course; (iii) commences any Insolvency Proceeding with respect to
itself; (iv) takes any action to effectuate or authorize any of the
foregoing; or (A) Any involuntary Insolvency Proceeding is commenced or
filed against Loan Party, or any writ, judgment, warrant of attachment,
execution or similar process is issued, enforced or levied against a
substantial part of any Loan Party's properties, and such proceeding or
petition shall not be dismissed, or such writ, judgment, warrant of
attachment, execution or similar process shall not be released, vacated or
fully bonded, within 60 days after commencement, filing or levy; (B) any
Loan Party admits the material allegations of a petition against it in any
Insolvency Proceeding, or an order for relief is ordered in any Insolvency
Proceeding; or (C) any Loan Party acquiesces in the appointment of a
receiver, receiver and manager, administrative receiver, trustee,
custodian, conservator, liquidator, mortgagee in possession (or agent
therefor), or other similar Person for itself or a substantial portion of
its property or business; or
(l) a Change in Control shall occur; or
(m) any provision of any Collateral Document shall at any time for
any reason cease to be valid, binding and enforceable against any Credit
Party or any Subsidiary, as applicable, or the validity, binding effect or
enforceability thereof shall be contested by any Credit Party or any
Subsidiary or any Credit Party or any Subsidiary shall deny that it has
any or further liability or obligation under any Collateral Document, or
any such Loan Document shall be terminated,
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invalidated, revoked or set aside or in any way cease to give or provide
to the Lenders and the Agent the benefits purported to be created thereby.
9.2 Exercise of Remedies. If an Event of Default has occurred and is
continuing hereunder: (a) the Agent may, and shall, upon being directed to do so
by the Majority Lenders, declare the Commitments terminated; (b) the Agent may,
and shall, upon being directed to do so by the Majority Lenders, declare the
entire unpaid principal Indebtedness, including the Notes, immediately due and
payable, without presentment, notice or demand, all of which are hereby
expressly waived by Credit Parties; (c) upon the occurrence of any Event of
Default specified in subsection 9.1(k) above and to the extent permitted by law,
and notwithstanding the lack of any declaration by Agent under preceding clause
(b), the entire unpaid principal Indebtedness shall become automatically and
immediately due and payable, and the Commitments shall be automatically and
immediately terminated; (d) the Agent shall demand immediate delivery of cash
collateral, and Borrowers and each Account Party agrees to deliver such cash
collateral upon demand, in an amount equal to the maximum amount that may be
available to be drawn at any time prior to the stated expiry of all outstanding
Letters of Credit, and (e) the Agent may, and shall, if directed to do so by the
Majority Lenders or the Lenders, as applicable (subject to the terms hereof),
exercise any remedy permitted by this Agreement, the other Loan Documents or
law.
9.3 Rights Cumulative. No delay or failure of Agent and/or Lenders in
exercising any right, power or privilege hereunder shall affect such right,
power or privilege, nor shall any single or partial exercise thereof preclude
any further exercise thereof, or the exercise of any other power, right or
privilege. The rights of Agent and Lenders under this Agreement are cumulative
and not exclusive of any right or remedies which Lenders would otherwise have.
9.4 Waiver by Credit Parties of Certain Laws. To the extent permitted by
applicable law, each Credit Party hereby agrees to waive, and does hereby
absolutely and irrevocably waive and relinquish the benefit and advantage of any
valuation, stay, appraisement, extension or redemption laws now existing or
which may hereafter exist, which, but for this provision, might be applicable to
any sale made under the judgment, order or decree of any court, on any claim for
interest on the Notes, or any security interest or mortgage contemplated by or
granted under or in connection with this Agreement. These waivers have been
voluntarily given, with full knowledge of the consequences thereof.
9.5 Waiver of Defaults. No Event of Default shall be waived by the Lenders
except in a writing signed by an officer of the Agent in accordance with Section
13.11 hereof. No single or partial exercise of any right, power or privilege
hereunder, nor any delay in the exercise thereof, shall preclude other or
further exercise of their rights by Agent or the Lenders. No waiver of any Event
of Default shall extend to any other or further Event of Default. No forbearance
on the part of the Agent or the Lenders in enforcing any of their rights shall
constitute a waiver of any of their rights. Credit Parties expressly agree that
this Section may not be waived or modified by the Lenders or Agent by course of
performance, estoppel or otherwise.
9.6 Set Off. Upon the occurrence and during the continuance of any Event
of Default, each Lender may at any time and from time to time, without notice to
the Credit Parties but subject to the provisions of Section 10.3 hereof (any
requirement for such notice being expressly waived by the Credit Parties), to
the extent permitted by applicable law, set off and apply against any and all of
the obligations of the Credit Parties now or hereafter existing under this
Agreement, whether owing to such Lender, any Affiliate of such Lender or any
other Lender or the Agent, any and all deposits (general or special, time or
demand, provisional or final) at any time held and other indebtedness at any
time owing by such Lender to or for the credit or the account of any Credit
Party and any property of any Credit Party from time to time in possession of
such Lender, irrespective of whether or not such deposits held or indebtedness
owing by such Lender may be contingent and unmatured and regardless of whether
any Collateral then
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held by the Agent or any Lender is adequate to cover the Indebtedness. Each
Credit Party hereby grants to the Lenders and the Agent a Lien on and security
interest in all such deposits, indebtedness and property as collateral security
for the payment and performance of all of their respective obligations under
this Agreement and the other Loan Documents. The rights of the Agent and each
Lender under this Section 9.6 are in addition to the other rights and remedies
(including, without limitation, other rights of setoff) which the Agent and such
Lender may have. Promptly following any setoff, the applicable Lender shall give
written notice to Agent and the Borrowers of the occurrence thereof.
10. PAYMENTS, RECOVERIES AND COLLECTIONS
10.1 Payment Procedure.
(a) All payments by the Borrowers in respect of principal of, or
interest on, any Advance or in respect of any Letter of Credit Obligations
or Fees shall be made without setoff or counterclaim on the date specified
for payment under this Agreement not later than 11:00 a.m. (Detroit time)
in Dollars in immediately available funds to Agent, for the ratable
account of the Lenders, at Agent's office located at Xxx Xxxxxxx Xxxxxx,
Xxxxxxx, Xxxxxxxx 00000-0000. Upon receipt of each such payment, the Agent
shall make prompt payment to each Lender, or, in respect of
Eurocurrency-based Advances, such Lender's Eurocurrency Lending Office, in
like funds, of all amounts received by it for the account of such Lender.
(b) Unless the Agent shall have been notified by Borrowers prior to
the date on which any payment to be made by Borrowers is due that
Borrowers do not intend to remit such payment, the Agent may, in its sole
discretion and without obligation to do so, assume that the Borrowers have
remitted such payment when so due and the Agent may, in reliance upon such
assumption, make available to each Lender on such payment date an amount
equal to such Lender's share of such assumed payment. If Borrowers have
not in fact remitted such payment to the Agent, each Lender shall
forthwith on demand repay to the Agent the amount of such assumed payment
made available or transferred to such Lender, together with the interest
thereon, in respect of each day from and including the date such amount
was made available by the Agent to such Lender to the date such amount is
repaid to the Agent at a rate per annum equal to (i) for Prime-based
Advances, the Federal Funds Effective Rate (daily average), as the same
may vary from time to time, and (ii) with respect to Eurocurrency-based
Advances or Quoted Rate Advances, Agent's aggregate marginal cost
(including the cost of maintaining any required reserves or deposit
insurance and of any fees, penalties, overdraft charges or other costs or
expenses incurred by Agent) of carrying such amount.
(c) Subject to the definition of Interest Period, whenever any
payment to be made hereunder shall otherwise be due on a day which is not
a Business Day, such payment shall be made on the next succeeding Business
Day and such extension of time shall be included in computing interest, if
any, in connection with such payment.
(d) All payments to be made by Borrowers under this Agreement or any
of the Notes (including without limitation payments under the Swing Line)
shall be made without set-off or counterclaim, as aforesaid, and, subject
to compliance by the Lenders with Section 13.13, without deduction for or
on account of any present or future withholding or other taxes of any
nature imposed by any Governmental Authority or of any political
subdivision thereof or any federation or organization of which such
Governmental Authority may at the time of payment be a member, unless
Borrowers are compelled by law to make payment subject to such tax. In
such event, Borrowers shall:
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(i) pay to the Agent for Agent's own account and/or, as the
case may be, for the account of the Lenders (and, in the case of
Advances of the Swing Line, pay to the Swing Line Lender which
funded such Advances) such additional amounts as may be necessary to
ensure that the Agent and/or such Lender or Lenders receive a net
amount equal to the full amount which would have been receivable had
payment not been made subject to such tax; and
(ii) remit such tax to the relevant taxing authorities
according to applicable law, and send to the Agent or the applicable
Lender (including the Swing Line Lender) or Lenders, as the case may
be, such certificates or certified copy receipts as the Agent or
such Lender or Lenders shall reasonably require as proof of the
payment by the Borrowers, of any such taxes payable by the
Borrowers.
As used herein, the terms "tax", "taxes" and "taxation" include all taxes,
levies, imposts, duties, charges, fees, deductions and withholdings and any
restrictions or conditions resulting in a charge together with interest (and any
taxes payable upon the amounts paid or payable pursuant to this Section 10.1)
thereon and fines and penalties with respect thereto which may be imposed by
reason of any violation or default with respect to the law regarding such tax.
10.2 Application of Proceeds of Collateral. Notwithstanding anything to
the contrary in this Agreement, after an Event of Default, the proceeds of any
Collateral, together with any offsets, voluntary payments by Credit Parties or
any Subsidiary of the Credit Parties or others and any other sums received or
collected in respect of the Indebtedness, shall be applied, first, to the
Advances of the Revolving Credit, any Reimbursement Obligations and indebtedness
owed under any Interest Rate Protection Agreements on a pro rata basis (or in
such order and manner as determined by the Majority Lenders; subject, however,
to the applicable Percentages of the loans held by each of the Lenders), next,
to any other Indebtedness on a pro rata basis, and then, if there is any excess,
to the Credit Parties and the Subsidiaries, as the case may be. Subject to the
terms of this Section 10.2, the application of such proceeds and other sums to
the Advances of the Revolving Credit, the Reimbursement Obligations and under
any Interest Rate Protection Agreements shall be based on each Lender's
Percentage of the aggregate of the loans.
10.3 Pro-rata Recovery. If any Lender shall obtain any payment or other
recovery (whether voluntary, involuntary, by application of offset or otherwise)
on account of principal of, or interest on, any of the Indebtedness in excess of
its pro rata share of payments then or thereafter obtained by all Lenders upon
principal of and interest on all Indebtedness, such Lender shall purchase from
the other Lenders such participations in the Revolving Credit, and/or
Reimbursement Obligation held by them as shall be necessary to cause such
purchasing Lender to share the excess payment or other recovery ratably in
accordance with the Percentage with each of them; provided, however, that if all
or any portion of the excess payment or other recovery is thereafter recovered
from such purchasing holder, the purchase shall be rescinded and the purchase
price restored to the extent of such recovery, but without interest.
11. CHANGES IN LAW OR CIRCUMSTANCES; INCREASED COSTS
11.1 Reimbursement of Prepayment Costs. If any Borrower makes any payment
of principal with respect to any Eurocurrency-based Advance or Quoted Rate
Advance on any day other than the last day of the Interest Period applicable
thereto (whether voluntarily, by acceleration, or otherwise), or if any Borrower
converts or refunds (or attempts to convert or refund) any such Advance on any
day other than the last day of the Interest Period applicable thereto; or if any
Borrower fails to borrow, refund or convert into any Eurocurrency-based Advance
or Quoted Rate Advance after notice has been given by such Borrower to Agent in
accordance with the terms hereof requesting such Advance, or if any Borrower
fails
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to make any payment of principal or interest in respect of a Eurocurrency-based
Advance or Quoted Rate Advance when due, the applicable Borrower shall reimburse
Agent for itself and/or on behalf of any Lender, as the case may be, on demand
for any resulting loss, cost or expense incurred by Agent and Lenders, as the
case may be, as a result thereof, including, without limitation, any such loss,
cost or expense incurred in obtaining, liquidating, employing or redeploying
deposits from third parties, whether or not Agent and Lenders, as the case may
be, shall have funded or committed to fund such Advance. Such amount payable by
such Borrower to Agent for itself and/or on behalf of any Lender, as the case
may be, may include, without limitation, an amount equal to the excess, if any,
of (a) the amount of interest which would have accrued on the amount so prepaid,
or not so borrowed, refunded or converted, for the period from the date of such
prepayment or of such failure to borrow, refund or convert, through the last day
of the relevant Interest Period, at the applicable rate of interest for said
Advance(s) provided under this Agreement, over (b) the amount of interest (as
reasonably determined by Agent and Lenders, as the case may be) which would have
accrued to Agent and Lenders, as the case may be, on such amount by placing such
amount on deposit for a comparable period with leading banks in the interbank
eurocurrency market. Calculation of any amounts payable to any Lender under this
paragraph shall be made as though such Lender shall have actually funded or
committed to fund the relevant Advance through the purchase of an underlying
deposit in an amount equal to the amount of such Advance and having a maturity
comparable to the relevant Interest Period; provided, however, that any Lender
may fund any Eurocurrency-based Advance or Quoted Rate Advance, as the case may
be, in any manner it deems fit and the foregoing assumptions shall be utilized
only for the purpose of the calculation of amounts payable under this paragraph.
Upon the written request of Borrowers, Agent and Lenders shall deliver to
Borrowers a certificate setting forth the basis for determining such losses,
costs and expenses, which certificate shall be conclusively presumed correct,
absent manifest error.
11.2 Eurocurrency Lending Office. For any Advance to which the
Eurocurrency-based Rate is applicable, if Agent or a Lender, as applicable,
shall designate a Eurocurrency Lending Office which maintains books separate
from those of the rest of Agent or such Lender, Agent or such Lender, as the
case may be, shall have the option of maintaining and carrying the relevant
Advance on the books of such Eurocurrency Lending Office.
11.3 Circumstances Affecting Eurocurrency-based Rate Availability. If with
respect to any Interest Period, Agent or the Majority Lenders (after
consultation with Agent) shall determine that, by reason of circumstances
affecting the foreign exchange and interbank markets generally, deposits in
eurodollars in the applicable amounts are not being offered to the Agent or such
Lenders for such Interest Period, then Agent shall forthwith give notice thereof
to the Borrowers. Thereafter, until Agent notifies the Borrowers that such
circumstances no longer exist, (i) the obligation of Lenders to make
Eurocurrency-based Advances, and the right of the Borrowers to convert an
Advance to or refund an Advance as a Eurocurrency-based Advance, as the case may
be, shall be suspended, and (ii) the Borrowers shall repay in full (or cause to
be repaid in full) the then outstanding principal amount of each such
Eurocurrency-based Advance, together with accrued interest thereon, any amounts
payable under Section 11.1 hereof, and all other amounts payable hereunder on
the last day of the then current Interest Period applicable to such Advance.
Upon the date for repayment as aforesaid, such outstanding principal amount
shall be converted to a Prime-based Advance as of the last day of such Interest
Period.
11.4 Laws Affecting Eurocurrency-based Advance Availability. If, after the
date of this Agreement, the introduction of, or any change in, any applicable
law, rule or regulation or in the interpretation or administration thereof by
any Governmental Authority charged with the interpretation or administration
thereof, or compliance by any of the Lenders (or any of their respective
Eurocurrency Lending Offices) with any request or directive (whether or not
having the force of law) of any such authority, shall make it unlawful or
impossible for any of the Lenders (or any of their respective Eurocurrency
Lending Offices) to honor its obligations hereunder to make or maintain any
Advance with
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interest at the Eurocurrency-based Rate, such Lender shall forthwith give notice
thereof to Holdings and to Agent. Thereafter, (a) the obligations of Lenders to
make Eurocurrency-based Advances and the right of any Borrower to convert an
Advance into or refund an Advance as a Eurocurrency-based Advance shall be
suspended and thereafter the Borrowers may select as Applicable Interest Rates
only those which remain available and which are permitted to be selected
hereunder, and (b) if any of the Lenders may not lawfully continue to maintain
an Advance to the end of the then current Interest Period applicable thereto as
a Eurocurrency-based Advance, the applicable Advance shall immediately be
converted to a Prime-based Advance and the Prime-based Rate shall be applicable
thereto for the remainder of such Interest Period. For purposes of this Section,
a change in law, rule, regulation, interpretation or administration shall
include, without limitation, any change made or which becomes effective on the
basis of a law, rule, regulation, interpretation or administration presently in
force, the effective date of which change is delayed by the terms of such law,
rule, regulation, interpretation or administration.
11.5 Increased Cost of Eurocurrency-based Advances. If the adoption after
the date of this Agreement of, or any change after the date of this Agreement
in, any applicable law, rule or regulation of or in the interpretation or
administration thereof by any Governmental Authority charged with the
interpretation or administration thereof, or compliance by Agent or any of the
Lenders (or any of their respective Eurocurrency Lending Offices) with any
request or directive (whether or not having the force of law) made by any such
authority, central bank or comparable agency after the date hereof:
(a) shall subject any of the Lenders (or any of their respective
Eurocurrency Lending Offices) to any tax, duty or other charge with
respect to any Advance or shall change the basis of taxation of payments
to any of the Lenders (or any of their respective Eurocurrency Lending
Offices) of the principal of or interest on any Advance or any other
amounts due under this Agreement in respect thereof (except for changes in
the rate of tax on the overall net income of any of the Lenders or any of
their respective Eurocurrency Lending Offices imposed by the jurisdiction
in which such Lender's principal executive office or Eurocurrency Lending
Office is located); or
(b) shall impose, modify or deem applicable any reserve (including,
without limitation, any imposed by the Board of Governors of the Federal
Reserve System), special deposit or similar requirement against assets of,
deposits with or for the account of, or credit extended by, any of the
Lenders (or any of their respective Eurocurrency Lending Offices) or shall
impose on any of the Lenders (or any of their respective Eurocurrency
Lending Offices) or the foreign exchange and interbank markets any other
condition affecting any Advance;
and the result of any of the foregoing is to increase the costs to any of the
Lenders of maintaining any part of the Indebtedness hereunder as a
Eurocurrency-based Advance or to reduce the amount of any sum received or
receivable by any of the Lenders under this Agreement in respect of a
Eurocurrency-based Advance, then such Lender shall notify Agent, and Agent (or
such Lender, as aforesaid) shall promptly notify the Borrowers of such fact and
demand compensation therefor and, within fifteen (15) days after such notice,
the applicable Borrower agrees to pay to such Lender such additional amount or
amounts as will compensate such Lender or Lenders for such increased cost or
reduction. A certificate of Agent (or such Lender, if applicable) setting forth
the basis for determining such additional amount or amounts necessary to
compensate such Lender or Lenders shall be conclusively presumed to be correct
save for manifest error. For purposes of this Section, a change in law, rule,
regulation, interpretation, administration, request or directive shall include,
without limitation, any change made or which becomes effective on the basis of a
law, rule, regulation, interpretation, administration, request or directive
presently in force, the effective date of which change is delayed by the terms
of such law, rule, regulation, interpretation, administration, request or
directive.
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11.6 Capital Adequacy and Other Increased Costs. In the event that after
the Effective Date the adoption of or any change in any applicable law, treaty,
rule or regulation (whether domestic or foreign) now or hereafter in effect and
whether or not presently applicable to any Lender or Agent, or any
interpretation or administration thereof by any Governmental Authority charged
with the interpretation or administration thereof, or compliance by any Lender
or Agent with any guideline, request or directive of any such authority (whether
or not having the force of law), including any risk based capital guidelines,
affects or would affect the amount of capital required or expected to be
maintained by such Lender or Agent (or any corporation controlling such Lender
or Agent) and such Lender or Agent, as the case may be, determines that the
amount of such capital is increased by or based upon the existence of such
Lender's or Agent's obligations or Advances hereunder and such increase has the
effect of reducing the rate of return on such Lender's or Agent's (or such
controlling corporation's) capital as a consequence of such obligations or
Advances hereunder to a level below that which such Lender or Agent (or such
controlling corporation) could have achieved but for such circumstances (taking
into consideration its policies with respect to capital adequacy) by an amount
deemed by such Lender or Agent to be material (collectively, "Increased Costs"),
then Agent or such Lender shall notify the Borrowers, and thereafter the
applicable Borrower shall pay to such Lender or Agent, as the case may be, from
time to time, upon request by such Lender or Agent, additional amounts
sufficient to compensate such Lender or Agent (or such controlling corporation)
for any increase in the amount of capital and reduced rate of return which such
Lender or Agent reasonably determines to be allocable to the existence of such
Lender's or Agent's obligations or Advances hereunder. A statement as to the
amount of such compensation, prepared in good faith and in reasonable detail by
such Lender or Agent, as the case may be, shall be submitted by such Lender or
by Agent to the Borrowers, reasonably promptly after becoming aware of any event
described in this Section 11.6 and shall be conclusive, absent manifest error in
computation.
11.7 Substitution of Lenders. If (a) the obligation of any Lender to make
Eurocurrency-based Advances has been suspended pursuant to Section 11.3 or 11.4
or (b) any Lender has demanded compensation under Section 3.4(c), 11.1, 11.5 or
11.6 (in each case, an "Affected Lender"), then the Borrowers shall have the
right (subject to Section 13.8 hereof), with the assistance of the Agent, to
seek a substitute Lender or Lenders (which may be one or more of the Lenders
(the "Purchasing Lender" or "Purchasing Lenders") to purchase the Advances of
the Revolving Credit and assume the commitments (including without limitation
its participations in Swing Line Advances and Letters of Credit) under this
Agreement of such Affected Lender. The Affected Lender shall be obligated to
sell its Advances of the Revolving Credit and assign its commitments to such
Purchasing Lender or Purchasing Lenders within fifteen days after receiving
notice from Borrowers requiring it to do so, at an aggregate price equal to the
outstanding principal amount thereof, plus unpaid interest and fees accrued
thereon (excluding any applicable premium) up to but excluding the date of the
sale and any other amounts owed to the Affected Lender under any Loan Document.
In connection with any such sale, and as a condition thereof, Borrowers shall
pay to the Affected Lender all fees accrued for its account hereunder to but
excluding the date of such sale, plus, if demanded by the Affected Lender within
ten Business Days after such sale, (i) the amount of any compensation which
would be due to the Affected Lender under Section 11.1 if the applicable
Borrower has prepaid the outstanding Eurocurrency-based Advances of the Affected
Lender on the date of such sale and (ii) any additional compensation accrued for
its account under Sections 3.4(c), 11.5 and 11.6 to but excluding said date.
Upon such sale, the Purchasing Lender or Purchasing Lenders shall assume the
Affected Lender's commitment, and the Affected Lender shall be released from its
obligations hereunder to a corresponding extent. If any Purchasing Lender is not
already one of the Lenders, the Affected Lender, as assignor, such Purchasing
Lender, as assignee, Holdings and the Agent, shall enter into an Assignment
Agreement pursuant to Section 13.8 hereof, whereupon such Purchasing Lender
shall be a Lender party to this Agreement, shall be deemed to be an assignee
hereunder and shall have all the rights and obligations of a Lender with a
Revolving Credit Percentage equal to its ratable share of the then applicable
Revolving Credit Aggregate Commitment. In connection with any assignment
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pursuant to this Section 11.7, the Borrowers or the Purchasing Lender shall pay
to the Agent the administrative fee for processing such assignment referred to
in Section 13.8.
11.8 Right of Lenders to Fund through Branches and Affiliates. Each Lender
(including without limitation the Swing Line Lender) may, if it so elects,
fulfill its commitment as to any Advance hereunder by designating a branch or
Affiliate of such Lender to make such Advance; provided that (a) such Lender
shall remain solely responsible for the performances of its obligations
hereunder and (b) no such designation shall result in any material increased
costs to the applicable Borrower.
12. AGENT
12.1 Appointment of Agent. Each Lender and the holder of each Note
irrevocably appoints and authorizes the Agent to act on behalf of such Lender or
holder under this Agreement and the other Loan Documents and to exercise such
powers hereunder and thereunder as are specifically delegated to Agent by the
terms hereof and thereof, together with such powers as may be reasonably
incidental thereto, including without limitation the power to execute or
authorize the execution of financing or similar statements or notices, and other
documents. In performing its functions and duties under this Agreement, the
Agent shall act solely as agent of the Lenders and does not assume and shall not
be deemed to have assumed any obligation towards or relationship of agency or
trust with or for Credit Parties. Each Lender agrees (which agreement shall
survive any termination of this Agreement) to reimburse Agent for all reasonable
out-of-pocket expenses (including house and outside attorneys' fees and
disbursements) incurred by Agent hereunder or in connection herewith or with an
Event of Default or in enforcing the obligations of Credit Parties under this
Agreement or the other Loan Documents or any other instrument executed pursuant
hereto, and for which Agent is not reimbursed by Credit Parties, pro rata
according to such Lender's Percentage, but excluding any such expense resulting
from Agent's gross negligence or willful misconduct. Agent shall not be required
to take any action under the Loan Documents, or to prosecute or defend any suit
in respect of the Loan Documents, unless indemnified to its satisfaction by the
Lenders against loss, costs, liability and expense (excluding liability
resulting from its gross negligence or willful misconduct). If any indemnity
furnished to Agent shall become impaired, it may call for additional indemnity
and cease to do the acts indemnified against until such additional indemnity is
given.
12.2 Deposit Account with Agent. Borrowers hereby authorize Agent, in
Agent's sole discretion, upon notice to Borrowers to charge its general deposit
account(s), if any, maintained with Agent for the amount of any principal,
interest, or other amounts or costs due under this Agreement when the same
become due and payable under the terms of this Agreement or the Notes.
12.3 Scope of Agent's Duties. The Agent shall have no duties or
responsibilities except those expressly set forth herein, and shall not, by
reason of this Agreement or otherwise, have a fiduciary relationship with any
Lender (and no implied covenants or other obligations shall be read into this
Agreement against the Agent). None of the Agent, its Affiliates nor any of their
respective directors, officers, employees or agents shall be liable to any
Lender for any action taken or omitted to be taken by it or them under this
Agreement or any document executed pursuant hereto, or in connection herewith or
therewith with the consent or at the request of the Majority Lenders (or all of
the Lenders for those acts requiring consent of all of the Lenders) (except for
its or their own wilful misconduct or gross negligence), nor be responsible for
or have any duties to ascertain, inquire into or verify (a) any recitals or
warranties made by the Credit Parties, or any Subsidiary or Affiliate of the
Credit Parties, or any officer thereof contained herein or therein, (b) the
effectiveness, enforceability, validity or due execution of this Agreement or
any document executed pursuant hereto or any security thereunder, (c) the
performance by Credit Parties of their respective obligations hereunder or
thereunder, or (d) the satisfaction of any condition hereunder or thereunder,
including without limitation the making of any Advance or the
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issuance of any Letter of Credit. The Agent and its Affiliates shall be entitled
to rely upon any certificate, notice, document or other communication (including
any cable, telegraph, facsimile transmission or oral communication) believed by
it to be genuine and correct and to have been sent or given by or on behalf of a
proper person. The Agent may treat the payee of any Note as the holder thereof.
The Agent may employ agents and may consult with legal counsel (who may be
counsel for a Credit Party), independent public accountants and other experts
selected by it and shall not be liable to the Lenders (except as to money or
property received by them or their authorized agents), for the negligence or
misconduct of any such agent selected by it with reasonable care or for any
action taken or omitted to be taken by it in good faith in accordance with the
advice of such counsel, accountants or experts.
12.4 Successor Agent. The Agent may resign as such at any time upon at
least 30 days' prior notice to Credit Parties and all Lenders. If Agent at any
time shall resign or if the office of Agent shall become vacant for any other
reason, the Majority Lenders shall, by written instrument, appoint successor
agent(s) satisfactory to such Majority Lenders, and, so long as no Default or
Event of Default has occurred and is continuing, to Credit Parties. Such
successor agent shall thereupon become the Agent hereunder, as applicable, and
shall be entitled to receive from the prior Agent such documents of transfer and
assignment as such successor Agent may reasonably request. Any such successor
Agent shall be a commercial bank organized under the laws of the United States
or any state thereof and shall have a combined capital and surplus of at least
$500,000,000. If a successor is not so appointed or does not accept such
appointment before the resigning Agent's resignation becomes effective, the
resigning Agent may appoint a temporary successor to act until such appointment
by the Majority Lenders is made and accepted or if no such temporary successor
is appointed as provided above by the resigning Agent, the Majority Lenders
shall thereafter perform all of the duties of the resigning Agent hereunder
until such appointment by the Majority Lenders is made and accepted. Such
successor Agent shall succeed to all of the rights and obligations of the
resigning Agent as if originally named. The resigning Agent shall duly assign,
transfer and deliver to such successor Agent all moneys at the time held by the
resigning Agent hereunder after deducting therefrom its expenses for which it is
entitled to be reimbursed. Upon such succession of any such successor Agent, the
resigning agent shall be discharged from its duties and obligations hereunder in
its capacity as Agent, except for its gross negligence or wilful misconduct
arising prior to its resignation hereunder, and the provisions of this Article
12 shall continue in effect for the benefit of the resigning Agent in respect of
any actions taken or omitted to be taken by it while it was acting as Agent.
12.5 Agent in its Individual Capacity. Comerica Bank, its Affiliates and
their respective successors and assigns, shall have the same rights and powers
hereunder as any other Lender and may exercise or refrain from exercising the
same as though Comerica Bank were not the Agent. Comerica Bank and its
Affiliates may (without having to account therefor to any Lender) accept
deposits from, lend money to, and generally engage in any kind of banking,
trust, financial advisory or other business with Credit Parties (or their
Subsidiaries) as if Comerica Bank were not acting as Agent hereunder, and may
accept fees and other consideration therefor without having to account for the
same to the Lenders.
12.6 Credit Decisions. Each Lender acknowledges that it has, independently
of Agent and each other Lender and based on the financial statements of Credit
Parties and such other documents, information and investigations as it has
deemed appropriate, made its own credit decision to extend credit hereunder from
time to time. Each Lender also acknowledges that it will, independently of Agent
and each other Lender and based on such other documents, information and
investigations as it shall deem appropriate at any time, continue to make its
own credit decisions as to exercising or not exercising from time to time any
rights and privileges available to it under this Agreement or any document
executed pursuant hereto.
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12.7 Authority of Agent to Enforce This Agreement. Each Lender, subject to
the terms and conditions of this Agreement, authorizes the Agent with full power
and authority as attorney-in-fact to institute and maintain actions, suits or
proceedings for the collection and enforcement of any Indebtedness outstanding
under this Agreement or any other Loan Document and to file such proofs of debt
or other documents as may be necessary to have the claims of the Lenders allowed
in any proceeding relative to Credit Parties, or any of their Subsidiaries, or
their respective creditors or affecting their respective properties, and to take
such other actions which Agent considers to be necessary or desirable for the
protection, collection and enforcement of the Notes, this Agreement or the other
Loan Documents.
12.8 Indemnification. The Lenders agree to indemnify the Agent and its
Affiliates (to the extent not reimbursed by Credit Parties, but without limiting
any obligation of Credit Parties to make such reimbursement), ratably according
to their respective Percentages, from and against any and all claims, damages,
losses, liabilities, costs or expenses of any kind or nature whatsoever
(including, without limitation, fees and disbursements of counsel) which may be
imposed on, incurred by, or asserted against the Agent and its Affiliates in any
way relating to or arising out of this Agreement, any of the other Loan
Documents or the transactions contemplated hereby or any action taken or omitted
by the Agent and its Affiliates under this Agreement or any of the Loan
Documents; provided, however, that no Lender shall be liable for any portion of
such claims, damages, losses, liabilities, costs or expenses resulting from the
Agent's or its Affiliates' gross negligence or willful misconduct. Without
limitation of the foregoing, each Lender agrees to reimburse the Agent and its
Affiliates promptly upon demand for its ratable share of any out-of-pocket
expenses (including, without limitation, fees and expenses of counsel) incurred
by the Agent and its Affiliates in connection with the preparation, execution,
delivery, administration, modification, amendment or enforcement (whether
through negotiations, legal proceedings or otherwise) of, or legal advice in
respect of rights or responsibilities under, this Agreement or any of the other
Loan Documents, to the extent that the Agent and its Affiliates are not
reimbursed for such expenses by Credit Parties, but without limiting the
obligation of Credit Parties to make such reimbursement. Each Lender agrees to
reimburse the Agent and its Affiliates promptly upon demand for its ratable
share of any amounts owing to the Agent and its Affiliates by the Lenders
pursuant to this Section, provided that, if the Agent and its Affiliates are
subsequently reimbursed by the Credit Parties for such amounts, it shall refund
to the Lenders on a pro rata basis the amount of any excess reimbursement. If
the indemnity furnished to the Agent and its Affiliates under this Section
shall, in the judgment of the Agent, be insufficient or become impaired, the
Agent may call for additional indemnity from the Lenders and cease, or not
commence, to take any action until such additional indemnity is furnished. Any
amounts paid by the Lenders hereunder to the Agent and its Affiliates shall be
deemed to constitute part of the Indebtedness hereunder.
12.9 Knowledge of Default. It is expressly understood and agreed that the
Agent shall be entitled to assume that no Event of Default has occurred and is
continuing, unless the officers of the Agent immediately responsible for matters
concerning this Agreement shall have been notified in a writing specifying such
Event of Default and stating that such notice is a "notice of default" by a
Lender or by Credit Parties. Upon receiving such a notice, the Agent shall
promptly notify each Lender of such Event of Default and provide each Lender
with a copy of such notice and, shall endeavor to provide such notice to the
Lenders within three (3) Business Days (but without any liability whatsoever in
the event of its failure to do so). Agent shall also furnish the Lenders,
promptly upon receipt, with copies of all other notices or other information
required to be provided by Credit Parties hereunder.
12.10 Agent's Authorization; Action by Lenders. Except as otherwise
expressly provided herein, whenever the Agent is authorized and empowered
hereunder on behalf of the Lenders to give any approval or consent, or to make
any request, or to take any other action on behalf of the Lenders (including
without limitation the exercise of any right or remedy hereunder or under the
other Loan Documents), the Agent shall be required to give such approval or
consent, or to make such request or to
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take such other action only when so requested in writing by the Majority Lenders
or the Lenders, as applicable hereunder. Action that may be taken by Majority
Lenders or all of the Lenders, as the case may be (as provided for hereunder)
may be taken (i) pursuant to a vote at a meeting (which may be held by telephone
conference call) as to which all of the Lenders have been given reasonable
advance notice, or (ii) pursuant to the written consent of the requisite
Percentages of the Lenders as required hereunder, provided that all of the
Lenders are given reasonable advance notice of the requests for such consent.
12.11 Enforcement Actions by the Agent. Except as otherwise expressly
provided under this Agreement or in any of the other Loan Documents and subject
to the terms hereof, the Agent will take such action, assert such rights and
pursue such remedies under this Agreement and the other Loan Documents as the
Majority Lenders or all of the Lenders, as the case may be (as provided for
hereunder), shall direct; provided, however, that the Agent shall not be
required to act or omit to act if, in the judgment of the Agent, such action or
omission may expose the Agent to personal liability or is contrary to this
Agreement, any of the Loan Documents or applicable law. Except as expressly
provided above or elsewhere in this Agreement or the other Loan Documents, no
Lender (other than the Agent, acting in its capacity as agent) shall be entitled
to take any enforcement action of any kind under any of the Loan Documents.
12.12 Collateral Matters; Real Estate Lien Release Event.
(a) The Agent is authorized on behalf of all the Lenders, without
the necessity of any notice to or further consent from the Lenders, from
time to time to take any action with respect to any Collateral or the
Collateral Documents which may be necessary to perfect and maintain a
perfected security interest in and Liens upon the Collateral granted
pursuant to the Loan Documents.
(b) The Lenders agree to release, and hereby irrevocably authorize
the Agent to release, at its option and in its discretion, any Lien
granted to or held by the Agent upon any Collateral (i) upon termination
of the Revolving Credit Aggregate Commitment and payment in full of all
Indebtedness (including Letter of Credit Obligations) payable under this
Agreement and under any other Loan Document; (ii) constituting property
sold or to be sold or disposed of as part of or in connection with any
disposition permitted hereunder and with respect to which all the
requirements of this Agreement have been satisfied; (iii) pursuant to
Sections 13.23 and 13.25; or (iv) if approved, authorized or ratified in
writing by the Majority Lenders, or all the Lenders, as the case may be,
as provided in Section 13.11. Upon request by the Agent at any time, the
Lenders will confirm in writing the Agent's authority to release
particular types or items of Collateral pursuant to this Section 12.12(b).
(c) The Lenders agree to release, and hereby irrevocably authorize
the Agent to release any Lien granted to or held by the Agent upon the
real estate owned by Holdings, the Credit Parties or their Subsidiaries
(each such release being a "Real Estate Lien Release"), provided that the
following conditions are satisfied prior to each such release: (i) written
evidence shall be provided to the Agent that the Senior Secured Debt Ratio
and the Leverage Ratio for the fiscal quarter most recently ended are each
no less than 0.50:1.00 below the levels then required pursuant to Sections
7.10 and 7.11 of this Agreement, (ii) a new Borrowing Base Certificate
shall be executed and delivered to Agent, dated as of the date of such
Real Estate Lien Release, which shall eliminate Eligible Real Estate to be
released from the calculation of the Borrowing Base, (iii) Borrowers shall
have at least $25,000,000 availability under the Revolving Credit both
immediately before and immediately after such Real Estate Lien Release,
such availability to be calculated using the new Borrowing Base
Certificate delivered pursuant to subsection (ii) hereof, (iv) Credit
Parties shall have delivered the Permitted Real Estate Debt Documents to
the Agent,
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which shall be in form and substance acceptable to Agent and shall
otherwise satisfy the requirements of this Agreement, (v) the Permitted
Real Estate Debt shall be incurred concurrently with or immediately
following such Real Estate Lien Release, (vi) no Default or Event of
Default shall have occurred and be continuing at the time of such Real
Estate Lien Release, or be reasonably expected to result from such Real
Estate Lien Release and (vii) Agent shall have received pro-forma
calculations of the Debt Service Coverage Ratio and the Interest Coverage
Ratio for the four fiscal quarter period most recently ended, calculated
as if the applicable Permitted Real Estate Debt was outstanding for the
entirety of such four quarter period and evidencing compliance with the
ratio levels set forth in Section 7.9 and Section 7.12A, respectively, for
the period then ending.
In no event shall more than three (3) Real Estate Lien Releases take
place, unless otherwise consented to in writing by the Majority Lenders and the
Agent.
12.13 Agent's Fees. Until the Indebtedness has been repaid and discharged
in full and no commitment to fund any loan hereunder is outstanding, Borrowers
shall pay to the Agent, as applicable, the agency fees set forth (or to be set
forth from time to time) in the Fee Letter with the Agent. Such fees shall not
be refundable under any circumstances.
12.14 No Duties Imposed on Documentation Agents or Syndications Agents.
Standard Federal Bank N.A. and Bank of Montreal have been designated as
Documentation Agents and Fleet National Bank and JPMorgan Chase Bank N.A. have
been designated as Syndication Agents under this Agreement. In such capacity,
Standard Federal Bank N.A., Bank of Montreal, Fleet National Bank and JPMorgan
Chase Bank, N.A. shall have no duties, responsibilities or other obligations and
other than their rights and remedies as Lenders hereunder, and shall have no
administrative, collateral or other rights or responsibilities, duties or other
obligations, but shall be entitled to the benefits of Section 12.5 and 12.6.
Each Lender acknowledges that is has not relied, and will not rely, on the
Lenders named as Documentation Agents or Syndication Agents in deciding to enter
into this Agreement or in taking or not taking action hereunder.
13. MISCELLANEOUS
13.1 Accounting Principles. Where the character or amount of any asset or
liability or item of income or expense is required to be determined or any
consolidation or other accounting computation is required to be made for the
purposes of this Agreement, it shall be done, unless otherwise specified herein,
in accordance with GAAP. Furthermore, all financial statements required to be
delivered hereunder, subject to year-end audit adjustments thereto and the
omission of footnote disclosure in the case of unaudited statements, shall be
prepared in accordance with GAAP.
13.2 Consent to Jurisdiction. Credit Parties, the Agent and the Lenders
hereby irrevocably submit to the non-exclusive jurisdiction of any United States
Federal Court or Michigan state court sitting in Detroit, Michigan in any action
or proceeding arising out of or relating to this Agreement or any of the Loan
Documents and Credit Parties, Agent and Lenders hereby irrevocably agree that
all claims in respect of such action or proceeding may be heard and determined
in any such United States Federal Court or Michigan state court. Credit Parties
irrevocably consent to the service of any and all process in any such action or
proceeding brought in any court in or of the State of Michigan by the delivery
of copies of such process to Credit Parties at their respective addresses
specified on the signature page hereto or by certified mail directed to such
address or such other address as may be designated by Credit Parties in a notice
to the other parties that complies as to delivery with the terms of Section
13.6. Nothing in this Section shall affect the right of the Lenders and the
Agent to serve process in any other manner permitted by law or limit the right
of the Lenders or the Agent (or any of them) to bring any such action or
proceeding against
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Credit Parties or any Subsidiary or any of its or their property in the courts
with subject matter jurisdiction of any other jurisdiction. Credit Parties
hereby irrevocably waive any objection to the laying of venue of any such suit
or proceeding in the above described courts.
13.3 Law of Michigan. This Agreement and the Notes have been delivered at
Detroit, Michigan, and shall be governed by and construed and enforced in
accordance with the laws of the State of Michigan (without regard to its
conflict of laws provisions). Whenever possible each provision of this Agreement
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement shall be prohibited by or
invalid under applicable law, such provision shall be ineffective to the extent
of such prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Agreement.
13.4 Interest. In the event the obligation of the Borrowers to pay
interest on the principal balance of Advances under the Revolving Credit is or
becomes in excess of the maximum interest rate which the Borrowers are permitted
by law to contract or agree to pay, giving due consideration to the execution
date of this Agreement, then, in that event, the rate of interest applicable
with respect to the Lenders' Percentages shall be deemed to be immediately
reduced to such maximum rate and all previous payments in excess of the maximum
rate shall be deemed to have been payments in reduction of principal and not of
interest.
13.5 Closing Costs and Other Costs; Indemnification.
(a) Credit Parties agree to pay, or reimburse the Agent (and in the
case of (ii) and (iii) below, the Lenders) for payment of, on demand (i)
all reasonable closing costs and expenses, including, by way of
description and not limitation, house and outside attorney fees and
advances, appraisal and accounting fees, and Lien search fees incurred by
Agent in connection with the commitment, consummation and closing of the
loans contemplated hereby or in connection with the administration of this
Agreement or any amendment, refinancing or restructuring of the credit
arrangements provided under this Agreement, (ii) all stamp and other taxes
and fees payable or determined to be payable in connection with the
execution, delivery, filing, recording or amendment of this Agreement and
the Loan Documents and the consummation of the transactions contemplated
hereby, and any and all liabilities with respect to or resulting from any
delay in paying or omitting to pay such taxes or fees, (iii) all
reasonable costs and expenses of the Agent or any of the Lenders
(including reasonable fees and expenses of outside counsel (but without
duplication of fees and expenses for the same services) in connection with
any action or proceeding relating to a court order, injunction or other
process or decree restraining or seeking to restrain the Agent or any of
the Lenders from paying any amount under, or otherwise relating in any way
to, any Letter of Credit and any and all costs and expenses which any of
them may incur relative to any payment under any Letter of Credit and (iv)
all real estate appraisal fees for real estate appraisals ordered by
Agent, such appraisals to be ordered at Agent's option and in its
reasonable discretion. At Agent's option, all of said amounts required to
be paid by Borrowers, if not paid when due, may be charged by Agent as a
Prime-based Advance to Borrowers against the Indebtedness of Borrowers.
(b) Credit Parties agree to indemnify and save Agent and each of the
Lenders harmless from all loss, cost, damage, liability or expenses,
including reasonable house and outside attorneys' fees and disbursements
(but without duplication of fees and expenses for the same services),
incurred by Agent and the Lenders by reason of an Event of Default, or
enforcing the obligations of Credit Parties or any Subsidiary under this
Agreement or any of the other Loan Documents or in the prosecution or
defense of any action or proceeding concerning any matter growing out of
or connected with this Agreement or any of the Loan Documents, excluding,
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however, any loss, cost, damage, liability or expenses arising solely as a
result of the gross negligence or willful misconduct of the party seeking
to be indemnified under this Section 13.5(b).
(c) Credit Parties agree to defend, indemnify and hold harmless
Agent and each of the Lenders, and their respective employees, agents,
officers and directors from and against any and all claims, demands,
penalties, fines, liabilities, settlements, damages, costs or expenses of
whatever kind or nature arising out of or related to (i) the presence,
disposal, use, release or threatened release of any Hazardous Materials
on, from or affecting any premises owned or occupied by Credit Parties or
any of their respective Subsidiaries, (ii) any personal injury (including
wrongful death) or property damage (real or personal) arising out of or
related to such Hazardous Materials, (iii) any lawsuit or other proceeding
brought or threatened, settlement reached or governmental order or decree
relating to such Hazardous Materials, (iv) the cost of removal,
remediation or monitoring of all Hazardous Materials from all or any
portion of any premises owned by Credit Parties or their respective
Subsidiaries, (v) the taking of necessary precautions to protect against
the release of Hazardous Materials on or affecting any premises owned by
Credit Parties or any of their respective Subsidiaries, (vi) complying
with all Hazardous Material Laws and/or (vii) any violation of Hazardous
Material Laws, including without limitation, reasonable attorneys and
consultants fees, investigation and laboratory fees, environmental studies
required by Agent or any Lender in connection with the violation of
Hazardous Material Laws (whether before or after the occurrence of any
Default or Event of Default hereunder), court costs and litigation
expenses, excluding however, any such matter arising as a result of its or
their gross negligence or willful misconduct. The obligations of Credit
Parties under this Section 13.5(c) shall be in addition to any and all
other obligations and liabilities the Credit Parties may have to Agent or
any of the Lenders at common law or pursuant to any other agreement.
13.6 Notices; Patriot Act Notice. (a) Except as expressly provided
otherwise in this Agreement, all notices and other communications provided to
any party hereto under this Agreement or any other Loan Document shall be in
writing and shall be given by personal delivery, by mail, by reputable overnight
courier, by facsimile and addressed or delivered to it at its address set forth
on Schedule 13.6 or at such other address as may be designated by such party in
a notice to the other parties that complies as to delivery with the terms of
this Section 13.6. Any notice, if personally delivered or if mailed and properly
addressed with postage prepaid and sent by registered or certified mail, shall
be deemed given when received or when delivery is refused; any notice, if given
to a reputable overnight courier and properly addressed, shall be deemed given
two (2) Business Days after the date on which it was sent, unless it is actually
received sooner by the named addressee; and any notice, if transmitted by
facsimile, shall be deemed given when received and receipt confirmed. Agent may,
but, except as specifically provided herein, shall not be required to, take any
action on the basis of any notice given to it by telephone, but the giver of any
such notice shall promptly confirm such notice in writing or by facsimile, and
such notice will not be deemed to have been received until such confirmation is
deemed received in accordance with the provisions of this Section set forth
above. If such telephonic notice conflicts with any such confirmation, the terms
of such telephonic notice shall control. Any notice given by the Agent or any
Lender to Holdings or any of its Subsidiaries shall be deemed to be a notice to
Holdings and all of its Subsidiaries and (b) pursuant to Section 326 of the
Patriot Act, the Agent and the Lenders hereby notify the Credit Parties that if
they or any of their Subsidiaries open an account, including any loan, deposit
account, treasury management account, or other extension of credit with Agent or
any Lender, the Agent or the applicable Lender will request the applicable
Person's name, tax identification number, business address and other information
necessary to identify such Person (and may request such Person's organizational
documents or other identifying documents) to the extent necessary for the Agent
and the applicable Lender to comply with the Patriot Act.
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13.7 Further Action. Credit Parties, from time to time, upon written
request of Agent will make, execute, acknowledge and deliver or cause to be
made, executed, acknowledged and delivered, all such further and additional
instruments, and take all such further action as may reasonably be required to
carry out the intent and purpose of this Agreement or the Loan Documents, and to
provide for Advances under and payment of the Notes, according to the intent and
purpose herein and therein expressed.
13.8 Successors and Assigns; Participations; Assignments.
(a) This Agreement shall be binding upon and shall inure to the
benefit of Credit Parties and the Lenders and their respective successors
and assigns.
(b) The foregoing shall not authorize any assignment by the Credit
Parties of their rights or duties hereunder, and, except as otherwise
provided herein, no such assignment shall be made (or effective) without
the prior written approval of all of the Lenders.
(c) The Credit Parties and Agent acknowledge that each of the
Lenders may at any time and from time to time, subject to the terms and
conditions hereof, assign or grant participations in such Lender's rights
and obligations hereunder (on a pro rata basis only) and under the other
Loan Documents to any Eligible Assignee, the identity of which institution
is approved by Borrowers and Agent, such approval not to be unreasonably
withheld or delayed; provided, however, that (i) the approval of Borrowers
shall not be required upon the occurrence and during the continuance of a
Default, and (ii) the approval of Borrowers and Agent shall not be
required for any such sale, transfer, assignment or participation to any
Affiliate of an assigning Lender, any other Lender or any Federal Reserve
Bank. The Credit Parties authorize each Lender to disclose to any
prospective assignee or participant, once approved by Credit Parties and
Agent, any and all financial information in such Lender's possession
concerning the Credit Parties which has been delivered to such Lender
pursuant to this Agreement, provided that each such prospective
participant shall execute a confidentiality agreement consistent with the
terms of Section 13.12 hereof.
(d) Each assignment by a Lender of all or any portion of its rights
and obligations hereunder and under the other Loan Documents, which
assignments shall be on a pro rata basis only (but only if additional loan
facilities are added to this Agreement), shall be made pursuant to an
Assignment Agreement substantially (as determined by Agent) in the form
attached hereto as Exhibit H (with appropriate insertions acceptable to
Agent) (provided however that such Lender need not deliver an Assignment
Agreement in connection with assignments to such Lender's Affiliates or to
a Federal Reserve Lender) and shall be subject to the terms and conditions
hereof, and to the following restrictions:
(i) each assignment shall be in a minimum amount of the lesser
of (x) Five Million Dollars ($5,000,000) or such lesser amount as
the Agent shall agree and (y) the entire remaining amount of
assigning Lender's aggregate interest in the Revolving Credit (and
participations in any outstanding Letters of Credit); provided
however that, after giving effect to such assignment, in no event
shall the entire remaining amount (if any) of assigning Lender's
aggregate interest in the Revolving Credit (and participations in
any outstanding Letters of Credit) be less than Five Million Dollars
($5,000,000); and
(ii) no assignment shall be effective unless Agent has
received from the assignee (or from the assigning Lender) an
assignment fee of $3,500 for each such assignment and such
assignment is accompanied by the relevant tax forms required under
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Section 13.13, provided that the foregoing shall not apply with
regards to Affiliates of the applicable Lender.
In connection with any assignment, Borrowers and Agent shall be entitled
to continue to deal solely and directly with the assigning Lender in connection
with the interest so assigned until (x) the Agent shall have received a notice
of assignment duly executed by the assigning Lender and an Assignment Agreement
(with respect thereto) duly executed by the assigning Lender and each assignee;
and (y) the assigning Lender shall have delivered to the Agent the original of
each Note, if any, held by the assigning Lender under this Agreement. From and
after the date on which the Agent shall notify Borrowers and the assigning
Lender that the foregoing conditions shall have been satisfied and all consents
(if any) required shall have been given, the assignee thereunder shall be deemed
to be a party to this Agreement. To the extent that rights and obligations
hereunder shall have been assigned to such assignee as provided in such notice
of assignment (and Assignment Agreement), such assignee shall have the rights
and obligations of a Lender under this Agreement and the other Loan Documents
(including without limitation the right to receive fees payable hereunder in
respect of the period following such assignment). In addition, the assigning
Lender, to the extent that rights and obligations hereunder shall have been
assigned by it as provided in such notice of assignment (and Assignment
Agreement), but not otherwise, shall relinquish its rights and be released from
its obligations under this Agreement and the other Loan Documents.
Within five (5) Business Days following Borrowers' receipt of notice from
the Agent that Agent has accepted and executed a notice of assignment and the
duly executed Assignment Agreement and assuming the Borrowers have consented to
such assignment (if their consent is required), Borrowers shall, to the extent
applicable, execute and deliver to the Agent in exchange for any surrendered
Note, new Note(s) payable to the order of the assignee in an amount equal to the
amount assigned to it pursuant to such notice of assignment (and Assignment
Agreement), and with respect to the portion of the Indebtedness retained by the
assigning Lender, to the extent applicable, new Note(s) payable to the order of
the assigning Lender in an amount equal to the amount retained by such Lender
hereunder. Agent, the Lenders and the Borrowers acknowledge and agree that any
such new Note(s) shall be given in renewal and replacement of the surrendered
Notes and shall not effect or constitute a novation or discharge of the
Indebtedness evidenced by any surrendered Note, and each such new Note may
contain a provision confirming such agreement. In addition, promptly following
receipt of such Notes, Agent shall make a notation on its records showing the
applicable new Percentages of the Lenders (including the assignee Lender)
following such assignment.
(e) Each Lender agrees that any participation agreement permitted
hereunder shall comply with all applicable laws and shall be subject to
the following restrictions (which shall be set forth in the applicable
Participation Agreement):
(i) such Lender shall remain the holder of its Notes (if
issued) hereunder, notwithstanding any such participation;
(ii) except as expressly set forth in this Section 13.8(e)
with respect to rights of setoff and the benefits of Section 11
hereof, a participant shall have no direct rights or remedies
hereunder;
(iii) a participant shall not reassign or transfer, or grant
any sub-participations in its participation interest hereunder or
any part thereof; and
(iv) such Lender shall retain the sole right and
responsibility to enforce the obligations of the Credit Parties and
their Subsidiaries relating to the Notes, if applicable
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and the other Loan Documents, including, without limitation, the
right to proceed against any Guaranties, or cause Agent to do so
(subject to the terms and conditions hereof), and the right to
approve any amendment, modification or waiver of any provision of
this Agreement without the consent of the participant (other than a
participant which is an Affiliate of such Lender), except for those
matters covered by Section 13.11(a) through (e) and (h) hereof
(provided that a participant may exercise approval rights over such
matters only on an indirect basis, acting through such Lender, and
Credit Parties, Agent and the other Lenders may continue to deal
directly with such Lender in connection with such Lender's rights
and duties hereunder).
Borrowers agree that each participant shall be deemed to have the right of
setoff under Section 9.6 hereof in respect of its participation interest in
amounts owing under this Agreement and the other Loan Documents to the same
extent as if the Indebtedness were owing directly to it as a Lender under this
Agreement, shall be subject to the pro rata recovery provisions of Section 11.3
hereof and shall be entitled to the benefits of Section 11 hereof, provided that
no participant shall be entitled to receive any greater amount pursuant to such
Sections than the issuing Lender would have been entitled to receive in respect
of the amount of the participation transferred by such issuing Lender to such
participant had no such transfer occurred. The amount, terms and conditions of
any participation shall be as set forth in the participation agreement between
the issuing Lender and the Person purchasing such participation, and none of the
Credit Parties, the Agent and the other Lenders shall have any responsibility or
obligation with respect thereto, or to any Person to whom any such participation
may be issued. No such participation shall relieve any issuing Lender of any of
its obligations under this Agreement or any of the other Loan Documents, and all
actions hereunder shall be conducted as if no such participation had been
granted.
(f) The Agent shall maintain at its principal office a copy of each
Assignment Agreement delivered to it and a register (the "Register") for
the recordation of the names and addresses of the Lenders, the Percentages
of such Lenders and the principal amount of each type of Advance owing to
each such Lender from time to time. The entries in the Register shall be
conclusive evidence, absent manifest error, and the Credit Parties, the
Agent, and the Lenders may treat each Person whose name is recorded in the
Register as the owner of the Advances recorded therein for all purposes of
this Agreement. The Register shall be available for inspection by the any
of the Credit Parties or any Lender upon reasonable notice to the Agent
and a copy of such information shall be provided to any such party on
their prior written request. The Agent shall give prompt written notice to
Holdings of the making of any entry in the Register or any change in such
entry.
(g) Nothing in this Agreement, the Notes or the other Loan
Documents, expressed or implied, is intended to or shall confer on any
Person other than the respective parties hereto and thereto and their
successors and assignees and participants permitted hereunder and
thereunder any benefit or any legal or equitable right, remedy or other
claim under this Agreement, the Notes or the other Loan Documents.
13.9 Indulgence. No delay or failure of Agent and the Lenders in
exercising any right, power or privilege hereunder shall affect such right,
power or privilege nor shall any single or partial exercise thereof preclude any
further exercise thereof, nor the exercise of any other right, power or
privilege. The rights of Agent and the Lenders hereunder are cumulative and are
not exclusive of any rights or remedies which Agent and the Lenders would
otherwise have.
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13.10 Counterparts. This Agreement may be executed in several
counterparts, and each executed copy shall constitute an original instrument,
but such counterparts shall together constitute but one and the same instrument.
13.11 Amendment and Waiver. No amendment or waiver of any provision of
this Agreement or any other Loan Document, nor consent to any departure by the
Credit Parties or any Subsidiary therefrom, shall in any event be effective
unless the same shall be in writing and signed by the Majority Lenders (or by
the Agent at the written request of the Majority Lenders) or, if this Agreement
expressly so requires with respect to the subject matter thereof, by all Lenders
(and, with respect to any amendments to this Agreement or the other Loan
Documents, by Credit Parties or the Subsidiaries which are signatories thereto),
and then such waiver or consent shall be effective only in the specific instance
and for the specific purpose for which given; provided, however, that no
amendment, waiver or consent shall, unless in writing and signed by all the
Lenders, do any of the following: (a) increase any Lender's commitments
hereunder, (b) waive, forgive defer or reduce the principal of, or interest on,
any outstanding Indebtedness or any Fees or other amounts payable hereunder, (c)
postpone any date fixed for any payment of principal of, or interest on, any
outstanding Indebtedness or any Fees or other amounts payable hereunder, (d)
waive any Event of Default specified in Sections 9.1(a) or (b) hereof, (e)
except as expressly permitted hereunder, or under the Collateral Documents,
release, subordinate or defer the granting or perfecting of a Lien or security
interest in any material portion of the Collateral (as determined by Agent in
its sole discretion) or release, subordinate or make less restrictive any
guaranty or similar undertaking provided by any Person except as shall be
otherwise expressly permitted in this Agreement or any other Loan Document (it
being stated that any sale or other transfer which any Credit Party or
Subsidiary is permitted to make pursuant to or under the terms of this Agreement
shall be deemed "expressly permitted"), (f) terminate or modify any indemnity
provided to the Lenders hereunder or under the other Loan Documents, except as
shall be otherwise expressly provided in this Agreement or any other Loan
Document, (g) take any action which requires the approval or consent of all
Lenders pursuant to the terms of this Agreement or any other Loan Document, (h)
change the definitions of "Percentage", "Interest Period"," Majority Lenders", "
Borrower," "Borrowing Base," or Section 10.3 or this Section 13.11, or (i) amend
Section 7.20 or consent to any departure therefrom by the Loan Parties; and
provided further, that no amendment, waiver or consent shall, unless in writing
signed by the Swing Line Lender, do any of the following: (x) reduce the
principal of, or interest on, the Swing Line Note or (y) postpone any date fixed
for any payment of principal of, or interest on, the Swing Line Note; and
provided further, however, that no amendment, waiver, or consent shall, unless
in writing and signed by the Agent in addition to all the Lenders, affect
benefits (including without limitation economic benefits) available to such of
the Lender or the Agent, as the case may be, under this Agreement or any of the
other Loan Documents, or under or in connection with any transactions not
related to the transactions contemplated hereby.
13.12 Confidentiality. Each Lender agrees that it will not disclose
without the prior consent of Borrowers (other than to its employees, its
Subsidiaries, another Lender, an Affiliate of a Lender or to its auditors or
counsel) any information with respect to Borrowers, which is furnished pursuant
to this Agreement or any of the other Loan Documents; provided that any Lender
may disclose any such information (a) as has become generally available to the
public or has been lawfully obtained by such Lender from any third party under
no duty of confidentiality to Borrowers, (b) as may be required or appropriate
in any report, statement or testimony submitted to, or in respect to any
inquiry, by, any municipal, state or federal regulatory body having or claiming
to have jurisdiction over such Lender, including the Board of Governors of the
Federal Reserve System of the United States, the Office of the Comptroller of
the Currency or the Federal Deposit Insurance Corporation or similar
organizations (whether in the United States or elsewhere) or their successors,
(c) as may be required or appropriate in respect to any summons or subpoena or
in connection with any litigation (provided that each Lender agrees that if it
is served with a subpoena or other legal process requiring disclosure of any
confidential
84
information concerning any Borrower, it will promptly notify such Borrower and
provide to such Borrower copies of such summons or subpoena), (d) in order to
comply with any law, order, regulation or ruling applicable to such Lender, and
(e) to any permitted transferee or assignee or to any approved participant of,
or with respect to, the Notes, as aforesaid.
13.13 Withholding Taxes. If any Lender is not a United States person
within the meaning of Section 7701(a)(30) of the Internal Revenue Code, such
Lender shall promptly (but in any event prior to the initial payment of interest
hereunder) deliver to the Agent two executed copies of (i) Internal Revenue
Service Form W-8BEN (or any successor form) specifying the applicable tax treaty
between the United States and the jurisdiction of such Lender's domicile which
provides for the exemption from withholding on interest payments to such Lender,
(ii) Internal Revenue Service Form W8ECI (or any successor form) evidencing that
the income to be received by such Lender hereunder is effectively connected with
the conduct of a trade or business in the United States or (iii) other evidence
satisfactory to the Agent that such Lender is exempt from United States income
tax withholding with respect to such income. Such Lender shall amend or
supplement any such form or evidence as required to insure that it is accurate,
complete and non-misleading at all times. Promptly upon notice from the Agent of
any determination by the Internal Revenue Service that any payments previously
made to such Lender hereunder were subject to United States income tax
withholding when made, such Lender shall pay to the Agent the excess of the
aggregate amount required to be withheld from such payments over the aggregate
amount actually withheld by the Agent. In addition, from time to time upon the
reasonable request and at the sole expense of the Borrowers, each Lender and the
Agent shall (to the extent it is able to do so based upon applicable facts and
circumstances), complete and provide the Borrowers with such forms, certificates
or other documents as may be reasonably necessary to allow the Borrowers, as
applicable, to make any payment under this Agreement or the other Loan Documents
without any withholding for or on the account of any tax under Section 10.1(d)
hereof (or with such withholding at a reduced rate), provided that the execution
and delivery of such forms, certificates or other documents does not adversely
affect or otherwise restrict the right and benefits (including without
limitation economic benefits) available to such of the Lender or the Agent, as
the case may be, under this Agreement or any of the other Loan Documents, or
under or in connection with any transactions not related to the transactions
contemplated hereby.
13.14 Taxes and Fees. Should any tax (other than as a result of a Lender's
failure to comply with Section 13.13 or a tax based upon the net income or
capitalization of any Lender or the Agent by any jurisdiction where a Lender or
Agent is located), recording or filing fee become payable in respect of this
Agreement or any of the other Loan Documents or any amendment, modification or
supplement hereof or thereof, the Borrowers agree to pay the same, together with
any interest or penalties thereon arising from the Borrowers' act or omission,
and agrees to hold the Agent and the Lenders harmless with respect thereto.
Notwithstanding the foregoing, nothing contained in this Section 13.14 shall
affect or reduce the rights of any Lender or the Agent under Section 11.5
hereof.
13.15 WAIVER OF JURY TRIAL. THE LENDERS, THE AGENT AND THE CREDIT PARTIES
AFTER CONSULTING OR HAVING HAD THE OPPORTUNITY TO CONSULT WITH COUNSEL,
KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHT ANY OF THEM MAY HAVE TO
A TRIAL BY JURY IN ANY LITIGATION BASED UPON OR ARISING OUT OF THIS AGREEMENT OR
ANY RELATED INSTRUMENT OR AGREEMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED BY
THIS AGREEMENT OR ANY COURSE OF CONDUCT, DEALING, STATEMENTS (WHETHER ORAL OR
WRITTEN) OR ACTION OF ANY OF THEM. NEITHER THE LENDERS, THE AGENT, NOR THE
CREDIT PARTIES SHALL SEEK TO CONSOLIDATE, BY COUNTERCLAIM OR OTHERWISE, ANY SUCH
ACTION IN WHICH A JURY TRIAL HAS BEEN WAIVED WITH ANY OTHER ACTION IN WHICH A
JURY TRIAL CANNOT BE OR HAS NOT BEEN WAIVED. THESE PROVISIONS SHALL NOT BE
DEEMED TO HAVE BEEN MODIFIED IN ANY RESPECT OR RELINQUISHED BY THE LENDERS AND
THE
85
AGENT OR THE CREDIT PARTIES EXCEPT BY A WRITTEN INSTRUMENT EXECUTED BY ALL OF
THEM.
13.16 Complete Agreement; Conflicts. This Agreement, the Notes (if
issued), any Requests for Revolving Credit Advance and Requests for Swing Line
Advance hereunder, and the Loan Documents contain the entire agreement of the
parties hereto, superseding all prior agreements, discussions and understandings
relating to the subject matter hereof, and none of the parties shall be bound by
anything not expressed in writing. In the event of any conflict between the
terms of this Agreement and the other Loan Documents, this Agreement shall
govern.
13.17 Severability. In case any one or more of the obligations of the
Credit Parties under this Agreement, the Notes or any of the other Loan
Documents shall be invalid, illegal or unenforceable in any jurisdiction, the
validity, legality and enforceability of the remaining obligations of the Credit
Parties shall not in any way be affected or impaired thereby, and such
invalidity, illegality or unenforceability in one jurisdiction shall not affect
the validity, legality or enforceability of the obligations of Credit Parties
under this Agreement, the Notes or any of the other Loan Documents in any other
jurisdiction.
13.18 Table of Contents and Headings. The table of contents and the
headings of the various subdivisions hereof are for convenience of reference
only and shall in no way modify or affect any of the terms or provisions hereof.
13.19 Construction of Certain Provisions. If any provision of this
Agreement or any of the Loan Documents refers to any action to be taken by any
Person, or which such Person is prohibited from taking, such provision shall be
applicable whether such action is taken directly or indirectly by such Person,
whether or not expressly specified in such provision.
13.20 Independence of Covenants. Each covenant hereunder shall be given
independent effect (subject to any exceptions stated in such covenant) so that
if a particular action or condition is not permitted by any such covenant
(taking into account any such stated exception), the fact that it would be
permitted by an exception to, or would be otherwise within the limitations of,
another covenant shall not avoid the occurrence of a Default or an Event of
Default.
13.21 Reliance on and Survival of Various Provisions. All terms,
covenants, agreements, representations and warranties of Credit Parties or any
party to any of the Loan Documents made herein or in any of the Loan Documents
or in any certificate, report, financial statement or other document furnished
by or on behalf of the Credit Parties or any Subsidiary in connection with this
Agreement or any of the Loan Documents shall be deemed to have been relied upon
by the Lenders, notwithstanding any investigation heretofore or hereafter made
by any Lenders or on such Lenders' behalf, and those covenants and agreements of
the Credit Parties set forth in Section 11.6 hereof (together with any other
indemnities of the Credit Parties or any Subsidiary contained elsewhere in this
Agreement or in any of the other Loan Documents) and of Lenders set forth in
Section 12.8 hereof shall survive the repayment in full of the Indebtedness and
the termination of the Revolving Credit Aggregate Commitment.
13.22 Complete Agreement; Amendment and Restatement. This Agreement, the
Notes (if issued), any Requests for Advance or Letters of Credit hereunder, the
other Loan Documents and any agreements, certificates, or other documents given
to secure the Indebtedness, contain the entire agreement of the parties hereto,
and none of the parties hereto shall be bound by anything not expressed in
writing. This Agreement constitutes an amendment and restatement of the Prior
Credit Agreement, which Prior Credit Agreement is fully superseded and amended
and restated in its entirety hereby; provided, however, that the Indebtedness
governed by the Prior Credit Agreement shall remain
86
outstanding and in full force and effect and provided further that this
Agreement does not constitute a novation of such Indebtedness.
13.23 Termination of Pledge Agreements. Upon fulfillment of each of the
Pledge Termination Conditions, the Agent will execute a writing terminating the
Pledge Agreements.
13.24 Young Parties. The Agent, the Lenders and the Credit Parties hereby
agree that as of the date hereof, none of the Young Parties (a) is a Borrower or
a Subsidiary, and as such none of such parties is subject to the affirmative
covenants in Article 6 of this Agreement, unless they become Borrowers or
Subsidiaries at a future date, and (b) is subject to the negative covenants in
Article 8 of this Agreement, except to the extent that such party is a party to
or a recipient of a transaction with Holdings or one of its Subsidiaries which
Holdings or a Subsidiary is prohibited from entering into pursuant to Article 8.
13.25 Release of Real Estate Collateral. Upon the incurrence of Permitted
Real Estate Debt, and in compliance by the Credit Parties with the mandatory
prepayment provisions of Section 2.15(b)(ii) of this Agreement and the
satisfaction of the conditions set forth in Section 12.12 of this Agreement, the
Agent shall release the applicable real estate from the Lien of the applicable
Mortgages pursuant to the request of the Credit Parties.
13.26 Foreign Subsidiaries. Each of the Foreign Subsidiaries party hereto
execute this Agreement for the purpose of evidencing the Issuing Lender's
commitment to issue Letters of Credit for its account (in amounts not to exceed
in the case of Plastipak Brazil, the Brazilian Maximum Amount, and in the case
of all other Foreign Subsidiaries eligible to request Letters of Credit, the
Other Foreign Subsidiaries Maximum Amount, and subject to the conditions in
Section 5.10), and its obligations under Sections 3.4 through 3.9 with respect
to such Letters of Credit.
* * *
[Signatures Follow On Succeeding Pages]
87
WITNESS the due execution hereof as of the day and year first above
written.
COMERICA BANK, PLASTIPAK HOLDINGS, INC.
as Agent
By: /s/ Xxxxxxx X. Judge By: /s/ Xxxxxxx X. Xxxxxxx
----------------------------- -----------------------------------------
Vice President Treasurer and Chief Financial Officer
By:_____________________________ By:_________________________________________
PLASTIPAK PACKAGING, INC.
By: /s/ Xxxxxxx X. Xxxxxxx
-----------------------------------------
Its: Treasurer and Chief Financial Officer
WHITELINE EXPRESS, LTD.
By: /s/ Xxxxxxx X. Xxxxxxx
-----------------------------------------
Its: Treasurer and Chief Financial Officer
XXXX REALTY, LLC
By: /s/ Xxxxxxx X. Xxxxxxx
-----------------------------------------
Its: Treasurer and Chief Financial Officer
CLEAN TECH, INC.
By: /s/ Xxxxxxx X. Xxxxxxx
-----------------------------------------
Its: Treasurer and Chief Financial Officer
PLASTIPAK PACKAGING DO BRAZIL, LTDA
By: /s/ Xxxxxxx X. Xxxxxxx
-----------------------------------------
Its: Xxxxxxxx-xx-xxxx
00
XXXXXXXXX XXXXX XXXXXXXX, s.r.o.
By: /s/ Xxxxxxx X. Xxxxxxx
-------------------------------------
Its: Attorney-in-fact
SWING LINE LENDER: COMERICA BANK
By: /s/ Xxxxxxx X. Judge
-------------------------------------
Its: Vice President
ISSUING LENDER: COMERICA BANK
By: /s/ Xxxxxxx X. Judge
-------------------------------------
Its: Vice President
LENDERS: COMERICA BANK
By: /s/ Xxxxxxx X. Judge
-------------------------------------
Its: Vice President
89
FLEET NATIONAL BANK
By: /s/ Xxxxx van der Xxxxx
-----------------------
Its: Director
-----------------------
90
JPMORGAN CHASE BANK N.A.
By: /s/ Xxxx X. XxXxxxx
-----------------------
Its: First Vice President
-----------------------
91
STANDARD FEDERAL BANK N.A.
By: /s/ Xxxxxxx X. Xxxxxx
-----------------------
Its: First Vice President
-----------------------
92
BANK OF MONTREAL
By: /s/ Xxxxxxxx X. Xxxx
-----------------------
Its: Managing Director
-----------------------
93
ASSOCIATED BANK, N.A.
By: /s/ Xxxxxx X. Xxxxxx
-------------------------------------
Its:Vice President
94
GENERAL ELECTRIC CAPITAL
CORPORATION
By: /s/ Xxxx Xxxxxxxxxx
--------------------------
Its: Duly Authorized Signatory
--------------------------
95
GUARANTY BANK
By: /s/ Xxxxxx X. Xxxx
-----------------------
Its: Senior Vice President
-----------------------
96
XXXXX FARGO FOOTHILL, LLC
By: /s/ Xxxx Xxxxxxx
-----------------------
Its: Vice President
-----------------------
97
PNC BANK, NATIONAL ASSOCIATION
By: /s/ Xxxxxx X. Xxxxxxxx
-----------------------
Its: Vice President
-----------------------
00
XXX XXXXXXXX XXXXX XX.
Xx: /s/ Xxxx Xxxxxx
------------------------------------
Its:Vice President
99
CITIZENS BANK
By: /s/ Xxx Xxxxxx
------------------------------------
Its:Vice President
100
FIRSTMERIT BANK, N.A.
By: /s/ Xxxxxxx X. Xxxxxxx
-----------------------
Its: Vice President
-----------------------
000
XXXXX XXXXX XXXX XXXXXXX
XXXXXXXX
By: /s/ Xxxxx X. Xxxxxx
-----------------------
Its: Vice President
-----------------------
102
SCHEDULE 1.1
PLASTIPAK PACKAGING, INC.
FIFTH AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT
(BASIS POINTS PER ANNUM)
Basis For Pricing LEVEL I LEVEL II LEVEL III LEVEL IV LEVEL V
-------------------------- ---------- ---------------- -------------- ---------------- -------------------
Leverage Ratio(1) <2.50:1.00 > or = 2.50:1.00 > or = 3.00 to 1.00 > or = 3.50:1.00 > or = 4.00 to 1.00
but < 3.00 but < 3.50 but < 4.00
Eurodollar Margin 137.50 155.00 175.00 225.00 275.00
Base Rate Margin 0.00 0.00 0.00 50.00 100.00
Facility Fee 37.50 45.00 50.00 50.00 50.00
Letter of Credit Fees 137.50 155.00 175.00 225.00 275.00
(exclusive of facing fees,
amendment fees or other
specific fees)
All in Spread 175.00 200.00 225.00 275.00 325.00
------------------
(1) As defined in the Revolving Credit Agreement
SCHEDULE 1.2
PERCENTAGES AND ALLOCATIONS
Lender Percentage Allocation
--------------------------------- ---------- ---------------
Comerica Bank 12.65% $ 37,950,000.00
Fleet National Bank 10.00% $ 30,000,000.00
JPMorgan Chase Bank NA 10.00% $ 30,000,000.00
Standard Federal Bank N.A. 10.00% $ 30,000,000.00
Bank of Montreal 10.00% $ 30,000,000.00
Associated Bank 8.30% $ 24,900,000.00
General Electric Capital Corp. 6.65% $ 19,950,000.00
Guaranty Bank 6.65% $ 19,950,000.00
Xxxxx Fargo Foothill, LLC 5.00% $ 15,000,000.00
PNC Bank, National Association 5.00% $ 15,000,000.00
The Northern Trust Co. 5.00% $ 15,000,000.00
Citizens Bank 3.75% $ 11,250,000.00
FirstMerit Bank, N.A. 3.75% $ 11,250,000.00
Fifth Third Bank Eastern Michigan 3.25% $ 9,750,000.00
Total Facility 100.00% $300,000,000.00
