REVOLVING CREDIT AGREEMENT
Dated as of April 7, 1997
among
TEREX CORPORATION
and its Restricted Subsidiaries
(as defined herein)
and
The banks Listed on Schedule 1.1 Attached Hereto
and
THE FIRST NATIONAL BANK OF BOSTON, as Agent
TABLE OF CONTENTS
Section 1DEFINITIONS AND RULES OF INTERPRETATION . . . . . . .-1-
Section 2.1 Commitment to Lend . . . . . . . . . . . -21-
Section 2.1 Commitment to Lend . . . . . . . . . . . -21-
Section 2.2 Commitment Fee . . . . . . . . . . . . . -21-
Section 2.3.1 Mandatory Reductions of
Supplemental Liquidity Basket . . . . . . . . -21-
Section 2.3.2 Optional Reduction of Total
Commitment and Supplemental Liquidity Basket. -23-
Section 2.3.3 Prepayment Premium. . . . . . . . . -23-
Section 2.4 The Notes. . . . . . . . . . . . . . . . -23-
Section 2.5 Interest on Loans. . . . . . . . . . . . -24-
Section 2.6 Requests for Loans . . . . . . . . . . . -24-
Section 2.7 Conversion Options . . . . . . . . . . . -25-
Section 2.7.1 Conversion to Different Type of
Loan. . . . . . . . . . . . . . . . -25-
Section 2.7.2 Continuation of Type of Loan. . . . -26-
Section 2.7.3 Eurodollar Rate Loans . . . . . . . -26-
Section 2.8 Funds for Loans. . . . . . . . . . . . . -26-
Section 2.8.1 Funding Procedures. . . . . . . . . -26-
Section 2.8.2 Advances by Agent . . . . . . . . . -27-
Section 2.9 Settlements; Failure to Make Funds
Available. . . . . . . . . . . . . . . . -27-
Section 2.10 Change in the Borrowing Bases. . . . . . -28-
Section 2.11 Modification of Borrowing Base A . . . . -28-
Section 3REPAYMENT OF THE LOANS. . . . . . . . . . . . . . . -29-
Section 3.1 Maturity . . . . . . . . . . . . . . . . -29-
Section 3.2 Mandatory Repayments of Loans. . . . . . -29-
Section 3.3 Optional Repayments of Loans . . . . . . -30-
Section 4LETTERS OF CREDIT . . . . . . . . . . . . . . . . . -31-
Section 4.1 Letter of Credit Commitments . . . . . . -31-
Section 4.1.1 Commitment to Issue Letters of
Credit. . . . . . . . . . . . . . . -31-
Section 4.1.2 Letter of Credit Applications . . . -31-
Section 4.1.3 Terms of Letters of Credit. . . . . -31-
Section 4.1.4 Reimbursement Obligations of Banks. -31-
Section 4.1.5 Participations of Banks . . . . . . -31-
Section 4.2 Reimbursement Obligation of the
Borrowers. . . . . . . . . . . . . . . . -32-
Section 4.3 Letter of Credit Payments. . . . . . . . -32-
Section 4.4 Obligations Absolute . . . . . . . . . . -33-
Section 4.5 Reliance by Issuer . . . . . . . . . . . -33-
Section 4.6 Letter of Credit Fees. . . . . . . . . . -34-
Section 5CERTAIN GENERAL PROVISIONS. . . . . . . . . . . . . -34-
Section 5.1 Closing Fee. . . . . . . . . . . . . . . -34-
Section 5.2 Agent's Fee. . . . . . . . . . . . . . . -34-
Section 5.3 Funds for Payments . . . . . . . . . . . -34-
Section 5.3.1 Payments to Agent . . . . . . . . . -34-
Section 5.3.2 No Offset, Et . . . . . . . . . . . -35-
Section 5.4 Computations . . . . . . . . . . . . . . -35-
Section 5.5 Inability to Determine Eurodollar Rate . -36-
Section 5.6 Illegality . . . . . . . . . . . . . . . -36-
Section 5.7 Additional Costs, Et . . . . . . . . . . -36-
Section 5.8 Capital Adequacy . . . . . . . . . . . . -37-
Section 5.9 Certificate. . . . . . . . . . . . . . . -38-
Section 5.10 Indemnity. . . . . . . . . . . . . . . . -38-
Section 5.11 Interest After Default . . . . . . . . . -39-
Section 5.11.1 Overdue Amounts . . . . . . . . . . -39-
Section 5.11.2 Amounts Not Overdue . . . . . . . . -39-
Section 5.12 HLT Classification . . . . . . . . . . . -39-
Section 5.13 Replacement Banks. . . . . . . . . . . . -40-
Section 5.14 Concerning Joint and Several Liability
of the Borrowers . . . . . . . . . . . . -40-
Section 5.15 Applicability of Credit Agreement. . . . -42-
Section 6COLLATERAL SECURITY . . . . . . . . . . . . . . . . -42-
Section 7REPRESENTATIONS AND WARRANTIES. . . . . . . . . . . -42-
Section 7.1 Corporate Authority. . . . . . . . . . . -42-
Section 7.1.1 Incorporation; Good Standing. . . . -42-
Section 7.1.2 Authorization . . . . . . . . . . . -42-
Section 7.1.3 Enforceability. . . . . . . . . . . -42-
Section 7.2 Governmental Approvals . . . . . . . . . -43-
Section 7.3 Title to Properties; Leases. . . . . . . -43-
Section 7.4 Financial Statements and Projections . . -43-
Section 7.4.1 Financial Statements. . . . . . . . -43-
Section 7.4.2 Projections . . . . . . . . . . . . -43-
Section 7.5 No Material Changes, Etc . . . . . . . . -44-
Section 7.6 Business . . . . . . . . . . . . . . . . -44-
Section 7.7 Litigation . . . . . . . . . . . . . . . -45-
Section 7.8 No Materially Adverse Contracts, Etc . . -45-
Section 7.9 Compliance with Other Instruments, Laws,
Etc. . . . . . . . . . . . . . . . . . . -45-
Section 7.10 Tax Status . . . . . . . . . . . . . . . -45-
Section 7.11 No Event of Default. . . . . . . . . . . -46-
Section 7.12 Holding Company and Investment Company
Acts . . . . . . . . . . . . . . . . . . -46-
Section 7.13 Absence of Financing Statements, Etc . . -46-
Section 7.14 Perfection of Security Interest. . . . . -46-
Section 7.15 Certain Transactions . . . . . . . . . . -46-
Section 7.16 Employee Benefit Plans . . . . . . . . . -46-
Section 7.16.1 In General. . . . . . . . . . . . . -46-
Section 7.16.2 Terminability of Welfare Plans. . . -47-
Section 7.16.3 Guaranteed Pension Plans. . . . . . -47-
Section 7.16.4 Multiemployer Plans . . . . . . . . -47-
Section 7.17 Regulations U and X. . . . . . . . . . . -47-
Section 7.18 Environmental Compliance . . . . . . . . -48-
Section 7.19 Subsidiaries, Etc. . . . . . . . . . . . -49-
Section 7.20 Bank Accounts. . . . . . . . . . . . . . -49-
Section 7.21 Chief Executive Offices; Books and
Records. . . . . . . . . . . . . . . . . -49-
Section 7.22 Disclosure . . . . . . . . . . . . . . . -49-
Section 7.23 Fiscal Year. . . . . . . . . . . . . . . -50-
Section 7.24 Acquisition Documents. . . . . . . . . . -50-
Section 8AFFIRMATIVE COVENANTS OF THE BORROWERS. . . . . . . -50-
Section 8.1 Punctual Payment . . . . . . . . . . . . -50-
Section 8.2 Maintenance of Office. . . . . . . . . . -50-
Section 8.3 Records and Accounts . . . . . . . . . . -50-
Section 8.4 Financial Statements, Certificates and
Information. . . . . . . . . . . . . . . -50-
Section 8.5 Notices. . . . . . . . . . . . . . . . . -53-
Section 8.5.1 Defaults. . . . . . . . . . . . . . -53-
Section 8.5.2 Environmental Events. . . . . . . . -53-
Section 8.5.3 Notification of Claim against
Collateral. . . . . . . . . . . . . -53-
Section 8.5.4 Notice of Litigation and Judgments. -53-
Section 8.6 Corporate Existence; Maintenance of
Properties . . . . . . . . . . . . . . . -53-
Section 8.7 Insurance. . . . . . . . . . . . . . . . -54-
Section 8.8 Taxes. . . . . . . . . . . . . . . . . . -54-
Section 8.9 Inspection of Properties and Books, Etc. -54-
Section 8.9.1 General . . . . . . . . . . . . . . -54-
Section 8.9.2 Collateral Reports. . . . . . . . . -55-
Section 8.9.3 Appraisals. . . . . . . . . . . . . -55-
Section 8.9.4 Communications with Accountants . . -55-
Section 8.10 Compliance with Laws, Contracts,
Licenses, and Permits. . . . . . . . . . -55-
Section 8.11 Employee Benefit Plans . . . . . . . . . -56-
Section 8.12 Use of Proceeds. . . . . . . . . . . . . -56-
Section 8.13 Deposit Accounts . . . . . . . . . . . . -56-
Section 8.14 Additional Borrowers . . . . . . . . . . -56-
Section 8.15 Further Assurances . . . . . . . . . . . -57-
Section 9CERTAIN NEGATIVE COVENANTS OF THE BORROWERS . . . . -57-
Section 9.1 Restrictions on Indebtedness . . . . . . -57-
Section 9.2 Restrictions on Liens. . . . . . . . . . -58-
Section 9.3 Restrictions on Investments. . . . . . . -60-
Section 9.4 Distributions. . . . . . . . . . . . . . -62-
Section 9.5 Merger, Consolidation and Disposition of
Assets . . . . . . . . . . . . . . . . . -62-
Section 9.5.1 Mergers and Acquisitions. . . . . . -62-
Section 9.5.2 Disposition of Assets . . . . . . . -62-
Section 9.6 Compliance with Environmental Laws . . . -63-
Section 9.7 Employee Benefit Plans . . . . . . . . . -63-
Section 9.8 Bank Accounts. . . . . . . . . . . . . . -63-
9.9 Business Activities. . . . . . . . . . . . . . . . -64-
Section 9.10 Change of Chief Executive Office or
Corporate Name . . . . . . . . . . . . . -64-
Section 9.11 Fiscal Year. . . . . . . . . . . . . . . -64-
Section 9.12 Transactions with Affiliates . . . . . . -64-
Section 9.13 Note Indenture; Preferred Stock. . . . . -64-
Section 10FINANCIAL COVENANTS OF THE BORROWERS . . . . . . . -65-
Section 10.1 Cash Flow Coverage Ratio . . . . . . . . -65-
Section 10.2 Capital Expenditures . . . . . . . . . . -66-
Section 11CLOSING CONDITIONS . . . . . . . . . . . . . . . . -66-
Section 11.1 Loan Documents; Acquisition Documents. . -66-
Section 11.2 Certified Copies of Charter Documents. . -66-
Section 11.3 Corporate Action . . . . . . . . . . . . -66-
Section 11.4 Incumbency Certificates. . . . . . . . . -66-
Section 11.5 Validity of Liens. . . . . . . . . . . . -67-
Section 11.6 Perfection Certificates and UCC Search
Results. . . . . . . . . . . . . . . . . -67-
Section 11.7 Certificates of Insurance. . . . . . . . -67-
Section 11.8 Agency Agreements. . . . . . . . . . . . -67-
Section 11.9 Borrowing Base Reports . . . . . . . . . -67-
Section 11.10 Certain Reports. . . . . . . . . . . . . -67-
Section 11.11 Financial Condition; Solvency
Certificate. . . . . . . . . . . . . . . -68-
Section 11.12 Opinions of Counsel. . . . . . . . . . . -68-
Section 11.13 Payment of Fees. . . . . . . . . . . . . -68-
Section 11.14 Payoff Letter. . . . . . . . . . . . . . -68-
Section 11.15 Loan Request; Disbursement Instructions. -68-
Section 11.16 Closing Certificate. . . . . . . . . . . -69-
Section 11.17 Closing of Acquisition . . . . . . . . . -69-
Section 11.18 Commercial Finance Exam and Appraisal. . -69-
Section 11.19 Excess Availability. . . . . . . . . . . -69-
Section 12CONDITIONS TO ALL BORROWINGS . . . . . . . . . . . -69-
Section 12.1 Representations True; No Event of
Default. . . . . . . . . . . . . . . . . -69-
Section 12.2 No Legal Impediment. . . . . . . . . . . -70-
Section 12.3 Governmental Regulation. . . . . . . . . -70-
Section 12.4 Proceedings and Documents. . . . . . . . -70-
Section 12.5 Borrowing Base Reports . . . . . . . . . -70-
Section 13EVENTS OF DEFAULT; ACCELERATION; ETC . . . . . . . -70-
Section 13.1 Events of Default and Acceleration . . . -70-
Section 13.2 Termination of Commitments . . . . . . . -74-
Section 13.3 Remedies . . . . . . . . . . . . . . . . -74-
Section 13.4 Distribution of Collateral Proceeds. . . -75-
Section 14SETOFF . . . . . . . . . . . . . . . . . . . . . . -75-
Section 15THE AGENT. . . . . . . . . . . . . . . . . . . . . -76-
Section 15.1 Authorization. . . . . . . . . . . . . . -76-
Section 15.2 Employees and Agents . . . . . . . . . . -77-
Section 15.3 No Liability . . . . . . . . . . . . . . -77-
Section 15.4 No Representations . . . . . . . . . . . -77-
Section 15.5 Payments . . . . . . . . . . . . . . . . -78-
Section 15.5.1 Payments to Agent . . . . . . . . . -78-
Section 15.5.2 Distribution by Agent . . . . . . . -78-
Section 15.5.3 Delinquent Banks. . . . . . . . . . -78-
Section 15.6 Holders of Notes . . . . . . . . . . . . -78-
Section 15.7 Indemnity. . . . . . . . . . . . . . . . -79-
Section 15.8 Agent as Bank. . . . . . . . . . . . . . -79-
Section 15.9 Resignation. . . . . . . . . . . . . . . -79-
Section 15.10 Notification of Defaults and Events of
Default. . . . . . . . . . . . . . . . . -79-
Section 15.11 Duties in the Case of Enforcement. . . . -79-
Section 16EXPENSES . . . . . . . . . . . . . . . . . . . . . -80-
Section 17INDEMNIFICATION. . . . . . . . . . . . . . . . . . -80-
Section 18SURVIVAL OF COVENANTS, ETC . . . . . . . . . . . . -81-
Section 19ASSIGNMENT AND PARTICIPATION . . . . . . . . . . . -82-
Section 19.1 Conditions to Assignment by Banks. . . . -82-
Section 19.2 Certain Representations and Warranties;
Limitations; Covenants . . . . . . . . . -82-
Section 19.3 Register . . . . . . . . . . . . . . . . -83-
Section 19.4 New Notes. . . . . . . . . . . . . . . . -84-
Section 19.5 Participations . . . . . . . . . . . . . -84-
Section 19.6 Disclosure . . . . . . . . . . . . . . . -84-
Section 19.7 Assignee or Participant Affiliated with
the Borrowers. . . . . . . . . . . . . . -85-
Section 19.8 Miscellaneous Assignment Provisions. . . -85-
Section 19.9 Assignment by Borrowers. . . . . . . . . -85-
Section 19.10 FNBB Syndication . . . . . . . . . . . . -85-
Section 20NOTICES, ETC . . . . . . . . . . . . . . . . . . . -86-
Section 21GOVERNING LAW. . . . . . . . . . . . . . . . . . . -86-
Section 22HEADINGS . . . . . . . . . . . . . . . . . . . . . -87-
Section 23COUNTERPARTS . . . . . . . . . . . . . . . . . . . -87-
Section 24ENTIRE AGREEMENT, ETC. . . . . . . . . . . . . . . -87-
Section 25WAIVER OF JURY TRIAL . . . . . . . . . . . . . . . -87-
Section 26CONSENTS, AMENDMENTS, WAIVERS, ETC . . . . . . . . -87-
Section 27SEVERABILITY . . . . . . . . . . . . . . . . . . . -88-
EXHIBITS:
Exhibit A Form of Note
Exhibit B-1 Form of Borrowing Base A Report Exhibit B-2 Form of Borrowing Base B
Report Exhibit C Form of Loan Request Exhibit D Form of Compliance Certificate
Exhibit E Form of Security Agreement Exhibit F Form of Instrument of Adherence
Exhibit G Form of Assignment and Acceptance
SCHEDULES:
Schedule 1 Banks; Commitment Amounts; Commitment Percentages;
Lending Offices
Schedule 1.2 Restricted Subsidiaries
Schedule 7.3 Title to Properties
Schedule 7.7 Litigation
Schedule 7.10 Tax Matters
Schedule 7.18 Environmental Matters
Schedule 7.19 Subsidiaries; Joint Ventures
Schedule 7.20 Bank Accounts
Schedule 7.21 Chief Executive Offices; Federal Employer
Identification Numbers
Schedule 9.1 Existing Indebtedness
Schedule 9.2 Existing Liens
Schedule 9.3 Existing Investments
Schedule 11.12 Opinion Matters
REVOLVING CREDIT AGREEMENT
This REVOLVING CREDIT AGREEMENT is made as of April 7, 1997, by and among
TEREX CORPORATION ("TEREX"), each of its Restricted Subsidiaries (as defined
below), the lending institutions listed on Schedule 1.1 attached hereto and THE
FIRST NATIONAL BANK OF BOSTON, as agent for itself and such other lending
institutions.
Section 1 DEFINITIONS AND RULES OF INTERPRETATION.
Section 1.1 Definitions. The following terms shall have the meanings
set forth in this Section 1 or elsewhere in the provisions of this Credit
Agreement referred to below:
Accounts Receivable. A Borrower's now owned and hereafter acquired
rights to payment for the prior, concurrent or future sale, lease or other
disposition of Inventory or rendition of services, whether or not evidenced by
an instrument or chattel paper and whether or not earned by performance, except
to the extent that any such right to payment arises from the rendition by a
Borrower to any of its Subsidiaries or any other Borrower or any of its
Subsidiaries, of management services, accounting services, administrative
services or other services unrelated to the sale, lease or other disposition of
Inventory and not directly related to the manufacture or maintenance of
Inventory, as recorded on books of account in accordance with generally accepted
accounting principles.
Acquisition. The acquisition by Terex of all of the
outstanding capital stock of certain Subsidiaries of the Sellers
pursuant to the terms of the Acquisition Documents.
Acquisition Documents. The Agreement of Purchase and Sale, dated as of
February 24, 1997, among the Sellers, Simon Engineering plc and Terex, and all
agreements and documents required to be entered into or delivered pursuant to
such Agreement of Purchase and Sale or in connection with the Acquisition.
Adjustment Date. The first day of the month
immediately following the month in which a Compliance Certificate
is to be delivered by the Borrowers pursuant to Section 8.4(d)
hereof.
Affected Bank. See Section 5.13 hereof.
Affiliate. Any Person that would be considered to be an affiliate of a
Borrower under Rule 144(a) of the Rules and Regulations of the Securities and
Exchange Commission, as in effect on the date hereof, if such Borrower were
issuing securities.
Agency Agreements. The agency agreements (a) which were entered into by
a Borrower with certain of its collection banks on or prior to the date hereof,
and (b) which are entered into by a Borrower with collection banks selected by
such Borrower after the date hereof and which are reasonably satisfactory in
form and substance to the Agent, in each case as such agreements may be amended
and in effect from time to time.
Agent's Head Office. The Agent's head office located at 000 Xxxxxxx
Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000, or at such other location as the Agent may
designate from time to time.
Agent. The First National Bank of Boston acting as
agent for the Banks.
Agent's Fee. See Section 5.2 hereof.
Agent's Fee Letter. See Section 5.1 hereof.
Agent's Special Counsel. Xxxxxxx, Xxxx & Xxxxx LLP or
such other counsel as may be approved by the Agent.
Applicable Margin. For each period commencing on an Adjustment Date
through the date immediately preceding the next Adjustment Date (each a "Rate
Adjustment Period"), the Applicable Margin with respect to Base Rate Loans,
Eurodollar Rate Loans and Letter of Credits Fees shall be the Applicable Margin
set forth below with respect to the Fixed Charge Coverage Ratio of Terex and its
Subsidiaries, as determined at the end of the fiscal quarter of Terex and its
Subsidiaries ending immediately prior to the applicable Rate Adjustment Period
for the four consecutive fiscal quarters of Terex and its Subsidiaries ending on
such date:
Fix Charge
Coverage Ratio Base Rate Loans Rate Loans Credit Fees
-------------- --------------- ---------- -----------
greater than or equal to
1.00 to 1.00 but less
than 1.10 to 1.00 1.50% 3.00% 2.50%
greater than or equal to
1.10 to 1.00 but less
than 1.25 to 1.00 1.25% 2.75% 2.25%
greater than or equal to
1.25 to 1.00 but less
than 1.50 to 1.00 1.00% 2.50% 2.00%
greater than or equal to
1.50 to 1.00 but less
than 1.75 to 1.00 0.75% 2.25% 1.75%
greater than or equal to
1.75 to 1.00 0.50% 2.00% 1.50%
Notwithstanding the foregoing, (a) the Applicable Margin for Base Rate
Loans, Eurodollar Rate Loans and Letter of Credit Fees during the period
commencing on the Closing Date through the earlier to occur of the first
Adjustment Date following (i) the receipt by the Banks of the 1997 audited
financial statements of Terex and its Subsidiaries pursuant to Section 8.4(a)
hereof, and (ii) the reduction of the Supplemental Liquidity Basket to zero,
shall be the Applicable Margin set forth above opposite the Fixed Charge
Coverage Ratios greater than or equal to 1.25 to 1.00 but less than 1.50 to
1.00, and (b) if the Borrowers fail to deliver any Compliance Certificate
pursuant to Section 8.4(d) hereof then, for the period commencing on the next
Adjustment Date to occur subsequent to such failure through the date immediately
preceding the Adjustment Date that occurs immediately following the date on
which such Compliance Certificate is delivered, the Applicable Margin shall be
the highest Applicable Margin set forth above.
Assignment and Acceptance. See Section 19.1 hereof.
Availability Reserves. As of any date of determination, such amounts as
the Agent may from time to time establish and revise in good faith, after
written notice to the Borrowers setting forth in reasonable detail the change in
the Availability Reserves and the reasons therefor, reducing the amount of Loans
and Letters of Credit which would otherwise be available to the Borrowers under
the lending formula(s) provided for herein: (a) to reflect events, conditions,
contingencies or risks which, as determined by the Agent or the Banks in good
faith, do or may (i) adversely affect either (A) any Collateral, the rights of
the Agent or the Banks in any Collateral of any Borrower or any other property
which is security for the Obligations or its value or (B) the security interests
and other rights of the Agent or the Banks in the Collateral of any Borrower
(including the enforceability, perfection and priority thereof) or (ii)
adversely affect in any material respect the assets (other than any Collateral)
or business of any Borrower, (b) to reflect the good faith belief of the Agent
or the Banks that any collateral report or financial information furnished by or
on behalf of any Borrower to the Agent or the Banks is or may have been
incomplete, inaccurate or misleading in any material respect or (c) in respect
of any state of facts which the Agent or the Banks determine in good faith
constitutes a Default or an Event of Default.
Balance Sheet Date. December 31, 1996.
Banks. FNBB and the other lending institutions listed on Schedule 1.1
attached hereto and any other Person who becomes an assignee of any rights and
obligations of a Bank pursuant to Section 19 hereof.
Base Rate. The higher of (a) the annual rate of interest announced from
time to time by FNBB at its head office in Boston, Massachusetts, as its "base
rate" and (b) one-half of one percent (1/2%) above the Federal Funds Effective
Rate. For the purposes of this definition, "Federal Funds Effective Rate" shall
mean for any day, the 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 that
is a Business Day, the average of the quotations for such day on such
transactions received by the Agent from three funds brokers of recognized
standing selected by the Agent.
Base Rate Loans. Loans bearing interest calculated by
reference to the Base Rate.
Borrower(s). Terex and its Restricted Subsidiaries
which are parties to this Credit Agreement.
Borrowing Base A. Subject to Section 2.11 hereof, at the relevant time
of reference thereto, an amount determined by the Agent by reference to the most
recent Borrowing Base Report delivered to the Banks and the Agent pursuant to
Section 8.4(f) hereof, which is equal to the sum of:
(a) 85.00% of Eligible A Accounts Receivable of
the Borrowers for which invoices have been issued and are
payable; plus
(b) 60.00% of the net book value (determined on a first-in
first-out basis at lower of cost or market) of Eligible A Inventory of the
Borrowers consisting of finished goods; plus
(c) 45.00% of the net book value (determined on a first-in
first-out basis at lower of cost or market) of Eligible A Inventory of the
Borrowers consisting of raw materials and parts; minus
(d) the Availability Reserves.
Borrowing Base B. At the relevant time of reference thereto, an amount
determined by the Agent by reference to the most recent Borrowing Base Report
delivered to the Banks and the Agent pursuant to Section 8.4(h) hereof, which is
equal to the sum of:
(a) 85.00% of Eligible B Accounts Receivable of Terex and its
Subsidiaries on a consolidated basis for which invoices have been issued and are
payable; plus
(b) 50.00% of the aggregate cost of Eligible B
Inventory of Terex and its Subsidiaries on a consolidated basis;
minus
(c) $2,500,000.
Borrowing Base Report. A Borrowing Base Report signed by the President,
the Chief Financial Officer or a treasurer or controller of Terex, on behalf of
itself and each of the other Borrowers, with respect to Borrowing Base A or
Borrowing Base B and in substantially the form of Exhibit B-1 or Exhibit B-2, as
applicable, attached hereto.
Borrowing Bases. Collectively, Borrowing Base A and
Borrowing Base B.
Business Day. Any day on which banking institutions in Boston,
Massachusetts and New York City, New York are open for the transaction of
banking business and, in the case of Eurodollar Rate Loans, also a day which is
a Eurodollar Business Day.
Capital Assets. Fixed assets, both tangible (such as land, buildings,
fixtures, machinery and equipment) and intangible (such as patents, copyrights,
trademarks, franchises and good will); provided that Capital Assets shall not
include any item customarily charged directly to expense or depreciated over a
useful life of twelve (12) months or less in accordance with generally accepted
accounting principles.
Capital Expenditures. Amounts paid by a Person in connection with the
purchase by such Person of Capital Assets that would be required to be
capitalized and shown on the balance sheet of such Person in accordance with
generally accepted accounting principles.
Capitalized Leases. Leases under which a Person is the lessee or
obligor, the discounted future rental payment obligations under which are
required to be capitalized on the balance sheet of the lessee or obligor in
accordance with generally accepted accounting principles.
CERCLA. See Section 7.18 hereof.
Closing Date. The first date on which the conditions set forth in
Section 11 hereof have been satisfied and any Loans are to be made or any Letter
of Credit is to be issued hereunder.
Code. The Internal Revenue Code of 1986.
Collateral. All of the property, rights and interests
of the Borrowers that are subject to the security interests and
mortgages created by the Security Documents.
Commitment. The agreement of each Bank, subject to the terms and
conditions of this Credit Agreement, to make Loans to, and to participate in the
issuance, extension and renewal of Letters of Credit for the account of the
Borrowers.
Commitment Amount. With respect to each Bank, the amount set forth on
Schedule 1.1 attached hereto as the amount of such Bank's Commitment, as the
same may be reduced from time to time; or if such Commitment is terminated
pursuant to the provisions hereof, zero.
Commitment Percentage. With respect to each Bank, the
percentage set forth on Schedule 1.1 attached hereto as such
Bank's percentage of the Total Commitment.
Common Stock Appreciation Rights Agreement. The Common
Stock Appreciation Rights Agreement dated as of May 9, 1995, by
and between Terex and United States Trust Company of New York, as
rights agent.
Compliance Certificate. See Section 8.4(d) hereof.
Congress Agreement. That certain Loan and Security
Agreement, dated as of May 9, 1995, by and among Congress
Financial Corporation and Foothill Capital Corporation, Terex and
certain of its Subsidiaries.
Consolidated or consolidated. With reference to any term defined
herein, shall mean that term as applied to the accounts of a Person and its
Subsidiaries, consolidated in accordance with generally accepted accounting
principles.
Consolidated Cash Flow. With respect to any fiscal period, an amount
equal to the sum of Consolidated Net Income of Terex and its Subsidiaries for
such fiscal period, plus depreciation and amortization charges and non-cash
adjustments made to translate foreign assets and liabilities for changes in
foreign exchange rates made in accordance with Financial Accounting Standards
Board Statement No. 52, in each case deducted in calculating Consolidated Net
Income for such period, plus the aggregate amount of income tax expense deducted
in calculating Consolidated Net Income for such period, plus the Consolidated
Total Interest Expense of Terex and its Subsidiaries for such period, plus,
without duplication, Non-Cash Charges for such period, minus the amount of
decrease during such period of reserves created in connection with any Non-Cash
Charges by virtue of cash payments, all as determined on a consolidated basis in
accordance with generally accepted accounting principles.
Consolidated Net Income. The consolidated net income (or deficit) of
Terex and its Subsidiaries, after deduction of all expenses, taxes, and other
proper charges, determined in accordance with generally accepted accounting
principles, after eliminating therefrom all extraordinary nonrecurring items of
income.
Consolidated Total Interest Expense. For any period, the aggregate
amount of interest required to be paid or accrued by Terex and its Subsidiaries
during such period on all Indebtedness of Terex and its Subsidiaries outstanding
during all or any part of such period, whether such interest was or is required
to be reflected as an item of expense or capitalized, including payments
consisting of interest in respect of Capitalized Leases and including commitment
fees, agency fees, facility fees, balance deficiency fees and similar fees in
connection with the borrowing of money, provided that (i) all fees (including
the amortization thereof) payable in connection with the closing under this
Credit Agreement, the repayment of amounts outstanding (including, without
limitation, all fees) under the Congress Agreement and in connection with the
redemption or repurchase of the Senior Secured Notes in accordance with Section
9.13 hereof, and (ii) the amortization of all non-cash charges taken in
connection with the borrowing of money, shall be excluded.
Conversion Request. A notice given by the Borrowers to
the Agent of the Borrowers' election to convert or continue a
Loan in accordance with Section 2.7 hereof.
Credit Agreement. This Revolving Credit Agreement,
including the Schedules and Exhibits hereto.
Default. See Section 13.1 hereof.
Delinquent Bank. See Section 15.5.3 hereof.
Discretionary Amount. As at any date of determination, an amount
determined by the Agent in its sole and absolute discretion which shall not
exceed $10,000,000 at any time and which amount shall not be more than $0.00 for
more than ten (10) consecutive days.
Distribution. The declaration or payment of any dividend on or in
respect of any shares of any class of capital stock of any of the Borrowers,
other than dividends payable solely in shares of common stock or Permitted
Preferred Stock or rights of a Borrower to purchase common stock or Permitted
Preferred Stock; the purchase, redemption, or other retirement of any shares of
any class of capital stock of any of the Borrowers, directly or indirectly
through a Subsidiary of the Borrower or otherwise other than those payable in
shares of common stock or Permitted Preferred Stock or rights of a Borrower to
purchase common stock or Permitted Preferred Stock; the return of capital by any
of the Borrowers to its shareholders as such; or any other distribution on or in
respect of any shares of any class of capital stock of any of the Borrowers.
Dollars or $. Dollars in lawful currency of the United States of
America.
Domestic Lending Office. Initially, the office of each Bank designated
as such in Schedule 1.1 attached hereto; thereafter, such other office of such
Bank, if any, located within the United States that will be making or
maintaining Base Rate Loans.
Drawdown Date. The date on which any Loan is made or is to be made, and
the date on which any Loan is converted or continued in accordance with Section
2.7 hereof.
Eligible A Accounts Receivable. With respect to any Borrower, the
aggregate of the unpaid portions of Accounts Receivable of such Borrower (net of
any credits, rebates, offsets, holdbacks or other adjustments or commissions
payable to third parties that are adjustments to such Accounts Receivable) (a)
that such Borrower reasonably and in good faith determines to be collectible;
(b) that are with account debtors that (i) are not Affiliates of such Borrower,
(ii) purchased the goods or services giving rise to the relevant Account
Receivable in an arm's length transaction, (iii) are not insolvent or involved
in any case or proceeding, whether voluntary or involuntary, under any
bankruptcy, reorganization, arrangement, insolvency, adjustment of debt,
dissolution, liquidation or similar law of any jurisdiction and (iv) are, in the
Majority Banks' reasonable judgment, creditworthy, as determined in good faith;
(c) that are in payment of obligations that have been fully performed and are
not subject to dispute or any other similar claims that would reduce the cash
amount payable therefor; (d) that are not subject to any pledge, restriction,
security interest or other lien or encumbrance other than Permitted Liens; (e)
in which the Agent has a valid and perfected security interest; (f) that are not
outstanding for more than 120 days past the date of the respective original
invoices therefor; (g) that are not outstanding for more than 60 days past the
original due dates thereof; (h) that are not due from an account debtor located
in Indiana, Minnesota or New Jersey unless such Borrower (i) has received a
certificate of authority to do business and is in good standing in such state or
(ii) has filed a notice of business activities report with the appropriate
office or agency of such state for the current year; (i) that are not due from
any single account debtor if more than fifty percent (50%) of the aggregate
amount of all Accounts Receivable owing from such account debtor to the
Borrowers would otherwise not be Eligible A Accounts Receivable; (j) that are
payable in Dollars; (k) that are not payable from an office outside of the
United States unless such Accounts Receivable are backed by a letter of credit
in an amount reasonably acceptable to the Agent or other credit support in form
and substance reasonably satisfactory to the Agent; and (l) such Accounts
Receivables of a single account debtor or its Affiliates do not constitute more
than fifteen percent (15%) of all otherwise Eligible A Accounts Receivable (but
the portion of such Accounts Receivable not in excess of such percentage may be
deemed Eligible A Accounts Receivable).
Eligible A Inventory. With respect to any Borrower, Inventory
consisting of, finished goods and raw materials and parts owned by such
Borrower; provided that Eligible A Inventory shall not include any inventory (a)
held on consignment, or not otherwise owned by such Borrower, or of a type no
longer sold by such Borrower, (b) which has been returned by a customer or is
damaged or subject to any legal encumbrance other than Permitted Liens, (c)
which is not in the possession of such Borrower unless the Agent has received a
waiver from the party in possession of such inventory in form and substance
reasonably satisfactory to the Agent, (d) which is held by such Borrower on
property leased by such Borrower, unless the Agent has received a waiver from
the lessor of such leased property and, if any, sublessor thereof in form and
substance reasonably satisfactory to the Agent, (e) as to which appropriate
Uniform Commercial Code financing statements showing such Borrower as debtor and
the Agent as secured party have not been filed in the proper filing office or
offices in order to perfect the Agent's security interest therein, (f) which has
been shipped to a customer of such Borrower regardless of whether such shipment
is on a consignment basis, (g) which is not located within the United States of
America, or (h) which the Majority Banks reasonably deem to be obsolete or not
marketable.
Eligible Assignee. Any of (a) a commercial bank or finance company
organized under the laws of the United States, or any State thereof or the
District of Columbia, and having total assets in excess of $1,000,000,000; (b) a
savings and loan association or savings bank organized under the laws of the
United States, or any State thereof or the District of Columbia, and having a
net worth of at least $100,000,000, calculated in accordance with generally
accepted accounting principles; (c) a commercial bank organized under the laws
of any other country which is a member of the Organization for Economic
Cooperation and Development (the "OECD"), or a political subdivision of any such
country, and having total assets in excess of $1,000,000,000, provided that such
bank is acting through a branch or agency located in the country in which it is
organized or another country which is also a member of the OECD; (d) the central
bank of any country which is a member of the OECD; and (e) if, but only if, any
Event of Default has occurred and is continuing, any other bank, insurance
company, commercial finance company or other financial institution or other
Person approved by the Agent, such approval not to be unreasonably withheld.
Eligible B Accounts Receivable. With respect to Terex and each of its
Subsidiaries, the aggregate of the unpaid portions of Accounts Receivable of
such Person that (a) are not unpaid more than 90 days from the original due date
thereof or more than 180 days after the date of the original invoice therefor;
(b) do not arise from sales on consignment, guaranteed sale, sale and return,
sale on approval, or other terms under which payment by the account debtor may
be conditional or contingent; provided, however, that no Account Receivable
where the debtor is a dealer of Inventory shall be deemed ineligible solely
because such Person has a buy-back arrangement with such account debtor
effective upon the termination of such account debtor as a dealer, but upon such
termination such dealer's Accounts Receivable shall become ineligible; (c) the
account debtor with respect to such Accounts Receivable has not asserted a
counterclaim, defense or dispute and does not have, and does not engage in
transactions that may give rise to, any right of setoff against such Accounts
Receivable; and (d) such account debtor is not Terex or an Affiliate of Terex;
provided, further, that Eligible B Accounts Receivable shall not include any
Accounts Receivable with respect to which the Banks have actual knowledge that
such Accounts Receivable do not arise from the actual and bona fide sale and
delivery of goods and rendition of services by Terex and its Subsidiaries.
Eligible B Inventory. With respect to Terex and each of its
Subsidiaries, all Inventory of such Person consisting of (a) finished goods held
for resale in the ordinary course of business of any such Person, (b) work in
process relating to goods to be held for resale in the ordinary course of
business of any such Person, (c) parts held for resale or to be incorporated
into any such finished goods, and (d) raw materials for such finished goods.
Employee Benefit Plan. Any employee benefit plan within the meaning of
Section 3(3) of ERISA maintained or contributed to by a Borrower or any ERISA
Affiliate, other than a Multiemployer Plan.
Environmental Laws. See Section 7.18(a) hereof.
EPA. See Section 7.18(b) hereof.
Equity Securities. With respect to any corporation, partnership,
trust, unincorporated association, joint venture, limited liability company, or
other legal or business entity, all equity securities of such entity, including
any (a) common or preferred stock, (b) limited or general partnership interests,
(c) options, warrants, or other legal rights to purchase or acquire any equity
security, or (d) securities convertible into any equity securities.
ERISA. The Employee Retirement Income Security Act of
1974.
ERISA Affiliate. Any Person which is treated as a single employer with
Borrower under Section 414 of the Code.
ERISA Reportable Event. A reportable event with respect to a Guaranteed
Pension Plan within the meaning of Section 4043 of ERISA and the regulations
promulgated thereunder as to which the requirement of notice has not been
waived.
Eurocurrency Reserve Rate. For any day with respect to a Eurodollar
Rate Loan, the maximum rate (expressed as a decimal) at which any lender subject
thereto would be required to maintain reserves under Regulation D of the Board
of Governors of the Federal Reserve System (or any successor or similar
regulations relating to such reserve requirements) against "Eurocurrency
Liabilities" (as that term is used in Regulation D), if such liabilities were
outstanding. The Eurocurrency Reserve Rate shall be adjusted automatically on
and as of the effective date of any change in the Eurocurrency Reserve Rate.
Eurodollar Business Day. Any day on which commercial banks are open for
international business (including dealings in Dollar deposits) in London or such
other eurodollar interbank market as may be selected by the Agent in its sole
discretion acting in good faith.
Eurodollar Lending Office. Initially, the office of each Bank
designated as such in Schedule 1.1 attached hereto; thereafter, such other
office of such Bank, if any, that shall be making or maintaining Eurodollar Rate
Loans.
Eurodollar Rate. For any Interest Period with respect to a Eurodollar
Rate Loan, the rate of interest equal to (a) the rate per annum (rounded upwards
to the nearest 1/16 of one percent) at which the Reference Bank's Eurodollar
Lending Office is offered Dollar deposits two Eurodollar Business Days prior to
the beginning of such Interest Period in the interbank eurodollar market where
the eurodollar and foreign currency and exchange operations of such Eurodollar
Lending Office are customarily conducted, for delivery on the first day of such
Interest Period for the number of days comprised therein and in an amount
comparable to the amount of the Eurodollar Rate Loan of the Reference Bank to
which such Interest Period applies, divided by (b) a number equal to 1.00 minus
the Eurocurrency Reserve Rate, if applicable.
Eurodollar Rate Loans. Loans bearing interest
calculated by reference to the Eurodollar Rate.
Event of Default. See Section 13.1 hereof.
Excess Availability. As at any date of determination, an amount equal
to (a) the Maximum Availability on such date minus (b) the sum of (i) the
aggregate amount of Loans outstanding on such date plus (ii) the Maximum Drawing
Amount of all outstanding Letters of Credit and all Unpaid Reimbursement
Obligations outstanding on such date.
Excess Cash Flow. With respect to Terex and its Subsidiaries and any
particular fiscal period, an amount equal to (a) the Consolidated Cash Flow for
such period less (b) the sum of (i) Consolidated Total Interest Expense for such
period, plus (ii) any mandatory reductions of the Supplemental Liquidity Basket
during such period pursuant to Section 2.3.1(a) or Section 2.3.1(c) hereof, plus
(iii) the aggregate amount of Capital Expenditures made by Terex and its
Subsidiaries during such period.
Exchange Act. The Securities Exchange Act of 1934, as
amended.
Existing Lenders. Collectively, Congress Financial
Corporation and Foothill Capital Corporation.
Fixed Charge Coverage Ratio. As at any date of determination and with
respect to Terex and its Subsidiaries, the ratio of (a) the Consolidated Cash
Flow of Terex and its Subsidiaries for the fiscal period ending on such date
minus the aggregate amount of Capital Expenditures made by Terex and its
Subsidiaries during such fiscal period to (b) the Consolidated Interest Expense
of Terex and its Subsidiaries for such fiscal period.
Floor Plan Guaranty. The guarantee by any of the Borrowers of
Indebtedness incurred by a franchise dealer or other purchaser or lessor for the
purchase or lease of inventory manufactured or sold by such Borrower, the
proceeds of which Indebtedness is used solely to pay the purchase price of
inventory sold by such Borrower to such franchise dealer and any related fees
and expenses (including finance fees); provided, that (a) to the extent
commercially practicable, the Indebtedness so guaranteed is secured by a
perfected first priority lien on such inventory in favor of the holder of such
Indebtedness, and (b) if such Borrower is required to make payment with respect
to such guarantee, such Borrower will have the right to receive either (i) title
to such inventory, (ii) a valid assignment of a first priority perfected lien in
such inventory or (iii) the net proceeds of any resale of such inventory.
FNBB. The First National Bank of Boston, a national
banking association, in its individual capacity.
generally accepted accounting principles. (a) When used in Section 10
hereof, whether directly or indirectly through reference to a capitalized term
used therein, means (i) principles that are consistent with the principles
promulgated or adopted by the Financial Accounting Standards Board and its
predecessors, in effect for the fiscal period ended on the Balance Sheet Date,
and (ii) to the extent consistent with such principles, the accounting practice
of Terex and its Subsidiaries reflected in its financial statements for the
fiscal period ended on the Balance Sheet Date, and (b) when used in general,
other than as provided above, means principles that are (i) consistent with the
principles promulgated or adopted by the Financial Accounting Standards Board
and its predecessors, as in effect from time to time, and (ii) consistently
applied with past financial statements of Terex and its Subsidiaries adopting
the same principles, provided that in each case referred to in this definition
of "generally accepted accounting principles" a certified public accountant
would, insofar as the use of such accounting principles is pertinent, be in a
position to deliver an unqualified opinion (other than a qualification regarding
changes in generally accepted accounting principles) as to financial statements
in which such principles have been properly applied.
Guaranteed Pension Plan. Any employee pension benefit plan within the
meaning of Section 3(2) of ERISA maintained or contributed to by a Borrower or
any ERISA Affiliate the benefits of which are guaranteed on termination in full
or in part by the PBGC pursuant to Title IV of ERISA, other than a Multiemployer
Plan.
Hazardous Substances. See Section 7.18(b) hereof.
Hedging Obligations. With respect to any Borrower, the obligation of
such Borrower under any of the following agreements or arrangements to the
extent that the primary purpose thereof is reduction of risk to such Borrower of
interest rate or foreign currency exchange rate fluctuations relating to its
customary business and not interest rate or foreign currency speculation: (a)
interest rate swap agreements, interest rate cap agreements and interest rate
collar agreements, (b) other agreements or arrangements designed to protect such
Borrower against fluctuations in interest rates and (c) foreign currency
exchange agreements and other arrangement designed to protect such Borrower
against fluctuations of foreign currency exchange rates.
HLT Classification. See Section 5.12 hereof.
Immaterial Subsidiaries. As at any date of
determination, those Subsidiaries of Terex which each have assets
of less than $20,000,000.
Indebtedness. With respect to any Person (a) all indebtedness of such
Person for borrowed money, (b) all obligations of such Person evidenced by
bonds, debentures, notes or other similar instruments, (c) all obligations of
such Person to pay the deferred purchase price of property or services (other
than trade payables on customary terms incurred in the ordinary course of
business), (d) all indebtedness created or arising under any conditional sale or
other title retention agreement with respect to property acquired by such Person
(even though the rights and remedies of the seller or lender under such
agreement in the event of default are limited to repossession or sale of such
property), (e) all obligations of such Person as lessee under Capitalized
Leases, (f) all obligations, contingent or otherwise, of such Person under
bankers' acceptance and letter of credit facilities, (g) all obligations of such
Person in respect of Hedging Obligations, (h) all Indebtedness of others
guaranteed by such Person, including Floor Plan Guaranties, and (i) all
Indebtedness of the type referred to in clauses (a) through (h) above secured by
(or for which the holder of such Indebtedness has an existing right, contingent
or otherwise, to be secured by) any lien on property (including, without
limitation, accounts and contract rights) owned by such Person, even though such
Person has not assumed or become liable for the payment of such Indebtedness,
provided however, that the amount of such Indebtedness shall (to the extent such
Person has not assumed or become liable for the payment of such Indebtedness) be
the lesser of (i) the fair market value of such property at the time of
determination and (ii) the amount of such Indebtedness. The amount of
Indebtedness of any Person at any date shall be the outstanding balance at such
date of all unconditional obligations as described above and the maximum
liability, upon the occurrence of the contingency giving rise to the obligation,
of any contingent obligations at such date; provided, further, that (A) in the
case of each of clauses (a), (b) and (c) above, the amount of such Indebtedness
will be the amount that would appear as a liability on the balance sheet of such
Person prepared in accordance with generally accepted accounting principles, and
(B) obligations of the Borrowers relating to existing or future common stock
appreciation rights, including, without limitation, obligations evidenced by the
Common Stock Appreciation Rights Agreement (as in effect on the date hereof)
shall not be considered Indebtedness, but for purposes of Section 9 hereof, such
obligations shall be treated as if such obligations constituted Indebtedness
hereunder.
Instrument of Adherence. See Section 8.14 hereof.
Intercreditor Agreement. The Intercreditor Agreement, dated or to be
dated on or prior to the Closing Date, among the Banks, the Agent, the Trustee,
in its capacity as collateral agent, and acknowledged by the Borrowers and in
form and substance satisfactory to the Banks and the Agent.
Interest Payment Date. (a) As to any Base Rate Loan, the last day of
the calendar month which includes the Drawdown Date thereof and (b) as to any
Eurodollar Rate Loan, the last day of the Interest Period of such Eurodollar
Rate Loan.
Interest Period. With respect to each Loan, (a) initially, the period
commencing on the Drawdown Date of such Loan and ending on the last day of one
of the periods set forth below, as selected by the Borrowers in a Loan Request
(i) for any Base Rate Loan, the last day of the calendar month; and (ii) for any
Eurodollar Rate Loan, 1, 2, or 3 months; and (b) thereafter, each period
commencing on the last day of the next preceding Interest Period applicable to
such Loan and ending on the last day of one of the periods set forth above, as
selected by the Borrowers in a Conversion Request; provided that all of the
foregoing provisions relating to Interest Periods are subject to the following:
(A) if any Interest Period with respect to a Eurodollar Rate Loan would
otherwise end on a day that is not a Eurodollar Business Day, that Interest
Period shall be extended to the next succeeding Eurodollar Business Day unless
the result of such extension would be to carry such Interest Period into another
calendar month, in which event such Interest Period shall end on the immediately
preceding Eurodollar Business Day;
(B) if any Interest Period with respect to a Base Rate Loan would end
on a day that is not a Business Day, that Interest Period shall end on the next
succeeding Business Day;
(C) if the Borrowers shall fail to give notice as provided in Section
2.7 hereof, the Borrowers shall be deemed to have requested a conversion of the
affected Eurodollar Rate Loan to a Base Rate Loan and the continuance of all
Base Rate Loans as Base Rate Loans on the last day of the then current Interest
Period with respect thereto;
(D) any Interest Period relating to any Eurodollar Rate Loan that
begins on the last Eurodollar Business Day of a calendar month (or on a day for
which there is no numerically corresponding day in the calendar month at the end
of such Interest Period) shall end on the last Eurodollar Business Day of a
calendar month; and
(E) any Interest Period relating to any Eurodollar Rate Loan that would
otherwise extend beyond the Maturity Date shall end on the Maturity Date.
Inventory. As to any Borrower, all now owned and hereafter acquired
goods (including, without limitation, (a) goods in the possession of such
Borrower or of a bailee or other Person for sale, storage, transit, processing,
use or otherwise and (b) supplies, finished goods, parts and components) which
are: (i) held for sale or lease, (ii) furnished or to be furnished under
contracts of service, or (iii) raw materials, work-in-process and materials used
or consumed in its business.
Investments. All expenditures made and all liabilities incurred
(contingently or otherwise) for the acquisition of stock or Indebtedness of, or
for loans, advances, capital contributions or transfers of property (other than
the disposition of assets permitted under Section 9.5.2 hereof) to, any Person.
In determining the aggregate amount of Investments outstanding at any particular
time: (a) there shall be included as an Investment all interest accrued with
respect to Indebtedness constituting an Investment unless and until such
interest is paid; (b) there shall be deducted in respect of each such Investment
any amount received as a return of capital (but only by repurchase, redemption,
retirement, repayment, liquidating dividend or liquidating distribution); (c)
there shall not be deducted in respect of any Investment any amounts received as
earnings on such Investment, whether as dividends, interest or otherwise, except
that accrued interest included as provided in the foregoing clause (a) may be
deducted when paid; and (d) there shall not be deducted from the aggregate
amount of Investments any decrease in the value thereof.
Letter of Credit. See Section 4.1.1 hereof.
Letter of Credit Application. See Section 4.1.1
hereof.
Letter of Credit Fees. See Section 4.6 hereof.
Letter of Credit Participation. See Section 4.1.4
hereof.
Loan Documents. This Credit Agreement, the Notes, the
Letter of Credit Applications, the Letters of Credit, the
Intercreditor Agreement, the Agency Agreements, the Lock Box
Agreement, the Agent's Fee Letter, and the Security Documents.
Loan Request. See Section 2.6 hereof.
Loans. Revolving credit loans made or to be made by
the Banks to the Borrowers pursuant to Section 2 hereof.
Lock Box Account. See Section 8.13 hereof.
Lock Box Agreement. The Lock Box Agreement, dated or to be dated on or
after the Closing Date, in form and substance reasonably satisfactory to the
Borrower, the Agent and the Banks, among the Borrowers and the Agent.
Majority Banks. As of any date, the Banks holding at least 66-2/3% of
the outstanding principal amount of the Notes on such date; and if no such
principal is outstanding, the Banks whose aggregate Commitment Amounts
constitutes at least 66-2/3% of the Total Commitment.
Material Subsidiaries. All Subsidiaries of Terex which
are not Immaterial Subsidiaries.
Maturity Date. April 7, 2000.
Maximum Availability. As at any date of determination, an amount equal
to the lesser of (a) the Total Commitment and (b) the lesser of (i) Borrowing
Base A plus the Supplemental Liquidity Basket plus the Discretionary Amount, if
any, and (ii) Borrowing Base B minus Hedging Obligations with the Agent.
Maximum Drawing Amount. The maximum aggregate amount that the
beneficiaries may at any time draw under outstanding Letters of Credit, as such
aggregate amount may be reduced from time to time pursuant to the terms of the
Letters of Credit.
Multiemployer Plan. Any multiemployer plan within the
meaning of Section 3(37) of ERISA maintained or contributed to by
a Borrower or any ERISA Affiliate.
Net Proceeds. The aggregate amount received by any Borrower from
the sale of assets or the issuance of such Person's Equity Securities, net of
out-of-pocket expenses (including commissions) incurred in connection with the
sale of such assets or issuance of such Equity Securities.
Non-Affected Bank(s). As at any date of determination,
those Banks which are not Affected Banks.
Non-Cash Charges. Non recurring, non-cash charges deducted from
Consolidated Net Income during any period which are used to create reserves on
the balance sheet of Terex and its Subsidiaries.
Note Indenture. The Indenture, dated as of May 9, 1995, by and among
Terex, as issuer, the Guarantors named therein and the Trustee, in connection
with and governing the rights of the holders of the Senior Secured Notes, as the
same now exists or may hereafter be amended, modified, supplemented, extended,
renewed, restated or replaced.
Note Record. The grid attached to a Note, or the continuation of such
grid, or any other similar record, including computer records, maintained by any
Bank with respect to any Loan referred to in such Note.
Note(s). See Section 2.4 hereof.
Obligations. All indebtedness, obligations and liabilities of the
Borrowers to any of the Banks and the Agent, individually or collectively,
existing on the date of this Credit Agreement or arising thereafter, direct or
indirect, joint or several, absolute or contingent, matured or unmatured,
liquidated or unliquidated, secured or unsecured, arising by contract, operation
of law or otherwise, arising or incurred (a) under this Credit Agreement or any
of the other Loan Documents or in respect of any of the Loans made or
Reimbursement Obligations incurred or any of the Notes, Letter of Credit
Application, Letter of Credit or other instruments at any time evidencing any
thereof or (b) in respect of the Hedging Obligations with the Agent.
Operating Account. Terex's operating account no. 541-
43-650 with FNBB.
outstanding. With respect to the Loans, the aggregate
unpaid principal thereof as of any date of determination.
PBGC. The Pension Benefit Guaranty Corporation created
by Section 4002 of ERISA and any successor entity or entities
having similar responsibilities.
Perfection Certificates. The Perfection Certificates
as defined in the Security Agreement.
Permitted Liens. Liens, security interests and other
encumbrances permitted by Section 9.2 hereof.
Permitted Preferred Stock. Preferred stock issued by any of the
Borrowers after the date hereof which does not, until the Obligations have been
paid in full and the Commitments are terminated, pay any current dividends and
which the holders thereof do not, until the Obligations have been paid in full
and the Commitments are terminated, have any ability to require any redemption
or repurchase of such stock by the issuer thereof.
Person. Any individual, corporation, partnership, trust, unincorporated
association, business, or other legal entity, and any government or any
governmental agency or political subdivision thereof.
Preferred Stock. Any of the Series B Cumulative Redeemable Convertible
Preferred Stock of Terex, the Series A Redeemable Exchangeable Preferred Stock
of Terex Cranes, Inc., and the minority common stock interest in PPM Cranes,
Inc., in each case outstanding on the date hereof, and any securities issued in
connection with any conversion or exchange of the foregoing or in connection
with any adjustments of any of the foregoing, in each case to the extent that
any such conversion, exchange or adjustment is in accordance with the terms of
such instrument as in effect on the date hereof.
Pro Forma Balance Sheet. See Section 7.4.1 hereof.
Rate Adjustment Period. See the definition of
Applicable Margin.
RCRA. See Section 7.18 hereof.
Real Estate. All real property at any time owned or
leased (as lessee or sublessee) by any of the Borrowers.
Reduction Amount. See Section 2.3.1 hereof.
Reduction Date. See Section 2.3.1 hereof.
Reference Bank. FNBB.
Register. See Section 19.3 hereof.
Reimbursement Obligation. The Borrowers' joint and several obligation
to reimburse the Agent and the Banks on account of any drawing under any Letter
of Credit as provided in Section 4.2 hereof.
Required Excess Availability Amount. As at any date of determination,
$20,000,000 minus 75% of the pro forma interest reduction on the Senior Secured
Notes resulting from repurchases and redemptions of the Senior Secured Notes
after the Closing Date which are permitted under Section 9.13 hereof, as
confirmed by a certificate of the Chief Financial Officer of Terex setting forth
such calculation.
Restricted Subsidiaries. All wholly-owned Subsidiaries of Terex,
whether existing on the Closing Date or organized or acquired after the Closing
Date, which are organized under the laws of the United States or any state or
territory thereof and listed on Schedule 1.2 attached hereto.
XXXX. See Section 7.18 hereof.
Security Agreement. The Security Agreement, dated or to be dated on or
prior to the Closing Date, among the Borrowers and the Agent and substantially
in the form of Exhibit E attached hereto.
Security Documents. The Security Agreement, all security agreements
delivered to the Agent pursuant to Section 8.14 hereof, and all instruments and
documents required to be delivered pursuant thereto.
Sellers. Collectively, Simon United States Holdings,
Inc., a Delaware corporation, and Simon Overseas Holdings
Limited, a company incorporated under the laws of England.
Senior Secured Notes. Individually and collectively, the 13-1/4% Senior
Secured Notes due 2002 issued by Terex pursuant to the Note Indenture, as the
same now exist or may hereafter be amended, modified, supplemented, extended,
renewed, restated or replaced.
Settlement. The making of, or receiving of payments, in immediately
available funds, by the Banks to the extent necessary to cause each Bank's
actual share of the outstanding amount of Loans (after giving effect to any Loan
Request) to be equal to each Bank's Commitment Percentage of the outstanding
amount of such Loans (after giving effect to any Loan Request), in any case
where, prior to such event or action, the actual share is not so equal.
Settlement Amount. See Section 2.9(a) hereof.
Settlement Date. Any of (a) the Drawdown Date relating to any Loan
Request or the date on which any Loans are repaid pursuant to Section 3.3
hereof, (b) the Friday of each week, or if Friday is not a Business Day, the
Business Day immediately following such Friday, (c) the Business Day immediately
following the Agent becoming aware of the existence of any Event of Default, (d)
any Business Day on which the amount of Loans outstanding from FNBB plus FNBB's
Commitment Percentage of the sum of the Maximum Drawing Amount of all Letters of
Credit and any Unpaid Reimbursement Obligations is equal to or greater than
FNBB's Commitment Percentage of the Total Commitment, (e) the Business Day
immediately following any Business Day on which the amount of Loans outstanding
increases or decreases by more than $5,000,000 as compared to the previous
Settlement Date, (f) any day on which any conversion of a Base Rate Loan to a
Eurodollar Rate Loan occurs, or (g) any Business Day on which the amount of
outstanding Loans decreases and the amount of FNBB's Loans outstanding equals
$0.00.
Settling Bank. See Section 2.9(a) hereof.
Subsidiary. Any corporation, association, trust, or other business
entity of which the designated parent shall at any time own directly or
indirectly through a Subsidiary or Subsidiaries at least a majority (by number
of votes) of the outstanding Voting Stock.
Supplemental Applicable Margin. For each period set
forth below, the Supplemental Applicable Margin shall be the
percentage set forth opposite such period:
Period Supplemental Applicable
Margin
Closing Date to March 31, 1998 2.50%
April 1, 1998 to March 31, 1999 3.00%
April 1, 1999 to Maturity Date 3.50%
Supplemental Liquidity Basket. An amount equal to
$25,000,000, as reduced from time to time pursuant to Section 2.3
hereof.
Terex. As defined in the preamble.
Total Commitment. The sum of the Commitment Amounts of
the Banks, as in effect from time to time.
Total Financial Obligations. With respect to any fiscal period, an
amount equal to the sum of all principal payments on the Loans that become due
and payable or that are to become due and payable during such fiscal period
pursuant to this Credit Agreement. Demand obligations under the Credit Agreement
shall be deemed to be due and payable during any fiscal period during which such
obligations are outstanding.
Trustee. United States Trust Company of New York, a New York banking
corporation, acting in its capacity as trustee or as collateral agent on behalf
of the holders of the Senior Secured Notes pursuant to the Note Indenture and
the agreements delivered in connection therewith, and its successors and assigns
(and including, without limitation, any successor, replacement, assignee or
additional person at any time acting as trustee and/or collateral agent for the
benefit of the holders of the Senior Secured Notes).
Type. As to any Loan, its nature as a Base Rate Loan
or a Eurodollar Rate Loan.
Uniform Customs. With respect to any Letter of Credit, the Uniform
Customs and Practice for Documentary Credits (1993 Revision), International
Chamber of Commerce Publication No. 500 or any successor version thereto adopted
by the Agent in the ordinary course of its business as a letter of credit issuer
and in effect at the time of issuance of such Letter of Credit.
Unpaid Reimbursement Obligation. Any Reimbursement Obligation for which
the Borrowers do not reimburse the Agent and the Banks on the date specified in,
and in accordance with, Section 4.2 hereof.
Unrestricted Subsidiaries. All subsidiaries of Terex
that are not Restricted Subsidiaries.
Voting Stock. Stock or similar interests, of any class or classes
(however designated), the holders of which are at the time entitled, as such
holders, to vote for the election of a majority of the directors (or persons
performing similar functions) of the corporation, association, trust or other
business entity involved, whether or not the right so to vote exists by reason
of the happening of a contingency.
Section 1.2 Rules of Interpretation.
(a) A reference to any document or agreement shall include such
document or agreement as amended, modified or supplemented from time to time in
accordance with its terms and the terms of this Credit Agreement.
(b) The singular includes the plural and the
plural includes the singular.
(c) A reference to any law includes any amendment
or modification to such law.
(d) A reference to any Person includes its
permitted successors and permitted assigns.
(e) Accounting terms not otherwise defined herein have the
meanings assigned to them by generally accepted accounting principles applied on
a consistent basis by the accounting entity to which they refer.
(f) The words "include", "includes" and
"including" are not limiting.
(g) All terms not specifically defined herein or by generally
accepted accounting principles, which terms are defined in the Uniform
Commercial Code as in effect in the Commonwealth of Massachusetts, have the
meanings assigned to them therein, with the term "instrument" being that defined
under Article 9 of the Uniform Commercial Code.
(h) Reference to a particular "Section " refers to that section
of this Credit Agreement unless otherwise indicated.
(i) The words "herein", "hereof", "hereunder" and words of like
import shall refer to this Credit Agreement as a whole and not to any particular
section or subdivision of this Credit Agreement.
Section 2 THE REVOLVING CREDIT FACILITY.
Section 2.1 Commitment to Lend. Subject to the terms and conditions set
forth in this Credit Agreement, each of the Banks severally agrees to lend to
the Borrowers and the Borrowers may borrow, repay, and reborrow from time to
time between the Closing Date and the Maturity Date upon notice by the Borrowers
to the Agent given in accordance with Section 2.6 hereof, such sums as are
requested by the Borrowers up to a maximum aggregate amount outstanding (after
giving effect to all amounts requested) at any one time equal to such Bank's
Commitment Amount minus such Bank's Commitment Percentage of the sum of the
Maximum Drawing Amount and all Unpaid Reimbursement Obligations, provided that
the sum of the outstanding amount of the Loans (after giving effect to all
amounts requested) plus the Maximum Drawing Amount and all Unpaid Reimbursement
Obligations shall not at any time exceed the Maximum Availability. The Loans
shall be made pro rata in accordance with each Bank's Commitment Percentage.
Each request for a Loan hereunder shall constitute a representation and warranty
by the Borrowers that the conditions set forth in Section Section 11 and 12
hereof, in the case of the initial Loans to be made on the Closing Date, and
Section 12 hereof, in the case of all other Loans, have been satisfied on the
date of such request or waived by the Banks in accordance with Section 26
hereof.
Section 2.2 Commitment Fee. The Borrowers agree to pay to the Agent for
the accounts of the Banks in accordance with their respective Commitment
Percentages a commitment fee calculated at the rate of 0.375% per annum on the
average daily amount during each calendar quarter or portion thereof from the
Closing Date to the Maturity Date by which the Total Commitment minus the sum of
the Maximum Drawing Amount and all Unpaid Reimbursement Obligations exceeds the
outstanding amount of Loans during such calendar quarter. The commitment fee
shall be payable quarterly in arrears on the first day of each calendar quarter
for the immediately preceding calendar quarter commencing on the first such date
following the date hereof, with a final payment on the Maturity Date or any
earlier date on which the Commitments shall terminate.
Section 2.3 Reduction of Total Commitment and
Supplemental Liquidity Basket.
Section rpart Mandatory Reductions of Supplemental Liquidity
Basket. (a) Unless terminated earlier pursuant to the provisions of this Section
2.3, on each of the dates set forth in the table below (each such date being
referred to as a "Reduction Date"), the Supplemental Liquidity Basket shall be
automatically reduced by the amount set forth opposite such date in the column
headed "Reduction Amount" set forth below, as such Reduction Amount may be
adjusted and in effect from time to time pursuant to this Section 2.3:
Reduction Date Reduction Amount
March 31, 1998 $8,333,333
March 31, 1999 $8,333,333
March 31, 2000 $8,333,334
On each Reduction Date there shall become absolutely and
unconditionally due and payable, and the Borrowers hereby absolutely and
unconditionally, jointly and severally, promise to pay to the Agent for the
account of the Banks, the amount by which the sum of the aggregate principal
amount of all Loans outstanding plus the Maximum Drawing Amount of all Letters
of Credit and all Unpaid Reimbursement Obligations exceeds the Maximum
Availability after giving effect to the reduction of the Supplemental Liquidity
Basket as set forth herein. No reduction of the Supplemental Liquidity Basket
may be reinstated.
(b) In addition, on March 31 of each fiscal year of Terex and its
Subsidiaries, the Supplemental Liquidity Basket shall be automatically reduced
by an amount equal to 75% of the aggregate amount of the Excess Cash Flow of
Terex and its Subsidiaries for the immediately preceding fiscal year. At the
time of each mandatory reduction in the Supplemental Liquidity Basket under this
Section 2.3.1(b), the Reduction Amount for each Reduction Date occurring after
such time shall be adjusted by applying the amount of such mandatory reduction
against the subsequent Reduction Amounts in the inverse order in which such
Reduction Amounts appear in the table set forth in Section 2.3.1(a).
(c) If, at any time after the Closing Date, any of the Borrowers
receives Net Proceeds from the issuance by any of the Borrowers of its Equity
Securities, the Supplemental Liquidity Basket shall be automatically reduced two
Business Days after the receipt of such Net Proceeds by such Borrower as
follows:
(i) first, by the lesser of the amount of
such Net Proceeds and $10,000,000, with Net Proceeds not to exceed $4,333,333
applied against the subsequent Reduction Amounts in the order in which such
Reduction Amounts appear in the table set forth in Section 2.3.1(a) and the
remainder of such Net Proceeds applied against the subsequent Reduction Amounts
in the inverse order in which such Reduction Amounts appear in the table set
forth in Section 2.3.1(a) hereof; and
(ii) second, by the amount of such Net
Proceeds in excess of $10,000,000 applied against the subsequent Reduction
Amounts in the inverse order in which such Reduction Amounts appear in the table
set forth in Section 2.3.1(a), provided that the Borrowers may apply Net
Proceeds in an amount not to exceed $91,500,000 to the redemption or repurchase
of Senior Secured Notes or Distributions in respect of the Preferred Stock, in
each case pursuant to Section 9.13 hereof and the Supplemental Liquidity Basket
shall not be reduced by such amounts. At the time of each mandatory reduction in
the Supplemental Liquidity Basket under this Section 2.3.1(c)(ii), the Reduction
Amount for each Reduction Date occurring after such time shall be adjusted by
applying the amount of such mandatory reduction against the subsequent Reduction
Amounts in the inverse order in which such Reduction Amounts appear in the table
set forth in Section 2.3.1(a).
Section 2.3.2 Optional Reduction of Total Commitment and
Supplemental Liquidity Basket. The Borrowers shall have the right at any time
and from time to time upon five (5) Business Days' prior written notice to the
Agent to reduce by $10,000,000 or a larger integral multiple of $1,000,000 the
unborrowed portion of the Total Commitment and/or the Supplemental Liquidity
Basket or terminate entirely the Commitments, whereupon, in the case of the
reduction of the Total Commitment, the Commitment Amounts of the Banks shall be
reduced pro rata in accordance with their respective Commitment Percentages of
the amount specified in such notice or, as the case may be, the Commitments of
the Banks shall be terminated. At the time of each voluntary reduction in the
Supplemental Liquidity Basket under this Section 2.3.2, the Reduction Amounts
for each Reduction Date occurring after such time shall be adjusted by applying
the amount of such voluntary reduction against the subsequent Reduction Amounts
in the inverse order of maturity. Promptly after receiving any notice of the
Borrowers delivered pursuant to this Section 2.3.2, the Agent will notify the
Banks of the substance thereof. Upon the effective date of any such reduction or
termination, the Borrowers shall pay to the Agent for the respective accounts of
the Banks the full amount of any commitment fee then accrued on the amount of
the reduction. No reduction of the Total Commitment or the Supplemental
Liquidity Basket may be reinstated.
Section 2.3.3 Prepayment Premium. If the Borrowers repay or
prepay all outstanding Loans and the Commitments are terminated in their
entirety, whether in a single transaction or in a series of related
transactions, and the termination is concluded on or prior to the first
anniversary of the Closing Date, the Borrowers shall pay to the Agent a premium
in an amount equal to 1/2% of the Total Commitment as in effect on the Closing
Date.
Section 2.4 The Notes. The Loans shall be evidenced by separate
promissory notes of the Borrowers in substantially the form of Exhibit A
attached hereto (each a "Note"), dated as of the Closing Date and completed with
appropriate insertions. One Note shall be payable to the order of each Bank in a
principal amount equal to such Bank's Commitment Amount or, if less, the
outstanding amount of all Loans made by such Bank, plus interest accrued
thereon, as set forth below. The Borrowers irrevocably authorize each Bank to
make or cause to be made, at or about the time of the Drawdown Date of any Loan
or at the time of receipt of any payment of principal on such Bank's Note, an
appropriate notation on such Bank's Note Record reflecting the making of such
Loan or (as the case may be) the receipt of such payment. The outstanding amount
of the Loans set forth on such Bank's Note Record shall be prima facie evidence
of the principal amount thereof owing and unpaid to such Bank absent manifest
error, but the failure to record, or any error in so recording, any such amount
on such Bank's Note Record shall not limit or otherwise affect the obligations
of the Borrowers hereunder or under any Note to make payments of principal of or
interest on any Note when due (without giving effect to any such error in
recording).
Section 2.5 Interest on Loans. (a) Except as
otherwise provided in clause (b) below and Section 5.11 hereof,
(i) each Base Rate Loan shall bear
interest for the period commencing with the Drawdown Date thereof and ending on
the last day of the Interest Period with respect thereto at the rate of the Base
Rate plus the Applicable Margin; and
(ii) each Eurodollar Rate Loan shall bear
interest for the period commencing with the Drawdown Date thereof and ending on
the last day of the Interest Period with respect thereto at the rate of the
Eurodollar Rate determined for such Interest Period plus the Applicable Margin.
(b) Notwithstanding clause (a) of this Section 2.5 and except as
otherwise provided in Section 5.11 hereof, if the sum of the outstanding amount
of Loans plus the Maximum Drawing Amount of all Letters of Credit and all Unpaid
Reimbursement Obligations exceed Borrowing Base A at any time, the aggregate
outstanding amount of the Loans which, when added to the Maximum Drawing Amount
of all Letters of Credit and all Unpaid Reimbursement Obligations, are in excess
of Borrowing Base A shall be Base Rate Loans and shall bear interest at the Base
Rate plus the Supplemental Applicable Margin.
(c) The Borrowers jointly and severally promise to pay interest
on each Loan in arrears on each Interest Payment Date with respect thereto.
Section 2.6 Requests for Loans. (a) Terex, on behalf of itself and each
of the other Borrowers, shall give to the Agent written notice in the form of
Exhibit C attached hereto (or telephonic notice confirmed in a writing in the
form of Exhibit C attached hereto) of each Loan requested hereunder (a "Loan
Request") no less than (a) one (1) Business Day prior to the proposed Drawdown
Date of any Base Rate Loan and (b) three (3) Eurodollar Business Days prior to
the proposed Drawdown Date of any Eurodollar Rate Loan. Each such notice shall
specify (i) the principal amount of the Loan requested, (ii) the proposed
Drawdown Date of such Loan, (iii) the Interest Period for such Loan and (iv) the
Type of such Loan. Promptly upon receipt of any such notice, the Agent shall
notify each of the Banks thereof. Each Loan Request shall be irrevocable and
binding on the Borrowers and shall obligate the Borrowers to accept the Loan
requested from the Banks on the proposed Drawdown Date. Each Loan Request shall
be in a minimum aggregate amount of $1,000,000 or an integral multiple thereof.
(b) Notwithstanding the notice and minimum amount requirements
set forth in Section 2.6(a) hereof but otherwise in accordance with the terms
and conditions of this Credit Agreement, FNBB may, in its sole and absolute
discretion and without conferring with the other Banks, make Loans to the
Borrowers (i) by the entry of credits to the Operating Account to cover checks
or other charges which a Borrower has drawn or made against such account, (ii)
to fund the Reimbursement Obligations of the Borrowers pursuant to Section 4.2
hereof, or (iii) in an amount as otherwise requested by the Borrowers. Each of
the Borrowers hereby requests and authorizes FNBB to make from time to time such
Loans by means of appropriate entries of such credits sufficient to cover checks
and other charges then presented. Each of the Borrowers acknowledges and agrees
that the making of such Loans shall, in each case, be subject in all respects to
the provisions of this Credit Agreement as if they were Loans covered by a Loan
Request including, without limitation, the limitations set forth in Section 2.1
hereof and the requirements that the applicable provisions of Section Section 11
and 12 hereof, in the case of Loans made on the Closing Date, and Section 12
hereof, in the case of all Loans, be satisfied. All actions taken by FNBB
pursuant to the provisions of this Section 2.6(b) shall be conclusive and
binding on the Borrowers absent FNBB's gross negligence, willful misconduct or
fraud. Loans made pursuant to this Section 2.6(b) shall be Base Rate Loans until
converted in accordance with the provisions of the Credit Agreement and, prior
to a Settlement, interest payable on such Loans shall be for the account of the
FNBB and payment of principal on such Loans shall for the account of the FNBB.
Section 2.7 Conversion Options.
Section 2.7.1 Conversion to Different Type of Loan. The Borrowers
may elect from time to time to convert any outstanding Loan to a Loan of another
Type, provided that (a) with respect to any such conversion of a Loan to a Base
Rate Loan, the Borrowers shall give the Agent at least one (1) Business Day
prior written notice of such election; (b) with respect to any such conversion
of a Base Rate Loan to a Eurodollar Rate Loan, the Borrowers shall give the
Agent at least three (3) Eurodollar Business Days prior written notice of such
election; (c) with respect to any such conversion of a Eurodollar Rate Loan into
a Base Rate Loan, such conversion shall only be made on the last day of the
Interest Period with respect thereto, (d) no Loan may be converted into a
Eurodollar Rate Loan when any Event of Default has occurred and is continuing
and (e) the aggregate outstanding amount of Loans which, when added to the
Maximum Drawing Amount and all Unpaid Reimbursement Obligation, are in excess of
Borrowing Base A may not be converted into Eurodollar Rate Loans. On the date on
which such conversion is being made each Bank shall take such action as is
necessary to transfer its Commitment Percentage of such Loans to its Domestic
Lending Office or its Eurodollar Lending Office, as the case may be. Except as
provided in clause (e) above, all or any part of outstanding Loans of any Type
may be converted into a Loan of another Type as provided herein, provided that
any partial conversion shall be in an aggregate principal amount of $1,000,000
or a whole multiple thereof. Each Conversion Request relating to the conversion
of a Loan to a Eurodollar Rate Loan shall be irrevocable by the Borrowers.
Section 2.7.2 Continuation of Type of Loan. Any Loan of any Type
may be continued as a Loan of the same Type upon the expiration of an Interest
Period with respect thereto by compliance by the Borrowers with the notice
provisions contained in Section 2.7.1 hereof; provided that no Eurodollar Rate
Loan may be continued as such when any Event of Default has occurred and is
continuing, but shall be automatically converted to a Base Rate Loan on the last
day of the first Interest Period relating thereto ending during the continuance
of any Event of Default of which officers of the Agent active upon the
Borrowers' account have actual knowledge. In the event that the Borrowers fail
to provide any such notice with respect to the continuation of any Eurodollar
Rate Loan as such, then such Eurodollar Rate Loan shall be automatically
converted to a Base Rate Loan on the last day of the first Interest Period
relating thereto. The Agent shall notify the Banks promptly when any such
automatic conversion contemplated by this Section 2.7 is scheduled to occur.
Section 2.7.3 Eurodollar Rate Loans. (a) Any conversion to or
from Eurodollar Rate Loans shall be in such amounts and be made pursuant to such
elections so that, after giving effect thereto, the aggregate principal amount
of all Eurodollar Rate Loans having the same Interest Period shall not be less
than $5,000,000 or a whole multiple of $1,000,000 in excess thereof and there
shall not be more than three (3) Eurodollar Rate Loans outstanding at any time.
(b) If the sum of the aggregate
outstanding amount of Loans plus the Maximum Drawing Amount of all Letters of
Credit and all Unpaid Reimbursement Obligations exceed Borrowing Base A at any
time, the aggregate amount of Loans which, when added to the Maximum Drawing
Amount and all Unpaid Reimbursement Obligations, are in excess of Borrowing Base
A shall convert automatically to Base Rate Loans and the Borrowers shall
indemnify the Banks as provided in Section 5.10(c) hereof for any reasonable
costs incurred by the Banks in connection with such conversion.
(c) Notwithstanding the other provisions
of this Credit Agreement, the Borrowers hereby agree that they will not request
any Eurodollar Rate Loans or convert any Base Rate Loans into Eurodollar Rate
Loans until the earlier to occur of (i) the 45th day after the Closing Date and
(ii) the date on which the Agent notifies the Borrowers that FNBB has completed
the primary syndication of its Commitment pursuant to Section 19 hereof.
Section 2.8 Funds for Loans.
Section 2.8.1 Funding Procedures. Not later than 11:00 a.m.
(Boston time) on the proposed Drawdown Date of any Loans, each of the Banks will
make available to the Agent, at the Agent's Head Office, in immediately
available funds, the amount of such Bank's Commitment Percentage of the amount
of the requested Loans. Upon receipt from each Bank of such amount, and upon
receipt of the documents required by Section Section 11 and 12 hereof and the
satisfaction of the other conditions set forth therein, to the extent
applicable, the Agent will deposit into the Operating Account the aggregate
amount of such Loans made available to the Agent by the Banks. The failure or
refusal of any Bank to make available to the Agent at the aforesaid time and
place on any Drawdown Date the amount of its Commitment Percentage of the
requested Loans shall not relieve any other Bank from its several obligation
hereunder to make available to the Agent the amount of such other Bank's
Commitment Percentage of any requested Loans.
Section 2.8.2 Advances by Agent. The Agent may, unless notified
to the contrary by any Bank prior to a Drawdown Date, assume that such Bank has
made available to the Agent on such Drawdown Date the amount of such Bank's
Commitment Percentage of the Loans to be made on such Drawdown Date, and the
Agent may (but it shall not be required to), in reliance upon such assumption,
make available to the Borrowers by deposit into the Operating Account of a
corresponding amount. If any Bank makes available to the Agent such amount on a
date after such Drawdown Date, such Bank shall pay to the Agent on demand an
amount equal to the product of (a) the average computed for the period referred
to in clause (c) below, of the weighted average interest rate paid by the Agent
for federal funds acquired by the Agent during each day included in such period,
times (b) the amount of such Bank's Commitment Percentage of such Loans, times
(c) a fraction, the numerator of which is the number of days that elapse from
and including such Drawdown Date to the date on which the amount of such Bank's
Commitment Percentage of such Loans shall become immediately available to the
Agent, and the denominator of which is 365. A statement of the Agent submitted
to such Bank with respect to any amounts owing under this paragraph shall be
prima facie evidence of the amount due and owing to the Agent by such Bank. If
the amount of such Bank's Commitment Percentage of such Loans is not made
available to the Agent by such Bank within three (3) Business Days following
such Drawdown Date, the Agent shall be entitled to recover such amount from the
Borrowers on demand, with interest thereon at the rate per annum applicable to
the Loans made on such Drawdown Date.
Section 2.9 Settlements; Failure to Make Funds Available. (a) On each
Settlement Date, the Agent shall, not later than 12:00 noon (Boston time), give
telephonic or facsimile notice (i) to the Banks and the Borrowers of the
respective outstanding amount of Loans made by FNBB on behalf of the Banks
pursuant to Section 2.6(b) hereof and the payments made against FNBB's Loans
pursuant Section 3.2(a) hereof from the immediately preceding Settlement Date
through the close of business on the prior day and the amount of any Eurodollar
Rate Loans to be made (following the giving of notice pursuant to Section
2.6(a)) on such date pursuant to a Loan Request and (ii) to the Banks of the
amount (a "Settlement Amount") that each Bank (each, a "Settling Bank") shall
pay to effect a Settlement of any Loan. A statement of the Agent submitted to
the Banks and the Borrowers with respect to any amounts owing under this Section
2.9 shall be prima facie evidence of the amount due and owing. Each Settling
Bank shall, not later than 2:00 p.m. (Boston time) on such Settlement Date,
effect a wire transfer of immediately available funds to the Agent for the
account of FNBB in the amount of such Settling Bank's Settlement Amount. All
funds advanced by any Bank as a Settling Bank pursuant to this Section 2.9 shall
for all purposes be treated as a Loan made by such Settling Bank to the
Borrowers and all funds received by any Settling Bank pursuant to this Section
2.9 shall for all purposes be treated as repayment of amounts owed with respect
to Loans made by such Settling Bank. In the event that any bankruptcy,
reorganization, liquidation, receivership or similar cases or proceedings in
which any of the Borrowers is a debtor prevent a Settling Bank from making any
Loan to effect a Settlement as contemplated hereby, such Settling Bank will make
such disposition and arrangements with the other Banks with respect to such
Loans, either by way of purchase of participations, distribution, pro tanto
assignment of claims, subrogation or otherwise as shall result in each Bank's
share of the outstanding Loans being equal, as nearly as may be, to such Bank's
Commitment Percentage of the outstanding amount of the Loans.
(b) If any Settling Bank makes available
to the Agent its Settlement Amount on a date after such Settlement Date, such
Settling Bank shall pay to the Agent on demand an amount equal to the product of
(i) the average computed for the period referred to in clause (iii) below, of
the weighted average interest rate paid by the Agent for federal funds acquired
by the Agent during each day included in such period, times (ii) the amount of
such Settlement Amount, times (iii) a fraction, the numerator of which is the
number of days that elapse from and including such Settlement Date to the date
on which the amount of such Settlement Amount shall become immediately available
to the Agent, and the denominator of which is 360. A statement of the Agent
submitted to such Settling Bank with respect to any amounts owing under this
paragraph shall be prima facie evidence of the amount due and owing to FNBB by
such Settling Bank. If such Settling Bank's Settlement Amount is not made
available to the Agent by such Settling Bank within three (3) Business Days
following such Settlement Date, the Agent shall be entitled to recover such
amount from the Borrowers on demand, with interest thereon at the rate per annum
applicable to Base Rate Loans as of such Settlement Date.
(c) The failure or refusal of any Settling
Bank to make available to the Agent at the aforesaid time and place on any
Settlement Date the amount of its Settlement Amount (i) shall not relieve any
other Settling Bank from its several obligations hereunder to make available to
the Agent the amount of such other Settling Bank's Settlement Amount and (ii)
shall not impose upon any other Bank any liability with respect to such failure
or refusal or otherwise increase the Commitment of such other Bank.
Section 2.10 Change in the Borrowing Bases. The Borrowing Base A shall
be determined weekly (or at such other interval as may be specified pursuant to
Section 8.4(f) hereof) by the Agent by reference to the Borrowing Base Report
delivered to the Banks and the Agent pursuant to Section 8.4(f) hereof.
Borrowing Base B shall be determined monthly by the Agent by reference to the
Borrowing Base Report delivered to the Banks and the Agent pursuant to Section
8.4(h) hereof.
Section 2.11 Modification of Borrowing Base A. If the Agent determines
in good faith that: (a) the dilution with respect to the Accounts for a Borrower
for any period (based on the ratio of (i) the aggregate amount of reductions in
Accounts for such Borrower other than as a result of payments in cash to (ii)
the aggregate amount of total sales of such Borrower) has increased in any
material respect or may be reasonably anticipated to increase in any material
respect above historical levels, or (b) the general creditworthiness of account
debtors of a Borrower has declined or (c) the number of days of the turnover of
the Inventory of a Borrower for any period has changed in any material adverse
respect or (d) the liquidation value of the Inventory of a Borrower, or any
category thereof, has decreased in any material respect, or (e) the nature and
quality of the Inventory of a Borrower has deteriorated in any material respect
or the mix of such Inventory has changed materially and adversely, then (A) the
Agent shall so notify the Borrowers and the other Banks, and (B) the Borrowers
and the Agent shall thereafter attempt to negotiate in good faith within thirty
(30) days of the date on which the Borrowers receive such notice, modifications
to the definition of Borrowing Base A, Eligible A Accounts Receivable and/or
Eligible A Inventory that will adequately reflect the change in such assets. If
the Borrowers and the Agent are unable to agree to such modification(s) within
thirty (30) days of the date on which the Borrowers receive such notice, then
the Agent shall upon three (3) days' prior written notice to the Borrowers
setting forth in reasonable detail the modified lending formula(s) and the
reasons therefor, reduce the lending formula(s) with respect to Eligible A
Accounts Receivable for any Borrower or reduce the lending formula(s) with
respect to Eligible A Inventory for any Borrower. In determining whether and the
manner in which to reduce the lending formula(s), the Agent shall make such
determinations in its good faith judgment considering the events, conditions,
contingencies or risks which are also considered in determining Eligible A
Accounts Receivable, Eligible A Inventory or in establishing the Availability
Reserves. Upon the effective date of any such modification(s), the Borrowers
shall deliver to the Banks a Borrowing Base Report reflecting Borrowing Base A
as so modified. If upon the effective date of any such modification(s) to
Borrowing Base A, the aggregate principal amount of all Loans outstanding plus
the aggregate Maximum Drawing Amount of all outstanding Letters of Credit plus
the aggregate amount of all Unpaid Reimbursement Obligations exceeds the Maximum
Availability as so modified, the Borrowers shall immediately pay the amount of
such excess to the Agent for application as set forth in Section 3.2 hereof.
Section 3 REPAYMENT OF THE LOANS.
Section 3.1 Maturity. Each of the Borrowers jointly and severally
promises to pay on the Maturity Date, and there shall become absolutely due and
payable on the Maturity Date, all of the Loans outstanding on such date,
together with any and all accrued and unpaid interest thereon.
Section 3.2 Mandatory Repayments of Loans. (a) If at any time the sum
of the outstanding amount of the Loans, the Maximum Drawing Amount of all
Letters of Credit and all Unpaid Reimbursement Obligations exceeds the Maximum
Availability, then the Borrowers shall immediately pay the amount of such excess
to the Agent for the respective accounts of the Banks for application: first, to
any Unpaid Reimbursement Obligations; second, to the Loans made by FNBB which
are subject to Settlement; third, to the Loans which are not subject to
Settlement; and fourth, to provide to the Agent cash collateral for
Reimbursement Obligations as contemplated by Section 4.2(b) and (c) hereof. Each
payment of any Unpaid Reimbursement Obligations or prepayment of Loans shall be
allocated among the Banks, in proportion, as nearly as practicable, to each
Reimbursement Obligation or (as the case may be) the respective unpaid principal
amount of each Bank's Note, with adjustments to the extent practicable to
equalize any prior payments or repayments not exactly in proportion.
(b) Each Borrower hereby agrees to cause all good funds which are
deposited into its accounts with its collection banks to be transferred to the
Lock Box Account on a daily basis pursuant to the Agency Agreements to which
such Borrower is a party. Each Borrower hereby authorizes the Agent to apply
such funds deposited into the Lock Box Account, plus all other funds deposited
into the Lock Box Account pursuant to Section 8.13 hereof, on the first Business
Day immediately following receipt by the Agent of such funds (or on such later
date as the Agent determines that good collected funds have been received), if
no Event of Default has occurred and is continuing, first to any Unpaid
Reimbursement Obligations; second to the Loans made by FNBB which are subject to
Settlement; third to the Loans which are not subject to Settlement; and fourth,
such excess, if any shall be credited to the Operating Account. From and after
the occurrence and during the continuance of an Event of Default, the Agent
shall apply all such funds which are deposited into the Lock Box Account to the
Obligations in the manner set forth in Section 13.4 hereof and to provide cash
collateral for any Obligations not then due and payable, including an amount
equal to 105% of the Maximum Drawing Amount of all outstanding Letters of Credit
to secure the Reimbursement Obligations in respect of such Letters of Credit.
Section 3.3 Optional Repayments of Loans. The Borrowers shall have the
right, at its election, to repay the outstanding amount of the Loans, as a whole
or in part, at any time without penalty or premium, provided that any full or
partial prepayment of the outstanding amount of any Eurodollar Rate Loans
pursuant to this Section 3.3 may be made only on the last day of the Interest
Period relating thereto. The Borrowers shall give the Agent, no later than 10:00
a.m., Boston time, at least two (2) Business Days prior written notice of any
proposed prepayment pursuant to this Section 3.3 of Base Rate Loans and three
(3) Eurodollar Business Days notice of any proposed prepayment pursuant to this
Section 3.3 of Eurodollar Rate Loans, in each case specifying the proposed date
of prepayment of Loans and the principal amount to be prepaid. Each such partial
prepayment of the Loans shall be in an integral multiple of $1,000,000, shall be
accompanied by the payment of accrued interest on the principal prepaid to the
date of prepayment and shall be applied, in the absence of instruction by the
Borrowers, first to the principal of Base Rate Loans and then to the principal
of Eurodollar Rate Loans. Each partial prepayment shall be allocated among the
Banks, in proportion, as nearly as practicable, to the respective unpaid
principal amount of each Bank's Note, with adjustments to the extent practicable
to equalize any prior repayments not exactly in proportion. In no event shall
payments made pursuant to Section 3.2(b) hereof be construed to be optional
prepayments under this Section 3.3.
Section 4 LETTERS OF CREDIT.
Section 4.1 Letter of Credit Commitments.
Section 4.1.1 Commitment to Issue Letters of Credit. Subject to
the terms and conditions hereof and the execution and delivery by the Borrowers
of a letter of credit application on the Agent's customary form (a "Letter of
Credit Application"), the Agent on behalf of the Banks and in reliance upon the
agreement of the Banks set forth in Section 4.1.4 hereof and upon the
representations and warranties of the Borrowers contained herein, agrees, in its
individual capacity, to issue, extend and renew for the account of any of the
Borrowers one or more standby or documentary letters of credit (individually, a
"Letter of Credit"), in such form as may be requested from time to time by the
Borrowers and agreed to by the Agent; provided, however, that, after giving
effect to such request, (a) the sum of the aggregate Maximum Drawing Amount and
all Unpaid Reimbursement Obligations shall not exceed $20,000,000 at any one
time and (b) the sum of (i) the Maximum Drawing Amount on all Letters of Credit,
(ii) all Unpaid Reimbursement Obligations, and (iii) the amount of all Loans
outstanding shall not exceed the Maximum Availability.
Section 4.1.2 Letter of Credit Applications. Each Letter of
Credit Application shall be completed to the reasonable satisfaction of the
Agent. In the event that any provision of any Letter of Credit Application shall
be inconsistent with any provision of this Credit Agreement, then the provisions
of this Credit Agreement shall, to the extent of any such inconsistency, govern.
Section 4.1.3 Terms of Letters of Credit. Each Letter of Credit
issued, extended or renewed hereunder shall, among other things, (a) provide for
the payment of sight drafts for honor thereunder when presented in accordance
with the terms thereof and when accompanied by the documents described therein,
and (b) have an expiry date no later than the date which is fourteen (14) days
(or, if the Letter of Credit is confirmed by a confirmer or otherwise provides
for one or more nominated persons, forty-five (45) days) prior to the Maturity
Date. Each Letter of Credit so issued, extended or renewed shall be subject to
the Uniform Customs.
Section 4.1.4 Reimbursement Obligations of Banks. Each Bank
severally agrees that it shall be absolutely liable, without regard to the
occurrence of any Default or Event of Default or any other condition precedent
whatsoever, to the extent of such Bank's Commitment Percentage, to reimburse the
Agent on demand for the amount of each draft paid by the Agent under each Letter
of Credit to the extent that such amount is not reimbursed by the Borrowers
pursuant to Section 4.2 hereof (such agreement for a Bank being called herein
the "Letter of Credit Participation" of such Bank).
Section 4.1.5 Participations of Banks. Each such payment made by
a Bank shall be treated as the purchase by such Bank of a participating interest
in the Borrowers' Reimbursement Obligation under Section 4.2 hereof in an amount
equal to such payment. Each Bank shall share in accordance with its
participating interest in any interest which accrues pursuant to Section 4.2
hereof.
Section 4.2 Reimbursement Obligation of the Borrowers. In order to
induce the Agent to issue, extend and renew each Letter of Credit and the Banks
to participate therein, each of the Borrowers hereby jointly and severally
agrees to reimburse or pay to the Agent, for the account of the Agent or (as the
case may be) the Banks, with respect to each Letter of Credit issued, extended
or renewed by the Agent hereunder,
(a) except as otherwise expressly provided in Section 4.2(b) and
(c) hereof, on each date that any draft presented under such Letter of Credit is
honored by the Agent, or the Agent otherwise makes a payment with respect
thereto, (i) the amount paid by the Agent under or with respect to such Letter
of Credit, and (ii) the amount of any taxes, reasonable fees, reasonable charges
or other reasonable costs and expenses whatsoever incurred by the Agent or any
Bank in connection with any payment made by the Agent or any Bank under, or with
respect to, such Letter of Credit,
(b) upon the reduction of the Total Commitment (but not the
termination of the Commitments) to an amount less than the Maximum Drawing
Amount, an amount equal to such difference, which amount shall be held by the
Agent for the benefit of the Banks and the Agent as cash collateral for all
Reimbursement Obligations, and
(c) upon the termination of the Commitments, or the acceleration
of the Reimbursement Obligations with respect to all Letters of Credit in
accordance with Section 13 hereof, an amount equal to the then Maximum Drawing
Amount on all Letters of Credit, which amount shall be held by the Agent for the
benefit of the Banks and the Agent as cash collateral in an interest-bearing
account for all Reimbursement Obligations.
Each such payment shall be made to the Agent at the Agent's Head Office
in immediately available funds. Interest on any and all amounts remaining unpaid
by the Borrowers under this Section 4.2 at any time from the date such amounts
become due and payable (whether as stated in this Section 4.2, by acceleration
or otherwise) until payment in full (whether before or after judgment) shall be
payable to the Agent on demand at the rate specified in Section 5.11 hereof for
overdue principal on the Loans. Each payment to be made by the Borrowers under
this Section 4.2 may be made with the proceeds of a Loan made pursuant to
Section 2.6(b) hereof.
Section 4.3 Letter of Credit Payments. If any draft shall be presented
or other demand for payment shall be made under any Letter of Credit, the Agent
shall notify the Borrowers of the date and amount of the draft presented or
demand for payment and of the date and time when it expects to pay such draft or
honor such demand for payment. If the Borrowers fail to reimburse the Agent as
provided in Section 4.2 hereof on or before the date that such draft is paid or
other payment is made by the Agent, the Agent may at any time thereafter notify
the Banks of the amount of any such Unpaid Reimbursement Obligation. No later
than 3:00 p.m. (Boston time) on the Business Day next following the receipt of
such notice, each Bank shall make available to the Agent, at the Agent's Head
Office, in immediately available funds, such Bank's Commitment Percentage of
such Unpaid Reimbursement Obligation, together with an amount equal to the
product of (a) the average, computed for the period referred to in clause (c)
below, of the weighted average interest rate paid by the Agent for federal funds
acquired by the Agent during each day included in such period, times (b) the
amount equal to such Bank's Commitment Percentage of such Unpaid Reimbursement
Obligation, times (c) a fraction, the numerator of which is the number of days
that elapse from and including the date the Agent paid the draft presented for
honor or otherwise made payment to the date on which such Bank's Commitment
Percentage of such Unpaid Reimbursement obligation shall become immediately
available to the Agent, and the denominator of which is 360. The responsibility
of the Agent to the Borrowers and the Banks shall be only to determine that the
documents (including each draft) delivered under each Letter of Credit in
connection with such presentment shall be in conformity in all material respects
with such Letter of Credit.
Section 4.4 Obligations Absolute. Each Borrower's joint and several
obligations under this Section 4 shall be absolute and unconditional under any
and all circumstances and irrespective of the occurrence of any Default or Event
of Default or any condition precedent whatsoever or any setoff, counterclaim or
defense to payment which any Borrower may have or have had against the Agent,
any Bank or any beneficiary of a Letter of Credit. Each Borrower further agrees
with the Agent and the Banks that the Agent and the Banks shall not be
responsible for, and such Borrower's Reimbursement Obligations under Section 4.2
shall not be affected by, among other things, the validity or genuineness of
documents or of any endorsements thereon, even if such documents should in fact
prove to be in any or all respects invalid, fraudulent or forged, or any dispute
between or among any Borrower, the beneficiary of any Letter of Credit or any
financing institution or other party to which any Letter of Credit may be
transferred or any claims or defenses whatsoever of any Borrower against the
beneficiary of any Letter of Credit or any such transferee. The Agent and the
Banks shall not be liable for 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. Each Borrower agrees that
any action taken or omitted by the Agent or any Bank under or in connection with
each Letter of Credit and the related drafts and documents, if done in good
faith and without gross negligence, willful misconduct or fraud, shall be
binding upon the Borrowers and shall not result in any liability on the part of
the Agent or any Bank to the Borrowers.
Section 4.5 Reliance by Issuer. To the extent not inconsistent with
Section 4.4 hereof, the Agent shall be entitled to rely, and shall be fully
protected in relying upon, any Letter of Credit, draft, writing, resolution,
notice, consent, certificate, affidavit, letter, cablegram, telegram, telecopy,
telex or teletype message, statement, order or other document believed by it to
be genuine and correct and to have been signed, sent or made by the proper
Person or Persons and upon advice and statements of legal counsel, independent
accountants and other experts selected by the Agent with reasonable care. The
Agent shall be fully justified in failing or refusing to take any action under
this Credit Agreement unless it shall first have received such advice or
concurrence of the Majority Banks as it reasonably deems appropriate or it shall
first be indemnified to its reasonable satisfaction by the Banks against any and
all liability and expense which may be incurred by it by reason of taking or
continuing to take any such action. The Agent shall in all cases be fully
protected in acting, or in refraining from acting, under this Agreement in
accordance with a request of the Majority Banks, and such request and any action
taken or failure to act pursuant thereto shall be binding upon the Banks and all
future holders of the Notes or of a Letter of Credit Participation.
Section 4.6 Letter of Credit Fees. The Borrowers shall pay to the
Agent, for its own account, a fee in respect of each Letter of Credit issued,
renewed or extended by it calculated at the rate of 1/8% per annum on the face
amount of each such Letter of Credit, payable annually in advance on the date of
such issuance, renewal or extension. The Borrowers shall also pay to the Agent
for the accounts of the Banks (including FNBB in its capacity as a Bank) in
accordance with their Commitment Percentages a fee in respect of each such
Letter of Credit calculated at the rate per annum equal to the Applicable Margin
in effect at such time with respect to Letters of Credit on the face amount of
such Letter of Credit, payable quarterly in arrears commencing on the last day
of the quarter in which such Letter of Credit was issued, renewed or extended.
In addition (but without duplication), the Borrowers shall also pay to the Agent
for its own account the Agent's standard processing, negotiating, amendment and
administrative fees, as determined in accordance with the Agent's customary fees
and charges for similar facilities. The fees payable by the Borrowers pursuant
to this Section 4.6 shall be referred to herein, collectively, as the "Letter of
Credit Fees".
Section 5 CERTAIN GENERAL PROVISIONS.
Section 5.1 Closing Fee. Each of the Borrowers jointly and severally
agrees to pay to the Agent on the Closing Date a closing fee in the amount set
forth in that certain letter agreement, dated as of the date hereof, among the
Borrowers and the Agent (the "Agent's Fee Letter").
Section 5.2 Agent's Fee. Each of the Borrowers jointly and severally
promises to pay to the Agent, for the Agent's own account, an agent's fee (the
"Agent's Fee") in the amounts and at the times provided in the Agent's Fee
Letter.
Section 5.3 Funds for Payments.
Section 5.3.1 Payments to Agent. All payments of principal,
interest, Reimbursement Obligations, commitment fees, Letter of Credit Fees and
any other amounts due hereunder or under any of the other Loan Documents shall
be made to the Agent, for the respective accounts of the Banks and the Agent, at
the Agent's Head Office or at such other location in the Boston, Massachusetts,
area that the Agent may from time to time designate in writing, in each case in
immediately available funds.
Section 5.3.2 No Offset, Etc. (a) All payments by the Borrowers
hereunder and under any of the other Loan Documents shall be made without setoff
or counterclaim and free and clear of and without deduction for any taxes,
levies, imposts, duties, charges, fees, deductions, withholdings, compulsory
loans, restrictions or conditions of any nature now or hereafter imposed or
levied by any jurisdiction or any political subdivision thereof or taxing or
other authority therein unless a Borrower is compelled by law to make such
deduction or withholding. If any such obligation is imposed upon a Borrower with
respect to any amount payable by it hereunder or under any of the other Loan
Documents, the Borrowers will pay to the Agent, for the account of the Banks or
(as the case may be) the Agent, on the date on which such amount is due and
payable hereunder or under such other Loan Document, such additional amount in
Dollars as shall be necessary to enable the Banks or the Agent to receive the
same net amount which the Banks or the Agent would have received on such due
date had no such obligation been imposed upon such Borrower. Upon the reasonable
request of the Agent, Borrowers will deliver promptly to the Agent certificates
or other valid vouchers for all taxes or other charges deducted from or paid
with respect to payments made by the Borrowers hereunder or under such other
Loan Document.
(b) Each Bank that is not incorporated
under the laws of the United States or a state thereof agrees that (to the
extent it has not already done so prior to the Closing Date or the date on which
such Bank becomes a Bank hereunder, as applicable) it will deliver to the
Borrowers on the Closing Date or the date on which such Bank becomes a Bank
hereunder, as applicable, two duly completed and accurate originals of a valid
United States Internal Revenue Service Form 4224 or Form 1001 or any successor
form thereto indicating that such Bank is entitled to receive payments under
this Credit Agreement, including fees, without deduction or withholding of any
United States federal income taxes. Subject to any change in applicable laws or
regulations, such Bank undertakes to deliver to the Borrowers, upon request, two
duly completed and accurate originals of Form 1001 or Form 4224, or successor
form, on or before the date that any such form expires or becomes obsolete,
indicating that such Bank is entitled to receive payments under this Credit
Agreement without deduction or withholding of any United States federal income
taxes.
Section 5.4 Computations. All computations of interest on the Loans and
of commitment fees, Letter of Credit Fees or other fees shall be based on a
360-day year and paid for the actual number of days elapsed. Except as otherwise
provided in the definition of the term "Interest Period" with respect to
Eurodollar Rate Loans, whenever a payment hereunder or under any of the other
Loan Documents becomes due on a day that is not a Business Day, the due date for
such payment shall be extended to the next succeeding Business Day, and interest
shall accrue during such extension. The outstanding amount of the Loans as
reflected on the Note Records from time to time shall be considered correct and
binding on the Borrowers, absent manifest error, unless within five (5) Business
Days after receipt of any notice by the Agent or any of the Banks of such
outstanding amount, the Agent or such Bank shall notify the Borrowers to the
contrary.
Section 5.5 Inability to Determine Eurodollar Rate. In the event, prior
to the commencement of any Interest Period relating to any Eurodollar Rate Loan,
the Agent shall determine or be notified by the Majority Banks that adequate and
reasonable methods do not exist for ascertaining the Eurodollar Rate that would
otherwise determine the rate of interest to be applicable to any Eurodollar Rate
Loan during any Interest Period, the Agent shall forthwith give notice of such
determination (which shall be conclusive and binding on the Borrowers and the
Banks) to the Borrowers and the Banks. In such event (a) any Loan Request or
Conversion Request with respect to Eurodollar Rate Loans shall be automatically
withdrawn and shall be deemed a request for Base Rate Loans, (b) each Eurodollar
Rate Loan will automatically, on the last day of the then current Interest
Period relating thereto, become a Base Rate Loan, and (c) the obligations of the
Banks to make Eurodollar Rate Loans shall be suspended until the Agent or the
Majority Banks determine that the circumstances giving rise to such suspension
no longer exist, whereupon the Agent or, as the case may be, the Agent upon the
instruction of the Majority Banks, shall so notify the Borrowers and the Banks.
Section 5.6 Illegality. Notwithstanding any other provisions herein, if
any present or future law, regulation, treaty or directive or in the
interpretation or application thereof shall make it unlawful for any Bank to
make or maintain Eurodollar Rate Loans, such Bank shall forthwith give notice of
such circumstances to the Borrowers and the other Banks and thereupon (a) the
Commitment of such Bank to make Eurodollar Rate Loans or convert Base Rate Loans
to Eurodollar Rate Loans shall forthwith be suspended and (b) such Bank's Loans
then outstanding as Eurodollar Rate Loans, if any, shall be converted
automatically to Base Rate Loans on the last day of each Interest Period
applicable to such Eurodollar Rate Loans or within such earlier period as may be
required by law. The Borrowers hereby agree promptly to pay the Agent for the
account of such Bank, upon demand by such Bank, any additional amounts necessary
to compensate such Bank for any costs incurred by such Bank in making any
conversion of the Eurodollar Rate Loans in accordance with this Section 5.6,
including any interest or fees payable by such Bank to lenders of funds obtained
by it in order to make or maintain such Eurodollar Rate Loans hereunder.
Section 5.7 Additional Costs, Etc. If any present or future applicable
law, which expression, as used herein, includes statutes, rules and regulations
thereunder and interpretations thereof by any competent court or by any
governmental or other regulatory body or official charged with the
administration or the interpretation thereof and requests, directives,
instructions and notices at any time or from time to time hereafter made upon or
otherwise issued to any Bank or the Agent by any central bank or other fiscal,
monetary or other authority (whether or not having the force of law), shall:
(a) subject any Bank or the Agent to any tax, levy, impost, duty,
charge, fee, deduction or withholding of any nature with respect to this Credit
Agreement, the other Loan Documents, any Letters of Credit, such Bank's
Commitment or the Loans (other than taxes based upon or measured by the income
or profits of such Bank or the Agent), or
(b) materially change the basis of taxation (except for changes
in taxes on income or profits) of payments to any Bank of the principal of or
the interest on any Loans or any other amounts payable to any Bank or the Agent
under this Credit Agreement or any of the other Loan Documents, or
(c) impose or increase or render applicable (other than to the
extent specifically provided for elsewhere in this Credit Agreement) any special
deposit, reserve, assessment, liquidity, capital adequacy or other similar
requirements (whether or not having the force of law) against assets held by, or
deposits in or for the account of, or loans by, or letters of credit issued by,
or commitments of an office of any Bank, or
(d) impose on any Bank or the Agent any other conditions or
requirements with respect to this Credit Agreement, the other Loan Documents,
any Letters of Credit, the Loans, such Bank's Commitment, or any class of loans,
letters of credit or commitments of which any of the Loans or such Bank's
Commitment forms a part, and the result of any of the foregoing is
(i) to increase the cost to any Bank of
making, funding, issuing, renewing, extending or maintaining any
of the Loans or such Bank's Commitment or any Letter of Credit,
or
(ii) to reduce the amount of principal,
interest, Reimbursement Obligation or other amount payable to such Bank or the
Agent hereunder on account of such Bank's Commitment, any Letter of Credit or
any of the Loans, or
(iii) to require such Bank or the Agent to
make any payment or to forego any interest or Reimbursement Obligation or other
sum payable hereunder, the amount of which payment or foregone interest or
Reimbursement Obligation or other sum is calculated by reference to the gross
amount of any sum receivable or deemed received by such Bank or the Agent from
the Borrowers hereunder,
then, and in each such case, the Borrowers will, within 30 days after
demand made by such Bank or (as the case may be) the Agent at any time and from
time to time and as often as the occasion therefor may arise, pay to such Bank
or the Agent such additional amounts as will be sufficient to compensate such
Bank or the Agent for such additional cost, reduction, payment or foregone
interest or Reimbursement Obligation or other sum.
Section 5.8 Capital Adequacy. If after the date hereof any Bank or the
Agent determines that (a) the adoption of or change in any law, governmental
rule, regulation, policy, guideline or directive of a court or governmental
authority with appropriate jurisdiction (whether or not having the force of law)
regarding capital requirements for banks or bank holding companies or any change
in the interpretation or application thereof by a court or governmental
authority with appropriate jurisdiction, or (b) compliance by such Bank or the
Agent or any corporation controlling such Bank or the Agent with any law,
governmental rule, regulation, policy, guideline or directive (whether or not
having the force of law) of any such entity regarding capital adequacy, has the
effect of reducing the return on such Bank's or the Agent's Commitment with
respect to any Loans to a level below that which such Bank or the Agent could
have achieved but for such adoption, change or compliance (taking into
consideration such Bank's or the Agent's then existing policies with respect to
capital adequacy and assuming full utilization of such entity's capital) by any
amount deemed by such Bank or (as the case may be) the Agent to be material,
then such Bank or the Agent may notify the Borrowers of such fact. To the extent
that the amount of such reduction in the return on capital is not reflected in
the Base Rate, the Borrowers and the Agent or such Bank shall thereafter attempt
to negotiate in good faith, within thirty (30) days of the day on which the
Borrowers receive such notice, an adjustment payable hereunder that will
adequately compensate the Agent or such Bank in light of these circumstances. If
the Borrowers and the Agent or such Bank are unable to agree to such adjustment
within thirty (30) days of the date on which the Borrowers receive such notice,
then commencing on the date of such notice (but not earlier than the effective
date of any such increased capital requirement), the fees payable hereunder
shall increase by an amount that will, in the Agent's and such Bank's reasonable
determination, provide adequate compensation. The Agent and each Bank shall
allocate such cost increases among its customers in good faith and on an
equitable basis.
Section 5.9 Certificate. The Agent or a Bank, as applicable, shall
deliver to the Borrowers a certificate setting forth any additional amounts
payable pursuant to Section Section 5.7 or 5.8 hereof and a brief explanation of
such amounts which are due, and such certificate submitted by any Bank or the
Agent to the Borrowers shall be conclusive, absent manifest error, that such
amounts are due and owing. The Banks and the Agent agree to act in a
commercially reasonable manner in order, to the extent reasonably possible, to
minimize or avoid the incurrence of additional costs under Section Section 5.7
or 5.8 hereof.
Section 5.10 Indemnity. Each of the Borrowers jointly and severally
agrees to indemnify each Bank and to hold each Bank harmless from and against
any loss, cost or expense (including loss of anticipated profits) that such Bank
may sustain or incur as a consequence of (a) default by the Borrowers in payment
of the principal amount of or any interest on any Eurodollar Rate Loans as and
when due and payable, including any such loss or expense arising from interest
or fees payable by such Bank to lenders of funds obtained by it in order to
maintain its Eurodollar Rate Loans, (b) default by the Borrowers in making a
borrowing or conversion after the Borrowers have given (or are deemed to have
given) a Loan Request or a Conversion Request relating thereto in accordance
with Section Section 2.6 or 2.7 hereof or (c) the making of any payment of a
Eurodollar Rate Loan or the making of any conversion of any Eurodollar Rate Loan
to a Base Rate Loan on a day that is not the last day of the applicable Interest
Period with respect thereto, including interest or fees payable by such Bank to
lenders of funds obtained by it in order to maintain any such Loans.
Section 5.11 Interest After Default.
Section 5.11.1 Overdue Amounts. Overdue principal and (to the
extent permitted by applicable law) interest on the Loans and all other overdue
amounts payable hereunder or under any of the other Loan Documents shall bear
interest compounded monthly and payable on demand at a rate per annum equal to
four percent (4%) above the Base Rate until such amount shall be paid in full
(after as well as before judgment).
Section 5.11.2 Amounts Not Overdue. During the continuance of an
Event of Default the principal of the Loans not overdue shall, until such Event
of Default has been cured or remedied or such Event of Default has been waived
by the Majority Banks pursuant to Section 26 hereof, bear interest at a rate per
annum equal to the greater of (a) two percent (2%) above the rate of interest
otherwise applicable to such Loans pursuant to Section 2.5 hereof and (b) the
rate of interest applicable to overdue principal pursuant to Section 5.11.1
hereof.
Section 5.12 HLT Classification. If, after the date hereof, the Agent
determines or is advised by any Bank that such Bank has determined, or the Agent
receives notice from or is advised by any Bank that such Bank has received
notice from any governmental authority, central bank or comparable agency having
jurisdiction over such Bank, that any of the Commitments, Loans, Letters of
Credit or Letter of Credit Participations are classified as a "highly leveraged
transaction" (an "HLT Classification") pursuant to any existing regulations
regarding "highly leveraged transactions" or any modification, amendment or
interpretation thereof, or the adoption of new regulations regarding "highly
leveraged transactions" after the date hereof by any governmental authority,
central bank or comparable agency, the Agent shall promptly give notice of such
HLT Classification to the Borrowers and the Banks. The Agent, the Banks and the
Borrowers shall thereupon commence negotiations in good faith to agree on the
extent to which fees, interest rates and/or margins hereunder should be
increased so as to reflect such HLT Classification. If the Borrowers and the
Majority Banks agree on the amount of such increase or increases, this Credit
Agreement shall be promptly amended to give effect to such increase or
increases. If the Borrowers and the Majority Banks fail to so agree and the
Borrowers have failed to refinance the Obligations within ninety (90) days after
notice is given by the Agent as provided above, then the Agent shall, if so
requested by the Majority Banks, by notice to the Borrowers terminate the
Commitments on the 90th day after notice is given by the Agent as provided
above, and the Commitments shall thereupon terminate, with the provisions of
Section Section 3.2 and 4.2(c) hereof then becoming applicable; and the Loans
shall also then become due and payable in full on such date. The Agent and the
Banks acknowledge that an HLT Classification is not a Default or an Event of
Default. The Agent and the Banks further acknowledge that none of the
Commitments, Loans, Letters of Credit or Letter of Credit Participations are
subject to an HLT Classification on the Closing Date.
Section 5.13 Replacement Banks. Within 30 days after (a) any Bank has
demanded compensation from the Borrowers pursuant to either Section Section 5.7
or 5.8 hereof, or (b) the Borrowers are required to make a deduction or
withholding for the account of any Bank pursuant to Section 5.3.2(c) hereof, or
(c) there shall have occurred a change in law with respect to any Bank as a
consequence of which it shall have become unlawful for such Bank to make a Loan
on the date of any applicable borrowing, as described in Section 12.2 hereof or
(d) any Bank becomes a Delinquent Bank (any such Bank described in the foregoing
clauses (a), (b), (c) or (d) is hereinafter referred to as an "Affected Bank"),
the Borrowers may request that the Non-Affected Banks acquire all, but not less
than all, of the Affected Bank's outstanding Loans and assume all, but not less
than all, of the Affected Bank's Commitment. If the Borrowers so request, the
Non-Affected Banks may elect to acquire all or any portion of the Affected
Bank's outstanding Loans and to assume all or any portion of the Affected Bank's
Commitment. If the Non-Affected Banks do not elect to acquire all of the
Affected Banks outstanding Loans and Commitment, the Borrowers shall have the
right to designate a replacement bank or banks, which must be reasonably
satisfactory to the Agent, to acquire and assume that portion of the outstanding
Loans and Commitment of the Affected Bank not being acquired and assumed by the
Non-Affected Banks. The provisions of Section 19 hereof shall apply to all
reallocations pursuant to this Section 5.13, and the Affected Bank and any
Non-Affected Banks and/or replacement banks which are to acquire the Loans and
Commitment of the Affected Bank shall execute and deliver to the Agent, in
accordance with the provisions of Section 19 hereof, such Assignments and
Acceptances and other instruments, including, without limitation, Notes, as are
required pursuant to Section 19 hereof to give effect to such reallocations. On
the effective date of the applicable Assignment and Acceptances, the Borrowers
shall pay to the Affected Bank all interest accrued on its Loans up to but
excluding such date, along with any fees payable to such Affected Bank hereunder
up to but excluding such date.
Section 5.14 Concerning Joint and Several Liability of the Borrowers.
(a) Each of the Borrowers is accepting joint and several liability hereunder in
consideration of the financial accommodation to be provided by the Banks under
this Credit Agreement, for the mutual benefit, directly and indirectly, of each
of the Borrowers and in consideration of the undertakings of each of the
Borrowers to accept joint and several liability for the obligations of each of
them.
(b) Each of the Borrowers jointly and severally hereby
irrevocably and unconditionally accepts, not merely as a surety but also as a
co-debtor, joint and several liability with each of the other Borrowers with
respect to the payment and performance of all of the Obligations arising under
this Credit Agreement, it being the intention of the parties hereto that all the
Obligations shall be the joint and several obligations of all of the Borrowers
without preferences or distinction among them.
(c) If and to the extent that any of the Borrowers shall fail to
make any payment with respect to any of the Obligations as and when due or to
perform any of such Obligations in accordance with the terms thereof, then in
each such event, the other Borrowers will make such payment with respect to, or
perform, such Obligation.
(d) The obligations of each of the Borrowers under the provisions
of this Section 5.14 constitute full recourse obligations of such Borrower,
enforceable against it to the full extent of its properties and assets,
irrespective of the validity, regularity or enforceability of this Credit
Agreement or any other circumstances whatsoever.
(e) Except as otherwise expressly provided herein or as required
by applicable law, each of the Borrowers hereby waives notice of acceptance of
its joint and several liability, notice of any and all Loans made under this
Credit Agreement, notice of occurrence of any Event of Default, or of any demand
for any payment under this Credit Agreement, notice of any action at any time
taken or omitted by the Banks under or in respect of any of the Obligations
hereunder, any requirement of diligence and, generally, all demands, notices and
other formalities of every kind in connection with this Credit Agreement, except
for those specifically provided for herein or in any of the other Loan
Documents. Each of the Borrowers hereby assents to, and waives notice of, any
extension or postponement of the time for the payment of any of the Obligations
hereunder, the acceptance of any partial payment thereon, any waiver, consent or
other action or acquiescence by the Banks at any time or times in respect of any
default by any of the Borrowers in the performance or satisfaction of any term,
covenant, condition or provision of this Credit Agreement, any and all other
indulgences whatsoever by the Banks in respect of any of the Obligations
hereunder, and the taking, addition, substitution or release, in whole or in
part, at any time or times, of any security for any of such Obligations or the
addition, substitution or release, in whole or in part, of any of the Borrowers.
Without limiting the generality of the foregoing, each of the Borrowers assents
to any other action or delay in acting or failure to act on the part of the
Banks, including, without limitation, any failure strictly or diligently to
assert any right or to pursue any remedy or to comply fully with applicable laws
or regulations thereunder which might, but for the provisions of this Section
5.14, provide a suretyship type defense for any such Borrower, in whole or in
part, from any of its obligations under this Section 5.14, it being the
intention of each of the Borrowers that, so long as any of the Obligations
hereunder remain unsatisfied, the obligations of such Borrower under this
Section 5.14 shall not be discharged except by performance and then only to the
extent of such performance. The Obligations of each of the Borrowers under this
Section 5.14 shall not be diminished or rendered unenforceable by any winding
up, reorganization, arrangement, liquidation, reconstruction or similar
proceeding with respect to any reconstruction or similar proceeding with respect
to any of the Borrowers or any of the Banks. The joint and several liability of
the Borrowers hereunder shall continue in full force and effect notwithstanding
any absorption, merger, amalgamation or any other change whatsoever in the name,
membership, constitution or place of formation of any of the Borrowers or any of
the Banks.
(f) The provisions of this Section 5.14 are made for the benefit
of the Banks and their successors and assigns, and may be enforced by them from
time to time against any of the Borrowers as often as occasion therefor may
arise and without requirement on the part of the Banks first to xxxxxxxx any of
their claims or to exercise any of their rights against any of the other
Borrowers or to exhaust any remedies available to them against any of the other
Borrowers or to resort to any other source or means of obtaining payment of any
of the Obligations hereunder or to elect any other remedy. The provisions of
this Section 5.14 shall remain in effect until all the Obligations hereunder
shall have been paid in full or otherwise fully satisfied. If at any time, any
payment, or any part thereof, made in respect of any of the Obligations, is
rescinded or must otherwise be restored or returned by the Banks upon the
insolvency, bankruptcy or reorganization of the Borrowers, or otherwise, the
provisions of this Section 5.14 will forthwith be reinstated in effect, as
though such payment had not been made.
Section 5.15 Applicability of Credit Agreement. This Credit Agreement
shall be applicable to, effective against, bind and restrict Terex and the
Restricted Subsidiaries as set forth herein, but, notwithstanding anything else
to the contrary, shall not be applicable to, effective against, bind or restrict
any Unrestricted Subsidiary.
Section 6 COLLATERAL SECURITY. The Obligations shall be secured by a
perfected first priority security interest (subject only to Permitted Liens) in
certain assets of the Borrowers, whether now owned or hereafter acquired,
pursuant to the terms of the Security Documents.
Section 7 REPRESENTATIONS AND WARRANTIES. Each of the Borrowers jointly and
severally represents and warrants to the Banks and the Agent as follows:
Section 7.1 Corporate Authority.
Section 7.1.1 Incorporation; Good Standing. Each Borrower (a) is
a corporation duly incorporated, validly existing and in good standing under the
laws of its state of incorporation, (b) has all requisite corporate power to own
its property and conduct its business as now conducted and as presently
contemplated, and (c) is in good standing as a foreign corporation and is duly
authorized to do business in each jurisdiction where such qualification is
necessary except where a failure to be so qualified would not have a materially
adverse effect on the Borrowers' business, assets or financial condition on a
consolidated basis or the rights of the Agent and the Banks in or to any of the
Collateral.
Section 7.1.2 Authorization. The execution, delivery and
performance of this Credit Agreement and the other Loan Documents by each of the
Borrowers and the transactions contemplated hereby and thereby (a) are within
the corporate authority of such Person, (b) have been duly authorized by all
necessary corporate proceedings, (c) do not result in any breach or
contravention of any provision of law, statute, rule or regulation to which such
Person is subject or any judgment, order, writ, injunction, license or permit
applicable to such Person, (d) do not violate any provision of the corporate
charter or bylaws of such Person, and (e) do not violate any provision of the
Note Indenture or the Senior Secured Notes or any other material agreement or
other material instrument binding upon such Person.
Section 7.1.3 Enforceability. The execution and delivery of this
Credit Agreement and the other Loan Documents by each of the Borrowers will
result in valid and legally binding obligations of such Person enforceable
against it in accordance with the respective terms and provisions hereof and
thereof, except as enforceability is limited by bankruptcy, insolvency,
reorganization, moratorium or other laws relating to or affecting generally the
enforcement of creditors' rights and except to the extent that availability of
the remedy of specific performance or injunctive relief is subject to the
discretion of the court before which any proceeding therefor may be brought.
Section 7.2 Governmental Approvals. The execution, delivery and
performance by each of the Borrowers of this Credit Agreement and the other Loan
Documents and the transactions contemplated hereby and thereby do not require
the approval or consent of, or filing with, any governmental agency or authority
other than those already obtained.
Section 7.3 Title to Properties; Leases. Except as indicated on
Schedule 7.3 attached hereto, Terex and its Subsidiaries own all of the assets
reflected in the Pro Forma Balance Sheet of Terex and its Subsidiaries or
acquired since that date (except property and assets sold or otherwise disposed
of in the ordinary course of business since that date), subject to no rights of
others, including any mortgages, leases, conditional sales agreements, title
retention agreements, liens or other encumbrances except Permitted Liens.
Section 7.4 Financial Statements and Projections.
Section 7.4.1 Financial Statements. (a) There has been furnished
to each of the Banks an unaudited consolidated pro forma balance sheet of Terex
and its Subsidiaries as at December 31, 1996 which gives effect to the
Acquisition (the "Pro Forma Balance Sheet") and the Loans to be made on the
Closing Date. The Pro Forma Balance Sheet has been prepared in accordance with
generally accepted accounting principles and fairly presents in all material
respects as at the close of business on December 31, 1996 the financial
condition of Terex and its Subsidiaries on a pro forma basis after giving effect
to the Acquisition and the Loans to be made on the Closing Date.
(b) There has been delivered to each of
the Banks the consolidated balance sheets of Terex and its Subsidiaries as at
December 31, 1994, December 31, 1995 and December 31, 1996, and the related
consolidated statements of income, retained earnings and cash flows for each
year then ended, certified by Price Waterhouse LLP and/or Ernst & Young LLP.
Such financial statements, including the footnotes thereto, were prepared in
accordance with generally accepted accounting principles consistently applied
throughout the periods indicated and fairly present in all material respects the
financial condition and results of operations and cash flows of Terex and its
Subsidiaries as at such dates and for such periods.
Section 7.4.2 Projections. The projections of the annual
operating budgets of Terex and its Subsidiaries on a consolidated basis, balance
sheets and cash flow statements for the 1997 fiscal year, copies of which have
been delivered to the Agent, disclose all material assumptions made with respect
to general economic, financial and market conditions used in formulating such
projections. To the knowledge of the Borrowers, no facts exist which are known
to them that (individually or in the aggregate) would result in any material
change in any of such projections. The projections are based upon reasonable
estimates and assumptions, have been prepared on the basis of the assumptions
stated therein and reflect the reasonable estimates of the Borrowers, of the
results of operations and other information projected therein.
Section 7.5 No Material Changes, Etc. (a) Since the Balance Sheet Date
there has occurred no materially adverse change in the financial condition or
business of Terex and its Subsidiaries as shown on or reflected in the Pro Forma
Balance Sheet, other than changes in the ordinary course of business that have
not had any materially adverse effect either individually or in the aggregate on
the business or financial condition of the Borrowers on a consolidated basis.
(b) Each of the Borrowers (before and after giving effect to the
transactions contemplated by this Credit Agreement, the other Loan Documents and
the Acquisition Documents) (i) has assets having a fair value in excess of its
liabilities, (ii) has assets having a fair value in excess of the amount
required to pay its liabilities on existing debts as such debts become absolute
and matured, and (iii) has, and expects to continue to have, access to adequate
capital for the conduct of its business and the ability to pay its debts from
time to time incurred in connection with the operation of its business as such
debts mature.
Section 7.6 Business. After giving effect to the Acquisition, each of
the Borrowers enjoys peaceful and undisturbed possession under all leases of
real or personal property of which it is lessee, none of which contains any
unusual or burdensome provision which will materially adversely affect or impair
the operations of the Borrowers on a consolidated basis and all such leases are
valid and subsisting and in full force and effect. After giving effect to the
Acquisition, each of the Borrowers owns or possesses the right to use all the
franchises, rights, licenses, operating rights, patents, trademarks, permits,
service marks, trade names, and copyrights necessary for and material to the
conduct of its business as proposed to be conducted, without any conflict with
the rights of others, except where the failure to own or possess such rights
would not have a material adverse effect on the Borrowers' business, assets or
financial condition on a consolidated basis or the rights of the Agent and the
Banks in or to any Collateral. After giving effect to the Acquisition, each of
the Borrowers owns, leases or has the right to use, all properties, franchises,
rights, licenses, operating rights, patents, trademarks, permits, service marks,
trade names and copyrights and employs all employees, all in an amount and
manner reasonably sufficient to operate its business in a manner substantially
comparable to the operation of such business prior to the Closing Date and the
consummation of the Acquisition, except where the failure to do so would not
have a material adverse effect on the Borrowers' business, assets or financial
condition on a consolidated basis or the rights of the Agent or the Banks in and
to any of the Collateral.
Section 7.7 Litigation. Except as set forth in Schedule 7.7 attached
hereto and except for product liability claims, there are no actions, suits,
proceedings or investigations of any kind pending or threatened against any of
the Borrowers before any court, tribunal or administrative agency or board that,
if adversely determined, is reasonably likely to, either in any case or in the
aggregate, materially adversely affect the properties, assets, financial
condition or business of the Borrowers on a consolidated basis or materially
impair the right of such Borrower to carry on business substantially as now
conducted by it or proposed to be conducted, or result in any substantial
liability not adequately covered by insurance, or for which adequate reserves
are not maintained by such Borrower, or which question the validity of this
Credit Agreement or any of the other Loan Documents, or any action taken or to
be taken pursuant hereto or thereto. Each Borrower has either (a) set aside on
its books reserves with respect to each product liability claim against such
Borrower which are in accordance with generally accepted accounting principles
or (b) has obtained adequate insurance with respect to each such product
liability claim, subject to reasonable deductibles or self insurance retentions.
Section 7.8 No Materially Adverse Contracts, Etc. None of the Borrowers
is subject to any charter, corporate or other legal restriction, or any
judgment, decree, order, rule or regulation that has or is expected in the
future to have a materially adverse effect on the business, assets or financial
condition of the Borrowers on a consolidated basis. None of the Borrowers is a
party to any contract or agreement that has or is expected, in the judgment of
such Borrower, to have any materially adverse effect on the business, assets or
financial condition of the Borrowers on a consolidated basis.
Section 7.9 Compliance with Other Instruments, Laws, Etc. None of the
Borrowers is in violation of any provision of its charter documents, bylaws, or
any agreement or instrument to which it may be subject or by which it or any of
its properties may be bound or any decree, order, judgment, statute, license,
rule or regulation, in any of the foregoing cases in a manner that could result
in the imposition of substantial penalties or materially and adversely affect
the financial condition, properties or business of the Borrowers on a
consolidated basis.
Section 7.10 Tax Status. Except as disclosed on Schedule 7.10 attached
hereto, each of the Borrowers has made or filed all federal and state income and
all other tax returns, reports and declarations required by any jurisdiction to
which it is subject, (b) has paid all taxes and other governmental assessments
and charges shown or determined to be due on such returns, reports and
declarations, except those being contested in good faith and by appropriate
proceedings and (c) has set aside on its books provisions reasonably adequate
for the payment of all taxes for periods subsequent to the periods to which such
returns, reports or declarations apply. Except as disclosed on Schedule 7.10
attached hereto, there are no unpaid taxes in any material amount claimed to be
due by the taxing authority of any jurisdiction, and the officers of the
Borrowers know of no basis for any such claim.
Section 7.11 No Event of Default. No Default or
Event of Default has occurred and is continuing.
Section 7.12 Holding Company and Investment Company Acts. Neither Terex
nor any of its Subsidiaries is a "holding company", or a "subsidiary company" of
a "holding company", or an affiliate" of a "holding company", as such terms are
defined in the Public Utility Holding Company Act of 1935; nor is it an
"investment company", or an "affiliated company" or a "principal underwriter" of
an "investment company", as such terms are defined in the Investment Company Act
of 1940.
Section 7.13 Absence of Financing Statements, Etc. Except with respect
to Permitted Liens, there is no financing statement, security agreement, chattel
mortgage, real estate mortgage or other document filed or recorded with any
filing records, registry or other public office, that purports to cover, affect
or give notice of any present or possible future lien on, or security interest
in, any assets or property of any of the Borrowers or any rights relating
thereto.
Section 7.14 Perfection of Security Interest. All filings, assignments,
pledges and deposits of documents or instruments have been made and all other
actions have been taken that are necessary, under applicable law, to establish
and perfect the Agent's security interest in the Collateral. The Collateral and
the Agent's rights with respect to the Collateral are not subject to any setoff,
claims, withholdings or other defenses. A Borrower is the owner of the
Collateral free from any lien, security interest, encumbrance and any other
claim or demand, except for Permitted Liens. All of the Obligations will, at all
times from and after the execution and delivery of each of the Security
Documents, be entitled to the benefits of and secured by each of the Security
Documents.
Section 7.15 Certain Transactions. Except for arm's length transactions
pursuant to which a Borrower makes payments in the ordinary course of business
upon terms no less favorable than such Borrower could obtain from third parties,
and except as set forth in Section 9.12 hereof, none of the officers, directors,
or employees of any of the Borrowers is presently a party to any transaction
with any of its Affiliates (other than for services as employees, officers and
directors), including any contract, agreement or other arrangement providing for
the furnishing of services to or by, providing for rental of real or personal
property to or from, or otherwise requiring payments to or from any officer,
director or such employee or, to the knowledge of the Borrowers, any
corporation, partnership, trust or other entity in which any officer, director,
or any such employee has a substantial interest or is an officer, director,
trustee or partner.
Section 7.16 Employee Benefit Plans.
Section 7.16.1 In General. Each Employee Benefit Plan has been
maintained and operated in compliance in all material respects with the
provisions of ERISA and, to the extent applicable, the Code, including but not
limited to the provisions thereunder respecting prohibited transactions. The
Borrowers have heretofore delivered to the Agent the most recently completed
annual report, Form 5500, with all required attachments, and actuarial statement
required to be submitted under Section 103(d) of ERISA, with respect to each
Guaranteed Pension Plan.
Section 7.16.2 Terminability of Welfare Plans. Under each
Employee Benefit Plan which is an employee welfare benefit plan within the
meaning of Section 3(1) or Section 3(2)(B) of ERISA, no benefits are due unless
the event giving rise to the benefit entitlement occurs prior to plan
termination (except as required by Title I, Part 6 of ERISA). A Borrower or an
ERISA Affiliate, as appropriate, may terminate each such Plan at any time (or at
any time subsequent to the expiration of any applicable bargaining agreement,
subject to applicable law) in the discretion of such Borrower or such ERISA
Affiliate without liability to any Person except for outstanding benefits claims
at the time of termination.
Section 7.16.3 Guaranteed Pension Plans. Each contribution
required to be made to a Guaranteed Pension Plan, whether required to be made to
avoid the incurrence of an accumulated funding deficiency, the notice or lien
provisions of Section 302(f) of ERISA, or otherwise, has been timely made. No
waiver of an accumulated funding deficiency or extension of amortization periods
has been received with respect to any Guaranteed Pension Plan. No liability to
the PBGC (other than required insurance premiums, all of which have been paid)
has been incurred by any of the Borrowers or any ERISA Affiliate with respect to
any Guaranteed Pension Plan and there has not been any ERISA Reportable Event,
or any other event or condition which presents a material risk of termination of
any Guaranteed Pension Plan by the PBGC. Based on the latest valuation of each
Guaranteed Pension Plan (which in each case occurred within twelve months of the
date of this representation), and on the actuarial methods and assumptions
employed for that valuation, the aggregate benefit liabilities of all such
Guaranteed Pension Plans within the meaning of Section 4001 of ERISA did not
exceed the aggregate value of the assets of all such Guaranteed Pension Plans,
disregarding for this purpose the benefit liabilities and assets of any
Guaranteed Pension Plan with assets in excess of benefit liabilities.
Section 7.16.4 Multiemployer Plans. None of the Borrowers nor any
ERISA Affiliate has incurred any material liability (including secondary
liability) to any Multiemployer Plan as a result of a complete or partial
withdrawal from such Multiemployer Plan under Section 4201 of ERISA or as a
result of a sale of assets described in Section 4204 of ERISA. None of the
Borrowers nor any ERISA Affiliate has been notified that any Multiemployer Plan
is in reorganization or insolvent under and within the meaning of Section 4241
or Section 4245 of ERISA or that any Multiemployer Plan intends to terminate or
has been terminated under Section 4041A of ERISA.
Section 7.17 Regulations U and X. The proceeds of the Loans shall be
used for working capital and general corporate purposes, including, without
limitation, to consummate the Acquisition in accordance with the Acquisition
Documents and to refinance the Indebtedness outstanding under the Congress
Agreement. The Borrowers will obtain Letters of Credit solely for general
corporate purposes. No portion of any Loan is to be used, and no portion of any
Letter of Credit is to be obtained, for the purpose of purchasing or carrying
any "margin security" or "margin stock" as such terms are used in Regulations U
and X of the Board of Governors of the Federal Reserve System, 12 C.F.R. Parts
221 and 224.
Section 7.18 Environmental Compliance. The Borrowers have taken all
necessary steps to investigate the past and present condition and usage of the
Real Estate and the operations conducted thereon and, based upon such diligent
investigation, have determined that except as set forth on Schedule 7.18
attached hereto or where it would not have a material adverse effect on the
Borrowers' business, assets or financial condition on a consolidated basis:
(a) none of the Borrowers or any operator of the Real Estate or
any operations thereon is in violation, or alleged violation, of any judgment,
decree, order, law, license, rule or regulation pertaining to environmental
matters, including without limitation, those arising under the Resource
Conservation and Recovery Act ("RCRA"), the Comprehensive Environmental
Response, Compensation and Liability Act of 1980 as amended ("CERCLA"), the
Superfund Amendments and Reauthorization Act of 1986 ("XXXX"), the Federal Clean
Water Act, the Federal Clean Air Act, the Toxic Substances Control Act, or any
state or local statute, regulation, ordinance, order or decree relating to
health, safety or the environment (hereinafter "Environmental Laws"), which
violation would have a material adverse effect on the business, assets or
financial condition of the Borrowers on a consolidated basis;
(b) none of the Borrowers has received notice from any third
party including, without limitation, any federal, state or local governmental
authority, (i) that any one of them has been identified by the United States
Environmental Protection Agency ("EPA") as a potentially responsible party under
CERCLA with respect to a site listed on the National Priorities List, 40 C.F.R.
Part 000 Xxxxxxxx X; (ii) that any hazardous waste, as defined by 42 U.S.C.
Section 6903(5), any hazardous substances as defined by 42 U.S.C. Section
9601(14), any pollutant or contaminant as defined by 42 U.S.C. Section 9601(33)
and any toxic substances, oil or hazardous materials or other chemicals or
substances regulated by any Environmental Laws ("Hazardous Substances") which
any one of them has generated, transported or disposed of has been found at any
site at which a federal, state or local agency or other third party has
conducted or has ordered that any Borrower conduct a remedial investigation,
removal or other response action pursuant to any Environmental Law; or (iii)
that it is or shall be a named party to any claim, action, cause of action,
complaint, or legal or administrative proceeding (in each case, contingent or
otherwise) arising out of any third party's incurrence of costs, expenses,
losses or damages of any kind whatsoever in connection with the release of
Hazardous Substances;
(c) (i) to the best of the Borrowers' knowledge, no portion of
the Real Estate has been used for the handling, processing, storage or disposal
of Hazardous Substances except in accordance with applicable Environmental Laws;
and no underground tank or other underground storage receptacle for Hazardous
Substances is located on any portion of the Real Estate; (ii) to the best of the
Borrowers' knowledge, in the course of any activities conducted by any of the
Borrowers or operators of its properties, no Hazardous Substances have been
generated or are being used on the Real Estate except in accordance with
applicable Environmental Laws; (iii) to the best of the Borrowers' knowledge,
there have been no releases (i.e. any past or present releasing, spilling,
leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping,
disposing or dumping) or threatened releases of Hazardous Substances on, upon,
into or from the properties of any of the Borrowers, which releases would have a
material adverse effect on the Borrowers' business, assets or financial
condition on a consolidated basis; (iv) to the best of the Borrowers' knowledge,
there have been no releases on, upon, from or into any real property in the
vicinity of any of the Real Estate which, through soil or groundwater
contamination, may have come to be located on, and which would have a material
adverse effect on the Borrowers' business, assets or financial condition on a
consolidated basis; and (v) in addition, any Hazardous Substances that have been
generated on any of the Real Estate and transported offsite have been
transported offsite only by carriers having an identification number issued by
the EPA, treated or disposed of only by treatment or disposal facilities
maintaining valid permits as required under applicable Environmental Laws, which
transporters and facilities have been and are, to the best of the Borrowers'
knowledge, operating in compliance with such permits and applicable
Environmental Laws; and
(d) none of the Borrowers or any Real Estate is subject to any
applicable environmental law requiring the performance of Hazardous Substances
site assessments, or the removal or remediation of Hazardous Substances, or the
giving of notice to any governmental agency or the recording or delivery to
other Persons of an environmental disclosure document or statement by virtue of
the transactions set forth herein and contemplated hereby, or as a condition to
the effectiveness of any other transactions contemplated hereby.
Section 7.19 Subsidiaries, Etc. All of the Subsidiaries of Terex are
listed on Schedule 7.19 attached hereto. Except as set forth on Schedule 7.19
attached hereto, neither Terex nor any Subsidiary of Terex is engaged in any
joint venture or partnership with any other Person.
Section 7.20 Bank Accounts. Schedule 7.20 attached
hereto sets forth the account numbers and location of all bank
accounts of the Borrowers.
Section 7.21 Chief Executive Offices; Books and Records. Each of the
Borrower's chief executive office, at which location its books and records are
kept, and federal employer identification number is listed on Schedule 7.21
attached hereto.
Section 7.22 Disclosure. None of this Credit Agreement, any of the
other Loan Documents, or the Acquisition Documents contains any untrue statement
of a material fact or omits to state a material fact (known to the Borrowers in
the case of any document or information not furnished by them) necessary in
order to make the statements herein or therein not misleading. There is no fact
known to any of the Borrowers which materially adversely affects, or which is
reasonably likely in the future to materially adversely affect, exclusive of
effects resulting from changes in general economic conditions, legal standards
or regulatory conditions, the business, assets, financial condition or prospects
of the Borrowers, taken as a whole.
Section 7.23 Fiscal Year. Terex and each of its
Subsidiaries has a fiscal year which is the twelve months ending
on December 31 of each year.
Section 7.24 Acquisition Documents. The Borrowers have heretofore
furnished to the Banks true, complete and correct copies of the Acquisition
Documents (including schedules, exhibits and annexes thereto). The Acquisition
Documents have not subsequently been amended, supplemented, or modified and
constitute the complete understanding among the parties thereto in respect of
the matters and transactions covered thereby.
Section 8 AFFIRMATIVE COVENANTS OF THE BORROWERS. Each of the Borrowers
jointly and severally covenants and agrees that, so long as any Loan, Unpaid
Reimbursement Obligation, Letter of Credit or Note is outstanding or any Bank
has any obligation to make any Loans or the Agent has any obligation to issue,
extend or renew any Letters of Credit:
Section 8.1 Punctual Payment. Each of the Borrowers will duly and
punctually pay or cause to be paid the principal and interest on the Loans, all
Reimbursement Obligations, the Letter of Credit Fees, the commitment fees, the
Agent's Fee and all other amounts provided for in this Credit Agreement and the
other Loan Documents, all in accordance with the terms of this Credit Agreement
and such other Loan Documents.
Section 8.2 Maintenance of Office. Each of the Borrowers will maintain
its chief executive office at the location on Schedule 7.21 attached hereto, or
at such other place in the United States of America as such Borrower shall
designate upon written notice to the Agent, where notices, presentations and
demands to or upon such Borrower in respect of the Loan Documents may be given
or made.
Section 8.3 Records and Accounts. Terex will, and cause each of its
Subsidiaries to (a) keep true and accurate records and books of account in which
full, true and correct entries will be made in accordance with generally
accepted accounting principles and (b) maintain adequate accounts and reserves
for all taxes (including income taxes), depreciation, depletion, obsolescence
and amortization of its properties, contingencies, and other reserves.
Section 8.4 Financial Statements, Certificates and
Information. The Borrowers will deliver to each of the Banks:
(a) as soon as practicable, but in any event not later than
ninety (90) days after the end of each fiscal year of Terex, the consolidated
balance sheet of Terex and its Subsidiaries and the consolidating balance sheet
of Terex and its Subsidiaries, each as at the end of such year, and the related
consolidated statement of income and consolidated statement of cash flow and
consolidating statement of income and consolidating statement of cash flow for
such year, each setting forth in comparative form the figures for the previous
fiscal year and all such consolidated and consolidating statements to be in
reasonable detail, prepared in accordance with generally accepted accounting
principles, and certified without qualification by Price Waterhouse LLP, Ernst &
Young LLP, and/or KPMG Peat Marwick LLP, or by other independent certified
public accountants satisfactory to the Agent, together with a written statement
from such accountants to the effect that they have read a copy of this Credit
Agreement, and that, in making the examination necessary to said certification,
they have obtained no knowledge of any Default or Event of Default, or, if such
accountants shall have obtained knowledge of any then existing Default or Event
of Default they shall disclose in such statement any such Default or Event of
Default; provided that such accountants shall not be liable to the Banks for
failure to obtain knowledge of any Default or Event of Default;
(b) as soon as practicable, but in any event not later than
forty-five (45) days after the end of each of the fiscal quarters of Terex,
copies of the unaudited consolidated balance sheet of Terex and its Subsidiaries
and the unaudited consolidating balance sheet of Terex and its Subsidiaries,
each as at the end of such quarter, and the related consolidated statement of
income and consolidated statement of cash flow and consolidating statement of
income and consolidating statement of cash flow for the portion of Terex's
fiscal year then elapsed, all in reasonable detail and prepared in accordance
with generally accepted accounting principles, together with a certification by
the principal financial or accounting officer of Terex that the information
contained in such financial statements fairly presents the financial position of
Terex and its Subsidiaries on the date thereof (subject to year-end
adjustments);
(c) as soon as practicable, but in any event within thirty (30)
days after the end of each month in each fiscal year of Terex, unaudited monthly
consolidated financial statements of Terex and its Subsidiaries for such month
and unaudited monthly consolidating financial statements of Terex and its
Subsidiaries for such month, each prepared in accordance with generally accepted
accounting principles, together with a certification by the principal financial
or accounting officer of Terex that the information contained in such financial
statements fairly presents the financial condition of Terex and its Subsidiaries
on the date thereof (except for the provisions of footnotes and subject to
year-end adjustments);
(d) simultaneously with the delivery of the financial statements
referred to in subsections (a) and (b) above, a statement certified by the
principal financial, accounting officer or treasurer of Terex in substantially
the form of Exhibit D attached hereto (a "Compliance Certificate") and setting
forth in reasonable detail computations evidencing compliance with the covenants
contained in Section 10 hereof, the calculation of the Applicable Margin and (if
applicable) reconciliations to reflect changes in generally accepted accounting
principles since the Balance Sheet Date;
(e) contemporaneously with the filing or mailing thereof, copies
of all material of a financial nature filed with the Securities and Exchange
Commission or sent to the stockholders of Terex;
(f) (i) on or before each Wednesday, a Borrowing Base Report
setting forth the Borrowing Base A with the Eligible A Accounts Receivable
calculated as at the end of the immediately preceding calendar week and the
Eligible A Inventory calculated by reference to the report most recently
delivered pursuant to clause (g) hereof, provided that if at any time the Excess
Availability is less than $10,000,000, a Borrowing Base Report shall be provided
by the Borrowers on or before 4:00 p.m. (Eastern time) on each Business Day
setting forth the Borrowing Base A with the Eligible A Accounts Receivable
calculated as at the end of the Business Day which is two Business Days prior to
the date of such report and the Eligible A Inventory calculated by reference to
the report most recently delivered pursuant to clause (g) hereof, and (ii) on
each Reduction Date and each other date on which the Total Commitment and/or the
Supplemental Liquidity Basket is reduced, a Borrowing Base Report setting forth
the Borrowing Base A after giving effect to such reduction;
(g) as soon as practicable, but in any event within fifteen (15)
days after the end of each month, an Accounts Receivable aging summary, an
accounts payable aging report and an Inventory designation report, in each case
as at the end of the immediately preceding calendar month; provided that if at
any time Excess Availability is less than $10,000,000, a finished goods
inventory report shall be provided by the Borrowers on or before each Wednesday
for the immediately preceding calendar week;
(h) as soon as practicable, but in any event within fifteen (15)
days after the end of each calendar month, a Borrowing Base Report setting forth
the Borrowing Base B and a Borrowing Base Report setting forth Borrowing Base A,
in each case as at the end of the immediately preceding calendar month;
(i) as soon as practicable, but in any event not later than
forty-five (45) days after the end of each fiscal year of Terex, the annual
budgets of Terex and its Subsidiaries for the current fiscal year and the
projections of Terex and its Subsidiaries updating those projections delivered
to the Banks and referred to in Section 7.4.2 hereof or, if applicable, updating
any later such projections delivered pursuant to this Section 8.4(i);
(j) as soon as practicable, but in any event not later than sixty
(60) days after the Closing Date, the consolidated financial statements of the
Sellers for the fiscal year of the Sellers ended on December 31, 1996, certified
without qualification by Price Waterhouse LLP, Ernst & Young LLP or such other
independent certified public accountants reasonably satisfactory to the Agent;
and
(k) from time to time such other financial data and information
(including accountants, management letters) as the Agent or any Bank may
reasonably request.
Section 8.5 Notices.
Section 8.5.1 Defaults. The Borrowers will promptly notify the
Agent in writing of the occurrence of any Default or Event of Default. If any
Person shall give any notice or take any other action in respect of a claimed
default (whether or not constituting an Event of Default) under this Credit
Agreement or any other note, evidence of indebtedness, indenture or other
obligation to which or with respect to which Terex or any of its Material
Subsidiaries is a party or obligor, whether as principal, guarantor, surety or
otherwise, the Borrowers shall forthwith give written notice thereof to the
Agent, describing the notice or action and the nature of the claimed default.
Section 8.5.2 Environmental Events. The Borrowers will promptly
give notice to the Agent (a) of any material violation of any Environmental Law
that any of the Borrowers report in writing or is reportable by such Person in
writing (or for which any written report supplemental to any oral report is
made) to any federal, state or local environmental agency and (b) upon becoming
aware thereof, of any inquiry, proceeding, investigation, or other action,
including a notice from any agency of potential environmental liability, of any
federal, state or local environmental agency or board, that has a reasonable
likelihood of materially and adversely affecting the assets, liabilities,
financial conditions or operations of the Borrowers on a consolidated basis, or
the Agent's security interests pursuant to the Security Documents.
Section 8.5.3 Notification of Claim against Collateral. The
Borrowers will, immediately upon becoming aware thereof, notify the Agent in
writing of any setoff, claims, withholdings or other defenses to which any of
the Collateral, or the Agent's rights with respect to the Collateral, are
subject.
Section 8.5.4 Notice of Litigation and Judgments. The Borrowers
will give notice to the Agent in writing within fifteen (15) days of becoming
aware of any litigation or proceedings threatened in writing or any pending
litigation and proceedings affecting any Borrower or any Material Subsidiary or
to which any Borrower or any Material Subsidiary is or becomes a party involving
an uninsured claim against such Person that could reasonably be expected to have
a materially adverse effect on any of the Borrowers on a consolidated basis and
stating the nature and status of such litigation or proceedings. The Borrowers
will give notice to the Agent, in writing, in form and detail satisfactory to
the Agent, within ten (10) days of any judgment not covered by insurance, final
or otherwise, against any Borrower or any Material Subsidiary in an amount in
excess of $5,000,000.
Section 8.6 Corporate Existence; Maintenance of Properties. Each of the
Borrowers will do or cause to be done all things necessary to preserve and keep
in full force and effect its corporate existence, rights and franchises and none
of the Borrowers will convert to a limited liability company. Each of the
Borrowers (a) will cause all of its properties used or useful in the conduct of
its business to be maintained and kept in good condition, repair and working
order and supplied with all necessary equipment, (b) will cause to be made all
necessary repairs, renewals, replacements, betterments and improvements thereof,
all as in the judgment of such Person may be necessary so that the business
carried on in connection therewith may be properly and advantageously conducted
at all times, and (c) will continue to engage primarily in the business of the
manufacture, distribution and/or sale of capital equipment and replacement parts
and in related businesses; provided that, subject to the provisions of the
Security Documents, nothing in this Section 8.6 shall prevent any Person from
discontinuing the operation and maintenance of any of its properties if such
discontinuance is, in the judgment of such Person, desirable in the conduct of
its business and that does not in the aggregate materially adversely affect the
business of such Person.
Section 8.7 Insurance. Each of the Borrowers will maintain with
financially sound and reputable insurers insurance with respect to its
properties and business (or self insurance as to liability or other insurable
risks, other than damage, loss or other casualty risks affecting any of the
Collateral) against such casualties and contingencies as shall be in accordance
with the general practices of businesses engaged in similar activities in
similar geographic areas and in amounts, containing such terms, in such forms
and for such periods as may be reasonable and prudent, and in accordance with
the terms of the Security Agreement.
Section 8.8 Taxes. Each of the Borrowers will duly pay and discharge,
or cause to be paid and discharged, before the same shall become overdue, all
taxes, assessments and other governmental charges imposed upon it and its real
properties, sales and activities, or any part thereof, or upon the income or
profits therefrom, as well as all claims for labor, materials, or supplies that
if unpaid might by law become a lien or charge upon any of its property;
provided that any such tax, assessment, charge, levy or claim need not be paid
if the validity or amount thereof shall currently be contested in good faith by
appropriate proceedings and if such Person shall have set aside on its books
reserves with respect thereto in accordance with generally accepted accounting
principles; and provided further that each of the Borrowers will pay all such
taxes, assessments, charges, levies or claims forthwith upon the commencement of
proceedings to foreclose any lien that may have attached as security therefor.
Section 8.9 Inspection of Properties and Books, Etc.
Section 8.9.1 General. The Borrowers shall permit the Banks,
through the Agent or any of the Banks' other designated representatives, to
visit and inspect any of the properties of the Borrowers, to examine the books
of account of Terex and its Subsidiaries (and to make copies thereof and
extracts therefrom), and to discuss the affairs, finances and accounts of Terex
and its Subsidiaries with, and to be advised as to the same by, its and their
officers, all at such reasonable times and intervals as the Agent or any Bank
may reasonably request.
Section 8.9.2 Collateral Reports. Upon the reasonable request of
the Agent, the Borrowers will obtain and deliver to the Agent a report of an
independent collateral auditor satisfactory to the Agent (which may be
affiliated with one of the Banks) with respect to the Accounts Receivable and
Inventory included in the Borrowing Bases, which report shall indicate whether
or not the information set forth in the Borrowing Base Reports most recently
delivered are accurate and complete in all material respects based upon a review
by such auditors of the Accounts Receivable (including verification with respect
to the amount, aging, identity and credit of the respective account debtors and
the billing practices of the Borrowers) and Inventory (including verification as
to the value, location and respective types). All such collateral value reports
shall be conducted and made at the expense of the Borrowers. Prior to the
occurrence and continuance of any Event of Default, the Borrowers shall not be
required to pay for more than four collateral value reports in any calendar
year.
Section 8.9.3 Appraisals. The Borrowers will obtain and deliver
to the Agent appraisal reports in form and substance and from appraisers
reasonably satisfactory to the Agent, stating the then current fair market,
orderly liquidation and forced liquidation values of all or any portion of
Inventory included in the Borrowing Bases. All such appraisals shall be
conducted and made at the expense of the Borrowers. Prior to the occurrence and
continuance of any Event of Default, the Borrowers shall not be required to pay
for more than one appraisal in any calendar year.
Section 8.9.4 Communications with Accountants. Each of the
Borrowers authorizes the Agent and, if accompanied by the Agent, the Banks to
communicate directly with such Borrower's independent certified public
accountants and authorizes such accountants to disclose to the Agent and the
Banks any and all financial statements and other supporting financial documents
and schedules including copies of any management letter with respect to the
business, financial condition and other affairs of such Borrower, subject to
such accountants' normal policies and practices. At the request of the Agent,
the Borrowers shall deliver a letter addressed to such accountants instructing
them to comply with the provisions of this Section 8.9.4.
Section 8.10 Compliance with Laws, Contracts, Licenses, and Permits.
Each of the Borrowers will comply with (a) the applicable laws and regulations
wherever its business is conducted, including all Environmental Laws, (b) the
provisions of its charter documents and by-laws, (c) all agreements and
instruments by which it or any of its properties may be bound and (d) all
applicable decrees, orders, and judgments, except, with respect to matters
described in clauses (a), (c) and (d), where the failure to comply would not
have a material adverse effect on the business, assets or financial condition of
the Borrowers on a consolidated basis. If any authorization, consent, approval,
permit or license from any officer, agency or instrumentality of any government
shall become necessary or required in order that any of the Borrowers may
fulfill any of its obligations hereunder or any of the other Loan Documents,
such Borrower will immediately take or cause to be taken all reasonable steps
within the power of such Borrower to obtain such authorization, consent,
approval, permit or license and furnish the Agent with evidence thereof.
Section 8.11 Employee Benefit Plans. Each of the Borrowers will (a)
promptly upon filing the same with the Department of Labor or Internal Revenue
Service upon request of the Agent, furnish to the Agent a copy of the most
recent actuarial statement required to be submitted under Section 103(d) of
ERISA and Annual Report, Form 5500, with all required attachments, in respect of
each Guaranteed Pension Plan and (b) promptly upon receipt or dispatch, furnish
to the Agent any notice, report or demand sent or received in respect of a
Guaranteed Pension Plan under Section Section 302, 4041, 4042, 4043, 4063, 4065,
4066 and 4068 of ERISA, or in respect of a Multiemployer Plan, under Section
Section 4041A, 4202, 4219, 4242, or 4245 of ERISA.
Section 8.12 Use of Proceeds. The Borrowers will use the proceeds of
the Loans solely for working capital and general corporate purposes, including,
without limitation, to consummate acquisitions to the extent permitted hereunder
and the Acquisition in accordance with the Acquisition Documents, and to
refinance the Indebtedness outstanding under the Congress Agreement. The
Borrowers will obtain Letters of Credit solely for general corporate purposes.
Section 8.13 Deposit Accounts. The Borrowers shall maintain at all
times a deposit or a lock box account in the name of the Borrowers with the
Agent at the Agent's Head Office or with such other banks which have entered
into Agency Agreements with the Agent (each, a "Lock Box Account") . Each of the
Borrowers will use its best efforts to cause all of its debtors on accounts
receivable and all lessees and conditional vendees to make all payments on
accounts receivable and contracts to accounts at the banks designated as
collection banks on Schedule 7.20 attached hereto and which are parties to the
Agency Agreements. Pursuant to the Agency Agreements, each Borrower will require
its collection banks to transfer to a Lock Box Account on a daily basis all good
funds collected on such day. No Borrower will cause any Agency Agreement to be
terminated except with the prior written consent of the Agent and except for the
express purpose of substituting a different collection bank thereunder. Such
termination shall be permitted only after a replacement Agency Agreement with
such replacement collection bank is in full force and effect and no further
payments on accounts receivable or contracts are being made to the former
collection bank. To the extent that any Borrower receives gross operating
revenues from its businesses, promptly after receipt thereof such Borrower shall
deposit such revenues into a Lock Box Account. The Agent shall apply all funds
deposited into the Lock Box Accounts as set forth in Section 3.2(b) hereof.
Section 8.14 Additional Borrowers. The Borrowers may, from and after
the Closing Date with the prior written consent of the Agent and the Majority
Banks, designate any Subsidiary of any of the Borrowers as a Borrower provided,
that (a) the Borrowers shall have given the Agent and the Banks thirty (30) days
prior written notice of any such designation, (b) such Subsidiary shall be
organized under the laws of the United States of America or any state or
territory thereof, (c) Terex shall legally or beneficially, directly or
indirectly, own 100% of the Voting Stock of such Subsidiary, (d) the Agent and
the Majority Banks shall have consented to the inclusion of the Accounts
Receivable and Inventory of such Subsidiary in the Borrowing Bases, (e) such
Subsidiary shall have duly executed and delivered to the Agent and the Banks, on
the date of such designation, an instrument of adherence substantially in the
form of Exhibit F attached hereto (an "Instrument of Adherence"), a security
agreement substantially in the form of the Security Agreement, and all other
instruments and documents, including, without limitation, corporate authority
documents and legal opinions, as the Agent may reasonably request in connection
with the delivery of such Instrument of Adherence and security agreement, and
(f) Terex shall have delivered to the Agent, on the date of such designation, an
updated Schedule 1.2 reflecting the designation of such Subsidiary as a
Restricted Subsidiary.
Section 8.15 Further Assurances. Each of the Borrowers will cooperate
with the Banks and the Agent and execute such further instruments and documents
as the Banks or the Agent shall reasonably request to carry out to their
satisfaction the transactions contemplated by this Credit Agreement and the
other Loan Documents.
Section 9 CERTAIN NEGATIVE COVENANTS OF THE BORROWERS. Each of the
Borrowers jointly and severally covenants and agrees that, so long as any Loan,
Unpaid Reimbursement Obligation, Letter of Credit or Note is outstanding or any
Bank has any obligation to make any Loans or the Agent has any obligations to
issue, extend or renew any Letters of Credit:
Section 9.1 Restrictions on Indebtedness. None of the Borrowers will
create, incur, assume, guarantee or be or remain liable, contingently or
otherwise, with respect to any Indebtedness other than:
(a) Indebtedness to the Banks and the Agent
arising under any of the Loan Documents;
(b) Indebtedness of Terex not to exceed the principal amount of
$250,000,000 evidenced by the Senior Secured Notes of Terex, as in effect on the
date hereof, and, to the extent provided for in the Senior Secured Notes or the
Note Indenture as such instruments are in effect on the date hereof, interest
thereon at the rate provided for in the Senior Secured Notes and any penalties
or liquidated damages with respect thereto and Indebtedness of the other
Borrowers as guarantors of such Indebtedness of Terex;
(c) Indebtedness outstanding with respect to the
Common Stock Appreciation Rights Agreement;
(d) obligations under Capitalized Leases and Indebtedness
incurred in connection with the acquisition after the date hereof of any real or
personal property by a Borrower, provided that the aggregate principal amount of
all such Indebtedness of the Borrowers incurred in any calendar year shall not
exceed $6,000,000 in the aggregate, plus amounts incurred in connection with any
refinancings of any such Indebtedness to the extent that the term and conditions
of such refinanced Indebtedness are no less favorable to the applicable
Borrower, the Banks and the Agent;
(e) Indebtedness existing on the date hereof and listed and
described on Schedule 9.1 attached hereto and any refinancings of any such
Indebtedness, provided that any such refinancing shall be on terms and
conditions no less favorable to the applicable Borrower, the Banks and the Agent
than such existing Indebtedness;
(f) Indebtedness of any Borrower outstanding to
any other Borrower;
(g) performance bonds, surety bonds, insurance obligations or
bonds and other similar bonds or obligations incurred in the ordinary course of
business;
(h) Hedging Obligations with the Agent;
(i) Floor Plan Guaranties;
(j) unsecured Indebtedness of the Borrowers
outstanding to Unrestricted Subsidiaries;
(k) unsecured Indebtedness of the Borrowers in respect of
guaranties of Indebtedness of Unrestricted Subsidiaries, provided that the
aggregate amount of such Indebtedness does not exceed $40,000,000 at any time;
and
(l) unsecured Indebtedness of a Borrower in
respect of a guaranty of Indebtedness of another Borrower
permitted under this Section 9.1.
Section 9.2 Restrictions on Liens. None of the Borrowers will (i)
create or incur or suffer to be created or incurred or to exist any lien,
encumbrance, mortgage, pledge, charge, restriction or other security interest of
any kind upon any of its property or assets of any character whether now owned
or hereafter acquired, or upon the income or profits therefrom; (ii) transfer
any of such property or assets or the income or profits therefrom for the
purpose of subjecting the same to the payment of Indebtedness or performance of
any other obligation in priority to payment of its general creditors; (iii)
acquire, or agree or have an option to acquire, any property or assets upon
conditional sale or other title retention or purchase money security agreement,
device or arrangement; (iv) suffer to exist for a period of more than thirty
(30) days after the same shall have been incurred any Indebtedness or claim or
demand against it that if unpaid might by law or upon bankruptcy or insolvency,
or otherwise, be given any priority whatsoever over its general creditors; or
(v) enter into, or permit to remain in effect, any agreement or arrangement by
which such Borrower agrees not to encumber, mortgage, pledge, restrict or grant
a security interest in any of its Accounts Receivable, the books and records
related thereto, or its Inventory, provided that any of the Borrowers may create
or incur or suffer to be created or incurred or to exist:
(a) liens on properties, other than any Collateral, to secure
taxes, assessments and other government charges in respect of obligations not
overdue or that are being contested or remedied in good faith by appropriate
proceedings promptly instituted and diligently concluded, provided, however,
that any reserve or other appropriate provision as may be required in conformity
with generally accepted accounting principals has been made therefor, or liens
on properties, other than Collateral, to secure claims for labor, material or
supplies in respect of obligations not overdue;
(b) deposits or pledges of property, other than any Collateral,
made in connection with, or to secure payment of, workmen's compensation,
unemployment insurance, old age pensions or other social security obligations;
(c) liens on properties, other than any Collateral, in respect of
judgments or awards, the Indebtedness with respect to which is permitted by
Section 9.1(f) hereof;
(d) liens on properties of carriers, warehousemen, mechanics and
materialmen, and other like liens on properties, in existence less than 120 days
from the date of creation thereof in respect of obligations not overdue or which
secure obligations which are being contested in good faith by appropriate
proceedings diligently pursued and available to the applicable Borrower prior to
the commencement of foreclosure or other similar proceedings and with respect to
which reserves have been set aside on such Borrower's books in accordance with
generally accepted accounting principles;
(e) encumbrances on Real Estate consisting of easements, rights
of way, zoning restrictions, survey exceptions, restrictions on the use of real
property and defects and irregularities in the title thereto, landlord's or
lessor's liens under leases to which a Borrower is a party, and other minor
liens or encumbrances, including mechanics' liens and vendors' liens on such
Real Property, none of which in the opinion of such Borrower interferes
materially with the use of the property affected in the ordinary conduct of the
business of such Borrower, which defects do not individually or in the aggregate
have a materially adverse effect on the business of the Borrowers on a
consolidated basis and do not impair the value of any Collateral or the rights
of the Agent or the Banks thereto;
(f) liens on properties, other than any Collateral, existing on
the date hereof and listed on Schedule 9.2 attached hereto and liens with
respect to Indebtedness permitted to be refinanced pursuant to Section 9.1(e)
hereof;
(g) liens in respect of purchase money security interests in or
purchase money mortgages on real or personal property acquired after the date
hereof to secure purchase money Indebtedness of the type and amount permitted by
Section 9.1(d) hereof, incurred in connection with the acquisition of such
property, which security interests or mortgages cover only the real or personal
property so acquired, and liens in respect of Capitalized Leases permitted under
Section 9.1(d) hereof solely on the assets subject to such Capitalized Leases;
(h) liens existing on the date hereof in favor of the Trustee as
Collateral Agent to secure the Senior Secured Notes or required to be granted to
the Trustee as Collateral Agent after the date hereof to secure the Senior
Secured Notes;
(i) liens securing the Obligations;
(j) non-consensual statutory liens (other than on the Collateral
and liens pursuant to ERISA or Environmental Laws or securing the payment of
taxes) arising in the ordinary course of a Borrower's business to the extent:
(i) such liens secure Indebtedness which
is not overdue for a period of more than thirty (30) days, or
(ii) such liens secure Indebtedness
relating to claims or liabilities which are fully insured and being defended at
the sole cost and expense and at the sole risk of the insurer or being contested
in good faith by appropriate proceedings diligently pursued and available to
such Borrower,
(k) in each case under clause (i) and (ii), prior to the
commencement of foreclosure or other similar proceedings and with respect to
which reserves have been set aside on its books in accordance with generally
accepted accounting principles;
(l) liens on property, other than any Collateral, securing surety
or appeal bonds, performance bonds, insurance obligations, or other obligations
of a like nature incurred in the ordinary course of business; and
(m) liens outstanding with respect to Floor Plan Guaranties,
provided that no such lien is on any property of a Borrower other than the
inventory which was previously sold by such Borrower and with respect to which
such Floor Plan Guaranty was delivered.
Section 9.3 Restrictions on Investments. None of the Borrowers will
make or permit to exist or to remain outstanding any Investment except
Investments in:
(a) marketable direct or guaranteed obligations of the United
States of America that mature within one (1) year from the date of purchase by
such Borrower;
(b) demand deposits, certificates of deposit, bankers acceptances
and time deposits of United States banks having total assets in excess of
$1,000,000,000;
(c) securities commonly known as "commercial paper" issued by a
corporation organized and existing under the laws of the United States of
America or any state thereof that at the time of purchase have been rated and
the ratings for which are not less than "P 1" if rated by Xxxxx'x Investors
Service, Inc., and not less than "A 1" if rated by Standard and Poor's
Corporation;
(d) Investments existing on the date hereof in Unrestricted
Subsidiaries or listed on Schedule 9.3 attached hereto, plus any increases in
any such Investment existing on the date hereof resulting from the accrual of
Interest on any such Investment pursuant to the terms of such Investment as of
the date hereof;
(e) Investments with respect to Indebtedness
permitted by Section 9.1 hereof;
(f) Investments after the Closing Date by the Borrowers in
Unrestricted Subsidiaries, provided that (i) the sum of (A) the aggregate amount
of such Investments (other than Investments made in common stock or Permitted
Preferred Stock of a Borrower and other Investments which do not require any
cash or property to be transferred from the Borrowers to the Unrestricted
Subsidiaries) plus (B) the aggregate amount of funds and other consideration
paid by the Borrowers (other than in common stock or Permitted Preferred Stock
of a Borrower) in connection with permitted acquisitions under Section 9.5.1
hereof, does not exceed $25,000,000 in the aggregate after the Closing Date or
$15,000,000 in any calendar year and (ii) at all times during the period of 30
consecutive days immediately preceding the making of such Investment and for a
period of 30 consecutive days immediately after giving effect thereto, the
Borrowers shall have Excess Availability of not less than $5,000,000;
(g) Investments by a Borrower in any other
Borrower;
(h) Investments consisting of promissory notes
received as proceeds of asset dispositions permitted by Section
9.5.2 hereof;
(i) Investments made in connection with
Distributions permitted under Section 9.4 hereof;
(j) Investments in a Subsidiary of a Borrower, including, without
limitation, Terex Credit Corporation, formed primarily for the purpose of
financing purchases and leases of inventory manufactured by the Borrowers of up
to an aggregate amount so invested, in cash and/or in property, other than
Collateral, having an aggregate fair market value, not to exceed $3,000,000 so
invested on or after the date hereof in cash or in such property by all
Borrowers on a combined basis;
(k) Investments in connection with the
acquisition of new Subsidiaries to the extent (including amounts)
permitted by Section 9.5.1(b) hereof;
(l) Investments after the Closing Date by a Borrower in common
stock or Permitted Preferred Stock of such Borrower or which do not require any
cash or, except as otherwise permitted hereunder, property to be transferred
from such Borrower; and
(m) Investments (in addition to Investments permitted in clause
(a) through (l) hereof) in an aggregate amount not to exceed $5,000,000
outstanding at any time.
Section 9.4 Distributions. None of the Borrowers will make any
Distributions, provided that (a) a Borrower may make a Distribution to any other
Borrower, and (b) the Borrowers may make Distributions (including, without
limitation, redemptions or repurchases) in respect of the Preferred Stock
subject to Section 9.13 hereof, provided, that no Event of Default has occurred
and is continuing or would result from any such Distribution.
Section 9.5 Merger, Consolidation and Disposition of
Assets.
Section 9.5.1 Mergers and Acquisitions. None of the Borrowers
will become a party to any merger or consolidation, or agree to or effect any
asset acquisition or stock acquisition (other than the acquisition of assets in
the ordinary course of business consistent with past practices) except for (a)
the merger or consolidation of one or more Borrowers with and into another
Borrower or a holding company with no assets or liabilities other than the
Equity Securities of a Borrower and the liabilities associated therewith,
provided that the Borrower is the surviving corporation in any such merger or
consolidation or (b) asset and stock acquisitions, provided that (i) the sum of
(A) the aggregate Investment or other outlay of funds, assumption of
Indebtedness or other consideration paid for all such asset and stock
acquisitions (other than in common stock or Permitted Preferred Stock of a
Borrower) by the Borrowers, plus (B) the aggregate amount of Investments made by
the Borrowers pursuant to Section 9.3(f) hereof, does not exceed $25,000,000 in
the aggregate after the Closing Date or $15,000,000 in any calendar year and
(ii) at all times during the period of 30 consecutive days immediately preceding
the making of such acquisition and for a period of 30 consecutive days
immediately after such acquisition, the Borrowers shall have Excess Availability
of not less than $5,000,000.
Section 9.5.2 Disposition of Assets. None of the Borrowers will
become a party to or agree to or effect any disposition of assets, other than:
(a) the disposition of assets in the
ordinary course of business, consistent with past practices and
(b) the sale of assets (other than
Collateral) on an arms'-length basis provided that (i) no Event of Default shall
have occurred and be continuing or shall result from such sale, (ii) the
aggregate amount of gross cash proceeds received by the Borrowers from all such
sales after the Closing Date does not exceed $15,000,000, and (iii) the
Borrowers deliver to the Agent, on the date of any such sale, a certificate with
respect to the matters set forth in clauses (i) and (ii) of this Section
9.5.2(b).
Section 9.6 Compliance with Environmental Laws. None of the Borrowers
will or permit any of its Subsidiaries to (a) use any of its Real Estate or any
portion thereof for the handling, processing, storage or disposal of Hazardous
Substances except in compliance with all environmental laws, (b) cause or permit
to be located on any of its Real Estate any underground tank or other
underground storage receptacle for Hazardous Substances except in compliance
with all environmental laws, (c) generate any Hazardous Substances on any of its
Real Estate except in compliance with all environmental laws, (d) conduct any
activity at any of its Real Estate or use any of its Real Estate in any manner
so as to cause a release (i.e. releasing, spilling, leaking, pumping, pouring,
emitting, emptying, discharging, injecting, escaping, leaching, disposing or
dumping) or threatened release of Hazardous Substances on, upon or into such
Real Estate or (e) otherwise conduct any activity at any of its Real Estate or
use any of its Real Estate in any manner that would violate any Environmental
Law or bring such Real Estate in violation of any Environmental Law; except
where any of the foregoing would not have a material adverse effect on the
Borrowers' business, assets or financial condition on a consolidated basis or
the rights of the agent and the Banks in or to any of the Collateral.
Section 9.7 Employee Benefit Plans. None of the
Borrowers nor any ERISA Affiliate will:
(a) engage in any "prohibited transaction" within the meaning of
Section 406 of ERISA or Section 4975 of the Code which could result in a
material liability for any of the Borrowers; or
(b) permit any Guaranteed Pension Plan to incur an "accumulated
funding deficiency", as such term is defined in Section 302 of ERISA, whether or
not such deficiency is or may be waived; or
erp fail to contribute to any Guaranteed Pension Plan to an
extent which, or terminate any Guaranteed Pension Plan in a manner which, could
result in the imposition of a lien or encumbrance on the assets of any of the
Borrowers pursuant to Section 302(f) or Section 4068 of ERISA; or
(d) permit or take any action which would result in the aggregate
benefit liabilities (with the meaning of Section 4001 of ERISA) of all
Guaranteed Pension Plans exceeding the value of the aggregate assets of such
Plans, disregarding for this purpose the benefit liabilities and assets of any
such Plan with assets in excess of benefit liabilities.
Section 9.8 Bank Accounts. None of the Borrowers will (a) establish any
bank accounts other than those listed on Schedule 7.20 attached hereto without
the Agent's prior written consent, (b) violate directly or indirectly any Agency
Agreement in favor of the Agent for the benefit of the Banks and the Agent with
respect to such account or the Lock Box Agreement or (c) deposit into any of the
payroll accounts listed on Schedule 7.20 attached hereto any amounts in excess
of amounts necessary to pay current payroll obligations from such accounts.
9.9 Business Activities. None of the Borrowers will or will permit any
of its Subsidiaries to, engage directly or indirectly (whether through
Subsidiaries or otherwise) in any type of business other than the business of
the manufacture, distribution and/or sale of capital equipment and replacement
parts and businesses incidental or related thereto.
Section 9.10 Change of Chief Executive Office or Corporate Name. None
of the Borrowers will change its chief executive office, federal employer
identification number or its corporate name, unless it shall have (a) given the
Banks at least 30 days' advance written notice of such change, and (b) filed in
all necessary jurisdictions such UCC-3 financing statements or other documents
as may be necessary to continue without impairment or interruption the
perfection and priority of the liens on the Collateral in favor of the Agent
pursuant to the Security Documents.
Section 9.11 Fiscal Year. Neither Terex nor any of its Subsidiaries
will change the date of the end of its fiscal year from that set forth in
Section 7.23 hereof.
Section 9.12 Transactions with Affiliates. Except as otherwise
expressly permitted by the terms hereof, none of the Borrowers will (a) engage
in any transaction with any Affiliate on terms more favorable to such Affiliate
than would have been obtainable on an arms'-length basis, considered from the
perspective of such Borrower, or (b) pay, or enter into any agreement requiring
such Borrower to pay, salary or bonus or other compensation payments to any
officer or management employee of such Borrower or holder of any title or
office, in an amount in excess of reasonable compensation paid for similar
services by similar businesses similarly situated, provided however, that the
following transactions are permitted: (i) transactions between Borrowers or
transactions otherwise permitted under Section Section 9.1 or 9.3 hereof, (ii)
employment agreements entered into by any of the Borrowers in the ordinary
course of business with the approval of such Borrower's Board of Directors,
(iii) good xxxxx xxxx fide purchases and sales of Inventory and services made in
the ordinary course of business consistent with past practice between any
Borrower and any other Borrower or any Unrestricted Subsidiary and (iv)
reasonable directors' fees for members of the Board of Directors of Terex.
Section 9.13 Note Indenture; Preferred Stock. Terex will not (a) (i)
amend, modify, alter or change any of the material terms of the Senior Secured
Notes, the Note Indenture or any agreements, documents or instruments executed
and/or delivered in connection therewith, including, but not limited to, any
terms thereof relating to payments, redemptions or amortization, financial
covenants, defaults, or any collateral therefor, except to the extent that such
amendments, modifications, alterations or changes shall make any such terms no
less favorable to the Borrowers in the reasonable determination of the Agent or
(ii) amend, modify, alter or change any of the material terms of any of the
Preferred Stock except to the extent that such amendments, modifications,
alterations or changes shall make any such terms no less favorable to the
Borrowers in the reasonable determination of the Agent, or (b) give any notice
of optional redemption or defeasance or optional prepayment or offer to
repurchase, or make, either directly or indirectly, any payment of principal of
or interest on or in redemption, defeasance, retirement or repurchase of any of
the Senior Secured Notes or Preferred Stock, except for (i) the regularly
scheduled payments of principal and interest or in connection with a mandatory
redemption required by the terms of such instruments or the Note Indenture or
the Preferred Stock, and (ii) the optional redemption or repurchase of all or
any of the Senior Notes or the Preferred Stock provided that each of the
following conditions are satisfied:
(a) no Event of Default shall have occurred and be continuing at
the time of the redemption or repurchase of such Senior Secured Notes or
Preferred Stock and no Event of Default will exist after giving effect to the
redemption or repurchase of such Senior Secured Notes or Preferred Stock, as
applicable;
(b) the Excess Availability is not less than the Required Excess
Availability Amount immediately prior to and immediately subsequent to (on a pro
forma basis) the redemption or repurchase of such Senior Secured Notes or
Preferred Stock;
(c) either (i) the Borrowers have, on or before the date of such
redemption or repurchase, received Net Proceeds from the issuance of Equity
Securities and such redemption or repurchase, as applicable, is, subject to the
provisions of Section 2.3.1(c) hereof, made with such Net Proceeds or (ii) the
Supplemental Liquidity Basket, on or before the date of such redemption or
repurchase has been reduced to $0.00;
(d) the Borrowers have, on or before the date of such redemption
or repurchase, delivered to the Agent pro forma financial statements of Terex
and its Subsidiaries which reflect compliance by the Borrowers with the
financial covenants set forth in Section 10 hereof for a period of one year; and
(e) Terex shall have delivered to the Agent no later than fifteen
Business Days after giving notice of the redemption or repurchase of such Senior
Secured Notes or Preferred Stock (but prior to such redemption or repurchase), a
certificate signed by an authorized officer of Terex and evidence satisfactory
to the Agent showing compliance with the provisions of clauses (A) through (D)
hereof.
Section 10 FINANCIAL COVENANTS OF THE BORROWERS. Each of the Borrowers
jointly and severally covenants and agrees that, so long as any Loan, Unpaid
Reimbursement Obligation, Letter of Credit or Note is outstanding or any Bank
has any obligation to make any Loans or the Agent has any obligation to issue,
extend or renew any Letters of Credit:
Section 10.1 Cash Flow Coverage Ratio. The Borrowers will not permit
the ratio of (a) the Consolidated Cash Flow of Terex and its Subsidiaries as
measured as at the end of each fiscal quarter of Terex for the period of the
four immediately preceding fiscal quarters, minus the aggregate amount of
Capital Expenditures made by Terex and its Subsidiaries during such period,
minus the aggregate amount of income tax expense of Terex and its Subsidiaries
during such period to (b) the sum of the Consolidated Interest Expense of Terex
and its Subsidiaries for such period, plus the Total Financial Obligations of
Terex and its Subsidiaries for such period, to be less than 1.00 to 1.00.
Section 10.2 Capital Expenditures. Terex and its Subsidiaries will not
make Consolidated Capital Expenditures in any fiscal year that exceed, in the
aggregate, $15,000,000 for such fiscal year.
Section 11 CLOSING CONDITIONS. The obligations of the Banks to make the
initial Loans and of the Agent to issue any initial Letters of Credit shall be
subject to the satisfaction of the following conditions precedent on or prior to
May 12, 1997:
Section 11.1 Loan Documents; Acquisition Documents. (a) Each of the
Loan Documents shall have been duly executed and delivered by the respective
parties thereto, shall be in full force and effect and shall be in form and
substance reasonably satisfactory to each of the Banks. Each Bank shall have
received a fully executed copy of each such document.
(b) Each of the Acquisition Documents shall have been executed and
delivered by the respective parties thereto and be in full force and effect. The
Agent shall have received certified copies of the Acquisition Documents.
Section 11.2 Certified Copies of Charter Documents. Each of the Banks
shall have received from each of the Borrowers a copy, certified by a duly
authorized officer of such Person to be true and complete on the Closing Date,
of each of (a) its charter or other incorporation documents as in effect on such
date of certification, and (b) its by-laws as in effect on such date.
Section 11.3 Corporate Action. All corporate action necessary for the
valid execution, delivery and performance by each of the Borrowers of this
Credit Agreement and the other Loan Documents shall have been duly and
effectively taken, and evidence thereof reasonably satisfactory to the Agent
shall have been provided to each of the Banks.
Section 11.4 Incumbency Certificates. Each of the Banks shall have
received from each of the Borrowers an incumbency certificate, dated as of the
Closing Date, signed by a duly authorized officer of such Borrower, and giving
the name and bearing a specimen signature of each individual who shall be
authorized: (a) to sign, in the name and on behalf of such Borrower, each of the
Loan Documents; (b) to make Loan Requests and Conversion Requests and to apply
for Letters of Credit; and (c) to give notices and to take other action on its
behalf under the Loan Documents.
Section 11.5 Validity of Liens. The Security Documents shall be
effective to create in favor of the Agent a legal, valid and enforceable first
priority (except for Permitted Liens) security interest in and lien upon the
Collateral. All filings, recordings, deliveries of instruments and other actions
reasonably necessary or desirable in the opinion of the Agent to protect and
preserve such security interests shall have been duly effected. The Agent shall
have received evidence thereof in form and substance reasonably satisfactory to
the Agent.
Section 11.6 Perfection Certificates and UCC Search Results. The Agent
shall have received from each of the Borrowers a completed and fully executed
Perfection Certificate and the results of UCC searches with respect to the
Collateral, indicating no liens other than Permitted Liens and otherwise in form
and substance reasonably satisfactory to the Agent.
Section 11.7 Certificates of Insurance. The Agent shall have received
(a) a certificate of insurance from an independent insurance broker dated as of
the Closing Date, identifying insurers, types of insurance, insurance limits,
and policy terms, and otherwise describing the insurance obtained in accordance
with the provisions of the Security Agreement and (b) certified copies of all
policies evidencing such insurance (or certificates therefore signed by the
insurer or an agent authorized to bind the insurer).
Section 11.8 Agency Agreements. The Agent shall have received an Agency
Agreement, in form and substance satisfactory to the Agent, from each bank at
which any Borrower maintains depository accounts (including bank agency or lock
box agreements) concerning the Agent's interest for the benefit of the Banks and
the Agent in such accounts.
Section 11.9 Borrowing Base Reports. The Agent shall have received from
the Borrowers Borrowing Base Reports evidencing Borrowing Base A as at March 28,
1997 and Borrowing Base B as at the last day of the calendar month immediately
preceding the Closing Date.
Section 11.nt Certain Reports. (a) The Agent shall have received from
the Borrowers the most recent Accounts Receivable aging report of the Borrowers
dated as of a date which shall be no more than fifteen (15) days prior to the
Closing Date and the Borrowers shall have notified the Agent in writing on the
Closing Date of any material adverse deviation from the Accounts Receivable
values reflected in such Accounts Receivable aging report and shall have
provided the Agent with such supplementary documentation as the Agent may
reasonably request.
(b) The Agent shall have also received from the Borrowers an
accounts payable report reflecting each account payable of the Borrowers in
excess of $500,000 as of March 28, 1997.
(c) The Agent shall have received from a due diligence report on
the Borrowers from Price Waterhouse LLP and such report shall be satisfactory to
the Agent in all respects.
Section 11.11 Financial Condition; Solvency
Certificate.
(a) The Banks shall have received the financial statements
referred to in Section 7.4.1 hereof, and the Banks shall be satisfied (in the
exercise of their reasonable judgments) that such financial statements fairly
present the business and financial condition of Terex and its Subsidiaries. The
capitalization of the Borrowers on the Closing Date shall be reasonably
satisfactory to the Agent in all respects.
(b) Each of the Banks shall have received an officer's certificate
of the Borrowers dated as of the Closing Date as to the solvency of each of the
Borrowers following the consummation of the Acquisition and the transactions
contemplated herein and in form and substance reasonably satisfactory to the
Banks.
Section 11.12 Opinions of Counsel. Each of the Banks and the Agent
shall have received a favorable legal opinion addressed to the Banks and the
Agent, dated as of the Closing Date, in form and substance satisfactory to the
Banks and the Agent, from:
(a) Xxxxxx X. Xxxxxxxxx, Esq., general counsel of
Terex, in the form of the opinion set forth on Schedule 11.12
attached hereto;
(b) Robinson, Silverman, Xxxxxx, Aronsohn & Xxxxxx LLP, special
counsel to the Borrowers in the form of the opinion set forth on Schedule 11.12
attached hereto; and
(c) Barly, Xxxxxx, Xxxxx & Xxxxx LLP; Xxxxxx Xxxxxxx Xxxxxxx &
Xxxxxxx X.X.; Xxxxx & Xxxxxxx; and Xxxxxx, Xxxxx & Xxxxxxx LLP, each special
local counsel to the Borrowers in the forms of the opinions set forth on
Schedules 11.12 attached hereto.
Section 11.13 Payment of Fees. The Borrowers shall have paid to the
Agent the closing fee and Agent's Fee pursuant to Section Section 5.1 and 5.2
hereof.
Section 11.14 Payoff Letter. The Agent shall have received a payoff
letter from the Existing Lenders, indicating the amount of the obligations of
the Borrowers to the Existing Lenders under the Congress Agreement and an
acknowledgment by the Existing Lenders that upon receipt of such funds it will
forthwith execute and deliver to the Agent for filing all termination statements
and take such other actions as may be necessary to discharge all security
interests granted by the Borrowers in respect of their obligations under the
Congress Agreement.
Section 11.15 Loan Request; Disbursement Instructions. The Borrowers
shall have delivered to the Agent a Loan Request with respect to the Loans
requested to be made on the Closing Date. The Agent shall have received
disbursement instructions from the Borrowers, indicating that a portion of the
proceeds of the Loans, in an amount equal to the aggregate obligations of the
Borrowers outstanding under the Congress Agreement, are paid to the Existing
Lenders.
Section 11.16 Closing Certificate. The Agent shall have received a
closing certificate from the Borrowers dated as of the Closing Date, in form and
substance reasonably satisfactory to the Banks.
Section 11.17 Closing of Acquisition. The Acquisition shall have been
duly consummated on or before the Closing Date in all material respects in
accordance with the Acquisition Documents. After giving effect thereto, Terex
shall own, directly or indirectly, all of the outstanding shares of capital
stock of the Companies (as defined in the Acquisition Documents), free and clear
of all security interests, liens and encumbrances. The purchase price of the
capital stock acquired pursuant to the Acquisition and all expenditures and
transactions costs associated with the Acquisition shall not exceed $100,000,000
in the aggregate, exclusive of post-closing price adjustments.
Section 11.18 Commercial Finance Exam and Appraisal. The Agent shall
have received a commercial finance examination of the Borrowers' Accounts
Receivable and Inventory and such commercial finance examination shall be
reasonably satisfactory to the Agent in all respects. The Agent shall also have
received an orderly liquidation value appraisal of the Inventory and such
appraisal shall be reasonably satisfactory to the Agent in all respects.
Section 11.19 Excess Availability. On the Closing Date, after giving
effect to the Loans to be made to, and the Letters of Credit to be issued on the
account of, the Borrowers on the Closing Date, the Excess Availability shall not
be less than $25,000,000.
Section 12 CONDITIONS TO ALL BORROWINGS. The obligations of the Banks to
make any Loan and of the Agent to issue, extend or renew any Letter of Credit,
in each case whether on or after the Closing Date, shall also be subject to the
satisfaction of the following conditions precedent:
Section 12.1 Representations True; No Event of Default. Each of the
representations and warranties of each of the Borrowers contained in this Credit
Agreement, the other Loan Documents or in any document or instrument delivered
pursuant to or in connection with this Credit Agreement shall be true as of the
date as of which they were made and shall also be true at and as of the time of
the making of such Loan or the issuance, extension or renewal of such Letter of
Credit, with the same effect as if made at and as of that time (except to the
extent of (a) changes resulting from transactions contemplated or permitted by
this Credit Agreement and the other Loan Documents and (b) changes occurring in
the ordinary course of business that do not have a material adverse effect on
the assets, business, or financial condition of the Borrowers on a consolidated
basis or the rights of the Agent and the Banks in or to any of the Collateral,
and to the extent that such representations and warranties relate expressly to
an earlier date) and no Default or Event of Default shall have occurred and be
continuing.
Section 12.2 No Legal Impediment. No change shall have occurred in any
law or regulations thereunder or interpretations thereof that in the reasonable
opinion of any Bank would make it illegal for such Bank to make such Loan or to
participate in the issuance, extension or renewal of such Letter of Credit or in
the reasonable opinion of the Agent would make it illegal for the Agent to
issue, extend or renew such Letter of Credit.
Section 12.3 Governmental Regulation. Each Bank shall have received
such statements in substance and form reasonably satisfactory to such Bank as
such Bank shall require for the purpose of compliance with any applicable
regulations of the Comptroller of the Currency or the Board of Governors of the
Federal Reserve System.
Section 12.4 Proceedings and Documents. All proceedings in connection
with the transactions contemplated by this Credit Agreement, the other Loan
Documents and all other documents incident thereto shall be reasonably
satisfactory in substance and in form to the Banks and to the Agent and the
Agent's Special Counsel, and the Banks, the Agent and such counsel shall have
received all information and such counterpart originals or certified or other
copies of such documents as the Agent may reasonably request.
Section 12.5 Borrowing Base Reports. The Agent shall have received the
most recent Borrowing Base Reports required to be delivered to the Agent in
accordance with Section 8.4(f) and Section 8.4(h) hereof and, if requested by
the Agent, a Borrowing Base Report with respect to Borrowing Base A dated within
five (5) days of the Drawdown Date of such Loan or of the date of issuance,
extension or renewal of such Letter of Credit.
Section 13 EVENTS OF DEFAULT; ACCELERATION; ETC.
Section 13.1 Events of Default and Acceleration. If any of the
following events ("Events of Default" or, if the giving of notice or the lapse
of time or both is required, then, prior to such notice or lapse of time,
"Defaults") shall occur:
(a) the Borrowers shall fail to pay any principal of the Loans or
any Reimbursement Obligation when the same shall become due and payable, whether
at the stated date of maturity or any accelerated date of maturity or at any
other date fixed for payment;
(b) the Borrowers shall fail to pay any interest on the Loans, the
commitment fee, any Letter of Credit Fee, the Agent's Fee, or other sums due
hereunder or under any of the other Loan Documents, when the same shall become
due and payable, whether at the stated date of maturity or any accelerated date
of maturity or at any other date fixed for payment, and such failure shall
continue for two (2) Business Days;
(c) any of the Borrowers shall fail to comply with any of its
covenants contained in Section 8, 9 or 10 hereof (other than those specified
elsewhere in this Section 13.1);
(d) the Borrowers shall fail to comply with any of their covenants
contained in Section Section 8.7, 8.8 or 8.14 hereof and such failure shall
continue for ten (10) Business Days;
(e) the Borrowers shall fail to comply with any of their covenants
contained in the second sentence of Section 8.6, Section Section 8.5, 8.9 (other
than 8.9.1), 8.10, 8.11, 8.15, 9.6, 9.7, 9.9 or 9.12 hereof and such failure
shall continue for fifteen (15) Business Days;
(f) any of the Borrowers shall fail to perform any term, covenant
or agreement contained herein or in any of the other Loan Documents (other than
those specified elsewhere in this Section 13.1) for fifteen (15) Business Days
after written notice of such failure has been given to the Borrowers by the
Agent;
(g) any representation or warranty of any of the Borrowers in this
Credit Agreement or any of the other Loan Documents or in any other document or
instrument delivered pursuant to or in connection with this Credit Agreement
shall prove to have been false in any material respect upon the date when made
or deemed to have been made or repeated;
(h) (i) any Borrower or any Unrestricted Subsidiary (whether a
Material Subsidiary or an Immaterial Subsidiary) whose Indebtedness is
guaranteed by a Borrower shall fail to pay at maturity, or within any applicable
period of grace, any obligation for borrowed money or credit received or in
respect of any Capitalized Leases in excess of $5,000,000, or fail to observe or
perform any material term, covenant or agreement contained in any agreement by
which it is bound, evidencing or securing borrowed money or credit received or
in respect of any Capitalized Leases in excess of $5,000,000 for such period of
time as would permit (assuming the giving of appropriate notice if required) the
holder or holders thereof or of any obligations issued thereunder to accelerate
the maturity thereof or (ii) any Material Subsidiary whose Indebtedness is not
guaranteed by a Borrower shall fail to pay at maturity, or within any applicable
period of grace, any obligation for borrowed money or credit received or in
respect of any Capitalized Leases in excess of $5,000,000, or fail to observe or
perform any material term, covenant or agreement contained in any agreement by
which it is bound, evidencing or securing borrowed money or credit received or
in respect of any Capitalized Leases in excess of $5,000,000 and the holder or
holders thereof or of any obligations issued thereunder have accelerated the
maturity thereof;
(i) any Borrower or any Material Subsidiary shall make an
assignment for the benefit of creditors, or admit in writing its inability to
pay or generally fail to pay its debts as they mature or become due, or shall
petition or apply for the appointment of a trustee or other custodian,
liquidator or receiver of such Person or of any substantial part of the assets
of such Person or shall commence any case or other proceeding relating to such
Person under any bankruptcy, reorganization, arrangement, insolvency,
readjustment of debt, dissolution or liquidation or similar law of any
jurisdiction, now or hereafter in effect, or shall take any action to authorize
or in furtherance of any of the foregoing, or if any such petition or
application shall be filed or any such case or other proceeding shall be
commenced against any Borrower or any Material Subsidiary and such Person shall
indicate its approval thereof, consent thereto or acquiescence therein or such
petition or application shall not have been dismissed within sixty (60) days
following the filing thereof;
(j) a decree or order is entered appointing any such trustee,
custodian, liquidator or receiver or adjudicating any Borrower or any Material
Subsidiary bankrupt or insolvent, or approving a petition in any such case or
other proceeding, or a decree or order for relief is entered in respect of any
Borrower or any Material Subsidiary in an involuntary case under federal
bankruptcy laws as now or hereafter constituted;
(k) there shall remain in force, undischarged, unsatisfied and
unstayed, for more than forty-five (45) days, whether or not consecutive, any
final judgment against any Borrower or any Material Subsidiary that, with other
outstanding final judgments, undischarged, against any Borrower and the Material
Subsidiaries exceeds in the aggregate $5,000,000;
(l) if any of the Loan Documents shall be cancelled, terminated,
revoked or rescinded or the Agent's security interests, mortgages or liens in a
substantial portion of the Collateral shall cease to be perfected, or shall
cease to have the priority contemplated by the Security Documents, in each case
otherwise than in accordance with the terms thereof or with the express prior
written agreement, consent or approval of the Banks, or any action at law, suit
or in equity or other legal proceeding to cancel, revoke or rescind any of the
Loan Documents shall be commenced by or on behalf of any of the Borrowers or any
of their respective stockholders, or any court or any other governmental or
regulatory authority or agency of competent jurisdiction shall make a
determination that, or issue a judgment, order, decree or ruling to the effect
that, any one or more of the Loan Documents is illegal, invalid or unenforceable
in accordance with the terms thereof;
(m) with respect to any Guaranteed Pension Plan, an ERISA
Reportable Event shall have occurred and the Majority Banks shall have
determined in their reasonable discretion that such event reasonably could be
expected to result in liability of any of the Borrowers to the PBGC or such
Guaranteed Pension Plan in an aggregate amount exceeding $5,000,000 and such
event in the circumstances occurring reasonably likely to constitute grounds for
the termination of such Guaranteed Pension Plan by the PBGC or for the
appointment by the appropriate United States District Court of a trustee to
administer such Guaranteed Pension Plan; or a trustee shall have been appointed
by the United States District Court to administer such Plan; or the PBGC shall
have instituted proceedings to terminate such Guaranteed Pension Plan;
(n) any Borrower or any Material Subsidiary shall be enjoined,
restrained or in any way prevented by the order of any court or any
administrative or regulatory agency from conducting any material part of its
business and such order shall continue in effect for more than forty-five (45)
days;
(o) there shall occur any material damage to, or loss, theft or
destruction of, any Collateral, whether or not insured, or any strike, lockout,
labor dispute, embargo, condemnation, act of God or public enemy, or other
casualty, which in any such case causes, for more than thirty (30) consecutive
days, the cessation or substantial curtailment of revenue producing activities
at any facility of any Borrower or any Material Subsidiary if such event or
circumstance is not covered by business interruption insurance and would have a
material adverse effect on the business or financial condition of such Person;
(p) there shall occur the loss, suspension or revocation of, or
failure to renew, any license or permit now held or hereafter acquired by any
Borrower or any Material Subsidiary if such loss, suspension, revocation or
failure to renew would have a material adverse effect on the business or
financial condition of such Person;
(q) any Borrower or any Material Subsidiary shall be indicted for
a state or federal crime, or any civil or criminal action shall otherwise have
been brought against any Borrower or any Material Subsidiary, a punishment for
which in any such case could include the forfeiture of any assets of a Borrower
included in either of the Borrowing Bases or any assets of such Person not
included in either of the Borrowing Bases but having a fair market value in
excess of $3,000,000;
(r) Terex shall at any time, legally or beneficially, directly or
indirectly, own less than 100% of the Voting Stock of each of the other
Borrowers (other than PPM Cranes, Inc.), or less than 90% of the Voting Stock of
PPM Cranes, Inc., in each case, as adjusted pursuant to any stock split, stock
dividend or recapitalization or reclassification of the capital stock of any
such Person;
(s) there shall occur (i) the sale, assignment, lease, transfer or
conveyance (in one transaction or a series of transactions) of all or
substantially all of Terex's assets to any Person or group (as such term is used
in Section 13(d)(3) of the Exchange Act), (ii) the liquidation or dissolution of
Terex or the adoption of a plan by the stockholders of Terex relating to the
dissolution or liquidation of Terex, (iii) the acquisition by any Person or
group (as such term is used in Section 13(d)(3) of the Exchange Act), of a
direct or indirect majority in interest (more than 50%) of the Voting Stock of
Terex by way of purchase, merger or consolidation or otherwise, or (iv) during
any period of two consecutive years, individuals who at the beginning of such
period constituted the Board of Directors of Terex (which includes any new
directors whose election by such Board of Directors or whose nomination for
election by the stockholders of Terex was approved by a vote of at least 66-2/3%
of the directors then still in office who were either directors at the beginning
of such period or whose election or nomination for election was previously so
approved) cease for any reason to constitute a majority of the Board of
Directors of Terex; or
(t) Terex or its Subsidiaries shall have incurred, by assessment,
settlement or in a judgment of the United States Tax Court (regardless of
whether such judgment may then be appealed) any liability for federal income
taxes which result in an expenditure of cash of not more than $15,000,000 in
excess of the amounts shown as owed on Terex and it Subsidiaries previously
filed federal income tax returns, taking into account any interest or penalties
assessed or assessable therewith and any net operating losses or tax credits
which are then available and are used to reduce the amounts of such liability;
then, and in any such event, so long as the same may be continuing, the
Agent may, and upon the request of the Majority Banks shall, by notice in
writing to the Borrowers declare all amounts owing with respect to this Credit
Agreement, the Notes and the other Loan Documents and all Reimbursement
Obligations to be, and they shall thereupon forthwith become, immediately due
and payable without presentment, demand, protest or other notice of any kind,
all of which are hereby expressly waived by each of the Borrowers; provided that
in the event of any Event of Default specified in Section Section 13.1(i),
13.1(j) or 13.1(l) hereof, all such amounts shall become immediately due and
payable automatically and without any requirement of notice from the Agent or
any Bank.
Section 13.2 Termination of Commitments. If any one or more of the
Events of Default specified in Section 13.1(i), Section 13.1(j) or Section
13.1(l) hereof shall occur, any unused portion of the credit hereunder shall
forthwith terminate and each of the Banks shall be relieved of all further
obligations to make Loans to the Borrowers and the Agent shall be relieved of
all further obligations to issue, extend or renew Letters of Credit. If any
other Event of Default shall have occurred and be continuing, the Agent may and,
upon the request of the Majority Banks, shall, by notice to the Borrowers,
terminate the unused portion of the credit hereunder, and upon such notice being
given such unused portion of the credit hereunder shall terminate immediately
and each of the Banks shall be relieved of all further obligations to make Loans
and the Agent shall be relieved of all further obligations to issue, extend or
renew Letters of Credit. No termination of the credit hereunder shall relieve
the Borrowers of any of the Obligations.
Section 13.3 Remedies. In case any one or more of the Events of Default
shall have occurred and be continuing, and whether or not the Banks shall have
accelerated the maturity of the Loans pursuant to Section 13.1 hereof, each
Bank, if owed any amount with respect to the Loans or the Reimbursement
Obligations, may proceed to protect and enforce its rights by suit in equity,
action at law or other appropriate proceeding, whether for the specific
performance of any covenant or agreement contained in this Credit Agreement and
the other Loan Documents or any instrument pursuant to which the Obligations to
such Bank are evidenced, including as permitted by applicable law the obtaining
of the ex parte appointment of a receiver, and, if such amount shall have become
due, by declaration or otherwise, proceed to enforce the payment thereof or any
other legal or equitable right of such Bank. No remedy herein conferred upon any
Bank or the Agent or the holder of any Note or purchaser of any Letter of Credit
Participation is intended to be exclusive of any other remedy and each and every
remedy shall be cumulative and shall be in addition to every other remedy given
hereunder or now or hereafter existing at law or in equity or by statute or any
other provision of law.
Section 13.4 Distribution of Collateral Proceeds. In the event that,
following the occurrence or during the continuance of any Event of Default, the
Agent or any Bank, as the case may be, receives any monies in connection with
the enforcement of any the Security Documents, or otherwise with respect to the
realization upon any of the Collateral, such monies shall be distributed for
application:
(a) first, to the payment of, or (as the case may be) the
reimbursement of the Agent for or in respect of all reasonable costs, expenses,
disbursements and losses which shall have been incurred or sustained by the
Agent in connection with the collection of such monies by the Agent, for the
exercise, protection or enforcement by the Agent of all or any of the rights,
remedies, powers and privileges of the Agent under this Credit Agreement or any
of the other Loan Documents or in respect of the Collateral or in support of any
provision of adequate indemnity to the Agent against any taxes or liens which by
law shall have, or may have, priority over the rights of the Agent to such
monies;
(b) second, to all other Obligations in such order or preference
as the Majority Banks may determine; provided, however, that distributions in
respect of such obligations shall be made (i) pari passu among Obligations with
respect to the Agent's fee payable pursuant to Section 5.2 hereof and all other
Obligations and (ii) Obligations owing to the Banks with respect to each type of
Obligation such as interest, principal, fees and expenses, shall be made among
the Banks pro rata; and provided, further, that the Agent may in its discretion
make proper allowance to take into account any Obligations not then due and
payable;
(c) third, upon payment and satisfaction in full or other
provisions for payment in full satisfactory to the Banks and the Agent of all of
the Obligations, to the payment of any obligations required to be paid pursuant
to Section 9-504(1)(c) of the Uniform Commercial Code of the Commonwealth of
Massachusetts; and
(d) fourth, the excess, if any, shall be returned to the Borrowers
or to such other Persons as are entitled thereto.
Section 14 SETOFF. Regardless of the adequacy of any collateral, during the
continuance of any Event of Default, any deposits or other sums credited by or
due from any of the Banks to any of the Borrowers and any securities or other
property of any of the Borrowers in the possession of such Bank may be applied
to or set off by such Bank against the payment of Obligations and any and all
other liabilities, direct, or indirect, absolute or contingent, due or to become
due, now existing or hereafter arising, of any of the Borrowers to such Bank.
Each of the Banks agrees with each other Bank that (a) if an amount to be set
off is to be applied to Indebtedness of a Borrower to such Bank, other than
Indebtedness evidenced by the Note held by such Bank or constituting
Reimbursement Obligations owed to such Bank, such amount shall be applied
ratably to such other Indebtedness and to the Indebtedness evidenced by such
Note held by such Bank or constituting Reimbursement Obligations owed to such
Bank, and (b) if such Bank shall receive from any of the Borrowers, whether by
voluntary payment, exercise of the right of setoff, counterclaim, cross action,
enforcement of the claim evidenced by the Note held by, or constituting
Reimbursement Obligations owed to, such Bank by proceedings against such
Borrower at law or in equity or by proof thereof in bankruptcy, reorganization,
liquidation, receivership or similar proceedings, or otherwise, and shall retain
and apply to the payment of the Note held by, or Reimbursement Obligations owed
to, such Bank any amount in excess of its ratable portion of the payments
received by all of the Banks with respect to the Notes held by, and
Reimbursement Obligations owed to, all of the Banks, such Bank will make such
disposition and arrangements with the other Banks with respect to such excess,
either by way of distribution, pro tanto assignment of claims, subrogation or
otherwise as shall result in each Bank receiving in respect of the Note held by
it or Reimbursement obligations owed it, its proportionate payment as
contemplated by this Credit Agreement; provided that if all or any part of such
excess payment is thereafter recovered from such Bank, such disposition and
arrangements shall be rescinded and the amount restored to the extent of such
recovery, but without interest.
Section 15 THE AGENT.
Section 15.1 Authorization. (a) The Agent is authorized to take such
action on behalf of each of the Banks and to exercise all such powers as are
hereunder and under any of the other Loan Documents and any related documents
delegated to the Agent, together with such powers as are reasonably incident
thereto, provided that no duties or responsibilities not expressly assumed
herein or therein shall be implied to have been assumed by the Agent.
(b) The relationship between the Agent and each of the Banks is
that of an independent contractor. The use of the term "Agent" is for
convenience only and is used to describe, as a form of convention, the
independent contractual relationship between the Agent and each of the Banks.
Nothing contained in this Credit Agreement nor the other Loan Documents shall be
construed to create an agency, trust or other fiduciary relationship between the
Agent and any of the Banks.
(c) As an independent contractor empowered by the Banks to
exercise certain rights and perform certain duties and responsibilities
hereunder and under the other Loan Documents, the Agent is nevertheless a
"representative" of the Banks, as that term is defined in Article 1 of the
Uniform Commercial Code, for purposes of actions for the benefit of the Banks
and the Agent with respect to all collateral security contemplated by the Loan
Documents. Such actions include the designation of the Agent as "secured party",
"mortgagee" or the like on all financing statements and other documents and
instruments, whether recorded or otherwise, relating to the attachment,
perfection, priority or enforcement of any security interests, mortgages or
deeds of trust in collateral security intended to secure the payment or
performance of any of the Obligations, all for the benefit of the Banks and the
Agent.
Section 15.2 Employees and Agents. The Agent may exercise its powers
and execute its duties by or through employees or agents and shall be entitled
to take, and to rely on, advice of counsel concerning all matters pertaining to
its rights and duties under this Credit Agreement and the other Loan Documents.
The Agent may utilize the services of such Persons as the Agent in its sole
discretion may reasonably determine, and all reasonable fees and expenses of any
such Persons shall be paid by the Borrowers.
Section 15.3 No Liability. Neither the Agent nor any of its
shareholders, directors, officers or employees nor any other Person assisting
them in their duties nor any agent or employee thereof, shall be liable for any
waiver, consent or approval given or any action taken, or omitted to be taken,
in good faith by it or them hereunder or under any of the other Loan Documents,
or in connection herewith or therewith, or be responsible for the consequences
of any oversight or error of judgment whatsoever, except that the Agent or such
other Person, as the case may be, may be liable for losses due to its willful
misconduct, gross negligence or fraud.
Section 15.4 No Representations. The Agent shall not be responsible for
the execution or validity or enforceability of this Credit Agreement, the Notes,
the Letters of Credit, any of the other Loan Documents or any instrument at any
time constituting, or intended to constitute, collateral security for the Notes,
or for the value of any such collateral security or for the validity,
enforceability or collectability of any such amounts owing with respect to the
Notes, or for any recitals or statements, warranties or representations made
herein or in any of the other Loan Documents or in any certificate or instrument
hereafter furnished to it by or on behalf of any of the Borrowers, or be bound
to ascertain or inquire as to the performance or observance of any of the terms,
conditions, covenants or agreements herein or in any instrument at any time
constituting, or intended to constitute, collateral security for the Notes or to
inspect any of the properties, books or records of any of the Borrowers. The
Agent shall not be bound to ascertain whether any notice, consent, waiver or
request delivered to it by any of the Borrowers or any holder of any of the
Notes shall have been duly authorized or is true, accurate and complete. The
Agent has not made nor does it now make any representations or warranties,
express or implied, nor does it assume any liability to the Banks, with respect
to the credit worthiness or financial conditions of any of the Borrowers. Each
Bank acknowledges that it has, independently and without reliance upon the Agent
or any other Bank, and based upon such information and documents as it has
deemed appropriate, made its own credit analysis and decision to enter into this
Credit Agreement.
Section 15.5 Payments.
Section 15.5.1 Payments to Agent. A payment by any of the
Borrowers to the Agent hereunder or any of the other Loan Documents for the
account of any Bank shall constitute a payment to such Bank. The Agent agrees
promptly to distribute to each Bank such Bank's pro rata share of payments
received by the Agent for the account of the Banks except as otherwise expressly
provided herein or in any of the other Loan Documents.
Section 15.5.2 Distribution by Agent. If in the opinion of the
Agent the distribution of any amount received by it in such capacity hereunder,
under the Notes or under any of the other Loan Documents might involve it in
liability, it may refrain from making distribution until its right to make
distribution shall have been adjudicated by a court of competent jurisdiction.
If a court of competent jurisdiction shall adjudge that any amount received and
distributed by the Agent is to be repaid, each Person to whom any such
distribution shall have been made shall either repay to the Agent its
proportionate share of the amount so adjudged to be repaid or shall pay over the
same in such manner and to such Persons as shall be determined by such court.
Section 15.5.3 Delinquent Banks. Notwithstanding anything to the
contrary contained in this Credit Agreement or any of the other Loan Documents,
any Bank that fails (a) to make available to the Agent its pro rata share of any
Loan or to purchase any Letter of Credit Participation or (b) to comply with the
provisions of Section 14 hereof with respect to making dispositions and
arrangements with the other Banks, where such Bank's share of any payment
received, whether by setoff or otherwise, is in excess of its pro rata share of
such payments due and payable to all of the Banks, in each case as, when and to
the full extent required by the provisions of this Credit Agreement, shall be
deemed delinquent (a "Delinquent Bank") and shall be deemed a Delinquent Bank
until such time as such delinquency is satisfied. A Delinquent Bank shall be
deemed to have assigned any and all payments due to it from the Borrowers,
whether on account of outstanding Loans, Unpaid Reimbursement Obligations,
interest, fees or otherwise, to the remaining nondelinquent Banks for
application to, and reduction of, their respective pro rata shares of all
outstanding Loans and Unpaid Reimbursement Obligations. The Delinquent Bank
hereby authorizes the Agent to distribute such payments to the nondelinquent
Banks in proportion to their respective pro rata shares of all outstanding Loans
and Unpaid Reimbursement Obligations. A Delinquent Bank shall be deemed to have
satisfied in full a delinquency when and if, as a result of application of the
assigned payments to all outstanding Loans and Unpaid Reimbursement Obligations
of the nondelinquent Banks, the Banks' respective pro rata shares of all
outstanding Loans and Unpaid Reimbursement Obligations have returned to those in
effect immediately prior to such delinquency and without giving effect to the
nonpayment causing such delinquency.
Section 15.6 Holders of Notes. The Agent may deem and treat the payee
of any Note or the purchaser of any Letter of Credit Participation as the
absolute owner or purchaser thereof for all purposes hereof until it shall have
been furnished in writing with a different name by such payee or by a subsequent
holder, assignee or transferee.
Section 15.7 Indemnity. The Banks ratably agree hereby to indemnify and
hold harmless the Agent and BancBoston Securities Inc. from and against any and
all claims, actions and suits (whether groundless or otherwise), losses,
damages, costs, expenses (including any expenses for which such Person has not
been reimbursed by the Borrowers as required by Section 16 hereof), and
liabilities of every nature and character arising out of or related to this
Credit Agreement, the Notes, or any of the other Loan Documents or the
transactions contemplated or evidenced hereby or thereby, or such Person's
actions taken hereunder or thereunder, except to the extent that any of the same
shall be directly caused by such Person's willful misconduct or gross
negligence.
Section 15.8 Agent as Bank. In its individual capacity, FNBB shall have
the same obligations and the same rights, powers and privileges in respect to
its Commitment and the Loans made by it, and as the holder of any of the Notes
and as the purchaser of any Letter of Credit Participations, as it would have
were it not also the Agent.
Section 15.9 Resignation. The Agent may resign at any time by giving
sixty (60) days prior written notice thereof to the Banks and the Borrowers.
Upon any such resignation, the Majority Banks shall have the right to appoint a
successor Agent. If no successor Agent shall have been so appointed by the
Majority Banks and shall have accepted such appointment within thirty (30) days
after the retiring Agent's giving of notice of resignation, then the retiring
Agent may, on behalf of the Banks, appoint a successor Agent, which shall be a
financial institution having a rating of not less than A or its equivalent by
Standard & Poor's Corporation. Unless an Event of Default shall have occurred
and be continuing, such successor Agent shall be reasonably acceptable to the
Borrowers. Upon the acceptance of any appointment as Agent hereunder by a
successor Agent, such successor Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the retiring Agent,
and the retiring Agent shall be discharged from its duties and obligations
hereunder. After any retiring Agent's resignation, the provisions of this Credit
Agreement and the other Loan Documents shall continue in effect for its benefit
in respect of any actions taken or omitted to be taken by it while it was acting
as Agent.
Section 15.10 Notification of Defaults and Events of Default. Each Bank
hereby agrees that, upon learning of the existence of a Default or an Event of
Default, it shall promptly notify the Agent thereof. The Agent hereby agrees
that upon receipt of any notice under this Section 15.10 it shall promptly
notify the other Banks of the existence of such Default or Event of Default.
Section 15.11 Duties in the Case of Enforcement. In case one of more
Events of Default have occurred and shall be continuing, and whether or not
acceleration of the Obligations shall have occurred, the Agent shall, if (a) so
requested by the Majority Banks and (b) the Banks have provided to the Agent
such additional indemnities and assurances against expenses and liabilities as
the Agent may reasonably request, proceed to enforce the provisions of the
Security Documents authorizing the sale or other disposition of all or any part
of the Collateral and exercise all or any such other legal and equitable and
other rights or remedies as it may have in respect of such Collateral. The
Majority Banks may direct the Agent in writing as to the method and the extent
of any such sale or other disposition, the Banks hereby agreeing to indemnify
and hold the Agent, harmless from all liabilities incurred in respect of all
actions taken or omitted in accordance with such directions, provided that the
Agent need not comply with any such direction to the extent that the Agent
reasonably believes the Agent's compliance with such direction to be unlawful or
commercially unreasonable in any applicable jurisdiction.
Section 16 EXPENSES. Each of the Borrowers jointly and severally agrees to
pay (a) the reasonable costs of producing and reproducing this Credit Agreement,
the other Loan Documents and the other agreements and instruments mentioned
herein, (b) any taxes (including any interest and penalties in respect thereto)
payable by the Agent or any of the Banks (other than taxes based upon the
Agent's or any Bank's net income) on or with respect to the transactions
contemplated by this Credit Agreement (the Borrowers hereby agreeing to
indemnify the Agent and each Bank with respect thereto), (c) the reasonable
fees, expenses and disbursements of the Agent's Special Counsel or any local
counsel to the Agent incurred in connection with the preparation, administration
or interpretation of the Loan Documents and other instruments mentioned herein,
each closing hereunder, and amendments, modifications, approvals, consents or
waivers hereto or hereunder and the termination hereof, (d) the reasonable fees,
expenses and disbursements of the Agent incurred by the Agent in connection with
the preparation, administration or interpretation of the Loan Documents and
other instruments mentioned herein, including all appraisal charges and
commercial examination expenses, and all reasonable fees, expenses and
disbursements incurred by BancBoston Securities Inc. in connection with the
syndication of FNBB's Commitment hereunder, (e) any fees, costs, expenses and
bank charges, including bank charges for returned checks, incurred by the Agent
in establishing, maintaining or handling agency accounts, lock box accounts and
other accounts for the collection of any of the Collateral, (f) all reasonable
out-of-pocket expenses (including without limitation reasonable attorneys' fees
and costs, which attorneys may be employees of any Bank or the Agent, and
reasonable consulting, accounting, appraisal, investment banking and similar
professional fees and charges) incurred by any Bank or the Agent in connection
with (i) the enforcement of or preservation of rights under any of the Loan
Documents against any of the Borrowers or the administration thereof after the
occurrence of a Default or Event of Default and (ii) any litigation, proceeding
or dispute whether arising hereunder or otherwise, in any way related to any
Bank's or the Agent's relationship with any of the Borrowers and (g) all
reasonable fees, expenses and disbursements of any Bank or the Agent incurred in
connection with UCC searches, UCC filings or recordings. The covenants of this
Section 16 shall survive payment or satisfaction of all other Obligations.
Section 17 INDEMNIFICATION. Each of the Borrowers jointly and severally
agrees to indemnify and hold harmless the Agent, BancBoston Securities Inc. and
the Banks from and against any and all claims, actions and suits whether
groundless or otherwise, and from and against any and all liabilities, losses,
damages and expenses of every nature and character arising out of this Credit
Agreement or any of the other Loan Documents or the transactions contemplated
hereby (unless to the extent that any of the foregoing results solely from the
gross negligence, willful misconduct or fraud of the indemnified party)
including, without limitation, (a) any actual or proposed use by any of the
Borrowers of the proceeds of any of the Loans or Letters of Credit, (b) the
reversal or withdrawal of any provisional credits granted by the Agent upon the
transfer of funds from bank agency or lock box accounts or in connection with
the provisional honoring of checks or other items, (c) any of the Borrowers
entering into or performing this Credit Agreement or any of the other Loan
Documents, or (d) with respect to Terex and its Subsidiaries and their
respective properties and assets, the violation of any Environmental Law, the
presence, disposal, escape, seepage, leakage, spillage, discharge, emission,
release or threatened release of any Hazardous Substances or any action, suit,
proceeding or investigation brought or threatened with respect to any Hazardous
Substances (including, but not limited to, claims with respect to wrongful
death, personal injury or damage to property), in each case including, without
limitation, the reasonable fees and disbursements of counsel and allocated costs
of internal counsel incurred in connection with any such investigation,
litigation or other proceeding. In litigation, or the preparation therefor, the
Banks, BancBoston Securities Inc., and the Agent shall be entitled to select
their own counsel and, in addition to the foregoing indemnity, the Borrowers
agree to pay promptly the reasonable fees and expenses of such counsel. If, and
to the extent that the obligations of the Borrowers under this Section 17 are
unenforceable for any reason, each of the Borrowers hereby agrees to make the
maximum contribution to the payment in satisfaction of such obligations which is
permissible under applicable law. The covenants contained in this Section 17
shall survive payment or satisfaction in full of all other Obligations.
Section 18 SURVIVAL OF COVENANTS, ETC. All covenants, agreements,
representations and warranties made herein, in the Notes, in any of the other
Loan Documents or in any documents or other papers delivered by or on behalf of
any of the Borrowers pursuant hereto shall be deemed to have been relied upon by
the Banks and the Agent, notwithstanding any investigation heretofore or
hereafter made by any of them, and shall survive the making by the Banks of any
of the Loans and the issuance, extension or renewal of any Letters of Credit, as
herein contemplated, and shall continue in full force and effect so long as any
Letter of Credit or any amount due under this Credit Agreement or the Notes or
any of the other Loan Documents remains outstanding or any Bank has any
obligation to make any Loans or the Agent has any obligation to issue, extend or
renew any Letter of Credit, and for such further time as may be otherwise
expressly specified in this Credit Agreement. All statements contained in any
certificate or other paper delivered to any Bank or the Agent at any time by or
on behalf of any of the Borrowers pursuant hereto or in connection with the
transactions contemplated hereby shall constitute representations and warranties
by such Borrower hereunder.
Section 19 ASSIGNMENT AND PARTICIPATION.
Section 19.1 Conditions to Assignment by Banks. Except as provided
herein, each Bank may assign to one or more Eligible Assignees all or a portion
of its interests, rights and obligations under this Credit Agreement (including
all or a portion of its Commitment Percentage and Commitment and the same
portion of the Loans at the time owing to it, the Notes held by it and its
participating interest in the risk relating to any Letters of Credit); provided
that (a) each of the Agent and, unless an Event of Default shall have occurred
and be continuing, the Borrowers shall have given their prior written consent to
such assignment, which consent, in the case of the Borrowers, will not be
unreasonably withheld, (b) each such assignment shall be of a constant, and not
a varying, percentage of all the assigning Bank's rights and obligations under
this Credit Agreement, (c) each assignment shall be in an amount not less than
$10,000,000 or, if less, the assigning Bank's Commitment Amount and (d) the
parties to such assignment shall execute and deliver to the Agent, for recording
in the Register (as hereinafter defined), an Assignment and Acceptance,
substantially in the form of Exhibit G attached hereto (an "Assignment and
Acceptance"), together with any Notes subject to such assignment. Upon such
execution, delivery, acceptance and recording, from and after the effective date
specified in each Assignment and Acceptance, which effective date shall be at
least five (5) Business Days after the execution thereof, (i) the assignee
thereunder shall be a party hereto and, to the extent provided in such
Assignment and Acceptance, have the rights and obligations of a Bank hereunder,
and (ii) the assigning Bank shall, to the extent provided in such assignment and
upon payment to the Agent of the registration fee referred to in Section 19.3
hereof, be released from its obligations under this Credit Agreement.
Section 19.2 Certain Representations and Warranties; Limitations;
Covenants. By executing and delivering an Assignment and Acceptance, the parties
to the assignment thereunder confirm to and agree with each other and the other
parties hereto as follows:
(a) other than the representation and warranty that it is the
legal and beneficial owner of the interest being assigned thereby free and clear
of any adverse claim, the assigning Bank makes no representation or warranty,
express or implied, and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with this
Credit Agreement or the execution, legality, validity, enforceability,
genuineness, sufficiency or value of this Credit Agreement, the other Loan
Documents or any other instrument or document furnished pursuant hereto or the
attachment, perfection or priority of any security interest;
(b) the assigning Bank makes no representation or warranty and
assumes no responsibility with respect to the financial condition of any of the
Borrowers or any other Person primarily or secondarily liable in respect of any
of the Obligations, or the performance or observance by any of the Borrowers or
any other Person primarily or secondarily liable in respect of any of the
Obligations of any of their obligations under this Credit Agreement or any of
the other Loan Documents or any other instrument or document furnished pursuant
hereto or thereto;
(c) such assignee confirms that it has received a copy of this
Credit Agreement, together with copies of the most recent financial statements
referred to in Section Section 7.4 and 8.4 hereof and such other documents and
information as it has deemed appropriate to make its own credit analysis and
decision to enter into such Assignment and Acceptance;
(d) such assignee will, independently and without reliance upon
the assigning Bank, the Agent or any other Bank and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under this Credit Agreement;
(e) such assignee represents and warrants that it
is an Eligible Assignee;
(f) such assignee appoints and authorizes the Agent to take such
action as agent on its behalf and to exercise such powers under this Credit
Agreement and the other Loan Documents as are delegated to the Agent by the
terms hereof or thereof, together with such powers as are reasonably incidental
thereto;
(g) such assignee agrees that it will perform in accordance with
their terms all of the obligations that by the terms of this Credit Agreement
are required to be performed by it as a Bank;
(h) such assignee represents and warrants that it
is legally authorized to enter into such Assignment and
Acceptance; and
(i) such assignee acknowledges that it has made arrangements with
the assigning Bank satisfactory to such assignee with respect to its pro rata
share of Letter of Credit Fees in respect of outstanding Letters of Credit.
Section 19.3 Register. The Agent shall maintain a copy of each
Assignment and Acceptance delivered to it and a register or similar list (the
"Register") for the recordation of the names and addresses of the Banks and the
Commitment Percentage of, and principal amount of the Loans owing to and Letter
of Credit Participations purchased by, the Banks from time to time. The entries
in the Register shall be conclusive, in the absence of manifest error, and the
Borrowers, the Agent and the Banks may treat each Person whose name is recorded
in the Register as a Bank hereunder for all purposes of this Credit Agreement.
The Register shall be available for inspection by the Borrowers and the Banks at
any reasonable time and from time to time upon reasonable prior notice. Upon
each such recordation, the assigning Bank agrees to pay to the Agent a
registration fee in the sum of $3,500, which fee shall not be one as to which
the Borrowers are responsible to reimburse the Banks pursuant to this Credit
Agreement.
Section 19.4 New Notes. Upon its receipt of an Assignment and
Acceptance executed by the parties to such assignment, together with each Note
subject to such assignment, the Agent shall (a) record the information contained
therein in the Register, and (b) give prompt notice thereof to the Borrowers and
the Banks (other than the assigning Bank). Within five (5) Business Days after
receipt of such notice and delivery of new Notes to the Borrowers for execution,
the Borrowers, at their own expense, shall execute and deliver to the Agent, in
exchange for each surrendered Note, a new Note to the order of such Eligible
Assignee in an amount equal to the amount assumed by such Eligible Assignee
pursuant to such Assignment and Acceptance and, if the assigning Bank has
retained some portion of its obligations hereunder, a new Note to the order of
the assigning Bank in an amount equal to the amount retained by it hereunder.
Such new Notes shall provide that they are replacements for the surrendered
Notes, shall be in an aggregate principal amount equal to the aggregate
principal amount of the surrendered Notes, shall be dated the effective date of
such in Assignment and Acceptance and shall otherwise be substantially the form
of the assigned Notes. Within ten (10) Business Days of issuance of any new
Notes pursuant to this Section 19.4, the Borrowers shall deliver an opinion of
counsel, addressed to the Banks and the Agent, relating to the due
authorization, execution and delivery of such new Notes and the legality,
validity and binding effect thereof, in form and substance reasonably
satisfactory to the Banks. The surrendered Notes shall be cancelled and returned
to the Borrowers.
Section 19.5 Participations. Each Bank may sell participations to one
or more banks or other entities in all or a portion of such Bank's rights and
obligations under this Credit Agreement and the other Loan Documents; provided
that (a) each such participation shall be in an amount of not less than
$10,000,000, (b) any such sale or participation shall not affect the rights and
duties of the selling Bank hereunder to the Borrowers and (c) the only rights
granted to the participant pursuant to such participation arrangements with
respect to waivers, amendments or modifications of the Loan Documents shall be
the rights to approve waivers, amendments or modifications that would reduce the
principal of or the interest rate on any Loans, extend the term or increase the
amount of the Commitment Amount of such Bank as it relates to such participant,
reduce the amount of any commitment fees or Letter of Credit Fees to which such
participant is entitled or extend any regularly scheduled payment date for
principal or interest.
Section 19.6 Disclosure. The Borrowers agree that in addition to
disclosures made in accordance with standard and customary banking practices any
Bank may disclose information obtained by such Bank pursuant to this Credit
Agreement to assignees or participants and potential assignees or participants
hereunder; provided that such assignees or participants or potential assignees
or participants shall agree (a) to treat in confidence such information unless
such information otherwise becomes public knowledge, (b) not to disclose such
information to a third party, except as required by law or legal process and (c)
not to make use of such information for purposes of transactions unrelated to
such contemplated assignment or participation.
Section each Assignee or Participant Affiliated with the Borrowers. If
any assignee Bank is an Affiliate of any of the Borrowers then any such assignee
Bank shall have no right to vote as a Bank hereunder or under any of the other
Loan Documents for purposes of granting consents or waivers or for purposes of
agreeing to amendments or other modifications to any of the Loan Documents or
for purposes of making requests to the Agent pursuant to Section Section 13.1 or
13.2 hereof, and the determination of the Majority Banks shall for all purposes
of this Credit Agreement and the other Loan Documents be made without regard to
such assignee Bank's interest in any of the Loans. If any Bank sells a
participating interest in any of the Loans or Reimbursement Obligations to a
participant, and such participant is a Borrower or an Affiliate of any Borrower,
then such transferor Bank shall promptly notify the Agent of the sale of such
participation. A transferor Bank shall have no right to vote as a Bank hereunder
or under any of the other Loan Documents for purposes of granting consents or
waivers or for purposes of agreeing to amendments or modifications to any of the
Loan Documents or for purposes of making requests to the Agent pursuant to
Section Section 13.1 or 13.2 hereof to the extent that such participation is
beneficially owned by a Borrower or any Affiliate of any Borrower, and the
determination of the Majority Banks shall for all purposes of this Credit
Agreement and the other Loan Documents be made without regard to the interest of
such transferor Bank in the Loans to the extent of such participation.
Section 19.8 Miscellaneous Assignment Provisions. Any assigning Bank
shall retain its rights to be indemnified pursuant to Section 16 hereof with
respect to any claims or actions arising prior to the date of such assignment.
If any assignee Bank is not incorporated under the laws of the United States of
America or any state thereof, it shall, prior to the date on which any interest
or fees are payable hereunder or under any of the other Loan Documents for its
account, deliver to the Borrowers and the Agent certification as to its
exemption from deduction or withholding of any United States federal income
taxes. If the Reference Bank transfers all of its interest, rights and
obligations under this Credit Agreement, the Agent shall, in consultation with
the Borrowers and with the consent of the Borrowers and the Majority Banks,
appoint another Bank to act as the Reference Bank hereunder. Anything contained
in this Section 19 to the contrary notwithstanding, any Bank may at any time
pledge all or any portion of its interest and rights under this Credit Agreement
(including all or any portion of its Notes) to any of the twelve Federal Reserve
Banks organized under Section 4 of the Federal Reserve Act, 12 U.S.C. Section
341. No such pledge or the enforcement thereof shall release the pledgor Bank
from its obligations hereunder or under any of the other Loan Documents.
Section 19.9 Assignment by Borrowers. None of the Borrowers shall
assign or transfer any of its rights or obligations under any of the Loan
Documents without the prior written consent of each of the Banks.
Section 19.10 FNBB Syndication. The Borrowers shall provide all
information reasonably requested by BancBoston Securities Inc., in form and
substance reasonably satisfactory to BancBoston Securities Inc., to complete the
syndication of FNBB's Commitment Amount, including, without limitation, all
information that is reasonably available and all projections prepared by or on
behalf of the Borrowers relating to the transactions contemplated hereby. The
Borrowers and their respective directors, officers, employees and agents shall,
at the reasonable request of BancBoston Securities Inc., meet with potential
lenders and provide such additional information as such persons might reasonably
request.
Section 20 NOTICES, ETC. Except as otherwise expressly provided in this
Credit Agreement, all notices and other communications made or required to be
given pursuant to this Credit Agreement or any of the other Loan Documents shall
be in writing and shall be delivered in hand, mailed by United States registered
or certified first class mail, postage prepaid, sent by overnight courier, or
sent by telegraph, telecopy, facsimile or telex and confirmed by delivery via
courier or postal service, addressed as follows:
(a) if to the Borrowers, at Terex Corporation, 000
Xxxx Xxxx Xxxx, Xxxxxxxx, Xxxxxxxxxxx 00000, Attention:
President, or at such other address for notice as the Borrower
shall last have furnished in writing to the Person giving the
notice;
(b) if to the Agent, at 000 Xxxxxxx Xxxxxx,
Xxxxxx, Xxxxxxxxxxxxx 00000, Attention: Xx. Xxxxx Xxxx, or such
other address for notice as the Agent shall last have furnished
in writing to the Person giving the notice; and
(c) if to any Bank, at such Bank's address set forth on Schedule
1.1 attached hereto, or such other address for notice as such Bank shall have
last furnished in writing to the Person giving the notice.
Any such notice or demand shall be deemed to have been duly given or
made and to have become effective (i) if delivered by hand, overnight courier or
facsimile to a responsible officer of the party to which it is directed, at the
time of the receipt thereof by such officer or the sending of such facsimile and
(ii) if sent by registered or certified first-class mail, postage prepaid, on
the third Business Day following the mailing thereof.
Section 21 GOVERNING LAW. THIS CREDIT AGREEMENT AND, EXCEPT AS OTHERWISE
SPECIFICALLY PROVIDED THEREIN, EACH OF THE OTHER LOAN DOCUMENTS ARE CONTRACTS
UNDER THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS AND SHALL FOR ALL PURPOSES
BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF SAID COMMONWEALTH OF
MASSACHUSETTS (EXCLUDING THE LAWS APPLICABLE TO CONFLICTS OR CHOICE OF LAW).
EACH OF THE BORROWERS AGREES THAT ANY SUIT FOR THE ENFORCEMENT OF THIS CREDIT
AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS MAY BE BROUGHT IN THE COURTS OF THE
COMMONWEALTH OF MASSACHUSETTS OR ANY FEDERAL COURT SITTING THEREIN AND CONSENTS
TO THE NONEXCLUSIVE JURISDICTION OF SUCH COURT AND SERVICE OF PROCESS IN ANY
SUCH SUIT BEING MADE UPON THE BORROWERS BY MAIL AT THE ADDRESS SPECIFIED IN
Section 20 HEREOF. EACH OF THE BORROWERS HEREBY WAIVES ANY OBJECTION THAT IT MAY
NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH SUIT OR ANY SUCH COURT OR THAT
SUCH SUIT IS BROUGHT IN AN INCONVENIENT COURT.
Section 22 HEADINGS. The captions in this Credit Agreement are for
convenience of reference only and shall not define or limit the provisions
hereof.
Section 23 COUNTERPARTS. This Credit Agreement and any amendment hereof may
be executed in several counterparts and by each party on a separate counterpart,
each of which when executed and delivered shall be an original, and all of which
together shall constitute one instrument. In proving this Credit Agreement it
shall not be necessary to produce or account for more than one such counterpart
signed by the party against whom enforcement is sought.
Section 24 ENTIRE AGREEMENT, ETC. The Loan Documents and any other
documents executed in connection herewith or therewith express the entire
understanding of the parties with respect to the transactions contemplated
hereby. Neither this Credit Agreement nor any term hereof may be changed,
waived, discharged or terminated, except as provided in Section 26 hereof.
Section 25 WAIVER OF JURY TRIAL. Each of the Borrowers, the Banks and the
Agent hereby waives its right to a jury trial with respect to any action or
claim arising out of any dispute in connection with this Credit Agreement, the
Notes or any of the other Loan Documents, any rights or obligations hereunder or
thereunder or the performance of which rights and obligations. Except as
prohibited by law, each of the Borrowers hereby waives any right it may have to
claim or recover in any litigation referred to in the preceding sentence any
special, exemplary, punitive or consequential damages or any damages other than,
or in addition to, actual damages. Each of the Borrowers (a) certifies that no
representative, agent or attorney of any Bank or the Agent has represented,
expressly or otherwise, that such Bank or the Agent would not, in the event of
litigation, seek to enforce the foregoing waivers and (b) acknowledges that the
Agent and the Banks have been induced to enter into this Credit Agreement, the
other Loan Documents to which it is a party by, among other things, the waivers
and certifications contained herein.
Section 26 CONSENTS, AMENDMENTS, WAIVERS, ETC. Any consent or approval
required or permitted by this Credit Agreement to be given by all of the Banks
may be given, and any term of this Credit Agreement, the other Loan Documents or
any other instrument related hereto or mentioned herein may be amended, and the
performance or observance by the Borrowers of any terms of this Credit
Agreement, the other Loan Documents or such other instrument or the continuance
of any Default or Event of Default may be waived (either generally or in a
particular instance and either retroactively or prospectively) with, but only
with, the written consent of the Borrowers and the written consent of the
Majority Banks. Notwithstanding the foregoing, no such amendment, modification,
waiver shall:
(a) change the rate of interest on the Notes (other than interest
accruing pursuant to Section 5.11.2 hereof following the effective date of any
waiver by the Majority Banks of the Event of Default relating thereto), the term
of the Notes, the Commitment Amounts of the Banks, and the amount of commitment
fee or Letter of Credit Fees hereunder without the written consent of the
Borrowers and the written consent of each Bank affected thereby;
(b) change the definition of Majority Banks or Borrowing Base B or this
Section 26 or, except pursuant to Section Section 2.11 and 8.14 hereof, increase
the advance rates set forth in the definition of Borrowing Base A, without the
written consent of the Borrowers and all of the Banks; or
(c) change the amount of the Agent's Fee or any Letter of Credit Fees
payable for the Agent's account or Section 15 hereof without the written consent
of the Borrowers and the Agent.
No waiver shall extend to or affect any obligation not expressly waived or
impair any right consequent thereon. No course of dealing or delay or omission
on the part of the Agent or any Bank in exercising any right shall operate as a
waiver thereof or otherwise be prejudicial thereto. No notice to or demand upon
the Borrowers shall entitle the Borrowers to other or further notice or demand
in similar or other circumstances.
Section 27 SEVERABILITY. The provisions of this Credit Agreement are
severable and if any one clause or provision hereof shall be held invalid or
unenforceable in whole or in part in any jurisdiction, then such invalidity or
unenforceability shall affect only such clause or provision, or part thereof, in
such jurisdiction, and shall not in any manner affect such clause or provision
in any other jurisdiction, or any other clause or provision of this Credit
Agreement in any jurisdiction.
IN WITNESS WHEREOF, the undersigned have duly executed this Credit
Agreement as a sealed instrument as of the date first set forth above.
TEREX CORPORATION
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By:
Title:
PPM CRANES, INC.
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By:
Title:
KOEHRING CRANES, INC.
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By:
Title:
SIMON-TELELECT INC.
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By:
Title:
SIMON AERIALS INC.
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By:
Title:
SIMON ATLANTICO, INC.
----------------------------------------
By:
Title:
XXXXX XXXX COAST INC.
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By:
Title:
SIMON AVIATION GROUND EQUIPMENT INC.
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By:
Title:
SIMON-RO CORPORATION
----------------------------------------
By:
Title:
THE FIRST NATIONAL BANK OF BOSTON,
individually and as Agent
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By:
Title:
