CREDIT AGREEMENT
This Credit Agreement (the "Agreement"), dated as of November 29,
2000, is among Michigan National Bank, a national banking association, and
the other banking institutions who appear as signatories to this Agreement
(each a "Bank" and collectively the "Banks"), Michigan National Bank, as
agent ("Agent"), and Xxxxxxx Industries, Inc., a Delaware corporation
("Borrower").
Recitals
A. Borrower has requested and, subject to the terms and conditions
of this Agreement, the Banks have agreed to provide to Borrower a line of
credit in the amount of $200,000,000.
B. Borrower's obligations under this Agreement are being
guaranteed by those Domestic Subsidiaries named on Exhibit 1.15(b), annexed
hereto (the "Restricted Subsidiaries"), each pursuant to separate Guaranty
dated as of the date hereof, in favor of the Banks.
NOW, THEREFORE, in consideration of the mutual covenants, conditions
and provisions as hereinafter set forth, the parties hereto agree as
follows:
1. DEFINITIONS.
1.1 Definitions. For purposes of this Agreement, the following
capitalized terms will have the following meanings (such definitions to be
equally applicable to the singular and plural forms thereof):
"Advances" means the Line of Credit Loans and the Letter of Credit
Advances, but shall exclude Interim Advances unless the context otherwise
requires, and "Advance" means any of the Advances.
"Advance Date" means a Business Day on which Borrower has requested in
accordance with this Agreement that an Advance be made hereunder.
"Agent" means Michigan National Bank, a national banking association,
when acting in its capacity as contractual representative of the Banks, and
not in its individual capacity as a Bank, and any permitted successor(s)
thereto, when so acting.
"Agent's Address" means 000 Xxxxxxxx Xxxxxx, Xxxx Xxxxx, Xxxxxxxx
00000, Attention: Xxxxxx X. Xxxx, or at such other address as Agent may
hereafter specify to Borrower in writing.
"Agent's Counsel" means Xxxxxx Xxxxxxx PLLC.
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"Alternate Base Rate" means the higher of the Prime Rate, or the
Federal Funds Rate plus .50 % per annum.
"Alternative Base Rate Advance" means advances which bear interest
calculated by reference to the Alternative Base Rate.
"Applicable Margin" means, with respect to Eurodollar Advances at any
time, the percentage rate per annum which is applicable at such time as set
forth in the Pricing Schedule.
"Average Line of Credit Loans" means, for any quarter, the sum of the
Line of Credit Loans outstanding at the close of business during each day
of the quarter, divided by ninety (90).
"Bank" means each and, when used in the plural, includes all of the
banking institutions which have signed (or which may hereafter become
parties to) this Agreement (including Michigan National Bank, when acting
as a Bank and not as Agent) and their respective successor(s) and permitted
assign(s).
"Borrower's Address" means 0000 Xxxxxxxxxx Xxxxx, Xxxxx 000, Xxxxxxx,
Xxxxxxxxx 00000, Attention: Chief Financial Officer, or at such other
address as Borrower may hereafter specify to Agent in writing.
"Borrower" means Xxxxxxx Industries, Inc., a Delaware corporation, and
its permitted successor(s) and assign(s).
"Borrowing Date" means the date on which an Advance is made hereunder.
"Borrowing Notice" is defined in Section 2.2.
"Borrower's Counsel" means Xxxx X. Xxxxx, General Counsel to Borrower.
"Business Day" means (i) with respect to any borrowing, payment or
rate selection of Eurodollar Advances, a day (other than a Saturday or
Sunday) on which banks generally are open in Detroit for the conduct of
substantially all of their commercial lending activities, interbank wire
transfers can be made on the Fedwire system and dealings in United States
dollars are carried on in the London interbank market and (ii) for all
other purposes, a day (other than a Saturday or Sunday) on which banks
generally are open in Detroit for the conduct of substantially all of their
commercial lending activities and interbank wire transfers can be made on
the Fedwire system.
"Capitalization" is the sum of Total Debt and net worth, as determined
in accordance with GAAP.
"Closing Date" means the date that the first Loan is funded pursuant
to this Agreement.
"Consolidated Interest Expense" means interest expense of the Borrower
and its Subsidiaries under GAAP.
"Code" means the Internal Revenue Code of 1986, as amended.
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"Consistent Basis" means, in reference to the application of GAAP (as
hereinafter defined), that the accounting principles observed in the
current period are comparable in all material respects to those applied in
the preceding period.
"Current Assets" and "Current Liabilities" are to be determined, both
as to classification of items and amounts, in accordance with GAAP applied
on a Consistent Basis, provided, that there will be excluded from Current
Assets: (1) all amounts due to Borrower from any of its officers or
employees; and (2) any appraised surplus in excess of book value.
"Domestic Subsidiaries" means all Subsidiaries organized under the
laws of any of the states of the United States of America which are engaged
in the manufacturing business in the broadest sense of that term, but
excluding Arava Natural Resources Company, Inc. and its wholly-owned
subsidiaries.
"Documents" means, in upper or lower case form, all "documents" and
"instruments" as such terms are defined in the Uniform Commercial Code as
adopted and in effect in the State of Michigan, in which Borrower now or
hereafter has any right, title or interest.
"EBITDA" means consolidated net earnings of the Borrower and the
Subsidiaries excluding extraordinary gains, plus the sum of income taxes,
interest expense, depreciation and amortization, all determined in
accordance with GAAP.
"Effective Rate" means the interest rate in effect for each respective
Loan from time to time when such Loan is not in default, as set forth in
Section 2 hereof.
"Environmental Protection Statute" means any federal, state or local
law, statute, or regulation enacted in connection with or relating to the
protection or regulation of the environment, including, but not limited to,
those laws, statutes and regulations regulating, relating to or imposing
liability or standards of conduct concerning the disposal, removal,
production, storing, refining, handling, transferring, processing or
transporting of hazardous materials and any regulations issued or
promulgated in connection with such statutes by any governmental agency or
instrumentality, including, without limitation, the Comprehensive
Environmental Response, Compensation and Liabilities Act, as amended (42
U.S.C. '9601 et seq.) and the Resource Conservation and Recovery Act of
1976, as amended (42 U.S.C. '6901 et seq.).
"ERISA" means the Employee Retirement Income Security Act of 1974, as
the same may from time to time be amended or supplemented, including any
rules or regulations issued in connection therewith.
"Eurodollar Advance" means an advance which, except as otherwise
provided in Section 3.1, bears interest at the applicable Eurodollar Rate.
"Eurodollar Base Rate" means, with respect to a Eurodollar Advance for
the relevant Interest Period, the rate determined by the Agent to be the
rate at which the Agent offers to place deposits in U.S. dollars with
first-class banks in the London interbank market at approximately 11:00
a.m. (London time) two Business Days prior to the first day of such
Interest Period, approximately in the amount of the Agent's relevant
Eurodollar Loan and having a maturity equal to such Interest Period.
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"Eurodollar Loan" means a Loan which, except as otherwise provided in
Section 3.1, bears interest at the applicable Eurodollar Rate.
"Eurodollar Rate" means, with respect to a Eurodollar Advance for the
relevant Interest Period, the sum of (i) the quotient of (a) the Eurodollar
Base Rate applicable to such Interest Period, divided by (b) one, minus the
Reserve Requirement (expressed as a decimal) applicable to such Interest
Period, plus (ii) the Applicable Margin.
"Event of Default" has the meaning set forth in Section 7.1 of this
Agreement.
"FASB" means the Financial Accounting Standards Board.
"Federal Funds Rate" means, for any day, the rate per annum (rounded
upward, if necessary, to the next higher 1/100th of 1%) 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 on
such day, as published by the Federal Reserve Bank of New York on the
Business Day next succeeding such day, provided that (i) if the day for
which such rate is to be determined is not a Business Day, the Federal
Funds Rate for such day shall be such rate on such transactions on the next
preceding Business Day as so published on the next succeeding Business Day,
and (ii) if such rate is not so published for any day, the Federal Funds
Rate for such day shall be the average rate charged to the Agent on such
day on such transactions, as determined by the Agent.
"FLSA" means the federal Fair Labor Standards Act, as the same may from
time to time be amended or supplemented, including any rules or regulations
issued in connection therewith.
"Fundamental Subsidiaries" are those Subsidiaries identified on
Exhibit 6.3.
"Funded Debt" means all Indebtedness.
"GAAP" means generally accepted accounting principles as set forth in
the opinions and pronouncements of the Accounting Principles Board and the
American Institute of Certified Public Accountants and statements and
pronouncements of the FASB or in such other statements by such other Person
as may be approved by a significant segment of the accounting profession,
which are applicable to the circumstances as of the date of determination
and which are applied on a Consistent Basis.
"Governmental Authority" means any nation or government, any state or
other political subdivision thereof, and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or
pertaining to government.
"Guaranties" means, collectively, the guaranties of the Borrower's
obligations under the Loan Documents by each of the Domestic Subsidiaries
listed in Exhibit 1.15(b) to this Agreement and all Domestic Subsidiaries
that are hereafter required to sign Guaranties as provided in Section 5.12
hereof (individually, a "Guarantor" and, collectively, the "Guarantors").
"Indebtedness" means all items of indebtedness of any Person, direct
or indirect, joint or several, including (without implied limitation):
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(a) All indebtedness guaranteed, directly or indirectly, in any
manner, or endorsed (other than for collection or deposit in the ordinary
course of business), or discounted with recourse by the Person;
(b) All indebtedness in effect guaranteed by the Person, directly
or indirectly, through agreements, contingent or otherwise: (1) to
purchase such indebtedness; or (2) to purchase, sell, or lease (as lessee
or lessor) property, products, materials, or supplies or to purchase or
sell services, primarily for the purpose of enabling the Person to make
payment of such indebtedness or to insure the owner of the indebtedness
against loss; or (3) to supply funds to, or in any other manner invest in,
the Person;
(c) All indebtedness secured by (or for which the holder of such
indebtedness has a right, contingent or otherwise, to be secured by), any
mortgage, deed of trust, pledge, lien, security interest, or other charge
or encumbrance upon property owned or acquired by the Person subject
thereto, whether or not the liabilities secured thereby have been assumed
by the Person; and
(d) All indebtedness incurred by the Person as the lessee of goods
or services under leases that, in accordance with GAAP, should be reflected
on the lessee's balance sheet.
"Interest Coverage Ratio" means the sum of EBITDA, less extraordinary
cash and non-cash income of the Borrower and its Subsidiaries, divided by
the amount of Consolidated Interest Expense (including interest arising
from capitalized leases) for the applicable period, computed as of the end
of each fiscal quarter for the period of four fiscal quarters then ended.
"Interest Period" means, with respect to a Eurodollar Advance, a
period of one, two or three months commencing on a Business Day selected by
the Borrower pursuant to this Agreement. Such Interest Period shall end on
the day which corresponds numerically to such date one, two, three or six
months thereafter, provided, however, that if there is no such numerically
corresponding day in such next, second, third or sixth succeeding month,
such Interest Period shall end on the last Business Day of such next,
second, third or sixth succeeding month. If an Interest Period would
otherwise end on a day which is not a Business Day, such Interest Period
shall end on the next succeeding Business Day, provided, however, that if
said next succeeding Business Day falls in a new calendar month, such
Interest Period shall end on the immediately preceding Business Day.
"Interim Advance" has the meaning set forth in Section 2.9 of this
Agreement.
"Letter of Credit Advance" has the meaning set forth in Section 2.2.5
of this Agreement.
"Lien" means any lien, mortgage, pledge, assignment, security
interest, charge or encumbrance of any kind (including any conditional sale
or other title retention agreement or any lease in the nature thereof) and
any agreement to give any lien, mortgage, pledge, assignment, security
interest, charge or other encumbrance of any kind.
"Line of Credit" means the line of credit established under Section
2.1 of this Agreement.
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"Line of Credit Loans" has the meaning set forth in Section 2.1 of
this Agreement.
"Line of Credit Maturity" means November 30, 2003.
"Line of Credit Notes" has the meaning set forth in Section 2.3 of
this Agreement.
"Loans" means the Line of Credit Loans, and "Loan" means any of the
Loans.
"Loan Documents" means this Agreement, the Notes, the Guaranties,
applications for letters of credit and all other documents, instruments or
certificates executed and delivered to the Banks in connection with this
Agreement and the Loans.
"Maximum Loans" means the amount of $200,000,000.
"Maximum Rate" means the maximum non-usurious rate of interest that
the Banks are allowed to contract for, charge, take, reserve or receive
under the applicable laws of any applicable state or of the United States
of America (whichever from time to time permits the highest rate for the
use, forbearance or detention of money) after taking into account, to the
extent required by applicable law, any and all relevant payments or charges
under this Agreement, the Notes or under any other document or instrument
executed and delivered in connection herewith and the indebtedness
evidenced by the Notes.
"Notes" means the Line of Credit Notes and any other promissory notes
issued by Borrower to the order of any one or more of the Banks evidencing
the Obligations of Borrower to repay the Loans.
"Obligations" means any and all liabilities, obligations, or
indebtedness owing by Borrower to the Agent and/or the Banks, of any kind
or description, irrespective of whether for the payment of money, whether
direct or indirect, absolute or contingent, due or to become due, now
existing or hereafter arising under any Loan Document.
"Permitted Liens" means (a) Liens for taxes, assessments or
governmental charges or levies which, for Borrower and all Subsidiaries
other than Arava Natural Resources Company and its subsidiaries, are not
yet due or delinquent, or which can thereafter be paid without penalty, or
which are being contested in good faith in accordance with this Agreement
and against which appropriate reserves are being maintained under GAAP, (b)
unfiled inchoate construction Liens for construction work in progress, (c)
workmen's, repairmen's, warehousemen's and carrier's Liens and other
similar Liens, if any, arising in the ordinary course of business, (d)
Liens granted by Subsidiaries in favor of Borrower in connection with
inter-company loans, and (e) each of the liens described in Schedule 1.1(a)
attached to this Agreement.
"Person" or "Persons" means natural persons, corporations, limited
partnerships, general partnerships, joint stock companies, joint ventures,
associations, companies, trusts, lenders, trust companies, land trusts,
vehicle trusts, business trusts or other organizations, irrespective of
whether they are legal entities, and governments and agencies and political
subdivisions thereof.
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"Pricing Schedule" means the following schedule:
Eurodollar
Applicable
Margin and
Capitalization Facility Letter of All-In Utilization
Tier Ratio(1) Fee Credit Fee Drawn Cost Fee
I(3) >30% 22.5 xx(0) 00.0 xx 00.0 xx 00.0 xx
XX >15%, but 17.5 bp 32.5 bp 50.0 bp 10.0 bp
less than or
equal to 30%
III <15% 12.5 bp 25.0 bp 37.5 bp 0.0 bp
(1) Defined as Total Debt/Capitalization.
(2) "bp" means basis points per annum.
(3) All fees will be calculated by the Capitalization Ratio as of the
latest fiscal quarter for which financial statements have been
delivered pursuant to Section 5.3.1, provided, however, that if such
statements are not delivered as required by Section 5.3.1, the Tier I
fees shall apply.
"Prime Rate" means and refers to the rate of interest announced
publicly from time to time by the Agent as its prime commercial lending
rate. Reference to the Prime Rate shall not be affected by the fact that
Agent may make loans at different rates from time to time with respect to
the class of Loans for which the Prime Rate is established. Any change in
any of the interest rates chargeable hereunder resulting from a change in
the Prime Rate shall become effective on the day on which each change in
the Prime Rate is effective.
"Prohibited Transaction" has the meaning set forth in Section 406 or
Section 2003(a) of ERISA.
"Ratable Share" means for each Bank the respective percentage shown on
the signature pages of this Agreement, which as to aggregate Advances under
the Line of Credit made by such Bank will be limited to the respective
maximum U.S. dollar amounts shown on the signature pages of this Agreement.
"Regulation D" means Regulation D of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor
thereto or other regulation or official interpretation of said Board of
Governors relating to reserve requirements applicable to member banks of
the Federal Reserve System.
"Reportable Event" has the meaning set forth in Section 4043 of ERISA.
"Requirement of Law" means, with respect to any Person, the
certificate (or articles) of incorporation and bylaws or other
organizational or governing documents of such Person, and any law, treaty,
rule or regulation or determination of an arbitrator or a court or other
Governmental Authority, in each case applicable to or binding upon such
Person or any of its property or to which such Person or any of its
property is subject.
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"Requisite Banks" means Banks whose Ratable Shares equals or exceeds
51% in the aggregate of the Loans from time to time outstanding, excluding
from both the numerator and denominator, however, the amount of the
outstanding Loans by any Bank then in default for a continuous period
greater than ten (10) Business Days of any obligation for the payment of
money to the Agent in respect of its Ratable Share of an Advance or other
expense or liability for which the Agent has in writing requested
reimbursement or indemnification and which the Banks have agreed to pay by
the respective terms, and within the respective meanings, of this
Agreement; provided, Agent will not agree (and Borrower acknowledges that
written consent is required) to change or waive a maturity date, Advance
Date, payment date for any obligation, interest rate, fees, commitment
amount of any Bank, release any of the Guaranties or modify in writing this
Agreement or any other Loan Documents with respect to the foregoing,
without the prior written consent of Banks (determined without regard to
the foregoing exclusions) whose Ratable Share of the Loans is 100% in the
aggregate. Interim Advances shall not be included in any determination of
Requisite Banks.
"Reserve Requirement" means, with respect to an Interest Period, the
maximum aggregate reserve requirement (including all basic, supplemental,
marginal and other reserves) which is imposed under Regulation D on
Eurocurrency liabilities.
"Restricted Subsidiaries" means those Domestic Subsidiaries that have
executed or are required to execute Guarantees.
"SEC" means the Securities and Exchange Commission or any successor
agency.
"Subsidiaries" means those entities listed on Schedule 1.1(b) to this
Agreement and all entities in which the Borrower hereafter acquires,
directly or indirectly, any equity or ownership interest, except minority
interests in entities, the aggregate value of which interests (on a cost
basis) does not exceed $10,000,000.
"Tangible Net Worth" means the sum of the par or stated value of all
outstanding capital stock, amounts in excess of par or stated value,
surplus and retained earnings less intangibles, all as determined in
accordance with GAAP.
"Taxes" means any taxes, charges, fees, levies or other assessments
based upon or measured by net or gross income, gross receipts, sales, use,
ad valorem, transfer, franchise, withholding, payroll, employment, excise,
premium or property taxes, together with any interest and penalties,
additions to tax and additional amounts imposed by any federal, state,
local or foreign taxing authority upon any Person.
"Total Debt" means all Indebtedness, including capitalized leases, of
the Borrower and its Subsidiaries.
"Total Outstanding Amount" means the aggregate principal amounts at
any time outstanding of the Line of Credit Advances, the outstanding face
amount of Letters of Credit and all outstanding Interim Advances, which
shall not exceed $200,000,000 in aggregate amount at any time.
"Type" means, with respect to any Advance, its nature as a Alternative
Base Rate Advance or a Eurodollar Advance.
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"Unmatured Event of Default" means an event, act, or occurrence which
with the giving of notice or the lapse of time, or both, would become an
Event of Default.
1.2 Accounting Terms. All accounting terms not specifically
defined herein, to the extent not inconsistent with definitions set forth
in Section 1.1 of this Agreement, will be construed in accordance with GAAP
as in effect from time to time, including, without limitation, applicable
statements, bulletins and interpretations issued by the FASB and bulletins,
opinions, interpretations and statements issued by the American Institute
of Certified Public Accountants or its committees. When used herein, the
term "financial statements" will include the notes and schedules thereto.
1.3 Other Definitional Provisions.
(a) Unless otherwise specified therein, all terms defined in this
Agreement will have the defined meanings when used in the Loan Documents or
any certificate or other document made or delivered pursuant hereto.
(b) The words "hereof", "herein" and "hereunder" and words of
similar import when used in this Agreement will refer to this Agreement as
a whole and not to any particular provision of this Agreement. Section,
subsection, Schedule and Exhibit references contained in this Agreement are
references of Sections, subsections, Schedules and Exhibits in or to this
Agreement unless otherwise specified.
2. AMOUNT AND TERMS OF LOANS.
2.1 Amount of Line of Credit. Subject to the terms and conditions
hereof, Banks, severally in accordance with their respective Ratable Share,
agree to advance to Borrower from the Closing Date until the Line of Credit
Maturity, at such times and in such amounts as Borrower may request in
accordance with Section 2.2 hereof, up to the aggregate principal amount of
$200,000,000 (the "Line of Credit Loans"). Subject to the terms and
conditions hereof, the amounts borrowed under the Line of Credit may be
borrowed, repaid and reborrowed.
2.2 Notice and Manner of Borrowing.
2.2.1 Nature of Advances. The Advances may be Alternative Base
Rate Advances or Eurodollar Advances, or a combination thereof, selected by
Borrower in accordance with Sections 2.2.2 and 2.2.3.
2.2.2 Method of Selecting Types and Interest Periods for New
Advances. The Borrower shall select the Type of Advance and, in the case
of each Eurodollar Advance, the Interest Period applicable thereto from
time to time. The Borrower shall give the Agent irrevocable notice (a
"Borrowing Notice") not later than 10:00 a.m. (Detroit time) at least one
Business Day before the Borrowing Date of each Alternative Base Rate
Advance and three Business Days before the Borrowing Date for each
Eurodollar Advance, specifying:
(i) the Borrowing Date, which shall be a Business Day, of such
Advance,
(ii) the aggregate amount of such Advance,
(iii) the Type of Advance selected, and
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(iv) in the case of each Eurodollar Advance, the Interest
Period applicable thereto.
Agent shall deliver to each Bank a copy of the Borrowing Notice timely
received by Agent from Borrower on the day received. Not later than noon
(Detroit time) on each Borrowing Date, each Bank shall make available its
Loan or Loans in funds immediately available in Detroit to the Agent at its
address specified pursuant to Section 9.3. The Agent will make the funds
so received from the Banks available to the Borrower at the Agent's
aforesaid address.
2.2.3 Conversion and Continuation of Outstanding Advances.
Alternative Base Rate Advances shall continue as Alternative Base Rate
Advances unless and until such Alternative Base Rate Advances are converted
into Eurodollar Advances pursuant to this Section 2.2.3. Each Eurodollar
Advance shall continue as a Eurodollar Advance until the end of the then
applicable Interest Period therefor, at which time such Eurodollar Advance
shall either be paid, or it will automatically be converted into an
Alternative Base Rate Advance unless the Borrower shall have given the
Agent a Conversion/Continuation Notice (as defined below) requesting that,
at the end of such Interest Period, such Eurodollar Advance shall continue
as a Eurodollar Advance for the same or another Interest Period. Subject
to the terms of Section 2.6, the Borrower may elect from time to time to
convert all or any part of an Alternative Base Rate Advance into a
Eurodollar Advance. The Borrower shall give the Agent irrevocable notice
(a "Conversion/Continuation Notice") of each conversion of an Alternative
Base Rate Advance into a Eurodollar Advance or continuation of a Eurodollar
Advance not later than 10:00 a.m. (Detroit time) at least three Business
Days prior to the date of the requested conversion or continuation,
specifying:
(i) the requested date, which shall be a Business Day, of such
conversion or continuation,
(ii) the aggregate amount and Type of the Advance which is to
be converted or continued, and
(iii) the amount of such Advance which is to be converted into
or continued as a Eurodollar Advance and the duration of the Interest
Period applicable thereto.
2.2.4 Changes in Interest Rate, etc. Each Alternative Base Rate
Advance shall bear interest on the outstanding principal amount thereof,
for each day from and including the date such Advance is made or is
automatically converted from a Eurodollar Advance into a Alternative Base
Rate Advance pursuant to Section 2.2.3, but excluding the date it is paid
or is converted into a Eurodollar Advance pursuant to Section 2.2.3 hereof,
at a rate per annum equal to the Alternative Base Rate for such day.
Changes in the rate of interest on that portion of any Advance maintained
as a Alternative Base Rate Advance will take effect simultaneously with
each change in the Alternate Base Rate. Each Eurodollar Advance shall bear
interest on the outstanding principal amount thereof from and including the
first day of the Interest Period applicable thereto to (but not including)
the last day of such Interest Period at the interest rate determined by the
Agent as applicable to such Eurodollar Advance based upon the Borrower's
selections under Sections 2.2.2 and 2.2.3 and otherwise in accordance with
the terms hereof. No Interest Period may end after the Line of Credit
Maturity
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2.2.5 Ratable Advances. Each Bank, on the date any Advance is
requested to be made, shall make its Ratable Share of such Advance
available in immediately available funds at the principal office of Agent
for disbursement to Borrower. Unless Agent shall have received notice from
any Bank prior to the date such Advance is requested to be made under this
Section 2.2 that such Bank will not make available to Agent such Bank's
Ratable Share of such Advance, Agent may assume that such Bank has made
such portion available to Agent on the date such Advance is requested to be
made in accordance with this Section 2.2. If and to the extent such Bank
shall not have so made such Ratable Share available to Agent, Agent may
(but shall not be obligated to) make such amount available to Borrower, and
such Bank agrees to pay to Agent forthwith on demand such amount together
with interest thereon, for each day from the date such amount is made
available to Borrower by Agent until the date such amount is repaid to
Agent, at the Federal Funds Rate. If such Bank shall pay such amount to
Agent together with interest, such amount so paid shall constitute a Loan
by such Bank as a part of such Advance for purposes of this Agreement. The
failure of any Bank to make its Ratable Share of any such Advance available
to Agent shall not relieve any other Bank of its obligations to make
available its Ratable Share of such Advance on the date such Advance is
requested to be made, but no Bank shall be responsible for failure of any
other Bank to make such Ratable Share available to Agent on the date of any
such Advance. Subject to the terms and conditions of this Agreement, Agent
shall, on the date any issuance of a letter of credit advance (a "Letter of
Credit Advance") is requested to be made, issue the related Letter of
Credit on behalf of the Banks for the account of the Borrower.
Notwithstanding anything herein to the contrary, Agent may decline to issue
any requested Letter of Credit on the basis that the beneficiary, the
purpose of issue or the terms and conditions of drawing are unacceptable to
it in its reasonable discretion, including without limitation, if Agent
determines that the purpose of such issuance is outside the ordinary course
of business of Borrower.
2.2.6 Disbursement. Upon fulfillment of the conditions set forth
in this Section 2.2, Section 3.5 (and subject to Agent's then current
deadlines for wire transfers and crediting of Agent and Bank accounts), and
Sections 8.2.1 and 8.2.2, Agent will disburse such Advance to Borrower in
immediately available funds at Borrower's expense.
2.2.7 Minimum Advances. Except for Interim Advances, no Advances
shall be for an aggregate amount of less than $5,000,000.
2.3 Authorization and Issuance of Line of Credit Notes. All
Advances made by the Banks pursuant to the Line of Credit will be evidenced
by separate promissory notes of Borrower, in the form of Exhibit 2.3 to
this Agreement (each a "Line of Credit Note" and collectively the "Line of
Credit Notes"), to be executed and delivered by Borrower to each of the
Banks, in the principal amount of each such Bank's Line of Credit
commitment as set forth on the signature page(s) to this Agreement, on the
Closing Date.
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2.4 Facility and Utilization Fees. On the last day of each
March, June, September and December, commencing December 31, 2000, for the
pro rata benefit of the Banks Borrower shall pay (i) a Facility Fee equal
to the per annum percentage identified as the Facility Fee in the Pricing
Schedule to be determined by multiplying the amount of the Maximum Loans
under the Line of Credit by the appropriate Facility Fee, and (ii) if the
Average Line of Credit Loans are more than fifty (50%) percent of the
maximum aggregate loans under the Line of Credit, a Utilization Fee equal
to the per annum percentage identified as the Utilization Fee as set forth
in the Pricing Schedule multiplied by the Average Line of Credit Loans. The
Facility and Utilization Fees shall be calculated and paid quarterly.
2.5 Use of Proceeds. The proceeds of the Line of Credit Loans
will be used by Borrower (i) for working capital, (ii) to finance
acquisitions, (iii) to reimburse any Bank for any payment under letters of
credit and (iv) for general corporate purposes.
2.6 Interest Payment Dates; Interest Basis. Interest accrued on
each Alternative Base Rate Advance shall be payable on each Payment Date,
commencing with the first such date to occur after the date hereof.
Interest accrued on each Eurodollar Advance shall be payable on the last
day of its applicable Interest Period, on any date on which the Eurodollar
Advance is prepaid, whether by acceleration or otherwise, and at maturity.
Interest accrued on each Eurodollar Advance having an Interest Period
longer than three months shall also be payable on the last day of each
three-month interval during such Interest Period. Interest shall be
calculated for actual days elapsed on the basis of a 360-day year.
Interest shall be payable for the day an Advance is made but not for the
day of any payment on the amount paid if payment is received prior to noon
(local time) at the place of payment. If any payment of principal of or
interest on an Advance shall become due on a day which is not a Business
Day, such payment shall be made on the next succeeding Business Day and, in
the case of a principal payment, such extension of time shall be included
in computing interest in connection with such payment.
2.7 Prepayments. Borrower may prepay, in whole or in part, but in
an amount not less than Ten Million Dollars ($10,000,000) at any time upon
one (1) business day's notice, without premium or penalty, any Alternative
Base Rate Advances. Eurodollar Advances may only be prepaid at the end of
an Interest Period as provided above in Section 2.2.3. Any other
provisions of this Agreement to the contrary notwithstanding, if at any
time during the term of this Agreement, the Total Outstanding Amount will
exceed $200,000,000, Borrower will immediately, and in any event within two
(2) Business Days, remit and pay to Agent such amounts as may be necessary
to reduce the Total Outstanding Amount to $200,000,000. Borrower may
terminate the Line of Credit at any time upon delivery of written notice to
Agent sixty (60) days prior to such termination.
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2.8 Loan Account. Advances under the Line of Credit Loans will be
charged to an account in Borrower's name on Agent's books, and Agent will
debit to such account the amount of each Advance when made and credit to
such account the amount of each repayment thereunder. Agent will render
Borrower, from time to time, a statement setting forth the debit balance in
the loan account, which will be deemed conclusive absent manifest error.
Such statement will be prima facie evidence of the correctness of the
Advances owing to the Banks by Borrower hereunder, unless there is manifest
error evident on its face. Similarly, each Bank is hereby authorized by
Borrower to record in its books and records, the date, and amount and type
of each Advance and the duration of the related Interest Period (if
applicable), the amount of each payment or prepayment of principal thereon,
which books and records shall constitute prima facie evidence of the
information so recorded, provided, however, that failure of any Bank to
record, or any error in recording, any such information shall not relieve
Borrower of its obligation to repay the outstanding principal amounts of
the Loans, all accrued interest thereon and other amounts payable with
respect thereto in accordance with the terms of the Notes and this
Agreement.
2.9 Interim Advances. The Agent may, in its sole discretion and
without having any obligation to do so, make interim advances (hereinafter
sometimes referred to as "Interim Advances") of its own funds to the
Borrower in an aggregate amount not to exceed $5,000,000 at any one time
outstanding; provided, however, that no Interim Advances shall be made
after the Agent has received written requests not to make Interim Advances
from the Requisite Banks or unless all conditions precedent for an Advance
have been met. The aggregate amount of all Interim Advances outstanding on
the date any regular Advance is made shall be included as a previously
disbursed portion of such regular Advance in which each Bank shall
participate based upon its Ratable Share and the Agent shall thereupon be
immediately reimbursed for the full amount of such Interim Advances from
the proceeds of such regular Advance. If no regular Advance is made for
any period of 60 days, whether by reason of the failure to comply with any
condition for a regular Advance or otherwise, each Bank shall, upon request
of the Agent, on the Business Day after receiving such request, remit to
the Agent such Bank's Ratable Share of all outstanding Interim Advances,
whereupon, such Interim Advances shall be automatically converted to a
regular Alternative Base Rate Advance effective on such next Business Day.
In no event will any Interim Advance be made if, after giving effect to
such Interim Advance, the aggregate principal amount of all Advances would
exceed $200,000,000.
3. GENERAL PROVISIONS.
3.1 Overdue Rate.
3.1.1 Overdue Rate. Upon the occurrence and during the
continuance of an Event of Default, all outstanding Advances will bear
interest thereafter, at the option of Agent and/or at the request of the
Requisite Banks, and without affecting any of the Bank's rights and
remedies provided for herein and in the Notes, at two percent (2%) per
annum in excess of the Effective Rate.
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3.1.2 Late Charge. If any required payment under any Note is not
paid within ten (10) days from the date it is due, at the option of Agent
and/or at the request of the Requisite Banks, a late charge of five cents
($.05) for each dollar of the payment so overdue may be charged.
3.2 Computation of Interest and Fees; Maximum Interest Rate.
3.2.1 Calculation Of Interest. All computations of interest on
the Loans and interest due thereunder for any period will be calculated on
the basis of the actual number of days elapsed over a year of three hundred
sixty (360) days. Interest will accrue from the date of any Advance up to
but excluding the date of repayment of the Loan, in accordance with the
provisions hereof.
3.2.2 Maximum Rate. Notwithstanding anything to the contrary
contained in this Agreement, Borrower will not be obligated to pay, and the
Banks will not be entitled to charge, collect or receive, interest in
excess of the Maximum Rate and in the event the Banks ever receive, collect
or apply, as interest, any such excess, such amount which would be
excessive interest will be deemed a partial prepayment of principal and
treated hereunder as such; and, if the principal hereof is paid in full,
any remaining excess will immediately be returned to Borrower. If any
construction of this Agreement, the Notes or the other Loan Documents
indicates a different right given to the Banks to ask for, demand or
receive any larger sum as interest, such as a mistake in calculation or
wording, this clause will override and control, it being the intention of
Borrower and the Banks that this Agreement, the Notes and the other Loan
Documents will in all respects comply with applicable law, and proper
adjustment will automatically be made accordingly. In determining whether
or not the interest paid or payable, under any specific contingency,
exceeds the Maximum Rate, Borrower and the Banks will, to the maximum
extent permitted by law (i) characterize any non-principal payment as an
expense, fee or premium rather than as interest; (ii) exclude voluntary
prepayments and the effects thereof; and (iii) amortize, prorate, allocate
and spread the total amount of interest through the entire contemplated
term of such indebtedness until payment in full of the principal (including
the period of any extension or renewal thereof) so that the interest on
account of such indebtedness will not exceed the Maximum Rate.
3.3 Conditions Precedent to the Execution and Delivery of this
Agreement. The obligation of the Banks to execute and deliver this
Agreement is subject to the fulfillment, in form and substance satisfactory
to Agent and its counsel, of each of the following conditions, unless
otherwise noted:
3.3.1 Line Of Credit Note, Guaranties, etc. Agent will have
received each of the following documents, duly executed and delivered by
Borrower, each of which will be in full force and effect:
(a) The Line of Credit Notes, in the form of Exhibit 2.3.
(b) The Guaranties, in the form of Exhibit 3.3.1(b) to this
Agreement.
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(c) Such other documents and certificates as may be necessary
or desirable to evidence the Obligations, representations, warranties and
covenants of Borrower hereunder and the Guarantors under the Guaranties.
3.3.2 Good Standing Certificates. Agent will have received a
good standing certificate of Borrower and each of the Guarantors listed on
Exhibit 3.3.2 hereto from each state in which Borrower and each such
Guarantor is organized and each other state, if different, in which the
principal part of its business activity is conducted, dated a recent date,
indicating that Borrower and each such Guarantor is in good standing in
each such state; provided, if such good standing certificates for any
Guarantor is not available at closing, Borrower shall certify that such
Guarantor is in good standing.
3.3.3 Resolutions. Agent will have received a copy of the
resolutions of the Board of Directors of Borrower and each Restricted
Subsidiary (i) authorizing the execution, delivery and performance of the
Loan Documents, (ii) authorizing the borrowing contemplated hereunder, and
(iii) certified by the Secretary of Borrower or the Restricted Subsidiary,
respectively, as of the Closing Date, which certificate will state that the
resolutions thereby certified have not been amended, modified, revoked or
rescinded as of the date of such certificate.
3.3.4 Charter. Agent will have received certified copies of the
charter of Borrower and each Restricted Subsidiary, certified by an officer
of Borrower and each Restricted Subsidiary, respectively, on the Closing
Date, as true, complete and correct copies thereof.
3.3.5 Incumbency Certificates. Agent will have received a
certificate of the Secretary of Borrower and each Restricted Subsidiary as
to the incumbency and signatures of the person or persons authorized to
execute and deliver the Loan Documents.
3.3.6 Certificate Regarding Representations and Warranties.
Agent will have received a certificate of the Chief Financial Officer, the
Vice President-Legal or Chief Executive Officer of Borrower stating, on
behalf of Borrower, that each of the representations and warranties made in
or pursuant to Section 4 of this Agreement or which are contained in any
other Loan Document or any certificate, document or financial or other
statement furnished by Borrower at any time under or in connection
herewith, is true and correct in all respects on and as of the Closing
Date.
3.3.7 Reimbursement. Agent will have received reimbursement for
legal fees and expenses incurred by Agent in the preparation of the
transactions contemplated by this Agreement.
3.3.8 No Litigation or Investigation. No suit, action,
investigation, inquiry or other proceeding, including, without limitation,
the enactment or promulgation of a statute or rule by or before any
arbitrator or any Governmental Authority will be pending and no preliminary
or permanent injunction or order by a state or federal court will have been
entered (i) in connection with any Loan Document or any of the transactions
contemplated hereby or thereby or (ii) which, in any such case, in the
reasonable judgment of the Banks, would have a material adverse effect on
(A) the transactions contemplated by this Agreement or (B) the business,
operations, properties, condition (financial or otherwise) or prospects of
Borrower.
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3.3.9 Insurance. Agent will have received a schedule, entitled
Schedule 3.3.9, setting forth the policies of insurance, including the
effective dates of such policies, carried by Borrower and its Subsidiaries
on the Closing Date.
3.3.10 No Event of Default. No Event of Default and no Unmatured
Event of Default will have occurred and be continuing on the date of the
Loans, nor will either result from the making of such Loans.
3.3.11 Opinion of Counsel. Agent and each of the Banks will have
received the written opinion, dated the Closing Date, of Borrower's and
Restricted Subsidiaries' Counsel in form and substance satisfactory to
Agent and the Requisite Banks, in substantially the same form as that
attached hereto as Exhibit 3.3.11.
3.3.12 Repayment of Existing Obligations. The entire amount
owing under the Amended and Restated Credit Agreement dated December 30,
1998, among the Borrower, the Banks named therein and the Agent is fully
paid and all obligations to loan money thereunder are terminated.
3.3.13 Other Matters. All other documents and legal matters in
connection with the transactions contemplated by this Agreement will have
been delivered and/or executed and will be in form and substance
satisfactory to Agent and its counsel.
3.4 Conditions Precedent to all Advances under the Line of Credit
Loans. The obligation of the Banks and each of them to make Advances,
including any Letter of Credit Advance, is subject to the fulfillment, in
form and substance satisfactory to Agent and its counsel, of each of the
following conditions on or before the date of each such Advance:
3.4.1 No Event Of Default. As of the date of making the Advance,
no Event of Default and no Unmatured Event of Default will have occurred or
be continuing, nor will either result from or exist after the making of
such Advance.
3.4.2 Agreement in Full Force and Effect. This Agreement and
each of the other Loan Documents will be in full force and effect.
3.4.3 Representations and Warranties True and Correct. Each of
the representations and warranties made in or pursuant to Section 4 of this
Agreement or which are contained in any other Loan Document or any
certificate, document or financial or other statement furnished by Borrower
and/or any Subsidiary at any time under or in connection with any of the
transactions contemplated by the Loan Documents, will be true and correct
in all material respects on and as of the date of the Advance as if made on
and as of the date of the Advance (unless stated to relate to a specific
earlier date, in which case such representations and warranties will be
true and correct in all material respects as of such earlier date).
3.4.4 Financial Statements. Agent will have received the
consolidated quarterly financial statements of Borrower as delivered to
Agent in accordance with Sections 5.3.1 and 5.3.2 below.
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3.4.5 No Change. There has been no change that has a materially
adverse effect on the business, operations, properties, condition
(financial or otherwise) or prospects of Borrower and its Subsidiaries,
taken as a whole, since the date of the last financial statements of
Borrower delivered to Agent.
3.4.6 Compensation for Increased Costs.
(a) In the event after the date of execution of this
Agreement, any introduction of any law, or any change in any law, or the
interpretation or application thereof by any court or Governmental
Authority charged with the administration thereof, or the compliance with
any guideline or request from any Governmental Authority (whether or not
having the force of law), which has the effect of:
(i) subjecting any Bank to any tax, deduction or withholding
with respect to this Agreement or any other Loan Document (other than any
tax based upon the overall net income of any such Bank), or
(ii) imposing, modifying or deeming applicable any reserve,
special deposit, insurance premium or similar requirement against assets
held by, or deposits in or for the account of, or loans by, any Bank, with
respect to this Agreement or the other Loan Documents, or
(iii) imposing upon any Bank any other condition or expense
with respect to this Agreement or any other Loan Document and the result of
any of the foregoing is to increase the cost to any such Bank, reduce the
income receivable by any such Bank, impose any expense upon any such Bank
or reduce the amount of any payment receivable by any such Bank with
respect to any Note, or with respect to any Bank's commitment hereunder or
under any Letter of Credit Advance, or any portion thereof, by an amount
which any such Bank deems to be material, such Bank shall from time to time
notify the Agent and Borrower thereof by delivery of a certificate of an
officer of such Bank of the nature described in the next sentence, and the
Borrower shall pay to the Agent for delivery to such Bank that amount which
shall compensate such Bank (on an after tax basis) for such increase in
cost, reduction in income, additional expense, reduced amount or reduced
rate of return. A certificate setting forth in reasonable detail such
increase in cost, reduction in income or additional expense or reduced
amount or reduced rate of return, and the manner of calculating the same as
determined by such Bank, shall be submitted by such Bank to the Agent and
Borrower and, absent manifest error, shall be conclusive as to the amount
thereof (provided that such determination be made reasonably and in good
faith).
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(b) If any Bank shall have determined that the introduction of
or any change in any applicable law regarding capital adequacy, or any
change in the interpretation or administration thereof by any Governmental
Authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by any Bank (or any
of its branches) with any request or directive regarding capital adequacy
(whether or not having the force of law) or any such authority, central
bank or comparable agency, has or would have the effect of reducing the
rate of return on such Bank's capital as a consequence of its obligations
hereunder, its commitment hereunder, or the transactions contemplated
hereby to a level below that which such Bank could have achieved but for
such adoption, change or compliance (taking into consideration such Bank's
policies with respect to liquidity and capital adequacy) by an amount
deemed by such Bank to be material, then the Borrower shall pay to the
Agent for delivery to such Bank promptly, such additional amount or amounts
determined by such Bank as will compensate such Bank for such reduced rate
of return.
(c) Borrower acknowledges that compensation to the Bank for
any increased costs incurred by the Bank and payable by Borrower pursuant
to this subsection may take the form of an effective increase in the
interest rate payable under the Loans.
(d) Borrower shall have access to any and all documentation
relied upon by the Bank in determining the events set forth in subsection
(b) of this Section 3.4.6, any calculations of a reduced rate of return,
and the interest rate calculation pursuant to Section 3.4.6(c).
3.4.7 Letters of Credit. Any letter of credit issued pursuant to the
Line of Credit shall have a term not exceeding one year, not including
renewals and shall not in any event expire later than the Line of Credit
Maturity. In no event shall the aggregate face amount of all outstanding
Letter of Credit Advances exceed $15,000,000.00. Borrower will pay to
Agent for the pro rata benefit of the Banks a per annum fee equal to the
Applicable Margin multiplied by the face amount of any newly issued or
renewed letter of credit at the time of issuance or renewal of such letter
of credit. Such fee is non-refundable and Borrower shall not be entitled
to any rebate of any portion thereof if such letter of credit does not
remain outstanding through its stated expiry date or for any other reason.
Nothing in this Agreement shall be construed to require or authorize any
Bank to issue any letter of credit, it being recognized that Agent has the
sole obligation under this Agreement (subject to the terms and conditions
of this Agreement) to issue letters of credit on behalf of the Banks. Upon
such issuance by Agent, each Bank shall automatically acquire a pro rata
risk participation interest in such Letter of Credit Advance based on its
Ratable Share. If Agent shall honor a draft or other demand for payment
presented or made under any letter of credit, Agent shall provide notice
thereof to each Bank prior to 2:00 p.m. Eastern Time on the second Business
Day immediately preceding the date such draft or demand is to be honored.
Unless Borrower shall have satisfied its reimbursement obligation by
payment to Agent on the date that such draft or demand is to be honored,
each Bank, on the date the draw under the letter of credit is to be
honored, shall make its Ratable Share of the amount paid by Agent available
in immediately available funds at the principal office of Agent for the
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account of Agent. If and to the extent such Bank shall not have made such
Ratable Share portion available to Agent, such Bank agrees to pay to Agent
forthwith on demand such amount together with interest thereon, for each
day from the date such amount was paid by Agent until such amount is so
made available to Agent at a per annum rate equal to the Federal Funds
Rate. If such Bank shall pay such amount to Agent together with such
interest, such amount so paid shall constitute an Advance by such Bank
disbursed in respect of the reimbursement obligation of Borrower. The
failure of any Bank to make its pro rata portion of any such amount paid by
Agent available to Agent shall not relieve any other Bank of its obligation
to make available its pro rata portion of such amount, but no Bank shall be
responsible for failure of any other Bank to make such pro rata portion
available to Agent.
3.5 Termination of Commitments and Payment on Line of Credit
Maturity. Notwithstanding anything to the contrary contained herein, no
bank shall be obligated to make any Line of Credit Advance beyond the date
of the Line of Credit Maturity, and all amounts due and owing the Banks
shall be due and payable on the date of the Line of Credit Maturity.
4. REPRESENTATIONS AND WARRANTIES. In order to induce each Bank to
enter into this Agreement and to provide the Loans, Borrower represents and
warrants to each Bank that the following statements are true, correct and
complete at the date hereof and at the date of each Advance and the
issuance of each Letter of Credit:
4.1 Organization, Powers, Good Standing
4.1.1 Organization and Good Standing. (a) Borrower and each
Subsidiary is a legal entity duly organized, validly existing and in good
standing under the laws of the respective jurisdiction of its organization,
(b) Borrower and each Subsidiary has full power, authority and legal right
to own and operate its property and to conduct the business in which it is
currently engaged, (c) Borrower and each Subsidiary is duly qualified and
is in good standing under the laws of each jurisdiction in which the
failure to so qualify may have a material adverse affect on its business,
its Subsidiaries, taken as a whole, or the ability of the Borrower to repay
the Loan or to observe and perform its obligations under the Loan
Documents, and (d) Borrower and each Subsidiary is in compliance in all
material respects with all Requirements of Law, except where the lack of
compliance could not reasonably be expected to materially adversely impact
the business, operations, properties or condition (financial or otherwise)
of the Borrower and its Subsidiaries, taken as a whole, or the ability of
the Borrower to repay the Loan or to observe and perform its obligations
under the Loan Documents.
4.1.2 Power and Authority. Borrower has full power and authority
to execute, deliver and perform the Loan Documents, including, without
limitation, to borrow under this Agreement. Each Guarantor has full power
and authority to execute, deliver and perform the Guaranties. Borrower and
each Guarantor has taken all necessary action to authorize the execution,
delivery and performance of the Loan Documents and Borrower has taken all
necessary action to borrow under this Agreement. No consent or
authorization of, or filing with, any Person (including, without
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limitation, any Governmental Authority) is required in connection with the
execution, delivery and performance by Borrower or any Guarantor or the
validity or enforceability against Borrower or any Guarantor of the Loan
Documents.
4.2 Authorization of Borrowing; Etc.
4.2.1 No Violation. The execution, delivery and performance by
Borrower of this Agreement and the other Loan Documents and the execution,
delivery and performance by any Guarantor of the Guaranties do not and will
not (a) violate any Requirement of Law applicable to Borrower or any
Subsidiary, (b) conflict with, result in a breach of or constitute (with
due notice or lapse of time or both) a default under any contractual
obligation of Borrower or any Subsidiary, (c) result in or require the
creation or imposition of any Lien of any nature whatsoever upon any of
Borrower's or any Subsidiary's properties or assets, other than in favor of
the Banks, or (d) require any approval of any court or Governmental
Authority or any approval or consent of any Person under any contractual
obligation of Borrower.
4.2.2 Legally Valid and Binding. The Loan Documents and all
other documents contemplated hereby and thereby, when executed and
delivered, will be the legally valid and binding obligations of Borrower
and of the Guarantors, as the case may be, enforceable against it and them
in accordance with their respective terms, except as enforcement may be
limited by equitable principals or by bankruptcy, insolvency,
reorganization, moratorium or similar laws, or equitable principles
relating to or limiting creditors' rights generally.
4.3 Subsidiaries. Schedule 1.1(b) correctly sets forth as to each
Subsidiary, its name, the jurisdiction of its organization, the name of its
immediate parent and the percentage of its capital stock or other ownership
interest that is directly or indirectly owned by Borrower. Other than (1)
as set forth in its annual reports as filed with the SEC, which have been
disclosed in writing to the Banks, (2) stock acquisitions made since its
most recent annual report filed with the SEC, (3) the Subsidiaries, and (4)
the existing minority stock interests owned by Xxxxxxx Copper Tube
Products, Inc. (formerly known as Xxxxxxxx Industries, Inc.), Borrower does
not own more than $10,000,000 (on a cost basis) in the aggregate of capital
stock or other ownership interest in any Persons.
4.4 Title. Borrower and Subsidiaries, as applicable, have good
and valid legal title to the assets reflected in Borrower's consolidated
financial statements dated as of September 23, 2000 previously submitted to
each of the Banks. There are no Liens, charges or encumbrances (other than
Permitted Liens), on such property or assets referenced in the prior
sentence except those reflected on such financial statements.
4.5 Litigation; Adverse Facts. Except as set forth on Schedule
4.5 to this Agreement, there is no action, suit, dispute, investigation,
inquiry, arbitration, tax claim or other proceeding (including, without
limitation, the enactment or promulgation of a statute or rule) at law or
in equity or before or by any arbitrator or Governmental Authority pending
or, to the knowledge of Borrower, threatened, against Borrower or any
Subsidiary which might reasonably be expected to result in any material
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adverse change in the business, operations, properties or in the business
prospects or condition (financial or otherwise), of Borrower and its
Subsidiaries, taken as a whole, or would materially adversely affect
Borrower's ability to perform its Obligations hereunder and under any other
Loan Document.
4.6 Payment of Taxes. All material tax returns and reports
required to be filed by Borrower and each Subsidiary have been prepared in
accordance with acceptable standards and have been timely filed, and all
Taxes, assessments, fees and amounts required to be withheld and paid to a
Governmental Authority, and other governmental charges upon Borrower and
each Subsidiary and upon their properties, assets, income and franchises
which are shown on such returns to be due and payable have been paid when
due and payable. Borrower does not know of any proposed, asserted or
assessed tax deficiency against it or any Subsidiary which might reasonably
be expected to result in any material adverse change in the condition
(financial or otherwise) of Borrower or any Subsidiary (other than Mining
Remedial Recovery Corporation and its subsidiaries). Except for the tax
sharing agreements described in Schedule 4.6 to this Agreement, neither
Borrower nor any Subsidiary is a party to, bound by or obligated under any
tax sharing or similar agreement.
4.7 Materially Adverse Agreements; Performance.
4.7.1 No Material Adverse Agreements. Neither Borrower nor any
Subsidiary is a party to or subject to any material agreement, instrument,
charter or other internal restriction materially adversely affecting the
business, properties or assets of Borrower or any Guarantor or the
operations, business prospects or condition (financial or otherwise) of
Borrower and Guarantors, taken as a whole.
4.7.2 No Default. Neither Borrower nor any Subsidiary is in
material default in the performance, observance or fulfillment of any of
the material obligations, covenants or conditions contained in any of its
contractual obligations and no condition exists which, with the giving of
notice or the lapse of time or both, would constitute such a default,
which, taken as a whole, could reasonably be expected to adversely affect
the business, operations, property or assets, the business prospects, or
condition (financial or otherwise), of its Subsidiaries taken as a whole,
or the ability of Borrower to repay the Loan or to observe and perform its
obligations under the Loan Documents
4.7.3 Ownership of Intellectual Property. Borrower and each
Domestic Subsidiary owns or possesses all patents, trademarks, service
marks, trade names, copyrights, licenses and rights necessary for the
present and planned future conduct of its business, without any known
conflict with the rights of others.
4.8 Disclosure. No representation or warranty of Borrower
contained in this Agreement or in any other Loan Document or other
document, certificate or written statement furnished to the Banks by or on
behalf of Borrower with respect to the business prospects or condition
(financial or otherwise) of Borrower and each Subsidiary for use in
connection with the transactions contemplated by this Agreement, contains
any untrue statement of a material fact or omits to state a material fact
necessary in order to make the statements contained herein or therein not
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misleading. For purposes of the previous sentence the phrase "material
fact," is a fact or facts which, taken as a whole, could reasonably be
expected to adversely affect the business, operations, property or assets,
the business prospects, or condition (financial or otherwise), of its
Subsidiaries taken as a whole, or the ability of Borrower to repay the Loan
or to observe and perform its obligations under the Loan Documents. There
is no material fact known to Borrower which adversely affects the business,
operations, property or assets, the business prospects, or condition
(financial or otherwise), of Borrower and its Subsidiaries, taken as a
whole, which has not been disclosed herein or in such other documents,
certificates and statements furnished to the Banks for use in connection
with the transactions contemplated hereby.
4.9 ERISA Compliance. Borrower and Subsidiaries are in compliance
in all material respects with any applicable provisions of ERISA. Except
as set forth on Schedule 4.9 to this Agreement,
(i) neither a Reportable Event nor a Prohibited Transaction has
occurred or is continuing in relation to any pension plan, which, taken
as a whole, could reasonably be expected to adversely affect the business,
operations, property or assets, the business prospects, or condition
(financial or otherwise), of its Subsidiaries taken as a whole, or the
ability of Borrower to repay the Loan or to observe and perform its
obligations under the Loan Documents, and
(ii) Borrower and each Subsidiary have not incurred any liability
to the Pension Benefit Guaranty Corporation, except where the occurrence of
such event could not reasonably be expected to adversely affect the
business, operations, property or assets, the business prospects, or
condition (financial or otherwise), of its Subsidiaries taken as a whole,
or the ability of Borrower to repay the Loan or to observe and perform its
obligations under the Loan Documents.
4.10 Environmental Matters. Except as set forth in Schedule 4.10
to this Agreement, Borrower and each Subsidiary has complied in all
respects with all Environmental Protection Statutes, except where the lack
of compliance could not reasonably be expected to materially adversely
impact the business, operations, properties or condition (financial or
otherwise) of Borrower and its Subsidiaries, taken as a whole, or the
ability of Borrower to repay the Loan or to observe and perform its
obligations under the Loan Documents. Except as set forth on Schedule 4.10
to this Agreement, neither Borrower nor any Subsidiary, nor, to the best of
Borrower's knowledge, any other person, used any real property owned or
leased by Borrower or any Subsidiary in the disposal of or to refine,
generate, produce, store, treat, transfer, release or transport any
hazardous waste or hazardous substance, or been designated by the United
States Environmental Protection Agency or under any Environmental
Protection Statute as a hazardous waste or hazardous substance disposal or
removal site, superfund or clean-up site or candidate for removal or
closure pursuant to any Environmental Protection Statute, which, taken as a
whole, could reasonably be expected to adversely affect the business,
operations, property or assets, the business prospects, or condition
(financial or otherwise), of its Subsidiaries taken as a whole, or the
ability of Borrower to repay the Loan or to observe and perform its
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obligations under the Loan Documents. No lien arising under or in
connection with any environmental protection statute has attached to any
revenues or to any real or personal property owned by Borrower or any
Subsidiary. Borrower agrees to indemnify and hold each Bank harmless from
any and all violations by Borrower or any Subsidiary of any Environmental
Protection Statute.
4.11 Investment Company. Borrower is not directly or indirectly
controlled by, or acting on behalf of, a Person which is an "Investment
Company" within the meaning of the Investment Company Act of 1940, as
amended, that is organized or otherwise created under the laws of the
United States, any State of the United States, the District of Columbia,
Puerto Rico, the Philippine Islands, the Virgin Islands or any other
possession of the United States.
4.12 Regulations U and X. No part of the proceeds of the Loan
will be used to purchase or carry any margin stock (within the meaning of
Regulation U of the Board of Governors of the Federal Reserve System) or to
extend credit to others for the purpose of purchasing or carrying any
margin stock. Neither Borrower nor any Subsidiary is engaged principally,
or as one of its important activities, in the business of extending credit
for the purposes of purchasing or carrying any such margin stock. If
requested by Agent, Borrower will furnish Agent with a statement in
conformity with the requirements of Federal Reserve Form U-1 referred to in
said Regulation. Borrower also warrants that no part of the proceeds of
the borrowings hereunder will be used by it for any purpose which violates,
or which is inconsistent with, the provisions of Regulation X of said Board
of Governors.
4.13 Indebtedness. Neither Borrower nor any Subsidiary has any
outstanding Indebtedness except Indebtedness described in (1) Schedule 4.13
to this Agreement or (2) permitted under Section 6.1 of this Agreement.
4.14. Solvency. Immediately after the consummation of the
transactions to occur on the date hereof and immediately following the
making of each Advance, including Line of Credit Loans and the issuance of
any Letter of Credit, if any, made on the date hereof and after giving
effect to the application of the proceeds of such Advances, (a) the fair
value of the assets of the Borrower and its Fundamental Subsidiaries on a
consolidated basis will exceed the debts and liabilities, subordinated,
contingent or otherwise, of the Borrower and its Fundamental Subsidiaries
on a consolidated basis; (b) the Borrower and its Fundamental Subsidiaries
on a consolidated basis will be able to pay their debts and liabilities,
subordinated, contingent or otherwise, as such debts and liabilities become
absolute and matured; and (c) the Borrower and its Fundamental Subsidiaries
on a consolidated basis will not have unreasonably small capital with which
to conduct the businesses in which they are engaged as such businesses are
not conducted and are proposed to be conducted after the date hereof.
4.15 Survival. All of the representations and warranties set
forth in this Section 4 will survive until all of the Obligations are
satisfied in full and there remain no outstanding commitments hereunder.
5. AFFIRMATIVE COVENANTS. Borrower covenants and agrees that, until
all of the Obligations are satisfied and the commitments hereunder have
been terminated, Borrower will perform each and all of the following:
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5.1 Use of Proceeds. Borrower will use the proceeds of the Loan
only for the purposes set forth in Section 2.5.
5.2 Accounting Records. Borrower will maintain adequate records
in accordance with sound business practices and GAAP, applied on a
Consistent Basis, except for changes required by GAAP or consented to in
writing by the Requisite Banks (which consent will not be unreasonably
withheld). Upon five (5) days' prior notice, Borrower will provide, and
cause each Subsidiary to provide, access to representatives of each Bank to
visit any of the properties of Borrower or any Subsidiary and examine the
books of account and discuss Borrower's and each Subsidiary's affairs,
finances and accounts with, and be advised of the same by, Borrower's and
each Subsidiary's officers and outside auditors, all at such reasonable
times and as often as any Bank may reasonably request.
5.3 Reports. Borrower will deliver to the Banks and the Agent:
5.3.1 Quarterly Reports. As soon as available and in any event
within forty five (45) days after the end of each of the first three
quarters of each fiscal year of Borrower, management prepared consolidated
financial statements of Borrower and Subsidiaries as of the end of such
quarter, and the consolidated statements of profit and loss and surplus of
Borrower and Subsidiaries from the beginning of Borrower's and
Subsidiaries' fiscal year to the end of such quarter, certified as correct
(subject to year end adjustments) by the chief financial officer of
Borrower.
5.3.2 Annual Reports. As soon as available, and in any event
within ninety (90) days after the end of each fiscal year of Borrower, the
complete audited, consolidated financial statements of Borrower and
Subsidiaries, including the consolidated balance sheet of Borrower and
Subsidiaries as of the end of such year and the consolidated statements of
profit and loss and surplus of Borrower and Subsidiaries for the fiscal
year then ended, certified by Ernst & Young (without a going concern or
similar financially adverse qualification), or such other independent
certified public accountants of recognized standing, to be prepared in
accordance with GAAP and to present fairly the financial position and
results of operation of Borrower and Subsidiaries. Additionally, the
Borrower will provide internally prepared consolidating financial
statements within 90 days after the end of each fiscal year.
5.3.3 Accounts Receivable and Payable Aging. Upon the request of
Agent or Requisite Banks, accounts receivable aging reports, accounts
payable aging reports and inventory certifications.
5.3.4 Compliance Certificate. Within forty five (45) days after
the end of each calendar quarter, a compliance certificate in the form of
Exhibit 5.3.4 to this Agreement, duly completed and executed by the Chief
Financial Officer of Borrower.
5.3.5 Copies of Reports Sent to the Banks. Unless otherwise
specified, copies of all of the reports furnished under this Section 5.3
shall be sent by Borrower directly to the Banks.
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5.3.6 Report of Certain Events. Promptly upon Borrower becoming
aware of the occurrence of any: (a) Unmatured Event of Default or Event of
Default; (b) Reportable Event; or (c) Prohibited Transaction in connection
with any pension plan or any trust created thereunder, a written notice
specifying the nature thereof, what action Borrower is taking or proposes
to take with respect thereto, and, when known, any action taken by the
Internal Revenue Service with respect thereto, will be delivered to Agent
by Borrower.
5.3.7 Threat of Bankruptcy. Promptly upon becoming aware of any
Person's seeking to obtain or threatening in writing to seek to obtain a
decree or order for relief with respect to Borrower or any Restricted
Subsidiary in an involuntary case under any applicable bankruptcy,
insolvency, or other similar law now or hereafter in effect, a written
notice thereof specifying what action Borrower or such Domestic Subsidiary
is taking or proposes to take with respect thereto.
5.3.8 Amendments to Charter or Bylaws. Promptly, copies of all
amendments to the charter or bylaws of Borrower and, if requested by the
Agent, any Guarantor.
5.3.9 Copy of Process. Promptly, and in any event within five
(5) days after the receipt thereof by Borrower or any Subsidiary, a copy of
any notice, summons, citation, directive, letter or other form of
communication from any Governmental Agency or instrumentality, in any way
concerning any action or omission on the part of Borrower or any Subsidiary
in connection with any Environmental Protection Statute, or concerning the
filing of a lien upon, against or in connection with Borrower or any
Subsidiary, or any of their real or personal property, in connection with
any Environmental Protection Statute, except where such action or omission
by Borrower or any Subsidiary could not reasonably be expected to
materially adversely impact the business, operations, properties or
condition (financial or otherwise) of the Borrower and its Subsidiaries,
taken as a whole, or the ability of the Borrower to repay the Loan or to
observe and perform its obligations under the Loan Documents.
5.3.10 Copy of SEC Filings. Promptly after the sending or filing
thereof, copies of all reports, proxy statements and financial statements
which Borrower files with its shareholders or any securities exchange or
the SEC, including, without limitation, all reports on Form 10-K, 10-Q, and
8-K. Such reports need not include exhibits. Borrower agrees to promptly
provide Agent with exhibits specifically requested by Agent or any Bank.
5.3.11 Copy of Process From Governmental Authority. Promptly,
and in any event within five (5) days of the receipt thereof by Borrower, a
copy of a notice, summons, citation, directive, letter, complaint, or other
form of communication from the U.S. Department of Labor, or any other
Governmental Authority or instrumentality, or any other Person, in any way
concerning any action or omission on the part of Borrower or any Subsidiary
in connection with the payment of minimum and/or overtime wages to its
employees, or concerning the filing of a lien upon, against or in
connection with Borrower or any Subsidiary, or any of its real or personal
property, in connection with the FLSA, except where such action or omission
by Borrower or any Subsidiary could not reasonably be expected to
materially adversely impact the business, operations, properties or
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condition (financial or otherwise) of the Borrower and its Subsidiaries,
taken as a whole, or the ability of the Borrower to repay the Loan or to
observe and perform its obligations under the Loan Documents.
5.3.12 Notice Of Litigation. Promptly, upon Borrower's learning
of any litigation or proceeding in which it or any Subsidiary is a party if
an adverse decision in any such matter is reasonably likely to require it
to pay more than Five Million ($5,000,000) Dollars in excess of the amount
of any insurance covering such claim, or deliver assets the value of which
exceeds such sum or of the institution of any other suit or proceeding to
which Borrower or any Subsidiary is a party that, by itself or together
with any other such matters, might materially and adversely affect the
operations, financial condition, property, or business prospects of the
Borrower and its Subsidiaries, taken as a whole.
5.3.13 Other Information. Promptly, such other information and
data with respect to Borrower or any Subsidiary as from time to time may be
reasonably requested by any Bank.
5.3.14 Pro Forma Compliance Certificate. Not less than 30 days
prior to the consummation of any proposed acquisition which, when
aggregated with all other acquisitions consummated directly or indirectly
by the Borrower since the date of the most recent Compliance Certificate
furnished pursuant to Section 5.3.4 hereof, will result in a cumulative
increase in the Borrower's Funded Debt as a result of all such acquisitions
of $25,000,000 or more, a proforma management compliance certificate
certifying that all covenants set forth in Sections 5 and 6 hereof will be
complied with as of the date of such acquisition(s).
5.3.15 Other Information. Such other information as any Bank may
reasonably request.
5.4 Financial Covenants. Borrower will at all times comply with
the following financial covenants:
5.4.1 Tangible Net Worth Requirements. Borrower will maintain a
minimum consolidated Tangible Net Worth of Five Hundred Million Dollars
($500,000,000) to be adjusted upward at the end of each fiscal quarter
commencing January 1, 2001, by thirty-three percent (33%) of positive net
income after taxes and before dividends for such quarter. Once adjusted
upward, the Tangible Net Worth requirement set forth herein will not
decrease downward except for the cash cost of repurchases of treasury stock
at cost.
5.4.2 Funded Debt to Capitalization Ratio. Borrower will not
permit the ratio of Borrower's Funded Debt to Capitalization to exceed
40.0%, on a consolidated basis.
5.4.3 Interest Coverage Ratio. Borrower will not permit the
Interest Coverage Ratio to be less than 4.50 to 1.00, on a consolidated
basis as calculated on a rolling four (4) quarter basis.
5.4.4 Cumulative Net Loss. Borrower, on a consolidated basis,
shall not suffer a cumulative net loss, before income taxes, on a rolling
four quarter basis.
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5.5 Corporate Existence. Except as permitted under Section 6.3,
Borrower will at all times preserve and keep in full force and effect its
and each Restricted Subsidiary's corporate existence except for (i) Mining
Remedial Recovery Corporation and its subsidiaries, the book value of
which, when combined with other Restricted Subsidiaries made subject to
this exception is less than $5,000,000 in the aggregate, and (ii)
individual Restricted Subsidiaries whose book value is less than $1,000,000
and any rights material to its business and will maintain its and each
Restricted Subsidiary's right to transact business in each jurisdiction
where its assets or the nature of its activities makes such qualification
necessary, except where the failure could not reasonably be expected to
materially impact, adversely impact for business, operations, properties or
condition (financial or otherwise) of the Borrower and its Subsidiaries,
taken as a whole, or the ability of Borrower to repay the Loan or to observe
and perform its obligations under the Loan Documents. Good standing
certificates not delivered at closing pursuant to Section 3.3.2 shall be
delivered to Agent by February 28, 2001.
5.6 Payment of Taxes and Claims. Borrower will pay all Taxes,
assessments and other governmental charges imposed upon Borrower or any
Restricted Subsidiary (other than Mining Remedial Recovery Corporation and
its subsidiaries) before any penalty or interest accrues thereon; provided,
however, that Borrower will not be required to pay any such Taxes,
assessments, or charges if (a) the validity thereof will currently be
contested in good faith by appropriate proceedings, (b) Borrower will have
set aside on its books adequate reserves with respect to such Taxes,
assessments, or charges and (c) Borrower gives notice in writing of such
action to Agent and the Banks; provided that any such Taxes, assessments,
or charges will be paid immediately upon the commencement of proceedings to
foreclose any liens securing the same, or upon institution of distraint
proceedings.
5.7 Insurance. Borrower will maintain and cause each Subsidiary
to maintain, in full force and effect, adequate fire and extended risk
coverage, business interruption, workers' compensation, public liability
and such other insurance coverages as may be required by law and/or in such
amounts as is customary in the case of entities of well-established
reputation engaged in the same or similar business. Borrower will allow
representatives of each Bank to meet with senior management of Borrower and
any Subsidiary, from time to time as the Banks reasonably request in order
to assess the adequacy of such insurance policies.
5.8 Compliance With Laws, etc. Borrower will exercise all due
diligence in order to comply, in all material respects, with all
Requirements of Laws, except where the lack of compliance could not
reasonably be expected to materially adversely impact the business,
operations, properties or condition (financial or otherwise) of Borrower
and the Subsidiaries, taken as a whole, or the ability of Borrower to repay
the Loan or observe and perform any of its obligations under the Loan
Documents, including, without limitation, the following:
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5.8.1 Workers Compensation Laws. Borrower will comply with all
applicable workers' compensation laws, regulations and administrative
rules, directives or requirements. Borrower will furnish Agent upon demand
evidence in form and substance as Agent or its counsel may reasonably
require in order to verify such compliance. In the event that Borrower is
qualified to self-insure under such laws, regulations and administrative
rules, directives or requirements, and that Borrower is not otherwise
precluded from so self-insuring by the terms of this Agreement, Borrower
will fully comply with all such laws, regulations, rules, directives and
requirements pertaining to its self-insured status.
5.8.2 Pension Plans. Neither Borrower nor any of its pension
plans will engage in any Prohibited Transaction; incur any "accumulated
funding deficiency" (as such term is defined in Section 302 of ERISA)
whether or not waived; or terminate any such pension plan in a manner which
could result in the imposition of a lien on the property of Borrower,
pursuant to Section 4068 of ERISA or any successor provision thereto.
5.8.3 FLSA Compliance. Borrower will comply with FLSA and will
furnish Agent upon demand evidence in form and substance as Agent or its
counsel will require to verify such compliance.
5.8.4 Environmental Compliance. Borrower will comply with all
applicable Environmental Protection Statutes.
5.9 Payment of Indebtedness. Borrower and each of its majority
owned Subsidiaries (except Mining Remedial Recovery Corporation and its
subsidiaries and inter-company indebtedness) will pay all of its
Indebtedness, promptly when due in accordance with the terms of such
Indebtedness, except to the extent that failure to pay such Indebtedness
would not constitute an Event of Default under Section 7.1.4 hereof.
5.10 Maintenance of Franchises, etc. Borrower and each Restricted
Subsidiary will do or cause to be done all things necessary to preserve,
renew and keep in full force and effect the rights, licenses, permits,
franchises, agency agreements, and trade names material to the conduct of
its business, and maintain and operate such businesses properly and
efficiently, and in substantially the manner in which they are presently
conducted and operated (subject to changes in the ordinary course of
business), except where the failure to do so could not reasonably be
expected to materially adversely impact the business, operations,
properties or condition (financial or otherwise) of Borrower and the
Subsidiaries, taken as a whole, or the ability of Borrower to repay the
Loan or observe and perform any of its obligations under the Loan
Documents.
5.11 Further Assurances. At any time or from time to time, upon
the request of Agent, Borrower will execute and deliver such further
documents and do such other acts and things as Agent may reasonably request
in order to effect fully the purpose of this Agreement, the other Loan
Documents and other agreements contemplated hereby and to provide for
payment of and security for the Loan made hereunder in accordance with the
terms of this Agreement.
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5.12 New Guaranties. If at the end of any Fiscal Year, the
Restricted Subsidiaries do not meet the test set forth in the following
sentence, additional Domestic Subsidiaries must, within sixty (60) days of
the end of such most recent Fiscal Year, execute Guaranties so that the
Domestic Subsidiaries that have executed guarantees meet such test. The
test is that the Domestic Subsidiaries that have executed Guarantees must
have (a) the net earnings, before taxes, which, together with their
respective subsidiaries, and Borrower (but excluding Subsidiaries that are
not Restricted Subsidiaries) for the most recent fiscal year of the
Borrower constitute eighty percent (80%) percent or more of the
consolidated net earnings of the Borrower and the Subsidiaries, as
determined in accordance with GAAP, and (b) total assets, calculated in
accordance with GAAP, which, together with their respective Subsidiaries
and Borrower (but excluding Subsidiaries that are not Restricted
Subsidiaries) for most recent fiscal year end of the Borrower, constitute
eighty percent (80%) percent or more of the consolidated Total Assets of
the Borrower and the Subsidiaries. The Guaranty shall be in the term of
Exhibit 3.5.1(b) and the Subsidiaries executing the guaranty shall deliver
with the executed guaranty certified copies of such Subsidiary's
organizational documents, including resolutions authorizing the execution
and delivery of such Guaranty, and together with an opinion of counsel for
such Subsidiary in form and substance satisfactory to the Agent and its
counsel. Notwithstanding the foregoing, no newly acquired Domestic
Subsidiary shall be required to deliver such a guaranty so long as the
giving of such a guaranty would constitute a default under the terms of any
loan document between such acquired Domestic Subsidiary and a bona fide
lending institution which was entered into prior to, but not in
contemplation of, such acquisition.
6. NEGATIVE COVENANTS. Borrower covenants and agrees that, until all
of the Obligations are satisfied and the Commitments hereunder have been
terminated, Borrower will not, without the prior written consent of the
Requisite Banks do any of the following:
6.1 Indebtedness. Except as set forth on Schedule 4.13 to this
Agreement, Borrower will not, and will cause each of the Subsidiaries (but
excluding any Subsidiary organized in Europe and any Subsidiary in which
Borrower directly or indirectly owns less than a majority interest) not to,
create, incur, assume, permit or otherwise become or remain, directly or
indirectly, liable with respect to any Indebtedness except for (i) the
Obligations, (ii) Indebtedness with respect to Permitted Liens, (iii)
Indebtedness of Borrower and its wholly-owned Subsidiaries in an aggregate
amount not to exceed Twenty-Five Million ($25,000,000) Dollars and (iv)
consolidating inter-company indebtedness as shown on consolidating
financial statements delivered pursuant to Section 5.3.1 of this Agreement.
Furthermore, Borrower and Restricted Subsidiaries, from and after the
Closing Date, shall not make new loans or advances to transfer assets to,
or make investments in Subsidiaries that are not Restricted Subsidiaries,
net of repayments or advances from Subsidiaries that are not Restricted
Subsidiaries, in excess of $45,000,000.
6.2 Liens. Borrower will not, and will cause each Restricted
Subsidiary not to, directly or indirectly, create, incur, assume or permit
to exist any Lien on or with respect to any property or asset of any kind
of Borrower or any Subsidiary, whether now owned or hereafter acquired
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except (i) Permitted Liens, (ii) liens created by or resulting from any
litigation or legal proceeding (including any regulatory enforcement
actions) and against which adequate reserves under GAAP are being
maintained which is currently being contested in good faith by appropriate
proceedings, and, if the amount of any such Lien exceeds $1,000,000 and the
Requisite Banks so request, such Lien shall have been bonded over in a
manner reasonably satisfactory to the Requisite Banks, (iii) Liens for
taxes not delinquent or being contested in good faith, (iv) Liens created
in connection with workers' compensation, unemployment insurance, and
social security, or to secure the performance of bids, tenders or contracts
(other than for the repayment of borrowed money), leases, statutory
obligations, surety and appeal bonds, (v) other similar Liens incidental to
the normal conduct of the ordinary course of business of the Borrower and
the Subsidiaries in an aggregate amount not to exceed $1,000,000, (vi)
Liens existing on the Closing Date as set forth on Schedule 6.2 hereof,
(vii) Liens representing the extension, renewal or replacement of a Lien
under immediately preceding clause (vi) in respect of the same property of
the same Subsidiary, and (viii) Liens securing indebtedness permitted under
Section 6.1(iii) up to an aggregate amount of $25,000,000.
6.3 Restriction on Fundamental Changes. Borrower will not, and
will cause each Fundamental Subsidiary not to fundamentally change the
nature of its business, enter into any merger, consolidation,
reorganization or recapitalization, or liquidate, wind up or dissolve
itself (or suffer any liquidation or dissolution), or convey, sell (other
than in the ordinary course of its business), assign, lease, transfer or
otherwise dispose of, in one transaction or a series of transactions, all
or any part of its business, property, assets or securities, whether now
owned or hereafter acquired, or acquire by purchase or otherwise, all or
substantially all the business, property, assets, securities or interest of
any Person; provided that (a) a Domestic Subsidiary may merge or
consolidate with Borrower, provided that the Borrower will be the surviving
corporation; (b) a Domestic Subsidiary may merge or consolidate with
another Domestic Subsidiary that is both a Fundamental Subsidiary and a
Restricted Subsidiary; (c) a Domestic Subsidiary may sell, lease, transfer
or otherwise dispose of any of its assets to Borrower or another Domestic
Subsidiary that is both a Fundamental Subsidiary and a Restricted
Subsidiary; (d) Borrower may acquire or form additional Subsidiaries;
provided that each such newly formed Subsidiary is wholly-owned by Borrower
(unless Borrower has obtained the prior written consent of the Requisite
Banks to acquire or form a Subsidiary which will not be wholly-owned, which
consent will not be unreasonably withheld); and further provided that each
such newly formed Subsidiary becomes, on its formation, both a Restricted
Subsidiary and a Fundamental Subsidiary; and (e) Borrower may dispose of
any assets owned by any Subsidiary other than a Fundamental Subsidiary. On
the closing of any transaction permitted by this Section 6.3, the test
required by Section 5.12 must be met.
6.4 Environmental Statutes. Borrower will not, and will not
permit any other Person to violate an Environmental Protection Statute,
except where such violation could not reasonably be expected to materially
adversely impact the business, operations, properties or condition
(financial or otherwise) of the Borrower and its Subsidiaries, taken as a
whole, or the ability of the Borrower to repay the Loan or to observe and
perform its obligations under the Loan Documents.
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6.5 Conflicting Agreements. Borrower will not, and will cause
each Subsidiary not to, enter into any agreement containing any material
provisions which would be violated or breached by the performance of its
obligations hereunder or under any instrument or document delivered or to
be delivered by it hereunder or in connection herewith.
6.6 Misrepresentations. Borrower will not, and will cause each
Subsidiary not to, furnish any Bank any certificate or other document that
will contain any untrue statement of material fact or that will omit to
state a material fact necessary to make it not misleading in light of the
circumstances under which it was furnished. For purposes of the previous
sentence the phrase "material fact," is a fact or facts which, taken as a
whole, could reasonably be expected to adversely affect the business,
operations, property or assets, the business prospects, or condition
(financial or otherwise), of its Subsidiaries taken as a whole, or the
ability of Borrower to repay the Loan or to observe and perform its
obligations under the Loan Documents.
6.7 Violation of Regulations. Borrower will not make any
investment of any nature which would result in the violation of Regulations
U or X of the Board of Governors of the Federal Reserve System as the same
may from time to time be amended or modified.
6.8 Subsidiary Distribution of Earnings. Borrower will not, and
will cause each Subsidiary not to, enter into any agreement which could
prohibit, or have the effect of prohibiting, the payment of dividends by or
other distribution of the earnings of any Subsidiary to Borrower.
6.9 Scope of Business Activity. Borrower will not and will cause
each Subsidiary not to engage in any business or activities other than
those representing its respective, present business, provided that Borrower
or any Subsidiary may acquire or commence new or additional related
businesses which do not materially adversely affect the nature or operation
of Borrower's or such Subsidiary's existing business.
6.10 Dividends and Distributions; Capital Structure. Borrower
will not, and will cause each Subsidiary not to, pay or declare any
dividends or other distributions upon its capital stock (except, in the
case of the Subsidiaries, dividends or other distributions to such
Subsidiary's parent corporation), or purchase or retire, or commit Borrower
or any Subsidiary to purchase or retire, any of its capital stock at any
time, during any period that Borrower is in default under Section 5.4
hereof or such distribution, purchase or retirement would render Borrower
in default under Section 5.4 hereof.
7. EVENTS OF DEFAULT; ACCELERATION; REMEDIES.
7.1 Events of Default. The occurrence of any one or more of the
following events, acts or occurrences will constitute an event of default
(an "Event of Default") hereunder:
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7.1.1 Failure to Make Payments When Due. Borrower fails to pay
any principal and/or interest owing under any Note when such amount is due
(whether at stated maturity, as a result of a mandatory prepayment
requirement, by acceleration, by notice of prepayment or otherwise) (and
the continuation thereof for three (3) days beyond the date due, or
Borrower fails to pay any other amounts (including, without limitation,
interest, fees, costs and expenses) payable under this Agreement, and the
continuation thereof for three (3) days beyond the date due, or any other
Loan Document or in connection with any letter of credit issued hereunder,
when such amounts are due.
7.1.2 Breach of Representation, Warranty or Certification. Any
representation, warranty or certification made or furnished by Borrower or
any Subsidiary under this Agreement, any other Loan Document or in any
statement, document, letter or other writing or instrument furnished or
delivered to any Bank pursuant to or in connection with this Agreement or
other Loan Document or as an inducement to the Banks to enter into this
Agreement, will, at any time, prove to have been materially false,
incorrect or incomplete when made, effective or reaffirmed, as the case may
be.
7.1.3 Default Under Loan Documents, etc. Borrower or any
Subsidiary (to the extent such term, covenant, condition or agreement is
applicable to such Subsidiary) fails to observe, or perform any term,
covenant, condition, agreement set forth in Sections 5.1, 5.2, 5.4 (except
5.4.4), 5.5, 5.8, 6.1, 6.2, 6.3, 6.5, 6.6, 6.7, 6.8, 6.9 and 6.10.
7.1.4 Default on Other Agreements. (i) the Borrower or any
Subsidiary shall fail to make any payment in respect of Indebtedness owing
on any bond, debenture, note or other evidence of Indebtedness for borrowed
money in an aggregate amount in excess of Fifteen Million ($15,000,000)
Dollars (other than the Notes) when due or within any applicable grace
period; or (ii) any event or condition shall occur which results in the
acceleration of the maturity of Indebtedness owing on any bond, debenture,
note or other evidence of Indebtedness for borrowed money outstanding in an
aggregate amount in excess of Fifteen Million ($15,000,000) Dollars of the
Borrower or any Subsidiary (including, without limitation, any required
mandatory prepayment or "put" of such Indebtedness to the Borrower or any
Subsidiary) or enables (or, with the giving of notice or lapse of time or
both, would enable) the holders of such Indebtedness or commitment or any
Person acting on such holders' behalf to accelerate the maturity thereof or
terminate any such commitment (including, without limitation, any required
mandatory prepayment or "put" of such Indebtedness to the Borrower or any
Subsidiary).
7.1.5 Other Defaults Under Loan Documents. Borrower or any
Subsidiary will default in the performance of or compliance with any term
or covenant contained in this Agreement or the other Loan Documents (other
than those referred to above in Sections 7.1.1, 7.1.2 or 7.1.3 of this
Agreement or in the following sentence), and such default will continue
unremedied for a period of thirty (30) days; provided, that the thirty (30)
day time period will not start until Agent or any Bank provides Notice to
Borrower in the case of defaults under Sections 5.3.1, 5.3.2, 5.3.3, 5.3.4,
5.3.5, 5.9, 5.10, 5.11 and 5.12. If the event described in Section 5.4.4
occurs, and in the fiscal quarter following such event (the "Following
Quarter") Borrower, on a consolidated basis, suffers a net loss, before
income taxes, an Event of Default shall occur as of the last day of the
Following Quarter.
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7.1.6 Involuntary Bankruptcy; Appointment of Trustee, etc.
(a) If an involuntary case seeking the liquidation or
reorganization of Borrower or any Restricted Subsidiary under any chapter
of the federal Bankruptcy Code or any similar proceeding will be commenced
against Borrower or any Restricted Subsidiary under any other applicable
law and any one or more of the following events occur: (i) Borrower or
such Subsidiary consents to the institution of the involuntary case, (ii)
the petition commencing the involuntary case is not timely controverted;
(iii) the petition commencing the involuntary case is not dismissed within
sixty (60) days of its filing; (iv) an interim trustee is appointed to take
possession of all or a substantial portion of the property and/or to
operate all or any substantial portion of the business of Borrower or such
Subsidiary; or (v) an order for relief will have been issued or entered
therein.
(b) A decree or order of a court having jurisdiction in the
premises for the appointment of a receiver, liquidator, sequestrator,
custodian, trustee or other officer having similar powers of Borrower or
any Restricted Subsidiary to take possession of all or a substantial
portion of the property and/or to operate all or a substantial portion of
the business of Borrower or such Subsidiary will have been entered and,
within sixty (60) days from the date of entry, is not vacated, discharged
or bonded against, or any similar relief will be granted against Borrower
or such Subsidiary under any applicable federal or state law, and, within
sixty (60) days from the date of entry, is not vacated, discharged or
bonded against.
7.1.7 Voluntary Bankruptcy; Appointment of Trustee, etc.
(a) Borrower or any Restricted Subsidiary will (i) institute a
voluntary case seeking liquidation or reorganization under any chapter of
the federal Bankruptcy Code; (ii) file a petition, answer or complaint or
will otherwise institute any similar proceeding under any other applicable
law, or will consent thereto; (iii) consent to the conversion of a
voluntary case to an involuntary case; (iv) consent to the conversion of an
involuntary case to a voluntary case, (v) consent or acquiesce to the
appointment of a trustee, receiver, liquidator, sequestrator, custodian or
other officer with similar powers to take possession of all or a
substantial portion of the property and/or to operate all or a substantial
portion of the business of Borrower or any Restricted Subsidiary; or (vi)
make a general assignment for the benefit of creditors.
(b) The Board of Directors of Borrower or the governing body
of any Restricted Subsidiary adopts any resolution or otherwise authorizes
action to approve any of the foregoing; provided, that nothing herein shall
be construed to prevent Arava Natural Resources Company, Inc., in its
capacity as a shareholder of Mining Remedial Recovery Corporation, from
adopting resolutions or authorizing action with respect to Mining Remedial
Recovery Corporation and or its subsidiaries.
7.1.8 Judgments and Attachments.
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(a) Borrower or any Restricted Subsidiary will suffer any
money judgment(s), fines or penalties not covered by insurance, writ(s) or
warrant(s) of attachment or similar process(es) involving an amount, in the
aggregate, in excess of Fifteen Million ($15,000,000) Dollars and will not
satisfy, discharge, vacate, bond or stay the same within a period of thirty
(30) days or, in any event, within ten (10) days of the date of any
proposed sale thereunder.
(b) A judgment creditor will obtain possession of any material
portion of the properties or assets of Borrower or any Restricted
Subsidiary by any means, including, without limitation, levy, distraint,
replevin or self-help.
7.1.9 Dissolution. Any order, judgment or decree will be entered
against Borrower or any Restricted Subsidiary having assets in excess of
$1,000,000 decreeing the dissolution or division of it and such order will
remain undischarged or unstayed for a period in excess of thirty (30) days.
7.1.10 Termination of Loan Documents, etc. Any of the Loan
Documents will cease to be in full force and effect for any reason
other than a release or termination thereof upon the full payment and
satisfaction of the Obligations.
7.1.11 Environmental Violations. A breach of Sections 4.10,
5.8.4 or 6.4 will have occurred.
7.1.12 Change of Control. Any Person or two or more Persons
acting in concert shall have acquired beneficial ownership (within the
meaning of Rule 13d-3 of the Securities and Exchange Commission under the
Securities Exchange Act of 1934) of 20% or more of the outstanding shares
of the voting stock of the Borrower; or (ii) as of any date a majority of
the Board of Directors of the Borrower consists of individuals who were not
either (A) directors of the Borrower as of the corresponding date of the
previous year, (B) selected or nominated to become directors by the Board
of Directors of the Borrower of which a majority consisted of individuals
described in clause (A), or (C) selected or nominated to become directors
by the Board of Directors of the Borrower of which a majority consisted of
individuals described in clause (A) and individuals described in clause
(B).
7.2 Remedies; Termination of Commitments. Upon the occurrence of an
Event of Default all Obligations will, at the request of the Requisite
Banks, immediately be due and payable without presentment, demand, protest,
notice or other requirements of any kind, all of which are hereby expressly
waived by Borrower, and all commitments of the Banks hereunder will
terminate, at the direction of the requisite Banks, without further action
of any kind, provided, however, if any of the events described in Section
7.1.6 or 7.1.7 occurs, all Obligations and commitments of the Banks shall
immediately terminate. Upon acceleration, Agent will proceed to protect,
exercise and enforce the Banks' rights and remedies hereunder and under the
other Loan Documents and any other rights and remedies as are provided by
law or equity. If the Loan is then one which may be repaid is a Eurodollar
Advance, the Banks shall pay the compensation set forth in Section 7.4
below. Agent may determine, in its sole discretion, the order and manner in
which the Banks' rights and
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remedies are to be exercised, and all payments received by Agent will be
applied as follows: first, to all costs and expenses incurred by Agent in
collecting any Obligations by reason of such Event of Default; second, pro
rata to accrued interest; third, pro rata to other Obligations; fourth, to
a cash collateral account maintained at the Agent up to the aggregate face
amount of all outstanding letters of credit issued hereunder to secure
Borrower's reimbursement obligation in connection with such letters of
credit; and fifth, to Borrower or as otherwise provided by any Requirement
of Law. During the existence of any Event of Default, at the request of
the Agent and/or the Requisite Banks, Borrower shall forthwith deposit into
a cash collateral account with the Agent an amount of cash equal to the
aggregate face amount of all outstanding letters of credit issued
hereunder, to secure Borrower's reimbursement obligation in connection with
such letters of credit.
7.3 Right of Set-Off. In addition to all other remedies available
to the Banks, after any Event of Default, each Bank is hereby authorized at
any time and from time to time, without further notice to Borrower, to set
off and proportionately apply said amount between the other Banks, any and
all deposits (general or special, time or demand, provisional or final) at
any time held and other indebtedness at any time owing by such Bank to or
for the credit or the account of Borrower, against any and all the
obligations of Borrower, now or hereafter existing under any Loan Document.
7.4 Compensation. Upon the request of any Bank, delivered to the
Borrower and the Agent, the Borrower shall pay to such Bank such amount or
amounts as shall compensate such Lender for any loss, cost or expense
incurred by such Bank as a result of:
(a) any payment or prepayment of a Eurodollar Loan on a date other
than the last day of an Interest Period for such Loan; or
(b) any failure by the Borrower to prepay a Eurodollar Loan on the
date for such prepayment specified in the relevant notice of prepayment
hereunder; or
(c) any failure by the Borrower to borrow a Eurodollar Loan on the
date for the Borrowing of which such Eurodollar Loan is a part specified in
the applicable Borrowing Notice delivered pursuant to Section 2.2.2;
such compensation to include, without limitation, an amount equal to the
excess, if any, of (x) the amount of interest which would have accrued on
the amount so paid or prepaid or not prepaid or borrowed for the period
from the date of such payment, prepayment or failure to prepay or borrow to
the last day of the then current Interest Period for such Eurodollar Loan
(or, in the case of a failure to prepay or borrow, the Interest Period for
such Eurodollar Loan which would have commenced on the date of such failure
to prepay or borrow) at the applicable rate of interest for such Eurodollar
Loan provided for herein over (y) the amount of interest (as reasonably
determined by such Lender) such Lender would have paid on deposits in
Dollars of comparable amounts having terms comparable to such period placed
with it by leading lenders in the London interbank market (if such Loan is
a Eurodollar Loan).
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8. THE AGENT AND RELATIONS AMONG BANKS, ETC.
8.1 Appointment. Each Bank hereby designates and appoints the
Agent the limited administrative agent for all Banks under this Agreement
and the other Loan Documents. Each Bank hereby irrevocably authorizes
Agent on its behalf to take or refrain from taking any action, and to
exercise or refrain from the exercise of any power, as is required or
permitted by the Banks to be taken under the provisions of this Agreement
and the other Loan Documents, together with such other powers as are
reasonably incidental thereto, subject only to the express limitations of
this Agreement. The duties of Agent under this Agreement and the other
Loan Documents are mechanical and administrative in nature, are limited to
those expressly provided herein, and do not establish a fiduciary
relationship as between the Agent and any Bank. In performing its function
and duties under this Agreement and the other Loan Documents, Agent will
act solely as an agent of Banks and assumes no obligation towards or
relationship of agency or trust with Borrower. Agent may perform any of
its duties under this Agreement or another Loan Document by or through its
agents or employees.
8.2 Advances and Payments.
8.2.1 Advances: In General. All Advances will be made by Agent
on behalf of the Banks on the requested Advance Date, except that the
Ratable Share of any Bank which the Agent receives after 12:00 p.m. Eastern
Time on the Advance Date, or at any time after the Advance Date, will be
disbursed on the Business Day following its receipt. Nothing in this
Agreement or any other Loan Document is to be construed to require Agent to
advance funds on behalf of any Bank or to relieve any Bank from its
obligation to make Advances or to prejudice any rights that Borrower may
have against any Bank as a result of any default by that Bank hereunder.
8.2.2 Advances. In order to minimize transfers between the Agent
and each Bank of funds representing the Bank's Ratable Share of an Advance,
a Borrower payment, or (to the extent that Agent has not been promptly
reimbursed by Borrower) other amounts for which the Agent is entitled to
Bank reimbursement or indemnification, coincidental transfer and loan
account adjustments may be made on a "net" basis. Not later than the
Business Day immediately preceding an Advance Date or a date on which Bank
reimbursement of the Agent is requested, Agent will advise each Bank by
telephone or telecopy as to the purpose and aggregate amount to be
disbursed or paid by Agent and the Advance Date or actual or anticipated
payment date, as the case may be; the amount which is such Bank's Ratable
Share thereof; and, if in order to cause all loan accounts maintained by
Agent for such Bank to conform to its Ratable Share of the Loan, the amount
which such Bank is requested to remit to Agent will be different, the
identity of the loan account(s) requiring adjustment and the nature and
amounts due to or from the Bank with respect thereto. All amounts which a
Bank is required to remit to Agent will be made available to Agent by
transfer of same day funds to the designated wire account of Agent not
later than 12:00 p.m. Eastern Time on the Advance Date, as evidenced by a
wire transfer number or actual receipt by Agent. Agent will have no
liability to Borrower for the failure of any Bank to make an Advance on the
Advance Date, and if any Advance Date is on a day when any of the Banks are
not open for business, then each Bank shall transfer to Agent its Ratable
Share on the next day such Bank is open for business.
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8.2.3 Distribution of Payments. All Loan payments in respect of
Advances, interest, fees or expenses incurred by the Banks and required by
Borrower to be reimbursed will be deemed paid when immediately available
U.S. currency or its equivalent is paid in the amount required by Borrower
to Agent. On the Business Day Agent receives a Borrower payment, Agent
will advise each Bank by telephone or telecopy of the aggregate amount and
such Bank's Ratable Share of amounts actually received by Agent in respect
of Advances, interest, fees, or, to the extent that the Banks previously
have remitted to Agent therefor, reimbursements for other amounts for which
Agent has required Bank reimbursement or indemnification. Agent will pay
to such Bank on the same Business Day, by transfer to such Bank's wire
account (as specified by such Bank on Exhibit 8.2.3 to this Agreement or as
amended by such Bank from time to time after the date hereof) its Ratable
Share, "netted" as permitted herein, of any such payment received by Agent
not later than 12:00 p.m. (Eastern Time), and otherwise on the next
Business Day.
8.2.4 Return of Payments. Any Agent payment to a Bank under this
Agreement in the belief or expectation that a related payment has been or
will be received by Agent from Borrower, which related payment in fact is
not received by Agent, will entitle Agent to recover such amount from the
Bank without set-off, counterclaim or deduction of any kind. If Agent
determines at any time that an amount received by Agent under this
Agreement must be returned to Borrower or paid to any other Person pursuant
to any solvency law or otherwise, then, notwithstanding any other term or
condition of this Agreement, Agent will not be required to distribute any
portion thereof to any Bank. However, if Agent has previously distributed
such amount, each Bank will repay to Agent on demand any portion of such
amount that Agent has distributed to such Bank, together with interest at
such rate, if any, as Agent is required to pay to Borrower or such other
Person, without set-off, counterclaim or deduction of any kind by the Bank.
8.3 Dissemination of Information. Agent will distribute promptly
to each Bank the executed promissory notes evidencing such Bank's Ratable
Share of the Loans. Agent will have no duty or responsibility, either
initially or on a continuing basis, to provide any Bank with any credit or
other information with respect to Borrower (other than information or
notices received by it in accordance herewith and only if not received by
the Banks from Borrower), whether coming into its possession before the
date of this Agreement or at any time or times thereafter. Agent will use
its best efforts after written request therefor by any Bank, and only if
not received by such Bank from Borrower, to distribute promptly to each
Bank copies of every notice, request, communication, report or other
information received by Agent from Borrower pursuant to this Agreement or
another Loan Document; provided, that Agent will be liable to the Banks for
any failure to do so only if such failure is attributable to Agent's gross
negligence or willful misconduct, which will not include the Agent's
failure to obtain any of the foregoing from Borrower.
8.4 Amendments, Consents and Waivers for Certain Actions. Agent
is authorized and empowered on behalf of the Banks to amend or modify in
writing any provision of this Agreement or another Loan Document which
relates or pertains to the Borrower, or to consent to or waive Borrower's
performance of any obligation on any Event of Default, only with the prior
written consent of the Requisite Banks or all of the Banks, as the case may
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be. When Agent requests the consent of the Requisite Banks and does not
receive a written denial thereof from any Bank within ten (10) Business
Days after such Bank's receipt of such request, then such Bank will be
deemed to have denied such consent. Borrower agrees that it will not
assert any claim of amendment, modification, consent or waiver which is not
in writing, which writing (i) references this Agreement or any of the other
Loan Documents and (ii) is signed by the Requisite Banks or all of the
Banks, as the case may be.
8.5 Exculpation. Agent and its officers, directors, employees and
agents will be liable to any Bank only for the performance of their express
obligations under this Agreement and the other Loan Documents and for their
own gross negligence or willful misconduct in the performance of any action
taken or omitted in connection therewith. If any apportionment or
distribution of payments made by Agent in good faith is subsequently
determined to have been made in error, Agent will not be liable therefor,
but the sole recourse of any Bank to whom payment was due but not made will
be to recover from other Banks any payment in excess of the amount to which
they are determined to be entitled (and such other Banks hereby agree to
return to such Bank any such erroneous payments received by them). The
Agent shall use its best efforts to assist the Banks in determining when
any such excess payment has been made and in facilitating the recovery
thereof. In performing its functions and duties hereunder, Agent will
exercise the same care which it would in dealing with loans for its own
account. Agent will not be responsible to any Bank for the truth or
completeness of any recitals, statements, representations or warranties
herein, the execution, effectiveness, genuineness, validity,
enforceability, collectability, or sufficiency of this Agreement or any
other Loan Document or the transactions contemplated thereby, or the
financial condition of Borrower. Agent will not be required to make any
inquiry concerning either the performance or observance of any of the
terms, provisions or conditions of this Agreement or any other Loan
Document, the financial condition of Borrower, or the existence or possible
existence of any Event of Default. Agent at any time may request
instructions from the Requisite Banks with respect to any action, inaction,
failure or approval which, by the terms of this Agreement or any other Loan
Document, Agent is permitted or required to take or to grant, and if such
instructions are promptly requested, Agent may refrain from taking any
action or withhold any approval and may refrain from any action or withhold
any approval until it has received such instructions from the Requisite
Banks. No Bank will have any right of action whatsoever against Agent as a
result of Agent acting or refraining from acting in accordance with
instructions of the Requisite Banks or all of the Banks, as the case may
require.
8.6 Reliance. Agent may rely upon any written notices,
statements, certificates, orders or other documents or any telephone
message or other communication (including any writing, telecopy or
telegram) believed by it in good faith to be genuine and correct and to
have been signed, sent or made by the proper Person, and with respect to
all matters pertaining to this Agreement or any other Loan Document, upon
advice of legal counsel as to legal matters, independent accountants as to
audit and accounting matters, and other experts selected by it, and when
doing so will not be liable to any Bank for any action taken or omitted by
Agent in good faith. If any written confirmation of a telephonic notice or
instructions differs from the action taken by Agent in connection with such
telephonic notice of instructions, Agent's records will govern absent
manifest error.
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8.7 Credit Decisions. Each Bank acknowledges that, independently
of Agent and each other Bank and based on the financial information
received by it and such other documents, information, and independent
investigation of the financial condition and affairs of Borrower as it has
deemed appropriate, it has made and will continue to make its own appraisal
of the creditworthiness of Borrower and credit decisions to participate in
the Loans in accordance with this Agreement. Each Bank also acknowledges
that, independently of Agent and each other Bank, and based on such other
documents, information, and investigations as it deems appropriate at any
time, it will continue to make its own credit decisions as to exercising or
not exercising from time to time any rights and privileges available to it
under this Agreement or any other Loan Document.
8.8 Indemnification.
8.8.1 Agent Indemnification. Each Bank agrees (which agreement
shall surviveany termination of this Agreement) to indemnify Agent
according to such Bank's Ratable Share from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses, excess Advances or payments of any kind or nature
whatsoever which may at any time be imposed on, incurred by, or asserted
against Agent in any way relating to or arising out of this Agreement or
another Loan Document, including (without limitation) the reimbursement of
Agent for all expenses (including reasonable attorneys' and paralegals'
fees, the allocated expense of in-house attorneys and paralegals, and all
out-of-pocket expenses) incurred by Agent under or in connection with this
Agreement or another Loan Document or in enforcing the Obligations, in all
cases as to which Agent is not reimbursed by Borrower, provided that no
Bank will be liable for the payment of any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses, Advances or payments as are determined by a court of competent
jurisdiction in a final, non-appealable decision or order to have resulted
solely from Agent's gross negligence, willful misconduct, violation of any
relevant statute, law, ordinance, rule or regulation or violation of this
Agreement or another Loan Document. Agent will not be required to take any
action hereunder or under any other Loan Document, or to prosecute or
defend any action or proceeding in respect of this Agreement or another
Loan Document, unless it is indemnified to its satisfaction by the Banks
against losses, costs, liabilities, and expenses. If any indemnity in
favor of Agent is impaired, Agent may call for additional indemnity and
cease to do the acts indemnified against until such additional indemnity is
given.
8.8.2 Borrower Indemnification. The Borrower hereby agrees to
indemnify the Agent, each Bank, their respective affiliates, and each of
their directors, officers and employees against all losses, claims,
damages, penalties, judgments, liabilities and expenses (including, without
limitation, all expenses of litigation or preparation therefor whether or
not the Agent, any Bank or any affiliate is a party thereto) which any of
them may pay or incur arising out of or relating to this Agreement, the
other Loan Documents, the transactions contemplated hereby or the direct or
indirect application or proposed application of the proceeds of any Loan
hereunder except to the extent that they are determined in a final non-
appealable judgment by a court of competent jurisdiction to have resulted
from the gross negligence or willful misconduct of the party seeking
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indemnification. In no event will any Banks claim for indemnification, as
damages, losses arising, in the ordinary course of each Banks' business,
out of Loans for which the rate charged by Bank is less than the rate paid
by such Bank for borrowed funds. The obligations of the Borrower under
this Section 8.8.2 shall survive the termination of this Agreement.
8.9 Successor. Agent may resign as such at any time upon at least
30 days' prior notice to Borrower and all Banks, which resignation will be
effective when a successor Agent is in place. If Agent resigns, the
Requisite Banks may appoint another Person as a successor Agent which
thereupon will become the Agent. If no successor to the Agent is appointed
by the Requisite Banks and accepts such appointment within 30 days after
the retiring Agent's notice of resignation, then the retiring Agent may, on
behalf of the Banks, appoint a successor Agent, which will be one of the
Banks or a commercial banking institution organized under the laws of the
United States or a United States branch or agency of a commercial banking
institution, and having a combined capital and surplus of at least
$250,000,000. Upon the acceptance by any successor an appointment as Agent
hereunder, such successor Agent will be entitled to receive from the
retiring Agent such documents of transfer and assignment as such successor
Agent may reasonably request, and will thereupon succeed to, and become
vested with all rights, powers, privileges, and duties of the retiring
Agent, and the retiring Agent will be discharged from all duties and
obligations arising under this Agreement and the other Loan Documents from
and after the date on which its resignation is effective. After any
retiring Agent's resignation or removal hereunder as Agent, the provision
of this Agreement and the other Loan Documents will continue to bind and
inure to its benefit as to any actions taken or omitted to be taken by it
while it was Agent. If the successor Agent is not one of the Banks,
Borrower shall have right to reasonably approve such successor Agent.
8.10 Agent as a Bank. Agent, in its capacity as a Bank, will have
the same rights, powers, duties and liabilities with respect to the Loans
as any other Bank and may exercise the same as if it were not the Agent.
Unless otherwise required by the context, the terms "Bank", "Banks" and
"Requisite Banks" or any similar terms will include the Agent when acting
in its individual capacity. Agent may lend money to, and generally engage
in any kind of banking, trust or other business with Borrower to the same
extent as any other financial institution.
8.11 Borrower Not A Beneficiary. The provisions of this Section 8
are solely for the benefit of Agent and the Banks and Borrower will have no
rights as a third party beneficiary of any of the provisions hereof;
provided, however, Borrower will be bound by the provisions hereof.
Borrower will have no right against Agent acting in its capacity as Agent,
for any claims of Borrower arising from this Agreement, all such claims
being assertable only against the Banks.
8.12 Sharing Among Banks. Without affecting the rights of the
Borrower hereunder, each of the Banks agrees with every other Bank that, in
the event it shall receive payment on account of the Loan in excess of its
pro rata portion, according to the principal amount of its participation in
Advances then outstanding, of a payment due all of the Banks, whether such
payment be voluntary, involuntary or by operation of law, by application of
setoff of any indebtedness or otherwise, then such Bank shall promptly
purchase from each of the other Banks, without recourse, for cash and at
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face value, ratably in accordance with the principal amounts of the
participations in Advances then outstanding, interest of the other Banks in
the Loans in such an amount that each of the Banks shall have received
payment pro rata on account of its participation in the Loans in accordance
with the unpaid principal amount thereof then owing to it; provided, that
if any such purchase be made by any Bank and if any such excess payment
relating thereto or any part thereof is thereafter recovered from such
Bank, appropriate adjustments in the related purchases from the other Banks
shall be made by rescission and restoration of the purchase price as to the
portion of such excess payment so recovered.
8.13 Assignments
8.13.1. Permitted Assignments. Any Bank may, in the ordinary
course of its business and in accordance with applicable law, at any time
assign to one or more banks or other entities ("Purchasers") all or any
part of its rights and obligations under the Loan Documents. Such
assignment shall be substantially in the form of Exhibit 8.13.1 or in such
other form as may be agreed to by the parties thereto. The consent of the
Borrower and the Agent shall be required prior to an assignment becoming
effective with respect to a Purchaser which is not a Bank or an affiliate
thereof; provided, however, that if an Event of Default has occurred and is
continuing, the consent of the Borrower shall not be required. Such consent
shall not be unreasonably withheld or delayed. Each such assignment with
respect to a Purchaser which is not a Bank or an affiliate thereof shall
(unless each of the Borrower and the Agent otherwise consents) be in an
amount not less than the lesser of (i) $10,000,000 or (ii) the remaining
amount of the assigning Bank's outstanding Loans.
8.13.2. Effect; Effective Date. Upon (i) delivery to the Agent
of an assignment, together with any consents required by Section 12.3.1,
and (ii) payment of a $5,000 fee to the Agent for processing such
assignment (unless such fee is waived by the Agent), such assignment shall
become effective on the effective date specified in such assignment. The
assignment shall contain a representation by the Purchaser to the effect
that none of the consideration used to make the purchase of the Loans under
the applicable assignment agreement constitutes "plan assets" as defined
under ERISA and that the rights and interests of the Purchaser in and under
the Loan Documents will not be "plan assets" under ERISA. On and after the
effective date of such assignment, such Purchaser shall for all purposes be
a Bank party to this Agreement and any other Loan Document executed by or
on behalf of the Banks and shall have all the rights and obligations of a
Bank under the Loan Documents, to the same extent as if it were an original
party hereto, and no further consent or action by the Borrower, the Banks
or the Agent shall be required to release the transferor Bank with respect
to the percentage of the Aggregate Loans assigned to such Purchaser. Upon
the consummation of any assignment to a Purchaser pursuant to this Section
8.13.2, the transferor Bank, the Agent and the Borrower shall, if the
transferor Bank or the Purchaser desires that its Loans be evidenced by
Notes, make appropriate arrangements so that new Notes or, as appropriate,
replacement Notes are issued to such transferor Bank and new Notes or, as
appropriate, replacement Notes, are issued to such Purchaser, in each case
in principal amounts reflecting their respective and outstanding Loans, as
adjusted pursuant to such assignment.
-41-
9. MISCELLANEOUS.
9.1 Costs and Attorneys' Fees. All fees, costs and expenses
incurred by Agent in connection with the preparation, execution, delivery,
performance and administration of the Loan Documents, any and all
amendments, supplements and modifications thereof and the other instruments
and documents to be delivered hereunder in connection with any matters
contemplated by or arising out of this Agreement, whether (a) to commence,
defend any action commenced by any party other than Borrower, or intervene
in any litigation or to file a petition, complaint, answer, motion or other
pleadings, (b) to take any other action in or with respect to any suit or
proceedings (bankruptcy or otherwise), (c) to consult with officers of
Agent or to advise Agent or (d) to enforce any rights of the Banks to
collect any of the Obligations, including, without limitation, reasonable
fees, costs and expenses of Agent's attorneys and paralegals, the allocated
costs of Agent's internal counsel, together with interest thereon at the
rate equal to 2% above the highest Effective Rate hereunder, will be part
of the Obligations, payable on demand. Upon and during the continuance of
an Event of Default, Borrower shall reimburse each Bank for such Bank's
reasonable fees, costs and expenses incurred in connection with the
enforcement of this Agreement and the other Loan Documents. All of the
foregoing amounts may, at Agent's option, be charged as an Advance under
the Loan.
9.2 Waivers, Modifications in Writing. No failure or delay on the
part of Agent or any Bank in exercising any right, power or remedy
hereunder will operate as a waiver thereof, nor will any single or partial
exercise of any such right, power or remedy preclude any other or further
exercise thereof or the exercise of any other right, power or remedy. The
remedies provided for under this Agreement, in the Notes and in the other
Loan Documents are cumulative and are not exclusive of any remedies that
may be available to the Banks at law, in equity or otherwise. No
amendment, modification, supplement, termination, consent or waiver of or
to any provision of this Agreement, the Notes or the other Loan Documents,
nor any consent to any departure therefrom, will in any event be effective
unless the same will be in writing and signed by or on behalf of the Banks
and Borrower.
9.3 Notices, etc. All notices, demands, instructions and other
communications required or permitted to be given to or made upon any party
hereto will be in writing and (except for financial statements and other
related informational documents to be furnished pursuant hereto which may
be sent by first-class mail, postage prepaid), will be personally delivered
or sent by registered or certified mail, postage prepaid or sent by
nationally recognized overnight delivery service and, if mailed, will be
deemed to be received for purposes of this Agreement three (3) Business
Days after mailing by the sender or one (1) Business Day if sent by
overnight delivery service. Unless otherwise specified in a notice sent or
delivered in accordance with the foregoing provisions of this Section 9.3,
notices, demands, instruments and other communications in writing will be
given to or made upon the respective parties hereto as follows: if to
Agent, at Agent's Address, with a copy to Agent's Counsel; if to Borrower,
at Borrower's Address, with a copy to Borrower's Counsel and if to a Bank,
the address that appears on the signature page to this Credit Agreement.
-42-
9.4 Notice of Wrongful Act or Omission by Agent or Banks. No
action will be commenced by Borrower against Agent or any Bank arising out
of or attributable to any act or omission of Agent or any Bank unless a
notice specifically describing the act or omission will have been given to
Agent or such Bank thirty (30) days prior to such judicial action.
9.5 Agent's Failure to Advance. If Agent will be in breach of the
Banks' obligation under this Agreement by reason of failure to make an
Advance, notwithstanding Borrower's conformance with the provisions of
hereof, Borrower's sole remedies on account thereof will be:
(a) to compel Agent to make the Advance which is determined to have
been wrongfully withheld; and
(b) to recover actual and provable damages on account of such
breach, and neither Agent nor any Bank will ever be liable to Borrower for
consequential damages, whatever the nature of the breach by Agent or such
Bank hereunder.
9.6 Headings. Section headings used in this Agreement are for
convenience of reference only and will not constitute a part of this
Agreement for any other purpose or affect the construction of this
Agreement.
9.7 Execution in Counterparts. This Agreement may be executed in
counterparts and by different parties on separate counterparts, both of
which counterparts, when so executed and delivered, will be deemed to be an
original and both of which counterparts, taken together, will constitute
but one and the same agreement. This Agreement will become effective upon
the execution of a counterpart hereof by each of the parties hereto.
9.8 Binding Effect; Assignment. This Agreement will be binding
upon, and inure to the benefit of, Borrower and the Banks, and their
respective successors and assigns; provided, however, that Borrower may not
assign its rights hereunder or in connection herewith or any interest
herein (voluntarily, by operation of law or otherwise) without the prior
written consent of all of the Banks. This Agreement will not be construed
so as to confer any right or benefit upon any Person other than the parties
to this Agreement and each of their respective successors and assigns.
9.9 Severability of Provisions. Any provision of this Agreement
which is illegal, invalid, prohibited or unenforceable in any jurisdiction
will, as to such jurisdiction, be ineffective to the extent of such
illegality, invalidity, prohibition or unenforceability without
invalidating or impairing the remaining provisions hereof or affecting the
validity or enforceability of such provision in any other jurisdiction.
9.10 Changes in Accounting Principles. If any changes in
accounting principles from those used in the preparation of the financial
statements referred to in this Agreement are hereafter occasioned by the
promulgation of rules, regulations, pronouncements or opinions of or
required by the FASB or the American Institute of Certified Public
Accountants (or successors thereto or agencies with similar functions), or
there will occur any change in Borrower's fiscal or tax years and, as a
result of any such changes, there will result in a change in the method of
calculating any of the financial covenants, negative covenants, standards,
-43-
or other terms or conditions found in this Agreement, then the parties
hereto agree to enter into negotiations in order to amend such provisions
so as to equitably reflect such changes with the desired result that the
criteria for evaluating Borrower's financial condition will be the same
after such changes as if such changes had not been made.
9.11 Survival of Agreements; Representations, Warranties
Indemnities and Covenants. All agreements, representations, warranties,
indemnities and covenants made herein will survive the execution and
delivery of this Agreement, the making of the Loans hereunder and the
execution and delivery of the Notes.
9.12 Independence of Covenants. All covenants under this
Agreement will each be given independent effect so that if a particular
action or condition is not permitted by any such covenant, the fact that it
would be permitted by another covenant, by an exception thereto, or be
otherwise within the limitations thereof, will not avoid the occurrence of
an Event of Default or Unmatured Event of Default if such action is taken
or condition exists.
9.13 Construction of Agreement. Neither this Agreement nor any
uncertainty or ambiguity herein will be construed or resolved against any
Bank, whether under any rule of construction or otherwise. On the
contrary, this Agreement has been reviewed by each of the parties and their
counsel and will be construed and interpreted according to the ordinary
meaning of the words used so as to fairly accomplish the purposes and
intentions of all parties hereto.
9.14 Complete Agreement. This Agreement, together with the
exhibits and schedules to this Agreement, the Notes and the other Loan
Documents, and the other agreements referred to herein or by their terms
referring hereto, is intended by the parties as a final expression of their
agreement and is intended as a complete statement of the terms and
conditions of their agreement.
9.15 Equitable Relief. Borrower recognizes that, in the event
Borrower fails to perform, observe or discharge any of its Obligations
under this Agreement, any remedy at law may prove to be inadequate relief
to the Banks; therefore, Borrower agrees that the Banks will be entitled to
temporary and permanent injunctive relief in any such case without the
necessity of proving actual damages.
9.16 No Fiduciary Relationship. No provision herein or in any of
the other Loan Documents and no course of dealing between the parties will
be deemed to create any fiduciary duty by Agent or the Banks to Borrower.
9.17 Choice of Law. The validity of this Agreement, its
construction, interpretation and enforcement and the rights of the parties
hereto will be determined under, governed by and construed in accordance
with the internal laws of the State of Michigan, without regard to
principles of conflicts of law.
-44-
9.18 Venue; Jurisdiction. The parties agree that all actions or
proceedings arising in connection with this Agreement, the Loan Documents,
the letters of credit issued under this Agreement and the Loans may be
tried and litigated in the federal courts of the United States of the
Eastern District of Michigan. Borrower hereby irrevocably accepts for
itself and in respect of its property, generally and unconditionally, the
jurisdiction of such courts. Borrower irrevocably consents to the service
of process out of any such courts in any such action or proceeding by the
mailing of copies thereof by registered or certified mail, postage prepaid,
to Borrower, at its address set forth for notices in this Agreement, such
service to become effective ten (10) days after such mailing. Nothing
herein will affect the right of any Bank to serve process in any other
manner permitted by law. Borrower irrevocably waives any right it may have
to assert the doctrine of forum non conveniens or to object to venue to the
extent any proceeding is brought in accordance with this Section 9.18.
9.19 Other Waivers. Borrower hereby waives, to the extent
permitted by applicable law, in connection with a "claim and delivery"
action by any Bank or Agent on any Bank's behalf pursuant to Michigan Court
Rule 3.105, the right to request that a court require any Bank to post a
bond pursuant to Michigan Court Rule 3.105(E)(4)(c)(i).
9.20 Waivers Voluntary. The waivers contained in this Agreement
are freely, knowingly and voluntarily given by each party, without any
duress or coercion, after each party has had opportunity to consult with
its counsel and has carefully and completely read all of the terms and
provisions of this Agreement, specifically including the waivers contained
in this Section 9. Neither the Banks nor Borrower will be deemed to have
relinquished the waivers contained herein except by a writing signed by the
party to be charged with having relinquished any such waiver.
9.21 Waiver of Jury Trial. Banks and Borrower acknowledge and
agree that there may be a constitutional right to a jury trial in
connection with any claim, dispute or lawsuit arising between them, but
that such right may be waived. Accordingly, the parties agree that
notwithstanding such constitutional right, in this commercial matter the
parties believe and agree that it will be in their best interest to waive
such right, and accordingly, hereby waive such right to jury trial, and
further agree that the best forum for hearing any claim, dispute or
lawsuit, if any, arising in connection with this Agreement, any Loan
Document or the relationship between the Banks and Borrower, will be a
court of competent jurisdiction sitting without a jury.
BORROWER ACKNOWLEDGES THAT IT HAS BEEN ADVISED BY COUNSEL OF ITS
CHOICE WITH RESPECT TO THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED
HEREBY, AND BORROWER ACKNOWLEDGES AND AGREES THAT (a) EACH OF THE WAIVERS
SET FORTH HEREIN, WERE KNOWINGLY AND VOLUNTARILY MADE; (b) THE OBLIGATIONS
OF THE BANKS HEREUNDER, INCLUDING THE OBLIGATION TO ADVANCE AND LEND FUNDS
TO BORROWER IN ACCORDANCE HEREWITH, WILL BE STRICTLY CONSTRUED AND WILL BE
EXPRESSLY SUBJECT TO SUCH BORROWER'S COMPLIANCE IN ALL RESPECTS WITH THE
TERMS AND CONDITIONS HEREIN SET FORTH; AND (c) NO REPRESENTATIVE OF ANY
BANK HAS WAIVED OR MODIFIED ANY OF THE PROVISIONS OF THIS AGREEMENT AS OF
THE DATE HEREOF AND NO SUCH WAIVER OR MODIFICATION FOLLOWING THE DATE
HEREOF WILL BE EFFECTIVE UNLESS MADE IN ACCORDANCE WITH SECTION 9.2 HEREOF.
[PURPOSELESSLY LEFT BLANK - SIGNATURES ON FOLLOWING PAGES]
-45-
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed and delivered as of the date first hereinabove set forth.
WITNESS: "BORROWER"
XXXXXXX INDUSTRIES, INC.
By:
---------------------------------- -------------------------
Its:
---------------------------------- --------------------------
"BANKS"
WITNESS: MICHIGAN NATIONAL BANK, a national
banking association
By:
---------------------------------- -------------------------
Xxxxxx X. Xxxx
---------------------------------- Its: City Manager
Ratable Share: 20%
Line of Credit Commitment:
$40,000,000
Address for Notice:
000 Xxxxxxxx Xxxxxx
Xxxx Xxxxx, XX 00000-0000
Attn: Xxx Xxxx
City President
FIRST TENNESSEE
By:
---------------------------------- -------------------------
Its:
---------------------------------- --------------------------
Ratable Share: 12.5%
Line of Credit Commitment:
$25,000,000
Address for Notice:
X.X. Xxx 00
Xxxxxxx, XX 00000
Attn: Xxxxxx X. Xxxxxxxxx
Senior Vice President
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UNION PLANTERS BANK
By:
---------------------------------- -------------------------
Its:
---------------------------------- --------------------------
Ratable Share: 17.5%
Line of Credit Commitment:
$35,000,000
Address for Notice:
0000 Xxxxxx Xxxxxx, XX0
Xxxxxxx, XX 00000
Attn: Xxxx Xxxxxxxxxx
Assistant Vice President
SUN TRUST BANK
By:
---------------------------------- -------------------------
Its:
---------------------------------- --------------------------
Ratable Share: 17.5%
Line of Credit Commitment:
$35,000,000
Address for Notice:
0000 Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, XX 00000
Attn: Xxxxx X. Xxxx, CCM
Vice President
WACHOVIA BANK, N.A.
By:
---------------------------------- -------------------------
Its:
---------------------------------- --------------------------
Ratable Share: 12.5%
Line of Credit Commitment:
$25,000,000
Address for Service:
000 Xxxxxxxxx Xxxxxx XX
Xxxxxxx, XX 00000
Attn: Xxxxx X. Xxxx
Vice President
-47-
FIRST UNION
By:
---------------------------------- -------------------------
Its:
---------------------------------- --------------------------
Ratable Share: 20%
Line of Credit Commitment:
$40,000,000
Address for Notice:
TN1227
000 Xxxxxx Xxxxxx Xxxxx
Xxxxxxxxx, XX 00000
Attn: Xxxxxx Xxxxxxxx
Vice President
"AGENT"
MICHIGAN NATIONAL BANK, a national
banking association
By:
---------------------------------- -------------------------
Xxxxxx X. Xxxx
---------------------------------- Its: City Manager
-48-
EXHIBIT 2.3
LINE OF CREDIT NOTE
Amount: $
Due Date: November 30, 2003 Dated as of November 29, 2000
FOR VALUE RECEIVED, XXXXXXX INDUSTRIES, INC., a Delaware corporation
("Borrower") promises to pay to the order of ----------------------------
("Bank"), in immediately available United States funds, the principal sum
of ----------- MILLION ------------ HUNDRED THOUSAND and no/100
($ ) Dollars or such lesser sum as will have been advanced by Bank
to Borrower under this Note, pursuant to the terms of the Credit
Agreement dated as of November 29, 2000, as from time to time amended,
among Borrower, the Banks identified therein, and Michigan National Bank,
as Agent, (the "Credit Agreement"), plus interest, per annum, at the
Effective Rate (as hereafter defined). Except as otherwise defined herein,
all capitalized terms used herein shall have the meanings set forth in the
Credit Agreement, all of the terms and conditions of which are herein
incorporated by this reference.
This Note is one of the Line of Credit Notes referred to in the Credit
Agreement. Advances of principal, repayment, and readvances may be made
under the Credit Agreement and this Note from time to time as provided
therein, but the Bank may refuse to make advances or readvances during the
existence of any Event of Default or Unmatured Event of Default or when the
conditions precedent set forth in the Credit Agreement are not satisfied.
No individual Advance will have a maturity date beyond the Line of Credit
Maturity.
Advances under this Note shall bear interest as provided in the Credit
Agreement (each, an "Effective Rate").
Interest and principal shall be paid on the dates and in the manner
provided in the Credit Agreement. The outstanding principal balance of the
Line of Credit Loan, together with accrued interest, will be due and
payable in full at the Line of Credit Maturity.
Borrower may prepay, in whole or in part, but in an amount not less
than Ten Million Dollars ($10,000,000.00) at one (1) business day's notice,
without premium or penalty, any Alternate Base Rate Advances under this
Note at any time. Eurodollar Advances may only be prepaid at the end of an
Interest Period and in the manner provided in the Credit Agreement. If at
any time during the term of this Note, the Total Outstanding Amount will
exceed $200,000,000, Borrower will immediately, and in any event within two
(2) Business Days, remit and pay to Agent such amounts as may be necessary
to reduce the Total Outstanding Amount to $200,000,000.
All Advances will be charged to an account in Borrower's name on
Agent's books, and Agent will debit to such account the amount of each
Advance when made and credit to such account the amount of each repayment
thereunder. Agent will render Borrower, from time to time, a statement
setting forth the debit balance in the loan account, which will be deemed
to be correct and accepted by Borrower, unless Agent receives a written
statement of exceptions within ten (10) days after such statement has been
-49-
rendered to Borrower. Such statement will be prima facie evidence of the
correctness of the Advances owing to the Bank by Borrower hereunder, unless
there will be manifest error evident on its face. Similarly, each Bank is
hereby authorized by Borrower to record in its books and records, the date,
and amount and type of each Advance and the duration of the related
Interest Period (if applicable), the amount of each payment or prepayment
of principal thereon, which books and records shall constitute prima facie
evidence of the information so recorded, provided, however, that failure of
any Bank to record, or any error in recording, any such information shall
not relieve Borrower of its obligation to repay the outstanding principal
amounts of the Loan, all accrued interest thereon and other amounts payable
with respect thereto in accordance with the terms of this Note and the
Credit Agreement.
Both principal and interest are payable in immediately available
United States funds to the Agent on behalf of the Bank at 000 Xxxxxxxx
Xxxxxx, Xxxx Xxxxx, Xxxxxxxx 00000, Attention: Xxxxxx X. Xxxx, or at such
other address as Agent may hereto specify to Borrower in writing.
Interest will be calculated on a daily, outstanding balance basis and
will be computed for the actual number of days elapsed on the basis of a
360 day year. At no time will the interest charged hereunder be greater
than the Maximum Rate. Payments received by Agent which would otherwise
cause said interest rate to exceed such Maximum Rate will, to the extent of
such excess, be deemed principal payments.
During the existence of any Event of Default, or after the Line of
Credit Maturity, or after demand or acceleration of maturity, Borrower will
be obligated to Bank and will pay Bank, in addition to the interest stated
above, additional interest which will accrue at a default rate equal to two
percent (2%) per annum of the outstanding principal balance hereof and
which will be reflected in the statement of account sent to Borrower prior
to each payment date.
If any required installment is not paid within ten (10) days after the
date the same is due, upon Agent's demand Borrower will forthwith pay Bank
a late charge equal to 5 cents ($.05) for each dollar of the installment so
overdue. The late charge will apply individually to all payments past due,
and there will be no daily pro rata adjustment.
Any other provision of the Credit Agreement or any other Loan Document
to the contrary notwithstanding, Borrower hereby grants Bank a right to set
off and apply any and all deposits (general or special, time or demand,
provisional or final) at any time held and other indebtedness at any time
owing by Bank to or for the credit or the account of Borrower, against any
and all the obligations of Borrower, now or hereafter existing under any
Loan Document. Borrower agrees to pay all of Agent's costs incurred in the
collection of this Note, including reasonable attorneys' fees.
Acceptance by Bank of any payment in an amount less than the amount
then due will be deemed an acceptance on account only, and Borrower's
failure to pay the entire amount then due will be and continue to be an
event of default. Borrower waives presentment for payment, demand, notice
of non-payment, notice of protest or protest of this Note. The liability
of Borrower under this Note will be absolute and unconditional, without
regard to the liability of any other party.
-50-
Borrower expressly assumes all risk of loss or delay in the delivery
of any payments by mail, and no course of conduct or dealing will affect
Borrower's assumption of these risks.
Upon any occurrence of an Event of Default as defined in the Credit
Agreement ("Event of Default"), Bank may, without further notice and
without demand or presentation, declare the entire unpaid principal balance
hereunder and all accrued interest, to be immediately due and payable,
anything contained herein or in any document executed in connection
herewith to the contrary notwithstanding.
Upon the occurrence of an Event of Default, neither the failure of the
Bank promptly to exercise its right to declare the outstanding principal
and accrued and unpaid interest hereunder to be immediately due and
payable, nor failure to exercise any other right or remedy the Bank may
have upon default, nor the acceptance by the Bank of late payments, nor the
failure of the Bank to demand strict performance of any obligation of
Borrower or of any other person who may be liable hereunder, will
constitute a waiver of any such rights in connection with any future Event
of Default.
Bank may hold and apply at any time after an Event of Default its own
indebtedness or liability to Borrower in payment of any indebtedness
hereunder.
Borrower and all endorsers, sureties and guarantors hereof, hereby
jointly and severally waive presentment for payment, notice of non payment,
notice of protest or protest of this Note, diligence in collection or
bringing suit, and hereby consent to any and all extensions of time,
renewals, waivers, or modifications that may be granted by Bank with
respect to payment or any other provisions of this Note, and to the release
of any collateral or any part thereof, with or without substitution and
hereby waive any and all defenses of a surety. The liability of Borrower
will be absolute and unconditional, without regard to the liability of any
other party hereto.
Borrower, and any other person who may be liable hereunder in any
capacity, agrees to pay all reasonable costs of collection, including
reasonable attorney's fees and expenses, in case the principal on this Note
or any payment of interest hereon is not paid on the respective dates due
(whether by demand, maturity, acceleration or otherwise), or in case it
becomes necessary to protect any security for this Note, whether suit is
brought or not.
Any default in any of the conditions, covenants, obligations or
agreements contained in any of the Loan Documents or any other instruments
securing and/or evidencing this indebtedness will constitute an Event of
Default under this Note. Reference is hereby made to the agreement(s) and
document(s) described above for additional terms and conditions relating to
this Note.
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This Note, made in the State of Michigan, will be governed and
construed according to the laws of the State of Michigan.
WITNESS: XXXXXXX INDUSTRIES, INC.
By:
---------------------------------- -------------------------
---------------------------------- Its: Vice President
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