1
EXHIBIT 4(b)
==========================================================================
CREDIT AGREEMENT
DATED AS OF
DECEMBER 18, 1995
AMONG
THE XXXXX GROUP INC.,
XXXXX TECHNOLOGIES, INC.,
THE BANKS PARTY HERETO,
AND
BANK OF MONTREAL,
AS AGENT
==========================================================================
2
TABLE OF CONTENTS
(THIS TABLE OF CONTENTS IS NOT PART OF THE AGREEMENT)
Page
SECTION 1. THE REVOLVING CREDIT FACILITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.1. Borrowings under the Revolving Credit . . . . . . . . . . . . . . . . . 1
Section 1.2. Letters of Credit . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.3. Applicable Interest Rates . . . . . . . . . . . . . . . . . . . . . . . 5
Section 1.4. Minimum Borrowing Amounts . . . . . . . . . . . . . . . . . . . . . . . 8
Section 1.5. Manner of Borrowing . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 1.6. Interest Periods . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 1.7. Maturity of Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 1.8. Optional Prepayments . . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 1.9. Default Rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 1.10. The Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 1.11. Funding Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 1.12. Optional Commitment Terminations . . . . . . . . . . . . . . . . . . . 12
SECTION 2. FEES AND EXTENSIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 2.1. Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 2.2. Extension of Termination Date. . . . . . . . . . . . . . . . . . . . . 13
SECTION 3. PLACE AND APPLICATION OF PAYMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 3.1. Place and Application of Payments . . . . . . . . . . . . . . . . . . . 14
SECTION 4. DEFINITIONS; INTERPRETATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 4.1. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 4.2. Interpretation . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 5. REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Section 5.1. Corporate Organization and Authority . . . . . . . . . . . . . . . . . 26
Section 5.2. Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Section 5.3. Corporate Authority and Validity of Obligations . . . . . . . . . . . . 27
Section 5.4. Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . 27
Section 5.5. No Material Adverse Change . . . . . . . . . . . . . . . . . . . . . . 28
Section 5.6. No Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Section 5.7. Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Section 5.8. Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Section 5.9. ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Section 5.10. Not an Investment Company . . . . . . . . . . . . . . . . . . . . . . . 28
-i-
3
Section 5.11. Margin Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Section 5.12. Compliance with Environmental Laws . . . . . . . . . . . . . . . . . . . 29
Section 5.13. Ownership of Property; Liens . . . . . . . . . . . . . . . . . . . . . . 29
Section 5.14. No Burdensome Restrictions . . . . . . . . . . . . . . . . . . . . . . . 30
Section 5.15. Long Term Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 6. CONDITIONS PRECEDENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Section 6.1. Initial Credit Event . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Section 6.2. All Credit Events . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
SECTION 7. COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Section 7.1. Corporate Existence . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Section 7.2. Maintenance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Section 7.3. Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Section 7.4. ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Section 7.5. Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Section 7.6. Financial Reports and Other Information . . . . . . . . . . . . . . . . . 33
Section 7.7. Change of Control . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Section 7.8. Conduct of Business . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Section 7.9. Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Section 7.10. Compliance with Laws . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Section 7.11. Regulation U . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Section 7.12. Notice of Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Section 7.13. Mergers, Consolidations and Sales of Assets . . . . . . . . . . . . . . . 37
Section 7.14. Use of Property and Facilities . . . . . . . . . . . . . . . . . . . . . 38
Section 7.15. Fixed Charge Coverage Ratio . . . . . . . . . . . . . . . . . . . . . . . 39
Section 7.16. Consolidated Tangible Net Worth . . . . . . . . . . . . . . . . . . . . . 39
Section 7.17. Adjusted Consolidated Net Worth. . . . . . . . . . . . . . . . . . . . . 39
Section 7.18. Funded Debt to Cash Flow Ratios . . . . . . . . . . . . . . . . . . . . . 39
Section 7.19. Restricted Investments and Contingent Obligations . . . . . . . . . . . . 39
Section 7.20. Investments in XXXXX. . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Section 7.21. Subsidiary Debt. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
SECTION 8. EVENTS OF DEFAULT AND REMEDIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Section 8.1. Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Section 8.2. Non-Bankruptcy Defaults . . . . . . . . . . . . . . . . . . . . . . . . . 42
Section 8.3. Bankruptcy Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
Section 8.4. Collateral for Undrawn Letters of Credit . . . . . . . . . . . . . . . . 43
Section 8.5. Bond Letters of Credit. . . . . . . . . . . . . . . . . . . . . . . . . . 44
Section 8.6. Notice of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
Section 8.7. Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
SECTION 9. CHANGE IN CIRCUMSTANCES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
Section 9.1. Change of Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
-ii-
4
Section 9.2. Unavailability of Deposits or
Inability to Ascertain, or Inadequacy of, LIBOR . . . . . . . . . . . . . . . . . . . . . 45
Section 9.3. Increased Cost and Reduced Return . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Section 9.4. Lending Offices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
Section 9.5. Discretion of Bank as to Manner of Funding . . . . . . . . . . . . . . . . . . . . . . . 47
SECTION 10. THE AGENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
Section 10.1. Appointment and Authorization of Agent . . . . . . . . . . . . . . . . . . . . . . . . . 48
Section 10.2. Agent and Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
Section 10.3. Action by Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
Section 10.4. Consultation with Experts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
Section 10.5. Liability of Agent and Issuing Bank; Credit Decision . . . . . . . . . . . . . . . . . . 48
Section 10.6. Costs and Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
Section 10.7. Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
Section 10.8. Resignation of Agent and Successor Agent . . . . . . . . . . . . . . . . . . . . . . . . 49
SECTION 11. XXXXX GROUP GUARANTEE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
Section 11.1. The Guarantee. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
Section 11.2. Guarantee Unconditional. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
Section 11.3. Discharge Only Upon Payment in Full . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
Section 11.4. Waivers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
Section 11.5. Stay of Acceleration. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
Section 11.6. Removal of XXXXX . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
SECTION 12. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
Section 12.1. Withholding Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
Section 12.2. No Waiver of Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
Section 12.3. Non-Business Day . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
Section 12.4. Documentary Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
Section 12.5. Survival of Representations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
Section 12.6. Survival of Indemnities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
Section 12.7. Sharing of Set-Off . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
Section 12.8. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
Section 12.9. Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
Section 12.10. Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
Section 12.11. Participants and Note Assignees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
Section 12.12. Assignment of Commitments by Banks . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
Section 12.13. Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
Section 12.14. Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
Section 12.15. Legal Fees and Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
Section 12.16. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
Section 12.17. Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
Section 12.18. Termination of 1994 Credit Agreement and XXXXX Loan Facilities . . . . . . . . . . . . . 58
-iii-
5
Section 12.19. Nature of Borrower Obligations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
Signature Pages . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
EXHIBITS
Exhibit A - Form of Notice of Payment Request
Exhibit B - Form of Note
Exhibit C - Form of Opinion of Counsel to Borrower
Exhibit D - Form of Compliance Certificate
Schedule 1.2(c) - Schedule of Bond Letters of Credit
Schedule 5.2 - Schedule of Subsidiaries
Schedule 5.7 - Schedule of Taxes
Schedule 5.12 - Schedule of Environmental Notices
Schedule 5.15 - Schedule of Outstanding Long Term Debt
Schedule 7.9 - Schedule of Outstanding Liens
Schedule 7.19 - Schedule of Restricted Investments
Appendix I - Form of Standby Letter of Credit Application
Appendix II - Form of Commercial Letter of Credit Application
-iv-
6
CREDIT AGREEMENT
To each of the Banks signatory hereto
Ladies and Gentlemen:
The undersigned, The Xxxxx Group Inc., a Delaware corporation ("Xxxxx
Group") and XXXXX Technologies, Inc., a Delaware corporation ("XXXXX")
(collectively Xxxxx Group and XXXXX are hereinafter sometimes referred to as
the "Borrowers" and individually each is sometimes referred to as a "Borrower")
apply to you for your several commitments, subject to all the terms and
conditions hereof and on the basis of the representations and warranties
hereinafter set forth, to make available a revolving credit providing for loans
and letters of credit as described herein. Each of you and your assigns
pursuant to Section 12.12 is hereinafter referred to as a "Bank" and Bank of
Montreal, in its capacity as agent for the Banks and any successor pursuant to
Section 10.8, is referred to as the "Agent". Bank of America Illinois is the
"Co-Agent" hereunder.
SECTION 1. THE REVOLVING CREDIT FACILITY.
Section 1.1. Borrowings under the Revolving Credit. Subject to
the terms and conditions hereof, each Bank, by its acceptance hereof, severally
agrees to make a loan or loans (individually a "Loan" and collectively "Loans")
from time to time on a revolving basis to (i) Xxxxx Group in the amount of its
revolving commitment to Xxxxx Group (the "Xxxxx Group Revolving Commitment")
and (ii) to XXXXX in the amount of its revolving commitment to XXXXX (the
"XXXXX Revolving Commitment"), in each case as set forth on the applicable
signature page hereof or pursuant to Section 12.12, subject to any reductions
thereof pursuant to the terms hereof, prior to the Termination Date. The Xxxxx
Group Revolving Commitment and the XXXXX Revolving Commitment each is
hereinafter sometimes referred to individually as a "Commitment" to such
Borrower and collectively with each other Bank's as the "Commitments" to such
Borrower. Each Borrowing of Loans by a Borrower shall be made ratably from the
Banks in proportion to their respective Commitments to such Borrower (for each
Bank its "Percentage"). Each Bank's Percentage of the Xxxxx Group Revolving
Commitment shall at all times be the same as its Percentage of the XXXXX
Revolving Commitment. A Borrower may elect that each Borrowing by it be made
available by means of either Domestic Rate Loans or Eurodollar Loans, which
Loans may be repaid and the principal amount thereof reborrowed prior to the
Termination Date, subject to all the terms and conditions hereof.
Section 1.2. Letters of Credit. (a) Revolving Credit. Subject
to all of the terms and conditions hereof, Xxxxx Group may avail itself of the
Xxxxx Group Revolving Commitments through letters of credit (the "Revolver
Letters of Credit") issued by Bank of America Illinois (in such capacity as
issuer of Revolver Letters of Credit, the "Revolver Issuer") for Xxxxx Group's
account, provided that the aggregate outstanding undrawn face amount of
Revolver Letters of Credit shall not at any time exceed $20,000,000. Each
Revolver Letter of Credit shall be issued by the Revolver Issuer, but each Bank
shall be obligated to
7
reimburse the Revolver Issuer for its Percentage of the amount of each draft
drawn thereunder and, accordingly, the face amount of each Revolver Letter of
Credit shall be deemed to utilize the Xxxxx Group Revolver Commitments of all
Banks pro rata based on each Bank's Percentage. No Revolver Letter of Credit
shall have an expiration date after the Termination Date (and no time draft
eligible to be presented for acceptance, or other payment undertaking eligible
to be incurred, under a Revolver Letter of Credit may have a maturity date
later than the Termination Date). In the event the Revolver Issuer issues a
Revolver Letter of Credit with an expiration date that automatically extends
unless the Revolver Issuer gives notice that the expiration date will not so
extend beyond such Revolver Letter of Credit's then scheduled expiration date,
the Revolver Issuer will give such notice of non-renewal before the time
necessary to prevent such automatic extension if before such required notice
date (i) the expiration date of such Revolver Letter of Credit if so extended
would be after the Termination Date, (ii) the Commitments have been terminated,
or (iii) an Event of Default exists and the Required Banks have given the
Revolver Issuer instructions not to so permit the extension of the expiration
date of such Revolver Letter of Credit. At least thirty (30) days before the
date on which the Revolver Issuer is required to give notice of the non-renewal
of such a Revolver Letter of Credit in order to prevent its automatic
extension, the Revolver Issuer shall give notice to the Agent of such
circumstance and the Agent shall promptly notify each Bank thereof.
(b) Applications for Revolver Letters of Credit. At any time
before the Termination Date, the Revolver Issuer agrees that at Xxxxx Group's
request it shall issue one or more Revolver Letters of Credit, in a form
satisfactory to the Revolver Issuer, with expiration dates no later than the
Termination Date, in an aggregate face amount as set forth above, upon the
receipt of a duly executed application for the relevant Revolver Letter of
Credit in the form customarily prescribed by the Revolver Issuer for a letter
of credit of the type, whether standby or commercial, requested (each an
"Application"). The current forms of the Revolver Issuer's Applications are
attached as Appendices I and II hereto. The Revolver Issuer shall provide
Xxxxx Group and the other Banks with copies of any new forms of Applications
that may, from time to time, be adopted by the Revolver Issuer.
Notwithstanding anything contained in any Application to the contrary (i) Xxxxx
Group shall pay fees in connection with each Revolver Letter of Credit as set
forth in Section 2.1(b) hereof, (ii) prior to the occurrence of an Event of
Default, neither the Revolver Issuer nor the Agent will call for the funding by
Xxxxx Group of any amount under a Revolver Letter of Credit, or any other
collateral security for obligations of Xxxxx Group under an Application, prior
to being presented with a drawing thereunder, (iii) upon the termination of the
Commitments to Xxxxx Group, the full amount then available for drawing under
all outstanding Revolver Letters of Credit shall be immediately due and payable
in the manner described in Section 8.4 hereof, and (iv) in the event the
Revolver Issuer is not timely reimbursed for the amount of any drawing under a
Revolver Letter of Credit on the date such drawing is paid, Xxxxx Group's
obligation to reimburse the Revolver Issuer for the amount of such drawing
shall bear interest (which Xxxxx Group hereby promises to pay) from and after
the date such drawing is paid at a rate per annum equal to the rate set forth
in Section 1.9(a) hereof. The Revolver Issuer also agrees to issue amendments
to its Revolver Letter(s) of Credit increasing the amount, or extending the
expiration date, thereof at Xxxxx Group's request subject to the conditions of
Section 6 and the other terms of this
-2-
8
Section 1.2. Before issuing, or increasing the amount of, any Revolver Letter
of Credit under this Section 1.2 the Revolver Issuer shall notify the Agent of
the proposed amount of the Revolver Letter of Credit, or of the proposed
increase thereof, and the Agent shall determine and notify the Revolver Issuer
whether such amount would exceed any restriction on the aggregate face amount
of Revolver Letters of Credit set forth in Section 6.2(d) or (e) hereof.
(c) Bond Letters of Credit. Dresdner Bank AG, New York Branch (in
such capacity, the "Bond Letter of Credit Issuer") has issued and has
outstanding three (3) separate letters of credit (the "Bond Letters of Credit"
and each individually a "Bond Letter of Credit") in the aggregate face amount
of $12,355,069 to support payments on certain industrial revenue bonds, as more
fully identified on Schedule 1.2(c) hereto. Each Bank agrees to participate in
such outstanding Bond Letters of Credit in accordance with its Percentage on
the terms applicable to participations in Revolver Letters of Credit hereunder.
Except to the extent inconsistent with the terms hereof (in which case the
inconsistent terms herein shall govern), the provisions of the three (3)
Reimbursement Agreements applicable to such Letters of Credit, as identified on
Schedule 1.2(c) hereto, shall continue to govern such Bond Letters of Credit.
Notwithstanding anything to the contrary in any Reimbursement Agreement, the
fees payable in connection with each Bond Letter of Credit to be shared with
the Banks shall accrue from the date hereof at the rate provided in Section
2.1(b) hereof. "Bond Letters of Credit" and "Revolver Letters of Credit" are
collectively hereinafter sometimes referred to as "Letters of Credit" and each
is hereinafter sometimes referred to as a "Letter of Credit".
(d) Xxxxx Group's Reimbursement Obligations. Subject to Section
1.2(b) and (c) hereof, the obligation of Xxxxx Group to reimburse the Revolver
Issuer or Bond Letter of Credit Issuer (each an "Issuing Bank"), as applicable,
for all drawings under a Letter of Credit it has issued (a "Reimbursement
Obligation") shall be governed by the Application or Reimbursement Agreement,
as applicable, for such Letter of Credit except that reimbursement of drawings
under the Revolver Letters of Credit shall be made to the Agent, not the
Revolver Issuer, by no later than 12:00 Noon (Chicago time) on the date when
such drawing is paid in immediately available funds at the Agent's principal
office in Chicago, Illinois, and the Agent shall promptly thereafter remit such
payment in like funds as received to the Revolver Issuer. If Xxxxx Group does
not make any such reimbursement payment on the date due and the Participating
Banks fund their participations therein in the manner set forth in Section
1.2(e) below, then all payments thereafter received by the Agent in discharge
of any of the relevant Reimbursement Obligations shall be distributed ratably
to each Bank hereunder in accordance with its Percentage. The Bond Letter of
Credit Issuer will notify the Agent no later than the Business Day after the
due date of any Reimbursement Obligation if it has not received payment of such
Reimbursement Obligation and promptly after it becomes aware of any other
"default" or "event of default" under a Reimbursement Agreement. The Agent
shall promptly forward to each Bank any such notice it receives from the Bond
Letter of Credit Issuer.
Xxxxx Group's reimbursement obligations under this Section 1.2(d) and
each Application and Reimbursement Agreement shall be absolute, unconditional
and irrevocable,
-3-
9
and shall be performed strictly in accordance with the terms of this Agreement,
the Applications, and the Reimbursement Agreements, under all circumstances
whatsoever, including without limitation the following circumstances:
(i) any lack of validity or enforceability of any L/C
Document;
(ii) the existence of any claim, set-off, defense or other
right that Xxxxx Group may have at any time against a beneficiary of a
Letter of Credit (or any Person for whom such a beneficiary may be
acting), the Agent, the Issuing Bank, any other Bank or any other
Person, whether in connection with this Agreement, another L/C
Document or any unrelated transaction;
(iii) any statement or any other document presented under a
Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or
inaccurate in any respect whatsoever;
(iv) payment by the Issuing Bank under a Letter of Credit
against presentation to the Issuing Bank of a draft or certificate
that does not comply with the terms of the Letter of Credit, provided
that the Issuing Bank's determination that documents presented under
the Letter of Credit comply with the terms thereof shall not have
constituted gross negligence or willful misconduct of the Issuing
Bank; or
(v) any other act or omission to act or delay of any kind
by the Agent, the Issuing Bank, any other Bank or any other Person or
any other event or circumstance whatsoever that might, but for the
provisions of this Section 1.2(d), constitute a legal or equitable
discharge of Xxxxx Group's obligations hereunder.
(e) The Participating Interests. Each Bank (other than the
relevant Issuing Bank), by its acceptance hereof, severally agrees to purchase
from each Issuing Bank, and each Issuing Bank hereby agrees to sell to each
such Bank (a "Participating Bank"), an undivided percentage participating
interest, to the extent of its Percentage, in each Letter of Credit issued by,
and Reimbursement Obligation owed to, such Issuing Bank. Upon any failure by
Xxxxx Group to pay any Reimbursement Obligation at the time required on the
date the related drawing is paid, as set forth in Section 1.2(d) above, or in
the event the Issuing Bank is required at any time to return to Xxxxx Group or
to a trustee, receiver, liquidator, custodian or other similar official any
portion of any payment by Xxxxx Group of any Reimbursement Obligation, each
Participating Bank shall, not later than the Business Day it receives a
certificate in the form of Exhibit A hereto from the Issuing Bank (given
directly or through the Agent) to such effect, if such certificate is received
before 1:00 P.M. (Chicago time), or not later than the following Business Day,
if such certificate is received after such time, pay to the Agent for the
account of the Issuing Bank an amount equal to its Percentage of such unpaid or
recaptured Reimbursement Obligation together with interest on such amount
accrued from the date the related payment was made by the Issuing Bank to the
date of such payment by such Participating Bank at a rate per annum equal to
(i) from the date the related payment was made by the Issuing Bank to the date
two (2) Business Days after payment by such Participating Bank is due
hereunder, the Federal Funds Rate for each
-4-
10
such day and (ii) from the date two (2) Business Days after such payment is due
from such Participating Bank to the date such payment is made by such
Participating Bank, the Domestic Rate in effect for each such day. Each such
Participating Bank shall thereafter be entitled to receive its Percentage of
each payment received in respect of the relevant Reimbursement Obligation and
of interest paid thereon, with the Issuing Bank retaining its Percentage.
The several obligations of the Participating Banks to each Issuing
Bank under this Section 1.2 shall be absolute, irrevocable and unconditional
under any and all circumstances whatsoever (except, without limiting Xxxxx
Group's unconditional obligation under Section 1.2(d) to pay all Reimbursement
Obligations, to the extent the gross negligence or willful misconduct of the
relevant Issuing Bank relieves Xxxxx Group of its obligation to pay a
Reimbursement Obligation) and shall not be subject to any set-off, counterclaim
or defense to payment which any Participating Bank may have or have had against
the Borrower, the Issuing Bank, any other Bank or any other Person whatsoever.
Without limiting the generality of the foregoing, such obligations shall not be
affected by any Default or Event of Default or by any reduction or termination
of any Commitment of any Bank and each payment by a Participating Bank under
this Section 1.2 shall be made without any offset, abatement, withholding or
reduction whatsoever. The Agent shall be entitled to offset amounts received
for the account of Banks under this Agreement against unpaid amounts due from
Banks hereunder (whether as fundings of participations, indemnities or
otherwise) but shall not be entitled to offset against amounts owed to the
Agent by any Bank arising outside this Agreement.
(f) Indemnification. The Participating Banks shall, to the extent
of their respective Percentages, indemnify each Issuing Bank (to the extent not
reimbursed by Xxxxx Group) against any cost, expense (including counsel fees
and disbursements), claim, demand, action, loss or liability (except such as
result from the Issuing Bank's gross negligence or willful misconduct) that the
Issuing Bank may suffer or incur in connection with any Letter of Credit. The
obligations of the Participating Banks under this Section 1.2(f) and all other
parts of this Section 1.2 shall survive the termination of this Agreement and
of any relevant Application or Reimbursement Agreement.
Section 1.3. Applicable Interest Rates. (a) Domestic Rate
Loans. Each Domestic Rate Loan made by a Bank shall bear interest (computed on
the basis of a year of 365 or 366 days, as the case may be, and actual days
elapsed) each day on the unpaid principal amount thereof from the date such
Loan is made until maturity (whether by acceleration or otherwise) at a rate
per annum equal to the Domestic Rate applicable for such day, payable on the
last day of the applicable Interest Period and at maturity (whether by
acceleration or otherwise).
"Domestic Rate" means for any day the greater of:
(i) the rate of interest then most recently announced by Bank of
America Illinois at Chicago, Illinois as its reference rate, with any change in
the Domestic Rate resulting from a
-5-
11
change in said announced reference rate to be effective as of the date of the
relevant change in said reference rate; and
(ii) the sum of (x) the rate per annum (rounded upward, if
necessary, to the nearest 1/100th of 1%) equal to the weighted average of the
rates on overnight Federal funds transactions with member banks 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 such day is not a Business Day, the rate for such day
shall be such rate on such transactions on the immediately preceding Business
Day as so published on the next succeeding Business Day, and (ii) if no such
rate is so published on any such next succeeding Business Day, the rate for
such day shall be the average of the rates quoted to the Agent by two or more
New York or Chicago Federal funds brokers on such day for such transactions as
determined by the Agent, plus (y) 1/2 of 1% (0.50%).
(b) Eurodollar Loans. Each Eurodollar Loan made by a Bank shall
bear interest (computed on the basis of a year of 360 days and actual days
elapsed) each day on the unpaid principal amount thereof from the date such
Loan is made until maturity (whether by acceleration or otherwise) at a rate
per annum equal to the sum of the Eurodollar Margin plus the Adjusted LIBOR
applicable to such Loan, payable on the last day of the applicable Interest
Period and at maturity (whether by acceleration or otherwise), and, if the
applicable Interest Period is longer than three months, on the date occurring
every three months after the date such Loan is made.
"Adjusted LIBOR" means a rate per annum (rounded upward, if necessary,
to the nearest 1/100 of 1%) determined in accordance with the following
formula:
LIBOR
------------------------------------
Adjusted LIBOR = 100% - Eurodollar Reserve Percentage
"LIBOR" means, with respect to an Interest Period for a Borrowing of
Eurodollar Loans, the rate of interest per annum, as determined by the Agent
(rounded upwards, if necessary, to the nearest whole multiple of 1/16 of 1%),
at which deposits of United States Dollars in immediately available and freely
transferable funds are offered to the Agent at 11:00 A.M. (London, England
time) two Business Days prior to the commencement of such Interest Period by
major banks in the interbank eurodollar market for a period equal to such
Interest Period and in an amount approximately equal to the principal amount of
the Eurodollar Loan scheduled to be made by the Agent as part of such
Borrowing.
"Eurodollar Reserve Percentage" means, for an Interest Period for a
Borrowing of Eurodollar Loans, the daily average of the maximum rate at which
reserves, if any, (including, without limitation, any supplemental, marginal
and emergency reserves) are imposed during such Interest Period by the Board of
Governors of the Federal Reserve System (or any successor) on "eurocurrency
liabilities", as defined in such Board's Regulation D (or in respect of any
other category of liabilities that includes deposits by reference to which the
interest rate on Eurodollar Loans is determined or any category of
-6-
12
extension of credit or other assets that include loans by non-United States
offices of any Bank to United States residents), subject to any amendments of
such reserve requirement by such Board or its successor, taking into account
any transitional adjustments thereto. For purposes of this definition, the
Eurodollar Loans shall be deemed to be eurocurrency liabilities as defined in
Regulation D without benefit or credit for any prorations, exemptions or
offsets under Regulation D.
"Eurodollar Margin" means, until the first Pricing Change Date occurs,
0.375% per annum and, thereafter, from one Pricing Change Date (the "Pricing
Date") to the next a rate per annum determined based on the Non-XXXXX Funded
Debt to Cash Flow Ratio and the Total Funded Debt to Cash Flow Ratio for such
Pricing Date in accordance with the following schedule:
Debt to Cash Flow
-----------------
Tests for such Pricing Date: Eurodollar Margin:
--------------------------- -----------------
Level I. Non-XXXXX Funded Debt
-------
to Cash Flow Ratio less than 1.00 to 1.00
and Total Funded Debt to Cash Flow Ratio
---
less than 1.50 to 1.00 0.25%
Level II. Level I not achieved, but Non-XXXXX
--------
Funded Debt to Cash Flow Ratio less
than 2.00 to 1.00 and Total Funded Debt to
---
Cash Flow Ratio less than 3.50 to 1.00 0.375%
Level III. Levels I and II not achieved,
---------
but Non-XXXXX Funded Debt
to Cash Flow Ratio less than 3.00 to 1.00
and Total Funded Debt to Cash Flow Ratio
---
less than 4.50 to 1.00 0.55%
Level IV. Levels I, II and III not achieved,
--------
but Non-XXXXX Funded Debt to Cash Flow
Ratio less than 4.00 to 1.00 and Total Funded
---
Debt to Cash Flow Ratio less than 5.50 to 1.00 1.00%
Level V. None of Levels I-IV achieved. 1.50%
-------
(c) Rate Determinations. The Agent shall determine each interest
rate applicable to the Loans hereunder, and its determination thereof shall be
conclusive and binding except in the case of manifest error or willful
misconduct. Bank of America Illinois shall notify the Agent of all changes in
its reference rate described in clause (i) of the definition of Domestic Rate.
-7-
13
Section 1.4. Minimum Borrowing Amounts. Each Borrowing of
Domestic Rate Loans shall be in an amount not less than $1,000,000, or any
larger amount that is an integral multiple of $100,000, and each Borrowing of
Eurodollar Loans shall be in an amount not less than $5,000,000, or any larger
amount that is an integral multiple of $500,000.
Section 1.5. Manner of Borrowing. (a) Notice to the Agent. The
relevant Borrower shall give telephonic, telex or telecopy notice to the Agent
(which notice shall be irrevocable once given and, if by telephone, shall be
promptly confirmed in writing) (i) by no later than 2:00 P.M. (Chicago time) on
the date at least three (3) Business Days prior to the date of each requested
Borrowing of Eurodollar Loans, and (ii) by no later than 9:00 A.M. (Chicago
time) on the date of each requested Borrowing of Domestic Rate Loans. Each
such notice from a Borrower shall specify the date of the requested Borrowing
(which shall be a Business Day), the amount of the requested Borrowing, the
type of Loans to comprise such Borrowing, and, if such Borrowing is to be
comprised of Eurodollar Loans, the Interest Period selected by the Borrower to
be applicable thereto. Each Borrower agrees that the Agent may rely on any
such telephonic, telex or telecopy notice given by any person it in good faith
believes is an Authorized Representative without the necessity of independent
investigation and, in the event any notice by such means conflicts with the
written confirmation, such notice shall govern if the Agent has acted in
reliance thereon.
(b) Notice to the Banks. The Agent shall give prompt telephonic,
telex or telecopy notice to each of the Banks of any borrowing request received
pursuant to Section 1.5(a) above and, if such notice requests the Banks to make
Eurodollar Loans, the Agent shall give notice to the relevant Borrower and each
of the Banks by like means of the interest rate applicable thereto (but, if
such notice is given by telephone, the Agent shall confirm such rate in
writing) promptly after the Agent has made such determination.
(c) Borrower's Failure to Notify. In the event a Borrower fails
to give notice pursuant to Section 1.5(a) above of the reborrowing of the
principal amount of any maturing Borrowing or, in the case of Xxxxx Group, of a
Borrowing equal to the amount of a Reimbursement Obligation owed on a Revolver
Letter of Credit and has not notified the Agent by 10:00 A.M. (Chicago time) on
the day such Borrowing matures or such Reimbursement Obligation becomes due
that it intends to repay such Borrowing or pay such Reimbursement Obligation
through funds not borrowed under this Agreement, the relevant Borrower shall be
deemed to have requested a Borrowing of Domestic Rate Loans on such day in the
amount of the maturing Borrowing of Loans or of the Reimbursement Obligation
then due, subject to Section 6.2 hereof, which Borrowing shall be applied to
pay the maturing Borrowing or the Reimbursement Obligation then due. The Agent
shall give prompt telephonic, telex or telecopy notice to each Bank of any such
deemed borrowing request.
(d) Disbursement of Loans. Not later than 12:00 noon (Chicago
time) on the date of any Borrowing of Loans, subject to Section 6 hereof, each
Bank shall make available its Loan in funds immediately available in Chicago,
Illinois at the principal office of the Agent, except to the extent such
Borrowing is a reborrowing, in whole or in part, of the principal
-8-
14
amount of a maturing Borrowing of Loans (a "Refunding Borrowing"), in which
case each Bank shall record the Loan made by it as a part of such Refunding
Borrowing on its books and records or on a schedule to its appropriate Note, as
provided in Section 1.10(b) hereof, and shall effect the repayment, in whole or
in part, as appropriate, of its maturing Loan through the proceeds of such new
Loan. The Agent shall make the proceeds of each non-Refunding Borrowing
available to the relevant Borrower at the Agent's principal office in Chicago,
Illinois.
(e) Agent Reliance on Bank Funding. Unless the Agent shall have
been notified by a Bank prior to (or, in the case of a Borrowing of Domestic
Rate Loans, by 11:00 A.M. (Chicago time) on) the date on which such Bank is
scheduled to make payment to the Agent of the proceeds of a Loan (which notice
shall be effective upon receipt) that such Bank does not intend to make such
payment, the Agent may assume that such Bank has made such payment when due and
the Agent may in reliance upon such assumption (but shall not be required to)
make available to the relevant Borrower the proceeds of the Loan to be made by
such Bank and, if any Bank has not in fact made such payment to the Agent, such
Bank shall, on demand, pay to the Agent the amount made available to the
Borrower attributable to such Bank together with interest thereon in respect of
each day during the period commencing on the date such amount was made
available to the Borrower and ending on (but excluding) the date such Bank pays
such amount to the Agent at a rate per annum equal to the Federal Funds Rate.
If such amount is not received from such Bank by the Agent immediately upon
demand, the relevant Borrower will, on demand, repay to the Agent the proceeds
of the Loan attributable to such Bank with interest thereon at a rate per annum
equal to the interest rate applicable to the relevant Loan, but without such
payment being considered a payment or prepayment of a Loan, so that the
Borrower will have no liability under Section 1.11 hereof with respect to such
payment.
Section 1.6. Interest Periods. As provided in Section 1.5(a)
hereof, at the time of each request for the Borrowing of Eurodollar Loans
hereunder the relevant Borrower shall select an Interest Period applicable to
such Loans from among the available options. The term "Interest Period" means
the period commencing on the date a Borrowing of Loans is made and ending on
the date, (a) in the case of Domestic Rate Loans, that is the last day of the
calendar quarter (i.e. March 31, June 30, September 30 or December 31) during
which such Borrowing is made; and (b) in the case of Eurodollar Loans 1, 2, 3,
4, 5 or 6 (or, if each Bank confirms to the Agent it has available funding for
Eurodollar Loans for such a period, 9 or 12) months thereafter; provided,
however, that:
(a) any Interest Period for a Borrowing of Domestic Rate
Loans commencing during the calendar quarter in which the Termination
Date occurs shall end on the Termination Date;
(b) with respect to any Borrowing of Eurodollar Loans, a
Borrower may not select an Interest Period that extends beyond the
Termination Date;
(c) whenever the last day of any Interest Period would
otherwise be a day that is not a Business Day, the last day of such
Interest Period shall be extended to the
-9-
15
next succeeding Business Day, provided that, in the case of an Interest Period
for a Borrowing of Eurodollar Loans, if such extension would cause the last day
of such Interest Period to occur in the following calendar month, the last day
of such Interest Period shall be the immediately preceding Business Day; and
(d) for purposes of determining the Interest Period for a
Borrowing of Eurodollar Loans, a month means a period starting on one
day in a calendar month and ending on the numerically corresponding
day in the next calendar month; provided, however, that if there is no
numerically corresponding day in the month in which such an Interest
Period is to end or if such an Interest Period begins on the last
Business Day of a calendar month, then such Interest Period shall end
on the last Business Day of the calendar month in which such Interest
Period is to end.
Section 1.7. Maturity of Loans. Each Loan shall mature and
become due and payable by the Borrower to which such Loan was made on the last
day of the Interest Period applicable thereto or, if earlier, on the
Termination Date.
Section 1.8. Optional Prepayments. Each Borrower shall have the
privilege of prepaying without premium or penalty and in whole or in part (but,
if in part, then: (i) in an amount not less than $1,000,000 for Domestic Rate
Loans, which sum may be comprised of the amount of such Loans outstanding to
both Borrowers, and $5,000,000 for Eurodollar Loans, and in integral multiples
of $100,000, and (ii) in an amount such that the minimum amount required
pursuant to Section 1.4 hereof remains outstanding, which, in the case of
Domestic Rate Loans, may after such a prepayment be the sum of all such Loans
outstanding to both Borrowers) any Borrowing of Loans by such Borrower at any
time upon one (1) Business Day's (or, in the case of Eurodollar Loans, three
(3) Business Days') prior notice (which shall be irrevocable) to the Agent
(which shall advise each Bank thereof promptly thereafter), such prepayment to
be made by the payment of the principal amount to be prepaid and accrued
interest thereon to the date fixed for prepayment and, in the case of
Eurodollar Loans, any compensation payable under Section 1.11 hereof.
Section 1.9. Default Rate. If any payment of principal on any
Loan is not made when due (whether by acceleration or otherwise), such Loan
shall bear interest (computed on the basis of a year of 360 days and actual
days elapsed) from the date such payment was due until paid in full, payable by
the Borrower of such Loan on demand, at a rate per annum equal to:
(a) with respect to any Domestic Rate Loan, the sum of
two percent (2%) per annum plus the Domestic Rate from time to time in
effect; and
(b) with respect to any Eurodollar Loan, the sum of two
percent (2%) per annum plus the rate of interest in effect thereon at
the time of such default until the end of the Interest Period
applicable thereto and, thereafter, at a rate per annum equal to the
sum of two percent (2%) per annum plus the Domestic Rate from time to
time in effect;
-10-
16
it being understood that the repayment of a maturing Borrowing with the
proceeds of a Refunding Borrowing on the date such maturing Borrowing is due
constitutes, to the extent of such Refunding Borrowing, payment of the maturing
Borrowing when due.
Section 1.10. The Notes. (a) The Loans made by a Bank to a
Borrower shall be evidenced by a single promissory note of such Borrower in the
form of Exhibit B hereto (each a "Note" and collectively the "Notes"). Each
such Note shall be dated the date of issuance, shall be payable to the order of
the relevant Bank in the principal amount of its Commitment to such Borrower,
and shall otherwise be in the form of Exhibit B hereto.
(b) Each Bank shall record on its books and records or on a
schedule to the appropriate Borrower's Note the amount of each Loan made by it
to the Borrower, the Interest Period thereof, all payments of principal and
interest and the principal balance from time to time outstanding thereon, the
type of such Loan and, if a Eurodollar Loan, the interest rate applicable
thereto; provided that prior to the transfer of any Note all such amounts shall
be recorded on a schedule to such Note. The record thereof, whether shown on
such books and records of a Bank or on a schedule to any Note, shall be prima
facie evidence as to all such amounts; provided, however, that the failure of
any Bank to record any of the foregoing or any error in any such record shall
not limit or otherwise affect the obligation of each Borrower to repay all
Loans made to it hereunder together with accrued interest thereon. At the
request of any Bank and upon such Bank tendering to either Borrower the Note to
be replaced, such Borrower shall furnish a new Note to such Bank to replace any
outstanding Note issued by it and at such time the first notation appearing on
a schedule on the reverse side of, or attached to, such Note shall set forth
the aggregate unpaid principal amount of all Loans, if any, then outstanding
thereon.
Section 1.11. Funding Indemnity. In the event any Bank shall
incur any loss, cost or expense (including, without limitation, any loss of
profit and any loss, cost, expense or premium incurred by reason of the
liquidation or re-employment of deposits or other funds acquired by such Bank
to fund or maintain any Eurodollar Loan or the relending or reinvesting of such
deposits or amounts paid or prepaid to such Bank) as a result of:
(a) any payment or prepayment of a Eurodollar Loan on a
date other than the last day of its Interest Period,
(b) any failure (because of a failure to meet the
conditions of Section 6 or otherwise) by a Borrower to borrow a
Eurodollar Loan on the date specified in a notice given pursuant to
Section 1.5(a) hereof,
(c) any failure, for any reason, to prepay a Eurodollar
Loan after giving notice thereof under Section 1.8 hereof, or
(d) the occurrence of any Event of Default hereunder,
then, upon the demand of such Bank, the relevant Borrower shall pay to such
Bank such amount as will reimburse such Bank for such loss, cost or expense.
If any Bank makes such
-11-
17
a claim for compensation, it shall provide to the Borrower a certificate
executed by an officer of such Bank setting forth the amount of such loss, cost
or expense in reasonable detail (including an explanation of the basis for and
the computation of such loss, cost or expense), and the amounts shown on such
certificate shall be conclusive and binding absent manifest error.
Section 1.12. Optional Commitment Terminations. Each Borrower
shall have the right at any time and from time to time, upon five (5) Business
Days' prior written notice to the Agent, to terminate without premium or
penalty, in whole or in part, the Commitments to it, any partial termination to
be in an amount not less than $5,000,000 or any larger amount that is an
integral multiple of $1,000,000 and to reduce ratably the respective
Commitments of each Bank; provided that the Commitments to a Borrower may not
be reduced to an amount less than the Revolving Obligations then outstanding to
it. Any termination of Commitments pursuant to this Section 1.12 may not be
reinstated.
SECTION 2. FEES AND EXTENSIONS.
Section 2.1. Fees. (a) Revolving Credit. For the period from
the Effective Date to and including the Termination Date, each Borrower shall
pay to the Agent for the ratable account of the Banks, based on their
Percentages, a commitment fee accruing at the rate of 0.15% per annum until the
first Pricing Change Date and thereafter from one Pricing Change Date (the
"Pricing Date") to the next at a rate per annum (the "Commitment Fee Rate")
determined based on the Non-XXXXX Funded Debt to Cash Flow Ratio and the Total
Funded Debt to Cash Flow Ratio for such Pricing Date in accordance with the
following schedule (computed on a basis of a year of 365 or 366 days, as the
case may be, and actual days elapsed), on the average daily unused amount of
the Commitments to it, such fees being payable in arrears on December 31, 1995,
on the last day of each calendar quarter thereafter and on the Termination
Date, unless the Commitments to such Borrower are terminated in whole on an
earlier date, in which event the commitment fee for the period to but not
including the date of such termination shall be paid in whole on the date of
such termination:
Debt to Cash Flow
-----------------
Tests for such Pricing Date: Commitment Fee Rate:
--------------------------- -------------------
Level I. Non-XXXXX Funded Debt
-------
to Cash Flow Ratio less than 1.00 to 1.00
and Total Funded Debt to Cash Flow Ratio
---
less than 1.50 to 1.00 0.125%
Level II. Level I not achieved, but Non-XXXXX
--------
Funded Debt to Cash Flow Ratio less
than 2.00 to 1.00 and Total Funded Debt to
---
Cash Flow Ratio less than 3.50 to 1.00 0.15%
-12-
18
Level III. Levels I and II not achieved,
---------
but Non-XXXXX Funded Debt
to Cash Flow Ratio less than 3.50 to 1.00
and Total Funded Debt to Cash Flow Ratio
---
less than 4.50 to 1.00 0.20%
Level IV. Levels I, II and III not achieved,
--------
but Non-XXXXX Funded Debt to Cash Flow
Ratio less than 4.00 to 1.00 and Total Funded
---
Debt to Cash Flow Ratio less than 5.50 to 1.00 0.25%
Level V. None of Levels I-IV achieved. 0.50%
-------
(b) Letters of Credit. Xxxxx Group shall pay to the Agent for the
ratable benefit of the Banks a fee for each Letter of Credit at a rate per
annum equal to the Eurodollar Margin in effect at the time payment of such fee
is due applied to the face amount of such Letter of Credit, payable quarterly
in advance on the date of issuance of the Letter of Credit (and separately on
the date of any increase in the amount of the Letter of Credit for the amount
of such increase) for the period from such date to the end of the calendar
quarter in which such date falls and thereafter on the last day of such
calendar quarter and of each subsequent calendar quarter, based on the
scheduled expiration date of such Letter of Credit.
(c) Closing. On the date hereof, each Borrower shall pay to the
Agent a closing fee for the ratable benefit of the Banks, based on their
Percentages, equal to one-tenth of one percent (0.10%) of the original
Commitments to it plus, in the case of Xxxxx Group, the face amount of the Bond
Letters of Credit then outstanding.
(d) Agent. The Borrowers shall pay to the Agent the fees agreed
to between the Agent and the Borrowers.
Section 2.2. Extension of Termination Date. Between April 1 and
April 30, 1997 (and between April 1 and April 30 of each year thereafter before
the Termination Date) the Borrowers may request in a written notice to the
Agent that the Termination Date then in effect be extended by one (1) year.
The Agent will promptly inform the Banks of any such request and each Bank
shall notify the Agent in writing by June 30 of the applicable year whether it
agrees to such extension (each such Bank agreeing to such extension being a
"Consenting Bank"). In the event that a Bank shall fail timely to so notify
the Agent whether it agrees to such extension, such Bank shall be deemed to
have refused to grant the requested extension. Upon receipt by the Agent of
the consent to such extension of all the Banks by June 30 of the applicable
year, the Termination Date shall be automatically extended an additional one
(1) year. If the Required Banks consent to such extension but fewer than all
the Banks so consent, and if the Borrowers still desire to extend the
Termination Date, they may seek to:
(a) Reallocate the Commitments among the Consenting
Banks, subject to the approval of each Consenting Bank whose
Commitment would be increased by such
-13-
19
reallocation and that each Bank's Commitment to each Borrower
represents the same Percentage of the Commitments to each Borrower; or
(b) Substitute new Banks, subject to the approval of all
the Consenting Banks, such substitution to take place in a manner and
at a time reasonably established by the Borrowers and the Agent.
If the Borrowers and the relevant Banks do not agree pursuant to (a) or (b)
above, the Termination Date shall take place as scheduled.
SECTION 3. PLACE AND APPLICATION OF PAYMENTS.
Section 3.1. Place and Application of Payments. All payments of
principal of and interest on the Loans and the Reimbursement Obligations (other
than Reimbursement Obligations under the Bond Letters of Credit, which remain
subject to their Reimbursement Agreements, as provided in Section 1.2(c)), and
of all other amounts payable by a Borrower under this Agreement, shall be made
by the relevant Borrower to the Agent by no later than 12:00 noon (Chicago
time) at the principal office of the Agent in Chicago, Illinois (or such other
location in the State of Illinois as the Agent may designate to the Borrowers)
for the benefit of the Banks. All such payments shall be made in lawful money
of the United States of America, in immediately available funds at the place of
payment, without setoff or counterclaim. The Agent will promptly thereafter
cause to be distributed like funds relating to the payment of fees and of
principal or interest on Loans and on Reimbursement Obligations in which the
Banks have purchased participating interests ratably to the Banks, and like
funds relating to the payment of any other amount payable to any Bank
(including the Issuing Bank) to such Person, in each case to be applied in
accordance with the terms of this Agreement.
SECTION 4. DEFINITIONS; INTERPRETATION.
Section 4.1. Definitions. The following terms when used herein
have the following meanings:
"Adjusted Consolidated Net Worth" means Consolidated Net Worth plus
the Subordinated Debt Amount minus Redeemable Preferred Stock included in
Consolidated Net Worth.
"Adjusted LIBOR" is defined in Section 1.3(b) hereof.
"Affiliate" for either Borrower means any Person (i) which directly or
indirectly through one or more intermediaries controls, or is controlled by, or
is under common control with, the Borrower, (ii) which beneficially owns 20% or
more of any class of the Voting Stock of the Borrower or (iii) 20% or more of
the Voting Stock of which is beneficially owned by the Borrower or a
Subsidiary. The term "control" means the possession, directly or indirectly,
of the power to direct or cause the direction of the
-14-
20
management and policies of a Person, whether through the ownership of Voting
Stock, by contract or otherwise.
"Agent" means Bank of Montreal and any successor pursuant to Section
10.8 hereof.
"Xxxxx Group" is defined in the introductory paragraph hereof.
"Xxxxx Group Revolving Commitment" is defined in Section 1.1 hereof.
"Application" is defined in Section 1.2(b) hereof.
"Authorized Representative" means, for each Borrower, each person
shown on the list of officers provided by each Borrower pursuant to
Section 6.1(d) hereof, or on any updated such list provided by a Borrower to
the Agent, or any further or different officer of a Borrower so named by any
Authorized Representative in a written notice to the Agent.
"Bank" means each bank signatory hereto, including each Issuing Bank,
and any assignee of a Bank pursuant to Section 12.12 hereof.
"Bond Document" means any document or instrument entered into in
connection with any Bonds and any amendment or supplement thereto (including,
without limitation, all "Related Documents" as defined in any Reimbursement
Agreement).
"Bond Letter of Credit Issuer" is defined in Section 1.2(d) hereof.
"Bond Letters of Credit" is defined in Section 1.2 hereof.
"Bonds" means the bond issues identified on Schedule 1.2.
"Borrower" is defined in the introductory paragraph hereof.
"Borrowing" means the total of Loans of a single type made by one or
more Banks to a Borrower on a single date and for a single Interest Period.
Borrowings are made ratably from each of the Banks according to their
Percentages.
"Business Day" means any day other than a Saturday or Sunday on which
banks are not authorized or required to close in Chicago, Illinois or New York,
New York and, if the applicable Business Day relates to the borrowing or
payment of a Eurodollar Loan, on which banks are dealing in United States
Dollar deposits in the interbank market in London, England.
"Capital Lease" means any lease of Property which in accordance with
GAAP would be required to be capitalized on the balance sheet of the lessee.
-15-
21
"Capitalized Costs of XXXXX Project" means, for any XXXXX Project, at
any time before completion, the greater of the then budgeted and then actual
construction costs of the XXXXX Group for such project and, thereafter, the
actual final construction costs.
"Capitalized Lease Obligations" means, for any Person, the amount of
the liability as shown on the balance sheet of such Person in respect of
Capital Leases as determined at any date in accordance with GAAP.
"Change of Control" is defined in Section 8.1(l) hereof.
"Co-Agent" means Bank of America Illinois.
"Code" means the Internal Revenue Code of 1986, as amended.
"Commitments" is defined in Section 1.1 hereof.
"Completion Guaranty" means any Guaranty from Xxxxx Group or any
Subsidiary (other than a member of the XXXXX Group) covering a performance
obligation of the XXXXX Group to complete a XXXXX Project (but not if such
Guaranty covers the repayment of Debt), whether such Guaranty is limited or
unlimited in amount and whether such Guaranty is provided to a governmental
entity, a lender, a surety, or other Person; provided that if any such Guaranty
survives acceptance of the relevant XXXXX Project it shall not be considered a
Completion Guaranty at any time it so remains in effect following acceptance of
the relevant XXXXX Project as being complete and operable in all material
respects as required by the appropriate governmental or other public entity for
which such XXXXX Project is constructed.
"Compliance Certificate" means a certificate in the form of Exhibit D
hereto delivered by Xxxxx Group pursuant to Section 7.6(a) hereof.
"Consenting Bank" is defined in Section 2.2 hereof.
"Consolidated Net Worth" means the excess of total assets of Xxxxx
Group and its Subsidiaries on a consolidated basis over total liabilities of
Xxxxx Group and its Subsidiaries on a consolidated basis, total assets and
total liabilities each to be determined in accordance with GAAP.
"Consolidated Tangible Net Worth" means Consolidated Net Worth minus
(to the extent included in such amount) all Redeemable Preferred Stock minus
all assets which would be classified as intangible assets under GAAP.
"Contingent Obligations" means, as to any Person, all obligations of
such Person on or with respect to Guaranties, and all other obligations of such
Person that are not Debt but that must be disclosed in the financial statements
of such Person as to amount in accordance with GAAP; provided, however, that
Contingent Obligations that duplicate or are included
-16-
22
(partially or in whole) in either Non-XXXXX Funded Debt or Total Funded Debt
shall not be considered Contingent Obligations hereunder.
"Contractual Obligations" means, as to any Person, any provision of
any security issued by such Person or of any agreement, instrument or
undertaking to which such Person is a party or by which it or any of its
property is bound.
"1994 Credit Agreement" means the Credit Agreement dated as of
February 17, 1994 among The Xxxxx Group Inc., the Banks party thereto, and Bank
of Montreal, as Agent, as amended.
"Credit Documents" means this Agreement, the Notes, the Applications,
the Reimbursement Agreements, the Bond Documents and the Letters of Credit.
"Credit Event" means the making of any Loan or the issuance of, or
extension of the expiration date or increase in the amount of, any Letter of
Credit.
"Debt" means, for Xxxxx Group and each Subsidiary, all (i) obligations
of such Person for borrowed money, (ii) obligations of such Person representing
the deferred purchase price of property or services other than accounts payable
arising in the ordinary course of business on terms customary in the trade,
(iii) obligations of such Person evidenced by bonds, debentures, notes,
acceptances, or other similar instruments, (iv) Capitalized Lease Obligations
of such Person, (v) obligations of the type described in clauses (i)-(iv) above
secured by Liens or payable out of the proceeds or production from Property now
or hereafter owned or acquired by such Person, whether or not assumed by such
Person, (vi) obligations of the type described in clauses (i)-(iv) above for
which such Person is obligated pursuant to a Guaranty, (vii) obligations of
such Person to reimburse or otherwise indemnify issuers of letters of credit or
surety bonds (or equivalent third party instruments), (viii) the imputed
principal component of obligations of any member of the XXXXX Group under
Operating Leases for real property, machinery, or equipment (other than minor
office equipment such as photocopy or telecopy machines and excluding leases of
automobiles), and (ix) the amount of any reserve required to be established by
such Person under GAAP for any judgment against it. To the extent Debt of the
XXXXX Group is included in clause (vi) of this definition and the XXXXX Project
financed by such Debt is subject to an obligation described in clause (vii), to
avoid duplication only the larger of such amounts under clauses (vi) and (vii)
will be included as Debt. The amount computed under clause (ix) shall only be
included in Non-XXXXX Funded Debt or Total Funded Debt, as applicable, to the
extent, if any, the amount so computed exceeds $250,000. To the extent
outstanding Hedging Loans do not exceed $15,000,000 (based upon the exchange
rate between U.S. Dollars and each relevant currency at the time each such
loan is borrowed and at the end of each calendar quarter thereafter) such
Hedging Loans shall be excluded from the computation of Non-XXXXX Funded Debt,
Total Funded Debt, and Debt of Subsidiaries restricted by Section 7.21.
"Default" means any event or condition the occurrence of which would,
with the passage of time or the giving of notice, or both, constitute an Event
of Default.
-17-
23
"Domestic Rate" is defined in Section 1.3(a) hereof.
"Domestic Rate Loan" means a Loan bearing interest prior to maturity
at the rate specified in Section 1.3(a) hereof.
"Effective Date" means the date on which the Agent has received signed
counterpart signature pages of this Agreement from each of the signatories (or,
in the case of a Bank, confirmation that such Bank has executed such a
counterpart and dispatched it for delivery to the Agent) and the documents
required by Section 6.1 hereof.
"ERISA" is defined in Section 5.9 hereof.
"ERISA Affiliate" means each member of a controlled group of
corporations and each trade or business (whether or not incorporated) that,
together with a Borrower, is treated as a single employer under Section 414 of
the Code, and the regulations promulgated and rulings issued thereunder.
"Eurodollar Loan" means a Loan bearing interest prior to maturity at
the rate specified in Section 1.3(b) hereof.
"Eurodollar Margin" is defined in Section 1.3(b) hereof.
"Eurodollar Reserve Percentage" is defined in Section 1.3(b) hereof.
"Event of Default" means any of the events or circumstances specified
in Section 8.1 hereof.
"Federal Funds Rate" means the fluctuating interest rate per annum
described in part (x) of clause (ii) of the definition of Domestic Rate in
Section 1.3(a) hereof.
"Fixed Charge Coverage Ratio" means, for any period of Xxxxx Group and
its Subsidiaries, the ratio, calculated without duplication, of (i) their
consolidated net income during such period (excluding "extraordinary" and
"unusual or non-recurring" gains and losses) plus (A) income tax expense (or
minus any income tax credit), whether current or deferred, to the extent
deducted from (or added to) income before taxes in determining consolidated net
income for such period, and (B) interest expense (net of interest income)
deducted from consolidated net income for such period, to (ii) the sum of
(w) interest expense (net of interest income) for such period, (x) dividends
paid or accrued on preferred stock for such period, (y) operating lease expense
(other than for the XXXXX Group or under FASB 13 "synthetic leases") for real
property for such fiscal period to the extent it has exceeded $4,000,000 during
the four quarter period ending with such fiscal period and (z) the imputed
interest component of Capitalized Lease Obligations and FASB 13 "synthetic
leases" paid or accrued during such period, all as determined in accordance
with GAAP for such fiscal period, except that, if not dictated by GAAP, the
imputed interest component of Capital Lease Obligations and of payments under
"synthetic leases" will be determined by
-18-
24
any reasonable method selected and disclosed to the Banks by Xxxxx Group and
not objected to by the Required Banks.
"GAAP" means generally accepted accounting principles from time to
time in effect.
"Guaranty" by any Person shall mean all obligations (other than
endorsements in the ordinary course of business of negotiable instruments for
deposit or collection) of such Person guaranteeing or in effect guaranteeing
any Indebtedness, dividend or other obligation (including, without limitation,
limited or full recourse obligations in connection with sales of receivables or
any other Property) of any other Person (the "primary obligor") in any manner,
whether directly or indirectly, including, without limitation, all obligations
in connection with letters of credit, surety bonds, or similar instruments
issued for the account of such Person or for which such Person is otherwise
liable and all obligations incurred through an agreement, contingent or
otherwise, by such Person: (i) to purchase such Indebtedness or obligation or
any Property or assets constituting security therefor, (ii) to advance or
supply funds (x) for the purchase or payment of such Indebtedness or
obligation, (y) to maintain working capital or other balance sheet condition or
otherwise to advance or make available funds for the purchase or payment of
such Indebtedness or obligation, or (iii) to lease property or to purchase
Securities or other property or services primarily for the purpose of assuring
the owner of such Indebtedness or obligation of the ability of the primary
obligor to make payment of the Indebtedness or obligation, or (iv) otherwise to
assure the owner of the Indebtedness or obligation of the primary obligor
against loss in respect thereof. For the purpose of all computations made
under this Agreement, the amount of a Guaranty in respect of any obligation
shall be deemed to be equal to the maximum aggregate amount of such obligation
or, if the Guaranty is limited to less than the full amount of such obligation,
the maximum aggregate potential liability under the terms of the Guaranty.
"Hedging Loan" means a loan in one currency incurred by Xxxxx Group or
a Subsidiary to purchase another currency when such purchased currency (or
temporarily the borrowed currency) is then pledged to the lender to secure such
loan.
"Indebtedness" means, and includes, as to any Person, all obligations
of such Person which are required by GAAP to be shown as liabilities on its
balance sheet.
"Indenture" means a trust indenture, bond resolution or other similar
instrument pursuant to which Bonds are issued, including any amendments or
supplements thereto.
"Interest Period" is defined in Section 1.6 hereof.
"Issuing Bank" is defined in Section 1.2(d) hereof and shall include
any assignee of an Issuing Bank that assumes the Issuing Bank's obligations and
rights hereunder.
"L/C Documents" means the Letters of Credit, any draft or other
document presented in connection with a drawing thereunder, the Applications,
the Reimbursement Agreements and this Agreement.
-19-
25
"L/C Obligations" means the undrawn face amounts of all outstanding
Letters of Credit and all unpaid Reimbursement Obligations.
"Lending Office" is defined in Section 9.4 hereof.
"Letter of Credit" is defined in Section 1.2(c) hereof.
"LIBOR" is defined in Section 1.3(b) hereof.
"Lien" means any interest in Property securing an obligation owed to,
or a claim by, a Person other than the owner of the Property, whether such
interest is based on the common law, statute or contract, including, but not
limited to, the security interest lien arising from a mortgage, encumbrance,
pledge, conditional sale, security agreement or trust receipt, or a lease,
consignment or bailment for security purposes. The term "Lien" shall also
include reservations, exceptions, encroachments, easements, rights of way,
covenants, conditions, restrictions, leases and other title exceptions and
encumbrances affecting Property. For the purposes of this definition, a Person
shall be deemed to be the owner of any Property which it has acquired or holds
subject to a conditional sale agreement, Capital Lease or other arrangement
pursuant to which title to the Property has been retained by or vested in some
other Person for security purposes, and such retention of title shall
constitute a "Lien."
"Loan" is defined in Section 1.1 hereof and, as so defined, includes a
Domestic Rate Loan or Eurodollar Loan, each of which is a "type" of Loan
hereunder.
"XXXXX" is defined in the introductory paragraph hereof.
"XXXXX Group" means XXXXX Technologies, Inc., its Subsidiaries, and
any other Affiliate of Xxxxx Group that engages in the business of
constructing, maintaining or operating vehicle emissions test sites or the
business of contracting to provide such services directly or indirectly through
subcontractors.
"XXXXX Project" means a vehicle emissions test site or a series of
related sites that the XXXXX Group constructs or operates or contracts to
construct or operate directly or indirectly through contractors under a single
contract with a single governmental authority.
"XXXXX Revolving Commitment" is defined in Section 1.1 hereof.
"Non-XXXXX Xxxx Flow" means, for any fiscal quarter of Xxxxx Group and
its Subsidiaries (except the XXXXX Group), their consolidated net income
(including cash dividends actually received from earnings of the XXXXX Group)
minus (A) "extraordinary" and "unusual or non- recurring" gains, plus (B)
"extraordinary" and "unusual or non-recurring" losses, plus (C) depreciation
expense, plus (D) non-cash amortization expense, all determined in accordance
with GAAP for the four fiscal quarter period of Xxxxx Group and its
Subsidiaries ending with such fiscal quarter. It is understood that gains or
losses properly classified under GAAP as resulting from discontinued operations
are not "extraordinary" or "unusual or non-recurring".
-20-
26
"Non-XXXXX Funded Debt" means, at any time, all then outstanding Debt
of Xxxxx Group and its Subsidiaries (except the XXXXX Group, but without
limiting the application of clauses (vi) and (vii) of the definition of Debt)
determined, without duplication, on a consolidated basis plus, for each XXXXX
Project supported by a Completion Guaranty, 25% of the lesser of (x) the
Capitalized Costs of such XXXXX Project supported by a Completion Guaranty and
(y) the maximum dollar liability under such Completion Guaranty. To the extent
Debt of the XXXXX Group financing a XXXXX Project is included in Non-XXXXX
Funded Debt because such Debt is supported by a Guaranty other than merely a
Completion Guaranty, any Completion Guaranty for such XXXXX Project will not be
included in the computation required by clauses (x) and (y) of this definition.
"Non-XXXXX Funded Debt to Cash Flow Ratio" means, at any time, the
ratio of Non-XXXXX Funded Debt to Non-XXXXX Xxxx Flow as of the last day of the
then most recently completed fiscal quarter of Xxxxx Group and its
Subsidiaries.
"Non-Recourse Debt" means Debt incurred to finance a XXXXX Project for
which the debtholder has no recourse, direct or indirect, to the XXXXX Group,
other than to specific assets of the XXXXX Group financed by such Debt and/or a
Subsidiary (a "XXXXX Special Purpose Subsidiary") the equity securities of
which are directly owned by XXXXX and the sole business activity of which is to
own and/or operate the assets financed by such Debt, as specifically stipulated
in documentation governing such Debt, and for which neither Xxxxx Group nor any
Affiliate (other than the relevant XXXXX Special Purpose Subsidiary, if
applicable) is liable, in whole or in part, pursuant to a Completion Guaranty
or other form of Contingent Obligation of any kind.
"Non-Recourse Projects" means all XXXXX Projects that are financed by
no Debt other than Non-Recourse Debt and, to the extent any XXXXX Project is
financed by Debt that is Non-Recourse Debt and other Debt not qualifying as
Non-Recourse Debt, a percentage of such XXXXX Project equal to the Non-Recourse
Debt financing such XXXXX Project divided by the sum of all Debt financing such
XXXXX Project.
"Note" is defined in Section 1.10(a) hereof.
"Obligations" means all fees payable hereunder, all obligations of a
Borrower to pay principal or interest on Loans and Reimbursement Obligations,
and all other obligations of a Borrower arising under or in relation to any
Credit Document.
"Operating Lease" means any lease of any real or personal property
that is not a Capital Lease. The imputed principal component of obligations
under an Operating Lease will be determined for purposes of clause (viii) of
the definition of Debt by any reasonable method selected by Xxxxx Group and
disclosed to the Banks that is not objected to by the Required Banks.
"Participating Bank" is defined in Section 1.2(e) hereof.
"PBGC" is defined in Section 5.9 hereof.
-21-
27
"Percentage" is defined in Section 1.1 hereof.
"Person" means an individual, partnership, corporation, association,
trust, unincorporated organization or any other entity or organization,
including a government or agency or political subdivision thereof.
"Plan" means at any time an employee pension benefit plan which is
covered by Title IV of ERISA or subject to the minimum funding standards under
Section 412 of the Code and is either (i) maintained by an ERISA Affiliate for
employees of such ERISA Affiliate or (ii) maintained pursuant to a collective
bargaining agreement or any other arrangement under which more than one
employer makes contributions and to which an ERISA Affiliate is then making or
accruing an obligation to make contributions or has within the preceding five
plan years made contributions.
"Pricing Change Date" means, for any fiscal quarter of Xxxxx Group
ended after the date hereof, the latest date by which the Borrower is required
to deliver a Compliance Certificate for such fiscal quarter pursuant to Section
7.6(a). The Eurodollar Margin and the Commitment Fee Rate established on a
Pricing Change Date shall remain in effect until the next Pricing Change Date.
If Xxxxx Group has not delivered a Compliance Certificate by the date such
Compliance Certificate is required to be delivered under Section 7.6(a), until
a Compliance Certificate is delivered before the next Pricing Change Date, the
Eurodollar Margin shall be 1.50% per annum and the Commitment Fee Rate shall be
0.50% per annum. If Xxxxx Group subsequently delivers such a Compliance
Certificate before the next Pricing Change Date, the Eurodollar Margin and
Commitment Fee Rate established by such late delivered Compliance Certificate
shall take effect from the date of delivery until the next Pricing Change Date.
In all other circumstances, the Eurodollar Margin and Commitment Fee Rate
established by a Compliance Certificate shall be in effect from the Pricing
Change Date that occurs immediately after the end of Xxxxx Group's fiscal
quarter covered by such Compliance Certificate until the next Pricing Change
Date.
"Property" means any interest in any kind of property or asset,
whether real, personal or mixed, or tangible or intangible, whether now owned
or hereafter acquired.
"Redeemable Preferred Stock" means preferred stock of Xxxxx Group and
its Subsidiaries that the holder can require be redeemed (it being understood
that a right solely to convert preferred stock into common stock is not a
redemption right).
"Refunding Borrowing" means any Borrowing of Loans that refunds in
whole or in part outstanding Loans at their maturity and does not increase the
aggregate outstanding amount of Loans as further defined in Section 1.5(d)
hereof.
"Reimbursement Agreement" means each agreement between Xxxxx Group and
Dresdner Bank AG, New York Branch relating to a Bond Letter of Credit
identified under the column "Reimbursement Agreement" on Schedule 1.2(c)
hereto, as any such agreement may be amended or otherwise modified in
accordance with the terms hereof.
-22-
28
"Reimbursement Obligation" is defined in Section 1.2(d) hereof.
"Required Banks" means, as of the date of determination thereof,
either Banks holding at least a majority of the Commitments to both Borrowers
or, if the Commitments to both Borrowers have been terminated in whole, Banks
holding at least a majority in aggregate principal amount of the Loans and L/C
Obligations (calculated after giving effect to each Participating Bank's
Percentage participation therein) outstanding hereunder; provided that the
Required Banks must at all times be comprised of at least four Banks.
"Requirement of Law" means, as to any Person, the Certificate of
Incorporation and By-Laws or other organizational or governing documents of
such Person, and any law, treaty, rule or regulation or determination of an
arbitrator or a court or other governmental authority, in each case applicable
to or binding upon such Person or any of its Property or to which such Person
or any of its Property is subject.
"Restricted Investment" means, for Xxxxx Group and each of its
Subsidiaries, any investment in any other Person, computed in accordance with
GAAP, made by stock purchase, capital contribution, loan, advance, extension of
credit, acquisition of property, but not the creation or assumption of any
Contingent Obligation in respect of any obligation of such other Person;
provided, however, that investments of the Borrower or Subsidiaries in
Subsidiaries (other than members of the XXXXX Group) that are consolidated with
Xxxxx Group under GAAP (including investments in a Person that, after giving
effect to such investments, is such a Subsidiary) and investments of
Subsidiaries in Xxxxx Group shall not be Restricted Investments, and provided
further that the following investments shall not be Restricted Investments:
(i) investments by Xxxxx Group or any Subsidiary in
commercial paper or similar short term obligations (including tax
exempt securities) maturing in 270 days or less from the date of
acquisition which, at the time of acquisition by Xxxxx Group or the
Subsidiary, is accorded one of the two highest ratings (without regard
to gradations, such as "+" or "-", within a single ratings category)
available from Standard & Poor's, Xxxxx'x Investors Service, Inc. or
any other nationally recognized credit rating agency of similar
standing providing similar ratings;
(ii) investments by Xxxxx Group or any Subsidiary in
direct obligations of the United States of America, or any agency
thereof (or by any other national government or agency thereof if
invested in by a Subsidiary operating in such country investing
revenue earned in the currency of such country), maturing in five
years or less from the date of acquisition thereof;
(iii) investments by Xxxxx Group or any Subsidiary in
certificates of deposit maturing within five years from the date of
origin and bankers' acceptances maturing within 180 days from the date
of origin, in each case issued by a Bank hereunder or any bank or
trust company organized under the laws of the United States or any
state thereof (or under the laws of the country in which a Subsidiary
operates, if such Subsidiary is investing revenues earned in the
currency of such country) having
-23-
29
capital, surplus and undivided profits aggregating at least
$100,000,000 (or its equivalent in another currency if a non-United
States bank);
(iv) investments by Xxxxx Group or any Subsidiary
consisting of purchases of participation interests from banks
described in item (iii) of this definition in notes maturing in 270
days or less from the date of issuance issued by corporations or other
entities whose short-term debt, at the time of acquisition of the
participation by Xxxxx Group or the Subsidiary, is accorded one of the
two highest ratings available from Standard & Poor's, Xxxxx'x
Investors Service, Inc. or any other nationally recognized credit
rating agency of similar standing providing similar ratings;
(v) loans or advances (not to exceed $2,000,000 in the
aggregate outstanding) in the usual and ordinary course of business to
officers, directors and employees for expenses (including moving
expenses related to a transfer) incidental to carrying on the business
of Xxxxx Group or any Subsidiary; and
(vi) receivables arising from the sale of goods and
services in the ordinary course of business of Xxxxx Group and its
Subsidiaries.
"Revolver Issuer" is defined in Section 1.2(a) hereof.
"Revolver Letters of Credit" is defined in Section 1.2(a) hereof.
"Revolving Obligations" means, for Xxxxx Group at any time, the sum of
the principal amount of the Loans to it and L/C Obligations under Revolver
Letter of Credit then outstanding and, for XXXXX at any time, the principal
amount of Loans then outstanding to it.
"SEC" means the Securities and Exchange Commission.
"Security" has the same meaning as in Section 2(l) of the Securities
Act of 1933, as amended.
"Set-Off" is defined in Section 11.7 hereof.
"Subordinated Debt" means any Debt of Xxxxx Group that has been
subordinated to all Obligations on terms and conditions (including covenants
and acceleration or mandatory prepayment provisions) acceptable to the Required
Banks.
"Subordinated Debt Amount" means, at any time, the aggregate principal
amount of outstanding Subordinated Debt up to an amount equal to 25% of
Consolidated Net Worth.
"Subsidiary" means, as to Xxxxx Group, any corporation (including,
without limitation, XXXXX) or other entity of which more than fifty percent
(50%) of the outstanding stock or comparable equity interests having ordinary
voting power for the election of the Board of Directors of such corporation or
similar governing body in the case
-24-
30
of a non-corporation (irrespective of whether or not, at the time, stock or
other equity interests of any other class or classes of such corporation or
other entity shall have or might have voting power by reason of the happening
of any contingency) is at the time directly or indirectly owned by Xxxxx Group
or by one or more of its Subsidiaries, or by Xxxxx Group and one or more of its
Subsidiaries. References in this Agreement to a Borrower "or" a Subsidiary do
not affect the intention in this Agreement to include XXXXX in all references
to a Subsidiary.
"Substitute Bank" is defined in Section 9.3(d) hereof.
"Termination Date" means December 18, 1999.
"Total Cash Flow" means, for any fiscal quarter of Xxxxx Group and its
Subsidiaries, their consolidated net income minus (A) "extraordinary" and
"unusual or non-recurring" gains, plus (B) "extraordinary" and "unusual or
non-recurring" losses, plus (C) depreciation expense, plus (D) non-cash
amortization expense, all determined in accordance with GAAP for the four
fiscal quarter period of Xxxxx Group and its Subsidiaries ending with such
fiscal quarter; except that there shall be excluded from such computation any
portion of consolidated net income or items in clauses (A) through (D) that
derive from Non-Recourse Projects (including a percentage of such revenue for
XXXXX Projects partially financed by Non-Recourse Debt, as described in the
definition of Non-Recourse Projects). It is understood that gains or losses
properly classified under GAAP as resulting from discontinued operations are
not "extraordinary" or "unusual or non-recurring".
"Total Funded Debt" means, at any time, all then outstanding Debt of
Xxxxx Group and its Subsidiaries (other than Non-Recourse Debt) determined,
without duplication, on a consolidated basis, plus, to the extent (if any)
greater than the Debt (other than Non-Recourse Debt) of Xxxxx Group and its
Subsidiaries financing a XXXXX Project, for each such XXXXX Project, the lesser
of the amounts calculated under clauses (x) and (y) of the definition of
Non-XXXXX Funded Debt over the amount of such Debt (other than Non-Recourse
Debt) financing the XXXXX Project.
"Total Funded Debt to Cash Flow Ratio" means, at any time, the ratio
of Total Funded Debt to Total Cash Flow as of the last day of the then most
recently completed fiscal quarter of Xxxxx Group.
"Trustee" means the trustee, or equivalent fiduciary, appointed under
any Indenture.
"Unfunded Vested Liabilities" means, with respect to any Plan at any
time, the amount (if any) by which (i) the present value of all vested
nonforfeitable accrued benefits under such Plan exceeds (ii) the fair market
value of all Plan assets allocable to such benefits, all determined in
accordance with the actuarial assumptions used by the actuary for each Plan as
of the then most recent actuarial valuation date for such Plan, but only to the
extent that such excess represents a potential liability of a Borrower or any
ERISA Affiliate to the PBGC or the Plan under Title IV of ERISA.
-25-
31
"U.S. Tax Returns" is defined in Section 5.7 hereof.
"Voting Stock" of any Person means capital stock of any class or
classes or other equity interests (however designated) having ordinary voting
power for the election of directors or equivalent governing body of such
Person, other than stock or other equity interests having such power only by
reason of the happening of a contingency.
"Welfare Plan" means a "welfare plan", as defined in Section 3(1) of
ERISA.
"Wholly-Owned" when used in connection with any Subsidiary of Xxxxx
Group means a Subsidiary of which all of the issued and outstanding shares of
stock or other equity interests (other than directors' qualifying shares as
required by law) shall be owned by Xxxxx Group and/or one or more of its
Subsidiaries.
Section 4.2. Interpretation. The foregoing definitions shall be
equally applicable to both the singular and plural forms of the terms defined.
All references to times of day shall be references to Chicago, Illinois time
unless otherwise specifically provided. Where the character or amount of any
asset or liability or item of income or expense is required to be determined or
any consolidation or other accounting computation is required to be made for
the purposes of this Agreement, it shall be done in accordance with GAAP
applied in a manner consistent with Xxxxx Group's December 31, 1994 financial
statements referred to in Section 5.4 hereof, except where such principles are
inconsistent with specific provisions of this Agreement; provided that, if
(within six months after the application of such a change in GAAP) Xxxxx Group
notifies the Agent that the Borrowers wish to amend any provision hereof to
eliminate the effect of any change after the date hereof in GAAP (including its
generally accepted application or interpretation) on the operation of a
provision of this Agreement (or if the Agent notifies Xxxxx Group within such
six month period that the Required Banks wish to amend any provision for such
purpose), then such provision shall be interpreted and the Borrowers'
compliance with and performance under such provision shall be determined on the
basis of GAAP in effect immediately before the relevant change in GAAP became
effective, until either such notice is withdrawn or such provision is amended
in a manner satisfactory to the Borrowers and the Required Banks.
SECTION 5. REPRESENTATIONS AND WARRANTIES.
Each Borrower represents and warrants to each Bank as follows:
Section 5.1. Corporate Organization and Authority. Each
Borrower is duly organized and existing in good standing under the laws of the
State of its incorporation; has all necessary corporate power to carry on its
present business; and is duly licensed or qualified and in good standing in
each jurisdiction in which the nature of the business transacted by it or the
nature of the Property owned or leased by it makes such licensing or
qualification necessary and in which the failure to be so licensed or qualified
would materially and adversely affect its business, properties or operations.
-26-
32
Section 5.2. Subsidiaries. As of the date hereof, the only
Subsidiaries of Xxxxx Group are designated in Schedule 5.2 hereto; each
Subsidiary is duly organized and existing in good standing under the laws of
the jurisdiction in which it was incorporated, has all necessary corporate
power to carry on its present business, and is duly licensed or qualified and
in good standing in each jurisdiction in which the nature of the business
transacted by it or the nature of the Property owned or leased by it makes such
licensing or qualification necessary and in which the failure to be so licensed
or qualified would have a material adverse effect on the financial condition,
or the Property, business or operations, of the Borrowers and Subsidiaries
taken as a whole. Schedule 5.2 hereto, as it may be updated from time to time
pursuant to Section 7.6(a) hereof, correctly sets forth, as to each Subsidiary,
whether or not it is a consolidated Subsidiary, the jurisdiction of its
incorporation, the percentage of issued and outstanding shares of each class of
its capital stock owned by Xxxxx Group and its Subsidiaries and, if such
percentage is not 100% (excluding directors' qualifying shares as required by
law), a description of each class of its authorized capital stock and the
number of shares of each class issued and outstanding. All of the issued and
outstanding shares of capital stock of each Subsidiary are validly issued and
outstanding and fully paid and nonassessable and all such shares indicated in
Schedule 5.2 as owned by Xxxxx Group or a Subsidiary are owned, beneficially
and of record, by Xxxxx Group or such Subsidiary, free of any Lien.
Section 5.3. Corporate Authority and Validity of Obligations.
Each Borrower has full right and authority to enter into the Credit Documents
to which it is a party, to make the borrowings herein provided for, to issue
its Notes in evidence thereof, to apply for the issuance of the Letters of
Credit (in the case of Xxxxx Group) and to perform all of its obligations under
the Credit Documents to which it is a party; each Credit Document delivered by
a Borrower has been duly authorized, executed and delivered by such Borrower
and constitutes valid and binding obligations of the Borrower enforceable in
accordance with its terms; and no Credit Document, nor the performance or
observance by either Borrower or any Subsidiary of any of the matters or things
therein provided for, contravenes any provision of law or any charter or by-
law provision of either Borrower or any Subsidiary or (individually or in the
aggregate) any material covenant, indenture or agreement of or affecting either
Borrower or any Subsidiary or a substantial portion of their respective
Properties or results in or requires the creation or imposition of any Lien on
any of either Borrower's or any Subsidiary's Properties or revenues.
Section 5.4. Financial Statements. All public financial
statements showing historical performance of Xxxxx Group and the Subsidiaries
heretofore delivered to the Banks have been prepared in accordance with GAAP
applied on a basis consistent, except as otherwise noted therein, with that of
the previous fiscal year, and fairly present on a consolidated basis the
financial position of Xxxxx Group and the Subsidiaries as of the dates thereof,
and the results of operations for the periods covered thereby. Xxxxx Group and
its Subsidiaries have no material contingent liabilities other than those
disclosed in such financial statements referred to in this Section 5.4 or in
comments or footnotes thereto or in any supplemental report thereto heretofore
furnished to the Banks.
-27-
33
Section 5.5. No Material Adverse Change. There has been no
material adverse change in the financial condition or business prospects of
Xxxxx Group and its Subsidiaries on a consolidated basis since June 30, 1995,
except to the extent of the effects of the distribution of TransPro, Inc. to
the shareholders of Xxxxx Group, as described in Xxxxx Group's Registration
Statement on Form S-1 filed with the SEC on September 11, 1995.
Section 5.6. No Litigation. There is no litigation or
governmental proceeding pending, or to the knowledge of either Borrower
threatened, against either Borrower or any Subsidiary that has any reasonable
possibility of success which, if adversely determined, would (individually or
in the aggregate) materially adversely affect the financial condition,
operations, business, or properties of Xxxxx Group and its Subsidiaries on a
consolidated basis.
Section 5.7. Taxes. Except as described on Schedule 5.7 hereto,
the United States Federal income tax returns of Xxxxx Group and its
Subsidiaries ("U.S. Tax Returns") for the fiscal year ended December 31, 1980,
and for all fiscal years ended prior to said date, have been examined by the
Internal Revenue Service ("IRS") and have been approved as filed, or any
additional assessments in connection with any of such years have been paid.
Except as described on Schedule 5.7 hereto, Xxxxx Group has filed U.S. Tax
Returns for each fiscal year through December 31, 1994, and no audits of the
U.S. Tax Returns for any fiscal year ended after December 31, 1980 are pending,
nor to the knowledge of either Borrower is any objection or controversy
threatened.
Section 5.8. Approvals. No authorization, consent, license,
exemption or filing or registration with any court or governmental department,
agency or instrumentality, or any approval or consent of the stockholders of
either Borrower or from any other Person, is necessary to the valid execution,
delivery or performance by either Borrower of any Credit Document.
Section 5.9. ERISA. Each Borrower and each ERISA Affiliate has
fulfilled its obligations under the minimum funding standards of and is in
compliance in all material respects with the Employee Retirement Income
Security Act of 1974, as amended ("ERISA") and with the Code to the extent
applicable to it and has not incurred any liability to the Pension Benefit
Guaranty Corporation ("PBGC") or a Plan under Title IV of ERISA other than a
liability to the PBGC for premiums under Section 4007 of ERISA. Neither
Borrower nor any Subsidiary has any material contingent liability with respect
to any post-retirement benefits under a Welfare Plan, other than liability for
continuation coverage described in Part 6 of Title I of ERISA, except as
disclosed in the consolidated financial statements of Xxxxx Group for the
fiscal year ended December 31, 1994.
Section 5.10. Not an Investment Company. Neither Borrower is an
"investment company" as defined in the Investment Company Act of 1940, as
amended.
Section 5.11. Margin Stock. Neither Borrower nor any Subsidiary
is engaged principally, or as one of its primary activities, in the business of
extending credit for the purpose of purchasing or carrying margin stock
("margin stock" to have the same meaning
-28-
34
herein as in Regulation U of the Board of Governors of the Federal Reserve
System). Neither Borrower nor any Subsidiary will use the proceeds of any Loan
in a manner that violates any provision of Regulations G, U, or X of the Board
of Governors of the Federal Reserve System.
Section 5.12. Compliance with Environmental Laws. (a) To the
best of each Borrower's knowledge, the business and operations of each Borrower
and the Subsidiaries comply in all respects with all applicable federal, state,
regional, county and local laws, statutes, rules, regulations and ordinances
relating to public health, safety or the environment, including, without
limitation, relating to releases, discharges, emissions or disposals to air,
water, land or groundwater, to the withdrawal or use of groundwater, to the
use, handling or disposal of polychlorinated biphenyls (PCBs), asbestos or urea
formeldahyde, to the treatment, storage, disposal or management of hazardous
substances (including, without limitation, petroleum, its derivatives or
by-products, or other hydrocarbons), to exposure to toxic, hazardous, or other
controlled, prohibited or regulated substances, to the transportation, storage,
disposal, management or release of gaseous or liquid substances, and any
regulation, order, injunction, judgment, declaration, notice or demand issued
thereunder, except where the failure to so comply would not (individually or in
the aggregate) have a material adverse effect on the Property, business or
operations of Xxxxx Group and the Subsidiaries taken as a whole.
(b) Except as set forth on Schedule 5.12 hereto (as updated
pursuant to Section 7.14(b) and with this representation remaining true so long
as all such updated information is delivered by the time required by Section
7.14(b)), neither Xxxxx Group nor any Subsidiary has given, nor is it required
to give, nor has it received, any notice, letter, citation, order, warning,
complaint, inquiry, claim or demand to or from any governmental entity or in
connection with any court proceeding that: (i) Xxxxx Group or any Subsidiary
has violated, or is about to violate, any federal, state, regional, county or
local environmental, health or safety statute, law, rule, regulation,
ordinance, judgment or order; (ii) there has been a release, or there is a
threat of release, of hazardous substances (including, without limitation,
petroleum, its by-products or derivatives, or other hydrocarbons) from Xxxxx
Group's or any Subsidiary's property, facilities, equipment or vehicles; (iii)
Xxxxx Group or any Subsidiary may be or is liable, in whole or in part, for the
costs of cleaning up, remediating or responding to a release of hazardous
substances (including, without limitation, petroleum, its by-products or
derivatives, or other hydrocarbons); or (iv) any of Xxxxx Group's or any
Subsidiary's property or assets are subject to a Lien in favor of any
governmental entity for any liability, costs or damages, under any federal,
state or local environmental law, rule or regulation arising from, or costs
incurred by such governmental entity in response to, a release of a hazardous
substance (including, without limitation, petroleum, its by-products or
derivatives, or other hydrocarbons).
Section 5.13. Ownership of Property; Liens. Xxxxx Group and its
Subsidiaries have good record and marketable title in fee simple to or valid
leasehold interests in all their respective real property, and good title to
or valid leasehold interests in all their respective
-29-
35
other property, and none of such property is subject to any Lien, except as
permitted in Section 7.9.
Section 5.14. No Burdensome Restrictions. Neither Xxxxx Group
nor any Subsidiary is party to or subject to any law, regulation, rule or
order, or any Contractual Obligation that (individually or in the aggregate)
materially adversely affects, or insofar as either Borrower may reasonably
foresee may so affect, the business, operations, Property or financial
condition of Xxxxx Group and its Subsidiaries taken as a whole.
Section 5.15. Long Term Debt. As of the date hereof, all Debt of
Xxxxx Group and its Subsidiaries with a remaining scheduled maturity of more
than one (1) year is listed on Schedule 5.15 hereto.
SECTION 6. CONDITIONS PRECEDENT.
The obligation of each Bank to make any Loan hereunder, or of the
Issuing Bank to issue, extend the expiration date of or increase the amount of
any Letter of Credit, shall be subject to the following conditions precedent:
Section 6.1. Initial Credit Event. Prior to the first Credit
Event hereunder:
(a) The Agent shall have received for each Bank the
favorable written opinion of XxXxxx X. Xxxxx, III, Vice President,
Secretary and General Counsel of Xxxxx Group, in substantially the
form attached hereto as Exhibit C, and otherwise in form and substance
satisfactory to the Banks;
(b) The Agent shall have received for each Bank copies
(executed or certified as may be appropriate) of all legal documents
or proceedings taken in connection with either Borrower's the
execution and delivery of this Agreement and the Notes to the extent
the Agent or the Required Banks may reasonably request;
(c) The Agent shall have received for the Banks copies of
each Borrower's Certificate of Incorporation and bylaws, each
certified by the relevant Borrower's Secretary or Assistant Secretary;
(d) The Agent shall have received from each Borrower a
list of its Authorized Representatives and certified resolutions of
its Board of Directors authorizing the execution and delivery of the
Credit Documents and the consummation of the transactions contemplated
thereby, together with a certification of the incumbency and specimen
signatures of each of the officers of each Borrower executing Credit
Documents on its behalf; and
(e) The 1994 Credit Agreement shall have been terminated
and all outstanding Indebtedness thereunder shall have been paid in
full.
-30-
36
Section 6.2. All Credit Events. As of the time of each Credit
Event hereunder (including the initial Credit Event):
(a) In the case of a Borrowing, the Agent shall have
received for the account of each Bank its Notes and the notice
required by Section 1.5 hereof and, in the case of the issuance of any
Revolver Letter of Credit, the Issuing Bank shall have received a duly
completed Application for the Letter of Credit and, in the case of an
extension or increase in the amount of a Letter of Credit, a written
request therefor, in a form acceptable to the Issuing Bank;
(b) Each of the representations and warranties of the
Borrowers set forth in Section 5 hereof (except, in the case of a
Refunding Borrowing only, for the representation and warranty
appearing in Section 5.5 hereof) shall be and remain true and correct
in all material respects as of said time, except to the extent that
any such representation or warranty relates solely to an earlier date;
(c) The Borrowers shall be in full compliance with all of
the terms and conditions hereof, and no Default or Event of Default
shall have occurred and be continuing or would occur as a result of
such Credit Event;
(d) The aggregate outstanding principal amount of
Revolving Obligations of each Borrower, after giving effect to the
proposed Credit Event, shall not exceed the Commitments to such
Borrower then in effect;
(e) In the case of the issuance of, or the increase in
the amount of, a Revolver Letter of Credit the aggregate undrawn face
amount of all outstanding Revolver Letters of Credit after giving
effect to such proposed Credit Event shall not exceed $20,000,000; and
(f) Such Credit Event shall not violate any order,
judgment or decree of any court or other authority or any provision of
law or regulation applicable to any Bank (including, without
limitation, Regulation U of the Board of Governors of the Federal
Reserve System) as then in effect.
Each request for a Borrowing hereunder shall be deemed to be a
representation and warranty by the Borrower on the date of such Borrowing as to
the facts specified in paragraphs (b), (c), (d) and (e) of this Section 6.2.
SECTION 7. COVENANTS.
Each Borrower covenants and agrees that, so long as any Note, any
Letter of Credit or any Reimbursement Obligation is outstanding hereunder or
any credit is available to or in use by either Borrower hereunder, except to
the extent compliance in any case is waived in writing by the Required Banks:
-31-
37
Section 7.1. Corporate Existence. Each Borrower shall, and
Xxxxx Group shall cause each of its Subsidiaries to, preserve and maintain its
corporate existence, subject to the provisions of Section 7.13 hereof.
Section 7.2. Maintenance. Each Borrower will maintain, preserve
and keep its plants, properties and equipment deemed by it necessary to the
proper conduct of its business in reasonably good repair, working order and
condition and will from time to time make all reasonably necessary repairs,
renewals, replacements, additions and betterments thereto so that at all times
such plants, properties and equipment shall be reasonably preserved and
maintained, and Xxxxx Group will cause each Subsidiary so to do in respect of
Property owned or used by it; provided, however, that nothing in this Section
7.2 shall prevent a Borrower or a Subsidiary from discontinuing the operation
or maintenance of any such properties if such discontinuance is, in the
judgment of Xxxxx Group, desirable in the conduct of its business or the
business of the Subsidiary and not disadvantageous to the Banks or the holders
of the Notes.
Section 7.3. Taxes. Each Borrower will duly pay and discharge,
and Xxxxx Group will cause each Subsidiary to pay and discharge, all taxes,
rates, assessments, fees and governmental charges upon or against the Borrower
or such Subsidiary or against their respective Properties, in each case before
the same becomes delinquent and before penalties accrue thereon, unless and to
the extent that the same is being contested in good faith and by appropriate
proceedings and reserves in conformity with GAAP have been provided therefor on
the books of the Borrower or such Subsidiary, as the case may be.
Section 7.4. ERISA. Each Borrower will, and Xxxxx Group will
cause each ERISA Affiliate to, promptly pay and discharge all obligations and
liabilities arising under ERISA of a character which if unpaid or unperformed
might result in the imposition of a Lien against any of its properties or
assets and will promptly notify the Agent of (i) the occurrence of any
reportable event (as defined in ERISA) with respect to a Plan, other than any
such event of which the PBGC has waived notice by regulation, (ii) receipt of
any notice from PBGC of its intention to seek termination of any Plan or
appointment of a trustee therefor, (iii) its or any Subsidiary's intention to
terminate or withdraw from any Plan, and (iv) the occurrence of any event with
respect to any Plan which could result in the incurrence by a Borrower or any
Subsidiary of any material liability, fine or penalty, or any material increase
in the contingent liability of a Borrower or any Subsidiary with respect to any
post-retirement Welfare Plan benefit; provided that, for items described in
clause (i)-(iii) above that affect multiemployer plans (i.e. those described in
clause (ii) of the definition of Plan) that are immaterial to each Borrower and
its ERISA Affiliates, Xxxxx Group need only notify the Agent of such events on
an annual basis at the time it delivers the financial statements required to be
delivered pursuant to Section 7.6(a)(ii) hereof.
Section 7.5. Insurance. Each Borrower will insure, and keep
insured, and Xxxxx Group will cause each Subsidiary to insure, and keep
insured, in good and responsible insurance companies, all insurable Property
owned by it which is of a character usually insured by companies similarly
situated and operating like Property; and to the extent usually insured
(subject to self-insured retentions) by companies similarly situated and
-32-
38
conducting similar businesses each Borrower will also insure, and Xxxxx Group
will cause each of its Subsidiaries to insure, employers' and public and
product liability risks in good and responsible insurance companies. The
Borrowers will upon request of the Agent furnish a summary setting forth the
nature and extent of the insurance maintained pursuant to this Section 7.5.
Section 7.6. Financial Reports and Other Information. (a) Each
Borrower will maintain a system of accounting in accordance with GAAP and will
furnish to the Banks and their respective duly authorized representatives such
information respecting the business and financial condition of the Borrowers
and Subsidiaries as the Required Banks or the Agent may reasonably request; and
without any request Xxxxx Group will furnish to each Bank:
(i) within 60 days after the end of each of Xxxxx Group's
first three quarterly fiscal periods, a copy of Xxxxx Group's Form
10-Q Report filed with the SEC, with supplemental calculations setting
forth (A) for each account affected thereby, all eliminating entries
for the XXXXX Group and (B) the resulting consolidated figures for
Xxxxx Group and its Subsidiaries exclusive of the XXXXX Group and such
consolidated figures for the XXXXX Group;
(ii) within 100 days after the end of each fiscal year of
Xxxxx Group, a copy of Xxxxx Group's Form 10-K Report filed with the
SEC, including a copy of the annual report of Xxxxx Group and its
Subsidiaries for such year with accompanying consolidated financial
statements with supplemental calculations setting forth (A) for each
account affected thereby, all eliminating entries for the XXXXX Group
and (B) the resulting consolidated figures for Xxxxx Group and its
Subsidiaries exclusive of the XXXXX Group and such consolidated
figures for the XXXXX Group, prepared by Xxxxx Group and, in the case
of the consolidated financial statements of Xxxxx Group and its
Subsidiaries, certified by Coopers & Xxxxxxx or other independent
public accountants of recognized standing selected by Xxxxx Group and
satisfactory to the Required Banks stating that they audited the
consolidated financial statements in accordance with generally
accepted auditing standards and in their opinion such statements
present fairly, in all material respects, the consolidated financial
position of Xxxxx Group and its Subsidiaries as of the end of the
fiscal year and the consolidated results of operations for the fiscal
year then ended;
(iii) promptly after the sending or filing thereof, copies
of all proxy statements, financial statements and reports that Xxxxx
Group sends to its shareholders, and copies of all other regular,
periodic and special reports and all registration statements Xxxxx
Group files with the SEC or any successor thereto, or with any
national securities exchange; and
(iv) an updated Schedule 5.2 along with the financial
statements delivered under Subsection (i) or (ii) above, as
applicable, for any calendar quarter during which there is a change in
any of the facts specified in Schedule 5.2, as then most recently
updated.
-33-
39
Each of the financial statements furnished to the Banks pursuant to
subsections (i) and (ii) of this Section 7.6(a) shall be accompanied by a
Compliance Certificate signed by the chief financial officer or Controller or
Treasurer of Xxxxx Group (it being understood that in preparing such
certificate the officer's determination of compliance will be based upon
periodic, not daily, financial reporting, but that this does not in any way
limit or otherwise affect the requirements of any part of this Section 7 or of
any other provision of this Agreement that the Borrowers at all times be in
compliance with the terms and conditions of this Agreement). In the event
Xxxxx Group is no longer required to file Form 10-Q and 10-K Reports with the
SEC, it will nevertheless furnish to the Banks at the time hereinabove set
forth all the financial and other information that would have comprised such
filings.
(b) Each Borrower will permit each Bank (or such Persons as any
Bank may designate) to visit and inspect, under Xxxxx Group's guidance, any of
the properties of either Borrower or any Subsidiary, to examine all their books
of account, records, reports and other papers, to make copies and extracts
therefrom, and to discuss their respective affairs, finances and accounts with
their respective officers, employees and independent public accountants (and by
this provision each Borrower authorizes such accountants to discuss with the
Banks the finances and affairs of the Borrowers and Subsidiaries) all at such
reasonable times and as often as may be reasonably requested.
(c) The Borrowers will promptly give notice to the Agent and each
Bank (and in any event within two Business Days after a Borrower has knowledge
thereof):
(i) of the occurrence of any Default or Event of Default;
(ii) of any default or event of default under any material
Contractual Obligation of a Borrower or any Subsidiary;
(iii) of a material adverse change in the business,
operations, property or financial or other condition of Xxxxx Group
and its Subsidiaries taken as a whole.
Section 7.7. Change of Control. If a Change of Control shall
occur, the Borrowers will, within 1 Business Day after either becomes aware of
the occurrence thereof, give the Agent notice thereof and describe in
reasonable detail the facts and circumstances giving rise thereto.
Section 7.8. Conduct of Business. Xxxxx Group and its
Subsidiaries will not engage in any business if, as a result, the general
nature of the business which would then be engaged in by Xxxxx Group and its
Subsidiaries would be substantially changed from the general nature of the
business engaged in by Xxxxx Group and its Subsidiaries on the date of this
Agreement. The XXXXX Group will not engage in any business except the
construction and operation, or the contracting to construct or operate directly
or indirectly through subcontractors, vehicle emissions test sites.
Section 7.9. Liens. Neither Borrower will nor xxxx Xxxxx Group
permit any Subsidiary to create, incur, or permit to exist or to be incurred
any Lien of any kind on any
-34-
40
Property owned by a Borrower or any Subsidiary; provided, however, that this
Section 7.9 shall not apply to nor operate to prevent:
(a) Liens in connection with worker's compensation,
unemployment insurance, old age benefits (in any case not including
Liens under ERISA), social security obligations, taxes, assessments,
statutory obligations or other similar charges, good faith deposits,
pledges or Liens in connection with bids, tenders, contracts or leases
to which a Borrower or any Subsidiary is a party (other than contracts
for borrowed money), or other deposits required to be made in the
ordinary course of business; provided that in each case the obligation
secured is not overdue or, if overdue, is being contested in good
faith by appropriate proceedings and for which reserves in conformity
with GAAP have been provided on the books of the relevant Borrower or
such Subsidiary, as the case may be;
(b) mechanics', workmen's, materialmen's, landlords',
carriers' or other similar Liens arising in the ordinary course of
business (or deposits to obtain the release of such Liens) with
respect to obligations which are not due or, if due, are being
contested in good faith by appropriate proceedings and for which
reserves in conformity with GAAP have been provided on the books of
the relevant Borrower or such Subsidiary, as the case may be;
(c) Liens arising out of judgments or awards against a
Borrower or any Subsidiary, or in connection with surety or appeal
bonds in connection with bonding such judgments or awards, the time
for appeal from which or petition for rehearing of which shall not
have expired or with respect to which the Borrower or such Subsidiary
shall be prosecuting an appeal or proceeding for review, and with
respect to which it shall have obtained a stay of execution pending
such appeal or proceeding for review; provided that the aggregate
amount of liabilities (including interest and penalties, if any) of
the Borrowers and the Subsidiaries secured by such Liens shall not
exceed $2,000,000 at any one time outstanding;
(d) Liens upon any Property acquired by a Borrower or any
Subsidiary after the date hereof (A) to secure the payment of all or
any part of the purchase price of such Property upon the acquisition
thereof by the Borrower or such Subsidiary, or (B) to secure any
indebtedness issued, assumed or guaranteed by a Borrower or any
Subsidiary prior to, at the time of, or within 90 days after the
acquisition of such Property, which indebtedness is issued, assumed or
guaranteed for the purpose of financing all or any part of the
purchase price of such Property, provided that in the case of any such
acquisition the Lien shall not apply to any Property other than the
Property so acquired or purchased;
(e) Liens of or upon any Property existing at the time of
acquisition thereof by a Borrower or any Subsidiary and not created in
contemplation of such acquisition;
(f) Liens of or upon any Property of a corporation
existing at the time such corporation is merged with or into or
consolidated with a Borrower or any Subsidiary
-35-
41
or existing at the time of a sale or transfer of the properties of a
corporation as an entirety or substantially as an entirety to a Borrower or any
Subsidiary and not created in contemplation of such transaction;
(g) Liens to secure Debt of any Subsidiary to Xxxxx Group
or to a Subsidiary so long as the Debt so secured is not related to
any Indebtedness (other than Indebtedness hereunder) of the secured
Subsidiary or Xxxxx Group to any Person;
(h) Liens for taxes or assessments or other government
charges or levies not yet due or delinquent, or which can thereafter
be paid without penalty, or which are being contested in good faith by
appropriate proceedings and for which reserves in conformity with GAAP
have been provided on the books of the relevant Borrower or such
Subsidiary, as the case may be;
(i) Options granted to others to purchase real property
or other assets of a Borrower or any Subsidiary in compliance with
Section 7.13;
(j) Minor survey exceptions or minor encumbrances,
easements or reservations, or rights of others for rights-of-way,
utilities and other similar purposes, or zoning or other restrictions
as to the use of real properties which are necessary for the conduct
of the activities of the Borrowers and Subsidiaries or which
customarily exist on properties of corporations engaged in similar
activities and similarly situated and which do not in any event
materially impair their use in the operation of the business of the
Borrowers and Subsidiaries;
(k) Liens, existing as of the date hereof, securing
Indebtedness of a Borrower or any Subsidiary outstanding on the date
hereof and listed on Schedule 7.9 to this Agreement;
(l) Liens resulting from leases of real or personal
property, including without limitation Capital Leases, where a
Borrower or Subsidiary is the lessee and which do not violate the
limitations of any other provision hereof;
(m) any extension, renewal or replacement (or successive
extensions, renewals or replacements) in whole or in part of any Lien
referred to in the foregoing paragraphs (a) through (l), inclusive,
provided, however, that the principal amount of Indebtedness secured
thereby shall not exceed the principal amount of Indebtedness so
secured at the time of such extension, renewal or replacement, and
that such extension, renewal or replacement shall be limited to the
Property which was subject to the Lien so extended, renewed or
replaced;
(n) Liens securing Non-Recourse Debt on Property financed
by such Debt;
(o) Liens on funds derived from a Hedging Loan (before or
after the exchange of the borrowed funds into a different currency)
securing such Hedging Loan; or
-36-
42
(p) Liens not otherwise permitted under this Section 7.9
securing obligations in an aggregate principal amount not exceeding
$1,000,000; provided that no Lien on the capital stock of any member
of the XXXXX Group or on any Debt owed by any member of the XXXXX
Group to Xxxxx Group or any Subsidiary (other than a member of the
XXXXX Group) shall be permitted under this Section 7.9 except to the
extent such a Lien arises involuntarily by operation of law pursuant
to paragraph (a), (b) or (c) of this Section 7.9.
Section 7.10. Compliance with Laws. Without limiting any of the
other covenants of the Borrowers in this Section 7, Xxxxx Group will, and will
cause each of its Subsidiaries to, conduct its business, and otherwise be, in
compliance with all applicable laws, regulations, ordinances and orders of any
governmental or judicial authorities; provided, however, that neither Xxxxx
Group nor any Subsidiary shall be required to comply with any such law,
regulation, ordinance or order if (x) it shall be contesting such law,
regulation, ordinance or order in good faith by appropriate proceedings and
reserves in conformity with GAAP have been provided therefor on the books of
Xxxxx Group or such Subsidiary, as the case may be, or (y) the failure to
comply therewith could not, in the aggregate, have a material adverse effect on
the business, operations, property or financial or other condition of Xxxxx
Group and its Subsidiaries on a consolidated basis.
Section 7.11. Regulation U. The proceeds of each Loan shall be
used for general corporate purposes of the relevant Borrower. Neither Borrower
shall use any part of the proceeds of any of the Loans directly or indirectly
to purchase or carry any margin stock (as defined in Section 5.11 hereof) or to
extend credit to others for the purpose of purchasing or carrying any such
margin stock except in compliance with Regulations G, U and X of the Board of
Governors of the Federal Reserve System.
Section 7.12. Notice of Litigation. Xxxxx Group shall promptly
give notice to the Agent of any litigation or governmental proceeding of the
type described in Section 5.6 hereof.
Section 7.13. Mergers, Consolidations and Sales of Assets. (a)
Xxxxx Group will not, and will not permit any of its Subsidiaries to, (i)
consolidate with or be a party to a merger with any other Person or (ii) during
any fiscal year, sell, lease or otherwise dispose of all or a "substantial
part" of the consolidated assets of Xxxxx Group and its Subsidiaries; provided,
however, that:
(1) any member of the XXXXX Group may merge or
consolidate with any other member of the XXXXX Group; provided that,
in any such merger or consolidation involving XXXXX, XXXXX shall be
the surviving or continuing corporation;
(2) any Subsidiary (except a member of the XXXXX Group)
may merge or consolidate with or into or sell, lease or otherwise
convey all or a substantial part of its assets to Xxxxx Group or any
other Subsidiary for which Xxxxx Group holds at least the same
percentage equity ownership; provided that in any such merger or
-37-
43
consolidation involving Xxxxx Group, Xxxxx Group or Xxxxx Telecom Group, Inc.
shall be the surviving or continuing corporation and shall continue to own all
of the assets Xxxxx Group owned immediately before such transaction (other than
the capital stock of Xxxxx Telecom Group, Inc. if it is the surviving or
continuing corporation); and
(3) either Borrower may consolidate or merge with any
other Person (except Xxxxx Group will not consolidate or merge with a
member of the XXXXX Group) if the Borrower is the surviving or
continuing corporation and at the time of such consolidation or
merger, and after giving effect thereto, no Default or Event of
Default shall have occurred and be continuing.
As used in this Section 7.13(a) a sale, lease, transfer or disposition of
assets shall be deemed to be of a "substantial part" of the assets of Xxxxx
Group and its Subsidiaries if the book value of such assets, when added to the
book value of all other assets sold, leased, transferred or disposed of by
Xxxxx Group and such Subsidiaries (other than in the ordinary course of
business) during the same fiscal year, exceeds 5% of the consolidated assets of
Xxxxx Group and its Subsidiaries determined as of the end of the immediately
preceding fiscal year.
(b) Xxxxx Group will not permit any material Subsidiary (except
members of the XXXXX Group) to issue or sell any shares of stock of any class
(including as "stock" for the purpose of this subsection any warrants, rights
or options to purchase or otherwise acquire stock or other Securities
exchangeable for or convertible into stock) of such Subsidiary to any Person
other than Xxxxx Group or a Wholly-Owned Subsidiary, except for the purpose of
qualifying directors, or except in satisfaction of the validly pre-existing
preemptive rights of minority shareholders in connection with the simultaneous
issuance of stock to Xxxxx Group and/or a Subsidiary whereby Xxxxx Group and/or
such Subsidiary maintain their same proportionate interest in such Subsidiary.
(c) Xxxxx Group will not sell, transfer or otherwise dispose of
any shares of stock in any material Subsidiary other than members of the XXXXX
Group (except to qualify directors) or any Indebtedness of any material
Subsidiary, and will not permit any Subsidiary to sell, transfer or otherwise
dispose of (except to Xxxxx Group or a Wholly-Owned Subsidiary) any shares of
stock or any Indebtedness of any material Subsidiary, where "material
Subsidiary" for purposes of Section 7.13(b) and (c) means any Subsidiary
constituting or providing 5% or more of the consolidated assets or revenues of
Xxxxx Group and its Subsidiaries.
Section 7.14. Use of Property and Facilities. (a) Xxxxx Group
will, and will cause each Subsidiary to, comply in all material respects with
the requirements of all federal, state and local environmental and health and
safety laws, rules, regulations and orders applicable to or pertaining to the
Properties or business operations of Xxxxx Group or any Subsidiary.
(b) A Borrower shall provide the Banks with copies of any material
notice or other instrument of the type described in Section 5.12(b) hereof
within five (5) Business Days after receiving such notice or instrument and of
any non-material notice or instrument at
-38-
44
least annually along with the financial statements required to be delivered
pursuant to Section 7.6(a)(ii).
Section 7.15. Fixed Charge Coverage Ratio. Xxxxx Group will at
the end of each fiscal quarter maintain a Fixed Charge Coverage Ratio,
calculated for the four quarter period ending with such fiscal quarter, of not
less than 2.00 to 1.00.
Section 7.16. Consolidated Tangible Net Worth. Xxxxx Group will
at all times maintain Consolidated Tangible Net Worth in an amount not less
than $80,000,000.
Section 7.17. Adjusted Consolidated Net Worth. Xxxxx Group will
at all times maintain an Adjusted Consolidated Net Worth of not less than
$160,000,000 plus 75% of the cumulative amount of consolidated net income of
Xxxxx Group and its Subsidiaries for each fiscal quarter of Xxxxx Group
commencing after September 30, 1995 through the most recently completed fiscal
quarter (without deduction for any consolidated net loss during any such fiscal
quarter), plus 75% of the proceeds from any capital stock of Xxxxx Group issued
after September 30, 1995, minus redemptions of up to $50,000,000 in Xxxxx Group
common stock after September 30, 1995.
Section 7.18. Funded Debt to Cash Flow Ratios. (a) Xxxxx Group
will not permit the Non-XXXXX Funded Debt to Cash Flow Ratio to exceed 5.0 to
1.00 at the end of any fiscal quarter.
(b) Xxxxx Group will not permit the Total Funded Debt to Cash Flow
Ratio to exceed 7.0 to 1.0 at the end of any fiscal quarter.
(c) If any Debt of XXXXX is excluded from the computation of Total
Funded Debt as Non-Recourse Debt, Xxxxx Group shall provide to the Banks an
explanation for such exclusion and copies of the documentation governing such
Debt. If after reviewing such documentation and Xxxxx Group's explanation for
how the documentation evidences Non-Recourse Debt, the Required Banks
reasonably question such classification, in order to further assist their
review the Required Banks may request, and Xxxxx Group shall provide at its
expense, an opinion of XxXxxx X. Xxxxx, III, or other legal counsel acceptable
to the Required Banks, confirming the classification of such Debt as
Non-Recourse Debt.
Section 7.19. Restricted Investments and Contingent Obligations.
Xxxxx Group and its Subsidiaries shall not make, retain or have outstanding a
Restricted Investment (including, without limitation, those listed on
Schedule 7.19 hereto) or a Contingent Obligation to the extent that the sum of
all Restricted Investments and all Contingent Obligations (other than
Restricted Investments in the XXXXX Group and Contingent Obligations solely
supporting obligations of the XXXXX Group) of Xxxxx Group and its Subsidiaries
(other than the XXXXX Group), computed on a consolidated basis in accordance
with GAAP, except as otherwise expressly provided in the definition of
Restricted Investment, would exceed $10,000,000 plus 35% of Adjusted
Consolidated Net Worth.
-39-
45
Section 7.20. Investments in XXXXX. The aggregate amount of the
Restricted Investments on a consolidated basis of Xxxxx Group and its
Subsidiaries in the XXXXX Group (calculated without revaluing such investment
based on the XXXXX Group income or loss) may not exceed at any time the lesser
of (i) 50% of Adjusted Consolidated Net Worth and (ii) $80,000,000.
Section 7.21. Subsidiary Debt. No Subsidiary (except members of
the XXXXX Group) shall incur any Debt or any Guaranty of Indebtedness of any
other Person of the type described in clauses (i)-(v) or (viii) of the
definition of Debt except (x) Debt to Xxxxx Group or any other Subsidiary
(except members of the XXXXX Group) and (y) additional Debt and Guaranties of
such type of such Subsidiaries (computed without duplication) in an aggregate
outstanding principal amount not to exceed 10% of Adjusted Consolidated Net
Worth, in all cases under these clauses (x) and (y) incurred in the ordinary
course of business.
SECTION 8. EVENTS OF DEFAULT AND REMEDIES.
Section 8.1. Events of Default. Any one or more of the
following shall constitute an Event of Default:
(a) default in the payment when due of the principal
amount of any Loan or of any Reimbursement Obligation, or default for
a period of three (3) days in the payment when due of any other
obligation hereunder;
(b) default by a Borrower in the observance or
performance of any covenant set forth in Sections 7.1, 7.7, 7.9
(except as provided in Section 8.1(d) below), 7.13, 7.14(b) and
7.15-7.20;
(c) default by a Borrower in the observance or
performance of the covenant set forth in Section 7.21, which is not
remedied within ninety (90) days;
(d) default by a Borrower (i) in the observance or
performance of any covenant set forth in Section 7.9 hereof to the
extent the relevant Lien was not created through any agreement of, or
through any judgment or other judicial order against, a Borrower or
Subsidiary or (ii) in the observance or performance of any other
provision hereof or of any other Credit Document not mentioned in (a),
(b) or (c) above, which is not remedied within thirty (30) days after
notice thereof to the Borrowers by the Agent;
(e) (i) default shall occur in the payment when due of
any Indebtedness or Contingent Obligation in an aggregate principal
amount of $1,000,000 or more of a Borrower or any Subsidiary or (ii)
default shall occur under any indenture, agreement or other instrument
under which any Indebtedness or Contingent Obligation of a Borrower or
any Subsidiary in an aggregate principal amount of $5,000,000 or more
may be issued or created and such default shall continue for a period
of time sufficient to permit the holder or beneficiary of such
Indebtedness or Contingent Obligation or a trustee therefor to cause
the acceleration of the maturity of any such Indebtedness or
-40-
46
Contingent Obligation or any mandatory unscheduled prepayment, purchase or
funding thereof;
(f) any representation or warranty made herein or in any
other Credit Document by a Borrower, or in any statement or
certificate furnished pursuant hereto or pursuant to any other Credit
Document by a Borrower, or in connection with any Credit Event proves
untrue in any material respect as of the date of the issuance or
making, or deemed making or issuance, thereof;
(g) Xxxxx Group or any Subsidiary shall (i) have entered
involuntarily against it an order for relief under the United States
Bankruptcy Code, as amended, (ii) not pay, or admit in writing its
inability to pay, its debts generally as they become due, (iii) make
an assignment for the benefit of creditors, (iv) apply for, seek,
consent to, or acquiesce in, the appointment of a receiver, custodian,
trustee, examiner, liquidator or similar official for it or any
substantial part of its property, (v) institute any proceeding seeking
to have entered against it an order for relief under the United States
Bankruptcy Code, as amended, to adjudicate it insolvent, or seeking
dissolution, winding up, liquidation, reorganization, arrangement,
adjustment or composition of it or its debts under any law relating to
bankruptcy, insolvency or reorganization or relief of debtors or fail
to file an answer or other pleading denying the material allegations
of any such proceeding filed against it, (vi) take any corporate
action in furtherance of any matter described in parts (i)-(v) above,
or (vii) fail to contest in good faith any appointment or proceeding
described in Section 8.1(h) hereof;
(h) a custodian, receiver, trustee, examiner, liquidator
or similar official shall be appointed for Xxxxx Group or any
Subsidiary or any substantial part of any of their Property, or a
proceeding described in Section 8.1(g)(v) shall be instituted against
Xxxxx Group or any Subsidiary, and such appointment continues
undischarged or such proceeding continues undismissed or unstayed for
a period of sixty (60) days;
(i) Xxxxx Group shall fail at any time to own 94% (on a
fully diluted basis) of the Voting Stock of the XXXXX Group directly
or indirectly through one or more Subsidiaries in which it holds 94%
or more of the Voting Stock;
(j) Xxxxx Group or any Subsidiary shall fail within
thirty (30) days to pay, bond or otherwise discharge any judgment or
order for the payment of money in excess of $5,000,000, which is not
stayed on appeal or otherwise being appropriately contested in good
faith;
(k) either Borrower or any ERISA Affiliate shall fail to
pay when due an amount or amounts aggregating in excess of $5,000,000
which it shall have become liable to pay to the PBGC or to a Plan
under Title IV of ERISA; or notice of intent to terminate a Plan or
Plans having aggregate Unfunded Vested Liabilities in excess of
$5,000,000 (collectively, a "Material Plan") shall be filed under
Title_IV of ERISA by either Borrower, any ERISA Affiliate, any plan
administrator or any combination of
-41-
47
the foregoing; or the PBGC shall institute proceedings under Title IV
of ERISA to terminate or to cause a trustee to be appointed to
administer any Material Plan or a proceeding shall be instituted by a
fiduciary of any Material Plan against either Borrower or any ERISA
Affiliate to enforce Section 515 or 4219(c)(5) of ERISA and such
proceeding shall not have been dismissed within thirty (30) days
thereafter; or a condition shall exist by reason of which the PBGC
would be entitled to obtain a decree adjudicating that any Material
Plan must be terminated;
(l) any person or group of persons (within the meaning of
Section 13 or 14 of the Securities and Exchange Act of 1934, as
amended) shall acquire legal or beneficial ownership (within the
meaning of Rule 13d-3 promulgated by the SEC under said Act) of 30% or
more in voting power of the outstanding Voting Stock of Xxxxx Group (a
"Change of Control"); or
(m) an "event of default" (as defined therein) shall
occur under any Bond Document, if it permits the Bond Letter of Credit
Issuer to declare an early expiration date for a Bond Letter of
Credit, accelerate the Bonds secured by a Bond Letter of Credit, not
reinstate any interest component of a Bond Letter of Credit or take
any similar action or remedy under a Reimbursement Agreement.
Section 8.2. Non-Bankruptcy Defaults. When any Event of Default
other than those described in Sections 8.1(g) or (h) hereof has occurred and is
continuing, the Agent shall, by notice to the relevant Borrower, (a) if so
directed by the Required Banks, terminate the remaining Commitments to such
Borrower and all other obligations of the Banks to such Borrower hereunder on
the date stated in such notice (which may be the date thereof); (b) if so
directed by the Required Banks, declare the principal of and the accrued
interest on all outstanding Notes of such Borrower to be forthwith due and
payable and thereupon all of said Notes, including both principal and interest,
shall be and become immediately due and payable together with all other amounts
payable under this Agreement without further demand, presentment, protest or
notice of any kind; and (c) if so directed by the Required Banks, demand that
Xxxxx Group immediately pay to the Agent the full amount then available for
drawing under each or any Letter of Credit, and Xxxxx Group agrees to
immediately make such payment and acknowledges and agrees that the Banks would
not have an adequate remedy at law for failure by Xxxxx Group to honor any such
demand and that the Agent, for the benefit of the Banks, shall have the right
to require Xxxxx Group to specifically perform such undertaking whether or not
any drawings or other demands for payment have been made under any Letter of
Credit. The Agent, after giving notice to a Borrower pursuant to Section 8.1
or this Section 8.2, shall also promptly send a copy of such notice to the
other Banks, but the failure to do so shall not impair or annul the effect of
such notice. A notice under clauses (a) or (b) of this Section 8.2, or both,
may be delivered to one or to both Borrowers depending on the instructions of
the Required Banks.
Section 8.3. Bankruptcy Defaults. When any Event of Default
described in subsection (g) or (h) of Section 8.1 hereof has occurred and is
continuing, then all outstanding Notes shall immediately become due and payable
together with all other amounts payable under this Agreement without
presentment, demand, protest or notice of any kind,
-42-
48
the obligation of the Banks to extend further credit pursuant to any of the
terms hereof shall immediately terminate, and Xxxxx Group shall immediately pay
to the Agent the full amount then available for drawing under all outstanding
Letters of Credit, Xxxxx Group acknowledging that the Banks would not have an
adequate remedy at law for failure by Xxxxx Group to honor any such demand and
that the Banks, and the Agent on their behalf, shall have the right to require
Xxxxx Group to specifically perform such undertaking whether or not any
drawings or other demands for payment have been made under any of the Letters
of Credit.
Section 8.4. Collateral for Undrawn Letters of Credit. (a) If
the prepayment of the amount available for drawing under any or all outstanding
Letters of Credit is required under Section 1.2(b) or under Section 8.2 or 8.3
above, Xxxxx Group shall forthwith pay the amount required to be so prepaid, to
be held by the Agent as provided in subsection (b) below.
(b) All amounts prepaid pursuant to subsection (a) above shall be
held by the Agent in a separate collateral account (such account, and the
credit balances, properties and any investments from time to time held therein,
and any substitutions for such account, any certificate of deposit or other
instrument evidencing any of the foregoing and all proceeds of and earnings on
any of the foregoing being collectively called the "Account") as security for,
and for application by the Agent (to the extent available) to, the
reimbursement of any payment under any Letter of Credit then or thereafter made
by an Issuing Bank, and to the payment of the unpaid balance of any Loans
(whether direct Loans to Xxxxx Group or Loans to XXXXX, which are all
guaranteed by Xxxxx Group pursuant to Section 11 hereof) and all other
obligations of Xxxxx Group hereunder. The Account shall be held in the name of
and subject to the exclusive dominion and control of the Agent for the benefit
of the Agent, the Issuing Banks and the other Banks. If and when requested by
Xxxxx Group, the Agent shall invest funds held in the Account from time to time
in direct obligations of, or obligations the principal of and interest on which
are unconditionally guaranteed by, the United States of America with a
remaining maturity of one year or less, provided that the Agent is irrevocably
authorized to sell investments held in the Account when and as required to make
payments out of the Account for application to amounts due and owing from Xxxxx
Group to the Agent, the Issuing Bank or the other Banks; provided, however,
that if (i) Xxxxx Group shall have made payment of all such obligations
referred to in subsection (a) above, (ii) all relevant preference or other
disgorgement periods relating to the receipt of such payments have passed, and
(iii) no Letters of Credit, Commitments, Loans or other obligations remain
outstanding hereunder, then the Agent shall repay to Xxxxx Group any remaining
amounts held in the Account.
(c) As security for the payment when due of all of the
Obligations, Xxxxx Group hereby pledges and assigns to the Agent for the
benefit of the Agent and the Banks (including the Issuing Banks), and grants to
the Agent for the benefit of the Agent and the Banks (including the Issuing
Banks), a general lien on and security interest in and right of set-off
against, all of its right, title and interest in and to the Account.
-43-
49
Section 8.5. Bond Letters of Credit. In addition to the
remedies otherwise described in this Section 8 or in any other Credit Document
or Bond Document, upon the occurrence of an Event of Default hereunder, the
Agent, at the request of the Required Banks, shall direct the Bond Letter of
Credit Issuer to exercise one or more of the following rights and remedies:
(a) give notice of the occurrence of an Event of Default hereunder (or of an
"event of default" under the applicable Reimbursement Agreement) to the
applicable Trustee directing an acceleration, redemption or tender of the
applicable Bonds, thereby causing the applicable Bond Letter of Credit to
terminate the number of days thereafter specified in such Bond Letter of
Credit; (b) if permitted under the terms of the applicable Bond Letter of
Credit, give notice that an amount drawn under a Bond Letter of Credit to pay
interest on Bonds will not be reinstated; and/or (c) pursue any rights and
remedies provided to the Issuing Bank and/or the Agent under the Bond
Documents. Each Bank acknowledges that if the notice described in clause (b)
of the preceding sentence is not delivered on a timely basis, the interest
component of the applicable Bond Letter of Credit will reinstate in accordance
with its terms.
Section 8.6. Notice of Default. (a) By Agent. The Agent shall
give notice to the Borrowers under Section 8.1(d) hereof promptly upon being
requested to do so by any Bank and shall thereupon notify all the Banks
thereof.
(b) For Issuing Banks. No Issuing Bank shall be deemed to have
knowledge or notice of the occurrence of any Default or Event of Default,
unless such Issuing Bank shall have received written notice from the Agent (or,
with respect to a Default or Event of Default under Section 8.1(m), from any
party to a Bond Document, which notice shall then promptly be delivered by the
Issuing Bank to the Agent). The Bond Letter of Credit Issuer shall take such
action with respect to such Default or Event of Default under the Reimbursement
Agreements and the Bond Documents as shall be requested by the Agent in
accordance with Section 8.5; provided that unless and until such Issuing Bank
shall have received any such request, such Issuing Bank may (but shall not be
obligated to) take such action, or refrain from taking such action, concerning
such Default or Event of Default as it shall deem advisable and in the best
interest of the Banks, except any action resulting in the acceleration,
redemption or mandatory tender of any Bonds or the nonreinstatement of the
interest component of any Bond Letter of Credit, which shall only be taken at
the request of the Agent acting on the instructions of the Required Banks.
Section 8.7. Expenses. The Borrowers agree to pay to the Agent
and each Bank, and any other holder of any Note outstanding hereunder, all
expenses incurred or paid by the Agent or such Bank or any such holder,
including reasonable attorneys' fees (which may be in-house attorneys) and
court costs, in connection with any Default or Event of Default hereunder or in
connection with the enforcement of any of the terms hereof or of any of the
other Credit Documents.
SECTION 9. CHANGE IN CIRCUMSTANCES.
Section 9.1. Change of Law. Notwithstanding any other
provisions of this Agreement or any Note, if at any time any change in
applicable law or regulation or in the
-44-
50
interpretation thereof makes it unlawful for any Bank to make or continue to
maintain Eurodollar Loans or to give effect to its obligations as contemplated
hereby, such Bank shall promptly give notice thereof to the Borrowers and such
Bank's obligations to make or maintain Eurodollar Loans under this Agreement
shall terminate until it is no longer unlawful for such Bank to make or
maintain Eurodollar Loans. The relevant Borrower(s) shall prepay on demand the
outstanding principal amount of any such affected Eurodollar Loans, together
with all interest accrued thereon and all other amounts due and payable to such
Bank under this Agreement; provided, however, subject to all of the terms and
conditions of this Agreement, the relevant Borrower or Borrowers may then elect
to borrow the principal amount of the affected Eurodollar Loans from such Bank
by means of Domestic Rate Loans from such Bank that shall not be made ratably
by the Banks but only from such affected Bank.
Section 9.2. Unavailability of Deposits or Inability to
Ascertain, or Inadequacy of, LIBOR. If on or prior to the first day of any
Interest Period for any Borrowing of Eurodollar Loans:
(a) the Agent determines that deposits in United States
Dollars (in the applicable amounts) are not being offered to it in the
eurodollar market for such Interest Period, or
(b) Banks having 50% or more of the aggregate amount of
the Commitments (excluding the Commitment of the Agent as a Bank)
advise the Agent that the LIBOR as determined by the Agent will not
adequately and fairly reflect the cost to such Banks of funding their
Eurodollar Loans for such Interest Period,
then the Agent shall forthwith give notice thereof to the Borrowers and the
Banks, whereupon until the Agent notifies the Borrowers that the circumstances
giving rise to such suspension no longer exist, which notification the Agent
shall promptly give the Borrowers when it determines such circumstances no
longer exist, the obligations of the Banks to make Eurodollar Loans shall be
suspended.
Section 9.3. Increased Cost and Reduced Return. (a) If, on or
after the date hereof, the adoption of any applicable law, rule or regulation,
or any change therein, 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 its Lending Office), including (if applicable) in its capacity as the
Issuing Bank hereunder, with any request or directive (whether or not having
the force of law) of any such authority, central bank or comparable agency:
(i) shall subject any Bank (or its Lending Office) to any
tax, duty or other charge with respect to its Eurodollar Loans, its
Notes, its Letter(s) of Credit, or its participation in any thereof,
any Reimbursement Obligations owed to it, or its obligation to make
Eurodollar Loans, issue a Letter of Credit, or to participate therein,
or shall change the basis of taxation of payments to any Bank (or its
Lending Office) of the principal of or interest on its Eurodollar
Loans, Letter(s) of Credit, or
-45-
51
participations therein, or any other amounts due under this Agreement
in respect of its Eurodollar Loans, Letter(s) of Credit, or
participations therein, any Reimbursement Obligations owed to it, or
its obligation to make Eurodollar Loans, issue a Letter of Credit, or
acquire participations therein (except for changes in the rate of tax
on the overall net income of such Bank or its Lending Office); or
(ii) shall impose, modify or deem applicable any reserve,
special deposit or similar requirements (including, without
limitation, any such requirement imposed by the Board of Governors of
the Federal Reserve System, but excluding any such requirement
included in an applicable Eurodollar Reserve Percentage) against
assets of, deposits with or for the account of, or credit extended by,
any Bank (or its Lending Office) or shall impose on any Bank (or its
Lending Office) or on the United States market for certificates of
deposit or the interbank market any other condition affecting its
Eurodollar Loans, its Notes, its Letters(s) of Credit, or its
participation in any thereof, any Reimbursement Obligation owed to it,
or its obligation to make Eurodollar Loans, to issue a Letter of
Credit or to participate therein;
and the result of any of the foregoing is to increase the cost to such Bank (or
its Lending Office) of making or maintaining any Eurodollar Loan, issuing or
maintaining a Letter of Credit, or participating therein, or to reduce the
amount of any sum received or receivable by such Bank (or its Lending Office)
under this Agreement or under its Notes with respect thereto, by an amount
deemed by such Bank to be material, then, within fifteen (15) days after demand
by such Bank (with a copy to the Agent), the Borrowers shall pay to such Bank
such additional amount or amounts as will compensate such Bank for such
increased cost or reduction.
(b) If, after the date hereof, any Bank (including as an Issuing
Bank) shall have determined that the adoption of any applicable law, rule or
regulation regarding capital adequacy, or any change therein (including,
without limitation, any revisions in the Final Risk-Based Capital Guidelines of
the Board of Governors of the Federal Reserve System (12 CFR Part 208, Appendix
A; 00 XXX Xxxx 000, Xxxxxxxx X) or of the Office of the Comptroller of the
Currency (12 CFR Part 3, Appendix A), or in any other applicable capital rules
heretofore adopted and issued by any governmental authority), 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 its Lending Office) with
any request or directive regarding capital adequacy (whether or not having the
force of law) of 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, or
on the capital of any corporation controlling such Bank, as a consequence of
its obligations hereunder 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 capital adequacy) by an amount deemed by
such Bank to be material, then from time to time, within fifteen (15) days
after demand by such Bank (with a copy to the Agent), the Borrowers shall pay
to such Bank such additional amount or amounts as will compensate such Bank for
such reduction.
-46-
52
(c) A certificate of a Bank setting forth such amount or amounts
as shall be necessary to compensate such Bank or the corporation controlling it
as specified in subsection (b) above shall be delivered to the Borrowers (with
a copy to the Agent) and shall be conclusive absent manifest error. The
Borrowers shall be obligated to pay each Bank the amount shown as due on any
such certificate delivered by it within 10 Business Days after their receipt of
the same.
(d) In the event any Bank (including, if applicable, in its
capacity as an Issuing Bank) delivers a certificate pursuant to subsection (c)
above or gives notice under Section 9.1 that it will not fund or maintain
Eurodollar Loans, the Borrowers may require, at their expense, such Bank to
assign (in accordance with Section 12.12 hereof) all its interests, rights and
obligations hereunder (including all of its Commitment, the Loans at the time
owing to it, and the Notes and participations in Letters of Credit held by it
or, in the case of an assignment solely of an Issuing Bank's rights and
obligations, solely its rights and obligations in such capacity) to a financial
institution specified by the Borrowers (a "Substitute Bank"), provided that (i)
such assignment shall not conflict with or violate any law, rule or regulation
or order of any court or other governmental agency or instrumentality, (ii) the
Borrowers shall have received the written consent of the Agent and Issuing
Banks (other than the affected Issuing Bank in the case of an assignment by it
in such capacity), which consent shall not be unreasonably withheld, to such
assignment and (iii) the Borrowers shall have paid to the assigning Bank all
monies then due to it under the Credit Documents (including pursuant to this
Section 9.3) with the Substitute Bank purchasing all accrued but not yet due
Obligations owed such assigning Bank.
(e) Promptly after any Bank becomes aware of any circumstance
which will, in its sole judgment, result in a request for increased
compensation pursuant to Section 9.3(b), such Bank shall notify the Borrowers
thereof (with a copy to the Agent). Failure on the part of any Bank so to
notify the Borrowers or to demand compensation for any increased costs or
reduction in amounts received or receivable or reduction in return on capital
with respect to any period shall not constitute a waiver of such Bank's right
to demand compensation with respect to such period or any other period. The
protection of this Section 9.3 shall be available to each Bank and Agent
regardless of any possible contention of the invalidity or inapplicability of
the law, rule, regulation, guideline or other change or condition which shall
have occurred or been imposed.
Section 9.4. Lending Offices. Each Bank may, at its option,
elect to make its Loans hereunder at the branch, office or affiliate specified
on the appropriate signature page hereof (each a "Lending Office") for each
type of Loan available hereunder or at such other of its branches, offices or
affiliates as it may from time to time elect and designate in a written notice
to the Borrowers and the Agent.
Section 9.5. Discretion of Bank as to Manner of Funding.
Notwithstanding any other provision of this Agreement, each Bank shall be
entitled to fund and maintain its funding of all or any part of its Loans in
any manner it sees fit, it being understood, however, that for the purposes of
this Agreement all determinations hereunder shall be made as if each Bank had
actually funded and maintained each Eurodollar Loan through the
-47-
53
purchase of deposits in the eurodollar interbank market having a maturity
corresponding to such Loan's Interest Period and bearing an interest rate equal
to the LIBOR for such Interest Period.
SECTION 10. THE AGENT.
Section 10.1. Appointment and Authorization of Agent. Each Bank
hereby appoints Bank of Montreal as Agent hereunder and hereby authorizes the
Agent to take such action as Agent on its behalf and to exercise such powers
under the Credit Documents as are delegated to such Agent by the terms hereof,
together with such powers as are reasonably incidental thereto.
Section 10.2. Agent and Affiliates. The Agent shall have the
same rights and powers under this Agreement and the other Credit Documents as
any other Bank and may exercise or refrain from exercising the same as though
it were not Agent, and the Agent and its affiliates may accept deposits from,
lend money to, and generally engage in any kind of business with either
Borrower or any Affiliate of a Borrower as if it were not an Agent hereunder.
The term Bank as used herein and in all other Credit Documents, unless the
context otherwise clearly requires, includes the Agent in its individual
capacity as a Bank.
Section 10.3. Action by Agent. The obligations of the Agent
hereunder are only those expressly set forth herein. Without limiting the
generality of the foregoing, the Agent shall not be required to take any action
with respect to any Event of Default, except as expressly provided in
Sections 8.2, 8.3 and 8.6(a).
Section 10.4. Consultation with Experts. The Agent may consult
with legal counsel, independent public accountants and other experts selected
by it and shall not be liable for any action taken or omitted to be taken by it
in good faith in accordance with the advice of such counsel, accountants or
experts.
Section 10.5 Liability of Agent and Issuing Bank; Credit
Decision. Neither the Agent nor any Issuing Bank, nor any of their respective
directors, officers, agents, or employees, shall be liable for any action taken
or not taken by it in connection with this Agreement, any Letter of Credit or
any other Credit Document (i) with the consent or at the request of the Required
Banks or (ii) in the absence of its own gross negligence or willful misconduct.
Neither the Agent nor any Issuing Bank, nor any of their respective directors,
officers, agents or employees, shall be responsible for or have any duty to
ascertain, inquire into or verify (i) any statement, warranty or representation
made in connection with this Agreement, any other Credit Document or any Credit
Event; (ii) the performance or observance of any of the covenants or agreements
of either Borrower contained in any Credit Document; (iii) the satisfaction of
any condition specified in Section 6 hereof, except receipt of items required to
be delivered to it under Section 6; or (iv) the validity, effectiveness or
genuineness of this Agreement, the Notes, any Letter of Credit, any other Credit
Document or any other instrument or writing furnished in connection herewith, or
the perfection, value, worth or collectibility of any Credit Document, and
neither the Agent nor any Issuing Bank makes any representation of any kind or
character with respect to any
-48-
54
such matter mentioned in this sentence. Neither the Agent nor any Issuing Bank
shall incur any liability by acting in reliance upon any notice, consent,
certificate, other document or statement (whether written or oral) believed by
it to be genuine or to be sent by the proper party or parties. In particular,
neither the Agent nor any Issuing Bank shall have any responsibility for
confirming the accuracy of any Compliance Certificate or other document or
instrument received by it hereunder. The Agent and each Issuing Bank shall
each in all cases be fully justified in failing or refusing to act hereunder
unless it shall be indemnified to its reasonable satisfaction by the Banks
against any and all liability and expense which may be incurred by it by reason
of taking or continuing to take any such action. The Agent may treat the owner
of any Note as the holder thereof until written notice of transfer shall have
been filed with the Agent signed by such owner in form satisfactory to the
Agent. Each Bank acknowledges that it has independently and without reliance
on the Agent, any Issuing Bank or any other Bank and based upon such
information, investigations and inquiries as its deems appropriate made its own
credit analysis and decision to extend credit to the Borrowers in the manner
set forth herein. It shall be the responsibility of each Bank to keep itself
informed as to the creditworthiness of the Borrowers and the Subsidiaries, and
the Agent and Issuing Bank shall not have any liability to any Bank with
respect thereto.
Section 10.6. Costs and Expenses. Each Bank agrees to reimburse
the Agent for all out-of-pocket costs and expenses suffered or incurred by the
Agent in performing its duties hereunder or in the exercise of any right or
power imposed or conferred upon the Agent hereby, to the extent that the Agent
is not promptly reimbursed for same by the Borrowers, all such costs and
expenses to be borne by the Banks ratably in accordance with the amounts of
their respective Percentages.
Section 10.7. Indemnity. The Banks shall ratably, in accordance
with their Percentages, indemnify and hold the Agent, and its directors,
officers, employees, agents and representatives (including as such any security
trustee therefor) harmless from and against any liabilities, losses, costs or
expenses suffered or incurred by them hereunder or in connection with the
transactions contemplated hereby, regardless of when asserted or arising,
except to the extent they are promptly reimbursed for the same by the Borrowers
and except to the extent that any event giving rise to a claim was caused by
the gross negligence or willful misconduct of the party seeking to be
indemnified. The obligations of the Banks under this Section 10.7 and all
other parts of this Section 10 shall survive termination of this Agreement.
Section 10.8. Resignation of Agent and Successor Agent. The
Agent may resign at any time by giving written notice thereof to the Banks and
the Borrowers. Upon any such resignation, the Required Banks shall have the
right to appoint a successor Agent with the consent of the Borrowers. If no
successor Agent shall have been so appointed by the Required Banks, and shall
have accepted such appointment, within thirty (30) days after the retiring
Agent's giving of notice of resignation, then the retiring Agent may, on behalf
of the Banks, appoint a successor Agent, which shall be any Bank hereunder or
any commercial bank organized under the laws of the United States of America or
of any State thereof and having a combined capital and surplus of at least
$200,000,000. Upon the acceptance of its appointment as an Agent hereunder,
such successor Agent shall thereupon succeed to and
-49-
55
become vested with all the rights and duties of the retiring Agent, and the
retiring Agent shall be discharged from its duties and obligations hereunder.
After any retiring Agent's resignation hereunder as Agent, the provisions of
this Section 10 shall inure to its benefit as to any actions taken or omitted
to be taken by it while it was Agent.
SECTION 11. XXXXX GROUP GUARANTEE.
Section 11.1. The Guarantee. To induce the Banks to provide the
several credits described herein, Xxxxx Group hereby unconditionally and
irrevocably guarantees to the Banks, the Issuing Banks, the Agent, and to each
of them, the due and punctual payment of all present and future indebtedness of
XXXXX evidenced by or arising out of this Agreement, the Notes of XXXXX or any
other Credit Documents, including, but not limited to, the due and punctual
payment of principal of and interest on the Notes of XXXXX and the due and
punctual payment of all other sums now or hereafter owed by XXXXX under the
Credit Documents as and when the same shall become due and payable, whether at
their stated maturity, by acceleration or otherwise, according to the terms
hereof and thereof. In case of failure by XXXXX punctually to pay any
indebtedness guaranteed hereby, Xxxxx Group hereby unconditionally agrees to
make such payment or to cause such payment to be made punctually as and when
the same shall become due and payable, whether at stated maturity, by
acceleration or otherwise, and as if such payment were made by XXXXX.
Section 11.2. Guarantee Unconditional. The obligations of Xxxxx
Group as guarantor under this Section 11 shall be unconditional and absolute
and, without limiting the generality of the foregoing, shall not be released,
discharged or otherwise affected by:
(a) any extension, renewal, settlement, compromise,
waiver or release in respect of any obligation of XXXXX under this
Agreement, any Note or any other Credit Document by operation of law
or otherwise;
(b) any modification or amendment of or supplement to
this Agreement, any Note or any other Credit Document (it being
understood that Xxxxx Group hereunder must consent to any
modification, amendment or supplement to this Agreement, its Notes or
any other Credit Document to which it is a party);
(c) any change in the corporate existence, structure or
ownership of, or any insolvency, bankruptcy, reorganization or other
similar proceeding affecting XXXXX or its assets or any resulting
release or discharge of any obligation of XXXXX contained in this
Agreement, any Note or any other Credit Document;
(d) the existence of any claim, set-off or other rights
which Xxxxx Group may have at any time against the Agent, any Issuing
Bank, any Bank or any other Person, whether or not arising in
connection with a Credit Document, provided that nothing herein shall
prevent the assertion of any such claim by separate suit or compulsory
counterclaim;
-50-
56
(e) any invalidity or unenforceability relating to or
against XXXXX for any reason of this Agreement, any Note or any other
Credit Document, or any provision of applicable law or regulation
purporting to prohibit the payment by XXXXX of the principal of or
interest on any Note or any other amount payable by it under this
Agreement or any other Credit Document; or
(f) any other act or omission to act or delay of any kind
by the Agent, any Issuing Bank, any Bank or any other Person (other
than an express accord and satisfaction between a Bank or the Agent
and Xxxxx Group in so far as it expressly discharges an obligation) or
any other circumstance whatsoever that might, but for the provisions
of this paragraph, constitute a legal or equitable discharge of the
obligations of Xxxxx Group under this Section 11.
Section 11.3. Discharge Only Upon Payment in Full; Reinstatement
in Certain Circumstances. Xxxxx Group's obligations under this Section 11
shall remain in full force and effect until the commitments to XXXXX are
terminated and the principal of and interest on the Notes of XXXXX and all
other amounts payable by XXXXX under this Agreement, any Note and all other
Credit Documents shall have been paid in full. If at any time any payment of
the principal of or interest on any Note or any other amount payable by XXXXX
under this Agreement or any other Credit Document is rescinded or must be
otherwise restored or returned upon the insolvency, bankruptcy or
reorganization of XXXXX, or otherwise, Xxxxx Group's obligations under this
Section 11 with respect to such payment shall be reinstated at such time as
though such payment had become due but had not been made at such time.
Section 11.4. Waivers. (a) General. Xxxxx Group irrevocably
waives acceptance hereof, presentment, demand, protest and any notice not
provided for herein, as well as any requirement that at any time any action be
taken by the Agent, any Issuing Bank, any other Bank or any other Person
against XXXXX or any other Person.
(b) Subrogation. Xxxxx Group will not exercise any rights it may
acquire by way of subrogation by any payment made hereunder, or otherwise,
until all the Obligations owed by XXXXX shall have been paid in full subsequent
to the Termination Date. If any amount shall be paid to Xxxxx Group on account
of such subrogation rights at any time prior to the later of (x) the payment in
full of the Obligations and all other amounts payable by such Guarantor
hereunder and (y) the Termination Date, such amount shall be held in trust for
the benefit of the Agent and the Banks and shall forthwith be paid to the Agent
or be credited and applied upon the Obligations, whether matured or unmatured,
in accordance with the terms of this Agreement.
Section 11.5. Stay of Acceleration. If acceleration of the time
for payment of any amount payable by XXXXX under this Agreement, any Note or
any other Credit Document is stayed upon the insolvency, bankruptcy or
reorganization of XXXXX, all such amounts otherwise subject to acceleration
under the terms of this Agreement shall nonetheless be payable by Xxxxx Group
hereunder forthwith on demand by Agent made at the request of the Required
Banks.
-51-
57
Section 11.6. Removal of XXXXX. Xxxxx Group may at any time
remove XXXXX as a Borrower hereunder, without any need for the consent of any
Bank or XXXXX, by paying or causing XXXXX to pay all Obligations hereunder owed
by XXXXX and directing that the XXXXX Revolving Commitments are terminated.
Thereupon, XXXXX shall have no right to borrow hereunder, this Agreement shall
automatically be considered amended so that all references to Borrowers are
references to Xxxxx Group as the sole Borrower hereunder, and the Guarantee in
this Section 11 shall terminate except to the extent it may be reinstated
pursuant to Section 11.3.
SECTION 12. MISCELLANEOUS.
Section 12.1. Withholding Taxes. (a) Payments Free of
Withholding. Except as otherwise required by law and subject to Section
12.1(b) hereof, each payment by either Borrower under this Agreement or the
Notes shall be made without withholding for or on account of any present or
future taxes (other than overall net income taxes on the recipient) imposed by
or within the jurisdiction in which such Borrower is domiciled, any
jurisdiction from which such Borrower makes any payment, or any political
subdivision or taxing authority thereof or therein. If any such withholding is
so required, the relevant Borrower shall make the withholding, pay the amount
withheld to the appropriate governmental authority before penalties attached
thereto or interest accrues thereon and forthwith pay such additional amount as
may be necessary to ensure that the net amount actually received by each Bank
(including as an Issuing Bank) and the Agent free and clear of such taxes
(including such taxes on such additional amount) is equal to the amount which
that Bank or the Agent (as the case may be) would have received had such
withholding not been made. If the Agent or any Bank pays any amount in respect
of any such taxes, penalties or interest the relevant Borrower shall reimburse
the Agent or such Bank for that payment on demand in the currency in which such
payment was made. If a Borrower pays any such taxes, penalties or interest, it
shall deliver official tax receipts evidencing that payment or certified copies
thereof to the Bank or Agent on whose account such withholding was made (with a
copy to the Agent if not the recipient of the original) on or before the
thirtieth day after payment. If any Bank or the Agent determines it has
received or been granted a credit against or relief or remission for, or
repayment of, any taxes paid or payable by it because of any taxes, penalties
or interest paid by a Borrower and evidenced by such a tax receipt, such Bank
or Agent shall, to the extent it can do so without prejudice to the retention
of the amount of such credit, relief, remission or repayment, pay to the
Borrower such amount as such Bank or Agent determines is attributable to such
deduction or withholding and which will leave such Bank or Agent (after such
payment) in no better or worse position than it would have been in if the
Borrower had not been required to make such deduction or withholding. Nothing
in this Agreement shall interfere with the right of each Bank and the Agent to
arrange its tax affairs in whatever manner it thinks fit nor oblige any Bank or
the Agent to disclose any information relating to its tax affairs or any
computations in connection with such taxes.
(b) U.S. Withholding Tax Exemptions. Each Bank (including each
Issuing Bank and the Agent in its capacity as a Bank) that is not a United
States person (as such term is defined in Section 7701(a)(30) of the Code)
shall submit to each Borrower and (except for
-52-
58
the Agent) to the Agent on or before the earlier of the date the initial
Borrowing is made hereunder and thirty (30) days after the date hereof, two
duly completed and signed copies of either Form 1001 (relating to such Bank and
entitling it to a complete exemption from withholding under the Code on all
amounts to be received by such Bank, including fees, pursuant to this Agreement
and the Loans) or Form 4224 (relating to all amounts to be received by such
Bank, including fees, pursuant to this Agreement and the Loans) of the United
States Internal Revenue Service. Thereafter and from time to time, each Bank
shall submit to each Borrower and the Agent such additional duly completed and
signed copies of one or the other of such Forms (or such successor forms as
shall be adopted from time to time by the relevant United States taxing
authorities) as may be (i) notified by a Borrower, directly or through the
Agent, to such Bank and (ii) required under then-current United States law or
regulations to avoid or reduce United States withholding taxes on payments in
respect of all amounts to be received by such Bank, including fees, pursuant to
this Agreement or the Loans. Upon the request of a Borrower or the Agent, each
Bank that is a United States person (as such term is defined in Section
7701(a)(30) of the Code) shall submit to the Borrowers and Agent a certificate
to the effect that it is such a United States person.
(c) Inability of Bank to Submit Forms. If any Bank determines, as
a result of any change in applicable law, regulation or treaty, or in any
official application or interpretation thereof, that it is unable to submit to
the Borrowers or Agent any form or certificate that such Bank is obligated to
submit pursuant to subsection (b) of this Section 12.1 or that such Bank is
required to withdraw or cancel any such form or certificate previously
submitted or any such form or certificate otherwise becomes ineffective or
inaccurate, such Bank shall promptly notify the Borrowers and Agent of such
fact and, without affecting either Borrower's obligations hereunder, the Bank
shall to that extent not be obligated to provide any such form or certificate
and will be entitled to withdraw or cancel any affected form or certificate, as
applicable.
Section 12.2. No Waiver of Rights. No delay or failure on the
part of the Agent or any Bank or on the part of the holder or holders of any
Note in the exercise of any power or right shall operate as a waiver thereof,
nor as an acquiescence in any default, nor shall any single or partial exercise
thereof preclude any other or further exercise of any other power or right, and
the rights and remedies hereunder of the Agent, the Banks and the holder or
holders of any Notes are cumulative to, and not exclusive of, any rights or
remedies which any of them would otherwise have.
Section 12.3. Non-Business Day. If any payment of principal or
interest on any Loan shall fall due on a day which is not a Business Day,
interest at the rate such Loan bears for the period prior to maturity shall
continue to accrue on such principal from the stated due date thereof to and
including the next succeeding Business Day, on which the same shall be payable.
Section 12.4. Documentary Taxes. Each Borrower agrees that it
will pay any documentary, stamp or similar taxes payable in respect to this
Agreement, any Note of its or (in the case of Xxxxx Group) any Letter of
Credit, including interest and penalties, in the
-53-
59
event any such taxes are assessed irrespective of when such assessment is made
and whether or not any credit is then in use or available hereunder.
Section 12.5. Survival of Representations. All representations
and warranties made herein or in certificates given pursuant hereto shall
survive the execution and delivery of this Agreement and of the Notes and the
issuance of any Letter of Credit, and shall continue in full force and effect
with respect to the date as of which they were made as long as any credit is in
use or available hereunder.
Section 12.6. Survival of Indemnities. All indemnities and all
other provisions relative to reimbursement to the Banks of amounts sufficient
to protect the yield of the Banks with respect to the Loans and the Letters of
Credit, including, but not limited to, Section 1.11 and Section 9.3 hereof,
shall survive the termination of this Agreement and the payment of the Loans,
the Reimbursement Obligations and the Notes; provided that any Bank seeking
compensation pursuant to Section 1.11 or Section 9.3 hereof shall make a claim
for such compensation no later than six (6) months after the termination of all
Commitments hereunder and the repayment of all Loans and Reimbursement
Obligations.
Section 12.7. Sharing of Set-Off. Each Bank agrees with each
other Bank a party hereto that if such Bank shall receive and retain any
payment, whether by set-off or application of deposit balances or otherwise
("Set-off"), on any of the Loans or Reimbursement Obligations in excess of its
ratable share of payments on all such obligations then outstanding to the
Banks, then such Bank shall purchase for cash at face value, but without
recourse, ratably from each of the other Banks such amount of the Loans or
Reimbursement Obligations, or participations therein, held by each such other
Bank (or interest therein) as shall be necessary to cause such Bank to share
such excess payment ratably with all the other Banks; provided, however, that
if any such purchase is made by any Bank, and if such excess payment or part
thereof is thereafter recovered from such purchasing Bank, the related
purchases from the other Banks shall be rescinded ratably and the purchase
price restored as to the portion of such excess payment so recovered, but
without interest.
Section 12.8. Notices. Except as otherwise specified herein, all
notices hereunder shall be in writing (including telecopy or telex) and shall
be given to such party at its address or telecopier number set forth below or
such other address or telecopier number as such party may hereafter specify by
notice to the Agent and the Borrowers, given by United States certified or
registered mail, by overnight courier service, by telegram or by other
telecommunication device capable of creating a written record of such notice
and its receipt. Notices hereunder to the Banks and the Agent shall be
addressed to their respective addresses, telecopier and telephone number set
forth on the signature pages hereof, and to the Borrowers to:
-54-
60
For Xxxxx Group:
The Xxxxx Group Inc.
00000 Xxxxxxx Xxxxxxxxx
Xxxxxxxxx, Xxxx 00000
Attention: Treasurer (with a copy to
General Counsel)
Telephone: 000-000-0000
Telecopy: 000-000-0000
For XXXXX:
c/o The Xxxxx Group Inc.
00000 Xxxxxxx Xxxxxxxxx
Xxxxxxxxx, Xxxx 00000
Attention: Treasurer (with a copy to
General Counsel)
Telephone: 000-000-0000
Telecopy: 000-000-0000
Each such notice, request or other communication shall be effective
(i) if given by telecopier, when such telecopy is transmitted to the telecopier
number specified in this Section 12.8 or on the signature pages hereof and a
confirmation of such telecopy has been received by the sender, (ii) if given by
mail, five (5) days after such communication is deposited in the mail,
registered with return receipt requested, addressed as aforesaid or (iii) if
given by any other means (including by overnight courier), when delivered at
the addresses specified in this Section or on the signature pages hereof;
provided that any notice given pursuant to Section 1 or Section 2 shall be
effective only upon receipt.
Section 12.9. Counterparts. This Agreement may be executed in
any number of counterparts, and by the different parties on different
counterparts, each of which when executed shall be deemed an original but all
such counterparts taken together shall constitute one and the same instrument.
Section 12.10. Successors and Assigns. This Agreement shall be
binding upon each Borrower and its respective successors and assigns, and shall
inure to the benefit of each of the Banks and the benefit of their respective
successors and assigns, including any subsequent holder of any Note. Neither
Borrower may assign any of its rights or obligations hereunder without the
written consent of all of the Banks, subject to Section 7.13.
Section 12.11. Participants and Note Assignees. Each Bank shall
have the right at its own cost to grant participations (to be evidenced by one
or more agreements or certificates of participation) in the Loans made, and/or
Commitments held, and the Reimbursement Obligations, or participations therein,
held by such Bank at any time and from time to time, and to assign its rights
under such Loans, or the Notes evidencing such Loans, and/or the
-55-
61
Reimbursement Obligations, or participations therein, to one or more other
Persons; provided that no such participation or assignment shall relieve any
Bank of any of its obligations under this Agreement, and provided further that
no such assignee or participant shall have any rights under this Agreement
except as provided in this Section 12.11, and the Agent shall have no
obligation or responsibility to such participant or assignee, except that
nothing herein provided is intended to affect the rights of an assignee of a
Note to enforce the Note assigned. Any party to which such a participation or
assignment has been granted shall have the benefits of Section 1.11 and Section
9.3 hereof. Any Bank assigning any Note hereunder shall give prompt notice
thereof to the relevant Borrower and the Agent, who shall in each case only be
required to treat such assignee of a Note as the holder thereof after receipt
of such notice.
Section 12.12. Assignment of Commitments by Banks. Each Bank
shall have the right at any time, with the prior consent of each Issuing Bank
and the Agent, which shall not be unreasonably withheld, to sell, assign,
transfer or negotiate all or any part of its Commitments (including the same
percentage of its Notes, outstanding Loans, participations in Letters of Credit
and its other extensions of credit to each Borrower hereunder) to one or more
commercial banks or other financial institutions that have the capability to
fund Loans at the interest rates provided in this Agreement, provided that the
assignee must assume Commitments of at least $5,000,000; the same Percentage of
the assigning Bank's Commitments to Xxxxx Group and XXXXX must be assigned; the
Percentage so assigned shall remain constant, not vary by its terms, and shall
be the same for all Sections of this Agreement; and assignments from a Bank to
one of its affiliates do not require the consent of either Issuing Agent or the
Agent. Upon any such assignment, its notification to the Agent, and (except in
the case of an assignment by a Bank to an affiliate) the payment to the Agent
of a $2,500 recordation and administration fee, any such assignee shall become
a Bank for all purposes hereunder to the extent of the Commitments it assumes,
and the assigning Bank shall be released from its obligations, and will have
released its rights, hereunder to the extent of such assignment.
Section 12.13. Amendments. Any provision of any Credit Document
may be amended or waived if, but only if, such amendment or waiver is in
writing and is signed by (a) each Borrower (or only Xxxxx Group in the case of
Section 11), (b) the Required Banks, and (c) if the rights or duties of an
Issuing Bank or the Agent are affected thereby, the relevant Issuing Bank or
Agent; provided that:
(i) no amendment or waiver pursuant to this Section 12.13
shall (A) increase any Commitment or Percentage of any Bank without
the consent of such Bank or (B) reduce the amount of or postpone the
date for payment of any principal of or interest on any Loan or of any
Reimbursement Obligation or of any fee payable hereunder without the
consent of all the Banks;
(ii) no amendment or waiver pursuant to this Section
shall, unless signed by each Bank, change the provisions of this
Section 12.13, the definition of Required Banks, or any condition
precedent set forth in Section 6 hereof or the provisions of
-56-
62
Sections 8.1(g), 8.1(h), 8.3 or 9, or affect the number of Banks required to
take any action under this Agreement; and
(iii) the Bond Letter of Credit Issuer may enter into any
amendment or modification of, or may waive compliance with the terms
of any Bond Document (other than an Indenture), without the consent of
any Bank; provided that without the consent of all the Banks, the Bond
Letter of Credit Issuer shall not execute any instrument agreeing to
any amendment or modification of, or waiver of compliance with any
Reimbursement Agreement or Bond Document, (i) which would (A) reduce
the principal of, or interest on, any L/C Obligation, (B) postpone the
due date for any payment of principal of, or interest on, any L/C
Obligation, (C) extend the termination date of a Bond Letter of Credit
beyond the Termination Date, (D) increase the amount of any Bond
Letter of Credit or otherwise increase in any material manner the
obligations of the Participating Banks, or (E) release or otherwise
adversely affect the interests of the Participating Banks in any
collateral granted under any Reimbursement Agreement or Bond Document,
or (ii) after the occurrence of a Default or Event of Default of which
it has notice as provided in Section 8.6(b); provided that (i) at
least thirty (30) days before extending the termination date of any
Bond Letter of Credit the Bond Letter of Credit Issuer shall notify
the Agent, which will then notify each Bank, of such proposed
extension and (ii) the Bond Letter of Credit Issuer will not waive any
"event of default" arising under any Reimbursement Agreement or Bond
Document without the consent of the Required Banks.
Section 12.14. Headings. Section headings used in this Agreement
are for reference only and shall not affect the construction of this Agreement.
Section 12.15. Legal Fees and Indemnification. The Borrowers
agree to pay the reasonable fees and disbursements of Messrs. Xxxxxxx and
Xxxxxx, counsel to the Agent, in connection with the preparation and execution
of this Agreement, and any amendment, waiver or consent related hereto, whether
or not the transactions contemplated herein are consummated. The Borrowers
further agree to indemnify each Bank and the Agent, and their respective
directors, officers and employees, against all losses, claims, damages,
penalties, judgments, liabilities and expenses (including, without limitation,
all expenses of litigation or preparation therefor) which any of them may pay
or incur arising out of or relating to this Agreement, any Note, any Letter of
Credit, any drawing thereunder, any of the transactions contemplated hereby or
thereby or the direct or indirect application or proposed application of the
proceeds of any Loan or Credit Document, other than those which arise from the
gross negligence or willful misconduct of the party claiming indemnification.
The Borrowers, upon demand by the Agent or a Bank at any time, shall reimburse
the Agent or such Bank for any legal or other expenses incurred in connection
with investigating or defending against any of the foregoing except if the same
is directly due to the gross negligence or willful misconduct of the party to
be indemnified or to any breach of an express contractual obligation owed by
the party to be indemnified; provided, however, that (i) the Borrowers shall
not, in connection with any such proceeding or related proceedings in the same
jurisdiction, be liable for the reasonable fees and expenses of more
-57-
63
than one separate law firm for the Banks and the Agent (which shall be selected
by the Agent after consultation with the Borrowers), (ii) the Agent and each
Bank shall consult with the Borrowers from time to time at the request of the
Borrowers regarding the conduct of the defense in any such proceeding and will
cooperate with the Borrowers in their joining as parties to any such proceeding
to the extent the Borrowers are permitted by law to join such litigation, and
(iii) the Borrowers shall not be obligated to pay an amount of any settlement
entered into without their consent (which shall not be unreasonably withheld).
The obligations of the Borrowers under this Section 12.15 shall survive the
termination of this Agreement.
Section 12.16. Governing Law. This Agreement and the Notes, and
the rights and duties of the parties hereto, shall be construed and determined
in accordance with the internal laws of the State of Illinois.
Section 12.17. Entire Agreement. This Agreement and the other
Credit Documents constitute the entire understanding of the parties hereto with
respect to the subject matter hereof and thereof and any prior or
contemporaneous agreements, whether written or oral, with respect thereto are
superseded hereby.
Section 12.18. Termination of 1994 Credit Agreement and XXXXX Loan
Facilities. Xxxxx Group and each of the Banks hereunder that is a party to the
1994 Credit Agreement consents to the termination of the "Commitments" on the
Effective Date, notwithstanding the notice requirements for such termination
set forth in Section 1.12 of the 1994 Credit Agreement. Because such Banks
hereunder constitute the "Required Banks" under the 1994 Credit Agreement, the
1994 Credit Agreement shall terminate and all amounts payable thereunder,
including accrued and unpaid commitment fees payable under Section 2.1(a)
thereof, shall be payable on the Effective Date. XXXXX and each of the three
Banks party to separate $20,000,000 loan facilities (i.e. Bank of America
Illinois, Bank of Montreal, and Society National Bank) with XXXXX agree that
each such loan facility to which it is a party is terminated on the Effective
Date with all amounts owing thereunder payable as provided therein.
Section 12.19. Nature of Borrower Obligations. The obligations of
each Borrower under its Notes are several, not joint, subject to Xxxxx Group's
Guarantee of MARTA's obligations under its Notes set forth in Section 11.
Wherever herein the Borrowers, rather than only an individual Borrower,
undertake a payment obligation, such obligation is joint and several, and each
Borrower agrees that its joint and several obligation to make such payment is
absolute and unconditional in the same manner as set forth in Section 11.2 for
Xxxxx Group's Guarantee.
-58-
64
Upon your acceptance hereof in the manner hereinafter set forth, this
Agreement shall be a contract between us for the purposes hereinabove set
forth.
Dated as of December 18, 1995.
THE XXXXX GROUP INC.
By /s/ Xxxxx X. XxXxxxx
-------------------------------
Its Vice President, Treasurer
---------------------------
& Controller
---------------------------
By /s/ Xxxxxx X. Xxxx
-------------------------------
Its President and CEO
---------------------------
XXXXX TECHNOLOGIES, INC.
By /s/ Xxxxx X. XxXxxxx,
-------------------------------
Its Vice President, Treasurer
---------------------------
& Controller
---------------------------
By /s/ Xxxxxx X. Xxxx
-------------------------------
Its President and CEO
---------------------------
Accepted and Agreed to as of the day and year last above written.
Address and Amount of Commitments:
Address: 000 X. XxXxxxx Xxxxxx BANK OF MONTREAL, CHICAGO
Xxxxxxx, Xxxxxxxx 00000 BRANCH, in its individual
Attn: Xxxx Xxxxxx capacity as a Bank and as Agent
Telecopy: (000) 000-0000
Telephone: (000) 000-0000 By /s/ Xxxx X. Xxxxxx
-----------------------------
Its Director
--------------------------
Xxxxx Group Revolving Commitment: $18,788,179.91
XXXXX Revolving Commitment: $15,102,040.82
Participation in Bond Letters of Credit: $3,109,779.27
Percentage: 25.17006803%
Lending Offices:
000 X. XxXxxxx Xxxxxx
Xxxxxxx, XX 00000
-59-
65
Address: 000 X. XxXxxxx Xxxxxx XXXX XX XXXXXXX ILLINOIS, in its
Xxxxxxx, XX 00000 capacities as a Bank, as an
Attn: Xxxx X. Xxxxxx Issuing Bank, and as Co-Agent
Telecopy: (000) 000-0000
Telephone: (000) 000-0000
By /s/ Xxxx X. Xxxxxx
-----------------------------
Its Managing Director
--------------------------
Xxxxx Group Revolving Commitment: $12,694,716.16
XXXXX Revolving Commitment: $10,204,081.63
Participation in Bond Letters of Credit: $2,101,202.21
Percentage: 17.00680272%
Lending Offices:
000 X. XxXxxxx Xxxxxx
Xxxxxxx, XX 00000
-60-
66
SOCIETY NATIONAL BANK
Address: 000 Xxxxxx Xxxxxx
00-000-0000
Xxxxxxxxx, XX 00000-0000
Attn: Xxxxx X. Xxxxx
Telecopy: (000) 000-0000
Telephone: (000) 000-0000 By /s/ Xxxxxxxx X. Xxxx
Xxxxx Group Revolving Commitment: $12,694,716.16 ----------------------
XXXXX Revolving Commitment: $10,204,081.63 Its Vice President
Participation in Bond Letters of Credit: $2,101,202.21 -------------------
Percentage: 17.00680272%
Lending Offices:
000 Xxxxxx Xxxxxx
Xxxxxxxxx, XX 00000-0000
-61-
00
XXXXXXXXXX XXXXXXXXXXX XX,
XXXXXXX BRANCH
Address: 000 X. Xxxxxx Xxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxx Xxxxx, Vice President By /s/ Xxxxxx Xxxxx
Telecopy: (000) 000-0000 -----------------------
Telephone: (000) 000-0000 Its Vice President
Xxxxx Group Revolving Commitment: $7,616,829.69 --------------------
XXXXX Revolving Commitment: $6,122,448.98 By /s/ Xxxxxx X. X'Xxxxxx
Participation in Bond Letters of Credit: $1,260,721.33 ----------------------
Percentage: 10.20408163% Its Vice President
-------------------
Lending Offices:
000 X. Xxxxxx Xxxxx, Xxxxx 000
Xxxxxxx, XX 00000
-00-
00
XXXXXXXX XXXX XX, Xxx Xxxx
and Grand Cayman Branches, in its
Address: 00 Xxxx Xxxxxx capacities as a Bank and as an
Xxx Xxxx, Xxx Xxxx 00000 Issuing Bank
Attn: Xxxxxxx Xxxxxxxxxx By /s/ Xxxxxxx Xxxxxxxxxx
Telecopy: (000) 000-0000 --------------------------------
Telephone: (000) 000-0000 Its Vice President
-----------------------------
By /s/ Xxxxxx Xxxxxx
--------------------------------
Its Vice President
-----------------------------
Xxxxx Group Revolving Commitment: $7,616,829.69
XXXXX Revolving Commitment: $6,122,448.98
Participation in Bond Letters of Credit: $1,260,721.33
Percentage: 10.20408163%
Lending Offices: Domestic Rate Loans:
00 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Eurodollar Loans:
Grand Cayman Branch
c/o New York Branch
00 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
-63-
69
NATIONSBANK OF TEXAS, N.A.
Address: 000 Xxxx Xxxxxx
00xx Xxxxx
Xxxxxx, Xxxxx 00000
By /s/ X. Xxxxxxxxxx XxXxxxxxx, IV
--------------------------------
Attn: X. Xxxxxxxxxx XxXxxxxxx, IV
Its Senior Vice President
Telecopy: (000) 000-0000 -----------------------------
Telephone: (000) 000-0000
Xxxxx Group Revolving Commitment: $7,616,829.69
XXXXX Revolving Commitment: $6,122,448.98
Participation in Bond Letters of Credit: $1,260,721.33
Percentage: 10.20408163%
Lending Offices:
000 Xxxx Xxxxxx
00xx Xxxxx
Xxxxxx, Xxxxx 00000
-64-
70
NBD BANK
Address: 000 Xxxxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxx Xxxxxx
Telecopy: (000) 000-0000
Telephone: (000) 000-0000 By /s/ Xxxxxx X. Xxxxxx
----------------------
Xxxxx Group Revolving Commitment: $7,616,829.69
Its Vice President
XXXXX Revolving Commitment: $6,122,448.98 -------------------
Participation in Bond Letters of Credit: $1,260,721.33
Percentage: 10.20408163%
Lending Offices: 000 Xxxxxxxx
Xxxxxxx, Xxxxxxxx 00000
-65-
71
EXHIBIT A
NOTICE OF PAYMENT REQUEST
[Name of Bank] [Date]
[Address]
Attention:
Reference is made to the Credit Agreement dated as of December_18,
1995 among The Xxxxx Group Inc., XXXXX Technologies, Inc., the Banks named
therein, and Bank of Montreal, as Agent (the "Credit Agreement"). Capitalized
terms used herein and not defined herein have the meanings assigned to them in
the Credit Agreement. [Xxxxx Group has failed to pay its Reimbursement
Obligation in the amount of $______________. Your Bank's Percentage of the
unpaid Reimbursement Obligation is $________________] or [The (fill in Issuing
Bank) has been required to return a payment by Xxxxx Group of a Reimbursement
Obligation in the amount of $__________________. Your Bank's Percentage of the
returned Reimbursement Obligations is $____________________.]
Very truly yours,
[Insert Name of Issuing Bank]
By __________________________________
Its _________________________________
72
EXHIBIT B
NOTE
U.S. $___________________ __________________, 199__
FOR VALUE RECEIVED, the undersigned
___________________________________, a ________________________ corporation
(the "Borrower"), promises to pay to the order of
________________________________________________ (the "Bank") on the
Termination Date of the hereinafter defined Credit Agreement at the principal
office of Bank of Montreal in Chicago, Illinois, in immediately available
funds, the principal sum of _____________________________________ Dollars
($_________________) or, if less, the aggregate unpaid principal amount of all
Loans made by the Bank to the Borrower under its Commitment pursuant to the
Credit Agreement and with each Loan to mature and become payable on the last
day of the Interest Period applicable thereto, but in no event later than the
Termination Date, together with interest on the principal amount of each Loan
from time to time outstanding hereunder at the rates, and payable in the manner
and on the dates, specified in the Credit Agreement.
The Bank shall record on its books and records or on the schedule
attached to this Note, which is a part hereof, each Loan made by it to the
Borrower pursuant to its Commitment, together with all payments of principal
and interest and the principal balances from time to time outstanding hereon,
whether the Loan is a Domestic Rate Loan or a Eurodollar Loan and the interest
rate and Interest Period applicable thereto, provided that prior to the
transfer of this Note all such amounts shall be recorded on the schedule
attached to this Note. The record thereof, whether shown on such books and
records or on the schedule to this Note, shall be prima facie evidence of the
same, provided, however, that the failure of the Bank to record any of the
foregoing or any error in any such record shall not limit or otherwise affect
the obligation of the Borrower to repay all Loans made to it pursuant to the
Credit Agreement together with accrued interest thereon.
This Note is one of the Notes referred to in the Credit Agreement
dated as of December 18, 1995, between the Borrower, Bank of Montreal, as
Agent, and others (the "Credit Agreement"), and this Note and the holder hereof
are entitled to all the benefits provided for thereby or referred to therein,
to which Credit Agreement reference is hereby made for a statement thereof.
All defined terms used in this Note, except terms otherwise defined herein,
shall have the same meaning as in the Credit Agreement. This Note shall be
governed by and construed in accordance with the internal laws of the State of
Illinois.
Prepayments may be made hereon and this Note may be declared due prior
to the expressed maturity hereof, all in the events, on the terms and in the
manner as provided for in the Credit Agreement.
73
The Borrower hereby waives demand, presentment, protest or notice of
any kind hereunder.
______________________________________
By____________________________________
Its_________________________________
-2-
74
EXHIBIT C
[FORM OF OPINION]
To each of the Banks named in the
hereinafter-defined Credit Agreement
c/o Bank of Montreal
000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
as Agent under
the Credit Agreement defined below
Gentlemen:
I am Vice President, Secretary and General Counsel of The Xxxxx Group
Inc. and Vice President and Secretary of XXXXX Technologies, Inc. (each a
"Borrower" and collectively the "Borrowers"), and I have acted as counsel for
the Borrowers and am familiar with the actions taken with respect to the
authorization, execution and delivery, and have examined a counterpart of, the
Credit Agreement dated as of December 18, 1995, among the Borrowers and the
Banks and Agent named therein (the "Credit Agreement"), executed by the
Borrowers and the Notes issued by the Borrowers thereunder. All terms used and
not defined herein shall have the meanings assigned to them in the Credit
Agreement.
In connection with this opinion, I have examined such corporate
documents and records of the Borrowers and the Subsidiaries, certificates of
public officials and officers of the Borrowers and the Subsidiaries, and such
other documents, as I have deemed necessary or appropriate for the purposes of
this opinion.
Based upon the foregoing, it is my opinion that:
1. Each Borrower is duly organized, validly existing and in good
standing under the laws of the State of Delaware, is duly qualified as a
foreign corporation and in good standing under the laws of each jurisdiction in
which a failure to so qualify or be in good standing would materially and
adversely affect the ownership of property of, or the business and operations
conducted by, such Borrower and its subsidiaries taken as a whole, or its
ability to perform any of its obligations under any of the Credit Documents.
2. Each of the Borrowers has the corporate power and authority to
execute, deliver and perform the Credit Documents to which it is a party, to
borrow thereunder, and (in the case of Xxxxx Group) to apply for the Letters of
Credit. Each of the Borrowers has taken all necessary corporate action to
authorize such transactions on the terms and conditions of the Credit
Documents, and to authorize the execution, delivery and performance of the
Credit Documents, including, without limitation, in the case of Xxxxx Group,
the Applications for the Letters of Credit. Other than such corporate
approvals and consents that have been obtained, no consent or authorization of,
filing with, or other act by
75
or in respect of, any Person is required in connection with the execution,
delivery, performance, validity or enforceability of any of the Credit
Documents, any borrowings thereunder or the Applications for the Letters of
Credit.
3. Each Credit Document has been duly executed and delivered on
behalf of each Borrower party thereto, and such Credit Documents (assuming due
authorization, execution and delivery by the other parties thereto) constitute
valid and binding obligations of each relevant Borrower, enforceable against
each relevant Borrower in accordance with their respective terms, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors' rights generally and general principles of equity.
4. The execution, delivery and performance of the Credit
Documents by each Borrower party thereto, and the use of the proceeds of
borrowings thereunder and of the credit provided by the Letters of Credit
issued thereunder as provided therein, will not violate or contravene any
provision of law or any judgment or decree, or any charter or bylaw provision
or any material agreement, instrument or undertaking, to which either Borrower
is a party or by which it or any of its Properties is bound and will not result
in, or require, the creation or imposition of any Lien on any of either
Borrower's Properties or revenues.
5. No litigation, investigation or proceeding of or before any
court, arbitrator or governmental authority is pending or, to the best of my
knowledge, threatened by or against either Borrower or any Subsidiary or any of
their respective Properties or revenues that calls into question the validity
or enforceability of any of the Credit Documents or any of the transactions
contemplated thereby or which could have a material adverse effect on the
business, operations, property or financial condition of either Borrower and
its subsidiaries taken as a whole.
6. Neither Borrower is an "investment company" or a company
"controlled" by an "investment company", within the meaning of the Investment
Company Act of 1940, as amended.
My opinions expressed above are limited to the laws of the State of
Ohio, the corporate laws of the State of Delaware, and the federal laws of the
United States. The Credit Documents state that they are governed by the laws
of the State of Illinois. For purposes of these opinions, I have assumed, with
your permission, that the laws of the States of Ohio and Illinois are the same
in all relevant respects.
Very truly yours,
-2-
76
EXHIBIT D
COMPLIANCE CERTIFICATE
This Compliance Certificate is furnished to Bank of Montreal as Agent
pursuant to that certain Credit Agreement dated as of December 18, 1995, by and
among The Xxxxx Group Inc., XXXXX Technologies, Inc., the Banks party thereto
and Bank of Montreal, as Agent. Unless otherwise defined herein, the terms
used in this Compliance Certificate have the meanings ascribed thereto in the
Credit Agreement.
THE UNDERSIGNED HEREBY CERTIFIES THAT:
1. I am the duly elected _______________________ of The Xxxxx
Group Inc.;
2. I have reviewed the terms of the Credit Agreement and I have
made, or have caused to be made under my supervision, a detailed review of the
transactions and conditions of The Xxxxx Group Inc. and its Subsidiaries during
the accounting period covered by the attached financial statements;
3. The examinations described in paragraph 2 did not disclose,
and I have no knowledge of, the existence of any condition or event which
constitutes a Default or Event of Default during or at the end of the period
ending [INSERT FISCAL PERIOD END DATE COVERED BY CERTIFICATE], except as set
forth below;
4. The representations and warranties contained in Section 5 of
the Credit Agreement are true and correct in all material respects as though
made on the date of this Compliance Certificate, except as set forth below; and
5. Schedule 1 attached hereto sets forth financial data and
computations evidencing compliance with certain covenants of the Credit
Agreement, all of which data and computations are true, complete and correct.
All computations are made in accordance with the terms of the Credit Agreement.
Described below are the exceptions, if any, to paragraphs 3 and 4 by
listing, in detail, the nature of the condition or event, the period during
which it has existed and the action which The Xxxxx Group Inc. has taken, is
taking, or proposes to take with respect to each such condition or event:
------------------------------------------------------
------------------------------------------------------
------------------------------------------------------
The foregoing certifications, together with the computations set forth
in Schedule 1 hereto and the financial statements delivered with this
Certificate in support hereof, are made and delivered this _____ day of
___________________, 19___.
___________________________________________
77
SCHEDULE 1 TO COMPLIANCE CERTIFICATE
Compliance Calculations for Credit Agreement
dated as of December 18, 1995
Calculation as of ___________, 19__
A. Fixed Charge Coverage Ratio (Section 7.15)
------------------------------------------
(all computations covering four fiscal quarter period
ending with the fiscal quarter covered by this Certificate)
1. (a) Net Income $_______________
(b) Income Tax Expense $_______________
(c) Interest Expense $_______________
(d) Interest Income $_______________
(e) Sum of Lines 1(a)-(c) $______________
minus Line 1(d)
2. (a) Net Interest Expense (Line 1(c)
minus Line 1(d)) $_______________
(b) Dividends Paid or Accrued on
Preferred Stock $_______________
(c) Expense for operating leases of
real property (other than for
XXXXX Group or
"synthetic leases") $_______________
(d) Imputed interest component of
Capitalized Lease Obligations $_______________
(e) Imputed interest component of
lease expense under "synthetic
leases" $_______________
(f) Sum of Lines 2(a), (b), (d) and (e)
plus any positive difference
between Line 2(c) and $4,000,000 $______________
78
3. Ratio of Line 1(e) to Line 2(f)
(Line 3 is required to be equal or be
greater than 2.00 to 1.00) ________to_______
B. Consolidated Tangible Net Worth (Section 7.16)
----------------------------------------------
1. (a) Consolidated Book Net Worth _______________
(b) Redeemable Preferred Stock _______________
(c) Intangibles _______________
(d) Consolidated Tangible Net Worth
(Line 1(a) minus Lines 1(b) and (c)) $_______________
(Line 1(d) is required to be equal to or greater than $80,000,000)
C. Adjusted Consolidated Net Worth (Section 7.17)
----------------------------------------------
1. (a) Consolidated Book Net Worth _______________
(b) Subordinated Debt _______________
(But not more than 25% of
Line 1(a))
(c) Redeemable Preferred Stock _______________
(d) Adjusted Consolidated Net Worth
(Line 1(a) plus Line 1(b) minus Line 1(c)) ______________
2. (a) All positive Consolidated Net Income
for any fiscal quarter
after September 30, 1995 ________________
(b) Proceeds from issuance of
capital stock after
September 30, 1995 _______________
(c) Amount of redemptions of
common stock after
September 30, 1995 _______________
(d) 75% of Line 2(a), plus
75% of Line 2(b), minus lesser
of Line 2(c) and $50,000,000 ________________
-2-
79
(e) Line 2(d) plus $160,000,000 ______________
(Line 1(d) is required to be equal to
or greater than Line 2(e))
D. Funded Debt to Cash Flow Ratios (Section 7.18)
----------------------------------------------
1. (a) Total Funded Debt (including
Non-Recourse Debt and
Hedging Loans) $______________
(b) Debt of XXXXX Group not supported
by Guaranties (other than Completion
Guaranties) from non-members of
XXXXX Group $______________
(c) Lesser of 25% of (x) Capitalized
Costs of XXXXX Projects supported
by Completion Guaranties from
non-members of XXXXX Group and
(x) maximum dollar liability under
such Completion Guaranties
(calculated separately for each XXXXX
Project and summed) $_______________
(d) Non-Recourse Debt of XXXXX
Group $______________
(e) Hedging Loans (but not
exceeding $15,000,000) $______________
(f) Amount by which Line 1(c) exceeds
recourse Debt financing XXXXX Project
(calculated separately for each
XXXXX Project and summed) $______________
(g) Line 1(a) minus Line 1(b) plus
Line 1(c) minus Line 1(e)
["Non-XXXXX Funded Debt"] $______________
(h) Line 1(a) minus Line 1(d) minus
Line 1(e) plus Line 1(f)
["Total Funded Debt"] $_____________
-3-
80
2. (a) Consolidated Net Income for four
fiscal quarter period ending with fiscal
quarter covered by this Compliance
Certificate $_____________
(b) Portion of Line 2(a) derived
from XXXXX Group $_____________
(c) Cash Dividends Received from
XXXXX Group $_____________
(d) Portion of Line 2(b) derived from
Non-Recourse Projects $_____________
(e) Extraordinary and "unusual or
non-recurring" gains or losses $_____________
(f) Portion of Line 2(e) derived
from XXXXX Group $_____________
(g) Portion of Line 2(f) derived from
Non-Recourse Projects $_____________
(h) Depreciation Expense $_____________
(i) Portion of Line 2(h) derived
from XXXXX Group $_____________
(j) Portion of Line 2(i) derived from
Non-Recourse Projects $_____________
(k) Non-cash amortization expense $_____________
(l) Portion of Line 2(k) derived
from XXXXX Group $_____________
(m) Portion of Line 2(l) derived from
Non-Recourse Projects $_____________
(n) Sum of Lines 2(a), 2(g),
2(h) and 2(k) $_____________
(o) Sum of Lines 2(d), 2(e),
2(j) and 2(m) $_____________
-4-
81
(p) Line 2(n) minus Line 2(o)
["Total Cash Flow"] $_____________
(q) Sum of Lines 2(a), 2(c), 2(f),
2(h) and 2(k) $_____________
(r) Sum of Lines 2(b), 2(e),
2(i) and 2(l) $_____________
(s) Line 2(q) minus Line 2(r)
["Non-XXXXX Xxxx Flow"] $_____________
(t) Ratio of Line 1(g) to Line 2(s) _______to________
(Is required to be
no greater than 5.0
to 1.0)
(u) Ratio of Line 1(h) to Line 2(p) _______to________
(Is required to be no
greater than 7.0 to
1.0)
E. Restricted Investments and Contingent Obligations (Section 7.19)
----------------------------------------------------------------
1. Restricted Investments (not in or by
XXXXX Group) $_________________
2. Contingent Obligations (not supporting
XXXXX Group obligations) $_________________
3. Total of Line 1 and Line 2 $_________________
(Line 3 is required to be
less than or equal to $10,000,000
plus 35% of Adjusted Consolidated Net Worth)
F. Investments in XXXXX (Section 7.20)
1. Investments in XXXXX Group $_________________
2. (a) 50% of Adjusted Consolidated Net
Worth $_________________
(b) $80,000,000 $_________________
The lesser of a and b: $_______________
-5-
82
(Line 1 is required to not exceed line 2)
G. Subsidiary Debt (Section 7.21)
1. Total Debt and Guaranties owed by
Subsidiaries (except XXXXX Group) to third
parties including XXXXX Group and
including Hedging Loans $_________________
2. Hedging Loans owed by Subsidiaries $_________________
3. 10% of Adjusted Consolidated
Net Worth $_________________
(Line 1 minus Line 2 is required to not exceed Line 3)
-6-
83
SCHEDULE 1.2(C)
SCHEDULE OF BOND LETTERS OF CREDIT
Bond Letter of Credit
Bond Letter of Credit Face Amount as of Reimbursement
Number December 18, 1995 Agreement
------ ----------------- ---------
72893 $4,118,357(a) December 18, 1995
(As Restated and Amended)
72993 $5,147,945(b) December 18, 1995
(As Restated and Amended)
73193 $3,088,767(c) December 18, 1995
----------- (As Restated and Amended)
$12,355,069
(a) Such Letter of Credit backs up the Industrial Revenue Bonds (The Xxxxx Group
Project) Series 1985 of the Michigan Strategic Fund.
(b) Such Letter of Credit backs up the Industrial Revenue Bonds (The Xxxxx Group
Project) Series 1985 of the County of Cuyahoga, Ohio.
(c) Such Letter of Credit backs up the Industrial Revenue Bonds (The Xxxxx Group
Project) Series 1987 of the County of Cuyahoga, Ohio.
84
SCHEDULE 5.2
SCHEDULE OF SUBSIDIARIES OF THE XXXXX GROUP INC.
The following is a list of the Subsidiaries of The Xxxxx Group Inc.
(Delaware, 02-03-69), and, indented, Subsidiaries of such Subsidiaries,
including in each case the state or other jurisdiction in which each Subsidiary
was incorporated or organized, and indicating in each case the percentage of
voting securities owned by the immediate parent.
Name of Corporation State/Country of Incorporation Date %
------------------- ------------------------------ ---- -
The Xxxxx Group Canada Limited Ontario, Canada 04-19-72 100
The Xxxxx Group International, Inc. Delaware 07-19-73 100
The Xxxxx Group GmbH Germany 09-29-70 100
The Xxxxx Group International Sales Corp. Barbados 09-15-94 100
Xxxxx Telecom Canada, Inc. (2) Ontario 04-14-93 80
Xxxxx Telecom Group, Inc. Delaware 10-26-88 100
Xxxxx Capital Corporation (3) Delaware 11-10-93 57.26
Antenna Specialists Co., Inc. Delaware 10-07-88 100
Antespec, S.A. de C.V. Mexico 11-14-88 100
Decibel Mobilcom GmbH (1) Germany 07-28-90 100
Decibel Mobilcom Limited (1) England 01-31-91 100
Xxxxxxx Electronics Company (4) Virginia 09-03-86 80
RF Micro Devices, Inc. North Carolina 02-27-92 14.7
Orion Far East Management Inc. (1) Delaware 07-16-81 100
Orion Industries, Inc., Limited (1) Hong Kong 06-01-71 100
Orion Imports & Exports Limited Hong Kong 09-07-73 100
(1)
Orion Industries, Inc. Japan (1) Japan 09-73 100
Orion Industries Taiwan Limited Taiwan 10-73 100
(1)
85
Xxxxx Telecom Group (Italia) S.r.l. Italy 11-14-94 100
FOR.E.M. S.p.A. (5) Italy 10-10-72 80
FOREM France S.a.r.l. (6) France 1993 96
FOREM U.K. Ltd. (7) U.K. 1988 65
MIKOM G.m.b.H. (8) Germany 05-07-85 62
Mitras Ltd. (9) Hungary 1992 60
Xxxxx Telecom Group Limited (1) U.K. 05-08-72 100
XXXXX Technologies, Inc. Delaware 10-14-92 100
Sponmech Limited U.K. 12-22-76 33.3
Turnkey Wireless Solutions, Inc. Delaware 10-31-94 10
276017 Ontario Limited (1) Ontario, Canada 09-11-73 100
(1) These Subsidiaries are not significant in the aggregate and
are no longer active.
(2) 80% of the outstanding capital stock of this subsidiary is
owned by The Xxxxx Group Inc. and the remaining 20% is owned by senior
management of Xxxxx Telecom Canada, Inc.
(3) On a fully diluted basis, 57.26% of the outstanding capital
stock is owned by ATG, 19.35% is owned by Rose Investors and 23.39% is owned by
Philadelphia Ventures.
(4) 80% of the outstanding capital stock of this Subsidiary is
owned by The Xxxxx Group Inc. and the remaining 20% is owned by senior
management of Xxxxxxx Electronics Company.
(5) 40% of the outstanding capital stock of this Subsidiary is
owned by Xxxxx Telecom Group (Italia) S.r.1., which also owns options to
acquire the remaining 60%.
(6) 96% of the outstanding capital stock of this subsidiary is
owned by FOR.E.M. S.p.A. and the remaining 4% is owned by senior management of
FOREM France S.a.r.1.
(7) 65% of the outstanding capital stock of this subsidiary is
owned by FOR.E.M. S.p.A. and the remaining 35% is owned by senior management of
FOREM U.K. Ltd.
(8) 62% of the outstanding capital stock of this subsidiary is
owned by FOR.E.M. S.p.A. and the remaining 38% is owned by the managing
director of MIKOM G.m.b.H.
-2-
86
(9) 60% of the outstanding capital stock of this subsidiary is
owned by MIKOM G.m.b.H. and the remaining 40% is owned by senior management of
Mitras Ltd.
-3-
87
SCHEDULE 5.7
SCHEDULE OF TAXES
* The Company is currently being audited by the IRS relating to the Company's
U.S. Tax Returns for the years ending 1990 - 1992.
88
SCHEDULE 5.12
SCHEDULE OF ENVIRONMENTAL NOTICES
1. Notice in September 1983 from U. S - Environmental Protection Agency
regarding waste disposal by the former Xxxxxx Engineering division of
former Xxxxx Automated Systems Company division of The Xxxxx Group Inc. at
Berlin & Ferro Liquid Incineration Inc., Xxxxxx Creek, Michigan. EPA
requested a $7,475 settlement; Xxxxxx offered $750. Legal action against
Xxxxxx was threatened in December 1986. There has been no activity with
respect to this matter since December 1986. This matter was being handled
by Xxxxxx Xxxxxxxx of Xxxxx, Kendrick, Finkbeiner, Xxxxxxx & Xxxxxx in
Saginaw, Michigan. Xx. Xxxxxxxx reported on February 2, 1993 that it was
his understanding that all of the so-called "non-settlors" had been-sued by
that date and that Xxxxxx was considered not to have actually sent any
waste oil to the Xxxxxx Creek site, and that it therefore seemed highly
unlikely, although not impossible, that a lawsuit in this matter will be
commenced.
2. Notice dated August 6, 1985 from U.S. Environmental Protection Agency that
the EPA considered Xxxxx a potentially responsible party ("PRP") under the
Comprehensive Environmental Response, Compensation, and Liability Act of
1980 ("CERCLA") with respect to alleged environmental contamination at the
KL Avenue Landfill in Oshmeto Township, Michigan. Xxxxx, along with more
than 200 other PRPs, entered into a Consent Decree legal settlement of this
matter with the EPA. The Consent Decree was filed in Federal District Court
for the Western District of Michigan on September 17, 1992. Pursuant to the
terms of the Consent Decree, Xxxxx paid $20,933 to the KL Avenue Facility
Trust in settlement of this matter. This matter was handled by Xxxxx X.
Xxxxxx and Xxxxx Xxxxxxx of Skadden, Arps, Slate, Xxxxxxx & Xxxx,
Washington, D.C.
3. Notice dated April 22, 1986 from U.S. Environmental Protection Agency
identifying the former Crown divisions of The Xxxxx Group Inc. as one of
the PRPs for the cleanup and remediation of hazardous wastes from the
Liquid Disposal, Inc. Superfund Site located in Shelby Township, Michigan.
On January 6, 1989, Xxxxx entered into a Consent Decree as a de MINIMUS
settling party and paid $2,800 to the United States Government. Xxxxx'x
payment was consideration for a covenant of the United States not to xxx or
take administrative action against Xxxxx for any and all civil liability
for causes of action arising under Sections 106 and 107(a) of CERCLA and
Section 7003 of the Resource Conservation and Recovery Act relating to the
site. This matter was handled by Xxxxx Xxxxx of Xxxxxxxxxx, Xxxxxxxxx &
Xxxxxxxxx in Wooster, Ohio. Any future liability arising out of or relating
to this matter has been assumed by TransPro,. Inc. in connection with the
spinoff distribution of TransPro common stock to The Xxxxx Group Inc.'s
stockholders.
4. Notice in April 1987 from Illinois Environmental Protection Agency that the
former G&O Manufacturing Company division of The Xxxxx Group Inc., among
others, is considered to be a PRP for releases of hazardous substances at
the Xxxxxxxx Landfill in Peru, LaSalle County, Illinois. G&O
89
personnel believe, but have not yet been able to document, that its waste
material was sent to another landfill. A group of PRPs, including G&O, have
submitted a proposed work plan to IEPA to address possible contamination at
the site. This plan could cost approximately $2 million, and IEPA has also
suggested a plan which could cost $6 million. G&O has not yet agreed to
participate in the actual cleanup. Any cleanup work is contingent upon
IEPA's obtaining secure access to the site, which IEPA has been unable to
obtain from the present owner. As a result, neither IEPA nor G&O can state
with any certainty whether G&O has any actual liability for the alleged
release of hazardous substances, and any meaningful analysis of G&O's
liability cannot be provided. G&O has continued to meet with other private
parties regarding the site, although its investigation indicates that G&O's
waste was never transported to the site. Because IEPA has been unable to
gain access to the site from the owners, there is no current activity on
this matter. The documents assembled by the generator's group do not
indicate any disposal by G&O at the site, so G&O's proportionate share of
any cleanup cost at this time appears to be zero. According to G&O's
records of all wastes generated during the period in question, all of G&O's
wastes were substantially less than 1% of wastes deposited at the site,
although G&O's records indicated that none of its wastes in fact were
disposed of at the site. This matter is being handled by Xxxxxxx X. Xxxxx
of X'Xxxxxx & Xxxxxx in Chicago, Illinois. Any liability arising out of or
relating to this matter has been assumed by TransPro, Inc. in connection
with the spinoff distribution of TransPro common stock to The Xxxxx Group
Inc.'s stockholders.
5. Lawsuit in August 1983 by two landowners in Canada against the former
National Rubber Company division of The Xxxxx Group Canada Limited, a
wholly owned subsidiary of The Xxxxx Group Inc., and others for damages of
Canadian $3.5 million and punitive damages of Canadian $1 million. The suit
alleges that waste was illegally dumped on the plaintiff Is land by an
unlicensed waste disposal company and that these acts diminished the value
of their land and caused them damages. The Ontario government proposed a
proceeding against Xxxxx requiring it to clean up the property, but this
claim was settled in 1984 by Xxxxx'x paying $150,000 for a 1/3 share of the
then-estimated cleanup costs, and Xxxxx counter-claimed against the
plaintiffs for this amount. This case has since been settled. This case was
handled by Xxxxxxx Xxxxx of Smith, Lyons, Torrance, Xxxxxxxxx & Xxxxx in
Xxxxxxx, Xxxxxxx, Xxxxxx.
6. In 1988, the facility of the former Xxxxxx Machine division of the Xxxxx
Automated Systems Company division of The Xxxxx Group Inc. located at 0000
Xxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx was listed on the Michigan Environmental
Response Act 307 Group B Priority List by the Michigan Department of
Natural Resources because of an area of stained soil around the concrete
footing on the facility. The Michigan Act provides a system for identifying
and prioritizing contaminated sites within Michigan. The Group B listing
means the site has been screened but not fully assessed. The Xxxxxx Machine
division retained Xxxxxx Engineering, Inc. to conduct various tests and to
assist Xxxxxx in removing the property from the State 307 List. Xxxxxx
submitted a work plan for remediation activities in June 1990 to Michigan
Department of Natural Resources. The plan was
2
90
approved, and work commenced in August 1990 and was completed in May 1991.
Although the contamination was remediated to target cleanup levels, it was
noted during the cleanup that foundry sands had been used historically for
fill material on the property. Due to the presence of the contaminated
historic fill, the site remains listed on the State 307 List. However, the
site name and conditions of listing were changed to reflect the current
site conditions and the remediation that had been completed. The Michigan
Department of Natural Resources recently published new Industrial Site Risk
Assessment Cleanup Criteria. Xxxxx is working with Xxxxxx and the Michigan
Department of Natural Resources to determine what further remediation of
the site, if any, is necessary to meet the new cleanup criteria. This
matter is being handled by Xxxx Xxxxxx of Xxxxxxx, Xxxxxx & Xxxx, L.L.P.
7. Order #HM-724 (the "Order") dated July 10, 1991 issued by the State of
Connecticut Department of Environmental Protection, the State's compliance
arm, regarding alleged violations of the Connecticut Hazardous Waste
Management Regulations by the former G&O Manufacturing Company division of
The Xxxxx Group Inc. at its New Haven, Connecticut facility. The alleged
violations included failure to have a contingency plan, failure to conduct
hazardous waste determinations, failure to have a personnel training
program and failure to have an inspection schedule and log. Xxxxx retained
Environmental Management Consultants, Inc. to prepare documents and
implement and oversee the actions required by the Order. Based on
correspondence between DEP and EMC during the late summer and fall of 1991,
Xxxxx believed that it had fully complied with the requirements of the
Order. On December 21, 1992, the Commissioner of Environmental Protection
of the State of Connecticut, the State's enforcement arm, filed a lawsuit
against The Xxxxx Group Inc. in the Superior Court, Judicial District of
Hartford-New Britain at Hartford, Connecticut, seeking damages for the
violations contained in the Order. This lawsuit was settled in December
1993. Pursuant to such settlement, G&O paid a civil penalty in the amount
of $15,000 and conducted two audits to demonstrate G&O's compliance with
the Connecticut Hazardous Waste Management Regulations. This matter was
handled by Xxxx Xxxxxxxxx of Xxxxxx, Xxxxxx & Xxxxxxxx, P.C. Any future
liability arising out of or relating to this matter has been assumed by
TransPro, Inc. in connection with the spinoff distribution of TransPro
common stock to The Xxxxx Group Inc.'s stockholders.
8. Notice dated June 11, 1992 from U.S. Environmental Protection Agency
identifying the former G&O Manufacturing Company division of The Xxxxx
Group Inc. as one of the PRPs for the cleanup and remediation of hazardous
wastes at the Solvents Recovery Service of New England site in Southington,
Connecticut (the "Site"). G&O disposed of three 55 gallon drums of waste
paint at the Site on October 31, 1984. Xxxxx joined the SRSNE Site PRP
Group (the "Group") in late November 1992. The De MINIMUS Committee of the
Group negotiated actively with the EPA to set out the terms of an early DE
MINIMUS settlement. In April 1994, Xxxxx entered into a Consent Decree
settlement agreement, and paid $1,624 in settlement of this claim. The
contacts for the PRP Steering Committee of the Group were Xxx Xxxxxx and
Xxxx Xxxxxxx of Xxxx & Xxxx in Boston, Massachusetts, and the attorney for
small waste generators was Xxxxxx Xxxxxxx of Xxxxxxxxx
3
91
& Manello in Boston, Massachusetts. Any future liability arising out of or
relating to this matter has been assumed by TransPro, Inc. in connection
with the spinoff distribution of TransPro common stock to The Xxxxx Group
Inc. Is stockholders.
9. Notice dated October 1, 1986, from State of Ohio Environmental Protection
Agency ("OEPA") to the former Crown divisions of The Xxxxx Group Inc.
("Crown") regarding cleanup of immediate area around the central hydraulic
unit located in its Orrville, Ohio plant. This notice resulted from a PCB
compliance inspection for the U.S. Environmental Protection Agency under
the authority of the Toxic Substances Control Act (40 CFR, Part 761).
Contamination of concrete, and soil below, resulted from Crown's use of oil
later discovered to be contaminated with PCBs. Crown has conducted a
cleanup of the area with OEPA supervision by removal of concrete and soil,
followed by testing; there have been several such removals. Pursuant to an
agreement with OEPA, Crown has been permitted to fill in and reseal the
area in consideration of putting in three monitoring xxxxx and placing a
notice on the deed to the property that PCB contamination is on the
property. This matter is belong handled by Xxxxx Xxxxx of Buckingham,
Xxxxxxxxx & Xxxxxxxxx in Wooster, Ohio. Any future liability arising out of
or relating to this matter has been assumed by TransPro, Inc. in connection
with the spinoff distribution of TransPro common stock to The Xxxxx Group
Inc.'s stockholders.
10. The Xxxxx Electric and Equipment Company, the predecessor to The Xxxxx
Group Inc., has been joined as a third party defendant in companion actions
filed in the United States District Court for the Western District of
Michigan, Southern Division, Civ. No. 1:92CV713; Civ. No. 4:94CV139 on
September 24, 1993. These cases were filed by the third party plaintiffs
who are themselves defendants in an action under the Comprehensive
Environmental Response, Compensation and Liability Act, 42 USC Section
9613(f) and the Michigan Contribution Among Joint Tortfeasors Act, Mich.
Comp. Xxxx Xxx. Sections 600.2925(a) et seq. The third party plaintiffs
seek recovery pursuant to those statutes for costs of alleged environmental
contamination related to the so-called Verona Well Field site in Battle
Creek, Michigan. The third party plaintiffs seek contribution for an
equitable share of any and all response costs which they may be ordered to
pay in the underlying litigation and any future costs related to the
so-called Xxxxxxx Road site. The Company has been participating in this
litigation pursuant to provisions of the Acquisition Agreement between
Xxxxx and SPX Corporation dated March, 29, 1993 and certain provisions
thereof' concerning indemnification. Xxxxx has joined the DE MINIMIS PRP
group in this matter. In January 1995, Xxxxx entered into a Consent Decree
settlement agreement with the State of Michigan, and paid $1,444 in
settlement of the State's claim. Xxxxx expects to settle the remaining
claims against it in this matter in the near future for approximately
$75,000. This matter is being handled by Xxxxx Xxxxxxxx of Benesch,
Friedlander, Xxxxxx & Aronoff, Cleveland, Ohio.
11. In connection with the sale of its former facility located at, 0000 Xxxxx
Xxxx Xxxxxx, Xxxxxxx, Xxxxxxxx to Sang Hun Xxx on November 10, 1993, The
Xxxxx Group Inc. filed an Environmental Disclosure Document for transfer
4
92
of Real Property with the Illinois Environmental Protection Agency. This
filing was required upon the sale of the facility because the site
contained an underground storage tank which had been filled in place in
1990 in compliance with state and federal environmental laws. This matter
was handled by Xxxx X. Xxxxxxxx of Xxxxxxx & Xxxxx of Chicago, Illinois.
Any future liability arising out of or relating to this matter has been
assumed by TransPro, Inc. in connection with the spinoff distribution of
TransPro common stock to The Xxxxx Group Inc's stockholders.
12. Notification of groundwater sampling results in ongoing environmental
investigation at 0000 Xxxxx Xxxxxx in Hayward, California dated February
16, 1990, provided to the California Regional Water Quality Control Board
pertaining to a building the former G&O Manufacturing Company division of
The Xxxxx Group Inc. vacated in January 1989, as lessee. This matter
relates to soil contamination, which was remediated, and perched -
groundwater which contained certain elevated readings. This matter is being
handled by Xxxxxx Xxxxxxxx of Torrance, California. Any future liability
arising out of or relating to this matter has been assumed by TransPro,
Inc. in connection with the spinoff distribution of TransPro common stock
to The Xxxxx Group Inc's stockholders.
5
93
SCHEDULE 5.15
SCHEDULE OF OUTSTANDING LONG TERM DEBT
1. Letter of Credit in the amount of $4,118,357 entered into with Dresdner
Bank AG backing up Industrial Revenue Bonds (The Xxxxx Group Project)
Series 1985 of the Michigan Strategic Fund.
2. Letter of Credit in the amount of $5,147,945 entered into with Dresdner
Bank AG backing up Industrial Revenue Bonds (The Xxxxx Group Project)
Series 1985 of the County of Cuyahoga, Ohio.
3. Letter of Credit in the amount of $3,088,767 entered into with Dresdner
Bank AG backing up Industrial Revenue Bonds (The Xxxxx Group Project)
Series 1987 of the County of Cuyahoga, Ohio.
4. Note Agreement dated February 16, 1993, for the $15,000,000 8.13%
Guaranteed Series B Senior Notes due February 16, 2003 between The Xxxxx
Group Inc. and The Variable Annuity Life Insurance Company.
5. Xxxxx guarantee in the amount of $1,000,000 in favor of the Florida
Department of Transportation supporting the performance bond for MARTA's
Jacksonville Program to the State of Florida.
6. Xxxxx guarantee in the amount of $4,899,500 in favor of the State of
Maryland supporting the $4,899,500 performance bond for MARTA's Maryland
Program.
7. Xxxxx guarantee in the amount of $1,250,000 in favor of the Texas Air
Control supporting the $1,250,000 performance bond for MARTA's Texas
Program.
8. Letter of Credit in the amount of $8,236,712 entered into with Dresdner
Bank AG backing up Industrial Development Revenue Bonds (The Xxxxx Group
Project) Series 1985 of the City of Wooster, Ohio.
9. FOREM S.P.A. long term credit agreement with Industry Ministry of Italy for
research and development needs. Interest rate fixed at 7.3%. Outstanding
balance at 9/30/95 was Lira 292 million, due 1/1/98.
10. FOREM S. P.A. long term credit agreement with Industry. Ministry of Italy
for research and development needs. Interest rate fixed at 4.5%.
Outstanding balance at 9/30/95 was Lira 1,421 million, due 7/1/00.
11. FOREM S.P.A. long term credit agreement with Industry Ministry of Italy for
research and development needs. Interest rate fixed at 11.28%. Outstanding
balance at 9/30/95 was Lira 597 million, due 1/16/00.
94
12. FOREM S.P.A. long term credit agreement with Industry Ministry of Italy for
research and development needs . Variable interest rate currently at
2.115%. Outstanding balance at 9/30/95 was Lira 1, 144 million, due
3/18/07.
13. FOREM S.P.A. long term credit agreement with Industry Ministry of Italy for
research and development needs. Variable interest rate currently at
2.3175%. Outstanding balance at 9/30/95 was Lira 881 million.
14. FOREM S.P.A. long term credit with Interbanca secured by a first mortgage
on building. Variable interest rate currently at 7.8%. Outstanding balance
at 9/30/95 was Lira 2,067 million, due 7/26/00.
15. FOREM S.P.A. long term credit agreement with Industry Ministry of Italy for
research and development needs. Fixed interest rate at 7.7%. Outstanding
balance at-9/30/95 was Lira 546 million, due 2/25/98.
16. Mikom GmbH long term credit agreement with Deutsche Bank. Outstanding
balance at 9/30/95 was DM 501,389.
17. Mikom GmbH long term credit agreement with Deutsche Bank. Outstanding
balance at 9/30/95 was DM 893,200.
18. Mikom GmbH long term credit agreement with Bayerische Vereinsbank AG.
Outstanding balance at 9/30/95 was DM 411,000.
19. Mikom GmbH long term credit agreement with Dresdner Bank AG. Outstanding
balance at 9/30/95 was DM 414,000.
20. XXXXX performance bond in the amount of $700,000 in favor of the Ohio
Environmental Protection Agency for MARTA's Ohio I/M 240 Program.
21. XXXXX performance bond in the amount $300,000 in favor of Ohio
Environmental Development Limited Partnership for MARTA's Ohio I/M 240
Program.
22. XXXXX performance bond in the amount of $134,750 in favor of Prince Xxxxxx
County, Maryland for MARTA's Maryland Program.
23. Xxxxx guaranty in the amount of DM 50,000 (est. US $ 35,000) in favor of
Lease Plan in Germany resulting from the sale of lease receivables from
Xxxxx GmBH to Lease Plan.
24. Letter of Credit in the amount of $1,332,000 in favor of Travelers
Indemnity Company covering Xxxxx Group's reserves for casualty insurance.
25. Letter of Credit in the amount of $300,000 in favor of The Zurich Insurance
Company (U.S. Branch) covering Xxxxx Group's reserves for casualty
insurance.
2
95
26. Letter of Credit in the amount of $350,000 in favor of the Home Insurance
Company covering Xxxxx Group's reserves for casualty insurance.
27. Xxxxx Group guaranty in the amount of $4,000,000 in favor of Bayersiche
Vereinsbank, Milan, Italy branch resulting from the purchase agreement
between Xxxxx Group and FOREM Sp.A. This guaranty covers the incremental
amounts to FOREM based on the performance of FOREM.
28. XXXXX capitalized lease with an aggregate principal amount of $219,560 at
September 30, 1995.
3
96
SCHEDULE 7.9
SCHEDULE OF OUTSTANDING LIENS
Liens securing the following Indebtedness:
1. Industrial Development Revenue Bonds (The Xxxxx Group Inc. Project) Series
1985 of the Michigan Strategic Fund and associated instruments, in the
initial aggregate principal amount of $4,000,000.
2. Floating Rate Demand Industrial Development Revenue Bonds (The Xxxxx Group
Inc. Project) Series 1985 of the County of Cuyahoga, Ohio and associated
instruments, in the initial aggregate principal amount of $5,000,000.
3. Floating Rate Demand Industrial Development Revenue Bonds (The Xxxxx Group
Inc. Project) Series 1987 of the County of Cuyahoga, Ohio and associated
instruments, in the initial aggregate principal amount of $3,000,000.
4. Long term note secured by a mortgage on plant and equipment of FOREM in
favor of InterBanca. Total Lira 5,167,948,550 or $3,236,058 using an f/x
rate of 1,597.
5. Reimbursement Agreements described in Section 1.2(c).
6. Long term note in the initial amount of DM 1,340,000 secured by a mortgage
on the Mikom building in favor of Deutsche Bank. Mortgage deed dated April
4, 1989.
97
SCHEDULE 7.19
SCHEDULE OF RESTRICTED INVESTMENTS
AND CONTINGENT OBLIGATIONS
Restricted Investments
----------------------
* National Rubber 4,344,000
* RF Micro Devices 3,201,359
---------
TOTAL RESTRICTED INVESTMENTS 7,545,359
Contingent obligations
----------------------
* The Company is self-insured for health care,
worker's compensation, general liability and
product liability up to predetermined amounts
above which third party insurance applies.
The Company is contingently liable to insurance
carriers under its worker's compensation and
liability policies for amounts in excess of
reserves established by the Company. N/A
* In connection with the sale of National Rubber, the
Company remains as guarantor under certain
long-term leases. Such leases have been assigned to
the purchasing company. 738, 400
* Various environmental related liabilities as
described in schedule 5.12. N/A
* The Company has assigned to TransPro, Inc. the
Floating Rate Monthly Demand Industrial Development
Revenue Bonds (The Xxxxx Group Inc. Project - 1983
Series) of the Connecticut Development Authority
and associated instruments, in the initial
aggregate amount of $5 million. 5,000,000
