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Exhibit 10.2
Execution Copy
KEY PLASTICS, INC.
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CREDIT AGREEMENT
dated as of March 24, 1997
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NBD BANK, as Agent
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TABLE OF CONTENTS
Section Page
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ARTICLE I1
1.1 Certain Definitions ......................................... 1
1.2 Other Definitions; Rules of Construction .................... 18
1.3 Accounting Terms and Determinations ......................... 18
ARTICLE II ................................................................. 19
2.1 Commitments of the Lenders .................................. 19
2.2 Termination and Reduction of Revolving Credit Commitments ... 21
2.3 Fees ........................................................ 21
2.4 Disbursement of Advances .................................... 22
2.5 Conditions for First Disbursement ........................... 24
2.6 Further Conditions for Disbursement ......................... 26
2.7 Subsequent Elections as to Borrowings ....................... 26
2.8 Limitation of Requests and Elections ........................ 28
2.9 Minimum Amounts; Limitation on Number of Borrowings ......... 28
2.10 Borrowing Base Adjustments ................................. 27
2.11 Security and Collateral .................................... 29
ARTICLE III ................................................................ 29
3.1 Principal Payments .......................................... 28
3.2 Interest Payments ........................................... 29
3.3 Letter of Credit Reimbursement Payments ..................... 31
3.4 Payment Method .............................................. 32
3.5 No Setoff or Deduction ...................................... 34
3.6 Payment on Non-Business Day; Payment Computations ........... 34
3.7 Additional Costs ............................................ 34
3.8 Illegality and Impossibility ................................ 35
3.9 Indemnification ............................................. 36
3.10 Substitution of Lender ..................................... 36
ARTICLE IV ................................................................. 37
4.1 Corporate Existence and Power ............................... 37
4.2 Corporate Authority ......................................... 37
4.3 Binding Effect .............................................. 37
4.4 Subsidiaries ................................................ 37
4.5 Litigation .................................................. 37
4.6 Financial Condition ......................................... 38
4.7 Use of Advances ............................................. 38
4.8 Consents, Etc ............................................... 38
4.9 Taxes ....................................................... 38
4.10 Title to Properties ........................................ 38
4.11 ERISA ...................................................... 39
4.12 Disclosure ................................................. 39
4.13 Environmental and Safety Matters ........................... 39
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Section Page
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4.14 Borrowing Base ............................................. 39
4.15 No Default ................................................. 39
4.16 Intellectual Property ...................................... 40
4.17 No Burdensome Restrictions ................................. 40
4.18 Labor Matters .............................................. 40
4.19 Solvency ................................................... 40
4.20 Not an Investment Company; other Regulations ............... 41
4.21 14% Senior Debt Documents .................................. 41
4.22 Senior Subordinated Debt Documents ......................... 41
ARTICLE V .................................................................. 41
5.1 Affirmative Covenants ....................................... 41
(a) Preservation of Corporate Existence, Etc. ........... 41
(b) Compliance with Laws, Etc. .......................... 42
(c) Maintenance of Properties; Insurance ................ 42
(d) Reporting Requirements .............................. 42
(e) Accounting, Access to Records, Books, Etc. .......... 44
(f) Additional Security and Collateral .................. 44
(g) Further Assurances .................................. 44
5.2 Negative Covenants .......................................... 45
(a) Net Worth ........................................... 45
(b) Total Debt to EBITDA Ratio .......................... 45
(c) Interest Coverage Ratio ............................. 42
(d) Fixed Charge Coverage Ratio ......................... 43
(e) Indebtedness ........................................ 43
(f) Liens ............................................... 46
(g) Merger; Acquisitions; Etc. .......................... 47
(h) Disposition of Assets; Etc. ......................... 48
(i) Nature of Business .................................. 48
(j) Dividends and Other Restricted Payments ............. 48
(k) Investments, Loans and Advances ..................... 49
(l) Transactions with Affiliates ........................ 50
(m) Inconsistent Agreements ............................. 50
(n) Negative Pledge Limitation .......................... 50
(o) Subsidiary Dividends. ............................... 50
(p) Payments and Modification of Debt ................... 51
(q) EBITDA ..............................................
5.3 Additional Covenants ........................................ 47
ARTICLE VI ................................................................. 51
6.1 Events of Default ........................................... 51
6.2 Remedies .................................................... 53
6.3 Distribution of Proceeds of Collateral ...................... 54
6.4 Letter of Credit Liabilities ................................ 55
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Section Page
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ARTICLE VII ................................................................ 55
7.1 Appointment; Nature of Relationship ......................... 52
7.2 Powers ...................................................... 52
7.3 General Immunity ............................................ 52
7.4 No Responsibility for Loans, Recitals, etc. ................. 52
7.5 Action on Instructions of Lenders ........................... 53
7.6 Employment of Agents and Counsel ............................ 53
7.7 Reliance on Documents; Counsel .............................. 53
7.8 Agent's Reimbursement and Indemnification ................... 53
7.9 Notice of Default ........................................... 53
7.10 Rights as a Lender ......................................... 53
7.11 Lender Credit Decision ..................................... 54
7.12 Successor Agent ............................................ 54
7.13 Collateral Management ...................................... 54
7.14 Rights to Indemnity ........................................ 55
7.15 Sharing of Payments ........................................ 55
7.16 Withholding Tax Exemption .................................. 55
ARTICLE VIII ............................................................... 56
8.1 Amendments, Etc. ............................................ 56
8.2 Notices ..................................................... 56
8.3 No Waiver By Conduct; Remedies Cumulative ................... 57
8.4 Reliance on and Survival of Various Provisions .............. 57
8.5 Expenses; Indemnification ................................... 57
8.6 Successors and Assigns ...................................... 58
8.7 Counterparts ................................................ 60
8.8 Governing Law ............................................... 60
8.9 Table of Contents and Headings .............................. 61
8.10 Construction of Certain Provisions ......................... 61
8.11 Integration and Severability ............................... 61
8.12 Independence of Covenants .................................. 61
8.13 Interest Rate Limitation ................................... 61
8.14 Judgment Currency .......................................... 63
8.15 WAIVER OF JURY TRIAL ....................................... 63
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EXHIBITS
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Exhibit A ................. Borrowing Base Certificate
Exhibit B ................. Environmental Certificate
Exhibit C ................. Guaranty
Exhibit D ................. Mortgage
Exhibit E-1, E-2 and E-3 .. Pledge Agreements
Exhibit F-1 ............... Revolving Credit Note
Exhibit F-2 ............... Swingline Note
Exhibit F-3 ............... Term Note
Exhibit G-1 and G-2 ....... Security Agreements
Exhibit H-1 ............... Request for Revolving Credit Advance
and Swingline Loan
Exhibit H-2 ............... Request for Acquisition Amount
Exhibit I ................. Opinion of Counsel
Exhibit J ................. Request for Continuation or Conversion of Advance
Exhibit K ................. Assignment and Acceptance
SCHEDULES
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Schedule 1.1-A ............ 14% Senior Debt Documents
Schedule 1.1-B ............ Senior Subordinated Debt Documents
Schedule 4.4 .............. Subsidiaries
Schedule 4.5 .............. Litigation
Schedule 4.16 ............. Intellectual Property
Schedule 4.21 ............. Application of Funds
Schedule 5.2(e) ........... Indebtedness
Schedule 5.2(f) ........... Liens
Schedule 5.2(k) ........... Investments, Loans and Advances
CREDIT AGREEMENT Page iv
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THIS CREDIT AGREEMENT, dated as of March 24, 1997 (this "Agreement"),
is by and among KEY PLASTICS, INC., a Michigan corporation (the "Company"), the
lenders party hereto from time to time (collectively, the "Lenders" and
individually, a "Lender"), and NBD BANK, a Michigan banking corporation, as
agent for the Lenders (in such capacity, the "Agent").
INTRODUCTION
The Company desires to obtain a $15,000,000 seven and one half year
amortizing term loan and a $125,000,000 six and one half year reducing revolving
credit, including letters of credit, in order to refinance existing
indebtedness, to provide for certain acquisitions and to provide funds and other
financial accommodations for its corporate purposes, and the Lenders are willing
to make such term loan and to establish such credit facility in favor of the
Company on the terms and conditions herein set forth.
In consideration of the premises and of the mutual agreements herein
contained, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
1.1 Certain Definitions. As used herein the following terms shall have
the following respective meanings:
"Acquisition Amount" shall mean an amount blocked from the Revolving
Credit Commitments and the Borrowing Base for the purpose of funding the Initial
Acquisitions, which amount shall be equal to $30,000,000 on the Effective Date.
"Acquisition Amount Expiry Date" shall mean July 24, 1997 or such later
date as determined by the Required Revolving Credit Lenders, provided that the
Acquisition Amount Expiry Date may not be extended beyond a date one year after
the Effective Date unless approved by all Revolving Credit Lenders.
"Adjusted Prime Rate" shall mean the per annum rate equal to the sum of
(a) the Applicable Margin, plus (b) the greater of the Prime Rate or the Federal
Funds Rate plus 1/2%, in each case as in effect from time to time, which
Adjusted Prime Rate shall change simultaneously with any change in such Prime
Rate or Federal Funds Rate, as the case may be.
"Adjusted Prime Rate Loan" shall mean any Loan which bears interest at
the Adjusted Prime Rate.
"Advance" shall mean any Loan and any Letter of Credit Advance.
"Aeroquip" shall mean a portion of the Aeroquip division of Trinova
Corp. and related assets.
"Affiliate", when used with respect to any Person, shall mean any other
Person which, directly or indirectly, controls or is controlled by or is under
common control with such Person. For purposes of this definition "control"
(including the correlative meanings of the terms "controlled by" and "under
common control with"), with respect to any Person, shall mean possession,
directly or indirectly, of the power to direct or cause the direction of the
management and policies of such Person, whether through the ownership of voting
securities or by contract or otherwise. Without limiting the foregoing
definition of Affiliate, any Person shall be deemed to control another Person if
the controlling Person owns or controls 10% or more of any class of voting
securities (or other ownership interest of any kind) of the controlled Person.
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"Applicable Lending Office" shall mean, with respect to any Advance
made by any Lender or with respect to such Lender's Commitment, the office of
such Lender or of any Affiliate of such Lender located at the address specified
as the applicable lending office for such Lender set forth next to the name of
such Lender in the signature pages hereof or any other office or Affiliate of
such Lender or of any Affiliate of such Lender hereafter selected and notified
to the Company and the Agent by such Lender.
"Applicable Margin" shall mean, (a) with respect to the Term Loan,
0.75% in the case of Adjusted Prime Rate Loans and 2.50% in the case of LIBOR
Loans, (b) with respect to the fee payable pursuant to Section 2.3(b)(i) on Bond
L/Cs, 1.50% and (c) with respect to any other Adjusted Prime Rate Loan, LIBOR
Loan, Letter of Credit fee under Section 2.3(b)(i) and commitment fee under
Section 2.3(a), as the case may be, the applicable percentage set forth in the
applicable table below based upon the Total Debt to EBITDA Ratio, as adjusted on
the sixtieth day after the end of each fiscal quarter of the Company and shall
remain in effect until the next change to be effected pursuant to this
definition, based upon the Total Debt to EBITDA Ratio as of the last day of the
most recently ended fiscal quarter, provided that (a) any change in the
Applicable Margin with respect to any LIBOR Loan during a LIBOR Interest Period
with respect to such LIBOR Loan shall not be effective until after the end of
such LIBOR Interest Period and (b) if any Event of Default has occurred and is
continuing the Total Debt to EBITDA Ratio as of the end of the most recently
ended fiscal quarter shall, for the purposes of this definition, be deemed to be
greater than 5.0 to 1.0:
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APPLICABLE MARGIN
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Total Debt to EBITDA Ratio Adjusted Prime Rate Loan LIBOR Loan and Letter of Commitment Fee
Credit Fee
(other than Bond L/Cs)
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Greater Than or Equal to 5.00 75 bps 250 bps 50 bps
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Greater Than or Equal to 4.50 but Less Than 5.00 50 bps 225 bps 50 bps
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Greater Than or Equal to 3.50 but Less Than 4.50 25 bps 200 bps 45 bps
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Greater Than or Equal to 3.00 but Less Than 3.50 0 bps 175 bps 37.5 bps
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Less Than 3.00 0 bps 150 bps 35 bps
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"Assignment and Acceptance" is defined in Section 8.6(c).
"Assignment of Rents and Leases" shall mean each assignment of rents
and leases or similar agreement entered into by the Company or any Guarantor for
the benefit of the Agent and the Lenders pursuant to this Agreement in such form
as approved by the Agent, as amended or modified from time to time.
"Board of Directors" means the Board of Directors of the Company, or
any authorized committee of the Board of Directors.
"Bond L/Cs" shall mean the Letters of Credit issued for the account of
the Company pursuant to Section 2.1(a) as follows: (a) in the amount of
$2,567,364 to back payment under the Limited Obligation Industrial Revenue Bonds
issued by the Town of Xxxxxxxx and (b) in the amount of $3,696,165 to back
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payments under Floating Rate Monthly Demand Economic Development Bonds issued by
the Economic Development of the Township of Plymouth.
"Borrowing" shall mean the aggregation of Advances, including each
Letter of Credit issuance, of the Lenders to be made to the Company, or
continuations and conversions of such Loans, made pursuant to Article II on a
single date and, in the case of any Loans, for a single LIBOR Interest Period,
which Borrowings may be classified for purposes of this Agreement by reference
to the type of Loans or the type of Advances comprising the related Borrowing,
e.g., a "LIBOR Borrowing" is a Borrowing comprised of LIBOR Loans and a "Letter
of Credit Borrowing" is an Advance comprised of a single Letter of Credit.
"Borrowing Base" shall mean, as of any date, (a) an amount equal to 85%
of the amount of Eligible Accounts Receivable, plus (b) an amount equal to 50%
of the amount of Eligible Inventory, plus (c) an amount (based on the Dollar
Equivalent thereof) equal to the sum of 85% of the amount of Eligible U.K.
Receivables plus 50% of the amount of Eligible U.K. Inventory, provided that, if
the Key U. K. Letter of Credit is issued, the amount determined pursuant to this
clause (c) shall not exceed the lesser of the amount of the Key U. K. Letter of
Credit or the amount outstanding under the Key U. K. Credit Facility, plus (d)
$55,000,000 (subject to reduction by the Agent based on the final targets
comprising the Initial Acquisitions) of fixed asset reliance, such amount to
reduce quarterly in the same amounts and at the same times as the reductions in
the Revolving Credit Commitments pursuant to Section 2.2(a)(vi) and (vii) and to
reduce pursuant to the terms described in Section 3.1(c), minus (e) the unfunded
portion of the Acquisition Amount, minus (f) the 14% Senior Note Portion.
"Borrowing Base Certificate" for any date shall mean an appropriately
completed report as of such date and substantially in the form of Exhibit A
hereto, certified as true and correct as of such date by a duly authorized
officer of the Company.
"Business Day" shall mean a day other than a Saturday, Sunday or other
day on which banks in New York, Chicago or Detroit are not open to the public
for carrying on substantially all of their banking functions.
"Capital Expenditures" shall mean, for any period, the additions to
property, plant and equipment and other capital expenditures of the Company and
its Subsidiaries for such period, as the same are (or should be) set forth, in
accordance with Generally Accepted Accounting Principles, in consolidated
financial statements of the Company and its Subsidiaries for such period;
provided, however, that the initial expenditures to acquire all or substantially
all of the assets or Capital Stock of any Person and the initial expenditures to
complete the Initial Acquisitions shall not be considered Capital Expenditures
for purposes of this definition.
"Capital Lease" of any Person shall mean any lease which, in accordance
with Generally Accepted Accounting Principles, is or should be capitalized on
the books of such Person.
"Capital Stock" shall mean (i) in the case of any corporation, all
capital stock and any securities exchangeable for or convertible into capital
stock and any warrants, rights or other options to purchase or otherwise acquire
capital stock or such securities or any other form of equity securities, (ii) in
the case of an association or business entity, any and all shares, interests,
participations, rights or other equivalents (however designated) of corporate
stock, (iii) in the case of a partnership or limited liability company,
partnership or membership interests (whether general or limited) and (iv) any
other interest or participation that confers on a Person the right to receive a
share of the profits and losses of, or distribution of assets of, the issuing
Person.
"Cash Equivalent" shall mean (i) cash in Dollars, (ii) securities
issued or directly and fully guaranteed or insured by the United States
government or any agency or instrumentality thereof having maturities of not
more than six months from the date of acquisition, (iii) marketable direct
obligations issued
CREDIT AGREEMENT Page 3
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by any state of the United States of America or any political subdivision of any
such state or any public instrumentality thereof maturing within one year from
the date of acquisition thereof and, at the time of acquisition, having one of
the two highest ratings obtainable from either Standard & Poor's Corporation
("S&P") or Xxxxx'x Investors Service, Inc. ("Moody's"), (iv) certificates of
deposit and eurodollar time deposits with maturities of six months or less from
the date of acquisition, bankers' acceptances with maturities not exceeding six
months and overnight bank deposits, in each case with any Lender or with any
domestic commercial bank having capital and surplus in excess of $250,000,000
and a Xxxxx Bank Watch Rating of "B" or better, (v) repurchase obligations with
a term of not more than seven days for underlying securities of the types
described in clauses (ii), (iii) and (iv) above entered into with any financial
institution meeting the qualifications specified in clause (iv) above, (vi)
commercial paper having one of the two highest ratings obtained from Moody's or
S&P and in each case maturing within six months after the date of acquisition
and (vii) investments in money market funds which invest substantially all their
assets in securities of the type described in clauses (i) through (vii) above.
"Change in Control" shall mean the occurrence of any of the following:
(a) prior to an Initial Public Offering, the Principals and their
Related Parties shall cease to control, directly or indirectly, in each case
free and clear of all Liens, at least 51% (on a fully diluted basis) of the
issued and outstanding shares of Capital Stock of the Company entitled to vote
for the election of members of the board of directors of the Company and have
the right and authority to appoint, designate or otherwise elect each of the
members of the board of directors of the Company;
(b) after an Initial Public Offerings, (i) the Principals and their
Related Parties shall cease to control, directly or indirectly, in each case
free and clear of all Liens, at least 20% (on a fully diluted basis) of the
issued and outstanding shares of Capital Stock of the Company entitled to vote
for the election of directors of the board of directors of the Company and have
the right and authority to appoint, designate or otherwise elect at least 20% of
the members of the board of directors of the Company or (ii) other than the
Principals and their Related Parties, any Person, or two or more Persons acting
in concert, acquire beneficial ownership (within the meaning of Rule 13d-3 of
the Securities and Exchange Commission under the Securities Exchange Act of
1934) of 15% or more of the outstanding shares of voting stock of the Company on
a fully diluted basis;
(c) Xxxxx X. Xxxxxx or Xxxx X. Xxxxxx shall not have the current
management and director positions that they now hold with the Company with all
responsibilities normally associated with those positions;
(d) any "Change in Control" as defined in the Senior Subordinated Note
Indenture; or
(e) any "Change of Control" as defined in the 14% Senior Note
Indenture.
"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time, and the regulations promulgated thereunder.
"C/L/C" shall mean any commercial letter of credit issued hereunder.
"Commitments" shall mean, collectively, the Revolving Credit
Commitments and the Term Loan Commitments.
"Consolidated" or "consolidated" shall mean, when used with reference
to any financial term in this Agreement, the aggregate for two or more Persons
of the amounts signified by such term for all such Persons determined on a
consolidated basis in accordance with Generally Accepted Accounting Principles.
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"Contingent Liabilities" shall mean as to any Person any obligation of
such Person guaranteeing or intended to guarantee any Indebtedness, leases,
dividends or other obligations ("primary obligations") of any Person (the
"primary obligor") in any manner, whether directly or indirectly, including,
without limitation, any obligation of such Person, whether or not contingent,
(a) to purchase any such primary obligation or any property constituting direct
or indirect security therefor, (b) to advance or supply funds (i) for the
purchase or payment of any such primary obligation or (ii) to maintain working
capital or equity capital of the primary obligor or otherwise to maintain the
net worth or solvency of the primary obligator, (c) to purchase property,
securities or services primarily for the purpose of assuring the owner of any
such primary obligation of the ability of the primary obligor to make payment of
such primary obligation or (d) otherwise to assure or hold harmless the owner of
such primary obligation against loss in respect thereof, provided however, that
the term Contingent Liabilities shall not include endorsements of instruments
for deposit or collection in the ordinary course of business; provided further,
that, for purposes of calculating the financial covenants contained in Sections
5.2(a) through (d), Contingent Liabilities shall be those Contingent Liabilities
that are or should be noted in the financial statements of such Person or the
notes thereto as required under Generally Accepted Accounting Principles or
otherwise described in clause (iv) of the definition of Total Debt. The amount
of any Contingent Liability shall be deemed to be an amount equal to the stated
or determinable amount of the primary obligation in respect of which such
Contingent Liability is made or, if not stated or determinable, the maximum
reasonably anticipated liability in respect thereof (assuming such Person is
required to perform thereunder) as determined by such Person in good faith.
"Continuing Directors" shall mean as of any date of determination, any
member of the Board of Directors of the Company who (i) was a member of such
Board of Directors on the Effective Date or (ii) was nominated for election or
elected to such Board of Directors with the approval of a majority of the
Continuing Directors who were members of such Board at the time of such
nomination or election.
"Contractual Obligation" shall mean, as to any Person, any provision of
any security issued by such Person or of any agreement, instrument or other
undertaking to which such Person is a party or by which it or any of its
property is bound.
"Defaulting Lender" shall mean any Lender that fails to make available
to the Agent such Lender's Loans required to be made hereunder or shall have not
made a payment required to be made to the Agent hereunder. Once a Lender becomes
a Defaulting Lender, such Lender shall continue as a Defaulting Lender until
such time as such Defaulting Lender makes available to the Agent the amount of
such Defaulting Lender's Loans and all other amounts required to be paid to the
Agent pursuant to this Agreement.
"Disqualified Stock" shall mean any Capital Stock that, by its terms
(or by the terms of any security into which it is convertible or for which it is
exchangeable), or upon the happening of any event, matures or is mandatorily
redeemable, pursuant to a sinking fund obligation or otherwise, or redeemable at
the option of the holder thereof, in whole or in part.
"Dollar Equivalent" shall mean as of any date, with respect to any
amount in a currency other than Dollars, the sum in Dollars resulting from the
conversion of such amount from such currency into Dollars at the most favorable
spot exchange rate determined by the Agent to be available to it for the
purchase of such currency with Dollars at approximately 11:00 a.m. local time of
the Applicable Lending Office on such date as a determination of the Dollar
Equivalent is made.
"Dollars" and "$" shall mean the lawful money of the United States of
America.
"Domestic Subsidiary" shall mean each present and future Subsidiary of
the Company which is not a Foreign Subsidiary.
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"EBITDA" shall mean, for any period, Net Income for such period plus
all amounts deducted in determining such Net Income on account of (a) Total
Interest Expense, (b) income taxes, and (c) depreciation and amortization
expense, all as determined for the Company and its Subsidiaries on a
consolidated basis in accordance with Generally Accepted Accounting Principles.
"Effective Date" shall mean the effective date specified in the final
paragraph of this Agreement.
"Eligible Accounts Receivable" shall mean, as of any date, those
accounts receivable owned by the Company or any Guarantor which are payable in
any Permitted Currency (valued at the Dollar Equivalent thereof) and in which
the Company or any Guarantor has granted to the Agent, for the benefit of the
Agent and the Lenders, an enforceable, perfected security interest which is not
void or voidable pursuant to a Security Agreement and all representations and
warranties pertaining to such accounts receivable in such Security Agreement are
true and correct, valued at the face amount thereof less sales, excise or
similar taxes outstanding and less returns, discounts, credits and allowances of
any nature at any time claimed in writing or issued, owing or granted; but shall
not include any such account receivable (a) that is not a bona fide existing
obligation created by the sale and actual delivery of inventory, goods or other
property or the furnishing of services or other good and sufficient
consideration to customers of the Company or any Guarantor, as the case may be,
in the ordinary course of business, (b) that is more than 90 days past due or
that remains outstanding more than 90 days after the earlier of the date of the
invoice or the shipment of the related inventory, goods or other property or the
furnishing of the related services or other consideration, (c) that is subject
to any dispute, contra-account, defense, offset or counterclaim or any Lien
(except those in favor of the Agent under the Security Documents), or the
inventory, goods, property, services or other consideration of which such
account receivable constitutes proceeds are subject to any such Lien, but only
to the extent of such dispute, contra-account, defense, offset, counterclaim or
Lien, (d) in respect of which the inventory, goods, property, services or other
consideration have been rejected or the amount is in dispute, but only to the
extent of such dispute, (e) that is due from any Affiliate or Subsidiary of the
Company or any Guarantor, (f) that is payable by any Person located outside the
United States (which shall not be deemed to include any territories of the
United States) or Canada, other than any Subsidiary of General Motors
Corporation, Ford Motor Company or Chrysler Corporation or any other substantial
auto manufacturer or supplier approved by the Agent; (g) that is payable by the
United States or any of its departments, agencies or instrumentalities or by any
state or other governmental entity or by any foreign government unless the
Company or such Guarantor, as the case may be, fully complies with the
Assignment of Claims Act and executes all documents and agreements and causes
all documents and agreements to be executed in connection therewith as requested
by the Agent or any similar foreign statute in the case of accounts receivable
payable by a foreign government, (h) that is payable by any Person as to which
25% or more of the aggregate amount of such accounts receivable payable by such
Person to the Company or any Guarantor, as the case may be, do not otherwise
constitute Eligible Accounts Receivable pursuant to clause (b) of this
definition (i) that are payable by any Person that is the subject of any
proceeding seeking to adjudicate it a bankrupt or insolvent or seeking
liquidation, winding up or reorganization, arrangement, adjustment, protection,
relief or composition of it or its debts under any law relating to bankruptcy,
insolvency or reorganization or relief or protection of debtors or seeking the
appointment of a receiver, trustee, custodian or other similar official for it
or for any substantial part of its property, or that is not generally paying its
debts as they become due or has admitted in writing its inability to pay its
debts generally or has made a general assignment for the benefit of creditors,
(j) which is evidenced by a promissory note or other instrument, or (k) that for
any other reason is at any time deemed by the Agent to be ineligible.
"Eligible Inventory" shall mean, as of any date, that inventory
(including raw materials, work in process, tooling and finished goods) owned by
the Company or any Guarantor and in which the Company or such Guarantor has
granted to the Agent, for the benefit of the Lenders, an enforceable, perfected
security interest which is not void or voidable pursuant to a Security Agreement
and all representations and warranties
CREDIT AGREEMENT Page 6
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pertaining to such inventory in such Security Agreement are true and correct,
valued at the lower of cost or market on a FIFO basis and subject to such
reserves as established by the Agent, but shall not include any such inventory
(a) that does not constitute inventory readily salable or usable in the business
of the Company or any Guarantor, (b) that is located outside the United States
(which shall not be deemed to include any territories of the United States), (c)
that is subject to, or any accounts or other proceeds resulting from the sale or
other disposition thereof could be subject to, any Lien (except those in favor
of the Agent under the Security Documents), including any sale on approval or
sale or return transaction or any consignment, (d) that is not in the possession
of the Company or any Guarantor, (e) that is held for lease or is the subject of
any lease, (f) that is subject to any trademark, trade name or licensing
arrangement, or any law, rules or regulation, that could limit or impair the
ability of the Agent to promptly exercise all rights of the Agent under the
security Agreements, (g) if such inventory is located on premises not owned by
the Company or any Guarantor and the landlord or other owner of such premises
has not waived its distraint, lien and similar rights with respect to such
inventory and shall not have agreed to permit the Agent to enter such premises
pursuant to a waiver and agreement of such Person in favor of and in form and
substance acceptable to Agent, (h) with respect to which any insurance proceeds
are not payable to the Agent as a loss payee or are payable to any loss payee
other than the Agent, the Company or any Guarantor, as the case may be, or (i)
that for any other reason is at any time deemed by the Agent to be ineligible.
"Eligible U.K. Inventory" shall mean, as of any date, that inventory
owned by Key U.K. which meets each of the following conditions: (a) (i) NBD has
a first priority, enforceable, perfected security interest which is not void or
voidable in such inventory pursuant to the Key U.K. Credit Facility and the
Agent and the Lenders would be subrogated to all rights and remedies of NBD with
respect to such inventory upon a draw under the Key U.K. Letter of Credit or
(ii) the Agent, for the benefit of itself and the Lenders, has a first priority,
enforceable perfected security interest which is not void or voidable in such
inventory securing the Lender Indebtedness, and (b) such inventory is considered
by NBD and by the Agent eligible to be borrowed against.
"Eligible U.K. Receivables" shall mean, as of any date, those accounts
receivable owned by Key U.K. which meet each of the following conditions: (a)
(i) NBD has a first priority, enforceable, perfected security interest which is
not void or voidable in such accounts receivable pursuant to the Key U.K. Credit
Facility and the Agent and the Lenders would be subrogated to all rights and
remedies of NBD with respect to such accounts receivable upon a draw under the
Key U.K. Letter of Credit or (ii) the Agent, for the benefit of itself and the
Lenders, has a first priority, enforceable perfected security interest which is
not void or voidable in such accounts receivable securing the Lender
Indebtedness, and (b) such accounts receivable are considered by NBD and by the
Agent eligible to be borrowed against.
"Environmental Certificate" shall mean an appropriately completed
environmental certificate in the form of Exhibit B attached hereto delivered by
the Company and the Guarantors.
"Environmental Laws" at any date shall mean all provisions of law,
statutes, ordinances, rules, regulations, judgments, writs, injunctions,
decrees, orders, awards and standards promulgated by the government of the
United States of America or any foreign government or by any state, province,
municipality or other political subdivision thereof or therein or by any court,
agency, instrumentality, regulatory authority or commission of any of the
foregoing concerning the protection of, or regulating the discharge of hazardous
substances into, the environment.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended from time to time, and the regulations thereunder.
CREDIT AGREEMENT Page 7
13
"ERISA Affiliate" shall mean any trade or business (whether or not
incorporated) which, together with the Company or any Subsidiary of the Company,
would be treated as a single employer under Section 414 of the Code.
"Estimation Period" shall mean the period for which a shareholder who
is an individual is required to estimate for Federal income tax purposes his
allocation of taxable income for a calendar year in connection with determining
his estimated federal income tax liability for such period.
"Event of Default" shall mean any of the events or conditions described
in Section 6.1.
"Federal Funds Rate" shall mean, for any day, an interest rate per
annum equal to the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal
funds brokers on such day, as published for such day (or, if such day is not a
Business Day, for the immediately preceding Business Day) by the Federal Reserve
Bank of New York, or, if such rate is not so published for any day which is a
Business Day, the average of the quotations at approximately 10 a.m. (Detroit
time) on such day on such transactions received by the Agent from three Federal
funds brokers of recognized standing selected by the Agent in its sole
discretion.
"Fixed Charge Coverage Ratio" shall mean, as of the last day of any
fiscal quarter of the Company, the ratio of (a) EBITDA plus Rental Charges,
minus Capital Expenditures, to (b) Fixed Charges, in each case as calculated for
the four consecutive fiscal quarters then ending, provided that for (i) the
fiscal quarter ending June 30, 1997, such amounts shall be calculated for the
fiscal quarter ending June 30, 1997, (ii) the fiscal quarter ending September
30, 1997, such amounts shall be calculated for the two consecutive fiscal
quarters ending September 30, 1997, and (iii) the fiscal quarter ending December
31, 1997, such amounts shall be calculated for the three consecutive fiscal
quarters ending December 31, 1997, all as determined in accordance with
Generally Accepted Accounting Principles.
"Fixed Charges" shall mean, for any period, the sum, without
duplication, of (a) Total Interest Expense plus (b) all payments of principal
and other sums required to be paid during such period by the Company or its
Subsidiaries with respect to Indebtedness of the Company or its Subsidiaries,
other than payments required under Sections 3.1(c), (d) and (e) hereof and the
principal payment on the 14% Senior Notes, plus (c) Rental Charges paid or
payable during such period by the Company and its Subsidiaries, plus (d) all
dividends, distributions and other obligations paid with respect to any class of
the Company's Capital Stock or any dividend, payment or distribution paid in
connection with the redemption, purchase, retirement or other acquisition,
directly or indirectly, of any shares of the Company's Capital Stock, other than
Permitted Sub S Dividends, plus (e) all accrued income taxes for such period for
the Company or its Subsidiaries, which shall include, so long as the Company is
an S- Corporation, the greater of the amount which is or should be accrued
quarterly by the Company to pay Permitted Sub S Dividends or the amount of
Permitted Sub S Dividends paid for such period, plus (f) all Capital
Expenditures.
"Foreign Subsidiary" shall mean any Subsidiary incorporated or formed
in any jurisdiction other than any State of the United States of America.
"14% Senior Debt Documents" shall mean the 14% Senior Note Indenture,
the 14% Senior Notes and all agreements and documents executed in connection
therewith at any time, including without limitation those agreements and
documents listed on Schedule 1.1-A hereto.
"14% Senior Notes" issued by the Company in the original aggregate
principal amount of $65,000,000 due 1999 issued pursuant to the 14% Senior Note
Indenture.
CREDIT AGREEMENT Page 8
14
"14% Senior Note Indenture" shall mean the Indenture dated as of
November 17, 1992 between the Company and Mellon Bank F.S.B. (successor to
KeyBank National Association, formerly known as Society National Bank), as
trustee, as amended or modified from time to time.
"14% Senior Note Portion" shall mean an amount equal to the unpaid
principal balance of the 14% Senior Notes (which amount is equal to $24,865,000
as of the Effective Date), and such amount is blocked from the Revolving Credit
Commitments and the Borrowing Base for the purpose of funding the principal
payments due on the 14% Senior Notes.
"Generally Accepted Accounting Principles" shall mean generally
accepted accounting principles as in effect from time to time, applied on a
basis consistent (except for changes concurred in by the Company's independent
public accountants) with the most recent audited consolidated financial
statements of the Company and its Subsidiaries delivered to the Lenders.
"Guaranties" shall mean the guaranties entered into by each of the
Guarantors for the benefit of the Agent and the Lenders pursuant to this
Agreement in substantially the form of Exhibit C hereto, as amended or modified
from time to time.
"Guarantor" shall mean each present and future Domestic Subsidiary of
the Company or any other Person executing a Guaranty at any time.
"Indebtedness" of any Person shall mean, as of any date, (a) all
obligations of such Person for borrowed money or evidenced by bonds, notes,
debentures or similar instruments or letters of credit (or reimbursement
agreements in respect thereof) or bankers' acceptances, (b) all obligations of
such Person as lessee under any Capital Lease, (c) all obligations which are
secured by any Lien existing on any asset or property of such Person whether or
not the obligation secured thereby shall have been assumed by such Person, (d)
the unpaid purchase price for goods, property or services acquired by such
Person, except for trade accounts and accrued expenses payable arising in the
ordinary course of business which are not past due within customary payment
terms, (e) all obligations of such Person in respect of any Swap (valued in an
amount equal to the highest termination payment, if any, that would be payable
by such Person upon termination for any reason on the date of determination),
and (f) all Contingent Liabilities of such Person with respect to or relating to
indebtedness, obligations and liabilities of others similar in character to
those described in clauses (a) through (e) of this definition.
"Initial Acquisitions" shall mean the acquisition by the Company of all
of the assets of (a) a Person approved by the Required Lenders in writing in
their discretion, and (b) Aeroquip, all in accordance with the terms of the
Initial Acquisition Documents.
"Initial Acquisition Documents" shall mean all purchase agreements and
all other agreements and documents executed pursuant to the Initial
Acquisitions.
"Initial Public Offering" means the sale of capital stock of the
Company pursuant to (a) a registration statement under the Securities Act that
has been declared effective by the SEC or (b) a public offering outside the
United States and which results, in either case, in an active trading market for
such shares. An active trading market shall be deemed to exist if such shares
are listed on the New York Stock Exchange, the American Stock Exchange or the
Nasdaq National Market System or any major international trading market
exchange.
"Interest Coverage Ratio" shall mean, as of the end of any fiscal
quarter, the ratio of (a) EBITDA to (b) Total Interest Expense, in each case as
calculated for the four consecutive fiscal quarters then ending,
CREDIT AGREEMENT Page 9
15
provided that for (i) the fiscal quarter ending June 30, 1997, such amounts
shall be calculated for the fiscal quarter ending June 30, 1997, (ii) the fiscal
quarter ending September 30, 1997, such amounts shall be calculated for the two
consecutive fiscal quarters ending September 30, 1997, and (iii) the fiscal
quarter ending December 31, 1997, such amounts shall be calculated for the three
consecutive fiscal quarters ending December 31, 1997, all as determined in
accordance with Generally Accepted Accounting Principles.
"Interest Payment Date" shall mean (a) with respect to any LIBOR Loan,
the last day of each LIBOR Interest Period with respect to such LIBOR Loan, and,
in the case of any LIBOR Interest Period exceeding three months, those days that
occur during such LIBOR Interest Period at intervals of three months after the
first day of such LIBOR Interest Period and (b) in all other cases, the last
Business Day of each March, June, September and December occurring after the
date hereof, commencing with the first such Business Day occurring after the
date of this Agreement.
"Key U.K. " shall mean Key Plastics, U.K., a corporation formed under
the laws of the United Kingdom.
"Key U.K. Credit Facility" shall mean any credit facility of NBD to Key
U.K., as amended or modified from time to time.
"Key U.K. Letter of Credit" shall mean any Letter of Credit issued at
any time to support the Key U.K. Credit Facility by NBD.
"Lender Indebtedness" shall mean (a) the Advances and all other
indebtedness, obligations and liabilities of the Company and of each Guarantor
to the Agent or the Lender under any Loan Document, and (b) all indebtedness,
obligations and liabilities of the Company and of each Guarantor to any Lender
in respect of any Swaps.
"Letter of Credit" shall mean a C/L/C or S/L/C having a stated expiry
date or a date upon which the draft must be reimbursed not later than twelve
months (other than Bond L/C's, which may be up to three years, and Letters of
Credit which are automatically renewable annually but may be cancelled by the
Agent annually are permissible) after the date of issuance and not later than
the fifth Business Day before the Termination Date, issued by the Agent on
behalf of the Revolving Credit Lenders for the account of the Company pursuant
to Section 2.1(a) under an application and related documentation acceptable to
the Agent issuing such Letter of Credit requiring, among other things, immediate
reimbursement by the Company or such Subsidiary to the Agent in respect of all
drafts or other demand for payment honored thereunder and all expenses paid or
incurred by the Agent relative thereto.
"Letter of Credit Advance" shall mean any issuance of a Letter of
Credit under Section 2.4 made pursuant to Section 2.1(a) in which each Revolving
Credit Lender acquires a pro rata risk participation.
"Letter of Credit Documents" shall have the meaning ascribed thereto in
Section 3.3(b).
"LIBOR Business Day" shall mean, with respect to any LIBOR Loan, a day
which is both a Business Day and a day on which dealings in Dollar deposits are
carried out in the London interbank market with respect to such LIBOR Loan.
"LIBOR Interest Period" shall mean, with respect to any LIBOR Loan, the
period commencing on the day such LIBOR Loan is made or converted to a LIBOR
Loan and ending on the date one, two, three or six months thereafter, as the
Company may elect under Section 2.4 or 2.7, and each subsequent period
commencing on the last day of the immediately preceding LIBOR Interest Period
and ending on the date one, two, three or six
CREDIT AGREEMENT Page 10
16
months thereafter, as the Company may elect under Section 2.4 or 2.7, provided,
however, that (a) any LIBOR Interest Period which commences on the last LIBOR
Business Day of a calendar month (or on any day for which there is no
numerically corresponding day in the appropriate subsequent calendar month)
shall end on the last LIBOR Business Day of the appropriate subsequent calendar
month, (b) each LIBOR Interest Period which would otherwise end on a day which
is not a LIBOR Business Day shall end on the next succeeding LIBOR Business Day
or, if such next succeeding LIBOR Business Day falls in the next succeeding
calendar month, on the next preceding LIBOR Business Day, and (c) no LIBOR
Interest Period which would end after the Maturity Date with respect to the Term
Loan or the Termination Date with respect to any Revolving Credit Loan shall be
permitted.
"LIBOR" shall mean, with respect to any LIBOR Loan and the related
LIBOR Interest Period, the per annum rate that is equal to the sum of:
(a) the Applicable Margin, plus
(b) the rate per annum obtained by dividing (i) the per annum rate of
interest at which deposits in Dollars for such LIBOR Interest Period and in an
aggregate amount comparable to the amount of such LIBOR Loan to be made by the
Agent in its capacity as a Lender hereunder are offered to the Agent by other
prime banks in the London interbank market at approximately 11:00 a.m. local
time in London on the second LIBOR Business Day prior to the first day of such
LIBOR Interest Period by (ii) an amount equal to one minus the stated maximum
rate (expressed as a decimal) of all reserve requirements (including, without
limitation, any marginal, emergency, supplemental, special or other reserves)
that is specified on the first day of such LIBOR Interest Period by the Board of
Governors of the Federal Reserve System (or any successor agency thereto) for
determining the maximum reserve requirement with respect to eurocurrency funding
(currently referred to as "Eurocurrency liabilities" in Regulation D of such
Board) maintained by a member bank of such System;
all as conclusively determined by the Agent, such sum to be rounded up, if
necessary, to the nearest whole multiple of one one-hundredth of one percent
(1/100 of 1%).
"LIBOR Loan" shall mean any Loan which bears interest at LIBOR.
"Lien" shall mean any pledge, assignment, hypothecation, mortgage,
security interest deposit arrangement, option, conditional sale or title
retaining contract, sale and leaseback transaction, financing statement filing,
lessor's or lessee's interest under any capital lease, subordination of any
claim or right, or any other type of lien, charge or encumbrance.
"Loan" shall mean any Revolving Credit Loan, any Term Loan and any
Swingline Loan. Any such Loan or portion thereof may also be denominated as an
Adjusted Prime Rate Loan or a LIBOR Loan and such Adjusted Prime Rate Loans and
LIBOR Loans are referred to herein as "types" of Loans.
"Loan Document" shall mean, collectively, this Agreement, the Notes,
the Security Documents and any other agreement, instrument or document executed
in connection with any of the foregoing at any time.
"MaP" shall mean Materias Plastics, S.A. of Portugal.
"Material Adverse Effect" shall mean (i) a material adverse effect on
the property, business, operations, financial condition, liabilities or
capitalization of the Company and its Subsidiaries, taken as a whole, (ii) a
material adverse effect on the ability of the Company or any Guarantor to
perform its obligations under the Loan Documents or (iii) a material adverse
effect on the rights and remedies of the Agent or the Lenders under the Loan
Documents.
CREDIT AGREEMENT Page 11
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"Maturity Date" shall mean the earlier to occur of (a) the date on
which the maturity of the Term Loan is accelerated pursuant to Section 6.2 and
(b) September 24, 2004.
"Mortgages" shall mean each mortgage, deed of trust or similar
agreement entered into by the Company or any Guarantor for the benefit of the
Agent and the Lenders pursuant to this Agreement substantially in the form
attached hereto as Exhibit D or such other form as approved by the Agent, as
amended or modified from time to time.
"Multiemployer Plan" shall mean any "multiemployer plan" as defined in
Section 4001(a)(3) of ERISA or Section 414(f) of the Code.
"NBD" shall mean NBD Bank, a Michigan banking corporation, including
any of its branches and affiliates.
"Net Cash Proceeds" shall mean, (a) in connection with any sale or
other disposition of any asset or any settlement by, or receipt of payment in
respect of, any property insurance claim or condemnation award, the cash
proceeds (including any cash payments received by way of deferred payment of
principal pursuant to a note or installment receivable or purchase price
adjustment receivable or otherwise, but only as and when received) of such sale,
settlement or payment, net of reasonable and documented attorneys' fees,
accountants' fees, investment banking fees, amounts required to be applied to
the repayment of Indebtedness secured by a Lien expressly permitted hereunder on
any asset which is the subject of such sale, insurance claim or condemnation
award (other than any Lien in favor of the Agent for the benefit of the Agent
and the Lenders) and other customary fees actually incurred in connection
therewith and net of taxes paid or reasonably estimated to be payable as a
result thereof and (b) in connection with any issuance or sale of any equity
securities or debt securities or instruments or the incurrence of loans, the
cash proceeds received from such issuance or incurrence, net of investment
banking fees, reasonable and documented attorneys' fees, accountants' fees,
underwriting discounts and commissions and other reasonable and customary fees
and expenses actually incurred in connection therewith.
"Net Income" shall mean, for any period, the net income (or loss) of
the Company and its Subsidiaries on a consolidated basis for such period taken
as a single accounting period, determined in accordance with Generally Accepted
Accounting Principles; provided that in determining Net Income there shall be
excluded, without duplication: (a) the income of any Person (other than a
Subsidiary of the Company) in which any Person other than the Company or any of
its Subsidiaries has a joint interest or partnership interest or other ownership
interest, except to the extent of the amount of dividends or other distributions
actually paid to the Company or any of its Subsidiaries by such Person during
such period, (b) the income of any Person accrued prior to the date it becomes a
Subsidiary of the Company or is merged into or consolidated with the Company or
any of its Subsidiaries or that Person's assets are acquired by the Company or
any of its Subsidiaries, (c) the proceeds of any insurance policy, (d) gains
(but not losses) from the sale, exchange, transfer or other disposition of
property or assets not in the ordinary course of business of the Company and its
Subsidiaries, and related tax effects in accordance with Generally Accepted
Accounting Principles, (e) any other extraordinary or non-recurring gains of the
Company or its Subsidiaries, and related tax effects in accordance with
Generally Accepted Accounting Principles, (f) any income of any Unrestricted
Subsidiary and any payments or other transfers of any kind of any Unrestricted
Subsidiary to the Company or any of its Subsidiaries, and (g) the income of any
Subsidiary of the Company to the extent that the declaration or payment of
dividends or similar distributions by that Subsidiary of that income is not at
the time permitted by operation of the terms of its charter or of any agreement,
instrument, judgment, decree, order, statute, rule or governmental regulation
applicable to that Subsidiary.
"Net Worth" shall mean, as of any date, the amount of any capital
stock, paid in capital and similar equity accounts plus (or minus in the case of
a deficit) the capital surplus and retained earnings of the
CREDIT AGREEMENT Page 12
18
Company and the Subsidiaries and the amount of any foreign currency translation
adjustment account shown as a capital account of the Company and its
Subsidiaries, all on a consolidated basis in accordance with Generally Accepted
Accounting Principles.
"Non-Competition Agreement" shall mean, collectively, the provisions
contained in the Employment and Noncompetition Agreements, each dated August 5,
1988, between the Company and certain shareholders of the Company, and in the
Consulting and Noncompetition Agreement, dated August 9, 1990, between the
Company and a certain shareholder of the Company, whereby such shareholders
agreed not to compete with the Company on the terms and conditions set forth
therein, as amended on November 17, 1992, and as amended subsequent to the date
of this Agreement.
"Note" shall mean any Revolving Credit Note, any Term Loan Note or the
Swingline Note.
"Overdue Rate" shall mean (a) in respect of principal of Adjusted Prime
Rate Loans, a rate per annum that is equal to the sum of three percent (3%) per
annum plus the Adjusted Prime Rate, (b) in respect of principal of LIBOR Loans,
a rate per annum that is equal to the sum of three percent (3%) per annum plus
the per annum rate in effect thereon until the end of the then current LIBOR
Interest Period for such Loan and, thereafter, a rate per annum that is equal to
the sum of three percent (3%) per annum plus the Adjusted Prime Rate, and (c) in
respect of other amounts payable by the Company hereunder (other than interest),
a per annum rate that is equal to the sum of three percent (3%) per annum plus
the Adjusted Prime Rate.
"PBGC" shall mean the Pension Benefit Guaranty Corporation and any
entity succeeding to any or all of its functions under ERISA.
"Permitted Currency" shall mean Dollars or the lawful currency of
Canada.
"Permitted Liens" shall mean Liens permitted by Section 5.2(f) hereof.
"Permitted Quarterly Tax Distributions" shall mean quarterly
distribution of Tax Amounts determined on the basis of the estimated taxable
income of the Company, for the related Estimation Period, provided, however,
that: (A) prior to any distributions of Tax Amounts the Company shall deliver an
officers' certificate certifying that the Tax Amounts to be distributed were
determined pursuant to the terms of this Agreement, containing a comparison of
such distribution of Tax Amounts to the projections of such distributions
supplied by the Company to the Agent and explaining the reasons for any
differences, and stating to the effect that the Company qualifies as an
S-Corporation or substantially similar pass-through entity for Federal Income
tax purposes and (B) at the time of such distributions, the most recent audited
financial statements of the Company reflect that the Company was treated as an
S-Corporation or substantially similar pass-through entity for Federal income
tax purposes for the period covered by such financial statements.
"Permitted Sub S Dividends" shall mean the dividends permitted by
clause (iii) of Section 5.2 (j).
"Person" shall include an individual, a corporation, an association, a
partnership, a trust or estate, a joint stock company, an unincorporated
organization, a joint venture, a trade or business (whether or not
incorporated), a government (foreign or domestic) and any agency or political
subdivision thereof, or any other entity.
"Plan" shall mean any pension plan (other than a Multiemployer Plan)
subject to Title IV of ERISA or to the minimum funding standards of Section 412
of the Code which has been established or maintained by the Company, any
Subsidiary of the Company or any ERISA Affiliate, or by any other Person if the
Company, any Subsidiary of the Company or any ERISA Affiliate could have
liability with respect to such pension plan.
CREDIT AGREEMENT Page 13
19
"Pledge Agreements" shall mean each Pledge Agreement entered into by
the Company or any Guarantor for the benefit of the Agent and the Lenders
pursuant to this Agreement substantially in the forms attached hereto as
Exhibits E-1, E-2 and E-3, as amended or modified from time to time.
"Pounds" shall mean the lawful currency of the United Kingdom.
"Prime Rate" shall mean the per annum rate announced by the Agent from
time to time as its "prime rate" (it being acknowledged that such announced rate
may not necessarily be the lowest rate charged by the Agent to any of its
customers), which Prime Rate shall change simultaneously with any change in such
announced rate.
"Principals" shall mean (i) any or all of Xxxxx Xxxxxx, Xxxxxx Mars and
Xxxx Xxxxxx and (ii) any trust established by any of the foregoing, provided
that the beneficiaries of the trust are members of such Person's immediate
family and such Person maintains sole voting power over the shares held by such
trust.
"Prohibited Transaction" shall mean any transaction involving any Plan
which is proscribed by Section 406 of ERISA or Section 4975 of the Code.
"Purchase and Sale of Shares Promissory Agreement" shall mean the
Purchase and Sale of Shares Promissory Agreement, dated October 21, 1996 by and
between the Company and the other parties named therein.
"Quarterly Payment Period" shall mean the period commencing on the
tenth day and ending on and including the twentieth day of each month in which
Federal individual estimated tax payments are due; provided that payments in
respect of estimated state income taxes due in January may instead, at the
option of the Company, be paid during the last 20 days of the immediately
preceding December.
"Reimbursement Agreements" shall mean the Standby Letter of Credit
Applications and Reimbursement Agreements executed in connection with the Bond
L/Cs, as amended or modified from time to time.
"Related Party" with respect to any Principal shall mean (A) any
controlling stockholder, 80% (or more) owned Subsidiary, or spouse or immediate
family member (in the case of an individual) of such Principal or (B) any trust,
corporation, partnership or other entity, the beneficiaries, stockholders,
partners, owners or Persons beneficially holding an 80% or more controlling
interest of which consist of such Principal and/or such other Persons referred
to in the immediately preceding clause (A).
"Rental Charges" shall mean, for any period, the maximum amount of all
rents and other payments (exclusive of property taxes, property and liability
insurance premiums and maintenance costs) paid or required to be paid by the
Company or its Subsidiaries during such period under any lease of real or
personal property in respect of which the Company or its Subsidiaries are
obligated as a lessee or user, other than any Capital Lease.
"Reportable Event" shall mean a reportable event as described in
Section 4043(b) of ERISA including without limitation those events as to which
the thirty (30) day notice period is waived under Part 2615 of the regulations
promulgated by the PBGC under ERISA.
"Required Lenders" shall mean Lenders holding not less than 51% of the
Commitments (or 51% of the Advances if the Commitments have been terminated).
CREDIT AGREEMENT Page 14
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"Required Revolving Credit Lenders" shall mean Revolving Credit Lenders
holding not less than 51% of the Revolving Credit Commitments (or 51% of the
Revolving Credit Advances if the Revolving Credit Commitments have been
terminated).
"Requirement of Law" shall mean 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.
"Revolving Credit Advance" shall mean any Revolving Credit Loan and any
Letter of Credit Advance.
"Revolving Credit Commitments" shall mean, with respect to each Lender,
the commitment of each such Lender to make Revolving Credit Loans, and to
participate in Letter of Credit Advances, in amounts not exceeding in the
aggregate principal or face amount outstanding at any time the Revolving Credit
Commitment amount for such Lender set forth next to the name of such Lender on
the signature pages hereof, or, as to any Lender becoming a party hereto after
the Effective Date, as set forth in the applicable Assignment and Acceptance, in
each case as reduced pursuant to Section 2.2 or modified pursuant to Section
8.6.
"Revolving Credit Lenders" shall mean those Lenders which have a
Revolving Credit Commitment or, if such Commitment shall have been terminated,
have outstanding Revolving Credit Advances.
"Revolving Credit Loan" shall mean any borrowing under Section 2.4
evidenced by the Revolving Credit Notes and made pursuant to Section 2.1(a).
"Revolving Credit Notes" shall mean the promissory notes of the Company
evidencing the Revolving Credit Loans, in substantially the form annexed hereto
as Exhibit F-1, respectively, as amended or modified from time to time and
together with any promissory note or notes issued in exchange or replacement
therefor, and "Revolving Credit Note" shall mean any one of such Revolving
Credit Notes.
"Security Agreements" shall mean each Security Agreement entered into
by the Company or any Guarantor for the benefit of the Agent and the Lenders
pursuant to this Agreement substantially in the forms attached hereto as Exhibit
G-1 and G-2, as amended or modified from time to time, and any other agreement
executed by the Company granting a Lien for the benefit of the Agent and the
Lenders in form or substance satisfactory to the Agent, as amended or modified
from time to time.
"Security Documents" shall mean the Mortgages, the Pledge Agreements,
the Security Agreements, the Guaranties, the Reimbursement Agreements, the
Assignment of Rents and Leases and all other agreements and documents delivered
pursuant to this Agreement or otherwise entered into by any Person to secure or
guaranty the obligations of the Company under this Agreement.
"Senior Subordinated Debt Documents" shall mean the Senior Subordinated
Note Indenture, the Senior Subordinated Notes and all agreements and documents
executed in connection therewith at any time, including without limitation those
agreements and documents listed on Schedule 1.1-B hereto.
"Senior Subordinated Notes " shall mean the Senior Subordinated Notes
issued by the Company in the aggregate principal amount of $125,000,000 due 2007
issued pursuant to the Senior Subordinated Note Indenture.
CREDIT AGREEMENT Page 15
21
"Senior Subordinated Note Indenture" shall mean the Senior Subordinated
Indenture between the Company and Marine Midland Bank, as trustee, dated as of
March 24, 1997, as amended or modified from time to time.
"S/L/C" shall mean any standby letter of credit issued hereunder.
"Subordinated Debt" shall mean, for any Person, any Indebtedness of
such Person which is fully subordinated to all Indebtedness of such Person owing
to the Agent and the Lenders, by written agreements and documents in form and
substance satisfactory to the Required Lenders and which is governed by terms
and provisions, including without limitation maturities, covenants, defaults,
rates and fees, acceptable to the Agent, and shall include, without limitation,
all Indebtedness owing pursuant to the Senior Subordinated Notes.
"Subordinated Debt Documents" shall mean the Senior Subordinated Debt
Documents and any other agreement or document evidencing or relating to any
Subordinated Debt, whether under the Senior Subordinated Notes or any other
Subordinated Debt.
"Subsidiary" of any Person shall mean any other Person (whether now
existing or hereafter organized or acquired) in which (other than directors,
qualifying shares required by law) at least a majority of the securities or
other ownership interests of each class having ordinary voting power or
analogous right (other than securities or other ownership interests which have
such power or right only by reason of the happening of a contingency), at the
time as of which any determination is being made, are owned, beneficially and of
record, by such Person or by one or more of the other Subsidiaries of such
Person or by any combination thereof. Notwithstanding anything herein to the
contrary, an Unrestricted Subsidiary shall not be considered a Subsidiary.
"Swaps" shall mean any interest rate or currency swaps, rate caps or
similar transactions, provided that such transactions are entered into by the
Company or any of its Subsidiaries to protect against fluctuations in interest
rates on Indebtedness of the Company and its Subsidiaries or in exchange rates,
and not for speculative purposes.
"Swingline Loan" shall mean any loan under Section 2.4 evidenced by the
Swingline Note and made by the Agent to the Company pursuant to Section 2.1(c).
"Swingline Note" shall mean any promissory note of the Company
evidencing the Swingline Loans in substantially the form of Exhibit F-2 hereto,
as amended or modified from time to time and together with any promissory note
or notes issued in exchange or replacement therefor.
"Tax Amounts" with respect to any taxable period shall not exceed an
amount equal to (A) the product of (x) the taxable income of the Company for
such period as determined by the Tax Amounts CPA and (y) the Tax Percentage
reduced by (B) to the extent not previously taken into account, any income tax
benefit attributable to the Company which could be realized (without regard to
the actual realization) by its stockholders in the current or any prior taxable
year, or portion thereof, commencing on or after the Issue Date (including any
tax losses or tax credits), computed at the applicable Tax Percentage for the
year that such benefit is taken into account for purposes of this computation.
"Tax Amounts CPA" shall mean a nationally recognized certified public
accounting firm.
"Tax Percentage" shall mean, for a particular taxable year, the highest
effective marginal combined rate of Federal and state income tax, imposed on an
individual taxpayer, as certified by the Tax Amounts CPA in a certificate filed
with the Agent. The rate of open "state income tax" to be taken into account for
purposes
CREDIT AGREEMENT Page 16
22
of determining the Tax Percentage for a particular taxable year shall be deemed
to be the highest state marginal tax rate applicable to any stockholder.
"Term Loan " shall mean the single borrowing under Section 2.4
evidenced by the Term Loan Notes and made to the Company pursuant to Section
2.1(b).
"Term Loan Commitment" shall mean, with respect to each Lender, the
commitment of each Lender to make the Term Loan in an amount not exceeding in
the aggregate principal amount outstanding at any time the Term Loan Commitment
amount for such Lender set forth next to the name of such Lender on the
signature pages hereof, or, as to any Lender becoming a party hereto after the
Effective Date, as set forth in the applicable Assignment and Acceptance, in
each case as reduced by payments on the Term Loan or modified pursuant to
Section 8.6.
"Term Loan Lenders" shall mean those Lenders which have a Term Loan
Commitment or, if such Commitments have been terminated, have an outstanding
portion of the Term Loan.
"Term Loan Notes" shall mean the promissory notes of the Company
evidencing the Term Loan, in substantially the form of Exhibit F-3, as amended
or modified from time to time and together with any promissory note or notes
issued in exchange or replacement therefor, and "Term Loan Note" shall mean any
one of such Term Loan Notes.
"Term Facility Tranche" shall mean the loan facility established
pursuant to Section 2.1(b).
"Termination Date" shall mean the earlier to occur of (a) September 24,
2003, and (b) the date on which the Revolving Credit Commitments shall be
terminated pursuant to Section 2.2 or 6.2.
"Total Debt" as of any date, shall mean all of the following for the
Company and its Subsidiaries on a consolidated basis: (i) all debt for borrowed
money and similar monetary obligations evidenced by bonds, notes, debentures,
Capital Lease obligations or otherwise, including without limitation obligations
in respect of the deferred purchase price of properties or assets, in each case
whether direct or indirect; (ii) all liabilities secured by any Lien existing on
property owned or acquired subject thereto, whether or not the liability secured
thereby shall have been assumed; (iii) all reimbursement obligations under
outstanding letters of credit in respect of drafts which (A) may be presented or
(B) have been presented and have not yet been paid and are not included in
clause (i) above; and (iv) all guarantees and other Contingent Liabilities
relating to indebtedness, obligations or liabilities of the type described in
the foregoing clauses (i), (ii) and (iii).
"Total Debt to EBITDA Ratio" shall mean, at any time, the ratio of (a)
Total Debt at such time to (b) EBITDA, as calculated as of the four most
recently completed fiscal quarters of the Company, (provided that EBITDA as
calculated in determining the Total Debt to EBITDA Ratio for (i) the fiscal
quarter ending June 30, 1997 shall be equal to the product of EBITDA for the
fiscal quarter ending June 30, 1997 times four, (ii) the fiscal quarter ending
September 30, 1997 shall be equal to the product of EBITDA for the two quarters
ending September 30, 1997 times two, and (iii) the fiscal quarter ending
December 31, 1997, shall be equal to the product of EBITDA for the three fiscal
quarters ending December 31, 1997 times four thirds), all as determined in
accordance with Generally Accepted Accounting Principles.
"Total Interest Expense" shall mean, for any period, total interest and
related expense (including, without limitation, that portion of any Capitalized
Lease obligation attributable to interest expense in conformity with Generally
Accepted Accounting Principles, amortization of debt discount, all capitalized
interest, the interest portion of any deferred payment obligations, all
commissions, discounts and other fees and charges owed with respect to letter of
credit and bankers acceptance financing, the net costs and net payments under
any
CREDIT AGREEMENT Page 17
23
interest rate hedging, cap or similar agreement or arrangement, prepayment
charges, agency fees, administrative fees, commitment fees and capitalized
transaction costs allocated to interest expense) paid, payable or accrued during
such period, without duplication for any other period, with respect to all
outstanding Indebtedness of the Company and its Subsidiaries, all as determined
for the Company and its Subsidiaries on a consolidated basis for such period in
accordance with Generally Accepted Accounting Principles; provided that the
interest with respect to the 14% Senior Notes shall be calculated at the
interest rate applicable to Revolving Credit Loans for purposes of this
definition.
"True-up Amounts" means, in respect of a particular taxable year, an
amount determined by the Tax Amounts CPA equal to the difference between (i) the
aggregate permitted Quarterly Tax Distributions actually distributed in respect
of such taxable year and (ii) the actual Tax Amounts for such year. For purposes
of this Agreement, the amount equal to the excess, if any, of the amount
described in clauses (i) over the amount described in clause (ii) above shall be
referred to as the "True-up Amount due to the Company" and the excess, if any,
of the amount described in clause (ii) over the amount described in clause (i)
above shall be referred to as the "True-up Amount due to the stockholders."
"True-up Determination Date" shall mean the date on which the Tax
Amounts CPA delivers a statement to the Agent indicating the True-up Amount.
"Unfunded Benefit Liabilities" shall mean, with respect to any Plan as
of any date, the amount of the unfunded benefit liabilities determined in
accordance with Generally Accepted Accounting Principles.
"Unmatured Event" shall mean any event or condition which might become
an Event of Default with notice or lapse of time or both.
"Unrestricted Subsidiary" shall mean MaP or any Subsidiary designated
by the Company as an Unrestricted Subsidiary and approved by the Agent in its
discretion, provided that (a) neither the Company nor any Subsidiary of the
Company which is not an Unrestricted Subsidiary shall be liable, directly or
indirectly, for any of the indebtedness, obligations or other liabilities of any
such Unrestricted Subsidiary or for any Contingent Liabilities with respect to
any Unrestricted Subsidiary and (b) after giving effect to such designation, no
Event of Default or Unmatured Event exists or would be caused thereby, on a pro
forma basis acceptable to the Agent. Any Unrestricted Subsidiary may be
designated as a Subsidiary by the Company at any time provided that (i) such
designation is approved by the Agent and (ii) no Event of Default or Unmatured
Event exists or would be caused thereby, all on a pro forma basis acceptable to
the Agent.
1.2 Other Definitions; Rules of Construction. As used herein, the terms
"Agent", "Lenders", "Company", and "this Agreement" shall have the respective
meanings ascribed thereto in the introductory paragraph of this Agreement. Such
terms, together with the other terms defined in Section 1.1, shall include both
the singular and the plural forms thereof and shall be construed accordingly.
Use of the terms "herein", "hereof", and "hereunder" shall be deemed references
to this Agreement in its entirety and not to the Section or clause in which such
term appears. References to "Sections" and "subsections" shall be to Sections
and subsections, respectively, of this Agreement unless otherwise specifically
provided.
1.3 Accounting Terms and Determinations.
(a) Except as otherwise expressly provided herein, all
accounting terms used herein shall be interpreted, and all financial statements
and certificates and reports as to financial matters required to be delivered to
the Lenders hereunder shall (unless otherwise disclosed to the Lenders in
writing at the time of delivery thereof in the manner described in subsection
(b) below) be prepared, in accordance with Generally Accepted Accounting
Principles provided that, if the Company notifies the Agent that it wishes to
amend any
CREDIT AGREEMENT Page 18
24
covenant in Article V to eliminate the effect of any change in Generally
Accepted Accounting Principles (or if the Agent notifies the Company that the
Required Lenders wish to amend Article V for such purpose), then the Company's
compliance with such covenants shall be determined on the basis of Generally
Accepted Accounting Principles in effect immediately before the relevant change
in Generally Accepted Accounting Principles became effective until either such
notice is withdrawn or such covenant or any such defined term is amended in a
manner satisfactory to the Company and the Required Lenders. Except as otherwise
expressly provided herein, all references to a time of day shall be references
to Detroit, Michigan time. Notwithstanding anything herein, in any financial
statements of the Company or in Generally Accepted Accounting Principles to the
contrary, for purposes of calculating and determining compliance with the
financial covenants in Sections 5.2(a), (b), (c) and (d), including defined
terms used therein, (i) no Unrestricted Subsidiary shall be consolidated with
the Company and its other Subsidiaries and each Unrestricted Subsidiary shall be
treated as if it were an equity interest and all income, liabilities and assets
of each Unrestricted Subsidiary shall be excluded from all such calculations and
determinations thereunder, (ii) if at any time Key U.K. has any material
Indebtedness (other than (A) Indebtedness owing to NBD under the Key U.K. Credit
Facility or (B) Indebtedness owing to the Company, which Indebtedness and other
obligations owing to the Company are pledged on a first priority basis to the
Agent for the benefit of the Lenders), then Key U.K. shall not be consolidated
with the Company and its other Subsidiaries and shall be treated as if it were
an equity investment and all income, liabilities and assets of Key U.K. shall be
excluded from all calculations and determinations thereunder, and (iii) any
acquisitions made by the Company or any of its Subsidiaries including through
mergers or consolidations and including any related financing transactions,
during the period for which such financial covenants were calculated shall be
deemed to have occurred on the first day of the relevant period for which such
financial covenants were calculated on a pro forma basis acceptable to the
Agent. Notwithstanding anything in Sections 5.2(b), (c) or (d) or in the
definition of Applicable Margin (or the defined terms as used in Sections
5.2(b),(c) or (d) or within the definition of Applicable Margin), such financial
covenants shall be tested, and the Applicable Margin shall be adjusted, for the
first time based on the results for the fiscal quarter ending June 30, 1997.
(b) The Company shall deliver to the Lenders at the same time
as the delivery of any annual or monthly financial statement under Section
5.1(d) hereof (i) a description in reasonable detail of any material variation
between the application or other modification of accounting principles employed
in the preparation of such statement and the application or other modification
of accounting principles employed in the preparation of the immediately prior
annual or monthly financial statements as to which no objection has been made in
accordance with the last sentence of subsection (a) above and (ii) reasonable
estimates of the difference between such statements arising as a consequence
thereof.
(c) To enable the ready and consistent determination of
compliance with the covenants set forth in Section 5.2 hereof, the Company will
not change the last day of its fiscal year from December 31 of each year, or the
last days of the first three fiscal quarters in each of its fiscal years from
March 31, June 30, and September 30 of each year, respectively.
ARTICLE II
THE COMMITMENTS AND THE ADVANCES
2.1 Commitments of the Lenders.
CREDIT AGREEMENT Page 19
25
(a) Revolving Credit Advances. Each Revolving Credit Lender
agrees, for itself only, subject to the terms and conditions of this Agreement,
to make Revolving Credit Loans to the Company pursuant to Section 2.4 and to
participate in Letter of Credit Advances to the Company pursuant to Section 3.3,
from time to time from and including the Effective Date to but excluding the
Termination Date, not to exceed in aggregate principal amount at any time
outstanding the amount determined pursuant to Section 2.1(d).
(b) Term Loan . Each Term Loan Lender agrees, for itself only,
subject to the terms and conditions of this Agreement, to make a portion of the
Term Loan to the Company on the Effective Date in an amount equal to its Term
Loan Commitment.
(c) Swingline Loans. (i) The Company may request the Agent to
make, and the Agent may, in its sole discretion, make Swingline Loans to the
Company from time to time on any Business Day during the period from the
Effective Date until the Termination Date in an aggregate principal amount not
to exceed at any time the lesser of (A) $5,000,000 (the "Swingline Facility")
and (B) the aggregate amount of Revolving Credit Advances that could be but is
not borrowed as of such date. Each Lender's Revolving Credit Commitment shall be
deemed utilized by an amount equal to such Lender's pro rata share (based on
such Lender's Revolving Credit Commitment) of each Swingline Loan for purposes
of determining the amount of Revolving Credit Advances required to be made by
such Lender, but no Lender's Revolving Credit Commitment, including NBD's, shall
be deemed utilized for purposes of determining commitment fees under Section
2.3(a). Swingline Loans shall bear interest at the Adjusted Prime Rate. Within
the limits of the Swingline Facility, so long as the Agent, in its sole
discretion, elects to make Swingline Loans, the Company may borrow and reborrow
under this Section 2.1(c)(i).
(ii) The Agent may at any time in its sole and absolute
discretion require that any Swingline Loan be refunded by a Revolving Credit
Loan which is an Adjusted Prime Rate Borrowing from the Revolving Lenders, and
upon written notice thereof by the Agent to the Revolving Credit Lenders and the
Company, the Company shall be deemed to have requested a Revolving Credit Loan
which is an Adjusted Prime Rate Borrowing in an amount equal to the amount of
such Swingline Loan, and such Adjusted Prime Rate Borrowing shall be made to
refund such Swing Line Loan. Each Revolving Credit Lender shall be absolutely
and unconditionally obligated to fund its pro rata share (based on such
Revolving Credit Lender's Revolving Credit Commitment) of such Adjusted Prime
Rate Borrowing or, if applicable, purchase a participating interest in the
Swingline Loans pursuant to Section 2.1(c)(iii) and such obligation shall not be
affected by any circumstance, including, without limitation, (A) any set-off,
counterclaim, recoupment, defense or other right which such Revolving Credit
Lender has or may have against the Agent or the Company or any if its
Subsidiaries or anyone else for any reason whatsoever; (B) the occurrence or
continuance of an Unmatured Event or an Event of Default, subject to Section
2.1(c)(iii); (C) any adverse change in the condition (financial or otherwise) of
the Company or any of its Subsidiaries; (D) any breach of this Agreement or any
other agreement by any other Lender, the Company or any Guarantor; or (E) any
other circumstance, happening or event whatsoever, whether or not similar to any
of the foregoing (including without limitation the Company's failure to satisfy
any conditions contained in Article II or any other provision of this
Agreement).
(iii) If, due to any Event of Default (including without
limitation as a result of the occurrence of an Event of Default with respect to
the Company or any of its Subsidiaries pursuant to Section 6.1(h)) Adjusted
Prime Rate Loans may not be made by the Revolving Credit Lenders as described in
Section 2.1(c)(ii), then (A) the Company agrees that each Swingline Loan not
paid pursuant to Section 2.1(c)(ii) shall bear interest, payable on demand by
the Agent, at the Overdue Rate, and (B) effective on the date each such Adjusted
Prime Rate Loan would otherwise have been made, each Revolving Credit Lender
severally agrees that it shall unconditionally and irrevocably, without regard
to the occurrence of any Unmatured Event or Event of Default or any other
circumstances, in lieu of deemed disbursement of loans, to the extent of such
CREDIT AGREEMENT Page 20
26
Revolving Credit Lender's Revolving Credit Commitment, purchase a participating
interest in the Swingline Loans by paying its participation percentage thereof.
Each Revolving Credit Lender will immediately transfer to the Agent, in same day
funds, the amount of its participation. After such payment to the Agent, each
Revolving Credit Lender shall share on a pro rata basis (calculated by reference
to its Revolving Credit Commitment) in any interest which accrues thereon and in
all repayments thereof. If and to the extent that any Revolving Credit Lender
shall not have so made the amount of such participating interest available to
the Agent, such Revolving Credit Lender and the Company severally agree to pay
to the Agent forthwith on demand such amount together with interest thereon, for
each day from the date of demand by the Agent until the date such amount is paid
to the Agent, at (x) in the case of the Company, the interest rate specified
above and (y) in the case of such Lender, the Federal Funds Rate for the first
five days after the date of demand by the Agent and thereafter at the interest
rate specified above.
(d) Limitation on Amount of Advances. Notwithstanding anything
in this Agreement to the contrary, the aggregate principal amount of the
Revolving Credit Advances at any time outstanding to the Company shall not
exceed the lesser of (i) the amount of the Borrowing Base at such time
determined by the Agent and (ii) the aggregate amount of the Revolving Credit
Commitments at such time minus (A) the unused amount of the Acquisition Amount,
provided that the Acquisition Amount may be borrowed, in whole or in part and
from time to time until the Acquisition Amount Expiry Date, if the conditions
for all Revolving Credit Advances are satisfied as well as the condition
described in Section 2.6(e), and any Borrowing for any Initial Acquisition shall
be deemed usage of the Acquisition Amount, minus (B) the 14% Senior Note
Portion, provided that the 14% Senior Note Portion shall not be deducted from
the Revolving Credit Commitments for any Revolving Credit Loan which will be
used solely to make a principal payment on the 14% Senior Notes if the
conditions for all Revolving Credit Advances are satisfied; provided, however,
that the aggregate principal amount of Letters of Credit outstanding at any time
shall not exceed $30,000,000. Notwithstanding anything herein to the contrary,
the aggregate principal amount of the portion of the Term Loan made by each Term
Loan Lender to the Company shall not exceed the amount of its respective Term
Loan Commitment.
2.2 Termination and Reduction of Revolving Credit Commitments. (a)
The Company shall have the right to terminate or reduce the Revolving Credit
Commitments at any time and from time to time, provided that (i) the Company
shall give notice of such termination or reduction to the Agent specifying the
amount and effective date thereof, (ii) each partial reduction of the Revolving
Credit Commitment shall be in a minimum amount of $5,000,000 and in an integral
multiple of $1,000,000 and shall reduce the Revolving Credit Commitments of all
of the Lenders proportionately in accordance with the respective Revolving
Credit Commitment amounts for each such Lender, (iii) no such termination or
reduction shall be permitted with respect to any portion of the Revolving Credit
Commitments as to which a request for an Advance pursuant to Section 2.4 is then
pending, (iv) the Revolving Credit Commitments may not be terminated if any
Revolving Credit Advances are then outstanding and may not be reduced below the
principal amount of Revolving Credit Advances then outstanding, (v) the
Revolving Credit Commitments may not be reduced below the outstanding principal
amount of 14% Senior Notes, (vi) the Revolving Credit Commitments shall be
automatically reduced by the unused amount of the Acquisition Amount on the
Acquisition Amount Expiry Date, and (vii) the Revolving Credit Commitments shall
reduce, on a pro rata basis, in 24 consecutive quarterly reductions on the last
Business Day of each March, June, September and December commencing with the
last Business Day of March, 1998, as follows:
CREDIT AGREEMENT Page 21
27
Date of each Quarterly Reduction of Revolving Amount of each Quarterly Amount of Annual
Reduction of Revolving Credit Reductions of Revolving
Credit Commitments Commitments Credit Commitments
Four principal installments on the last $1,375,000 $5,500,000
Business day of March, 1998, June, 1998,
September, 1998 and December, 1998
Four principal installments on the last $1,718,750 $6,875,000
Business Day of March, 1999, June, 1999,
September, 1999 and December, 1999
Four principal installments on the last $2,062,500 $8,250,000
Business Day of March, 2000, June, 2000,
September, 2000 and December, 2000
Four principal installments on the last $2,406,250 $9,625,000
Business Day of March, 2001, June, 2001,
September, 2001 and December, 2001
Four principal installments on the last $2,750,000 $11,000,000
Business Day of March, 2002, June, 2002,
September, 2002 and December, 2002
Four principal installments on the last $3,437,500 $13,750,000
Business Day of March, 2003, June, 2003,
September 2003 and December 2003
Upon any reduction of the Revolving Credit Commitments due to any expiration or
termination of all or any part of the Acquisition Amount, the Agent shall
recalculate the above quarterly reductions such that the reductions amortize the
difference of $55,000,000 minus such reduction at the same rate the above table
amortizes $55,000,000. The Revolving Credit Commitments or any portion thereof
terminated or reduced pursuant to this Section 2.2, whether optional or
mandatory, may not be reinstated.
(b) For purposes of this Agreement, a Letter of Credit Advance (i)
shall be deemed outstanding in an amount equal to the sum of the maximum amount
available to be drawn under the related Letter of Credit on or after the date of
determination and on or before the stated expiry date thereof plus the amount of
any draws under such Letter of Credit that have not been reimbursed as provided
in Section 3.3 and (ii) shall be deemed outstanding at all times on and before
such stated expiry date or such earlier date on which all amounts available to
be drawn under such Letter of Credit have been fully drawn, and thereafter until
all related reimbursement obligations have been paid pursuant to Section 3.3. As
provided in Section 3.3, upon each payment made by the Agent in respect of any
draft or other demand for payment under any Letter of Credit, the amount of any
Letter of Credit outstanding immediately prior to such payment shall be
automatically reduced by the amount of each Revolving Credit Loan deemed
advanced in respect of the related reimbursement obligation of the Company.
2.3 Fees (a) The Company agrees to pay to the Revolving Credit
Lenders a commitment fee on the daily average unused amount of the Revolving
Credit Commitment, for the period from the Effective Date to but excluding the
Termination Date, at a rate equal to the Applicable Margin. All Letters of
Credit shall be considered usage of the Revolving Credit Commitments. Accrued
commitment fees shall be payable quarterly in arrears on the last Business Day
of each March, June, September and December, commencing on June 30, 1997 and on
the Termination Date.
(b) The Company agrees to pay to the Agent (i) with respect to
Letters of Credit, a fee computed at the Applicable Margin calculated on the
maximum amount available to be drawn from time to time under a Letter of Credit,
which fee shall be paid annually in advance at the time such Letter of Credit is
issued for the period from and including the date of issuance of such Letter of
Credit to and including the stated expiry date
CREDIT AGREEMENT Page 22
28
of such Letter of Credit, which fees shall be for the pro rata benefit of the
Revolving Credit Lenders and (ii) in addition to all other fees, with respect to
all Letters of Credit, a fee computed at the rate of 0.15% per annum calculated
on the face amount of each Letter of Credit, which fee shall be paid at the time
each Letter of Credit is issued and shall be solely for the account of the
Agent. Such fees are nonrefundable and the Company shall not be entitled to any
rebate of any portion thereof if such Letter of Credit does not remain
outstanding through its stated expiry date or for any other reason. The Company
further agrees to pay to the Agent, on demand, such other customary
administrative fees, charges and expenses of the Agent in respect of the
issuance, negotiation, acceptance, amendment, transfer and payment of such
Letter of Credit or otherwise payable pursuant to the application and related
documentation under which such Letter of Credit is issued.
(c) The Company agrees to pay to the Agent agency fees for its
services as Agent under this Agreement and for other services in such amounts as
may from time to time be agreed to in writing between the Company and the Agent.
2.4 Disbursement of Advances. (a) The Company shall give the Agent
notice of its request for each Advance in substantially the form of Exhibit H-1
hereto or, in the case of the Acquisition Amount, Exhibit H-2 hereto, not later
than 10:00 a.m. Detroit time (i) three LIBOR Business Days prior to the date
such Advance is requested to be made if such Advance is to be made as a LIBOR
Borrowing, (ii) five Business Days prior to the date any Letter of Credit
Advance is requested to be made, (iii) on the Business Day such Advance is
requested to be made in the case of any Swingline Loan, (iv) other than in
connection with the acquisition of Aeroquip, ten Business Days prior to the date
such Advance is requested to be made if such Advance is the Acquisition Amount,
and (v) on the Business Day prior to the date such Advance is requested to be
made in all other cases, which notice shall specify whether a LIBOR Borrowing,
an Adjusted Prime Rate Borrowing, a Swingline Loan or a Letter of Credit Advance
is requested and, in the case of each requested LIBOR Borrowing, the LIBOR
Interest Period to be initially applicable to such Borrowing and, in the case of
each Letter of Credit Advance, such information as may be necessary for the
issuance thereof by the Agent. The Agent, not later than 12:00 noon the same
Business Day such notice is given, shall provide notice of such requested
Advance (other than Swingline Loan) to each Revolving Credit Lender in the case
of each Revolving Credit Advance and to each Term Loan Lender in the case of the
Term Loan. Subject to the terms and conditions of this Agreement, the proceeds
of each such requested Advance shall be made available to the Company by
depositing the proceeds thereof, in immediately available funds, in an account
maintained and designated by the Company at the principal office of the Agent.
Subject to the terms and conditions of this Agreement, the Agent shall, on the
date such Letter of Credit Advance is requested to be made, issue the related
Letter of Credit on behalf of the Revolving Credit Lenders for the account of
the Company. Notwithstanding anything herein to the contrary, the Agent may
decline to issue any requested Letter of Credit on the basis that the
beneficiary, the purpose of issuance or the terms or the conditions of drawing
are unacceptable to it in it reasonable discretion, provided that the Agent
shall not unreasonably decline to issue a Letter of Credit pursuant to this
sentence.
(b) Each Lender, not later than 2:00 p.m. on the date any Borrowing
in the form of a Loan for which such Lender has a Commitment is required to be
made, shall make its pro rata share of such Borrowing available in immediately
available funds at the principal office of the Agent for disbursement to the
Company. Unless the Agent shall have received notice from any Lender prior to
the date such Borrowing is requested to be made under this Section 2.4 that such
Lender will not make available to the Agent such Lender's pro rata portion of
such Borrowing, the Agent may assume that such Lender has made such portion
available to the Agent on the date such Borrowing is requested to be made in
accordance with this Section 2.4. If and to the extent such Lender shall not
have so made such pro rata portion available to the Agent, the Agent may (but
shall not be obligated to) make such amount available to the Company, and such
Lender and the Company severally agree to pay to the Agent forthwith on demand
such amount together with interest thereon, for each day from the date such
amount is made available to the Company by the Agent until the date such amount
is repaid to the Agent, at a rate per annum equal to, in the case of the
Company, the interest rate applicable to such Borrowing during such
CREDIT AGREEMENT Page 23
29
period and, in the case of any Lender, at the Federal Funds Rate for the first
five days and at the interest rate applicable to such borrowing thereafter. If
such Lender shall pay such amount to the Agent together with interest, such
amount so paid shall constitute a Loan by such Lender as a part of such
Borrowing for purposes of this Agreement. The failure of any Lender to make its
pro rata portion of any such Borrowing available to the Agent shall not relieve
any other Lender of its obligations to make available its pro rata portion of
such Borrowing on the date such Borrowing is requested to be made, but no Lender
shall be responsible for failure of any other Lender to make such pro rata
portion available to the Agent on the date of any such Borrowing.
(c) All Revolving Credit Loans shall be evidenced by the Revolving
Credit Notes, the Term Loan shall be evidenced by the Term Loan Notes, and the
Swingline Loans shall be evidenced by the Swingline Note and all such Loans
shall be due and payable and bear interest as provided in Article III. Each
Lender and the Agent is hereby authorized by the Company to record on the
schedule attached to the Notes, or in its books and records, the date, and
amount and type of each Loan and the duration of the related LIBOR Interest
Period (if applicable), the amount of each payment or prepayment of principal
thereon, and the other information provided for on such schedule, which schedule
or books and records, as the case may be, shall constitute prima facie evidence
of the information so recorded, provided, however, that failure of any Lender or
the Agent to record, or any error in recording, any such information shall not
relieve the Company of its obligation to repay the outstanding principal amount
of the Loans, all accrued interest thereon and other amounts payable with
respect thereto in accordance with the terms of the Notes and this Agreement.
Subject to the terms and conditions of this Agreement, the Company may borrow
Revolving Credit Advances under this Section 2.4 and under Section 3.3, prepay
Revolving Credit Advances pursuant to Section 3.1 and reborrow Revolving Credit
Advances but not the Term Loan under this Section 2.4.
(d) Nothing in this Agreement shall be construed to require or
authorize any Lender to issue any Letter of Credit, it being recognized that the
Agent has the sole obligation under this Agreement to issue Letters of Credit
for the risk of the Lenders. Upon issuance of a Letter of Credit by the Agent,
each Lender shall automatically acquire a pro rata risk participation interest
in such Letter of Credit Advance based on its respective Revolving Credit
Commitment. If the Agent shall honor a draft or other demand for payment
presented or made under any Letter of Credit, the Agent shall provide notice
thereof to each Lender on the date such draft or demand is honored unless the
Company or any of its Subsidiaries shall have satisfied its reimbursement
obligation under Section 3.3 by payment to the Agent on such date. Each Lender,
on such date, shall make its pro rata share of the amount paid by the Agent
available in immediately available funds at the principal office of the Agent
for the account of the Agent. If and to the extent such Lender shall not have
made any required pro rata portion available to the Agent, such Lender and the
Company, unconditionally and irrevocably, severally agree to pay to the Agent
forthwith on demand such amount together with interest thereon, for each day
from the date such amount was paid by the Agent until such amount is so made
available to the Agent at a per annum rate equal to the interest rate applicable
during such period to the related Loan disbursed under Section 3.3 in respect of
the reimbursement obligation of the Company. If such Lender shall pay such
amount to the Agent together with such interest, if any, accrued, such amount so
paid shall constitute a Revolving Credit Loan by such Lender as part of the
Revolving Credit Borrowing disbursed in respect of the reimbursement obligation
of the Company under Section 3.3 for purposes of this Agreement. The failure of
any Lender to make its pro rata portion of any such amount paid by the Agent
available to the Agent shall not relieve any other Lender of its obligation to
make available its pro rata portion of such amount, but no Lender shall be
responsible for failure of any other Lender to make such pro rata portion
available to the Agent. Notwithstanding anything herein to the contrary, it is
acknowledged and agreed that Letters of Credit hereunder may be issued for the
account of any of the Subsidiaries of the Company, provided that for all
purposes of this Agreement both the Company and such Subsidiary shall be deemed
the account party thereon and shall be jointly and severally liable for all
obligations in connection therewith and the Company shall have obtained an
agreement from such Subsidiary that such Subsidiary shall be bound all of the
terms and provisions of this Agreement with respect to Letters of Credit, such
agreement to be in form of substance satisfactory to the Agents.
CREDIT AGREEMENT Page 24
30
2.5 Conditions for First Disbursement. The obligation of the Lenders to
make the first Advance hereunder is subject to receipt by each Lender and the
Agent of the following documents and completion of the following matters, in
form and substance satisfactory to each Lender and the Agent:
(a) Charter Documents. Certificates of recent date of the
appropriate authority or official of the Company's and each Guarantor's
respective jurisdiction of organization listing all charter documents of the
Company or each Guarantor, respectively, on file in that office and certifying
as to the good standing and corporate existence of the Company or each
Guarantor, respectively, together with copies of such charter documents of the
Company or each Guarantor certified as of a recent date by such authority or
official and certified as true and correct as of the Effective Date by a duly
authorized officer of the Company or each Guarantor, respectively;
(b) By-Laws and Corporate Authorizations. Copies of the by-laws of
the Company and operating agreement of each Guarantor together with all
authorizing resolutions and evidence of other corporate action taken by the
Company and each Guarantor to authorize the execution, delivery and performance
by the Company and each Guarantor of this Agreement, the Notes and the Security
Documents to which the Company or such Guarantor, respectively, is a party and
the consummation by the Company or such Guarantor, respectively, of the
transactions contemplated hereby, certified as true and correct as of the
Effective Date by a duly authorized officer of the Company or each Guarantor,
respectively;
(c) Incumbency Certificate. Certificates of incumbency of the
Company and each Guarantor containing, and attesting to the genuineness of, the
signatures of those officers or members, as the case may be, authorized to act
on behalf of the Company or each Guarantor in connection with this Agreement,
the Notes and the Security Documents to which the Company and such Guarantor is
a party and the consummation by the Company or such Guarantor of the
transactions contemplated hereby, certified as true and correct as of the
Effective Date by a duly authorized officer of the Company and each Guarantor;
(d) Notes. The Notes duly executed on behalf of the Company for
each Lender;
(e) Security Documents. The Security Documents duly executed on
behalf of the Company and the Guarantors, as the case may be, granting to the
Lenders and the Agent the collateral and security intended to be provided
pursuant to Section 2.11, together with:
(i) Recording, Filing, Etc. Recordation, filing and other
action (including payment of any applicable taxes or fees) in such jurisdictions
as the Lenders or the Agent may deem necessary or appropriate with respect to
the Security Documents, including the filing of financing statements and similar
documents which the Lenders or the Agent may deem necessary or appropriate to
create, preserve or perfect the liens, security interests and other rights
intended to be granted to the Lenders or the Agent thereunder, together with
Uniform Commercial Code record searches in such offices as the Lenders or the
Agent may request;
(ii) Title Insurance. Policies of mortgage title insurance
issued by an insurer and in amounts satisfactory to the Lenders and the Agent,
insuring the interest of the Lenders and the Agent under the Mortgages without
standard exceptions and without any special exceptions not acceptable to the
Lenders and the Agent and containing such further endorsements, affirmative
coverage and other terms as the Lenders and the Agent may request;
(iii) Surveys. Surveys of the property subject to the Mortgages
made by a land surveyor licensed in the State in which such property is located
and acceptable to the Lenders and the Agent complying with the Minimum Standard
Detail Requirements for Land Title Surveys as adopted by the American
CREDIT AGREEMENT Page 25
31
Land Title Association and the American Congress on Surveying and Mapping and
showing such details as the Lenders and the Agent may request, certified to the
Lenders and the Agent and the issuer of such mortgage title insurance policy in
form acceptable to the Lenders and the Agent, or such surveys recertified by
such a surveyor sufficient to permit the issuers of all mortgage title insurance
policies to remove their standard exceptions;
(iv) Leased Property; Landlord Waivers. Copies of all real
property leases, certified as true and correct as of the Effective Date by a
duly authorized officer of the Company, and an agreement of each landlord under
such leases to the extent required by the Agent, in form and substance
acceptable to the Agent, waiving its distraint, lien and similar rights with
respect to any property subject to the Security Documents and agreeing to permit
the Lenders and the Agent to enter such premises in connection therewith; and
(v) Casualty and Other Insurance. Evidence that the casualty
and other insurance required pursuant to Section 5.1(c), paragraph 1(e) of the
Security Agreement and paragraph 6 of each Mortgage is in full force and effect;
(f) Legal Opinions. The favorable written opinion of counsel for the
Company and each Guarantor, substantially in the form of Exhibit I attached
hereto and as to such other matters as the Agent may request;
(g) Consents, Approvals, Etc. Copies of all governmental and
nongovernmental consents, approvals, authorizations, declarations, registrations
or filings, if any, required on the part of the Company or any Guarantor in
connection with the execution, delivery and performance of the Loan Documents or
the transactions contemplated hereby or as a condition to the legality, validity
or enforceability of, the Loan Documents, certified as true and correct and in
full force and effect as of the Effective Date by a duly authorized officer of
the Company, or if none are required, a certificate of such officer to that
effect;
(h) Subordinated Debt. Evidence satisfactory to the Agent that the
Company has incurred Subordinated Debt in an amount equal to or greater than
$125,000,000 in accordance with the Senior Subordinated Debt Documents, all
Senior Subordinated Debt Documents shall have been delivered to the Agent and
approved by the Agent and all transactions contemplated pursuant to the Senior
Subordinated Debt Documents shall have been completed;
(i) Environmental Certificate. An Environmental Certificate duly
executed by the Company and the Guarantors;
(j) Payments. Evidence satisfactory to the Agent that all transfers
of funds and payments described on Schedule 4.21 are being accomplished
simultaneously, or at such other time as noted on Schedule 4.21, with the first
Advance hereunder, including without limitation the payment in full of all
indebtedness and other liabilities, and the termination of all commitments to
lend and all Liens relating thereto, as described on Schedule 4.21;
(k) Due Diligence. The Agent shall have received and be satisfied
with a field asset examination of receivables and inventory (provided that it is
acknowledged that such field asset examination is a condition precedent only to
the Revolving Credit Advances), all environmental reports and liabilities, all
litigation searches, a review of all Contingent Liabilities, all fixed asset
appraisals and all other due diligence and investigation required by the Agent;
(l) Certificates. The Agent shall have received, in form and
substance satisfactory to the Agent, a pro forma covenant compliance certificate
and projection of tax payments, as of the Effective Date and as of the end of
each of the first four quarters after the Effective Date; and
CREDIT AGREEMENT Page 26
32
(m) 14% Senior Notes. Evidence satisfactory to the Agent that, after
giving effect to the payments on the 14% Senior Notes on the date hereof, the
outstanding aggregate principle balance of the 14% Senior Notes is equal to
$24,865,000, and the 14% Senior Debt Documents shall have been delivered to the
Agent and approved by the Agent and all transactions contemplated pursuant to
the tender offer and consent solicitation pursuant to the 14% Senior Notes shall
have been completed; and
(n) Other Conditions. Such other documents and completion of such
other matters as the Agent or any Lender may reasonably request, including
without limitation copies of all final projections and financial statements and
copies of the Purchase and Sale of Shares Promissory Agreement and all other
agreements and documents of the Company or any of its Subsidiaries relating to
MaP.
2.6 Further Conditions for Disbursement. The obligation of the Lenders
to make any Advance (including the first Advance), or any continuation or
conversion under Section 2.7, is further subject to the satisfaction of the
following conditions precedent:
(a) The representations and warranties contained in Article IV
hereof and in the Security Documents shall be true and correct on and as of the
date such Advance is made (both before and after such Advance is made) as if
such representations and warranties were made on and as of such date;
(b) No Event of Default or Unmatured Event shall exist or shall have
occurred and be continuing on the date such Advance is made and the making of
such Advance shall not cause an Event of Default or Unmatured Event;
(c) The Agent shall have received the Borrowing Base Certificate
pursuant to Section 5.1(d)(v) as of the close of business on the last day of the
month preceding the date such Advance is made;
(d) In addition to all other applicable conditions, in the case of
any Letter of Credit Advance, the Company shall have delivered to the Agent
issuing the related Letter of Credit an application for such Letter of Credit
and other related documentation requested by and acceptable to the Agent
appropriately completed and duly executed on behalf of the Company; and
(e) In addition to all other applicable conditions, in the case of
any Revolving Credit Advance using any portion of the Acquisition Amount to
consummate an Initial Acquisition, (i) the Company shall deliver evidence
satisfactory to the Agent that the Company will be completing such Initial
Acquisition simultaneously with the disbursement of any such Revolving Credit
Advance, (ii) all Initial Acquisition Documents with respect to such Initial
Acquisition shall have been delivered to the Agent and be satisfactory to the
Agent, (iii) such Initial Acquisitions shall have been completed in accordance
with the applicable Initial Acquisition Documents and the Company shall acquire,
free and clear of all Liens (other than Liens permitted by this Agreement), good
and marketable title to all assets being acquired pursuant to such Initial
Acquisition, (iv) such Initial Acquisition shall be completed in accordance with
all applicable laws and regulations, and such Initial Acquisition shall not be
void or voidable, (v) the Agent shall have completed such due diligence with
respect to the Initial Acquisitions as required by the Agent, (vi) such
Revolving Credit Advance shall be used solely to consummate such Initial
Acquisition and (vii) the Company shall deliver such customary legal opinions
and certificates required in connection with the Initial Acquisitions as
reasonably required by the Agent.
The Company shall be deemed to have made a representation and warranty to the
Lenders at the time of the making of, and the continuation or conversion of,
each Advance to the effects set forth in clauses (a) and (b) of this Section
2.6. For purposes of this Section 2.6, the representations and warranties
contained in Section 4.6
CREDIT AGREEMENT Page 27
33
hereof shall be deemed made with respect to both the financial statements
referred to therein and the most recent financial statements delivered pursuant
to Section 5.1(d)(ii) and (iii).
2.7 Subsequent Elections as to Borrowings. As to Revolving Credit
Loans, the Company may elect (a) to continue a LIBOR Borrowing of one type, or a
portion thereof, as a LIBOR Borrowing of the then existing type or (b) may elect
to convert a LIBOR Borrowing of one type, or a portion thereof, to a Borrowing
of another type or (c) elect to convert an Adjusted Prime Rate Borrowing, or a
portion thereof, to a LIBOR Borrowing, in each case by giving notice thereof to
the Agent in substantially the form of Exhibit J hereto not later than 10:00
a.m. Detroit time three LIBOR Business Days prior to the date any such
continuation of or conversion to a LIBOR Borrowing is to be effective and not
later than 10:00 a.m. Detroit time on the Business Day date such continuation or
conversion is to be effective in all other cases, provided that an outstanding
LIBOR Borrowing may only be converted on the last day of the then current LIBOR
Interest Period with respect to such Borrowing, and provided, further, if a
continuation of a Borrowing as, or a conversion of a Borrowing to, a LIBOR
Borrowing is requested, such notice shall also specify the LIBOR Interest Period
to be applicable thereto upon such continuation or conversion. The Agent, not
later than 1:00 p.m. the Business Day such notice is given, shall provide notice
of such election to the Revolving Credit Lenders. If the Company shall not
timely deliver such a notice with respect to any outstanding LIBOR Borrowing,
the Company shall be deemed to have elected to convert such LIBOR Borrowing to
an Adjusted Prime Rate Borrowing on the last day of the then current LIBOR
Interest Period with respect to such Borrowing.
2.8 Limitation of Requests and Elections. Notwithstanding any other
provision of this Agreement to the contrary, if, upon receiving a request for a
LIBOR Borrowing pursuant to Section 2.4, or a request for a continuation of a
LIBOR Borrowing, or a request for a conversion of an Adjusted Prime Rate
Borrowing to a LIBOR Borrowing pursuant to Section 2.7, (a) in the case of any
LIBOR Borrowing, deposits in Dollars for periods comparable to the LIBOR
Interest Period elected are not available to any Lender in the relevant
interbank or market, or (b) applicable interest rate will not adequately and
fairly reflect the cost to any Lender of making, funding or maintaining the
related LIBOR Borrowing or (c) by reason of national or international financial,
political or economic conditions or by reason of any applicable law, treaty,
rule or regulation (whether domestic or foreign) now or hereafter in effect, or
the interpretation or administration thereof by any governmental authority
charged with the interpretation or administration thereof, or compliance by any
Lender with any guideline, request or directive of such authority (whether or
not having the force of law), including without limitation exchange controls, it
is impracticable, unlawful or impossible for any Lender (i) to make or fund the
relevant LIBOR Borrowing or (ii) to continue such LIBOR Borrowing or (iii) to
convert a Borrowing to such a LIBOR Borrowing, then the Company shall not be
entitled, so long as such circumstances continue, to request a LIBOR Borrowing
pursuant to Section 2.4 or a continuation of or conversion to a LIBOR Borrowing
pursuant to Section 2.7. In the event that such circumstances no longer exist,
the Lenders shall again consider requests for LIBOR Borrowings pursuant to
Section 2.4, and requests for continuations of and conversions to LIBOR
Borrowings of the affected type pursuant to Section 2.7.
2.9 Minimum Amounts; Limitation on Number of Borrowings. Except for (a)
Advances and conversions thereof which exhaust the entire remaining amount of
the Commitments and (b) payments required pursuant to Section 3.8, each
Borrowing and each continuation or conversion pursuant to Section 2.7 and each
prepayment thereof shall be in a minimum amount of, in the case of LIBOR
Borrowings, $2,000,000 and in integral multiples of $1,000,000, and in the case
of Adjusted Prime Rate Borrowings, $500,000 and in integral multiples of
$100,000. No more than six LIBOR Interest Periods shall be permitted to exist at
any one time with respect to all Revolving Credit Borrowings outstanding
hereunder from time to time.
2.10 Borrowing Base Adjustments. The Company agrees that if at any time
any trade account receivable or any inventory of the Company or any Guarantor
fails to constitute Eligible Accounts Receivable or Eligible Inventory, as the
case may be, for any reason, the Agent may, at any time upon written notice to
the Company and notwithstanding any prior classification of eligibility,
classify such asset or property as ineligible and exclude the same from the
computation of the Borrowing Base. Additionally, the Agent may
CREDIT AGREEMENT Page 28
34
establish such reserves against the Eligible Accounts Receivables and Eligible
Inventory from time to time as determined by the Agent, in each case without in
any way impairing the rights of the Lenders and the Agent in and to the same
under the Security Agreements.
2.11 Security and Collateral. To secure the payment when due of the
Notes and all other obligations of the Company under this Agreement to the
Lenders and the Agent, the Company shall execute and deliver, or cause to be
executed and delivered, to the Lenders and the Agent Security Documents granting
the following:
(a) Security interests in all present and future accounts,
inventory, equipment, fixtures and all other personal property of the Company
and each Guarantor;
(b) Mortgage liens on all real property and fixtures of the Company
and each Guarantor;
(c) Pledges of 100% of the Capital Stock of all Domestic
Subsidiaries owned by the Company and 65% of all Capital Stock of all Foreign
Subsidiaries of the Company;
(d) Guarantees of all Domestic Subsidiaries of the Company;
(e) All other security and collateral described in the Security
Documents.
ARTICLE III
PAYMENTS AND PREPAYMENTS OF ADVANCES
3.1 Principal Payments.
(a) Unless earlier payment is required under this Agreement, the
Company shall pay to the Revolving Credit Lenders on the Termination Date the
entire outstanding principal amount of the Revolving Credit Loans outstanding to
it. If the Revolving Credit Advances at any time exceed the amount allowed
pursuant to Section 2.1(d), the Company shall prepay the Revolving Credit
Advances by an amount equal to or greater than such excess.
(b) Unless earlier payment is required under this Agreement, the
Company shall pay to the Term Loan Lenders the principal of the Term Loan in 30
consecutive quarterly installments payable on the last Business Day of each
March, June, September and December, commencing with the last Business Day of
June, 1997, as follows: (i) twenty six quarterly principal installments of
$75,000 each for the first twenty six quarterly payments and (ii) four principal
installments of $3,262,500 each for the next four quarterly installments, and on
the Maturity Date the Term Loan shall be paid in full.
(c) In addition to all other payments of the Loans required
hereunder, the Company shall prepay the Loan by an amount equal to 100% of all
of the Net Cash Proceeds from any sale or other disposition of any assets (other
than the sale of inventory in the ordinary course of business upon customary
credit terms, sales of scrap or obsolete material or equipment which are not
material in the aggregate and transfers of assets, including without limitation
Capital Stock, between Guarantors or between the Company and Guarantors) in
excess of $1,000,000 in aggregate amount in any fiscal year (other than such Net
Cash Proceeds which are used within 180 days of the date received to replace the
asset so sold or otherwise disposed of to acquire an asset of comparable value)
which payments shall be due 20 days after the end of each month for all such
sales and other dispositions during such month. The Company shall provide a
certificate to the Agent
CREDIT AGREEMENT Page 29
35
within 20 days after the each sale of assets which, but for the above
parenthetical, would cause a prepayment under this Section 3.1(c), which
certificate shall describe such sale of assets and estimate when such Net Cash
Proceeds will be used to purchase assets of a comparable value, and if such Net
Cash Proceeds are not used within 180 days after such sale or such earlier date
when the Company has determined not to purchase assets of comparable value with
such Net Cash Proceeds the Company will then prepay the Loans with such Net Cash
Proceeds. Such mandatory prepayments shall be applied pro rata between the Term
Loan and the Revolving Credit Advances, and shall be applied to installments of
the Term Loan in the inverse order or maturities until paid in full and any such
payments on the Revolving Credit Advances shall permanently reduce the amount of
the Revolving Credit Commitments and the amount of the Borrowing Base determined
pursuant to clause (d) of the definition of Borrowing Base, in each case by the
amount of such payment.
(d) In addition to all other payments of the Loans required
hereunder, subject to Section 3.1(f) the Company shall prepay the Loans by an
amount equal to 75% of all Net Cash Proceeds of any Subordinated Debt incurred
at any time, excluding the Subordinated Debt incurred on the Effective Date
pursuant to the Senior Subordinated Debt Documents. Such mandatory prepayments
shall be applied pro rata between the Term Loan and the Revolving Credit
Advances, and shall be applied to installments of the Term Loan in the inverse
order or maturities until paid in full and any such payments on the Revolving
Credit Advances shall permanently reduce the amount of the Revolving Credit
Commitments by the amount of such payment.
(e) In addition to all payments of the Loans required hereunder,
subject to Section 3.1(f) the Company shall prepay the Loans by an amount equal
to 75% of the Net Cash Proceeds from the issuance or other sale of any Capital
Stock of the Company or any of its Subsidiaries. Such mandatory prepayments on
the Loans shall be applied pro rata between the Term Loan and the Revolving
Credit Advances, and shall be applied to installments of the Term Loan in the
inverse order or maturities until paid in full and any such payments on the
Revolving Credit Advances shall permanently reduce the amount of the Revolving
Credit Commitments by the amount of such payment.
(f) Notwithstanding Sections 3.1(d) or (e), the first $10,000,000 of
the aggregate amount of the sum of the Net Cash Proceeds of any Subordinated
Debt incurred after the Effective Date plus the Net Cash Proceeds from the
issuance or other sale of any Capital Stock of the Company or any of its
Subsidiaries after the Effective Date shall not be subject to the provisions of
Section 3.1(d) or (e) if both before and after giving effect to such Net Cash
Proceeds (i) no Unmatured Event or Event of Default shall exist, (ii) the
Company is able to borrow at least $10,000,000 in Revolving Credit Loans and
(iii) the Total Debt to EBITDA Ratio is at least 0.5 below the level required
under this Agreement.
(g) The Company may at any time and from time to time prepay all or
a portion of the Loans, without premium or penalty, provided that (i) the
Company may not prepay any portion of any Loan as to which an election of or a
conversion to a LIBOR Loan is pending pursuant to 2.7, (ii) the Company shall
comply with all requirements of Section 3.9 in connection with any payment of
any LIBOR Loan, and (iii) all optional prepayments of the Term Loan shall be
applied to installments due thereon in the inverse order of maturities.
3.2 Interest Payments. The Company shall pay interest to the Lenders on
the unpaid principal amount of each Loan, for the period commencing on the date
such Loan is made until such Loan is paid in full, on each Interest Payment Date
and at maturity (whether at stated maturity, by acceleration or otherwise), and
thereafter on demand, at the following rates per annum:
(a) During such periods that such Loan is an Adjusted Prime Rate
Loan, the Adjusted Prime Rate.
CREDIT AGREEMENT Page 30
36
(b) During such periods that such Loan is a LIBOR Loan, the LIBOR
applicable to such Loan for each related LIBOR Interest Period.
Notwithstanding the foregoing paragraphs (a) and (b), the Company shall pay
interest on demand at the Overdue Rate on the outstanding principal amount of
any Loan and any other amount payable by the Company hereunder (other than
interest) upon and during the continuance of any Event of Default if required by
the Required Lenders.
3.3 Letter of Credit Reimbursement Payments. (a) (i) The Company agrees
to pay to the Agent, not later than 1:00 p.m. Detroit time on the date on which
the Agent shall honor a draft or other demand for payment presented or made
under such Letter of Credit, an amount equal to the amount paid by the Agent in
respect of such draft or other demand under such Letter of Credit and all
reasonable expenses paid or incurred by the Agent relative thereto (the
"Reimbursement Amount"). The Agent shall, on the date of each demand for payment
under any Letter of Credit issued by the Agent, give the Company notice thereof
and of the amount of the Company's reimbursement obligation and liability for
expenses relative thereto; provided that the failure of the Agent to give such
notice shall not affect the reimbursement and other obligations of the Company
under this Section 3.3. Unless the Company shall have made such payment to the
Agent on such day, upon each such payment by the Agent, the Company shall be
deemed to have elected to satisfy its reimbursement obligation by an Adjusted
Prime Rate Borrowing in an amount equal to the amount so paid by the Agent in
respect of such draft or other demand under such Letter of Credit, and the Agent
shall be deemed to have disbursed to the Company, for the account of the
Revolving Credit Lenders, the Adjusted Prime Rate Loans comprising such Adjusted
Prime Rate Borrowing, and each Revolving Credit Lender shall make its share of
each such Adjusted Prime Rate Borrowing available to the Agent in accordance
with this Agreement. Such Adjusted Prime Rate Loans shall be deemed disbursed
notwithstanding any failure to satisfy any conditions for disbursement of any
Loan and, to the extent of the Adjusted Prime Rate Loans so disbursed, the
reimbursement obligation of the Company with respect to such Letter of Credit
under this subsection (a)(i) shall be deemed satisfied.
(ii) If, for any reason (including without limitation as a
result of the occurrence of an Event of Default with respect to the Company
pursuant to Section 6.1(h)), Adjusted Prime Rate Loans may not be made by the
Revolving Credit Lenders as described in subsection (a)(i) of this Section 3.3,
(A) the Company agrees that each Reimbursement Amount not paid pursuant to the
first sentence of subsection (a)(i) of this Section 3.3 shall bear interest,
payable on demand by the Agent, at the interest rate then applicable to Adjusted
Prime Rate Loans, and (B) effective on the date each such Adjusted Prime Rate
Loan would otherwise have been made with respect to any Letter of Credit, each
Revolving Credit Lender severally agrees that it shall unconditionally and
irrevocably, without regard to the occurrence of any Event of Default or
Unmatured Event to the extent of such Revolving Credit Lender's pro rata share
(based on the percentage of the aggregate Revolving Credit Commitments of all
Revolving Credit Lenders then constituted by such Revolving Credit Lender's
Revolving Credit Commitment) purchase a participating interest in each
Reimbursement Amount. Each such Lender will immediately transfer to the Agent,
in same day funds, the amount of its participation. Each such Lender shall share
on a pro rata basis in any interest which accrues thereon and in all repayments
thereof. If and to the extent that any Lender shall not have so made the amount
of such participating interest available to the Agent, such Lender agrees to pay
to the Agent forthwith on demand such amount together with interest thereon, for
each day from the date of demand by the Agent until the date such amount is paid
to the Agent, at the Federal Funds Rate for the first five days after such
demand and at the Overdue Rate thereafter.
(iii) Each Revolving Credit Lender shall be obligated,
absolutely and unconditionally, to make Adjusted Prime Rate Loans pursuant to
Section 3.3(a)(i) to purchase and fund participation interests in Letters of
Credit pursuant to Section 2.4(d) and 3.3(a)(ii) and the obligation shall not be
affected by any circumstance whatsoever, including, without limitation, (i) any
set off, counterclaim,
CREDIT AGREEMENT Page 31
37
recoupment, defense or other right which such Lender or the Company may have
against the Agent, the Company or anyone else for any reason whatsoever, (ii)
the occurrence of any Event of Default or Unmatured Event (iii) any adverse
change in the condition (financial or otherwise) of the Company or any of their
Subsidiaries, (iv) any breach of this Agreement by the Company, any of its
Subsidiaries, the Agent, or any other Lender, or (v) any other circumstance,
happening or event whatsoever, whether or not similar to any of the foregoing,
including without limitation any termination or other limitation on the
Revolving Credit Commitments or any failure to satisfy any conditions precedent
to any Advance contained herein or any other provision of this Agreement.
(b) The reimbursement obligation of the Company under this Section
3.3 shall be absolute, unconditional and irrevocable and shall remain in full
force and effect until all obligations of the Company to the Lenders hereunder
shall have been satisfied, and such obligations of the Company shall not be
affected, modified or impaired upon the happening of any event, including
without limitation, any of the following, whether or not with notice to, or the
consent of, the Company:
(i) Any lack of validity or enforceability of any Letter of
Credit or any documentation relating to any Letter of Credit or to any
transaction related in any way to such Letter of Credit (the "Letter of Credit
Documents");
(ii) Any amendment, modification, waiver, consent, or any
substitution, exchange or release of or failure to perfect any interest in
collateral or security, with respect to any of the Letter of Credit Documents;
(iii) The existence of any claim, setoff, defense or other right
which the Company may have at any time against any beneficiary or any transferee
of any Letter of Credit (or any Persons or entities for whom any such
beneficiary or any such transferee may be acting), the Agent or any Lender or
any other Person or entity, whether in connection with any of the Letter of
Credit Documents, the transactions contemplated herein or therein or any
unrelated transactions;
(iv) Any draft or other statement or document presented under
any Letter of Credit proving to be forged, fraudulent, invalid or insufficient
in any respect or any statement therein being untrue or inaccurate in any
respect;
(v) Payment by the Agent to the beneficiary under any Letter
of Credit against presentation of documents which do not comply with the terms
of the Letter of Credit, including failure of any documents to bear any
reference or adequate reference to such Letter of Credit;
(vi) Any failure, omission, delay or lack on the part of the
Agent, the Agent or any Lender or any party to any of the Letter of Credit
Documents to enforce, assert or exercise any right, power or remedy conferred
upon the Agent, the Agent, any Lender or any such party under this Agreement or
any of the Letter of Credit Documents, or any other acts or omissions on the
part of the Agent, the Agent, any Lender or any such party; or
(vii) Any other event or circumstance that would, in the absence
of this clause, result in the release or discharge by operation of law or
otherwise of the Company from the performance or observance of any obligation,
covenant or agreement contained in this Section 3.3.
No setoff, counterclaim, reduction or diminution of any obligation or any
defense of any kind or nature which the Company has or may have against the
beneficiary of any Letter of Credit shall be available hereunder to the
CREDIT AGREEMENT Page 32
38
Company against the Agent or any Lender. Nothing in this Section 3.3 shall limit
the liability, if any, of the Lenders to the Company pursuant to Section 3.3(c).
(c) The Company hereby indemnifies and agrees to hold harmless the
Lenders, the Agent and their respective officers, directors, employees and
agents, harmless from and against any and all claims, damages, losses,
liabilities, costs or expenses of any kind or nature whatsoever which the
Lenders, the Agent or any such Person may incur or which may be claimed against
any of them by reason of or in connection with any Letter of Credit, and neither
any Lender, the Agent nor any of their respective officers, directors, employees
or agents shall be liable or responsible for: (i) the use which may be made of
any Letter of Credit or for any acts or omissions of any beneficiary in
connection therewith; (ii) the validity, sufficiency or genuineness of documents
or of any endorsement thereon, even if such documents should in fact prove to be
in any or all respects invalid, insufficient, fraudulent or forged; (iii)
payment by the Agent to the beneficiary under any Letter of Credit against
presentation of documents which do not comply with the terms of any Letter of
Credit, including failure of any documents to bear any reference or adequate
reference to such Letter of Credit; (iv) any error, omission, interruption or
delay in transmission, dispatch or delivery of any message or advice, however
transmitted, in connection with any Letter of Credit; or (v) any other event or
circumstance whatsoever arising in connection with any Letter of Credit;
provided, however, that the Company shall not be required to indemnify the
Lenders, the Agent and such other Persons, and the Lenders shall be severally
liable to the Company to the extent, but only to the extent, of any direct, as
opposed to consequential or incidental, damages suffered by the Company which
were caused by (A) the Agent's wrongful dishonor of any Letter of Credit after
the presentation to it by the beneficiary thereunder of a draft or other demand
for payment and other documentation strictly complying with the terms and
conditions of such Letter of Credit, or (B) the payment by the Agent to the
beneficiary under any Letter of Credit against presentation of documents which
do not comply with the terms of the Letter of Credit to the extent, but only to
the extent, that such payment constitutes gross negligence or wilful misconduct
of the Agent; provided that none of the Agent, any Lender or any such Person
shall have the right to be indemnified hereunder for its own gross negligence or
wilful misconduct as determined by a court of competent jurisdiction. It is
understood that in making any payment under a Letter of Credit the Agent will
rely on documents presented to it under such Letter of Credit as to any and all
matters set forth therein without further investigation and regardless of any
notice or information to the contrary, and such reliance and payment against
documents presented under a Letter of Credit substantially complying with the
terms thereof shall not be deemed gross negligence or wilful misconduct of the
Agent in connection with such payment. It is further acknowledged and agreed
that the Company may have rights against the beneficiary or others in connection
with any Letter of Credit with respect to which the Lenders or the Agent are
alleged to be liable and it shall be a precondition of the assertion of any
liability of the Lenders or the Agent under this Section that the Company shall
first have exhausted all remedies in respect of the alleged loss against such
beneficiary and any other parties obligated or liable in connection with such
Letter of Credit and any related transactions.
(d) Letters of Credit may be issued in any currency acceptable to
the Agent, provided that all Reimbursement Amounts payable by the Company shall
be paid in Dollars in an amount equal to the Dollar Equivalent of such
Reimbursement Amount as determined at the time the Agent makes payment under any
Letter of Credit and not more than an amount equal to the Dollar Equivalent of
$15,000,000 in Letters of Credit in any currency other than Dollars may be
issued, which Dollar Equivalent shall be measured at the time of issuance of any
Letter of Credit. For purposes of this Agreement, the outstanding amount of any
Letter of Credit issued in any currency other than Dollars shall be equal the
Dollar Equivalent thereof.
3.4 Payment Method. (a) All payments to be made by the Company hereunder
will be made in Dollars and in immediately available funds to the Agent for the
account of the Lenders at its address set forth on the signature pages not later
than 1:00 p.m. Detroit time on the date on which such payment shall become due.
Payments received after 1:00 p.m. Detroit time shall be deemed to be payments
made prior to 1:00 p.m. Detroit time on the next succeeding Business Day. The
Company hereby authorizes the Agent to charge its account with
CREDIT AGREEMENT Page 33
39
the Agent in order to cause timely payment of principal, interest and fees due
under Section 2.3 to be made (subject to sufficient funds being available in
such account for that purpose).
(b) At the time of making each such payment, the Company shall,
subject to the other terms and conditions of this Agreement, specify to the
Agent that Advance or other obligation of the Company hereunder to which such
payment is to be applied. In the event that the Company fails to so specify the
relevant obligation or if an Event of Default shall have occurred and be
continuing, the Agent may apply such payments as it may determine.
(c) On the day such payments are deemed received, the Agent shall
remit to the Lenders their pro rata shares of such payments in immediately
available funds, (i) in the case of payments of principal and interest on any
Borrowing, determined with respect to each such Lender by the ratio which the
outstanding principal balance of its Loan included in such Borrowing bears to
the outstanding principal balance of the Loans of all the Lenders included in
such Borrowing and (ii) in the case of fees paid pursuant to Section 2.3 and
other amounts payable hereunder (other than the Agent's fees payable pursuant to
Section 2.3(c) and amounts payable to any Lender under Section 2.4 or 3.7)
determined with respect to each such Revolving Credit Lender by the ratio which
the Commitment of such Revolving Credit Lender bears to the Commitments of all
the Revolving Credit Lenders.
3.5 No Setoff or Deduction. All payments of principal and interest on
the Loans and other amounts payable by the Company hereunder shall be made by
the Company without setoff or counterclaim, and free and clear of, and without
deduction or withholding for, or on account of, any present or future taxes,
levies, imposts, duties, fees, assessments, or other charges of whatever nature,
imposed by any governmental authority, or by any department, agency or other
political subdivision or taxing authority.
3.6 Payment on Non-Business Day; Payment Computations. Except as
otherwise provided in this Agreement to the contrary, whenever any installment
of principal of, or interest on, any Loan or any other amount due hereunder
becomes due and payable on a day which is not a Business Day, the maturity
thereof shall be extended to the next succeeding Business Day and, in the case
of any installment of principal, interest shall be payable thereon at the rate
per annum determined in accordance with this Agreement during such extension.
Computations of interest and other amounts due under this Agreement shall be
made on the basis of a year of 360 days for the actual number of days elapsed,
including the first day but excluding the last day of the relevant period,
provided that the computation of interest at the Adjusted Prime Rate and of
commitment fees under Section 2.3(a) shall be made on the basis of a year of 365
days for the actual number of days elapsed, including the first day but
excluding the last day of the relevant period.
3.7 Additional Costs. (a) In the event that any applicable law, treaty,
rule or regulation (whether domestic or foreign) now or hereafter in effect and
whether or not presently applicable to any Lender or the Agent, or any
interpretation or administration thereof by any governmental authority charged
with the interpretation or administration thereof, or compliance by any Lender
or the Agent with any guideline, request or directive of any such authority
(whether or not having the force of law), shall (i) directly affect the basis of
taxation of payments to any Lender or the Agent of any amounts payable by the
Company under this Agreement (other than taxes imposed on the overall net income
of any Lender or the Agent, by the jurisdiction, or by any political subdivision
or taxing authority of any such jurisdiction, in which any Lender or the Agent,
as the case may be, has its principal office), or (ii) shall impose, modify or
deem applicable any reserve, special deposit or similar requirement against
assets of, deposits with or for the account of, or credit extended by any Lender
or the Agent, or (iii) shall impose any other condition with respect to this
Agreement, the Commitments, the Notes or the Loans or any Letter of Credit, and
the result of any of the foregoing (i.e., (i), (ii) or (iii)) is to increase the
cost to any Lender or the Agent, as the case may be, of making, funding or
maintaining any LIBOR Loan or any Letter of Credit or to reduce the amount of
any sum receivable by any Lender or the Agent, as the case may be,
CREDIT AGREEMENT Page 34
40
thereon, then the Company shall pay to such Lender or the Agent, as the case may
be, from time to time, upon request by such Lender (with a copy of such request
to be provided to the Agent) or the Agent, additional amounts sufficient to
compensate such Lender or the Agent, as the case may be, for such increased cost
or reduced sum receivable to the extent, in the case of any LIBOR Loan, such
Lender or the Agent is not compensated therefor in the computation of the
interest rate applicable to such LIBOR Loan. A statement as to the amount of
such increased cost or reduced sum receivable, prepared in good faith and in
reasonable detail by such Lender or the Agent, as the case may be, and submitted
by such Lender or the Agent, as the case may be, to the Company, shall be
conclusive and binding for all purposes absent manifest error in computation.
(b) In the event that any applicable law, treaty, rule or regulation
(whether domestic or foreign) now or hereafter in effect and whether or not
presently applicable to any Lender or the Agent, or any interpretation or
administration thereof by any governmental authority charged with the
interpretation or administration thereof, or compliance by any Lender or the
Agent with any guideline, request or directive of any such authority (whether or
not having the force of law), including any risk-based capital guidelines,
affects or would affect the amount of capital required or expected to be
maintained by such Lender or the Agent (or any corporation controlling such
Lender or the Agent) and such Lender or the Agent, as the case may be,
determines that the amount of such capital is increased by or based upon the
existence of such Lender's or the Agent's obligations hereunder and such
increase has the effect of reducing the rate of return on such Lender's or the
Agent's (or such controlling corporation's) capital as a consequence of such
obligations hereunder to a level below that which such Lender or the Agent (or
such controlling corporation) could have achieved but for such circumstances
(taking into consideration its policies with respect to capital adequacy) by an
amount deemed by such Lender or the Agent to be material, then the Company shall
pay to such Lender or the Agent, as the case may be, from time to time, upon
request by such Lender (with a copy of such request to be provided to the Agent)
or the Agent, additional amounts sufficient to compensate such Lender or the
Agent (or such controlling corporation) for any increase in the amount of
capital and reduced rate of return which such Lender or the Agent reasonably
determines to be allocable to the existence of such Lender's or the Agent's
obligations hereunder. A statement as to the amount of such compensation,
prepared in good faith and in reasonable detail by such Lender or the Agent, as
the case may be, and submitted by such Lender or the Agent to the Company, shall
be conclusive and binding for all purposes absent manifest error in computation.
3.8 Illegality and Impossibility. In the event that any applicable law,
treaty, rule or regulation (whether domestic or foreign) now or hereafter in
effect and whether or not presently applicable to any Lender, or any
interpretation or administration thereof by any governmental authority charged
with the interpretation or administration thereof, or compliance by any Lender
with any guideline, request or directive of such authority (whether or not
having the force of law), including without limitation exchange controls, shall
make it unlawful or impossible for any Lender to maintain any LIBOR Loan under
this Agreement, the Company shall upon receipt of notice thereof from such
Lender, repay in full the then outstanding principal amount of each LIBOR Loan
so affected, together with all accrued interest thereon to the date of payment
and all amounts owing to such Lender under Section 3.9, which LIBOR Loan may be
repaid with an Adjusted Prime Rate Loan if the conditions for such Loan are
satisfied, in each case (a) on the last day of the then current LIBOR Interest
Period applicable to such Loan if such Lender may lawfully continue to maintain
such Loan to such day, or (b) immediately if such Lender may not continue to
maintain such Loan to such day.
3.9 Indemnification. If the Company makes any payment of principal with
respect to any LIBOR Loan on any other date than the last day of a LIBOR
Interest Period applicable thereto (whether pursuant to Section 3.8, Section 6.2
or otherwise), or if the Company fails to borrow any LIBOR Loan after notice has
been given to the Lenders in accordance with Section 2.4, or if the Company
fails to make any payment of principal or interest in respect of a LIBOR Loan
when due, the Company shall reimburse each Lender on demand for any resulting
loss or expense incurred by each such Lender, including without limitation any
loss incurred in obtaining, liquidating or employing deposits from third
parties, whether or not such Lender shall have funded or
CREDIT AGREEMENT Page 35
41
committed to fund such Loan. A statement as to the amount of such loss or
expense, prepared in good faith and in reasonable detail by such Lender and
submitted by such Lender to the Company, shall be conclusive and binding for all
purposes absent manifest error in computation. Calculation of all amounts
payable to such Lender under this Section 3.9 shall be made as though such
Lender shall have actually funded or committed to fund the relevant LIBOR Loan
through the purchase of an underlying deposit in an amount equal to the amount
of such Loan and having a maturity comparable to the related LIBOR Interest
Period and through the transfer of such deposit from an offshore office of such
Lender to a domestic office of such Lender in the United States of America;
provided, however, that such Lender may fund any LIBOR Loan in any manner it
sees fit and the foregoing assumption shall be utilized only for the purpose of
calculation of amounts payable under this Section 3.9.
3.10 Substitution of Lender. If (i) the obligation of any Lender to make
or maintain LIBOR Loans has been suspended pursuant to Section 3.8 when not all
Lenders obligations have been suspended (ii) any Lender has demanded
compensation under Section 3.7 or (iii) any Lender is a Defaulting Lender, the
Company shall have the right, if no Unmatured Event or Event of Default then
exists, to replace such Lender (a "Replaced Lender") with one or more other
lenders (collectively, the "Replacement Lender") acceptable to the Agent,
provided that (x) at the time of any replacement pursuant to this Section 3.10,
the Replacement Lender shall enter into one or more Assignment and Acceptances,
pursuant to which the Replacement Lender shall acquire the Commitments and
outstanding Advances and other obligations of the Replaced Lender and, in
connection therewith, shall pay to the Replaced Lender in respect thereof an
amount equal to the sum of (A) the amount of principal of, and all accrued
interest on, all outstanding Loans of the Replaced Lender, (B) the amount of all
accrued, but theretofore unpaid, fees owing to the Replaced Lender under Section
2.3 and (C) the amount which would be payable by the Company to the Replaced
Lender pursuant to Section 3.9 if the Company prepaid at the time of such
replacement all of the Loans of such Replaced Lender outstanding at such time
and (y) all obligations of the Company then owing to the Replaced Lender (other
than those specifically described in clause (x) above in respect of which the
assignment purchase price has been, or is concurrently being, paid) shall be
paid in full to such Replaced Lender concurrently with such replacement. Upon
the execution of the respective Assignment and Acceptances, the payment of
amounts referred to in clauses (x) and (y) above and, if so requested by the
Replacement Lender, delivery to the Replacement Lender of the appropriate Note
or Notes executed by the Company, the Replacement Lender shall become a Lender
hereunder and the Replaced Lender shall cease to constitute a Lender hereunder.
The provisions of this Agreement (including without limitation Sections 3.9 and
8.5) shall continue to govern the rights and obligations of a Replaced Lender
with respect to any Loans made or any other actions taken by such lender while
it was a Lender. Nothing herein shall release any Defaulting Lender from any
obligation it may have to the Company, the Agent or any other Lender.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
The Company represents and warrants that:
4.1 Corporate Existence and Power. The Company is a corporation duly
organized, validly existing and in good standing under the laws of the
jurisdiction of incorporation or organization, and is duly qualified to do
business, and is in good standing, in all additional jurisdictions where such
qualification is necessary under applicable law, except for those jurisdictions
where the failure to so qualify or be in good standing could not result in any
Material Adverse Effect. The Company has all requisite corporate power to own or
lease the properties used in its business and to carry on its business as now
being conducted and as proposed to be
CREDIT AGREEMENT Page 36
42
conducted, and to execute and deliver the Loan Documents to which it is a party
and to engage in the transactions contemplated by the Loan Documents.
4.2 Corporate Authority. The execution, delivery and performance by the
Company and the Guarantors of the Loan Documents to which it is a party have
been duly authorized by all necessary corporate action and are not in
contravention of any law, rule or regulation, or any judgment, decree, writ,
injunction, order or award of any arbitrator, court or governmental authority,
or of the terms of the Company's or any Guarantor's charter or by-laws, or of
any contract or undertaking to which the Company or any Guarantor is a party or
by which the Company or any Guarantor or their respective property may be bound
or affected or result in the imposition of any Lien except for Permitted Liens.
4.3 Binding Effect. The Loan Documents to which the Company or any
Guarantor is a party are the legal, valid and binding obligations of the Company
and the Guarantors, respectively, enforceable against the Company and the
Guarantors in accordance with their respective terms, subject to the effect of
bankruptcy, insolvency, reorganization, moratorium and other similar laws
affecting the rights of creditors generally and by general principles of equity.
4.4 Subsidiaries. Schedule 4.4 hereto correctly sets forth the corporate
name, jurisdiction of organization and ownership of each Subsidiary of the
Company. Each such Subsidiary and each Person becoming a Subsidiary of the
Company after the date hereof is and will be a corporation or limited liability
company duly organized, validly existing and in good standing under the laws of
its jurisdiction of incorporation or organization and is and will be duly
qualified to do business in each additional jurisdiction where such
qualification is or may be necessary under applicable law, except for those
jurisdictions where the failure to so qualify or be in good standing could not
result in any Material Adverse Effect. Each Subsidiary of the Company has and
will have all requisite power to own or lease the properties used in its
business and to carry on its business as now being conducted and as proposed to
be conducted, except where the failure to have such power could not result in a
Material Adverse Effect. All outstanding shares of capital stock of each class
of each Subsidiary of the Company have been and will be validly issued and are
and will be fully paid and nonassessable and, except as otherwise indicated in
Schedule 4.4 hereto, are and will be owned, beneficially and of record, by the
Company or another Subsidiary of the Company free and clear of any Liens other
than as permitted under this Agreement.
4.5 Litigation. Except as set forth in Schedule 4.5 hereto, there is no
action, suit or proceeding pending or, to the best of the Company's knowledge,
threatened against or affecting the Company or any of its Subsidiaries before or
by any court, governmental authority or arbitrator, which if adversely decided
might result, either individually or collectively, in any Material Adverse
Effect and, to the best of the Company's knowledge, there is no basis for any
such action, suit or proceeding.
4.6 Financial Condition. The consolidated balance sheet of the Company
and its Subsidiaries and the consolidated statements of income, retained
earnings and cash flows of the Company and its Subsidiaries for the fiscal year
ended December 31, 1996 and reported on by Coopers & Xxxxxxx L.L.P., independent
certified public accountants, copies of which have been furnished to the
Lenders, fairly present, and the financial statements of the Company and its
Subsidiaries delivered pursuant to Section 5.1(d) will fairly present, the
consolidated financial position of the Company and its Subsidiaries as at the
respective dates thereof, and the consolidated results of operations of the
Company and its Subsidiaries for the respective periods indicated, all in
accordance with Generally Accepted Accounting Principles (subject, in the case
of said interim statements, to year-end audit adjustments). The budgeted
consolidated and consolidating financial statements of the Company and its
Subsidiaries and the pro forma projections of consolidated financial results of
the Company and its Subsidiaries for each of the fiscal years ending December
31, 1997 through December 31, 2001 are based on appropriate assumptions and the
best information available. There has been no Material Adverse Effect since
CREDIT AGREEMENT Page 37
43
December 31, 1996. There is no material Contingent Liability of the Company that
is not reflected in such financial statements or in the notes thereto.
4.7 Use of Advances. The Company will use the proceeds of the initial
Advances hereunder as described in Section 4.21, and will use all other Advances
for general corporate purposes. Without limiting the foregoing, it is
acknowledged that this Agreement refinances the Credit and Security Agreement
dated November 17, 1992 entered into by and between the Company and Comerica
Bank, as amended. Neither the Company nor any of its Subsidiaries extends or
maintains, in the ordinary course of business, credit for the purpose, whether
immediate, incidental, or ultimate, of buying or carrying margin stock (within
the meaning of Regulation G or U of the Board of Governors of the Federal
Reserve System), and no part of the proceeds of any Advance will be used for the
purpose, whether immediate, incidental, or ultimate, of buying or carrying any
such margin stock or maintaining or extending credit to others for such purpose.
4.8 Consents, Etc. Except for such consents, approvals, authorizations,
declarations, registrations or filings delivered by the Company pursuant to
Section 2.5(g), if any, each of which is in full force and effect, no consent,
approval or authorization of or declaration, registration or filing with any
governmental authority or any nongovernmental Person or entity, including
without limitation any creditor, lessor or stockholder of the Company or any of
its Subsidiaries, is required on the part of the Company or any Guarantor in
connection with the execution, delivery and performance of any Loan Document or
the transactions contemplated hereby or as a condition to the legality, validity
or enforceability of any Loan Document.
4.9 Taxes. The Company and its Subsidiaries have filed all tax returns
(federal, state and local) required to be filed and have paid all taxes shown
thereon to be due and required to be paid including interest and penalties, or
have established adequate financial reserves on their respective books and
records for payment thereof. Neither the Company nor any of its Subsidiaries
knows of any actual or proposed tax assessment or any basis therefor, and no
extension of time for the assessment of deficiencies in any federal or state tax
has been granted by the Company or any Subsidiary.
4.10 Title to Properties. Except as otherwise disclosed in the latest
balance sheet delivered pursuant to Section 4.6 or 5.1(d) of this Agreement, the
Company or one or more of its Subsidiaries have good and marketable fee simple
title to all of the real property reflected in said balance sheet, and a valid
and indefeasible ownership interest in all of the other properties and assets
reflected in said balance sheet or subsequently acquired by the Company or any
Subsidiary. All of such properties and assets are free and clear of any Lien
except for Permitted Liens. The Security Documents grant a first priority,
enforceable and perfected lien and security interest which is not void or
voidable in all real property, personal property and all other assets of the
Company and each Guarantor, subject only to Permitted Liens.
4.11 ERISA. The Company, its Subsidiaries, the ERISA Affiliates and the
Plans are in compliance in all material respects with those provisions of ERISA
and of the Code which are applicable with respect to any Plan. No Prohibited
Transaction and no Reportable Event has occurred with respect to any Plan. None
of the Company, any of its Subsidiaries or any of the ERISA Affiliates is an
employer with respect to any Multiemployer Plan. The Company, its Subsidiaries
and the ERISA Affiliates have met the minimum funding requirements under ERISA
and the Code with respect to each of their respective Plans, if any, and (b)
other than obligations in the ordinary course of business to make Plan
contributions and pay PBGC premiums which have been paid when due, not incurred
any liability to the PBGC or any Plan. Assuming the funds provided by each
Lender do not constitute the plan assets of any pension plan, the execution,
delivery and performance of this Agreement, the Notes and the Security Documents
does not constitute a Prohibited Transaction. There is no material Unfunded
Benefit Liability with respect to any Plan. As of the Effective Date, the
Company and its Subsidiaries have no Plans.
CREDIT AGREEMENT Page 38
44
4.12 Disclosure. No report or other information furnished in writing or
on behalf of the Company or any Subsidiary to any Lender or the Agent in
connection with the negotiation or administration of this Agreement contains to
the best of its knowledge any material misstatement of fact or omits to state
any material fact or any fact necessary to make the statements contained therein
not misleading. No Loan Document nor any other document, certificate, or report
or statement or other information furnished to any Lender or the Agent by or on
behalf of the Company or any Subsidiary in connection with the transactions
contemplated hereby contains any untrue statement of a material fact or omits to
state a material fact in order to make the statements contained herein and
therein not misleading. There is no fact known to the Company which materially
and adversely affects, or which in the future may materially and adversely
affect, the business, properties, operations or condition, financial or
otherwise, of the Company or any Subsidiary, which has not been set forth in
this Agreement or in the other documents, certificates, statements, reports and
other information furnished in writing to the Lenders by or on behalf of the
Company or any Subsidiary in connection with the transactions contemplated
hereby taken as a whole, including without limitation the offering memorandum
for the Senior Subordinated Notes.
4.13 Environmental and Safety Matters. All representations and
warranties made by the Company and the Guarantors in the Environmental
Certificate delivered pursuant to Section 2.5(i) and Section 5.1(d)(x) are true
and correct.
4.14 Borrowing Base. All trade accounts receivable and inventory of the
Company and each Guarantor represented or reported by the Company to be, or are
otherwise included in, Eligible Accounts Receivable and Eligible Inventory
comply in all respects with the requirements therefor set forth in the
definition thereof, and the computations of the Borrowing Base set forth in each
Borrowing Base Certificate are true and correct.
4.15 No Default. Neither the Company nor any Subsidiary is in default or
has received any written notice of default under or with respect to any of its
Contractual Obligations in any respect which is reasonably likely to result in a
Material Adverse Effect. No Unmatured Event or Event of Default has occurred and
is continuing.
4.16 Intellectual Property. Set forth on Schedule 4.16 is a complete and
accurate list of all patents, trademarks, trade names, service marks and
copyrights, and all applications therefor and licenses thereof, of the Company
and each of its Subsidiaries showing as of the Effective Date the jurisdiction
in which registered, the registration number and the date of registration. The
Company and each of its Subsidiaries owns, or is licensed to use, all
trademarks, tradenames, service marks, copyrights, technology, know-how and
processes necessary for the conduct of its business as currently conducted (the
"Intellectual Property") except for those the failure to own or license which
could not reasonably be expected to have a Material Adverse Effect. No claim has
been asserted and is pending by any Person challenging or questioning the use of
any such Intellectual Property or the validity or effectiveness of any such
Intellectual Property, nor does the Company or any of its Subsidiaries know of
any valid basis for any such claim, the use of such Intellectual Property by the
Company and each of its Subsidiaries does not infringe on the rights of any
Person, and, to the knowledge of the Company, no Intellectual Property has been
infringed, misappropriated or diluted by any other Person except for such
claims, infringements, misappropriation and dilutions that, in the aggregate,
could not have a Material Adverse Effect.
4.17 No Burdensome Restrictions. No Requirement of Law or Contractual
Obligation applicable to the Company or any Subsidiary could have a
Material Adverse Effect.
4.18 Labor Matters. There are no strikes or other labor disputes against
the Company or any Subsidiary pending or, to the knowledge of the Company,
threatened that (individually or in the aggregate) could
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have a Material Adverse Effect. Hours worked by and payment made to employees of
the Company and its Subsidiaries have not been in violation of the Fair Labor
Standards Act, if applicable, or any other applicable Requirement of Law dealing
with such matters that (individually or in the aggregate) could have a Material
Adverse Effect. All payments due from the Company and each of its Subsidiaries
on account of employee health and welfare insurance that (individually or in the
aggregate) could have a Material Adverse Effect if not paid have been paid or
accrued as a liability on the books of the Company and its Subsidiaries.
4.19 Solvency. (a) After giving effect to the transactions described
herein and to the incurrence or assumption of all Indebtedness (including
without limitation the Subordinated Debt, all Advances and all other obligations
being incurred or assumed in connection herewith and therewith) (i) the fair
value of the assets of the Company and its Subsidiaries on a consolidated basis,
at a fair valuation, will exceed the debts and liabilities, subordinated,
contingent or otherwise, of the Company and its Subsidiaries on a consolidated
basis; (ii) the present fair saleable value of the property of the Company and
its Subsidiaries on a consolidated basis will be greater than the amount that
will be required to pay the probable liability of the Company and its
Subsidiaries on a consolidated basis on their debts and other liabilities,
subordinated, contingent or otherwise, as such debts and other liabilities
become absolute and matured; (iii) the Company and its Subsidiaries on a
consolidated basis will be able to pay their debts and liabilities,
subordinated, contingent or otherwise, as such debts and liabilities become
absolute and matured; and (iv) the Company and its Subsidiaries on a
consolidated basis will not have unreasonably small capital with which to
conduct the businesses in which they are engaged as such businesses are now
conducted and are proposed to be conducted after the date hereof.
(b) The Company does not intend to, or to permit any of its
Subsidiaries to, and does not believe that it or any of its Subsidiaries will,
incur debts beyond its ability to pay such debts as they mature, taking into
account the timing of and amounts of cash to be received by it or any such
Subsidiary and the timing of the amounts of cash to be payable on or in respect
of its Indebtedness or the Indebtedness of any such Subsidiary.
4.20 Not an Investment Company; Other Regulations. Neither the Company
nor any of its Subsidiaries is an "investment company" within the meaning of the
Investment Company Act of 1940, as amended. Neither the Company nor any of its
Subsidiaries is subject to any regulation under any federal or state statute or
regulation which limits its ability to incur Indebtedness.
4.21 14% Senior Debt Documents. As of the Effective Date, the aggregate
outstanding principal balance of the 14% Senior Notes is equal to $24,865,000
and all 14% Senior Debt Documents are described on Schedule 1.1-A hereto. There
is no event of default or event or condition which could become an event of
default with notice or lapse of time or both under the 14% Senior Debt
Documents. The Third Amendment to Indenture dated as of November 17, 1992
between the Company and Mellon Bank, F.S.B. as trustee, relating to the 14%
Senior Note Indenture is in full force and effect and is valid and binding on
the Company and each holder of the 14% Senior Notes.
4.22 Senior Subordinated Debt Documents. All representations and
warranties of the Company contained in any Senior Subordinated Debt Document are
true and correct in all material respects. The Company will be receiving net
proceeds in the approximate amount of $121,000,000 on the Effective Date from
its issuance of the Senior Subordinated Notes, and all agreements, instruments
and documents executed or delivered pursuant to the issuance of the Senior
Subordinated Notes are described on Schedule 1.1 hereto. All Lender Indebtedness
is "Senior Debt " and "Designated Senior Debt" as defined in the Senior
Subordinated Debt Documents, this Agreement and the other Loan Documents are the
"Senior Credit Facility" as defined in the Senior Subordinated Debt Documents
and, other than the Lender Indebtedness, there is no other "Designated Senior
Debt" thereunder. There is no Event of Default or event or condition which could
become an Event of
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Default with notice or lapse of time or both, under the Senior Subordinated Debt
Documents and each of the Senior Subordinated Debt Documents is in full force
and effect. Other than pursuant to the Senior Subordinated Notes, there is no
obligation pursuant to any Senior Subordinated Debt Document or other document
or agreement evidencing or relating to any Subordinated Debt outstanding or to
be outstanding on the Effective Date which obligates the Company to pay any
principal or interest or redeem any of its Capital Stock or incur any other
monetary obligation.
ARTICLE V
COVENANTS
5.1 Affirmative Covenants. The Company covenants and agrees that, until
the later of the Maturity Date or the Termination Date and thereafter until
payment in full of the principal of and accrued interest on the Notes and the
performance of all other obligations of the Company under this Agreement, unless
the requisite Lenders pursuant to Section 8.1 shall otherwise consent in
writing, it shall, and, shall cause each of its Subsidiaries to:
(a) Preservation of Corporate Existence, Etc. Do or cause to be done
all things necessary to preserve, renew and keep in full force and effect its
legal existence and its qualification as a foreign corporation or limited
liability company, as the case may be (other than any merger permitted pursuant
to Section 5.2(g) and other than any dissolution or liquidations of any
Subsidiary if the assets of such Subsidiary are transferred to the Company or
any Guarantor in connection with such dissolution or liquidation), in good
standing in each jurisdiction in which such qualification is necessary under
applicable law and the rights, licenses, permits (including those required under
Environmental Laws), franchises, patents, copyrights, trademarks and trade names
material to the conduct of its businesses; provided, however, that the Company
shall not be required to preserve any such right, license or franchise, or the
corporate, partnership or other existence of any of its Subsidiaries, if the
Board of Directors shall determine that the preservation thereof is no longer
desirable in the conduct of the business of the Company and its Subsidiaries,
taken as a whole, and that the loss thereof is not adverse in any material
respect to the Agent or the Lenders; and defend all of the foregoing against all
claims, actions, demands, suits or proceedings at law or in equity or by or
before any governmental instrumentality or other agency or regulatory authority.
(b) Compliance with Laws, Etc. Comply in all material respects with
all applicable laws, rules, regulations and orders of any governmental authority
whether federal, state, local or foreign (including without limitation ERISA,
the Code and Environmental Laws), in effect from time to time, the enforcement
of which could have a Material Adverse Effect; and pay and discharge, before any
interest or penalty for nonpayment thereof becomes payable, all taxes,
assessments and governmental charges or levies imposed upon it or upon its
income, revenues or property, before the same shall become delinquent or in
default, as well as all lawful claims for labor, materials and supplies or
otherwise, which, if unpaid, might give rise to Liens (other than Permitted
Liens) upon such properties or any portion thereof, except to the extent that
payment of any of the foregoing is then being contested in good faith by
appropriate legal proceedings and with respect to which adequate financial
reserves have been established on the books and records of the Company or such
Subsidiary.
(c) Maintenance of Properties; Insurance. Maintain, preserve and
protect all property that is material to the conduct of the business of the
Company or any of its Subsidiaries and keep such property in good repair,
working order and condition and from time to time make, or cause to be made all
needful and proper repairs, renewals, additions, improvements and replacements
thereto necessary in order that the business carried on in connection therewith
may be properly conducted at all times in accordance with customary and prudent
business practices for similar businesses; and maintain in full force and effect
insurance with responsible and
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reputable insurance companies or associations in such amounts, on such terms and
covering such risks, including fire and other risks insured against by extended
coverage, as is usually carried by companies engaged in similar businesses and
owning similar properties similarly situated and maintain in full force and
effect public liability insurance, insurance against claims for personal injury
or death or property damage occurring in connection with any of its activities
or any of any properties owned, occupied or controlled by it, in such amount as
it shall reasonably deem necessary, and maintain such other insurance as may be
required by law or as may be reasonably requested by the Required Lenders for
purposes of assuring compliance with this Section 5.1(c).
(d) Reporting Requirements. Furnish to the Lenders and the Agent the
following:
(i) Promptly and in any event within five Business Days after
becoming aware of the occurrence of (A) any Unmatured Event or Event of Default,
(B) the commencement of any litigation against, by or affecting the Company or
any of its Subsidiaries, which could have a Material Adverse Effect, and any
material developments therein, or (C) entering into any material contract or
undertaking that is not entered into in the ordinary course of business or (D)
any development in the business or affairs of the Company or any of its
Subsidiaries which has resulted in or which is likely in the reasonable judgment
of the Company, to result in a Material Adverse Effect, a statement of the chief
financial officer of the Company setting forth details of such Unmatured Event
or Event of Default and the action which the Company or such Subsidiary, as the
case may be, has taken and proposes to take with respect thereto;
(ii) As soon as available and in any event within 60 days after
the end of each fiscal quarter of the Company, the consolidated and
consolidating balance sheet of the Company and its Subsidiaries and of its
Unrestricted Subsidiaries as of the end of such quarter, and the related
consolidated and consolidating statements of income cash flows for such quarter
and for the period commencing at the end of the previous fiscal year and ending
with the end of such quarter, setting forth in each case in comparative form the
corresponding figures for the corresponding date or period of the preceding
fiscal year and the variances, if any, from the budget and forecast delivered
pursuant to Section 5.1(d)(ix), all in reasonable detail and duly certified
(subject to year-end audit adjustments) by the chief financial officer of the
Company as having been prepared in accordance with Generally Accepted Accounting
Principles, together with a certificate of the chief financial officer of the
Company stating (A) that no Unmatured Event or Event of Default, has occurred
and is continuing or, if an Unmatured Event or Event of Default has occurred and
is continuing, a statement setting forth the details thereof and the action
which the Company has taken and proposes to take with respect thereto, and (B)
that a computation (which computation shall accompany such certificate and shall
be in detail satisfactory to the Agent) showing compliance with Section 5.2 (a),
(b), (c) and (d) hereof is in conformity with the terms of this Agreement;
(iii) As soon as available and in any event within 90 days after
the end of each fiscal year of the Company, a copy of the consolidated balance
sheet of the Company and its Subsidiaries as of the end of such fiscal year and
the related consolidated statements of income and cash flows for such fiscal
year, with a customary audit report of Coopers & Xxxxxxx L.L.P., or any of the
six largest independent certified public accounting firms in the United States,
without qualifications unacceptable to the Agent, together with, a certificate
of the chief financial officer of the Company stating (A) that no Unmatured
Event or Event of Default has occurred and is continuing, a statement setting
forth the details thereof and the action which the Company has taken and
proposes to take with respect thereto, and (B) that a computation (which
computation shall accompany such certificate and shall be in reasonable detail)
showing compliance with Section 5.2 (a), (b) (c) and (d) hereof is in conformity
with the terms of this Agreement;
(iv) Promptly after the sending or filing thereof, copies of
all reports, proxy statements and financial statements which the Company or any
of its Subsidiaries sends to or files with any of
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their respective security holders or any securities exchange or the Securities
and Exchange Commission or any successor agency thereof;
(v) Within 20 days after the end of each month, a Borrowing
Base Certificate prepared as of the close of business on the last day of each
month, certified as true and correct by the chief financial officer of the
Company, together with such supporting schedules and information as requested by
the Agent;
(vi) As soon as available and in any event within 20 days
after the end of each month, a report containing an aging as of the end of the
preceding month of accounts receivable and accounts payable of the Company, in a
form satisfactory to the Agent, if requested by the Agent;
(vii) As soon as available and in any event within 20 days
after the end of each month, a report identifying the inventory of the Company
and the Guarantors, and cost and location thereof as of the end of the preceding
month, in a form satisfactory to the Agent, if requested by the Agent;
(viii) Promptly and in any event within 10 Business Days after
receipt, a copy of any management letter or comparable analysis prepared by the
auditors for the Company or any of its Subsidiaries;
(ix) Within 90 days before the end of each fiscal year of the
Company, a budget and forecast prepared by the Company for the following fiscal
year;
(x) Within 60 calendar days after the end of each fiscal year
of the Company, a duly executed Environmental Certificate; and
(xi) Promptly, such other information respecting the business,
properties, operations or condition, financial or otherwise, of the Company or
any of their respective Subsidiaries as any Lender or the Agent may from time to
time reasonably request.
(e) Accounting, Access to Records, Books, Etc. Maintain a system of
accounting established and administered in accordance with sound business
practices to permit preparation of financial statements in accordance with
Generally Accepted Accounting Principles and to comply with the requirements of
this Agreement and, at any reasonable time and from time to time, (i) permit any
Lender or the Agent, or any agents or representatives thereof, to examine and
make copies of and abstracts from the records and books of account of, and visit
the properties of, the Company and its Subsidiaries, and to discuss the affairs,
finances and accounts of the Company and its Subsidiaries with their respective
directors, officers, employees and independent auditors, and by this provision
the Company does hereby authorize such Persons to discuss such affairs, finances
and accounts with any Lender or the Agent, (ii) at the expense of the Company,
permit the Agent or any of its agents or representatives to conduct a
comprehensive field audit of its books, records, properties and assets,
including without limitation all collateral subject to the Security Documents
and site access, at the Company's expense, and (iii) at the expense of the
Company after and during the continuance of an Event of Default, permit the
Agent or any of its agents to conduct real estate appraisals, provided that the
Agent shall give the Company reasonable notice of any of the foregoing.
(f) Additional Security and Collateral. Promptly (i) execute and
deliver and cause each Guarantor to execute and deliver, additional Security
Documents, within 30 days after request therefor by the Agent, sufficient to
grant to the Agent for the benefit of the Lenders and the Agent liens and
security interests in any after acquired property, and (ii) cause each Person
becoming a Domestic Subsidiary of the Company or any Guarantor from time to time
to execute and deliver to the Lenders and the Agent, within 30 days after such
Person becomes a Domestic Subsidiary, a Guaranty and a Security Agreement,
together with other related
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documents described in Section 2.5 sufficient to grant to the Agent for the
benefit of the Lenders and the Agent liens and security interests in all
collateral of the type described in Section 2.11. The Company shall notify the
Lenders and the Agent, within 10 days after the occurrence thereof, of the
acquisition of any property by the Company or any Guarantor that is not subject
to the existing Security Documents, any Person becoming a Domestic Subsidiary
and any other event or condition, other than the passage of time, that may
require additional action of any nature in order to preserve the effectiveness
and perfected status of the liens and security interests of the Lenders and the
Agent with respect to such property pursuant to the Security Documents,
including without limitation delivering the originals of all promissory notes
and other instruments payable to the Company or any Domestic Subsidiary to the
Agent and delivering the originals of all stock certificates or other
certificates evidencing any Capital Stock owned by the Company or any Domestic
Subsidiary at any time. Upon the occurrence and during the continuance of an
Event of Default, the Company shall, upon request of the Required Lenders, (i)
promptly cause each Foreign Subsidiary to execute and deliver to the Lenders and
the Agent a Guaranty and Security Agreement, together with other related
documents described in Section 2.5 sufficient to grant to the Agent for the
benefit of the Lenders and the Agent liens and security interests, to the extent
available under applicable law, in all collateral of the type described in
Section 2.10 and (ii) deliver to the Agent for the benefit of the Lenders and
the Agent 100% of the Capital Stock of each Foreign Subsidiary owned by the
Company or any of its Subsidiaries.
(g) Further Assurances. Execute and deliver within 30 days after
request therefor by the Agent, all further instruments and documents and take
all further action that the Agent may reasonably request, in order to give
effect to the intent of, and to aid in the exercise and enforcement of the
rights and remedies of the Lenders under, this Agreement, the Notes and the
Security Documents, including without limitation causing each lessor of real
property to the Company, any Guarantor or any of their respective Subsidiaries
to execute and deliver to the Agent, prior to or upon the commencement of any
tenancy, an agreement in form and substance acceptable to the Agent duly
executed on behalf of such lessor waiving any distraint, liens and similar
rights with respect to any property subject to the Security Documents and
agreeing to permit the Lenders and the Agent to enter such premises in
connection therewith. In addition, the Company and each Guarantor agrees to
deliver to the Agent from time to time upon the acquisition or creation of any
subsidiary not listed in Schedule 4.4 hereto supplements to Schedule 4.4 such
that such Schedule, together with such supplements, shall at all times
accurately reflect the information provided for thereon.
5.2 Negative Covenants. Until the later of the Maturity Date or the
Termination Date and thereafter until payment in full of the principal of and
accrued interest on the Notes and the performance of all other obligations of
the Company under this Agreement, the Company agrees that, unless the requisite
Lenders pursuant to Section 8.1 shall otherwise consent in writing, it shall
not, and shall not permit any of its Subsidiaries, to:
(a) Net Worth. Permit or suffer the Consolidated Net Worth of the
Company and its Subsidiaries at any time to be less than the sum of negative
$21,750,000 plus 50% of the net income (net of any Permitted Sub S Dividends) of
the Company and its Subsidiaries, added as of the end of each fiscal year of the
Company, commencing with the fiscal year ending December 31, 1997, provided that
if such net income is negative in any fiscal year the amount added for such
fiscal year shall be zero and shall not reduce the amount added for any other
fiscal year.
(b) Total Debt to EBITDA Ratio. Permit or suffer the Total Debt to
EBITDA Ratio to be greater than (i) 5.5 to 1.0 at any time from and including
April 1, 1997 to and including Xxxxx 00, 0000, (xx) 5.0 to 1.0 at any time from
and including April 1, 1998 to and including June 30, 1999 or (iii) 4.5 to 1.0
at any time thereafter.
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(c) Interest Coverage Ratio. Permit or suffer the Interest Coverage
Ratio to be less than (i) 2.0 to 1.0 as of the end of any fiscal quarter of the
Company ending on or before June 30, 1999, or (ii) 2.25 to 1.0 as of the end of
any fiscal quarter of the Company ending thereafter.
(d) Fixed Charge Coverage Ratio. Permit or suffer the Fixed Charge
Coverage Ratio to be less than (i) 1.05 to 1.0 as of the end of any fiscal
quarter of the Company ending on or before June 30, 1999, or (ii) 1.15 to 1.0 as
of the end of any fiscal quarter of the Company thereafter.
(e) Indebtedness. Create, incur, assume or in any manner become
liable in respect of, or suffer to exist, or permit or suffer any Subsidiary to
create, incur, assume or in any manner become liable in respect of, or suffer to
exist, any Indebtedness other than:
(i) The Lender Indebtedness;
(ii) The Indebtedness described in Schedule 5.2(e) hereto and
refinancings thereof, but no increase in the amount thereof (as such amount is
reduced from time to time) and no modifications of the terms thereof which is
less favorable to the Company or more restrictive on the Company in any material
manner shall be permitted;
(iii) Indebtedness of any Subsidiary of the Company owing to
the Company or to any other Subsidiary of the Company;
(iv) Subordinated Debt, including the related subordinated
guarantees, pursuant to the Senior Subordinated Debt Documents, provided that
the aggregate principal amount of such Subordinated Debt shall not exceed
$125,000,000;
(v) Indebtedness of Key U.K. under the Key U.K. Facility in
aggregate amount not to exceed 7,500,000 Pounds and refinancings thereof, but no
increase in the amount thereof;
(vi) Indebtedness pursuant to the 14% Senior Notes in an
aggregate amount not to exceed a principal amount equal to $24,865,000, as
reduced from time to time;
(vii) Indebtedness of any Foreign Subsidiary in an aggregate
amount not to exceed $2,500,000 at any time outstanding;
(viii) Subordinated Debt owing to shareholders of the Company;
(ix) Trade accounts payable and accrued expenses arising in
the ordinary course which are past due in an amount which is not material in the
aggregate for the Company and its Subsidiaries on a consolidated basis or which
are being contested in good faith by appropriate proceedings and for which
adequate reserves are maintained on the books of the Company; and
(x) Indebtedness other than (i) through (ix) above not
exceeding $15,000,000 in aggregate amount at any time outstanding.
(f) Liens. Create, incur or suffer to exist any Lien on any of the
assets, rights, revenues or property, real, personal or mixed, tangible or
intangible, whether now owned or hereafter acquired, of the Company or any of
its Subsidiaries, other than:
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51
(i) Liens for taxes not delinquent or for taxes
being contested in good faith by appropriate proceedings and as to which
adequate financial reserves have been established on its books and records;
(ii) Liens (other than any Lien imposed by ERISA)
created and maintained in the ordinary course of business which are not material
in the aggregate, and which would not have a Material Adverse Effect and which
constitute (A) pledges or deposits under worker's compensation laws,
unemployment insurance laws or similar legislation, (B) good faith deposits in
connection with bids, tenders, contracts or leases to which the Company or any
of its Subsidiaries is a party for a purpose other than borrowing money or
obtaining credit, including rent security deposits, (C) liens imposed by law,
such as those of carriers, warehousemen and mechanics, if payment of the
obligation secured thereby is not yet due or which are being contested in good
faith by appropriate legal proceedings and with respect to which adequate
financial reserves have been established on the books and records of Company or
such Subsidiary, (D) liens securing taxes, assessments or other governmental
charges or levies not yet subject to penalties for nonpayment, and (E) pledges
or deposits to secure public or statutory obligations of the Company or any of
its Subsidiaries, or surety, customs or appeal bonds to which the Company or any
of its Subsidiaries is a party;
(iii) Liens affecting real property which
constitute minor survey exceptions or defects or irregularities in title, minor
encumbrances, easements or reservations of, or rights of others for, rights of
way, sewers, electric lines, telegraph and telephone lines and other similar
purposes, or zoning or other restrictions as to the use of such real property,
provided that all of the foregoing, in the aggregate, do not at any time
materially detract from the value of said properties or materially impair their
use in the operation of the businesses of the Company or any of its
Subsidiaries;
(iv) Liens created pursuant to the Security
Documents and Liens expressly permitted by the Security Documents;
(v) Each Lien described in Schedule 5.2(f)
hereto may be suffered to exist, provided that there may be no increase in the
amount of indebtedness, obligations or liabilities secured thereby and it may
not secure any other indebtedness, obligations and liabilities other than those
now secured;
(vi) Any Lien created to secure payment of a
portion of the purchase price of, or existing at the time of acquisition of, any
tangible fixed asset acquired by the Company or any of its Subsidiaries may be
created or suffered to exist upon such fixed asset if the outstanding principal
amount of the Indebtedness secured by such Lien does not at any time exceed the
purchase price paid by the Company or such Subsidiary for such fixed asset,
provided that such Lien does not encumber any other asset at any time owned by
the Company or such Subsidiary, and provided, further, that not more than one
such Lien shall encumber such fixed asset at any one time;
(vii) Any Lien on the assets of Key U.K. in favor
of NBD to secure the Indebtedness permitted under Section 5.2(e)(v) which is
owing to NBD;
(viii) Any Lien on any assets of any Subsidiaries
of the Company in favor of the Company securing permitted Indebtedness of such
Subsidiary owing to the Company, provided that such Lien is subordinated to the
Liens of the Agent by written agreements satisfactory to the Agent; and
(ix) The interest or title of a lessor under any
lease otherwise permitted under this Agreement with respect to the property
subject to such lease to the extent performance of the obligations of the
Company or its Subsidiary thereunder is not delinquent in any material respect.
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(g) Merger; Acquisitions; Etc. Purchase or otherwise
acquire, or permit or suffer any Subsidiary to purchase or otherwise acquire,
whether in one or a series of transactions and whether pursuant to the Initial
Acquisitions or any other acquisition or transaction, all or a substantial
portion of the business assets, rights, revenues or property, real, personal or
mixed, tangible or intangible, of any Person, or all or a substantial portion of
the Capital Stock of or other ownership interest in any other Person; nor merge
or consolidate or amalgamate with any other Person or take any other action
having a similar effect, nor enter into any joint venture or similar arrangement
with any other Person, provided, however, that this Section 5.2(g) shall not
prohibit (i) any merger of any Subsidiary with or into another Subsidiary or any
merger of any Subsidiary into the Company, provided that (A) there is no
Unmatured Event or Event of Default either before or after such merger, (B) if
any such merger involves the Company, the Company shall be the surviving
corporation and (C) any such merger involves the Company or any Guarantor, the
Consolidated Net Worth of the Company or such Guarantor involved in such merger
immediately after the merger would be equal to or greater than its Consolidated
Net Worth immediately preceding such merger, or (ii) any other acquisition if
(A) immediately before and after (on a pro forma basis acceptable to the Agent
and supported by such certificates and opinions required by the Agent) such
acquisition: (w) no Unmatured Event or Event of Default shall exist or shall
have occurred and be continuing, (x) the representations and warranties
contained in the Loan Documents shall be true and correct as if made on the date
such acquisition is consummated, (y) the Company is able to borrow at least
$10,000,000 in Revolving Credit Loans after giving effect to such acquisition
and (z) with respect to any acquisition subsequent to the Initial Acquisitions,
the Total Debt to EBITDA Ratio is at least 0.5 below the level required under
this Agreement, (B) prior to the consummation of such acquisition, the Company
shall have provided to the Lenders a certificate of the chief financial officer
of the Company (attaching pro forma financial statements and computations to
demonstrate compliance and projected compliance with all covenants and
conditions hereunder), stating that such acquisition complies with this Section
5.2(g), customary legal opinions reasonably acceptable to the Agent if requested
by the Agent, evidence that the Acquisition is in compliance with all laws and
regulations and that any other conditions under this Agreement relating to such
transaction have been satisfied, all in form and substance satisfactory to the
Agent, (C) the target of such acquisition is in the same line of business as the
Company and (D) prior to the consummation of such acquisition, the Lenders shall
have completed such due diligence and reviewed such agreements and documents
with respect to such acquisition as required by the Agent, and the Agent shall
be satisfied with such due diligence and such review.
(h) Disposition of Assets; Etc. Sell, lease, license,
transfer, assign or otherwise dispose of all or any portion of its business,
assets, rights, revenues or property, real, personal or mixed, tangible or
intangible, whether in one or a series of transactions, other than inventory
sold in the ordinary course of business upon customary credit terms and sales of
scrap or obsolete material or equipment which are not material in the aggregate,
and shall not permit or suffer any Subsidiary to do any of the foregoing;
provided, however, that this Section 5.2(h) shall not prohibit any such sale,
lease, license, transfer, assignment or other disposition if (i) the aggregate
book value (disregarding any write-downs of such book value other than ordinary
depreciation and amortization) of all of the business, assets, rights, revenues
and property disposed of after the Effective Date of this Agreement shall be
less than $1,000,000 in the aggregate and if, immediately after such
transaction, no Unmatured Event or Event of Default shall exist or shall have
occurred and be continuing, (ii) sales as to which proceeds are used within 180
days to purchase or construct assets of at least equivalent value to those sold,
(iii) sales as to which proceeds are used to make optional prepayments on the
Term Loan and the Revolving Credit Advances, provided that such prepayments on
the Revolving Credit Advances also permanently reduce the Revolving Credit
Commitments and the Borrowing Base by the amount of such payments, (iv)
transfers of assets, including without limitation Capital Stock, between
Guarantors or between the Company and Guarantors, or (v) investments which
consist of transfers of assets instead of cash and which are permitted by
Section 5.2(k) or (vi) such transfer of assets as pursuant to a dividend or
redemption permitted by Section 5.2(j) or an investment, loan or advance
permitted pursuant to Section 5.2(k); provided, however, in the case of any of
the foregoing permitted sales, leases, licenses, transfers, assignments or other
dispositions (an "Asset Sale") the
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Company shall not, and shall not permit any of its Subsidiaries to, consummate
an Asset Sale unless (A) the Company (or the Subsidiary, as the case may be)
receives consideration at the time of such Asset Sale at least equal to the fair
market value (evidenced by a resolution of the Board of Directors set forth in
an officer's certificate delivered to the Agent) of the assets and (B) at least
80% of the consideration therefor received by the Company or such Subsidiary is
in the form of cash; provided that the amount of (x) any liabilities (as shown
on the Company's or such Subsidiary's' most recent balance sheet), of the
Company or any Subsidiary that are assumed by the transferee of any such assets
such that the Company or such Subsidiary have no further liability and (y) any
securities, notes or other obligations received by the Company or any such
Subsidiary from such transferee that are converted by the Company or such
Subsidiary into cash (to the extent of the cash received), shall be deemed to be
cash for purposes of this provision and the definition of Net Cash Proceeds, and
the Agent promptly shall obtain a first priority security interest in any non
cash consideration for any Asset Sale.
(i) Nature of Business. Make or suffer any substantial
change in the nature of its business from that engaged in on the Effective Date
or engage in any other businesses other than those in which it is engaged on the
Effective Date.
(j) Dividends and Other Restricted Payments. Make, pay,
declare or authorize any dividend, payment or other distribution in respect of
any class of its Capital Stock or any dividend, payment or distribution in
connection with the redemption, purchase, retirement or other acquisition,
directly or indirectly, of any shares of its Capital Stock other than such
dividends, payments or other distributions (i) to the extent payable solely in
shares of Capital Stock (other than Disqualified Stock) of the Company, (ii) the
repurchase, redemption or other acquisition or retirement for value of any
Capital Stock of the Company held by any employee of the Company upon
termination of employment of such employee, provided that the aggregate price
paid for such repurchased, redeemed, acquired or retired Capital Stock shall not
exceed $1,000,000 in any consecutive twelve month period, no Event of Default or
Unmatured Event shall have occurred and be continuing immediately after such
transaction and the price paid for such Capital Stock shall be made in
accordance with the existing agreements relating thereto, and (iii) the
following described dividends: For so long as the Company is an S-Corporation or
substantially similar pass-through entity for Federal income tax purposes, the
Company may make cash distributions to its shareholders, during each Quarterly
Payment Period, in an aggregate amount not to exceed the Permitted Quarterly Tax
Distribution in respect of the related Estimation Period. If any portion of a
Permitted Quarterly Tax Distribution is not distributed during such Quarterly
Payment Period, the Permitted Quarterly Tax Distribution payable during the
immediately following Quarterly Payment Period shall be increased by such
undistributed portion. Within 10 days following the Company's filing of Internal
Revenue Service Form 1120S for the immediately preceding taxable year, the Tax
Amounts CPA shall file with the Agent a written statement indicating in
reasonable detail the calculation of the True-Up Amount. In the case of a
True-up Amount due to the stockholders, the Permitted Quarterly Tax Distribution
payable during the immediately following Quarterly Payment Period shall be
increased by such True-up Amount. In the case of a True-up Amount due to the
Company, the Permitted Quarterly Tax Distribution payable during the immediately
following Quarterly Payment Period shall be reduced by such True-up Amount and
the excess, if any, of the True-up Amount over such Permitted Quarterly Tax
Distribution shall be applied to reduce the immediately following Permitted
Quarterly Tax Distributions until such True-up Amount is entirely offset. The
Company will not issue any preferred stock or Disqualified Stock. The Company
shall not, and shall not permit any of its Subsidiaries to, directly or
indirectly, make any payment or other transfer of any kind in respect of any
Non-Competition Agreement if any Default or Event of Default shall have occurred
and be continuing or would occur as a consequence thereof and will not amend or
modify, or make any optional payment on, any Non-Competition Agreement.
(k) Investments, Loans and Advances. Purchase or
otherwise acquire any Capital Stock of or other ownership interest in, or debt
securities of or other evidences of Indebtedness of, any other Person; nor
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54
make any loan or advance of any of its funds or property or make any other
extension of credit to, or make any other investment or contribution or acquire
any interest whatsoever in, any other Person; nor incur any Contingent Liability
except to the extent permitted under Section 5.2(e) and other Contingent
Liabilities in aggregate amount not to exceed $250,000; nor permit any
Subsidiary to do any of the foregoing; other than (i) extensions of trade credit
made in the ordinary course of business on customary credit terms and
commission, travel and similar advances made to officers and employees in the
ordinary course of business, (ii) Cash Equivalents, (iii) acquisitions permitted
pursuant to Section 5.2(g), (iv) investments, loans and advances in and to any
Guarantor, or any person becoming a Guarantor as a result thereof, (v) the
purchase of the remaining outstanding Capital Stock in MaP not owned by the
Company pursuant to the Purchase and Sale of Shares Promissory Agreement,
without giving effect to any amendment or modification thereof not approved by
the Agent, (vi) investments, loans and advances after the Effective Date of this
Agreement in Unrestricted Subsidiaries or Foreign Subsidiaries in aggregate
amount not exceeding $12,500,000, provided, however, that (A) such investments,
loans and advances under Section 5.2(k)(v) or (vi) shall not be permitted unless
immediately before and after (on a pro forma basis acceptable to the Agent and
supported by such certificates and opinions as requested by the Agent) such
investment, loan or advance: (w) the terms and conditions thereof shall be
satisfactory to the Agent, (x) no Unmatured Event or Event of Default shall
exist or shall have occurred and be continuing, (y) the representations and
warranties contained in the Loan Documents shall be true and correct on and as
of the date such investment, loan or advance is made as if made on the date
thereof and giving effect thereto and (z) the Company is able to borrow at least
$10,000,000 in Revolving Credit Loans after giving effect to such investment,
loan or advance and (B) it is acknowledged and agreed that the deferral of
existing royalty and management fees owing by any Unrestricted Subsidiary to the
Company consistent with the past practice of the Company and the sale of product
by the Company to Unrestricted Subsidiaries on customary trade terms on an arms
length basis shall not be considered investments, loans and advances to such
Unrestricted Subsidiary and shall not be prohibited by this Section 5.2(k),
provided that any such amounts are not included as revenues of the Company and
its Subsidiaries during such deferral, (vii) extensions of credit to employees
and officers of the Company and its Subsidiaries in the ordinary course of
business for the purpose of purchasing Capital Stock of the Company not in
excess of $1,000,000 in aggregate amount at any one time outstanding for all
employees and officers, (viii) the Key U.K. Letter of Credit, and (ix) those
investments, loans, advances and other transactions described in Schedule 5.2(k)
hereto, having the same terms as existing on the date of this Agreement, but no
extension or renewal thereof shall be permitted.
(l) Transactions with Affiliates. Make any payment to, or
sell, lease, transfer or otherwise dispose of any of its properties or assets
to, or purchase any property or assets from, or enter into or make or amend any
transaction, contract, agreement, understanding, loan, advance or guarantee
with, or for the benefit of, any Affiliates (each of the foregoing, an
"Affiliate Transaction") unless (i) such Affiliate Transaction is on terms that
are no less favorable to the Company or the relevant Subsidiary than those that
would have been obtained in a comparable transaction by the Company or such
Subsidiary with an unrelated Person and (ii) the Company delivers to the Agent
(x) with respect to any Affiliate Transaction or series of related Affiliate
Transactions involving aggregate consideration in excess of $1,000,000, a
resolution of the Board of Directors set forth in an officers' certificate
certifying that such Affiliate Transaction complies with clause (i) above and
that such Affiliate Transaction has been approved by a majority of the
disinterested members of the Board of Directors and (y) with respect to any
Affiliate Transaction or series of related Affiliate Transactions involving
aggregate consideration in excess of $5,000,000, an opinion as to the fairness
to the Lenders of such Affiliate Transaction from a financial point of view
issued by an accounting, appraisal or investment banking firm of national
standing, provided that (A) (1) any employment or consulting agreement or
arrangement entered into by the Company or any of its Subsidiaries in the
ordinary course of business and consistent with the past practice of the Company
or such Subsidiary, (2) transactions between or among the Company and/or the
Guarantors and (3) Permitted Quarterly Tax Distributions and other dividends and
redemptions pursuant to Section 5.2(j) shall not be deemed Affiliate
Transactions and (B) any loan, advance or investment permitted by Section 5.2
(k) shall not be subject to clause (y) above.
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(m) Inconsistent Agreements. Enter into any agreement or
permit or suffer any Subsidiary to enter into any agreement containing any
provision which would be violated or breached by this Agreement or any of the
transactions contemplated hereby or by performance by the Company or any of its
Subsidiaries of its obligations in connection therewith.
(n) Negative Pledge Limitation. Enter into any agreement
(other than the Senior Subordinated Note Indenture), including without
limitation any amendments to existing agreements, with any Person other than the
Lenders pursuant hereto which prohibits or limits the ability of the Company or
any Subsidiary to create, incur, assume or suffer to exist any Lien upon any of
its assets, rights, revenues or property, real, personal or mixed, tangible or
intangible, whether now owned or hereafter acquired.
(o) Subsidiary Dividends. The Company covenants that it
will not permit any of its Subsidiaries directly or indirectly to create or
otherwise cause or suffer to exist or become effective any consensual
encumbrance or restriction which by its terms materially restricts the ability
of any such Subsidiary to (i) pay dividends or make any other distributions on
such Subsidiary's capital stock, (ii) pay any Indebtedness owed to the Company
or any of its other Subsidiaries, (iii) make any loans or advances to the
Company or any of such other Subsidiaries or (iv) transfer any material portion
of its assets to the Company or any of such other Subsidiaries, except for such
encumbrances or restrictions required by applicable law or by NBD pursuant to
the Key U. K. Credit Facility.
(p) Payments and Modification of Debt. Make, or permit
any Subsidiary to make, any optional payment, defeasance (whether a covenant
defeasance, legal defeasance or other defeasance), prepayment or redemption of
any of its or any of its Subsidiaries' Subordinated Debt or other Indebtedness
or amend or modify, or consent or agree to any amendment or modification of, any
instrument or agreement under which any of its Subordinated Debt is issued or
created or otherwise related thereto, or enter into any agreement or arrangement
providing for any defeasance of any kind of any of its Subordinated Debt, or
designate any Indebtedness (other than the Lender Indebtedness) as "Designated
Senior Debt" under the Senior Subordinated Debt Documents, provided that the
Company may prepay the 14% Senior Notes if no Unmatured Event or Event of
Default exists or would be caused thereby and if the conditions to receiving a
Revolving Credit Loan are satisfied. Nothing in this Section 5.2(p) shall
prohibit the Company from making any mandatory payment under Sections 4.12, 4.13
or 4.16 of the 14% Senior Note Indenture.
(q) EBITDA. Permit or suffer the EBITDA for the fiscal
quarter ending March 31, 1997 to be less than $7,000,000.
5.3 Additional Covenants. If at any time the Company shall enter
into or be a party to any instrument or agreement with respect to any
Indebtedness which in the aggregate, together with any related Indebtedness,
exceeds $250,000, including all such instruments or agreements in existence as
of the date hereof and all such instruments or agreements entered into after the
date hereof, relating to or amending any terms or conditions applicable to any
of such Indebtedness which includes covenants, terms, conditions or defaults not
substantially provided for in this Agreement or more favorable to the lender or
lenders thereunder than those provided for in this Agreement, then the Company
shall promptly so advise the Agent and the Lenders. Thereupon, if the Agent
shall request, upon notice to the Company, the Agent and the Lenders shall enter
into an amendment to this Agreement or an additional agreement (as the Agent may
request), providing for substantially the same covenants, terms, conditions and
defaults as those provided for in such instrument or agreement to the extent
required and as may be selected by the Agent. In addition to the foregoing, any
covenants, terms, conditions or defaults in the Senior Subordinated Debt
Documents not substantially provided for in this Agreement or more favorable to
the holders of Subordinated Debt issued in connection therewith are hereby
incorporated by reference into this Agreement to the same extent as if set forth
fully herein, and no subsequent
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56
amendment, waiver, termination or modification thereof shall effect any such
covenants, terms, conditions or defaults as incorporated herein.
ARTICLE VI
DEFAULT
6.1 Events of Default. The occurrence of any one of the following
events or conditions shall be deemed an "Event of Default" hereunder unless
waived by the requisite Lenders pursuant to Section 8.1:
(a) Nonpayment. The Company shall fail to pay when due
any principal of the Notes, or any reimbursement obligation under Section 3.3
(whether by deemed disbursement of a Revolving Credit Loan or otherwise), or,
within 5 days after becoming due, any interest on the Notes or any fees or any
other amount payable hereunder;
(b) Misrepresentation. Any representation or warranty
made by the Company or any Subsidiary in any Loan Document or any other
certificate, report, financial statement or other document furnished by or on
behalf of the Company or any Guarantor in connection with this Agreement, shall
prove to have been incorrect in any material respect when made or deemed made;
(c) Certain Covenants. The Company or any Guarantor shall
fail to perform or observe any term, covenant or agreement contained in Section
5.1(d), Section 5.2 (other than Sections 5.2(e), (f), (l), (m), and (n)) or 5.3
hereof;
(d) Other Defaults. (i) The Company or any Guarantor
shall fail to perform or observe any term, covenant or agreement contained in
Sections 5.2(e) or (f) hereof and any such failure shall remain unremedied for 5
Business Days after written notice thereof shall have been given to the Company
by the Agent or (ii) the Company or any Guarantor shall fail to perform or
observe any other term, covenant or agreement contained in any Loan Document
(other than those described in Sections 6.1(a) or 6.1(c) or clause (i) of this
Section 6.1(d)), and any such failure shall remain unremedied for 20 calendar
days after written notice thereof shall have been given to the Company by the
Agent (or such longer or shorter period of time as may be specified in such Loan
Document);
(e) Other Indebtedness. The Company or any of its
Subsidiaries shall fail to pay any part of the principal of, the premium, if
any, or the interest on, or any other payment of money due under any of its
Indebtedness (other than Indebtedness hereunder), beyond any period of grace
provided with respect thereto, which individually or together with other such
Indebtedness as to which any such failure exists has an aggregate outstanding
principal amount in excess of $1,000,000; or the Company or any of its
Subsidiaries shall fail to perform or observe any other term, covenant or
agreement contained in any agreement, document or instrument evidencing or
securing any such Indebtedness having such aggregate outstanding principal
amount, or under which any such Indebtedness was issued or created, beyond any
period of grace, if any, provided with respect thereto if the effect of such
failure is either (i) to cause, or permit the holders of such Indebtedness (or a
trustee on behalf of such holders) to cause, any payment in respect of such
Indebtedness to become due prior to its due date or (ii) to permit the holders
of such Indebtedness (or a trustee on behalf of such holders) to elect a
majority of the board of directors of the Company;
(f) Judgments. One or more judgments or orders for the
payment of money (not fully paid or covered without dispute by insurance) in an
aggregate amount of $1,000,000 in any fiscal year shall be rendered against the
Company or any of its Subsidiaries, or any other judgment or order (whether or
not for the
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57
payment of money) shall be rendered against or shall affect the Company or any
of its Subsidiaries which causes or could cause or could have a Material Adverse
Effect, and either (i) such judgment or order shall have remained unsatisfied
and the Company or such Subsidiary shall not have taken action necessary to stay
enforcement thereof by reason of pending appeal or otherwise, prior to the
expiration of the applicable period of limitations for taking such action or, if
such action shall have been taken, a final order denying such stay shall have
been rendered, or (ii) enforcement proceedings shall have been commenced by any
creditor upon any such judgment or order;
(g) ERISA. The occurrence of a Reportable Event that
results in or could result in liability of the Company, any Subsidiary of the
Company or any ERISA Affiliate to the PBGC or to any Plan and such Reportable
Event is not corrected within thirty (30) days after the occurrence thereof; or
the occurrence of any Reportable Event which could constitute grounds for
termination of any Plan by the PBGC or for the appointment by the appropriate
United States District Court of a trustee to administer any Plan and such
Reportable Event is not corrected within thirty (30) days after the occurrence
thereof; or the filing by the Company, any Subsidiary of the Company or any
ERISA Affiliate of a notice of intent to terminate a Plan or the institution of
other proceedings to terminate a Plan; or the Company, any Subsidiary of the
Company or any ERISA Affiliate shall fail to pay when due any liability to the
PBGC or to a Plan; or the PBGC shall have instituted proceedings to terminate,
or to cause a trustee to be appointed to administer, any Plan; or any Person
engages in a Prohibited Transaction with respect to any Plan which results in or
could result in liability of the Company, any Subsidiary of the Company, any
ERISA Affiliate to make a required installment or other payment to any Plan
within the meaning of Section 302(f) of ERISA or Section 412(n) of the Code that
results in or could result in liability of the Company, any Subsidiary of the
Company or any ERISA Affiliate to the PBGC or any Plan; or the withdrawal of the
Company, any of its Subsidiaries or any ERISA Affiliate from a Plan during a
plan year in which it was a "substantial employer" as defined in Section
4001(a)(2) of ERISA; or the Company, any of its Subsidiaries or any ERISA
Affiliate becomes an employer with respect to any Multiemployer Plan without the
prior written consent of the Required Lenders; provided, however, that the
aggregate liability caused by any of the foregoing exceeds $1,000,000;
(h) Insolvency, Etc.. The Company or any of its
Subsidiaries shall be dissolved or liquidated or any judgment, order or decree
therefor shall be entered (other than dissolutions or liquidations of
Subsidiaries permitted by Section 5.1(a)), or shall generally not pay its debts
as they become due, or shall admit in writing its inability to pay its debts
generally, or shall make a general assignment for the benefit of creditors, or
shall institute, or there shall be instituted against the Company or any of its
Subsidiaries, any proceeding or case seeking to adjudicate it a bankrupt or
insolvent or seeking liquidation, winding up, reorganization, arrangement,
adjustment, protection, relief or composition of it or its debts under any law
relating to bankruptcy, insolvency or reorganization or relief or protection of
debtors or seeking the entry of an order for relief, or the appointment of a
receiver, trustee, custodian or other similar official for it or for any
substantial part of its assets, rights, revenues or property, and, if such
proceeding is instituted against the Company or such Subsidiary and is being
contested by the Company or such Subsidiary, as the case may be, in good faith
by appropriate proceedings, such proceeding shall remain undismissed or unstayed
for a period of 60 days; or the Company or such Subsidiary shall take any action
(corporate or other) to authorize or further any of the actions described above
in this subsection;
(i) Other Documents. Any material provision of any Loan
Document or any Subordinated Debt Document shall at any time for any reason
cease to be valid and binding and enforceable against any obligor thereunder, or
the validity, binding effect or enforceability thereof shall be contested by any
Person or any obligor, shall deny that it has any or further liability or
obligation thereunder, or any Loan Document or any Subordinated Debt Document
shall be terminated, invalidated or set aside, or be declared ineffective or
inoperative or in any way cease to give or provide to the Lenders and the Agent
the benefits purported to be created thereby in any material manner; or
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(j) Control. Any Change of Control shall occur.
6.2 Remedies.
(a) Upon the occurrence and during the continuance of any
Event of Default, by notice to the Company (i) the Agent may, and upon being
directed to do so by the Required Revolving Credit Lenders shall, terminate the
Commitments or (ii) the Agent may, and upon being directed to do so by the
Required Lenders, shall declare the outstanding principal of, and accrued
interest on, the Notes, all unpaid reimbursement obligations in respect of
drawings under Letters of Credit and all other amounts owing under this
Agreement to be immediately due and payable, or (iii) the Agent may, and upon
being directed to do so by the Required Lenders, shall demand immediate delivery
of cash collateral, and the Company agrees to deliver such cash collateral upon
demand, in an amount equal to the maximum amount that may be available to be
drawn at any time prior to the stated expiry of all outstanding Letters of
Credit, or any one or more of the foregoing, whereupon the Commitments shall
terminate forthwith and all such amounts, including such cash collateral, shall
become immediately due and payable, as the case may be, provided that in the
case of any event or condition described in Section 6.1(h), the Commitments
shall automatically terminate forthwith and all such amounts, including such
cash collateral, shall automatically become immediately due and payable without
notice; in all cases without demand, presentment, protest, diligence, notice of
dishonor or other formality, all of which are hereby expressly waived. Such cash
collateral delivered in respect of outstanding Letters of Credit shall be
deposited in a special cash collateral account to be held by the Agent as
collateral security for the payment and performance of the Company's obligations
under this Agreement to the Lenders and the Agent.
(b) The Agent may and, upon being directed to do so by
the Required Lenders, shall, in addition to the remedies provided in Section
6.2(a), exercise and enforce any and all other rights and remedies available to
it or the Lenders, whether arising under this Agreement or any other Loan
Document or under applicable law, in any manner deemed appropriate by the Agent,
including suit in equity, action at law, or other appropriate proceedings,
whether for the specific performance (to the extent permitted by law) of any
covenant or agreement contained in any other Loan Document or in aid of the
exercise of any power granted in any other Loan Document.
(c) Upon the occurrence and during the continuance of any
Event of Default, each Lender may, subject to Section 7.10, at any time and from
time to time, without notice to the Company (any requirement for such notice
being expressly waived by the Company) set off and apply against any and all of
the obligations of the Company now or hereafter existing under this Agreement,
whether owing to such Lender or any other Lender or the Agent, any and all
deposits (general or special, time or demand, provisional or final) at any time
held and other indebtedness at any time owing by such Lender or any Affiliate of
such Lender to or for the credit or the account of the Company and any property
of the Company from time to time in possession of such Lender, irrespective of
whether or not such Lender shall have made any demand hereunder and although
such obligations may be contingent and unmatured The Company hereby grants to
the Lenders and the Agent a lien on and security interest in all such deposits,
indebtedness and property as collateral security for the payment and performance
of the obligations of the Company under this Agreement. The rights of such
Lender under this Section 6.2(c) are in addition to other rights and remedies
(including, without limitation, other rights of setoff) which such Lender may
have.
6.3 Distribution of Proceeds of Collateral. All proceeds of any
realization on the collateral pursuant to the Security Documents and any
payments received by the Agent or any Lender pursuant to the Guaranties
subsequent to and during the continuance of any Event of Default, shall be
allocated and distributed by the Agent as follows:
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(a) First, to the payment of all reasonable costs and
expenses, including without limitation all reasonable attorneys' fees, of the
Agent in connection with the enforcement of the Security Documents and otherwise
administering this Agreement;
(b) Second, to the payment of all fees required to be
paid under any Loan Document including commitment fees, owing to the Lenders and
Agent pursuant to the Lender Indebtedness on a pro rata basis in accordance with
the Lender Indebtedness consisting of fees owing to the Lenders and Agent under
the Lender Indebtedness, for application to payment of such liabilities;
(c) Third, to the Lenders and Agent on a pro rata basis
in accordance with the Lender Indebtedness consisting of interest owing to the
Lenders and Agent under the Lender Indebtedness, and obligations and liabilities
relating to Swaps owing to the Lenders and the Agent under the Lender
Indebtedness for application to payment of such liabilities;
(d) Fourth, to the Lenders and the Agent on a pro rata
basis in accordance with the Lender Indebtedness consisting of principal
(including without limitation any cash collateral for any outstanding letters of
credit), for application to payment of such liabilities;
(e) Fifth, to the payment of any and all other amounts
owing to the Lenders and the Agent on a pro rata basis in accordance with the
total amount of such Indebtedness owing to each of the Lenders and the Agent,
for application to payment of such liabilities; and
(f) Sixth, to the Company, its Subsidiaries or such other
Person as may be legally entitled thereto.
Notwithstanding the foregoing, no payments of principal, interest or fees
delivered to the Agent for the account of any Defaulting Lender shall be
delivered by the Agent to such Defaulting Lender. Instead, such payments shall,
for so long as such Defaulting Lender shall be a Defaulting Lender, be held by
the Agent, and the Agent is hereby authorized and directed by all parties hereto
to hold such funds in escrow and apply such funds as follows:
(i) First, if applicable to any payments due from such Defaulting
Lender to the Agent, and
(ii) Second, to Loans required to be made by such Defaulting Lender
on any borrowing date to the extent such Defaulting Lender
fails to make such Loans.
Notwithstanding the foregoing, upon the termination of all Commitments and the
payment and performance of all of the Advances and other obligations owing
hereunder (other than those owing to a Defaulting Lender), any funds then held
in escrow by the Agent pursuant to the preceding sentence shall be distributed
to each Defaulting Lender, pro rata in proportion to amounts that would be due
to each Defaulting Lender but for the fact that it is a Defaulting Lender.
6.4 Letter of Credit Liabilities. For the purposes of payments and
distributions under Section 6.3, the full amount of Lender Indebtedness on
account of any letter of credit then outstanding but not drawn upon shall be
deemed to be then due and owing. Amounts distributable to the Lenders or Agent
on account of such Lender Indebtedness under such letters of credit shall be
deposited in a separate collateral account in the name of and under the control
of the Agent and held by the Agent first as security for such letter of credit
Lender Indebtedness and then as security for all other Lender Indebtedness and
the amount so deposited shall be applied to the letter of credit Lender
Indebtedness at such times and to the extent that such letter of credit Lender
Indebtedness become absolute liabilities and if and to the extent that the
letter of credit Lender Indebtedness fail
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60
to become absolute Lender Indebtedness because of the expiration or termination
of the underlying letters of credit without being drawn upon then such amounts
shall be applied to the remaining Lender Indebtedness in the order provided in
Section 6.3. The Company hereby grants to the Agent, for the benefit of the
Lenders and Agent, a lien and security interest in all such funds deposited in
such separate collateral account, as security for all the Lender Indebtedness as
set forth above.
ARTICLE VII
THE AGENT AND THE LENDERS
7.1. Appointment; Nature of Relationship. NBD is hereby appointed
by the Lenders as the Agent hereunder and under each other Loan Document, and
each of the Lenders irrevocably authorizes the Agent to act as the contractual
representative of such Lender with the rights and duties expressly set forth
herein and in the other Loan Documents. The Agent agrees to act as such
contractual representative upon the express conditions contained in this Article
VII. Notwithstanding the use of the defined term "Agent," it is expressly
understood and agreed that the Agent shall have not have any fiduciary
responsibilities to any Lender by reason of this Agreement or any other Loan
Document and that the Agent is merely acting as the representative of the
Lenders with only those duties as are expressly set forth in this Agreement and
the other Loan Documents. In its capacity as the Lenders' contractual
representative, the Agent (i) does not hereby assume any fiduciary duties to any
of the Lenders, (ii) is a "representative" of the Lenders within the meaning of
Section 9-105 of the Uniform Commercial Code and (iii) is acting as an
independent contractor, the rights and duties of which are limited to those
expressly set forth in this Agreement and the other Loan Documents. Each of the
Lenders hereby agrees to assert no claim against the Agent on any agency theory
or any other theory of liability for breach of fiduciary duty, all of which
claims each Lender hereby waives.
7.2. Powers. The Agent shall have and may exercise such powers
under the Loan Documents as are specifically delegated to the Agent by the terms
of each thereof, together with such powers as are reasonably incidental thereto.
The Agent shall have no implied duties to the Lenders, or any obligation to the
Lenders to take any action thereunder except any action specifically provided by
the Loan Documents to be taken by the Agent.
7.3. General Immunity. Neither the Agent nor any of its directors,
officers, agents or employees shall be liable to the Company or any of its
Subsidiaries, the Lenders or any Lender for any action taken or omitted to be
taken by it or them hereunder or under any other Loan Document or in connection
herewith or therewith except for its or their own gross negligence or willful
misconduct.
7.4. No Responsibility for Loans, Recitals, etc. Neither the Agent
nor any of its 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 any Loan Document or any
borrowing hereunder; (ii) the performance or observance of any of the covenants
or agreements of any obligor under any Loan Document, including, without
limitation, any agreement by an obligor to furnish information directly to each
Lender; (iii) the satisfaction of any condition specified in Article II, except
receipt of items required to be delivered to the Agent; (iv) the validity,
enforceability, effectiveness, sufficiency or genuineness of any Loan Document
or any other instrument or writing furnished in connection therewith; or (v) the
value, sufficiency, creation, perfection or priority of any interest in any
collateral security. The Agent shall have no duty to disclose to the Lenders
information that is not required to be furnished by the Company or any
Subsidiary to the Agent at such time, but is voluntarily furnished by the
Company or any Subsidiary to the Agent (either in its capacity as Agent or in
its individual capacity).
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7.5. Action on Instructions of Lenders. The Agent shall in all
cases be fully protected in acting, or in refraining from acting, hereunder and
under any other Loan Document in accordance with written instructions signed by
the Required Lenders or the Required Revolving Credit Lenders, as the case may
be, and such instructions and any action taken or failure to act pursuant
thereto shall be binding on all of the Lenders and on all holders of Notes. The
Lenders hereby acknowledge that the Agent shall be under no duty to take any
discretionary action permitted to be taken by it pursuant to the provisions of
this Agreement or any other Loan Document unless it shall be requested in
writing to do so by the Required Lenders or the Required Revolving Credit
lenders, as the case may be. The Agent shall be fully justified in failing or
refusing to take any action hereunder and under any other Loan Document unless
it shall first be indemnified to its satisfaction by the Lenders pro rata
against any and all liability, cost and expense that it may incur by reason of
taking or continuing to take any such action.
7.6. Employment of Agents and Counsel. The Agent may execute any of
its duties as Agent hereunder and under any other Loan Document by or through
employees, agents, and attorneys-in-fact and shall not be answerable to the
Lenders, except as to money or securities received by it or its authorized
agents, for the default or misconduct of any such agents or attorneys-in-fact
selected by it with reasonable care. The Agent shall be entitled to advice of
counsel concerning all matters pertaining to the agency hereby created and its
duties hereunder and under any other Loan Document.
7.7. Reliance on Documents; Counsel. The Agent shall be entitled to
rely upon any Note, notice, consent, certificate, affidavit, letter, telegram,
statement, paper or document believed by it to be genuine and correct and to
have been signed or sent by the proper person or persons, and, in respect to
legal matters, upon the opinion of counsel selected by the Agent, which counsel
may be employees of the Agent.
7.8. Agent's Reimbursement and Indemnification. The Lenders agree
to reimburse and indemnify the Agent ratably in proportion to their respective
Commitments (or, if the Commitments have been terminated, in proportion to their
Commitments immediately prior to such termination) (i) for any amounts not
reimbursed by the Company for which the Agent is entitled to reimbursement by
the Company under the Loan Documents, (ii) for any other expenses incurred by
the Agent on behalf of the Lenders, in connection with the preparation,
execution, delivery, administration and enforcement of the Loan Documents and
(iii) for any liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind and nature
whatsoever which may be imposed on, incurred by or asserted against the Agent in
any way relating to or arising out of the Loan Documents or any other document
delivered in connection therewith or the transactions contemplated thereby, or
the enforcement of any of the terms thereof or of any such other documents,
provided that no Lender shall be liable for any of the foregoing to the extent
they arise from the gross negligence or willful misconduct of the Agent. The
obligations of the Lenders under this Section 7.8 shall survive payment of the
Obligations and termination of this Agreement.
7.9. Notice of Default. The Agent shall not be deemed to have
knowledge or notice of the occurrence of any Unmatured Event or Event of Default
hereunder unless the Agent has received written notice from a Lender or the
Company referring to this Agreement describing such Default or Unmatured Default
and stating that such notice is a "notice of default". In the event that the
Agent receives such a notice, the Agent shall give prompt notice thereof to the
Lenders.
7.10. Rights as a Lender. In the event the Agent is a Lender, the
Agent shall have the same rights and powers hereunder and under any other Loan
Document as any Lender and may exercise the same as though it were not the
Agent, and the term "Lender" or "Lenders" shall, at any time when the Agent is a
Lender, unless the context otherwise indicates, include the Agent in its
individual capacity. The Agent may accept deposits from, lend money to, and
generally engage in any kind of trust, debt, equity or other transaction, in
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addition to those contemplated by this Agreement or any other Loan Document,
with the Company or any of its Subsidiaries in which the Company or such
Subsidiary is not restricted hereby from engaging with any other Person. The
Agent, in its individual capacity, is not, subject to Section 8.6, obligated to
remain a Lender.
7.11. Lender Credit Decision. Each Lender acknowledges that it has,
independently and without reliance upon the Agent or any other Lender and based
on the financial statements prepared by the Company and such other documents and
information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement and the other Loan Documents. Each Lender
also acknowledges that it will, independently and without reliance upon the
Agent or any other Lender and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit decisions in
taking or not taking action under this Agreement and the other Loan Documents.
7.12. Successor Agent. The Agent may resign at any time by giving
written notice thereof to the Lenders and the Company, such resignation to be
effective upon the appointment of a successor Agent or, if no successor Agent
has been appointed, forty-five days after the retiring Agent gives notice of its
intention to resign. Upon any such resignation, the Required Lenders shall have
the right to appoint, on behalf of the Company and the Lenders, a successor
Agent. If no successor Agent shall have been so appointed by the Required
Lenders within thirty days after the resigning Agent's giving notice of its
intention to resign, then the resigning Agent may appoint, on behalf of the
Company and the Lenders, a successor Agent. If the Agent has resigned and no
successor Agent has been appointed, the Lenders may perform all the duties of
the Agent hereunder and the Company shall make all payments in respect of the
Obligations to the applicable Lender and for all other purposes shall deal
directly with the Lenders. No successor Agent shall be deemed to be appointed
hereunder until such successor Agent has accepted the appointment. Any such
successor Agent shall be a commercial bank having capital and retained earnings
of at least $50,000,000. Upon the acceptance of any appointment as Agent
hereunder by a successor Agent, such successor Agent shall thereupon succeed to
and become vested with all the rights, powers, privileges and duties of the
resigning Agent. Upon the effectiveness of the resignation of the Agent, the
resigning Agent shall be discharged from its duties and obligations hereunder
and under the Loan Documents. After the effectiveness of the resignation of an
Agent, the provisions of this Article VII shall continue in effect for the
benefit of such Agent in respect of any actions taken or omitted to be taken by
it while it was acting as the Agent hereunder and under the other Loan
Documents.
7.13. Collateral Management. The Agent is hereby authorized on
behalf of all of the Lenders, without the necessity of any further consent from
any Lender, from time to time prior to an Event of Default, to take any action
with respect to the collateral or the Security Documents which may be necessary
(i) to perfect and maintain perfected the security interest in and liens upon
the collateral granted pursuant to the Security Documents; and (ii) to release
portions of the collateral from the security interests and liens imposed by the
Security Documents in connection with any dispositions of such portions of the
collateral permitted hereby. In the event that the Company or the Guarantors
desire to sell or otherwise dispose of any assets and such sale or disposition
is permitted hereby, the Agent shall, upon timely notice from the Company,
release such portions of the collateral from the security interests and liens
imposed by the Security Documents as may be specified by the Company or the
Guarantors in order for the Borrower or the Guarantors to consummate such
proposed sale or disposition, provided that at or prior to the time of such
proposed sale or disposition no Unmatured Event or Event of Default shall have
occurred and be continuing, including, without limitation, any Unmatured Event
or Event of Default that would arise upon consummation of such sale or
disposition. For purposes of the preceding sentence, the Company shall give
timely notice if, not less than two Business Days prior to the date of such
proposed sale or disposition, it shall furnish to the Agent an officers'
certificate setting forth in reasonable detail the circumstances of such
proposed sale or disposition.
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7.14. Right to Indemnity. The Agent shall be fully justified in
failing or refusing to take any action hereunder unless it shall first be
indemnified to its satisfaction by the Lenders pro rata against any and all
liability and expense which may be incurred by it by reason of taking or
continuing to take any such action.
7.15 Sharing of Payments. The Lenders agree among themselves that,
in the event that any Lender shall obtain payment in respect of any Advance or
any other obligation owing to the Lenders under this Agreement through the
exercise of a right of set-off, banker's lien, counterclaim or otherwise in
excess of its ratable share of payments received by all of the Lenders on
account of the Advances and other obligations (or if no Advances are
outstanding, ratably according to the respective amounts of the Commitments),
such Lender shall promptly purchase from the other Lenders participations in
such Advances and other obligations in such amounts, and make such other
adjustments from time to time, as shall be equitable to the end that all of the
Lenders share such payment in accordance with such ratable shares. The Lenders
further agree among themselves that if payment to a Lender obtained by such
Lender through the exercise of a right of set-off, banker's lien, counterclaim
or otherwise as aforesaid shall be rescinded or must otherwise be restored, each
Lender which shall have shared the benefit of such payment shall, by repurchase
of participations theretofore sold, return its share of that benefit to each
Lender whose payment shall have been rescinded or otherwise restored. The
Company agrees that any Lender so purchasing such a participation may, to the
fullest extent permitted by law, exercise all rights of payment, including
set-off, banker's lien or counterclaim, with respect to such participation as
fully as if such Lender were a holder of such Advance or other obligation in the
amount of such participation. The Lenders further agree among themselves that,
in the event that amounts received by the Lenders and the Agent hereunder are
insufficient to pay all such obligations or insufficient to pay all such
obligations when due, the fees and other amounts owing to the Agent in such
capacity shall be paid therefrom before payment of obligations owing to the
Lenders under this Agreement. Except as otherwise expressly provided in this
Agreement, if any Lender or Agent shall fail to remit to the Agent or any other
Lender an amount payable by such Lender or Agent to the Agent or such other
Lender pursuant to this Agreement on the date when such amount is due, such
payments shall be made together with interest thereon for each date from the
date such amount is due until the date such amount is paid to the Agent or such
other Lender at a rate per annum equal to the rate at which borrowings are
available to the payee in its overnight federal funds market. It is further
understood and agreed among the Lenders and the Agent that if the Agent shall
engage in any other transactions with the Company and shall have the benefit of
any collateral or security therefor which does not expressly secure the
obligations arising under this Agreement except by virtue of a so-called dragnet
clause or comparable provision, the Agent shall be entitled to apply any
proceeds of such collateral or security first in respect of the obligations
arising in connection with such other transaction before application to the
obligations arising under this Agreement.
7.16 Withholding Tax Exemption. Each Lender that is not organized
and incorporated under the laws of the United States or any State thereof agrees
to file with the Agent and the Company, in duplicate, (a) on or before the later
of (i) the Effective Date and (ii) the date such Lender becomes a Lender under
this Agreement and (b) thereafter, for each taxable year of such Lender (in the
case of a Form 4224) or for each third taxable year of such Lender (in the case
of any other form) during which interest or fees arising under this Agreement
and the Notes are received, unless not legally able to do so as a result of a
change in United States income tax enacted, or treaty promulgated, after the
date specified in the preceding clause (a), on or prior to the immediately
following due date of any payment by the Company hereunder, a properly completed
and executed copy of either Internal Revenue Service Form 4224 or Internal
Revenue Service Form 1001 and Internal Revenue Service Form W-8 or Internal
Revenue Service Form W-9 and any additional form necessary for claiming complete
exemption from United States withholding taxes (or such other form as is
required to claim complete exemption from United States withholding taxes), if
and as provided by the Code or other pronouncements of the United States
Internal Revenue Service, and such Lender warrants to the Company that the form
so filed will be true and complete; provided that such Lender's failure to
complete and execute such Form 4224 or Form 1001, or Form W-8 or Form W-9, as
the case may be, and any such additional form (or any
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successor form or forms) shall not relieve the Company of any of its obligations
under this Agreement, except as otherwise provided in this Section 7.16.
ARTICLE VIII
MISCELLANEOUS
8.1 Amendments, Etc. (a) No amendment, modification, termination
or waiver of any provision of this Agreement nor any consent to any departure
therefrom shall be effective unless the same shall be in writing and signed by
the Required Lenders and, to the extent any rights, obligations or duties of the
Agent may be affected thereby, the Agent, provided, however, that no such
amendment, modification, termination, waiver or consent shall, without the
consent of the Agent and all of the Lenders, (i) authorize or permit the
extension of time for, or any reduction of the amount of, any payment of the
principal of, or interest on, the Notes or any Letter of Credit reimbursement
obligation, or any fees or other amount payable hereunder, (ii) amend or
terminate the respective Commitments of any Lender set forth on the signature
pages hereof or modify the provisions of this Section regarding the taking of
any action under this Section or the provisions of Section 7.10 or the
definition of Required Lenders, or (iii) release all or substantially all of the
collateral, and provided, further, that no such amendment, modification,
termination, waiver or consent, shall, without the consent of the Required
Revolving Credit Lenders, allow the Company to obtain a Revolving Credit Advance
if it would otherwise be unable to absent such amendment, modification,
termination, waiver or consent.
(b) Any such amendment, waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given.
(c) Notwithstanding anything herein to the contrary, no
Defaulting Lender shall be entitled to vote (whether to consent or to withhold
its consent) with respect to any amendment, modification, termination or waiver
of any provision of this Agreement or any departure therefrom or any direction
from the Lenders to the Agent, and, for purposes of determining the Required
Lenders at any time, the Commitments and the Advances of each Defaulting Lenders
shall be disregarded.
8.2 Notices. (a) Except as otherwise provided in Section 8.2(c)
hereof, all notices and other communications hereunder shall be in writing and
shall be delivered or sent to the Company, the Agent and the Lenders at the
respective addresses and numbers for notices set forth on the signature pages
hereof, or to such other address as may be designated by the Company, the Agent
or any Lender by notice to the other parties hereto. All notices and other
communications shall be deemed to have been given at the time of actual delivery
thereof to such address, or if sent by certified or registered mail, postage
prepaid, to such address, on the third day after the date of mailing, or in the
case of telex notice, upon receipt of the appropriate answerback, or, in the
case of facsimile notice, upon receipt of a confirmation mechanically produced
by the facsimile machine, provided, however, that notices to the Agent shall not
be effective until received.
(b) Notices by the Company to the Agent with respect to
terminations or reductions of the Commitments pursuant to Section 2.2, requests
for Advances pursuant to Section 2.4, requests for continuations or conversions
of Loans pursuant to Section 2.7 and notices of prepayment pursuant to Section
3.1 shall be irrevocable and binding on the Company.
(c) Any notice to be given by the Company to the Agent
pursuant to Sections 2.4, 2.7 or 3.1 and any notice to be given by the Agent or
any Lender hereunder, may be given by telephone, and all such notices given by
the Company must be immediately confirmed in writing in the manner provided in
Section
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8.2(a). Any such notice given by telephone shall be deemed effective upon
receipt thereof by the party to whom such notice is to be given.
8.3 No Waiver By Conduct; Remedies Cumulative. No course of
dealing on the part of the Agent or any Lender, nor any delay or failure on the
part of the Agent or any Lender in exercising any right, power or privilege
hereunder shall operate as a waiver of such right, power or privilege or
otherwise prejudice the Agent's or such Lender's rights and remedies hereunder;
nor shall any single or partial exercise thereof preclude any further exercise
thereof or the exercise of any other right, power or privilege. No right or
remedy conferred upon or reserved to the Agent or any Lender under any Loan
Document is intended to be exclusive of any other right or remedy, and every
right and remedy shall be cumulative and in addition to every other right or
remedy granted thereunder or now or hereafter existing under any applicable law.
Every right and remedy granted by any Loan Document or by applicable law to the
Agent or any Lender may be exercised from time to time and as often as may be
deemed expedient by the Agent or any Lender.
8.4 Reliance on and Survival of Various Provisions. All terms,
covenants, agreements, representations and warranties of the Company and any
Guarantor made herein or in any other Loan Document or in any certificate,
report, financial statement or other document furnished by or on behalf of the
Company and any Guarantor in connection with the negotiation and modification of
this Agreement shall be deemed to have been relied upon by the Lenders,
notwithstanding any investigation heretofore or hereafter made by any Lender or
on such Lender's behalf, and those covenants and agreements of the Company set
forth in Section 3.7, 3.9 and 8.5 hereof shall survive the repayment in full of
the Advances and the termination of the Commitments.
8.5 Expenses; Indemnification. (a) The Company agrees to pay, or
reimburse the Agent for the payment of, on demand, (i) the reasonable fees and
expenses of counsel to the Agent, including without limitation the fees and
expenses of Dickinson, Wright, Moon, Van Dusen & Xxxxxxx and any other counsel
retained by the Agent in connection with the preparation, execution, delivery
and administration of the Loan Documents and the consummation of the
transactions contemplated hereby, and in connection with advising the Agent as
to its rights and responsibilities with respect thereto, and in connection with
any amendments, waivers or consents in connection therewith, and (ii) all stamp
and other taxes and fees payable or determined to be payable in connection with
the execution, delivery, filing or recording of the Loan Security Documents and
the consummation of the transactions contemplated hereby, and any and all
liabilities with respect to or resulting from any delay in paying or omitting to
pay such taxes or fees, and (iii) all reasonable costs and expenses of the Agent
(including reasonable fees and expenses of counsel and whether incurred through
negotiations, legal proceedings or otherwise) in connection with any Unmatured
Event or Event of Default or the enforcement of, or the exercise or preservation
of any rights under, any Loan Document or in connection with any refinancing or
restructuring of the credit arrangements provided under this Agreement and (iv)
all reasonable costs and expenses of the Agent (including reasonable fees and
expenses of counsel) in connection with any action or proceeding relating to a
court order, injunction or other process or decree restraining or seeking to
restrain the Agent from paying any amount under, or otherwise relating in any
way to, any Letter of Credit and any and all costs and expenses which any of
them may incur relative to any payment under any Letter of Credit.
(b) The Company agrees to indemnify each Lender, the
Agent and each of their respective officers, directors, employees and agents
(collectively, the "Indemnified Parties") and hold each Indemnified Party
harmless from and against any and all liabilities, losses, damages, costs and
expenses of any kind, including, without limitation, the reasonable fees and
disbursements of counsel, which may be incurred by any Indemnified Party in
connection with any investigative, administrative or judicial proceeding
(whether or not such Indemnified Party shall be designated a party thereto)
(collectively, the "Indemnified Liabilities") at any time relating to (whether
before or after the execution of this Agreement) any of the following:
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(i) any actual or proposed use of the Advances
hereunder by the Company or any of its Subsidiaries or Unrestricted Subsidiaries
or any transaction financed or to be financed in whole or in part, directly or
indirectly, with the proceeds of any Advance;
(ii) the entering into and performance of this
Agreement and any other Loan Document by any of the Indemnified Parties
(including any action brought by or on behalf of the Company as the result of
any determination by any Lender not to make any Advance);
(iii) any investigation, litigation or proceeding
related to either Initial Acquisition or any other acquisition or proposed
acquisition by the Company or any of its Subsidiaries of all or any portion of
the stock or assets of any Person or to the issuance of, or any other matter
relating to, any Subordinated Debt, whether or not any Indemnified Party is a
party thereto;
(iv) any investigation, litigation or proceeding
related to any environmental cleanup, audit, compliance or other matter relating
to any release by the Company or any of its Subsidiaries of any Hazardous
Material or any violations of Environmental Laws; or
(v) the presence on or under, or the escape,
seepage, leakage, spillage, discharge, emission, discharging or releases from,
any real property owned or operated by the Company or any Subsidiary thereof of
any Hazardous Material (including any losses, liabilities, damages, injuries,
costs, expenses or claims asserted or arising under any Environmental Law),
regardless of whether caused by, or within the control of, the Company or such
Subsidiary, except for any such Indemnified Liabilities arising for the account
of a particular Indemnified Party by reason of the activities of the Indemnified
Party on the property of the Company conducted subsequent to a foreclosure on
such property by any Indemnified Party or by reason of the relevant Indemnified
Party's gross negligence or wilful misconduct or breach of this Agreement, and
if and to the extent that the foregoing undertaking may be unenforceable for any
reason, the Company hereby agrees to make the maximum contribution to the
payment and satisfaction of each of the Indemnified Liabilities which is
permissible under applicable law. The Company shall be obligated to indemnify
the Indemnified Parties for all Indemnified Liabilities subject to and pursuant
to the foregoing provisions, regardless of whether the Company or any of its
Subsidiaries had knowledge of the facts and circumstances giving rise to such
Indemnified Liability.
Provided that no Indemnified Party shall have the right to be
indemnified hereunder for its own gross negligence or willful misconduct as
determined by a court of competent jurisdiction.
8.6 Successors and Assigns. (a) This Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns, provided that the Company may not, without the prior
consent of all the Lenders, assign its rights or obligations under any Loan
Document and the Lenders shall not be obligated to make any Advance hereunder to
any entity other than the Company.
(b) Any Lender may sell a participation interest to any
financial institution or institutions, and such financial institution or
institutions may further sell, a participation interest (undivided or divided)
in, the Advances and such Lender's rights and benefits under the Loan Documents,
and to the extent of that participation, such participant or participants shall
have the same rights and benefits against the Company under Section 6.2(c) as it
or they would have had if participation of such participant or participants were
the Lender making the Advances to the Company hereunder, provided, however, that
(i) such Lender's obligations under this Agreement shall remain unmodified and
fully effective and enforceable against such Lender, (ii) such Lender shall
remain solely responsible to the other parties hereto for the performance of
such obligations, (iii) such Lender shall remain the holder of its Notes for all
purposes of this Agreement, (iv) the Company, the Agent and the other Lenders
shall continue to deal solely and directly with such Lender in connection with
such Lender's rights and obligations under this Agreement, (v) such Lender shall
not grant to its participant any rights to
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consent or withhold consent to any action taken by such Lender or the Agent
under this Agreement other than action requiring the consent of all of the
Lenders hereunder and (iv) such participation shall in no event be less than
$5,000,000. The Agent from time to time in its sole discretion may appoint
agents for the purpose of servicing and administering this Agreement and the
transactions contemplated hereby and enforcing or exercising any rights or
remedies of the Agent provided under the Loan Documents or otherwise. In
furtherance of such agency, the Agent may from time to time direct that the
Company provide notices, reports and other documents contemplated by this
Agreement (or duplicates thereof) to such agent. The Company hereby consents to
the appointment of such agent and agrees to provide all such notices, reports
and other documents and to otherwise deal with such agent acting on behalf of
the Agent in the same manner as would be required if dealing with the Agent
itself.
(c) Each Lender may, with the prior written consent of
the Company, which consent from the Company shall not be unreasonably withheld
and may not be withheld if any Event of Default has occurred and is continuing
or if such assignment is to an Affiliate of a Lender, and the prior written
consent of the Agent, assign to one or more banks or other entities all or a
portion of its rights and obligations under this Agreement (including, without
limitation, all or a portion of its Commitment, the Advances owing to it and the
Note or Notes held by it); provided, however, that (i) each such assignment
shall be of a uniform, and not a varying, percentage of all rights and
obligations, (ii) except in the case of an assignment of all of a Lender's
rights and obligations under this Agreement, (A) the amount of the Commitment of
the assigning Lender being assigned pursuant to each such assignment (determined
as of the date of the Assignment and Acceptance with respect to such assignment)
shall in no event be less than $5,000,000, and in integral multiples of
$1,000,000 thereafter, or such lesser amount as the Company and the Agent may
consent to and (B) after giving effect to each such assignment, the amount of
the Commitment of the assigning Lender shall in no event be less than
$5,000,000, and (iii) the parties to each such assignment shall execute and
deliver to the Agent, for its acceptance and recording in the Register, an
Assignment and Acceptance in the form of Exhibit K hereto (an "Assignment and
Acceptance"), together with any Note or Notes subject to such assignment and a
processing and recordation fee of $5,000. Upon such execution, delivery,
acceptance and recording, from and after the effective date specified in such
Assignment and Acceptance, (x) the assignee thereunder shall be a party hereto
and, to the extent that rights and obligations hereunder have been assigned to
it pursuant to such Assignment and Acceptance, have the rights and obligations
of a Lender hereunder and (y) the Lender assignor thereunder shall, to the
extent that rights and obligations hereunder have been assigned by it pursuant
to such Assignment and Acceptance, relinquish its rights and be released from
its obligations under this Agreement (and, in the case of an Assignment and
Acceptance covering all of the remaining portion of an assigning Lender's rights
and obligations under this Agreement, such Lender shall cease to be a party
hereto).
(d) By executing and delivering an Assignment and
Acceptance, the Lender assignor thereunder and the assignee thereunder confirm
to and agree with each other and the other parties hereto as follows: (i) other
than as provided in such Assignment and Acceptance, such assigning Lender makes
no representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with this
Agreement or the execution, legality, validity, enforceability, genuineness,
sufficiency or value of this Agreement or any other instrument or document
furnished pursuant hereto; (ii) such assigning Lender makes no representation or
warranty and assumes no responsibility with respect to the financial condition
of the Company or the performance or observance by the Company of any of its
obligations under this Agreement or any other instrument or document furnished
pursuant hereto; (iii) such assignee confirms that it has received a copy of
this Agreement, together with copies of the financial statements referred to in
Section 4.6 and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into such
Assignment and Acceptance; (iv) such assignee will, independently and without
reliance under the Agent, such assigning Lender or any other Lender and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action under
this Agreement; (v) such assignee appoints and authorizes the
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Agent to take such action as agent on its behalf and to exercise such powers and
discretion under this Agreement as are delegated to the Agent by the terms
hereof, together with such powers and discretion as are reasonably incidental
thereto; and (vi) such assignee agrees that it will perform in accordance with
their terms all of the obligations that by the terms of this Agreement are
required to be performed by it as a Lender.
(e) The Agent shall maintain at its address designated on
the signature pages hereof a copy of each Assignment and Acceptance delivered to
and accepted by it and a register for the recordation of the names and addresses
of the Lenders and the Commitment of, and principal amount of the Advances owing
to, each Lender from time to time (the "Register"). The entries in the Register
shall be conclusive and binding for all purposes, absent manifest error, and the
Company, the Agent and the Lenders may treat each Person whose name is recorded
in the Register as a Lender hereunder for all purposes of this Agreement. The
Register shall be available for inspection by the Company or any Lender at any
reasonable time and from time to time upon reasonable prior notice.
(f) Upon its receipt of an Assignment and Acceptance
executed by an assigning Lender and an assignee, together with any Note or Notes
subject to such assignment, the Agent shall, if such Assignment and Acceptance
has been completed, (i) accept such Assignment and Acceptance, (ii) record the
information contained therein in the Register and (iii) give prompt notice
thereof to the Company. Within five Business Days after its receipt of such
notice, the Company, at its own expense, shall execute and deliver to the Agent
in exchange for the surrendered Note or Notes a new Note or Notes to the order
of such assignee in an amount equal to the Commitment assumed by it pursuant to
such Assignment and Acceptance and, if the assigning Lender has retained a
Commitment hereunder, a new Note to the order of the assigning Lender in an
amount equal to the Commitment retained by it hereunder. Such new Note or Notes
shall be in an aggregate principal amount equal to the aggregate principal
amount of such surrendered Note or Notes, shall be dated the effective date of
such Assignment and Acceptance and shall otherwise be in substantially the form
of Exhibit K hereto.
(g) The Lenders may, in connection with any assignment or
participation or proposed assignment or participation pursuant to this Section
8.6, disclose to the assignee or participant or proposed assignee or
participant, any information relating to the Company, provided that assignee or
participant agrees to keep all non public information confidential.
(h) Notwithstanding any other provision set forth in this
Agreement, any Lender may at any time create a security interest in, or assign,
all or any portion of its rights under this Agreement (including, without
limitation, the Loans owing to it and the Note or Notes held by it) in favor of
any Federal Reserve Lender in accordance with Regulation A of the Board of
Governors of the Federal Reserve System; provided that such creation of a
security interest or assignment shall not release such Lender from its
obligations under this Agreement.
8.7 Counterparts. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one and the same
instrument and any of the parties hereto may execute this Agreement by signing
any such counterpart.
8.8 Governing Law. This Agreement is a contract made under, and
shall be governed by and construed in accordance with, the law of the State of
Michigan in the same manner applicable to contracts made and to be performed
entirely within such State and without giving effect to choice of law principles
of such State. The Company further agrees that any legal action or proceeding
with respect to any Loan Document or the transactions contemplated hereby may be
brought in any court of the State of Michigan, or in any court of the United
States of America sitting in Michigan, and the Company hereby submits to and
accepts generally and unconditionally the jurisdiction of those courts with
respect to its Person and property and irrevocably consents to the service of
process in connection with any such action or proceeding by personal delivery to
the Company
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or by the mailing thereof by registered or certified mail, postage prepaid to
the Company at its address set forth on the signature pages hereof or as
provided pursuant to Section 8.2. Nothing in this paragraph shall affect the
right of the Lenders and the Agent to serve process in any other manner
permitted by law or limit the right of the Lenders or the Agent to bring any
such action or proceeding against the Company or property in the courts of any
other jurisdiction. The Company hereby irrevocably waives any objection to the
laying of venue of any such suit or proceeding in the above described courts.
8.9 Table of Contents and Headings. The table of contents and the
headings of the various subdivisions hereof are for the convenience of reference
only and shall in no way modify any of the terms or provisions hereof.
8.10 Construction of Certain Provisions. If any provision of this
Agreement refers to any action to be taken by any Person, or which such Person
is prohibited from taking, such provision shall be applicable whether such
action is taken directly or indirectly by such Person, whether or not expressly
specified in such provision.
8.11 Integration and Severability. This Agreement embodies the
entire agreement and understanding between the Company and the Agent and the
Lenders, and supersedes all prior agreements and understandings, relating to the
subject matter hereof. In case any one or more of the obligations of the Company
under any Loan Document shall be invalid, illegal or unenforceable in any
jurisdiction, the validity, legality and enforceability of the remaining
obligations of the Company shall not in any way be affected or impaired thereby,
and such invalidity, illegality or unenforceability in one jurisdiction shall
not affect the validity, legality or enforceability of the obligations of the
Company under any Loan Document in any other jurisdiction.
8.12 Independence of Covenants. All covenants hereunder shall be
given independent effect so that if a particular action or condition is not
permitted by any such covenant, the fact that it would be permitted by an
exception to, or would be otherwise within the limitations of, another covenant
shall not avoid the occurrence of an Unmatured Event or an Event of Default or
any event or condition which with notice or lapse of time, or both, could become
such an Unmatured Event or an Event of Default if such action is taken or such
condition exists.
8.13 Interest Rate Limitation. Notwithstanding any provision of any
Loan Document, in no event shall the amount of interest paid or agreed to be
paid by the Company exceed an amount computed at the highest rate of interest
permissible under applicable law. If, from any circumstances whatsoever,
fulfillment of any provision of any Loan Document at the time performance of
such provision shall be due, shall involve exceeding the interest rate
limitation validly prescribed by law which a court of competent jurisdiction may
deem applicable hereto, then, ipso facto, the obligations to be fulfilled shall
be reduced to an amount computed at the highest rate of interest permissible
under applicable law, and if for any reason whatsoever the Lender shall ever
receive as interest an amount which would be deemed unlawful under such
applicable law such interest shall be automatically applied to the payment of
principal of the Advances outstanding hereunder (whether or not then due and
payable) and not to the payment of interest, or shall be refunded to the Company
if such principal and all other obligations of the Company to the Lenders have
been paid in full.
8.14 Judgment and Payment. (a) If, for the purpose of obtaining
judgment in any court, it is necessary to convert a sum owing hereunder by the
Company in one currency into another currency, the Company agrees, to the
fullest extent that it may effectively do so, that the rate of exchange used
shall be that at which in accordance with normal banking procedures in the
relevant jurisdiction the relevant Lender could purchase the first currency with
such other currency for the first currency on the Business Day immediately
preceding the day on which the final judgment is given.
(b) The obligations of the Company in respect of any sum
due in Dollars to any party hereto or any holder of the obligations owing
hereunder (the "Applicable Creditor") shall,
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notwithstanding any payment obligation or judgment in a currency (the "Payment
Currency") other than Dollars, be discharged only to the extent that, on the
Business Day following receipt by the Applicable Creditor of any sum adjudged to
be so due in the Payment Currency, the Applicable Creditor may in accordance
with normal banking procedures in the relevant jurisdiction purchase Dollars
with the Payment Currency; if the amount of Dollars so purchased is less than
the sum originally due to the Applicable Creditor in Dollars, the Company
agrees, as a separate obligation and notwithstanding any such judgment, to
indemnify the Applicable Creditor against such loss. The obligations of the
Company contained in this Section 8.14 shall survive the termination of this
Agreement and the payment of all other amounts owing hereunder.
8.15 WAIVER OF JURY TRIAL. THE LENDERS AND THE AGENTS AND THE
COMPANY, AFTER CONSULTING OR HAVING HAD THE OPPORTUNITY TO CONSULT WITH COUNSEL,
KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHT ANY OF THEM MAY HAVE TO
A TRIAL BY JURY IN ANY LITIGATION BASED UPON OR ARISING OUT OF ANY LOAN DOCUMENT
OR ANY RELATED INSTRUMENT OR AGREEMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED
BY THIS AGREEMENT OR ANY COURSE OF CONDUCT, DEALING, STATEMENTS (WHETHER ORAL OR
WRITTEN) OR ACTIONS OF EITHER OF THEM. NEITHER ANY LENDER, THE AGENT NOR THE
COMPANY SHALL SEEK TO CONSOLIDATE, BY COUNTERCLAIM OR OTHERWISE, ANY SUCH ACTION
IN WHICH A JURY TRIAL HAS BEEN WAIVED WITH ANY OTHER ACTION IN WHICH A JURY
TRIAL CANNOT BE OR HAS NOT BEEN WAIVED. THESE PROVISIONS SHALL NOT BE DEEMED TO
HAVE BEEN MODIFIED IN ANY RESPECT OR RELINQUISHED BY ANY PARTY HERETO EXCEPT BY
A WRITTEN INSTRUMENT EXECUTED BY SUCH PARTY.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered on the 24th day of March, 1997, which shall be the
Effective Date of this Agreement.
Address for Notices: KEY PLASTICS, INC.
00000 Xxxxxxxx Xxxx
Xxxx, Xxxxxxxx 00000
Attention: Chief Financial Officer By:/s/ Xxxx Xxxx
Facsimile No.: (000) 000-0000 -------------
Its: Treasurer
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611 Xxxxxxxx Avenue NBD BANK, as Agent and as a Lender
Xxxxxxx, Xxxxxxxx 00000
Attention: Michigan Banking Division By:/s/ Xxxx Xxxxx
Facsimile No.: (000) 000-0000 --------------
Its: Vice President
Revolving Credit Commitment: $85,000,000
Term Loan Commitment: $15,000,000
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Three World Financial Center XXXXXX COMMERCIAL PAPER, INC.
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx Xxx By:/s/ Xxxxxx Xxx
Facsimile No.: (000)000 0000 --------------
Its: Authorized Signatory
Revolving Credit Commitment: $40,000,000
Term Loan Commitment: $0
CREDIT AGREEMENT Page 68
