EXHIBIT 10.13
AMENDED AND RESTATED CREDIT AGREEMENT
DATED AS OF AUGUST 1, 2003
AMONG
MSX INTERNATIONAL, INC.,
AS BORROWER,
THE LOAN PARTIES PARTY HERETO FROM TIME TO TIME,
THE LENDERS PARTY HERETO FROM TIME TO TIME,
BANK ONE, NA,
AS AGENT AND LC ISSUER
AND
BANC ONE CAPITAL MARKETS, INC.,
AS LEAD ARRANGER AND SOLE BOOK RUNNER
TABLE OF CONTENTS
Page
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ARTICLE I. DEFINITIONS..........................................................................................1
ARTICLE II. THE FACILITY.......................................................................................26
2.1. THE FACILITY...........................................................................................26
2.1.1. Revolving Loans...................................................................................27
2.1.2. Facility LCs......................................................................................28
2.1.3. Non-Ratable Loans.................................................................................32
2.1.4. Protective Advances and Overadvances..............................................................32
2.1.5 Swingline Loans...................................................................................33
2.1.6 Limitation on Advances............................................................................34
2.2. RATABLE LOANS; RISK PARTICIPATION......................................................................35
2.3. PAYMENT OF THE OBLIGATIONS.............................................................................35
2.4. MINIMUM AMOUNT OF EACH ADVANCE.........................................................................35
2.5. FUNDING ACCOUNT........................................................................................35
2.6. RELIANCE UPON AUTHORITY; NO LIABILITY..................................................................35
2.7. CONVERSION AND CONTINUATION OF OUTSTANDING ADVANCES....................................................36
2.8. TELEPHONIC NOTICES.....................................................................................36
2.9. NOTIFICATION OF ADVANCES, INTEREST RATES, PREPAYMENTS AND COMMITMENT REDUCTIONS........................36
2.10. FEES...................................................................................................36
2.11. INTEREST RATES.........................................................................................37
2.12. EURODOLLAR ADVANCES POST DEFAULT; DEFAULT RATES........................................................37
2.13. INTEREST PAYMENT DATES; INTEREST AND FEE BASIS.........................................................37
2.14. VOLUNTARY PREPAYMENTS..................................................................................38
2.15. MANDATORY PREPAYMENTS..................................................................................38
2.16. TERMINATION OF THE FACILITY............................................................................39
2.17. METHOD OF PAYMENT......................................................................................40
2.18. APPORTIONMENT, APPLICATION, AND REVERSAL OF PAYMENTS...................................................40
2.19. SETTLEMENT.............................................................................................41
2.20. INDEMNITY FOR RETURNED PAYMENTS........................................................................42
2.21. NOTELESS AGREEMENT; EVIDENCE OF INDEBTEDNESS...........................................................42
2.22. LENDING INSTALLATIONS..................................................................................43
2.23. NON-RECEIPT OF FUNDS BY THE AGENT......................................................................43
2.24. MARKET DISRUPTION......................................................................................43
2.25. JUDGMENT CURRENCY......................................................................................44
ARTICLE III. YIELD PROTECTION; TAXES...........................................................................44
3.1. YIELD PROTECTION.......................................................................................44
3.2. CHANGES IN CAPITAL ADEQUACY REGULATIONS................................................................45
3.3. AVAILABILITY OF TYPES OF ADVANCES......................................................................45
3.4. FUNDING INDEMNIFICATION................................................................................45
3.5. TAXES..................................................................................................46
3.6. LENDER STATEMENTS; SURVIVAL OF INDEMNITY...............................................................47
3.7. REPLACEMENT OF LENDER..................................................................................48
3.8. NON-U.S. RESERVE COSTS OR FEES.........................................................................47
ARTICLE IV. CONDITIONS PRECEDENT...............................................................................48
4.1. EFFECTIVENESS..........................................................................................48
4.2. EACH CREDIT EXTENSION..................................................................................51
ARTICLE V. REPRESENTATIONS AND WARRANTIES......................................................................51
5.1. EXISTENCE AND STANDING.................................................................................51
5.2. AUTHORIZATION AND VALIDITY.............................................................................51
5.3. NO CONFLICT; GOVERNMENT CONSENT........................................................................52
5.4. SECURITY INTEREST IN COLLATERAL........................................................................52
5.5. FINANCIAL STATEMENTS...................................................................................52
5.6. MATERIAL ADVERSE CHANGE................................................................................53
5.7. TAXES..................................................................................................53
5.8. LITIGATION AND CONTINGENT OBLIGATIONS..................................................................53
5.9. CAPITALIZATION AND SUBSIDIARIES........................................................................53
5.10. ERISA..................................................................................................53
5.11. ACCURACY OF INFORMATION................................................................................54
5.12. NAMES; PRIOR TRANSACTIONS..............................................................................54
5.13. REGULATION T, U AND X..................................................................................54
5.14. MATERIAL AGREEMENTS....................................................................................54
5.15. COMPLIANCE WITH LAWS...................................................................................54
5.16. OWNERSHIP OF PROPERTIES................................................................................54
5.17. PLAN ASSETS; PROHIBITED TRANSACTIONS...................................................................54
5.18. ENVIRONMENTAL MATTERS..................................................................................55
5.19. INVESTMENT COMPANY ACT.................................................................................55
5.20. PUBLIC UTILITY HOLDING COMPANY ACT.....................................................................55
5.21. BANK ACCOUNTS..........................................................................................55
5.22. INDEBTEDNESS...........................................................................................55
5.23. AFFILIATE TRANSACTIONS.................................................................................55
5.24. SOLVENCY...............................................................................................55
5.25. COMMON ENTERPRISE......................................................................................56
5.26. REPORTABLE TRANSACTION.................................................................................56
5.27. BORROWING BASE.........................................................................................56
5.28. NO DEFAULT.............................................................................................56
5.29. INTELLECTUAL PROPERTY..................................................................................56
5.30. LABOR MATTERS..........................................................................................56
5.31. SUBORDINATED DEBT DOCUMENTS............................................................................57
5.32. FOURTH SECURED TERM LOAN DEBT DOCUMENTS................................................................57
5.33. THIRD SECURED TERM LOAN DEBT DOCUMENTS.................................................................57
5.34. SECOND SECURED DEBT DOCUMENTS..........................................................................58
ARTICLE VI. COVENANTS..........................................................................................59
6.1. FINANCIAL AND COLLATERAL REPORTING.....................................................................59
6.2. USE OF PROCEEDS........................................................................................62
6.3. NOTICES................................................................................................62
6.4. CONDUCT OF BUSINESS....................................................................................63
6.5. TAXES..................................................................................................64
6.6. PAYMENT OF INDEBTEDNESS AND OTHER LIABILITIES..........................................................64
6.7. INSURANCE..............................................................................................64
6.8. COMPLIANCE WITH LAWS...................................................................................66
6.9. MAINTENANCE OF PROPERTIES AND INTELLECTUAL PROPERTY RIGHTS.............................................66
6.10. INSPECTION.............................................................................................66
6.11. NEGATIVE PLEDGE LIMITATION.............................................................................66
6.12. COMMUNICATIONS WITH ACCOUNTANTS........................................................................67
6.13. COLLATERAL ACCESS AGREEMENTS AND REAL ESTATE PURCHASES.................................................67
6.14. DEPOSIT ACCOUNT CONTROL AGREEMENTS.....................................................................67
6.15. ADDITIONAL COLLATERAL; FURTHER ASSURANCES..............................................................67
6.16. DIVIDENDS..............................................................................................69
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6.17. INDEBTEDNESS...........................................................................................70
6.18. MERGER.................................................................................................71
6.19. SALE OF ASSETS.........................................................................................71
6.20. INVESTMENTS AND ACQUISITIONS...........................................................................72
6.21. LIENS..................................................................................................73
6.22 CHANGE OF CORPORATE NAME OR LOCATION; CHANGE OF FISCAL YEAR............................................75
6.23. AFFILIATE TRANSACTIONS.................................................................................75
6.24. AMENDMENTS TO AGREEMENTS; ETC..........................................................................76
6.25. SUBSIDIARY DIVIDENDS...................................................................................76
6.26. PAYMENTS AND MODIFICATION OF DEBT......................................................................76
6.27. FINANCIAL CONTRACTS....................................................................................77
6.28. CAPITAL EXPENDITURES...................................................................................77
6.29. MANAGEMENT FEES........................................................................................77
6.30. ADDITIONAL COVENANTS...................................................................................77
6.31. FINANCIAL COVENANTS....................................................................................77
6.31.1. Fixed Charge Coverage Ratio....................................................................77
6.31.2. Minimum Availability...........................................................................78
6.32. LENDERS AS DEPOSITORY BANKS; DOMINION OF FUNDS.........................................................78
ARTICLE VII. DEFAULTS..........................................................................................78
ARTICLE VIII. REMEDIES; WAIVERS AND AMENDMENTS.................................................................81
8.1. REMEDIES...............................................................................................81
8.2. WAIVERS BY LOAN PARTIES................................................................................82
8.3. AMENDMENTS.............................................................................................82
8.4. PRESERVATION OF RIGHTS.................................................................................84
ARTICLE IX. GENERAL PROVISIONS..................................................................................85
9.1. SURVIVAL OF REPRESENTATIONS............................................................................85
9.2. GOVERNMENTAL REGULATION................................................................................85
9.3. HEADINGS...............................................................................................85
9.4. ENTIRE AGREEMENT.......................................................................................85
9.5. SEVERAL OBLIGATIONS; BENEFITS OF THIS AGREEMENT........................................................85
9.6. EXPENSES; INDEMNIFICATION..............................................................................85
9.7. NUMBERS OF DOCUMENTS...................................................................................87
9.8. ACCOUNTING.............................................................................................87
9.9. SEVERABILITY OF PROVISIONS.............................................................................88
9.10. NONLIABILITY OF LENDERS................................................................................88
9.11. CONFIDENTIALITY........................................................................................88
9.12. NONRELIANCE............................................................................................89
9.13. DISCLOSURE.............................................................................................89
9.14. AMENDMENT AND RESTATEMENT..............................................................................89
ARTICLE X. THE AGENT............................................................................................89
10.1. APPOINTMENT; NATURE OF RELATIONSHIP....................................................................89
10.2. POWERS.................................................................................................90
10.3. GENERAL IMMUNITY.......................................................................................90
10.4. NO RESPONSIBILITY FOR CREDIT EXTENSIONS, RECITALS, ETC.................................................90
10.5. ACTION ON INSTRUCTIONS OF LENDERS......................................................................90
10.6. EMPLOYMENT OF AGENTS AND COUNSEL.......................................................................90
10.7. RELIANCE ON DOCUMENTS; COUNSEL.........................................................................91
10.8. AGENT'S REIMBURSEMENT AND INDEMNIFICATION..............................................................91
10.9. NOTICE OF DEFAULT......................................................................................91
10.10. RIGHTS AS A LENDER.....................................................................................91
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10.11. LENDER CREDIT DECISION.................................................................................92
10.12. SUCCESSOR AGENT........................................................................................92
10.13. AGENT AND ARRANGER FEES................................................................................92
10.14. DELEGATION TO AFFILIATES...............................................................................92
10.15. EXECUTION OF LOAN DOCUMENTS............................................................................93
10.16. COLLATERAL MATTERS.....................................................................................93
10.17. CO-AGENTS, DOCUMENTATION AGENT, SYNDICATION AGENT, ETC.................................................95
ARTICLE XI. SETOFF; RATABLE PAYMENTS............................................................................95
11.1. SETOFF.................................................................................................95
11.2. RATABLE PAYMENTS.......................................................................................95
ARTICLE XII. BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS.................................................95
12.1. SUCCESSORS AND ASSIGNS.................................................................................95
12.2. PARTICIPATIONS.........................................................................................96
12.3. ASSIGNMENTS............................................................................................97
12.4. DISSEMINATION OF INFORMATION...........................................................................98
12.5. TAX TREATMENT..........................................................................................98
12.6. ASSIGNMENT BY LC ISSUER................................................................................98
ARTICLE XIII. NOTICES..........................................................................................99
13.1. NOTICES; EFFECTIVENESS; ELECTRONIC COMMUNICATION.......................................................99
13.2. CHANGE OF ADDRESS.....................................................................................100
ARTICLE XIV. COUNTERPARTS......................................................................................100
ARTICLE XV. GUARANTY..........................................................................................101
15.1. GUARANTY..............................................................................................101
15.2. GUARANTY OF PAYMENT...................................................................................101
15.3. NO DISCHARGE OR DIMINISHMENT OF GUARANTY..............................................................101
15.4. DEFENSES WAIVED.......................................................................................102
15.5. RIGHTS OF SUBROGATION.................................................................................103
15.6. REINSTATEMENT; STAY OF ACCELERATION...................................................................103
15.7. INFORMATION...........................................................................................103
15.8. TERMINATION...........................................................................................103
15.9. TAXES.................................................................................................103
15.10. SEVERABILITY..........................................................................................103
15.11. CONTRIBUTION..........................................................................................104
15.12. LENDING INSTALLATIONS.................................................................................104
15.13. LIABILITY CUMULATIVE..................................................................................104
ARTICLE XVI. CHOICE OF LAW; CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL.....................................105
16.1. CHOICE OF LAW.........................................................................................105
16.2. CONSENT TO JURISDICTION...............................................................................105
16.3. WAIVER OF JURY TRIAL..................................................................................105
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PRICING SCHEDULE
EXHIBIT A BORROWING NOTICE
EXHIBIT B CONVERSION/CONTINUATION NOTICE
EXHIBIT C REVOLVING NOTE
EXHIBIT D FORM OF OPINION
EXHIBIT E COMPLIANCE CERTIFICATE
EXHIBIT F ASSIGNMENT AND ASSUMPTION AGREEMENT
EXHIBIT G BORROWING BASE CERTIFICATE
SCHEDULE 1.1 FOREIGN BORROWING SUBSIDIARIES
SCHEDULE 5.8 LITIGATION AND CONTINGENT OBLIGATIONS
SCHEDULE 5.9 CAPITALIZATION AND SUBSIDIARIES
SCHEDULE 5.12 NAMES, PRIOR TRANSACTIONS
SCHEDULE 5.16 OWNERSHIP OF PROPERTIES
SCHEDULE 5.21 BANK ACCOUNTS
SCHEDULE 5.22 INDEBTEDNESS
SCHEDULE 5.23 AFFILIATE TRANSACTIONS
SCHEDULE 5.31 SUBORDINATED DEBT DOCUMENTS
SCHEDULE 5.32 FOURTH SECURED TERM LOAN DOCUMENTS
SCHEDULE 5.33 THIRD SECURED TERM LOAN DOCUMENTS
SCHEDULE 5.34 SECOND SECURED DEBT DOCUMENTS
SCHEDULE 6.20 OTHER INVESTMENTS
SCHEDULE 6.21 LIENS
v
AMENDED AND RESTATED CREDIT AGREEMENT
This Agreement, dated as of August 1, 2003, is among MSX International,
Inc., a Delaware corporation (with its successors and assigns, the "Company"),
the other Loan Parties, the Lenders and Bank One, NA, a national banking
association having its principal office in Chicago, Illinois, as LC Issuer and
as Agent.
RECITALS
A. The Company, the other borrowers party thereto, the lenders party
thereto and Bank One, NA, as agent for such lenders, executed an Amended and
Restated Credit Agreement dated as of November 30, 1999, as amended (the
"Existing Credit Agreement"), which amended and restated an Amended and Restated
Credit Agreement dated as of April 14, 1998, as amended.
B. The Company and the other Loan Parties have requested that the
Lenders, including each Lender becoming a Lender on the date hereof, and the
Agent amend and restate the Existing Credit Agreement as herein provided, and
the Lenders and the Agent are willing to amend and restate the Existing Credit
Agreement on the terms and conditions herein set forth.
C. The Loan Parties have requested that the Lenders make available to
the Borrowers loans and letters of credit in an aggregate amount not to exceed
the U.S. dollar equivalent of $45,000,000, which extensions of credit will be
used by the Borrowers for the purposes set forth in Section 6.2.
D. The Company and the other Loan Parties have agreed to secure all of
their obligations under the Loan Documents by granting to the Agent, on behalf
of the Lenders, a security interest in and lien upon the Collateral as set forth
in the Collateral Documents.
E. The Guarantors have agreed to guarantee all of the Obligations of
the Company under the Loan Documents to the Agent and the Lenders as set forth
in the Guaranty.
In consideration of these premises and the terms and conditions set
forth in this Agreement, and for other good and valuable consideration, the
receipt of which is hereby acknowledged, the parties hereto hereby agree as
follows:
ARTICLE I
DEFINITIONS
As used in this Agreement:
"Account" shall have the meaning given to such term in the Security
Agreement.
"Account Debtor" means any Person obligated on an Account.
"Acquisition" means any transaction, or any series of related
transactions, consummated on or after the Closing Date, by which any Loan Party
(a) acquires any going business or all or substantially all of the assets of any
Person, whether through purchase of assets, merger or otherwise or (b) directly
or indirectly acquires (in one transaction or as the most recent transaction in
a series of transactions) at least a majority (in number of votes) of the
Capital Stock of a Person which has ordinary voting power for the election of
directors or other similar management personnel of a Person (other than Capital
Stock having
1
such power only by reason of the happening of a contingency) or a majority of
the outstanding Capital Stock of a Person.
"Advance" means a borrowing hereunder, (a) made by some or all of the
Lenders on the same Borrowing Date, or (b) converted or continued by the Lenders
on the same date of conversion or continuation, consisting, in either case, of
the aggregate amount of the several Loans of the same Type and, in the case of
Eurodollar Loans, for the same Interest Period. The term Advance shall include
Non-Ratable Loans, Overadvances, Protective Advances and Swingline Loans unless
otherwise expressly provided.
"Affected Lender" is defined in Section 3.7.
"Affiliate" of any Person means any other Person directly or indirectly
controlling, controlled by or under common control with such Person. A Person
shall be deemed to control another Person if the controlling Person owns 10% or
more of any class of the voting Capital Stock of the controlled Person or
possesses, directly or indirectly, the power to direct or cause the direction of
the management or policies of the controlled Person, whether through ownership
of Voting Stock, by contract or otherwise.
"Agent" means Bank One in its capacity as contractual representative of
the Lenders pursuant to Article X, and not in its individual capacity as a
Lender, and any successor Agent appointed pursuant to Article X.
"Aggregate Commitment" means the aggregate of the Commitments of all
the Lenders, as reduced from time to time pursuant to the terms hereof, which
Aggregate Commitment shall initially be in the amount of $45,000,000.
"Aggregate Credit Exposure" means, at any time, the aggregate Credit
Exposure of all the Lenders.
"Agreement" means this Credit Agreement, as it may be amended or
modified and in effect from time to time.
"Alternate Base Rate" means, for any day, a rate of interest per annum
equal to the higher of (a) the Prime Rate for such day and (b) the sum of the
Federal Funds Effective Rate for such day plus 1/2% per annum.
"Applicable Fee Rate" means, at any time, the percentage rate per annum
at which fees accrue on Available Commitment at such time as set forth in the
Pricing Schedule.
"Applicable Margin" means, with respect to Advances of any Type at any
time, the percentage rate per annum which is applicable at such time with
respect to Advances of such Type as set forth in the Pricing Schedule.
"Approved Fund" means any Fund that is administered or managed by (a) a
Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an
entity that administers or manages a Lender.
"Arranger" means Banc One Capital Markets, Inc., a Delaware
corporation, and its successors, in its capacity as Lead Arranger and Sole Book
Runner.
"Article" means an article of this Agreement unless another document is
specifically referenced.
2
"Assignment Agreement" is defined in Section 12.3(a).
"Authorized Officer" means any of the chief executive officer,
president, any vice president, the treasurer, assistant treasurer, secretary or
assistant secretary of the Company, acting singly.
"Availability" means, at any time, an amount equal to the lesser of (a)
the Aggregate Commitment and (b) the Borrowing Base, in each case, minus the
Aggregate Credit Exposure.
"Available Commitment" means, at any time, the Aggregate Commitment
then in effect minus the Aggregate Credit Exposure at such time.
"Bank One" means Bank One, NA, a national banking association, in its
individual capacity, and its successors.
"Banking Services" means each and any of the following bank services
provided to any Loan Party or any of their Subsidiaries by Bank One or any of
its Affiliates: (a) commercial credit cards, (b) stored value cards and (c)
treasury management services (including, without limitation, controlled
disbursement, automated clearinghouse transactions, return items, overdrafts and
interstate depository network services).
"Banking Services Obligations" of the Loan Parties and their
Subsidiaries means any and all obligations of the Loan Parties and their
Subsidiaries, whether absolute or contingent and howsoever and whensoever
created, arising, evidenced or acquired (including all renewals, extensions and
modifications thereof and substitutions therefor) in connection with Banking
Services.
"Banking Services Reserves" means all Reserves which the Agent from
time to time establishes in its Permitted Discretion for Banking Services then
provided or outstanding.
"Bankruptcy Code" means Title 11 of the U.S. Code (11 U.S.C. Section
101 et seq.) as amended, reformed, or otherwise modified from time to time, and
any rule or regulation issued thereunder.
"Board of Directors" means the Board of Directors of the Company, or
any authorized committee of the Board of Directors.
"Borrowers" means the Company and the Foreign Borrowing Subsidiaries.
"Borrowing Base" means, at any time, the sum of the U.K. Borrowing Base
and the U.S. Borrowing Base.
"Borrowing Base Availability Deficiency Event" means any date in any
month on which the Global Borrowing Base Availability shall fail to be equal to
or greater than $25,000,000 and (a) such failure shall remain unremedied for
five consecutive Business Days or (b) such date is at least six Business Days
after a date in such month on which the Global Borrowing Base Availability was
less than $25,000,000 (the "Second Deficiency Date") and such Second Deficiency
Date was also at least six Business Days after a date in such month on which the
Global Borrowing Base Availability was less than $25,000,000; provided that, if
it is determined that such a date exists, the Agent shall re-calculate the
Global Borrowing Base Availability using the actual amount of Swingline Loans
outstanding in place of the Swingline Reserve, and a Borrowing Base Availability
Deficiency Event shall not be deemed to have occurred if the foregoing
conditions for a Borrowing Base Availability Deficiency Event would not be
satisfied based on such re-calculation. References in this definition to
$25,000,000 shall be deemed $20,000,000 for purposes of Section 6.31.1.
3
"Borrowing Base Certificate" means a certificate, signed by an
Authorized Officer of the Company, substantially in the form of Exhibit G or
another form which is acceptable to the Agent in its sole discretion.
"Borrowing Date" means a date on which an Advance or a Loan is made
hereunder.
"Borrowing Notice" is defined in Section 2.1.1(b).
"Business Day" means (a) with respect to any borrowing, payment or rate
selection of Eurodollar Advances, a day (other than a Saturday or Sunday) on
which banks generally are open in Chicago, Detroit and New York City for the
conduct of substantially all of their commercial lending activities, interbank
wire transfers can be made on the Fedwire system and dealings in Dollars are
carried on in the London interbank market (and, if the Advances which are the
subject of such borrowing, payment or rate selection are owing by a Foreign
Subsidiary Borrower, a day upon which such clearing system as is determined by
the Agent to be suitable for clearing or settlement of the applicable Permitted
Currency is open for business), and (b) for all other purposes, a day (other
than a Saturday or Sunday) on which banks generally are open in Chicago, Detroit
and New York City for the conduct of substantially all of their commercial
lending activities and interbank wire transfers can be made on the Fedwire
system.
"Capital Expenditures" means for any period all direct or indirect (by
way of acquisition of securities of a Person or the expenditure of cash or the
transfer of property or the incurrence of Indebtedness) expenditures in respect
of the purchase or other acquisition of fixed or capital assets determined in
conformity with GAAP.
"Capital Stock" means (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.
"Capitalized Lease" of a Person means any lease of Property by such
Person as lessee which would be capitalized on a balance sheet of such Person
prepared in accordance with GAAP.
"Capitalized Lease Obligations" of a Person means the aggregate amount
of the obligations of such Person under Capitalized Leases which would be shown
as a liability on a balance sheet of such Person prepared in accordance with
GAAP.
"Cash Equivalent Investments" means (i) cash in Dollars or, so long as
not held for speculative purposes, any Eligible Currency, (ii) securities issued
or directly and fully guaranteed or insured by (a) the U.S. or any agency or
instrumentality thereof, (b) the U.K., the Netherlands or Australia or any
agency or instrumentality thereof if the Agent determines that such securities
are freely tradable in a recognized national market with sufficient liquidity,
or (c) any other member state of the European Union or any other sovereign
nation or any agency or instrumentality thereof if acceptable to the Agent, in
each of the foregoing cases having maturities of not more than six months from
the date of acquisition, (iii) marketable direct obligations issued by any state
of the U.S. 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
4
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 or foreign commercial bank or U.S. branch
of a foreign bank licensed under the laws of the United States or a State
thereof having capital and surplus in excess of $250,000,000 and a Xxxxx Bank
Watch Rating of "B" or better or the equivalent rating from comparable foreign
rating agencies, and certificates of deposit and time deposits with maturities
of one month or less from the date of acquisition and overnight bank deposits
with reputable foreign commercial banks, (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 or the
equivalent ratings from comparable foreign rating agencies 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 (vi) above.
"Change of Control" means the occurrence of any of the following:
(i) prior to the first public offering of Voting Stock of the Company
or the U.K. Borrower, as applicable, the Permitted Investors cease to be
entitled (by "beneficial ownership" (as defined in Rules 13d-3 and 13d-5 under
the Exchange Act) of Voting Stock, contract or otherwise) to elect or cause the
election of directors having, a majority in the aggregate of the total voting
power of the Board of Directors, whether as a result of issuance of securities
of the Company or the U.K. Borrower, as applicable, any merger, consolidation,
liquidation or dissolution of the Company or the U.K. Borrower, as applicable,
any direct or indirect transfer of securities by the Permitted Investors or
otherwise (for purposes of this clause (i) and clause (ii) below, the Permitted
Investors shall be deemed to beneficially own any Voting Stock of any entity
(the "specified entity") held by any other entity (the "parent entity") so long
as the Permitted Investors beneficially own (as so defined), directly or
indirectly, in the aggregate a majority of the voting power of the Voting Stock
of the parent entity);
(ii) after the first public offering of Voting Stock of the Company or
the U.K. Borrower, as applicable, any "person" (as such term is used in Sections
13(d) and 14(d) of the Exchange Act), other than one or more Permitted Holders,
is or becomes the beneficial owner (as defined in clause (i) above, except that
for purposes of this clause (ii) such person shall be deemed to have "beneficial
ownership" of all shares that any such person has the right to acquire, directly
or indirectly), of more than 35% of the total voting power of the Voting Stock
of the Company or the U.K. Borrower, as applicable, and either (x) the Permitted
Holders beneficially own (as defined in clause (i) above) directly or
indirectly, in the aggregate a lesser percentage of the total voting power of
the Voting Stock of the Company or the U.K. Borrower, as applicable, than such
other person and do not have the right or ability by voting power, contract or
otherwise to elect or designate for election a majority of the Board of
Directors of the Company or the U.K. Borrower, as applicable, or (y) such other
person is entitled to elect directors having a majority of the total voting
power of the Board of Directors of the Company or the U.K. Borrower, as
applicable;
(iii) during any period of not greater than two consecutive years
beginning after the Closing Date, individuals who at the beginning of such
period constituted the Board of Directors of the Company or the U.K. Borrower,
as applicable (together with any new directors whose election by such Board of
Directors or whose nomination for election by the shareholders of the Company or
the U.K. Borrower, as applicable, was approved by a vote of a majority of the
directors of the Company or the U.K. Borrower, as applicable, then still in
office who were either directors at the beginning of such period or whose
5
election or nomination for election was previously so approved) cease for any
reason to constitute a majority of the Board of Directors of the Company or the
U.K. Borrower, as applicable, then in office;
(iv) any "Change of Control" or similar term, as defined in the
Subordinated Note Indenture; or
(v) any "Change of Control" or similar term, as defined in the Second
Secured Note Indenture; or
(vi) any "Change of Control" or similar term, as defined in the Third
Secured Term Loan Agreement; or
(vii) any "Change of Control" or similar term, as defined in the Fourth
Secured Term Loan Agreement.
"Closing Date" means the date of this Agreement.
"Code" means the Internal Revenue Code of 1986, as amended, reformed or
otherwise modified from time to time, and any rule or regulation issued
thereunder.
"Collateral" means any and all Property covered by the Collateral
Documents and any and all other property, real or personal, tangible or
intangible of any Loan Party, now existing or hereafter acquired, that may at
any time be or become subject to a security interest or Lien in favor of Agent,
on behalf of itself and the Lenders, to secure the Secured Obligations.
"Collateral Access Agreement" means any agreement, in form and
substance satisfactory to the Agent, between the Agent and any third party
(including any bailee, consignee, customs broker, or other similar Person) in
possession of any Collateral or any landlord of any Loan Party for any real
Property where any Collateral is located, as such agreement may be amended,
restated, or otherwise modified from time to time.
"Collateral Documents" means, collectively, the Security Agreements and
any other documents granting a Lien upon the Collateral as security for payment
of the Secured Obligations.
"Collateral Shortfall Amount" is defined in Section 2.1.2(l).
"Commitment" means, for each Lender, the obligation of such Lender to
make Revolving Loans to, and participate in Facility LCs, Overadvances,
Protective Advances, Non-Ratable Loans and Swingline Loans issued or made upon
the application of a Borrower in an aggregate amount not exceeding the amount
set forth in the Commitment Schedule or as set forth in any Assignment Agreement
that has become effective pursuant to Section 12.3(a), as such amount may be
modified from time to time pursuant to the terms hereof.
"Commitment Schedule" means the Schedule attached hereto identified as
such.
"Compliance Certificate" is defined in Section 6.1(e).
"Company" is defined in the recitals to this Agreement.
"Consolidated Capital Expenditures" means, with reference to any
period, the Capital Expenditures of the Company and its Subsidiaries calculated
on a consolidated basis for such period.
6
"Consolidated Interest Expense" means, 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
GAAP, 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 interest rate
hedging, cap or similar agreement or arrangement, prepayment charges, agency
fees, administrative fees, facility fees and capitalized transaction costs
allocated to interest expense, but excluding any interest which is accrued or
paid in kind with the issuance of additional securities and not paid or required
to be paid in cash or cash equivalents) 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 GAAP; provided that interest expense for the Second Secured
Notes shall not be counted on a pro forma basis and shall be based on actual
interest accrued on and after the Closing Date.
"Consolidated Net Income" means, 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 GAAP;
provided that in determining Net Income there shall be excluded, without
duplication: (a) the income (or loss) 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, unless such income is calculated on a pro forma basis
acceptable to the Agent in accordance with Section 9.8, in which case such
income shall not be excluded from Net Income, (c) the net proceeds of any
insurance policy, (d) gains (or non cash 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 GAAP, (e) any other extraordinary or non-recurring gains (or non
cash losses) of the Company or its Subsidiaries, and related tax effects in
accordance with GAAP, and (f) 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.
"Contingent Obligation" of a Person means any agreement, undertaking or
arrangement by which such Person assumes, guarantees, endorses, contingently
agrees to purchase or provide funds for the payment of, or otherwise becomes or
is contingently liable upon, the obligation or liability of any other Person, or
agrees to maintain the net worth or working capital or other financial condition
of any other Person, or otherwise assures any creditor of such other Person
against loss, including, without limitation, any comfort letter, operating
agreement, take-or-pay contract or the obligations of any such Person as general
partner of a partnership with respect to the liabilities of the partnership. The
amount of any Contingent Obligation shall be deemed to be an amount equal to the
stated or determinable amount of the primary obligation in respect of which such
Contingent Obligation 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.
"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.
7
"Controlled Group" means all members of a controlled group of
corporations or other business entities and all trades or businesses (whether or
not incorporated) under common control which, together with the Company or any
of its Subsidiaries, are treated as a single employer under Section 414 of the
Code.
"Conversion/Continuation Notice" is defined in Section 2.7.
"Credit Exposure" means, as to any Lender at any time, the sum of (a)
the aggregate principal amount of its Revolving Loans outstanding at such time,
plus (b) an amount equal to its Pro Rata Share of any LC Obligations at such
time, plus (c) an amount equal to its Pro Rata Share of the aggregate principal
amount of Non-Ratable Loans, Overadvances, Protective Advances and Swingline
Loans outstanding at such time.
"Credit Extension" means the making of an Advance or the issuance of a
Facility LC hereunder.
"Credit Extension Date" means the Borrowing Date for an Advance or the
issuance date for a Facility LC.
"CSCL" means Court Square Capital Limited, a Delaware corporation.
----
"CVC" means Citicorp Venture Capital, Ltd., a New York corporation.
---
"CVC Investor" means (i) CVC, (ii) Citigroup Inc. and (iii) any
officer, employee, or director of CVC so long as such person shall be an
employee, officer or director of CVC.
"Default" means an event described in Article VII.
"Defaulting Lender" means 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.
"Deposit Account Control Agreement" means an agreement, in form and
substance satisfactory to the Agent, among any Loan Party, a banking institution
holding such Loan Party's funds, and the Agent with respect to collection and
control of all deposits and balances held in a deposit account maintained by any
Loan Party with such banking institution.
"Disqualified Stock" means 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 prior to a date one year
after the Termination Date.
"Dollar Amount" of any currency at any date means (i) the amount of
such currency if such currency is Dollars or (ii) the equivalent in Dollars of
such amount if such currency is any currency other than Dollars, calculated on
the basis of the arithmetical mean of the buy and sell spot rates of exchange of
the Agent for such currency on the London market at 11:00 a.m., London time, on
or as of such date.
"Dollars" and "$" means the lawful currency of the United States of
America.
8
"Domestic Subsidiary" means any present and future Subsidiary which is
organized under the laws of the U.S. or any state or other political subdivision
of the U.S. or any such state.
"Earn Out Payments" is defined in clause (t) of Article VII.
"EBITDA" means, for any period, Consolidated Net Income for such
period, plus all amounts deducted in determining such Consolidated Net Income on
account of (i) Consolidated Interest Expense, (ii) income taxes (including the
Michigan Single Business tax and the Imposta Reginole Sulle Attivita Producttive
in Italy), (iii) depreciation and amortization expense, and (iv) any verifiable
severance costs incurred during Fiscal Year 2003 in a cumulative aggregate
amount not to exceed $2,000,000, all as determined for the Company and its
Subsidiaries on a consolidated basis in accordance with GAAP.
"Eligible Accounts" means, as of any date, the Accounts of the
Company, the U.K. Borrower and the Guarantors which the Agent determines in its
Permitted Discretion are eligible as the basis for Credit Extensions hereunder.
Without limiting the Agent's discretion provided herein, Eligible Accounts shall
not include any Account:
(a) which is not subject to a first priority perfected
security interest in favor of the Agent;
(b) which is subject to any Lien other than (i) a Lien in
favor of the Agent and (ii) a Permitted Lien which is junior to the
Lien in favor of the Agent;
(c) with respect to which more than 90 days have elapsed since
the date of the invoice therefor;
(d) which is owing by an Account Debtor for which more than
50% of the Accounts owing from such Account Debtor and its Affiliates
are ineligible hereunder;
(e) which is owing by an Account Debtor to the extent the
aggregate amount of Accounts owing from such Account Debtor and its
Affiliates to the Company exceeds 25% (or 55% (or such lesser
percentage determined at any time by the Agent in its Permitted
Discretion) in the case of Ford Motor Company) of the aggregate
Eligible Accounts or Eligible Unbilled Accounts;
(f) with respect to which any covenant, representation, or
warranty contained in this Agreement or in the Security Agreement has
been breached or is not true;
(g) which (i) does not arise from the sale of goods or
performance of services in the ordinary course of business, (ii) is not
evidenced by an invoice or other documentation satisfactory to the
Agent as determined in its Permitted Discretion, which has been sent to
the Account Debtor, (iii) represents a progress billing, (iv) is
contingent upon the Company's completion of any further performance,
(v) is a dated Account (meaning any account due on a date more than 30
days after the original issuance of the related invoice or on other
customary terms consistent with past practice and approved by the
Agent's collateral auditors), or (vi) represents a sale on a
xxxx-and-hold, guaranteed sale, sale-and-return, sale on approval,
consignment, cash-on-delivery or any other repurchase or return basis;
9
(h) for which the goods giving rise to such Account have not
been shipped to the Account Debtor or for which the services giving
rise to such Account have not been performed by the Company or xxxxxxxx
in excess of costs;
(i) with respect to which any check or other instrument of
payment has been returned uncollected for any reason;
(j) which is owed by an Account Debtor which has (i) applied
for, suffered, or consented to the appointment of any receiver,
custodian, trustee, or liquidator of its assets, (ii) has had
possession of all or a material part of its property taken by any
receiver, custodian, trustee or liquidator, (iii) filed, or had filed
against it, any Insolvency Proceeding, (iv) has admitted in writing its
inability, or is generally unable to, pay its debts as they become due,
(v) become insolvent, or (vi) ceased operation of its business;
(k) which is owed by any Account Debtor that the Company or
any of its Subsidiaries knows has sold all or a substantially all of
its assets;
(l) which is owed by an Account Debtor which (i) does not
maintain its chief executive office in the U.S. or Canada or (ii) is
not organized under applicable law of the U.S. or any state of the U.S.
or Canada or any province of Canada unless, in any case, such Account
is backed by a Letter of Credit acceptable to the Agent as determined
in its Permitted Discretion which is in the possession of the Agent,
provided that Accounts of the U.K. Borrower do not need to meet the
foregoing requirements of this clause (l), but do need to be owing by
an Account Debtor located in a jurisdiction satisfactory to the Agent
as determined in its Permitted Discretion;
(m) which is owed in any currency other than Dollars, Euro,
the Danish krone, the Norwegian krone and the Swedish krona or, if
approved by the Agent, as determined in its Permitted Discretion an
Eligible Currency;
(n) which is owed by (i) the government (or any department,
agency, public corporation, or instrumentality thereof) of any country
other than the U.S. unless such Account is backed by a Letter of Credit
acceptable to the Agent as determined in its Permitted Discretion which
is in the possession of the Agent, or (ii) the government of the U.S.,
or any department, agency, public corporation, or instrumentality
thereof, unless the Federal Assignment of Claims Act of 1940, as
amended (31 U.S.C. Section 3727 et seq. and 41 U.S.C. Section 15 et
seq.), and any other steps necessary to perfect the Lien of the Agent
in such Account have been complied with to the Agent's satisfaction as
determined in its Permitted Discretion;
(o) which is owed by any Affiliate, employee, or director of
any Loan Party;
(p) which, for any Account Debtor, exceeds a credit limit
determined by the Agent and for which the Agent has notified the
Company, to the extent of such excess;
(q) which is owed by an Account Debtor or any Affiliate of
such Account Debtor to which any Loan Party is indebted, but only to
the extent of such indebtedness;
(r) which is subject to any counterclaim, deduction, defense,
setoff, dispute, contra-account, chargeback, allowance, credit,
discount or similar claim, but only to the extent thereof;
(s) which is evidenced by any promissory note, chattel paper,
or instrument;
(t) which is owed by an Account Debtor located in any
jurisdiction which requires filing of a "Notice of Business Activities
Report" or other similar report in order to permit the
10
Company to seek judicial enforcement in such jurisdiction of payment of
such Account, unless the Company has filed such report or qualified to
do business in such jurisdiction;
(u) with respect to which the Company has made any agreement
with the Account Debtor for any reduction thereof, other than discounts
and adjustments given in the ordinary course of business, but only to
the extent of such reduction;
(v) which represents an account arising from a fixed price
contract that is not completed; or
(w) which the Agent determines in its Permitted Discretion may
not be paid by reason of the Account Debtor's inability to pay or which
the Agent otherwise determines in its Permitted Discretion is
unacceptable for any reason whatsoever.
In the event that an Account which was previously an Eligible Account ceases to
be an Eligible Account hereunder and the Borrower has knowledge thereof, the
Borrower shall notify the Agent thereof (i) within three (3) Business Days of
the date the Borrower has obtained knowledge thereof if any such Account is in
excess of $500,000 in the aggregate and (ii) on and at the time of submission to
the Agent of the next Borrowing Base Certificate in all other cases.
"Eligible Currency" means the Euro, Pounds Sterling, Australian Dollars
and any other currency (other than Dollars) which is approved and designated as
an Eligible Currency by the Agent, provided that each of the foregoing
currencies is and remains readily available, freely traded, in which deposits
are customarily offered to banks in the London interbank market, convertible
into Dollars in the international interbank market and as to which the Dollar
Amount may be readily calculated. If, after the designation of any currency as
an Eligible Currency, currency control or other exchange regulations are imposed
in the country in which such currency is issued with the result that different
types of such currency are introduced, or such country's currency is, in the
determination of the Agent, no longer readily available or freely traded or as
to which, in the determination of the Agent, a Dollar Amount is not readily
calculable, then the Agent shall promptly notify the Company and such country's
currency shall no longer be an Eligible Currency until such time as the Agent
agrees to reinstate such country's currency as an Eligible Currency and
promptly, but in any event within five (5) Business Days of receipt of such
notice from the Agent, the Borrower with respect to such Currency shall repay
all Loans in such affected currency or convert such Loans into Loans in Dollars
or an Eligible Currency, as applicable, subject to the other terms contained in
this Agreement.
"Eligible Unbilled Receivables" means, as of any date, those
obligations owing the Company, the U.K. Borrower or any Guarantor which would
constitute an Eligible Account Receivable (valued at the Dollar Amount thereof)
but for the fact that an invoice has not been sent by the Company or such
Guarantor, provided that each of the following conditions is satisfied for each
such obligation: (a) such obligation is covered under a written work order or
other agreement between the Company or such Guarantor and the Person owing such
obligation, including price verification, which is binding and enforceable on
such Person to pay such obligation, (b) such obligation has not been classified
as an Eligible Unbilled Receivable for more than 30 days and (c) such obligation
is not at any time otherwise deemed by the Agent (acting in a commercially
reasonable manner) to be ineligible.
"Environmental Laws" means any and all federal, state, local and
foreign statutes, laws, judicial decisions, regulations, ordinances, rules,
judgments, orders, decrees, plans, injunctions, permits, concessions, grants,
franchises, licenses, agreements and other governmental restrictions relating to
(a) the protection of the environment, (b) emissions, discharges or releases of
pollutants, contaminants,
11
hazardous substances or wastes into surface water, ground water or land, or (c)
the manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of pollutants, contaminants, hazardous substances or
wastes or the clean-up or other remediation thereof.
"Equipment" has the meaning specified in the Security Agreement.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and any rule or regulation issued thereunder.
"Euro" and/or "EUR" means the euro referred to in Council Regulation
(EC) No. 1103/97 dated June 17, 1997 passed by the Council of the European
Union, or, if different, the then lawful currency of the member states of the
European Union that participate in the third stage of Economic and Monetary
Union.
"Eurodollar Advance" means an Advance which, except as otherwise
provided in Section 2.12, bears interest at the applicable Eurodollar Rate.
"Eurodollar Base Rate" means, with respect to a Eurodollar Advance for
the relevant Interest Period, the applicable British Bankers' Association LIBOR
rate for deposits in Dollars as reported by any generally recognized financial
information service as of 11:00 a.m. (London time) two Business Days prior to
the first day of such Interest Period, and having a maturity equal to such
Interest Period, provided that, if no such British Bankers' Association LIBOR
rate is available to the Agent, the applicable Eurodollar Base Rate for the
relevant Interest Period shall instead be the rate determined by the Agent to be
the rate at which Bank One or one of its Affiliate banks offers to place
deposits in Dollars with first-class banks in the interbank market at
approximately 11:00 a.m. (London time) two Business Days prior to the first day
of such Interest Period, in the approximate amount of Bank One's relevant
Eurodollar Loan and having a maturity equal to such Interest Period.
"Eurodollar Loan" means a Loan which, except as otherwise provided in
Section 2.12, bears interest at the applicable Eurodollar Rate.
"Eurodollar Rate" means, with respect to a Eurodollar Advance for the
relevant Interest Period, the sum of (a) the quotient of (i) the Eurodollar Base
Rate applicable to such Interest Period, divided by (ii) one minus the Reserve
Requirement (expressed as a decimal) applicable to such Interest Period, plus
(b) the Applicable Margin.
"Exchange Rate Management Obligations" of a Person means all Rate
Management Obligations of such Person with respect to all Exchange Rate
Management Transactions of such Person.
"Exchange Rate Management Transaction" means any transaction (including
an agreement with respect thereto) now existing or hereafter entered by any Loan
Party which is a foreign exchange transaction, currency swap transaction,
cross-currency rate swap transaction, currency option or any other similar
transaction (including any option with respect to any of these transactions) or
any combination thereof, linked to one or more foreign currencies.
"Excluded Taxes" means, in the case of each Lender or applicable
Lending Installation and the Agent, taxes imposed on its overall revenue or net
income, and franchise taxes imposed on it, by (a) the jurisdiction under the
laws of which such Lender or the Agent is incorporated or organized or (b) the
jurisdiction in which the Agent's or such Lender's principal executive office or
such Lender's applicable Lending Installation is located.
12
"Exhibit" refers to an exhibit to this Agreement, unless another
document is specifically referenced.
"Existing Credit Agreement" is defined in the recitals to this
Agreement.
"Facility" means the credit facility described in Section 2.1 hereof to
be provided to the Company on the terms and conditions set forth in this
Agreement.
"Facility LC" is defined in Section 2.1.2(a). It is acknowledged and
agreed that all Letters of Credit (as defined in the Existing Credit Agreement)
outstanding under the Existing Credit Agreement shall be deemed Facility LC's
hereunder and outstanding under this Agreement.
"Facility LC Application" is defined in Section 2.1.2(c).
"Facility LC Collateral Account" is defined in Section 2.1.2(j).
"Federal Funds Effective Rate" means, 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 10:00 a.m. (Chicago
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.
"Financial Contract" of a Person means (a) any exchange-traded or
over-the-counter futures, forward, swap or option contract or other financial
instrument with similar characteristics, or (b) any Rate Management Transaction.
"Fiscal Month" means any of the twelve monthly accounting periods of
the Company in each Fiscal Year.
"Fiscal Quarter" means any of the quarterly accounting periods of the
Company, ending on the 13th, 26th and 39th Sunday after the end of the
immediately preceding Fiscal Year and on the last day of the Fiscal Year.
"Fiscal Year" means any of the annual accounting periods of the Company
ending December 28, 2003, January 2, 2005, January 1, 2006, December 31, 2006 or
any each fiscal year thereafter.
"Fixed Charge Coverage Ratio" means, the ratio, determined as of the
end of each Fiscal Quarter of the Company for the then most-recently ended four
Fiscal Quarters, of (a) EBITDA minus Consolidated Capital Expenditures to (b)
Fixed Charges, all calculated for the Company and its Subsidiaries on a
consolidated basis.
"Fixed Charges" means, for any period, the sum, without duplication, of
(a) Consolidated Interest Expense, excluding (to the extent included in
Consolidated Interest Expense) any non-cash amounts attributable to amortization
of financing costs paid in previous periods and non-cash amounts attributable to
amortization of debt discounts or accrued interest payable in kind (and not
payable in cash or cash equivalents), plus (b) all payments of principal and
other sums scheduled to be paid during such period by the Company or its
Subsidiaries with respect to Indebtedness of the Company or its Subsidiaries,
plus (c) all dividends, distributions and other obligations paid (other than
those paid with common stock) with
13
respect to any class of the Company's Capital Stock or any dividend, payment or
distribution paid (other than those paid with common stock) in connection with
the redemption, purchase, retirement or other acquisition, directly or
indirectly, of any shares of the Company's Capital Stock, plus (d) all accrued
income taxes (including the Michigan Single Business tax and the Imposta
Reginole Sulle Attivita Producttive in Italy) for such period for the Company or
its Subsidiaries (but excluding all deferred income taxes unless paid or payable
in such period).
"Fixture" has the meaning specified in the Security Agreement.
"Flex-Pricing Provision" means any term or provision of any fee letter,
commitment letter or term sheet delivered in connection with the transaction
which is the subject of this Agreement which purports to permit the Agent or the
Arranger to change any or all of the structure, terms or pricing of the credit
facility evidenced by this Agreement either before or after the closing of this
Agreement in order to allow the Agent and/or Arranger to successfully syndicate
such credit facility either before or after the closing of this Agreement.
"Floating Rate" means, for any day, a rate per annum equal to (a) the
Alternate Base Rate for such day plus (b) the Applicable Margin, in each case
changing when and as the Alternate Base Rate changes.
"Floating Rate Advance" means an Advance which, except as otherwise
provided in Section 2.12, bears interest at the Floating Rate.
"Floating Rate Loan" means a Loan which, except as otherwise provided
in Section 2.12, bears interest at the Floating Rate.
"Foreign Borrowing Subsidiary" means each Subsidiary listed as a
Foreign Borrowing Subsidiary in Schedule 1.1 as amended from time to time in
accordance with Section 8.3.
"Foreign Subsidiary" means any Subsidiary which is not a Domestic
Subsidiary.
"Fourth Secured Term Loan Debt" means the Fourth Secured Term Loan and
all other current and future obligations and liabilities owing pursuant to the
Fourth Secured Term Loan Debt Documents and any extensions, refinancings,
renewals or refundings thereof and any increases in the amount thereof.
"Fourth Secured Term Loan Agreement" means the Amended and Restated
Fourth Secured Term Loan Agreement between the Company, the U.K. Borrower and
the Fourth Secured Term Loan Lender dated as of the date hereof, as amended or
modified from time to time.
"Fourth Secured Term Loan Debt Documents" means the Fourth Secured Term
Loan Agreement and all agreements, instruments and documents executed in
connection therewith or otherwise in connection with the Fourth Secured Term
Loan at any time.
"Fourth Secured Term Loan" means the term loan in the principal amount
of up to $17,084,162.13 made under the Fourth Secured Term Loan Agreement.
"Fourth Secured Term Loan Lender" means CSCL.
"Fund" means any Person (other than a natural person) that is (or will
be) engaged in making, purchasing, holding or otherwise investing in commercial
loans and similar extensions of credit in the ordinary course of its business.
14
"Funding Account" is defined in Section 2.5.
"GAAP" means generally accepted accounting principles as in effect from
time to time in the U.S. and, when used in connection with determining the Fixed
Charge Coverage Ratio (including defined terms used therein), applied in a
manner consistent with that used in preparing the financial statements referred
to in Section 5.5.
"Global Borrowing Base Availability" means, at any time, an amount
equal to (a) the sum of the U.S. Borrowing Base plus the U.K. Borrowing Base -
Unlimited, minus (b) the Aggregate Credit Exposure, excluding all Credit
Exposure with respect to Swingline Loans.
"Guaranteed Obligations" is defined in Section 15.1.
"Guarantor" means
(a) with respect to the Secured Obligations of each Foreign Borrowing
Subsidiary:
(i) the Company,
(ii) each present and future Domestic Subsidiary of the
Company,
(iii) each "Subsidiary Guarantor" as defined in the
Subordinated Debt Documents or any other guarantor with respect to any
Subordinated Debt at any time,
(iv) each "Subsidiary Guarantor" or "Guarantor" as defined in
the Second Secured Debt Documents, the Third Secured Term Loan Agreement or the
Fourth Secured Term Loan Agreement or any other guarantor with respect to any
Second Secured Notes, Third Secured Term Loan Debt or Fourth Secured Term Loan
Debt at any time,
(v) additionally, in the case of each Foreign Borrowing
Subsidiary, each parent corporation of such Foreign Subsidiary Borrower and
Subsidiary of such Foreign Subsidiary Borrower or parent in the same
jurisdiction of such Foreign Borrowing Subsidiary and, to the extent permitted
by applicable law, the U.K. Borrower and the other Guarantors with respect to
the U.K. Borrower and any other Foreign Subsidiary requested by the Agent, and
(vi) any other Person executing a Guaranty at any time with
respect to the Secured Obligations of such Foreign Borrowing Subsidiary.
(b) with respect to the Secured Obligations of the Company:
(i) each present and future Domestic Subsidiary of the
Company,
(ii) each "Subsidiary Guarantor" as defined in the
Subordinated Debt Documents or any other guarantor with respect to any
Subordinated Debt at any time, and
(iii) each "Subsidiary Guarantor" as defined in the Second
Secured Debt Documents, the Third Secured Term Loan Agreement or the Fourth
Secured Term Loan Agreement or any other guarantor with respect to the
obligations of the Company under any Second Secured Notes, Third Secured Term
Loan Debt or Fourth Secured Term Loan Debt at any time,
15
(iv) any other Person executing a Guaranty at any time with
respect to the Secured Obligations of the Company.
"Guaranty" means Article XV of this Agreement, as it may be amended or
modified and in effect from time to time.
"Indebtedness" of a Person means as of any date, without duplication,
such Person's (i) obligations for borrowed money, (ii) obligations representing
the deferred purchase price of Property or services (other than accounts payable
arising in the ordinary course of such Person's business payable on terms
customary in the trade), (iii) obligations, whether or not assumed, secured by
Liens or payable out of the proceeds or production from Property now or
hereafter owned or acquired by such Person, (iv) obligations which are evidenced
by notes, acceptances, or other instruments, (v) obligations of such Person to
purchase securities or other Property arising out of or in connection with the
sale of the same or substantially similar securities or Property, (vi)
Capitalized Lease Obligations, and (vii) other obligations for borrowed money or
other financial accommodation or similar obligation which in accordance with
GAAP would be shown as a liability on the consolidated balance sheet of such
Person, (viii) Off Balance Sheet Liabilities, based on the aggregate outstanding
amount as if such transaction were structured as an on balance sheet financing,
whether or not shown as a liability on a consolidated balance sheet of the
Company and its Subsidiaries, (ix) the undrawn amount of any Letter of Credit
issued for the account of such person and all amounts drawn under any such
Letters of Credit which have not been reimbursed by such Person and (x) any
Contingent Obligations of any such Person. The amount of any Contingent
Obligation shall be deemed to be an amount equal to the maximum stated or
determinable amount of the primary obligation in respect of which such
Contingent Obligation is made (or, if less, the maximum amount of such primary
obligation for which such Person may be liable pursuant to the terms of the
instrument evidencing such Contingent Obligation) 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 and acceptable to the Agent.
"Insolvency Proceeding" means, with respect to any Person, any case or
other proceeding of any kind, whether voluntary or involuntary, of with respect
to such Person or any material portion of its Property at any time under any
bankruptcy, insolvency, reorganization, liquidation, adjustment or composition
of it or its debts under any law, rule or regulation relating to bankruptcy,
insolvency or reorganization or relief of debtors, or any other similar
proceeding relating to any bankruptcy, insolvency or similar actions, in any
case whether under any federal or state law, rule or regulation or other law,
rule or regulation in the United States (including without limitation the
Bankruptcy Code) or any non-United States law, rule or regulation or otherwise,
or appointing a receiver, trustee, examiner, liquidator or similar official for
such Person or any material portion of any of its Property.
"Intercompany Notes" is defined in Section 6.17.
"Intercreditor Agreement" means the Intercreditor Agreement among the
Company, the Guarantors, the Agent, the trustee for the holders of the Second
Secured Debt, the Third Secured Term Loan Lender and the Fourth Secured Term
Loan Lender dated as of the date hereof, as amended or modified from time to
time.
"Interest Period" means, with respect to a Eurodollar Advance, a period
of one, two, three or six months commencing on a Business Day selected by the
Borrower pursuant to this Agreement; provided, however, notwithstanding anything
in this Agreement to the contrary and only at the Agent's sole option, for the
period from the date of this Agreement to the earlier of (i) the date that is
120 days after the Closing Date and (ii) the date upon which the Arranger
confirms that the loan syndication process has been complete (the "Syndication
Period"), "Interest Period" means, with respect to a Eurodollar Loan, a
16
period of time between seven (7) and (14) days as elected by the Borrower,
provided that during such period all Interest Periods shall end on the same day.
Other than during the Syndication Period, such Interest Period shall end on the
day which corresponds numerically to such date one, two, three or six months
thereafter, provided, however, that if there is no such numerically
corresponding day in such next, second, third or sixth succeeding month, such
Interest Period shall end on the last Business Day of such next, second, third
or sixth succeeding month. If an Interest Period would otherwise end on a day
which is not a Business Day, such Interest Period shall end on the next
succeeding Business Day, provided, however, that if said next succeeding
Business Day falls in a new calendar month, such Interest Period shall end on
the immediately preceding Business Day.
"Inventory" has the meaning specified in the Security Agreement.
"Investment" of a Person means any (a) loan, advance, (b) extension of
credit (other than accounts receivable arising in the ordinary course of
business on terms customary in the trade), (c) contribution of capital by such
Person, (d) stocks, bonds, mutual funds, partnership interests, notes,
debentures, securities or other Capital Stock owned by such Person, (e) any
deposit accounts and certificate of deposit owned by such Person, and (f)
structured notes, derivative financial instruments and other similar instruments
or contracts owned by such Person.
"Joinder Agreement" means any joinder agreement in form and substance
acceptable to the Agent as determined in its Permitted Discretion, signed by the
Agent, the Company and a Guarantor or a Foreign Subsidiary Borrower, under which
such Guarantor or Foreign Subsidiary Borrower becomes a party to this Agreement.
"LC Fee" is defined in Section 2.10(b).
"LC Issuer" means Bank One (or any subsidiary or Affiliate of Bank One
designated by Bank One) in its capacity as issuer of Facility LCs hereunder.
"LC Obligations" means, at any time, the sum, without duplication, of
(a) the aggregate undrawn stated amount under all Facility LCs outstanding at
such time plus (b) the aggregate unpaid amount at such time of all Reimbursement
Obligations.
"LC Payment Date" is defined in Section 2.1.2(d).
"Lenders" means the lending institutions listed on the signature pages
of this Agreement and their respective successors and assigns.
"Lending Installation" means, with respect to a Lender, the LC Issuer
or the Agent, the office, branch, subsidiary or Affiliate of such Lender, LC
Issuer or the Agent listed on the signature pages hereof or on a Schedule or
otherwise selected by such Lender, the LC Issuer or the Agent pursuant to
Section 2.22.
"Letter of Credit" of a Person means a letter of credit or similar
instrument which is issued upon the application of such Person or upon which
such Person is an account party or for which such Person is in any way liable.
"Lien" means any lien (statutory or other), mortgage, pledge,
hypothecation, assignment, deposit arrangement, encumbrance or preference,
priority or other security agreement or preferential arrangement of any kind or
nature whatsoever (including, without limitation, the interest of a vendor or
lessor under any conditional sale, Capitalized Lease or other title retention
agreement).
17
"Licenses" shall have the meaning given to such term in the Security
Agreement.
"Loans" means, with respect to a Lender or the Agent, such Lender's or
Agent's loans made pursuant to Article II (or any conversion or continuation
thereof), including Revolving Loans, Non-Ratable Loans, Overadvances, Protective
Advances and Swingline Loans.
"Loan Documents" means this Agreement, any Notes, the Facility LC
Applications, the Collateral Documents, the Guaranty, the Intercreditor
Agreement, any environmental certificate and all other agreements, instruments,
documents and certificates identified in Section 4.1 or otherwise executed and
delivered to, or in favor of, Agent or any Lenders and including all other
pledges, powers of attorney, consents, assignments, contracts, notices, letter
of credit agreements and all other written matter whether heretofore, now or
hereafter executed by or on behalf of any Loan Party, or any employee of any
Loan Party, and delivered to Agent or any Lender in connection with the
Agreement or the transactions contemplated thereby. Any reference in the
Agreement or any other Loan Document to a Loan Document shall include all
appendices, exhibits or schedules thereto, and all amendments, restatements,
supplements or other modifications thereto, and shall refer to the Agreement or
such Loan Document as the same may be in effect at any and all times such
reference becomes operative.
"Loan Parties" means the Company, the Foreign Borrowing Subsidiaries,
the Guarantors and any other Person who becomes a party to this Agreement
pursuant to a Joinder Agreement.
"Management Investors" means each of the officers, employees and
directors of the Company who own Voting Stock in the Company on the Closing
Date, in each case so long as such person shall remain an officer, employee or
director of the Company.
"Margin Stock" means "margin stock" as defined in Regulations U or X or
"marginable OTC stock" or "foreign margin stock" within the meaning of
Regulation T.
"Material Adverse Effect" shall mean (i) a material adverse effect on
the financial condition, results of operations, properties, assets, business or
prospects of the Company and its Subsidiaries, taken as a whole, (ii) a material
adverse effect on the ability of the Borrowers or the Guarantors to perform
their obligations under the Loan Documents or (iii) a material adverse effect on
the rights and remedies of the Agent or the Lenders under any of the Loan
Documents.
"Material Indebtedness" means Indebtedness or Rate Management
Obligations in an outstanding principal amount of $5,000,000 or more in the
aggregate (or the equivalent thereof in any currency other than Dollars).
"Material Indebtedness Agreement" means any agreement under which any
Material Indebtedness was created or is governed or which provides for the
incurrence of Indebtedness in an amount which would constitute Material
Indebtedness (whether or not an amount of Indebtedness constituting Material
Indebtedness is outstanding thereunder).
"Modify" and "Modification" are defined in Section 2.1.2(a).
"Moody's" means Xxxxx'x Investors Service, Inc.
"Multiemployer Plan" means a Plan maintained pursuant to a collective
bargaining agreement or any other arrangement to which the Company at any time,
or any member of the Controlled Group is a party to which more than one employer
is obligated to make contributions.
18
"Net Cash Proceeds" means, if in connection with an asset disposition,
cash proceeds net of (i) commissions and other reasonable and customary
transaction costs, fees and expenses properly attributable to such transaction
and payable by such Loan Party in connection therewith (in each case, paid to
non-Affiliates), (ii) transfer taxes, (iii) amounts payable to holders of senior
Liens on such asset (to the extent such Liens constitute Permitted Liens
hereunder), if any, and (iv) an appropriate reserve for income taxes in
accordance with GAAP established in connection therewith or, if in connection
with an equity issuance, cash proceeds net of underwriting discounts and
commissions and other reasonable costs paid to non-Affiliates in connection
therewith.
"Netherlands" means the Kingdom of the Netherlands.
"Netherlands Borrower" means MSX International Netherlands B.V.
"Non-Ratable Loan" and "Non-Ratable Loans" are defined in Section
2.1.3.
"Non-U.S. Lender" is defined in Section 3.5(d).
"Note" is defined in Section 2.21(d).
"Obligations" means all unpaid principal of and accrued and unpaid
interest on the Loans, all LC Obligations, all accrued and unpaid fees and all
expenses, reimbursements, indemnities and other obligations of the Loan Parties
to the Lenders or to any Lender, the Agent, the LC Issuer or any indemnified
party arising under the Loan Documents.
"Off-Balance Sheet Liability" of a Person means (a) any repurchase
obligation or liability of such Person with respect to accounts or notes
receivable sold by such Person, (b) any indebtedness, liability or obligation
under any Sale and Leaseback Transaction which is not a Capitalized Lease, (c)
any indebtedness, liability or obligation under any so-called "synthetic lease"
transaction entered into by such Person, or (d) any indebtedness, liability or
obligation arising with respect to any other transaction which is the functional
equivalent of or takes the place of borrowing but which does not constitute a
liability on the balance sheets of such Person, but excluding from this clause
(d) Operating Leases.
"Offering Circular" means the offering circular of the Company, subject
to completion, dated July 25, 2003, prepared in connection with the offering of
the Second Secured Notes.
"Operating Lease" of a Person means any lease of Property (other than a
Capitalized Lease) by such Person as lessee which has an original term
(including any required renewals and any renewals effective at the option of the
lessor) of one year or more.
"Other Taxes" is defined in Section 3.5(b).
"Overadvances" has the meaning specified in Section 2.1.4(b).
"Participants" is defined in Section 12.2(a).
"Payment Date" means (a) with respect to interest payments due on any
Floating Rate Loan, the last day of each calendar month and the Termination
Date, (b) with respect to interest payments due on any Eurodollar Loan, (i) the
last day of the applicable Interest Period and (ii) in the case of any Interest
Period in excess of three months, the day which is three months after the first
day of such Interest Period,
19
and (iii) the Termination Date, and (c) with respect to any payment of LC Fees
or Unused Commitment Fees, the last day of each calendar quarter and the
Termination Date.
"PBGC" means the Pension Benefit Guaranty Corporation, or any successor
thereto.
"Permitted Currency" means Dollars or any Eligible Currency.
"Permitted Discretion" means a determination made in good faith and in
the exercise of reasonable (from the perspective of a secured asset-based
lender) business judgment.
"Permitted Holders" means the CVC Investors, the Management Investors
and their respective Permitted Transferees; provided, however, that any
Management Investor and any CVC Investor and any Permitted Transferee of a
Management Investor or CVC Investor (other than CVC or Citicorp, N.A. or any
direct or indirect Subsidiary of CVC or Citicorp, N.A. or any other Person
controlled by CVC or Citicorp, N.A.) shall not be a "Permitted Holder" if such
Person is the "beneficial owner" (as defined in Rules 13d-3 and 13d-5 under the
Exchange Act), directly or indirectly, of Voting Stock that represents at least
30% of the aggregate voting power of all classes of the Voting Stock of the
Company, voting together as a single class (without giving effect to the
attribution of beneficial ownership as a result of any stockholders' agreement
as in effect on the Closing Date, and any amendment to such agreement that does
not materially change the allocation of voting power provided in such
agreement).
"Permitted Investors" means (i) the CVC Investors and (ii) the
Management Investors and their respective Permitted Transferees, provided that
the Management Investors and their Permitted Transferees do not in the aggregate
beneficially own more than 30% of the aggregate voting power of the Voting Stock
of the Company (without giving effect to any attribution of beneficial ownership
which may result from the Stockholders' Agreement, and any amendment to such
agreement that does not materially change the allocation of voting power
provided for in such agreement).
"Permitted Liens" is defined in Section 6.21.
"Permitted Transferee" means (a) with respect to any CVC Investor who
is an employee, officer or director of CVC or any Wholly-Owned (other than
directors' qualifying shares) Subsidiary of CVC, any spouse or lineal descendent
(including by adoption) of such CVC Investor so long as such CVC Investor shall
be an employee, officer or director of CVC; and (b) with respect to any
Management Investor, any spouse or lineal descendent (including by adoption) of
such Management Investor so long as such Management Investor shall be an
employee, officer or director of the Company.
"Person" means any natural person, corporation, firm, joint venture,
partnership, limited liability company, association, enterprise, trust or other
entity or organization, or any government or political subdivision or any
agency, department or instrumentality thereof.
"Plan" means an employee pension benefit plan which is covered by Title
IV of ERISA or subject to the minimum funding standards under Section 412 of the
Code as to which the Company or any member of the Controlled Group may have any
liability.
"Pledged Subsidiaries" means those Foreign Subsidiaries 65% of whose
Capital Stock has been pledged to the Agent pursuant to a Pledge Agreement.
"Pounds Sterling" means the lawful money of the U. K.
20
"Preferred Stock" as applied to the Capital Stock of any corporation,
means Capital Stock of any class or classes (however designated) which is
preferred as to the payment of dividends, or as to the distribution of assets
upon any voluntary or involuntary liquidation or dissolution of such
corporation, over shares of Capital Stock of any other class of such
corporation.
"Prepayment Fee" is defined in Section 2.16(b).
"Pricing Schedule" means the Schedule attached hereto identified as
such.
"Prime Rate" means a rate per annum equal to the prime rate of interest
announced from time to time by Bank One or its parent (which is not necessarily
the lowest rate charged to any customer), changing when and as said prime rate
changes.
"Projections" is defined in Section 6.1(d).
"Property" of a Person means any and all property, whether real,
personal, tangible, intangible, or mixed, of such Person, or other assets owned,
leased or operated by such Person.
"Pro Rata Share" means, with respect to any Lender, (a) with respect to
Revolving Loans, LC Obligations, Non-Ratable Loans, Protective Advances,
Swingline Loans or Overadvances, a portion equal to a fraction the numerator of
which is such Lender's Commitment and the denominator of which is the aggregate
Commitment of all Lenders and (b) with respect to all Credit Extensions in the
aggregate after the Termination Date, a portion equal to a fraction the
numerator of which is such Lender's Credit Exposure and the denominator of which
is the Aggregate Credit Exposure of all Lenders.
"Protective Advances" is defined in Section 2.1.4.
"Purchasers" is defined in Section 12.3(a).
"Rate Management Obligations" of a Person means any and all obligations
of such Person, whether absolute or contingent and howsoever and whensoever
created, arising, evidenced or acquired (including all renewals, extensions and
modifications thereof and substitutions therefor), under (a) any and all Rate
Management Transactions, and (b) any and all cancellations, buy backs,
reversals, terminations or assignments of any Rate Management Transactions.
"Rate Management Transaction" means any transaction (including an
agreement with respect thereto) now existing or hereafter entered by any Loan
Party which is a rate swap, basis swap, forward rate transaction, commodity
swap, commodity option, equity or equity index swap, equity or equity index
option, bond option, interest rate option, foreign exchange transaction, cap
transaction, floor transaction, collar transaction, forward transaction,
currency swap transaction, cross-currency rate swap transaction, currency option
or any other similar transaction (including any option with respect to any of
these transactions) or any combination thereof, whether linked to one or more
interest rates, foreign currencies, commodity prices, equity prices or other
financial measures.
"Regulation D" means Regulation D of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor thereto
or other regulation or official interpretation of said Board of Governors
relating to reserve requirements applicable to member banks of the Federal
Reserve System.
"Regulation T" means Regulation T of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor or other
regulation or official interpretation of said Board of
21
Governors relating to the extension of credit by banks for the purpose of
purchasing or carrying margin stocks applicable to member banks of the Federal
Reserve System.
"Regulation U" means Regulation U of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor or other
regulation or official interpretation of said Board of Governors relating to the
extension of credit by banks for the purpose of purchasing or carrying margin
stocks applicable to member banks of the Federal Reserve System.
"Regulation X" means Regulation X of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor or other
regulation or official interpretation of said Board of Governors relating to the
extension of credit by banks for the purpose of purchasing or carrying margin
stocks applicable to member banks of the Federal Reserve System.
"Reimbursement Obligations" means, at any time, the aggregate of all
obligations of the Company then outstanding under Section 2.1.2 to reimburse the
LC Issuer for amounts paid by the LC Issuer in respect of any one or more
drawings under Facility LCs.
"Reportable Event" means a reportable event as defined in Section 4043
of ERISA and the regulations issued under such section, with respect to a Plan,
excluding, however, such events as to which the PBGC has by regulation waived
the requirement of Section 4043(a) of ERISA that it be notified within thirty
days of the occurrence of such event, provided however, that a failure to meet
the minimum funding standard of Section 412 of the Code and of Section 302 of
ERISA shall be a Reportable Event regardless of the issuance of any such waiver
of the notice requirement in accordance with either Section 4043(a) of ERISA or
Section 412(d) of the Code.
"Reports" is defined in Section 9.6(a)(ii).
"Required Lenders" means Lenders in the aggregate having at least 51%
of the Aggregate Commitment or, if the Aggregate Commitment has been terminated,
Lenders in the aggregate holding at least 51% of the Aggregate Credit Exposure;
provided that, as long as there is more than one Lender and one Lender would
constitute the Required Lenders but for this proviso, then Required Lenders will
require at least two Lenders.
"Requirement of Law" means, as to any Person, the certificate of
incorporation and by-laws or other organizational or governing documents of such
Person, and any law, treaty, rule or regulation or determination of an
arbitrator or a court or other governmental authority, in each case applicable
to or binding upon such Person or any of its property or to which such Person or
any of its property is subject.
"Reserves" means any and all reserves which the Agent deems necessary,
in its Permitted Discretion, to maintain (including, without limitation,
reserves for accrued and unpaid interest on the Secured Obligations, Banking
Services Reserves (to be initially set at $5,000,000), a Swingline Loan facility
reserve (to be initially set at the Swingline Amount with respect to the U.K.
Borrowing Base), a payroll reserve (to be initially set at $4,200,000), reserves
for dilution of Accounts and reserves for taxes, fees, assessments, and other
governmental charges) with respect to the Collateral or any Loan Party.
"Revolving Borrowers" means the Company, the Netherlands Borrower and
the U.K. Borrower.
"Revolving Loans" is defined in Section 2.1.1(a).
22
"Reserve Requirement" means, with respect to an Interest Period, the
maximum aggregate reserve requirement (including all basic, supplemental,
marginal and other reserves) which is imposed under Regulation D on Eurocurrency
liabilities.
"S&P" means Standard and Poor's Ratings Services, a division of The
McGraw Hill Companies, Inc.
"Sale and Leaseback Transaction" means any sale or other transfer of
Property by any Person with the intent to lease such Property as lessee.
"Schedule" refers to a specific schedule to this Agreement, unless
another document is specifically referenced.
"Second Secured Debt" means all current and future Indebtedness and
other liabilities owing pursuant to the Second Secured Notes or any other Second
Secured Debt Documents and any extensions, refinancings, renewals or refundings
thereof and any increases in the amount thereof.
"Second Secured Debt Documents" means the Second Secured Note
Indenture, the Second Secured Notes and all agreements and documents executed in
connection therewith at any time, including without limitation those agreements
and documents listed on Schedule 5.34 hereto.
"Second Secured Notes" means the 11% Senior Secured Notes issued by the
Company in the aggregate principal amount of $75,500,000 (as of the Closing
Date) due October 15, 2007 issued pursuant to the Second Secured Note Indenture
and any other securities issued pursuant to the Subordinated Note Indenture at
any time.
"Second Secured Note Indenture" means the Senior Secured Indenture
between the Company, the subsidiary guarantors named therein and BNY Midwest
Trust Company, as trustee, dated as of August 1, 2003, as amended or modified
from time to time.
"Section" means a numbered section of this Agreement, unless another
document is specifically referenced.
"Secured Obligations" means, collectively, (a) the Obligations, (b) all
Banking Services Obligations and (c) all Exchange Rate Management Obligations
owing to one or more Lenders or any of their Affiliates.
"Security Agreement" means that certain Pledge and Security Agreement,
dated as of the date hereof, between the Loan Parties and the Agent, for the
benefit of Agent and the Lenders, and any other pledge or security agreement
entered into, after the Closing Date by any other Loan Party (as required by
this Agreement or any other Loan Document), or any other Person, as the same may
be amended, restated or otherwise modified from time to time.
"Significant Subsidiary" means any one or more Subsidiaries which, if
considered in the aggregate as a single Subsidiary would be a "significant
subsidiary" as defined in Rule 1-02 of Regulation S-X under the Exchange Act,
provided that no Domestic Subsidiary which is not by itself a Significant
Subsidiary shall be included in any Significant Subsidiary if all Domestic
Subsidiaries which are not by themselves Significant Subsidiaries or Guarantors
would not constitute a Significant Subsidiary and no Foreign Subsidiary which is
not by itself a Significant Subsidiary shall be included in any Significant
Subsidiary if all Foreign Subsidiaries which are not by themselves Significant
Subsidiaries or Pledged Subsidiaries would not constitute a Significant
Subsidiary.
23
"Single Employer Plan" means a Plan maintained by the Company or any
member of the Controlled Group for employees of the Company or any member of the
Controlled Group.
"Subordinated Debt" means all current and future Indebtedness and other
liabilities owing pursuant to the Subordinated Notes and any extensions,
refinancings, renewals or refundings thereof and any increases in the amount
thereof and, for any Person, any other Indebtedness of such Person which is
fully subordinated to all Secured Obligations by written agreements and
documents in form and substance satisfactory to the Agent as determined in its
Permitted Discretion and which is governed by terms and provisions, including
without limitation maturities, covenants, defaults, rates and fees, acceptable
to the Agent as determined in its Permitted Discretion.
"Subordinated Debt Documents" means the Subordinated Note Indenture,
the Subordinated Notes and all agreements and documents executed in connection
therewith at any time, including without limitation those agreements and
documents listed on Schedule 5.31 hereto.
"Subordinated Notes" means the 11-3/8% Senior Subordinated Notes issued
by the Company in the aggregate principal amount of $130,000,000 (as of the
Closing Date) due 2008 issued pursuant to the Subordinated Note Indenture and
any other securities issued pursuant to the Subordinated Note Indenture at any
time.
"Subordinated Note Indenture" means the Senior Subordinated Indenture
between the Company, the subsidiary guarantors named therein and IBJ Xxxxxxxx
Bank & Trust Company, as trustee, dated as of January 15, 1998, as amended or
modified from time to time.
"Subsidiary" of a Person means, any corporation, partnership, limited
liability company, association, joint venture or similar business organization
more than 50% of the outstanding Capital Stock having ordinary voting power
(other than securities or other ownership interests which have such power or
right only by reason of the happening of a contingency) of which shall at the
time be 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. Any reference in this Agreement to a
Subsidiary shall be deemed reference to a Subsidiary of the Company unless
otherwise indicated.
"Substantial Portion" means, with respect to the property of the
Company and its Subsidiaries, property which (a) represents more than 10% of the
consolidated assets of the Company and its Subsidiaries as would be shown in the
consolidated financial statements of the Company and its Subsidiaries as at the
beginning of the twelve-month period ending with the month in which such
determination is made, (b) is responsible for more than 10% of the consolidated
net sales or of the consolidated net income of the Company and its Subsidiaries
as reflected in the financial statements referred to in clause (a) above, (c)
represents more than 25% of the consolidated assets of the Company and its
Subsidiaries as would be shown in the consolidated financial statements of the
Company and its Subsidiaries as of the Closing Date or (d) is responsible for
more than 25% of the consolidated net sales or of the consolidated net income of
the Company and its Subsidiaries as reflected in the financial statements
referred to in clause (c) above.
"Supporting Letter of Credit" is defined in Section 2.1.2(l).
"Swingline Amount" means $7,000,000, as such amount is modified from
time to time as follows: (a) the Borrowers may reduce such amount from time to
time in integral multiples of $1,000,000 by written notice to the Agent and (b)
the Borrowers may increase such amount from time to time in
24
integral multiples of $1,000,000 by written notice to the Agent, provided that
any such increase shall be subject to the written approval of the Agent and the
Required Lenders in their sole discretion.
"Swingline Loans" is defined in Section 2.1.5(a).
"Swingline Reserve" means the Reserves taken by the Agent with respect
to the Swingline facility (to be initially set at the Swingline Amount with
respect to the U.K. Borrowing Base).
"Taxes" means any and all present or future taxes, duties, levies,
imposts, deductions, charges or withholdings, and any and all liabilities with
respect to the foregoing, but excluding Excluded Taxes and Other Taxes.
"Termination Date" means August 1, 2006 or any earlier date on which
the Aggregate Commitment is reduced to zero or otherwise terminated pursuant to
the terms hereof.
"Third Secured Term Lender" means Citicorp Mezzanine III, L.P.
"Third Secured Term Loan Debt" means the Third Secured Term Loan and
all other current and future obligations and liabilities owing pursuant to the
Third Secured Term Loan Debt Documents and any extensions, refinancings,
renewals or refundings thereof and any increases in the amount thereof.
"Third Secured Term Loan Agreement" means the Third Secured Term Loan
Agreement between the Company, the U.K. Borrower and the Third Secured Term
Lender dated as of the date hereof, as amended or modified from time to time.
"Third Secured Term Loan Debt Documents" means the Third Secured Term
Loan Agreement and all agreements, instruments and documents executed in
connection therewith or otherwise in connection with the Third Secured Term Loan
at any time.
"Third Secured Term Loan" means the loan in the principal amount of
$25,000,000 made under the Third Secured Term Loan Agreement on the date hereof.
"Transferee" is defined in Section 12.4.
"Type" means, with respect to any Advance, its nature as a Floating
Rate Advance or a Eurodollar Advance and with respect to any Loan, its nature as
a Floating Rate Loan or a Eurodollar Loan.
"UCC" means the Uniform Commercial Code as in effect from time to time
in the State of Michigan or any other state the laws of which are required to be
applied in connection with the issue of perfection of security interests.
"U.K." means the United Kingdom of Great Britain and Northern Ireland.
"U.K. Borrower" means MSX International Limited.
"U.K. Borrowing Base" means, at any time, the sum of (a) up to 85% of
the U.K. Borrower's Eligible Accounts at such time, plus (b) up to 65% of the
U.K. Borrower's Eligible Unbilled Accounts at such time, minus (c) Reserves
allocated by the Agent to the U.K. Borrowing Base; provided that the aggregate
amount included at any time in the U.K. Borrowing Base shall not exceed the
outstanding principal amount of Loans owing by the U.K. Borrower.
25
"U.K. Borrowing Base - Unlimited" means, at any time, the U.K.
Borrowing Base without any reduction to the U.K. Borrowing Base due to the
limitation contained in the proviso of the definition of U.K. Borrowing Base.
"Unfunded Liabilities" means the amount (if any) by which the present
value of all vested and unvested accrued benefits under all Single Employer
Plans exceeds the fair market value of all such Plan assets allocable to such
benefits, all determined as of the then most recent valuation date for such
Plans using PBGC actuarial assumptions for single employer plan terminations.
"Unmatured Default" means an event which, unless cured or waived, but
for the lapse of time or the giving of notice, or both, would constitute a
Default.
"Unrestricted Subsidiary" shall mean any Subsidiary designated by the
Company as an Unrestricted Subsidiary and approved by the Agent in its Permitted
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
Default or Unmatured Default 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 Default or Unmatured Default exists or would
be caused thereby, all on a pro forma basis acceptable to the Agent.
"Unused Commitment Fee" is defined in Section 2.10(a).
"U.S." means the United States of America.
"U.S. Borrowing Base" means, at any time, the sum of (a) up to 85% of
Company's and each Guarantor's Eligible Accounts at such time, plus (b) up to
65% of Company's and each Guarantor's Eligible Unbilled Accounts at such time,
minus (c) Reserves allocated by the Agent to the U.S. Borrowing Base.
"Voting Stock" of a Person means all classes of Capital Stock of such
Person then outstanding and normally entitled (without regard to the occurrence
of any contingency) to vote in the election of directors, managers or trustees
thereof.
"Wholly-Owned Subsidiary" of a Person means, any Subsidiary all of the
outstanding Capital Stock of which shall at the time be owned or controlled,
directly or indirectly, by such Person or one or more Wholly-Owned Subsidiaries
of such Person, or by such Person and one or more Wholly-Owned Subsidiaries of
such Person.
The foregoing definitions shall be equally applicable to both the
singular and plural forms of the defined terms.
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ARTICLE II
THE FACILITY
2.1. The Facility. Each Lender severally agrees, on the terms and
conditions set forth in this Agreement, to (a) make Loans to the Revolving
Borrowers set forth below and (b) participate in Facility LCs issued upon the
request of the Revolving Borrowers and in Overadvances, Protective Advances,
Non-Ratable Loans and Swingline Loans made to the Borrowers, provided that,
after giving effect to the making of each such Loan and the issuance of each
such Facility LC, (i) such Lender's Credit Exposure shall not exceed its
Commitment and (ii) the Aggregate Credit Exposure shall not exceed the Aggregate
Commitment or any other limitation on the Aggregate Credit Exposure contained in
this Agreement. The LC Issuer will issue Facility LCs hereunder on the terms and
conditions set forth in Section 2.1.2. The Facility shall be composed of
Revolving Loans, Non-Ratable Loans, Protective Advances, Swingline Loans,
Overadvances and Facility LCs as set forth below:
2.1.1. Revolving Loans.
(a) Amount. From and including the Closing Date and prior to
the Termination Date, each Lender severally agrees, on the terms and
conditions set forth in this Agreement, to make revolving loans (the
"Revolving Loans") in Dollars and participate in Facility LCs issued in
any Permitted Currency as set forth in Section 2.1.2 below, to the
Revolving Borrowers, in amounts not to exceed such Lender's Pro Rata
Share. If any Advance would exceed Availability, the Lenders will
refuse to make or may otherwise restrict the making of Revolving Loans
or the issuance of Facility LCs as the Lenders determine until such
excess has been eliminated, subject to the Agent's authority, in its
sole discretion, to make Protective Advances and Overadvances pursuant
to the terms of Section 2.1.4. The Revolving Loans may consist of
Floating Rate Advances or Eurodollar Advances, or a combination
thereof, selected by the Revolving Borrowers in accordance with
Sections 2.1.1(b) and 2.7. Subject to the terms of this Agreement, the
Revolving Borrowers may borrow, repay and reborrow Revolving Loans at
any time prior to the Termination Date. The Commitments to extend
credit hereunder shall expire on the Termination Date.
(b) Borrowing Procedures. The Revolving Borrowers shall select
the Type of Advance and, in the case of each Eurodollar Advance, the
Interest Period applicable thereto, from time to time. A Revolving
Borrower shall give the Agent irrevocable notice in the form of Exhibit
A (a "Borrowing Notice") not later than 10:00 a.m. (Chicago time) at
least one Business Day before the Borrowing Date of each Floating Rate
Advance and three Business Days before the Borrowing Date for each
Eurodollar Advance, specifying: (1) the Borrowing Date, which shall be
a Business Day, of such Advance, (2) the aggregate amount of such
Advance, (3) the Type of Advance selected; provided that, if such
Revolving Borrower fails to specify the Type of Advance requested, such
request shall be deemed a request for a Floating Rate Advance; and (4)
the duration of the Interest Period if the Type of Advance requested is
a Eurodollar Advance; provided that, if such Revolving Borrower fails
to select the duration of the Interest Period for the requested
Eurodollar Advance, such Revolving Borrower shall be deemed to have
requested that such Eurodollar Advance be made with an Interest Period
of one month.
(c) The Agent's Election. Promptly after receipt of a
Borrowing Notice (or telephonic notice in lieu thereof) of a requested
Floating Rate Advance, the Agent shall elect in its Permitted
Discretion to have the terms of Section 2.1.1(d) (pro rata advance by
all Lenders) or Section 2.1.3 (advance by Agent, in the form of a
Non-Ratable Loan, on behalf of the Lenders) apply to such requested
Advance.
(d) Pro Rata Advance. Unless the Agent elects to have the
terms of Section 2.1.3 apply to a requested Floating Rate Advance or if
a requested Advance is for a Eurodollar Advance, then promptly after
receipt of a Borrowing Notice or telephonic notice in lieu thereof as
permitted by Section 2.8, the Agent shall notify the Lenders by
telecopy, telephone, or e-mail of
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the requested Advance. Not later than noon (Chicago time) on each
Borrowing Date, each Lender shall make available its Revolving Loan in
funds immediately available to the Agent at its Lending Installation
and the Agent will make the funds so received from the Lenders
available to such Revolving Borrower at such Revolving Borrower's
Funding Account as set forth in Section 2.5.
2.1.2. Facility LCs.
(a) Issuance. The LC Issuer hereby agrees, on the terms and
conditions set forth in this Agreement, to issue standby and commercial
Letters of Credit (each, a "Facility LC") and to renew, extend,
increase, decrease or otherwise modify each Facility LC ("Modify," and
each such action a "Modification"), from time to time from and
including the Closing Date of this Agreement and prior to the
Termination Date upon the request of a Revolving Borrower; provided
that, the maximum face amount of the Facility LC to be issued or
Modified, does not exceed the lesser of (i) an amount equal to
$10,000,000 minus the sum of (1) the aggregate undrawn amount of all
outstanding Facility LCs at such time plus, without duplication, (2)
the aggregate unpaid Reimbursement Obligations with respect to all
Facility LCs outstanding at such time and (ii) Availability. No
Facility LC shall have an expiry date later than the earlier of (x) the
fifth Business Day prior to the Termination Date and (y) one year after
its issuance.
(b) Participations. Upon the issuance or Modification by the
LC Issuer of a Facility LC in accordance with this Section 2.1.2, the
LC Issuer shall be deemed, without further action by any party hereto,
to have unconditionally and irrevocably sold to each Lender, and each
Lender shall be deemed, without further action by any party hereto, to
have unconditionally and irrevocably purchased from the LC Issuer, a
participation in such Facility LC (and each Modification thereof) and
the related LC Obligations in proportion to its Pro Rata Share.
(c) Notice. Subject to Section 2.1.2(a), a Revolving Borrower
shall give the LC Issuer notice prior to 10:00 a.m. (Chicago time) at
least five Business Days prior to the proposed date of issuance or
Modification of each Facility LC, specifying the beneficiary, the
proposed date of issuance (or Modification) and the expiry date of such
Facility LC, and describing the proposed terms of such Facility LC and
the nature of the transactions proposed to be supported thereby. Upon
receipt of such notice, the LC Issuer shall promptly notify the Agent,
and the Agent shall promptly notify each Lender, of the contents
thereof and of the amount of such Lender's participation in such
proposed Facility LC. The issuance or Modification by the LC Issuer of
any Facility LC shall, in addition to the conditions precedent set
forth in Article IV (the satisfaction of which the LC Issuer shall have
no duty to ascertain), be subject to the conditions precedent that such
Facility LC shall be reasonably satisfactory to the LC Issuer and that
such Revolving Borrower shall have executed and delivered such
application agreement and/or such other instruments and agreements
relating to such Facility LC as the LC Issuer shall have reasonably
requested (each, a "Facility LC Application"). In the event of any
conflict between the terms of this Agreement and the terms of any
Facility LC Application, the terms of this Agreement shall control.
(d) Administration; Reimbursement by Lenders. Upon
receipt from the beneficiary of any Facility LC of any demand for
payment under such Facility LC, the LC Issuer shall notify the Agent
and the Agent shall promptly notify the relevant Revolving Borrower and
each other Lender as to the amount to be paid by the LC Issuer as a
result of such demand and the proposed payment date (the "LC Payment
Date"). The responsibility of the LC Issuer to the Revolving Borrowers
and each Lender shall be only to determine that the documents
(including each demand for payment) delivered under each Facility LC in
connection with such presentment shall
28
be in conformity in all material respects with such Facility LC. The LC
Issuer shall endeavor to exercise the same care in the issuance and
administration of the Facility LCs as it does with respect to letters
of credit in which no participations are granted, it being understood
that in the absence of any gross negligence or willful misconduct by
the LC Issuer, each Lender shall be unconditionally and irrevocably
liable without regard to the occurrence of any Default or any condition
precedent whatsoever, to reimburse the LC Issuer on demand for (i) such
Lender's Pro Rata Share of the amount of each payment made by the LC
Issuer under each Facility LC to the extent such amount is not
reimbursed by the relevant Revolving Borrower pursuant to Section
2.1.2(e) below, plus (ii) interest on the foregoing amount to be
reimbursed by such Lender, for each day from the date of the LC
Issuer's demand for such reimbursement (or, if such demand is made
after 11:00 a.m. (Chicago time) on such date, from the next succeeding
Business Day) to the date on which such Lender pays the amount to be
reimbursed by it, at a rate of interest per annum equal to the Federal
Funds Effective Rate for the first three days and, thereafter, at a
rate of interest equal to the rate applicable to Floating Rate
Advances.
(e) Reimbursement by Revolving Borrowers. Each Revolving
Borrower shall be irrevocably and unconditionally obligated to
reimburse the LC Issuer on or before the applicable LC Payment Date (if
it shall have received notice prior to 12:00 noon (Chicago time) on any
payment or the next Business Day if it shall receive notice after 12:00
noon (Chicago time)) for any amounts to be paid by the LC Issuer upon
any drawing under any Facility LC issued for the account of such
Revolving Borrower, without presentment, demand, protest or other
formalities of any kind; provided that, neither the Revolving Borrowers
nor any Lender shall hereby be precluded from asserting any claim for
direct (but not consequential) damages suffered by the Revolving
Borrowers or such Lender to the extent, but only to the extent, caused
by (i) the willful misconduct or gross negligence of the LC Issuer in
determining whether a request presented under any Facility LC issued by
it complied with the terms of such Facility LC or (ii) the LC Issuer's
failure to pay under any Facility LC issued by it after the
presentation to it of a request strictly complying with the terms and
conditions of such Facility LC. All such amounts paid by the LC Issuer
and remaining unpaid by the Revolving Borrowers shall bear interest,
payable on demand, for each day until paid at a rate per annum equal to
(x) the rate applicable to Floating Rate Advances for such day if such
day falls on or before the applicable LC Payment Date and (y) the sum
of 2% plus the rate applicable to Floating Rate Advances for such day
if such day falls after such LC Payment Date. The LC Issuer will pay to
each Lender ratably in accordance with its Pro Rata Share all amounts
received by it from the Revolving Borrowers for application in payment,
in whole or in part, of the Reimbursement Obligation in respect of any
Facility LC issued by the LC Issuer, but only to the extent such Lender
has made payment to the LC Issuer in respect of such Facility LC
pursuant to Section 2.1.2(d). Subject to the terms and conditions of
this Agreement (including without limitation the submission of a
Borrowing Notice in compliance with Section 2.1.1(b) and the
satisfaction of the applicable conditions precedent set forth in
Article IV), the Revolving Borrowers may request an Advance hereunder
for the purpose of satisfying any Reimbursement Obligation.
(f) Obligations Absolute. The Revolving Borrowers'
obligations under this Section 2.1.2 shall be absolute and
unconditional under any and all circumstances and irrespective of any
setoff, counterclaim or defense to payment which the Revolving
Borrowers may have or have had against the LC Issuer, any Lender or any
beneficiary of a Facility LC. The Revolving Borrowers further agree
with the LC Issuer and the Lenders that the LC Issuer and the Lenders
shall not be responsible for, and the Revolving Borrowers'
Reimbursement Obligation in respect of any Facility LC shall not be
affected by, among other things, the validity or genuineness of
documents or of any endorsements thereon, even if such documents should
in fact prove to be in any or all respects invalid, fraudulent or
forged, or any dispute between or among the any
29
Revolving Borrower, any of its Affiliates, the beneficiary of any
Facility LC or any financing institution or other party to whom any
Facility LC may be transferred or any claims or defenses whatsoever of
any Revolving Borrower or of any of its Affiliates against the
beneficiary of any Facility LC or any such transferee. The LC Issuer
shall not be liable for any error, omission, interruption or delay in
transmission, dispatch or delivery of any message or advice, however
transmitted, in connection with any Facility LC. The Revolving
Borrowers agree that any action taken or omitted by the LC Issuer or
any Lender under or in connection with each Facility LC and the related
drafts and documents, if done without gross negligence or willful
misconduct, shall be binding upon the Revolving Borrowers and shall not
put the LC Issuer or any Lender under any liability to the Revolving
Borrowers. Nothing in this Section 2.1.2(f) is intended to limit the
right of the Revolving Borrowers to make a claim against the LC Issuer
for damages as contemplated by the proviso to the first sentence of
Section 2.1.2(e).
(g) Actions of LC Issuer. The LC Issuer shall be entitled to
rely, and shall be fully protected in relying, upon any Facility LC,
draft, writing, resolution, notice, consent, certificate, affidavit,
letter, cablegram, telegram, telecopy, telex or teletype message,
statement, order or other document believed by it to be genuine and
correct and to have been signed, sent or made by the proper Person or
Persons, and upon advice and statements of legal counsel, independent
accountants and other experts selected by the LC Issuer. The LC Issuer
shall be fully justified in failing or refusing to take any action
under this Agreement unless it shall first have received such advice or
concurrence of the Required Lenders as it reasonably deems appropriate
or it shall first be indemnified to its reasonable satisfaction by the
Lenders against any and all liability and expense which may be incurred
by it by reason of taking or continuing to take any such action.
Notwithstanding any other provision of this Section 2.1.2, the LC
Issuer shall in all cases be fully protected in acting, or in
refraining from acting, under this Agreement in accordance with a
request of the Required Lenders, and such request and any action taken
or failure to act pursuant thereto shall be binding upon the Lenders
and any future holders of a participation in any Facility LC.
(h) Indemnification. Each Revolving Borrower hereby agrees to
indemnify and hold harmless each Lender, the LC Issuer and the Agent,
and their respective directors, officers, agents and employees from and
against any and all claims and damages, losses, liabilities, costs or
expenses which such Lender, the LC Issuer or the Agent may incur (or
which may be claimed against such Lender, the LC Issuer or the Agent by
any Person whatsoever) by reason of or in connection with the issuance,
execution and delivery or transfer of or payment or failure to pay
under any Facility LC issued for such Revolving Borrower's account or
any actual or proposed use of any such Facility LC, including, without
limitation, any claims, damages, losses, liabilities, costs or expenses
which the LC Issuer may incur by reason of or in connection with (i)
the failure of any other Lender to fulfill or comply with its
obligations to the LC Issuer hereunder (but nothing herein contained
shall affect any rights the Revolving Borrowers may have against any
defaulting Lender) or (ii) by reason of or on account of the LC Issuer
issuing any Facility LC which specifies that the term "Beneficiary"
included therein includes any successor by operation of law of the
named Beneficiary, but which Facility LC does not require that any
drawing by any such successor Beneficiary be accompanied by a copy of a
legal document, satisfactory to the LC Issuer, evidencing the
appointment of such successor Beneficiary; provided that, the Revolving
Borrowers shall not be required to indemnify any Lender, the LC Issuer
or the Agent for any claims, damages, losses, liabilities, costs or
expenses to the extent, but only to the extent, caused by (x) the
willful misconduct or gross negligence of the LC Issuer in determining
whether a request presented under any Facility LC complied with the
terms of such Facility LC or (y) the LC Issuer's failure to pay under
any Facility LC after the presentation to it of a request strictly
complying with the terms and conditions of such Facility LC. Nothing in
this Section 2.1.2(h) is
30
intended to limit the obligations of the Revolving Borrowers under any
other provision of this Agreement.
(i) Lenders' Indemnification. Each Lender shall, ratably in
accordance with its Pro Rata Share, indemnify the LC Issuer, its
Affiliates and their respective directors, officers, agents and
employees (to the extent not reimbursed by the Revolving Borrowers)
against any cost, expense (including reasonable counsel fees and
disbursements), claim, demand, action, loss or liability (except such
as result from such indemnitees' gross negligence or willful misconduct
or the LC Issuer's failure to pay under any Facility LC after the
presentation to it of a request strictly complying with the terms and
conditions of the Facility LC) that such indemnitees may suffer or
incur in connection with this Section 2.1.2 or any action taken or
omitted by such indemnitees hereunder.
(j) Facility LC Collateral Account. Each Revolving Borrower
agrees that it will, upon the request of the Agent or the Required
Lenders and until the final expiration date of any Facility LC and
thereafter as long as any amount is payable to the LC Issuer or the
Lenders in respect of any Facility LC, maintain a special collateral
account pursuant to arrangements satisfactory to the Agent (the
"Facility LC Collateral Account") at the Agent's office at the address
specified pursuant to Article XIII, in the name of such Revolving
Borrower but under the sole dominion and control of the Agent, for the
benefit of the Lenders and in which such Revolving Borrower shall have
no interest other than as set forth in Section 8.1. Each Revolving
Borrower hereby pledges, assigns and grants to the Agent, on behalf of
and for the ratable benefit of the Lenders and the LC Issuer, a
security interest in all of the its right, title and interest in and to
all funds which may from time to time be on deposit in the Facility LC
Collateral Account to secure the prompt and complete payment and
performance of the Secured Obligations. The Agent will invest any funds
on deposit from time to time in the Facility LC Collateral Account in
certificates of deposit of Bank One having a maturity not exceeding
thirty days. Nothing in this Section 2.1.2(j) shall either obligate the
Agent to require the Revolving Borrowers to deposit any funds in the
Facility LC Collateral Account or limit the right of the Agent to
release any funds held in the Facility LC Collateral Account in each
case other than as required by Section 8.1.
(k) Rights as a Lender. In its capacity as a Lender, the LC
Issuer shall have the same rights and obligations as any other Lender.
(l) Termination of the Facility. If, notwithstanding the
provisions of this Section 2.1.2, any Facility LC is outstanding upon
the termination of this Agreement, then upon such termination the
Revolving Borrowers shall deposit with the Agent, for the benefit of
the Agent and the Lenders, with respect to all LC Obligations, as the
Agent in its discretion shall specify, either (i) a standby letter of
credit (a "Supporting Letter of Credit"), in form and substance
satisfactory to the Agent, issued by an issuer reasonably satisfactory
to the Agent, in an amount in immediately available funds (which funds
shall be held in the Facility LC Collateral Account) equal to 105% of
the difference of (x) the amount of LC Obligations at such time, less
(y) the amount on deposit in the Facility LC Collateral Account at such
time which is free and clear of all rights and claims of third parties
and has not been applied against the Obligations (such difference, the
"Collateral Shortfall Amount"), under which Supporting Letter of Credit
the Agent is entitled to draw amounts necessary to reimburse the Agent,
the LC Issuer and the Lenders for payments to be made by the Agent, the
LC Issuer and the Lenders under any such Facility LC and any fees and
expenses associated with such Facility LC, or (ii) cash in an amount
equal to 105% of the Collateral Shortfall Amount. Such Supporting
Letter of Credit or deposit of cash shall be held by the Agent, for the
benefit of the Agent and the Lenders, as security for, and
31
to provide for the payment of, the aggregate undrawn amount of such
Facility LC remaining outstanding.
2.1.3. Non-Ratable Loans. Subject to the restrictions set
forth in Section 2.1.1(a), the Agent may elect to have the terms of this Section
2.1.3 apply to any requested Floating Rate Advance and Bank One shall thereafter
make an Advance, on behalf of the Lenders and in the amount requested, available
to the Revolving Borrowers on the applicable Borrowing Date by transferring same
day funds to the Funding Account. Each Advance made solely by the Agent pursuant
to this Section 2.1.3 is referred to in this Agreement as a "Non-Ratable Loan,"
and such Advances are referred to as the "Non-Ratable Loans." Each Non-Ratable
Loan shall be subject to all the terms and conditions applicable to other
Advances funded by the Lenders, except that all payments thereon shall be
payable to Bank One solely for its own account. The aggregate amount of
Non-Ratable Loans outstanding at any time shall not exceed 4,000,000. The Agent
shall not make any Non-Ratable Loan if the requested Non-Ratable Loan exceeds
Availability (before giving effect to such Non-Ratable Loan). Non-Ratable Loans
may be made even if a Default or Unmatured Default exists, but may not be made
if the conditions precedent set forth in Section 4.2 have not been satisfied.
The Non-Ratable Loans shall be secured by the Liens granted to the Agent in and
to the Collateral and shall constitute Obligations hereunder. All Non-Ratable
Loans shall be Floating Rate Advances and are subject to the settlement
provisions set forth in Section 2.19.
2.1.4. Protective Advances and Overadvances.
(a) Protective Advances. Subject to the limitations set forth
below, the Agent is authorized by the Revolving Borrowers and the
Lenders, from time to time in the Agent's sole discretion, to make
Advances to the Revolving Borrowers, on behalf of all Lenders, in an
aggregate amount outstanding at any time not to exceed $4,000,000,
which the Agent, in its reasonable business judgment, deems necessary
or desirable (i) to preserve or protect the Collateral, or any portion
thereof, (ii) to enhance the likelihood of, or maximize the amount of,
repayment of the Loans and other Obligations, or (iii) to pay any other
amount chargeable to or required to be paid by the Revolving Borrowers
pursuant to the terms of this Agreement, including costs, fees, and
expenses as described in Section 9.6 (any of such Advances are herein
referred to as "Protective Advances"); provided that, no Protective
Advance shall cause any Lender's Credit Exposure to exceed its
Commitment or the Aggregate Credit Exposure to exceed the Aggregate
Commitment. Protective Advances may be made even if the conditions
precedent set forth in Section 4.2 have not been satisfied. The
Protective Advances shall be secured by the Liens in favor of the Agent
in and to the Collateral and shall constitute Obligations hereunder.
All Protective Advances shall be Floating Rate Advances and are subject
to the settlement provisions set forth in Section 2.19.
(b) Overadvances. Any provision of this Agreement to the
contrary notwithstanding, at the request of Revolving Borrowers, the
Agent may in its sole discretion (but shall have absolutely no
obligation to), make Advances to the Revolving Borrowers, on behalf of
the Lenders, in amounts that exceed Availability (any such excess
Advances are herein referred to collectively as "Overadvances");
provided that, (i) no such event or occurrence shall cause or
constitute a waiver of Agent's or Lenders' right to refuse to make any
further Overadvances, Revolving Loans or Non-Ratable Loans, or issue
Facility LCs, as the case may be, at any time that an Overadvance
exists, and (ii) no Overadvance shall result in a Default or Unmatured
Default due to any Revolving Borrower's failure to comply with Section
2.1.1(a) for so long as Agent permits such Overadvance to remain
outstanding, but solely with respect to the amount of such Overadvance.
In addition, Overadvances may be made even if a Default or Unmatured
Default exists, but may not be made if the other conditions precedent
set forth in Section 4.2 have not been satisfied (other than the
condition regarding Availability). All Overadvances shall
32
constitute Floating Rate Advances, shall bear interest at the default
rate set forth in Section 2.12 and shall be payable on the earlier of
demand or the Termination Date. In addition, all Overadvances are
subject to the settlement provisions set forth in Section 2.19. The
authority of the Agent to make Overadvances is limited to an aggregate
amount not to exceed $4,000,000 at any time and no Overadvance shall
cause any Lender's Revolving Credit Exposure to exceed its Commitment
or the Aggregate Credit Exposure to exceed the Aggregate Commitment;
provided that, the Required Lenders may at any time revoke the Agent's
authorization to make Overadvances. Any such revocation must be in
writing and shall become effective prospectively upon the Agent's
receipt thereof.
2.1.5 Swingline Loans.
(a) Amount of Swingline Loans. Any Borrower (other than the
Company) may request the Agent to make, and the Agent may, in its sole
discretion, make loans (the "Swingline Loans") in any Permitted
Currencies requested by such Borrower from time to time on any Business
Day during the period from the Closing Date until the Termination Date
in an aggregate principal amount not to exceed at any time the lesser
of the Swingline Amount or the Dollar Amount thereof in other Eligible
Currencies. Within the limits of this Section 2.1.5, so long as the
Agent, in its sole discretion, elects to make, or arrange for Swingline
Loans, the Borrowers (other than the Company) may borrow and reborrow
under this Section 2.1.5. Each Swingline Loan shall bear interest at
such rate and for such period of time offered by the Agent and accepted
by such Borrower, and shall mature as agreed to by the Agent and the
Borrower, not to exceed one month after the date thereof. All such
Swingline Loans shall be subject to such notice requirements, minimum
amounts, funding requirements and other terms required by the Agent.
The Swingline Loans may be subject to such supplemental and additional
agreements among a Borrower and the Agent or an applicable Lending
Installation of the Agent for such Swingline Loans, and if there is any
direct conflict between the terms of this Agreement and such
supplemental and additional agreements the terms of this Agreement
shall control. Swingline Loans may be made by the Agent in any manner
determined by the Agent, including by means of loans, overdrafts or
other advances, and whether hereunder or under any such supplemental or
additional agreements designated by the Agent as Swingline Loans from
time to time. Without limiting the foregoing, any loans and other
advances to MSX International Australia Pty Limited under the letter
dated August 28, 2000 and accepted by it on October 25, 2000, as
amended, supplemented or replaced from time to time, shall be
considered Swingline Loans hereunder. The Loan Parties acknowledge and
agree that all existing Swingline Loans under the Existing Credit
Agreement shall continue and be Swingline Loans deemed outstanding
under and governed by this Agreement.
(b) Repayment of the Swingline Loans. Each Swingline Loan
shall be paid in full by the applicable Borrower thereof on demand by
the Agent or such other date agreed to by the Agent for such Swingline
Loan and not later than the Termination Date. The Agent may at any time
in its sole and absolute discretion require that its Swingline Loans be
refunded by a Revolving Loan from the Lenders, and upon written notice
thereof by the Agent, to the Lenders, the Company and the relevant
Borrower, the Company shall be deemed to have requested a Revolving
Loan in an amount equal to the Dollar Amount of such Swingline Loan and
such Revolving Loan shall be made to refund such Swingline Loan. Any
Swingline Loan outstanding in an Permitted Currency other than Dollars
shall, upon the giving of such notice by the Agent, immediately and
automatically be converted to and redenominated in Dollars equal to the
Dollar Amount of each such Swingline Loan determined as of the date of
such conversion. Each Lender shall be absolutely and unconditionally
obligated to fund its Pro Rata Share of such Revolving Loan or, if
applicable, to purchase a participation interest in the Swingline Loan
and such obligation shall not
33
be affected by any circumstance, including, without limitation, (A) any
set-off, counterclaim, recoupment, defense or other right which such
Lender has or may have against the Agent, the Agent or any Borrower or
anyone else for any reason whatsoever; (B) the occurrence or
continuance of a Default or Unmatured Default, (C) the occurrence of
any event or condition which could have a Material Adverse Effect; (D)
any breach of this Agreement by the Company or any other Borrower or
any Lender; 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 IV or any other provision of this Agreement). If,
for any reason (including without limitation as a result of the
occurrence of an Default with respect to the Company pursuant to clause
(f) or (g) of Article VII), Revolving Loans may not be made by the
Lenders as described in Section 2.1.5(b), then (A) the relevant
Borrower agrees that each Swingline Loan not paid pursuant to this
Section 2.1.5(b) shall bear interest, payable on demand by the Agent,
at the rate per annum equal to the sum of 2% plus the Floating Rate,
(B) the Borrowers agree that each Swingline Loan outstanding in a
Permitted Currency other than Dollars shall be immediately and
automatically converted to and redenominated in U.S. Dollars equal to
the U.S. Dollar Amount of each such Swingline Loan determined as of the
date of such conversion, and (C) effective on the date each such
Revolving Loan would otherwise have been made, each Lender severally
agrees that it shall unconditionally and irrevocably, without regard to
the occurrence of any Default or Unmatured Default, in lieu of deemed
disbursement of loans, to the extent of such Lender's Commitment,
purchase a participation interest in the Swingline Loans by paying its
Pro Rata Share thereof. Each Lender will immediately transfer to the
Swingline Lender, in same day funds, the amount of its participation.
Each Lender shall share based on its Pro Rata Share 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 Swingline Lender, such Lender
and the Company severally agree to pay to the Swingline Lender
forthwith on demand such amount together with interest thereon, for
each day from the date of demand by the Swingline Lender until the date
such amount is paid to the Swingline Lender, at (x) in the case of the
Company, at the interest rate specified above and (y) in the case of
such Lender, the Federal Funds Effective Rate for the first three days
and at the interest rate specified above thereafter.
2.1.6 Limitation on Advances. Notwithstanding anything in this
Agreement to the contrary, (a) the Aggregate Credit Exposure (excluding the
Credit Exposure of any Lender with respect to Swingline Loans) shall not exceed
a Dollar Amount equal to the lesser of (i) the Borrowing Base or (ii) the
Aggregate Commitment minus the Swingline Amount, (b) the aggregate of the Credit
Exposure of all of the Lenders with respect to Loans will not exceed an
aggregate Dollar Amount equal to $40,000,000, (c) the aggregate Credit Exposure
of all of the Lenders with respect to Facility L/Cs shall not exceed a Dollar
Amount equal to $10,000,000, (d) the aggregate Credit Exposure of all of the
Lenders with respect to Revolving Loans and Facility L/Cs to the Netherlands
Borrower shall not exceed a Dollar Amount equal to $3,500,000 and (e) the
aggregate Credit Exposure of all of the Lenders with respect to Swingline Loans
shall not exceed a Dollar Amount equal to the Swingline Amount. The Borrowers
shall immediately prepay the Obligations owing by them to the extent they exceed
any of the foregoing amounts by the amount of such excess. Notwithstanding this
Section 2.16 or anything else in this Agreement to the contrary, if the Credit
Exposure of any Lender exceeds the limitations herein due to currency
fluctuations, each Lender's obligation to participate in Facility LCs,
Protective Advances, Overadvances, Non-Ratable Loans and Swingline Loans and to
reimburse, and fulfill their other obligations with respect thereto, to the
Agent and the LC Issuer shall not be impaired in any manner.
2.2. Ratable Loans; Risk Participation. Except as otherwise provided
below, each Advance made in connection with a Revolving Loan shall consist of
Loans made by each Lender in an amount equal to such Lender's Pro Rata Share.
Upon the making of an Advance by the Agent in connection with
34
a Non-Ratable Loan or an Overadvance (whether before or after the occurrence of
a Default or an Unmatured Default and regardless of whether the Agent has
requested a Settlement with respect to such Non-Ratable Loan or Overadvance),
the Agent shall be deemed, without further action by any party hereto, to have
unconditionally and irrevocably sold to each Lender and each Lender shall be
deemed, without further action by any party hereto, to have unconditionally and
irrevocably purchased from the Agent, without recourse or warranty, an undivided
interest and participation in such Non-Ratable Loan or Overadvance in proportion
to its Pro Rata Share of the Commitment. Upon the making of an Advance by the
Agent in connection with a Protective Advance (whether before or after the
occurrence of a Default or an Unmatured Default and regardless of whether the
Agent has requested a Settlement with respect to such Protective Advance), the
Agent shall be deemed, without further action by any party hereto, to have
unconditionally and irrevocably sold to each Lender and each Lender shall be
deemed, without further action by any party hereto, to have unconditionally and
irrevocably purchased from the Agent, without recourse or warranty, an undivided
interest and participation in such Protective Advance in proportion to its Pro
Rata Share of the Aggregate Commitment.
2.3. Payment of the Obligations. Each Borrower shall repay the
outstanding principal balance of the Loans owing by it, together with all other
Obligations owing by it, including all accrued and unpaid interest and fees
thereon, on the Termination Date.
2.4. Minimum Amount of Each Advance. Each Eurodollar Advance shall be
in the minimum amount of $2,000,000 and in multiples of $500,000 if in excess
thereof, and, prior to a Borrowing Base Availability Deficiency Event, each
Floating Rate Advance shall be in the minimum amount of $500,000 and in
multiples of $500,000 if in excess thereof (other than a Floating Rate Advance
used to repay Non-Ratable Loans, Overadvances, Swingline Loans or Protective
Advances which may be in the amount of the Non-Ratable Loans, Overadvances,
Swingline Loans or Protective Advances being repaid), provided however, that any
Floating Rate Advance may be in the amount of the unused Commitment.
2.5. Funding Account. The Company shall deliver to the Agent, on the
Closing Date, a notice setting forth the deposit account or accounts of the
Company and each other Borrower (collectively, the "Funding Account") to which
the Agent is authorized by the Company and each other Borrower to transfer the
proceeds of any Advances requested pursuant to this Agreement. Each Borrower may
designate a replacement Funding Account from time to time by written notice to
the Agent. Any designation by any Borrower of the Funding Account must be
acceptable to the Agent.
2.6. Reliance Upon Authority; No Liability. The Agent is entitled to
rely conclusively on any individual's request for Advances hereunder, so long as
the proceeds thereof are to be transferred to the Funding Account. The Agent
shall have no duty to verify the identity of any individual representing himself
or herself as a person authorized by a Borrower to make such requests on its
behalf. The Agent shall not incur any liability to any Borrower as a result of
acting upon any notice referred to in Section 2.1 which the Agent reasonably
believes to have been given by an officer or other person duly authorized by
such Borrower to request Advances on its behalf or for otherwise acting under
this Agreement. The crediting of Advances to the Funding Account shall
conclusively establish the obligation of the Borrowers to repay such Advances as
provided herein.
2.7. Conversion and Continuation of Outstanding Advances. Floating Rate
Advances shall continue as Floating Rate Advances unless and until such Floating
Rate Advances are converted into Eurodollar Advances pursuant to this Section
2.7 or are repaid in accordance with this Agreement. Each Eurodollar Advance
shall continue as a Eurodollar Advance until the end of the then applicable
Interest Period therefor, at which time such Eurodollar Advance shall be
automatically converted into a Floating Rate Advance unless (x) such Eurodollar
Advance is or was repaid in accordance with this Agreement or (y) the relevant
Borrower shall have given the Agent a Conversion/Continuation Notice (as defined
35
below) requesting that, at the end of such Interest Period, such Eurodollar
Advance continue as a Eurodollar Advance for the same or another Interest
Period. Subject to the terms of Section 2.4, a Borrower may elect from time to
time to convert all or any part of a Floating Rate Advance into a Eurodollar
Advance. A Revolving Borrower shall give the Agent irrevocable notice in the
form of Exhibit B (a "Conversion/Continuation Notice") of each conversion of a
Floating Rate Advance into a Eurodollar Advance or continuation of a Eurodollar
Advance not later than 10:00 a.m. (Chicago time) at least three Business Days
prior to the date of the requested conversion or continuation, specifying (i)
the requested date, which shall be a Business Day, of such conversion or
continuation, (ii) the aggregate amount and Type of the Advance which is to be
converted or continued, and (iii) the amount of such Advance which is to be
converted into or continued as a Eurodollar Advance and the duration of the
Interest Period applicable thereto.
2.8. Telephonic Notices. The Company hereby authorizes the Lenders and
the Agent to extend, convert or continue Advances, effect selections of Types of
Advances and to transfer funds based on telephonic notices made by any person or
persons the Agent or any Lender in good faith believes to be acting on behalf of
a Borrower, it being understood that the foregoing authorization is specifically
intended to allow Borrowing Notices and Conversion/Continuation Notices to be
given telephonically. The Company agrees to deliver promptly to the Agent a
written confirmation, if such confirmation is requested by the Agent or any
Lender, of each telephonic notice signed by an Authorized Officer. If the
written confirmation differs in any material respect from the action taken by
the Agent and the Lenders, the records of the Agent and the Lenders shall govern
absent manifest error.
2.9. Notification of Advances, Interest Rates, Prepayments and
Commitment Reductions. Promptly after receipt thereof, the Agent will notify
each Lender of the contents of each Borrowing Notice, Conversion/Continuation
Notice, and repayment notice received by it hereunder. Promptly after notice
from the LC Issuer, the Agent will notify each Lender of the contents of each
request for issuance of a Facility LC hereunder. The Agent will notify each
Lender of the interest rate applicable to each Eurodollar Advance promptly upon
determination of such interest rate and will give each Lender prompt notice of
each change in the Alternate Base Rate.
2.10. Fees.
(a) Unused Commitment Fee. The Company agrees to pay to the
Agent, for the account of each Lender in accordance with such Lender's
Pro Rata Share, an unused commitment fee at a per annum rate equal to
the Applicable Fee Rate on the average daily amount of the Aggregate
Commitment minus the Aggregate Credit Exposure (other than Swingline
Loans) from the date hereof to and including the Termination Date,
payable on each Payment Date hereafter and on the Termination Date (the
"Unused Commitment Fee").
(b) LC Fees. The Company shall pay to the Agent, for the
account of the Lenders ratably in accordance with their respective Pro
Rata Shares, a letter of credit fee at a per annum rate equal to the
Applicable Margin for Eurodollar Loans in effect from time to time on
the average daily undrawn stated amount under such Facility LC, such
fee to be payable in arrears on each Payment Date (the "LC Fee"). The
Company shall also pay to the LC Issuer for its own account (x) at the
time of issuance of each Facility LC, a fronting fee of 0.25% of the
face amount of the Facility LC, and (y) documentary and processing
charges in connection with the issuance or Modification of and draws
under Facility LCs in accordance with the LC Issuer's standard schedule
for such charges as in effect from time to time.
36
(c) Agent and Arranger Fees. The Company agrees to pay to the
Agent and the Arranger such additional fees as are specified in the fee
letter dated as of July 7, 2003, among the Agent, the Arranger and the
Company (the "Fee Letter").
2.11. Interest Rates. Each Floating Rate Advance shall bear interest on
the outstanding principal amount thereof, for each day from and including the
date such Advance is made or is automatically converted from a Eurodollar
Advance into a Floating Rate Advance pursuant to Section 2.7, to but excluding
the date it is paid or is converted into a Eurodollar Advance pursuant to
Section 2.7 hereof, at a rate per annum equal to the Floating Rate for such day.
Changes in the rate of interest on that portion of any Advance maintained as a
Floating Rate Advance will take effect simultaneously with each change in the
Alternate Base Rate. Each Eurodollar Advance shall bear interest on the
outstanding principal amount thereof from and including the first day of the
Interest Period applicable thereto to (but not including) the last day of such
Interest Period at the interest rate determined by the Agent as applicable to
such Eurodollar Advance based upon a Revolving Borrower's selections under
Sections 2.1.1 and 2.7 and otherwise in accordance with the terms hereof. No
Interest Period may end after the Termination Date. If at any time Loans are
outstanding with respect to which a Borrower has not delivered a notice to the
Agent specifying the basis for determining the interest rate applicable thereto,
those Loans shall bear interest at the Floating Rate.
2.12. Eurodollar Advances Post Default; Default Rates. Notwithstanding
anything to the contrary contained hereunder, during the continuance of a
Default or Unmatured Default the Agent or the Required Lenders may, at their
option, by notice to the Company (which notice may be revoked at the option of
the Required Lenders notwithstanding any provision of Section 8.3 requiring
unanimous consent of the Lenders to reductions in interest rates), declare that
no Advance may be made as, converted into or continued as a Eurodollar Advance.
During the continuance of a Default the Agent or the Required Lenders may, at
their option, by notice to the Company (which notice may be revoked at the
option of the Required Lenders notwithstanding any provision of Section 8.3
requiring unanimous consent of the Lenders to reductions in interest rates),
declare that (i) each Eurodollar Advance shall bear interest for the remainder
of the applicable Interest Period at the rate otherwise applicable to such
Interest Period plus 2% per annum, (ii) each Floating Rate Advance shall bear
interest at a rate per annum equal to the Floating Rate in effect from time to
time plus 2% per annum and (iii) the LC Fee shall be increased by 2% per annum,
provided that, during the continuance of a Default under subsection (g), (h) or
(i) of Article VII, the interest rates set forth in clauses (i) and (ii) above
and the increase in the LC Fee set forth in clause (iii) above shall be
applicable to all Credit Extensions without any election or action on the part
of the Agent or any Lender.
2.13. Interest Payment Dates; Interest and Fee Basis. Interest accrued
on each Floating Rate Advance shall be payable on each Payment Date, commencing
with the first such date to occur after the date hereof and at maturity.
Interest accrued on each Eurodollar Advance shall be payable on the last day of
its applicable Interest Period, on any date on which the Eurodollar Advance is
prepaid, whether by acceleration or otherwise, and at maturity. Interest accrued
on each Eurodollar Advance having an Interest Period longer than three months
shall also be payable on the last day of each three-month interval during such
Interest Period. Interest on all Eurodollar Advances, unused commitment fees and
LC Fees shall be calculated for actual days elapsed on the basis of a 360-day
year. Interest on Floating Rate Advances shall be calculated for actual days
elapsed on the basis of a 365-day year. Interest shall be payable for the day an
Advance is made but not for the day of any payment on the amount paid if payment
is received prior to noon (local time) at the place of payment. If any payment
of principal of or interest on an Advance shall become due on a day which is not
a Business Day, such payment shall be made on the next succeeding Business Day
and, in the case of a principal payment, such extension of time shall be
included in computing interest in connection with such payment. After giving
effect to any Loan,
37
Advance, continuation, or conversion of any Eurodollar Rate Loan, there may not
be more than four different Interest Periods in effect hereunder.
2.14. Voluntary Prepayments. The Revolving Borrowers may from time to
time prepay, without penalty or premium, all outstanding Floating Rate Advances,
or, in a minimum aggregate amount of $500,000 or any integral multiple of
$500,000 in excess thereof, any portion of the outstanding Floating Rate
Advances upon two Business Days' prior notice to the Agent. The Revolving
Borrowers may also from time to time prepay, subject to the payment of any
funding indemnification amounts required by Section 3.4 but without penalty or
premium, all outstanding Eurodollar Advances, or, in a minimum aggregate amount
of $1,000,000 or any integral multiple of $500,000 in excess thereof, any
portion of the outstanding Eurodollar Advances upon three Business Days' prior
notice to the Agent. All such prepayments shall prepay the Credit Extensions of
the Company before prepaying Credit Extensions to the U.K. Borrower.
2.15. Mandatory Prepayments.
(a) Borrowing Base Compliance. Except for Overadvances
permitted pursuant to Section 2.1.4(b), if at any time the Aggregate
Credit Exposure exceeds the amount permitted pursuant to Section 2.1.6,
the Borrowers shall immediately repay the Loans and Reimbursement
Obligations by at least the amount of such excess. If any such excess
remains after repayment in full of all outstanding Loans and
Reimbursement Obligations, the Borrowers shall provide cash collateral
or a Supporting Letter of Credit for the LC Obligations in the manner
set forth in Section 2.1.2(l) to the extent required to eliminate such
excess. All such repayments shall repay the Credit Extensions of the
Company before prepaying Credit Extensions to the U.K. Borrower.
(b) Sale of Assets. Immediately upon receipt by any Loan Party
of the Net Cash Proceeds of any asset disposition (other than an asset
disposition permitted by Section 6.19), unless the Required Lenders
determine not to require such prepayment, the Company shall prepay the
Obligations in an amount equal to all such Net Cash Proceeds. Any such
prepayment shall be applied first, to pay the principal of the
Non-Ratable Loans, Overadvances and Protective Advances, second, to pay
the principal of the Revolving Loans and Reimbursement Obligations
owing by the Company with a concomitant reduction in the Commitments,
third, to pay the principal of the Revolving Loans and Reimbursement
Obligations owing by the U.K. Borrower with a concomitant reduction in
the Commitments, fourth, to pay the principal of the Swingline Loans
with a concomitant reduction in the Commitments, and fifth, to cash
collateralize outstanding Facility LCs.
(c) Exchange Rates. The Agent may (but is not required), and
shall upon the written request of the Required Lenders, determine the
Dollar Amount of the Aggregate Credit Exposure at any time to determine
if a payment is required under Section 2.15(a).
(d) Insurance/Condemnation Proceeds. Any insurance or
condemnation proceeds to be applied to the Obligations in accordance
with Section 6.7(c) shall be applied as follows: first, to pay the
principal of the Non-Ratable Loans, Overadvances and Protective
Advances, second, to pay the principal of the Revolving Loans and
Reimbursement Obligations owing by the Company, third, to pay the
principal of the Revolving Loans and Reimbursement Obligations owing by
the U.K. Borrower, fourth, to pay the principal of the Swingline Loans,
and fifth, to cash collateralize outstanding Facility LCs. The
Commitment shall not be permanently reduced by the amount of any such
prepayments. If the precise amount of insurance or condemnation
proceeds allocable to Inventory as compared to Equipment, Fixtures and
real Property are not
38
otherwise determined, the allocation and application of those proceeds
shall be determined by the Agent, subject to the approval of Required
Lenders.
(e) General. Without in any way limiting the foregoing,
immediately upon receipt by any Loan Party of proceeds of any sale of
any Collateral, the Company shall cause such Loan Party to deliver such
proceeds to the Agent, or deposit such proceeds in a deposit account
subject to a Deposit Account Control Agreement. All of such proceeds
shall be applied as set forth above or otherwise as provided in Section
2.18. Nothing in this Section 2.15 shall be construed to constitute
Agent's or any Lender's consent to any transaction that is not
permitted by other provisions of this Agreement or the other Loan
Documents.
2.16. Termination of the Facility.
(a) Without limiting Section 2.3 or Section 8.1, (a) the
Aggregate Commitments shall expire on the Termination Date and (b) the
Aggregate Credit Exposure and all other unpaid Obligations shall be
paid in full by the Borrower owing such amount on the Termination Date.
(b) The Company may terminate this Agreement upon at least 10
Business Days' prior written notice thereof to the Agent and the
Lenders, upon (i) the payment in full of all outstanding Loans,
together with accrued and unpaid interest thereon, (ii) the
cancellation and return of all outstanding Facility LCs (or
alternatively, with respect to each such Facility LC, the furnishing to
the Agent of a cash deposit or Supporting Letter of Credit as required
by Section 2.1.2(l)), (iii) the payment in full of the early
termination fee set forth in the following sentence (the "Prepayment
Fee"), (iv) the payment in full of all reimbursable expenses and other
Obligations together with accrued and unpaid interest thereon, and (v)
the payment in full of any amount due under Section 3.4. Subject to
Section 2.24, if this Agreement is terminated at any time prior to the
Termination Date, whether pursuant to this Section 2.16 or pursuant to
Section 8.1, the Company shall pay to the Agent, for the account of the
Lenders, an early termination fee determined in accordance with the
following table:
===================================================== ====================================
Period during which early
termination occurs Prepayment Fee
===================================================== ====================================
On or prior to the first anniversary of the Closing 1.0% of the Aggregate Commitment
Date
===================================================== ====================================
After the first anniversary of the Closing Date but 0.5% of the Aggregate Commitment
on or prior to the second anniversary of the
Closing Date
----------------------------------------------------- ------------------------------------
After the second anniversary of the Closing Date None
but on or prior to the third anniversary of the
Closing Date
===================================================== ====================================
No such Prepayment Fee shall be payable in the event this Agreement is
terminated in connection with refinancing of the Obligations in a transaction in
which Bank One or one of its Affiliates that is a banking institution provides
or arranges a replacement bank credit facility for the Company.
2.17. Method of Payment.
(a) All payments of the Obligations hereunder shall be made,
without setoff, deduction, or counterclaim, in immediately available funds to
the Agent at the Agent's address specified pursuant to Article XIII, or at any
other Lending Installation of the Agent specified in writing by the
39
Agent to the Company, by noon (local time) on the date when due and shall be
applied ratably by the Agent among the Lenders. Any payment received by the
Agent after such time shall be deemed to have been received on the following
Business Day and any applicable interest or fee shall continue to accrue. Each
payment delivered to the Agent for the account of any Lender shall be delivered
promptly by the Agent to such Lender in the same type of funds that the Agent
received at its address specified pursuant to Article XIII or at any Lending
Installation specified in a notice received by the Agent from such Lender.
(b) At the election of the Agent, all payments of principal,
interest, reimbursement obligations in connection with Facility LCs, fees,
premiums, reimbursable expenses (including, without limitation, all
reimbursement for fees and expenses pursuant to Section 9.6), and other sums
payable under the Loan Documents, may be paid from the proceeds of Advances made
hereunder whether made following a request by the Company pursuant to Section
2.1 or a deemed request as provided in this Section 2.17 or may be deducted from
the Funding Account or any other deposit account of any Company maintained with
the Agent. The Borrowers hereby irrevocably authorize (i) the Agent to make an
Advance for the purpose of paying all amounts from time to time due under the
Loan Documents and agrees that all such amounts charged shall constitute Loans
(including Non-Ratable Loans, Overadvances, Protective Advances and Swingline
Loans) and that all such Advances shall be deemed to have been requested
pursuant to Section 2.1 and (ii) the Agent to charge the Funding Account or any
other deposit account of the Company maintained with Bank One for each payment
of principal, interest and fees as it becomes due hereunder. The Agent agrees to
give notice to the Company reasonably promptly after the making of any Advance
described in the foregoing sentence.
2.18. Apportionment, Application, and Reversal of Payments.
(a) Except as otherwise required pursuant to Section 2.19,
principal and interest payments shall be apportioned ratably among the
Lenders as set forth in this Article II and payments of the fees shall,
as applicable, be apportioned ratably among the Lenders, except for
fees payable solely to the Agent and the LC Issuer and except as
provided in Section 2.10(c). All payments shall be remitted to the
Agent and all such payments not relating to principal or interest of
specific Loans or not constituting payment of specific fees as
specified by the Company, and all proceeds of any Collateral received
by the Agent, shall be applied, ratably, subject to the provisions of
this Agreement, first, to pay any fees, indemnities, or expense
reimbursements including amounts then due to the Agent from the any
Borrower (other than in connection with Banking Services or Rate
Management Obligations), second, to payment of any amounts owing with
respect to Banking Services and any amounts owing to the Agent, any
Lender or any of their Affiliates with respect to Exchange Rate
Management Obligations, third, to pay any fees or expense
reimbursements then due to the Lenders from any Borrower (other than in
connection with Banking Services or Exchange Rate Management
Obligations), fourth, to pay interest due in respect of the Loans,
including Non-Ratable Loans, Overadvances, Protective Advances and
Swingline Loans, fifth, to pay or prepay principal of the Non-Ratable
Loans, Overadvances and Protective Advances, sixth, to pay or prepay
principal of the Revolving Loans (other than Non-Ratable Loans,
Overadvances and Protective Advances) and unpaid reimbursement
obligations in respect of Facility LCs owing by the Company, seventh,
to pay or prepay principal of the Revolving Loans (other than
Non-Ratable Loans, Overadvances and Protective Advances) and unpaid
reimbursement obligations in respect of Facility LCs owing by the U.K.
Borrower, eighth, to pay or prepay principal of the Swingline Loans,
ninth, to pay an amount to the Agent equal to one hundred ten percent
(110%) of the aggregate undrawn face amount of all outstanding Facility
LCs and the aggregate amount of any unpaid reimbursement obligations in
respect of Facility LCs, to be held as cash collateral for such
Obligations, and tenth, to the payment of any other Secured Obligation
due to the Agent or any Lender by the Company. Notwithstanding anything
to the contrary contained in this Agreement, unless so directed by the
Company, or unless a
40
Default is in existence, neither the Agent nor any Lender shall apply
any payment which it receives to any Eurodollar Loan, except (a) on the
expiration date of the Interest Period applicable to any such
Eurodollar Loan or (b) in the event, and only to the extent, that there
are no outstanding Floating Rate Loans and, in any event, the Company
shall pay the Eurodollar breakage losses in accordance with Section
3.4. The Agent and the Lenders shall have the continuing and exclusive
right to apply and reverse and reapply any and all such payments
described in the foregoing sentence (which excludes payments relating
to principal or interest of specific Loans or constituting payment of
specific fees as specified by the Company) and proceeds of Collateral
to any portion of the Obligations.
(b) Notwithstanding the foregoing, no payments of principal,
interest, fees or other amounts 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: First, if
applicable to any payments due from such Defaulting Lender to the
Agent, and 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.
2.19. Settlement. Each Lender's funded portion of the Loans is intended
by the Lenders to be equal at all times to such Lender's Pro Rata Share of the
outstanding Loans. Notwithstanding such agreement, the Agent, Bank One, and the
Lenders agree (which agreement shall not be for the benefit of or enforceable by
the Loan Parties) that in order to facilitate the administration of this
Agreement and the other Loan Documents, settlement among them as to the Loans,
including the Non-Ratable Loans, Overadvances and the Protective Advances shall
take place on a periodic basis in accordance with the following provisions:
(a) The Agent shall request settlement (a "Settlement") with
the Lenders on at least a weekly basis, or on a more frequent basis at
the Agent's election, (i) for itself, with respect to each Non-Ratable
Loan, Overadvance and Protective Advance, and (ii) with respect to
collections received, in each case, by notifying the Lenders of such
requested Settlement by telecopy, telephone, or e-mail no later than
12:00 noon (Chicago time) on the date of such requested Settlement (the
"Settlement Date"). Each Lender (other than the Agent, in the case of
the Non-Ratable Loans, Overadvances, Protective Advances and Swingline
Loans) shall transfer the amount of such Lender's Pro Rata Share of the
outstanding principal amount of the applicable Loan with respect to
which Settlement is requested to the Agent, to such account of the
Agent as the Agent may designate, not later than 2:00 p.m. (Chicago
time), on the Settlement Date applicable thereto. Settlements may occur
during the existence of a Default or an Unmatured Default and whether
or not the applicable conditions precedent set forth in Section 4.2
have then been satisfied. Such amounts transferred to the Agent shall
be applied against the amounts of the applicable Loan and, together
with Bank One's Pro Rata Share of such Non-Ratable Loan, Overadvance or
Protective Advance, shall constitute Loans of such Lenders,
respectively. If any such amount is not transferred to the Agent by any
Lender on the Settlement Date applicable thereto, the Agent shall be
entitled to recover such amount on demand from such Lender together
with interest thereon as specified in Section 2.23.
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(b) From and after the date, if any, on which any Lender is
required to fund its participation in any Non-Ratable Loan, Overadvance
or Protective Advance purchased pursuant to Section 2.2, the Agent
shall promptly distribute to such Lender, such Lender's Pro Rata Share
of all payments of principal and interest and all proceeds of
Collateral received by the Agent in respect of such Loan.
2.20. Indemnity for Returned Payments. If after receipt of any payment
which is applied to the payment of all or any part of the Obligations, the Agent
or any Lender is for any reason compelled to surrender such payment or proceeds
to any Person because such payment or application of proceeds is invalidated,
declared fraudulent, set aside, determined to be void or voidable as a
preference, impermissible setoff, or a diversion of trust funds, or for any
other reason, then the Obligations or part thereof intended to be satisfied
shall be revived and continued and this Agreement shall continue in full force
as if such payment or proceeds had not been received by the Agent or such Lender
and the Company shall be liable to pay to the Agent and the Lenders, and each
Company hereby indemnifies the Agent and the Lenders and holds the Agent and the
Lenders harmless for the amount of such payment or proceeds surrendered. The
provisions of this Section 2.20 shall be and remain effective notwithstanding
any contrary action which may have been taken by the Agent or any Lender in
reliance upon such payment or application of proceeds, and any such contrary
action so taken shall be without prejudice to the Agent's and the Lenders'
rights under this Agreement and shall be deemed to have been conditioned upon
such payment or application of proceeds having become final and irrevocable. The
provisions of this Section 2.20 shall survive the termination of this Agreement.
2.21. Noteless Agreement; Evidence of Indebtedness.
(a) Each Lender shall maintain in accordance with its usual
practice an account or accounts evidencing the indebtedness of the
Borrowers to such Lender resulting from each Loan made by such Lender
from time to time, including the amounts of principal and interest
payable and paid to such Lender from time to time hereunder.
(b) The Agent shall also maintain accounts in which it will
record (a) the amount of each Loan extended hereunder, the Type thereof
and the Interest Period with respect thereto, (b) the amount of any
principal or interest due and payable or to become due and payable from
the Borrowers to each Lender hereunder, (c) the original stated amount
of each Facility LC and the amount of LC Obligations outstanding at any
time, and (d) the amount of any sum received by the Agent hereunder
from the Borrowers and each Lender's share thereof.
(c) The entries maintained in the accounts maintained pursuant
to paragraphs (i) and (ii) above shall be prima facie evidence of the
existence and amounts of the Obligations therein recorded; provided
however, that the failure of the Agent or any Lender to maintain such
accounts or any error therein shall not in any manner affect the
obligation of the Borrowers to repay the Obligations in accordance with
their terms.
(d) Any Lender may request that its Revolving Loans be
evidenced by a promissory note in substantially the form of Exhibit C
(a "Note"). In such event, the Borrowers shall prepare, execute and
deliver to such Lender such Note payable to the order of such Lender.
Thereafter, the Revolving Loans evidenced by such Note and interest
thereon shall at all times (prior to any assignment pursuant to Section
12.3) be represented by one or more Notes payable to the order of the
payee named therein, except to the extent that any such Lender
subsequently returns any such Note for cancellation and requests that
such Revolving Loans once again be evidenced as described in paragraphs
(a) and (b) above.
42
2.22. Lending Installations. Each Lender and the Agent may book its
Loans and its participation in any LC Obligations and the LC Issuer may book the
Facility LCs at any Lending Installation selected by such Lender or the LC
Issuer, as the case may be, and may change its Lending Installation from time to
time. All terms of this Agreement shall apply to any such Lending Installation
and the Loans, Facility LCs, participations in LC Obligations and any Notes
issued hereunder shall be deemed held by each Lender or the LC Issuer, as the
case may be, for the benefit of any such Lending Installation. Each Lender and
the LC Issuer may, by written notice to the Agent and the Borrowers in
accordance with Article XIII, designate replacement or additional Lending
Installations through which Loans will be made by it or Facility LCs will be
issued by it and for whose account Loan payments or payments with respect to
Facility LCs are to be made.
2.23. Non-Receipt of Funds by the Agent. Unless a Borrower or a Lender,
as the case may be, notifies the Agent prior to the date on which it is
scheduled to make payment to the Agent of (i) in the case of a Lender, the
proceeds of a Loan or (ii) in the case of a Borrower, a payment of principal,
interest or fees to the Agent for the account of the Lenders, that it does not
intend to make such payment, the Agent may assume that such payment has been
made. The Agent may, but shall not be obligated to, make the amount of such
payment available to the intended recipient in reliance upon such assumption. If
such Lender or Borrower, as the case may be, has not in fact made such payment
to the Agent, the recipient of such payment shall, on demand by the Agent, repay
to the Agent the amount so made available together with interest thereon in
respect of each day during the period commencing on the date such amount was so
made available by the Agent until the date the Agent recovers such amount at a
rate per annum equal to (x) in the case of payment by a Lender, the Federal
Funds Effective Rate for such day for the first three days and, thereafter, the
interest rate applicable to the relevant Loan or (y) in the case of payment by a
Borrower, the interest rate applicable to the relevant Loan.
2.24. Market Disruption. Notwithstanding the satisfaction of all
conditions referred to in Article II and Article IV with respect to any Advance
in any Permitted Currency other than Dollars, if there shall occur on or prior
to the date of such Advance any change in national or international financial,
political or economic conditions or currency exchange rates or exchange controls
which would in the reasonable opinion of the Agent make it impracticable for the
Swingline Loan to be denominated in the Eligible Currency specified by the
Borrower, then the Agent shall forthwith give notice thereof to the Borrower,
and such Swingline Loan shall not be denominated in such Eligible Currency but
shall, be made on such Credit Extension Date in Dollars, in an aggregate
principal amount equal to the Dollar Amount of the aggregate principal amount
specified in the related notice for the borrowing or continuation of a Swingline
Loan made by such Borrower, as the case may be, as Floating Rate Loans, unless
such Borrower notifies the Agent at least one Business Day before such date that
(i) it elects not to borrow on such date or (ii) it elects to borrow on such
date in a different Eligible Currency, as the case may be, in which the
denomination of such Loans would in the opinion of the Agent be practicable and
in an aggregate principal amount equal to the Dollar Amount of the aggregate
principal amount equal to the Dollar Amount of the aggregate principal amount
specified in the related notice for the borrowing or continuation of a Swingline
Loan made by such Borrower.
2.25. Judgment Currency. If for the purposes of obtaining judgment in
any court it is necessary to convert a sum due from a Borrower hereunder in the
currency expressed to be payable herein (the "specified currency") into another
currency, the parties hereto agree, to the fullest extent that they may
effectively do so, that the rate of exchange used shall be that at which in
accordance with normal banking procedures the Agent could purchase the specified
currency with such other currency at the Agent's main office on the Business Day
preceding that on which final, non-appealable judgment is given. The obligations
of the Borrowers in respect of any sum due to any Lender or the Agent hereunder
shall, notwithstanding any judgment in a currency other than the specified
currency, be discharged only to the extent that on the Business Day following
receipt by such Lender or the Agent (as the case may be) of any
43
sum adjudged to be so due in such other currency such Lender or the Agent (as
the case may be) may in accordance with normal, reasonable banking procedures
purchase the specified currency with such other currency. If the amount of the
specified currency so purchased is less than the sum originally due to such
Lender or the Agent, as the case may be, in the specified currency, the
Borrowers agree, to the fullest extent that it may effectively do so, as a
separate obligation and notwithstanding any such judgment, to indemnify such
Lender or the Agent, as the case may be, against such loss, and if the amount of
the specified currency so purchased exceeds (a) the sum originally due to any
Lender or the Agent, as the case may be, in the specified currency and (b) any
amounts shared with other Lenders as a result of allocations of such excess as a
disproportionate payment to such Lender under Section 12.2, such Lender or the
Agent, as the case may be, agrees to remit such excess to the Borrowers.
ARTICLE III
YIELD PROTECTION; TAXES
3.1. Yield Protection. If, on or after the Closing Date, the adoption
of any law or any governmental or quasi-governmental rule, regulation, policy,
guideline or directive (whether or not having the force of law), or any change
in the interpretation or administration thereof by any governmental or
quasi-governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by any Lender or
applicable Lending Installation or the LC Issuer with any request or directive
(whether or not having the force of law) of any such authority, central bank or
comparable agency:
(a) subjects any Lender or any applicable Lending Installation
or the LC Issuer to any Taxes, or changes the basis of taxation of
payments (other than with respect to Excluded Taxes) to any Lender or
the LC Issuer in respect of its Eurodollar Loans, Facility LCs or
participations therein, or
(b) imposes or increases or deems applicable any reserve,
assessment, insurance charge, special deposit or similar requirement
against assets of, deposits with or for the account of, or credit
extended by, any Lender or any applicable Lending Installation or the
LC Issuer (other than reserves and assessments taken into account in
determining the interest rate applicable to Eurodollar Advances), or
(c) imposes any other condition the result of which is to
increase the cost to any Lender or any applicable Lending Installation
or the LC Issuer of making, funding or maintaining its Loans, or of
issuing or participating in Facility LCs, or reduces any amount
receivable by any Lender or any applicable Lending Installation or the
LC Issuer in connection with its Loans, Facility LCs or participations
therein, or requires any Lender or any applicable Lending Installation
or the LC Issuer to make any payment calculated by reference to the
amount of Loans, Facility LCs or participations therein held or
interest or LC Fees received by it, by an amount deemed material by
such Lender or the LC Issuer as the case may be,
and the result of any of the foregoing is to increase the cost to such Lender or
applicable Lending Installation or the LC Issuer, as the case may be, of making
or maintaining its Eurodollar Loans or Commitment or of issuing or participating
in Facility LCs or to reduce the return received by such Lender or applicable
Lending Installation or the LC Issuer, as the case may be, in connection with
such
44
Eurodollar Loans, Commitment, Facility LCs or participations therein, then,
within fifteen days of demand by such Lender or the LC Issuer, as the case may
be, each Borrower, with respect to amounts attributable to such Borrower as
determined by the Agent, shall pay such Lender or the LC Issuer, as the case may
be, such additional amount or amounts as will compensate such Lender or the LC
Issuer, as the case may be, for such increased cost or reduction in amount
received.
3.2. Changes in Capital Adequacy Regulations. If a Lender or the LC
Issuer determines the amount of capital required or expected to be maintained by
such Lender or the LC Issuer, any Lending Installation of such Lender or the LC
Issuer, or any corporation controlling such Lender or the LC Issuer is increased
as a result of a Change, then, within fifteen days of demand by such Lender or
the LC Issuer, each Borrower, with respect to amounts attributable to such
Borrower as determined by the Agent, shall pay such Lender or the LC Issuer the
amount necessary to compensate for any shortfall in the rate of return on the
portion of such increased capital which such Lender or the LC Issuer determines
is attributable to this Agreement, its Credit Exposure or its Commitment to make
Loans and issue or participate in Facility LCs, as the case may be, hereunder
(after taking into account such Lender's or the LC Issuer's policies as to
capital adequacy). "Change" means (i) any change after the date of this
Agreement in the Risk-Based Capital Guidelines (as defined below) or (ii) any
adoption of or change in any other law, governmental or quasi-governmental rule,
regulation, policy, guideline, interpretation, or directive (whether or not
having the force of law) after the date of this Agreement which affects the
amount of capital required or expected to be maintained by any Lender or the LC
Issuer or any Lending Installation or any corporation controlling any Lender or
the LC Issuer. "Risk-Based Capital Guidelines" means (i) the risk-based capital
guidelines in effect in the U.S. on the date of this Agreement, including
transition rules, and (ii) the corresponding capital regulations promulgated by
regulatory authorities outside the U.S. implementing the July 1988 report of the
Basle Committee on Banking Regulation and Supervisory Practices Entitled
"International Convergence of Capital Measurements and Capital Standards,"
including transition rules, and any amendments to such regulations adopted prior
to the date of this Agreement.
3.3. Availability of Types of Advances. If any Lender determines that
maintenance of its Eurodollar Loans at a suitable Lending Installation would
violate any applicable law, rule, regulation, or directive, whether or not
having the force of law, or if the Required Lenders determine that (i) deposits
of a type and maturity appropriate to match fund Eurodollar Advances are not
available or (ii) the interest rate applicable to Eurodollar Advances does not
accurately reflect the cost of making or maintaining Eurodollar Advances, then
the Agent shall suspend the availability of Eurodollar Advances and require any
affected Eurodollar Advances to be repaid or converted to Floating Rate
Advances, subject to the payment of any funding indemnification amounts required
by Section 3.4.
3.4. Funding Indemnification. If any payment of a Eurodollar Advance
occurs on a date which is not the last day of the applicable Interest Period,
whether because of acceleration, prepayment or otherwise, or a Eurodollar
Advance is not made on the date specified by a Borrower for any reason other
than default by the Lenders, such Borrower will indemnify each Lender for any
loss or cost incurred by it resulting therefrom, including, without limitation,
any loss or cost in liquidating or employing deposits acquired to fund or
maintain such Eurodollar Advance.
3.5. Taxes.
(a) All payments by the Borrowers to or for the account of any
Lender, the LC Issuer or the Agent hereunder or under any Note or
Facility LC Application shall be made free and clear of and without
deduction for any and all Taxes. If any Borrower shall be required by
law to deduct any Taxes from or in respect of any sum payable hereunder
to any Lender, the LC Issuer or the Agent, (a) the sum payable shall be
increased as necessary so that after making all required
45
deductions (including deductions applicable to additional sums payable
under this Section 3.5) such Lender, the LC Issuer or the Agent (as the
case may be) receives an amount equal to the sum it would have received
had no such deductions been made, (b) such Borrower shall make such
deductions, (c) such Borrower shall pay the full amount deducted to the
relevant authority in accordance with applicable law and (d) such
Borrower shall furnish to the Agent the original copy of a receipt
evidencing payment thereof within thirty days after such payment is
made.
(b) In addition, the Borrowers hereby agree to pay any present
or future stamp or documentary taxes and any other excise or property
taxes, charges or similar levies which arise from any payment made
hereunder or under any Note or Facility LC Application or from the
execution or delivery of, or otherwise with respect to, this Agreement
or any Note or Facility LC Application ("Other Taxes").
(c) The Borrowers, jointly and severally, hereby agree to
indemnify the Agent, the LC Issuer and each Lender for the full amount
of Taxes or Other Taxes (including, without limitation, any Taxes or
Other Taxes imposed on amounts payable under this Section 3.5) paid by
the Agent, the LC Issuer or such Lender as a result of its Commitment,
any Loans made by it hereunder, any Facility LC issued hereunder or
otherwise in connection with its participation in this Agreement and
any liability (including penalties, interest and expenses) arising
therefrom or with respect thereto. Payments due under this
indemnification shall be made within thirty days of the date the Agent,
the LC Issuer or such Lender makes demand therefor pursuant to Section
3.6.
(d) Each Lender that is not incorporated under the laws of the
U.S. or a state thereof (each a "Non-U.S. Lender") agrees that it will,
not more than ten Business Days after the date of this Agreement, (i)
deliver to the Agent two duly completed copies of U.S. Internal Revenue
Service Form W-8BEN or W-8ECI, certifying in either case that such
Lender is entitled to receive payments under this Agreement without
deduction or withholding of any U.S. federal income taxes, and (ii)
deliver to the Agent a U.S. Internal Revenue Form W-8 or W-9, as the
case may be, and certify that it is entitled to an exemption from U.S.
backup withholding tax. Each Non-U.S. Lender further undertakes to
deliver to each of the Company and the Agent (x) renewals or additional
copies of such form (or any successor form) on or before the date that
such form expires or becomes obsolete, and (y) after the occurrence of
any event requiring a change in the most recent forms so delivered by
it, such additional forms or amendments thereto as may be reasonably
requested by the Company or the Agent. All forms or amendments
described in the preceding sentence shall certify that such Lender is
entitled to receive payments under this Agreement without deduction or
withholding of any U.S. federal income taxes, unless an event
(including without limitation any change in treaty, law or regulation)
has occurred prior to the date on which any such delivery would
otherwise be required which renders all such forms inapplicable or
which would prevent such Lender from duly completing and delivering any
such form or amendment with respect to it and such Lender advises the
Company and the Agent that it is not capable of receiving payments
without any deduction or withholding of U.S. federal income tax.
(e) For any period during which a Non-U.S. Lender has failed
to provide the Company with an appropriate form pursuant to clause
(iv), above (unless such failure is due to a change in treaty, law or
regulation, or any change in the interpretation or administration
thereof by any governmental authority, occurring subsequent to the date
on which a form originally was required to be provided), such Non-U.S.
Lender shall not be entitled to indemnification under this Section 3.5
with respect to Taxes imposed by the U.S.; provided that, should a
Non-U.S. Lender which is otherwise exempt from or subject to a reduced
rate of withholding tax become subject to Taxes because of its failure
to deliver a form required under clause (iv), above, the Company
46
shall take such steps as such Non-U.S. Lender shall reasonably request
to assist such Non-U.S. Lender to recover such Taxes.
(f) Any Lender that is entitled to an exemption from or
reduction of withholding tax with respect to payments under this
Agreement or any Note pursuant to the law of any relevant jurisdiction
or any treaty shall deliver to the Company (with a copy to the Agent),
at the time or times prescribed by applicable law, such properly
completed and executed documentation prescribed by applicable law as
will permit such payments to be made without withholding or at a
reduced rate.
(g) If the U.S. Internal Revenue Service or any other
governmental authority of the U.S. or any other country or any
political subdivision thereof asserts a claim that the Agent did not
properly withhold tax from amounts paid to or for the account of any
Lender (because the appropriate form was not delivered or properly
completed, because such Lender failed to notify the Agent of a change
in circumstances which rendered its exemption from withholding
ineffective, or for any other reason), such Lender shall indemnify the
Agent fully for all amounts paid, directly or indirectly, by the Agent
as tax, withholding therefor, or otherwise, including penalties and
interest, and including taxes imposed by any jurisdiction on amounts
payable to the Agent under this subsection, together with all costs and
expenses related thereto (including attorneys fees and time charges of
attorneys for the Agent, which attorneys may be employees of the
Agent). The obligations of the Lenders under this Section 3.5(g) shall
survive the payment of the Obligations and termination of this
Agreement.
3.6. Lender Statements; Survival of Indemnity. To the extent reasonably
possible, each Lender shall designate an alternate Lending Installation with
respect to its Eurodollar Loans to reduce any liability of the Borrowers to such
Lender under Sections 3.1, 3.2 and 3.5 or to avoid the unavailability of
Eurodollar Advances under Section 3.3, so long as such designation is not, in
the judgment of such Lender, disadvantageous to such Lender. Each Lender shall
deliver a written statement of such Lender to the Borrowers (with a copy to the
Agent) as to the amount due, if any, under Section 3.1, 3.2, 3.4 or 3.5. Such
written statement shall set forth in reasonable detail the calculations upon
which such Lender determined such amount and shall be final, conclusive and
binding on the Borrowers in the absence of manifest error. Determination of
amounts payable under such Sections in connection with a Eurodollar Loan shall
be calculated as though each Lender funded its Eurodollar Loan through the
purchase of a deposit of the type and maturity corresponding to the deposit used
as a reference in determining the Eurodollar Rate applicable to such Loan,
whether in fact that is the case or not. Unless otherwise provided herein, the
amount specified in the written statement of any Lender shall be payable on
demand after receipt by the Borrowers of such written statement. The obligations
of the Borrowers under Sections 3.1, 3.2, 3.4 and 3.5 shall survive payment of
the Obligations and termination of this Agreement.
3.7. Replacement of Lender. If a Borrower is required pursuant to
Section 3.1, 3.2 or 3.5 to make any additional payment to any Lender or if any
Lender's obligation to make or continue, or to convert Floating Rate Advances
into, Eurodollar Advances shall be suspended pursuant to Section 3.3 (any Lender
so affected an "Affected Lender"), the Company may elect, if such amounts
continue to be charged or such suspension is still effective, to replace such
Affected Lender as a Lender party to this Agreement, provided that, no Default
or Unmatured Default shall have occurred and be continuing at the time of such
replacement, and provided further that, concurrently with such replacement, (i)
another bank or other entity which is reasonably satisfactory to the Company and
the Agent shall agree, as of such date, to purchase for cash the Advances and
other Obligations due to the Affected Lender pursuant to an Assignment Agreement
and to become a Lender for all purposes under this Agreement and to assume all
obligations of the Affected Lender to be terminated as of such date and to
comply with the requirements of Section 12.3 applicable to assignments, and (ii)
the Borrowers shall pay to such Affected Lender in
47
same day funds on the day of such replacement (A) all interest, fees and other
amounts then accrued but unpaid to such Affected Lender by the Borrowers
hereunder to and including the date of termination, including without limitation
payments due to such Affected Lender under Sections 3.1, 3.2 and 3.5, and (B) an
amount, if any, equal to the payment which would have been due to such Lender on
the day of such replacement under Section 3.4 had the Loans of such Affected
Lender been prepaid on such date rather than sold to the replacement Lender.
3.8 Non-U.S. Reserve Costs or Fees. If any law or any governmental or
quasi-governmental rule, regulation, policy, guideline or directive of any
jurisdiction outside of the United States of America or any subdivision thereof
(whether or not having the force of law), imposes or deems applicable any
reserve requirement against or fee with respect to assets of, deposits with or
for the account of, or credit extended by, any Lender or any applicable Lending
Installation, and the result of the foregoing is to increase the cost to such
Lender or applicable Lending Installation of making or maintaining its Loans to
any Foreign Borrowing Subsidiary or its Commitment to any Foreign Borrowing
Subsidiary or to reduce the return received by such Lender or applicable Lending
Installation in connection with such Loans to any Foreign Borrowing Subsidiary
or Commitment to any Foreign Borrowing Subsidiary, then, within fifteen days of
demand by such Lender, such Foreign Borrowing Subsidiary shall pay such Lender
such additional amount or amounts as will compensate such Lender for such
increased cost or reduction in amount received, provided that such Foreign
Borrowing Subsidiary shall not be required to compensate any Lender for such
non-U.S. reserve costs or fees to the extent that an amount equal to such
reserve costs or fees is received by such Lender as a result of the calculation
of the interest rate applicable to such Loan.
ARTICLE IV
CONDITIONS PRECEDENT
4.1. Effectiveness. This Agreement will not become effective unless the
Loan Parties have satisfied each of the following conditions in a manner
satisfactory to the Agent and the Lenders, except such conditions that the Agent
has agreed in writing may be satisfied post closing, and with respect to any
condition requiring delivery of any agreement, certificate, document, or
instrument, the Loan Parties shall have furnished to the Agent sufficient copies
of any such agreement, certificate, document, or instrument for distribution to
the Lenders.
(a) This Agreement or counterparts hereof shall have been duly
executed by each Loan Party, the Agent and the Lenders; and the Agent
shall have received duly executed copies of the Loan Documents and such
other documents, instruments, agreements and legal opinions as the
Agent shall reasonably request in connection with the transactions
contemplated by this Agreement and the other Loan Documents, each in
form and substance reasonably satisfactory to the Agent.
(b) Each Loan Party shall have delivered copies of its
articles or certificate of incorporation or organization, together with
all amendments, and a certificate of good standing, each certified by
the appropriate governmental officer in its jurisdiction of
incorporation or organization.
(c) Each Loan Party shall have delivered copies, certified by
its Secretary or Assistant Secretary, of its by-laws or operating or
management agreement and of its Board of
48
Directors' resolutions or the resolutions of its members and of
resolutions or actions of any other body authorizing the execution of
the Loan Documents to which such Loan Party is a party.
(d) Each Loan Party shall have delivered an incumbency
certificate, executed by its Secretary or Assistant Secretary, which
shall identify by name and title and bear the signatures of the
Authorized Officers and any other officers such Loan Party authorized
to sign the Loan Documents to which such Loan Party is a party, upon
which certificate the Agent and the Lenders shall be entitled to rely
until informed of any change in writing by such Loan Party.
(e) The Company and the Loan Parties shall have delivered a
certificate, signed by the chief financial officer of the Company and
each other Loan Party, stating that on the initial Credit Extension
Date (i) no Default or Unmatured Default has occurred and is
continuing, (ii) the representations and warranties contained in
Article V are true and correct in all material respects as of such
Credit Extension Date, (ii) specifying the deposit account at Bank One
which shall be used as the Funding Account and (iii) certifying any
other factual matters as may be reasonably requested by the Agent or
any Lender.
(f) The Loan Parties shall have delivered a written opinion of
the Loan Parties' counsel, addressed to the Agent, the LC Issuer and
the Lenders in substantially the form of Exhibit D and opinions of
counsel to each Foreign Subsidiary Borrower in form and substance
acceptable to the Agent as determined in its Permitted Discretion.
(g) The Company shall have delivered any Notes requested by a
Lender pursuant to Section 2.21 payable to the order of each such
requesting Lender.
(h) The Company shall have delivered money transfer
authorizations as the Agent may have reasonably requested.
(i) Each Loan Party shall have delivered duly executed copies
of this Agreement and the other Loan Documents to which it is a party.
(j) The Agent shall have received a pay-off and assignment
letter reasonably satisfactory to the Agent from each Lender exiting
the Existing Credit Agreement.
(k) The Agent shall have received all Lien and other searches
that the Agent deems necessary and Liens creating a first priority
security interest in the Collateral in favor of the Agent shall have
been perfected.
(l) The Company shall have delivered a Borrowing Base
Certificate which calculates the Borrowing Base as of the end of the
Business Day immediately preceding the Closing Date.
(m) The Company shall have delivered to the Agent and the
Lenders the unaudited financial statements of the Company and its
Subsidiaries for the period ending on June 29, 2003.
(n) The Agent shall have completed its business due diligence
and the Loan Parties' corporate structure, capital structure, material
accounts and governing documents shall be acceptable to the Agent. In
addition, the terms and conditions of all Indebtedness of each Loan
Party shall be acceptable to Agent.
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(o) All legal (including tax implications) and regulatory
matters, including, but not limited to compliance with applicable
requirements of Regulations U, T and X of the Board of Governors of the
Federal Reserve System, shall be reasonably satisfactory to the Agent
and the Lenders.
(p) The Company shall have delivered evidence of insurance
coverage in form, scope, and substance reasonably satisfactory to the
Agent and otherwise in compliance with the terms of Section 6.7.
(q) The Company shall have delivered each Deposit Account
Control Agreement required to be provided pursuant to Section 6.14.
(r) The Agent shall have determined that (i) since December
29, 2002, there is an absence of any material adverse change or
disruption in primary or secondary loan syndication markets, financial
markets or in capital markets generally that would likely impair
syndication of the Credit Extensions hereunder and (ii) the Loan
Parties shall have fully cooperated with the Agent's syndication
efforts including, without limitation, by providing the Agent with
information regarding the Loan Parties' operations and prospects and
such other information as the Agent in its Permitted Discretion deems
necessary to successfully syndicate the Credit Extensions hereunder.
(s) After giving effect to all Credit Extensions to be made on
the Closing Date and payment of all fees and expenses due hereunder,
and with all of the Loan Parties' indebtedness, liabilities, and
obligations current, the Global Borrowing Base Availability shall not
be less than $35,000,000.
(t) The Company shall have paid all of the fees and expenses
owing to the Agent, the Arranger, the LC Issuer and the Lenders
pursuant to Section 2.10, and Section 9.6(a).
(u) The Company shall have received proceeds of the Second
Secured Notes in an amount equal to at least $72,513,720, upon terms
and conditions satisfactory to the Agent and the Lenders.
(v) The Company shall have received proceeds of the Third
Secured Term Loan in an amount equal to at least $24,250,000.
(w) All final Second Secured Debt Documents, Third Secured
Term Loan Documents and Fourth Secured Term Loan Documents shall be
delivered to the Agent and shall be satisfactory to the Agent.
(x) The Loan Parties shall have delivered such other documents
as the Agent, the LC Issuer, any Lender or their respective counsel may
have reasonably requested.
4.2. Each Credit Extension. Except as otherwise expressly provided
herein, the Lenders shall not be required to make any Credit Extension if on the
applicable Credit Extension Date:
(a) There exists any Default or Unmatured Default or any
Default or Unmatured Default shall result from any such Credit
Extension and the Agent or the Required Lenders shall have determined
not to make any Credit Extension as a result of such Default or
Unmatured Default.
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(b) Any representation or warranty contained in Article V is
untrue or incorrect in any material respect as of such Credit Extension
Date except to the extent any such representation or warranty is stated
to relate solely to an earlier date, and the Agent or the Required
Lenders shall have determined not to make any Credit Extension as a
result of the fact that such representation or warranty is untrue or
incorrect.
(c) After giving effect to any Credit Extension, there is no
Availability.
(d) Any legal matter incident to the making of such Credit
Extension shall not be reasonably satisfactory to the Agent, the
Lenders and their respective counsel.
Each Borrowing Notice or request for issuance of Facility LC with
respect to each such Credit Extension shall constitute a representation and
warranty by the Company that the conditions contained in Sections 4.2(i) and
(ii) have been satisfied.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
Each Loan Party represents and warrants to the Lenders as follows:
5.1. Existence and Standing. Each Loan Party is a corporation,
partnership (in the case of Subsidiaries only) or limited liability company duly
and properly incorporated or organized, as the case may be, validly existing and
(to the extent such concept applies to such entity) in good standing under the
laws of its jurisdiction of incorporation or organization and has all requisite
corporate, partnership or limited liability company authority, as applicable, to
conduct its business in each jurisdiction in which its business is conducted.
5.2. Authorization and Validity. Each Loan Party has the corporate,
partnership or limited liability company power, as applicable, and corporate,
partnership or limited liability company authority, as applicable, and legal
right to execute and deliver the Loan Documents to which it is a party and to
perform its obligations thereunder. The execution and delivery by each Loan
Party of the Loan Documents to which it is a party and the performance of its
obligations thereunder have been duly authorized by proper corporate,
partnership or limited liability company proceedings, as applicable, and the
Loan Documents to which such Loan Party is a party constitute legal, valid and
binding obligations of such Loan Party enforceable against such Loan Party in
accordance with their terms, except as enforceability may be limited by
bankruptcy, insolvency, reorganization, receivership, moratorium, or similar
laws affecting the enforcement of creditors' rights generally and general
principles of equity, (whether applied by a court of law or equity) and the
discretion of the court before which any proceeding therefore may be brought.
5.3. No Conflict; Government Consent. Neither the execution and
delivery by any Loan Party of the Loan Documents to which it is a party, nor the
consummation of the transactions therein contemplated, nor compliance with the
provisions thereof will violate (i) any law, rule, regulation, order, writ,
judgment, injunction, decree or award binding on such Loan Party or (ii) any
Loan Party's articles or certificate of incorporation, partnership agreement,
certificate of partnership, articles or certificate of organization, by-laws, or
operating or other management agreement, as the case may be, or (iii) the
provisions of any indenture, instrument or agreement to which any Loan Party is
a party or is subject, or by which it, or its Property, is bound, or conflict
with or constitute a default thereunder, or result in, or require, the creation
or imposition of any Lien in, of or on the Property of such Loan Party pursuant
to the terms of any such indenture, instrument or agreement. No order, consent,
adjudication, approval, license,
51
authorization, or validation of, or filing, recording or registration with, or
exemption by, or other action in respect of any governmental or public body or
authority, or any subdivision thereof, which has not been obtained by a Loan
Party, is required to be obtained by any Loan Party in connection with the
execution and delivery of the Loan Documents, the borrowings under this
Agreement, the payment and performance by the Loan Parties of the Obligations or
the legality, validity, binding effect or enforceability of any of the Loan
Documents, except for such orders, consents, adjudications, etc., which, if not
obtained, would not reasonably be expected to have a Material Adverse Effect.
5.4. Security Interest in Collateral. The provisions of this Agreement
and the other Loan Documents create legal and valid Liens on all the Collateral
in favor of the Agent, for the benefit of the Agent and the Lenders, and such
Liens constitute perfected and continuing Liens on the Collateral, securing the
Obligations, enforceable against the applicable Loan Party and all third
parties, and having priority over all other Liens on the Collateral except in
the case of (a) Permitted Liens, to the extent any such Permitted Liens would
have priority over the Liens in favor of the Agent pursuant to any applicable
law or agreement and (b) Liens perfected only by possession (including
possession of any certificate of title) to the extent the Agent has not obtained
or does not maintain possession of such Collateral.
5.5 Financial Statements.
(a) The audited consolidated financial statements of the
Company and its Subsidiaries for the period ending on December 29, 2002
heretofore delivered to the Lenders were prepared in accordance with
GAAP (as in effect on the date such statements were prepared) and
fairly present in all material respects the consolidated financial
condition and operations of the Company and its Subsidiaries at such
date and the consolidated results of their operations for the period
then ended. The unaudited consolidated financial statements of the
Company and its Subsidiaries for the Fiscal Month ended June 29, 2003
heretofore delivered by the Company to the Lenders were prepared in
accordance with GAAP (as in effect on the date such statements were
prepared except for the presentation of footnotes and for applicable
normal year-end audit adjustments) and fairly present in all material
respects the consolidated financial condition and operations of the
Company and its Subsidiaries at such date and the consolidated results
of their operations for the period then ended.
(b) The most recent Projections when delivered to the Agent
and the Lenders, including Projections delivered pursuant to Section
6.1(d), represent the Company's good faith estimate of the future
financial performance of the Company for the period set forth therein
and are based on reasonable assumptions, and to the Company's
knowledge, the best information available immediately preceding the
delivery of such Projections.
5.6. Material Adverse Change. Since December 29, 2002, except as set
forth in the Offering Circular, there has been no change in the business,
Property, prospects, condition (financial or otherwise) or results of operations
of the Loan Parties which could reasonably be expected to have a Material
Adverse Effect.
5.7. Taxes. The Loan Parties have filed all U.S. federal tax returns
and all other material tax returns which are required to be filed and have paid
all taxes due pursuant to said returns or pursuant to any assessment received by
any Loan Party, except such taxes, if any, as are being contested in good faith
and as to which adequate reserves have been provided in accordance with GAAP and
as to which no Lien exists. No federal tax liens have been filed and no claims
are being asserted with respect to any federal taxes and, as of the Closing
Date, no other tax liens have been filed and no claims are being asserted with
respect to any such other taxes. The charges, accruals and reserves on the books
of the Loan Parties in respect of any taxes or other governmental charges are
adequate.
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5.8. Litigation and Contingent Obligations. Except as set forth on
Schedule 5.8, there is no litigation, arbitration, governmental investigation,
proceeding or inquiry pending or, to the knowledge of any of their officers,
threatened against or affecting any Loan Party which if adversely decided, could
reasonably be expected to have a Material Adverse Effect or which seeks to
prevent, enjoin or delay the making of any Credit Extensions. Other than any
liability incident to any litigation, arbitration or proceeding which (i) if
adversely decided, could not reasonably be expected to have a Material Adverse
Effect or (ii) is set forth on Schedule 5.8, no Loan Party has any material
contingent obligations not provided for or disclosed in the financial statements
referred to in Section 5.5.
5.9. Capitalization and Subsidiaries. Schedule 5.9 sets forth (a) a
correct and complete list of the name and ownership of each and all of the
Company's Subsidiaries as of the Closing Date, (b) the location of the chief
executive office of the Company and each of its Subsidiaries and each other
location where any of them have maintained their chief executive office in the
past five years, (c) a true and complete listing of each class of each of the
Company's authorized Capital Stock, of which all of such issued shares are
validly issued, outstanding, fully paid and non-assessable, and owned
beneficially and of record by the Persons identified on Schedule 5.9, and (d)
the type of entity of the Company and each of its Subsidiaries. With respect to
each Loan Party, Schedule 5.9 also sets forth as of the Closing Date, the
employer or taxpayer identification number of each Loan Party and the
organizational identification number issued by each Loan Party's jurisdiction of
organization or a statement that no such number has been issued. All of the
issued and outstanding Capital Stock owned by any Loan Party has been (to the
extent such concepts are relevant with respect to such ownership interests) duly
authorized and issued and is fully paid and non-assessable.
5.10. ERISA. The Unfunded Liabilities of all Single Employer Plans do
not in the aggregate exceed $5,000,000. Neither the Company nor any other member
of the Controlled Group has incurred, or is reasonably expected to incur, any
withdrawal liability to Multiemployer Plans in excess of $5,000,000 in the
aggregate. Each Plan complies in all material respects with all applicable
requirements of law and regulations, no Reportable Event has occurred with
respect to any Plan which could cause a Material Adverse Effect, neither the
Company nor any other member of the Controlled Group has withdrawn from any Plan
or initiated steps to do so, and no steps have been taken to reorganize or
terminate any Plan which could reasonably be expected to have a Material Adverse
Effect.
5.11. Accuracy of Information. The information, exhibits and reports,
including without limitation the Offering Circular, furnished by any Loan Party
to the Agent or to any Lender in connection with the negotiation of, or
compliance with, the Loan Documents do not, taken as a whole, contain any
material misstatement of fact or omitted to state a material fact or any fact
necessary to make the statements contained therein not misleading.
Notwithstanding the foregoing, no representation is made as to any assumptions,
estimates, projections or opinions that are, to the Company's knowledge, based
on the best information available to the Company as of the date of the relevant
disclosure and are reasonable in light of such information.
5.12. Names; Prior Transactions. As of the Closing Date, except as set
forth on Schedule 5.12, the Loan Parties have not, during the past five years,
been known by or used any other corporate or fictitious name, or been a party to
any merger or consolidation, or been a party to any Acquisition.
5.13. Regulation T, U and X. No Loan Party is engaged, nor will it
engage, principally or as one of its important activities, in the business of
extending credit for the purpose of "purchasing" or "carrying" any Margin Stock.
No Loan Party owns any Margin Stock, and none of the proceeds of the Loans or
other extensions of credit under this Agreement will be used, directly or
indirectly, for the purpose of purchasing or carrying any Margin Stock, for the
purpose of reducing or retiring any
53
Indebtedness that was originally incurred to purchase or carry any Margin Stock
or for any other purpose that might cause any of the Loans or other extensions
of credit under this Agreement to be considered a "purpose credit" within the
meaning of Regulations T, U or X of the Federal Reserve Board. No Loan Party
will take or permit to be taken any action that might cause any Loan Document to
violate any regulation of the Federal Reserve Board.
5.14. Material Agreements. No Loan Party is a party to any agreement or
instrument or subject to any charter or other corporate restriction which could
reasonably be expected to have a Material Adverse Effect. No Loan Party is in
default in the performance, observance or fulfillment of any of the obligations,
covenants or conditions contained in any agreement to which it is a party, which
default could reasonably be expected to have a Material Adverse Effect.
5.15. Compliance With Laws. The Loan Parties have complied with all
applicable statutes, rules, regulations, orders and restrictions of any domestic
or foreign government or any instrumentality or agency thereof having
jurisdiction over the conduct of their respective businesses or the ownership of
their respective Property, except where the failure to comply could not
reasonably be expected to have a Material Adverse Effect.
5.16. Ownership of Properties. Except as set forth on Schedule 5.16, on
the date of this Agreement, the Loan Parties will have good title, free of all
Liens other than those permitted by Section 6.22, to all of the material
Property and assets reflected in the Loan Parties' most recent consolidated
financial statements provided to the Agent as owned by the Loan Parties.
5.17. Plan Assets; Prohibited Transactions. The Company is not an
entity deemed to hold "plan assets" within the meaning of 29 C.F.R. Section
2510.3-101 of an employee benefit plan (as defined in Section 3(3) of ERISA)
which is subject to Title I of ERISA or any plan (within the meaning of Section
4975 of the Code), and neither the execution of this Agreement nor the making of
Credit Extensions hereunder gives rise to a prohibited transaction within the
meaning of Section 406 of ERISA or Section 4975 of the Code.
5.18. Environmental Matters. All representations and warranties made by
the Loan Parties in the Environmental Certificate delivered pursuant to this
Agreement are true and correct in all material respects.
5.19. Investment Company Act. No Loan Party is an "investment company"
or a company "controlled" by an "investment company", within the meaning of the
Investment Company Act of 1940, as amended.
5.20. Public Utility Holding Company Act. No Loan Party is a "holding
company" or a "subsidiary company" of a "holding company", or an "Affiliate" of
a "holding company" or of a "subsidiary company" of a "holding company", within
the meaning of the Public Utility Holding Company Act of 1935, as amended.
5.21. Bank Accounts. As of the Closing Date, Schedule 5.21 contains a
complete and accurate list of all bank accounts maintained by each Loan Party
with any bank or other financial institution.
5.22. Indebtedness. As of the Closing Date and after giving effect to
the Credit Extensions to be made on the Closing Date (if any), the Loan Parties
have no Indebtedness, except for (a) the Obligations, and (b) any Indebtedness
described on Schedule 5.22.
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5.23. Affiliate Transactions. Except as set forth on Schedule 5.23, as
of the Closing Date, there are no existing or proposed agreements, arrangements,
understandings, or transactions between any Loan Party and any of the officers,
members, managers, directors, stockholders, parents, other interest holders,
employees, or Affiliates (other than Subsidiaries) of any Loan Party or any
members of their respective immediate families, and none of the foregoing
Persons are directly or indirectly indebted to or have any direct or indirect
ownership, partnership, or voting interest in any Affiliate of any Loan Party or
any Person with which any Loan Party has a business relationship or which
competes with any Loan Party.
5.24. Solvency.
(a) Immediately after the consummation of the transactions to
occur on the date hereof and immediately following the making of each Credit
Extension, if any, made on the date hereof and after giving effect to the
application of the proceeds of such Credit Extensions, (a) 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; (b) 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; (c)
each the Company and its Subsidiaries on a consolidated basis will be able to
pay its debts and liabilities, subordinated, contingent or otherwise, as such
debts and liabilities become absolute and matured; and (d) 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.
5.25. Common Enterprise. The successful operation and condition of each
of the Loan Parties is dependent on the continued successful performance of the
functions of the group of the Loan Parties as a whole and the successful
operation of each of the Loan Parties is dependent on the successful performance
and operation of each other Loan Party. Each Loan Party expects to derive
benefit (and its board of directors or other governing body has determined that
it may reasonably be expected to derive benefit), directly and indirectly, from
(i) successful operations of each of the other Loan Parties and (ii) the credit
extended by the Lenders to the Company hereunder, both in their separate
capacities and as members of the group of companies. Each Loan Party has
determined that execution, delivery, and performance of this Agreement and any
other Loan Documents to be executed by such Loan Party is within its purpose,
will be of direct and indirect benefit to such Loan Party, and is in its best
interest.
5.26. Reportable Transaction. The Company does not intend to treat the
Advances and related transactions as being a "reportable transaction" (within
the meaning of Treasury Regulation Section 1.6011-4). In the event the Company
determines to take any action inconsistent with such intention, it will promptly
notify the Agent thereof.
5.27 Borrowing Base. All trade accounts receivable and unbilled
receivables of the Company, the U.K. Borrower and Guarantors represented or
reported by the Company to be, or are otherwise included in, Eligible Accounts
Receivable or Eligible Unbilled Receivables, as the case may be, comply in all
respects with the requirements therefor set forth in the definitions thereof,
and the computations of
55
the Borrowing Base set forth in each Borrowing Base Certificate are true and
correct as of the date of such Borrowing Base Certificate.
5.28 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 Default or Default has occurred and
is continuing.
5.29 Intellectual Property. 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. To the knowledge of the Company, 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 reasonably be expected to have a Material Adverse Effect.
5.30 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 reasonably be
expected to 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
reasonably be expected to 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 reasonably be
expected to 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.
5.31 Subordinated Debt Documents. All representations and warranties of
the Company contained in any Subordinated Debt Document are true and correct in
all material respects as of the date such representations and warranties were
made. As of the Closing Date, the outstanding principal balance of the
Subordinated Notes is $130,000,000, and all agreements, instruments and
documents executed or delivered pursuant to the original issuance of the
Subordinated Notes are described on Schedule 5.31 hereto. All Secured
Obligations are "Senior Indebtedness" and "Designated Senior Indebtedness" as
defined in the Subordinated Indenture and are and will be incurred in compliance
with the Subordinated Indenture. This Agreement and the other Loan Documents are
the "Senior Credit Facility" as defined in the Subordinated Indenture. Other
than the Secured Obligations, the Second Secured Debt, the Third Secured Term
Loan Debt and the Fourth Secured Term Loan Debt there is no other "Designated
Senior Indebtedness" thereunder. All Secured Obligations, up to the full amount
of the Aggregate Commitments, are incurred pursuant to Section 4.3(b)(i) of the
Subordinated Note Indenture and do not need to meet the requirements of Section
4.3(a). There is no event of default or event or condition which would become an
event of default with notice or lapse of time or both, under the Subordinated
Debt Documents and each of the Subordinated Debt Documents is in full force and
effect. Other than pursuant to the Subordinated Debt Documents, there is no
obligation pursuant to any Subordinated Debt Document or other document or
agreement evidencing or relating to any Subordinated Debt outstanding or to be
outstanding on the Closing Date which obligates the Company or any of its
Subsidiaries to pay any principal or interest or redeem any of its Capital Stock
or incur any other monetary obligation, and the
56
Subordinated Notes and any other promissory note or other instrument evidencing
any Subordinated Debt issued at any time pursuant to the Subordinated Debt
Documents are and will be "Securities" as defined in the Subordinated Indenture.
5.32 Fourth Secured Term Loan Debt Documents. As of the Closing Date,
the outstanding principal balance of the Fourth Secured Term Loan Debt equals
$17,084,162.13, the Fourth Secured Term Loan Debt consists of $14,692,379.43 in
principal owing by the Company and $2,391,782.70 owing by the U.K. Borrower, and
all agreements, instruments and documents executed or delivered pursuant to or
in connection with the Fourth Secured Term Loan Debt are described on Schedule
5.32 hereto. All Fourth Secured Term Loan Debt is incurred in full compliance
with the Subordinated Debt Documents and the Fourth Secured Term Loan Debt
Documents and does not cause any default thereunder. All Liens securing the
Fourth Secured Term Loan Debt are subordinate and junior in priority to all
Liens in favor of the Agent securing the Secured Obligations under the
Intercreditor Agreement. No Liens securing the Fourth Secured Term Loan Debt
exist on any Property of the Company or any its Subsidiaries on which the Agent
does not have an enforceable, perfected Lien under the Collateral Documents
securing the Secured Obligations. No event of default or event or condition
which would become an event of default with notice or lapse of time or both,
exists under the Fourth Secured Term Loan Debt Documents and each of the Fourth
Secured Term Loan Debt Documents is in full force and effect. Other than the
obligation to pay principal and interest at final maturity (whether at stated
maturity or upon acceleration) and to accrue (but not pay) interest prior to
final maturity under the Fourth Secured Term Loan Debt Documents, there is no
obligation pursuant to any Fourth Secured Term Loan Debt Document which
obligates the Company or any of its Subsidiaries to pay any principal or
interest, redeem any of its Capital Stock, pay any fees or other consideration
of any kind or incur any other payment obligation or liability, other than
customary expenses in connection with closing and documenting the Fourth Secured
Term Loan Debt, enforcement of the Fourth Secured Term Loan Debt Documents and
customary indemnities in loan documents. All representations and warranties of
the Company and its Subsidiaries contained in any Fourth Secured Term Loan Debt
Document are true and correct in all material respects as of the date such
representations and warranties were made.
5.33 Third Secured Term Loan Debt Documents. As of the Closing Date,
the outstanding principal balance of the Third Secured Term Loan Debt equals
$25,000,000, the Third Secured Term Loan Debt consists of $21,500,000 in
principal owing by the Company and $3,500,000 owing by the U.K. Borrower, the
non-default interest rate applicable to the Third Secured Term Loan Debt will
not exceed 11.5% per annum and all agreements, instruments and documents
executed or delivered pursuant to or in connection with the Third Secured Term
Loan Debt are described on Schedule 5.33 hereto. All Third Secured Term Loan
Debt is incurred in full compliance with the Subordinated Debt Documents and the
Third Secured Term Loan Debt Documents and does not cause any default
thereunder. All Liens securing the Third Secured Term Loan Debt are subordinate
and junior in priority to all Liens in favor of the Agent securing the Secured
Obligations under the Intercreditor Agreement. No Liens securing the Third
Secured Term Loan Debt exist on any Property of the Company or any its
Subsidiaries on which the Agent does not have an enforceable, perfected Lien
under the Collateral Documents securing the Secured Obligations. No event of
default or event or condition which would become an event of default with notice
or lapse of time or both, exists under the Third Secured Term Loan Debt
Documents and each of the Third Secured Term Loan Debt Documents is in full
force and effect. Other than the obligation to pay principal at final maturity
(whether at stated maturity or upon acceleration), to pay interest semi-annually
prior to final maturity under the Third Secured Term Loan Debt Documents, issue
stock purchase warrants for the purchase of its common Capital Stock and to pay
a placement fee of $750,000, there is no obligation pursuant to any Third
Secured Term Loan Debt Document which obligates the Company or any of its
Subsidiaries to pay any principal or interest, redeem any of its Capital Stock,
pay any fees or other consideration of any kind or incur any other payment
obligation or liability, other than customary expenses in connection with
closing and documenting the Third Secured Term Loan Debt,
57
enforcement of the Third Secured Term Loan Debt Documents and customary
indemnities in loan documents. All representations and warranties of the Company
and its Subsidiaries contained in any Third Secured Term Loan Debt Document are
true and correct in all material respects as of the date such representations
and warranties were made.
5.34 Second Secured Debt Documents. All representations and warranties
of the Company contained in any Second Secured Debt Document are true and
correct in all material respects as of the date such representations and
warranties were made. As of the Closing Date, the outstanding principal balance
of the Second Secured Notes is $75,500,000, the Second Secured Notes consist of
$64,930,000 in principal owing by the Company and $10,570,000 owing by the U.K.
Borrower, and all agreements, instruments and documents executed or delivered
pursuant to the original issuance of the Second Secured Notes are described on
Schedule 5.34 hereto. 75,500 units of Second Secured Debt have been issued at a
price of $991.44 per unit. All Secured Obligations are and will be incurred in
compliance with the Second Secured Indenture. This Agreement and the other Loan
Documents are the "Senior Credit Facility" as defined in the Second Secured
Indenture. All Secured Obligations, up to the full amount of the Aggregate
Commitments, are incurred pursuant to Section 4.3(b)(1) and (9) of the Second
Secured Note Indenture and do not need to meet the requirements of Section
4.3(a). All Liens securing the Second Secured Debt are subordinate and junior in
priority to all Liens in favor of the Agent securing the Secured Obligations
under the Intercreditor Agreement. No Liens securing the Second Secured Debt
exist on any Property of the Company or any its Subsidiaries on which the Agent
does not have an enforceable, perfected Lien under the Collateral Documents
securing the Secured Obligations. There is no event of default or event or
condition which would become an event of default with notice or lapse of time or
both, under the Second Secured Debt Documents and each of the Second Secured
Debt Documents is in full force and effect. Other than pursuant to the Second
Secured Debt Documents, there is no obligation pursuant to any Second Secured
Debt Document or other document or agreement evidencing or relating to any
Second Secured Debt outstanding or to be outstanding on the Closing Date which
obligates the Company or any of its Subsidiaries to pay any principal or
interest or redeem any of its Capital Stock or incur any other monetary
obligation.
ARTICLE VI
COVENANTS
Each Loan Party executing this Agreement jointly and severally agrees
as to all Loan Parties that from and after the date hereof and until the
Termination Date:
6.1. Financial and Collateral Reporting. Each Loan Party will maintain,
for itself and each Subsidiary, a system of accounting established and
administered in accordance with GAAP, and will furnish to the Lenders:
(a) within ninety five days after the close of each Fiscal
Year of the Company and its Subsidiaries, an unqualified audit report
certified by independent certified public accountants acceptable to the
Lenders, prepared in accordance with GAAP on a consolidated basis,
including balance sheets as of the end of such Fiscal Year, related
profit and loss and reconciliation of surplus statements, and a
statement of cash flows, accompanied by (i) any management letter
prepared by said accountants, (ii) a certificate of said accountants
that, in the course of their examination necessary for their
certification of the foregoing, they have obtained no knowledge of any
Default or Unmatured Default, or if, in the opinion of such
accountants, any Default or Unmatured Default shall exist, stating the
nature and status thereof, and (iii) a letter from said
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accountants addressed to the Lenders acknowledging that the Lenders are
extending credit in primary reliance on such financial statements and
authorizing such reliance;
(b) within fifty days after the close of the first three
Fiscal Quarters of each Fiscal Year of the Company and its
Subsidiaries, consolidated unaudited balance sheets of the Company and
its Subsidiaries and of its Unrestricted Subsidiaries as at the close
of each such Fiscal Quarter and consolidated profit and loss and
reconciliation of surplus statements and a statement of cash flows of
the Company and its Subsidiaries and of its Unrestricted Subsidiaries
for the period from the beginning of the applicable Fiscal Year to the
end of such Fiscal Quarter, all certified by its chief financial
officer and prepared in accordance with GAAP (except for exclusion of
footnotes and subject to normal year-end audit adjustments);
(c) within twenty-five days after the close of each Fiscal
Month, other than any Fiscal Month which is also the end of one of the
first three Fiscal Quarters, of the Company and its Subsidiaries,
consolidated unaudited balance sheets as at the close of each such
Fiscal Month and consolidated profit and loss and reconciliation of
surplus statements and a statement of cash flows for the period from
the beginning of the applicable Fiscal Year to the end of such Fiscal
Month, all prepared in accordance with GAAP (except for exclusion of
footnotes and subject to normal year-end audit adjustments) and
certified by its chief financial officer;
(d) Prior to the beginning of each Fiscal Year of the Company,
but not more than ninety days prior thereto, a copy of the plan and
forecast (including a projected consolidated and consolidating balance
sheet, income statement and funds flow statement) and budget of the
Company for such Fiscal Year (the "Projections") in form reasonably
satisfactory to the Agent;
(e) together with each of the financial statements required
under Sections 6.1(a) and (b), a compliance certificate in
substantially the form of Exhibit E (a "Compliance Certificate") signed
by the chief financial officer of the Company showing the calculations
necessary to determine compliance with this Agreement and stating that
no Default or Unmatured Default exists, or if any Default or Unmatured
Default exists, stating the nature and status thereof;
(f) as soon as available but in any event within twenty five
days of the end of each calendar month, and at such other times as may
be requested by the Agent, as of the period then ended, a Borrowing
Base Certificate and supporting information in connection therewith;
(g) as soon as available but in any event within 25 days of
the end of each Fiscal Month and at such other times as may be
requested by the Agent, as of the period then ended:
(i) a detailed aged trial balance of the Company's
Accounts (1) specifying the name, address (if requested), and
balance due for each Account Debtor and (2) reconciled to the
Borrowing Base Certificate delivered as of such date prepared
in a manner reasonably acceptable to the Agent;
(ii) a worksheet of calculations prepared by the
Company to determine Eligible Accounts and Eligible Unbilled
Accounts, such worksheets detailing the Accounts excluded from
Eligible Accounts and Eligible Unbilled Accounts and the
reason for such exclusion;
59
(iii) a reconciliation of the Company's Accounts
between the amounts shown in the Company's books and financial
statements and the reports delivered pursuant to clauses (i)
and (ii) above; and
(iv) a schedule and aging of the Company's accounts
payable;
(h) promptly upon the Agent's request:
(i) copies of invoices in connection with the
invoices issued by the Company in connection with any
Accounts, credit memos, shipping and delivery documents, and
other information related thereto; and
(ii) a schedule detailing the balance of all
intercompany accounts of the Loan Parties;
(i) as soon as available but in any event on the third
Business Day after the end of each week for the most recently ended
week, a summary report indicating collections for such week in a form
provided by the Agent at least one week prior to the date such report
is required;
(j) after a Borrowing Base Availability Deficiency Event, as
soon as available but in any event on the third Business Day after the
end of each week for the most recently ended week, an update on the
amount of all Eligible Accounts and Eligible Unbilled Accounts and such
other information with respect thereto as required by the Agent;
(k) on the first Business Day of the month of March, a
certificate of good standing for the Company and each Domestic
Subsidiary from the appropriate governmental officer in its
jurisdiction of incorporation, formation, or organization;
(l) as soon as possible and in any event within five days
after the Company knows that any Reportable Event has occurred with
respect to any Plan, a statement, signed by the chief financial officer
of the Company, describing said Reportable Event and the action which
the Company proposes to take with respect thereto;
(m) as soon as possible and in any event within ten days after
receipt by any Loan Party, a copy of (i) any notice or claim to the
effect that any Loan Party is or may be liable to any Person as a
result of the release by any Loan Party, or any other Person of any
toxic or hazardous waste or substance into the environment, and (ii)
any notice alleging any violation of any federal, state or local
environmental, health or safety law or regulation by the any Loan Party
which could have a Material Adverse Effect;
(n) concurrently with the furnishing thereof to the
shareholders of the Company, copies of all financial statements,
reports and proxy statements so furnished;
(o) promptly upon the filing thereof, copies of all
registration statements and annual, quarterly, monthly or other regular
reports which any Loan Party files with the Securities and Exchange
Commission;
(p) within ninety five days after the close of each Fiscal
Year of the Company and its Subsidiaries and within fifty days after
the close of the first three Fiscal Quarters of each Fiscal Year of the
Company and its Subsidiaries, consolidating financial statements of the
Company and its Subsidiaries and of its Unrestricted Subsidiaries
consistent with the consolidating financial statements that have been
included in the Company's 10-Q and 10-K reports filed with the
Securities and Exchange Commission together with such additional detail
in connection therewith requested by the Agent, all certified by its
chief financial officer and prepared in accordance with
60
GAAP (except for exclusion of footnotes and subject to normal year-end
audit adjustment in the case of such quarterly reports);
(q) simultaneously with their delivery under the Second
Secured Debt Documents, the Third Secured Term Loan Debt Documents or
the Fourth Secured Term Loan Debt Documents, any notice or other
documentation delivered to the holders of the debt under those
agreements pursuant to the Second Secured Debt Documents, the Third
Secured Term Loan Debt Documents or the Fourth Secured Term Loan Debt
Documents; and
(r) such other information (including non-financial
information) as the Agent or any Lender may from time to time
reasonably request, including without limitation any tax returns, any
statements of the Unfunded Liabilities of each Single Employer Plan
certified by an actuary enrolled under ERISA and any annual report or
other filing with respect to any Plan filed with the PBGC, the U.S.
Internal Revenue Service or any other governmental entity.
Documents required to be delivered pursuant to Section 6.1(a), (b) or
(c) may be delivered electronically and if so delivered, shall be deemed to have
been delivered on the date (i) on which the Company posts such documents, and
provides a link thereto on the Company's website on the Internet address
xxx.xxxx.xxx or (ii) on which such documents are posted on the Company's behalf
on Intralinks/IntraAgency or another relevant website, if any, to which each
Lender and the Agent have access (whether a commercial, third-party website or
whether sponsored by the Agent); provided that, (1) the Company shall deliver
copies of such documents to the Agent or any Lender that reasonably requests
that the Company deliver paper copies of such documents until a written request
to cease delivering paper copies is given by the Agent or such Lender and (2)
the Company shall notify (which may be by facsimile or electronic mail) the
Agent and each Lender of the posting of any such documents and provide to the
Agent by electronic mail electronic versions (i.e. soft copies) of such
documents. Notwithstanding the foregoing, in every instance, the Company shall
be required to provide paper copies of the Compliance Certificates required by
Section 6.1(e) to the Agent and each of the Lenders. Except for such Compliance
Certificates, the Agent shall have no obligations to request the delivery or to
maintain copies of the documents referred to above, and in any event shall have
no responsibility to monitor compliance by the Company with any such request for
delivery, and each Lender shall be solely responsible for requesting delivery to
it or maintaining its copies of such documents.
6.2. Use of Proceeds.
(a) The Borrowers will use the proceeds of the Credit
Extensions for general corporate purposes (not otherwise prohibited by
this Agreement).
(b) The Borrowers will not, nor will it permit any Loan Party
to, use any of the proceeds of the Credit Extensions to (i) purchase
or carry any Margin Stock in violation of Regulation T, U, or X, (ii)
repay or refinance any Indebtedness of any Person incurred to buy or
carry any Margin Stock, (iii) acquire any security in any transaction
that is subject to Section 13 or Section 14 of the Securities Exchange
Act of 1934 (and the regulations promulgated thereunder), or (iv) make
any Acquisition.
6.3. Notices. Each Loan Party will give prompt notice in writing to the
Agent and the Lenders of:
(a) the occurrence of any Default or Unmatured Default;
61
(b) any other development, financial or otherwise, which could
reasonably be expected to have a Material Adverse Effect;
(c) the assertion by the holder of any Capital Stock of any
Loan Party or the holder of any Indebtedness of any Loan Party in
excess of $5,000,000 that any default exists with respect thereto or
that any Loan Party is not in compliance therewith;
(d) receipt of any written notice that any Loan Party is
subject to any investigation by any governmental entity with respect to
any potential or alleged violation of any applicable Environmental Law
which could reasonably be expected to have a Material Adverse Effect or
of the imposition of any Lien against any Property of any Loan Party
that is not a Permitted Lien;
(e) receipt of any notice of litigation commenced or
threatened against any the Company or any of its Subsidiaries that (i)
seeks damages which could reasonably be expected to exceed $1,000,000
if such litigation were adversely decided against the a Loan Party,
(ii) seeks injunctive relief which could reasonably be expected to have
a Material Adverse Effect, (iii) is asserted or instituted against any
ERISA Plan, its fiduciaries or its assets, (iv) alleges criminal
misconduct by any Loan Party, or (v) alleges the violation of any law
regarding, or seeks remedies in connection with, any Environmental Laws
which could reasonably be expected to have a Material Adverse Effect;
(f) any Lien (other than Permitted Liens) or claim made or
asserted against any of the Collateral;
(g) its decision to change, (i) such Loan Party's name or type
of entity, (ii) such Loan Party's articles or certificate of
incorporation, partnership agreement, certificate of partnership,
articles or certificate of organization, by-laws, or operating or other
management agreement, and (iii) the location where any Collateral is
held or maintained; provided that, in no event shall the Agent receive
notice of such change less than thirty days prior thereto;
(h) commencement of any proceedings contesting any tax, fee,
assessment, or other governmental charge in excess of $1,000,000;
(i) the opening of any new deposit account by any Loan Party
with any bank or other financial institution other than the Agent;
(j) any loss, damage, or destruction to the Collateral in the
amount of $1,000,000 or more, whether or not covered by insurance,
(k) any and all default notices received under or with respect
to any leased location or public warehouse where any record of any
material portion of Collateral is located (which shall be delivered
within two Business Days after receipt thereof),
(l) the fact that such Loan Party has entered into a Rate
Management Transaction or an amendment to a Rate Management
Transaction, together with copies of all agreements evidencing such
Rate Management Transactions or amendments thereto (which shall be
delivered within two Business Days);
(m) immediately after becoming aware of any pending or
threatened strike, work stoppage, unfair labor practice claim, or other
labor dispute affecting the Borrower or any of its Subsidiaries which
could reasonably be expected to have a Material Adverse Effect; and
62
(n) any other matter as Agent may reasonably request.
6.4. Conduct of Business. Each Loan Party will, and will cause each of
its Subsidiaries to:
(a) carry on and conduct its business in substantially the
same manner and in substantially the same fields of enterprise as it is
presently conducted;
(b) do all things necessary to remain duly incorporated or
organized, validly existing and (to the extent such concept applies to
such entity) in good standing as a domestic corporation, partnership or
limited liability company in its jurisdiction of incorporation or
organization, as the case may be except as permitted in this Agreement,
and maintain all requisite authority to conduct its business in each
jurisdiction in which its business is conducted except as permitted in
this Agreement;
(c) keep adequate books and records with respect to its
business activities in which proper entries, reflecting all financial
transactions, are made in accordance with GAAP and on a basis
consistent with the Financial Statements delivered to the Agent
pursuant to Section 4.1(m)
(d) at all times maintain, preserve and protect all of its
assets and properties used or useful in the conduct of its business,
and keep the same in good repair, working order and condition in all
material respects (taking into consideration ordinary wear and tear)
and from time to time make, or cause to be made, all necessary or
appropriate repairs, replacements and improvements thereto consistent
with industry practices; and
(e) transact business only in such corporate and trade names
as are set forth in Schedule 5.12 or as otherwise set forth in a
written notice to the Agent in compliance with the terms of this
Agreement.
6.5. Taxes. Each Loan Party will, and will cause each of its
Subsidiaries to timely file complete and correct U.S. federal and applicable
foreign, state and local tax returns required by law and pay when due all taxes,
assessments and governmental charges and levies upon it or its income, profits,
Property or Collateral, except those which are being contested in good faith by
appropriate proceedings and with respect to which adequate reserves have been
set aside in accordance with GAAP.
6.6. Payment of Indebtedness and Other Liabilities. Each Loan Party
will, and will cause each of its Subsidiaries to, pay or discharge when due all
Indebtedness permitted by Section 6.17 owed by such Loan Party and all other
liabilities and obligations due to materialmen, mechanics, carriers,
warehousemen, and landlords, except that the Loan Parties and their Subsidiaries
may in good faith contest, by appropriate proceedings diligently pursued, any
such obligations; provided that, (a) adequate reserves have been set aside for
such liabilities in accordance with GAAP, (b) the failure to make payment
pending such contest could not reasonably be expected to have a Material Adverse
Effect, (c) the amount of such contested obligation, if required to be paid,
could not reasonably be expected to have a Material Adverse Effect, (d) no Lien
shall be imposed on any Accounts of any Loan Party or Capital Stock of any
Subsidiary to secure payment of such liabilities that is superior to the Agent's
Liens securing the Secured Obligations on any Accounts of any Loan Party or
Capital Stock of any Subsidiary, (e) such contest effectively suspends
collection of the contested obligation and the enforcement of any Lien securing
such obligation, (f) none of the Collateral becomes subject to forfeiture or
loss as a result of the contest and (g) such Loan Party or Subsidiary shall
promptly pay or discharge such contested liabilities, if any, and shall deliver
to the Agent evidence reasonably acceptable to the Agent of such compliance,
63
payment or discharge, if such contest is terminated or discontinued adversely to
such Loan Party or Subsidiary or the conditions set forth in this proviso are no
longer met.
6.7. Insurance.
(a) Each Loan Party will, and will cause each of its
Subsidiaries, at all times maintain, with financially sound and
reputable carriers having a Financial Strength rating of at least A+ by
A.M. Best Company, insurance against: (i) loss or damage by fire and
loss in transit; (ii) theft, burglary, pilferage, larceny,
embezzlement, and other criminal activities; (iii) business
interruption; (iv) general liability and (v) and such other hazards, as
is customary in the business of such Loan Party. All such insurance
shall be in amounts and under policies as is customary in the business
of such Loan Party and shall be acceptable to the Agent in its
Permitted Discretion. In the event any Collateral is located in any
area that has been designated by the Federal Emergency Management
Agency as a "Special Flood Hazard Area", the applicable Loan Party
shall purchase and maintain flood insurance on such Collateral
(including any personal Property which is located on any real Property
leased by such Loan Party within a "Special Flood Hazard Area"). The
amount of all insurance required by this Section shall at a minimum
comply with applicable law, including the Flood Disaster Protection Act
of 1973, as amended. All premiums on such insurance shall be paid when
due by the applicable Loan Party, and copies of the policies delivered
to the Agent upon the request of the Agent. If any Loan Party fails to
obtain any insurance as required by this Section, the Agent at the
direction of the Required Lenders following notice to such Loan Party,
may obtain such insurance at the Company' expense. By doing so, the
Agent shall not be deemed to have waived any Default or Unmatured
Default arising from any Loan Party's failure to maintain such
insurance or pay any premiums therefor. No Loan Party will use or
permit any Property to be used in violation of applicable law or in any
manner which might render inapplicable any insurance coverage.
(b) All insurance policies required under Section 6.7(a) shall
name the Agent (for the benefit of the Agent and the Lenders) as an
additional insured or as a lender loss payee, as applicable, and shall
provide that, or contain a lender loss payable clauses or mortgagee
clauses, in form and substance satisfactory to the Agent, which provide
that:
(i) all proceeds thereunder with respect to any
Collateral shall be payable to the Agent;
(ii) no such insurance shall be affected by any act
or neglect of the insured or owner of the Property described
in such policy; and
(iii) such policy and loss payable clauses may be
canceled, amended, or terminated only upon at least thirty
days prior written notice given to the Agent.
(c) Notwithstanding the foregoing, any insurance or
condemnation proceeds received by the Loan Parties shall be immediately
forwarded to the Agent and the Agent may, at its option, apply any such
proceeds to the reduction of the Obligations in accordance with Section
2.15, provided that in the case of insurance proceeds pertaining to any
Loan Party other than the Company, such insurance proceeds shall be
applied to the Loans owing by the Company. The Agent may permit or
require any Loan Party to use such money, or any part thereof, to
replace, repair, restore or rebuild the Collateral in a diligent and
expeditious manner with materials and workmanship of substantially the
same quality as existed before the loss, damage or destruction.
Notwithstanding the foregoing, if the casualty giving rise to such
insurance proceeds could not reasonably be expected to have a Material
Adverse Effect and such insurance proceeds
64
do not exceed $1,000,000 in the aggregate, upon the applicable Loan
Party's request, the Agent shall permit such Loan Party to replace,
restore, repair or rebuild the property; provided that, if such Loan
Party has not completed or entered into binding agreements to complete
such replacement, restoration, repair or rebuilding within 90 days of
such casualty, the Agent may apply such insurance proceeds to the
Obligations in accordance with Section 2.15. All insurance proceeds
that are to be made available to the Company to replace, repair,
restore or rebuild the Collateral shall be applied by the Agent to
reduce the outstanding principal balance of the Revolving Loans (which
application shall not result in a permanent reduction of the
Commitment) and upon such application, the Agent shall establish a
Reserve against the Borrowing Base in an amount equal to the amount of
such proceeds so applied, provided such Reserve shall be removed if the
related replacement, restoration, repair or rebuilding is completed or,
with the consent of the Agent, the Company determines not to be
complete the related replacement, restoration, repair or rebuilding.
All insurance proceeds made available to any Loan Party that is not a
Company to replace, repair, restore or rebuild Collateral shall be
deposited in a cash collateral account. Thereafter, such funds shall be
made available to the applicable Loan Party to provide funds to
replace, repair, restore or rebuild the Collateral as follows:
(i) Company shall request a Revolving Loan or Company
shall request a release from the cash collateral account be
made to the applicable Loan Party in the amount requested to
be released;
(ii) so long as the conditions set forth in Section
4.2 have been met, the Lenders shall make such Revolving Loan
or Agent shall release funds from the cash collateral account;
and
(iii) in the case of insurance proceeds applied
against the Revolving Loan, the Reserve established with
respect to such insurance proceeds shall be reduced by the
amount of such Revolving Loan.
6.8. Compliance with Laws. Each Loan Party, and will cause each of its
Subsidiaries to comply with all laws, rules, regulations, orders, writs,
judgments, injunctions, decrees or awards to which it may be subject including,
without limitation, all Environmental Laws, except where the failure to comply
would not result in a Material Adverse Effect.
6.9. Maintenance of Properties and Intellectual Property Rights. Each
Loan Party, and will cause each of its Subsidiaries to do all things necessary
to (i) maintain, preserve, protect and keep its Property in good repair, working
order and condition, and make all necessary and proper repairs, renewals and
replacements so that its business carried on in connection therewith may be
properly conducted at all times and (ii) obtain and maintain in effect at all
times all material franchises, governmental authorizations, Intellectual
Property Rights, licenses and permits, which are necessary for it to own its
Property or conduct its business as conducted on the Closing Date.
6.10. Inspection. Each Loan Party, and will cause each of its
Subsidiaries to permit the Agent and the Lenders, by their respective employees,
representatives and agents, from time to time upon two Business Days' prior
notice as frequently as Agent reasonably determines to be appropriate, to (a)
inspect any of the Property, the Collateral, and the books and financial records
of such Loan Party, (b) examine, audit and make extracts or copies of the books
of accounts and other financial records of such Loan Party, (c) have access to
its properties, facilities, the Collateral and its advisors, officers, directors
and employees to discuss the affairs, finances and accounts of such Loan Party
and (d) review, evaluate and make test verifications and counts of the Accounts
and other Collateral of such Loan Party. If a Default has occurred and is
continuing, each Loan Party shall provide such access to the Agent and to each
65
Lender at all times and without advance notice. Furthermore, so long as any
Default has occurred and is continuing, each Loan Party shall provide the Agent
and each Lender with access to its suppliers and customers. Each Loan Party
shall promptly make available to the Agent and its counsel originals or copies
of all books and records that the Agent may reasonably request. The Loan Parties
acknowledge that from time to time the Agent may prepare and may distribute to
the Lenders certain audit reports pertaining to the Loan Parties' assets for
internal use by the Agent and the Lenders from information furnished to it by or
on behalf of the Loan Parties, after the Agent has exercised its rights of
inspection pursuant to this Agreement.
6.11. Negative Pledge Limitation. The Company will not, nor will it
permit any Subsidiary to, enter into any agreement, 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 in favor of the
Agent and the Lenders securing the Secured Obligations upon any of its assets,
rights, revenues or property, real, personal or mixed, tangible or intangible,
whether now owned or hereafter acquired, except for such restrictions on (i) a
Foreign Subsidiary with respect to Indebtedness of a Foreign Subsidiary
permitted pursuant to Section 6.17(i) and which restrictions are customary in
agreements of such type and would not be inconsistent with any of the terms of
this Agreement; (ii) relating to Indebtedness of a Subsidiary and existing at
the time it became a Subsidiary if such restriction was not created in
connection with or in anticipation of the transaction or series of transactions
pursuant to which such Subsidiary became a Subsidiary or was acquired by the
Company or any Subsidiary, (iii) which result from the refinancing of
Indebtedness incurred pursuant to an agreement referred to in the immediately
preceding clause (ii) above, provided that such restriction is no less favorable
to the Lenders than those under the agreement evidencing the Indebtedness so
refinanced, (iv) relating to Indebtedness that is permitted to be incurred and
secured pursuant to this Agreement that limit the right of the debtor to dispose
of the property or assets securing such Indebtedness, (v) encumbering property
or assets at the time such property or assets were acquired by the Company or
any Subsidiary, so long as such restriction relates solely to the property or
assets so acquired and was not created in connection with or in anticipation of
such acquisition, (vi) resulting from customary provisions restricting
subletting or assignment of leases or customary provisions in other agreements
that restrict assignment of such agreements or rights thereunder or (vii)
customary restrictions contained in asset sale agreements limiting the transfer
of such property pending the closing of such sale.
6.12. Communications with Accountants. Each Loan Party executing this
Agreement authorizes (a) Agent and (b) so long as a Default has occurred and is
continuing, each Lender, to communicate directly with its and its Subsidiaries'
independent certified public accountants and authorizes and shall instruct those
accountants and advisors to communicate to Agent and each Lender information
relating to any Loan Party with respect to the business, results of operations
and financial condition of any Loan Party.
6.13. Collateral Access Agreements and Real Estate Purchases. Upon the
request of the Agent, each Loan Party shall use commercially reasonable efforts
to obtain a Collateral Access Agreement from the lessor of each leased property,
mortgagee of owned property or bailee with respect to any warehouse or other
location where any books and records of a material portion of the Collateral are
stored or located, unless the Agent has obtained a Collateral Access Agreement
from the lessor of leased property or mortgagee of owned property or bailee
where back up books and records exist for such books and records. Each Loan
Party shall timely and fully pay and perform its obligations under all leases
and other agreements with respect to each leased location or third party
warehouse where any Collateral is or may be located except where such
obligations are being contested in good faith. To the extent permitted
hereunder, if any Loan Party proposes to acquire a fee ownership interest in
real Property after the Closing Date and is required to xxxxx x Xxxx on such
real Property under this Agreement, it shall first provide to Agent a mortgage
or deed of trust granting Agent a first priority Lien on such real Property,
66
together with environmental audits, mortgage title insurance commitment, real
property survey, local counsel opinion(s), and, if required by the Agent,
supplemental casualty insurance and flood insurance, and such other documents,
instruments or agreements reasonably requested by Agent, in each case, in form
and substance reasonably satisfactory to the Agent.
6.14. Deposit Account Control Agreements. The Loan Parties will provide
to the Agent upon the Agent's request, a Deposit Account Control Agreement duly
executed on behalf of each financial institution holding a deposit account of a
Loan Party as set forth in the Security Agreement; provided that, the Agent may,
in its discretion, defer delivery of any such Deposit Account Control Agreement,
establish a Reserve with respect to any deposit account for which the Agent has
not received such Deposit Account Control Agreement, and require the Loan Party
to open and maintain a new deposit account with a financial institution subject
to a Deposit Account Control Agreement.
6.15. Additional Collateral; Further Assurances.
(a) Subject to applicable law, each Loan Party shall, unless
the Required Lenders otherwise consent, (i) cause each of its Domestic
Subsidiaries to become or remain a Loan Party and a Guarantor and (ii)
cause each of its Domestic Subsidiaries formed or acquired after the
Closing Date in accordance with the terms of this Agreement to (1)
become a party to this Agreement by executing a Joinder Agreement, and
(2) guarantee payment and performance of the Guaranteed Obligations
pursuant to the Guaranty. Upon execution and delivery of such Loan
Documents and other instruments, certificates, and agreements requested
by the Agent, each such Domestic Subsidiary shall automatically become
a Guarantor and Loan Party hereunder and thereupon shall have all of
the rights, benefits, duties, and obligations in such capacity under
the Loan Documents.
(b) To secure the payment when due of the Secured Obligations,
the Borrowers and each Guarantor shall execute and deliver, or cause to
be executed and delivered, to the Lenders and the Agent Collateral
Documents, including without limitation such documents as the Agent may
reasonably deem necessary and deliver such property, documents, and
instruments as the Agent may request to perfect the Liens of the Agent
in any Property of such Loan Party which constitutes Collateral,
including any parcel of real Property located in the U.S. owned by any
Loan Party, granting the following:
(i) Security interests in all present and
future accounts, inventory, equipment, chattel paper,
instruments, investment property, documents, general
intangibles, fixtures and all other personal property of the
Company and each Domestic Subsidiary, excluding the following
(the following described assets in this parenthetical are
defined as the "Excluded Collateral"), so long as no holder of
the Second Secured Debt, the Third Secured Term Loan Debt or
the Fourth Secured Term Loan Debt requests or receives liens
or security interests on such assets: (A) motor vehicles,
instruments and chattel paper with an aggregate fair market
value for all of the foregoing less than $1,000,000, (B) real
property leases, (C) any other real property with an aggregate
fair market value (when combined with all such other real
property) less than $1,000,000 (provided that the Company
represents that as of the Closing Date all real property owned
by the Loan Parties has an aggregate fair market value of less
than $1,000,000) and (D) rights arising under any contracts or
licenses (other than, in each of the foregoing cases, any
right to receive payment) as to which a grant of a security
interest would constitute a violation of a valid and
enforceable restriction in favor of a third party on such
grant, unless and until any required consents shall have been
obtained, provided that the
67
Company shall notify the Agent of any such restriction and
shall use all reasonable efforts to obtain any required
consent to the extent requested by the Agent; and
(ii) Upon request of the Agent, (A) the Borrowers and
the Guarantors shall execute and deliver such agreements and
documents reasonably requested by the Agent to grant a first
priority lien and security interest on all real property owned
by the Borrowers and the Guarantors (other than Excluded
Collateral), (B) each Foreign Borrowing Subsidiary shall
execute and deliver all agreements and documents reasonably
requested by the Agent to grant a first priority lien and
security interest on all assets owned by such Foreign
Borrowing Subsidiary, to secure the Secured Obligations of
such Foreign Borrowing Subsidiary, unless it is prohibited by
applicable law or existing contractual restrictions from doing
so or it is reasonably determined by the Agent to be
impractical or unreasonably costly, (C) each parent
corporation of a Foreign Subsidiary Borrower and Subsidiary of
such Foreign Subsidiary Borrower or parent that is organized
under the same jurisdiction as such Foreign Subsidiary
Borrower or other Foreign Subsidiary requested by the Agent
will execute a Guaranty with respect to the Secured
Obligations of such Foreign Borrowing Subsidiary and will
execute and deliver all agreements and documents reasonably
requested by the Agent to grant a first priority lien and
security interest on all of its assets to secure such
Guaranty, unless it is prohibited by applicable law or
existing contractual restrictions from doing so or it is
reasonably determined by the Agent to be impractical or
unreasonably costly or such Foreign Subsidiary is inactive and
does not have any material assets as determined by the Agent,
and (D) if requested by the Agent, each Foreign Borrowing
Subsidiary and its parent and their Subsidiaries organized
under the same jurisdiction as such Foreign Subsidiary
Borrower shall execute and deliver, or cause to be executed
and delivered, all agreements and documents reasonably
requested by the Agent to secure all intercompany loans and
advances owing to them by a first priority lien and security
interest on all assets owned by the Subsidiary owing such
intercompany loans and advances, unless it is prohibited by
applicable law or existing contractual restrictions from doing
so or it is reasonably determined by the Agent to be
impractical or unreasonably costly.
(c) The Company and each Domestic Subsidiary will cause (i)
100% of the issued and outstanding Capital Stock of each of its
Domestic Subsidiaries and (ii) 65% (or such greater percentage that,
due to a change in an applicable law after the date hereof, (1) could
not reasonably be expected to cause the undistributed earnings of such
Foreign Subsidiary as determined for U.S. federal income tax purposes
to be treated as a deemed dividend to such Foreign Subsidiary's U.S.
parent and (2) could not reasonably be expected to cause any material
adverse tax consequences) of the issued and outstanding Capital Stock
entitled to vote (within the meaning of Treas. Reg. Section
1.956-2(c)(2)) and 100% of the issued and outstanding Capital Stock not
entitled to vote (within the meaning of Treas. Reg. Section
1.956-2(c)(2)) in each Foreign Subsidiary directly owned by the Company
or any Domestic Subsidiary to be subject at all times to a first
priority, perfected Lien in favor of the Agent pursuant to the terms
and conditions of the Loan Documents or other security documents as the
Agent shall reasonably request.
(d) Without limiting the foregoing, each Loan Party shall, and
shall cause each of the Company's Subsidiaries which is required to
become a Loan Party pursuant to the terms of this Agreement to, execute
and deliver, or cause to be executed and delivered, to the Agent such
documents and agreements, and shall take or cause to be taken such
actions as the Agent may, from time to time, reasonably request to
carry out the terms and conditions of this Agreement and the other Loan
Documents, including without limitation, if requested by the Agent, one
or more
68
opinions of counsel satisfactory to the Agent, corporate documents and
resolutions and consents and other documents (further including,
without limitation, such consents from any shareholders or other owners
of any Subsidiary to the execution and performance of such Loan
Documents by such Subsidiary), which in the opinion of the Agent are
necessary or advisable in connection therewith.
6.16. Dividends. The Company will not, nor will it permit any
Subsidiary to, 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: (a) such dividends, payments or other distributions to the extent
payable solely in shares of Capital Stock (other than Disqualified Stock) of the
Company, (b) the repurchase, redemption or other acquisition or retirement for
value of any Capital Stock of the Company held by any employee, director or
consultant of the Company upon termination of employment or services of such
employee, director or consultant, provided that (i) the aggregate consideration
(excluding consideration paid in other Capital Stock of the Company which is not
Disqualified Stock) paid for such repurchased, redeemed, acquired or retired
Capital Stock after the Closing Date shall not exceed $1,000,000, (ii) no
Default or Unmatured Default shall have occurred and be continuing immediately
after such transaction on a pro forma basis acceptable to the Agent and (iii)
the price paid for such Capital Stock shall be made in accordance with the
existing agreements relating thereto, and (c) dividends and distributions by
Subsidiaries of the Company. The Company will not issue any Disqualified Stock.
6.17. Indebtedness. The Company will not, nor will it permit any
Subsidiary to, create, incur or suffer to exist any Indebtedness, except:
(a) the Secured Obligations;
(b) The Indebtedness described in Schedule 5.22 hereto and
refinancings thereof, but no increase in the amount thereof (or in the
case of a committed facility or line of credit, in the amount of the
commitments or credit line), as such amount is reduced from time to
time;
(c) Indebtedness of any Subsidiary of the Company owing to the
Company or to any other Subsidiary of the Company and Indebtedness of
the Company owing to any Subsidiary of the Company, provided that
(i) any such Indebtedness of the Company or of any
other Borrower is subordinated, on terms acceptable to the
Agent, to all Secured Obligations of the Company or such other
Borrower;
(ii) upon the request of the Agent and reasonably
promptly after such request, the applicable parties shall
execute and deliver to the other party a demand note
(collectively, the "Intercompany Notes") to evidence any such
intercompany Indebtedness, which Intercompany Notes shall be
in form and substance reasonably satisfactory to Agent and
shall be pledged and delivered to Agent pursuant to the
Security Agreement as additional collateral security for the
Secured Obligations;
(iii) each of the Borrowers and the Guarantors shall
record all intercompany loans owing from any Foreign
Subsidiary on its books and records in a manner reasonably
satisfactory to Agent;
69
(iv) at the time any such intercompany loan or
advance is made by the Company and after giving effect
thereto, the Company shall be Solvent;
(v) no Default or Unmatured Default would occur and
be continuing after giving effect to any such proposed
intercompany loan.
(d) Subordinated Debt, provided that such Subordinated Debt
shall be incurred in compliance with all terms and provisions of this
Agreement;
(e) 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 and for which adequate
reserves are maintained on the books of the Company;
(f) Surety, customs or appeal bonds to which the Company or
any of its Subsidiaries is a party and letters of credit and
reimbursement agreements issued for the account of such Company or any
Subsidiary in the ordinary course of business which are not material in
the aggregate and which would not have a Material Adverse Effect and
which are trade letters of credit or which secure obligations in
respect of (i) worker's compensation laws, unemployment insurance laws
or similar legislation, (ii) obligations 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 or (iii) public or statutory obligations of the
Company or any of its Subsidiaries;
(g) Indebtedness not otherwise permitted by this Section 6.17
incurred or assumed for the purpose of financing all or any part of the
cost of acquiring any fixed asset (including without limitation through
Capitalized Leases), in an aggregate principal amount at any time
outstanding not greater than $2,000,000;
(h) Contingent Liabilities in respect of which the Company or
a Subsidiary is primary obligor otherwise permitted by Section 6.21;
(i) Indebtedness of Foreign Subsidiaries in an aggregate
amount not to exceed $5,000,000 at any time outstanding for all Foreign
Subsidiaries;
(j) the Second Secured Debt in an aggregate principal amount
not to exceed $64,930,000 owing by the Company and $10,570,000 owing by
the U.K. Borrower;
(k) the Third Secured Term Loan Debt in an aggregate principal
amount not to exceed $21,500,000 owing by the Company and $3,500,000
owing by the U.K. Borrower; and
(l) the Fourth Secured Term Loan Debt in an aggregate
principal amount not to exceed $14,692,379.43 owing by the Company and
$2,391,782.70 owing by the U.K. Borrower; and
(m) Indebtedness of the Company or any Subsidiary other than
(a) through (l) above not exceeding $10,000,000 aggregate amount at any
time outstanding.
6.18. Merger. The Company will not, nor will it permit any Subsidiary
to, merge or consolidate with or into any other Person, except that (a) any
Subsidiary of the Company may merge into
70
the Company or a Wholly-Owned Subsidiary of the Company and (b) any Loan Party
(other than the Company) may merge with any other Loan Party.
6.19. Sale of Assets. The Company will not, nor will it permit any
Subsidiary to, sell, lease, license, transfer, assign or otherwise dispose of
any of its Property, whether in one or a series of transactions, other than
inventory sold 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; provided, however, that, this Section 6.19 will not prohibit any of
the following so long as none of the following would require a prepayment under
the Subordinated Debt, the Third Secured Term Loan Debt, the Fourth Secured Term
Loan Debt or the Second Secured Debt, (a) any such sale, lease, license,
transfer, assignment or other disposition if 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 Closing Date of this Agreement shall not
constitute a Substantial Portion in the aggregate and if, immediately after such
transaction, no Unmatured Default or Default shall exist or shall have occurred
and be continuing, (b) sales of assets (other than Accounts) in the ordinary
course of business as to which proceeds are used or contractually committed to
be used within 180 days to purchase assets of at least equivalent value to those
sold, (c) sales as to which proceeds are used to make optional prepayments on
the Secured Obligations, provided that such prepayments on the Secured
Obligations also permanently reduce the Commitments by the amount of such
payments, (d) transfers of assets, including without limitation Capital Stock,
between Guarantors or between the Company and Guarantors or between Subsidiaries
which are not Guarantors or from a Subsidiary which is not a Guarantor to a
Guarantor or the Company, it being understood that for purposes of this clause
(d) a Guarantor shall include any Subsidiary which becomes a Guarantor
immediately after such transfer, (e) any Investment permitted by Section 6.19,
(f) the disposition of Cash Equivalent Investments in the ordinary course of
business, or (g) such transfer of assets as pursuant to a dividend or redemption
permitted by Section 6.16; provided, however, in the case of any of the
foregoing permitted sales, leases, licenses, transfers, assignments or other
dispositions (an "Asset Sale") the Company shall not, and shall not permit any
of its Subsidiaries to, consummate an Asset Sale unless (A) except for transfers
under clause (d), (e) or (f) above, 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 (and if such sale if of a material amount of assets, such
fair market value shall be 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) except for transfers under clause (d), (e) or (f) above, at least 80% of the
consideration therefor received by the Company or such Subsidiary is in the form
of cash or Cash Equivalent Investments; 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 by the Company or any
Guarantor.
6.20. Investments and Acquisitions. The Company will not, nor will it
permit any Subsidiary to, (a) make or suffer to exist any Investments (including
without limitation, loans and advances to, and other Investments in,
Subsidiaries), or commitments therefor, (b) create any Subsidiary or (c) become
or remain a partner in any partnership or joint venture, or (d) make any
Acquisition, except:
(i) Cash Equivalent Investments, subject to control agreements
in favor of the Agent for the benefit of the Lenders or otherwise
subject to a perfected security interest in favor of the Agent for the
benefit of the Lenders;
71
(ii) extensions of trade credit made in the ordinary course of
business on customary credit terms;
(iii) investments, loans and advances in and to any Guarantor
or the Company or otherwise pursuant to a transaction permitted by
Section 6.19(d);
(iv) extensions of credit made after the Closing Date to
employees and officers of the Company and its Subsidiaries permitted by
law, in the ordinary course of business and not in excess of $1,500,000
in cash in aggregate amount outstanding at any one time for all
employees and officers plus non-cash amounts advanced to officers and
employees solely for the purpose of purchasing Capital Stock of the
Company and which do not result in the transfer of any cash or any
other assets of the Company or any of its Subsidiaries to any such
employees and officers, other than common stock of the Company in
exchange for a note payable by such officer or employee to the Company;
(v) those Investments described in Schedule 6.20 hereto,
having the same terms as existing on the date of this Agreement,
provided that, if no Default or Unmatured Default has occurred and is
continuing or would be caused thereby, such Investments may be
extended, renewed or recharacterized from time to time and interest on
intercompany loans owing by the Company or a Subsidiary may be forgiven
or deferred, but no increase in the amount of any such Investment shall
be permitted;
(vi) stock, obligations or securities received in settlement
of debts created in the ordinary course of business and owing to the
Company or any Subsidiary or in satisfaction of judgments;
(vii) investments, loans and advances in and to any Subsidiary
which is not a Guarantor or any person becoming a Subsidiary as a
result thereof which is not a Guarantor if 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: (A) the terms and conditions thereof shall be
reasonably satisfactory to the Agent, (B) no Unmatured Default or
Default shall exist or shall have occurred and be continuing, (C) the
representations and warranties contained in the Loan Documents shall be
true and correct in all material respects on and as of the date such
investment, loan or advance is made as if made on the date thereof and
giving effect thereto, (D) after giving effect to such investment, loan
or advance, the Availability is at least $15,000,000 in Revolving
Loans, and (E) the aggregate amount of all investments, loans and
advances in and to any Subsidiary which is not a Guarantor or any
person becoming a Subsidiary as a result thereof which is not a
Guarantor shall not exceed $5,000,000;
(viii) investments, loans and advances after the Closing Date
of this Agreement in Unrestricted Subsidiaries in aggregate outstanding
amount not exceeding $500,000;
(ix) investments in joint ventures not to exceed $2,500,000 in
aggregate outstanding amount; and
(x) other investments after the Closing Date in an aggregate
amount not exceeding $3,000,000 at any time outstanding.
6.21. Liens. The Company will not, nor will it permit any Subsidiary
to, will create, incur, or suffer to exist any Lien in, of, or on its Property,
except the following (collectively, "Permitted Liens"):
72
(a) 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;
(b) 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 (i) pledges or deposits under worker's compensation
laws, unemployment insurance laws or similar legislation, (ii) 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, (iii) liens imposed by law, such as those of landlords,
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 the Company or such Subsidiary, (iv) liens securing taxes,
assessments or other governmental charges or levies not yet subject to
penalties for nonpayment, and (v) 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;
(c) 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;
(d) Liens created pursuant to the Collateral Documents and
Liens expressly permitted by the Collateral Documents;
(e) Each Lien described in Schedule 6.21 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 secured as of the Closing Date;
(f) 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 (i) such Lien does
not encumber any other asset at any time owned by the Company or such
Subsidiary, (ii) not more than one such Lien shall encumber such fixed
asset at any one time and (iii) the aggregate amount of Indebtedness
secured by all such Liens does not exceed the amount permitted by
Section 6.17(g);
(g) 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;
73
(h) Any Lien created to secure Indebtedness of a Foreign
Subsidiary permitted pursuant to Section 6.17(i) or (m) to the extent
granting such a Lien is customary for borrowers generally in the
country in which such Foreign Subsidiary is borrowing and provided that
the aggregate amount of Indebtedness secured by all such Liens does not
exceed $10,000,000 (or the Dollar Amount thereof);
(i) Liens securing the Fourth Secured Term Loan Debt on the
assets of the Company and the Guarantors and Liens securing not more
than $2,391,782.70 in principal amount of the Fourth Secured Term Loan
Debt on the accounts receivable of the U.K. Borrower, provided that all
of the foregoing Liens shall be (i) be limited to assets on which the
Agent and the Lenders have a first priority Lien securing the Secured
Obligations and (ii) subordinate and junior in priority to all Liens in
favor of the Agent securing the Secured Obligations under the
Intercreditor Agreement;
(j) Liens securing the Third Secured Term Loan Debt on the
assets of the Company and the Guarantors and Liens securing not more
than $3,500,000 in principal amount of the Third Secured Term Loan Debt
on the accounts receivable of the U.K. Borrower, provided that all of
the foregoing Liens shall be (i) be limited to assets on which the
Agent and the Lenders have a first priority Lien securing the Secured
Obligations and (ii) subordinate and junior in priority to all Liens in
favor of the Agent securing the Secured Obligations under the
Intercreditor Agreement; and
(k) Liens securing the Second Secured Debt on the assets of
the Company and the Guarantors and Liens securing not more than
$10,570,000 in principal amount of the Second Secured Debt on the
accounts receivable of the U.K. Borrower, provided that all of the
foregoing Liens shall be (i) limited to assets on which the Agent and
the Lenders have a first priority Lien securing the Secured Obligations
and (ii) subordinate and junior in priority to all Liens in favor of
the Agent securing the Secured Obligations under the Intercreditor
Agreement.
(l) Other Liens securing Indebtedness not exceeding $2,000,000
in aggregate amount outstanding at any time.
6.22. Change of Corporate Name or Location; Change of Fiscal Year. No
Loan Party shall (a) change its name as it appears in official filings in the
state of its incorporation or organization, (b) change its chief executive
office, principal place of business, mailing address, corporate offices or
warehouses or locations at which Collateral is held or stored, or the location
of its records concerning the Collateral as set forth in the Security Agreement,
(c) change the type of entity that it is, (d) change its organization
identification number, if any, issued by its state of incorporation or other
organization, or (e) change its state of incorporation or organization, in each
case, without at least thirty days prior written notice to the Agent and the
Agent shall have either (1) determined that such event or occurrence will not
adversely affect the validity, perfection or priority of the Agent's security
interest in the Collateral, or (2) after the Agent's written acknowledgment that
any reasonable action requested by the Agent in connection therewith, including
to continue the perfection of any Liens in favor of the Agent, on behalf of
Lenders, in any Collateral, has been completed or taken, and, provided that, any
new location shall be in the continental U.S.
6.23. Affiliate Transactions. The Company will not, nor will it permit
any Subsidiary to, except for transactions described on Schedule 5.23, enter
into or permit to exist any transaction or series of related transactions
(including the purchase, sale lease or exchange of any property, employee
compensation arrangements or the rendering of any service) with any Affiliate of
the Company (an "Affiliate Transaction") unless the terms thereof (1) are no
less favorable to the Company or such
74
Subsidiary than those that could be obtained at the time of such transaction in
arm's-length dealings with a Person who is not such an Affiliate, (2) if such
Affiliate Transaction (or series of related Affiliate Transactions) involve
aggregate payments in an amount in excess of $1,000,000 (i) are set forth in
writing and (ii) comply with clause (1), (3) if such Affiliate Transaction (or
series of related Affiliate Transactions) involves aggregate payments in an
amount in excess of $2,500,000 in any one year, (i) are set forth in writing,
(ii) comply with clause (2) and (iii) have been approved by a majority of the
disinterested members of the Board of Directors, and (4) if such Affiliate
Transaction (or series of related Affiliate Transactions) involves aggregate
payments in an amount in excess of $10,000,000 in any one year, (i) comply with
clause (3) and (ii) have been determined by a nationally recognized investment
banking firm to be fair, from a financial standpoint, to the Company and its
Subsidiaries, provided that transactions between or among the Company and/or the
Guarantors shall not be subject to clause (4) above.
6.24. Amendments to Agreements; Etc. The Company will not, and will not
permit any Subsidiary to, amend or terminate its organizational documents or
by-laws in a manner that would be adverse to the Lenders or enter into any
material agreement or permit or suffer any Subsidiary to enter into any such
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.
6.25. Subsidiary Dividends. The Company 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 (A) such encumbrances or
restrictions required by applicable law; (B) such encumbrances or restrictions
consisting of customary non-assignment provisions in leases governing leasehold
interests to the extent such provisions restrict the transfer of the lease or
the property leased thereunder and (C) such encumbrances or restrictions with
respect to Indebtedness of a Foreign Subsidiary permitted pursuant to Section
6.17 and which encumbrances or restrictions are customary in agreements of such
type or with respect to the Indebtedness of Foreign Subsidiaries described on
Schedule 5.22 and existing as of the Closing Date.
6.26 Payments and Modification of Debt. The Company will not, nor will
it permit any Subsidiary to, (i) make any optional payment, defeasance (whether
a covenant defeasance, legal defeasance or other defeasance), prepayment,
repurchase (including without limitation any offer to repurchase or other
payment based on excess cash flow or any similar terms, whether optional or
mandatory, it being acknowledged and agreed that any such payment based on
excess cash flow or any similar terms that is mandatory may be prohibited by the
terms of this Agreement and is so prohibited) or other redemption of any of its
or any of its Subsidiaries' Subordinated Debt, Second Secured Debt, Third
Secured Term Loan Debt, Fourth Secured Term Loan Debt or other Indebtedness,
other than (A) the Secured Obligations, (B) in the case of Indebtedness that is
not Subordinated Debt, Second Secured Debt, Third Secured Term Loan Debt or
Fourth Secured Term Loan Debt and if no Unmatured Default or Default exists or
would be caused thereby, payments of revolving credit facilities by Foreign
Subsidiaries in the ordinary course of business (provided such payments are from
the revenues of such Foreign Subsidiaries and not, directly or indirectly, from
proceeds of any Advances) and prepayments of Indebtedness between the Company
and its Subsidiaries or between Subsidiaries of the Company and (C) any optional
payment or defeasance or open-market purchase of any Subordinated Debt, Second
Secured Debt, Third Secured Term Loan Debt, Fourth Secured Term Loan Debt or
other Indebtedness solely with the proceeds of common Capital Stock of the
Company or with Subordinated Debt of the Company, (ii)
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amend or modify, or consent or agree to any amendment or modification of
(including without limitation any supplemental agreement or other direct of
indirect method of providing additional or supplemental terms or consideration),
any Second Secured Debt Document, any Third Secured Term Loan Debt Document, any
Fourth Secured Term Loan Debt Document or any Subordinated Debt Document, (iii)
enter into any agreement or arrangement requiring any defeasance of any kind of
any of its Subordinated Debt, Second Secured Debt, Third Secured Term Loan Debt
or Fourth Secured Term Loan Debt, or designate any Indebtedness (other than the
Secured Obligations) as "Designated Senior Indebtedness" under the Subordinated
Debt Documents, or issue any security, instrument or other document evidencing
any of the Subordinated Debt outstanding pursuant to any of the Subordinated
Debt Documents which is not a "Security" as defined in the Subordinated Note
Indenture. It is acknowledged and agreed that the payment of any fees or the
transfer of any other asset or other consideration of any kind, directly or
indirectly, by the Borrower or any of its Subsidiaries (other than payments to
the extent required under the original terms of the Second Secured Debt
Documents, the Third Secured Term Loan Debt Documents, Fourth Secured Term Loan
Debt Documents and the Subordinated Debt Documents, in all cases in the form
delivered to the Lenders without any amendment or other modification) or other
supplemental agreement with respect to any Second Secured Debt, the Third
Secured Term Loan Debt, the Fourth Secured Term Loan Debt or Subordinated Debt
shall be deemed an amendment or modification thereof.
6.27 Financial Contracts. The Company will not, nor will it permit any
Subsidiary to, incur or remain liable with respect to any Financial Contracts
except for purposes of hedging and not for speculative purposes.
6.28 Capital Expenditures. The Company will not, as calculated for the
Company and its Subsidiaries on a consolidated basis, expend, or be committed to
expend, for Capital Expenditures for any Fiscal Year in an amount in excess of
(a) $15,000,000 plus (b) commencing with the Fiscal Year ending January 2, 2005,
up to $5,000,000 of amounts available for Capital Expenditures not used by the
Company and its Subsidiaries in the immediately preceding Fiscal Year.
6.29 Management Fees; Etc.. The Company will not, nor will it permit
any Subsidiary to, pay, whether directly or indirectly, any management fees, any
other fees or any other payments of any kind to CVC, CSCL, the Third Secured
Term Lender or any Affiliate thereof, except to the extent required under the
Fourth Secured Term Loan Agreement or the Third Secured Term Loan Agreement, a
$750,000 placement fee payable to the Third Secured Term Lender, stock purchase
warrants for common Capital Stock of the Company and reasonable legal fees of
CVC, CSCL and the Third Secured Term Lender in connection with the negotiation,
execution, delivery, amendment, administration and enforcement of the agreements
and documents governing the Fourth Secured Term Loan or the Third Secured Term
Loan.
6.30 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
$5,000,000, including all such instruments or agreements in existence as of the
date hereof (other than the Subordinated Debt Documents, Second Secured Debt
Documents and the Secured Obligations) 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 financial
covenants or the equivalent thereof 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 financial covenants or the equivalent thereof, 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, Sections 4.3, 4.5, 4.6,
4.7 and 4.8 of the
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Subordinated Note Indenture and Sections 4.3, 4.5, 4.6, 4.7, 4.8, 4.9, 4.22 and
5.1 of the Second Secured Note Indenture, together with any related definitions,
are hereby incorporated by reference into this Agreement to the same extent as
if set forth fully herein, and no subsequent amendment, waiver, termination or
modification thereof shall effect any such covenants, terms, conditions or
defaults as incorporated herein.
6.31. Financial Covenants.
6.31.1. Fixed Charge Coverage Ratio. After any Borrowing Base
Availability Deficiency Event, the Company will not permit the Fixed
Charge Coverage Ratio, determined as of the end of each of its Fiscal
Quarters for the then most-recently ended four Fiscal Quarters (or, for
the Fiscal Quarter ending September 28, 2003, determined as of the end
of such Fiscal Quarter for the then most-recently ended three Fiscal
Quarters), to be less than 1.0 to 1.0.
6.31.2. Minimum Availability. The Company shall maintain
Availability of not less than $10,000,000 at all times.
6.32. Lenders as Depository Banks; Dominion of Funds. Each Loan Party
shall maintain one or more of the Lenders as such Loan Party's principal
depository bank(s), including for the maintenance of operating, administrative,
cash management, collection activity, and other deposit accounts for the conduct
of its business. Promptly upon the request of the Agent at any time, the Company
shall, and shall cause each Loan Party to, enter into a dominion of funds
arrangement with the Agent and/or certain Lenders and shall execute and deliver
any and all further documents necessary or desirable to implement such dominion
of funds arrangement, including without limitation any lock box agreements
and/or blocked account agreements. After a Borrowing Base Availability
Deficiency Event, all funds received in any depositary accounts shall be applied
daily to the outstanding Loans and used as cash collateral for any outstanding
Facility LCs' if all Loans have been paid in full.
ARTICLE VII
DEFAULTS
The occurrence of any one or more of the following events shall
constitute a "Default" hereunder:
(a) any representation or warranty made or deemed made by or
on behalf of any Loan Party or any of their Subsidiaries to the Lenders
or the Agent under or in connection with this Agreement, any other Loan
Document, any Credit Extension, or any certificate or information
delivered in connection with any of the foregoing shall be materially
false on the date as of which made;
(b) nonpayment, when due (whether upon demand or otherwise),
of any principal, interest or commitment fees, or nonpayment, within
one Business Day of when due (whether upon demand or otherwise), of any
Reimbursement Obligation or nonpayment, within three Business Days of
when due (whether upon demand or otherwise), of any other obligation
owing under any Loan Document or of any other Secured Obligations;
(c) the breach by any Loan Party of any of the terms or
provisions of Section 6.1, 6.2, 6.3, 6.16 through 6.22 or 6.23 through
6.32;
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(d) the default or breach by any Loan Party (other than a
default or breach which constitutes a Default under another Section of
this Article VII) of any of the terms or provisions of this Agreement
or any other Loan Document which is not remedied within fifteen days of
such breach after written notice thereof shall have been given to the
Borrowers by the Agent;
(e) failure of the Company or any of its Subsidiaries to pay
when due any Material Indebtedness beyond any period of grace provided
with respect thereto or a default, breach or other event occurs under
any term, provision or condition contained in any Material Indebtedness
Agreement of the Company or any of its Subsidiaries, the effect of
which default, event or condition is to cause, or to permit the
holder(s) of such Material Indebtedness or the lender(s) under any
Material Indebtedness Agreement to cause, such Material Indebtedness to
become due prior to its stated maturity or any commitment to lend under
any Material Indebtedness Agreement to be terminated prior to its
stated expiration date; any Material Indebtedness of the Company or any
of its Subsidiaries shall be declared to be due and payable or required
to be prepaid or repurchased (other than by a regularly scheduled
payment) prior to the stated maturity thereof; or the Company or any of
its Subsidiaries shall not pay, or admit in writing its inability to
pay, its debts generally as they become due;
(f) the Company or any of its Significant Subsidiaries shall
(i) have an order for relief entered with respect to it under the
Bankruptcy Code as now or hereafter in effect, (ii) make an assignment
for the benefit of creditors, (iii) apply for, seek, consent to, or
acquiesce in, the appointment of a receiver, custodian, trustee,
examiner, liquidator or similar official for it or any Substantial
Portion of its Property, (iv) institute any proceeding seeking an order
for relief under the Bankruptcy Code as now or hereafter in effect or
seeking to adjudicate it a bankrupt or insolvent, or seeking
dissolution, winding up, liquidation, reorganization, arrangement,
adjustment or composition of it or its debts under any law relating to
bankruptcy, insolvency or reorganization or relief of debtors or fail
to file an answer or other pleading denying the material allegations of
any such proceeding filed against it, (v) have any other Insolvency
Proceeding commenced by or against it, and, if such Insolvency
Proceeding is instituted against any Borrower or such Significant
Subsidiary and is being contested by such Borrower or such Significant
Subsidiary, as the case may be, in good faith by appropriate
proceedings, such Insolvency Proceeding shall remain undismissed or
unstayed for a period of sixty days, (vi) take any corporate, company,
partnership or other action to authorize or effect any of the foregoing
actions set forth in this subsection (f) or (vii) fail to contest in
good faith any appointment or proceeding described in subsection (g)
below;
(g) a receiver, trustee, examiner, liquidator or similar
official shall be appointed for Company or any of its Significant
Subsidiaries or any Substantial Portion of its Property, or a
proceeding described in subsection (f)(iv) of Article VII or other
Insolvency Proceeding shall be instituted against Company or any of its
Significant Subsidiaries and such appointment continues undischarged or
such proceeding continues undismissed or unstayed for a period of sixty
consecutive days;
(h) any court, government or governmental agency shall
condemn, seize or otherwise appropriate, or take custody or control of,
all or any portion of the Property of Company or any of its
Subsidiaries which, when taken together with all other Property of
Company or any of its Subsidiaries so condemned, seized, appropriated,
or taken custody or control of, during the twelve-month period ending
with the month in which any such action occurs, constitutes a
Substantial Portion;
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(i) any loss, theft, damage or destruction of any item or
items of Collateral or other property of any Loan Party occurs which
could reasonably be expected to cause a Material Adverse Effect and is
not adequately covered by insurance;
(j) One or more judgments or orders for the payment of money
(not fully paid or covered without dispute or reservation by insurance)
in an aggregate amount of $5,000,000 in any fiscal year shall be
rendered against the Company or any of its Significant Subsidiaries, or
any other judgment or order (whether or not for the payment of money)
shall be rendered against or shall affect the Company or any of its
Subsidiaries which causes or could reasonably be expected to cause or
could reasonably be expected to have a Material Adverse Effect, and
either (i) such judgment or order shall have remained unsatisfied and
the Company or such Significant 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;
(k) any Change in Control shall occur;
(l) the Unfunded Liabilities of all Single Employer Plans
shall exceed in the aggregate $5,000,000 or any Reportable Event shall
occur in connection with any Plan;
(m) the Company or any other member of the Controlled Group
shall have been notified by the sponsor of a Multiemployer Plan that it
has incurred withdrawal liability to such Multiemployer Plan in an
amount which, when aggregated with all other amounts required to be
paid to Multiemployer Plans by the Company or any other member of the
Controlled Group as withdrawal liability (determined as of the date of
such notification), exceeds $5,000,000 or requires payments exceeding
$5,000,000 per annum;
(n) the Company or any other member of the Controlled Group
shall have been notified by the sponsor of a Multiemployer Plan that
such Multiemployer Plan is in reorganization or is being terminated,
within the meaning of Title IV of ERISA, if as a result of such
reorganization or termination the aggregate annual contributions of the
Company and the other members of the Controlled Group (taken as a
whole) to all Multiemployer Plans which are then in reorganization or
being terminated have been or will be increased over the amounts
contributed to such Multiemployer Plans for the respective plan years
of each such Multiemployer Plan immediately preceding the plan year in
which the reorganization or termination occurs by an amount exceeding
$5,000,000;
(o) the Company or any of its Subsidiaries shall (i) be the
subject of any proceeding or investigation pertaining to the release by
the Company or any of its Subsidiaries or any other Person of any toxic
or hazardous waste or substance into the environment, or (ii) violate
any Environmental Law, which, in the case of an event described in
clause (i) or clause (ii), could reasonably be expected to have a
Material Adverse Effect;
(p) the occurrence of any "default", as defined in any Loan
Document (other than this Agreement) or the breach of any of the terms
or provisions of any Loan Document (other than this Agreement), which
default or breach continues beyond any period of grace therein
provided;
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(q) any Collateral Document shall for any reason fail to
create a valid and perfected first priority security interest in any
Collateral purported to be covered thereby, except as permitted by the
terms of any Collateral Document, or any Collateral Document shall fail
to remain in full force or effect or any action shall be taken to
discontinue or to assert the invalidity or unenforceability of any
Collateral Document;
(r) any material provision of any Loan Document for any reason
ceases to be valid, binding and enforceable in accordance with its
terms (or any party thereto (other than the Agent or any Lender) shall
challenge the enforceability of any Loan Document or shall assert in
writing, or engage in any action or inaction based on any such
assertion, that any provision of any of the Loan Documents has ceased
to be or otherwise is not valid, binding and enforceable in accordance
with its terms);
(s) the representations and warranties set forth in Section
5.17 (Plan Assets; Prohibited Transactions) shall at any time not be
true and correct; or
(t) The occurrence of any of the following with respect to any
payments or transfers of any kind to be made on or after the date
hereof in connection with any Acquisition closed prior to the date
hereof, including without limitation all deferred payments, all earn
out payments and other contingent payments and all other payments
pursuant to any such Acquisition, excluding any payments that consist
solely of interest which is accrued and not paid and excluding
customary indemnitees and tax payments (all of the foregoing
collectively defined as "Earn Out Payments"):
(i) the amount of Earn Out Payments exceeds
$20,000,000 in the aggregate, or
(ii) immediately before and after (on a pro forma
basis acceptable to the Agent, including without limitation on a pro
forma basis to eliminate any unusual changes in working capital that
increase Availability) any Earn-Out Payment is made, Availability is or
would be less than $20,000,000; or
(iii) the Company shall fail to give the Agent
written notice of the intent to pay any Earn Out Payment at least five
days prior to its payment.
ARTICLE VIII
REMEDIES; WAIVERS AND AMENDMENTS
8.1. Remedies.
(a) If any Default occurs and is continuing, the Agent may in
its discretion (and at the written request of the Required Lenders, shall) (i)
reduce the Aggregate Commitment, the Commitment, the advance rates set forth in
the definition of the Borrowing Base or reduce one or more of the other elements
used in computing the Borrowing Base, (ii) terminate or suspend the obligations
of the Lenders to make Loans hereunder and the obligation and power of the LC
Issuer to issue Facility LCs, (iii) declare all or any portion of the
Obligations to be due and payable, whereupon the Obligations shall become
immediately due and payable, without presentment, demand, protest or notice of
any kind, all of which the Loan Parties hereby expressly waive, (iv) upon notice
to the Company and in addition to the continuing right to demand payment of all
amounts payable under this Agreement, the Agent may either (1) make demand on
the Borrowers to pay, and the each Borrower will, forthwith upon such demand and
without any further notice or act, pay to the Agent an amount, in immediately
available funds (which
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funds shall be held in the Facility LC Collateral Account), equal to 105% of the
Collateral Shortfall Amount or (2) deliver a Supporting Letter of Credit as
required by Section 2.1.2(l), whichever the Agent may specify in its sole
discretion, (v) increase the rate of interest applicable to the Loans and the LC
Fees as set forth in this Agreement and (vi) exercise any rights and remedies
provided to Agent under the Loan Documents or at law or equity, including all
remedies provided under the UCC.
(b) If any Default described in subsections (f) or (g) of
Article VII occurs and is continuing with respect to any Loan Party, the
obligations of the Lenders to make Loans hereunder and the obligation and power
of the LC Issuer to issue Facility LCs shall automatically terminate and all
Obligations shall immediately become due and payable without any election or
action on the part of the Agent, the LC Issuer or any Lender and the Loan
Parties will be and become thereby unconditionally obligated, without any
further notice, act or demand, to pay to the Agent an amount equal to 105% of
the Collateral Shortfall Amount, which funds shall be deposited in the Facility
LC Collateral Account.
(c) If, within thirty days after acceleration of the maturity
of the Obligations or termination of the obligations of the Lenders to make
Loans and the obligation and power of the LC Issuer to issue Facility LCs
hereunder as a result of any Default (other than any Default as described in
subsections (f) or (g) of Article VII with respect to any Borrower) and before
any judgment or decree for the payment of the Obligations due shall have been
obtained or entered, the Required Lenders (in their sole discretion) shall so
direct, the Agent shall, by notice to the Company, rescind and annul such
acceleration and/or termination.
(d) If at any time while any Default is continuing, the Agent
determines that the Collateral Shortfall Amount at such time is greater than
zero, the Agent may make demand on the Borrowers to pay, and the Borrowers will,
forthwith upon such demand and without any further notice or act, pay to the
Agent an amount equal to 105% of the Collateral Shortfall Amount, which funds
shall be deposited in the Facility LC Collateral Account. The Borrowers hereby
pledge, assign, and grant to the Agent, on behalf of and for the benefit of the
Agent, the Lenders, and the LC Issuer, a security interest in all of their
right, title, and interest in and to all funds which may from time to time be on
deposit in the Facility LC Collateral Account to secure the prompt and complete
payment and performance of the Obligations.
(e) The Agent may at any time or from time to time after funds
are deposited in the Facility LC Collateral Account and any Default is
continuing, apply such funds to the payment of the Obligations and any other
amounts as shall from time to time have become due and payable by the Borrowers
to the Lenders or the LC Issuer under the Loan Documents.
(f) At any time while any Default is continuing, neither any
Borrower nor any Person claiming on behalf of or through any Borrower shall have
any right to withdraw any of the funds held in the Facility LC Collateral
Account. After all of the Secured Obligations have been indefeasibly paid in
full and the Aggregate Commitment has been terminated, any funds remaining in
the Facility LC Collateral Account shall be returned by the Agent to the
Borrowers or paid to whomever may be legally entitled thereto at such time.
8.2. Waivers by Loan Parties. Except as otherwise provided for in this
Agreement or by applicable law, each Loan Party waives: (a) presentment, demand
and protest and notice of presentment, dishonor, notice of intent to accelerate,
notice of acceleration, protest, default, nonpayment, maturity, release,
compromise, settlement, extension or renewal of any or all commercial paper,
accounts, contract rights, documents, instruments, chattel paper and guaranties
at any time held by the Agent on which any Loan Party may in any way be liable,
and hereby ratifies and confirms whatever the Agent may do in this regard, (b)
all rights to notice and a hearing prior to the Agent's taking possession or
control of, or to the
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Agent's replevy, attachment or levy upon, the Collateral or any bond or security
that might be required by any court prior to allowing the Agent to exercise any
of its remedies, and (c) the benefit of all valuation, appraisal, marshaling and
exemption laws.
8.3. Amendments.
(a) Subject to the provisions of this Section 8.3, no
amendment, waiver or modification of any provision of this Agreement or
any other Loan Document, and no consent with respect to any departure
by any Loan Party therefrom, shall be effective unless the same shall
be in writing and signed by the Required Lenders (or the Agent with the
consent in writing of the Required Lenders) and the Loan Parties and
then any such waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given.
(b) Notwithstanding subsection (a) above, no such amendment,
waiver or other modification with respect to this Agreement shall,
without the consent of all of the Lenders:
(i) extend the final maturity of any Loan to a date
after the Termination Date;
(ii) Forgive all or any portion of the principal
amount of any Loan or any Reimbursement Obligation;
(iii) reduce the rate or extend the time of payment
of interest or fees payable to the Lenders pursuant to any
Loan Document;
(iv) reduce the percentage or number of Lenders
specified in the definition of Required Lenders;
(v) extend the Termination Date;
(vi) increase the amount of the Aggregate Commitment
or the Commitment of any Lender hereunder (other than pursuant
to Section 12.3);
(vii) increase the advance rates set forth in the
definition of Borrowing Base;
(viii) permit any Loan Party to assign its rights
under this Agreement;
(ix) amend this Section 8.3;
(x) release any material guarantor of any Credit
Extension, except as otherwise permitted herein or in the
other Loan Documents; or
(xi) except as provided in Section 10.16 or any
Collateral Document, release all or substantially all of the
Collateral.
(c) Notwithstanding subsections (a) or (b) above, in addition
to amendments effected pursuant to the foregoing, Schedule 1.1 may be
amended as follows:
(i) Schedule 1.1 may be amended to add Subsidiaries
of the Company as additional Foreign Borrowing Subsidiaries
upon (A) execution and delivery by the Company, any such
Foreign Borrowing Subsidiary and the Agent, of a Joinder
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Agreement providing for any such Subsidiary to become a
Foreign Borrowing Subsidiary, (B) delivery to the Agent of (x)
a legal opinion in respect of such additional Foreign
Borrowing Subsidiary acceptable to the Agent and (y) such
other documents with respect thereto as the Agent shall
reasonably request and (C) the written approval of the Agent
in its Permitted Discretion.
(ii) Schedule 1.1 will be amended to remove any
Subsidiary as a Foreign Borrowing Subsidiary upon (A) written
notice by the Company to the Agent to such effect and (B)
repayment in full of all outstanding Secured Obligations of
such Foreign Borrowing Subsidiary.
(d) No amendment of any provision of this Agreement relating
to the Agent or to the Non-Ratable Loans, the Swingline Loans, the
Overadvances or the Protective Advances shall be effective without the
written consent of the Agent. No amendment of any provision relating to
the LC Issuer shall be effective without the written consent of the LC
Issuer. The Agent may (i) amend the Commitment Schedule to reflect
assignments entered into pursuant to Section 12.3, (ii) waive payment
of the fee required under Section 12.3(c) and (iii) implement any
Flex-Pricing Provisions contained in the fee letter described in
Section 10.13 or any commitment letter delivered in connection with the
transaction which is the subject of this Agreement without obtaining
the consent of any other party to this Agreement so long as, in the
case of any implementation of any Flex-Pricing Provisions, the Agent's
actions would not require consent of all of the Lenders pursuant to the
foregoing provisions of this Section.
(e) 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 Credit Exposure of each Defaulting Lenders shall be
disregarded.
(f) If, in connection with any proposed amendment, waiver or
consent (a "Proposed Change") requiring the consent of all Lenders, the
consent of the Required Lenders is obtained, but the consent of other
Lenders is not obtained (any such Lender whose consent is not obtained
being referred to herein as a "Non-Consenting Lender"), then, so long
as the Agent is not a Non-Consenting Lender, the Company may elect to
replace such Non-Consenting Lender as a Lender party to this Agreement,
and each Lender hereby agrees that if it is a Non-Consenting Lender, it
shall agree to such replacement and take such actions as are reasonably
necessary to cause such replacement, provided that, concurrently with
such replacement, (i) another bank or other entity which is reasonably
satisfactory to the Company and the Agent shall agree, as of such date,
to purchase for cash the Advances and other Obligations due to the
Non-Consenting Lender pursuant to an Assignment Agreement and to become
a Lender for all purposes under this Agreement and to assume all
obligations of the Non-Consenting Lender to be terminated as of such
date and to comply with the requirements of Section 12.3 applicable to
assignments, and (ii) the Company shall pay to such Non-Consenting
Lender in same day funds on the day of such replacement (1) all
interest, fees and other amounts then accrued but unpaid to such
Non-Consenting Lender by the Company hereunder to and including the
date of termination, including without limitation payments due to such
Non-Consenting Lender under Sections 3.1, 3.2 and 3.5, and (2) an
amount, if any, equal to the payment which would have been due to such
Lender on the day of such replacement under Section 3.4 had the Loans
of such Non-Consenting Lender been prepaid on such date rather than
sold to the replacement Lender.
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8.4. Preservation of Rights. No delay or omission of the Lenders, the
LC Issuer or the Agent to exercise any right under the Loan Documents shall
impair such right or be construed to be a waiver of any Default or an
acquiescence therein, and the making of a Credit Extension notwithstanding the
existence of a Default or the inability of the Company to satisfy the conditions
precedent to such Credit Extension shall not constitute any waiver or
acquiescence. Any single or partial exercise of any such right shall not
preclude other or further exercise thereof or the exercise of any other right,
and no waiver, amendment or other variation of the terms, conditions or
provisions of the Loan Documents whatsoever shall be valid unless in writing
signed by the Lenders required pursuant to Section 8.3, and then only to the
extent in such writing specifically set forth. All remedies contained in the
Loan Documents or by law afforded shall be cumulative and all shall be available
to the Agent, the LC Issuer and the Lenders until the Obligations have been paid
in full.
ARTICLE IX
GENERAL PROVISIONS
9.1. Survival of Representations. All representations and warranties of
the Loan Parties contained in this Agreement and the other Loan Documents shall
survive the execution and delivery of the Loan Documents and the making of the
Credit Extensions herein contemplated.
9.2. Governmental Regulation. Anything contained in this Agreement to
the contrary notwithstanding, neither the LC Issuer nor any Lender shall be
obligated to extend credit to any Borrower in violation of any limitation or
prohibition provided by any applicable statute or regulation.
9.3. Headings. Section headings in the Loan Documents are for
convenience of reference only, and shall not govern the interpretation of any of
the provisions of the Loan Documents.
9.4. Entire Agreement. The Loan Documents embody the entire agreement
and understanding among the Loan Parties, the Agent, the LC Issuer and the
Lenders and supersede all prior agreements and understandings among the Loan
Parties, the Agent and the Lenders relating to the subject matter thereof other
than those contained in the agreement described in Section 10.13 and any
Flex-Pricing Provisions contained in any commitment letter entered into in
connection with the transaction which is the subject of this Agreement, all of
which shall survive and remain in full force and effect during the term of this
Agreement.
9.5. Several Obligations; Benefits of this Agreement. The respective
obligations of the Lenders hereunder are several and not joint and no Lender
shall be the partner or agent of any other lender (except to the extent to which
the Agent is authorized to act as administrative agent for the Lenders
hereunder). The failure of any Lender to perform any of its obligations
hereunder shall not relieve any other Lender from any of its obligations
hereunder. This Agreement shall not be construed so as to confer any right or
benefit upon any Person other than the parties to this Agreement and their
respective successors and assigns, provided however, that the parties hereto
expressly agree that the Arranger shall enjoy the benefits of the provisions of
Sections 9.6, 9.10 and 10.11 to the extent specifically set forth therein and
shall have the right to enforce such provisions on its own behalf and in its own
name to the same extent as if it were a party to this Agreement.
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9.6. Expenses; Indemnification.
(a) The Borrowers, jointly and severally, shall reimburse the
Agent and the Arranger for any reasonable costs, internal charges and
out-of-pocket expenses (including without limitation reasonable
attorneys' fees) paid or incurred by the Agent or the Arranger in
connection with the preparation, negotiation, execution, delivery,
syndication, distribution (including, without limitation, via the
internet), review, amendment, modification, and administration of the
Loan Documents. The Borrowers, jointly and severally, also agree to
reimburse the Agent, the Arranger, the LC Issuer and the Lenders for
any reasonable costs, internal charges and out-of-pocket expenses
(including without limitation reasonable attorneys' fees) paid or
incurred by the Agent, the Arranger, the LC Issuer or any Lender in
connection with the collection and enforcement of the Loan Documents.
Expenses being reimbursed by the Company under this Section include,
without limitation, reasonable costs and expenses incurred in
connection with:
(i) appraisals of each parcel of real Property or
interest in real Property described in any Collateral
Document, which appraisals shall be in conformity with the
applicable requirements of any law or any governmental rule,
regulation, policy, guideline or directive (whether or not
having the force of law), or any interpretation thereof,
including, without limitation, the provisions of Title XI of
the Financial Institutions Reform, Recovery and Enforcement
Act of 1989, as amended, reformed or otherwise modified from
time to time, and any rules promulgated to implement such
provisions (including travel, lodging, meals and other out of
pocket expenses for inspections of the Collateral and the
Company's operations by the Agent) plus the Agent's then
customary charge for field examinations and audits (provided
that, if no Event of Default has occurred and is continuing,
the Agent may not charge more than $70,000 per Fiscal Year for
such field examinations and audits and no more than four such
field examinations and audits may be performed in any Fiscal
Year at the expense of the Company), and the preparation of
certain audit reports (the "Reports") which the Company
acknowledges may be prepared by Bank One from time to time and
which the Company agrees may be distributed to the Lenders by
Bank One pertaining to the Company's and its Subsidiaries'
assets from information furnished to it by or on behalf of the
Company, after Bank One has exercised its rights of inspection
pursuant to this Agreement;
(ii) any amendment, modification, supplement,
consent, waiver or other documents prepared with respect to
any Loan Document and the transactions contemplated thereby;
(iii) lien and title searches and title insurance
provided, however, that such searches and title insurance with
respect to any particular item of collateral shall not be
obtained more than once in any twelve month period;
(iv) taxes, fees and other charges for recording the
Mortgages, filing financing statements and continuations, and
other actions to perfect, protect, and continue the Agent's
Liens (including costs and expenses paid or incurred by the
Agent in connection with the consummation of the Agreement);
(v) sums paid or incurred to take any action required
of the Company under the Loan Documents that the Company fails
to pay or take;
(vi) any litigation, contest, dispute, proceeding or
action (whether instituted by Agent, the LC Issuer, any
Lender, any Loan Party or any other Person and whether as
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to party, witness or otherwise) in any way relating to the
Collateral, the Loan Documents or the transactions
contemplated thereby; and
(vii) reasonable costs and expenses of forwarding
loan proceeds, collecting checks and other items of payment,
and establishing and maintaining the Funding Account and lock
boxes, and reasonable costs and expenses of preserving and
protecting the Collateral.
The foregoing shall not be construed to limit any other
provisions of the Loan Documents regarding costs and expenses to be
paid by any Loan Party. All of the foregoing reasonable costs and
expenses may be charged to the Company's Loan Account as Revolving
Loans or to another deposit account, all as described in Section
2.17(b).
(b) The Borrowers, jointly and severally, hereby further agree
to indemnify the Agent, the Arranger, the LC Issuer each Lender, their
respective Affiliates, and each of their directors, officers and
employees against all losses, claims, damages, penalties, judgments,
liabilities and expenses (including, without limitation, all expenses
of litigation or preparation therefor whether or not the Agent, the
Arranger, the LC Issuer any Lender or any Affiliate is a party thereto)
which any of them may pay or incur arising out of or relating to this
Agreement, the other Loan Documents, the transactions contemplated
hereby or the direct or indirect application or proposed application of
the proceeds of any Credit Extension hereunder except to the extent
that they are determined in a final non-appealable judgment by a court
of competent jurisdiction to have resulted from the gross negligence or
willful misconduct of the party seeking indemnification. The
obligations of the Borrowers under this Section 9.6 shall survive the
termination of this Agreement.
9.7. Numbers of Documents. All statements, notices, closing documents,
and requests hereunder shall be furnished to the Agent with sufficient
counterparts so that the Agent may furnish one to each of the Lenders.
9.8. Accounting. (a) Except as provided to the contrary herein, all
accounting terms used herein shall be interpreted and all accounting
determinations hereunder shall be made in accordance with GAAP in a manner
consistent with that used in preparing the financial statements referred to in
Section 5.5, except that any calculation or determination which is to be made on
a consolidated basis shall be made for the Company and all its Subsidiaries.
(b) 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 GAAP provided that, if the Company
notifies the Agent that it wishes to amend any covenant in Article VI to
eliminate the effect of any change in GAAP (or if the Agent notifies the Company
that the Required Lenders wish to amend Article VI for such purpose), then the
Company's compliance with such covenants shall be determined on the basis of
GAAP in effect immediately before the relevant change in GAAP became effective
until either such notice is withdrawn or such 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 Chicago time. Notwithstanding anything herein, in any
financial statements of the Company or in GAAP to the contrary, for purposes of
calculating and determining compliance with the financial covenants in Article
VI, 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
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equity interest and all income (except to the extent received by the Company in
cash), liabilities and assets of each Unrestricted Subsidiary shall be excluded
from all such calculations and determinations thereunder and (ii) 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
(including, without limitation, adding back such transaction expenses and other
charges in connection with acquisitions acceptable to the Agent and excluding
such amounts from such pro forma calculations as required by the Agent).
(c) The Company shall deliver to the Lenders at the same time
as the delivery of any annual, quarterly or monthly financial statement under
Section 6.1 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 quarterly financial statements as to which no
objection has been made in accordance with the last sentence of subsection (a)
above and (ii) if requested by the Agent, reasonable estimates of the difference
between such statements arising as a consequence thereof.
(d) To enable the ready and consistent determination of
compliance with the covenants set forth in Article VI hereof, no Loan Party will
change the last day of its Fiscal Year or the last days of its Fiscal Quarters.
9.9. Severability of Provisions. Any provision in any Loan Document
that is held to be inoperative, unenforceable, or invalid in any jurisdiction
shall, as to that jurisdiction, be inoperative, unenforceable, or invalid
without affecting the remaining provisions in that jurisdiction or the
operation, enforceability, or validity of that provision in any other
jurisdiction, and to this end the provisions of all Loan Documents are declared
to be severable.
9.10. Nonliability of Lenders. The relationship between any Loan Party
on the one hand and the Lenders, the LC Issuer and the Agent on the other hand
shall be solely that of debtor and creditor. Neither the Agent, the Arranger,
the LC Issuer nor any Lender shall have any fiduciary responsibilities to any
Loan Party. Neither the Agent, the Arranger, the LC Issuer nor any Lender
undertakes any responsibility to any Loan Party to review or inform such Loan
Party of any matter in connection with any phase of any Loan Party's business or
operations. The Loan Parties agree that neither the Agent, the Arranger, the LC
Issuer nor any Lender shall have liability to any Loan Party (whether sounding
in tort, contract or otherwise) for losses suffered by any Loan Party in
connection with, arising out of, or in any way related to, the transactions
contemplated and the relationship established by the Loan Documents, or any act,
omission or event occurring in connection therewith, unless it is determined in
a final non-appealable judgment by a court of competent jurisdiction that such
losses resulted from the gross negligence or willful misconduct of the party
from which recovery is sought. Neither the Agent, the Arranger, the LC Issuer
nor any Lender shall have any liability with respect to, and each Loan Party
hereby waives, releases and agrees not to xxx for, any special, indirect,
consequential or punitive damages suffered by any Loan Party in connection with,
arising out of, or in any way related to the Loan Documents or the transactions
contemplated thereby.
9.11. Confidentiality. Each Lender agrees to hold any confidential
information which it may receive from any Loan Party in connection with this
Agreement in confidence, except for disclosure (a) to its Affiliates and to
other Lenders and their respective Affiliates, (b) to legal counsel,
accountants, and other professional advisors to such Lender or to a Transferee,
(c) to regulatory officials, (d) to any Person as requested pursuant to or as
required by law, regulation, or legal process, (e) to any Person in
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connection with any legal proceeding to which such Lender is a party, (f) to
such Lender's direct or indirect contractual counterparties in swap agreements
or to legal counsel, accountants and other professional advisors to such
counterparties, (g) permitted by Section 12.4 and (h) to rating agencies if
requested or required by such agencies in connection with a rating relating to
the Credit Extensions hereunder. Notwithstanding anything herein to the
contrary, confidential information shall not include, and each Lender (and each
employee, representative or other agent of any Lender) may disclose to any and
all Persons, without limitation of any kind, the "tax treatment" and "tax
structure" (in each case, within the meaning of Treasury Regulation Section
1.6011-4) of the transactions contemplated hereby and all materials of any kind
(including opinions or other tax analyses) that are or have been provided to
such Lender relating to such tax treatment or tax structure; provided that, with
respect to any document or similar item that in either case contains information
concerning such tax treatment or tax structure of the transactions contemplated
hereby as well as other information, this sentence shall only apply to such
portions of the document or similar item that relate to such tax treatment or
tax structure.
9.12. Nonreliance. Each Lender hereby represents that it is not relying
on or looking to any Margin Stock for the repayment of the Credit Extensions
provided for herein.
9.13. Disclosure. Each Loan Party and each Lender hereby acknowledges
and agrees that Bank One and/or its Affiliates from time to time may hold
investments in, make other loans to or have other relationships with any of the
Loan Parties and their respective Affiliates.
9.14. Amendment and Restatement. This Agreement is an amendment and
restatement of the Existing Credit Agreement. All loans, letters of credit and
other indebtedness, obligations and liabilities under the Existing Credit
Agreement and all Liens securing payment thereof under the Existing Credit
Agreement shall in all respects be continuing and this Agreement shall not be
deemed to evidence or result in a novation or repayment and re-borrowing of such
loans, letters of credit and other indebtedness, obligations and liabilities.
This Agreement shall supersede the Existing Credit Agreement. From and after the
Closing Date, this Agreement shall govern the terms of the loans, letters of
credit and other indebtedness, obligations and liabilities under the Existing
Credit Agreement. To the extent not replaced by Loan Documents dated as of the
Closing Date, any "Loan Documents" (as defined in the Existing Credit Agreement)
executed in connection with the Existing Credit Agreement (other than any such
Loan Document that is specifically terminated by the parties thereto) shall
continue to be effective, and all references in those prior Loan Documents to
the Existing Credit Agreement shall be deemed to refer to this Agreement without
further amendment thereof.
ARTICLE X
THE AGENT
10.1. Appointment; Nature of Relationship. Bank One, NA is hereby
appointed by each of the Lenders as its contractual representative (herein
referred to 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
X. Notwithstanding the use of the defined term "Agent," it is expressly
understood and agreed that the Agent shall 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 contractual 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 (a) does not
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hereby assume any fiduciary duties to any of the Lenders, (b) is a
"representative" of the Lenders within the meaning of the term "secured party"
as defined in the Michigan Uniform Commercial Code and (c) 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.
10.2. 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.
10.3. General Immunity. Neither the Agent nor any of its directors,
officers, agents or employees shall be liable to any Loan Party, 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
to the extent such action or inaction is determined in a final non-appealable
judgment by a court of competent jurisdiction to have arisen from the gross
negligence or willful misconduct of such Person.
10.4. No Responsibility for Credit Extensions, 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 (a) any
statement, warranty or representation made in connection with any Loan Document
or any borrowing hereunder; (b) 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; (c) the satisfaction of any condition specified in Article IV,
except receipt of items required to be delivered solely to the Agent; (d) the
existence or possible existence of any Default or Unmatured Default; (e) the
validity, enforceability, effectiveness, sufficiency or genuineness of any Loan
Document or any other instrument or writing furnished in connection therewith;
(f) the value, sufficiency, creation, perfection or priority of any Lien in any
Collateral; or (g) the financial condition of any Loan Party, any Guarantor or
any Affiliate of any Loan Party. The Agent shall have no duty to disclose to the
Lenders information that is not required to be furnished by the Loan Parties to
the Agent at such time, but is voluntarily furnished by any Loan Party to the
Agent (either in its capacity as the Agent or in its individual capacity).
10.5. Action on Instructions of the 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, and such instructions and any action taken or failure to
act pursuant thereto shall be binding on all of the Lenders. 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. 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.
10.6. 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 the Agent 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 the contractual arrangement
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between the Agent and the Lenders and all matters pertaining to the Agent's
duties hereunder and under any other Loan Document.
10.7. Reliance on Documents; Counsel. The Agent shall be entitled to
rely upon any Note, notice, consent, certificate, affidavit, letter, telegram,
facsimile, telex, electronic mail message, 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. For purposes
of determining compliance with the conditions specified in Sections 4.1 and 4.2,
each Lender that has signed this Agreement shall be deemed to have consented to,
approved or accepted or to be satisfied with, each document or other matter
required thereunder to be consented to or approved by or acceptable or
satisfactory to a Lender unless the Agent shall have received notice from such
Lender prior to the applicable date specifying its objection thereto.
10.8. 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) (a) for any amounts not
reimbursed by the Company for which the Agent is entitled to reimbursement by
the Company under the Loan Documents, (b) 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 (including,
without limitation, for any expenses incurred by the Agent in connection with
any dispute between the Agent and any Lender or between two or more of the
Lenders) and (c) 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 (including, without limitation, for any such amounts incurred by or
asserted against the Agent in connection with any dispute between the Agent and
any Lender or between two or more of the Lenders), or the enforcement of any of
the terms of the Loan Documents or of any such other documents, provided that,
(i) no Lender shall be liable for any of the foregoing to the extent any of the
foregoing is found in a final non-appealable judgment by a court of competent
jurisdiction to have resulted from the gross negligence or willful misconduct of
the Agent and (ii) any indemnification required pursuant to Section 3.5(g)
shall, notwithstanding the provisions of this Section 10.8, be paid by the
relevant Lender in accordance with the provisions thereof. The obligations of
the Lenders under this Section 10.8 shall survive payment of the Obligations and
termination of this Agreement.
10.9. Notice of Default. The Agent shall not be deemed to have
knowledge or notice of the occurrence of any Default or Unmatured 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; provided, that, Agent shall not be liable to any Lender for any failure
to do so, except to the extent that such failure is attributable to Agent's
gross negligence or willful misconduct.
10.10. 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 with respect to its Commitment and its Credit Extensions 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 and
its Affiliates may accept deposits from, lend money to, and generally engage in
any kind of trust, debt, equity or other transaction, in addition to those
contemplated by this Agreement or any other Loan Document, with any Loan Party
in which such Loan Party is not restricted hereby from engaging with any other
Person, all as if Bank One
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were not Agent and without any duty to account therefor to Lenders. Bank One and
its Affiliates may accept fees and other consideration from any Loan Party for
services in connection with this Agreement or otherwise without having to
account for the same to Lenders. The Agent in its individual capacity, is not
obligated to remain a Lender.
10.11. Lender Credit Decision. Each Lender acknowledges that it has,
independently and without reliance upon the Agent, the Arranger or any other
Lender and based on the financial statements prepared by the Loan Parties 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, the Arranger 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.
10.12. Successor Agent. The Agent may resign at any time by giving
written notice thereof to the Lenders and the Borrowers, 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. The Agent may be removed at any time with or without cause
by written notice received by the Agent from the Required Lenders, such removal
to be effective on the date specified by the Required Lenders. Upon any such
resignation or removal, the Required Lenders shall have the right to appoint, on
behalf of the Borrowers 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 Borrowers and the Lenders, a
successor Agent. Notwithstanding the previous sentence, the Agent may at any
time without the consent of the Borrowers or any Lender, appoint any of its
Affiliates which is a commercial bank as a successor Agent hereunder. If the
Agent has resigned or been removed and no successor Agent has been appointed,
the Lenders may perform all the duties of the Agent hereunder and the Borrowers
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 $100,000,000. 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 or removed Agent. Upon
the effectiveness of the resignation or removal of the Agent, the resigning or
removed Agent shall be discharged from its duties and obligations hereunder and
under the Loan Documents. After the effectiveness of the resignation or removal
of an Agent, the provisions of this Article X 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. In the event that there is a successor to the Agent by merger, or the
Agent assigns its duties and obligations to an Affiliate pursuant to this
Section 10.12, then the term "Prime Rate" as used in this Agreement means the
prime rate, base rate or other analogous rate of the new Agent.
10.13. Agent and Arranger Fees. The Company agrees to pay to the Agent
and the Arranger, for their respective accounts, the fees agreed to by the
Company, the Agent and the Arranger from time to time.
10.14. Delegation to Affiliates. The Loan Parties and the Lenders agree
that the Agent may delegate any of its duties under this Agreement to any of its
Affiliates. Any such Affiliate (and such Affiliate's directors, officers, agents
and employees) which performs duties in connection with this Agreement shall be
entitled to the same benefits of the indemnification, waiver and other
protective provisions to which the Agent is entitled under Articles IX and X.
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10.15. Execution of Loan Documents. The Lenders hereby empower and
authorize the Agent, on behalf of the Agent and the Lenders, to execute and
deliver to the Loan Parties the Loan Documents and all related agreements,
certificates, documents, or instruments as shall be necessary or appropriate to
effect the purposes of the Loan Documents. Each Lender agrees that any action
taken by the Agent or the Required Lenders in accordance with the terms of this
Agreement or the other Loan Documents, and the exercise by the Agent or the
Required Lenders of their respective powers set forth therein or herein,
together with such other powers that are reasonably incidental thereto, shall be
binding upon all of the Lenders. The Lenders acknowledge that all of the
Obligations hereunder constitute one debt, secured pari passu by all of the
Collateral.
10.16. Collateral Matters.
(a) The Lenders hereby irrevocably authorize the Agent, at its
option and in its sole discretion, to release or subordinate (as
applicable) any Liens granted to the Agent by the Loan Parties on any
Collateral (i) upon the termination of the Aggregate Commitment and
payment and satisfaction in full in cash of all Obligations, (ii)
constituting Property being sold or disposed of if the Loan Party
disposing of such Property certifies to the Agent that the sale or
disposition is made in compliance with the terms of this Agreement (and
the Agent may rely conclusively on any such certificate, without
further inquiry), (iii) constituting Property in which no Loan Party
has at any time during the term of this Agreement owned any interest,
(iv) constituting property leased to a Loan Party under a lease which
has expired or been terminated in a transaction permitted under this
Agreement, (v) owned by or leased to an Loan Party which is subject to
a purchase money security interest or which is the subject of a
Capitalized Lease, in either case, entered into by such Loan Party
pursuant to Section 6.17(g), or (vi) as required to effect any sale or
other disposition of such Collateral in connection with any exercise of
remedies of the Agent and the Lenders pursuant to Section 8.1. Upon
request by the Agent at any time, the Lenders will confirm in writing
the Agent's authority to release any Liens upon particular types or
items of Collateral pursuant to this Section 10.16. Except as provided
in the preceding sentence, the Agent will not release any Liens on
Collateral without the prior written authorization of the Required
Lenders; provided that, the Agent may in its discretion, release its
Liens on Collateral valued in the aggregate not in excess of $1,000,000
during any calendar year without the prior written authorization of the
Lenders.
(b) Upon receipt by the Agent of any authorization required
pursuant to Section 10.16(a) from the Required Lenders of the Agent's
authority to release any Liens upon particular types or items of
Collateral, and upon at least five Business Days prior written request
by the Loan Parties, the Agent shall (and is hereby irrevocably
authorized by the Lenders to) execute such documents as may be
necessary to evidence the release of its Liens upon such Collateral;
provided that, (i) the Agent shall not be required to execute any such
document on terms which, in the Agent's opinion, would expose the Agent
to liability or create any obligation or entail any consequence other
than the release of such Liens without recourse or warranty and (ii)
such release shall not in any manner discharge, affect, or impair the
Obligations or any Liens (other than those expressly being released)
upon (or obligations of the Loan Parties in respect of) all interests
retained by the Loan Parties, including the proceeds of any sale, all
of which shall continue to constitute part of the Collateral.
(c) The Agent shall have no obligation whatsoever to any of
the Lenders to assure that the Collateral exists or is owned by the
Loan Parties or is cared for, protected, or insured or has been
encumbered, or that the Liens granted to the Agent therein have been
properly or sufficiently or lawfully created, perfected, protected, or
enforced or are entitled to any particular
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priority, or to exercise at all or in any particular manner or under
any duty of care, disclosure, or fidelity, or to continue exercising,
any of the rights, authorities, and powers granted or available to the
Agent pursuant to any of the Loan Documents, it being understood and
agreed that in respect of the Collateral, or any act, omission, or
event related thereto, the Agent may act in any manner it may deem
appropriate, in its sole discretion given the Agent's own interest in
the Collateral in its capacity as one of the Lenders and that the Agent
shall have no other duty or liability whatsoever to any Lender as to
any of the foregoing.
(d) Each Lender hereby appoints each other Lender as its agent
for the purpose of perfecting Liens, for the benefit of the Agent and
the Lenders, in assets which, in accordance with Article 9 of the UCC
or any other applicable law can be perfected only by possession. Should
any Lender (other than the Agent) obtain possession of any such
Collateral, such Lender shall notify the Agent thereof, and, promptly
upon the Agent's request therefor shall deliver such Collateral to the
Agent or otherwise deal with such Collateral in accordance with the
Agent's instructions.
(e) Each Lender hereby agrees as follows: (a) such Lender is
deemed to have requested that the Agent furnish such Lender, promptly
after it becomes available, a copy of each Report prepared by or on
behalf of the Agent; (b) such Lender expressly agrees and acknowledges
that neither Bank One nor the Agent (i) makes any representation or
warranty, express or implied, as to the completeness or accuracy of any
Report or any of the information contained therein, or (ii) shall be
liable for any information contained in any Report; (c) such Lender
expressly agrees and acknowledges that the Reports are not
comprehensive audits or examinations, that the Agent, Bank One, or any
other party performing any audit or examination will inspect only
specific information regarding the Loan Parties and will rely
significantly upon the Loan Parties' books and records, as well as on
representations of the Loan Parties' personnel and that Bank One
undertakes no obligation to update, correct or supplement the Reports;
(d) such Lender agrees to keep all Reports confidential and strictly
for its internal use, not share the Report with any Loan Party and not
to distribute any Report to any other Person except as otherwise
permitted pursuant to this Agreement; and (e) without limiting the
generality of any other indemnification provision contained in this
Agreement, such Lender agrees (i) that neither Bank One nor the Agent
shall be liable to you or any other Person receiving a copy of the
Report for any inaccuracy or omission contained in or relating to a
Report, (ii) to conduct its own due diligence investigation and make
credit decisions with respect to the Loan Parties based on such
documents as such Lender deems appropriate without any reliance on the
Reports or on the Agent or Bank One, (iii) to hold the Agent and any
such other Person preparing a Report harmless from any action the
indemnifying Lender may take or conclusion the indemnifying Lender may
reach or draw from any Report in connection with any Credit Extensions
that the indemnifying Lender has made or may make to the Loan Parties,
or the indemnifying Lender's participation in, or the indemnifying
Lender's purchase of, any Obligations and (iv) to pay and protect, and
indemnify, defend, and hold the Agent and any such other Person
preparing a Report harmless from and against, the claims, actions,
proceedings, damages, costs, expenses, and other amounts (including
reasonable attorney fees) incurred by the Agent and any such other
Person preparing a Report as the direct or indirect result of any third
parties who might obtain all or part of any Report through the
indemnifying Lender.
10.17. Co-Agents, Documentation Agent, Syndication Agent, etc. Neither
any of the Lenders identified in this Agreement as a "co-agent" nor the
Documentation Agent or the Syndication Agent shall have any right, power,
obligation, liability, responsibility or duty under this Agreement other than
those applicable to all Lenders as such. Without limiting the foregoing, none of
such Lenders shall have or be deemed to have a fiduciary relationship with any
Lender. Each Lender hereby makes the same acknowledgments with respect to such
Lenders as it makes with respect to the Agent in Section 10.11.
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ARTICLE XI
SETOFF; RATABLE PAYMENTS
11.1. Setoff. In addition to, and without limitation of, any rights of
the Lenders under applicable law, if any Loan Party becomes insolvent, however
evidenced, or any Default occurs, any and all deposits (including all account
balances, whether provisional or final and whether or not collected or
available) and any other Indebtedness at any time held or owing by any Lender or
any Affiliate of any Lender to or for the credit or account of any Loan Party
may be offset and applied toward the payment of the Secured Obligations owing to
such Lender, whether or not the Secured Obligations, or any part thereof, shall
then be due. Notwithstanding the foregoing, no Lender shall exercise any right
of setoff, banker's lien, or the like against any deposit account or Property of
any Loan Party held or maintained by such Lender without the prior written
consent of the Required Lenders.
11.2. Ratable Payments. If any Lender, whether by setoff or otherwise,
has payment made to it upon its Credit Exposure (other than payments received
pursuant to Section 3.1, 3.2, 3.4 or 3.5) in a greater proportion than that
received by any other Lender, such Lender agrees, promptly upon demand, to
purchase a portion of the Aggregate Credit Exposure held by the other Lenders so
that after such purchase each Lender will hold its Pro Rata Share of the
Aggregate Credit Exposure. If any Lender, whether in connection with setoff or
amounts which might be subject to setoff or otherwise, receives collateral or
other protection for its Secured Obligations or such amounts which may be
subject to setoff, such Lender agrees, promptly upon demand, to take such action
necessary such that all Lenders share in the benefits of such collateral ratably
in proportion to respective Pro Rata Share of the Aggregate Credit Exposure. In
case any such payment is disturbed by legal process, or otherwise, appropriate
further adjustments shall be made.
ARTICLE XII
BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS
12.1. Successors and Assigns. The terms and provisions of the Loan
Documents shall be binding upon and inure to the benefit of the Loan Parties and
the Lenders and their respective successors and assigns permitted hereby, except
that (a) the Loan Parties shall not have the right to assign its rights or
obligations under the Loan Documents without the prior written consent of each
Lender, (b) any assignment by any Lender must be made in compliance with Section
12.3, and (c) any transfer by Participation must be made in compliance with
Section 12.2. Any attempted assignment or transfer by any party not made in
compliance with this Section 12.1 shall be null and void, unless such attempted
assignment or transfer is treated as a participation in accordance with
Section 12.3. The parties to this Agreement acknowledge that clause (b) of this
Section 12.1 relates only to absolute assignments and this Section 12.1 does not
prohibit assignments creating security interests, including, without limitation,
(x) any pledge or assignment by any Lender of all or any portion of its rights
under this Agreement and any Note to a Federal Reserve Bank or (y) in the case
of a Lender which is a Fund, any pledge or assignment of all or any portion of
its rights under this Agreement and any Note to its trustee in support of its
obligations to its trustee; provided however, that no such pledge or assignment
creating a security interest shall release the transferor Lender from its
obligations hereunder unless and until the parties thereto have
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complied with the provisions of Section 12.3. The Agent may treat the Person
which made any Credit Extension or which holds any Note as the owner thereof for
all purposes hereof unless and until such Person complies with Section 12.3;
provided however,, that the Agent may in its discretion (but shall not be
required to) follow instructions from the Person which made any Credit Extension
or which holds any Note to direct payments relating to such Credit Extension or
Note to another Person. Any assignee of the rights to any Credit Extension or
any Note agrees by acceptance of such assignment to be bound by all the terms
and provisions of the Loan Documents. Any request, authority or consent of any
Person, who at the time of making such request or giving such authority or
consent is the owner of the rights to any Credit Extension (whether or not a
Note has been issued in evidence thereof), shall be conclusive and binding on
any subsequent holder or assignee of the rights to such Credit Extension.
12.2. Participations.
(a) Permitted Participants; Effect. Any Lender may at any time
sell to one or more banks or other entities ("Participants")
participating interests in any Credit Exposure of such Lender, any Note
held by such Lender, any Commitment of such Lender or any other
interest of such Lender under the Loan Documents. In the event of any
such sale by a Lender of participating interests to a Participant, such
Lender's obligations under the Loan Documents shall remain unchanged,
such Lender shall remain solely responsible to the other parties hereto
for the performance of such obligations, such Lender shall remain the
owner of its Credit Exposure and the holder of any Note issued to it in
evidence thereof for all purposes under the Loan Documents, all amounts
payable by the Loan Parties under this Agreement shall be determined as
if such Lender had not sold such participating interests, and the Loan
Parties and the Agent shall continue to deal solely and directly with
such Lender in connection with such Lender's rights and obligations
under the Loan Documents.
(b) Voting Rights. Each Lender shall retain the sole right to
approve, without the consent of any Participant, any amendment,
modification or waiver of any provision of the Loan Documents other
than any amendment, modification or waiver with respect to any Credit
Extension or Commitment in which such Participant has an interest which
would require consent of all of the Lenders pursuant to the terms of
Section 8.3 or of any other Loan Document.
(c) Benefit of Certain Provisions. Each Loan Party agrees that
each Participant shall be deemed to have the right of setoff provided
in Section 11.1 in respect of its participating interest in amounts
owing under the Loan Documents to the same extent as if the amount of
its participating interest were owing directly to it as a Lender under
the Loan Documents, provided that, each Lender shall retain the right
of setoff provided in Section 11.1 with respect to the amount of
participating interests sold to each Participant. The Lenders agree to
share with each Participant, and each Participant, by exercising the
right of setoff provided in Section 11.1, agrees to share with each
Lender, any amount received pursuant to the exercise of its right of
setoff, such amounts to be shared in accordance with Section 11.2 as if
each Participant were a Lender. Each Loan Party further agrees that
each Participant shall be entitled to the benefits of Sections 3.1,
3.2, 3.4 and 3.5 to the same extent as if it were a Lender and had
acquired its interest by assignment pursuant to Section 12.3, provided
that, (i) a Participant shall not be entitled to receive any greater
payment under Section 3.1, 3.2 or 3.5 than the Lender who sold the
participating interest to such Participant would have received had it
retained such interest for its own account, unless the sale of such
interest to such Participant is made with the prior written consent of
the Company, and (ii) any Participant not incorporated under the laws
of the U.S. or any state thereof agrees to comply with the provisions
of Section 3.5 to the same extent as if it were a Lender.
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12.3. Assignments.
(a) Permitted Assignments. Any Lender may at any time assign
to one or more banks or other entities ("Purchasers") all or any part
of its rights and obligations under the Loan Documents. Such assignment
shall be substantially in the form of Exhibit F (an "Assignment
Agreement"). Each such assignment with respect to a Purchaser which is
not a Lender or an Affiliate of a Lender or an Approved Fund shall
either be in an amount equal to the entire applicable Commitment and
Credit Extensions of the assigning Lender or (unless each of the
Company and the Agent otherwise consents) be in an aggregate amount not
less than $5,000,000. The amount of the assignment shall be based on
the Commitment or outstanding Credit Extensions (if the Commitment has
been terminated) subject to the assignment, determined as of the date
of such assignment or as of the "Trade Date," if the "Trade Date" is
specified in the assignment.
(b) Consents. The consent of the Company shall be required
prior to an assignment becoming effective unless the Purchaser is a
Lender, an Affiliate of a Lender or an Approved Fund, provided that,
the consent of the Company shall not be required if a Default has
occurred and is continuing. The consent of the Agent shall be required
prior to an assignment becoming effective unless the Purchaser is a
Lender. The consent of the LC Issuer shall be required prior to an
assignment of a Commitment becoming effective unless the Purchaser is a
Lender with a Commitment. Any consent required under this Section
12.3(b) shall not be unreasonably withheld or delayed.
(c) Effect; Closing Date. Upon (i) delivery to the Agent of a
duly executed Assignment Agreement, together with any consents required
by Sections 12.3(a) and 12.3(b), and (ii) payment of a $3,500 fee to
the Agent for processing such assignment (unless such fee is waived by
the Agent), such Assignment Agreement shall become effective on the
effective date specified by the Agent in such Assignment Agreement. The
Assignment Agreement shall contain a representation by the Purchaser to
the effect that none of the consideration used to make the purchase of
the Commitment and Credit Exposure under the applicable Assignment
Agreement constitutes "plan assets" as defined under ERISA and that the
rights and interests of the Purchaser in and under the Loan Documents
will not be "plan assets" under ERISA. On and after the effective date
of such Assignment Agreement, such Purchaser shall for all purposes be
a Lender party to this Agreement and any other Loan Document executed
by or on behalf of the Lenders and shall have all the rights and
obligations of a Lender under the Loan Documents, to the same extent as
if it were an original party thereto, and the transferor Lender shall
be released with respect to the Commitment and Credit Exposure assigned
to such Purchaser without any further consent or action by the Company,
the Lenders or the Agent. In the case of an Assignment Agreement
covering all of the assigning Lender's rights and obligations under
this Agreement, such Lender shall cease to be a Lender hereunder but
shall continue to be entitled to the benefits of, and subject to, those
provisions of this Agreement and the other Loan Documents which survive
payment of the Obligations and termination of the applicable agreement.
Any assignment or transfer by a Lender of rights or obligations under
this Agreement that does not comply with this Section 12.3 shall be
treated for purposes of this Agreement as a sale by such Lender of a
participation in such rights and obligations in accordance with Section
12.2. Upon the consummation of any assignment to a Purchaser pursuant
to this Section 12.3(c), the transferor Lender, the Agent and the
Company shall, if the transferor Lender or the Purchaser desires that
its Loans be evidenced by Notes, make appropriate arrangements so that
new Notes or, as appropriate, replacement Notes are issued to such
transferor Lender and new Notes or, as appropriate, replacement Notes,
are issued to such Purchaser, in each case in principal amounts
reflecting their respective Commitments, as adjusted pursuant to such
assignment.
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(d) Register. The Agent, acting solely for this purpose as an
agent of the Company, shall maintain at one of its offices in the U.S.
a copy of each Assignment Agreement delivered to it and a register for
the recordation of the names and addresses of the Lenders, and the
Commitments of, and principal amounts of the Credit Extensions owing
to, each Lender pursuant to the terms hereof from time to time (the
"Register"). The entries in the Register shall be conclusive, and the
Company, the Agent and the Lenders may treat each Person whose name is
recorded in the Register pursuant to the terms hereof as a Lender
hereunder for all purposes of this Agreement, notwithstanding notice to
the contrary. The Register shall be available for inspection by the
Company and any Lender, at any reasonable time and from time to time
upon reasonable prior notice.
12.4. Dissemination of Information. Each Loan Party authorizes each
Lender to disclose to any Participant or Purchaser or any other Person acquiring
an interest in the Loan Documents by operation of law (each a "Transferee") and
any prospective Transferee any and all information in such Lender's possession
concerning the creditworthiness of the Company and its Subsidiaries, including
without limitation any information contained in any Reports; provided that, each
Transferee and prospective Transferee agrees to be bound by Section 9.11 of this
Agreement.
12.5. Tax Treatment. If any interest in any Loan Document is
transferred to any Transferee which is not incorporated under the laws of the
U.S. or any state thereof, the transferor Lender shall cause such Transferee,
concurrently with the effectiveness of such transfer, to comply with the
provisions of Section 3.5(d).
12.6. Assignment by LC Issuer. Notwithstanding anything contained
herein, if at any time Bank One assigns all of its Commitment and Revolving
Loans pursuant to Section 12.3, Bank One may, upon thirty days' notice to the
Company and the Lenders, resign as LC Issuer. In the event of any such
resignation as LC Issuer, the Company shall be entitled to appoint from among
the Lenders a successor LC Issuer hereunder; provided however, that no failure
by the Company to appoint any such successor shall affect the resignation of
Bank One as LC Issuer. If Bank One resigns as LC Issuer, it shall retain all the
rights and obligations of the LC Issuer hereunder with respect to the Facility
LCs outstanding as of the effective date of its resignation as LC Issuer and all
LC Obligations with respect thereto (including the right to require the Lenders
to make Revolving Loans or fund risk participations in outstanding Reimbursement
Obligations pursuant to Section 2.1.2(d)).
ARTICLE XIII
NOTICES
13.1. Notices; Effectiveness; Electronic Communication.
(a) Notices Generally. Except in the case of notices and other
communications expressly permitted to be given by telephone (and except
as provided in paragraph (b) below), all notices and other
communications provided for herein shall be in writing and shall be
delivered by hand or overnight courier service, mailed by certified or
registered mail or sent by telecopier as follows:
(i) if to any Loan Party, at its address or
telecopier number set forth on the signature page
hereof;
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(ii) if to the Agent, at its address or telecopier
number set forth on the signature page hereof;
(iii) if to the LC Issuer, at its address or
telecopier number set forth on the signature page
hereof;
(iv) if to a Lender, to it at its address or
telecopier number set forth in its Administrative
Questionnaire.
Notices sent by hand or overnight courier service, or mailed
by certified or registered mail, shall be deemed to have been given
when received; notices sent by telecopier shall be deemed to have been
given when sent (except that, if not given during normal business hours
for the recipient, shall be deemed to have been given at the opening of
business on the next Business Day for the recipient). Notices delivered
through electronic communications to the extent provided in paragraph
(b) below, shall be effective as provided in said paragraph (b).
(b) Electronic Communications. Notices and other
communications to the Lenders and the LC Issuer hereunder may be
delivered or furnished by electronic communication (including e-mail
and internet or intranet websites) pursuant to procedures approved by
the Agent or as otherwise determined by the Agent, provided that, the
foregoing shall not apply to notices to any Lender or the LC Issuer
pursuant to Article II if such Lender or the LC Issuer, as applicable,
has notified the Agent that it is incapable of receiving notices under
such Article by electronic communication. The Agent or any Loan Party
may, in its respective discretion, agree to accept notices and other
communications to it hereunder by electronic communications pursuant to
procedures approved by it or as it otherwise determines, provided that
such determination or approval may be limited to particular notices or
communications.
Unless the Agent otherwise prescribes, (i) notices and other
communications sent to an e-mail address shall be deemed received upon
the sender's receipt of an acknowledgement from the intended recipient
(such as by the "return receipt requested" function, as available,
return e-mail or other written acknowledgement), provided that if such
notice or other communication is not given during the normal business
hours of the recipient, such notice or communication shall be deemed to
have been given at the opening of business on the next Business Day for
the recipient, and (ii) notices or communications posted to an Internet
or intranet website shall be deemed received upon the deemed receipt by
the intended recipient at its e-mail address as described in the
foregoing clause (i) of notification that such notice or communication
is available and identifying the website address therefor.
13.2. Change of Address, Etc. Any party hereto may change its address
or telecopier number for notices and other communications hereunder by notice to
the other parties hereto.
ARTICLE XIV
COUNTERPARTS
This Agreement may be executed in any number of counterparts, all of
which taken together shall constitute one agreement, and any of the parties
hereto may execute this Agreement by signing any such counterpart. This
Agreement shall be effective when it has been executed by the Loan Parties, the
Agent, the LC Issuer and the Lenders and each party has notified the Agent by
facsimile transmission or telephone that it has taken such action.
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ARTICLE XV
GUARANTY
15.1. Guaranty. Each Guarantor (with respect to the Secured Obligations
for which it is a Guarantor as described in the definition of Guarantor in
Article I) hereby agrees that it is jointly and severally liable for, and, as
primary obligor and not merely as surety, absolutely and unconditionally
guarantees to the Lenders the prompt payment when due, whether at stated
maturity, upon acceleration or otherwise, and at all times thereafter, of the
Secured Obligations and all costs and expenses including, without limitation,
all court costs and attorneys' and paralegals' fees (including allocated costs
of in-house counsel and paralegals) and expenses paid or incurred by the Agent,
the LC Issuer and the Lenders in endeavoring to collect all or any part of the
Secured Obligations from, or in prosecuting any action against, any Borrower,
any Guarantor or any other guarantor of all or any part of the Obligations (such
costs and expenses, together with the Secured Obligations, collectively the
"Guaranteed Obligations"). Each Guarantor further agrees that the Guaranteed
Obligations may be extended or renewed in whole or in part without notice to or
further assent from it, and that it remains bound upon its guarantee
notwithstanding any such extension or renewal.
15.2. Guaranty of Payment. This Guaranty is a guaranty of payment and
not of collection. Each Guarantor waives any right to require the Agent, the LC
Issuer or any Lender to xxx any Borrower, any Guarantor, any other guarantor, or
any other person obligated for all or any part of the Guaranteed Obligations, or
otherwise to enforce its payment against any collateral securing all or any part
of the Guaranteed Obligations.
15.3. No Discharge or Diminishment of Guaranty.
(f) Except as otherwise provided for herein and to the extent
provided for herein, the obligations of each Guarantor hereunder are
unconditional and absolute and not subject to any reduction,
limitation, impairment or termination for any reason (other than the
indefeasible payment in full in cash of the Guaranteed Obligations),
including:
(i) any claim of waiver, release, extension, renewal,
settlement, surrender, alteration, or compromise of any of the
Guaranteed Obligations, by operation of law or otherwise;
(ii) any change in the corporate existence, structure
or ownership of any Borrower, any Guarantor or any other
guarantor of or other person liable for any of the Guaranteed
Obligations;
(iii) any insolvency, bankruptcy, reorganization or
other similar proceeding affecting any Borrower, any
Guarantor, or any other guarantor of or other person liable
for any of the Guaranteed Obligations, or their assets or any
resulting release or discharge of any obligation of any
Borrower, any Guarantor, or any other guarantor of or other
person liable for any of the Guaranteed Obligations; or
(iv) the existence of any claim, setoff or other
rights which any Guarantor may have at any time against any
Borrower, any Guarantor, any other guarantor of the Guaranteed
Obligations, the Agent, the LC Issuer, any Lender, or any
other person, whether in connection herewith or in any
unrelated transactions.
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(g) The obligations of each Guarantor hereunder are not
subject to any defense or setoff, counterclaim, recoupment, or
termination whatsoever by reason of the invalidity, illegality, or
unenforceability of any of the Guaranteed Obligations or otherwise, or
any provision of applicable law or regulation purporting to prohibit
payment by any Borrower, any Guarantor or any other guarantor of or
other person liable for any of the Guaranteed Obligations, of the
Guaranteed Obligations or any part thereof.
(h) Further, the obligations of any Guarantor hereunder
are not discharged or impaired or otherwise affected by:
(i) the failure of the Agent, the LC Issuer or any
Lender to assert any claim or demand or to enforce any remedy
with respect to all or any part of the Guaranteed Obligations;
(ii) any waiver or modification of or supplement to
any provision of any agreement relating to the Guaranteed
Obligations;
(iii) any release, non-perfection, or invalidity of
any indirect or direct security for the obligations of any
Borrower or Guarantor for all or any part of the Guaranteed
Obligations or any obligations of any other guarantor of or
other person liable for any of the Guaranteed Obligations;
(iv) any action or failure to act by the Agent, the
LC Issuer or any Lender with respect to any collateral
securing any part of the Guaranteed Obligations;
(v) any default, failure or delay, willful or
otherwise, in the payment or performance of any of the
Guaranteed Obligations, or any other circumstance, act,
omission or delay that might in any manner or to any extent
vary the risk of such Guarantor or that would otherwise
operate as a discharge of any Guarantor as a matter of law or
equity (other than the indefeasible payment in full in cash of
the Guaranteed Obligations).
15.4. Defenses Waived. To the fullest extent permitted by applicable
law, each Guarantor hereby waives any defense based on or arising out of any
defense of any Borrower or any Guarantor or the unenforceability of all or any
part of the Guaranteed Obligations from any cause, or the cessation from any
cause of the liability of any Borrower or any Guarantor, other than the
indefeasible payment in full in cash of the Guaranteed Obligations. Without
limiting the generality of the foregoing, each Guarantor irrevocably waives
acceptance hereof, presentment, demand, protest and, to the fullest extent
permitted by law, any notice not provided for herein, as well as any requirement
that at any time any action be taken by any person against any Borrower, any
Guarantor, any other guarantor of any of the Guaranteed Obligations, or any
other person. The Agent may, at its election, foreclose on any Collateral held
by it by one or more judicial or nonjudicial sales, accept an assignment of any
such Collateral in lieu of foreclosure or otherwise act or fail to act with
respect to any collateral securing all or a part of the Guaranteed Obligations,
compromise or adjust any part of the Guaranteed Obligations, make any other
accommodation with any Borrower, any Guarantor, any other guarantor or any other
person liable on any part of the Guaranteed Obligations or exercise any other
right or remedy available to it against any Borrower, any Guarantor, any other
guarantor or any other person liable on any of the Guaranteed Obligations,
without affecting or impairing in any way the liability of such Guarantor under
this Guaranty except to the extent the Guaranteed Obligations have been fully
and indefeasibly paid in cash. To the fullest extent permitted by applicable
law, each Guarantor waives any defense arising out of any such election even
though that election may operate, pursuant to applicable law, to impair or
extinguish any right of reimbursement or subrogation or other right or remedy of
any Guarantor
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against any Borrower, any other guarantor or any other person liable on any of
the Guaranteed Obligations, as the case may be, or any security.
15.5. Rights of Subrogation. No Guarantor will assert any right, claim
or cause of action, including, without limitation, a claim of subrogation,
contribution or indemnification that it has against any Borrower, any Guarantor,
any person liable on the Guaranteed Obligations, or any collateral, until the
Loan Parties and the Guarantors have fully performed all their obligations to
the Agent, the LC Issuer and the Lender.
15.6. Reinstatement; Stay of Acceleration. If at any time any payment
of any portion of the Guaranteed Obligations is rescinded or must otherwise be
restored or returned upon the insolvency, bankruptcy, or reorganization of any
Borrower or otherwise, each Guarantor's obligations under this Guaranty with
respect to that payment shall be reinstated at such time as though the payment
had not been made and whether or not the Agent, the LC Issuer and the Lenders
are in possession of this Guaranty. If acceleration of the time for payment of
any of the Guaranteed Obligations is stayed upon the insolvency, bankruptcy or
reorganization of any Borrower, all such amounts otherwise subject to
acceleration under the terms of any agreement relating to the Guaranteed
Obligations shall nonetheless be payable by the Guarantors forthwith on demand
by the Lender.
15.7. Information. Each Guarantor assumes all responsibility for being
and keeping itself informed of each Borrower's financial condition and assets,
and of all other circumstances bearing upon the risk of nonpayment of the
Guaranteed Obligations and the nature, scope and extent of the risks that each
Guarantor assumes and incurs under this Guaranty, and agrees that neither the
Agent, the LC Issuer nor any Lender shall have any duty to advise any Guarantor
of information known to it regarding those circumstances or risks.
15.8. Termination. The Lenders may continue to make loans or extend
credit to the Borrowers based on this Guaranty until five days after it receives
written notice of termination from any Guarantor. Notwithstanding receipt of any
such notice, each Guarantor will continue to be liable to the Lender for any
Guaranteed Obligations created, assumed or committed to prior to the fifth day
after receipt of the notice, and all subsequent renewals, extensions,
modifications and amendments with respect to, or substitutions for, all or any
part of that Guaranteed Obligations.
15.9. Taxes. All payments of the Guaranteed Obligations will be made
by each Guarantor free and clear of and without deduction for or on account of
any and all present or future taxes, levies, imposts, duties, charges,
deductions or withholdings of whatever nature imposed by any governmental
authority with respect to such payments, and any and all liabilities with
respect to the foregoing, but excluding franchise taxes and taxes imposed on
overall net income of the Lender by the U.S. or the jurisdiction in which the
Lender's applicable Lending Installation is located (collectively, "Taxes"). If
any Guarantor is required by law to deduct any Taxes from or in respect of any
sum payable to the Lenders under this Guaranty, (a) the sum payable must be
increased as necessary so that after making all required deductions (including
deductions applicable to additional sums payable under this provision) the
Lenders receive an amount equal to the sum it would have received had no such
deductions been made, (b) the Guarantors must then make such deductions, and
must pay the full amount deducted to the relevant authority in accordance with
applicable law, and (c) the Guarantors must furnish to the Lender within
forty-five days after their due date certified copies of all official receipts
evidencing payment thereof.
15.10. Severability. The provisions of this Guaranty are severable,
and in any action or proceeding involving any state corporate law, or any state,
federal or foreign bankruptcy, insolvency, reorganization or other law affecting
the rights of creditors generally, if the obligations of any Guarantor under
this Guaranty would otherwise be held or determined to be avoidable, invalid or
unenforceable on
101
account of the amount of such Guarantor's liability under this Guaranty, then,
notwithstanding any other provision of this Guaranty to the contrary, the amount
of such liability shall, without any further action by the Guarantors or the
Lenders, be automatically limited and reduced to the highest amount that is
valid and enforceable as determined in such action or proceeding (such highest
amount determined hereunder being the relevant Guarantor's "Maximum Liability".
This Section with respect to the Maximum Liability of each Guarantor is intended
solely to preserve the rights of the Lenders to the maximum extent not subject
to avoidance under applicable law, and no Guarantor nor any other person or
entity shall have any right or claim under this Section with respect to such
Maximum Liability, except to the extent necessary so that the obligations of any
Guarantor hereunder shall not be rendered voidable under applicable law. Each
Guarantor agrees that the Guaranteed Obligations may at any time and from time
to time exceed the Maximum Liability of each Guarantor without impairing this
Guaranty or affecting the rights and remedies of the Lenders hereunder, provided
that, nothing in this sentence shall be construed to increase any Guarantor's
obligations hereunder beyond its Maximum Liability.
15.11. Contribution. In the event any Guarantor (a "Paying Guarantor")
shall make any payment or payments under this Guaranty or shall suffer any loss
as a result of any realization upon any collateral granted by it to secure its
obligations under this Guaranty, each other Guarantor (each a "Non-Paying
Guarantor") shall contribute to such Paying Guarantor an amount equal to such
Non-Paying Guarantor's "Pro Rata Share" of such payment or payments made, or
losses suffered, by such Paying Guarantor. For purposes of this Article XV, each
Non-Paying Guarantor's "Pro Rata Share" with respect to any such payment or loss
by a Paying Guarantor shall be determined as of the date on which such payment
or loss was made by reference to the ratio of (i) such Non-Paying Guarantor's
Maximum Liability as of such date (without giving effect to any right to
receive, or obligation to make, any contribution hereunder) or, if such
Non-Paying Guarantor's Maximum Liability has not been determined, the aggregate
amount of all monies received by such Non-Paying Guarantor from the Borrowers
after the date hereof (whether by loan, capital infusion or by other means) to
(ii) the aggregate Maximum Liability of all Guarantors hereunder (including such
Paying Guarantor) as of such date (without giving effect to any right to
receive, or obligation to make, any contribution hereunder), or to the extent
that a Maximum Liability has not been determined for any Guarantor, the
aggregate amount of all monies received by such Guarantors from the Borrowers
after the date hereof (whether by loan, capital infusion or by other means).
Nothing in this provision shall affect any Guarantor's several liability for the
entire amount of the Guaranteed Obligations (up to such Guarantor's Maximum
Liability). Each of the Guarantors covenants and agrees that its right to
receive any contribution under this Guaranty from a Non-Paying Guarantor shall
be subordinate and junior in right of payment to the payment in full in cash of
the Guaranteed Obligations. This provision is for the benefit of both the Agent,
the LC Issuer, the Lenders and the Guarantors and may be enforced by any one, or
more, or all of them in accordance with the terms hereof.
15.12. Lending Installations. The Guaranteed Obligations may be booked
at any Lending Installation. All terms of this Guaranty apply to and may be
enforced by or on behalf of any Lending Installation.
15.13 Liability Cumulative. The liability of each Loan Party as a
Guarantor under this Article XV is in addition to and shall be cumulative with
all liabilities of each Loan Party to the Agent, the LC Issuer and the Lenders
under this Agreement and the other Loan Documents to which such Loan Party is a
party or in respect of any obligations of liabilities of the other Loan Parties,
without any limitation as to amount, unless the instrument or agreement
evidencing or creating such other liability specifically provides to the
contrary.
102
ARTICLE XVI
CHOICE OF LAW; CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL TRIAL
16.1. CHOICE OF LAW. THE LOAN DOCUMENTS OTHER THAN THOSE CONTAINING
A CONTRARY EXPRESS CHOICE OF LAW PROVISION) SHALL BE CONSTRUED IN ACCORDANCE
WITH THE INTERNAL LAWS (WITHOUT REGARD TO THE CONFLICT OF LAWS PROVISIONS) OF
THE STATE OF MICHIGAN, BUT GIVING EFFECT TO FEDERAL LAWS APPLICABLE TO NATIONAL
BANKS.
16.2. CONSENT TO JURISDICTION. EACH LOAN PARTY HEREBY IRREVOCABLY
SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY U.S. FEDERAL OR MICHIGAN STATE
COURT SITTING IN DETROIT, MICHIGAN IN ANY ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO ANY LOAN DOCUMENTS AND EACH LOAN PARTY HEREBY IRREVOCABLY AGREES
THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND
DETERMINED IN ANY SUCH COURT AND IRREVOCABLY WAIVES ANY OBJECTION IT MAY NOW OR
HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN
SUCH A COURT OR THAT SUCH COURT IS AN INCONVENIENT FORUM. NOTHING HEREIN SHALL
LIMIT THE RIGHT OF THE AGENT, THE LC ISSUER OR ANY LENDER TO BRING PROCEEDINGS
AGAINST ANY AGENT, THE LC ISSUER OR ANY LENDER TO BRING PROCEEDINGS AGAINST ANY
LOAN PARTY IN THE COURTS OF ANY OTHER JURISDICTION. ANY JUDICIAL PROCEEDING BY
ANY LOAN PARTY AGAINST THE AGENT, THE LC ISSUER OR ANY LENDER INVOLVING,
DIRECTLY OR INDIRECTLY, ANY MATTER IN ANY WAY ARISING OUT OF, RELATED TO, OR
CONNECTION WITH ANY LOAN DOCUMENT SHALL BE BROUGHT ONLY IN A COURT IN DETROIT,
MICHIGAN.
16.3. WAIVER OF JURY TRIAL. EACH LOAN PARTY, THE AGENT, THE LC ISSUER
AND EACH LENDER HEREBY WAIVE JURY TRIAL BY JURY IN ANY JUDICIAL PROCEEDING
INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN TORT,
CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH
ANY LOAN DOCUMENT OR THE RELATIONSHIP ESTABLISHED THEREUNDER.
[Signature Pages Follow]
103
IN WITNESS WHEREOF, the Loan Parties, the Lenders, the LC Issuer and
the Agent have executed this Agreement as of the date first above written.
COMPANY:
MSX INTERNATIONAL, INC.
By: /s/ Xxxxxxxxx Xxxxxxx
Name: Xxxxxxxxx X. Xxxxxxx
------------------------------
Title: Vice President
FOREIGN SUBSIDIARY BORROWERS:
MSX INTERNATIONAL NETHERLANDS
B.V.
By: /s/ Xxxxxxxxx Xxxxxxx
Name: Xxxxxxxxx X. Xxxxxxx
------------------------------
Title: Director
MSX INTERNATIONAL LIMITED
By: /s/ Xxxxxxxxx Xxxxxxx
Name: Xxxxxxxxx X. Xxxxxxx
------------------------------
Title: Director
MSX INTERNATIONAL AUSTRALIA PTY
LIMITED
By: /s/ Xxxxxxxxx Xxxxxxx
Name: Xxxxxxxxx X. Xxxxxxx
------------------------------
Title: Director
OTHER LOAN PARTIES:
MSX INTERNATIONAL HOLDINGS
LIMITED
By: /s/ Xxxxxxxxx X. Xxxxxxx
Name: Xxxxxxxxx X. Xxxxxxx
------------------------------
Title: Director
MSX INTERNATIONAL SERVICES
(HOLDINGS), INC.
By: /s/ Xxxxxxxxx Xxxxxxx
Name: Xxxxxxxxx X. Xxxxxxx
------------------------------
Title: Vice President
104
MSX INTERNATIONAL BUSINESS
SERVICES, INC.
By: /s/ Xxxxxxxxx X. Xxxxxxx
Name: Xxxxxxxxx X. Xxxxxxx
------------------------------
Title: Vice President
MSX INTERNATIONAL ENGINEERING
SERVICES, INC.
By: /s/ Xxxxxxxxx X. Xxxxxxx
Name: Xxxxxxxxx X. Xxxxxxx
------------------------------
Title: Vice President
MEGATECH ENGINEERING, INC.
By: /s/ Xxxxxxxxx X. Xxxxxxx
Name: Xxxxxxxxx X. Xxxxxxx
------------------------------
Title: Vice President
CHELSEA COMPUTER CONSULTANTS,
INC.
By: /s/ Xxxxxxxxx X. Xxxxxxx
Name: Xxxxxxxxx X. Xxxxxxx
------------------------------
Title: Vice President
MANAGEMENT RESOURCES
INTERNATIONAL, INC.
By: /s/ Xxxxxxxxx X. Xxxxxxx
Name: Xxxxxxxxx X. Xxxxxxx
------------------------------
Title: Vice President
INTRANATIONAL COMPUTER
CONSULTANTS
By: /s/ Xxxxxxxxx X. Xxxxxxx
Name: Xxxxxxxxx X. Xxxxxxx
------------------------------
Title: Vice President
MSX INTERNATIONAL STRATEGIC
TECHNOLOGY, INC.
By: /s/ Xxxxxxxxx X. Xxxxxxx
Name: Xxxxxxxxx X. Xxxxxxx
------------------------------
Title: Vice President
105
MSX INTERNATIONAL DEALERNET
SERVICES, INC.
By: /s/ Xxxxxxxxx X. Xxxxxxx
Name: Xxxxxxxxx X. Xxxxxxx
------------------------------
Title: Vice President
MSX INTERNATIONAL NETHERLANDS
(HOLDINGS), C.V.
By: /s/ Xxxxxxxxx X. Xxxxxxx
Name: Xxxxxxxxx X. Xxxxxxx
------------------------------
Title: Representative of the Partners
MSX INTERNATIONAL EUROPEAN
(HOLDINGS), L.L.C.
By: /s/ Xxxxxxxxx X. Xxxxxxx
Name: Xxxxxxxxx X. Xxxxxxx
------------------------------
Title: Vice President
CREATIVE TECHNOLOGY SERVICES,
L.L.C.
By: /s/ Xxxxxxxxx X. Xxxxxxx
Name: Xxxxxxxxx X. Xxxxxxx
------------------------------
Title: Vice President
PILOT COMPUTER SERVICES,
INCORPORATED
By: /s/ Xxxxxxxxx X. Xxxxxxx
Name: Xxxxxxxxx X. Xxxxxxx
------------------------------
Title: Vice President
MILLENNIUM COMPUTER SYSTEMS, INC.
By: /s/ Xxxxxxxxx X. Xxxxxxx
Name: Xxxxxxxxx X. Xxxxxxx
------------------------------
Title: Vice President
MSX INTERNATIONAL PLATFORM
SERVICES, LLC
By: /s/ Xxxxxxxxx X. Xxxxxxx
Name: Xxxxxxxxx X. Xxxxxxx
------------------------------
Title: Manager
106
MSX INTERNATIONAL (HOLDINGS),
INC.
By: /s/ Xxxxxxxxx X. Xxxxxxx
Name: Xxxxxxxxx X. Xxxxxxx
------------------------------
Title: Vice President
MSX INTERNATIONAL TECHNOLOGY
SERVICES, INC.
By: /s/ Xxxxxxxxx X. Xxxxxxx
Name: Xxxxxxxxx X. Xxxxxxx
------------------------------
Title: Vice President
PROGRAMMING MANAGEMENT &
SYSTEMS, INC.
By: /s/ Xxxxxxxxx X. Xxxxxxx
Name: Xxxxxxxxx X. Xxxxxxx
------------------------------
Title: Vice President
NOTICE ADDRESS FOR ALL LOAN PARTIES:
c/o MSX International, Inc.
Address: 00000 Xxxx Xxxxxx Xxxx Xxxx
Xxxxxxxxxx, XX 00000
Attention: Xxxxx Xxxxxxxxxx
Telephone: (000) 000-0000
Facsimile: (248) 829-
107
LENDERS:
BANK ONE, NA,
as Agent and LC Issuer and as a Lender
By: /s/ Xxxxx X. Xxxxxxx
Name: Xxxxx X. Xxxxxxx
------------------------------
Title: Vice President
Address for notices:
Bank One Asset Based Lending
00 Xxxxx Xxxx Xxxxxx
Mail Code: OH2-5167
Xxxxx, Xxxx 00000
Attention: Xxxxx X. Xxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
108
COMMITMENT SCHEDULE
LENDER COMMITMENT
Bank One, NA $45,000,000
TOTAL $45,000,000
PRICING SCHEDULE
As of the Closing Date and until the Applicable Margin and Applicable Fee Rate
are adjusted for the first time based on the Fixed Charge Coverage Ratio for
the Fiscal Quarter ending as of June 27, 2004, the Applicable Margin and
Applicable Fee Rate shall be set at Level II. Effective as of the date 55 days
after the Fiscal Quarter ending as of June 27, 2004, the Applicable Margin and
Applicable Fee Rate shall be the applicable percentage set forth in the table
below based upon the Fixed Charge Coverage Ratio, as adjusted on the date 55
days after the end of each of the first three Fiscal Quarters of each Fiscal
Year and 100 days after the end of each Fiscal Year based on the Fixed Charge
Coverage Ratio as of the end of such Fiscal Quarter or Fiscal Year, as the
case may be, and shall remain in effect until the next change to be effected
pursuant to this definition, provided that upon the occurrence and during the
continuance of any Default the Applicable Margin and Applicable Fee Rate will
be set at Level I, regardless of the actual Fixed Charge Coverage Ratio.
Level Fixed Charge Applicable Fee Rate Applicable Margin for Applicable Margin for
Coverage Ratio Floating Rate Loan Eurodollar Loans and
Facility LC Fee
I less than or equal to 1.05 .625% .25% 3.25%
II greater than 1.05 but less than or equal to 1.25 .625% 0% 3.00%
III greater than 1.25 but less than or equal to 1.35 .50% -.25% 2.75%
IV greater than 1.35 but less than 1.4 .375% -.50% 2.50%
V greater than or equal to 1.4 .375% -.75% 2.25%
EXHIBIT A
BORROWING NOTICE
Date: ______________________, 20__
To: Bank One, NA, as Agent for the Lenders
This Borrowing Notice is furnished pursuant to Section 2.1.1(b)(i) of
that certain Credit Agreement dated as of August 1, 2003 (as amended, modified,
renewed or extended from time to time, the "Agreement") among MSX International,
Inc., a Delaware corporation (the "Company"), the other Loan Parties, the
lenders party thereto and Bank One, NA, as Agent for the Lenders and as LC
Issuer. Unless otherwise defined herein, capitalized terms used in this
Borrowing Notice have the meanings ascribed thereto in the Agreement.
The Company hereby notifies the Agent of its request of the following
Advance:
(1) Borrowing Date of Advance (must be a Business Day): ______________
_____________
(2) Aggregate Amount of Advance: $________________________________
(3) Type of Advance:
Eurodollar Advance __________
Floating Rate Advance __________
(4) Duration of Interest Period if a Eurodollar Advance has been
selected:
One Month __________
Two Months __________
Three Months __________
Six Months __________
The Company hereby represents that, as of the date of this Borrowing
Notice:
(a) There exists no Default or Unmatured Default and no Default or
Unmatured Default shall result from this Credit Extension.
(b) The representations and warranties contained in Article V of
the Agreement are true and correct, except to the extent any
such representation or warranty is stated to relate solely to
an earlier date.
MSX INTERNATIONAL, INC.
By:___________________________________
Name:________________________
Title:_______________________
EXHIBIT B
CONVERSION/CONTINUATION NOTICE
Date: ______________________, 20__
To: Bank One, NA, as Agent for the Lenders
This Conversion/Continuation Notice is furnished pursuant to Section
2.7 of that certain Credit Agreement dated as of August 1, 2003 (as amended,
modified, renewed or extended from time to time, the "Agreement") among MSX
International, Inc., a Delaware corporation (the "Company"), the other Loan
Parties, the lenders party thereto and Bank One, NA, as Agent for the Lenders
and as LC Issuer. Unless otherwise defined herein, capitalized terms used in
this Borrowing Notice have the meanings ascribed thereto in the Agreement.
The Company hereby notifies the Agent of its request to [SELECT ONE]:
(1) convert the Floating Rate Advance in the amount of $_________
into a Eurodollar Advance with an Interest Period duration of:
________ month(s)
(2) continue the Eurodollar Advance described below:
(a) Date of Continuation (must be a Business Day): ___________
___________
(b) Aggregate Amount of Advance: $___________________________
(c) The duration of the Interest Period applicable thereto:
________ month(s)
The Company hereby represents that, as of the date of this
Conversion/Continuation Notice:
(a) There exists no Default or Unmatured Default and no Default or
Unmatured Default shall result from this Credit Extension.
(b) The representations and warranties contained in Article V of
the Agreement are true and correct, except to the extent any
such representation or warranty is stated to relate solely to
an earlier date.
MSX INTERNATIONAL, INC.
By:___________________________________
Name:________________________
Title:_______________________
EXHIBIT C
REVOLVING NOTE
[Date]
MSX International, Inc., a Delaware corporation (the "Company"),
promises to pay to the order of ____________________________________ (the
"Lender") the aggregate unpaid principal amount of all Revolving Loans made by
the Lender to the Company pursuant to Article II of the Agreement (as
hereinafter defined), in immediately available funds at the main office of Bank
One, NA, as Agent, together with interest on the unpaid principal amount hereof
at the rates and on the dates set forth in the Agreement. The Company shall pay
the principal of and accrued and unpaid interest on the Revolving Loans and
Reimbursement Obligations in full on the Termination Date
The Lender shall, and is hereby authorized to, record on the schedule
attached hereto, or to otherwise record in accordance with its usual practice,
the date and amount of each Loan and the date and amount of each principal
payment hereunder.
This Note is one of the Notes issued pursuant to, and is entitled to
the benefits of, the Credit Agreement dated as of August 1, 2003 (which, as it
may be amended or modified and in effect from time to time, is herein called the
"Agreement"), among the Company, the other Loan Parties, the lenders party
thereto, including the Lender, the LC Issuer and Bank One, NA, as Agent, to
which Agreement reference is hereby made for a statement of the terms and
conditions governing this Note, including the terms and conditions under which
this Note may be prepaid or its maturity date accelerated. This Note is secured
pursuant to the Collateral Documents and guaranteed pursuant to the Guaranty, as
more specifically described in the Agreement, and reference is made thereto for
a statement of the terms and provisions thereof. Capitalized terms used herein
and not otherwise defined herein are used with the meanings attributed to them
in the Agreement.
MSX INTERNATIONAL, INC.
By:___________________________________
Print Name:___________________________
Title:________________________________
SCHEDULE OF LOANS AND PAYMENTS OF PRINCIPAL
TO
NOTE OF MSX INTERNATIONAL, INC.
DATED___________,
Principal Maturity Principal
Amount of of Interest Amount Unpaid
Date Loan Period Paid Balance
----------------------------------------------------------------------------------------------------------------
EXHIBIT D
FORM OF OPINION
____________,
The Agent, the LC Issuer and the Lenders who are
parties to the Credit Agreement described below.
Gentlemen/Ladies:
We are counsel for MSX International, Inc., a Delaware corporation (the
"Company") and the Guarantors (the Company and the Guarantors collectively
referred to as the "Domestic Loan Parties"), and have represented the Company
and the Guarantors in connection with the execution and delivery of (i) a Credit
Agreement dated as of August 1, 2003 (the "Agreement") among the Company, the
other Domestic Loan Parties, the Lenders named therein, and Bank One, NA, as
Agent, and LC Issuer which provides for Credit Extensions in an aggregate
principal amount not exceeding $45,000,000 at any one time outstanding and (ii)
the other Loan Documents. All capitalized terms used in this opinion and not
otherwise defined herein shall have the meanings attributed to them in the
Agreement.
We have examined the Domestic Loan Parties' *[describe constitutive
documents of the Domestic Loan Parties and appropriate evidence of authority to
enter into the transaction]*, the Loan Documents and such other matters of fact
and law which we deem necessary in order to render this opinion. Based upon the
foregoing, it is our opinion that:
l. Each Domestic Loan Party is a corporation, partnership or limited
liability company duly and properly incorporated or organized, as the case may
be, validly existing and (to the extent such concept applies to such entity) in
good standing under the laws of its jurisdiction of incorporation or
organization and has all requisite authority to conduct its business in each
jurisdiction in which its business is conducted.
2. The execution and delivery by each Domestic Loan Party of the Loan
Documents to which it is a party and the performance by such Domestic Loan Party
of its obligations thereunder have been duly authorized by proper corporate
proceedings on the part of such Domestic Loan Party and will not:
(a) require any consent of such Domestic Loan Party's
shareholders or members (other than any such consent as has already
been given and remains in full force and effect);
(b) violate (i) any law, rule, regulation, order, writ,
judgment, injunction, decree or award binding on such Domestic Loan
Party or (ii) the Domestic Loan Party's articles or certificate of
incorporation, partnership agreement, certificate of partnership,
articles or certificate of organization, by-laws, or operating or other
management agreement, as the case may be, or (iii) the provisions of
any indenture, instrument or agreement to which such Domestic Loan
Party is a party or is subject, or by which it, or its Property, is
bound, or conflict with or constitute a default thereunder; or
1-D
(c) result in, or require, the creation or imposition of any
Lien in, of or on the Property of such Domestic Loan Party pursuant to
the terms of any indenture, instrument or agreement binding upon such
Domestic Loan Party.
3. The Loan Documents to which each Domestic Loan Party is a party have
been duly executed and delivered by such Domestic Loan Party and constitute
legal, valid and binding obligations of such Domestic Loan Party enforceable
against such Domestic Loan Party in accordance with their terms except to the
extent the enforcement thereof may be limited by bankruptcy, insolvency or
similar laws affecting the enforcement of creditors' rights generally and
subject also to the availability of equitable remedies if equitable remedies are
sought.
4. There is no litigation, arbitration, governmental investigation,
proceeding or inquiry pending or, to the best of our knowledge after due
inquiry, threatened against any Domestic Loan Party which, if adversely
determined, could reasonably be expected to have a Material Adverse Effect.
5. No order, consent, adjudication, approval, license, authorization,
or validation of, or filing, recording or registration with, or exemption by, or
other action in respect of any governmental or public body or authority, or any
subdivision thereof, which has not been obtained by any Domestic Loan Party, is
required to be obtained by such Domestic Loan Party in connection with the
execution and delivery of the Loan Documents, the borrowings under the
Agreement, the payment and performance by such Domestic Loan Party of the
Obligations, or the legality, validity, binding effect or enforceability of any
of the Loan Documents.
6. All Secured Obligations are "Senior Indebtedness" and "Designated
Senior Indebtedness" as defined in the Subordinated Indenture. All Secured
Obligations are incurred pursuant to Section 4.3(b)(i) of the Subordinated Note
Indenture. The Secured Obligations constitute senior indebtedness which is
entitled to the benefits of the subordination provisions of all outstanding
Subordinated Debt.
7. All Liens securing the Fourth Secured Term Loan Debt are subordinate
and junior in priority to all Liens in favor of the Agent securing the Secured
Obligations under the Intercreditor Agreement.
8. All Liens securing the Third Secured Term Loan Debt are subordinate
and junior in priority to all Liens in favor of the Agent securing the Secured
Obligations under the Intercreditor Agreement.
9. All Secured Obligations are incurred pursuant to Section 4.3(b)(1)
and (9) of the Second Secured Note Indenture. All Liens securing the Second
Secured Debt are subordinate and junior in priority to all Liens in favor of the
Agent securing the Secured Obligations under the Intercreditor Agreement.
10. The provisions of the Collateral Documents are sufficient to create
in favor of the Lenders a security interest in all right, title and interest of
each Domestic Loan Party in those items and types of collateral described in the
Collateral Documents in which a security interest may be created under Article 9
of the Uniform Commercial Code as in effect on the date hereof in Michigan.
Financing statements on Form UCC-1's have been duly authorized by each Domestic
Loan Party and have been duly filed in each filing office indicated in Exhibit A
hereto under the Uniform Commercial Code in effect in each state in which said
filing offices are located. The description of the collateral set forth in said
financing statements is sufficient to perfect a security interest in the items
and types of collateral described therein in which a security interest may be
perfected by the filing of a financing statement under the Uniform Commercial
Code as in effect in such states. Such filings are sufficient to perfect the
security interest created by the Collateral Documents in all right, title and
interest of the Company in those items and types of collateral described in the
Collateral Documents in which a security interest may be perfected by the filing
of a financing statement under the Uniform Commercial Code in such states.
This opinion may be relied upon by the Agent, the LC Issuer and the
Lenders and their participants, assignees and other transferees.
Very truly yours,
2-D
EXHIBIT E
COMPLIANCE CERTIFICATE
To: The Lenders parties to the
Credit Agreement Described Below
This Compliance Certificate is furnished pursuant to that certain
Credit Agreement dated as of August 1, 2003 (as amended, modified, renewed or
extended from time to time, the "Agreement") among MSX International, Inc., a
Delaware corporation (the "Company"), the other Loan Parties, the Lenders party
thereto and Bank One, NA, as Agent for the Lenders and as LC Issuer. Unless
otherwise defined herein, capitalized terms used in this Compliance Certificate
have the meanings ascribed thereto in the Agreement.
THE UNDERSIGNED HEREBY CERTIFIES THAT:
1. I am the duly elected _________________ of the Company;
2. I have reviewed the terms of the Agreement and I have made, or have
caused to be made under my supervision, a detailed review of the transactions
and conditions of the Company and its Subsidiaries during the accounting period
covered by the attached financial statements;
3. The examinations described in paragraph 2 did not disclose, and I
have no knowledge of, the existence of any condition or event which constitutes
a Default or Unmatured Default during or at the end of the accounting period
covered by the attached financial statements or as of the date of this
Certificate, except as set forth below;
4. I hereby certify that since July 15, 2003, no Loan Party has
changed (i) its name, (ii) its chief executive office, (iii) principal place of
business, (iv) the type of entity it is or (v) its state of incorporation or
organization without having given the Agent the notice required by Section 6.22;
5. Schedule I attached hereto sets forth financial data and
computations evidencing the Company's compliance with Sections 6.28 and 6.31 of
the Agreement, all of which data and computations are true, complete and
correct;
6. Schedule II hereto sets forth the determination of the interest
rates to be paid for Credit Extensions and the commitment fee rates commencing
on the fifth day following the delivery hereof; and
7. Schedule III attached hereto sets forth the various reports and
deliveries which are required at this time under the Credit Agreement and the
other Loan Documents and the status of compliance.
Described below are the exceptions, if any, to paragraph 3 by listing,
in detail, the nature of the condition or event, the period during which it has
existed and the action which the Company has taken, is taking, or proposes to
take with respect to each such condition or event:
_______________________________________________________________________
_______________________________________________________________________
_______________________________________________________________________
The foregoing certifications, together with the computations set forth
in Schedule I and Schedule II hereto and the financial statements delivered with
this Certificate in support hereof, are made and delivered this ___ day of
_________, ____.
MSX INTERNATIONAL, INC.
By:___________________________________
Name:________________________
Title:_______________________
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SCHEDULE I TO COMPLIANCE CERTIFICATE
Compliance as of _________, ____ with
Provisions of _______ and _______ of
the Agreement
SCHEDULE II TO COMPLIANCE CERTIFICATE
Company's Applicable Margin Calculation
SCHEDULE III TO COMPLIANCE CERTIFICATE
Reports and Deliveries Currently Due
EXHIBIT F
ASSIGNMENT AND ASSUMPTION AGREEMENT
This Assignment and Assumption (the "Assignment and Assumption") is
dated as of the Closing Date set forth below and is entered into by and between
*[Insert name of Assignor]* (the "Assignor") and *[Insert name of Assignee]*
(the "Assignee"). Capitalized terms used but not defined herein shall have the
meanings given to them in the Credit Agreement identified below (as amended, the
"Credit Agreement"), receipt of a copy of which is hereby acknowledged by the
Assignee. The Terms and Conditions set forth in Annex 1 attached hereto are
hereby agreed to and incorporated herein by reference and made a part of this
Assignment and Assumption as if set forth herein in full.
For an agreed consideration, the Assignor hereby irrevocably sells and
assigns to the Assignee, and the Assignee hereby irrevocably purchases and
assumes from the Assignor, subject to and in accordance with the Standard Terms
and Conditions and the Credit Agreement, as of the Closing Date inserted by the
Agent as contemplated below, the interest in and to all of the Assignor's rights
and obligations in its capacity as a Lender under the Credit Agreement and any
other documents or instruments delivered pursuant thereto that represents the
amount and percentage interest identified below of all of the Assignor's
outstanding rights and obligations under the respective facilities identified
below (including without limitation any letters of credit, guaranties and
swingline loans included in such facilities and, to the extent permitted to be
assigned under applicable law, all claims (including without limitation contract
claims, tort claims, malpractice claims, statutory claims and all other claims
at law or in equity), suits, causes of action and any other right of the
Assignor against any Person whether known or unknown arising under or in
connection with the Credit Agreement, any other documents or instruments
delivered pursuant thereto or the loan transactions governed thereby) (the
"Assigned Interest"). Such sale and assignment is without recourse to the
Assignor and, except as expressly provided in this Assignment and Assumption,
without representation or warranty by the Assignor.
1. Assignor: ___________________________________________
2. Assignee: ___________________________________________*[and is an
Affiliate/Approved Fund of identify Lender](1)*
3. Company(s): ________________________________________
4. Agent: Bank One, NA, as the agent under the Credit Agreement.
5. Credit Agreement: The Amended and Restated Credit Agreement dated as of
August 1, 2003 among MSX International, Inc., the other Loan Parties, the
Lenders party thereto, Bank One, NA, as Agent, and the other agents party
thereto.
(1)Select as applicable.
1-
6. Assigned Interest:
Aggregate Amount of Amount of Commitment/
Commitment/Credit Credit Exposure Assigned(2) Percentage Assigned of
Facility Assigned Exposure for all Lenders(1) Commitment/Credit
Exposure(3)
[Commitment](4) $ $ _______%
7. Trade Date: ____________________________________________(5)
Closing Date: ____________________, 20__ [TO BE INSERTED BY AGENT AND WHICH
SHALL BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER BY THE AGENT.]
The terms set forth in this Assignment and Assumption are hereby agreed
to:
ASSIGNOR
[NAME OF ASSIGNOR]
By:_________________________________
Title:
ASSIGNEE
[NAME OF ASSIGNEE]
By:_________________________________
Title:
[Consented to and](6) Accepted:
Bank One, NA, as Agent and LC Issuer
By:__________________________________
Title:
[Consented to:](7)
[BORROWER]
By:__________________________________
Title:
______________________________
(1)AMOUNT TO BE ADJUSTED BY THE COUNTERPARTIES TO TAKE INTO ACCOUNT ANY PAYMENTS
OR PREPAYMENTS MADE BETWEEN THE TRADE DATE AND THE CLOSING DATE.
(2)AMOUNT TO BE ADJUSTED BY THE COUNTERPARTIES TO TAKE INTO ACCOUNT ANY PAYMENTS
OR PREPAYMENTS MADE BETWEEN THE TRADE DATE AND THE CLOSING DATE.
(3)SET FORTH, TO AT LEAST 9 DECIMALS, AS A PERCENTAGE OF THE COMMITMENT/LOANS OF
ALL LENDERS THEREUNDER.
(4)FILL IN THE APPROPRIATE TERMINOLOGY FOR THE TYPES OF FACILITIES UNDER THE
CREDIT AGREEMENT THAT ARE BEING ASSIGNED UNDER THIS ASSIGNMENT (E.G. "REVOLVING
CREDIT COMMITMENT," "TERM LOAN COMMITMENT,", ETC.)
(5)INSERT IF SATISFACTION OF MINIMUM AMOUNTS IS TO BE DETERMINED AS OF THE TRADE
DATE.
(6)TO BE ADDED ONLY IF THE CONSENT OF THE AGENT IS REQUIRED BY THE TERMS OF
THE CREDIT AGREEMENT.
(7) TO BE ADDED ONLY IF THE CONSENT OF THE COMPANY AND/OR OTHER PARTIES (E.G.
SWINGLINE LENDER, L/C ISSUER) IS REQUIRED BY THE TERMS OF THE CREDIT AGREEMENT.
[NAME OF OTHER RELEVANT PARTY]
By:__________________________________
Title:
2-
ANNEX 1
TERMS AND CONDITIONS FOR
ASSIGNMENT AND ASSUMPTION
1. Representations and Warranties.
1.1 Assignor. The Assignor represents and warrants that (i)
it is the legal and beneficial owner of the Assigned Interest, (ii) the Assigned
Interest is free and clear of any lien, encumbrance or other adverse claim and
(iii) it has full power and authority, and has taken all action necessary, to
execute and deliver this Assignment and Assumption and to consummate the
transactions contemplated hereby. Neither the Assignor nor any of its officers,
directors, employees, agents or attorneys shall be responsible for (i) any
statements, warranties or representations made in or in connection with the
Credit Agreement or any other Loan Document, (ii) the execution, legality,
validity, enforceability, genuineness, sufficiency, perfection, priority,
collectibility, or value of the Loan Documents or any collateral thereunder,
(iii) the financial condition of the Company, any of its Subsidiaries or
Affiliates or any other Person obligated in respect of any Loan Document, (iv)
the performance or observance by the Company, any of its Subsidiaries or
Affiliates or any other Person of any of their respective obligations under any
Loan Document, (v) inspecting any of the property, books or records of the
Company, or any guarantor, or (vi) any mistake, error of judgment, or action
taken or omitted to be taken in connection with the Loans or the Loan Documents.
1.2. Assignee. The Assignee (a) represents and warrants that
(i) it has full power and authority, and has taken all action necessary, to
execute and deliver this Assignment and Assumption and to consummate the
transactions contemplated hereby and to become a Lender under the Credit
Agreement, (ii) from and after the Closing Date, it shall be bound by the
provisions of the Credit Agreement as a Lender thereunder and, to the extent of
the Assigned Interest, shall have the obligations of a Lender thereunder, (iii)
agrees that its payment instructions and notice instructions are as set forth in
Schedule 1 to this Assignment and Assumption, (iv) confirms that none of the
funds, monies, assets or other consideration being used to make the purchase and
assumption hereunder are "plan assets" as defined under ERISA and that its
rights, benefits and interests in and under the Loan Documents will not be "plan
assets" under ERISA, (v) agrees to indemnify and hold the Assignor harmless
against all losses, costs and expenses (including, without limitation,
reasonable attorneys' fees) and liabilities incurred by the Assignor in
connection with or arising in any manner from the Assignee's non-performance of
the obligations assumed under this Assignment and Assumption, (vi) it has
received a copy of the Credit Agreement, together with copies of financial
statements and such other documents and information as it has deemed appropriate
to make its own credit analysis and decision to enter into this Assignment and
Assumption and to purchase the Assigned Interest on the basis of which it has
made such analysis and decision independently and without reliance on the Agent
or any other Lender, and (vii) attached as Schedule 1 to this Assignment and
Assumption is any documentation required to be delivered by the Assignee with
respect to its tax status pursuant to the terms of the Credit Agreement, duly
completed and executed by the Assignee and (b) agrees that (i) it will,
independently and without reliance on the Agent, the Assignor 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 the Loan Documents, and (ii) it will perform in accordance with
their terms all of the obligations which by the terms of the Loan Documents are
required to be performed by it as a Lender.
2. Payments. The Assignee shall pay the Assignor, on the
Closing Date, the amount agreed to by the Assignor and the Assignee. From and
after the Closing Date, the Agent shall make all payments in respect of the
Assigned Interest (including payments of principal, interest, fees and other
amounts) to the Assignor for amounts which have accrued to but excluding the
Closing Date and to the Assignee for amounts which have accrued from and after
the Closing Date.
3. General Provisions. This Assignment and Assumption shall
be binding upon, and inure to the benefit of, the parties hereto and their
respective successors and assigns. This Assignment and Assumption may be
executed in any number of counterparts, which together shall constitute one
instrument. Delivery of an executed counterpart of a signature page of this
Assignment and Assumption by telecopy shall be effective as delivery of a
manually executed counterpart of this Assignment and Assumption. This Assignment
and Assumption shall be governed by, and construed in accordance with, the law
of the State of Michigan.
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ADMINISTRATIVE QUESTIONNAIRE
US AND NON-US TAX INFORMATION REPORTING REQUIREMENTS
EXHIBIT G
BORROWING BASE CERTIFICATE
SUCH FORM AS REQUIRED FROM TIME TO TIME BY THE AGENT
