EXHIBIT 4.1
Execution Copy
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STARCRAFT CORPORATION
CREDIT AGREEMENT
DATED AS OF JANUARY 16, 2004
COMERICA BANK
AS AGENT
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TABLE OF CONTENTS
Page
1. DEFINITIONS.................................................................1
1.1 Certain Defined Terms..............................................1
2. REVOLVING CREDIT...........................................................23
2.1 Commitment........................................................23
2.2 Accrual of Interest and Maturity; Evidence of Indebtedness........24
2.3 Requests for and Refundings and Conversions of Advances...........24
2.4 Disbursement of Advances..........................................27
2.5 Swing Line Advances...............................................29
2.6 Prime-based Interest Payments.....................................33
2.7 Eurocurrency-based Interest Payments and Quoted Rate
Interest Payments.............................................33
2.8 Interest Payments on Conversions..................................34
2.9 Interest on Default...............................................34
2.10 Optional Prepayments..............................................34
2.11 Prime-based Advance in Absence of Election or Upon Default........35
2.12 Revolving Credit Commitment Fee...................................35
2.13 Mandatory Repayment of Revolving Credit Advances..................35
2.14 Optional Reduction or Termination of Revolving Credit
Aggregate Commitment..........................................36
2.15 Use of Proceeds of Advances.......................................37
3. LETTERS OF CREDIT..........................................................37
3.1 Letters of Credit.................................................37
3.2 Conditions to Issuance............................................37
3.3 Notice............................................................39
3.4 Letter of Credit Fees.............................................39
3.5 Other Fees........................................................40
3.6 Drawings and Demands for Payment Under Letters of Credit..........40
3.7 Obligations Irrevocable...........................................42
3.8 Risk Under Letters of Credit......................................43
3.9 Indemnification...................................................44
3.10 Right of Reimbursement............................................45
4. [RESERVED].................................................................45
5. CONDITIONS.................................................................45
5.1 Execution of Notes and this Agreement.............................45
5.2 Corporate or Limited Liability Company Authority..................45
5.3 Collateral Documents, Guaranties and other Loan Documents.........46
5.4 Existing Credit Facilities........................................47
5.5 Insurance.........................................................47
5.6 Compliance with Certain Documents and Agreements..................47
5.7 Opinion of Counsel................................................47
5.8 Company's Certificate.............................................48
5.9 Payment of Fees...................................................48
5.10 Financial Statements..............................................48
5.11 Transaction Documents.............................................48
5.12 Continuing Conditions.............................................48
6. REPRESENTATIONS AND WARRANTIES.............................................49
6.1 Corporate Authority...............................................49
6.2 Due Authorization - Company.......................................49
6.3 Due Authorization - Guarantors....................................49
6.4 Good Title, No Liens..............................................49
6.5 Taxes.............................................................50
6.6 No Defaults.......................................................50
6.7 Enforceability of Agreement and Loan Documents-- Company..........50
6.8 Enforceability of Loan Documents-- Guarantors.....................50
6.9 Compliance with Laws..............................................50
6.10 Non-contravention-- Company.......................................50
6.11 Non-contravention-- Guarantors....................................50
6.12 No Litigation.....................................................51
6.13 Consents, Approvals and Filings, Etc..............................51
6.14 Agreements Affecting Financial Condition..........................51
6.15 No Investment Company or Margin Stock.............................51
6.16 ERISA.............................................................52
6.17 Conditions Affecting Business or Properties.......................52
6.18 Environmental and Safety Matters..................................52
6.19 Subsidiaries......................................................53
6.20 Accuracy of Information...........................................53
6.21 Labor Relations...................................................53
6.22 Existing Debt.....................................................53
6.23 Solvency..........................................................53
7. AFFIRMATIVE COVENANTS......................................................54
7.1 Financial Statements. Furnish to the Agent with sufficient
copies for each Bank:.........................................54
7.2 Certificates; Other Information...................................54
7.3 Payment of Obligations............................................55
7.4 Conduct of Business and Maintenance of Existence; Compliance
with Laws.....................................................55
7.5 Maintenance of Property; Insurance................................56
7.6 Inspection of Property; Books and Records, Discussions............56
7.7 Notices...........................................................56
7.8 Hazardous Material Laws...........................................57
7.9 Fixed Charge Coverage Ratio.......................................58
7.10 Tangible Net Worth................................................58
7.11 Funded Debt to EBITDA Ratio.......................................58
7.12 Leverage Ratio....................................................58
7.13 Current Ratio.....................................................58
7.14 Governmental and Other Approvals..................................58
7.15 Compliance with ERISA.............................................58
7.16 ERISA Notices.....................................................58
7.17 Security; Defense of Collateral...................................59
7.18 Use of Proceeds...................................................59
7.19 Future Subsidiaries; Additional Collateral........................59
7.20 Further Assurances................................................60
7.21 Bank Accounts.....................................................60
8. NEGATIVE COVENANTS.........................................................60
8.1 Limitation on Debt................................................60
8.2 Limitation on Liens...............................................61
8.3 Limitation on Guarantee Obligations...............................61
8.4 Acquisitions......................................................62
8.5 Limitation on Mergers, other Fundamental Changes or
Sale of Assets................................................62
8.6 Restricted Payments...............................................62
8.7 Limitation on Capital Expenditures................................63
8.8 Limitation on Investments, Loans and Advances.....................63
8.9 Transactions with Affiliates......................................64
8.10 Sale and Leaseback................................................64
8.11 Limitation on Negative Pledge Clauses.............................64
8.12 Prepayment of Debts...............................................64
8.13 Amendment of Subordinated Debt Documents..........................64
8.14 Modification of Certain Agreements................................65
8.15 Fiscal Year.......................................................65
9. DEFAULTS...................................................................65
9.1 Events of Default.................................................65
9.2 Exercise of Remedies..............................................67
9.3 Rights Cumulative.................................................68
9.4 Waiver by Company of Certain Laws.................................68
9.5 Waiver of Defaults................................................68
9.6 Set Off...........................................................68
10.PAYMENTS, RECOVERIES AND COLLECTIONS.......................................69
10.1 Payment Procedure.................................................69
10.2 Application of Proceeds of Collateral.............................70
10.3 Pro-rata Recovery.................................................70
10.4 Margin Adjustments................................................71
11.CHANGES IN LAW OR CIRCUMSTANCES; INCREASED COSTS...........................71
11.1 Reimbursement of Prepayment Costs.................................71
11.2 Eurocurrency Lending Office.......................................72
11.3 Circumstances Affecting Eurocurrency-based Rate Availability......72
11.4 Laws Affecting Eurocurrency-based Advance Availability............72
11.5 Increased Cost of Eurocurrency-based Advances.....................73
11.6 Capital Adequacy and Other Increased Costs........................74
11.7 Substitution of Banks.............................................74
11.8 Right of Banks to Fund through Branches and Affiliates............75
12.AGENT......................................................................75
12.1 Appointment of Agent..............................................75
12.2 Deposit Account with Agent........................................76
12.3 Scope of Agent's Duties...........................................76
12.4 Successor Agent...................................................76
12.5 Credit Decisions..................................................77
12.6 Authority of Agent to Enforce This Agreement......................77
12.7 Indemnification of Agent..........................................77
12.8 Knowledge of Default..............................................78
12.9 Agent's Authorization; Action by Banks............................78
12.10 Enforcement Actions by the Agent..................................78
12.11 Collateral Matters................................................79
12.12 Agent in its Individual Capacities................................79
12.13 Co-Agent..........................................................79
12.14 Agent's Fees......................................................79
13.MISCELLANEOUS..............................................................80
13.1 Accounting Principles.............................................80
13.2 Consent to Jurisdiction...........................................80
13.3 Law of Michigan...................................................80
13.4 Interest..........................................................80
13.5 Closing Costs and Other Costs; Indemnification....................81
13.6 Notices...........................................................82
13.7 Further Action....................................................82
13.8 Successors and Assigns; Participations; Assignments...............82
13.9 Counterparts......................................................86
13.10 Amendment and Waiver..............................................86
13.11 Confidentiality...................................................87
13.12 Withholding Taxes.................................................87
13.13 Taxes and Fees....................................................88
13.14 WAIVER OF JURY TRIAL..............................................88
13.15 Complete Agreement; Conflicts.....................................88
13.16 Severability......................................................88
13.17 Table of Contents and Headings....................................89
13.18 Construction of Certain Provisions................................89
13.19 Independence of Covenants.........................................89
13.20 Reliance on and Survival of Various Provisions....................89
13.21 Merger............................................................89
TABLE OF CONTENTS
Page
SCHEDULES
Schedule 1.1 Pricing Matrix
Schedule 1.2 Percentages and Allocations
Schedule 5.2 List of Jurisdictions in which Company and/or
Subsidiaries do material business
Schedule 5.3(b) Description of Property to be mortgaged
Schedule 5.3(c) Description of Leased Property
Schedule 5.3(d) List of Jurisdictions in which to file
financing statements
Schedule 6.1 Exceptions to Foreign Corporation Qualifications
Schedule 6.9 Compliance with Laws
Schedule 6.12 Litigation
Schedule 6.16 Employee Pension Benefit Plans
Schedule 6.18 Environmental Matters
Schedule 6.19 Subsidiaries
Schedule 6.20 Contingent Obligations
Schedule 6.24 Capitalization
Schedule 7.8 Environmental Actions
Schedule 7.19 Real Estate Requirements
Schedule 8.1(b) Existing Funded Debt
Schedule 8.2 Permitted Liens
Schedule 8.3 Existing Guaranties
Schedule 8.8 Existing Investments
Schedule 8.9 Transactions with Affiliates
Schedule 8.11 Negative Pledges
Schedule 13.6 Notices
EXHIBITS
A FORM OF REQUEST FOR REVOLVING CREDIT ADVANCE
B FORM OF REVOLVING CREDIT NOTE
C FORM OF SWING LINE NOTE
D FORM OF REQUEST FOR SWING LINE ADVANCE
E FORM OF SWING LINE BANK PARTICIPATION CERTIFICATE
F FORM OF NOTICE OF LETTERS OF CREDIT
G FORM OF BORROWING BASE CERTIFICATE
H FORM OF ASSIGNMENT AGREEMENT
I FORM OF GUARANTY
J FORM OF SECURITY AGREEMENT
K FORM OF INTERCOMPANY NOTE
L FORM OF COVENANT COMPLIANCE REPORT
CREDIT AGREEMENT
This Credit Agreement ("Agreement") is made as of January 16, 2004, by and
among the financial institutions from time to time signatory hereto
(individually a "Bank," and any and all such financial institutions collectively
the "Banks"), Comerica Bank, as agent for the Banks (in such capacity, "Agent"),
and Starcraft Corporation, an Indiana corporation (the "Company").
RECITALS:
A. The Company has requested that the Banks extend to it credit and letters
of credit on the terms and conditions set forth herein.
B. The Banks are prepared to extend such credit as aforesaid, but only on
the terms and conditions set forth in this Agreement.
NOW THEREFORE, in consideration of the covenants contained herein, the
Company, the Banks, and the Agent agree as follows:
1. DEFINITIONS
1.1 Certain Defined Terms. For the purposes of this Agreement the following
terms will have the following ----------------------- meanings:
"Account(s)" shall mean any account or account receivable as defined under
the UCC, including without limitation, with respect to any Person, any right of
such Person to payment for goods sold or leased or for services rendered.
"Account Debtor" shall mean the party who is obligated on or under any
Account.
"Account Party(ies)" shall mean, with respect to any Letter of Credit, the
account party or parties (which shall be the Company or a Guarantor) as named in
an application to the Agent for the issuance of such Letter of Credit.
"Advance(s)" shall mean, as the context may indicate, a borrowing requested
by the Company, and made by the Banks under Section 2.1, or the Swing Line Bank
under Section 2.5 hereof, including without limitation any readvance, refunding
or conversion of such borrowing pursuant to Section 2.3 or 2.5 hereof, and any
advance deemed to have been made in respect of a Letter of Credit under Section
3.6(a) hereof, and shall include, as applicable, a Eurocurrency-based Advance, a
Prime-based Advance and a Quoted Rate Advance.
"Affiliate" shall mean, with respect to any Person, any other Person or
group acting in concert in respect of the first Person that, directly or
indirectly, through one or more intermediaries, controls, or is controlled by,
or is under common control with such first Person. For purposes of this
definition, "control" (including, with correlative meanings, the terms
"controlled by" and "under common control with"), as used with respect to any
Person or group of Persons, shall mean the possession, directly or indirectly,
of the power to direct or cause the direction of management and policies of such
Person, whether through the ownership of voting securities or by contract or
otherwise. Unless otherwise specified to the contrary herein, or the context
requires otherwise, Affiliate shall refer to Affiliates of the Company. In the
case of an individual and Affiliate shall include such person's spouse, parents,
natural and adopted children and grandchildren, siblings, the estate of such
individual or any such family member, and any trust established primarily for
the benefit of such persons.
"Agent" shall mean Comerica Bank, in its capacity as agent for the Banks
hereunder, or any successor agent appointed in accordance with Section 12.4
hereof.
"Agent's Correspondent" shall mean for Advances in eurodollars, Agent's
Grand Cayman Branch (or for the account of said branch office, at Agent's main
office in Detroit, Michigan, United States).
"Alternate Base Rate" shall mean, for any day, an interest rate per annum
equal to the Federal Funds Effective Rate in effect on such day, plus one
percent (1%).
"Applicable Interest Rate" shall mean (i) in respect of Revolving Credit
Advances, the Eurocurrency-based Rate and the Prime-based Rate; and (ii) in
respect of Swing Line Advances, Prime-based Rate and the Quoted Rate; in each
case, as selected by Company from time to time subject to the terms and
conditions of this Agreement.
"Applicable Margin" shall mean, as of any date of determination thereof,
the applicable interest rate margin, determined by reference to the appropriate
columns in the Pricing Matrix attached to this Agreement as Schedule 1.1.
"Asset Sale" shall mean the sale, transfer or other disposition by the
Company or any Guarantor of any tangible asset (other than stock or other
ownership interests of any Subsidiary) to any Person (other than to the Company
or any Guarantor), other than sales, transfers or other dispositions of
inventory in the ordinary course of business and sales of assets or other
dispositions of assets that have been damaged, become obsolete, worn out or are
no longer useable or useful in the conduct of Company's or such Guarantor's
business.
"Assignment Agreement" shall mean an Assignment Agreement substantially in
the form of Exhibit I hereto.
"Bank Hedging Agreement" means any Hedging Transaction entered into between
the Company and any Bank or an Affiliate of a Bank.
"Bankruptcy Code" shall mean Title 11 of the United States Code and the
rules promulgated thereunder.
"Banks" shall mean Comerica Bank and such other financial institutions from
time to time parties hereto as lenders and shall include the Swing Line Bank and
any assignee which becomes a Bank pursuant to Section 13.8 hereof.
"Base Tangible Net Worth" shall initially mean $8,000,000. Beginning March
31, 2004 and on the last day of each fiscal quarter thereafter, Base Tangible
Net Worth shall increase by an amount equal to the greater of either (i) fifty
percent (50%) of the Net Income of Company and its Consolidated Subsidiaries for
the fiscal quarter then ended or (ii) $500,000. If Net Income is less than zero
for any fiscal quarter, it shall be deemed to be zero for purposes of this
calculation.
"Borrowing Base" shall mean, as of any date of determination thereof, an
amount equal to the sum of (i) 85% of Eligible Accounts plus (ii) twenty-five
percent (25%) of Eligible Inventory provided that the amount set forth in this
clause (ii) shall not exceed Two Million Five Hundred Thousand Dollars
($2,500,000) plus (iii) the lesser of (A) 75% of Eligible Tooling Accounts, less
any progress payments received for the applicable tooling and (B) $3,000,000;
plus (iv) the Overformula Amount; provided however, that the Borrowing Base
shall be determined on the basis of the most current Borrowing Base Certificate
required to be submitted hereunder, provided, further, that the amount
determined as the Borrowing Base shall be subject to any reserves for
contras/offsets, potential offsets due to customer deposits, and such other
reserves as reasonably established by the Agent, at the direction or with the
concurrence of the Majority Banks from time to time, including, without
limitation any reserves or other adjustments established by Agent or the
Majority Banks on the basis of any collateral audits conducted hereunder, all in
accordance with ordinary and customary asset-based lending standards, as
reasonably determined by Agent and the requisite Banks. In the event that Agent,
at any time in its sole discretion, determines that the dollar amount of
Eligible Accounts collectable by a Borrowing Base Obligor is reduced or diluted
as a result of discounts or rebates granted by a Borrowing Base Obligor to the
respective Account Debtor(s), returned or rejected Inventory or services, or
such other reasons or factors as Agent reasonably deems applicable, all in
accordance with ordinary and customary asset-based lending standards, as
reasonably determined by Agent and the requisite Banks, Agent may, in its sole
discretion, upon five (5) business days' prior written notice to Agent, reduce
or otherwise modify the percentage of Eligible Accounts included within the
Borrowing Base and/or reduce the dollar amount of Eligible Accounts by an amount
determined by Agent in its sole discretion.
"Borrowing Base Certificate" shall mean a Borrowing Base certificate,
substantially in the form of Exhibit H, with appropriate insertions and executed
by a Responsible Officer.
"Borrowing Base Obligors" shall mean the Company and the Domestic
Guarantors.
"Business Day" shall mean any day on which commercial banks are open for
domestic and international business in Detroit, Michigan and if related to a
determination of the Eurocurrency-based Rate or to a Eurocurrency-based Advance,
a day on which commercial banks are open in the relevant interbank market for
eurodollar transactions.
"Capital Expenditures" shall mean, for any period, with respect to any
Person, the aggregate of all expenditures incurred by such Person and the
Guarantors during such period for the acquisition or leasing (pursuant to a
Capitalized Lease) of fixed or capital assets or additions to equipment, plant
and property that should be capitalized under GAAP on a consolidated balance
sheet of such Person and the Guarantors.
"Capitalized Lease" shall mean, as applied to any Person, any lease of any
property (whether real, personal or mixed) with respect to which the discounted
present value of the rental obligations of such Person as lessee thereunder, in
conformity with GAAP, is required to be capitalized on the balance sheet of that
Person.
"Change of Control" shall mean the occurrence of either:
(A)(i) any person or group of persons (within the meaning of Rule
13d-3 promulgated by the SEC under the Securities Exchange Act of
1934, as amended), other than the Investors or any Affiliates of the
Investors or a person approved in advance by the Majority Banks (a
"Permitted Transferee"), shall have acquired beneficial ownership
(within the meaning of such Rule 13d-3) of 30% or more of the equity
interests of the Company generally having the right to vote through
the acquisition of such equity interests from the Investors or any
Affiliates of the Investors; and (ii) the Investors and any Affiliates
of the Investors shall, collectively, cease to be the beneficial
owners (within the meaning of such Rule 13d-3) of at least 30% or more
of the equity interests of the Company generally having the right to
vote by virtue of the sale or other transfer of equity interests to
any Person which is not an Investor, an Affiliate of the Investors or
a Permitted Transferee of the Investors; or
(B) the Company shall cease to own directly or indirectly, at
least 100% of the Equity Interests of any of its Subsidiaries.
For avoidance of doubt, the Merger shall not constitute a Change of
Control.
"Collateral" shall mean all property or rights in which a security
interest, mortgage, lien or other encumbrance for the benefit of the Banks is or
has been granted or arises or has arisen, under or in connection with this
Agreement, the other Loan Documents, or otherwise to secure the Indebtedness.
"Collateral Access Agreement" shall mean an agreement in form and substance
reasonably satisfactory to the Agent pursuant to which a mortgagee or lessor of
real property on which Collateral is stored or otherwise located, or a
warehouseman, processor or other bailee of Inventory or other property owned by
a Borrowing Base Obligor, that acknowledges the Liens under the Collateral
Documents and subordinates or waives any Liens held by such Person on such
property and, in the case of any such agreement with a mortgagee or lessor,
permits the Agent reasonable access to and the use of such real property during
the continuance of an Event of Default to assemble, complete and sell any
Collateral stored or otherwise located thereon.
"Collateral Documents" shall mean the Security Agreement, the Guaranties,
the Mortgages and all of the other acknowledgments, certificates, financing
statements, instruments and other security documents executed by Company or any
Guarantor in favor of the Agent for the benefit of the Banks and delivered to
the Agent, as security for the Indebtedness, in each case as of the Effective
Date or, from time to time, subsequent thereto, in connection with such
collateral documents, in each case, as such collateral documents may be amended
or otherwise modified from time to time.
"Comerica Bank" shall mean Comerica Bank, a Michigan banking corporation,
its successors or assigns.
"Commitment" shall mean the Revolving Credit Aggregate Commitment.
"Commonly Controlled Entity" shall mean an entity, whether or not
incorporated, which is under common control with the Company within the meaning
of Section 4001 of ERISA or which is part of a group which includes Company and
which is treated as a single employer under Section 414 of the Internal Revenue
Code.
"Company" is defined in the preamble.
"Consolidated" (or "consolidated") or "Consolidating" (or "consolidating")
shall mean, when used with reference to any financial term in this Agreement,
the aggregate for two or more Persons of the amounts signified by such term for
all such Persons determined on a consolidated basis in accordance with GAAP.
Unless otherwise specified herein, "Consolidated" and "Consolidating" shall
refer to Company and its Subsidiaries, determined on a Consolidated or
Consolidating basis, as the case may be.
"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.
"Covenant Compliance Report" shall mean the report to be furnished by the
Company to the Agent pursuant to Section 7.2(a) hereof, in the form attached
hereto Exhibit L and certified by a Responsible Officer, which report shall
include, among other things, detailed calculations and the resultant ratios or
financial tests with respect to the financial covenants contained in Sections
7.9 through 7.13 and 8.7 of this Agreement, accompanied by such other
supplemental or supporting information as may be reasonably requested by Agent
or Majority Banks.
"Current Assets" shall mean, as of any applicable date of determination,
all cash, non-affiliated customer receivables and unbilled receivables, United
States government securities, income tax refunds, tooling and inventories.
"Current Liabilities" shall mean, as of any applicable date of
determination, all items of indebtedness, obligation or liability of a Person,
whether matured or unmatured, liquidated or unliquidated, direct or indirect,
absolute or contingent, joint or several, that should be classified as
liabilities in accordance with GAAP; provided, that, Current Liabilities shall
include outstanding Advances and Letters of Credit regardless of whether they
would be classified as Current Liabilities in accordance with GAAP.
"Current Ratio" shall mean as of any date of determination, a ratio the
numerator of which is Current Assets of Company and its consolidated
Subsidiaries and the denominator of which is Current Liabilities of Company and
its consolidated Subsidiaries.
"De Minimis Matters" shall mean any suits, actions, proceedings,
investigations, or other matters, the existence of which and any liability which
may result therefrom, would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect.
"Debt" shall mean, as of any applicable date of determination, all items of
indebtedness, obligation or liability of a Person, whether matured or unmatured,
liquidated or unliquidated, direct or indirect, absolute or contingent, joint or
several, that should be classified as liabilities in accordance with GAAP,
including, without limitation, Capital Leases.
"Default" shall mean any event which with the giving of notice or the
passage of time, or both, would constitute an Event of Default under this
Agreement.
"Defaulting Bank" is defined in Section 2.4(c).
"Distribution" is defined in Section 8.6 hereof.
"Dollars" and the sign "$" shall mean lawful money of the United States of
America.
"Domestic Advance" shall mean any Advance other than a Eurocurrency-based
Advance.
"Domestic Guarantors" shall mean the Guarantors excluding any Guarantor
which is a Foreign Subsidiary.
"Domestic Subsidiary(ies)" shall mean any direct or indirect Subsidiary of
the Company which is organized under the laws of the United States of America,
or any state, territory or other political subdivision thereof.
"EBITDA" shall mean, as of any date of determination, the sum of the Net
Income of Company and its Consolidated Subsidiaries, for the four preceding
fiscal quarters ending on such date of determination, plus, to the extent
deducted in computation of such Net Income, (i) income taxes, for that period,
(ii) interest expense for that period and (iii) depreciation and amortization
expense for that period, in each case determined in accordance with GAAP.
"Effective Date" shall mean the date on which all the conditions precedent
set forth in Sections 5.1 through 5.11 have been satisfied.
"Eligible Accounts" shall mean an Account which has been included in a
Borrowing Base Certificate as an Eligible Account to determine the Borrowing
Base, and as to which Account, unless otherwise approved by Agent in its sole
discretion, the following is true and accurate as of the time it was utilized to
determine the Borrowing Base:
(a) such Account arose in the ordinary course of the business of the
applicable Borrowing Base Obligor out of either (i) a bona fide sale
of Inventory (as defined in the UCC) by such Borrowing Base Obligor,
and in such case such Inventory has in fact been shipped to the
appropriate Account Debtor or the sale has otherwise been consummated
in accordance with such order, or (ii) services performed by such
Borrowing Base Obligor under an enforceable contract (written or
oral), and in such case such services have in fact been performed for
the appropriate Account Debtor in accordance with such contract;
(b) such Account represents a legally valid and enforceable claim which is
due and owing to a Borrowing Base Obligor by such Account Debtor and
for such amount as is represented by the Company to Agent in the
applicable Borrowing Base Certificate;
(c) it is evidenced by an invoice dated not later than the date of
shipment of the related Inventory or the performance of the services
or other evidence of billing acceptable to Agent giving rise to such
Account and it is not owing more than ninety (90) days after the date
of the invoice corresponding to such Account;
(d) the unpaid balance of such Account as represented by the Company to
Agent in the applicable Borrowing Base Certificate is not subject to
any defense, counterclaim, setoff, contra account, credit, allowance
or adjustment by the Account Debtor because of returned, inferior or
damaged Inventory or services, or for any other reason, except for
customary discounts allowed by the applicable Borrowing Base Obligor
in the ordinary course of business for prompt payment;
(e) the transactions leading to the creation of such Account comply with
all applicable local, state and federal laws and regulations of the
jurisdiction in which such Account was created where the failure to
comply therewith could reasonably be expected to impair the
collectibility of such Account;
(f) it is not an Account billed in advance, payable on delivery, for
consigned goods, for guaranteed sales, for unbilled sales, for
progress xxxxxxxx, payable at a future date in accordance with its
terms, subject to a retainage or holdback or insured by a surety
company;
(g) the applicable Borrowing Base Obligor has granted to the Agent
pursuant to or in accordance with the Collateral Documents (except to
the extent not required to do so thereunder) a perfected security
interest in such Account prior in right to all other persons or
entities and such Account has not been sold, transferred or otherwise
assigned or encumbered by such Borrowing Base Obligor, as applicable,
to any person or entity other than pursuant to or in accordance with
the Collateral Documents or this Agreement;
(h) it is not owing by an Account Debtor who, as of the date of
determination, has failed to pay twenty-five percent (25%) or more of
the aggregate amount of its Accounts owing to any Borrowing Base
Obligor within ninety (90) days since the original invoice date
(provided that this requirement shall not apply to Accounts owing from
General Motors Corporation, Ford Motor Company, DaimlerChrysler
Corporation or their respective subsidiaries);
(i) such Account is not represented by any note, trade acceptance, draft
or other negotiable instrument or by any chattel paper, except any
such as has been endorsed and delivered by any Borrowing Base Obligor
pursuant to or in accordance with the Collateral Documents or this
Agreement on or prior to such Account's inclusion in any applicable
Borrowing Base Certificate;
(j) the Borrowing Base Obligors have not received, with respect to such
Account, any notice of the death of the related Account Debtor or any
general partner thereof, nor of the dissolution, liquidation,
termination of existence, insolvency, business failure, appointment of
a receiver for any part of the property of, assignment for the benefit
of creditors by, or the filing of a petition in bankruptcy or the
commencement of any proceeding under any bankruptcy or insolvency laws
by or against, such Account Debtor;
(k) the Account Debtor on such Account is not:
(i) an Affiliate of the Company or any of its Subsidiaries,
(ii) unless the applicable Borrowing Base Obligor has complied with
the provisions of the Federal Assignment of Claims Act, the
United States of America or any department, agency, or
instrumentality thereof,
(iii)a citizen or resident of any jurisdiction other than one of the
United States or Canada, unless such Account is secured by a
letter of credit or a guaranty issued by a bank acceptable to the
Agent and in form and substance acceptable to the Agent, in its
reasonable discretion, or
(iv) an Account Debtor whose obligations the Agent, acting in its
commercially reasonable judgment, has notified the Company are
not deemed to constitute an Eligible Account because the
collectibility of such Account is or will be impaired;
(l) such Account satisfies any other eligibility criteria established from
time to time by the Agent at the direction or with the concurrence of
the Majority Banks, all in accordance with ordinary and customary
asset-based lending standards, as reasonably determined by them; and
(m) it is not for the sale of tooling.
Any Account which is at any time an Eligible Account but which subsequently
fails to meet any of the foregoing requirements, shall forthwith cease to be an
Eligible Account.
"Eligible Inventory" shall mean Inventory of any Borrowing Base Obligor
which meets each of the following requirements:
(a) it (i) is subject to a perfected Lien in favor of Agent and (ii) is
not subject to any other assignment, claim or Lien;
(b) it is saleable;
(c) it is in the possession and control of the applicable Borrowing Base
Obligor and it is stored and held in facilities owned by a Borrowing
Base Obligor or, if such facilities are not so owned, Agent is in
possession of a Collateral Access Agreement or other acknowledgment
agreements with respect thereto;
(d) it is not Inventory produced in violation of the Fair Labor Standards
Act and subject to the "hot goods" provisions contained in Title 29
U.S.C. ss.215;
(e) it is not subject to any agreement which would restrict Agent's
ability to sell or otherwise dispose of such Inventory, other than any
restriction established by an Account Debtor relating to the sale of
Inventory which is proprietary (or includes proprietary components) to
a competitor, whether directly or indirectly;
(f) it is located in the United States or in any territory or possession
of the United States that has adopted Article 9 of the Uniform
Commercial Code;
(g) it is not "in transit" to any Borrowing Base Obligor or held by any
Borrowing Base Obligor on consignment;
(h) it is not work-in-process Inventory; and
(i) Agent shall not have determined in its discretion, all in accordance
with ordinary and customary asset-based lending standards, as
reasonably determined by Agent and the requisite Banks that it is
unacceptable due to age, type, category, quality, quantity and/or any
other reason whatsoever.
Inventory which is at any time Eligible Inventory but which subsequently fails
to meet any of the foregoing requirements shall forthwith cease to be Eligible
Inventory.
"Eligible Tooling Account" shall mean an Account which has been included in
a Borrowing Base Certificate as an eligible tooling account to determine the
Borrowing Base, and as to which Account, as of any date, arises from the sale of
dies, molds, tooling and similar items, but excluding cutting tools and
perishable tooling (collectively, for the purposes of this definition,
"tooling"), which are payable in Dollars and in which the applicable Borrowing
Base Obligor has granted to the Agent a first-priority perfected security
interest pursuant to the Collateral Documents, valued at the face amount thereof
less sales, excise or similar taxes and less returns, discounts, claims, credits
and allowances of any nature eat any time issued, owing, granted, outstanding,
available or claimed, and less any tooling payables relating to such Account,
provided that each of the following conditions is satisfied:
(i) the sale of such Tooling is covered under specific written
purchase orders or agreements between the applicable Borrowing Base Obligor
and the purchasers of such Tooling which purchase orders and agreements
shall have been delivered to the Agent and their terms and provisions shall
be satisfactory to the Agent.
(ii) the purchaser of the Tooling shall be satisfactory to the Agent;
(iii) the purchaser of the Tooling shall be obligated for payment on
an invoice from the applicable Borrowing Base Obligor that is not aged more
than ninety (90) days from the original invoice date;
(iv) the applicable Borrowing Base Obligor shall have submitted to the
Agent such internal reports with respect to the Tooling as the Agent may
require, copies of the Tooling invoices, and evidence satisfactory to the
Agent of the PPAP approval for the Tooling; and
(v) the unpaid balance of such Tooling as represented by the
applicable Borrowing Base Obligor is not subject to any defense,
counterclaim, setoff, contra-account, vendor account payable, credit,
allowance or adjustment;
(vi) it otherwise complies with the definition of "Eligible Account"
contained herein.
Any Account which is at any time an Eligible Tooling Account but which
subsequently fails to meet any of the foregoing requirements, shall forthwith
cease to be an Eligible Tooling Account.
"Equity Interests" means, with respect to any Person, any and all shares,
share capital, interests, participations, warrants, options or other equivalents
(however designated) of capital stock of a corporation and any and all
equivalent ownership interests in a Person (other than a corporation).
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended, or any successor act or code and the regulations in effect from time to
time thereunder.
"Eurocurrency-based Advance" shall mean any Advance which bears interest at
the Eurocurrency-based Rate.
"Eurocurrency-based Rate" shall mean a per annum interest rate which is
equal to the sum of (a) the Applicable Margin, plus (b) the quotient of:
(A) the per annum interest rate at which deposits in the relevant
eurocurrency are offered to Agent's Eurocurrency Lending Office
by other prime banks in the eurocurrency market in an amount
comparable to the relevant Eurocurrency-based Advance and for a
period equal to the relevant Eurocurrency-Interest Period at
approximately 11:00 A.M. Detroit time two (2) Business Days prior
to the first day of such Eurocurrency-Interest Period, divided by
(B) a percentage equal to 100% minus the maximum rate on such date at
which Agent is required to maintain reserves on 'Eurocurrency
Liabilities' as defined in and pursuant to Regulation D of the
Board of Governors of the Federal Reserve System or, if such
regulation or definition is modified, and as long as Agent is
required to maintain reserves against a category of liabilities
which includes eurocurrency deposits or includes a category of
assets which includes eurocurrency loans, the rate at which such
reserves are required to be maintained on such category,
such sum to be rounded upward, if necessary, to the nearest whole multiple of
1/16th of 1%.
"Eurocurrency-Interest Period" shall mean, for any Eurocurrency-based
Advance, an interest period of one, two or three months (or such other period as
is agreed to by Company and the Banks) as selected by the Company, for such
Eurocurrency-based Advance pursuant to Section 2.3 or 2.5 hereof, as the case
may be.
"Eurocurrency Lending Office" shall mean, (a) with respect to the Agent,
Agent's office located at its Grand Caymans Branch or such other branch of
Agent, domestic or foreign, as it may hereafter designate as its Eurocurrency
Lending Office by written notice to Company and the Banks and (b) as to each of
the Banks, its office, branch or affiliate located at its address set forth on
the signature pages hereof (or identified thereon as its Eurocurrency Lending
Office), or at such other office, branch or affiliate of such Bank as it may
hereafter designate as its Eurocurrency Lending Office by written notice to
Company and Agent.
"Event of Default" shall mean each of the Events of Default specified in
Section 9.1 hereof.
"Federal Funds Effective Rate" shall mean, for any day, a fluctuating
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, as published for such day (or, if such day is not a
Business Day, for the next preceding Business Day) by the Federal Reserve Bank
of New York, or, if such rate is not so published for any day which is a
Business Day, the average of the quotations for such day on such transactions
received by Agent from three Federal funds brokers of recognized standing
selected by it, all as conclusively determined by the Agent, such sum to be
rounded upward, if necessary, to the nearest whole multiple of 1/16th of 1%.
"Fee Letter" shall mean each fee letter in effect from time to time between
Company and the Agent or any Bank hereunder, as amended from time to time.
"Fees" shall mean the Letter of Credit Fees and the other fees and charges
payable by the Company to the Banks or Agent hereunder.
"Fixed Charge Coverage Ratio" shall mean as of any date of determination
thereof, a ratio the numerator of which is EBITDA for the four preceding fiscal
quarters ending on such date of determination and the denominator of which is
the sum of all of Company's and its Consolidated Subsidiaries' (a) interest
expense during such period, (b) income taxes expensed during such period, (c)
dividends paid during such period (excluding dividends and distributions by a
Subsidiary of Company to Company or a Subsidiary of Company), (d) lease and
rental expense during such period and (e) all payments of principal with respect
to Funded Debt of Company and its Consolidated Subsidiaries during such period,
all as determined in accordance with GAAP.
"Foreign Person" shall mean an Account Debtor which (i) does not maintain
its chief executive office in the United States of America, (ii) is not
organized under the laws of the United States of America, or any state thereof,
or (iii) is the government of any foreign country of sovereign state, or of any
state, province, municipality or other instrumentality thereof.
"Foreign Subsidiary(ies)" shall mean each Subsidiary of the Company which
is not a Domestic Subsidiary.
"Funded Debt" of any Person shall mean (a) all indebtedness of such Person
for borrowed money or for the deferred purchase price of property or services as
of such date (other than operating leases and trade liabilities incurred in the
ordinary course of business and payable in accordance with customary practices)
or which is evidenced by a note, bond, debenture or similar instrument, (b) the
principal component of all obligations of such Person under Capitalized Leases,
(c) all reimbursement obligations (actual, contingent or otherwise) of such
Person in respect of letters of credit, acceptances or similar obligations
issued or created for the account of such Person, (d) all liabilities secured by
any liens on any property owned by such Person as of such date even though such
Person has not assumed or otherwise become liable for the payment thereof, in
each case determined in accordance with GAAP; provided however that so long as
such Person is not personally liable for such liabilities, the amount of such
liability shall be deemed to be the lesser of the fair market value at such date
of the property subject to the lien securing such liability and the amount of
the liability secured, and (e) all Guarantee Obligations in respect of any
liability which constitutes Funded Debt; provided, however that Funded Debt
shall not include any interest rate swap transaction, basis swap transaction,
forward rate transaction, commodity swap transaction, equity transaction, equity
index transaction, foreign exchange transaction, cap transaction, floor
transaction (including any option with respect to any of these transactions and
any combination of any of the foregoing) entered into by such Person prior to
the occurrence of a termination event with respect thereto.
"Funded Debt to EBITDA Ratio" shall mean as of any date of determination, a
ratio the numerator of which is all Funded Debt of Company and its Consolidated
Subsidiaries as of such date and the denominator of which is EBITDA for the four
preceding fiscal quarters ending on such date of determination. For purposes of
determining the Funded Debt to EBITDA Ratio, Funded Debt consisting of Revolving
Credit outstandings (including outstanding Letters of Credit) shall be
calculated on the basis of the average outstandings during the Company's fiscal
quarter ending of the applicable date of determination.
"GAAP" shall mean generally accepted accounting principles in the United
States of America, consistently applied; provided however that in the case of
determination of compliance with the financial covenants set forth in Sections
7.9 through 7.13 and 8.7, GAAP shall mean such accounting principles as in
effect on the Effective Date.
"Governmental Obligations" means noncallable direct general obligations of
the United States of America or obligations the payment of principal of and
interest on which is unconditionally guaranteed by the United States of America.
"Guarantee Obligation" shall mean as to any Person (the "guaranteeing
person") any obligation of the guaranteeing person in respect of any obligation
of another Person (including, without limitation, any bank under any letter of
credit), the creation of which was induced by a reimbursement agreement,
guaranty agreement, keepwell agreement, purchase agreement, counterindemnity or
similar obligation issued by the guaranteeing person, in either case
guaranteeing or in effect guaranteeing any Debt, leases, dividends or other
obligations (the "primary obligations") of any other third Person (the "primary
obligor") in any manner, whether directly or indirectly, including, without
limitation, any obligation of the guaranteeing person, whether or not
contingent, (i) to purchase any such primary obligation or any property
constituting direct or indirect security therefor, (ii) to advance or supply
funds (1) for the purchase or payment of any such primary obligation or (2) to
maintain working capital or equity capital of the primary obligor or otherwise
to maintain the net worth or solvency of the primary obligor, (iii) to purchase
property, securities or services primarily for the purpose of assuring the owner
of any such primary obligation of the ability of the primary obligor to make
payment of such primary obligation or (iv) otherwise to assure or hold harmless
the owner of any such primary obligation against loss in respect thereof;
provided, however, that the term Guarantee Obligation shall not include
endorsements of instruments for deposit or collection in the ordinary course of
business. The amount of any Guarantee Obligation of any guaranteeing person
shall be deemed to be the lower of (a) an amount equal to the stated or
determinable amount of the primary obligation in respect of which such Guarantee
Obligation is made and (b) the maximum amount for which such guaranteeing person
may be liable pursuant to the terms of the instrument embodying such Guarantee
Obligation, unless such primary obligation and the maximum amount for which such
guaranteeing person may be liable are not stated or determinable, in which case
the amount of such Guarantee Obligation shall be such guaranteeing person's
maximum reasonably anticipated liability in respect thereof as determined by
Company in good faith.
"Guarantor(s)" shall Tecstar, LLC, Wheel to Wheel Acquisition Company, LLC,
Wheel to Wheel, Inc. and Tecstar Manufacturing Canada Limited and each
Subsidiary which is required by the Banks to guarantee the obligations of the
Company hereunder and under the other Loan Documents.
"Guaranties" shall mean those certain guaranties of all outstanding
Indebtedness of the Company, executed and delivered (or to be executed and
delivered) by the Guarantors (whether by execution thereof, or by execution of
the Joinder Agreement attached as "Exhibit A" to the form of such Guaranty), to
the Agent, on behalf of the Banks, in the form annexed hereto as Exhibits "I-1"
and "I-2", as amended from time to time.
"Hazardous Material" shall mean any hazardous or toxic waste, substance or
material defined or regulated as such in or for purposes of the Hazardous
Material Laws.
"Hazardous Material Law(s)" shall mean all laws, codes, ordinances, rules,
regulations, orders, decrees and final, written directives issued by any
federal, state, local or other governmental or quasi-governmental authority or
body (or any agency, instrumentality or political subdivision thereof)
pertaining to any substance or material which is regulated for reasons of
health, safety or the environment and which is present or alleged to be present
on or about or used in any facilities owned, leased or operated by the Company
or any of its Subsidiaries, or any portion thereof including, without
limitation, those relating to soil, surface, subsurface ground water conditions
and the condition of the indoor and outdoor ambient air; any so-called
"superfund" or "superlien" law; and any other federal, state or local statute,
law, ordinance, code, rule, regulation, order or decree regulating, relating to,
or imposing liability or standards of conduct concerning, any Hazardous
Material, as now or at any time during the term of the Agreement in effect.
"Hedging Transaction" means each interest rate swap transaction, basis swap
transaction, forward rate transaction, commodity swap transaction, equity
transaction, equity index transaction, foreign exchange transaction, cap
transaction, floor transaction (including any option with respect to any of
these transactions and any combination of any of the foregoing) entered into by
the Company from time to time; provided that such transaction is entered into
for risk management purposes and not for speculative purposes.
"Hereof", "hereto", "hereunder" and similar terms shall refer to this
Agreement and not to any particular paragraph or provision of this Agreement.
"Indebtedness" shall mean all indebtedness and liabilities including
interest, fees and other charges (including interest accruing at the then
applicable rate provided in this Agreement or any other applicable Loan Document
after the Revolving Credit Maturity Date and interest accruing at the then
applicable rate provided in this Agreement or any other applicable Loan Document
after the filing of any petition in bankruptcy, or the commencement of any
insolvency, reorganization or like proceeding, relating to the Company or any
Guarantor, whether or not a claim for post-filing or post-petition interest is
allowed in such proceeding), arising under this Agreement or any of the other
Loan Documents, whether direct or indirect, absolute or contingent, of the
Company or any Guarantor to any of the Banks or Affiliates thereof or to the
Agent, in any manner and at any time, whether arising under this Agreement, or
under the Guaranty or any of the other Loan Documents, due or hereafter to
become due, now owing or that may hereafter be incurred by the Company or any
Guarantor to, any of the Banks or Affiliates thereof or to the Agent (and which
shall be deemed to include any liabilities of the Company or any Guarantor to
any Bank arising in connection with account overdrafts), and any judgments that
may hereafter be rendered on such indebtedness or any part thereof, with
interest according to the rates and terms specified, or as provided by law, any
payment obligations, if any, under Hedging Transactions evidenced by Bank
Hedging Agreements, and any and all consolidations, amendments, renewals,
replacements, substitutions or extensions of any of the foregoing; provided,
however that for purposes of calculating the Indebtedness outstanding under this
Agreement or any of the other Loan Documents, the direct and indirect and
absolute and contingent obligations of the Company and the Guarantors (whether
direct or contingent) shall be determined without duplication.
"Intercompany Loan" shall mean any loan (or advance in the nature of a
loan) by the Company to any Guarantor, or by any Subsidiary to the Company or to
any Guarantor, provided that each such loan or advance is subordinated in right
of payment and priority to the Indebtedness on terms and conditions satisfactory
to Agent and the Majority Banks.
"Intercompany Loans, Advances or Investments" shall mean any Intercompany
Loan, and any advance or investment by the Company or any Subsidiary (including
without limitation any guaranty of obligations or indebtedness to third parties)
to or in another Subsidiary (or by any Subsidiary to the Company).
"Intercompany Note" shall mean any promissory note issued or to be issued
by the Company or any Subsidiary to evidence an Intercompany Loan substantially
in the form of Exhibit K.
"Interest Period" shall mean (a) with respect to a Eurocurrency-based
Advance, a Eurocurrency-Interest Period, commencing on the day a
Eurocurrency-based Advance is made, or on the effective date of an election of
the Eurocurrency-based Rate made under Section 2.3 hereof, and (b) with respect
to a Swing Line Advance carried at the Quoted Rate, an interest period of 30
days (or any lesser number of days agreed to in advance by the Company, Agent
and the Swing Line Bank or required under clause (iii) of the proviso to this
definition); provided, however that (i) any Interest Period which would
otherwise end on a day which is not a Business Day shall end on the next
succeeding Business Day, except that as to an Interest Period in respect of a
Eurocurrency-based Advance, if the next succeeding Business Day falls in another
calendar month, such Interest Period shall end on the next preceding Business
Day, (ii) when an Interest Period in respect of a Eurocurrency-based Advance
begins on a day which has no numerically corresponding day in the calendar month
during which such Interest Period is to end, it shall end on the last Business
Day of such calendar month, (iii) with respect to any Quoted Rate Advance, the
last day of the applicable Interest Period shall be on or before the last
Business Day of the week in which such Advance is made, and (iv) no Interest
Period in respect of any Advance shall extend beyond the Revolving Credit
Maturity Date.
"Internal Revenue Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time, and the regulations promulgated thereunder.
"Investment" shall mean, when used with respect to any Person, (a) any
loan, investment or advance made by such Person to any other Person (including,
without limitation, any contingent obligation) in respect of any capital stock,
Debt, obligation or liability of such other Person and (b) any other investment
made by such Person (however acquired) in stock or other ownership interests in
any other Person, including, without limitation, any investment made in exchange
for the issuance of shares of stock of such Person.
"Investor" shall mean any person or group of persons (within the meaning of
Rule 13d-3 promulgated by the SEC under the Securities Exchange Act of 1934, as
amended) who held beneficial ownership of at least 5% of the voting stock of the
Company, or who was a director or employee of the Company or its Subsidiaries,
or who was a shareholder of record of Wheel to Wheel, Inc., (in any such case)
on January 14, 2004, and any affiliate of any such person.
"Issuing Bank" shall mean Comerica Bank in its capacity as issuer of one or
more Letters of Credit hereunder, or its successor designated by the Company and
the Banks.
"Issuing Office" shall mean such office as Issuing Bank shall designate as
its Issuing Office.
"Letter of Credit Agreement" shall mean, in respect of each Letter of
Credit, the application and related documentation satisfactory to the Issuing
Bank of an Account Party or Account Parties requesting Issuing Bank to issue
such Letter of Credit, as amended from time to time.
"Letter of Credit Documents" is defined in Section 3.7.
"Letter of Credit Fees" shall mean the fees payable to Agent for the
accounts of the Banks in connection with Letters of Credit pursuant to Section
3.4(a) and (b) hereof.
"Letter of Credit Maximum Amount" shall mean Five Hundred Thousand Dollars
($500,000).
"Letter of Credit Obligations" shall mean at any date of determination, the
sum of (a) the aggregate undrawn amount of all Letters of Credit then
outstanding, (b) the aggregate face amount of all Letters of Credit requested
but not yet issued as of such date and (c) the aggregate amount of Reimbursement
Obligations which have not been reimbursed by the Company as of such date.
"Letter of Credit Payment" shall mean any amount paid or required to be
paid by the Issuing Bank in its capacity hereunder as issuer of a Letter of
Credit as a result of a draft or other demand for payment under any Letter of
Credit.
"Letter(s) of Credit" shall mean any standby letters of credit issued by
Issuing Bank at the request of or for the account of an Account Party or Account
Parties pursuant to Article 3 hereof.
"Leverage Ratio" shall mean as of any date of determination a ratio the
numerator of which is Debt of Company and its Consolidated Subsidiaries as of
such date and the denominator of which is Tangible Net Worth of Company and its
Consolidated Subsidiaries as of such date.
"Lien" shall mean any pledge, assignment, hypothecation, mortgage, security
interest, deposit arrangement, option, trust receipt, conditional sale or title
retaining contract, sale and leaseback transaction, Capitalized Lease, or any
other similar type of lien, charge, encumbrance, preferential or priority
arrangement, whether based on common law or statute.
"Loan Documents" shall mean, collectively, this Agreement, the Notes (if
issued), the Letter of Credit Agreements, the Letters of Credit, the Guaranties,
the Collateral Documents, any Bank Hedging Agreement and any other documents,
certificates, instruments or agreements executed or delivered pursuant to or in
connection with any such document or this Agreement, as such documents may be
amended or otherwise modified from time to time.
"Loan Parties" shall mean the Company and each Guarantor and "Loan Party"
shall mean any one of them, as the context indicates or otherwise requires.
"Majority Banks" shall mean (a) so long as the Revolving Credit Aggregate
Commitment is outstanding hereunder, at any time Banks holding not less than
66?% of the aggregate principal amount of the Revolving Credit Aggregate
Commitment and (b) if the Revolving Credit Aggregate Commitment has been
terminated, at any time Banks holding not less than 66?% of the aggregate
principal amount of Indebtedness then outstanding hereunder (provided that, for
purposes of determining Majority Banks hereunder, Indebtedness outstanding under
the Swing Line or under any Letter of Credit shall be allocated among the Banks
based on their respective Percentages).
"Material Adverse Effect" shall mean a material adverse effect on (a) the
business or financial condition of the Company and its Subsidiaries taken as a
whole, (b) the ability of the Company and the Guarantors to perform their
respective obligations under this Agreement when required to be performed,
including the Notes (if issued) or any other Loan Document to which either of
them is a party, or (c) the validity or enforceability of this Agreement, any of
the Notes (if issued) or any of the other Loan Documents or the rights or
remedies of the Agent or the Banks hereunder or thereunder.
"Merger" shall mean the merger of Wheel to Wheel, Inc. with and into Wheel
to Wheel Acquisition Company, LLC pursuant to the Transaction Documents with
Wheel to Wheel Acquisition Company, LLC as the survivor.
"Mortgage(s)" shall mean the mortgage(s) and deeds of trust of real
property owned by the Company or any Guarantor in form satisfactory to the Agent
(and containing customary local law provisions for comparable transactions) as
the case may be, executed and delivered as of the date hereof, or executed and
delivered after the Effective Date by the Company or any Guarantor pursuant to
Section 7.17 hereof, as such mortgages may be amended or otherwise modified from
time to time and "Mortgage" shall mean any of them.
"Multiemployer Plan" shall mean a Pension Plan which is a multiemployer
plan as defined in Section 4001(a)(3) of ERISA.
"Net Cash Proceeds" shall mean, with respect to any Asset Sale, the
aggregate cash payments received by the Company and/or any Guarantor, as the
case may be, from such Asset Sale, net of the reasonable direct expenses of sale
such as commissions and pro rated property taxes and net of any taxes actually
payable by the Company or such Guarantor in respect of such sales, taking into
account the Company's or such Guarantor's losses, if any, which are available
under applicable law to reduce such gains.
"Net Income" of any Person for any period of determination shall mean, the
net income of such Person as determined in accordance with GAAP.
"Non-Defaulting Bank" is defined in Section 2.4(c).
"Notes" shall mean the Revolving Credit Notes and the Swing Line Notes.
"Offering" shall mean a secondary offering of Company's stock which yields
gross proceeds to Company of $10,000,000 or more.
"Operating Lease" shall mean any lease (or other arrangement conveying the
right to use) or real or personal property, or any combination thereof, which
lease is not required to be classified as a Capitalized Lease in accordance with
GAAP.
"Overformula Amount" shall initially mean Four Million Five Hundred
Thousand Dollars ($4,500,000). Commencing February 1, 2004, and on the first day
of each month thereafter, the Overformula Amount shall automatically permanently
reduce by $187,500 until it is $0. Upon the consummation of an Offering, the
Overformula Amount shall be reduced to $0.
"Pension Plan" shall mean any plan established and maintained by the
Company or any Subsidiary which is qualified under Section 401(a) of the
Internal Revenue Code and subject to the minimum funding standards of Section
412 of the Internal Revenue Code.
"Percentage" shall mean with respect to each Bank, its percentage share, as
set forth on Schedule 1.2, as such Schedule may be revised from time to time by
Agent in accordance with Section 13.8.
"Permitted Acquisition" shall mean any acquisition by Company or a
Subsidiary of all or substantially all of the assets of another Person, or of a
division or line of business of another Person, or shares of stock or other
ownership interests of another Person, which is conducted in accordance with the
following requirements:
(a) Such acquisition is of a business or Person engaged in a line of
business which is compatible with, or complementary to, Company's
business, or is engaged in a business using systems or techniques not
unlike those of the Company;
(b) Company shall have delivered to Agent not less than fifteen (15) nor
more than ninety (90) days prior to the date of such acquisition,
notice of such acquisition together with pro forma projected financial
information acceptable to Agent;
(c) Both immediately before and after such acquisition no Default or Event
of Default shall have occurred and be continuing;
(d) The board of directors (or other Person(s) exercising similar
function(s) of the seller of the assets or issuer of the shares of
stock or other ownership interests being acquired) shall not have
disapproved such transaction or recommended that such transaction be
disapproved; and
(e) The total consideration paid for such acquisition (including the
assumption of debt) does not exceed Five Million Dollars ($5,000,000)
and the total consideration for all Permitted Acquisitions paid during
the terms of this Agreement does not exceed Ten Million Dollars
($10,000,000).
"Permitted Investments" shall mean with respect to any Person:
(a) Governmental Obligations;
(b) Obligations of a state of the United States, the District of Columbia
or any possession of the United States, or any political subdivision
thereof, which are described in Section 103(a) of the Internal Revenue
Code and are graded in any of the highest three (3) major grades as
determined by at least one Rating Agency; or secured, as to payments
of principal and interest, by a letter of credit provided by a
financial institution or insurance provided by a bond insurance
company which in each case is itself or its debt is rated in one of
the highest three (3) major grades as determined by at least one
Rating Agency;
(c) Banker's acceptances, commercial accounts, demand deposit accounts,
money market accounts, certificates of deposit, or depository receipts
issued by or maintained with any Bank or a bank, trust company,
savings and loan association, savings bank or other financial
institution whose deposits are insured by the Federal Deposit
Insurance Corporation and whose reported capital and surplus equal at
least $250,000,000, provided that such minimum capital and surplus
requirement shall not apply to demand deposit accounts maintained by
the Company or any of the Subsidiaries in the ordinary course of
business;
(d) Commercial paper rated at the time of purchase within the two highest
classifications established by not less than two Rating Agencies, and
which matures within 270 days after the date of issue;
(e) Secured repurchase agreements against obligations itemized in
paragraph (a) above, and executed by a bank or trust company or by
members of the association of primary dealers or other recognized
dealers in United States government securities, the market value of
which must be maintained at levels at least equal to the amounts
advanced; and
(f) Any fund or other pooling arrangement which exclusively purchases and
holds the investments itemized in (a) through (e) above.
"Permitted Liens" shall mean with respect to any Person:
(a) liens for taxes not yet due and payable or which are being contested
in good faith by appropriate proceedings diligently pursued, provided
that provision for the payment of all such taxes has been made on the
books of such Person as may be required by GAAP;
(b) mechanics', materialmen's, banker's, carriers', warehousemen's and
similar liens and encumbrances arising in the ordinary course of
business and securing obligations of such Person that are not overdue
for a period of more than 60 days or are being contested in good faith
by appropriate proceedings diligently pursued, provided that in the
case of any such contest (i) any proceedings commenced for the
enforcement of such liens and encumbrances shall have been duly
suspended; and (ii) such provision for the payment of such liens and
encumbrances has been made on the books of such Person as may be
required by GAAP;
(c) liens arising in connection with worker's compensation, unemployment
insurance, old age pensions and social security benefits and similar
statutory obligations which are not overdue or are being contested in
good faith by appropriate proceedings diligently pursued, provided
that in the case of any such contest (i) any proceedings commenced for
the enforcement of such liens shall have been duly suspended; and (ii)
such provision for the payment of such liens has been made on the
books of such Person as may be required by GAAP;
(d) (i) liens incurred in the ordinary course of business to secure the
performance of statutory obligations arising in connection with
progress payments or advance payments due under contracts with the
United States government or any agency thereof entered into in the
ordinary course of business and (ii) liens incurred or deposits made
in the ordinary course of business to secure the performance of
statutory obligations, bids, leases, fee and expense arrangements with
trustees and fiscal agents and other similar obligations (exclusive of
obligations incurred in connection with the borrowing of money, any
lease-purchase arrangements or the payment of the deferred purchase
price of property), provided that full provision for the payment of
all such obligations set forth in clauses (i) and (ii) has been made
on the books of such Person as may be required by GAAP;
(e) minor survey exceptions or minor encumbrances, easements or
reservations, or rights of others for rights-of-way, utilities and
other similar purposes, or zoning or other restrictions as to the use
of real properties, which do not materially interfere with the
business of such Person;
(f) attachment, judgment and other similar non-tax liens arising in
connection with court proceedings, but only if and for so long as the
execution or other enforcement of such liens is and continues to be
effectively stayed and bonded on appeal in a manner satisfactory to
Bank for the full amount thereof, the validity and amount of the
claims secured thereby are being actively contested in good faith and
by appropriate lawful proceedings, appropriate reserves are
established with respect to such liens, such liens do not materially
impair the operation of the Company's business, and such liens are and
remain junior in priority to the liens in favor of the Bank; and
(g) interests of lessors in leased equipment, including filings for
notification purposes.
"Person" shall mean a natural person, corporation, limited liability
company, partnership, limited liability partnership, trust, incorporated or
unincorporated organization, joint venture, joint stock company, or a government
or any agency or political subdivision thereof or other entity of any kind.
"Potential Financial Institution" is defined in Section 2.4(c).
"Prime-based Advance" shall mean an Advance which bears interest at the
Prime-based Rate.
"Prime-based Rate" shall mean, for any day, that rate of interest which is
equal to the greater of (i) the Prime Rate, plus or minus, as applicable, the
Applicable Margin, and (ii) the Alternate Base Rate.
"Prime Rate" shall mean the per annum rate of interest announced by the
Agent, at its main office from time to time as its "prime rate" (it being
acknowledged that such announced rate may not necessarily be the lowest rate
charged by the Agent to any of its customers), which Prime Rate shall change
simultaneously with any change in such announced rate.
"Purchasing Bank" shall have the meaning set forth in Section 11.7.
"Quoted Rate" shall mean the rate of interest per annum offered by the
Swing Line Bank in its sole discretion with respect to a Swing Line Advance.
"Quoted Rate Advance" means any Swing Line Advance which bears interest at
the Quoted Rate.
"Rating Agency" shall mean Xxxxx'x Investor Services, Inc., Standard and
Poor's Ratings Services, their respective successors or any other nationally
recognized statistical rating organization which is acceptable to the Agent.
"Register" is defined in Section 13.8(f) hereof.
"Reimbursement Obligation(s)" shall mean the aggregate amount of all
unreimbursed drawings under all Letter of Credit Agreements (excluding for the
avoidance of doubt, amounts deemed to have been advanced under Section 3.6(a))
together with all other sums, fees, charges and amounts which may be owing to
the Issuing Bank under such Letter of Credit Agreement or this Agreement
relating to Letters of Credit.
"Request for Advance" shall mean a Request for Revolving Credit Advance or
a Request for Swing Line Advance, as the context may indicate, or otherwise
require.
"Request for Revolving Credit Advance" shall mean a request for a Revolving
Credit Advance issued by the Company under Section 2.3 of this Agreement in the
form annexed hereto as Exhibit A, as amended or otherwise modified in accordance
with the terms hereof.
"Request for Swing Line Advance" shall mean a request for a Swing Line
Advance issued by the Company under Section 2.5(c) of this Agreement in the form
attached hereto as Exhibit D, as amended or otherwise modified in accordance
with the terms of this Agreement.
"Requirement of Law" shall mean as to any Person, the certificate of
incorporation and bylaws, the partnership agreement or other organizational or
governing documents of such Person and any law, treaty, rule or regulation or
determination of an arbitration 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.
"Responsible Officer" shall mean the chief executive officer, chief
financial officer, treasurer or the president of the Company, or with respect to
compliance with financial covenants, the chief financial officer or the
treasurer of the Company or any other officer having substantially the same
authority and responsibility.
"Revolving Credit" shall mean the revolving credit loans to be advanced to
the Company by the applicable Banks pursuant to Article 2 hereof, in an
aggregate amount (subject to the terms hereof), not to exceed, at any one time
outstanding, the Revolving Credit Aggregate Commitment.
"Revolving Credit Advance" shall mean a borrowing requested by the Company
and made by the Banks under Section 2.1 of this Agreement, including without
limitation any readvance, refunding or conversion of such borrowing pursuant to
Section 2.3 hereof and any advance in respect of a Letter of Credit under
Section 3.6(a) hereof, and shall include, as applicable, a Eurocurrency-based
Advance and/or a Prime-based Advance.
"Revolving Credit Aggregate Commitment" shall mean Thirty Million Dollars
($30,000,000), subject to reduction or termination under Section 2.13 or 9.2
hereof.
"Revolving Credit Commitment Fee" shall mean the fees payable to Agent for
distribution to the Banks pursuant to Section 2.12 hereof.
"Revolving Credit Maturity Date" shall mean the earlier to occur of either
(i) April 1, 2006 or (ii) the date on which the Revolving Credit Aggregate
Commitment shall terminate in accordance with the provisions of this Agreement.
"Revolving Credit Notes" shall mean the revolving credit notes described in
Section 2.2 hereof, made by the Company to each of the Banks in the form annexed
to this agreement as Exhibit B, as such notes may be amended or supplemented
from time to time, and any other notes issued in substitution, replacement or
renewal thereof from time to time.
"Security Agreement" shall mean the Security Agreement substantially in the
form of the Security Agreement annexed hereto as Exhibit K executed and
delivered by the Company and the Guarantors in favor of the Agent, as amended or
otherwise modified from time to time.
"Special Dividend" shall mean a distribution from a Subsidiary to Wheel to
Wheel, Inc. and redistribution by Wheel to Wheel, Inc. to the shareholders of
Wheel to Wheel, Inc. to be made on or about January 15, 2004 in an aggregate
amount not exceeding $4,500,000.
"Subordination Agreement" shall mean any subordination agreement entered
into from time to time between Agent, for and on behalf of the Banks, and any
holder of Subordinated Debt, to evidence the subordination of such Subordinated
Debt to the Indebtedness hereunder, as each such subordination agreement may be
amended from time to time.
"Subordinated Debt" shall mean any Debt of the Company which has been
subordinated in right of payment and priority to the Indebtedness, all on terms
and conditions satisfactory to the Agent and the Majority Banks.
"Subordinated Debt Documents" shall mean and include any documents
evidencing any Subordinated Debt, in each case, as the same may be amended,
modified or supplemented from time to time in compliance with the terms of this
Agreement.
"Subordinated Notes" shall mean any notes or instruments evidencing
Subordinated Debt as the same may be amended, modified or supplemented from time
to time in compliance with the terms of this Agreement.
"Subsidiary(ies)" shall mean any other corporation, association, joint
stock company, business trust, limited liability company or any other business
entity of which more than fifty percent (50%) of the outstanding voting stock,
share capital, membership or other interests, as the case may be, is owned
either directly or indirectly by any Person or one or more of its Subsidiaries,
or the management of which is otherwise controlled, directly, or indirectly
through one or more intermediaries, or both, by any Person and/or its
Subsidiaries. Unless otherwise specified to the contrary herein or the context
otherwise requires, Subsidiary(ies) shall refer to each Person which is a
Subsidiary of the Company.
"Swing Line" shall mean the revolving credit loans to be advanced to the
Company by the Swing Line Bank pursuant to Section 2.5 hereof, in an aggregate
amount (subject to the terms hereof), not to exceed, at any one time
outstanding, the Swing Line Maximum Amount.
"Swing Line Advance" shall mean a borrowing made by Swing Line Bank to the
Company pursuant to Section 2.5 hereof.
"Swing Line Bank" shall mean Comerica Bank in its capacity as lender under
Section 2.5 of this Agreement or its successor as lender of the Swing Line.
"Swing Line Maximum Amount" shall mean Five Million Dollars ($5,000,000).
"Swing Line Notes" shall mean the swing line notes which may be issued by
the Company at the request of Swing Line Bank pursuant to Section 2.5(a) hereof
in the form annexed hereto as Exhibit C, as the case may be, as such Notes may
be amended or supplemented from time to time, and any notes issued in
substitution, replacement or renewal thereof from time to time.
"Tangible Net Worth" shall mean, as of any applicable date of
determination, the excess of (i) the net book value of all assets of Company and
its Consolidated Subsidiaries (other than receivables due from officers,
employees and other affiliated parties and patents, patent rights, trademarks,
trade names, franchises, copyrights, licenses, goodwill, deferred expenses,
covenants not to compete and similar intangible assets) after all appropriate
deductions in accordance with GAAP (including, without limitation, reserves for
doubtful receivables, obsolescence, depreciation and amortization), over (ii)
all Debt of Company and its Consolidated Subsidiaries.
"Transaction" shall mean the transaction series of transactions pursuant to
which Company acquires, directly or indirectly, one hundred percent of the
Equity Interests in Wheel to Wheel, Inc. and Wheel to Wheel, Inc. pays the
Special Dividend.
"Transaction Documents" shall mean the Agreement and Plan of Merger by and
among Wheel to Wheel, Inc., Wheel to Wheel Acquisition Company, LLC, company and
certain shareholders effective October 29, 2003, together with all other
documents and instruments executed and delivered in connection with the
Transaction.
2. REVOLVING CREDIT
2.1 Commitment. Subject to the terms and conditions of this Agreement
(including without limitation Section 2.3 hereof), each Bank severally and for
itself alone agrees to make Advances of the Revolving Credit in Dollars to the
Company from time to time on any Business Day during the period from the
Effective Date hereof until (but excluding) the Revolving Credit Maturity Date
in an aggregate amount, not to exceed at any one time outstanding such Bank's
Revolving Credit Percentage of the Revolving Credit Aggregate Commitment.
Subject to the terms and conditions set forth herein, advances, repayments and
readvances may be made under the Revolving Credit.
2.2 Accrual of Interest and Maturity; Evidence of Indebtedness. (a) The
Company hereby unconditionally promises to pay to the Agent for the account of
each Bank the then unpaid principal amount of each Revolving Credit Advance
(plus all accrued and unpaid interest) of such Bank to the Company on the
Revolving Credit Maturity Date and on such other dates and in such other amounts
as may be required from time to time pursuant to this Agreement.
(a) Each Bank shall maintain in accordance with its usual practice an
account or accounts evidencing indebtedness of the Company to the
appropriate lending office of such Bank resulting from each Revolving
Credit Advance made by such lending office of such Bank from time to
time, including the amounts of principal and interest payable thereon
and paid to such Bank from time to time under this Agreement.
(b) The Agent shall maintain the Register pursuant to Section 13.8(f), and
a subaccount therein for each Bank, in which Register and subaccounts
(taken together) shall be recorded (i) the amount of each Revolving
Credit Advance made hereunder, the type thereof and each Interest
Period applicable to any Eurocurrency-based Advance, (ii) the amount
of any principal or interest due and payable or to become due and
payable from the Company to each Bank hereunder in respect of the
Revolving Credit Advances and (iii) both the amount of any sum
received by the Agent hereunder from the Company in respect of the
Revolving Credit Advances and each Bank's share thereof.
(c) The entries made in the Register and the accounts of each Bank
maintained pursuant to paragraphs (b) and (c) of this Section 2.1
shall absent manifest error, to the extent permitted by applicable
law, be conclusive evidence of the existence and amounts of the
obligations of the Company therein recorded; provided, however, that
the failure of any Bank or the Agent to maintain the Register or any
such account, as applicable, or any error therein, shall not in any
manner affect the obligation of the Company to repay the Revolving
Credit Advances (and all other amounts owing with respect thereto)
made to the Company by the Banks in accordance with the terms of this
Agreement.
(d) The Company agrees that, upon written request to the Agent (with a
copy to the Company) by any Bank, the Company will execute and
deliver, to such Bank, at Company's own expense, a Note evidencing the
outstanding Revolving Credit Advances owing to such Bank.
2.3 Requests for and Refundings and Conversions of Advances. The Company
may request an Advance of the Revolving Credit, refund any such Advance in the
same type of Advance or convert any such Advance to any other type of Advance of
the Revolving Credit only after delivery to Agent of a Request for Revolving
Credit Advance executed by a person previously authorized (in a writing
delivered to the Agent) by the Company to execute such Request, subject to the
following:
(a) each such Request for Revolving Credit Advance shall set forth the
information required on the Request for Revolving Credit Advance form
annexed hereto as Exhibit A, including without limitation:
(i) the proposed date of such Advance, which must be a Business Day;
(ii) whether such Advance is a refunding or conversion of an
outstanding Advance; and
(iii)whether such Advance is to be a Prime-based Advance or a
Eurocurrency-based Advance, and, except in the case of a
Prime-based Advance, the first Interest Period applicable
thereto.
(b) each such Request for Revolving Credit Advance shall be delivered to
Agent by 1:00 p.m. (Detroit time) three (3) Business Days prior to the
proposed date of Advance, except in the case of a Prime-based Advance,
for which the Request for Advance must be delivered by 11:00 a.m.
(Detroit time) on such proposed date for Advances;
(c) on the proposed date of such Advance, after giving effect to all
Advances and Letters of Credit requested by the Company on such date
(including, without duplication, the deemed Advances funded by Agent
under Section 3.6(a) hereof in respect of the Company's or an
applicable Account Party's reimbursement obligation hereunder), the
sum of (x) the aggregate principal amount of all Advances of the
Revolving Credit and of the Swing Line requested or outstanding on
such date plus (y) the Letter of Credit Obligations as of such date,
shall not exceed the lesser of the then applicable (i) Borrowing Base
and (ii) Revolving Credit Aggregate Commitment;
provided however, that, in the case of any Advance being applied
to refund or convert an outstanding Advance, the aggregate
principal amount of such Advances to be refunded or converted
shall not be included for purposes of calculating availability
under this Section 2.3(c);
(d) in the case of a Prime-based Advance, the principal amount of the
initial funding of such Advance, as opposed to any refunding or
conversion thereof, shall be at least $500,000;
(e) in the case of a Eurocurrency-based Advance, the principal amount of
such Advance, plus the amount of any other outstanding Advance of the
Revolving Credit to be then combined therewith having the same
Applicable Interest Rate and Interest Period, if any, shall be at
least $1,000,000 (or a larger integral multiples of $500,000) and at
any one time there shall not be in effect more than 3
Eurocurrency-based Rates and Eurocurrency-Interest Periods;
(f) a Request for Revolving Credit Advance, once delivered to Agent, shall
not be revocable by the Company;
(g) each Request for Revolving Credit Advance shall constitute a
certification by the Company, as of the date thereof that:
(i) both before and after such Advance, the obligations of the Loan
Parties set forth in this Agreement and the other Loan Documents
to which such Persons are parties are valid, binding and
enforceable obligations of such Loan Parties;
(ii) all conditions to Advances of the Revolving Credit have been
satisfied, and shall remain satisfied to the date of such Advance
(both before and after giving effect to such Advance);
(iii)there is no Default or Event of Default in existence, and none
will exist upon the making of such Advance (both before and after
giving effect to such Advance);
(iv) the representations and warranties contained in this Agreement
and the other Loan Documents are true and correct in all material
respects and shall be true and correct in all material respects
as of the making of such Advance (both before and after giving
effect to such Advance), other than any representation or
warranty that expressly speaks only as of a different date; and
(v) the execution of such Request for Advance will not violate the
material terms and conditions of any material contract, agreement
or other borrowing of the Company.
Agent, acting on behalf of the Banks, may, at its option, lend under this
Section 2.3 upon the telephone request of a person previously authorized
(in a writing delivered to the Agent) by the Company to make such requests
and, in the event Agent, acting on behalf of the Banks, makes any such
Advance upon a telephone request, the requesting officer shall fax to
Agent, on the same day as such telephone request, a Request for Advance.
The Company hereby authorizes Agent to disburse Advances under this Section
2.3 pursuant to the telephone instructions of any person purporting to be a
person identified by name on a written list of persons authorized by the
Company and delivered to Agent prior to the date of such request to make
Requests for Advance on behalf of the Company. Notwithstanding the
foregoing, the Company acknowledges that the Company shall bear all risk of
loss resulting from disbursements made upon any telephone request. Each
telephone request for an Advance shall constitute a certification of the
matters set forth in the Request for Revolving Credit Advance form as of
the date of such requested Advance.
2.4 Disbursement of Advances.
(a) Upon receiving any Request for Revolving Credit Advance from the
Company under Section 2.3 hereof, Agent shall promptly notify each
Bank by wire, telex or telephone (confirmed by wire, telecopy or
telex) of the amount of such Advance to be made and the date such
Advance is to be made by said Bank pursuant to its Percentage of such
Advance. Unless such Bank's commitment to make Advances of the
Revolving Credit hereunder shall have been suspended or terminated in
accordance with this Agreement, each such Bank shall make available
the amount of its Percentage of each Advance in immediately available
funds to Agent, as follows:
(i) for Domestic Advances, at the office of Agent located at Xxx
Xxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx 00000, not later than 3:00 p.m.
(Detroit time) on the date of such Advance; and
(ii) for Eurocurrency-based Advances, at the Agent's Correspondent for
the account of the Eurocurrency Lending Office of the Agent, not
later than 12 noon (the time of the Agent's Correspondent) on the
date of such Advance.
(b) Subject to submission of an executed Request for Revolving Credit
Advance by the Company without exceptions noted in the compliance
certification therein, Agent shall make available to the Company, the
aggregate of the amounts so received by it from the Banks in like
funds and currencies:
(i) for Domestic Advances, not later than 4:00 p.m. (Detroit time) on
the date of such Advance by credit to an account of Company
maintained with Agent or to such other account or third party as
Company may reasonably direct; and
(ii) for Eurocurrency-based Advances, not later than 4:00 p.m. (the
time of the Agent's Correspondent) on the date of such Advance,
by credit to an account of the Company maintained with Agent's
Correspondent or to such other account or third party as the
Company may reasonably direct.
(c) Agent shall deliver the documents and papers received by it for the
account of each Bank to such Bank or upon its order. Unless Agent
shall have been notified by any Bank prior to the date of any proposed
Revolving Credit Advance that such Bank does not intend to make
available to Agent such Bank's Percentage of such Advance, Agent may
assume that such Bank has made such amount available to Agent on such
date, as aforesaid and may, in reliance upon such assumption, make
available to the Company a corresponding amount. If such amount is not
in fact made available to Agent by such Bank, as aforesaid, Agent
shall be entitled to recover such amount on demand from such Bank. If
such Bank does not pay such amount forthwith upon Agent's demand
therefor and the Agent has in fact made a corresponding amount
available to the Company, the Agent shall promptly notify the Company
and the Company shall pay such amount to Agent, if such notice is
delivered to the Company prior to 1:00 p.m. (Detroit time) on a
Business Day, on the day such notice is received, and otherwise on the
next Business Day. Agent shall also be entitled to recover from such
Bank or the Company, as the case may be, but without duplication,
interest on such amount in respect of each day from the date such
amount was made available by Agent to the Company, to the date such
amount is recovered by Agent, at a rate per annum equal to:
(i) in the case of such Bank, for the first two (2) Business Days
such amount remains unpaid, with respect to Domestic Advances,
the Federal Funds Effective Rate, and with respect to
Eurocurrency-based Advances, Agent's aggregate marginal cost
(including the cost of maintaining any required reserves or
deposit insurance and of any fees, penalties, overdraft charges
or other costs or expenses incurred by Agent as a result of such
failure to deliver funds hereunder) of carrying such amount and
thereafter, at the rate of interest then applicable to such
Revolving Credit Advances; and
(ii) in the case of Company, the rate of interest then applicable to
such Advance of the Revolving Credit.
The obligation of any Bank to make any Advance of the Revolving Credit
hereunder shall not be affected by the failure of any other Bank to make
any Advance hereunder, and no Bank shall have any liability to the Company
or any of its Subsidiaries, the Agent, any other Bank, or any other party
for another Bank's failure to make any loan or Advance hereunder. In the
event any Bank shall fail to advance any amounts required to be advanced in
accordance with the terms of this Article 2 (a "Defaulting Bank"), the
Agent shall promptly provide written notice thereof to the Company and to
each other Bank (each such other Bank being referred to in this Section as
a "Non-Defaulting Bank"). Each Non-Defaulting Bank shall have ten (10)
Business Days from receipt of said notice to exercise its option to agree
to enter into an agreement pursuant to which the Non-Defaulting Bank shall
assume the Defaulting Bank's rights and obligations under this Agreement,
its Notes and the other Loan Documents. The Non-Defaulting Bank shall
exercise such option by providing written notice of same to the Defaulting
Bank (and if there is more than one Non-Defaulting Bank, the assignment
agreement shall be entered into with the Non-Defaulting Bank who first
notifies the Defaulting Bank of its decision to exercise said option) and
to the Company. If no Non-Defaulting Bank shall exercise the
above-described option within the said ten (10) Business Day period and if
the Company shall, subject to Section 13.8(c) hereof, within sixty (60)
days of delivering the notice described above, advise such Defaulting Bank
of another bank or financial institution to which assignments are permitted
pursuant to Section 13.8(c) hereof and which is willing to assume such
Defaulting Bank's rights and obligations under this Agreement, its Notes
and the other Loan Documents (each such bank or financial institution being
hereinafter referred to as a "Potential Financial Institution"), such
Defaulting Bank shall, subject to Section 13.8(c), assign its said rights
and obligations to the Potential Financial Institution; provided however
that any such assignment shall not alter the Company's remedies vis a vis
the Defaulting Bank.
2.5 Swing Line Advances. The Swing Line Bank shall, on the terms and
subject to the conditions hereinafter set forth (including without limitation
Section 2.5(c) hereof), make one or more advances (each such advance being a
"Swing Line Advance") to the Company, from time to time on any Business Day
during the period from the date hereof to (but excluding) the Revolving Credit
Maturity Date in an amount not to exceed in the aggregate at any time
outstanding the Swing Line Maximum Amount. Swing Line Bank shall maintain in
accordance with its usual practice an account or accounts evidencing
indebtedness of the Company to Swing Line Bank resulting from each Swing Line
Advance of such Bank from time to time, including the amounts of principal and
interest payable thereon and paid to such Bank from time to time. The entries
made in such account or accounts of Swing Line Bank shall, to the extent
permitted by applicable law, be conclusive evidence, absent manifest error, of
the existence and amounts of the obligations of the Company therein recorded;
provided, however, that the failure of Swing Line Bank to maintain such account,
as applicable, or any error therein, shall not in any manner affect the
obligation of the Company to repay the Swing Line Advances (and all other
amounts owing with respect thereto) made to Company by Swing Line Bank in
accordance with the terms of this Agreement. Advances, repayments and readvances
under the Swing Line may be made, subject to the terms and conditions of this
Agreement. Each Swing Line Advance shall mature and the principal amount thereof
shall be due and payable by the Company in the case of any Quoted Rate Advance,
on the last day of the Interest Period applicable thereto (if any) and, in the
case of any Prime-based Advance, on the Revolving Credit Maturity Date.
The Company agrees that, upon the written request of Swing Line Bank, the
Company will execute and deliver to Swing Line Bank a Swing Line Note; provided,
that the delivery of such Swing Line Note shall not be a condition precedent to
the Effective Date.
(a) Accrual of Interest. Each Swing Line Advance shall, from time to time
after the date of such Advance, bear interest at its Applicable
Interest Rate. The amount and date of each Swing Line Advance, its
Applicable Interest Rate, its Interest Period, if any, and the amount
and date of any repayment shall be noted on Swing Line Bank's account
maintained pursuant to Section 2.5(a), which records will be
conclusive evidence thereof, absent manifest error; provided, however,
that any failure by the Swing Line Bank to record any such information
shall not relieve the Company of its obligation to repay the
outstanding principal amount of such Advance, all interest accrued
thereon and any amount payable with respect thereto in accordance with
the terms of this Agreement and the other Loan Documents.
(b) Requests for Swing Line Advances. The Company may request a Swing Line
Advance only after the delivery to Swing Line Bank of a Request for
Swing Line Advance executed by a person authorized (in a writing a
copy of which has been previously delivered to the Agent) by the
Company to make such requests, subject to the following:
(i) each such Request for Swing Line Advance shall set forth the
information required on the Request for Advance form annexed
hereto as Exhibit D, including without limitation:
(A) the proposed date of such Swing Line Advance, which must be
a Business Day;
(B) whether such Swing Line Advance is to be a Prime-based
Advance or a Quoted Rate Advance; and
(C) in the case of a Quoted Rate Advance, the duration of the
Interest Period applicable thereto.
(ii) on the proposed date of such Swing Line Advance, after giving
effect to all Swing Line Advances requested by the Company on
such date of determination, the aggregate principal amount of all
Swing Line Advances outstanding on such date shall not exceed the
Swing Line Maximum Amount.
(iii)on the proposed date of such Swing Line Advance, after giving
effect to all Advances and Letters of Credit requested by the
Company on such date (including, without duplication, deemed
Advances made under Section 3.6(a) hereof in respect of the
Company's or an applicable Account Party's reimbursement
obligation hereunder) of determination, the sum of (x) the
aggregate principal amount of all Advances of the Revolving
Credit and of the Swing Line requested or outstanding on such
date plus (y) the Letter of Credit Obligations on such date shall
not exceed the lesser of the then applicable Revolving Credit
Aggregate Commitment and the Borrowing Base;
(iv) in the case of a Swing Line Advance that is a Prime-based
Advance, the principal amount of the initial funding of such
Advance, as opposed to any refunding or conversion thereof, shall
be at least Fifty Thousand Dollars ($50,000) or such lesser
amount as agreed to by Agent from time to time.
(v) in the case of a Swing Line Advance that is a Quoted Rate
Advance, the principal amount of such Advance plus any other
outstanding Advances of the Swing Line to be then combined
therewith having the same Applicable Interest Rate and Interest
Period, if any, shall be at least Fifty Thousand Dollars
($50,000) (or a larger integral multiple of Ten Thousand Dollars
($10,000) or such lesser amount as agreed to by Agent from time
to time, and at any one time there shall not be in effect more
than 2 Applicable Interest Rates and Interest Periods;
(vi) each such Request for Swing Line Advance shall be delivered to
the Swing Line Bank by 1:00 p.m. (Detroit time) on the proposed
date of the Advance;
(vii)each Request for Swing Line Advance, once delivered to Swing
Line Bank, shall be irrevocable by the Company, and shall
constitute and include a certification by the Company as of the
date thereof that:
(A) both before and after making such Swing Line Advance, the
obligations of the Loan Parties set forth in this Agreement
and the other Loan Documents, are valid, binding and
enforceable obligations of such Loan Parties;
(B) all conditions to the making of Swing Line Advances have
been satisfied (both before and after giving effect to such
Advance);
(C) both before and after giving effect to such Swing Line
Advance, there is no Default or Event of Default in
existence; and
(D) both before and after giving effect to such Swing Line
Advance, the representations and warranties contained in
this Agreement and the other Loan Documents are true and
correct in all material respects, other than any
representation or warranty that expressly speaks only as of
a different date.
Swing Line Bank, may, at its option, lend under this Section 2.5(c) upon
the telephone request of an authorized officer of Company and, in the event
Swing Line Bank makes any such Advance upon a telephone request, the requesting
officer shall, if so requested by Swing Line Bank, fax to Swing Line Bank, on
the same day as such telephone request, a Request for Swing Line Advance.
Company hereby authorizes Swing Line Bank to disburse Advances under this
Section 2.5(c) pursuant to the telephone instructions of any person purporting
to be a person identified by name on a written list of persons authorized by the
Company to make Requests for Advance on behalf of the Company. Notwithstanding
the foregoing, the Company acknowledges that Company shall bear all risk of loss
resulting from disbursements made upon any telephone request. Each telephone
request for an Advance shall constitute a certification of the matters set forth
in the Request for Swing Line Advance form as of the date of such requested
Advance. Swing Line Bank shall promptly deliver to Agent by telecopy a copy of
any Request for Advance received hereunder.
(c) Disbursement of Swing Line Advances. Subject to submission of an
executed Request for Swing Line Advance by the Company without
exceptions noted in the compliance certification therein, Swing Line
Bank shall make available to the Company the amount so requested, in
like funds and currencies, not later than 4:00 p.m. (Detroit time) on
the date of such Advance by credit to an account of the Company
maintained with Agent or to such other account or third party as the
Company may reasonably direct in writing.
Swing Line Bank shall promptly notify Agent of any Swing Line Advance by
telephone, telex or telecopier.
(d) Refunding of or Participation Interest in Swing Line Advances.
(i) The Agent, at any time in its sole and absolute discretion, may,
in each case on behalf of the Company (which hereby irrevocably
directs the Agent to act on its behalf) request each of the Banks
(including the Swing Line Bank in its capacity as a Bank) to make
an Advance of the Revolving Credit to the Company, in an amount
equal to such Bank's Percentage of the principal amount of the
aggregate Swing Line Advances outstanding on the date such notice
is given (the "Refunded Swing Line Advances"); provided however
that Swing Line Advances which are carried at the Quoted Rate
which are converted to Revolving Credit Advances at the request
of the Agent at a time when no Default or Event of Default has
occurred and is continuing, shall not be subject to Section 11.1
and no losses, costs or expenses may be assessed by the Swing
Line Bank against the Company or the Banks as a consequence of
such conversion. In the case of each Refunded Swing Line Advance
the applicable Advance of the Revolving Credit used to refund
such Swing Line Advance shall be a Prime-based Advance. In
connection with the making of any such Refunded Swing Line
Advances or the purchase of a participation interest in Swing
Line Advances under Section 2.5(e)(ii) hereof, the Swing Line
Bank shall retain its claim against the Company for any unpaid
interest or fees in respect thereof accrued to the date of such
refunding. Unless any of the events described in Section 9.1(j)
hereof shall have occurred (in which event the procedures of
subparagraph (ii) of this Section 2.5(e) shall apply) and
regardless of whether the conditions precedent set forth in this
Agreement to the making of an Advance of the Revolving Credit are
then satisfied but subject to Section 2.5(e)(iii), each Bank
shall make the proceeds of its Advance of the Revolving Credit
available to the Agent for the benefit of the Swing Line Bank at
the office of the Agent specified in Section 2.4(a) hereof prior
to 11:00 a.m. Detroit time (for Domestic Advances) on the
Business Day next succeeding the date such notice is given, in
immediately available funds. The proceeds of such Advances of the
Revolving Credit shall be immediately applied to repay the
Refunded Swing Line Advances in accordance with the provisions of
Section 10.1 hereof.
(ii) If, prior to the making of an Advance of the Revolving Credit
pursuant to subparagraph (i) of this Section 2.5(e), one of the
events described in Section 9.1(j) hereof shall have occurred,
each Bank will, on the date such Advance of the Revolving Credit
was to have been made, purchase from the Swing Line Bank an
undivided participating interest in each Swing Line Advance that
was to have been refunded in an amount equal to its Percentage of
such Swing Line Advance. Each Bank within the time periods
specified in Section 2.5(e)(i) hereof, as applicable, shall
immediately transfer to the Agent, in immediately available
funds, the amount of its participation and upon receipt thereof
the Agent will deliver to such Bank a Swing Line Participation
Certificate in the form of Exhibit E evidencing such
participation.
(iii)Each Bank's obligation to make Advances of the Revolving Credit
and to purchase participation interests in accordance with
clauses (i) and (ii) of this Section 2.5(e) shall be absolute and
unconditional and shall not be affected by any circumstance,
including, without limitation, (i) any set-off, counterclaim,
recoupment, defense or other right which such Bank may have
against Swing Line Bank, the Company or any other Person for any
reason whatsoever; (ii) the occurrence or continuance of any
Default or Event of Default; (iii) any adverse change in the
condition (financial or otherwise) of the Company or any other
Person; (iv) any breach of this Agreement by the Company or any
other Person; (v) any inability of the Company to satisfy the
conditions precedent to borrowing set forth in this Agreement on
the date upon which such Advance is to be made or such
participating interest is to be purchased; (vi) the termination
of the Revolving Credit Aggregate Commitment hereunder; or (vii)
any other circumstance, happening or event whatsoever, whether or
not similar to any of the foregoing. If any Bank does not make
available to the Agent the amount required pursuant to clause (i)
or (ii) above, as the case may be, the Agent shall be entitled to
recover such amount on demand from such Bank, together with
interest thereon for each day from the date of non-payment until
such amount is paid in full (x) for the first two (2) Business
Days such amount remains unpaid, at the Federal Funds Effective
Rate and (y) thereafter, at the rate of interest then applicable
to such Swing Line Advances. The obligation of any Bank to make
available its pro rata portion of the amounts required pursuant
to clause (i) or (ii) above shall not be affected by the failure
of any other Bank to make such amounts available, and no Bank
shall have any liability to the Company and its Subsidiaries, the
Agent, the Swing Line Bank, or any other Bank or any other party
for another Bank's failure to make the amounts required under
clause (i) or (ii) available.
2.6 Prime-based Interest Payments. Interest on the unpaid balance of all
Prime-based Advances of the Revolving Credit and all Swing Line Advances carried
at the Prime-based Rate from time to time outstanding shall accrue from the date
of such Advance to the date repaid, at a per annum interest rate equal to the
Prime-based Rate, and shall be payable in immediately available funds commencing
on the first day of the month next succeeding the month during which the initial
Advance of the Revolving Credit or Swing Line Advance, as the case may be, is
made and on the first day of each month thereafter. Interest accruing at the
Prime-based Rate shall be computed on the basis of a 360 day year and assessed
for the actual number of days elapsed, and in such computation effect shall be
given to any change in the interest rate resulting from a change in the
Prime-based Rate on the date of such change in the Prime-based Rate.
2.7 Eurocurrency-based Interest Payments and Quoted Rate Interest Payments.
(a) Interest on each Eurocurrency-based Advance of the Revolving Credit
shall accrue at its Eurocurrency-based Rate and shall be payable in
immediately available funds on the last day of the Interest Period
applicable thereto, provided that if such Interest Period is longer
than three (3) months, interest shall be payable at three (3) month
intervals and on the last day of the Interest Period. Interest
accruing at the Eurocurrency-based Rate shall be computed on the basis
of a 360 day year and assessed for the actual number of days elapsed
from the first day of the Interest Period applicable thereto to but
not including the last day thereof.
(b) Interest on each Quoted Rate Advance of the Swing Line shall accrue at
its Quoted Rate and shall be payable in immediately available funds on
the last day of the Interest Period applicable thereto. Interest
accruing at the Quoted Rate shall be computed on the basis of a 360
day year and assessed for the actual number of days elapsed from the
first day of the Interest Period applicable thereto to, but not
including the last day thereof.
2.8 Interest Payments on Conversions. Notwithstanding anything to the
contrary in the preceding sections, all accrued and unpaid interest on any
Advance refunded or converted pursuant to Section 2.3 or 2.5(e) hereof (except
for refundings or conversions of Prime-based Advances) shall be due and payable
in full on the date such Advance is refunded or converted.
2.9 Interest on Default. In the event and so long as any Event of Default
shall exist, in the case of any Event of Default under Sections 9.1(a) or
9.1(j), immediately upon the occurrence thereof, and in the case of all other
Events of Default, upon notice from the Majority Banks, interest shall be
payable on demand on all Eurocurrency-based Advances of the Revolving Credit and
Quoted Rate Advances from time to time outstanding (and, to the extent
delinquent, on all other monetary obligations of Company hereunder and under the
other Loan Documents) at a per annum rate equal to the Applicable Interest Rate
in respect of each such Advance plus, in the case of Eurocurrency-based
Advances, three percent (3%) for the remainder of the then existing Interest
Period, if any, and at all other such times and for all Prime-based Advances
from time to time outstanding, at a per annum rate equal to the Prime-based Rate
plus three percent (3%).
2.10 Optional Prepayments. (a) Except as provided in Section 2.10(b)
hereof, the Company may prepay all or part of the outstanding principal of any
Prime-based Advance(s) of the Revolving Credit at any time. Subject to Section
11.1 hereof and to the other terms and conditions of this Agreement, the Company
may prepay all or part of any Eurocurrency-based Advance of the Revolving Credit
(subject to not less than one (1) Business Day's notice to Agent) provided that
the amount of any such partial prepayment shall be at least Two Hundred Fifty
Thousand Dollars ($250,000), and after giving effect to any such partial
prepayment, the unpaid portion of such Advance which is refunded or converted
under Section 2.3 hereof shall be at least One Million Dollars ($1,000,000).
(b) The Company may prepay all or part of the outstanding principal of any
Swing Line Advance carried at the Prime-based Rate at any time.
(c) The Company may prepay at any time all or part of the outstanding
principal of any Swing Line Advance carried at the Quoted Rate
(subject to not less than one (1) day's notice to the Swing Line Bank)
provided that the amount of such prepayment shall be at least Ten
Thousand Dollars ($10,000) and, after giving effect to any such
partial prepayment, the aggregate unpaid portion of such Swing Line
Advance shall be at least Fifty Thousand Dollars ($50,000).
(d) Any prepayment of a Prime-based Advance made in accordance with this
Section shall be without premium or penalty and any prepayment of any
other type of Advance shall be subject to the provisions of Section
11.1.
2.11 Prime-based Advance in Absence of Election or Upon Default. If, (a) as
to any outstanding Eurocurrency-based Advance of the Revolving Credit, Agent has
not received payment of all outstanding principal and accrued interest on the
last day of the Interest Period applicable thereto, or does not receive a timely
Request for Advance meeting the requirements of Section 2.3 or 2.5(c) hereof
with respect to the refunding or conversion of such Advance, or (b) subject to
Section 2.9 hereof, if on the last day of the applicable Interest Period a
Default or an Event of Default shall have occurred and be continuing, then, on
the last day of the applicable Interest Period the principal amount of any
Eurocurrency-based Advance which has not been prepaid shall, absent a contrary
election of the Majority Banks, be converted automatically to a Prime-based
Advance and the Agent shall thereafter promptly notify the Company of said
action.
2.12 Revolving Credit Commitment Fee. From the Effective Date to the
Revolving Credit Maturity Date, the Company shall pay to the Agent for
distribution to the Banks pro-rata in accordance with their respective
Percentages, a Revolving Credit Commitment Fee quarterly in arrears commencing
April 1, 2004 (in respect of the prior calendar quarter or portion thereof), and
on the first day of each calendar quarter thereafter. The Revolving Credit
Commitment Fee payable to each Bank shall be determined by multiplying one
quarter of one percent (1/4%) times the average daily amount of the unused
Revolving Credit Aggregate Commitment then in effect (in determining the unused
portion of the Revolving Credit Aggregate Commitment, Letters of Credit shall be
considered usage of the Revolving Credit and Swing Line Advances shall not be
considered usage of the Revolving Credit). The Revolving Credit Commitment Fee
shall be computed on the basis of a year of three hundred sixty (360) days and
assessed for the actual number of days elapsed. Whenever any payment of the
Revolving Credit Commitment Fee shall be due on a day which is not a Business
Day, the date for payment thereof shall be extended to the next Business Day.
Upon receipt of such payment, Agent shall make prompt payment to each Bank of
its share of the Revolving Credit Commitment Fee based upon its respective
Percentage. It is expressly understood that the Revolving Credit Commitment Fees
described in this Section are not refundable under any circumstances.
2.13 Mandatory Repayment of Revolving Credit Advances. (a) If at any time
and for any reason the aggregate outstanding principal amount of Revolving
Credit Advances plus Swing Line Advances hereunder to the Company, plus the
outstanding Letter of Credit Obligations, shall exceed the lesser of the then
applicable (i) Borrowing Base and (ii) Revolving Credit Aggregate Commitment,
the Company shall immediately reduce any pending request for a Revolving Credit
Advance on such day by the amount of such excess and, to the extent any excess
remains thereafter, immediately repay an amount of the Indebtedness equal to
such excess and, to the extent such Indebtedness consists of Letter of Credit
Obligations, provide cash collateral on the basis set forth in Section 9.2
hereof. The Company acknowledges that, in connection with any repayment required
hereunder, it shall also be responsible for the reimbursement of any prepayment
or other costs required under Section 11.1 hereof; provided, however, that the
Company shall, in order to reduce any such prepayment costs and expenses, first
prepay such portion of the Indebtedness then carried as a Prime-based Advance,
if any;
(b) To the extent that, on the date any mandatory repayment of the
Revolving Credit Advances under this Section 2.13 or payment pursuant
to the terms of any of the Collateral Documents is due, the
Indebtedness under the Revolving Credit or any other Indebtedness to
be prepaid is being carried, in whole or in part, at the
Eurocurrency-based Rate and no Default or Event of Default has
occurred and is continuing, the Company may deposit the amount of such
mandatory prepayment in a cash collateral account to be held by the
Agent, for and on behalf of the Banks (which shall be an
interest-bearing account), on such terms and conditions as are
reasonably acceptable to Agent and upon such deposit the obligation of
the Company to make such mandatory prepayment shall be deemed
satisfied. Subject to the terms and conditions of said cash collateral
account, sums on deposit in said cash collateral account shall be
applied (until exhausted) to reduce the principal balance of the
Revolving Credit on the last day of each Interest Period attributable
to the Eurocurrency-based Advances of such Revolving Advance, thereby
avoiding breakage costs under Section 11.1 hereof.
2.14 Optional Reduction or Termination of Revolving Credit Aggregate
Commitment. The Company may upon at least five Business Days' prior written
notice to the Agent, permanently reduce the Revolving Credit Aggregate
Commitment in whole at any time, or in part from time to time, without premium
or penalty, provided that: (i) each partial reduction of the Revolving Credit
Aggregate Commitment shall be in an aggregate amount equal to Two Million
Dollars ($2,000,000) or a larger integral multiple of Five Hundred Thousand
Dollars ($500,000); (ii) each reduction shall be accompanied by the payment of
the Revolving Credit Commitment Fee accrued to the date of such reduction; (iii)
the Company shall prepay in accordance with the terms hereof the amount, if any,
by which the aggregate unpaid principal amount of Advances (including, without
duplication, any deemed Advances made under Section 3.6 hereof) outstanding
hereunder, plus the aggregate undrawn amount of outstanding Letter of Credit
Obligations, exceeds the amount of the then applicable Revolving Credit
Aggregate Commitment as so reduced, together with interest thereon to the date
of prepayment; (iv) no reduction shall reduce the Revolving Credit Aggregate
Commitment to an amount which is less than the aggregate undrawn amount of any
Letters of Credit outstanding at such time; and (v) no such reduction shall
reduce the Swing Line Commitment unless the Company so elects; provided, however
that if the termination or reduction of the Revolving Credit Aggregate
Commitment requires the prepayment of a Eurocurrency-based Advance or a Quoted
Rate Advance and such termination or reduction is made on a day other than the
last Business Day of the then current Interest Period applicable to such
Eurocurrency-based Advance or such Quoted Rate Advance, then, pursuant to
Section 11.1, the Company shall compensate the Banks for any losses described in
Section 11.1 or, the Company may deposit the amount of such prepayment in a
collateral account as provided in Section 2.13(b). Reductions of the Revolving
Credit Aggregate Commitment and any accompanying prepayments of Advances of the
Revolving Credit shall be distributed by Agent to each Bank in accordance with
such Bank's Percentage thereof, and will not be available for reinstatement by
or readvance to the Company, and any accompanying prepayments of Advances of the
Swing Line shall be distributed by Agent to the Swing Line Bank and will not be
available for reinstatement by or readvance to the Company. Any reductions of
the Revolving Credit Aggregate Commitment hereunder shall reduce each Bank's
portion thereof proportionately (based on the applicable Percentages), and shall
be permanent and irrevocable. Any payments made pursuant to this Section shall
be applied first to outstanding Prime-based Advances under the Revolving Credit,
next to Swing Line Advances carried at the Prime-based Rate, next to
Eurocurrency-based Advances of the Revolving Credit and then to Swing Line
Advances carried at the Quoted Rate.
2.15 Use of Proceeds of Advances. Advances of the Revolving Credit
(including Swing Line Advances) shall be available for the working capital needs
and general corporate purposes of Company and the Domestic Guarantors and to
fund the Transaction.
3. LETTERS OF CREDIT
3.1 Letters of Credit. Subject to the terms and conditions of this
Agreement, Issuing Bank shall through the Issuing Office, at any time and from
time to time from and after the date hereof until thirty (30) days prior to the
Revolving Credit Maturity Date, upon the written request of an Account
Party(ies) accompanied by a duly executed Letter of Credit Agreement and such
other documentation related to the requested Letter of Credit as the Issuing
Bank may require, issue Letters of Credit in Dollars for the account of such
Account Party(ies), in an aggregate amount for all Letters of Credit issued
hereunder at any one time outstanding not to exceed the Letter of Credit Maximum
Amount. Each Letter of Credit shall be in a minimum face amount of Ten Thousand
Dollars ($10,000) (or such lesser amount as may be agreed to by Issuing Bank)
and each Letter of Credit (including any renewal thereof) shall expire not later
than the first to occur of: (i) one year after the date of issuance thereof and
(ii) ten (10) Business Days prior to the Revolving Credit Maturity Date in
effect on the date of issuance thereof. The submission of all applications in
respect of and the issuance of each Letter of Credit hereunder shall be subject
in all respects to the International Standby Practices 98, and any successor
documentation thereto and to the extent not inconsistent therewith, the laws of
the State of Michigan. In the event of any conflict between this Agreement and
any Letter of Credit Document other than any Letter of Credit, this Agreement
shall control.
3.2 Conditions to Issuance. No Letter of Credit shall be issued at the
request and for the account of any Account Party(ies) unless, as of the date of
issuance of such Letter of Credit:
(a) in the case of any Account Party:
(i) after giving effect to the Letter of Credit requested, the
outstanding Letter of Credit Obligations does not exceed the
Letter of Credit Maximum Amount; and
(ii) after giving effect to the Letter of Credit requested, the
outstanding Letter of Credit Obligations on such date plus the
aggregate amount of all Revolving Credit Advances and Swing Line
Advances (including, without duplication, deemed Advances funded
by Agent under Section 3.6(a) hereof in respect of the Company's
or an applicable Account Party's reimbursement obligation
hereunder) requested or outstanding on such date does not exceed
the lesser of the then applicable (i) Borrowing Base and (ii)
Revolving Credit Aggregate Commitment;
(b) the obligations of the Loan Parties set forth in this Agreement and
the other Loan Documents are valid, binding and enforceable
obligations of such Loan Parties and the valid, binding and
enforceable nature of this Agreement and the other Loan Documents has
not been disputed by the Company;
(c) the representations and warranties contained in this Agreement and the
other Loan Documents are true in all material respects as if made on
such date (other than any representation or warranty that expressly
speaks only as of a different date), and both immediately before and
immediately after issuance of the Letter of Credit requested, no
Default or Event of Default exists;
(d) the execution of the Letter of Credit Agreement with respect to the
Letter of Credit requested will not violate the terms and conditions
of any contract, agreement or other borrowing of the relevant Account
Party;
(e) the Account Party requesting the Letter of Credit shall have delivered
to Issuing Bank at its Issuing Office, not less than three (3)
Business Days prior to the requested date for issuance (or such
shorter time as the Issuing Bank, in its sole discretion, may permit),
the Letter of Credit Agreement related thereto, together with such
other documents and materials as may be required pursuant to the terms
thereof, and the terms of the proposed Letter of Credit shall be
reasonably satisfactory to Issuing Bank;
(f) no order, judgment or decree of any court, arbitrator or governmental
authority shall purport by its terms to enjoin or restrain Issuing
Bank from issuing the Letter of Credit requested, or any Bank from
taking an assignment of its Percentage thereof pursuant to Section 3.6
hereof, and no law, rule, regulation, request or directive (whether or
not having the force of law) shall prohibit or request that Issuing
Bank refrain from issuing, or any Bank refrain from taking an
assignment of its Percentage of, the Letter of Credit requested or
letters of credit generally;
(g) there shall have been no introduction of or change in the
interpretation of any law or regulation that would make it unlawful or
unduly burdensome for the Issuing Bank to issue or any Bank to take an
assignment of its Percentage of the requested Letter of Credit, no
declaration of a general banking moratorium by banking authorities in
the United States, Michigan or the respective jurisdictions in which
the Banks, the applicable Account Party and the beneficiary of the
requested Letter of Credit are located, and no establishment of any
new restrictions by any central bank or other governmental agency or
authority on transactions involving letters of credit or on banks
materially affecting the extension of credit by banks; and
(h) Issuing Bank shall have received the issuance fees required in
connection with the issuance of such Letter of Credit pursuant to
Section 3.4 hereof.
Each Letter of Credit Agreement submitted to Issuing Bank pursuant
hereto shall constitute the certification by the Company and the
Account Party of the matters set forth in Section 3.2 (a) through (d)
hereof. The Agent shall be entitled to rely on such certification
without any duty of inquiry.
3.3 Notice. The Issuing Bank will deliver to the Agent, concurrently with
or promptly following its delivery of any Letter of Credit, a true and complete
copy of each Letter of Credit. Promptly upon its receipt thereof, Agent shall
give notice, substantially in the form attached as [Exhibit F], to each Bank of
the issuance of each Letter of Credit, specifying the amount thereof and the
amount of such Bank's Percentage thereof.
3.4 Letter of Credit Fees. The Company shall pay to the Agent for
distribution to the Banks in accordance with their Percentages, letter of credit
fees as follows:
(a) A per annum letter of credit fee of two percent (2%) per annum with
respect to the undrawn amount of each Letter of Credit issued pursuant
hereto (based on the amount of each Letter of Credit).
(b) A letter of credit facing fee in the amount equal to the greater of
(i) $250 or (ii) one quarter of one percent (.25%) on the face amount
of each Letter of Credit to be retained by Issuing Bank for its own
account.
(c) If any change in any law or regulation or in the interpretation
thereof by any court or administrative or governmental authority
charged with the administration thereof, adopted after the date
hereof, shall either (i) impose, modify or cause to be deemed
applicable any reserve, special deposit, limitation or similar
requirement against letters of credit issued or participated in by, or
assets held by, or deposits in or for the account of, Issuing Bank or
any Revolving Credit Bank or (ii) impose on Issuing Bank or any Bank
any other condition regarding this Agreement, the Letters of Credit or
any participations in such Letters of Credit, and the result of any
event referred to in clause (i) or (ii) above shall be to increase the
cost or expense to Issuing Bank or such Bank of issuing or maintaining
or participating in any of the Letters of Credit (which increase in
cost or expense shall be determined by the Issuing Bank's or such
Bank's reasonable allocation of the aggregate of such cost increases
and expenses resulting from such events), then, upon demand by the
Issuing Bank or such Bank, as the case may be, the applicable Account
Party shall, within thirty (30) days following demand for payment, pay
to Issuing Bank or such Bank, as the case may be, from time to time as
specified by the Issuing Bank or such Bank, additional amounts which
shall be sufficient to compensate the Issuing Bank or such Bank for
such increased cost and expense, together with interest on each such
amount from ten days after the date such payment is due until payment
in full thereof at the Prime-based Rate. Each demand for payment under
this Section 3.4(c), shall be accompanied by a certificate of Issuing
Bank or the applicable Bank (as applicable) setting forth the amount
of such increased cost or expense incurred by the Issuing Bank or such
Bank, as the case may be, as a result of any event mentioned in clause
(i) or (ii) above, and in reasonable detail, the methodology for
calculating and the calculation of such amount, which certificate
shall be prepared in good faith and shall be conclusive evidence,
absent manifest error, as to the amount thereof.
(d) All payments by the Company to the Agent for distribution to the
Issuing Bank or the Banks under this Section 3.4 shall be made in
Dollars in immediately available funds at the Issuing Office or such
other office of the Agent as may be designated from time to time by
written notice to the Company by the Agent. The fees described in
clauses (a) and (b) above shall be nonrefundable under all
circumstances and shall be payable upon the issuance of such Letter of
Credit and thereafter annually in advance. The fees due under clause
(a) above shall be determined by multiplying the Applicable Fee
Percentage times the undrawn amount of the face amount of each such
Letter of Credit on the date of determination, and shall be calculated
on the basis of a 360 day year and assessed for the actual number of
days from the date of the issuance thereof to the stated expiration
thereof. The parties hereto acknowledge that any amendment or
extension to a Letter of Credit issued hereunder shall be treated as a
new Letter of Credit for the purposes of the letter of credit facing
fee.
3.5 Other Fees. In connection with the Letters of Credit, and in addition
to the Letter of Credit Fees, the Company and the applicable Account Party(ies)
shall pay, for the sole account of the Issuing Bank, standard documentation,
administration, payment and cancellation charges assessed by Issuing Bank or the
Issuing Office, at the times, in the amounts and on the terms set forth or to be
set forth from time to time in the standard fee schedule of the Issuing Office
in effect from time to time and delivered to the relevant Account Party(ies).
3.6 Drawings and Demands for Payment Under Letters of Credit.
(a) If the Issuing Bank shall honor a draft or other demand for payment
presented or made under any Letter of Credit, the Company and each
applicable Account Party agree to pay to the Issuing Bank an amount
equal to the amount paid by the Issuing Bank in respect of such draft
or other demand under such Letter of Credit and all expenses paid or
incurred by the Agent relative thereto not later than 1:00 p.m.
(Detroit time), on (i) the Business Day that the Company receives
notice of such presentment and honor, if such notice is received prior
to 11:00 a.m. (Detroit time) or (ii) the Business Day immediately
following the day that Company receives such notice, if such notice is
not received prior to such time. Unless the Company or the applicable
Account Party shall have made such payment to the Agent for the
account of the Issuing Bank on such day, upon each such payment by the
Issuing Bank, the Agent shall be deemed to have disbursed to the
Company, and the Company shall be deemed to have elected to substitute
for the reimbursement obligation, with respect to the applicable
Letters of Credit denominated in Dollars, a Prime-based Advance of the
Revolving Credit for the account of the Banks in an amount equal to
the amount so paid by the Issuing Bank in respect of such draft or
other demand under such Letter of Credit. Such Prime-based Advance
shall be deemed disbursed notwithstanding any failure to satisfy any
conditions for disbursement of any Advance set forth in Section 2
hereof and, to the extent of the Advances so disbursed, the
reimbursement obligation of the Company or the applicable Account
Party under this Section 3.6 shall be deemed satisfied.
(b) If the Issuing Bank shall honor a draft or other demand for payment
presented or made under any Letter of Credit, the Issuing Bank shall
provide notice thereof to the Company and the applicable Account Party
on the date such draft or demand is honored, and to each Bank on such
date unless the Company or applicable Account Party shall have
satisfied its reimbursement obligation under Section 3.6(a) hereof by
payment to the Agent on such date. The Issuing Bank shall further use
reasonable efforts to provide notice to the Company or applicable
Account Party prior to honoring any such draft or other demand for
payment, but such notice, or the failure to provide such notice, shall
not, subject to Section 3.6(a), affect the rights or obligations of
the Issuing Bank with respect to any Letter of Credit or the rights
and obligations of the parties hereto, including without limitation
the obligations of the Company or applicable Account Party under
Section 3.6(a) hereof.
(c) Upon issuance by the Issuing Bank of each Letter of Credit hereunder,
each Bank shall automatically acquire a pro rata participation
interest in such Letter of Credit and each related Letter of Credit
Payment based on its respective Percentage. Each Bank, on the date a
draft or demand under any Letter of Credit is honored (or the next
succeeding Business Day if the notice required to be given by Agent to
the Banks under Section 3.6(b) hereof is not given to the Banks prior
to 2:00 p.m. (Detroit time) on such date of draft or demand), shall
make its Percentage of the amount paid by the Issuing Bank, and not
reimbursed by the Company or applicable Account Party on such day, in
immediately available funds at the principal office of the Agent for
the account of Issuing Bank. If and to the extent such Bank shall not
have made such pro rata portion available to the Agent, such Bank, the
Company and the applicable Account Party severally agree to pay to the
Issuing Bank forthwith on demand such amount together with interest
thereon, for each day from the date such amount was paid by the
Issuing Bank until such amount is so made available to the Agent at a
per annum rate equal to the interest rate applicable during such
period to the related Advance deemed to have been disbursed under
Section 3.6(a) in respect of the reimbursement obligation of the
Company and the applicable Account Party, as set forth in Section
2.4(c)(i) or 2.4(c)(ii) hereof, as the case may be. If such Bank shall
pay such amount to the Agent for the account of Issuing Bank together
with such interest, if any, such amount so paid shall be deemed to
constitute an Advance by such Bank disbursed in respect of the
reimbursement obligation of the Company or applicable Account Party
under Section 3.6(a) hereof for purposes of this Agreement, effective
as of the dates applicable under said Section 3.6(a). The failure of
any Bank to make its pro rata portion of any such amount paid by the
Issuing Bank available to the Agent for the account of Issuing Bank
shall not relieve any other Bank of its obligation to make available
its pro rata portion of such amount, but no Bank shall be responsible
for failure of any other Bank to make such pro rata portion available
to the Agent for the account of Issuing Bank.
Notwithstanding the foregoing however no Bank shall be deemed to have
acquired a participation in a Letter of Credit if, prior to the
issuing of the Letter of Credit by the Issuing Bank, the Agent or the
Issuing Bank had obtained actual knowledge that an Event of Default
had occurred and was continuing; provided, however that the Banks
shall be deemed to have acquired such a participation upon the date of
which such Event of Default has been waived by the requisite Banks, as
applicable.
(d) Nothing in this Agreement shall be construed to require or authorize
any Bank to issue any Letter of Credit, it being recognized that the
Issuing Bank shall be the sole issuer of Letters of Credit under this
Agreement.
3.7 Obligations Irrevocable. The obligations of the Company and any Account
Party to make payments to Agent for the account of Issuing Bank or the Banks
with respect to Letter of Credit Obligations under Section 3.6 hereof, shall be
unconditional and irrevocable and not subject to any qualification or exception
whatsoever, including, without limitation:
(a) Any lack of validity or enforceability of any Letter of Credit or any
documentation relating to any Letter of Credit or to any transaction
related in any way to any Letter of Credit (the "Letter of Credit
Documents");
(b) Any amendment, modification, waiver, consent, or any substitution,
exchange or release of or failure to perfect any interest in
collateral or security, with
(c) The existence of any claim, setoff, defense or other right which the
Company or any Account Party may have at any time against any
beneficiary or any transferee of any Letter of Credit (or any persons
or entities for whom any such beneficiary or any such transferee may
be acting), the Agent, the Issuing Bank or any Bank or any other
person or entity, whether in connection with any of the Letter of
Credit Documents, the transactions contemplated herein or therein or
any unrelated transactions;
(d) Any draft or other statement or document presented under any Letter of
Credit proving to be forged, fraudulent, invalid or insufficient in
any respect or any statement therein being untrue or inaccurate in any
respect;
(e) Payment by the Issuing Bank to the beneficiary under any Letter of
Credit against presentation of documents which do not comply with the
terms of such Letter of Credit, including failure of any documents to
bear any reference or adequate reference to such Letter of Credit;
(f) Any failure, omission, delay or lack on the part of the Agent, Issuing
Bank or any Bank or any party to any of the Letter of Credit Documents
to enforce, assert or exercise any right, power or remedy conferred
upon the Agent, Issuing Bank, any Bank or any such party under this
Agreement, any of the other Loan Documents or any of the Letter of
Credit Documents, or any other acts or omissions on the part of the
Agent, Issuing Bank, any Bank or any such party; or
(g) Any other event or circumstance that would, in the absence of this
Section 3.7, result in the release or discharge by operation of law or
otherwise of the Company or any Account Party from the performance or
observance of any obligation, covenant or agreement contained in
Section 3.6 hereof.
No setoff, counterclaim, reduction or diminution of any obligation or
any defense of any kind or nature which the Company or any Account
Party has or may have against the beneficiary of any Letter of Credit
shall be available hereunder to the Company or any Account Party
against the Agent, Issuing Bank or any Bank. Nothing contained in this
Section 3.7 shall be deemed a waiver of any claim or to prevent
Company or the Account Parties, after satisfaction in full of the
absolute and unconditional obligations of Company and the Account
Parties hereunder, from asserting in a separate action any claim,
defense, set off or other right which they (or any of them) may have
against Agent or any Bank.
3.8 Risk Under Letters of Credit. (a) In the administration and handling of
Letters of Credit and any security therefor, or any documents or instruments
given in connection therewith, Issuing Bank shall have the sole right to take or
refrain from taking any and all actions under or upon the Letters of Credit.
(b) Subject to other terms and conditions of this Agreement, Issuing Bank
shall issue the Letters of Credit and shall hold the documents related
thereto in its own name and shall make all collections thereunder and
otherwise administer the Letters of Credit in accordance with Issuing
Bank's regularly established practices and procedures and will have no
further obligation with respect thereto. In the administration of
Letters of Credit, Issuing Bank shall not be liable for any action
taken or omitted on the advice of counsel, accountants, appraisers or
other experts selected by Issuing Bank with due care and Issuing Bank
may rely upon any notice, communication, certificate or other
statement from the Company, any Account Party, beneficiaries of
Letters of Credit, or any other Person which Issuing Bank believes to
be authentic. Issuing Bank will, upon request, furnish the Banks with
copies of Letter of Credit Documents related thereto.
(c) In connection with the issuance and administration of Letters of
Credit and the assignments hereunder, Issuing Bank makes no
representation and shall have no responsibility with respect to (i)
the obligations of the Company or any Account Party or the validity,
sufficiency or enforceability of any document or instrument given in
connection therewith, or the taking of any action with respect to
same, (ii) the financial condition of, any representations made by, or
any act or omission of, the Company, the applicable Account Party or
any other Person, or (iii) any failure or delay in exercising any
rights or powers possessed by Issuing Bank in its capacity as issuer
of Letters of Credit in the absence of its gross negligence or willful
misconduct. Each of the Banks expressly acknowledges that it has made
and will continue to make its own evaluations of the Company's and the
Account Parties' creditworthiness without reliance on any
representation of Issuing Bank or Issuing Bank's officers, agents and
employees.
(d) If at any time Issuing Bank shall recover any part of any unreimbursed
amount for any draw or other demand for payment under a Letter of
Credit, or any interest thereon, Agent or Issuing Bank, as the case
may be, shall receive same for the pro rata benefit of the Banks in
accordance with their respective Percentages and shall promptly
deliver to each Bank its share thereof, less such Bank's pro rata
share of the costs of such recovery, including court costs and
attorney's fees. If at any time any Bank shall receive from any source
whatsoever any payment on any such unreimbursed amount or interest
thereon in excess of such Bank's Percentage of such payment, such Bank
will promptly pay over such excess to Agent, for redistribution in
accordance with this Agreement.
3.9 Indemnification. The Company and each Account Party hereby indemnifies
and agrees to hold harmless the Banks, the Issuing Bank and the Agent, and their
respective officers, directors, employees and agents (each an "L/C Indemnified
Person"), from and against any and all claims, damages, losses, liabilities,
costs or expenses of any kind or nature whatsoever which the Banks, the Issuing
Bank or the Agent or any such L/C Indemnified Person may incur or which may be
claimed against any of them by reason of or in connection with any Letter of
Credit (collectively, the "L/C Indemnified Amounts"), and none of the Issuing
Bank, any Bank or the Agent or any of their respective officers, directors,
employees or agents shall be liable or responsible for L/C Indemnified Amounts
relating to any of the following:
(a) the use which may be made of any Letter of Credit or for any acts or
omissions of any beneficiary in connection therewith;
(b) the validity, sufficiency or genuineness of documents or of any
endorsement thereon, even if such documents should in fact prove to be
in any or all respects invalid, insufficient, fraudulent or forged;
(c) payment by the Issuing Bank to the beneficiary under any Letter of
Credit against presentation of documents which do not strictly comply
with the terms of any Letter of Credit (unless such payment resulted
from the gross negligence or willful misconduct of the Issuing Bank),
including failure of any documents to bear any reference or adequate
reference to such Letter of Credit;
(d) any error, omission, interruption or delay in transmission, dispatch
or delivery of any message or advice, however transmitted, in
connection with any Letter of Credit; or
(e) any other event or circumstance whatsoever arising in connection with
any Letter of Credit;
provided, however, that with respect to subparagraphs (a) through (e) hereof,
(i) neither the Company nor any of the Account Parties shall be required to
indemnify any L/C Indemnified Person for any L/C Indemnified Amounts to the
extent such amounts result from such L/C Indemnified Person's gross negligence
or willful misconduct and (ii) the Agent and the Issuing Bank shall be liable to
the Company and the Account Parties to the extent, but only to the extent, of
any direct, as opposed to consequential or incidental, damages suffered by the
Company and the Account Parties which were caused by the Issuing Bank's gross
negligence, or willful misconduct or by the Issuing Bank's wrongful dishonor of
any Letter of Credit after the presentation to it by the beneficiary thereunder
of a draft or other demand for payment and other documentation strictly
complying with the terms and conditions of such Letter of Credit.
(f) It is understood that in making any payment under a Letter of Credit
the Issuing Bank will rely on documents presented to it under such
Letter of Credit as to any and all matters set forth therein without
further investigation and regardless of any notice or information to
the contrary.
3.10 Right of Reimbursement. Each Bank agrees to reimburse the Issuing Bank
on demand, pro rata in accordance with its respective Percentage, for (i) the
reasonable out-of-pocket costs and expenses of the Issuing Bank to be reimbursed
by the Company or any Account Party pursuant to any Letter of Credit Agreement
or any Letter of Credit, to the extent not reimbursed by the Company or any
Account Party and (ii) any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, fees, reasonable out-of-pocket
expenses or disbursements of any kind and nature whatsoever which may be imposed
on, incurred by or asserted against Issuing Bank in any way relating to or
arising out of this Agreement (including Section 3.6(c) hereof), any Letter of
Credit, any documentation or any transaction relating thereto, or any Letter of
Credit Agreement, to the extent not reimbursed by the Company or any Account
Party, except to the extent that such liabilities, losses, costs or expenses
were incurred by Issuing Bank as a result of Issuing Bank's gross negligence or
willful misconduct or by the Issuing Bank's wrongful dishonor of any Letter of
Credit after the presentation to it by the beneficiary thereunder of a draft or
other demand for payment and other documentation strictly complying with the
terms and conditions of such Letter of Credit.
4. [RESERVED]
5. CONDITIONS
The obligations of the Banks to make Advances or loans pursuant to this
Agreement and the obligation of the Issuing Bank to issue Letters of Credit are
subject to the following conditions:
5.1 Execution of Notes and this Agreement. Each of the Loan Parties shall
have executed and delivered to Agent for the account of each Bank requesting
Notes, the Revolving Credit Notes and the Swing Line Note, as applicable, and
this Agreement and the other Loan Documents to which that Loan Party is a party
(including all schedules, exhibits, certificates, opinions, financial statements
and other documents to be delivered pursuant hereto), and such Notes, and this
Agreement and the other Loan Documents shall be in full force and effect.
5.2 Corporate or Limited Liability Company Authority. Agent shall have
received, with a counterpart thereof for each Bank:
(a) For each Loan Party, a certificate of its Secretary, Assistant
Secretary or member, as applicable, as to:
(i) resolutions of the board of directors or members of such Loan
Party evidencing approval of the transactions contemplated by
this Agreement, approval of this Agreement and the other Loan
Documents to which such Loan Party is party and authorizing the
execution and delivery thereof and in the case of the Company,
the borrowing of Advances and the requesting of Letters of Credit
hereunder,
(ii) the incumbency and signature of the officers or members of such
Loan Party executing any Loan Document,
(iii)a certificate of good standing or continued existence (or the
equivalent thereof) from the state of its organization, and from
every state or other jurisdiction listed on Schedule 5.2 hereof
if issued by such jurisdiction, subject to the limitations (as to
qualification and authorization to do business) contained in
Section 6.1, and
(iv) copies of such Loan Party's articles of incorporation and bylaws
or other constitutional documents, as in effect on the Effective
Date;
5.3 Collateral Documents, Guaranties and other Loan Documents. As security
for all Indebtedness, the Agent shall have received the following documents:
(a) The following Collateral Documents:
(i) the Guaranties, executed and delivered by the Guarantors;
(ii) the Security Agreement, executed and delivered by the Company and
the Guarantors; and
(iii) Subordination Agreements with respect to all Subordinated Debt;
(b) A Mortgage for each property listed on Schedule 5.3(b), together, in
each case, with the following, for each such parcel, shall have been
delivered to the Agent, for and on behalf of the Banks:
(i) ALTA mortgage title insurance policy from a title insurance
company reasonably satisfactory to the Agent and the Banks,
without standard exceptions, in an amount satisfactory to the
Agent and the Banks, insuring the Agent's mortgage, to be a first
lien on the subject property, subject only to those exceptions,
provided the same are available, acceptable to the Agent and the
Banks. The title policy shall contain, provided the same are
available, comprehensive, leasehold (if applicable) and any other
endorsements required by the Agent.
(ii) Evidence of flood insurance, if required by applicable law.
(c) If requested by the Agent, in the case of each leased property listed
on Schedule 5.3(c) hereto, lessor's acknowledgments and consents in
form and substance reasonably acceptable to the Agent and the Banks.
(d) Certified copies of uniform commercial code requests for information,
or a similar search report certified by a party acceptable to the
Agent, dated a date reasonably near to the Effective Date, listing all
effective financing statements which name the Company or any Guarantor
(under their present names or under any previous names used within
five (5) years prior to the date hereof) as debtors and which are
filed in the jurisdictions in which filings are to be made pursuant to
the Collateral Documents, together with (i) copies of such financing
statements, and (ii) executed Uniform Commercial Code (Form UCC-3)
Termination Statements, if any, necessary to release all Liens and
other rights of any Person in any Collateral described in the
Collateral Documents previously granted by any Person (other than
Liens permitted by Section 8.2).
(e) Any documents (including, without limitation, financing statements,
amendments to financing statements and assignments of financing
statements) reasonably required to be provided in connection with the
Collateral Documents to create, in favor of the Agent (for and on
behalf of the Banks), a perfected security interest in the Collateral
thereunder shall have been delivered to the Agent in a proper form for
filing in each office in each jurisdiction listed in Schedule 5.3(d),
or other office, as the case may be.
5.4 Existing Credit Facilities. All existing Debt, other than Debt
expressly permitted hereunder, or Debt to be refinanced with the proceeds of an
Advance of the Revolving Credit, together with all interest, all prepayment
premiums and other amounts due and payable with respect thereto, shall have been
paid in full and the related commitments terminated and all Liens securing
payment of any such Debt shall have been released and the Agent shall have
received all Uniform Commercial Code Form UCC-3 termination statements or other
instruments as may be suitable or appropriate in connection therewith, or
undertakings from the applicable secured parties as to the termination and
discharge thereof satisfactory in form and substance to Agent.
5.5 Insurance. The Agent shall have received evidence satisfactory to it
that the Loan Parties have obtained the insurance policies required by Section
7.5 hereof and that such insurance policies are in full force and effect.
5.6 Compliance with Certain Documents and Agreements. The Loan Parties
shall have each performed and complied in all material respects with all
agreements and conditions contained in this Agreement and the other Loan
Documents and required to be performed or complied with by each of them (as of
the applicable date) and none of such parties shall be in material default in
the performance or compliance with any of the terms or provisions hereof or
thereof.
5.7 Opinion of Counsel. The Loan Parties shall furnish Agent prior to the
initial Advance under this Agreement, with signed copies for each Bank, opinions
of counsel to the Loan Parties, dated the Effective Date and covering such
matters as reasonably required by and otherwise reasonably satisfactory in form
and substance to the Agent and each of the Banks.
5.8 Company's Certificate. The Agent shall have received, with a signed
counterpart for each Bank, a certificate of a Responsible Officer of the Company
dated the date of the initial Advance hereunder, stating that to the best of his
or her knowledge after due inquiry, (a) except to the extent set forth in any
post closing letter between the Company and the Agent, the conditions set forth
in this Section 5 have been satisfied; (b) the representations and warranties
made by the Loan Parties in this Agreement or any of the other Loan Documents,
are true and correct in all material respects; (c) no Default or Event of
Default shall have occurred and be continuing; and (d) since December 31, 2002,
nothing shall have occurred which has had, or could reasonably be expected to
have, a Material Adverse Effect.
5.9 Payment of Fees. Concurrently with the initial Advance hereunder,
Company shall have paid to Comerica, in its individual capacity and as Agent
(for its sole account), any commitment fee and agency fee due under the terms of
the applicable Fee Letter.
5.10 Financial Statements. The Company shall have delivered to the Agent
and each Bank the annual audited financial statements of Company and its
Subsidiaries for the period ended September 30, 2003 and company prepared
unaudited financial statements of the Company and its Subsidiaries, for the
month ending November 30, 2003.
5.11 Transaction Documents. (a) The Agent shall have received executed
copies of the material Transaction Documents, certified by a Responsible Officer
of Company. The Transaction Documents shall be in form and substance reasonably
satisfactory to the Agent and each of the Transaction Documents shall have been
duly authorized, executed and delivered by each of the parties thereto and shall
be in full force and effect. No term or provision of the Transaction Documents
shall have been modified, and no condition to consummation of the transaction
shall have been waived, in either case in a manner materially detrimental to
Company, by any of the parties thereto. The Company shall have in all material
respects done and performed such acts and observed such covenants which it is
required to do or perform under the Transaction Documents and in order to
consummate the Transaction on or prior to the Effective Date.
(a) The Company shall have provided evidence of filing Articles of Merger
to the Agent including the effective date of the Merger and that the
Transaction has been consummated.
5.12 Continuing Conditions. The obligations of the Banks to make Advances
(including the initial Advance) under this Agreement and the obligation of the
Issuing Bank to issue any Letters of Credit shall be subject to the continuing
conditions that:
(a) No Default or Event of Default shall exist as of the date of the
Advance or the request for the Letter of Credit; and
(b) Each of the representations and warranties contained in this Agreement
and in each of the other Loan Documents shall be true and correct in
all material respects as of the date of the Advance or Letter of
Credit as if made on and as of such date (other than any
representation or warranty that expressly speaks only as of a
different date).
6. REPRESENTATIONS AND WARRANTIES
The Company represents and warrants and such representations and warranties
shall survive until the Revolving Credit Maturity Date and thereafter until the
expiration of all Letters of Credit and the final payment in full of the
Indebtedness and the performance by the Company of all other obligations under
this Agreement:
6.1 Corporate Authority. Each Loan Party is a corporation (or other
business entity) duly organized and existing in good standing under the laws of
the state or jurisdiction of its incorporation, and, other than as set forth on
Schedule 6.1 hereto, each Loan Party is duly qualified and authorized to do
business as a foreign corporation in each jurisdiction where the character of
its assets or the nature of its activities makes such qualification and
authorization necessary and where failure to be so qualified would have a
Material Adverse Effect.
6.2 Due Authorization - Company. Execution, delivery and performance of
this Agreement, the other Loan Documents to which the Company is a party and the
issuance of the Notes by the Company (if requested) are within the Company's
corporate powers, have been duly authorized, are not in contravention of any law
applicable to the Company or the terms of the Company's organizational documents
and, except as have been previously obtained or as referred to in Section 6.13,
below, do not require the consent or approval, material to the transactions
contemplated by this Agreement and the other Loan Documents, of any governmental
body, agency or authority.
6.3 Due Authorization - Guarantors. Execution, delivery and performance of
the Guaranty, and the other Loan Documents to which such Guarantor is a party,
are within the corporate or limited liability company powers of each such
Guarantor, have been duly authorized, are not in contravention of any law
applicable to such Guarantor or the terms of such Guarantor's organizational
documents, and, except as have been previously obtained (or as referred to in
Section 6.13 below), do not require the consent or approval, material to the
transactions contemplated by this Agreement and the other Loan Documents, of any
governmental body, agency or authority not previously obtained.
6.4 Good Title, No Liens. The property described in Schedules 5.3(b) hereof
constitutes all of the real property owned by the Company and its Subsidiaries
on the Effective Date. The Company and its Subsidiaries have good title to or a
valid leasehold interest in (or, in the case of any fee interest in real
property, good and marketable title to) all of their respective material assets,
subject to the exceptions stated in the next sentence. There are no security
interests in, liens, mortgages, or other encumbrances on and no financing
statements on file with respect to any of the assets owned by Company or the
Guarantors, except for (i) any defects that, individually or in the aggregate
could not reasonably be expected to have a Material Adverse Effect and (ii)
other Liens permitted pursuant to Section 8.2.
6.5 Taxes. Each of the Loan Parties has filed on or before their respective
due dates or within the applicable grace periods, all federal, state and foreign
tax returns which are required to be filed or has obtained extensions for filing
such tax returns and is not delinquent in filing such returns in accordance with
such extensions and has paid all material taxes which have become due pursuant
to those returns or pursuant to any assessments received by any such party, as
the case may be, to the extent such taxes have become due, except to the extent
such tax payments are being actively contested in good faith by appropriate
proceedings and with respect to which adequate provision has been made on the
books of such Loan Party or such other Subsidiary as may be required by GAAP.
6.6 No Defaults. There exists no material default under the provisions of
any instrument evidencing any outstanding indebtedness for borrowed money in
excess of $50,000 of any Loan Party or of any agreement relating thereto.
6.7 Enforceability of Agreement and Loan Documents -- Company. This
Agreement and each of the other Loan Documents to which the Company is a party,
have each been duly executed and delivered by its duly authorized officers and
constitute the valid and binding obligations of the Company, enforceable in
accordance with their respective terms, except as enforcement thereof may be
limited by applicable bankruptcy, reorganization, insolvency, fraudulent
conveyance, moratorium or similar laws affecting the enforcement of creditor's
rights, generally and by general principles of equity (regardless of whether
enforcement is considered in a proceeding in law or equity).
6.8 Enforceability of Loan Documents -- Guarantors. The Loan Documents to
which each of the Guarantors is a party, have each been duly executed and
delivered by the duly authorized officers, members or managers, as the case may
be, of each such Guarantor and constitute the valid and binding obligations of
each such Guarantor, enforceable in accordance with their respective terms,
except as enforcement thereof may be limited by applicable bankruptcy,
reorganization, insolvency, fraudulent conveyance, moratorium or similar laws
affecting the enforcement of creditor's rights, generally and by general
principles of equity (regardless of whether enforcement is considered in a
proceeding in law or equity).
6.9 Compliance with Laws. Except as disclosed on Schedule 6.9, each of the
Loan Parties has complied with all applicable federal, state and local laws,
ordinances, codes, rules, regulations and guidelines (including consent decrees
and administrative orders) including but not limited to Hazardous Material Laws,
except to the extent that failure to comply therewith would not have a Material
Adverse Effect.
6.10 Non-contravention -- Company. The execution, delivery and performance
of this Agreement and the other Loan Documents to which it is a party by the
Company are not in contravention of the terms of any indenture, agreement or
undertaking to which the Company is a party or by which its properties are bound
or affected where such violation would reasonably be expected to have a Material
Adverse Effect.
6.11 Non-contravention -- Guarantors. The execution, delivery and
performance of those Loan Documents signed by the Guarantors are not in
contravention of the terms of any indenture, agreement or undertaking to which
any such Guarantor is a party or by which it or its properties are bound or
affected where such violation would reasonably be expected to have a Material
Adverse Effect.
6.12 No Litigation. Except for De Minimis Matters or as set forth on
Schedule 6.12 hereof, there is no suit, action, proceeding, including, without
limitation, any bankruptcy proceeding, or governmental investigation pending
against or to the knowledge of the Company, threatened against any Loan Party
(other than any suit, action or proceeding in which such Loan Party is the
plaintiff and in which no counterclaim or cross-claim against such Loan Party
has been filed). Except as set forth on Schedule 6.12, there is not outstanding
against any Loan Party any judgment, decree, injunction, rule, or order of any
court, government, department, commission, agency, instrumentality or arbitrator
nor is any Loan Party in violation of any applicable law, regulation, ordinance,
order, injunction, decree or requirement of any governmental body or court where
such matters would reasonably be expected to have a Material Adverse Effect.
6.13 Consents, Approvals and Filings, Etc. Except as have been previously
obtained or for DeMinimis Matters and except for the consents of landlords with
respect to properties leased by Company and the Guarantors, no authorization,
consent, approval, license, qualification or formal exemption from, nor any
filing, declaration or registration with, any court, governmental agency or
regulatory authority or any securities exchange or any other person or party
(whether or not governmental) is required in connection with the execution,
delivery and performance: (i) by any of the Loan Parties of this Agreement, any
of the other Loan Documents to which they are a party, or any other documents or
instruments to be executed and or delivered by any such Loan Parties in
connection therewith or herewith; or (ii) by Loan Party, of the liens, pledges,
mortgages, security interests or other encumbrances granted, conveyed or
otherwise established (or to be granted, conveyed or otherwise established) by
or under this Agreement or the other Loan Documents, except for such filings to
be made concurrently herewith as are required by the Collateral Documents to
perfect liens in favor of the Agent and except for such consents, approvals or
filings the failure of which to obtain would not have a Material Adverse Effect.
All such material authorizations, consents, approvals, licenses, qualifications,
exemptions, filings, declarations and registrations which have previously been
obtained or made, as the case may be, are in full force and effect and are not
the subject of any attack, or to the knowledge of the Company threatened attack
(in any material respect) by appeal or direct proceeding or otherwise.
6.14 Agreements Affecting Financial Condition. As of the Effective Date,
none of the Loan Parties is party to any agreement or instrument or subject to
any charter or other corporate restriction which has a Material Adverse Effect.
6.15 No Investment Company or Margin Stock. None of the Loan Parties is an
"investment company" within the meaning of the Investment Company Act of 1940,
as amended. None of the Loan Parties is engaged principally, or as one of its
important activities, directly or indirectly, in the business of extending
credit for the purpose of purchasing or carrying margin stock. None of the
proceeds of any of the Advances will be used by any Loan Party to purchase or
carry margin stock or will be made available by any Loan Party or any of their
respective Subsidiaries in any manner to any other Person to enable or assist
such Person in purchasing or carrying margin stock. Terms for which meanings are
provided in Regulation U of the Board of Governors of the Federal Reserve System
or any regulations substituted therefor, as from time to time in effect, are
used in this paragraph with such meanings.
6.16 ERISA. None of the Loan Parties maintains or contributes to any
Pension Plan subject to Title IV of ERISA, except as set forth on Schedule 6.16
hereto; and there is no accumulated funding deficiency within the meaning of
ERISA, or any outstanding liability with respect to any of the Pension Plans
owed to the PBGC or any successor thereto other than future premiums due and
owing pursuant to Section 4006 of ERISA, and no "reportable event" as defined in
ERISA has occurred with respect to any Pension Plan other than an event for
which the notice requirement has been waived by the PBGC. None of the Loan
Parties has engaged in a transaction with respect to any Pension Plan, other
than a transaction for which an exemption is available and has been obtained,
which could subject the Company or the Subsidiaries to a tax or penalty imposed
by Section 4975 of the Code or Section 502(i) of ERISA in an amount that would
be material. All Pension Plans are in material compliance with the requirements
of the Internal Revenue Code and ERISA.
6.17 Conditions Affecting Business or Properties. As of the Effective Date,
neither the respective businesses nor the properties of any Loan Party is
affected by any fire, explosion, accident, strike, lockout or other dispute,
drought, storm, hail, earthquake, embargo, Act of God, or other casualty (not
covered by insurance) which is reasonably likely to have a Material Adverse
Effect, or if such event or condition were to continue for more than ten (10)
additional days would reasonably be expected to have a Material Adverse Effect.
6.18 Environmental and Safety Matters. Except as set forth in Schedules
6.18 and 6.12 and except for such matters as are not reasonably likely to have a
Material Adverse Effect:
(a) all facilities and property owned or leased by the Loan Parties are in
material compliance with all Hazardous Material Laws;
(b) to the knowledge of the Company, there have been no unresolved and
outstanding past, and there are no pending or threatened
(i) written claims, complaints, notices or requests for information
received by any Loan Party with respect to any alleged violation
of any Hazardous Material Law, or
(ii) written complaints, notices or inquiries to any Loan Party
regarding potential liability of the Loan Parties under any
Hazardous Material Law; and
(c) to the knowledge of the Company, no conditions exist at, on or under
any property now or previously owned or leased by the Loan Parties
which, with the passage of time, or the giving of notice or both, are
reasonably likely to give rise to liability under any Hazardous
Material Law or create a significant adverse effect on the value of
the property.
6.19 Subsidiaries. Except as disclosed on Schedule 6.19 hereto as of the
Effective Date, and thereafter, except as disclosed to the Agent in writing from
time to time, Company has no Subsidiaries.
6.20 Accuracy of Information. (a) Each of the financial statements
furnished to Agent and the Banks prior to the date of this Agreement, fairly
presents in all material respects (subject to year-end adjustments and the
omission of notes thereto in the case of interim statements) the financial
condition of the Company and its Subsidiaries and the results of their
operations for the periods covered thereby, and has been prepared in accordance
with GAAP.
(b) Since September 30, 2003 there has been no material adverse change in
the financial condition of Company and the Guarantors taken as a
whole, to the best knowledge of the Company, neither Company nor any
of the Guarantors has any material contingent obligations (including
any liability for taxes) not disclosed by or reserved against in
Company's financial statements for the fiscal quarter ended September
30, 2003, except as set forth on Schedule 6.20 hereof, and at the
present time there are no unrealized or anticipated losses from any
present commitment of Company or any of the Guarantors which
contingent obligations and losses in the aggregate would reasonably be
expected to have a Material Adverse Effect.
6.21 Labor Relations. None of the Loan Parties is engaged in any unfair
labor practice that could reasonably be expected to have a Material Adverse
Effect. There is (i) no unfair labor practice complaint pending against the Loan
Parties or to the knowledge of Company, threatened against any of them, before
the National Labor Relations Board, and no grievance or arbitration proceeding
arising out of or under any collective bargaining agreement is so pending
against any of them or, to the knowledge of Company, threatened against any of
them, (ii) no strike, labor dispute, slowdown or stoppage pending against the
Company or any Guarantor or to the knowledge of Company, threatened against any
of them and (iii) no union representation question existing with respect to the
employees of the Loan Parties, in each case or in the aggregate which could
reasonably be expected to have a Material Adverse Effect.
6.22 Existing Debt. As of the Effective Date, Schedule 8.1(b) hereto sets
forth a true and complete list of all Debt for borrowed money (other than
Indebtedness) of the Company and the Guarantors as of the Effective Date that is
in excess of $50,000 for any one issue and is to remain outstanding after giving
effect to this transaction, in each case showing the aggregate principal amount
thereof and the name of the company (or issuer) and any other entity which
directly or indirectly guaranteed such debt.
6.23 Solvency. After giving effect to the consummation of the transactions
contemplated by this Agreement, the Company and the Guarantors will each be
solvent, able to pay its indebtedness as it matures and will have capital
sufficient to carry on its business and all business in which it is about to
engage. This Agreement is being executed and delivered by the Company to Agent
and the Banks in good faith and in exchange for fair, equivalent consideration.
Neither the Company nor any Guarantor intends to nor does management of the
Company or any Guarantor believe it will incur debts beyond its ability to pay
as they mature. Neither the Company nor any Guarantor contemplates filing a
petition in bankruptcy or for an arrangement or reorganization under the
Bankruptcy Code or any similar law of any jurisdiction now or hereafter in
effect relating to the Company or any Guarantor, nor does the Company or any
Guarantor have any knowledge of any threatened bankruptcy or insolvency
proceedings against the Company or any Guarantor.
7. AFFIRMATIVE COVENANTS
The Company covenants and agrees that it will, and, as applicable, it will
cause each of the Subsidiaries, until the Revolving Credit Maturity Date and
thereafter until expiration of all Letters of Credit and final payment in full
of the Indebtedness and the performance by the Company of all other obligations
under this Agreement and the other Loan Documents, to:
7.1 Financial Statements. Furnish to the Agent with sufficient copies for
each Bank:
(a) as soon as available, but in any event within ninety (90) days after
the end of each fiscal year of the Company a copy of the audited
Consolidated and Consolidating financial statements of the Company and
its consolidated Subsidiaries as at the end of such year and the
related audited statements of income, stockholders equity, and cash
flows for such year and underlying assumptions, setting forth in each
case in comparative form the figures for the previous year, certified
as being fairly stated in all material respects by an independent
certified public accounting firm reasonably satisfactory to the Agent
and the Banks; and
(b) as soon as available, but in any event not later than forty five (45)
days after the end of each month, Company prepared unaudited
Consolidated and Consolidating balance sheets of the Company and the
Guarantors as at the end of such month and the related unaudited
statements of income, stockholders equity and cash flows of the
Company and the Guarantors for the portion of the fiscal year through
the end of such fiscal month, setting forth in each case in
comparative form the figures for the corresponding periods in the
previous year, and certified by a Responsible Officer as being fairly
stated in all material respects; and
all such financial statements to be complete and correct in all material
respects and to be prepared in reasonable detail and in accordance with GAAP
throughout the periods reflected therein and with prior periods (except as
approved by such officer and disclosed therein), provided however that the
financial statements delivered pursuant to clauses (b) and (c) hereof will not
be required to include footnotes and will be subject to year-end adjustments.
7.2 Certificates; Other Information. Furnish to the Agent with sufficient
copies for each Bank:
(a) Within forty five (45) days after and as the end of each month, a
Covenant Compliance Report;
(b) On or before October 31 of each year, the Company shall prepare and
deliver to the Agent and the Banks projections of the Company and the
Guarantors for the next succeeding fiscal year, on a month to month
basis and for the following fiscal year on an annual basis, including
a balance sheet as at the end of each relevant period and income
statements and statements of cash flows for each relevant period and
for the period commencing at the beginning of the fiscal year and
ending on the last day of such relevant period;
(c) Within twenty (20) days after and as of the end of each month agings
of Accounts and accounts payables of Company and the Borrowing Base
Obligors, an inventory report of Company and the Borrowing Base
Obligors and any such schedule shall be accompanied, if so requested
by Agent by a true and correct copy of the invoices evidencing
Eligible Accounts and by evidence of delivery or performance and other
supporting detail satisfactory to Agent;
(d) Within twenty (20) days after and as of the end of each month, a
Borrowing Base Certificate;
(e) Promptly upon receipt thereof, the Company shall deliver copies of all
significant reports submitted by the Company's firm of certified
public accountants in connection with each annual, interim or special
audit or review of any type of the financial statements or related
internal control systems of the Company and the Guarantors made by
such accountants, including any comment letter submitted by such
accountants to managements in connection with their services;
(f) Promptly and in form to be reasonably satisfactory to the requesting
Bank, such additional financial and/or other information, or other
reports as any Bank may from time to time reasonably request.
7.3 Payment of Obligations. Pay, discharge or otherwise satisfy at or
before maturity or before they become delinquent, as the case may be, all of its
material obligations of whatever nature, except where the amount or validity
thereof is currently being contested in good faith by appropriate proceedings
and reserves in conformity with GAAP with respect thereto have been provided on
the books of the Company.
7.4 Conduct of Business and Maintenance of Existence; Compliance with Laws.
(a) Continue to engage solely in the business now conducted by the Company
or the Guarantors and businesses related thereto and preserve, renew
and keep in full force and effect its existence, except as otherwise
permitted pursuant to Sections 8.4 and 8.5;
(b) Take all reasonable action it deems necessary in its reasonable
business judgment to maintain all rights, privileges and franchises
necessary in the normal conduct of its business except as otherwise
permitted pursuant to Section 8.5 or where the failure to so maintain
would not reasonably be expected to have a Material Adverse Effect;
and
(c) Comply with all Contractual Obligations and Requirements of Law,
except to the extent that failure to comply therewith could not, in
the aggregate, reasonably be expected to have a Material Adverse
Effect.
7.5 Maintenance of Property; Insurance. (a) Keep all material property it
deems, in its reasonable business judgment, useful and necessary in its business
in working order (ordinary wear and excepted), except where the failure to
maintain such property would not reasonably be expected to have a Material
Adverse Effect; and (b) maintain insurance coverage on its physical assets and
against other business risks in such amounts and of such types as are
customarily carried by companies similar in size and nature (including without
limitation casualty and public liability and property damage insurance), and in
the event of acquisition of additional property, real or personal, or of
incurrence of additional risks of any nature, increase such insurance coverage
in such manner and to such extent as prudent business judgment and present
practice or any applicable Requirements of Law would dictate, and in the case of
all policies covering any Collateral, all such insurance policies shall provide
that the loss payable thereunder shall be payable to Company or such Guarantor,
and to the Agent for the benefit of the Banks (Agent as mortgagee, or, in the
case of personal property interests, lender loss payee) as their respective
interests may appear, and certificates evidencing such policies, including all
endorsements thereto, to be deposited with Agent upon its request.
7.6 Inspection of Property; Books and Records, Discussions. Permit Agent
and each Bank, through their authorized attorneys, accountants and
representatives (a) at all reasonable times during normal business hours, upon
the request of Agent or such Bank, to examine Company's and each Guarantor's
books, accounts, records, ledgers and assets and properties of every kind and
description wherever located; (b) at reasonable times and intervals, upon the
request of the Majority Banks, to conduct full or partial Collateral audits of
Company and the Subsidiaries, with all reasonable costs and expenses of such
audits to be reimbursed by Company; and (c) permit Agent and each Bank or their
authorized representatives, at reasonable times and intervals, to visit all of
their respective offices, discuss their respective financial matters with their
respective officers and independent certified or chartered public accountants,
as applicable, and, by this provision, Company authorizes such accountants to
discuss the finances and affairs of Company and the Guarantors (provided that
Company is given an opportunity to participate in such discussions) and examine
any of its or their books and other corporate records. Notwithstanding the
foregoing, all information furnished to the Agent or the Banks hereunder shall
be subject to the undertaking of the Banks set forth in Section 13.11 hereof.
7.7 Notices. Promptly give notice to the Agent of:
(a) the occurrence of any Default or Event of Default of which the Company
or any Guarantor has knowledge;
(b) any (i) default or event of default under any Contractual Obligation
of Company or any Guarantor of which the Company or such Guarantor had
knowledge or (ii) litigation, investigation or proceeding which may
exist at any time between the Company or any Guarantor and any
Governmental Authority or other third party, which in either case, if
not cured or if it is reasonably likely to be adversely determined, as
the case may be, would have a Material Adverse Effect or (iii) any
change in the financial condition of the Company or any of the
Guarantors since the date of the last audited financial statements
delivered pursuant to Section 7.1(a) hereof which could reasonably be
expected to have a Material Adverse Effect;
(c) any event which the Company reasonably believes is reasonably likely
to have a Material Adverse Effect;
(d) promptly after becoming aware of the taking by the Internal Revenue
Service or any foreign taxing jurisdiction of a written tax position
(or any such tax position taken by the Company or any Subsidiary)
which could reasonably be expected to have a Material Adverse Effect
upon the Company or any Subsidiary setting forth the details of such
position and the financial impact thereof;
(e) not less than 10 days prior to the proposed effective date thereof,
copies of any proposed material amendments, restatements or other
modification to the Subordinated Debt Documents;
(f) provide prompt written notice to the Agent of (i) all jurisdictions in
which the Company or any of the Guarantors becomes qualified after the
Effective Date to transact business, and (ii) any material change
after the Effective Date in the authorized and issued capital stock or
other equity interests of the Company or any of the Subsidiaries or
any other material amendment to their charter, by-laws or other
organizational documents, such notice, in each case, to identify the
applicable jurisdictions, capital structures or amendments as
applicable.
Each notice pursuant to this Section shall be accompanied by a statement of a
Responsible Officer setting forth details of the occurrence referred to therein
and stating what action the Company has taken or proposes to take with respect
thereto.
7.8 Hazardous Material Laws.
(a) Use and operate all of its facilities and properties in material
compliance with all applicable Hazardous Material Laws, keep all
required material permits, approvals, certificates, licenses and other
authorizations required under such Hazardous Material Laws in effect
and remain in material compliance therewith, and handle all Hazardous
Materials in material compliance with all applicable Hazardous
Material Laws, in each case, except where the failure to do so would
not reasonably be expected to have a Material Adverse Effect;
(b) Promptly notify Agent and provide copies upon receipt of all written
claims, complaints, notices or inquiries received by the Company or
any of the Guarantors of a material nature relating to its facilities
and properties or compliance with Hazardous Material Laws;
(c) To the extent necessary to materially comply with Hazardous Material
Laws, remediate or monitor contamination arising from a release or
disposal of Hazardous Material;
7.9 Fixed Charge Coverage Ratio. Maintain as of the end of each month of
Company, a Fixed Coverage Ratio of not less than 1.20 to 1.0.
7.10 Tangible Net Worth. Maintain as of the end of each month a Tangible
Net Worth of not less than the Base Tangible Net Worth.
7.11 Funded Debt to EBITDA Ratio. Maintain as of the end of each month,
Funded Debt to EBITDA Ratio of not more than 3.25 to 1.0.
7.12 Leverage Ratio. Maintain as of the end of each fiscal quarter a
Leverage Ratio of not more than the following amounts:
Closing through September 29, 2004.............................7.5 to 1.0
September 30, 2004 through September 29, 2005..................5.5 to 1.0
September 30, 2005 and thereafter..............................4.0 to 1.0
7.13 Current Ratio. Maintain as of the end of each month, a Current Ratio
of not less than 1.05 to 1.0.
7.14 Governmental and Other Approvals. Apply for, obtain and/or maintain in
effect, as applicable, all authorizations, consents, approvals, licenses,
qualifications, exemptions, filings, declarations and registrations (whether
with any court, governmental agency, regulatory authority, securities exchange
or otherwise) which are necessary in connection with the execution, delivery and
performance by such Loan Parties, of this Agreement, the other Loan Documents,
or any other documents or instruments to be executed and/or delivered by such
Loan Parties in connection therewith or herewith, except where the failure to so
apply for, obtain or maintain would not reasonably be expected to have a
Material Adverse Effect.
7.15 Compliance with ERISA. Comply in all material respects with all
applicable requirements imposed by ERISA as presently in effect or hereafter
promulgated or the Internal Revenue Code, including, but not limited to, the
minimum funding requirements of any Pension Plan, except where the failure to
comply is not likely to have a Material Adverse Effect.
7.16 ERISA Notices. Promptly notify Agent upon the occurrence of any of the
following events if such event is likely to have a Material Adverse Effect:
(a) the termination, other than a standard termination, as defined in
ERISA, of any Pension Plan subject to Subtitle C of Title IV of ERISA;
(b) the Company's or any Guarantor's receipt of notice of the appointment
of a trustee by a United States District Court to administer any
Pension Plan subject to Title IV of ERISA;
(c) the Company's or any Guarantor's receipt of notice of the commencement
by the Pension Benefit Guaranty Corporation, or any successor thereto,
of any proceeding to terminate any Pension Plan subject to Title IV of
ERISA;
(d) the failure of the Company or any Guarantor to make any payment in
respect of any Pension Plan required under Section 412 of the Internal
Revenue Code;
(e) the withdrawal of the Company or any Guarantor from any Multiemployer
Plan if the Company reasonably believes that such withdrawal would
give rise to the imposition of withdrawal liability with respect
thereto; or
(f) the occurrence of a "reportable event" which is required to be
reported by the Company under Section 4043 of ERISA as defined in
ERISA other than any event for which the reporting requirement has
been waived by the PBGC or a "prohibited transaction" as defined in
Section 406 of ERISA or Section 4975 of the Internal Revenue Code
other than a transaction for which a statutory exemption is available
or an administrative exemption has been obtained which in either case
is likely to have a Material Adverse Effect.
7.17 Security; Defense of Collateral. Take such actions as the Agent or the
Majority Banks may from time to time reasonably request to establish and
maintain first perfected security interests in and Liens on all of its
Collateral, subject only to Permitted Liens and other liens permitted under
Section 8.2 hereof; and defend the Collateral from any Liens other than Liens
permitted by Section 8.2.
7.18 Use of Proceeds. Use all Advances of the Revolving Credit as set forth
in Section 2.15 hereof; and not use any portion of the proceeds of any such
advances for the purpose of purchasing or carrying any "margin stock" (as
defined in Regulation U of the Board of Governors of the Federal Reserve System)
in any manner which violates the provisions of Regulation T, U or X of said
Board of Governors or for any other purpose in violation of any applicable
statute or regulation.
7.19 Future Subsidiaries; Additional Collateral.
(a) With respect to each Person which becomes a Subsidiary of the Company
(directly or indirectly) subsequent to the Effective Date, within
thirty (30) days of the date such Person is created, acquired or
otherwise becomes a Subsidiary (whichever first occurs), cause such
new Subsidiary to execute and deliver to the Agent (x) a Joinder
Agreement (attached to the Guaranty as Exhibit A) whereby such
Subsidiary becomes obligated as a Guarantor under the Guaranty and (y)
a joinder agreement to the Security Agreement;
(b) With respect to real property located in the United States acquired by
the Company or any Guarantor after the Effective Date, not later than
forty-five (45) days after such property is acquired, the Company
shall execute or cause to be executed (unless waived by Agent and the
Majority Banks) a Mortgage covering such property, together with such
real estate documentation listed on Schedule 7.19 hereto;
in each case in form reasonably satisfactory to the Agent and the Majority
Banks, in their reasonable discretion, together with such supporting
documentation, including without limitation corporate authority items,
certificates and opinions of counsel, as reasonably required by the Agent and
the Majority Banks and the Company shall take, or cause to be taken, such steps
as are necessary or advisable under applicable law to perfect the liens granted
under this Section 7.17.
7.20 Further Assurances. Execute and deliver or cause to be executed and
delivered to Agent within a reasonable time following Agent's request, and at
the Company's expense, such other documents or instruments as Agent may
reasonably require to effectuate more fully the purposes of this Agreement or
the other Loan Documents.
7.21 Bank Accounts. Maintain all of their principal bank accounts with the
Agent.
8. NEGATIVE COVENANTS.
Company covenants and agrees that, until the Revolving Credit Maturity Date
and thereafter until expiration of all Letters of Credit and final payment in
full of the Indebtedness and the performance by Company and the Guarantors of
all other obligations under this Agreement and the other Loan Documents, it will
not, and will not permit any of its Subsidiaries, to:
8.1 Limitation on Debt. Create, incur, assume or suffer to exist any Debt,
except:
(a) Indebtedness under this Agreement and the other Loan Documents;
(b) any Debt existing on the Effective Date and set forth in Schedule
8.1(b) attached hereto and any renewals or refinancing of such Debt in
amounts not exceeding the scheduled amounts (less any required
amortization according to the terms thereof), on substantially the
same terms as in effect on the Effective Date and otherwise in
compliance with this Agreement;
(c) Debt of the Company or a Guarantor, excluding Debt otherwise permitted
under this Section 8.1, incurred to finance the acquisition of fixed
or capital assets (whether pursuant to a loan or a Capitalized Lease),
provided that the aggregate amount of all such Debt shall not exceed
One Million Dollars ($1,000,000) at any one time outstanding;
(d) Subordinated Debt;
(e) Debt under any Hedging Transactions;
(f) Guarantee Obligations permitted under Section 8.3 or any other Loan
Document;
(g) current unsecured trade, utility or nonextraordinary accounts payable
(including without limitation, operating leases and short term Debt
owed to vendors) arising in the ordinary course of Company's or such
Subsidiary's businesses;
(h) Debt in respect of taxes, assessments or governmental charges to the
extent that payment thereof shall not at the time be required to be
made in accordance with Section 7.3;
(i) Debt arising from judgments or decrees in circumstances not
constituting an Event of Default under Section 9.1;
(j) Intercompany Loans, but only to the extent permitted under Section 8.8
hereof;
(k) Non-current liabilities for post-employment healthcare and other
insurance benefits;
(l) Debt secured by Permitted Liens.
8.2 Limitation on Liens. Create, incur, assume or suffer to exist any Lien
upon any of its property, assets or revenues, whether now owned or hereafter
acquired, except for:
(a) Permitted Liens;
(b) Liens securing Debt permitted by Section 8.1(c), provided that (i)
such Liens shall be created substantially simultaneously with the
acquisition of such fixed or capital asset, (ii) such Liens do not at
any time encumber any property other than the property, equipment or
improvements financed by such Debt, and (iii) the principal amount of
Debt secured by any such Lien shall at no time exceed 100% of the
original purchase price of such property, equipment or improvements;
(c) Liens in favor of Agent, as security for the Indebtedness (including
Indebtedness under any Bank Hedging Agreements) and the obligations of
the Company and the Guarantors to Comerica Bank relating to the
Comerica Agreement;
(d) attachments, judgments and other similar Liens (other than any
judgment that is described in clause (h) of Section 9.1 and
constitutes an Event of Default thereunder), arising in connection
with court proceedings, provided that the execution or other
enforcement of such Liens is effectively stayed within 30 days and
claims secured thereby are being actively contested in good faith by
appropriate proceedings;
(e) other Liens, existing on the Effective Date, set forth on Schedule 8.2
attached hereto and any renewals or refinancing of the Debt secured
thereby in amounts not exceeding the scheduled amounts (less any
required amortization according to the terms thereof), on
substantially the same terms as in effect on the Effective Date and
otherwise in compliance with this Agreement.
8.3 Limitation on Guarantee Obligations. Create, incur, assume or suffer to
exist any Guarantee Obligation except (a) the Guaranties, (b) Guarantee
Obligations not otherwise permitted under this Section 8.3 in respect of Debt
incurred by any Person, provided that the aggregate principal amount of such
Debt at any time outstanding does not exceed $500,000, (c) Guarantee Obligations
existing on December 31, 2003 and set forth on Schedule 8.3 hereof, and (d)
Guarantee Obligations arising with respect to customary indemnification and
purchase price adjustment obligations incurred in connection with any sale or
disposition of assets.
8.4 Acquisitions. Except for Permitted Acquisitions, purchase or otherwise
acquire or become obligated for the purchase of all or substantially all or any
material portion of the assets or business interests of any Person, firm or
corporation, or any shares of stock (or other ownership interests) of any
corporation, trusteeship or association, or any business or going concern, or in
any other manner effectuate an expansion of present business in any material
respect by acquisition.
8.5 Limitation on Mergers, other Fundamental Changes or Sale of Assets.
Enter into any merger or consolidation or convey, sell, lease, assign, transfer
or otherwise dispose of any of its property, business or assets (including,
without limitation, receivables and leasehold interests), whether now owned or
hereafter acquired or make any material change in its capital structure or
present method of conducting business, except:
(a) inventory leased or sold in the ordinary course of business;
(b) obsolete or worn out property or equipment, or property or equipment
no longer useful in the conduct of Company's or any Guarantor's
business to the extent such dispositions do not exceed $500,000 during
any single fiscal year of Company;
(c) (i) mergers or consolidations of any Subsidiary with or into Company
(so long as Company shall be the continuing or surviving entity), (ii)
the Merger and (iii) mergers or consolidations of any Subsidiary with
or into any Guarantor, so long as such Guarantor shall be the
continuing or surviving entity; provided, however, that at the time of
each such merger or consolidation under sub-clauses (i) through (iii)
of this clause (c), both before and after giving effect thereto, no
Default or Event of Default shall have occurred and be continuing and
no Domestic Subsidiary may merger or consolidate with a Foreign
Subsidiary;
(d) any Subsidiary may liquidate or dissolve into the Company or any
Domestic Guarantor if the Company determines in good faith that such
liquidation or dissolution is in the best interests of the Company;
(e) provided that no Default or Event of Default has occurred and is
continuing at the time of each such sale (both before and after giving
effect to such Asset Sale), (i) Asset Sales in which the sales price
is at least the fair market value of the assets sold and the aggregate
amount of such Asset Sales is less than $500,000 in any fiscal year
and the consideration received is cash or cash equivalents and (ii)
other Asset Sales approved by the Majority Banks; and
(f) the sale or disposition of Permitted Investments and other cash
equivalents in the ordinary course of business.
8.6 Restricted Payments. Declare or make, or permit any Guarantor to,
declare or make any distributions, dividend, payment or other distribution of
assets, properties, cash, rights, obligations or securities (collectively,
"Distributions") on account of any membership interests or any shares of any
class of its capital stock, as applicable, or issue, purchase, redeem or
otherwise acquire for value any membership interests or any shares of its
capital stock, as applicable, or any warrants, rights or options to acquire such
shares or membership interests, now or hereafter outstanding, except that the
Guarantors may make Distributions to the Company and its Consolidated
Subsidiaries and the Company may make the Special Dividend.
8.7 Limitation on Capital Expenditures. Make or commit to make (by way of
the acquisition of securities of a Person or otherwise) any expenditure in
respect of the purchase or other acquisition of fixed or capital assets
(excluding any such asset acquired in connection with normal replacement and
maintenance programs properly charged to current operations) except for:
(a) Permitted Acquisitions permitted by Section 8.4 hereof; and
(b) Capital Expenditures which shall not exceed $5,000,000 during any
fiscal year (determined on a combined basis for Company and its
Subsidiaries).
8.8 Limitation on Investments, Loans and Advances. Make or allow to remain
outstanding any Investment (whether such investment shall be of the character of
investment in shares of stock, evidences of indebtedness or other securities or
otherwise) in, or any loans or advances to, any Person, firm, corporation or
other entity or association, other than:
(a) Permitted Investments;
(b) Investments (including Intercompany Loans, Advances or Investments)
existing on the Effective Date and listed on Schedule 8.8 hereof;
(c) extensions of trade credit in the ordinary course of business;
(d) Intercompany Loans, Advances or Investments made on or after the
Effective Date by the Company to any Guarantor or by any Guarantor to
the Company (provided that any Intercompany Loan hereunder shall be
evidenced by and funded under an Intercompany Note encumbered pursuant
to the appropriate Collateral Document), provided that at the time any
such loan, advance or investment is made (before and after giving
effect thereto) no Event of Default under Section 9.1(a) or 9.1(j) has
occurred and is continuing;
(e) Investments in respect of Hedging Transactions;
(f) Investments received in connection with the bankruptcy or
reorganization of, or settlement of delinquent accounts and disputes
with, customers and suppliers, in each case in the ordinary course of
business;
(g) loans and advances to employees, officers and directors of the Company
or any of the Guarantors in an aggregate amount not to exceed
$250,000;
(h) Permitted Acquisitions permitted pursuant to Section 8.4;
(i) Investments constituting deposits made in connection with the purchase
of goods or services in the ordinary course of business in an
aggregate amount for such deposits not to exceed $500,000 at any one
time.
In valuing any Investments for the purpose of applying the limitations set forth
in this Section 8.8 (except as otherwise expressly provided herein), such
Investment shall be taken at the original cost thereof, without allowance for
any subsequent write-offs or appreciation or depreciation, but less any amount
repaid or recovered on account of capital or principal.
8.9 Transactions with Affiliates. Except as set forth in Schedule 8.9
(which transactions described on Schedule 8.9 are on terms that are fair and
reasonable to the Company and the Guarantors), enter into any transaction,
including, without limitation, any purchase, sale, lease or exchange of property
or the rendering of any service, or providing for the payment of any management
or other fee, with any Affiliate of a Company or any Subsidiary except (a)
transactions otherwise permitted under this Agreement; (b) transactions in the
ordinary course of Company's or such Subsidiary's business and upon fair and
reasonable terms no less favorable to the Company or such Subsidiary than it
would obtain in a comparable arms length transaction from unrelated third
parties; and (c) transactions between or among Company and the Guarantors not
involving any other Affiliates.
8.10 Sale and Leaseback. Enter into any arrangement with any Person
providing for the leasing by the Company or any Subsidiary of real or personal
property which has been or is to be sold or transferred by the Company or such
Subsidiary to such Person or to any other Person to whom funds have been or are
to be advanced by such Person on the security of such property or rental
obligations of the Company or such Subsidiary, as the case may be.
8.11 Limitation on Negative Pledge Clauses. After the Effective Date,
except for such agreements, documents or instruments which are in effect on the
Effective Date and which are set forth on Schedule 8.11 hereto, enter into any
agreement, document or instrument which would restrict or prevent the Company
and its Subsidiaries from granting Agent on behalf of Banks liens upon, security
interests in and pledges of their respective assets which are senior in priority
to all other Liens, except for Permitted Liens and any other agreements,
documents or instruments pursuant to which Liens not prohibited by the terms of
this Agreement are created, entered into, or allowed to exist.
8.12 Prepayment of Debts. Prepay, purchase, redeem or defease any Debt for
money borrowed (including without limitation any Subordinated Debt) or any
capital leases, excluding refinancings or renewals of such Debt in the same or
lesser amounts (and giving effect to any required amortization) on substantially
the same terms or on terms more favorable to the obligor thereunder, and
otherwise in compliance with this Agreement.
8.13 Amendment of Subordinated Debt Documents. Amend, modify or otherwise
alter (or suffer to be amended, modified or altered) any of the terms and
conditions of those documents or instruments evidencing or otherwise related to
any Debt set forth on Schedule 8.1, any Subordinated Debt, any provision thereof
which in any case could reasonably be expected to be adverse to the Banks, in
any case without the prior written approval of Agent and the Majority Banks.
8.14 Modification of Certain Agreements. Make, permit or consent to any
amendment or other modification to the constitutional documents of any of the
Loan Parties (including the Company's articles of incorporation), or any
documents delivered in connection with the transaction or any Permitted
Acquisition, except to the extent that any such amendment (i) does not violate
the terms and conditions of this Agreement or any of the other Loan Documents,
(ii) does not materially adversely affect the interest of the Banks as creditor
under this Agreement, the other Loan Documents or any other document or
instrument in any respect, or (iii) could not reasonably be expected to have a
Material Adverse Effect.
8.15 Fiscal Year. Change its fiscal year.
9. DEFAULTS
9.1 Events of Default. The occurrence of any of the following events shall
constitute an Event of Default hereunder:
(a) non-payment when due of (i) the principal or interest on the
Indebtedness under the Revolving Credit (including the Swing Line),
(ii) any Reimbursement Obligation, or (iii) any Fees;
(b) non-payment of any money by the Company under this Agreement or by
Company or any Guarantor under any of the other Loan Documents to
which it is a party, other than as set forth in subsection (a) above,
within five (5) Business Days after notice from Agent that the same is
due and payable;
(c) (i) default in the observance or performance of any of the conditions,
covenants or agreements of Company set forth in Sections 7.2(c),
7.2(d), 7.4(a), 7.5, 7.6, 7.7(a), 7.9 through 7.13, inclusive, 7.18,
7.21 or 8; or (ii) default in the observance or performance of any of
the conditions, covenants or agreements of Company set forth in
Sections 7.1(a), 7.1(a) or 7.2(a) and continuance thereof for ten (10)
days;
(d) default in the observance or performance of any of the other
conditions, covenants or agreements set forth in this Agreement by
Company and continuance thereof for a period of thirty (30)
consecutive days after written notice from Agent;
(e) any representation or warranty made by Company or any Guarantor herein
or in any instrument submitted pursuant hereto proves untrue or
misleading in any material adverse respect when made;
(f) default in the observance or performance of or failure to comply with
any of the conditions, covenants or agreements of Company or any
Guarantor set forth in any of the other Loan Documents, and the
continuance thereof beyond any period of grace or cure specified in
any such document or, in the case of the Collateral Documents,
continuance thereof for a period of thirty (30) days after written
notice from Agent;
(g) (i) default in the payment of any indebtedness for borrowed money
(other than Indebtedness hereunder, but including without limitation
any Subordinated Debt) of the Company or any Subsidiary in excess of
Twenty Five Thousand Dollars ($25,000) (or the equivalent thereof in
any currency other than Dollars) individually or in the aggregate when
due (whether by acceleration or otherwise) and continuance thereof
beyond any applicable period of cure or (ii) failure to comply with
the terms of any other obligation of the Company or any Subsidiary
with respect to any indebtedness for borrowed money (other than
Indebtedness hereunder) in excess of Twenty Five Thousand Dollars
($25,000) (or the equivalent thereof in any currency other than
Dollars) individually or in the aggregate, which continues beyond any
applicable period of cure and which would permit the holder or holders
thereto to accelerate such other indebtedness for borrowed money;
(h) the rendering of any judgment(s) for the payment of money in excess of
the sum of Twenty Five Thousand Dollars ($25,000) (or the equivalent
thereof in any currency other than Dollars) individually or in the
aggregate against the Company or any Subsidiary, and such judgments
shall remain unpaid, unvacated, unbonded or unstayed by appeal or
otherwise for a period of thirty (30) consecutive days, except as
covered by adequate insurance with a reputable carrier as to which the
relevant insurance company has acknowledged coverage;
(i) the occurrence of (i) a "reportable event", as defined in ERISA, which
is determined to constitute grounds for a distress termination by the
PBGC of any Pension Plan subject to Title IV of ERISA maintained or
contributed to by or on behalf of the Company or any Subsidiary for
the benefit of any of its employees or for the appointment by the
appropriate United States District Court of a trustee to administer
such Pension Plan and such reportable event is not corrected and such
determination is not revoked within sixty (60) days after notice
thereof has been given to the plan administrator of such Pension Plan
(without limiting any of Agent's or any Bank's other rights or
remedies hereunder), or (ii) the institution of proceedings by the
Pension Benefit Guaranty Corporation to terminate any such Pension
Plan or (iii) the appointment of a trustee by the appropriate United
States District Court to administer any such Pension Plan, which in
either case of (i), (ii) or (iii) could reasonably be expected to have
a Material Adverse Effect;
(j) the Company or any Subsidiary shall be dissolved or liquidated (or any
judgment, order or decree therefor shall be entered) or; if a
creditors' committee shall have been appointed for the business of the
Company or any Subsidiary; or if the Company or any Subsidiary shall
have made a general assignment for the benefit of creditors or shall
have been adjudicated bankrupt and if not an adjudication based on a
filing by Company or a Subsidiary it shall not have been dismissed
within sixty (60) days, or shall have filed a voluntary petition in
bankruptcy or for reorganization or to effect a plan or arrangement
with creditors or shall fail to pay its debts generally as such debts
become due in the ordinary course of business (except as contested in
good faith and for which adequate reserves are made in such party's
financial statements); or shall file an answer to a creditor's
petition or other petition filed against it, admitting the material
allegations thereof for an adjudication in bankruptcy or for
reorganization; or shall have applied for or permitted the appointment
of a receiver or trustee or custodian for any of its property or
assets; or such receiver, trustee or custodian shall have been
appointed for any of its property or assets (otherwise than upon
application or consent of Company or any Subsidiary) and shall not
have been removed within sixty (60) days; or if an order shall be
entered approving any petition for reorganization of Company or any
Subsidiary and shall not have been reversed or dismissed within sixty
(60) days; or Company or any Subsidiary shall take any action
(corporate or other) authorizing or in furtherance any of the actions
described above in this subsection;
(k) default in the observance or performance of or any failure to comply
with any of the conditions, covenants or agreements of any
Subordinated Debt Holder under the terms of any Subordination
Agreement and continuance thereof for a period of fifteen (15) days
after written notice from Agent to the applicable Subordinated Debt
Holder and Company;
(l) any material provision of any Collateral Document or any Guaranty
shall at any time for any reason cease to be valid, binding and
enforceable against the Company or any Guarantor (other than in
accordance with the terms thereof), as applicable, or the validity,
binding effect or enforceability thereof shall be contested by the
Company or any Guarantor, or the Company or any Guarantor shall deny
that it has any or further liability or obligation under any
Collateral Document or the Guaranty, or any such Loan Document shall
be terminated (other than in accordance with the terms thereof),
invalidated, revoked or set aside or in any way cease to give or
provide to the Banks and the Agent the benefits purported to be
created thereby; or
(m) if the Agent or the Majority Banks shall deem themselves to be
insecure;
(n) if there shall be any change for any reason whatsoever in the
management of Company or any Subsidiary which in the judgment or Agent
or Majority Banks is reasonably likely to have a Material Adverse
Effect or if there shall occur a Change of Control.
9.2 Exercise of Remedies. If an Event of Default has occurred and is
continuing hereunder: (a) the Agent may, and shall, upon being directed to do so
by the Majority Banks, declare the Commitments terminated; (b) the Agent may,
and shall, upon being directed to do so by the Majority Banks, declare the
entire unpaid principal Indebtedness, including the Notes, immediately due and
payable, without presentment, notice or demand, all of which are hereby
expressly waived by Company; (c) upon the occurrence of any Event of Default
specified in Section 9.1(j) and notwithstanding the lack of any declaration by
Agent under preceding clauses (a) or (b), the entire unpaid principal
Indebtedness shall become automatically and immediately due and payable, and the
Commitments shall be automatically and immediately terminated; (d) the Agent
shall, upon being directed to do so by the Majority Banks, demand immediate
delivery of cash collateral, and Company and each Account Party agrees to
deliver such cash collateral upon demand, in an amount equal to the maximum
amount that may be available to be drawn at any time prior to the stated expiry
of all outstanding Letters of Credit; and (e) the Agent may, and shall, if
directed to do so by the Majority Banks or the Banks, as applicable (subject to
the terms hereof), exercise any remedy permitted by this Agreement, the other
Loan Documents or law.
9.3 Rights Cumulative. No delay or failure of Agent and/or Banks in
exercising any right, power or privilege hereunder shall affect such right,
power or privilege, nor shall any single or partial exercise thereof preclude
any further exercise thereof, or the exercise of any other power, right or
privilege. The rights of Agent and Banks under this Agreement are cumulative and
not exclusive of any right or remedies which Banks would otherwise have.
9.4 Waiver by Company of Certain Laws. To the extent permitted by
applicable law, the Company hereby agrees to waive, and does hereby absolutely
and irrevocably waive and relinquish the benefit and advantage of any valuation,
stay, appraisement, extension or redemption laws now existing or which may
hereafter exist, which, but for this provision, might be applicable to any sale
made under the judgment, order or decree of any court, on any claim for interest
on the Notes, or any security interest or mortgage contemplated by or granted
under or in connection with this Agreement. These waivers have been voluntarily
given, with full knowledge of the consequences thereof.
9.5 Waiver of Defaults. No Event of Default shall be waived by the Banks
except in a writing signed by an officer of the Agent in accordance with Section
13.10 hereof. No single or partial exercise of any right, power or privilege
hereunder, nor any delay in the exercise thereof, shall preclude other or
further exercise of their rights by Agent or the Banks. No waiver of any Event
of Default shall extend to any other or further Event of Default. No forbearance
on the part of the Agent or the Banks in enforcing any of their rights shall
constitute a waiver of any of their rights. Company expressly agrees that this
Section may be waived or modified only in accordance with Section 13.10 and may
not be waived or modified by the Banks or Agent by course of performance,
estoppel or otherwise.
9.6 Set Off. Upon the occurrence and during the continuance of any Event of
Default, each Bank may at any time and from time to time, without notice to the
Company but subject to the provisions of Section 10.3 hereof (any requirement
for such notice being expressly waived by the Company), setoff and apply against
any and all of the obligations of the Company now or hereafter existing under
this Agreement, whether owing to such Bank, any Affiliate of such Bank or any
other Bank or the Agent, any and all deposits (general or special, time or
demand, provisional or final) at any time held and other indebtedness at any
time owing by such Bank to or for the credit or the account of Company and any
property of Company from time to time in possession of such Bank, irrespective
of whether or not such deposits held or indebtedness owing by such Bank may be
contingent and unmatured and regardless of whether any Collateral then held by
Agent or any Bank is adequate to cover the Indebtedness. Promptly following any
such setoff, such Bank shall give written notice to Agent and to Company of the
occurrence thereof. The Company hereby grants to the Banks and the Agent a lien
on and security interest in all such deposits, indebtedness and property as
collateral security for the payment and performance of all of the obligations of
the Company under this Agreement. The rights of each Bank under this Section 9.6
are in addition to the other rights and remedies (including, without limitation,
other rights of setoff) which such Bank may have.
10. PAYMENTS, RECOVERIES AND COLLECTIONS
10.1 Payment Procedure.
(a) Except as otherwise provided herein, all payments by the Company in
respect of principal of, or interest on, any Advance in Dollars under
the Revolving Credit, or in respect of any Letter of Credit
Obligations under the Revolving Credit or Fees hereunder which are
payable in Dollars shall be made without setoff or counterclaim on the
date specified for payment under this Agreement not later than 1:00
p.m. (Detroit time) in Dollars in immediately available funds to
Agent, for the ratable account of the Banks, at Agent's office located
at Xxx Xxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx 00000-0000. Upon receipt of
each such payment, the Agent shall make prompt payment to each
applicable Bank, or, in respect of Eurocurrency-based Advances, such
Bank's Eurocurrency Lending Office, in like funds and currencies, of
all amounts received by it for the account of such Bank.
(b) Unless the Agent shall have been notified by Company prior to the date
on which any payment to be made by Company is due that Company does
not intend to remit such payment, the Agent may, in its sole
discretion and without obligation to do so, assume that the Company
has remitted such payment when so due and the Agent may, in reliance
upon such assumption, make available to each Bank on such payment date
an amount equal to such Bank's share of such assumed payment. If
Company has not in fact remitted such payment to the Agent each Bank
shall forthwith on demand repay to the Agent the amount of such
assumed payment made available or transferred to such Bank, together
with the interest thereon, in respect of each day from and including
the date such amount was made available by the Agent to such Bank to
the date such amount is repaid to the Agent at a rate per annum equal
to (i) for Prime-based Advances, the Federal Funds Effective Rate
(daily average), as the same may vary from time to time, and (ii) with
respect to Eurocurrency-based Advances or Quoted Rate Advances,
Agent's aggregate marginal cost (including the cost of maintaining any
required reserves or deposit insurance and of any fees, penalties,
overdraft charges or other costs or expenses incurred by Agent) of
carrying such amount.
(c) Subject to the definition of Interest Period, whenever any payment to
be made hereunder shall otherwise be due on a day which is not a
Business Day, such payment shall be made on the next succeeding
Business Day and such extension of time shall be included in computing
interest, if any, in connection with such payment.
(d) All payments to be made by Company under this Agreement or any of the
Notes (including without limitation payments under the Swing Line)
shall be made without setoff or counterclaim, as aforesaid, and,
subject to full compliance by each Bank (and each assignee and
participant pursuant to Section 13.8) with Section 13.12, without
deduction for or on account of any present or future withholding or
other taxes of any nature imposed by any governmental authority or of
any political subdivision thereof or any federation or organization of
which such governmental authority may at the time of payment be a
member (other than any net income, net profits or franchise taxes
imposed on the Agent or any Bank as a result of a present or former
connection between the Agent or such Bank and the governmental
authority, political subdivision, federation or organization imposing
such taxes), unless Company is compelled by law to make payment
subject to such tax. In such event, Company shall:
(i) pay to the Agent for Agent's own account and/or, as the case may
be, for the account of the Banks (and, in the case of Advances of
the Swing Line, pay to the Swing Line Bank which funded such
Advances) such additional amounts as may be necessary to ensure
that the Agent and/or such Bank or Banks receive a net amount
equal to the full amount which would have been receivable had
payment not been made subject to such tax; and
(ii) remit such tax to the relevant taxing authorities according to
applicable law, and send to the Agent or the applicable Bank
(including the Swing Line Bank) or Banks, as the case may be,
such certificates or certified copy receipts as the Agent or such
Bank or Banks shall reasonably require as proof of the payment by
the Company, of any such taxes payable by the Company.
As used herein, the terms "tax", "taxes" and "taxation" include all taxes (other
than taxes on or measured by the overall income of a Person), levies, imposts,
duties, charges, fees, deductions and withholdings and any restrictions or
conditions resulting in a charge together with interest (and any taxes payable
upon the amounts paid or payable pursuant to this Section 10.1) thereon, or the
payment or delivery of funds into or out of any jurisdiction other than the
United States (whether assessed against any of the Company, Agent or any of the
Banks). Company shall be reimbursed by the applicable Bank for any payment made
by Company under this Section 10.1 if the applicable Bank is not in compliance
with its obligations under Section 13.12.
10.2 Application of Proceeds of Collateral. Notwithstanding anything to the
contrary in this Agreement, after an Event of Default and the exercise of
remedies pursuant to Article 9 of this Agreement or the other Loan Documents,
the proceeds of any Collateral, together with any offsets, voluntary payments by
Company or any Subsidiary of the Company or others and any other sums received
or collected in respect of the Indebtedness, shall be applied, first, to the
Indebtedness under the Revolving Credit (including the Swing Line), and any
Reimbursement Obligations on a pro rata basis (or in such order and manner as
determined by the Majority Banks; subject, however, to the applicable
Percentages of the loans held by each of the Banks), next, to any other
Indebtedness on a pro rata basis, and then, if there is any excess, to Company
and the Subsidiaries, as the case may be. Subject to the terms of this Section
10.2, the application of such proceeds and other sums to the Advances of the
Revolving Credit, the Reimbursement Obligations and under any Bank Hedging
Agreements shall be based on each Bank's Percentage of the aggregate of the
loans.
10.3 Pro-rata Recovery. If any Bank shall obtain any payment or other
recovery (whether voluntary, involuntary, by application of setoff or otherwise)
on account of principal of, or interest on, any of the Indebtedness in excess of
its pro rata share of payments then or thereafter obtained by all Banks upon
principal of and interest on all Indebtedness, such Bank shall purchase from the
other Banks such participations in the Revolving Credit and/or Reimbursement
Obligation held by them as shall be necessary to cause such purchasing Bank to
share the excess payment or other recovery ratably with the Percentage with each
of them in accordance with the applicable Percentages of the Banks; provided,
however, that if all or any portion of the excess payment or other recovery is
thereafter recovered from such purchasing holder, the purchase shall be
rescinded and the purchase price restored to the extent of such recovery, but
without interest.
10.4 Margin Adjustments. Adjustments to the Applicable Margins, based on
Schedule 1.1, shall be implemented on a quarterly basis as follows:
(a) Such adjustments shall be given prospective effect only, effective as
to all Advances outstanding hereunder, upon the date of delivery of
the financial statements under Sections 7.1(a) and 7.1(b) hereunder
and the Covenant Compliance Report under Section 7.2(a) hereof, in
each case establishing applicability of the appropriate adjustment, in
each case with no retroactivity or claw-back. In the event the Company
fails timely to deliver such financial statements or the Covenant
Compliance Report and such failure continues for three (3) Business
Days, then (but without affecting the Event of Default resulting
therefrom) from the date delivery of such financial statements and
report was required until such financial statements and report are
delivered, the margins and fee percentages shall be at the next higher
level (if any) on the Pricing Matrix attached to this Agreement as
Schedule 1.1.
(b) From the Effective Date until the required date of delivery (or, if
earlier, delivery) under Section 7.1(b) of the Company's financial
statements for the fiscal quarter ending March 31, 2004, the margins
shall be those set forth under the Level 3 column of the Pricing
Matrix attached to this Agreement as Schedule 1.1. Thereafter, all
margins and fee percentages shall be based upon the Company's
quarterly financial statements and Covenant Compliance Reports,
subject to recalculation as provided in Subsection 10.4(a) above.
11. CHANGES IN LAW OR CIRCUMSTANCES; INCREASED COSTS
11.1 Reimbursement of Prepayment Costs. If the Company makes any payment of
principal with respect to any Eurocurrency-based Advance or Quoted Rate Advance
on any day other than the last day of the Interest Period applicable thereto
(whether voluntarily, by acceleration, or otherwise), or if the Company converts
or refunds (or attempts to convert or refund) any such Advance on any day other
than the last day of the Interest Period applicable thereto; or if the Company
fails to borrow, refund or convert into any Eurocurrency-based Advance or Quoted
Rate Advance after notice has been given by the Company to Agent in accordance
with the terms hereof requesting such Advance, or if the Company fails to make
any payment of principal or interest in respect of a Eurocurrency-based Advance
or Quoted Rate Advance when due, the Company shall reimburse Agent for itself
and/or on behalf of any Bank, as the case may be, within ten (10) Business Days
of written demand therefor for any resulting loss, cost or expense incurred by
Agent and Banks, as the case may be as a result thereof, including, without
limitation, any such loss, cost or expense incurred in obtaining, liquidating,
employing or redeploying deposits from third parties, whether or not Agent and
Banks, as the case may be, shall have funded or committed to fund such Advance.
Such amount payable by the Company to Agent for itself and/or on behalf of any
Bank, as the case may be, shall be deemed to equal an amount equal to the
excess, if any, of (a) the amount of interest which would have accrued on the
amount so prepaid, or not so borrowed, refunded or converted, for the period
from the date of such prepayment or of such failure to borrow, refund or
convert, through the last day of the relevant Interest Period, at the applicable
rate of interest for said Advance(s) provided under this Agreement, over (b) the
amount of interest (as reasonably determined by Agent and Banks, as the case may
be) which would have accrued to Agent and Banks, as the case may be, on such
amount by placing such amount on deposit for a comparable period with leading
banks in the interbank eurocurrency market. Calculation of any amounts payable
to any Bank under this paragraph shall be made as though such Bank shall have
actually funded or committed to fund the relevant Advance through the purchase
of an underlying deposit in an amount equal to the amount of such Advance and
having a maturity comparable to the relevant Interest Period; provided, however,
that any Bank may fund any Eurocurrency-based Advance or Quoted Rate Advance, as
the case may be, in any manner it deems fit and the foregoing assumptions shall
be utilized only for the purpose of the calculation of amounts payable under
this paragraph. Upon the written request of Company, Agent and Banks shall
deliver to Company a certificate setting forth the basis for determining such
losses, costs and expenses, which certificate shall be conclusively presumed
correct, absent manifest error.
11.2 Eurocurrency Lending Office. For any Advance to which the
Eurocurrency-based Rate is applicable, if Agent or a Bank, as applicable, shall
designate a Eurocurrency Lending Office which maintains books separate from
those of the rest of Agent or such Bank, Agent or such Bank, as the case may be,
shall have the option of maintaining and carrying the relevant Advance on the
books of such Eurocurrency Lending Office.
11.3 Circumstances Affecting Eurocurrency-based Rate Availability. If with
respect to any Interest Period, Agent or the Majority Banks (after consultation
with Agent) shall determine in good faith that, by reason of circumstances
affecting the foreign exchange and interbank markets generally, deposits in
eurodollars, in the applicable amounts are not being offered to the Agent or
such Banks for such Interest Period, then Agent shall forthwith give notice
thereof to the Company. Thereafter, until Agent notifies the Company that such
circumstances no longer exist, (i) the obligation of Banks to make
Eurocurrency-based Advances, and the right of the Company to convert an Advance
to or refund an Advance as a Eurocurrency-based Advance, as the case may be,
shall be suspended, and (ii) effective upon the last day of each Interest Period
related to any existing Eurocurrency-based Advance, such Eurocurrency-based
Advance shall automatically be converted into a Prime-based Advance (without
regard to satisfaction of any conditions to conversion contained elsewhere
herein).
11.4 Laws Affecting Eurocurrency-based Advance Availability. If, after the
date of this Agreement, the introduction of, or any change in, any applicable
law, rule or regulation or in the interpretation or administration thereof by
any governmental authority charged with the interpretation or administration
thereof, or compliance by any of the Banks (or any of their respective
Eurocurrency Lending Offices) with any request or directive (whether or not
having the force of law) of any such authority, shall make it unlawful or
impossible for any of the Banks (or any of their respective Eurocurrency Lending
Offices) to honor its obligations hereunder to make or maintain any Advance with
interest at the Eurocurrency-based Rate, such Bank shall forthwith give notice
thereof to the Company and to Agent. Thereafter, (a) the obligations of the
applicable Banks to make Eurocurrency-based Advances and the right of the
Company to convert an Advance into or refund an Advance as a Eurocurrency-based
Advance shall be suspended and thereafter the Company may select as Applicable
Interest Rates only those which remain available and which are permitted to be
selected hereunder, and (b) if any of the Banks may not lawfully continue to
maintain an Advance to the end of the then current Interest Period applicable
thereto as a Eurocurrency-based Advance, the applicable Advance shall
immediately be converted to a Prime-based Advance and the Prime-based Rate shall
be applicable thereto for the remainder of such Interest Period. For purposes of
this Section, a change in law, rule, regulation, interpretation or
administration shall include, without limitation, any change made or which
becomes effective on the basis of a law, rule, regulation, interpretation or
administration presently in force, the effective date of which change is delayed
by the terms of such law, rule, regulation, interpretation or administration.
11.5 Increased Cost of Eurocurrency-based Advances. If the adoption after
the date of this Agreement of, or any change after the date of this Agreement
in, any applicable law, rule or regulation of or in the interpretation or
administration thereof by any governmental authority, central bank or comparable
agency charged with the interpretation or administration thereof, or compliance
by Agent or any of the Banks (or any of their respective Eurocurrency Lending
Offices) with any request or directive (whether or not having the force of law)
made by any such authority, central bank or comparable agency after the date
hereof:
(a) shall subject any of the Banks (or any of their respective
Eurocurrency Lending Offices) to any tax, duty or other charge with
respect to any Advance or shall change the basis of taxation of
payments to any of the Banks (or any of their respective Eurocurrency
Lending Offices) of the principal of or interest on any Advance or any
other amounts due under this Agreement in respect thereof (except for
changes in the rate of tax on the overall net income of any of the
Banks or any of their respective Eurocurrency Lending Offices); or
(b) shall impose, modify or deem applicable any reserve (including,
without limitation, any imposed by the Board of Governors of the
Federal Reserve System), special deposit or similar requirement
against assets of, deposits with or for the account of, or credit
extended by, any of the Banks (or any of their respective Eurocurrency
Lending Offices) or shall impose on any of the Banks (or any of their
respective Eurocurrency Lending Offices) or the foreign exchange and
interbank markets any other condition affecting any Advance;
and the result of any of the foregoing is to increase the costs to any of the
Banks of maintaining any part of the Indebtedness hereunder as a
Eurocurrency-based Advance or to reduce the amount of any sum received or
receivable by any of the Banks under this Agreement in respect of a
Eurocurrency-based Advance, with respect to Advances to the Company, then such
Bank shall promptly notify Agent, and Agent (or such Bank, as aforesaid) shall
promptly notify the Company of such fact and demand compensation therefor in
writing and, within fifteen (15) days after such notice, the Company agrees to
pay to such Bank such additional amount or amounts as will compensate such Bank
or Banks for such increased cost or reduction. Agent will promptly notify the
Company of any event of which it has knowledge which will entitle the Banks to
compensation pursuant to this Section, or which will cause the Company to incur
additional liability under Article 11 hereof, provided that Agent shall incur no
liability whatsoever to the Banks or the Company in the event it fails to do so.
A certificate of Agent (or such Bank, if applicable) setting forth in reasonable
detail the basis for determining such additional amount or amounts necessary to
compensate such Bank or Banks shall accompany such written demand and shall be
prepared in good faith and conclusively presumed to be correct save for manifest
error.
11.6 Capital Adequacy and Other Increased Costs. In the event that after
the Effective Date the adoption of or any change in any applicable law, treaty,
rule or regulation (whether domestic or foreign) now or hereafter in effect and
whether or not presently applicable to any Bank or Agent, or any interpretation
or administration thereof by any governmental authority charged with the
interpretation or administration thereof, or compliance by any Bank or Agent
with any guideline, request or directive of any such authority (whether or not
having the force of law), including any risk based capital guidelines, affects
or would affect the amount of capital required to be maintained by such Bank or
Agent (or any corporation controlling such Bank or Agent) and such Bank or
Agent, as the case may be, determines that the amount of such capital is
increased by or based upon the existence of such Bank's or Agent's obligations
or Advances hereunder and such increase has the effect of reducing the rate of
return on such Bank's or Agent's (or such controlling corporation's) capital as
a consequence of such obligations or Advances hereunder to a level below that
which such Bank or Agent (or such controlling corporation) could have achieved
but for such circumstances (taking into consideration its policies with respect
to capital adequacy) by an amount deemed by such Bank or Agent to be material
(collectively, "Increased Costs"), then Agent or such Bank shall notify the
Company in writing, and thereafter the Company shall pay to such Bank or Agent,
as the case may be, within fifteen (15) days of written demand therefor from
such Bank or Agent, additional amounts sufficient to compensate such Bank or
Agent (or such controlling corporation) for any increase in the amount of
capital and reduced rate of return which such Bank or Agent reasonably
determines to be allocable to the existence of such Bank's or Agent's
obligations or Advances hereunder. A statement setting forth the amount of such
compensation, the methodology for the calculation and the calculation thereof
which shall also be prepared in good faith and in reasonable detail by such Bank
or Agent, as the case may be, shall be submitted by such Bank or by Agent to the
Company, reasonably promptly after becoming aware of any event described in this
Section 11.6 and shall be conclusive, absent manifest error in computation.
11.7 Substitution of Banks. If (a) the obligation of any Bank to make
Eurocurrency-based Advances has been suspended pursuant to Section 11.3 or 11.4
or (b) any Bank has demanded compensation under Section 3.4(c), 11.1, 11.5 or
11.6, (in each case, an "Affected Bank"), then the Company shall have the right
(subject to Section 13.8 hereof), with the assistance of the Agent, to seek a
substitute Bank or Banks (which may be one or more of the Banks (the "Purchasing
Bank" or "Purchasing Banks") to purchase the Advances of the Revolving Credit,
and/or Swing Line, as the case may be and assume the commitments (including
without limitation its participations in Swing Line Advances and Letters of
Credit) under this Agreement of such Affected Bank. The Affected Bank shall be
obligated to sell its Advances of the Revolving Credit and/or Swing Line, as the
case may be, and assign its commitments to such Purchasing Bank or Purchasing
Banks within fifteen days after receiving notice from Company requiring it to do
so, at an aggregate price equal to the outstanding principal amount thereof,
plus unpaid interest accrued thereon up to but excluding the date of the sale.
In connection with any such sale, and as a condition thereof, Company shall pay
to the Affected Bank all fees accrued for its account hereunder to but excluding
the date of such sale, plus, if demanded by the Affected Bank within ten
Business Days after such sale, (i) the amount of any compensation which would be
due to the Affected Bank under Section 11.1 if the Company had prepaid the
outstanding Eurocurrency-based Advances of the Affected Bank on the date of such
sale and (ii) any additional compensation accrued for its account under Sections
3.4(c) and 11.5 to but excluding said date. Upon such sale, the Purchasing Bank
or Purchasing Banks shall assume the Affected Bank's commitment, and the
Affected Bank shall be released from its obligations hereunder to a
corresponding extent. If any Purchasing Bank is not already one of the Banks,
the Affected Bank, as assignor, such Purchasing Bank, as assignee, Company and
the Agent, shall enter into an Assignment Agreement pursuant to Section 13.8
hereof, whereupon such Purchasing Bank shall be a Bank party to this Agreement,
shall be deemed to be an assignee hereunder and shall have all the rights and
obligations of a Bank with a Percentage equal to its ratable share of the then
applicable Revolving Credit Aggregate Commitment. In connection with any
assignment pursuant to this Section 11.7, the Company or the Purchasing Bank
shall pay to the Agent the administrative fee for processing such assignment
referred to in Section 13.8.
11.8 Right of Banks to Fund through Branches and Affiliates. Each Bank
(including without limitation the Swing Line Bank) may, if it so elects, fulfill
its commitment as to any Advance hereunder by designating a branch or Affiliate
of such Bank to make such Advance; provided that (a) such Bank shall remain
solely responsible for the performances of its obligations hereunder and (b) no
such designation shall result in any material increased costs to the Company.
12. AGENT
12.1 Appointment of Agent. Each Bank and the holder of each Note (if
issued) irrevocably appoints and authorizes the Agent to act on behalf of such
Bank or holder under this Agreement and the other Loan Documents and to exercise
such powers hereunder and thereunder as are specifically delegated to Agent by
the terms hereof and thereof, together with such powers as may be reasonably
incidental thereto, including without limitation the power to execute or
authorize the execution of financing or similar statements or notices, and other
documents. In performing its functions and duties under this Agreement, the
Agent shall act solely as agent of the Banks and does not assume and shall not
be deemed to have assumed any obligation towards or relationship of agency or
trust with or for Company. Each Bank agrees (which agreement shall survive any
termination of this Agreement) to reimburse Agent for all reasonable
out-of-pocket expenses (including house and outside attorneys' fees and
disbursements) incurred by Agent hereunder or in connection herewith or with an
Event of Default or in enforcing the obligations of Company under this Agreement
or the other Loan Documents or any other instrument executed pursuant hereto,
and for which Agent is not reimbursed by Company, pro rata according to such
Bank's Percentage, but excluding any such expense resulting from Agent's gross
negligence or wilful misconduct. Any such amounts so paid by the Banks shall
constitute additional Indebtedness hereunder. Agent shall not be required to
take any action under the Loan Documents, or to prosecute or defend any suit in
respect of the Loan Documents, unless indemnified to its satisfaction by the
Banks against loss, costs, liability and expense (excluding liability resulting
from its gross negligence or wilful misconduct). If any indemnity furnished to
Agent shall become impaired, it may call for additional indemnity and cease to
do the acts indemnified against until such additional indemnity is given.
12.2 Deposit Account with Agent. Company hereby authorizes Agent, in
Agent's sole discretion, upon notice to Company to charge its general deposit
account(s), if any, maintained with Agent for the amount of any principal,
interest, or other amounts or costs due under this Agreement when the same
become due and payable under the terms of this Agreement or the Notes.
12.3 Scope of Agent's Duties. The Agent shall have no duties or
responsibilities except those expressly set forth herein, and shall not, by
reason of this Agreement or otherwise, have a fiduciary relationship with any
Bank (and no implied covenants or other obligations shall be read into this
Agreement against the Agent). None of Agent, its Affiliates nor any of their
respective directors, officers, employees or agents shall be liable to any Bank
for any action taken or omitted to be taken by it or them under this Agreement
or any document executed pursuant hereto, or in connection herewith or therewith
with the consent or at the request of the Majority Banks (or all of the Banks
for those acts requiring consent of all of the Banks) (except for its or their
own wilful misconduct or gross negligence), nor be responsible for or have any
duties to ascertain, inquire into or verify (a) any recitals or warranties made
by the Company, or any Subsidiary or Affiliate of the Company, or any officer
thereof contained herein or therein, (b) the effectiveness, enforceability,
validity or due execution of this Agreement or any document executed pursuant
hereto or any security thereunder, (c) the performance by Company of their
respective obligations hereunder or thereunder, or (d) the satisfaction of any
condition hereunder or thereunder, including without limitation the making of
any Advance or the issuance of any Letter of Credit. Agent and its Affiliates
shall be entitled to rely upon any certificate, notice, document or other
communication (including any cable, telegraph, telex, facsimile transmission or
oral communication) believed by it to be genuine and correct and to have been
sent or given by or on behalf of a proper person. Agent may treat the payee of
any Note as the holder thereof. Agent may employ agents and may consult with
legal counsel (who may be counsel for the Company), independent public
accountants and other experts selected by it and shall not be liable to the
Banks (except as to money or property received by them or their authorized
agents), for the negligence or misconduct of any such agent selected by it with
reasonable care or for any action taken or omitted to be taken by it in good
faith in accordance with the advice of such counsel, accountants or experts.
12.4 Successor Agent. Agent may resign as such at any time upon at least 30
days prior notice to Company and all Banks. If Agent at any time shall resign or
if the office of Agent shall become vacant for any other reason, Majority Banks
shall, by written instrument, appoint successor agent(s) satisfactory to such
Majority Banks, and, so long as no Default or Event of Default has occurred and
is continuing, to Company. Such successor agent shall thereupon become the Agent
hereunder, as applicable, and shall be entitled to receive from the prior Agent
such documents of transfer and assignment as such successor Agent may reasonably
request. Any such successor Agent shall be a commercial bank organized under the
laws of the United States or any state thereof and shall have a combined capital
and surplus of at least $500,000,000. If a successor is not so appointed or does
not accept such appointment before the resigning Agent's resignation becomes
effective, the resigning Agent may appoint a temporary successor to act until
such appointment by the Majority Banks and, if applicable, the Company is made
and accepted or if no such temporary successor is appointed as provided above by
the resigning Agent, the Majority Banks shall thereafter perform all of the
duties of the resigning Agent hereunder until such appointment by the Majority
Banks and, if applicable, the Company is made and accepted. Such successor Agent
shall succeed to all of the rights and obligations of the resigning Agent as if
originally named. The resigning Agent shall duly assign, transfer and deliver to
such successor Agent all moneys at the time held by the resigning Agent
hereunder after deducting therefrom its expenses for which it is entitled to be
reimbursed. Upon such succession of any such successor Agent, the resigning
Agent shall be discharged from its duties and obligations, in its capacity as
Agent, hereunder, except for its gross negligence or wilful misconduct arising
prior to its resignation hereunder, and the provisions of this Article 12 shall
continue in effect for the benefit of the resigning Agent in respect of any
actions taken or omitted to be taken by it while it was acting as Agent.
12.5 Credit Decisions. Each Bank acknowledges that it has, independently of
Agent and each other Bank and based on the financial statements of Company and
such other documents, information and investigations as it has deemed
appropriate, made its own credit decision to extend credit hereunder from time
to time. Each Bank also acknowledges that it will, independently of Agent and
each other Bank and based on such other documents, information and
investigations as it shall deem appropriate at any time, continue to make its
own credit decisions as to exercising or not exercising from time to time any
rights and privileges available to it under this Agreement or any document
executed pursuant hereto.
12.6 Authority of Agent to Enforce This Agreement. Each Bank, subject to
the terms and conditions of this Agreement, authorizes the Agent with full power
and authority as attorney-in-fact to institute and maintain actions, suits or
proceedings for the collection and enforcement of any Indebtedness outstanding
under this Agreement or any other Loan Document and to file such proofs of debt
or other documents as may be necessary to have the claims of the Banks allowed
in any proceeding relative to Company, or any of its Subsidiaries, or their
respective creditors or affecting their respective properties, and to take such
other actions which Agent considers to be necessary or desirable for the
protection, collection and enforcement of the Notes, this Agreement or the other
Loan Documents.
12.7 Indemnification of Agent. The Banks agree to indemnify the Agent and
its Affiliates (to the extent not reimbursed by Company, but without limiting
any obligation of Company to make such reimbursement), ratably according to
their respective Percentages, from and against any and all claims, damages,
losses, liabilities, costs or expenses of any kind or nature whatsoever
(including, without limitation, reasonable fees and disbursements of counsel)
which may be imposed on, incurred by, or asserted against the Agent and its
Affiliates in any way relating to or arising out of this Agreement, any of the
other Loan Documents or the transactions contemplated hereby or any action taken
or omitted by the Agent and its Affiliates under this Agreement or any of the
Loan Documents; provided, however, that no Bank shall be liable for any portion
of such claims, damages, losses, liabilities, costs or expenses resulting from
the Agent's or its Affiliates's gross negligence or willful misconduct. Without
limitation of the foregoing, each Bank agrees to reimburse the Agent and its
Affiliates promptly upon demand for its ratable share of any reasonable
out-of-pocket expenses (including, without limitation, reasonable fees and
expenses of counsel) incurred by the Agent and its Affiliates in connection with
the preparation, execution, delivery, administration, modification, amendment or
enforcement (whether through negotiations, legal proceedings or otherwise) of,
or legal advice in respect of rights or responsibilities under, this Agreement
or any of the other Loan Documents, to the extent that the Agent and its
Affiliates is not reimbursed for such expenses by Company, but without limiting
the obligation of Company to make such reimbursement. Each Bank agrees to
reimburse the Agent and its Affiliates promptly upon demand for its ratable
share of any amounts owing to the Agent and its Affiliates by the Banks pursuant
to this Section, provided that, if the Agent or its Affiliates is subsequently
reimbursed by the Company for such amounts, it shall refund to the Banks on a
pro rata basis the amount of any excess reimbursement. If the indemnity
furnished to the Agent and its Affiliates under this Section shall, in the
judgment of the Agent, be insufficient or become impaired, the Agent may call
for additional indemnity from the Banks and cease, or not commence, to take any
action until such additional indemnity is furnished. Any amounts paid by the
Banks hereunder to the Agent or its Affiliates shall be deemed to constitute
part of the Indebtedness hereunder.
12.8 Knowledge of Default. It is expressly understood and agreed that the
Agent shall be entitled to assume that no Event of Default has occurred and is
continuing, unless the officers of the Agent immediately responsible for matters
concerning this Agreement shall have been notified in a writing specifying such
Event of Default and stating that such notice is a "notice of default" by a Bank
or by Company. Upon receiving such a notice, the Agent shall promptly notify
each Bank of such Event of Default and provide each Bank with a copy of such
notice and, shall endeavor to provide such notice to the Banks within three (3)
Business Days (but without any liability whatsoever in the event of its failure
to do so). Agent shall also furnish the Banks, promptly upon receipt, with
copies of all other notices or other information required to be provided by
Company hereunder.
12.9 Agent's Authorization; Action by Banks. Except as otherwise expressly
provided herein, whenever the Agent is authorized and empowered hereunder on
behalf of the Banks to give any approval or consent, or to make any request, or
to take any other action on behalf of the Banks (including without limitation
the exercise of any right or remedy hereunder or under the other Loan
Documents), the Agent shall be required to give such approval or consent, or to
make such request or to take such other action only when so requested in writing
by the Majority Banks or the Banks, as applicable hereunder. Action that may be
taken by Majority Banks or all of the Banks, as the case may be (as provided for
hereunder) may be taken (i) pursuant to a vote at a meeting (which may be held
by telephone conference call) as to which all of the Banks have been given
reasonable advance notice, or (ii) pursuant to the written consent of the
requisite percentages of the Banks as required hereunder, provided that all of
the Banks are given reasonable advance notice of the requests for such consent.
12.10 Enforcement Actions by the Agent. Except as otherwise expressly
provided under this Agreement or in any of the other Loan Documents and subject
to the terms hereof, Agent will take such action, assert such rights and pursue
such remedies under this Agreement and the other Loan Documents as the Majority
Banks or all of the Banks, as the case may be (as provided for hereunder), shall
direct; provided, however, that the Agent shall not be required to act or omit
to act if, in the judgment of the Agent, such action or omission may expose the
Agent to personal liability or is contrary to this Agreement, any of the Loan
Documents or applicable law. Except as expressly provided above or elsewhere in
this Agreement or the other Loan Documents, no Bank (other than the Agent,
acting in its capacity as agent) shall be entitled to take any enforcement
action of any kind under any of the Loan Documents.
12.11 Collateral Matters.
(a) The Agent is authorized on behalf of all the Banks, without the
necessity of any notice to or further consent from the Banks, from
time to time to take any action with respect to any Collateral or the
Collateral Documents which may be necessary to perfect and maintain a
perfected security interest in and Liens upon the Collateral granted
pursuant to the Loan Documents.
(b) The Banks irrevocably authorize the Agent, at its option and in its
discretion, to release any Lien granted to or held by the Agent upon
any Collateral (i) upon termination of the Revolving Credit Aggregate
Commitment and payment in full of all Indebtedness payable under this
Agreement and under any other Loan Document; (ii) constituting
property sold or to be sold or disposed of as part of or in connection
with any disposition expressly permitted hereunder; (iii) constituting
property in which a Loan Party owned no interest at the time the Lien
was granted or at any time thereafter; or (iv) if approved, authorized
or ratified in writing by the Majority Banks, or all the Banks, as the
case may be, as provided in Section 13.10. Upon request by the Agent
at any time, the Banks will confirm in writing the Agent's authority
to release particular types or items of Collateral pursuant to this
Section 12.11(b).
12.12 Agent in its Individual Capacities. Comerica Bank and its Affiliates
and its successors and assigns, shall have the same rights and powers hereunder
as any other Bank and may exercise or refrain from exercising the same as though
such Bank were not the Agent. Comerica Bank and its Affiliates and their
respective successors and assigns may (without having to account therefor to any
Bank) accept deposits from, lend money to, and generally engage in any kind of
banking, trust, financial advisory or other business with Company (or its
Subsidiaries) as if such Bank were not acting as Agent hereunder, and may accept
fees and other consideration therefor without having to account for the same to
the Banks.
12.13 Co-Agent. The Bank identified on the facing page or signature pages
of this Agreement as Co-Agent (if any) shall not have any right, power,
obligation, liability, responsibility or duty under this Agreement other than
those applicable to all Banks as such. Without limiting the foregoing, the Bank
so identified as Co-Agent shall not have or be deemed to have any fiduciary
relationship with any Bank. Each Bank acknowledges that it has not relied, and
will not rely, on the Bank so identified in deciding to enter into this
Agreement or in taking or not taking action hereunder.
12.14 Agent's Fees. Until the Indebtedness has been repaid and discharged
in full and no commitment to fund any loan hereunder is outstanding, the Company
shall pay to the Agent, as applicable, an agency fee(s) set forth (or to be set
forth from time to time) in the applicable Fee Letter on the terms set forth
therein. The Agent's Fees described in this Section 12.14 shall not be
refundable under any circumstances.
13. MISCELLANEOUS
13.1 Accounting Principles. (a) Where the character or amount of any asset
or liability or item of income or expense is required to be determined or any
consolidation or other accounting computation is required to be made for the
purposes of this Agreement, it shall be done, unless otherwise specified herein,
in accordance with GAAP. Furthermore, all financial statements required to be
delivered hereunder, subject to year-end audit adjustments thereto and the
omission of footnote disclosure in the case of unaudited statements, shall be
prepared in accordance with GAAP.
(a) In calculating the financial covenants, they shall be determined on a
pro forma basis for each period during which a Permitted Acquisition
shall have occurred, giving effect to such Permitted Acquisition as if
it had occurred on the first day of the relevant period.
13.2 Consent to Jurisdiction. Company, Agent and Banks hereby irrevocably
submit to the non-exclusive jurisdiction of any United States Federal Court or
Michigan state court sitting in Detroit, Michigan in any action or proceeding
arising out of or relating to this Agreement or any of the Loan Documents and
Company, Agent and Banks hereby irrevocably agree that all claims in respect of
such action or proceeding may be heard and determined in any such United States
Federal Court or Michigan state court. Company irrevocably consent to the
service of any and all process in any such action or proceeding brought in any
court in or of the State of Michigan by the delivery of copies of such process
to Company at its address specified on the signature page hereto or by certified
mail directed to such address or such other address as may be designated by
Company in a notice to the other parties that complies as to delivery with the
terms of Section 13.6. Nothing in this Section shall affect the right of the
Banks and the Agent to serve process in any other manner permitted by law or
limit the right of the Banks or the Agent (or any of them) to bring any such
action or proceeding against Company or any Subsidiary or any of its or their
property in the courts with subject matter jurisdiction of any other
jurisdiction. Company hereby irrevocably waives any objection to the laying of
venue of any such suit or proceeding in the above described courts.
13.3 Law of Michigan. This Agreement and the Notes shall be governed by and
construed and enforced in accordance with the laws of the State of Michigan
(without regard to its conflict of laws provisions). Whenever possible each
provision of this Agreement shall be interpreted in such manner as to be
effective and valid under applicable law, but if any provision of this Agreement
shall be prohibited by or invalid under applicable law, such provision shall be
ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of this
Agreement.
13.4 Interest. In the event the obligation of Company to pay interest on
the principal balance of the Notes is or becomes in excess of the maximum
interest rate which Company is permitted by law to contract or agree to pay,
giving due consideration to the execution date of this Agreement, then, in that
event, the rate of interest applicable with respect to such Bank's applicable
Percentages shall be deemed to be immediately reduced to such maximum rate and
all previous payments in excess of the maximum rate shall be deemed to have been
payments in reduction of principal and not of interest.
13.5 Closing Costs and Other Costs; Indemnification. (a) Company agrees to
pay, or reimburse the Agent for payment of, within five Business Days of demand
therefor (except for closing costs which shall be payable on the Effective Date)
(i) all reasonable closing costs and expenses, including, by way of description
and not limitation, house and outside attorney fees (without duplication of fees
and expenses for the same services) and advances, appraisal and accounting fees,
and lien search fees incurred by Agent in connection with the commitment,
consummation and closing of the loans contemplated hereby or in connection with
the administration of this Agreement or any amendment, refinancing or
restructuring of the credit arrangements provided under this Agreement, (ii) all
stamp and other taxes (excluding income, franchise and other similar taxes) and
fees payable or determined to be payable in connection with the execution,
delivery, filing, recording or amendment of this Agreement and the Loan
Documents and the consummation of the transactions contemplated hereby, and any
and all liabilities with respect to or resulting from any delay in paying or
omitting to pay such taxes or fees, and (iii) all reasonable costs and expenses
of the Agent or any of the Banks (including reasonable fees and expenses of
outside counsel (but without duplication of fees and expenses for the same
services) in connection with any action or proceeding relating to a court order,
injunction or other process or decree restraining or seeking to restrain the
Agent or any of the Banks from paying any amount under any Letter of Credit and
any and all reasonable costs and expenses which any of them may incur relative
to any payment under any Letter of Credit. At Agent's option, all of said
amounts required to be paid by Company, if not paid when due, may be charged by
Agent as a Prime-based Advance against the Indebtedness.
(b) Company agrees to indemnify and hold Agent and each of the Banks
harmless from all loss, cost, damage, liability or expenses, including
reasonable house and outside attorneys' fees and disbursements (but
without duplication of fees and expenses for the same services),
incurred by Agent and the Banks by reason of an Event of Default, or
enforcing the obligations of Company or any Subsidiary under this
Agreement or any of the other Loan Documents or in the prosecution or
defense of any action or proceeding concerning any matter growing out
of or connected with this Agreement or any of the Loan Documents,
excluding, however, any loss, cost, damage, liability or expenses
arising solely as a result of the gross negligence or willful
misconduct of the party seeking to be indemnified under this Section
13.5(b).
(c) Company agrees to defend, indemnify and hold harmless Agent and each
of the Banks, and their respective employees, agents, officers and
directors from and against any and all claims, demands, penalties,
fines, liabilities, settlements, damages, costs or expenses of
whatever kind or nature (including without limitation, reasonable
attorneys and consultants fees, investigation and laboratory fees,
environmental studies required by Agent or any Bank in connection with
the violation of Hazardous Material Laws, court costs and litigation
expenses, excluding however, those arising solely as a result of the
gross negligence or willful misconduct of the Agent or of the Person
seeking indemnification, as the case may be) arising out of or related
to (i) the presence, use, disposal, release or threatened release of
any Hazardous Materials on, from or affecting any premises owned or
occupied by Company or any of their respective Subsidiaries in
violation of or non-compliance with applicable Hazardous Material
Laws, (ii) any personal injury (including wrongful death) or property
damage (real or personal) arising out of or related to such Hazardous
Materials, (iii) any lawsuit or other proceeding brought or
threatened, settlement reached or governmental order or decree
relating to such Hazardous Materials, (iv) if any Event of Default
exists and remains uncured, the cost of remediation or monitoring of
all Hazardous Materials in violation of or non-compliance with
applicable Hazardous Material Laws from all or any portion of any
premises owned by Company or their respective Subsidiaries, (v) if any
Event of Default exists and remains uncured, complying or coming into
compliance with all Hazardous Material Laws and/or (vi) if any Event
of Default exists and remains uncured, any violation of Hazardous
Material Laws. The obligations of Company under this Section 13.5(c)
shall be in addition to any and all other obligations and liabilities
the Company may have to Agent or any of the Banks at common law or
pursuant to any other agreement.
13.6 Notices. Except as expressly provided otherwise in this Agreement, all
notices and other communications provided to any party hereto under this
Agreement or any other Loan Document shall be in writing and shall be given by
personal delivery, by mail, by reputable overnight courier, by telex or by
facsimile and addressed or delivered to it at its address set forth on Schedule
13.6 or at such other address as may be designated by such party in a notice to
the other parties that complies as to delivery with the terms of this Section
13.6. Any notice, if personally delivered or if mailed and properly addressed
with postage prepaid and sent by registered or certified mail, shall be deemed
given when received or when delivery is refused; any notice, if given to a
reputable overnight courier and properly addressed, shall be deemed given two
(2) Business Days after the date on which it was sent, unless it is actually
received sooner by the named addressee; and any notice, if transmitted by telex
or facsimile, shall be deemed given when received (answer back confirmed in the
case of telexes and receipt confirmed in the case of telecopies). Agent may,
but, except as specifically provided herein, shall not be required to, take any
action on the basis of any notice given to it by telephone, but the giver of any
such notice shall promptly confirm such notice in writing or by telex or
facsimile, and such notice will not be deemed to have been received until such
confirmation is deemed received in accordance with the provisions of this
Section set forth above. If such telephonic notice conflicts with any such
confirmation, the terms of such telephonic notice shall control.
13.7 Further Action. Company, from time to time, upon written request of
Agent will make, execute, acknowledge and deliver or cause to be made, executed,
acknowledged and delivered, all such further and additional instruments, and
take all such further action as may reasonably be required to carry out the
intent and purpose of this Agreement or the Loan Documents, and to provide for
Advances under and payment of the Notes, according to the intent and purpose
herein and therein expressed.
13.8 Successors and Assigns; Participations; Assignments.
(a) This Agreement shall be binding upon and shall inure to the benefit of
Company and the Banks and their respective successors and assigns.
(b) The foregoing shall not authorize any assignment by Company of its
rights or duties hereunder, and, except as otherwise provided herein,
no such assignment shall be made (or effective) without the prior
written approval of the Banks.
(c) The Company and Agent acknowledge that each of the Banks may at any
time and from time to time, subject to the terms and conditions
hereof, assign or grant participations in such Bank's rights and
obligations hereunder (on a pro rata basis only) and under the other
Loan Documents to any commercial bank, savings and loan association,
insurance company, pension fund, mutual fund, commercial finance
company or other similar institution, the identity of which
institution is approved by Company and Agent, such approval not to be
unreasonably withheld or delayed; provided, however, that (i) the
approval of Company shall not be required upon the occurrence and
during the continuance of an Event of Default, (ii) the approval of
Company and Agent shall not be required for any such sale, transfer,
assignment or participation to the Affiliate of an assigning Bank, any
other Bank or any Federal Reserve Bank and (iii) no assignment shall
be made or participation granted to an entity which is a competitor of
Company and their Subsidiaries without the consent of the Company,
which consent may be withheld in the sole discretion of Company. The
Company authorizes each Bank to disclose to any prospective assignee
or participant, once approved by Company and Agent, any and all
financial information in such Bank's possession concerning the Company
which has been delivered to such Bank pursuant to this Agreement;
provided that each such prospective participant shall execute a
confidentiality agreement consistent with the terms of Section 13.11
hereof.
(d) Each assignment by a Bank of all or any portion of its rights and
obligations hereunder and under the other Loan Documents, which
assignments shall be on a pro rata basis, shall be made pursuant to an
Assignment Agreement substantially (as determined by Agent) in the
form attached hereto as Exhibit I (with appropriate insertions
acceptable to Agent) (provided however that such Bank need not deliver
an Assignment Agreement in connection with assignments to such Bank's
Affiliates or to a Federal Reserve Bank) and shall be subject to the
terms and conditions hereof, and to the following restrictions:
(i) each assignment shall be in a minimum amount of the lesser of (x)
Five Million Dollars ($5,000,000) or such lesser amount as the
Agent shall agree and (y) the entire remaining amount of
assigning Bank's aggregate interest in the Revolving Credit (and
participations in any outstanding Letters of Credit); provided
however that, after giving effect to such assignment, in no event
shall the entire remaining amount (if any) of assigning Bank's
aggregate interest in the Revolving Credit (and participations in
any outstanding Letters of Credit) be less than $5,000,000; and
(ii) no assignment shall be effective unless Agent has received from
the assignee (or from the assigning Bank) an assignment fee of
$3,500 for each such assignment and such assignment is
accompanied by the relevant tax forms required under Section
13.12 hereof.
In connection with any assignment, Company and Agent shall be
entitled to continue to deal solely and directly with the
assigning Bank in connection with the interest so assigned until
(x) the Agent shall have received a notice of assignment duly
executed by the assigning Bank and an Assignment Agreement (with
respect thereto) duly executed by the assigning Bank and each
assignee; and (y) the assigning Bank shall have delivered to the
Agent the original of each Note held by the assigning Bank under
this Agreement. From and after the date on which the Agent shall
notify Company and the assigning Bank that the foregoing
conditions shall have been satisfied and all consents (if any)
required shall have been given, the assignee thereunder shall be
deemed to be a party to this Agreement. To the extent that rights
and obligations hereunder shall have been assigned to such
assignee as provided in such notice of assignment (and Assignment
Agreement), such assignee shall have the rights and obligations
of a Bank under this Agreement and the other Loan Documents
(including without limitation the right to receive fees payable
hereunder in respect of the period following such assignment). In
addition, the assigning Bank, to the extent that rights and
obligations hereunder shall have been assigned by it as provided
in such notice of assignment (and Assignment Agreement), but not
otherwise, shall relinquish its rights and be released from its
obligations under this Agreement and the other Loan Documents.
Within five (5) Business Days following Company's receipt of
notice from the Agent that Agent has accepted and executed a
notice of assignment and the duly executed Assignment Agreement
and assuming the Company has consented to such assignment (if
their consent is required), Company shall, to the extent
applicable, and if requested by the assignee Bank, execute and
deliver to the Agent in exchange for any surrendered Note, new
Note(s) payable to the order of the assignee in an amount equal
to the amount assigned to it pursuant to such notice of
assignment (and Assignment Agreement), and with respect to the
portion of the Indebtedness retained by the assigning Bank, to
the extent applicable, new Note(s) payable to the order of the
assigning Bank in an amount equal to the amount retained by such
Bank hereunder. Agent, the Banks and the Company acknowledge and
agree that any such new Note(s) shall be given in renewal and
replacement of the surrendered Notes and shall not effect or
constitute a novation or discharge of the Indebtedness evidenced
by any surrendered Note, and each such new Note may contain a
provision confirming such agreement. In addition, promptly
following receipt of such Notes, Agent shall prepare and
distribute to Company and the assigning Bank and the assignee
Bank a revised Schedule 1.2 to this Agreement setting forth the
applicable new Percentages of the Banks (including the assignee
Bank), taking into account such assignment.
(e) Each Bank agrees that any participation agreement permitted hereunder
shall comply with all applicable laws and shall be subject to the
following restrictions (which shall be set forth in the applicable
Participation Agreement):
(i) such Bank shall remain the holder of its Notes hereunder (if such
Notes are issued), notwithstanding any such participation;
(ii) a participant shall not reassign or transfer, or grant any
sub-participations in its participation interest hereunder or any
part thereof; and
(iii)such Bank shall retain the sole right and responsibility to
enforce the obligations of the Company relating to the Notes and
the other Loan Documents, including, without limitation, the
right to proceed against any Guarantors, or cause Agent to do so
(subject to the terms and conditions hereof), and the right to
approve any amendment, modification or waiver of any provision of
this Agreement without the consent of the participant (other than
a participant which is an Affiliate of such Bank), except for
those matters covered by Section 13.10(a) through (e) and (h)
hereof (provided that a participant may exercise approval rights
over such matters only on an indirect basis, acting through such
Bank, and Company, Agent and the other Banks may continue to deal
directly with such Bank in connection with such Bank's rights and
duties hereunder). Notwithstanding the foregoing, however, in the
case of any participation granted by any Bank hereunder, the
participant shall not have any rights under this Agreement or any
of the other Loan Documents (the participant's rights against
such Bank in respect of such participation to be those set forth
in the agreement executed by such Bank in favor of the
participant relating thereto) and all amounts payable by the
Company hereunder shall be determined as if such Bank had not
sold such participation, provided, however, that such participant
shall be entitled to the benefits of this Section 13.8(e) with
respect to rights of setoff under Section 9.6 and the benefit of
Section 11 hereof, and provided further, however, that no
participant shall be entitled to receive any greater amount
pursuant to such Sections than the issuing Bank would have been
entitled to receive in respect of the amount of the participation
transferred by such issuing Bank to such participant had no such
transfer occurred.
(f) The Agent shall maintain at its principal office a copy of each
Assignment Agreement delivered to it and a register (the "Register")
for the recordation of the names and addresses of the Banks, the
Percentages of such Banks and the principal amount of each type of
Advance owing to each such Bank from time to time. The entries in the
Register shall be conclusive evidence, absent manifest error, and the
Company, the Agent, and the Banks may treat each Person whose name is
recorded in the Register as the owner of the Advances recorded therein
for all purposes of this Agreement. The Register shall be available
for inspection by the any of the Company or any Bank upon reasonable
notice to the Agent and a copy of such information shall be provided
to any such party on their prior written request. The Agent shall give
prompt written notice to the Company of the making of any entry in the
Register or any change in such entry.
(g) Nothing in this Agreement, the Notes or the other Loan Documents,
expressed or implied, is intended to or shall confer on any Person
other than the respective parties hereto and thereto and their
successors and assignees and participants permitted hereunder and
thereunder any benefit or any legal or equitable right, remedy or
other claim under this Agreement, the Notes or the other Loan
Documents.
13.9 Counterparts. This Agreement may be executed in several counterparts,
and each executed copy shall constitute an original instrument, but such
counterparts shall together constitute but one and the same instrument.
13.10 Amendment and Waiver. No amendment or waiver of any provision of this
Agreement or any other Loan Document, nor consent to any departure by Company or
any Guarantor therefrom, shall in any event be effective unless the same shall
be in writing and signed by the Majority Banks (or by the Agent at the written
request of the Majority Banks) or, if this Agreement expressly so requires with
respect to the subject matter thereof, by all Banks (and, with respect to any
amendments to this Agreement or the other Loan Documents, by Company or the
Guarantors which are signatories thereto), and then such waiver or consent shall
be effective only in the specific instance and for the specific purpose for
which given; provided, however, (X) that no amendment, waiver or consent shall
increase the Percentage or the stated commitment amounts applicable to any Bank
unless approved, in writing, by the affected Bank and (Y) that no amendment,
waiver or consent shall, unless in writing and signed by all the Banks, do any
of the following: (a) reduce the principal of, or interest on, any outstanding
Indebtedness or any Fees or other amounts payable hereunder, (b) postpone any
date fixed for any payment of principal of, or interest on, any outstanding
Indebtedness or any Fees or other amounts payable hereunder, (c) waive any Event
of Default specified in Section 9.1(a) hereof, (d) except as expressly permitted
hereunder or under the Collateral Documents, release or defer the granting or
perfecting of a lien or security interest in all or substantially all or any
material part of the Collateral (other than the release or deferral of any
leasehold mortgage which shall be approved by the Majority Banks) or release any
guaranty or similar undertaking provided by any Person, provided however that
Agent shall be entitled to release any Collateral or guaranty in connection with
any sale or other transfer by Company or any Subsidiary which is permitted under
the terms of this Agreement or the other Loan Documents without notice to or any
further action or consent of the Banks, (e) terminate or modify any indemnity
provided to the Banks hereunder or under the other Loan Documents, except as
shall be otherwise expressly provided in this Agreement or any other Loan
Document, (f) take any action which requires the approval or consent of all
Banks pursuant to the terms of this Agreement or any other Loan Document, or (h)
change the definitions of "Borrowing Base", "Percentage", "Majority Banks" or
this Section 13.10. Notwithstanding the foregoing, (A) no amendment, waiver or
consent shall, unless in writing signed by the Swing Line Bank, do any of the
following: (x) reduce the principal of, or interest on, the Swing Line Note or
(y) postpone any date fixed for any payment of principal of, or interest on, the
Swing Line Note; (B) no amendment, waiver, or consent shall, unless in writing
and signed by the Issuing Bank, affect the rights or duties of the Issuing Bank
under Article 3 hereof and (C) no amendment, waiver, or consent shall, unless in
writing and signed by the Agent in addition to all the Banks, affect the rights
or duties of the Agent under this Agreement or any other Loan Document. All
references in this Agreement to "Banks" or "the Banks" shall refer to all Banks,
unless expressly stated to refer to Majority Banks (or the like).
13.11 Confidentiality. Each Bank agrees that it will not disclose without
the prior consent of Company (other than to its employees, its Subsidiaries,
another Bank, an Affiliate of a Bank or to its auditors or counsel) any
information with respect to Company, which is furnished pursuant to this
Agreement or any of the other Loan Documents; provided that any Bank may
disclose any such information (a) as has become generally available to the
public or has been lawfully obtained by such Bank from any third party under no
duty of confidentiality to Company, (b) as may be required or appropriate in any
report, statement or testimony submitted to, or in respect to any inquiry, by,
any municipal, state or federal regulatory body having or claiming to have
jurisdiction over such Bank, including the Board of Governors of the Federal
Reserve System of the United States, the Office of the Comptroller of the
Currency or the Federal Deposit Insurance Corporation or similar organizations
(whether in the United States or elsewhere) or their successors, (c) as may be
required or appropriate in respect to any summons or subpoena or in connection
with any litigation, (d) in order to comply with any law, order, regulation or
ruling applicable to such Bank, and (e) to any permitted transferee or assignee
or to any approved participant of, or with respect to, the Notes, as aforesaid;
provided that each such Person executed a confidentiality agreement consistent
with the terms of this Section 13.11.
13.12 Withholding Taxes. If any Bank is not a united states person within
the meaning of Section 7701(a)(30) of the Internal Revenue Code such Bank shall
promptly (but in any event prior to the initial payment of interest hereunder)
deliver to the Agent two executed copies of (i) Internal Revenue Service Form
W-8BEN or any successor form specifying the applicable tax treaty between the
United States and the jurisdiction of such Bank's domicile which provides for
the exemption from withholding on interest payments to such Bank, (ii) Internal
Revenue Service Form W-8ECI or any successor form evidencing that the income to
be received by such Bank hereunder is effectively connected with the conduct of
a trade or business in the United States or (iii) other evidence satisfactory to
the Agent that such Bank is exempt from United States income tax withholding
with respect to such income; provided, however, that such Bank shall not be
required to deliver to Agent the aforesaid forms or other evidence with respect
to Advances to the Company, if such Bank has assigned its entire interest in the
Revolving Credit (including any outstanding Advances thereunder and
participations in Letters of Credit issued hereunder), the Swing Line and any
Notes issued to it by the Company, to an Affiliate which is incorporated under
the laws of the United States or a state thereof, and so notifies the Agent.
Such Bank shall amend or supplement any such form or evidence as required to
insure that it is accurate, complete and non-misleading at all times. Promptly
upon notice from the Agent of any determination by the Internal Revenue Service
that any payments previously made to such Bank hereunder were subject to United
States income tax withholding when made, such Bank shall pay to the Agent the
excess of the aggregate amount required to be withheld from such payments over
the aggregate amount actually withheld by the Agent. In addition, from time to
time upon the reasonable request and at the sole expense of the Company, each
Bank and the Agent shall (to the extent it is able to do so based upon
applicable facts and circumstances), complete and provide the Company with such
forms, certificates or other documents as may be reasonably necessary to allow
the Company, as applicable, to make any payment under this Agreement or the
other Loan Documents without any withholding for or on the account of any tax
under Section 10.1(d) hereof (or with such withholding at a reduced rate),
provided that the execution and delivery of such forms, certificates or other
documents does not adversely affect or otherwise restrict the right and benefits
(including without limitation economic benefits) available to such of the Bank
or the Agent, as the case may be, under this Agreement or any of the other Loan
Documents, or under or in connection with any transactions not related to the
transactions contemplated hereby.
13.13 Taxes and Fees. Should any tax (other than as a result of a Bank's
failure to comply with Section 13.12 or a tax based upon the net income or
capitalization of any Bank or the Agent by any jurisdiction where a Bank or
Agent is or has been located), recording or filing fee become payable in respect
of this Agreement or any of the other Loan Documents or any amendment,
modification or supplement hereof or thereof, the Company agrees to pay the
same, together with any interest or penalties thereon arising from the Company's
act or omission, and agrees to hold the Agent and the Banks harmless with
respect thereto. Notwithstanding the foregoing, nothing contained in this
Section 13.13 shall affect or reduce the rights of any Bank or the Agent under
Section 11.5 hereof.
13.14 WAIVER OF JURY TRIAL. THE BANKS, THE AGENT AND THE COMPANY KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHT ANY OF THEM MAY HAVE TO A TRIAL BY
JURY IN ANY LITIGATION BASED UPON OR ARISING OUT OF THIS AGREEMENT OR ANY
RELATED INSTRUMENT OR AGREEMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED BY THIS
AGREEMENT OR ANY COURSE OF CONDUCT, DEALING, STATEMENTS (WHETHER ORAL OR
WRITTEN) OR ACTION OF ANY OF THEM. NEITHER THE BANKS, THE AGENT, NOR COMPANY
SHALL SEEK TO CONSOLIDATE, BY COUNTERCLAIM OR OTHERWISE, ANY SUCH ACTION IN
WHICH A JURY TRIAL HAS BEEN WAIVED WITH ANY OTHER ACTION IN WHICH A JURY TRIAL
CANNOT BE OR HAS NOT BEEN WAIVED. THESE PROVISIONS SHALL NOT BE DEEMED TO HAVE
BEEN MODIFIED IN ANY RESPECT OR RELINQUISHED BY THE BANKS AND THE AGENT OR
COMPANY EXCEPT BY A WRITTEN INSTRUMENT EXECUTED BY ALL OF THEM.
13.15 Complete Agreement; Conflicts. This Agreement, the Notes (if issued),
any Requests for Revolving Credit Advance and Requests for Swing Line Advance
hereunder, and the Loan Documents contain the entire agreement of the parties
hereto, superseding all prior agreements, discussions and understandings
relating to the subject matter hereof, and none of the parties shall be bound by
anything not expressed in writing. In the event of any conflict between the
terms of this Agreement and the other Loan Documents, this Agreement shall
govern.
13.16 Severability. In case any one or more of the obligations of Company
under this Agreement, the Notes or any of the other Loan Documents shall be
invalid, illegal or unenforceable in any jurisdiction, the validity, legality
and enforceability of the remaining obligations of Company shall not in any way
be affected or impaired thereby, and such invalidity, illegality or
unenforceability in one jurisdiction shall not affect the validity, legality or
enforceability of the obligations of Company under this Agreement, the Notes or
any of the other Loan Documents in any other jurisdiction.
13.17 Table of Contents and Headings. The table of contents and the
headings of the various subdivisions hereof are for convenience of reference
only and shall in no way modify or affect any of the terms or provisions hereof.
13.18 Construction of Certain Provisions. If any provision of this
Agreement or any of the Loan Documents refers to any action to be taken by any
Person, or which such Person is prohibited from taking, such provision shall be
applicable whether such action is taken directly or indirectly by such Person,
whether or not expressly specified in such provision.
13.19 Independence of Covenants. Each covenant hereunder shall be given
independent effect (subject to any exceptions stated in such covenant) so that
if a particular action or condition is not permitted by any such covenant
(taking into account any such stated exception), the fact that it would be
permitted by an exception to, or would be otherwise within the limitations of,
another covenant shall not avoid the occurrence of a Default or an Event of
Default.
13.20 Reliance on and Survival of Various Provisions. All terms, covenants,
agreements, representations and warranties of Company or any party to any of the
Loan Documents made herein or in any of the Loan Documents or in any
certificate, report, financial statement or other document furnished by or on
behalf of Company or any Subsidiary in connection with this Agreement or any of
the Loan Documents shall be deemed to have been relied upon by the Banks,
notwithstanding any investigation heretofore or hereafter made by any Bank or on
such Bank's behalf, and those covenants and agreements of Company set forth in
Section 13.5 hereof (together with any other indemnities of Company or any
Subsidiary contained elsewhere in this Agreement or in any of the other Loan
Documents) and of Banks set forth in Section 12.7 hereof shall survive the
repayment in full of the Indebtedness and the termination of the Revolving
Credit Aggregate Commitment.
13.21 Merger. Upon the effective date of the Merger, all references in the
Loan Documents to Wheel to Wheel Acquisition Company, LLC and Wheel to Wheel,
Inc. shall mean Wheel to Wheel, LLC (formerly known as Wheel to Wheel
Acquisition Company, LLC) survivor of the Merger and all existing credit
facilities by Comerica in favor of Tecstar, LLC, Wheel to Wheel, Inc. and
Company shall terminate.
* * *
[Signatures Follow On Succeeding Page]
WITNESS the due execution hereof as of the day and year first above
written.
COMERICA BANK, STARCRAFT CORPORATION
as Agent
By: /s/ Xxxxxxx X. Xxxxx By: /s/ Xxxxxxx X. Xxxxxxxxxx
------------------------------- -------------------------------------
Xxxxxxx X. Xxxxx Xxxxxxx X. Xxxxxxxxxx
Its: Vice President Its: President
SWING LINE BANK: COMERICA BANK
By: /s/ Xxxxxxx X. Xxxxx
-------------------------------------
Xxxxxxx X. Xxxxx
Its: Vice President
ISSUING BANK: COMERICA BANK
By: /s/ Xxxxxxx X. Xxxxx
-------------------------------------
Xxxxxxx X. Xxxxx
Its: Vice President
BANKS: COMERICA BANK
By: /s/ Xxxxxxx X. Xxxxx
-------------------------------------
Xxxxxxx X. Xxxxx
Its: Vice President
