EXECUTION COPY
CHAMPION ENTERPRISES, INC.
CREDIT AGREEMENT
DATED AS OF SEPTEMBER 29, 1995
COMERICA BANK, AS AGENT
TABLE OF CONTENTS
Page
1. DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2. REVOLVING CREDIT. . . . . . . . . . . . . . . . . . . . . . . . . . . 13
2.1 Commitment. . . . . . . . . . . . . . . . . . . . . . . . . . . 13
2.2 Accrual of Interest and Maturity; Margin Adjustments. . . . . . 13
2.3 Prime-based Interest Payments . . . . . . . . . . . . . . . . . 14
2.4 Eurodollar-based Interest Payments. . . . . . . . . . . . . . . 15
2.5 Interest Payments on Conversions. . . . . . . . . . . . . . . . 15
2.6 Reserved. . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
2.7 Requests for Advances and Requests for
Refundings and Conversions of Advances. . . . . . . . . . . . . 15
2.8 Disbursement of Revolving Credit Advances . . . . . . . . . . . 17
2.9 Prepayment. . . . . . . . . . . . . . . . . . . . . . . . . . . 18
2.10 Prime-based Advance in Absence of Election
or Upon Default . . . . . . . . . . . . . . . . . . . . . . . . 18
2.11 Revolving Credit Commitment Fee . . . . . . . . . . . . . . . . 18
2.12 Reduction of Indebtedness . . . . . . . . . . . . . . . . . . . 19
2.13 Optional Reduction or Termination of
Revolving Credit Commitment . . . . . . . . . . . . . . . . . . 19
2.14 Extension of Revolving Credit Maturity Date . . . . . . . . . . 20
2.15 Application of Advances . . . . . . . . . . . . . . . . . . . . 21
2A. LETTERS OF CREDIT . . . . . . . . . . . . . . . . . . . . . . . 21
2A.1 Letters of Credit . . . . . . . . . . . . . . . . . . . . . . . 21
2A.2 Conditions to Issuance. . . . . . . . . . . . . . . . . . . . . 21
2A.3 Notice. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
2A.4 Letter of Credit Fees . . . . . . . . . . . . . . . . . . . . . 23
2A.5 Issuance Fees . . . . . . . . . . . . . . . . . . . . . . . . . 24
2A.6 Draws and Demands for Payment Under
Letters of Credit . . . . . . . . . . . . . . . . . . . . . . . 24
2A.7 Obligations Irrevocable . . . . . . . . . . . . . . . . . . . . 25
2A.8 Risk Under Letters of Credit. . . . . . . . . . . . . . . . . . 26
2A.9 Indemnification . . . . . . . . . . . . . . . . . . . . . . . . 27
2A.10 Right of Reimbursement. . . . . . . . . . . . . . . . . . . . . 28
2A.11 Existing Letters of Credit. . . . . . . . . . . . . . . . . . . 29
2B. SWING LINE CREDIT.. . . . . . . . . . . . . . . . . . . . . . . 29
2B.1 Swing Line Advances.. . . . . . . . . . . . . . . . . . . . . . 29
2B.2 Accrual of Interest . . . . . . . . . . . . . . . . . . . . . . 29
2B.3 Requests for Swing Line Advances. . . . . . . . . . . . . . . . 30
2B.4 Disbursement of Swing Line Advances.. . . . . . . . . . . . . . 31
2B.5 Refunding of or Participation Interest in
Swing Line Advances . . . . . . . . . . . . . . . . . . . . . . 31
2B.6 Quoted Rate Advance Interest Payments . . . . . . . . . . . . . 32
2B.7 Prime-based Advance Interest Payments . . . . . . . . . . . . . 33
2B.8 Prepayment. . . . . . . . . . . . . . . . . . . . . . . . . . . 33
3. SPECIAL PROVISIONS, CHANGES IN CIRCUMSTANCES AND YIELD
PROTECTION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
3.1 Reimbursement of Expenses . . . . . . . . . . . . . . . . . . . 33
3.2 Eurodollar Lending Office . . . . . . . . . . . . . . . . . . . 34
3.3 Change in Circumstances . . . . . . . . . . . . . . . . . . . . 34
3.4 Regulatory Changes. . . . . . . . . . . . . . . . . . . . . . . 34
3.5 Increased Costs . . . . . . . . . . . . . . . . . . . . . . . . 34
3.6 Capital Requirements. . . . . . . . . . . . . . . . . . . . . . 35
4. CONDITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
4.1 Execution of Notes and this Agreement . . . . . . . . . . . . . 36
4.2 Execution of Guaranty . . . . . . . . . . . . . . . . . . . . . 36
4.3 Corporate Authority . . . . . . . . . . . . . . . . . . . . . . 36
4.4 Representations and Warranties -- All Parties. . . . . . . . . 36
4.5 Compliance with Certain Documents and
Agreements. . . . . . . . . . . . . . . . . . . . . . . . . . . 37
4.6 Opinion of Counsel. . . . . . . . . . . . . . . . . . . . . . . 37
4.7 No Default. . . . . . . . . . . . . . . . . . . . . . . . . . . 37
4.8 No Material Adverse Change. . . . . . . . . . . . . . . . . . . 37
4.9 Termination of Prior Agreement. . . . . . . . . . . . . . . . . 37
4.10 Facility Fee. . . . . . . . . . . . . . . . . . . . . . . . . . 37
5. REPRESENTATIONS AND WARRANTIES. . . . . . . . . . . . . . . . . . . . 37
5.1 Organization, etc . . . . . . . . . . . . . . . . . . . . . . . 37
5.2 No Conflict . . . . . . . . . . . . . . . . . . . . . . . . . . 38
5.3 Litigation. . . . . . . . . . . . . . . . . . . . . . . . . . . 38
5.4 Title to Assets . . . . . . . . . . . . . . . . . . . . . . . . 38
5.5 Subsidiaries. . . . . . . . . . . . . . . . . . . . . . . . . . 38
5.6 Pension Plans . . . . . . . . . . . . . . . . . . . . . . . . . 38
5.7 Financial Statements. . . . . . . . . . . . . . . . . . . . . . 38
5.8 Tax Returns . . . . . . . . . . . . . . . . . . . . . . . . . . 39
5.9 Compliance with Laws. . . . . . . . . . . . . . . . . . . . . . 39
5.10 Representations . . . . . . . . . . . . . . . . . . . . . . . . 39
5.11 Reserved. . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
5.12 Environmental Matters . . . . . . . . . . . . . . . . . . . . . 39
5.13 Environmental Matters . . . . . . . . . . . . . . . . . . . . . 40
5.14 Environmental Liabilities . . . . . . . . . . . . . . . . . . . 40
5.15 Environmental Permits . . . . . . . . . . . . . . . . . . . . . 40
6. COMPANY'S AFFIRMATIVE COVENANTS . . . . . . . . . . . . . . . . 40
6.1 Deliveries. . . . . . . . . . . . . . . . . . . . . . . . . . . 40
6.2 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
6.3 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
6.4 Inspection. . . . . . . . . . . . . . . . . . . . . . . . . . . 42
6.5 Notification of Default . . . . . . . . . . . . . . . . . . . . 42
6.6 Legal Existence . . . . . . . . . . . . . . . . . . . . . . . . 42
6.7 Compliance with Laws. . . . . . . . . . . . . . . . . . . . . . 42
6.8 Reserved. . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
6.9 Compliance with ERISA . . . . . . . . . . . . . . . . . . . . . 43
6.10 Notification of ERISA Matters . . . . . . . . . . . . . . . . . 43
6.11 Consolidated Funded Debt Ratio. . . . . . . . . . . . . . . . . 43
6.12 Consolidated Fixed Charge Coverage Ratio. . . . . . . . . . . . 43
6.13 Consolidated Tangible Net Worth . . . . . . . . . . . . . . . . 43
7. NEGATIVE COVENANTS. . . . . . . . . . . . . . . . . . . . . . . . . . 44
7.1 Redemptions . . . . . . . . . . . . . . . . . . . . . . . . . . 44
7.2 Merger. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
7.2A Sale of Assets. . . . . . . . . . . . . . . . . . . . . . . . . 44
7.3 Guarantee Obligations . . . . . . . . . . . . . . . . . . . . . 44
7.4 Debt. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
7.5 Acquisitions. . . . . . . . . . . . . . . . . . . . . . . . . . 45
7.6 Dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
7.7 Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
7.8 Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
7.9 Pension Plans . . . . . . . . . . . . . . . . . . . . . . . . . 46
7.10 Subsidiaries. . . . . . . . . . . . . . . . . . . . . . . . . . 46
8. ENVIRONMENTAL PROVISIONS. . . . . . . . . . . . . . . . . . . . . . . 46
8.1 General . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
8.2 Copies of Pleadings . . . . . . . . . . . . . . . . . . . . . . 46
8.3 Notification. . . . . . . . . . . . . . . . . . . . . . . . . . 46
8.4 Retention of Expert . . . . . . . . . . . . . . . . . . . . . . 46
8.5 Environmental Audit . . . . . . . . . . . . . . . . . . . . . . 46
8.6 Indemnification . . . . . . . . . . . . . . . . . . . . . . . . 47
8.7 Permits . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
9. DEFAULTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
9.1 Defaults. . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
9.2 Exercise of Remedies. . . . . . . . . . . . . . . . . . . . . . 49
9.3 Rights Cumulative . . . . . . . . . . . . . . . . . . . . . . . 50
9.4 Waiver by Company of Certain Laws . . . . . . . . . . . . . . . 50
9.5 Waiver of Defaults. . . . . . . . . . . . . . . . . . . . . . . 50
9.6 Interest on Default . . . . . . . . . . . . . . . . . . . . . . 50
10. PAYMENTS, RECOVERIES AND COLLECTIONS. . . . . . . . . . . . . . . . . 51
10.1 Payment Procedure . . . . . . . . . . . . . . . . . . . . . . . 51
10.2 Pro-rata Recovery . . . . . . . . . . . . . . . . . . . . . . . 52
10.3 Application of Proceeds . . . . . . . . . . . . . . . . . . . . 52
11. Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
11.1 Appointment of Agent. . . . . . . . . . . . . . . . . . . . . . 52
11.2 Deposit Account with Agent. . . . . . . . . . . . . . . . . . . 53
11.3 Scope of Agent's Duties . . . . . . . . . . . . . . . . . . . . 53
11.4 Successor Agent . . . . . . . . . . . . . . . . . . . . . . . . 54
11.5 Loans by Agent. . . . . . . . . . . . . . . . . . . . . . . . . 54
11.6 Credit Decisions. . . . . . . . . . . . . . . . . . . . . . . . 54
11.7 Agent's Fees. . . . . . . . . . . . . . . . . . . . . . . . . . 55
11.8 Authority of Agent to Enforce Notes and This Agreement. . . . . 55
11.9 Indemnification . . . . . . . . . . . . . . . . . . . . . . . . 55
11.10 Knowledge of Default. . . . . . . . . . . . . . . . . . . 56
11.11 Agent's Authorization; Action by Banks. . . . . . . . . . 56
11.12 Enforcement Actions by the Agent. . . . . . . . . . . . . 56
12. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
12.1 Accounting Principles . . . . . . . . . . . . . . . . . . . . . 57
12.2 Consent to Jurisdiction . . . . . . . . . . . . . . . . . . . . 57
12.3 Law of Michigan . . . . . . . . . . . . . . . . . . . . . . . . 57
12.4 Interest. . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
12.5 Closing Costs and Other Costs . . . . . . . . . . . . . . . . . 58
12.6 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
12.7 Further Action. . . . . . . . . . . . . . . . . . . . . . . . . 59
12.8 Successors and Assigns; Participations. . . . . . . . . . . . . 59
12.9 Reserved. . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
12.10 Counterparts. . . . . . . . . . . . . . . . . . . . . . . . . . 62
12.11 Amendment and Waiver. . . . . . . . . . . . . . . . . . . . . . 62
12.12 Taxes and Fees. . . . . . . . . . . . . . . . . . . . . . . . . 63
12.13 Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . 63
12.14 Withholding Taxes . . . . . . . . . . . . . . . . . . . . . . . 64
12.15 Reserved. . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
12.16 Effective Upon Execution. . . . . . . . . . . . . . . . . . . . 64
12.17 Waiver of Jury Trial. . . . . . . . . . . . . . . . . . . . . . 64
12.18 Complete Agreement; Conflicts . . . . . . . . . . . . . . . . . 64
12.19 Severability 65
12.20 Table of Contents and Headings. . . . . . . . . . . . . . . . . 65
12.21 Construction of Certain Provisions. . . . . . . . . . . . . . . 65
12.22 Independence of Covenants . . . . . . . . . . . . . . . . . . . 65
12.23 Reliance on and Survival of Various
Provisions. . . . . . . . . . . . . . . . . . . . . . . . . . . 65
TABLE OF CONTENTS
(Continued)
EXHIBITS
EXHIBIT "A" - REQUEST FOR REVOLVING CREDIT ADVANCE
EXHIBIT "B" - REVOLVING CREDIT NOTE
EXHIBIT "C" - PERMITTED LIENS
EXHIBIT "D" - STATES OF INCORPORATION AND QUALIFICATION/LIST OF
SUBSIDIARIES
EXHIBIT "E" - PENSION PLANS
EXHIBIT "F" - FLOOR PLAN FINANCING AND REPURCHASE ARRANGEMENTS
EXHIBIT "G" - PERMITTED INDEBTEDNESS
EXHIBIT "H" - REQUEST FOR SWING LINE ADVANCE
EXHIBIT "J" - SWING LINE NOTE
EXHIBIT "K" - FORM OF SWING LINE LOAN PARTICIPATION CERTIFICATE
EXHIBIT "L" - FORM OF ASSIGNMENT AGREEMENT
SCHEDULES
SCHEDULE 1.1 - EXISTING LETTERS OF CREDIT
SCHEDULE 5.12 - ENVIRONMENTAL MATTERS
CREDIT AGREEMENT
THIS CREDIT AGREEMENT ("Agreement") is made as of the 29th
day of September, 1995, by and among Comerica Bank and the other
financial institutions from time to time parties hereto as
lenders of the Revolving Credit (individually, "Revolving Credit
Bank", and collectively "Revolving Credit Banks"), Comerica
Bank, as lender of the Swing Line Credit ("Swing Line Bank" and
together with the Revolving Credit Banks, collectively referred
to as the "Banks"), Comerica Bank, as agent for the Banks (in
such capacity, "Agent"), and Champion Enterprises, Inc., a
Michigan corporation ("Company").
1. DEFINITIONS
For the purposes of this Agreement the following terms will
have the following meanings:
"Advance(s)" shall mean Revolving Credit Advances and Swing
Line Advances.
"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.
"Agent" shall mean Comerica Bank, in its capacity as agent
hereunder and issuer of the Letters of Credit, or any successor
Agent appointed in accordance with Section 11.4 hereof.
"Alternate Base Rate" shall mean for any day a rate per
annum (rounded upwards, if necessary, to the next higher 1/16 of
1%) 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 a
Revolving Credit Advance, the Eurodollar-based Rate or the
Prime-based Rate, applicable to such Advance (in the case of a
Eurodollar-based Advance, for the relevant Interest Period), and
(ii) in respect of a Swing Line Advance, the Prime-based Rate or
the Quoted Rate, applicable to such Advance, for the relevant
Interest Period, as selected by Company from time to time
subject to the terms and conditions of this Agreement.
"Applicable Margin" shall mean, as of the date of
determination thereof, the following margins:
If Consolidated Funded The Applicable Margin is:
Debt Ratio ("x") is: Prime-based Rate Eurodollar-based
rate
equal to or greater than
1.75 .00 1.25%
equal to or greater than
1.25 but less than 1.75 .00 1.0%
equal to or greater than
.75 but less than 1.25 .00 .75%
equal to or greater than
.40 but less than .75 .00 .60%
less than .40 .00 .45%
"Banks" shall mean Comerica Bank and such other financial
institutions from time to time parties hereto as lenders and
shall include the Revolving Credit Banks and the Swing Line Bank
and any assignee which becomes a Bank pursuant to Section 12.8
hereof.
"Business Day" shall mean any day (other than a Saturday or
Sunday) on which commercial banks are open for domestic and
international business (including dealings in foreign exchange)
in Detroit, London and New York.
"Capital Expenditures" shall mean, in respect of any Person
and without duplication, any amounts paid or accrued for a
period in respect of any purchase or other acquisition for value
of fixed or capital assets which, in accordance with GAAP, would
be capitalized in preparing a balance sheet of such Person.
"Capital Stock" 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), in each case
whether now outstanding or hereafter issued.
"Capitalized Lease" means, as applied to any Person, any
lease of any property (whether real, personal or mixed) which,
in conformity with GAAP, is required to be capitalized on the
balance sheet of such Person.
"Capitalized Lease Obligation" means the discounted present
value of the rental obligations of any Person under any
Capitalized Lease, determined in accordance with GAAP.
"Chandeleur" shall mean Chandeleur Homes, Inc., the seller
of the assets purchased by a Subsidiary pursuant to the Asset
Purchase Agreement dated January 5, 1995 among such Subsidiary,
Company, Chandeleur, and certain shareholders of Chandeleur.
"Commission" shall mean the Securities and Exchange
Commission.
"Consolidated" or "Consolidating" shall, when used with
reference to any financial information pertaining to (or when
used as a part of any defined term or statement pertaining to
the financial condition of) Company and its Subsidiaries, mean
the accounts of Company and its Subsidiaries determined on a
consolidated or consolidating basis, as the case may be, all
determined as to principles of consolidation and, except as
otherwise specifically required by the definition of such term
or by such statements, as to such accounts, in accordance with
GAAP.
"Consolidated EBITDA" shall mean as of the last day of each
fiscal quarter, the sum of Consolidated Net Income for the four
fiscal quarters then ended, plus Consolidated Interest Expense,
Consolidated Income Taxes and Consolidated depreciation and
amortization for such four fiscal quarters (to the extent such
depreciation and amortization were included in computing
Consolidated Net Income).
"Consolidated Fixed Charge Coverage Ratio" shall mean as of
the last day of each fiscal quarter, a ratio, the numerator of
which shall be Consolidated EBITDA for the four fiscal quarters
then ended, and the denominator of which shall be the sum of
Consolidated Interest Expense for such period, plus Consolidated
Capital Expenditures for such period, plus the total of all
principal payments paid or payable under loan obligations and
Capitalized Leases of Company and its Consolidated Subsidiaries
during such period.
"Consolidated Funded Debt" shall mean as of any applicable
date of determination, all indebtedness and liabilities of
Company and its Consolidated Subsidiaries for borrowed money or
which has been incurred in connection with the acquisition of
assets (other than notes payable to Dutch and obligations to
Chandeleur or Crest Ridge) in each case having a final maturity
of one year or longer from the date of origin thereof (but
including in any case all amounts outstanding under the
Revolving Credit Notes), including all payments in respect
thereof that are required within one year from the date of any
determination of Consolidated Funded Debt.
"Consolidated Funded Debt Ratio" shall mean as of the last
day of each fiscal quarter, a ratio, the numerator of which
shall be Consolidated Funded Debt and the denominator of which
shall be Consolidated EBITDA.
"Consolidated Income Taxes" shall mean for any period the
aggregate amount of taxes based on income or profits for such
period of the operations of Company and its Consolidated
Subsidiaries determined in accordance with GAAP (to the extent
such income and profits were included in computing Consolidated
Net Income).
"Consolidated Interest Expense" shall mean for any period
the aggregate gross interest expense (including amortization of
original issue discount and non-cash interest payments or
accruals and the interest component of Capitalized Lease
Obligations) of Company and its Consolidated Subsidiaries for
such period as determined in accordance with GAAP.
"Consolidated Net Income" for any period means the Net
Income of Company and its Consolidated Subsidiaries for such
period.
"Consolidated Net Worth" means as of any date all amounts
that would be included under stockholders' equity on a
Consolidated balance sheet of Company and its Consolidated
Subsidiaries determined in accordance with GAAP.
"Consolidated Subsidiary(ies)" shall mean those subsidiaries
of Company which are treated as Consolidated for purposes of
GAAP.
"Consolidated Tangible Net Worth" shall mean as of any date,
Consolidated Net Worth less Consolidated intangible assets, all
as determined in accordance with GAAP.
"Crest Ridge" shall mean Crest Ridge Homes, Inc., a Texas
corporation, the seller of the assets purchased by a Subsidiary
pursuant to the Asset Purchase Agreement dated January 5, 1995
among such Subsidiary, Company, Crest Ridge, and certain
shareholders of Crest Ridge.
"De Minimis Matters" shall mean environmental 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 on the
financial condition or businesses of the Company and its
Subsidiaries (taken as a whole) or on the ability of the Company
and Subsidiaries (taken as a whole) to pay their debts, as such
debts become due.
"Dutch" shall mean Dutch Housing, Inc., the seller of the
assets purchased by a Subsidiary pursuant to the Asset Purchase
Agreement dated as of January 31, 1994 among such Subsidiary,
Dutch, Company and certain shareholders of Dutch.
"Environmental Laws" shall mean all federal, state and local
laws including statutes, regulations, ordinances, codes, rules,
and other governmental restrictions and requirements, relating
to environmental pollution, contamination or other impairment of
any nature, any hazardous or other toxic substances of any
nature, whether liquid, solid and/or gaseous, including smoke,
vapor, fumes, soot, acids, alkalis, chemicals, wastes, by-
products, and recycled materials. These Environmental Laws shall
include but not be limited to the Federal Solid Waste Disposal
Act, the Federal Clean Air Act, the Federal Clean Water Act, the
Federal Resource Conservation and Recovery Act of 1976, the
Federal Comprehensive Environmental Response, Compensation and
Liability Act of 1980, the Federal Superfund Amendments and
Reauthorization Act of 1986, regulations of the Environmental
Protection Agency, regulations of the Nuclear Regulatory Agency,
regulations of any state department of natural resources or
state environmental protection agency now or at any time
hereafter in effect and local health department ordinances.
"ERISA" shall mean the Employee Retirement Income Security
Act of 1974, as amended, or any successor act or code.
"Eurodollar-based Advance" shall mean an Advance which bears
interest at the Eurodollar-based Rate.
"Eurodollar-based Rate" shall mean, with respect to any
Eurodollar-Interest Period, a per annum interest rate which is
equal to the Applicable Margin plus the quotient of:
(a) the per annum interest rate at which Agent's Eurodollar
Lending Office offers deposits to prime banks in the
eurodollar market in an amount comparable to the
relevant Eurodollar-based Advance and for a period
equal to the relevant Eurodollar-Interest Period at
approximately 11:00 a.m. Detroit time two (2) Business
Days prior to the first day of such Eurodollar-
Interest Period; divided by
(b) an amount equal to one minus the stated maximum rate
(expressed as a decimal) of all reserve requirements
(including, without limitation, any marginal,
emergency, supplemental, special or other reserves)
that is specified on the first day of such Interest
Period by the Board of Governors of the Federal Reserve
System (or any successor agency thereto) for
determining the maximum reserve requirement with
respect to Eurodollar funding (currently referred to as
"Eurocurrency liabilities" in Regulation D of such
Board) maintained by a member bank of such System, such
sum to be rounded upward, if necessary, to the nearest
whole multiple of 1/16 of 1%.
"Eurodollar-Interest Period" shall mean the Interest Period
applicable to a Eurodollar-based Advance.
"Eurodollar Lending Office" shall mean (a) Agent's office
located at Grand Cayman Islands, British West Indies, or such
other branch of Agent, domestic or foreign, as it may hereafter
designate as its Eurodollar Lending Office by 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 a Eurodollar
Lending Office), or at such other office, branch or affiliate of
such Bank as it may designate as its Eurodollar Lending Office
by notice to Company and Agent.
"Event of Default" shall mean any of those conditions or
events listed in Section 9.1 of this Agreement.
"Existing Letters of Credit" shall mean the letters of
credit described on Schedule 1.1.
"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
Bank from three Federal funds brokers of recognized standing
selected by it, all as conclusively determined by Agent, such
sum to be rounded upward, if necessary, to the nearest whole
multiple of 1/16 of 1%.
"Fees" shall mean the Letter of Credit Fee and the Revolving
Credit Commitment Fee.
"GAAP" shall mean generally accepted accounting principles
as in effect on December 31, 1994 as such generally accepted
accounting principles were applied in the preparation of the
financial statements of Company and its Consolidated
Subsidiaries dated as of December 31, 1994.
"Guaranty" shall mean the Guaranty of the Indebtedness dated
as of the date hereof, executed and delivered by the Guarantors
to the Banks.
"Guarantors" shall mean Champion Home Builders Co., Moduline
International, Inc., Lamplighter Homes, Inc., Champion Motor
Coach, Inc., Dutch Housing, Inc., Chandeleur Homes, Inc., Crest
Ridge Homes, Inc., Builders Credit Corporation, Champion
Financial Corporation, and any other Person guaranteeing the
obligations of Company to Banks.
"Indebtedness" shall mean all indebtedness and liabilities
(including interest, Fees, obligations under indemnities and all
other charges) arising under this Agreement or the Loan
Documents, of Company to the Banks or the Agent, now owing or
that may be hereafter by Company to the Banks or the Agent, with
interest thereon according to the rates and terms specified, or
as provided by law, and any and all consolidations, amendments,
renewals, replacements or extensions of the foregoing.
"Interest Period" shall mean (i) with respect to a
Eurodollar-based Advance, one (1), two (2), three (3) or six (6)
months as selected by Company pursuant to Section 2.7, provided,
however, that any Eurodollar-Interest Period which commences on
the last Business Day of a calendar month (or on any day for
which there is no numerically corresponding day in the
appropriate subsequent calendar month) shall end on the last
Business Day of the appropriate subsequent calendar month and
(ii) with respect to a Swing Line Advance, shall mean a period
of one (1) to thirty (30) days agreed to in advance by Company
and the Swing Line Bank as selected by Company pursuant to
Section 2B.3. Each Interest Period which would otherwise end on
a day which is not a Business Day shall end on the next
succeeding Business Day or, if such next succeeding Business Day
falls in the next succeeding calendar month, on the next
preceding Business Day, and no Interest Period which would end
after the Revolving Credit Maturity Date shall be permitted with
respect to any Advance.
"Issuing Office" shall mean Agent's office located at 000
Xxxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx 00000 or such other office as
Agent shall designate as its Issuing Office.
"Letter of Credit Agreement" shall mean any and all standby
letter of credit applications and agreements and any and all
similar documents and agreements, executed and delivered by
Company to Agent with respect to any Letter of Credit and any
and all present and future amendments thereto.
"Letters of Credit" shall mean any and all present and
future standby letters of credit issued by Agent for the account
of Company, or which Agent is committed or otherwise obligated
to issue for the account of Company, in accordance with the
terms of this Agreement and as further governed by and subject
to any Letter of Credit Agreement(s) executed by Company with
respect thereto.
"Letter of Credit Cash Collateral" shall mean cash deposited
by Company to secure Reimbursement Obligations in the full
amount of all outstanding Letters of Credit pursuant to
agreements in form and substance satisfactory to Agent.
"Letter of Credit Documents" is defined in Section 2A.7(a)
hereof.
"Letter of Credit Fee" shall mean a per annum fee on the
aggregate face amount of all Letters of Credit, determined as
follows:
If Consolidated Funded The Letter of Credit Fee is:
Debt Ratio ("x") is:
equal to or greater than
1.75 1.25%
equal to or greater than
1.25 but less than 1.75 1.00%
equal to or greater than
.75 but less than 1.25 .75%
equal to or greater than
.40 but less than .75 .60%
less than .40 .45%
"Letter of Credit Maximum Amount" shall mean Ten Million
Dollars ($10,000,000).
"Lien" shall mean any mortgage, pledge, encumbrance,
security interests, lien or charge of any kind.
"Loan Documents" shall mean this Agreement, the Notes, the
Guaranty, the Letter of Credit Documents, and any other
documents, certificates, instruments or agreements executed
pursuant to or in connection with any such document or this
Agreement as such documents may be amended from time to time.
"Majority Banks" shall mean at any time Banks holding not
less than sixty-six and two thirds percent (66-2/3%) of the
Percentages, or, if the commitment of the Banks to make Advances
has been terminated, Banks holding not less than sixty-six and
two thirds percent (66-2/3%) of the Indebtedness outstanding
under the Notes.
"Maximum Commitment" shall mean Seventy Million Dollars
($70,000,000).
"Net Income" of any Person for any period means the net
income (loss) of such Person for such period, determined in
accordance with GAAP.
"Notes" shall mean the Revolving Credit Notes and the Swing
Line Notes.
"Percentage" shall mean sixty-four and 2857/10000 percent
(64.2857%) with respect to Comerica Bank and Thirty-Five and
7143/10000 percent (35.7143%) with respect to The First National
Bank of Chicago, as adjusted from time to time to account for
assignments permitted by Section 12.8.
"Permitted Acquisition" shall mean any acquisition by the
Company or any 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 satisfies and/or 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, the business of the Company, or is
engaged in a manufacturing or assembly business using
systems or techniques not unlike those of the Company
or any Subsidiary;
(b) Both immediately before and after such acquisition no
Event of Default, or event which with the giving of
notice or the passage of time or both would constitute
an Event of Default, shall have occurred and be
continuing;
(c) Based upon financial statements of the business or
Person being acquired in a form reasonably satisfactory
to the Agent and the Banks, the Company has
demonstrated that on a pro forma basis after giving
effect to such acquisition, it will continue to comply
with all of the terms and conditions of this Agreement
and the Loan Documents for a period of not less than
one year following the date of such acquisition; and
(d) The Board of Directors (or other Person(s) exercising
similar functions) 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.
"Permitted Liens" shall mean with respect to Company and all
Guarantors:
(a) liens for taxes not yet due and payable or which
are being contested in good faith by appropriate proceedings
diligently pursued, provided that such provision for the
payment of all such taxes has been made on the books of such
Person as may be required by generally accepted accounting
principles, consistently applied;
(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
Company or any Guarantor 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 Company and Guarantors 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 Company and
Guarantors 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 Company and
Guarantors 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 Company or
any Guarantor;
(f) purchase money security interests in any inventory
and equipment to secure the indebtedness referred to in
Section 7.4(d) hereof, provided that such security interest
is created contemporaneously with the acquisition of an
asset and does not extend to any property other than the
asset so purchased; and
(g) the liens, mortgages and encumbrances described on
Exhibit "C" attached hereto.
"Pension Plans" shall mean all pension plans of Company and
Guarantors which are subject to Title IV of ERISA.
"Person" shall mean an individual, corporation, 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.
"Prime Rate" shall mean the per annum interest rate
established by Comerica Bank as its prime rate for its borrowers
as such rate may vary from time to time, which rate is not
necessarily the lowest rate on loans made by Agent at any such
time.
"Prime-based Advance" shall mean an Advance which bears
interest at the Prime-based Rate.
"Prime-based Rate" shall mean a per annum interest rate
which is the greater of (i) the Prime Rate plus the Applicable
Margin or (ii) the Alternate Base Rate.
"Prohibited Transaction" is defined in Section 7.2.
"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" shall mean any Swing Line Advance
which bears interest at the Quoted Rate.
"Regulatory Change" shall mean any change after the date of
this Agreement in United States federal, state or foreign law or
regulations (including, without limitation, Regulation D) or the
adoption or making after such date of any official or
governmental interpretation, directive or request applying to a
class of banks including any Bank of or under any United States
federal, state or foreign law or regulations (whether or not
having the force of law and whether or not failure to comply
therewith would be unlawful) by any court or governmental or
monetary authority charged with the interpretation or
administration thereof.
"Reimbursement Obligation" shall mean the obligation of
Company to pay and reimburse Agent for any and all drafts and
other requests for payment duly and properly honored by Agent
under any Letters of Credit in accordance with the terms and
conditions of the respective Letter of Credit Agreement(s).
"Request for Revolving Credit Advance" shall mean a Request
for Revolving Credit Advance issued by Company under this
Agreement in the form annexed to this Agreement as Exhibit "A".
"Request for Swing Line Advance" shall mean a Request for
Swing Line Advance issued by Company under Section 2B.3 of this
Agreement in the form attached hereto as Exhibit "H".
"Revolving Credit" shall mean the revolving credit loans to
be advanced to the Company by the Revolving Credit Banks
pursuant to Article 2 hereof.
"Revolving Credit Advance" shall mean a borrowing requested
by Company and made by Banks under this Agreement, including any
refunding or conversions of such borrowing pursuant to Section
2.7 hereof, and any Advance in respect of a Letter of Credit
under Section 2A.6 hereof, and shall include, as applicable, a
Eurodollar-based Advance and a Prime-based Advance.
"Revolving Credit Banks" shall mean Comerica Bank, The First
National Bank of Chicago, and such other financial institutions
from time to time parties hereto as lenders of the Revolving
Credit.
"Revolving Credit Commitment Fee" shall mean a per annum fee
on the unused portion of the Revolving Credit provided by the
Revolving Credit Banks under this Agreement (determined as
provided in Section 2.11), as follows:
If Consolidated Funded The Revolving Credit Commitment
Debt Ratio ("x") is: Fee is:
equal to or greater than
1.75 .45%
equal to or greater than
1.25 but less than 1.75 .375%
equal to or greater than
.75 but less than 1.25 .25%
equal to or greater than
.40 but less than .75 .15%
less than .40 .125%
"Revolving Credit Maturity Date" shall mean the earlier to
occur of (i) September 29, 1998, as such date may be extended
from time to time pursuant to Section 2.14 hereof, or (ii) the
date on which the commitment of the Banks to make Advances shall
be terminated pursuant to Sections 2.13 or 9.2 hereof.
"Revolving Credit Notes" shall mean Revolving Credit Notes
issued by Company under this Agreement in the form annexed to
this Agreement as Exhibit "B".
"Subsidiary(ies)" shall mean any other corporation,
association, joint stock company, or business trust of which
more than fifty percent (50%) of the outstanding voting stock is
owned either directly or indirectly by Company or one or more of
its Subsidiaries or by Company and 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 Company and/or its Subsidiaries.
"Substantial Portion" means, with respect to the property of
Company and it Subsidiaries, property which (i) represents more
than 10% of the consolidated assets of Company and its
Subsidiaries as would be shown in the Consolidated financial
statements of Company and its Subsidiaries as at the beginning
of the twelve-month period ending with the month in which such
determination is made, or (ii) is responsible for more than 10%
of the Consolidated net sales or of Consolidated Net Income as
reflected in the financial statements referred to in clause (i)
above.
"Swing Line Advance" shall mean an Advance made by the Swing
Line Bank to Company pursuant to Section 2B.1 hereof.
"Swing Line Bank" shall mean Comerica Bank, in its capacity
as lender under Article 2B of this Agreement, and its successors
and assigns.
"Swing Line Note" shall mean the Swing Line Note described
in Section 2B.1 hereof, made by Company to Swing Line Bank in
the form annexed hereto as Exhibit "I".
2. REVOLVING CREDIT
2.1 Commitment. Subject to the terms and conditions of this
Agreement, each Revolving Credit Bank severally and for itself
alone agrees to make Advances of the Revolving Credit to 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 each such Revolving Credit Bank's Percentage of
the Maximum Commitment. All of such Advances hereunder shall be
evidenced by the Revolving Credit Notes, under which advances,
repayments and readvances may be made, subject to the terms and
conditions of this Agreement.
2.2 Accrual of Interest and Maturity; Margin Adjustments.
(a) The Revolving Credit Notes, and all principal and interest
outstanding thereunder, shall mature and become due and payable
in full on the Revolving Credit Maturity Date. Each Advance
evidenced by the Revolving Credit Notes from time to time
outstanding hereunder shall, from and after the date of such
Advance, bear interest at its Applicable Interest Rate. The
amount and date of each Revolving Credit Advance, its Applicable
Interest Rate, its Interest Period, and the amount and date of
any repayment shall be noted on Agent's records, which records
will be conclusive evidence thereof, absent manifest error;
provided, however, that any failure by the Agent to record any
such information shall not relieve 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.
(b) The Applicable Margins shall initially be .60% for
Eurodollar-based Advances and 0% for Prime-based Advances.
Adjustments to the Applicable Margin based on the Consolidated
Funded Debt Ratio shall be implemented as follows:
(i) Such Applicable Margin adjustments shall be given
prospective effect only, effective forty five (45)
days after the end of each of the first three
fiscal quarters of each year, and ninety (90) days
after the end of the last fiscal quarter of each
year, as to any Prime-based Advance, and as to any
Eurodollar-based Advance, effective upon the
expiration of the applicable Interest Period(s),
if any, in effect on the date of delivery of the
quarterly financial certificate required under
Section 6.1(c) hereof, as the case may be,
establishing applicability of the appropriate
adjustments, with no retroactivity or claw-back;
provided, however, that if Company fails to timely
deliver such financial certificate, the Applicable
Margins shall be 1.25% for Eurodollar-based
Advances and 0% for Prime-based Advances for the
number of days such financial certificate was not
timely delivered.
(ii) An adjustment hereunder, after becoming effective,
shall remain in effect only through the end of the
applicable Interest Period(s) in effect on the
delivery of subsequent quarterly financial
statements, as aforesaid, demonstrating any change
in such Consolidated Funded Debt Ratio or the
occurrence of any event which under the terms
hereof causes such adjustment no longer to be
applicable; and, any such subsequent adjustment or
no adjustment, as the case may be, shall apply
(and said pricing shall thereby be adjusted up or
down, as applicable), effective with the
commencement of the Interest Period immediately
following such change or event.
(iii) Such Applicable Margin adjustments under this
Section 2.2(b) shall be made irrespective of,
and in addition to, any other interest rate
adjustments hereunder.
2.3 Prime-based Interest Payments. Interest on the unpaid
balance of all Prime-based Advances from time to time
outstanding shall accrue from the date of such Advance to the
Revolving Credit Maturity Date (and until paid) at a per annum
interest rate equal to the Prime-based Rate, and shall be
payable in immediately available funds quarterly commencing on
December 30, 1995, and on the last day of each fiscal quarter
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.
2.4 Eurodollar-based Interest Payments. Interest on each
Eurodollar-based Advance shall be payable in immediately
available funds on the last day of the Interest Period
applicable thereto and if such Interest Period is longer than
three months, interest shall be payable at intervals of three
months after the first day thereof. Interest accruing at the
Eurodollar-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.
2.5 Interest Payments on Conversions. Notwithstanding
anything to the contrary in Sections 2.2, 2.3 and 2.4, all
accrued and unpaid interest on any Revolving Credit Advance
refunded or converted pursuant to Section 2.7 hereof shall be
due and payable in full on the date such Advance is refunded or
converted.
2.6 Reserved.
2.7 Requests for Advances and Requests for Refundings and
Conversions of Advances. Company may request a Revolving Credit
Advance, refund any Revolving Credit Advance in the same type of
Revolving Credit Advance or convert any Revolving Credit Advance
to any other type of Revolving Credit Advance only after
delivery to Agent of a Request for Revolving Credit Advance
executed by an authorized officer of Company, subject to the
following and to the remaining provisions hereof:
(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 Revolving Credit Advance,
which must be a Business Day;
(ii) whether the Revolving Credit Advance is a
refunding or conversion of an outstanding
Revolving Credit Advance; and
(iii) whether such Revolving Credit Advance is to be a
Prime-based Advance or a Eurodollar-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 11:00 a.m. (Detroit time)
three (3) Business Days prior to the proposed date of
Revolving Credit Advance, except in the case of a Prime-
based Advance, for which the Request for Revolving Credit
Advance must be delivered by 11 a.m. (Detroit time) on such
proposed date;
(c) (i) the principal amount of such requested
Revolving Credit Advance, plus the principal amount of all
other Advances then outstanding hereunder, the aggregate
undrawn portion of any Letters of Credit which shall be
outstanding as of the date of the requested Revolving Credit
Advance and the aggregate face amount of Letters of Credit
requested but not yet issued, shall not exceed the Maximum
Commitment;
(d) the principal amount of such Revolving Credit
Advance, plus the amount of any other outstanding Revolving
Credit Advance to be then combined therewith having the same
Applicable Interest Rate and Interest Period, if any, shall
be (i) in the case of a Prime-based Advance at least One
Hundred Thousand Dollars ($100,000), and (ii) in the case of
a Eurodollar-based Advance at least Three Million Dollars
($3,000,000) in multiples of One Million Dollars
($1,000,000);
(e) each Request for Revolving Credit Advance, once
delivered to Agent, shall not be revocable by Company, and
shall constitute and include a certification by the Company,
as of the date thereof that:
(i) both before and after the Revolving Credit
Advance, the obligations of the Company set forth
in this Agreement and the Loan Documents are
valid, binding and enforceable obligations of the
Company;
(ii) to the best knowledge of Company, all conditions
to Revolving Credit Advances have been satisfied;
(iii) there is no Event of Default in existence, and no
event which, with the giving of notice or the
lapse of time, or both, would constitute an Event
of Default; and
(iv) the representations and warranties contained in
this Agreement and the Loan Documents are true and
correct in all material respects.
2.8 Disbursement of Revolving Credit Advances.
(a) Upon receiving any Request for Revolving Credit
Advance from Company under Section 2.7 hereof, Agent shall
promptly notify each Revolving Credit Bank by wire, telex or
by telephone (confirmed by wire, telecopy or telex) of the
amount of such Revolving Credit Advance to be made and the
date such Revolving Credit Advance is to be made by said
Revolving Credit Bank pursuant to its Percentage of the
Revolving Credit Advance. Unless such Revolving Credit
Bank's commitment to make Revolving Credit Advances
hereunder shall have been suspended or terminated in
accordance with this Agreement, each Revolving Credit Bank
shall make available the amount of its Percentage of the
Revolving Credit Advance in same day funds in Dollars to
Agent at the office of Agent not later than 2:00 p.m.
(Detroit time) on the date of such Revolving Credit Advance.
(b) Subject to submission of an executed Request for
Revolving Credit Advance by Company, Agent shall make
available to Company the aggregate of the amounts so
received by it from the Banks in respect of Section 2.7
hereof, in like funds, not later than 4:00 p.m. (Detroit
time) on the date of such Revolving Credit Advance by credit
to an account of Company maintained with Agent or to such
other account or third party as Company may reasonably
direct.
(c) Unless Agent shall have been notified by any
Revolving Credit Bank prior to the date of any proposed
Revolving Credit Advance that such Revolving Credit Bank
does not intend to make available to Agent such Revolving
Credit Bank's Percentage of the Revolving Credit Advance,
Agent may assume that such Bank has made such amount
available to Agent on such date, as aforesaid and may, in
its sole discretion and without obligation to do so, in
reliance upon such assumption, make available to Company a
corresponding amount. If such amount is not in fact made
available to Agent by such Revolving Credit Bank in
accordance with Section 2.8(a), as aforesaid, Agent shall be
entitled to recover such amount on demand from such
Revolving Credit Bank. If such Revolving Credit Bank does
not pay such amount forthwith upon Agent's demand therefor,
the Agent shall promptly notify Company, and Company shall
pay such amount to Agent. Agent shall also be entitled to
recover from such Bank or from Company, interest on such
amount in respect of each day from the date such amount was
made available by Agent to Company to the date such amount
is recovered by Agent, at a rate per annum equal to:
(i) in the case of such Revolving Credit Bank, the
Federal Funds Effective Rate; or
(ii) in the case of Company, the rate of interest then
applicable to the Revolving Credit Advance.
The obligation of any Revolving Credit Bank to make any
Revolving Credit Advance hereunder shall not be affected by
the failure of any other Revolving Credit Bank to make any
Revolving Credit Advance hereunder, and no Revolving Credit
Bank shall have any liability to the Company, the Agent, any
other Revolving Credit Bank, or any other party for another
Bank's failure to make any loan or Advance hereunder.
2.9 Prepayment. Company may prepay all or part of the
outstanding balance of any Prime-based Advance(s) under the
Revolving Credit Notes at any time (subject to not less than one
(1) Business Day's notice to Agent), provided that the amount of
any partial prepayment shall be at least Five Hundred Thousand
Dollars ($500,000) and the aggregate balance of Prime-based
Advance(s) of the Revolving Credit remaining outstanding shall
be at least Five Hundred Thousand Dollars ($500,000). Company
may prepay all or part of any Eurodollar-based Advance (subject
to not less than three (3) Business Day's notice to Agent) only
on the last day of the Interest Period therefor, provided that
the amount of any such partial prepayment shall be at least Five
Hundred Thousand Dollars ($500,000), and the unpaid portion of
such Advance which is refunded or converted under Section 2.7
shall be at least Three Million Dollars ($3,000,000). Any
prepayment made in accordance with this Section shall be without
premium, penalty or prejudice to the right to reborrow under the
terms of this Agreement. Any other prepayment of all or any
portion of the Revolving Credit, whether by acceleration,
required prepayment or otherwise, shall be subject to Section
3.1, hereof, but otherwise without premium, penalty or
prejudice.
2.10 Prime-based Advance in Absence of Election or Upon
Default. If, as to any outstanding Eurodollar-based Advance,
Agent has not received payment on the last day of the Interest
Period applicable thereto, or does not receive a timely Request
for Revolving Credit Advance meeting the requirements of Section
2.7 hereof with respect to the refunding or conversion of such
Revolving Credit Advance, or, subject to Section 2.6 hereof, if
on such day an Event of Default or event which, with notice or
lapse of time or both, would constitute an Event of Default
shall have occurred and be continuing, the principal amount
thereof which is not then prepaid shall be converted
automatically to a Prime-based Advance of the Revolving Credit
and the Agent shall thereafter promptly notify Company of said
action.
2.11 Revolving Credit Commitment Fee. From the date hereof
to the Revolving Credit Maturity Date, Company shall pay to the
Agent, for distribution to the Revolving Credit Banks ratably
according to their Percentages, the Revolving Credit Commitment
Fee on the daily average amount by which the Maximum Commitment,
less the aggregate daily undrawn amount of any Letters of Credit
which shall be outstanding during such period, exceeds the
aggregate amount of Revolving Credit Advances outstanding from
time to time. Solely for purposes of computing the Revolving
Credit Commitment Fee, Swing Line Advances shall be considered
to be Revolving Credit Advances and shall decrease the Revolving
Credit Commitment Fee of the Swing Line Bank accordingly. The
Revolving Credit Commitment Fee shall be payable quarterly in
arrears commencing with the quarter beginning October 1, 1995,
and at the Revolving Credit Maturity Date, and shall be computed
on the basis of a year of 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. The Revolving Credit Commitment Fee shall
not be refundable under any circumstances. The Revolving Credit
Commitment Fee shall initially be .15% per annum. Adjustments
thereto shall be given prospective effect only, effective on the
first day of the calendar quarter following delivery of the
quarterly financial certificate required under Section 6.1(c)
establishing applicability of the appropriate adjustments, with
no retroactivity or claw-back; provided, that if Company fails
to timely deliver such financial certificate, the Revolving
Credit Commitment Fee shall be .45% per annum for the number of
days such financial certificate was not timely delivered,
commencing on the first day of the following quarter. Upon
receipt of such payment Agent shall make prompt payment to each
Revolving Credit Bank of its share of the Revolving Credit
Commitment Fee based upon its respective Percentage.
2.12 Reduction of Indebtedness. If at any time and for any
reason the aggregate principal amount of all Advances hereunder
to Company, plus the aggregate undrawn amount of any Letters of
Credit which shall be outstanding at such time, exceeds the
Maximum Commitment, Company shall immediately reduce any pending
request for an 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.
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 3.1 hereof.
2.13 Optional Reduction or Termination of Revolving Credit
Commitment. The Company may upon at least twenty Business Days'
prior written notice to the Agent, permanently reduce the
Maximum 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 Maximum Commitment shall be in an
aggregate amount equal to Five Million Dollars ($5,000,000) or
an integral multiple thereof; (ii) each reduction shall be
accompanied by the payment of the Revolving Credit Commitment
Fee, if any, 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 Swing Line Advances and Revolving Credit Advances, plus the
aggregate amount of outstanding Letters of Credit, exceeds the
amount of the Maximum Commitment, taking into account the
aforesaid reductions thereof, together with interest thereon to
the date of prepayment; (iv) if the termination or reduction of
the Maximum Commitment requires the prepayment of a Eurodollar-
based Advance or Quoted Rate Advance, the termination or
reduction may be made only on the last Business Day of the then
current Interest Period applicable to such Advance; and (v) no
reduction shall reduce the amount of the Maximum Commitment to
an amount which is less than the sum of the aggregate undrawn
amount of any Letters of Credit outstanding at such time.
Reductions of the Maximum Commitment and any accompanying
prepayments of the Revolving Credit Notes shall be distributed
by Agent to each Revolving Credit Bank in accordance with such
Revolving Credit Bank's Percentage thereof, and will not be
available for reinstatement by or readvance to the Company and
any accompanying prepayments of Swing Line Advances 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 Maximum Commitment hereunder shall reduce each
Revolving Credit Bank's portion thereof proportionately (based
upon 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 Eurodollar-based Advances which have
Interest Periods ending on the date of payment, next to Swing
Line Advances which bear interest at the Prime-based Rate, next
to Quoted Rate Advances and then to all remaining Eurodollar-
based Advances.
2.14 Extension of Revolving Credit Maturity Date. Provided
that no Event of Default has occurred and is continuing, Company
may, by written notice to Agent and each Bank (which notice
shall be irrevocable and which shall not be deemed effective
unless actually received by Agent and each Bank) prior to March
1, but not before April 1, of each year (commencing with
calendar year 1998), request that the Banks extend the then
applicable Revolving Credit Maturity Date to a date that is one
year later than the Revolving Credit Maturity Date then in
effect (each such request, a "Request"). Company shall deliver
with each Request Consolidated financial projections for the
current and the following two fiscal years, including income
statements and balance sheets. Each Bank shall, not later than
forty-five (45) calendar days following the date of its receipt
of the Request, give written notice to the Agent stating whether
such Bank is willing to extend the Revolving Credit Maturity
Date as requested. If Agent has received the aforesaid written
approvals of such Request from each of the Banks, then,
effective upon the date of Agent's receipt of all such written
approvals from the Banks, as aforesaid, the Revolving Credit
Maturity Date shall be so extended for an additional one year
period, the term Revolving Credit Maturity Date shall mean such
extended date and Agent shall promptly notify the Company and
the Banks that such extension has occurred. If (i) any Bank
gives the Agent written notice that it is unwilling to extend
the Revolving Credit Maturity Date as requested or (ii) any Bank
fails to provide written approval to Agent of such a Request
within forty-five (45) calendar days of the date of Agent's
receipt of the Request, then (x) the Banks shall be deemed to
have declined to extend the Revolving Credit Maturity Date, (y)
the then-current Revolving Credit Maturity Date shall remain in
effect (with no further right on the part of Company to request
extensions thereof under this Section 2.14) and (z) the
commitments of the Banks to make Advances of the Revolving
Credit hereunder shall terminate on the Revolving Credit
Maturity Date then in effect, and Agent shall promptly notify
Company and the Banks thereof.
2.15 Application of Advances. Advances of the Revolving
Credit shall be available, subject to the terms hereof, to fund
working capital needs and for other general corporate purposes
of the Company.
2A. LETTERS OF CREDIT.
2A.1 Letters of Credit. Subject to the terms and conditions
of this Agreement, Agent may through its 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 the Company accompanied by a duly
executed Letter of Credit Agreement and such other documentation
related to the requested Letter of Credit as the Agent may
reasonably require, issue standby Letters of Credit for the
account of the Company, 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 have an initial expiration date not later than one
(1) year from its date of issuance (and may, in the sole
discretion of the Agent, contain customary evergreen provisions
acceptable to Agent); provided, however that each Letter of
Credit shall expire (notwithstanding any renewals thereof or
evergreen provisions contained therein) not later than ten (10)
Business Days prior to the Revolving Credit Maturity Date.
2A.2 Conditions to Issuance. No Letter of Credit shall be
issued unless, as of the date of issuance of such Letter of
Credit:
(a) the face amount of the Letter of Credit requested,
plus the undrawn portion of all other outstanding
Letters of Credit does not exceed the Letter of
Credit Maximum Amount;
(b) (i) the face amount of the Letter of Credit
requested, plus the aggregate principal amount of
all Advances outstanding under the Notes, plus the
aggregate undrawn portion of all other outstanding
Letters of Credit, does not exceed the Maximum
Commitment;
(c) the obligations of Company set forth in this
Agreement and any of the Loan Documents are valid,
binding and enforceable obligations of such
parties, as the case may be and the valid, binding
and enforceable nature of this Agreement and the
Loan Documents has not been disputed by Company;
(d) both immediately before and immediately after
issuance of the Letter of Credit requested, no
Event of Default exists and no event which, with
the giving of notice or lapse of time, or both,
would constitute an Event of Default, exists;
(e) the representations and warranties contained in
this Agreement and the Loan Documents are true in
all material respects as if made on such date;
(f) the Company shall have delivered to Agent at its
Issuing Office, not less than five (5) Business
Days prior to the requested date for issuance (or
such shorter time as the Agent, 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
satisfactory to Agent and its Issuing Office; and
(g) Agent shall have received the issuance fee
required in connection with the issuance of such
Letter of Credit pursuant to Section 2A.5 hereof.
Each Letter of Credit Agreement submitted to Agent pursuant
hereto shall constitute the certification by the Company of the
matters set forth in this Section 2A.2 (a) through (g). The
Agent shall be entitled to rely on such certification without
any duty of inquiry.
2A.3 Notice. Agent shall give notice to each Revolving
Credit Bank of the issuance of each Letter of Credit, not later
than three (3) Business Days after issuance of each Letter of
Credit, specifying the amount thereof and the amount of such
Revolving Credit Bank's participation interest thereof.
2A.4 Letter of Credit Fees. (a) Company agrees to pay to
Agent, for distribution to the Revolving Credit Banks ratably
according to their Percentages, the Letter of Credit Fee on the
aggregate face amount of all Letters of Credit, determined on a
daily basis, payable quarterly in advance. For any Existing
Letter of Credit for which a fee has been paid in advance, the
Letter of Credit Fee will commence at the time such advance
payment expires. For any other Letter of Credit, the Letter of
Credit Fee will commence upon issuance. The Letter of Credit Fee
shall be computed on the basis of a year of 360 days and
assessed for the actual number of days elapsed. Whenever any
payment of the Letter of Credit 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. The Letter of Credit Fee
shall not be refundable under any circumstances. The Letter of
Credit Fee shall initially be .60% per annum. Adjustments
thereto shall be given prospective effect only, effective on the
first day of the next fiscal quarter following the delivery of
the quarterly financial certificate required under Section
6.1(c) establishing applicability of the appropriate
adjustments, with no retroactivity or claw-back; provided, that
if Company fails to timely deliver such financial certificate,
commencing on the first day of the next fiscal quarter the
Letter of Credit Fee shall be 1.25% per annum for the number of
days such financial certificate was not timely delivered, and
thereafter shall be at the rate otherwise applicable under this
Section 2A.4. Upon receipt of such payment Agent shall make
prompt payment to each Revolving Credit Bank of its share of the
Letter of Credit Fee based upon its respective Percentage.
(b) 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
shall either (i) impose, modify or cause to be deemed applicable
any reserve, special deposit, limitation or similar requirement
against letters of credit issued by, or assets held by, or
deposits in or for the account of, Agent or the Revolving Credit
Banks or (ii) impose on Agent or the Revolving Credit Banks any
other condition regarding this Agreement or the 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 Agent or
the Revolving Credit Banks of issuing or maintaining or
participating in any of the Letters of Credit (which increase in
cost or expense shall be determined by the Agent's or such
Revolving Credit Bank's reasonable allocation of the aggregate
of such cost increases and expense resulting from such events),
then, upon demand by the Agent or such Revolving Credit Bank, as
the case may be, the Company shall, within ten days following
demand for payment, pay to Agent or such Revolving Credit Bank,
as the case may be, from time to time as specified by the Agent
or such Revolving Credit Bank, additional amounts which shall be
sufficient to compensate the Agent or such Revolving Credit Bank
for such increased cost and expense, together with interest on
each such amount from ten days after the date demanded until
payment in full thereof at the Prime-based Rate. A certificate
as to such increased cost or expense incurred by the Agent or
such Revolving Credit Bank, as the case may be, as a result of
any event mentioned in clause (i) or (ii) above, submitted to
the Company, shall be conclusive, absent manifest error, as to
the amount thereof.
2A.5 Issuance Fees. In connection with the Letters of
Credit, and in addition to the Letter of Credit Fees, the
Company shall pay, for the sole account of the Agent, letter of
credit issuance fees and standard documentation, administration,
payment and cancellation charges assessed by Agent or its
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 Agent's Issuing office in effect from time to
time.
2A.6 Draws and Demands for Payment Under Letters of Credit.
(a) The Company agrees to pay to the Agent, on the day
on which the Agent shall honor a draft or other demand for
payment presented or made under any Letter of Credit, an amount
equal to the amount paid by the Agent in respect of such draft
or other demand under such Letter of Credit and all expenses
paid or incurred by the Agent relative thereto. Unless the
Company shall have made such payment to the Agent on such day,
upon each such payment by the Agent, the Agent shall be deemed
to have disbursed to the Company, and the Company shall be
deemed to have elected to substitute for its Reimbursement
Obligation, a Prime-based Advance for the account of the
Revolving Credit Banks in an amount equal to the amount so paid
by the Agent in respect of such draft or other demand under such
Letter of Credit. Such Prime-based Advance shall be disbursed
notwithstanding any failure to satisfy any conditions for
disbursement of any Revolving Credit Advance set forth in
Section 2 hereof and, to the extent of the Prime-based Advance
so disbursed, the Reimbursement Obligation of the Company under
this Section 2A.6 shall be deemed satisfied.
(b) If the Agent shall honor a draft or other demand for
payment presented or made under any Letter of Credit, the Agent
shall provide notice thereof to the Company on the date such
draft or demand is honored, and to each Revolving Credit Bank on
such date unless the Company shall have satisfied its
Reimbursement Obligation under Section 2A.6(a) by payment to the
Agent on such date.
(c) Upon issuance by the Agent of each Letter of Credit
hereunder, each Revolving Credit Bank shall automatically
acquire a pro rata risk participation interest in such Letter of
Credit and related Letter of Credit Payment based on its
respective Percentage. Each Revolving Credit Bank, on the date a
draft or demand under any Letter of Credit is honored, shall
make its Percentage share of the amount paid by the Agent, and
not reimbursed by the Company on such day, available in
immediately available funds at the principal office of the Agent
for the account of the Agent. If and to the extent such
Revolving Credit Bank shall not have made such pro rata portion
available to the Agent, such Revolving Credit Bank and the
Company severally agree to pay to the Agent forthwith on demand
such amount together with interest thereon, for each day from
the date such amount was paid by the Agent until such amount is
so made available to the Agent at a per annum rate equal to (in
the case of the Company) the interest rate applicable during
such period to the related Advance disbursed under Section
2A.6(a) in respect of the Reimbursement Obligation of the
Company, or (in the case of a Revolving Credit Bank) the Federal
Funds Effective Rate. If such Revolving Credit Bank shall pay
such amount to the Agent together with such interest, such
amount so paid shall constitute a Prime-based Advance of the
Revolving Credit by such Revolving Credit Bank disbursed in
respect of the Reimbursement Obligation of the Company under
Section 2A.6(a) for purposes of this Agreement, effective as of
the date such amount was paid by the Agent. The failure of any
Revolving Credit Bank to make its pro rata portion of any such
amount paid by the Agent available to the Agent shall not
relieve any other Revolving Credit Bank of its obligation to
make available its pro rata portion of such amount, but no
Revolving Credit Bank shall be responsible for failure of any
other Revolving Credit Bank to make such pro rata portion
available to the Agent.
(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 Agent shall be the issuer of Letters of
Credit under this Agreement.
2A.7 Obligations Irrevocable. The obligations of Company to
make payments to Agent with respect to Reimbursement Obligations
under Section 2A.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 such 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 respect to any of
the Letter of Credit Documents;
(c) The existence of any claim, setoff, defense or
other right which the Company may have at any time against any
beneficiary or any transferee of any Letter of Credit (or any
persons or entities for whom any such beneficiary or any such
transferee may be acting), the Agent or any 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 Agent to the beneficiary under any
Letter of Credit against presentation of documents which do not
comply with the terms of the Letter of Credit, including failure
of any documents to bear any reference or adequate reference to
such Letter of Credit;
(f) Any failure, omission, delay or lack on the part
of the Agent 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, any Bank or any such party
under this Agreement, any of the Loan Documents or any of the
Letter of Credit Documents, or any other acts or omissions on
the part of the Agent, any Bank or any such party; or
(g) Any other event or circumstance that would, in the
absence of this Section 2A.7, result in the release or discharge
by operation of law or otherwise of Company from the performance
or observance of any obligation, covenant or agreement contained
in Section 2A.6.
No setoff, counterclaim, reduction or diminution of any
obligation or any defense of any kind or nature which Company
has or may have against the beneficiary of any Letter of Credit
shall be available hereunder to Company against the Agent or any
Bank. Nothing contained in this Section 2A.7 shall be deemed to
prevent Company after satisfaction in full of the absolute and
unconditional obligations of Company 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.
2A.8 Risk Under Letters of Credit. (a) In assigning and the
handling of Letters of Credit and any security therefor, or any
documents or instruments given in connection therewith, Agent
shall have the sole right to take or refrain from taking any and
all administrative actions under or upon the Letters of Credit.
(b) Subject to other terms and conditions of this
Agreement, Agent 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 Agent's regularly
established practices and procedures and, except pursuant to
Section 11.3 hereof, Agent will have no further obligation with
respect thereto. In the administration of Letters of Credit,
Agent shall not be liable for any action taken or omitted on the
advice of counsel, accountants, appraisers or other experts
selected by Agent and Agent may rely upon any notice,
communication, certificate or other statement from Company, any
beneficiaries of Letters of Credit, or any other Person which
Agent believes to be authentic. Agent will promptly furnish the
Revolving Credit Banks with copies of Letter of Credit
Agreements, Letters of Credit and documents related thereto.
(c) In connection with the issuance and administration
of Letters of Credit and the assignments hereunder, Agent makes
no representation and shall have no responsibility with respect
to (i) the obligations of Company 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 Company or any other Person,
or (iii) any failure or delay in exercising any rights or powers
possessed by Agent in its capacity as issuer of Letters of
Credit.
(d) If at any time Agent 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 shall
receive same for the pro rata benefit of the Revolving Credit
Banks in accordance with their respective Percentage interests
therein and shall promptly deliver to each Revolving Bank its
share thereof, less such Revolving Credit Bank's pro rata share
of the costs of such recovery, including court costs and
attorney's fees. If at any time any Revolving Credit Bank shall
receive from any source whatsoever any payment on any such
unreimbursed amount or interest thereon in excess of such
Revolving Credit Bank's Percentage share of such payment, such
Revolving Credit Bank will promptly pay over such excess to
Agent, for redistribution in accordance with this Agreement.
2A.9 Indemnification. (a) The Company hereby indemnifies and
agrees to hold harmless the Banks and the Agent, and their
respective officers, directors, employees and agents, from and
against any and all claims, damages, losses, liabilities, costs
or expenses of any kind or nature whatsoever which the Banks or
the Agent or any such person may incur or which may be claimed
against any of them by reason of or in connection with any
Letter of Credit, and neither any Bank nor the Agent or any of
their respective officers, directors, employees or agents shall
be liable or responsible for: (i) the use which may be made of
any Letter of Credit or for any acts or omissions of any
beneficiary in connection therewith; (ii) the validity,
sufficiency or genuineness of documents or of any endorsement
thereon, even if such documents should in fact prove to be in
any or all respects invalid, insufficient, fraudulent or forged;
(iii) payment by the Agent to the beneficiary under any Letter
of Credit against presentation of documents which do not comply
with the terms of any Letter of Credit (unless such payment
resulted from the gross negligence or willful misconduct of the
Agent), including failure of any documents to bear any reference
or adequate reference to such Letter of Credit; (iv) any error,
omission, interruption or delay in transmission, dispatch or
delivery of any message or advice, however transmitted, in
connection with any Letter of Credit; or (v) any other event or
circumstance whatsoever arising in connection with any Letter of
Credit; provided, however, that Company shall not be required to
indemnify the Banks and the Agent and such other Persons, and
the Agent shall be liable to the Company to the extent, but only
to the extent, of any direct, as opposed to consequential or
incidental, damages suffered by Company which were caused by the
Agent's wrongful dishonor of any Letter of Credit after the
presentation to it by the beneficiary thereunder of a draft or
other demand for payment and other documentation strictly
complying with the terms and conditions of such Letter of
Credit.
(b) It is understood that in making any payment under a
Letter of Credit the Agent will rely on documents presented to
it under such Letter of Credit as to any and all matters set
forth therein without further investigation and regardless of
any notice or information to the contrary. It is further
acknowledged and agreed that Company may have rights against the
beneficiary or others in connection with any Letter of Credit
with respect to which the Banks are alleged to be liable and it
shall be a condition of the assertion of any liability of the
Banks under this Section that Company shall contemporaneously
pursue all remedies in respect of the alleged loss against such
beneficiary and any other parties obligated or liable in
connection with such Letter of Credit and any related
transactions.
2A.10 Right of Reimbursement. Each Revolving Credit Bank
agrees to reimburse the Agent on demand, pro rata in accordance
with their Percentages, for (i) the out-of-pocket costs and
expenses of the Agent to be reimbursed by Company pursuant to
any Letter of Credit Agreement or any Letter of Credit, to the
extent not reimbursed by Company and (ii) to the extent not
reimbursed by the Company, any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs,
fees, expenses or disbursements of any kind and nature
whatsoever which may be imposed on, incurred by or asserted
against Agent (in its capacity as issuer of any Letter of
Credit) in any way relating to or arising out of this Agreement,
any Letter of Credit, any documentation or any transaction
relating thereto, or any Letter of Credit Agreement, except to
the extent that such liabilities, losses, costs or expenses were
incurred by Agent solely as a result of Agent's gross negligence
or willful misconduct.
2A.11 Existing Letters of Credit. Each Existing Letter
of Credit shall be deemed for all purposes of this Agreement to
be a Letter of Credit, and each application submitted in
connection with each Existing Letter of Credit shall be deemed
for all purposes of this Agreement to be a Letter of Credit
Application. On the date of execution of this Agreement, the
Agent shall be deemed automatically to have sold and
transferred, and each other Revolving Credit Bank shall be
deemed automatically, irrevocably, and unconditionally to have
purchased and received from the Agent, without recourse or
warranty, an undivided interest and participation, to the extent
of such other Revolving Credit Bank's Percentage, in each
Existing Letter of Credit and the applicable Reimbursement
Obligations with respect thereto and any security therefor or
guaranty pertaining thereto.
2B. SWING LINE CREDIT.
2B.1 Swing Line Advances. The Swing Line Bank shall, on the
terms and subject to the conditions hereinafter set forth, make
one or more advances (each such advance being a "Swing Line
Advance") to 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 aggregate amount not to
exceed Five Million Dollars ($5,000,000) at any time
outstanding; provided, however, that after giving effect to all
Swing Line Advances and all Revolving Credit Advances requested
to be made on such date, the aggregate principal amount of all
outstanding Swing Line Advances and Revolving Credit Advances
and the undrawn portion of all outstanding Letters of Credit
shall not exceed the Maximum Commitment. All Swing Line Advances
shall be evidenced by the Swing Line Note, under which advances,
repayments and readvances 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 Company on the last day of the Interest Period applicable
thereto. In no event whatsoever shall any outstanding Swing Line
Advance be deemed to reduce, modify or affect any Bank's
commitment to make Advances based upon its Percentage.
2B.2 Accrual of Interest. Each Swing Line Advance shall bear
interest at its Applicable Interest Rate. The amount and date of
each Swing Line Advance, its Applicable Interest Rate, its
Interest Period, and the amount and date of any repayment shall
be noted on Swing Line Bank's records, 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 Company of its obligation to
repay the outstanding principal amount of such Swing Line
Advance, all interest accrued thereon and any amount payable
with respect thereto in accordance with the terms of this
Agreement and the Loan Documents.
2B.3 Requests for Swing Line Advances. Company may request a
Swing Line Advance only after delivery to Swing Line Bank of a
Request for Swing Line Advance executed by an authorized officer
of Company, subject to the following and to the remaining
provisions hereof:
(a) each such Request for Swing Line Advance shall set
forth the information required on the Request for Swing Line
Advance form annexed hereto as Exhibit "H", including without
limitation:
(i) the proposed date of Swing Line Advance,
which must be a Business Day;
(ii) whether such Swing Line Advance is to be a
Prime-based Advance or Quoted Rate Advance; and
(iii) the duration of the Interest Period
applicable thereto;
(b) each such Request for Swing Line Advance shall be
delivered to Swing Line Bank by noon (Detroit time) on the
proposed date of the Swing Line Advance;
(c) the principal amount of such requested Swing Line
Advance, plus the principal amount of all other Advances then
outstanding hereunder, plus the aggregate undrawn portion of all
Letters of Credit, plus the aggregate face amount of Letters of
Credit requested but not yet issued, shall not exceed the
Maximum Commitment;
(d) the principal amount of such Swing Line Advance
shall be at least One Hundred Thousand Dollars ($100,000);
(e) each Request for Swing Line Advance, once
delivered to Swing Line Bank, shall not be revocable by Company,
and shall constitute and include a certification by the Company
as of the date thereof that:
(i) both before and after the Swing Line Advance,
the obligations of the Company set forth in this Agreement
and the Loan Documents, as applicable, are valid, binding
and enforceable obligations;
(ii) to the best knowledge of Company, all
conditions to Advances have been satisfied;
(iii) both before and after the Swing Line Advance,
there is no Event of Default in existence and no event
which, with the giving of notice, the running of time, or
both, would constitute an Event of Default; and
(iv) both before and after the Swing Line Advance,
the representations and warranties contained in this
Agreement and the Loan Documents are true and correct in all
material respects.
Swing Line Bank shall promptly deliver to Agent by telecopier a
copy of any Request for Swing Line Advance received.
2B.4 Disbursement of Swing Line Advances. Subject to
submission of an executed Request for Swing Line Advance by
Company without exceptions noted in the compliance certification
therein and to the other terms and conditions hereof, Swing Line
Bank shall make available to Company the amount so requested, in
same day funds, not later than 4:00 p.m. (Detroit time) on the
date of such Swing Line Advance by credit to an account of
Company maintained with Swing Line Bank or to such other account
or third party as Company may reasonably direct. Swing Line Bank
shall promptly notify Agent of any Swing Line Advance by
telephone, telex or telecopier.
2B.5 Refunding of or Participation Interest in Swing Line
Advances.
(a) The Agent, at any time in its sole and absolute
discretion, may (or, upon the request of the Swing Line Bank,
shall) on behalf of the Company (which hereby irrevocably
directs the Agent to act on its behalf) request each Revolving
Credit Bank (including the Swing Line Bank in its capacity as a
Revolving Credit Bank) to make a Revolving Credit Advance in an
amount equal to such Revolving Credit Bank's Percentage of the
principal amount of the Swing Line Advances (the "Refunded Swing
Line Advances") outstanding on the date such notice is given;
provided that (i) at any time as there shall be a Swing Line
Advance outstanding for more than thirty days, the Agent shall,
on behalf of the Company (which hereby irrevocably directs the
Agent to act on its behalf), promptly request each Revolving
Credit Bank (including the Swing Line Bank) to make a Prime-
based Advance of the Revolving Credit in an amount equal to such
Revolving Credit Bank's Percentage of the principal amount of
such outstanding Swing Line Advance, and (ii) Swing Line
Advances shall be prepaid by the Borrower in accordance with the
provisions of Section 2B.8 hereof. Unless any of the events
described in Section 9.1(k) shall have occurred (in which event
the procedures of paragraph (b) of this Section 2B.5 shall
apply) and regardless of whether the conditions precedent set
forth in this Agreement to the making of a Revolving Credit
Advance are then satisfied, each Revolving Credit Bank shall
make the proceeds of its Revolving Credit Advance available to
the Agent for the benefit of the Swing Line Bank at the office
of the Agent specified in Section 2.8(a) prior to 11:00 a.m.
Detroit time, in funds immediately available on the Business Day
next succeeding the date such notice is given. The proceeds of
such Revolving Credit Advances shall be immediately applied to
repay the Refunded Swing Line Advances.
(b) If, prior to the making of a Revolving Credit
Advance pursuant to paragraph (a) of this Section 2B.5, one of
the events described in Section 9.1(k) shall have occurred, each
Revolving Credit Bank will, on the date such Revolving Credit
Advance was to have been made, purchase from the Swing Line Bank
an undivided participating interest in the Refunded Swing Line
Advance in an amount equal to its Percentage of such Refunded
Swing Line Advance. Each Revolving Credit Bank will immediately
transfer to the Agent, in immediately available funds, the
amount of its participation and upon receipt thereof the Agent
will deliver to such Revolving Credit Bank a Swing Line Bank
Participation Certificate in the form of Exhibit "K" dated the
date of receipt of such funds and in such amount.
(c) Each Revolving Credit Bank's obligation to make
Revolving Credit Advances and to purchase participation
interests in accordance with clauses (a) and (b) above 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
Revolving Credit Bank may have against Swing Line Bank, the
Company or any other Person for any reason whatsoever; (ii) the
occurrence or continuance of any 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
participating interest is to be purchased, or (vi) any other
circumstance, happening or event whatsoever, whether or not
similar to any of the foregoing. If any Revolving Credit Bank
does not make available to the Swing Line Bank the amount
required pursuant to clause (a) or (b) above, as the case may
be, the Agent shall be entitled to recover such amount on demand
from such Revolving Credit Bank, together with interest thereon
for each day from the date of non-payment until such amount is
paid in full at the Federal Funds Effective Rate.
2B.6 Quoted Rate Advance Interest Payments. Interest on each
Quoted Rate Advance 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.
2B.7 Prime-based Advance Interest Payments. Interest on each
Prime-based Advance shall accrue at the Prime-based Rate from
the date of such Advance until paid, and shall be payable in
immediately available funds quarterly commencing on December 31,
1995, and on the last day of each fiscal quarter 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.
2B.8 Prepayment. Company may prepay all or part of the
outstanding balance of any Prime-based Advance(s) under the
Swing Line Note (subject to not less than one (1) Business Day's
notice to Agent) at any time, provided that the amount of any
partial prepayment shall be at least One Hundred Thousand
Dollars ($100,000) and the aggregate balance of all Swing Line
Advances shall be at least Five Hundred Thousand Dollars
($500,000). Company may prepay Quoted Rate Advances only on the
last day of the Interest Period applicable thereto. Any
prepayment made in accordance with this Section shall be without
premium, penalty or prejudice to the right to reborrow under the
terms of this Agreement. Any other prepayment, whether by
acceleration, mandatory or required prepayment or otherwise,
shall be subject to Section 3.1 hereof, but otherwise without
premium, penalty or prejudice.
3. SPECIAL PROVISIONS, CHANGES IN CIRCUMSTANCES AND YIELD
PROTECTION.
3.1 Reimbursement of Expenses. As to any Eurodollar-based
Advance or any Quoted Rate Advance, if any prepayment thereof
shall occur on any day other than the last day of an Interest
Period (whether pursuant to this Article, or by acceleration, or
otherwise), or if an Applicable Interest Rate shall be changed
during any Interest Period pursuant to this Article, or if
Company fails to borrow any Eurodollar-based Advance or Quoted
Rate Advance after notice has been given by Company to Agent in
accordance with the terms hereof requesting such Advance,
Company shall reimburse Banks on demand for any actual (hard)
costs incurred by Banks as a result of the timing thereof
including but not limited to any costs incurred in liquidating
or employing deposits from third parties, provided that Banks
shall have delivered to Company a certificate setting forth the
basis for determining such costs, which certificate shall be
conclusively presumed correct save for manifest error.
3.2 Eurodollar Lending Office. For any Interest Period for
which the Applicable Interest Rate is the Eurodollar-based Rate,
if Agent shall designate a Eurodollar Lending Office which
maintains books separate from those of the rest of Agent, Agent
shall have the option of maintaining and carrying the relevant
Advance on the books of such Eurodollar Lending Office.
3.3 Change in Circumstances. If with respect to any
Interest Period Agent determines 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 for such Interest
Period, then Agent shall forthwith give notice thereof to
Company and Banks. Thereafter, until Agent notifies Company that
such circumstances no longer exist, the obligation of Banks to
make Eurodollar-based Advances, and the right of Company to
convert an Advance to or refund an Advance as a Eurodollar-based
Advance shall be suspended.
3.4 Regulatory Changes. If any Regulatory Change shall make
it unlawful or impossible for any Bank (or its Eurodollar
Lending Office) to honor its obligations hereunder to make or
maintain any Advance at the Eurodollar-based Rate, Agent shall
forthwith give notice thereof to Company. Thereafter (a) the
obligations of Banks to make Eurodollar-based Advances and the
right of Company to convert an Advance or refund an Advance as a
Eurodollar-based Advance shall be suspended and thereafter
Company may select as Applicable Interest Rates only those which
remain available, and (b) if Banks may not lawfully continue to
maintain an Advance to the end of the then current Interest
Period applicable thereto, the Prime-based Rate shall be the
Applicable Interest Rate for the remainder of such Interest
Period.
3.5 Increased Costs. If any Regulatory Change:
(a) shall subject any Bank (or its Eurodollar Lending
Office) to any tax, duty or other charge with respect
to any Advance or any Note or shall change the basis of
taxation of payments to any Bank (or its Eurodollar
Lending Office) of the principal of or interest on any
Advance or any Note 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 such Bank or
its Eurodollar Lending Office imposed by the
jurisdiction in which such Bank's principal executive
office or Eurodollar Lending Office is located); 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 Bank (or its Eurodollar Lending Office)
or shall impose on any Bank (or its Eurodollar Lending
Office) or the foreign exchange and interbank markets
any other condition affecting any Advance or any Note;
or
(c) shall impose, modify or deem applicable any tax,
reserve, special deposit, assessment, capital adequacy
or similar requirement against or with respect to or
measured by reference to Eurodollar-based Advances or
to letters of credit issued or to be issued by any
Bank;
and the result of any of the foregoing is to increase the costs
to such Bank of issuing or maintaining any Letter of Credit or
any part of the Indebtedness hereunder or to reduce the amount
of any sum received or receivable by such Bank under this
Agreement or under any Letter of Credit or any Note, by an
amount deemed by such Bank to be material, then such Bank shall
promptly notify Company of such fact and demand compensation
therefor and, within fifteen days after demand by such Bank,
Company agrees to pay to such Bank such additional amount or
amounts as will compensate such Bank for such increased cost or
reduction; provided, however, that such Bank shall not be
entitled to any such compensation attributable to any such event
to the extent that such compensation relates to a period of time
more than 90 days prior to the date upon which such Bank first
notified Company of such event. A certificate of such Bank
setting forth the basis for determining such additional amount
or amounts necessary to compensate such Bank shall be
conclusively presumed to be correct save for manifest error.
3.6 Capital Requirements. If any Regulatory Change affects
or would affect the amount of capital required to be maintained
by any Bank (or any corporation controlling such Bank) and such
Bank determines that the amount of such capital is increased by
or based upon the existence of a Letter of Credit or such Bank's
obligations or Advances hereunder and such increase has the
effect of reducing the rate of return on such Bank's (or such
controlling corporation's) capital as a consequence of any
Letter of Credit or such obligations or Advances hereunder to a
level below that which such Bank (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 to be material, then
Company shall pay to such Bank from time to time, upon request
by such Bank, additional amounts sufficient to compensate such
Bank (or such controlling corporation) for any increase in the
amount of capital and reduced rate of return which such Bank
reasonably determines to be allocable to the existence of any
Letter of Credit or such Bank's obligations or Advances
hereunder; provided, however, that such Bank shall not be
entitled to any such compensation attributable to any such event
to the extent that such compensation relates to a period of time
more than 90 days prior to the date upon which such Bank
notified Company of such event. A statement as to the amount of
such compensation, prepared in good faith and in reasonable
detail by any Bank, shall be submitted by such Bank to Company
and shall be conclusive, absent manifest error in computation.
4. CONDITIONS
The obligations of Banks to make Advances or loans or to
issue Letters of Credit pursuant to this Agreement are subject
to the following conditions:
4.1 Execution of Notes and this Agreement. Company shall
have executed and delivered to Agent for the account of Comerica
Bank the Swing Line Note and for the account of each Bank, the
Revolving Credit Notes and this Agreement (including all
schedules, exhibits, certificates, opinions, financial
statements and other documents to be delivered pursuant hereto),
and, as applicable, the Loan Documents, and such Notes, the Loan
Documents and this Agreement shall be in full force and effect.
4.2 Execution of Guaranty. Guarantors shall have executed
and delivered to Agent for the account of each Bank the
Guaranty.
4.3 Corporate Authority. Agent shall have received, with a
counterpart thereof for each Bank: (i) an incumbency certificate
and certified copies of resolutions of the Board of Directors of
Company evidencing approval of the form of this Agreement and
the Notes and authorizing the execution and delivery thereof and
the borrowing of Advances hereunder; and (ii) (A) certified
copies of Company's and each Guarantor's articles of
incorporation and bylaws or other constitutional documents
certified as true and complete as of a recent date by the
appropriate official of the jurisdiction of incorporation of
each such entity; and (B) a certificate of good standing from
the state or other jurisdictions of Company's and each
Guarantor's incorporation, and from every state or other
jurisdiction in which Company or any Guarantor is qualified to
do business
4.4 Representations and Warranties -- All Parties. The
representations and warranties made by Company or any other
party to any of the Loan Documents under this Agreement or any
of the Loan Documents (excluding the Banks), and the
representations and warranties of any of the foregoing which are
contained in any certificate, document or financial or other
statement furnished at any time hereunder or thereunder or in
connection herewith or therewith shall have been true and
correct in all material respects when made and shall be true and
correct in all material respects on and as of the date of the
making of any Advance hereunder.
4.5 Compliance with Certain Documents and Agreements. The
Company and the Guarantors shall have each performed and
complied with all agreements and conditions contained in this
Agreement, the Loan Documents, or any agreement or other
document executed thereunder and required to be performed or
complied with by it (as of the applicable date) and Company
shall not be in default in the performance or compliance with
any of the terms or provisions hereof or thereof.
4.6 Opinion of Counsel. Company shall furnish Agent prior
to the initial Advance under this Agreement, and with signed
copies for each Bank, opinions of counsel to the Company and the
Guarantors, dated the date hereof, and covering such matters as
required by and otherwise satisfactory in form and substance to
the Agent and each of the Banks.
4.7 No Default. No Event of Default or event which with the
lapse of time or giving of notice or both would constitute an
Event of Default shall have occurred and be continuing.
4.8 No Material Adverse Change. There shall have been no
material adverse change in the condition (financial or
otherwise), properties, business, prospects of, results or
operations of the Company and the Guarantors (taken as a whole)
from July 1, 1995 to the date of the making of the first
borrowing hereunder.
4.9 Termination of Prior Agreement. The Company and
Comerica Bank shall have terminated the Second Amended and
Restated Loan Agreement dated March 2, 1994, as amended, and all
amounts payable thereunder shall have been paid or shall be paid
with the proceeds of the first Advance.
4.10 Facility Fee. Company shall have paid to the Agent, for
distribution ratably to the Banks in accordance with their
Percentages, a facility fee in the amount of $21,000.
5. REPRESENTATIONS AND WARRANTIES
Company represents and warrants and such representations and
warranties shall be deemed to be continuing representations and
warranties during the entire life of this Agreement:
5.1 Organization, etc. Company and each Guarantor is a
corporation duly organized and existing and in good standing
under the laws of the state of its incorporation as identified
on Exhibit "D" attached hereto; Company and each Guarantor 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
necessary; the execution, delivery and performance of this
Agreement, and any other documents and instruments required
under this Agreement (including, without limitation, and the
issuance of the Notes by Company and the Guaranty by
Guarantors), are within the corporate powers of the Company or
Guarantor executing and/or delivering same, have been duly
authorized, are not in contravention of any law applicable to
Company or Guarantor or the terms of either of the articles of
incorporation or bylaws of Company or Guarantor, and do not
require (with respect to Company or Guarantor) the consent or
approval of any governmental body, agency or authority; and this
Agreement and any other documents and instruments required under
this Agreement, when issued and delivered under this Agreement,
will be valid and binding in accordance with their terms.
5.2 No Conflict. The execution, delivery and performance of
this Agreement and any other documents and instruments required
under this Agreement, and the issuance of the Notes by Company,
are not in contravention of the unwaived terms of any indenture,
agreement or undertaking to which Company or any Guarantor is a
party or by which Company or any Guarantor is bound, the
violation of which could materially impair Company's or any
Guarantor's financial condition or ability to carry on its
business.
5.3 Litigation. No litigation or other proceeding before
any court or administrative agency is pending, or to the
knowledge of the officers of Company is threatened against
Company or any Guarantor, the outcome of which could materially
impair Company's or any Guarantor's financial condition or
ability to carry on its business.
5.4 Title to Assets. Company and Guarantors have good and
marketable title to all of the properties and assets reflected
on the balance sheets referred to in Section 5.7 hereof and
there are no security interests in or liens, mortgages or other
encumbrances on any assets of any Company or Guarantor, except
to Bank and except for Permitted Liens.
5.5 Subsidiaries. There are no Subsidiaries of Company
other than those listed on Exhibit "D".
5.6 Pension Plans. Neither Company nor any Guarantor
maintains or contributes to any employee pension benefit plan
subject to Title IV of ERISA except the Pension Plans described
in Exhibit "E" attached hereto. There was no "unfunded past
service liability" of the Pension Plans as of June 30, 1995, and
there is no accumulated funding deficiency within the meaning of
ERISA, or any existing liability with respect to any of the
Pension Plans owed to the Pension Benefit Guaranty Corporation
or any successor thereto.
5.7 Financial Statements. The audited Consolidated
financial statements dated December 31, 1994, previously
furnished Banks, are complete and correct and fairly present the
financial condition of Company and its Consolidated Subsidiaries
and the results of their operations in accordance with GAAP;
since said date there have been no material adverse changes in
the financial condition of Company or any Guarantor; to the
knowledge of Company's officers, Company and Guarantors have no
contingent obligations (including any liability for taxes) not
disclosed by or reserved against in such financial statements,
and at the present time there are no material unrealized or
anticipated losses from any present commitment of Company and
Guarantors required by GAAP to be disclosed.
5.8 Tax Returns. All tax returns and tax reports of Company
and Guarantors, required by law to be filed, have been duly
filed or extensions obtained, and all taxes, assessments and
other governmental charges or levies (other than those presently
payable without penalty and those currently being contested in
good faith for which adequate reserves have been established)
upon Company and Guarantors (or any of their properties) which
are due and payable have been paid. The charges, accruals and
reserves on the books of Company and Guarantors in respect of
the Federal income tax for all periods are adequate in the
opinion of Company.
5.9 Compliance with Laws. Company and each Guarantor is, in
the conduct of its business, in compliance in all material
respects with all federal, state or local laws, statutes,
ordinances and regulations applicable to it, the enforcement of
which, if such Company or Guarantor were not in compliance,
would materially and adversely affect its business or the value
of its property or assets taken as a whole. Company and each
Guarantor has all approvals, authorizations, consents, licenses,
orders and other permits of all governmental agencies and
authorities, whether federal, state or local, required to permit
the operation of its business as presently conducted, except
such approvals, authorizations, consents, licenses, orders and
other permits with respect to which the failure to obtain can be
cured without having a material and adverse effect on the
operation of Company's or such Guarantor's business taken as a
whole.
5.10 Representations. No representation or warranty by
Company in this Agreement, nor any statement or certificate
(including financial statements) furnished or to be furnished to
Banks pursuant hereto contains or will contain any untrue
statement of any fact or omits or will omit to state a fact
necessary to make such representation, warranty, statement or
certificate not misleading.
5.11 Reserved.
5.12 Environmental Matters. Except for De Minimis Matters or
as described on Schedule 5.12, neither Company nor any Guarantor
is a party to any litigation or administrative proceeding, nor
so far as is known by Company is any litigation or
administrative proceeding threatened against Company or any
Guarantor, which in either case (A) asserts or alleges that
Company or any Guarantor violated Environmental Laws, (B)
asserts or alleges that any Company or Guarantor is required to
clean up, remove or take remedial or other response action due
to the disposal, depositing, discharge, leaking or other release
of any hazardous substances or materials, or (C) asserts or
alleges that Company or any Guarantor is required to pay all or
a portion of the cost of any past, present or future cleanup,
removal or remedial or other response action which arises out of
or is related to the disposal, depositing, discharge, leaking or
other release of any hazardous substances or materials.
5.13 Environmental Matters. Except for De Minimis Matters or
as described in Schedule 5.12, to the best knowledge of Company,
after due inquiry, there are no conditions existing currently or
likely to exist during the term of this Agreement which would
subject Company or any Guarantor to damages, penalties,
injunctive relief or cleanup costs under any applicable
Environmental Laws or which require or are likely to require
cleanup, removal, remedial action or other response pursuant to
applicable Environmental Laws by Company or any Guarantor.
5.14 Environmental Liabilities. Except as described in
Section 5.12, neither Company nor any Guarantor is subject to
any judgment, decree, order or citation related to or arising
out of applicable Environmental Laws and to the best knowledge
of Company, after due inquiry, neither Company nor any Guarantor
has been named or listed as a potentially responsible party by
any governmental body or agency in a matter arising under any
applicable Environmental Laws.
5.15 Environmental Permits. Company and Guarantors have all
permits, licenses and approvals required under applicable
Environmental Laws.
6. COMPANY'S AFFIRMATIVE COVENANTS
Company covenants and agrees that it will, so long as Banks
are committed to make any Advances under this Agreement and so
long as any Letter of Credit or other indebtedness remains
outstanding under this Agreement, unless the Majority Banks
shall otherwise consent in writing:
6.1 Deliveries. Furnish, to Agent, with copies for each
Bank:
(a) as soon as available and in any event within 90 days
after the end of each fiscal year of Company, the
Consolidated financial statements of Company and its
Consolidated Subsidiaries for such fiscal year
including balance sheet as of the end of such fiscal
year and the related statements of income and retained
earnings for such fiscal year, each prepared in
accordance with GAAP and audited by independent
certified public accountants reasonably acceptable to
Bank;
(b) Reserved
(c) as soon as available and in any event within 45 days
after the end of the first three fiscal quarters of
each year, and 90 days after the end of the last fiscal
quarter of each year, a Consolidated balance sheet and
related statements of income and retained earnings for
such quarter and year-to-date, each prepared in
accordance with GAAP and certified on behalf of Company
(subject to year-end audit adjustments) by an officer
of Company; together with a certificate signed on
behalf of Company by an officer of Company (i) to the
effect that there has been no Event of Default and no
event exists which, with the giving of notice, the
passage of time, or both, would constitute an Event of
Default, under this Agreement and that the
representations and warranties set forth in this
Agreement are true as of the date of such
certification, and (ii) stating in reasonable detail
the information and calculations necessary to establish
compliance with the provisions of Section 6.11 through
6.13 hereof as of the end of such fiscal quarter;
(d) as soon as possible and in any event within 150 days
after the end of each fiscal year of Company, a copy of
each management letter received from its accountants;
(e) within 7 Business Days of filing with the Commission,
copies of each Form 10-K, Form 10-Q and Form 8-K filed
with the Commission; and within 7 Business Days of
mailing to Company's shareholders, a copy of its annual
report and proxy statement; and
(f) from time to time, such further information regarding
the business affairs and financial condition of Company
and Guarantors as any Bank may reasonably request.
6.2 Taxes. Pay and discharge, and cause all Subsidiaries to
pay and discharge, all taxes and other governmental charges and
all contractual obligations calling for the payment of money,
before any interest or penalty for nonpayment thereof becomes
payable, unless and to the extent only that such payment is
being contested in good faith.
6.3 Insurance. Maintain, and cause all Subsidiaries to
maintain, insurance coverage on their 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, 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
would dictate. In the case of all policies covering property
mortgaged or pledged to Banks or property in which Banks shall
have a security interest of any kind whatsoever, other than
those policies protecting against casualty liabilities to
strangers, all such insurance policies shall name Bank as loss
payee whose interest shall not be invalidated by the acts or
neglect of the insured and provide that the loss payable
thereunder shall be payable to Company or Subsidiaries and Bank,
as their respective interests may appear. All said policies or
copies thereof, including all endorsements thereon and those
required hereunder, shall be deposited with Agent upon request
of Agent.
6.4 Inspection. Permit Agent and the Banks, through the
authorized attorneys, accountants and representatives, to
examine Company's and Subsidiaries' books, accounts, records,
ledgers and assets of every kind and description at all
reasonable times during normal business hours upon oral or
written request of Agent or any Bank.
6.5 Notification of Default. Promptly notify Agent and the
Banks of any condition or event which constitutes or with the
running of time and/or the giving of notice would constitute a
default or Event of Default under this Agreement, and promptly
inform Agent and the Banks of any material adverse change in the
financial condition of Company or any Subsidiary.
6.6 Legal Existence. Preserve and maintain the legal
existence of Company and each Subsidiary and such of their
rights, licenses and privileges as are material to their
business and operations, except for mergers permitted by Section
7.2; and qualify and remain qualified to do business in each
jurisdiction in which such qualification is material to its
business and operations or the ownership of their properties.
6.7 Compliance with Laws. Comply, and cause all
Subsidiaries to comply, in all material respects with all
applicable laws, rules, regulations and orders of any
governmental authority, noncompliance with which could
materially and adversely affect the financial condition or
operations of Company or any Subsidiary, except to the extent
that compliance with any of the foregoing is then being
contested in good faith and by appropriate legal proceedings and
with respect to which adequate financial reserves have been
established.
6.8 Reserved.
6.9 Compliance with ERISA. Comply, and cause all
Subsidiaries to comply, with all requirements (except for De
Minimis Matters) imposed by ERISA as presently in effect or
hereafter promulgated including, but not limited to, the minimum
funding requirements of the Pension Plans.
6.10 Notification of ERISA Matters. Promptly notify Agent
and the Banks upon the occurrence of any of the following
events:
(a) the termination of any of the Pension Plans pursuant to
Subtitle C of Title IV of ERISA or otherwise;
(b) the appointment of a trustee by a United States
District Court to administer any of the Pension Plans;
(c) the commencement by the Pension Benefit Guaranty
Corporation, or any successor thereto of any proceeding
to terminate any of the Pension Plans;
(d) the failure of any of the Pension Plans to satisfy the
minimum funding requirements for any plan year as
established in Section 412 of the Internal Revenue Code
of 1954, as amended, or any successor provision of the
Internal Revenue Code of 1986;
(e) the withdrawal of Company or any Subsidiary from any
Pension Plan; or
(f) a reportable event, within the meaning of Title IV of
ERISA.
6.11 Consolidated Funded Debt Ratio. Maintain, as of the
last day of each fiscal quarter, a Consolidated Funded Debt
Ratio of not more than 2.25 to 1.
6.12 Consolidated Fixed Charge Coverage Ratio. Maintain, as
of the last day of each fiscal quarter, a Consolidated Fixed
Charge Coverage Ratio of not less than 1.75 to 1.
6.13 Consolidated Tangible Net Worth. Maintain, as of the
last day of each fiscal quarter, Consolidated Tangible Net Worth
of not less than a deficit of ($5,000,000) plus 50% of Company's
cumulative Consolidated Net Income (not reduced by losses) for
the period (taken as one accounting period) beginning on July 2,
1995 and ending on the date of determination.
7. NEGATIVE COVENANTS
Company covenants and agrees that so long as Banks are
committed to make any Advances under this Agreement and
thereafter so long as any Letter of Credit or other Indebtedness
remains outstanding under this Agreement, neither Company nor
any Subsidiary will, without the prior written consent of the
Majority Banks:
7.1 Redemptions. Purchase, acquire or redeem any of its
Capital Stock or make any material change in its capital
structure or general business objects or purposes except that so
long as no Event of Default has occurred and is continuing,
either before or after giving effect thereto, Company may redeem
its stock for an amount not to exceed $10,000,000 in the
aggregate in any two year period.
7.2 Merger. Merge or consolidate with or into any other
Person, except that a Subsidiary may merge with Company or any
other Subsidiary, and except for mergers in which Company or any
Guarantor is the surviving entity in a Permitted Acquisition.
7.2A Sale of Assets. Lease, sell or otherwise dispose of any
of its property to any other Person except for (i) sales of
inventory in the ordinary course of its business and (ii)
leases, sales or other dispositions of its property that,
together with all other property of Company and its Subsidiaries
previously leased, sold or disposed of (other than inventory in
the ordinary course of its business) as permitted by this
Section during the twelve-month period ending with the month in
which any such lease, sale or other disposition occurs, do not
constitute a Substantial Portion of the property of Company and
its Subsidiaries.
7.3 Guarantee Obligations. Guarantee or otherwise in any
way become or be responsible for the obligations of any other
Person (whether by agreement or otherwise) to purchase the
indebtedness of any other person through the purchase of goods,
supplies or services, or by way of stock purchase, capital
contribution, advance or loan for the purpose of paying or
discharging the indebtedness of any other Person, or agree to
maintain the net worth or working capital of any other Person,
or otherwise assure any creditor of such Person against loss,
except for (i) loans to dealers consistent with prior practice
in aggregate amounts not to exceed $1,500,000 at any time
outstanding, (ii) the endorsement of negotiable instruments by
Company and Guarantors in the ordinary course of business for
collection, (iii) guarantees in favor of Banks, (iv) the current
Account Purchase Agreement with General Electric Capital
Corporation, which Agreement has been assigned to and assumed by
Transamerica Commercial Finance Corporation, and (v) all floor
plan financing and/or repurchase arrangements described in
Exhibit "F" attached hereto.
7.4 Debt. Incur, create, assume or permit to exist any
indebtedness or liability for borrowed money, or any other
indebtedness or liability evidenced by notes, capital leases,
bonds, debentures or similar obligations, or enter into any
application for or reimbursement agreement relating to any
letter of credit, except:
(a) Indebtedness to the Banks;
(b) current unsecured trade, utility or non-extraordinary
accounts payable arising in the ordinary course of the
business of Company or Subsidiaries;
(c) the indebtedness described in Exhibit "G" attached; and
(d) other indebtedness or liabilities not to exceed
$3,000,000 in the aggregate at any time outstanding.
7.5 Acquisitions. Purchase or otherwise acquire all or
substantially all of the assets or business interests of any
Person, firm or corporation or any shares of stock of any
corporation, trusteeship or association or in any other manner
effectuate or attempt to effectuate an expansion of present
business by acquisition, except for Permitted Acquisitions.
7.6 Dividends. Declare or pay any dividends on, or make any
other distribution (whether by reduction of capital or
otherwise) with respect to any shares of any of its Capital
Stock (other than cash dividends paid by Subsidiaries to Company
or to any other Subsidiary), except that so long as no Event of
Default has occurred and is then continuing, either before or
after taking into account the following described dividends,
Company may declare and pay dividends in an amount not to exceed
10% of Company's Consolidated Net Income for the year in which
such dividend is declared and paid.
7.7 Liens. Create, incur, assume or suffer to exist any
Lien upon any of its property or assets whether now owned or
hereafter acquired except to Banks and except for (i) Liens
encumbering assets having a value of not greater than 10% of
Consolidated Net Tangible Assets, and (ii) the Permitted Liens.
7.8 Loans. Make any loans, advances of credit or extension
of credit to any person, except sales on open account or in the
ordinary course of business and, so long as no Event of Default
has occurred and is continuing, advances to officers and other
employees of Company or any Guarantor not to exceed $500,000 per
person in the aggregate and $1,500,000 for all officers and
employees in the aggregate at any time outstanding, for the sole
purpose of (i) payment of income taxes associated with the
exercise of options to purchase stock of Company, and (ii)
providing inducement to become or remain an employee of Company
or any Guarantor.
7.9 Pension Plans. Enter into, maintain or make
contribution to, directly or indirectly, any employee pension
plan that is subject to Title IV or ERISA, except any Pension
Plan heretofore described.
7.10 Subsidiaries. Create or acquire any Subsidiary except
for (i) the acquisition of a Subsidiary permitted by Section
7.5, and (ii) the creation of a Subsidiary in the ordinary
course of business and upon prior written notice to Agent. Any
Bank may at its option require Company to cause any such
Subsidiary to become a Guarantor.
8. ENVIRONMENTAL PROVISIONS
8.1 General. Company shall timely comply, and cause
Guarantors to timely comply, with all applicable Environmental
Laws.
8.2 Copies of Pleadings. Company shall provide to Agent,
immediately upon receipt, copies of any correspondence, notice,
pleading, citation, indictment, complaint, order, decree or
other document from any source asserting or alleging a
circumstance or condition which requires or may require a
financial contribution by Company or any Guarantor or a cleanup,
removal, remedial action or other response by or on the part of
Company or any Guarantor under applicable Environmental Laws or
which seeks damages or civil, criminal or punitive penalties
from Company or any Guarantor for an alleged violation of
Environmental Laws.
8.3 Notification. Company shall promptly notify Bank in
writing as soon as Company becomes aware of any condition or
circumstance (except for De Minimis Matters) which makes the
environmental warranties or representations in this Agreement
incomplete or inaccurate as of any date.
8.4 Retention of Expert. In the event of any condition or
circumstance that makes any environmental warranty,
representation and/or agreement incomplete or inaccurate as of
any date (except for De Minimis Matters), Company shall, at its
sole expense, retain an environmental professional consultant,
reasonably acceptable to Banks, to conduct a thorough and
complete environmental audit regarding the changed condition
and/or circumstance and any environmental concerns arising from
that changed condition and/or circumstance. A copy of the
environmental consultant's report will be promptly delivered to
Agent upon completion.
8.5 Environmental Audit. At any time Company, directly or
indirectly through any professional consultant or other
representative, determines to undertake an environmental audit,
assessment or investigation (except for De Minimis Matters),
Company shall promptly provide Agent with written notice of the
initiation of the environmental audit, fully describing the
purpose and intended scope. Upon receipt, Company will promptly
provide to Agent copies of all final findings and conclusions of
any such environmental investigation. Preliminary findings and
conclusions shall be provided if final reports have not been
completed and delivered to Agent with 60 days following
completion of the preliminary findings and conclusions.
8.6 Indemnification. Company hereby indemnifies and holds
the Agent and each Bank and any of its or their past, present
and future officers, directors, shareholders and employees
harmless from any and all loss, damages, suits, penalties,
costs, liabilities and expenses (including but not limited to
reasonable investigation, environmental audit and legal
expenses) arising out of any claim, loss or damage of any
property, injuries to or death of persons, contamination of or
adverse affects on the environment, or any violation of any
applicable Environmental Laws, due to any acts of Company or any
Guarantor, their officers, directors, shareholders, employees,
consultants and/or representatives. In no event shall Company
be liable hereunder for any loss, damages, suits, penalties,
costs, liabilities or expenses arising from any act of
negligence of Agent or any Bank or their agents or employees.
It is expressly understood and agreed that (A) the
indemnifications granted herein are intended to protect Agent
and the Banks and their past, present and future officers,
directors, shareholders, employees, consultants and
representatives from any claims that may arise by reason of the
security interest, liens and/or mortgages granted to Agent or
any Bank, or under any other document or agreement given to
secure repayment of any indebtedness from Company, whether or
not such claims arise before or after Banks have foreclosed upon
and/or otherwise become the owner of any such property; and (B)
the provisions hereof shall be continuing and shall survive the
repayment of any indebtedness from Company to Banks.
8.7 Permits. Company shall maintain, and cause Guarantors
to maintain, all permits, licenses and approvals required under
applicable Environmental Laws.
9. DEFAULTS
9.1 Defaults. Any of the following events is an "Event of
Default":
(a) Non-payment of Fees or of the principal or interest due
under the terms of this Agreement or on the Notes or
other instrument or evidence of indebtedness
outstanding under this Agreement when due in accordance
with the terms thereof and (except in the case of non-
payment of principal) continuance for 10 calendar days;
(b) default in the observance or performance of any of the
conditions, covenants or agreements of Company set
forth in Section 6.1, 6.3, 6.4, 6.5, 6.11 through 6.13
or 7 hereof;
(c) default in the observance or performance of any of the
other conditions, covenants or agreements of Company
herein set forth and continuance thereof for thirty
(30) days after notice to Company by Agent;
(d) any representation or warranty made by Company or any
Guarantor herein or in any Loan Document or other
instrument submitted pursuant hereto proves to have
been untrue in any material respect when made;
(e) default in the observance or performance of any of the
conditions, covenants or agreements of Company or any
of the Guarantors set forth in any of the other Loan
Documents, and continuance thereof beyond any period of
grace or cure specified in any such document;
(f) default in the payment of any other obligation of
Company or any Guarantor for borrowed money in excess
of $5,000,000 or in the observance or performance of
any conditions, covenants or agreements related or
given with respect thereto beyond any applicable grace
period, the result of which would have a material and
adverse impact on the financial condition of the
Company and Guarantors, taken as a whole, or their
ability to carry on their business (taken as a whole);
(g) judgments for the payment of money in excess of the sum
of $500,000 over applicable insurance coverage (not
including deductibles) in the aggregate shall be
rendered against Company or any Guarantor, and such
judgments shall remain unpaid, unvacated, unbonded or
unstayed by appeal or otherwise for a period of 30
consecutive days from the date of its entry;
(h) the revocation of the Guaranty by any Guarantor;
(i) any Person or group of Persons acting on concert shall
acquire or control, directly or indirectly, whether by
ownership, voting trust or otherwise, more than 50% of
the issued and outstanding voting securities of
Company;
(j) the occurrence of any "reportable event", as defined in
the Employee Retirement Income Security Act of 1974 and
any amendments thereto, which is determined to
constitute grounds for termination by the Pension
Benefit Guaranty Corporation of any employee pension
benefit plan maintained by or on behalf of Company or
any Guarantor for the benefit of any of its employees
or is determined to constitute grounds for the
appointment by the appropriate United States District
Court of a trustee to administer such plan, and such
reportable event is not corrected and such
determination is not revoked within 30 days after
notice thereof has been given to the plan
administrator; or the institution of proceedings by the
Pension Benefit Guaranty Corporation to terminate any
such employee benefit pension plan or to appoint a
trustee to administer such plan; or the appointment of
a trustee by the appropriate United States District
Court to administer any such employee benefit pension
plan; or
(k) If a creditors' committee shall have been appointed for
the business of Company or any Guarantor; or if Company
or any Guarantor shall have made a general assignment
for the benefit of creditors or shall have been
adjudicated bankrupt, or shall have filed a voluntary
petition in bankruptcy or for reorganization or to
effect a plan or arrangement with creditors; 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 and such
receiver, trustee or custodian so appointed shall not
have been discharged within 45 days after the date of
appointment; or if an order shall be entered, and shall
not be dismissed or stayed within 45 days, approving
any petition for reorganization of Company or any
Guarantor.
9.2 Exercise of Remedies. If an Event of Default has
occurred and is continuing hereunder: (v) the Agent may, and
upon being directed to do so by the Majority Banks, shall,
declare the commitment of the Banks to make Advances and to
issue Letters of Credit terminated; (w) the Agent may, and upon
being directed to do so by the Majority Banks, shall, 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; (x)
upon the occurrence of any Event of Default specified in
subsection 9.1(k), above, and notwithstanding the lack of any
declaration by Agent under preceding clause (w), the entire
unpaid principal Indebtedness, including the Notes, shall become
automatically and immediately due and payable, and the
commitment of the Banks to make Advances and to issue Letters of
Credit shall be automatically and immediately terminated; (y)
the Agent may, and upon being directed to do so by the Majority
Banks, shall, demand immediate delivery of Letter of Credit Cash
Collateral, and (z) the Agent 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
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 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, 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.
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 12.11 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 not be waived or modified by the
Banks or Agent by course of performance, estoppel or otherwise.
9.6 Interest on Default. Notwithstanding anything to the
contrary set forth in this Agreement, in the event and so long
as any Event of Default shall exist under this Agreement, upon
notice to Company by Agent (except in the case of an Event of
Default under Section 9.1(k), as to which no notice shall be
required), interest shall accrue on the principal amount of all
Advances from time to time outstanding at a per annum rate equal
to the Applicable Interest Rate (calculated on the basis of the
maximum Applicable Margin amount) in respect of each such
Advance plus three percent (3%) per annum for the remainder of
the then existing Interest Period, if any, and at all other such
times, at a per annum rate equal to the Prime-based Rate plus
three percent (3%)
10. PAYMENTS, RECOVERIES AND COLLECTIONS.
10.1 Payment Procedure.
(a) All payments by Company of principal of, or
interest on, the Notes, or of Fees, shall be made without
setoff or counterclaim on the date specified for payment
under this Agreement not later than 11:00 a.m. (Detroit
time) in immediately available funds to Agent, for the
ratable account of the Banks, at Agent's office located at
000 Xxxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx 00000, (care of
Agent's Eurodollar Lending Office, for Eurodollar-based
Advance). Upon receipt by the Agent of each such payment,
the Agent shall make prompt payment in like funds received
to each Bank, or, in respect of Eurodollar-based Advances,
to such Bank's Eurodollar Lending Office.
(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 Eurodollar-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) of carrying such
amount.
(c) Subject to the definition of Eurodollar-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.
10.2 Pro-rata Recovery. If any Revolving Credit Bank shall
obtain any payment or other recovery (whether voluntary,
involuntary, by application of offset or otherwise) on account
of principal of, or interest on, any of the Revolving Credit
Notes in excess of its pro rata share of payments then or
thereafter obtained by all Revolving Credit Banks upon principal
of and interest on all Revolving Credit Notes, such Bank shall
purchase from the other Revolving Credit Banks such
participations in the Revolving Credit Notes held by them as
shall be necessary to cause such purchasing Revolving Credit
Bank to share the excess payment or other recovery ratably in
accordance with the Percentage with each of them; 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.
10.3 Application of Proceeds. Notwithstanding anything to
the contrary in this Agreement, after an Event of Default, the
proceeds of any offsets or voluntary payments by Company or any
Guarantor or others and any other sums received or collected in
respect of the Indebtedness, shall be applied, first, to the
Notes 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. The application of such
proceeds and other sums to the Revolving Credit Notes shall be
based on each Bank's Percentage of the aggregate of the loans.
11. Agent
11.1 Appointment of Agent. Each Bank and the holder of each
Note irrevocably appoints and authorizes the Agent to act on
behalf of such Bank or holder under this Agreement and the 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. Without limiting in any
way the obligations of the Company under this Agreement, 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 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. 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. 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.
11.2 Deposit Account with Agent. Company hereby authorizes
Agent, in Agent's sole discretion, 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 becomes due and payable under the terms
of this Agreement or the Notes.
11.3 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). Neither Agent nor any of its directors, officers,
employees or agents shall be liable to any Bank for any action
taken or omitted to be taken by it 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 in the absence of their own gross negligence or wilful
misconduct, nor be responsible for or have any duties to
ascertain, inquire into or verify (a) any recitals or warranties
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 its 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, except the
receipt of closing documents. Agent 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 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, accounts or
experts.
11.4 Successor Agent. Agent may resign as such at any time
upon at least 30 days prior notice to Company and all Banks.
Agent may be removed at any time by the Majority Banks upon the
gross negligence or willful misconduct of Agent, or upon the
failure by Agent to comply with the terms and conditions of this
Agreement. 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 with the consent of
Company, which shall not be unreasonably withheld) which 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 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 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 provisions of this Section 11 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.
11.5 Loans by Agent. Comerica Bank and its successors and
assigns, in its capacity as a Bank hereunder, shall have the
same rights and powers hereunder as any other Bank and may
exercise or refrain from exercising the same as though it were
not the Agent. Comerica Bank and its affiliates 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 the
shareholders of such party) as if it were not acting as Agent
hereunder, and may accept fees and other consideration therefor
without having to account for the same to the Banks.
11.6 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.
11.7 Agent's Fees. Commencing on the date hereof, and on
each succeeding anniversary date thereof until all indebtedness
outstanding under this Agreement has been repaid and no
commitment to fund any loan hereunder is outstanding, Company
shall pay to Agent an annual agency fee and such other fees and
charges as set forth (or to be set forth from time to time) in a
letter agreement among Company and Agent. The Agent's Fees
described in this Section 11.7 shall not be refundable under any
circumstances.
11.8 Authority of Agent to Enforce Notes and 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 the Notes 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 its creditors or affecting its
properties, and to take such other actions which Agent consider
to be necessary or desirable for the protection, collection and
enforcement of the Notes, this Agreement or the Loan Documents.
11.9 Indemnification. The Banks agree to indemnify the Agent
(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,
fees and disbursements of counsel) which may be imposed on,
incurred by, or asserted against the Agent in any way relating
to or arising out of this Agreement, any of the Loan Documents
or the transactions contemplated hereby or any action taken or
omitted by the Agent 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 gross negligence or
willful misconduct. Without limitation of the foregoing, each
Bank agrees to reimburse the Agent promptly upon demand for its
ratable share of any out-of-pocket expenses (including, without
limitation, fees and expenses of counsel) incurred by the Agent
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 Loan Documents, to the extent that
the Agent are 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 promptly
upon demand for its ratable share of any amounts owing to the
Agent by the Banks pursuant to this Section. If the indemnity
furnished to the Agent 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 if
furnished.
11.10 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.
11.11 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.
11.12 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. In the event Agent
fails, within a commercially reasonable time, to take such
action, assert such rights, or pursue such remedies as the
Majority Banks or all of the Banks, as the case may be (as
provided for hereunder), shall direct in conformity with this
Agreement, the Majority Banks or all of the Banks, as the case
may be, shall have the right to take such action, to assert such
rights, or pursue such remedies on behalf of all of the Banks
unless the terms hereof otherwise require the consent of all the
Banks to the taking of such actions (in which event all of the
Banks must join in such action).
12. MISCELLANEOUS
12.1 Accounting Principles. 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.
12.2 Consent to Jurisdiction. Company and Banks hereby
irrevocably submit to the non-exclusive jurisdiction of any
United States Federal or Michigan state court sitting in Detroit
in any action or proceeding arising out of or relating to this
Agreement or any of the Loan Documents and Company 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 or Michigan state court.
12.3 Law of Michigan. This Agreement and the Notes have been
delivered at Detroit, Michigan, and shall be governed by and
construed and enforced in accordance with the laws of the State
of Michigan. 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.
12.4 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
Percentage 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.
12.5 Closing Costs and Other Costs. Company agrees to pay,
or reimburse the Agent for payment of, on demand (a) all
reasonable closing costs and expenses, including, by way of
description and not limitation, house and outside attorney fees
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 any amendment, refinancing or restructuring of
the credit arrangements provided under this Agreement; (b) all
stamp and other taxes and fees payable or determined to be
payable in connection with the execution, delivery, filing or
recording 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 (c) all
reasonable costs and expenses of the Agent or any of the Banks
(including reasonable fees and expenses of counsel and whether
incurred through negotiations, legal proceedings or otherwise)
in connection with any Event of Default or the enforcement of
this Agreement, or the Loan Documents or in connection with any
refinancing or restructuring of the credit arrangements provided
under this Agreement and (d) all reasonable costs and expenses
of the Agent or any of the Banks (including reasonable fees and
expenses of counsel) in connection with any action or proceeding
relating to a court order, injunction or other process or decree
restraining or seeking to restrain the Agent or any of the Banks
from paying any amount under, or otherwise relating in any way
to, any Letter of Credit and any and all costs and expenses
which any of them may incur relative to any payment under any
Letter of Credit. All of said amounts required to be paid by
Company, may, at Agent's option, be charged by Agent as a Prime-
based Advance against the Indebtedness.
12.6 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 the
signature pages hereof 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 12.6. 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; any notice,
if given to a reputable overnight courier and properly
addressed, shall be deemed given 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 (answerback
confirmed in the case of telexes and receipt confirmed in the
case of telecopies). Agent may, but 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.
12.7 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.
12.8 Successors and Assigns; Participations.
(a) This Agreement shall be binding upon and shall
inure to the benefit of Company, the Agent 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 no such
assignment shall be made (or effective) without the prior
written approval of the Banks.
(c) Each of the Banks may at any time and from time to
time, subject to the terms and conditions hereof, grant
participations (but not assignments, except as expressly
permitted hereunder) in such Bank's rights and obligations
hereunder and under the other Loan Documents to any commercial
bank, savings and loan association, or other similar financial
institution, which institution is approved in advance in writing
by Agent and Company, such approval not to be unreasonably
withheld or delayed; provided, however, that the approval of
Agent shall not be required for the grant of a participation by
a Bank to its Affiliate, to any other Bank or to any Federal
Reserve Bank. The Company authorizes each Bank to disclose to
any prospective participant, once approved by Company and Agent
(if such approval is required), any and all financial
information in such Bank's possession concerning the Company
which has been delivered to such Bank pursuant to this
Agreement. A Bank shall not be permitted to assign or otherwise
transfer (except by participation according to the terms hereof)
its rights and obligations hereunder, except (x) to any Bank or
(y) with the prior written consent of the Company (except that
no such consent shall be required upon the occurrence and during
the continuance of an Event of Default) and the Agent, to any
other financial institution; provided that if any such
assignment is of less than all of a Bank's rights and obligation
hereunder, it shall be in an amount not less than $5,000,000;
(d) Each assignment by a Bank of any portion of its
rights and obligations hereunder and under the other Loan
Documents shall be made pursuant to an Assignment Agreement
substantially (as determined by Agent) in the form attached
hereto as Exhibit "L" (with appropriate insertions acceptable to
Agent) and shall be subject to the terms and conditions hereof,
and to the following restrictions:
(i) each assignment shall cover all of the Notes
issued by Company hereunder, and shall be for
a fixed and not varying percentage thereof,
with the same percentage applicable to each
such Note;
(ii) each assignment shall be of all of a Bank's
rights and obligations hereunder or in a
minimum amount of Five Million Dollars
($5,000,000); and
(iii) no assignment shall be effective unless Agent
has received from the assignee (or from the
assigning Bank) an assignment fee of $3,000
for each such assignment.
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. 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 (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.
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,
Company shall, to the extent applicable, 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, a new Note payable to the order of the assigning
Bank in an amount equal to the amount retained by such Bank
hereunder shall be executed and delivered by the Company.
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 shall contain a
provision confirming such agreement.
(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, notwithstanding any such
participation;
(ii) except as expressly set forth in this Section
12.8(e) with respect to rights of setoff and
the benefits of Article 3 hereof, a
participant shall have no direct rights or
remedies hereunder;
(iii) a participant shall not reassign or transfer,
or grant any sub-participations in its
participation interest hereunder or any part
thereof to any Bank other than the Bank which
transferred such interest to such
participant; and
(iv) such Bank shall retain the sole right and
responsibility to enforce the obligations of
the Company relating to the Notes and 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, except for
those matters covered by Section 12.11(a)
through (g) 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), and
shall otherwise be in form satisfactory to
Agent.
Company agrees that each participant shall be deemed to have all
rights of setoff under this Agreement in respect of its
participation interest in amounts owing under this Agreement and
the Loan Documents to the same extent as if the Indebtedness
were owing directly to it as a Bank under this Agreement, shall
be subject to the pro rata recovery provisions of Section 10.2
hereof, and that each participant shall be entitled to the
benefits of Article 3 hereof. No such participation shall
relieve any Bank of any of its obligations under this Agreement
or any of the other Loan Documents, and all actions hereunder
shall be conducted as if no such participation had been granted.
12.9 Reserved.
12.10 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.
12.11 Amendment and Waiver. No amendment or waiver of any
provision of this Agreement or any Loan Document, nor consent to
any departure by Company therefrom, shall in any event be
effective unless the same shall be in writing and signed by the
Majority Banks (and, with respect to any amendments to this
Agreement or the other Loan Documents, by Company, if a
signatory 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, that no amendment,
waiver or consent shall, unless in writing and signed by all the
Banks, do any of the following: (a) subject the Banks to any
additional obligations, (b) reduce the principal of, or interest
on, the Revolving Credit Notes or any Fees or other amounts
payable hereunder, (c) postpone any date fixed for any payment
of principal of, or interest on, the Revolving Credit Notes or
any fees or other amounts payable hereunder, (d) waive any Event
of Default specified in Section 9.1(a), (e) take any action
which requires the signing of all Banks pursuant to the terms of
this Agreement or any Loan Document, (f) change the aggregate
unpaid principal amount of the Notes which shall be required for
the Banks or any of them to take any action under this Agreement
or any Loan Document, or (g) change the definition of "Majority
Banks" or this Section 12.11; provided further, that no
amendment, wavier 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; and provided further, however,
that 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 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.
12.12 Taxes and Fees. Should any documentary, stamp or
similar tax (other than a tax based upon the net income of any
Bank or Agent imposed by the jurisdiction in which such Bank or
Agent have their respective principal executive offices), or
recording or filing fee become payable in respect of this
Agreement or any of the Loan Documents (or the execution, filing
or recording thereof) or any amendment, modification or
supplement hereof or thereof, Company agrees to pay the same
together with any interest or penalties thereon and agrees to
hold the Agent and the Banks harmless with respect thereto.
12.13 Confidentiality. Each Bank agrees that it will not
disclose without the prior consent of Company, as applicable,
(other than to its employees, to another Bank or to its auditors
or counsel) any information with respect to Company which is
furnished pursuant to this Agreement or any of the Loan
Documents and specifically designated in writing by Company
confidential information; 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 prospective permitted transferee or
assignee or to any approved participant of, or with respect to,
the Notes, as aforesaid, who shall agree in writing to be bound
by the terms of this Section 12.13.
12.14 Withholding Taxes. If any Bank is not incorporated
under the laws of the United States or a state thereof, such
Bank shall promptly deliver to the Agent two executed copies of
(i) Internal Revenue Service Form 1001 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 4224 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. 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.
12.15 Reserved.
12.16 Effective Upon Execution. This Agreement shall
become effective upon the execution hereof by Banks, Agent and
Company and the issuance by Company of the Notes hereunder, and
shall remain effective until the Indebtedness has been repaid
and discharged in full and no commitment to extend any credit
hereunder or under any of the other Loan Documents, whether
optional or obligatory, remains outstanding.
12.17 Waiver of Jury Trial. The Banks, the Agent and
Company after consulting or having had the opportunity to
consult with counsel, knowingly, voluntarily and intentionally
waive any right any of them may have to a trial by jury in any
litigation based upon or arising out of 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.
12.18 Complete Agreement; Conflicts. This Agreement, the
Notes, any Requests for 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.
12.19 Severability. In case any one or more of the
obligations of Company or any Guarantor 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.
12.20 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.
12.21 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.
12.22 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 an Event of Default or any event or condition which with
notice or lapse of time, or both, could become such an Event of
Default if such action is taken or such condition exists.
12.23 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 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 Sections 3.1, 3.5, 3.6 and
12.5 hereof (together with any other indemnities of Company
contained elsewhere in this Agreement or in any of the Loan
Documents) and of Banks set forth in Section 12.13 hereof shall
survive the repayment in full of the Indebtedness and the
termination of the commitment of the Banks.
WITNESS the due execution hereof as of the day and year
first above written.
COMERICA BANK, CHAMPION ENTERPRISES, INC.
as Agent
By: By:
Its: Its:
X.X. Xxx 00000 0000 Xxxxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000-0000 Suite 320
Attn: Xxxxxx X. Xxxxxxxxxxx Xxxxxx Xxxxx, Xxxxxxxx 00000
Attention: President
REVOLVING CREDIT BANKS: COMERICA BANK
By:
Its:
Eurodollar Lending Office: X.X. Xxx 00000
Xxxxxxxx Xxxx Xxxxxxx, Xxxxxxxx 00000-0000
One Detroit Center Attn: Xxxxxx X. Xxxxxxxxxxx
000 Xxxxxxxx Xxxxxx Telex No. 235808
9th Floor, MC 3289 Facsimile No. (000) 000-0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx Xxxxxx
Facsimile No. (000) 000-0000
THE FIRST NATIONAL BANK OF
CHICAGO
Eurodollar Lending Office:
By:
Xxx Xxxxx Xxxxxxxx Xxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000 Its:
Attn: Xxxxx X. Xxxxxxxx
Telex No. 4330253
Facsimile No. (000) 000-0000
One First Xxxxxxxx Xxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxx X. Xxxxxxxx
Telex No. 4330253
Facsimile No. (000) 000-0000
SWING LINE BANK: COMERICA BANK
By:
Its:
X.X. Xxx 00000
Xxxxxxx, Xxxxxxxx 00000-0000
Attn: Xxxxxx X. Xxxxxxxxxxx
Telex No. 235808
Facsimile No. (000) 000-0000
EXHIBIT "A"
REQUEST FOR REVOLVING CREDIT ADVANCE
No. Dated: , 199
TO: Comerica Bank ("Agent")
RE: Credit Agreement dated as of September 29, 1995 by and
among Company, the Bank signatories thereto and Comerica
Bank, as Agent ("Credit Agreement")
The Company pursuant to the Credit Agreement requests a
Revolving Credit Advance from Banks as follows:
A. Date of Advance: , 199
B. / / (check if applicable)
This Advance is or includes a whole or partial
refund/conversion of:
Advance No(s).
C. Type of Advance (check only one);
/ / Prime-based Advance
/ / Eurodollar-based Advance
D. Amount of Advance:
E. Interest Period (not applicable to Prime-based Advances)
months (insert 1, 2, 3 or 6)
F. Disbursement Instructions
/ / Comerica Bank Account No.
/ / Other:
The Company certifies to the matters specified in Section
2.7(e) of the Credit Agreement.
Capitalized terms used herein, except as defined to the
contrary, have the meanings given them in the Credit Agreement.
CHAMPION ENTERPRISES, INC.
By:
Its:
Agent Approval:
EXHIBIT "B"
REVOLVING CREDIT NOTE
$ September 29, 1995
On or before the Revolving Credit Maturity Date, FOR VALUE
RECEIVED, Champion Enterprises, Inc., a Michigan corporation
("Company"), promises to pay to the order of [insert Bank]
("Bank") at Detroit, Michigan, care of Agent, for the account of
Bank, in lawful money of the United States of America, the
indebtedness or so much of the sum of [Insert Amount derived
from Percentages] Dollars ($ ), as may from time to time
have been advanced to Borrower and then be outstanding hereunder
pursuant to Section 2 of the Champion Enterprises, Inc. Credit
Agreement dated as of September 29, 1995, made by and among the
Company, certain banks, including the Bank, and Comerica Bank as
Agent for such banks, as the same may be amended from time to
time (the "Agreement"), together with interest thereon as
hereinafter set forth.
Each of the Advances made hereunder shall bear interest at
the Applicable Interest Rate from time to time applicable
thereto under the Agreement or as otherwise determined
thereunder, and interest shall be computed, assessed and payable
as set forth in the Agreement.
This Note is a note under which advances (including
refundings and conversions), repayments and readvances may be
made from time to time, but only in accordance with the terms
and conditions of the Agreement. This Note evidences borrowings
under, is subject to, is secured in accordance with, and may be
accelerated or matured under, the terms of the Agreement, to
which reference is hereby made. Definitions and terms of the
Agreement are hereby incorporated by reference herein.
This Note shall be interpreted and the rights of the
parties hereunder shall be determined under the laws of, and
enforceable in, the State of Michigan.
Company hereby waives presentment for payment, demand,
protest and notice of dishonor and nonpayment of this Note and
agrees that no obligation hereunder shall be discharged by
reason of any extension, indulgence, release, or forbearance
granted by any holder of this Note to any party now or hereafter
liable hereon or any present or subsequent owner of any
property, real or personal, which is now or hereafter security
for this Note.
Nothing herein shall limit any right granted Bank by any
other instrument or by law.
CHAMPION ENTERPRISES, INC.
By:
Its:
EXHIBIT "C"
PERMITTED ENCUMBRANCES
EXHIBIT "D"
STATES OF INCORPORATION AND
QUALIFICATION/LIST OF SUBSIDIARIES
NAME OF SUBSIDIARY STATE OF QUALIFIED TO
INCORPORATION DO BUSINESS
Champion Home Builders Co. Michigan Alabama
California
Colorado
Florida
Idaho
Indiana
Nebraska
New Mexico
New York
North Carolina
Pennsylvania
Tennessee
Texas
Champion Financial
Corporation Michigan -----
Builders Credit
Corporation Michigan -----
CAC Funding
Corporation Michigan -----
Service Contract
Corporation Michigan -----
Champion Home Communities,
Inc. Michigan North Carolina
Champion Motor Coach, Inc. Michigan Indiana
Moduline International,
Inc. Washington -----
Moduline Industries
(Oregon), Inc. Oregon -----
Moduline Industries
(Canada), Ltd. British Columbia -----
Lamplighter Homes,
Inc. Washington -----
Lamplighter Homes
(Oregon), Inc. Oregon -----
Dutch Housing, Inc. Michigan Indiana
Crest Ridge Homes, Inc. Michigan Texas
Chandeleur Homes, Inc. Michigan Alabama
EXHIBIT "E"
PENSION PLANS
NONE
EXHIBIT "F"
FLOOR PLAN FINANCING AND REPURCHASE ARRANGEMENTS
I. Repurchase Agreements
It is customary practice for companies in the manufactured
housing and commercial bus industries to enter into repurchase
agreements with lending institutions who have provided wholesale
inventory floor plan financing to dealers. A majority of
wholesale sales for Champion Enterprises, Inc. and its
subsidiaries ("Champion") are made pursuant to these agreements.
Such repurchase agreements generally provide for the
repurchase of new inventory from the lender in the event of a
dealer's default with the lender. Our liability is generally
limited to 12-15 months from original date of sale to a dealer
and is reduced for curtailments by various amounts as the
reduction programs vary from lender to lender.
While Champion is contingently liable for substantial
amounts under these agreements, any expenses or losses are
minimal due to the resale value of the products which we are
required to repurchase.
A sample copy of Champion's standard form of repurchase
agreements for manufactured housing and recreational vehicles is
attached as this exhibit.
II. Recourse Liabilities
In addition to the above, Champion and its subsidiary,
Builders Credit Corp. ("BCC") and General Electric Capital Corp.
("GECC") entered into an Agreement for Purchase of Accounts,
dated February 22, 1989 (the "Purchase Agreement"), whereby GECC
provides and administers floor plan financing for Champion
dealers on Champion products exclusively. Transamerica
Commercial Financial Corporation has assumed GECC's obligations
in the above Purchase Agreement.
Pursuant to the Purchase Agreement, Champion and its
subsidiaries, BCC, Champion Home Builders Co., Champion Motor
Coach, Inc., and Moduline International, Inc. (Champion and its
subsidiaries collectively referred to herein as the "Parties"),
have a full recourse obligation in the case of a dealer default
for sales out of trust, missing or damaged equipment and billed
unpaid interest charges.
Champion, based on past experience, provides currently for
estimated future losses under this program with accruals based
on monthly volumes financed with GECC.
Amounts outstanding under recourse obligation at January 1,
1994 totaled $46 million.
III. Retail Repurchase Obligations
Prior to the sale of Champion's retail subsidiary, Global
Homes, Inc. ("Global"), a significant portion of Champion's
retail sales were made pursuant to installment sales contracts
which were then customarily placed with various lending
institutions. As part of these arrangements, the Company,
through its subsidiary Champion Marketing Corporation, is
obligated to repurchase the product upon customer default for
the amount due the lending institution. The Company provides
for estimated future expenses for such repurchase.
EXHIBIT "G"
PERMITTED INDEBTEDNESS (*)
*TO BE UPDATED BY BORROWER
1. Champion
Lender Amount Interest Rate Year Due
Receivable Backed Notes $3,142,408 10.4% 1994-2003
IBM (LT Lease) 78,848 13.2% 1995
Clarklift (LT Lease) 7,429 11.2% 1995
2. DHI
1. Capital lease with Midwest Commerce Leasing for new
Xxxxxxxxx-Xxxx tractor lift commencing May, 1992 for
60 months at $616.00 per month; option to purchase at
end of lease for $10,800.
2. Capital lease with Midwest Commerce Leasing for one
new Xxxxxxxxx-Xxxx tractor lift commencing October,
1992 for 60 months at $616.00 per month; option to
purchase at end of lease for $10,800.
3. Lease with Hull Life Truck, Inc. for 2 lift trucks
commencing September 10, 1992 for 60 months at
$1,020.00 per month.
4. Lease with Hull Life Truck, Inc. for new Xxxxxxxxx-
Xxxx tow tractor commencing May 30, 1993 for 60 months
at $616.00 per month.
5. Lease with Hull Life Truck, Inc. for new Mitsubishi
lift truck commencing October 23, 1991 for 60 months
at $488.00 per month.
6. Lease with Hull Life Truck, Inc. for one Mitsubishi
lift truck commencing February 25, 1992 for 60 months
at $510.00 per month.
7. Lease with Hull Life Truck, Inc. for one Mitsubishi
lift truck commencing __________________ for ______
months at $___________ per month.
8. Lease with Hull Life Truck, Inc. for one new
Mitsubishi lift truck commencing April 30, 1993 for 60
months at $510.00 per month.
9. Lease with Hull Life Truck, Inc. for one new
Mitsubishi lift truck commencing May 30, 1993 for 60
months at $510.00 per month.
10. Lease with Hull Life Truck, Inc. for one new
Mitsubishi lift truck commencing May 30, 1993 for 60
months at $510.00 per month.
11. Lease with Hull Life Truck, Inc. for one new
Mitsubishi lift truck commencing May 30, 1993 for 60
months at $510.00 per month.
12. Lease with Hull Life Truck, Inc. for one new
Mitsubishi lift truck commencing September 10, 1992
for 60 months at $510.00 per month.
EXHIBIT "H"
REQUEST FOR SWING LINE ADVANCE
No. Dated: , 199
To: Comerica Bank, Swing Line Bank
Re: Credit Agreement by and among Comerica Bank (individually
and as Agent), the lenders from time to time parties
thereto (collectively, "Banks"), and Champion Enterprises,
Inc. ("Company") dated as of September 29, 1995 (as amended
from time to time, the "Agreement").
Pursuant to the Agreement, the Company requests a Swing
Line Advance from the Swing Line Bank as follows:
A. Date of Advance:
B. Amount of Advance:
$
/ / Comerica Bank Account No. ______________
/ / Other: _________________________________
_________________________________
C. Interest Rate:
1. Prime-based Rate / /
2. Quoted Rate / /
D. Interest Period:
1. days*
*INSERT UP TO 30 DAYS
The Company certifies to the matters specified in Section
2B.3(e) of the Agreement.
CHAMPION ENTERPRISES, INC.
By:
Its:
Swing Line Bank Approval:
EXHIBIT "J"
SWING LINE NOTE
$5,000,000 September 29, 1995
On or before the Revolving Credit Maturity Date, FOR VALUE
RECEIVED, Champion Enterprises, Inc., a Michigan corporation
("Company"), promises to pay to the order of Comerica Bank
("Bank") at 000 Xxxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx in lawful
money of the United States of America, the sum of Five Million
Dollars ($5,000,000), or so much of said sum as may from time to
time have been advanced and then be outstanding hereunder
pursuant to Article 2B of the Credit Agreement dated as of
September 29, 1995, by and among the Company, certain banks,
including the Bank, and Comerica Bank as Agent for such banks,
as the same may be amended from time to time (the "Agreement"),
together with interest thereon as hereinafter set forth.
The unpaid principal indebtedness from time to time
outstanding under this Note shall be due and payable on the last
day of the Interest Period applicable thereto or as otherwise
set forth in the Agreement, provided that no Swing Line Advance
may mature or be payable on a day later than the Revolving
Credit Maturity Date.
Each of the Swing Line Advances made hereunder shall bear
interest at the Prime-based Rate or the Quoted Rate from time to
time applicable thereto under the Agreement or as otherwise
determined thereunder, and interest shall be computed, assessed
and payable as set forth in the Agreement.
This Note is a note under which advances, repayments and
readvances may be made from time to time, but only in accordance
with the terms and conditions of the Agreement. This Note
evidences borrowings under, is subject to, is secured in
accordance with, and may be accelerated or matured under, the
terms of the Agreement, to which reference is hereby made.
Definitions and terms of the Agreement are hereby incorporated
by reference herein.
This Note shall be interpreted and the rights of the
parties hereunder shall be determined under the laws of, and
enforceable in, the State of Michigan.
Company hereby waives presentment for payment, demand,
protest and notice of dishonor and nonpayment of this Note and
agrees that no obligation hereunder shall be discharged by
reason of any extension, indulgence, release, or forbearance
granted by any holder of this Note to any party now or hereafter
liable hereon or any present or subsequent owner of any
property, real or personal, which is now or hereafter security
for this Note.
Nothing herein shall limit any right granted Bank by any
other instrument or by law.
CHAMPION ENTERPRISES INC.
By:
Its:
EXHIBIT "K"
FORM OF
SWING LINE LOAN PARTICIPATION CERTIFICATE
________________, 199
[Name of Bank]
_________________________
_________________________
Ladies and Gentlemen:
Pursuant to subsection 2B.5(b) of the Credit Agreement
dated as of September 29, 1995, among Champion Enterprises Inc.,
the Banks named therein and Comerica Bank, as Agent, the
undersigned hereby acknowledges receipt from you of $
as payment for a participating interest in the following Swing
Line Loan:
Date of Swing Line Loan:________________________________
Principal Amount of Swing Line Loan:____________________
The participation evidenced by this certificate shall be subject
to the terms and conditions of the Credit Agreement including
without limitation Section 2B.5(b) thereof.
Very truly yours,
COMERICA BANK, as Agent
By:____________________________
Its:___________________________
EXHIBIT "L"
FORM OF
ASSIGNMENT AGREEMENT
Date:
To: CHAMPION ENTERPRISES, INC.
and
COMERICA BANK ("Agent")
Re: Credit Agreement dated as of September 29, 1995 (the
"Agreement"), among Champion Enterprises, Inc. ("Company"),
Agent and certain Banks
Gentlemen and Ladies:
Reference is made to Section 12.8 of the Agreement. Unless
otherwise defined herein or the context otherwise requires, all
initially capitalized terms used herein without definition shall
have the meanings specified in the Agreement.
This Agreement constitutes notice to each of you of the
proposed assignment and delegation by [insert assignor Bank]
(the "Assignor") to [insert proposed assignee] (the
"Assignee") of a _____% undivided interest in Assignor's
Revolving Credit Note under the Agreement (the "Note"), such
that after giving effect to the assignment and assumption
hereafter provided the Assignee's interest in the Note shall
equal $ * and its Percentage shall equal % under
the Loan Documents.
*SUCH AMOUNT SHALL NOT BE LESS THAN $5,000,000.
The Assignor hereby instructs the Agent to make all
payments from and including the "Effective Date" (as hereafter
defined) hereof in respect of the interest assigned hereby,
directly to the Assignee. The Assignor and the Assignee agree
that all interest and fees accrued up to, but not including, the
Effective Date of the assignment and delegation being made
hereby are the property of the Assignor, and not the Assignee.
The Assignee agrees that, upon receipt of any such interest or
fees accrued up to the Effective Date, the Assignee will
promptly remit the same to the Assignor.
The Assignee hereby confirms that it has received a copy of
the Agreement and the exhibits and schedules referred to
therein, and all other Loan Documents which it considers
necessary, together with copies of the other documents which
were required to be delivered under the Agreement as a condition
to the making of the loans thereunder. The Assignee
acknowledges and agrees that it: (a) has made and will continue
to make such inquiries and has taken and will take such care on
its own behalf as would have been the case had its Percentage
been granted and its loans been made directly by such Assignee
to the Company without the intervention of the Agent, the
Assignor or any other Bank; and (b) has made and will continue
to make, independently and without reliance upon the Agent, the
Assignor or any other Bank, and based on such documents and
information as it has deemed appropriate, its own credit
analysis and decisions relating to the Agreement. The Assignee
further acknowledges and agrees that neither the Agent, nor the
Assignor has made any representations or warranties about the
creditworthiness of the Company, or any other party to the
Agreement or any other of the Loan Documents, or with respect to
the legality, validity, sufficiency or enforceability of the
Agreement, or any other of the Loan Documents. This assignment
shall be made without recourse to or warranty by the Assignor,
except as set forth herein.
Except as otherwise provided in the Agreement, effective as
of the Effective Date:
(a) the Assignee: (i) shall be deemed automatically to
have become a party to the Agreement, to have assumed
all of the Assignor's obligations thereunder to the
extent of the Assignee's percentage referred to in the
second paragraph of this Assignment Agreement, and to
have all the rights and obligations of a party to the
Agreement, as if it were an original signatory thereto
to the extent specified in the second paragraph
hereof; and (ii) agrees to be bound by the terms and
conditions set forth in the Agreement as if it were an
original signatory thereto; and
(b) the Assignor's obligations under the Agreement shall
be reduced by the percentage referred to in the second
paragraph of this Assignment Agreement.
As used herein, the term "Effective Date" means the date on
which all of the following have occurred or have been completed,
as reasonably determined by the Agent:
(1) the delivery to the Agent of an original of this
Assignment Agreement executed by the Assignor and the
Assignee;
(2) the payment to the Agent, of all accrued fees,
expenses and other items for which reimbursement is
then owing under the Agreement;
(3) the payment to the Agent of the $3,000 processing fee
referred to in Section 12.8(d) (iii) of the Agreement;
and
(4) all other restrictions and items noted in Sections
12.8(c), (d) and (e) of the Agreement have been
satisfied.
The Agent shall notify the Assignor and the Assignee of the
Effective Date.
The Assignee hereby advises each of you of the following
administrative details with respect to the assigned loans:
(A) Address for Notices:
Institution Name:
Address:
Attention:
Telephone:
Facsimile:
(B) Payment Instructions:
(C) Proposed effective date of assignment.
Please evidence your consent to and acceptance of the
proposed assignment and delegation set forth herein by signing
and returning counterparts hereof to the Assignor and the
Assignee.
[ASSIGNOR]
By:
Its:
[ASSIGNEE]
By:
Its:
ACCEPTED AND CONSENTED TO
this day of ,
COMERICA BANK, Agent
By:
Its:
CHAMPION ENTERPRISES, INC.*
By:
Its:
[This form of Assignment Agreement (including footnotes) is
subject in all respects to the terms and conditions of the
Agreement which shall govern in the event of any inconsistencies
or omissions.]
*ONLY IF CONSENT REQUIRED UNDER AGREEMENT
SCHEDULE 1.1
EXISTING LETTERS OF CREDIT
LETTER OF CREDIT NO. FACE AMOUNT BENEFICIARY
510929 $595,000 United Pacific Insurance Co.
526542 $4,251,526 Aetna Casualty
526541 $414,580 Aetna Casualty
526613 $463,219 Aetna Casualty
525935 $172,881 Aetna Casualty
SCHEDULE 5.12
ENVIRONMENTAL MATTERS
In December 1990, Champion Home Builders Co. ("CHB")
received a Section 104 notification letter from the United
States Environmental Protection Agency ("EPA") advising CHB that
it is a potentially responsible party ("PRP") for remediation of
the Metamora Landfill in Metamora, Michigan (the "Site"). In
August 1994, CHB received a Section 107 demand for restitution
of past response costs incurred by the EPA. CHB conducted a
thorough investigation of its waste generation practices at the
Site and, as a result of that investigation, believes that its
liability as a PRP is de minimis. However, to avoid the
uncertainty of the result of protracted litigation, CHB has
agreed to settle the EPA's claims for all past and future costs
for the sum of $3 million. The EPA is preparing a consent order
agreeable to all concerned and is in the process of obtaining
settlement approval from the Justice Department and the District
Court in Flint. Execution of the consent order and payment of
the $3 million is expected in early 1996.
On January 4, 1995, CHB received a demand from the Michigan
Department of Natural Resources ("MDNR") for payment of past
costs incurred pursuant to Section 104 and future costs incurred
by the State of Michigan for responding to the release or
threatened release of hazardous substances ar the Site. The
demand letter alleges that CHB is jointly and severally
responsible with other PRP's for payment of $3.4 million in
costs. On July 31, 1995 CHB voluntarily entered into an
Administrative Order by Consent with the MDNR and subsequently
paid the State $65,000 in full and total settlement of CHB's
liability for all past, present and future response costs
incurred by the State and costs that may continue to accrue in
undertaking response activities at the Site. The order provides
CHB with full contribution protection.
CHB is voluntarily remediating a leaking underground
storage tank site at its former Xxxxxx manufactured home
production facility. Soil remediation was completed in
February, 1994. Ground water remediation, if necessary, is
expected to begin in the spring of 1996. The cost of such
remediation is not considered by management to be material.
In August 1995, CHB received a Section 107 demand for
restitution of past and anticipated future EPA response costs at
the Tri-Cities Barrel Co., Inc. Superfund Site in Xxxxxx, New
York. The EPA determined that CHB was entitled to de minimis
status under Section 122(g)(1)(A) of CERCLA and offered to
settle for the sum of $66,400 provided that CHB enter into and
execute an Administrative order on Consent. on September 13,
1995, CHB executed the order which provides for the full and
total release of liability for all past, present and future
response costs incurred by the EPA and for contribution
protection.
