EXHIBIT 10(b)
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LOAN AGREEMENT
BY AND AMONG
TITAN INTERNATIONAL, INC.
AND
LASALLE BANK NATIONAL ASSOCIATION
DATED DECEMBER 21, 2001
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TABLE OF CONTENTS
1. DEFINITIONS........................................................................................1
1.1 Defined Terms...................................................................................1
1.2 Other Terms Defined in UCC......................................................................7
1.3 Other Definitional Provisions; Construction.....................................................7
1.4 Terms Incorporated by Reference from Term Facility Agreement....................................7
2. COMMITMENT OF THE BANK.............................................................................7
2.1 Revolving Loans.................................................................................7
2.2 [Intentionally Omitted].........................................................................9
2.3 Additional LIBOR Loan Provisions................................................................9
2.4 Conversion of Revolving Loans; Procedure.......................................................10
2.5 Procedure at End of Interest Period............................................................10
2.6 Interest and Fee Computation; Collection of Funds..............................................11
2.7 Letters of Credit..............................................................................11
3. CONDITIONS OF BORROWING...........................................................................11
3.1 Loan Documents.................................................................................11
3.2 Event of Default...............................................................................12
3.3 Adverse Changes................................................................................12
3.4 Representations and Warranties.................................................................12
3.5 Term Facility Agreement........................................................................12
4. NOTE EVIDENCING LOANS.............................................................................12
5. MANNER OF BORROWING...............................................................................13
6. COLLATERAL AND GUARANTIES.........................................................................14
6.1 Collateral.....................................................................................14
6.2 Guaranties.....................................................................................14
6.3 Further Assurances.............................................................................14
7. REPRESENTATIONS AND WARRANTIES....................................................................15
8. COVENANTS.........................................................................................15
8.1 Term Facility Agreement........................................................................15
8.2 Lockbox Agreement..............................................................................15
9. EVENTS OF DEFAULT.................................................................................16
9.1 Events of Default..............................................................................16
10. REMEDIES..........................................................................................19
11. GUARANTY..........................................................................................19
11.1 The Guarantees..............................................................................19
11.2 Guarantee Unconditional.....................................................................20
11.3 Discharge Only Upon Payment in Full; Reinstatement in Certain Circumstances.................20
11.4 Subrogation.................................................................................21
11.5 Waivers.....................................................................................21
11.6 Limit on Recovery...........................................................................21
11.7 Stay of Acceleration........................................................................21
12. MISCELLANEOUS.....................................................................................22
12.1 Obligations Absolute........................................................................22
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12.2 Entire Agreement............................................................................22
12.3 Amendments; Waivers.........................................................................22
12.4 INTENTIONALLY OMITTED.......................................................................22
12.5 WAIVER OF JURY TRIAL........................................................................22
12.6 LITIGATION..................................................................................23
12.7 Assignability...............................................................................23
12.8 Confidentiality.............................................................................23
12.9 Binding Effect..............................................................................24
12.10 Governing Law...............................................................................24
12.11 Enforceability..............................................................................24
12.12 Survival of Borrower Representations........................................................24
12.13 Extensions of Bank's Commitment and Note....................................................24
12.14 Time of Essence.............................................................................24
12.15 Counterparts................................................................................24
12.16 Facsimile Signatures........................................................................25
12.17 Notices.....................................................................................25
12.18 Indemnification.............................................................................26
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LOAN AGREEMENT
This LOAN AGREEMENT dated as of December 21, 2001 (the "Agreement"), is
executed by and among TITAN INTERNATIONAL, INC., An Illinois corporation (the
"Borrower") whose address is 0000 Xxxxxx Xxxxxx, Xxxxxx, Xxxxxxxx 00000, each of
the parties now, or from time to time becoming, a party hereto as Guarantor and
LASALLE BANK NATIONAL ASSOCIATION, a national banking association (the "Bank"),
whose address is 000 Xxxxx XxXxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx 00000.
In consideration of the mutual agreements hereinafter set forth, the
Borrower, Guarantors and the Bank hereby agree as follows:
1. DEFINITIONS
1.1 Defined Terms. For the purposes of this Agreement, the following
capitalized words and phrases shall have the meanings set forth below.
"Bankruptcy Code" shall mean the United States Bankruptcy Code, as now
existing or hereafter amended.
"Business Day" shall mean any day other than (x) a Saturday, Sunday or
a legal holiday on which banks are authorized or required to be closed for the
conduct of commercial banking business in Chicago, Illinois and (y) if the
applicable Business Day relates to a LIBOR Loan, any day satisfying the criteria
set forth in the immediately preceding clause (x) on which the Bank is dealing
in United States dollars in the interbank market in London, England.
"Cash Collateral" shall mean all monies from time to time deposited in
the Cash Collateral Account and all income therefrom.
"Cash Collateral Account" means that certain interest bearing deposit
account number 00000000 (or another account mutually acceptable to Borrower and
Bank in the name of the Borrower maintained with, and under the sole custody and
control of the Bank into which the Eligible Cash Collateral will be deposited
and held.
"Change in Control" shall have the same meaning herein as such term is
defined in the Term Facility Agreement.
"Collateral" means all properties, rights, interests and privileges
from time to time subject to the Liens granted to the Bank pursuant to the
Collateral Documents.
"Collateral Documents" means the Security Agreement and all financing
statements as shall from time to time secure or relate to the Obligations or any
part thereof.
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"Default Rate" shall mean a per annum rate of interest equal to the
Prime Rate plus two percent (2%) per annum.
"Eligible Cash Collateral" shall mean all sums on deposit in the Cash
Collateral Account and in which the Bank has a first perfected Lien and which is
not subject to any claim or Lien of any other Person other than a subordinate
Lien in favor of GECC, as Agent securing Borrower's obligations under the Term
Facility as provided in the Intercreditor Agreement.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended from time to time.
"Event of Default" shall mean any of the events or conditions set forth
in Section 9.1 hereof.
"Federal Funds Rate" shall mean, as of any date, the daily effective
Federal Funds rate for such day as published in Federal Reserve Statistical
Release, H.15 (or, if at any time such Release is not published, the successor
thereto or closest approximation (as determined by the Bank) thereto), for such
day; provided however that the Federal Funds rate for any day on which the
Federal Reserve Bank of New York (the "New York Fed") is not open for business
shall be the Federal Funds Rate for the next preceding day on which the New York
Fed was open for business; and provided further that if the Bank determines, in
good faith, that it is unable to determine the Federal Funds Rate on the basis
of Federal Funds Statistical Release H.15, then the Bank shall determine such
Rate based on the quotations of three dealers in Federal Funds in New York City,
as reasonably selected by the Bank, and the Bank's determination of such rate
shall be binding and conclusive absent manifest error.
"GAAP" shall mean generally accepted accounting principles, using the
accrual basis of accounting and consistently applied with prior periods,
provided, however, that GAAP with respect to any interim financial statements or
reports shall be deemed subject to fiscal year-end adjustments and footnotes
made in accordance with GAAP.
"GECC" means General Electric Capital Corporation.
"Guarantor" shall mean each Subsidiary of the Borrower other than a
Subsidiary organized outside of the United States of America, Titan Credit
Corporation, Titan Marketing Services, Inc., Automotive Wheels, Inc. and Dyneer
Corporation.
"Indemnified Party" and "Indemnified Parties" shall mean, respectively,
each of the Bank and any parent corporations, affiliated corporations or
subsidiaries of the Bank, and each of their respective officers, directors,
employees, attorneys and agents, and all of such parties and entities.
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"Intercreditor Agreement" shall mean the Intercreditor Agreement
bearing even date herewith between the Bank and GECC, as Agent as the same may
from time to time be amended or modified.
"Interest Period" shall mean, with regard to any LIBOR Loan,
successive one, two, three or six month periods as selected from time to time by
the Borrower by notice given to the Bank not less than three Business Days prior
to the first day of each respective Interest Period; provided, however, that:
(i) each such Interest Period occurring after the initial Interest Period of any
LIBOR Loan shall commence on the day on which the preceding Interest Period for
such LIBOR Loan expires, (ii) whenever the last day of any Interest Period would
otherwise occur on a day other than a Business Day, the last day of such
Interest Period shall be extended to occur on the next succeeding Business Day,
provided, however, that if such extension would cause the last day of such
Interest Period to occur in the next following calendar month, then the last day
of such Interest Period shall occur on the immediately preceding Business Day;
(iii) whenever the first day of any Interest Period occurs on a day of a month
for which there is no numerically corresponding day in the calendar month in
which such Interest Period terminates, such Interest Period shall end on the
last Business Day of such calendar month; and (iv) the final Interest Period
must be such that its expiration occurs on or before the Maturity Date.
"Letter of Credit" and "Letters of Credit" shall mean, respectively, a
letter of credit and all such letters of credit issued by the Bank, in its sole
discretion, upon the execution and delivery by the Borrower and the acceptance
by the Bank of a Master Letter of Credit Agreement and an application for Letter
of Credit, as set forth in Section 2.7 of this Agreement.
"Letter of Credit Obligations" shall mean, at any time, an amount equal
to the aggregate of the original face amounts of all Letters of Credit minus the
sum of (i) the amount of any reductions in the original face amount of any
Letter of Credit which did not result from a draw thereunder, (ii) the amount of
any payments made by the Bank with respect to any draws made under a Letter of
Credit for which the Borrower has reimbursed the Bank, (iii) the amount of any
payments made by the Bank with respect to any draws made under a Letter of
Credit which have been converted to a Revolving Loan as set forth in Section
2.7, and (iv) the portion of any issued but expired Letter of Credit which has
not been drawn by the beneficiary thereunder. For purposes of determining the
outstanding Letter of Credit Obligations at any time, the Bank's acceptance of a
draft drawn on the Bank pursuant to a Letter of Credit shall constitute a draw
on the applicable Letter of Credit at the time of such acceptance.
"LIBOR" shall mean a rate of interest equal to (a) the quotient of (x)
per annum rate of interest at which United States dollar deposits in an amount
comparable to the amount of the relevant LIBOR Loan and for a period equal to
the relevant Interest Period are offered generally to the Bank (rounded upward
if necessary, to the nearest 1/100 of 1.00%) in the London Interbank Eurodollar
market at 11:00 a.m. (London time) two
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Business Days prior to the commencement of each Interest Period and (y) one
minus the maximum reserve percentages for determining reserves to be maintained
by member banks of the Federal Reserve System for Eurocurrency liabilities, or
(b) the rate per annum equal to the rate determined by the Bank to be the
offered rate that appears on page 3750 of the Telerate screen (or any successor
thereto) as the average British Bankers Association Interest Settlement Rate for
deposits in United States dollars (for delivery on the first day of such
Interest Period) with a term equivalent to such Interest Period determined as of
approximately 11:00 a.m. (London time) two Business Days prior to the first day
of such Interest Period, such rate to remain fixed for such Interest Period. The
Bank's determination of LIBOR shall be conclusive, absent manifest error.
"LIBOR Loan" or "LIBOR Loans" shall mean that portion, and collectively
those portions, of the aggregate outstanding principal balance of the Loans that
will bear interest at the LIBOR Rate, of which at any time and from time to
time, the Borrower may identify no more than nine (9) advances of the Loans
which will bear interest at the LIBOR Rate, of which each particular LIBOR Loan
must be in the amount of One Million and 00/100 Dollars ($1,000,000) or a higher
integral multiple of One Hundred Thousand and 00/100 Dollars ($100,000).
"LIBOR Rate" shall mean a per annum rate of interest equal to LIBOR for
the relevant Interest Period (rounded upward if necessary, to the nearest 1/100
of 1.00%) plus two percent (2%), which LIBOR Rate shall remain fixed during such
Interest Period.
"Lien" shall mean any mortgage, pledge, hypothecation, judgment lien or
similar legal process, title retention lien, or other lien or security interest,
including, without limitation, the interest of a vendor under any conditional
sale or other title retention agreement and the interest of a lessor under a
lease of any interest in any kind of property or asset, whether real, personal
or mixed, or tangible or intangible, by such Person as lessee that is, or should
be, a capital lease on the balance sheet of the Borrower prepared in accordance
with GAAP.
"Loans" shall mean, collectively, all Revolving Loans (whether Prime
Loans or LIBOR Loans) made by the Bank to the Borrower and all Letter of Credit
Obligations, under and pursuant to this Agreement.
"Loan Documents" shall have the meaning set forth in Section 3.1.
"Lockbox Agreement" shall mean that certain Lockbox Account Agreement
dated December 21, 2001 among GECC, as Agent, the Borrower and the Bank, as
amended from time to time.
"Mandatory Prepayment" shall have the meaning set forth in Section
2.1(c).
"Material Adverse Effect" shall have the same meaning herein as such
term is defined in the Term Facility Agreement.
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"Maturity Date" shall mean December 21, 2006.
"Maximum Letter of Credit Obligation" shall mean the lesser of (a) the
Revolving Loan Commitment less the aggregate amount of all Revolving Loans
outstanding at any time, or (b) Ten Million and 00/100 Dollars ($10,000,000.00).
"Note" shall mean the Revolving Note.
"Obligations" shall mean the Loans, all interest accrued thereon, all
liabilities and obligations of the Borrower or any Guarantor pursuant hereto or
any other Loan Document, including, fees due the Bank hereunder or thereunder
and any expenses incurred by the Bank hereunder or thereunder, in each case
whether now or hereafter existing, whether now due or to become due, direct or
indirect, absolute or contingent, and whether several, joint or joint and
several.
"Obligors" shall mean the Borrower, the Guarantors, any accommodation
endorser, third party pledgor, or any other party liable with respect to the
Obligations.
"Person" shall mean any individual or providing credit support for,
partnership, limited liability company, corporation, trust, joint venture, joint
stock company, association, unincorporated organization, government or agency or
political subdivision thereof, or other entity.
"Prime Loan" or "Prime Loans" shall mean that portion, and
collectively, those portions of the aggregate outstanding principal balance of
the Loans that will bear interest at the Prime Rate.
"Prime Rate" shall mean the floating per annum rate of interest which
at any time, and from time to time, shall be most recently announced by the Bank
as its prime commercial rate, which is not intended to be the Bank's lowest or
most favorable rate of interest at any one time. The effective date of any
change in the Prime Rate shall for purposes hereof be the date the Prime Rate is
changed by the Bank. The Bank shall not be obligated to give notice of any
change in the Prime Rate.
"Regulatory Change" shall mean the introduction of, or any change in
any applicable law, treaty, rule, regulation or guideline or in the
interpretation or administration thereof by any governmental authority or any
central bank or other fiscal, monetary or other authority having jurisdiction
over the Bank or its lending office.
"Reserve" shall mean $742,500 until such time as GECC has confirmed to
Bank that it has received fees payable to GECC pursuant to the "GE Capital Fee
Letter" (as defined in the Term Facility Agreement) payable to GECC on June 30,
2002, and $0 at all times thereafter.
"Revolving Interest Rate" shall mean the Borrower's from time to time
option of (i) the Prime Rate or (ii) the LIBOR Rate.
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"Revolving Loan" and "Revolving Loans" shall mean, respectively, each
direct advance and the aggregate of all such direct advances, from time to time
in the form of either Prime Loans and/or LIBOR Loans, made by the Bank to the
Borrower under and pursuant to this Agreement, as set forth in Section 2.1 of
this Agreement.
"Revolving Loan Availability" shall mean at any time, Revolving Loan
Commitment less the Letter of Credit Obligations.
"Revolving Loan Commitment" shall mean Twenty Million and 00/100
Dollars ($20,000,000.00) less the Reserve.
"Revolving Note" shall have the meaning set forth in Section 4 hereof.
"Security Agreement" shall mean that certain Security Agreement bearing
even date herewith from the Borrower and Guarantors in favor of the Bank.
"Subsidiary" and "Subsidiaries" shall mean, respectively, each and all
such corporations, partnerships, limited partnerships, limited liability
companies, limited liability partnerships or other entities of which or in which
the Borrower owns directly or indirectly fifty percent (50.00%) or more of (i)
the combined voting power of all classes of stock having general voting power
under ordinary circumstances to elect a majority of the board of directors of
such entity if a corporation, (ii) the management authority and capital interest
or profits interest of such entity, if a partnership, limited partnership,
limited liability company, limited liability partnership, joint venture or
similar entity, or (iii) the beneficial interest of such entity, if a trust,
association or other unincorporated organization.
"Term Facility" shall mean the term loans in the aggregate principal
amount of Ninety Nine Million Dollars ($99,000,000) extended to the Borrower and
Guarantors pursuant to the Term Facility Agreement.
"Term Facility Agreement" shall mean that certain Credit Agreement
dated as of December 21, 2001 among the Borrower, the Guarantors, GECC, as Agent
and the Lenders party thereto, a copy of which is attached hereto as Exhibit B,
as amended or restated from time to time.
"UCC" shall mean the Uniform Commercial Code in effect in Illinois
from time to time.
"Wholly-Owned Subsidiary" shall mean any Subsidiary of which or in
which the Borrower owns directly or indirectly 100% of (i) the combined voting
power of all classes of stock having general voting power under ordinary
circumstances to elect a majority of the board of directors of such Person, if
it is a corporation, (ii) the capital interest or profits interest of such
Persons, if it is a partnership, joint venture or similar entity, or (iii) the
beneficial interest of such Persons, if it is a trust, association or other
unincorporated organization.
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1.2 Other Terms Defined in UCC. All other capitalized words and phrases
used herein and not otherwise specifically defined shall have the respective
meanings assigned to such terms in the UCC, as amended from time to time, to the
extent the same are used or defined therein.
1.3 Other Definitional Provisions; Construction. Whenever the context
so requires, the neuter gender includes the masculine and feminine, the single
number includes the plural, and vice versa, and in particular the word
"Borrower" shall be so construed. The words "hereof", "herein" and "hereunder"
and words of similar import when used in this Agreement shall refer to this
Agreement as a whole and not to any particular provision of this Agreement, and
references to Article, Section, Subsection, Annex, Schedule, Exhibit and like
references are references to this Agreement unless otherwise specified. An Event
of Default shall "continue" or be "continuing" until such Event of Default has
been waived in accordance with Section 12.3 hereof. References in this Agreement
to any party shall include such party's successors and permitted assigns.
References to any "Section" shall be a reference to such Section of this
Agreement unless otherwise stated. To the extent any of the provisions of the
other Loan Documents are inconsistent with the terms of this Agreement, the
provisions of this Agreement shall govern.
1.4 Terms Incorporated by Reference from Term Facility Agreement. Any
provision in this Agreement and/or in the other Loan Documents which
incorporates provisions from the Term Facility Agreement shall, by such
incorporation, likewise include the definitions of any capitalized words and
phrases within the incorporated provisions which are specifically defined in
other sections of the Term Facility Agreement.
2. COMMITMENT OF THE BANK.
2.1 Revolving Loans.
(a) Revolving Loan Commitment. Subject to the terms and
conditions of this Agreement and the other Loan Documents, and in reliance upon
the representations and warranties of the Borrower set forth herein and in the
other Loan Documents, the Bank agrees to make such Revolving Loans at such times
as the Borrower may from time to time request until, but not including, the
Maturity Date, and in such amounts as the Borrower may from time to time
request, provided, however, that the aggregate principal balance of all
Revolving Loans outstanding at any time shall not exceed the Revolving Loan
Availability. Revolving Loans made by the Bank may be repaid and, subject to the
terms and conditions hereof, borrowed again up to, but not including the
Maturity Date unless the Revolving Loans are otherwise terminated or extended as
provided in this Agreement. The Revolving Loans shall be used solely by the
Borrower for working capital purposes.
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(b) Revolving Loan Interest and Payments. Except as otherwise
provided in this SECTION 2.1(B), the principal amount of the Revolving Loans
outstanding from time to time shall bear interest at the Revolving Interest
Rate. Accrued and unpaid interest on the unpaid principal balance of all
Revolving Loans outstanding from time to time which are Prime Loans, shall be
due and payable monthly, in arrears, commencing on January 31, 2002 and
continuing on the last day of each calendar month thereafter, and on the
Maturity Date. Accrued and unpaid interest on the unpaid principal balance of
all Revolving Loans outstanding from time to time which are LIBOR Loans shall be
payable on the last Business Day of each Interest Period (provided, however,
that for Interest Periods of six months, accrued interest shall also be paid on
the date which is three months from the first day of such Interest Period),
commencing on the first such date to occur after the date hereof, on the date of
any principal repayment of a LIBOR Loan and on the Maturity Date. Any amount of
principal or interest on the Revolving Loans which is not paid when due, whether
at stated maturity, by acceleration or otherwise, shall bear interest payable on
demand at the Default Rate.
(c) Revolving Loan Principal Repayments.
(i) Mandatory Principal Prepayments. All Revolving
Loans hereunder shall be repaid by the Borrower on the
Maturity Date, unless payable sooner pursuant to the
provisions of this Agreement. In the event the aggregate
outstanding principal balance of all Revolving Loans and
Letter of Credit Obligations hereunder exceed the Revolving
Loan Availability, the Borrower shall, without notice or
demand of any kind, immediately make such repayments of the
Revolving Loans or take such other actions as shall be
necessary to eliminate such excess. Each such prepayment shall
be first applied against Prime Rate Loans then outstanding
until payment in full thereof, then to any LIBOR Loans which
are then outstanding. Also, if the Borrower chooses not to
convert any Revolving Loan which is a LIBOR Loan to a Prime
Loan as provided in SECTION 2.3(B) and SECTION 2.3(C), then
such Revolving Loan shall be immediately due and payable on
the last Business Day of the then existing Interest Period or
on such earlier date as required by law, all without further
demand, presentment, protest or notice of any kind, all of
which are hereby waived by the Borrower.
(ii) Optional Prepayments. In addition to the
Mandatory Prepayment, the Borrower may from time to time
prepay the Revolving Loans which are Prime Loans, in whole or
in part, without any prepayment penalty whatsoever, subject to
the following conditions: (i) each partial prepayment shall be
in an amount equal to Ten Thousand Dollars ($10,000) or a
higher integral multiple of Five Thousand Dollars ($5,000);
and (ii) any prepayment of the entire principal balance of the
Prime Loans shall include accrued interest on such Prime Loans
to the
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date of such prepayment and payment in full of all other
Obligations (other than the LIBOR Loans), then due and
payable.
2.2 [Intentionally Omitted].
2.3 Additional LIBOR Loan Provisions.
(a) LIBOR Loan Prepayments. Notwithstanding anything to the
contrary contained herein, the principal balance of any LIBOR Loan may not be
prepaid in whole or in part at any time. If, for any reason, a LIBOR Loan is
paid prior to the last Business Day of any Interest Period, the Borrower agrees
to indemnify the Bank against any loss (including any loss on redeployment of
the funds repaid), cost or expense incurred by the Bank as a result of such
prepayment.
(b) LIBOR Unavailability. If the Bank determines in good faith
(which determination shall be conclusive, absent manifest error) prior to the
commencement of any Interest Period that (i) United States dollar deposits of
sufficient amount and maturity for funding any LIBOR Loan are not available to
the Bank in the London Interbank Eurodollar market in the ordinary course of
business, or (ii) by reason of circumstances affecting the London Interbank
Eurodollar market, adequate and fair means do not exist for ascertaining the
rate of interest to be applicable to the relevant LIBOR Loan, the Bank shall
promptly notify the Borrower thereof and, so long as the foregoing conditions
continue, Loans may not be advanced as a LIBOR Loan thereafter. Bank shall
promptly give notice to Borrower if the circumstances giving rise to such
suspension cease to exist. In addition, at the Borrower's option, each existing
LIBOR Loan shall be immediately (i) converted to a Prime Loan on the last
Business Day of the then existing Interest Period, or (ii) due and payable on
the last Business Day of the then existing Interest Period, without further
demand, presentment, protest or notice of any kind, all of which are hereby
waived by the Borrower.
(c) Regulatory Change. In addition, if, after the date hereof,
a Regulatory Change shall, in the reasonable determination of the Bank, make it
unlawful for the Bank to make or maintain the LIBOR Loans, then the Bank shall
promptly notify the Borrower and Loans may not be advanced as a LIBOR Loan
thereafter. In addition, at the Borrower's option, each existing LIBOR Loan
shall be immediately (i) converted to a Prime Loan on the last Business Day of
the then existing Interest Period or on such earlier date as required by law, or
(ii) due and payable on the last Business Day of the then existing Interest
Period or on such earlier date as required by law, all without further demand,
presentment, protest or notice of any kind, all of which are hereby waived by
the Borrower.
(d) LIBOR Loan Indemnity. If any Regulatory Change (whether or
not having the force of law) shall (a) impose, modify or deem applicable any
assessment, reserve, special deposit or similar requirement against assets held
by, or deposits in or for the account of or loans by, or any other acquisition
of funds or disbursements by, the Bank; (b) subject the Bank or any LIBOR Loan
to any tax, duty, charge, stamp tax or fee
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or change the basis of taxation of payments to the Bank of principal or interest
due from the Borrower to the Bank hereunder (other than a change in the taxation
of the overall net income of the Bank); or (c) impose on the Bank any other
condition regarding such LIBOR Loan or the Bank's funding thereof, and the Bank
shall determine (which determination shall be conclusive, absent manifest error)
that the result of the foregoing is to increase the cost to the Bank of making
or maintaining such LIBOR Loan or to reduce the amount of principal or interest
received by the Bank hereunder, then the Borrower shall pay to the Bank, on
demand, such additional amounts as the Bank shall, from time to time, determine
are sufficient to compensate and indemnify the Bank for such increased cost or
reduced amount. Under such circumstances, Bank shall provide a statement to
Borrower as to the amount of such loss or expense, prepared in good faith and in
reasonable detail which shall be conclusive and binding for all purposes absent
manifest error.
2.4 Conversion of Revolving Loans; Procedure. So long as no Default or
Event of Default exists and is continuing, Borrower may convert all or any part
of any outstanding Prime Loan into LIBOR Loans or by giving notice to Bank of
such conversion not later than 2:00 p.m., Chicago time, on a Business Day which
is at least three Business Days prior to the date of the requested conversion to
a LIBOR Loan. Each such notice shall be effective upon receipt by Bank, shall be
in writing (which may be by telecopy) or by telephone to be promptly confirmed
in writing, shall specify the date and amount of such conversion, the total
amount of Loans to be so converted and the Interest Period therefor. Each
conversion of Prime Loans into a LIBOR Loan or Loans shall be on a Business Day,
and the aggregate amount of each such conversion shall be at least One Million
Dollars ($1,000,000) or higher integral multiple of One Hundred Thousand Dollars
($100,000).
2.5 Procedure at End of Interest Period.
(a) Automatic Conversion. Unless the Borrower requests a new
LIBOR Loan in accordance with subsection (b) below or repays such a Loan on the
last day of the applicable Interest Period, Bank shall automatically and without
request by the Borrower, on the last day of the applicable Interest Period,
convert each LIBOR Loan to a Prime Loan. Bank shall promptly notify the Borrower
of the automatic conversion of any LIBOR Loan to a Prime Loan pursuant to this
subsection (a); provided that any failure by Bank to provide such notice shall
have no affect on the conversion of such LIBOR Loan nor the Obligations of the
Borrower under this Agreement.
(b) Extension. So long as no Default or Event of Default
exists and is continuing, the Borrower may cause all or any part of an
outstanding LIBOR Loan to be refunded as a new LIBOR Loan at the end of the
then-applicable Interest Period, by notifying Bank not later than 2:00 p.m.,
Chicago time, on a Business Day which is at least three Business Days prior to
the first day of the new Interest Period for the LIBOR Loans. Each such notice
shall be effective upon receipt by Bank, shall be in writing (which may be by
telecopy) or by telephone to be promptly confirmed in writing and
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shall specify the amount of the new LIBOR Loans and the Interest Period
therefor. Each new Interest Period for a LIBOR Loan shall begin on the next
Business Day after the last day of the then applicable Interest Period and the
aggregate amount of the LIBOR Loan bearing the then applicable LIBOR Rate shall
be at least One Million Dollars ($1,000,000) or a higher multiple of One Hundred
Thousand Dollars ($100,000).
2.6 Interest and Fee Computation; Collection of Funds. Except as
otherwise set forth herein, all interest and fees shall be calculated on the
basis of a year consisting of 360 days and shall be paid for the actual number
of days elapsed. Principal payments submitted in funds not immediately available
shall continue to bear interest until collected. If any payment to be made by
the Borrower hereunder or under the Note shall become due on a day other than a
Business Day, such payment shall be made on the next succeeding Business Day and
such extension of time shall be included in computing any interest in respect of
such payment.
2.7 Letters of Credit. Subject to the terms and conditions of this
Agreement and upon the execution by the Borrower and the Bank of a Master Letter
of Credit Agreement and, upon the execution and delivery by the Borrower, and
the acceptance by the Bank, in its sole and absolute discretion, of an
application for letter of credit, the Bank agrees to issue for the account of
the Borrower out of the Revolving Loan Availability, such Letters of Credit in
the standard form of the Bank and otherwise in form and substance acceptable to
the Bank, from time to time during the term of this Agreement, provided that the
Letter of Credit Obligations may not at any time exceed the Maximum Letter of
Credit Obligation and provided, further, that no Letter of Credit shall have an
expiration date later than the Maturity Date. The amount of any payments made by
the Bank with respect to draws made by a beneficiary under a Letter of Credit
for which the Borrower has failed to reimburse the Bank upon the earlier of (i)
the Bank's demand for repayment, or (ii) five (5) days from the date of such
payment to such beneficiary by the Bank, shall be deemed to have been converted
to a Revolving Loan as of the date such payment was made by the Bank to such
beneficiary. Upon the occurrence of an Event of Default and at the option of the
Bank, all Letter of Credit Obligations shall be converted to Revolving Prime
Loans, all without demand, presentment, protest or notice of any kind, all of
which are hereby waived by the Borrower and the Bank agrees to give the Borrower
notice of any such conversion but its failure to do so shall not affect the
effectiveness thereof.
3. CONDITIONS OF BORROWING. Notwithstanding any other provision of this
Agreement, the Bank shall not be required to disburse or make all or any portion
of the Loans if any of the following conditions shall have occurred.
3.1 Loan Documents. The Borrower shall have failed to execute and
deliver to the Bank any of the following Loan Documents (collectively, the "Loan
Documents"), all of which must be satisfactory to the Bank and the Bank's
counsel in form, substance and execution:
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(a) Loan Agreement. Two copies of this Agreement duly executed
by the Borrower.
(b) Revolving Note. A Revolving Note duly executed by the
Borrower, in the form attached hereto as Exhibit "A".
(c) Security Agreement. Two copies of the Security Agreement
duly executed by the Borrower and the Guarantors.
(d) Resolutions. Resolutions of the board of directors of the
Borrower and Guarantors authorizing the execution of this Agreement and the Loan
Documents.
(e) Lockbox Agreement. Two copies of the Lockbox Agreement
duly executed by the Borrower and GECC.
(f) Additional Documents. Such other certificates, financial
statements, schedules, resolutions, opinions of counsel, notes, financing
statements and other documents which are provided for hereunder or which the
Bank shall require.
3.2 Event of Default. Any Event of Default, or any event which, with
notice or lapse of time, or both would constitute an Event of Default, shall
have occurred and be continuing.
3.3 Adverse Changes. A material adverse change in the financial
condition or affairs of the Borrower, as determined in the Bank's reasonable
discretion, shall have occurred.
3.4 Representations and Warranties. Any representation or warranty of
the Borrower contained herein or in any Loan Document shall be untrue or
incorrect in any material way as of the date of any Loan as though made on such
date, except to the extent such representation or warranty expressly relates to
an earlier date.
3.5 Term Facility Agreement. In the case of the initial Loan to be made
hereunder, the Borrower shall have failed to satisfy any condition precedent
contained in the Term Facility Agreement (other than the effectiveness of this
Agreement or as have been waived by the Agent and lenders thereunder).
4. NOTE EVIDENCING LOANS. The Revolving Loans and the Letter of Credit
Obligations shall be evidenced by a single Revolving Note (together with any and
all renewal, extension, modification or replacement notes executed by the
Borrower and delivered to the Bank and given in substitution therefor, the
"Revolving Note") in the form of Exhibit "A" attached hereto, duly executed by
the Borrower and payable to the order of the Bank. Although the Revolving Note
shall be expressed to be payable in the maximum amount of the Revolving Loan
Commitment, Borrower shall be obligated to pay only the unpaid balance of the
Revolving Loans together with interest thereon and other amounts due in
connection therewith as provided herein and in the other Loan
12
Documents. At the time of the initial disbursement of a Revolving Loan and at
each time an additional Revolving Loan shall be requested hereunder or a
repayment made in whole or in part thereon, an appropriate notation thereof
shall be made on the books and records of the Bank. All amounts recorded shall
be, absent demonstrable error, conclusive and binding evidence of (i) the
principal amount of the Revolving Loans advanced hereunder and the amount of all
Letter of Credit Obligations, (ii) any unpaid interest owing on the Revolving
Loans, and (iii) all amounts repaid on the Revolving Loans or the Letter of
Credit Obligations. The failure to record any such amount or any error in
recording such amounts shall not, however, limit or otherwise affect the
obligations of the Borrower under the Revolving Note to repay the principal
amount of the Revolving Loans, together with all interest accruing thereon.
5. MANNER OF BORROWING. Each Loan shall be made available to the Borrower upon
its request, from any Person whose authority to so act has not been revoked by
the Borrower in writing previously received by the Bank. Each such request shall
be effective upon receipt by the Bank and shall be in writing (which may be by
telecopy) or by telephone to be promptly confirmed in writing. Each Revolving
Loan may be advanced either as a Prime Loan or a LIBOR Loan, provided, however,
that at any time and from time to time, the Borrower may identify no more than
nine (9) Revolving Loans which may be LIBOR Loans. A request for a Prime Loan
must be received by no later than 11:00 a.m. Chicago, Illinois time, on the day
it is to be funded. A request for a LIBOR Loan must (i) be received by no later
than 11:00 a.m. Chicago, Illinois time, three days before the day it is to be
funded, and (ii) be in an amount equal to One Million Dollars ($1,000,000) or a
higher integral multiple of One Hundred Thousand Dollars ($100,000) and (iii)
specify the applicable Interest Period. If for any reason the Borrower shall
fail to select timely an Interest Period for an existing LIBOR Loan, then such
LIBOR Loan shall be immediately converted to a Prime Loan on the last Business
Day of the then existing Interest Period, all without demand, presentment,
protest or notice of any kind, all of which are hereby waived by the Borrower.
Except to the extent such Loan represents a conversion or refunding of an
outstanding Loan, the proceeds of each Prime Loan or LIBOR Loan shall be made
available at the office of the Bank by credit to an account designated by the
Borrower or by other means requested by the Borrower and acceptable to the Bank.
Each Letter of Credit shall be issued by the Bank upon the execution of
the Bank's standard Master Letter of Credit Agreement by the Borrower and the
Bank, and the execution and delivery by the Borrower and the acceptance by the
Bank, in its reasonable discretion, of the Bank's standard application for
Letter of Credit and the payment by the Borrower of the Bank's fees charged in
connection therewith as hereinafter provided. For each Letter of Credit issued
under and pursuant to this Agreement, the Borrower agrees to pay an annual fee
equal to one percent (1.00%) of the maximum face amount of each such Letter of
Credit from time to time outstanding, payable by the Borrower on or before the
issuance of such Letter of Credit by the Bank and annually thereafter on the
same date unless and until (i) such Letter of Credit has expired or has been
returned to the Bank, or (ii) the Bank has paid the beneficiary thereunder the
full face amount of such
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Letter of Credit. In addition to such fees, the Borrower also agrees to pay
diminimis administrative fees and costs customarily charged by the Bank in
connection with the issuance of letters of credit, whether as set forth in the
Master Letter of Credit Agreement, fee schedules or otherwise.
The Bank is authorized to rely on any written, verbal, electronic,
telephonic or telecopy loan requests which the Bank believes in its good faith
judgment to emanate from a properly authorized representative of the Borrower,
whether or not that is in fact the case. The Borrower does hereby irrevocably
confirm, ratify and approve all such advances by the Bank and does hereby
indemnify the Bank against losses and expenses (including court costs,
reasonable attorneys' and paralegals' fees) and shall hold the Bank harmless
with respect thereto.
6. COLLATERAL AND GUARANTIES.
6.1 Collateral. Borrower acknowledges and agrees that the Obligations
shall at all times be secured by (a) a valid, perfected and enforceable Lien on
Cash Collateral of the Borrower in an amount not less than Fifteen Million
Dollars ($15,000,000) and (b) a valid, perfected and enforceable Lien on all
other assets and properties of the Borrower and Guarantors described in the
Security Agreement which shall at all times have a collateral loan value (as
determined by the Bank in accordance with its customary standards for commercial
loans and after deducting outstanding obligations secured by a first priority
lien in favor of GECC therein) of not less than Five Million Dollars
($5,000,000). The Borrower further acknowledges and agrees that such Lien on
Cash Collateral shall be a valid and perfected first priority Lien and shall in
the case of all other Collateral be a valid and perfected Lien (subject to the
Allowed Liens as defined in the Security Agreement) as set forth in the
Intercreditor Agreement. The Bank agrees, so long as no Event of Default, or
event which with the lapse of time, the giving of notice or both, would
constitute an Event of Default, shall have occurred and be continuing, upon
request to do so by the Borrower, the Bank shall release its Lien on, and
disburse to the Borrower all sums on deposit in the Cash Collateral Account in
excess of $15,000,000 or such greater amount as shall have been deposited by the
Borrower therein pursuant to Section 9.1(n) hereof. The Bank further agrees that
in the event Borrower either reduces the Revolving Loan Commitment or increases
and maintains the amount of Eligible Cash Collateral to an amount equal to the
existing Revolving Loan Commitment (as set out in Section 9.1(n) hereof) then
the Bank shall terminate its Lien on all Collateral other than the Cash
Collateral Account and all monies on deposit therein.
6.2 Guaranties. The payment and performance of the Obligations shall at
all times be guarantied by the Guarantors pursuant to Section 11 of this
Agreement.
6.3 Further Assurances. The Borrower agrees that it will, and will
cause each Guarantor to, from time to time, execute and deliver such documents
and do such things as Bank may reasonably request in order to provide for or
perfect or protect such Liens on the Collateral.
14
7. REPRESENTATIONS AND WARRANTIES. To induce the Bank to make the Loans, the
Borrower makes, repeats and reaffirms all representations and warranties to the
Bank contained in Section 3 of the Term Facility Agreement (other than Sections
3.6 and 3.17 which are specifically excluded), all of which representations and
warranties (together with all definitions of capitalized terms contained therein
and all related Schedules and Exhibits are herein incorporated by reference
herein, mutatis mutandis, with the same force and effect as if set forth in
their entirety; provided that all references in such Section 3 to (i) "Lenders",
(ii) "Credit Parties" or Credit Party", (iii) "Agent", (iv) "Loan Documents",
(v) "Loans" as defined herein and (vi) "Notes" contained therein shall be deemed
references to the (i) Bank, (ii) Borrower or Obligors, as appropriate, (iii)
Bank, (iv) Loan Documents (v) Loans and (vi) Note, respectively, as such terms
are defined herein, each of which shall be true and correct as of the date of
the execution and delivery of this Agreement, and which shall survive the
execution and delivery of this Agreement.
8. COVENANTS.
8.1 Term Facility Agreement. Borrower hereby agrees that so long as the
Revolving Loan Commitment remains in effect and until all Obligations have been
fully paid and satisfied, Borrower will furnish the Bank with its 10-Q and 10K
statements as filed with the Securities and Exchange Commission and if Borrower
ceases to be a public company then Borrower agrees to furnish Bank comparable
financial statements reasonably acceptable to the Bank and comply with all the
covenants and agreements contained in Sections 1.4, 1.8, 5 (other than Sections
5.4, 5.6, 5.8, 5.9, 5.11 and 5.12 thereof which are specifically excluded) and 6
(other than Sections 6.2, 6.3, 6.4(b), 6.5(b), 6.8, 6.10, 6.11, 6.14 and 6.18
which are specifically excluded) and all related Annexes (other than Annex F and
Annex G which are specifically excluded) of the Term Facility Agreement all of
which covenants and agreements, together with all definitions of capitalized
terms contained therein, are hereby incorporated by reference, mutatis mutardis,
with the same force and effect as if set forth in their entirety; provided that
all references in such provisions to (i) "Lenders", (ii) "Credit Parties" or
"Credit Party", (iii) Agent, (iv) "Loan Documents", (v) "Loans" and (vi) "Notes"
contained therein shall be deemed references to (i) the Bank, (ii) Borrower or
Obligors, as appropriate, (iii) Lender, (iv) Loan Documents, (v) Loans and (vi)
Note, respectively, as such terms are defined herein. The foregoing to the
contrary notwithstanding the Bank agrees that the Borrower's obligations to
provide financial statements contained in any of the hereinabove covenants shall
be deemed satisfied if provided to Bank in its capacity as a lender under the
Term Facility Agreement. In the event the Revolving Credit Commitment is fully
supported by Eligible Cash Collateral, the Borrower shall not be required to
comply with any covenants contained in Section 6 of the Term Facility Agreement
incorporated by reference herein.
8.2 Lockbox Agreement. Within twelve (12) months after the parties'
execution of this Agreement, the Borrower shall direct all of its account
debtors to make all payments on the "Accounts" (as defined in the Security
Agreement) directly to a post
15
office box (the "Lockbox") which shall be subject to the terms and conditions of
the Lockbox Agreement. The Borrower agrees to pay all fees, costs and expenses
which the Bank incurs in connection with opening and maintaining the Lockbox
account and depositing for collection by the Bank any check or other item of
payment received by the Bank. All of such fees, costs and expenses shall
constitute Obligations hereunder, shall be payable to the Bank by the Borrower
upon demand, and, until paid, shall bear interest at the highest rate then
applicable to Revolving Loans hereunder. All checks, drafts, instruments and
other items of payment or proceeds of Collateral shall be endorsed for deposit
with the Bank, and, if that endorsement of any such item shall not be made for
any reason, the Bank is hereby irrevocably authorized to endorse the same on the
Borrower's behalf for deposit into the Borrower's account subject to the terms
of the Lockbox Agreement. For the purpose of this paragraph, the Borrower
irrevocably hereby makes, constitutes and appoints the Bank (and all Persons
designated by the Bank for that purpose) as the Borrower's true and lawful
attorney and agent-in-fact consistent with the terms of the Lockbox Agreement
(i) to endorse the Borrower's name upon said items of payment and/or proceeds of
Collateral and upon any Chattel Paper, document, instrument, invoice or similar
document or agreement relating to any Account of the Borrower or goods
pertaining thereto; (ii) to take control in any manner of any item of payment or
proceeds thereof; and (iii) to have access to any lock box or postal box into
which any of the Borrower's mail is deposited, and open and process all mail
addressed to the Borrower and deposited therein, all in accordance with the
terms of the Lockbox Agreement.
9. EVENTS OF DEFAULT. The Borrower, without notice or demand of any kind, shall
be in default under this Agreement upon the occurrence of any of the following
events (each an "Event of Default").
9.1 Events of Default. The occurrence of any one or more of the
following events (regardless of the reason therefor) shall constitute an "Event
of Default" hereunder:
(a) Borrower or any Guarantor (i) fails to make any payment of
principal of, or interest on, or fees owing in respect of, the Loans or
any of the other Obligations within three (3) Business Days of when
such payment is due and payable, or (ii) fails to pay or reimburse the
Bank for any expense reimbursable hereunder or under any other Loan
Document within ten (10) days following Bank's demand for such
reimbursement or payment of expenses.
(b) Borrower shall fail or neglect to perform, keep or observe
any of the provisions of Sections 1.4, 1.8 or 6 of the Term Facility
Agreement (to the extent incorporated herein by reference) or any of
the provisions set forth in Annex C of the Term Facility Agreement (to
the extent incorporated herein by reference), respectively.
(c) Borrower shall fail or neglect to perform, keep or observe
any of the provisions set forth in Annex E, respectively of the Term
Facility Agreement (as
16
incorporated herein by reference), and the same shall remain unremedied
for five (5) days or more.
(d) Any Obligor shall fail or neglect to perform, keep or
observe any other provision of this Agreement or of any of the other
Loan Documents (other than any provision embodied in or covered by any
other clause of this Section 9.1) and the same shall remain unremedied
for thirty (30) days or more).
(e) A default or breach shall occur under any other agreement,
document or instrument to which any Obligor is a party which is not
cured within any applicable grace period, and such default or breach
(i) involves the failure to make any payment when due in respect of any
Indebtedness (as defined in the Term Facility Agreement) (other than
the Obligations) of any Obligor in excess of $4,000,000 in the
aggregate, or (ii) causes, or permits any holder of such Indebtedness
or a trustee to cause, Indebtedness or a portion thereof in excess of
$4,000,000 in the aggregate to become due prior to its stated maturity
or prior to its regularly scheduled dates of payment.
(f) Any representation or warranty herein or in any Loan
Document or in any written statement, report, financial statement or
certificate made or delivered to Bank by any Obligor is untrue or
incorrect in any material respect as of the date when made or deemed
made.
(g) Assets of any Obligor with a book value of $750,000 or
more shall be attached, seized, levied upon or subjected to a writ or
distress warrant, or come within the possession of any receiver,
trustee, custodian or assignee for the benefit of creditors of any
Obligor and such condition continues for thirty (30) days or more.
(h) A case or proceeding shall have been commenced against any
Obligor seeking a decree or order in respect of any Obligor (I) under
Title 11 of the United States Code, as now constituted or hereafter
amended or any other applicable federal, state or foreign bankruptcy or
other similar law, (ii) appointing a custodian, receiver, liquidator,
assignee, trustee or sequestrator ( or similar official) for any
Obligor or of any substantial part of any such Obligor's assets, or
(iii) ordering the winding-up or liquidation of the affairs of any
Obligor, and such case or proceeding shall remain undismissed or
unstayed for sixty (60) days or more or such court shall enter a decree
or order granting the relief sought in such case or proceeding.
(i) Any Obligor (i) shall file a petition seeking relief under
Title 11 of the United States Code, as now constituted or hereafter
amended, or any other applicable federal, state or foreign bankruptcy
or other similar law, (ii) shall fail to contest in a timely and
appropriate manner or shall consent to the institution of proceeding
thereunder or to the filing of any such petition or to the appointment
of or taking possession by a custodian, receiver, liquidator, assignee,
trustee or
17
sequestrator (or similar official) of any Obligor or any substantial
part of any such Person's assets, (iii) shall made an assignment for
the benefit of creditors, (iv) shall take any corporate action in
furtherance of any of the foregoing; or (v) shall admit in writing its
inability to, or shall be generally unable to, pay its debts as such
debts become due.
(j) A final judgment or judgments for the payment of money
which would result in a Material Adverse Effect (other than a judgment
for which a financially sound and reputable insurer has admitted
liability) shall be rendered against any Obligor and the same shall
not, within sixty (60) days after the entry thereof, have been
discharged or execution thereof stayed or bonded pending appeal, or
shall not have been discharged prior to the expiration of any such
stay.
(k) Any material provision of any Loan Document shall for any
reason cease to be valid, binding and enforceable in accordance with
its terms (or any Obligor shall challenge the enforceability of any
Loan Document or shall assert in writing, or engage in any action or
inaction based on any such assertion that any provision of any of the
Loan Documents has ceased to be or otherwise is not valid, binding and
enforceable in accordance with its terms), or any security interest
created under any Loan Document shall cease to be a valid and perfected
first priority security interest or Lien (except as otherwise permitted
herein or therein) in any of the Collateral purported to be covered
thereby.
(l) Any Change of Control shall occur.
(m) Any event shall occur, whether or not insured or
insurable, as a result of which revenue-producing activities cease or
are substantially curtailed at any facility of Obligors generating more
than 20% of Obligors' consolidated revenues for the fiscal year
preceding such event and such cessation or curtailment continues for
more than twenty (20) days (or if any such event is fully insured,
including business interruption insurance at the levels necessary to
fully compensate such affected Obligor for its losses during such
period, one hundred eighty (180) days) except where such event shall
result in prepayments to the lenders under the Term Facility Agreement.
(n) Any default or breach by any Obligor shall occur and be
continuing under the Term Facility Agreement or the Term Facility
Agreement shall be terminated for any reason; provided however that
termination of the Term Facility Agreement other than as a result of
the occurrence of an Event of Default thereunder shall not be an Event
of Default hereunder if Borrower shall either reduce the Revolving Loan
Commitment to an amount equal to the Eligible Cash Collateral or
increase and maintain the amount of Eligible Cash Collateral to equal
the existing Revolving Loan Commitment..
(o) Any default or breach by any Obligor shall occur and be
continuing under any agreement, including without limitation, any
security agreement,
18
pledge agreement, credit agreement or loan agreement, any note, loan or
lease, including without limitation, any personal property lease, real
property lease, synthetic lease or aircraft lease, or any credit
facility with or in favor of GECC, either individually, or as agent for
others, and any modification, extension, amendment or restatement of
any of the foregoing.
9.2. Term Facility Agreement Amendments. In the event that Section 8.1
of the Term Facility Agreement is amended, the comparable provision of
Section 9.1 of this Agreement shall automatically also be amended in a
manner consistent therewith.
10. REMEDIES. Upon the occurrence of an Event of Default, the Bank shall have
all rights, powers and remedies set forth in the Loan Documents, in any written
agreement or instrument (other than this Agreement or the Loan Documents)
relating to any of the Obligations or any security therefor, or as otherwise
provided at law or in equity. Without limiting the generality of the foregoing,
the Bank may, at its option upon the occurrence of an Event of Default, declare
its commitments to the Borrower to be terminated and all Obligations to be
immediately due and payable, provided, however, that upon the occurrence of an
Event of Default under either Section 9.1(i) or 9.1(h), all commitments of the
Bank to the Borrower shall immediately terminate and all Obligations shall be
automatically due and payable, all without demand, notice or further action of
any kind required on the part of the Bank. The Borrower hereby waives any and
all presentment, demand, notice of dishonor, protest, and all other notices and
demands in connection with the enforcement of Bank's rights under the Loan
Documents, and hereby consents to, and waives notice of release, with or without
consideration, [of any of the Borrower / the Guarantor / any of the Guarantors
or] of any Collateral, notwithstanding anything contained herein or in the Loan
Documents to the contrary.
11. GUARANTY.
11.1 The Guarantees. To induce the Bank to provide the credits
described herein and in consideration of benefits expected to accrue to the
Borrower by reason of the commitment and for other good and valuable
consideration, receipt of which is hereby acknowledged, each Guarantor hereby
unconditionally and irrevocably guarantees jointly and severally to the Bank,
and each other holder of any of the Obligations, the due and punctual payment of
all present and future Obligations evidenced by or arising out of the Loan
Documents, including, but not limited to, the due and punctual payment of
principal of and interest on the Note, and the due and punctual payment of all
other Obligations now or hereafter owed by the Borrower or any other Guarantor
under the Loan Documents as and when the same shall become due and payable,
whether at stated maturity, by acceleration, or otherwise, according to the
terms hereof and thereof, provided that the Borrower shall not be understood to
be a Guarantor of any Obligations with respect to which it is the primary
obligor. In case of failure by the Borrower to timely pay any Obligations
guaranteed hereby, each Guarantor hereby unconditionally agrees to make such
payment or to cause such payment to be timely made as and when
19
the same shall become due and payable, whether at stated maturity, by
acceleration, or otherwise, and as if such payment were made by the Borrower or
such Subsidiary, as the case may be.
11.2 Guarantee Unconditional. The obligations of each Guarantor under
this Section 11 shall be unconditional and absolute and, without limiting the
generality of the foregoing, shall not be released, discharged, or otherwise
affected by:
(a) any extension, renewal, settlement, compromise, waiver, or
release in respect of any Obligation of the Borrower or of any other guarantor
under this Agreement or any other Loan Document or by operation of law or
otherwise;
(b) any modification or amendment of or supplement to this
Agreement or any other Loan Document;
(c) any change in the corporate existence, structure, or
ownership of, or any insolvency, bankruptcy, reorganization, or other similar
proceeding affecting, the Borrower, any other Guarantor, or any of their
respective assets, or any resulting release or discharge of any Obligation of
the Borrower or of any other Guarantor contained in any Loan Document;
(d) the existence of any claim, set-off, or other rights which
the Borrower or any other Guarantor may have at any time against the Bank, or
any other Person, whether or not arising in connection herewith;
(e) any failure to assert, or any assertion of, any claim or
demand or any exercise of, or failure to exercise, any rights or remedies
against the Borrower, any other Guarantor, or any other Person or Property;
(f) any application of any sums by whomsoever paid or
howsoever realized to any obligation of the Borrower, regardless of what
obligations of the Borrower remain unpaid;
(g) any invalidity or unenforceability relating to or against
the Borrower or any other Guarantor for any reason of this Agreement or of any
other Loan Document or any provision of applicable law or regulation purporting
to prohibit the payment by the Borrower or any other Guarantor of the principal
of or interest on the Note or any Loan or any other amount payable under the
Loan Documents; or
(h) any other act or omission to act or delay of any kind by
the Bank, or any other Person or any other circumstance whatsoever that might,
but for the provisions of this paragraph, constitute a legal or equitable
discharge of the obligations of any Guarantor under this Section 11.
11.3 Discharge Only Upon Payment in Full; Reinstatement in Certain
Circumstances. Each Guarantor's obligations under this Section 11 shall remain
in full
20
force and effect until the Revolving Commitment is terminated, all Letters of
Credit have expired, and the principal of and interest on the Note and all other
amounts payable by the Borrower and the Guarantors under this Agreement and all
other Loan Documents and all other Obligations shall have been paid in full. If
at any time any payment of the principal of or interest on the Note or any Loan
or any other amount payable by the Borrower or any Guarantor under the Loan
Documents is rescinded or must be otherwise restored or returned upon the
insolvency, bankruptcy, or reorganization of the Borrower or of any Guarantor,
or otherwise, each Guarantor's obligations under this Section 11 with respect to
such payment shall be reinstated at such time as though such payment had become
due but had not been made at such time.
11.4 Subrogation. Each Guarantor agrees it will not exercise any rights
which it may acquire by way of subrogation by any payment made hereunder, or
otherwise, until all the Obligations shall have been paid in full subsequent to
the termination of all the Revolving Commitment and expiration of all Letters of
Credit. If any amount shall be paid to a Guarantor on account of such
subrogation rights at any time prior to the later of (x) the payment in full of
the Obligations and all other amounts payable by the Borrower hereunder and the
other Loan Documents and (y) the termination of the Revolving Commitment and
expiration of all Letters of Credit, such amount shall be held in trust for the
benefit of the Bank and shall forthwith be paid to the Bank to be credited and
applied upon the Obligations, whether matured or unmatured, in accordance with
the terms of this Agreement.
11.5 Waivers. Each Guarantor irrevocably waives acceptance hereof,
presentment, demand, protest, and any notice not provided for herein, as well as
any requirement that at any time any action be taken by the Bank or any other
Person against the Borrower, another Guarantor, or any other Person.
11.6 Limit on Recovery. Notwithstanding any other provision hereof, the
right of recovery against each Guarantor under this Section 11 shall not exceed
$1.00 less than the lowest amount which would render such Guarantor's
obligations under this Section 11 void or voidable under applicable law,
including without limitation fraudulent conveyance law.
11.7 Stay of Acceleration. If acceleration of the time for payment of
any amount payable by the Borrower under this Agreement or any other Loan
Document is stayed upon the insolvency, bankruptcy, or reorganization of the
Borrower, all such amounts otherwise subject to acceleration under the terms of
this Agreement or the other Loan Documents shall nonetheless be payable by the
Guarantors hereunder forthwith on demand by the Bank.
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12. MISCELLANEOUS.
12.1 Obligations Absolute. None of the following shall affect the
Obligations of the Borrower to the Bank under this Agreement or the Bank's
rights with respect to the Collateral:
(a) acceptance or retention by the Bank of other property or
any interest in property as security for the Obligations;
(b) release by the Bank of all or any part of the Collateral
or of any party liable with respect to the Obligations;
(c) release, extension, renewal, modification or substitution
by the Bank of the Note, or any note evidencing any of the Obligations, or the
compromise of the liability of the Obligations; or
(d) failure of the Bank to resort to any other security or to
pursue the Borrower or any other obligor liable for any of the Obligations
before resorting to remedies against the Collateral.
12.2 Entire Agreement. This Agreement and the other Loan Documents (i)
are valid, binding and enforceable against the Borrower, the Guarantors and the
Bank in accordance with their provisions and no conditions exist as to their
legal effectiveness; (ii) constitutes the entire agreement between the parties;
and (iii) are the final expression of the intentions of the Borrower, the
Guarantors and the Bank. No promises, either expressed or implied, exist between
the Borrower, and Guarantor and the Bank, unless contained herein. This
Agreement supersedes all negotiations, representations, warranties, commitments,
offers, contracts (of any kind or nature, whether oral or written) prior to or
contemporaneous with the execution hereof.
12.3 Amendments; Waivers. No amendment, modification, termination,
discharge or waiver of any provision of this Agreement or of the Loan Documents,
or consent to any departure by the Borrower or any Guarantor therefrom, shall in
any event be effective unless the same shall be in writing and signed by the
Bank, and then such waiver or consent shall be effective only for the specific
purpose for which given.
12.4 INTENTIONALLY OMITTED
12.5 WAIVER OF JURY TRIAL. THE BANK, THE BORROWER AND GUARANTORS, AFTER
CONSULTING OR HAVING HAD THE OPPORTUNITY TO CONSULT WITH COUNSEL, EACH
KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE IRREVOCABLY, THE RIGHT TO TRIAL
BY JURY WITH RESPECT TO ANY LEGAL PROCEEDING BASED HEREON, OR ARISING OUT OF,
UNDER OR IN CONNECTION WITH THIS AGREEMENT, THE NOTE OR ANY OF THE OTHER
OBLIGATIONS, THE COLLATERAL, OR ANY OTHER AGREEMENT EXECUTED OR CONTEMPLATED TO
BE EXECUTED IN
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CONJUNCTION WITH THIS AGREEMENT, OR ANY COURSE OF CONDUCT OR COURSE OF DEALING
IN WHICH THE BANK, THE BORROWER AND GUARANTORS ARE ADVERSE PARTIES. THIS
PROVISION IS A MATERIAL INDUCEMENT FOR THE BANK GRANTING ANY FINANCIAL
ACCOMMODATION TO THE BORROWER.
12.6 LITIGATION. TO INDUCE THE BANK TO MAKE THE LOANS, EACH OF THE
BORROWER AND EACH GUARANTOR IRREVOCABLY AGREES THAT ALL ACTIONS ARISING,
DIRECTLY OR INDIRECTLY, AS A RESULT OR CONSEQUENCE OF THIS AGREEMENT, THE NOTE,
ANY OTHER AGREEMENT WITH THE BANK OR THE COLLATERAL, SHALL BE INSTITUTED AND
LITIGATED ONLY IN COURTS HAVING THEIR SITUS IN THE CITY OF CHICAGO, ILLINOIS.
EACH OF THE BORROWER AND EACH GUARANTOR HEREBY CONSENTS TO THE EXCLUSIVE
JURISDICTION AND VENUE OF ANY STATE OR FEDERAL COURT HAVING ITS SITUS IN SAID
CITY, AND WAIVES ANY OBJECTION BASED ON FORUM NON CONVENIENS. EACH OF THE
BORROWER AND EACH GUARANTOR HEREBY WAIVES PERSONAL SERVICE OF ANY AND ALL
PROCESS AND CONSENTS THAT ALL SUCH SERVICE OF PROCESS MAY BE MADE BY CERTIFIED
MAIL, RETURN RECEIPT REQUESTED, DIRECTED TO THE BORROWER AND GUARANTORS AS SET
FORTH HEREIN IN THE MANNER PROVIDED BY APPLICABLE STATUTE, LAW, RULE OF COURT OR
OTHERWISE.
12.7 Assignability. The Bank shall not assign its rights in this
Agreement, the Note, the Obligations, or any part thereof and transfer the
Bank's rights in any or all of the Collateral provided that the foregoing shall
not prohibit any pledge or grant to a Federal Reserve Bank to secure obligations
of the Bank or the sale of one or more participations in the Loans. The Borrower
may not sell or assign this Agreement, or any other agreement with the Bank or
any portion thereof, either voluntarily or by operation of law, without the
prior written consent of the Bank. This Agreement shall be binding upon the Bank
and the Borrower and their respective legal representatives and successors. All
references herein to the Borrower shall be deemed to include any successors,
whether immediate or remote.
12.8 Confidentiality. The Borrower and the Bank hereby agree and
acknowledge that any and all information relating to the Borrower which is (i)
furnished by the Borrower to the Bank (or to any affiliate of the Bank), and
(ii) non-public, confidential or proprietary in nature, shall be kept
confidential by the Bank or such affiliate in accordance with applicable law,
provided, however, that such information and other credit information relating
to the Borrower may be distributed by the Bank or such affiliate to the Bank's
or such affiliate's directors, officers, employees, attorneys, affiliates,
auditors and regulators, and upon the order of a court or other governmental
agency having jurisdiction over the Bank or such affiliate, to any other party.
The Borrower and the Bank further agree that this provision shall survive the
termination of this Agreement.
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12.9 Binding Effect. This Agreement shall become effective upon
execution by the Borrower and the Bank. If this Agreement is not dated or
contains any blanks when executed by the Borrower, the Bank is hereby
authorized, without notice to the Borrower, to date this Agreement as of the
date when it was executed by the Borrower, and to complete any such blanks
according to the terms upon which this Agreement is executed.
12.10 Governing Law. This Agreement, the Loan Documents and the Note
shall be delivered and accepted in and shall be deemed to be contracts made
under and governed by the internal laws of the State of Illinois (but giving
effect to federal laws applicable to national banks), and for all purposes shall
be construed in accordance with the laws of such State, without giving effect to
the choice of law provisions of such State.
12.11 Enforceability. Wherever 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,
unenforceable or invalid under any jurisdiction, such provision shall as to such
jurisdiction, be severable and be ineffective to the extent of such prohibition
or invalidity, without invalidating the remaining provisions of this Agreement
or affecting the validity or enforceability of such provision in any other
jurisdiction.
12.12 Survival of Borrower Representations. All covenants, agreements,
representations and warranties made by the Borrower herein shall,
notwithstanding any investigation by the Bank, be deemed material and relied
upon by the Bank and shall survive the making and execution of this Agreement
and the Loan Documents and the issuance of the Note, and shall be deemed to be
continuing representations and warranties until such time as the Borrower has
fulfilled all of its Obligations to the Bank, and the Bank has been paid in
full. The Bank, in extending financial accommodations to the Borrower, is
expressly acting and relying on the aforesaid representations and warranties.
12.13 Extensions of Bank's Commitment and Note. This Agreement shall
secure and govern the terms of any extensions or renewals of the Bank's
commitment hereunder and the Note[s] pursuant to the execution of any
modification, extension or renewal note executed by the Borrower and accepted by
the Bank in its sole and absolute discretion in substitution for the Note.
12.14 Time of Essence. Time is of the essence in making payments of all
amounts due the Bank under this Agreement and in the performance and observance
by the Borrower of each covenant, agreement, provision and term of this
Agreement.
12.15 Counterparts. This Agreement may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed and delivered shall be deemed to be an original and all
of which taken together shall constitute one and the same instrument.
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12.16 Facsimile Signatures. The Bank is hereby authorized to rely upon
and accept as an original any Loan Documents or other communication which is
sent to the Bank by facsimile, telegraphic or other electronic transmission
(each, a "Communication") which the Bank in good faith believes has been signed
by Borrower and has been delivered to the Bank by a properly authorized
representative of the Borrower, whether or not that is in fact the case.
Notwithstanding the foregoing, the Bank shall not be obligated to accept any
such Communication as an original and may in any instance require that an
original document be submitted to the Bank in lieu of, or in addition to, any
such Communication.
12.17 Notices. Except as otherwise provided herein, the Borrower waives
all notices and demands in connection with the enforcement of the Bank's rights
hereunder. All notices, requests, demands and other communications provided for
hereunder shall be in writing, sent by certified or registered mail, postage
prepaid, by facsimile, telegram or delivered in person, and addressed as
follows:
If to the Borrower:
Titan International, Inc.
0000 Xxxxxx Xxxxxx
Xxxxxx, Xxxxxxxx 00000
Attention: Xxxxx X. Xxxxxx, Vice President and
General Counsel
With a copy to:
Xxxxxxx X. XxXxxxxx
Schmiedeskamp, Robertson, Neu and Xxxxxxxx
000 Xxxxxx Xxxxxx
X.X. Xxx 0000
Xxxxxx, Xxxxxxxx 00000
If to the Bank:
LaSalle Bank National Association
000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx Xxxx
Facsimile: 000-000-0000
or, as to each party, at such other address as shall be designated by
such party in a written notice to each other party complying as to delivery with
the terms of this subsection. No notice to or demand on the Borrower in any case
shall entitle the Borrower to any other or further notice or demand in similar
or other circumstances.
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12.18 Indemnification. The Borrower agrees to defend (with counsel
satisfactory to the Bank), protect, indemnify and hold harmless each Indemnified
Party from and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, claims, costs, expenses and distributions
of any kind or nature (including, without limitation, the disbursements and the
reasonable fees of counsel for each Indemnified Party thereto, which shall also
include, without limitation, reasonable attorneys' fees and time charges of
attorneys who may be employees of the Bank, any parent corporation or affiliated
corporation of the Bank), which may be imposed on, incurred by, or asserted
against, any Indemnified Party (whether direct, indirect or consequential and
whether based on any federal, state or local laws or regulations, including,
without limitation, securities and commercial laws and regulations, under common
law or in equity, or based on contract or otherwise) in any manner relating to
or arising out of this Agreement or any of the Loan Documents, or any act, event
or transaction related or attendant thereto, the preparation, execution and
delivery of this Agreement and the Loan Documents, including, but not limited
to, the making or issuance and management of the Loans, the use or intended use
of the proceeds of the Loans, the enforcement of the Bank's rights and remedies
under this Agreement, the other Loan Documents, the Note, any other instruments
and documents delivered hereunder, or under any other agreement between the
Borrower and the Bank; provided, however, that the Borrower shall not have any
obligations hereunder to any Indemnified Party with respect to matters caused by
or resulting from the willful misconduct or gross negligence of such Indemnified
Party. To the extent that the undertaking to indemnify set forth in the
preceding sentence may be unenforceable because it violates any law or public
policy, the Borrower shall satisfy such undertaking to the maximum extent
permitted by applicable law. Any liability, obligation, loss, damage, penalty,
cost or expense covered by this indemnity shall be paid to each Indemnified
Party on demand, and, failing prompt payment, shall, together with interest
thereon at the Default Rate from the date incurred by each Indemnified Party
until paid by the Borrower, be added to the Obligations of the Borrower and be
secured by the Collateral. The provisions of this Section 12.18 shall survive
the satisfaction and payment of the other Obligations and the termination of
this Agreement for a period of seven (7) years thereafter.
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