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EXHIBIT 4.27
Financing and Security Agreement
Dated May 29, 1998
By and Between
WALBRO CORPORATION and Subsidiaries
and
NationsBank, N. A., as Administrative Agent and Lender
2
FINANCING AND SECURITY AGREEMENT 1
RECITALS 1
AGREEMENTS 1
ARTICLE I DEFINITIONS 1
SECTION 1.1 CERTAIN DEFINED TERMS. 1
SECTION 1.2 ACCOUNTING TERMS AND OTHER DEFINITIONAL PROVISIONS. 29
ARTICLE II THE CREDIT FACILITIES 30
SECTION 2.1 THE REVOLVING CREDIT FACILITY. 30
2.1.1 Revolving Credit Facility. 30
2.1.2 Procedure for Making Advances Under the Revolving Loans; Lender Protection Loans. 31
2.1.3 Borrowing Base. 33
2.1.4 Borrowing Base Report. 34
2.1.5 Revolving Credit Notes. 34
2.1.6 Mandatory Prepayments of Revolving Loan. 35
2.1.7 Optional Prepayments of Revolving Loan. 35
2.1.8 The Collateral Accounts. 35
2.1.9 Revolving Loan Account. 37
2.1.10 Revolving Credit Unused Line Fee. 37
2.1.11 Early Termination Fee. 38
2.1.12 Required Availability under the Revolving Credit Facility. 39
SECTION 2.2 THE LETTER OF CREDIT FACILITY. 39
2.2.1 Letters of Credit. 39
2.2.2 Letter of Credit Fees. 40
2.2.3 Terms of Letters of Credit; Post-Expiration Date Letters of Credit. 40
2.2.4 Procedures for Letters of Credit. 42
2.2.5 Payments of Letters of Credit. 42
2.2.6 Change in Law; Increased Cost. 43
2.2.7 General Letter of Credit Provisions. 44
2.2.8 Participations in the Letters of Credit. 45
2.2.9 Payments by the Lenders to the Appropriate Letter of Credit Issuer. 45
SECTION 2.3 MULTI-CURRENCY PARTICIPATIONS. 47
2.3.1 Multi-Currency Participants. 47
2.3.2 Representations of Multi-Currency Lender and Multi-Currency Letter of Credit Issuer. 48
2.3.3 Standing of Multi-Currency Participant. 49
2.3.4 Reports of Multi-Currency Agent 49
SECTION 2.4 THE CAPITAL EXPENDITURE LINE FACILITY. 50
2.4.1 Capital Expenditure Line Facility. 50
2.4.2 Procedure for Making Advances Under the Capital Expenditure Line. 50
2.4.3 Capital Expenditure Line Notes. 51
2.4.4 Payments of Capital Expenditure Line. 52
2.4.5 Optional Prepayments of Capital Expenditure Line. 52
2.4.6 Application of Capital Expenditure Line Partial Prepayments. 52
SECTION 2.5 INTEREST. 53
2.5.1 Applicable Interest Rates. 53
2.5.2 Selection of Interest Rates. 54
2.5.3 Inability to Determine Eurodollar Base Rate. 56
2.5.4 Indemnity. 56
2.5.5 Payment of Interest. 57
SECTION 2.6 GENERAL FINANCING PROVISIONS. 57
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2.6.1 Borrowers' Representatives. 57
2.6.2 Computation of Interest and Fees. 59
2.6.3 Liens; Setoff. 59
2.6.4 Requirements of Law. 60
2.6.5 Administrative Agency Fees. 60
2.6.6 Origination Fee. 60
2.6.7 Funds Transfer Services. 60
2.6.8 Guaranty. 62
SECTION 2.7 SETTLEMENT AMONG LENDERS. 65
2.7.1 Capital Expenditure Line. 65
2.7.2 Revolving Loan. 65
2.7.3 Settlement Procedures as to Revolving Loan. 65
2.7.4 Settlement of Other Obligations. 68
2.7.5 Presumption of Payment. 69
SECTION 2.8 ASSESSMENTS; WITHHOLDING. 70
2.8.1 Payment of Assessments. 70
2.8.2 Indemnification. 70
2.8.3 Receipts. 71
2.8.4 Foreign Bank Certifications. 71
ARTICLE III THE COLLATERAL 73
SECTION 3.1 DEBT AND OBLIGATIONS SECURED. 73
SECTION 3.2 GRANT OF LIENS. 73
SECTION 3.3 COLLATERAL DISCLOSURE LIST. 74
SECTION 3.4 ADDITIONAL COLLATERAL. 74
SECTION 3.5 RECORD SEARCHES. 75
SECTION 3.6 COSTS. 75
SECTION 3.7 RELEASE. 75
SECTION 3.8 INCONSISTENT PROVISIONS. 76
ARTICLE IV REPRESENTATIONS AND WARRANTIES 76
SECTION 4.1 REPRESENTATIONS AND WARRANTIES. 76
4.1.1 Subsidiaries. 76
4.1.2 Good Standing. 76
4.1.3 Power and Authority. 76
4.1.4 Binding Agreements. 77
4.1.5 No Conflicts. 77
4.1.6 No Defaults, Violations. 77
4.1.7 Compliance with Laws. 77
4.1.8 Margin Stock. 77
4.1.9 Investment Company Act; Margin Securities. 78
4.1.10 Litigation. 78
4.1.11 Financial Condition. 78
4.1.12 Full Disclosure. 78
4.1.13 Indebtedness for Borrowed Money. 79
4.1.14 Subordinated Debt. 79
4.1.15 Taxes.
4.1.16 ERISA.
4.1.17 Title to Properties. 80
4.1.18 Patents, Trademarks, Etc. 80
4.1.19 Employee Relations. 80
4.1.20 Presence of Hazardous Materials or Hazardous Materials Contamination. 81
4.1.21 Perfection and Priority of Collateral. 81
4.1.22 Places of Business and Location of Collateral. 81
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4.1.23 Business Names and Addresses. 82
4.1.24 Capital Expenditure Line Equipment. 82
4.1.25 Inventory. 82
4.1.26 Accounts. 82
4.1.27 Assigned Local Currency Receivables. 82
4.1.28 Compliance with Eligibility Standards. 83
4.1.29 Year 2000 Compliance 83
SECTION 4.2 SURVIVAL; UPDATES OF REPRESENTATIONS AND WARRANTIES. 83
ARTICLE V CONDITIONS PRECEDENT 84
SECTION 5.1 CONDITIONS TO THE INITIAL ADVANCE AND INITIAL LETTER
OF CREDIT. 84
5.1.1 Organizational Documents - Domestic Borrowers. 84
5.1.2 Opinion of Domestic Borrowers' Counsel. 85
5.1.3 Opinion of Local Currency Borrowers' Counsel. 85
5.1.4 Consents, Licenses, Approvals, Etc. 85
5.1.5 Notes. 85
5.1.6 Financing Documents and Collateral. 85
5.1.7 Additional Financial Matters. 86
5.1.8 Solvency Certificate. 86
5.1.9 Other Financing Documents. 86
5.1.10 Other Documents, Etc. 86
5.1.11 Payment of Fees. 86
5.1.12 Collateral Disclosure List. 86
5.1.13 Recordings and Filings. 86
5.1.14 Insurance Certificate. 87
5.1.15 Landlord's Waivers. 87
5.1.16 Bailee Acknowledgements. 87
5.1.17 Field Examination. 87
5.1.18 Stock Certificates and Stock Powers. 87
5.1.19 Collateral Account Acknowledgments. 87
SECTION 5.2 CONDITIONS TO ADVANCES AND LETTERS OF CREDIT FOR
LOCAL CURRENCY BORROWERS. 87
5.2.1 Organizational Documents - Local Currency Borrowers. 88
5.2.2 Opinion of Local Currency Borrowers' Counsel. 89
5.2.3 Consents, Licenses, Approvals, Etc. 89
SECTION 5.3 CONDITIONS TO MULTI-CURRENCY LOANS AND MULTI-CURRENCY
LETTERS OF CREDIT. 89
SECTION 5.4 CONDITIONS TO ALL EXTENSIONS OF CREDIT. 89
5.4.1 Compliance. 89
5.4.2 Borrowing Base. 89
5.4.3 Default. 90
5.4.4 Representations and Warranties. 90
5.4.5 Adverse Change. 90
5.4.6 Legal Matters. 90
ARTICLE VI COVENANTS OF THE BORROWERS 90
SECTION 6.1 AFFIRMATIVE COVENANTS. 90
6.1.1 Financial Statements. 90
6.1.2 Reports to SEC and to Stockholders. 93
6.1.3 Recordkeeping, Rights of Inspection, Field Examination, Etc. 93
6.1.4 Corporate Existence. 94
6.1.5 Compliance with Laws. 94
6.1.6 Preservation of Properties. 94
6.1.7 Line of Business. 94
6.1.8 Insurance. 95
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6.1.9 Taxes. 95
6.1.10 ERISA. 95
6.1.11 Notification of Events of Default and Adverse Developments. 96
6.1.12 Hazardous Materials; Contamination. 97
6.1.13 Disclosure of Significant Transactions. 97
6.1.14 Financial Covenants. 98
6.1.15 Collection of Receivables. 98
6.1.16 Assignments of Receivables. 99
6.1.17 Government Accounts. 99
6.1.18 Notice of Returned Goods, etc. 100
6.1.19 Inventory. 100
6.1.20 Insurance With Respect to Capital Expenditure Line Equipment and Inventory. 100
6.1.21 Maintenance of the Collateral. 101
6.1.22 Assigned Local Currency Receivables 101
6.1.23 Capital Expenditure Line Equipment. 101
6.1.24 Defense of Title and Further Assurances. 102
6.1.25 Business Names; Locations. 102
6.1.26 Subsequent Opinion of Counsel as to Recording Requirements. 103
6.1.27 Use of Premises and Equipment. 103
6.1.28 Protection of Collateral. 103
SECTION 6.2 NEGATIVE COVENANTS. 104
6.2.1 Mergers, Acquisition or Sale of Assets. 104
6.2.2 Subsidiaries. 104
6.2.3 Purchase or Redemption of Securities, Dividend Restrictions. 104
6.2.4 Indebtedness for Borrowed Money. 104
6.2.5 Investments, Loans and Other Transactions. 105
6.2.6 Stock of Subsidiaries. 106
6.2.7 Subordinated Indebtedness. 106
6.2.8 Liens. 107
6.2.9 Transactions with Affiliates. 107
6.2.10 Other Businesses. 107
6.2.11 ERISA Compliance. 107
6.2.12 Prohibition on Hazardous Materials. 108
6.2.13 Method of Accounting; Fiscal Year. 108
6.2.14 Compensation. 108
6.2.15 Transfer of Collateral. 108
6.2.16 Sale and Leaseback. 108
6.2.17 Disposition of Collateral. 109
ARTICLE VII DEFAULT AND RIGHTS AND REMEDIES 109
SECTION 7.1 EVENTS OF DEFAULT. 109
7.1.1 Failure to Pay. 109
7.1.2 Breach of Representations and Warranties. 109
7.1.3 Failure to Comply with Covenants. 109
7.1.4 Default Under Other Financing Documents or Obligations. 110
7.1.5 Receiver; Bankruptcy. 110
7.1.6 Involuntary Bankruptcy, etc. 110
7.1.7 Judgment. 111
7.1.8 Execution; Attachment. 111
7.1.9 Default Under Other Borrowings. 111
7.1.10 Challenge to Agreements. 111
7.1.11 Material Adverse Change. 111
7.1.12 Liquidation, Termination, Dissolution, Change in Control etc. 111
7.1.13 Change in Control. 112
SECTION 7.2 REMEDIES. 112
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7.2.1 Acceleration. 112
7.2.2 Further Advances. 112
7.2.3 Uniform Commercial Code. 112
7.2.4 Specific Rights With Regard to Collateral. 113
7.2.5 Application of Proceeds. 115
7.2.6 Performance by Administrative Agent. 115
7.2.7 Other Remedies. 115
ARTICLE VIII THE AGENT 116
SECTION 8.1 APPOINTMENT. 116
SECTION 8.2 NATURE OF DUTIES. 116
8.2.1 In General 116
8.2.2 Express Authorization 117
SECTION 8.3 RIGHTS, EXCULPATION, ETC. 118
SECTION 8.4 RELIANCE. 119
SECTION 8.5 INDEMNIFICATION. 119
SECTION 8.6 NATIONSBANK INDIVIDUALLY. 119
SECTION 8.7 SUCCESSOR ADMINISTRATIVE AGENT. 120
8.7.1 Resignation. 120
8.7.2 Appointment of Successor. 120
8.7.3 Successor Agents. 120
SECTION 8.8 COLLATERAL MATTERS. 121
8.8.1 Release of Collateral, Guaranties. 121
8.8.2 Confirmation of Authority, Execution of Releases. 122
8.8.3 Absence of Duty. 122
SECTION 8.9 AGENCY FOR PERFECTION. 123
SECTION 8.10 EXERCISE OF REMEDIES. 123
SECTION 8.11 CONSENTS. 123
SECTION 8.12 DISSEMINATION OF INFORMATION. 123
SECTION 8.13 DISCRETIONARY ADVANCES. 124
ARTICLE IX MISCELLANEOUS 124
SECTION 9.1 NOTICES. 124
SECTION 9.2 AMENDMENTS; WAIVERS. 125
9.2.1 In General. 125
9.2.2 Circumstances Where Consent of all of the Lenders is Required. 126
SECTION 9.3 CUMULATIVE REMEDIES. 127
SECTION 9.4 SEVERABILITY. 128
SECTION 9.5 ASSIGNMENTS BY LENDERS. 128
SECTION 9.6 PARTICIPATIONS BY LENDERS. 129
SECTION 9.7 DISCLOSURE OF INFORMATION BY LENDERS. 129
SECTION 9.8 SUCCESSORS AND ASSIGNS. 129
SECTION 9.9 CONTINUING AGREEMENTS. 129
SECTION 9.10 ENFORCEMENT COSTS. 130
SECTION 9.11 APPLICABLE LAW; JURISDICTION. 130
9.11.1 Applicable Law. 130
9.11.2 Submission to Jurisdiction. 131
9.11.3 Appointment of Administrative Agent for Service of Process. 131
9.11.4 Service of Process. 131
SECTION 9.12 DUPLICATE ORIGINALS AND COUNTERPARTS. 131
SECTION 9.13 HEADINGS. 132
SECTION 9.14 NO AGENCY. 132
SECTION 9.15 DATE OF PAYMENT. 132
SECTION 9.16 ENTIRE AGREEMENT. 132
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SECTION 9.17 WAIVER OF TRIAL BY JURY. 132
SECTION 9.18 LIABILITY OF THE ADMINISTRATIVE AGENT AND THE LENDERS. 133
SECTION 9.19 INDEMNIFICATION. 133
SECTION 9.20 CONFIDENTIALITY. 134
LIST OF SCHEDULES 138
SCHEDULE 1.1-A DOMESTIC BORROWERS 138
SCHEDULE 1.1-B LOCAL CURRENCY BORROWERS 138
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FINANCING AND SECURITY AGREEMENT
THIS FINANCING AND SECURITY AGREEMENT (this "Agreement") is made this
29th day of May, 1998, by and among WALBRO CORPORATION, a corporation organized
under the laws of the State of Delaware (the "Parent"), and each corporation
identified on Schedule 1.1-A attached to and made a part of this Agreement (each
a "Domestic Borrower," collectively, the "Domestic Borrowers"), jointly and
severally (each of Parent and each Domestic Borrower, a "Borrower"; Parent and
the Domestic Borrowers collectively, the "Borrowers"); and NATIONSBANK, N. A., a
national banking association ("NationsBank"), and each other Person which is a
party to this Agreement whether by execution of this Agreement or otherwise as a
lender (collectively, the "Lenders" and individually, a "Lender"); NATIONSBANK,
N. A., a national banking association, in its capacity as both collateral and
administrative agent for each of the Lenders (the "Administrative Agent").
RECITALS
A. The Borrowers have applied to the Lenders for credit
facilities consisting of (i) a revolving credit facility in the maximum
principal amount of $125,000,000 and (iii) a capital expenditure line facility
in the maximum principal amount of $25,000,000, to be used by the Borrowers for
the Permitted Uses described in this Agreement.
B. The Lenders severally are willing to make those credit
facilities available jointly and severally to the Borrowers upon the terms and
subject to the conditions set forth in this Agreement.
AGREEMENTS
NOW, THEREFORE, in consideration of the premises and for other good and
valuable consideration, the receipt of which is hereby acknowledged, the parties
hereby agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1 Certain Defined Terms.
As used in this Agreement, the terms defined in the Preamble and
Recitals hereto shall have the respective meanings specified therein, and the
following terms shall have the following meanings:
"Account" individually and "Accounts" collectively mean all presently
existing or hereafter acquired or created accounts, accounts receivable,
contract rights, notes, drafts, instruments, acceptances, chattel paper, leases
and writings evidencing a monetary obligation or a security interest in, or a
lease of, goods, all rights to receive the payment of money or other
consideration under present or future contracts (including, without limitation,
all rights to receive payments under presently existing or hereafter acquired or
created letters of credit), or by virtue
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of merchandise sold or leased, services rendered, loans and advances made or
other considerations given, by or set forth in or arising out of any present or
future chattel paper, note, draft, lease, acceptance, writing, bond, insurance
policy, instrument, document or general intangible, and all extensions and
renewals of any thereof, all rights under or arising out of present or future
contracts, agreements or general interest in merchandise which gave rise to any
or all of the foregoing, including all goods, all claims or causes of action now
existing or hereafter arising in connection with or under any agreement or
document or by operation of law or otherwise, all collateral security of any
kind (including, without limitation, real property mortgages and deeds of trust)
and letters of credit given by any Person with respect to any of the foregoing,
all books and records in whatever media (paper, electronic or otherwise)
recorded or stored, with respect to any or all of the foregoing and all
equipment and general intangibles necessary or beneficial to retain, access
and/or process the information contained in those books and records, and all
proceeds (cash and non-cash) of the foregoing.
"Account Debtor" means any Person who is obligated on a Receivable and
"Account Debtors" mean all Persons who are obligated on the Receivables.
"Additional Borrower" means each Person that has executed and delivered
an Additional Borrower Joinder Supplement that has been accepted and approved by
the Administrative Agent.
"Additional Borrower Joinder Supplement" means an Additional Borrower
Joinder Supplement in substantially the form attached hereto as Exhibit A, with
the blanks appropriately completed and executed and delivered by the Additional
Borrower and accepted by the Parent on behalf of the Borrowers.
"Administrative Agency Fee" and "Administrative Agency Fees" have the
meanings described in Section 2.6.5 (Administrative Agency Fees).
"Affiliate" means, with respect to any designated Person, any other
Person, (a) directly or indirectly controlling, directly or indirectly
controlled by, or under direct or indirect common control with the Person
designated, (b) directly or indirectly owning or holding five percent (5%) or
more of any equity interest in such designated Person, or (c) five percent (5%)
or more of whose stock or other equity interest is directly or indirectly owned
or held by such designated Person. For purposes of this definition, the term
"control" (including with correlative meanings, the terms "controlling",
"controlled by" and "under common control with") means the possession, directly
or indirectly, of the power to direct or cause the direction of the management
and policies of a Person, whether through ownership of voting securities or
other equity interests or by contract or otherwise.
"Administrative Agent" means the Person defined as the "Administrative
Agent" in the preamble of this Agreement and shall also include any successor
Administrative Agent appointed pursuant to Section 8.7.3 (Successor Agents).
"Agent" means the reference to the Administrative Agent, the
Syndication Agent, the Multi-Currency Agent, or any other Person designated from
time to time as an "Agent" under this Agreement, as the case may be and each of
their respective successors and assigns; and "Agent" means each of the
Administrative Agent, the Syndication Agreement, the Multi-
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Currency Agent and any other Person designated as an "Agent" under this
Agreement and each of their respective successors and assigns.
"Agents' Obligations" means the collective reference to any and all
Obligations payable solely to and for the exclusive benefit of any one or more
of the Agents by any or all of the Borrowers under the terms of this Agreement
and/or any of the other Financing Documents, including, without limitation,
Interest Rate Exposure, Foreign Exchange Exposure, the Origination Fee, any and
all Letter of Credit Fronting Fees, and/or Administrative Agency Fees.
"Agreement" means this Financing and Security Agreement, as amended,
restated, supplemented or otherwise modified in writing in accordance with the
provisions of Section 9.2 (Amendments; Waivers).
"Applicable Interest Rate" means (a) the Eurodollar Rate, or (b) the
Base Rate.
"Applicable Margin" means the applicable rate per annum added, as set
forth in Section 2.5.1 (Applicable Interest Rates), to the Eurodollar Base Rate
or the Prime Rate.
"Appropriate Letter of Credit Issuer" means, at any time, with respect
to matters relating to US Letters of Credit, the US Letter of Credit Issuer and,
with respect to matters relating to Multi-Currency Letters of Credit issued for
the account of any Local Currency Borrower, the Multi-Currency Letter of Credit
Issuer.
"Appropriate Notice Office" shall mean with respect (i) to US Revolving
Loans and US Letters of Credit and funding of participations in Multi-Currency
Revolving Loans or Current Letter of Credit Obligations, the office of the
Administrative Agent located at 000 Xxxxx Xxxxxxx Xxxxxx, 0xx Xxxxx, Xxxxxxxxx,
Xxxxxxxx 00000, Attention: Xxxxx X. Xxxxxx, or such other office or person as
the Administrative Agent may designate to the Borrowers and the Lenders from
time to time and (ii) Multi-Currency Revolving Loans and Multi-Currency Letters
of Credit denominated in any Currency, the office of the Multi-Currency Agent as
the Multi-Currency Agent may designate to the Local Currency Borrowers and the
Lenders from time to time.
"Appropriate Payment Office" shall mean with respect (i) to US
Revolving Loans, US Letters of Credit and funding of participations in
Multi-Currency Revolving Loans or Current Letter of Credit Obligations, the
office of the Administrative Agent located at 000 Xxxxx Xxxxxxx Xxxxxx, 0xx
Xxxxx, Xxxxxxxxx, Xxxxxxxx 00000, Attention: Xxxxx X. Xxxxxx or such other
office or person as the Administrative Agent may designate to the Borrowers and
the Lenders from time to time, and (ii) Multi-Currency Revolving Loans and
Multi-Currency Letters of Credit denominated in any Currency, the office of the
Multi-Currency Agent as the Multi-Currency Agent may designate to the Local
Currency Borrowers and the Lenders from time to time.
"Approved Foreign Currency" means each of Irish Pounds, Pounds
Sterling, French Francs, German Marks, Japanese Yen, Belgian Francs and such
other currencies as shall be agreed among the relevant Local Currency Borrower,
the Parent, the Multi-Currency Agent and the Agent from time to time and shall
also mean, as applicable, the European Monetary Unit or such other European
common currency unit equivalent thereof.
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"Assessments" has the meaning set forth in Section 2.8.1(a).
"Assets" means at any date all assets that, in accordance with GAAP
consistently applied, should be classified as assets on a consolidated balance
sheet of the Borrowers and their respective Subsidiaries.
"Assigned Local Currency Receivable" means each account of a Local
Currency Borrower (a) which is the subject of an assignment which (i) is valid,
binding and enforceable according to its terms, (ii) assigns to the Parent
absolutely all right, title and interest in the Account free and clear of all
claims of creditors, the Local Currency Borrower (including, without limitation,
its successors, assigns, and others who at any time derive any interest from the
Account Debtor) Governmental Authority and all other Persons whatsoever, and
(iii) entitles the Parent under all applicable Laws to collect and enforce the
Account directly against the Account Debtor without any limitation whatsoever
(including, without limitation, any requirement for notice or filing) which has
not been accomplished, (b) which is subject to no Liens other than Liens arising
under the Security Documents, (c) the assignment of which complies with all
applicable Laws and does not constitute a breach of any agreement of the Local
Currency Borrower, the Parent or any of the other Borrowers, and (d) which
immediately upon assignment is subject to a Lien in favor of the Administrative
Agent, for the benefit of the Lenders ratably and the Agents, which Lien is
perfected as to the account by the filing of financing statements in the State
of Michigan naming the Parent only as debtor and which Lien constitutes a first
priority security interest and Lien.
"Assignee" means any Person to which any Lender assigns all or any
portion of its interests under this Agreement, any Commitment, and any Loan, in
accordance with the provisions of Section 9.5 (Assignments by Lenders), together
with any and all successors and assigns of such Person; "Assignees" means the
collective reference to all Assignees.
"Assignments of Patents" means the collective reference to each
collateral assignment of patents, as the same may be amended, modified,
restated, substituted, extended and renewed at any time and from time to time,
from the Parent to the Administrative Agent for the benefit of the Lenders
ratably and the Agents.
"Assignments of Purchase Agreement" means the collective reference to
each collateral assignment of Purchase Agreement, as the same may be amended,
modified, restated, substituted, extended and renewed at any time and from time
to time, identified on Schedule 1.1- C attached to and made and made a part of
this Agreement.
"Assignments of Trademarks" means the collective reference to each
collateral assignment of trademarks, as the same may be amended, modified,
restated, substituted, extended and renewed at any time and from time to time,
from the Parent to the Administrative Agent for the benefit of the Lenders
ratably and the Agents.
"Bankruptcy Code" means the United States Bankruptcy Code, as amended
from time to time, and any successor Laws.
"Base Rate" means the sum of (a) the Applicable Margin plus (b) the
Prime Rate.
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"Base Rate Loan" means any Loan for which interest is to be computed
with reference to the Base Rate.
"Borrower" means each Person defined as a "Borrower" in the preamble of
this Agreement and each Additional Borrower; "Borrowers" means the collective
reference to all Persons defined as "Borrowers" in the preamble to this
Agreement and all Additional Borrowers.
"Borrowing" means the incurrence of one Type of Loan by any Borrower
from all of the Lenders on a pro rata basis on a given date (or resulting from
conversions on a given date), having in the case of Eurodollar Loans the same
Interest Period.
"Borrowing Base" has the meaning described in Section 2.1.3 (Borrowing
Base).
"Borrowing Base Deficiency" has the meaning described in Section 2.1.3
(Borrowing Base).
"Borrowing Base Report" has the meaning described in Section 2.1.4
(Borrowing Base Report).
"Business Day" shall mean (i) for all purposes other than as covered by
clauses (ii) and (iii) below, any day excluding Saturday, Sunday and any day
which shall be in Baltimore, Maryland or in the case of the Lenders other than
NationsBank, in the jurisdictions identified in the addresses stated after their
names on the signature pages of this Agreement, designated as a legal holiday or
a day on which banking institutions are authorized by law or other governmental
actions to close, (ii) with respect to all notices and determinations in
connection with, and payments of principal and interest on, Eurodollar Loans,
any day which is a Business Day described in clause (i) and which is also a day
for trading by and between banks in US dollar deposits in the London interbank
Eurodollar market, and (iii) if the applicable Business Day relates to any
Multi-Currency Loans or Multi-Currency Letters of Credit, any day on which banks
are not required or authorized to close in the city of the jurisdiction of such
Currency where the Appropriate Payment Office for such Currency is located.
"Capital Expenditure" means an expenditure (whether payable in cash or
other property or accrued as a liability) for assets which are required to be
included in or reflected by, the property, plant and equipment or similar fixed
asset accounts on the balance sheet prepared in accordance with GAAP.
"Capital Expenditure Line" has the meaning described in Section 2.4.1
(Capital Expenditure Line Facility).
"Capital Expenditure Line Commitment" means the agreement of a Lender
relating to the making the Capital Expenditure Line and advances thereunder
subject to and in accordance with the provisions of this Agreement; and "Capital
Expenditure Line Commitments" means the collective reference to the Capital
Expenditure Line Commitment of each of the Lenders.
"Capital Expenditure Line Commitment Period" means the period of time
from the Closing Date to the earlier of March 31, 2003 or the Capital
Expenditure Line Termination Date.
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"Capital Expenditure Line Committed Amount" has the meaning described
in Section 2.4.1 (Capital Expenditure Line Facility).
"Capital Expenditure Line Equipment" means all equipment, machinery,
furniture, and fixtures now or hereafter purchased or financed with the proceeds
of the Capital Expenditure Line, whether or not the same shall be deemed to be
affixed to real property, together with all accessions, additions, fittings,
accessories, parts, special tools, improvements thereto and substitutions
therefor and all parts and equipment which may be attached to or which are
necessary or beneficial for the operation, use and/or disposition of such
personal property, all licenses, warranties, franchises and general intangibles
related thereto or necessary or beneficial for the operation, use and/or
disposition of the same, together with all Accounts, chattel paper, instruments
and other consideration received by any Borrower on account of the sale, lease
or other disposition of all or any part of the foregoing, and together with all
rights under or arising out of present or future documents and contracts
relating to the foregoing and all proceeds (cash and non-cash) of the foregoing.
"Capital Expenditure Line Expiration Date" means May 1, 2003.
"Capital Expenditure Line Facility" means the facility established by
the Lenders pursuant to Section 2.4.1 (Capital Expenditure Line Facility).
"Capital Expenditure Line Note" and "Capital Expenditure Line Notes"
have the meaning described in Section 2.4.3 (Capital Expenditure Line Notes).
"Capital Expenditure Line Notice" has the meaning described in Section
2.4.2.
"Capital Expenditure Line Optional Prepayment" and "Capital Expenditure
Line Optional Prepayments" have the meanings described in Section 2.4.5 (Capital
Expenditure Line Optional Prepayment).
"Capital Expenditure Line Pro Rata Share" has the meaning described in
Section 2.4.1 (Capital Expenditure Line Facility).
"Capital Expenditure Line Payment Schedule" has the meaning described
in Section 2.4.4 (Payments of Capital Expenditure Line).
"Capital Expenditure Line Termination Date" means the earlier of (a)
the Capital Expenditure Line Expiration Date, or (b) the Revolving Credit
Termination Date.
"Capital Lease" means with respect to any Person any lease of real or
personal property, for which the related Lease Obligations have been or should
be, in accordance with GAAP consistently applied, capitalized on the balance
sheet of that Person.
"Cash Equivalents" means (a) securities with maturities of one year or
less from the date of acquisition issued or fully guaranteed or insured by the
United States Government or any agency thereof, (b) certificates of deposit with
maturities of one (1) year or less from the date of acquisition of, or money
market accounts maintained with, the Administrative Agent, any
- 6 -
14
Affiliate of the Administrative Agent, or any other domestic commercial bank
having capital and surplus in excess of One Hundred Million Dollars
($100,000,000.00) or such other domestic financial institutions or domestic
brokerage houses to the extent disclosed to, and approved by, the Administrative
Agent and (c) commercial paper of a domestic issuer rated at least either A-1 by
Standard & Poor's Corporation (or its successor) or P-1 by Xxxxx'x Investors
Service, Inc. (or its successor) with maturities of six (6) months or less from
the date of acquisition.
"Closing Date" means the Business Day, in any event not later than May
29, 1998, on which the Administrative Agent shall be satisfied that the
conditions precedent set forth in Section 5.1 (Conditions to Initial Advance)
have been fulfilled or otherwise waived by the Administrative Agent.
"Collateral" means all property of each and every Borrower subject from
time to time to the Liens of this Agreement, any of the Security Documents
and/or any of the other Financing Documents, together with any and all cash and
non-cash proceeds and products thereof.
"Collateral Account" has the meaning described in Section 2.1.8 (The
Collateral Account).
"Collateral Disclosure List" has the meaning described in Section 3.3
(Collateral Disclosure List).
"Collection" means each check, draft, cash, money, instrument, item,
and other remittance in payment or on account of payment of the Accounts or
otherwise with respect to any Collateral, including, without limitation, cash
proceeds of any returned, rejected or repossessed goods, the sale or lease of
which gave rise to an Account, and other proceeds of Collateral; and
"Collections" means the collective reference to all of the foregoing.
"Commitment" means with respect to each Lender, such Lender's Revolving
Credit Commitment, the Letter of Credit Commitment, and Capital Expenditure Line
Commitment as the case may be, and "Commitments" means the collective reference
to the Revolving Credit Commitments and Capital Expenditure Line Commitments of
all of the Lenders.
"Committed Amount" means with respect to each Lender, such Lender's
Revolving Loan Committed Amount or Capital Expenditure Line Committed Amount, as
the case may be, and "Committed Amounts" means collectively the Revolving Loan
Committed Amount and Capital Expenditure Line Committed Amount of each of the
Lenders.
"Compliance Certificate" means a periodic Compliance Certificate
described in Section 6.1.1 (Financial Statements).
"Commonly Controlled Entity" means an entity, whether or not
incorporated, which is under common control with any Borrower within the meaning
of Section 414(b) or (c) of the Internal Revenue Code.
"Consolidated Net Income" shall mean, for any period, net income or
loss (income after tax payments) determined on a consolidated basis for
Borrowers and their Subsidiaries in
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15
accordance with GAAP; provided, however, that there shall not be included in
such Consolidated Net Income:
(i) any net income of any person if such person is not a
Subsidiary, except that equity in the net income of such person for
such period shall be included in such Consolidated Net Income up to the
aggregate amount of cash actually distributed by such person as a
dividend or other distribution (subject, in the case of a dividend or
other distribution to a Subsidiary, to the limitation contained in
clause (iii) below);
(ii) any net income of any person acquired in a pooling of
interest transaction for any period prior to the date of such
acquisition;
(iii) any net income of any Subsidiary if such Subsidiary is
subject to restrictions, directly or indirectly, on the payment of
dividends or the making of distributions by such Subsidiary, directly
or indirectly, to the Parent, except that equity in the net income of
any such Subsidiary for such period shall be included in such
Consolidated Net Income up to the aggregate amount of cash actually
distributed by such Subsidiary during such period as a dividend or
other distribution;
(iv) any gain or loss realized upon the sale or other
disposition of any property, plant or equipment (including pursuant to
any sale-leaseback arrangement) which is not sold or otherwise disposed
of in the ordinary course of business and any gain or loss realized
upon the sale or other disposition of any capital stock of any person;
gains or losses arising solely from currency fluctuations; or
(v) other extraordinary items including, without limitation,
one-time charges for the fourth quarter of fiscal year 1997.
"Credit Facility" means with respect to each Lender, such Lender's Pro
Rata Share of the Revolving Credit Facility, the Letter of Credit Facility or
the Capital Expenditure Line Facility, as the case may be, and "Credit
Facilities" means collectively with respect to each Lender, such Lender's Pro
Rata Share of the Revolving Credit Facility, the Letter of Credit Facility and
the Capital Expenditure Line Facility and any and all other credit facilities
now or hereafter extended under or secured by this Agreement.
"Currency" means US Dollars or any Approved Foreign Currency.
"Default" means an event which, with the giving of notice or lapse of
time, or both, could or would constitute an Event of Default under the
provisions of this Agreement.
"Dollar Equivalent" means, with respect to any amount denominated in a
currency other than Dollars on the date of determination thereof, the Foreign
Currency Equivalent of such amount in US Dollars.
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16
"Dollars" and "$" mean the lawful money of the United States of America.
"Domestic Borrower" means each of the Parent and each Domestic Borrower,
as the case may be and each of their respective successors and assigns, and
"Domestic Borrowers" means the Parent and each of the Domestic Borrowers and
each of their respective successors and assigns.
"Early Termination Fee" has the meaning described in Section 2.1.11 (Early
Termination Fee).
"EBITDA" means as to each Borrower and its Subsidiaries for any period
of determination thereof, the sum of (a) Consolidated Net Income determined in
accordance with GAAP consistently applied, plus (b) interest expense, regularly
scheduled preferred dividends paid with respect to the Parent's $69,000,000
aggregate principal amount 8% Convertible Subordinated Debentures due 2017, and
income tax provisions for such period, plus (c) depreciation, amortization and
other non-cash charges and credits (including, without limitation, amortization
of goodwill, deferred financing fees and other intangibles) for such period, but
only to the extent the items described in items (b) and (c) were deducted in the
determination of Consolidated Net Income for such period.
"Eligible Inventory" means the collective reference to all Inventory of
each Domestic Borrower held for sale in the ordinary course of business, valued
(in Dollars or Dollar Equivalent) at the lowest of the net purchase cost or net
manufacturing cost, the lowest bulk market price, such Domestic Borrower's
lowest bulk selling price, minus estimated expenses for completion and disposal,
and minus an allowance for normal profit margin for bulk sales, any ceiling
prices which may be established by any Law of any Governmental Authority or
prevailing market value, excluding, however, any Inventory which consists of:
(a) any Inventory located outside of a jurisdiction in which
the Administrative Agent has properly and unavoidably perfected the
Liens of the Administrative Agent and the Lenders under this Agreement
by filing in that jurisdiction, free and clear of all other Liens,
except to the extent provided in subsection (d)(ii) below;
(b) any Inventory not in the actual possession of a Domestic
Borrower, except to the extent provided in subsection (d) below;
(c) any Inventory in the possession of a bailee, warehouseman,
consignee or similar third party, except to the extent that such
bailee, warehouseman, consignee or similar third party has entered into
an agreement with the Administrative Agent in which such bailee,
warehouseman, consignee or similar third party consents and agrees to
the Administrative Agent's and Lenders' Lien on such Inventory and to
such other terms and conditions as may be required by the
Administrative Agent;
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17
(d) (i) except as set forth on Schedule 1.1-D and (ii) except
for Inventory in transit subject to a commercial Letter of Credit
issued by NationsBank for which documents of title required as a
condition of draw under the Letter of Credit have been delivered to
NationsBank, to include inventory subject to commercial letters of
credit issued by NationsBank requiring delivery of documents of title
as a condition of draw, any Inventory located on premises leased or
rented to a Domestic Borrower or otherwise not owned by a Domestic
Borrower, unless the Administrative Agent has received a waiver and
consent from the lessor, landlord and/or owner, in form and substance
satisfactory to the Administrative Agent and from any mortgagee of such
lessor, landlord or owner to the extent required by the Administrative
Agent;
(e) any Inventory the sale or other disposition of which has
given rise to an Account or other receivable;
(f) any Inventory which fails to meet all standards and
requirements imposed by any Governmental Authority over such Inventory
or its production, storage, use or sale;
(g) work-in-process, supplies, displays, packaging and
promotional materials;
(h) any Inventory as to which the Administrative Agent
determines in the reasonable exercise of its discretion at any time and
in good faith is not in good condition or is defective, unmerchantable,
post-seasonal, slow moving or obsolete; and
(i) any Inventory which the Administrative Agent in the
reasonable exercise of its discretion has deemed to be ineligible
because the Administrative Agent otherwise considers the collateral
value to the Administrative Agent and the Lenders to be impaired or its
or their ability to realize such value to be insecure.
In the event of any dispute under the foregoing criteria as to whether Inventory
is, or has ceased to be, Eligible Inventory, the decision of the Administrative
Agent in the reasonable exercise of its discretion shall control.
"Eligible Receivable" and "Eligible Receivables" mean, at any time of
determination thereof, the unpaid portion (valued in Dollars) of each account
(which may include Assigned Local Currency Receivables) (net of any returns,
discounts, claims, credits, charges, accrued rebates or other allowances,
offsets, deductions, counterclaims, disputes or other defenses and reduced by
the aggregate amount of all reserves (including, without limitation, reserves to
cover value added taxes or sales taxes), limits and deductions provided for by
the Administrative Agent in the reasonable exercise of its discretion )
receivable by the Borrower (other than a Local Currency Borrower) in United
States Dollars or, in the case of a Local Currency Borrower, receivable as part
of the Assigned Local Currency Receivables by the Parent in United States
- 10 -
18
Dollars or in the Approved Foreign Currency of the applicable Local Currency
Borrower, provided each account conforms and continues to conform to the
following criteria to the satisfaction of the Administrative Agent:
(a) the account arose in the ordinary course of a Borrower's
business from a bona fide outright sale of Inventory by such Borrower
or from services performed by such Borrower (including, without
limitation, accounts arising from a written agreement with a customer
of the Borrower to provide tools and/or dies for the customer);
(b) the account is a valid, legally enforceable obligation of
the Account Debtor and requires no further act on the part of any
Person under any circumstances to make the account payable by the
Account Debtor;
(c) the account is based upon an enforceable order or
contract, written or oral, for Inventory shipped or for services
performed, and the same were shipped or performed substantially in
accordance with such order or contract;
(d) if the account arises from the sale of Inventory, the
Inventory the sale of which gave rise to the account has been shipped
or delivered to the Account Debtor on an absolute sale basis and not on
a xxxx and hold sale basis, a consignment sale basis, a guaranteed sale
basis, a sale or return basis, or on the basis of any other similar
understanding;
(e) if the account arises from the performance of services,
such services have been fully rendered and do not relate to any
warranty claim or obligation;
(f) the account is evidenced by an invoice or other
documentation in form reasonably acceptable to the Administrative
Agent, dated no later than the date of shipment or performance and
containing only terms normally offered by the respective Borrower to
the Account Debtor in question;
(g) the amount shown on the books of a Borrower and on any
invoice, certificate, schedule or statement delivered to the
Administrative Agent is owing to such Borrower and no partial payment
has been received unless reflected with that delivery;
(h) the account is not outstanding more than ninety (90) days
from the date of the invoice therefor;
(i) the account is not owing by any Account Debtor for which
the Administrative Agent has deemed fifty percent (50%) or more of such
Account Debtor's other accounts (or any portion thereof) due to a
Borrower, individually, or all of the Borrowers collectively, to be
non-Eligible Receivables;
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19
(j) the account is not owing by an Account Debtor or a group
of affiliated Account Debtors to any Borrower whose then existing
accounts owing to that Borrower individually exceed in aggregate face
amount fifteen percent (15%) of that Borrower's total Eligible
Receivables and is not owing by an Account Debtor or a group of
affiliated Account Debtors whose then existing accounts to any and all
of the Borrowers collectively exceed in aggregate face amount fifteen
percent (15%) of the total Eligible Receivables of all Borrowers;
(k) the Account Debtor has not returned, rejected or refused
to retain, or otherwise notified a Borrower of any dispute concerning,
or claimed nonconformity of, any of the Inventory or services from the
sale or furnishing of which the account arose;
(l) the account is not subject to any present or contingent
(and the applicable Borrower has no notice of any facts which exist
which are the basis for any future) offset, claim, deduction or
counterclaim, dispute or defense in law or equity on the part of such
Account Debtor, or any claim for credits, allowances, or adjustments by
the Account Debtor because of returned, inferior, or damaged Inventory
or unsatisfactory services, or for any other reason including, without
limitation, those arising on account of a breach of any express or
implied representation or warranty;
(m) except with respect to such joint venture net receivables
as the Administrative Agent may approve from time to time, the Account
Debtor is not a Subsidiary or Affiliate of any Borrower or an employee,
officer, director or shareholder of any Borrower or any Subsidiary or
Affiliate of any Borrower;
(n) the Account Debtor with respect to such account is not
insolvent or the subject of any bankruptcy or insolvency proceedings of
any kind or of any other proceeding or action, threatened or pending;
(o) the Account Debtor is not a Governmental Authority, unless
all rights of each Borrower with respect to such account have been
assigned to the Administrative Agent for the benefit of the Lenders
ratably and the Administrative Agent on terms acceptable to the
Administrative Agent pursuant to the Assignment of Claims Act of 1940,
as amended;
(p) no Borrower is indebted in any manner to the Account
Debtor (as creditor, lessor, supplier or otherwise), with the exception
of customary credits, adjustments and/or discounts given to an Account
Debtor by a Borrower in the ordinary course of its business;
(q) the account does not arise from services under or related
to any warranty obligation of a Borrower or out of service charges,
finance charges or other fees for the time value of money;
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20
(r) the account is not evidenced by chattel paper or an
instrument of any kind and is not secured by any letter of credit,
unless the same is in the possession of the Administrative Agent as
part of the Collateral;
(s) the title of the respective Borrower to the account is
absolute and is not subject to any prior assignment, claim, Lien, or
security interest, except Permitted Liens and except in the case of
Assigned Local Currency Receivables, title thereto is in the Parent;
(t) no bond or other undertaking by a guarantor or surety has
been or is required to be obtained, supporting the performance of any
Borrower or any other obligor in respect of any of such Borrower's
agreements with the Account Debtor unless the same is part of the
Collateral;
(u) no bond or other undertaking by a guarantor or surety has
been or is required to be obtained, supporting the account and any of
the Account Debtor's obligations in respect of the account;
(v) the Borrower (or, in the case of Assigned Local Currency
Receivables, the Parent only) has the full and unqualified right and
power to assign and grant a security interest in, and Lien on, the
account to the Administrative Agent and the Lenders as security and
collateral for the payment of the Obligations and the Agents'
Obligations;
(w) the account does not arise out of a contract with, or
order from, an Account Debtor that, by its terms or by applicable Laws,
forbids, makes void or unenforceable, limits, or affects the first Lien
priority of the assignment or grant of a security interest by the
Borrower (or, in the case of Assigned Local Currency Receivables, the
Parent only) to the Administrative Agent, for the benefit of the
Lenders ratably and the Administrative Agent, of the account arising
from such contract or order;
(x) the account is subject to a Lien in favor of the
Administrative Agent, for the benefit of the Lenders ratably and the
Administrative Agent, which Lien is perfected as to the account by the
filing of financing statements and which Lien upon such filing
constitutes a first priority security interest and Lien;
(y) the Inventory giving rise to the account was not, at the
time of the sale thereof, subject to any Lien, except those in favor of
the Administrative Agent, for the benefit of the Lenders ratably and
the Administrative Agent, and except, with respect to Assigned Local
Currency Receivables, those Liens which attach to inventory of the
Local Currency Borrower as a matter of applicable Laws in the
jurisdiction of such Local Currency Borrower, but which do not attach
to the Assigned Local Currency Receivables or any of the other
Collateral;
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21
(z) except for those representing customer tooling, no part
of the account represents a progress billing or a retainage;
(aa) the Administrative Agent in the reasonable exercise of
its discretion has not deemed the account ineligible because of
uncertainty as to the creditworthiness of the Account Debtor or because
the Administrative Agent otherwise considers the collateral value of
such account to the Administrative Agent and the Lenders to be impaired
or its or their ability to realize such value to be insecure.
For purposes of calculating the Dollar Equivalent of Eligible Receivables
included in the Borrowing Base and not denominated in US Dollars, the Dollar
Equivalent shall decrease by such percentage (not to exceed two percent (2%)) as
the Administrative Agent in its reasonable discretion may determine. In the
event of any dispute, under the foregoing criteria, as to whether an account is,
or has ceased to be, an Eligible Receivable, the decision of the Administrative
Agent in the good faith exercise of its discretion shall control.
"Enforcement Costs" means all expenses, charges, costs and fees whatsoever
(including, without limitation, reasonable outside and, without duplication,
allocated in-house counsel attorney's fees and expenses) of any nature
whatsoever paid or incurred by or on behalf of the Administrative Agent and/or
any of the Lenders in connection with (a) any or all of the Obligations, this
Agreement and/or any of the other Financing Documents, (b) the creation,
perfection, collection, maintenance, preservation, defense, protection,
realization upon, disposition, sale or enforcement of all or any part of the
Collateral, this Agreement or any of the other Financing Documents, including,
without limitation, those costs and expenses more specifically enumerated in
Section 3.6 (Costs) and/or Section 9.10 (Enforcement Costs), and (c) the
monitoring, administration, processing and/or servicing of any or all of the
Obligations, the Financing Documents, and/or the Collateral.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"Eurodollar Base Rate" means for any Interest Period with respect to any
Eurodollar Loan, the per annum interest rate rounded upward, if necessary, to
the nearest 1/100 of 1%, appearing on Telerate Page 3750 (or any successor page)
as the London interbank offered rate for deposits in Dollars at or about 11:00
a.m. (London time) on the date that is two (2) Eurodollar Business Days prior to
the first day of such Interest Period for a term comparable to such Interest
Period. If for any reason such rate is not available, the term "Eurodollar Rate"
shall mean, for any Eurodollar Loan for any Interest Period therefor, the rate
per annum (rounded upwards, if necessary, to the nearest 1/100 of 1%) appearing
on Reuters Screen LIBO Page as the London interbank offered rate for deposits in
ollars at approximately 11:00 a.m. (London time) two (2) Eurodollar Business
Days prior to the first day of such Interest Period for a term comparable to
such Interest Period; provided, however, if more than one rate is specified on
Reuters Screen LIBO Page, the applicable rate shall be the arithmetic mean of
all such rates (rounded upwards, if necessary, to the nearest 1/100 of 1%).
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22
"Eurodollar Business Day" means any Business Day on meeting the requirements
of clause (ii) of the definition of "Business Day."
"Eurodollar Loan" means any Loan for which interest is to be computed with
reference to the Eurodollar Rate.
"Eurodollar Rate" means for any Interest Period with respect to any
Eurodollar Loan, (a) the Applicable Margin, plus (b) the per annum rate of
interest calculated pursuant to the following formula:
Eurodollar Base Rate
------------------------
1.00 - Reserve Percentage
"Event of Default" has the meaning described in ARTICLE VII (Default and
Rights and Remedies).
"Facilities" means the collective reference to the loan, letter of credit,
interest rate protection, foreign exchange risk, cash management, and other
credit facilities now or hereafter provided to any one or more of the Borrowers
by the Administrative Agent or the Lenders under this Agreement or otherwise by
NationsBank.
"Federal Funds Rate" means for any day of determination, 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) by the Federal Reserve Bank for the
next preceding Business Day) by the Federal Reserve Bank of Richmond or, if such
rate is not so published for any day that is a Business Day, the average of
quotations for such day on such transactions received by the Administrative
Agent from three (3) Federal funds brokers of recognized standing selected by
the Administrative Agent.
"Fees" means the collective reference to each fee payable to the
Administrative Agent, for its own account or for the ratable benefit of the
Lenders, under the terms of this Agreement or under the terms of any of the
other Financing Documents, including, without limitation, the Revolving Credit
Unused Line Fees, the Letter of Credit Fees, the Early Termination Fee, the
Origination Fee, and the Administrative Agency Fees.
"Financing Documents" means at any time collectively this Agreement, the
Notes, the Security Documents, the Letter of Credit Documents, Foreign Exchange
Protection Agreement, Interest Rate Protection Agreements, and any other
instrument, agreement or document previously, simultaneously or hereafter
executed and delivered by any Borrower and/or any other Person, singly or
jointly with another Person or Persons, evidencing, securing, guarantying or in
connection with this Agreement, any Note, any of the Security Documents, any of
the Facilities, and/or any of the Obligations.
"Fixed Charges" means as to the Borrowers and their Subsidiaries for any
period of determination, the scheduled or required payments for principal and
interest (excluding, if otherwise included, the Administrative Agent's annual
$100,000 administrative fee) on all Indebtedness For Borrowed Money of the
Borrowers and their Subsidiaries, plus unfinanced
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23
Capital Expenditures of the Borrowers and their Subsidiaries, plus cash
dividends paid, plus cash income taxes paid, by the Borrowers and their
Subsidiaries. For the purposes of this definition "unfinanced Capital
Expenditures" shall be calculated by deducting from Capital Expenditures an
amount equal to the sum of (i) gross financed Capital Expenditures plus (ii) the
cash proceeds or purchase price credit received by the Borrowers and their
Subsidiaries from the sale or sale-leaseback of fixed or capital assets during
the period tested.
"Fixed or Capital Assets" of a Person at any date means all assets which
would, in accordance with GAAP consistently applied, be classified on the
balance sheet of such Person as property, plant or equipment or similar fixed
asset accounts at such date.
"Foreign Currency Equivalent" means, on any date of determination, the
equivalent in any Approved Foreign Currency of an amount in US dollars, or in US
dollars of an amount in any Approved Foreign Currency, determined at the rate of
exchange quoted by the Multi-Currency Agent in New York City, at 9:00 A.M. (New
York City time) on such date of determination, to prime banks in New York City
for the spot purchase in the New York foreign exchange market of such amount of
US dollars with such Approved Foreign Currency or such amount of such Approved
Foreign Currency with US Dollars.
"Foreign Exchange Protection Agreement" means any foreign exchange, currency
spot, foreign exchange forward contracts and other similar agreements and
arrangements between any Borrower and a Person acceptable to the Administrative
Agent in its reasonable credit judgement, providing for the transfer or
mitigation of foreign exchange currency risks either generally or under specific
contingencies.
"Foreign Exchange Exposure" means at any time and from time to time of
determination, the amount of the obligations and liabilities of any or all of
the Borrowers with respect to each Foreign Exchange Protection Agreement with a
Person who is the Administrative Agent, a Lender or an Affiliate of the
Administrative Agent or any Lender arising as a result of a determination of the
amount of Dollars required at such time to purchase such amount of the foreign
currency covered by such Foreign Exchange Protection Agreement at the Spot Rate.
"Funded Debt to EBITDA Ratio" means the ratio, determined for the Borrowers
on a consolidated basis, of (a) Funded Indebtedness which is secured and which
is not subordinated to all other Indebtedness for Borrowed Money of the
Borrowers to (b) EBITDA.
"Funded Indebtedness" shall mean all (a) Indebtedness for Borrowed Money
under the Credit Facilities, and (b) all other Indebtedness for Borrowed Money.
"GAAP" means generally accepted accounting principles in the United States
of America in effect from time to time.
"General Intangibles" means all general intangibles of every nature, whether
presently existing or hereafter acquired or created, and without implying any
limitation of the foregoing, further means all books and records, claims
(including without limitation all claims for income tax and other refunds),
chooses in action, claims, causes of action in tort or equity, contract rights,
judgments, customer lists, patents, trademarks, licensing agreements, rights in
intellectual
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24
property, goodwill (including goodwill of any Borrower's business symbolized by
and associated with any and all trademarks, trademark licenses, copyrights
and/or service marks), royalty payments, licenses, rights as lessee under any
lease of real or personal property, literary rights, copyrights, service names,
service marks, logos, trade secrets, amounts received as an award in or
settlement of a suit in damages, deposit accounts, interests in joint ventures,
general or limited partnerships, or limited liability companies or partnerships,
rights in applications for any of the foregoing, books and records in whatever
media (paper, electronic or otherwise) recorded or stored, with respect to any
or all of the foregoing and all equipment and general intangibles necessary or
beneficial to retain, access and/or process the information contained in those
books and records, and all proceeds (cash and non-cash) of the foregoing.
"Governmental Authority" means any nation or government, any state or other
political subdivision thereof and any entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to government
and any department, agency or instrumentality thereof.
"Hazardous Materials" means (a) any "hazardous waste" as defined by the
Resource Conservation and Recovery Act of 1976, as amended from time to time,
and regulations promulgated thereunder; (b) any "hazardous substance" as defined
by the Comprehensive Environmental Response, Compensation and Liability Act of
1980, as amended from time to time, and regulations promulgated thereunder; (c)
any substance the presence of which on any property now or hereafter owned,
acquired or operated by any of the Borrowers is prohibited by any Law similar to
those set forth in this definition; and (d) any other substance which by Law
requires special handling in its collection, storage, treatment or disposal.
"Hazardous Materials Contamination" means the contamination (whether
presently existing or occurring after the date of this Agreement) by Hazardous
Materials of any property owned, operated or controlled by any of the Borrowers
or for which any of the Borrowers has responsibility, including, without
limitation, improvements, facilities, soil, ground water, air or other elements
on, or of, any property now or hereafter owned, acquired or operated by any of
the Borrowers, and any other contamination by Hazardous Materials for which any
of the Borrowers is, or is claimed to be, responsible.
"Indebtedness for Borrowed Money" of a Person means at any date, without
duplication, (i) liabilities for borrowed money and redemption obligations in
respect of mandatorily redeemable preferred stock, (ii) liabilities for the
deferred purchase price of acquired property (excluding accounts payable arising
in the ordinary course of business but including all liabilities created through
any conditional sale or title retention agreement with respect to acquired
property), (iii) rentals capitalized in accordance with GAAP under any Capital
Lease, (iv) liabilities for borrowed money secured by a Lien or any other charge
on assets, (v) all liabilities in respect of unreimbursed draws under letters of
credit, bankers acceptances or similar instruments, (vi) net payment obligations
with respect to interest rate swaps, currency swaps and similar obligations
which require payments, whether periodically or upon the happening of a
contingency, (viii) all indebtedness or other obligations of others with respect
to which such Person has become liable through a guarantee or an obligation of
indemnification to the extent that the indebtedness or obligations guaranteed
are obligations that would constitute
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Indebtedness for Borrowed Money, and (ix) liabilities, whether or not in any
such case the same was for money borrowed, (x) represented by notes payable, and
drafts accepted, that represent extensions of credit, (y) constituting
obligations evidenced by bonds, debentures, notes or similar instruments, or (z)
upon which interest charges are customarily paid or that was issued or assumed
as full or partial payment for property (other than trade credit that is
incurred in the ordinary course of business).
"Indemnified Parties" has the meaning set forth in Section 9.19.
"Insolvency Proceeding" means any receivership, conservatorship, general
meeting of creditors, insolvency or bankruptcy proceeding, assignment for the
benefit of creditors, or any proceeding or action by or against any Borrower for
any relief under any bankruptcy or insolvency law or other Laws relating to the
relief of debtors, readjustment of indebtedness, reorganizations, dissolution,
liquidation, compositions or extensions, or the appointment of any receiver,
intervenor or conservator of, or trustee, or similar officer for, any Borrower
or any substantial part of its properties or assets, including, without
limitation, proceedings under the Bankruptcy Code, or under other Laws of the
United States or any other Governmental Authority, all whether now or hereafter
in effect.
"Instrument" means a negotiable instrument (as defined under Article 3 of
the Uniform Commercial Code), a "certificated security" (as defined under
Article 8 of the Uniform Commercial Code), or any other writing which evidences
a right to payment of money and is not itself a security agreement or lease and
is of a type which is in the ordinary course of business transferred by delivery
with any necessary endorsement.
"Intercompany Allocation" has the meaning described in Section 6.1.1(d)
(Monthly Statements and Certificates).
"Interest Payment Date" means with respect to the Revolving Loan the first
day of each calendar month commencing on July 1, 1998 and continuing thereafter
until the Obligations have been irrevocably paid in full.
"Interest Period" means as to any Eurodollar Loan, the period commencing on
and including the date such Eurodollar Loan is made (or on the effective date of
the Borrowers' election to convert any Base Rate Loan to a Eurodollar Loan in
accordance with the provisions of this Agreement) and ending on and including
the day which is one month, two months, three months or six months thereafter,
as selected by the Borrowers in accordance with the provisions of this
Agreement, and thereafter, each period commencing on the last day of the then
preceding Interest Period for such Eurodollar Loan and ending on and including
the day which is one month, two months, three months or six months thereafter,
as selected by the Borrowers in accordance with the provisions of this
Agreement; provided, however that:
(a) the first day of any Interest Period shall be a
Eurodollar Business Day;
(b) if any Interest Period would end on a day that shall not
be a Eurodollar Business Day, such Interest Period shall be extended to the
next succeeding
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26
Eurodollar Business Day unless such next succeeding Eurodollar Business Day
would fall in the next calendar month, in which case, such Interest Period
shall end on the next preceding Eurodollar Business Day; and
(c) no Interest Period shall extend beyond the Revolving Credit
Expiration Date or the scheduled maturity date of the Capital
Expenditure Line, as appropriate.
"Interest Rate Election Notice" has the meaning described in Section
2.5.2(e).
"Interest Rate Protection Agreement" means any interest rate or currency
swap agreements, hedging, cap, floor, and collar agreements, currency spot and
forward contracts and other similar agreements and arrangements with the
Administrative Agent or any Affiliate of the Administrative Agent.
"Interest Rate Exposure" means at any time and from time to time of
determination, the amount, determined on a xxxx-to-market basis, of the
obligations and liabilities of any or all of the Borrowers with respect to each
Interest Rate Protection Agreement.
"Internal Revenue Code" means the Internal Revenue Code of 1986, as amended
from time to time, and the Income Tax Regulations issued and proposed to be
issued thereunder.
"Inventory" means all inventory of each Borrower and all right, title and
interest of each Borrower in and to all of its now owned and hereafter acquired
goods, merchandise and other personal property furnished under any contract of
service or intended for sale or lease, including, without limitation, all raw
materials, work-in-process, finished goods and materials and supplies of any
kind, nature or description which are used or consumed in any Borrower's
business or are or might be used in connection with the manufacture, packing,
shipping, advertising, selling or finishing of such goods, merchandise and other
licenses, warranties, franchises, general intangibles, personal property and all
documents of title or documents relating to the same and all proceeds (cash and
non-cash) of the foregoing.
"Item of Payment" means each check, draft, cash, money, instrument, item,
and other remittance in payment or on account of payment of the Receivables or
otherwise with respect to any Collateral, including, without limitation, cash
proceeds of any returned, rejected or repossessed goods, the sale or lease of
which gave rise to a Receivable, and other proceeds of Collateral; and "Items of
Payment" means the collective reference to all of the foregoing.
"Laws" means all ordinances, statutes, rules, regulations, orders,
injunctions, writs, or decrees of any Governmental Authority.
"Lease Obligations" of a Person means for any period the rental commitments
of such Person for such period under leases for real and/or personal property
(net of rent from subleases thereof, but including taxes, insurance, maintenance
and similar expenses which such Person, as the lessee, is obligated to pay under
the terms of said leases, except to the extent that such taxes, insurance,
maintenance and similar expenses are payable by sublessees), including rental
commitments under Capital Leases.
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"Letter of Credit" and "Letters of Credit" shall have the meanings described
in Section 2.2.1 (Letters of Credit).
"Letter of Credit Agreement" means the collective reference to each letter
of credit application and agreement substantially in the form of the Appropriate
Letter of Credit Issuer's then standard form of application for letter of credit
or such other form as may be approved by the Administrative Agent and the
Appropriate Letter of Credit Issuer, executed and delivered by any one or more
of the Borrowers in connection with the issuance of a Letter of Credit, as the
same may from time to time be amended, restated, supplemented or modified; and
"Letter of Credit Agreements" means all of the foregoing in effect at any time
and from time to time.
"Letter of Credit Documents" means any and all drafts under or purporting to
be under a Letter of Credit, any Letter of Credit Agreement, and any other
instrument, document or agreement executed and/or delivered by any one or more
of the Borrowers or any other Person under, pursuant to or in connection with a
Letter of Credit or any Letter of Credit Agreement.
"Letter of Credit Facility" means the facility established pursuant to
Section 2.2 (Letter of Credit Facility).
"Letter of Credit Commitment Fee" and "Letter of Credit Commitment Fees"
have the meanings described in Section 2.2.2 (Letter of Credit Fees).
"Letter of Credit Fronting Fee" and "Letter of Credit Fronting Fees" have
the meanings described in Section 2.2.2(a) (Letter of Credit Fees).
"Letter of Credit Obligations" means the collective reference to all
Obligations of any one or more of the Borrowers with respect to the Letters of
Credit and the Letter of Credit Agreements.
"Liabilities" means at any date all liabilities that in accordance with GAAP
consistently applied should be classified as liabilities on a consolidated
balance sheet of the Borrowers and their respective Subsidiaries.
"Lien" means any mortgage, deed of trust, deed to secure debt, grant,
pledge, security interest, assignment, encumbrance, judgment, lien,
hypothecation, provision in any instrument or other document for confession of
judgment, cognovit or other similar right or remedy, claim or charge of any
kind, whether perfected or unperfected, avoidable or unavoidable, including,
without limitation, any conditional sale or other title retention agreement, any
lease in the nature thereof, and the filing of or agreement to give any
financing statement under the Uniform Commercial Code of any jurisdiction,
excluding the precautionary filing of any financing statement by any lessor in a
true lease transaction, by any xxxxxx in a true bailment transaction or by any
consignor in a true consignment transaction under the Uniform Commercial Code of
any jurisdiction or the agreement to give any financing statement by any lessee
in a true lease transaction, by any bailee in a true bailment transaction or by
any consignee in a true consignment transaction. Rights of setoff arising by
operation of law are not included in the definition of "Liens".
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"Loan" means each of the Revolving Loan or the Capital Expenditure Line as
the case may be, and "Loans" means the collective reference to the Revolving
Loan and the Capital Expenditure Line.
"Loan Notice" has the meaning described in Section 2.1.2(a) (Procedure for
Making Advances).
"Local Currency Borrower" means each corporation identified on Schedule
1.1-B attached to and made a part of this Agreement and "Local Currency
Borrowers" means the collective reference to all Local Currency Borrowers.
"Lockbox" has the meaning described in Section 2.1.8 (The Collateral
Account).
"Material Adverse Effect" means a material adverse effect upon the (i)
business, properties, operations or financial condition of the Borrowers, taken
as a whole, (ii) ability of the Borrowers to perform their respective
obligations under the Financing Documents, (iii) ability of the Lenders to
enforce their rights and remedies under the Financing Documents, or (iv) value
of, or the ability of the Agents and/or the Lenders to realize upon the value
of, the Collateral as security for the Obligations and/or the Agents'
Obligations with the priority required by this Agreement.
"Multi-Currency Agent" means a Person who is designated by NationsBank to
perform the duties of Multi-Currency Agent and who has assumed those duties by a
joinder to this Agreement, and shall include any successor to the Multi-Currency
Agent appointed pursuant to 8.7.3(Successor Agents).
"Multi-Currency Lender" means such Lenders as shall be agreed from time to
time among the Lenders, the Multi-Currency Agent, the Administrative Agent and
the Borrowers to be Multi-Currency Lenders.
"Multi-Currency Letter of Credit" shall have the meanings described in
Section 2.2.1 (Letters of Credit).
"Multi-Currency Letter of Credit Issuer" means the Multi-Currency Agent.
"Multi-Currency Letter of Credit Obligations" means, at any time, the sum
of, without duplication, all Letter of Credit Obligations with respect to
Multi-Currency Letters of Credit.
"Multi-Currency Participant" shall have the meaning provided in 2.3.1.
"Multi-Currency Revolving Loan", and, collectively, the "Multi-Currency
Revolving Loans" have the meaning set forth in Section 2.1.1(d).
"Multi-employer Plan" means a Plan which is a Multi-employer plan as defined
in Section 4001(a)(3) of ERISA.
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29
"Net Outstandings" of any Lender means, at any time, the sum of (a) all
amounts paid by such Lender (other than pursuant to Section 8.5
(Indemnification)) to the Administrative Agent in respect to the Revolving Loan
or otherwise under this Agreement, minus (b) all amounts paid by the
Administrative Agent to such Lender which are received by the Administrative
Agent and which, pursuant to this Agreement, are paid over to such Lender for
application in reduction of the outstanding principal balance of the Revolving
Loan.
"Non-Ratable Loan" means an advance under the Revolving Loan made by
NationsBank in accordance with the provisions of Section 2.7.3(b) (Selection of
Settlement Dates).
"Note" means any Revolving Credit Note or any Capital Expenditure Line Note
as the case may be, and "Notes" means collectively each Revolving Credit Note,
each Capital Expenditure Line Note, and any other promissory note which may from
time to time evidence all or any portion of the Obligations.
"Obligations" means all present and future indebtedness, duties,
obligations, and liabilities, whether now existing or contemplated or hereafter
arising, of any one or more of the Borrowers to the Lenders and/or
Administrative Agent and/or the other Agents under, arising pursuant to, in
connection with and/or on account of the provisions of this Agreement, each
Note, each Security Document, Foreign Exchange Protection Agreement, Interest
Rate Protection Agreement and/or any of the other Financing Documents, the
Loans, and/or any of the Facilities including, without limitation, the principal
of, and interest on, each Note, late charges, the Fees, Interest Rate Exposure,
Foreign Exchange Exposure, Enforcement Costs, and prepayment fees (if any),
letter of credit fees or fees charged with respect to any guaranty of any letter
of credit; whether owed to the Administrative Agent, other Agents, the Lenders,
and/or to NationsBank or its Affiliates pursuant to or in connection with the
transactions contemplated by any of the Financing Documents of any nature
whatsoever regardless of whether such debts, obligations and liabilities be
direct, indirect, primary, secondary, joint, several, joint and several, fixed
or contingent; and also means any and all renewals, extensions, substitutions,
amendments, restatements and rearrangements of any such debts, obligations and
liabilities.
"Origination Fee" has the meaning described in Section 2.6.6 (Origination
Fee).
"Outstanding Letter of Credit Obligations" has the meaning described in
Section 2.2.3 (Terms of Letters of Credit).
"PBGC" means the Pension Benefit Guaranty Corporation.
"Permitted Liens" means: (a) Liens for Taxes which are not delinquent or
which the Administrative Agent has determined in the exercise of its sole and
absolute discretion (i) are being diligently contested in good faith and by
appropriate proceedings, and such contest operates to suspend collection of the
contested Taxes and enforcement of a Lien, (ii) the respective Borrower has the
financial ability to pay, with all penalties and interest, at all times without
materially and adversely affecting such Borrower, and (iii) are not, and will
not be with appropriate filing, the giving of notice and/or the passage of time,
entitled to priority over any Lien of the Administrative Agent and/or the
Lenders; (b) deposits or pledges to secure obligations under workers'
compensation, social security or similar laws, or under unemployment
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insurance in the ordinary course of business; (c) Liens securing the
Obligations; (d) judgment Liens to the extent the entry of such judgment does
not constitute an Event of Default under the terms of this Agreement or result
in the sale or levy of, or execution on, any of the Collateral; (e) Liens
securing the Senior Notes but only to the limited extent (i) such Liens do not
cover any Collateral described in Section 3.2, (ii) the property and assets
covered by such Liens equally and ratably secure the Obligations and the Agents'
Obligations by Liens which arose by operation of Section 3.4, and (iii) the
failure to grant such Liens at the time the Liens were granted to secure the
Obligations and the Agents' Obligations would have constituted an event of
default under the Indentures (excluding any modifications thereto), (f)
statutory liens of landlords, statutory liens of carriers, warehousemen,
mechanics, suppliers, materialmen and repairmen and other statutory liens which
arise by operation of law, which liens are incurred in the ordinary course of
business and which liens are not overdue for a period of more than 60 days or
are being contested in good faith by appropriate proceedings diligently pursued
provided that in the case of any such contest (i) any proceedings commenced for
the enforcement of such liens and encumbrances shall have been duly suspended;
and (ii) such provision for the payment of such liens and encumbrances has been
made on the books of such Person as may be required by GAAP; (g) easements,
zoning restrictions and other similar encumbrances with respect to real property
which do not interfere materially with the ordinary conduct of the business of
the Borrowers; (h) Liens arising from the filing of UCC financing statements for
precautionary purposes in connection with true leases of personal property; and
(i) such other Liens, if any, as are set forth on Schedule 4.1.21. attached
hereto and made a part hereof.
"Permitted Uses" means (a) with respect to the initial advance under the
Revolving Loan, the repayment of the existing indebtedness under the Parent's
7.68% Senior Notes due 2004 and to Comerica Bank and transaction costs related
to the closing of this Agreement, (b) with respect to the initial advance under
the Capital Expenditure Line, the repayment of the existing equipment financing
indebtedness under the Borrowers' credit facility with Comerica Bank, (c) the
purchase of equipment or the repayment of any advances under the Revolving Loan
used for the purchase of equipment, and (d) with respect to subsequent advances
under the Revolving Loan, the ongoing, ordinary course working capital needs of
each Borrower's business.
"Person" means and includes an individual, a corporation, a partnership, a
joint venture, a limited liability company or partnership, a trust, an
unincorporated association, a Governmental Authority, or any other organization
or entity.
"Plan" means any pension plan that is covered by Title IV of ERISA and in
respect of which any Borrower or a Commonly Controlled Entity is an "employer"
as defined in Section 3 of ERISA.
"Post-Default Rate" means the Prime Rate plus the Applicable Margin plus two
hundred (200) basis points.
"Prepayment" means a Revolving Loan Mandatory Prepayment, a Revolving Loan
Optional Prepayment or a Capital Expenditure Line Optional Prepayment, as the
case may be, and "Prepayments" mean collectively all Revolving Loan Mandatory
Prepayments, all Revolving Loan Optional Prepayments and all Capital Expenditure
Line Optional Prepayments.
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31
"Pricing Ratio" means the Funded Debt to EBITDA Ratio.
"Prime Rate" means the floating and fluctuating per annum prime commercial
lending rate of interest of the Administrative Agent, as established and
declared by the Administrative Agent at any time or from time to time. The Prime
Rate shall be adjusted automatically, without notice, as of the effective date
of any change in such prime commercial lending rate. The Prime Rate does not
necessarily represent the lowest rate of interest charged by the Administrative
Agent or any of the Lenders to borrowers.
"Pro Rata Share" means at any time and as to any Lender, the percentage
derived by dividing the unpaid principal amount of the Loans and Letter of
Credit Obligations owing to that Lender by the aggregate unpaid principal amount
of all Loans and Letter of Credit Obligations then outstanding; or if no Loans
or Letter of Credit Obligations are outstanding, by dividing the total amount of
such Lender's Commitments by the total amount of the Commitments of the
Administrative Agent and all of the Lenders.
"Purchase Agreements" means the collective reference to each assignment and
other agreement by which a Local Currency Borrower transfers all of its accounts
and related rights to the Parent for the purpose of having such accounts
included among the Assigned Local Currency Receivables, and further means each
acknowledgement by a Local Currency Borrower that each such assignment and
agreement is subject to an Assignment of Purchase Agreement.
"Receivable" means one of each Borrower's now owned and hereafter owned,
acquired or created Accounts, chattel paper, General Intangibles and instruments
which are part of the Collateral; and "Receivables" means all of each Borrower's
now or hereafter owned, acquired or created Accounts, chattel paper, General
Intangibles and instruments which are part of the Collateral, and all cash and
non-cash proceeds and products thereof.
"Relevant Currency Time" means, for any Borrowing in any currency, the local
time in the city where the Appropriate Payment Office for such currency is
located.
"Reportable Event" means any of the events set forth in Section 4043(c) of
ERISA or the regulations thereunder.
"Reserve Percentage" means, at any time, the then current maximum rate for
which reserves (including any basic, special, supplemental, marginal and
emergency reserves) are required to be maintained by member banks of the Federal
Reserve System under Regulation D of the Board of Governors of the Federal
Reserve System against "Eurocurrency liabilities", as that term is defined in
Regulation D. Without limiting the effect of the foregoing, the Reserve
Percentage shall reflect any other reserves required to be maintained by such
member banks with respect to (i) any category of liabilities which includes
deposits by reference to which the Eurodollar Rate is to be determined, or (ii)
any category of extensions of credit or other assets which include Eurodollar
Loans. The Eurodollar Rate shall be adjusted automatically on and as of the
effective date of any change in the Reserve Percentage.
"Responsible Officer" means for each Borrower, its chief executive officer
or president or, with respect to financial matters, its chief financial officer
or Treasurer.
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"Requisite Lenders" means at any time of determination one or more of the
Lenders holding at least sixty-six and two-thirds percent (66-2/3%) of the
Commitments.
"Revolving Credit Commitment" means the agreement of a Lender relating to
the making the Revolving Loan and advances thereunder subject to and in
accordance with the provisions of this Agreement; and "Revolving Credit
Commitments" means the collective reference to the Revolving Credit Commitment
of each of the Lenders.
"Revolving Credit Commitment Period" means the period of time from the
Closing Date to the Business Day preceding the Revolving Credit Termination
Date.
"Revolving Credit Committed Amount" has the meaning described in Section
2.1.1 (Revolving Credit Facility).
"Revolving Credit Expiration Date" means May 31, 2003, extending
automatically for successive periods of one (1) year (but in no event later than
May 31, 2008) unless the Administrative Agent in the exercise of its sole and
absolute discretion has notified the Parent, or the Parent in the exercise of
its sole and absolute discretion has notified the Administrative Agent, no later
than the February 28th immediately preceding the next scheduled Revolving Credit
Expiration Date of its intention to terminate the Revolving Credit Facility as
of the next scheduled Revolving Credit Expiration Date..
"Revolving Credit Facility" means the facility established by the Lenders
pursuant to Section 2.1 (Revolving Credit Facility).
"Revolving Credit Note" and "Revolving Credit Notes" have the meanings
described in Section 2.1.5 (Revolving Credit Notes).
"Revolving Credit Pro Rata Share" has the meaning described in Section 2.1.1
(Revolving Credit Facility).
"Revolving Credit Termination Date" means the earlier of (a) the Revolving
Credit Expiration Date, or (b) the date on which the Revolving Credit
Commitments are terminated pursuant to Section 7.2 (Remedies) or otherwise.
"Revolving Credit Unused Line Fee" and "Revolving Credit Unused Line Fees"
have the meanings described in Section 2.1.10 (Revolving Credit Unused Line
Fee).
"Revolving Loan" has the meaning described in Section 2.1.1 (Revolving
Credit Facility).
"Revolving Loan Account" has the meaning described in Section 2.1.9
(Revolving Loan Account).
"Revolving Loan Mandatory Prepayment" and "Revolving Loan Mandatory
Prepayments" have the meanings described in Section 2.1.6 (Mandatory Prepayments
of Revolving Loan).
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33
"Revolving Loan Optional Prepayment" and "Revolving Loan Optional
Prepayments" have the meanings described in Section 2.1.7 (Optional Prepayments
of Revolving Loan).
"Security Documents" means collectively any assignment, pledge agreement,
security agreement, mortgage, deed of trust, deed to secure debt, financing
statement and any similar instrument, document or agreement under or pursuant to
which a Lien is now or hereafter granted to, or for the benefit of, the
Administrative Agent and/or the Lenders on any real or personal property of any
Person to secure all or any portion of the Obligations, all as the same may from
time to time be amended, restated, supplemented or otherwise modified,
including, without limitation, this Agreement, Stock Pledge Agreements, the
Assignments of Patents, the Assignments of Trademarks, and the Assignments of
Purchase Agreement.
"Security Procedures" means the rules, policies and procedures adopted and
implemented by the Administrative Agent and its Affiliates at any time and from
time to time with respect to security procedures and measures relating to
electronic funds transfers, all as the same may be amended, restated,
supplemented, terminated, or otherwise modified at any time and from time to
time by the Administrative Agent in its sole and absolute discretion.
"Senior Notes" means the collective reference to (a) $110,000,000 aggregate
principal amount 9-7/8% Senior Notes due 2005 issued pursuant to the provisions
of an indenture dated as of July 27, 1995, among the Parent, certain of the
Domestic Borrowers as the Guarantors (as defined herein), and Bankers Trust
Company, as trustee , and (b) $100,000,000 aggregate principal amount 10-1/8%
Senior Notes due 2007 issued pursuant to the provisions of an indenture dated as
of December 15, 1997, among the Parent, certain of the Domestic Borrowers as the
Guarantors (as defined herein), and Bankers Trust Company, as trustee.
"Senior Notes Indentures" means the collective reference to the indentures
described in the definition of "Senior Notes."
"Senior Notes Trustees" means the collective reference to the trustees under
the Senior Notes Indentures."
"Settlement Date" means each Business Day after the Closing Date selected by
the Administrative Agent in its sole discretion subject to and in accordance
with the provisions of Section 2.7.3 (Settlement Procedures as to Revolving
Loan) as of which a Settlement Report is delivered by the Administrative Agent
and on which settlement is to be made among the Lenders in accordance with the
provisions of Section 2.7 (Settlement Among Lenders).
"Settlement Report" means each report prepared by the Administrative Agent
and delivered to each Lender and setting forth, among other things, as of the
Settlement Date indicated thereon and as of the next preceding Settlement Date,
the aggregate outstanding principal balance of the Revolving Loan, each Lender's
Revolving Credit Pro Rata Share thereof, each Lender's Net Outstandings and all
Non-Ratable Loans made, and all payments of principal, interest and Fees
received by the Administrative Agent from the Borrowers during the period
beginning on such next preceding Settlement Date and ending on such Settlement
Date.
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34
"Spot Rate" means, as of any determination with respect to the conversion of
an amount in a currency into Dollars, the rate of exchange quoted at 11:00 a.m.
(Baltimore time) by "CRT" tele-rate service for the spot purchase in the foreign
exchange market in Chicago of such amount of that currency with Dollars.
"State" means the State of Maryland.
"Stock Pledge Agreements" means collective reference to each pledge,
assignment and security agreement dated the date hereof from the Parent and from
Walbro Automotive Corporation to the Administrative Agent for the benefit of the
Lenders ratably and the Agents, as the same may from time to time be amended,
restated, supplemented or otherwise modified covering collectively 100% of the
common stock of the Domestic Borrowers (but not the Parent) and 65% of the
common stock of the Local Currency Borrowers.
"Subordinated Indebtedness" means all Indebtedness for Borrowed Money,
including, without limitation, the Subordinated Debt, incurred at any time by
any one or more of the Borrowers, which is in amounts, subject to repayment
terms, and subordinated to the Obligations, as set forth in one or more written
agreements, all in form and substance satisfactory to the Administrative Agent
in its sole and absolute discretion.
"Subsidiary" means as to any Person, any corporation, association or other
business entity in which such Person or one or more of its Subsidiaries or such
Person and one or more of its Subsidiaries owns sufficient equity or voting
interests to enable it or them (as a group) ordinarily, in the absence of
contingencies, to elect a majority of the directors (or Persons performing
similar functions of such entity), and any partnership or joint venture if more
than 50% of the interest in the profits or capital thereof is owned by such
Person or one or more of its Subsidiaries or such Person and one or more of its
Subsidiaries (unless such partnership can and does ordinarily take major
business actions without the prior approval of such Person or one or more of its
Subsidiaries).
"Subsidiary Securities" means the collective reference to each and every
"investment property" (as defined under the provisions of Title 9 of the
Uniform Commercial Code in the State, whether or not that Title actually
applies to or governs) of the Parent of any one or more of the Borrowers in a
Subsidiary.
"Syndication Date" shall mean the date upon which the Administrative Agent
determines (and notifies the Borrowers) that the primary syndication (and
resultant addition of Persons as Lenders pursuant to Section 9.5) has been
completed (it being understood and agreed that prior to the 180th day after the
Closing Date the Administrative Agent agrees to use its reasonable efforts to
have the Syndication Date occur on the last day of an Interest Period applicable
to outstanding Eurodollar Loans).
"Taxes" means all taxes and assessments whether general or special, ordinary
or extraordinary, or foreseen or unforeseen, of every character (including all
penalties or interest thereon), which at any time may be assessed, levied,
confirmed or imposed by any Governmental Authority on any or all of the
Borrowers or any of its or their properties or assets or any part thereof or in
respect of any of its or their franchises, businesses, income or profits.
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"Total Capital Expenditure Line Committed Amount" has the meaning described
in Section 2.4.1.
"Total Revolving Credit Committed Amount" has the meaning described in
Section 2.1.1.
"Type" means any type of Loan determined with respect to the interest option
applicable thereto, i.e., a Base Rate Loan or a Eurodollar Loan.
"Unused Availability" means as of the date of determination the Borrowing
Base minus the outstanding principal amount of the aggregate of (a) the
Revolving Loan plus (b) without duplication, Outstanding Letter of Credit
Obligations plus (c) Interest Rate Exposure plus (d) Foreign Exchange Exposure.
"US Dollars" and the sign "$" shall each mean freely transferable lawful
money of the United States of America.
"US Letter of Credit" shall have the meanings described in Section 2.2.1
(Letters of Credit).
"US Letter of Credit Issuer" shall mean NationsBank.
"Uniform Commercial Code" means, unless otherwise provided in this
Agreement, the Uniform Commercial Code as adopted by and in effect from time to
time in the State or in any other jurisdiction, as applicable.
"Wholly Owned Subsidiary" means any corporation all the shares of stock of
all classes of which (other than directors' qualifying shares) at the time are
owned directly or indirectly by a Borrower and/or by one or more Wholly Owned
Subsidiaries of a Borrower.
"Wire Transfer Procedures" means the rules, policies and procedures adopted
and implemented by the Administrative Agent and its Affiliates at any time and
from time to time with respect to electronic funds transfers, including, without
limitation, the Security Procedures, all as the same may be amended, restated,
supplemented, terminated or otherwise modified at any time and from time to time
by the Administrative Agent in its sole and absolute discretion.
"Year 2000 Problem" has the meaning set forth in Section 4.1.29 (Year 2000
Compliance).
Section 1.2 Accounting Terms and Other Definitional Provisions.
Unless otherwise defined herein, as used in this Agreement and in any
certificate, report or other document made or delivered pursuant hereto,
accounting terms not otherwise defined herein, and accounting terms only partly
defined herein, to the extent not defined, shall have the respective meanings
given to them under GAAP, as consistently applied to the applicable Person.
Unless otherwise defined herein, all terms used herein which are defined by the
Uniform Commercial Code shall have the same meanings as assigned to them by the
Uniform Commercial Code unless and to the extent varied by this Agreement. The
words "hereof",
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"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 article, section, subsection, schedule and exhibit
references are references to articles, sections or subsections of, or schedules
or exhibits to, as the case may be, this Agreement unless otherwise specified.
As used herein, the singular number shall include the plural, the plural the
singular and the use of the masculine, feminine or neuter gender shall include
all genders, as the context may require. Reference to any one or more of the
Financing Documents shall mean the same as the foregoing may from time to time
be amended, restated, substituted, extended, renewed, supplemented or otherwise
modified. Reference in this Agreement and the other Financing Documents to the
"Borrower", the "Borrowers", "each Borrower" or otherwise with respect to any
one or more of the Borrowers shall mean each and every Borrower and any one or
more of the Borrowers, jointly and severally, unless a specific Borrower is
expressly identified.
ARTICLE II
THE CREDIT FACILITIES
Section 2.1 The Revolving Credit Facility.
2.1.1 Revolving Credit Facility.
(a) Subject to and upon the provisions of this Agreement, the
Lenders collectively, but severally, establish a revolving credit facility in
favor of the Borrowers. The amount of each Lender's commitment to lend under the
Revolving Loan is herein called such Lender's "Revolving Credit Committed
Amount" and is set forth below each Lender's signature to this Agreement. The
total of each Lender's Revolving Credit Committed Amount equals One Hundred
Twenty-five Million Dollars ($125,000,000) and is herein called the "Total
Revolving Credit Committed Amount." The proportionate share set forth below each
Lender's signature is herein called such Lender's "Revolving Credit Pro Rata
Share." Neither the Administrative Agent nor any of the Lenders shall be
responsible for the Revolving Credit Commitment of any other Lender, nor will
the failure of any Lender to perform its obligations under its Revolving Credit
Commitment in any way relieve any other Lender from performing its obligations
under its Revolving Credit Commitment.
(b) During the Revolving Credit Commitment Period, any or all of
the Borrowers may request advances under the Revolving Credit Facility (each, a
"Revolving Loan" and, collectively, the "Revolving Loans") in accordance with
the provisions of this Agreement; provided that after giving effect to any
Borrower's request:
(i) the aggregate outstanding principal balance of the
Revolving Loans and all Letter of Credit Obligations would not exceed the
lesser of (A) the Total Revolving Credit Committed Amount minus Interest
Rate Exposure minus Foreign Exchange Exposure, or (B) the Borrowing Base;
and
(ii) the outstanding principal balance of each Lender's
Pro Rata Share of the Revolving Loans and of the Letter of
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Credit Obligations would not exceed the lesser of (A) such Lender's
Revolving Credit Committed Amount minus an amount equal to such Lender's
Revolving Credit Pro Rata Share multiplied by the aggregate of (1) Interest
Rate Exposure plus (2) the Foreign Exchange Exposure, or (B) such Lender's
Revolving Credit Pro Rata Share of the Borrowing Base.
(c) As part of the Revolving Credit Facility and subject to the
further limitations of 2.1.1(b), each Lender severally agrees, on the terms and
conditions set forth herein, to make Revolving Loans denominated in US Dollars
(each, a "US Revolving Loan" and, collectively, the "US Revolving Loans") to the
Parent and the Domestic Borrowers from time to time.
(d) As part of the Revolving Credit Facility and subject to the
further limitations of 2.1.1(b) and subject to fulfillment of the additional
conditions set forth in Section 5.3, each Multi-Currency Lender agrees, on the
terms and conditions set forth in this Agreement, to make its Revolving Credit
Pro Rata Share of Revolving Loans denominated in the currency (which shall be an
Approved Foreign Currency) of the jurisdiction where the applicable Local
Currency Borrower is located (each, a "Multi-Currency Revolving Loan", and,
collectively, the "Multi-Currency Revolving Loans") to any Local Currency
Borrower from time to time in an amount which, when added to the Multi-Currency
Lender's Revolving Credit Pro Rata Share of the aggregate principal amount of
all Multi-Currency Revolving Loans then outstanding and owed by such Local
Currency Borrower plus the aggregate amount of all Multi-Currency Letter of
Credit Obligations issued for the account of such Local Currency Borrower at
such time, would not exceed the applicable limitations established pursuant to
Section 5.3
(e) Each Revolving Loan (i) shall be denominated in US Dollars
or an Approved Foreign Currency, and (ii) except as hereinafter provided, may,
at the option of the Borrower to which such Revolving Loan was made, be incurred
and maintained as and/or converted into Base Rate Loans or Eurodollar Loans,
provided that (x) all Revolving Loans made as part of the same Borrowing shall,
unless otherwise specifically provided herein, consist of Revolving Loans of the
same Type and (y) unless the Administrative Agent has determined that the
Syndication Date has occurred (at which time this clause (y) shall no longer be
applicable), each Borrowing of Eurodollar Loans may only have an Interest Period
of one month.
(f) Notwithstanding any other provision of this Agreement to the
contrary, the Borrowers and the Administrative Agent acknowledge and agree that
all Revolving Loans shall be US Revolving Loans and all Letters of Credit shall
be US Letters of Credit unless and until the Parent gives the Administrative
Agent notice that the Parent wishes to obtain Multi-Currency Revolving Loans and
a Multi-Currency Agent has been designated by the Administrative Agent and has
joined into this Agreement to assume the duties of Multi-Currency Agent under
this Agreement and the other Financing Documents and the other conditions set
forth in Section 5.3 have been met. The parties to this Agreement agree that to
be effective such joinder and assumption may be in a writing signed only by the
Administrative Agent and the Multi-Currency Agent, with a copy delivered to the
Parent, provided, however, the parties agree to execute and deliver promptly
such acknowledgements and agreements with respect thereto as the Administrative
Agent may reasonably request.
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2.1.2 Procedure for Making Advances Under the Revolving Loans;
Lender Protection Loans.
(a) Whenever a Borrower desires to incur Loans, (i)
with respect to any Borrowing of US Revolving Loans, it shall give the
Administrative Agent at the Appropriate Notice Office, prior to noon (Baltimore
City time), (x) at least three Business Days' prior written notice (or
telephonic notice promptly confirmed by telecopy) of each Borrowing of
Eurodollar Loans and (y) same day written notice (or telephonic notice promptly
confirmed by telecopy) of each Borrowing of Base Rate Loans to be made hereunder
and (ii) with respect to any Borrowing of Multi-Currency Revolving Loans, it
shall give the Multi-Currency Agent at the Appropriate Notice Office, prior to
12:00 P.M. (Relevant Currency Time), (x) at least three Business Days' prior
written notice (or telephonic notice promptly confirmed by telecopy) of each
Borrowing of Eurodollar Loans and (y) at least one Business Day's prior written
notice (or telephonic notice promptly confirmed by telecopy) of each Borrowing
of Base Rate Loans to be made hereunder. Each such notice (each, a "Loan
Notice") shall, except under the circumstances described in Section 2.5.3, be
irrevocable, and, in the case of each written notice and each confirmation of
telephonic notice, shall specify (i) the aggregate principal amount and the
Approved Foreign Currency, if any, of the Loans to be made pursuant to such
Borrowing, (ii) the date of such Borrowing (which shall be a Business Day), (ii)
whether the respective Borrowing shall consist of Base Rate Loans or, to the
extent permitted hereunder, Eurodollar Loans and, if Eurodollar Loans, the
Interest Period to be initially applicable thereto and (iii) in the case of a
Borrowing of Multi-Currency Loans, the Multi-Currency Lender requested to make
such Multi-Currency Revolving Loan. The Administrative Agent or the
Multi-Currency Agent, as the case may be, shall promptly give each Lender
written notice (or telephonic notice promptly confirmed in writing) of each
proposed Borrowing, of such Lender's proportionate share thereof, if any, and of
the other matters covered by the Loan Notice. The Administrative Agent or the
Multi-Currency Agent, as applicable, promptly will make available to the
requesting Borrower by depositing to its account at such Appropriate Payment
Office the aggregate of the amounts received made available in the type of funds
received.
(b) Without in any way limiting the obligation of any
Borrower to confirm in writing any telephonic notice permitted to be given
hereunder, the Administrative Agent, the Multi-Currency Agent, or any Letter of
Credit Issuer (in the case of the issuance of Letters of Credit), as the case
may be, may prior to receipt of written confirmation act without liability upon
the basis of such telephonic notice, believed by the Administrative Agent, the
Multi-Currency Agent, or such Letter of Credit Issuer, as the case may be, in
good faith to be from a Responsible Officer of the relevant Borrower. In each
such case, each Borrower hereby waives the right to dispute the Administrative
Agent's, the Multi-Currency Agent's, or any Letter of Credit Issuer's record of
the terms of such telephonic notice, absent manifest error.
(c) In the case of any Borrowing that the related Loan
Notice specifies is to be comprised of Eurodollar Loans, the Parent and the
requesting Borrower shall indemnify, except under the circumstances described in
Section 2.5.3, each Lender against any loss, cost or expense incurred by such
Lender as a result of any failure to fulfill on or before the date specified in
such Loan Notice for such Borrowing the applicable conditions set forth in
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Section 5.2 (Conditions to All Extensions of Credit), including, without
limitation, any loss, cost or expense incurred by reason of the liquidation or
reemployment of deposits or other funds acquired by such Lender to fund the Loan
to be made by such Lender as part of such Borrowing when such Loan, as a result
of such failure, is not made on such date.
(d) Upon receipt of any such Loan Notice, the
Administrative Agent shall promptly notify each Lender of the amount of each
advance to be made by such Lender on the requested borrowing date under such
Lender's Revolving Credit Commitment.
(e) No later than 1:00 p.m. (Baltimore City Time) on
each requested borrowing date for the making of advances under the Revolving
Credit Facility, each Lender shall, if it has received timely notice from the
Administrative Agent of the Borrowers' request for such advances, make
available to the Administrative Agent, in funds immediately available to
the Administrative Agent at the Administrative Agent's office set forth in
Section 9.1 (Notices), such Lender's Pro Rata Share of the advances to be made
on such date.
(f) In addition, each of the Borrowers hereby irrevocably
authorize the Lenders at any time and from time to time, without further request
from, but with notice to follow to the Parent, to make advances under the
Revolving Credit Facility which the Administrative Agent, in its sole and
absolute discretion, deems necessary or appropriate to protect the interests of
the Administrative Agent, the Multi-Currency Agent, other Agents and/or any or
all of the Lenders under this Agreement, including, without limitation, advances
under the Revolving Credit Facility made to cover debit balances in the
Revolving Loan Account, principal of, and/or interest on, any Loan, the
Obligations (including any Letter of Credit Obligations), and/or Enforcement
Costs, prior to, on, or after the termination of other advances under this
Agreement, regardless of whether the outstanding principal amount of the
Revolving Credit Facility which the Lenders may advance hereunder exceeds the
Total Revolving Credit Committed Amount.
2.1.3 Borrowing Base.
As used in this Agreement, the term "Borrowing Base" means at any
time, an amount equal to the aggregate of (a) eighty-five percent (85%) of the
amount of Eligible Receivables, plus (b) the lesser of (i) the sum of sixty
percent (60%) of the amount of Eligible Inventory consisting of raw materials
(other than resin raw materials) and finished goods plus seventy percent (70%)
of the amount of Eligible Inventory consisting of resin raw materials or (ii)
Fifty Million Dollars ($50,000,000), less (c) such reserves as the
Administrative Agent shall deem proper in its reasonable judgment based on
customary asset-based lending practices.
The Borrowing Base shall be computed based on the Borrowing Base
Report most recently delivered to and accepted by the Administrative Agent in
its sole and absolute discretion. In the event the Borrowers fail to furnish a
Borrowing Base Report required by Section 2.1.4 (Borrowing Base Report), or in
the event the Administrative Agent believes that a Borrowing Base Report is no
longer accurate, the Administrative Agent may, in its sole and absolute
discretion exercised from time to time and without limiting other rights and
remedies under this Agreement, but with a substantially concurrent notice to the
Borrowers, direct the
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Lenders to suspend the making of or limit advances under the Revolving Credit
Facility. The Borrowing Base shall be subject to reduction by amounts credited
to the Collateral Account since the date of the most recent Borrowing Base
Report and by the amount of any Receivable or any Inventory which was included
in the Borrowing Base but which the Administrative Agent determines in its good
faith discretion fails to meet the respective criteria applicable from time to
time for Eligible Receivables or Eligible Inventory.
If at any time the total of the aggregate principal amount of the
Revolving Loans, Outstanding Letter of Credit Obligations, plus Interest Rate
Exposure plus Foreign Exchange Exposure, exceeds the Borrowing Base, a borrowing
base deficiency ("Borrowing Base Deficiency") shall exist. Each time a Borrowing
Base Deficiency exists, the Borrowers at the sole and absolute discretion of the
Administrative Agent exercised from time to time shall pay the Borrowing Base
Deficiency ON DEMAND to the Administrative Agent for the benefit of the Lenders
from time to time.
Without implying any limitation on the Administrative Agent's
discretion with respect to the Borrowing Base, the criteria for Eligible
Receivables and for Eligible Inventory contained in the respective definitions
of Eligible Receivables and of Eligible Inventory are in part based upon the
business operations of the Borrowers existing on or about the Closing Date and
upon information and records furnished to the Administrative Agent by the
Borrowers. If at any time or from time to time hereafter, the business
operations of the Borrowers change or such information and records furnished to
the Administrative Agent is incorrect or misleading, the Administrative Agent in
its discretion may at any time and from time to time during the duration of this
Agreement change such criteria or add new criteria. The Administrative Agent
shall communicate such changed or additional criteria to the Borrowers from time
to time either orally or in writing.
2.1.4 Borrowing Base Report.
The Borrowers will furnish to the Administrative Agent no less
frequently than monthly and at such other times as may be requested by the
Administrative Agent a report of the Borrowing Base (each a "Borrowing Base
Report"; collectively, the "Borrowing Base Reports") in the form required from
time to time by the Administrative Agent, appropriately completed and duly
signed. The Borrowing Base Report shall contain the amount and payments on the
Receivables, the value of Inventory, and the calculations of the Borrowing Base,
all in such detail, and accompanied by such supporting and other information, as
the Administrative Agent may from time to time request. Upon the Administrative
Agent's request and upon the creation of any Receivables, or at such intervals
as the Administrative Agent may require, the Borrowers will provide the
Administrative Agent with (a) confirmatory assignment schedules; (b) copies of
Account Debtor invoices; (c) evidence of shipment or delivery; and (d) such
further schedules, documents and/or information regarding the Receivables and
the Inventory as the Administrative Agent may reasonably require. The items to
be provided under this subsection shall be in form satisfactory to the
Administrative Agent, and certified as true and correct by a Responsible
Officer, and delivered to the Administrative Agent from time to time solely for
the Administrative Agent's convenience in maintaining records of the Collateral.
Any Borrowers' failure to deliver any of such items to the Administrative Agent
shall not affect, terminate,
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modify, or otherwise limit the Liens of the Administrative Agent and the Lenders
in the Collateral.
2.1.5 Revolving Credit Notes.
The obligation of the Borrowers to pay each Lender's Pro Rata Share of
the Revolving Loan, with interest, shall be evidenced by a series of promissory
notes (as from time to time extended, amended, restated, supplemented or
otherwise modified, collectively the "Revolving Credit Notes" and individually a
"Revolving Credit Note") substantially in the form of EXHIBIT "B-1" attached
hereto and made a part hereof, with appropriate insertions. Each Lender's
Revolving Credit Note shall be dated as of the Closing Date, shall be payable to
the order of such Lender at the times provided in the Revolving Credit Note, and
shall be in the principal amount of such Lender's Revolving Credit Pro Rata
Share. Each of the Borrowers acknowledge and agree that, if the outstanding
principal balance of the Revolving Loan outstanding from time to time exceeds
the aggregate face amount of the Revolving Credit Notes, the excess shall bear
interest at the rates provided from time to time for advances under Revolving
Loan evidenced by the Revolving Credit Notes and shall be payable, with accrued
interest, ON DEMAND. The Revolving Credit Notes shall not operate as a novation
of any of the Obligations or nullify, discharge, or release any such Obligations
or the continuing contractual relationship of the parties hereto in accordance
with the provisions of this Agreement.
2.1.6 Mandatory Prepayments of Revolving Loan.
The Borrowers shall make the mandatory prepayments (each a "Revolving
Loan Mandatory Prepayment" and collectively, the "Revolving Loan Mandatory
Prepayments") of the Revolving Loan at any time and from time to time in such
amounts requested by the Administrative Agent pursuant to Section 2.1.3
(Borrowing Base) in order to cover any Borrowing Base Deficiency.
2.1.7 Optional Prepayments of Revolving Loan.
The Borrowers shall have the option at any time and from time to time
prepay (each a "Revolving Loan Optional Prepayment" and collectively the
"Revolving Loan Optional Prepayments") the Revolving Loan, in whole or in part
without premium or penalty.
2.1.8 The Collateral Accounts.
(a) The Borrowers will deposit, or cause to be deposited, all
Items of Payment into bank accounts designated or approved by the Administrative
Agent (collectively, the "Collateral Accounts; " each a "Collateral Account").
The Borrowers agree that following an Event of Default and/or if the Borrowers
at any time fail to maintain the availability required by the Section 2.1.12(b),
the Administrative Agent, at its option, shall have sole power of access to and
withdrawal from the Collateral Accounts. Each depository bank of a Collateral
Account shall confirm in a writing that, following notice from the
Administrative Agent, the depository bank will honor only the Administrative
Agent's instructions with respect to the Collateral Account for which it is the
depository.
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(b) Each deposit to the Collateral Accounts shall be made not
later than the next Business Day after the date of receipt of the Items of
Payment. The Items of Payment shall be deposited in precisely the form received,
except for the endorsements of the Borrowers where necessary to permit the
collection of any such Items of Payment, which endorsement the Borrowers hereby
agree to make. In the event the Borrowers fail to do so, the Borrowers hereby
authorize the Administrative Agent to make the endorsement in the name of any or
all of the Borrowers. Prior to such a deposit, the Borrowers will not commingle
any Items of Payment with any of the Borrowers' other funds or property, but
will hold them separate and apart in trust and for the account of the
Administrative Agent for the benefit of the Lenders ratably and the Agents.
(c) Notwithstanding the provisions of subsections (a) and (b)
above, prior to an Event of Default and/or the Borrowers' failure to maintain
the availability required by the Section 2.1.12(b), (i) the Parent may continue
to use its demand deposit account with Thumb National Bank consistent with past
practices and with balances consistent with the Parent's immediate cash needs
and (ii) the Local Currency Borrowers may continue to use their demand deposit
account with local banks consistent with past practices and with balances
consistent with their immediate cash needs.
(d) In addition, if so directed by the Administrative Agent
following an Event of Default and/or if the Borrowers at any time fail to
maintain the availability required by the Section 2.1.12(b), the Borrowers shall
direct the mailing of all Items of Payment from their Account Debtors to one or
more post-office boxes designated by the Administrative Agent, or to such other
additional or replacement post-office boxes pursuant to the request of the
Administrative Agent from time to time (collectively, the "Lockbox"). The
Administrative Agent shall have unrestricted and exclusive access to the
Lockbox.
(e) The Borrowers hereby authorize the Administrative Agent, from
and after the occurrence and during the continuation of an Event of Default,
and/or for so long as the Borrowers fail to maintain the availability required
by Section 2.1.12(b), to inspect all Items of Payment, endorse all Items of
Payment in the name of any or all of the Borrowers, and deposit such Items of
Payment in the Collateral Accounts. The Administrative Agent reserves the right,
exercised in its sole and absolute discretion, from and after the occurrence and
during the continuation of an Event of Default, and/or for so long as the
Borrowers fail to maintain the availability required by Section 2.1.12(b), to
provide to the Collateral Accounts credit prior to final collection of an Item
of Payment and to disallow credit for any Item of Payment which is
unsatisfactory to the Administrative Agent. In the event Items of Payment are
returned to the Administrative Agent for any reason whatsoever, the
Administrative Agent may, in the exercise of its discretion from time to time,
forward such Items of Payment a second time. Any returned Items of Payment shall
be charged back to the Collateral Accounts, the Revolving Loan Account, or other
account, as appropriate.
(f) Unless the Administrative Agent has notified the Borrowers
otherwise following an Event of Default and/or if the Borrowers at any time fail
to maintain the availability required by the Section 2.1.12(b), the Borrowers
may use the amounts
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deposited in the Collateral Accounts for those uses which are Permitted Uses for
the Revolving Loan after the Closing Date.
(g) In the event the Administrative Agent determines the
application of proceeds of the Collateral Accounts pursuant to this Section
2.1.8, the Administrative Agent will apply the whole or any part of the
collected funds received by the Administrative Agent from the Collateral
Accounts against the Revolving Loan (or with respect to Items of Payment which
are not proceeds of Accounts or Inventory or after an Event of Default, against
any of the Obligations).
2.1.9 Revolving Loan Account.
The Administrative Agent will establish and maintain a loan account on
its books (the "Revolving Loan Account") to which the Administrative Agent will
(a) debit (i) the principal amount of each advance under the Revolving Loan made
by the Lenders hereunder as of the date made, (ii) the amount of any interest
accrued on the Revolving Loan as and when due, and (iii) any other amounts due
and payable by the Borrowers to the Administrative Agent and/or the Lenders from
time to time under the provisions of this Agreement in connection with the
Revolving Loan, including, without limitation, Enforcement Costs, Fees, late
charges, and service and collection fees, as and when due and payable, and (b)
credit all payments made by the Borrowers to the Administrative Agent on account
of the Revolving Loan as of the date made including, without limitation, funds
credited to the Revolving Loan Account from the Collateral Account. The
Administrative Agent may debit the Revolving Loan Account for the amount of any
Item of Payment which is returned to the Administrative Agent unpaid. All credit
entries to the Revolving Loan Account are conditional and shall be readjusted as
of the date made if final and indefeasible payment is not received by the
Administrative Agent in cash or solvent credits. The Borrowers hereby promise to
pay to the order of the Administrative Agent for the ratable benefit of the
Lenders, ON DEMAND, an amount equal to the excess, if any, of all debit entries
over all credit entries recorded in the Revolving Loan Account under the
provisions of this Agreement. Any and all periodic or other statements or
reconciliations, and the information contained in those statements or
reconciliations, of the Revolving Loan Account shall be presumed conclusively to
be correct, and shall constitute an account stated between the Administrative
Agent, the Lenders and the Borrowers unless the Administrative Agent receives
specific written objection thereto from any Borrower and/or any Lender within
thirty (30) Business Days after such statement or reconciliation shall have been
sent by the Administrative Agent. Any and all periodic or other statements or
reconciliations, and the information contained in those statements or
reconciliations, of the Revolving Loan Account shall be final, binding and
conclusive upon the Borrowers in all respects, absent manifest error, unless the
Administrative Agent receives specific written objection thereto from the
Borrowers within thirty (30) Business Days after such statement or
reconciliation shall have been sent by the Administrative Agent.
2.1.10 Revolving Credit Unused Line Fee.
(a) The Borrowers shall pay to the Administrative Agent for the
ratable benefit of the Lenders a monthly revolving credit facility fee
(collectively, the "Revolving Credit Unused Line Fees" and individually, a
"Revolving Credit Unused Line Fee")
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based on the average daily unused and undisbursed portion of the Total Revolving
Credit Committed Amount in effect from time to time accruing during the
preceding month. The accrued and unpaid portion of the Revolving Credit Unused
Line Fee shall be paid by the Borrowers to the Administrative Agent on the first
day of each month, commencing on the first such date following the date hereof,
and on the Revolving Credit Termination Date.
(b) The Revolving Credit Unused Line Fee shall initially be
thirty-seven and one-half (37.5) basis points per annum. Changes in the
Revolving Credit Unused Line Fee shall be made not more frequently than
quarterly based on the Borrowers' Pricing Ratio from the fiscal quarter reports
required by Section 6.1.1(c), except that the first such determination shall be
made based on the Borrowers' annual financial statements required by Section
6.1.1(a) for the Borrowers' fiscal year ended December 31, 1998. The Revolving
Credit Unused Line Fee (expressed as basis points) shall vary depending upon the
Borrowers' Pricing Ratio, as follows:
-------------------------------------------------------------------------------
Pricing Ratio Revolving Credit Unused Line Fee
-------------------------------------------------------------------------------
Equal to or greater than 4.0 to 1.0 37.5
-------------------------------------------------------------------------------
Equal to or greater than 3.0 to 1.0 25.0
-------------------------------------------------------------------------------
Less than 3.0 to 1.0 12.5
-------------------------------------------------------------------------------
(c) Notwithstanding the foregoing, following the occurrence and
during the continuance of an Event of Default, at the option of the
Administrative Agent, the Revolving Credit Unused Line Fee shall equal to
thirty-seven and one-half (37.5) basis points per annum.
2.1.11 Early Termination Fee.
In the event of the termination by, or on behalf of, the Borrowers, of
the Revolving Credit Commitment, the Borrowers shall pay a fee (the "Early
Termination Fee") equal to following amount at the following times:
Period Early Termination Fee
------ ---------------------
Closing Date through and including, May 31, 1999 $500,000
June 1, 1999, through and including, May 31, 2000 $250,000
June 1, 2000 through and including, May 31, 2001 $100,000
Thereafter $0
Payment of the Revolving Loan in whole or in part by or on behalf of
the Borrowers, by court order or otherwise, following and as a result of the
institution of any bankruptcy proceeding by or against the Borrowers, shall be
deemed to be a prepayment of the Revolving Loan subject to the Early Termination
Fee provided in this subsection. The Early Termination Fee shall be paid to the
Administrative Agent for the ratable benefit of the Lenders.
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Notwithstanding the foregoing, there shall not, however, be an Early
Termination Fee due if the termination of the Revolving Credit Commitments and
Letters of Credit and repayment of the Revolving Credit Facility is made solely
as a result of (a) a replacement credit facility extended by NationsBank and/or
its Affiliates to the Borrowers, which generates sufficient proceeds and is in
fact used to repay all Obligations (including all Letter of Credit Obligations)
in full and, if, in connection with such repayment of all Obligations, all
Letters of Credit are terminated, secured by cash or back-to-back letter of
credit, and/or released or if the issuers release the Lenders from their
obligations to the issuer with respect to the Letters of Credit, or (b) a
simultaneous initial public offering of the Parent's common stock with net
proceeds to the Parent, of $20,000,000 or more, or (c) the generation and
retention of "excess cash flow" sufficient to have maintained the outstanding
principal balance of the Revolving Loan at zero for at least one fiscal quarter
and the demonstration to the Administrative Agent's reasonable satisfaction that
there is no use, need for or contemplation of senior revolving debt for the next
four (4) fiscal quarters. As used in this paragraph "excess cash flow" means for
any annual period of determination, as determined on a consolidated basis, an
amount equal to the Borrowers' EBITDA less Debt Service minus cash taxes paid,
minus increases in working capital plus decreases in working capital, minus
unfinanced Capital Expenditures, as shown on the annual financial statements for
such annual period, furnished to the Administrative Agent in accordance with
Section 6.1.1(a); or in the event that the Borrowers fail to deliver such
financial statements to the Administrative Agent as and when required, the
Administrative Agent shall estimate, in its good faith discretion, the amount of
excess cash flow for such period.
2.1.12 Required Availability under the Revolving Credit Facility.
(a) On the Closing Date, Unused Availability (after allowance
for the payment of the amount of the Permitted Uses of the Revolving Loan
required to be made on the Closing Date and the amount of the costs relating to
the closing of this Agreement (including, without limitation, applicable Fees,
recording costs, recording taxes, and the fees and expenses of the Borrowers'
and the Lender's professionals and allowance for the payment the amount of the
Borrowers' trade payables in the ordinary course of their businesses and after
giving effect to the receipt by the Administrative Agent of the net proceeds
from the sale on the Closing Date of the assets of Xxxxxx Manufacturing
Company) shall not be less than Twenty Million Dollars ($20,000,000).
(b) After the Closing Date, Unused Availability shall at no time
be less than Five Million Dollars ($5,000,000). The Parent agrees to use all
reasonable efforts to cause Walbro Automotive S. A., its Subsidiary corporation
organized under the laws of France, and Walbro Japan, Inc. its Subsidiary
corporation organized under the laws of Japan, to enter into Purchase Agreements
and provide such other documents and information as the Administrative Agent may
reasonably require, which would allow their respective accounts to be included
among Assigned Local Currency Receivables on or before June 30, 1998. In the
event of such inclusion for either or both of those Subsidiaries, Unused
Availability shall at no time be less than Ten Million Dollars ($10,000,000)
(c) The Borrowers shall make a Revolving Loan Mandatory
Prepayment pursuant to the provisions of Section 2.1.6 (Mandatory Prepayments
of Revolving Loan) to the extent necessary to achieve compliance with this
Section.
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Section 2.2 The Letter of Credit Facility.
2.2.1 Letters of Credit.
Subject to and upon the provisions of this Agreement, and as a
part of the Revolving Credit Commitments, each of the Borrowers, upon the prior
approval of the Administrative Agent, may obtain commercial and standby letters
of credit for drawing in US Dollars (each a "US Letter of Credit", and
collectively, the "US Letters of Credit") from the US Letter of Credit Issuer,
and for drawing in an Approved Foreign Currency (each a "Multi-Currency Letter
of Credit" and, collectively, the "Multi-Currency Letters of Credit") from the
Multi-Currency Letter of Credit Issuer (the US Letters of Credit and the
Multi-Currency Letters of Credit being collectively, the "Letters of Credit;"
and each a "Letter of Credit") from time to time from the Closing Date until
the Business Day preceding the Revolving Credit Termination Date. The Borrowers
will not be entitled to obtain a Letter of Credit unless (a) the Borrowers are
then able to obtain a Revolving Loan (subject to any applicable Approved Local
Currency or other restrictions) from the Lenders in an amount not less than the
proposed face amount of the Letter of Credit requested by the Borrowers, and
(b) the sum of the then Outstanding Letter of Credit Obligations (including the
amount of the requested Letter of Credit) does not exceed Twenty-five Million
Dollars ($25,000,000).
2.2.2 Letter of Credit Fees.
(a) The Borrowers shall pay to the Appropriate Letter of
Credit Issuer, for its own account, a fee of twenty-five (25) basis points per
annum of the aggregate face amount of the Letters of Credit outstanding on the
first day of the month, without regard for provisions contained in the Letters
of Credit which may give rise to a reduction in the outstanding principal
amount of the Letters of Credit unless such reduction has actually occurred
(each a "Letter of Credit Fronting Fee" and collectively, the "Letter of Credit
Fronting Fees"). The accrued and unpaid portion of each Letter of Credit
Fronting Fee shall be paid in arrears on the first day of each month and upon
the expiration or termination date of the respective Letter of Credit
Agreements. In addition, the Borrowers shall pay to the Appropriate Letter of
Credit Issuer, for its own account, any and all additional issuance,
negotiation, processing, transfer or other charges to the extent and as and
when required by the provisions of any Letter of Credit Agreement. All Letter
of Credit Fronting Fees and such other charges are included in and are a part
of the "Fees" payable by the Borrowers under the provisions of this Agreement
and are for the sole and exclusive benefit of the Appropriate Letter of Credit
Issuer and are a part of the Agents' Obligations.
(b) In addition and in connection with each Letter of
Credit Agreement, the Borrowers shall pay to the Administrative Agent for the
ratable (based upon each Lender's Revolving Credit Pro Rata Share) benefit of
the Lenders a fee (each a "Letter of Credit Commitment Fee" and collectively
the "Letter of Credit Commitment Fees") in an amount equal to one hundred
seventy-five (175) basis points per annum (calculated monthly in arrears on the
basis of actual number of days elapsed in a year of 360 days) of the
outstanding face amount of each Letter of Credit on the first day of the
month, without regard for provisions contained in the Letters of Credit which
may give rise to a reduction in the outstanding principal amount of the Letters
of Credit unless such reduction has actually occurred. The accrued and unpaid
portion of
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each Letter of Credit Commitment Fee shall be paid in arrears on the first day
of each month and upon the expiration or termination date of the respective
Letter of Credit Agreements.
2.2.3 Terms of Letters of Credit; Post-Expiration Date Letters of
Credit.
Each Letter of Credit shall (a) be opened pursuant to a Letter of
Credit Agreement and (b) expire on a date not later than the Business Day
preceding the Revolving Credit Expiration Date; provided, however, if any Letter
of Credit does have an expiration date later than the Business Day preceding the
Revolving Credit Termination Date (each a "Post-Expiration Date Letter of
Credit" and collectively, the "Post-Expiration Date Letters of Credit"),
effective as of the Business Day preceding the Revolving Credit Termination Date
and without prior notice to or the consent of the Borrowers, the Lenders shall
make advances under the Revolving Loan for the account of the Borrowers in the
aggregate face amount of all such Letters of Credit. The amount of each Lender's
advance shall be equal to its Revolving Credit Pro Rata Share of the aggregate
face amount of all such Post-Expiration Date Letters of Credit. The
Administrative Agent shall deposit the proceeds of such advances into one or
more non-interest bearing accounts with and in the name of the Administrative
Agent and over which the Administrative Agent alone shall have exclusive power
of access and withdrawal (collectively, the "Letter of Credit Cash Collateral
Account"). The Letter of Credit Cash Collateral Account is to be held by the
Administrative Agent, for the ratable benefit of the Lenders, as additional
collateral and security for any Letter of Credit Obligations relating to the
Post-Expiration Date Letters of Credit. The Borrowers hereby assign, pledge,
grant and set over to the Administrative Agent, for the ratable benefit of the
Lenders, a first priority security interest in, and Lien on, all of the funds on
deposit in the Letter of Credit Cash Collateral Account, together with any and
all proceeds (cash and non-cash) and products thereof as additional collateral
and security for the Letter of Credit Obligations relating to the
Post-Expiration Date Letters of Credit. The Borrowers acknowledge and agree that
the Administrative Agent shall be entitled to fund any draw or draft on any
Post-Expiration Date Letter of Credit from the monies on deposit in the Letter
of Credit Cash Collateral Account without notice to or consent of the Borrowers
or any of the Lenders. The Borrowers further acknowledge and agree that the
Administrative Agent's election to fund any draw or draft on any Post-Expiration
Date Letter of Credit from the Letter of Credit Cash Collateral shall in no way
limit, impair, lessen, reduce, release or otherwise adversely affect the
Borrowers' obligation to pay any Letter of Credit Obligations under or relating
to the Post-Expiration Date Letters of Credit. At such time as all
Post-Expiration Date Letters of Credit have expired and all Letter of Credit
Obligations relating to the Post-Expiration Date Letters of Credit have been
paid in full, the Administrative Agent agrees to apply the amount of any
remaining funds on deposit in the Letter of Credit Cash Collateral Account to
the then unpaid balance of the Obligations under the Revolving Credit Facility
in such order and manner as the Administrative Agent shall determine in its sole
and absolute discretion in accordance with the provisions of this Agreement.
Each Letter of Credit shall be used to support the Borrowers'
ordinary course working capital purposes and shall be in a face amount at least
equal to Two Hundred Fifty Thousand Dollars ($250,000) or the Foreign Currency
Equivalent thereof. The aggregate face amount of all Letters of Credit at any
one time outstanding and issued by the Appropriate Letter of Credit
Issuer pursuant to the provisions of this Agreement, including, without
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limitation, any and all Post-Expiration Date Letters of Credit, plus the amount
of any unpaid Letter of Credit Fees accrued or scheduled to accrue thereon, and
less the aggregate amount of all drafts issued under or purporting to have been
issued under such Letters of Credit that have been paid by the Appropriate
Letter of Credit Issuer and for which the Appropriate Letter of Credit Issuer
has been reimbursed by the Borrowers in full in accordance with Section 2.2.5
below and the Letter of Credit Agreements, and for which the Appropriate Letter
of Credit Issuer has no further obligation or commitment to restore all or any
portion of the amounts drawn and reimbursed, is herein called the "Outstanding
Letter of Credit Obligations".
2.2.4 Procedures for Letters of Credit.
The Borrowers shall give the Appropriate Letter of Credit Issuer
written notice at least five (5) Business Days prior to the date on which a
Borrower desires the Appropriate Letter of Credit Issuer to issue a Letter of
Credit. Such notice shall be accompanied by a duly executed Letter of Credit
Agreement specifying, among other things: (a) the name and address of the
intended beneficiary of the Letter of Credit, (b) the requested face amount of
the Letter of Credit, (c) whether the Letter of Credit is to be revocable or
irrevocable, (d) the Business Day on which the Letter of Credit is to be opened
and the date on which the Letter of Credit is to expire, (e) the terms of
payment of any draft or drafts which may be drawn under the Letter of Credit,
and (f) any other terms or provisions the Borrowers desire to be contained in
the Letter of Credit. Such notice shall also be accompanied by such other
information, certificates, confirmations, and other items as the Appropriate
Letter of Credit Issuer may require to assure that the Letter of Credit is to be
issued in accordance with the provisions of this Agreement and a Letter of
Credit Agreement. In the event of any conflict between the provisions of this
Agreement and the provisions of a Letter of Credit Agreement, the provisions of
this Agreement shall prevail and control unless otherwise expressly provided in
the Letter of Credit Agreement. Upon (x) receipt of such notice, (y) payment of
all Letter of Credit Fees and all other Fees payable in connection with the
issuance of such Letter of Credit, and (z) receipt of a duly executed Letter of
Credit Agreement, the Appropriate Letter of Credit Issuer shall process such
notice and Letter of Credit Agreement in accordance with its customary
procedures and open such Letter of Credit on the Business Day specified in such
notice.
2.2.5 Payments of Letters of Credit.
The Borrowers hereby promise to pay to the Appropriate Letter of Credit
Issuer, ON DEMAND and in United States Dollars, the following which are herein
collectively referred to as the "Current Letter of Credit Obligations":
(a) the amount which the Appropriate Letter of Credit Issuer has
paid or will be required to pay under each draft or draw on a Letter of Credit,
whether such demand be in advance of the Appropriate Letter of Credit Issuer 's
payment or for reimbursement for such payment;
(b) any and all reasonable charges and expenses which the
Appropriate Letter of Credit Issuer may pay or incur relative to the Letter of
Credit and/or such draws or drafts; and
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(c) interest on the amounts described in (a) and (b) not paid by
the Borrowers as and when due and payable under the provisions of (a) and (b)
above from the day the same are due and payable until paid in full at a rate per
annum equal to the Post-Default Rate.
In addition, the Borrowers hereby promise to pay any and all other
Letter of Credit Obligations as and when due and payable in accordance with the
provisions of this Agreement and the Letter of Credit Agreements. The obligation
of the Borrowers to pay Current Letter of Credit Obligations and all other
Letter of Credit Obligations shall be absolute and unconditional under any and
all circumstances and irrespective of any setoff, counterclaim or defense to
payment which the Borrowers or any other account party may have or have had
against the beneficiary of such Letter of Credit, the Appropriate Letter of
Credit Issuer, the Agents, any of the Lenders, or any other Person, including,
without limitation, any defense based on the failure of any draft or draw to
conform to the terms of such Letter of Credit, any draft or other document
proving to be forged, fraudulent or invalid, or the legality, validity,
regularity or enforceability of such Letter of Credit, any draft or other
documents presented with any draft, any Letter of Credit Agreement, this
Agreement, or any of the other Financing Documents, all whether or not the
Appropriate Letter of Credit Issuer, any Agent or any of the Lenders had actual
or constructive knowledge of the same, and irrespective of any Collateral,
security or guarantee therefor or right of offset with respect thereto and
irrespective of any other circumstances whatsoever which constitutes, or might
be construed to constitute, an equitable or legal discharge of the Borrowers for
any Letter of Credit Obligations, in bankruptcy or otherwise; provided, however,
that the Borrowers shall not be obligated to reimburse the Appropriate Letter of
Credit Issuer for any wrongful payment under such Letter of Credit made as a
result of the Appropriate Letter of Credit Issuer's gross negligence or willful
misconduct. The obligation of the Borrowers to pay the Letter of Credit
Obligations shall not be conditioned or contingent upon the pursuit by the
Appropriate Letter of Credit Issuer or any other Person at any time of any right
or remedy against any Person which may be or become liable in respect of all or
any part of such obligation or against any Collateral, security or guarantee
therefor or right of offset with respect thereto.
The Letter of Credit Obligations shall continue to be effective, or be
reinstated, as the case may be, if at any time payment of all or any portion of
the Letter of Credit Obligations is rescinded or must otherwise be restored or
returned by the Appropriate Letter of Credit Issuer or any of the Agents or
Lenders upon the insolvency, bankruptcy, dissolution, liquidation or
reorganization of any Person, or upon or as a result of the appointment of a
receiver, intervenor, or conservator of, or trustee or similar officer for, any
Person, or any substantial part of such Person's property, all as though such
payments had not been made.
2.2.6 Change in Law; Increased Cost.
If any change in any law or regulation or in the interpretation thereof
by any court or other Governmental Authority charged with the administration
thereof shall either (a) impose, modify or deem applicable any reserve, special
deposit or similar requirement against Letters of Credit issued by the
Appropriate Letter of Credit Issuer, or (b) impose on the Appropriate Letter of
Credit Issuer or any of the Agents or Lenders any other condition
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regarding this Agreement or any Letter of Credit, and the result of any event
referred to in clauses (a) or (b) above shall be to increase the cost to the
Appropriate Letter of Credit Issuer of issuing, maintaining or extending the
Letter of Credit or the cost to any of the Lenders of funding any obligation
under or in connection with the Letter of Credit (which increase in cost shall
be the result of the Appropriate Letter of Credit Issuer's reasonable allocation
of the aggregate of such cost increases resulting from such events), then, upon
demand by the Appropriate Letter of Credit Issuer, the Borrowers shall
immediately pay to the Appropriate Letter of Credit Issuer from time to time as
specified by the Appropriate Letter of Credit Issuer, additional amounts which
shall be sufficient to compensate the Appropriate Letter of Credit Issuer, the
Agents and the Lenders for such increased cost, together with interest on each
such amount from the date demanded until payment in full thereof at a rate per
annum equal to the then highest current rate of interest on the Revolving Loan.
A certificate as to such increased cost incurred by the Appropriate Letter of
Credit Issuer and/or any of the Lenders or Agents, submitted by the
Administrative Agent to the Borrowers, shall be conclusive, absent manifest
error. Notwithstanding the foregoing, each Lender hereby agrees to (i) use good
faith efforts to change its Appropriate Payment Office, if such change (A) would
eliminate the necessity for the payment of such additional amounts and (B) not
have an adverse effect on such Lender and (ii) treat the Borrowers in
substantially the same manner as it treats all similarly situated borrowers with
respect to the requirement to pay such additional amounts.
2.2.7 General Letter of Credit Provisions.
The Borrowers hereby instruct the Appropriate Letter of Credit Issuer
to pay any draft complying with the terms of any Letter of Credit irrespective
of any instructions of the Borrowers to the contrary. The Borrowers assume all
risks of the acts and omissions of the beneficiary and other users of any Letter
of Credit. The Appropriate Letter of Credit Issuer, the Agents, the Lenders and
their respective branches, Affiliates and/or correspondents shall not be
responsible for and the Borrowers hereby indemnify and hold the Appropriate
Letter of Credit Issuer, the Agents, the Lenders and their respective branches,
Affiliates and/or correspondents harmless from and against all liability, loss
and expense (including reasonable attorney's fees and costs) incurred by the
Appropriate Letter of Credit Issuer, the Agents, the Lenders and/or their
respective branches, Affiliates and/or correspondents relative to and/or as a
consequence of (a) any failure by the Borrowers to perform the agreements
hereunder and under any Letter of Credit Agreement, (b) any Letter of Credit
Agreement, this Agreement, any Letter of Credit and any draft, draw and/or
acceptance under or purported to be under any Letter of Credit, (c) any action
taken or omitted by the Appropriate Letter of Credit Issuer, any of the Lenders,
Agents and/or any of their respective branches, Affiliates and/or correspondents
at the request of the Borrowers, (d) any failure or inability to perform in
accordance with the terms of any Letter of Credit by reason of any control or
restriction rightfully or wrongfully exercised by any de facto or de jure
Governmental Authority, group or individual asserting or exercising governmental
or paramount powers, and/or (e) any consequences arising from causes beyond the
control of the Appropriate Letter of Credit Issuer, any of the Lenders, Agents
and/or any of their respective branches, Affiliates and/or correspondents.
Except for gross negligence or willful misconduct, the Appropriate
Letter of Credit Issuer, the Lenders, the Agents and their respective branches,
Affiliates and/or
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correspondents, shall not be liable or responsible in any respect for any (a)
error, omission, interruption or delay in transmission, dispatch or delivery of
any one or more messages or advices in connection with any Letter of Credit,
whether transmitted by cable, telegraph, mail or otherwise and despite any
cipher or code which may be employed, and/or (b) action, inaction or omission
which may be taken or suffered by it or them in good faith or through
inadvertence in identifying or failing to identify any beneficiary or otherwise
in connection with any Letter of Credit.
Any Letter of Credit may be amended, modified or revoked only upon the
receipt by the Appropriate Letter of Credit Issuer from the Borrowers and the
beneficiary (including any transferee and/or assignee of the original
beneficiary), of a written consent and request therefor.
If any Laws, order of court and/or ruling or regulation of any
Governmental Authority of the United States (or any state thereof) and/or any
country other than the United States permits a beneficiary under a Letter of
Credit to require the Appropriate Letter of Credit Issuer, the Lenders, the
Agents and/or any of their respective branches, Affiliates and/or correspondents
to pay drafts under or purporting to be under a Letter of Credit after the
expiration date of the Letter of Credit, the Borrowers shall reimburse the
Appropriate Letter of Credit Issuer and the Lenders and Agents, as appropriate,
for any such payment pursuant to provisions of Section 2.2.6 (Change in Law;
Increased Cost).
Except as may otherwise be specifically provided in a Letter of Credit
or Letter of Credit Agreement, the laws of the State of Maryland and the Uniform
Customs and Practice for Documentary Credits, 1993 Revision, International
Chamber of Commerce Publication No. 500 shall govern the Letters of Credit. The
Laws, rules, provisions and regulations of the Uniform Customs and Practice for
Documentary Credits are hereby incorporated by reference. In the event of a
conflict between the Uniform Customs and Practice for Documentary Credits and
the laws of the State of Maryland, the Uniform Customs and Practice for
Documentary Credits shall prevail.
2.2.8 Participations in the Letters of Credit.
Each Lender hereby irrevocably authorizes the Appropriate Letter of
Credit Issuer to issue Letters of Credit in accordance with the provisions of
this Agreement. As of the date each Letter of Credit is opened or issued by the
Appropriate Letter of Credit Issuer pursuant to the provisions of this
Agreement, each Lender shall have an undivided participating interest in (a) the
rights and obligations of the Appropriate Letter of Credit Issuer under such
Letter of Credit, and (b) the Outstanding Letter of Credit Obligations of the
Borrowers with respect to such Letter of Credit, in an amount equal to each
Lender's Revolving Credit Pro Rata Share of such Outstanding Letter of Credit
Obligations.
2.2.9 Payments by the Lenders to the Appropriate Letter of Credit
Issuer.
If the Borrowers fail to pay to the Appropriate Letter of Credit Issuer
any Current Letter of
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Credit Obligations as and when due and payable, the Appropriate Letter of Credit
Issuer shall promptly notify each of the Lenders and shall demand payment from
each of the Lenders such Lender's Revolving Credit Pro Rata Share of such unpaid
Current Letter of Credit Obligations. In addition, if any amount paid to the
Appropriate Letter of Credit Issuer on account of Current Letter of Credit
Obligations is rescinded or required to be restored or turned over by the
Appropriate Letter of Credit Issuer upon the insolvency, bankruptcy,
dissolution, liquidation or reorganization of the Borrowers or upon or as a
result of the appointment of a receiver, intervenor, trustee, conservator or
similar officer for the Borrowers, or is otherwise not indefeasibly covered by
an advance under the Revolving Loan, the Appropriate Letter of Credit Issuer
shall promptly notify each of the Lenders and shall demand payment from each of
the Lenders of its Revolving Credit Pro Rata Share of its portion of the Current
Letter of Credit Obligations to be remitted to the Borrowers.
Each of the Lenders irrevocably and unconditionally agrees to honor any
such demands for payment under this Section and promises to pay to the
Appropriate Letter of Credit Issuer's account on the same Business Day as
demanded the amount of its Revolving Credit Pro Rata Share of the Current Letter
of Credit Obligations in immediately available funds, without any setoff,
counterclaim or deduction of any kind. Any payment by a Lender hereunder shall
in no way release, discharge or lessen the obligation of the Borrowers to pay
Current Letter of Credit Obligations to the Appropriate Letter of Credit Issuer
in accordance with the provisions of this Agreement.
The obligation of each of the Lenders to remit the amounts of its
Revolving Credit Pro Rata Share of Current Letter of Credit Obligations for the
account of the Appropriate Letter of Credit Issuer pursuant to this Section
shall be unconditional and irrevocable under any and all circumstances and may
not be terminated, suspended or delayed for any reason whatsoever, provided that
all payments of such amounts by each of the Lenders shall be without prejudice
to the rights of each of the Lenders with respect to the Appropriate Letter of
Credit Issuer's alleged willful misconduct. Any claim any Lender may have
against the Appropriate Letter of Credit Issuer as a result of the Appropriate
Letter of Credit Issuer's alleged willful misconduct may be brought by such
Lender in a separate action against the Appropriate Letter of Credit Issuer but
may not be used as a defense to payment under the provisions of this Section.
No failure of any Lender to remit the amount of its Revolving Credit
Pro Rata Share of Current Letter of Credit Obligations to the Appropriate Letter
of Credit Issuer pursuant to this Section shall affect the obligations of the
Appropriate Letter of Credit Issuer under any Letter of Credit, and if any
Lender does not remit to the Appropriate Letter of Credit Issuer the amount of
its Revolving Credit Pro Rata Share of Current Letter of Credit Obligations on
the same day as demanded, then without limiting such Lender's obligation to
transmit funds on the same Business Day as demanded, such Lender shall be
obligated to pay, on demand of the Appropriate Letter of Credit Issuer and
without setoff, counterclaim or deduction of any kind whatsoever interest on the
unpaid amount at the Federal Funds Rate for each day from the date such amount
shall be due and payable to the Appropriate Letter of Credit Issuer until the
date such amount shall have been paid in full to the Appropriate Letter of
Credit Issuer by such Lender.
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Section 2.3 Multi-Currency Participations.
2.3.1 Multi-Currency Participants.
At any time that a Multi-Currency Lender makes a Multi-Currency Loan or
the Multi-Currency Letter of Credit Issuer issues a Multi-Currency Letter of
Credit, each other Lender shall be deemed, without further action by any Person,
to have purchased from such Multi-Currency Lender or Multi-Currency Letter of
Credit Issuer, as the case may be, an unfunded participation in any such
Multi-Currency Loan or Multi-Currency Letter of Credit, as the case may be, in
an amount equal to such Lender's Revolving Credit Pro Rata Share of the
aggregate principal amount of such Multi-Currency Revolving Loan or stated
amount of such Multi-Currency Letter of Credit and shall be obligated to fund
such participation at such time and in the manner provided below. Upon (i) the
occurrence and during the continuance of a Default, and (ii) the demand
(confirmed within a reasonable time in writing) (notwithstanding any other fact
or circumstance) by any Multi-Currency Lender or Multi-Currency Letter of Credit
of Credit Issuer, as the case may be to the Multi-Currency Agent and the
Administrative Agent (with prompt telephonic notice of such demand followed by a
copy of such written demand to each other Lender, each such other Lender, a
"Multi-Currency Participant") and each Borrower with respect to any outstanding
Multi-Currency Revolving Loan made by such Multi-Currency Lender or Current
Letter of Credit Obligations in respect of any drawing under a Multi-Currency
Letter of Credit, each Multi-Currency Participant shall purchase from such
Multi-Currency Lender or Multi-Currency Letter of Credit Issuer, as the case may
be, without recourse to such Multi-Currency Lender or Multi-Currency Letter of
Credit Issuer, as the case may be (except in the case of a breach of the
representation and warranty set forth below in this clause (ii)), and such
Multi-Currency Lender shall sell and assign to each such Multi-Currency
Participant, such Multi-Currency Participant's Revolving Credit Pro Rata Share
of the aggregate principal amount of such outstanding Multi-Currency Revolving
Loan or such Current Letter of Credit Obligations with respect to a
Multi-Currency Letter of Credit as of the date of such demand. Any such demand
made by a Multi-Currency Lender or Multi-Currency Letter of Credit Issuer, as
the case may be, shall specify the amount of US Dollars (based upon the actual
exchange rate at which the Multi-Currency Agent anticipates being able to obtain
the relevant Foreign Currency (with any excess payment being refunded to the
Multi-Currency Participants and any deficiency remaining payable by the
Multi-Currency Participants)) required from such Multi-Currency Participant in
order to effect the purchase and funding by such Multi-Currency Participant of
its Revolving Credit Pro Rata Share of the aggregate principal amount of any
such Multi-Currency Revolving Loan or such Current Letter of Credit Obligations
with respect to a Multi-Currency Letter of Credit. Each Multi-Currency
Participant shall effect such purchase, sale, assignment and funding by making
available to the Multi-Currency Agent for the account of such Multi-Currency
Lender or Multi-Currency Letter of Credit Issuer, as the case may be, by deposit
to the Appropriate Payment Office, in same day funds in US Dollars, such amount
required to effect the purchase by such Multi-Currency Participant of its
Revolving Credit Pro Rata Share of the aggregate principal amount of such
outstanding Multi-Currency Revolving Loan or such Current Letter of Credit
Obligations with respect to a Multi-Currency Letter of Credit. Each Borrower
hereby agrees to each such purchase, sale and assignment. Each Multi-Currency
Participant agrees to purchase and fund its Revolving Credit Pro Rata Share of
the aggregate principal amount of an outstanding Multi-Currency Revolving Loan
or Current Letter
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of Credit Obligations in respect of any drawing under a Multi-Currency Letter of
Credit on (1) the US Business Day on which demand therefor is made by a
Multi-Currency Lender or Multi-Currency Letter of Credit Issuer, as the case may
be, provided that notice of such demand is given not later than 11:00 a.m.
(Baltimore City time) on such US Business Day or (2) the first US Business Day
next succeeding such demand if notice of such demand is given after such time.
2.3.2 Representations of Multi-Currency Lender and Multi-Currency
Letter of Credit Issuer.
Upon any such purchase, sale and assignment by a Multi-Currency Lender
or a Multi-Currency Letter of Credit Issuer to any Multi-Currency Participant of
a portion of a Multi-Currency Revolving Loan or Current Letter of Credit
Obligations under a Multi-Currency Letter of Credit, such Multi-Currency Lender
or Multi-Currency Letter of Credit Issuer, as applicable, represents and
warrants to such Multi-Currency Participant that such Multi-Currency Lender or
Multi-Currency Letter of Credit Issuer, as applicable, is the legal and
beneficial owner of such interest being sold and assigned by it, but makes no
other representation or warranty and assumes no responsibility with respect to
such Multi-Currency Revolving Loan or Multi-Currency Letter of Credit, the
Financing Documents or any Credit Party. If and to the extent that any
Multi-Currency Participant shall not have so made the amount of its purchase
price with respect to such Multi-Currency Revolving Loan or Current Letter of
Credit Obligations in respect of any drawing under a Multi-Currency Letter of
Credit available to the Multi-Currency Letter of Credit Issuer, such
Multi-Currency Participant agrees to pay to the Multi-Currency Letter of Credit
Issuer forthwith on demand such amount together with interest thereon, for each
day from the date of demand by such Multi-Currency Lender or Multi-Currency
Letter of Credit Issuer to the date such amount is paid to the Multi-Currency
Letter of Credit Issuer, at the Federal Funds Rate. If such Multi-Currency
Participant shall pay to the Multi-Currency Letter of Credit Issuer such amount
for the account of a Multi-Currency Lender or Multi-Currency Letter of Credit
Issuer on any Business Day, such amount so paid in respect of principal shall
constitute a Multi-Currency Revolving Loan made by such Multi-Currency
Participant in its capacity as a Lender (and for such purposes such Lender shall
be deemed to be a Multi-Currency Lender with respect to such Multi-Currency
Revolving Loan) on such Business Day for purposes of this Agreement, and the
outstanding principal amount of such Multi-Currency Revolving Loan originally
made by such Multi-Currency Lender shall be reduced by such amount on such
Business Day. Each Multi-Currency Participant acknowledges and agrees that,
notwithstanding anything in this Agreement to the contrary, its obligation to
purchase and fund its Revolving Credit Pro Rata Share of the aggregate principal
amount of any Multi-Currency Revolving Loan or in respect of any drawing under a
Multi-Currency Letter of Credit hereunder is absolute and unconditional and
shall not be affected by any circumstance whatsoever, including, without
limitation, (i) the occurrence and continuance of any Default or Event of
Default, (ii) the existence of any claim, set-off, defense or other right that
such Multi-Currency Participant may have at any time against any Multi-Currency
Lender, any Multi-Currency Letter of Credit Issuer, any other Lender, any
Borrower or any other Person, whether in connection with the transactions
contemplated by this Agreement or any unrelated transaction or (iii) any other
circumstance that might otherwise constitute a defense available to, or a
discharge of, such Multi-Currency Participant.
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2.3.3 Standing of Multi-Currency Participant.
If, and for so long as any Multi-Currency Participant's public debt
rating (as defined below) is below A- by S&P or Xxxxx'x (or, with respect to any
Multi-Currency Participant that does not have such a public debt rating at any
time of determination, the Multi-Currency Lenders shall determine that such
Multi-Currency Participant's ability to meet such Multi-Currency Participant's
obligations under Section 2.3.1 above has declined since the date such
Multi-Currency Participant became a Multi-Currency Participant hereunder), (1)
such Multi-Currency Participant shall, immediately upon demand by any
Multi-Currency Lender or Multi-Currency Letter of Credit Issuer, as the case may
be, cash collateralize its Revolving Credit Pro Rata Share of the aggregate
principal amount of all outstanding Multi-Currency Revolving Loans and all
outstanding Multi-Currency Letters of Credit by depositing an amount equal to
such Revolving Credit Pro Rata Share into a cash collateral account designated
by the Administrative Agent (and, if necessary, established for such purposes
and, so long as no Default or Event of Default has occurred and is continuing,
established in such location as determined after consultation with the
Borrowers), and (2) each such Multi-Currency Participant shall, if so demanded
by any Multi-Currency Lender in its sole discretion, or by any Multi-Currency
Letter of Credit Issuer in its sole discretion, as the case may be, by written
notice to the Administrative Agent, the Multi-Currency Agent, the Borrowers and
such Multi-Currency Participant, prior to the funding by the Multi-Currency
Lender of any Multi-Currency Revolving Loans in connection with each additional
Multi-Currency Revolving Loan and prior to the issuance of each additional
Multi-Currency Letter of Credit, deposit to such cash collateral account an
amount equal to such Multi-Currency Participant's Revolving Credit Pro Rata
Share of the aggregate amount of such Multi-Currency Revolving Loan or the
Letter of Credit Obligations with respect to such Multi-Currency Letter of
Credit, as the case may be. Amounts deposited by any Multi-Currency Participant
in any such cash collateral account shall be held for the benefit of the
Multi-Currency Lenders, shall be applied by the Administrative Agent to satisfy
such Multi-Currency Participant's obligations under clause (i) above and shall,
to the extent such amounts exceed at any time such Multi-Currency Participant's
Revolving Credit Pro Rata Share of all outstanding Multi-Currency Revolving
Loans and all outstanding Multi-Currency Letters of Credit, be returned to such
Multi-Currency Participant. The term "public debt rating" means, as of any date
with respect to any Person, the rating that has been most recently announced by
either S&P or Xxxxx'x, as the case may be, for any class of non-credit enhanced
long-term senior unsecured debt issued by such Person.
2.3.4 Reports of Multi-Currency Agent
The Multi-Currency Agent shall furnish to the Administrative Agent and
each Lender on the first Business Day of each week a written report summarizing
the aggregate principal amount of Multi-Currency Revolving Loans outstanding in
each Approved Foreign Currency (including the U.S. Dollar Foreign Currency
Equivalent thereof) during the preceding week.
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Section 2.4 The Capital Expenditure Line Facility.
2.4.1 Capital Expenditure Line Facility.
Subject to and upon the provisions of this Agreement, the Lenders
collectively, but severally, establish a capital expenditure line facility in
favor of the Borrowers. The aggregate of all advances under the Capital
Expenditure Line Facility are sometimes referred to in this Agreement
collectively as the "Capital Expenditure Line".
The amount set forth below each Lender's signature to this Agreement is
herein called such Lender's "Capital Expenditure Line Committed Amount" and the
total of each Lender's Capital Expenditure Line Committed Amount equals
Twenty-five Million Dollars ($25,000,000) and is herein called the "Total
Capital Expenditure Line Committed Amount". The proportionate share set forth
below each Lender's signature to this Agreement is herein called such Lender's
"Capital Expenditure Line Pro Rata Share."
During the Capital Expenditure Line Commitment Period, any or all of
the Borrowers may request advances under the Capital Expenditure Line Facility
in accordance with the provisions of this Agreement; provided that after giving
effect to any Borrower's request:
(a) the outstanding principal balance of each Lender's Capital
Expenditure Line Pro Rata Share of the Capital Expenditure Line would not
exceed such Lender's Capital Expenditure Line Pro Rata Share; and
(b) the aggregate outstanding principal balance of the Capital
Expenditure Line would not exceed the Total Capital Expenditure Line
Committed Amount.
Amounts repaid on the Capital Expenditure Line may not be reborrowed.
2.4.2 Procedure for Making Advances Under the Capital Expenditure Line.
The Borrowers may borrow under the Capital Expenditure Line Facility on
any Business Day. A Borrower shall give the Administrative Agent written notice
(a "Capital Expenditure Line Notice") at least five (5) Business Days prior to
the date on which such Borrower desires an advance under the Capital Expenditure
Line. Each Capital Expenditure Line Notice shall be accompanied by (a) a
contract of sale, purchase order or invoice, in form and substance reasonably
satisfactory to the Administrative Agent, which accurately and completely
describes the equipment which is the subject of the requested advance and the
purchase price therefor, and in the case of Capital Expenditure Line Equipment,
expressly identifying and excluding the costs of delivery, installation, taxes,
and other "soft" costs, and (b) evidence satisfactory to the Administrative
Agent indicating that such equipment has been delivered to and accepted by the
respective Borrower not more than 90 days prior to the date of the advance. Each
Capital Expenditure Line Notice shall also be accompanied by such other
information, certificates, confirmations, and other items as the Administrative
Agent may require
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to determine the value and the delivery of the subject equipment and compliance
with the other terms of this Agreement. The amount to be advanced with respect
to a Capital Expenditure Line Notice shall not exceed the lesser of (a) the
amount requested by such Borrower or (b) 80% of the purchase price (excluding
the costs of delivery, installation, taxes, and other "soft" costs) of the
Capital Expenditure Line Equipment. The Administrative Agent must be satisfied
that the equipment for which an advance is requested shall, at the time of
advance and at all other times (i) not be affixed to any real property, (ii) not
be subject to any Liens in favor of parties other than the Agents and Lenders
hereunder, (iii) be free of, and not become, accessions, additions, fittings and
accessories which are subject to a Lien in favor of any other person including,
without limitation, the holders of the Senior Notes or the Senior Notes Trustees
or others acting on their behalf, and (iv) not be subject to any claim by any
Person including, without limitation, the holders Senior Notes, that such Person
is entitled to pari passu lien. Upon receipt of any such Capital Expenditure
Line Notice, the Administrative Agent shall promptly notify each Lender of the
amount of each advance to be made by such Lender on the requested borrowing date
under such Lender's Capital Expenditure Line Commitment. Each advance under the
Capital Expenditure Line shall be not less than $500,000.
Not later than 2:00 p.m. (Baltimore City Time) on each requested
borrowing date for the making of advances under the Capital Expenditure Line,
each Lender shall, if it has received timely notice from the Administrative
Agent of the Borrower's request for such advances, make available to the
Administrative Agent, in funds immediately available to the Administrative Agent
at the Administrative Agent's office set forth in Section 9.1, such Lender's
Capital Expenditure Line Pro Rata Share of the advances to be made on such date.
2.4.3 Capital Expenditure Line Notes.
The obligation of the Borrowers to pay each Lender's Capital
Expenditure Line Pro Rata Share of the Capital Expenditure Line, with interest,
shall be evidenced by a series of promissory notes (as from time to time
extended, amended, restated, supplemented or otherwise modified, collectively
the "Capital Expenditure Line Notes" and individually a "Capital Expenditure
Line Note") substantially in the form of EXHIBIT "B-2" attached hereto and made
a part hereof, with appropriate insertions. Each Lender's Capital Expenditure
Line Note shall be dated as of the Closing Date, shall be payable to the order
of such Lender at the times provided in the Capital Expenditure Line Note, and
shall be in the principal amount of such Lender's Capital Expenditure Line Pro
Rata Share. Each of the Borrowers acknowledges and agrees that, if the
outstanding principal balance of the Capital Expenditure Line outstanding from
time to time exceeds the aggregate face amount of the Capital Expenditure Line
Notes, the excess shall bear interest at the rates provided from time to time
for the Capital Expenditure Line evidenced by the Capital Expenditure Line Notes
and shall be payable, with accrued interest, ON DEMAND. The Capital Expenditure
Line Notes shall not operate as a novation of any of the Obligations or nullify,
discharge, or release any such Obligations or the continuing contractual
relationship of the parties hereto in accordance with the provisions of this
Agreement.
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2.4.4 Payments of Capital Expenditure Line.
Each advance under the Capital Expenditure Line shall be repayable in
installment payments of principal quarterly (on the first day of each August,
November, February, and May after the date of such advance) in an amount equal
to 1/20th of the amount of the advance. At the time of each advance under the
Capital Expenditure Line, the Parent on behalf of the Borrowers shall furnish a
"Capital Expenditure Line Payment Schedule" substantially in the form of EXHIBIT
"B-3" attached hereto and made a part hereof, with appropriate insertions, which
shall set forth the installment payments with respect to the advance and the
aggregate payments due thereafter on all Capital Expenditure Line advances. The
Capital Expenditure Line Payment Schedules shall not operate as a novation of
any of the Obligations or nullify, discharge, or release any such Obligations or
the continuing contractual relationship of the parties hereto in accordance with
the provisions of this Agreement or the Capital Expenditure Line Notes. In
addition, in the event Capital Expenditure Line Equipment is sold or otherwise
disposed of (by casualty or otherwise) and the proceeds of such sale or
disposition which are received by the Lenders for application to the Capital
Expenditure Line are not sufficient to pay in full an amount equal to the
aggregate of the quarterly installment payments of principal remaining with
respect to the advance for such Capital Expenditure Line Equipment, then the
Borrowers shall pay to the Administrative Agent UPON DEMAND the amount of such
deficiency for application to the Capital Expenditure Line and the Borrowers
shall furnish a Capital Expenditure Line Payment Schedule reflecting the amount
repaid and the new installment amounts.
2.4.5 Optional Prepayments of Capital Expenditure Line.
The Borrowers may, at their option, at any time and from time to time
prepay (each a "Capital Expenditure Line Optional Prepayment" and collectively
the "Capital Expenditure Line Optional Prepayments") the Capital Expenditure
Line, in whole or in part without premium or penalty. The amount to be so
prepaid, together with interest accrued thereon to date of prepayment if the
amount is intended as a prepayment of the Capital Expenditure Line in whole,
shall be paid by the Borrowers to the Administrative Agent for the ratable
(based upon each Lender's Capital Expenditure Line Pro Rata Share) benefit of
the Lenders on the date specified for such prepayment.
2.4.6 Application of Capital Expenditure Line Partial Prepayments.
Partial Capital Expenditure Line Loan Optional Prepayments shall be in
an amount not less than the aggregate amount of the next principal installment
under the Capital Expenditure Line Notes and shall be applied first to all
accrued and unpaid interest on the principal of the Capital Expenditure Line
Notes, and then pro rata to the balloon payment due at maturity and to the
principal installment payments, which proration for each payment shall be equal
to the amount to be prepaid times a fraction, the numerator of which is the
amount of the balloon or installment (as applicable) payment and the denominator
of which is the aggregate outstanding principal balance of the Capital
Expenditure Line immediately prior to the prepayment. The Borrowers may not,
however, make a partial Capital Expenditure Line Optional
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Prepayment unless the Borrowers have furnished a Capital Expenditure Line
Payment Schedule reflecting the amount to be prepaid and the new installment
amounts.
Section 2.5 Interest.
2.5.1 Applicable Interest Rates.
(a) Each Loan shall bear interest until maturity (whether by
acceleration, declaration, extension or otherwise) at either the Base Rate or
the Eurodollar Rate, as selected and specified by the Borrowers in an Interest
Rate Election Notice furnished to the Lender in accordance with the provisions
of Section 2.5.2(e), or as otherwise determined in accordance with the
provisions of this ARTICLE II, and as may be adjusted from time to time in
accordance with the provisions of Section 2.5.3 (Inability to Determine
Eurodollar Base Rate).
(b) Notwithstanding the foregoing, following the occurrence and
during the continuance of an Event of Default, at the option of the
Administrative Agent, all Loans and all other Obligations shall bear interest at
the Post-Default Rate.
(c) The Applicable Margin for (i) Eurodollar Loans shall be 225
basis points per annum, and (ii) Base Rate Loans shall be 25 basis points per
annum unless and until a change is required by the operation of Section
2.5.1(d).
(d) Changes in the Applicable Margin shall be made not more
frequently than quarterly based on the Borrowers' Pricing Ratio determined as of
the end of each fiscal quarter by the Administrative Agent based on the
Borrowers' statements required by Section 6.1.1(c) (Quarterly Statements and
Certificates), except that the first such determination shall be made based on
the Borrowers' annual financial statements required by Section 6.1.1(a) (Annual
Statements and Certificates ) for the Borrowers' fiscal year ended December 31,
1998 and shall be effective as of the first day of the first month after the
Administrative Agent receives such statements.
(e) The Applicable Margin (expressed as basis points) for the
Revolving Credit Facility shall vary depending upon the Borrowers' Pricing
Ratio, as follows:
-----------------------------------------------------------------------------------------
Pricing Ratio Applicable Margin for Applicable Margin for Base
Eurodollar Loans Rate Loans
-----------------------------------------------------------------------------------------
Equal to or greater than
4.0 to 1.0 225 25
-----------------------------------------------------------------------------------------
Equal to or greater than
3.0 to 1.0 200 0
-----------------------------------------------------------------------------------------
Less than 3.0 to 1.0 175 0
-----------------------------------------------------------------------------------------
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(f) The Applicable Margin (expressed as basis points) for the
Capital Expenditure Line shall vary depending upon the Borrowers' Pricing Ratio,
as follows:
-----------------------------------------------------------------------------------------
Pricing Ratio Applicable Margin for Applicable Margin for Base
Eurodollar Loans Rate Loans
-----------------------------------------------------------------------------------------
Equal to or greater than
4.0 to 1.0 250 50
-----------------------------------------------------------------------------------------
Equal to or greater than
3.0 to 1.0 225 25
-----------------------------------------------------------------------------------------
Less than 3.0 to 1.0 200 0
-----------------------------------------------------------------------------------------
2.5.2 Selection of Interest Rates.
(a) The Borrowers may select the initial Applicable Interest Rate
or Applicable Interest Rates to be charged on the Loans.
(b) From time to time after the date of this Agreement as provided
in this Section, by a proper and timely Interest Rate Election Notice furnished
to the Administrative Agent in accordance with the provisions of Section
2.5.2(e), the Borrowers may select an initial Applicable Interest Rate or
Applicable Interest Rates for any Loans or may convert the Applicable Interest
Rate and, when applicable, the Interest Period, for any existing Loan to any
other Applicable Interest Rate or, when applicable, any other Interest Period.
(c) The Borrowers' selection of an Applicable Interest Rate and/or
an Interest Period, the Borrowers' election to convert an Applicable Interest
Rate and/or an Interest Period to another Applicable Interest Rate or Interest
Period, and any other adjustments in an interest rate are subject to the
following limitations:
(i) the Borrowers shall not at any time select or change to
an Interest Period that extends beyond the Revolving Credit Expiration Date
in the case of the Revolving Loan or beyond the scheduled maturity of the
Capital Expenditure Line in the case of the Capital Expenditure Line;
(ii) except as otherwise provided in Section 2.5.4
(Indemnity), no change from the Eurodollar Rate to the Base Rate shall
become effective on a day other than a Business Day and on a day which is
the last day of the then current Interest Period, no change of an Interest
Period shall become effective on a day other than the last day of the then
current Interest Period, and no change from the Base Rate to the Eurodollar
Rate shall become effective on a day other than a day which is a Eurodollar
Business Day;
(iii) any Applicable Interest Rate change for any Loan to be
effective on a date on which any principal payment on account of such Loan
is scheduled to be paid shall be made only after such payment shall have
been made;
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(iv) no more than ten (10) different Eurodollar Rates may be
outstanding at any time and from time to time with respect to the Revolving
Loan;
(v) only three (3) Eurodollar Rates may be outstanding at any
time and from time to time with respect to the Capital Expenditure Line;
(vi) the first day of each Interest Period shall be a
Eurodollar Business Day;
(vii) as of the effective date of a selection, there shall
not exist an Event of Default; and
(viii) the minimum principal amount of a Eurodollar Loan
shall be One Million Dollars ($1,000,000).
(d) If a request for an advance under the Loans is not accompanied
by an Interest Rate Election Notice or does not otherwise include a selection of
an Applicable Interest Rate and, if applicable, an Interest Period, or if, after
having made a selection of an Applicable Interest Rate and, if applicable, an
Interest Period, the Borrowers fail or are not otherwise entitled under the
provisions of this Agreement to continue such Applicable Interest Rate or
Interest Period, the Borrowers shall be deemed to have selected the Base Rate as
the Applicable Interest Rate until such time as the Borrowers have selected a
different Applicable Interest Rate and specified an Interest Period in
accordance with, and subject to, the provisions of this Section.
(e) The Lenders will not be obligated to make Loans, to convert
the Applicable Interest Rate on Loans to another Applicable Interest Rate, or to
change Interest Periods, unless the Administrative Agent shall have received an
irrevocable written or telephonic notice (an "Interest Rate Election Notice")
from the Borrowers specifying the following information:
(i) the amount to be borrowed or converted;
(ii) a selection of the Base Rate or the Eurodollar Rate;
(iii) the length of the Interest Period if the Applicable
Interest Rate selected is the Eurodollar Rate; and
(iv) the requested date on which such election is to be
effective.
Any telephonic notice must be confirmed by telecopy within three (3)
Business Days. Each Interest Rate Election Notice must be received by the
Administrative
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Agent not later than 10:00 a.m. (Baltimore City time) on the Business Day of any
requested borrowing or conversion in the case of a selection of the Base Rate
and not later than 10:00 a.m. (Baltimore City time) on the third Business Day
before the effective date of any requested borrowing or conversion in the case
of a selection of the Eurodollar Rate.
2.5.3 Inability to Determine Eurodollar Base Rate.
In the event that (a) the Administrative Agent shall have determined
that, by reason of circumstances affecting the London interbank eurodollar
market, adequate and reasonable means do not exist for ascertaining the
Eurodollar Base Rate for any requested Interest Period with respect to a Loan
the Borrowers have requested to be made as or to be converted to a Eurodollar
Loan or (b) the Administrative Agent shall determine that the Eurodollar Base
Rate for any requested Interest Period with respect to a Loan the Borrowers have
requested to be made as or to be converted to a Eurodollar Loan does not
adequately and fairly reflect the cost to the Lenders of funding or converting
such Loan, the Administrative Agent shall give telephonic or written notice of
such determination to the Borrowers at least one (1) day prior to the proposed
date for funding or converting such Loan. If such notice is given, any request
for a Eurodollar Loan shall be made as or converted to a Base Rate Loan. Until
such notice has been withdrawn by the Administrative Agent, the Borrowers will
not request that any Loan be made as or converted to a Eurodollar Loan.
2.5.4 Indemnity.
(a) The Borrowers agree to indemnify and reimburse the
Administrative Agent and the Lenders and to hold the Administrative Agent and
the Lenders harmless from any loss (including loss of anticipated profits), cost
(including administrative costs) or expense which any one or more of the
Administrative Agent or the Lenders may sustain or incur as a consequence of (a)
a default by the Borrowers in payment when due of the principal amount of or
interest on any Eurodollar Loan, (b) the failure of the Borrowers to make, or
convert the Applicable Interest Rate of, a Loan after the Borrowers has given a
Loan Notice or an Interest Rate Election Notice, (c) the failure of the
Borrowers to make any prepayment of a Eurodollar Loan after the Borrowers have
given notice of such intention to make such a prepayment, and/or (d) the making
by the Borrowers of a prepayment of a Eurodollar Loan on a day which is not the
last day of the Interest Period for such Eurodollar Loan including, without
limitation, any such loss (including loss of anticipated profits) or expense
arising from the reemployment of funds obtained by the Lenders to maintain any
Eurodollar Loan or from fees payable to terminate the deposits from which such
funds were obtained.
(b) In addition to the foregoing, until the earlier of (i) the
Syndication Date and (ii) the 180th day following the Closing Date, each
Borrower severally shall compensate each Lender (including each Person that
becomes a Lender pursuant to Section 9.5), upon its written request (which
request shall set forth the basis for requesting such compensation), for all
reasonable losses, expenses and liabilities (including, without limitation, any
loss, expense or liability incurred by reason of the liquidation or reemployment
of deposits or other funds required by such Lender to fund such Borrower's
Eurodollar Loans including loss of anticipated profit with respect to any
Eurodollar Loans) which such Lender may sustain in
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63
connection with the Administrative Agent's and the Syndication Agent's
syndication of this Agreement to additional Lenders during such period to the
extent that such losses, expenses and liabilities arise from assignments of,
incurrences of, or repayments of, Eurodollar Loans, provided, however, that the
Lenders agree to use good faith efforts to cause the syndication date to occur
at the end of an Interest Period.
2.5.5 Payment of Interest.
(a) Unpaid and accrued interest on any portion of the
Loans which consists of a Base Rate Loan shall be paid monthly, in arrears, on
the first day of each calendar month, commencing on the first such date
after the date of this Agreement, and on the first day of each calendar month
thereafter, and at maturity (whether by acceleration, declaration, extension or
otherwise).
(b) Notwithstanding the foregoing, any and all unpaid
and accrued interest on any Base Rate Loan converted to a Eurodollar Loan
or prepaid shall be paid immediately upon such conversion and/or
prepayment, as appropriate.
(c) Unpaid and accrued interest on any Eurodollar Loan
shall be paid monthly and on the last Business Day of each Interest Period for
such Eurodollar Loan and at maturity (whether by acceleration, declaration,
extension or otherwise); provided, however that any and all unpaid and accrued
interest on any Eurodollar Loan prepaid prior to expiration of the then current
Interest Period for such Eurodollar Loan shall be paid immediately upon
prepayment.
Section 2.6 General Financing Provisions.
2.6.1 Borrowers' Representatives.
The Borrowers hereby represent and warrant to the
Administrative Agent and the Lenders that each of them will derive benefits,
directly and indirectly, from each Letter of Credit and from each Loan,
both in their separate capacity and as a member of the integrated group to
which each of the Borrowers belong and because the successful operation of the
integrated group is dependent upon the continued successful performance of the
functions of the integrated group as a whole, because (a) the terms of the
consolidated financing provided under this Agreement are more favorable than
would otherwise would be obtainable by the Borrowers individually, and (b) the
Borrowers' additional administrative and other costs and reduced flexibility
associated with individual financing arrangements which would otherwise be
required if obtainable would substantially reduce the value to the Borrowers of
the financing. The Borrowers in the discretion of their respective managements
are to agree among themselves as to the allocation of the benefits of Letters
of Credit and the proceeds of Loans, provided, however, that the Borrowers
shall be deemed to have represented and warranted to the Administrative Agent
and the Lenders at the time of allocation that each benefit and use of proceeds
is a Permitted Use.
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For administrative convenience, each Borrower hereby irrevocably
appoints the Parent as such Borrower's attorney-in-fact, with power of
substitution (with the prior written consent of the Administrative Agent in the
exercise of its sole and absolute discretion), in the name of the Parent or in
the name of such Borrower or otherwise to take any and all actions with respect
to the this Agreement, the other Financing Documents, the Obligations and/or the
Collateral (including, without limitation, the proceeds thereof) as the Parent
may so elect from time to time, including, without limitation, actions to (i)
request advances under the Loans, apply for and direct the benefits of Letters
of Credits, and direct the Administrative Agent to disburse or credit the
proceeds of any Loan directly to an account of the Parent, any one or more of
the Borrowers or otherwise, which direction shall evidence the making of such
Loan and shall constitute the acknowledgement by each of the Borrowers of the
receipt of the proceeds of such Loan or the benefit of such Letter of Credit,
(ii) enter into, execute, deliver, amend, modify, restate, substitute, extend
and/or renew this Agreement, any Additional Borrower Joinder Supplement, any
other Financing Documents, security agreements, mortgages, deposit account
agreements, instruments, certificates, waivers, letter of credit applications,
releases, documents and agreements from time to time, and (iii) endorse any
check or other item of payment in the name of such Borrower or in the name of
the Parent. The foregoing appointment is coupled with an interest, cannot be
revoked without the prior written consent of the Administrative Agent, and may
be exercised from time to time through the Parent's duly authorized officer,
officers or other Person or Persons designated by the Parent to act from time to
time on behalf of the Parent.
Each of the Borrowers hereby irrevocably authorizes each of the Lenders
to make Loans to any one or more all of the Borrowers, and hereby irrevocably
authorizes the Administrative Agent to issue or cause to be issued Letters of
Credit for the account of any or all of the Borrowers, pursuant to the
provisions of this Agreement upon the written, oral or telephone request any one
or more of the Persons who is from time to time a Responsible Officer of a
Borrower under the provisions of the most recent certificate of corporate
resolutions and/or incumbency of the Borrowers on file with the Administrative
Agent and also upon the written, oral or telephone request of any one of the
Persons who is from time to time a Responsible Officer of the Parent under the
provisions of the most recent certificate of corporate resolutions and/or
incumbency for the Parent on file with the Administrative Agent.
Neither the Administrative Agent nor any of the Lenders assumes any
responsibility or liability for any errors, mistakes, and/or discrepancies in
the oral, telephonic, written or other transmissions of any instructions,
orders, requests and confirmations between the Administrative Agent and the
Borrowers or the Administrative Agent and any of the Lenders in connection with
the Credit Facilities, any Loan, any Letter of Credit or any other transaction
in connection with the provisions of this Agreement, except to the extent any
such errors, mistakes and/or discrepancies are the proximate result of gross
negligence or willful misconduct by the Administrative Agent or any Lender.
Without implying any limitation on the joint and several nature of the
Obligations, the Lenders agree that, notwithstanding any other provision of this
Agreement, the Borrowers may create reasonable inter-company indebtedness
between or among the Borrowers with respect to the allocation of the benefits
and proceeds of the advances and Credit Facilities under this Agreement. The
Borrowers agree among themselves, and the Administrative Agent and the Lenders
consent to that agreement, that each Borrower shall have
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rights of contribution from all of the other Borrowers to the extent such
Borrower incurs Obligations in excess of the proceeds of the Loans received by,
or allocated to purposes for the direct benefit of, such Borrower. All such
indebtedness and rights shall be, and are hereby agreed by the Borrowers to be,
subordinate in priority and payment to the indefeasible repayment in full in
cash of the Obligations, and, unless the Administrative Agent agrees in writing
otherwise, shall not be exercised or repaid in whole or in part until all of the
Obligations have been indefeasibly paid in full in cash. The Borrowers agree
that all of such inter-company indebtedness and rights of contribution are part
of the Collateral and secure the Obligations. Each Borrower hereby waives all
rights of counterclaim, recoupment and offset between or among themselves
arising on account of that indebtedness and otherwise. Each Borrower shall not
evidence the inter-company indebtedness or rights of contribution by note or
other instrument, and shall not secure such indebtedness or rights of
contribution with any Lien or security. Notwithstanding anything contained in
this Agreement to the contrary, the amount covered by each Borrower under the
Obligations shall be limited to an aggregate amount (after giving effect to any
collections from, rights to receive contribution from or payments made by or on
behalf of any other Borrower in respect of the Obligations) which, together with
other amounts owing by such Borrowers to the Administrative Agent and the
Lenders under the Obligations, is equal to the largest amount that would not be
subject to avoidance under the Bankruptcy Code or any applicable provisions of
any applicable, comparable state or other Laws.
2.6.2 Computation of Interest and Fees.
All applicable Fees and interest shall be calculated on the basis of a
year of 360 days for the actual number of days elapsed. Any change in the
interest rate on any of the Obligations resulting from a change in the Base Rate
shall become effective as of the opening of business on the day on which such
change in the Base Rate is announced.
2.6.3 Liens; Setoff.
The Borrowers hereby grant to the Administrative Agent and to the
Lenders a continuing Lien for all of the Obligations (including, without
limitation, the Agents' Obligations) upon any and all monies, securities, and
other property of the Borrowers and the proceeds thereof, now or hereafter held
or received by or in transit to, the Administrative Agent, any of the Lenders,
and/or any Affiliate of the Administrative Agent and/or any of the Lenders, from
or for the Borrowers, and also upon any and all deposit accounts (general or
special) and credits of the Borrowers, if any, with the Administrative Agent,
any of the Lenders or any Affiliate of the Administrative Agent or any of the
Lenders, at any time existing, excluding any deposit accounts held by the
Borrowers in their capacity as trustee for Persons who are not Borrowers or
Affiliates of the Borrowers. Without implying any limitation on any other rights
the Administrative Agent and/or the Lenders may have under the Financing
Documents or applicable Laws, during the continuance of an Event of Default, the
Administrative Agent is hereby authorized by the Borrowers at any time and from
time to time, without notice to the Borrowers, to set off, appropriate and apply
any or all items hereinabove referred to against all Obligations (including,
without limitation, the Agents' Obligations) then outstanding (whether or
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not then due), all in such order and manner as shall be determined by the
Administrative Agent in its sole and absolute discretion.
2.6.4 Requirements of Law.
In the event that any Lender shall have determined in good faith that
(a) the adoption of any Laws regarding capital adequacy, or (b) any change
therein or in the interpretation or application thereof or (c) compliance by
such Lender or any corporation controlling such Lender with any request or
directive regarding capital adequacy (whether or not having the force of law)
from any central bank or Governmental Authority, does or shall have the effect
of reducing the rate of return on the capital of such Lender or any corporation
controlling such Lender, as a consequence of the obligations of the such Lender
hereunder to a level below that which such Lender or any corporation controlling
such Lender would have achieved but for such adoption, change or compliance
(taking into consideration the policies of such Lender and the corporation
controlling such Lender, with respect to capital adequacy) by an amount deemed
by such Lender to be material, then from time to time, after submission by such
Lender to the Borrowers of a written request therefor and a statement of the
basis for such determination, the Borrowers shall pay to such Lender such
additional amount or amounts in order to compensate for such reduction,
provided, however, that each Lender agrees to (i) use good faith efforts to
change its Appropriate Payment Office if such change would (A) eliminate the
necessity for such additional payments and (B) not have an adverse effect on
such Lender and (ii) treat the Borrowers in substantially the same manner as it
treats all similarly situated borrowers with respect to the requirement to
payment of such additional amounts.
2.6.5 Administrative Agency Fees.
The Borrowers shall pay to the Administrative Agent an administrative
agency fee (collectively, the "Administrative Agency Fees" and individually an
"Administrative Agency Fee"), which Administrative Agency Fees shall be payable
quarterly in advance on the Closing Date and on the first day of each August,
November, February, and May of each year commencing on the first such date
following the Closing Date, and continuing until the last such date prior to
which all Obligations arising out of, or under, the Credit Facilities then
outstanding have been paid in full. Each Administrative Agency Fee shall be in
the amount of $25,000 per quarter.
2.6.6 Origination Fee.
The Borrowers shall pay to the Administrative Agent for the sole and
exclusive benefit of the Administrative Agent on or before the Closing Date an
origination fee in the amount set forth in the Administrative Agent's fee letter
(the "Origination Fee"), which Origination Fee shall be fully earned and
nonrefundable upon payment and shall be a part of the Agents' Obligations.
2.6.7 Funds Transfer Services.
(a) Each Borrower acknowledges that the Administrative Agent has
made available to the Borrowers Wire Transfer Procedures a copy of which is
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attached to this Agreement as EXHIBIT C and which include a description of
security procedures regarding funds transfers executed by the Administrative
Agent or an Affiliate bank at the request of the Borrowers (the "Security
Procedures"). The Borrowers and the Administrative Agent agree that the Security
Procedures are commercially reasonable. Each Borrower further acknowledges that
the full scope of the Security Procedures which the Administrative Agent or such
Affiliate bank offers and strongly recommends for funds transfers is available
only if the Borrowers communicate directly with the Administrative Agent or such
Affiliate bank as applicable in accordance with said procedures. If a Borrower
attempts to communicate by any other method or otherwise not in accordance with
the Security Procedures, the Administrative Agent or such Affiliate bank, as
applicable, shall not be required to execute such instructions, but if the
Administrative Agent or such Affiliate bank, as applicable, does so, the
Borrowers will be deemed to have refused the Security Procedures that the
Administrative Agent or such Affiliate bank as applicable offers and strongly
recommends, and the Borrowers will be bound by any funds transfer, whether or
not authorized, which is issued in any Borrower's name and accepted by the
Administrative Agent or such Affiliate bank, as applicable, in good faith. The
Administrative Agent or such Affiliate bank, as applicable, may modify Wire
Transfer Procedures including, without limitation, the Security Procedures at
such time or times and in such manner as the Administrative Agent or such
Affiliate bank, as applicable, in its sole discretion, deems appropriate to meet
prevailing standards of good banking practice. By continuing to use the
Administrative Agent's or such Affiliate bank's, as applicable, wire transfer
services after receipt of any modification of the Wire Transfer procedures
including, without limitation, the Security Procedures, each Borrower agrees
that the Security Procedures, as modified, are likewise commercially reasonable.
Each Borrower further agrees to establish and maintain procedures to safeguard
the Security Procedures and any information related thereto. Neither the
Administrative Agent nor any Affiliate of the Administrative Agent is
responsible for detecting any error in payment order sent by any Borrower to the
Administrative Agent or any of the Lenders.
(b) The Administrative Agent or such Affiliate bank, as
applicable, will generally use the Fedwire funds transfer system for domestic
funds transfers, and the funds transfer system operated by the Society for
Worldwide International Financial Telecommunication (SWIFT) for international
funds transfers. International funds transfers may also be initiated through the
Clearing House InterBank Payment System (CHIPs) or international cable. However,
the Administrative Agent or such Affiliate bank, as applicable, may use any
means and routes that the Administrative Agent or such Affiliate bank, as
applicable, in its sole discretion, may consider suitable for the transmission
of funds. Each payment order, or cancellation thereof, carried out through a
funds transfer system or a clearinghouse will be governed by all applicable
funds transfer system rules and clearing house rules and clearing arrangements,
whether or not the Administrative Agent or such Affiliate bank, as applicable,
is a member of the system, clearinghouse or arrangement and each Borrower
acknowledges that the Administrative Agent's or such Affiliate bank's, as
applicable, right to reverse, adjust, stop payment or delay posting of an
executed payment order is subject to the laws, regulations, rules, circulars and
arrangements described herein.
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2.6.8 Guaranty.
(a) Each Domestic Borrower hereby unconditionally and irrevocably,
guarantees to the Agents and the Lenders:
(i) the due and punctual payment in full (and not merely the
collectibility) by the other Borrowers of the Obligations, including unpaid
and accrued interest thereon, in each case when due and payable, all
according to the terms of this Agreement, the Notes and the other Financing
Documents;
(ii) the due and punctual payment in full (and not merely the
collectibility) by the other Borrowers of all other sums and charges which
may at any time be due and payable in accordance with this Agreement, the
Notes or any of the other Financing Documents;
(iii) the due and punctual performance by the other Borrowers
of all of the other terms, covenants and conditions contained in the
Financing Documents; and
(iv) all the other Obligations of the other Borrowers.
(b) The obligations and liabilities of each Domestic Borrower as a
guarantor under this Section 2.6.8 shall be absolute and unconditional and joint
and several, irrespective of the genuineness, validity, priority, regularity or
enforceability of this Agreement, any of the Notes or any of the Financing
Documents or any other circumstance which might otherwise constitute a legal or
equitable discharge of a surety or guarantor. Each Domestic Borrower in its
capacity as a guarantor expressly agrees that the Administrative Agent and the
Lenders may, in their sole and absolute discretion, without notice to or further
assent of such Domestic Borrower and without in any way releasing, affecting or
in any way impairing the joint and several obligations and liabilities of such
Domestic Borrower as a guarantor hereunder:
(i) waive compliance with, or any defaults under, or grant
any other indulgences under or with respect to any of the Financing
Documents;
(ii) modify, amend, change or terminate any provisions of any
of the Financing Documents;
(iii) grant extensions or renewals of or with respect to the
Credit Facilities, the Notes or any of the other Financing Documents;
(iv) effect any release, subordination, compromise or
settlement in connection with this Agreement, any of the Notes or any of the
other Financing Documents;
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(v) agree to the substitution, exchange, release or other
disposition of the Collateral or any part thereof, or any other collateral
for the Loan or to the subordination of any lien or security interest
therein;
(vi) make advances for the purpose of performing any term,
provision or covenant contained in this Agreement, any of the Notes or any
of the other Financing Documents with respect to which the Borrowers shall
then be in default;
(vii) make future advances pursuant to the Financing
Agreement or any of the other Financing Documents;
(viii) assign, pledge, hypothecate or otherwise transfer the
Commitments, the Obligations, the Notes, any of the other Financing
Documents or any interest therein, all as and to the extent permitted by the
provisions of this Agreement;
(ix) deal in all respects with the other Borrowers as if this
Section 2.6.8 were not in effect;
(x) effect any release, compromise or settlement with any of
the other Borrowers, whether in their capacity as a Borrower or as a
guarantor under this Section 2.6.8, or any other guarantor; and
(xi) provide debtor-in-possession financing or allow use of
cash collateral in proceedings under the Bankruptcy Code or other Insolvency
Proceedings, it being expressly agreed by all Borrowers that any such
financing and/or use would be part of the Obligations.
(c) The obligations and liabilities of each Domestic Borrower, as
guarantor under this Section 2.6.8, shall be primary, direct and immediate,
shall not be subject to any counterclaim, recoupment, set off, reduction or
defense based upon any claim that a Domestic Borrower may have against any one
or more of the other Borrowers, the Administrative Agent, any one or more of the
Lenders and/or any other guarantor and shall not be conditional or contingent
upon pursuit or enforcement by the Administrative Agent or other Lenders of any
remedies it may have against the Borrowers with respect to this Agreement, the
Notes or any of the other Financing Documents, whether pursuant to the terms
thereof or by operation of law. Without limiting the generality of the
foregoing, the Administrative Agent and the Lenders shall not be required to
make any demand upon any of the Borrowers, or to sell the Collateral or
otherwise pursue, enforce or exhaust its or their remedies against the Borrowers
or the Collateral either before, concurrently with or after pursuing or
enforcing its rights and remedies hereunder. Any one or more successive or
concurrent actions or proceedings may be brought against each Domestic Borrower
under this Section 2.6.8 in the same action, if any, brought against any one or
more of the Borrowers or in separate actions or proceedings, as often
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as the Administrative Agent may deem expedient or advisable. Without limiting
the foregoing, it is specifically understood that any modification, limitation
or discharge of any of the liabilities or obligations of any one or more of the
Borrowers, any other guarantor or any obligor under any of the Financing
Documents, arising out of, or by virtue of, any bankruptcy, arrangement,
reorganization or similar proceeding for relief of debtors under federal or
state law initiated by or against any one or more of the Borrowers, in their
respective capacities as borrowers and guarantors under this Section 2.6.8 under
any of the Financing Documents shall not modify, limit, lessen, reduce, impair,
discharge, or otherwise affect the liability of each Domestic Borrower under
this Section 2.6.8 in any manner whatsoever, and this Section 2.6.8 shall remain
and continue in full force and effect. It is the intent and purpose of this
Section 2.6.8 that each Domestic Borrower shall and does hereby waive all rights
and benefits which might accrue to any other guarantor by reason of any such
proceeding, and the Borrowers agree that they shall be liable for the full
amount of the obligations and liabilities under this Section 2.6.8, regardless
of, and irrespective to, any modification, limitation or discharge of the
liability of any one or more of the Borrowers, (other than the discharge of all
Borrowers as a result of the indefeasible payment in full in cash of all
Obligations) any other guarantor or any obligor under any of the Financing
Documents, that may result from any such proceedings
(d) Each Domestic Borrower, as guarantor under this Section 2.6.8,
hereby unconditionally, jointly and severally, irrevocably and expressly waives:
(i) presentment and demand for payment of the Obligations and
protest of non-payment;
(ii) notice of acceptance of this Section 2.6.8 and of
presentment, demand and protest thereof;
(iii) notice of any default hereunder or under the Notes or
any of the other Financing Documents and notice of all indulgences;
(iv) notice of any increase in the amount of any portion of
or all of the indebtedness guaranteed by this Section 2.6.8;
(v) demand for observance, performance or enforcement of any
of the terms or provisions of this Section 2.6.8, the Notes or any of the
other Financing Documents;
(vi) all errors and omissions in connection with the Lender's
administration of all indebtedness guaranteed by this Section 2.6.8, except
errors and omissions resulting from acts of bad faith, gross negligence or
willful misconduct;
(vii) any right or claim of right to cause a marshalling of
the assets of any one or more of the other Borrowers;
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(viii) any act or omission of the Administrative Agent
or the Lenders which changes the scope of the risk as guarantor hereunder;
and all other notices and demands otherwise required by law which the
Domestic Borrower may lawfully waive.
Within ten (10) days following any request of the
Administrative Agent so to do, each Domestic Borrower will furnish the
Administrative Agent and the Lenders and such other persons as the
Administrative Agent may direct with a written certificate, duly acknowledged
stating in detail whether or not any credits, offsets or defenses exist with
respect to this Section 2.6.8.
Section 2.7 Settlement Among Lenders.
2.7.1 Capital Expenditure Line.
The Administrative Agent shall pay to each Lender on each
Interest Payment Date or date provided in the Capital Expenditure Line
Installment Payment Schedule, as the case may be, such Lender's Capital
Expenditure Line Pro Rata Share of all payments received by the Administrative
Agent in immediately available funds on account of the Capital Expenditure
Line, net of any amounts payable by such Lender to the Administrative Agent,
by wire transfer of same day funds; the amount payable to each Lender shall be
based on the principal amount of the Capital Expenditure Line owing to such
Lender.
2.7.2 Revolving Loan.
It is agreed that each Lender's Net Outstandings are intended
by the Lenders to be equal at all times to such Lender's Revolving Credit Pro
Rata Share of the aggregate outstanding principal amount of the Revolving Loan
outstanding. Notwithstanding such agreement, the several and not joint
obligation of each Lender to fund the Revolving Loan made in accordance with
the terms of this Agreement ratably in accordance with such Lender's Revolving
Credit Pro Rata Share and each Lender's right to receive its ratable share of
principal payments on the Revolving Loan in accordance with its Revolving
Credit Pro Rata Share, the Lenders agree that in order to facilitate the
administration of this Agreement and the Financing Documents that settlement
among them may take place on a periodic basis in accordance with the provisions
of this Section 2.7.
2.7.3 Settlement Procedures as to Revolving Loan.
(a) In General. To the extent and in the manner
hereinafter provided in this Section 2.7.3, settlement among the Lenders as to
the Revolving Loan may occur periodically on Settlement Dates determined from
time to time by the Administrative Agent, which may occur before or after the
occurrence or during the continuance of a Default or Event of Default and
whether or not all of the conditions set forth in Section 5.4 (Conditions to
All Extensions of Credit) have been met. On each Settlement Date payments shall
be made by or to NationsBank and the other Lenders in the manner provided in
this Section 2.7.3 in accordance with the Settlement Report delivered by the
Administrative Agent pursuant to the provisions of
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this Section 2.7.3 in respect of such Settlement Date so that as of each
Settlement Date, and after giving effect to the transactions to take place on
such Settlement Date, each Lender's Net Outstandings shall equal such Lender's
Revolving Credit Pro Rata Share of the Revolving Loan outstanding.
(b) Selection of Settlement Dates. If the Administrative Agent
elects, in its discretion, but subject to the consent of NationsBank, to settle
accounts among the Lenders with respect to principal amounts of Revolving Loan
less frequently than each Business Day, then the Administrative Agent shall
designate periodic Settlement Dates which may occur on any Business Day after
the Closing Date; provided, however, that the Administrative Agent shall
designate as a Settlement Date any Business Day which is an Interest Payment
Date; and provided further, that a Settlement Date shall occur at least once
during each seven-day period. The Administrative Agent shall designate a
Settlement Date by delivering to each Lender a Settlement Report not later than
12:00 noon (Baltimore City Time) on the proposed Settlement Date, which
Settlement Report shall be with respect to the period beginning on the next
preceding Settlement Date and ending on such designated Settlement Date.
(c) Non-Ratable Loans and Payments. Between Settlement Dates, the
Administrative Agent shall request and NationsBank may (but shall not be
obligated to) advance to the Borrowers out of NationsBank's own funds, the
entire principal amount of any advance under the Revolving Loan requested or
deemed requested pursuant to Section 2.1.2(f) (Procedure for Making Advances
Under the Revolving Loan) (any such advance under the Revolving Loan being
referred to as a "Non-Ratable Loan"). The making of each Non-Ratable Loan by
NationsBank shall be deemed to be a purchase by NationsBank of a 100%
participation in each other Lender's Revolving Credit Pro Rata Share of the
amount of such Non-Ratable Loan. All payments of principal, interest and any
other amount with respect to such Non-Ratable Loan shall be payable to and
received by the Administrative Agent for the account of NationsBank. Upon demand
by NationsBank, with notice to the Administrative Agent, each other Lender shall
pay to NationsBank, as the repurchase of such participation, an amount equal to
100% of such Lender's Revolving Credit Pro Rata Share of the principal amount of
such Non-Ratable Loan. Any payments received by the Administrative Agent between
Settlement Dates which in accordance with the terms of this Agreement are to be
applied to the reduction of the outstanding principal balance of Revolving Loan,
shall be paid over to and retained by NationsBank for such application, and such
payment to and retention by NationsBank shall be deemed, to the extent of each
other Lender's Revolving Credit Pro Rata Share of such payment, to be a purchase
by each such other Lender of a participation in the advance under the Revolving
Loan (including the repurchase of participations in Non-Ratable Loans) made by
NationsBank. Upon demand by another Lender, with notice thereof to the
Administrative Agent, NationsBank shall pay to the Administrative Agent, for the
account of such other Lender, as a repurchase of such participation, an amount
equal to such other Lender's Revolving Credit Pro Rata Share of any such amounts
(after application thereof to the repurchase of any participations of
NationsBank in such other Lender's Revolving Credit Pro Rata Share of any
Non-Ratable Loans) paid only to NationsBank by the Administrative Agent.
(d) Net Decrease in Outstandings. If on any Settlement Date the
increase, if any, in the dollar amount of any Lender's Net Outstandings which is
required to
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comply with the first sentence of Section 2.7.2 (Revolving Loan) is less than
such Lender's Revolving Credit Pro Rata Share of amounts received by the
Administrative Agent but paid only to NationsBank since the next preceding
Settlement Date, such Lender and the Administrative Agent, in their respective
records, shall apply such Lender's Revolving Credit Pro Rata Share of such
amounts to the increase in such Lender's Net Outstandings, and NationsBank shall
pay to the Administrative Agent, for the account of such Lender, the excess
allocable to such Lender.
(e) Net Increase in Outstandings. If on any Settlement Date the
increase, if any, in the dollar amount of any Lender's Net Outstandings which is
required to comply with the first sentence of Section 2.7.2 (Revolving Loan)
exceeds such Lender's Revolving Credit Pro Rata Share of amounts received by the
Administrative Agent but paid only to NationsBank since the next preceding
Settlement Date, such Lender and the Administrative Agent, in their respective
records, shall apply such Lender's Revolving Credit Pro Rata Share of such
amounts to the increase in such Lender's Net Outstandings, and such Lender shall
pay to the Administrative Agent, for the account of NationsBank, any excess.
(f) No Change in Outstandings. If a Settlement Report indicates
that no advance under the Revolving Loan has been made during the period since
the next preceding Settlement Date, then such Lender's Revolving Credit Pro Rata
Share of any amounts received by the Administrative Agent but paid only to
NationsBank shall be paid by NationsBank to the Administrative Agent, for the
account of such Lender. If a Settlement Report indicates that the increase in
the dollar amount of a Lender's Net Outstandings which is required to comply
with the first sentence of Section 2.7.2 (Revolving Loan) is exactly equal to
such Lender's Revolving Credit Pro Rata Share of amounts received by the
Administrative Agent but paid only to NationsBank since the next preceding
Settlement Date, such Lender and the Administrative Agent, in their respective
records, shall apply such Lender's Revolving Credit Pro Rata Share of such
amounts to the increase in such Lender's Net Outstandings.
(g) Return of Payments. If any amounts received by NationsBank in
respect of the Obligations are later required to be returned or repaid by
NationsBank to the Borrowers or any other obligor or their respective
representatives or successors in interest, whether by court order, settlement or
otherwise, in excess of the NationsBank's Revolving Credit Pro Rata Share of all
such amounts required to be returned by all Lenders, each other Lender shall,
upon demand by NationsBank with notice to the Administrative Agent, pay to the
Administrative Agent for the account of NationsBank, an amount equal to the
excess of such Lender's Revolving Credit Pro Rata Share of all such amounts
required to be returned by all Lenders over the amount, if any, returned
directly by such Lender.
(h) Payments to Administrative Agent, Lenders.
(i) Payment by any Lender to the Administrative Agent shall
be made not later than 2:00 p.m. (Baltimore City Time) on the Business Day
such payment is due, provided that if such payment is due on demand by
another Lender, such demand is made on the paying Lender not later than
10:00 a.m. (Baltimore City Time) on such
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Business Day. Payment by the Administrative Agent to any Lender shall be
made by wire transfer, promptly following the Administrative Agent's receipt
of funds for the account of such Lender and in the type of funds received by
the Administrative Agent, provided that if the Administrative Agent receives
such funds at or prior to 12:00 p.m. noon (Baltimore City Time), the
Administrative Agent shall pay such funds to such Lender by 2:00 p.m.
(Baltimore City Time) on such Business Day. If a demand for payment is made
after the applicable time set forth above, the payment due shall be made by
2:00 p.m. (Baltimore City Time) on the first Business Day following the date
of such demand.
(ii) If a Lender shall, at any time, fail to make any
payment to the Administrative Agent required hereunder, the Administrative
Agent may, but shall not be required to, retain payments that would
otherwise be made to such Lender hereunder and apply such payments to such
Lender's defaulted obligations hereunder, at such time, and in such order,
as the Administrative Agent may elect in its sole discretion.
(iii) With respect to the payment of any funds under
this Section 2.7.3, whether from the Administrative Agent to a Lender or
from a Lender to the Administrative Agent, the party failing to make
full payment when due pursuant to the terms hereof shall, upon demand by
the other party, pay such amount together with interest on such amount at
the Federal Funds Rate.
2.7.4 Settlement of Other Obligations.
All other amounts received by the Administrative Agent on
account of, or applied by the Administrative Agent to the payment of, any
Obligation owed to the Lenders (including, without limitation, Fees payable to
the Lenders and proceeds from the sale of, or other realization upon, all or
any part of the Collateral following an Event of Default) that are received by
the Administrative Agent not later than 11:00 a.m. (Baltimore City Time) on a
Business Day will be paid by the Administrative Agent to each Lender on the
same Business Day, and any such amounts that are received by the Administrative
Agent after 11:00 a.m. (Baltimore City Time) will be paid by the Administrative
Agent to each Lender on the following Business Day. Unless otherwise stated
herein, the Administrative Agent shall distribute Fees payable to the Lenders
ratably to the Lenders based on each Lender's Revolving Credit Pro Rata Share
and shall distribute proceeds from the sale of, or other realization upon, all
or any part of the Collateral following an Event of Default ratably to the
Lenders based on the amount of the Obligations then owing to each Lender.
2.7.5 Presumption of Payment.
Unless the Administrative Agent shall have received notice from a
Lender prior to 12:00 p.m. noon (Baltimore City Time) on the date of the
requested date for the making
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of advances under the Revolving Loan that such Lender will not make available to
the Administrative Agent such Lender's Revolving Credit Pro Rata Share of the
advances to be made on such date, the Administrative Agent may assume that such
Lender has made such amount available to the Administrative Agent on such date
in accordance with this Section 2.7, and the Administrative Agent, in its sole
discretion may, in reliance upon such assumption, make available to the
Borrowers on such date a corresponding amount on behalf of such Lender.
If and to the extent such Lender shall not have so made available to
the Administrative Agent its Revolving Credit Pro Rata Share of the advances
under the Revolving Loan made on such date, and the Administrative Agent shall
have so made available to the Borrowers a corresponding amount on behalf of such
Lender, such Lender shall, on demand, pay to the Administrative Agent such
corresponding amount, together with interest thereon, at the Federal Funds Rate,
for each day from the date such corresponding amount shall have been so
available by the Administrative Agent to the Borrowers until the date such
amount shall have been repaid to the Administrative Agent. Such Lender shall not
be entitled to payment of any interest which accrues on the amount made
available by the Administrative Agent to the Borrowers for the account of such
Lender until such time as such Lender reimburses the Administrative Agent for
such amount, together with interest thereon, as provided in this Section 2.7.5.
A certificate of the Administrative Agent submitted to any Lender with
respect to any amounts owing to the Administrative Agent by such Lender under
this Section 2.7 shall be conclusive and binding on such Lender, absent manifest
error. If such Lender does not pay such amounts to the Administrative Agent
promptly upon the Administrative Agent's demand, the Administrative Agent shall
promptly notify the Borrowers of such Lender's failure to make payment, and the
Borrowers shall immediately repay such amounts to the Administrative Agent,
together with accrued interest thereon at the applicable rate on the Revolving
Loan, all without prejudice to the rights and remedies of the Administrative
Agent against any defaulting Lender. Any and all amounts due and payable to the
Administrative Agent by the Borrowers under this Section 2.7 constitute and
shall be part of the Agents' Obligations.
Unless the Administrative Agent shall have received notice from the
Borrowers prior to the date on which any payment is due to the Administrative
Agent that the Borrowers will not make such payment in full, the Administrative
Agent may assume that the Borrowers have made such payment in full to the
Administrative Agent on such date and the Administrative Agent in its sole
discretion may, in reliance upon such assumption, cause to be distributed to
each Lender on such due date an amount equal to the amount then due such Lender.
If and to the extent the Borrowers shall not have so made such payment in full
to the Administrative Agent and the Administrative Agent shall have distributed
to any Lender all or any portion of such amount, such Lender shall repay to the
Administrative Agent on demand the amount so distributed to such Lender,
together with interest thereon at the Federal Funds Rate, for each day from the
date such amount is distributed to such Lender until the date such Lender repays
such amount to the Administrative Agent.
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Section 2.8 Assessments; Withholding.
2.8.1 Payment of Assessments.
(a) Any and all payments by the Borrowers hereunder or
under any Note or other document evidencing any obligations shall be made free
and clear of and without reduction for any and all taxes, levies, imposts,
deductions, charges, withholdings, and all stamp or documentary taxes, excise
taxes, ad valorem taxes and other taxes imposed on the value of the Collateral,
charges or levies which arise from the execution, delivery or registration, or
from payment or performance under, or otherwise with respect to, any of the
Financing Documents or the Revolving Credit Commitments and all other
liabilities with respect thereto excluding, in the case of each Lender and the
Administrative Agent, taxes imposed on its income, capital, profits or gains and
franchise taxes imposed on it by (i) the United States, except certain
withholding taxes contemplated pursuant to Section 2.8.4(b)(iii), (ii) the
Governmental Authority of the jurisdiction in which such Applicable Lending
Office is located or any political subdivision thereof, (iii) the Governmental
Authority in which such Person is organized, managed and controlled or any
political subdivision thereof or (iv) any political subdivision of the United
States, unless such taxes are imposed solely as a result of such Lender's
performance of any of the Financing Documents in such political subdivision and
such Lender would not otherwise be subject to tax by such political subdivision
(all such non-excluded taxes, levies, imposts, deductions, charges, withholdings
and liabilities being hereinafter referred to as "Assessments").
(b) If a Borrower shall be required by law to
withhold or deduct any Assessments from or in respect of any sum payable
hereunder or under any such Note or document to any Lender or the Administrative
Agent, (i) the sum payable to such Lender or the Administrative Agent shall be
increased as may be necessary so that after making all required withholding or
deductions (including withholding or deductions applicable to additional sums
payable under this Section 2.8) such Lender or the Administrative Agent (as the
case may be) receives an amount equal to the sum it would have received had no
such withholding or deductions been made, (ii) such Borrower shall make such
withholding or deductions, and (iii) such Borrower shall pay the full amount
withheld or deducted to the relevant taxation authority or other authority in
accordance with applicable law.
2.8.2 Indemnification.
The Borrowers jointly and severally agree to indemnify each
Lender and the Administrative Agent against, and reimburse each on demand for,
the full amount of all Assessments (including, without limitation, any
Assessments imposed by any Governmental Authority on amounts payable under this
Section 2.8 and any additional income or franchise taxes resulting therefrom)
incurred or paid by such Lender or the Administrative Agent (as the case may be)
or any of their respective Affiliates and any liability (including penalties,
interest, and out-of-pocket expenses paid to third parties) arising therefrom or
with respect thereto, whether or not such Assessments were lawfully payable
(other than any liability that results from the gross negligence or willful
misconduct of the Lenders and the Administrative Agent, whether or not such
Assessments were correctly or legally asserted by the relevant taxing authority
or other governmental authority). A certificate as to any additional amount
payable to any Person
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under this Section 2.8 submitted by it to the Borrower shall, absent manifest
error, be final, conclusive and binding upon all parties hereto. Each Lender and
the Administrative Agent agrees (ii) within a reasonable time after receiving a
written request from the Parent, to provide the Parent and the Administrative
Agent with such certificates as are reasonably required, (ii) to take such other
actions as are reasonably necessary to claim such exemptions as such Lender, the
Administrative Agent or such Affiliate may be entitled to claim in respect of
all or a portion of any Assessments which are otherwise required to be paid or
deducted or withheld pursuant to this Section 2.8 in respect of any payments
under this Agreement or under the Notes, (iii) to take such actions, including
changing of the Appropriate Payment Office, to avoid the necessity of paying
such Assessments, provided such change would not have an adverse effect on the
business of the applicable Lender and (iv) treat the Borrowers in the same
manner as it treats all similarly situated borrowers with respect to the
requirement to pay such Assessments. If any Lender or the Administrative Agent
receives a refund in respect of any Assessments for which such Lender or the
Administrative Agent has received payment from a Borrower hereunder, it shall
promptly apply such refund (including any interest received by such Lender or
the Administrative Agent from the taxing authority with respect to the refund
with respect to such Assessments) to the obligations of such Borrower, net of
all out-of-pocket expenses of such Lender or the Administrative Agent; provided
that such Borrower, upon the request of such Lender or the Administrative Agent,
agrees to reimburse such refund (plus penalties, interest or other charges) to
such Lender or the Administrative Agent in the event such Lender or the
Administrative Agent is required to repay such refund.
2.8.3 Receipts.
Within thirty (30) days after the date of any payment of
Assessments pursuant to this Section 2.8 by any Borrower or any of the
Borrowers' Subsidiaries, the Parent will furnish to the Administrative Agent at
its request, at its address referred to in Section 9.1, a copy of a receipt, if
any, or other documentation reasonably satisfactory to the Administrative Agent,
evidencing payment thereof. The Borrowers shall furnish to the Administrative
Agent, within thirty (30) days after the request of the Administrative Agent
from time to time, a certificate of a Responsible Officer stating that all
Assessments of which they are aware are due have been paid and that no
additional Assessments of which it is aware are due.
2.8.4 Foreign Bank Certifications.
(a) Each Lender that is not created or organized under
the laws of the United States or a political subdivision thereof has delivered
to the Borrowers and the Administrative Agent on the date on which such Lender
became a Lender or shall deliver to the Borrowers on the date such Lender
becomes a Lender, if such date is after the Closing Date, a true and accurate
certificate executed in duplicate by a duly authorized officer of such Lender to
the effect that such Lender is eligible to receive all payments hereunder and
under the Notes without deduction or withholding of United States federal income
tax (i) under the provisions of an applicable tax treaty concluded by the United
States (in which case the certificate shall be accompanied by two duly completed
copies of IRS Form 1001 (or any successor or substitute form or forms)) or (ii)
under Section 1441(c)(1) as modified for purposes of Section 1442(a) of the
Internal Revenue Code (in which case the certificate shall be accompanied by two
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duly completed copies of IRS Form 4224 (or any successor or substitute form or
forms)). If a Lender is unable to deliver the certificate and forms described
in, and on the dates required by, the preceding sentence, then the applicable
Borrower shall withhold the applicable tax and shall have no indemnification
obligation with respect to such withholding tax.
(b) Each Lender further agrees to promptly deliver to
the Borrowers and the Administrative Agent from time to time, a true and
accurate certificate executed in duplicate by a duly authorized officer of such
Lender before or promptly upon the occurrence of any event requiring a change in
the most recent certificate previously delivered by it to the Borrowers and the
Administrative Agent pursuant to this Section 2.8.4 (including, but not limited
to, a change in such Lender's lending office). Each certificate required to be
delivered pursuant to this Section 2.8.4 shall certify as to one of the
following:
(i) that such Lender can continue to receive
payments hereunder and under the Notes without deduction or
withholding of United States federal income tax;
(ii) that such Lender cannot continue to
receive payments hereunder and under the Notes without deduction or
withholding of United States federal income tax as specified therein
but does not require additional payments pursuant to Section 2.8.1
because it is entitled to recover the full amount of any such
deduction or withholding from a source other than the Borrowers;
(iii) that such Lender is no longer capable of
receiving payments hereunder and under the Notes without deduction or
withholding of United States federal income tax as specified therein
by reason of a change in law (including the Internal Revenue Code or
applicable tax treaty) after the later of the Closing Date or the date
on which such Lender became a Lender and that it is not capable of
recovering the full amount of the same from a source other than the
Borrowers; or
(iv) that such Lender is no longer capable of
receiving payments hereunder without deduction or withholding of
United States federal income tax as specified therein other than by
reason of a change in law (including the Internal Revenue Code or
applicable tax treaty) after the later of the Closing Date or the date
on which such Lender became a Lender.
(c) Each Lender agrees to deliver to the Borrowers
and the Administrative Agent further duly completed copies of the
above-mentioned IRS forms on or before the earlier of (i) the date that any such
form expires or becomes obsolete or otherwise is required to be resubmitted as a
condition to obtaining an exemption from withholding from United States federal
income tax and (ii) fifteen (15) days after the occurrence of any event
requiring a change in the most recent form previously delivered by such Lender
to the Borrowers
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and the Administrative Agent, unless any change in treaty, law, regulation or
official interpretation thereof which would render such form inapplicable or
which would prevent the Lender from duly completing and delivering such form has
occurred prior to the date on which any such delivery would otherwise be
required and the Lender or promptly advises the Borrowers that it is not capable
of receiving payments hereunder or under the Notes without any deduction or
withholding of United States federal income tax.
ARTICLE III
THE COLLATERAL
Section 3.1 Debt and Obligations Secured.
All property and Liens assigned, pledged or otherwise granted under or in
connection with this Agreement (including, without limitation, those under
Section 3.2 (Grant of Liens)) or any of the Financing Documents shall secure (a)
the payment of all of the Obligations, including, without limitation,
Obligations with respect to any and all Outstanding Letter of Credit Obligations
and any and all Agents' Obligations, and (b) the performance, compliance with
and observance by the Borrowers of the provisions of this Agreement and all of
the other Financing Documents or otherwise under the Obligations; provided,
however, that notwithstanding the foregoing, the Capital Expenditure Line
Equipment shall secure only the Obligations (including, without limitation,
interest and Enforcement Costs) with respect to the amount advanced under the
Capital Expenditure Line, the proceeds of which were utilized to purchase the
applicable items of Capital Expenditure Line Equipment. The security interest
and Lien of each Lender in such property shall rank equally in priority with the
interest of each other Lender, but the security interest and Lien of the
Administrative Agent with respect to the Agents' Obligations shall be superior
and paramount to the security interest and Lien of the Lenders.
Section 3.2 Grant of Liens.
Each of the Domestic Borrowers hereby assigns, pledges and grants to the
Administrative Agent, for the ratable benefit of the Lenders and for the benefit
of the Administrative Agent and the other Agents with respect to the Agents'
Obligations, and agrees that the Administrative Agent, the other Agents and the
Lenders shall have a perfected and continuing security interest in, and Lien on,
all of the Domestic Borrowers' Accounts, Inventory, Capital Expenditure Line
Equipment, and General Intangibles, whether now owned or existing or hereafter
acquired or arising, all returned, rejected or repossessed goods, the sale or
lease of which shall have given or shall give rise to an Account or chattel
paper, all insurance policies relating to the foregoing, all books and records
in whatever media (paper, electronic or otherwise) recorded or stored, with
respect to the foregoing and all equipment and general intangibles necessary or
beneficial to retain, access and/or process the information contained in those
books and records, and all cash and non-cash proceeds and products of the
foregoing. Each of the Domestic Borrowers further agrees that the Administrative
Agent, for the ratable benefit of the Lenders and for the benefit of the
Administrative Agent and the other Agents with respect to the Agents'
Obligations, shall have in respect thereof all of the rights and remedies of a
secured party under the Uniform Commercial Code as well as those provided in
this Agreement, under each of the other Financing Documents and under applicable
Laws.
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Section 3.3 Collateral Disclosure List.
On or prior to the Closing Date, the Domestic Borrowers shall deliver to
the Administrative Agent a list (the "Collateral Disclosure List") which shall
contain such information with respect to each Borrower's business and real and
personal property as the Administrative Agent may require and shall be certified
by a Responsible Officer of each of the Domestic Borrowers, all in the form
provided to the Domestic Borrowers by the Administrative Agent. Promptly after
demand by the Administrative Agent, but no more frequently than on a semi-annual
basis, unless and until an event of Default shall have occurred and be
continuing, in which case the foregoing limitation shall not apply, the Domestic
Borrowers, as appropriate, shall furnish to the Administrative Agent an update
of the information contained in the Collateral Disclosure List at any time and
from time to time as may be requested by the Administrative Agent.
Section 3.4 Additional Collateral.
Following an Event of Default and during the continuation thereof, the
Administrative Agent, in its sole and absolute discretion exercised from time to
time, may require that the Borrowers further secure the Obligations, for the
ratable benefit of the Lenders and for the benefit of the Administrative Agent
with respect to the Agents' Obligations, by a first priority (subject only to
Permitted Liens), perfected Lien, in form and substance satisfactory to the
Administrative Agent and its counsel, on all or any part (as the Administrative
Agent , in its sole and absolute discretion exercised from time to time may
require) of the real and personal property and other assets of the Borrowers
which are not part of the Collateral described in Section 3.2 and on which a
Permitted Lien may arise solely by operation of and in conformance with clause
(e) (relating to Liens securing the Indentures) of the definition of "Permitted
Lien." Without implying any limitation on the Borrowers' obligations under
Section 6.1.24, but subject to the provisions of the immediately preceding
sentence, the Administrative Agent may obtain and/or require the Borrowers to
obtain with respect to such real and personal property and other assets,
opinions of counsel, corporate resolutions, record searches, title insurance,
assignments, waivers, certificates and other documents, certificates,
instruments and information as the Administrative Agent may require, all in form
and substance satisfactory to the Administrative Agent and its counsel, in the
exercise of their sole and absolute discretion.
Section 3.5 Record Searches.
As of the Closing Date and thereafter at the time any Financing Document is
executed and delivered by the Domestic Borrowers pursuant to this Section, the
Administrative Agent shall have received, in form and substance reasonably
satisfactory to the Administrative Agent, such Lien or record searches with
respect to all of the Domestic Borrowers and/or any other Person, as
appropriate, and the property covered by such Financing Document showing that
the Lien of such Financing Document will be a perfected first priority Lien on
the property covered by such Financing Document subject only to Permitted Liens
or to such other matters as the Administrative Agent may approve.
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Section 3.6 Costs.
The Borrowers agree to pay, as part of the Enforcement Costs and to the
fullest extent permitted by applicable Laws, on demand all reasonable costs,
fees and expenses incurred by the Administrative Agent and/or any of the Lenders
in connection with the taking, perfection, preservation, protection and/or
release of a Lien on the Collateral, including, without limitation:
(a) customary fees and expenses incurred by the
Administrative Agent and/or any of the Lenders in preparing,
reviewing, negotiating and finalizing the Financing Documents from
time to time (including, without limitation, reasonable attorneys'
fees incurred in connection with preparing, reviewing, negotiating,
and finalizing any of the Financing Documents, including, any
amendments and supplements thereto);
(b) all filing and/or recording taxes or fees;
(c) all costs of Lien and record searches;
(d) reasonable attorneys' fees in connection with all
legal opinions required;
(e) appraisal costs; and
(f) all related costs, fees and expenses.
Section 3.7 Release.
Upon the indefeasible repayment in full in cash of the Obligations and
performance of all Obligations of the Borrowers and all obligations and
liabilities of each other Person, other than the Administrative Agent and the
Lenders, under this Agreement and all other Financing Documents, the termination
and/or expiration of all of the Commitments, all Letters of Credit and all
Outstanding Letter of Credit Obligations, upon the Borrowers' request and at the
Borrowers' sole cost and expense, the Administrative Agent shall release and/or
terminate any Financing Document but only if and provided that there is no
commitment or obligation (whether or not conditional) of the Administrative
Agent and/or any of the Lenders to re-advance amounts which would be secured
thereby and/or no commitment or obligation of the Administrative Agent to issue
any Letter of Credit or return or restore any payment of any Current Letter of
Credit Obligations.
Section 3.8 Inconsistent Provisions.
In the event that the provisions of any Financing Document directly
conflict with any provision of this Agreement, the provisions of this Agreement
govern.
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES
Section 4.1 Representations and Warranties.
The Borrowers, for themselves and for each other, represent and warrant to
the Administrative Agent and the Lenders, as follows:
4.1.1 Subsidiaries.
The Borrowers have the Subsidiaries listed on the Collateral
Disclosure List attached hereto and made a part hereof and no others. Each of
the Subsidiaries is a Wholly Owned Subsidiary except as shown on the Collateral
Disclosure List, which correctly indicates the nature and amount of each
Borrower's ownership interests therein.
4.1.2 Good Standing.
Each Borrower and its Subsidiaries (a) is a corporation duly
organized, existing and in good standing under the laws of the jurisdiction of
its incorporation, (b) has the corporate power to own its property and to carry
on its business as now being conducted, and (c) is duly qualified to do business
and is in good standing in each jurisdiction in which the character of the
properties owned by it therein or in which the transaction of its business makes
such qualification necessary.
4.1.3 Power and Authority.
Each Borrower has full corporate power and authority to
execute and deliver this Agreement the Purchase Agreements, and the other
Financing Documents to which it is a party, to make the borrowings and request
Letters of Credit under this Agreement and to incur and perform the Obligations
whether under this Agreement, the other Financing Documents or otherwise, all of
which have been duly authorized by all proper and necessary corporate action. No
consent or approval of shareholders or any creditors of any Borrower, and no
consent, approval, filing or registration with or notice to any Governmental
Authority on the part of any Borrower which has not been obtained or taken, is
required as a condition to the execution, delivery, validity or enforceability
of this Agreement, the Purchase Agreements, or any of the other Financing
Documents and the performance by any Borrower of the Obligations.
4.1.4 Binding Agreements.
This Agreement and the other Financing Documents executed
and delivered by the Borrowers have been properly executed and delivered and
constitute the valid and legally binding obligations of the Borrowers and are
fully enforceable against each of the Borrowers in accordance with their
respective terms, subject to bankruptcy, insolvency, reorganization, moratorium
and other laws of general applications affecting the rights and remedies of
creditors and secured parties, and general principles of equity regardless of
whether applied in a proceeding in equity or at law.
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4.1.5 No Conflicts.
Neither the execution, delivery and performance of the
terms of this Agreement or of any of the other Financing Documents executed and
delivered by any Borrower nor the consummation of the transactions contemplated
by this Agreement will conflict with, violate or be prevented by (a) any
Borrower's charter or bylaws, (b) any existing mortgage, indenture, contract or
agreement binding on any Borrower or affecting its property, except to the
extent any such conflict or violation would not reasonably be expected to have a
Material Adverse Effect, or (c) any Laws applicable to any Borrower.
4.1.6 No Defaults, Violations.
(a) No Default or Event of Default has occurred
and is continuing.
(b) None of the Borrowers nor any of their
respective Subsidiaries is in default under or with respect to any obligation
under any existing mortgage, indenture, contract or agreement binding on it or
affecting its property in any respect, which default reasonably would be
expected to have a Material Adverse Effect.
4.1.7 Compliance with Laws.
None of the Borrowers nor any of their respective
Subsidiaries is in violation of any applicable Laws (including, without
limitation, any Laws relating to employment practices, to environmental,
occupational and health standards and controls) or order, writ, injunction,
decree or demand of any court, arbitrator, or any Governmental Authority
affecting any Borrower or any of its properties, the violation of which,
considered in the aggregate, reasonably would be expected to have a Material
Adverse Effect.
4.1.8 Margin Stock.
None of the proceeds of the Loans will be used, directly or
indirectly, by any Borrower or any Subsidiary for the purpose of purchasing or
carrying, or for the purpose of reducing or retiring any indebtedness which was
originally incurred to purchase or carry, any "margin security" within the
meaning of Regulation G (12 CFR Part 207), or "margin stock" within the meaning
of Regulation U (12 CFR Part 221), of the Board of Governors of the Federal
Reserve System or for any other purpose which reasonably would be expected to
make the transactions contemplated in this Agreement a "purpose credit" within
the meaning of said Regulation G or Regulation U, or cause this Agreement to
violate any other regulation of the Board of Governors of the Federal Reserve
System or the Securities Exchange Act of 1934 or the Small Business Investment
Act of 1958, as amended, or any rules or regulations promulgated under any of
such statutes.
4.1.9 Investment Company Act; Margin Securities.
None of the Borrowers nor any of their respective
Subsidiaries is an investment company within the meaning of the Investment
Company Act of 1940, as amended,
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nor is it, directly or indirectly, controlled by or acting on behalf of any
Person which is an investment company within the meaning of said Act. None of
the Borrowers nor any of their respective Subsidiaries is engaged principally,
mor as one of its important activities, in the business of extending credit for
the purpose of purchasing or carrying "margin security" within the meaning of
Regulation G (12 CFR Part 207), or "margin stock" within the meaning of
Regulation U (12 CFR Part 221), of the Board of Governors of the Federal Reserve
System.
4.1.10 Litigation.
Except as otherwise disclosed on Schedule 4.1.10 attached
to and made a part of this Agreement, there are no proceedings, actions or
investigations pending or, so far as any Borrower has notice in writing,
threatened before or by any court, arbitrator or any Governmental Authority
which, in any one case or in the aggregate, if determined adversely to the
interests of any Borrower or any Subsidiary, reasonably would be expected to
have a Material Adverse Effect.
4.1.11 Financial Condition.
The consolidated financial statements of the Borrowers dated
December 31, 1997, are complete and correct and fairly present in all material
respects the financial position of each of the Borrowers and its Subsidiaries
and the results of their operations and transactions in their surplus accounts
as of the date and for the period referred to and have been prepared in
accordance with GAAP applied on a consistent basis throughout the period
involved. There are no liabilities, direct or indirect, fixed or contingent, of
any Borrower or any Subsidiary as of the date of such financial statements which
are not reflected therein or in the notes thereto. There has been no material
adverse change in the financial condition or operations of any Borrower or any
Subsidiary since the date of such financial statements and to the Borrowers'
knowledge no such material adverse change is pending or threatened. None of the
Borrowers nor any Subsidiary has guaranteed the obligations of, or made any
investment in or advances to, any Person, except as disclosed in such financial
statements.
4.1.12 Full Disclosure.
The financial statements referred to in Section 4.1.11
(Financial Condition) of this Agreement, the Financing Documents (including,
without limitation, this Agreement), and the statements, reports or certificates
furnished by any Borrower in connection with the Financing Documents (a) do not
contain any untrue statement of a material fact and (b) when taken in their
entirety, do not omit any material fact necessary to make the statements
contained therein not misleading. There is no fact known to any Borrower which
such Borrower has not disclosed to the Administrative Agent and the Lenders in
writing prior to the date materially and adversely affects or in the future
would reasonably be expected to have a Material Adverse Effect.
4.1.13 Indebtedness for Borrowed Money.
Except for the Obligations and except as set forth in
Schedule 4.1.13 attached to and made a part of this Agreement, the Borrowers
have no Indebtedness for
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Borrowed Money. The Administrative Agent has received photocopies of all
promissory notes evidencing any Indebtedness for Borrowed Money set forth in
Schedule 4.1.13, together with any and all subordination agreements, and other
material agreements, documents, or instruments securing, evidencing, guarantying
or otherwise executed and delivered in connection therewith.
4.1.14 Subordinated Debt.
None of the Subordinated Debt Loan Documents has been
amended, supplemented, restated or otherwise modified except as otherwise
disclosed to the Administrative Agent in writing on or before the effective date
of any such amendment, supplement, restatement or other modification. In
addition, there does not exist any default or any event which upon notice or
lapse of time or both would constitute a default under the terms of any of the
Subordinated Debt Loan Documents.
4.1.15 Taxes.
Except for any extensions which have been filed and are in
effect in accordance with applicable law, each of the Borrowers and its
Subsidiaries has filed all returns, reports and forms for Taxes which, to the
knowledge of the Borrowers, are required to be filed, and has paid all Taxes as
shown on such returns or on any assessment received by it, to the extent that
such Taxes have become due, unless and to the extent only that such Taxes,
assessments and governmental charges are currently contested in good faith and
by appropriate proceedings by a Borrower, such Taxes are not the subject of any
Liens other than Permitted Liens, and adequate reserves therefor have been
established as required under GAAP. All tax liabilities of the Borrowers were as
of the date of audited financial statements referred to in Section 4.1.11
(Financial Condition), and are now, adequately provided for on the books of the
Borrowers and its Subsidiaries, as appropriate. No tax liability has been
asserted by the Internal Revenue Service or any state or local authority against
any Borrower for Taxes in excess of those already paid.
4.1.16 ERISA.
With respect to any Plan that is maintained or contributed
to by the Borrower and/or by any Commonly Controlled Entity or as to which any
of the Borrowers retains material liability: (a) no "accumulated funding
deficiency" as defined in Code Section 412 or ERISA Section 302 has occurred,
whether or not that accumulated funding deficiency has been waived; (b) no
Reportable Event has occurred other than events for which reporting has been
waived or that are unlikely to result in material liability for any of the
Borrowers; (c) no termination of any plan subject to Title IV of ERISA has
occurred; (d) neither the Borrower nor any Commonly Controlled Entity has
incurred a "complete withdrawal" within the meaning of ERISA Section 4203 from
any Multi-employer Plan that is reasonably likely to result in material
liability for one or more of the Borrowers; (e) neither the Borrower nor any
Commonly Controlled Entity has incurred a "partial withdrawal" within the
meaning of ERISA Section4205 with respect to any Multi-employer Plan that is
likely to result in material liability for one or more of the Borrowers; (f) no
Multi-employer Plan to which the Borrower or any Commonly Controlled Entity has
an obligation to contribute is to the knowledge of the Borrowers, in
"reorganization" within the
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meaning of ERISA Section 4241 nor has notice been received by the Borrower or
any Commonly Controlled Entity that such a Multi-employer Plan will be
placed in "reorganization".
4.1.17 Title to Properties.
The Borrowers have good and marketable title to all of their
respective properties, including, without limitation, the Collateral and the
properties and assets reflected in the balance sheets described in Section
4.1.11 (Financial Condition). The Borrowers have legal and enforceable rights to
use freely such property and assets subject to no contest with respect to any
material portion of such property of which any Borrower has knowledge. All of
such properties, including, without limitation, the Collateral which were
purchased, were purchased for fair consideration and reasonably equivalent value
in the ordinary course of business of both the seller and the Borrowers and not,
by way of example only, as part of a bulk sale.
4.1.18 Patents, Trademarks, Etc.
Each of the Borrowers and its Subsidiaries owns, possesses,
or has the right to use all necessary patents, licenses, trademarks, copyrights,
permits and franchises to own its properties and to conduct its business as now
conducted, without known conflict with the rights of any other Person. Any and
all obligations to pay royalties or other charges with respect to such
properties and assets are properly reflected on the financial statements
described in Section 4.1.11 (Financial Condition).
4.1.19 Employee Relations.
Except as disclosed on Schedule 4.1.19 attached hereto and
made a part hereof, (a) no Borrower nor any Subsidiary thereof nor any of the
Borrower's or Subsidiary's employees is subject to any collective bargaining
agreement, (b) no petition for certification or union election is pending with
respect to the employees of any Borrower or any Subsidiary and no union or
collective bargaining unit currently is seeking such certification or
recognition with respect to the employees of a Borrower, (c) there are no
strikes, slowdowns, work stoppages or controversies pending or, to the best
knowledge of the Borrowers after due inquiry, threatened between any Borrower
and its employees, and (d) no Borrower nor any Subsidiaries is subject to an
employment contract, severance agreement, commission contract, consulting
agreement or bonus agreement. Hours worked and payments made to the employees of
any one or more of the Borrowers have not been in violation of the Fair Labor
Standards Act or any other applicable law dealing with such matters. All
payments due from any one or more of the Borrowers or for which any claim may be
made against a Borrower, on account of wages and employee and retiree health and
welfare insurance and other benefits have been paid or accrued as a liability on
its books. The consummation of the transactions contemplated by the Financing
Agreement or any of the other Financing Documents will not give rise to a right
of termination or right of renegotiation on the part of any union under any
collective bargaining agreement to which any Borrower is a party or by which it
is bound.
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4.1.20 Presence of Hazardous Materials or Hazardous
Materials Contamination.
To the best of each Borrower's knowledge, (a) no Hazardous
Materials are located on any real property owned, controlled or operated by any
Borrower or for which any Borrower is, or is claimed to be, responsible, except
for reasonable quantities of necessary supplies for use by a Borrower in the
ordinary course of its current line of business and stored, used and disposed of
in accordance with applicable Laws; and (b) no property owned, controlled or
operated by any Borrower or for which any Borrower has, or is claimed to have,
responsibility has ever been used as a manufacturing, storage, or dump site for
Hazardous Materials nor is affected by Hazardous Materials Contamination at any
other property.
4.1.21 Perfection and Priority of Collateral.
The Administrative Agent and the Lenders have, or upon
execution and recording of this Agreement and the Security Documents will have,
and provided continuous possession is maintained for that portion of the
Collateral for which possession is required to obtain and maintain perfection,
will continue to have as security for the Obligations, a valid and perfected
Lien on and security interest in all Collateral, free of all other Liens, claims
and rights of third parties whatsoever except Permitted Liens, including,
without limitation, those described on Schedule 4.1.21.
4.1.22 Places of Business and Location of Collateral.
The information contained in the Collateral Disclosure List
is complete and correct. The Collateral Disclosure List completely and
accurately identifies the address of (a) the chief executive office of each
Borrower, (b) any and each other place of business of each Borrower, (c) the
location of all books and records pertaining to the Collateral, and (d) each
location, other than the foregoing, where any of the Collateral is located. The
proper and only places to file financing statements with respect to the
Collateral within the meaning of the Uniform Commercial Code are the filing
offices for those jurisdictions in which any one or more of the Borrowers
maintains a place of business as identified on the Collateral Disclosure List.
4.1.23 Business Names and Addresses.
In the twelve (12) years preceding the date hereof, no
Borrower has changed its name, identity or corporate structure, has conducted
business under any name other than its current name, or has conducted its
business in any jurisdiction other than those disclosed on the Collateral
Disclosure List.
4.1.24 Capital Expenditure Line Equipment.
All Capital Expenditure Line Equipment is personalty and is
not and will not be affixed to real estate in such manner as to become a fixture
or part of such real estate. No equipment is held by any Borrower on a sale on
approval basis.
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4.1.25 Inventory.
The Inventory of the Borrowers is (a) of good and
merchantable quality, free from defects of which the Borrowers have knowledge,
(b) not stored with a bailee, warehouseman, carrier, or similar party, (c) not
on consignment, sale on approval, or sale or return, and (d) located at the
places of business set forth on the Collateral Disclosure List. No goods offered
for sale by any Borrower are consigned to or held on sale or return terms by
that Borrower.
4.1.26 Accounts.
With respect to all Accounts and to the best of the
Borrowers' knowledge (a) they are genuine, and in all respects what they purport
to be, and are not evidenced by a judgment, an instrument, or chattel paper
(unless such judgment has been assigned and such instrument or chattel paper has
been endorsed and delivered to the Administrative Agent for the benefit of
itself and the Lenders); (b) they represent bona fide transactions completed in
accordance with the terms and provisions contained in the invoices, purchase
orders and other contracts relating thereto, and the underlying transaction
therefor is in accordance with all applicable Laws; (c) the amounts shown on the
respective Borrower's books and records, with respect thereto are actually and
absolutely owing to that Borrower and are not contingent or subject to reduction
for any reason other than regular discounts, credits or adjustments allowed by
that Borrower in the ordinary course of its business; (d) no payments have been
or shall be made thereon except payments turned over to the Administrative Agent
by the Borrowers; (e) all Account Debtors thereon have the capacity to contract;
and (f) the goods sold, leased or transferred or the services furnished giving
rise thereto are not subject to any Liens except the security interest granted
to the Administrative Agent and the Lenders by this Agreement and Permitted
Liens.
4.1.27 Assigned Local Currency Receivables.
The Administrative Agent has received true and correct
photocopies of the Purchase Agreements executed, delivered and/or furnished on
or before the Closing Date. The Purchase Agreements have not been modified,
changed, supplemented, canceled, amended or otherwise altered or affected,
except as otherwise disclosed to the Agent in writing on or before the Closing
Date. The transactions described in the Purchase Agreements have been effected,
closed and consummated pursuant to, and in accordance with, the terms and
conditions of the Purchase Agreements and with all applicable Laws. The Purchase
Agreements effect the transfer of the accounts covered by the Purchase
Agreements, which accounts meet each requirement for inclusion among Assigned
Local Currency Receivables. Each Account included in the calculation of the
Assigned Local Currency Receivables does and will at all times meet and comply
with all of the components of the definition of "Assigned Local Currency
Receivables."
4.1.28 Compliance with Eligibility Standards.
Each account and all inventory included in the calculation
of the Borrowing Base does and will at all times meet and comply with all of the
standards for Eligible Receivables and Eligible Inventory. With respect to those
accounts which the Administrative
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Agent has deemed Eligible Receivables (a) each account which originated as an
account of a Local Currency Borrower or which arose on account of goods or
services provided by a Local Currency Borrower and which the Administrative
Agent has deemed to be an Eligible Receivables, is an Assigned Local Currency
Receivable, (b) without implying any limitation on the effect of clause (a), to
the best of the Borrowers' knowledge, there are no facts, events or occurrences
which reasonably would be expected to impair the validity, collectibility or
enforceability thereof or tend to reduce the amount payable thereunder; and (c)
there are no proceedings or actions known to any Borrower which are threatened
or pending against any Account Debtor which reasonably would be expected to
result in any material adverse change in the Borrowing Base.
4.1.29 Year 2000 Compliance
The Borrowers have (i) initiated a review and assessment of
all areas within the Borrowers and each of their Subsidiaries' businesses and
operations (including those affected by suppliers and vendors) with respect to
which the "Year 2000 Problem" (that is, the risk that computer applications used
by the Borrowers or any of their Subsidiaries (or its suppliers and vendors) may
be unable to recognize and perform properly date-sensitive functions involving
certain dates prior to and any date after December 31, 1999) reasonably would be
expected to have a Material Adverse Effect, (ii) developed a plan and timeline
for addressing the Year 2000 Problem on a timely basis, and (iii) to date,
implemented that plan in accordance with that timetable. The Borrowers
reasonably believe that all computer applications (including those of its
suppliers and vendors) that are material to the Borrowers or any of their
Subsidiaries' businesses and operations will on a timely basis be able to
perform properly date-sensitive functions for all dates before and after January
1, 2000 (that is, be "Year 2000 compliant"), except to the extent that a failure
to do so would not reasonably be expected to have a Material Adverse Effect.
Section 4.2 Survival; Updates of Representations and Warranties.
All representations and warranties contained in or made under or in
connection with this Agreement and the other Financing Documents shall survive
the Closing Date, the making of any advance under the Loans and extension of
credit made hereunder, and the incurring of any other Obligations and shall be
deemed to have been made at the time of each request for, and again at the time
the making of, each advance under the Loans or the issuance of each Letter of
Credit, except that the representations and warranties which relate to financial
statements which are referred to in Section 4.1.11 (Financial Condition), shall
also be deemed to cover financial statements furnished from time to time to the
Administrative Agent and the Lenders pursuant to Section 6.1.1 (Financial
Statements).
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ARTICLE V
CONDITIONS PRECEDENT
Section 5.1 Conditions to the Initial Advance and Initial Letter of
Credit.
The making of the initial advance under the Loans and the issuance of the
initial Letter of Credit is subject to the fulfillment on or before the Closing
Date of the following conditions precedent in a manner reasonably satisfactory
in form and substance to the Administrative Agent and its counsel:
5.1.1 Organizational Documents - Domestic Borrowers.
The Administrative Agent shall have received for each
Domestic Borrower:
(a) a certificate of good standing certified by
the Secretary of State, or other appropriate Governmental
Authority, of the state of incorporation of such Domestic
Borrower;
(b) a certificate of qualification to do business
for such Domestic Borrower certified by the Secretary of
State or other Governmental Authority of each state in which
such Domestic Borrower conducts business;
(c) a certificate dated as of the Closing Date by
the Secretary or an Assistant Secretary of such Domestic
Borrower covering:
(d) true and complete copies of that Domestic
Borrower's corporate charter, bylaws, and all amendments
thereto;
(e) true and complete copies of the resolutions
of its Board of Directors authorizing (A) the execution,
delivery and performance of the Financing Documents to which
it is a party, (B) the borrowings hereunder, (C) the
granting of the Liens contemplated by this Agreement and the
Financing Documents to which that Domestic Borrower is a
party;
(f) the incumbency, authority and signatures of
the officers of such Domestic Borrower authorized to sign
this Agreement and the other Financing Documents to which
such Domestic Borrower is a party; and
(g) the identity of such Domestic Borrower's
current directors, common stock holders and other equity
holders, as well as their respective percentage ownership
interests.
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5.1.2 Opinion of Domestic Borrowers' Counsel.
The Administrative Agent shall have received the favorable
opinion of counsel (including the validity and binding transfer of the Assigned
Local Currency Receivables) for the Domestic Borrowers addressed to the
Administrative Agent and the Lenders in form satisfactory to the Administrative
Agent.
5.1.3 Opinion of Local Currency Borrowers' Counsel.
The Administrative Agent shall have received the favorable
opinion of Local Currency Borrowers' counsel with respect to the validity and
binding transfer of the Assigned Local Currency Receivables and other related
matters addressed to the Administrative Agent and the Lenders in form
satisfactory to the Administrative Agent.
5.1.4 Consents, Licenses, Approvals, Etc.
The Administrative Agent shall have received copies of all
consents, licenses and approvals, required in connection with the execution,
delivery, performance, validity and enforceability of the Financing Documents,
and such consents, licenses and approvals shall be in full force and effect.
5.1.5 Notes.
The Administrative Agent shall have received for delivery to
each of the Lenders the Revolving Credit Notes and the Capital Expenditure Line
Notes, each conforming to the requirements hereof and executed by a Responsible
Officer of each Borrower and attested by a duly authorized representative of
each Borrower.
5.1.6 Financing Documents and Collateral.
Each Borrower shall have executed and delivered the
Financing Documents to be executed by it, and shall have delivered original
chattel paper, instruments, Subsidiary Securities, and related Collateral and
all opinions, and other documents contemplated by ARTICLE III (The Collateral).
5.1.7 Additional Financial Matters.
The Parent shall have delivered to the Administrative Agent
the Borrowers' consolidated financial statements for the period ending February
28, 1998, together with such pros formas and projections as the Administrative
Agent may reasonably request.
5.1.8 Solvency Certificate.
The Administrative Agent shall have received a solvency
certificate from the appropriate Responsible Officer of each Borrower, in form
and substance satisfactory to the Administrative Agent.
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5.1.9 Other Financing Documents.
In addition to the Financing Documents to be delivered by
the Borrowers, the Administrative Agent shall have received the Financing
Documents duly executed and delivered by Persons other than the Borrowers.
5.1.10 Other Documents, Etc.
The Administrative Agent shall have received such other
certificates, opinions, documents and instruments confirmatory of or otherwise
relating to the transactions contemplated hereby as may have been reasonably
requested by the Administrative Agent.
5.1.11 Payment of Fees.
The Administrative Agent and the Lenders shall have received
payment of any Fees due on or before the Closing Date.
5.1.12 Collateral Disclosure List.
Each Borrower shall have delivered the Collateral Disclosure
List required under the provisions of Section 3.3 (Collateral Disclosure List)
duly executed by a Responsible Officer of each Borrower.
5.1.13 Recordings and Filings.
Each Borrower shall have: (a) executed and delivered all
Financing Documents (including, without limitation, UCC-1 and UCC-3 statements)
required to be filed, registered or recorded in order to create, in favor of the
Administrative Agent and the Lenders, a perfected Lien in the Collateral
(subject only to the Permitted Liens) in form and in sufficient number for
filing, registration, and recording in each office in each jurisdiction in which
such filings, registrations and recordations are required, and (b) delivered
such evidence as the Administrative Agent may deem satisfactory that all
necessary filing fees and all recording and other similar fees, and all Taxes
and other expenses related to such filings, registrations and recordings will be
or have been paid in full.
5.1.14 Insurance Certificate.
The Administrative Agent shall have received an insurance
certificate in accordance with the provisions of Section 6.1.8 (Insurance) and
Section 6.1.20 (Insurance With Respect to Capital Expenditure Line Equipment and
Inventory).
5.1.15 Landlord's Waivers.
The Administrative Agent shall have received a landlord's
waiver from each landlord of each and every business premise leased by each
Borrower and on which any of the Collateral is or may hereafter be located,
which landlords' waivers must be reasonably acceptable to the Administrative
Agent and its counsel in their sole and absolute discretion.
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5.1.16 Bailee Acknowledgements.
The Administrative Agent shall have received an agreement
acknowledging the Liens of the Administrative Agent and the Lender from each
bailee, warehouseman, consignee or similar third party which has possession of
any of the Collateral, which agreements must be reasonably acceptable to the
Administrative Agent and its counsel in their sole and absolute discretion.
5.1.17 Field Examination.
The Administrative Agent shall have completed a field
examination of each Borrower's business, operations and income, the results of
which field examination shall be in all respects acceptable to the
Administrative Agent in its sole and absolute discretion and shall include
reference discussions with key customers and vendors.
5.1.18 Stock Certificates and Stock Powers.
The Administrative Agent shall have received all of the
original stock certificates of the Domestic Borrowers and the Local Currency
Borrowers (except those certificates which are in the possession of a prior
secured party, which after the application of the proceeds of the initial
advance under this Agreement shall no longer have a Lien) and fully executed
irrevocable stock powers from the holders of all such stock certificates.
5.1.19 Collateral Account Acknowledgments.
The Administrative Agent shall have received the agreement
of the depository banks required by Section 2.1.8(a) with respect to the
Collateral Account.
Section 5.2 Conditions to Advances and Letters of Credit for Local
Currency Borrowers.
The making of the initial advance under the Loans, and the issuance of
the initial Letter of Credit, , to or for the benefit of a Local Currency
Borrower is subject to the fulfillment of the following conditions precedent in
a manner satisfactory in form and substance to the Administrative Agent and its
counsel:
5.2.1 Organizational Documents - Local Currency
Borrowers.
The Administrative Agent shall have received for each Local
Currency Borrower:
(a) a certificate of good standing certified by
the appropriate Governmental Authority of the jurisdiction
of incorporation of such Local Currency Borrower;
(b) a certificate of qualification to do
business for such Local Currency Borrower certified by the
appropriate
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Governmental Authority of each jurisdiction in which such
Local Currency Borrower conducts business;
(c) a certificate dated as of a date not earlier
than thirty (30) days prior to such initial advance or
issuance, as applicable, by the Secretary or an Assistant
Secretary (or other appropriate officer) of such Local
Currency Borrower covering:
(d) true and complete copies of that Local
Currency Borrower's corporate charter, bylaws, and all
amendments thereto;
(e) true and complete copies of the resolutions
of its Board of Directors authorizing (A) the execution,
delivery and performance of the Financing Documents to which
it is a party and (B) the borrowings hereunder;
(f) the incumbency, authority and signatures of
the officers of such Local Currency Borrower authorized to
sign this Agreement and the other Financing Documents to
which such Local Currency Borrower is a party;
(g) the identity of such Local Currency
Borrower's current directors, common stock holders and other
equity holders, as well as their respective percentage
ownership interests; and
(h) a duly executed and delivered Additional
Borrower Joinder Supplement, allonges and such other
Financing Documents as the Administrative Agent may
reasonably request.
5.2.2 Opinion of Local Currency Borrowers' Counsel.
The Administrative Agent shall have received the favorable
opinion of counsel for the Local Currency Borrowers addressed to the
Administrative Agent and the Lenders in form reasonably satisfactory to the
Administrative Agent.
5.2.3 Consents, Licenses, Approvals, Etc.
The Administrative Agent shall have received copies of all
consents, licenses and approvals, required in connection with the execution,
delivery, performance, validity and enforceability of the Financing Documents,
and such consents, licenses and approvals shall be in full force and effect.
Section 5.3 Conditions to Multi-Currency Loans and Multi-Currency
Letters of Credit.
The making of the initial advance under the Multi-Currency Revolving Loan,
and the issuance of the initial Multi-Currency Letter of Credit, are subject to
the appointment by the Administrative Agent of a Multi-Currency Agent, the
acceptance of that appointment by the
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Multi-Currency Agent and the Borrowers, the designation of Multi-Currency
Lenders, the acceptance of that designation by the Multi-Currency Lenders and
the Borrowers, and the establishment of foreign availability amounts,
multi-currency revolving loan sublimits, foreign currency sublimits, and foreign
exchange reserves, all in a manner satisfactory in form and substance to the
Multi-Currency Agent, the Multi-Currency Lenders, the Administrative Agent, the
Borrowers and their respective counsel.
Section 5.4 Conditions to all Extensions of Credit.
The making of all advances under the Loans and the issuance of all Letters of
Credit is subject to the fulfillment of the following conditions precedent in a
manner reasonably satisfactory in form and substance to the Administrative Agent
and its counsel:
5.4.1 Compliance.
Each Borrower shall have complied and shall then be in
compliance with all terms, covenants, conditions and provisions of this
Agreement and the other Financing Documents.
5.4.2 Borrowing Base.
The Borrowers shall have furnished all Borrowing Base
Reports required by Section 2.1.4 (Borrowing Base Report), there shall exist no
Borrowing Base Deficiency, and as evidence thereof, the Borrowers shall have
furnished to the Administrative Agent such reports, schedules, certificates,
records and other papers as may be requested by the Administrative Agent, and
the Borrowers shall be in compliance with the provisions this Agreement both
immediately before and immediately after the making of the advance requested.
5.4.3 Default.
There shall exist no Event of Default or Default hereunder.
5.4.4 Representations and Warranties.
The representations and warranties of each of the Borrowers
contained among the provisions of this Agreement shall be true and with the same
effect as though such representations and warranties had been made at the time
of the making of, and of the request for, each advance under the Loans or the
issuance of each Letter of Credit, except that the representations and
warranties which relate to financial statements which are referred to in Section
4.1.11 (Financial Condition), shall also be deemed to cover financial statements
furnished from time to time to the Administrative Agent pursuant to Section
6.1.1 (Financial Statements).
5.4.5 Adverse Change.
No material adverse change shall have occurred in the
condition (financial or otherwise), operations or business of any Borrower that
would, in the good faith judgment of
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the Administrative Agent, materially impair the ability of that Borrower to pay
or perform any of the Obligations.
5.4.6 Legal Matters.
All legal documents incident to each advance under the Loans
and each of the Letters of Credit shall be reasonably satisfactory to counsel
for the Administrative Agent.
ARTICLE V I
COVENANTS OF THE BORROWERS
Section 6.1 Affirmative Covenants.
So long as any of the Obligations (or any the Commitments therefor) or
Letters of Credit shall be outstanding hereunder, the Borrowers agree jointly
and severally with the Administrative Agent and the Lenders as follows:
6.1.1 Financial Statements.
The Borrowers shall furnish to the Administrative Agent and
the Lenders:
(a) Annual Statements and Certificates. The
Borrowers shall furnish to the Administrative Agent and the Lenders as soon as
available, but in no event more than one hundred (120) days after the close of
the Borrowers' fiscal years, (i) a copy of the annual financial statement in
reasonable detail satisfactory to the Administrative Agent relating to the
Borrowers and their Subsidiaries, prepared in accordance with GAAP and examined
and certified by independent certified public accountants reasonably
satisfactory to the Administrative Agent, which financial statement shall
include a consolidated and consolidating balance sheet of the Borrowers and
their Subsidiaries as of the end of such fiscal year and consolidated and
consolidating statements of income and of cash flows and a consolidated
statement of changes in shareholders equity of the Borrowers and their
Subsidiaries for such fiscal year, and (ii) a Compliance Certificate, in
substantially the form attached to this Agreement as EXHIBIT D, containing a
detailed computation of each financial covenant in this Agreement which is
applicable for the period reported, a certification that no change has occurred
to the information contained in the Collateral Disclosure List (except as set
forth on any schedule attached to the certification), and a cash flow projection
report, each prepared by a Responsible Officer of the Borrowers in a format
reasonably acceptable to the Administrative Agent; and shall also furnish to the
Administrative Agent with a sufficient number of copies for all of the Lenders
promptly after receipt, each management letter in the form prepared by the
Borrowers' independent certified public accountants.
(b) Annual Opinion of Accountant. The Borrowers
shall furnish to the Administrative Agent and the Lenders as soon as available,
but in no event more than one hundred (120) days after the close of the
Borrowers' fiscal years, a letter or opinion of the accountant who examined and
certified the annual financial statement relating to the Borrowers and their
Subsidiaries (i) stating whether anything in such accountant's examination has
revealed the occurrence of a Default or an Event of Default hereunder insofar as
they relate
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to accounting matters, and, if so, stating the facts with respect thereto and
(ii) acknowledging that the Administrative Agent and the Lenders will rely on
the statement and that the Borrowers know of the intended reliance by the
Administrative Agent and the Lenders.
(c) Quarterly Statements and Certificates. The
Borrowers shall furnish to the Administrative Agent, with a sufficient number of
copies for all of the Lenders as soon as available, but in no event more than
sixty (60) days after the end of each fiscal quarter of the Borrowers,
consolidated balance sheets of the Borrowers and their Subsidiaries as of the
close of such period, consolidated and consolidating income statements and
statements of cash flows and a consolidated statement of changes in shareholders
equity statements for such period, and a Compliance Certificate, in
substantially the form attached to this Agreement as EXHIBIT D, containing a
detailed computation of each financial covenant in this Agreement which is
applicable for the period reported, and a certification that no change has
occurred to the information contained in the Collateral Disclosure List (except
as set forth on any schedule attached to the certification), each prepared by a
Responsible Officer of or on behalf of each Borrower in a format reasonably
acceptable to the Administrative Agent, and certified by a Responsible Officer
of the Borrowers and accompanied by a certificate of that officer stating
whether any event has occurred which constitutes a Default or an Event of
Default hereunder, and, if so, stating the facts with respect thereto.
(d) Monthly Statements and Certificates. The
Borrowers shall furnish to the Administrative Agent, with a sufficient number of
copies for all of the Lenders as soon as available, but in no event more than
sixty (60) days after the end of each January and February and in no event more
than thirty (30) days after the end of each other month, management prepared
consolidated and consolidating balance sheets of the Borrowers and their
Subsidiaries as of the close of such period, consolidated and consolidating
income statements, consolidated cash flows and changes in shareholders equity
statements for such period, and a certification that no change has occurred to
the information contained in the Collateral Disclosure List (except as set forth
on any schedule attached to the certification), and the exact Dollar allocation
of the amount borrowed as between each of the Borrowers (the "Intercompany
Allocation", which Intercompany Allocation shall include any Loan proceeds
loaned or otherwise advanced by any Borrower to any other Borrower) under the
Revolving Credit Facility, each prepared by a Responsible Officer of or on
behalf of each Borrower in a format reasonably acceptable to the Lender and
certified by a Responsible Officer of the Borrowers and accompanied by a
certificate of that officer stating whether any event has occurred which
constitutes a Default or an Event of Default hereunder, and, if so, stating the
facts with respect thereto.
(e) Monthly reports. The Borrowers shall furnish
to the Administrative Agent, with a sufficient number of copies for all of the
Lenders within (x) thirty (30) days after the end of January and (y) fifteen
(15) days after the end of each fiscal month, a report containing the following
information:
(i) a detailed aging schedule of all
Receivables by Account Debtor and, in the case of Assigned Local Currency
Receivables, by Local Currency Borrower, in such detail, and
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accompanied by such supporting information, as the Administrative Agent may
from time to time reasonably request;
(ii) a detailed aging of all accounts
payable by supplier, in such detail, and accompanied by such supporting
information, as the Administrative Agent may from time to time reasonably
request;
(iii) a listing of all Inventory by
component, category and location, and reconciliations of general ledger
inventory accounts to the perpetual inventory records, all in such detail,
and as accompanied by such supporting information as the Administrative
Agent may from time to time reasonably request; and
(iv) such other information as the
Administrative Agent may reasonably request.
(f) Annual Budget and Projections. The Borrowers
shall furnish to the Administrative Agent, with a sufficient number of copies
for each Lender as soon as available, but in no event later than the 10th day
before the end of each fiscal year:
(i) a consolidated and consolidating budget
and pro forma financial statements on a quarter-to-quarter basis for the
following fiscal year, and
(ii) five (5) year projections.
(g) Additional Reports and Information. The
Borrowers shall furnish to the Administrative Agent and the Lenders promptly,
such additional information, reports or statements as the Administrative Agent
and/or any of the Lenders may from time to time reasonably request.
6.1.2 Reports to SEC and to Stockholders.
The Borrowers will furnish to the Administrative Agent and
the Lenders, promptly upon the filing or making thereof, at least one (l) copy
of all financial statements, reports, notices and proxy statements sent by any
Borrower to its stockholders, and of all regular and other reports filed by any
Borrower with any securities exchange or with the Securities and Exchange
Commission.
6.1.3 Recordkeeping, Rights of Inspection, Field
Examination, Etc.
(a) Each of the Borrowers shall, and shall cause
each of its Subsidiaries to, maintain (i) a standard system of accounting in
accordance with GAAP, and (ii) proper books of record and account in which full,
true and correct entries are made of all dealings and transactions in relation
to its properties, business and activities.
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(b) Each of the Borrowers shall, and shall cause each of its
Subsidiaries to, permit authorized representatives of the Administrative Agent
to visit and inspect the properties of the Borrowers and its Subsidiaries, to
review, audit, check and inspect the Collateral, with notice given during normal
business hours, which inspection shall be conducted during normal business hours
and at other reasonable times, if no Event of Default has occurred and with or
without notice and at any time if an Event of Default has occurred and is
continuing. During such inspection, such representatives also shall be entitled
to make abstracts and photocopies of the books and records of each Borrower, and
to discuss the affairs, finances and accounts of the Borrowers and their
Subsidiaries, with the officers, directors, employees and other representatives
of the Borrowers and their Subsidiaries and their respective accountants. Unless
an Event of Default shall have occurred and be continuing, no such inspection
shall disrupt the normal business operations of any Borrower. All information
obtained during any such inspection shall be subject to the provisions of
Section 9.20.
(c) Each of the Borrowers hereby irrevocably authorizes and
directs all accountants and auditors employed by any of the Borrowers and/or any
of their Subsidiaries at any time prior to the repayment in full of the
Obligations to exhibit and deliver to the Administrative Agent and the Lenders
copies of any and all of the financial statements, trial balances, management
letters, or other accounting records of any nature of any or all of the
Borrowers and/or any or all of their respective Subsidiaries in the accountant's
or auditor's possession, and to disclose to the Administrative Agent and any of
the Lenders any information they may have concerning the financial status and
business operations of any or all of the Borrowers and/or any or all of their
respective Subsidiaries. Further, each of the Borrowers hereby authorizes all
Governmental Authorities to furnish to the Administrative Agent and the Lenders
copies of reports or examinations relating to any and all of the Borrowers
and/or any or all Subsidiaries, whether made by the Borrowers or otherwise.
(d) Any and all costs and expenses incurred by, or on behalf of,
the Administrative Agent in connection with the conduct of any of the foregoing
shall be part of the Enforcement Costs and shall be payable to the
Administrative Agent upon demand. The Borrowers acknowledge and agree that such
expenses may include, but shall not be limited to, any and all out-of-pocket
costs and expenses of the Administrative Agent's employees and agents in, and
when, travelling to any of the Borrowers' facilities. Notwithstanding the
foregoing, provided no Event of Default shall have occurred and the continuing,
Borrowers shall not be required to pay for more than four (4) inspections each
year.
6.1.4 Corporate Existence.
Except as permitted by Section 6.2.1, each of the Borrowers shall
maintain, and cause each of its Subsidiaries to maintain, its corporate
existence in good standing in the jurisdiction in which it is incorporated and
in each other jurisdiction where it is required to register or qualify to do
business if the failure to do so in such other jurisdiction reasonably would be
expected to have a Material Adverse Effect.
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6.1.5 Compliance with Laws.
Each of the Borrowers shall comply, and cause each of its Subsidiaries
to comply, with all applicable Laws and observe the valid requirements of
Governmental Authorities, the noncompliance with or the nonobservance of which
reasonably would be expected to have a Material Adverse Effect.
6.1.6 Preservation of Properties.
Each of the Borrowers will, and will cause each of its Subsidiaries
to, at all times (a) maintain, preserve, protect and keep its properties,
whether owned or leased, in good operating condition, working order and repair
(ordinary wear and tear excepted), and from time to time will make all proper
repairs, maintenance, replacements, additions and improvements thereto needed to
maintain such properties in good operating condition, working order and repair,
unless such property becomes obsolete or is no longer useful in the operation of
the business of the applicable Borrower and (b) do or cause to be done all
things necessary to preserve and to keep in full force and effect its material
franchises, leases of real and personal property, trade names, patents,
trademarks and permits which are necessary for the orderly continuance of its
business.
6.1.7 Line of Business.
Each of the Borrowers will continue to engage substantially only in
the business of the design and manufacture of high precision fuel system
products for the global automotive and outdoor power equipment markets.
6.1.8 Insurance.
Each of the Borrowers will, and will cause each of its Subsidiaries
to, at all times maintain with "A" or better rated insurance companies such
insurance as is required by applicable Laws and such other insurance, in such
amounts, of such types and against such risks, hazards, liabilities, casualties
and contingencies as are usually insured against in the same geographic areas by
business entities engaged in the same or similar business. Without limiting the
generality of the foregoing, each of the Borrowers will, and will cause each of
its Subsidiaries to, keep adequately insured all of its property against loss or
damage resulting from fire or other risks insured against by extended coverage
and maintain public liability insurance against claims for personal injury,
death or property damage occurring upon, in or about any properties occupied or
controlled by it, or arising in any manner out of the businesses carried on by
it. Each of the Borrowers shall deliver to the Administrative Agent on the
Closing Date (and thereafter on each date there is a material change in the
insurance coverage) a certificate of a Responsible Officer of the Borrowers
containing a detailed list of the insurance then in effect and stating the names
of the insurance companies, the types, the amounts and rates of the insurance,
dates of the expiration thereof and the properties and risks covered thereby.
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6.1.9 Taxes.
Except to the extent that the validity or amount thereof is being
contested in good faith and by appropriate proceedings, each of the Borrowers
will, and will cause each of its Subsidiaries, to pay and discharge all Taxes
prior to the date when any interest or penalty would accrue for the nonpayment
thereof. Each of the Borrowers shall furnish to the Administrative Agent at such
times as the Administrative Agent may require proof reasonably satisfactory to
the Administrative Agent of the making of payments or deposits required by
applicable Laws including, without limitation, payments or deposits with respect
to amounts withheld by any of the Borrowers from wages and salaries of employees
and amounts contributed by any of the Borrowers on account of federal and other
income or wage taxes and amounts due under the Federal Insurance Contributions
Act, as amended.
6.1.10 ERISA.
Each of the Domestic Borrowers will, and will cause each of its
Commonly Controlled Entities to, comply with the funding requirements of ERISA
with respect to Plans for its respective employees. No Domestic Borrower will
permit with respect to any Plan (a) any prohibited transaction or transactions
under ERISA or the Internal Revenue Code, which results, or reasonably would be
expected to result, in any material liability of the Domestic Borrower, or (b)
any Reportable Event if, upon termination of the plan or plans with respect to
which one or more such Reportable Events shall have occurred, there is or would
be any material liability of the Domestic Borrower to the PBGC. Upon the request
of the Administrative Agent, the Domestic Borrowers will deliver to the
Administrative Agent a copy of the most recent actuarial report, financial
statements and annual report completed with respect to any Plan.
6.1.11 Notification of Events of Default and Adverse Developments.
Each of the Borrowers shall promptly notify the Administrative Agent
upon obtaining knowledge of the occurrence of:
(a) any Event of Default;
(b) any Default;
(c) any litigation instituted or threatened against any of the
Borrowers or any of their Subsidiaries and of the entry of any judgment or
Lien (other than any Permitted Liens) against any of the assets or
properties of any of the Borrowers or any Subsidiary where the claims
against any Borrower or any Subsidiary exceed One Million Dollars
($1,000,000) and are not covered by insurance;
(d) any event, development or circumstance whereby the
financial statements furnished hereunder fail in any material respect to
present fairly, in all material respects and in accordance with GAAP, the
financial condition and operational results of any of the Borrowers or
any of their respective Subsidiaries;
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(e) any judicial, administrative or arbitral proceeding pending
against any of the Borrowers or any of their respective Subsidiaries and
any judicial or administrative proceeding known by any of the Borrowers to
be threatened against any Borrower or any Subsidiary which, if adversely
decided, reasonably would be expected to have a Material Adverse Effect;
(f) the receipt by any of the Borrowers or any Subsidiary of any
notice, claim or demand from any Governmental Authority which alleges that
any of the Borrowers or any Subsidiary is in violation of any of the terms
of, or has failed to comply with any applicable Laws regulating its
operation and business, including, but not limited to, the Occupational
Safety and Health Act and the Environmental Protection Act, which violation
or failure reasonably would be expected to have a Material Adverse Effect;
and
(g) any other development in the business or affairs of any of
the Borrowers or any of their respective Subsidiaries which reasonably
would be expected to have a Material Adverse Effect;
in each case describing in detail reasonably satisfactory to the
Administrative Agent the nature thereof and the action the Borrowers propose
to take with respect thereto.
6.1.12 Hazardous Materials; Contamination.
Each of the Borrowers agrees to:
(a) give notice to the Administrative Agent immediately upon
acquiring knowledge of the presence of any Hazardous Materials or any
Hazardous Materials Contamination on any property owned, operated or
controlled by any Borrower or for which any Borrower is, or is claimed to
be, responsible (provided that such notice shall not be required for
Hazardous Materials placed or stored on such property in accordance with
applicable Laws in the ordinary course (including, without limitation,
quantity) of a Borrower's line of business expressly described in this
Agreement), with a full description thereof;
(b) promptly comply with any Laws requiring the removal,
treatment or disposal of Hazardous Materials or Hazardous Materials
Contamination and provide the Administrative Agent with satisfactory
evidence of such compliance;
(c) provide the Administrative Agent, within thirty (30) days
after a demand by the Administrative Agent, with a bond, letter of credit
or similar financial assurance evidencing to the Administrative Agent's
satisfaction that the necessary funds are available to pay the cost
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of removing, treating, and disposing of such Hazardous Materials or
Hazardous Materials Contamination and discharging any Lien which has been
established as a result thereof on any property owned, operated or
controlled by any Borrower or for which any Borrower is, or is claimed to
be, responsible; and
(d) as part of the Obligations, defend, indemnify and hold
harmless the Administrative Agent, each of the Lenders and each of their
respective agents, employees, trustees, successors and assigns from any and
all claims which may now or in the future (whether before or after the
termination of this Agreement) be asserted as a result of the presence of
any Hazardous Materials or any Hazardous Materials Contamination on any
property owned, operated or controlled by any Borrower for which any
Borrower is, or is claimed to be, responsible. Each Borrower acknowledges
and agrees that this indemnification shall survive the termination of this
Agreement and the Commitments and the payment and performance of all of the
other Obligations.
6.1.13 Disclosure of Significant Transactions.
Each of the Borrowers shall deliver to the Administrative Agent a
written notice describing in detail each transaction by it involving the
purchase, sale, lease, or other acquisition or loss or casualty to or
disposition of an interest in Fixed or Capital Assets which exceeds One Million
Dollars ($1,000,000), said notices to be delivered to the Administrative Agent
within thirty (30) days of the occurrence of each such transaction.
6.1.14 Financial Covenants.
(a) Fixed Charge Coverage Ratio. The Borrowers will maintain, on
a consolidated basis and tested as of the last day of each of the Borrowers'
fiscal quarters (i) during fiscal year 1998 only, for the period commencing
January 1, 1998 and ending on the last day of the applicable quarter, and (ii)
after fiscal year 1998, for the four (4) quarter period ending on the last day
of the applicable quarter, a EBITDA to Fixed Charges Ratio (i) of not less than
0.75 to 1.0 if the average Unused Availability during such quarter is
$25,000,000 or more or (ii) of not less than 1.0 to 1.0 if the average Unused
Availability during such quarter is less than $25,000,000.
(b) Funded Debt to EBITDA Ratio. The Borrowers will maintain, on
a consolidated basis and tested as of the last day of each of the Borrowers'
fiscal quarters for which the average Unused Availability during such quarter is
more than $25,000,000, for the four (4) quarter period ending on that date, a
ratio of Funded Debt to EBITDA of not more than 2.5 to 1.0.
(c) Capital Expenditures. The Borrowers and their Subsidiaries
will not permit Capital Expenditures to exceed in any fiscal year the following:
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Fiscal Year Limit
1998 $55,000,000
Thereafter per annum $40,000,000
Notwithstanding the foregoing, up to 25% of the unused portion of
the limit set forth above with respect to any fiscal year may be carried forward
and utilized in the immediately succeeding year.
6.1.15 Collection of Receivables.
Until such time that the Administrative Agent shall notify the
Borrowers of the revocation of such privilege, the Borrowers and their
Subsidiaries shall at their own expense have the privilege for the account of,
and in trust for, the Administrative Agent and the Lenders of collecting their
Receivables and receiving in respect thereto all Items of Payment and shall
otherwise completely service all of the Receivables including (a) the billing,
posting and maintaining of complete records applicable thereto, (b) the taking
of such action with respect to the Receivables as the Administrative Agent may
request or in the absence of such request, as each of the Borrowers and each of
the Subsidiaries may deem advisable; and (c) the granting, in the ordinary
course of business, to any Account Debtor, any rebate, refund or adjustment to
which the Account Debtor may be lawfully entitled, and may accept, in connection
therewith, the return of goods, the sale or lease of which shall have given rise
to a Receivable and may take such other actions relating to the settling of any
Account Debtor's claim as may be commercially reasonable. The Administrative
Agent may, at its option, at any time or from time to time after and during the
continuance of an Event of Default hereunder, revoke the collection privilege
given in this Agreement to any one or more of the Borrowers and each of the
Subsidiaries by either giving notice of its assignment of, and Lien on the
Collateral to the Account Debtors or giving notice of such revocation to the
Borrowers. The Administrative Agent shall not have any duty to, and the
Borrowers hereby release the Administrative Agent and the Lenders from all
claims of loss or damage caused by the delay or failure to collect or enforce
any of the Receivables or to preserve any rights against any other party with an
interest in the Collateral. The Administrative Agent shall be entitled at any
time and from time to time to confirm and verify Receivables with the Account
Debtors thereunder; provided, however, that absent an Event of Default, the
Administrative Agent shall effect such verification by a means which does not
identify the Administrative Agent by name.
6.1.16 Assignments of Receivables.
Each Borrower will promptly, upon request, execute and deliver to
the Administrative Agent written assignments, in form and content acceptable to
the Administrative Agent, of specific Receivables or groups of Receivables;
provided, however, the Lien and/or security interest granted to the
Administrative Agent, for the ratable benefit of the Lenders and for the benefit
of the Administrative Agent with respect to the Agents' Obligations, under this
Agreement shall not be limited in any way to or by the inclusion or exclusion of
Receivables within such assignments. Receivables so assigned shall secure
payment of the Obligations and are not sold to the Administrative Agent and/or
the Lenders whether or not any assignment thereof, which is separate from this
Agreement, is in form absolute. The Borrowers agree that neither any assignment
to the Lender nor any other provision contained in this Agreement or any
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of the other Financing Documents shall impose on the Administrative Agent or the
Lenders any obligation or liability of any of the Borrowers with respect to that
which is assigned and the Borrowers hereby agree jointly and severally to
indemnify the Administrative Agent and the Lenders and hold the Administrative
Agent and the Lenders harmless from any and all claims, actions, suits, losses,
damages, costs, expenses, fees, obligations and liabilities which may be
incurred by or imposed upon the Administrative Agent and/or any of the Lenders
by virtue of the assignment of and Lien on any Borrower's rights, title and
interest in, to, and under the Collateral, except for any such claims, actions,
suits, losses, damages, costs, expenses, fees, obligations or liabilities which
are the proximate result of the gross negligence or willful misconduct of the
Administrative Agent or any Lender.
6.1.17 Government Accounts.
The Borrowers will immediately notify the Administrative Agent if
any of the Receivables arise out of contracts with the United States or with any
other Governmental Authority, and, as appropriate, execute any instruments and
take any steps required by the Administrative Agent in order that all moneys due
and to become due under such contracts shall be assigned to the Administrative
Agent, for the ratable benefit of the Lenders and for the benefit of the
Administrative Agent with respect to the Agents' Obligations, and notice thereof
given to the Governmental Authority under the Federal Assignment of Claims Act
or any other applicable Laws.
6.1.18 Notice of Returned Goods, etc.
The Borrowers will promptly notify, and will cause the
Subsidiaries to promptly notify, the Administrative Agent of the return,
rejection or repossession of any goods sold or delivered in respect of any
Receivables, and of any claims made in regard thereto to the extent that the
aggregate purchase price of any such goods in any given calendar month exceeds
in the aggregate One Million Dollars ($1,000,000) for such month.
6.1.19 Inventory.
With respect to the Inventory, the Borrowers and their
Subsidiaries will: (a) as soon as possible upon demand by the Administrative
Agent from time to time, prepare and deliver to the Administrative Agent
designations of Inventory specifying the Borrowers' and Subsidiaries' cost of
Inventory, the retail price thereof, and such other matters and information
relating to the Inventory as the Administrative Agent may reasonably request;
provided; however, that unless an Event of Default shall have occurred and be
continuing such request shall not be made any more than one (1) time each
quarter; (b) keep correct and accurate records itemizing and describing the
kind, type, quality and quantity of Inventory, the Borrowers' and Subsidiaries'
cost therefor and the selling price thereof, all of which, subject to the
provisions of Section 6.1.3 above, records shall be available to the officers,
employees or agents of the Administrative Agent for inspection and copying
thereof; (c) not store any Inventory with a bailee, warehouseman or similar
Person without the Administrative Agent's prior written consent, which consent
may be conditioned on, among other things, delivery by the bailee, warehouseman
or similar Person to the Administrative Agent of warehouse receipts, in form
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acceptable to the Administrative Agent, in the name of the Administrative Agent
evidencing the storage of Inventory and the interests of the Administrative
Agent and the Lenders therein; and (d) permit the Administrative Agent and its
agents or representatives to inspect and examine the Inventory and to check and
test the same as to quality, quantity, value and condition at any time or times
hereafter during the Borrowers' and Subsidiaries' usual business hours or at
other reasonable times. Any such inspection described in this clause (d) shall
be subject to the provisions of Sections 6.1.3(a) and (c). The Borrowers shall
be permitted to sell their Inventory in the ordinary course of business until
the occurrence and during the continuation of an Event of Default.
6.1.20 Insurance With Respect to Capital Expenditure Line
Equipment and Inventory.
The Borrowers will (a) maintain and cause each of their
Subsidiaries to maintain hazard insurance with fire and extended coverage and
naming the Administrative Agent as an additional insured with loss payable to
the Administrative Agent as its respective interest may appear on the Capital
Expenditure Line Equipment and Inventory in an amount at least equal to the
lesser amount of the outstanding principal amount of the Obligations or the fair
market value of the Capital Expenditure Line Equipment and Inventory (but in any
event sufficient to avoid any co-insurance obligations) and with a specific
endorsement to each such insurance policy pursuant to which the insurer agrees
to give the Administrative Agent at least thirty (30) days written notice before
any alteration or cancellation of such insurance policy and that no act or
default of any of the Borrowers shall affect the right of the Administrative
Agent to recover under such policy in the event of loss or damage; and (b) file,
and cause each of their Subsidiaries to file, with the Administrative Agent,
upon its request, a detailed list of the insurance then in effect and stating
the names of the insurance companies, the amounts and rates of the insurance,
dates of the expiration thereof and the properties and risks covered thereby;
provided, however, that unless an Event of Default shall have occurred and be
continuing such request shall not be made any more than one (1) time each
quarter.
6.1.21 Maintenance of the Collateral.
The Borrowers will maintain the Collateral in good working order,
saving and excepting ordinary wear and tear and loss of maintenance due to
obsolescence or the items of Collateral no longer being necessary to the
operation of the business of the Borrowers, and will not permit anything to be
done to the Collateral which reasonably would be expected to materially impair
the value thereof. The Administrative Agent, or an agent designated by the
Administrative Agent, shall be permitted to enter the premises of each of the
Borrowers and their Subsidiaries and examine, audit and inspect the Collateral
at any reasonable time and from time to time in accordance with the provisions
of Sections 6.1.3(a) and (c). The Administrative Agent agrees to act in a
commercially reasonable manner when inspecting the premises of the Borrowers and
their Subsidiaries and when examining, auditing and/or inspecting the
Collateral. The Administrative Agent shall not have any duty to, and the
Borrowers hereby release the Administrative Agent and the Lenders from all
claims of loss or damage caused by the delay or failure to collect or enforce
any of the Receivables or to preserve any rights against any other
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party with an interest in the Collateral which occurs at any time during the
continuation of an Event of Default.
6.1.22 Assigned Local Currency Receivables
Each Local Currency Borrower shall assign its Accounts as
Assigned Local Currency Receivables promptly after such Accounts are created and
the Borrowers shall thereafter maintain the Assigned Local Currency Receivables
in compliance with each component of the definition of that term.
6.1.23 Capital Expenditure Line Equipment.
The Borrowers shall (a) maintain all Capital Expenditure Line
Equipment as personalty, (b) not affix any Capital Expenditure Line Equipment to
any real estate in such manner as to become a fixture or part of such real
estate, and (c) shall hold no Capital Expenditure Line Equipment on a sale on
approval basis. The Borrowers hereby declare their intent that, notwithstanding
the means of attachment, no goods of the Borrowers hereafter attached to any
realty shall be deemed a fixture, which declaration shall be irrevocable,
without the Administrative Agent's consent, until all of the Obligations have
been paid in full and all of the Commitments have been terminated or have
expired. All legal documents incident to each advance under the Loans and each
of the Letters of Credit shall be reasonably satisfactory to counsel for the
Administrative Agent.
6.1.24 Defense of Title and Further Assurances.
At their expense, the Borrowers will defend the title to the
Collateral (and any part thereof), and will promptly execute, acknowledge and
deliver any financing statement, renewal, affidavit, deed, assignment,
continuation statement, security agreement, certificate or other document which
the Administrative Agent in good faith may require in order to perfect,
preserve, maintain, continue, protect and/or extend the Lien or security
interest granted to the Administrative Agent, for the ratable benefit of the
Lenders and for the benefit of the Administrative Agent with respect to the
Agents' Obligations, under this Agreement, under any of the other Financing
Documents and the first priority of that Lien, subject only to the Permitted
Liens. The Borrowers will from time to time do whatever the Administrative Agent
reasonably may require by way of obtaining, executing, delivering, and/or filing
financing statements, landlords' or mortgagees' waivers, notices of assignment
and other notices and amendments and renewals thereof and the Borrowers will
take any and all steps and observe such formalities as the Administrative Agent
reasonably may require, in order to create and maintain a valid Lien upon,
pledge of, or paramount security interest in, the Collateral, subject to the
Permitted Liens. The Borrowers shall pay to the Administrative Agent on demand
all taxes, costs and expenses incurred by the Administrative Agent in connection
with the preparation, execution, recording and filing of any such document or
instrument. To the extent that the proceeds of any of the Accounts or
Receivables of the Borrowers are expected to become subject to the control of,
or in the possession of, a party other than the Borrowers or the Administrative
Agent, the Borrowers shall cause all such parties to execute and deliver on the
Closing Date security documents, financing statements or other documents as
requested by the Administrative Agent and as may be
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necessary to evidence and/or perfect the security interest of the Administrative
Agent, for the ratable benefit of the Lenders and for the benefit of the
Administrative Agent with respect to the Agents' Obligations, in those proceeds.
The Borrowers agree that a copy of a fully executed security agreement and/or
financing statement shall be sufficient to satisfy for all purposes the
requirements of a financing statement as set forth in Article 9 of the
applicable Uniform Commercial Code. Each Borrower hereby irrevocably appoints
the Administrative Agent as the Borrower's attorney-in-fact, with power of
substitution, in the name of the Administrative Agent or in the name of the
Borrower or otherwise, for the use and benefit of the Administrative Agent for
itself and the Lenders, but at the cost and expense of the Borrowers and without
notice to the Borrowers, to execute and deliver any and all of the instruments
and other documents and take any action which the Lender may require pursuant
the foregoing provisions of this Section 6.1.24; provided, however, that unless
the Lenders have a reasonable belief that any Lien securing the Obligations is
impaired or may be impaired by delay, no such filing shall be made unless the
Administrative Agent has requested the Borrowers to make such filing and the
Borrowers have failed to comply with such request within ten (10) Business Days
after such request has been delivered to the Borrowers.
6.1.25 Business Names; Locations.
Each Borrower will notify and cause each of the Subsidiaries to
notify the Administrative Agent not less than thirty (30) days prior to (a) any
change in the name under which the Borrower or the applicable Subsidiary
conducts its business, (b) any change of the location of the chief executive
office of the applicable Borrower or Subsidiary, and (c) the opening of any new
place of business or the closing of any existing place of business, and any
change in the location of the places where the Collateral, or any part thereof,
or the books and records, or any part thereof, are kept.
6.1.26 Subsequent Opinion of Counsel as to Recording
Requirements.
In the event that any Borrower or any Subsidiary shall transfer
its principal place of business or the office where it keeps its records
pertaining to the Collateral, upon the Administrative Agent's request the
Borrowers will provide to the Administrative Agent a subsequent opinion of
counsel as to the filing, recording and other requirements with which the
Borrowers and their Subsidiaries have complied to maintain the Lien and security
interest in favor of the Administrative Agent, for the ratable benefit of the
Lenders and for the benefit of the Administrative Agent with respect to the
Agents' Obligations, in the Collateral.
6.1.27 Use of Premises and Equipment.
The Borrowers agree that until the Obligations are fully paid and
all of the Commitments and the Letters of Credit have been terminated or have
expired, the Administrative Agent (a) after and during the continuance of an
Event of Default, may use any of the Borrowers' owned or leased lifts, hoists,
trucks and other facilities or equipment for handling or removing the
Collateral; and (b) shall have, and is hereby granted, a right of ingress and
egress to the places where the Collateral is located, and may proceed over and
through any of the Borrowers' owned or leased property, subject, however, to the
provisions of Section 6.1.3.
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6.1.28 Protection of Collateral.
The Borrowers agree that the Administrative Agent may at any time
during the continuation of an Event of Default take such steps as the
Administrative Agent deems reasonably necessary to protect the interest of the
Administrative Agent and the Lenders in, and to preserve the Collateral,
including, the hiring of such security guards or the placing of other security
protection measures as the Administrative Agent deems appropriate, may employ
and maintain at any of the Borrowers' premises a custodian who shall have full
authority to do all acts necessary to protect the interests of the
Administrative Agent and the Lenders in the Collateral and may lease warehouse
facilities to which the Administrative Agent may move all or any part of the
Collateral to the extent commercially reasonable. The Borrowers agree to
cooperate fully with the Administrative Agent's efforts to preserve the
Collateral and will take such actions to preserve the Collateral as the
Administrative Agent may reasonably direct. All of the Administrative Agent's
expenses of preserving the Collateral, including any reasonable expenses
relating to the compensation and bonding of a custodian, shall be part of the
Enforcement Costs.
Section 6.2 Negative Covenants.
So long as any of the Obligations or the Commitments or Letters of
Credit therefor shall be outstanding hereunder, the Borrowers agree with the
Administrative Agent and the Lenders that without the prior written consent of
the Administrative Agent:
6.2.1 Mergers, Acquisition or Sale of Assets.
None of the Borrowers will enter into any merger or consolidation
or amalgamation, windup or dissolve themselves (or suffer any liquidation or
dissolution) or acquire all or substantially all the assets of any Person, or
sell, lease or otherwise dispose of any of its assets (except Inventory disposed
of in the ordinary course of business prior to an Event of Default); provided,
however, that any Borrower may merge or consolidate with or sell, lease or
dispose of any of its assets to any other Borrower. Any consent of the
Administrative Agent to the disposition of any assets may be conditioned on a
specified use of the proceeds of disposition.
6.2.2 Subsidiaries.
None of the Borrowers will create or acquire any Subsidiaries
other than the Subsidiaries identified on the Collateral Disclosure List.
6.2.3 Purchase or Redemption of Securities, Dividend
Restrictions.
Except as permitted pursuant to the terms of the Senior Notes and
then only if no Event of Default or failure to maintain the availability
required by the Section 2.1.12(b) shall then exist or result therefrom, none of
the Borrowers will purchase, redeem or otherwise acquire any shares of its
capital stock or warrants now or hereafter outstanding, declare or pay any
dividends thereon (other than stock dividends), apply any of its property or
assets to the purchase, redemption or other retirement of, set apart any sum for
the payment of
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any dividends on, or for the purchase, redemption, or other retirement of, make
any distribution by reduction of capital or otherwise in respect of, any shares
of any class of capital stock of any Borrower, or any warrants, permit any
Subsidiary to purchase or acquire any shares of any class of capital stock of,
or warrants issued by, any Borrower, make any distribution to stockholders or
set aside any funds for any such purpose, and not prepay, purchase or redeem any
Indebtedness for Borrowed Money other than the Obligations.
6.2.4 Indebtedness for Borrowed Money.
None of the Borrowers will create, incur, assume or suffer to
exist any Indebtedness for Borrowed Money or permit any Subsidiary to do so,
except:
(a) the Obligations;
(b) current accounts payable arising in the ordinary course;
(c) the Senior Notes and the guarantees executed in connection
therewith;
(d) Indebtedness for Borrowed Money secured by Permitted Liens;
(e) Subordinated Indebtedness;
(f) Indebtedness for Borrowed Money of the Borrowers existing on
the date hereof and reflected on the financial statements furnished
pursuant to Section 4.1.11 (Financial Condition);
(g) Guarantees by any Borrower of Indebtedness for Borrowed Money
otherwise permitted hereunder of any other Borrower;
(h) Refinancing of any of the amounts listed in clauses (c) and
(d) above and in this clause (h), provided the amount as refinanced does
not exceed the original principal amount (or commitment with respect
thereto) of the Indebtedness for Borrowed Money so refinanced and on terms
not materially less favorable to the applicable Borrowers and do not result
in a Default or Event of Default;
(i) Indebtedness for Borrowed Money represented by Capitalized
Leases otherwise permitted by this Agreement and
(j) other Indebtedness for Borrowed Money in an amount not to
exceed in the aggregate for the Parent and its Subsidiaries at any time
outstanding, the sum of Five Million Dollars ($5,000,000) (or the
equivalent thereof in any other currency, as applicable), which
Indebtedness for Borrowed Money shall not be secured.
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6.2.5 Investments, Loans and Other Transactions.
Except as otherwise provided in this Agreement, none of the
Borrowers will, and will permit any of its Subsidiaries to, (a) make, assume,
acquire or continue to hold any investment in any real property (unless used in
connection with their business and treated as a Fixed or Capital Asset of any
Borrower or any Subsidiary) or any Person, whether by stock purchase, capital
contribution, acquisition of indebtedness of such Person or otherwise
(including, without limitation, investments in any joint venture or
partnership), (b) guaranty or otherwise become contingently liable for the
Liabilities or obligations of any Person, or (c) make any loans or advances, or
otherwise extend credit to any Person, except:
(i) any advance to an officer or employee of any Borrower or any
Subsidiary for travel or other business expenses in the ordinary course of
business, provided that the aggregate amount of all such advances by all of
the Borrowers and their Subsidiaries (taken as a whole) outstanding at any
time shall not exceed One Million Dollars ($1,000,000);
(ii) the endorsement of negotiable instruments for deposit or
collection or similar transactions in the ordinary course of business;
(iii) any investment in Cash Equivalents, which are pledged to
the Administrative Agent, for the ratable benefit of the Lenders and for
the benefit of the Administrative Agent with respect to the Agents'
Obligations, as collateral and security for the Obligations;
(iv) trade credit extended to customers in the ordinary course of
business;
(v) guarantees permitted pursuant to Section 6.2.4;
(vi) investments, loans, advances and guaranties not to exceed
$10,000,000 in the aggregate with respect to the VITEC venture for the
production of fuel storage and delivery systems for General Motors
Corporation and Chrysler Corporation; and
(vii) after January 1, 1999, other investments, loans, advances
and guaranties not to exceed $5,000,000 in the aggregate for any fiscal
year.
6.2.6 Stock of Subsidiaries.
None of the Borrowers will sell or otherwise dispose of any
shares of capital stock of any Subsidiary (except in connection with a merger or
consolidation of a Wholly Owned Subsidiary into any of the Borrowers or another
Wholly Owned Subsidiary of any of the
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Borrowers or with the dissolution of any Subsidiary) or permit any Subsidiary to
issue any additional shares of its capital stock except pro rata to its
stockholders.
6.2.7 Subordinated Indebtedness.
None of the Borrowers will, and will permit any Subsidiary to
make:
(a) any payment of principal of, or interest on, any of the
Subordinated Indebtedness, including, without limitation, the Subordinated
Debt, if a Default or Event of Default then exists hereunder or would
result from such payment;
(b) any payment of the principal or interest due on the
Subordinated Indebtedness as a result of acceleration thereunder or a
mandatory prepayment thereunder; (c) any amendment or modification of or
supplement to the documents evidencing or securing the Subordinated
Indebtedness; and (d) payment of principal or interest on the Subordinated
Indebtedness other than when due (without giving effect to any acceleration
of maturity or mandatory prepayment).
6.2.8 Liens.
Each Borrower agrees that it (a) will not create, incur, assume
or suffer to exist any Lien upon any of its properties or assets, whether now
owned or hereafter acquired, or permit any Subsidiary so to do, except for Liens
securing the Obligations and Permitted Liens, (b) will not agree to, assume or
suffer to exist any provision in any instrument or other document for confession
of judgment, cognovit or other similar right or remedy, (c) except as required
by law for real estate and other property taxes and for mechanic's and similar
liens, will not allow or suffer to exist any Permitted Liens to be superior to
Liens securing the Obligations, (d) will not enter into any contracts for the
consignment of goods, will not execute or suffer the filing of any financing
statements or the posting of any signs giving notice of consignments, and will
not, as a material part of its business, engage in the sale of goods belonging
to others, and (e) will not allow or suffer to exist the failure of any Lien
described in the Security Documents to attach to, and/or remain at all times
perfected on, any of the property described in the Security Documents.
6.2.9 Transactions with Affiliates.
None of the Borrowers nor any of their Subsidiaries will enter
into or participate in any transaction with any Affiliate unless the same is on
fair and reasonable terms consistent with past practice, or, except in the
ordinary course of business, with the officers, directors, employees and other
representatives of any Borrower and/or any Subsidiary.
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6.2.10 Other Businesses.
None of the Borrowers nor any of their Subsidiaries will engage
directly or indirectly in any business other than its current line of business
described elsewhere in this Agreement.
6.2.11 ERISA Compliance.
None of the Domestic Borrowers nor any Commonly Controlled Entity
shall: (a) engage in or permit any "prohibited transaction" (as defined in
ERISA); (b) cause any "accumulated funding deficiency" as defined in ERISA
and/or the Internal Revenue Code; (c) terminate any pension plan in a manner
which reasonably would be expected to result in the imposition of a lien on the
property of any Domestic Borrower pursuant to ERISA; (d) terminate or consent to
the termination of any Multi-employer Plan; or (e) incur a complete or partial
withdrawal with respect to any Multi-employer Plan.
6.2.12 Prohibition on Hazardous Materials.
None of the Borrowers shall place, manufacture or store or permit
to be placed, manufactured or stored any Hazardous Materials on any property
owned, operated or controlled by any Borrower or for which any Borrower is
responsible other than Hazardous Materials placed or stored on such property in
accordance with applicable Laws in the ordinary course of a Borrower's business
expressly described in this Agreement.
6.2.13 Method of Accounting; Fiscal Year.
Each Borrower agrees that:
(a) it shall not change the method of
accounting employed in the preparation of any financial statements
furnished to the Administrative Agent under the provisions of Section
6.1.1 (Financial Statements), unless required to conform to GAAP and on
the condition that the Borrowers' accountants shall furnish such
information as the Administrative Agent reasonably may request to
reconcile the changes with the Borrowers' prior financial statements; and
(b) it will not change its fiscal year
from a year ending on December 31.
6.2.14 Compensation.
None of the Borrowers nor any Subsidiary will pay any bonuses,
fees, compensation, commissions, salaries, drawing accounts, or other payments
(cash and non-cash), whether direct or indirect, to any stockholders of any
Borrower or any Subsidiary, or any Affiliate of any Borrower or any Subsidiary,
other than reasonable compensation for actual services rendered by stockholders
in their capacity as officers or employees.
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6.2.15 Transfer of Collateral.
Except to the extent permitted by and in compliance with the
provisions of this Agreement, none of the Borrowers nor any of their
Subsidiaries will transfer, or permit the transfer, to another location of any
of the Collateral or the books and records related to any of the Collateral.
6.2.16 Sale and Leaseback.
Except for transactions disclosed on Schedule 6.2.16, none of the
Borrowers nor any of the Subsidiaries will directly or indirectly enter into any
arrangement to sell or transfer all or any substantial part of its fixed assets
and thereupon or within one year thereafter rent or lease the assets so sold or
transferred.
6.2.17 Disposition of Collateral.
None of the Borrowers will sell, discount, allow credits or
allowances, transfer, assign, extend the time for payment on, convey, lease,
assign, transfer or otherwise dispose of the Collateral, except, prior to an
Event of Default, dispositions expressly permitted elsewhere in this Agreement,
the sale of Inventory in the ordinary course of business, and the sale of
unnecessary or obsolete equipment, but, in the case of Capital Expenditure Line
Equipment, only if the proceeds of the sale of such Capital Expenditure Line
Equipment are (a) used to purchase similar Capital Expenditure Line Equipment to
replace the unnecessary or obsolete Capital Expenditure Line Equipment or (b)
immediately turned over to the Administrative Agent for application to the
Obligations in accordance with the provisions of this Agreement.
ARTICLE V II
DEFAULT AND RIGHTS AND REMEDIES
Section 7.1 Events of Default.
The occurrence of any one or more of the following events shall
constitute an "Event of Default" under the provisions of this Agreement:
7.1.1 Failure to Pay.
The failure of the Borrowers to pay any of the Obligations as and
when due and payable in accordance with the provisions of this Agreement, the
Notes and/or any of the other Financing Documents and (except in the case of
payment of principal and/or interest) such failure shall have continued for a
period of five (5) days, there being no grace period with respect to a payment
at maturity.
7.1.2 Breach of Representations and Warranties.
Any representation or warranty made in this Agreement or in any
report, statement, schedule, certificate, opinion (including any opinion of
counsel for the Borrowers),
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financial statement or other document furnished in connection with this
Agreement, any of the other Financing Documents, or the Obligations, shall prove
to have been false or misleading when made (or, if applicable, when reaffirmed)
in any material respect.
7.1.3 Failure to Comply with Covenants.
The failure of the Borrowers to perform, observe or comply with
any covenant, condition or agreement contained in this Agreement. and, (i) only
with respect to a failure under Section 6.1.1 (Financial Statement), such
failure continues uncured for a period of five (5) days, or (ii) only with
respect to a failure under Sections 6.1.3(b) (Bookkeeping), 6.1.4 (Corporate
Existence), 6.1.6 (Preservation of Properties), or 6.1.9 (Taxes) which does not
relate to Taxes due or claimed to be due in excess of $250,000 in the aggregate,
if the Borrowers after discovering such failure, fail to diligently and
continuously pursue the cure of such failure or such failure continues uncured
thirty (30) days after discovery
7.1.4 Default Under Other Financing Documents or Obligations.
A default shall occur under any of the other Financing Documents
or under any other Obligations, and such default is not cured within any
applicable grace period provided therein.
7.1.5 Receiver; Bankruptcy.
Any Borrower or any Subsidiary shall (a) apply for or consent to
the appointment of a receiver, trustee or liquidator of itself or any of its
property, (b) admit in writing its inability to pay its debts as they mature,
(c) make a general assignment for the benefit of creditors, (d) be adjudicated a
bankrupt or insolvent, (e) file a voluntary petition in bankruptcy or a petition
or an answer seeking or consenting to reorganization or an arrangement with
creditors or to take advantage of any bankruptcy, reorganization, insolvency,
readjustment of debt, dissolution or liquidation law or statute, or an answer
admitting the material allegations of a petition filed against it in any
proceeding under any such law, or take corporate action for the purposes of
effecting any of the foregoing, or (f) by any act indicate its consent to,
approval of or acquiescence in any such proceeding or the appointment of any
receiver of or trustee for any of its property, or suffer any such receivership,
trusteeship or proceeding to continue undischarged for a period of sixty (60)
days, or (g) by any act indicate its consent to, approval of or acquiescence in
any order, judgment or decree by any court of competent jurisdiction or any
Governmental Authority enjoining or otherwise prohibiting the operation of a
material portion of any Borrower's or any Subsidiary's business or the use or
disposition of a material portion of any Borrower's or any Subsidiary's assets;
provided, however, that with respect to a Subsidiary which is not a Borrower,
the foregoing shall not be an Event of Default unless a Material Adverse Effect
results.
7.1.6 Involuntary Bankruptcy, etc.
(a) An order for relief shall be entered in any involuntary
case brought against any Borrower or any Subsidiary under the Bankruptcy Code or
any order or filing with a similar effect shall arise under any other Insolvency
Proceedings, or (b) any such
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case shall be commenced against any Borrower or any Subsidiary and shall not be
dismissed within sixty (60) days after the filing of the petition, or (c) an
order, judgment or decree under any other Law is entered by any court of
competent jurisdiction or by any other Governmental Authority on the application
of a Governmental Authority or of a Person other than any Borrower or any
Subsidiary (i) adjudicating any Borrower, or any Subsidiary bankrupt or
insolvent, or (ii) appointing a receiver, trustee or liquidator of any Borrower
or of any Subsidiary, or of a material portion of any Borrower's or any
Subsidiary's assets, or (iii) enjoining, prohibiting or otherwise limiting the
operation of a material portion of any Borrower's or any Subsidiary's business
or the use or disposition of a material portion of any Borrower's or any
Subsidiary's assets, and such order, judgment or decree continues unstayed and
in effect for a period of sixty (60) days from the date entered; provided,
however, that with respect to a Subsidiary which is not a Borrower, the
foregoing shall not be an Event of Default unless a Material Adverse Effect
results.
7.1.7 Judgment.
Unless adequately insured in the opinion of the
Administrative Agent, the entry of a final judgment for the payment of money
involving more than $5,000,000 against any Borrower or any Subsidiary, and the
failure by such Borrower or such Subsidiary to discharge the same, or cause it
to be discharged, within thirty (30) days from the date of the order, decree or
process under which or pursuant to which such judgment was entered, or to secure
a stay of execution pending appeal of such judgment.
7.1.8 Execution; Attachment.
Any execution or attachment shall be levied against the
Collateral, or any part thereof, and such execution or attachment shall not be
set aside, discharged or stayed within thirty (30) days after the same shall
have been levied.
7.1.9 Default Under Other Borrowings.
Default shall be made with respect to any Indebtedness in
excess of $5,000,000 of any of the Borrowers (other than the Loans) if the
effect of such default is to accelerate the maturity of such Indebtedness or to
permit the holder or obligee thereof or other party thereto to cause such
Indebtedness to become due prior to its stated maturity.
7.1.10 Challenge to Agreements.
Any Borrower shall challenge the validity and binding effect
of any provision of any of the Financing Documents or shall state its intention
to make such a challenge of any of the Financing Documents or any of the
Financing Documents shall for any reason (except to the extent permitted by its
express terms) cease to be effective or to create a valid and perfected first
priority Lien (except for Permitted Liens) on, or security interest in, any of
the Collateral purported to be covered thereby.
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7.1.11 Material Adverse Change.
The Administrative Agent, in its sole discretion, determines
in good faith that a material adverse change has occurred in the financial
condition of any of the Borrowers.
7.1.12 Liquidation, Termination, Dissolution, Change in
Control etc.
Any Borrower shall liquidate, dissolve or terminate its
existence or any change occurs in the control of any Borrower without the prior
written consent of the Administrative Agent or unless the same is otherwise
permitted by this Agreement.
7.1.13 Change in Control.
A "Change in Control" shall occur under the Senior Note
Indentures, as the case may be, or the Parent has issued any "Change of Control
Notice" or "Control Change" Notice thereunder.
Section 7.2 Remedies.
Upon the occurrence and during the continuation of any Event of
Default, the Administrative Agent may, in the exercise of its sole and absolute
discretion from time to time, and shall, at the direction of the Requisite
Lenders, at any time thereafter exercise any one or more of the following
rights, powers or remedies.
7.2.1 Acceleration.
The Administrative Agent may declare any or all of the
Obligations to be immediately due and payable, notwithstanding anything
contained in this Agreement or in any of the other Financing Documents to the
contrary, without presentment, demand, protest, notice of protest or of
dishonor, or other notice of any kind, all of which the Borrowers hereby waive.
7.2.2 Further Advances.
The Administrative Agent may from time to time without notice
to the Borrowers suspend, terminate or limit any further advances, loans or
other extensions of credit under the Commitment, under this Agreement and/or
under any of the other Financing Documents. Further, upon the occurrence and
during the continuation of an Event of Default or Default specified in Sections
7.1.5 (Receiver; Bankruptcy) or 7.1.6 (Involuntary Bankruptcy, etc.), the
Revolving Credit Commitments, the Letter of Credit Commitments and any agreement
in any of the Financing Documents to provide additional credit and/or to issue
Letters of Credit shall immediately and automatically terminate and the unpaid
principal amount of the Notes (with accrued interest thereon) and all other
Obligations then outstanding, shall immediately become due and payable without
further action of any kind and without presentment, demand, protest or notice of
any kind, all of which are hereby expressly waived by the Borrowers.
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7.2.3 Uniform Commercial Code.
The Administrative Agent shall have all of the rights and
remedies of a secured party under the applicable Uniform Commercial Code and
other applicable Laws. Upon demand by the Administrative Agent, the Borrowers
shall assemble the Collateral and make it available to the Administrative Agent,
at a place reasonably designated in the United States or reasonably designated
elsewhere by the Administrative Agent. The Administrative Agent or its agents
may without notice from time to time enter upon any Borrower's premises to take
possession of the Collateral, to remove it, to render it unusable, to process it
or otherwise prepare it for sale, or to sell or otherwise dispose of it.
Any written notice of the sale, disposition or other intended
action by the Administrative Agent with respect to the Collateral which is sent
by regular mail, postage prepaid, to the Borrowers at the address set forth in
Section 9.1 (Notices), or such other address of the Borrowers which may from
time to time be shown on the Administrative Agent's records, at least ten (10)
days prior to such sale, disposition or other action, shall constitute
commercially reasonable notice to the Borrowers. The Administrative Agent may
alternatively or additionally give such notice in any other commercially
reasonable manner. Nothing in this Agreement shall require the Administrative
Agent to give any notice not required by applicable Laws.
If any consent, approval, or authorization of any state,
municipal or other Governmental Authority or of any other Person or of any
Person having any interest therein, should be necessary to effectuate any sale
or other disposition of the Collateral, the Borrowers agree to execute all such
applications and other instruments, and to take all other action, as reasonably
may be required in connection with securing any such consent, approval or
authorization.
The Borrowers recognize that the Administrative Agent may be
unable to effect a public sale of all or a part of the Collateral consisting of
Subsidiary Securities by reason of certain prohibitions contained in the
Securities Act of 1933, as amended, and other applicable Federal and state Laws.
The Administrative Agent may, therefore, in its discretion, take such steps as
it may deem appropriate to comply with such Laws and may, for example, at any
sale of the Collateral consisting of securities restrict the prospective bidders
or purchasers as to their number, nature of business and investment intention,
including, without limitation, a requirement that the Persons making such
purchases represent and agree to the satisfaction of the Administrative Agent
that they are purchasing such securities for their account, for investment, and
not with a view to the distribution or resale of any thereof. The Borrowers
covenant and agree to do or cause to be done promptly all such acts and things
as the Administrative Agent reasonably may request from time to time and as may
be necessary to offer and/or sell the securities or any part thereof in a manner
which is valid and binding and in conformance with all applicable Laws. Upon any
such sale or disposition, the Administrative Agent shall have the right to
deliver, assign and transfer to the purchaser thereof the Collateral consisting
of securities so sold.
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7.2.4 Specific Rights With Regard to Collateral.
In addition to all other rights and remedies provided
hereunder or as shall exist at law or in equity from time to time, the
Administrative Agent may (but shall be under no obligation to), without notice
to any of the Borrowers, and each Borrower hereby irrevocably appoints the
Administrative Agent as its attorney-in-fact, with power of substitution, in the
name of the Administrative Agent and/or any or all of the Lenders and/or in the
name of any or all of the Borrowers or otherwise, for the use and benefit of the
Administrative Agent and the Lenders, but at the cost and expense of the
Borrowers and without notice to the Borrowers:
(a) request any Account Debtor obligated on any of the Accounts
to make payments thereon directly to the Administrative Agent, with the
Administrative Agent taking control of the cash and non-cash proceeds
thereof;
(b) compromise, extend or renew any of the Collateral or deal
with the same as it may deem advisable;
(c) make exchanges, substitutions or surrenders of all or any
part of the Collateral;
(d) copy, transcribe, or remove from any place of business of any
Borrower all books, records, ledger sheets, correspondence, invoices and
documents, relating to or evidencing any of the Collateral or without cost
or expense to the Administrative Agent or the Lenders, make such use of any
Borrower's place(s) of business as may be reasonably necessary to
administer, control and collect the Collateral;
(e) repair, alter or supply goods if necessary to fulfill in
whole or in part the purchase order of any Account Debtor;
(f) demand, collect, receipt for and give renewals, extensions,
discharges and releases of any of the Collateral;
(g) institute and prosecute legal and equitable proceedings to
enforce collection of, or realize upon, any of the Collateral;
(h) settle, renew, extend, compromise, compound, exchange or
adjust claims in respect of any of the Collateral or any legal proceedings
brought in respect thereof;
(i) endorse or sign the name of any Borrower upon any items of
payment, certificates of title, instruments, securities, stock powers,
documents, documents of title, financing statements, assignments, notices
or other writing relating to or part of the Collateral and on any proof of
claim in bankruptcy against an Account Debtor;
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(j) notify the Post Office authorities to change the address
for the delivery of mail to the Borrowers to such address or Post Office
Box as the Administrative Agent may designate and receive and open all mail
addressed to any of the Borrowers provided; however, that the Borrowers
shall have immediate access to the mail which does not pertain to the
Collateral; and
(k) take any other action necessary or beneficial to realize
upon or dispose of the Collateral or to carry out the terms of this
Agreement.
7.2.5 Application of Proceeds.
Any proceeds of sale or other disposition of the Collateral will
be applied by the Administrative Agent to the payment first of any and all
Agents' Obligations, then to any and all Enforcement Costs, and thereafter (i)
proceeds from Receivables and Inventory shall be applied first to the
Obligations with respect to the Revolving Credit Facility, second to the
Obligations with respect to the Capital Expenditure Line, then to any other
Obligations, (ii) proceeds from the Capital Expenditure Line Equipment which is
the subject of advances under the Capital Expenditure Line, first to the
Obligations with respect to the Capital Expenditure Line, second to the
Obligations with respect to the Revolving Credit Facility, and then to any other
Obligations, and (iii) proceeds from other Collateral shall be applied first to
the Obligations with respect to the Revolving Credit Facility, second to the
Obligations with respect to the Capital Expenditure Line, and then to any other
Obligations. If the sale or other disposition (by foreclosure, liquidation or
otherwise) of the Collateral fails to fully satisfy the Obligations, the
Domestic Borrowers shall remain liable to the Administrative Agent and the
Lenders for any deficiency.
7.2.6 Performance by Administrative Agent.
If the Borrowers shall fail to pay the Obligations or otherwise
fail to perform, observe or comply with any of the conditions, covenants, terms,
stipulations or agreements contained in this Agreement or any of the other
Financing Documents, the Administrative Agent without notice to or demand upon
the Borrowers and without waiving or releasing any of the Obligations or any
Event of Default, may (but shall be under no obligation to) at any time
thereafter make such payment or perform such act for the account and at the
expense of the Borrowers, and may enter upon the premises of the Borrowers for
that purpose and take all such action thereon as the Administrative Agent may
consider necessary or appropriate for such purpose and each of the Borrowers
hereby irrevocably appoints the Administrative Agent as its attorney-in-fact to
do so, with power of substitution, in the name of the Administrative Agent, in
the name of any or all of the Lenders, or in the name of any or all of the
Borrowers or otherwise, for the use and benefit of the Administrative Agent, but
at the cost and expense of the Borrowers and without notice to the Borrowers.
All sums so paid or advanced by the Administrative Agent together with interest
thereon from the date of payment, advance or incurring until paid in full at the
Post-Default Rate and all costs and expenses, shall
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be deemed part of the Enforcement Costs, shall be paid by the Borrowers to the
Administrative Agent on demand, and shall constitute and become a part of the
Agents' Obligations.
7.2.7 Other Remedies.
The Administrative Agent may from time to time proceed to protect
or enforce the rights of the Administrative Agent and/or any of the Lenders by
an action or actions at law or in equity or by any other appropriate proceeding,
whether for the specific performance of any of the covenants contained in this
Agreement or in any of the other Financing Documents, or for an injunction
against the violation of any of the terms of this Agreement or any of the other
Financing Documents, or in aid of the exercise or execution of any right, remedy
or power granted in this Agreement, the Financing Documents, and/or applicable
Laws. The Administrative Agent and each of the Lenders is authorized to offset
and apply to all or any part of the Obligations all moneys, credits and other
property of any nature whatsoever of any or all of the Borrowers now or at any
time hereafter in the possession of, in transit to or from, under the control or
custody of, or on deposit with, the Administrative Agent, any of the Lenders or
any Affiliate of the Administrative Agent or any of the Lenders.
ARTICLE V III
THE AGENT
Section 8.1 Appointment.
Each Lender hereby designates and appoints NationsBank as its agent
under this Agreement and the Financing Documents, and each Lender hereby
irrevocably authorizes the Administrative Agent to take such action or to
refrain from taking such action on its behalf under the provisions of this
Agreement and the Financing Documents and to exercise such powers as are set
forth herein or therein, together with such other powers as are reasonably
incidental thereto. The Administrative Agent agrees to act as such on the
express conditions contained in this ARTICLE VIII. The provisions of this
ARTICLE VIII are solely for the benefit of the Administrative Agent and the
Lenders and neither the Borrowers nor any Person shall have any rights as a
third party beneficiary of any of the provisions hereof. In performing its
functions and duties under this Agreement, the Administrative Agent shall act
solely as an administrative representative of the Lenders and does not assume
and shall not be deemed to have assumed any obligation toward or relationship of
agency or trust with or for the Lenders, the Borrowers or any Person. The
Administrative Agent may perform any of its duties hereunder, or under the
Financing Documents, by or through its agents or employees.
Section 8.2 Nature of Duties.
8.2.1 In General
The Administrative Agent shall have no duties, obligations or
responsibilities except those expressly set forth in this Agreement or in the
Financing Documents. The duties of the Administrative Agent shall be mechanical
and administrative in nature. The Administrative Agent shall not have by reason
of this Agreement a fiduciary
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relationship in respect of any Lender. Each Lender shall make its own
independent investigation of the financial condition and affairs of the
Borrowers in connection with the extension of credit hereunder and shall make
its own appraisal of the creditworthiness of the Borrowers, and the
Administrative Agent shall have no duty or responsibility, either initially or
on a continuing basis, to provide any Lender with any credit or other
information with respect thereto, whether coming into its possession before the
Closing Date or at any time or times thereafter. If the Administrative Agent
seeks the consent or approval of any of the Lenders to the taking or refraining
from taking of any action hereunder, then the Administrative Agent shall send
notice thereof to each Lender. The Administrative Agent shall promptly notify
each Lender any time that the applicable percentage of Lenders has instructed
the Administrative Agent to act or refrain from acting pursuant hereto.
8.2.2 Express Authorization
The Administrative Agent is hereby expressly and irrevocably
authorized by each of the Lenders, as agent on behalf of itself and the other
Lenders:
(a) to receive on behalf of each of the Lenders any payment or
collection on account of the Obligations and to distribute to each Lender
its Pro Rata Share of all such payments and collections so received as
provided in this Agreement;
(b) to receive all documents and items to be furnished to the
Lenders under the Financing Documents (nothing contained herein shall
relieve the Borrowers of any obligation to deliver any item directly to the
Lenders to the extent expressly required by the provisions of this
Agreement);
(c) to act or refrain from acting in this Agreement and in the
other Financing Documents with respect to those matters so designated for
the Administrative Agent;
(d) to act as nominee for and on behalf of the Lenders in and
under this Agreement and the other Financing Documents;
(e) to arrange for the means whereby the funds of the Lenders are
to be made available to the Borrowers;
(f) to distribute promptly to the Lenders, if required by the
terms of this Agreement, all written information, requests, notices, Loan
Notices, payments, Prepayments, documents and other items received from the
Borrowers or other Person;
(g) to amend, modify, or waive any provisions of this Agreement
or the other Financing Documents on behalf of the Lenders subject to the
requirement that certain of the Lenders' consent be obtained in certain
instances as provided in 9.2.2 (Circumstances Where Consent of all of the
Lenders is Required);
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(h) to deliver to the Borrowers and other Persons, all
requests, demands, approvals, notices, and consents received from any of
the Lenders;
(i) to exercise on behalf of each Lender all rights and
remedies of the Lenders upon the occurrence and during the continuation of
any Event of Default and/or Default specified in this Agreement and/or in
any of the other Financing Documents or applicable Laws;
(j) to execute any of the Security Documents and any other
documents on behalf of the Lenders as the secured party for the benefit of
the Administrative Agent and the Lenders; and
(k) to take such other actions as may be requested by the
Requisite Lenders.
Section 8.3 Rights, Exculpation, Etc.
Neither the Administrative Agent nor any of its officers, directors,
employees or agents shall be liable to any Lender for any action taken or
omitted by them hereunder or under any of the Financing Documents, or in
connection herewith or therewith, except that the Administrative Agent shall be
obligated on the terms set forth herein for performance of its express
obligations hereunder, and except that the Administrative Agent shall be liable
with respect to its own gross negligence or willful misconduct. The
Administrative Agent shall not be liable for any apportionment or distribution
of payments made by it in good faith and if any such apportionment or
distribution is subsequently determined to have been made in error the sole
recourse of any Lender to whom payment was due but not made, shall be to recover
from other the Lenders any payment in excess of the amount to which they are
determined to be entitled (and such other Lenders hereby agree to return to such
Lender any such erroneous payments received by them). The Administrative Agent
shall not be responsible to any Lender for any recitals, statements,
representations or warranties herein or for the execution, effectiveness,
genuineness, validity, enforceability, collectible, or sufficiency of this
Agreement or any of the Financing Documents or the transactions contemplated
thereby, or for the financial condition of any Person. The Administrative Agent
shall not be required to make any inquiry concerning either the performance or
observance of any of the terms, provisions or conditions of this Agreement or
any of the Financing Documents or the financial condition of any Person, or the
existence or possible existence of any Default or Event of Default. The
Administrative Agent may at any time request instructions from the Lenders with
respect to any actions or approvals which by the terms of this Agreement or of
any of the Financing Documents the Administrative Agent is permitted or required
to take or to grant, and the Administrative Agent shall be absolutely entitled
to refrain from taking any action or to withhold any approval and shall not be
under any liability whatsoever to any Person for refraining from any action or
withholding any approval under any of the Financing Documents until it shall
have received such instructions from the applicable percentage of the Lenders.
Without limiting the foregoing, no Lender shall have any right of action
whatsoever against the Administrative Agent as a result of the Administrative
Agent acting or refraining from acting under this Agreement or any of the other
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Financing Documents in accordance with the instructions of the applicable
percentage of the Lenders and notwithstanding the instructions of the Lenders,
the Administrative Agent shall have no obligation to take any action if it, in
good faith believes that such action exposes the Administrative Agent to any
liability.
Section 8.4 Reliance.
The Administrative Agent shall be entitled to rely upon any written
notices, statements, certificates, orders or other documents or any telephone
message or other communication (including any writing, telex, telecopy or
telegram) believed by it in good faith to be genuine and correct and to have
been signed, sent or made by the proper Person, and with respect to all matters
pertaining to this Agreement or any of the Financing Documents and its duties
hereunder or thereunder, upon advice of counsel selected by it. The
Administrative Agent may deem and treat the original Lenders as the owners of
the respective Notes for all purposes until receipt by the Administrative Agent
of a written notice of assignment, negotiation or transfer of any interest
therein by the Lenders in accordance with the terms of this Agreement. Any
interest, authority or consent of any holder of any of the Notes shall be
conclusive and binding on any subsequent holder, transferee, or assignee of such
Notes. The Administrative Agent shall be entitled to rely upon the advice of
legal counsel, independent accountants, and other experts selected by the
Administrative Agent in its sole discretion.
Section 8.5 Indemnification.
Each Lender, severally, agrees to reimburse and indemnify the
Administrative Agent for and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses, advances
or disbursements including, without limitation, Enforcement Costs, of any kind
or nature whatsoever which may be imposed on, incurred by, or asserted against
the Administrative Agent in any way relating to or arising out of this Agreement
or any of the Financing Documents or any action taken or omitted by the
Administrative Agent under this Agreement for any of the Financing Documents, in
proportion to each Lender's Pro Rata Share, all of the foregoing as they may
arise, be asserted or be imposed from time to time; provided, however, that no
Lender shall be liable for any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses, advances or
disbursements resulting from the Administrative Agent's gross negligence or
willful misconduct. The obligations of the Lenders under this Section 8.5 shall
survive the payment in full of the Obligations and the termination of this
Agreement.
Section 8.6 NationsBank Individually.
With respect to its Commitments and the Loans made by it, and the Notes
issued to it, NationsBank shall have and may exercise the same rights and powers
hereunder and is subject to the same obligations and liabilities as and to the
extent set forth herein for any other Lender. The terms "the Lenders" or
"Requisite Lenders" or any similar terms shall, unless the context clearly
otherwise indicates, include NationsBank in its individual capacity as a Lender
or one of the Requisite Lenders. NationsBank and its Affiliates may lend money
to, accept deposits from and generally engage in any kind of banking, trust or
other business with the Borrowers, any Affiliate
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of any Borrower, or any other Person or any of their officers, directors and
employees as if NationsBank were not acting as the Administrative Agent pursuant
hereto and the Administrative Agent may accept fees and other consideration from
the Borrowers, any Affiliate of the Borrowers or any of their officers,
directors and employees (in addition to the Agency Fees or other arrangements
fees heretofore agreed to between the Borrowers and the Administrative Agent)
for services in connection with this Agreement or otherwise without having to
account for or share the same with the Lenders.
Section 8.7 Successor Administrative Agent.
8.7.1 Resignation.
The Administrative Agent may resign from the performance of all
its functions and duties hereunder at any time by giving at least thirty (30)
Business Days' prior written notice to the Borrowers and the Lenders. Such
resignation shall take effect upon the acceptance by a successor Administrative
Agent of appointment pursuant to Section 8.7.2 (Appointment of Successor) or as
otherwise provided below.
8.7.2 Appointment of Successor.
Upon any such notice of resignation pursuant to Section 8.7.1
(Resignation), the Requisite Lenders shall appoint a successor to the
Administrative Agent, provided that if no Event of Default then shall exist,
such successor shall be subject to the consent of the Borrowers, which consent
shall not be unreasonably withheld or delayed. If a successor to the
Administrative Agent shall not have been so appointed within said thirty (30)
Business Day period, the Administrative Agent retiring, upon notice to the
Borrowers, shall then appoint a successor Administrative Agent who shall serve
as the Administrative Agent until such time, as the Requisite Lenders with the
consent of the Borrowers, provided no Event of Default than shall exist, appoint
a successor the Administrative Agent as provided above.
8.7.3 Successor Agents.
(a) Any Agent may resign from the performance of all its
functions and duties hereunder and/or under the other Financing Documents at any
time by giving 20 Business Days' prior written notice to the Borrowers and the
Lenders. Such resignation shall take effect upon the appointment of a successor
Agent pursuant to clauses (b) and (c) below or as otherwise provided below.
(b) Upon any such notice of resignation by any Agent, the
Requisite Lenders shall appoint a successor Agent hereunder who shall be a
commercial bank or trust company reasonably acceptable to the Borrowers.
(c) If a successor Agent shall not have been so appointed
within such 20 Business Day period, such retiring Agent, with the consent of the
Borrowers, which consent shall not be unreasonably withheld, shall then appoint
a successor Agent who shall serve as Agent hereunder until such time, if any, as
the Requisite Lenders appoint a successor Agent as provided in clause (b) above.
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(d) If no successor Agent has been appointed pursuant to
clause (b) or (c) above by the 25th Business Day after the date such notice of
resignation was given by the retiring Agent, the retiring Agent's resignation
shall become effective and the Requisite Lenders shall thereafter perform all
the duties of the retiring Agent hereunder and/or under any other Financing
Document until such time, if any, as the Requisite Lenders appoint a successor
Agent as provided in clause (b) above.
(e) After the resignation of any Agent hereunder, the
provisions of this ARTICLE VIII shall inure to its benefit as to any actions
taken or omitted to be taken by it while it was an Agent under this Agreement.
Upon the acceptance of any appointment as the Administrative
Agent under the Financing Documents by a successor Administrative Agent, such
successor to the Administrative Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the Administrative
Agent retiring, and the Administrative Agent retiring shall be discharged from
its duties and obligations under the Financing Documents. After any
Administrative Agent's resignation as the Administrative Agent under the
Financing Documents, the provisions of this ARTICLE VIII shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was the
Administrative Agent under the Financing Documents.
Section 8.8 Collateral Matters.
8.8.1 Release of Collateral, Guaranties.
The Lenders hereby irrevocably authorize the Administrative
Agent, at its option and in its discretion, to release any Lien granted to or
held by the Administrative Agent upon any property covered by this Agreement or
the Financing Documents:
(a) upon termination of the Commitments and payment and
satisfaction of all Obligations;
(b) constituting property being sold or disposed of if the
Borrowers certify to the Administrative Agent that the sale or disposition
is made in compliance with the provisions of this Agreement (and the
Administrative Agent may rely in good faith conclusively on any such
certificate, without further inquiry);
(c) constituting property leased to the Borrowers under a
lease which has expired or been terminated in a transaction permitted under
this Agreement or is about to expire and which has not been, and is not
intended by the Borrowers to be, renewed or extended; or
(d) constituting property covered by Permitted Liens with
lien priority superior to those Liens in favor or for the benefit of the
Lenders.
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In addition during any fiscal year of the Borrowers (x) the
Administrative Agent may release Collateral having a book value of not more than
5% of the book value of all Collateral, (y) the Administrative Agent, with the
consent of Requisite Lenders, may release Collateral having a book value of not
more than 10% of the book value of all Collateral and (z) the Administrative
Agent, with the consent of the Lenders having 90% of (i) the Commitments and
(ii) Loans, may release all the Collateral.
In addition, the Administrative Agent may release any Borrower
from its Guarantee, if such Borrower no longer is to be a Borrower hereunder
pursuant to the provisions of Section 6.2.1 hereof.
8.8.2 Confirmation of Authority, Execution of Releases.
Without in any manner limiting the Administrative Agent's
authority to act without any specific or further authorization or consent by the
Lenders as set forth in Section 8.8.1 (Release of Collateral; Guarantees), each
Lender agrees to confirm in writing, upon request by the Borrowers, the
authority to release any property or guarantees covered by this Agreement or the
Financing Documents conferred upon the Administrative Agent under Section 8.8.1
(Release of Collateral; Guarantees). So long as no Event of Default is then
continuing, upon receipt by the Administrative Agent of confirmation from the
requisite percentage of the Lenders, of its authority to release any particular
item or types of property or guarantees covered by this Agreement or the
Financing Documents, and upon at least five (5) Business Days prior written
request by the Borrowers, the Administrative Agent shall (and is hereby
irrevocably authorized by the Lenders to) execute such documents as may be
necessary to evidence the release of the Liens or guarantees granted to the
Administrative Agent for the benefit of the Lenders herein or pursuant hereto
upon such Collateral; provided, however, that (a) the Administrative Agent shall
not be required to execute any such document on terms which, in the
Administrative Agent's opinion, would expose the Administrative Agent to
liability or create any obligation or entail any consequence other than the
release of such Liens or guarantees without recourse or warranty, and (b) such
release shall not in any manner discharge, affect or impair the Obligations or
any Liens upon (or obligations of any Person in respect of), all interests
retained by any Person, including, without limitation, the proceeds of any sale,
all of which shall continue to constitute part of the property covered by this
Agreement or the Financing Documents.
8.8.3 Absence of Duty.
The Administrative Agent shall have no obligation whatsoever to
any Lender, the Borrowers or any other Person to assure that the property
covered by this Agreement or the Financing Documents exists or is owned by the
Borrowers or is cared for, protected or insured or has been encumbered or that
the Liens granted to the Administrative Agent on behalf of the Lenders herein or
pursuant hereto have been properly or sufficiently or lawfully created,
perfected, protected or enforced or are entitled to any particular priority, or
to exercise at all or in any particular manner or under any duty of care,
disclosure or fidelity, or to continue exercising, any of the rights,
authorities and powers granted or available to the Administrative Agent in this
Section 8.8.3 or in any of the Financing Documents, it being understood and
agreed that in respect of the property covered by this Agreement or the
Financing Documents or any act,
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omission or event related thereto, the Administrative Agent may act in any
manner it may deem appropriate, in its discretion, given the Administrative
Agent's own interest in property covered by this Agreement or the Financing
Documents as one of the Lenders and that the Administrative Agent shall have no
duty or liability whatsoever to any of the other the Lenders.
Section 8.9 Agency for Perfection.
Each Lender hereby appoints the Administrative Agent and each other
Lender as agent for the purpose of perfecting the Lenders' Liens in Collateral
which, in accordance with Article 9 of the Uniform Commercial Code in any
applicable jurisdiction or otherwise, can be perfected only by possession.
Should any Lender (other than the Administrative Agent) obtain possession of any
such Collateral, such Lender shall notify the Administrative Agent thereof, and,
promptly upon the Administrative Agent's request therefor, shall deliver such
Collateral to the Administrative Agent or in accordance with the Administrative
Agent's instructions.
Section 8.10 Exercise of Remedies.
Each Lender agrees that it will not have any right individually to
enforce or seek to enforce this Agreement or any Financing Document or to
realize upon any collateral security for the Obligations, it being understood
and agreed that such rights and remedies may be exercised only by the
Administrative Agent.
Section 8.11 Consents.
(a) In the event the Administrative Agent requests the
consent of a Lender and does not receive a written denial thereof, or a written
notice from a Lender that due course consideration of the request requires
additional time, in each case, within ten (10) Business Days after such Lender's
receipt of such request, then such Lender will be deemed to have given such
consent.
(b) In the event the Administrative Agent requests the
consent of a Lender and such consent is denied, then NationsBank may, at its
option, require such Lender to assign its interest in the Loans and the other
Obligations to NationsBank for a price equal to the then outstanding principal
amount thereof plus accrued and unpaid interest, fees and costs and expenses due
such Lender under the Financing Documents, which principal, interest, fees and
costs and expenses will be paid on the date of such assignment. In the event
that NationsBank elects to require any Lender to assign its interest to
NationsBank, NationsBank will so notify such Lender in writing within thirty
(30) days following such Lender's denial, and such Lender will assign its
interest to NationsBank no later than five (5) days following receipt of such
notice.
Section 8.12 Dissemination of Information.
The Administrative Agent will provide the Lenders with any information
received by the Administrative Agent from the Borrowers which is required to be
provided to the Administrative Agent or to the Lenders hereunder; provided,
however, that the Administrative Agent shall not
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be liable to any one or more the Lenders for any failure to do so, except to the
extent that such failure is attributable to the Administrative Agent's gross
negligence or willful misconduct.
Section 8.13 Discretionary Advances.
The Administrative Agent may, in its sole discretion, make, for the
account of the Lenders on a pro rata basis, advances under the Revolving Loan of
up to 10% in excess of the Borrowing Base (but not in excess of the limitation
set forth in aggregate Revolving Credit Commitments) for a period of not more
than 30 consecutive days.
ARTICLE IX
MISCELLANEOUS
Section 9.1 Notices.
All notices, requests and demands to or upon the parties to this
Agreement shall be in writing and shall be deemed to have been given or made
when delivered by hand on a Business Day, or two (2) days after the date when
deposited in the mail, postage prepaid by registered or certified mail, return
receipt requested, or when sent by overnight courier, on the Business Day next
following the day on which the notice is delivered to such overnight courier,
addressed as follows:
Borrowers: c/o Walbro Corporation
0000 Xxxxxx Xxxx
Xxxxxx Xxxxx, Xxxxxxxx 00000
Attn: Chief Financial Officer
with a copy to: Xxxxx Xxxxxxxxx, Esquire
Katten Muchen & Zavis
000 Xxxx Xxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000-0000
Administrative Agent: NationsBank, N.A.
000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx X. Xxxxxx,
Senior Vice President
with a copy to: Xxxxxxxxx X. Xxxxx, Xx., Esquire
Miles & Stockbridge
00 Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
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130
Lenders: NationsBank, N.A.
000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx X. Xxxxxx,
Senior Vice President
and at the addresses stated after their names
on the signature pages of this Agreement
By written notice, each party to this Agreement may change the address to which
notice is given to that party, provided that such changed notice shall include a
street address to which notices may be delivered by overnight courier in the
ordinary course on any Business Day.
Without implying any limitation of the foregoing paragraph, and with
respect only to those provisions which expressly allow the giving of notice by
telecopy, such telecopy notices shall be given to the Administrative Agent at
000.000.0000, Attention: Xxxxx X. Xxxxxx, or as the Administrative Agent may
otherwise provide by notice to the applicable party or to the Parent at
517.872.2301, Attention: Xxxxxxx X. Xxxxx, Chief Financial Officer.
Section 9.2 Amendments; Waivers.
9.2.1 In General.
This Agreement and the other Financing Documents may not
be amended, modified, or changed in any respect except by an agreement in
writing signed by the Administrative Agent, the Requisite Lenders and the
Borrowers, and, to the extent provided in Section 9.2.2 (Circumstances Where
Consent of all of the Lenders is Required), by an agreement in writing signed by
the Administrative Agent, all of the Lenders and the Borrowers. No waiver of any
provision of this Agreement or of any of the other Financing Documents, nor
consent to any departure by the Borrowers therefrom, shall in any event be
effective unless the same shall be in writing signed by the Requisite Lenders.
No course of dealing between the Borrowers and the Administrative Agent and/or
any of the Lenders and no act or failure to act from time to time on the part of
the Administrative Agent and/or any of the Lenders shall constitute a waiver,
amendment or modification of any provision of this Agreement or any of the other
Financing Documents or any right or remedy under this Agreement, under any of
the other Financing Documents or under applicable Laws. Without implying any
limitation on the foregoing, and subject to the provisions of Section 9.2.2
(Circumstances Where Consent of all of the Lenders is Required):
(a) Any waiver or consent shall be effective only
in the specific instance, for the terms and purpose for which given, subject to
such conditions as the Administrative Agent and Lenders may specify in any such
instrument.
(b) No waiver of any Default or Event of Default
shall extend to any subsequent or other Default or Event of Default, or impair
any right consequent thereto.
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(c) No notice to or demand on the Borrowers in
any case shall entitle the Borrowers to any other or further notice or demand in
the same, similar or other circumstance.
(d) No failure or delay by the Lenders to insist
upon the strict performance of any term, condition, covenant or agreement of
this Agreement or of any of the other Financing Documents, or to exercise any
right, power or remedy consequent upon a breach thereof, shall constitute a
waiver, amendment or modification of any such term, condition, covenant or
agreement or of any such breach or preclude the Lenders from exercising any such
right, power or remedy at any time or times.
(e) By accepting payment after the due date of
any amount payable under this Agreement or under any of the other Financing
Documents, the Lenders shall not be deemed to waive the right either to require
prompt payment when due of all other amounts payable under this Agreement or
under any of the other Financing Documents, or to declare a default for failure
to effect such prompt payment of any such other amount.
9.2.2 Circumstances Where Consent of all of the
Lenders is Required.
Notwithstanding anything to the contrary contained
herein, no amendment, modification, change or waiver shall be effective without
the consent of all of the Lenders to:
(a) extend the maturity of the principal of, or
interest on, any Note or of any of the other Obligations;
(b) reduce the principal amount of any Note or of
any of the other Obligations, the rate of interest thereon or the
Fees due to the Lenders, except as expressly permitted therein;
(c) change the aggregate Commitments;
(d) change the date of payment of principal of,
or interest on, any Note or of any of the other Obligations;
(e) change the method of calculation utilized in
connection with the computation of interest and Fees;
(f) change the manner of pro rata application by
the Administrative Agent of payments made by the Borrowers, or any
other payments required hereunder or under the other Financing
Documents;
(g) modify this Section, Section 8.8.1 (Release
of Collateral, Guarantees), Section 8.12 (Dissemination of
Information), or the definition of "Requisite Lenders;" or
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(h) change the definition of "Borrowing Base".
Additionally, no change may be made to the amount of a
Lender's Commitment or to the Lender's percentage of all Commitments without
the prior written consent of that Lender.
Section 9.3 Cumulative Remedies.
The rights, powers and remedies provided in this Agreement and in the other
Financing Documents are cumulative, may be exercised concurrently or separately,
may be exercised from time to time and in such order as the Administrative Agent
shall determine, subject to the provisions of this Agreement, and are in
addition to, and not exclusive of, rights, powers and remedies provided by
existing or future applicable Laws. In order to entitle the Administrative Agent
to exercise any remedy reserved to it in this Agreement, it shall not be
necessary to give any notice, other than such notice as may be expressly
required in this Agreement. Without limiting the generality of the foregoing and
subject to the terms of this Agreement, the Administrative Agent may:
(a) proceed against any one or more of the
Borrowers with or without proceeding against any other Person who
may be liable (by endorsement, guaranty, indemnity or otherwise)
for all or any part of the Obligations;
(b) proceed against any one or more of the
Borrowers with or without proceeding under any of the other
Financing Documents or against any Collateral or other collateral
and security for all or any part of the Obligations;
(c) without reducing or impairing the obligation
of the Borrowers and without notice, release or compromise with
any guarantor or other Person liable for all or any part of the
Obligations under the Financing Documents or otherwise;
(d) without reducing or impairing the obligations
of the Borrowers and without notice thereof:
(i) fail to perfect the Lien in
any or all Collateral or to release any or all the Collateral or
to accept substitute Collateral;
(ii) approve the making of advances
under the Revolving Loan under this Agreement;
(iii) waive any provision of this
Agreement or the other Financing Documents;
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(iv) exercise or fail to exercise
rights of set-off or other rights; or
(v) accept partial payments or
extend from time to time the maturity of all or any part of the
Obligations.
Section 9.4 Severability.
In case one or more provisions, or part thereof, contained in this Agreement
or in the other Financing Documents shall be invalid, illegal or unenforceable
in any respect under any Law, then without need for any further agreement,
notice or action:
(a) the validity, legality and enforceability of the
remaining provisions shall remain effective and binding on the parties
thereto and shall not be affected or impaired thereby;
(b) the obligation to be fulfilled shall be reduced to the
limit of such validity;
(c) if such provision or part thereof pertains to repayment
of the Obligations, then, at the sole and absolute discretion of the
Administrative Agent, all of the Obligations of the Borrowers to the
Administrative Agent and the Lenders shall become immediately due and
payable; and
(d) if the affected provision or part thereof does not
pertain to repayment of the Obligations, but operates or would prospectively
operate to invalidate this Agreement in whole or in part, then such
provision or part thereof only shall be void, and the remainder of this
Agreement shall remain operative and in full force and effect.
Section 9.5 Assignments by Lenders.
Any Lender may, with the prior written consent of the Administrative Agent
and, provided no Event of Default then exists, the Borrowers (which consent
shall not be unreasonably withheld), assign to any Person (each an "Assignee"
and collectively, the "Assignees") all or a portion of such Lender's
Commitments; provided that, after giving effect to such assignment, such Lender
must continue to hold a Pro Rata Share of the Commitments at least equal to Ten
Million Dollars ($10,000,000). Any Lender that elects to make such an assignment
shall pay to the Administrative Agent, for the exclusive benefit of the
Administrative Agent, an administrative fee for processing each such assignment
in the amount of Three Thousand Five Hundred Dollars ($3,500.00). Such Lender
and its Assignee shall notify the Administrative Agent and the Borrowers in
writing of the date on which the assignment is to be effective (the "Adjustment
Date"). On or before the Adjustment Date, the assigning Lender, the
Administrative Agent, the Borrowers and the respective Assignee shall execute
and deliver a
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written assignment agreement in a form acceptable to the Administrative Agent,
which shall constitute an amendment to this Agreement to the extent necessary to
reflect such assignment. Upon the request of any assigning Lender following an
assignment made in accordance with this Section 9.5, the Borrowers shall issue
new Notes to the assigning Lender and its Assignee reflecting such assignment,
in exchange for the existing Notes held by the assigning Lender.
In addition, notwithstanding the foregoing, any Lender may at any time
pledge all or any portion of such Lender's rights under this Agreement, any of
the Commitments or any of the Obligations to a Federal Reserve Bank.
Section 9.6 Participations by Lenders.
Any Lender may at any time sell to one or more financial institutions
participating interests in any of such Lender's Obligations or Commitments;
provided, however, that (a) no such participation shall relieve such Lender from
its obligations under this Agreement or under any of the other Financing
Documents to which it is a party, (b) such Lender shall remain solely
responsible for the performance of its obligations under this Agreement and
under all of the other Financing Documents to which it is a party, and (c) the
Borrowers, the Administrative Agent and the other Lenders shall continue to deal
solely and directly with such Lender in connection with such Lender's rights and
obligations under this Agreement and the other Financing Documents.
Section 9.7 Disclosure of Information by Lenders.
In connection with any sale, transfer, assignment or participation by any
Lender in accordance with Section 9.5 (Assignments by Lenders )or Section 9.6
(Participations by Lenders), each Lender shall have the right to disclose to any
actual or potential purchaser, assignee, transferee or participant all financial
records, information, reports, financial statements and documents obtained in
connection with this Agreement and/or any of the other Financing Documents or
otherwise, provided, however, that such proposed assignee or participant agrees
to be subject to the provisions of Section 9.20 hereof.
Section 9.8 Successors and Assigns.
This Agreement and all other Financing Documents shall be binding upon and
inure to the benefit of the Borrowers, the Administrative Agent, any other
Agents, and the Lenders and their respective heirs, personal representatives,
successors and assigns, except that the Borrowers shall not have the right to
assign their rights hereunder or any interest herein without the prior written
consent of the Administrative Agent and the Requisite Lenders, which consent
shall not unreasonably be withheld or delayed.
Section 9.9 Continuing Agreements.
All covenants, agreements, representations and warranties made by the
Borrowers in this Agreement, in any of the other Financing Documents, and in any
certificate delivered pursuant hereto or thereto shall survive the making by the
Lenders of the Loans, the issuance of Letters of Credit by the Appropriate
Letter of Credit Issuer, and the execution and delivery of the Notes,
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shall be binding upon the Borrowers regardless of how long before or after the
date hereof any of the Obligations were or are incurred, and shall continue in
full force and effect so long as any of the Obligations are outstanding and
unpaid. From time to time upon the Administrative Agent's request, and as a
condition of the release of any one or more of the Security Documents, the
Borrowers and other Persons obligated with respect to the Obligations shall
provide the Administrative Agent with such acknowledgments and agreements as the
Administrative Agent may require to the effect that there exists no defenses,
rights of setoff or recoupment, claims, counterclaims, actions or causes of
action of any kind or nature whatsoever against the Administrative Agent, any or
all of the Lenders, and/or any of its or their agents and others, or to the
extent there are, the same are waived and released.
Section 9.10 Enforcement Costs.
The Borrowers agree to pay to the Administrative Agent on demand all
Enforcement Costs, together with interest thereon from the date incurred or
advanced until paid in full at a per annum rate of interest equal at all times
to the (a) Base Rate, provided, no Event of Default then shall exist or (b) if
an Event of Default then shall exist, at the Post-Default Rate. Enforcement
Costs shall be immediately due and payable at the time advanced or incurred,
whichever is earlier. Without implying any limitation on the foregoing, the
Borrowers agree, as part of the Enforcement Costs, to pay upon demand any and
all stamp and other Taxes and fees payable or determined to be payable in
connection with the execution and delivery of this Agreement and the other
Financing Documents and to save the Administrative Agent and the Lenders
harmless from and against any and all liabilities with respect to or resulting
from any delay by Borrowers in paying or omission by Borrowers to pay any Taxes
or fees referred to in this Section. The provisions of this Section shall
survive the execution and delivery of this Agreement, the repayment of the other
Obligations and shall survive the termination of this Agreement. Without
limiting the foregoing, the Administrative Agent shall at the request of the
Parent provide to the Parent a written description of the Enforcement Costs.
Section 9.11 Applicable Law; Jurisdiction.
9.11.1 Applicable Law.
Borrowers acknowledge and agree that the Financing Documents,
including, this Agreement, shall be governed by the Laws of the State, as if
each of the Financing Documents and this Agreement had each been executed,
delivered, administered and performed solely within the State even though for
the convenience and at the request of the Borrowers, one or more of the
Financing Documents may be executed elsewhere. The Administrative Agent and the
Lenders acknowledge, however, that remedies under certain of the Financing
Documents which relate to property outside the State may be subject to the laws
of the state in which the property is located.
9.11.2 Submission to Jurisdiction.
The Borrowers irrevocably submit to the jurisdiction of any
state or federal court sitting in the State over any suit, action or proceeding
arising out of or relating to
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136
this Agreement or any of the other Financing Documents. Each of the Borrowers
irrevocably waives, to the fullest extent permitted by law, any objection that
it may now or hereafter have to the laying of the venue of any such suit, action
or proceeding brought in any such court and any claim that any such suit, action
or proceeding brought in any such court has been brought in an inconvenient
forum. Final judgment in any such suit, action or proceeding brought in any such
court shall be conclusive and binding upon the Borrowers and may be enforced in
any court in which the Borrowers are subject to jurisdiction, by a suit upon
such judgment, provided that service of process is effected upon the Borrowers
in one of the manners specified in this Section or as otherwise permitted by
applicable Laws.
9.11.3 Appointment of Administrative Agent for Service of
Process.
The Borrowers hereby irrevocably designate and appoint The
Corporation Trust, Incorporated, 00 Xxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxx 00000, as
the Borrowers' authorized agent to receive on the Borrowers' behalf service of
any and all process that may be served in any suit, action or proceeding of the
nature referred to in this Section in any state or federal court sitting in the
State. If such agent shall cease so to act, the Borrowers shall irrevocably
designate and appoint without delay another such agent in the State satisfactory
to the Administrative Agent and shall promptly deliver to the Administrative
Agent evidence in writing of such other agent's acceptance of such appointment
and its agreement that such appointment shall be irrevocable.
9.11.4 Service of Process.
Each of the Borrowers hereby consents to process being served
in any suit, action or proceeding of the nature referred to in this Section by
(a) the mailing of a copy thereof by registered or certified mail, postage
prepaid, return receipt requested, to such Borrower at such Borrower's address
designated in or pursuant to Section 9.1 (Notices), and (b) serving a copy
thereof upon the agent, if any, designated and appointed by such Borrower as
such Borrower's agent for service of process by or pursuant to this Section. The
Borrowers irrevocably agree that such service (y) shall be deemed in every
respect effective service of process upon the Borrowers in any such suit, action
or proceeding, and (z) shall, to the fullest extent permitted by law, be taken
and held to be valid personal service upon the Borrowers. Nothing in this
Section shall affect the right of the Administrative Agent to serve process in
any manner otherwise permitted by law or limit the right of the Administrative
Agent otherwise to bring proceedings against the Borrowers in the courts of any
jurisdiction or jurisdictions.
Section 9.12 Duplicate Originals and Counterparts.
This Agreement may be executed in any number of duplicate originals or
counterparts, each of such duplicate originals or counterparts shall be deemed
to be an original and all taken together shall constitute but one and the same
instrument.
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137
Section 9.13 Headings.
The headings in this Agreement are included herein for convenience only,
shall not constitute a part of this Agreement for any other purpose, and shall
not be deemed to affect the meaning or construction of any of the provisions
hereof.
Section 9.14 No Agency.
Nothing herein contained shall be construed to constitute the Borrowers as
the agent of the Administrative Agent or any of the Lenders for any purpose
whatsoever or to permit the Borrowers to pledge any of the credit of the
Administrative Agent or any of the Lenders. Neither any of the Agents nor any of
the Lenders shall (i) be responsible or liable for any shortage, discrepancy,
damage, loss or destruction of any part of the Collateral wherever the same may
be located and regardless of the cause other than gross negligence or willful
misconduct with respect to Collateral in the possession of the Administrative
Agent or Lender thereof or (ii) by anything herein or in any of the Financing
Documents or otherwise, except as may arise by express, written agreement signed
by the Agents and the Lenders, assume any of the Borrowers' obligations under
any contract or agreement assigned to the Administrative Agent and/or the
Lenders, and neither the Administrative Agent nor any of the Lenders shall be
responsible in any way for the performance by the Borrowers of any of the terms
and conditions thereof.
Section 9.15 Date of Payment.
Should the principal of or interest on the Notes become due and payable on a
day other than a Business Day, the maturity thereof shall be extended to the
next succeeding Business Day and in the case of principal, interest shall be
payable thereon at the rate per annum specified in the Notes during such
extension.
Section 9.16 Entire Agreement.
This Agreement is intended by the Administrative Agent, the Lenders and the
Borrowers to be a complete, exclusive and final expression of the agreements
contained herein. Neither the Administrative Agent, the Lenders nor the
Borrowers shall hereafter have any rights under any prior agreements pertaining
to the matters addressed by this Agreement but shall look solely to this
Agreement for definition and determination of all of their respective rights,
liabilities and responsibilities under this Agreement.
Section 9.17 Waiver of Trial by Jury.
THE BORROWERS, THE AGENT AND THE LENDERS HEREBY JOINTLY AND SEVERALLY
WAIVE TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO WHICH THE BORROWER AND THE
AGENT AND/OR ANY OR ALL OF THE LENDERS MAY BE PARTIES, ARISING OUT OF OR IN ANY
WAY PERTAINING TO (A) THIS AGREEMENT, (B) ANY OF THE FINANCING DOCUMENTS, OR (C)
THE COLLATERAL. THIS WAIVER CONSTITUTES A WAIVER OF TRIAL BY JURY OF ALL
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138
CLAIMS AGAINST ALL PARTIES TO SUCH ACTIONS OR PROCEEDINGS, INCLUDING CLAIMS
AGAINST PARTIES WHO ARE NOT PARTIES TO THIS AGREEMENT.
This waiver is knowingly, willingly and voluntarily made by the Borrowers,
the Administrative Agent and the Lenders, and the Borrowers, the Administrative
Agent and the Lenders hereby represent that no representations of fact or
opinion have been made by any individual to induce this waiver of trial by jury
or to in any way modify or nullify its effect. The Borrowers, the Administrative
Agent and the Lenders further represent that they have been represented in the
signing of this Agreement and in the making of this waiver by independent legal
counsel, selected of their own free will, and that they have had the opportunity
to discuss this waiver with counsel.
Section 9.18 Liability of the Administrative Agent and the Lenders.
The Borrowers hereby agree that neither the Administrative Agent nor any of
the Lenders shall be chargeable for any negligence, mistake, act or omission of
any accountant, examiner, agency or attorney employed by the Administrative
Agent and/or any of the Lenders in making examinations, investigations or
collections, or otherwise in perfecting, maintaining, protecting or realizing
upon any lien or security interest or any other interest in the Collateral or
other security for the Obligations.
By inspecting the Collateral or any other properties of the Borrowers or by
accepting or approving anything required to be observed, performed or fulfilled
by the Borrowers or to be given to the Administrative Agent and/or any of the
Lenders pursuant to this Agreement or any of the other Financing Documents,
neither the Administrative Agent nor any of the Lenders shall be deemed to have
warranted or represented the condition, sufficiency, legality, effectiveness or
legal effect of the same, and such acceptance or approval shall not constitute
any warranty or representation with respect thereto by the Administrative Agent
and/or the Lenders.
Section 9.19 Indemnification.
The Borrowers agrees to indemnify and hold harmless, the Administrative
Agent, the Lenders, the respective parent and Affiliates of the Administrative
Agent and the Lenders and the respective parent's and Affiliates' officers,
directors, shareholders, employees and agents (each an collectively, the
"Indemnified Parties"), from and against any and all claims, liabilities,
losses, damages, costs and expenses (whether or not such Indemnified Party is a
party to any litigation), including without limitation, reasonable attorney's
fees and costs and costs of investigation, document production, attendance at
depositions or other discovery, incurred by any Indemnified Party with respect
to, arising out of or as a consequence of (a) this Agreement or any of the other
Financing Documents, including without limitation, any failure of the Borrowers
to pay when due (at maturity, by acceleration or otherwise) any principal,
interest, fee or any other amount due under this Agreement or the other Loan
documents, or any other Event of Default; (b) the use by the Borrowers of any
proceeds advanced hereunder; (c) the transactions contemplated hereunder; or (d)
any claim, demand, action or cause of action being asserted against (i) the
Borrowers or any of their Affiliates by any other Person, or (ii) any
Indemnified Party by the Borrowers in connection with the transactions
contemplated hereunder.
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139
Notwithstanding anything herein or elsewhere to the contrary, the Borrowers
shall not be obligated to indemnify or hold harmless any Indemnified Party from
any liability, loss or damage resulting from the gross negligence, willful
misconduct or unlawful actions of such Indemnified Party. Any amount payable to
the Administrative Agent and/or the Lenders under this Section will bear
interest at the (i) Base Rate, provided no Event of Default then shall exist or
(ii) if an Event of Default then shall exist, at the Post-Default Rate from the
due date until paid.
Section 9.20 Confidentiality.
Each Lender agrees that it will use reasonable efforts to keep confidential
any non-public information from time to time supplied to it under any Financing
Document; provided, however, that nothing herein shall prevent the disclosure of
any such information to (a) the extent the Lender believes such disclosure is
required by applicable Laws, (b) the Lender's counsel, accountants, and other
representatives, (c) bank examiners, regulators, auditors or comparable Persons
(whether in the United States or elsewhere), (d) any Affiliate or successor of a
Lender, (e) each Agent, other Lender and other Person to whom such other Lender
may make a disclosure without violating this Section 9.20, (f) any assignee,
transferee or participant, or any potential assignee, transferee or participant,
of all or any portion of any Lender's rights under this Agreement who is
notified of the confidential nature of the information and who agrees, orally or
otherwise, to be bound by the provisions of this Section 9.20, or (g) any other
Person in connection with any litigation to which any one or more of the Lenders
is a party; and, provided further, that no Lender shall have obligations under
this Section 9.20 to the extent any such information becomes available on a
non-confidential basis from a source other than a Borrower or that information
becomes publicly available other than by breach of this Section 9.20.
IN WITNESS WHEREOF, each of the parties hereto have executed and delivered
this Agreement under their respective seals as of the day and year first written
above.
[SIGNATURES BEGIN ON THE FOLLOWING PAGE]
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140
WITNESS: NATIONSBANK, N.A., in its capacity as Lender
/s/ Xxxxxxx Xxxxxxx By: /s/ Xxxxx X. Xxxxxx (Seal)
------------------------------ -----------------------------
Xxxxxxx Xxxxxxx Xxxxx X. Xxxxxx
Senior Vice President
--------------------------------------------------------------------------
NATIONSBANK, N.A.
--------------------------------------------------------------------------
Credit Facility Committed Amount Pro Rata Share
--------------------------------------------------------------------------
Revolving Credit Facility $125,000,000 100%
--------------------------------------------------------------------------
Capital Expenditure Line $25,000,000 100%
--------------------------------------------------------------------------
Address:
NationsBank, N.A.
NationsBank Business Credit
000 Xxxxx Xxxxxxx Xxxxxx
Mail Stop MD4-325-04-14
Xxxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx X. Xxxxxx
WITNESS: NATIONSBANK, N.A.
in its capacity as Administrative Agent
/s/ Xxxxxxx Xxxxxxx By: /s/ Xxxxx X. Xxxxxx (Seal)
----------------------------- -------------------------------
Xxxxxxx Xxxxxxx Xxxxx X. Xxxxxx
Senior Vice President
[SIGNATURES OF THE BORROWERS BEGIN ON THE FOLLOWING PAGE]
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141
WITNESS: WALBRO CORPORATION
WALBRO AUTOMOTIVE CORPORATION
WALBRO ENGINE MANAGEMENT
CORPORATION
XXXXXXXXX ENGINEERED PRODUCTS, INC.
XXXXXX MANUFACTURING COMPANY
/s/ Xxxxxxx Xxxxxxx By: /s/ Xxxxxxx X. Xxxxx (Seal)
------------------------ ----------------------------
Xxxxxxx Xxxxxxx Xxxxxxx X. Xxxxx
Treasurer and Chief Financial Officer for
each of the foregoing
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142
LIST OF EXHIBITS
A. Additional Borrower Joinder Supplement
B-1. Revolving Credit Note
B-2 Capital Expenditure Note
B-3 Capital Expenditure Line Payment Schedule
C. Wire Transfer Procedures
D. Form of Compliance Certificate
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143
Exhibit A To Financing And Security Agreement
ADDITIONAL BORROWER JOINDER SUPPLEMENT
THIS ADDITIONAL BORROWER JOINDER SUPPLEMENT (this "Agreement") is made this
____ day of _____, ____, by and among WALBRO CORPORATION, a corporation
organized under the laws of the State of Delaware ("Parent"),
______________________, a _______________ corporation (the "Additional
Borrower") and wholly-owned subsidiary of the Parent, and NATIONSBANK, N.A.,
a national banking association ("NationsBank"), and each other person
which is a party to the Financing Agreement (as that term is defined below)
(collectively, the "Lenders" and individually, a "Lender"); and NATIONSBANK,
N.A., a national banking association, in its capacity as both collateral and
administrative agent for each or the Lenders (the "Administrative Agent")[ and
other Agents].
NOW, THEREFORE, for value received the undersigned agree as follows:
1. Reference is hereby made to the Financing and Security Agreement dated
as of May 29, 1998 (as amended, modified, restated, substituted, extended and
renewed at any time and from time to time, the "Financing Agreement") by and
among Parent, and each other Person which is included in the definition of
"Borrower" (as that term is defined in the Financing Agreement) immediately
prior to the date of this Agreement (together with Parent, the "Existing
Borrowers"), the "Lenders" from time to time parties thereto, the Administrative
Agent and the other "Agents" from time to time parties thereto. Capitalized
terms not otherwise defined in this Agreement shall have the meanings given to
them in the Financing Agreement.
2. (a) The Additional Borrower and the Existing Borrowers hereby
acknowledge, confirm and agree that on and as of the date of this Agreement the
Additional Borrower has become an "Additional Borrower" (as that term is defined
in the Financing Agreement), and, along with the Existing Borrowers, is included
in the definition of "Borrower" under the Financing Agreement and the other
Financing Documents for all purposes thereof, and as such shall be jointly and
severally liable, as provided in the Financing Documents, for all Obligations
thereunder (whether incurred or arising prior to, on, or subsequent to the date
hereof) and otherwise bound by all of the terms, provisions and conditions
thereof. Notwithstanding the foregoing, if the Additional Borrower is a Local
Currency Borrower, its liability shall be limited to that portion of the
Obligations directly attributable to it.
(b) [With respect to Domestic Borrowers: Without in any way implying
any limitation on any of the provisions of this Agreement, the Financing
Agreement, or any of the other Financing Documents, the Additional Borrower
hereby assigns, pledges and grants to the Administrative Agent, for the ratable
benefit of the Lenders as security for the Obligations and for the benefit of
the Agents as security for the Agents' Obligations, and agrees that the Agents
and the Lenders shall have a perfected and continuing security interest in, and
Lien on [describe Collateral]. The Additional Borrower further agrees that the
Administrative Agent, for the ratable benefit of the Lenders and for the benefit
of the Agents as security for the Agents' Obligations, shall have in respect
thereof all of the rights and remedies of a secured party under
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144
the Uniform Commercial Code as well as those provided in this Agreement, under
each of the other Financing Documents and under applicable Laws,]
(c) Without in any way implying any limitation on any of the
provisions of this Agreement, the Additional Borrower agrees to execute such
financing statements, instruments, and other documents as the Administrative
Agent may require including, without limitation, an allonge to the Notes.
3. Each of the Borrowers hereby covenants and agrees with the
Administrative Agent and the Lenders as follows:
(a) The Obligations include all present and future indebtedness,
duties, obligations, and liabilities, whether now existing or contemplated or
hereafter arising, of any one or more of the Additional Borrower or the Existing
Borrowers.
(b) Reference in this Agreement, the Financing Agreement and the other
Financing Documents to the "Borrower" or otherwise with respect to any one or
more of the Persons now or hereafter included in the definition of "Borrower"
shall mean each and every such Person and any one or more of such Persons,
jointly and severally, unless the context requires otherwise (by way of example,
and not limitation, if only one such Person is the owner of the real property
which is the subject of a mortgage).
4. (a) Each of the Borrowers hereby represents and warrants to the
Administrative Agent and the Lenders that each of them will derive benefits,
directly and indirectly, from each Letter of Credit and from each Loan, both in
their separate capacity and as a member of the integrated group to which each
such Person belongs and because the successful operation of the integrated group
is dependent upon the continued successful performance of the functions of the
integrated group as a whole, because (i) the terms of the consolidated financing
provided under this Agreement are more favorable than would otherwise would be
obtainable by such Persons individually, and (ii) the additional administrative
and other costs and reduced flexibility associated with individual financing
arrangements which would otherwise be required if obtainable would substantially
reduce the value to such Persons of the financing.
(b) Each of the Borrowers hereby represents and warrants that all of
the representations and warranties contained in the Financing Documents are true
and correct on and as of the date hereof as if made on and as of such date, both
before and after giving effect to this Agreement, and that no Event of Default
or Default has occurred and is continuing or exists or would occur or exist
after giving effect to this Agreement.
5. [Additional requirements]
6. This Agreement shall be governed by and construed and enforced in
accordance with the laws of the State of Maryland, without regard to principles
of choice of law.
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145
WITNESS the due execution hereof as of the day and year first written
above.
WITNESS: Additional Borrower:
________________________ By:______________________________(SEAL)
Name:
Title:
WITNESS: [Parent/Other Borrowers]
________________________ By:______________________________(SEAL)
Name:
Title:
WITNESS: NATIONSBANK, N.A.,
in its capacity as Administrative Agent
________________________ By:______________________________(Seal)
Name:
Title:
WITNESS: NATIONSBANK, N.A.
in its capacity as a Lender
________________________ By:______________________________(Seal)
Name:
Title:
WITNESS: [Other Lenders and Agents]
________________________ By:______________________________(Seal)
Name:
Title:
3
146
EXHIBIT B
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147
Exhibit B-1 to Financing and Security Agreement
REVOLVING CREDIT NOTE
$125,000,000 Baltimore, Maryland
May 29,1998
FOR VALUE RECEIVED, WALBRO CORPORATION, a corporation organized under the
laws of the State of Delaware, WALBRO AUTOMOTIVE CORPORATION, a corporation
organized under the laws of the State of Delaware, WALBRO ENGINE MANAGEMENT
CORPORATION, a corporation organized under the laws of the State of Delaware,
XXXXXXXXX ENGINEERED PRODUCTS, INC., a corporation organized under the laws of
the State of Delaware, and XXXXXX MANUFACTURING COMPANY, a corporation organized
under the laws of the State of Michigan (each a "Borrower" and collectively the
"Borrowers"), jointly and severally, promise to pay to the order of NATIONSBANK,
N.A., a national banking association (the "Lender"), the principal sum of ONE
HUNDRED TWENTY-FIVE MILLION DOLLARS ($125,000,000) (the "Principal Sum"), or so
much thereof as has been or may be advanced and/or readvanced to or for the
account of any Borrower pursuant to the terms and conditions of the Financing
Agreement (as hereinafter defined), together with interest thereon at the rate
or rates hereinafter provided, in accordance with the following:
1. Interest.
Commencing as of the date hereof and continuing until repayment in full of
all sums due hereunder, the unpaid Principal Sum shall bear interest at the
Applicable Interest Rate or the Post Default Rate in effect from time to time
for the Revolving Loan. The Applicable Interest Rate shall be determined in the
manner provided in the Financing Agreement.
2. Payments and Maturity.
The unpaid Principal Sum, together with interest thereon at the rate or
rates provided above, shall be payable as follows:
(a) Interest only on the unpaid Principal Sum shall be due and payable
on each Interest Payment Date; and
(b) Unless sooner paid, the unpaid Principal Sum, together with
interest accrued and unpaid thereon, shall be due and payable in full on the
Revolving Credit Expiration Date.
The fact that the balance hereunder may be reduced to zero from time to
time pursuant to the Financing Agreement will not affect the continuing validity
of this Note or the Financing Agreement, and the balance may be increased to the
Principal Sum after any such reduction to zero.
3. Default Interest.
148
Exhibit B-1 to Financing and Security Agreement
Upon the occurrence of an Event of Default (as hereinafter defined), at the
option of the Administrative Agent and upon written notice to the Borrowers, the
unpaid Principal Sum shall bear interest thereafter at the Post-Default Rate
until such Event of Default is cured or waived.
4. Application and Place of Payments.
All payments made on account of this Note shall be applied in the manner
provided in the Financing Agreement. All payments on account of this Note shall
be paid in lawful money of the United States of America in immediately available
funds during regular business hours of the NationsBank, N.A., a national
banking association (the "Administrative Agent" under the Financing Agreement),
at its NationsBank Business Credit office at 000 Xxxxx Xxxxxxx Xxxxxx,
Xxxxxxxxx, Xxxxxxxx, or at such other times and other Appropriate Payment
Offices as the Administrative Agent may at any time and from time to time
designate in writing to the Borrowers.
5. Prepayment.
The Borrowers may prepay the Principal Sum at the times and in the manner
provided in the Financing Agreement.
6. Financing Agreement and Other Financing Documents.
This Note is the "Revolving Credit Note" described in a Financing and
Security Agreement of even date herewith by and among the Administrative Agent,
the Lender, the other Lenders under the Financing Agreement, and the Borrowers
(as amended, modified, restated, substituted, extended and renewed at any time
and from time to time, the "Financing Agreement"). The indebtedness evidenced by
this Note is included within the meaning of the term "Obligations" as defined in
the Financing Agreement. The term "Financing Documents" as used in this Note
shall mean collectively this Note, the Financing Agreement and any other
instrument, agreement, or document previously, simultaneously, or hereafter
executed and delivered by any Borrower and/or any other person, singularly or
jointly with any other person, evidencing, securing, guaranteeing, or in
connection with the Principal Sum, this Note and/or the Financing Agreement.
7. Security.
This Note is secured as provided in the Financing Agreement.
The occurrence of any one or more of the following events shall constitute
an event of default (individually, an "Event of Default" and collectively, the
"Events of Default") under the terms of this Note:
(a) The failure of the Borrowers to pay to the Lender when due any and
all amounts payable by the Borrowers to the Lender under the terms of this
Note; or
(b) The occurrence of an event of default (as defined therein) under
the terms and conditions of any of the other Financing Documents.
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149
Exhibit B-1 to Financing and Security Agreement
9. Remedies.
Upon the occurrence and during the continuation of an Event of Default, at
the option of the Lender, all amounts payable by the Borrowers to the Lender
under the terms of this Note shall immediately become due and payable by the
Borrowers to the Lender without notice to the Borrowers or any other person, and
the Lender shall have all of the rights, powers, and remedies available under
the terms of this Note, any of the other Financing Documents and all applicable
laws. The Borrowers and all endorsers, guarantors, and other parties who may now
or in the future be primarily or secondarily liable for the payment of the
indebtedness evidenced by this Note hereby severally waive presentment, protest
and demand, notice of protest, notice of demand and of dishonor and non-payment
of this Note and expressly agree that this Note or any payment hereunder may be
extended from time to time without in any way affecting the liability of the
Borrowers, guarantors and endorsers.
10. Expenses.
The Borrowers promise to pay to the Lender on demand by the Lender all
reasonable costs and expenses incurred by the Lender in connection with the
collection and enforcement of this Note, including, without limitation,
reasonable attorneys' fees and expenses and all court costs.
11. Notices.
Any notice, request, or demand to or upon the Borrowers or the Lender
shall be deemed to have been properly given or made when delivered in accordance
with Section 9.1 of the Financing Agreement.
12. Miscellaneous.
Each right, power, and remedy of the Lender as provided for in this Note or
any of the other Financing Documents, or now or hereafter existing under any
applicable law or otherwise shall be cumulative and concurrent and shall be in
addition to every other right, power, or remedy provided for in this Note or any
of the other Financing Documents or now or hereafter existing under any
applicable law, and the exercise or beginning of the exercise by the Lender of
any one or more of such rights, powers, or remedies shall not preclude the
simultaneous or later exercise by the Lender of any or all such other rights,
powers, or remedies. No failure or delay by the Lender to insist upon the
strict performance of any term, condition, covenant, or agreement of this Note
or any of the other Financing Documents, or to exercise any right, power, or
remedy consequent upon a breach thereof, shall constitute a waiver of any such
term, condition, covenant, or agreement or of any such breach, or preclude the
Lender from exercising any such right, power, or remedy at a later time or
times. By accepting payment after the due date of any amount payable under the
terms of this Note, the Lender shall not be deemed to waive the right either to
require prompt payment when due of all other amounts payable under the terms of
this Note or to declare an Event of Default for the failure to effect such
prompt payment of any such other amount. No course of dealing or conduct shall
be effective to amend, modify, waive, release, or change any provisions of this
Note.
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Exhibit B-1 to Financing and Security Agreement
13. Partial Invalidity.
In the event any provision of this Note (or any part of any provision) is
hold by a court of competent jurisdiction to be invalid, illegal, or
unenforceable in any respect, such invalidity, illegality, or unenforceability
shall not affect any other provision (or remaining part of the affected
provision) of this Note; but this Note shall be construed as if such invalid,
illegal, or unenforceable provision (or part thereof) had not been contained in
this Note, but only to the extent it is invalid, illegal, or unenforceable.
14. Captions.
The captions herein set forth are for convenience only and shall not be
deemed to define, limit, or describe the scope or intent of this Note.
15. Applicable Law.
The Borrowers acknowledge and agree that this Note shall be governed by the
laws of the State of Maryland, even though for the convenience and at the
request of the Borrowers, this Note may be executed elsewhere.
16. Consent to Jurisdiction.
Each Borrower irrevocably submits to the jurisdiction of any state or
federal court sitting in the State of Maryland over any suit, action, or
proceeding arising out of or relating to this Note or any of the other
Financing Documents. Each Borrower irrevocably waives, to the fullest extent
permitted by law, any objection that the respective Borrower may now or
hereafter have to the laying of venue of any such suit, action, or proceeding
brought in any such court and any claim that any such suit, action, or
proceeding brought in any such court has been brought in an inconvenient forum.
Final judgment in any such suit, action, or proceeding brought in any such court
shall be conclusive and binding upon the respective Borrower and may be enforced
in any court in which such Borrower is subject to jurisdiction by a suit upon
such judgment, provided that service of process is effected upon such Borrower
as provided in this Note or as otherwise permitted by applicable law.
17. Service of Process.
Each Borrower hereby irrevocably designates and appoints CT Corporation
System, 000 Xxxx Xxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxx, 00000, as the respective
Borrower's authorized agent to receive on such Borrower's behalf service of any
and all process that may be served in any suit, action, or proceeding instituted
in connection with this Note in any state or federal court sitting in the State
of Maryland. If such agent shall cease so to act, each Borrower shall
irrevocably designate and appoint without delay another such agent in the State
of Maryland satisfactory to the Lender and shall promptly deliver to the Lender
evidence in writing of such agent's acceptance of such appointment and its
agreement that such appointment shall be irrevocable.
The Borrowers hereby consent to process being served in any suit, action,
or proceeding instituted in connection with this Note by (a) the mailing of a
copy thereof by certified mail,
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Exhibit B-1 to Financing and Security Agreement
postage prepaid, return receipt requested, to the Borrowers at the address for
notices set forth in Section 9.1 of the Financing Agreement and (b) serving a
copy thereof upon CT Corporation System, the agent hereinabove designated and
appointed by the Borrowers as the Borrowers' agent for service of process. The
Borrowers irrevocably agree that such service shall be deemed in every respect
effective service of process upon the Borrowers in any such suit, action or
proceeding, and shall, to the fullest extent permitted by law, be taken and held
to be valid personal service upon the Borrowers. Nothing in this Section shall
affect the right of the Lender to serve process in any manner otherwise
permitted by law or limit the right of the Lender otherwise to bring proceedings
against any Borrower in the courts of any jurisdiction or jurisdictions.
18. WAIVER OF TRIAL BY JURY.
THE BORROWERS AND THE LENDER HEREBY WAIVE TRIAL BY JURY IN ANY ACTION OR
PROCEEDING TO WHICH THE BORROWERS AND THE LENDER MAY BE PARTIES, ARISING OUT OF
OR IN ANY WAY PERTAINING TO (A) THIS NOTE OR (B) THE FINANCING DOCUMENTS. IT IS
AGREED AND UNDERSTOOD THAT THIS WAIVER CONSTITUTES A WAIVER OF TRIAL BY JURY OF
ALL CLAIMS AGAINST ALL PARTIES TO SUCH ACTIONS OR PROCEEDINGS, INCLUDING CLAIMS
AGAINST PARTIES WHO ARE NOT PARTIES TO THIS NOTE.
THIS WAIVER IS KNOWINGLY, WILLINGLY AND VOLUNTARILY MADE BY THE BORROWERS
AND THE BORROWERS HEREBY REPRESENT THAT NO REPRESENTATIONS OF FACT OR OPINION
HAVE BEEN MADE BY ANY INDIVIDUAL TO INDUCE THIS WAIVER OF TRIAL BY JURY OR TO IN
ANY WAY MODIFY OR NULLIFY ITS EFFECT. THE BORROWERS FURTHER REPRESENT THAT THEY
HAVE BEEN REPRESENTED IN THE SIGNING OF THIS NOTE AND IN THE MAKING OF THIS
WAIVER BY INDEPENDENT LEGAL COUNSEL, SELECTED OF THEIR OWN FREE WILL, AND THAT
THEY HAVE HAD THE OPPORTUNITY TO DISCUSS THIS WAIVER WITH COUNSEL.
IN WITNESS W11EREOF, each Borrower has caused this Note to be executed
under seal by its duly authorized officers as of the date first written above.
WITNESS OR ATTEST: WALBRO CORPORATION
WALBRO AUTOMOTIVE CORPORATION
WALBRO ENGINE MANAGEMENT CORPORATION
XXXXXXXXX ENGINEERED PRODUCTS, INC.
XXXXXX MANUFACTURING COMPANY
___________________________ By:______________________________(Seal)
Xxxxxxx X. Xxxxx
Treasurer and Chief Financial Officer
for each of the foregoing
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152
Exhibit B-2 to Financing and Security Agreement
CAPITAL EXPENDITURE LINE NOTE
$25,000,000 Baltimore, Maryland
May 29,1998
FOR VALUE RECEIVED, WALBRO CORPORATION, a corporation organized under the
laws of the State of Delaware, WALBRO AUTOMOTIVE CORPORATION, a corporation
organized under the laws of the State of Delaware, WALBRO ENGINE MANAGEMENT
CORPORATION, a corporation organized under the laws of the State of Delaware, AD
ENGINEERED, PRODUCTS, INC., a corporation organized under the laws of the State
of Delaware, and XXXXXX MANUFACTURING COMPANY, a corporation organized under the
laws of the State of Michigan (each a "Borrower" and collectively the
"Borrowers"), jointly and severally, promise to pay to the order of NATIONSBANK,
N.A., a national banking association (the "Lender"), the principal sum of
TWENTY-FIVE MILLION DOLLARS ($25,000,000) (the "Principal Sum"), or such lesser
amount equal to the Lender's Capital Expenditure Line Pro Rata Share (as that
term is defined in the "Financing Agreement" as that term is defined below) of
the Capital Expenditure Line (as that term is defined in the Financing
Agreement) or so much thereof as has been or may be advanced or readvanced under
the Capital Expenditure Line, to or for the account of the Borrowers pursuant to
the terms and conditions of the Financing Agreement, together with interest
thereon at the rate or rates hereinafter provided, in accordance with the
following:
1. Interest.
Commencing as of the date hereof and continuing until repayment in full of
all sums due hereunder, the unpaid Principal Sum shall bear interest at the
Applicable Interest Rate or the Post Default Rate in effect from time to time
for the Capital Expenditure Line. The Applicable Interest Rate shall be
determined in the manner provided in the Financing Agreement.
2. Payments and Maturity.
The unpaid Principal Sum, together with interest thereon at the rate or
rates provided above, shall be payable as follows:
(a) Interest only on the unpaid Principal Sum shall be due and
payable monthly, commencing July 1, 1998, and on the first day of each month
thereafter to maturity; and
(b) The Borrowers shall pay to the Lender its Capital Expenditure Line
Pro Rata Share of payments made pursuant to the Capital Expenditure Line
Installment Payment Schedule at the times and in the manner set forth in Section
2.4.4 of the Financing Agreement; and
(c) Unless sooner paid, the unpaid Principal Sum, together with
interest accrued and unpaid thereon, shall be due and payable in full on the
earlier of May 31, 2003 or the Revolving Credit Termination Date.
Except on the Capital Expenditure Line Termination Date, the fact that the
balance hereunder may be reduced to zero from time to time pursuant to the
Financing Agreement will
153
Exhibit B-2 to Financing and Security Agreement
not affect the continuing validity of this Note or the Financing Agreement, and
the balance may be increased to the Principal Sum after any such reduction to
zero.
3. Default Interest.
Following the occurrence and during the continuation of an Event of
Default, at the option of the Administrative Agent and upon written notice to
the Borrowers, the unpaid Principal Sum shall bear interest at the Post-Default
Rate until such Event of Default is cured or waived.
4. Application and Place of Payments.
All payments made on account of this Note shall be applied in the manner
provided in the Financing Agreement. All payments on account of this Note shall
be paid in lawful money of the United States of America in immediately available
funds during regular business hours of the NationsBank N.A., a national banking
association (the "Administrative Agent" under the Financing Agreement), at its
NationsBank Business Credit office at 000 Xxxxx Xxxxxxx Xxxxxx, Xxxxxxxxx,
Xxxxxxxx, or at such other times and places as the Administrative Agent may at
any time and from time to time designate in writing to the Borrowers.
5. Prepayment.
The Borrowers may prepay the Principal Sum at the times and in the manner
provided in the Financing Agreement.
6. Financing Agreement and Other Financing Documents.
This Note is a "Capital Expenditure Line Note" described in a Financing and
Security Agreement of even date herewith (as amended, modified, restated,
substituted, extended and renewed at any time and from time to time, the
"Financing Agreement") by and among the Agent, the Lender, the other Lenders
under the Financing Agreement, and the Borrowers. All terms used in this Note
which are not otherwise defined herein shall have the meaning set forth In the
Financing Agreement. The indebtedness evidenced by this Note is included within
the meaning of the term "Obligations" as defined in the Financing Agreement,
7. Security.
This Note is secured as provided in the Financing Agreement.
8. Events of Default.
The occurrence of any one or more of the following events shall constitute
an event of default (individually, an "Event of Default" and collectively, the
"Events of Default") under the terms of this Note-,
(a) The failure of the Borrowers to pay to the Lender when due
any and all amounts payable by the Borrowers to the Lender under the terms of
this Note; or
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154
Exhibit B-2 to Financing and Security Agreement
(b) The occurrence of an event of default (as defined therein) under
the terms and conditions of any of the other Financing Documents.
9. Waivers.
The Borrowers and all endorsers, guarantors, and other parties who may now
or in the future be primarily or secondarily liable for the payment of the
indebtedness evidenced by this Note hereby severally waive presentment, protest
and demand, notice of protest, notice of demand and of dishonor and non-payment
of this Note and expressly agree that this Note or any payment hereunder may be
extended from time to time without in any way affecting the liability of the
Borrowers, guarantors and endorsers.
10. Notices.
Any notice, request, or demand to or upon the Borrowers or the Lender shall
be deemed to have been properly given or made when delivered in accordance with
Section 9.1 of the Financing Agreement.
11. Partial Invalidity.
In the event any provision of this Note (or any part of any provision) is
held by a court of competent jurisdiction to be invalid, illegal, or
unenforceable in any respect, such invalidity, illegality, or unenforceability
shall not affect any other provision (or remaining part of the affected
provision) of this Note; but this Note shall be construed as if such invalid,
illegal, or unenforceable provision (or part thereof) had not been contained in
this Note, but only to the extent it is invalid, illegal, or unenforceable,
12. Captions.
The captions herein set forth are for convenience only and shall not be
deemed to define, limit, or describe the scope or intent of this Note.
13. Applicable Law.
The Borrowers acknowledge and agree that this Note shall be deemed
delivered in and shall be governed by the laws of the State of Maryland (even
though for the convenience and at the request of the Borrowers, this Note may be
executed elsewhere), all as if this Note had been executed, delivered,
administered and performed solely within the State of Maryland.
14. Consent to Jurisdiction.
Each Borrower irrevocably submits to the jurisdiction of any state or
federal court sitting in the State of Maryland over any suit, action, or
proceeding arising out of or relating to this Note or any of the other Financing
Documents. Each Borrower irrevocably waives, to the fullest extent permitted by
law, any objection that the respective Borrower may now or hereafter have to the
laying of venue of any such suit, action, or proceeding brought in any such
court and any claim that any such suit, action, or proceeding brought in any
such court has been brought in an inconvenient forum. Final judgment in any such
suit, action, or proceeding brought in any such
-3-
155
Exhibit B-2 to Financing and Security Agreement
court shall be conclusive and binding upon the respective Borrower and may be
enforced in any court in which such Borrower is subject to jurisdiction by a
suit upon such judgment, provided that service of process is effected upon such
Borrower as provided in this Note or as otherwise permitted by applicable law.
15. Service of Process.
Each Borrower hereby irrevocably designates and appoints CT Corporation
System, 000 Xxxx Xxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxx, 00000, as the respective
Borrower's authorized agent to receive on such Borrower's behalf service of any
and all process that may be served in any suit, action, or proceeding instituted
in connection with this Note in any state or federal court sitting in the State
of Maryland. If such agent shall cease so to act, each Borrower shall
irrevocably designate and appoint without delay another such agent in the State
of Maryland satisfactory to the Lender and shall promptly deliver to the Lender
evidence in writing of such agent's acceptance of such appointment and its
agreement that such appointment shall be irrevocable.
The Borrowers hereby consent to process being served in any suit, action,
or proceeding instituted in connection with this Note by (a) the mailing of a
copy thereof by certified mail, postage prepaid, return receipt requested, to
the Borrowers at the address for notices set forth in Section 9.1 of the
Financing Agreement and (b) serving a copy thereof upon CT Corporation System,
the agent hereinabove designated and appointed by the Borrowers as the
Borrowers' agent for service of process. The Borrowers irrevocably agree that
such service shall be deemed in every respect effective service of process upon
the Borrowers in any such suit, action or proceeding, and shall, to the fullest
extent permitted by law, be taken and held to be valid personal service upon the
Borrowers. Nothing in this Section shall affect the right of the Lender to serve
process in any manner otherwise permitted by law or limit the right of the
Lender otherwise to bring proceedings against any Borrower in the courts of any
jurisdiction or jurisdictions.
IN WITNESS WHEREOF, each of the Borrowers has caused this Note to be
executed under seal by its authorized officer as of the date first written
above.
WITNESS OR ATTEST: WALBRO CORPORATION
WALBRO AUTOMOTIVE CORPORATION
WALBRO ENGINE MANAGEMENT CORPORATION
XXXXXXXXX ENGINEERED PRODUCTS, INC.
XXXXXX MANUFACTURING COMPANY
_________________________ By:______________________________(Seal)
Xxxxxxx X. Xxxxx
Treasurer and Chief Financial Officer
for each of the foregoing
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156
Exhibit B-3 to Financing And Security Agreement
CAPITAL EXPENDITURE LINE INSTALLMENT PAYMENT SCHEDULE
THIS CAPITAL EXPENDITURE LINE INSTALLMENT PAYMENT SCHEDULE is furnished as
of ___________, ___________, by WALBRO CORPORATION, a corporation organized
under the laws of the State of Delaware (the "Parent"), to NATIONSBANK, N.A., a
national banking association (the "Administrative Agent"), pursuant to Section
2.4.4 of the Financing and Security Agreement dated May 29, 1998 (as amended,
modified, restated, substituted, extended and renewed at any time and from time
to time, the "Financing Agreement"), by and among the Parent, the parties
identified as the "Borrowers" in the Financing Agreement, the Administrative
Agent, and the parties identified as the "Lenders" and "Agents" in the
Financing Agreement.
I, ___________, hereby certify that I am the _______________ of the Parent
and am a Responsible Officer (as that term is defined in the Financing
Agreement) authorized to certify to the Lender on behalf of the Borrowers as
follows:
1. This Schedule is given to induce the Lenders to make an advance to
________________ in the amount of $______________ under the Capital Expenditure
Line (as that term is defined in the Financing Agreement).
2. Immediately after the advance described in paragraph 1, the aggregate
outstanding principal balance of the Capital Expenditure Line shall be
$________________.
3. Installment payments of principal shall be due and payable on the
advance described in paragraph 1 in the amount of $______________ quarterly,
commencing ______________, ____________ and on the first day of each August,
November, February, and May after the date of such advance.
4. The aggregate of all installment payments of principal due and payable
after the advance described in paragraph 1 on all Capital Expenditure Line
advances shall be $__________ quarterly commencing _____________, _________
and on the first day of each August, November, February, and May after the date
of such advance.
IN WITNESS WHEREOF, the Parent has executed and delivered this Capital
Expenditure Line Payment Schedule on behalf of the Borrowers under seal as of
the day and year first written above.
WITNESS: WALBRO CORPORATION
__________________________ By:______________________________(Seal)
Name:
Title:
157
Exhibit C to Financing and Security Agreement
NATIONSBANK BUSINESS CREDIT
WIRE TRANSFER PROCEDURES
The transfer of funds by means of wire may be made by NationsBank (lender)
at the request of its customer (borrower). Such wire transfers are categorized
by lender as either repetitive or non-repetitive.
Repetitive:
Repetitive wire transfers may vary in amount, but are consistent in terms
of the payee, the location to which funds are wired, the bank name, account
number and the routing transit number.
Either borrower or lender may initiate a repetitive wire transfer. The
borrower may identify the repetitive nature of transfers and request they be
established as such via the "Repetitive Wire Transfer Authorization Form" (copy
attached). Lender, after observing numerous transfers to the same recipient and
destination, may initiate the repetitive process by faxing or mailing the
"Repetitive Wire Authorization Form" to the borrower for completion and return.
Although a first request for a repetitive wire transfer may be honored from
a faxed copy of the "Repetitive Wire Transfer Authorization Form", a copy of the
form containing an original signature must be received from the borrower. All
transfer authorization forms must be approved by and contain the signature of a
person authorized by the borrower to advance funds from borrower's line of
credit with the lender.
After receipt of the original "Repetitive Wire Transfer Authorization Form"
by the lender, subsequent wire transfers to the recipient named thereon may be
initiated by telephone request, provided the requesting party is identified by
the lender as a person authorized by borrower to advance funds from the
borrower's line of credit with lender.
Non-Repetitive:
Non-Repetitive wire transfers are directed to recipients on a one-time or
infrequent basis or are directed to varied destinations. Non-repetitive wire
transfers require that written notification be provided to lender by borrower,
showing payee, location, account number, routing transit number and name and
location of bank into which funds are to be transferred. Such written
notification may be provided by means of a "Non-Repetitive Wire Transfer
Authorization Form" (copy attached).
Required information may be faxed to lender in order to expedite the
transfer; however, a copy of the transfer authorization form with an original
signature(s) must be received by lender from borrower. The transfer
authorization form must be approved by and contain the signature of a person
authorized by the borrower to advance funds from borrower's line of credit with
the lender.
For any non-repetitive wire transfer, Lender may, at its discretion,
perform a telephone verification with an authorized representative (the original
signer or another authorized representative) of borrower prior to initiating the
transfer.
158
NATIONSBANK BUSINESS CREDIT
REPETITIVE WIRE TRANSFER AUTHORIZATION
CUSTOMER INFORMATION
Customer Name:_________________________________ Date:___________________________
Name of Person Authorizing Transfer for Customer:_______________________________
Note: Must be Person Authorized
to Advance Funds
Signature of Person Authorizing Transfer for Customer:__________________________
PAYEE
Name of Recipient of Funds:_____________________________________________________
Location:_______________________________________________________________________
Account Number into which Funds are to be Transferred:__________________________
DESTINATION OF FUNDS
Name and Location of Bank Receiving Funds:
Bank Name:______________________________________________________________________
Routing Information (ABA Number):______________________
Bank Location:
City:___________________________________________________________________________
State:__________________________________________________________________________
(for international Wires) Country:______________________________________________
Special Instructions:___________________________________________________________
________________________________________________________________________________
BANK USE ONLY
Business Credit Department
Business Credit Authorization:__________________________________________________
Print name of person at Bank approved to
authorize Wire Transfers
Business Credit Authorization:__________________________________________________
Signature of person at Bank approved to authorize
Wire Transfers
WIRE TRANSFER DEPARTMENT
F.D. Number Assigned:___________________________________________________________
Account Number to Debit:________________________________________________________
159
NATIONSBANK BUSINESS CREDIT
NON-REPETITIVE WIRE TRANSFER AUTHORIZATION
CUSTOMER INFORMATION
Customer Name:_________________________________ Date:___________________________
Name of Person Authorizing Transfer for Customer:_______________________________
Note: Must be Person Authorized
to Advance Funds
Signature of Person Authorizing Transfer for Customer:__________________________
PAYEE
Name of Recipient of Funds:_____________________________________________________
Location:_______________________________________________________________________
Account Number into which Funds are to be Transferred:__________________________
DESTINATION OF FUNDS
Name and Location of Bank Receiving Funds:
Bank Name:______________________________________________________________________
Routing Information (ABA Number):______________________
Bank Location:
City:___________________________________________________________________________
State:__________________________________________________________________________
(for international Wires) Country:______________________________________________
Special Instructions:___________________________________________________________
________________________________________________________________________________
160
Exhibit D to Financing And Security Agreement
COMPLIANCE CERTIFICATE
THIS CERTIFICATE is made as of ________________, ________ by
________________, a _______________ organized under the laws of the State of
_________________ (the "Borrower'), NATIONSBANK, N.A., a national banking
association (the "Administrative Agent'), pursuant to Section 2.4.4 of the
Financing and Security Agreement dated May 29, 1998 (as amended, modified,
restated, substituted, extended and renewed at any time and from time to time,
the "Financing Agreement"), by and among the Parent, the parties identified as
the "Borrowers" in the Financing Agreement, the. Administrative Agent, and the
parties identified as the "Lenders" and "Agents" in the Financing Agreement.
I, ________________, hereby certify that I am the _____________ of the
Borrower and am a Responsible Officer (as that is defined in the Financing
Agreement) authorized to certify to the Lender on behalf the Borrower as
follows:
1. This Certificate is given to induce the Lender to make advances to the
Borrower under the Financing Agreement.
2. This Certificate accompanies ______________ the financial statements
for the period ended _____________ (the "Current Financials') which the
Borrower is furnishing to the Lender pursuant to Section 6.1.1(_) of the
Financing Agreement. 'Me Current Financials have been prepared in accordance
with GAAP (as that term is defined in the Financing Agreement).
3. As required by Section 6.1.1(_) of the Financing Agreement, I have set
forth on Schedule 1 to this Certificate a detailed computation, to the extent
applicable, of each financial covenant in the Financing Agreement and a cash
flow projection report.
4. No change has occurred to the information contained in the Collateral
Disclosure List except as set forth on Schedule 2 to this Certificate. By way of
example and not limitation, the Collateral Disclosure List, together with
Schedule 2, contains a listing of all of the Patents, Trademarks, Copyrights of
the Domestic Borrowers (as those terms are defined in the Financing Agreement),
all locations (owned, leased, warehouses or otherwise) where any Collateral (as
that term is defined in the Financing Agreement) is located, and all
Subsidiaries (as that term is defined in the Financing Agreement).
5. As of the date hereof, there exists no Default or Event of Default, as
defined in the Financing Agreement.
6. On the date hereof, the representations and warranties contained in
Article 4 of the Financing Agreement are true with the same effect as though
such representations and warranties had been made on the date hereof.
WITNESS my signature this _____ day of _________, ________.
___________________________
Name:
Title:
