1
Exhibit 10.8
CREDIT AGREEMENT
among
Stoneridge, Inc.
and
PNC Bank, National Association,
Star Bank, National Association
and
National City Bank
and
National City Bank, Agent
September 15, 1997
---
$125,000,000 revolving commitment
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TABLE OF CONTENTS
PAGE
----
1A. CROSS-REFERENCE..................................................1
1B. SUMMARY..........................................................1
2A. REVOLVING COMMITMENT.............................................1
2A.01 AMOUNT.........................................................1
2A.02 TERM...........................................................1
2A.03 OPTIONAL REDUCTIONS............................................1
2A.04 COMMITMENT FEE.................................................2
2A.05 EXTENSION OF REVOLVING COMMITMENTS.............................2
2B. REVOLVING LOANS..................................................2
2B.01 REVOLVING NOTE.................................................2
2B.02 CREDIT REQUESTS................................................3
2B.03 CONDITION: NO DEFAULT.........................................3
2B.04 CONDITION: PURPOSE............................................4
2B.05 INTEREST.......................................................4
2B.06 DISBURSEMENT...................................................4
2B.07 PREPAYMENT.....................................................4
2C. INTEREST AND OTHER LOAN PROVISIONS...............................4
2C.01 LOAN MIX.......................................................4
2C.02 AMOUNT.........................................................4
2C.03 CONTRACT PERIODS...............................................5
2C.04 MATURITIES.....................................................5
2C.05 ROLLOVER.......................................................5
2C.06 INTEREST: RR LOANS............................................5
2C.07 INTEREST: LIBOR LOANS.........................................6
2C.08 PREPAYMENTS....................................................6
2C.09 LIBOR LOANS UNAVAILABILITY.....................................7
2C.10 LIBOR LOANS ILLEGALITY.........................................7
2D. LETTERS OF CREDIT................................................7
2D.01 MAXIMUM........................................................7
2D.03 TERM...........................................................8
2D.04 FORMS..........................................................8
2D.05 FEES AND COMMISSIONS...........................................8
2D.06 REIMBURSEMENT..................................................8
3A. INFORMATION......................................................9
3A.01 FINANCIAL STATEMENTS...........................................9
3A.02 NOTICE........................................................10
3B. GENERAL FINANCIAL STANDARDS.....................................10
3B.01 NET WORTH.....................................................10
3B.02 DEBT TO CAPITALIZATION........................................11
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3B.03 FIXED CHARGE COVERAGE RATIO...................................11
3B.04 FUNDED DEBT/EBITDA............................................11
3C. AFFIRMATIVE COVENANTS...........................................11
3C.01 TAXES.........................................................11
3C.02 FINANCIAL RECORDS.............................................12
3C.03 VISITATION....................................................12
3C.04 INSURANCE.....................................................12
3C.05 CORPORATE EXISTENCE...........................................12
3C.06 COMPLIANCE WITH LAW...........................................12
3C.07 PROPERTIES....................................................13
3D. NEGATIVE COVENANTS..............................................13
3D.01 EQUITY TRANSACTIONS...........................................13
3D.02 CREDIT EXTENSIONS.............................................14
3D.03 BORROWINGS....................................................15
3D.04 LIENS, LEASES.................................................15
3D.05 FIXED ASSETS..................................................16
4A. CLOSING.........................................................16
4A.01 SUBJECT NOTES.................................................16
4A.02 RESOLUTIONS/INCUMBENCY........................................16
4A.03 LEGAL OPINION.................................................17
4A.04 FINANCIAL STATEMENTS..........................................17
4A.05 UPFRONT FEE...................................................17
4A.06 DOCUMENTATION FEE.............................................17
4B. WARRANTIES......................................................17
4B.01 EXISTENCE.....................................................17
4B.02 GOVERNMENTAL RESTRICTIONS.....................................17
4B.03 CORPORATE AUTHORITY...........................................17
4B.04 LITIGATION....................................................18
4B.05 TAXES.........................................................18
4B.06 TITLE.........................................................18
4B.07 LAWFUL OPERATIONS.............................................18
4B.08 INSURANCE.....................................................18
4B.09 FINANCIAL STATEMENTS..........................................19
4B.10 DEFAULTS.......................................................19
5A. EVENTS OF DEFAULT...............................................19
5A.01 PAYMENTS......................................................19
5A.02 WARRANTIES....................................................19
5A.03 COVENANTS WITHOUT GRACE.......................................19
5A.04 COVENANTS WITH GRACE..........................................19
5A.05 CROSS-DEFAULT.................................................20
5A.06 BORROWER'S SOLVENCY...........................................20
5B. EFFECTS OF DEFAULT..............................................20
5B.01 OPTIONAL DEFAULTS.............................................20
5B.02 AUTOMATIC DEFAULTS............................................20
5B.03 OFFSETS.......................................................21
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5B.04 EQUALIZATION..................................................21
6A. INDEMNITY: STAMP TAXES.........................................21
6B. INDEMNITY TAKEOVERS.............................................21
6C. INDEMNITY: CAPITAL REQUIREMENTS................................21
6D. INDEMNITY: COLLECTION COSTS....................................22
6E. INDEMNITY: FUNDING COSTS........................................22
6F. CERTIFICATE FOR INDEMNIFICATION.................................22
7A. BANKS' PURPOSE..................................................22
7B. AGENT...........................................................23
7B.01 NATURE OF APPOINTMENT.........................................23
7B.02 NATIONAL CITY AS A BANK; OTHER TRANSACTIONS...................23
7B.03 INSTRUCTION FROM BANKS........................................23
7B.04 BANKS' DILIGENCE..............................................23
7B.05 NO IMPLIED REPRESENTATIONS....................................24
7B.06 SUB-AGENTS....................................................24
7B.07 NATIONAL CITY AGENT'S DILIGENCE...............................24
7B.08 NOTICE OF DEFAULT.............................................24
7B.09 AGENT'S LIABILITY.............................................24
7B.10 COMPENSATION..................................................24
7B.11 DISBURSEMENTS..................................................25
7B.12 AGENT'S INDEMNITY.............................................25
7B.13 RESIGNATION...................................................25
8. INTERPRETATION...................................................25
8.01 WAIVERS........................................................25
8.02 CUMULATIVE PROVISIONS..........................................26
8.03 BINDING EFFECT.................................................26
8.04 SURVIVAL OF PROVISIONS.........................................26
8.05 IMMEDIATE U.S. FUNDS...........................................26
8.06 CAPTIONS.......................................................26
8.07 SUBSECTIONS....................................................26
8.08 ILLEGALITY.....................................................26
8.09 OHIO LAW.......................................................27
8.10 INTEREST/FEE COMPUTATIONS......................................27
8.11 NOTICE..........................................................27
8.12 ACCOUNTING TERMS...............................................27
8.13 ENTIRE AGREEMENT...............................................27
8.14 WAIVER OF JURY TRIAL...........................................27
8.15 ASSIGNMENT.....................................................27
9. AMENDMENTS AND WAIVERS...........................................28
10. DEFINITIONS.....................................................28
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ACCOUNT OFFICER......................................................29
ACCUMULATED FUNDING DEFICIENCY.......................................29
ADVANTAGE............................................................29
AFFILIATE............................................................29
AGREEMENT............................................................29
BANK.................................................................29
BANKING DAY..........................................................29
BORROWER.............................................................29
CONTRACT PERIOD......................................................29
CREDIT EXPOSURE......................................................29
CREDIT REQUEST.......................................................29
DEBT.................................................................29
DEFAULT UNDER ERISA..................................................30
DEFAULT UNDER THIS AGREEMENT.........................................30
DISTRIBUTION.........................................................30
ENVIRONMENTAL LAW....................................................30
ERISA................................................................30
ERISA REGULATOR......................................................30
EVENT OF DEFAULT.....................................................30
EXPIRATION DATE......................................................31
FEDERAL FUNDS RATE...................................................31
FUNDED INDEBTEDNESS..................................................31
GAAP.................................................................31
GUARANTOR............................................................31
INSOLVENCY ACTION....................................................31
LIBOR PRE-MARGIN RATE................................................32
LIBOR LOAN...........................................................32
MAJORITY OF THE BANKS................................................32
MATERIAL.............................................................32
MOST RECENT 4A.04 FINANCIAL STATEMENTS...............................32
NATIONAL CITY........................................................32
NET INCOME...........................................................32
NET WORTH............................................................32
PENSION PLAN.........................................................32
PRIME RATE...........................................................32
REFERENCE RATE.......................................................33
RELATED WRITING......................................................33
REPORTABLE EVENT.....................................................33
REVOLVING COMMITMENT.................................................33
REVOLVING LOAN.......................................................33
REVOLVING NOTE.......................................................33
RR LOAN..............................................................33
SUBJECT INDEBTEDNESS.................................................33
SUBJECT LC...........................................................33
SUBJECT LOAN.........................................................33
SUBJECT NOTE.........................................................33
SUBSIDIARY...........................................................33
SUPPLEMENTAL SCHEDULE................................................34
TOTAL LIABILITIES....................................................34
TRANSPORTATION BUSINESS..............................................34
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EXHIBIT A: Supplemental Schedule (4B.)
EXHIBIT B: Revolving Note (2B.01; 4A.01)
EXHIBIT C: Extension Agreement (2B.05)
EXHIBIT D List Of Mortgage Properties (4A.06)
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CREDIT AGREEMENT
Agreement (this AGREEMENT) made as of September 15, 1997 by and among
STONERIDGE, INC. ("BORROWER"), NATIONAL CITY BANK, PNC BANK, NATIONAL
ASSOCIATION and STAR BANK, NATIONAL ASSOCIATION (the "BANKS") and NATIONAL CITY
BANK as agent for the Banks ("AGENT"):
1A. CROSS-REFERENCE -- Certain terms are defined in section 10.
1B. SUMMARY -- This Agreement
(a) sets forth the terms and conditions upon which Borrower may, so
long as the revolving commitment remains in effect, obtain the
revolving loans described in sections 2A and 2B and subject LCs
described in section 2D, PROVIDED that the aggregate unpaid principal
balance of the revolving loans plus the face amount of subject LCs at
any one time outstanding shall never exceed the amount of the revolving
commitments then in effect and
(b) sets forth the covenants and warranties made by the parties to
induce each other to enter into this Agreement and other material
provisions.
2A. REVOLVING COMMITMENT -- The basic terms of the revolving commitments and the
compensation therefor are as follows:
2A.01 AMOUNT -- The aggregate amount of the revolving commitments shall
be One Hundred Twenty-Five Million and No/100ths Dollars
($125,000,000.00), but that amount may be reduced from time to time
pursuant to subsection 2A.03 and the revolving commitment may be
terminated pursuant to section 5B. The amount of each bank's revolving
commitment (subject to such reduction or termination), and the
proportion (expressed as a percentage) that it bears to all of the
revolving commitments is set forth opposite the bank's name below
to-wit:
$ 65,000,000 52% National City Bank
$ 45,000,000 36% PNC Bank, National Association
$ 15,000,000 12% Star Bank, National Association
------------- ---
$125,000,000 100%
2A.02 TERM -- The revolving commitments shall become effective as of
the date of this Agreement and shall remain in effect on a revolving
basis until June 30, 2002 (the "expiration date") EXCEPT that a later
expiration date may be established from time to time pursuant to
subsection 2A.05 and EXCEPT that the revolving commitments shall end in
any event upon any earlier reduction thereof to zero pursuant to
subsection 2A.03 or any earlier termination pursuant to section 5B.
2A.03 OPTIONAL REDUCTIONS -- Borrower shall have the right, at all
times and without the payment of any premium, to permanently reduce the
amount of the revolving
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commitments by giving Agent one banking day's prior written notice of
the amount of each such reduction and the effective date thereof.
Concurrently with each reduction Borrower shall prepay such part
(together with the interest accrued thereon), if any, of the principal
of the revolving loans then outstanding as may be in excess of the
amount of the revolving commitments as so reduced.
2A.04 COMMITMENT FEE -- Each Bank shall, so long as its revolving
commitment remains in effect, earn a commitment fee
(a) based on the average daily difference between the amount
of that bank's revolving commitment from time to time in
effect and the aggregate unpaid principal balance of that
Bank's revolving loans then outstanding,
(b) computed at the rate shown in the following schedule
so long as the revolving commitment remains in effect
------------------------------------------------------------ ------------------------
Total Senior Commitment
Debt/EBITDA (quarterly test)* Fee (basis points)
------------------------------------------------------------ ------------------------
Level One greater than 3x 25
---------------- ------------------------------------------ ------------------------
Level Two greater than 2x less than or equal to 3x 20
---------------- ------------------------------------------ ------------------------
Level Three greater than 1.5x less than or equal to 2x 15
---------------- ------------------------------------------ ------------------------
Level Four greater than 1x less than or equal to 1.5x 12.5
---------------- ------------------------------------------ ------------------------
Level Five less than or equal to 1x 10
---------------- ------------------------------------------ ------------------------
*Calculated on a rolling four quarter basis
(c) and payable in arrears on September 30, 1997 and
quarter-annually thereafter and at the end of the revolving
commitments.
2A.05 EXTENSION OF REVOLVING COMMITMENTS -- Whenever Borrower furnishes
its audited financial statements to the Banks pursuant to clause (b) of
subsection 3A.01, commencing with the year ending December 31, 1997,
Borrower may request that the revolving commitments be extended one
year to the June 30 next following the expiration date then in effect.
The Banks agree to give consideration to each such request; but in no
event shall the Banks be committed to extend the revolving commitments,
nor shall any Bank's subject commitment be so extended, unless and
until both Borrower and the Banks shall have executed and delivered an
extension agreement substantially the form of Exhibit C with the blanks
appropriately filled.
2B. REVOLVING LOANS -- The Banks agree that so long as the revolving commitments
remain in effect each Bank will, subject to the conditions of this Agreement,
grant Borrower such revolving loans as Borrower may from time to time request.
2B.01 REVOLVING NOTE -- Each Bank's revolving loans shall be evidenced
at all times by a revolving note executed and delivered by Borrower,
payable to the order of that Bank in a principal amount equal to the
dollar amount of that Bank's revolving
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commitment as in effect at the execution and delivery of the revolving
note and being in the form and substance of Exhibit B with the blanks
appropriately filled.
(a) Whenever Borrower obtains a series of revolving loans,
each Bank shall endorse an appropriate entry on the revolving
note or make an appropriate entry in a loan account in that
Bank's books and records. Each entry shall be prima facie
evidence of the data entered; but such entries shall not be a
condition to Borrower's obligation to pay.
(b) No holder of any revolving note shall transfer a revolving
note, or seek a judgment or file a proof of claim based on a
revolving note, without in each case first endorsing the
revolving note to reflect the true amount owing thereon.
2B.02 CREDIT REQUESTS -- Whenever Borrower desires to obtain a series
of subject loans, Borrower shall give Agent an appropriate notice (a
"credit request") either in writing in the form of Exhibit D (or in
other form and detail satisfactory to Agent) with the blanks
appropriately filled or by telephone. The credit request shall be
irrevocable, shall be given to Agent not later than 1:00 p.m. Cleveland
time
(a) on the banking day next preceding the date on which RR
loans (other than any obtained at the execution and delivery
of this Agreement) are to be obtained, and
(b) three (3) banking days prior to the date any LIBOR loans
are to be obtained,
and shall either be made in writing or immediately confirmed in
writing. In the case of any oral credit request, Agent shall be
entitled to rely thereon and Borrower shall assume the risk of
misunderstanding. Agent shall give each bank prompt notice of each
credit request. A credit request received after 12:00 noon Cleveland
time may be deemed by Agent to have been received on the next banking
day.
2B.03 CONDITION: NO DEFAULT -- Borrower shall not be entitled to obtain
any revolving loan (other than any of the proceeds of which are applied
solely to reimburse the Banks for any draft or other item drawn and
paid in respect of a subject LC or to have any subject LC issued) if
(a) any default under this Agreement shall then exist or would
thereupon begin to exist or
(b) the aggregate credit exposure of the Banks would exceed
the aggregate of the subject commitments as then in effect or
(c) any representation or warranty made in subsections 4B.01
through 4B.08 (both inclusive) shall have ceased to be true
and complete in any material respect except for such changes,
if any, as shall have been fully disclosed in the applicable
credit request and as may be waived by the Banks in the
reasonable exercise of their discretion, or
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(d) there shall have occurred any material adverse change in
Borrower's financial condition, properties or business since
the date of Borrower's most recent 4A.04 financial statements.
Each credit request, both when made and when honored, shall of itself
constitute a continuing representation and warranty by Borrower that
Borrower is entitled to obtain, and the Banks are obligated to make,
the requested revolving loan.
2B.04 CONDITION: PURPOSE -- Borrower shall not use the proceeds of any
revolving loan for the purpose of financing the acquisition of any
corporation or other business entity if the acquisition is publicly
opposed by the latter's board of directors and any Bank deems that its
participation in the financing would involve it in a conflict of
interest and communicates such opinion to Borrower within thirty (30)
days after Borrower has advised the Banks of such opposition.
2B.05 INTEREST -- The unpaid principal balances of and overdue interest
on the revolving loans shall bear interest payable in arrears on the
first day of each month and at maturity and computed in accordance with
subsection 8.10 and as provided in section 2C.
2B.06 DISBURSEMENT -- Each Bank shall disburse the proceeds of each
subject loan made by it as follows: (A) in immediately available funds
(B) from any office selected by that Bank (C) to Borrower's general
checking account with Agent in the absence of written instructions from
Borrower to the contrary (D) not later than 1:30 P.M. Cleveland time on
the banking day specified in the credit request.
2B.07 PREPAYMENT -- Borrower shall have the right at all times to
prepay the revolving loans in whole or in part and without penalty or
premium, but subject to the provisions of subsection 2C.08(b).
Concurrently with any prepayment of the entire unpaid principal balance
of the revolving loans, Borrower shall prepay the unpaid interest
accrued thereon.
2C. INTEREST AND OTHER LOAN PROVISIONS --
2C.01 LOAN MIX -- The subject loans at any one time outstanding may
consist of RR loans or LIBOR loans or any combination thereof as
Borrower may from time to time duly elect.
2C.02 AMOUNT -- No subject loan shall be made if, after giving effect
thereto, the aggregate unpaid principal balance of the revolving loans
and outstanding subject LCs would exceed the amount of the revolving
commitments then in effect. Each LIBOR loan shall be in the principal
sum of five hundred thousand dollars ($500,000) or any greater amount
(subject to the aforesaid limitations) that is a multiple of five
hundred thousand dollars ($500,000).
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2C.03 CONTRACT PERIODS -- Each LIBOR loan shall have applicable thereto
a contract period to be duly elected by Borrower in the credit request
therefor. Each contract period shall begin on the date the loan
proceeds are to be disbursed and shall end on such date, not later than
the expiration date, as Borrower may select subject, however, to the
following:
(a) The contract period for each LIBOR loan shall end one
month or two or three or six months after the date of
borrowing; PROVIDED, that
(1) if any such contract period otherwise would end
on a day that is not a banking day, it shall end
instead on the next following banking day if both
days are in the same calendar month or, if not in the
same month, shall end instead on the next preceding
banking day, and
(2) if the contract period commences on a day for
which there is no numerical equivalent in the
calendar month in which the contract period is to
end, it shall end on the last banking day of that
calendar month.
(b) Borrower shall never elect a contract period for any LIBOR
loan the term of which extends beyond the expiration date.
2C.04 MATURITIES -- The stated maturity of each RR loan shall be the
expiration date. The stated maturity of each LIBOR loan shall be the
last day of the contract period applicable thereto. In no event,
however, shall the stated maturity of any subject loan be later than
the expiration date. Prior to the expiration date, Borrower may pay the
principal of and interest on matured LIBOR loans with the proceeds of
new LIBOR loans or with the proceeds of RR loans. The principal of and
interest on LIBOR loans maturing by reason of subsection 2C.10 may be
paid with the proceeds of a RR loan.
2C.05 ROLLOVER -- If at any time prior to the expiration date any LIBOR
loan shall not be paid in full at the stated maturity thereof, and if
Borrower shall have failed to duly give Agent a timely credit request
in respect thereof, Borrower shall be deemed to have duly given Agent a
timely credit request to obtain (and at that maturity the Banks shall
make) a series of RR loans in an aggregate principal amount equal to
the unpaid principal of the LIBOR loan then due, the proceeds of which
RR loans shall be applied to the payment in full of the LIBOR loan then
due; PROVIDED, that no such RR loans shall of themselves constitute a
waiver of any then-existing default under this Agreement.
2C.06 INTEREST: RR LOANS -- The principal of and overdue interest on
the RR loans shall bear interest payable in arrears on the first day of
each January, April, July and October and at maturity and computed (in
accordance with subsection 8.10) at a fluctuating rate equal to the
reference rate from time to time in effect plus the applicable RR
MARGIN (if any) with each change in the reference rate automatically
and immediately changing the rate thereafter applicable to the RR
loans; PROVIDED, that in no event shall the rate applicable to the RR
loans after the maturity thereof be less than the rate
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applicable thereto immediately after maturity. RR MARGIN as
used in this subsection means a rate equal to
Zero percent (0%) per annum prior to the expiration date and
after maturity (whether occurring by lapse of time or by
acceleration) the RR margin shall be two percent (2%) per
annum.
2C.07 INTEREST: LIBOR LOANS -- The principal of and overdue interest on
each LIBOR loan shall bear interest computed (in accordance with
subsection 8.10) and payable as follows:
(a) Prior to maturity each LIBOR loan which is a revolving
loan shall bear interest at a rate equal to
the LIBOR pre-margin rate in effect at the start of the
applicable contract period plus
the applicable LIBOR MARGIN, namely, the appropriate
margin from the following table:
---------------------------------------------------------------------------------------
Total Senior LIBOR
Debt/EBITDA (quarterly test)* Margin
---------------------------------------------------------------------------------------
Level One greater than 3x 200 basis points
---------------------- ------------------------------------------ ---------------------
Level Two greater than 2x less than or equal to 3x 150 basis points
---------------------- ------------------------------------------ ---------------------
Level Three greater than 1.5x less than or equal to 2x 125 basis points
---------------------- ------------------------------------------ ---------------------
Level Four greater than 1x less than or equal to 1.5x 100 basis points
---------------------- ------------------------------------------ ---------------------
Level Five less than or equal to 1x 75 basis points
---------------------- ------------------------------------------ ---------------------
*Calculated on a rolling four quarter basis
(b) After maturity (whether occurring by lapse of time or by
acceleration), each LIBOR loan shall bear interest computed
and payable in the same manner as in the case of RR loans
EXCEPT that in no event shall any LIBOR loan bear interest
after maturity at a lesser rate than that applicable thereto
at maturity.
(c) Interest on each LIBOR loan shall be payable in arrears on
the last day of the contract period applicable thereto and at
maturity and, in the case of any contract period having a
longer term than three (3) months, every three (3) months
after the first day of the contract period.
2C.08 PREPAYMENTS -- Borrower may from time to time prepay the
principal of the RR loans in whole or in part and may from time to time
prepay the principal of any given LIBOR loan in whole or in part,
subject to the following:
(a) Each prepayment of a given LIBOR loan shall be in an
amount equal to five hundred thousand dollars ($500,000) or
any multiple thereof or an amount equal to the then aggregate
unpaid principal balance thereof.
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(b) Each prepayment of the RR loans may be made without
penalty or premium. Any prepayment of any LIBOR loans
(regardless of the reason for the prepayment) shall be subject
to the payment of any indemnity required by section 6E.
(c) No prepayment shall of itself reduce the revolving
commitment.
(d) Concurrently with each prepayment, Borrower shall prepay
the interest accrued on the prepaid principal.
2C.09 LIBOR LOANS: UNAVAILABILITY -- If at any time
(a) a Bank shall determine that dollar deposits of the
relevant amount for the relevant contract period are not
available in the London interbank eurodollar market for the
purpose of funding the LIBOR loan in question, or
(b) a Bank shall determine that circumstances affecting that
market make it impracticable for such Bank to ascertain the
rate or rates applicable to such LIBOR loans,
then and in each such case Agent shall, by written notice to Borrower,
suspend Borrower's right thereafter to obtain LIBOR loans of the kind
in question, which suspension shall remain in effect until such time,
if any, as Agent may give written notice to Borrower that the condition
giving rise to the suspension no longer prevails.
2C.10 LIBOR LOANS: ILLEGALITY -- If any Bank shall give Agent written
notice that it is, or governmental authority has asserted that it is
unlawful for that Bank to fund, make or maintain any LIBOR loans,
(a) Agent shall give Borrower and each of the other Banks
prompt written notice thereof and
(b) Borrower shall promptly pay in full the principal of and
interest on the LIBOR loan in question and make the
indemnification, if any, required by section 6E.
2D. LETTERS OF CREDIT -- NATIONAL CITY agrees that so long as the subject
commitments remain in effect NATIONAL CITY will issue such letters of credit
(each, a subject LC) for Borrower's account as Borrower may from time to time
request subject, however, to the conditions of this Agreement.
2D.01 MAXIMUM -- NATIONAL CITY shall not issue any subject LC if, after
giving effect thereto,
(a) the aggregate undrawn balance of all then outstanding
subject LCs would exceed five million dollars ($5,000,000) or
(b) the aggregate credit exposure of the Banks would exceed
the aggregate of the subject commitments as then in effect.
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2D.03 TERM -- No subject LC which is a commercial letter of credit
shall permit any draft to be drawn thereunder on a date (the "last draw
date") that is more than one hundred eighty (180) days after the date
of its issue, nor shall any subject LC permit the last draw date to be
later than the seventh (7th) banking day next preceding the expiration
date.
2D.04 FORMS -- Each subject LC shall
(a) be issued in such form as NATIONAL CITY may reasonably
require,
(b) be either a commercial letter of credit used solely for
the importation of goods in the ordinary course of Borrower's
business or a standby letter of credit and
(c) be denominated in United States dollars.
2D.05 FEES AND COMMISSIONS -- Borrower shall pay to NATIONAL CITY in
respect of each subject LC the issuance, amendment, negotiation, draw,
acceptance, telex and similar fees as are generally charged under its
standard fee schedule as in effect at the time in question, and
Borrower shall reimburse NATIONAL CITY for its out-of-pocket expenses,
if any, in respect of the foregoing. In addition, Borrower shall pay to
the Banks a commission based on the face amount of the subject LC in
the case of a subject LC that is a "standby" letter of credit and the
amount of a draw in the case of a subject LC that is a "commercial"
letter of credit, payable at the time of issuance in the case of a
subject LC that is a standby LC and upon each payment of any draft in
the case of a subject LC that is a commercial letter of credit, and
computed in arrears at the rate of
(a) the rate shown in the following table in the case
of a subject LC that is a "standby" letter of credit and
------------------------------------------------------------------------------------
Total Senior Standby Letter of
Debt/EBITDA (quarterly test)* Credit Commission
----------------------------------------------------------------- -----------------
Level One greater than 3x 2.0%
---------------------- ------------------------------------------ -----------------
Level Two greater than 2x less than or equal to 3x 1.5%
---------------------- ------------------------------------------ -----------------
Level Three greater than 1.5x less than or equal to 2x 1.25%
---------------------- ----------------------- ------------------ -----------------
Level Four greater than 1x less than or equal to 1.5x 1.0%
---------------------- ------------------------------------------ -----------------
Level Five less than or equal to 1x .75%
---------------------- ------------------------------------------ ------------------
*Calculated on a rolling four quarter basis
(b) one half of one percent (1/2%) per annum in the case of a
subject LC that is a "commercial" letter of credit.
2D.06 REIMBURSEMENT -- Borrower agrees to reimburse NATIONAL CITY for
each draft or other item paid by Bank pursuant to or otherwise in
respect of any subject LC.
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3A. INFORMATION -- Borrower agrees that so long as the revolving commitment
remains in effect and thereafter until the subject indebtedness shall have been
paid in full, Borrower will perform and observe each of the following:
3A.01 FINANCIAL STATEMENTS -- Borrower will furnish to the Banks
(a) within forty-five (45) days after the end of each of the
first three quarter-annual periods of each of Borrower's
fiscal years, Borrower's balance sheet as at the end of the
period and its statements of cash flow, income and surplus
reconciliation for Borrower's current fiscal year to date, all
prepared (but unaudited) on a comparative basis with the prior
year, in accordance with GAAP (EXCEPT as disclosed therein)
and in form and detail satisfactory to the Banks,
(b) as soon as available (and in any event within one hundred
twenty (120) days after the end of each of Borrower's fiscal
years), a complete copy of an annual audit report (including,
without limitation, all financial statements therein and notes
thereto) of Borrower for that year which shall be
(1) prepared on a comparative basis with the prior year, in accordance
with GAAP (EXCEPT as disclosed therein) and in form and detail
satisfactory to the Banks,
(2) certified (without qualification as to GAAP) by independent public
accountants selected by Borrower and satisfactory to the Banks,
(3) accompanied by a copy of any management report, letter or similar
writing furnished to Borrower by the accountants in respect of
Borrower's systems, operations, financial condition or properties, and
(4) either (A) a written statement of the accountants that in making
the examination nec- xxxxxx for their report or opinion they obtained
no knowledge of the occurrence of any de- fault under this Agreement or
(B) if they know of any, their written disclosure of its nature and
status, PROVIDED, that the accountants shall not be liable directly or
indir- ectly to anyone for any failure to obtain knowledge of any
default under this Agreement,
(c) concurrently with the delivery of any financial statement
to a Bank pursuant to clause (a) or (b), a certificate by
Borrower's chief financial officer
(1) certifying that to the best of the officer's
knowledge and belief, (A) those financial statements
fairly present in all material respects Borrower's
financial condition and the results of its operations
in accordance with GAAP subject, in the case of
interim financial statements, to routine year-end
audit adjustments and (B) no default under this
Agreement then exists or if any does, a brief
description of the default and Borrower's intentions
in respect thereof, and
(2) setting forth calculations indicating whether or
not Borrower is in compliance with the general
financial standards of section 3B, and
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16
(d) forthwith upon a Bank's written request, such other
information in writing about Borrower's financial condition,
properties and operations and about its pension plans, if any,
as such Bank may from time to time reasonably request.
3A.02 NOTICE -- Borrower will cause its chief financial officer, or in
his absence another officer designated by Borrower, to give Agent
prompt written notice whenever any officer of Borrower
(a) reasonably believes (or receives notice from any
governmental agency alleging) that any reportable event has
occurred in respect of any pension plan or that Borrower has
become in material non-compliance with any law or governmental
order referred to in subsection 3C.06 if non-compliance
therewith would materially and adversely affect Borrower's
financial condition or its properties,
(b) receives from the Internal Revenue Service or any other
federal, state or local taxing authority any allegation of any
default by Borrower in the payment of any tax that is material
in amount or notice of any assessment in respect thereof,
(c) learns there has been brought against Borrower before any
court, administrative agency or arbitrator any litigation or
proceeding which, if successful, might have a material,
adverse effect on Borrower,
(d) reasonably believes that any representation or warranty
made in subsections 4B.01 through 4B.08 (both inclusive) shall
have ceased in any material respect to be true and complete or
that any default under this Agreement shall have occurred or
(e) reasonably believes that there has occurred or begun to
exist any other event, condition or thing that likely may have
a material, adverse effect on Borrower's financial condition,
operations or properties.
3B. GENERAL FINANCIAL STANDARDS -- Borrower agrees that so long as the subject
commitment remains in effect and thereafter until the subject indebtedness shall
have been paid in full, Borrower will perform and observe each of the following:
3B.01 NET WORTH -- Borrower will not suffer or permit the sum of its
net worth plus its subordinated indebtedness, if any, as at the end of
each fiscal quarter of Borrower to be less than the required minimum
amount in effect at the time in question. The required minimum amount
shall be ninety million dollars ($90,000,000) EXCEPT that that amount
shall be permanently increased
(a) on December 31, 1997 and on each December 31 thereafter by
an amount equal to fifty percent (50%) of Borrower's net
income, after tax, and
(b) upon each issuance or other sale by Borrower of any of its
capital stock an amount equal to the net proceeds (after costs
and expenses) thereof and, in the case of the issuance of
capital stock as payment for all or a portion of the purchase
price the stock or assets of another entity, less the costs
and expenses of the acquisition.
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17
3B.02 DEBT TO CAPITALIZATION -- Borrower will not suffer or permit as
at the end of each fiscal quarter of Borrower the ratio of its funded
indebtedness to its funded indebtedness plus its net worth to exceed
sixty percent (60%). For purposes of this subsection, revolving loans
shall constitute funded indebtedness.
3B.03 FIXED CHARGE COVERAGE RATIO -- Borrower will not, as at each
fiscal quarter of Borrower, suffer or permit the aggregate of
(a) its net income for the immediately preceding four (4)
fiscal quarters of Borrower plus
(b) its interest expense for the immediately preceding four
(4) fiscal quarters of Borrower plus
(c) its depreciation and amortization expense for the
immediately preceding four (4) fiscal quarters of Borrower
plus
(d) the amount provided for its federal, state and local
income taxes for the immediately preceding four (4) fiscal
quarters of Borrower (OTHERWISE KNOWN AS EBITDA)
to be less than an amount equal to one and one-tenth (1.10) times the
sum of its interest expense, principal payments on indebtedness,
capital expenditures (net of asset sales) and cash distributions to
shareholders (OTHERWISE KNOWN AS FIXED CHARGES) for the four (4) fiscal
quarters in question.
3B.04 FUNDED DEBT/EBITDA -- Borrower will not, as at the end of each
fiscal quarter of Borrower, suffer or permit the ratio of its funded
indebtedness to its EBITDA, for the previous four (4) quarters, to
exceed three hundred twenty-five percent (325%). For purposes of this
subsection, revolving loans shall constitute funded indebtedness.
3C. AFFIRMATIVE COVENANTS -- Borrower agrees that so long as the revolving
commitments remain in effect and thereafter until the subject indebtedness shall
have been paid in full, Borrower will perform and observe each of the following:
3C.01 TAXES -- Borrower will pay in full
(a) prior in each case to the date when penalties for the
nonpayment thereof would attach, all taxes, assessments and
governmental charges and levies for which it may be or become
subject and
(b) prior in each case to the date the claim would become
delinquent for non-payment, all other lawful claims (whatever
their kind or nature) which, if unpaid, might become a lien or
charge upon its property;
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18
PROVIDED, that no item need be paid so long as and to the extent that
it is contested in good faith and by timely and appropriate proceedings
which are effective to stay enforcement thereof.
3C.02 FINANCIAL RECORDS -- Borrower will at all times keep true and
complete financial records in accordance with GAAP and, without
limiting the generality of the foregoing, make appropriate accruals to
reserves for estimated and contingent losses and liabilities.
3C.03 VISITATION -- Borrower will permit the Banks at all reasonable
times
(a) to visit and inspect Borrower's properties and examine its
records at Banks' expense and to make copies of and extracts
from such records, and
(b) to consult with Borrower's directors, officers,
accountants, actuaries, trustees and plan administrators in
respect of its financial condition, properties and operations
and the financial condition of its pension plans, each of
which parties is hereby authorized to make such information
available to the Banks to the same extent that it would to
Borrower.
3C.04 INSURANCE -- Borrower will
(a) keep itself and all of its insurable properties insured at
all times to such extent, with such deductibles, by such
insurers and against such hazards and liabilities as is
generally and prudently done by like businesses, EXCEPT that
if a more specific standard is provided in any related
writing, the more specific standard shall prevail, and
(b) forthwith upon a Bank's written request, furnish to such
Bank such information about Borrower's insurance as such Bank
may from time to time reasonably request, which information
shall be prepared in form and detail reasonably satisfactory
to such Bank and certified by an officer of Borrower.
3C.05 CORPORATE EXISTENCE -- Borrower will at all times maintain its
corporate existence, rights and franchises.
3C.06 COMPLIANCE WITH LAW -- Borrower will comply with all laws
(whether federal, state or local and whether statutory, administrative
or judicial or other) and with every lawful governmental order (whether
administrative or judicial) and will, without limiting the generality
of the foregoing,
(a) use and operate all of its facilities and properties in
material compliance with all environmental laws and handle all
hazardous materials in material compliance therewith; keep in
full effect each permit, approval, certification, license or
other authorization required by any environmental law for the
conduct of any material portion of its business; and comply in
all other material respects with all environmental laws;
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19
(b) make a full and timely payment of premiums required by
ERISA and perform and observe all such further and other
requirements of ERISA such that no default under ERISA shall
occur or begin to exist; and
(c) comply with all material requirements of all occupational
health and safety laws;
PROVIDED, that this subsection shall not apply to any of the foregoing
(i) if and to the extent that the same shall be contested in
good faith by timely and appropriate proceedings which are
effective to stay enforcement thereof and against which
appropriate reserves shall have been established or
(ii) in any other case if non-compliance therewith would not
materially and adversely affect Borrower's financial
condition, properties or business.
3C.07 PROPERTIES -- Borrower will maintain all fixed assets necessary
to its continuing operations in good working order and condition,
ordinary wear and tear excepted.
3D. NEGATIVE COVENANTS -- Borrower agrees that so long as the revolving
commitment remains in effect and thereafter until the subject indebtedness shall
have been paid in full, Borrower will perform and observe each of the following:
3D.01 EQUITY TRANSACTIONS -- Borrower will not
(a) be a party to any merger or consolidation,
(b) purchase or otherwise acquire all or substantially all of
the assets and business of any corporation or other business
enterprise,
(c) create, acquire or hold any subsidiary, or be or become a
party to any joint venture or partnership, or make or keep any
investment in any stocks or other equity securities of any
kind other than any investment fully disclosed in Borrower's
most recent 4A.04 financial statements or in the supplemental
schedule or
(d) lease as lessor, sell, sell-leaseback or otherwise
transfer (whether in one transaction or a series of
transactions) all or any substantial part of its fixed assets
EXCEPT chattels that shall have become obsolete or no longer
useful in its present business;
PROVIDED, that this subsection shall not apply to
(i) any transaction referred to in clause (a) or (b) if (1)
after giving effect thereto, the nature of Borrower's
business, viewed on a consolidated basis, shall not be
materially different from that at the date of this Agreement
and (2) there shall have been executed and delivered to Agent
and each Bank an assumption agreement (to be in form and
substance satisfactory to Agent and the Banks) by the
surviving corporation (if not Borrower) in the case of any
merger, by the resulting corporation in the case of any
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consolidation and (iii) no default or event of default under
this Agreement exists or would exist after giving effect to
such transaction,
(ii) any investment including a joint venture or partnership
where such investment is used by Borrower or by a subsidiary
or affiliate of Borrower to invest in transportation
businesses, provided, that the aggregate amount of all such
investments does not at any time exceed fifty million dollars
($50,000,000),
(iii) the sale of other fixed assets not exceeding twenty-five
million dollars ($25,000,000 or
(iv) the creation of subsidiaries to engage in a
transportation business.
3D.02 CREDIT EXTENSIONS -- Borrower will not
(a) make or keep any investment in any notes, bonds or other
obligations of any kind for the payment of money or make or
have outstanding at any time any advance or loan to anyone or
(b) be or become a guarantor of any kind;
PROVIDED, that this subsection shall not apply to
(i) any existing or future advance made to an officer or
employee of Borrower solely for the purpose of paying ordinary
and necessary business expenses of Borrower,
(ii) any existing or future investment in direct obligations
of the United States of America or any agency thereof, or in
certificates of deposit issued by a Bank, or in any other
money-market investment (including commercial paper) if it
carries the highest quality rating of any
nationally-recognized rating agency, PROVIDED, that no such
investment shall mature more than ninety (90) days after the
date when made,
(iii) any existing investment, advance, loan or guaranty fully
disclosed in Borrower's most recent 4A.04 financial statements
or in the supplemental schedule,
(iv) any existing or future guaranty of any direct or
contingent obligation owing to a Bank.
(v) any endorsement of a check or other medium of payment for
deposit or collection, or any similar transaction in the
normal course of business,
(vi) any temporary advance to or guaranty of an obligation of
an employee, provided that the aggregate of all such advances
or guaranties at any one time shall not exceed one million
five hundred thousand dollars ($1,500,000), or
(vii) any guaranty of the debt of a subsidiary, not to exceed
ten million dollars ($10,000,000) of debt in the aggregate to
all subsidiaries.
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21
3D.03 BORROWINGS -- Borrower will not create, assume or have
outstanding at any time any indebtedness for borrowed money or any
funded indebtedness of any kind; PROVIDED, that this subsection shall
not apply to
(i) the subject indebtedness or any other debt owing to the
Banks,
(ii) any existing or future indebtedness secured by a purchase
money security interest permitted by subsection 3D.04 or
incurred under a lease permitted by subsection 3D.04 or
(iii) any existing indebtedness or proposed subordinated
indebtedness fully disclosed in Borrower's most recent 4A.04
financial statements or in the supplemental schedule or any
renewal or extension thereof in whole or in part.
3D.04 LIENS, LEASES -- Borrower will not
(a) lease any property as lessee or acquire or hold any
property subject to any land contract, inventory consignment
or other title retention contract,
(b) sell or otherwise transfer any receivables, whether with
or without recourse
(c) suffer or permit any property now owned or hereafter
acquired by it to be or become encumbered by any mortgage,
security interest, lien or financing statement or
(d) enter into any agreement or other arrangement which would
prohibit Borrower or any subsidiary to create, incur or permit
to exist any lien upon any of its property or assets.
PROVIDED, that this subsection shall not apply to
(i) any tax lien, or any lien securing workers' compensation
or unemployment in- surance obligations, or any mechanic's
carrier's or landlord's lien, or any lien arising under ERISA,
or any security interest arising under article four (bank
deposits and collections) or five (letters of credit) of the
Uniform Commercial Code, or any similar security interest or
other lien, EXCEPT that this clause (i) shall apply only to
security interests and other liens arising by operation of law
(whether statutory or common law) and in the ordinary course
of business and shall not apply to any security interest or
other lien that secures any indebtedness for borrowed money or
any guaranty thereof or any obligation that is in material
default in any manner (other than any default contested in
good faith by timely and appropriate proceedings effective to
stay enforcement of the security interest or other lien in
question),
(ii) zoning or deed restrictions, public utility easements,
minor title irregularities and similar matters having no
adverse effect as a practical matter on the ownership or use
of any of the property in question,
(iii) any lien securing or given in lieu of surety, stay,
appeal or performance bonds, or securing performance of
contracts or bids (other than contracts for the payment of
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money borrowed), or deposits required by law or governmental
regulations or by any court order, decree, judgment or rule or
as a condition to the transaction of business or the exercise
of any right, privilege or license, EXCEPT that this clause
(iii) shall not apply to any lien or deposit securing an
obligation that is in material default in any manner (other
than any default contested in good faith by timely and
appropriate proceedings effective to stay enforcement of the
security interest or other lien in question),
(iv) any mortgage, security interest or other lien securing
Borrower's debt to the Banks or securing Borrower's debt to
another lender if such debt was assumed by Borrower in
connection with a merger or an acquisition,
(v) any mortgage, capitalized lease, security interest or
other lien (each, a "purchase money security interest") which
is created or assumed in purchasing, constructing or improving
any real property or equipment or to which any such property
is subject when purchased, PROVIDED, that (A) the purchase
money security interest shall be confined to the aforesaid
property, (B) the indebtedness secured thereby does not exceed
the total cost of the purchase, construction or improvement
and (C) any such indebtedness, if repaid in whole or in part,
cannot be reborrowed,
(vi) any lease other than any capitalized lease (it being
agreed that a capitalized lease is a lien rather than a lease
for the purposes of this Agreement) so long as the aggregate
annual rentals of all such leases do not exceed two million
five hundred thousand dollars ($2,500,000),
(vii) any mortgage, security interest or other lien which
(together with the indebtedness secured thereby) is fully
disclosed in Borrower's most recent 4A.04 financial statements
or in the supplemental schedule,
(viii) any financing statement perfecting a security interest
that would be permissible under this subsection or
(ix) any renewal, extension or refinancing of any of the
above.
3D.05 FIXED ASSETS -- Borrower will not invest (net after trade-ins, if
any) in fixed assets and leasehold improvements during any fiscal year
(commencing with the present year) more than thirty million dollars
($30,000,000).
4A. CLOSING -- Prior to or at the execution and delivery of this Agreement
Borrower shall have complied or caused compliance with each of the following:
4A.01 SUBJECT NOTES -- Borrower shall execute and deliver to each Bank
a revolving note in accordance with subsection 2B.01.
4A.02 RESOLUTIONS/INCUMBENCY -- Borrower's secretary or assistant
secretary shall have certified to the Banks (a) a copy of resolutions
duly adopted by Borrower's board of directors in respect of this
Agreement and (b) the names and true signatures of
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officers authorized to execute and deliver this Agreement and related
writings on behalf of Borrower.
4A.03 LEGAL OPINION -- Borrower's counsel shall have rendered to the
Banks their written opinion in respect of the matters referred to in
subsections 4B.01, 4B.02, 4B.03 and 4B.04 and in respect of the
perfection of each mortgage, security interest or other lien referred
to in this section 4A, which opinion shall be in such form and
substance (and may be subject only to such qualifications and
exceptions, if any) as shall be satisfactory to Agent.
4A.04 FINANCIAL STATEMENTS -- Borrower shall have furnished to each
Bank at least one true and complete copy of each of the following:
Borrower's annual audit report (including, without limitation, all
financial statements therein and notes thereto and the accompanying
accountants' certificate and management report) prepared as at December
31, 1996 and annual audit reports for each of Borrower's two next
preceding fiscal years (each having been certified by Xxxxxx Xxxxxxxx)
and Borrower's unaudited interim financial statements prepared as at
June 30, 1997.
4A.05 UPFRONT FEE -- Borrower shall have paid Agent an upfront fee of
fifty thousand dollars ($50,000) to be shared by the Banks on a prorata
basis.
4A.06 DOCUMENTATION FEE -- Borrower shall have paid Agent a
documentation fee of ten thousand dollars ($10,000).
4B. WARRANTIES -- Subject only to such additions and exceptions, if any, as may
be set forth in the supplemental schedule or in Borrower's most recent 4A.04
financial statements, Borrower represents and warrants as follows:
4B.01 EXISTENCE -- Borrower is a duly organized and validly existing
Ohio corporation in good standing. Borrower is duly qualified to
transact business in each state or other jurisdiction in which it owns
or leases any real property or in which the nature of the business
conducted makes such qualification necessary or, if not so qualified,
such failure to qualify will have no material adverse effect upon
Borrower's financial condition and its ability to transact business.
4B.02 GOVERNMENTAL RESTRICTIONS -- No registration with or approval of
any governmental agency of any kind is required on the part of Borrower
for the due execution and delivery or for the enforceability of this
Agreement or any related writing.
4B.03 CORPORATE AUTHORITY -- Borrower has requisite corporate power and
authority to enter into this Agreement and to obtain and secure the
subject loans in accordance with this Agreement. The officer executing
and delivering this Agreement on behalf of Borrower has been duly
authorized to do so and to execute and deliver subject notes and other
related writings in accordance with section 4A. Neither the execution
and
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24
delivery of this Agreement or any related writing by Borrower nor its
performance and observance of the respective provisions thereof will
violate any existing provision in its articles of incorporation,
regulations or by-laws or any applicable law or violate or otherwise
constitute a default under any contract or other obligation now
existing and binding upon it. Upon the execution and delivery thereof,
this Agreement and the aforesaid related writings will each become a
valid and binding obligation enforceable against Borrower according to
their respective tenors subject, however, to any applicable insolvency
or bankruptcy law of general applicability and general principles of
equity.
4B.04 LITIGATION -- No litigation or proceeding is pending against
Borrower before any court, administrative agency or arbitrator which
could reasonably be expected to have a material adverse effect on
Borrower.
4B.05 TAXES -- Borrower has filed all federal, state and local tax
returns which are required to be filed by it and paid all taxes due as
shown thereon (EXCEPT to the extent, if any, permitted by subsection
3C.01). The Internal Revenue Service has audited Borrower's tax returns
through the year ended December 31, 1992 and has not alleged any
material default by Borrower in the payment of any tax material in
amount or threatened to make any assessment in respect thereof which
has not been reflected in Borrower's most recent 4A.04 financial
statements.
4B.06 TITLE -- Borrower has good and marketable title to all assets
reflected in its most recent 4A.04 financial statements EXCEPT for
changes resulting from transactions in the ordinary course of business.
All such assets are clear of any mortgage, security interest or other
lien of any kind other than any permitted by subsection 3D.04.
4B.07 LAWFUL OPERATIONS -- Borrower's operations have at all relevant
times been and continue to be in material compliance with all
requirements imposed by law, whether federal, state or local, whether
statutory, regulatory or other, including (without limitation) ERISA,
all environmental laws, and occupational safety and health laws and all
zoning ordinances. Without limiting the generality of the foregoing,
(a) no condition exists at, on or under any facility or other
property now or previously owned by Borrower which would give
rise to any material liability under any environmental law;
and Borrower has not received any notice from any governmental
agency, court or anyone else that it is a potentially
responsible party for the clean-up of any environmental waste
site, is in violation of any environmental permit or law or
has been placed on any registry of solid or hazardous waste
disposal site;
(b) No material accumulated funding deficiency exists in
respect of any of Borrower's pension plans; and no reportable
event has occurred in respect of any such plan which is
continuing and which constitutes grounds either for
termination of the plan or for court appointment of a trustee
for the administration thereof.
4B.08 INSURANCE -- Borrower's insurance coverage complies with the
standards set forth in subsection 3C.04.
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25
4B.09 FINANCIAL STATEMENTS -- Each of the financial statements referred
to in subsection 4A.04 has been prepared in accordance with generally
accepted accounting principles applied on a basis consistent with those
used by it during its then next preceding full fiscal year EXCEPT to
the extent, if any, specifically noted therein and fairly presents in
all material respects (subject to routine year-end audit adjustments in
the case of the unaudited financial statements) Borrower's financial
condition as of the date thereof (including a full disclosure of
material contingent liabilities, if any) and the results of its
operations, if any, for the fiscal period then ending. There has been
no material adverse change in Borrower's financial condition,
properties or business since the date of Borrower's most recent 4A.04
financial statements nor any change in its accounting procedures since
the end of Borrower's latest full fiscal year covered by those
statements.
4B.10 DEFAULTS -- No default under this Agreement exists, nor will any
exist immediately after the execution and delivery of this Agreement.
5A. EVENTS OF DEFAULT -- Each of the following shall constitute an event of
default hereunder:
5A.01 PAYMENTS -- If any principal included in the subject indebtedness
shall not be paid in full promptly when the same becomes payable; or if
any subject indebtedness (EXCEPT principal) or any of Borrower's other
debt to the Banks (EXCEPT any payable on demand) shall not be paid in
full promptly when the same becomes payable and shall remain unpaid for
ten (10) consecutive days thereafter; or if such of Borrower's debt, if
any, to Bank, as may be payable on demand shall not be paid in full
within ten (10) days after any actual demand for payment.
5A.02 WARRANTIES -- If any representation, warranty or statement made
in this Agreement or in any related writing referred to in section 4A
shall be false or erroneous in any material respect; or if any
representation, warranty or statement hereafter made by or on behalf of
Borrower in any related writing not referred to in section 4A shall be
false or erroneous in any material respect.
5A.03 COVENANTS WITHOUT GRACE -- If Borrower shall fail or omit to
perform or observe any provisions in subsections 3A.02 or 3B.04.
5A.04 COVENANTS WITH GRACE -- If anyone (other than Bank and its
agents) shall fail or omit to perform and observe any agreement (other
than those referred to in subsection 5A.01 or 5A.03) contained in this
Agreement or any related writing that is on its part to be complied
with, and that failure or omission shall not have been fully corrected
within thirty (30) days after the giving of written notice to Borrower
by Agent that it is to be remedied.
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26
5A.05 CROSS-DEFAULT -- If any of Borrower's indebtedness for borrowed
money (regardless of maturity) or any of its funded indebtedness shall
be or become "IN DEFAULT" (as defined below). In this subsection, IN
DEFAULT means that (a) there shall have occurred (or shall exist) in
respect of the indebtedness in question (either as in effect at the
date of this Agreement or as in effect at the time in question) any
event, condition or other thing which constitutes, or which with the
giving of notice or the lapse of any applicable grace period or both
would constitute, a default which accelerates (or permits any creditor
or creditors or representative of creditors to accelerate) the maturity
of any such indebtedness in an amount in excess of two million dollars
($2,000,000); or (b) any such indebtedness (other than any payable on
demand) shall not have been paid in full at its stated maturity; or (c)
any such indebtedness payable on demand shall not have been paid in
full within ten (10) banking days after any actual demand for payment.
5A.06 BORROWER'S SOLVENCY -- If (a) Borrower shall discontinue
operations, or (b) Borrower shall commence any insolvency action of any
kind or admit (by answer, default or otherwise) the material
allegations of, or consent to any relief requested in, any insolvency
action of any kind commenced against Borrower by its creditors or any
thereof, or (c) any creditor or creditors shall commence against
Borrower any insolvency action of any kind which shall remain in effect
(neither dismissed nor stayed) for sixty (60) consecutive days.
5B. EFFECTS OF DEFAULT -- Notwithstanding any contrary provision or inference in
this Agreement or in any related writing:
5B.01 OPTIONAL DEFAULTS -- If any event of default referred to in
subsection 5A.01 through 5A.05, both inclusive, shall occur and be
continuing, the Banks shall have the right in their discretion, by
giving written notice to Borrower,
(a) to terminate the revolving commitment (if not already
expired or reduced to zero pursuant to section 2A or
terminated pursuant to this section) and the Banks shall have
no obligation thereafter to grant any revolving loan to
Borrower, and
(b) to accelerate the maturity of all of Borrower's debt to
the Banks (other than debt, if any, already due and payable),
and all such debt shall thereupon become and thereafter be
immediately due and payable in full without any presentment or
demand and without any further or other notice of any kind,
all of which are hereby waived by Borrower.
5B.02 AUTOMATIC DEFAULTS -- If any event of default referred to in
subsection 5A.06 shall occur,
(a) the revolving commitments shall automatically and
immediately terminate (if not already expired or reduced to
zero pursuant to section 2A or terminated pursuant to this
section) and the Banks shall have no obligation thereafter to
grant any revolving loan to Borrower, and
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27
(b) all of Borrower's debt to the Banks (other than debt, if
any, already due and payable) shall automatically and
immediately become due and payable in full, all without any
presentment, demand or notice of any kind, which are hereby
waived by Borrower.
5B.03 OFFSETS -- If there shall occur or exist any default under this
Agreement referred to in subsection 5A.06, then, so long as that
default under this Agreement exists, the Banks shall have the right at
any time to set off against and to appropriate and apply toward the
payment of the subject indebtedness then owing to it, whether or not
the same shall then have matured, any and all deposit balances then
owing by a Bank to or for the credit or account of Borrower, all
without notice to or demand upon Borrower, all such notices and demands
being hereby expressly waived.
5B.04 EQUALIZATION -- Each Bank agrees with the other Banks that if at
any time it shall obtain any advantage over the other Banks or any
thereof in respect of the subject indebtedness it will purchase from
such other Bank or Banks, for cash and at par, such additional
participation in the subject indebtedness owing to the other or others
as shall be necessary to nullify the advantage. If any such advantage
resulting in the purchase of an additional participation as aforesaid
shall be recovered in whole or in part from the Bank receiving the
advantage, each such purchase shall be rescinded, and the purchase
price restored (with interest and other charges if and to the extent
actually incurred by the Bank receiving the advantage) ratably to the
extent of the recovery. During the existence of any default under this
Agreement, any payment (whether made voluntarily or involuntarily, by
offset of any deposit or other indebtedness or otherwise) of any
indebtedness for borrowed money owing by Borrower to any Bank shall be
applied to the subject indebtedness owing to that Bank until the same
shall have been paid in full before any thereof shall be applied to
other indebtedness for borrowed money owing to that Bank.
6A. INDEMNITY: STAMP TAXES -- Borrower will pay all stamp taxes and similar
taxes, if any, including interest and penalties, if any, payable in respect of
the issuance of the subject indebtedness.
6B. INDEMNITY: TAKEOVERS -- Borrower agrees to indemnify the Banks and hold the
Banks harmless from and against any and all liabilities, losses, damages, costs
and expenses of any kind (including, without limitation, the reasonable fees and
disbursements of counsel in connection with any investigative, administrative or
judicial proceeding, whether or not a Bank shall be designated a party thereto)
which may be incurred by a Bank relating to or arising out of any actual or
proposed use of proceeds of the subject loans in connection with the financing
of an acquisition of any corporation or other business entity, PROVIDED that a
Bank shall have no right to be indemnified hereunder for its own gross
negligence or willful misconduct as determined by a court of competent
jurisdiction.
6C. INDEMNITY: CAPITAL REQUIREMENTS -- If
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(a) at any time any governmental authority shall require National City
Corporation or a Bank, whether or not the requirement has the force of
law, to maintain, as support for the revolving commitment, capital in a
specified minimum amount that either is not required or is greater than
that required at the date of this Agreement, whether the requirement is
implemented pursuant to the "risk-based capital guidelines" (published
at 12 CFR 3 in respect of "national banking associations", 12 CFR 208
in respect of "state member banks" and 12 CFR 225 in respect of "bank
holding companies") or otherwise, and
(b) as a result thereof the rate of return on capital of National City
Corporation or a Bank or both (taking into account their then policies
as to capital adequacy and assuming full utilization of their capital)
shall be directly or indirectly reduced by reason of any new or added
capital thereby allocable to the revolving commitment,
then and in each such case Borrower shall, on a Bank's demand, pay such Bank as
an additional fee such amounts as will in that Bank's reasonable opinion
reimburse National City Corporation and such Bank for any such reduced rate of
return.
6D. INDEMNITY: COLLECTION COSTS -- If any event of default shall occur and shall
be continuing, Borrower will pay Agent such further amounts, to the extent
permitted by law, as shall cover Agent's costs and expenses (including, without
limitation, the reasonable fees, interdepartmental charges and disbursements of
its counsel) incurred in collecting the subject indebtedness or in otherwise
enforcing its rights and remedies in respect thereof.
6E. INDEMNITY: FUNDING COSTS -- Borrower agrees to indemnify each Bank against
any loss relating in any way to its funding of any LIBOR loan paid before its
stated maturity (whether a prepayment or a payment following any acceleration of
maturity) and to pay that Bank, as liquidated damages for any such loss, an
amount (discounted to the present value in accordance with standard financial
practice at a rate equal to the treasury yield) equal to interest computed on
the principal payment from the payment date to the respective stated maturities
thereof at a rate equal to the difference of the contract rate less the treasury
yield, all as determined by that Bank in its reasonable discretion. TREASURY
YIELD means the annual yield on direct obligations of the United States having a
principal amount and maturity similar to that of the principal being paid.
6F. CERTIFICATE FOR INDEMNIFICATION -- Each demand by Agent or a Bank for
payment pursuant to section 6A, 6B, 6C 6D or 6E shall be accompanied by a
certificate setting forth the reason for the payment, the amount to be paid, and
the computations and assumptions in determining the amount, which certificate
shall be presumed to be correct in the absence of manifest error. In determining
the amount of any such payment, Agent or a Bank may use reasonable averaging and
attribution methods.
7A. BANKS' PURPOSE -- The Banks represents and warrants to Borrower that the
Banks are familiar with the Securities Act of 1933 as amended and the rules and
regulations thereunder and is not entering into this Agreement with any
intention of violating that Act or any rule or
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regulation thereunder, it being understood, however, that the Banks shall at all
times retain full control of the disposition of their assets.
7B. AGENT -- Each Bank irrevocably appoints National City to be its agent (in
that capacity, AGENT) with full authority to take such actions, and to exercise
such powers, on behalf of the Banks in respect of this Agreement and the related
writings as are therein respectively delegated to Agent or as are reasonably
incidental to those delegated powers.
7B.01 NATURE OF APPOINTMENT -- Agent shall have no fiduciary
relationship with any Bank by reason of this Agreement (except with
respect to payments) and the related writings, nor shall Agent have any
duty or responsibility whatever to any Bank except those expressly set
forth in this Agreement and the related writings. Without limiting the
generality of the foregoing, each Bank acknowledges that Agent is
acting as such solely as a convenience to the Banks and not as a
manager of the subject commitments or subject indebtedness. This
section 7B does not confer any rights upon Borrower or anyone else
(except the Banks), whether as a third party beneficiary or otherwise.
7B.02 NATIONAL CITY AS A BANK; OTHER TRANSACTIONS -- National City's
rights under this Agreement and the related writings shall not be
affected by its serving as Agent. National City and its affiliates may
generally transact any banking, financial, trust, advisory or other
business with the companies (including, without limitation, the
acceptance of deposits, the extension of credit and the acceptance of
fiduciary appointments) without notice to the Banks, without accounting
to the Banks, and without prejudice to National City's rights as a Bank
under this Agreement and the related writings
7B.03 INSTRUCTION FROM BANKS -- Agent shall not be required to exercise
any discretion or take any action as to matters not expressly provided
for by this Agreement and the related writings (including, without
limitation, collection and enforcement actions in respect of the
subject indebtedness and any collateral therefor) EXCEPT that Agent
shall take such action (or omit to take such action) as may be
reasonably requested of it in writing by the Banks, which instructions
and which actions and omissions shall be binding upon all the Banks;
PROVIDED, that Agent shall not be required to act (or omit any act) if,
in its judgment, any such action or omission might expose Agent to
personal liability or might be contrary to this Agreement, any related
writing or any applicable law.
7B.04 BANKS' DILIGENCE -- Each Bank
(a) represents and warrants that it has made its decision to
enter into this Agreement and the related writings and
(b) agrees that it will make its own decision as to taking or
not taking future actions in respect of this Agreement and the
related writings
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in each case without reliance on Agent or any other Bank and on the
basis of its independent credit analysis and its independent
examination of and inquiry into such documents and other matters as it
deems relevant and material.
7B.05 NO IMPLIED REPRESENTATIONS -- Agent shall not be liable for any
representation, warranty, agreement or obligation of any kind of any
other party to this Agreement or anyone else, whether made or implied
by any company in this Agreement or any related writing or by a Bank in
any notice or other communication or by anyone else or otherwise.
7B.06 SUB-AGENTS -- Agent may employ agents and shall not be liable
(except as to money or property received by it or its agents) for any
negligence or misconduct of any such agent selected by it with
reasonable care. Agent may consult with legal counsel, certified public
accountants and other experts of its choosing (including, without
limitation, NATIONAL CITY's salaried employees, any employed by
Borrower or any otherwise not independent) and shall not be liable for
any action or inaction taken or suffered in good faith by it in
accordance with the advice of any such counsel, accountants or other
experts.
7B.07 AGENT'S DILIGENCE -- Agent shall not be required (a) to keep
itself informed as to anyone's compliance with any provision of this
Agreement or any related writing, (b) to make any inquiry into the
properties, financial condition or operations of any company or any
other matter relating to this Agreement or any related writing, (c) to
report to any Bank any information (other than which this Agreement or
any related writing expressly requires to be so reported) that Agent or
any of its affiliates may have or acquire in respect of any company's
properties, business or financial condition or any other matter
relating to this Agreement or any related writing or (d) to inquire
into the validity, effectiveness or genuineness of this Agreement or
any related writing.
7B.08 NOTICE OF DEFAULT -- Agent shall not be deemed to have knowledge
of any default under this Agreement unless and until it shall have
received a written notice describing it and citing the relevant
provision of this Agreement or any related writing.
7B.09 AGENT'S LIABILITY -- Neither Agent nor any of its directors,
officers, employees, attorneys and other agents shall be liable for any
action or omission on their respective parts except for gross
negligence or willful misconduct.
7B.10 COMPENSATION -- Borrower agrees to pay Agent annually, in
advance, an agency fee described in a separate letter agreement between
Borrower and Agent. Agent shall receive no other compensation for its
services as agent of the Banks in respect of this Agreement and the
related writings, but Borrower shall reimburse Agent periodically on
its demand for out-of-pocket expenses, if any, reasonably incurred by
it as such, and agreed to by Borrower.
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7B.11 DISBURSEMENTS -- Whenever Agent shall receive any funds in
respect of the subject indebtedness or otherwise in respect of this
Agreement or any related writing, whether from Borrower for the account
of the Banks or from the Banks for the account of Borrower, Agent shall
disburse the funds on the day the funds shall be deemed to have been
received. Agent shall be entitled (but not obligated) to make a timely
disbursement of loan proceeds to Borrower before actually receiving
funds from the Banks (except if and to the extent Agent shall have
received written instructions to the contrary from any Bank or Banks)
and to make a timely disbursement of payments to the Banks before
actually receiving funds from Borrower. If the funds to be disbursed
are not received by Agent on a timely basis, (a) Agent at its option
may (a) rescind the disbursement and require the disbursee to return
the funds in question with interest or (b) require the party who failed
to furnish the funds for disbursement on a timely basis to pay Agent
interest thereon the interest in each case to be computed at the
federal funds rate and to be paid on demand.
7B.12 AGENT'S INDEMNITY -- The Banks shall indemnify Agent (to the
extent Agent is not reimbursed by Borrower) from and against any loss
or liability (other than any caused by Agent's gross negligence or
willful misconduct) incurred by Agent as such in respect of this
Agreement or any related writing and from and against any out-of-pocket
expenses incurred in defending itself or otherwise related to this
Agreement or any related writing including, without limitation,
reasonable fees and disbursements of legal counsel of its own selection
(including, without limitation, the reasonable interdepartmental
charges of its salaried attorneys) in the defense of any claim against
it or in the prosecution of its rights and remedies as Agent; PROVIDED,
that each Bank shall be liable for only its ratable share of the whole
loss or liability.
7B.13 RESIGNATION -- Agent (or any successor) may resign as such at any
time upon sixty days' prior written notice to Borrower and to each
Bank, in which event a majority of the Banks may appoint a successor
agent by giving written notice thereof to Borrower, the resigning agent
and each Bank not participating in the appointment. In the absence of a
timely appointment, Agent shall have the right (but not the duty) to
make a temporary appointment of any Bank (but only with that Bank's
consent) to act as its successor pending an appointment pursuant to the
next preceding sentence. In either case, the successor agent shall
deliver its written acceptance of appointment to Borrower, to each Bank
and to the former agent, whereupon the successor agent shall
automatically acquire and assume all the rights and duties as those
prescribed for Agent by this section 7B. Any resigning agent shall
execute and deliver such assignments and other writings as the
successor agent may reasonably require to facilitate its becoming the
successor agent.
8. INTERPRETATION -- This Agreement and the related writings shall be governed
by the following provisions:
8.01 WAIVERS -- The Banks may from time to time in their discretion
grant Borrower waivers and consents in respect of this Agreement or any
related writing or assent to
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amendments thereof, but no such waiver or consent shall be binding upon
the Banks unless specifically granted by the Banks in writing, which
writing shall be strictly construed. Without limiting the generality of
the foregoing, Borrower agrees that no course of dealing in respect of,
nor any omission or delay in the exercise of, any right, power or
privilege by the Banks shall operate as a waiver thereof, nor shall any
single or partial exercise thereof preclude any further or other
exercise thereof or of any other, as each such right, power or
privilege may be exercised either independently or concurrently with
others and as often and in such order as the Banks may deem expedient.
8.02 CUMULATIVE PROVISIONS -- Each right, power or privilege specified
or referred to in this Agreement or any related writing is in addition
to and not in limitation of any other rights, powers and privileges
that the Banks may otherwise have or acquire by operation of law, by
other contract or otherwise.
8.03 BINDING EFFECT -- The provisions of this Agreement and the related
writings shall bind and benefit Borrower and the Banks and their
respective successors and assigns, including each subsequent holder, if
any, of the subject notes or any thereof; PROVIDED, that no person or
entity other than Borrower may obtain subject loans or subject LCs; and
PROVIDED, further, that neither any holder of any subject note or
assignee of any subject loan, whether in whole or in part, shall
thereby become obligated thereafter to grant to Borrower any subject
loan or have a subject LC issued on Borrower's behalf.
8.04 SURVIVAL OF PROVISIONS -- All representations and warranties made
in or pursuant to this Agreement or any related writing shall survive
the execution and delivery of this Agreement and the subject notes. The
provisions of section 6 shall survive the payment of the subject
indebtedness.
8.05 IMMEDIATE U.S. FUNDS -- Any reference to money is a reference to
lawful money of the United States of America which, if in the form of
credits, shall be in immediately available funds.
8.06 CAPTIONS -- The several captions to different sections and
subsections of this Agreement are inserted for convenience only and
shall be ignored in interpreting the provisions thereof.
8.07 SUBSECTIONS -- Each reference to a section includes a reference to
all subsections thereof (i.e., those having the same character or
characters to the left of the decimal point) EXCEPT where the context
clearly does not so permit.
8.08 ILLEGALITY -- If any provision in this Agreement or any related
writing shall for any reason be or become illegal, void or
unenforceable, that illegality, voidness or unenforceability shall not
affect any other provision.
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8.09 OHIO LAW -- This Agreement and the related writings and the
respective rights and obligations of the parties hereto shall be
construed in accordance with and governed by internal Ohio law.
8.10 INTEREST/FEE COMPUTATIONS -- All interest and all fees for any
given period shall accrue on the first day thereof but not on the last
day thereof and in each case shall be computed on the basis of a
360-day year and the actual number of days elapsed. In no event shall
interest accrue at a higher rate than the maximum rate, if any,
permitted by law.
8.11 NOTICE -- A notice to or request of Borrower shall be deemed to
have been given or made under this Agreement or any related writing
either upon the delivery of a writing to that effect (either in person
or by transmission of a telecopy) to an officer of Borrower or five (5)
days after a writing to that effect shall have been deposited in the
United States mail and sent, with postage prepaid, by registered or
certified mail, properly addressed to Borrower (Attention: chief
financial officer). No other method of actually giving actual notice to
or making a request of Borrower is hereby precluded. Every notice
required to be given to Bank pursuant to this Agreement or any related
writing shall be delivered (either in person or by transmission of a
telecopy) to an account officer of Bank. A notice or request by mail is
properly addressed to a party when addressed to it at the address set
forth opposite its signature below or at such other address as that
party may furnish to each of the others in writing for that purpose. A
telecopy is transmitted to a party when transmitted to the telecopy
number set forth opposite that party's signature below (or at such
other telecopy number as that party may furnish to the other in writing
for that purpose).
8.12 ACCOUNTING TERMS -- Any accounting term used in this Agreement
shall have the meaning ascribed thereto by GAAP subject, however, to
such modification, if any, as may be provided by section 9 or elsewhere
in this Agreement.
8.13 ENTIRE AGREEMENT -- This Agreement and the related writings
referred to in or otherwise contemplated by this Agreement set forth
the entire agreement of the parties as to the transactions contemplated
by this Agreement.
8.14 WAIVER OF JURY TRIAL -- The parties acknowledge and agree that any
controversy that may arise under this Agreement and the related
writings would involve difficult and complex issues and therefore agree
that any law suit growing out of or incidental to any such controversy
will be tried in a court of competent jurisdiction by a judge sitting
without a jury.
8.15 ASSIGNMENT -- Each Bank may, with the consent of Borrower, which
consent shall not be unreasonably withheld, assign its rights under
this Agreement or sell participations in all or any part of its subject
loans or subject LCs.
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9. AMENDMENTS AND WAIVERS -- (a) Neither this Agreement nor any other related
writing, nor any terms hereof or thereof, may be amended, supplemented or
modified except in accordance with the provisions of this section. A majority of
the Banks, may, or, with the written consent of the majority of the Banks, Agent
may, from time to time, (a) enter into with the Borrower written amendments,
supplements or modifications hereto and to the other related writings for the
purpose of adding any provisions to this Agreement or the other related writings
or changing in any manner the rights or obligations of the Banks or of the
Borrower hereunder or thereunder or (b) waive at the Borrower's request, on such
terms and conditions as a majority of the Banks or Agent, as the case may be,
may specify in such instrument, and of the requirements of this Agreement or the
other related writings or any default under this Agreement or event of default
and its consequences; PROVIDED, HOWEVER, that no such waiver and no such
amendment, supplement or modification shall, unless one hundred percent (100%)
of the Banks agree thereto:
(i) reduce the amount or extend the scheduled date of maturity of any
subject loan or any reimbursement obligation or of any scheduled
installment thereof, or reduce the stat- ed rate of any interest or fee
payable hereunder or extend the scheduled date of any pay- ment thereof
or increase the amount or extend the expiration date of any Bank's
revolving commitment, in each case without the consent of each Bank
directly affected thereby,
(ii) amend, modify or waive any provision of this section 9 or reduce
the percentage specified in the definition of a majority of the Banks
without the written consent of all of the Banks,
(iii) release any guarantee or, in the aggregate, a material portion of
the collateral, except as expressly permitted hereby or by any
guarantee or security document (as such documents are in effect on the
date hereof or, if later, the date of execution and delivery thereof in
accordance with the terms hereof),
(iv) amend, modify or waive any provision of section 7B without the
written consent of Agent,
(v) amend, modify or waive the provisions of subsection 3D.01 relating
to equity transactions.
(b) Any waiver and any amendment, supplement or modification pursuant
to this section 9 shall apply to each of the Banks and shall be binding upon the
Borrower, the Banks, Agent and all future holders of the subject loans. In the
case of any waiver, the Borrower, the Banks and Agent shall be restored to their
former position and rights hereunder and under the related writings, and any
default under this Agreement or event of default waived shall be deemed to be
cured and not continuing; but no such waiver shall extend to any subsequent or
other default under this Agreement or event of default, or impair any right
consequent thereon.
10. DEFINITIONS -- As used in this Agreement and in the related writings, EXCEPT
where the context clearly requires otherwise,
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ACCOUNT OFFICER means that officer who at the time in question is
designated by a Bank as the officer having primary responsibility for
giving consideration to Borrower's requests for credit or, in that
officer's absence, that officer's immediate superior or any other
officer who reports directly to that superior officer;
ACCUMULATED FUNDING DEFICIENCY shall have the meaning ascribed thereto
in section 302(a)(2) of ERISA;
ADVANTAGE means any payment (whether made voluntarily or involuntarily,
by offset of any deposit or other indebtedness or otherwise) received
by a bank in respect of the subject indebtedness if the payment results
in that bank's having less than its ratable share of the subject
indebtedness in question;
AFFILIATE when used with reference to any corporation (or other
business entity) (the "subject") means, a corporation (or other
business entity) or person that is in control of or under the control
of or under common control (by another) with the subject, the term
CONTROL meaning the direct or indirect power to direct the management
or policies of the subject or the affiliate or both (as the case may
be), whether through the direct or indirect ownership of voting
securities, by contract or otherwise;
AGREEMENT means this Agreement and includes each amendment, if any, to
this Agreement;
BANK means National City Bank, PNC Bank, National Association or Star
Bank, National Association
BANKING DAY means any day other than a Saturday or a Sunday or a public
holiday or other day on which banking institutions in Cleveland, Ohio,
are generally closed and do not conduct a general banking business;
BORROWER means Stoneridge, Inc., an Ohio corporation;
CONTRACT PERIOD is defined in subsection 2C.03;
CREDIT EXPOSURE means the aggregate at the time in question of (a) the
unpaid principal of the revolving loans then owing plus (b) the undrawn
balance of the subject LCs then outstanding;
CREDIT REQUEST means a request made pursuant to subsection 2B.02;
DEBT means, collectively, all liabilities of the party or parties in
question to a Bank, whether owing by one such party alone or with one
or more others in a joint, several, or joint and several capacity,
whether now owing or hereafter arising, whether owing
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absolutely or contingently, whether created by loan, overdraft,
guaranty of payment or other contract or by quasi-contract or tort,
statute or other operation of law or otherwise, whether incurred
directly to a Bank or acquired by purchase, pledge or otherwise, and
whether participated to or from a Bank in whole or in part; and in the
case of Borrower includes, without limitation, the subject
indebtedness;
DEFAULT UNDER ERISA means (a) the occurrence or existence of a material
accumulated funding deficiency in respect of any of Borrower's pension
plans, (b) any failure by Borrower to make a full and timely payment of
premiums required by ERISA for insurance against any employer's
liability in respect of any such plan, (c) any material breach of a
fiduciary duty by Borrower or any trustee in respect of any such plan
or (d) the existence of any action for the forceable termination of any
such plan;
DEFAULT UNDER THIS AGREEMENT means an event, condition or thing which
constitutes (or which with the lapse of any applicable grace period or
the giving of notice or both would constitute) an event of default
referred to in section 5A and which has not been appropriately waived
in writing in accordance with this Agreement or corrected to Bank's
full satisfaction;
DISTRIBUTION means a payment made, liability incurred or other
consideration (other than any stock dividend or stock split payable
solely in capital stock of Borrower) given by Borrower for the
purchase, acquisition, redemption or retirement of any capital stock of
Borrower or as a dividend, return of capital or other distribution in
respect of Borrower's capital stock and DISTRIBUTE means to make a
distribution;
ENVIRONMENTAL LAW means the Comprehensive Environmental Response,
Compensation, and Liability Act (42 USC 9601 et seq.), the Hazardous
Material Transportation Act (49 USC 1801 et seq.), the Resource
Conservation and Recovery Act (42 USC 6901 et seq.), the Federal Water
Pollution Control Act (33 USC 1251 et seq.), the Toxic Substances
Control Act (15 USC 2601 et seq.) and the Occupational Safety and
Health Act (29 USC 651 et seq.), as such laws have been or hereafter
may be amended, and any and all analogous future federal, or present or
future state or local, statutes and the regulations promulgated
pursuant thereto;
ERISA means the Employee Retirement Income Security Act of 1974 (P.L.
93-406) as amended from time to time and in the event of any amendment
affecting any section thereof referred to in this Agreement, that
reference shall be a reference to that section as amended,
supplemented, replaced or otherwise modified;
ERISA REGULATOR means any governmental agency (such as the Department
of Labor, the Internal Revenue Service and the Pension Benefit Guaranty
Corporation) having any regulatory authority over any of Borrower's
pension plans;
EVENT OF DEFAULT is defined in section 5A;
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EXPIRATION DATE means the date referred to as such in subsection 2A.02,
EXCEPT that in the event of any extension pursuant to subsection 2A.05,
"expiration date" shall mean the latest date to which the revolving
commitment shall have been so extended;
FEDERAL FUNDS RATE means a fluctuating interest rate per annum, as in
effect at the time in question, that is the rate determined by NATIONAL
CITY to be the opening federal funds rate per annum paid or payable by
it on the day in question in its regional federal funds market for
overnight borrowings from other banking institutions;
FUNDED INDEBTEDNESS means indebtedness of the person or entity in
question which matures or which (including each renewal or extension,
if any, in whole or in part) remains unpaid for more than twelve months
after the date originally incurred and includes, without limitation (a)
any indebtedness (regardless of its maturity) if it is renewable or
refundable in whole or in part solely at the option of that person or
entity (in the absence of default) to a date more than one year after
the date of determination, (b) any capitalized lease, (c) any guaranty
of funded indebtedness owing by another person or entity and (d) any
funded indebtedness secured by a security interest, mortgage or other
lien encumbering any property owned or being acquired by the person or
entity in question even if the full faith and credit of that person or
entity is not pledged to the payment thereof; PROVIDED, that in the
case of any indebtedness payable in installments or evidenced by serial
notes or calling for sinking fund payments, those payments maturing
within twelve months after the date of determination shall be
considered current indebtedness rather than funded indebtedness for the
purposes of section 3B but shall be considered funded indebtedness for
all other purposes;
GAAP means generally accepted accounting principles applied in a manner
consistent with those used in Borrower's latest fiscal year-end
financial statements referred to in subsection 4A.04;
GUARANTOR means one who pledges his credit or property in any manner
for the payment or other performance of the indebtedness, contract or
other obligation of another and includes (without limitation) any
guarantor (whether of collection or payment), any obligor in respect of
a standby letter of credit or surety bond issued for the obligor's
account, any surety, any co-maker, any endorser, and anyone who agrees
conditionally or otherwise to make any loan, purchase or investment in
order thereby to enable another to prevent or correct a default of any
kind; and GUARANTY means the obligation of a guarantor;
INSOLVENCY ACTION means either (a) a pleading of any kind filed by the
person, corporation or entity (an "insolvent") in question to seek
relief from the insolvent's creditors, or filed by the insolvent's
creditors or any thereof to seek relief of any kind against that
insolvent, in any court or other tribunal pursuant to any law (whether
federal, state or other) relating generally to the rights of creditors
or the relief of debtors or both, or (b) any other action of any kind
commenced by an insolvent or the insolvent's creditors or any thereof
for the
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purpose of marshalling the insolvent's assets and liabilities for the
benefit of the insolvent's creditors; and "insolvency action" includes
(without limitation) a petition commencing a case pursuant to any
chapter of the federal bankruptcy code, any application for the
appointment of a receiver, trustee, liquidator or custodian for the
insolvent or any substantial part of the insolvent's assets, and any
assignment by an insolvent for the general benefit of the insolvent's
creditors;
LIBOR PRE-MARGIN RATE means the rate per annum (rounded upwards, if
necessary, to the next higher 1/16 of 1%), as determined by Agent which
equals the average rate per annum at which deposits in United States
dollars are offered for deposits of the maturity and amount in
question, at 11:00 A.M. London time (or as soon thereafter as
practicable) two banking days prior to the first day of the contract
period in question, to Agent by prime banking institutions in the
London interbank eurodollar market;
LIBOR LOAN means a subject loan having a contract period described in
clause (b) of subsection 2C.03 and bearing interest in accordance with
clause (b) of subsection 2C.07;
MAJORITY OF THE BANKS means Banks which have committed seventy-five
percent (75%) (by amount) of the subject commitments as set forth is
subsection 2A.01;
MATERIAL means material as determined by the Banks in the reasonable
exercise of their discretion;
MOST RECENT 4A.04 FINANCIAL STATEMENTS means Borrower's most recent
financial statements that are referred to in subsection 4A.04;
NATIONAL CITY means National City Bank;
NET INCOME means net income as determined in accordance with GAAP,
after taxes and after extraordinary items, but without giving effect to
any gain resulting from any reappraisal or write-up of any asset;
NET WORTH means the excess (as determined in accordance with GAAP) of
the net book value (after deducting all applicable valuation reserves
and without any consideration to any re-appraisal or write-up of
assets) of Borrower's assets over Borrower's total liabilities;
PENSION PLAN means a defined benefit plan (as defined in section 3(35)
of ERISA) of Borrower and includes, without limitation, any such plan
that is a multi-employer plan (as defined in section 3(37) of ERISA)
applicable to any of Borrower's employees;
PRIME RATE means the fluctuating rate, as in effect at the time in
question, that is publicly announced by National City from time to time
in Cleveland, Ohio, as being its prime rate thereafter in effect;
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39
REFERENCE RATE means, on any given date, either the prime rate in
effect for that day or a rate equal to one percent (1%) per annum plus
the federal funds rate in effect for that day, whichever rate shall be
the higher for that day;
RELATED WRITING means any note, mortgage, security agreement, other
lien instrument, financial statement, audit report, notice, legal
opinion, credit request, officer's certificate or other writing of any
kind which is delivered to Bank and which is relevant in any manner to
this Agreement or any related writing and includes, without limitation,
the subject notes and the other writings referred to in sections 3A and
4A;
REPORTABLE EVENT has the meaning ascribed thereto by ERISA;
REVOLVING COMMITMENT means a Bank's commitment to extend credit to
Borrower pursuant to sections 2A and 2D of this Agreement and upon the
terms, subject to the conditions of this Agreement and in accordance
with the other provisions of this Agreement;
REVOLVING LOAN means a loan obtained by Borrower pursuant to
subsections 2A and 2B of this Agreement and evidenced by a revolving
note;
REVOLVING NOTE means a note executed and delivered by Borrower and
being in the form and substance of Exhibit B with the blanks
appropriately filled;
RR LOAN means a subject loan maturing in the manner described in the
first sentence of subsection 2C.04 and bearing interest in accordance
with subsection 2C.06;
SUBJECT INDEBTEDNESS means, collectively, the principal of and interest
on the subject loans and all fees and other liabilities, if any,
incurred by Borrower to the Banks pursuant to this Agreement or any
related writing;
SUBJECT LC means a letter of credit issued by National City in
accordance with section 2D;
SUBJECT LOAN means a loan obtained by Borrower pursuant to this
Agreement;
SUBJECT NOTE means a note executed and delivered by Borrower and being
in the form and substance of Exhibit B with the blanks appropriately
filled;
SUBSIDIARY means a corporation or other business entity if shares
constituting a majority of its outstanding capital stock (or other form
of ownership) or constituting a majority of the voting power in any
election of directors (or shares constituting both majorities) are (or
upon the exercise of any outstanding warrants, options or other rights
would be) owned
-33-
40
directly or indirectly at the time in question by the corporation in
question or another "subsidiary" of that corporation or any combination
of the foregoing;
SUPPLEMENTAL SCHEDULE means the schedule incorporated into this
Agreement as Exhibit A;
TOTAL LIABILITIES means the aggregate (without duplication) of all
liabilities of the corporation or corporations in question and
includes, without limitation, (a) any indebtedness which is secured by
any mortgage, security interest or other lien on any of their property
even if the full faith and credit of none of them is pledged to the
payment thereof, (b) any indebtedness for borrowed money or funded
indebtedness of any kind if any such corporation or corporations is a
guarantor thereof and (c) any subordinated indebtedness; PROVIDED, that
there shall be excluded any liability under a reimbursement agreement
relating to a letter of credit issued to finance the importation or
exportation of goods;
TRANSPORTATION BUSINESS means a business primarily engaged in by
Borrower or a subsidiary of Borrower involving the design and
manufacture of electrical power and distribution components, modules
and systems, integrated electronic and electromechanical switch
products, electronic instrument clusters, driver message centers, power
conversion products, multiplexed modules and electrical systems and
electronic switch modules and electromechanical actuator products or
products which relate or connect thereto.
the foregoing definitions shall be applicable to the respective plurals
of the foregoing defined terms.
Address: STONERIDGE, INC.
0000 Xxxx Xxxxxx Xxxxxx
Xxxxxx, Xxxx 00000
Telecopy: By: /s/ Xxxxx Xxxxx
-------------- ------------------------------
Address: NATIONAL CITY BANK, AGENT
0000 Xxxx Xxxxx Xxxxxx
Attn: Metro/Ohio Division
Xxxxxxxxx, Xxxx 00000-0000 By: /s/ Xxxxxxx XxXxxx
Telecopy: 216/575-9396 -----------------------------
Address: NATIONAL CITY BANK
0000 Xxxx Xxxxx Xxxxxx
Attn: Metro/Ohio Division
Xxxxxxxxx, Xxxx 00000-0000 By: /s/ Xxxxxxx XxXxxx
Telecopy: 216/575-9396 -----------------------------
-34-
41
Address: PNC BANK, NATIONAL ASSOCIATION
0000 Xxxx Xxxxx Xxxxxx
Xxxx 0000
Xxxxxxxxx, Xxxx 00000 By: /s/ Xxxxxx Xxxxx
Telecopy: 000 000-0000 --------------------------
Address: STAR BANK, NATIONAL ASSOCIATION
0000 Xxxxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000
Attn: Xxxx X. Xxxxxxx By: /s/ Xxxx Xxxxxxx
Telecopy: 000 000-0000 --------------------------
-35-
42
SUPPLEMENTAL SCHEDULE
There is no item which Borrower must disclose in this supplemental schedule in
order to be in full compliance with subsections 3D.01, 3D.02, 3D.03 and 3D.04,
nor is there any addition or exception to the representations and warranties in
section 4B.
EXHIBIT A
43
REVOLVING NOTE
--------------
$65,000,000 Cleveland, Ohio September 15, 1997
FOR VALUE RECEIVED, the undersigned, Stoneridge, Inc., an Ohio corporation,
promises to pay to the order of National City Bank, at the main office of
National City Bank the principal sum of
SIXTY-FIVE MILLION DOLLARS
(or, if less, the aggregate unpaid principal balance from time to time shown on
the reverse side of this note or any allonge thereto), together with interest
computed thereon in accordance with the credit agreement referred to below,
which principal and interest is payable in accordance with the provisions in the
credit agreement.
This note is issued pursuant to a certain Credit Agreement (the "credit
agreement") made as of September 15, 1997 by and among Borrower, three banks and
National City Bank (as agent of the banks for the purposes of the credit
agreement pursuant to which Borrower may obtain revolving loans (one by each
bank) aggregating One Hundred Twenty-Five Million and No/100ths Dollars
($125,000,000.00). The credit agreement contains definitions applicable to this
note, provisions governing the making of loans, the acceleration of the maturity
thereof, rights of prepayment and other provisions applicable to this note. Each
endorsement, if any, on the reverse side of this note (or any allonge thereto)
shall be prima facie evidence of the data so endorsed.
Address: STONERIDGE, INC.
0000 Xxxx Xxxxxx Xxxxxx
Xxxxxx, Xxxx 00000
Telecopy: ______________ By: ________________________
Title: _____________________
EXHIBIT B
44
REVOLVING NOTE
--------------
$45,000,000 Cleveland, Ohio September 15, 1997
FOR VALUE RECEIVED, the undersigned, Stoneridge, Inc., an Ohio corporation,
("Borrower") promises to pay to the order of PNC Bank, National Association, at
the main office of National City Bank in Cleveland, Ohio, the principal sum of
FORTY-FIVE MILLION DOLLARS
(or, if less, the aggregate unpaid principal balance from time to time shown on
the reverse side of this note or any allonge thereto), together with interest
computed thereon in accordance with the credit agreement referred to below,
which principal and interest is payable in accordance with the provisions in the
credit agreement.
This note is issued pursuant to a certain Credit Agreement (the "credit
agreement") made as of September 15, 1997 by and among Borrower, three banks and
National City Bank (as agent of the banks for the purposes of the credit
agreement pursuant to which Borrower may obtain revolving loans (one by each
bank) aggregating One Hundred Twenty-Five Million and No/100ths Dollars
($125,000,000.00).
The credit agreement contains definitions applicable to this note, provisions
governing the making of loans, the acceleration of the maturity thereof, rights
of prepayment and other provisions applicable to this note. Each endorsement, if
any, on the reverse side of this note (or any allonge thereto) shall be prima
facie evidence of the data so endorsed.
Address: STONERIDGE, INC.
0000 Xxxx Xxxxxx Xxxxxx
Xxxxxx, Xxxx 00000
Telecopy: ______________ By: ________________________
Title: _____________________
EXHIBIT B
45
REVOLVING NOTE
--------------
$15,000,000 Cleveland, Ohio September 15, 1997
FOR VALUE RECEIVED, the undersigned, Stoneridge, Inc., an Ohio corporation,
("Borrower") promises to pay to the order of Star Bank, National Association, at
the main office of National City Bank in Cleveland, Ohio, the principal sum of
FIFTEEN MILLION DOLLARS
(or, if less, the aggregate unpaid principal balance from time to time shown on
the reverse side of this note or any allonge thereto), together with interest
computed thereon in accordance with the credit agreement referred to below,
which principal and interest is payable in accordance with the provisions in the
credit agreement.
This note is issued pursuant to a certain Credit Agreement (the "credit
agreement") made as of September 15, 1997 by and among Borrower, three banks and
National City Bank (as agent of the banks for the purposes of the credit
agreement pursuant to which Borrower may obtain revolving loans (one by each
bank) aggregating One Hundred Twenty-Five Million and No/100ths Dollars
($125,000,000.00).
The credit agreement contains definitions applicable to this note, provisions
governing the making of loans, the acceleration of the maturity thereof, rights
of prepayment and other provisions applicable to this note. Each endorsement, if
any, on the reverse side of this note (or any allonge thereto) shall be prima
facie evidence of the data so endorsed.
Address: STONERIDGE, INC.
0000 Xxxx Xxxxxx Xxxxxx
Xxxxxx, Xxxx 00000
Telecopy: ______________ By: ________________________
Title: _____________________
EXHIBIT B
46
EXTENSION AGREEMENT
This extension agreement made as of September 15, 1997 by and between
____________________________ (BORROWER), National City Bank, PNC Bank National
Association and Star Bank, National Association (the BANKS) and National City
Bank as agent for the Banks:
Whereas, the parties have executed and delivered a certain credit agreement
dated September 15, 1997 which provides for, among other things, a revolving
commitment aggregating $ and available to Borrower, upon certain terms and
conditions until , 19 (the EXPIRATION DATE now in effect) subject to any earlier
reduction or termination pursuant to the credit agreement.
In consideration of the premises above and agreements below and for other
valuable consideration, the parties agree that subsection 2A.02 of the credit
agreement (captioned "TERM") is hereby amended by deleting the date ___________,
19__and by substituting therefor the date "__, 19__", which latter date shall be
the expiration date hereafter in effect.
In all other respects the credit agreement shall remain in full effect.
Address: Stoneridge, Inc.
0000 Xxxx Xxxxxx Xxxxxx
Xxxxxx, Xxxx 00000 By: ___________________
Telecopy: ___________
Title: __________________
Address: National City Bank, Agent
0000 Xxxx Xxxxx Xxxxxx
Attn: Metro/Ohio Division By: ___________________
Xxxxxxxxx, Xxxx 00000-0000
Telecopy: ____________ Title: __________________
Address: National City Bank
0000 Xxxx Xxxxx Xxxxxx
Attn: Metro/Ohio Division By: ___________________
Xxxxxxxxx, Xxxx 00000-0000
Telecopy: ____________ Title: __________________
Address: PNC Bank, National Association
One PNC Plaza
Fifth & Wood Street By: ___________________
Attn: Regional Corporate Banking
Xxxxxxxxxx, Xxxxxxxxxxxx 00000 Title: __________________
Telecopy: 412/762-7353
Address: Star Bank, National Association
0000 Xxxxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000 By: ___________________
Attn: Xxxx Xxxxxxx
Cleveland, Ohio Title: __________________
Telecopy: 000 000-0000
EXHIBIT C
47
REVOLVING NOTE
--------------
$65,000,000 Cleveland, Ohio September 15, 1997
FOR VALUE RECEIVED, the undersigned, Stoneridge, Inc., an Ohio corporation,
promises to pay to the order of National City Bank, at the main office of
National City Bank the principal sum of
SIXTY-FIVE MILLION DOLLARS
(or, if less, the aggregate unpaid principal balance from time to time shown on
the reverse side of this note or any allonge thereto), together with interest
computed thereon in accordance with the credit agreement referred to below,
which principal and interest is payable in accordance with the provisions in the
credit agreement.
This note is issued pursuant to a certain Credit Agreement (the "credit
agreement") made as of July 12, 1996 by and among Borrower, three banks and
National City Bank (as agent of the banks for the purposes of the credit
agreement pursuant to which Borrower may obtain revolving loans (one by each
bank) aggregating One Hundred Twenty-Five Million and No/100ths Dollars
($125,000,000.00). The credit agreement contains definitions applicable to this
note, provisions governing the making of loans, the acceleration of the maturity
thereof, rights of prepayment and other provisions applicable to this note. Each
endorsement, if any, on the reverse side of this note (or any allonge thereto)
shall be prima facie evidence of the data so endorsed.
Address: STONERIDGE, INC.
0000 Xxxx Xxxxxx Xxxxxx
Xxxxxx, Xxxx 00000
Telecopy: ______________ By: ________________________
Title: _____________________
48
REVOLVING NOTE
--------------
$45,000,000 Cleveland, Ohio September 15, 1997
FOR VALUE RECEIVED, the undersigned, Stoneridge, Inc., an Ohio corporation,
("Borrower") promises to pay to the order of PNC Bank, National Association, at
the main office of National City Bank in Cleveland, Ohio, the principal sum of
FORTY-FIVE MILLION DOLLARS
(or, if less, the aggregate unpaid principal balance from time to time shown on
the reverse side of this note or any allonge thereto), together with interest
computed thereon in accordance with the credit agreement referred to below,
which principal and interest is payable in accordance with the provisions in the
credit agreement.
This note is issued pursuant to a certain Credit Agreement (the "credit
agreement") made as of July 12, 1996 by and among Borrower, three banks and
National City Bank (as agent of the banks for the purposes of the credit
agreement pursuant to which Borrower may obtain revolving loans (one by each
bank) aggregating One Hundred Twenty-Five Million and No/100ths Dollars
($125,000,000.00).
The credit agreement contains definitions applicable to this note, provisions
governing the making of loans, the acceleration of the maturity thereof, rights
of prepayment and other provisions applicable to this note. Each endorsement, if
any, on the reverse side of this note (or any allonge thereto) shall be prima
facie evidence of the data so endorsed.
Address: STONERIDGE, INC.
0000 Xxxx Xxxxxx Xxxxxx
Xxxxxx, Xxxx 00000
Telecopy: ______________ By: ________________________
Title: _____________________
49
REVOLVING NOTE
--------------
$15,000,000 Cleveland, Ohio September 15, 1997
FOR VALUE RECEIVED, the undersigned, Stoneridge, Inc., an Ohio corporation,
("Borrower") promises to pay to the order of Star Bank, National Association, at
the main office of National City Bank in Cleveland, Ohio, the principal sum of
FIFTEEN MILLION DOLLARS
(or, if less, the aggregate unpaid principal balance from time to time shown on
the reverse side of this note or any allonge thereto), together with interest
computed thereon in accordance with the credit agreement referred to below,
which principal and interest is payable in accordance with the provisions in the
credit agreement.
This note is issued pursuant to a certain Credit Agreement (the "credit
agreement") made as of July 12, 1996 by and among Borrower, three banks and
National City Bank (as agent of the banks for the purposes of the credit
agreement pursuant to which Borrower may obtain revolving loans (one by each
bank) aggregating One Hundred Twenty-Five Million and No/100ths Dollars
($125,000,000.00).
The credit agreement contains definitions applicable to this note, provisions
governing the making of loans, the acceleration of the maturity thereof, rights
of prepayment and other provisions applicable to this note. Each endorsement, if
any, on the reverse side of this note (or any allonge thereto) shall be prima
facie evidence of the data so endorsed.
Address: STONERIDGE, INC.
0000 Xxxx Xxxxxx Xxxxxx
Xxxxxx, Xxxx 00000
Telecopy: ______________ By: ________________________
Title: _____________________
50
EXHIBIT A: Supplemental Schedule (4B.)
EXHIBIT B: Revolving Note (2B.01; 4A.01)
EXHIBIT C: Extension Agreement (2B.05)
EXHIBIT D List Of Mortgage Properties (4A.06)