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CREDIT AGREEMENT
Dated as of May 1, 2003
Among
NN, INC.,
as the Domestic Borrower,
NN EUROBALL ApS
as the Euro Borrower,
All of the present and future Subsidiaries (except for
Euro Borrower) of the Domestic Borrower that become
parties hereto, as Guarantors,
the Lenders identified herein,
AMSOUTH BANK,
as Administrative Agent
and
SUNTRUST BANK,
as Documentation Agent and Euro Loan Agent
U.S. $30,000,000 Revolving Credit Facility
U.S $30,405,342 Domestic Term Loan Facility
(euro)26,283,000 Euro Term Loan Facility
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CREDIT AGREEMENT
THIS CREDIT AGREEMENT (this "Agreement"), dated as of May 1, 2003, is
made and entered into on the terms and conditions hereinafter set forth, by and
among NN, INC., a Delaware corporation ("Domestic Borrower") and NN EUROBALL
ApS, a Denmark limited liability company ("Euro Borrower"; Euro Borrower and
Domestic Borrower are sometimes hereinafter individually and collectively
referred to as the "Borrower"), all subsidiaries (except for Euro Borrower) of
the Domestic Borrower now or hereafter becoming parties to this Agreement as
Domestic Guarantors, those several lenders who are or become parties to this
Agreement (collectively, the "Lenders" and, individually, a "Lender"), AMSOUTH
BANK, an Alabama state bank having an office and place of business in Nashville,
Tennessee ("AmSouth"), as administrative agent for the Lenders (in such
capacity, the "Administrative Agent") and SUNTRUST BANK, as Documentation Agent
and Euro Loan Agent for the Lenders (in such capacity, the "Euro Loan Agent").
THE PARTIES HERETO AGREE AS FOLLOWS:
ARTICLE 1.
DEFINITIONS, ACCOUNTING TERMS
AND PRINCIPLES OF CONSTRUCTION
1.1. Defined Terms. In addition to terms defined elsewhere herein, the
following terms, as used in this Agreement, shall have the respective meanings
set forth below (terms defined in the singular to have the same meaning when
used in the plural, and vice versa, unless otherwise expressly indicated):
"Administrative Agent" shall mean AmSouth or such successor
Administrative Agent as may be appointed by the Lenders pursuant to Section
12.10 hereof.
"Affiliate" shall mean, as to any Person, any other Person
directly or indirectly controlling (including all directors, officers and
employees of such Person), directly or indirectly controlled by or under direct
or indirect common control with such Person.
"Agents" shall mean, collectively, the Administrative Agent
and the Euro Loan Agent.
"Applicable Bankruptcy Law" shall mean, with respect to any
Guarantor or NN Italy, Title 11 of the United States Code, and any other laws
governing bankruptcy, suspension of payments, reorganization, arrangement,
adjustment of debts, relief of debtors, dissolution or insolvency and any other
similar laws applicable to such Guarantor or NN Italy.
"Applicable Base Rate Margin" shall mean the margin to be
added to the Base Rate for purposes of determining the interest rate(s)
applicable to Base Rate Loans from time to time, which shall be determined as
provided in Section 2.10.
"Applicable Commitment Fee Percentage" shall mean the
percentage to be used to calculate Commitment Fees from time to time, which
shall be determined as provided in Section 2.10.
"Applicable LIBOR Margin" shall mean the margin to be added to
LIBOR for purposes of determining the interest rate(s) applicable to LIBOR Loans
from time to time, which shall be determined as provided in Section 2.10.
"Asset Acquisition" shall mean (a) any Investment by the
Borrower or any of its Subsidiaries in any other Person pursuant to which such
Person shall become a Subsidiary of the Borrower or any of its Subsidiaries or
shall be merged with the Borrower or any of its Subsidiaries or (b) any
acquisition by the Borrower or any of its Subsidiaries of the assets of any
Person that constitute substantially all of an operating unit or business of
such Person.
"Assignment and Acceptance" shall mean an assignment and
acceptance, substantially in the form of Exhibit 13.2, between a transferor
Lender and a proposed transferee, regarding the sale, assignment, transfer or
other disposition (other than the sale of a participation) of all or any amount
of the Commitments, Revolving Loans and Term Loans of such Lender.
"Base LIBOR" shall mean,
(a) with respect to any Loan (other than a Euro Term Loan) the
rate per annum for offered Dollar deposits in the interbank Eurodollar
market appearing on page 3750 of the TELERATE rate reporting system at
approximately 11:00 a.m., Central Time, on the Interest Rate
Determination Date immediately prior to the beginning of the Interest
Period for the corresponding LIBOR Loan, for the number of months
comprised therein and in an amount equal to the amount of such LIBOR
Loan to be outstanding during such Interest Period. Without limiting
the provisions of Section 2.11.3, in the event that prior to the Term
Loan Maturity Date TELERATE quotes for Base LIBOR are discontinued or
become unascertainable, the Administrative Agent may (1) determine Base
LIBOR with reference to the rate per annum for offered Dollar deposits
in the interbank Eurodollar market appearing on the Reuters Screen LIBO
Page at approximately 11:00 a.m., Central Time, on the Interest Rate
Determination Date immediately prior to the beginning of the Interest
Period for the corresponding LIBOR Loan, for the number of months
comprised therein and in an amount equal to the amount of such LIBOR
Loan to be outstanding during such Interest Period (and if more than
one such rate appears, the Administrative Agent may use the arithmetic
mean of such rates), or (2) designate any other comparable resource for
use in determining Base LIBOR for purposes hereof.
(b) with respect to any Euro Term Loan, the rate per annum for
offered Euro deposits in the interbank Eurodollar market appearing on
the applicable page of the
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TELERATE rate reporting system at approximately 11:00 a.m., Central
Time, on the Interest Rate Determination Date immediately prior to the
beginning of the Interest Period for the corresponding LIBOR Loan, for
the number of months comprised therein and in an amount equal to the
amount of such LIBOR Loan to be outstanding during such Interest
Period. Without limiting the provisions of Section 2.11.3, in the
event that prior to the Term Loan Maturity Date TELERATE quotes for
Base LIBOR are discontinued or become unascertainable, the Euro Loan
Agent may (1) determine Base LIBOR with reference to the rate per
annum for offered Euro deposits in the interbank Eurodollar market
appearing on the applicable Reuters Screen at approximately 11:00
a.m., Central Time, on the Interest Rate Determination Date
immediately prior to the beginning of the Interest Period for the
corresponding LIBOR Loan, for the number of months comprised therein
and in an amount equal to the amount of such LIBOR Loan to be
outstanding during such Interest Period (and if more than one such
rate appears, the Euro Loan Agent may use the arithmetic mean of such
rates), or (2) designate any other comparable resource for use in
determining Base LIBOR for purposes hereof.
"Base Rate" shall mean, for any period, the greater of (i) the
fluctuating rate of interest per annum from time to time established by AmSouth
as its "prime rate", regardless of whether published or publicly announced, or
(ii) a fluctuating rate of interest per annum equal to one-half of one
percentage point (0.5%) in excess of the Federal Funds Rate in effect from time
to time. Each change in the Base Rate shall be effective as of the opening of
business on the day such change occurs. The parties hereto acknowledge that the
rate established by AmSouth as its "prime rate" is an index or base rate and is
not necessarily the lowest rate charged to its customers or other banks. In the
event that AmSouth discontinues or abandons the practice of establishing a prime
rate, or should the same become unascertainable, the Administrative Agent shall
designate a comparable reference rate for use in determining the Base Rate for
purposes hereof.
"Base Rate Loans" shall mean Revolving Loans and Term Loans
bearing interest at rates determined by reference to the Base Rate.
"Borrowing" shall mean (1) a borrowing consisting of Revolving
Loans made to the Domestic Borrower on the same day by the Lenders ratably
according to their respective Commitments pursuant to the provisions of Section
2.2.1, (2) a borrowing consisting of Domestic Term Loans made to the Domestic
Borrower on the same day by the Lenders ratably according to their respective
Commitments pursuant to the provisions of Section 2.2.2(a), (3) a borrowing
consisting of Euro Term Loans made to the Euro Borrower on the same day by the
Lenders ratably according to their respective Commitments pursuant to the
provisions of Section 2.2.2(b), and (4) a borrowing consisting of a Swing Line
Loan made to the Domestic Borrower by the Swing Line Lender pursuant to the
provisions of Section 2.2.7.
"Business Day" shall mean any day on which the Tennessee and
Georgia offices of both Agents are open to conduct general banking business and
on which the Federal Reserve System is open to conduct the business conducted by
it; provided that if such day relates to a Borrowing or continuation of, a
payment or prepayment of principal of or interest on, or the Interest Period
for, a Euro Term Loan Borrowing or a notice by the Euro Borrower with respect
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to any such Borrowing, continuation, payment, prepayment or Interest Period,
that is also a day on which the Trans-European Automated Real-Time Gross
settlement Express Transfer system (commonly known as TARGET) or any successor
system is open.
"Capital Expenditures" shall mean, as to any Person for any
period, the aggregate capital expenditures recorded by such Person and its
Subsidiaries on a consolidated basis in conformity with GAAP, including charges
in respect of Capitalized Lease Obligations exclusive of imputed interest on
such Capitalized Lease Obligations; provided, however, that for purposes of
determining Capital Expenditures for the Domestic Borrower and its Subsidiaries
on a consolidated basis, there shall be excluded therefrom any Capital
Expenditures attributable solely to the making of Permitted Acquisitions.
"Capitalization" shall mean, for the Domestic Borrower and its
Subsidiaries on a consolidated basis, the sum of Consolidated Funded
Indebtedness plus shareholders' equity.
"Capitalized Lease" shall mean, as to any Person, any lease of
property by such Person as lessee that would be capitalized on a balance sheet
of such Person prepared in conformity with GAAP.
"Capitalized Lease Obligations" shall mean, as to any Person,
the capitalized amount of the obligations of such Person and its Subsidiaries
under all Capitalized Leases.
"Cash Equivalents" shall mean, at any time,
(a) certificates of deposit or time deposits having a maturity not
exceeding ninety (90) days, and demand deposits, that are fully insured by
the Federal Deposit Insurance Corporation and that are maintained with
commercial banks organized and existing under, or chartered or otherwise
qualified to do business under, the laws of the United States of America or
any State thereof or the District of Columbia;
(b) Government Obligations having a maturity not exceeding ninety (90)
days;
(c) commercial paper rated at least A-1 by S&P or P-1 by Moody's,
having a maturity not exceeding ninety (90) days;
(d) certificates of deposit or time deposits maintained with (i) the
Lenders or (ii) other commercial banks having capital and undivided surplus
of at least $500 million and issuing commercial paper rated as described in
the preceding clause (c) and organized and existing under, or chartered or
otherwise qualified to do business under, the laws of the United States of
America or any State thereof or the District of Columbia, having a maturity
not exceeding ninety (90) days;
(e) repurchase agreements or investment contracts having a maturity
not exceeding ninety (90) days with a financial institution insured by the
Federal Deposit Insurance Corporation, or any broker or dealer (as defined
in the Securities Exchange Act
4
of 1934) that is a dealer in government bonds and that is recognized by
trades with and reports to, a Federal Reserve Bank as a primary dealer in
government securities; provided that in any case (i) collateral is pledged
for the repurchase agreement or investment contract, which collateral
consists of (A) Government Obligations or evidences of ownership of
proportionate interests in future interest and principal payments on
Government Obligations held by a bank or trust company as custodian, under
which the owner of the investment is the real party in interest and has the
right to proceed directly and individually against the obligor on such
obligations, and which underlying obligations are held in a segregated
account and not available to satisfy any claim of the custodian or any
person claiming through the custodian or to whom the custodian may be
obligated or (B) evidences of indebtedness issued by any of the following:
Bank of Cooperatives, Export-Import Bank of the United States, Farmers Home
Administration, Federal Financing Bank, Federal Home Loan Bank System,
Federal Home Loan Mortgage Corporation (including participation
certificates), Federal Housing Administration, Federal Farm Credit Banks,
Federal National Mortgage Association, Government National Mortgage
Association, Inter-American Development Bank, International Bank for
Reconstruction and Development, Small Business Administration or any other
agency or instrumentality of the United States of America created by an act
of Congress that is substantially similar to the foregoing in its legal
relationship to the United States of America, (ii) the current market value
of the collateral securing the repurchase agreement or investment contract
is at least equal to the amount of the repurchase agreement or investment
contract and (iii) the current market value of the collateral is determined
not less frequently than monthly;
(f) investments in money market funds substantially all of whose
assets consist of securities of the types described in the foregoing
clauses (b) through (e);
(g) investments in obligations the return with respect to which is
excludable from gross income under Section 103 of the Code, having a
maturity of not more than six (6) months or providing the holder the right
to put such obligations for purchase at par upon not more than twenty-eight
(28) days' notice, and which are rated at least A-1 by S&P or P-1 by
Moody's;
(h) investments in tax free money market funds all of whose assets
consist of securities of the types described in the foregoing clause (g);
and
(i) investments, redeemable upon not more than seven (7) days' notice,
in money market preferred municipal bond funds that are rated at least AAA
by S&P or Aaa by Moody's.
"Closing Date" shall mean May 1, 2003.
"Code" shall mean the Internal Revenue Code of 1986.
"Collateral" shall mean, collectively, the Domestic Collateral
and the Euro Collateral.
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"Commission" shall mean the Securities and Exchange Commission
or any successor entity.
"Commitment Fees" shall have the meaning given such term in
Section 2.8.3.
"Commitments" shall mean the Revolving Credit Commitments and
the Term Loan Commitments, which collectively are in the aggregate amount set
forth in Section 2.1 and in the case of each Lender are in the initial amount
set forth with such Lender's signature on this Agreement or the Assignment and
Acceptance pursuant to which such Lender became a party hereto.
"Commonly Controlled Entity" shall mean a Person that is under
common control with the Borrower within the meaning of subsection 414(b), (c),
(m), (n) or (o) of the Code.
"Consolidated Funded Indebtedness" shall mean, for the
Domestic Borrower and its Subsidiaries on a consolidated basis, all Indebtedness
that constitutes (a) indebtedness for borrowed money or for notes, debentures or
other debt securities, (b) notes payable and drafts accepted representing
extensions of credit regardless of whether the same represent obligations for
borrowed money, (c) reimbursement obligations in respect of letters of credit
issued for the account of Domestic Borrower or a Subsidiary thereof (including
any such obligations in respect of any drafts drawn thereunder), (d) liabilities
for all or any part of the deferred purchase price of property or services, (e)
liabilities secured by any Lien on any property or asset owned or held by the
Domestic Borrower or any of its Subsidiaries regardless of whether the
Indebtedness secured thereby shall have been assumed by or is a primary
obligation of the Domestic Borrower or such Subsidiary, (f) Capitalized Lease
Obligations, (g) Off-Balance Sheet Liabilities, and (h) without duplication, all
Contingent Obligations the primary obligation of which is Indebtedness of the
type described in clauses (a) through (g) above; provided, however, that
Consolidated Funded Indebtedness shall not include any unsecured current
liabilities incurred in the ordinary course of business and not represented by
any note, bond, debenture or other instrument.
"Consolidated Net Income" shall mean, for the Domestic
Borrower and its Subsidiaries on a consolidated basis for any period, the net
income (or loss) after taxes of the Domestic Borrower and its Subsidiaries on a
consolidated basis for such period taken as a single accounting period,
determined in conformity with GAAP, subject to customary exclusions with respect
to extraordinary and nonrecurring items.
"Contingent Obligations" shall mean, as to any Person, any
contingent obligation calculated in conformity with GAAP, and in any event shall
include (without duplication) all indebtedness, obligations or other liabilities
of such Person guaranteeing or in effect guaranteeing the payment or performance
of any indebtedness, obligation or other liability, whether or not contingent
(collectively, the "primary obligations"), of any other Person (the "primary
obligor") in any manner, whether directly or indirectly, including any
indebtedness, obligation or other liability of such Person, (a) to purchase any
such primary obligation or any property constituting direct or indirect security
therefor, (b) to advance or supply funds (i) for the purchase or payment of any
such primary obligation or (ii) to maintain working capital or equity
6
capital of the primary obligor or otherwise to maintain the net worth or
solvency of the primary obligor, (c) to purchase property, securities or
services primarily for the purpose of assuring the owner of any such primary
obligation of the ability of the primary obligor to make payment of such primary
obligation, or (d) otherwise to assure or hold harmless the owner of such
primary obligation against loss with respect thereto.
"Contractual Obligations" shall mean, as to any Person, any
and all indebtedness, obligations or other liabilities of such Person, now
existing or hereafter arising, whether due or not due, absolute or contingent,
liquidated or unliquidated, direct or indirect, express or implied, individually
or jointly with others, pursuant to the provisions of any document, instrument
or agreement to which such Person is a party or by which such Person or any of
its property is or may be bound or affected or pursuant to the provisions of any
security issued by such Person.
"Credit Fees" shall mean the credit fees payable as provided
in Section 2.8.
"Current Maturities of Long-Term Debt" shall mean, as of any
date of determination, that portion of Consolidated Funded Indebtedness that is
due and payable within the twelve (12) month period immediately following the
date of determination, calculated in conformity with GAAP.
"Default" shall mean any of the events specified in Section
11.1, regardless of whether any requirement for the giving of notice (and if
applicable, an opportunity to cure), the lapse of time or both has been
satisfied.
"Default Rate" shall mean the rate(s) per annum otherwise
applicable to Loans from time to time plus two percentage points (2.00%);
provided, however, that in no event shall any Default Rate exceed the Highest
Lawful Rate.
"Dollars" and "$" shall mean lawful money of the United States
of America.
"Dollar Equivalent" shall mean, on any date, with respect to
any amount denominated in Euros, the amount of Dollars that would be required to
purchase the amount of Euros on the date that is two Business Days prior to such
date based upon the spot selling rate quoted on the Reuters NFX page for the
sale of Euros in the London market, as determined by the Euro Loan Agent.
"Domestic Collateral" shall mean all property and interests in
property, presently owned or hereafter acquired or presently existing or
hereafter created by the Domestic Borrower, the Domestic Guarantors or NN Italy,
including any and all proceeds thereof, in which a security interest has been
granted in favor of the Administrative Agent for the ratable benefit of the
Lenders, whether under this Agreement or any other Loan Document.
"Domestic Guarantor" shall mean, collectively, each Subsidiary
(except for Euro Borrower) of the Domestic Borrower that has become a party to
this Agreement as a Domestic Guarantor by executing this Agreement or a
Supplement to Credit Agreement in the form of Exhibit 1.1A, and has delivered to
the Administrative Agent, for the ratable benefit of the
7
Lenders all promissory notes and other instruments evidencing intercompany
Indebtedness owed to such Subsidiary by any other Subsidiary of the Borrower,
endorsed to the order of the Administrative Agent.
"Domestic Obligations" shall mean, as to the Domestic
Borrower, all Indebtedness, obligations and other liabilities of the Domestic
Borrower of any kind and description owing to the Agents or the Lenders pursuant
to the provisions of this Agreement, the Notes and the other Loan Documents,
howsoever evidenced or acquired, whether now existing or hereafter arising, due
or not due, absolute or contingent, liquidated or unliquidated, direct or
indirect, express or implied, whether owed individually or jointly with others.
"Domestic Pledge Agreement" shall mean the Pledge and Security
Agreement, substantially in the form of Exhibit 4.1A, executed by the Domestic
Borrower in favor of the Administrative Agent and the Lenders.
"Domestic Stock Pledge Agreement" shall mean the Stock Pledge
and Security Agreement, substantially in the form of Exhibit 4.1B, executed by
the Domestic Borrower in favor of the Administrative Agent and the Lenders.
"Domestic Term Loan Commitments" shall mean, at any time, the
commitment of all the Lenders, collectively, to make Domestic Term Loans to the
Domestic Borrower in Dollars on the date hereof pursuant to the provisions of
Section 2.2.2, and the "Domestic Term Loan Commitment" of any Lender at any time
shall mean an amount equal to such Lender's Percentage multiplied by the then
effective aggregate Domestic Term Loan Commitments. The Domestic Term Loan
Commitments are in the aggregate amount set forth in Section 2.1.
"Domestic Term Loan Facility" shall mean the term loan
facility provided by the Lenders pursuant to the Domestic Term Loan Commitments
as more particularly set forth in Section 2.2.2.
"Domestic Term Loan Notes" shall mean the promissory notes,
substantially in the form of Exhibit 2.5B, executed by the Domestic Borrower in
favor of the Lenders, evidencing the indebtedness of the Domestic Borrower to
the Lenders in connection with the Domestic Term Loans.
"Domestic Term Loans" shall mean the term loans made by the
Lenders to the Domestic Borrower pursuant to Section 2.2.2.
"EBITDA" shall mean, for the Domestic Borrower and its
Subsidiaries on a consolidated basis for any period, after giving Pro Forma
Effect to any Asset Acquisition made during such period, the sum of Consolidated
Net Income, plus Interest Expense, plus any provision for taxes based on income
or profits that was deducted in computing Consolidated Net Income, plus
depreciation, plus amortization of intangible assets and other non-recurring
non-cash charges.
8
"Environmental Laws" shall mean all federal, state,
regional, county or local laws, statutes, rules, regulations or ordinances, now
or hereafter in effect, relating to the generation, recycling, use, reuse, sale,
storage, handling, transport, treatment or disposal of Hazardous Materials,
including the Comprehensive Environmental Response Compensation Liability Act of
1980, as amended by the Superfund Amendments and Reauthorization Act of 1986, 42
U.S.C.Β§9601 et seq., the Resource Conservation and Recovery Act of
1976, as amended by the Solid and Hazardous Waste Amendments of 1984, 42
U.S.C.Β§6901 et seq., the Toxic Substances Control Act, 15 U.S.C.Β§2601
et seq., the Hazardous Materials Transportation Act, 49 U.S.C.Β§1801,
et seq., the Clean Air Act, 42 U.S.C.Β§7401 et seq., the Clean Water Act
of 1977, 33 U.S.C.Β§1251 et seq., the Tennessee Hazardous Waste
Management Act of 1977, Tenn. Code Xxx.Β§00-000-000 et seq., the Tennessee
Hazardous Waste Management Act of 1983, Tenn. Code Xxx.Β§00-000-000 et
seq., and any rules, regulations and guidance documents promulgated or
published thereunder, and any state, regional, county or local statute, law,
rule, regulation or ordinance now or hereafter in effect that relates to public
health or safety, to the discharge, emission or disposal of Hazardous Materials
in or to air, water, land or groundwater, to the withdrawal or use of
groundwater, to the use, handling or disposal of asbestos, polychlorinated
biphenyls, petroleum, petroleum derivatives or by-products, other hydrocarbons
or urea formaldehyde, to the treatment, storage, disposal or management of
Hazardous Materials, to exposure to Hazardous Materials or to the
transportation, storage, disposal, management or release of gaseous or liquid
substances, and any regulation, order, injunction, judgment, declaration, notice
or demand issued thereunder.
"ERISA" shall mean the Employee Retirement Income Security Act
of 1974.
"Euro" or "Euros" means the single currency of the
participating member states of the European Union as constituted by the Treaty
on European Union and as referred to in the Economic and Monetary Union
legislation.
"Euro Collateral" shall mean all property and interests in
property, presently owned or hereafter acquired or presently existing or
hereafter created by the Euro Borrower, the Guarantors or NN Italy, including
any and all proceeds thereof, in which a security interest has been granted in
favor of the Administrative Agent for the ratable benefit of the Lenders,
whether under this Agreement or any other Loan Document.
"Euro Equivalent" shall mean, on any date, with respect to any
amount denominated in Dollars, the amount of Euros that could be purchased with
such amount of Dollars on the date that is two Business Days prior to such date
based upon the spot buying rate quoted on the Reuters NFX page for the purchase
of Euros in the London market, as determined by the Euro Loan Agent.
"Euro Loan Agent" shall mean SunTrust Bank or such successor
Euro Loan Agent as may be appointed by the Lenders pursuant to Section 12.10
hereof.
"Euro Obligations" shall mean, as to the Euro Borrower, all
Indebtedness, obligations and other liabilities of the Euro Borrower of any kind
and description owing to the Agents or the Lenders pursuant to the provisions of
this Agreement, the Notes and the Other
9
Loan Documents, howsoever evidenced or acquired, whether now existing or
hereafter arising, due or not due, absolute or contingent, liquidated or
unliquidated, direct or indirect, express or implied, whether owed individually
or jointly with others.
"Euro Pledge Agreement" shall mean the Pledge and Security
Agreement, substantially in the form of Exhibit 4.1A, executed by the Euro
Borrower in favor of the Administrative Agent and the Lenders.
"Euro Stock Pledge Agreement" shall mean the Stock Pledge and
Security Agreement, substantially in the form of Exhibit 4.1B, executed by the
Euro Borrower in favor of the Administrative Agent and the Lenders.
"Euro Term Loan Commitments" shall mean, at any time, the
commitment of all the Lenders, collectively, to make Euro Term Loans in Euros to
the Euro Borrower on the date hereof pursuant to the provisions of Section
2.2.2(b), and the "Euro Term Loan Commitment" of any Lender at any time shall
mean an amount equal to such Lender's Percentage multiplied by the then
effective aggregate Euro Term Loan Commitments. The Euro Term Loan Commitments
are in the aggregate amount set forth in Section 2.1.
"Euro Term Loan Facility" shall mean the term loan facility
provided by the Lenders pursuant to the Euro Term Loan Commitments as more
particularly set forth in Section 2.2.2(b).
"Euro Term Loans" shall mean the term loans made by the
Lenders to the Euro Borrower pursuant to Section 2.2.2(b).
"Euro Term Notes" shall mean the promissory notes,
substantially in the form of Exhibit 2.5D, executed by the Euro Borrower in
favor of the Lenders, evidencing the indebtedness of the Euro Borrower to the
Lenders in connection with the Euro Term Loans.
"Event of Default" shall mean any of the events specified in
Section 11.1, provided that any requirement for the giving of notice (and if
applicable, an opportunity to cure), the lapse of time or both has been
satisfied.
"Existing Liens" shall mean those certain Liens in existence
on the date hereof that are described on Schedules 7.17A and 7.17 B.
"Facilities" shall mean the Revolving Credit Facility, the
Euro Term Loan Facility, the Domestic Term Loan Facility and the Swing Line
Facility.
"Federal Funds Rate" shall mean, for any period, a fluctuating
interest rate per annum equal, for each day during such period, to the weighted
average of the rates on overnight federal funds transactions with members of the
Federal Reserve System arranged by federal funds brokers, as published for each
day (or, if such day is not a Business Day, for the immediately preceding
Business Day) by the Federal Reserve Bank of New York.
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"Financing Statement" shall mean any Uniform Commercial Code
financing statement filed in connection with this Agreement or any other Loan
Document.
"Fiscal Quarter" shall mean each of the accounting periods of
approximately three (3) months ending on March 31, June 30, September 30 and
December 31, respectively, of each year.
"Fiscal Year" shall mean the twelve (12) month period ending
on December 31 of each year.
"Fixed Charge Coverage Ratio" shall mean, for the Domestic
Borrower and its Subsidiaries on a consolidated basis, calculated as of any date
of determination for the most recent twelve (12) month period after giving Pro
Forma Effect to any Asset Acquisition made during such period, the ratio of (a)
the sum of EBITDA plus Rent Expense to (b) the sum of Interest Expense plus
Current Maturities of Long-Term Debt plus Rent Expense.
"Funded Indebtedness to Capitalization Ratio" shall mean, for
the Domestic Borrower and its Subsidiaries on a consolidated basis, as of any
date of determination, the ratio of Consolidated Funded Indebtedness to
Capitalization.
"Funded Indebtedness to EBITDA Ratio" shall mean, for the
Domestic Borrower and its Subsidiaries on a consolidated basis, calculated as of
any date of determination for the most recent twelve (12) month period after
giving Pro Forma Effect to any Asset Acquisition made during such period, the
ratio of Consolidated Funded Indebtedness to EBITDA.
"Funding Date" shall mean each of the respective dates on
which the funding of a Borrowing made under this Agreement occurs.
"GAAP" shall mean generally accepted accounting principles in
the United States of America in effect from time to time.
"Government Obligations" shall mean direct obligations of the
United States of America or obligations for the full and prompt payment of which
the full faith and credit of the United States of America are pledged.
"Governmental Authority" shall mean any nation, province,
state or other political subdivision thereof and any government or any natural
person or entity exercising executive, legislative, regulatory or administrative
functions of or pertaining to government.
"Guaranteed Domestic Obligations" shall mean all of the
Domestic Obligations guaranteed by the Domestic Guarantors pursuant to Article
5.
11
"Guaranteed Euro Obligations" shall mean all of the Euro
Obligations guaranteed by the Guarantors pursuant to Article 5.
"Guaranteed Obligations" shall mean all the Obligations of the
Borrower guaranteed by the Guarantors pursuant to Article 5.
"Guarantor" shall mean, collectively, each of the Domestic
Guarantors and the Domestic Borrower.
"Guaranty" shall mean the guaranty of the Obligations of the
Borrower set forth in Article 5.
"Hazardous Material" shall mean gasoline, motor oil, fuel oil,
waste oil, other petroleum or petroleum-based products, asbestos,
polychlorinated biphenyls, medical and infectious wastes and any chemical,
material or substance to which exposure is prohibited, limited or regulated by
any federal, state, county, local or regional authority or which, even if not so
regulated, is known to pose a hazard to health and safety, including but not
limited to substances and materials defined or designated as "hazardous
substances", "hazardous wastes", "pollutants", "contaminants", "hazardous
materials" or "toxic substances" under any Environmental Law.
"Highest Lawful Rate" shall mean, with respect to each Lender,
the maximum nonusurious interest rate, if any, that at any time or from time to
time may be contracted for, taken, reserved, charged or received on debts
outstanding hereunder or under the Notes, as the case may be, under the laws
applicable to such Lender that are presently in effect or, to the extent allowed
by law, under such applicable laws that may hereafter be in effect and that
allow a higher maximum nonusurious interest rate than applicable laws now allow.
"Indebtedness" shall mean, as to any Person, all items that in
conformity with GAAP would be shown on the balance sheet of such Person as a
liability and in any event shall include (without duplication) (a) indebtedness
for borrowed money or for notes, debentures or other debt securities, (b) notes
payable and drafts accepted representing extensions of credit whether or not
representing obligations for borrowed money, (c) reimbursement obligations in
respect of letters of credit issued for the account of such Person (including
any such obligations in respect of any drafts drawn thereunder), (d) liabilities
for all or any part of the deferred purchase price of property or services, (e)
liabilities secured by any Lien on any property or asset owned or held by such
Person regardless of whether the indebtedness secured thereby shall have been
assumed by or is a primary liability of such Person, (f) Capitalized Lease
Obligations, (g) Contingent Obligations, and (h) Off-Balance Sheet Liabilities.
"Interest Expense" shall mean, as to any Person for any
period, the aggregate interest expense and amortization of deferred loan costs
of such Person and its Subsidiaries on a consolidated basis for such period
(calculated without regard to any limitations on the payment thereof), imputed
interest on Capitalized Lease Obligations, commissions, discounts and other fees
and charges owed with respect to letters of credit and unused commitments and
net costs under interest rate protection agreements, all as determined in
conformity with GAAP.
12
"Interest Payment Date" shall mean, (a) with respect to any
Base Rate Loan or Swing Line Loan, the first day of each month, commencing on
the first day of the first month after the applicable Funding Date, and (b) with
respect to any LIBOR Loan, the last day of the Interest Period applicable to
such Loan.
"Interest Period" shall mean any interest period applicable to
a LIBOR Loan as determined pursuant to Section 2.11.1.
"Interest Rate Contracts" shall mean any interest rate swap
agreements, interest rate cap agreements, interest rate collar agreements,
interest rate insurance and other agreements or arrangements designed to provide
protection against fluctuations in interest rates, in each case between either
Borrower and any Lender, and in an aggregate notional amount at any time not to
exceed an amount equal to Consolidated Funded Indebtedness at such time.
"Interest Rate Determination Date" shall mean each date for
calculating LIBOR for purposes of determining the interest rate in respect of an
Interest Period, which in each case shall be the second (2d) Business Day prior
to the first (1st) day of the corresponding Interest Period.
"Investment" shall mean the making of any loan, advance,
extension of credit or capital contribution to, or the acquisition of any stock,
bonds, notes, debentures or other obligations or securities of, or the
acquisition of any other interest in or the making of any other investment in,
any Person.
"Irish Stock Pledge Agreement" shall mean the Stock Pledge and
Security Agreement, substantially in the form of Exhibit 4.1B, executed by NN
Italy in favor of the Administrative Agent and the Lenders.
"Italian Guaranty" shall mean, collectively, the Letter
Agreement executed by NN Italy and the letter of acceptance from the
Administrative Agent, substantially in the form of Exhibit 4.1C, pursuant to
which NN Italy guarantees to the Administrative Agent and the Lenders the
performance of the Obligations of the Borrower.
"Last Four Fiscal Quarters" shall mean, as of any date of
determination, the Fiscal Quarter ending on such date or otherwise then most
recently ended plus the immediately preceding three Fiscal Quarters.
"Lending Office" shall mean with respect to any Lender or any
Agent, the office of each such Lender or Agent at the address specified on the
signature pages hereto or in the Assignment and Acceptance pursuant to which it
became a Lender, or such other office as any such Lender or the Euro Loan Agent
from time to time may specify to the Borrower and the Administrative Agent.
"LIBOR" shall mean the rate per annum (rounded upwards, if
necessary, to the nearest whole one-eighth of 1%) equal to the product of Base
LIBOR times Statutory Reserves.
13
"LIBOR Loans" shall mean Revolving Loans and Term Loans
bearing interest at rates determined by reference to LIBOR.
"Lien" shall mean, as to any asset, (a) any lien, charge,
claim, mortgage, security interest, pledge, hypothecation or other encumbrance
of any kind with respect to such asset, (b) any interest of a vendor or lessor
under any conditional sale agreement, Capitalized Lease or other title retention
agreement relating to such asset, (c) any reservation, exception, encroachment,
easement, right-of-way, covenant, condition, restriction, lease or other title
exception affecting such asset, or (d) any assignment, deposit, preference,
priority or other security agreement or preferential arrangement of any kind or
nature whatsoever (including any conditional sale or other title retention
agreement, any financing lease having substantially the same economic effect as
any of the foregoing, and the filing of any financing statement under the
Uniform Commercial Code or comparable law of any jurisdiction).
"Loan Documents" shall mean this Agreement, the Notes, the
Interest Rate Contracts, the Security Documents and all other documents,
instruments and agreements now or hereafter executed or delivered pursuant
hereto or in connection herewith.
"Loans" shall mean Revolving Loans, Term Loans and Swing Line
Loans.
"Material Adverse Effect" and "Material Adverse Change" shall
mean a material adverse effect on, or a material adverse change in, (a) the
properties, business, prospects, operations, management or financial condition
of (i) the Borrower, the Domestic Guarantors and NN Italy, taken as a whole, or
(ii) Euro Borrower, its Subsidiaries that are Domestic Guarantors and NN Italy,
taken as a whole, or (b) the ability of any Borrower, any Guarantor or any of
their respective Subsidiaries to perform any of their respective obligations
under this Agreement, the Notes or the other Loan Documents to which it is a
party.
"Material Contract" shall mean each contract to which the
Domestic Borrower or any of its Subsidiaries is a party or a guarantor (or by
which it is bound) that requires payments (either to or for the benefit of, or
by or on behalf of, the Domestic Borrower or any of its Subsidiaries) in excess
of $10,000,000 in any twelve-month period (a) the cancellation, non-performance
or non-renewal of which by any party thereto would have a Material Adverse
Effect, or (b) pursuant to which the Domestic Borrower or any of its
Subsidiaries may incur Indebtedness for borrowed money or Capitalized Lease
Obligations.
"Maximum Guaranty Liability" shall mean the maximum liability
hereunder and under the Italian Guaranty of the respective Guarantors and NN
Italy permitted by Applicable Bankruptcy Law as provided in Section 5.2 hereof
and in the Italian Guaranty.
"Moody's" shall mean Xxxxx'x Investors Service, Inc.
and its successors.
"Multi-Employer Plan" shall mean any multiple employer plan,
as defined in Section 4001(a)(3) of ERISA, that is maintained by the Borrower,
any Guarantor, any of their respective Subsidiaries or a Commonly Controlled
Entity.
14
"NN, Inc. Stock Incentive Plan" shall mean the NN, Inc. Stock
Incentive Plan as amended, restated or modified from time to time, or any
successor stock option plan.
"NN Ireland" shall mean NN Euroball Ireland Limited, an Irish
company.
"NN Italy" shall mean Euroball S.p.A., an Italian company.
"Non-Guarantor Subsidiaries" shall mean the Subsidiaries of
the Domestic Borrower and the Guarantors listed on Schedule 7.1 and designated
as such thereon.
"Notes" shall mean the Revolving Notes, the Term Notes and the
Swing Line Note.
"Notice of Borrowing" shall mean a notice substantially in the
form of Exhibit 2.2.5 with respect to a proposed Borrowing of Revolving Loans.
"Notice of Conversion/Continuation" shall mean a notice
substantially in the form of Exhibit 2.4.2 annexed hereto with respect to a
proposed conversion or continuation, pursuant to Section 2.4, of (a) Revolving
Loans, Domestic Term Loans or Euro Term Loans bearing interest at a rate
determined by reference to one basis, to (b) Revolving Loans, Domestic Term
Loans or Euro Term Loans bearing interest at a rate determined by reference to
an alternative basis.
"Obligations" shall mean, as to any Person, all Indebtedness,
obligations and other liabilities of such Person of any kind and description
owing to the Agents or the Lenders pursuant to the provisions of this Agreement,
the Notes and the other Loan Documents, howsoever evidenced or acquired, whether
now existing or hereafter arising, due or not due, absolute or contingent,
liquidated or unliquidated, direct or indirect, express or implied, whether owed
individually or jointly with others.
"Off-Balance Sheet Liabilities" of any Person shall mean (i)
any repurchase obligation or liability of such Person with respect to accounts
or notes receivable sold by such Person, (ii) any liability of such Person under
any sale and leaseback transactions that do not create a liability on the
balance sheet of such Person, (iii) any Synthetic Lease Obligation or (iv) any
obligation arising with respect to any other transaction which is the functional
equivalent of or takes the place of borrowing but which does not constitute a
liability on the balance sheet of such Person.
"Operating Lease" shall mean, as to any Person, any lease of
property (whether real, personal or mixed) by such Person as lessee that is not
a Capitalized Lease.
"PBGC" shall mean the Pension Benefit Guaranty Corporation
established pursuant to subtitle A of Title IV of ERISA.
15
"Percentage" shall mean, as to each Lender, the percentage set
forth with such Lender's signature on this Agreement or the Assignment and
Acceptance pursuant to which such Lender became a party hereto.
"Permitted Acquisition" shall mean any Asset Acquisition by
any Borrower, any Guarantor or NN Italy with respect to which (a) the Borrower,
the Guarantors and NN Italy shall have complied with the provisions of Section
8.2.4, (b) the Borrower, such Guarantor or NN Italy is the surviving entity in
the transaction, (c) all assets acquired in the transaction are held or acquired
by the Borrower, such Guarantor or NN Italy, (d) at the time of such Asset
Acquisition and after giving Pro Forma Effect thereto and to any other Asset
Acquisition made during the then most recent twelve (12) month period, no
Default shall have occurred or be continuing or would result therefrom, and (e)
if either (i) the aggregate consideration paid or to be paid in connection with
such Asset Acquisition, inclusive of all Indebtedness incurred or assumed, is
equal to or greater than $5,000,000, or (ii) the aggregate consideration paid or
to be in connection with such Asset Acquisition, inclusive of all Indebtedness
incurred or assumed, together the aggregate consideration paid in connection
with all Asset Acquisitions occurring during the term of the Facilities for
which consent was not required, is equal to or greater than $15,000,000, the
Requisite Lenders shall have consented in writing to such Asset Acquisition,
which consent shall not be unreasonably withheld.
"Permitted Liens" shall mean Liens permitted pursuant to the
provisions of Section 9.2.
"Person" shall mean an individual, corporation, partnership,
limited partnership, limited liability company, limited liability limited
partnership, trust, business trust, association, joint stock company, joint
venture, pool, syndicate, sole proprietorship, unincorporated organization,
Governmental Authority or other form of entity not specifically listed herein.
"Plan" shall mean an employee pension benefit plan covered by
Title IV of ERISA that is maintained by the Borrower, any Guarantor, any of
their respective Subsidiaries or a Commonly Controlled Entity, and shall include
any Single Employer Plan or any Multi-Employer Plan.
"Pledge Agreements" shall mean, collectively, the Domestic
Pledge Agreement and the Euro Pledge Agreement.
"Pledged Notes" shall have the meaning given such term in the
Pledge Agreements.
"Pricing Tier Determination Date" shall mean the fifth (5th)
Business Day following each date on which the Domestic Borrower has delivered to
the Administrative Agent financial statements, financial reports, certificates
and other financial information complying with the requirements of Section 8.1.1
or 8.1.2 and containing information sufficient to enable a calculation of the
Funded Indebtedness to EBITDA Ratio for the purpose of determining the
Applicable Base Rate Margin, the Applicable LIBOR Margin and the Applicable
Commitment Fee Percentage pursuant to Section 2.10.
16
"Principal Obligor" shall mean, with respect to a specific
indebtedness or obligation, the Person creating, incurring, assuming or
suffering to exist such indebtedness or obligation without becoming liable for
same as a surety or guarantor.
"Pro Forma Effect" shall mean, in making any calculation
hereunder to which such term is applicable, including any calculation necessary
to determine whether the Domestic Borrower is in compliance with Section 10.1.2
or 10.1.3 or whether a Default would result from any Asset Acquisition, (a) any
Asset Acquisition made during the most recent twelve (12) month period (the
"Reference Period") ending on and including the date of determination (the
"Calculation Date") shall be assumed to have occurred on the first day of the
Reference Period, (b) Consolidated Funded Indebtedness, and the application of
proceeds therefrom, incurred or to be incurred in connection with any Asset
Acquisition made or to be made during the Reference Period shall be assumed to
have arisen or occurred on the first day of the Reference Period, (c) there
shall be excluded any Interest Expense in respect of Consolidated Funded
Indebtedness outstanding during the Reference Period that was or is to be
refinanced with proceeds of Indebtedness incurred or to be incurred in
connection with any Asset Acquisition made or to be made during the Reference
Period, (d) Interest Expense in respect of Consolidated Funded Indebtedness
bearing a floating rate of interest and assumed to have been incurred on the
first day of the Reference Period shall be calculated on the basis of the
average rate in effect under this Agreement for Base Rate Loans throughout the
period such Consolidated Funded Indebtedness is assumed to be outstanding, and
(e) Rent Expense shall include actual Rent Expense incurred by any Person,
operating unit or business acquired during the Reference Period, plus Rent
Expense projected for the twelve (12) month period following the date of actual
incurrence thereof in respect of any Operating Lease entered into or to be
entered into in connection with any Asset Acquisition made during the Reference
Period, which projected Rent Expense shall be deemed to have been incurred on
the first day of the Reference Period.
"Projections" means the financial projections provided by
Domestic Borrower to Administrative Agent, as the same may have been modified or
supplemented in a writing delivered to the Administrative Agent that is
expressly identified as a modification of or supplement to such financial
projections.
"Purchase Money Debt" shall mean (a) Indebtedness of the
Domestic Borrower or any of its Subsidiaries that, within thirty (30) days of
the purchase of equipment in which neither the Domestic Borrower nor any of its
Subsidiaries at any time prior to such purchase had any interest, is incurred to
finance part or all of (but not more than) the purchase price of such equipment,
and that bears interest at a rate per annum that is commercially reasonable at
the time, and (b) Indebtedness that constitutes a renewal, extension, refunding
or refinancing of, but not an increase in the principal amount of, Purchase
Money Debt that is such by virtue of clause (a), is binding only upon the
obligor or obligors under the Purchase Money Debt being renewed, extended or
refunded and bears interest at a rate per annum that is commercially reasonable
at the time.
17
"Rent Expense" shall mean, as to any Person for any period,
the aggregate rent and lease expenses recorded by such Person and its
Subsidiaries on a consolidated basis in conformity with GAAP pursuant to any
Operating Lease.
"Reportable Event" shall mean any of the events set forth
under Section 4043(b) of ERISA or the PBGC regulations thereunder.
"Requirement of Law" shall mean, as to any Person (a) the
partnership agreement, charter, certificate of incorporation, articles of
incorporation, bylaws, operating agreement or other organizational or governing
documents of such Person, (b) any federal, state or local law, treaty,
ordinance, rule or regulation, and (c) any order, decree or determination of a
court, arbitrator or other Governmental Authority; in each case applicable to or
binding upon such Person or any of its property or to which such Person or any
of its property is subject.
"Requisite Lenders" shall mean, as of any date of
determination, Lenders having at least sixty-six and two-thirds percent (66
2/3%) of the Commitments.
"Responsible Officer" shall mean, as to any Person, either (a)
its president or chief executive officer, or (b) with respect to financial
matters, its president, chief executive officer, chief financial officer, chief
accounting officer or any vice president designated in writing by the chief
executive officer to the Administrative Agent.
"Restricted Payments" shall mean, as to any Person for any
period:
(a) dividends, other distributions and other payments or
deliveries of property on account of the capital stock of or other
ownership interests in, or any warrants, options or other rights in
respect of any capital stock of or other ownership interests in, such
Person or its Subsidiaries, now or hereafter outstanding, that are
recorded by such Person and its Subsidiaries on a consolidated basis
(excluding any such dividends, distributions and other payments made
solely to such Person or a wholly-owned Subsidiary of such Person by a
Subsidiary of such Person); provided, however,
"Restricted Payments" shall include any such dividends, distributions
and other payments to Euro Borrower from any of its Subsidiaries.
(b) amounts paid to purchase, redeem, retire or otherwise acquire
for value any of the capital stock of or other ownership interests in,
or any warrants, options or other rights in respect of the capital
stock of or other ownership interests in, such Person or its
Subsidiaries, now or hereafter outstanding (excluding any such amounts
paid solely to such Person or a wholly-owned Subsidiary of such Person
by a Subsidiary of such Person),
(c) any assets segregated or set apart by such Person or any of
its Subsidiaries (including any money or property deposited with a
trustee or other paying agent) for a sinking or analogous fund for the
purchase, redemption or retirement or other acquisition of any capital
stock of or other ownership interests in, or any warrants, options or
other rights in respect of any capital stock of or other ownership
interests in, such Person or its Subsidiaries, now or hereafter
outstanding (excluding any assets so segregated or set
18
apart with respect to any stock, warrants, options or other rights
held by a wholly-owned Subsidiary of such Person),
(d) payments made or required to be made by such Person with
respect to any stock appreciation rights plan, equity incentive or
achievement plan or any similar plan and any assets segregated or set
apart for such purposes (including any money or property deposited
with a trustee or other paying agent), and
(e) any payment, purchase, redemption or acquisition of
Subordinated Indebtedness and any assets segregated or set apart for
such purposes (including any money or property deposited with a
trustee or other paying agent), excluding, however, regularly
scheduled payments of interest made according to the stated terms of
such Subordinated Indebtedness;
all as determined in conformity with GAAP.
"Revolving Commitment Period" shall mean that period
commencing on the date hereof and continuing to, but not including, the
Revolving Commitment Period Expiration Date.
"Revolving Commitment Period Expiration Date" shall mean March
1, 2005.
"Revolving Credit Commitments" shall mean, at any time, the
commitment of all the Lenders, collectively, to make Revolving Loans to the
Domestic Borrower during the Revolving Commitment Period pursuant to the
provisions of Section 2.2, and the "Revolving Credit Commitment" of any Lender
at any time shall mean an amount equal to such Lender's Percentage multiplied by
the then effective aggregate Revolving Credit Commitments. The Revolving Credit
Commitments are in the aggregate amount set forth in Section 2.1.
"Revolving Credit Facility" shall mean the revolving credit
facility provided by the Lenders pursuant to the Revolving Credit Commitments as
more particularly set forth in Section 2.2.1.
"Revolving Loans" shall mean the revolving loans made by the
Lenders to the Domestic Borrower pursuant to the provisions of Section 2.2.1.
"Revolving Notes" shall mean the promissory notes,
substantially in the form of Exhibit 2.5A, executed by the Domestic Borrower in
favor of the Lenders, evidencing the indebtedness of the Domestic Borrower to
the Lenders in connection with the Revolving Loans.
"S&P" shall mean Standard & Poor's Corporation and its
successors.
"SKF" shall mean AB SKF, a Swedish company.
"SKF-Veenendaal Acquisition" shall mean the acquisition by NN
Netherlands B.V., a Dutch company of the tapered roller operation of SKF located
in Veenendaal, Holland.
19
"Security Documents" shall mean the Pledge Agreements, the
Stock Pledge Agreements, the Italian Guaranty and all documents, instruments and
agreements now or hereafter executed or delivered pursuant thereto or in
connection therewith.
"Single Employer Plan" shall mean any Plan that is not a
Multi-Employer Plan.
"Solvent" shall mean, with respect to any Person on any
particular date, that on such date (a) the fair value of the assets of such
Person (both at fair valuation and at present fair saleable value) is, on the
date of determination, greater than the total amount of liabilities, including
contingent and unliquidated liabilities, of such Person, (b) such Person is able
to pay all liabilities of such Person as they mature, and (c) such Person does
not have unreasonably small capital with which to carry on its business, after
giving due consideration to the nature of the business in which such Person is
engaged. In computing the amount of contingent or unliquidated liabilities at
any time, such liabilities will be computed at the amount that, in light of all
the facts and circumstances existing at such time, represents the amount that
can be reasonably expected to become an actual or matured liability.
"Statutory Reserves" shall mean a fraction (expressed as a
decimal), the numerator of which is the number one and the denominator of which
is the number one minus the aggregate of the maximum reserve percentages
(including any marginal, special, emergency or supplemental reserves), expressed
as a decimal, established by the Federal Reserve Board and/or any other banking
authority to which any Lender or any member bank of the Federal Reserve System
is subject with respect to LIBOR, for Eurocurrency Liabilities (as defined in
Regulation D of the Federal Reserve Board). Such reserve percentages shall
include those imposed under such Regulation D. LIBOR Loans shall be deemed to
constitute Eurocurrency Liabilities and as such shall be deemed to be subject to
such reserve requirements without benefit of or credit for proration, exceptions
or offsets that may be available from time to time to the Lenders under such
Regulation D. Statutory Reserves shall be adjusted automatically on and as of
the effective date of any change in any reserve percentage.
"Stock Pledge Agreements" shall mean, collectively, the Euro
Stock Pledge Agreement, the Irish Stock Pledge Agreement and the Domestic Stock
Pledge Agreement.
"Subordinated Indebtedness" shall mean Indebtedness of the
Domestic Borrower and its Subsidiaries that is subordinated in right of payment
to the Obligations on terms no less favorable to the Lenders than those set
forth on Exhibit 1.1B attached hereto.
"Subsidiary" shall mean, as to any Person (a) a corporation,
limited liability company or other entity of which shares of stock or other
ownership interests having ordinary voting power (other than stock having such
power only by reason of the occurrence of a contingency) to elect a majority of
the board of directors or other managers thereof are at the time owned, or the
management of which is otherwise controlled, directly or indirectly, through one
or more intermediaries, or both, by such Person, or (b) a partnership in which
such Person is a general partner or the management of which is otherwise
controlled, directly or indirectly, through one or more intermediaries or both,
by such Person.
20
"Swing Line Commitment" shall mean the commitment of the Swing
Line Lender to make Swing Line Loans pursuant to Section 2.2.7.
"Swing Line Facility" shall mean the swing line credit
facility provided by the Swing Line Lender pursuant to the Swing Line Commitment
as more particularly set forth in Section 2.2.7.
"Swing Line Lender" shall mean AmSouth and any other financial
institution that, subject to approval by the Administrative Agent and the
Domestic Borrower, agrees to become a party to this Agreement and to make Swing
Line Loans pursuant to Section 2.2.7. As used herein and in the other Loan
Documents, "Lender" shall include the Swing Line Lender except to the extent
that the context requires otherwise.
"Swing Line Loans" shall mean the loans made by the Swing Line
Lender pursuant to Section 2.2.7.
"Swing Line Note" shall mean the promissory note, in
substantially the form of Exhibit 2.5C, executed by the Domestic Borrower in
favor of the Swing Line Lender, evidencing the indebtedness of the Domestic
Borrower to the Swing Line Lender in connection with the Swing Line Loans.
"Synthetic Lease" shall mean a lease transaction under which
the parties intend that (i) the lease will be treated as an "operating lease" by
the lessee pursuant to Statement of Financial Accounting Standards No. 13, as
amended and (ii) the lessee will be entitled to various tax and other benefits
ordinarily available to owners (as opposed to lessees) of like property.
"Synthetic Lease Obligations" shall mean, with respect to any
Person, the sum of (i) all remaining rental obligations of such Person as lessee
under Synthetic Leases which are attributable to principal and, without
duplication, (ii) all rental and purchase price payment obligations of such
Person under such Synthetic Leases assuming such Person exercises the option to
purchase the lease property at the end of the lease term.
"Term Loan Commitments" shall mean, collectively, the Domestic
Term Loan Commitments and the Euro Term Loan Commitments.
"Term Loan Maturity Date" shall mean May 1, 2008.
"Term Loan Notes" shall mean, collectively, the Domestic Term
Notes and the Euro Term Notes.
"Term Loans" shall mean, collectively, the Domestic Term Loans
and the Euro Term Loans.
"UCC" shall mean the Uniform Commercial Code as in effect in
the State of Tennessee or any other applicable jurisdiction, as the context may
require.
21
1.2. Accounting and Commercial Terms. As used in this Agreement, all
accounting terms used but not otherwise defined herein shall have the respective
meanings assigned to them in conformity with GAAP. All terms used but not
otherwise defined herein that are defined or used in Article 9 of the UCC shall
have the respective meanings assigned to them in such Article.
1.3. General Construction. As used in this Agreement, the masculine,
feminine and neuter genders and the plural and singular numbers shall be deemed
to include the others in all cases in which they would so apply. "Includes" and
"including" are not limiting, and shall be deemed to be followed by "without
limitation" regardless of whether such words or words of like import in fact
follow same. The word "or" is not intended and shall not be construed to be
exclusive.
1.4. Defined Terms; Headings. The use of defined terms in the Loan
Documents is for convenience of reference and shall not be deemed to be limiting
or to have any other substantive effect with respect to the persons or things to
which reference is made through the use of such defined terms. Article and
section headings and captions in the Loan Documents are included in such Loan
Documents for convenience of reference and shall not constitute a part of the
applicable Loan Documents for any other purpose. 1.5. References to this
Agreement and Parts Thereof. As used in this Agreement, unless otherwise
specified the words "hereof," "herein" and "hereunder" and words of similar
import shall refer to this Agreement, including all schedules and exhibits
hereto, as a whole, and not to any particular provision of this Agreement, and
the words "Article", "Section", "Schedule" and "Exhibit" refer to articles,
sections, schedules and exhibits of or to this Agreement.
1.6. Documentary References. Any reference herein to any instrument,
document or agreement, by whatever terminology used, shall be deemed to include
any and all amendments, modifications, supplements, extensions, renewals,
substitutions and/or replacements thereof as the context may require.
1.7. Legal References. Any reference herein to any law shall be a reference
to such law as in effect from time to time and shall include any rules and
regulations promulgated or published thereunder and published interpretations
thereof.
ARTICLE 2.
LOANS
2.1. Commitments.
2.1.1. Amounts of Commitments.
(a) The aggregate amount of the Revolving Credit Commitments
shall be U.S. $30,000,000.
22
(b) The aggregate amount of the Domestic Term Loan Commitments
shall be U.S. $30,405,342.
(c) The aggregate amount of the Euro Term Loan Commitments
shall be (euro)26,283,000.
2.1.2. Voluntary Reductions of Revolving Credit Commitments. The
Domestic Borrower shall have the right, at any time and from time to time,
to terminate in whole or permanently reduce in part, without premium or
penalty, the Revolving Credit Commitments in an amount up to the amount by
which the Revolving Credit Commitments exceed the aggregate amount of the
then outstanding Revolving Loans. The Domestic Borrower shall give not less
than ten (10) Business Days' prior written notice to the Administrative
Agent designating the date (which shall be a Business Day) of such
termination or reduction and the amount of any reduction. Promptly after
receipt of a notice of such termination or reduction, the Administrative
Agent shall notify each Lender of the proposed termination or reduction.
Such termination or reduction of the Revolving Credit Commitments shall be
effective on the date specified in the Domestic Borrower's notice and shall
reduce the Revolving Credit Commitment of each Lender in proportion to its
Percentage of the Revolving Credit Commitments. Any such reduction of the
Revolving Credit Commitments shall be in a minimum amount of $1,000,000 and
in integral multiples of $500,000.
2.2. Loans.
2.2.1. Commitment to Make Revolving Loans. Subject to all of the terms
and conditions of this Agreement (including the conditions set forth in
Sections 6.1 and 6.2) and in reliance upon the representations and
warranties of the Borrower herein set forth, each Lender hereby severally
agrees to make Revolving Loans to the Domestic Borrower from time to time
during the Revolving Commitment Period, for the purposes identified in
Section 2.7; provided, however, that in no event shall (a) the aggregate
principal amount of Revolving Loans made by any Lender outstanding at any
time exceed such Lender's Revolving Credit Commitment, or (b) the aggregate
principal amount of Revolving Loans made by all Lenders and the Swingline
Loans made by the Swing Line Lender that are outstanding at any time exceed
the Revolving Credit Commitments. Each Lender's Revolving Credit Commitment
shall expire on the Revolving Commitment Period Expiration Date, and all
Revolving Loans shall be paid in full no later than the Revolving
Commitment Period Expiration Date.
2.2.2. Commitment to Make Term Loans.
(a) Domestic Term Loans. Subject to all of the terms and
conditions of this Agreement (including the conditions set forth in
Sections 6.1 and 6.2) in reliance upon the representations and
warranties of the Borrower herein set forth, each Lender hereby
severally agrees to make Domestic Term Loans to the Domestic Borrower
on the date hereof and for the purposes identified in Section 2.7;
provided, however, in no event shall (a) the aggregate principal amount
of the Domestic Term Loans made by any Lender outstanding at any time
23
exceed such Lender's Domestic Term Loan Commitment, or (b) the
aggregate principal amount of the Domestic Term Loans outstanding at
any time exceed the Domestic Term Loan Commitments. All Domestic Term
Loans shall be paid in full no later than the Term Loan Maturity Date.
(b) Euro Term Loans. Subject to all of the terms and
conditions of this Agreement (including the conditions set forth in
Sections 6.1 and 6.2) in reliance upon the representations and
warranties of the Borrower herein set forth, each Lender hereby
severally agrees to make Euro Term Loans to the Euro Borrower on the
date hereof and for the purposes identified in Section 2.7; provided,
however, in no event shall (a) the aggregate principal amount of the
Euro Term Loans made by any Lender outstanding at any time exceed such
Lender's Euro Term Loan Commitment, or (b) the aggregate principal
amount of the Euro Term Loans outstanding at any time exceed the Euro
Term Loan Commitments. All Euro Term Loans shall be paid in full no
later than the Term Loan Maturity Date.
2.2.3. Lenders' Obligations Several; Proportionate Loans. The
obligations of the Lenders to make Revolving Loans under Section 2.2.1 and
Term Loans under Section 2.2.2 shall be several and not joint and, subject
to Section 2.11.4, all Revolving Loans and Term Loans under this Agreement
shall be made by the Lenders simultaneously and proportionately to their
respective Percentages of the Commitments. It is understood and agreed that
the failure of any Lender to make its Revolving Loan as part of any
Borrowing under Section 2.2.1 or its Term Loans as part of any Borrowing
under Section 2.2.2 shall not relieve any other Lender of its obligation to
make its Revolving Loan as provided in Section 2.2.1 or its Term Loans
under Section 2.2.2. None of the Agents nor any Lender shall be responsible
for the failure of any other Lender to make a Revolving Loan or Term Loans
as provided herein nor shall the Commitment of any Lender be increased as a
result of the default by any other Lender in such other Lender's obligation
to make Revolving Loans or Term Loans hereunder.
2.2.4. Revolving Credit; Minimum Borrowings. Amounts borrowed
by the Domestic Borrower under the Revolving Credit Commitments may be
prepaid and reborrowed from time to time to during the Revolving
Commitment Period. The aggregate amount of Revolving Loans made on any
Funding Date shall be in integral multiples of $100,000.
2.2.5. Notice of Borrowing.
(a) Delivery of Notice. Whenever the Domestic Borrower
desires to borrow under Section 2.2.1, it shall deliver to the
Administrative Agent a Notice of Borrowing no later than 11:00 a.m.
(Central time) at least one (1) Business Day in advance of the
proposed Funding Date (in the case of Base Rate Loans) or three (3)
Business Days in advance of the proposed Funding Date (in the case of
LIBOR Loans). The Notice of Borrowing shall specify (i) the proposed
Funding Date (which shall be a Business Day), (ii) the amount of the
proposed Borrowing, (iii) whether the proposed Borrowing shall be in
the form of Base Rate Loans or LIBOR Loans, and (iv) in the case of
LIBOR Loans, the requested Interest Period. In lieu of delivering a
Notice of Borrowing, the Domestic Borrower may give the Administrative
Agent telephonic notice by the required time of notice of any proposed
Borrowing under this Section 2.2.5; provided, however, that
such notice shall be promptly confirmed in writing by delivery of a
Notice of Borrowing to the
24
Administrative Agent on or prior to the Funding Date of the requested
Revolving Loans. The execution and delivery of each Notice of
Borrowing shall be deemed a representation and warranty by the
Domestic Borrower that the requested Revolving Loans may be made in
accordance with, and will not violate the requirements of, this
Agreement, including those set forth in Section 2.2.1.
(b) No Liability for Telephonic Notices. Neither any Agent nor
any Lender shall incur any liability to the Domestic Borrower in
acting upon any telephonic notice given pursuant to this Section 2.2.5
that such Agent or Lender believes in good faith to have been given by
a duly authorized officer or other person authorized to borrow on
behalf of the Domestic Borrower or for otherwise acting in good faith
under this Section 2.2.5 and, upon the funding of Revolving Loans by
the Lenders in accordance with this Agreement pursuant to any
telephonic notice, the Domestic Borrower shall have effected a
Borrowing of Revolving Loans hereunder.
(c) Notice Irrevocable. A Notice of Borrowing for LIBOR Loans (or
a telephonic notice in lieu thereof) shall be irrevocable on and after
the related Interest Rate Determination Date, and the Domestic
Borrower shall be bound to make a Borrowing in accordance therewith.
2.2.6. Disbursement of Funds.
(a) Promptly after receipt of a Notice of Borrowing (or
telephonic notice in lieu thereof), the Administrative Agent shall
notify each Lender of the proposed Borrowing in writing, or by
telephone promptly confirmed in writing. Each Lender shall make the
amount of its Revolving Loan available to the Administrative Agent, in
immediately available funds, at the Lending Office of the
Administrative Agent, not later than 11:00 a.m. (Central time) on the
Funding Date. The Administrative Agent shall make the proceeds of such
Revolving Loans available to the Domestic Borrower on such Funding Date
by causing an amount of immediately available funds equal to the
proceeds of all such Revolving Loans received by the Administrative
Agent to be credited to the account of the Domestic Borrower at such
office of the Administrative Agent.
(b) On the Closing Date, each Lender shall make the amount of
its Euro Term Loan available to the Euro Loan Agent, in immediately
available funds in Euros, at the Lending Office of the Euro Loan Agent,
not later than 11:00 a.m. (Central time) on such Date. The Euro Loan
Agent shall make the proceeds of such Euro Term Loan available to the
Euro Borrower on the Closing Date by causing an amount of immediately
available funds equal to the proceeds of all such Euro Term Loans
received by the Euro Loan Agent to be credited to the account of the
Euro Borrower at such office of the Euro Loan Agent.
(c) On the Closing Date, each Lender shall make the amount of
its Domestic Term Loan available to the Administrative Agent, in
immediately available funds, at the Lending Office of the
Administrative Agent, not later than 11:00 a.m. (Central time) on such
Date. The Administrative Agent shall make the proceeds of such Domestic
Term Loan available to the Domestic Borrower on the Closing Date by
causing an amount of
25
immediately available funds equal to the proceeds of all such Domestic
Term Loans received by the Administrative Agent to be credited to the
account of the Domestic Borrower at such office of the Administrative
Agent.
2.2.7. Swing Line Loans.
(a) Commitment to Make Swing Line Loans. Subject to all of
the terms and conditions of this Agreement (including the conditions
set forth in Sections 6.1 and 6.2 and the limitations
set forth in Section 2.2.1), and in reliance upon the
representations and warranties of the Borrower herein set forth and
the agreements of the other Lenders set forth in subsections
(c) and (d) of this Section 2.2.7, the Swing Line
Lender hereby agrees to make Swing Line Loans to the Domestic Borrower
from time to time during the Revolving Commitment Period, in an
aggregate principal amount not to exceed $5,000,000 outstanding at any
time, for the purposes identified in Section 2.7. Amounts
borrowed by the Domestic Borrower under the Swing Line Commitment may
be prepaid and reborrowed from time to time during the Revolving
Commitment Period. The Swing Line Lender's commitment to make Swing
Line Loans as provided in this subsection 2.2.7(a) shall expire
on the Revolving Commitment Period Expiration Date, and all Swing Line
Loans shall be paid in full no later than the Revolving Commitment
Period Expiration Date.
(b) Funding Procedures for Swing Line Loans. Except to the
extent that funding of Swing Line Loans is being administered through
an automated cash management system mutually approved in writing by
the Domestic Borrower and the Swing Line Lender, the Domestic Borrower
shall give to the Swing Line Lender written notice (or oral notice to
be confirmed promptly in writing) of a proposed Swing Line Loan
Borrowing, specifying the amount of the requested Swing Line Loan, not
later than 11:00 a.m., Central time, on the Business Day of the
proposed Borrowing. Each request for a Swing Line Loan shall be deemed
a representation and warranty by the Domestic Borrower that the
requested Swing Line Loan may be made in accordance with, and will not
violate the requirements of, this Agreement, including those set forth
in subsection 2.2.7(a). Not later than 2:00 p.m., Central time,
on the Business Day of the proposed Swing Line Loan Borrowing, the
Swing Line Lender shall make the proceeds of the requested Swing Line
Loan available to the Domestic Borrower at the office of the Swing
Line Lender by crediting an account of the Domestic Borrower
maintained at such office.
(c) Repayment of Swing Line Loans With Revolving Loans.
Regardless of whether the conditions set forth in Sections 6.1
and 6.2 have been or are capable of being satisfied, on any
Business Day the Swing Line Lender may, in its sole discretion, give
notice to the Lenders that some part or all of the outstanding Swing
Line Loans are to be repaid on the next succeeding Business Day with a
Borrowing of Revolving Loans constituting Base Rate Loans made
pursuant to Section 2.2.1 in the same manner and with the same
force and effect as if the Domestic Borrower had submitted a Notice of
Borrowing therefor pursuant to Section 2.2.5. Subject to and in
accordance with Sections 2.2.1 and 2.2.3, each Lender
shall make the amount of its Revolving Loan
26
available to the Administrative Agent, in immediately available funds,
at the Lending Office of the Administrative Agent, not later than
11:00 a.m. (Central time) on the applicable Funding Date. The
Administrative Agent shall make the proceeds of such Revolving Loans
available to the Swing Line Lender on such Funding Date by causing an
amount of immediately available funds equal to the proceeds of all
such Revolving Loans received by the Administrative Agent to be
credited to an account of the Swing Line Lender at such office of the
Administrative Agent, or shall make such proceeds available to the
Swing Line Lender in such other manner as shall be satisfactory to the
Administrative Agent and the Swing Line Lender.
(d) Participations in Swing Line Loans. If for any reason
a requested Borrowing of Revolving Loans pursuant to subsection
2.2.7(c) is not or cannot be effected, the Lenders will
immediately purchase from the Swing Line Lender, as of the date such
proposed Borrowing otherwise would have occurred but adjusted for any
payments received in respect of such Swing Line Loan(s) by or for the
account of the Domestic Borrower on or after such date but prior to
such purchase, such participations in the outstanding Swing Line Loans
as shall be necessary to cause the Lenders to share in such Swing Line
Loan(s) proportionately in accordance with their respective
Percentages of the Revolving Credit Commitments. Whenever, at any time
after any Lender has purchased a participating interest in a Swing
Line Loan, the Swing Line Lender receives any payment on account
thereof, the Swing Line Lender will distribute to such Lender its
proportionate share of such amount (appropriately adjusted, in the
case of interest payments, to reflect the period of time during which
such Lender's participating interest was outstanding and funded);
provided, however, that in the event any such payment
received by the Swing Line Lender is subsequently set aside or is
required to be refunded, returned or repaid, such Lender will repay to
the Swing Line Lender its proportionate share thereof.
(e) Failure to Pay by Lenders. If any Lender shall fail to
perform its obligation to make a Revolving Loan pursuant to
subsection2.2.7(c) or to purchase a participation in Swing Line
Loans pursuant to subsection 2.2.7(d), the amount in default
shall bear interest for each day from the day such amount is payable
until fully paid at a rate per annum equal to the Federal Funds Rate
or any other rate customarily used by banks for the correction of
errors among banks, but in no event to exceed the Highest Lawful Rate,
and such obligation may be satisfied by application by the
Administrative Agent (for the account of the Swing Line Lender) of any
payment that such Lender otherwise is entitled to receive under this
Agreement. Pending repayment, each such advance shall be secured by
such Lender's participation interest, if any, in the Swing Line Loans
and any security therefor, and the Swing Line Lender shall be
subrogated to such Lender's rights hereunder in respect thereof.
(f) Lenders' Obligations Absolute. The obligation of each Lender
to make Revolving Loans pursuant to subsection 2.2.7(c) and to
purchase participations in Swing Line Loans pursuant to subsection
2.2.7(d) shall be unconditional and irrevocable, shall not be subject
to any qualification or exception whatsoever, shall be made in
accordance with the terms and conditions of this Agreement under all
circumstances and shall be
27
binding in accordance with the terms and conditions of this Agreement
under all circumstances, including the following circumstances:
(1) any lack of validity or enforceability of this
Agreement, any of the other Loan Documents or any other
instrument, document or agreement relating to the transactions
that are the subject thereof;
(2) the existence of any claim, set-off, defense or other
right that the Borrower, any Guarantor, NN Italy or any Lender
may have at any time against any Agent, the Swing Line Lender,
any other Lender or any other Person, whether in connection with
this Agreement, the transactions contemplated herein or any
related transactions;
(3) the surrender or impairment of any security for the
performance or observance of any of the terms of this Agreement;
(4) the occurrence or continuance of any Default;
(5) any adverse change in the condition (financial or other)
of the Borrower, any Guarantor, or NN Italy; or
(6) any other reason.
2.3. Interest.
2.3.1. Interest Rate on Loans. Subject to Section 2.3.3, the unpaid
principal balances of the Loans shall bear interest from their respective
Funding Dates through maturity (whether by acceleration or otherwise)
(including post-petition interest in any case or proceeding under
applicable bankruptcy laws) at a rate determined by reference to the Base
Rate or LIBOR. The applicable basis for determining the rate of interest
for Revolving Loans and Domestic Term Loans shall be selected by the
Domestic Borrower at the time a Notice of Borrowing is given pursuant to
Section 2.2.5 or at the time a Notice of Conversion/Continuation is given
pursuant to Section 2.4.2. The applicable basis for determining the rate of
interest for Euro Term Loans shall be selected by the Euro Borrower at the
time a Notice of Conversion/Continuation is given pursuant to Section
2.4.2. If on any day any Revolving Loan or Term Loan is outstanding with
respect to which notice has not been delivered to the Administrative Agent
or the Euro Loan Agent, as applicable, in accordance with the terms of this
Agreement specifying the basis for determining the rate of interest, then
for that day such Revolving Loan or Term Loan shall bear interest
determined by reference to the Base Rate. The Loans shall bear interest as
follows:
(a) if a Swing Line Loan or a Base Rate Loan, then at a
fluctuating rate per annum equal to the sum of the Base Rate, as it
varies from time to time, plus the Applicable Base Rate Margin; or
(b) if a LIBOR Loan, then at a rate per annum equal to the sum of
LIBOR plus the Applicable LIBOR Margin.
28
2.3.2. Default Rate. Upon the occurrence and during the continuance of
an Event of Default, the unpaid principal balances of the Loans and, to the
extent permitted by applicable law, any unpaid interest accrued in respect
of the Loans shall bear interest at the Default Rate; provided, however,
that in the case of LIBOR Loans, upon the expiration of the Interest Period
in effect at the time any such increase in interest rate is effective, such
LIBOR Loans shall thereupon become Base Rate Loans and thereafter bear
interest at the corresponding Default Rate. Interest accruing pursuant to
this Section 2.3.2 shall be payable upon demand.
2.3.3. Conclusive Determination. Each determination by either Agent of
an interest rate under this Agreement shall be conclusive and binding for
all purposes, absent manifest error.
2.3.4. Maximum Number of Interest Periods. No more than four (4)
Interest Periods may be in effect in respect of outstanding Loans (other
than Euro Term Loans) bearing interest based on LIBOR at any time, and no
more than two (2) Interest Periods may be in effect in respect of
outstanding Euro Term Loans bearing interest based on LIBOR at any time.
2.4. Conversion or Continuation.
2.4.1. Option to Convert or Continue.
(a) Subject to the provisions of Section 2.11, the Domestic
Borrower shall have the option with respect to Revolving Loans and
Domestic Term Loans (i) at any time to convert all or any part of any
outstanding Base Rate Loans in an aggregate minimum amount of $500,000
and integral multiples of $100,000 in excess of that amount from Base
Rate Loans to LIBOR Loans and (ii) upon the expiration of any Interest
Period applicable to a specific Borrowing of LIBOR Loans, to continue
all or any portion of such Loans in an aggregate minimum amount of
$500,000 and integral multiples of $100,000 in excess of that amount as
LIBOR Loans, and the succeeding Interest Period of such continued LIBOR
Loans shall commence on the expiration date of the Interest Period
previously applicable thereto.
(b) Subject to the provisions of Section 2.11, the Euro
Borrower shall have the option with respect to Euro Term Loans (i) at
any time to convert all or any part of any outstanding Base Rate Loans
in an aggregate minimum amount of (euro)500,000 and integral multiples
of (euro)100,000 in excess of that amount from Base Rate Loans to LIBOR
Loans and (ii) upon the expiration of any Interest Period applicable to
a specific Borrowing of LIBOR Loans, to continue all or any portion of
such Loans in an aggregate minimum amount of (euro)500,000 and integral
multiples of (euro)100,000 in excess of that amount as LIBOR Loans, and
the succeeding Interest Period of such continued LIBOR Loans shall
commence on the expiration date of the Interest Period previously
applicable thereto.
2.4.2. Notice of Conversion/Continuation. The Domestic Borrower shall
deliver a Notice of Conversion/Continuation to the Administrative Agent,
and the Euro Borrower shall deliver a Notice of Conversion/Continuation to
the Euro Loan Agent, as applicable, in each case
29
no later than 11:00 a.m. (Central time) at least three (3) Business Days in
advance of the proposed conversion/continuation date. A Notice of
Conversion/Continuation shall specify (a) the proposed
conversion/continuation date (which shall be a Business Day), (b) the
aggregate amount of Loans to be converted/continued, (c) the nature of the
proposed conversion/ continuation, and (d) the requested Interest Period.
In lieu of delivering a Notice of Conversion/Continuation, the Domestic
Borrower or the Euro Borrower may give the applicable Agent telephonic
notice by the required time of any proposed conversion/continuation under
this Section 2.4; provided, however, that such notice shall be promptly
confirmed in writing by a Notice of Conversion/Continuation delivered to
the applicable Agent on or before the proposed conversion/continuation
date. The execution and delivery of each Notice of Conversion/Continuation
shall be deemed a representation and warranty by the Borrower that the
requested conversion/continuation may be made in accordance with, and will
not violate the requirements of, this Agreement, including those set forth
in Sections 2.4.1 and 2.11.1.
2.4.3. Notice to the Lenders. Promptly after receipt of a Notice of
Conversion/Continuation (or telephonic notice in lieu thereof), the
applicable Agent shall notify each Lender of the proposed conversion or
continuation. Neither any Agent nor any Lender shall incur any liability to
the applicable Borrower in acting upon any telephonic notice referred to
above that such Agent or such Lender believes in good faith to have been
given by a duly authorized officer or other person authorized to act on
behalf of the applicable Borrower or for otherwise acting in good faith
under this Section 2.4 and, upon conversion/continuation by the applicable
Agent in accordance with this Agreement pursuant to any telephonic notice,
the applicable Borrower shall have effected a conversion/continuation of
Loans hereunder.
2.4.4. Notice Irrevocable. A Notice of Conversion/Continuation shall
be irrevocable on and after the related Interest Rate Determination Date,
and the applicable Borrower shall be bound to convert or continue such Loan
in accordance therewith.
2.4.5. Automatic Conversion. In the event any LIBOR Loan is unpaid
upon the expiration of the Interest Period applicable thereto and a Notice
of Conversion/Continuation has not been given in the manner provided in
Section 2.4.2, such LIBOR Loan shall, effective as of the last day of such
Interest Period, become a Base Rate Loan.
2.5. Notes; Records of Payments. Each Revolving Loan made by a Lender to
the Domestic Borrower pursuant to this Agreement shall be evidenced by a
Revolving Note payable to the order of such Lender in an amount equal to such
Lender's Percentage of the aggregate amount of the Revolving Credit Commitments;
each Domestic Term Loan made by a Lender to the Domestic Borrower pursuant to
this Agreement shall be evidenced by a Domestic Term Note payable to the order
of such Lender in an amount equal to such Lender's Percentage of the aggregate
amount of the Domestic Term Loan Commitments; each Euro Term Loan made by a
Lender to the Euro Borrower pursuant to this Agreement shall be evidenced by a
Euro Term Note payable to the order of such Lender in an amount equal to such
Lender's Percentage of the aggregate amount of the Euro Term Loan Commitments;
and the Swing Line Loans made by the Swing Line Lender to the Domestic Borrower
pursuant to this Agreement shall be evidenced by the Swing Line Note. Each
Lender (including the Swing Line Lender) hereby is authorized to record and
endorse the date and principal amount of each Loan made by it, and the amount of
all
30
payments and prepayments of principal and interest made to such Lender with
respect to such Loans, on a schedule annexed to and constituting a part of the
corresponding Note(s) of such Lender, which recordation and endorsement shall
constitute prima facie evidence of such Loans made by such Lender to the
applicable Borrower and payments made by the applicable Borrower to such Lender,
absent manifest error; provided, however, that (a) failure by any Lender to make
any such recordation or endorsement shall not in any way limit or otherwise
affect the obligations of the applicable Borrower or the rights and remedies of
the Lenders under this Agreement or the Notes, and (b) payments of principal and
interest on the Loans to the Lenders shall not be affected by the failure to
make any such recordation or endorsement thereof. In lieu of making recordation
or endorsement, the Lenders hereby are authorized, at their option, to record
the payments or prepayments on their respective books and records in accordance
with their usual and customary practice, which recordation shall constitute
prima facie evidence of the Loans made by the Lenders to the applicable Borrower
and the payments and prepayments made by the applicable Borrower to the Lenders,
absent manifest error.
2.6. Agents' Right to Assume Funds Available. Each Agent may assume that
each Lender has made the proceeds of its Revolving Loans or Term Loans, as the
case may be, available to such Agent on the corresponding Funding Date in the
event the applicable conditions precedent to funding the requested Revolving
Loans or Term Loans, as the case may be, set forth in Article 6 have been
satisfied or waived in accordance with Section 14.3, and such Agent, in its sole
discretion, may, but shall not be obligated to, advance all or any portion of
the amount of any requested Borrowing on such Funding Date to the applicable
Borrower prior to receiving the proceeds of the corresponding Revolving Loans or
Term Loans, as the case may be, from the Lenders. If any Agent has advanced
proceeds of any Loan to the applicable Borrower on behalf of any Lender and such
Lender fails to make available to such Agent its Percentage share of such Loan
as required by Section 2.2, such Agent shall be entitled to recover such amount
on demand from such Lender. If such Lender does not pay such amount forthwith
upon such Agent's demand therefor, such Agent shall notify the applicable
Borrower and the applicable Borrower shall pay such amount to such Agent. Each
Agent also shall be entitled to recover from such Lender interest at the
applicable rate for such Loan, but in no event to exceed the Highest Lawful
Rate, on such amount so advanced on behalf of such Lender for each day from the
date such amount was made available by such Agent to the applicable Borrower to
the date such amount is recovered by such Agent. Nothing herein shall be deemed
to relieve any Lender from its obligation to fulfill such Lender's Commitments
or to prejudice any rights that any Agent or the applicable Borrower may have
against any Lender as a result of any default by such Lender hereunder.
2.7. Use of Proceeds. (a) The proceeds of the Domestic Term Loan will be
used by the Domestic Borrower to refinance the outstanding principal amount owed
by the Domestic Borrower under that certain Credit Agreement dated July 20,
2001, by and among the Domestic Borrower, the Lenders identified therein, Bank
One, Kentucky, N.A. as Co-Agent and AmSouth as Administrative Agent, as amended
to date, and to finance the purchase by the Domestic Borrower of the remaining
ownership interest in the Euro Borrower not currently owned by the Domestic
Borrower, (b) the proceeds of the Euro Term Loan will be used by the Euro
Borrower to refinance certain existing Indebtedness owed by the Euro Borrower
and to finance the SKF-Veenendaal Acquisition, and (c) the proceeds of the
Revolving Loans and the Swing Line Loans
31
will be used by the Domestic Borrower for working capital purposes and for other
general corporate purposes (including, without limitation, Permitted
Acquisitions and, to the extent permitted by this Agreement, Investments in
Subsidiaries). The proceeds of the Loans will not be used by the Borrower for
any purpose prohibited by the terms of this Agreement or by any law.
2.8. Credit Fees. In consideration for the obligations of the Agents and
the Lenders set forth herein, the Borrower shall pay the following credit fees:
2.8.1. Agent Fees. Pursuant to one or more separate agreements with the
Administrative Agent, the Domestic Borrower shall pay to the Administrative
Agent the fees and charges specified therein for the services of the
Administrative Agent in acting as such hereunder. Pursuant to one or more
separate agreements with the Euro Loan Agent, the Euro Borrower shall pay to the
Euro Loan Agent the fees and charges specified therein for the services of the
Euro Loan Agent in acting as such hereunder.
2.8.2. Facility Initiation Fees. In consideration of each Lender's
agreement to participate in the Domestic Term Loan Facility, the Euro Term Loan
Facility and the Revolving Credit Facility as provided herein:
(a) the Domestic Borrower agrees to pay to each Lender a fee
in an amount equal to twenty-five one-hundredths of one percent (0.25%)
of such Lender's Percentage of the Domestic Term Loan Commitments and
the Revolving Credit Commitments hereunder; and
(b) the Euro Borrower agrees to pay to each Lender a fee in an
amount equal to twenty-five one-hundreds of one percent (0.25%) of such
Lender's Percentage of the Euro Term Loan Commitments hereunder.
Such fees shall be due and payable upon the execution and delivery of this
Agreement by the Borrower. Upon payment, such fees shall be deemed to have been
fully earned and are nonrefundable.
2.8.3. Commitment Fees. The Domestic Borrower agrees to pay to the
Administrative Agent, for distribution to the Lenders in proportion to their
respective Percentages, annual commitment fees for the period commencing on the
date hereof to but excluding the Revolving Commitment Period Expiration Date
equal to the average of the daily unused portion of the Revolving Credit
Commitments (i.e., the aggregate amount of the Revolving Credit Commitments less
the aggregate amount of Revolving Loans outstanding) multiplied by the
Applicable Commitment Fee Percentage ("Commitment Fees"). Commitment Fees shall
be payable in quarter-annual installments, in arrears, on January 1, April 1,
July 1 and October 1 of each year, commencing July 1, 2003, and on the Revolving
Commitment Period Expiration Date.
2.8.4. Payment of Fees by Euro Borrower. In no event shall Euro Borrower be
liable for the payment of any fees required to be paid by Domestic Borrower
pursuant to this Section 2.8.
32
2.9. Computations. To the extent permitted by applicable law, all
computations of fees and interest under this Agreement payable in respect of any
period shall be made by the Agents on the basis of a 360-day year, in each case
for the actual number of days (including the first day but excluding the last
day) occurring in the period for which such fees or interest are payable. In
computing interest on any Loan, the date of the making of such Loan or the first
day of an Interest Period, as the case may be, shall be included and the date of
payment or the expiration date of an Interest Period, as the case may be, shall
be excluded; provided, however, that if a Loan is repaid on the same day on
which it is made, one day's interest shall be paid on that Loan.
2.10. Interest and Fees Margins. For purposes of interest and fee
computations hereunder involving the Applicable Base Rate Margin, the Applicable
LIBOR Margin and the Applicable Commitment Fee Percentage, such margins and
percentages shall be determined as follows:
Applicable
Applicable Applicable Commitment
LIBOR Base Rate Fee
Tier Margin Margin Percentage
---- ------ ------ ----------
1 1.25% 0.00% 0.15%
2 1.50% 0.00% 0.20%
3 1.75% 0.00% 0.25%
4 2.00% 0.00% 0.30%
Except as expressly hereinafter provided, the applicable tier at any
time shall be determined with reference to the Funded Indebtedness to EBITDA
Ratio of the Domestic Borrower at such time (provided, however, for purposes of
this Section 2.10, Pro Forma Effect shall not be given with respect to any Asset
Acquisitions), as follows:
Tier Funded Indebtedness to EBITDA Ratio
---- -----------------------------------
1 Equal to or less than 1.25 to 1.00
2 Greater than 1.25 to 1.00 but equal to or
less than 1.75 to 1.00
3 Greater than 1.75 to 1.00 but equal to or
less than 2.00 to 1.00
4 Greater than 2.00 to 1.00
From the date hereof to but not including the first Pricing Tier
Determination Date after June 30, 2003, Tier 4 shall be applicable. Any
adjustment in the margins set forth above shall take effect on the first Pricing
Tier Determination Date following the Last Four Fiscal Quarters as to which such
ratio was calculated.
33
2.11. Special Provisions Governing LIBOR Loans. Notwithstanding other
provisions of this Agreement, the following provisions shall govern with respect
to LIBOR Loans as to the matters covered:
2.11.1. Determination of Interest Period. By giving a Notice of
Borrowing pursuant to Section 2.2.5, the Domestic Borrower shall have the
option, subject to the other provisions of this Section 2.11.1, to specify
whether the Interest Period commencing on the date specified therein shall
be a one, two or three-month period; provided that:
(a) in the case of immediately successive Interest Periods, each
successive Interest Period shall commence on the day on which the next
preceding Interest Period expires;
(b) if any Interest Period otherwise would expire on a day that is not
a Business Day, that Interest Period shall be extended to expire on the
next succeeding Business Day; provided, however, that if any such Interest
Period would otherwise expire on a day that is not a Business Day but is a
day of the month after which no further Business Day occurs in that month,
that Interest Period shall expire on the immediately preceding Business
Day;
(c) any Interest Period that begins on the last Business Day of a
calendar month (or on a day for which there is no numerically corresponding
day in the calendar month at the end of such Interest Period) shall,
subject to paragraph (d) below, end on the last Business Day of a calendar
month; and
(d) no Interest Period shall extend beyond the Revolving Commitment
Period Expiration Date, or the Term Loan Maturity Date, as applicable.
2.11.2. Determination of Interest Rate. As soon as is practicable
after 11:00 a.m. (Central time) on the Interest Rate Determination Date,
the Administrative Agent or the Euro Loan Agent, as applicable, shall
determine (which determination shall, absent manifest error, be final,
conclusive and binding upon all parties) the interest rate that shall apply
to the LIBOR Loans for which an interest rate is then being determined for
the applicable Interest Period and shall promptly give notice thereof (in
writing or by telephone confirmed in writing) to the applicable Borrower
and each Lender.
2.11.3. Inability to Determine Rate. In the event the Administrative
Agent or the Euro Loan Agent, as applicable, shall have determined (which
determination shall be conclusive and binding absent manifest error) that
by reason of circumstances affecting the London interbank market, adequate
and reasonable means do not exist for ascertaining Base LIBOR, such Agent
forthwith shall give telephonic notice of such determination, confirmed in
writing, to the Borrower and each Lender. If such notice is given, and
until such notice has been withdrawn by such Agent, no additional LIBOR
Loans shall be made.
34
2.11.4. Illegality; Termination of Commitment to Make LIBOR Loans.
Notwithstanding any other provisions of this Agreement, if any law, treaty,
rule or regulation or determination of a court or other governmental
authority, or any change therein or in the interpretation or application
thereof, shall make it unlawful for any Lender to make or maintain LIBOR
Loans, as contemplated by this Agreement, then, and in any such event, such
Lender shall be an "Affected Lender" and shall promptly give notice (by
telephone confirmed in writing) to the Borrower and each Agent (which
notice each Agent shall promptly transmit to each Lender in writing, or by
telephone confirmed in writing) of such determination, and the obligation
of the Affected Lender to make LIBOR Loans shall be terminated, and its
obligation to maintain its LIBOR Loans during such period shall be
terminated at the earlier to occur of the termination of the last Interest
Period then in effect or when required by law. Thereafter, and until such
notice has been withdrawn by the Affected Lender, the Affected Lender shall
have no obligation to make LIBOR Loans, and any LIBOR Loans of the Affected
Lender then outstanding shall be converted into Base Rate Loans as of the
end of the corresponding Interest Period for each.
2.11.5. LIBOR Loans After Default. Unless all Lenders shall otherwise
agree, after the occurrence of and during the continuance of a Default, the
Borrower may not elect to have a Loan be made or continued as, or converted
to, a LIBOR Loan.
2.12. Expenses. The Domestic Borrower shall reimburse the Agents, on
demand, for all reasonable attorneys' and paralegals' fees and expenses of
counsel to the Agents, all fees and expenses for title, lien and other public
records searches, all filing and recordation fees and taxes, all duplicating
expenses, corporation search fees, appraisal fees and escrow agent fees and
expenses and all other customary fees and expenses incurred in connection with
(a) the negotiation, documentation and closing of the transactions contemplated
hereby, (b) the perfection of or the continued perfection of the security
interests contemplated hereby, and (c) the review and preparation of any
documentation in connection with, and the approval by the Lenders of, any matter
for which the Lenders' approval is requested or required hereunder. The
obligations described in this Section 2.12 regarding the payment of expenses are
independent of all other obligations of the Domestic Borrower hereunder, shall
survive the expiration or termination of the Commitments and shall be payable
regardless of whether the financing transactions contemplated by this Agreement
shall be consummated.
2.13. Replacement or Removal of Lender. If the Administrative Agent
receives a notice pursuant to Section 3.3.5 claiming compensation, reimbursement
or indemnity pursuant to Section 3.3 or Section 3.4, and the aggregate amount of
all such compensation, reimbursement or indemnity payments made or required to
be made by the Borrower pursuant to Section 3.3 or Section 3.4 to the Lender
giving notice is materially greater (as determined by the Borrower in its
reasonable judgment) than the weighted average amount of payments made or
required to be made to the other Lenders pursuant to Section 3.3 or Section 3.4,
or if the Administrative Agent receives a notice from an Affected Lender
pursuant to Section 2.11.4, then, so long as no Default shall have occurred and
be continuing, the Borrower may, within sixty (60) days after receipt of any
such notice, elect to terminate such Lender as a party to this Agreement. If the
amount of such Lender's Commitment, together with the amount of any other
Commitments theretofore or concurrently therewith to be reduced in accordance
with this Section 2.13, aggregates twenty-
35
five percent (25%) or less of the aggregate Commitments, the Borrower may elect
either to replace such Lender with another financial institution reasonably
satisfactory to the Administrative Agent (a "Replacement Lender") or to reduce
the Commitments by the amount of the Commitment of such Lender. If the amount of
such Lender's Commitment, together with the amount of any other Commitments
theretofore or concurrently therewith to be reduced in accordance with this
Section 2.13, aggregates in excess of twenty-five percent (25%) of the aggregate
Commitments, the Borrower may elect to terminate such Lender only if, together
with its notice of termination, it provides to the Administrative Agent a
commitment from a Replacement Lender to replace the Commitment of the terminated
Lender on the terms and conditions set forth herein. The Borrower's election to
terminate a Lender under this Section 2.13 shall be set forth in a written
notice from the Borrower to the Administrative Agent (with a copy to such
Lender), setting forth (a) the basis for termination of such Lender, (b) whether
the Borrower intends to replace such Lender with a Replacement Lender or, if the
Borrower is not required to replace such Lender, to reduce the Commitments by
the amount of the Commitment of such Lender, and (c) the date (not later than
thirty (30) days after the date of such notice) when such termination shall
become effective. On the date on which such termination becomes effective, (i)
the Borrower and/or the Replacement Lender, as applicable, shall pay the
terminated Lender an amount equal to all principal, interest, fees and other
amounts owed to such Lender pursuant to this Agreement (including any amounts
owed under Sections 3.3 and 3.4) through such date, and (ii) there shall have
been received by the Administrative Agent an executed Assignment and Acceptance
and all other documents and supporting materials necessary, in the reasonable
judgment of the Administrative Agent, to evidence the substitution of the
Replacement Lender for such terminated Lender, or if there is no Replacement
Lender, to reflect the adjustment of the Commitments, including any necessary or
appropriate adjustments to the Lenders' Percentages (adjustments to the
Commitments and Percentages of the remaining Lenders to be based upon the
relative proportions of their respective Percentages).
2.14. Failure to Pay in Appropriate Currency. If the Euro Borrower is
unable for any reason to effect payment of a Euro Term Loan in Euros as required
hereunder or if the Euro Borrower shall default in the payment when due of any
payment in Euros, the Lenders may, at their option, require such payment to be
made to the Euro Loan Agent in the Dollar Equivalent of such Euro payment at the
Euro Loan Agent's Lending Office specified for payments of Loans in Dollars. In
any such case, the Euro Borrower agrees to indemnify and hold Lenders harmless
from any loss incurred by such Lender arising from any change in the value of
Dollars in relation to Euros between the date such payment became due and the
date of payment thereof.
2.15. Currency Control and Exchange Regulations. Notwithstanding anything
to the contrary herein, if any currency control or exchange regulations relating
to the Euro are imposed with the result that the Euro (the "Original Currency")
no longer exists or the Euro Borrower is not able to make payment to the Euro
Loan Agent for the account of the Lenders in such Original Currency, then all
payments to be made by the Euro Borrower hereunder in such Original Currency
shall instead be made when due in Dollars in an amount equal to the Dollar
Equivalent (as of the date of repayment) of such payment due, it being the
intention of the parties that the Euro Borrower takes all risks of the
imposition of any such currency control or exchange regulations.
36
2.16. European Economic and Monetary Union. The terms and provisions of
this Agreement will be subject to such reasonable changes of construction as
determined by the Euro Loan Agent to reflect the implementation of the economic
and monetary union in any member state of the European Union not currently
participating in the economic and monetary union or any market conventions
relating to the fixing and/or calculation of interest being changed or replaced
and to reflect market practice at that time, and subject thereto, to put the
Agents, the Lenders and the Borrower in the same position, so far as possible,
that they would have been if such implementation had not occurred. In connection
therewith, the Borrower agrees, at the request of the Euro Loan Agent, at the
time of or at any time following the implementation of the economic and monetary
union in any member state of the European Union not currently participating in
the economic and monetary union or any market conventions relating to the fixing
and/or calculation of interest being changed or replaced, to enter into an
agreement amending this Agreement in such manner as the Euro Loan Agent shall
reasonably request.
ARTICLE 3.
PAYMENTS, PREPAYMENTS AND COMPUTATIONS
3.1. General Provisions Relating to Repayment of Loans. The Loans shall be
repaid as provided in this Section 3.1.
3.1.1. Interest Payments. The interest accrued on each Loan shall be
payable on each Interest Payment Date applicable to such Loan, upon any
prepayment of any LIBOR Loan (to the extent accrued on the amount being
prepaid) and at maturity.
3.1.2. Scheduled Term Loan Principal Payments.
(a) Principal of the Domestic Term Loans shall be repaid in
equal, quarterly installments of $1,520,267 each (subject to reduction
in accordance with Section 3.1.3), with the first installment due and
payable on July 1, 2003, and subsequent installments due and payable on
each January 1, April 1, July 1, and October 1 thereafter; provided,
however, that in connection with any payment of principal of the
Domestic Term Loans consisting of LIBOR Loans, the Domestic Borrower
shall pay to the Administrative Agent, for distribution to the Lenders,
the accrued interest on such Loan required to be paid pursuant to
Section 3.1.1 and any amounts required to be paid pursuant to Section
3.3.3.
(b) Principal of the Euro Term Loans shall be repaid in equal,
quarterly installments of (euro)1,314,150 each (subject to reduction in
accordance with Section 3.1.3), with the first installment due and
payable on July 1, 2003, and subsequent installments due and payable on
each January 1, April 1, July 1, and October 1 thereafter; provided,
however, that in connection with any payment of principal of the Euro
Term Loans consisting of LIBOR Loans, the Euro Borrower shall pay to
the Euro Loan Agent, for
37
distribution to the Lenders, the accrued interest on such Loan
required to be paid pursuant to Section 3.1.1 and any amounts required
to be paid pursuant to Section 3.3.3.
3.1.3. Prepayments.
(a) Optional Prepayments.
(1) The Domestic Borrower may prepay Swing Line Loans, in whole
or in part, at any time and from time to time. Except to the extent
that repayment of Swing Line Loans is being administered through an
automated cash management system mutually approved in writing by the
Domestic Borrower and the Swing Line Lender, the Domestic Borrower
shall, prior to or contemporaneously with making any such prepayment,
give the Swing Line Lender such notice of prepayment as is sufficient
to enable the Swing Line Lender to apply such prepayment properly to
the repayment of Swing Line Loans.
(2) Each Borrower may, upon not less than one (1) Business Day's
prior written or telephonic notice confirmed in writing to the
applicable Agent (in the case of Base Rate Loans), and upon not less
than three (3) Business Days' prior written or telephonic notice
confirmed in writing to the applicable Agent (in the case of LIBOR
Loans) (each of which notices the applicable Agent will promptly
transmit to each Lender in writing, or by telephone confirmed in
writing), at any time and from time to time prepay any Borrowing of
Revolving Loans or Domestic Term Loans (as the Borrower may specify to
the Administrative Agent) in whole or in part in integral multiples of
$50,000, or any Borrowing of Euro Term Loans in whole or in part in
integral multiples of (euro)50,000; provided, however,
that LIBOR Loans may only be prepaid in part if, after such
prepayment, the unpaid portion of such Revolving Loans and Domestic
Term Loans shall have aggregate minimum balances of $100,000 and the
unpaid portion of such Euro Term Loans shall have aggregate minimum
balances of(euro)100,000; and provided, further, that in
connection with any prepayment of LIBOR Loans, the applicable Borrower
shall pay to the Administrative Agent with respect to all Loans other
than Euro Term Loans and to the Euro Loan Agent with respect to Euro
Term Loans, for distribution to the Lenders, the accrued interest on
such Loan required to be paid pursuant to Section
3.1.1 and any amounts required to be paid pursuant to Section 3.3.3;
and provided, further, that any prepayments of the Term Loans shall be
applied to reduce scheduled Term Loan principal payments on a pro rata
basis (and any such prepayments may be applied, at Borrower's option,
either to (i) all the Term Loans, on a pro rata basis or (ii) either
the Domestic Term Loans or the Euro Term Loans, in either case on a
pro rata basis); and provided, further, all such prepayments made by
Euro Borrower shall be applied only to the Euro Obligations.
38
(b) Mandatory Prepayments.
(1) The Borrower shall prepay Loans with (a) all of the net
proceeds of the sale by the Borrower, any Guarantor or NN Italy
of any stock or other securities (other than (i) net proceeds
received in connection with the issuance of 700,000 shares of the
stock of the Domestic Borrower to SKF in connection with the
SKF-Veenendaal Acquisition; (ii) net proceeds not exceeding the
Dollar Equivalent of $10,000,000 during the term of the
Facilities of the sale by the Borrower of common stock issued
upon the exercise of stock options pursuant to the NN, Inc. Stock
Incentive Plan; (iii) the sale by a Guarantor or NN Italy of
stock or other securities to the Borrower, another Guarantor or
NN Italy; and (iv) net proceeds not exceeding the Dollar
Equivalent of $5,000,000 during the term of the Facilities of any
other sale by the Borrower of any stock or other securities), or
the incurrence of any Indebtedness for borrowed money (other than
Indebtedness permitted under clauses (a) through (c) and (e)
through (j) of Section 9.1); (b) ll of the net proceeds of the
sale or other disposition of assets except for (i) dispositions
permitted pursuant to clauses (a), (b) and (c) of Section 9.3 and
(ii) dispositions permitted pursuant to clause (d) of Section 9.3
to the extent such dispositions do not exceed an aggregate amount
of $100,000 in any Fiscal Year; and (c) all payments received by
Borrower pursuant to that certain Promissory Note dated December
21, 2001, in the original principal amount of $3,305,000,
executed by General Bearing Corporation, a Delaware corporation,
and payable to the order of the Domestic Borrower; provided,
however, that in connection with any prepayment of LIBOR Loans,
the applicable Borrower shall pay to the Administrative Agent,
for distribution to the Lenders, the accrued interest on such
Loan required to be paid pursuant to Section 3.1.1 and any
amounts required to be paid pursuant to Section 3.3.3; and
provided further that any prepayments of the Term Loans shall be
applied to reduce scheduled Term Loan principal payments on a pro
rata basis (and any such prepayments may be applied, at
Borrower's option, either to (i) all the Term Loans, on a pro
rata basis or (ii) either the Domestic Term Loans or the Euro
Term Loans, in either case on a pro rata basis); and provided,
further, that this section shall not be construed to permit the
Borrower to take any action not otherwise permitted hereunder;
and provided, further, all such prepayments made by Euro Borrower
shall be applied only to the Euro Obligations. Any prepayment
pursuant to this paragraph (1) shall be applied first to
scheduled Term Loan principal payments as set forth above, and
then to outstanding Revolving Loans, in each case applied first
to Base Rate Loans until the same have been fully repaid, and
then to LIBOR Loans. The amount of the Commitments shall be
reduced pro rata among the Lenders by the amount of any
prepayment made pursuant to this paragraph (1), with reductions
in the Commitments applied in accordance with the allocation of
the prepayments of the Loans as set forth above.
(2) The applicable Borrower shall prepay Loans to the extent
necessary so that the aggregate principal amount of Loans
outstanding at any time
39
does not exceed the Commitments then in effect; provided,
however, that in connection with any prepayment of LIBOR Loans,
the applicable Borrower shall pay to the applicable Agent, for
distribution to the Lenders, the accrued interest on such Loan
required to be paid pursuant to Section 3.1.1 and any
amounts required to be paid pursuant to Section 3.3.3. Any
prepayment pursuant to this paragraph (2) shall be applied first
to Swing Line Loans until the same have been fully repaid, then
to Base Rate Loans until the same have been fully repaid, and
then to LIBOR Loans.
3.1.4. Final Maturity of Loans. In all events, (a) the entire
aggregate principal balances of, all accrued and unpaid interest on
and all fees and other sums due and payable in respect of the
Revolving Loans and the Swing Line Loans shall be due and payable in
full on the Revolving Commitment Period Expiration Date if not sooner
paid, and (b) the entire aggregate principal balances of, all accrued
and unpaid interest on and all fees and other sums due and payable in
respect to the Term Loans shall be due and payable in full on the Term
Loan Maturity Date.
3.2. Payments and Computations, Etc.
3.2.1. Time and Manner of Payments.
(a) Except as otherwise expressly set forth herein, all
payments of principal, interest and fees hereunder with respect to
Revolving Loans, Swingline Loans and Domestic Term Loans and under the
applicable Notes shall be in lawful currency of the United States of
America, in immediately available (same day) funds, and delivered to
the Administrative Agent at its Lending Office for its account, the
account of the Lenders or the account of the Swing Line Lender, as the
case may be (or in the case of Swing Line Loans and if so directed by
the Swing Line Lender, delivered directly to the Swing Line Lender),
not later than 11:00 a.m. (Central time) on the date due. As soon as is
practicable thereafter, the Administrative Agent shall cause to be
distributed like funds relating to the payment of principal or interest
or fees ratably to the Lenders in accordance with their respective
Percentages (other than amounts payable pursuant to Sections 2.8.1, 3.3
and 3.4, which are to be distributed other than ratably). Funds
received by the Administrative Agent after the time specified in the
first sentence of this paragraph shall be deemed to have been paid by
the Domestic Borrower on the next succeeding Business Day.
(b) Except as otherwise expressly set forth herein, all
payments of principal, interest and fees hereunder with respect to Euro
Term Loans and under the Euro Term Notes shall be in immediately
available (same day) funds in Euros, and delivered to the Euro Loan
Agent at its Lending Office for its account, the account of the
Lenders, not later than 11:00 a.m. (Central time) on the date due. As
soon as is practicable thereafter, the Euro Loan Agent shall cause to
be distributed like funds relating to the payment of principal or
interest or fees ratably to the Lenders in accordance with their
respective Percentages (other than amounts payable pursuant to Sections
2.8.1, 3.3 and 3.4, which are to be distributed other than ratably).
Funds received by the Euro Loan Agent after the
41
time specified in the first sentence of this paragraph shall be deemed
to have been paid by the Euro Borrower on the next succeeding Business
Day.
3.2.2. Payments on Non-Business Days. Whenever any payment
to be made hereunder or under the Notes shall be stated to be due on a
day that is not a Business Day, the payment shall be made on the next
succeeding Business Day and such extension of time shall be included
in the computation of the payment of interest hereunder or under the
Notes or of the fees payable hereunder, as the case may be; provided,
however, that in the event that the day on which payment relating to a
LIBOR Loan is due is not a Business Day but is a day of the month
after which no further Business Day occurs in that month, then the due
date thereof shall be the next preceding Business Day.
3.2.3. Apportionment of Payments. Aggregated principal and
interest payments shall be apportioned among all outstanding Loans to
which such payments relate, and shall be apportioned ratably among the
Lenders in proportion to the Lenders' respective Percentages of the
corresponding Loans (except for payments in respect of Swing Line
Loans, which shall be apportioned and distributed entirely to the
Swing Line Lender). The Administrative Agent or the Euro Loan Agent,
as applicable, shall promptly distribute to each Lender at its Lending
Office its Percentage of all such payments received by such Agent.
Notwithstanding the foregoing provisions of this Section 3.2.3,
if, pursuant to the provisions of Section 2.11.4, any Notice of
Borrowing is withdrawn as to any Affected Lender or if any Affected
Lender makes Base Rate Loans in lieu of its Percentage of LIBOR Loans,
the Administrative Agent or the Euro Loan Agent, as applicable, shall
give effect thereto in apportioning payments received thereafter.
3.2.4. Assumption of Payments Made. Unless the
Administrative Agent or the Euro Loan Agent, as applicable, shall have
received notice from the applicable Borrower prior to the date on
which any payment is due to such Agent for the benefit of the Lenders
hereunder that the Borrower will not make such payment in full, such
Agent may assume that such Borrower has made such payment in full to
such Agent on such date and such Agent may, in reliance upon such
assumption, cause to be distributed to each Lender on such due date an
amount equal to the amount then due such Lender. If and to the extent
such Borrower shall not have so made such payment in full to such
Agent, each Lender shall repay to such Agent forthwith on demand such
amount distributed to such Lender together with interest thereon, for
each day from the date such amount is distributed to such Lender until
the date such Lender repays such amount to the such Agent, at the
Federal Funds Rate, but in no event to exceed the Highest Lawful Rate.
3.2.5. Application of Proceeds. After the occurrence and
during the continuance of an Event of Default, unless otherwise set
forth in this Agreement or the other Loan Documents, all payments
received by the Administrative Agent, and all payments (or the Dollar
Equivalent with respect thereto) received by the Euro Loan Agent from
the enforcement of remedies under the Loan Documents or otherwise with
respect to the Obligations shall be applied (a) first, to the payment
of any fees, expenses, reimbursements or indemnities then due from the
applicable Borrower to the Agents; (b) second, to the payment of any
fees, expenses, reimbursements or indemnities then due from the
applicable Borrower to the Lenders, or any of them; (c) third, to the
ratable payment of interest due from the applicable Borrower with
respect to any of the Loans; (d) fourth, to the ratable payment of
principal of any of the Loans of the
41
applicable Borrower, and (e) fifth, to pay all other Obligations of
the applicable Borrower. Amounts applied to the interest on or
principal of Loans as aforesaid shall be applied to the interest on or
principal of outstanding Swing Line Loans, if any, prior to
application of same to Revolving Loans.
3.3. Increased Costs, Capital Requirements and Taxes.
3.3.1. Increased Costs. Except to the extent reimbursed pursuant to
other provisions of this Section 3.3, in the event that either (i) the
introduction of, or any change in, or in the interpretation of, any law or
regulation or (ii) compliance with any guideline or request from any
central bank or other Governmental Authority (regardless of whether having
the force of law):
(a) does or shall subject any Lender to any additional income,
preference, minimum or excise tax or to any additional tax of any kind
whatsoever with respect to this Agreement, the Notes or any of the
Loans or change the basis of taxation of payments to such Lender of
principal, commitment fees, interest or any other amount payable
hereunder (except for changes in the rate of tax on the overall gross
or net income of that Lender or its foreign branch, agency or
subsidiary); or
(b) does or shall impose, modify or hold applicable any reserve,
special deposit, compulsory loan, FDIC insurance or similar
requirement against assets held by, or deposits or other liabilities
in or for the account of, advances or loans by, or other credit
extended by, or any other acquisition of funds by, any office of such
Lender (except, with respect to LIBOR Loans, to the extent that the
reserve requirements are reflected in the definition of "LIBOR"); or
(c) does or shall impose on that Lender any other condition;
and the result of any of the foregoing is to increase the cost to that Lender of
making, renewing or maintaining the Loans or the Commitments or to reduce any
amount receivable hereunder or thereunder; then, in any such case, the
applicable Borrower shall promptly pay to such Lender, upon demand, such
additional amounts as are sufficient to compensate such Lender for any such
additional cost or reduced amount received.
3.3.2. Capital Requirements - General. If either (i) the introduction
of, or any change in, or in the interpretation of, any law or regulation or
(ii) compliance with any guideline or request from any central bank or
other Governmental Authority (regardless of whether having the force of
law), affects or would affect in any way the amount of capital required or
expected to be maintained by any Lender or any corporation controlling such
Lender with the effect of reducing the rate of return on such capital to a
level below the rate that such Lender or such other corporation could have
achieved but for such introduction, change or compliance, and such Lender
reasonably determines that such reduction is based on the existence of such
Lender's Commitments hereunder and other commitments of this type, then
upon demand by such Lender, the applicable Borrower shall further pay to
such Lender from time to time as specified by such
42
Lender such additional amounts as are sufficient to compensate such Lender
or other corporation for such reduction.
3.3.3. Breakage Costs - LIBOR Loans. The applicable Borrower
shall indemnify and hold each Lender free and harmless from all
losses, liabilities and reasonable expenses (including any loss
sustained by that Lender in connection with the re-employment of such
funds), that such Lender may sustain: (a) if for any reason (other
than a default by such Lender or any Agent) a Borrowing of LIBOR Loans
does not occur on a date specified therefor in a Notice of Borrowing
or a telephonic request for borrowing or a continuation of or
conversion to LIBOR Loans does not occur on a date specified therefor
in a Notice of Conversion/Continuation or in a telephonic request for
conversion/continuation, (b) if any prepayment of any of its LIBOR
Loans occurs on a date that is not the last day of an Interest Period,
(c) if any prepayment of any of its LIBOR Loans is not made on any
date specified in a notice of prepayment given by the applicable
Borrower, or (d) as a consequence of any other default by the
applicable Borrower to repay its LIBOR Loans when required by the
terms of this Agreement.
3.3.4. LIBOR Taxes.
(a) The Domestic Borrower shall indemnify and hold each
Lender free and harmless from, and shall pay, prior to the date
on which penalties attach thereto, all present and future income,
stamp and other taxes, levies or costs and charges whatsoever
imposed, assessed, levied or collected on or in respect of a
Domestic Term Loan, Revolving Loan or Swing Line Loan solely as a
result of the interest rate being determined by reference to
LIBOR and/or the provisions of this Agreement related to LIBOR
and/or the recording, registration, notarization or other
formalization of any thereof and/or any payments of principal,
interest or other amounts made on or in respect of a Domestic
Term Loan, Revolving Loan or Swing Line Loan when the interest
rate is determined by reference to LIBOR (all such taxes, levies,
costs and charges being herein collectively called "LIBOR
Taxes"); provided, however, that LIBOR Taxes shall not include:
taxes imposed on or measured by the overall gross or net income
of such Lender or any foreign branch, agency or subsidiary of
such Lender by the United States of America or any political
subdivision or taxing authority thereof or therein, or taxes on
or measured by the overall gross or net income of that Lender or
any foreign branch, agency or subsidiary of that Lender by any
foreign country or subdivision thereof in which that Lender,
branch, agency or subsidiary is doing business. The Domestic
Borrower also shall indemnify and hold each Lender free and
harmless from, and shall pay such additional amounts equal to,
increases in taxes payable by that Lender described in the
foregoing proviso that are attributable to payments made by the
Domestic Borrower described in the immediately preceding sentence
or this sentence. Promptly after the date on which payment of any
such LIBOR Tax is due pursuant to applicable law, the Domestic
Borrower will, at the request of such Lender, furnish to such
Lender evidence, in form and substance satisfactory to such
Lender, that the Domestic Borrower has met its obligation under
this Section 3.3.4; and the Domestic Borrower will indemnify each
Lender against, and reimburse each Lender on demand
for, any LIBOR Taxes payable by that Lender. Such Lender shall
provide the Domestic Borrower with appropriate receipts
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for any payments or reimbursements made by the Domestic Borrower
pursuant to this Section 3.3.4.
(b) The Euro Borrower shall indemnify and hold each Lender
free and harmless from, and shall pay, prior to the date on which
penalties attach thereto, all present and future income, stamp
and other taxes, levies or costs and charges whatsoever imposed,
assessed, levied or collected on or in respect of a Euro Term
Loan solely as a result of the interest rate being determined by
reference to LIBOR and/or the provisions of this Agreement
related to LIBOR and/or the recording, registration, notarization
or other formalization of any thereof and/or any payments of
principal, interest or other amounts made on or in respect of a
Euro Term Loan when the interest rate is determined by reference
to LIBOR (all such taxes, levies, costs and charges being herein
collectively called "LIBOR Taxes"); provided, however, that LIBOR
Taxes shall not include: taxes imposed on or measured by the
overall gross or net income of such Lender or any foreign branch,
agency or subsidiary of such Lender by the United States of
America or any political subdivision or taxing authority thereof
or therein, or taxes on or measured by the overall gross or net
income of that Lender or any foreign branch, agency or subsidiary
of that Lender by any foreign country or subdivision thereof in
which that Lender, branch, agency or subsidiary is doing
business. The Euro Borrower also shall indemnify and hold each
Lender free and harmless from, and shall pay such additional
amounts equal to, increases in taxes payable by that Lender
described in the foregoing proviso that are attributable to
payments made by the Euro Borrower described in the immediately
preceding sentence or this sentence. Promptly after the date on
which payment of any such LIBOR Tax is due pursuant to applicable
law, the Euro Borrower will, at the request of such Lender,
furnish to such Lender evidence, in form and substance
satisfactory to such Lender, that the Euro Borrower has met its
obligation under this Section 3.3.4; and the Euro Borrower will
indemnify each Lender against, and reimburse each
Lender on demand for, any LIBOR Taxes payable by that Lender.
Such Lender shall provide the Euro Borrower with appropriate
receipts for any payments or reimbursements made by the Euro
Borrower pursuant to this Section 3.3.4.
3.3.5. Notice of Increased Costs; Payment. Each Lender will
promptly notify the Administrative Agent (with a copy to the
applicable Borrower) of any event of which it has knowledge,
occurring after the date hereof, that entitles such Lender to
compensation, reimbursement or indemnity pursuant to this Section
3.3 or Section 3.4, and shall furnish to the Administrative Agent
(with a copy to the applicable Borrower) a certificate of such
Lender claiming compensation, reimbursement or indemnity under
this Section 3.3 or Section 3.4, setting forth in reasonable
detail the additional amount or amounts to be paid to it
hereunder if not theretofore paid by the Domestic Borrower or
Euro Borrower, as applicable, as provided in Section 3.4 (which
certificate shall be presumed correct and binding in the absence
of manifest error). In determining such amount, such Lender may
use any reasonable averaging, attribution or allocation methods.
Subject to the provisions of the last sentence of this Section
3.3.5, within fifteen (15) days following receipt of such notice,
the Domestic Borrower or Euro Borrower, as applicable, shall pay
to the Administrative Agent, for distribution to such Lender the
amount shown to be due and payable by such certificate. If any
Lender fails to give such notice in accordance with this Section
3.3.5 within one hundred twenty (120) days after it first obtains
knowledge of such an event, such Lender shall not be entitled to
such compensation,
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reimbursement or indemnity attributable to the period beginning
one hundred twenty (120) days after it first obtains such
knowledge and ending on the date such notice is given.
3.4. Taxes.
3.4.1. Taxes Generally. Any and all payments by the Borrower, any
Guarantor or NN Italy hereunder or under the Notes or the other Loan
Documents shall be made free and clear of and without deduction for any and
all present or future taxes, levies, imposts, deductions, charges or
withholdings, and all liabilities with respect to such payments (including
interest, additions to tax and penalties thereon), excluding, in the case
of each Lender and each Agent, (i) taxes imposed on or measured by its net
income or, in the State of Tennessee or Georgia, as applicable, net assets,
and franchise taxes imposed on it, by the jurisdiction of such Lender's
Lending Office or any political subdivision or taxing authority thereof,
and (ii) withholding taxes that are the subject of Sections 3.4.2 through
3.4.5. If Borrower, any Guarantor or NN Italy shall be required by law to
deduct any such taxes from or in respect of any sum payable hereunder or
under any Note or any other Loan Document to any Lender or any Agent, (a)
the sum payable shall be increased as may be necessary so that after making
all required deductions (including deductions applicable to additional sums
payable under this Section 3.4) such Lender or such Agent (as the case may
be) shall receive an amount equal to the sum it would have received had no
such deductions been made, and (b) the Domestic Borrower or the Euro
Borrower, as applicable, shall pay the full amount deducted to the relevant
taxation authority or other authority in accordance with applicable law. If
and to the extent that any Lender subsequently shall be refunded or
otherwise recover all or any part of any such deduction, it shall refund to
the Domestic Borrower or the Euro Borrower, as applicable, the amount so
recovered.
3.4.2. Withholding Tax Exemption. If any Lender is a "foreign
corporation" within the meaning of the Code, such Lender shall deliver to
the Agents either: (a) if such Lender qualifies for an exemption from or a
reduction of United States withholding tax under a tax treaty, a properly
completed and executed Internal Revenue Service Form W-8BEN before the
payment of any interest is due in the first calendar year and in each third
succeeding calendar year during which interest may be paid under this
Agreement, or (b) if such Lender qualifies for an exemption for interest
paid under this Agreement from United States withholding tax because it
effectively is connected with a United States trade or business of such
Lender, two properly completed and executed copies of Internal Revenue
Service Form W-8ECI before the payment of any interest is due in the first
taxable year of such Lender, and in each succeeding taxable year of such
Lender, during which interest may be paid under this Agreement, and (c)
such other form or forms as may be required or reasonably requested by the
Agents to establish or substantiate exemption from, or reduction of, United
States withholding tax under the Code or other laws of the United States.
Each such Lender agrees to notify the Agents of any change in circumstances
that would modify or render invalid any claimed exemption or reduction.
3.4.3. Withholding Taxes. If any Lender is entitled to a reduction in
the applicable withholding tax, the Administrative Agent or the Euro Loan
Agent, as applicable, may withhold from any interest payment to such Lender
an amount equivalent to the applicable withholding tax after taking into
account such reduction. If the forms or other documentation required by
Section 3.4.2 are not delivered to the Administrative Agent or the Euro
Loan Agent,
45
as the case may be, then the applicable Agent may withhold from any
interest payment to any Lender not providing such forms or other
documentation, an amount equivalent to the applicable withholding tax.
3.4.4. Indemnification. If the Internal Revenue Service or any
authority of the United States or other jurisdiction asserts a claim that
any Agent did not properly withhold tax from amounts paid to or for the
account of any Lender (because the appropriate form was not delivered or
was not properly executed, or because such Lender failed to notify such
Agent of a change in circumstances that rendered the exemption from or
reduction of withholding tax ineffective, or for any other reason) such
Lender shall indemnify such Agent fully for all amounts paid, directly or
indirectly, by such Agent as tax or otherwise, including penalties and
interest, together with all expenses incurred, including legal expenses,
allocated staff costs and any out-of-pocket expenses.
3.4.5. Subsequent Lenders. If any Lender sells, assigns, grants
participations in or otherwise transfers its rights under this Agreement,
the participant shall comply and be bound by the terms of Sections 3.4.2,
3.4.3 and 3.4.4 as though it were such Lender.
3.5. Booking of Loans. Any Lender may make, carry or transfer Loans
at, to or for the account of, any of its branch or agency offices, provided,
however, that in the event that any Lender transfers its Loans to another branch
or agency office in a transaction that does not involve the transfer by such
Lender of any of its other loans to such branch or agency office, such Lender
shall not be entitled to reimbursement for additional costs or taxes with
respect to such Loans pursuant to Section 3.3 or Section 3.4 if the
Borrower would be subject to additional liability under Section 3.3 or
Section 3.4 to which it would not be subject if such Lender's Loans were
maintained at the office at which such Loans were carried prior to such
transfer.
The Borrower acknowledges and agrees that (a) each Lender's method of
funding its Loans hereunder shall be in the sole discretion of such Lender, so
long as such funding complies with all applicable requirements of this
Agreement, and (b) for purposes of any determination to be made pursuant to
Sections 2.11.4 or 3.3.5 of this Agreement, each Lender shall be presumed
conclusively to have funded its LIBOR Loans with the proceeds of Dollar deposits
obtained by such Lender in the interbank Eurodollar market.
ARTICLE 4.
SECURITY
4.1. Initial Security. The Obligations of the Borrower shall be secured by
the Domestic Pledge Agreement, the Domestic Stock Pledge Agreement, the Irish
Pledge Agreement and the Italian Guaranty, and the Euro Obligations shall be
secured by the Euro Pledge Agreement and the Euro Stock Pledge Agreement.
4.2. Further Assurances. The Borrower and the Guarantors shall, and shall
cause each of their respective Subsidiaries to, at their sole cost and expense,
execute and deliver to
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the Administrative Agent and the Lenders all such further documents, instruments
and agreements and perform all such other acts that reasonably may be required
in the opinion of the Administrative Agent to enable the Administrative Agent
and the Lenders to exercise and enforce their respective rights as the secured
parties under the Security Documents and to carry out the provisions or
effectuate the purposes of this Agreement and the other Loan Documents. To the
extent permitted by applicable law, the Borrower and the Guarantors hereby
authorize the Administrative Agent on behalf of itself and the Lenders to file
Financing Statements and continuation statements with respect to the security
interests granted or assigned under the Security Documents and to execute such
Financing Statements and continuation statements on behalf of the Borrower, the
Guarantors and their respective Subsidiaries. The Administrative Agent shall
furnish to the Borrower, the Guarantors and their respective Subsidiaries copies
of all such Financing Statements and continuation statements filed by the
Administrative Agent on behalf of the Lenders pursuant to this Section 4.2.
ARTICLE 5.
GUARANTY
5.1. Guaranty.
(a) Each of the Guarantors hereby unconditionally and
irrevocably, jointly and severally, guarantees to the Agents and the
Lenders the due and punctual payment and performance of all of the
Euro Obligations, in each case as and when the same shall become due
and payable, whether at maturity, by acceleration, mandatory
prepayment or otherwise, according to their terms. In case of failure
by a Principal Obligor of any Euro Obligation punctually to pay or
perform such Euro Obligation, each of the Guarantors hereby
unconditionally and irrevocably agrees to cause such payment to be
made punctually as and when the same shall become due and payable,
whether at maturity, by prepayment, declaration or otherwise, and to
cause such performance to be rendered punctually as and when due, in
the same manner as if such payment or performance were made by such
Principal Obligor. This guaranty is and shall be a guaranty of payment
and performance and not merely of collection.
(b) Each of the Domestic Guarantors hereby unconditionally and
irrevocably, jointly and severally, guarantees to the Agents and the
Lenders the due and punctual payment and performance of all of the
Domestic Obligations, in each case as and when the same shall become
due and payable, whether at maturity, by acceleration, mandatory
prepayment or otherwise, according to their terms. In case of failure
by a Principal Obligor of any Domestic Obligation punctually to pay or
perform such Domestic Obligation, each of the Domestic Guarantors
hereby unconditionally and irrevocably agrees to cause such payment to
be made punctually as and when the same shall become due and payable,
whether at maturity, by prepayment, declaration or otherwise, and to
cause such performance to be rendered punctually as and when due, in
the same manner as if such payment or performance were made by such
Principal Obligor. This guaranty is and shall be a guaranty of payment
and performance and not merely of collection.
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5.2. Maximum Guaranty Liability.
(a) Except with respect to the Domestic Borrower, each
Guarantor's respective obligations hereunder and under the other Loan
Documents shall be in an amount equal to, but not in excess of, the
maximum liability permitted under Applicable Bankruptcy Law (the
"Maximum Guaranty Liability"). To that end, but only to the extent
such obligations otherwise would be subject to avoidance under
Applicable Bankruptcy Law if any Guarantor (other than the Domestic
Borrower) is deemed not to have received valuable consideration, fair
value or reasonably equivalent value for its obligations hereunder or
under the other Loan Documents, each such Guarantor's respective
obligations hereunder and under the other Loan Documents shall be
reduced to that amount which, after giving effect thereto, would not
render such Guarantor insolvent, or leave such Guarantor with an
unreasonably small capital to conduct its business, or cause such
Guarantor to have incurred debts (or to be deemed to have intended to
incur debts), beyond its ability to pay such debts as they mature, at
the time such obligations are deemed to have been incurred under
Applicable Bankruptcy Law. As used herein, the terms "insolvent" and
"unreasonably small capital" likewise shall be determined in
accordance with Applicable Bankruptcy Law. This Section 5.2 is
intended solely to preserve the rights of the Lenders and the Agents
hereunder and under the other Loan Documents to the maximum extent
permitted by Applicable Bankruptcy Law, and neither the Guarantors nor
any other Person shall have any right or claim under this Section 5.2
that otherwise would not be available under Applicable Bankruptcy Law.
(b) Each Guarantor (other than the Domestic Borrower) agrees that
the Guaranteed Obligations at any time and from time to time may
exceed the Maximum Guaranty Liability of such Guarantor, and may
exceed the aggregate Maximum Guaranty Liability of all Guarantors
hereunder, without impairing this Guaranty or affecting the rights and
remedies of the Lenders and the Agents hereunder.
(c) Without limiting the foregoing, the maximum amount of NN
Ireland's liability hereunder shall be the sum of (i) the aggregate
principal amount of any advances made by any Borrower or Subsidiary to
NN Ireland which are used exclusively for the purposes of NN
Irelalnd's business operations in Ireland, (ii) interest with respect
to such amount and (iii) any and all expenses incurred by the
Administrative Agent or the Lenders in endeavoring to collect and/or
enforce the obligations of NN Ireland under this Agreement.
5.3. Contribution.
(a) In the event any Guarantor or NN Italy (a "Funding
Guarantor") shall make any payment or payments under this Guaranty or
under the Italian Guaranty with respect to the Guaranteed Euro
Obligations, or shall suffer any loss as a result of any realization
upon any of its property granted as Euro Collateral under any Loan
Document, each other Guarantor (each, a "Contributing Guarantor") shall
contribute to such Funding Guarantor an amount equal to such
Contributing Guarantor's "Pro Rata Share" of such
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payment or payments made, or losses suffered, by such Funding
Guarantor. For the purposes hereof, each Contributing Guarantor's Pro
Rata Share with respect to any such payment or loss by a Funding
Guarantor shall be determined as of the date on which such payment or
loss was made by reference to the ratio of (a) such Contributing
Guarantor's Maximum Guaranty Liability as of such date (without giving
effect to any right to receive, or obligation to make, any
contribution hereunder) to (b) the aggregate Maximum Guaranty
Liability of all Guarantors and NN Italy (including such Funding
Guarantor) as of such date (without giving effect to any right to
receive, or obligation to make, any contribution hereunder). Nothing
in this Section 5.3 shall affect each Guarantor's several liability
for the entire amount of the Guaranteed Euro Obligations (up to such
Guarantor's Maximum Guaranty Liability). Each Guarantor covenants and
agrees that its right to receive any contribution hereunder from a
Contributing Guarantor shall be subordinate and junior in right of
payment to all the Guaranteed Euro Obligations.
(b) In the event any Domestic Guarantor or NN Italy (a
"Funding Domestic Guarantor") shall make any payment or payments under
this Guaranty or under the Italian Guaranty with respect to the
Guaranteed Domestic Obligations or shall suffer any loss as a result of
any realization upon any of its property granted as Domestic Collateral
under any Loan Document, each other Domestic Guarantor (each, a
"Contributing Domestic Guarantor") shall contribute to such Funding
Domestic Guarantor an amount equal to such Contributing Domestic
Guarantor's "Pro Rata Share" of such payment or payments made, or
losses suffered, by such Funding Domestic Guarantor. For the purposes
hereof, each Contributing Domestic Guarantor's Pro Rata Share with
respect to any such payment or loss by a Funding Domestic Guarantor
shall be determined as of the date on which such payment or loss was
made by reference to the ratio of (a) such Contributing Domestic
Guarantor's Maximum Guaranty Liability as of such date (without giving
effect to any right to receive, or obligation to make, any contribution
hereunder) to (b) the aggregate Maximum Guaranty Liability of all
Domestic Guarantors and NN Italy (including such Funding Domestic
Guarantor) as of such date (without giving effect to any right to
receive, or obligation to make, any contribution hereunder). Nothing in
this Section 5.3 shall affect each Domestic Guarantor's several
liability for the entire amount of the Guaranteed Domestic Obligations
(up to such Domestic Guarantor's Maximum Guaranty Liability). Each
Domestic Guarantor covenants and agrees that its right to receive any
contribution hereunder from a Contributing Domestic Guarantor shall be
subordinate and junior in right of payment to all the Guaranteed
Domestic Obligations.
5.4. Guaranty Unconditional. The obligations of each Guarantor under this
Article 5 shall be continuing, unconditional and absolute and, without limiting
the generality of the foregoing, shall not be released, discharged or otherwise
affected by:
(a) any extension, renewal, settlement, compromise, waiver or
release in respect of any Obligation of the Borrower under this
Agreement or any other Loan Document, by operation of law or
otherwise;
(b) any modification or amendment or supplement to this Agreement
or any other Loan Document;
49
(c) any modification, amendment, waiver, release, non-perfection
or invalidity of any direct or indirect security, or of any guaranty
or other liability of any third party, for any Obligation of the
Borrower under this Agreement or any other Loan Document;
(d) any change in the existence, structure or ownership of the
Borrower, any Guarantor or NN Italy, or any insolvency, bankruptcy,
reorganization or other similar case or proceeding affecting the
Borrower, any Guarantor, NN Italy or any of their respective assets,
or any resulting release or discharge of any Obligation of the
Borrower under this Agreement or any other Loan Document;
(e) the existence of any claim, set-off or other right that any
Guarantor or NN Italy at any time may have against the Borrower, the
Agents, any Lender or any other Person, regardless of whether arising
in connection with this Agreement or any other Loan Document;
(f) any invalidity or unenforceability relating to or against the
Borrower for any reason of the whole or any provision of this
Agreement or any other Loan Document or any provision of Applicable
Bankruptcy Law purporting to prohibit the payment or performance by
the Borrower of any Obligation, or the payment by the Borrower of any
other amount payable by it under this Agreement or any other Loan
Document; or
(g) any other act or omission to act or delay of any kind by the
Borrower, the Agents, any Lender or any other Person or any other
circumstance whatsoever that might but for the provisions of this
Section 5.4 constitute a legal or equitable discharge of the
obligations of any Guarantor under this Article 5.
5.5. Discharge Only Upon Payment in Full; Reinstatement in Certain
Circumstances. Each Guarantor's obligations under this Article 5 shall remain in
full force and effect so long as any Obligations are unpaid, outstanding or
unperformed or any of the Commitments are in effect. If at any time any payment
of the Obligations or any other amount payable by the Borrower under this
Agreement or the other Loan Documents is rescinded or otherwise must be restored
or returned upon the insolvency, bankruptcy or reorganization of the Borrower or
otherwise, each Guarantor's obligations under this Article 5 with respect to
such payment shall be reinstated at such time as though such payment had become
due but not been made at such time.
5.6. Waiver. Each Guarantor irrevocably waives acceptance hereof,
presentment, demand, protest, notice of any breach or default by the Borrower
and any other notice not specifically provided for herein, as well as any
requirement that at any time any action be taken by any Person against the
Borrower or any other Person or any Collateral granted as security for the
Obligations or the Guaranteed Obligations. Each Guarantor hereby specifically
waives any right to require that an action be brought against the Borrower or
any other Principal Obligor with respect to the Obligations under the provisions
of Title 47, Chapter 12, Tennessee Code Annotated, as the same may be amended
from time to time.
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5.7. Waiver of Reimbursement, Subrogation, Etc. Each Guarantor hereby
waives to the fullest extent possible as against the Borrower and its assets any
and all rights, whether at law, in equity, by agreement or otherwise, to
subrogation, indemnity, reimbursement, contribution, exoneration or any other
similar claim, right, cause of action or remedy that otherwise would arise out
of such Guarantor's performance of its obligations to any Agent or any Lender
under this Article 5. The preceding waiver is intended by the Guarantors, the
Agents and the Lenders to be for the benefit of the Borrower or any of its
successors and permitted assigns as an absolute defense to any action by any
Guarantor against the Borrower or its assets that arises out of such Guarantor's
having made any payment to the any Agent or any Lender with respect to any of
the Guaranteed Obligations.
5.8. Stay of Acceleration. If acceleration of the time for payment of any
amount payable by the Borrower under this Agreement is stayed upon the
insolvency, bankruptcy or reorganization of the Borrower, all such amounts
otherwise subject to acceleration under the terms of this Agreement shall
nonetheless be payable by the Guarantors hereunder forthwith on demand by the
Administrative Agent as directed by Requisite Lenders.
5.9. Subordination of Indebtedness. Any indebtedness of the Borrower for
borrowed money now or hereafter owed to any Guarantor is hereby subordinated in
right of payment to the payment by the Borrower of the Obligations, and if a
default in the payment of the Obligations shall have occurred and be continuing,
any such indebtedness of the Borrower owed to any Guarantor, if collected or
received by such Guarantor, shall be held in trust by such Guarantor for the
holders of the Obligations and be paid over to the Administrative Agent for
application in accordance with this Agreement and the other Loan Documents.
5.10. Certain Releases. Provided that no Default has occurred and is
continuing or would result therefrom:
(a) in the event that any asset sale permitted under Section
9.3(d) consists in whole or in part of the sale of all of the capital
stock of (or other ownership interests in) a Subsidiary that is owned
by the Borrower or any other Subsidiary of the Borrower, upon the
request of the Borrower the Administrative Agent shall release the
Subsidiary whose stock (or other ownership interests) has (have) been
sold from any duties and obligations to the Lenders pursuant to this
Agreement and the other Loan Documents to which such Subsidiary may be
a party, provided that at the times of such request and release any
Indebtedness evidenced by a Pledged Note made by such Subsidiary has
been fully satisfied; and
(b) in connection with any other asset sale permitted under
Section 9.3(d), upon the request of the Borrower the Administrative
Agent shall execute and deliver any instruments reasonably required to
release the assets sold from the Liens of the Loan Documents.
5.11. Third Party Beneficiary. Notwithstanding anything herein to the
contrary, NN Italy shall have all of the rights, benefits and entitlements set
forth in Section 5.3 hereof as a third party beneficiary.
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ARTICLE 6.
CONDITIONS PRECEDENT
6.1. Conditions Precedent to Initial Loans. The effectiveness of this
Agreement and the obligations of the Lenders to make the Loans are all subject
to the satisfaction by the Borrower, the Guarantors and their respective
Subsidiaries, to the extent not waived by the Lenders, of the following
conditions precedent:
6.1.1. Deliveries to the Administrative Agent. The Administrative
Agent shall have received, for the ratable benefit of each Lender (and in
such number of original counterparts or copies as the Administrative Agent
reasonably may specify), each of the following, in form and substance
satisfactory to the Administrative Agent, the Lenders and their respective
counsel:
(a) Agreement. Counterpart originals of this Agreement, each duly
and validly executed and delivered by or on behalf of all the
appropriate parties thereto;
(b) Notes. The Notes, each duly and validly executed and
delivered on behalf of the Domestic Borrower and the Euro Borrower, as
applicable;
(c) Security Documents. The Pledge Agreements, the Stock Pledge
Agreements, the Italian Guaranty and other Security Documents, each
duly and validly executed and delivered by or on behalf of all the
appropriate parties thereto;
(d) Pledged Notes. The Pledged Notes, together with appropriate
instruments of assignment attached thereto, duly endorsed in blank by
the Domestic Borrower or the Euro Borrower, as applicable, or the
appropriate Guarantor, as the case may be;
(e) Organizational Documents. Copies of the charters, articles or
certificates of incorporation or other organizational documents of the
Borrower, each Guarantor and NN Italy, certified by the Secretary of
State or other appropriate public official in each jurisdiction of
organization, all in form and substance satisfactory to the Lenders;
(f) Bylaws and Operating Agreements. Copies of the bylaws or
operating agreements, as the case may be, and all amendments thereto,
of the Borrower, each Guarantor and NN Italy, together with
certificates of the respective Secretaries or Assistant Secretaries of
the Borrower, each Guarantor and NN Italy, dated the date hereof,
stating that such copy is complete and correct;
(g) Good Standing and Authority. Certificates of the appropriate
governmental officials of each jurisdiction as the Administrative
Agent reasonably may request, dated within thirty (30) days of the
date hereof, stating that the Borrower, each Guarantor and NN Italy
exist, and are in good standing with respect to the payment of
franchise and similar taxes and are duly qualified to transact
business therein;
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(h) Incumbency. Certificates of the respective Secretaries or
Assistant Secretaries of the Borrower, each of the Guarantors and NN
Italy, dated the date hereof, as to the incumbency and signature of
all officers of the Borrower, such Guarantor or NN Italy authorized to
execute or attest to this Agreement, the Notes and the other Loan
Documents to which the Borrower, each such Guarantor, or NN Italy is a
party, together with evidence of the incumbency of each such Secretary
or Assistant Secretary;
(i) Resolutions. With respect to the Borrower, each of the
Guarantors and NN Italy (i) copies of the resolutions authorizing,
approving and ratifying this Agreement, the Notes, the Security
Documents and the other Loan Documents and the transactions
contemplated herein and therein, duly adopted by the respective boards
of directors or other managers of the Borrower, each of the Guarantors
and NN Italy, together with (ii) certificates of the respective
Secretaries or Assistant Secretaries of the Borrower, each of the
Guarantors and NN Italy, dated the date hereof, stating that each such
copy is a true and correct copy of resolutions duly adopted at a
meeting, or by action taken on written consent, of the board of
directors or other managers of the Borrower, such Guarantor or NN
Italy, and that such resolutions have not been modified, amended,
rescinded or revoked in any respect and are in full force and effect
as of the date hereof;
(j) Legal Opinions of the Borrower's, Guarantors' and NN Italy's
Counsel. The favorable legal opinion of Messrs. Xxxxxxxxx Xxxxxxx
Xxxxx Xxxxxx LLP, counsel to the Borrower, the Guarantors and NN
Italy, dated the date hereof, and addressed to the Administrative
Agent and the Lenders, substantially in the form of Exhibit 6.1.1A and
such other opinions of counsel as the Administrative Agent may
reasonably require;
(k) Officer's Certificate. A certificate of a Responsible
Officer of the Borrower, each of the Guarantors and NN Italy, dated
the date hereof, stating that (i) each of the representations and
warranties contained in Article 7 is true and correct at and as of the
date hereof with the same force and effect as if made on such date,
(ii) all obligations, covenants, agreements and conditions contained
in this Agreement to be performed or satisfied by the Borrower or such
Guarantor on or prior to the date hereof have been performed or
satisfied in all respects, (iii) since December 31, 2002, there has
been no Material Adverse Change, and (iv) no Default has occurred and
is continuing, and in addition setting forth in such detail as shall
be required by the Lenders calculations of the financial ratios and
covenants contained in this Agreement showing that as of the date
hereof and after giving effect to the transactions that are the
subject hereof the Borrower, the Guarantors and NN Italy are in
compliance with Article 10;
(l) Solvency Certificates. (i) A solvency certificate of a
Responsible Officer of each Borrower, in substantially the form of
Exhibit 6.1.1B hereto, and (ii) a solvency certificate of the
Responsible Officer of each Guarantor and NN Italy, in substantially
the form of Exhibit 6.1.1C (collectively, the "Solvency
Certificates");
(m) Consents. Evidence that the Borrower, each Guarantor and NN
Italy have obtained all requisite consents and approvals required to
be obtained from any Person to permit
53
the transactions contemplated by this Agreement, the Notes and the
other Loan Documents to be consummated in accordance with their
respective terms and conditions (other than consent from Bayerische
Hypo-und Vereinsbank AG, whose credit arrangement with the Borrower
will be fully repaid and terminated simultaneously with the closing of
the transactions evidenced hereby);
(n) Purchase of Euro Borrower Interests. The Administrative Agent
shall have approved in all respects the acquisition agreement and all
other documentation in connection with the purchase by the Domestic
Borrower of all shares of the Euro Borrower held by SKF;
(o) Purchase of SKF Tapered Roller Operation. The Administrative
Agent shall have approved in all respects the acquisition agreement
and all other documentation in connection with the SKF-Veenendaal
Acquisition;
(p) Lien Search Reports. Lien search reports from a search firm
acceptable to the Administrative Agent, identifying all of the
financing statements or other evidence of liens on file with respect
to the Borrower, the Guarantors and NN Italy in all jurisdictions
required by the Administrative Agent;
(q) Recordings and Filings. (1) Acknowledgment copies of
Financing Statements duly filed under the UCC or other evidence of
Liens required to be filed under applicable laws in all jurisdictions
necessary or, in the opinion of the Administrative Agent, desirable to
perfect the security interests created by the Security Documents, (2)
lien search reports from a search firm acceptable to the
Administrative Agent, identifying all of the financing statements on
file with respect to the Borrower in all jurisdictions referred to
under the preceding item (1), indicating that no Person claims an
interest in any of the Collateral described in such Financing
Statements, and (3) evidence of the public recording or filing of such
of the Security Documents as the Administrative Agent deems it
necessary or desirable to record or file publicly, in such offices as
the Administrative Agent shall require, together with evidence
satisfactory to the Administrative Agent of the priority of the Liens
of such Security Documents;
(r) Pledged Ownership Interest. (1) A binding agreement from
Bayerische Hypo-und Vereinsbank AG to release and deliver to the
Administrative Agent the certificates evidencing the ownership
interests pledged pursuant to the Stock Pledge Agreements (to the
extent such ownership interests are represented by certificates
immediately after the consummation of the transaction evidenced
hereby), and (2) an appropriate stock power for each certificate, as
applicable, duly executed in blank by the Domestic Borrower or the
Euro Borrower, as the case may be; and
(s) Other Matters. All other documents, instruments, agreements,
opinions, certificates, insurance policies, consents and evidences of
other legal matters, in form and substance satisfactory to the
Administrative Agent and its counsel, as the Administrative Agent
reasonably may request.
54
6.1.2. Compliance with Laws. The Borrower, the Guarantors and their
respective Subsidiaries shall not be in violation of, and shall not have
received notice of any violation of, any applicable Requirement of Law,
including any building, zoning, occupational safety and health, fair
employment, equal opportunity, pension, environmental control, health care,
certificate of need, health care facility licensing or similar federal,
state or local law, ordinance or regulation, relating to the ownership or
operation of its business or assets, if such violation or non-compliance
could have a Material Adverse Effect, and if requested by the
Administrative Agent the Borrower, the Guarantors or their respective
Subsidiaries shall have furnished to the Administrative Agent and the
Lenders copies of all required approvals (including required operating
licenses and permits) of any Governmental Authority.
6.1.3. No Material Adverse Change. Since December 31, 2002, no
Material Adverse Change (as determined by the Administrative Agent and the
Lenders in their sole discretion) shall have occurred.
6.1.4. No Material Misrepresentation. No material misrepresentation or
omission shall have been made by or on behalf of the Borrower, any
Guarantor or NN Italy to the Administrative Agent or the Lenders with
respect to the Borrower's, such Guarantor's or NN Italy's business
operations or financial or other condition.
6.1.5. Legal Proceedings. Except as set forth on Schedule 7.6, no
action, suit, proceeding or investigation shall be pending before or
threatened by any court or Governmental Authority with respect to the
transactions contemplated hereby or that may have a Material Adverse Effect
(as determined by the Administrative Agent and the Lenders, in their sole
discretion).
6.1.6. Subordinated Indebtedness. If requested by the Administrative
Agent, any creditor holding Subordinated Indebtedness shall have entered
into an intercreditor and subordination agreement with the Administrative
Agent in form and substance reasonably satisfactory to the Lenders and
consistent with the definition of Subordinated Indebtedness set forth
herein.
6.2. Conditions Precedent to All Loans. The obligations of each of the
Lenders to make any Loans (including Loans used to refinance or repay other
Loans) on any date (including the date hereof) are subject to the
satisfaction of the conditions set forth below in this Section 6.2. Each
request for Loans hereunder shall constitute a representation and warranty
by the Borrower to the Administrative Agent and each Lender, as of the date
of the making of such Loans, that the conditions in this Section 6.2 have
been satisfied.
6.2.1. Satisfaction of Conditions Precedent to Initial Loans. The
conditions precedent set forth in Section 6.1 shall have been
satisfied.
6.2.2. Representations and Warranties. The representations and
warranties of the Borrower, the Guarantors and NN Italy set forth in
this Agreement, the Notes and the other Loan Documents, as applicable,
and in any certificate, opinion or other statement provided at any
time by or on behalf of the Borrower, any Guarantor or NN Italy in
connection herewith shall be true
55
and correct on and as of the date of the making of such Loans as if
made on and as of such date, except to the extent that a
representation or warranty is made as of a specific date, in which
event such representation or warranty shall remain true and correct as
of such earlier date, and except to the extent that a representation
or warranty is no longer correct by virtue of changes permitted by the
terms of this Agreement.
6.2.3. No Default. No Default shall have occurred and be
continuing on the date of the requested Borrowing or after giving
effect to such Borrowing.
6.2.4. No Violations. No law or regulation shall prohibit the
making of the requested Loan and no order, judgment or decree of any
court or Governmental Authority shall, and no litigation shall be
pending that in the judgment of the Administrative Agent or Requisite
Lenders would, enjoin, prohibit or restrain any Lender from making a
requested Loan.
6.2.5. Proceedings Satisfactory. All proceedings in connection
with the making of any Loan, and the other transactions contemplated
by this Agreement, the Loan Documents and all documents incidental
thereto shall be satisfactory to the Administrative Agent, and the
Administrative Agent shall have received all such information and such
counterpart originals or certified or other copies of such documents
as the Administrative Agent reasonably may request.
ARTICLE 7.
REPRESENTATIONS AND WARRANTIES
In order to induce the Administrative Agent and the Lenders to enter
into this Agreement, to make the Loans and to provide the other financial
accommodations provided for herein, the Borrower and each of the Guarantors
hereby make the following representations and warranties to the Administrative
Agent and each Lender:
7.1. Existence and Power.
(a) The Borrower, each of the Guarantors and each of their
respective Subsidiaries are entities of the type designated on Schedule
7.1 and are duly organized, validly existing and in good standing under
the laws of the jurisdiction indicated next to the name of such entity
on Schedule 7.1. The Borrower, each of the Guarantors and each of their
respective Subsidiaries have the power, authority and legal right to
own and operate their respective properties and assets, to lease the
properties and assets they operate under lease and to carry on their
respective businesses as they are now being conducted and intended to
be conducted, and are duly qualified to transact business in, and in
good standing under the laws of, each jurisdiction in which their
ownership, lease or operation of property or the conduct of their
respective businesses requires such qualification, except to the extent
that failure to qualify to transact business will not have a Material
Adverse Effect.
(b) Euro Borrower is unable to become a party to this
Agreement as a Domestic Guarantor or as an Additional Domestic
Guarantor because the law of the
56
jurisdiction of its organization prohibits the Euro Borrower from
guaranteeing the Indebtedness of or granting loans to the Domestic
Borrower.
7.2. Authorization and Enforceability of Obligations. The Borrower, each of
the Guarantors and each of their respective Subsidiaries (a) have the power,
authority and legal right to enter into this Agreement and such of the Loan
Documents to which each is a party and to enter into and perform their
respective obligations hereunder and thereunder, and (b) have taken all
necessary action on the part of each to authorize the execution and delivery of
such documents, instruments and agreements and the performance of their
respective obligations hereunder and thereunder. This Agreement, the Notes and
the other Loan Documents have been duly executed and delivered on behalf of the
Borrower, each of the Guarantors and such of their respective Subsidiaries as
are parties to such Loan Documents, and constitute legal, valid and binding
obligations, enforceable against the Borrower, the Guarantors and their
respective Subsidiaries as are parties hereto or thereto in accordance with
their respective terms.
7.3. No Consents. Except as set forth on Schedule 7.3, all necessary
consents, approvals and authorizations of, filings with and acts by or with
respect to all Governmental Authorities and other Persons required to be
obtained, made or taken in connection with the execution, delivery, performance,
validity or enforceability of this Agreement, the Notes and the other Loan
Documents, or otherwise in connection with the transactions contemplated hereby,
have been obtained, made or taken and remain in effect. 7.4. No Conflict. Except
as set forth on Schedule 7.4, the execution and delivery of this Agreement, the
Notes and the other Loan Documents, the transactions contemplated hereby, the
use of the proceeds of the Loans and the performance by the Borrower, the
Guarantors and such of their respective Subsidiaries as are parties to the Loan
Documents of their respective obligations hereunder and thereunder (a) do not
conflict with or violate any Requirement of Law or any Contractual Obligation of
the Borrower, such Guarantor or such Subsidiary, except to the extent that any
such violation or conflict will not have a Material Adverse Effect, and (b) do
not conflict with, constitute a default or require any consent under, or result
in the creation of any Lien upon any property or assets of the Borrower, such
Guarantor or such Subsidiary pursuant to any Contractual Obligation of the
Borrower, such Guarantor or such Subsidiary (other than Liens in favor of the
Administrative Agent and the Lenders), except to the extent that any such
conflict or default or the failure to obtain any necessary consent will not have
a Material Adverse Effect.
7.5. Financial Statements; Projections; Solvency.
(a) The consolidated balance sheet of the Domestic Borrower and
its Subsidiaries as of December 31, 2002, and the related consolidated
statements of income, shareholders' equity and cash flows for the
Fiscal Year then ended, together with the opinion of KPMG LLP with
respect thereto, and together with the unaudited consolidating balance
sheet of the Domestic Borrower and its Subsidiaries as of the end of
such Fiscal Year and the unaudited consolidating statement of income
of the Domestic Borrower and its Subsidiaries for such Fiscal Year,
copies of all of which have been furnished to the Administrative
Agent, are complete and correct and fairly present the assets,
liabilities and consolidated financial position of the Domestic
Borrower and its
57
Subsidiaries as at such date and the consolidated results of their
operations and their cash flows for the Fiscal Year then ended.
(b) The financial statements described in the preceding paragraph
(a), including the related schedules and notes thereto, have been
prepared in conformity with GAAP applied consistently throughout the
periods involved. Neither the Borrower nor any of its Subsidiaries has
any material Indebtedness, obligation or other unusual forward or
long-term commitment that is not fairly reflected in the foregoing
financial statements or in the notes thereto.
(c) In the opinion of the management of the Domestic Borrower,
the assumptions used in the preparation of the Projections were
reasonable when made and as of December 3, 2002. The Projections were
prepared in good faith by executive and financial personnel of the
Domestic Borrower in light of the historical financial performance and
the financial and operating condition of the Domestic Borrower and its
Subsidiaries at the time prepared and, in the opinion of the
management of the Domestic Borrower and the Guarantors, represented,
as of December 3, 2002, a reasonable estimate of the future
performance and financial condition of the Domestic Borrower and its
Subsidiaries for the periods included therein, subject to the
uncertainties and approximations inherent in the making of any
financial projections and without assurance that the projected
performance and financial condition actually will be achieved.
(d) After giving effect to the consummation of the transactions
contemplated by this Agreement, the making of Loans hereunder and the
incurrence by the Domestic Borrower and the Guarantors of the
Obligations incurred by each pursuant to this Agreement, each of the
Domestic Borrower, the Guarantors and their respective Subsidiaries is
Solvent.
7.6. Absence of Litigation. Except as otherwise set forth in Schedule 7.6,
there are no actions, suits, proceedings or other litigation (including
proceedings by or before any arbitrator or Governmental Authority) pending or,
to the knowledge of the Borrower, threatened against or affecting the Borrower,
the Guarantors or any of their respective Subsidiaries, nor to the knowledge of
the Borrower and the Guarantors is there any basis therefor, (a) that challenge
the validity or propriety of the transactions contemplated hereby, or (b) that
reasonably can be expected to be adversely determined and, if adversely
determined, to have a Material Adverse Effect, either individually or in the
aggregate.
7.7. No Default. Neither the Borrower nor any Guarantor nor any of their
respective Subsidiaries is in default (nor has any event occurred that with
notice or lapse of time or both would constitute a default) under any
Contractual Obligation of the Borrower, any Guarantor or any of their respective
Subsidiaries, if such default or event could have a Material Adverse Effect. No
Default has occurred and is continuing.
7.8. Security Documents. The Security Documents create in favor of the
Administrative Agent for the ratable benefit of the Lenders valid, perfected
security interests in the Collateral subject to no Liens other than Permitted
Liens. The security interests granted in favor of the Administrative Agent as
contemplated by this Agreement and the Security
58
Documents do not constitute a fraudulent conveyance under the federal Bankruptcy
Code or any applicable state law.
7.9. Capitalization. The capitalization of the Borrower, the Guarantors and
their respective Subsidiaries consists of such number of shares or other
ownership interests, authorized, issued and outstanding, of such classes and
series, with or without such par value, as are set forth in Schedule 7.1. All
such outstanding shares or other ownership interests, have been duly authorized
and validly issued and are fully paid and nonassessable. There are no
outstanding stock purchase warrants, subscriptions, options, securities,
instruments or other rights of any type or nature whatsoever that are
convertible into, exchangeable for or otherwise provide for the issuance of
capital stock or other ownership interests, of the Borrower, any Guarantor or
any of their respective Subsidiaries, except as described in Schedule 7.1.
7.10. Taxes. The Borrower, the Guarantors and their respective
Subsidiaries have filed all tax returns that were required to be filed in any
jurisdiction and have paid all taxes shown thereon to be due or otherwise due
upon the Borrower, the Guarantors, their respective Subsidiaries or their
respective properties, income or franchises, including interest, assessments,
fees and penalties, or have provided adequate reserves for the payment thereof.
To the knowledge of the Borrower and the Guarantors, no claims are threatened,
pending or being asserted with respect to, or in connection with, any return
referred to in this Section 7.10 that, if adversely determined, could have a
Material Adverse Effect.
7.11. No Burdensome Restrictions. No Contractual Obligation or Requirement
of Law relating to or otherwise affecting the Borrower, any Guarantor, any of
their respective Subsidiaries or any of the respective properties, businesses or
operations thereof has had or, insofar as the Borrower or any of the Guarantors
reasonably may foresee is likely to have, a Material Adverse Effect.
7.12. Judgments. There are no outstanding or unpaid judgments against the
Borrower, any of the Guarantors or any of their respective Subsidiaries.
7.13. Subsidiaries. Each of the Subsidiaries of the Borrower and the
Guarantors as of the date hereof is set forth in Schedule 7.1. Schedule 7.1 also
shows as of the date hereof as to each such Subsidiary the jurisdiction of its
incorporation or formation, the number of shares of each class of capital stock
outstanding, the direct owner of the outstanding shares of each such class and
the number of shares owned, and the jurisdictions in which such Subsidiary is
qualified to do business as a foreign corporation.
7.14. ERISA. No "prohibited transaction" or "accumulated funding
deficiency" (each as defined in ERISA) or Reportable Event has occurred with
respect to any Single Employer Plan, or to the knowledge of Borrower and the
Guarantors with respect to any Multi-Employer Plan. As of the most recent
actuarial valuation of any such Plan, the actuarial present value of all
benefits under each Plan (based on those assumptions used to fund the Plan) does
not exceed the fair market value of the assets of the Plan allocable to such
benefits. The Borrower, the Guarantors, their respective Subsidiaries and each
Commonly Controlled Entity are in
59
compliance in all material respects with ERISA
and the rules and regulations promulgated thereunder.
7.15. Margin Securities. None of the Borrower, the Guarantors or any of
their respective Subsidiaries is engaged principally in, nor has as one of its
significant activities, the business of extending credit for the purpose of
purchasing or carrying "margin stock" as that term is defined in Regulation U
promulgated by the Board of Governors of the Federal Reserve System, as now in
effect. No part of the Indebtedness evidenced by the Notes, or otherwise created
in connection with this Agreement or the other Loan Documents, has been or will
be used, directly or indirectly, for the purpose of purchasing any such margin
stock. If requested by the Administrative Agent or any of the Lenders, the
Borrower shall furnish or cause to be furnished to the Administrative Agent and
each such Lender a statement, in conformity with the requirements of Federal
Reserve Form U-1 referred to in Regulation U, to the foregoing effect.
7.16. Investment Company Act. None of the Borrower, the Guarantors or any
of their respective Subsidiaries is an "investment company," or company
"controlled" by an investment company within the meaning of the Investment
Company Act of 1940, as now in effect.
7.17. Indebtedness and Contingent Obligations. Set forth on Schedule 7.17A
hereto is a complete and correct list of all Indebtedness (other than Contingent
Obligations, Indebtedness incurred under the Loan Documents, trade debt incurred
in the ordinary course of business and obligations under Operating Leases) of
the Borrower, each Guarantor and each of their respective Subsidiaries and the
aggregate principal amount thereof outstanding on the date hereof. Set forth on
Schedule 7.17B is a complete and correct list of all Contingent Obligations
(other than any Contingent Obligations created under the Loan Documents) of the
Borrower, each Guarantor and each of their respective Subsidiaries and the
aggregate amount thereof outstanding on the date hereof.
7.18. Business Locations and Trade Names. Set forth on Schedule 7.18A is a
complete and correct list of the locations where each of the Borrower, the
Guarantors and their respective Subsidiaries maintain their respective chief
executive offices, their principal places of business, an office, a place of
business or any material financial records. Set forth on Schedule 7.18B is a
complete and correct list of each name under or by which each of the Borrower,
the Guarantors and their respective Subsidiaries presently conducts its business
or has conducted its business during the past seven years.
7.19. Title to Assets. The Borrower, the Guarantors and their respective
Subsidiaries have good and marketable title (or good and marketable leasehold
interests with respect to leased property) to all their respective assets
(including all assets constituting a part of the Collateral and all assets
reflected in the consolidated balance sheet as of December 31, 2002), subject to
no Liens other than Permitted Liens.
7.20. Labor Matters. There are no disputes or controversies pending between
the Borrower, the Guarantors or their respective Subsidiaries and their
respective employees, the outcome of which reasonably may be expected to have a
Material Adverse Effect.
60
7.21. Business. There is no pending or threatened claim, action, suit,
proceeding or other litigation against or affecting the Borrower, the Guarantors
or their respective Subsidiaries contesting the right of the Borrower, the
Guarantors or their respective Subsidiaries to conduct their businesses as
presently conducted or as proposed to be conducted, and there are no other facts
or circumstances that have had or reasonably may be expected to have a Material
Adverse Effect.
7.22. Compliance with Laws. The Borrower, the Guarantors and their
respective Subsidiaries (a) have not been, are not and will not be in violation
of any applicable Requirement of Law, including any building, zoning,
occupational safety and health, fair employment, equal opportunity, pension,
environmental control, health care, certificate of need, health care facility
licensing or similar federal, state or local law, ordinance or regulation,
relating to the ownership or operation of their respective businesses or assets,
(b) have not failed to obtain any license, permit, certificate or other
governmental authorization necessary for the conduct of their businesses or the
ownership and operation of their assets, (c) have not received any notice from
any Governmental Authority, and to their knowledge no such notice is pending or
threatened, alleging that the Borrower, any Guarantor or any of their respective
Subsidiaries has violated, or has not complied with, any Requirement of Law,
condition or standard applicable with respect to any of the foregoing, and (d)
are not a party to any agreement or instrument, or subject to any judgment,
order, writ, rule, regulation, code or ordinance, except to the extent that any
violation, noncompliance, failure, agreement, judgment, etc. as described in
this Section 7.22 will not have a Material Adverse Effect.
7.23. Governmental Authorizations; Permits, Licenses and Accreditation;
Other Rights. The Borrower, the Guarantors and their respective Subsidiaries
have all licenses, permits, approvals, registrations, contracts, consents,
franchises, qualifications, certificates of need, accreditations and other
authorizations necessary for the lawful conduct of their respective businesses
or operations wherever now conducted and as planned to be conducted, pursuant to
all applicable statutes, laws, ordinances, rules and regulations of all
Governmental Authorities having, asserting or claiming jurisdiction over the
Borrower, the Guarantors and their respective Subsidiaries or over any part of
their respective operations. Copies of all such licenses, permits, approvals,
registrations, contracts, consents, franchises, qualifications, certificates of
need, accreditations and other authorizations shall be provided to the
Administrative Agent upon request. The Borrower, the Guarantors and their
respective Subsidiaries are not in default under any of such licenses, permits,
approvals, registrations, contracts, consents, franchises, qualifications,
61
certificates of need, accreditations and other authorizations, and no event has
occurred, and no condition exists, that with the giving of notice, the passage
of time or both would constitute a default thereunder or would result in the
suspension, revocation, impairment, forfeiture or non-renewal of any thereof,
except to the extent that the cumulative effect of all such defaults, events,
conditions, suspensions, revocations, impairments, forfeitures and non-renewals
will not have a Material Adverse Effect. The continuation, validity and
effectiveness of all such licenses, permits, approvals, registrations,
contracts, consents, franchises, qualifications, certificates of need,
accreditations and other authorizations will not be adversely affected by the
transactions contemplated by this Agreement. The Borrower, the Guarantors and
their respective Subsidiaries know of no reason why they will not be able to
maintain after the date hereof all licenses, permits, approvals, registrations,
contracts, consents, franchises, qualifications, certificates of need,
accreditations and other authorizations necessary or appropriate to conduct the
businesses of the Borrower, the Guarantors and their respective Subsidiaries as
now conducted and presently planned to be conducted.
7.24. No Material Adverse Change. Since December 31, 2002, no Material
Adverse Change has occurred.
7.25. Environmental Matters. Except as disclosed in Schedule 7.25, (a) none
of the Borrower, the Guarantors or any of their respective Subsidiaries, nor any
of the properties owned or leased thereby or operations thereof, nor, to the
knowledge of the Borrower and the Guarantors, any current or prior owner, lessor
or operator (other than the Borrower or any Guarantor or any of their respective
Subsidiaries) of any properties owned or leased by Borrower or any Guarantor or
any of their respective Subsidiaries, is in violation of any applicable
Environmental Law or any restrictive covenant or deed restriction relating to
environmental matters (recorded or otherwise) or subject to any existing,
pending or threatened investigation, inquiry or proceeding by any Governmental
Authority or subject to any remedial obligations under any Environmental Law,
except to the extent that the cumulative effect of all such violations,
investigations, inquiries, proceedings and remedial obligations will not have a
Material Adverse Effect; (b) all permits, licenses and approvals required of the
Borrowers, the Guarantors or any of their respective Subsidiaries with respect
to Hazardous Materials, including past or present treatment, storage, disposal
or release of any Hazardous Materials or solid waste into the environment, have
been obtained or filed; (c) all Hazardous Materials or solid waste generated by
the Borrower, any Guarantor or any of their respective Subsidiaries have in the
past been, and will continue to be, transported, treated and disposed of only by
carriers maintaining valid permits under all applicable Environmental Laws and
only at treatment, storage and disposal facilities maintaining valid permits
under applicable Environmental Laws, which carriers and facilities have been and
are, to the knowledge of the Borrower and the Guarantors, operating in
compliance with such permits; (d) the Borrower, the Guarantors and their
respective Subsidiaries have taken all reasonable steps necessary to determine,
and have determined, that no Hazardous Materials or solid wastes have been
disposed of or otherwise released by them except in compliance with
Environmental Laws; and (e) neither the Borrower nor any Guarantor nor any of
their respective Subsidiaries has a material contingent liability in connection
with any release of any Hazardous Materials or solid waste into the environment,
and in connection herewith the Borrower hereby agrees to pursue diligently the
resolution of any environmental issues disclosed in Schedule 7.25 by all
necessary and appropriate actions and shall report to the Administrative Agent
not less frequently than quarter-annually as to the status of the resolution of
such issues.
7.26. Material Contracts. Set forth on Schedule 7.26 hereto is a complete
and accurate list of all Material Contracts of the Borrower, each of the
Guarantors and each of their respective Subsidiaries. Other than as set forth on
Schedule 7.26, each such Material Contract is in full force and effect in
accordance with the terms thereof and there are no material defaults by the
Borrower, the Guarantors or any of their respective Subsidiaries as are parties
thereto or, to the knowledge of the Borrower and the Guarantors, by any other
party, under any such Material Contract. The Borrower has delivered to the
Administrative Agent a true and complete copy of each Material Contract required
to be listed on Schedule 7.26.
7.27. No Misstatements. Neither this Agreement nor any of the other Loan
Documents, nor any agreement, instrument or other document executed pursuant
hereto or thereto or in connection herewith or therewith, nor any certificate,
statement or other information referred to herein or therein or furnished to the
Administrative Agent or any Lender pursuant hereto or thereto or in connection
herewith or therewith, contains any misstatement of a material fact or omits to
state any material fact necessary to make the statements contained herein or
therein, in the light of the circumstances under which they were made, not
misleading on the date hereof or on the date furnished, as the case may be,
except as otherwise disclosed to the Administrative Agent and the Lenders in
writing on or prior to the date hereof. Neither the Borrower nor any Guarantor
is aware of any fact that it has not disclosed in writing to the Administrative
Agent that materially and adversely affects, or insofar as the Borrower or such
Guarantor can now foresee, could materially and adversely affect, the
properties, businesses, prospects, results of operations, management or
financial or other condition of the Borrower and its Subsidiaries, taken as a
whole, the Administrative Agent's or the Lenders' rights or the ability of the
Borrower, any Guarantor or any of their respective Subsidiaries to perform its
obligations under this Agreement and the other Loan Documents to which it is a
party.
ARTICLE 8.
AFFIRMATIVE COVENANTS
So long as any Obligations are unpaid or outstanding, any Obligation under
the Loan Documents is unperformed or any of the Commitments are in effect, the
Borrower and Guarantors shall:
8.1. Financial Statements.
8.1.1. Annual Financial Statements and Reports. Furnish to the
Administrative Agent and each Lender, as soon as available and in any event by
the earlier of (a) the date that is ninety-five (95) days after the end of each
Fiscal Year of the Domestic Borrower, or (b) the date that is five (5) days
after the date that the following are required to be furnished to the
Commission: a consolidated balance sheet of the Domestic Borrower and its
Subsidiaries as of the end of such Fiscal Year and the related consolidated
statements of income, shareholders' equity and cash flows of the Domestic
Borrower and its Subsidiaries for such Fiscal Year, audited and reported upon,
without qualification, by KPMG LLP or other independent public accountants
acceptable to Requisite Lenders in their sole discretion, certified by a
Responsible Officer of the Domestic Borrower, together with (a) a supporting
consolidating balance sheet of the Domestic Borrower and its Subsidiaries as of
the end of such Fiscal Year and the related supporting consolidating statements
of income, shareholders' equity and cash flow of the Domestic Borrower and its
Subsidiaries for such Fiscal Year, (b) a written discussion and analysis by the
management of the Domestic Borrower of the financial statements furnished in
respect of such annual fiscal period, and (c) a certificate of a Responsible
Officer of the Domestic Borrower, in form satisfactory to the Administrative
Agent and the Lenders, (1) stating that no Default has occurred and is
continuing or, if in the opinion of such officer, a Default has
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occurred and is continuing, stating the nature thereof and the action that the
Domestic Borrower proposes to take with respect thereto, and (2) setting forth
computations demonstrating compliance with all financial covenants contained
herein as of the end of such Fiscal Year.
8.1.2. Quarterly Financial Statements and Reports. Furnish to the
Administrative Agent and each Lender, as soon as available and in any event by
the earlier of (a) the date that is fifty (50) days after the end of each Fiscal
Quarter of the Domestic Borrower (other than the last Fiscal Quarter in any
Fiscal Year) or (b) the date that is five (5) days after the date that the
following are required to be furnished to the Commission: Domestic Borrower and
its Subsidiaries' Form 10-Q Statement, and an unaudited consolidated and
consolidating balance sheet of the Domestic Borrower and its Subsidiaries as of
the end of such Fiscal Quarter, the related consolidated and consolidating
statement of income of the Domestic Borrower and its Subsidiaries for the period
commencing at the beginning of the current Fiscal Year and ending with the end
of such Fiscal Quarter and the related consolidated statements of shareholders'
equity and cash flows of the Domestic Borrower and its Subsidiaries for such
period, certified by a Responsible Officer of the Domestic Borrower, together
with (a) a written discussion and analysis by the management of the Domestic
Borrower of the financial statements furnished in respect of such period, and
(b) a certificate of a Responsible Officer of the Domestic Borrower, in form
satisfactory to the Administrative Agent and the Lenders, (1) stating that no
Default has occurred and is continuing or, if in the opinion of such officer, a
Default has occurred and is continuing, stating the nature thereof and the
action that the Domestic Borrower proposes to take with respect thereto, and (2)
setting forth computations demonstrating compliance with all financial covenants
contained herein as of the end of such period.
8.1.3. GAAP. Take all actions necessary to cause all such financial
statements to be complete and correct in all material respects and to be
prepared in reasonable detail and in conformity with GAAP applied consistently
throughout the periods reflected therein (except as may be approved by such
accountants or Responsible Officer, as the case may be, and disclosed therein).
8.2. Certificates and Other Information. Furnish to the Administrative
Agent and each Lender, each in form and substance acceptable to Requisite
Lenders:
8.2.1. Management Letters. Promptly after the same are received by the
Borrower, copies of management letters provided to the Borrower by its
independent certified public accountants that describe or refer to any
inadequacy, defect, problem, qualification or other lack of satisfactory
accounting controls utilized by the Borrower or any of its Subsidiaries.
8.2.2. Shareholder Materials. (a) Within two (2) Business Days after
the delivery of same to the shareholders of the Borrower, copies of all
financial statements and reports that the Borrower, any Guarantor or any of
their respective Subsidiaries sends to the shareholders of the Borrower, and (b)
within two (2) Business Days after the filing thereof, copies of all reports and
statements of the Borrower, the Guarantors and their respective Subsidiaries
(including proxy and information statements, quarterly, annual and current
reports and registration statements, but excluding those pertaining only to
employee benefit plans) that it may make to, or file with, the Commission.
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8.2.3. Budgets. As soon as available, and in any event not later than
ninety (90) days after the end of each Fiscal Year of the Domestic Borrower,
twelve (12) month budgeted financial statements (including balance sheets and
statements of income, shareholders' equity and cash flows and a statement of
budgeted capital expenditures, and including a reasonably detailed description
of all underlying assumptions) of the Domestic Borrower and its Subsidiaries on
a consolidated basis for the following Fiscal Year, and twelve (12) month
consolidating budgeted financial statements (including balance sheets and
statements of income and cash flows indicating budgeted capital expenditures and
changes in shareholders' equity, and including a reasonably detailed description
of all underlying assumptions) of the Borrower and each of its Subsidiaries for
the following Fiscal Year, all in a format reasonably acceptable to Requisite
Lenders and certified by a Responsible Officer of the Domestic Borrower as being
fairly stated in good faith. Any updates thereto shall be provided upon request
of the Administrative Agent.
8.2.4. Asset Acquisitions. With respect to any Asset Acquisition that
requires the consent of the Requisite Lenders, not later than thirty (30) days
prior to the consummation of any Asset Acquisition, notice of the pendency of
such Asset Acquisition, and with respect to any Asset Acquisition, not later
than fourteen (14) Business Days prior to the consummation of such Asset
Acquisition, the following:
(a) a reasonably detailed description of the operating profile for the
assets to be acquired in such Asset Acquisition, and
(b) a reasonably detailed description of the terms and conditions of
such Asset Acquisition, including the purchase price and the manner and
structure of payment(s), accompanied by copies of the then-current drafts
of the proposed acquisition agreement(s), and
(c) a certificate duly executed by a Responsible Officer of the
Borrower, in form satisfactory to the Administrative Agent, certifying that
no Default has occurred and is continuing or will result from such Asset
Acquisition, certifying that after giving Pro Forma Effect to such Asset
Acquisition such Responsible Officer reasonably believes that such Asset
Acquisition will not result in a violation of any of the financial
covenants contained herein during the twelve (12) month period following
such Asset Acquisition, and setting forth computations demonstrating
compliance with all financial covenants contained herein as of the end of
the Fiscal Quarter then most recently completed, after giving Pro Forma
Effect to such Asset Acquisition, and
(d) twelve-months trailing financial statements, consolidated starting
balance sheet, twelve-month projected financial statements, and
twelve-months projections of capital expenditures for the Asset
Acquisition.
8.2.5. Acquisition Documents. Not later than thirty (30) days after
the consummation of any Asset Acquisition, copies of the executed documents
evidencing the transaction.
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8.2.6. Reports to Other Persons. Promptly after the furnishing
thereof, copies of any statement or report furnished to any other holder of any
Indebtedness of the Borrower, any of the Guarantors or any of their respective
Subsidiaries pursuant to the terms of any indenture, loan or credit or similar
agreement and not otherwise required to be furnished to the Administrative Agent
or Lenders pursuant to any other clause of this Section 8.2.
8.2.7. Funded Indebtedness. Promptly upon request by the
Administrative Agent, copies of all agreements, instruments and/or documents
evidencing or otherwise related to any Consolidated Funded Indebtedness.
8.2.8. Additional Information. Promptly, such additional financial and
other information as the Administrative Agent or any Lender from time to time
reasonably may request.
8.3. Provision of Notices. Notify the Administrative Agent and each Lender
of the occurrence of any of the following events not later than five (5) days
after the Borrower or any Guarantor knows or has reason to know of such event:
8.3.1. Default. Any Default.
8.3.2. Other Default or Litigation. (a) Any default or event of
default under any Contractual Obligation of the Borrower, any Guarantor or any
of their respective Subsidiaries that if adversely determined could have a
Material Adverse Effect, (b) any litigation, investigation or proceeding that
may exist at any time between the Borrower, any Guarantor or any of their
respective Subsidiaries and any Governmental Authority (excluding, however,
audits and inquiries made in the ordinary course of business) or (c) any other
litigation that if adversely determined would have a Material Adverse Effect.
8.3.3. Reportable Events. (a) Any Reportable Event with respect to any
Plan, (b) the institution of proceedings or the taking or expected taking of any
other action by the PBGC, the Borrower, any Guarantor, any of their respective
Subsidiaries or any Commonly Controlled Entity to terminate, withdraw or
partially withdraw from any Plan, and (c) with respect to any Multi-Employer
Plan, the reorganization or insolvency of such Plan. In addition to such notice,
the Borrower and the Guarantors shall deliver or cause to be delivered to the
Administrative Agent and each Lender whichever of the following may be
applicable: (i) a certificate of a Responsible Officer of the Borrower or such
Guarantor setting forth details as to such Reportable Event and the action that
it, such Subsidiary or the Commonly Controlled Entity proposes to take with
respect thereto, together with the copy of any notice of such Reportable Event
that may be required to be filed with the PBGC, or (ii) any notice delivered by
the PBGC evidencing its intent to institute such proceedings or any notice to
the PBGC that such Plan is to be terminated, as the case may be.
8.3.4. Environmental Matters. (a) Any event that makes any of the
representations set forth in Section 7.25 inaccurate in any respect or (b) the
receipt by the Borrower, any of the Guarantors or any of their respective
Subsidiaries of any notice, order, directive or other communication from a
Governmental Authority alleging a violation of or
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noncompliance with any Environmental Laws, except to the extent that any such
violation or noncompliance could not reasonably be expected to have a Material
Adverse Effect.
8.3.5. Loss of License, Permit, Approval, Etc. The loss or, if known
by the Borrower, any Guarantor or any of their respective Subsidiaries,
threatened loss, by the Borrower, any Guarantor or any of their respective
Subsidiaries, of any license, permit, approval, registration, contract, consent,
franchise, qualification, certificate of need, accreditation or other
authorization issued by any Governmental Authority referenced in Section 7.23,
if such loss reasonably could be expected to have a Material Adverse Effect.
8.3.6. Material Contracts. (a) Any proposed material amendment, change
or modification to, or waiver of any material provision of, or any termination
of, any Material Contract and (b) any default or event of default under any
Material Contract.
8.3.7. Casualty Losses. Any casualty loss or event not insured against
in an amount in excess of $250,000.
8.4. Payment of Obligations and Performance of Covenants.
(a) Cause the Euro Borrower, the Guarantors and NN Italy to make full
and timely payment of the Euro Obligations, including the Euro Term Loans,
whether now existing or hereafter arising;
(b) Cause the Domestic Borrower, the Domestic Guarantors and NN Italy
to make full and timely payment of the Domestic Obligations, including the
Revolving Term Loans and the Domestic Term Loans, whether now existing or
hereafter arising.
(c) Duly comply with all terms, covenants and conditions contained in
each of the Loan Documents, at the times and places and in the manner set
forth therein; and
(d) Take all action necessary to maintain the security interests
provided for under this Agreement and the Security Documents as valid and
perfected Liens on the property intended to be covered thereby, subject to
no other Liens except Permitted Liens, and supply all information to the
Administrative Agent or the Lenders necessary to accomplish same.
8.5. Payment of Taxes. Pay, and cause their respective Subsidiaries to pay,
or cause to be paid before the same shall become delinquent and before penalties
have accrued thereon, all taxes, assessments and governmental charges or levies
imposed on the income, profits, franchises, property or businesses of the
Borrower, the Guarantors or their respective Subsidiaries, except to the extent
and so long as (a) the same are being contested in good faith by appropriate
proceedings and (b) adequate reserves with respect thereto in conformity with
GAAP have been provided on the books of the Borrower or any such Guarantor or
Subsidiary, as appropriate.
8.6. Conduct of Business and Maintenance of Existence. Continue, and cause
their respective Subsidiaries to continue, (a) to engage solely in the business
as the Borrower and the
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Guarantors are presently engaged and businesses that enhance or support that
primary business activity, and (b) except as permitted by Sections 9.3 and 9.7,
to preserve, renew and keep in full force and effect their existence and present
corporate, partnership or other organizational structure, as the case may be.
8.7. Compliance with Law. Observe and comply with, and cause their
respective Subsidiaries to observe and comply with, all present and future
Requirements of Law relating to the conduct of their businesses or to their
properties or assets, except to the extent and so long as the nonobservance
thereof or noncompliance therewith will not have a Material Adverse Effect.
Notwithstanding the foregoing, the granting of loans or provision of securities
from the Euro Borrower to the Domestic Borrower or financial assistance from the
Euro Borrower to the Domestic Borrower is under no circumstances permissible,
whether or not such actions would have a Material Adverse Effect.
8.8. Maintenance of Properties and Franchises. Maintain, preserve and keep
and cause their respective Subsidiaries to maintain, preserve and keep (a) all
of their buildings, tangible properties, equipment and other property and assets
used and necessary in their businesses, whether owned or leased, in good repair,
working order and condition, from time to time making all necessary and proper
repairs and replacements so that at all times the utility, efficiency and value
thereof shall not be impaired, and (b) all rights, privileges and franchises
necessary or desirable in the normal conduct of their businesses.
8.9. Insurance.
(a) Maintain and cause their respective Subsidiaries to maintain:
(1) insurance (in addition to any insurance required under the
Security Documents) on all insurable operations of and insurable
property and assets owned or leased by the Borrower, the Guarantors or
any of their respective Subsidiaries in the manner, to the extent and
against at least such risks (in any event including professional and
comprehensive general liability, workers' compensation, employer's
liability, automobile liability and physical damage, fiduciary
liability, commercial fidelity, employee benefits liability,
environmental impairment liability, all-risk property, business
interruption and crime insurance) usually maintained by owners of
similar businesses and properties in similar geographic areas;
provided that the amounts of property insurance coverages shall not be
less than the full replacement cost of all such insurable property and
assets, except for coverage limitations with respect to flood,
earthquake and windstorm perils that are acceptable to the
Administrative Agent and Requisite Lenders; and
(2) self-insurance reserves covering those risks for which the
Borrower, the Guarantors and each of their respective Subsidiaries
presently self-insure in appropriate amounts as determined from time
to time by independent insurance claims auditors acceptable to the
Administrative Agent and Requisite Lenders.
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All such insurance shall be in such amounts, in such form and with such
insurance companies as are reasonably satisfactory to the
Administrative Agent and Requisite Lenders.
(b) Furnish to the Administrative Agent not less frequently than
annually and at any time upon written request, (i) full information as
to such insurance carried, including the amounts of all self-insurance
reserves of the Borrower, the Guarantors and their respective
Subsidiaries, and (ii) certificates of insurance from the insurance
companies and certified copies of such insurance policies.
8.10. Use of Proceeds. Use, and cause their respective Subsidiaries to use,
the proceeds of the Facilities for the purposes specified in Section 2.7 and for
no other purpose.
8.11. Books and Records. Keep and maintain, and cause their respective
Subsidiaries to keep and maintain, full and accurate books of record and
accounts of their operations, dealings and transactions in relation to their
business and activities, in conformity with GAAP and all Requirements of Law.
8.12. Inspection. Permit, and cause their respective Subsidiaries to
permit, any employees, agents or other representatives of the Administrative
Agent or the Lenders and any attorneys, accountants or other agents or
representatives designated by the Administrative Agent or the Lenders to (a)
have access to and visit and inspect any of the accounting systems, books of
account, financial records and properties, real, personal or mixed, of the
Borrower, the Guarantors and their respective Subsidiaries, (b) examine and make
abstracts from any such accounting systems, books and records, and (c) discuss
the affairs, finances and accounts of the Borrower, the Guarantors and their
respective Subsidiaries with their officers, employees or agents, all at such
reasonable business times as the Administrative Agent or the Lenders deem
necessary or advisable to protect their respective interests. So long as no
Default or Event of Default shall have occurred and be continuing, the
Administrative Agent and the Lenders shall give the Borrower, the Guarantors and
their respective Subsidiaries, as the case may be, reasonable prior notice of
any such inspection.
8.13. Compliance With Terms of Material Contracts. Comply, and cause their
respective Subsidiaries to comply, with all agreements, covenants, terms,
conditions and provisions of all Material Contracts, except to the extent and so
long as noncompliance therewith will not have a Material Adverse Effect.
8.14. Compliance With Environmental Laws, Etc.
(a) Employ, and cause their respective Subsidiaries to employ, in
connection with the use of any real property, appropriate technology
(including appropriate secondary containment measures) to maintain
compliance with applicable Environmental Laws;
(b) take, and cause their respective Subsidiaries to take, all actions
necessary to comply with all Environmental Laws, including any actions
identified as necessary in
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any environmental compliance reports delivered to the Administrative Agent
pursuant to the provisions of this Agreement;
(c) obtain and maintain, and cause their respective Subsidiaries to
obtain and maintain, any and all permits required by applicable
Environmental Laws in connection with the operations of the Borrower, the
Guarantors or any of their respective Subsidiaries or any Affiliate
thereof;
(d) dispose of, and cause their respective Subsidiaries to dispose of,
any and all Hazardous Materials only at facilities and with carriers
maintaining valid permits under applicable federal, state and local
Environmental Laws; and
(e) use best efforts to obtain, and cause their respective
Subsidiaries to use their best efforts to obtain, certificates of disposal
from all contractors employed by the Borrower, the Guarantors or any of
their respective Subsidiaries in connection with the transportation or
disposal of any Hazardous Materials.
8.15. Environmental Monitoring. Establish and maintain, and cause their
respective Subsidiaries to establish and maintain, a system to assure and
monitor continued compliance with all applicable Environmental Laws,
noncompliance with which would have a Material Adverse Effect, which system
shall include annual reviews of such compliance by employees or agents of the
Borrower, the Guarantors and their respective Subsidiaries who are familiar with
the requirements of applicable Environmental Laws.
8.16. Maintenance of Licenses, Permits, Approvals, Etc. Preserve and
maintain, and cause their respective Subsidiaries to preserve and maintain, all
licenses, permits, approvals, registrations, contracts, consents, franchises,
qualifications, certificates of need, accreditations and other authorizations
required under applicable state or local laws and regulations in connection with
the ownership or operation of their businesses, except to the extent that a
failure to preserve and maintain any of same will not have a Material Adverse
Effect.
8.17. Intercompany Indebtedness; Pledged Notes.
(a) Maintain, and cause their respective Subsidiaries to maintain,
accounting systems, practices and procedures that enable the Borrower, the
Guarantors and their respective Subsidiaries to report to the
Administrative Agent at any time upon its request the aggregate unpaid
balance of any unsecured advances or loans owing to the Borrower or a
Guarantor by any such Subsidiary; and
(b) Cause all such advances or loans to be evidenced by Pledged Notes
delivered to the Administrative Agent pursuant to the Pledge Agreement and,
contemporaneously with the delivery to the Administrative Agent of any
Pledged Note, assign and deliver to the Administrative Agent any loan
agreement or other instrument, document or agreement further evidencing,
securing or otherwise relating to the indebtedness evidenced by such
Pledged Note.
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8.18. Further Assurances. Perform, make, execute and deliver, and cause
their respective Subsidiaries to perform, make, execute and deliver, all such
additional and further acts, deeds, occurrences and instruments as the
Administrative Agent or the Lenders reasonably may require to document and
consummate the transactions contemplated hereby and to vest completely in and to
ensure the Administrative Agent and the Lenders their respective rights under
this Agreement, the Notes and the other Loan Documents.
8.19. Creation of Subsidiaries. Within ninety (90) days after creating any
Subsidiary of Borrower or any Guarantor, (a) give Notice to the Administrative
Agent of the creation of such Subsidiary, (b) cause such Subsidiary to become a
Domestic Guarantor under the terms of this Agreement, (c) satisfy the conditions
precedent set forth in Sections 6.1 (d), (e), (f), (g), (h), (i), (j), (k), (l),
(m) and (p) of this Agreement with respect to such Domestic Guarantor; provided,
however, such Subsidiary shall not be required to become a Domestic Guarantor if
it is prohibited from doing so under applicable law.
ARTICLE 9.
NEGATIVE COVENANTS
So long as any Obligations are unpaid or outstanding, any Obligation under
the Loan Documents is unperformed or any of the Commitments are in effect, the
Borrower and the Guarantors shall not:
9.1. Indebtedness. Create, incur, assume or suffer to exist, or permit any
of their respective Subsidiaries to create, incur, assume or suffer to exist,
any Indebtedness, except:
(a) Indebtedness of the Borrower, any of the Guarantors or NN Italy
under or pursuant to this Agreement and the other Loan Documents;
(b) Indebtedness existing, or arising pursuant to commitments
existing, on the date hereof, all as set forth in Schedules 7.17A and
7.17B, and any extensions, renewals, refundings or refinancings thereof on
the same terms or other terms satisfactory to Requisite Lenders; provided,
however, that neither the principal amount thereof nor the interest rate
thereon shall be increased, nor shall the date for the making of any
required payment of principal be accelerated nor the amount due on any such
date increased;
(c) Purchase Money Debt and Capitalized Lease Obligations in an
aggregate amount not to exceed $2,500,000 outstanding at any one time;
(d) Subordinated Indebtedness;
(e) Current liabilities incurred in the ordinary course of business
and not represented by any note, bond, debenture or other instrument, and
which are not past due for a period of more than thirty (30) days, or if
overdue for more than thirty (30) days, which are being contested in good
faith and by appropriate actions and for which
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adequate reserves in conformity with GAAP have been established on the
books of the primary obligor with respect thereto;
(f) Contingent Obligations consisting of (i) the endorsement by the
Borrower, any Guarantor or any of their respective Subsidiaries of
negotiable instruments payable to such Person for deposit or collection in
the ordinary course of business, and (ii) guarantees executed by the
Borrower, any Guarantor or any of their respective Subsidiaries with
respect to Operating Lease obligations or Indebtedness of the Borrower and
its Subsidiaries otherwise permitted by this Agreement;
(g) Contingent Obligations consisting of the indemnification by the
Borrower or any of its Subsidiaries of (i) the officers, directors,
employees and agents of the Borrower or such Subsidiary, to the extent
permissible under the corporation law of the jurisdiction in which the
Borrower or such Subsidiary is organized, (ii) commercial banks, investment
bankers and other independent consultants or professional advisors pursuant
to agreements relating to the underwriting of the Borrower's or such
Subsidiary's securities or the rendering of banking or professional
services to the Borrower or such Subsidiary, (iii) landlords, licensors,
licensees and other parties pursuant to agreements entered into in the
ordinary course of business by the Borrower or such Subsidiary and (iv)
other Persons under agreements relating to Permitted Acquisitions;
(h) Indebtedness with respect to financed insurance premiums not past
due; and
(i) Indebtedness of the Borrower or a Subsidiary of the Borrower that
is owed to the Borrower or a Subsidiary of the Borrower and that is
described in clauses (d), (e) or (h) of Section 9.4.
(j) Indebtedness of the Borrower and its Subsidiaries, not otherwise
described in this Section 9.1, in an aggregate amount not to exceed
$5,000,000, less any amounts outstanding pursuant to Section 9.1(c).
9.2. Liens. Create, incur, assume or suffer to exist, or permit any of
their respective Subsidiaries (other than the Non-Guarantor Subsidiaries) to
create, incur, assume or suffer to exist, any Lien upon any real or personal
property, fixtures, revenues or other assets whatsoever (including the
Collateral), whether now owned or hereafter acquired, of the Borrower, the
Guarantors or any of their respective Subsidiaries (other than the Non-Guarantor
Subsidiaries), except:
(a) Liens securing the Obligations;
(b) Existing Liens;
(c) Liens for taxes not yet due or that are being contested in good
faith and by appropriate actions and for which adequate reserves in
conformity with GAAP have been established on the books of the Borrower or
such Guarantor or Subsidiary;
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(d) carriers', warehousemen's, mechanics', materialmen's, repairmen's
or other like Liens arising in the ordinary course of business that are not
overdue for a period of more than thirty (30) days, or if overdue for more
than thirty (30) days, (i) which are being contested in good faith and by
appropriate proceedings, (ii) for which adequate reserves in conformity
with GAAP have been established on the books of the Borrower or such
Guarantor or Subsidiary; and (iii) with respect to which the obligations
secured thereby are not material;
(e) pledges or deposits in connection with workers' compensation
insurance, unemployment insurance and like matters;
(f) Liens securing Purchase Money Debt or Indebtedness arising under
Capitalized Leases; provided, however, that in each case any such Lien
attaches only to the specific item(s) of property or asset(s) financed with
such Purchase Money Debt or Capitalized Lease;
(g) deposits to secure the performance of bids, trade contracts (other
than for borrowed money), leases, statutory obligations, surety and appeal
bonds, performance bonds and other obligations of a like nature incurred in
the ordinary course of business;
(h) easements, reservations, exceptions, rights-of-way, covenants,
conditions, restrictions and other similar encumbrances incurred in the
ordinary course of business that, in the aggregate, are not substantial in
amount, and that do not in any case materially detract from the value of
the property subject thereto or interfere with the ordinary conduct of
business by the Borrower or such Guarantor or Subsidiary;
(i) Liens in respect of any writ of execution, attachment,
garnishment, judgment or judicial award, if (i) the time for appeal or
petition for rehearing has not expired, an appeal or appropriate proceeding
for review is being prosecuted in good faith and a stay of execution
pending such appeal or proceeding for review has been secured, or (ii) the
underlying claim is fully covered by insurance issued by an insurer
satisfactory to the Administrative Agent, the insurer has acknowledged in
writing its responsibility to pay such claim and no action has been taken
to enforce such execution, attachment, garnishment, judgment or award;
(j) Liens of lessors under or in connection with Operating Leases;
(k) Liens securing Indebtedness permitted under clause (b) of Section
9.1, but only to the extent that such Indebtedness is currently secured as
set forth on Schedules 7.17A and 7.17B; and
(l) Other non-consensual Liens not securing Indebtedness, (i) the
amount of which does not exceed in the aggregate, $2,500,000, and (ii) the
existence of which will not have a Material Adverse Effect; provided,
however, that any Lien permitted by this clause (l) is permitted only for
so long as is reasonably necessary for the Borrower or the
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affected Subsidiary, using its best efforts, to remove or eliminate such
Lien and, provided, further, that any Lien not otherwise permitted by this
clause shall be permitted so long as Borrower or the affected Subsidiary
shall within thirty (30) days after the filing thereof either (x) cause
such Lien to be discharged, or (y) post with Administrative Agent a bond or
other security in form and amount satisfactory to Administrative Agent in
all respects and shall thereafter diligently pursue its discharge.
9.3. Sale or Transfer of Assets. Sell, lease, assign, transfer or otherwise
dispose of, or permit any of their respective Subsidiaries (other than the
Non-Guarantor Subsidiaries) to sell, lease, assign, transfer or otherwise
dispose of, any of their assets (including the stock of Subsidiaries) except:
(a) sales of personal property assets in the ordinary course of
business of the Borrower and its Subsidiaries;
(b) the disposition of obsolete or worn-out equipment or other
property no longer required by or useful to the Borrower or any of its
Subsidiaries in connection with the operation of their businesses, provided
that such equipment or other property is replaced with equipment or other
property having substantially equivalent utility and equal or greater
value;
(c) the sale or transfer to the Domestic Borrower, any Guarantor or NN
Italy of any asset owned by the Borrower or any of its Subsidiaries; and
(d) any other sale or transfer of assets not exceeding an aggregate
amount of $2,500,000 in any Fiscal Year and not exceeding an aggregate
amount of $10,000,000 over the term of the Facilities.
9.4. Investments. Make, commit to make or suffer to exist, or permit any of
their respective Subsidiaries to make, commit to make or suffer to exist, any
Investment except:
(a) Cash Equivalents;
(b) Investments existing on the date hereof and set forth in Schedule
9.4;
(c) accounts receivable representing trade credit extended in the
ordinary course of business;
(d) unsecured loans or advances by the Borrower, any Guarantor or NN
Italy to any Guarantor, NN Italy or the Domestic Borrower (other than loans
or advances from Euro Borrower to Domestic Borrower); provided, however,
(i) in no event shall such loans or advances to NN Ireland exceed the
amount of NN Ireland's liability under Section 5.2 of this Agreement, and
(ii) in no event shall such loans or advances to NN Italy exceed the amount
of NN Italy's liability under the Italian Guaranty;
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(e) unsecured loans or advances by any Subsidiary of the Borrower to
the Domestic Borrower, any Guarantor or NN Italy (other than loans or
advances from Euro Borrower to Domestic Borrower);
(f) Investments in Guarantors or NN Italy;
(g) Investments consisting of Permitted Acquisitions;
(h) additional advances to, and other Investments in, Non-Guarantor
Subsidiaries in an aggregate outstanding amount not to exceed $4,000,000 at
any time;
(i) advances, in an aggregate amount not to exceed $1,000,000
outstanding at any one time, made by the Borrower and its Subsidiaries to
their respective employees for reimbursable expenses incurred or to be
incurred by such employees in the ordinary course performance of their
duties;
(j) Investments consisting of amounts potentially due from a seller of
assets in a Permitted Acquisition that relate to customary post-closing
adjustments with respect to accounts receivable, accounts payable and
similar items typically subject to post-closing adjustments in similar
transactions;
(k) the Domestic Borrower's purchase of the remaining ownership
interests in the Euro Borrower not currently owned by the Domestic
Borrower;
(l) the SKF-Veenendaal Acquisition; and
(m) Investments by the Domestic Borrower in the Euro Borrower that are
used to make capital contributions to NN Italy or the Euro Borrower's
Subsidiaries that are Domestic Guarantors and used by such Subsidiaries to
fund their operations or used to pay the Euro Obligations.
9.5. Restricted Payments. Declare, pay or make, or permit any of their
respective Subsidiaries to declare, pay or make any Restricted Payments except
so long as no Default or Event of Default exists or would result therefrom:
(a) the Borrower may declare and deliver dividends and make
distributions payable solely in common stock of the Borrower or in
preferred stock of the Borrower that the Borrower is permitted to issue
pursuant to Section 9.6, and may distribute cash in lieu of fractional
shares otherwise distributable pursuant to this clause (a);
(b) the Domestic Borrower may purchase or otherwise acquire shares of
its capital stock, or other ownership interests; and
(c) The Borrower may declare and deliver dividends and make
distributions payable to its shareholders in any Fiscal Year in an
aggregate amount not in excess of the lesser of (a) $5,500,000 plus the
product of thirty-two cents ($0.32) multiplied by the number of shares of
its common stock issued on or before February 11, 2005, pursuant to
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its Registration Statement on Form S-3 (Registration Number 333-100119); or
(ii) $7,000,000.
(d) Subsidiaries of Euro Borrower may declare and deliver dividends
and make distributions payable to Euro Borrower so long as such amounts are
(i) distributed as a dividend by Euro Borrower to Domestic Borrower, (ii)
contributed by Euro Borrower to any of its Subsidiaries that are Guarantors
or NN Italy, to the extent permitted under Section 9.4, or (iii) used to
pay the Euro Obligations.
9.6. Issuance of Stock. Issue any capital stock or permit any Subsidiary to
issue any capital stock; provided, however, that
(a) the Borrower may issue common stock and may issue preferred stock
to the extent the aggregate of all preferred stock outstanding does not
require the payment of dividends in excess of amounts permitted under
Section 9.5, and provided such preferred stock is not redeemable, payable
or subject to being required to be purchased or otherwise retired or
extinguished (i) at a fixed or determinable date, whether by operation of a
sinking fund or otherwise, (ii) at the option of any Person other than the
Borrower or (iii) upon the occurrence of a condition not solely within the
control of the Borrower, such as a redemption required to be made out of
future earnings; and
(b) any Subsidiary of the Borrower may issue capital stock to the
Borrower or any wholly-owned Subsidiary of the Borrower.
9.7. Fundamental Changes. Directly or indirectly (whether in one
transaction or a series of transactions), or permit any of their respective
Subsidiaries directly or indirectly (whether in one transaction or a series of
transactions) to:
(a) enter into any transaction of merger, consolidation or
amalgamation;
(b) liquidate, wind up or dissolve itself (or suffer any liquidation
or dissolution);
(c) make any Asset Acquisition other than a Permitted Acquisition;
(d) make any material change in its present method of conducting
business; or
(e) enter into any agreement or transaction to do or permit any of the
foregoing;
provided, however, that:
(1) notwithstanding clause (a) of this Section 9.7, the merger,
consolidation or amalgamation of any Person with the Domestic
Borrower, any Guarantor or NN Italy as the method by which a Permitted
Acquisition is accomplished shall be permitted, provided that the
Domestic Borrower, such Guarantor or NN Italy is the surviving entity
in the transaction (provided,
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however, that nothing contained herein shall permit the merger of any
Subsidiary of the Euro Borrower with and into the Euro Borrower, with
the Euro Borrower as the surviving entity, if such merger would
violate Danish law);
(2) notwithstanding clause (a) of this Section 9.7, the merger,
consolidation or amalgamation of any Subsidiary of the Borrower with
any Guarantor or NN Italy shall be permitted, provided that such
Guarantor or NN Italy is the surviving entity in the transaction
(provided, however, that nothing contained herein shall permit the
merger of any Subsidiary of the Euro Borrower with and into the Euro
Borrower, with the Euro Borrower as the surviving entity, if such
merger would violate Danish law);
(3) notwithstanding clause (a) of this Section 9.7, the merger,
consolidation or amalgamation of any Subsidiary of the Borrower with
the Domestic Borrower shall be permitted, provided that the Domestic
Borrower is the surviving entity in the transaction (provided,
however, that nothing contained herein shall permit the merger of any
Subsidiary of the Euro Borrower with and into the Euro Borrower, with
the Euro Borrower as the surviving entity, if such merger would
violate Danish law); and
(4) notwithstanding clause (b) of this Section 9.7, the Borrower
may permit the dissolution of any of its Subsidiaries (and any such
Subsidiary may suffer such dissolution) if at the time of such
dissolution such Subsidiary has no material assets, engages in no
material business and otherwise has no material activities other than
activities related to the maintenance of its corporate existence and
good standing.
9.8. Transactions With Affiliates. Enter into, or permit any of their
respective Subsidiaries to enter into, any transaction, including any purchase,
sale, lease or exchange of property or the rendering of any service, with any
Affiliate or employee of the Borrower or any of its Subsidiaries, except
transactions that are in the ordinary course of business of the Borrower or such
Guarantor or Subsidiary and that are upon fair and reasonable terms no less
favorable to the Borrower or such Guarantor or Subsidiary than would be obtained
in a comparable arm's length transaction with a Person not an Affiliate.
9.9. Agreements Restricting the Borrower and its Subsidiaries. Enter into
or become a party to any agreement with any Person (other than this Agreement
and the Loan Documents) that in any way prohibits, restricts or limits the
ability of the Borrower, any Guarantor or any such Subsidiary to:
(a) transfer cash or other assets to the Borrower or any of its
Subsidiaries, or
(b) create, incur, assume or suffer to exist any Lien with respect to
any real or personal property, fixtures, revenues or other assets
whatsoever, whether now owned or hereafter acquired, of the Borrower, any
Guarantor or any such Subsidiary.
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9.10. ERISA.
(a) terminate or permit any of their respective Subsidiaries to
terminate any Plan so as to result in any material liability to the PBGC;
(b) engage or permit any of their respective Subsidiaries to engage in
any "prohibited transaction" (as defined in Section 4975 of the Code)
involving any Plan that would result in a material liability for an excise
tax or civil penalty in connection therewith;
(c) incur or suffer to exist, or permit any of their respective
Subsidiaries to incur or suffer to exist, any material "accumulated funding
deficiency" (as defined in Section 302 of ERISA), regardless of whether
waived, involving any Plan; or
(d) allow or suffer to exist, or permit any of their respective
Subsidiaries to allow or suffer to exist, any event or condition that
presents a material risk of incurring a material liability to the PBGC by
reason of the termination of any Plan.
9.11. Maintenance of Material Contracts. Without the prior written consent
of Requisite Lenders, enter into an agreement to cancel, terminate or surrender,
or enter into any material amendment of, any Material Contract, unless the
cumulative effect of all such cancellations, terminations, surrenders and
amendments will not have a Material Adverse Effect.
9.12. Adverse Transactions. Enter into or become a party to, or permit any
of their respective Subsidiaries to enter into or become a party to, any
transactions the performance of which in the future would be inconsistent with
or is reasonably likely to result in a breach of any covenant contained herein
or any other Loan Document or otherwise to result in a Default.
9.13. Subordinated Indebtedness. Modify, amend or in any way change the
terms of any Subordinated Indebtedness or any instrument, document or agreement
evidencing same or related thereto, if the effect of any such modification,
amendment or change would be to (a) modify the terms of subordination, as they
apply to the Obligations, in a manner inconsistent with the definition of
Subordinated Indebtedness set forth herein, or (b) otherwise materially affect
the rights of the Administrative Agent or the Lenders vis-a-vis the holder(s) of
such Subordinated Indebtedness. It is expressly acknowledged that, under
applicable Danish law, Euro Borrower cannot subordinate any Obligations owed to
it to any of the Domestic Obligations.
ARTICLE 10.
FINANCIAL COVENANTS
10.1. Domestic Borrower Ratios. So long as any Obligations are unpaid or
outstanding, any Obligation under the Loan Documents is unperformed or any of
the Commitments are in effect, the Borrower and the Guarantors shall not:
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10.1.1. Fixed Charge Coverage Ratio. Permit the Fixed Charge Coverage
Ratio to be less than 2.00 to 1.00 as of the end of any Fiscal Quarter.
10.1.2. Funded Indebtedness to EBITDA Ratio. Permit the Funded
Indebtedness to EBITDA Ratio (a) to be greater than 2.50 to 1.00, as of the end
of any Fiscal Quarter ending on or before December 31, 2003, or (b) to be
greater than 2.25 to 1.00, as of the end of any Fiscal Quarter ending after
December 31, 2003.
10.1.3. Funded Indebtedness to Capitalization Ratio. Permit the Funded
Indebtedness to Capitalization Ratio (a) to be greater than 0.55 to 1.00, as of
the end of any Fiscal Quarter ending on or before December 31, 2003, or (b) to
be greater than 0.50 to 1.00, as of the end of any Fiscal Quarter ending after
December 31, 2003 but on or before December 31, 2004, or (c) to be greater than
0.45 to 1.00, as of the end of any Fiscal Quarter ending after December 31,
2004.
10.1.4. Capital Expenditures. Permit Capital Expenditures made by the
Borrower, the Guarantors and NN Italy to exceed an aggregate amount in any
Fiscal Year equal to one hundred fifty percent (150%) of the Borrower,
Guarantor's and NN Italy's depreciation during such Fiscal Year.
10.2. Guarantor Solvency. So long as any Obligations or any Guaranteed
Obligations are unpaid or outstanding, any Obligations under the Loan Documents
are unperformed or any of the Commitments are in effect, each of the Guarantors
and NN Italy at all times shall be Solvent.
ARTICLE 11.
EVENTS OF DEFAULT AND LENDERS' REMEDIES
11.1. Events of Default. Any one or more of the following described events
shall constitute an Event of Default hereunder, whether such occurrence shall be
voluntary or involuntary, or come about or be effected by operation of law or
otherwise:
11.1.1. Failure to Pay Loans, Etc.
(a) The Domestic Borrower shall fail to pay when due any principal of,
interest on or other amount payable in respect of the Revolving Loans, the
Swing Line Loan or the Domestic Term Loans, the Credit Fees or any of the
other Domestic Obligations;
(b) The Euro Borrower shall fail to pay when due any principal of,
interest on or other amount payable in respect of the Euro Term Loans, the
Credit Fees due from the Euro Borrower or any of the other Euro
Obligations.
11.1.2. Failure to Perform Certain Covenants. The Borrower or any
Guarantor shall fail to perform or observe any of its covenants and agreements
set forth in Sections 8.1, 8.6, 8.10 and 8.12 and in Articles 9 and 10.
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11.1.3. Failure to Perform Agreements Generally. The Borrower or any
Guarantor shall fail to perform or observe, or shall fail to cause their
respective Subsidiaries to perform or observe, any of its other covenants and
agreements set forth in this Agreement (other than those described in Sections
11.1.1 and 11.1.2) or the other Loan Documents, and such failure shall continue
for more than twenty (20) days after the earlier of (a) written notice from the
Administrative Agent to the Borrower or such Guarantor, as applicable, of the
existence of such Default or (b) the date any Responsible Officer of the
Borrower or such Guarantor, as applicable, first obtains knowledge of such
failure.
11.1.4. Defaults Under Other Loan Documents. Any default or event of
default shall occur under any other Loan Document, and, if subject to a cure
right, shall fail to be cured or corrected within the applicable cure period.
11.1.5. False Statements. Any representation or warranty of the
Borrower, any Guarantor or NN Italy set forth in this Agreement, the Notes or
the other Loan Documents or in any other certificate, opinion or other statement
at any time provided by or on behalf of the Borrower, any Guarantor or NN Italy
in connection herewith or therewith shall prove to be false or misleading in any
material respect at the time made or given.
11.1.6. Voluntary Insolvency Proceedings. The Borrower, any Guarantor
or any of their respective Subsidiaries (a) shall commence a voluntary case or
other proceeding seeking dissolution, liquidation, reorganization or other
relief with respect to itself or its debts under any bankruptcy, insolvency or
other similar law now or hereafter in effect or seeking the appointment of a
receiver, trustee, liquidator, custodian or other similar official with respect
to it or any substantial part of its property, (b) shall consent to any such
relief or to the appointment of, or the taking of possession of any of its
property by, any such official in any involuntary case or other proceeding
commenced against it, (c) shall make a general assignment for the benefit of
creditors, (d) shall take any action to authorize any of the foregoing, or (e)
shall become insolvent or fail generally to pay its debts as they become due.
11.1.7. Involuntary Insolvency Proceedings. Any involuntary case or
other proceeding shall be commenced against the Borrower, any Guarantor or any
of their respective Subsidiaries seeking dissolution, liquidation,
reorganization or other relief with respect to it or its debts under any
bankruptcy, insolvency or other similar law now or hereafter in effect or
seeking the appointment of a receiver, trustee, liquidator, custodian or other
similar official with respect to it or any substantial part of its property, and
(a) an order for relief (or the equivalent) shall be entered in such involuntary
case or other proceeding or (b) such involuntary case or other proceeding shall
remain undismissed and unstayed for a period of forty-five (45) days after the
commencement thereof.
11.1.8. Failure to Perform Other Obligations. The Borrower, any
Guarantor or any of their respective Subsidiaries shall (a) fail to pay any
amount of any Indebtedness or interest thereon, or (b) fail to observe or
perform any term, covenant or agreement contained in any Contractual Obligation
(including Contractual Obligations evidencing, securing or relating to any
Indebtedness) executed by it, which failure (i) would cause or permit the holder
or holders or beneficiary or beneficiaries of such Indebtedness (or any agent or
trustee on their behalf) to
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cause such Indebtedness to become due or otherwise payable prior to its stated
maturity, so long as the aggregate principal amount of all such Indebtedness
that would then become due or payable would equal or exceed $1,000,000, or (ii)
would impair the Administrative Agent's or the Lenders' rights or the
performance of the obligations of the Borrower, any Guarantor or any of their
respective Subsidiaries under this Agreement, the Notes or the other Loan
Documents or the business or operations of the Borrower, any Guarantor or any of
their respective Subsidiaries; unless in the case of a Contractual Obligation
that is not for borrowed money, such failure of performance is being contested
by the Borrower, such Guarantor or such Subsidiary in good faith and adequate
reserves with respect thereto have been established on the books of the
Borrower, such Guarantor or such Subsidiary in conformity with GAAP.
11.1.9. Judgments; Legal Process. One or more judgments, decrees or
orders for the payment of money shall be entered, or any judgment lien shall be
filed, or any writ of execution, attachment, garnishment or other legal process
shall be issued, against the Borrower, any Guarantor or any of their respective
Subsidiaries, or any of the property thereof, which by itself or together with
all other such legal processes is for an amount in excess of $1,000,000, and
which shall remain unvacated, unbonded or unstayed for a period of thirty (30)
days, or in any event later than five (5) days prior to the date of any proposed
sale thereunder.
11.1.10. Condemnation of Property. All or substantially all of the
property of the Borrower, any Guarantor or any of their respective Subsidiaries
shall be condemned, seized or otherwise appropriated, and the condemnation award
is materially less than the book value of such property at the date hereof (if
such property was owned by the Borrower or any of its Subsidiaries on the date
hereof) or at the time such property was acquired by the Borrower or such
Subsidiary (if such property was acquired by the Borrower or such Subsidiary
after the date hereof).
11.1.11. Suspension of Business. The Borrower, any Guarantor or any of
their respective Subsidiaries shall voluntarily suspend the transaction of its
business for more than five (5) Business Days in any Fiscal Year after the date
hereof without the prior express written consent of Requisite Lenders.
11.1.12. ERISA. (a) The Borrower or any Commonly Controlled Entity
shall engage in any "prohibited transaction" (as defined in ERISA or Section
4975 of the Code) involving any Plan, (b) any "accumulated funding deficiency"
(as defined in ERISA), regardless of whether waived, shall exist with respect to
any Plan, (c) a Reportable Event shall occur with respect to, or a proceeding
shall commence to have a trustee appointed, or a trustee shall be appointed, to
administer or to terminate, any Single Employer Plan, which Reportable Event or
proceeding presents a material risk of termination of such Plan for purposes of
Title IV of ERISA, and, in the case of a Reportable Event, shall continue
unremedied for ten (10) days after notice of such Reportable Event is given
pursuant to Section 4043(a), (c) or (d) of ERISA and, in the case of such
proceeding, shall continue for ten (10) days after commencement thereof, (d) any
Single Employer Plan shall terminate for purposes of Title IV of ERISA, (e) the
withdrawal or partial withdrawal by the Borrower or any Commonly Controlled
Entity from any Multi-Employer Plan, or (f) the reorganization or insolvency of
a Plan or any other event or condition shall occur or exist with respect to a
Plan and in each case in clauses (a) through (f) above, such
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event or condition together with all other such events or conditions, if any,
would have a Material Adverse Effect.
11.1.13. Validity of Loan Documents. Any of the Loan Documents or any
provision thereof, for any reason whatsoever, shall cease to be binding on the
Borrower, any Guarantor or any of their respective Subsidiaries as is a party
thereto, or the Borrower or any Guarantor shall so assert.
11.1.14. Guaranty Obligations. Any Guarantor shall default in the
performance or observance of its guarantee hereunder, or such guarantee for any
reason whatsoever shall cease to be a valid and binding obligation of any such
Guarantor, or any such Guarantor shall so assert, or NN Italy shall default in
the performance or observance of its guarantee under the Italian Guaranty, or
such guarantee for any reason whatsoever shall cease to be a valid and binding
obligation of NN Italy, or NN Italy shall so assert.
11.1.15. Failure of Lien. Any Security Document, after delivery
thereof pursuant to this Agreement, for any reason shall cease to create a valid
Lien on any of the Collateral purported to be covered thereby or, after
recordation of such Security Document as provided in this Agreement, shall cease
to be a perfected and first priority Lien on such Collateral, subject only to
Permitted Liens.
11.1.16. Defaults under Material Contracts. Any default or event of
default by the Borrower, any Guarantor or NN Italy shall occur under any
Material Contract, and, if subject to a cure right, shall fail to be cured or
corrected within the applicable cure period.
11.1.17. Material Adverse Change. Any Material Adverse Change shall
occur.
11.1.18. Change in Control. An event or series of events shall occur
by which (a) any "person" or "group" (within the meaning of Sections 13(d) and
14(d)(2) of the Securities Exchange Act of 1934), shall become the "beneficial
owner" (within the meaning of Rule 13d-3 and/or Rule 13d-5 under the Securities
Exchange Act of 1934, except that a Person shall be deemed to have "beneficial
ownership" of all shares or other ownership interests, as the case may be, that
such Person has the right to acquire without condition, other than the passage
of time, whether such right is exercisable immediately or only after the passage
of time), directly or indirectly, of thirty-five percent (35%) or more of the
combined voting power of all securities of the Domestic Borrower entitled to
vote in the election of directors, other than securities having such power only
by reason of the happening of a contingency (other than the passage of time), or
(b) during any period of up to twelve (12) consecutive months, individuals who
at the beginning of such period were directors or managers of the Domestic
Borrower shall cease for any reason to constitute a majority of the Board of
Directors or managers of the Domestic Borrower.
11.1.19. Change in Management. If any two (2) of the following persons
shall cease to be active in the day-to-day management of the Domestic Borrower:
Xxxxxxxx X. Xxxx, Xxxxx X. Xxxxxxx and Xxxxxxx X. Xxxxx, Xx.
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11.2. Lenders' Remedies. Upon the occurrence of an Event of Default or at
any time thereafter, and in each and every case, unless such Event of Default
shall have been remedied or waived in writing by Requisite Lenders, any one or
all of the following actions may be taken:
(a) upon the request of Requisite Lenders, the Administrative Agent
shall, by notice to the Borrower terminate any or all of the Commitments,
whereupon such Commitments of the Lenders thereunder immediately shall
terminate; provided, however, that upon the occurrence of any event
specified in either Section 11.1.6 or Section 11.1.7 the Commitments shall
terminate automatically without further action by the Administrative Agent
or the Lenders;
(b) upon request of Requisite Lenders, the Administrative Agent shall
declare all outstanding Obligations and other amounts owing under this
Agreement, the Notes and the other Loan Documents to be due and payable
immediately, and all such Obligations and other amounts immediately shall
be due and payable, without presentment, demand, protest or notice of any
kind, all of which are hereby expressly waived to the extent permitted by
applicable law; provided, however, that upon the occurrence of any event
specified in either Section 11.1.6 or Section 11.1.7 all such Obligations
and other amounts immediately shall be due and payable in full without
declaration or other notice;
(c) the Administrative Agent immediately, and without expiration of
any period of grace, may enforce payment of all Obligations of the
Borrower, the Guarantors and NN Italy to the Administrative Agent and the
Lenders under this Agreement, the Notes and the other Loan Documents, and
the Administrative Agent shall be entitled to all remedies available
hereunder or thereunder; and
(d) the Administrative Agent shall be entitled to exercise, for the
ratable benefit of the Lenders, all other rights, powers, privileges,
options and remedies available under or by virtue of the Loan Documents or
otherwise available at law or in equity.
ARTICLE 12.
THE AGENTS
12.1. Appointment. Each Lender hereby (a) irrevocably appoints AmSouth as
the Administrative Agent for such Lender and the other Lenders under this
Agreement, the Notes and the other Loan Documents, and (b) irrevocably
authorizes the Administrative Agent to take such action on its behalf under the
provisions of this Agreement, the Notes and the other Loan Documents and to
exercise such powers and perform such duties as are expressly delegated to the
Administrative Agent by the terms of this Agreement, the Notes and the other
Loan Documents, together with such other powers as are reasonably incidental
thereto. Each Lender hereby (a) irrevocably appoints SunTrust Bank as the Euro
Loan Agent for such Lender and the other Lenders under this Agreement, the Notes
and the other Loan Documents, and (b) irrevocably authorizes the Euro Loan Agent
to take such action on its behalf under the provisions
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of this Agreement, the Notes and the other Loan Documents and to exercise such
powers and perform such duties as are expressly delegated to the Euro Loan Agent
by the terms of this Agreement, the Notes and the other Loan Documents, together
with such other powers as are reasonably incidental thereto. Each Agent shall,
among other things, take such actions as such Agent is authorized to take
pursuant to this Agreement, the Notes and the other Loan Documents. As to any
matters not expressly provided for in this Agreement, the Agents may, but shall
not be required to, exercise any discretion or take any action; however, no
Agent shall be required to act or to refrain from acting upon the written
instructions of Requisite Lenders if such Agent shall be indemnified to its
satisfaction by the Lenders against any and all liability and expense that may
be incurred by it by reason of so acting or refraining from acting.
Notwithstanding anything to the contrary herein, the Agents shall have no
duties, responsibilities or fiduciary relationships with any Lender except those
expressly set forth in this Agreement, the Notes and the other Loan Documents,
and no implied covenants, responsibilities, duties, obligations or liabilities
shall be read into this Agreement, the Notes or the other Loan Documents or
otherwise exist against the Agents.
12.2. Delegation of Duties. The Agents may exercise any of their respective
powers or execute any of their respective duties under this Agreement, the Notes
and the other Loan Documents by or through one or more agents or
attorneys-in-fact and shall be entitled to obtain, and to rely on, advice of
counsel concerning all matters pertaining to such rights and duties. The Agents
may utilize the services of such agents and attorneys-in-fact as the Agents in
their respective sole discretion reasonably determine, and all reasonable fees
and expenses of such agents and attorneys-in-fact shall be paid by the
applicable Borrower on demand. No Agent shall be responsible for the negligence
or misconduct of any agents or attorneys-in-fact selected by such Agent in good
faith.
12.3. Limitation of Liability. None of the Agents nor their respective
officers, directors, employees, agents, attorneys-in-fact or affiliates shall be
(a) liable for any waiver, consent or approval given or any action taken or
omitted to be taken by it or by such Person under or in connection with this
Agreement, the Notes or the other Loan Documents, if authorized or permitted
hereunder, except for its or such Person's own gross negligence or willful
misconduct, or (b) responsible for the consequences of any oversight or error in
judgment by it or such Person whatsoever, except for its or such Person's own
gross negligence or willful misconduct. No Agent shall be responsible for (i)
the execution, validity, genuineness, effectiveness, sufficiency,
enforceability, perfection or priority of this Agreement, the Notes or the other
Loan Documents, (ii) the collectability of any amounts owing under this
Agreement, the Notes or the other Loan Documents, (iii) the value, sufficiency,
enforceability, perfection or collectability of any Collateral, (iv) the failure
by the Borrower, any Guarantor or any of their respective Subsidiaries to
perform its obligations under this Agreement, the Notes or the other Loan
Documents or to observe any conditions hereof or thereof, (v) the truth,
accuracy and completeness of the recitals, statements, representations or
warranties made by the Borrower, any Guarantor or any of their respective
Subsidiaries or any officer or agent thereof contained in this Agreement, the
Notes or the other Loan Documents, or in any certificate, report, statement,
document or other writing referred to or provided for in, or received by any
Agent in connection with, this Agreement, the Notes or the other Loan Documents
believed by any Agent to be genuine and correct and to have been signed, sent or
made by the proper Person or Persons.
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12.4. Reliance by the Agents. No Agent shall have any obligation (a) to
ascertain or to inquire as to the observance or performance of any of the
conditions, covenants or agreements in this Agreement, the Notes or the other
Loan Documents or in any document, instrument or agreement at any time
constituting, or intended to constitute, Collateral, (b) to ascertain or inquire
as to whether any notice, consent, waiver or request delivered to it shall have
been duly authorized or is genuine, accurate and complete or (c) to inspect the
properties, books or records of the Borrower, any Guarantor or any of their
respective Subsidiaries. Each Agent shall be entitled to rely, and shall be
fully protected in relying (i) upon any note, writing, resolution, notice,
consent, certificate, affidavit, letter, cablegram, telegram, telecopy, telex or
teletype message, statement, order or other document, instrument or conversation
believed by it to be genuine and correct and to have been signed, sent or made
by the proper Person or Persons, and (ii) upon advice and statements of legal
counsel (including counsel to the Borrower or the Guarantors), independent
accountants and other experts selected by such Agent. Each Agent may deem and
treat the payee of any Note as the owner thereof for all purposes unless a
written notice of the assignment, negotiation or transfer thereof, in accordance
with the provisions of this Agreement, shall have been delivered to such Agent
identifying the name of the subsequent payee or holder thereof. Each Agent shall
be entitled to fail or refuse, and shall be fully protected in failing or
refusing, to take any action required or permitted by it under this Agreement,
the Notes or the other Loan Documents unless (A) it first shall receive such
advice or concurrence of Requisite Lenders as it deems appropriate, or (B) it
first shall be indemnified to its satisfaction by the Lenders against any and
all liability and expense that may be incurred by it by reason of taking or
continuing to take any such action. In all cases each Agent shall be fully
protected in acting, or in refraining from acting, under this Agreement, the
Notes or the other Loan Documents in accordance with a request of Requisite
Lenders, and such request and any action taken or failure to act pursuant
thereto shall be binding upon all the Lenders and all future holders of the
Notes.
12.5. Notice of Default; Action by Agents. No Agent shall be deemed to have
knowledge or notice of the occurrence of any Default unless such Agent has
received notice from a Lender, the Borrower, any Guarantor or NN Italy referring
to this Agreement, describing such Default and stating that such notice is a
"Notice of Default". If any Agent receives such a notice, such Agent shall give
telephonic and written notice thereof to the Lenders as soon as is practicable.
The Agents shall take such action with respect to an Event of Default as shall
be reasonably directed by Requisite Lenders; provided, however, that unless and
until any Agent shall have received such directions, such Agent may (but shall
not be obligated to) take such action, or refrain from taking such action, with
respect to such Event of Default as it deems advisable in the best interests of
the Lenders.
12.6. Non-Reliance on the Agents by the Other Lenders. Each Lender
expressly acknowledges that none of the Agents nor any of their officers,
directors, employees, agents, attorneys-in-fact or affiliates has made any
representations or warranties to such Lender. No Agent shall have any
obligation, responsibility or liability to any of the Lenders regarding the
creditworthiness or financial condition of the Borrower, any of the Guarantors
or any of their respective Subsidiaries or for any recitals, statements,
information, representations or warranties herein or in any document,
certificate or other writing delivered in connection herewith or for the
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execution, effectiveness, genuineness, validity, enforceability, perfection,
collectability, priority or sufficiency of this Agreement or any other Loan
Document. No act by any Agent hereinafter taken, including any review of the
Borrower, the Guarantors and their respective Subsidiaries, shall be deemed to
constitute any representation or warranty by such Agent to any Lender. Each
Lender represents to the Agents that, independently and without reliance upon
the Agents or any other Lender and based on such documents and information as it
has deemed appropriate, it has made its own appraisal of and investigation into
the business, operations, property, financial and other condition and
creditworthiness of the Borrower, the Guarantors and their respective
Subsidiaries and has made its own decision to enter into this Agreement and to
make its Loans and otherwise participate in the transactions hereunder. Each
Lender also represents that, independently and without reliance upon the Agents
or any other Lender, and based on such documents and information as it deems
appropriate at the time, it shall continue to make its own credit analysis,
appraisals and decisions in taking or not taking action under this Agreement,
the Notes and the other Loan Documents and to make such investigation as it
deems necessary to inform itself as to the business, operations, property,
financial and other condition and creditworthiness of the Borrower, the
Guarantors and their respective Subsidiaries. No Agent shall be required to make
any inquiry concerning the performance or observance of any of the terms,
provisions or conditions of this Agreement or any other Loan Document, or the
financial condition of the Borrower, the Guarantors or NN Italy, or the
existence or possible existence of any Default. Except for notices, reports and
other documents expressly required to be furnished to the Lenders by the Agents
hereunder, the Agents shall have no obligation or liability to provide any
Lender with any credit or other information concerning the business, operations,
property, financial and other condition or creditworthiness of the Borrower, the
Guarantors or their respective Subsidiaries that may come into the possession of
any Agent or any of its respective officers, directors, employees, agents,
attorneys-in-fact or affiliates.
12.7. Indemnification. Each of the Lenders shall indemnify, defend and hold
harmless each Agent in its capacity as such (to the extent not reimbursed by the
applicable Borrower and without limiting the obligation of the applicable
Borrower to do so), ratably according to their respective Percentages, from and
against any and all claims, demands, lawsuits, costs, expenses, fees,
liabilities, obligations, losses, damages, actions, recoveries, judgments,
suits, costs, expenses or disbursements of any kind whatsoever, including
interest, penalties and reasonable attorneys' and paralegals' fees and costs and
amounts paid in settlement of any of the foregoing, whether direct, indirect,
consequential or incidental, that at any time (including at any time following
the satisfaction of the Obligations) may be imposed on, incurred by or asserted
against the Administrative Agent in any way relating to, resulting from or
arising out of this Agreement, the Notes or the other Loan Documents, the
transactions contemplated hereby or any action taken or omitted by such Agent
under or in connection with any of the foregoing; provided, however, that no
Lender shall be liable for the payment of any portion of such claims, demands,
lawsuits, costs, expenses, fees, liabilities, obligations, losses, damages,
actions, remedies, judgments, suits, costs, expenses or disbursements to the
extent such result arose solely from such Agent's gross negligence or willful
misconduct. The agreements in this Section 12.7 shall survive the repayment of
the Loans and the satisfaction of the other Obligations and shall be in addition
to and not in lieu of any other indemnification agreements set forth in the Loan
Documents.
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12.8. Payments. If in the opinion of any Agent, the distribution of any
amount received by such Agent in such capacity under this Agreement, the Notes
or the other Loan Documents might involve it in liability, such Agent may
refrain from making the distribution thereof until such Agent's right to make
such distribution shall have been adjudicated by a court of competent
jurisdiction. If a court of competent jurisdiction shall adjudge that any amount
received from and distributed by any Agent in such capacity as Agent is to be
repaid, each Person to whom any such distribution shall have been made either
(a) shall repay to such Agent its proportionate share of the amount so adjudged
to be repaid, or (b) shall repay the same in such manner and to such Persons as
shall be determined by such court.
12.9. Agents in Their Individual Capacity. Each Agent in its individual
capacity, and its Affiliates, may make loans and other financial accommodations
to, accept deposits from and generally engage in any kind of business with the
Borrower or any of the Guarantors and their respective Subsidiaries as though
such Agent were not an Agent hereunder. With respect to Loans made or renewed by
it and any Notes issued to it, each Agent in its individual capacity shall have
the same benefits, rights, powers and privileges under this Agreement, the Notes
and the other Loan Documents as any other Lender and may exercise the same as
though it were not an Agent, and the terms "Lender", "Lenders" and "Requisite
Lenders" shall include such Agent in its individual capacity.
12.10. Successor Agents. Any Agent may resign as such upon thirty (30)
days' prior written notice to the Lenders. If the any Agent shall resign as such
under this Agreement, then Requisite Lenders shall appoint from among the
Lenders a successor agent for the Lenders, which successor agent shall be
reasonably acceptable to the Borrower; provided, however, that acceptability to
the Borrower shall not be required if a Default has occurred and is continuing.
Upon acceptance of its appointment as successor agent, (a) such successor agent
shall succeed to the rights, powers, privileges and duties of such Agent, (b)
the retiring Agent shall be discharged of all its obligations and liabilities in
such capacity under this Agreement, the Notes and the other Loan Documents, (c)
the term "Administrative Agent" or "Euro Loan Agent", as the case may be, shall
mean such successor agent effective upon its appointment and (d) the retiring
Agent's rights, powers and duties as Administrative Agent or Euro Loan Agent, as
the case may be, shall be terminated, without any other or further act or deed
on the part of such retiring Agent or any of the parties to this Agreement or
any holders of the Notes. After any retiring Agent's resignation hereunder as
Administrative Agent or Euro Loan Agent, as the case may be,, the provisions of
this Article 12 shall continue to inure to its benefit as to any actions taken
or omitted to be taken by it while it was Agent under this Agreement.
ARTICLE 13.
ASSIGNMENTS AND PARTICIPATIONS
13.1. Successors and Assigns. This Agreement, the Notes and the other Loan
Documents shall be binding on and shall inure to the benefit of the Borrower,
the Guarantors, NN Italy, the Administrative Agent, the Lenders and their
respective successors and assigns, except as otherwise provided herein or
therein. Neither the Borrower nor the Guarantors may
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assign, transfer, hypothecate or otherwise convey (nor permit NN Italy to
assign, transfer hypothecate, or otherwise convey) their respective rights,
benefits, obligations or duties hereunder or thereunder without the prior
express written consent of the Lenders. Any purported assignment, transfer,
hypothecation or other conveyance by the Borrower, NN Italy or the Guarantors
without the prior express written consent of all the Lenders shall be void.
Neither the Administrative Agent nor any of the Lenders may sell, assign,
transfer, grant a participation in or otherwise dispose of all or any portion of
its interest in this Agreement, the Notes or the other Loan Documents except as
expressly provided herein.
13.2. Assignments.
13.2.1. Assignments. With prior notice to the Borrower, each Lender
may assign (other than the sale of a participation) up to one hundred percent
(100%) of its right, title and interest under this Agreement, the Notes and the
other Loan Documents (including all or a portion of its Commitments and the same
portion of the Loans at the time owing to it) to one or more banks or other
financial institutions; provided, however, that (a) each such assignment shall
be of a constant, and not a varying, percentage of all such Lender's right,
title and interest hereunder and thereunder, (b) such share equals no less than
$5,000,000 in the case of any one assignee, (c) any assignee shall execute and
deliver to the Administrative Agent an Assignment and Acceptance and a
non-refundable assignment fee of $3,500, and (d) a Lender may not assign any
interest without the prior approval of the Administrative Agent and, in the
absence of a Default, the Borrower, which approval shall not be unreasonably
withheld. Notwithstanding the foregoing, any Lender may assign, as collateral or
otherwise, any of its rights (including such Lender's rights to payments of
principal and/or interest on the Notes) under this Agreement to any Federal
Reserve Bank without notice to or consent of the Administrative Agent or the
Borrower.
13.2.2. Effect of Assignments. Upon the sale, assignment, transfer or
other disposition (other than the sale of a participation) of any of a Lender's
right, title and interest under this Agreement, the Notes and the other Loan
Documents to any assignee in accordance with this Section 13.2, then upon the
execution, delivery and acceptance of the Assignment and Acceptance, from and
after the effective date specified therein, (a) the transferor Lender no longer
shall have the rights, benefits and obligations under this Agreement, the Notes
or the other Loan Documents to the extent of the interest transferred (except
for such rights, benefits and obligations that such Lender would retain under or
with respect to this Agreement, the Notes or the other Loan Documents upon
payment in full of the Obligations), and (b) the assignee shall become a Lender,
shall succeed to the rights and benefits and assume the obligations of such
transferor Lender hereunder and thereunder to the extent of the interest
transferred.
13.2.3. Actions by the Borrower. The Borrower hereby agrees that it
shall execute and deliver, at the request of the Administrative Agent (a) one or
more substitute Notes to the order of such Lenders to evidence the portions of
the Loans retained and sold and (b) any amendment to any Loan Document to
effectuate the provisions of this Section 13.2.
13.3. Participations. Subject to the provisions of this Section 13.3, each
Lender shall have the right at any time to sell undivided participating
interests in all or any part of its
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Commitments and the Loans to one or more banks or other financial institutions;
provided, however, that (a) such sale or transfer shall not relieve such Lender
of any obligation or liability hereunder, (b) such Lender shall make and receive
all payments for the account of its participants and shall retain exclusively,
and shall continue to exercise exclusively, all rights of approval and
administration available hereunder with respect to such Lender's Commitments and
the Loans, even after giving effect to the sale of any such participation
(although such Lender may at its option agree with its participants that it will
not consent to any matter described in clauses (a) through (f) of Section 14.3.4
without their concurrence), and (c) such Lender shall make such arrangements
with its participants as may be necessary to accomplish the foregoing. No such
participant shall be a Lender for any purpose of this Agreement, other than for
purposes of Section 14.13, without the consent of the Administrative Agent.
13.4. Disclosure. In connection with any assignments, participations or
offers therefor pursuant to this Article 13, each Lender may disclose to any
assignee or participant or prospective assignee or participant such information
pertaining to the Borrower, the Guarantors or any of their respective
Subsidiaries as such Lender may deem appropriate or such assignee or participant
or prospective assignee or participant may request; provided, however, that
prior to any such disclosure such assignee or participant or prospective
assignee or participant shall agree to preserve the confidentiality of any
confidential information relating to the Borrower or its Subsidiaries received
by it on the same basis as provided in this Section 13.4.
13.5. Assignments and Participations as Units. No Lender shall assign or
sell any participation in its Commitments or the Loans, except in the form of
units consisting of pro rata interests in its Commitments and the Loans.
ARTICLE 14.
GENERAL PROVISIONS
14.1. Notices. Any notice, request, demand or other communication required
or permitted under this Agreement, the Notes or the other Loan Documents shall
be in writing and shall be deemed to be properly given (a) when received, if
personally delivered or sent by overnight courier with appropriate confirmation
of delivery, (b) two (2) Business Days after deposit in the mail, if mailed by
United States first class, certified or registered mail, postage prepaid, (c)
one (1) Business Day after deposit with a public telegraph company for
transmittal, charges prepaid, or (d) when received, if given by telecopy, with
appropriate confirmation, each to the appropriate address set forth below or to
such other address that any such party or the Administrative Agent may designate
by written notice to other parties.
If to the Borrower:
NN, Inc.
NN Euroball ApS
Xxxxxxxx 0, Xxxxx 00
89
0000 Xxxxx'x Xxxx Xxxxx
Xxxxxxx Xxxx, Xxxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxx
Telecopy No. 423/743-2670
with a copy to:
Xxxxxxxxx Xxxxxxx Xxxxx Xxxxxx LLP
00000 XXX Xxxxxxx, Xxxxx 000
Xxxxx, Xxxxxxxx 00000
Attn: H. Xxxx Xxxxx, III
Telecopy No. 402/964-5050
If to any of the Guarantors:
c/o NN, Inc.
Xxxxxxxx 0, Xxxxx 00
0000 Xxxxx'x Xxxx Xxxxx
Xxxxxxx Xxxx, Xxxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxx
Telecopy No. 423/743-2670
If to any of the Lenders:
Their respective addresses as set forth with their signatures on
this Agreement.
If to AmSouth as Administrative Agent:
AmSouth Bank
AmSouth Center
000 Xxxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxx 00000
Attn: Corporate Finance
Telecopy No. 615/748-1501
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with a copy to:
Bass, Xxxxx & Xxxx PLC
0000 XxXxxxx Xxxxxx
000 Xxxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxx 00000
Attn: Xxxxx X. Xxxxxxx, III
Telecopy No. 615/742-6293
If to SunTrust Bank as Euro Loan Agent:
SunTrust Bank
000 Xxxxxxxxx Xx., XX
Xxxxxxx, Xxxxxxx 00000
Attn: Foreign Exchange Desk
Telecopy No. 404/827-6348
with a copy to:
King & Spalding LLP
000 Xxxxxxxxx Xx., XX
Xxxxxxx, Xxxxxxx 00000
Attn: Xxxxxxx X. Xxxxxx
Telecopy No. 404/572-5100
14.2. Entire Agreement. The execution and delivery of this Agreement and
the other Loan Documents supersede all the negotiations or stipulations
concerning the matters that preceded or accompanied the execution and delivery
hereof and thereof (other than with respect to fees payable pursuant to separate
agreements between the Borrower and the Administrative Agent). This Agreement,
the Notes and the other Loan Documents also are intended, by the parties hereto
and thereto, as a complete and exclusive statement of the terms and conditions
hereof and thereof.
14.3. Amendments, Waivers and Consents.
14.3.1. Amendments. Except as otherwise set forth in this Agreement,
the provisions of (a) this Agreement may not be modified, amended, restated or
supplemented, except by a written instrument duly executed and delivered on
behalf of the Borrower, the Guarantors and Requisite Lenders, and (b) the Notes
and all Loan Documents other than this Agreement may not be modified, amended,
restated or supplemented, except by a written instrument duly executed and
delivered on behalf of the Borrower, any of the Guarantors or their respective
Subsidiaries, to the extent that the Borrower, any such Guarantor or Subsidiary
is a signatory party to such Note or such Loan Document, and on behalf of the
Administrative Agent, with the written consent of Requisite Lenders.
Notwithstanding anything to the contrary herein, the Administrative Agent and
Requisite Lenders may modify, amend, restate, supplement or waive any provision
of Article 12 without the consent of the Borrower or any Guarantor.
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14.3.2. Waivers and Consents. Except as otherwise set forth in this
Agreement, any waiver of the terms and conditions of this Agreement, the Notes
or the other Loan Documents, or any waiver of any Default and its consequences
hereunder or thereunder, and any consent or approval required or permitted by
this Agreement, the Notes or the other Loan Documents to be given by the
Lenders, may be made or given with, but only with, the written consent of
Requisite Lenders on such terms and conditions as specified in the written
instrument granting such waiver, consent or approval. A waiver, to be effective,
must be in writing and signed by the party making the waiver.
14.3.3. Effect of Waivers. In the case of any waiver, the Borrower,
the Guarantors, NN Italy the Lenders and the Administrative Agent shall be
restored to their former positions and rights under this Agreement, the Notes
and the other Loan Documents to the extent of such waiver, and any Default
waived shall be deemed to be cured and not continued; provided, however, that no
waiver shall constitute the waiver of any subsequent or other Default or impair
any right consequent thereon. No failure or delay on the part of the
Administrative Agent or any Lender to exercise or enforce any right or remedy
under or in connection with this Agreement, the Notes or the other Loan
Documents, whether by their respective terms, at law, in equity or otherwise,
shall operate as a waiver thereof. No single or partial exercise of any such
right or remedy shall preclude other or further exercise thereof or the exercise
of any other right or remedy.
14.3.4. Consent of All the Lenders. Without in each instance the prior
express written consent of the Administrative Agent and all the Lenders, no such
modification, amendment, restatement, supplement, waiver or consent shall:
(a) increase the aggregate Commitments, or increase the Commitment of
any Lender without such Lender's approval;
(b) reduce the amounts or extend the dates for the payment of any
Credit Fees that are payable ratably to all of the Lenders in accordance
with their respective Percentages of the Commitments;
(c) extend the maturity of the Notes or the date of any scheduled
principal payments or mandatory prepayments hereunder or thereunder;
(d) reduce the rate or extend the time of payment of interest
hereunder or under the Notes;
(e) waive the payment of any principal, interest or Credit Fees
payable hereunder or under the Notes;
(f) extend the Revolving Commitment Expiration Date or the Term Loan
Maturity Date except as expressly provided for in this Agreement;
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(g) consent to the assignment or transfer by the Domestic Borrower of
any of its Domestic Obligations under this Agreement, the Revolving Notes,
the Swing Line Note or the Domestic Term Notes or the other Loan Documents;
(h) consent to the assignment or transfer by the Euro Borrower of any
of its Euro Obligations under this Agreement, the Euro Term Notes or the
other Loan Documents;
(i) release a material portion of the Collateral or release any of the
guarantees hereunder, except as expressly provided herein; or
(j) amend or modify the definitions of "Percentages" or "Requisite
Lenders" contained in this Agreement.
14.3.5. Binding Effect. Any such modification, amendment, restatement,
supplement, waiver or consent shall apply equally to each of the Lenders and
shall be binding upon the Borrower, the Guarantors, NN Italy, the Lenders, the
Administrative Agent and all future holders of the Notes.
14.4. Independence of Covenants. All covenants hereunder shall be given
independent effect so that if a particular action or condition is not permitted
by any of such covenants, the fact that it would be permitted by an exception
to, or otherwise would be within the limitations of, another covenant shall not
avoid the occurrence of a Default if such action is taken or condition exists.
14.5. Interpretation. Neither this Agreement, the Notes or the other Loan
Documents, nor any uncertainty or ambiguity herein or therein, shall be
construed or resolved against the Administrative Agent, the Lenders, the
Borrower, the Guarantors or NN Italy whether under any rule of construction or
otherwise. This Agreement, the Notes and the other Loan Documents have been
reviewed by all the parties hereto and thereto and shall be construed and
interpreted according to the ordinary meaning of the words used as to accomplish
fairly the purposes and intentions of all such parties.
14.6. Inconsistencies With Other Documents. In the event there is a
conflict or inconsistency between this Agreement, the Notes or the other Loan
Documents, the terms of this Agreement shall control; provided, however, that
any provision of the Security Documents that imposes additional burdens on the
Borrower, any Guarantor or NN Italy or further restricts the rights of the
Borrower, any Guarantor or NN Italy or gives the Lenders additional rights shall
not be deemed to be in conflict or inconsistent with this Agreement and shall be
given full force and effect.
14.7. Severability. If any portion of this Agreement, the Notes or any of
the other Loan Documents shall be judged by a court of competent jurisdiction to
be unenforceable, the remaining portions shall be valid and enforceable to the
extent that the remaining terms thereof provide for the creation of the
Obligations and the consummation of the issuance of the Notes, the grant of
collateral security therefor, the guarantee thereof and the payment of principal
and
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interest in respect of the Obligations substantially on the same terms and
subject to the same conditions as set forth herein and therein.
14.8. Governing Law. This Agreement, the Notes and the other Loan
Documents, unless otherwise expressly set forth therein, shall be governed by,
construed and enforced in accordance with the laws of the State of Tennessee,
without reference to the conflicts or choice of law principles thereof, except
to the extent that the laws of a particular jurisdiction govern the creation,
perfection, priority and enforcement of liens on and security interests in the
Collateral. Notwithstanding the foregoing, if at any time the laws of the United
States of America permit any Lender to contract for, take, reserve, charge or
receive interest or loan charges in amounts greater than are allowed by the laws
of such state (whether such federal laws directly so provide or refer to the law
of the state where such Lender is located), then such federal laws shall to such
extent govern as to the interest and loan charges that such Lender is allowed to
contract for, take, reserve, charge or receive under this Agreement, the Notes
and the other Loan Documents. References to laws in this section are to such
laws as are now in effect, and, with respect to usury laws, if any, applicable
to any Lender and to the extent allowed thereby, to such laws as hereafter may
be in effect that allow a higher maximum nonusurious interest rate than such
laws now allow.
14.9. CONSENT TO JURISDICTION. THE BORROWER AND EACH GUARANTOR HEREBY
IRREVOCABLY CONSENT TO THE PERSONAL JURISDICTION OF THE STATE AND FEDERAL COURTS
LOCATED IN DAVIDSON COUNTY, TENNESSEE IN ANY ACTION, CLAIM OR OTHER PROCEEDING
ARISING OUT OF ANY DISPUTE IN CONNECTION WITH THIS AGREEMENT, THE NOTES AND THE
OTHER LOAN DOCUMENTS, ANY RIGHTS OR OBLIGATIONS HEREUNDER OR THEREUNDER OR THE
PERFORMANCE OF SUCH RIGHTS AND OBLIGATIONS. THE BORROWER AND EACH GUARANTOR
HEREBY IRREVOCABLY CONSENT TO THE SERVICE OF A SUMMONS AND COMPLAINT AND OTHER
PROCESS IN ANY ACTION, CLAIM OR PROCEEDING BROUGHT BY THE ADMINISTRATIVE AGENT
OR ANY LENDER IN CONNECTION WITH THIS AGREEMENT, THE NOTES OR THE OTHER LOAN
DOCUMENTS, ANY RIGHTS OR OBLIGATIONS HEREUNDER OR THEREUNDER OR THE PERFORMANCE
OF SUCH RIGHTS AND OBLIGATIONS, ON BEHALF OF ITSELF OR ITS PROPERTY, IN THE
MANNER SPECIFIED IN SECTION 14.1. NOTHING IN THIS SECTION 14.9 SHALL AFFECT THE
RIGHT OF THE ADMINISTRATIVE AGENT OR ANY LENDER TO SERVE LEGAL PROCESS IN ANY
OTHER MANNER PERMITTED BY LAW OR AFFECT THE RIGHT OF THE ADMINISTRATIVE AGENT OR
ANY LENDER TO BRING ANY ACTION OR PROCEEDING AGAINST THE BORROWER, ANY OF THE
GUARANTORS OR THEIR RESPECTIVE PROPERTIES IN THE COURTS OF ANY OTHER
JURISDICTIONS.
14.10. WAIVER OF JURY TRIAL. THE ADMINISTRATIVE AGENT, EACH LENDER, THE
BORROWER AND EACH GUARANTOR HEREBY IRREVOCABLY WAIVE THEIR RESPECTIVE RIGHTS TO
A JURY TRIAL WITH RESPECT TO ANY ACTION, CLAIM, COUNTERCLAIM OR OTHER PROCEEDING
ARISING OUT OF ANY DISPUTE IN CONNECTION WITH THIS AGREEMENT, THE NOTES OR THE
OTHER LOAN DOCUMENTS, ANY RIGHTS OR OBLIGATIONS HEREUNDER OR
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THEREUNDER OR THE PERFORMANCE OF SUCH RIGHTS AND OBLIGATIONS. The scope of this
waiver is intended to be all-encompassing with respect to any and all disputes
that may be filed in any court and that relate to the subject matter of this
transaction, including without limitation contract claims, tort claims, breach
of duty claims and all other common law and statutory claims. Each of the
parties hereto (a) acknowledges that this waiver is a material inducement for
the parties to the Loan Documents to enter into a business relationship, that
the parties to the Loan Documents have already relied on this waiver in entering
into same and the transactions that are the subject thereof, and that they will
continue to rely on this waiver in their related future dealings, and (b)
further warrants and represents that each has reviewed this waiver with its
legal counsel and that each knowingly and voluntarily waives its jury trial
rights following consultation with legal counsel. This waiver is irrevocable,
meaning that it may not be modified either orally or in writing, and this waiver
shall apply to any subsequent amendments, modifications, supplements,
extensions, renewals and/or replacements of this Agreement. In the event of
litigation, this Agreement may be filed as a written consent to a trial by the
court.
14.11. Cumulative Remedies. All rights and remedies provided in or
contemplated by this Agreement, the Notes and the other Loan Documents are
cumulative and not exclusive of any right or remedy otherwise provide herein,
therein, at law or in equity.
14.12. Expenses of Administration and Enforcement. The Domestic Borrower
shall pay on demand all reasonable expenses of the Administrative Agent in
connection with this Agreement, the Notes and the other Loan Documents, and the
preparation of any modifications, amendments, restatements, supplements or
waivers, including all attorneys' and paralegals' fees and expenses, all fees
and expenses for title, lien and other public records searches, filing and
recordation fees and taxes, duplicating expenses, corporation search fees,
appraisal fees, escrow agent fees and expenses, and all other customary
expenses. The Domestic Borrower shall pay on demand all expenses of the Lenders
for the conversion of Dollars to Euros in connection with the funding of the
Euro Term Loans. If a Default shall occur, all reasonable out-of-pocket expenses
incurred by the Lenders and the Administrative Agent (including administrative
expenses of the Administrative Agent and the Lenders and reasonable fees and
disbursements of outside counsel) in connection with such Default and collection
and other enforcement proceedings (including bankruptcy proceedings) resulting
therefrom shall be paid by the applicable Borrower, regardless of whether suit
is actually commenced to obtain any relief provided hereunder. The Domestic
Borrower shall indemnify, defend and hold harmless the Administrative Agent and
each of the Lenders from and against any and all documentary or filing taxes,
assessments or charges by any Governmental Authority by reason of the execution
and delivery of this Agreement, the Notes and the other Loan Documents and the
consummation of the transactions that are the subject thereof.
14.13. Indemnification. The Borrower and each of the Guarantors, jointly
and severally, shall indemnify, defend and hold harmless the Administrative
Agent and the Lenders (to the fullest extent permitted by law) from and against
any and all claims, demands, lawsuits, costs, expenses, fees, obligations,
liabilities, losses, damages, recoveries and deficiencies, including interest,
penalties and reasonable attorneys' and paralegals' fees and costs and amounts
paid in settlement of any of the foregoing, whether direct, indirect,
consequential or incidental, that the Administrative Agent and the Lenders may
incur or suffer or that may arise out of, result from or
95
relate to (a) this Agreement, the Notes or the other Loan Documents or the
transactions contemplated hereby or thereby (excluding actions arising out of
the Administrative Agent's or the Lenders' own gross negligence or willful
misconduct and actions arising out of claims made by the Administrative Agent or
any Lender against any of the others), or (b) any action under this Agreement,
the Notes or the other Loan Documents or the transactions contemplated hereby or
thereby (excluding actions arising out of the Administrative Agent's or the
Lenders' own gross negligence or willful misconduct and actions arising out of
claims made by the Administrative Agent or any Lender against any of the
others); provided, however, in no event shall Euro Borrower have any indemnity
obligations in respect of the Domestic Obligations. In no event shall the
Administrative Agent or any Lender be liable to the Borrower or any of the
Guarantors for any matter or thing in connection with this Agreement, the Notes
or the other Loan Documents other than to account for monies actually received
by them in accordance with the terms hereof. This Section 14.13 shall survive
termination of this Agreement.
14.14. Adjustment. Except with respect to payments on account of Swing Line
Loans, if any Lender (a "benefitted Lender") at any time shall receive any
payment of all or part of its Loans or the interest thereon or receive any
collateral therefor, whether voluntarily or involuntarily, by set-off or
otherwise, in an amount proportionately greater than any corresponding payment
to or collateral received by any other Lender in respect of such other Lender's
Loans or the interest thereon, such benefitted Lender shall purchase for cash
from the other Lenders such portion of each Lender's Loans, or shall provide
such other Lenders with the benefits of any such collateral, or the proceeds
thereof, as shall be necessary to cause such benefitted Lender to share the
excess payment or benefits of such collateral or proceeds ratably with each of
the Lenders; provided, however, that if all or any portion of such excess
payment or benefits thereafter is recovered from such benefitted Lender or set
aside, such purchase shall be rescinded and the purchase price and benefit
returned to the extent of such recovery, but without interest. Each Lender so
purchasing a portion of another Lenders' Loans may exercise all rights of
payment (including rights of setoff) with respect to such portion as fully as if
such Lender were the direct holder of such portion.
14.15. Setoff.
In addition to any rights and remedies of the Lenders provided by law, the
Lenders each shall have a security interest in any and all deposits of the
Borrower and the Guarantors (general or special, time or demand, provisional or
final) at any time held by any Lender or any Affiliate thereof, which security
interest shall secure the Obligations. Upon the occurrence and during the
continuance of any Event of Default, with the consent of the Administrative
Agent without prior notice to the Borrower or the Guarantors, any notice being
specifically waived by the Borrower and the Guarantors to the fullest extent
permitted by applicable law, each Lender may set off and apply against any
indebtedness, whether matured or unmatured, of the Borrower or any Guarantor to
the Lenders, any amount owing from any Lender or any Affiliate thereof to the
Borrower or any Guarantor at, or at any time after, the occurrence of an Event
of Default (and each Affiliate of any Lender is irrevocably authorized to permit
such setoff and application), and the aforesaid right of setoff may be exercised
by any Lender against the Borrower or the Guarantors or against any trustee in
bankruptcy, debtor in possession, assignee for the benefit of creditors,
receiver or execution, judgment, or attachment creditor of the Borrower or any
Guarantor, or against anyone else claiming through or against the Borrower or
any such
96
Guarantor or such trustee in bankruptcy, debtor in possession, assignee for the
benefit of creditors, receiver or execution, judgment or other attachment
creditor, notwithstanding the fact that such right of setoff shall not have been
exercised by any Lender prior to the making, filing or issuance, or service upon
any Lender of, or of notice of, any such petition, assignment for the benefit of
creditors, appointment or application for the appointment of a receiver, or
issuance of execution, subpoena, order or warrant. Each Lender promptly shall
notify the Borrower or the Guarantors and the Administrative Agent after any
such setoff and application made by any Lender; provided, however, that failure
to give such notice shall not affect the validity of such setoff and
application. Notwithstanding anything herein to the contrary, in no event shall
any of the deposits of the Euro Borrower held by any Lender or any Affiliate
thereof be set off and applied against the Domestic Obligations.
14.16. Other Accommodations to the Borrower and the Guarantors; No Rights
By Virtue of Cross-Collateralization.
(a) Each Lender (including the Administrative Agent) may, without
notice to or consent by any other Lender, make or participate in loans,
extensions of credit or other financial accommodations to or for the
benefit of the Borrower and/or any of its Subsidiaries on any terms that it
deems desirable, and engage in other business transactions, in the same
manner as if this Agreement were not in existence, all without limiting,
waiving or otherwise impairing any rights of such Lender or any other
Lender under this Agreement. Without limiting the generality of the
foregoing, the Lenders acknowledge and agree that so long as a Lender acts
in good faith and the other Lenders' interests in the Obligations and the
Collateral are not impaired thereby, (i) such Lender may be preferred or
secured in any manner that it deems advisable with respect to such other
loans, extensions of credit, financial accommodations and transactions,
(ii) such Lender shall be under no obligation to collect or attempt to
collect any payments in respect of the Obligations in preference to the
collection or enforcement of any other borrowings or obligations of the
Borrower and/or its Subsidiaries to such Lender, and (iii) any amounts
collected by such Lender from the Borrower and/or its Subsidiaries that are
not expressly designated (or reasonably determinable to be intended) as
being in payment of the Obligations may be applied to any of the
obligations of such Person to such Lender in any manner deemed appropriate
by such Lender.
(b) (i) The Lenders acknowledge and agree that the Collateral
constitutes all of the collateral security for the Euro Obligations and
that, as among themselves, no Lender shall have any interest in (i) any
property or interests of the Borrower or any of its Subsidiaries, other
than the Collateral, that now or hereafter secures loans, extensions of
credit, other financial accommodations and other transactions (excluding
the Euro Obligations), of the Borrower or any of its Subsidiaries with any
other Lender, whether entered into directly or acquired by such Lender,
(ii) any property of the Borrower or any of its Subsidiaries, other than
the Collateral, now or hereafter in the possession or control of any other
Lender, (iii) any deposit, not constituting Collateral, now or hereafter
held by any other Lender, or (iv) any other indebtedness now or hereafter
owing to any other Lender; any of which may be or become security for or
otherwise available for payment or performance of the Euro Obligations by
reason of any cross-collateralization or any general description of secured
indebtedness(es) and/or obligation(s) contained in any
97
mortgage, security agreement or other security instrument or agreement held
by any Lender, or by reason of the right of setoff, counterclaim or
otherwise. Notwithstanding the foregoing, if any such property, deposit or
indebtedness, or any proceeds thereof, in the discretion of the Lender
holding same, is applied to the reduction of the Euro Obligations, then all
of the Lenders shall be entitled to their respective Percentages of such
application in the manner provided in Sections 3.3 and 14.14.
(c) (ii) The Lenders acknowledge and agree that the Domestic
Collateral constitutes all of the collateral security for the Domestic
Obligations and that, as among themselves, no Lender shall have any
interest in (i) any property or interests of the Domestic Borrower or any
of its Subsidiaries, other than the Domestic Collateral, that now or
hereafter secures loans, extensions of credit, other financial
accommodations and other transactions (excluding the Domestic Obligations),
of the Domestic Borrower or any of its Subsidiaries with any other Lender,
whether entered into directly or acquired by such Lender, (ii) any property
of the Domestic Borrower or any of its Subsidiaries, other than the
Domestic Collateral, now or hereafter in the possession or control of any
other Lender, (iii) any deposit, not constituting Domestic Collateral, now
or hereafter held by any other Lender, or (iv) any other indebtedness now
or hereafter owing to any other Lender; any of which may be or become
security for or otherwise available for payment or performance of the
Domestic Obligations by reason of any cross-collateralization or any
general description of secured indebtedness(es) and/or obligation(s)
contained in any mortgage, security agreement or other security instrument
or agreement held by any Lender, or by reason of the right of setoff,
counterclaim or otherwise. Notwithstanding the foregoing, if any such
property, deposit or indebtedness, or any proceeds thereof, in the
discretion of the Lender holding same, is applied to the reduction of the
Domestic Obligations, then all of the Lenders shall be entitled to their
respective Percentages of such application in the manner provided in
Sections 3.3 and 14.14.
14.17. Survival of Representations and Warranties. All representations and
warranties of the Borrower and the Guarantors set forth in this Agreement, the
Notes and the other Loan Documents and in any other certificate, opinion or
other statement provided at any time by or on behalf of the Borrower and the
Guarantors in connection herewith shall survive the execution of the delivery of
this Agreement, the Notes and the other Loan Documents, the purchase and sale of
the Notes hereunder and the payment or other satisfaction of the Obligations.
14.18. Relationship of the Parties. None of the Administrative Agent or the
Lenders shall be deemed partners or joint venturers with the Borrower or the
Guarantors or any Affiliate thereof in making this Agreement or by any action
taken hereunder. The Borrower and the Guarantors, jointly and severally, shall
indemnify, defend and hold harmless the Lenders and the Administrative Agent
from and against any and all claims, demands, lawsuits, costs, expenses, fees,
obligations, liabilities, losses, damages, recoveries and deficiencies,
including interest, penalties and reasonable attorneys' fees and costs, whether
direct, indirect, consequential or incidental, that the Lenders or the
Administrative Agent may incur or suffer or that may arise out of, result from
or relate to such a construction of the parties and their relationship;
provided, however, the Euro Borrower shall have no such obligation to the
Administrative Agent and the
98
Lenders with respect to any obligations of the Domestic Borrower hereunder. This
Section 14.18 shall survive termination of this Agreement.
14.19. Destruction of Records. Any documents, schedules, invoices or other
papers delivered to the Administrative Agent or the Lenders at their option may
be destroyed or otherwise disposed of by them six (6) months after they are
delivered to or received by them, unless the Borrower or any Guarantor requests,
in writing, the return of such documents, schedules, invoices or other papers
and makes reasonably acceptable arrangements, at the Borrower's or such
Guarantor's expense, for their return.
14.20. Execution in Counterparts; Effectiveness.
(a) This Agreement may be executed in multiple counterparts, each of
which shall be deemed an original hereof for all purposes, but all of which
together shall constitute one and the same document. One or more
counterparts of this Agreement may be executed by one or more of the
parties hereto, and some different counterparts or copies executed by other
parties. Each counterpart hereof executed by any party hereto shall be
binding upon the party executing same even though other parties may execute
one or more different counterparts, and all counterparts hereof so executed
shall constitute but one and the same agreement. Each party hereto, by
execution of a counterpart hereof, expressly authorizes and directs any
other party hereto to detach the signature pages (and any corresponding
acknowledgment pages) thereof from the counterpart hereof executed by the
authorizing party and affix same to another identical counterpart hereof
such that upon execution of multiple counterparts hereof by all parties
hereto, there shall be one counterpart hereof to which is attached the
signature pages (and any corresponding acknowledgment pages) containing
signatures (and acknowledgments) of all parties hereto.
(b) This Agreement shall become effective when (i) the Administrative
Agent shall have received counterparts or signature pages executed by the
Borrower, the Guarantors, the Administrative Agent and the Lenders, or (ii)
in the case of any Lender, the Administrative Agent shall have received
telecopied notice from such Lender that it has executed a counterpart
hereof or signature page hereto and forwarded the same to the
Administrative Agent by first class, registered or certified mail as set
forth in Section 14.1. A set of the copies of this Agreement or
counterparts signed by all of the parties shall be lodged with the
Borrower, on behalf of itself and the Guarantors, and the Administrative
Agent.
14.21. Interest and Loan Charges Not to Exceed Maximum Amounts Allowed by
Law. It is the intention of the Borrower and the Lenders to conform strictly to
all laws applicable to the Lenders that govern or limit the interest and loan
charges that may be charged in respect of the Obligations. Anything in this
Agreement, the Notes or any of the other Loan Documents to the contrary
notwithstanding, in no event whatsoever, whether by reason of advancement of
proceeds of the Loans, acceleration of the maturity of the unpaid balance of any
of the Obligations or otherwise, shall the interest and loan charges agreed to
be paid to any of the Lenders for the use of the money advanced or to be
advanced hereunder exceed the maximum
99
amounts collectible by such Lender pursuant to applicable law. If for any reason
whatsoever the interest or loan charges paid or contracted to be paid by the
Borrower to any of the Lenders in respect of the Obligations shall exceed the
maximum amounts collectible under the law applicable to such Lender, then, in
that event, and notwithstanding anything to the contrary in this Agreement, the
Notes or any other Loan Document: (a) the aggregate of all consideration that
constitutes interest or loan charges under the law applicable to such Lender
that is contracted for, taken, reserved, charged or received under this
Agreement, the Notes or any other Loan Document or otherwise in connection with
the Obligations under no circumstances shall exceed the maximum amounts allowed
by such applicable law, and any excess shall be credited by such Lender on the
principal amount of the Obligations (or, to the extent the principal amount
outstanding under this Agreement, the Notes and the other Loan Documents has
been or thereby would be paid in full, refunded to the Borrower); and (b) in the
event that the maturity of any or all of the Obligations is accelerated by
reason of an election of the Lenders resulting from any Default under this
Agreement or otherwise, or in the event of any required or permitted prepayment,
then such consideration that constitutes interest or loan charges under the law
applicable to any Lender may never include more than the maximum amounts allowed
by the law applicable to such Lender, and any excess interest or loan charges
provided for in this Agreement or otherwise shall be canceled automatically as
of the date of such acceleration or prepayment and, if theretofore paid, shall
be credited by such Lender on the principal amount of the Obligations (or, to
the extent the principal amount of the Obligations has been or thereby would be
paid in full, refunded by such Lender to the Borrower). All sums paid or agreed
to be paid to the Lenders for the use, forbearance or detention of sums due
hereunder shall, to the extent permitted by applicable law, be prorated,
allocated and spread throughout the full term of the Obligations until payment
in full so that the rate or amount of interest and loan charges on account of
the Obligations will not exceed any applicable legal limitation. The right to
accelerate the maturity of the Obligations does not include the right to
accelerate the maturity of any interest or loan charges not otherwise accrued on
the date of such acceleration, and the Lenders do not intend to charge or
collect any unearned interest or loan charges in the event of any such
acceleration.
14.22. Final Agreement. This written agreement represents the final
agreement between the parties and may not be contradicted by evidence of prior,
contemporaneous or subsequent oral agreements of the parties. There are no
unwritten oral agreements between the parties.
14.23. Amendment and Restatement. This Agreement constitutes an amendment
and restatement of that certain Credit Agreement dated as of July 20, 2001 by
and among Domestic Borrower, the Lenders party thereto, Bank One, Kentucky, NA
as Co-Agent and AmSouth as Administrative Agent, as amended from time to time.
14.24. Judgment Currency.
(a) Each of the Borrower's, Guarantor's and NN Italy's obligations
hereunder and the other Loan Documents to make payments in a particular
currency as the case may be (the "Obligation Currency") shall not be
discharged or satisfied by any tender or recovery in any currency other
than the Obligation Currency, whether pursuant to any judgment expressed in
or converted into another currency or otherwise, except to the
100
extent that such tender or recovery, when converted to the Obligation
Currency under normal banking procedures, actually results in the effective
receipt by any Agent or a Lender of the full amount of the Obligation
Currency expressed to be payable to such Agent or such Lender under this
Agreement or the other Loan Documents. If for the purpose of obtaining or
enforcing judgment against any Borrower, the Guarantors or NN Italy in any
court or in any jurisdiction, it becomes necessary to convert an amount due
in the Obligation Currency into another currency (the "Judgment Currency"),
the rate of exchange that shall be applied shall be that at which in
accordance with normal banking procedures the applicable Agent could
purchase the Obligation Currency with the Judgment Currency on the Business
Day next preceding that on which such judgment is rendered (the "Judgment
Currency Conversion Date").
(b) If there is a change in the rate of exchange prevailing between
the Judgment Currency Conversion Date and the date of actual payment of the
amount due, the Borrower and the Guarantors, as a separate obligation and
notwithstanding such judgment, indemnify the Agents and the Lenders for,
and covenant and agree to pay, or cause to be paid, such additional
amounts, if any (but in any event not a lesser amount), as may be necessary
to ensure that the amount paid in the Judgment Currency, when converted at
the rate of exchange quoted by the Euro Loan Agent at its prevailing rate
for such currency exchange on the date of payment under normal banking
practices, will produce the amount of the Obligation Currency which could
have been purchased with the amount of Judgment Currency stipulated in the
judgment or judicial award at the rate of exchange prevailing on the
Judgment Currency Conversion Date.
(c) For purposes of determining the currency equivalent for this
Section, such amounts shall include any premium and costs payable in
connection with the purchase of the Obligation Currency.
14.25. Dollar Equivalent Computations. Unless otherwise provided herein, to
the extent that the determination of compliance with any requirement of this
Agreement requires the conversion to Dollars of foreign currency amounts, such
Dollar amount shall be computed using the Dollar Equivalent of the amount of
such foreign currency at the time such item is to be calculated or is to be or
was incurred, created or suffered or permitted to exist, or assumed or
transferred or sold for purposes of this Agreement (except if such item was
incurred, created or assumed, or suffered or permitted to exist or transferred
or sold prior to the Closing Date, such conversion shall be made based on the
Dollar Equivalent of the amounts of such foreign currency at the date hereof).
14.26. Euro Equivalent Computations. Unless otherwise provided herein, to
the extent that the determination of compliance with any requirement of this
Agreement requires the conversion of amounts in Dollar to Euros, such Euro
amount shall be computed using the Euro Equivalent of the amount of Dollars at
the time such item is to be calculated or is to be or was incurred, created or
suffered or permitted to exist, or assumed or transferred or sold for purposes
of this Agreement (except if such item was incurred, created or assumed, or
suffered or permitted to exist or transferred or sold prior to the Closing Date,
such conversion shall be made based on the Euro Equivalent of the amounts of
such Dollars at the date hereof).
101
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered as of the date first written above.
BORROWER:
NN, INC.,
a Delaware corporation
By: /s/ Xxxxx X. Xxxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxxx
---------------------------------------
Title: VP & CFO
--------------------------------------
NN EUROBALL ApS
By: /s/ Xxxxx X. Xxxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxxx
---------------------------------------
Title: Director
--------------------------------------
GUARANTORS:
INDUSTRIAL MOLDING GP, LLC,
a Delaware limited liability company
By: /s/ Xxxxx X. Xxxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxxx
---------------------------------------
Title: Manager
--------------------------------------
INDUSTRIAL MOLDING LP, LLC,
a Tennessee limited liability company
By: /s/ Xxxxxxx X. Xxxxx, Xx.
-----------------------------------------
Name: Xxxxxxx X. Xxxxx, Xx.
---------------------------------------
Title: Manager
--------------------------------------
102
INDUSTRIAL MOLDING GROUP, L.P.,
a Tennessee limited partnership
By: Industrial Molding GP, LLC, a Delaware
limited liability company, its general partner
By: /s/ Xxxxx X. Xxxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxxx
---------------------------------------
Title: Manager
--------------------------------------
DELTA RUBBER COMPANY,
a Connecticut corporation
By: /s/ Xxxxx X. Xxxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxxx
---------------------------------------
Title: Vice President
--------------------------------------
KUGELFERTIGUNG ELTMANN GmbH, a
German Company
By: /s/ Xxxxx Xxxxxx
-----------------------------------------
Name: Xxxxx Xxxxxx
---------------------------------------
Title: GeschΓ‘aftsfΓΌhrer
--------------------------------------
By: /s/ Xxxxxxxx Xxxxxx
-----------------------------------------
Name: Xxxxxxxx Xxxxxx
---------------------------------------
Title: GeschΓ‘aftsfΓΌhrer
--------------------------------------
NN NETHERLANDS B.V., a Dutch company
By: /s/ Xxxxx X.Xxxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxxx
---------------------------------------
Title: Director
--------------------------------------
103
NN MEXICO, LLC, a Delaware limited liability
company
By: /s/ Xxxxxxx X. Xxxxx, Xx.
-----------------------------------------
Name: Xxxxxxx X. Xxxxx, Xx.
---------------------------------------
Title: Manager
--------------------------------------
NN ARTE S. De X.X. De C.V., a Mexican company
By: /s/ Xxxxxxx X. Xxxxx, Xx.
-----------------------------------------
Name: Xxxxxxx X. Xxxxx, Xx.
---------------------------------------
Title: Chairman
--------------------------------------
NN EUROBALL IRELAND LIMITED, an Irish company
By: /s/ Xxxxxx X. Xxxx
-----------------------------------------
Name: Xxxxxx X. Xxxx
---------------------------------------
Title: Director
--------------------------------------
104
[Lender's Signature Page to NN, Inc.
Credit Agreement dated May 1, 2003]
AMSOUTH BANK, as a Lender and as
Administrative Agent
By: /s/ Xxxxxx Xxxx
-----------------------------------------
Name: Xxxxxx Xxxx
---------------------------------------
Title: VP
--------------------------------------
Address: AmSouth Bank
AmSouth Center
000 Xxxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxx 00000
Attn: Corporate Finance
Telecopy No. 615/748-1501
Initial Commitment: $31,500,000
*(subject to Section 2.1.1)
Percentage 35.0%
105
THIS PAGE INTENTIONALLY RESERVED
106
[Lender's Signature Page to NN, Inc.
Credit Agreement dated May 1, 2003]
FIRST TENNESSEE BANK NATIONAL
ASSOCIATION, as a Lender
By: /s/ Xxxxxxx X. Xxxxxx
-----------------------------------------
Name: Xxxxxxx X. Xxxxxx
---------------------------------------
Title: Executive Vice President
--------------------------------------
Address: First Tennessee Bank National
Association
0000 Xxxxx Xxxx Xxxxxx
P. X. Xxx 0000
Xxxxxxx Xxxx, XX 00000
Attn: Xxxxx Xxxxxx
Telecopy No. 423/461-1208
Initial Commitment: $8,500,000
*(subject to Section 2.1.1)
Percentage: 9.4444445%
107
[Lender's Signature Page to
NN, Inc.
Credit Agreement dated May 1, 2003]
UNION PLANTERS BANK, NATIONAL
ASSOCIATION as a Lender
By: /s/ Xxxxx X. Xxxxxxxx
-----------------------------------------
Name: Xxxxx X. Xxxxxxxx
---------------------------------------
Title: Vice President
--------------------------------------
Address: Union Planters Bank, National
Association
000 Xxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attn: Xxxxxxxx X. Xxxxxx
Telecopy No. 615/726-4274
Initial Commitment: $15,000,000
*(subject to Section 2.1.1)
Percentage: 16.6666667%
108
[Lender's Signature Page to
NN, Inc.
Credit Agreement dated May 1, 2003]
INTEGRA BANK, N.A., as a Lender
By: /s/ Xxxxxxx X. Xxxxxxxxxx
-----------------------------------------
Name: Xxxxxxx X. Xxxxxxxxxx
---------------------------------------
Title: Senior Vice President
--------------------------------------
Address: Integra Bank, N.A.
00 X.X. Xxxxx Xxxxxx
P. O. Xxx 000
Xxxxxxxxxx, XX 00000
Attn: Xxxxxxx X. Xxxxxxxxxx
Telecopy No. 812/464-9691
Initial Commitment: $10,000,000
*(subject to Section 2.1.1)
Percentage: 11.1111111%
109
[Lender's Signature Page to
NN, Inc.
Credit Agreement dated May 1, 2003]
SUNTRUST BANK, as a Lender
By: /s/ Xxxxxxx X. Xxxxxxx III
-----------------------------------------
Name: Xxxxxxx X. Xxxxxxx, III
---------------------------------------
Title: Group Vice President
--------------------------------------
Address: SunTrust Bank
000 Xxxxxxxxxxx Xxxx
Xxxxxxx Xxxx, XX 00000
Attn: Xxxxxxx X. Xxxxxxx
Telecopy No. 423/434-0338
Initial Commitment: $25,000,000
*(subject to Section 2.1.1)
Percentage: 27.7777777%
110
SCHEDULES AND EXHIBITS
Schedules
Schedule 7.1 Borrower, Guarantors and Subsidiaries - Capitalization
and Jurisdictions of Incorporation and Foreign Qualification
Schedule 7.3 Post-Closing Consents
Schedule 7.4 Conflicts
Schedule 7.6 Pending Litigation
Schedule 7.17A Indebtedness
Schedule 7.17B Contingent Obligations
Schedule 7.18A Business Locations
Schedule 7.18B Trade Names
Schedule 7.25 Environmental Matters
Schedule 7.26 Material Contracts
Schedule 9.4 Existing Investments
111
Exhibits
Exhibit 1.1A Form of Supplement to Credit Agreement
Exhibit 1.1B Form of Subordination Provisions
Exhibit 2.2.5 Form of Notice of Borrowing
Exhibit 2.4.2 Form of Notice of Conversion/Continuation
Exhibit 2.5A Form of Revolving Note
Exhibit 2.5B Form of Domestic Term Note
Exhibit 2.5C Form of Swing Line Note
Exhibit 2.5D Form of Euro Term Note
Exhibit 4.1A Form of Pledge Agreement
Exhibit 4.1B Form of Stock Pledge Agreement
Exhibit 4.1C Form of Italian Guaranty
Exhibit 6.1.1A Form of Opinion of Counsel to the Borrower and the Guarantors
Exhibit 6.1.1B Form of Solvency Certificate of Borrower
Exhibit 6.1.1C Form of Solvency Certificate of Guarantors
Exhibit 13.2 Form of Assignment and Acceptance
112
