1
1999 CREDIT AGREEMENT
AMONG
XXXXXXX COMPANY
AND
THE LENDERS PARTIES HERETO,
AS LENDERS
AND
BANK ONE, MICHIGAN,
AS AGENT FOR THE LENDERS
DATED
SEPTEMBER 23, 1999
2
TABLE OF CONTENTS
ARTICLE I. DEFINITIONS
1.1 Certain Definitions.............................................................................1
1.2 Other Definitions; Rules of Construction.......................................................12
ARTICLE II. THE COMMITMENT AND THE ADVANCES
2.1 Commitments of the Lenders.....................................................................13
2.2 [Reserved].....................................................................................15
2.3 Effect on Commitments..........................................................................15
2.4 Termination and Reduction of the Commitments...................................................15
2.5 Facility Fee...................................................................................16
2.6 Letter of Credit Fees..........................................................................16
2.7 Agency Fee.....................................................................................16
2.8 Extension of Termination Date..................................................................17
ARTICLE III. THE LOANS AND LETTERS OF CREDIT
3.1 Disbursing Loans and Letter of Credit Advances.................................................18
3.2 Conditions for Disbursing Initial Loans or Letter of Credit Advances...........................21
3.3 Further Conditions for Disbursing Loans or Letter of Credit Advances...........................22
3.4 Subsequent Elections as to Revolving Credit Loans..............................................23
3.5 Limitation of Requests and Elections...........................................................24
3.6 Minimum Amounts................................................................................14
ARTICLE IV. PAYMENTS AND PREPAYMENTS OF LOANS
4.1 Principal Payments.............................................................................24
4.2 Interest Payments..............................................................................26
4.3 Letter of Credit Reimbursement Payments........................................................26
4.4 Payment Method.................................................................................28
4.5 No Setoff or Deduction.........................................................................29
4.6 Payment on Non-Business Day; Payment Computations..............................................29
ARTICLE V. REPRESENTATIONS AND WARRANTIES
5.1 Corporate Existence and Power..................................................................30
5.2 Corporate Authority............................................................................30
5.3 Binding Effect.................................................................................30
5.4 Subsidiaries...................................................................................30
5.5 Litigation.....................................................................................31
5.6 Use of Loans and Letter of Credit Advances.....................................................31
5.7 Consents, Etc..................................................................................31
5.8 Taxes..........................................................................................32
5.9 Title to Properties............................................................................32
1999 CREDIT AGREEMENT
-i-
3
5.10 Financial Condition............................................................................32
5.11 Solvency.......................................................................................33
5.12 ERISA Compliance...............................................................................33
5.13 Labor Disputes and Casualties..................................................................33
5.14 Environmental, Safety, Drug and Cosmetic Regulations...........................................33
5.15 Year 2000 Matters..............................................................................34
ARTICLE VI COVENANTS
6.1 Affirmative Covenants..........................................................................34
6.2 Negative Covenants.............................................................................39
ARTICLE VII. DEFAULT
7.1 Events of Default..............................................................................44
7.2 Remedies.......................................................................................47
ARTICLE VIII. THE AGENT AND THE LENDERS
8.1 Appointment of Agent...........................................................................48
8.2 Scope of Agency................................................................................48
8.3 Duties of Agent................................................................................49
8.4 Resignation of Agent...........................................................................49
8.5 Pro Rata Sharing by Lenders....................................................................50
ARTICLE IX YIELD PROTECTION AND CONTINGENCIES
9.1 Additional Costs...............................................................................50
9.2 Illegality and Impossibility...................................................................52
9.3 Funding Loss Indemnification...................................................................52
9.4 HLT............................................................................................53
ARTICLE X. MISCELLANEOUS
10.1 Amendments, Etc................................................................................53
10.2 Notices........................................................................................54
10.3 Conduct No Waiver; Remedies Cumulative.........................................................55
10.4 Reliance on and Survival of Various Provisions.................................................56
10.5 Expenses; Indemnification......................................................................56
10.6 Successors and Assigns.........................................................................58
10.7 Participations and Assignments.................................................................58
10.8 Counterparts...................................................................................59
10.9 Governing Law..................................................................................59
10.10 Table of Contents and Headings.................................................................59
10.11 Construction of Certain Provisions.............................................................59
10.12 Integration and Severability...................................................................59
10.13 Interest Rate Limitation.......................................................................60
10.14 Execution by Guarantors........................................................................60
10.15 Foreign Lenders................................................................................60
1999 CREDIT AGREEMENT
-ii-
4
EXHIBITS
Exhibit A Revolving Credit Note
Exhibit B Swing Line Note
Exhibit C Extension Request
Exhibit D Request for Advance
Exhibit E Notice of Continuation or Conversion
Exhibit F Subsidiaries
Exhibit G Litigation
Exhibit H Environmental
Exhibit I Insurance
Exhibit J Indebtedness
Exhibit K Liens
Exhibit L Assignment and Acceptance
1999 CREDIT AGREEMENT
-iii-
5
THIS 1999 CREDIT AGREEMENT, dated as of September 23, 1999 (this
"Agreement"), is among XXXXXXX COMPANY, a Michigan corporation (the "Company"),
the lenders named in Section 2.1 hereof (collectively, the "Lenders" and
individually, a "Lender"), and BANK ONE, MICHIGAN, a Michigan banking
corporation, as agent for the Lenders (in such capacity, the "Agent").
RECITALS
The Company desires to obtain an unsecured revolving bank
credit, including letters of credit, in the aggregate principal amount not to
exceed $200,000,000, reducing to $175,000,000 on or before January 31, 2000, and
expiring on June 30, 2004, and the Lenders are willing to establish such a
credit facility in favor of the Company on the terms and conditions herein set
forth.
AGREEMENT
In consideration of the premises and of the mutual agreements herein
contained, the parties hereto agree as follows:
ARTICLE I. DEFINITIONS
1.1 Certain Definitions. As used herein the following terms shall have
the following respective meanings:
"Acquisition" is defined in Section 6.2(g).
"Adjusted EBIT" means (a), for periods during the Company's fiscal year
ending July 3, 1999, the Consolidated EBIT of the Company and its Subsidiaries
for such period, plus (i) $14,177,000 (corresponding to the write-off of Russian
investment), (ii) $6,160,000 (corresponding to restructuring charges taken), and
(iii) $2,621,000 (corresponding to a permanent impairment of investment
recognized), and less $3,952,000 (corresponding to net litigation insurance
proceeds received) and (b), for any other period, the Consolidated EBIT of the
Company and its Subsidiaries for such period.
"Affiliate", when used with respect to any person, means any other
person which, directly or indirectly, controls or is controlled by or is under
common control with such person. For purposes of this definition, "control"
(including the correlative meanings of the terms "controlled by" and "under
common control with"), with respect to any person, means possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of such person, whether through the ownership of voting securities or
by contract or otherwise.
"Applicable Margin" means, during the six-month period following the
Effective Date, the percentage per annum set forth below next to the row labeled
"Greater than and equal to 2.5 to 1.0" and, thereafter, the percentage per annum
set forth below in accordance with the then-applicable Leverage Ratio
(calculated as set forth in Section 6.2(c) of this Agreement):
6
LEVERAGE RATIO EUROCURENCY FACILITY FEE
RATE L/C FEE UNDER SECTION 2.5
----------- ------- -----------------
Less than 0.5 to 1.0 .425% .625% .20%
Greater than or equal to 0.5 to 1.0 and less .525% .75% .225%
than 1.5 to 1.0
Greater than or equal to 1.5 to 1.0 and less .75% 1.0% .25%
than 2.5 to 1.0
Greater than or equal to 2.5 to 1.0 .95% 1.25% .30%
The applicable Leverage Ratio shall be determined as of the last day of
each fiscal quarter of the Company based on information provided by the Company
on or before the 45th day after the close of such quarter pursuant to Section
6.1(d)(ii). Any change in the Applicable Margin resulting from a change in the
Leverage Ratio shall be effective on the first day of the month following
receipt of the information referenced above provided by the Company on or before
the 45th day after the close of each fiscal quarter of the Company but shall be
subject to adjustment in accordance with and as of the date of the computation
subsequently furnished to the Lenders with the quarterly financial statements of
the Company and the Subsidiaries pursuant to Section 6.1(d)(ii)(B).
"Assignment and Acceptance" means the form of Assignment and Acceptance
attached as Exhibit L hereto.
"Bank One" means Bank One, Michigan, a Michigan banking corporation.
"Business Day" means a day other than a Saturday, Sunday or other day
on which the Agent is not open for the transaction of substantially all of its
banking functions.
"Capital Expenditures" means any expenditures for any fixed asset or
any other capital expenditure as determined in accordance with Generally
Accepted Accounting Principles.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time.
"Commitments" means the commitments of the Lenders to lend pursuant to
Section 2.1(a), as such amounts may be reduced from time to time pursuant to
Section 2.4.
"Consolidated" or "consolidated" means, when used with reference to any
financial term in this Agreement, the aggregate for the Company and the
Subsidiaries of the amounts signified by such term for all such persons
determined on a consolidated basis in accordance with Generally Accepted
Accounting Principles.
"Credit" means the revolving bank credit established under Section 2.1
in the amount of the Commitments.
"Cumulative Net Income" of any person means, as of any date, the net
income (after deduction for income and other taxes of such person determined by
reference to income or profits of such person) for the period commencing on the
specified date through the end of the most recently completed fiscal year of
such
1999 CREDIT AGREEMENT
-2-
7
person (but without reduction for any net loss incurred for any completed fiscal
year during such period), taken as one accounting period, all as determined in
accordance with Generally Accepted Accounting Principles.
"Default" means any Event of Default, or any event or condition which
might become such an Event of Default with notice or lapse of time, or both.
"Dollars" and "$" means the lawful money of the United States of
America.
"EBIT" of any person means, for any period, the net income of such
person, determined before Interest Charges and taxes, including without
limitation the Michigan Single Business Tax, and in accordance with Generally
Accepted Accounting Principles.
"EBITDA" of any person means, as of any date, the Adjusted EBIT of such
person for the four fiscal quarter period ending on or immediately prior to such
date, determined before extraordinary gains and losses, depreciation, and
amortization and in accordance with Generally Accepted Accounting Principles.
"Effective Date" means the effective date specified in the final
paragraph of this Agreement.
"Environmental Laws" means all provisions of law, statute, ordinances,
rules, regulations, judgments, writs, injunctions, decrees, orders, awards and
standards promulgated by the government of the United States of America or any
foreign government or by any state, province, municipality or other political
subdivision thereof or therein or by any court, agency or instrumentality,
regulatory authority or commission of any of the foregoing concerning the
protection of, or regulating the discharge of substances into, the environment.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"ERISA Affiliate" means, with respect to any person, any trade or
business (whether or not incorporated) which, together with such person or any
Subsidiary of such person, would be treated as a single employer under Section
414 of the Code.
"Eurodollar Business Day" means, with respect to any Eurodollar Rate
Loan, a day which is both a Business Day and a day on which dealings in Dollar
deposits are carried out in the London interbank market.
"Eurodollar Interest Period" means, with respect to any Eurodollar Rate
Loan, the period commencing on the day such Eurodollar Rate Loan is made or
converted to a Eurodollar Rate Loan and ending on the date one, two, three, or
six months thereafter, as the Company may elect under Section 3.1 or 3.4, and
each subsequent period commencing on the last day of the immediately preceding
Interest Period and ending on the date one, two, three, or six months
thereafter, as the Company may elect under Section 3.1 or 3.4, provided,
however, that (a) any Eurodollar Interest Period which commences on the last
Eurodollar Business Day of a calendar month (or on any day for which there is no
numerically corresponding day in the appropriate subsequent calendar month)
shall end on the last Eurodollar Business Day of the appropriate subsequent
calendar month, (b) each Eurodollar Interest Period which would otherwise end on
a day which is not a Eurodollar Business Day shall end on the next succeeding
Eurodollar Business Day or, if such next
1999 CREDIT AGREEMENT
-3-
8
succeeding Eurodollar Business Day falls in the next succeeding calendar month,
on the next preceding Eurodollar Business Day, and (c) no Eurodollar Interest
Period which would end after the Termination Date shall be permitted, and
provided, further, that, during the thirty day period prior to the Reduction
Date, the Company may elect Eurodollar Interest Periods under Sections 3.1 and
3.4 of less than one month which end on or before the Reduction Date.
"Eurodollar Rate" means, with respect to any Eurodollar Rate Loan and
the related Eurodollar Interest Period, the per annum rate that is equal to the
sum of:
(a) the Applicable Margin plus
(b) the rate obtained by dividing (i) the per annum rate of interest at
which deposits in Dollars for such Eurodollar Interest Period in an aggregate
amount comparable to the amount of such Eurodollar Rate Loan to be made by the
Agent in its capacity as a Lender hereunder are offered to the Agent by other
prime banks in the London interbank market at approximately 11:00 a.m. London
time on the second Eurodollar Business Day prior to the first day of such
Eurodollar Interest Period by (ii) an amount equal to one minus the stated
maximum rate (expressed as a decimal) of all reserve requirements (including,
without limitation, any marginal, emergency, supplemental, special or other
reserves) that is specified on the first day of such Eurodollar Interest Period
by the Board of Governors of the Federal Reserve System (or any successor agency
thereto) for determining the maximum reserve requirement with respect to
eurocurrency funding (currently referred to as "Eurocurrency liabilities" in
Regulation D of such Board) maintained by a member bank of such System, all as
conclusively determined by the Agent.
"Eurodollar Rate Loan" means any Revolving Credit Loan which bears
interest at the Eurodollar Rate.
"Event of Default" means any of the events or conditions described in
Section 7.1.
"Extension Request" means an extension request duly executed by the
Company, substantially in the form of Exhibit C hereto.
"Federal Funds Rate" means, for any day, the average of the Overnight
Rates, as published by the Federal Reserve Bank of Chicago for such day, or, if
the Overnight Rates are not so published for any day, the average of the
quotations for the Overnight Rates received by the Agent from three Federal
funds brokers of recognized national standing selected by it.
"Fixed Asset" means, as of any date, any tangible asset of the Company
and the Subsidiaries (other than Current Assets of the Company and the
Subsidiaries) that is or should be classified as a fixed asset on a balance
sheet of the Company and the Subsidiaries in accordance with Generally Accepted
Accounting Principles.
"Funded Debt" of any person as of any date means the average principal
amount of the Consolidated Indebtedness of such person and its Subsidiaries of
the nature referred to in the definition of Indebtedness outstanding as of the
end of each of the four fiscal quarters of such person ending on or immediately
prior to such date, provided, however, that (a) Funded Debt as of any date prior
to the end of the first fiscal quarter for fiscal 2000 shall be measured only as
of the end of fiscal year 1999, (b) Funded Debt as of any date thereafter
1999 CREDIT AGREEMENT
-4-
9
but prior to the end of the second fiscal quarter of fiscal 2000 shall be the
average principal amount of the Consolidated Indebtedness outstanding as of the
end of fiscal year 1999 and the end of the first fiscal quarter of fiscal 2000,
and (c) Funded Debt as of any date thereafter but prior to the end of the third
fiscal quarter of fiscal 2000 shall be the average principal amount of the
Consolidated Indebtedness outstanding as of the end of fiscal year 1999 and the
end of the first two fiscal quarters of fiscal 2000, and, provided, further,
that the amount of deferred taxes referred to in subsection (i) of the
definition of Indebtedness shall be reduced by the amount of deferred taxes
carried as an asset, but shall not be less than zero.
"Generally Accepted Accounting Principles" means generally accepted
accounting principles applied on a basis consistent with that reflected in the
financial statements referred to in Section 5.10.
"Guarantors" means LPC and PSC, together with any Material Subsidiaries
existing after the Effective Date which have executed guaranty agreements
pursuant to Section 6.1(g).
"Guaranty" means the guaranty agreements of the Guarantors in form and
substance satisfactory to the Agent, entered into or confirmed by the Guarantors
for the benefit of the Agent and the Lenders pursuant to Section 3.2(f) or
6.1(g), as such guaranty agreements may be amended or modified from time to
time.
"Indebtedness" of any person means, as of any date, (a) all obligations
of such person for borrowed money, (b) all obligations which are secured by any
lien or encumbrance existing on property owned by such person whether or not the
obligation secured thereby shall have been assumed by such person, (c) all
obligations of such person as lessee under any lease which, in accordance with
Generally Accepted Accounting Principles, is or should be capitalized on the
books of the lessee, (d) the deferred purchase price for goods, property or
services acquired by such person, and all obligations of such person to purchase
goods, property or services where payment therefor is required regardless of
whether or not delivery of such goods or property or the performance of such
services is ever made or tendered, (e) all obligations of such person to advance
funds to, or to purchase property or services from, any other person in order to
maintain the financial condition of such person, (f) liabilities in respect of
unfunded vested benefits under any Plan of such person, (g) the face amount of
all letters of credit issued for the account of such person, (h) all obligations
of such person in respect of any interest rate or currency swap, rate cap or
other similar transaction (valued in an amount equal to the highest termination
payment, if any, that would be payable by such person upon termination for any
reason on the date of determination), (i) deferred taxes of such person, and (j)
all obligations of others similar in character to those described in clauses (a)
through (i) of this definition for which such person is liable, contingently or
otherwise, as obligor, guarantor or in any other capacity, or in respect of
which obligations such person assures a creditor against loss or agrees to take
any action to prevent any such loss (other than endorsements of negotiable
instruments for collection in the ordinary course of business).
"Interest Charges" of any person means for any period the sum of all
interest paid or payable during such period on Indebtedness of such person.
"Interest Coverage Ratio" means, for any period, the ratio of (a) the
Consolidated Adjusted EBIT of the Company and its Subsidiaries, to (b)
Consolidated Interest Charges of the Company and its Subsidiaries.
"Interest Payment Date" means (a) with respect to any Eurodollar Rate
Loan, the last day of each Interest Period with respect to such Loan and, in the
case of any Eurodollar Interest Period exceeding three
1999 CREDIT AGREEMENT
-5-
10
months, those days that occur during such Eurodollar Interest Period at
intervals of three months after the first day of such Eurodollar Interest
Period, and (b) with respect to any Prime Rate Loan and in all other cases, the
12th day of each January, April, July and October, commencing October 12, 1999.
As provided in Section 4.2(b), so long as no Default has occurred and is
continuing, interest payable on any Interest Payment Date with respect to any
Prime Rate Loan shall be for all interest accrued through the end of the
preceding month.
"Interest Period" means any Eurodollar Interest Period or Swing Line
Interest Period.
"Letter of Credit" means a standby letter of credit having a stated
expiry date not later than one year after the issuance thereof, and in any event
not later than 30 days prior to the Termination Date, issued by the Agent on
behalf of the Lenders for the account of the Company under an application and
related documentation acceptable to the Agent requiring, among other things,
immediate reimbursement by the Company to the Agent in respect of all drafts or
other demand for payment honored thereunder and all expenses paid or incurred by
the Agent relative thereto.
"Letter of Credit Advance" means the issuance of any Letter of Credit
under Section 3.1 made pursuant to Section 2.1 in which each Lender acquires a
pro-rata risk participation pursuant to Section 3.1(e).
"Letter of Credit Documents" is defined in Section 3.3.
"Leverage Ratio" means, at any date, the ratio of (i) Consolidated
Funded Debt to (ii) Consolidated EBITDA.
"Lien" means any pledge, assignment, mortgage, option, title retaining
contract, sale and leaseback transaction, lease which, in accordance with
Generally Accepted Accounting Principles, is or should be capitalized,
subordination of any claim or right, or any other type of lien, charge or
encumbrance, security interest or other claim or right.
"Loans" means as the context may require either the Revolving Credit
Loans, the Swing Line Loans, or all such types of Loans, collectively, and
"Loan" means either any Revolving Credit Loan or Swing Line Loan, as the context
may require.
"LPC" means X. Xxxxxxx Company, a Michigan corporation, which is a
wholly-owned subsidiary of the Company.
"Majority Lenders" means any three or more Lenders holding not less
than 51% of the aggregate principal amount of the Revolving Credit Loans then
outstanding (or 51% of the Commitments if no Revolving Credit Loans are then
outstanding).
"Management Group" means Xxxxxxx X. Xxxxxxxxx and other directors or
officers of the Company who individually own more than one percent (1%) of the
securities of the Company having ordinary voting power for the election of
directors.
1999 CREDIT AGREEMENT
-6-
11
"Material Subsidiary" means any Subsidiary of the Company which, in any
fiscal quarter, accounts for five percent or more of the gross revenues of the
Company and its Subsidiaries or whose total assets are equal to five percent or
more of the total assets of the Company and its Subsidiaries.
"Multiemployer Plan" means any "multiemployer" plan as defined in
Section 4001(a)(3) of ERISA or Section 414(f) of the Code.
"Net Worth" of any person means, as of any date, net worth determined
in accordance with Generally Accepted Accounting Principles.
"Notes" means, collectively, the Revolving Credit Notes and the Swing
Line Note.
"Overdue Rate" means (a) in respect of principal of Prime Rate Loans, a
rate per annum that is equal to the sum of three percent (3%) per annum plus the
Prime Rate, (b) in respect of principal of all other Loans than Prime Rate
Loans, a rate per annum that is equal to the sum of three percent (3%) per annum
plus the per annum rate in effect thereon until the end of the then-current
Interest Period for such Loan and, thereafter, a rate per annum that is equal to
the sum of three percent (3%) per annum plus the Prime Rate, and (c) in respect
of other amounts payable by the Company hereunder (other than interest), a per
annum rate that is equal to the sum of three percent (3%) per annum plus the
Prime Rate.
"Overnight Rates" means for any day, the rates on overnight Federal
funds transactions with members of the Federal Reserve System arranged by
Federal funds brokers.
"PBGC" means the Pension Benefit Guaranty Corporation and any entity
succeeding to any or all of its functions under ERISA.
"PSC" means Xxxxxxx Company of South Carolina, Inc., a Michigan
corporation, which is a wholly-owned subsidiary of the Company.
"Person" or "person" shall include an individual, a corporation, an
association, a partnership, a limited liability company, a trust or estate, a
joint stock company, an unincorporated organization, a joint venture, a
government (foreign or domestic), and any agency or political subdivision
thereof, or any other entity.
"Personal Care Division" means the personal care business of the
Company, which consists or consisted of the Company's operations and assets
formerly located in California, Michigan, Missouri, and Tennessee.
"Personal Care Division L/C" means one or more Letters of Credit issued
in favor of the purchaser (or an affiliate thereof) of the Personal Care
Division in the maximum face amount of $25,000,000 and expiring on or before
January 31, 2000.
"Plan" means, with respect to any person, any pension plan (other than
a Multiemployer Plan) subject to Title IV of ERISA or to the minimum funding
standards of Section 412 of the Code which has been established or maintained by
the Company, any Subsidiary of the Company or any ERISA Affiliate, or
1999 CREDIT AGREEMENT
-7-
12
by any other person if the Company, any Subsidiary of the Company or any ERISA
Affiliate could have liability with respect to such pension plan.
"Prime Rate" means the per annum rate that is equal to the greater of
(a) the per annum rate announced by the Agent from time to time as its "prime
rate", which may not be the lowest rate charged by the Agent to any of its
customers, or (b) the Federal Funds Rate plus one-half of one percent (1/2%) per
annum. The Prime Rate shall change simultaneously with any change in such "prime
rate" or such Federal Funds Rate, if applicable.
"Prime Rate Loan" means any Loan denominated in Dollars which bears
interest at the Prime Rate.
"Prior Credit Agreement" means the Credit Agreement dated as of June
30, 1996, among the Company, the lenders thereto, and the Agent, as amended.
"Pro Forma Interest Coverage Ratio" means, for any period, with respect
to any Acquisition of a Person by the Company, the ratio of (a) the Consolidated
Adjusted EBIT of the Company and its Subsidiaries plus the Consolidated EBIT of
the Person being acquired by the Company, to (b) the sum of Consolidated
Interest Charges of the Company and its Subsidiaries plus Consolidated Interest
Charges of the Person being acquired by the Company.
"Prohibited Transaction" means any transaction including any Plan which
is proscribed by Section 406 of ERISA or Section 4975 of the Code.
"Reduction Date" means the earlier to occur of (a) January 31, 2000,
and (b) the date the Personal Care Division L/C expires or is terminated.
"Related Business" means any business substantially similar to the
business of the Company and any business that supplies or is supplied by the
Company (including generic prescription drug manufacturers).
"Reportable Event" means a reportable event as described in Section
4043(b) of ERISA including those events as to which the thirty (30) day notice
period is waived under Part 2615 of the regulations promulgated by the PBGC
under ERISA.
"Revolving Credit Loan" means any borrowing under Section 2.1(a)
evidenced by the Revolving Credit Notes. Any Revolving Credit Loan or portion
thereof may also be denominated as a Prime Rate Loan or a Eurodollar Rate Loan,
as appropriate, and such Prime Rate Loans and Eurodollar Rate Loans are referred
to herein as "types" of Revolving Credit Loans.
"Revolving Credit Notes" means the promissory notes of the Company
issued to the Lenders evidencing the Revolving Credit Loans, in substantially
the form annexed hereto as Exhibit A, as amended or modified from time to time
and together with any promissory note or notes issued in exchange or replacement
therefor.
"Solvency Certificate" means a certificate of the chief executive
officer and the treasurer of the Company in form and substance satisfactory to
the Agent and the Lenders certifying as to the matters set forth in Section
5.11.
1999 CREDIT AGREEMENT
-8-
13
"Solvent" means, with respect to any person, that, as of any date of
determination, (a) the then fair saleable value of the property of such person
is (i) greater than the total amount of liabilities (including contingent
liabilities) of such person and (ii) greater than the amounts that would be
required to pay such person's probable liability on such person's then existing
debts as they become absolute and matured, (b) such person's property is not
unreasonably small in relation to its business or any contemplated or undertaken
transaction, and (c) such person does not intend to incur, or believe or
reasonably should have believed that it will incur, debts beyond its ability to
pay such debts as they become due.
"Subsidiaries" means all Persons (whether now existing or hereafter
organized or acquired) in which at least a majority of the securities (other
than directors' qualifying shares required by law) of each class having ordinary
voting power for the election of directors (other than securities having such
power only by reason of the happening of a contingency), at the time as of which
any determination is being made, is owned, beneficially and of record, by the
Company and/or by one or more of the other Subsidiaries.
"Swing Line Facility" means the facility under which the Agent may make
Swing Line Loans to the Company pursuant to Section 2.1(b).
"Swing Line Interest Period" means, with respect to any Swing Line
Loan, the period commencing on the day the Swing Line Loan is made and ending on
the date agreed upon between the Company and the Agent at the time the Swing
Line Loan is made. No Swing Line Interest Period longer than thirty days or
which would end after the Termination Date will be permitted.
"Swing Line Loan" means any borrowing under Section 2.1(b) evidenced by
the Swing Line Note.
"Swing Line Note" means the promissory note of the Company payable to
the order of the Agent, in substantially the form of Exhibit B, as amended or
modified from time to time, and any promissory note or notes issued in exchange
or replacement therefor.
"Swing Line Rate" means, with respect to any Swing Line Loan, the rate
per annum agreed upon between the Company and the Agent at the time the Swing
Line Loan is made.
"Termination Date" means the earlier to occur of (a) June 30, 2004, or
(b) the date on which the Credit shall be terminated pursuant to Section 2.4 or
7.2.
"Year 2000 Issues" means anticipated costs, problems, and uncertainties
associated with the inability of certain computer applications to effectively
handle data, including dates prior to, on, and after January 1, 2000, as such
inability affects the business, operations, and financial condition of the
Company and its Subsidiaries.
"Year 2000 Program" is defined in Section 5.15.
1.2 Other Definitions; Rules of Construction. As used herein, the terms
"Lenders", "Lender", "Agent", "Company" and "this Agreement" shall have the
respective meanings ascribed thereto in the introductory paragraph of this
Agreement. Such terms, together with the other terms defined in Section 1.1,
shall include both the singular and the plural forms thereof and be construed
accordingly. Any financial
1999 CREDIT AGREEMENT
-9-
14
terms used but not defined herein shall be interpreted in accordance with
Generally Accepted Accounting Principles. References to "Sections" and
"subsections" shall be to Sections and subsections, respectively, of this
Agreement unless otherwise specifically provided.
ARTICLE II. THE COMMITMENT AND THE ADVANCES
2.1 Commitments of the Lenders.
(a) Revolving Credit Loans and Letter of Credit Advances. (i) Each
Lender agrees, for itself only, subject to the specific limitations set forth in
this Section 2.1(a) and to the other terms of this Agreement, to make Revolving
Credit Loans to the Company pursuant to Section 3.1 and to participate in Letter
of Credit Advances to the Company pursuant to Section 3.1, from time to time
from the Effective Date until the Reduction Date, not to exceed in aggregate
principal amount at any time outstanding the amount set forth opposite its name
below as its Commitment:
NAME OF LENDER COMMITMENT
-------------- ----------
Bank One $65,000,000
Comerica Bank $35,000,000
Old Kent Bank $35,000,000
Xxxxxx Trust and Savings Bank $25,000,000
National City Bank $25,000,000
Northern Trust Bank $15,000,000
-----------
Aggregate Commitments $200,000,000
============
(ii) Each Lender agrees, for itself only, subject to the
specific limitations set forth in this Section 2.1(a) and to the other terms of
this Agreement, to make Revolving Credit Loans to the Company pursuant to
Section 3.1 and to participate in Letter of Credit Advances to the Company
pursuant to Section 3.1, from time to time from the Reduction Date until the
Termination Date, not to exceed in aggregate principal amount at any time
outstanding the amount set forth opposite its name below as its Commitment:
NAME OF LENDER COMMITMENT
-------------- ----------
Bank One $40,000,000
Comerica Bank $35,000,000
Old Kent Bank $35,000,000
Xxxxxx Trust and Savings Bank $25,000,000
National City Bank $25,000,000
Northern Trust Bank $15,000,000
-----------
Aggregate Commitments $175,000,000
============
(iii) The aggregate principal amount of all Letter of Credit
Advances (being the maximum amount available to be drawn under the related
Letters of Credit plus the amount of any draws under such
1999 CREDIT AGREEMENT
-10-
15
Letters of Credit that have not been reimbursed) at any time outstanding shall
not exceed $35,000,000 prior to the Reduction Date, and shall not exceed
$10,000,000 thereafter. Notwithstanding anything in this Agreement to the
contrary, the aggregate principal amount of all Loans and Letter of Credit
Advances shall not at any time exceed the aggregate Commitments then in effect.
(b) Swing Line Loans. The Company may request the Agent to make, and
the Agent may, in its sole discretion, make Swing Line Loans to the Company from
time to time on any Business Day (but limited to one such Loan per Business Day)
during the period from the Effective Date until the Termination Date in the
principal amount not to exceed at any time outstanding the lesser of (i)
$20,000,000 and (ii) the aggregate of the unused portion of the Commitments of
all Lenders as of such date. The Company may at any time request a Revolving
Credit Loan to repay any Swing Line Loan. Forthwith upon demand by the Agent,
the Company shall request a Revolving Credit Loan hereunder (and if the Company
does not do so, the Agent shall be entitled to do so on behalf of the Company)
to repay all or any Swing Line Loans (provided that such Swing Line Loan was not
made in violation of any term or provision of this Agreement and that the Agent
did not have any actual knowledge of an Event of Default at the time of the
making of such Swing Line Loan) and the Lenders shall be obligated, absolutely
and unconditionally, to make such Revolving Credit Loan, and the obligation
shall not be affected by any circumstance whatsoever, including, without
limitation, (i) any setoff, counterclaim, recoupment, defense or other right
which such Lender or the Company may have against the Agent, the Company or
anyone else for any reason whatsoever, (ii) the occurrence of any Default, (iii)
any adverse change in the condition (financial or otherwise) of the Company or
any of its Subsidiaries, (iv) any breach of this Agreement by the Company, any
of its Subsidiaries or any Lender, or (v) any other circumstance, happening or
event whatsoever, whether or not similar to any of the foregoing, including
without limitation any limitation on the Commitments, or any failure to satisfy
any conditions contained in Sections 3.2, 3.3, or any other provision of this
Agreement. Each Swing Line Loan shall be for a term not exceeding thirty days
and shall bear interest at the Swing Line Rate. Within the limits of the Swing
Line Facility, so long as the Agent, in its sole discretion, elects to make
Swing Line Loans, the Company may borrow and reborrow under this Section 2.1(b).
2.2 [Reserved.]
2.3 Effect on Commitments. Notwithstanding anything in this Agreement
to the contrary, the sum of the aggregate principal amount of all Revolving
Credit Loans plus all Swing Line Loans and all Letter of Credit Advances (being
the maximum amount available to be drawn under the related Letters of Credit
plus the amount of any draws under Letters of Credit that have not been
reimbursed) shall not at any time exceed the aggregate amount of the Commitments
of all Lenders.
2.4 Termination and Reduction of the Commitments. (a) The Company shall
have the right to terminate or reduce the Commitments at any time and from time
to time, in which case the Commitments of the Lenders shall be terminated or
permanently reduced by the amount so specified (the reduction of each Lender's
Commitment being on a pro rata basis in accordance with the respective amounts
of the Commitments), as the case may be; provided that (i) the Company shall
give notice of such termination or reduction to the Agent at least three
Business Days in advance thereof, specifying the amount and effective date
thereof, (ii) each partial reduction of the Commitments shall be in a minimum
amount of $10,000,000 and in an integral multiple of $1,000,000, (iii) no such
termination or reduction shall be permitted with respect to any portion of the
Commitments as to which a request for a Loan or Letter of Credit Advance
pursuant to Section 3.1 is then pending, and (iv) the Commitments may not be
completely terminated if any
1999 CREDIT AGREEMENT
-11-
16
Loans or Letter of Credit Advances are then outstanding and may not be reduced
below the principal amount of the aggregate Loans and Letter of Credit Advances
then outstanding. The Credit or any portion thereof so terminated or reduced
pursuant to this Section 2.4 may not be reinstated.
(b) For purpose of this Agreement, a Letter of Credit Advance (i) shall
be deemed outstanding in an amount equal to the sum of the maximum amount
available to be drawn under the related Letter of Credit on or after the date of
determination and on or before the stated expiry date thereof plus the amount of
any draws under such Letter of Credit that have not been reimbursed as provided
in Section 4.3, and (ii) shall be deemed outstanding at all times on and before
such stated expiry date or such earlier date on which all amounts available to
be drawn under such Letter of Credit have been fully drawn, and thereafter until
all related reimbursement obligations have been paid pursuant to Section 4.3. As
provided in Section 4.3, upon each payment made by the Agent in respect of any
draft or other demand for payment under any Letter of Credit, the amount of any
Letter of Credit Advance outstanding immediately prior to such payment shall be
automatically reduced by the amount of each Revolving Credit Loan deemed
advanced in respect of the related reimbursement obligation of the Company.
2.5 Facility Fee. The Company agrees to pay to the Agent for the pro
rata benefit of the Lenders a facility fee on the daily average amount of the
Commitments, for the period from the Effective Date to but excluding the
Termination Date, at the Applicable Margin. Accrued facility fees shall be
payable, in arrears, on the 12th day of each January, April, July and October
occurring after the date hereof, commencing October 12, 1999, which payment then
due shall be for all facility fees accrued through the end of the preceding
month, and on the Termination Date, which payment then due shall be for all
facility fees accrued through the Termination Date.
2.6 Letter of Credit Fees. The Company agrees to pay to the Agent for
the pro rata benefit of the Lenders a fee computed at a per annum rate equal to
the then-Applicable Margin of the maximum amount available to be drawn from time
to time under such Letter of Credit for the period from and including the date
of issuance of such Letter of Credit to and including the stated expiry date of
such Letter of Credit, which fees shall be paid in advance. If any Letter of
Credit does not remain outstanding through its stated expiry date, the Lenders
shall promptly refund the unused portion of the fee to the Company or credit the
Company's account for such portion.
(b) The Company also agrees to pay a fronting fee to the Agent for its
own account computed at the rate of one-eighth of one percent (.125%) per annum
of such maximum amount for such period, to be payable at such times as agreed
upon between the Company and the Agent. The fronting fee is nonrefundable and
the Company shall not be entitled to any rebate of any portion thereof if such
Letter of Credit does not remain outstanding through its stated expiry date or
for any other reason.
(c) The Company further agrees to pay to the Agent, on demand, such
other customary administrative fees, charges and expenses of the Agent in
respect of the issuance, negotiation, acceptance, amendment, transfer and
payment of such Letter of Credit or otherwise payable pursuant to the
application and related documentation under which such Letter of Credit is
issued.
2.7 Agency Fee. The Company agrees to pay to the Agent an agency fee
for its services as Agent under this Agreement in such amounts as may from time
to time be agreed upon by the Company and the Agent.
1999 CREDIT AGREEMENT
-12-
17
2.8 Extension of Termination Date. The Termination Date and the
obligation pursuant to Section 4.1(a) to make mandatory repayment of the
outstanding principal amount of the Loans on the Termination Date shall be
subject to extension as set forth in this Section 2.8.
(a) Request for Extension of Termination Date. Notwithstanding anything
contained in this Agreement to the contrary, not later than June 30, 2000, and
each June 30th thereafter, the Company may, by delivery of a duly completed
Extension Request to the Agent accompanied by the audited financial statements
required by Section 6.1(d)(iii), irrevocably request that each Lender extend the
Termination Date relating to such Lender's Commitment for a single one-year
period for each Extension Request.
(b) Consent to Extension of Termination Date.
(i) The Agent shall, promptly after receiving any such
Extension Request pursuant to subsection (a) above,
notify each Lender by providing them a copy of the
Extension Request.
(ii) Each Lender shall, within 30 days of receiving the
Extension Notice, notify the Agent whether it consents
to the Company's request set forth in such Extension
Request, such consent to be in the sole discretion of
such Lender. Each Lender acknowledges and agrees that
its consent to the Company's request to extend the
Termination Date shall also be deemed to be a consent
by such Lender to an extension of its obligations to
participate pursuant to Section 3.1(e) in the Letter of
Credit Advances. If any Lender does not so notify the
Agent of its decision within such 30 day period, such
Lender shall be deemed not to have consented to such
requests of the Company.
(iii) The Agent shall promptly notify the Company whether the
Lenders have consented to such request. If the Agent
does not so notify the Company by August 15, 2000, and
each August 15th thereafter, the Agent shall be deemed
to have notified the Company that the Lenders have not
consented to the Company's request.
(iv) Each Lender that elects not to extend the Termination
Date or fails to so notify the Agent of such consent (a
"Non-Consenting Lender") hereby agrees that if any
other Lender or financial institution acceptable to the
Company and the Agent offers to purchase such
Non-Consenting Lender's Commitment for a purchase price
equal to the sum of all amounts then owing with respect
to the Loans and all other amounts accrued for the
account of such Non-Consenting Lender, such
Non-Consenting Lender will promptly assign, sell and
transfer all of its right, title, interest and
obligations with respect to the foregoing to such other
Lender or financial institution pursuant to and on the
terms specified in the form of an Assignment and
Acceptance.
(v) The Loans of any Non-Consenting Lender that are not
purchased pursuant to clause (iv) above will mature and
be due and payable on the then-scheduled Termination
Date and the Commitment of such Non-Consenting Lender
will thereupon terminate. On such Termination Date, the
aggregate Commitments will be automatically reduced by
an amount equal to such Non-Consenting Lenders'
Commitment.
1999 CREDIT AGREEMENT
-13-
18
(vi) The pro rata share of the remaining Lenders which have
consented to an extension of their Commitment hereunder
shall be adjusted accordingly by the Agent, based on
such Lenders' pro rata share of the remaining
Commitments as it may be adjusted pursuant to clause
(iv) above or otherwise.
ARTICLE III. THE LOANS AND LETTERS OF CREDIT
3.1 Disbursing Loans and Letter of Credit Advances. (a) The Company
shall give the Agent notice of each requested Revolving Credit Loan, Swing Line
Loan or Letter of Credit Advance in the form of Exhibit D hereto not later than
(i) 1:30 p.m. Detroit time three Eurodollar Business Days prior to the date of
any requested Revolving Credit Loan if such Loan is to be made as a Eurodollar
Rate Loan, (ii) 1:30 p.m. Detroit time one Business Day prior to the date of any
requested Revolving Credit Loan if such Loan is to be made as a Prime Rate Loan,
(iii) 1:00 p.m. on the day any requested Swing Line Loan is to be made and (iv)
five Business Days prior to the date any Letter of Credit Advance is requested
to be made. Such notice shall specify whether a Eurodollar Rate Loan, Prime Rate
Loan, Swing Line Loan, or a Letter of Credit Advance is requested and, in the
case of each requested Eurodollar Rate Loan and Swing Line Loan, the Interest
Period to be initially applicable to such Loan and, in the case of each Letter
of Credit, such information as may be necessary for the issuance thereof by the
Agent. The Agent shall provide notice of such requested Revolving Credit Loan or
Letter of Credit Advance to each Lender no later than 3:00 p.m. Detroit time on
the day such notice is received. Subject to the terms of this Agreement, the
proceeds of such requested Revolving Credit Loan or Swing Line Loan shall be
made available to the Company by depositing the proceeds thereof, in immediately
available funds, in an account maintained and designated by the Company with the
Agent. Subject to the terms of this Agreement, the Agent shall, on the date any
Letter of Credit Advance is requested to be made, issue the related Letter of
Credit on behalf of the Lenders for the account of the Company. Notwithstanding
anything herein to the contrary, the Agent may decline to issue any requested
Letter of Credit on the basis that the beneficiary, the purpose of issuance or
the conditions of drawing are unacceptable to it in its discretion.
(b) Each Lender, on the date each Revolving Credit Loan is requested to
be made, shall make its pro rata share of such Revolving Credit Loan available
in immediately available funds at the principal office of the Agent for
disbursement to the Company or reimbursement of the Agent, as the case may be.
Unless the Agent shall have received notice from any Lender prior to the date
any Revolving Credit Loan is requested to be made under this Section 3.1 that
such Lender will not make available to the Agent such Lender's pro rata portion
of such Revolving Credit Loan, the Agent may assume that such Lender has made
such portion available to the Agent on the date such Loan is requested to be
made in accordance with this Section 3.1. If and to the extent such Lender shall
not have so made such pro rata portion available to the Agent, the Agent may
(but shall not be obligated to) make such amount available to the Company, and
such Lender and the Company severally agree to pay to the Agent forthwith on
demand such amount together with interest thereon for each day from the date
such amount is made available to the Company by the Agent until the date such
amount is repaid to the Agent at a rate per annum equal to the interest rate
applicable to such Loan during such period. If such Lender shall pay such amount
to the Agent together with interest, such amount so paid shall constitute a loan
by such Lender as a part of such Revolving Credit Loan for the purposes of this
Agreement. The failure of any Lender to make its pro rata portion of any such
Loan available to the Agent shall not relieve any other Lender of its
obligations to make available its pro rata
1999 CREDIT AGREEMENT
-14-
19
portion of such Revolving Credit Loan on the date required under this Section
3.1, but no Lender shall be responsible for the failure of any other Lender to
make such pro rata portion available to the Agent on the date required under
this Section 3.1.
(c) All Revolving Credit Loans made under this Section 3.1 shall be
evidenced by the Revolving Credit Notes and each Revolving Credit Loan shall be
made by the Lenders pro rata in accordance with their Commitments. All Loans
shall be due and payable and bear interest as provided in Article IV. Each
Lender is authorized by the Company to note on the schedule attached to its
Revolving Credit Notes or otherwise on its books and records the date, amount
and type of each Loan, the related Interest Period (if applicable), the amount
of each payment or prepayment of principal thereon, and the other information
provided for on such schedule, which schedule or books and records shall
constitute prima facie evidence of the information so noted, provided that
failure of any Lender to make any such notation, or any error in any such
notation, shall not relieve the Company of its obligation to repay the
outstanding principal amount of the Revolving Credit Loans, all accrued interest
thereon and other amounts payable with respect thereto in accordance with the
terms of the Revolving Credit Notes and this Agreement. Subject to the terms of
this Agreement, the Company may borrow, prepay pursuant to Section 4.1, and
reborrow Revolving Credit Loans, under this Section 3.1.
(d) Nothing in this Agreement shall be construed to require or
authorize any Lender to issue any Letter of Credit, it being recognized that the
Agent has the sole obligation under this Agreement to issue Letters of Credit on
behalf of the Lenders and the Revolving Credit Commitment of each Lender with
respect to Letter of Credit Advances are expressly conditioned upon the Agent's
performing such obligations. Upon such issuance by the Agent, each Lender shall
automatically acquire a pro rata risk participation interest in such Letter of
Credit Advance based on its respective Revolving Credit Commitment. If the Agent
shall honor a draft or other demand for payment presented or made under any
Letter of Credit, the Agent shall provide notice thereof to each Lender on the
date such draft or demand is honored unless the Company shall have satisfied its
reimbursement obligation under Section 4.3 by payment to the Agent on such date.
Each Lender, on such date, shall make its pro rata share of the amount paid by
the Agent and not reimbursed by the Company available in immediately available
funds at the principal office of the Agent for the account of the Agent. If and
to the extent such Lender shall not have made such pro rata portion available to
the Agent, such Lender and the Company severally agree to pay to the Agent
forthwith on demand such amount together with interest thereon, for each day
from the date such amount was paid by the Agent until such amount is so made
available to the Agent at a per annum rate equal to the interest rate applicable
during such period to the related Loan disbursed under Section 4.3 in respect of
the reimbursement obligation of the Company. If such Lender shall pay such
amount to the Agent together with such interest, such amount so paid shall
constitute a Revolving Credit Loan by such Lender disbursed in respect of the
reimbursement obligation of the Company under Section 4.3 for purposes of this
Agreement. The failure of any Lender to make its pro rata portion of any such
amount paid by the Agent available to the Agent shall not relieve any other
Lender of its obligation to make available its pro rata portion of such amount,
but no Lender shall be responsible for failure of any other Lender to make such
pro rata portion available to the Agent.
3.2 Conditions for Disbursing Initial Loans or Letter of Credit
Advances. The obligation of the Lenders to make the initial Loan or of the Agent
to issue the initial Letter of Credit hereunder is subject to receipt by the
Agent of the following documents, in form and substance satisfactory to the
Agent:
1999 CREDIT AGREEMENT
-15-
20
(a) Charter Documents. Copies of all charter documents of each of the
Company and the Guarantors on file in their respective states of incorporation,
certified as of a recent date by the appropriate authority or official of such
states and certified as true and correct as of the Effective Date by a duly
authorized officer of each of the Company and the Guarantors;
(b) Bylaws and Corporate Authorizations. Copies of the respective
by-laws of each of the Company and the Guarantors, together with all authorizing
resolutions and evidence of other corporate action taken by the Company and the
Guarantors to authorize the execution, delivery and performance by the Company
of this Agreement and the Notes and by each of the Guarantors of the Guaranty to
which it is a party, and the consummation by each of them of the transactions
contemplated hereby, each certified as true and correct as of the Effective Date
by a duly authorized officer of each of the Company and the Guarantors;
(c) Incumbency Certificate. Certificates of incumbency of each of the
Company and the Guarantors containing and attesting to the genuineness of the
signatures of those officers authorized to act on behalf of the Company in
connection with the Agreement and the Notes and of each of the Guarantors in
connection with the Guaranty and the consummation by each of them of the
transactions contemplated hereby, certified as true and correct as of the
Effective Date by a duly authorized officer of each of the Company and the
Guarantors;
(d) Good Standing Certificates. Certificates of recent dates of (i) the
Director of the Department of Consumer and Industry Services of the State of
Michigan certifying as to good standing and corporate existence of each of the
Company, LPC and PSC in the State of Michigan; and (ii) the appropriate
governmental official certifying as to the good standing of each of the Company
and each Guarantor in each additional jurisdiction in which such person should
be qualified to do business, except where the failure to be so qualified would
have a material adverse effect on the properties, business, operations, or
condition, financial or otherwise, of the Company or such Guarantor;
(e) Notes. The Notes, appropriately completed for each Lender and duly
executed on behalf of the Company;
(f) Guaranty. A fully executed guaranty or confirmation of guaranty
whereby the Guarantors guarantee all obligations of the Company to the Lenders
and the Agent under this Agreement and the Notes;
(g) Legal Opinion. The favorable written opinion of Law, Xxxxxxxx &
Xxxxxxxxxx, counsel for the Company and the Guarantors, relating to those
matters referenced in Sections 5.1, 5.2, 5.3, 5.5 and 5.7 of this Agreement and
paragraphs 5(a) and (b) of the Guaranty, in form and substance satisfactory to
the Lenders and as to such other matters as the Lenders may reasonably request;
(h) Solvency Certificate. The Solvency Certificate, in form, and
substance satisfactory to the Agent, executed by the chief executive officer and
the treasurer of the Company, together with balance sheets as of June 30, 1998,
of the Company and each of LPC and PSC, and of the Company and its Subsidiaries
on a consolidated basis;
(i) Payment of Indebtedness Under Prior Credit Agreement. Payment in
full (which payment shall be made simultaneously with the first Loans made under
this Agreement) of the outstanding principal balance and all interest accrued
through the Effective Date on the loans and all fees accrued under the Prior
1999 CREDIT AGREEMENT
-16-
21
Credit Agreement, and it is acknowledged and agreed that the Commitments replace
all commitments to lend under the Prior Credit Agreement, all of which
commitments to lend under the Prior Credit Agreement shall be terminated
simultaneously upon this Agreement being executed;
(j) Sale of Personal Care Division. The Company shall have sold the
Personal Care Division and shall have received minimum net cash proceeds of
$30,000,000; and
(k) Additional Documents. Such additional agreements and documents,
fully executed by the Company and its Subsidiaries, requested by the Agent as
the Agent may consider to be necessary or desirable to implement or further the
provisions and intent of this Agreement.
3.3 Further Conditions for Disbursing Loans or Letter of Credit
Advances. No Lender shall be obligated to make any Loan and the Agent shall not
be obligated to issue any Letter of Credit (including the initial Loan or Letter
of Credit) unless (a) no Default exists or shall have occurred and be continuing
on the date such Loan or Letter of Credit Advance is made, and the
representations and warranties set forth in Article V are true and correct as of
the date such Loan or Letter of Credit Advance is made with the same effect as
if made on such date and (b) in the case of any Letter of Credit Advance, the
Company shall have delivered to the Agent an application for the related Letter
of Credit and other related documentation requested by and acceptable to the
Agent appropriately completed and duly executed on behalf of the Company. The
Company shall be deemed to have made a certification to the Lenders at the time
of the making of each Loan or Letter of Credit Advance to the effect set forth
in this Section 3.3. For purposes of this Section 3.3, the representations and
warranties contained in Section 5.10 shall be deemed made with respect to both
the financial statements referred to therein and the most recent financial
statements delivered pursuant to Section 6.1(d)(ii) and (iii).
3.4 Subsequent Elections as to Revolving Credit Loans. The Company may
elect (a) to continue a Eurodollar Rate Loan or a portion thereof, as a
Eurodollar Rate Loan of the then-existing type, or (b) to convert a Eurodollar
Rate Loan of one type, or a portion thereof, to a Loan of another type, or (c)
to convert a Prime Rate Loan, or a portion thereof, to a Eurodollar Rate Loan,
in each case by giving notice thereof to the Agent in substantially the form of
Exhibit E hereto not later than 1:30 p.m. Detroit time three Eurodollar Business
Days prior to the date any such continuation of or conversion to a Eurodollar
Rate Loan is to be effective and not later than 1:30 p.m. Detroit time one day
prior to the date any such continuation or conversion is to be effective in all
other cases; provided that an outstanding Eurodollar Rate Loan may only be
converted on the last day of the then-current Interest Period with respect to
such Loan, and provided, further, if a continuation of a Revolving Credit Loan
as, or a conversion of a Revolving Credit Loan to, a Eurodollar Rate Loan is
requested, such notice shall also specify the Interest Period to be applicable
thereto upon such continuation or conversion. The Agent, no later than 3:00 p.m.
Detroit time on the day such notice is received, shall provide notice of such
election to the Lenders and provided, further, that a Revolving Credit Loan may
not be converted to a Swing Line Loan. If the Company shall not timely deliver
such a notice with respect to any outstanding Eurodollar Rate Loan, the Company
shall be deemed to have elected to convert such Eurodollar Rate Loan to a Prime
Rate Loan on the last day of the then-current Interest Period with respect to
such Eurodollar Rate Loan.
1999 CREDIT AGREEMENT
-17-
22
3.5 Limitation of Requests and Elections. Notwithstanding any other
provision of this Agreement to the contrary, if, upon receiving a request for a
Eurodollar Rate Loan pursuant to Section 3.1, or a request for a continuation or
conversion of a Eurodollar Rate Loan, or a portion thereof, as a Eurodollar Rate
Loan, or a request for a conversion of a Prime Rate Loan, or a portion thereof,
to a Eurodollar Rate Loan pursuant to Section 3.4, (a) in the case of any
Eurodollar Rate Loan, deposits in Dollars for periods comparable to the Interest
Period elected by the Company are not available to any Lender in the London
interbank market, or (b) the Eurodollar Rate will not adequately and fairly
reflect the cost to any Lender of making, funding, or maintaining the related
Eurodollar Rate Loan, or (c) by reason of national or international financial,
political, or economic conditions or by reason of any applicable law, treaty,
rule or regulation (whether domestic or foreign) now or hereafter in effect, or
the interpretation or administration thereof by any governmental authority
charged with the interpretation or administration thereof, or compliance by any
Lender with any guideline, request or directive of such authority (whether or
not having the force of law), including without limitation exchange controls, it
is impracticable, unlawful or impossible for any Lender (i) to make or fund the
relevant Eurodollar Rate Loan, or (ii) to continue or convert such Eurodollar
Rate Loan, or a portion thereof, as a Eurodollar Rate Loan, or (iii) to convert
a Prime Rate Loan, or a portion thereof, to a Eurodollar Rate Loan, then the
Company shall not be entitled, so long as such circumstances continue, to
request a Loan of the affected type pursuant to Section 3.1 or a continuation of
or conversion to a Loan of the affected type pursuant to Section 3.4. In the
event that such circumstances no longer exist, the Lenders shall again consider
requests for Loans of the affected type pursuant to Section 3.1, and requests
for continuations of and conversions to Loans of the affected type pursuant to
Section 3.4.
3.6 Minimum Amounts. Except for (a) Revolving Credit Loans and
conversions which exhaust the entire remaining amount of the Credit and (b)
conversions or payments required pursuant to Article IX, each Eurodollar Rate
Loan shall be in a minimum amount of $5,000,000 and in integral multiples of
$1,000,000 and each Prime Rate Loan shall be in a minimum amount and in integral
multiples of $1,000,000. The aggregate number of Eurodollar Rate Loans
outstanding at any one time under this Agreement may not exceed six. Except for
Swingline Loans which exhaust the entire remaining amount of the Credit, each
Swingline Loan shall be in a minimum amount of $1,000,000 and in integral
multiples of $100,000.
ARTICLE IV. PAYMENTS AND PREPAYMENTS OF LOANS
4.1 Principal Payments.
(a) Unless earlier payment is required under this Agreement, the
Company shall pay to the Agent for the account of the Lenders (i) on the
Termination Date, the outstanding principal amount of all Revolving Credit Loans
and (ii) on the stated maturity date, the outstanding principal amount of all
Swing Line Loans but in no event shall such date be later than the Termination
Date.
(b) The Company may at any time and from time to time prepay all or any
portion of the Loans without premium or penalty upon notifying the Agent at
least one Business Day prior to the date of any proposed prepayment, provided
that (i) the Company may not prepay any portion of any Revolving Credit Loan as
to which an election for continuation as or conversion to a Eurodollar Rate Loan
is pending pursuant to Section 3.1 or 3.4, (ii) unless earlier payment is
required under this Agreement, any Eurodollar Rate Loan may only be paid on the
last day of the then-current Interest Period with respect to such Loan and no
prepayments thereof are allowed, (iii) each such prepayment of any Revolving
Credit Loan shall be in a
1999 CREDIT AGREEMENT
-18-
23
minimum amount and in integral multiples of $1,000,000, and (iv) each such
prepayment of any Swingline Loan shall be in a minimum amount and in integral
multiples of $100,000.
(c) If at any time the aggregate principal amounts outstanding under
the Loans and Letters of Credit exceed the Commitments, the Company shall
immediately pay to the Agent for the account of the Lenders an amount not less
than the amount of such excess, to be applied first to the amounts outstanding
under the Revolving Credit Loans, then to the amounts outstanding under the
remaining Loans, and the remainder, if any, to be held by the Agent on behalf of
the Lenders as cash collateral securing any reimbursement obligations which may
arise under the outstanding Letters of Credit, if any; the Company grants to the
Agent for the benefit of the Lenders a first-priority lien and security interest
in this cash collateral, and all cash collateral shall be in the Agent's sole
and exclusive control.
(d) If, at any time before the Reduction Date, the aggregate face
amount of the Letters of Credit exceeds the lesser of $35,000,000 and the
Commitment, or if, at any time on or after the Reduction Date, the aggregate
face amount of the Letters of Credit exceeds the lesser of $10,000,000 and the
Commitment, the Company shall immediately pay to the Agent for the account of
the Lenders an amount not less than the amount of such excess, to be applied
first to the amounts outstanding under the Revolving Credit Loans, and the
remainder, if any, to be held by the Agent on behalf of the Lenders as cash
collateral securing any reimbursement obligations which may arise under the
outstanding Letters of Credit, if any.
4.2 Interest Payments. (a) The Company shall pay interest to the Agent
for the account of the Lenders on the unpaid principal amount of each Loan for
the period commencing on the date such Loan is made until such Loan is paid in
full, on each Interest Payment Date and on the Termination Date, and thereafter
on demand, at the following rates per annum:
(i) During such periods that such Loan is a Prime Rate
Loan, the Prime Rate;
(ii) During such periods that such Loan is a Eurodollar Rate
Loan, the Eurodollar Rate applicable to such Loan for
the related Interest Period;
(iii) During such periods that such Loan is a Swing Line
Loan, the Swing Line Rate applicable to such Loan for
each related Swing Line Interest Period; and
(iv) Notwithstanding the foregoing paragraphs (i) through
(iii), the Company agrees to pay interest on demand at
the Overdue Rate on the outstanding principal amount of
any Loan and any other amount payable by the Company
hereunder (other than interest) which is not paid in
full within five Business Days from the due date
thereof (whether at stated maturity, by acceleration or
otherwise) for the period commencing on the sixth day
after the due date thereof until the same is paid in
full.
(b) So long as no Default has occurred and is continuing, interest
payable on any Interest Payment Date on any of the Prime Rate Loans shall be for
interest accrued on the Loans through the end of the preceding month.
4.3 Letter of Credit Reimbursement Payments. (a) The Company agrees to
pay to the Agent, on the day on which the Agent shall honor a draft or other
demand for payment presented or made under any
1999 CREDIT AGREEMENT
-19-
24
Letter of Credit, an amount equal to the amount paid by the Agent in respect of
such draft or other demand under such Letter of Credit and all expenses paid or
incurred by the Agent relative thereto. Unless the Company shall have made such
payment to the Agent on such day, upon each such payment by the Agent, the Agent
shall be deemed to have disbursed to the Company, and the Company shall be
deemed to have elected to satisfy its reimbursement obligation by, a Revolving
Credit Loan bearing interest at the Prime Rate for the account of the Lenders in
an amount equal to the amount so paid by the Agent in respect of such draft or
other demand under such Letter of Credit. Such Revolving Credit Loan shall be
disbursed notwithstanding any failure to satisfy any conditions for disbursement
of any Loan set forth in Article III and, to the extent of the Revolving Credit
Loan so disbursed, the reimbursement obligation of the Company under this
Section 4.3 shall be deemed satisfied without, however, constituting any waiver
by the Lenders or the Agent as to any Default then existing or thereby created.
(b) The reimbursement obligation of the Company under this Section 4.3
shall be absolute, unconditional and irrevocable and shall remain in full force
and effect until all obligations of the Company to the Lenders hereunder shall
have been satisfied, and such obligations of the Company shall not be affected,
modified or impaired upon the happening of any event, including without
limitation, any of the following, whether or not with notice to, or the consent
of, the Company:
(i) Any lack of validity or enforceability of any Letter of
Credit or any documentation relating to any Letter of
Credit or to any transaction related in any way to such
Letter of Credit (the "Letter of Credit Documents");
(ii) Any amendment, modification, waiver, consent, or any
substitution, exchange or release of or failure to
perfect any interest in collateral or security, with
respect to any of the Letter of Credit Documents;
(iii) The existence of any claim, setoff, defense or other
right which the Company may have at any time against
any beneficiary or any transferee of any Letter of
Credit (or any persons or entities for whom any such
beneficiary or any such transferee may be acting), the
Agent or any Lender or any other person or entity,
whether in connection with any of the Letter of Credit
Documents, the transactions contemplated herein or
therein or any unrelated transactions;
(iv) Any draft or other statement or document presented
under any Letter of Credit proving to be forged,
fraudulent, invalid or insufficient in any respect or
any statement therein being untrue or inaccurate in any
respect;
(v) Payment by the Agent to the beneficiary under any
Letter of Credit against presentation of documents
which do not comply with the terms of the Letter of
Credit, including failure of any documents to bear any
reference or adequate reference to such Letter of
Credit;
(vi) Any failure, omission, delay or lack on the part of the
Agent or any Lender or any party to any of the Letter
of Credit Documents to enforce, assert or exercise any
right, power or remedy conferred upon the Agent, any
Lender or any such party under this
1999 CREDIT AGREEMENT
-20-
25
Agreement or any of the Letter of Credit Documents, or
any other acts or omissions on the part of the Agent,
any Lender or any such party; and
(vii) Any other event or circumstance that would, in the
absence of this clause, result in the release or
discharge by operation of law or otherwise of the
Company from the performance or observance of any
obligation, covenant or agreement contained in this
Section 4.3.
No setoff, counterclaim, reduction or diminution of any obligation or any
defense of any kind or nature which the Company has or may have against the
beneficiary of any Letter of Credit shall be available hereunder to the Company
against the Agent or any Lender. Nothing in this Section 4.3 shall limit the
liability, if any, of the Lenders or the Agent to the Company pursuant to
Section 10.5(b).
4.4 Payment Method. (a) All payments to be made by the Company
hereunder will be made in Dollars and in immediately available funds to the
Agent not later than 1:30 p.m. Detroit time on the date on which such payment
shall become due. Payments received after 1:30 p.m. shall be deemed to be
payments made prior to 1:30 p.m. on the next succeeding Business Day. The
Company authorizes the Agent to charge its account with the Agent in order to
cause timely payment of amounts due hereunder to be made (subject to sufficient
funds being available in such account for that purpose).
(b) At the time of making each such payment, the Company shall, subject
to the other terms of this Agreement, specify to the Agent that obligation of
the Company hereunder to which such payment is to be applied, or, if an Event of
Default shall have occurred and be continuing, the Agent shall apply such
payments as follows: first, to reimburse the Agent for all costs and expenses
incurred by and in connection with performing its duties and obligations
hereunder and any documents executed in connection herewith; second, on a pro
rata basis, all accrued but unpaid commitment fees, letter of credit fees, agent
fees, fronting fees, and other similar fees due hereunder; third, on a pro rata
basis, all accrued but unpaid interest on any Loans, provided that if no Event
of Default has occurred and is continuing, interest shall be paid on the
Revolving Credit Loans before payment of interest on other Loans; fourth, on a
pro rata basis, to pay all principal on all Loans and all cash collateral and
reimbursement obligations under Letters of Credit, provided, that if no Event of
Default shall have occurred and be continuing, the principal amount of Revolving
Credit Loans shall be paid prior to payment of any principal on any other Loans
or any cash collateral or reimbursement obligations under Letters of Credit; and
fifth, to pay to the Agent and the Lenders any other amounts payable hereunder.
(c) On each day such payments are deemed received, the Agent shall
remit to the Lenders their pro rata shares of such payments in immediately
available funds via wire transfer (i) in the case of payments of principal and
interest on the Revolving Credit Loans, determined with respect to each such
Lender by the ratio which the outstanding principal balance of its Revolving
Credit Notes bears to the outstanding principal balance of all such Revolving
Credit Notes and (ii) in the case of facility fees, letter of credit fees paid
pursuant to Sections 2.4 through 2.6, and other amounts payable hereunder (other
than amounts payable with respect to Article IX), determined with respect to
each such Lender by the ratio which the Commitment of such Lender bears to the
Commitments of all the Lenders.
4.5 No Setoff or Deduction. All payments of principal of and interest
on the Loans and other amounts payable by the Company hereunder shall be made by
the Company without setoff or counterclaim,
1999 CREDIT AGREEMENT
-21-
26
and free and clear of, and without deduction or withholding for, or on account
of, any present or future taxes, levies, imposts, duties, fees, assessments, or
other charges of whatever nature, imposed by any governmental authority, or by
any department, agency or other political subdivision or taxing authority.
4.6 Payment on Non-Business Day; Payment Computations. Except as
otherwise provided in this Agreement to the contrary, whenever any installment
of principal of, or interest on, any Loan outstanding hereunder or any other
amount due hereunder, becomes due and payable on a day which is not a Business
Day, the maturity thereof shall be extended to the next succeeding Business Day
and, in the case of any installment of principal, interest shall be payable
thereon at the rate per annum determined in accordance with this Agreement
during such extension. Computations of interest and other amounts due under this
Agreement shall be made on the basis of a year of 360 days (in the case of
calculations with respect to Eurodollar Rate Loans and Swing Line Loans, and all
fees due hereunder), or 365 or 366 days (in the case of calculations with
respect to Prime Rate Loans), including the first day but excluding the last day
of the relevant period.
ARTICLE V. REPRESENTATIONS AND WARRANTIES
The Company represents and warrants that:
5.1 Corporate Existence and Power. The Company is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Michigan and is duly qualified to do business in each additional jurisdiction
where the failure to so qualify would have a material adverse effect on the
properties, business, operations, or condition, financial or otherwise, of the
Company. The Company has all requisite corporate power to own its properties and
to carry on its business as now being conducted and as proposed to be conducted,
and to execute and deliver this Agreement and the Notes and to engage in the
transactions contemplated by this Agreement.
5.2 Corporate Authority. The execution, delivery and performance by the
Company and the Guarantors of this Agreement, the Guaranty and the Notes, are
within their corporate powers, have been duly authorized by all necessary
corporate action, and do not contravene any law, rule or regulation, or any
judgment, decree, writ, injunction, order or award of any arbitrator, court or
governmental authority, or of the terms of the Company's or any Guarantor's
charter or by-laws, or of any contract or undertaking to which the Company or
any Subsidiary is a party or by which the Company, any Guarantor or their
property may be bound or affected; and neither the Company nor any Subsidiary is
in default under any such law, rule or regulation, judgment, decree, writ,
injunction, order or award of any arbitrator, court of governmental authority,
or of any contract or undertaking to which the Company or any Subsidiary is a
party or by which the Company or its property or any Subsidiary or any of its
property may be bound or affected, where such default could have a material
adverse effect on the business, properties, operations or condition, financial
or otherwise, of the Company or any Subsidiary.
5.3 Binding Effect. This Agreement, the Guaranty and the Notes when
delivered hereunder will be legal, valid and binding obligations of the Company
and each Guarantor enforceable against the Company and each Guarantor in
accordance with their respective terms, except as limited by applicable
bankruptcy, insolvency, reorganization, moratorium, or other laws relative to or
affecting the enforcement of creditors' rights generally in effect from time to
time and by general principles of equity.
1999 CREDIT AGREEMENT
-22-
27
5.4 Subsidiaries. Exhibit F hereto correctly sets forth the corporate
name, jurisdiction of incorporation and ownership percentage of each Subsidiary.
Each such Subsidiary is and each corporation becoming a Subsidiary after the
date hereof will be a corporation duly organized, validly existing and in good
standing under the laws of its jurisdiction of incorporation and duly qualified
to do business in each additional jurisdiction where the failure to so qualify
would have a material adverse effect on the properties, business, operations, or
condition, financial or otherwise, of the Company and the Subsidiaries, on a
consolidated basis. Each Subsidiary has and will have all requisite corporate
power to own its properties and to carry on its business as now being conducted
and as proposed to be conducted. All outstanding shares of capital stock of each
class of each Subsidiary have been and will be validly issued and will be fully
paid and nonassessable and, except as otherwise indicated on Exhibit F hereto,
are and will be owned, beneficially and of record, by the Company or another
Subsidiary of the Company free and clear of any liens, charges, encumbrances or
rights of others whatsoever, other than Liens permitted under Section 6.2(f).
5.5 Litigation. Except as set forth on Exhibit G, there are no actions,
suits or proceedings pending or, to the best of the Company's knowledge,
threatened against or affecting the Company or any of its Subsidiaries before
any court, governmental authority, or arbitrator which, if adversely decided,
might result, either individually or collectively, in any material adverse
change in the business, properties, operations or condition, financial or
otherwise, of the Company and the Subsidiaries on a consolidated basis and, to
the best of the Company's knowledge, there is no basis for any such action, suit
or proceeding.
5.6 Use of Loans and Letter of Credit Advances. The Company does not
extend or maintain, in the ordinary course of business, credit for the purpose,
whether immediate, incidental, or ultimate, of buying or carrying margin stock
(within the meaning of Regulations U, T, or X of the Board of Governors of the
Federal Reserve System), and no part of the proceeds of any Loan or Letter of
Credit Advance will be used for the purpose, whether immediate, incidental, or
ultimate, of buying or carrying any such margin stock or maintaining or
extending credit to others for such purpose. After applying the proceeds of each
Loan and Letter of Credit Advance, not more than 25% of the value of the assets
(either of the Company alone or of the Company and its Subsidiaries on a
consolidated basis) subject to the provisions of this Agreement that may cause
the Loan or any Letter of Credit Advance to be deemed secured will constitute
such margin stock.
5.7 Consents, Etc. No consent, approval or authorization of or
declaration, registration or filing with any governmental authority or any
nongovernmental person or entity, including without limitation any creditor or
stockholder of the Company or any of the Subsidiaries, is required on the part
of the Company or any of the Subsidiaries in connection with the execution,
delivery and performance by the Company of this Agreement and the Notes and by
the Guarantors of any Guaranty or the transactions contemplated hereby or as a
condition to the legality, validity or enforceability of this Agreement, the
Notes or the Guaranties except for such consents approvals, authorizations,
declarations, registrations or filings which have been obtained and are in full
force and effect.
5.8 Taxes. Each of the Company and each Subsidiary has filed or has
caused to be filed all tax returns (federal, state and local) required to be
filed (unless the failure to file such returns would not materially adversely
affect the business, properties, operations or condition, financial or
otherwise, of the Company and its Subsidiaries on a consolidated basis) and has
paid all taxes shown thereon to be due, including interest and penalties, or, if
required by Generally Accepted Accounting Principles, has established adequate
financial reserves on its books and records for payment thereof.
1999 CREDIT AGREEMENT
-23-
28
5.9 Title to Properties. Each of the Company and the Subsidiaries has
good and marketable title to, and a valid indefeasible ownership interest in,
all of its properties and assets (other than property and assets held under
valid leases or which do not materially adversely affect the business or
financial condition of the Company and the Subsidiaries on a consolidated basis)
and all of its properties and assets are free and clear of any Lien except Liens
permitted by Section 6.2(f).
5.10 Financial Condition. The consolidated balance sheet of the Company
and its Subsidiaries and the consolidated statements of income, retained
earnings and cash flows of the Company and its Subsidiaries for the fiscal year
ended June 30, 1998, certified by BDO/Xxxxxxx, independent certified public
accountants, and the interim consolidated balance sheet and interim consolidated
statements of income and cash flow as of or for the nine-month period ended on
April 3, 1999, copies of which have been furnished to the Lenders, fairly
present the consolidated financial condition of the Company and its Subsidiaries
as at the date thereof, and the consolidated results of operations of the
Company and its Subsidiaries for the periods indicated, all in accordance with
Generally Accepted Accounting Principles consistently applied. There has been no
material adverse change in the business, properties, operations, or in the
condition, financial or otherwise of the Company and its Subsidiaries, on a
consolidated basis, since June 30, 1998, other than the sale of the Personal
Care Division. There are no liabilities of the Company or any Subsidiary, fixed
or contingent, which are material but are not reflected in such financial
statements or the notes thereto.
5.11 Solvency. The Company and its Subsidiaries, individually and on a
consolidated basis, are Solvent.
5.12 ERISA Compliance. The Company, its Subsidiaries, their ERISA
Affiliates and their respective Plans are in compliance in all material respects
with those provisions of ERISA and of the Code which are applicable with respect
to any Plan. No Prohibited Transaction and no Reportable Event has occurred with
respect to any Plan. None of the Company, any of its Subsidiaries or any ERISA
Affiliate is an employer with respect to any Multiemployer Plan. The Company,
its Subsidiaries and their ERISA Affiliates have met the minimum funding
requirements under ERISA and the Code with respect to each of their respective
Plans, if any, and have not incurred any liability to the PBGC or any Plan. The
execution, delivery and performance of this Agreement and the Notes do not
constitute a Prohibited Transaction. There is no material unfunded benefit
liability, determined in accordance with Section 4001(a)(18) of ERISA, with
respect to any Plan.
5.13 Labor Disputes and Casualties. Neither the business nor the
properties of the Company or any Subsidiary are affected by any strike, lockout
or other labor dispute, or by any fire, accident, or other casualty, which
materially and adversely affects such business or properties or the operation of
the Company and its Subsidiaries on a consolidated basis.
5.14 Environmental, Safety, Drug and Cosmetic Regulations. Except as
disclosed on Exhibit H hereto, the Company and each Subsidiary is in compliance
in all material respects with all federal, state and local laws, ordinances and
regulations relating to safety, industrial hygiene, the environmental condition
or the manufacture, sale or distribution of any drug or cosmetic, including,
without limitation all Environmental Laws in jurisdictions in which the Company
or any Subsidiary owns or operates, or has owned or operated, a facility or
site, or arranges or has arranged for disposal or treatment of hazardous
substances, solid waste, or other wastes, accepts or has accepted for transport
any hazardous substances, solid wastes or holds or has any
1999 CREDIT AGREEMENT
-24-
29
interest in real property or otherwise. No demand, claim, notice, suit, suit in
equity, action, administrative action, investigation or inquiry whether brought
by any governmental authority, private person or entity or otherwise, arising
under, relating to or in connection with any Environmental Laws is pending or
threatened against the Company or any of its Subsidiaries, any real property in
which the Company or any such Subsidiary holds or has held an interest or any
past or present operation of the Company or any Subsidiary, the outcome of
which, if adversely determined against the Company or any Subsidiary, would be
material to the business, operations, properties or condition, financial or
otherwise, of the Company and its Subsidiaries on a consolidated basis. Neither
the Company nor any Subsidiary (a) is the subject of any federal or state
investigation evaluating whether any remedial action is needed to respond to a
release of any toxic substances, radioactive materials, hazardous wastes or
related materials into the environment, (b) has received any notice of any toxic
substances, radioactive materials, hazardous waste or related materials in or
upon any of its properties in violation of any Environmental Laws, except as
disclosed on Exhibit H hereto, and, as to such matters disclosed on Exhibit H,
none, if adversely decided, would result, either individually or collectively,
in any material adverse change in the business, operations, properties or
condition, financial or otherwise, of the Company and its Subsidiaries on a
consolidated basis, (c) has received any notice or to its knowledge is the
subject of any federal or state investigation with respect to any material
violation of any laws or regulations relating to the manufacture, sale or
distribution of any drug or cosmetic, including without limitation the Federal
Food, Drug and Cosmetic Act, 21 USC Sections 301 et seq., or (d) knows of any
basis for any such investigation, notice or violation other than an
investigation, notice, or violation which, if adversely decided, would not
result, either individually or collectively, in any material adverse change in
the business, operations, properties or condition, financial or otherwise, of
the Company and the Subsidiaries, on a consolidated basis.
5.15 Year 2000 Matters. The Company has made a full and complete
assessment of the Year 2000 Issues and has a realistic and achievable program
for remediating the Year 2000 Issues on a timely basis (the "Year 2000
Program"). Based on this assessment and on the Year 2000 Program, the Company
does not reasonably anticipate that Year 2000 Issues will have a material
adverse effect on the business, properties, operations or condition, financial
or otherwise, of the Company and the Subsidiaries on a consolidated basis.
ARTICLE VI. COVENANTS
6.1 Affirmative Covenants. The Company covenants and agrees that, until
the Termination Date and thereafter until payment in full of the principal of
and accrued interest on the Notes, the termination or expiration of all Letters
of Credit and the performance of all other obligations of the Company under this
Agreement, unless the Majority Lenders shall otherwise consent in writing, it
shall, and shall cause each of the Subsidiaries to:
(a) Preservation of Corporate Existence, Etc. Except as permitted under
Section 6.2(g), preserve and maintain its corporate existence, rights,
privileges, licenses, franchises and permits and qualify and remain qualified as
a validly existing corporation in good standing in each jurisdiction in which
the failure to so qualify would have a material adverse effect on the
properties, business, operations or condition, financial or otherwise, of the
Company and the Subsidiaries, on a consolidated basis.
(b) Compliance with Laws, Etc. Comply in all material respects with all
applicable laws, rules, regulations and orders of any governmental authority,
whether federal, state, local or foreign (including
1999 CREDIT AGREEMENT
-25-
30
without limitation ERISA, the Code and Environmental Laws), in effect from time
to time; and pay and discharge promptly when due all taxes, assessments and
governmental charges or levies imposed upon it or upon its income, revenues or
property, before the same shall become delinquent or in default; as well as all
lawful claims for labor, materials and supplies or otherwise, which, if unpaid,
might give rise to liens upon such properties or any portion thereof), except to
the extent that failure to comply with the foregoing would not have a material
adverse impact on the business or financial condition of the Company and the
Subsidiaries, on a consolidated basis, or that compliance with any of the
foregoing is then being contested in good faith by appropriate legal proceedings
and with respect to which adequate financial reserves have been established on
the books and records of the Company or its Subsidiaries, if required by
Generally Accepted Accounting Principles.
(c) Maintenance of Insurance. Maintain insurance with responsible and
reputable insurance companies or associations in such amounts and covering such
risks as is usually carried by companies engaged in similar or comparable
businesses, or otherwise in the manner determined in the reasonable judgment of
the Company which would not have a material adverse effect on the financial
condition of the Company and its Subsidiaries on a consolidated basis, including
without limitation such workers' compensation insurance as required by law,
unless the Company or any Subsidiary is qualified and duly authorized by law to
self-insure with respect to its workers' compensation liability and is not
otherwise prohibited by this Agreement from doing so, and products liability
insurance. The insurance listed on Exhibit I hereto is currently in full force
and effect.
(d) Reporting Requirements. Furnish to the Lenders the following:
(i) Promptly and in any event within 10 calendar days after
becoming aware of the occurrence of (A) any Event of
Default or any event or condition which, with notice or
lapse of time, or both, would constitute an Event of
Default, (B) the commencement of any material
litigation against, by or affecting the Company or any
Subsidiary, and any material developments therein, (C)
the entry into any material contract or undertaking
that is not entered into in the ordinary course of
business, (D) any development in the business or
affairs of the Company or any of its Subsidiaries which
has resulted in or which is likely, in the reasonable
judgment of the Company, to result in any material
adverse change in the business, properties, operations
or condition, financial or otherwise, of the Company or
any of its Subsidiaries, or (E) any notice from any
governmental entity, including without limitation the
Food and Drug Administration and the Environmental
Protection Agency, of any formal or informal
investigation or violation of any law or regulation
with respect to the Company or any Subsidiary (other
than customary, reoccurring or routine investigations)
which is likely, in the reasonable judgment of the
Company, to result in any material adverse change in
the business, properties, operations or conditions,
financial or otherwise, of the Company or any of its
Subsidiaries, together with a statement of the
treasurer of the Company setting forth the details of
any of the foregoing and the action which the Company
has taken and proposes to take with respect thereto;
(ii) As soon as available and in any event within 45 days
after the end of each fiscal quarter of the Company,
the consolidated balance sheet of the Company and its
1999 CREDIT AGREEMENT
-26-
31
Subsidiaries as of the end of such quarterly period,
and the related consolidated statements of income,
retained earnings and cash flows for the period
commencing at the end of the previous fiscal year and
ending with the end of such quarterly period, setting
forth in each case in comparative form the
corresponding figures for the corresponding date or
period of the preceding fiscal year, all in reasonable
detail and duly certified (subject to year-end
adjustments) by the treasurer of the Company as having
been prepared in accordance with Generally Accepted
Accounting Principles, together with a certificate of
the treasurer of the Company stating that (A) no Event
of Default or event or condition which, with notice or
lapse of time, or both, would constitute an Event of
Default, has occurred and is continuing or, if an Event
of Default or such an event or condition has occurred
and is continuing, a statement setting forth the
details thereof and the action which the Company has
taken and proposes to take with respect thereto and (B)
a computation (which computation shall accompany such
certificate in reasonable detail) showing compliance
with Sections 6.2(a), (b), (c), and (d) in conformity
with the terms of this Agreement; provided, however,
that, within 28 days after the end of each fiscal
quarter of the Company, the Company shall provide the
Agent with a computation showing compliance with
Sections 6.2(b) and (c);
(iii) As soon as available and in any event within 90 days
after the end of each fiscal year of the Company, (A)
the consolidated balance sheet of the Company and its
Subsidiaries as of the end of such fiscal year and the
related consolidated statements of income, retained
earnings and cash flows for such fiscal year, certified
without qualifications unacceptable to the Lenders by
independent certified public accountants selected by
the Company and acceptable to the Agent, together with
(B) a certificate of such accountants stating that they
have reviewed this Agreement, and stating further
whether, in the course of their review of such
financial statements, they have become aware of any
Default and, if a Default has occurred and is
continuing, a statement setting forth the nature and
status thereof and (C) a computation by the Company
(which computation shall accompany such certificate and
shall be in reasonable detail) showing compliance with
Sections 6.2(a), (b), (c), and (d) in conformity with
the terms of this Agreement;
(iv) Promptly after the sending or filing thereof, copies of
all reports, proxy statements and financial statements
which the Company or any of the Subsidiaries sends to
any securities exchange or to the Securities and
Exchange Commission or any successor agency thereof;
(v) Promptly and in any event within 10 calendar days after
receiving or becoming aware thereof (A) a copy of any
notice of intent to terminate any Plan of the Company,
its Subsidiaries or any ERISA Affiliate filed with the
PBGC, (B) a statement of the treasurer of the Company
setting forth the details of the occurrence of any
Reportable Event with respect to any such Plan, (C) a
copy of any notice that the Company, any of its
Subsidiaries or any ERISA Affiliate may receive from
the PBGC relating to the intention of the PBGC to
terminate any such Plan or to appoint a trustee to
administer any such Plan, or (D) a copy of any notice
of failure to make a required installment or
1999 CREDIT AGREEMENT
-27-
32
other payment within the meaning of Section 412(n) of
the Code or Section 302(f) of ERISA with respect to any
such Plan;
(vi) At least 15 days but not more than 60 days prior to the
Company entering into an Acquisition with a purchase
price (including all assumed liabilities) valued at
$10,000,000 or more, a certificate of the treasurer of
the Company stating that (A) no Event of Default or
event or condition which, with notice or lapse of time,
or both, would constitute an Event of Default, has
occurred and is continuing or would occur as a result
of the Acquisition taking place, and (B) a computation
(which computation shall accompany such certificate in
reasonable detail) showing compliance with Sections
6.2(a), (b), (c), (d), and (g) in conformity with the
terms of this Agreement.
(vii) Promptly, such other information respecting the
business, properties or the condition or operations,
financial or otherwise, of the Company or any of its
Subsidiaries as any Lender may from time to time
reasonably request.
(e) Access to Records, Books, Etc. At any reasonable time and from time
to time, permit the Lenders or any agents or representatives thereof to examine
and make copies of and abstracts from the records and books of account of, and
visit the properties of, the Company and the Subsidiaries, and to discuss the
affairs, finances and accounts of the Company and the Subsidiaries with their
respective officers and employees.
(f) Use of Proceeds. The proceeds of the Loans shall be used to (i) pay
in full all outstanding amounts due under the Prior Credit Agreement, without
any prepayment fee, (ii) make advances to the Guarantors for working capital,
capital expenditures and operating expenses, and (iii) for other general
corporate purposes of the Company.
(g) Further Assurances. Promptly (i) cause each person becoming a
Material Subsidiary at any time after the Effective Date to execute and deliver
to the Lenders (or, where appropriate, to the Agent for the benefit of the
Lenders), within 30 days after such person becomes a Material Subsidiary, a
Guaranty in substantially the form of such Guaranty delivered by the Guarantors,
(ii) execute and cause each such Subsidiary promptly to execute and deliver all
further instruments and documents and take all further action that may be
necessary or desirable, or that the Agent may request, in order to give effect
to, and to aid in the exercise and enforcement of the rights and remedies of the
Agent and the Lenders under this Agreement and the Notes.
6.2 Negative Covenants. The Company covenants and agrees that, until
the Termination Date and thereafter until payment in full of the principal of
and accrued interest on the Notes, the termination or expiration of all Letters
of Credit and the performance of all other obligations of the Company under this
Agreement, unless the Majority Lenders shall otherwise consent in writing, it
shall not, and shall not permit any Subsidiary to:
(a) Net Worth. Permit or suffer Consolidated Net Worth of the Company
and its Subsidiaries to be less than the sum of (i) $300,000,000, plus (ii) an
amount equal to 50% of Cumulative Net Income (without reduction for net loss) of
the Company and its Subsidiaries for each fiscal year of the Company
1999 CREDIT AGREEMENT
-28-
33
ending after the Effective Date, plus (iii) the amount of proceeds of any new
issuance of common or preferred stock other than stock issued pursuant to the
exercise of employee stock options.
(b) Interest Coverage Ratio. Permit or suffer the Consolidated Interest
Coverage Ratio of the Company and its Subsidiaries as of the last day of each
fiscal quarter of the Company, as calculated for the four consecutive preceding
fiscal quarters of the Company then ending, to be less than 3.0 to 1.0.
(c) Leverage Ratio. Permit or suffer the Leverage Ratio to be greater
than (i) 3.0 to 1.0 as of the last day of each fiscal quarter of the Company
ending on or before July 1, 2000, (ii) ) 2.25 to 1.0 as of the last day of each
fiscal quarter of the Company ending after July 1, 2000, and on or before June
29, 2001, and (iii) 2.0 to 1.0 as of the last day of each fiscal quarter of the
Company thereafter.
(d) Loans and Advances; Investments. Purchase or otherwise acquire any
capital stock of or other ownership interest in, or debt securities of or other
evidences of Indebtedness of, any other person, nor make any loan or advance of
any of its funds or property or make any other extension of credit to, or make
any investment or acquire any interest whatsoever in, any other person, nor
incur any contingent liability except under this Agreement and the Guaranty,
other than:
(i) extensions of trade credit made in the ordinary course
of business on customary credit terms and advances made
to officers and employees in the ordinary course of
business;
(ii) commercial paper of any United States issuer having an
investment grade rating then given by Xxxxx'x Investors
Service, Inc., or Standard & Poor's Ratings Group, a
division of XxXxxx-Xxxx, Inc., direct obligations of
and obligations fully guaranteed by the United States
of America or any agency or instrumentality thereof, or
certificates of deposit or repurchase agreements of any
commercial bank which is a member of the Federal
Reserve System and which has capital, surplus and
undivided profit (as shown on its most recently
published statement of condition) aggregating not less
than $50,000,000;
(iii) loans and advances to and other investments in joint
ventures and in other corporations primarily engaged in
a Related Business, provided that the aggregate
outstanding amount of all such loans, advances and
other investments shall not exceed 10% of Consolidated
Net Worth of the Company and its Subsidiaries as of the
later of March 31, 1999, or the then most recently
ended fiscal quarter of the Company;
(iv) funds invested with a prudently selected nationally
recognized money market fund;
(v) loans or advances by the Company to and investments by
the Company in any Subsidiaries and loans or advances
by any Subsidiaries to and investments by any
Subsidiaries in the Company or any other Subsidiaries;
and
(vi) acquisitions of evidences of Indebtedness of
Subsidiaries pursuant to Section 6.2(e)(iv) and
transactions permitted by Section 6.2(g).
1999 CREDIT AGREEMENT
-29-
34
(e) Indebtedness. Create, incur, assume, guaranty or in any manner
become liable in respect of, or suffer to exist, any Indebtedness other than:
(i) Indebtedness existing on the Effective Date and
described in Exhibit J attached hereto, but no increase
of the principal amount of any such Indebtedness shall
be permitted;
(ii) The Loans, the Letters of Credit, and the Guaranty;
(iii) Indebtedness of the Company and its Subsidiaries in
aggregate outstanding principal amount not exceeding
$15,000,000 which is secured by one or more Liens
permitted by Section 6.2(f)(iv);
(iv) Indebtedness of any Subsidiary owing to the Company or
to any other Subsidiary;
(v) Indebtedness consisting of payments and other amounts
due under operating leases, provided the aggregate
amount of all such payments does not exceed $20,000,000
in any fiscal year;
(vi) Any Indebtedness pursuant to any interest rate swap,
interest rate cap or other similar interest rate
protection relating to the Indebtedness of the Company
hereunder;
(vii) Indebtedness consisting of deferred taxes; and
(viii) Other Indebtedness in aggregate outstanding amount not
exceeding 20% of the Consolidated Net Worth of the
Company and its Subsidiaries as of the then most
recently ended fiscal quarter of the Company at any
time.
(f) Liens. Create, incur or suffer to exist, any Liens on any of the
assets, rights, revenues or property, real, personal or mixed, tangible or
intangible, whether now owned or hereafter acquired of the Company or any
Subsidiary, other than:
(i) Liens existing on the Effective Date and described in
Exhibit K attached hereto, but no increase in the
amount secured thereby or the assets covered thereby
shall be permitted;
(ii) Liens for taxes not delinquent or for taxes being
contested in good faith by appropriate proceedings and
as to which adequate financial reserves have been
established on its books and records, if required by
Generally Accepted Accounting Principles;
(iii) Liens created by operation of law in connection with
workers' compensation, unemployment insurance, and
social security and other Liens incidental to the
conduct of its business or the ownership of its
property and assets which were not incurred in
connection with the borrowing of money or the obtaining
of advances or
1999 CREDIT AGREEMENT
-30-
35
credit, and which do not in the aggregate materially
detract from the value of its property or assets or
materially impair the use thereof in the operation of
its business;
(iv) Liens on any Fixed Asset created to secure the payment
of a portion of the purchase price of such Fixed Asset
acquired in the ordinary course of business by the
Company or any Subsidiary if the outstanding principal
amount of the Indebtedness secured by any such Lien
does not at any time exceed the purchase price paid by
the Company or such Subsidiary for such Fixed Asset,
and the aggregate principal amount of all Indebtedness
secured by such Liens does not exceed 10% of the
Consolidated Net Worth of the Company and its
Subsidiaries as of the then most recently ended fiscal
quarter of the Company at any time, provided that such
Lien does not burden any other asset at any time owned
by the Company or any Subsidiary and provided, further,
that not more than one such Lien shall burden a Fixed
Asset at any one time;
(v) Any interest or title of a lessor under any lease;
Liens which constitute minor survey exceptions, minor
encumbrances, easements or reservations of, or rights
of others for, rights of way, sewers, electric lines,
telegraph and telephone lines and other similar
purposes; or zoning or other restrictions affecting
real property owned or leased by the Company or the
Subsidiaries, provided that all of the foregoing, in
the aggregate, do not at any time materially detract
from the value of such property or materially impair
the use of such property in the operation of the
businesses of the Company and the Subsidiaries, on a
consolidated basis; and
(vi) Liens assumed in any acquisition permitted hereunder,
provided that such Lien does not burden any other asset
at any time owned by the Company or any Subsidiary
other than the asset to which it attached prior to the
acquisition, and there shall be no increase in the
amount of indebtedness secured thereby.
(g) Merger; Purchase or Sale of Assets; Etc. Sell, lease, transfer or
otherwise dispose of any of its assets or business to any Person other than (A)
sales, leases, transfers or other dispositions of any line or lines of business
in any fiscal year which did not constitute more than 10% of the Consolidated
Net Income of the Company and its Subsidiaries for the then most recently ended
fiscal year of the Company, and (B) sales, leases, transfers and other
dispositions of other assets which, together with those subject to transactions
permitted under clause (A), do not have a book value constituting more than 10%
of the consolidated total book value of assets of the Company and its
Subsidiaries as of the end of the then most recently ended fiscal quarter; nor
purchase or otherwise acquire all or a substantial portion of the assets of any
Person, or all or a substantial portion of the shares of stock of or other
ownership interest in any other Person; nor merge or consolidate with any other
Person; nor make any substantial change in the nature of its business; nor
become, or remain, an obligee with respect to any obligation of any other Person
if the obligation of such Person would constitute Indebtedness of such Person
other than Indebtedness secured by Liens permitted under Section 6.2(f)(iv) in
an amount not exceeding the purchase price of the assets subject to such Liens;
provided, however, that the Company or any Subsidiary may purchase or otherwise
acquire all or 50% or more of the assets of any Person or of any line of
business or division of any Person or all or 50% or more of the shares of stock
or other ownership interest in any other Person or merge with any other
corporation (individually, an "Acquisition" and the foregoing transactions
described in this provision are governed by this Section 6.2(g) and not by
Section 6.2(d)) provided that (V) the Company shall be the surviving or
continuing corporation
1999 CREDIT AGREEMENT
-31-
36
after such merger or consolidation, (W) no Default shall exist or shall have
occurred and be continuing, either before or after giving effect to the
Acquisition, (X) the assets or stock being purchased or the Person which is
merging into the Company is primarily engaged in a Related Business, (Y) the
aggregate amount paid and other consideration given for all such Acquisitions,
whether of assets or stock or other ownership interests, or in connection with
any merger, does not in the aggregate for any fiscal year exceed $25,000,000 and
does not in the aggregate exceed $60,000,000 during the term of this Agreement,
and (Z) the Company is in compliance with all financial and other covenants
contained in this Agreement on a pro forma basis acceptable to the Agent both
before and after giving effect to such Acquisition. No transaction permitted
under this Section 6.2(g) shall be limited by the restriction on investments of
the Company and its Subsidiaries under Section 6.2(d)(iii), and any purchase or
other Acquisition by the Company of less than 50% of the assets of any Person or
of any line of business or division of any Person or less than 50% of the shares
of the stock or other ownership interest in any other Person shall be governed
by the limitations as set forth in Section 6.2(d) and not by this Section
6.2(g).
(h) Capital Expenditures. Acquire or contract to acquire any fixed
asset or make any other Capital Expenditure if the aggregate purchase price and
other acquisition costs of all such Capital Expenditures made by the Company or
any of its Subsidiaries during any fiscal year of the Company would exceed
$40,000,000, provided, however, that, if the aggregate purchase price and other
acquisition costs of Capital Expenditures made by the Company or any of its
Subsidiaries during any fiscal year is less than $40,000,000, the limitation for
the following fiscal year shall be $40,000,000 plus the unused portion of the
prior fiscal year's limitation.
ARTICLE VII. DEFAULT
7.1 Events of Default. The occurrence of any one of the following
events or conditions shall be deemed an "Event of Default" hereunder unless
waived pursuant to Section 10.1:
(a) Default in any payment of principal of any of the Notes; or
(b) Default in any payment of interest on any of the Notes, any fees,
or any other amount payable hereunder within 5 Business Days after it is due; or
(c) Any representation or warranty made by the Company in Article V, or
by the Company or any Guarantor in any other document or certificate furnished
by or on behalf of the Company or such Guarantor in connection with this
Agreement, shall prove to have been incorrect in any material respect when made;
or
(d) The Company shall fail to perform or observe any term, covenant or
agreement contained in Section 6.1(a) or Section 6.2; or
(e) The Company shall fail to perform or observe any other term,
covenant or agreement contained in this Agreement and any such failure shall
remain unremedied for 30 calendar days after notice thereof shall have been
given to the Company by any Lender or 30 calendar days after notice thereof
should have been given by the Company to the Lenders pursuant to Section
6.1(d)(i), whichever is earlier; or
1999 CREDIT AGREEMENT
-32-
37
(f) The Company or any of its Subsidiaries shall fail to pay any part
of the principal of, the premium, if any, or the interest on, or any other
payment of money due under any Indebtedness outstanding in favor of any Lender,
whether as agent or otherwise, or any other Indebtedness aggregating in excess
of $5,000,000 (other than Indebtedness hereunder) beyond any period of grace
provided with respect thereto, or the Company or any of its Subsidiaries shall
fail to perform or observe any other term, covenant or agreement contained in
any document evidencing or securing such Indebtedness, or in any agreement or
instrument under which any such Indebtedness was issued or created, beyond the
period of grace, if any, provided with respect thereto, if the effect of such
failure is to accelerate the maturity of such Indebtedness; or
(g) A judgment or order for the payment of money which, together with
other such judgments or orders exceeds the aggregate amount of $5,000,000, shall
be rendered against the Company or any of its Subsidiaries and either (i)
enforcement proceedings shall have been commenced by any creditor upon such
judgment or order and such judgment or order shall have remained unsatisfied and
such proceedings shall have remained unstayed for a period of 30 consecutive
days, or (ii) for a period of 30 consecutive days such judgment or order shall
have remained unsatisfied and a stay of enforcement thereof, by reason of
pending appeal or otherwise, shall not have been in effect; or
(h) The occurrence of a Reportable Event that results in or could
result in liability of the Company, any Subsidiary or their ERISA Affiliates to
the PBGC or to any Plan and such Reportable Event is not corrected within thirty
(30) days after the occurrence thereof; or the occurrence of any Reportable
Event which could constitute grounds for termination of any Plan of the Company,
any Subsidiary or their ERISA Affiliates by the PBGC or for the appointment by
the appropriate United States District Court of a trustee to administer any such
Plan and such Reportable Event is not corrected within thirty (30) days after
the occurrence thereof; or the filing by the Company, any Subsidiary or any of
their ERISA Affiliates of a notice of intent to terminate a Plan or the
institution of other proceedings to terminate a Plan; or the Company, any
Subsidiary or any of their ERISA Affiliates shall fail to pay when due any
liability to the PBGC or to a Plan; or the PBGC shall have instituted
proceedings to terminate, or to cause a trustee to be appointed to administer,
any Plan of the Company, any Subsidiary or their ERISA Affiliates; or any person
engages in a Prohibited Transaction with respect to any Plan which results in or
could result in liability of the Company, any Subsidiary, any of their ERISA
Affiliates, any Plan of the Company, its Subsidiaries or their ERISA Affiliates
or fiduciary of any such Plan; or failure by the Company, any Subsidiary or any
of their ERISA Affiliates to make a required installment or other payment to any
Plan within the meaning of Section 302(f) of ERISA or Section 412(n) of the Code
that results in or could result in liability of the Company, any Subsidiary or
any of their ERISA Affiliates to the PBGC or any Plan; or the withdrawal of the
Company, any Subsidiary or any of their ERISA Affiliates from a Plan during a
plan year in which it was a "substantial employer" as defined in Section
4001(9a)(2) of ERISA; or the Company, any Subsidiary or any of their ERISA
Affiliates becomes an employer with respect to any Multiemployer Plan without
the prior written consent of the Majority Lenders; or
(i) The Company or any of its Subsidiaries shall generally not pay its
debts as they become due, or shall admit in writing its inability to pay its
debts generally, or shall make a general assignment for the benefit of
creditors, or shall institute, or there shall be instituted against the Company
or any of its Subsidiaries, any proceeding or case seeking to adjudicate it a
bankrupt or insolvent or seeking liquidation, winding up, reorganization,
arrangement, adjustment, protection, relief or composition of it or its debts
under any law relating to bankruptcy, insolvency or reorganization or relief or
protection of debtors or seeking the entry of an order for relief or the
appointment of a receiver, trustee, custodian or other similar official for it
or
1999 CREDIT AGREEMENT
-33-
38
for any substantial part of its property, and, if such proceeding is instituted
against the Company or such Subsidiary and is being contested by the Company or
such Subsidiary, as the case may be, in good faith by appropriate proceedings,
such proceedings shall remain undismissed or unstayed for a period of 60 days;
or the Company or such Subsidiary shall take any action (corporate or other) to
authorize or further any of the actions described above in this subsection; or
(j) Any event of default described in any Guaranty shall have occurred
and be continuing, or any material provision of any Guaranty shall at any time
for any reason cease to be valid and binding and enforceable against any obligor
thereunder, or the validity, binding effect or enforceability thereof shall be
contested by any person, or any obligor shall deny that it has any or further
liability or obligation thereunder, or any Guaranty shall be terminated,
invalidated or set aside, or be declared ineffective or inoperative or in any
way cease to give or provide to the Lenders and the Agent the benefits purported
to be created thereby; or
(k) Any person, other than the Management Group, shall own in the
aggregate, directly or indirectly, more than 25% of the securities having
ordinary voting power for the election of directors of the Company unless the
Company's board of directors shall agree to such person acquiring more than 25%.
7.2 Remedies.
(a) Upon the occurrence and during the continuance of any Event of
Default, the Agent shall at the request of, or may with the consent of, the
Majority Lenders, by notice to the Company (i) terminate the Credit and the
Commitments or (ii) declare the outstanding principal of, and accrued interest
on, the Notes, all unpaid reimbursement obligations in respect of drawings under
Letters of Credit and all other amounts due under this Agreement to be
immediately due and payable, or (iii) demand immediate delivery of cash
collateral and the Company agrees to deliver such cash collateral upon demand,
in an amount equal to the maximum amount that may be available to be drawn at
any time prior to the stated expiry of all outstanding Letters of Credit, or any
one or more of the foregoing, whereupon the Credit and the Commitments shall
terminate forthwith and all such amounts, including such cash collateral, shall
become immediately due and payable, as the case may be, provided that in the
case of any event or condition described in Section 7.1(i) with respect to the
Company, the Credit and the Commitments shall automatically terminate forthwith
and all such amounts, including such cash collateral, shall automatically become
immediately due and payable without notice and without demand, presentment,
protest, diligence, notice of dishonor or other formality, all of which are
hereby expressly waived. Such cash collateral delivered in respect of
outstanding Letters of Credit shall be deposited in a special cash collateral
account to be held by the Agent as collateral security for the payment and
performance of the Company's obligations under this Agreement to the Lenders and
the Agent.
(b) Upon the occurrence and during the continuance of such Event of
Default, the Agent may, and, upon being directed to do so by the Majority
Lenders, shall, in addition to the remedies provided in Section 7.2(a), enforce
any and all other rights and remedies available to it or the Lenders either by
suit in equity, or by action at law, or by other appropriate proceedings,
whether for the specific performance (to the extent permitted by law) of any
covenant or agreement contained in this Agreement, the Notes or the Guaranties,
or in aid of the exercise of any power granted in this Agreement, the Notes or
the Guaranties, and may enforce the payment of the Notes and any other rights
available to it or the Lenders at law or in equity.
1999 CREDIT AGREEMENT
-34-
39
(c) Upon the occurrence and during the continuance of any Event of
Default hereunder, each Lender is hereby authorized at any time and from time to
time, without notice to the Company (any requirement for such notice being
expressly waived by the Company) to set off and apply against any and all of the
obligations of the Company now or hereafter existing under this Agreement any
and all deposits (general or special, time or demand, provisional or final) at
any time held and other indebtedness at any time owing by such Lender to or for
the credit or the account of the Company and any property of the Company from
time to time in possession of such Lender, irrespective of whether or not such
Lender shall have made any demand hereunder and although such obligations may be
contingent and unmatured. The rights of the Lenders under this Section 7.2(c)
are in addition to other rights and remedies (including, without limitation,
other rights of setoff) which the Lenders may have.
ARTICLE VIII. THE AGENT AND THE LENDERS
8.1 Appointment of Agent. Bank One is appointed Agent for the Lenders
and accepts such appointment and agrees to act as such upon the conditions
herein set forth. The Agent shall have no duties or responsibilities except
those expressly set forth in this Agreement, and shall not, by reason of this
Agreement, have a fiduciary relationship with any Lender.
8.2 Scope of Agency. Neither the Agent nor any of its directors,
officers or agents shall be liable for any action taken or omitted by any of
them hereunder or under the Notes or any Guaranty except for its, his or her own
gross negligence or willful misconduct; or be responsible for any recitals,
warranties or representations herein or in the Notes or any other agreement to
which the Company or any Subsidiary is a party, or for the execution or validity
of this Agreement, the Notes, the Guaranties or any other agreement to which the
Company or any Subsidiary is a party; or be required to make any inquiry
concerning the performance by the Company of any of its obligations under this
Agreement, the Notes or any other agreement to which the Company or any
Subsidiary is a party. In the absence of gross negligence or willful misconduct,
the Agent shall be entitled to rely, without liability therefor, upon any
certificate or other document or other communication believed by it to be
genuine and correct and to have been signed or sent by the proper officer or
person and upon the advice of legal counsel (which may be legal counsel for the
Company), independent public accountants and other experts concerning all
matters pertaining to the agency. The Company agrees, upon demand, to pay or to
reimburse the Agent for the payment of all reasonable compensation of such
counsel, accountants and other experts and all other reasonable out-of-pocket
expenses of the Agent. To the extent that the Company shall fail to pay or to
reimburse the Agent for the payment of any such amounts, the Lenders shall
reimburse the Agent for such amounts on a pro rata basis in accordance with the
Commitments, and any such amount so paid shall be immediately due and payable to
the Lenders by the Company. The Lenders agree to indemnify the Agent ratably in
accordance with their Commitments for any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind or nature whatsoever which may be imposed on, incurred
by or asserted against the Agent in any way relating to or arising out of this
Agreement or the transactions contemplated hereby, provided that no Lender shall
be liable for any of the foregoing to the extent they arise solely from the
Agent's gross negligence or willful misconduct.
8.3 Duties of Agent. In carrying out the agency, the Agent shall have
only the duties and responsibilities expressly set forth in this Agreement. In
performing such duties and responsibilities, the Agent shall exercise the same
degree of care as it would if the Loans were entirely for its own account, but,
1999 CREDIT AGREEMENT
-35-
40
unless the Agent has actual knowledge thereof, the Agent shall not be deemed to
have knowledge of the occurrence of any Event of Default or any Default, and
need not take or continue any action with respect thereto or toward the
enforcement of this Agreement, the Notes, or any Guaranty nor prosecute or
defend any suit with respect to this Agreement, the Notes, or any Guaranty
unless directed to do so by the Majority Lenders and unless indemnified to its
satisfaction against any loss, cost, liability or expense which it might incur
as a consequence of taking such action. The Agent may employ agents and
attorneys and shall not be answerable for the negligence or misconduct of any
such agents or attorneys selected by it with reasonable care. The Agent in its
capacity as a Lender hereunder shall have the same rights and powers hereunder
as any other Lender and may exercise the same as though it were not acting as
the Agent hereunder. Each Lender agrees that it has, independently and without
reliance on the Agent or any other Lender, and based on such documents and
information as it has deemed appropriate, made its own credit analysis of the
Company and the Subsidiaries in connection with its decision to enter into this
Agreement and that it will, independently and without reliance upon the Agent or
any other Lender, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own analysis and decisions in
taking or not taking action under this Agreement.
8.4 Resignation of Agent. The Agent may resign as such at any time upon
30 days' prior written notice to the Company and the Lenders. In the event of
any such resignation, the Majority Lenders shall, by an instrument in writing
delivered to the Company and the Agent, appoint a successor which shall be an
incorporated bank or trust company. If a successor is not so appointed or does
not accept such appointment at least 5 days before the Agent's resignation
becomes effective, the Agent may appoint a temporary successor to act until such
appointment by the Majority Lenders is made and accepted. Any successor to the
Agent shall execute and deliver to the Company and the Lenders an instrument
accepting such appointment and, from and after such acceptance, such successor
Agent, without further act, deed, conveyance or transfer shall become vested
with all of the properties, rights, interests, powers, authorities and
obligations of its predecessor hereunder with like effect as if originally named
as Agent hereunder. Upon request of such successor Agent, the Company and the
Agent ceasing to act shall execute and deliver such instruments of conveyance,
assignment and further assurance and do such other things as may reasonably be
required for more fully and certainly vesting and confirming in such successor
Agent all such properties, rights, interests, powers, authorities and
obligations.
8.5 Pro Rata Sharing by Lenders. Each Lender agrees with every other
Lender that, in the event that it shall receive and retain any payment on
account of any Note in excess of its pro rata portion, according to the
principal amount of the Notes then outstanding, of the payment due all of the
Lenders, whether such payment be voluntary, involuntary or by operation of law,
by application of set-off of any indebtedness or otherwise, then such Lender
shall promptly purchase from the other Lenders, without recourse, for cash and
at face value, ratably in accordance with the principal amount of the Revolving
Credit Notes then outstanding, participation interests in the Notes of the other
Lenders in such an amount that each Lender shall have received payment pro rata
on account of the Revolving Credit Notes in accordance with the unpaid principal
amount thereof then owing to it; provided, that if any such purchase be made by
any Lender and if any such excess payment relating thereto or any part thereof
is thereafter recovered from such Lender, appropriate adjustment in the related
purchase from the other Lenders shall be made by rescission and restoration of
the purchase price as to the portion of such excess payment so recovered. It is
further agreed that, to the extent there is then owing by the Company or any
Guarantor to any Lender indebtedness other than that evidenced by the Notes, to
which such Lender may apply any involuntary payments of indebtedness by the
Company or any Guarantor, including those resulting from exercise of rights of
set-off or similar rights
1999 CREDIT AGREEMENT
-36-
41
or any proceeds resulting from a sale or other disposition of or realization
upon any collateral or security now or hereafter securing indebtedness owing by
the Company or any Guarantor to any Lender other than that evidenced by the
Notes, such Lender shall apply all such involuntary payments first to
obligations of the Company to the Lenders hereunder and under the Notes and then
to such other indebtedness owed to it by the Company or any Guarantor.
ARTICLE IX. YIELD PROTECTION AND CONTINGENCIES
9.1 Additional Costs. (a) In the event that any applicable law, treaty,
rule or regulation (whether domestic or foreign) now or hereafter in effect and
whether or not presently applicable to any Lender or the Agent, or any
interpretation or administration thereof by any governmental authority charged
with the interpretation or administration thereof, or compliance by any Lender
or the Agent with any guideline, request or directive of any such authority
(whether or not having the force of law), shall (a) affect the basis of taxation
of payments to any Lender or the Agent of any amounts payable by the Company
under this Agreement (other than taxes imposed on the overall net income of any
Lender or the Agent, by the jurisdiction, or by any political subdivision or
taxing authority of any such jurisdiction, in which any Lender or the Agent, as
the case may be, has its principal office), or (b) shall impose, modify or deem
applicable any reserve, special deposit or similar requirement against assets
of, deposits with or for the account of, or credit extended by any Lender or the
Agent, or (c) shall impose any other condition with respect to this Agreement,
the Commitments, the Notes or the Loans or any Letter of Credit, and the result
of any of the foregoing is to increase the cost to any Lender or the Agent, as
the case may be, of making, funding or maintaining any Eurodollar Rate Loan or
any Letter of Credit or to reduce the amount of any sum receivable by any Lender
or the Agent, as the case may be, thereon, then the Company shall pay to such
Lender or the Agent, as the case may be, from time to time, upon request by such
Lender (with a copy of such request to be provided to the Agent) or the Agent,
additional amounts sufficient to compensate such Lender or the Agent, as the
case may be, for such increased cost or reduced sum receivable to the extent, in
the case of any Eurodollar Rate Loan, such Lender or the Agent is not
compensated therefor in the computation of the interest rate applicable to such
Eurodollar Rate Loan. A statement as to the amount of such increased cost or
reduced sum receivable, prepared in good faith and in reasonable detail by such
Lender or the Agent, as the case may be, and submitted by such Lender or the
Agent, as the case may be, to the Company, shall be conclusive and binding for
all purposes absent manifest error in computation.
(b) In the event that any applicable law, treaty, rule or regulation
(whether domestic or foreign) now or hereafter in effect and whether or not
presently applicable to any Lender or the Agent, or any interpretation or
administration thereof by any governmental authority charged with the
interpretation or administration thereof, or compliance by any Lender or the
Agent with any guideline, request or directive of any such authority (whether or
not having the force of law), including any risk-based capital guidelines,
affects or would affect the amount of capital required or expected to be
maintained by such Lender or the Agent (or any corporation controlling such
Lender or the Agent) and such Lender or the Agent, as the case may be,
determines that the amount of such capital is increased by or based upon the
existence of such Lender's or the Agent's obligations hereunder and such
increase has the effect of reducing the rate of return on such Lender's or the
Agent's (or such controlling corporation's) capital as a consequence of its
obligations hereunder to a level below that which such Lender or the Agent (or
such controlling corporation) could have achieved but for such circumstances
(taking into consideration its policies with respect to capital adequacy) by an
amount deemed by such Lender or the Agent to be material, then the Company shall
pay to such
1999 CREDIT AGREEMENT
-37-
42
Lender or the Agent, as the case may be, from time to time, upon request by such
Lender (with a copy of such request to be provided to the Agent) or the Agent,
additional amounts sufficient to compensate such Lender or the Agent (or such
controlling corporation) for any increase in the amount of capital and reduced
rate of return which such Lender or the Agent reasonably determines to be
allocable to the existence of such Lender's or the Agent's obligations
hereunder. A statement as to the amount of such compensation, prepared in good
faith and in reasonable detail by such Lender or the Agent, as the case may be,
and submitted by such Lender or the Agent to the Company, shall be conclusive
and binding for all purposes absent manifest error in computation.
9.2 Illegality and Impossibility. In the event that any applicable law,
treaty, rule or regulation (whether domestic or foreign) now or hereafter in
effect and whether or not presently applicable to any Lender, or any
interpretation or administration thereof by any governmental authority charged
with the interpretation or administration thereof, or compliance by any Lender
with any guideline, request or directive of such authority (whether or not
having the force of law), including without limitation exchange controls, shall
make it unlawful or impossible for any Lender to maintain any Eurodollar Rate
Loan under this Agreement, the Company shall upon receipt of notice thereof from
such Lender, repay in full the then outstanding principal amount of each
Eurodollar Rate Loan so affected, together with all accrued interest thereon to
the date of payment and all amounts owing to such Lender under Section 9.3, (a)
on the last day of the then-current Interest Period applicable to such Loan if
such Lender may lawfully continue to maintain such Loan to such day, or (b)
immediately if such Lender may not continue to maintain such Loan to such day.
9.3 Funding Loss Indemnification. If the Company makes any payment of
principal with respect to any Eurodollar Rate Loan on any other date than the
last day of an Interest Period applicable thereto (whether pursuant to Section
7.2 or otherwise), or if the Company fails to borrow any Eurodollar Rate Loan
after notice has been given to the Lender or if the Company fails to make any
payment of principal or interest in respect of a Eurodollar Rate Loan when due,
the Company shall, in addition to any other amounts that may be payable
hereunder reimburse each Lender (or any existing or prospective participant in
the related Loan) on demand for any resulting loss or expense incurred by each
such Lender (or such participant), including without limitation any loss
incurred in obtaining, liquidating or employing deposits from third parties,
whether or not such Lender shall have funded or committed to fund such Loan. A
statement as to the amount of such loss or expense, prepared in good faith and
in reasonable detail by such Lender and submitted by such Lender to the Company,
shall be conclusive and binding for all purposes absent manifest error in
computation. Calculation of all amounts payable to such Lender under this
Section 9.3 shall be made as though such Lender shall have actually funded or
committed to fund its relevant Eurodollar Rate Loan through the purchase of an
underlying deposit in an amount equal to the amount of such Eurodollar Rate Loan
and having a maturity comparable to the related Interest Period and through the
transfer of such deposit from an offshore office of such Lender to a domestic
office of such Lender in the United States of America; provided, however, that
such Lender may fund any Eurodollar Rate Loan in any manner it sees fit and the
foregoing assumption shall be used only for the purpose of calculation of
amounts payable under this Section 9.3.
9.4 HLT. If, after the Effective Date, the Agent determines that, or
the Agent is advised by the Majority Lenders that the Majority Lenders have
received notice from any governmental authority, central bank or comparable
agent that, the Loans or the Commitments are classified as a "highly leveraged
transaction" (an "HLT Classification"), the Agent shall promptly give notice of
such HLT Classification to
1999 CREDIT AGREEMENT
-38-
43
the Company and the other Lenders. During the period of such HLT Classification,
the applicable interest rate shall be increased by one percent (1%) in the case
of all Eurodollar Rate Loans, Prime Rate Loans, and Swing Line Loans.
ARTICLE X. MISCELLANEOUS
10.1 Amendments, Etc. (a) This Agreement and the Guaranties may be
amended from time to time and any provision hereof may be waived by an
instrument in writing executed by the Company, the Majority Lenders and the
Agent, provided that, except by an instrument in writing executed by the
Company, all of the Lenders and the Agent, no such amendment or waiver shall:
1999 CREDIT AGREEMENT
-39-
44
(i) Authorize or permit the extension of the time or times
of payment of the principal of, or interest on, the
Notes or any of them, or any Letter of Credit
reimbursement obligation, or the reduction in the
principal amount thereof or the rate of interest
thereon, or the rate or time for payment of any fees or
any other modification in the terms of the payment of
the principal of or interest on the Notes or any fees;
or
(ii) Amend or change the respective amounts of the Lenders'
Commitments set forth in Section 2.1, reduce the
percentage of the aggregate principal amount of the
Loans outstanding required by the provisions of this
Section for the taking of any action under this
Section, or amend or change Section 2.8, the definition
of Majority Lenders, or this Section 10.1; or
(iii) Permit the termination of the obligations of any
Lender, provided that upon any such termination, (A)
the Company shall have the option to select a lender to
replace such terminating Lender and assume the rights
and obligations of such Lender hereunder, provided that
such replacement Lender is acceptable to each
non-terminating Lender, and (B) in the event that such
terminating Lender is not so replaced, each
non-terminating Lender shall be entitled, but shall not
be obligated, to increase its Commitment by an amount
equal to that amount of the terminating Lender's
Commitment bearing the same ratio to such terminating
Lender's Commitment as such non-terminating Lender's
Commitment bears to the aggregate Commitment of all
non-terminating Lenders. In the event that any
non-terminating Lender shall not elect to increase its
Commitment as specified in clause (B), each Lender
making such election shall be entitled, but shall not
be obligated, to further increase its Commitment by an
amount equal to that amount of each non-electing
Lender's Commitment bearing the same ratio to such
non-electing Lender's Commitment as such electing
Lender's Commitment bears to the aggregate Commitment
of all electing Lenders. The procedure set forth in the
preceding sentence shall be followed until the entire
Commitment of the terminating Lender is allocated or
until no non-terminating Lender shall desire to further
increase its Commitment; or
(iv) Release any guaranties of the Loans or release all or
any substantial portion of any collateral, if any.
(b) No such amendment or waiver of any provision of this Agreement, nor
consent to any departure by the Company therefrom, shall in any event be
effective unless the same shall be in writing and signed by the Agent and by the
Majority Lenders or the Lenders, as the case may be, and then such amendment,
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which given.
10.2 Notices. (a) Except as otherwise provided in Section 10.2(c), all
notices and other communications hereunder or under the Guaranty shall be in
writing and shall be delivered or sent to the Company, the Guarantors, the Agent
and the Lenders at the respective addresses for notices set forth on the
signatures pages hereof, or to such other address as may be designated by the
Company, any Guarantor, the Agent or any Lender by notice to the other parties
hereto. All notices and other communications shall be
1999 CREDIT AGREEMENT
-1-
45
deemed to have been given at the time of actual delivery thereof to such address
or if sent by the Agent to the Company or to any Guarantor by certified or
registered mail, postage prepaid, to such address, on the fifth day after the
date of mailing, or, if sent by recognized overnight delivery service, prepaid
to such address, on the Business Day following the date of deposit with such
delivery service prior to such services next day delivery deadline, provided,
however, that notices to the Agent or the Lenders shall not be effective until
received.
(b) Notices by the Company to the Agent with respect to terminations or
reductions of the Commitments pursuant to Section 2.4, requests for extensions
pursuant to Section 2.8, requests for Loans pursuant to Section 3.1, and notices
of prepayment pursuant to Section 4.1 shall be irrevocable and binding on the
Company.
(c) Any notice to be given by the Company to the Agent pursuant to
Sections 2.4 or 3.1 and any notice to be given by the Agent hereunder, may be
given by telephone, by telex or by facsimile transmission and must be
immediately confirmed in writing in the manner provided in Section 10.2(a). Any
such notice given by telephone, telex or facsimile transmission shall be deemed
effective upon receipt thereof by the party to whom such notice is given.
10.3 Conduct No Waiver; Remedies Cumulative. No course of dealing on
the part of the Agent or any Lender, nor any delay or failure on the part of the
Agent or any Lender in exercising any right, power or privilege hereunder shall
operate as a waiver of such right, power or privilege or otherwise prejudice the
Agent's or such Lender's rights and remedies hereunder; nor shall any single or
partial exercise thereof preclude any further exercise thereof or the exercise
of any other right, power or privilege. No right or remedy conferred upon or
reserved to the Agent or any Lender under this Agreement, the Notes or any
Guaranty is intended to be exclusive of any other right or remedy, and every
right and remedy shall be cumulative and in addition to every other right or
remedy granted thereunder or now or hereafter existing under any applicable law.
Every right and remedy granted by this Agreement or the Notes or by applicable
law to the Agent or any Lender may be exercised from time to time and as often
as may be deemed expedient by the Agent or any Lender and, unless contrary to
the express provisions of this Agreement or the Notes, irrespective of the
occurrence or continuance of any Event of Default.
10.4 Reliance on and Survival of Various Provisions. All terms,
covenants, agreements, representations and warranties of the Company and the
Subsidiaries made herein or in any certificate or other document delivered
pursuant hereto shall be deemed to be material and to have been relied upon by
the Agent and the Lenders, notwithstanding any investigation heretofore or
hereafter made by any Lender or the Agent on such Lender's behalf, and those
covenants and agreements of the Company set forth in Sections 9.1, 9.2, and 10.5
shall survive the repayment in full of the Loans and the termination of the
Commitments.
10.5 Expenses; Indemnification. (a) The Company agrees to pay, or
reimburse the Agent for the payment of, on demand, (i) the reasonable fees and
expenses of outside legal counsel to the Agent, including without limitation the
fees and expenses of Xxxxxxxxx Xxxxxx PLLC, in connection with the preparation,
execution, delivery and administration of this Agreement, the Notes, the
Guaranties and the consummation of the transactions contemplated hereby, and in
connection with advising the Agent as to its rights and responsibilities with
respect thereto, and in connection with any amendments, waivers or consents in
connection therewith, and (ii) all stamp and other taxes and fees payable or
determined to be payable in connection with the execution, delivery, filing or
recording of this Agreement, the Notes, the Guaranties and
1999 CREDIT AGREEMENT
-2-
46
the consummation of the transactions contemplated hereby, and any and all
liabilities with respect to or resulting from any delay in paying or omitting to
pay such taxes or fees, and (iii) all reasonable costs and expenses of the Agent
and the Lenders (including reasonable fees and expenses of legal counsel and
whether incurred through negotiations, legal proceedings or otherwise) in
connection with any Default or Event of Default or the enforcement of, or the
exercise or preservation of any rights under, this Agreement or the Notes, the
Guaranties or in connection with any financing or restructuring of the credit
arrangements provided under this Agreement, and (iv) all reasonable costs and
expenses of the Agent and the Lenders (including reasonable fees and expenses of
legal counsel) in connection with any action or proceeding relating to a court
order, injunction or other process or decree restraining or seeking to restrain
the Agent from paying any amount under, or otherwise relating in any way to, any
Letter of Credit and any and all costs and expenses which any of them may incur
relative to any payment under any Letter of Credit. The Company indemnifies and
agrees to hold harmless the Agent and the Lenders from and against any and all
liabilities, damages, penalties, suits, costs, and expenses of any kind and
nature (including reasonable attorneys fees and disbursements), imposed on,
incurred by or asserted against any of them in any way relating to or arising
out of this Agreement, the Notes, the Guaranties and any other document and
agreement executed pursuant hereto (including the administration and enforcement
thereof) or in any way relating to or arising out of any activities of the
Company, including without limitation the Company's acquisition, or attempted
acquisitions, directly or indirectly, in any manner, of a part or all of the
stock (or other equity interest) or assets of any person or the manufacture,
sale, lease, or return or other disposition of any goods by the Company or any
Subsidiary (including, without limitation, latent and other defects, whether or
not discoverable by the Lender or the Company or any Subsidiary, any tort claim
(whether in strict liability or otherwise), and any claim for patent, trademark
or copyright infringement).
(b) The Company indemnifies and agrees to hold harmless the Lenders and
the Agent, and their respective officers, directors, employees and agents,
harmless from and against any and all claims, damages, losses, liabilities,
costs or expenses of any kind or nature whatsoever which the Lenders or the
Agent or any such person may incur or which may be claimed against any of them
by reason of or in connection with any Letter of Credit, and neither any Lender
nor the Agent or any of their respective officers, directors, employees or
agents shall be liable or responsible for: (i) the use which may be made of any
Letter of Credit or for any acts or omissions of any beneficiary in connection
therewith; (ii) the validity, sufficiency or genuineness of documents or of any
endorsement thereon, even if such documents should in fact prove to be in any or
all respects invalid, insufficient, fraudulent or forged; (iii) payment by the
Agent to the beneficiary under any Letter of Credit against presentation of
documents which do not comply with the terms of any Letter of Credit, including
failure of any documents to bear any reference or adequate reference to such
Letter of Credit; (iv) any error, omission, interruption or delay in
transmission, dispatch or delivery of any message or advice, however
transmitted, in connection with any Letter of Credit; or (v) any other event or
circumstance whatsoever arising in connection with any Letter of Credit;
provided, however, that the Company shall not be required to indemnify the
Lenders and the Agent and such other persons, and the Agent shall be liable to
the Company to the extent, but only to the extent, of any direct, as opposed to
consequential or incidental, damages suffered by the Company which were caused
by (A) the Agent's wrongful dishonor of any Letter of Credit after the
presentation to it by the beneficiary thereunder of a draft or other demand for
payment and other documentation strictly complying with the terms and conditions
of such Letter of Credit, or (B) the payment by the Agent to the beneficiary
under any Letter of Credit against presentation of documents which do not comply
with the terms of the Letter of Credit to the extent, but only to the extent,
that such payment constitutes gross negligence or willful misconduct of the
Agent. It is understood that in making any payment under a Letter of Credit, the
Agent will rely on documents presented to it under such Letter of Credit as to
1999 CREDIT AGREEMENT
-3-
47
any and all matters set forth therein without further investigation and
regardless of any notice or information to the contrary, and such reliance and
payment against documents presented under a Letter of Credit substantially
complying with the terms thereof shall not be deemed gross negligence or willful
misconduct of the Agent in connection with such payment. It is further
acknowledged and agreed that the Company may have rights against the beneficiary
or others in connection with any Letter of Credit with respect to which the
Lenders are alleged to be liable and it shall be a precondition of the assertion
of any liability of the Lenders under this Section that the Company shall first
have exhausted all remedies in respect of the alleged loss against such
beneficiary and any other parties obligated or liable in connection with such
Letter of Credit and any related transactions.
10.6 Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns, provided that the Company may not, without the prior consent of the
Lenders, assign its rights or obligations hereunder or under the Notes or any
Guaranty and the Lenders shall not be obligated to make any Loan hereunder to
any entity other than the Company.
10.7 Participations and Assignments. (a) Any Lender may sell
participations to one or more banks or other entities in or to all or a portion
of its rights and obligations under this Agreement (including, without
limitation, all or a portion of its Commitment, the Notes held by it, and its
interest in the Guaranties) provided that (i) such Lender's obligations under
this Agreement (including without limitation, its Commitment to lend to the
Company hereunder) shall remain unchanged, (ii) such Lender shall remain solely
responsible to the other parties hereto for the performance of such obligations,
(iii) such Lender shall remain the holder of its Note for all purposes under
this Agreement, and (iv) the Company, the Agent and the other Lenders shall
continue to deal solely and directly with such Lender in connection with such
Lender's rights and obligations under this Agreement.
(b) (i) Any Lender may assign, transfer and negotiate all or a portion
of its Commitment, the Notes held by it, and its interest in the Guaranties to
any affiliate of such Lender, to any other Lender, or, following the occurrence
and during the continuance of a Default, to any financial institution or
institutions, without the consent of any other Lender, the Agent or the Company
and (ii) any Lender may otherwise so assign, transfer and negotiate such
Lender's interest, with the consent of the Company, which consent shall not be
unreasonably withheld, and the Agent to any financial institution or
institutions, provided, however, that each such assignment of less than all of a
Lender's commitment shall be in the minimum amount of $10,000,000 and integral
multiples of $5,000,000. In the case of any assignment, transfer or negotiation,
the assignee, transferee or recipient shall have, to the extent of such
assignment, transfer or negotiation, the same rights, benefits and obligations
as if it were a Lender with respect to such Commitment or Notes, including,
without limitation, the right to approve or disapprove actions which, in
accordance with the terms hereof, require the approval of Majority Lenders and
the obligation to fund Loans and Letter of Credit Advances pursuant to Article
III. The parties to each such assignment shall execute and deliver to the Agent
an Acceptance and Assignment, together with any Note or Notes subject to such
assignment. The assigning Lender shall pay to the Agent an assignment fee in the
amount of $3,500 for administration of each assignment, transfer or negotiation
of its Commitment and Notes.
10.8 Counterparts. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one and the same
instrument and any of the parties hereto may execute this Agreement by signing
any such counterpart.
1999 CREDIT AGREEMENT
-4-
48
10.9 Governing Law. This Agreement is a contract made under, and shall
be governed by and construed in accordance with, the laws of the State of
Michigan applicable to contracts made and to be performed entirely within such
State and without giving effect to choice of law principles of such State. The
Company further agrees that any legal action or proceeding with respect to this
Agreement or the Notes or the transactions contemplated hereby may be brought in
any court of the State of Michigan, or in any court of the United States of
America sitting in Michigan, and the Company hereby submits to and accepts
generally and unconditionally the jurisdiction of those courts with respect to
its person and property.
10.10 Table of Contents and Headings. The table of contents and the
headings of the various subdivisions hereof are for the convenience of reference
only and shall in no way modify any of the terms or provisions hereof.
10.11 Construction of Certain Provisions. If any provision of this
Agreement refers to any action to be taken by any person, or which such person
is prohibited from taking, such provision shall be applicable whether such
action is taken directly or indirectly by such person, whether or not expressly
specified in such provision.
10.12 Integration and Severability. This Agreement embodies the entire
agreement and understanding between the Company, the Agent and the Lenders, and
supersedes all prior agreements and understandings, relating to the subject
matter hereof. In case any one or more of the obligations of the Company under
this Agreement or any Note shall be invalid, illegal or unenforceable in any
jurisdiction, the validity, legality and enforceability of the remaining
obligations of the Company shall not in any way be affected or impaired thereby,
and such invalidity, illegality or enforceability in one jurisdiction shall not
affect the validity, legality or enforceability of the obligations of the
Company under this Agreement or the Notes in any other jurisdiction.
10.13 Interest Rate Limitation. Notwithstanding any provisions of this
Agreement, the Notes or any other documents, in no event shall the amount of
interest paid or agreed to be paid by the Company exceed an amount computed at
the highest rate of interest permissible under applicable law. If, from any
circumstances whatsoever, fulfillment of any provision of this Agreement or the
Notes at the time performance of such provision shall be due, shall involve
exceeding the interest rate limitation validly prescribed by law which a court
of competent jurisdiction may deem applicable hereto, then, ipso facto, the
obligations to be fulfilled shall be reduced to an amount computed at the
highest rate of interest permissible under applicable law, and if for any reason
whatsoever the Lender shall ever receive as interest an amount which would be
deemed unlawful under such applicable law such interest shall be automatically
applied to the payment of principal of the Loans outstanding hereunder (whether
or not then due and payable) and not to the payment of interest, or shall be
refunded to the Company if such principal and all other obligations of the
Company to the Lenders have been paid in full.
10.14 Execution by Guarantors. Each of the Guarantors is joining in the
execution of this Agreement for the purpose of acknowledging and agreeing to all
of the terms hereof and the conditions and obligations to be observed or
performed by such Guarantor hereunder.
10.15 Foreign Lenders. Each Lender organized under the laws of a
jurisdiction outside the United States shall, from time to time if requested in
writing by the Agent (but only so long thereafter as such Lender remains
lawfully able to do so), provide the Agent and the Company with Internal Revenue
Service form
1999 CREDIT AGREEMENT
-5-
49
1001 or 4224, as appropriate, or any successor form prescribed by the Internal
Revenue Service, certifying that such Lender is entitled to benefits under an
income tax treaty to which the United States is a party that reduces the rate of
withholding tax on payments under this Agreement or the Notes certifying that
the income receivable pursuant to this Agreement or the Notes is effectively
connected with the conduct of a trade or business in the United States. If the
form provided by a Lender at the time such Lender first becomes a party to this
Agreement indicates a United States interest withholding tax rate in excess of
zero, withholding tax at such rate shall be considered excluded from taxes. If
any form or document referred to in this Section 10.15 requires the disclosure
of information, other than information necessary to compute the tax payable and
information required on the date hereof by Internal Revenue Service form 1001 or
4224, that the Lender reasonably considers to be confidential, the Lender shall
give notice thereof to the Company and shall not be obligated to include in such
form or document such confidential information.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered as of September 23, 1999, which shall be the
Effective Date of this Agreement, notwithstanding the day and year first above
written or the date this Agreement is executed by any of the parties hereto, and
which shall be the date inserted by the Agent on which the Agent has executed
counterparts of this Agreement which have been executed by each of the Lenders,
the Company, and the Guarantors.
Address for Notices: XXXXXXX COMPANY
000 Xxxxx Xxxxxx
Xxxxxxx, XX 00000
Attn: Treasurer By:
Telephone:(000) 000-0000 ----------------------
Facsimile:(000) 000-0000 Xxxxx X. Xxxxxxxx
Treasurer
Address for Notices: X. XXXXXXX COMPANY
000 Xxxxx Xxxxxx
Xxxxxxx, XX 00000
Attn: Treasurer By:
Telephone:(000) 000-0000 ----------------------
Facsimile:(000) 000-0000 Xxxxx X. Xxxxxxxx
Treasurer
Address for Notices: XXXXXXX COMPANY OF SOUTH CAROLINA, INC.
000 Xxxxx Xxxxxx
Xxxxxxx, XX 00000
Attn: Treasurer By:
Telephone:(000) 000-0000 ----------------------
Facsimile:(000) 000-0000 Xxxxx X. Xxxxxxxx
Treasurer
1999 CREDIT AGREEMENT
-6-
50
Address for Notices: BANK ONE, MICHIGAN, as
000 Xxxxxxxx Xxxxxx Agent and Individually
Xxxxxxx, XX 00000 as a Lender
Attn: Manager,
Commercial Loans
By:
----------------------
With a Copy to: Xxxxxxx X. Xxxxxxx
Xxxxxxx X. Xxxxxxx Managing Director
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Address for Notices: COMERICA BANK
000 Xxxxxxxx Xxx.
Xxxxxxx, XX 00000
Attn: Xxxxxx X. Xxxxxxxxxxx By:
Telephone: (000) 000-0000 ----------------------
Telecopy: (000) 000-0000 Xxxxxx X. Xxxxxxxxxxx
Vice President
Address for Notices: OLD KENT BANK
000 Xxxx Xxxxxx, XX
Xxxxx Xxxxxx, XX 00000-0000
Attn: Xxxx X. Xxxx By:
Telephone: (000) 000-0000 ----------------------
Telecopy: (000) 000-0000 Xxxx X. Xxxx
Vice President
Address for Notices: XXXXXX TRUST AND SAVINGS BANK
000 Xxxx Xxxxxx Xx., 00xx Xx. Xxxx
Xxxxxxx, XX 00000
Attn: Xxxx X. Xxxxxx By:
Telephone: (000) 000-0000 ----------------------
Facsimile: (000) 000-0000 Xxxx X. Xxxxxx
Vice President
Address for Notices: NATIONAL CITY BANK
0000 Xxxxx Xxxxx, X-X00-0X
Xxxxxxxxxx, XX 00000
Attn: Xxxxxxx Xxxxxxxx By:
Telephone: (000) 000-0000 ----------------------
Facsimile: (000) 000-0000 Xxxxxxx Xxxxxxxx
Vice President
1999 CREDIT AGREEMENT
-7-
51
Address for Notices: THE NORTHERN TRUST COMPANY
00 X. XxXxxxx Xx.
Xxxxxxx, XX 00000
Attn: Xxxxx X. Xxxxx By:
Telephone: (000) 000-0000 --------------------------
Facsimile: (000) 000-0000 Xxxxx X. Xxxxx
Vice President
DETROIT 7-3265 454079-7
1999 CREDIT AGREEMENT
-8-
