1
EXHIBIT 2
$76,000,000
TERM LOAN AND SECURITY AGREEMENT
Dated as of February 6, 1998
Among
THE FINANCIAL INSTITUTIONS NAMED HEREIN
as the Lenders
and
BANKAMERICA BUSINESS CREDIT, INC.
as the Agent
and
LDM TECHNOLOGIES, INC.
as the Borrower
2
TABLE OF CONTENTS
ARTICLE 1 INTERPRETATION OF THIS AGREEMENT...................................1
1.1 Definitions............................................................1
1.2 Accounting Terms......................................................21
1.3 Interpretive Provisions...............................................21
ARTICLE 2 LOANS ........................................................... 22
2.1 Total Facility........................................................22
2.2 CAPEX Loans...........................................................22
(a) Amounts..........................................................22
(b) Procedure for Borrowing..........................................23
(c) Reliance upon Authority..........................................23
(d) No Liability.....................................................24
(e) Notice Irrevocable...............................................24
(f) Making of CAPEX Loans............................................24
(g) Lenders' Failure to Perform......................................25
(i) Notation.........................................................25
2.3 Term Loans............................................................26
(a) Amount of Term Loans.............................................26
(b) Making of Term Loans.............................................26
(c) Term Loan Notes..................................................26
(d) Notation and Endorsement.........................................26
ARTICLE 3 INTEREST AND FEES.................................................27
3.1 Interest..............................................................27
3.2 Conversion and Continuation Elections.................................27
3.3 Maximum Interest Rate.................................................29
3.4 Closing Fee...........................................................29
3.5 Unused Line Fee.......................................................29
3.6 [RESERVED]............................................................29
3.7 [RESERVED]............................................................29
ARTICLE 4 PAYMENTS AND PREPAYMENTS .........................................29
4.1 [RESERVED]............................................................29
4.2 Termination of Facility...............................................30
4.3 [RESERVED]............................................................30
4.4 Voluntary Prepayments of the Loans....................................30
4.5 Mandatory Prepayments of the Term Loans...............................30
4.6 Payments by the Borrower..............................................31
4.7 [RESERVED]............................................................31
4.8 Apportionment, Application and Reversal of Payments...................31
4.9 Indemnity for Returned Payments.......................................32
4.10 Agent's and Lenders' Books and Records; Monthly Statements............32
ARTICLE 5 TAXES, YIELD PROTECTION AND ILLEGALITY............................33
5.1 Taxes.................................................................33
5.2 Illegality............................................................34
5.3 Increased Costs and Reduction of Return...............................34
5.4 Funding Losses........................................................35
5.5 Inability to Determine Rates..........................................35
5.6 Certificates of Lenders...............................................35
5.7 Survival..............................................................35
ARTICLE 6 COLLATERAL........................................................36
6.1 Grant of Security Interest............................................36
6.2 Perfection and Protection of Security Interest........................37
6.3 Location of Collateral................................................38
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6.4 Title to, Liens on, and Sale and Use of Collateral....................39
6.5 Appraisals............................................................39
6.6 Access and Examination; Confidentiality...............................39
6.7 Collateral Reporting..................................................40
6.8 Accounts..............................................................40
6.9 Collection of Accounts; Payments......................................42
6.10 Inventory; Perpetual Inventory........................................43
6.11 Equipment.............................................................43
6.12 Assigned Contracts....................................................44
6.13 Documents, Instruments, and Chattel Paper.............................45
6.14 Right to Cure.........................................................45
6.15 Power of Attorney.....................................................45
6.16 The Agent's and Lenders' Rights, Duties and Liabilities...............46
ARTICLE 7 BOOKS AND RECORDS; FINANCIAL INFORMATION; NOTICES ................47
7.1 Books and Records.....................................................47
7.2 Financial Information.................................................47
7.3 Notices to the Lenders................................................49
ARTICLE 8 GENERAL WARRANTIES AND REPRESENTATIONS............................52
8.1 Authorization, Validity, and Enforceability of this Agreement
and the Loan Documents................................................52
8.2 Validity and Priority of Security Interest............................52
8.3 Organization and Qualification........................................53
8.4 Corporate Name; Prior Transactions....................................53
8.5 Subsidiaries and Affiliates...........................................53
8.6 Financial Statements and Projections..................................53
8.7 Capitalization........................................................54
8.8 Solvency..............................................................54
8.9 Debt..................................................................54
8.10 Distributions.........................................................54
8.11 Title to Property.....................................................54
8.12 Real Estate; Leases...................................................54
8.13 Proprietary Rights Collateral.........................................54
8.14 Trade Names and Terms of Sale.........................................55
8.15 Litigation............................................................55
8.16 Restrictive Agreements................................................55
8.17 Labor Disputes........................................................55
8.18 Environmental Laws....................................................55
8.19 No Violation of Law...................................................57
8.20 No Default............................................................57
8.21 ERISA Compliance......................................................57
8.22 Taxes.................................................................57
8.23 Regulated Entities....................................................57
8.24 Use of Proceeds; Margin Regulations...................................58
8.25 Copyrights, Patents, Trademarks and Licenses, etc.....................58
8.26 No Material Adverse Change............................................58
8.27 Full Disclosure.......................................................58
8.28 Material Agreements...................................................58
8.29 Bank Accounts.........................................................59
8.30 Governmental Authorization............................................59
8.31 Indenture.............................................................59
8.32 Subordination Provisions..............................................59
8.33 Acquisition Agreement.................................................59
8.34 Bidding Status........................................................59
8.35 Merger................................................................60
8.36 Computer Systems......................................................60
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ARTICLE 9 AFFIRMATIVE AND NEGATIVE COVENANTS................................60
9.1 Taxes and Other Obligations...........................................60
9.2 Corporate Existence; Good Standing....................................60
9.3 Compliance with Law and Agreements; Maintenance of Licenses...........61
9.4 Maintenance of Property...............................................61
9.5 Insurance.............................................................61
9.6 Condemnation..........................................................62
9.7 Environmental Laws....................................................63
9.8 Compliance with ERISA.................................................63
9.9 Mergers, Consolidations or Sales......................................63
9.10 Distributions; Capital Change; Restricted Investments.................64
9.11 Transactions Affecting Collateral or Obligations......................64
9.12 Guaranties............................................................64
9.13 Debt..................................................................64
9.14 Prepayments; Amendments...............................................65
9.15 Transactions with Affiliates..........................................65
9.16 Investment Banking and Finder's Fees..................................66
9.17 Computer Systems......................................................66
9.18 Business Conducted....................................................66
9.19 Liens.................................................................66
9.20 Sale and Leaseback Transactions.......................................66
9.22 Fiscal Year...........................................................67
9.23 Capital Expenditures..................................................67
9.24 Operating Lease Obligations...........................................68
9.25 Fixed Charge Coverage Ratio...........................................68
9.26 Net LoSection.........................................................68
9.27 Use of Proceeds.......................................................68
9.28 Further Assurances....................................................68
9.29 Canadian Tax Matters..................................................68
ARTICLE 10 CONDITIONS OF LENDING ...........................................69
10.1 Conditions Precedent to Making of Loans on the Closing Date...........69
10.2 Conditions Precedent to Each Loan.....................................72
ARTICLE 11 DEFAULT; REMEDIES................................................73
11.1 Events of Default.....................................................73
11.2 Remedies..............................................................75
ARTICLE 12 TERM AND TERMINATION.............................................77
12.1 Term and Termination..................................................77
ARTICLE 13 AMENDMENTS; WAIVER; PARTICIPATIONS; ASSIGNMENTS; SUCCESSORS..... 77
13.1 No Waivers Cumulative Remedies........................................77
13.2 Amendments and Waivers................................................77
13.3 Assignments; Participations...........................................78
ARTICLE 14 THE AGENT .......................................................80
14.1 Appointment and Authorization.........................................80
14.2 Delegation of Duties..................................................81
14.3 Liability of Agent....................................................81
14.4 Reliance by Agent.....................................................81
14.5 Notice of Default.....................................................82
14.6 Credit Decision.......................................................82
14.7 Indemnification.......................................................82
14.8 Agent in Individual Capacity..........................................83
14.9 Successor Agent.......................................................83
14.10 Withholding Tax......................................................83
14.11 [RESERVED]...........................................................85
14.12 Collateral Matters...................................................85
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14.13 Restrictions on Actions by Lenders; Sharing of Payments..............86
14.14 Agency for Perfection................................................86
14.15 Payments by Agent to Lenders.........................................87
14.16 Concerning the Collateral and the Related Loan Documents.............87
14.17 Field Audit and Examination Reports; Disclaimer by Lenders...........87
ARTICLE 15 MISCELLANEOUS ...................................................88
15.1 Cumulative Remedies; No Prior Recourse to Collateral.................88
15.2 Severability.........................................................88
15.3 Governing Law; Choice of Forum; Service of Process; Jury
Trial Waiver.........................................................88
15.4 Waiver of Jury Trial.................................................90
15.5 Survival of Representations and Warranties...........................91
15.6 Other Security and Guaranties........................................91
15.7 Fees and Expenses....................................................91
15.8 Notices..............................................................92
15.9 Waiver of Notices....................................................93
15.10 Binding Effect.......................................................93
15.11 Indemnity of the Agent and the Lenders by the Borrower...............93
15.12 Final Agreement......................................................94
15.13 Counterparts.........................................................94
15.14 Captions.............................................................94
15.15 Right of Setoff......................................................94
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SCHEDULES
Schedule 6.3 Chief Executive Office Location:
Records Locations; Collateral
Locations
Schedule 8.3 Foreign Qualification Locations
Schedule 8.4 Prior Names of Borrower
Schedule 8.5 Subsidiaries and Affiliates
Schedule 8.9 Existing Debt
Schedule 8.12 Real Estate
Schedule 8.13 Proprietary Rights
Schedule 8.14 Trade Names
Schedule 8.15 Litigation
Schedule 8.17 Labor Disputes
Schedule 8.18 Environmental Matters
Schedule 8.24 Sources and Uses
Schedule 8.25 Intellectual Property Disputes
Schedule 8.28 Material Agreements
Schedule 8.29 Bank Accounts
Schedule 9.19 Existing Liens
EXHIBITS
Exhibit A-1 Form of Term Loan Note
Exhibit A-2 Form of CAPEX Loan Note
Exhibit B Form of Notice of Borrowing
Exhibit C Form of Conversion/Continuation
Exhibit D Pro Forma Balance Sheet
as of the Closing Date
Exhibit E Form of Compliance Certificate
Exhibit F Form of Assignment and Acceptance
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TERM LOAN AND SECURITY AGREEMENT
Term Loan and Security Agreement, dated as of February 6, 1998, among
the financial institutions listed on the signature pages hereof (such financial
institutions, together with their respective successors and assigns, are
referred to hereinafter each individually as a "Lender" and collectively as the
"Lenders"), BankAmerica Business Credit, Inc., a Delaware corporation, as agent
for the Lenders (in its capacity as agent, the "Agent"), and LDM Technologies,
Inc., a Michigan corporation, with offices at 0000 Xxxxxxxxx Xxxxx Xxxxx,
Xxxxxxx Xxxxx, Xxxxxxxx 00000 (the "Borrower").
W I T N E S S E T H:
WHEREAS, the Borrower has requested the Lenders to make available to
the Borrower a capital expenditure line of credit for loans in an amount not to
exceed $10,000,000 and a term line of credit in an amount not to exceed
$66,000,000 and which extensions of credit the Borrower will use to finance, in
part, the Acquisition, for its general business purposes and to finance, in
part, capital expenditures;
WHEREAS, the Lenders have agreed to make available to the Borrower a
capital expenditure credit facility and a term loan facility upon the terms and
conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the mutual conditions and
agreements set forth in this Agreement, and for good and valuable consideration,
the receipt of which is hereby acknowledged, the Lenders, the Agent, and the
Borrower hereby agree as follows.
ARTICLE 1
INTERPRETATION OF THIS AGREEMENT
1.1 Definitions. As used herein:
"Account Debtor" means each Person obligated in any way on or
in connection with an Account.
"Accounts" means all of the Borrower's and LDM Canada's now
owned or hereafter acquired or arising accounts, and any other rights to payment
for the sale or lease of goods or rendition of services, whether or not they
have been earned by performance.
"Acquisition" means the acquisition by the Borrower of all of
the capital stock of Huron and substantially all of the assets of Tadim pursuant
to the Acquisition Agreement.
"Acquisition Agreement" means that certain Stock and Asset
Purchase
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Agreement, dated as of December 23, 1997 among the Borrower and the Sellers, as
the same has been amended by (i) that certain First Amendment to Stock and Asset
Purchase Agreement, dated as of January 23, 1998, (ii) that certain Second
Amendment to Stock and Asset Purchase Agreement, dated as of January 30, 1998,
(iii) that certain Third Amendment to Stock and Asset Purchase Agreement, dated
as of February 2, 1998, and (iv) that certain Fourth Amendment to Stock and
Asset Purchase Agreement, dated as of February 6, 1998, in each case among the
Borrower and the Sellers.
"Adjusted Net Earnings from Operations" means, with respect to
any fiscal period of the Borrower, the Borrower's consolidated net income
(excluding Como) after provision for income taxes for such fiscal period, as
determined in accordance with GAAP and reported on the Financial Statements for
such period, less any and all of the following included in such net income: (a)
gain or loss arising from the sale of any capital assets; (b) gain arising from
any write-up in the book value of any asset; (c) earnings of any corporation,
substantially all the assets of which have been acquired by the Borrower or any
Subsidiary in any manner, to the extent realized by such other corporation prior
to the date of acquisition; (d) earnings of any business entity in which the
Borrower or any Subsidiary has an ownership interest unless (and only to the
extent) such earnings shall actually have been received by the Borrower or any
Subsidiary in the form of cash distributions; (e) earnings of any Person to
which assets of the Borrower or any Subsidiary shall have been sold, transferred
or disposed of, or into which the Borrower shall have been merged, or which has
been a party with the Borrower or any Subsidiary to any consolidation or other
form of reorganization, prior to the date of such transaction; (f) gain arising
from the acquisition of debt or equity securities of the Borrower or any
Subsidiary or from cancellation or forgiveness of Debt; and (g) gain arising
from extraordinary items, as determined in accordance with GAAP, or from any
other non-recurring transaction.
"Affiliate" means, as to any Person, any other Person which,
directly or indirectly, is in control of, is controlled by, or is under common
control with, such Person. A Person shall be deemed to control another Person if
the controlling Person possesses, directly or indirectly, the power to direct or
cause the direction of the management and policies of the other Person, whether
through the ownership of voting securities, by contract, or otherwise.
"Agent" means BankAmerica Business Credit, Inc., solely in its
capacity as agent for the Lenders, and shall include any successor agent.
"Agent's Liens" means the Liens granted to the Agent, for the
ratable benefit of the Lenders, BABC, and Agent pursuant to this Agreement and
the other Loan Documents.
"Agent-Related Persons" means the Agent and any successor
agent, together with their respective Affiliates, and the officers, directors,
employees, agents and attorneys-in-fact of such Persons and Affiliates.
"Agreement" means this Term Loan and Security Agreement.
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"Anniversary Date" means each anniversary of the Closing Date.
"Applicable Margins" shall mean (i) .50% per annum with
respect to Base Rate Loans and (ii) 2.25% per annum with respect to LIBOR Rate
Loans.
"Assigned Contracts" means, collectively, all of the
Borrower's and LDM Canada's rights and remedies under, and all moneys and claims
for money due or to become due to the Borrower or LDM Canada under any contract,
and any and all amendments, supplements, extensions, and renewals thereof
including, without limitation, all rights and claims of the Borrower or LDM
Canada now or hereafter existing: (i) under any insurance (other then key-man
life insurance on which the Borrower is the beneficiary), indemnities,
warranties, and guarantees provided for or arising out of or in connection with
any of the foregoing agreements; (ii) for any damages arising out of or for
breach or default under or in connection with any of the foregoing contracts ;
(iii) to all other amounts from time to time paid or payable under or in
connection with any of the foregoing agreements; or (iv) to exercise or enforce
any and all covenants, remedies, powers and privileges thereunder.
"Assignee" has the meaning specified in Section 13.3(a).
"Assignment and Acceptance" has the meaning specified in
Section 13.3(a).
"Attorney Costs" means and includes all reasonable fees,
expenses and disbursements of any law firm or other external counsel engaged by
the Agent, the allocated cost of internal legal services of the Agent and all
expenses and disbursements of internal counsel of the Agent.
"BABC" means BankAmerica Business Credit, Inc.
"Bank of America" means Bank of America National Trust and
Savings Association, a national banking association, or any successor entity
thereto.
"Bankruptcy Code" means Title 11 of the United States Code (11
U.S.C.Section. 101 et seq.).
"Base Rate" means, for any day, the higher of: (a) The rate of
interest in effect for such day as publicly announced from time to time by Bank
of America in San Francisco, California, as its "reference rate" (the "reference
rate" being a rate set by Bank of America based upon various factors including
Bank of America's costs and desired return, general economic conditions and
other factors, and is used as a reference point for pricing some loans, which
may be priced at, above, or below such announced rate), or (b) one-half percent
(0.50%) per annum above the latest Federal Funds Rate. Any change in the
reference rate announced by Bank of America shall take effect at the opening of
business on the day specified in the public announcement of such change. Each
Interest Rate based upon the Base Rate shall be adjusted simultaneously with any
change in the Base Rate.
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"Base Rate Loans" means, collectively, the Base Rate CAPEX
Loans and the Base Rate Term Loans.
"Base Rate CAPEX Loan" means a CAPEX Loan during any period in
which it bears interest at the Base Rate.
"Base Rate Term Loan" means any portion of a Term Loan during
any period in which such portion bears interest at the Base Rate.
"Borrower" has the meaning specified in the introductory
paragraph hereof.
"Borrowing" means a borrowing hereunder consisting of CAPEX
Loans or Term Loans made on the same day by the Lenders to the Borrower.
"Business Day" means (a) any day that is not a Saturday,
Sunday, or a day on which banks in Chicago, Illinois or San Francisco,
California, are required or permitted to be closed, and (b) with respect to all
notices, determinations, fundings and payments in connection with the LIBOR Rate
or LIBOR Rate Loans, any day that is a Business Day pursuant to clause (a) above
and that is also a day on which trading is carried on by and between banks in
the London interbank market.
"CAPEX Loan Availability" shall mean an amount equal to the
Maximum CAPEX Amount less the aggregate principal amount of CAPEX Loans made on
or prior to the date of determination.
"CAPEX Loan Note" has the meaning specified in Section 2.2.
"CAPEX Loans" has the meaning specified in Section 2.2.
"Capital Adequacy Regulation" means any guideline, request or
directive of any central bank or other Governmental Authority, or any other law,
rule or regulation, whether or not having the force of law, in each case,
regarding capital adequacy of any bank or of any corporation controlling a bank.
"Capital Expenditures" means, all payments due (whether or not
paid) during a Fiscal Year in respect of the cost of any fixed asset or
improvement, or replacement, substitution, or addition thereto, which has a
useful life of more than one year, including, without limitation, those costs
arising in connection with the direct or indirect acquisition of such asset by
way of increased product or service charges or offset items or in connection
with a Capital Lease.
"Capital Lease" means any lease of property by the Borrower or
any Subsidiary which, in accordance with GAAP, is or should be capitalized on
the Borrower's consolidated balance sheet or for which the amount of the asset
and liability thereunder, as if so capitalized, should be disclosed in a
footnote to such balance sheet.
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"Change of Control" means a "change of control" as defined in
the Indenture as in effect on the date hereof.
"Closing Date" means the date of this Agreement.
"Closing Date Intercompany Note" means the intercompany note
issued by LDM Canada to the Borrower, dated January 22, 1997, in the aggregate
principal amount of $16,000,000.
"Closing Fee" has the meaning specified in Section 3.4.
"Code" means the Internal Revenue Code of 1986, as amended
from time to time, and any successor statute, and regulations promulgated
thereunder.
"Collateral" has the meaning specified in Section 6.1.
"Commitment" means, at any time with respect to a Lender, the
principal amount set forth beside such Lender's name under the heading
"Commitment" on the signature pages of this Agreement or on the signature page
of the Assignment and Acceptance pursuant to which such Lender became a Lender
hereunder in accordance with the provisions of Section 13.3, as such Commitment
may be adjusted from time to time in accordance with the provisions of Section
13.3, and "Commitments" means, collectively, the aggregate amount of the
commitments of all of the Lenders.
"Compliance Certificate" means a certificate in the form of
Exhibit E hereto.
"Como" means GL Industries of Indiana, Inc., d/b/a Como
Products Corporation.
"Contaminant" means any waste, pollutant, hazardous substance,
toxic substance, hazardous waste, special waste, petroleum or petroleum-derived
substance or waste, asbestos in any form or condition, polychlorinated biphenyls
("PCBs"), or any constituent of any such substance or waste.
"Debt" means all liabilities, obligations and indebtedness of
the Borrower or any of its Subsidiaries to any Person, of any kind or nature,
now or hereafter owing, arising, due or payable, howsoever evidenced, created,
incurred, acquired or owing, whether primary, secondary, direct, contingent,
fixed or otherwise, and including, without in any way limiting the generality of
the foregoing: (i) the Borrower's or any Subsidiary's liabilities and
obligations to trade creditors; (ii) all Obligations; (iii) all obligations and
liabilities of any Person secured by any Lien on the Borrower's or any
Subsidiary's property, even though the Borrower or any such Subsidiary shall not
have assumed or become liable for the payment thereof; provided, however, that
all such obligations and liabilities which are limited in recourse to such
property shall be included in Debt only to the extent of the book value of such
property as would be shown on a balance sheet of the Borrower prepared in
accordance with GAAP; (iv) all obligations or liabilities created or arising
under any Capital Lease or conditional sale or other title retention
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agreement with respect to property used or acquired by the Borrower or any of
its Subsidiaries, even if the rights and remedies of the lessor, seller or
lender thereunder are limited to repossession of such property; provided,
however, that all such obligations and liabilities which are limited in recourse
to such property shall be included in Debt only to the extent of the book value
of such property as would be shown on a balance sheet of the Borrower prepared
in accordance with GAAP; (v) all accrued pension fund and other employee benefit
plan obligations and liabilities; (vi) all obligations and liabilities under
Guaranties; and (vii) deferred taxes.
"Default" means any event or circumstance which, with the
giving of notice, the lapse of time, or both, would (if not cured or otherwise
remedied during such time) constitute an Event of Default.
"Default Rate" means a fluctuating per annum interest rate at
all times equal to the sum of (a) the otherwise applicable Interest Rate plus
(b) two percent (2%). Each Default Rate shall be adjusted simultaneously with
any change in the applicable Interest Rate.
"Distribution" means, in respect of any corporation: (a) the
payment or making of any dividend or other distribution of property in respect
of capital stock (or any options or warrants for such stock) of such
corporation, other than distributions in capital stock (or any options or
warrants for such stock) of the same class; or (b) the redemption or other
acquisition of any capital stock (or any options or warrants for such stock) of
such corporation.
"DOL" means the United States Department of Labor or any
successor department or agency.
"Dollar" and "$" means dollars in the lawful currency of the
United States.
"EBITDA" means with respect to the Borrower, on a consolidated
basis (excluding Como), for any period, Adjusted Net Earnings from Operations,
plus the sum of (i) interest expenses, whether paid or accrued, (ii)
depreciation, (iii) amortization, (iv) income taxes paid or accrued with respect
to such period, and (v) other non-cash expenses (including, without limitation,
amortization of goodwill, deferred financing fees, LIFO reserve adjustments and
other intangibles), each to the extent deducted in determining the Borrower's
Adjusted Net Earnings from Operations for that period, less non-cash income
included in the calculation of Adjusted Net Earnings from Operations for that
period.
"Environmental Laws" means all federal, state, provincial or
local laws, statutes, common law duties, rules, regulations, ordinances and
codes, together with all administrative orders, directed duties, requests,
licenses, authorizations and permits of, and agreements with, any Governmental
Authority, in each case relating to environmental, health, safety and land use
matters.
"Environmental Lien" means a Lien in favor of any Governmental
Authority or any other Person for (1) any liability under any Environmental
Laws, or (2) damages arising from, or costs incurred by such Governmental
Authority or any other Person in response to, a
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Release or threatened Release of a Contaminant into the environment.
"Equipment" means all of the Borrower's and LDM Canada's now
owned and hereafter acquired machinery, equipment, furniture, furnishings,
fixtures, and other tangible personal property (except Inventory), including
motor vehicles with respect to which a certificate of title has been issued,
aircraft, dies, tools, jigs, and office equipment, as well as all of such types
of property leased by the Borrower and LDM Canada and all of the Borrower's and
LDM Canada's rights and interests with respect thereto under such leases
(including, without limitation, options to purchase); together with all present
and future additions and accessions thereto, replacements therefor, component
and auxiliary parts and supplies used or to be used in connection therewith, and
all substitutes for any of the foregoing, and all manuals, drawings,
instructions, warranties and rights with respect thereto; wherever any of the
foregoing is located.
"ERISA" means the Employee Retirement Income Security Act of
1974, and regulations promulgated thereunder.
"ERISA Affiliate" means any trade or business (whether or not
incorporated) under common control with the Borrower within the meaning of
Section 414(b) or (c) of the Code (and Sections 414(m) and (o) of the Code for
purposes of provisions relating to Section 412 of the Code).
"ERISA Event" means (a) a Reportable Event or Termination
Event with respect to a Pension Plan; (b) a withdrawal by the Borrower, any
Subsidiary or any ERISA Affiliate from a Pension Plan during a plan year in
which it was a substantial employer (as defined in Section 4001(a)(2) of ERISA)
or employer under the PBA or a cessation of operations which is treated as such
a withdrawal; (c) a complete or partial withdrawal by the Borrower, any
Subsidiary or any ERISA Affiliate from a Multi-employer Plan or Plan regulated
or governed by the PBA or notification that a Multi-employer Plan or Plan
regulated or governed by the PBA is in reorganization; (d) the filing of a
notice of intent to terminate, the treatment of a Plan amendment as a
termination, or the commencement of proceedings by the PBGC or other applicable
Governmental Authority to terminate a Pension Plan or Multi-employer Plan; (e)
an event or condition which might reasonably be expected to constitute grounds
for the termination of, or the appointment of a trustee to administer, any
Pension Plan or Multi-employer Plan; (f) the imposition of any liability under
Title IV of ERISA, other than PBGC premiums due but not delinquent under Section
4007 of ERISA, or PBA or other applicable law of any jurisdiction upon the
Borrower, any Subsidiary or any ERISA Affiliate; or (g) any failure to make or
remit any contribution when due in respect of any Plan.
"Event of Default" has the meaning specified in Section 11.1.
"Excess Cash Flow" means for any period the Borrower's
Adjusted Net Earnings from Operations for such period, plus the sum of
depreciation, amortization and other non-cash charges deducted in the
determination of net income for that period, and less the sum of scheduled
principal payments with respect to Debt for borrowed money and Capital Leases
during that period and the unfinanced portion of Capital Expenditures during
that period.
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"Exchange Act" means the Securities and Exchange Act of 1934,
and regulations promulgated thereunder.
"Federal Funds Rate" means, for any day, the rate set forth in
the weekly statistical release designated as H.15(519), or any successor
publication, published by the Federal Reserve Bank of New York (including any
such successor, "H.15(519)") on the preceding Business Day opposite the caption
"Federal Funds (Effective)"; or, if for any relevant day such rate is not so
published on any such preceding Business Day, the rate for such day will be the
arithmetic mean as determined by the Agent of the rates for the last transaction
in overnight Federal funds arranged prior to 9:00 a.m. (New York City time) on
that day by each of three leading brokers of Federal funds transactions in New
York City selected by the Agent.
"Fee Letter" means that certain letter, dated as of the
Closing Date, between the Agent and the Borrower.
"Federal Reserve Board" means the Board of Governors of the
Federal Reserve System or any successor thereto.
"Financial Statements" means, according to the context in
which it is used, the financial statements attached hereto, or any financial
statements required to be given to the Lenders pursuant to this Agreement.
"Fiscal Year" means the Borrower's fiscal year for financial
accounting purposes. The current Fiscal Year of the Borrower will end on
September 27, 1998.
"Fixed Assets" means Equipment and Real Estate of the Borrower
and LDM Canada.
"Fixed Charges" means as to the Borrower on a consolidated
basis (other than Como), for any fiscal period, the sum of (i) interest expenses
paid or payable in cash, (ii) cash dividend payments, (iii) scheduled
installments of principal paid or payable with respect to Debt for borrowed
money (other than Revolving Loans) and Capital Leases; (iv) that portion of
Capital Expenditures not financed by borrowings from third parties or with the
proceeds of CAPEX Loans; and (v) income taxes paid or payable in cash.
"Fixed Charge Coverage Ratio" means as to the Borrower on a
consolidated basis (other than Como), for any fiscal period, the ratio of EBITDA
to Fixed Charges.
"Fixture" means all fixtures of the Borrower and LDM Canada as
such term is defined in the UCC including trade fixtures, building fixtures and
leasehold improvements.
"Funding Date" means the date on which a Borrowing occurs.
"GAAP" means generally accepted accounting principles set
forth from time to time in the opinions and pronouncements of the Accounting
Principles Board and the American
-8-
15
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board (or agencies with similar functions of
comparable stature and authority within the U.S. accounting profession), which
are applicable to the circumstances as of the Closing Date.
"General Intangibles" means all of the Borrower's and LDM
Canada's now owned or hereafter acquired general intangibles, choses in action
and causes of action and all other intangible personal property of the Borrower
and LDM Canada of every kind and nature (other than Accounts), including,
without limitation, all contract rights, Proprietary Rights, corporate or other
business records, inventions, designs, blueprints, plans, specifications,
patents, patent applications, trademarks, service marks, trade names, trade
secrets, goodwill, copyrights, computer software, customer lists, registrations,
licenses, franchises, tax refund claims, any funds which may become due to the
Borrower or LDM Canada in connection with the termination of any Plan or other
employee benefit plan or any rights thereto and any other amounts payable to the
Borrower or LDM Canada from any Plan or other employee benefit plan, rights and
claims against carriers and shippers, rights to indemnification, business
interruption insurance and proceeds thereof, property, casualty or any similar
type of insurance and any proceeds thereof, and any letter of credit, guarantee,
claim, security interest or other security held by or granted to the Borrower or
LDM Canada to secure payment by an Account Debtor of any of the Accounts, but
excluding proceeds of key-man life insurance on which the Borrower is the
beneficiary.
"Governmental Authority" means any nation or government, any
state, province, municipality, region or other political subdivision thereof,
any central bank (or similar monetary or regulatory authority) thereof, any
entity exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government, any corporation or other entity owned
or controlled, through stock or capital ownership or otherwise, by any of the
foregoing and any department, agency, board, commission, tribunal, committee or
instrumentality of any of the foregoing.
"Guaranty" means, with respect to any Person, all obligations
of such Person which in any manner directly or indirectly guarantee or assure,
or in effect guarantee or assure, the payment or performance of any
indebtedness, dividend or other obligations of any other Person (the "guar-
anteed obligations"), or assure or in effect assure the holder of the guaranteed
obligations against loss in respect thereof, including, without limitation, any
such obligations incurred through an agreement, contingent or otherwise: (a) to
purchase the guaranteed obligations or any property constituting security
therefor; (b) to advance or supply funds for the purchase or payment of the
guaranteed obligations or to maintain a working capital or other balance sheet
condition; or (c) to lease property or to purchase any debt or equity securities
or other property or services.
"Guarantor" means each of LDM Canada and LDM Holding, and each
other Person executing a guarantee pursuant to Section 9.21 (iii).
"Guarantor Collateral" means the "Pledged Collateral" and
"Collateral" as each such term is defined in the relevant Guarantor Collateral
Document.
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16
"Guarantor Collateral Documents" means the LDM Canada Security
Agreement, the LDM Canada Mortgage, the LDM Holding Pledge and Security
Agreement and each other document delivered by a Guarantor pursuant to Section
9.21 (iv).
"Guarantor Documents" means the Guarantor Guarantees and the
Guarantor Collateral Documents.
"Guarantor Guarantees" means the LDM Canada Guarantee and the
LDM Holding Guarantee and each guarantee executed by a Guarantor pursuant to
Section 9.21 (iii).
"Huron" means Huron Plastics Group, Inc., a Michigan
corporation.
"Indenture" means the indenture governing the Senior
Subordinated Notes.
"Intellectual Property Security Agreement" means the
Intellectual Property Security Agreement, dated as of January 22, 1997, executed
and delivered by the Borrower to the Agent to evidence and perfect the Agent's
security interest in the Borrower's present and future patents, trademarks,
copyrights, and related licenses and rights, for the benefit of the Agent and
the Lenders, as the same may be amended, supplemented or otherwise modified from
time to time.
"Intercompany Accounts" means all assets and liabilities,
however arising, which are due to the Borrower from, which are due from the
Borrower to, or which otherwise arise from any transaction by the Borrower with,
any Affiliate.
"Intercompany Loans" has the meaning specified in Section
9.13.
"Intercompany Note" shall mean a demand note evidencing an
Intercompany Loan made by Borrower pursuant to Section 9.13(d), such demand note
to be in form and substance satisfactory to Agent.
"Interest Period" means, as to any LIBOR Rate Loan, the period
commencing on the Funding Date of such Loan or on the Conversion/Continuation
Date on which the Loan is converted into or continued as a LIBOR Rate Loan, and
ending on the date one, two, three or six months thereafter as selected by the
Borrower in its Notice of Borrowing or Notice of Conversion/Continuation;
provided that:
(i) if any Interest Period would otherwise end on a
day that is not a Business Day, that Interest Period shall be extended
to the following Business Day unless the result of such extension would
be to carry such Interest Period into another calendar month, in which
event such Interest Period shall end on the preceding Business Day;
(ii) any Interest Period pertaining to a LIBOR Rate
Loan that begins on the last Business Day of a calendar month (or on a
day for which there is no numerically
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corresponding day in the calendar month at the end of such Interest
Period) shall end on the last Business Day of the calendar month at the
end of such Interest Period; and
(iii) no Interest Period for any Loan shall extend
beyond the Termination Date.
"Interest Rate" means each or any of the interest rates,
including the Default Rate, set forth in Section 3.1.
"Inventory" means all of the Borrower's and LDM Canada's now
owned and hereafter acquired inventory, goods, merchandise, and other personal
property, wherever located, to be furnished under any contract of service or
held for sale or lease, all returned goods, raw materials, other materials and
supplies of any kind, nature or description which are or might be consumed in
the Borrower's business or used in connection with the packing, shipping,
advertising, selling or finishing of such goods, merchandise and such other
personal property, and all documents of title or other documents representing
them.
"Investment Property" means all investment property as such
term is defined in the UCC as now or hereafter in effect in those states that
adopt such definition.
"IRS" means the Internal Revenue Service and any Governmental
Authority succeeding to any of its principal functions under the Code.
"Kenco Companies" means, collectively, Kenco Plastics, Inc., a
Kentucky corporation, and Kenco Plastics, Inc., a Michigan corporation.
"Latest Projections" means: (a) on the Closing Date and
thereafter until the Lenders receive new projections pursuant to Section 7.2(e),
the projections of the Borrower's results of operations for the period
commencing on October 1, 1997 and ending on September 30, 1998 and delivered to
the Lenders prior to the Closing Date; and (b) thereafter, the projections most
recently received by the Lenders pursuant to Section 7.2(e).
"LDM Canada" means LDM Technologies Company, a Nova Scotia
unlimited liability company.
"LDM Canada Guarantee" means collectively, (i) the LDM Canada
Guarantee, dated as of January 22, 1997, duly executed and delivered by LDM
Canada to the Revolving Loan Lender Agent for the benefit of itself and the
Revolving Loan Lenders and (ii) the LDM Canada Guarantee, dated as of February
6, 1998, duly executed and delivered by LDM Canada to the Agent, for the benefit
of itself and the Lenders, as each may be amended, supplemented or otherwise
modified from time to time.
"LDM Canada Security Agreement" means, collectively, (i) the
$100,000,000 Cdn. fixed and floating charge demand debenture and related pledge
agreement in respect thereof, each dated as of January 22, 1997, duly executed
and delivered by LDM Canada to the
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18
Revolving Loan Lender Agent for the benefit of itself and the Revolving Loan
Lenders and (ii) the $100,000,000 Cdn. fixed and floating charge demand
debenture and related pledge agreement in respect thereof, each dated as of
February 6, 1998, duly executed and delivered by LDM Canada in favor of the
Agent, for the benefit of itself and the Lenders, as each may be amended,
supplemented or otherwise modified from time to time.
"LDM Germany" means LDM Technologies GmbH, a German
Corporation.
"LDM Holding" means LDM Holding Canada, Inc., a Michigan
corporation.
"LDM Holding Guarantee" means the LDM Holding Guarantee, dated
as of January 22, 1997, duly executed and delivered by LDM Holding to the Agent,
for the benefit of itself and the Lenders, as the same may be amended,
supplemented or otherwise modified from time to time.
"LDM Holding Pledge and Security Agreement" means the LDM
Holding Pledge and Security Agreement, dated as of January 22, 1997, duly
executed and delivered by LDM Holding in favor of the Agent, for the benefit of
itself and the Lenders, as the same may be amended, supplemented or otherwise
modified from time to time.
"Lender" and "Lenders" have the meanings specified in the
introductory paragraph hereof.
"Lending Office" means with respect to a Lender or the Agent,
any office, branch, subsidiary or affiliate of such Lender or the Agent.
"LIBOR Interest Payment Date" means, with respect to a LIBOR
Rate Loan, the last day of each Interest Period applicable to such Loan.
"LIBOR Interest Rate Determination Date" means each date of
calculating the LIBOR Rate for purposes of determining the interest rate with
respect to an Interest Period. The LIBOR Interest Rate Determination Date for
any LIBOR Rate Loan shall be the second Business Day prior to the first day of
the related Interest Period for such LIBOR Rate Loan.
"LIBOR Rate" means, for any Interest Period, with respect to
LIBOR Rate Loans comprising part of the same Borrowing, the rate of interest per
annum (rounded upward to the next 1/16th of 1.0%) determined by the Agent as
follows:
LIBOR Rate = LIBOR
-----------------------
1.00 - Eurodollar Reserve Percentage
Where,
"Eurodollar Reserve Percentage" means for any day for any
Interest Period the maximum reserve percentage (expressed as a
decimal, rounded upward to the
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19
next 1/100th of 1.0%) in effect on such day (whether or not
applicable to any Lender) under regulations issued from time
to time by the Federal Reserve Board for determining the
maximum reserve requirement (including any emergency,
supplemental or other marginal reserve requirement) with
respect to Eurocurrency funding (currently referred to as
"Eurocurrency liabilities"); and
"LIBOR" means the rate of interest per annum (rounded
upward to the next 1/16 of 1%) notified to the Agent by Bank
of America as the rate of interest at which dollar deposits in
the approximate amount of the Loan to be made or continued as,
or converted into, a LIBOR Rate Loan and having a maturity
comparable to such Interest Period would be offered by Bank of
America's applicable lending office to major banks in the
London eurodollar market at approximately 11:00 a.m. (London
time) two Business Days prior to the commencement of such
Interest Period.
"LIBOR Rate Loans" means, collectively, the LIBOR CAPEX Loans
and the LIBOR Term Loans.
"LIBOR CAPEX Loan" means a CAPEX Loan during any period in
which it bears interest at the LIBOR Rate.
"LIBOR Term Loan" means any portion of a Term Loan during any
period in which such portion bears interest at the LIBOR Rate.
"Lien" means: (a) any interest in property securing an
obligation owed to, or a claim by, a Person other than the owner of the
property, whether such interest is based on the common law, statute, or
contract, and including without limitation, a security interest, hypothecation,
charge, claim, or lien arising from a mortgage, deed of trust, encumbrance,
pledge, hypothecation, assignment, deposit arrangement, agreement, security
agreement, conditional sale or trust receipt or a lease, consignment or bailment
for security purposes; and (b) to the extent not included under clause (a), (i)
any reservation, exception, encroachment, easement, right-of-way, covenant,
condition, restriction, lease or other title exception or encumbrance affecting
property and (ii) any other lien, charge, privilege, secured claim, title
retention, garnishment right, deemed trust, encumbrance or other right affecting
Property, xxxxxx or inchoate, whether or not crystallized or fixed, whether or
not for amounts due or accruing due, arising by any statute, act or law of any
jurisdiction, at common law, in equity or by any agreement.
"Loan Account" means the loan account of the Borrower, which
account shall be maintained by the Agent.
"Loan and Security Agreement" means the Loan and Security
Agreement, dated as of January 22, 1997, among the Borrower, the Revolving Loan
Lenders and the Revolving Loan Lender Agent, as the same may be supplemented,
amended or otherwise modified from time to time.
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20
"Loan and Security Agreement Obligations" means the
Obligations under, and as defined in, the Loan and Security Agreement.
"Loan Documents" means this Agreement, the Term Loan Notes,
the CAPEX Loan Notes, the Intellectual Property Security Agreement, the
Mortgages, the Pledge Agreement, the Guarantor Documents and any other
agreements, instruments, and documents heretofore, now or hereafter evidencing,
securing, guaranteeing or otherwise relating to the Obligations, the Collateral,
or any other aspect of the transactions contemplated by this Agreement.
"Loans" means, collectively, all loans and advances provided
for in Article 2.
"Majority Lenders" means, at any time, Lenders whose Pro Rata
Shares aggregate more than 66-__% of the Commitments, plus, Revolving Loan
Lenders whose Pro Rata Shares (as defined in the Loan and Security Agreement)
aggregate more than 66-__% of the Commitments under, and as defined in, the
Loan and Security Agreement.
"Margin Stock" means "margin stock" as such term is defined in
Regulation G, T, U or X of the Federal Reserve Board.
"Material Adverse Effect" means (a) a material adverse change
in, or a material adverse effect upon, the operations, business, properties,
condition (financial or otherwise) or prospects of the Borrower and LDM Canada
on a consolidated basis or the Collateral, the Pledged Collateral or the
Guarantee Collateral on a consolidated basis; (b) a material impairment of the
ability of the Borrower or any Guarantor to perform under any Loan Document to
which such Person is a party and to avoid any Event of Default; or (c) a
material adverse effect upon the legality, validity, binding effect or
enforceability against the Borrower or any Guarantor of any Loan Document.
"Maximum Rate" has the meaning specified in Section 3.3.
"Maximum CAPEX Amount" means an amount equal to $10,000,000
less the aggregate amount of CAPEX Loans made on or prior to the date of
determination.
"Merger" means the merger of Huron, Lakeport Plastics, Inc.,
HPG Body Systems, Inc. and HPG Chassis Systems, Inc. with, and into, the
Borrower, with the Borrower as the surviving corporation thereof, pursuant to
the Merger Documents.
"Merger Documents" means the Agreement and Plan of Merger,
dated as of February 6, 1998, among Huron, Lakeport Plastics, Inc., HPG Body
Systems, Inc. and HPG Chassis Systems, Inc. and the Borrower, and all other
documents entered into or delivered in connection with the Merger.
"Mortgages" means: (a) each Mortgage, Charge/Mortgage of Land,
Security Agreement, and Assignments of Leases and Rents dated the date hereof
between the Borrower
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and/or LDM Canada and the Agent and delivered to the Agent; and (b) all other
real property mortgages, leasehold mortgages, assignments of leases, mortgage
deeds, deeds of trust, deeds to secure debt, security agreements, and other
similar instruments hereafter entered into which provide the Agent a lien on or
other interest in any portion of the Premises or the Real Estate or which relate
to any such Lien or interest.
"Multi-employer Plan" means a "multi-employer plan" as defined
in Section 4001(a)(3) of ERISA which is or was at any time during the current
year or the immediately preceding six (6) years contributed to by the Borrower
or any ERISA Affiliate.
"Notes" means, collectively, the CAPEX Loan Notes and the Term
Loan Notes.
"Notice of Borrowing" means a notice of Borrowing in the form
of Exhibit B.
"Notice of Conversion/Continuation" means notice of conversion
or continuation in the form of Exhibit C.
"Obligations" means all present and future loans, advances,
liabilities, obligations, covenants, duties, and debts owing by the Borrower to
the Agent and/or any Lender, arising under or pursuant to this Agreement or any
of the other Loan Documents, whether or not evidenced by any note, or other
instrument or document, whether arising from an extension of credit, opening of
a letter of credit, acceptance, loan, guaranty, indemnification or otherwise,
whether direct or indirect (including, without limitation, those acquired by
assignment from others, and any participation by the Agent and/or any Lender in
the Borrower's debts owing to others), absolute or contingent, due or to become
due, primary or secondary, as principal or guarantor, and including, without
limitation, all principal, interest, charges, expenses, fees, attorneys' fees,
filing fees and any other sums chargeable to the Borrower hereunder or under any
of the other Loan Documents.
"Other Taxes" means any present or future stamp or documentary
taxes or any other excise or property taxes, charges or similar levies which
arise from any payment made hereunder or from the execution, delivery or
registration of, or otherwise with respect to, this Agreement or any other Loan
Documents.
"Participating Lender" means any Person who shall have been
granted the right by any Lender to participate in the financing provided by such
Lender under this Agreement, and who shall have entered into a participation
agreement in form and substance satisfactory to such Lender.
"Payment Account" means each blocked bank account established
pursuant to Section 6.9, to which the funds of the Borrower (including, without
limitation, proceeds of Accounts and other Collateral) are deposited or
credited, and which is maintained in the name of the Agent or the Borrower, as
the Agent may determine, on terms acceptable to the Agent.
"PBA" means the Pension Benefits Act of Ontario and all
regulations thereunder
-15-
22
as amended from time to time, and any successor legislation.
"PBGC" means the Pension Benefit Guaranty Corporation or any
Governmental Authority succeeding to the functions thereof.
"Pension Plan" means a pension plan (as defined in Section
3(2) of ERISA or the applicable laws of any other jurisdictions including the
PBA) subject to Title IV of ERISA or the applicable laws of any other
jurisdictions including the PBA which the Borrower or LDM Canada sponsors,
maintains, or to which it makes, is making, or is obligated to make
contributions, or has made contributions at any time during the immediately
preceding five (5) plan years.
"Permitted Liens" means:
(a) 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 Borrower's books
and records and a stay of enforcement of any such Lien is in effect;
(b) the Agent's Liens;
(c) deposits under worker's compensation,
unemployment insurance, social security and other similar laws, or to
secure the performance of bids, tenders or contracts (other than for
the repayment of borrowed money) or to secure indemnity, performance or
other similar bonds for the performance of bids, tenders or contracts
(other than for the repayment of borrowed money) or to secure statutory
obligations (other than liens arising under ERISA or Environmental
Liens) or surety or appeal bonds, or to secure indemnity, performance
or other similar bonds in the ordinary course of business;
(d) Liens securing the claims or demands of
materialmen, mechanics, carriers, warehousemen, landlords and other
like Persons; provided that the payment thereof is not at the time
required by Section 9.1;
(e) reservations, exceptions, encroachments,
easements, rights of way, covenants running with the land, and other
similar title exceptions or encumbrances affecting any Real Estate;
provided that they do not in the aggregate materially detract from the
value of the Real Estate or materially interfere with its use in the
ordinary conduct of the Borrower's business;
(f) judgment and other similar Liens arising in
connection with court proceedings; provided that (A) the existence of
such Liens is being contested in good faith and by proper proceedings
diligently pursued, (B) reserves or other appropriate provision, if
any, as are required by GAAP have been made therefor, (C) a stay of
enforcement of any such Liens is in effect, (D) the priority of any
such Liens is
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23
subordinate to that of the Agent's Liens, and (E) the existence
of any judgment or court proceedings upon which such Liens are based
does not otherwise constitute an Event of Default under this Agreement;
(g) Liens in existence on the Closing Date, after
giving effect to the initial Borrowing, and listed on Schedule 9.19,
and any extensions or renewals thereof, provided that (x) the aggregate
principal amount of the Debt, if any, secured by such Lien does not
increase from that amount outstanding at the time of any such renewal
or extension and (y) any such renewal or extension does not encumber
any additional assets or properties of the Borrower or any of its
Subsidiaries;
(h) Liens securing Intercompany Notes in accordance
with Section 9.13;
(i) Liens securing the Loan and Security Agreement
Obligations; and
(j) Lien arising under the Escrow Agreement (as
defined in the Acquisition Agreement).
"Person" means any individual, sole proprietorship,
partnership, joint venture, trust, unincorporated organization, association,
corporation, Governmental Authority, or any other entity.
"Pledge Agreement" means the Pledge Agreement, dated as of
January 22, 1997, duly executed and delivered by the Borrower for the benefit of
the Agent and the Lenders, as the same may be amended, supplemented or otherwise
modified from time to time.
"Pledged Collateral" has the meaning specified in the Pledge
Agreement.
"Plan" means an employee benefit plan (as defined in Section
3(3) of ERISA or the applicable laws of any other jurisdiction) which the
Borrower or any Subsidiary sponsors or maintains or to which the Borrower or any
Subsidiary makes, is making, or is obligated to make contributions and includes
any Pension Plan.
"PPSA" means the Personal Property Security Act of Ontario or
other applicable jurisdiction, and all regulations thereunder, as amended from
time to time, and any successor legislation.
"Premises" means the land identified by addresses on Schedule
8.12, together with all buildings, improvements, and fixtures thereon and all
tenements, hereditaments, and appurtenances belonging or in any way
appertaining thereto, and which constitutes all of the real property in which
the Borrower or LDM Canada has any interests on the Closing Date.
"Pro Rata Share" means, with respect to a Lender, a fraction
(expressed as a percentage), the numerator of which is the amount of such
Lender's Commitment and the
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24
denominator of which is the sum of the amounts of all of the Lenders'
Commitments.
"Proprietary Rights" means all of the Borrower's and LDM
Canada's now owned and hereafter arising or acquired: licenses, franchises,
permits, patents, patent rights, copyrights, works which are the subject matter
of copyrights, trademarks, service marks, trade names, trade styles, patent,
trademark and service xxxx applications, and all licenses and rights related to
any of the fore going, including, without limitation, those patents, trademarks,
service marks and copyrights set forth on Schedule 8.13 hereto, and all other
rights under any of the foregoing, all extensions, renewals, reissues,
divisions, continuations, and continuations-in-part of any of the foregoing, and
all rights to xxx for past, present and future infringement of any of the
foregoing.
"Real Estate" means all of the present and future interests of
the Borrower and/or any Subsidiary, as owner, lessee, or otherwise, in the
Premises, including, without limitation, any interest arising from an option to
purchase or lease the Premises or any portion thereof.
"Release" means a release, spill, emission, leaking, pumping,
injection, deposit, disposal, discharge, dispersal, leaching or migration of a
Contaminant into the indoor or outdoor environment or into or out of any Real
Estate or other property, including the movement of Contaminants through or in
the air, soil, surface water, groundwater or Real Estate or other property.
"Rentals" has the meaning specified in Section 9.24.
"Reportable Event" means, any of the events set forth in
Section 4043(b) of ERISA or the regulations thereunder, other than any such
event for which the 30-day notice requirement under ERISA has been waived in
regulations issued by the PBGC.
"Requirement of Law" means, as to any Person, any law
(statutory or common), treaty, rule or regulation or determination of an
arbitrator or of a Governmental Authority, in each case applicable to or binding
upon the Person or any of its property or to which the Person or any of its
property is subject.
"Responsible Officer" means the chief executive officer or the
president of the Borrower, or any other officer having substantially the same
authority and responsibility; or, with respect to compliance with financial
covenants, the chief financial officer or the treasurer of the Borrower, or any
other officer having substantially the same authority and responsibility.
"Restricted Investment" means any acquisition of property by
the Borrower or LDM Canada in exchange for cash or other property, whether in
the form of an acquisition of stock, debt, or other indebtedness or obligation,
or the purchase or acquisition of any other property, or a loan, advance,
capital contribution, or subscription, except: (A) the Borrower may make
intercompany loans to (x) LDM Canada pursuant to Section 9.13(d)(I), and (y) LDM
Germany pursuant to Section 9.13(d)(II), (B) the Sunningdale Investment, and (C)
acquisitions of the following:
(a) Equipment to be used in the business of the
Borrower or LDM Canada so long as the acquisition costs thereof
constitute Capital Expenditures permitted
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25
hereunder;
(b) goods held for sale or lease or to be used by
the Borrower or LDM Canada in the ordinary course of business;
(c) current assets arising from the sale or lease of
goods or the rendition of services in the ordinary course of business
of the Borrower or LDM Canada;
(d) direct obligations of the United States of
America, or any agency thereof, or obligations guaranteed by the United
States of America, provided that such obligations mature within one
year from the date of acquisition thereof;
(e) certificates of deposit maturing within one year
from the date of acquisition, bankers' acceptances, Eurodollar bank
deposits, or overnight bank deposits, in each case issued by, created
by, or with a bank or trust company organized under the laws of the
United States or any state thereof having capital and surplus
aggregating at least $100,000,000;
(f) commercial paper given a rating of "A2" or better
by Standard & Poor's Corporation or "P2" or better by Xxxxx'x Investors
Service, Inc. and maturing not more than 90 days from the date of
creation thereof;
(g) life insurance premiums of up to $1,500,000 per
annum for life insurance on the lives of the Borrower's principal
stockholders;
(h) loans to employees outstanding as of the Closing
Date;
(i) loans and advances in the ordinary course of
business to officers, directors and employees for business-related
travel expenses, moving expenses and other similar expenses in an
aggregate principal amount not to exceed $250,000 at any time; and
(j) the conversion of all or portion of the Closing
Date Intercompany Note into equity interests of a Guarantor (other than
LDM Holding).
"Revolving Loan Lender Agent" means the Agent under, and as
defined in, the Loan and Security Agreement.
"Revolving Loan Lender" means a Lender under, and as defined
in, the Loan and Security Agreement.
"Revolving Loans" means Loans under, and as defined in, the
Loan and Security Agreement.
"Sellers" means Huron, Tadim and the parties indicated in the
Acquisition
-19-
26
Agreement as "selling shareholders" signatory thereto.
"Senior Subordinated Notes" means the 10-3/4% Senior
Subordinated Notes due 2007 issued by the Borrower.
"Solvent" means when used with respect to any Person that (a)
the fair value of all its assets is in excess of the total amount of its debts
(including contingent liabilities); (b) it is able to pay its debts as they
mature; (c) it does not have unreasonably small capital for the business in
which it is engaged or for any business or transaction in which it is about to
engage; and (d) it is not "insolvent" as such term is defined in Section 101(32)
of the Bankruptcy Code.
"Stated Termination Date" means January 22, 2002.
"Subsidiary" means any corporation of which more than fifty
percent (50.0%) of the outstanding securities of any class or classes, the
holders of which are ordinarily, in the absence of contingencies, entitled to
elect a majority of the corporate directors (or Persons performing similar
functions), is at the time, directly or indirectly through one or more
intermediaries, owned by the Borrower and/or one or more of its Subsidiaries;
provided, however, that Como shall only be a "Subsidiary" for the purpose of
this Agreement with respect to Section 8.18, 8.21, 9.7, 9.8 and 11.1(p)
(including in each case the definitions contained therein).
"Sunningdale Investment" means the equity investment of the
Borrower in Sunningdale Plastic Industries, Pte. Ltd., a Singapore company,
whereby the Borrower owns a thirty percent (30%) equity interest in such Person,
in the form held by the Borrower on the Closing Date.
"Tadim" means Tadim, Inc., a Michigan corporation.
"Taxes" means any and all present or future taxes, levies,
imposts, deductions, charges or withholdings, and all liabilities with respect
thereto, excluding, in the case of each Lender and the Agent, such taxes
(including income taxes or franchise taxes and the single business tax in the
State of Michigan) as are imposed on or measured by each Lender's net income by
the jurisdiction (or any political subdivision thereof) under the laws of which
such Lender or the Agent, as the case may be, is organized or maintains a
Lending Office.
"Term Loan" and "Term Loans" have the meanings specified in
Section 2.3(a).
"Term Loan Note" and "Term Loan Notes" have the meanings
specified in Section 2.3(c).
"Termination Date" means the earliest to occur of (i) the
Stated Termination Date, (ii) the date the Commitment is terminated either by
the Borrower pursuant to Section 4.2 or by the Majority Lenders pursuant to
Section 11.2, and (iii) the date this Agreement is otherwise terminated for any
reason whatsoever.
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"Termination Event" means: (a) the whole or partial withdrawal
of the Borrower or any Subsidiary from a Plan during a plan year; or (b) the
filing of a notice of intent to terminate in whole or in part a Plan or the
treatment of a Plan amendment as a termination or partial termination; or (c)
the institution of proceedings by any Public Authority to terminate in whole or
in part or have a trustee appointed to administer a Plan; or (d) any other event
or condition which might constitute grounds for the termination of, winding up
or partial termination or winding up or the appointment of a trustee to
administer, any Plan.
"Transaction" means, collectively, (i) the Acquisition, (ii)
the Merger, (iii) the Term Loans to be made on the Closing Date and (iv) the
Fifth Amendment to the Loan and Security Agreement.
"Total Facility" has the meaning specified in Section 2.1.
"UCC" means the Uniform Commercial Code (or any successor
statute) of the State of Illinois or of any other state the laws of which are
required by Section 9-103 thereof to be applied in connection with the issue of
perfection of security interests.
"Unfunded Pension Liability" means the excess of a Plan's
benefit liabilities over the current value of that Plan's assets, determined in
accordance with the assumptions used for funding the Pension Plan pursuant to
Section 412 of the Code or the PBA or other applicable laws of any jurisdiction
for the applicable plan year and includes in the case of any Plan regulated or
governed by the PBA or applicable laws of any jurisdiction, any unfunded
liability or solvency deficiency as determined under the PBA or other applicable
laws.
1.2 Accounting Terms. Any accounting term used in this Agreement shall
have, unless otherwise specifically provided herein, the meaning customarily
given in accordance with GAAP, and all financial computations hereunder shall be
computed, unless otherwise specifically provided herein, in accordance with GAAP
as consistently applied and using the same method for inventory valuation as
used in the preparation of the Financial Statements.
1.3 Interpretive Provisions. (a) The meanings of defined terms are
equally applicable to the singular and plural forms of the defined terms.
(b) The words "hereof," "herein," "hereunder" and similar words
refer to this Agreement as a whole and not to any particular provision of this
Agreement; and Subsection, Section, Schedule and Exhibit references are to this
Agreement unless otherwise specified.
(c) (i) The term "documents" includes any and all instruments,
documents, agreements, certificates, indentures, notices and other writings,
however evidenced.
(ii) The term "including" is not limiting and means "including
without limitation."
(iii) In the computation of periods of time from a specified
date to a later
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specified date, the word "from" means "from and including," the words "to" and
"until" each mean "to but excluding" and the word "through" means "to and
including."
(d) Unless otherwise expressly provided herein, (i) references
to agreements (including this Agreement) and other contractual instruments shall
be deemed to include all subsequent amendments and other modifications thereto,
but only to the extent such amendments and other modifications are not
prohibited by the terms of any Loan Document, and (ii) references to any statute
or regulation are to be construed as including all statutory and regulatory
provisions consolidating, amending, replacing, supplementing or interpreting the
statute or regulation.
(e) The captions and headings of this Agreement are for
convenience of reference only and shall not affect the interpretation of this
Agreement.
(f) This Agreement and other Loan Documents may use several
different limitations, tests or measurements to regulate the same or similar
matters. All such limitations, tests and measurements are cumulative and shall
each be performed in accordance with their terms.
(g) This Agreement and the other Loan Documents are the result
of negotiations among and have been reviewed by counsel to the Agent, the
Borrower, each Guarantor and the other parties, and are the products of all
parties. Accordingly, they shall not be construed against the Lenders or the
Agent merely because of the Agent's or Lender's involvement in their
preparation.
ARTICLE 2
LOANS
2.1 Total Facility. Subject to all of the terms and conditions of this
Agreement, the Lenders severally agree to make available a total credit facility
of up to $76,000,000 (the "Total Facility") for the Borrower's use from time to
time during the term of this Agreement. The Total Facility shall be comprised
of: (a) a capital expenditure line of credit consisting of capital expenditure
loans up to the Maximum CAPEX Amount, as described in Section 2.2; and (b) a
term line of credit consisting of term loans as described in Section 2.3.
2.2 CAPEX Loans. (a) Amounts. Subject to the satisfaction of the
conditions precedent set forth in Article 10, each Lender severally agrees, upon
the Borrower's request from time to time on any Business Day during the period
from the Closing Date to the Termination Date, to make capital expenditure loans
(the "CAPEX Loans") to the Borrower, in amounts not to exceed such Lender's Pro
Rata Share of the Borrower's CAPEX Loan Availability. Each advance under the
CAPEX Loan shall be used by the Borrower solely for the purpose of purchasing
new Equipment; provided that (i) all such Equipment shall be free and clear of
all Liens except Liens in favor of the Agent, (ii) such CAPEX Loan shall be in
an amount not to
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exceed eighty percent (80%) of the actual invoice cost of the Equipment
(excluding therefrom any other costs, fees and expenses relating to, without
limitation, installation, services, maintenance, processing or insurance) for
which such particular advance is requested and (iii) such CAPEX Loan shall be in
the minimum amount of Two Hundred Fifty Thousand Dollars ($250,000), and in
integral multiples of Five Thousand Dollars ($5,000) if in excess of such
amount.
(b) Procedure for Borrowing.
(i) Each Borrowing of CAPEX Loans shall be made upon
the Borrower's irrevocable written notice delivered to the Agent in the form of
a Notice of Borrowing (which notice must be received by the Agent prior to 11
a.m. (Chicago time) (x) three Business Days prior to the requested Funding Date,
in the case of LIBOR Rate Loans and (y) no later than 11:00 a.m. (Chicago time)
on the requested Funding Date, in the case of Base Rate Loans):
(A) specifying the amount of the Borrowing;
(B) specifying the requested Funding Date, which
shall be a Business Day;
(C) specifying whether the CAPEX Loans requested are
to be Base Rate CAPEX Loans or LIBOR CAPEX Loans;
(D) specifying the duration of the Interest Period if
the requested CAPEX Loans are to be LIBOR CAPEX Loans. If the Notice of
Borrowing fails to specify the duration of the Interest Period for any
Borrowing comprised of LIBOR CAPEX Loans, such Interest Period shall be
three months;
(E) specifying the Equipment to be purchased by the
Borrower with the proceeds of such CAPEX Loan; and
(F) attaching a true and complete copy of the invoice
relating to the Equipment to be purchased by the Borrower with the
proceeds of such CAPEX Loan.
(ii) After giving effect to any Borrowing, there may
not be more than five (5) different Interest Periods in effect.
(iii) With respect to any request for Base Rate CAPEX
Loans, in lieu of delivering the above-described Notice of Borrowing the
Borrower may give the Agent telephonic notice of such request by the required
time, with such telephonic notice to be confirmed in writing within 24 hours of
the giving of such notice but Agent shall be entitled to rely on the telephonic
notice in making such CAPEX Loans.
(c) Reliance upon Authority. On or prior to the Closing Date
and thereafter prior to any change with respect to any of the information
contained in the following clauses (i) and
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(ii), the Borrower shall deliver to the Agent a writing setting forth (i) the
account of the Borrower to which the Agent is authorized to transfer the
proceeds of the CAPEX Loans requested pursuant to this Section 2.2, and (ii) the
names of the officers authorized to request CAPEX Loans on behalf of the
Borrower, and shall provide the Agent with a specimen signature of each such
officer. The Agent shall be entitled to rely conclusively on such officer's
authority to request CAPEX Loans on behalf of the Borrower, the proceeds of
which are to be transferred to any of the accounts specified by the Borrower
pursuant to the immediately preceding sentence, until the Agent receives written
notice to the contrary. The Agent shall have no duty to verify the identity of
any individual representing him or herself as one of the officers authorized by
the Borrower to make such requests on its behalf.
(d) No Liability. The Agent shall not incur any liability to
the Borrower as a result of acting upon any notice referred to in Sections
2.2(b) and (c), which notice the Agent believes in good faith to have been given
by an officer duly authorized by the Borrower to request CAPEX Loans on its
behalf or for otherwise acting in good faith under this Section 2.2, and the
crediting of CAPEX Loans to the Borrower's deposit account, or transmittal to
such Person as the Borrower shall direct, shall conclusively establish the
obligation of the Borrower to repay such CAPEX Loans as provided herein.
(e) Notice Irrevocable. Any Notice of Borrowing (or telephonic
notice in lieu thereof) made pursuant to Section 2.2(b) shall be irrevocable and
the Borrower shall be bound to borrow the funds requested therein in accordance
therewith.
(f) Making of CAPEX Loans.
(i) Promptly after receipt of a Notice of Borrowing
or telephonic notice pursuant to Section 2.2(b), the Agent shall notify the
Lenders by facsimile transmission, telephone or other similar form of
transmission, of the requested Borrowing. Each Lender shall make the amount of
such Lender's Pro Rata Share of the requested Borrowing available to the Agent
in same day funds, to such account of the Agent as the Agent may designate, not
later than Noon, (Chicago time) on the Funding Date applicable thereto. After
the Agent's receipt of the proceeds of such CAPEX Loans, upon satisfaction of
the applicable conditions precedent set forth in Article 10, the Agent shall
make the proceeds of such CAPEX Loans available to the Borrower on the
applicable Funding Date by transferring same day funds equal to the proceeds of
such CAPEX Loans received by the Agent to the account of the Borrower,
designated in writing by the Borrower; provided, however, that the amount of
CAPEX Loans so made on any date shall in no event exceed the CAPEX Loan
Availability of the Borrower on such date.
(ii) Unless the Agent receives notice from a Lender
at least one Business Day prior to the date of such Borrowing, that such Lender
will not make available as and when required hereunder to the Agent for the
account of the Borrower the amount of that Lender's Pro Rata Share of the
Borrowing, the Agent may assume that each Lender has made such amount available
to the Agent in immediately available funds on the Funding Date and the Agent
may (but shall not be so required), in reliance upon such assumption, make
available to the Borrower
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on such date a corresponding amount. If and to the extent any Lender shall not
have made its full amount available to the Agent in immediately available funds
and the Agent in such circumstances has made available to the Borrower such
amount, that Lender shall on the Business Day following such Funding Date make
such amount available to the Agent, together with interest at the Federal Funds
Rate for each day during such period. A notice of the Agent submitted to any
Lender with respect to amounts owing under this subsection shall be conclusive,
absent manifest error. If such amount is so made available, such payment to the
Agent shall constitute such Lender's Loan on the date of Borrowing for all
purposes of this Agreement. If such amount is not made available to the Agent on
the Business Day following the Funding Date, the Agent will notify the Borrower
of such failure to fund and, upon demand by the Agent, the Borrower shall pay
such amount to the Agent for the Agent's account, together with interest thereon
for each day elapsed since the date of such Borrowing, at a rate per annum equal
to the interest rate applicable at the time to the Loans comprising such
Borrowing. The failure of any Lender to make any Loan on any Funding Date shall
not relieve any other Lender of any obligation hereunder to make a Loan on such
Funding Date, but no Lender shall be responsible for the failure of any other
Lender to make the Loan to be made by such other Lender on any Funding Date.
(g) Lenders' Failure to Perform. All CAPEX Loans shall be made
by the Lenders simultaneously and in accordance with their Pro Rata Shares. It
is understood that (i) no Lender shall be responsible for any failure by any
other Lender to perform its obligation to make any CAPEX Loans hereunder, nor
shall any Commitment of any Lender be increased or decreased as a result of any
failure by any other Lender to perform its obligation to make any CAPEX Loans
hereunder, and (ii) no failure by any Lender to perform its obligation to make
any CAPEX Loans hereunder shall excuse any other Lender from its obligation to
make any CAPEX Loans hereunder.
(h) CAPEX Loan Notes. The Borrower shall execute and deliver
to the Agent on behalf of each Lender, on the relevant Funding Date, a
promissory note, substantially in the form of Exhibit A-2 attached hereto and
made a part hereof (such promissory notes, together with any new notes issued
pursuant to Section 13.3(c) upon the assignment of any portion of any Lender's
CAPEX Loan, being hereinafter referred to collectively as the "CAPEX Loan Notes"
and each of such promissory notes being hereinafter referred to individually as
a "CAPEX Loan Note"), to evidence such Lender's CAPEX Loan, in an original
principal amount equal to the amount of such Lender's CAPEX Loan made on such
Funding Date. The principal amount of the CAPEX Loan Notes delivered to the
Agent on behalf of each Lender shall be dated the date of the making of such
CAPEX Loan and stated to mature on the Termination Date.
(i) Notation. The Agent shall record on its books the
principal amount of the CAPEX Loans owing to each Lender. In addition, each
Lender is authorized, at such Lender's option, to note the date and amount of
each payment or prepayment of principal of such Lender's CAPEX Loans in its
books and records, including computer records, such books and records
constituting rebuttably presumptive evidence, absent manifest error, of the
accuracy of the information contained therein. Prior to the transfer of a CAPEX
Loan Note, the applicable Lender shall endorse on the reverse side thereof the
outstanding principal balance of the CAPEX
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Loan evidenced thereby. Failure by such Lender to make such notation or
endorsement shall not affect the obligations of the Borrower under such CAPEX
Loan Note or any of the other Loan Documents.
2.3 Term Loans.
(a) Amount of Term Loans. Each Lender severally agrees to
make a term loan (any such term loan being referred to as a "Term Loan"
and such term loans being referred to collectively as the "Term Loans")
to the Borrower on the Closing Date, upon the satisfaction of the conditions
precedent set forth in Article 10, in an amount equal to such Lender's Pro Rata
Share of an amount equal to the lesser of (i) $66,000,000 or (ii) the sum of
(A) one hundred percent (100%) of the appraised orderly liquidation value of
Equipment of the Borrower and LDM Canada; plus (B) eighty percent (80%) of the
fair market value of all owned Real Estate of the Borrower and LDM Canada. The
Term Loans shall initially be Base Rate Term Loans.
(b) Making of Term Loans. Each Lender shall make the amount of
such Lender's Term Loan available to the Agent in same day funds, to such
account of the Agent as the Agent may designate, not later than 12:00 (noon)
(Chicago time) on the Closing Date. After the Agent's receipt of the proceeds of
such Term Loans, upon satisfaction of the conditions precedent set forth in
Article 10, the Agent shall make the proceeds of such Term Loans available to
the Borrower on such Funding Date by transferring same day funds equal to the
proceeds of such Term Loans received by the Agent to an account of the Borrower
designated in writing by the Borrower or as the Borrower shall otherwise
instruct in writing.
(c) Term Loan Notes. The Borrower shall execute and deliver to
the Agent on behalf of each Lender, on the Closing Date, a promissory note,
substantially in the form of Exhibit A-1 attached hereto and made a part hereof
(such promissory notes, together with any new notes issued pursuant to Section
13.3(c) upon the assignment of any portion of any Lender's Term Loan, being
hereinafter referred to collectively as the "Term Loan Notes" and each of such
promissory notes being hereinafter referred to individually as a "Term Loan
Note"), to evidence such Lender's Term Loan, in an original principal amount
equal to the amount of such Lender's Pro Rata Share of $66,000,000 and with
other appropriate insertions. The principal amount of the Term Loan Notes
delivered to the Agent on behalf of each Lender shall be dated the Closing Date
and stated to mature on the Termination Date.
(d) Notation and Endorsement. The Agent shall record on its
books the principal amount of the Term Loans owing to each Lender from time to
time. In addition, each Lender is authorized, at such Lender's option, to note
the date and amount of each payment or prepayment of principal of such Lender's
Term Loans in its books and records, such books and records constituting
rebuttably presumptive evidence, absent manifest error, of the accuracy of the
information contained therein. Prior to the transfer of a Term Loan Note, the
applicable Lender shall endorse on the reverse side thereof the outstanding
principal balance of the Term Loan evidenced thereby. Failure by such Lender to
make such notation or endorsement shall not affect the obligations of the
Borrower under such Term Loan Note or any of the other Loan Documents.
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ARTICLE 3
INTEREST AND FEES
3.1 Interest.
(a) Interest Rates. All outstanding Obligations shall bear
interest on the unpaid principal amount thereof (including, to the extent
permitted by law, on interest thereon not paid when due) from the date made
until paid in full in cash at a rate determined by reference to the Base Rate or
the LIBOR Rate and Sections 3.1(a)(i) or (ii), as applicable, but not to exceed
the Maximum Rate described in Section 3.3. Subject to the provisions of Section
3.2, any of the Loans may be converted into, or continued as, Base Rate Loans or
LIBOR Rate Loans in the manner provided in Section 3.2. If at any time Loans are
outstanding with respect to which notice has not been delivered to the Agent in
accordance with the terms of this Agreement specifying the basis for determining
the interest rate applicable thereto, then those Loans shall be Base Rate Loans
and shall bear interest at a rate determined by reference to the Base Rate until
notice to the contrary has been given to the Agent and such notice has become
effective. Except as otherwise provided herein, the outstanding Obligations
shall bear interest as follows:
(i) For all Loans and other Obligations, which are
not LIBOR Rate Loans, then at a fluctuating per annum rate
equal to the Base Rate plus the respective Applicable Margins;
and
(ii) For all Loans and other Obligations, which are
LIBOR Rate Loans, then at a per annum rate equal to the LIBOR
Rate plus the respective Applicable Margins.
Each change in the Base Rate shall be reflected in the interest rate described
in (i) above as of the effective date of such change. All interest charges shall
be computed on the basis of a year of 360 days and actual days elapsed (which
results in more interest being paid than if computed on the basis of a 365-day
year). Interest accrued on all Loans will be payable in arrears on the first day
of each month hereafter.
(b) Default Rate. If any Default or Event of Default occurs
and is continuing and the Majority Lenders in their discretion so elect, then,
while any such Default or Event of Default is outstanding, all of the
Obligations shall bear interest at the Default Rate applicable thereto.
3.2 Conversion and Continuation Elections. (a) The Borrower may, upon
irrevocable written notice to the Agent in accordance with Subsection 3.2(b):
(i) elect, as of any Business Day, in the case of Base Rate
Loans to convert any
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such Loans (or any part thereof in an amount not less than $1,000,000,
or that is in an integral multiple of $1,000,000 in excess thereof)
into LIBOR Rate Loans; or
(ii) elect, as of the last day of the applicable Interest
Period, to continue any LIBOR Rate Loans having Interest Periods
expiring on such day (or any part thereof in an amount not less than
$1,000,000, or that is in an integral multiple of $1,000,000 in excess
thereof);
provided, that if at any time the aggregate amount of LIBOR Rate Loans in
respect of any Borrowing is reduced, by payment, prepayment, or conversion of
part thereof to be less than $1,000,000, such LIBOR Rate Loans shall
automatically convert into Base Rate Loans, and on and after such date the right
of the Borrower to continue such Loans as, and convert such Loans into, LIBOR
Rate Loans, as the case may be, shall terminate.
(b) The Borrower shall deliver a Notice of
Conversion/Continuation to be received by the Agent not later than 11:00 a.m.
(Chicago time) at least three Business Days in advance of the
Conversion/Continuation Date, if the Loans are to be converted into or continued
as LIBOR Rate Loans and specifying:
(i) the proposed Conversion/Continuation Date;
(ii) the aggregate amount of Loans to be converted or
renewed;
(iii) the type of Loans resulting from the proposed
conversion or continuation; and
(iv) the duration of the requested Interest Period, provided,
however, the Borrower may not select an Interest Period with respect to
any portion of the Loans which extends beyond an installment payment
date for the Loans unless, after giving effect to such election, the
portion of the Loans not subject to Interest Periods ending after such
installment payment date is equal to or greater than the principal due
on such installment payment date.
(c) If upon the expiration of any Interest Period applicable
to LIBOR Rate Loans, the Borrower has failed to select timely a new Interest
Period to be applicable to LIBOR Rate Loans or if any Default or Event of
Default then exists, the Borrower shall be deemed to have elected to convert
such LIBOR Rate Loans into Base Rate Loans effective as of the expiration date
of such Interest Period.
(d) The Agent will promptly notify each Lender of its receipt
of a Notice of Conversion/Continuation. All conversions and continuations shall
be made ratably according to the respective outstanding principal amounts of the
Loans with respect to which the notice was given held by each Lender.
(e) During the existence of a Default or Event of Default, the
Borrower may
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not elect to have a Loan converted into or continued as a LIBOR Rate Loan.
(f) After giving effect to any conversion or continuation of
Loans, there may not be more than five different Interest Periods in effect.
3.3 Maximum Interest Rate. In no event shall any interest rate provided
for hereunder exceed the maximum rate permissible for corporate borrowers under
applicable law for loans of the type provided for hereunder (the "Maximum
Rate"). If, in any month, any interest rate, absent such limitation, would have
exceeded the Maximum Rate, then the interest rate for that month shall be the
Maximum Rate, and, if in future months, that interest rate would otherwise be
less than the Maximum Rate, then that interest rate shall remain at the Maximum
Rate until such time as the amount of interest paid hereunder equals the amount
of interest which would have been paid if the same had not been limited by the
Maximum Rate. In the event that, upon payment in full of the Obligations under
this Agreement, the total amount of interest paid or accrued under the terms of
this Agreement is less than the total amount of interest which would, but for
this Section 3.3, have been paid or accrued if the interest rates otherwise set
forth in this Agreement had at all times been in effect, then the Borrower
shall, to the extent permitted by applicable law, pay the Agent, for the account
of the Lenders, an amount equal to the difference between (a) the lesser of (i)
the amount of interest which would have been charged if the Maximum Rate had, at
all times, been in effect or (ii) the amount of interest which would have
accrued had the interest rates otherwise set forth in this Agreement, at all
times, been in effect and (b) the amount of interest actually paid or accrued
under this Agreement. In the event that a court determines that the Agent and/or
any Lender has received interest and other charges hereunder in excess of the
Maximum Rate, such excess shall be deemed received on account of, and shall
automatically be applied to reduce, the Obligations other than interest, in the
inverse order of maturity, and if there are no Obligations outstanding, the
Agent and/or such Lender shall refund to the Borrower such exceSection.
3.4 Closing Fee. The Borrower agrees to pay the Agent the Closing Fee
and other fees in the amounts and at such times as are set forth in the Fee
Letter.
3.5 Unused Line Fee. The Borrower agrees to pay, on the first day of
each month and on the Termination Date, to the Agent, for the ratable account of
the Lenders, an unused line fee equal to three-eighth's of one percent (.375%)
per annum on the average daily Maximum CAPEX Amount during the immediately
preceding month or shorter period if calculated on the Termination Date. The
unused line fee shall be computed on the basis of a 360-day year for the actual
number of days elapsed. All payments received by the Agent on account of
Accounts or as proceeds of other Collateral shall be deemed to be credited to
the Borrower's Loan Account immediately upon receipt for purposes of calculating
the unused line fee pursuant to this Section 3.5.
3.6 [RESERVED].
3.7 [RESERVED].
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ARTICLE 4
PAYMENTS AND PREPAYMENTS
4.1 [RESERVED].
4.2 Termination of Facility. The Borrower may terminate this Agreement
upon at least ten (10) Business Days' notice to the Agent and the Lenders, upon
(i) the payment in full of all outstanding Loans, together with accrued interest
thereon, (ii) the payment in full in cash of all other Obligations together with
accrued interest thereon, and (iii) with respect to any LIBOR Rate Loans prepaid
in connection with such termination prior to the expiration date of the Interest
Period applicable thereto, the payment of the amounts described in Section 5.4.
4.3 [RESERVED].
4.4 Voluntary Prepayments of the Loans. The Borrower may prepay the
principal of the Loans in whole or in part, at any time and from time to time on
and after the Termination Date upon (i) at least five (5) Business Days' prior
written notice to the Agent and the Lenders, and (ii) payment of, with respect
to any LIBOR Rate Loans to be prepaid prior to the expiration date of the
Interest Period applicable thereto, the amounts described in Section 5.4. All
voluntary prepayments of the principal of the Loans pursuant to this Section 4.4
shall be accompanied by the payment of all accrued but unpaid interest on the
Loans to the date of prepayment. Any voluntary prepayment under this Section 4.4
of less than all of the outstanding principal of the Loans shall be applied to
the installments of principal of the Loans in the inverse order of maturity.
4.5 Mandatory Prepayments of the Term Loans. (a) On the first day of
the fourth month after the end of each Fiscal Year, the Borrower shall make a
prepayment of the principal of the Loans in an amount equal to 50% of Excess
Cash Flow for such Fiscal Year. Such prepayment shall be applied first, to the
outstanding principal amount of the Term Loan, in inverse order of maturity,
until paid in full, and second, pro rata to the outstanding principal amount of
the CAPEX Loans, in inverse order of maturity, until paid in full.
(b) On the first Business Day of each calendar month occurring
prior to the Termination Date, the Borrower shall make a payment of the
principal of the CAPEX Loan in an amount equal to the amount provided in each
CAPEX Loan Note.
(c) On the first Business Day of each calendar month occurring on
and after May 1, 1998 and prior to the Termination Date, the Borrower shall make
a payment of the principal of the Term Loan in an amount equal to $786,000.
(d) The Borrower shall pay the entire unpaid principal balance of
the Loans upon the Termination Date.
(e) The Borrower shall pay the entire unpaid principal balance of
the Loans upon the Termination Date under, and as defined in, the Loan and
Security Agreement.
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(f) Any payment under this Section 4.5 shall be accompanied by the
payment of all accrued but unpaid interest thereon. Any payment under this
Section 4.5 of less than all of the outstanding principal amount of the Loans
shall be applied, based upon the Pro Rata Shares of the Lenders, to the
installments of principal of the Loans in the inverse order of maturity. In
connection with any such payment, if any LIBOR Rate Loans are prepaid prior to
the expiration date of the Interest Period applicable thereto, the Borrower
shall pay to the Lenders the amounts described in Section 5.4.
4.6 Payments by the Borrower. (a) All payments to be made by the
Borrower shall be made without set-off, recoupment or counterclaim. Except as
otherwise expressly provided herein, all payments by the Borrower shall be made
to the Agent for the account of the Lenders at the Agent's address set forth in
Section 15.8, and shall be made in Dollars and in immediately available funds,
no later than 1:00 p.m. (Chicago time) on the date specified herein. Any payment
received by the Agent later than 1:00 p.m. (Chicago time) shall be deemed to
have been received on the following Business Day and any applicable interest or
fee shall continue to accrue.
(b) Subject to the provisions set forth in the definition of
"Interest Period" herein, whenever any payment is due on a day other than a
Business Day, such payment shall be made on the following Business Day, and such
extension of time shall in such case be included in the computation of interest
or fees, as the case may be.
(c) Unless the Agent receives notice from the Borrower prior to
the date on which any payment is due to the Lenders that the Borrower will not
make such payment in full as and when required, the Agent may assume that the
Borrower has made such payment in full to the Agent on such date in immediately
available funds and the Agent may (but shall not be so required), in reliance
upon such assumption, distribute to each Lender on such due date an amount equal
to the amount then due such Lender. If and to the extent the Borrower has not
made such payment in full to the Agent, each Lender shall repay to the Agent on
demand such amount distributed to such Lender, together with interest thereon at
the Federal Funds Rate for each day from the date such amount is distributed to
such Lender until the date repaid.
4.7 [RESERVED].
4.8 Apportionment, Application and Reversal of Payments. Aggregate
principal and interest payments shall be apportioned ratably among the Lenders
(according to the unpaid principal balance of the Loans to which such payments
relate held by each Lender) and payments of the fees shall, as applicable, be
apportioned ratably among the Lenders. All payments shall be remitted to the
Agent and all such payments not relating to principal or interest of specific
Loans, or not constituting payment of specific fees, and all proceeds of
Accounts or other Collateral, the Pledged Collateral or the Guarantor Collateral
received by the Agent, shall be applied, ratably, subject to the provisions of
this Agreement, first, to pay, pro rata, any fees, or expense reimbursements
then due to the Agent and the Revolving Loan Lender Agent from the Borrower
under this Agreement and the Loan and Security Agreement; second, to pay, pro
rata, any fees
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or expense reimbursements then due to the Lenders and the Revolving Loan Lenders
from the Borrower under this Agreement and the Loan and Security Agreement;
third, to pay, pro rata, interest due in respect of all Revolving Loans,
including BABC Loans and Agent Advances (as each such term is defined in the
Loan and Security Agreement), Term Loans and CAPEX Loans; fourth, to pay or
prepay, pro rata, principal of the BABC Loans and the Agent Advances, Revolving
Loans, unpaid reimbursement obligations in respect of Letters of Credit (as each
such term is defined in the Loan and Security Agreement), Term Loans and CAPEX
Loans; and fifth, to the payment, pro rata, of any other Obligation or Loan and
Security Agreement Obligation due to the Agent, the Revolving Loan Lender Agent,
any Lender or any Revolving Loan Lender by the Borrower. Notwithstanding
anything to the contrary contained in this Agreement, unless so directed by the
Borrower, or unless an Event of Default is outstanding, neither the Agent nor
any Lender shall apply any payments which it receives to any LIBOR Rate Loan,
except (i) on the expiration date of the Interest Period applicable to any such
LIBOR Rate Loan, or (ii) in the event, and only to the extent, that there are no
outstanding Base Rate Loans. The Agent shall promptly distribute to each Lender,
pursuant to the applicable wire transfer instructions received from each Lender
in writing, such funds as it may be entitled to receive. The Agent and the
Lenders shall have the continuing and exclusive right to apply and reverse and
reapply any and all such proceeds and payments to any portion of the Obligations
or Loan and Security Agreement Obligations, as the case may be.
4.9 Indemnity for Returned Payments. If, after receipt of any payment
of, or proceeds applied to the payment of, all or any part of the Obligations,
the Agent or any Lender is for any reason compelled to surrender such payment or
proceeds to any Person, because such payment or application of proceeds is
invalidated, declared fraudulent, set aside, determined to be void or voidable
as a preference, impermissible setoff, or a diversion of trust funds, or for any
other reason, then the Obligations or part thereof intended to be satisfied
shall be revived and continue and this Agreement shall continue in full force as
if such payment or proceeds had not been received by the Agent or such Lender,
and the Borrower shall be liable to pay to the Agent, and hereby does indemnify
the Agent and the Lenders and hold the Agent and the Lenders harmless for, the
amount of such payment or proceeds surrendered. The provisions of this Section
4.9 shall be and remain effective notwithstanding any contrary action which may
have been taken by the Agent or any Lender in reliance upon such payment or
application of proceeds, and any such contrary action so taken shall be without
prejudice to the Agent's and the Lenders' rights under this Agreement and shall
be deemed to have been conditioned upon such payment or application of proceeds
having become final and irrevocable. The provisions of this Section 4.9 shall
survive the termination of this Agreement.
4.10 Agent's and Lenders' Books and Records; Monthly Statements. The
Borrower agrees that the Agent's and each Lender's books and records showing the
Obligations and the transactions pursuant to this Agreement and the other Loan
Documents shall be admissible in any action or proceeding arising therefrom, and
shall constitute rebuttably presumptive proof thereof, irrespective of whether
any Obligation is also evidenced by a promissory note or other instrument. The
Agent will provide to the Borrower a monthly statement of Loans, payments, and
other transactions pursuant to this Agreement. Such statement shall, absent
manifest error, be deemed correct, accurate, and binding on the Borrower and an
account stated (except for
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reversals and reapplications of payments made as provided in Section 4.8 and
corrections of errors discovered by the Agent), unless the Borrower notifies the
Agent in writing to the contrary within forty-five (45) days after such
statement is rendered. In the event a timely written notice of objections is
given by the Borrower, only the items to which exception is expressly made will
be considered to be disputed by the Borrower.
ARTICLE 5
TAXES, YIELD PROTECTION AND ILLEGALITY
5.1 Taxes. (a) Any and all payments by the Borrower to each
Lender or the Agent under this Agreement and any other Loan Document shall be
made free and clear of, and without deduction or withholding for any Taxes. In
addition, the Borrower shall pay all Other Taxes.
(b) The Borrower agrees to indemnify and hold harmless each
Lender and the Agent for the full amount of Taxes or Other Taxes (including any
Taxes or Other Taxes imposed by any jurisdiction on amounts payable under this
Section) paid by the Lender or the Agent and any liability (including penalties,
interest, additions to tax and expenses) arising therefrom or with respect
thereto, whether or not such Taxes or Other Taxes were correctly or legally
asserted. Payment under this indemnification shall be made within 30 days after
the date the Lender or the Agent makes written demand therefor.
(c) If the Borrower shall be required by law to deduct or
withhold any Taxes or Other Taxes from or in respect of any sum payable
hereunder to any Lender or the Agent, then:
(i) the sum payable shall be increased as necessary so
that after making all required deductions and withholdings (including deductions
and withholdings applicable to additional sums payable under this Section) such
Lender or the Agent, as the case may be, receives an amount equal to the sum it
would have received had no such deductions or withholdings been made;
(ii) the Borrower shall make such deductions and
withholdings;
(iii) the Borrower shall pay the full amount deducted or
withheld to the relevant taxing authority or other authority in accordance with
applicable law; and
(iv) the Borrower shall also pay to each Lender or the
Agent for the account of such Lender, at the time interest is paid, all
additional amounts which the respective Lender specifies as necessary to
preserve the after-tax yield the Lender would have received if such Taxes or
Other Taxes had not been imposed.
(d) Within 30 days after the date of any payment by the
Borrower of Taxes or Other Taxes, the Borrower shall furnish the Agent the
original or a certified copy of a receipt evidencing payment thereof, or other
evidence of payment satisfactory to the Agent.
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(e) If the Borrower is required to pay additional amounts to
any Lender or the Agent pursuant to subsection (c) of this Section, then such
Lender shall use reasonable efforts (consistent with legal and regulatory
restrictions) to change the jurisdiction of its Lending Office so as to
eliminate any such additional payment by the Borrower which may thereafter
accrue, if such change in the judgment of such Lender is not otherwise
disadvantageous to such Lender.
5.2 Illegality. (a) If any Lender determines that the introduction
of any Requirement of Law, or any change in any Requirement of Law, or in the
interpretation or administration of any Requirement of Law, has made it
unlawful, or that any central bank or other Governmental Authority has asserted
that it is unlawful, for any Lender or its applicable Lending Office to make
LIBOR Rate Loans, then, on notice thereof by the Lender to the Borrower through
the Agent, any obligation of that Lender to make LIBOR Rate Loans shall be
suspended until the Lender notifies the Agent and the Borrower that the
circumstances giving rise to such determination no longer exist.
(b) If a Lender determines that it is unlawful to maintain any
LIBOR Rate Loan, the Borrower shall, upon its receipt of notice of such fact and
demand from such Lender (with a copy to the Agent), prepay in full such LIBOR
Rate Loans of that Lender then outstanding, together with interest accrued
thereon and amounts required under Section 5.4, either on the last day of the
Interest Period thereof, if the Lender may lawfully continue to maintain such
LIBOR Rate Loans to such day, or immediately, if the Lender may not lawfully
continue to maintain such LIBOR Rate Loan. If the Borrower is required to so
prepay any LIBOR Rate Loan, then concurrently with such prepayment, the Borrower
shall borrow from the affected Lender, in the amount of such repayment, a Base
Rate Loan.
5.3 Increased Costs and Reduction of Return. (a) If any Lender
determines that, due to either (i) the introduction of or any change in the
interpretation of any law or regulation or (ii) the compliance by that Lender
with any guideline or request from any central bank or other Governmental
Authority (whether or not having the force of law), there shall be any increase
in the cost to such Lender of agreeing to make or making, funding or maintaining
any LIBOR Rate Loans, then the Borrower shall be liable for, and shall from time
to time, upon demand (with a copy of such demand to be sent to the Agent), pay
to the Agent for the account of such Lender, additional amounts as are
sufficient to compensate such Lender for such increased costs.
(b) If any Lender shall have determined that (i) the
introduction of any Capital Adequacy Regulation, (ii) any change in any Capital
Adequacy Regulation, (iii) any change in the interpretation or administration of
any Capital Adequacy Regulation by any central bank or other Governmental
Authority charged with the interpretation or administration thereof, or (iv)
compliance by the Lender or any corporation controlling the Lender with any
Capital Adequacy Regulation, affects or would affect the amount of capital
required or expected to be maintained by the Lender or any corporation
controlling the Lender and (taking into consideration such Lender's or such
corporation's policies with respect to capital adequacy and such Lender's
desired return on capital) determines that the amount of such capital is
increased as a consequence of its Commitments, loans, credits or obligations
under this Agreement, then, upon demand of such
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Lender to the Borrower through the Agent, the Borrower shall pay to the Lender,
from time to time as specified by the Lender, additional amounts sufficient to
compensate the Lender for such increase.
5.4 Funding Losses. The Borrower shall reimburse each Lender and hold
each Lender harmless from any loss or expense which the Lender may sustain or
incur as a consequence of:
(i) the failure of the Borrower to make on a timely basis any
payment of principal of any LIBOR Rate Loan;
(ii) the failure of the Borrower to borrow, continue or convert a
Loan after the Borrower has given (or is deemed to have given) a Notice
of Borrowing or a Notice of Conversion/Continuation;
(iii) the prepayment or other payment (including after acceleration
thereof) of an LIBOR Rate Loan on a day that is not the last day of the
relevant Interest Period;
including any such loss or expense arising from the liquidation or reemployment
of funds obtained by it to maintain its LIBOR Rate Loans or from fees payable to
terminate the deposits from which such funds were obtained.
5.5 Inability to Determine Rates. If the Agent determines that for any
reason adequate and reasonable means do not exist for determining the LIBOR Rate
for any requested Interest Period with respect to a proposed LIBOR Rate Loan, or
that the LIBOR Rate for any requested Interest Period with respect to a proposed
LIBOR Rate Loan does not adequately and fairly reflect the cost to the Lenders
of funding such Loan, the Agent will promptly so notify the Borrower and each
Lender. Thereafter, the obligation of the Lenders to make or maintain LIBOR Rate
Loans hereunder shall be suspended until the Agent revokes such notice in
writing. Upon receipt of such notice, the Borrower may revoke any Notice of
Borrowing or Notice of Conversion/Continuation then submitted by it. If the
Borrower does not revoke such Notice, the Lenders shall make, convert or
continue the Loans, as proposed by the Borrower, in the amount specified in the
applicable notice submitted by the Borrower, but such Loans shall be made,
converted or continued as Base Rate Loans instead of LIBOR Rate Loans.
5.6 Certificates of Lenders. Any Lender claiming reimbursement or
compensation under this Article 5 shall deliver to the Borrower (with a copy to
the Agent) a certificate setting forth in reasonable detail the amount payable
to the Lender hereunder and such certificate shall be conclusive and binding on
the Borrower in the absence of manifest error.
5.7 Survival. The agreements and obligations of the Borrower in this
Article 5 shall survive the payment of all other Obligations. The Lender
requesting compensation pursuant to Article V shall provide notice to the
Borrower within 60 days after the date on which such Lender obtains actual
knowledge of any claim for compensation under said Article.
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ARTICLE 6
COLLATERAL
6.1 Grant of Security Interest. (a) As security for all present and
future Obligations, the Borrower hereby grants, and shall cause, on or prior to
the Closing Date, LDM Canada to grant, to the Agent, for the ratable benefit of
the Lenders, a continuing security interest in, lien on, and right of set-off
against, all of the following property of the Borrower and LDM Canada, whether
now owned or existing or hereafter acquired or arising, regardless of where
located:
(i) all Accounts;
(ii) all Inventory;
(iii) all contract rights, letters of credit,
Assigned Contracts, chattel paper, instruments, notes, documents, and
documents of title;
(iv) all General Intangibles;
(v) all Equipment;
(vi) all Fixtures;
(vii) all Proprietary Rights;
(viii) all Investment Property;
(ix) all money, securities, financial assets and
other property of any kind of the Borrower and of LDM Canada in the
possession or under the control of the Agent or any Lender, any
assignee of or participant in the Obligations, or a bailee of any such
party or such party's affiliates;
(x) all deposit accounts, credits and balances with
and other claims against the Agent or any Lender or any of its
affiliates or any other financial institution in which the Borrower or
LDM Canada maintains deposits;
(xi) all books, records and other property related to
or referring to any of the foregoing, including, without limitation,
books, records, account ledgers, data processing records, computer
software and other property and General Intangibles at any time
evidencing or relating to any of the foregoing; and
(xii) all accessions to, substitutions for and
replacements, products and proceeds of any of the foregoing, including,
but not limited to, proceeds of any insurance policies (other than
proceeds of key-man life insurance on which the Borrower is the
beneficiary), claims against third parties, and condemnation or
requisition payments with
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respect to all or any of the foregoing.
All of the foregoing, together with the Real Estate covered by the Mortgages,
and all other property of the Borrower or each Guarantor in which the Agent or
any Lender may at any time be granted a Lien, is herein collectively referred to
as the "Collateral."
(b) As security for all Obligations, the Borrower shall and
shall cause LDM Canada, on or prior to the Closing Date, to execute and deliver
to the Agent the Mortgages to grant to the Agent, for the ratable benefit of the
Lenders, a continuing mortgage lien on the Borrower's and each Guarantor's Real
Estate.
(c) All of the Obligations shall be secured by all of the
Collateral, the Pledged Collateral and the Guarantor Collateral. The Agent may,
subject to the provisions of Articles 13 and 14, in its sole discretion, (i)
exchange, waive, or release any of the Collateral, (ii) apply Collateral and
direct the order or manner of sale thereof as the Agent may determine, and (iii)
settle, compromise, collect, or otherwise liquidate any Collateral in any
manner, all without affecting the Obligations or the Agent's or any Lender's
right to take any other action with respect to any other Collateral.
6.2 Perfection and Protection of Security Interest. (a) The Borrower
shall, and shall cause each Guarantor to, at Borrower's expense, perform all
steps requested by the Agent at any time to perfect, maintain, protect, and
enforce the Agent's Liens, including, without limitation: (i) executing,
delivering and/or filing and recording of the Mortgages, the Intellectual
Property Security Agreement, the Pledge Agreement and the Guarantor Collateral
Documents and executing and filing financing or continuation statements, and
amendments thereof, in form and substance satisfactory to the Agent; (ii)
delivering to the Agent the originals of all instruments, documents, and chattel
paper, and all other Collateral, Pledged Collateral and Guarantor Collateral of
which the Agent determines it should have physical possession in order to
perfect and protect the Agent's security interest therein, duly pledged,
endorsed or assigned to the Agent without restriction; (iii) delivering to the
Agent warehouse receipts covering any portion of the Collateral located in
warehouses and for which warehouse receipts are issued; (iv) when an Event of
Default exists, transferring Inventory to warehouses designated by the Agent;
(v) placing notations on the Borrower's and each Guarantor's books of account to
disclose the Agent's security interest; (vii) delivering to the Agent all
letters of credit on which the Borrower or LDM Canada is named beneficiary; and
(viii) taking such other steps as are deemed necessary or desirable by the Agent
to maintain and protect the Agent's Liens. To the extent permitted by applicable
law, the Agent may file, without the Borrower's or a Guarantor's signature, one
or more financing statements disclosing the Agent's Liens. The Borrower agrees
that a carbon, photographic, photostatic, or other reproduction of this
Agreement or of a financing statement is sufficient as a financing statement.
(b) If any Collateral or Guarantor Collateral is at any time
in the possession or control of any warehouseman, bailee or any of the
Borrower's or LDM Canada's agents or processors, then the Borrower shall notify
the Agent thereof and shall notify or cause LDM Canada to notify such Person of
the Agent's security interest in such Collateral or Guarantor
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Collateral and, upon the Agent's request, instruct such Person to hold all such
Collateral or Guarantor Collateral for the Agent's account subject to the
Agent's instructions. If at any time any Collateral or Guarantor Collateral is
located on any operating facility of the Borrower or each Guarantor which is not
owned by the Borrower or LDM Canada, then the Borrower shall, at the request of
the Agent, obtain or cause LDM Canada to obtain written waivers, in form and
substance satisfactory to the Agent, of all present and future Liens to which
the owner or lessor of such premises may be entitled to assert against the
Collateral.
(c) From time to time, the Borrower shall, and shall cause
each Guarantor to, upon the Agent's request, execute and deliver confirmatory
written instruments pledging to the Agent, for the ratable benefit of the
Lenders, the Collateral, Pledged Collateral or Guarantor Collateral, as the case
may be, with respect to the Borrower or such Guarantor, but the Borrower's or
such Guarantor's failure to do so shall not affect or limit the Agent's security
interest or the Agent's other rights in and to the Collateral, Pledged
Collateral or Guarantor Collateral, as the case may be, with respect to the
Borrower or such Guarantor. So long as this Agreement is in effect and until all
Obligations have been fully satisfied, the Agent's Liens shall continue in full
force and effect in all Collateral, Pledged Collateral and Guarantor Collateral
(whether or not deemed as the basis for any advance, loan, extension of credit,
or other financial accommodation).
6.3 Location of Collateral. The Borrower represents and warrants to
the Agent and the Lenders that: (i) Schedule 6.3 is a correct and complete list
of the Borrower's and each Guarantor's chief executive office, the location of
its books and records, the locations of the Collateral and the Guarantor
Collateral with respect to the Borrower and such Guarantor, and the locations of
all of its other places of business; and (ii) Schedule 6.3 correctly identifies
any of such facilities and locations where Collateral and the Guarantor
Collateral is located that are not owned by the Borrower or the relevant
Guarantor and sets forth the names of the owners and lessors or sublessors of
and, to the best of the Borrower's knowledge, the holders of any mortgages on,
such facilities and locations. The Borrower covenants and agrees that it will
not and will not permit any Guarantor to (x) maintain any Collateral with
respect to the Borrower at any location other than those locations listed for
the Borrower, and with respect to any Guarantor at any location other than those
locations listed for such Guarantor, on Schedule 6.3, (y) otherwise change or
add to any of such locations, or (z) change the location of its chief executive
office from the location identified in Schedule 6.3, unless it gives the Agent
at least thirty (30) days' prior written notice thereof and executes any and all
financing statements and other documents that the Agent requests in connection
therewith. Without limiting the foregoing, the Borrower represents that all of
its and LDM Canada's Inventory is, and covenants that all of its Inventory will
be, located either (A) on premises owned by the Borrower or LDM Canada, as the
case may be, (B) on premises leased by the Borrower or LDM Canada, as the case
may be, provided that the Agent has received an executed landlord waiver from
the landlord of such premises in form and substance satisfactory to the Agent,
or (C) in a public warehouse; provided that the Agent has received an executed
bailee letter from the applicable public warehouseman in form and substance
satisfactory to the Agent. As to each location, the Agent for the benefit of
Lenders shall have filed state (and, to the extent required, local) UCC-1
financing statements; as to all leased and bailment location, the Borrower shall
use and shall cause each LDM Canada to
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use all reasonable efforts to obtain landlord and bailee waivers; as to all
bailment locations for which bailee waiver letters have not been obtained, the
Agent shall have delivered to the bailee a notice of lien under Article 9 of the
UCC.
6.4 Title to, Liens on, and Sale and Use of Collateral. The Borrower
represents and warrants to the Agent and the Lenders and agrees with the Agent
and the Lenders that: (i) all of the Collateral, Pledged Collateral and
Guarantor Collateral is and will continue to be owned by the Borrower or a
Guarantor, as the case may be, free and clear of all Liens whatsoever, except
for Permitted Liens; (ii) the Agent's Liens in the Collateral, Pledged
Collateral and Guarantor Collateral will not be subject to any prior Lien; (iii)
the Borrower will and will cause each Guarantor to use, store, and maintain the
Collateral, Pledged Collateral and Guarantor Collateral with all reasonable care
and will use such Collateral, Pledged Collateral or Guarantor Collateral for
lawful purposes only; and (iv) the Borrower will not, and will not permit any
Guarantor to, without the Agent's prior written approval, sell, or dispose of or
permit the sale or disposition of any of the Collateral, Pledged Collateral or
Guarantor Collateral, except for sales of Inventory in the ordinary course of
business and sales of Equipment as permitted by Section 6.11. The inclusion of
proceeds in the Collateral, Pledged Collateral or Guarantor Collateral, shall
not be deemed to constitute the Agent's or any Lender's consent to any sale or
other disposition of the Collateral, Pledged Collateral or Guarantor Collateral,
except as expressly permitted herein.
6.5 Appraisals. Whenever a Default or Event of Default exists, and at
such other times not more frequently than once every two years as the Agent
requests, the Borrower shall, at its expense and upon the Agent's request,
provide the Agent with appraisals or updates thereof of any or all of the
Collateral or Guarantor Collateral from an appraiser, and prepared on a basis,
satisfactory to the Agent, such appraisals and updates to include, without
limitation, information required by applicable law and regulation and by the
internal policies of the Lenders.
6.6 Access and Examination; Confidentiality. (a) The Agent, accompanied
by any Lender which so elects, may at all reasonable times (and at any time when
a Default or Event of Default exists) have access to, examine, audit, make
extracts from or copies of and inspect any or all of the Borrower's and each
Guarantor's records, files, and books of account and the Collateral, Pledged
Collateral and Guarantee Collateral, and discuss the Borrower's and such
Guarantor's affairs with the Borrower's and such Guarantor's officers and
management. The Borrower will deliver and will cause each Guarantor to deliver
to the Agent any instrument necessary for the Agent to obtain records from any
service bureau maintaining records for the Borrower or such Guarantor. The Agent
may, and at the direction of the Majority Lenders shall, at any time when a
Default or Event of Default exists, and at the Borrower' expense, make copies of
all of the Borrower's or any Guarantor's books and records, or require the
Borrower to deliver such copies to the Agent. The Agent may, without expense to
the Agent, use such of the Borrower's or any Guarantor's respective personnel,
supplies, and premises as may be reasonably necessary for maintaining or
enforcing the Agent's Liens. The Agent shall have the right, at any time, in the
Agent's name or in the name of a nominee of the Agent, to verify the validity,
amount or any other matter relating to the Accounts, Inventory, or other
Collateral, Pledged Collateral or Guarantor Collateral by mail, telephone, or
otherwise.
(b) The Borrower agrees that, subject to the Borrower's prior
consent, which
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consent shall not be unreasonably withheld or delayed, the Agent and each Lender
may use the Borrower's name in advertising and promotional material and in
conjunction therewith disclose the general terms of this Agreement. The Agent
and each Lender agree to take normal and reasonable precautions and exercise due
care to maintain the confidentiality of all information identified as
"confidential" or "secret" by the Borrower and provided to the Agent or such
Lender by or on behalf of the Borrower or any Guarantor, under this Agreement or
any other Loan Document, and neither the Agent, nor such Lender nor any of their
respective Affiliates shall use any such information other than in connection
with or in enforcement of this Agreement and the other Loan Documents, except to
the extent that such information (i) was or becomes generally available to the
public other than as a result of disclosure by the Agent or such Lender, or (ii)
was or becomes available on a nonconfidential basis from a source other than the
Borrower or a Guarantor, provided that such source is not bound by a
confidentiality agreement with the Borrower known to the Agent or such Lender;
provided, however, that the Agent and any Lender may disclose such information
(1) at the request or pursuant to any requirement of any Governmental Authority
to which the Agent or such Lender is subject or in connection with an
examination of the Agent or such Lender by any such Governmental Authority; (2)
pursuant to subpoena or other court process; (3) when required to do so in
accordance with the provisions of any applicable requirement of law; (4) to the
extent reasonably required in connection with any litigation or proceeding
(including, but not limited to, any bankruptcy proceeding) to which the Agent,
any Lender or their respective Affiliates may be party; (5) to the extent
reasonably required in connection with the exercise of any remedy hereunder or
under any other Loan Document; (6) to the Agent's or such Lender's independent
auditors, accountants, attorneys and other professional advisors; (7) to any
Affiliate of the Agent or such Lender, or to any Participating Lender or
assignee under any Assignment and Acceptance, actual or potential, provided that
such affiliate, Participating Lender or assignee agrees to keep such information
confidential to the same extent required of the Agent and the Lenders hereunder;
and (8) as expressly permitted under the terms of any other document or
agreement regarding confidentiality to which the Borrower or a Guarantor is
party or is deemed party with the Agent or such Lender.
6.7 Collateral Reporting. The Borrower shall provide the Agent with
such reports as to the Collateral or Guarantor Collateral of the Borrower or as
to the Guarantor Collateral of LDM Canada as the Agent shall reasonably request
from time to time, together with a certificate of an officer of the Borrower
certifying as to the accuracy and completeness of the foregoing.
6.8 Accounts. (a) The Borrower hereby represents and warrants to the
Agent and the Lenders, with respect to the Accounts, that: (i) each existing
Account represents, and each future Account will represent, a bona fide sale or
lease and delivery of goods by the Borrower or LDM Canada, or rendition of
services by the Borrower or LDM Canada, in the ordinary course of the Borrower's
or LDM Canada's business; (ii) each existing Account is, and each future Account
will be, for a liquidated amount payable by the Account Debtor thereon on the
terms set forth in the invoice therefor or in the schedule thereof delivered to
the Agent, without any offset, deduction, defense, or counterclaim except those
known to the Borrower and disclosed to the Agent and the Lenders pursuant to
this Agreement; (iii) no payment will be received with respect to any Account,
and no credit, discount, or extension, or agreement therefor will be granted on
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any Account, except as reported to the Agent and the Lenders in accordance with
this Agreement; (iv) each copy of an invoice delivered to the Agent by the
Borrower will be a genuine copy of the original invoice sent to the Account
Debtor named therein; and (v) all goods described in each invoice will have been
delivered to the Account Debtor and all services of the Borrower or LDM Canada
described in each invoice will have been performed.
(b) Borrower shall not and shall not cause or permit LDM
Canada to re-date any invoice or sale or make sales on extended dating beyond
that customary in the Borrower's business or extend or modify any Account. If
the Borrower becomes aware of any matter adversely affecting the collectability
of any Account or Account Debtor involving an amount greater than $500,000,
including information regarding the Account Debtor's creditworthiness, the
Borrower will promptly so advise the Agent.
(c) Borrower shall not and shall not cause or permit LDM
Canada to accept any note or other instrument (except a check or other
instrument for the immediate payment of money) with respect to any Account
without the Agent's written consent. If the Agent consents to the acceptance of
any such instrument, it shall be considered as evidence of the Account and not
payment thereof and the Borrower will promptly deliver such instrument to the
Agent, endorsed by the Borrower or LDM Canada, as the case may be, to the Agent
in a manner satisfactory in form and substance to the Agent. Regardless of the
form of presentment, demand, notice of protest with respect thereto, the
Borrower or LDM Canada, as the case may be, shall remain liable thereon until
such instrument is paid in full.
(d) The Borrower shall notify the Agent promptly of all
disputes and claims in excess of $500,000, individually, or $1,500,000 in the
aggregate with any Account Debtor, and agrees to settle, contest, or adjust such
dispute or claim at no expense to the Agent or any Lender. No discount, credit
or allowance shall be granted to any Account Debtor other than normal and
customary discounts and allowances without the Agent's prior written consent,
except for discounts, credits and allowances made or given in the ordinary
course of the Borrower's or LDM Canada's, as the case may be, business when no
Event of Default exists hereunder. The Borrower shall send the Agent a copy of
each credit memorandum in excess of $500,000 as soon as issued. The Agent may,
and at the direction of the Majority Lenders shall, at all times when an Event
of Default exists hereunder, settle or adjust disputes and claims directly with
Account Debtors for amounts and upon terms which the Agent or the Majority
Lenders, as applicable, shall consider advisable and, in all cases, the Agent
will credit the Borrower's Loan Account with only the net amounts received by
the Agent in payment of any Accounts.
(e) If an Account Debtor returns any Inventory to the Borrower
or LDM Canada when no Event of Default exists, then the Borrower shall promptly
determine or shall cause LDM Canada to promptly determine the reason for such
return and shall issue a credit memorandum to the Account Debtor in the
appropriate amount. The Borrower shall immediately report to the Agent any
return involving an amount in excess of $500,000. Each such report shall
indicate the reasons for the returns and the locations and condition of the
returned Inventory. In the event any Account Debtor returns Inventory to the
Borrower or LDM Canada when an Event of Default exists, the Borrower, upon
request of the Agent, shall, and shall cause LDM Canada
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to: (i) hold the returned Inventory in trust for the Agent; (ii) segregate all
returned Inventory from all of its other property; (iii) dispose of the returned
Inventory solely according to the Agent's written instructions; and (iv) not
issue any credits or allowances with respect thereto without the Agent's prior
written consent. All returned Inventory shall be subject to the Agent's Liens
thereon.
6.9 Collection of Accounts; Payments. (a) Until the Agent notifies the
Borrower to the contrary, the Borrower shall and shall cause LDM Canada to make
collection of all Accounts and other Collateral and Guarantor Collateral for the
Agent, shall and shall cause LDM Canada to receive all payments as the Agent's
trustee, and shall immediately deliver all payments in their original form duly
endorsed in blank into a Payment Account established for the account of the
Borrower or LDM Canada, as applicable at a bank acceptable to Agent and subject
to documentation acceptable to Agent. The Borrower shall and shall cause LDM
Canada to establish a lock-box service for collections of Accounts at a bank
acceptable to the Agent and pursuant to documentation satisfactory to the Agent.
The Borrower shall and shall cause LDM Canada to instruct all Account Debtors to
make all payments directly to the address established for such service. If,
notwithstanding such instructions, the Borrower or LDM Canada, as applicable,
receives any proceeds of Accounts, it shall receive such payments as the Agent's
trustee, and shall immediately deliver such payments to the Agent in their
original form duly endorsed in blank or deposit them into a Payment Account, as
the Agent may direct. All collections received in any such lock-box or Payment
Account or directly by the Borrower or LDM Canada, as the case may be, or the
Agent, and all funds in any Payment Account or other account to which such
collections are deposited shall be subject to the Agent's sole control. The
Agent or the Agent's designee may, at any time, notify Account Debtors that the
Accounts have been assigned to the Agent and of the Agent's security interest
therein. If an Event of Default shall have occurred and be continuing, the Agent
may collect the Accounts directly and charge the collection costs and expenses
to the Borrower's Loan Account as a Revolving Loan. When an Event of Default
exists, the Borrower, at the Agent's request, shall execute and deliver and
shall cause LDM Canada to execute and deliver to the Agent such documents as the
Agent shall require to grant the Agent access to any post office box in which
collections of Accounts are received.
(b) If sales of Inventory are made for cash, the Borrower
shall and shall cause LDM Canada to immediately deliver to the Agent or deposit
into a Payment Account the identical checks, cash, or other forms of payment
which the Borrower receives.
(c) All payments, including immediately available funds
received by the Agent at a bank designated by it, received by the Agent on
account of Accounts or as proceeds of other Collateral will be the Agent's sole
property for the benefit of the Lenders and will be credited to the Borrower's
Loan Account on the same Business Day as such payments are received in
immediately available funds.
(d) Notwithstanding anything to the contrary herein and in
particular Section 4.8, all proceeds and collections of LDM Canada's Accounts
and other Collateral and payments received by the Agent and/or Lenders from LDM
Canada shall be applied to fees and expense
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reimbursements not in the nature of interest for the purposes of the Income Tax
Act of Canada and to principal before being applied to interest due or fees and
expense reimbursements which are or may be in the nature of interest payments
for the purposes of the Income Tax Act of Canada.
6.10 Inventory; Perpetual Inventory. The Borrower represents and
warrants to the Agent and the Lenders and agrees with the Agent and the Lenders
that all of the Inventory owned by the Borrower or LDM Canada is and will be
held for sale or lease, or to be furnished in connection with the rendition of
services, in the ordinary course of the Borrower's or LDM Canada's business, and
is and will be fit for such purposes. The Borrower will keep and will cause LDM
Canada to keep its Inventory in good and marketable condition, at its own
expense. Borrower will not, and will not permit LDM Canada to, without the prior
written consent of the Agent, acquire or accept any Inventory on consignment or
approval. The Borrower agrees that all Inventory produced in the United States
will be produced in accordance with the Federal Fair Labor Standards Act of
1938, as amended, and all rules, regulations, and orders thereunder. The
Borrower will conduct a monthly physical count of the Inventory (and after and
during the continuation of an Event of Default, at such other times as the Agent
requests) and deliver a summary of the results thereof to the Agent within
thirty (30) days after the last day of each calendar month until the Borrower
has implemented a perpetual inventory system for the Borrower and LDM Canada and
the Agent is satisfied with the test count results as a verification of the
accuracy of those perpetual inventory systems. The Borrower will not, and will
not permit LDM Canada to, without the Agent's written consent, sell any
Inventory on a xxxx-and-hold, guaranteed sale, sale and return, sale on
approval, consignment, or other repurchase or return basis.
6.11 Equipment. (a) The Borrower represents and warrants to the Agent
and the Lenders and agrees with the Agent and the Lenders that all of the
Equipment owned by the Borrower or LDM Canada is and will be used or held for
use in the Borrower's or LDM Canada's, as the case may be, business, and is and
will be fit for such purposes. The Borrower shall keep and maintain and shall
cause LDM Canada to keep and maintain its Equipment in good operating condition
and repair (ordinary wear and tear excepted) and shall make all necessary
replacements thereof.
(b) The Borrower shall promptly inform the Agent of any
material additions to or deletions from the Equipment. The Borrower shall not
permit any Equipment to become a fixture with respect to real property or to
become an accession with respect to other personal property with respect to
which real or personal property the Agent does not have a Lien. The Borrower
will not and will not permit LDM Canada, without the Agent's prior written
consent, alter or remove any identifying symbol or number on any of the
Borrower's or LDM Canada's Equipment consisting of Collateral or Guarantor
Collateral, as the case may be.
(c) The Borrower shall not, and shall not permit LDM Canada
to, without the Lender's prior written consent, sell, lease as a lessor, or
otherwise dispose of any of the Borrower's or LDM Canada's Equipment; provided,
however, that the Borrower and LDM Canada may dispose of obsolete or unusable
Equipment having an orderly liquidation value no
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greater than $500,000 in the aggregate in any Fiscal Year, without the Lender's
consent, subject to the conditions set forth in the next sentence. In the event
any of such Equipment is sold, transferred or otherwise disposed of pursuant to
the proviso contained in the immediately preceding sentence, (1) if such sale,
transfer or disposition is effected without replacement of such Equipment, or
such Equipment is replaced by Equipment leased by the Borrower or LDM Canada or
by Equipment purchased by the Borrower or LDM Canada subject to a Lien, then the
Borrower shall deliver or cause LDM Canada to deliver all of the cash proceeds
of any such sale, transfer or disposition to the Agent, which proceeds shall be
applied to the reduction of the Obligations in the order provided in Section
4.8, or (2) if such sale, transfer or disposition is made in connection with the
purchase by the Borrower or LDM Canada of replacement Equipment, then the
Borrower shall use or shall cause LDM Canada to use, as the case may be, the
proceeds of such sale, transfer or disposition to purchase such replacement
Equipment and shall deliver to the Agent written evidence of the use of the
proceeds for such purchase. All replacement Equipment purchased by the Borrower
or LDM Canada shall be free and clear of all Liens except the Agent's Lien.
6.12 Assigned Contracts. The Borrower shall and shall cause LDM Canada
to fully perform all of its obligations under each of the Borrower's or LDM
Canada's Assigned Contracts, and shall enforce and shall cause LDM Canada to
enforce all of its rights and remedies thereunder as it deems appropriate in its
business judgment; provided, however, that the Borrower shall not and shall not
permit LDM Canada to take any action or fail to take any action with respect to
its Assigned Contracts which would result in a waiver or other loss of any
material right or remedy of the Borrower or LDM Canada thereunder. Without
limiting the generality of the foregoing, the Borrower shall take and shall
cause LDM Canada to take all action necessary or appropriate to permit, and
shall not take any action which would have any materially adverse effect upon,
the full enforcement of all indemnification rights under its Assigned Contracts.
The Borrower shall not and shall not permit LDM Canada to, without the Agent's
and the Majority Lender's prior written consent, modify, amend, supplement,
compromise, satisfy, release, or discharge any of its Assigned Contracts, any
collateral securing the same, any Person liable directly or indirectly with
respect thereto, or any agreement relating to any of its Assigned Contracts or
the collateral therefor. The Borrower shall notify the Agent and the Lenders in
writing, promptly after the Borrower or LDM Canada becomes aware thereof, of any
event or fact which could give rise to a claim by it for indemnification under
any of its Assigned Contracts, and shall diligently pursue or cause LDM Canada
diligently to pursue such right and report to the Agent on all further
developments with respect thereto. The Borrower shall remit directly to the
Agent for application to the Obligations in such order as the Majority Lenders
shall determine, all amounts received by the Borrower or LDM Canada as
indemnification or otherwise pursuant to its Assigned Contracts. If the Borrower
or LDM Canada shall fail after the Agent's demand to pursue diligently any right
under its Assigned Contracts, or if an Event of Default then exists, the Agent
may, and at the direction of the Majority Lenders shall, directly enforce such
right in its own or the Borrower's or LDM Canada's name and may enter into such
settlements or other agreements with respect thereto as the Agent or the
Majority Lenders, as applicable, shall determine. In any suit, proceeding or
action brought by the Agent for the benefit of the Lenders under any Assigned
Contract for any sum owing thereunder or to enforce any provision thereof, the
Borrower shall indemnify and hold the Agent and Lenders harmless from and
against all
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expense, loss or damage suffered by reason of any defense, setoff,
counterclaims, recoupment, or reduction of liability whatsoever of the obligor
thereunder arising out of a breach by the Borrower or LDM Canada of any
obligation thereunder or arising out of any other agreement, indebtedness or
liability at any time owing from the Borrower or LDM Canada to or in favor of
such obligor or its successors. All such obligations of the Borrower or LDM
Canada shall be and remain enforceable only against the Borrower or LDM Canada,
as the case may be, and shall not be enforceable against the Agent.
Notwithstanding any provision hereof to the contrary, the Borrower or LDM
Canada, as the case may be, shall at all times remain liable to observe and
perform all of its duties and obligations under its Assigned Contracts, and the
Agent's or any Lender's exercise of any of their respective rights with respect
to the Collateral shall not release the Borrower or LDM Canada, as the case may
be, from any of such duties and obligations. Neither the Agent nor any Lender
shall be obligated to perform or fulfill any of the Borrower's or LDM Canada's
duties or obligations under its Assigned Contracts or to make any payment
thereunder, or to make any inquiry as to the nature or sufficiency of any
payment or property received by it thereunder or the sufficiency of performance
by any party thereunder, or to present or file any claim, or to take any action
to collect or enforce any performance, any payment of any amounts, or any
delivery of any property.
6.13 Documents, Instruments, and Chattel Paper. The Borrower represents
and warrants to the Agent and the Lenders that (i) all documents, instruments,
and chattel paper describing, evidencing, or constituting Collateral, Pledged
Collateral or Guarantor Collateral, as the case may be, and all signatures and
endorsements thereon, are and will be complete, valid, and genuine, and (ii) all
goods evidenced by such documents, instruments, and chattel paper are and will
be owned by the Borrower or a Guarantor, as the case may be, free and clear of
all Liens other than Permitted Liens. The Borrower agrees that it shall deliver
and shall cause each Guarantor to deliver to the Agent, at the Closing Date, and
thereafter, promptly upon obtaining possession thereof, the originals of all
instruments and chattel paper received by the Borrower or such Guarantor.
6.14 Right to Cure. The Agent may, in its discretion, and shall, at the
direction of the Majority Lenders, pay any amount or do any act required of the
Borrower or any Guarantor hereunder or under any other Loan Document in order to
preserve, protect, maintain or enforce the Obligations, the Collateral, Pledge
Collateral or Guarantor Collateral, or the Agent's Liens therein, and which the
Borrower or such Guarantor, as the case may be, fails to pay or do, including,
without limitation, payment of any judgment against the Borrower or such
Guarantor, any insurance premium, any warehouse charge, any finishing or
processing charge, any landlord's claim, and any other Lien upon or with respect
to the Collateral, Pledged Collateral or Guarantor Collateral. All payments that
the Agent makes under this Section 6.14 and all out-of-pocket costs and expenses
that the Agent pays or incurs in connection with any action taken by it
hereunder shall be charged to the Borrower's Loan Account (as defined in the
Loan and Security Agreement) as a Revolving Loan . Any payment made or other
action taken by the Agent under this Section 6.14 shall be without prejudice to
any right to assert an Event of Default hereunder and to proceed thereafter as
herein provided.
6.15 Power of Attorney. The Borrower hereby appoints the Agent and the
Agent's
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designee as the Borrower's attorney, with power: (i) to endorse the Borrower's
name on any checks, notes, acceptances, money orders, or other forms of payment
or security that come into the Agent's or any Lender's possession; (ii) to sign
the Borrower's name on any invoice, xxxx of lading, warehouse receipt or other
document of title relating to any Collateral, on drafts against customers, on
assignments of Accounts, on notices of assignment, financing statements and
other public records; (iii) to notify the post office authorities, when an Event
of Default exists, to change the address for delivery of the Borrower's mail to
an address designated by the Agent and to receive, open and dispose of all mail
addressed to the Borrower; (iv) to send requests for verification of Accounts to
customers or Account Debtors; (v) to clear Inventory, the purchase of which was
financed with Letters of Credit, through customs in the Borrower's name, the
Agent's name or the name of the Agent's designee, and to sign and deliver to
customs officials powers of attorney in the Borrower's name for such purpose;
and (vi) to do all things necessary to carry out this Agreement. The Borrower
ratifies and approves all acts of such attorney. None of the Lenders or the
Agent nor their attorneys will be liable for any acts or omissions or for any
error of judgment or mistake of fact or law other than as a result of such
Person's gross negligence or willful misconduct. This power, being coupled with
an interest, is irrevocable until this Agreement has been terminated and the
Obligations have been fully satisfied.
6.16 The Agent's and Lenders' Rights, Duties and Liabilities. The
Borrower assumes all responsibility and liability arising from or relating to
the use, sale or other disposition of the Collateral, Pledged Collateral or
Guarantor Collateral. Neither the Agent, nor any Lender, nor any of their
respective officers, directors, employees or agents shall be liable or
responsible in any way for the safekeeping of any of the Collateral, Pledged
Collateral or Guarantor Collateral, or for any loss or damage thereto, or for
any diminution in the value thereof, or for any act of default of any
warehouseman, carrier, forwarding agency or other person whomsoever, all of
which shall be at the Borrower's sole risk. The Obligations shall not be
affected by any failure of the Agent or any Lender to take any steps to perfect
the Agent's Liens or to collect or realize upon the Collateral, Pledged
Collateral or Guarantor Collateral, nor shall loss of or damage to the
Collateral, Pledged Collateral or Guarantor Collateral release the Borrower from
any of the Obligations. Upon the occurrence and continuance of an Event of
Default, the Agent may (but shall not be required to), and at the direction of
the Majority Lenders shall, without notice to or consent from the Borrower, xxx
upon or otherwise collect, extend the time for payment of, modify or amend the
terms of, compromise or settle for cash, credit, or otherwise upon any terms,
grant other indulgences, extensions, renewals, compositions, or releases, and
take or omit to take any other action with respect to the Collateral, Pledged
Collateral or Guarantor Collateral, any security therefor, any agreement
relating thereto, any insurance applicable thereto, or any Person liable
directly or indirectly in connection with any of the foregoing, without
discharging or otherwise affecting the liability of the Borrower for the
Obligations or under this Agreement or any other agreement now or hereafter
existing between the Agent and/or any Lender and the Borrower.
ARTICLE 7
BOOKS AND RECORDS; FINANCIAL INFORMATION; NOTICES
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7.1 Books and Records. The Borrower shall and shall cause each
Subsidiary to maintain, at all times, correct and complete books, records and
accounts in which complete, correct and timely entries are made of their
respective transactions in accordance with GAAP applied consistently with the
audited Financial Statements required to be delivered pursuant to Section
7.2(a). The Borrower shall and shall cause each Subsidiary to, by means of
appropriate entries, reflect in such accounts and in all Financial Statements
proper liabilities and reserves for all taxes and proper provision for
depreciation and amortization of property and bad debts, all in accordance with
GAAP. The Borrower shall and shall cause each Subsidiary to maintain at all
times books and records pertaining to the Collateral, Pledged Collateral and
Guarantor Collateral in such detail, form and scope as the Agent or any Lender
shall reasonably require, including, but not limited to, records of (a) all
payments received and all credits and extensions granted with respect to the
Accounts; (b) the return, rejections, repossession, stoppage in transit, loss,
damage, or destruction of any Inventory; and (c) all other dealings affecting
the Collateral, Pledged Collateral and Guarantor Collateral.
7.2 Financial Information. The Borrower shall promptly furnish to the
Agent (and the Agent shall supply each Lender with a copy of) all such financial
information as the Agent or any Lender shall reasonably request, and notify its
auditors and accountants that the Agent, on behalf of the Lenders, is authorized
to obtain such information directly from them. Without limiting the foregoing,
the Borrower will furnish to the Agent, in sufficient copies for distribution by
the Agent to each Lender, in such detail as the Agent or the Lenders shall
request, the following:
(a) As soon as available, but in any event not later than
ninety (90) days after the close of each Fiscal Year, consolidated
audited and consolidating audited balance sheets, and statements of
income and expense, cash flow and of stockholders' equity for the
Borrower and its Subsidiaries for such Fiscal Year and separate
unaudited consolidated financial statements (as described above) for
Borrower and its Subsidiaries, for such Fiscal Year, prepared by the
Borrower's outside auditors, in each case, with the accompanying notes
thereto, setting forth in each case in comparative form figures for the
previous Fiscal Year, all in reasonable detail, fairly presenting the
financial position and the results of operations of the Borrower and
its consolidated Subsidiaries as at the date thereof and for the Fiscal
Year then ended, and prepared in accordance with GAAP. Such statements
shall be examined in accordance with generally accepted auditing
standards by and, in the case of such statements performed on a
consolidated basis, accompanied by a report thereon unqualified as to
scope of independent certified public accountants selected by the
Borrower and reasonably satisfactory to the Agent. The Borrower,
simultaneously with retaining such independent public accountants to
conduct such annual audit, shall send a letter to such accountants,
with a copy to the Agent and the Lenders, notifying such accountants
that one of the primary purposes for retaining such accountants'
services and having audited financial statements prepared by them is
for use by the Agent and the Lenders.
(b) As soon as available, but in any event not later than
thirty (30) days after
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the end of each month, consolidated and consolidating unaudited balance
sheets of the Borrower and its consolidated Subsidiaries (and of the
Borrower and its Subsidiaries) as at the end of such month, and
consolidated and consolidating unaudited statements of income and
expense and cash flow for the Borrower and its consolidated
Subsidiaries (and of the Borrower and its Subsidiaries) for such month
and for the period from the beginning of the Fiscal Year to the end of
such month, all in reasonable detail, fairly presenting the financial
position and results of operations of the Borrower and its consolidated
Subsidiaries (and of the Borrower and its Subsidiaries) as at the date
thereof and for such periods, and prepared in accordance with GAAP
applied consistently with the audited Financial Statements required to
be delivered pursuant to Section 7.2(a). The Borrower shall certify by
a certificate signed by its the chief financial officer or director of
finance that all such statements have been prepared in accordance with
GAAP and present fairly, subject to normal year-end adjustments, the
Borrower's financial position as at the dates thereof and its results
of operations for the periods then ended.
(c) With each of the audited Financial Statements delivered
pursuant to Section 7.2(a), a certificate of the independent certified
public accountants that examined such statement to the effect that they
have reviewed and are familiar with this Agreement and that, in
examining such Financial Statements, they did not become aware of any
fact or condition which then constituted a Default or Event of Default
under Sections 9.23 through 9.26, inclusive, except for those, if any,
described in reasonable detail in such certificate.
(d) With each of the annual audited Financial Statements
delivered pursuant to Section 7.2(a), and within forty-five (45) days
after the end of each fiscal quarter, a certificate of the chief
financial officer or director of finance of the Borrower (i) setting
forth in reasonable detail the calculations required to establish that
the Borrower was in compliance with the covenants set forth in Sections
9.23 through 9.26, inclusive, during the period covered in such
Financial Statements and as at the end thereof, and (ii) stating that,
except as explained in reasonable detail in such certificate, (A) all
of the representations and warranties of the Borrower contained in this
Agreement and the other Loan Documents are correct and complete in all
material respects as at the date of such certificate as if made at such
time, (B) the Borrower is, at the date of such certificate, in
compliance in all material respects with all of their respective
covenants and agreements in this Agreement and the other Loan
Documents, (C) no Default or Event of Default then exists or existed
during the period covered by such Financial Statements, (D) describing
and analyzing in reasonable detail all material trends, changes, and
developments in each and all Financial Statements; and (E) explaining
the variances of the figures in the corresponding budgets and prior
Fiscal Year financial statements. If such certificate discloses that a
representation or warranty is not correct or complete, or that a
covenant has not been complied with, or that a Default or Event of
Default existed or exists, such certificate shall set forth what action
the Borrower has taken or proposes to take with respect thereto.
(e) No sooner than 60 days and not less than 30 days prior to
the beginning of
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each Fiscal Year, annual forecasts (to include forecasted consolidated
and consolidating balance sheets, statements of income and expenses and
statements of cash flow) for the Borrower and its Subsidiaries as at
the end of and for each month of such Fiscal Year.
(f) Promptly after filing with the PBGC and the IRS or any
other Governmental Authority, a copy of each annual report or other
filing filed with respect to each Plan of the Borrower or any
Subsidiary.
(g) Promptly upon the filing thereof, copies of all reports,
if any, to or other documents filed by the Borrower or any of its
Subsidiaries with the Securities and Exchange Commission under the
Exchange Act, and all reports, notices, or statements sent or received
by the Borrower or any of its Subsidiaries to or from the holders of
any equity interests of the Borrower (other than routine non-material
correspondence sent by shareholders of the Borrower to the Borrower) or
any such Subsidiary or of any Debt for borrowed money of the Borrower
or any of its Subsidiaries registered under the Securities Act of 1933
or to or from the trustee under any indenture under which the same is
issued.
(h) As soon as available, but in any event not later than 15
days after the Borrower's receipt thereof, a copy of all management
reports and management letters prepared for the Borrower by Ernst &
Young LLP or any other independent certified public accountants of the
Borrower.
(i) Promptly after their preparation, copies of any and all
proxy statements, financial statements, and reports which the Borrower
makes available to its stockholders.
(j) Promptly after filing with the IRS or Revenue Canada, a
copy of each tax return filed by the Borrower or by any of its
Subsidiaries.
(k) Such additional information as the Agent and/or any Lender
may from time to time reasonably request regarding the financial and
business affairs of the Borrower or any Subsidiary.
7.3 Notices to the Lenders. The Borrower shall notify the Agent, in
writing of the following matters at the following times:
(a) Immediately after becoming aware of any Default or Event
of Default.
(b) Immediately after becoming aware of the assertion by the
holder of any capital stock of the Borrower or Subsidiary thereof or of
any Debt in an outstanding principal amount in excess of $1,000,000
that a default exists with respect thereto or that the Borrower is not
in compliance with the terms thereof, or the threat or commencement by
such holder of any enforcement action because of such asserted default
or non-compliance.
(c) Immediately after becoming aware of any material adverse
change in the
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Borrower's or any Subsidiary's property, business, operations, or
condition (financial or otherwise).
(d) Immediately after becoming aware of any pending or
threatened action, suit, proceeding, or counterclaim by any Person, or
any pending or threatened investigation by a Governmental Authority,
which action, suit, proceeding, counterclaim or investigation seeks
damages in excess of $1,000,000 (which amount shall not be fully
covered by insurance), or which may otherwise materially and adversely
affect the Collateral, Pledged Collateral or Guarantor Collateral, the
repayment of the Obligations, the Agent's or any Lender's rights under
the Loan Documents, or the Borrower's or any Subsidiary's property,
business, operations, or condition (financial or otherwise).
(e) Immediately after becoming aware of any pending or
threatened strike, work stoppage, unfair labor practice claim, or other
labor dispute affecting the Borrower or any of its Subsidiaries in a
manner which could reasonably be expected to have a Material Adverse
Effect.
(f) Immediately after becoming aware of any violation of any
law, statute, regulation, or ordinance of a Governmental Authority
affecting the Borrower which could reasonably be expected to have a
Material Adverse Effect.
(g) Immediately after receipt of any notice of any violation
by the Borrower or any of its Subsidiaries of any Environmental Law
which could reasonably be expected to have a Material Adverse Affect or
that any Governmental Authority has asserted that the Borrower or any
Subsidiary thereof is not in compliance with any Environmental Law.
(h) Immediately after receipt of any written notice that the
Borrower or any of its Subsidiaries is or may be liable to any Person
as a result of the Release or threatened Release of any Contaminant or
that the Borrower or any Subsidiary is subject to investigation by any
Governmental Authority evaluating whether any remedial action is needed
to respond to the Release or threatened Release of any Contaminant
which, in either case, is reasonably likely to give rise to liability
in excess of $1,000,000.
(i) Immediately after receipt of any written notice of the
imposition of any Environmental Lien against any property of the
Borrower or any of its Subsidiaries.
(j) Any change in the Borrower's or LDM Canada's name, state
of incorporation, or form of organization, trade names or styles under
which the Borrower or LDM Canada will sell Inventory or create
Accounts, or to which instruments in payment of Accounts may be made
payable, in each case at least thirty (30) days prior thereto.
(k) Within ten (10) Business Days after the Borrower, any
Subsidiary or any ERISA Affiliate knows or has reason to know, that an
ERISA Event or a prohibited transaction (as defined in Sections 406 of
ERISA and 4975 of the Code) has occurred, and, when known, any action
taken or threatened by the IRS, the DOL, the PBGC or any
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other Governmental Authority with respect thereto.
(l) Upon request, or, in the event that such filing reflects a
significant change with respect to the matters covered thereby, within
three (3) Business Days after the filing thereof with the PBGC, the
DOL, the IRS, the Pension Commission of Ontario or any other applicable
Governmental Authority, as applicable, copies of the following: (i)
each annual report (form 5500 series), including Schedule B thereto,
filed with the PBGC, the DOL or the IRS with respect to each Plan and,
in the case of any Plan governed by PBA, each report, valuation,
request for amendment, whole or partial withdrawal or termination or
other variation, (ii) a copy of each funding waiver request filed with
the PBGC, the DOL, the IRS, the Pension Commission of Ontario or any
other applicable Governmental Authority with respect to any Plan and
all communications received by the Borrower or any ERISA Affiliate from
the PBGC, the DOL, the IRS, the Pension Commission of Ontario or other
applicable Governmental Authority with respect to such request, and
(iii) a copy of each other filing or notice filed with the PBGC, the
DOL, the IRS, the Pension Commission of Ontario or other applicable
Governmental Authority, with respect to each Plan of the Borrower, any
Subsidiary or any ERISA Affiliate.
(m) Upon request, copies of each actuarial report for any Plan
or Multi-employer Plan and annual report for any Multi-employer Plan;
and within ten (10) days after receipt thereof by the Borrower, or any
Subsidiary or any ERISA Affiliate, copies of the following: (i) any
notices of the PBGC's, the Pension Commission of Ontario's or other
applicable Government Authority's intention to terminate a Plan or to
have a trustee appointed to administer such Plan; (ii) any favorable or
unfavorable determination letter from the IRS, the Pension Commission
of Ontario or other applicable Governmental Authority regarding the
qualification of a Plan under Section 401(a) of the Code, the PBA or
other applicable laws; or (iii) any notice from a Multi-employer Plan
regarding the imposition of withdrawal liability.
(n) Within ten (10) days upon the occurrence thereof: (i) any
changes in the benefits of any existing Plan which increase the
Borrower's or any Subsidiary's annual costs with respect thereto by an
amount in excess of $1,000,000, or the establishment of any new Plan or
the commencement of contributions to any Plan to which the Borrower,
any Subsidiary or any ERISA Affiliate was not previously contributing;
or (ii) any failure by the Borrower, any Subsidiary or any ERISA
Affiliate to make a required installment or any other required payment
under Section 412 of the Code, the PBA or other applicable laws on or
before the due date for such installment or payment.
(o) Within ten (10) days after the Borrower, any Subsidiary or
any ERISA Affiliate knows or has reason to know that any of the
following events has or will occur: (i) a Multi-employer Plan has been
or will be terminated; (ii) the administrator or plan sponsor of a
Multi-employer Plan intends to terminate a Multi-employer Plan; or
(iii) the PBGC has instituted or will institute proceedings under
Section 4042 of ERISA to terminate a Multi-employer Plan; or (iv) a
Reportable Event or Termination Event in respect of any Plan.
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Each notice given under this Section shall describe the subject matter thereof
in reasonable detail, and shall set forth the action that the Borrower, any
Subsidiary, or any ERISA Affiliate, as applicable, has taken or proposes to take
with respect thereto.
ARTICLE 8
GENERAL WARRANTIES AND REPRESENTATIONS
The Borrower warrants and represents to the Agent and the Lenders that
except as hereafter disclosed to and accepted by the Agent and the Majority
Lenders in writing:
8.1 Authorization, Validity, and Enforceability of this Agreement and
the Loan Documents. Each of the Borrower and each Guarantor has the power and
authority to execute, deliver and perform this Agreement and the other Loan
Documents to which each is a party, as applicable. The Borrower has the power
and authority to incur the Obligations, and to grant to the Agent Liens upon and
security interests in the Collateral and the Pledged Collateral. Each Guarantor
has the power and authority to grant to the Agent liens upon and security
interests in the Guarantor Collateral. Each of the Borrower and each Guarantor
has taken all necessary action (including without limitation, obtaining approval
of its stockholders if necessary) to authorize its execution, delivery, and
performance of this Agreement and the other Loan Documents to which each is a
party, as applicable. No consent, approval, or authorization of, or declaration
or filing with, any Governmental Authority, and no consent of any other Person,
is required in connection with the Borrower's execution, delivery and
performance of this Agreement and Borrower's or any Guarantor's execution,
delivery and performance of the other Loan Documents, except for those already
duly obtained. This Agreement and the other Loan Documents have been duly
executed and delivered by the Borrower and each Guarantor, as applicable, and
constitute the legal, valid and binding obligation of the Borrower and such
Guarantor, as applicable, enforceable against it in accordance with their
respective terms without defense, setoff or counterclaim. Neither the Borrower's
nor any Guarantor's execution, delivery, and performance of the Loan Documents
to which it is a Party do or will conflict with, or constitute a violation or
breach of, or constitute a default under, or result in the creation or
imposition of any Lien upon the property of the Borrower or any of its
Subsidiaries by reason of the terms of (a) any contract, mortgage, Lien, lease,
agreement, indenture, or instrument to which the Borrower or any of its
Subsidiaries is a party or which is binding upon it or therein, (b) any
Requirement of Law applicable to the Borrower or any of its Subsidiaries, or (c)
the certificate or articles of incorporation or by-laws, partnership agreement,
or limited liability company agreement of the Borrower or any of its
Subsidiaries.
8.2 Validity and Priority of Security Interest. The provisions of this
Agreement, the Mortgages, and the other Loan Documents create legal and valid
Liens on all the Collateral, Pledged Collateral and Guarantor Collateral, in
favor of the Agent, for the ratable benefit of the Lenders, and such Liens
constitute perfected and continuing Liens on all the Collateral, Pledged
Collateral and Guarantor Collateral, having priority over all other Liens (other
than Permitted
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Liens) on the Collateral, Pledged Collateral and Guarantor Collateral, securing
all the Obligations, and enforceable against the Borrower, each Guarantor and
all third parties.
8.3 Organization and Qualification. The Borrower and each Guarantor (a)
is duly organized and validly existing in good standing under the laws of the
jurisdiction of its organization, (b) is qualified to do business as a foreign
entity and is in good standing in the jurisdictions set forth on Schedule 8.3
which are the only jurisdictions in which qualification is necessary in order
for it to own or lease its property and conduct its business and (c) has all
requisite power and authority to conduct its business and to own its property.
8.4 Corporate Name; Prior Transactions. Neither the Borrower nor any
Guarantor has, during the past five (5) years, been known by or used any other
corporate or fictitious name, or been a party to any merger or consolidation, or
acquired all or substantially all of the assets of any Person, or acquired any
of its property outside of the ordinary course of business, except as set forth
on Schedule 8.4..
8.5 Subsidiaries and Affiliates. Schedule 8.5 is a correct and complete
list of the name and relationship to the Borrower of each and all of the
Borrower's Subsidiaries and other Affiliates. Each Subsidiary is (a) duly
incorporated and organized and validly existing in good standing under the laws
of its jurisdiction of incorporation set forth on Schedule 8.5, and (b)
qualified to do business as a foreign corporation and in good standing in each
jurisdiction in which the failure to so qualify or be in good standing could
reasonably be expected to have a material adverse effect on any such
Subsidiary's business, operations, prospects, property, or condition (financial
or otherwise) and (c) has all requisite power and authority to conduct its
business and own its property.
8.6 Financial Statements and Projections. (a) The Borrower has
delivered to the Agent and the Lenders the audited balance sheet and related
statements of income, retained earnings, changes in financial position, and
changes in stockholders equity for the Borrower and its consolidated
Subsidiaries for the Fiscal Year ended as of September 28, 1997 and for Huron
Plastics Group, Inc. for the fiscal year ended December 31, 1995 and December
31, 1996 and the nine-month period ended September 30, 1997, accompanied by the
report thereon of the Borrower's independent certified public accountants, Ernst
& Young LLP. All such financial statements have been prepared in accordance with
GAAP and present accurately and fairly the financial position of the Borrower
and its consolidated Subsidiaries as at the dates thereof and their results of
operations for the periods then ended.
(b) The Latest Projections when submitted to the Lenders as
required herein represent the Borrower's best estimate of the future financial
performance of the Borrower and its consolidated Subsidiaries for the periods
set forth therein. The Latest Projections have been prepared on the basis of the
assumptions set forth therein, which the Borrower believes are fair and
reasonable in light of current and reasonably foreseeable business conditions at
the time submitted to the Lender.
(c) The pro forma balance sheet of the Borrower and LDM Canada
as at the Closing Date, attached hereto as Exhibit D, presents fairly and
accurately the Borrower's and
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LDM Canada's financial condition as at such date assuming the Transaction
occurred on such date and the Closing Date had been such date, and has been
prepared in accordance with GAAP.
8.7 Capitalization. The Borrower's authorized capital stock consists of
100,000 shares of common stock, no par value, of which 600 shares are validly
issued and outstanding, fully paid and non-assessable. LDM Canada's authorized
capital stock consists of 100,000 shares of common stock, no par value per share
of which 10,000 shares were validly, issued and outstanding fully paid and
non-assessable.
8.8 Solvency. Each of the Borrower and LDM Canada is Solvent prior to
and after giving effect to the Transaction, and shall remain Solvent during the
term of this Agreement.
8.9 Debt. After giving effect to the making of the Loans to be made on
the Closing Date, the Borrower and its Subsidiaries have no Debt, except (a) the
Obligations, (b) the Senior Subordinated Notes, (c) Debt described on Schedule
8.9, (d) the Loan and Security Agreement and (e) trade payables and other
contractual obligations arising in the ordinary course of busineSection.
8.10 Distributions. Since October 1, 1997, no Distribution has been
declared, paid, or made upon or in respect of any capital stock or other
securities of the Borrower or any of its Subsidiaries.
8.11 Title to Property. Each of the Borrower and LDM Canada has good
and marketable title in fee simple to its real property listed in Schedule 8.12
hereto, and each of LDM Canada and the Borrower has good, indefeasible, and
merchantable title to all of its other property (including, without limitation,
the assets reflected on the Financial Statements delivered to the Agent and the
Lenders pursuant to Section 8.6(a), except as disposed of in the ordinary course
of business since the date thereof), free of all Liens except Permitted Liens.
8.12 Real Estate; Leases. Schedule 8.12 sets forth a correct and
complete list of all Real Estate owned by the Borrower or any of its
Subsidiaries, all leases and subleases of real or personal property by the
Borrower or its Subsidiaries as lessee or sublessee (other than leases of
personal property as to which the Borrower is lessee or sublessee for which the
value of such personal property is less than $500,000 individually or $1,500,000
in the aggregate), and all leases and sub leases of real or personal property by
the Borrower or its Subsidiaries as lessor, lessee, sublessor or sublessee. Each
of such leases and subleases is valid and enforceable in accordance with its
terms and is in full force and effect, and no default by any party to any such
lease or sublease exists.
8.13 Proprietary Rights Collateral. Schedule 8.13 sets forth a correct
and complete list of all of the Proprietary Rights constituting patents,
trademarks, copyrights and license agreements, if any, relating thereto, of the
Borrower and its Subsidiaries. None of the Collateral or Guarantor Collateral
consisting of Proprietary Rights is subject to any licensing agreement or
similar arrangement. To the best of the Borrower's knowledge, none of the
Collateral or Guarantor Collateral consisting of Proprietary Rights infringes on
or conflicts with any other
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Person's property, and no other Person's property infringes on or conflicts with
the Collateral or Guarantor Collateral consisting of Proprietary Rights. The
Collateral and Guarantor Collateral consisting of Proprietary Rights as
described on Schedule 8.13 constitute all of the property of such type necessary
to the current and anticipated future conduct of the Borrower's and its
Subsidiary's busineSection.
8.14 Trade Names and Terms of Sale. All trade names or styles under
which the Borrower or any of its Subsidiaries will sell Inventory or create
Accounts, or to which instruments in payment of Accounts may be made payable,
are listed on Schedule 8.14.
8.15 Litigation. Except as set forth on Schedule 8.15, there is no
pending or (to the best of the Borrower's knowledge) threatened, action, suit,
proceeding, or counterclaim by any Person, or investigation by any Governmental
Authority, or any basis for any of the foregoing, which could reasonably be
expected to cause a Material Adverse Effect.
8.16 Restrictive Agreements. Neither the Borrower nor any of its
Subsidiaries is a party to any contract or agreement, or subject to any charter
or other corporate restriction, which affects its ability to execute, deliver,
and perform the Loan Documents and repay the Obligations or which materially and
adversely affects or, insofar as the Borrower can reasonably foresee, could
materially and adversely affect, the property, business, operations, or
condition (financial or otherwise) of the Borrower or such Subsidiary, or would
in any respect cause a Material Adverse Effect.
8.17 Labor Disputes. Except as set forth on Schedule 8.17 hereto: there
is (a) no collective bargaining agreement or other labor contract covering
employees of the Borrower or any of its Subsidiaries, (b) no such collective
bargaining agreement or other labor contract is scheduled to expire during the
term of this Agreement, (c) no union or other labor organization is seeking to
organize, or to be recognized as, a collective bargaining unit of employees of
the Borrower or any of its Subsidiaries or for any similar purpose, and (d) no
pending or (to the best of the Borrower's knowledge) threatened, strike, work
stoppage, material unfair labor practice claim, or other material labor dispute
against or affecting the Borrower or its Subsidiaries or their employees.
8.18 Environmental Laws. Except as set forth on Schedule 8.18 hereto:
(a) The Borrower and its Subsidiaries have complied in all material respects
with all Environmental Laws applicable to its Premises and business, and neither
the Borrower nor any Subsidiary nor any of its present Premises or operations,
nor its past property or operations, nor any property now or previously in its
charge, management or control is subject to any enforcement order from or
liability agreement with any Governmental Authority or private Person respecting
(i) compliance with any Environmental Law or (ii) any potential liabilities and
costs or remedial action arising from the Release or threatened Release of a
Contaminant;
(b) The Borrower and its Subsidiaries have obtained all
permits necessary for their current operations under Environmental Laws, and all
such permits are in good standing and the Borrower and its Subsidiaries are in
material compliance with all terms and conditions of
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such permits;
(c) Neither the Borrower nor any of its Subsidiaries, nor, to
the best of the Borrower's knowledge, any of its predecessors in interest, has
stored, treated or disposed of any hazardous waste on any Premises, as defined
pursuant to 40 CFR Part 261 or any equivalent Environmental Law or any property
now or previously in its charge, management or control other than in compliance
with applicable Environmental Laws;
(d) Neither the Borrower nor any of its Subsidiaries has
received any summons, complaint, order or similar written notice that it is not
currently in compliance with, or that any Governmental Authority is
investigating its compliance with, any Environmental Laws or that it is or may
be liable to any other Person as a result of a Release or threatened Release of
a Contaminant;
(e) None of the present or past operations or any property now
or previously in its charge, management or control of the Borrower and its
Subsidiaries is the subject of any investigation by any Governmental Authority
evaluating whether any remedial action is needed to respond to a Release or
threatened Release of a Contaminant;
(f) There is not now, nor to the best of the Borrower's
knowledge has there ever been on or in the Premises:
(1) any underground storage tanks or surface
impoundments,
(2) any asbestos containing material, or
(3) any polychlorinated biphenyls (PCB's) used in
hydraulic oils, electrical transformers or other equipment other than
in compliance with applicable Environmental Laws;
(g) Neither the Borrower nor any of its Subsidiaries has filed
any notice under any requirement of Environmental Law reporting a spill or
accidental and unpermitted release or discharge of a Contaminant into the
environment which has not been remediated;
(h) Neither the Borrower nor any of its Subsidiaries has
entered into any negotiations or settlement agreements with any Person
(including, without limitation, the prior owner of its property and any
Governmental Authority) imposing material obligations or liabilities on the
Borrower or any of its Subsidiaries with respect to any remedial action in
response to the Release of a Contaminant or environmentally related claim;
(i) None of the products manufactured, distributed or sold by
the Borrower or any of its Subsidiaries contain asbestos containing material;
and
(j) No Environmental Lien has attached to any Premises or
Property of the Borrower or any of its Subsidiaries.
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8.19 No Violation of Law. Neither the Borrower nor any of its
Subsidiaries is in violation of any law, statute, regulation, ordinance,
judgment, order, or decree applicable to it which violation could reasonably be
expected to have a Material Adverse Effect.
8.20 No Default. After giving effect to the initial Borrowing, neither
the Borrower nor any of its Subsidiaries is in default with respect to any note,
indenture, loan agreement, mortgage, lease, deed, or other agreement to which
the Borrower or such Subsidiary is a party or by which it is bound, which
default could reasonably be expected to have a Material Adverse Effect.
8.21 ERISA Compliance. (a) Each Plan is in compliance in all material
respects with the applicable provisions of ERISA, the Code, the PBA and other
federal, provincial or state law. Each Plan which is intended to qualify under
Section 401(a) of the Code has received a favorable determination letter from
the IRS and to the best knowledge of the Borrower, nothing has occurred which
would cause the loss of such qualification. The Borrower and each ERISA
Affiliate has made all required contributions to any Plan when due, and no
application for a funding waiver or an extension of any amortization period has
been made with respect to any Plan.
(b) There are no pending or, to the best knowledge of
Borrower, threatened claims, actions or lawsuits, or action by any Governmental
Authority, with respect to any Plan which has resulted or could reasonably be
expected to result in a Material Adverse Effect. There has been no prohibited
transaction or violation of the fiduciary responsibility rules with respect to
any Plan which has resulted or could reasonably be expected to result in a
Material Adverse Effect.
(c) (i) No ERISA Event has occurred or is reasonably expected
to occur; (ii) no Pension Plan has any Unfunded Pension Liability; (iii) neither
the Borrower nor any ERISA Affiliate has incurred, or reasonably expects to
incur, any liability under Title IV of ERISA with respect to any Pension Plan
(other than premiums due and not delinquent under Section 4007 of ERISA); (iv)
neither the Borrower nor any ERISA Affiliate has incurred, or reasonably expects
to incur, any liability (and no event has occurred which, with the giving of
notice under Section 4219 of ERISA, would result in such liability) under
Section 4201 or 4243 of ERISA with respect to a Multi-employer Plan; (v) neither
the Borrower nor any ERISA Affiliate has engaged in a transaction that could be
subject to Section 4069 or 4212(c) of ERISA, and (vi) no Lien has arisen, xxxxxx
or inchoate, in respect of the Borrower or any Subsidiary or its or their
Property in connection with any Plan (save for contribution amounts not yet
due).
8.22 Taxes. The Borrower and its Subsidiaries have filed all federal,
provincial, state and other tax returns and reports required to be filed, and
have paid all federal, provincial, state and other taxes, assessments, fees and
other governmental charges levied or imposed upon them or their properties,
income or assets otherwise due and not delinquent.
8.23 Regulated Entities. None of the Borrower, any Person controlling
the Borrower, or any Subsidiary, is an "Investment Company" within the meaning
of the Investment Company
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Act of 1940. The Borrower is not subject to regulation under the Public Utility
Holding Company Act of 1935, the Federal Power Act, the Interstate Commerce Act,
any state public utilities code, or any other Federal or state statute or
regulation limiting its ability to incur IndebtedneSection.
8.24 Use of Proceeds; Margin Regulations. (a) The proceeds of the Loans
are to be used solely to finance, in part, the Acquisition, for general business
purposes of the Borrower and for acquisitions of Equipment. Neither the Borrower
nor any Subsidiary is engaged in the business of purchasing or selling Margin
Stock or extending credit for the purpose of purchasing or carrying Margin
Stock.
(b) Attached hereto as Schedule 8.24 is a summary of the sources
and uses of the funds on the date of the initial Borrowing.
8.25 Copyrights, Patents, Trademarks and Licenses, etc. Except as
described on Schedule 8.25 hereto, each of the Borrower and each Guarantor owns
or is licensed or otherwise has the right to use all of the patents, trademarks,
service marks, trade names, copyrights, contractual franchises, authorizations
and other rights that are reasonably necessary for the operation of its
businesses, without conflict with the rights of any other Person. To the best
knowledge of the Borrower, no slogan or other advertising device, product,
process, method, substance, part or other material now employed, or now
contemplated to be employed, by the Borrower or any Subsidiary infringes upon
any rights held by any other Person. No claim or litigation regarding any of the
foregoing is pending or threatened, and no patent, invention, device,
application, principle or any statute, law, rule, regulation, standard or code
is pending or, to the knowledge of the Borrower, proposed, which, in either
case, could reasonably be expected to have a Material Adverse Effect.
8.26 No Material Adverse Change. No Material Adverse Effect has
occurred since September 28, 1997, with respect to the Borrower and LDM Canada
on a consolidated basis.
8.27 Full Disclosure. None of the representations or warranties made by
the Borrower or any Subsidiary in the Loan Documents as of the date such
representations and warranties are made or deemed made, and none of the
statements contained in any exhibit, report, statement or certificate furnished
by or on behalf of the Borrower or any Subsidiary in connection with the Loan
Documents (including the offering and disclosure materials delivered by or on
behalf of the Borrower to the Lenders prior to the Closing Date), contains any
untrue statement of a material fact or omits any material fact required to be
stated therein or necessary to make the statements made therein, in light of the
circumstances under which they are made, not misleading as of the time when made
or delivered.
8.28 Material Agreements. Schedule 8.28 hereto sets forth all material
agreements and contracts outside the ordinary course of business to which the
Borrower or any of its Subsidiaries is a party or is bound as of the date
hereof.
8.29 Bank Accounts. Schedule 8.29 contains a complete and accurate list
of all bank
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accounts maintained by the Borrower and its Subsidiaries with any bank or other
financial institution.
8.30 Governmental Authorization. No approval, consent, exemption,
authorization, or other action by, or notice to, or filing with, any
Governmental Authority is necessary or required in connection with the
execution, delivery or performance by, or enforcement against, the Borrower or
any of its Subsidiaries of the Agreement or any other Loan Document.
8.31 Indenture. No default or event of default has occurred and is
continuing under the Indenture and neither the Borrower or any of its
Subsidiaries has any obligation to redeem, prepay or defease any of the Senior
Subordinated Notes issued under the Indentures.
8.32 Subordination Provisions. The subordination provisions contained
in the Senior Subordinated Notes, the Indenture and other instruments entered
into or issued in respect of the Senior Subordinated Notes are enforceable
against the issuer of the respective security and the holders thereof, and the
Loans and all other Obligations are within the definitions of "Senior
Indebtedness" included in such provisions.
8.33 Acquisition Agreement. As of the Closing Date, the Borrower has
delivered to the Agent a complete and correct copy of the Acquisition Agreement
(including all schedules, exhibits, amendments, supplements, modifications,
assignments and all other documents delivered pursuant thereto or in connection
therewith). Neither the Borrower nor any other party thereto is in default in
the performance or compliance with any provisions thereof. The Acquisition
Agreement is in compliance with applicable laws and the Acquisition has been
consummated in accordance with applicable laws and regulations. The Acquisition
Agreement is in full force and effect as of the Closing Date, has not been
terminated, rescinded or withdrawn. All requisite approvals by Governmental
Authorities having jurisdiction over the Borrower or its Subsidiaries, and other
Persons referenced therein, with respect to the transactions contemplated by the
Acquisition Agreement, have been obtained, and no such approvals impose any
conditions to the consummation of the transactions contemplated by the
Acquisition Agreement or to the conduct by the Borrower or any Subsidiary of its
business thereafter. To the best of Borrower's knowledge, none of the Seller's
representations or warranties in the Acquisition Agreement contain any untrue
statement of a material fact or omit any fact necessary to make the facts
therein not misleading. Each of the representations and warranties given by the
Borrower in the Acquisition Agreement is true and correct in all material
respects. Notwithstanding anything contained in the Acquisition Agreement to the
contrary, such representations and warranties of the Borrower are incorporated
into this Agreement by this Section 8.33 and shall, solely for purposes of this
Agreement and the benefit of the Lenders, survive both the consummation of the
Acquisition and the termination of the Acquisition Agreement.
8.34 Bidding Status. Neither the Borrower nor any of its Subsidiaries
has received a notice, which notice has not been withdrawn within 180 days after
receipt by the Borrower or such Subsidiary, from any of General Motors
Corporation, Ford Motor Company or Chrysler Corporation informing the Borrower
or such Subsidiary that any of them are ineligible to submit bids.
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8.35 Merger. The Merger Documents are in form and substance
satisfactory for effecting the Merger pursuant to such agreements under the laws
of the State of Michigan; the Merger Documents will be filed with the Secretary
of State in the State of Michigan on the Closing Date; and, upon the filing of
the Merger Documents with the State of Michigan, the Merger will be effected and
will be valid in accordance with the terms thereof and the laws of the State of
Michigan.
8.36 Computer Systems. On the basis of an inquiry made of the
Borrower's and each of its Subsidiary's material suppliers, vendors and
customers, the Borrower reasonably believes that the "Year 2000 problem" (that
is, the risk that computer applications used by any Person may be unable to
recognize and perform properly date-sensitive functions involving certain dates
prior to and any date after December 31, 1999) will not result in a Material
Adverse Effect.
ARTICLE 9
AFFIRMATIVE AND NEGATIVE COVENANTS
The Borrower covenants to the Agent and each Lender that, so long
as any of the Obligations remain outstanding or this Agreement is in effect:
9.1 Taxes and Other Obligations. The Borrower shall, and shall cause
each of its Subsidiaries to, (a) file when due all tax returns and other reports
which it is required to file; (b) pay, or provide for the payment, when due, of
all taxes, fees, assessments and other governmental charges against it or upon
its property, income and franchises, make all required withholding and other tax
deposits, and establish adequate reserves for the payment of all such items, and
provide to the Agent and the Lenders, upon request, satisfactory evidence of its
timely compliance with the foregoing; and (c) pay when due all Debt owed by it
and all claims of materialmen, mechanics, carriers, warehousemen, landlords and
other like Persons, and all other indebtedness owed by it and perform and
discharge in a timely manner all other obligations undertaken by it; provided,
however, so long as Borrower has notified Agent in writing, neither the Borrower
nor any of its Subsidiaries need pay any tax, fee, assessment, or governmental
charge, that (i) it is contesting in good faith by appropriate proceedings
diligently pursued, (ii) the Borrower or its Subsidiary, as the case may be, has
established proper reserves for as provided in GAAP, and (iii) no Lien (other
than a Permitted Lien) results from such non-payment.
9.2 Corporate Existence; Good Standing. The Borrower shall, and shall
cause each of its Subsidiaries to, maintain its corporate existence and its
qualification and good standing in all jurisdictions in which the failure to
maintain such qualification or good standing could reasonably be expected to
have a material adverse effect on the Borrower's or such Subsidiary's property,
business, operations, prospects, or condition (financial or otherwise).
9.3 Compliance with Law and Agreements; Maintenance of Licenses. The
Borrower shall comply, and shall cause each Subsidiary to comply, in all
material respects with all
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Requirements of Law of any Governmental Authority having jurisdiction
over it or its business (including the Federal Fair Labor Standards Act). The
Borrower shall, and shall cause each of its Subsidiaries to, obtain and
maintain all licenses, permits, franchises, and governmental authorizations
necessary to own its property and to conduct its business as conducted on the
Closing Date.
9.4 Maintenance of Property. The Borrower shall, and shall cause each
of its Subsidiaries to, maintain all of their respective property necessary and
useful in the conduct of their respective businesses, in good operating
condition and repair, ordinary wear and tear excepted.
9.5 Insurance. (a) The Borrower shall maintain, and shall cause each of
its Subsidiaries to maintain, with financially sound and reputable insurers
having a rating of at least (A-) VII or better by Best Rating Guide, insurance
against loss or damage by fire with extended coverage; theft, burglary,
pilferage and loss in transit; public liability and third party property damage;
larceny, embezzlement or other criminal liability; business interruption; public
liability and third party property damage; and such other hazards or of such
other types as is customary for Persons engaged in the same or similar business,
as the Agent, in its discretion, or acting at the direction of the Majority
Lenders, shall specify, in amounts, and under policies acceptable to the Agent
and the Majority Lenders. Without limiting the foregoing, the Borrower shall
also maintain, and shall cause each of its Subsidiaries to maintain, flood
insurance, in the event of a designation of the area in which any Real Estate is
located as "flood prone" or a "flood risk area," as defined by the Flood
Disaster Protection Act of 1973, in an amount to be reasonably determined by the
Agent, and shall comply with the additional requirements of the National Flood
Insurance Program as set forth in said Act.
(b) The Borrower shall cause the Agent, for the ratable
benefit of the Lenders, to be named in each such policy (other than those
policies pertaining to Como) as secured party or mortgagee and loss payee or
additional insured, in a manner acceptable to the Agent. Each policy of
insurance shall contain a clause or endorsement requiring the insurer to give
not less than thirty (30) days' prior written notice to the Agent in the event
of cancellation of the policy for any reason whatsoever and a clause or
endorsement stating that the interest of the Agent shall not be impaired or
invalidated by any act or neglect of the Borrower or any of its Subsidiaries or
the owner of any premises for purposes more hazardous than are permitted by such
policy. All premiums for such insurance shall be paid by the Borrower when due,
and certificates of insurance and, if requested by the Agent or any Lender,
photocopies of the policies, shall be delivered to the Agent, in each case in
sufficient quantity for distribution by the Agent to each of the Lenders. If the
Borrower fails to procure such insurance or to pay the premiums therefor when
due, the Agent may, and at the direction of the Majority Lenders shall, do so
from the proceeds of Revolving Loans.
(c) The Borrower shall promptly notify the Agent and the
Lenders of any loss, damage, or destruction to the Collateral or Guarantor
Collateral arising from its use, whether or not covered by insurance. Agent is
authorized to collect all insurance proceeds (other than those pertaining to
Como) directly, and to apply or remit them as follows:
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(i) With respect to insurance proceeds relating to property
other than Collateral or Guarantor Collateral, after deducting from
such proceeds the reasonable expenses, if any, incurred by the Agent in
the collection or handling thereof, the Agent shall apply such
proceeds, to the reduction of the Obligations in the order provided for
in Section 4.8.
(ii) With respect to insurance proceeds relating to Collateral
or Guarantor Collateral other than Fixed Assets, after deducting from
such proceeds the reasonable expenses, if any, incurred by the Agent in
the collection or handling thereof, the Agent shall apply such
proceeds, to the reduction of the Obligations in the order provided for
in Section 4.8.
(iii) With respect to insurance proceeds relating to
Collateral or Guarantor Collateral consisting of Fixed Assets, after
deducting from such proceeds the reasonable expenses, if any, incurred
by the Agent in the collection or handling thereof, the Majority
Lenders may permit or require the Borrower or LDM Canada, as the case
may be, to use such money, or any part thereof, to replace, repair,
restore or rebuild the relevant Fixed Assets in a diligent and
expeditious manner with materials and workmanship of substantially the
same quality as existed before the loss, damage or destruction.
9.6 Condemnation. (a) The Borrower shall, immediately upon learning of
the institution of any proceeding for the condemnation or other taking of any of
its property or the property of any of its Subsidiaries, notify the Agent of the
pendency of such proceeding, and agrees that the Agent may participate in any
such proceeding, and the Borrower from time to time will deliver to the Agent
all instruments reasonably requested by the Agent to permit such participation.
(b) Upon the occurrence and during the continuance of an Event
of Default, the Agent is authorized to collect the proceeds of any condemnation
claim or award directly, and to apply or remit them as follows:
(i) With respect to condemnation proceeds relating to property
other than Collateral or Guarantor Collateral, after deducting from
such proceeds the reasonable expenses, if any, incurred by the Agent in
the collection or handling thereof, the Agent shall apply such proceeds
ratably, to the reduction of the Obligations in the order provided for
in Section 4.8.
(ii) With respect to condemnation proceeds relating to
Collateral or Guarantor Collateral other than Fixed Assets, after
deducting from such proceeds the reasonable expenses, if any, incurred
by the Agent in the collection or handling thereof, the Agent shall
apply such proceeds ratably, to the reduction of the Obligations in the
order provided for in Section 4.8.
(iii) With respect to condemnation proceeds relating to
Collateral or Guarantor
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Collateral consisting of Fixed Assets, after deducting from such
proceeds the reasonable expenses, if any, incurred by the Agent in the
collection or handling thereof, the Majority Lenders may permit or
require the Borrower or LDM Canada, as the case may be, to use such
money, or any part thereof, to replace, repair, restore or rebuild the
relevant Fixed Assets in a diligent and expeditious manner with
materials and workmanship of substantially the same quality as existed
before the condemnation.
9.7 Environmental Laws. (a) The Borrower shall, and shall cause each of
its Subsidiaries to, conduct its business in compliance with all Environmental
Laws applicable to it, including, without limitation, those relating to the
generation, handling, use, storage, and disposal of any Contaminant. The
Borrower shall, and shall cause each of its Subsidiaries to, take prompt and
appropriate action to respond to any non-compliance with Environmental Laws and
shall regularly report to the Agent on such response.
(b) Without limiting the generality of the foregoing, the
Borrower shall submit to the Agent and the Lenders annually, commencing on the
first Anniversary Date, and on each Anniversary Date thereafter, an update of
the status of each environmental compliance or liability issue. The Agent or any
Lender may request copies of technical reports prepared by the Borrower or LDM
Canada and its communications with any Governmental Authority to determine
whether the Borrower or any of its Subsidiaries is proceeding reasonably to
correct, cure or contest in good faith any alleged non-compliance or
environmental liability. The Borrower shall, at the Agent's or the Majority
Lenders' request and at the Borrower's expense, (a) retain an independent
environmental engineer acceptable to the Agent to evaluate the site, including
tests if appropriate, where the non-compliance or alleged non-compliance with
Environmental Laws has occurred and prepare and deliver to the Agent, in
sufficient quantity for distribution by the Agent to the Lenders, a report
setting forth the results of such evaluation, a proposed plan for responding
to any environmental problems described therein, and an estimate of the costs
thereof, and (b) provide to the Agent and the Lenders a supplemental report of
such engineer whenever the scope of the environmental problems, or the
response thereto or the estimated costs thereof, shall change in any material
respect.
9.8 Compliance with ERISA. The Borrower shall, and shall cause each of
its Subsidiaries and ERISA Affiliates to: (a) maintain each Plan in compliance
in all material respects with the applicable provisions of ERISA, the Code, the
PBA and other federal, provincial or state law; (b) cause each Plan which is
qualified under Section 401(a) of the Code to maintain such qualification; (c)
make all required contributions to any Plan subject to Section 412 of the Code;
(d) not engage in a prohibited transaction or violation of the fiduciary
responsibility rules with respect to any Plan; and (e) not engage in a
transaction that could be subject to Section 4069 or 4212(c) of ERISA; and (f)
not permit any Lien, xxxxxx or inchoate, to arise or exist in connection with
any Plan (save for contribution amounts not yet due).
9.9 Mergers, Consolidations or Sales. Neither the Borrower nor any of
its Subsidiaries shall enter into any transaction of merger, reorganization, or
consolidation, or transfer, sell, assign, lease, or otherwise dispose of all or
any part of its property, or wind up, liquidate or dissolve, or agree to do any
of the foregoing, except (i) for sales of Inventory in the
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ordinary course of its business, (ii) sales of assets in an aggregate amount not
to exceed $500,000 in any Fiscal Year, (iii) for sales or other dispositions of
Equipment in the ordinary course of business that are obsolete or no longer
useable by Borrower or LDM Canada, as the case may be, in its business as
permitted by Section 6.11, (iv) the merger of the Kenco Companies into the
Borrower, with the Borrower as the surviving corporation of such merger, shall
be permitted and (v) the Merger shall be permitted.
9.10 Distributions; Capital Change; Restricted Investments. Neither the
Borrower nor any of its Subsidiaries shall (i) directly or indirectly declare or
make, or incur any liability to make, any Distribution, except (x) Distributions
to the Borrower by its Subsidiaries, (y) distributions by the Borrower at such
times and in such amounts as are necessary to pay the federal income taxes of
the Borrower's stockholders attributable to their ownership of the Borrower's
common stock and the Borrower's status as a subchapter "S" corporation under the
Code at any time after such subchapter "S" status is obtained and (z)
Distributions relating to the repurchase of the capital stock of the Borrower
with proceeds from key-man life insurance policies under which the Borrower is
the beneficiary, (ii) make any change in its capital structure which could have
a Material Adverse Effect or (iii) make any Restricted Investment.
9.11 Transactions Affecting Collateral or Obligations. Neither the
Borrower nor any of its Subsidiaries shall enter into any transaction which
could have a Material Adverse Effect.
9.12 Guaranties. Neither the Borrower nor any of its Subsidiaries shall
make, issue or become liable on any Guaranty, except (i) Guarantees in favor of
the Agent, (ii) Guarantees executed in connection with the Loan and Security
Agreement in favor of the Revolving Loan Lender Agent, (iii) Guarantees of the
Debt of Como in an amount up to $1,000,000, (iv) Guarantees in favor of General
Electric Capital Corporation of the Debt of LDM Canada in an amount up to
$1,400,000 and (v) Guaranty in favor of Comerica Bank with respect to
indebtedness of D&A Realty, Inc. in an amount not to exceed $2,000,000.
9.13 Debt. Neither the Borrower nor any of its Subsidiaries shall incur
or maintain any Debt, other than:
(a) the Obligations;
(b) trade payables and contractual obligations to suppliers
and customers incurred in the ordinary course of business;
(c) Debt consisting of Senior Subordinated Notes, provided
that the aggregate principal amount thereof shall not at any time exceed
$110,000,000;
(d) Debt consisting of intercompany loans and advances
("Intercompany Loans") made by the Borrower to (I) LDM Canada, provided that (i)
LDM Canada shall have executed and delivered to the Borrower an Intercompany
Note to evidence any such Intercompany Loan, any security interests granted to
the Borrower on the assets of LDM Canada to secure the payments under its
Intercompany Note shall be assigned to the Agent pursuant to
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documentation in form and substance acceptable to the Agent, and such
Intercompany Note shall be pledged to the Agent pursuant to the Pledge Agreement
as additional collateral security for the Obligations, (ii) the Borrower shall
record all such Intercompany Loans on its books and records in a manner
satisfactory to Agent, (iii) at the time any such Intercompany Loans is made by
the Borrower and after giving effect thereto, each of the Borrower and LDM
Canada shall be Solvent, (iv) the aggregate outstanding principal amount of
Intercompany Loans under this clause (I) shall not at any one time exceed
$17,000,000, consisting of the Closing Date Intercompany Note and additional
loans not to exceed $1,000,000, plus an amount equal to the sum of (A) an amount
equal to the lesser of (x) $5,000,000 and (y) LDM Canada's Borrowing Base (as
defined in the Loan and Security Agreement), plus (B) $4,000,000, provided,
however, that the Intercompany Loans pursuant to clauses (A) and (B) above shall
not exceed in any fiscal quarter the amount of LDM Canada's EBITDA for the
immediately preceding fiscal quarter and (II) LDM Germany, provided that (i) LDM
Germany shall have executed and delivered to the Borrower an Intercompany Note
to evidence any such Intercompany Loan, and such Intercompany Note shall conform
to the requirements of a loan to an Unleveraged Wholly Owned Restricted
Subsidiary (as defined in the Indenture) pursuant to the terms and conditions
contained in the Indenture, (ii) the Borrower shall record all such Intercompany
Loans on its books and records in a manner satisfactory to Agent, (iii) at the
time any such Intercompany Loan is made by the Borrower and after giving effect
thereto, each of the Borrower and LDM Germany shall be Solvent and (iv) the
aggregate outstanding principal amount of Intercompany Loans under this clause
(II) shall not at any one time exceed $9,160,000;
(e) guaranties permitted pursuant to Section 9.12;
(f) Debt evidenced by the Loan and Security Agreement; and
(e) other Debt existing on the Closing Date and listed on
Schedule 8.9 hereof, but without giving effect to any extensions, renewals or
refinancing thereof.
9.14 Prepayments; Amendments. Neither the Borrower nor any of its
Subsidiaries shall voluntarily prepay, or amend, supplement or otherwise modify
the terms of, any Debt, except (i) the Obligations in accordance with the terms
of this Agreement and (ii) the Loan and Security Agreement Obligations in
accordance with the terms of the Loan and Security Agreement.
9.15 Transactions with Affiliates. Except as set forth below and except
for the Intercompany Loans (and repayments thereof) upon and subject to the
terms of Section 9.14 hereof, neither the Borrower nor any of its Subsidiaries
shall, sell, transfer, distribute, or pay any money or property, including, but
not limited to, any fees or expenses of any nature (including, but not limited
to, any fees or expenses for management services), to any Affiliate, or lend or
advance money or property to any Affiliate, or invest in (by capital
contribution or otherwise) or purchase or repurchase any stock or indebtedness,
or any property, of any Affiliate, or become liable on any Guaranty of the
indebtedness, dividends, or other obligations of any Affiliate. Notwithstanding
the foregoing, the Borrower and its Subsidiaries may engage in transactions with
Affiliates in the ordinary course of business, in amounts and upon terms fully
disclosed to
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the Agent and the Lenders, and no less favorable to the Borrower or
such Subsidiary than would be obtained in a comparable arm's-length
transaction with a third party who is not an Affiliate, except consulting fees
paid by the Borrower consistent with past practices.
9.16 Investment Banking and Finder's Fees. Neither the Borrower nor any
of its Subsidiaries shall pay or agree to pay, or reimburse any other party with
respect to, any investment banking or similar or related fee, underwriter's fee,
finder's fee, or broker's fee to any Person in connection with this Agreement.
The Borrower shall defend and indemnify the Agent and the Lenders against and
hold them harmless from all claims of any Person for any such fees, and all
costs and expenses (including without limitation, attorneys' fees) incurred by
the Agent and/or any Lender in connection therewith.
9.17 Computer Systems. On or before December 31, 1999, the Borrower
shall, and shall cause each of its Subsidiaries to, purchase, implement and test
new information technology systems that are fully Year 2000 compliant. The
Borrower shall deliver to the Agent, along with the Financial Statements
delivered pursuant to Section 7.2(d), a report that sets forth the status of
such systems and projected operational date, which report shall be in form and
substance satisfactory to the Agent.
9.18 Business Conducted. The Borrower shall not and shall not permit
any of its Subsidiaries to, engage directly or indirectly, in any line of
business other than the businesses in which the Borrower or such Subsidiary is
engaged on the Closing Date and related lines of busineSection.
9.19 Liens. Neither the Borrower nor any of its Subsidiaries shall
create, incur, assume, or permit to exist any Lien on any property now owned or
hereafter acquired by any of them, except Permitted Liens.
9.20 Sale and Leaseback Transactions. Neither the Borrower nor any of
its Subsidiaries shall, directly or indirectly, enter into any arrangement with
any Person providing for the Borrower or such Subsidiary to lease or rent
property that the Borrower or such Subsidiary has sold or will sell or otherwise
transfer to such Person.
9.21 Acquisitions; Investments in New Subsidiaries. Notwithstanding any
provision of Section 9.9 or 9.10 to the contrary but subject to all other
provisions of this Agreement, the Borrower may make investments in newly formed
Subsidiaries, acquire all or substantially all of the assets of any Person or
acquire all of outstanding stock of a Person, subject to the following
conditions:
(i) such Person or Subsidiary is incorporated under the laws
of a State in the United States and substantially all of its assets are
located in the United States;
(ii) no Event of Default shall have occurred and be continuing
or would result after giving pro forma effect to any such transaction;
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(iii) if such a transaction involves a newly formed Subsidiary
of the Borrower or a Person that becomes a Subsidiary of the Borrower
upon its acquisition, it shall be a wholly-owned or majority owned and
controlled Subsidiary of Borrower and, subject to obtaining any
consents from third parties (including minority stockholders and third
party co-venturers) necessary to be obtained for the issuance of a
guarantee, (with the Borrower hereby agreeing to use all reasonable
efforts to obtain such consents), such Subsidiary shall have issued a
guarantee of the Obligations to the Agent for the ratable benefit of
the Lenders in form and substance satisfactory to the Agent;
(iv) the newly formed or acquired Subsidiary (and in the case
of a majority owned or controlled Subsidiary, subject to obtaining any
consents from third parties (including minority stockholders and third
party co-venturers necessary to be obtained for the granting of a
security interest (with the Borrower hereby agreeing to use all
reasonable efforts to obtain such consents)) shall have granted to the
Agent or the Agent shall have received from the Borrower (in the case
of a purchase of assets by the Borrower) a first priority security
interest or lien on all of the assets of such newly formed or acquired
Subsidiary or the assets and/or equity interests acquired directly by
the Borrower, as applicable, subject only to non-material exceptions
acceptable to the Agent;
(v) the aggregate consideration paid by the Borrower in
connection with such transaction (including liabilities assumed or
reflected on a consolidated balance sheet of Borrower after giving
effect to any acquisition) shall not exceed $10,000,000;
(vi) after giving effect to any such transaction, the Borrower
would have Revolver Availability under, and as defined in, the Loan and
Security Agreement of at least $10,000,000; and
(vii) such newly formed or acquired Subsidiary shall, or such
assets shall comprise a business, engaged in substantially the same
business as the Borrower.
9.22 Fiscal Year. The Borrower shall not change its Fiscal Year and
shall not permit LDM Canada to change its Fiscal Year without the consent of
Agent and the Majority Lenders (such consents to not be unreasonably withheld).
9.23 Capital Expenditures. (a) Neither the Borrower nor any of its
Subsidiaries shall make or incur any Capital Expenditure if, after giving effect
thereto, the aggregate amount of all Capital Expenditures by the Borrower and
its Subsidiaries on a consolidated basis would exceed $25,000,000 during the
1998 Fiscal Year (excluding the acquisition of the assets of Tadim), and
$15,000,000 during each Fiscal Year thereafter.
(b) Notwithstanding anything to the contrary contained in
clause (a) above, to the extent that Capital Expenditures made by the Borrower
and its Subsidiaries during any Fiscal Year are less than the amount permitted
to be made for such Fiscal Year pursuant to clause (a) (without taking into
account any increase in the amount permitted during such period as a result of
this clause (b)) 100% of such unused amount may be carried forward to the
immediately
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succeeding Fiscal Year and utilized to make Capital Expenditures in excess of
the amount permitted above in such following Fiscal Year.
9.24 Operating Lease Obligations. The Borrower shall, and shall cause
each of its Subsidiaries to, promptly notify the Agent after entering into any
lease of real or personal property as lessee or sublessee (other than a Capital
Lease), if, after giving effect thereto, the aggregate amount of Rentals (as
hereinafter defined) payable by the Borrower and its Subsidiaries on a
consolidated basis in any Fiscal Year in respect of such lease would exceed
$1,000,000, individually, or $4,000,000 in the aggregate for all such leases.
The term "Rentals" means all payments due from the lessee or sublessee under a
lease, including, without limitation, basic rent, percentage rent, property
taxes, utility or maintenance costs, and insurance premiums.
9.25 Fixed Charge Coverage Ratio. The Borrower will maintain a Fixed
Charge Coverage Ratio of not less than 1.00:1.00 for each period of four
consecutive fiscal quarters ended at the end of the most recent fiscal quarter.
9.26 Net LoSection. The Borrower shall not, for each period of four
consecutive fiscal quarters ended at the end of the most recent fiscal quarter,
sustain a net loss (determined in accordance with GAAP).
9.27 Use of Proceeds. The Borrower shall not, and shall not suffer or
permit any Subsidiary to, use any portion of the Loan proceeds, directly or
indirectly, (i) to purchase or carry Margin Stock, (ii) to repay or otherwise
refinance indebtedness of the Borrower or others incurred to purchase or carry
Margin Stock, (iii) to extend credit for the purpose of purchasing or carrying
any Margin Stock, or (iv) to acquire any security in any transaction that is
subject to Section 13 or 14 of the Exchange Act.
9.28 Further Assurances. The Borrower shall and shall cause its
Subsidiaries to, execute and deliver, or cause to be executed and delivered, to
the Agent and/or the Lenders such documents and agreements, and shall take or
cause to be taken such actions, as the Agent or any Lender may, from time to
time, request to carry out the terms and conditions of this Agreement and the
other Loan Documents.
9.29 Canadian Tax Matters. The Borrower shall quarterly and more
frequently when requested by the Agent, provide to the Agent or cause LDM Canada
to provide to the Agent (i) a detailed accounting of all amounts paid (upon
collection of LDM Canada's accounts or otherwise) by LDM Canada to the Borrower,
whether or not applied to the Obligations outstanding and whether by way of
loans, loan repayments, dividends or otherwise, together with a calculation of
all withholding and other taxes payable in respect thereof and (ii) evidence
satisfactory to the Agent of the remittance when due to the applicable
Governmental Authorities of all withholding and other taxes payable in respect
thereof.
ARTICLE 10
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CONDITIONS OF LENDING
10.1 Conditions Precedent to Making of Loans on the Closing Date. The
obligation of the Lenders to make the Term Loans on the Closing Date and to make
the CAPEX Loans, are subject to the following conditions precedent having been
satisfied in a manner satisfactory to the Agent and each Lender:
(a) This Agreement and the other Loan Documents (including any
amendments thereto requested by the Agent) have been executed by each party
thereto and the Borrower and LDM Canada shall have performed and complied with
all covenants, agreements and conditions contained herein and the other Loan
Documents which are required to be performed or complied with by such Person
before or on such Closing Date.
(b) All representations and warranties made hereunder and in
the other Loan Documents shall be true and correct as of the Closing Date as if
made on such date.
(c) No Default or Event of Default shall exist on the Closing
Date, or would exist after giving effect to the Loans to be made on such date.
(d) The Agent and the Lenders shall have received such
opinions of counsel for the Borrower and its Subsidiaries as the Agent or any
Lender shall request, each such opinion to be in a form, scope, and substance
satisfactory to the Agent, the Lenders, and their respective counsel.
(e) The Agent and the Lenders shall have received title
insurance policies or, in the case of the LDM Canada Mortgage, title opinions,
in form and substance acceptable to Agent, with respect to the Mortgages.
(f) The Agent shall have received:
(i) evidence of the filing of UCC financing statements on
or before the Closing Date under the UCC or PPSA in all jurisdictions that the
Agent may deem necessary or desirable in order to perfect the Agent's Lien;
(ii) a copy of the LDM Canada Security Agreement and the
LDM Canada Mortgage, as duly recorded in Nova Scotia and the applicable Land
Registry Office, respectively; and
(iii) duly executed such UCC-3 Termination Statements,
mortgage releases and other instruments, in form and substance satisfactory to
the Agent, as shall be necessary to terminate and satisfy all Liens on the
Property of the Borrower and its Subsidiaries except Permitted Liens.
(g) The Borrower shall have paid all fees and expenses of the
Agent and the Attorney costs incurred in connection with any of the Loan
Documents and the transactions
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contemplated thereby.
(h) The Agent shall have received evidence, in form, scope,
and substance, reasonably satisfactory to the Agent, of all insurance coverage
as required by the Agreement.
(i) The Agent and the Lenders shall have had an opportunity,
if they so choose, to examine the books of account and other records and files
of the Borrower and to make copies thereof, and to conduct a pre-closing audit
which shall include, without limitation, verification of Inventory and Accounts,
and the results of such examination and audit shall have been satisfactory to
the Agent and the Lenders in all respects.
(j) Except as set forth on Schedule 8.15, no claim, action,
suit, investigation, litigation or proceeding shall be pending or threatened (i)
which is reasonably likely to be determined adversely to the Borrower or any
Guarantor and which would have a Material Adverse Effect if so determined or
(ii) which, in the judgment of the Agent on the Majority Lenders could
materially and adversely effect the transactions contemplated hereby.
(k) Copies of all filings, registrations, approvals, orders,
authorizations, licenses, certificates, permits, consents, waivers and
acknowledgments, including those of the requisite Governmental Authorities,
required with respect to the execution and delivery, of this Agreement, the
other Loan Documents and the consummation of the transactions contemplated
hereby, each in form and substance satisfactory to the Agent.
(l) Evidence satisfactory to Agent that the Borrower and the
Seller shall have consummated the transactions contemplated by the Acquisition
Agreement in accordance with the terms set forth therein (which terms and
conditions shall be satisfactory to the Agent and its counsel in all respects),
and all documents required to be delivered pursuant to the Acquisition Agreement
shall have been executed and delivered by the Persons specified therein, and the
Borrower shall have furnished to the Agent a certified copy of the Acquisition
Agreement and all exhibits and schedules thereto, as finally amended, and a
certificate signed by the chief executive officer of the Borrower certifying
that (i) the transactions contemplated by the Acquisition Agreement have been
consummated in accordance with the Acquisition Agreement and no term or
condition of the Acquisition Agreement has been amended, modified or waived
except as set forth in the certified copy of the Acquisition Agreement provided
to the Agent, (ii) any documents required to be filed to effect the Acquisition
have been filed in accordance with applicable law, and (iii) neither the
Borrower nor any of its Subsidiaries has failed to perform any material
obligation or covenant required by the Acquisition Agreement to be performed or
complied with by such Person on or before the Closing Date unless waived by the
Seller, and the substance of such certificate shall be true and correct, and the
Agent shall have received, on behalf of the Lenders, copies of the Acquisition
Agreement and the other documents required to be delivered pursuant to the
Acquisition Agreement and all consents, approvals or permits necessary or
advisable to be obtained in connection therewith, in form and substance
satisfactory to the Agent and its counsel.
(m) All opinions delivered in connection with the Acquisition
shall be addressed to the Agent and the Lenders or accompanied by a written
authorization from the Person
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delivering such opinion stating that the Agent and the Lenders may rely on such
document as though it were addressed to them.
(n) The Agent shall have received a certificate executed by
the chief financial officer of the Borrower in form and substance satisfactory
to the Agent, dated the Closing Date, with respect to the value, Solvency and
other factual information of, or relating to, as the case may be, of the
Borrower and its Subsidiaries (on a consolidated basis), after giving effect to
the Transaction.
(o) Payoff letters, in form and substance satisfactory to the
Agent, from each financial institution to the effect that the total amount under
the Seller's agreements with such institutions howsoever due and owing (whether
as principal, interest or premium) shall be satisfied (and such agreement term
issued) upon payment of an amount certain together with such lien releases and
such other documents as the Agent may request.
(p) All proceedings taken in connection with the execution of
this Agreement, all other Loan Documents and all documents and papers relating
thereto shall be satisfactory in form, scope, and substance to the Agent and the
Lenders.
(q) The Borrower shall have delivered to the Agent:
(i) pro forma financial statements (including a balance
sheet and income statement) for the Borrower and its Subsidiaries for the one
year period ended on the last day of the fiscal quarter of the Borrower last
ended prior to the Closing Date, assuming the Transaction was effected on the
first day of such one year period, and such pro forma financial statements shall
be accompanied by an agreed upon procedures report prepared by Ernst & Young,
LLP acceptable to the Agent, and the Agent shall be satisfied with such pro
forma financial statements and the accounting practices and procedures utilized
by the Borrower and its Subsidiaries; and
(ii) the Agent shall have received such accountants'
certificates, calculations and pro forma financial data as shall be reasonably
required by the Agent in order for them to determine compliance with any
applicable covenants contained in the Indenture, all of which shall be in form
and substance satisfactory to the Agent.
(r) The Borrower shall have delivered to the Agent all Merger
Documents, certified as true and correct by a Responsible Officer, all of which
Merger Documents shall be in form and substance reasonably satisfactory to the
Agent, and each of the conditions precedent to each Person's obligations under
the Merger Documents to consummate the Merger shall have been satisfied (without
any waiver thereto not agreed to by the Agent) to the reasonable satisfaction of
the Agent. Simultaneously with the consummation of the transactions contemplated
by this Agreement, the Merger shall have been consummated in substantial
compliance with the terms of the Merger Documents and all applicable laws.
(s) The Lender shall have received written reports of
appraisals of the
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Equipment performed by independent appraisers acceptable to the Lender and on a
basis satisfactory to the Lender, and stating a fair market value of the
Premises and an orderly liquidation value of the Equipment satisfactory to the
Lender.
(t) The Lender shall have received evidence satisfactory to it
that there does not exist on the Premises or in connection with the operation
thereof or of the Borrower's and each of its Subsidiary's respective business,
any material violation of any Environmental Laws.
(u) The Agent shall have received a fully executed copy of the
Fifth Amendment to the Loan and Security Agreement and such amendment shall be
effective pursuant to the terms thereof.
The acceptance by the Borrower of any Loans made on the Closing Date
shall be deemed to be a representation and warranty made by the Borrower to the
effect that all of the conditions precedent to the making of such Loans have
been satisfied, with the same effect as delivery to the Agent and the Lenders of
a certificate signed by the a Responsible Officer of the Borrower, dated the
Closing Date, to such effect.
Execution and delivery to the Agent by a Lender of a counterpart to
this Agreement shall be deemed confirmation by such Lender that (i) all
conditions precedent in this Section 10.1 have been fulfilled to the
satisfaction of such Lender and (ii) the decision of such Lender to execute and
deliver to the Agent an executed counterpart to this Agreement was made by such
Lender independently and without reliance on the Agent or any other Lender as to
the satisfaction of any condition precedent set forth in this Section 10.1.
10.2 Conditions Precedent to Each Loan. The obligation of the Lenders
to make each Loan, including the initial Term Loans on the Closing Date shall be
subject to the further conditions precedent that on and as of the date of any
such extension of credit:
(a) the following statements shall be true, and the acceptance
by the Borrower of any extension of credit shall be deemed to be a statement to
the effect set forth in clauses (i) and (ii), with the same effect as the
delivery to the Agent and the Lenders of a certificate signed by a Responsible
Officer, dated the date of such extension of credit, stating that:
(i) The representations and warranties contained in this
Agreement and the other Loan Documents are correct in all material respects on
and as of the date of such extension of credit as though made on and as of such
date, except to the extent the Agent and the Lenders have been notified by the
Borrower that any representation or warranty is not correct and the Majority
Lenders have explicitly waived in writing compliance with such representation or
warranty; and
(ii) No event has occurred and is continuing, or would
result from such extension of credit, which constitutes a Default or an Event of
Default; and
(b) so long as any Senior Subordinated Notes remain
outstanding, at the time
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of each Borrowing the Lenders shall have received a certificate, in form and
substance satisfactory to the Agent, establishing to the satisfaction of the
Agent that the Consolidated Fixed Charge Coverage Ratio (as defined in the
Indenture as of the date of this Agreement) after giving effect to the
respective Borrowing is greater than 2.25: 1.0 during the four full fiscal
quarters ending on or prior to the relevant Funding Date.
ARTICLE 11
DEFAULT; REMEDIES
11.1 Events of Default. It shall constitute an event of default
("Event of Default") if any one or more of the following shall occur for any
reason:
(a) any failure to pay the principal of or interest or premium
on any of the Obligations when due, whether upon demand or otherwise;
(b) any representation or warranty made by the Borrower in
this Agreement or by the Borrower or any Guarantor in any of the other Loan
Documents, any Financial Statement, or any certificate furnished by the Borrower
or any Guarantor at any time to the Agent or any Lender shall prove to be untrue
in any material respect as of the date on which made or furnished;
(c) (i) any default shall occur in the observance or
performance of any of the covenants or agreements contained in any of Article 6,
Section 7.2, 7.3, 9.4 or 9.9 through 9.28 hereof (other than a default under
Section 9.20 as a result of a Lien involuntarily incurred, which is not
otherwise an Event of Default hereunder) or (ii) any default shall occur in the
observance or performance of any of the other covenants and agreements contained
in this Agreement or under Section 9.20 hereof as a result of a Lien
involuntarily incurred, any other Loan Documents, or any other agreement entered
into at any time to which the Borrower or any Guarantor thereof and the Agent or
any Lender are party in each case referred to in this clause (ii), if the same
shall not have been cured within fifteen (15) days following notice by the Agent
to the Borrower of the breach thereof, or if any such agreement or document
shall terminate (other than in accordance with its terms or the terms hereof or
with the written consent of the Agent and the Majority Lenders) or become void
or unenforceable, without the written consent of the Agent and the Majority
Lenders;
(d) default shall occur with respect to any Debt for borrowed
money (other than the Obligations) in an outstanding principal amount which
exceeds, in the aggregate for all such Debt with respect to which default shall
have occurred, $2,000,000, or under any agreement or instrument under or
pursuant to which any such Debt or indebtedness may have been issued, created,
assumed, or guaranteed by the Borrower or any Guarantor, and such default shall
continue for more than the period of grace, if any, therein specified, if the
effect thereof (with or without the giving of notice or further lapse of time or
both) is to accelerate, or to permit the holders of any such Debt or
indebtedness to accelerate, the maturity of any such Debt; or any
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such Debt or indebtedness shall be declared due and payable or be required to be
prepaid (other than by a regularly scheduled required prepayment) prior to the
stated maturity thereof;
(e) the Borrower or any Guarantor shall (i) file a voluntary
petition in bankruptcy or file a voluntary petition or an answer or file any
proposal or notice of intent to file a proposal or otherwise commence any action
or proceeding seeking reorganization, arrangement, consolidation or readjustment
of its debts or which seeks to stay or has the effect of staying any creditor or
for any other relief under the Bankruptcy Code, the Bankruptcy and Insolvency
Act or the Companies' Creditors Arrangement Act, as amended, or under any other
bankruptcy, insolvency, liquidation, winding up, corporate or similar act or
law, state, provincial or federal, now or hereafter existing, or consent to,
approve of, or acquiesce in, any such petition, proposal action or proceeding,
(ii) apply for or acquiesce in the appointment of a receiver, assignee,
liquidator, sequestrator, monitor, administrator, custodian, trustee or similar
officer for it or for all or any part of its property, (iii) make an assignment
for the benefit of creditors, or (iv) be unable generally to pay its debts as
they become due;
(f) an involuntary petition or proposal shall be filed or an
action or proceeding otherwise commenced seeking reorganization, consolidation,
arrangement or readjustment of the debts of the Borrower or any Guarantor or for
any other relief under the Bankruptcy Code, the Bankruptcy and Insolvency Act or
the Companies' Creditors Arrangement Act, as amended, or under any other
bankruptcy, insolvency, liquidation, winding up, corporate or similar act or
law, state, provincial or federal, now or hereafter existing and (i) such
petition, proposal action or proceeding shall not have been stayed or dismissed
within a period of sixty (60) days after its commencement or (ii) an order for
relief against the Borrower or such Guarantor shall have been entered in such
proceeding or (iii) a Material Adverse Effect shall have occurred;
(g) a receiver, assignee, liquidator, sequestrator, custodian,
trustee, monitor, administrator or similar officer for the Borrower or any
Guarantor or for all or any part of its property shall be appointed or a warrant
of attachment, execution, writ of seizure or seizure and sale or similar process
shall be issued against any part of the property of the Borrower or any
Guarantor or any distress or analogous process is levied upon all or any part of
Borrower's or any Guarantor's property;
(h) the Borrower or any Guarantor shall file a certificate of
dissolution or like process under applicable state, provincial or federal law or
shall be liquidated, dissolved or wound-up or shall commence or have commenced
against it any action or proceeding for dissolution, winding-up or liquidation,
or shall take any corporate action in furtherance thereof;
(i) all or any material part of the property of the Borrower
or any Guarantor shall be nationalized, expropriated or condemned, seized or
otherwise appropriated, or custody or control of such property or of the
Borrower or such Guarantor shall be assumed by any Governmental Authority or any
court of competent jurisdiction at the instance of any Governmental Authority or
any other Person, except where contested in good faith by proper proceedings
diligently pursued where a stay of enforcement is in effect;
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(j) the LDM Canada Guarantee, the LDM Holding Guaranty or any
other guaranty of the Obligations shall be terminated, revoked or declared void
or invalid;
(k) one or more judgments or orders for the payment of money
aggregating in excess of $2,000,000, which amount shall not be fully covered by
insurance, shall be rendered against the Borrower or any Guarantor and any such
judgments or orders shall not have been vacated, discharged, stayed or bonded
pending appeal within 60 days from the entry thereof;
(l) any loss, theft, damage or destruction of any item or
items of Collateral, Pledged Collateral or Guarantor Collateral or other
property of the Borrower or any Guarantor occurs which (i) materially and
adversely affects the property, business, operation, prospects, or condition of
the Borrower or any Guarantor; or (ii) is material in amount and is not
adequately covered by insurance;
(m) there occurs a Material Adverse Effect;
(n) there is filed against the Borrower or any Guarantor any
civil or criminal action, suit or proceeding under any federal or state
racketeering statute (including, without limitation, the Racketeer Influenced
and Corrupt Organization Act of 1970), which action, suit or proceeding (1) is
not dismissed within one hundred twenty (120) days, and (2) could result in the
confiscation or forfeiture of any material portion of the Collateral;
(o) for any reason other than the failure of the Agent to take
any action available to it to maintain perfection of the Agent's Liens, pursuant
to the Loan Documents, any Loan Document ceases to be in full force and effect
or any Lien with respect to any material portion of the Collateral, Pledged
Collateral or Guarantor Collateral intended to be secured thereby ceases to be,
or is not, valid, perfected and prior to all other Liens (other than Permitted
Liens) or is terminated, revoked or declared void;
(p) an ERISA Event shall occur with respect to a Pension Plan
or Multi-employer Plan which has resulted or could reasonably be expected to
result in liability of the Borrower or any Subsidiary under applicable laws in
an aggregate amount in excess of $2,000,000; (ii) the aggregate amount of
Unfunded Pension Liability among all Pension Plans at any time exceeds
$2,000,000; or (iii) the Borrower, any Guarantor or any ERISA Affiliate shall
fail to pay when due, after the expiration of any applicable grace period, any
installment payment with respect to its withdrawal liability under Section 4201
of ERISA under a Multi-employer Plan in an aggregate amount in excess of
$2,000,000; or (iv) any Lien (save for contribution amounts not yet due) arises
in connection with any Plan; or
(q) there occurs a Change of Control.
11.2 Remedies. (a) If a Default or an Event of Default exists, the
Agent may, in its discretion, and shall, at the direction of the Majority
Lenders, do one or more of the following at any time or times and in any order,
without notice to or demand on the Borrower or any other Persons restrict the
amount of or refuse to make CAPEX Loans. If an Event of Default exists,
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the Agent shall, at the direction of the Majority Lenders, do one or more of the
following, in addition to the action described in the preceding sentence, at any
time or times and in any order, without notice to or demand on the Borrower or
any other Person: (a) terminate the Commitments and this Agreement; (b) declare
any or all Obligations to be immediately due and payable; provided, however,
that upon the occurrence of any Event of Default described in Sections 11.1(e),
11.1(g), or 11.1(h), the Commitments shall automatically and immediately expire
and all Obligations shall automatically become immediately due and payable
without notice or demand of any kind; and (c) pursue its other rights and
remedies under the Loan Documents and applicable law.
(b) If an Event of Default exists: (i) the Agent shall have
for the benefit of the Lenders, in addition to all other rights of the Agent and
the Lenders, the rights and remedies of a secured party under the UCC, the PPSA
and the Mortgages Act of Ontario; (ii) the Agent may, at any time, take
possession of the Collateral and keep it on the Borrower's or LDM Canada's
premises, at no cost to the Agent or any Lender, or remove any part of it to
such other place or places as the Agent may desire, or the Borrower shall, upon
the Agent's demand, at the Borrower's cost, assemble, or cause LDM Canada to
assemble, the Collateral and make it available to the Agent at a place
reasonably convenient to the Agent; and (iii) the Agent may sell and deliver any
Collateral at public or private sales, for cash, upon credit or otherwise, at
such prices and upon such terms as the Agent deems advisable, in its sole
discretion, and may, if the Agent deems it reasonable, postpone or adjourn any
sale of the Collateral by an announcement at the time and place of sale or of
such postponed or adjourned sale without giving a new notice of sale. Without in
any way requiring notice to be given in the following manner, the Borrower
agrees that any notice by the Agent of sale, disposition or other intended
action hereunder or in connection herewith, whether required by the UCC or
otherwise, shall constitute reasonable notice to the Borrower if such notice is
mailed by registered or certified mail, return receipt requested, postage
prepaid, or is delivered personally against receipt, at least five (5) Business
Days prior to such action to the Borrower's address specified in or pursuant to
Section 15.8. If any Collateral is sold on terms other than payment in full at
the time of sale, no credit shall be given against the Obligations until the
Agent or the Lenders receive payment, and if the buyer defaults in payment, the
Agent may resell the Collateral without further notice to the Borrower. In the
event the Agent seeks to take possession of all or any portion of the Collateral
by judicial process, the Borrower irrevocably waives: (a) the posting of any
bond, surety or security with respect thereto which might otherwise be required;
(b) any demand for possession prior to the commencement of any suit or action to
recover the Collateral; and (c) any requirement that the Agent retain possession
and not dispose of any Collateral until after trial or final judgment. The
Borrower agrees that the Agent has no obligation to preserve rights to the
Collateral or marshal any Collateral for the benefit of any Person. The Agent is
hereby granted a license or other right to use, without charge, the Borrower's
labels, patents, copyrights, name, trade secrets, trade names, trademarks, and
advertising matter, or any similar property, in completing production of,
advertising or selling any Collateral, and the Borrower's rights under all
licenses and all franchise agreements shall inure to the Agent's benefit. The
proceeds of sale shall be applied first to all expenses of sale, including
attorneys' fees, and then to the Obligations in whatever order the Agent elects.
The Agent will return any excess to the Borrower and the Borrower shall remain
liable for any deficiency.
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(c) If an Event of Default occurs, the Borrower hereby waives
all rights to notice and hearing prior to the exercise by the Agent of the
Agent's rights to repossess the Collateral without judicial process or to
replevy, attach or levy upon the Collateral without notice or hearing.
ARTICLE 12
TERM AND TERMINATION
12.1 Term and Termination. The term of this Agreement shall end on the
Stated Termination Date. The Agent upon direction from the Majority Lenders may
terminate this Agreement without notice upon the occurrence of an Event of
Default. The Agent shall provide notice to the Borrower of such termination;
provided that the failure by the Agent to provide such notice to the Borrower
shall not prohibit, restrict or otherwise affect the validity of the actions
taken by the Agent and/or the Majority Banks pursuant to this Section 12.1. Upon
the effective date of termination of this Agreement for any reason whatsoever,
all Obligations shall become immediately due and payable. Notwithstanding the
termination of this Agreement, until all Obligations are indefeasibly paid and
performed in full in cash, the Borrower shall remain bound by the terms of this
Agreement and shall not be relieved of any of its Obligations hereunder, and the
Agent and the Lenders shall retain all their rights and remedies hereunder
(including, without limitation, the Agent's Liens in and all rights and remedies
with respect to all then existing and after-arising Collateral).
ARTICLE 13
AMENDMENTS; WAIVER; PARTICIPATIONS; ASSIGNMENTS; SUCCESSORS
13.1 No Waivers Cumulative Remedies. No failure by the Agent or any
Lender to exercise any right, remedy, or option under this Agreement or any
present or future supplement thereto, or in any other agreement between or among
the Borrower and the Agent and/or any Lender, or delay by the Agent or any
Lender in exercising the same, will operate as a waiver thereof. No waiver by
the Agent or any Lender will be effective unless it is in writing, and then only
to the extent specifically stated. No waiver by the Agent or the Lenders on any
occasion shall affect or diminish the Agent's and each Lender's rights
thereafter to require strict performance by the Borrower of any provision of
this Agreement. The Agent's and each Lender's rights under this Agreement will
be cumulative and not exclusive of any other right or remedy which the Agent or
any Lender may have.
13.2 Amendments and Waivers. No amendment or waiver of any provision of
this Agreement or any other Loan Document, and no consent with respect to any
departure by the Borrower therefrom, shall be effective unless the same shall be
in writing and signed by the Majority Lenders (or by the Agent at the written
request of the Majority Lenders) and the Borrower and then any such waiver or
consent shall be effective only in the specific instance and
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for the specific purpose for which given; provided, however, that no such
waiver, amendment, or consent shall, unless in writing and signed by all the
Lenders and the Borrower and acknowledged by the Agent, do any of the following:
(a) increase or extend the Commitment of any Lender;
(b) postpone or delay any date fixed by this Agreement or any
other Loan Document for any payment of principal, interest, fees or other
amounts due to the Lenders (or any of them) hereunder or under any other Loan
Document;
(c) reduce the principal of, or the rate of interest specified
herein on any Loan, or any fees or other amounts payable hereunder or under any
other Loan Document;
(d) change the percentage of the Commitments or of the
aggregate unpaid principal amount of the Loans which is required for the Lender
or any of them to take any action hereunder;
(e) amend this Section or any provision of the Agreement
providing for consent or other action by all Lenders;
(f) release Collateral, Pledged Collateral or Guarantor
Collateral other than as permitted by Section 14.12;
(g) change the definition of "Majority Lenders."
and, provided, further, that no amendment, waiver or consent shall, unless in
writing and signed by the Agent, affect the rights or duties of the Agent under
this Agreement or any other Loan Document.
13.3 Assignments; Participations.
(a) Any Lender may, with the written consent of the Agent,
assign and delegate to one or more assignees (provided that no written consent
of the Agent shall be required in connection with any assignment and delegation
by a Lender to an Affiliate of such Lender) (each an "Assignee") all, or any
ratable part of all, of the Loans, the Commitments and the other rights and
obligations of such Lender hereunder, in a minimum aggregate amount of
$5,000,000; provided, however, that no such assignment shall be made unless a
pro rata assignment of such Lender's Loans and Commitments under, and as defined
in, the Loan and Security Agreement shall be made simultaneously to the same
Person; and provided further, that the Borrower and the Agent may continue to
deal solely and directly with such Lender in connection with the interest so
assigned to an Assignee until (i) written notice of such assignment, together
with payment instructions, addresses and related information with respect to the
Assignee, shall have been given to the Borrower and the Agent by such Lender and
the Assignee; (ii) such Lender and its Assignee shall have delivered to the
Borrower and the Agent an Assignment and Acceptance in the form of Exhibit F
("Assignment and Acceptance") and (iii) the assignor Lender or
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Assignee has paid to the Agent a processing fee in the amount of $2,500.
(b) From and after the date that the Agent notifies the
assignor Lender that it has received an executed Assignment and Acceptance and
payment of the above-referenced processing fee, (i) the Assignee thereunder
shall be a party hereto and, to the extent that rights and obligations have been
assigned to it pursuant to such Assignment and Acceptance, shall have the rights
and obligations of a Lender under the Loan Documents, and (ii) the assignor
Lender shall, to the extent that rights and obligations hereunder and under the
other Loan Documents have been assigned by it pursuant to such Assignment and
Acceptance, relinquish its rights and be released from its obligations under
this Agreement (and in the case of an Assignment and Acceptance covering all or
the remaining portion of an assigning Lender's rights and obligations under this
Agreement, such Lender shall cease to be a party hereto).
(c) By executing and delivering an Assignment and Acceptance,
the assigning Lender thereunder and the Assignee thereunder confirm to and agree
with each other and the other parties hereto as follows: (1) other than as
provided in such Assignment and Acceptance, such assigning Lender makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with this
Agreement or the other Loan Documents or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of this Agreement or any other
Loan Document furnished pursuant hereto; (2) such assigning Lender makes no
representation or warranty and assumes no responsibility with respect to the
financial condition of the Borrower, LDM Canada or any other Person or the
performance or observance by the Borrower, LDM Canada or any other Person of any
of its obligations under this Agreement or any other Loan Document furnished
pursuant hereto; (3) such Assignee confirms that it has received a copy of this
Agreement, together with such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into such
Assignment and Acceptance; (4) such Assignee will, independently and without
reliance upon the Agent, such assigning Lender or any other Lender, and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action under
this Agreement; (5) such Assignee appoints and authorizes the Agent to take such
action as agent on its behalf and to exercise such powers under this Agreement
and the other Loan Documents as are delegated to the Agent by the terms hereof,
together with such powers as are reasonably incidental thereto; and (6) such
Assignee agrees that it will perform in accordance with their terms all of the
obligations which by the terms of this Agreement are required to be performed by
it as a Lender.
(d) Within five Business Days after its receipt of notice by
the Agent that it has received an executed Assignment and Acceptance and payment
of the processing fee, the Borrower shall execute and deliver to the Agent, new
Notes evidencing such Assignee's assigned Loans and Commitment and, if the
assignor Lender has retained a portion of its Loans and its Commitment,
replacement Notes in the principal amount of the Loans retained by the assignor
Lender (such Notes to be in exchange for, but not in payment of, the Notes held
by such Lender). Immediately upon each Assignee's making its processing fee
payment under the Assignment and Acceptance, this Agreement shall be deemed to
be amended to the extent, but only to the extent, necessary to reflect the
addition of the Assignee and the resulting adjustment of the
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Commitments arising therefrom. The Commitment allocated to each Assignee shall
reduce such Commitments of the assigning Lender pro tanto.
(e) Any Lender may at any time sell to one or more commercial
banks, financial institutions, or other Persons not Affiliates of the Borrower
(a "Participant") participating interests in any Loans, the Commitment of that
Lender and the other interests of that Lender (the "originating Lender")
hereunder and under the other Loan Documents; provided, however that no such
participation shall be made unless a pro rata participation of such Lender's
Loans and Commitments under, and as defined in, the Loan and Security Agreement
shall be simultaneously made to the same Person; and provided further, that (i)
the originating Lender's obligations under this Agreement shall remain
unchanged, (ii) the originating Lender shall remain solely responsible for the
performance of such obligations, (iii) the Borrower and the Agent shall continue
to deal solely and directly with the originating Lender in connection with the
originating Lender's rights and obligations under this Agreement and the other
Loan Documents, and (iv) no Lender shall transfer or grant any participating
interest under which the Participant has rights to approve any amendment to, or
any consent or waiver with respect to, this Agreement or any other Loan
Document, and all amounts payable by the Borrower hereunder shall be determined
as if such Lender had not sold such participation; except that, if amounts
outstanding under this Agreement are due and unpaid, or shall have been declared
or shall have become due and payable upon the occurrence of an Event of Default,
each Participant shall be deemed to have the right of set-off in respect of its
participating interest in amounts owing under this Agreement to the same extent
as if the amount of its participating interest were owing directly to it as a
Lender under this Agreement..
(f) Notwithstanding any other provision in this Agreement, any
Lender may at any time create a security interest in, or pledge, all or any
portion of its rights under and interest in this Agreement and the Notes held by
it in favor of any Federal Reserve Bank in accordance with Regulation A of the
FRB or U.S. Treasury Regulation 31 CFR Section.203.14, and such Federal Reserve
Bank may enforce such pledge or security interest in any manner permitted under
applicable law.
ARTICLE 14
THE AGENT
14.1 Appointment and Authorization. Each Lender hereby designates and
appoints BankAmerica Business Credit, Inc. as its Agent under this Agreement and
the other Loan Documents and each Lender hereby irrevocably authorizes the Agent
to take such action on its behalf under the provisions of this Agreement and
each other Loan Document and to exercise such powers and perform such duties as
are expressly delegated to it by the terms of this Agreement or any other Loan
Document, together with such powers as are reasonably incidental thereto. The
Agent agrees to act as such on the express conditions contained in this Article
14. The provisions of this Article 14 are solely for the benefit of the Agent
and the Lenders and the Borrower shall have no rights as a third party
beneficiary of any of the provisions contained
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herein. Notwithstanding any provision to the contrary contained elsewhere in
this Agreement or in any other Loan Document, the Agent shall not have any
duties or responsibilities, except those expressly set forth herein, nor shall
the Agent have or be deemed to have any fiduciary relationship with any Lender,
and no implied covenants, functions, responsibilities, duties, obligations or
liabilities shall be read into this Agreement or any other Loan Document or
otherwise exist against the Agent. Except as expressly otherwise provided in
this Agreement, the Agent shall have and may use its sole discretion with
respect to exercising or refraining from exercising any discretionary rights or
taking or refraining from taking any actions which the Agent is expressly
entitled to take or assert under this Agreement and the other Loan Documents,
including, without limitation, the exercise of remedies pursuant to Section
11.2, and any action so taken or not taken shall be deemed consented to by the
Lenders.
14.2 Delegation of Duties. The Agent may execute any of its duties
under this Agreement or any other Loan Document by or through agents, employees
or attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. The Agent shall not be responsible for the
negligence or misconduct of any agent or attorney-in-fact that it selects as
long as such selection was made without gross negligence or willful misconduct.
14.3 Liability of Agent. None of the Agent-Related Persons shall (i) be
liable for any action taken or omitted to be taken by any of them under or in
connection with this Agreement or any other Loan Document or the transactions
contemplated hereby (except for its own gross negligence or willful misconduct),
or (ii) be responsible in any manner to any of the Lenders for any recital,
statement, representation or warranty made by the Borrower or any Subsidiary or
Affiliate of the Borrower, or any officer thereof, contained in this Agreement
or in any other Loan Document, or in any certificate, report, statement or other
document referred to or provided for in, or received by the Agent under or in
connection with, this Agreement or any other Loan Document, or the validity,
effectiveness, genuineness, enforceability or sufficiency of this Agreement or
any other Loan Document, or for any failure of the Borrower or any other party
to any Loan Document to perform its obligations hereunder or thereunder. No
Agent-Related Person shall be under any obligation to any Lender to ascertain or
to inquire as to the observance or performance of any of the agreements
contained in, or conditions of, this Agreement or any other Loan Document, or to
inspect the properties, books or records of the Borrower or any of the
Borrower's Subsidiaries or Affiliates.
14.4 Reliance by Agent. (a) The Agent shall be entitled to rely, and
shall be fully protected in relying, upon any writing, resolution, notice,
consent, certificate, affidavit, letter, telegram, facsimile, telex or telephone
message, statement or other document or conversation believed by it to be
genuine and correct and to have been signed, sent or made by the proper Person
or Persons, and upon advice and statements of legal counsel (including counsel
to the Borrower), independent accountants and other experts selected by the
Agent. The Agent shall be fully justified in failing or refusing to take any
action under this Agreement or any other Loan Document unless it shall first
receive such advice or concurrence of the Majority Lenders as it deems
appropriate and, if it so requests, it shall first be indemnified to its
satisfaction by the Lenders against any and all liability and expense which may
be incurred by it by reason of taking or continuing to take any such action. The
Agent shall in all cases be fully protected in acting, or
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in refraining from acting, under this Agreement or any other Loan Document in
accordance with a request or consent of the Majority Lenders and such request
and any action taken or failure to act pursuant thereto shall be binding upon
all of the Lenders.
(b) For purposes of determining compliance with the conditions
specified in Section 10.1, each Lender that has executed this Agreement shall be
deemed to have consented to, approved or accepted or to be satisfied with, each
document or other matter either sent by the Agent to such Lender for consent,
approval, acceptance or satisfaction, or required thereunder to be consented to
or approved by or acceptable or satisfactory to the Lender.
14.5 Notice of Default. The Agent shall not be deemed to have knowledge
or notice of the occurrence of any Default or Event of Default, except with
respect to defaults in the payment of principal, interest and fees required to
be paid to the Agent for the account of the Lenders, unless the Agent shall have
received written notice from a Lender or the Borrower referring to this
Agreement, describing such Default or Event of Default and stating that such
notice is a "notice of default." The Agent will notify the Lenders of its
receipt of any such notice. The Agent shall take such action with respect to
such Default or Event of Default as may be requested by the Majority Lenders in
accordance with Section 11; provided, however, that unless and until the Agent
has received any such request, the Agent may (but shall not be obligated to)
take such action, or refrain from taking such action, with respect to such
Default or Event of Default as it shall deem advisable.
14.6 Credit Decision. Each Lender acknowledges that none of the
Agent-Related Persons has made any representation or warranty to it, and that no
act by the Agent hereinafter taken, including any review of the affairs of the
Borrower and the Guarantors, shall be deemed to constitute any representation or
warranty by any Agent-Related Person to any Lender. Each Lender represents to
the Agent that it has, independently and without reliance upon any Agent-Related
Person and based on such documents and information as it has deemed appropriate,
made its own appraisal of and investigation into the business, prospects,
operations, property, financial and other condition and creditworthiness of the
Borrower and the Guarantors, and all applicable bank regulatory laws relating to
the transactions contemplated hereby, and made its own decision to enter into
this Agreement and to extend credit to the Borrower. Each Lender also represents
that it will, independently and without reliance upon any Agent-Related Person
and based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit analysis, appraisals and decisions in
taking or not taking action under this Agreement and the other Loan Documents,
and to make such investigations as it deems necessary to inform itself as to the
business, prospects, operations, property, financial and other condition and
creditworthiness of the Borrower or any Guarantor. Except for notices, reports
and other documents expressly herein required to be furnished to the Lenders by
the Agent, the Agent shall not have any duty or responsibility to provide any
Lender with any credit or other information concerning the business, prospects,
operations, property, financial and other condition or creditworthiness of the
Borrower or any Guarantor which may come into the possession of any of the
Agent-Related Persons.
14.7 Indemnification. Whether or not the transactions contemplated
hereby are
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consummated, the Lenders shall indemnify upon demand the Agent-Related Persons
(to the extent not reimbursed by or on behalf of the Borrower and without
limiting the obligation of the Borrower to do so), pro rata, from and against
any and all Indemnified Liabilities; provided, however, that no Lender shall be
liable for the payment to the Agent-Related Persons of any portion of such
Indemnified Liabilities resulting solely from such Person's gross negligence or
willful misconduct. Without limitation of the foregoing, each Lender shall
reimburse the Agent upon demand for its ratable share of any costs or
out-of-pocket expenses (including Attorney Costs) incurred by the Agent in
connection with the preparation, execution, delivery, administration,
modification, amendment or enforcement (whether through negotiations, legal
proceedings or otherwise) of, or legal advice in respect of rights or
responsibilities under, this Agreement, any other Loan Document, or any document
contemplated by or referred to herein, to the extent that the Agent is not
reimbursed for such expenses by or on behalf of the Borrower. The undertaking in
this Section shall survive the payment of all Obligations hereunder and the
resignation or replacement of the Agent.
14.8 Agent in Individual Capacity. BABC and its Affiliates may make
loans to, issue letters of credit for the account of, accept deposits from,
acquire equity interests in and generally engage in any kind of banking, trust,
financial advisory, underwriting or other business with the Borrower and its
Subsidiaries and Affiliates as though BABC were not the Agent hereunder and
without notice to or consent of the Lenders. The Lenders acknowledge that,
pursuant to such activities, BABC or its Affiliates may receive information
regarding the Borrower or its Affiliates (including information that may be
subject to confidentiality obligations in favor of the Borrower or such
Subsidiary) and acknowledge that the Agent shall be under no obligation to
provide such information to them. With respect to its Loans, BABC shall have the
same rights and powers under this Agreement as any other Lender and may exercise
the same as though it were not the Agent, and the terms "Lender" and "Lenders"
include BABC in its individual capacity.
14.9 Successor Agent. The Agent may resign as Agent upon 30 days'
notice to the Lenders. If the Agent resigns under this Agreement, the Majority
Lenders shall appoint from among the Lenders a successor agent for the Lenders.
If no successor agent is appointed prior to the effective date of the
resignation of the Agent, the Agent may appoint, after consulting with the
Lenders and the Borrower, a successor agent from among the Lenders. Upon the
acceptance of its appointment as successor agent hereunder, such successor agent
shall succeed to all the rights, powers and duties of the retiring Agent and the
term "Agent" shall mean such successor agent and the retiring Agent's
appointment, powers and duties as Agent shall be terminated. After any retiring
Agent's resignation hereunder as Agent, the provisions of this Section 14 shall
inure to its benefit as to any actions taken or omitted to be taken by it while
it was Agent under this Agreement. If no successor agent has accepted
appointment as Agent by the date which is 30 days following a retiring Agent's
notice of resignation, the retiring Agent's resignation shall nevertheless
thereupon become effective and the Lenders shall perform all of the duties of
the Agent hereunder until such time, if any, as the Majority Lenders appoint a
successor agent as provided for above.
14.10 Withholding Tax. (a) If any Lender is a "foreign corporation,
partnership or trust"
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within the meaning of the Code and such Lender claims exemption from, or a
reduction of, U.S. withholding tax under Sections 1441 or 1442 of the Code, such
Lender agrees with and in favor of the Agent, to deliver to the Agent:
(i) if such Lender claims an exemption from, or a
reduction of, withholding tax under a United States tax treaty, properly
completed IRS Forms 1001 and W-8 before the payment of any interest in the first
calendar year and before the payment of any interest in each third succeeding
calendar year during which interest may be paid under this Agreement;
(ii) if such Lender claims that interest paid
under this Agreement is exempt from United States withholding tax because it is
effectively connected with a United States trade or business of such Lender, two
properly completed and executed copies of IRS Form 4224 before the payment of
any interest is due in the first taxable year of such Lender and in each
succeeding taxable year of such Lender during which interest may be paid under
this Agreement, and IRS Form W-9; and
(iii) such other form or forms as may be required
under the Code or other laws of the United States as a condition to exemption
from, or reduction of, United States withholding tax.
Such Lender agrees to promptly notify the Agent of any change in circumstances
which would modify or render invalid any claimed exemption or reduction.
(b) If any Lender claims exemption from, or reduction of,
withholding tax under a United States tax treaty by providing IRS Form 1001 and
such Lender sells, assigns, grants a participation in, or otherwise transfers
all or part of the Obligations of the Borrower to such Lender, such Lender
agrees to notify the Agent of the percentage amount in which it is no longer the
beneficial owner of Obligations of the Borrower to such Lender. To the extent of
such percentage amount, the Agent will treat such Lender's IRS Form 1001 as no
longer valid.
(c) If any Lender claiming exemption from United States
withholding tax by filing IRS Form 4224 with the Agent sells, assigns, grants a
participation in, or otherwise transfers all or part of the Obligations of the
Borrower to such Lender, such Lender agrees to undertake sole responsibility for
complying with the withholding tax requirements imposed by Sections 1441 and
1442 of the Code.
(d) If any Lender is entitled to a reduction in the applicable
withholding tax, the Agent may withhold from any interest payment to such Lender
an amount equivalent to the applicable withholding tax after taking into account
such reduction. If the forms or other documentation required by subsection (a)
of this Section are not delivered to the Agent, then the Agent may withhold from
any interest payment to such Lender not providing such forms or other
documentation an amount equivalent to the applicable withholding tax.
(e) If the IRS or any other Governmental Authority of the
United States or other jurisdiction asserts a claim that the Agent did not
properly withhold tax from amounts paid
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to or for the account of any Lender (because the appropriate form was not
delivered, was not properly executed, or because such Lender failed to notify
the Agent of a change in circumstances which rendered the exemption from, or
reduction of, withholding tax ineffective, or for any other reason) such Lender
shall indemnify the Agent fully for all amounts paid, directly or indirectly, by
the Agent as tax or otherwise, including penalties and interest, and including
any taxes imposed by any jurisdiction on the amounts payable to the Agent under
this Section, together with all costs and expenses (including Attorney Costs).
The obligation of the Lenders under this subsection shall survive the payment of
all Obligations and the resignation or replacement of the Agent.
14.11 [RESERVED].
14.12 Collateral Matters.
(a) The Lenders hereby irrevocably authorize the Agent, at its
option and in its sole discretion, to release any Agent's Lien upon any
Collateral, Pledged Collateral or Guarantor Collateral (i) upon the termination
of the Commitments and payment and satisfaction in full by Borrower of all Loans
and all other Obligations; (ii) constituting property being sold or disposed of
if the Borrower certifies to the Agent that the sale or disposition is made in
compliance with Section 9.9 (and the Agent may rely conclusively on any such
certificate, without further inquiry); (iii) constituting property in which the
Borrower or a Guarantor owned no interest at the time the Lien was granted or at
any time thereafter; or (iv) constituting property leased to the Borrower or LDM
Canada under a lease which has expired or been terminated in a transaction
permitted under this Agreement. Except as provided above, the Agent will not
release any of the Agent's Liens without the prior written authorization of the
Majority Lenders; provided that the Agent may release the Agent's Liens on
Collateral, Pledged Collateral or Guarantor Collateral valued in the aggregate
of not more than $5,000,000 without the prior written authorization of all of
the Lenders. Upon request by the Agent or the Borrower at any time, the Lenders
will confirm in writing the Agent's authority to release any Agent's Liens upon
particular types or items of Collateral, Pledged Collateral or Guarantor
Collateral pursuant to this Section 14.11.
(b) Upon receipt by the Agent of any authorization required
pursuant to Section 14.11(a) from the Majority Lenders or Lenders, as
applicable, of the Agent's authority to release any Agent's Liens upon
particular types or items of Collateral, Pledged Collateral or Guarantor
Collateral, and upon at least five (5) Business Days' prior written request by
the Borrower, the Agent shall (and is hereby irrevocably authorized by the
Lenders to) execute such documents as may be necessary to evidence the release
of the Agent's Liens upon such Collateral, Pledged Collateral or Guarantor
Collateral; provided, however, that (i) the Agent shall not be required to
execute any such document on terms which, in the Agent's opinion, would expose
the Agent to liability or create any obligation or entail any consequence other
than the release of such Liens without recourse or war ranty, and (ii) such
release shall not in any manner discharge, affect or impair the Obligations or
any Liens (other than those expressly being released) upon (or obligations of
the Borrower or a Guarantor in respect of) all interests retained by the
Borrower or the relevant Guarantor, including (without limitation) the proceeds
of any sale, all of which shall continue to constitute part of the Collateral.
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(c) The Agent shall have no obligation whatsoever to any of
the Lenders to assure that the Collateral, Pledged Collateral or Guarantor
Collateral, exists or is owned by the Borrower or a Guarantor or is cared for,
protected or insured or has been encumbered, or that the Agent's Liens have been
properly or sufficiently or lawfully created, perfected, protected or enforced
or are entitled to any particular priority, or to exercise at all or in any
particular manner or under any duty of care, disclosure or fidelity, or to
continue exercising, any of the rights, authorities and powers granted or
available to the Agent pursuant to any of the Loan Documents, it being
understood and agreed that in respect of the Collateral, Pledged Collateral or
Guarantor Collateral, or any act, omission or event related thereto, the Agent
may act in any manner it may deem appropriate, in its sole discretion given the
Agent's own interest in the Collateral, Pledged Collateral or Guarantor
Collateral, in its capacity as one of the Lenders and that the Agent shall have
no other duty or liability whatsoever to any Lender as to any of the foregoing.
14.13 Restrictions on Actions by Lenders; Sharing of Payments. (a) Each
of the Lenders agrees that it shall not, without the express consent of the
Agent, and that it shall, to the extent it is lawfully entitled to do so, upon
the request of the Agent, set off against the Obligations, any amounts owing by
such Lender to the Borrower or any Guarantor or any accounts of the Borrower or
such Guarantor now or hereafter maintained with such Lender. Each of the Lenders
further agrees that it shall not, unless specifically requested to do so by the
Agent, take or cause to be taken any action, including, without limitation, the
commencement of any legal or equitable proceedings, to foreclose any Lien on, or
otherwise enforce any security interest in, any of the Collateral, Pledged
Collateral or Guarantor Collateral, the purpose of which is, or could be, to
give such Lender any preference or priority against the other Lenders with
respect to the Collateral, Pledged Collateral or Guarantor Collateral.
(b) Subject to Section 4.8, if, at any time or times any
Lender shall receive (i) by payment, foreclosure, setoff or otherwise, any
proceeds of Collateral, Pledged Collateral or Guarantor Collateral, or any
payments with respect to the Obligations of the Borrower to such Lender arising
under, or relating to, this Agreement or the other Loan Documents, except for
any such proceeds or payments received by such Lender from the Agent pursuant to
the terms of this Agreement, or (ii) payments from the Agent in excess of such
Lender's ratable portion of all such distributions by the Agent, such Lender
shall promptly (1) turn the same over to the Agent, in kind, and with such
endorsements as may be required to negotiate the same to the Agent, or in same
day funds, as applicable, for the account of all of the Lenders and for
application to the Obligations in accordance with the applicable provisions of
this Agreement, or (2) purchase, without recourse or warranty, an undivided
interest and participation in the Obligations owed to the other Lenders so that
such excess payment received shall be applied ratably as among the Lenders in
accordance with their Pro Rata Shares; provided, however, that if all or part of
such excess payment received by the purchasing party is thereafter recovered
from it, those purchases of participations shall be rescinded in whole or in
part, as applicable, and the applicable portion of the purchase price paid
therefor shall be returned to such purchasing party, but without interest except
to the extent that such purchasing party is required to pay interest in
connection with the recovery of the excess payment.
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14.14 Agency for Perfection. Each Lender hereby appoints each other
Lender as agent for the purpose of perfecting the Lenders' security interest in
assets which, in accordance with Article 9 of the UCC or the applicable
provision of the PPSA, can be perfected only by possession. Should any Lender
(other than the Agent) obtain possession of any such Collateral, Pledged
Collateral or Guarantor Collateral such Lender shall notify the Agent thereof,
and, promptly upon the Agent's request therefor shall deliver such Collateral,
Pledged Collateral or Guarantor Collateral to the Agent or in accordance with
the Agent's instructions.
14.15 Payments by Agent to Lenders. All payments to be made by the
Agent to the Lenders shall be made by bank wire transfer or internal transfer of
immediately available funds to Bank of America National Trust & Savings
Association, Xxxxxxx, Xxxxxxxx, 00000, ABA 07 0000000, Account No. 71 09539, for
BankAmerica Business Credit, Inc., or pursuant to such other wire transfer
instructions as each party may designate for itself by written notice to the
Agent. Concurrently with each such payment, the Agent shall identify whether
such payment (or any portion thereof) represents principal, premium or interest
on the CAPEX Loans, Term Loans or otherwise.
14.16 Concerning the Collateral and the Related Loan Documents. Each
Lender authorizes and directs the Agent to enter into this Agreement and the
other Loan Documents relating to the Collateral, Pledged Collateral and
Guarantor Collateral, for the ratable benefit of the Lenders. Each Lender agrees
that any action taken by the Agent or Majority Lenders in accordance with the
terms of this Agreement or the other Loan Documents relating to the Collateral,
Pledged Collateral and Guarantor Collateral, and the exercise by the Agent or
the Majority Lenders of their respective powers set forth therein or herein,
together with such other powers that are reasonably incidental thereto, shall be
binding upon all of the Lenders.
14.17 Field Audit and Examination Reports; Disclaimer by Lenders. By
signing this Agreement, each Lender:
(a) is deemed to have requested that the Agent furnish such
Lender, promptly after it becomes available, a copy of each field audit or
examination report (each a "Report" and collectively, "Reports") prepared by the
Agent;
(b) expressly agrees and acknowledges that neither BABC nor
the Agent (i) makes any representation or warranty as to the accuracy of any
Report, or (ii) shall be liable for any information contained in any Report;
(c) expressly agrees and acknowledges that the Reports are not
comprehensive audits or examinations, that the Agent or other party performing
any audit or examination will inspect only specific information regarding the
Borrower and the Guarantors and will rely significantly upon the Borrower's
books and records, as well as on representations of the Borrower's personnel;
(d) agrees to keep all Reports confidential and strictly for
its internal use, and not to distribute or use any Report in any other manner;
and
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(e) without limiting the generality of any other
indemnification provision contained in this Agreement, agrees: (i) to hold the
Agent and any such other Lender preparing a Report harmless from any action the
indemnifying Lender may take or conclusion the indemnifying Lender may reach or
draw from any Report in connection with any loans or other credit accommodations
that the indemnifying Lender has made or may make to the Borrower, or the
indemnifying Lender's participation in, or the indemnifying Lender's purchase
of, a loan or loans of the Borrower; and (ii) to pay and protect, and indemnify,
defend and hold the Agent and any such other Lender preparing a Report harmless
from and against, the claims, actions, proceedings, damages, costs, expenses and
other amounts (including, without limitation attorney costs) incurred by the
Agent and any such other Lender preparing a Report as the direct or indirect
result of any third parties who might obtain all or part of any Report through
the indemnifying Lender.
ARTICLE 15
MISCELLANEOUS
15.1 Cumulative Remedies; No Prior Recourse to Collateral. The
enumeration herein of the Agent's and each Lender's rights and remedies is not
intended to be exclusive, and such rights and remedies are in addition to and
not by way of limitation of any other rights or remedies that the Agent and the
Lenders may have under the UCC or other applicable law. The Agent and the
Lenders shall have the right, in their sole discretion, to determine which
rights and remedies are to be exercised and in which order. The exercise of one
right or remedy shall not preclude the exercise of any others, all of which
shall be cumulative. The Agent and the Lenders may, without limitation, proceed
directly against the Borrower to collect the Obligations without any prior
recourse to the Collateral, the Pledged Collateral or the Guarantor Collateral.
No failure to exercise and no delay in exercising, on the part of the Agent or
any Lender, any right, remedy, power or privilege hereunder, shall operate as a
waiver thereof; nor shall any single or partial exercise of any right, remedy,
power or privilege hereunder preclude any other or further exercise thereof or
the exercise of any other right, remedy, power or privilege.
15.2 Severability. The illegality or unenforceability of any provision
of this Agreement or any instrument or agreement required hereunder shall not in
any way affect or impair the legality or enforceability of the remaining
provisions of this Agreement or any instrument or agreement required hereunder.
15.3 Governing Law; Choice of Forum; Service of Process; Jury Trial
Waiver. (a) THIS AGREEMENT SHALL BE INTERPRETED AND THE RIGHTS AND LIABILITIES
OF THE PARTIES HERETO DETERMINED IN ACCORDANCE WITH THE INTERNAL LAWS (AS
OPPOSED TO THE CONFLICT OF LAWS PROVISIONS PROVIDED THAT PERFECTION ISSUES WITH
RESPECT TO ARTICLE 9 OF THE UCC MAY GIVE EFFECT TO APPLICABLE CHOICE OR CONFLICT
OF LAW RULES SET FORTH IN ARTICLE 9 OF THE UCC) OF THE STATE OF ILLINOIS;
PROVIDED THAT THE AGENT AND THE
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LENDERS SHALL RETAIN ALL RIGHTS ARISING UNDER FEDERAL LAW.
(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE
OF ILLINOIS OR OF THE UNITED STATES FOR THE NORTHERN DISTRICT OF ILLINOIS, AND
BY EXECUTION AND DELIVERY OF THIS AGREEMENT, THE BORROWER, THE AGENT AND THE
LENDERS CONSENT, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE NON-EXCLUSIVE
JURISDICTION OF THOSE COURTS. EACH OF THE BORROWER, THE AGENT AND THE LENDERS
IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE
OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER
HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN SUCH JURISDICTION IN RESPECT
OF THIS AGREEMENT OR ANY DOCUMENT RELATED HERETO. NOTWITHSTANDING THE FOREGOING:
(1) THE AGENT AND THE LENDERS SHALL HAVE THE RIGHT TO BRING ANY ACTION OR
PROCEEDING AGAINST THE BORROWER OR ITS PROPERTY IN THE COURTS OF ANY OTHER
JURISDICTION THE AGENT OR THE LENDERS DEEM NECESSARY OR APPROPRIATE IN ORDER TO
REALIZE ON THE COLLATERAL OR OTHER SECURITY FOR THE OBLIGATIONS AND (2) EACH OF
THE PARTIES HERETO ACKNOWLEDGES THAT ANY APPEALS FROM THE COURTS DESCRIBED IN
THE IMMEDIATELY PRECEDING SENTENCE MAY HAVE TO BE HEARD BY A COURT LOCATED
OUTSIDE THOSE JURISDICTIONS.
(c) THE BORROWER HEREBY WAIVES PERSONAL SERVICE OF ANY AND ALL
PROCESS UPON IT AND CONSENTS THAT ALL SUCH SERVICE OF PROCESS MAY BE MADE BY
REGISTERED MAIL (RETURN RECEIPT REQUESTED) DIRECTED TO THE BORROWER AT ITS
ADDRESS SET FORTH IN SECTION 15.8 AND SERVICE SO MADE SHALL BE DEEMED TO BE
COMPLETED FIVE (5) DAYS AFTER THE SAME SHALL HAVE BEEN SO DEPOSITED IN THE U.S.
MAILS. NOTHING CONTAINED HEREIN SHALL AFFECT THE RIGHT OF AGENT OR THE LENDERS
TO SERVE LEGAL PROCESS BY ANY OTHER MANNER PERMITTED BY LAW.
(d) NOTWITHSTANDING ANY OTHER PROVISION OF THIS AGREEMENT TO
THE CONTRARY, ANY CONTROVERSY OR CLAIM BETWEEN OR AMONG THE PARTIES, INCLUDING
BUT NOT LIMITED TO THOSE ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY
OTHER LOAN DOCUMENT AND ANY CLAIM BASED ON OR ARISING FROM AN ALLEGED TORT,
SHALL AT THE REQUEST OF EITHER PARTY HERETO BE DETERMINED BY ARBITRATION. The
arbitration shall be conducted in accordance with the United States Arbitration
Act (Title 9, U.S. Code), notwithstanding any choice of law provision in this
Agreement, and under the Commercial Rules of the American Arbitration
Association ("AAA"). The arbitrator(s) shall give effect to statutes of
limitation in determining any claim. Any controversy concerning whether an issue
is arbitrable shall be determined by the arbitrator(s). Judgment upon the
arbitration award may be entered in any court having jurisdiction. The
institution and maintenance of an action for judicial relief or pursuant to a
provisional or ancillary remedy shall not constitute a waiver of the right of
either party, including the plaintiff, to submit the
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controversy or claim to arbitration if any other party contests such action for
judicial relief.
(e) Notwithstanding the provisions of (d) above, no
controversy or claim shall be submitted to arbitration without the consent of
all parties if, at the time of the proposed submission, such controversy or
claim arises from or related to an obligation to the Lender which is secured by
real estate property collateral (exclusive of real estate space lease
assignments). If all the parties do not consent to submission of such a
controversy or claim to arbitration, the controversy or claim shall be
determined as provided in this Section 15.3(e).
(f) At the request of either party a controversy or claim
which is not submitted to arbitration as provided and limited in Section 15.3(d)
and (e) shall be determined by judicial reference. If such an election is made,
the parties shall designate to the court a referee or referees selected under
the auspices of the AAA in the same manner as arbitrators are selected in
AAA-sponsored proceedings. The presiding referee of the panel, or the referee if
there is a single referee, shall be an active attorney or retired judge.
Judgment upon the award rendered by such referee or referees shall be entered in
the court in which such proceeding was commenced.
(g) No provision of Sections (d) through (g) shall limit the
right of the Agent or the Lenders to exercise self-help remedies such as setoff,
foreclosure against or sale of any real or personal property collateral or
security, or obtaining provisional or ancillary remedies from a court of
competent jurisdiction before, after, or during the pendency of any arbitration
or other proceeding. The exercise of a remedy does not waive the right of either
party to resort to arbitration or reference. At the Agent's option, foreclosure
under a deed of trust or mortgage may be accomplished either by exercise of
power of sale under the deed of trust or mortgage or by judicial foreclosure.
15.4 Waiver of Jury Trial. (a) SUBJECT TO THE PROVISIONS OF SECTION
15.3(d), THE BORROWER, THE LENDERS AND THE AGENT EACH WAIVE THEIR RESPECTIVE
RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING
OUT OF OR RELATED TO THIS AGREEMENT, THE OTHER LOAN DOCUMENTS, OR THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY, IN ANY ACTION, PROCEEDING OR OTHER
LITIGATION OF ANY TYPE BROUGHT BY ANY OF THE PARTIES AGAINST ANY OTHER PARTY OR
ANY AGENT-RELATED PERSON, PARTICIPANT OR ASSIGNEE, WHETHER WITH RESPECT TO
CONTRACT CLAIMS, TORT CLAIMS, OR OTHERWISE. THE BORROWER, THE LENDERS AND THE
AGENT EACH AGREE THAT ANY SUCH CLAIM OR CAUSE OF ACTION SHALL BE TRIED BY A
COURT TRIAL WITHOUT A JURY. WITHOUT LIMITING THE FOREGOING, THE PARTIES FURTHER
AGREE THAT THEIR RESPECTIVE RIGHT TO A TRIAL BY JURY IS WAIVED BY OPERATION OF
THIS SECTION AS TO ANY ACTION, COUNTERCLAIM OR OTHER PROCEEDING WHICH SEEKS, IN
WHOLE OR IN PART, TO CHALLENGE THE VALIDITY OR ENFORCEABILITY OF THIS AGREEMENT
OR THE OTHER LOAN DOCUMENTS OR ANY PROVISION HEREOF OR THEREOF. THIS WAIVER
SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS
TO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS.
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(b) THE BORROWER AGREES THAT IT WILL NOT ASSERT AGAINST AGENT
OR ANY LENDER ANY CLAIM FOR CONSEQUENTIAL, INCIDENTAL, SPECIAL OR PUNITIVE
DAMAGES IN CONNECTION WITH THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR
THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
15.5 Survival of Representations and Warranties. All of the Borrower's
representations and warranties contained in this Agreement shall survive the
execution, delivery, and acceptance thereof by the parties, notwithstanding any
investigation by the Agent or the Lenders or their respective agents.
15.6 Other Security and Guaranties. The Agent, may, without notice or
demand and without affecting the Borrower's obligations hereunder, from time to
time: (a) take from any Person and hold collateral (other than the Collateral)
for the payment of all or any part of the Obligations and exchange, enforce or
release such collateral or any part thereof; and (b) accept and hold any
endorsement or guaranty of payment of all or any part of the Obligations and
release or substitute any such endorser or guarantor, or any Person who has
given any Lien in any other collateral as security for the payment of all or any
part of the Obligations, or any other Person in any way obligated to pay all or
any part of the Obligations.
15.7 Fees and Expenses. The Borrower agrees to pay to the Agent, for
its benefit, on demand, all reasonable costs and expenses that Agent pays or
incurs in connection with the negotiation, preparation, consummation,
administration, enforcement, and termination of this Agreement, including,
without limitation: (a) Attorney Costs; (b) costs and expenses (including
attorneys' and paralegals' fees and disbursements which shall include the
allocated costs of Agent's in-house counsel fees and disbursements) for any
amendment, supplement, waiver, consent, or subsequent closing in connection with
the Loan Documents and the transactions contemplated thereby; (c) costs and
expenses of lien and title searches and title insurance; (d) taxes, fees and
other charges for recording the Mortgages, filing financing statements and
continuations, and other actions to perfect, protect, and continue the Agent's
Liens (including costs and expenses paid or incurred by the Agent in connection
with the consummation of Agreement); (e) sums paid or incurred to pay any amount
or take any action required of the Borrower under the Loan Documents that the
Borrower fails to pay or take; (f) costs of appraisals, inspections, and
verifications of the Collateral, the Pledged Collateral and Guarantor Collateral
including, without limitation, travel, lodging, and meals for inspections of the
Collateral and the Borrower's operations by the Agent's and each of the Lenders'
agents plus the Agent's then customary charge for field examinations and audits
and the preparation of reports thereof (such charge is currently $500 per day
(or portion thereof) for each agent or employee of the Agent with respect to
each field examination or audit); (g) costs and expenses of forwarding loan
proceeds, collecting checks and other items of payment, and establishing and
maintaining Payment Accounts and lock boxes; (h) costs and expenses of
preserving and protecting the Collateral, the Pledged
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Collateral and Guarantor Collateral and otherwise enforce the provisions of the
Loan Documents, or to defend any claims made or threatened against the Agent
or any Lender arising out of the transactions contemplated hereby (including
without limitation, preparations for and consultations concerning any such
matters). The foregoing shall not be construed to limit any other provisions of
the Loan Documents regarding costs and expenses to be paid by the Borrower. All
of the foregoing costs and expenses shall be charged to the Borrower's Loan
Account under, and as defined in, the Loan and Security Agreement, as Revolving
Loans.
15.8 Notices. Except as otherwise provided herein, all notices, demands
and requests that any party is required or elects to give to any other shall be
in writing, or by a telecommunications device capable of creating a written
record, and any such notice shall become effective (a) upon personal delivery
thereof, including, but not limited to, delivery by overnight mail and courier
service, (b) four (4) days after it shall have been mailed by United States
mail, certified or registered, with postage prepaid, or (c) in the case of
notice by such a telecommunications device, when properly transmitted, in each
case addressed to the party to be notified as follows:
If to the Agent or to BABC:
BankAmerica Business Credit, Inc.
000 Xxxxx XxXxxxx Xxxxxx
00xx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Portfolio Manager, LDM
Fax No.: (000) 000-0000
If to Borrower:
LDM Technologies, Inc.
0000 Xxxxxxxxx Xxxxx Xxxxx
Xxxxxx Xxxxx, XX 00000
Attention: Xxxxxx X. Xxxxx
Fax No.: (000) 000-0000
with copies to:
LDM Technologies, Inc.
0000 Xxxxxxxxx Xxxxx Xxxxx
Xxxxxx Xxxxx, XX 00000
Attention: Xxxx X. Xxxxxxxx
Fax No.: (000) 000-0000
LDM Technologies, Inc.
0000 Xxxxxxxxx
Xxxx, XX 00000
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Attention: Xxxxxx X. Xxxxx
Fax No.: (000) 000-0000
Xxxx & Xxxxxxxxx
Fifth Floor
000 Xxxx Xxx Xxxxxx Xxxx
Xxxx, XX 00000-0000
Attention: Xxxxxxx X. Xxxxx
Fax No.: (000) 000-0000
or to such other address as each party may designate for itself by like notice.
Failure or delay in delivering copies of any notice, demand, request, consent,
approval, declaration or other communication to the persons designated above to
receive copies shall not adversely affect the effectiveness of such notice,
demand, request, consent, approval, declaration or other communication.
15.9 Waiver of Notices. Unless otherwise expressly provided herein, the
Borrower waives presentment, protest and notice of demand or dishonor and
protest as to any instrument, notice of intent to accelerate the Obligations and
notice of acceleration of the Obligations, as well as any and all other notices
to which it might otherwise be entitled. No notice to or demand on the Borrower
which the Agent or any Lender may elect to give shall entitle the Borrower to
any or further notice or demand in the same, similar or other circumstances.
15.10 Binding Effect. The provisions of this Agreement shall be binding
upon and inure to the benefit of the respective representatives, successors, and
assigns of the parties hereto; provided, however, that no interest herein may be
assigned by the Borrower without prior written consent of the Agent and each
Lender. The rights and benefits of the Agent and the Lenders hereunder shall, if
such Persons so agree, inure to any party acquiring any interest in the
Obligations or any part thereof.
15.11 Indemnity of the Agent and the Lenders by the Borrower. The
Borrower agrees to defend indemnify and hold the Agent-Related Persons, and each
Lender and each of its respective officers, directors, employees, counsel,
agents and attorneys-in-fact (each, an "Indemnified Person") harmless from and
against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, charges, expenses and disbursements (including
Attorney Costs) of any kind or nature whatsoever which may at any time
(including at any time following repayment of the Loans and the termination,
resignation or replacement of the Agent or replacement of any Lender) be imposed
on, incurred by or asserted against any such Person in any way relating to or
arising out of this Agreement or any document contemplated by or referred to
herein, or the transactions contemplated hereby, or any action taken or omitted
by any such Person under or in connection with any of the foregoing, including
with respect to any investigation, litigation or proceeding (including any
Insolvency Proceeding or appellate proceeding) related to or arising out of this
Agreement or the Loans or the use of the proceeds thereof, whether or not any
Indemnified Person is a party thereto (all the foregoing, collectively, the
"Indemnified Liabilities"); provided, that the Borrower shall have no obligation
hereunder to any Indemnified Person with respect to Indemnified Liabilities
resulting solely from
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the gross negligence or willful misconduct of such Indemnified Person. The
agreements in this Section shall survive payment of all other Obligations.
15.12 Final Agreement. This Agreement and the other Loan Documents are
intended by the Borrower, the Agent and the Lenders to be the final, complete,
and exclusive expression of the agreement between them. This Agreement
supersedes any and all prior oral or written agreements relating to the subject
matter hereof. No modification, rescission, waiver, release, or amendment of any
provision of this Agreement or any other Loan Document shall be made, except by
a written agreement signed by the Borrower and a duly authorized officer of each
of the Agent and the requisite Lenders.
15.13 Counterparts. This Agreement may be executed in any number of
counterparts, and by the Agent, each Lender and the Borrower in separate
counterparts, each of which shall be an original, but all of which shall
together constitute one and the same agreement.
15.14 Captions. The captions contained in this Agreement are for
convenience of reference only, are without substantive meaning and should not be
construed to modify, enlarge, or restrict any provision.
15.15 Right of Setoff. In addition to any rights and remedies of the
Lenders provided by law, if an Event of Default exists or the Loans have been
accelerated, each Lender is authorized at any time and from time to time,
without prior notice to the Borrower, any such notice being waived by the
Borrower to the fullest extent permitted by law, to set off and apply any and
all deposits (general or special, time or demand, provisional or final) at any
time held by, and other indebtedness at any time owing by, such Lender to or for
the credit or the account of the Borrower against any and all Obligations owing
to such Lender, now or hereafter existing, irrespective of whether or not the
Agent or such Lender shall have made demand under this Agreement or any Loan
Document and although such Obligations may be contingent or unmatured. Each
Lender agrees promptly to notify the Borrower and the Agent after any such
set-off and application made by such Lender; provided, however, that the failure
to give such notice shall not affect the validity of such set-off and
application.
* * *
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IN WITNESS WHEREOF, the parties have entered into this
Agreement on the date first above written.
"BORROWER"
LDM TECHNOLOGIES, INC.
By________________________________
Title:
"AGENT"
BankAmerica Business Credit, Inc., as
the Agent
By________________________________
Title:
"LENDERS"
Commitment: CAPEX
Facility: $10,000,000 BankAmerica Business Credit, Inc., as
a Lender
Term
Facility: $66,000,000 By________________________________
Title:
S-1-
102
Total Commitment: CAPEX
Facility: $10,000,000
Term
Facility: $66,000,000
S-2-
103
[ON FILE WITH THE BANK]
